This media backgrounder provides journalists with information on the Honduras-EU Voluntary Partnership Agreement, which aims to address illegal logging, improve forest governance and promote trade in legal timber products. The backgrounder explains the aims of the VPA, progress to date and next steps.
The Honduras-EU Voluntary Partnership Agreement
Illegal logging and trade
Forests make an important contribution to the Honduran economy, providing jobs and livelihoods for local people. Between 1990 and 2010, however, almost three million hectares of Honduran forests were destroyed. Illegal logging, driven by trade, is one of several contributors to deforestation. Trade, therefore, has a role to play in addressing the problem.
The volume of timber traded between Honduras and the EU is currently modest, representing less than 2% of Honduran timber exports. Despite this, Honduras has chosen to negotiate a VPA as a means to improve law enforcement, transparency and overall forest governance.
Access to markets other than the EU is also of interest to Honduras, with exports to the United States being particularly important. In entering into a VPA process, Honduras aims to enable its wood products to meet the due diligence requirements of US legislation that prohibits imports of timber of illegal origin. Furthermore, Honduras has expressed a desire to boost timber exports to other international markets, and sees the VPA as a useful tool to ensure legality.
What is a VPA?
A Voluntary Partnership Agreement (VPA) is a legally binding trade agreement between the EU and a timber-exporting country outside the EU. A VPA aims to ensure that all timber and timber products destined for the EU market from a partner country comply with the laws of that country.
In addition to promoting trade in legal timber, VPAs address the causes of illegality by improving forest governance and law enforcement. A major strength of VPAs is that they look beyond trade to consider development and environmental issues.
Stakeholders in government, the private sector and civil society develop VPAs through a participatory process. A VPA is, therefore, a vehicle for addressing the needs of different stakeholders and for including many people who have never before had a voice in decision-making.
VPAs are a key component of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan of 2003. Honduras is one of nine tropical countries that are negotiating VPAs with the EU. Six more countries have ratified VPAs and are implementing the agreements.
Key elements of a VPA
Key elements of a VPA are described in its main text and annexes. In countries where VPAs have already been signed, these include:
- A timber legality assurance system to verify that timber products are legal and can be issued with FLEGT licences
- Commitments to legal reforms, public disclosure of information and other improvements to forest governance
- A framework for overseeing, monitoring and evaluating implementation of the VPA and its economic, social and environmental impacts.
How a VPA promotes legal timber trade
A VPA partner country that has implemented a timber legality assurance system and other VPA commitments can issue verified legal timber products with FLEGT licences. The advantage of this is that FLEGT-licensed products automatically meet the requirements of the EU Timber Regulation (EUTR), which prohibits EU operators from placing illegally harvested timber and timber products on the EU market.
The EUTR entered into force in 2013. It requires EU operators to perform due diligence checks to ensure the timber products they place on the EU market are legal. FLEGT-licensed timber meets the due diligence requirements under the EUTR.
A VPA partner country can only issue FLEGT licences through a timber legality assurance system that the EU and the partner country have agreed on, developed and tested. Before a country can begin FLEGT licensing, the EU and the partner country must confirm that the country’s timber legality assurance system works as described in the VPA. Confirmation by the two parties means that the system is robust and will issue FLEGT licences only to legal timber products.
While FLEGT licensing is an important goal, it is not the end point of a VPA process. Governance reforms, legislative and policy reforms, impact monitoring, improvements to the timber legality assurance system and other activities continue.
Through progress on VPAs, the EU Timber Regulation and dialogues with other important timber markets, including China, the EU and the VPA partner countries are contributing to a growing global movement to address trade in illegal timber and timber products. The United States and Australia also prohibit the placing of illegal timber on their markets. The process to achieve FLEGT licences may therefore help VPA partner countries such as Honduras meet the legality requirements of markets beyond the EU.
La Tigra National Park, Honduras
Source: Chamo estudio
The Honduras-EU VPA
Honduras and the EU are negotiating the terms of the VPA through a cooperative process: both parties share the goal of fostering good forest governance and addressing illegality.
The VPA negotiations began in January 2013. They involve representatives of Honduran civil society organisations, the private sector, government ministries and agencies, and indigenous peoples. Through wide participation, the process aims to foster significant national ownership, stakeholder engagement and a broad consensus that will promote effective VPA implementation.
Following the conclusion of negotiations, Honduras and the EU will sign and ratify the VPA and its commitments will become legally binding. A Honduras-EU Joint Implementation Committee will oversee implementation and respond to concerns about problems as they arise. VPA implementation can therefore improve as it proceeds.
In order to issue FLEGT licences as required by the VPA, Honduras will develop a robust timber legality assurance system. The timber legality assurance system will build on existing national initiatives that aim to strengthen forest governance (see Honduran efforts to tackle illegal logging). Honduras will be able to issue FLEGT licences only when the timber legality assurance system has been successfully tested and Honduras and the EU are satisfied that it functions as described in the VPA.
VPAs signed to-date have also included commitments to improve transparency, accountability, legislative clarity and other aspects of governance.
Honduran efforts to tackle illegal logging
Honduras has made considerable efforts to address illegal logging, a problem the country has struggled with for decades. In 2005, in recognition of the scale of the problem, the National Commission for Human Rights launched an independent forest monitoring initiative to assess legal compliance, and observe and guide forest law enforcement systems.
In 2007, a new Forest Law entered into force, after an unprecedented participatory process that saw the government, civil society and the private sector work together. The law established a new forest authority, called the Forest Conservation Institute (Instituto de Conservación Forestal, ICF). In 2010, ICF adopted a national strategy for the control of illegal harvesting and transport of forest products (Estrategia Nacional para el Control de la Tala y el Transporte Ilegal de los Productos Forestales, ENCTI). In 2013, Honduras became the first Latin American country to enter into VPA negotiations with the EU.
- 1974: Honduras establishes the Forest Social System, which gives local communities rights to use, and responsibilities to protect, their forest resources
- 1982: Honduras launches a nationwide land titling project to clarify land tenure and increase land productivity
- 1992: Honduras passes the Law for the Modernisation and Development of the Agricultural Sector, which puts over 150,000 land titles in private hands
- 2005: Honduras establishes an independent forest monitoring initiative, hosted by the National Commission for Human Rights
- 2007: Honduras passes a new Forest Law, which establishes a new forest authority
- 2010: Honduras adopts a national strategy for the control of illegal harvesting and transport of forest products
- 2013: Honduras and the EU hold the first round of VPA negotiations
- 2013: Honduras and the EU hold the second round of VPA negotiations
- 2015: Honduras and the EU hold the third and fourth rounds of VPA negotiations
- 2016: Honduras and the EU hold the fifth round of VPA negotiations
- 2016: Honduras and the EU hold a VPA technical session
Honduras’ timber legality assurance system
As part of the VPA process, Honduras is developing a system for assuring the legality of its timber. The timber legality assurance system will be based on the existing national strategy against illegal logging (ENCTI).
As in all VPAs, the timber legality assurance system will have the following five components:
- Legality definition: The legality definition states the aspects of a VPA partner country’s law for which the timber legality assurance system evaluates compliance with, for purposes of FLEGT licensing. Honduras is well on its way to agreeing a legality definition that builds on existing laws and is supported by all stakeholders. Honduras has already reached agreement on the timber products to be covered by the VPA
- Supply chain controls: Supply chain controls ensures that timber products verified as legal remain legal throughout all processes associated with the supply chain. Supply chain controls also prevent verified legal products being tainted by unverified products entering the supply chain. Honduras is currently working to develop supply chain controls.
- Verification of compliance: Verification of compliance involves checks that all the requirements of the VPA legality definition and supply chain controls have been met to ensure that timber products are legal. Honduras is working to develop its approach to verifying compliance.
- FLEGT licensing: A FLEGT licensing authority issues FLEGT licences to consignments of timber products that the verification mechanism has confirmed are legally compliant. FLEGT licensing cannot begin until a joint evaluation of the timber legality assurance system by Honduras and the EU confirms that the system works as described in the VPA (see Next steps).
- Independent audit: The independent audit regularly checks that all aspects of the legality assurance system work properly. An annex to the VPA provides terms of reference for the auditor. Honduras has still to define the terms of its independent auditing.
How the Honduras-EU VPA improves forest governance
Greater participation in decision-making
The level of stakeholder participation in the VPA process in Honduras is unprecedented. Representatives of the government, civil society, the private sector and indigenous peoples actively participate in negotiations. The VPA process is, therefore, a vehicle for addressing the needs of different stakeholders and for including many people who have never before had a voice in decision-making. In Honduras, stakeholder consultations are increasingly becoming a standard for developing legislation in the forestry sector.
Enhanced capacity to address illegality in the forest sector
The VPA process is strengthening the capacity of government, the private sector, civil society and indigenous peoples to work together to address illegality in the Honduran forest sector. Dedicated regional platforms are building the capacity of local stakeholders to engage with the VPA process.
Honduras has expressed an explicit desire to use the VPA as a means to increase transparency in the forest sector. VPAs negotiated in other countries include an annex on public disclosure of information that lists the information the government commits to making publicly available. Through the VPA process, Honduras is already assessing tools to enhance transparency.
Legal reforms and improved legal clarity
The VPA process in Honduras is providing opportunities to make legal compliance and law enforcement much clearer, as well as to identify overlaps, gaps and contradictions in the current legal framework.
4th round of negotiations in Brussels, 2015
Source: EU FLEGT Facility
Address land tenure
There is broad recognition among stakeholders in Honduras that land tenure is one of the key challenges to address in improving forest governance. At present, several government bodies have responsibilities for land tenure, posing challenges to effective and coherent land tenure policy and implementation. The active participation of all stakeholders in VPA negotiations brings such challenges to the fore.
Conclude negotiations, then sign and ratify the VPA
Honduras and the EU are making good progress in VPA negotiations. Stakeholders in Honduras, including the government, civil society, the private sector and indigenous peoples, have reiterated their commitment to see the VPA signed, ratified and fully implemented. After Honduras and the EU conclude VPA negotiations they will establish a Joint Implementation Committee to oversee implementation of the agreement.
Develop a timber legality assurance system
Honduras is finalising its the definition of legal timber, and with the product scope already specified, it has started to design and establish a timber legality assurance system, which will ultimately issue FLEGT licences.
Trade in FLEGT-licensed timber
When a joint EU-Honduras evaluation concludes that the Honduran timber legality assurance system is fully operational as described in the VPA, the joint implementation committee can propose that Honduras begins to issue FLEGT licences. Once a decision is made to commence FLEGT licensing, the parties will follow their respective internal processes, including legislative measures, such as amending the FLEGT Regulation on the EU side.
Once FLEGT licensing begins, a valid FLEGT licence must accompany all exports to the EU of Honduran timber-based products listed in Annex I of the VPA. EU customs officials will deny entry to any products covered by the VPA that arrive without a valid FLEGT licence.
Independent market monitoring
The European Commission has appointed the International Tropical Timber Organization (ITTO) as the independent market monitor for all VPA countries. The independent market monitor will assess the trade in timber products between Honduras and the EU, and the impacts of FLEGT licensing on this trade.