Timber exporters are scrambling to respond to the conviction in a Swedish court of a company accused of importing Myanmar teak without sufficient proof that it was legally traded. The importer, Almatra Nordic, had been prosecuted under the EU Timber Regulation (EUTR), which bans placing illegal or high risk wood on the EU market.
The company had reportedly relied on the “green folder” issued by the Myanmar Forest Products Merchants Federation (MFPMF), which the court did not consider to be adequate proof that a shipment of teak imported into Sweden had been legally harvested. Almtra Nordic, was fined US$1700 and has informed Sweden’s EUTR regulator that under current circumstances it will no longer source wood from Myanmar.
On November 25, the MFPMF told a press conference that Myanmar was trying to join the Voluntary Partnership Agreement (VPA) for Forest Law Enforcement, Governance and Trade (FLEGT).
The federation said that under Myanmar law, local companies buy wood from Myanma Timber Enterprise (MTE) to make semi-value added products and value added products for export. Subject to government recommendations, MFPMF said it issues Chain of Custody (CoC) certificates to the companies concerned.
The Swedish case has raised the issue of reputational risk for exporters and importers of Myanmar timber. MFPMF said it was willing to assist timber traders in providing additional information on request, if it was approached with queries arising from the EUTR regime.
Federation chair U Sein Win told journalists that the Swedish court had not made it clear what further information was required to establish that a consignment of timber was legal.
“The importer apparently did not seek additional documentation from MTE or the forestry department,” he said, adding that further complications had arisen because the shipment had transited via Singapore. “If we can export directly from Myanmar, I don’t think it will be this complicated,” he said.
U Myo Min, a director in the Forest Department of the Ministry of Natural Resources and Environmental Conservation, told the press conference that officials were trying to determine what more would be needed to prove Myanmar timber was legally traded.
“The Myanmar Timber Legality Assurance System [MTLAS] exists, but it has weaknesses. With the help of the EU, we’re now conducting a gap analysis of MTLAS to improve the system,” he said.
Under Myanmar law, timber bought from the MTE is considered legal. “It’s the obligation of the importer to comply with local standards and regulations. If an importer asks for any additional documents, we’re ready to help,” he said.
MTE confirmed that they would be prepared to provide any additional documentation required by importers to satisfy regulations in the importing country governing the legality of the timber.
The MFPMF “green folder” issued to buyers as evidence of legal harvesting includes documentation on specifications, DO (Destination Origin) invoices, a CO (Country of Origin) statement from MTE, legal certificates provided by the Forestry Department, an export licence and a customs declaration, as well as any further documents provided by the government departments concerned.
In the event that these were not sufficient for EUTR purposes, more documents could be provided at the request of the importer, journalists were told.
MTE already has clear procedures ensuring the traceability of the timber supply chain, but more reliable systems would be developed to improve the system.
Hugh Speechly, FLEGT adviser for the Forest Department, said the EUTR had provisions for tracing illegal timber that depended on clear evidence of legality produced by the importer. “Buyers of wood from Myanmar should be a little bit more persistent over documents provided by MTE,” he said. “The importer did not do enough due diligence to mitigate the risk of illegal timber. But this does not mean the timber was illegal,” he said.
The FLEGT Interim Task Force comprises 24 members – eight each from the government (FD, MTE, Trade Department, customs and police), the private sector (all of whom are MFPMF members) and civil society organisations representing timber-producing regions.
U Myo Min said that joining the FLEGT process would mean greater transparency across the length of the supply chain, from logging to export. It will include independent monitoring by civil society groups and the community itself to guarantee that the wood cut was legal.
According to Forest Department data, 27 Myanmar companies exported 2472 tonnes of teak, 169 tonnes of hardwood and 810 tonnes of other types of wood to the EU in the 2015-16 fiscal year. Exports to the EU for this fiscal year, as of November 20, amounted to 2344 tonnes of teak, 7 tonnes of hardwood and 9 tonnes of other types of wood from 34 companies.
The Forest Department also records exports to Singapore, but some of those shipments are then shipped to final destinations, which the department does not track. As a result, some of the Singaporean export data may include shipments that also ultimately end up in Europe.
Exports to Singapore for the 2015-16 fiscal year totalled 5188 tonnes of teak, 718 tonnes of hardwood and 4440 tonnes of other woods.
Source: Muammar Times
