Summary

• Over the last 30 years the EU has played a central role in addressing the competitiveness, security and climate dimensions of energy policy among its member states. The UK has been critical in driving forward integration of the European energy market, and has been a strong advocate of liberalized energy markets and some climate change mitigation policies.
• If, at the June 2016 referendum, the UK does vote to leave the EU, energy and climate policy will be part of the overall package of issues to be negotiated, as it is unlikely that each sector will be treated separately. The model of relations for energy and climate may well be determined by political and public sentiment on higher-profile issues such as freedom of movement, rather than by what is best for the UK in these policy areas.
• The UK is increasingly reliant on imports, including from and through continental Europe, and its energy market is deeply integrated with that of its European neighbours. As a growing share of the UK’s electricity is exchanged with EU partners, it would be neither possible nor desirable to ‘unplug’ the UK from Europe’s energy networks. A degree of continued adherence to EU market, environmental and governance rules would be inevitable.
• This paper reviews the risks and trade-offs associated with five possible options for a post-exit relationship. Of these, the Norway or the Energy Community models would be the least disruptive, enabling continuity in energy market access, regulatory frameworks and investment; however, both would come at the cost of accepting the vast majority of legislation while relinquishing any say in its creation. The UK would thus have less, rather than more, sovereignty over energy policy.
• The Switzerland, the Canada and the WTO models offer the possibility of greater sovereignty in a number of areas, such as buildings and infrastructure standards as well as state aid. None the less, each would entail higher risks, with greater uncertainty over market access, investment and electricity prices. These models would reduce or even eliminate the UK’s contribution to the EU budget, but would also limit or cut off access to EU funding mechanisms.
• All five Brexit models would undermine the UK’s influence in international energy and climate diplomacy. The UK would no longer play any direct role in shaping the climate and energy policies of its EU neighbours, at a time when the EU’s proposed Energy Union initiatives offer the prospect of a more integrated and effective European energy sector. A decision to leave the EU would make it easier for a future UK government to change direction on climate policy, since only a change in domestic legislation would be required.
• ‘Brexit’ could affect the balance of energy policy among the remaining member states. In its absence, the centre of gravity for EU energy policy might shift away from market mechanisms and result in weaker collective action on greenhouse gas reduction targets.
• In the field of energy and climate change policy, remaining in the EU offers the best balance of policy options for Britain’s national interests: the UK would continue to benefit from the integrated energy market, while maintaining influence over its direction and minimizing uncertainty for crucial investment.

This paper is part of a broader Chatham House study which assesses the global response to illegal logging and the related trade.

The Indonesian government has taken a number of important steps to tackle illegal logging and the associated trade, most notably with the ratification of the Indonesia–EU FLEGT voluntary partnership agreement in 2014. The process of negotiating this agreement has contributed to the introduction of a national timber legality verification system (SVLK), clarification of the relevant legal framework and significantly improved engagement with stakeholders in the forest sector. There have also been important developments in recognizing indigenous peoples’ tenure rights to forest land and resources.

However, implementation and enforcement challenges remain. In particular, progress is hampered by a poorly functioning decentralized governance system, persistent corruption and insufficient transparency of information.

The private sector has responded positively, with growing awareness of the issue of illegal logging. While uptake of voluntary legality verification has recently declined, with the need for this now circumvented by the introduction of the SVLK, the area of forest certified as being managed sustainably increased in 2012.

An analysis of data on timber production and consumption suggests that illegal logging has decreased since 2000, and the findings of the expert perceptions survey tend to confirm this for the period 2010 to 2013. In part, these findings reflect a shift towards plantations and away from natural forest harvesting. However, legal ambiguity over the permitting process for forest conversion may mean that levels of illegality are higher than these data suggest.

Building on the government’s response to illegal logging will require effective implementation of the SVLK including addressing identified shortcomings. Improved land-use planning to support effective control and monitoring of forest conversion is also needed. Increased resources and training for enforcement officials are required, while efforts to tackle corruption in the sector should be stepped up. The government should clarify the rights of indigenous peoples through concrete actions such as developing clear processes for mapping and registering their land claims.

This paper is part of a broader Chatham House study which assesses the global response to illegal logging and the related trade.

The Brazilian government has made slow progress in tackling illegal logging and associated trade since the previous Chatham House assessment, in 2010. Illegality, corruption and fraud remain widespread in the forest sector, despite a relatively strong legal framework. Considerable efforts have been made to improve law enforcement in the sector but these have been hampered by poor coordination between the relevant government agencies, limited resources and inadequate penalties. At the same time, attempts to involve a range of stakeholders in policy discussions and decision-making have stalled.

The private sector’s response to illegal logging is perceived to be weak, despite the reasonably high uptake of sustainability certification schemes. Initiatives are under way aimed at promoting a legal and sustainable market for timber within Brazil, with the engagement of the private sector. However, such undertakings are modest given that the majority of the country’s timber production is consumed domestically.

Considerable investment in systems to monitor timber and revenue flows is required to tackle fraud, while the regulation of sawmills needs to be tightened to reduce the scope for the laundering of illegal timber. The imposition of appropriate sanctions and ensuring the collection of financial penalties could help to fill the gap in resources that is impeding effective enforcement.

Clarification of the regulatory framework is needed – in particular, those regulations related to the fiscal regime for the forest sector – as is the simplification of the processes for approving forest management plans. The latter is a priority if smallholders are to be able to engage in legal and sustainable forest management. An extensive programme of outreach and training is a prerequisite for ensuring such engagement. Finally, efforts to promote legal timber on the domestic market should be intensified and expanded.

This paper is part of a broader Chatham House study which assesses the global response to illegal logging and the related trade. 

The Ghanaian government has taken a number of important steps to reduce illegal logging and related trade, most notably with the signing of the Ghana–EU voluntary partnership agreement in 2009. This agreement has prompted improved multi-stakeholder dialogue within the sector as well as a process of legal reform. Considerable effort has also been put into the development of a timber legality assurance system, which has been successfully piloted. However, a number of enforcement and administrative challenges remain, particularly in relation to tenure and land and resource rights, as well as broader governance challenges including corruption.

Awareness of the issue of illegal logging has improved among the private sector, and the area of natural forest that is verified as legally compliant has increased considerably in recent years. However illegal practices remain widespread in the country. Illegal chainsaw milling is prevalent, predominantly supplying the domestic market. Illegality is also an issue in supply chains for export, albeit at a lower level. Trade data discrepancies indicate that illegal trade is a problem, in particular for tropical logs, and there is a lack of clarity over the legality of many logging permits.

A key challenge for the country is its declining resource base. The forest sector has shrunk considerably over the last 15 years as a result of this, and the situation looks set to worsen. Wood-balance estimates indicate that timber consumption considerably exceeds sustainable harvesting levels. 

In order to make further progress in tackling illegal logging, the process of legal reform and efforts to improve enforcement need to continue. Priorities include: a review of fiscal policies for the sector; improvements to land administration; completion of the conversion process of logging rights; and implementation of the legality assurance system across the country. Efforts must also continue to address the challenge of illegal chainsaw milling, which will require a range of approaches from legal reform to developing alternative livelihood strategies. 

This paper is part of a broader Chatham House study which assesses the global response to illegal logging and the related trade. 

The government of Lao PDR has taken a number of steps to reduce illegal logging and associated trade. Most notably, it has made progress towards negotiations with the EU on a voluntary partnership agreement (VPA). This has prompted the establishment of a multi-stakeholder steering committee and a technical working group and the revision of several land and forestry laws to include provisions related to the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan.

However, significant implementation and enforcement challenges remain. The legal framework is unclear and, at times, contradictory. Implementation by central and local governments is inconsistent, and internal mechanisms to oversee government decisions are limited. Moreover, enforcement capacity is weak and there is a lack of transparency. The available evidence suggests that illegal practices are widespread in the forest sector.

Awareness of the issue of illegal logging has improved, including in the private sector. The area of natural forest certified under the Forest Stewardship Council (FSC) scheme has been gradually increasing in recent years. However, a key challenge for the Lao forest sector is pressure on forest resources from agricultural plantations, mineral extraction and infrastructure development.

In order to make further progress in tackling illegal logging, the government should push ahead with preparations for the VPA negotiations, ensuring that the lead agencies are appropriately engaged and resourced to implement a credible dialogue process. Data on the allocation and management of forest resources should be systematically collected and made available to the public in order to enable effective forest monitoring. In addition, accountability mechanisms, including anti-corruption strategies, should be clearly defined and implemented by all relevant ministries to ensure that forest resources are exploited legally and for the benefit of the country. 

This paper is part of a broader Chatham House study which assesses the global response to illegal logging and the related trade. 

This assessment of the extent of illegal logging in Cameroon and the response to this issue suggests that progress has stalled since 2010. The reform of the legislative framework for the forest sector has yet to be completed; and while there have been improvements in the availability of forestry information, there remain many gaps. Furthermore, the principle of transparency has yet to be broadly accepted within the government. Enforcement is weak and information management systems are deemed inadequate. Most important, corruption remains widespread and the political will needed to drive change is felt to be lacking.

While there is evidence of progress in the private sector – the area of forests with legality verification and certification has increased – illegal activities are rife throughout the forest sector. Half of all timber production is estimated to come from the informal artisanal sector – mainly supplying the domestic market. However, illegal activities are also common in supply chains for export: timber originating from ‘small permits’ and sales of standing volume permits is thought to be particularly problematic. This is of particular concern, as the supply of timber from such permits is expected to increase owing to the growing pressure on forests from other sectors.

Since 2000 trade has shifted away from sensitive markets: the EU market’s significance as a destination for Cameroon’s exports of timber-sector products has decreased, while China’s significance has increased enormously. This has important implications for strategies on how best to tackle illegal logging in Cameroon.

In order to make further progress, markets for legal timber need to continue to be developed in key consumer countries – which, in the case of Cameroon, are now both the EU and China. Within Cameroon, further analysis of the political economy of the forest sector is required. Attempts to tackle corruption should be reinforced, and this would be facilitated by examining the experience of anti-corruption efforts elsewhere in the world. Further improvements to transparency are needed; the establishment of a new independent observer will be important in achieving this goal.

The next stages of legal reform will require broad consultation among stakeholders, in particular small-scale producers as well as local communities and indigenous peoples. Efforts to promote a legal domestic market should be intensified, including more extensive training and outreach for small-scale producers and processors. Finally, to improve enforcement efforts, continued investment in the training of enforcement agents and the provision of adequate resources are required.

This paper is part of a broader Chatham House study which assesses the global response to illegal logging and the related trade. 

There has been limited progress in tackling illegal logging and related trade in Malaysia since 2010. Widespread problems remain, particularly in the state of Sarawak. There are high levels of deforestation throughout the country: expansion of timber, pulp and agricultural plantations (including oil palm and rubber) is the main driver of forest loss.

Forest policy-making in Malaysia involves both the federal and state governments, but the states have prerogative rights to develop their own policies on land and forests. This poses challenges, not least since governance of the forest sector varies quite significantly from one region of the country to another.

The government has been negotiating a Voluntary Partnership Agreement (VPA) with the EU since 2007. Negotiations stalled for a number of years but resumed in 2012 without the participation of Sarawak. Concerns remain among stakeholders about the limited recognition of indigenous peoples’ rights by the government, as well as about corruption and the lack of transparency.

Awareness of illegal logging and related trade is increasing in the private sector, although the area of natural forest concessions certified as being under sustainable production remained virtually unchanged during the period 2008–12.

Asia is the major export market destination for Malaysia’s timber products. However, both the US and the EU import significant volumes of wood-based products from Malaysia too.

The Malaysian Anti-Corruption Commission (MACC) has recently stepped up investigating corruption in the forest sector. In Sarawak, an intensified focus on combatting illegal logging could signal a turning point for the state’s forest sector.

In order to build on its response to illegal logging and related trade to date, the Malaysian government should fully engage with the voluntary partnership agreement process and improve multi-stakeholder participation. Transparency in decisions about forest allocation needs to be significantly improved and greater recognition accorded to the rights of indigenous peoples.

More concerted efforts are required to tackle high-level corruption – for example, through strengthening the MACC. At the same time, the government should consider options for an independent monitor for the forest sector as a means of improving forest governance.

The aim of the meeting is to identify ways to improve monitoring of illegal logging and the trade in illegal timber. Building on the experiences of Chatham House’s project Indicators of Illegal Logging, the discussions will focus on the data needs of particular end users and methodological challenges for estimating levels of illegality. The potential for improved coordination and collaboration between global efforts to monitor trade flows will also be considered.

Attendance at this event is by invitation only.

This event is part of a series of illegal logging update meetings that will bring together more than 250 participants from civil society, industry and governments from around the world. 

Download the presentations from the event on the Illegal Logging Portal.

At this session, the speaker will argue that our future hinges on a set of elements that receive scant attention even from those whose fortunes rely upon them. The speaker will outline why our electronic gadgets, the most powerful armies and indeed the fate of our planet depend on producing sustainable supplies of rare metals. He will outline some of the  new environmental, economic, and geopolitical consequences of supply chains and discuss the dynamics of the rare metal markets which are vastly different than traditional commodities traded on open exchanges. The speaker will also address some of the security of supply issues arising from China's role as the dominant consumer and producer of most of the world’s minor metals. Finally, the discussion will also include what countries and companies can do to ensure resilient supply lines.

Attendance at this event is by invitation only.