23 November: VPA agreed
Forests cover 87% of Guyana and make an important contribution to the economy, providing jobs and livelihoods. The Government owns the vast majority of the forests and lands, while indigenous peoples own 14% of the land (covered by 1.3 million hectares of forest; 6% of the country’s total). In 2017, the annual deforestation rate was estimated to be 0.048%. Most deforestation is attributed to mining for gold and bauxite, which represents 60% of Guyana’s exports by value. Mining accounted for 87% of deforestation in 2014 and 74% in 2017.
According to the FLEGT Independent Market Monitor, EU imports from Guyana tend to be quite volatile. Having fallen sharply to USD 2.2 million in 2016, imports from Guyana peaked to USD 5.1 million, before easing to USD 4.8 million in September 2019.
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 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. While a VPA cannot address every issue in a country, due to its participatory nature, it allows different stakeholders to raise issues related to the forest sector that they want to see addressed.
VPAs are a key component of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan of 2003. Guyana is one of 15 tropical countries that are negotiating or implementing VPAs with the EU.
Key elements of a VPA are described in its main text and annexes. In countries where VPAs have already been signed, these include:
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 is that FLEGT-licensed products automatically meet the requirements of the EU Timber Regulation (EUTR), which prohibits EU operators from placing illegally-harvested 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 implementation of the EUTR and dialogues with other important timber market, including China, the EU and its VPA partner countries are contributing to a growing global movement to stop trade in illegal timber products. Australia, the United States, the Republic of Korea and Japan also seek to restrict the placing of illegal timber on their markets. The process to achieve FLEGT licences may therefore help VPA partner countries such as Guyana meet the legality requirements of markets beyond the EU.
Guyana and the EU negotiated the terms of the VPA through a cooperative process: both Parties shared the goal of fostering good forest governance and addressing illegality.
The VPA negotiations began in December 2012. They involved the private sector, Government ministries and agencies, and indigenous peoples. Through wide participation, the process aimed to foster significant national ownership, stakeholder engagement and a broad consensus that would promote effective VPA implementation.
Guyana and the EU concluded VPA negotiations in 2018 and initialled the VPA in November. After Guyana and the EU sign and ratify the VPA, its commitments will become legally binding. A Guyana-EU joint body will oversee the implementation of the VPA and respond to concerns as they arise. VPA implementation can therefore improve as it proceeds.
In order to issue FLEGT licences as required by the VPA, Guyana will build on existing national initiatives to develop a robust timber legality assurance. Guyana will begin issuing FLEGT licences only when the timber legality assurance system has been successfully tested, and when Guyana and the EU are satisfied that it functions as described in the VPA.
The VPA includes commitments to improve transparency, accountability, legislative clarity and other aspects of governance.
Guyana has made considerable efforts to address illegal logging and manage its forests sustainably. In 2000, Guyana introduced a log tracking system to verify the origin of forest products and control harvesting in state forests.
In 2009, the Government launched a Low Carbon Development Strategy that promotes economic development while combating climate change by avoiding deforestation. In 2011, Guyana published a national forest policy and national forest plan, which it revised in 2018. The new policy and plan moves away from valuing forests simply for their timber but treats them instead as a cornerstone of the national patrimony to be managed collectively. In 2016, Guyana ratified the Paris Agreement on climate change. In its nationally determined contribution, Guyana commits to sustainable forest management and forest monitoring. In 2018, Guyana launched the Green State Development Strategy with the objective to reorient Guyana’s economy towards a diversified, decarbonised and resource-efficient economy.
Under the VPA, Guyana will commit to develop a system for assuring the legality of its timber. As in all VPAs, the timber legality assurance system must have the following five components:
An annex of the Guyana-EU VPA describes the measures that will be put in place during the implementation of Guyana’s timber legality assurance system.
The VPA process has already had an impact as result of multistakeholder negotiations (see Guyana-EU VPA process).
Stakeholder participation in the VPA process in Guyana improved since 2015. The VPA process is becoming a vehicle for addressing the needs of different stakeholders including people who have never before had a voice in decision making.
The VPA process is strengthening the capacity of representatives from the Government, the private sector and indigenous peoples to work together to address illegality in Guyana’s forest sector. The UK Department for International Development, the Government of Norway, the FAO-EU FLEGT Programme and the EU have all supported activities to ensure a fully inclusive VPA process. Capacity building will continue during the implementation of the VPA.
Guyana’s Forestry Commission website has been publishing information on the VPA process, draft VPA annexes for comments, and reports on negotiation sessions and stakeholder meetings. The VPA includes an annex that lists the information the Government of Guyana commits to making publicly available. Guyana drafted this annex in consultation with stakeholders.
In 2018, Guyana enacted new Forest Regulations, replacing outdated regulations that had been in force since 1953. Guyana also adopted a new Code of Practice for Forests Operations. These reforms will improve legal compliance by clarifying legal requirements, and will enable authorities to verify legal compliance and enforce the law.
Although the purpose of the VPA is not to address land issues, the Parties agreed that a coordination mechanism providing a dedicated space for dialogue on land tenure, land use and conflicts over land use among all concerned parties is instrumental in strengthening governance and law enforcement. The VPA annex on supporting measures will provide support to the Grievance and Redress Mechanism of the current Amerindian Land Titling Project, a tool that will allow complaints related to Amerindian land issues to be brought to the attention of Government ministries and agencies.
The VPA will support rights of Amerindians through several mechanisms. In the legality definition of the Agreement, one legality matrix is specifically dedicated to Amerindian Villages. In addition, matrices for all other operators include an indicator that requires that the operator does not impede the exercise of traditional rights of Amerindian peoples. In the Guyana Timber Legality Assurance Annex, the VPA foresees that when recommendations for titling of, or extensions to, Amerindian lands are approved and endorsed by the Cabinet of Guyana, the Guyana Forestry Commission is informed by the subject Minister. The Guyana Forestry Commission also has to follow these recommendations to revisit the concession area over which forest allocations have been granted and adjust the concession boundaries as necessary. Finally, during the implementation phase of the system, Guyana committed to develop criteria and procedures for assessing that the traditional rights of Amerindian peoples are not impeded.
Having initialled the VPA in November 2018, Guyana and the EU are now following their respective internal procedures for signing and ratifying the Agreement.
Implementation involves work to develop the timber legality assurance system described in the VPA so Guyana can issue verified legal timber products with FLEGT licences. The EU and Guyana will establish a joint implementation committee, called the Joint Monitoring and Review Committee, to oversee implementation of the VPA.
In 2019, in consultation with Guinean stakeholders and the EU, a draft Joint Implementation Framework outlining the activities, responsibilities and timeline to implement the VPA was developed. This draft Framework is scheduled to be adopted by the Parties at the first meeting of the pre-JMRC.
VPA implementation will involve identifying and addressing possible gaps in the forest allocation process and in the legal framework, upgrading systems for tracking wood through the supply chain, improving procedures for verifying legal compliance, and supporting Guyana in developing approaches for ensuring that the traditional rights of Amerindian peoples are not impeded. It will also include establishment of independent audits, a complaints mechanism, and systems and procedures for making information on the forest sector publicly available.
Other activities may include legal reforms and capacity building. Multistakeholder participation continues in the implementation phase.
When a joint EU-Guyana evaluation concludes that the Guyanese timber legality assurance system is fully operational as described in the VPA, the Joint Monitoring and Review Committee can propose that Guyana begin 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 Guyanese 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. Products outside the scope of the VPA will remain subject to the normal due diligence requirements of the EU Timber Regulation.
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 Guyana and the EU, and the impacts of FLEGT licensing on this trade.
Why did Guyana decide to negotiate a VPA?
The objectives of the VPA are to:
How important is the trade in timber products from Guyana to the EU?
In 2016, the value of Guyana’s wood and wood product exports to the EU was USD 2 million, which amounted to 5% of Guyana’s total wood and wood product exports.
How much of Guyana’s timber production does the VPA cover?
Once operational, the VPA’s timber legality assurance system will cover the following groups of products namely: logs, sawn timber, sleepers, plywood, veneer, poles, parquet and joinery. In 2016, VPA-covered products comprised 99% of Guyana’s timber product exports. The remaining 1% included furniture and building components.
How useful is the VPA, given that Guyana has such a low deforestation rate?
While VPAs aim to reduce illegal logging and deforestation, these are not their only benefits. VPAs also improve forest governance and management, supporting a country’s national sustainable development objectives. VPAs do so by improving legislative clarity, accountability, participation in decision making and transparency. They improve coordination among government agencies and build the capacity of governments, businesses and other stakeholders to play their roles in sustainable forest management and legal timber trade.
VPAs, in addition to reducing illegal logging and deforestation, also allow for systems of tracing and tracking timber to be improved. Additionally, Guyana’s entry into a VPA will signal to rest of the world that it is serious about using its forests in a sustainable and environmentally-friendly manner.
The VPA process itself has allowed for a number of key agencies who have a role to play in managing the forests resources of the country to sit together and make the best decisions governing how the forest resources should be utilised. It is expected that this discussion will continue after the VPA is ratified.
How useful is the VPA, given that Cameroon’s timber products are increasingly going to less scrupulous markets than the EU?
Cameroon’s timber legality assurance system and related regulations apply to all markets.
How useful is the VPA, given that Guyana also exports timber to non-EU markets?
Guyana’s timber legality assurance system and related regulations apply to all export markets, as well as the domestic market.
How will the VPA address illegal logging and trade in the domestic market?
The VPA will apply to all timber products of types listed in Annex I that are sold on the domestic market or exported. In the context of the VPA, the timber legality assurance system will incorporate new functionalities to better assess the legal compliance of all Guyanese producers, processors, and traders operating on the domestic and export markets.
Guyana will also establish documented procedures requiring operators that import and/or buy timber products to exercise due diligence to demonstrate the legal origin of the timber products sourced.
How will the VPA protect community rights?
The VPA legality definition includes indicators for each type of forest operator, obliging them to respect tenure or user rights to resources that may be affected by timber harvest rights, where such rights exist. The legality definition also includes a dedicated matrix for Amerindian villages, with specific indicators adapted to the practices and legal requirements of these forest operators. In the fourth negotiation session, Guyana and the EU acknowledged that the VPA represents an opportunity to address broader governance issues. Both Parties recognised that stakeholders have raised land titling and land-use issues.
However, the Parties cautioned that addressing land title and land-use issues is a longer-term process, requiring an inclusive mechanism providing a dedicated space for dialogue on land tenure, land use and conflicts over land use among all concerned parties instrumental in strengthening governance and law enforcement. The VPA annex on supporting measures will provide support to the Grievance and Redress Mechanism of the current Amerindian Land Titling Project. The Project is a tool that will allow complaints relating to Amerindian land issues to be brought to the attention of Government Ministries and Agencies.
How will the VPA boost trade with the EU?
The VPA describes a timber legality assurance system that, when fully operational, will verify the legality of timber products and issue FLEGT licences to exports bound for the EU. FLEGT licences automatically meet the requirements of the EU Timber Regulation (EUTR). This means operators in the EU can place FLEGT-licensed products on the market without carrying out due diligence, thereby saving time and money. FLEGT-licensed products should therefore be more attractive to buyers than equivalent products that do not have FLEGT licences.
How was the VPA negotiated?
The European Commission’s Directorate General for International Cooperation and Development (DG DEVCO) negotiated on behalf of the EU. For Guyana, the negotiations were led by the Guyana Forestry Commission and included participation by representatives of Guyanese private sector, Government ministries and agencies, and indigenous peoples.
The mechanisms of consultation included seeking written comments on draft VPA annexes; posting drafts of the legality definition online for comment; stakeholder consultation workshops; and holding regular feedback meetings on key issues with the industry associations and enterprises.
Documents were discussed during the negotiation sessions and through bilateral videoconferences and email exchanges.
Which Guyanese stakeholders and institutions have played roles in the VPA process?
The institutions and stakeholders that have played a role in the VPA process are the Guyana Forestry Commission and its parent ministry (the Ministry of Natural Resources), the Guyana Revenue Authority, the Ministry of Legal Affairs, the Ministry of Indigenous Peoples Affairs, the Forest Products Development and Marketing Council, the Forest Products Association, the Small Loggers Association, the Guyana Manufacturers and Services Association, the Indigenous People’s Commission, the Ministry of Foreign Affairs, and the National Toshaos Council.
Why has the VPA process taken so long?
Meaningful change takes time. The VPA process is taking the time necessary to build a consensus among national stakeholders and to design, revise and implement a timber legality assurance system that is robust and credible. It would be wrong to compare the pace of VPA negotiation and implementation between countries.
When will FLEGT licensing start?
After the entry into force of a VPA, there is typically a period of intense technical work to establish all systems and procedures required for its implementation. FLEGT licensing can only begin after Guyana’s timber legality assurance system is fully operational and a joint assessment by Guyana and the EU confirms that the system fully meets the requirements described in the VPA.
How will the EU and Guyana oversee VPA implementation?
Guyana and the EU will establish a Joint Monitoring and Review Committee to oversee VPA implementation.
What products does the Guyana-EU VPA cover?
Products covered by the VPA include all those required by the EU regulation establishing a FLEGT licensing scheme, which are a minimum requirement for VPAs: logs, sawn timber, railway sleepers, plywood and veneer.
In addition to the minimum requirements of the product scope of a VPA, the VPA also covers other timber products such as items under HS Code 4404 (including poles), HS Code 4409 (including continuously shaped wood products) and HS Code 4418 (including builders’ joinery, cellular wood panels, assembled floor panels and shingles).
Annex I of the VPA provides a comprehensive list of products covered by the VPA.
What is the Guyana’s timber legality assurance system?
The Guyana legality assurance system (GTLAS) is designed to verify the legality of timber from the forest or the point of import through the entire supply chain to the point of final sale or export. The GTLAS covers all sources of timber in Guyana and guarantees the legality along the entire supply chain (from stump or import to processing to export or sale on the domestic market). The GTLAS covers the domestic market and all export markets. The system combines multiple and cross-referenced field verification procedures, associated with desk-based data verification. It is currently a mixed electronic and paper-based system, with a commitment by Guyana to gradually transition to a fully electronic system.
An annex of the Guyana-EU VPA describes the measures that will be put in place during the implementation of Guyana’s timber legality assurance system. In 2019, in consultation with Guinean stakeholders and the EU, a draft Joint Implementation Framework outlining the activities, responsibilities and timeline to implement the VPA was developed. This draft Framework is scheduled to be adopted by the Parties at the first meeting of the pre-JMRC. Through the JRMC, the EU and Guyana will have joint oversight of implementation progress.
What is a FLEGT licence?
A FLEGT licence is a licence issued by a timber-producing country that has a Voluntary Partnership Agreement (VPA) with the EU. The licence attests to the legality of the timber or timber products.
When Guyana’s timber legality assurance system is fully working as described in the Guyana-EU VPA, Guyana will issue FLEGT licences for timber products bound for the EU, if those products fall under the scope of the VPA.
What if problems emerge? Who has oversight of the VPA?
After Guyana and EU have ratified the VPA, they will set up a Joint Monitoring and Review Committee (JMRC) to oversee implementation of the VPA. The JMRC will respond to any concerns about problems in implementation as they arise. Implementation can therefore improves as it proceeds.
Until Guyana issues FLEGT licences, what requirements must its timber meet to enter the EU market?
Until the start of FLEGT licensing, timber products that Guyana exports to the EU will have to go through the normal due diligence process under the EU Timber Regulation (EUTR). The EUTR prohibits the placing on the market of illegal timber and requires companies placing timber on the EU market to assess and mitigate the risk of illegal timber entering their supply chain. Once FLEGT licensing starts, FLEGT-licensed products automatically meet the EUTR requirements, meaning that no due diligence is required.
How will the impacts of the VPA be monitored?
The EU and Guyana commit in the VPA to monitor the social, economic and environmental effects of the VPA.
The European Commission has appointed the International Tropical Timber Organization as the FLEGT Independent Market Monitor (IMM) for all VPA countries. The market monitor will assess the trade in timber products between Guyana and the EU, and the impacts of FLEGT licensing on this trade. The IMM published a baseline report in 2015. More recent reports are available on the IMM website.
How will the VPA beneﬁt Guyana?
The VPA is expected to bring economic, social and environmental benefits to Guyana.
What benefits have already arisen from the VPA process?
Several positive developments have emerged during the VPA negotiations: