This media backgrounder provides journalists with information on the Ghana-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 Ghana-EU Voluntary Partnership Agreement
Illegal logging and trade
Ghana’s forests provide millions of people with jobs and subsistence products. Between 1990 and 2010, however, Ghana lost a third of its forest cover, or around 2.5 million hectares. Illegal logging, enabled by poor forest governance and driven in part by trade, is a major contributor to deforestation. Small-scale, illegal chainsaw loggers now fell more trees in Ghana than the formal timber sector. In 2014, the EU accounted for 25% of Ghana’s timber exports in value terms and just under 20% in terms of volume.
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, as well as effects on local populations.
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. Ghana is one of six tropical countries that have ratified and are implementing VPAs. Nine more countries are negotiating VPAs with the EU, while others have expressed interest in negotiating a VPA.
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 Ghana meet the legality requirements of markets beyond the EU.
The Ghana-EU VPA
The Ghana-EU Voluntary Partnership Agreement (VPA) is a legally binding trade agreement. It aims to ensure that Ghana produces and exports only legal timber and timber products by improving forest governance and law enforcement.
Although VPAs are primarily concerned with international trade, one of the main reasons Ghana chose to pursue a VPA was to address illegal logging that serves the domestic market. There was strong consensus from stakeholders in Ghana that it would be critical to include the production of timber for the domestic market in a VPA agreement. This move led the way for other countries to include domestic markets in their VPAs.
Source: EU FLEGT Facility
VPA negotiations between Ghana and the EU began in 2007. Ghana’s negotiating team was led by the Ministry of Land and Natural Resources, with representation from other ministries, civil society and the private sector. As a result, significant national ownership and stakeholder engagement were achieved and the VPA reflects a broad consensus among stakeholders.
Ghana was the first country to conclude negotiations and ratify a VPA with the EU. Ghana and the EU ratified the VPA in 2009 and are now implementing the commitments laid out in the VPA text and annexes [PDF].
Ghana commits to developing a timber legality assurance system so it can issue verified legal timber products with FLEGT licences. Once this system is operational, Ghana commits to export to the EU only FLEGT-licensed timber products.
Before FLEGT licensing can begin, however, the EU and Ghana must confirm that Ghana’s timber legality assurance system is working and meets the requirements set out in the VPA, through a joint evaluation of the system. The joint evaluation must satisfy the Ghana-EU Joint Monitoring and Review Mechanism that the system is ready to issue FLEGT licences, meaning the system is robust and credible enough to ensure it licenses only legal products.
Ghana also commits to implementing legal reforms, publicly disclosing information about the forest sector and making other improvements to forest governance. The EU and Ghana jointly commit to monitor the social, economic and environmental effects of the agreement.
The timber legality assurance system, governance reforms and other commitments are described in the VPA’s main text and annexes [PDF]. In addition to the agreed commitments, the VPA process itself has fostered multistakeholder participation, transparency, legislative clarity, legal reforms and other aspects of good governance (see How the Ghana-EU VPA has improved forest governance).
A Ghana-EU body called the Joint Monitoring and Review Mechanism (JMRM) oversees implementation of the VPA. The forest sector minister leads Ghana's delegation to the JMRM and the EU’s representation is led by the EU Ambassador to Ghana. Records of discussions are made public.
Ghana has also established a Multistakeholder Implementation Committee. This committee is chaired by a representative of the Ministry of Lands and Natural Resources and members include representatives of several government ministries and agencies that have responsibilities for aspects of the VPA. Other members of the committee include a parliamentarian, a representative of traditional authority and representatives of civil society and the private sector. The VPA Secretariat in Ghana's Forestry Commission coordinates implementation activities.
Emerging issues or changes to trends in the forest sector since VPA negotiations began have affected VPA implementation. For instance, Ghana did not import timber when VPA negotiations started but does now, with consequences for supply chain control and other aspects of the VPA.
The VPA includes a framework for overseeing, monitoring and evaluating implementation of the VPA and its economic, social and environmental impacts
Ghana’s efforts to tackle illegal logging
Ghana has made considerable efforts to address illegal logging, a problem the country has struggled with for decades. These efforts include a ban on log exports and investment in a wood tracking system. Ghana is also the first African country to develop a public procurement policy to ensure government funded projects use only legal timber.
- 2005: Informal consultations on the VPA process begin; A national workshop results in broad agreement among stakeholders to move forward.
- 2006: Ghana formally notifies the EU of their interest in negotiating a VPA
- 2007: First VPA negotiation takes place in Accra in March of 2007
- 2008: VPA initialled in September 2008, signifying the end of negotiations
- 2009: Ghana and the EU sign and ratify the VPA
- 2010: First meeting of the Ghana-EU Joint Monitoring and Review Mechanism in January 2010
- 2012: New service provider recruited to support the development of the wood tracking system
- 2014: Joint assessment of the legality assurance system conducted between April and August 2014
Ghana’s timber legality assurance system
Under the VPA, Ghana committed to develop a rigorous yet practical system for assuring the legality of its timber, through an inclusive multistakeholder process. The timber legality assurance system described in the Ghana-EU VPA has five components:
- Legality definition: The legality definition in the VPA states the agreed-upon aspects of Ghanaian law that the timber legality assurance system evaluates compliance with for purposes of FLEGT licensing.
- Supply chain control: 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.
- 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
- FLEGT licensing: A FLEGT licensing authority will issue FLEGT licences for 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 Ghana and the EU confirms that the system is fully operational, as described in the VPA (see Next steps).
- Independent monitoring: Independent monitoring regularly checks that all aspects of the legality assurance system are working properly. An annex to the VPA provides terms of reference for the monitor. The monitor will produce reports for the Joint Monitoring and Review Mechanism and a public report. The independent monitor has already been contracted and started work on its first audit before licensing begins. In other VPAs, the independent monitoring function is called independent audit.
Ghana has developed a wood tracking system and is rolling it out nationwide. It has also set up a Timber Validation Department (TVD) to act as an ‘internal auditor’ within the Forestry Commission and a multistakeholder Timber Validation Committee to oversee the work of the TVD.
The Forestry Commission is also finalising verification protocols and the systems for issuing FLEGT licences. A Ghana-EU joint action plan has identified the steps necessary to finalise the timber legality assurance system ahead of FLEGT licensing.
Joint Monitoring and Review Mechanism, 2013
Source: EU FLEGT Facility
How has the VPA improved forest governance?
The VPA has already had an impact, both as a result of what Ghana and the EU have committed to, and as a result of the multistakeholder process of negotiating and implementing the Agreement. These gains include stronger monitoring, enforcement and compliance.
Greater participation in decision-making
During the VPA negotiations, representatives of civil society and the private sector participated alongside government in the national VPA steering committee and its five technical working groups. These stakeholder groups are also represented in the national multistakeholder implementation committee and the Joint Monitoring and Review Mechanism.
Enhanced capacity to address illegal logging
The VPA process has strengthened the capacity of government, private sector and civil society stakeholders to work together to address illegality in Ghana’ forest sector. Capacity building activities have included training and/or recruitment to enable:
- Forestry Commission staff to implement the timber legality assurance system’s verification and control functions
- Civil society organisations to perform independent forest monitoring
- Illegal chainsaw loggers to adopt artisanal milling procedures to supply the domestic market with legal timber
- Identification of data management controls needed to make flows of information more resource and cost efficient
Article 20 of the VPA, on reporting and public disclosure, states that the Joint Monitoring and Review Mechanism (JMRM) shall record Ghana's efforts towards transparency. The article refers to transparency around harvest rights, areas designated for harvesting, harvesting schedules, timber rights' fees and harvest related payments, and information on social responsibility agreements and crop damage compensation awards. The VPA annex on the timber legality assurance system also identifies data that Ghana will make publicly available. Civil society organisations have also presented to the JMRM a list of information they would like to be in the public domain to assist them with forest monitoring.
The VPA process has made legality in the forest sector much clearer in Ghana. The VPA legality definition makes clear what operators in the timber sector must do to comply with the law and what indicators and verification measures auditors must use to assess legality. Clear legislation makes it easier for the Forestry Commission and other regulatory bodies to enforce the law and for the justice system to prosecute illegal loggers.
Measures covering the domestic market
Ghana’s domestic market for timber is bigger than its export market. Before the VPA process began, stakeholders from government, civil society and the private sector shared the view that a VPA must help Ghana to address illegality in the domestic market. As a result of the VPA, the government and a dialogue platform convened by a nongovernmental organisation have developed and agreed policies to address illegal logging in the domestic market. Initiatives such as the EU Chain Saw Project and others have tried to provide both policy and technical solutions to the problem of the domestic market. Ghana has developed a public procurement policy to ensure that state-funded projects do not use illegally harvested wood.
The VPA’s legality definition included various community rights, such as:
- A right of veto over the allocation of harvesting rights
- A right of compensation for crop damage caused by logging activities
- A role in the negotiation of Social Responsibility Agreements with logging companies, and assurances that these agreements will be implemented
The VPA has strengthened community rights, as timber and timber products must comply with all aspects of the VPA legality definition to receive a FLEGT licence.
Community Meeting in Saamang, Ghana
Source: New Generation Concern
Trade in FLEGT licensed timber
When a Ghana-EU joint evaluation concludes that the timber legality assurance system is fully operational as described in the VPA, the joint monitoring and review mechanism can propose that Ghana 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, all Ghanaian timber-based products listed in Annex I of the VPA and exported to the EU must be accompanied by a valid FLEGT licence. EU customs officials will deny entry to any products covered by the VPA that arrive without a valid FLEGT licence.
The VPA for Ghana distinguishes reforms that must precede FLEGT licensing from reforms that can come later, but within a specific time frame. Later reforms relate to governance issues including benefit sharing. The government of Ghana has committed to resolve the issue of undefined tree tenure rights as driver of illegal logging and intends to begin a tenure reform process.
Ghana also committed to reform forest laws in light of the policy reforms and to consolidate the laws to remove inconsistencies. In addition to these planned reforms, civil society organisations call for other reforms to strengthen forest governance. The approval and implementation of Ghana’s public procurement policy for timber will go some way toward addressing illegality on the domestic market.
The EU and Ghana made a joint commitment to monitor the social, economic and environmental impacts of the VPA. Monitoring examines whether a VPA is having the desired outcomes. It can also identify unintended negative impacts for Ghana and the EU to address and mitigate. The Joint Monitoring and Review Mechanism created a multistakeholder ‘joint team’, which worked with a consultant to consolidate the Ghanaian and EU priorities into a shared set of impact areas to monitor.
Independent market monitoring
The European Commission has appointed the International Tropical Timber Organization (ITTO) as an independent market monitor for all VPA countries. ITTO will assess the trade in timber products between Liberia and the EU, and the impacts of FLEGT licensing on this trade.
Civil society organisation views on VPA progress and next steps
In May 2015, civil society organisations (CSOs) in Ghana released a report called Reflections on the FLEGT process in Ghana. The report concluded: “The VPA process has been transformational in the sense that it has opened up the space for continued dialogue in the forest sector, allowing civil society to engage and bring novel ideas to government led discussions. Additionally, communities, through awareness raising efforts now have better appreciation of the law and legality requirements to make demands on timber companies and government. The continued support of the EU for the implementation of the FLEGT Action Plan; the demonstration of stronger political will; stronger collaboration and support from CSOs will go a long way to halt illegal logging, reduce deforestation and improve governance in the forest sector.”