About our work

The EU FLEGT Facility, supported by the Swedish International Development Agency (Sida), works to contribute to poverty eradication and sustainable forest management in Asia through support to the implementation of the EU FLEGT Action Plan.

FLEGT and SmEs in Mekong countries

Understanding the situation of small and informal forest products enterprises in the Mekong region in the context of FLEGT Voluntary Partnership Agreements

The Swedish International Development Agency (Sida) is funding the EU FLEGT Facility to:

  • Increase knowledge about small and micro-sized entities (SmEs) and smallholders in the Mekong region.
  • Address potential challenges for these timber companies to operate legally in the context of FLEGT Voluntary Partnership Agreements (VPAs).
  • Analyse the roles, positions and challenges of women in SmEs in Mekong forest product value chains and provide opportunities to develop support mechanisms and capacity building that actively support women’s engagement in the forest sector.

The work is filling critical information gaps by assessing these sectors in Laos, Myanmar, Thailand and Vietnam, paying particular attention to the potential impacts of actions towards improved forest governance and trade in legal timber on women and the livelihood of micro enterprises. 

Through small pilots, EFI is testing methods and approaches to support SmEs in overcoming challenges that they face in their operations. Solutions tested and lessons learnt from these pilots will contribute to promoting formal registration by the SmEs, strengthening SmE networks, improving the competitiveness of SmEs and supporting their access to legal timber. 

The EU FLEGT Facility is working to develop mechanisms that actively support women’s engagement in Mekong forest product value chains by EU FLEGT Facility

 

Background

Countries across the Mekong region are engaging in processes to negotiate Voluntary Partnership Agreements (VPAs) with the EU to reform their forest sector, address illegal logging and promote trade in legal timber products.

VPAs are among the measures of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan. Under a VPA, a country makes a commitment to develop a timber legality assurance system. It also commits to export only verified legal timber products of types listed in the VPA to the EU. Most VPA countries expand this commitment to all market processes. To do this, VPA countries must define legality and often need to change their regulatory frameworks.

It has become clear that, in some countries, strictly enforcing the existing regulatory framework could harm small and micro enterprises in the formal sector and smallholders in the informal sector. Unintended social, economic and environmental consequences could be caused by factors that include:

  • More stringent enforcement of laws and regulations that do not consider the realities of SmEs.
  • Costs of demonstrating compliance with applicable legality standards
  • Modernisation of value chains to meet legality requirements

As a result, implementing a country’s VPA could potentially stifle small-scale businesses and increase rural poverty. If, however, the VPA takes account of the special needs of small enterprises and the informal sector, it could raise understanding, create economic opportunities and alleviate poverty.

A fundamental challenge, however, is the near absence of reliable data on this sector. Very little is known about the number of people involved, material flows and value chains, or current levels of compliance with applicable laws and regulations. There is also little information about the differentiation of gender roles in the region’s micro and small forest products sectors. This makes it difficult to predict how enforcement of existing legal frameworks might affect women.

The EU FLEGT Facility aims to fill these information gaps and help stakeholders to develop solutions. 

The reclaimed timber supply chain has for some time been overlooked, but there is significant earning potential for SmEs that trade in re-purposed wood by EU FLEGT Facility

 

Activities

Following an inception report to frame the scope of work, regulatory assessments of forest and timber-based SmEs in Laos, Myanmar, Thailand and Vietnam were conducted. Fourteen value chains producing timber products for domestic and in part for international markets were analysed in the four countries from June 2017 to June 2018. 

Information on findings from the assessments is available in the brief “Small and micro-sized entities in the Mekong region’s forest sector: a situational analysis in the FLEGT context” published by the EU FLEGT Facility in June 2019.

Based on the assessments, the Facility selected specific value chains for pilot interventions that tested solutions to the challenges identified in the value chains. Six pilots were conducted between 2018 and 2020 in Thailand, Vietnam, Laos and Myanmar. Three pilots are ongoing.  

Information about the SmE work and lessons learnt from the pilots were shared at regional events such as the Regional Training Workshops on Timber Legality Assurance (TLA), APEC EGILAT and other events. A brief analysing lessons learnt from testing solutions to SmE challenges is expected in late 2020.

 

Resources


If a Voluntary Partnership Agreement takes account of the special needs of small enterprises, it can raise understanding, create economic opportunities and alleviate poverty by EU FLEGT Facility

 

News

More information

About Sida

Sida is a government agency working on behalf of the Swedish parliament and government, with the mission to reduce poverty in the world. For more information visit the Sida website: www.sida.se

Publications

Information note: Diagnoses and regulatory assessments of small, micro and informal forest-products enterprises in the Mekong Region (English, Thai and Vietnamese)

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