Friday 30 August 2013

Is Ghana's FLEGT VPA grinding to a halt...Introduction

In a 7-part series, I will be bringing you closer to the contents of my paper with the title: "Is Ghana's FLEGT VPA grinding to a halt and failing to achieve improvement in forest governance". Today, I will deal with the introduction and follow it subsequently with details of the challenges that the sector still face and then conclude with some proposals on the way forward. I have already provided the summary to this paper in an earlier post on my blog. I will at the end provide a link to where you can access the full paper. So lets get into the details now!

1         Introduction

1.1      Ghana’s forest sector

Forests remain important in the socio-economic sectors of Ghana. Locally, forests remain a sacred place of connection for communities for spiritual and cultural purposes. Forests provide raw materials for building and are an important source of food for forest fringe communities. It offers employment, income and supports several hundreds of rural livelihoods. At the national level, the forest sector is estimated to contribute 4% to the GDP. However, Ghana’s forest cover has reduced from an estimated 8.6 million ha to 1.6 million ha since the turn of the century. The timber industry export provided 10% of foreign exchange for the country between 1990 and 2000 which declined to 8.1% in 2005 and to 1.3% in 2011. The forest sector provides direct employment for more than 270,000 people (both formal and informal sectors) and livelihood to around 650,000[1] people (indirect employment/income). Chainsaw milling (CSM)’s contribution to the domestic timber market is estimated at US $554 million (GHc 280 million)[2] while the formal sector in terms of export of timber provides around US $180 million (between 2009 and 2010)[3]. The EU remains an important export destination of Ghana’s timber[4].  

1.2      Forest Law Enforcement, Governance and Trade (FLEGT)

In 2009 Ghana and the European Union ratified a Voluntary Partnership Agreement (VPA) to regulate the trade in timber and timber products within the framework of the Forest Law Enforcement and Governance, Trade (FLEGT) Action Plan. On the demand side, significant progress has been made with the coming into force of the EU’s Timber Regulation (EUTR) in March 2013, which prohibits the import of illegal timber and places a responsibility on importers to check their suppliers to ensure that they purchase legal timber. Penalties are determined by individual EU countries but could be up to two years imprisonment or a 50,000 EURO fine[5]. Even though the responsibility of proof of illegality rests with the importing companies in the EU, there is the risk of blacklisting of exporting companies in Ghana when it is proven that their timber is exploited in violation of the Ghanaian laws once the VPA comes into force. Under the EUTR, importing companies have the responsibility to ensure due diligence is undertaken on all timber products imported and demonstrate measures to mitigate any risks involved with their trade. On the supply side, the VPA is to ensure that a FLEGT licence covers consignment of shipment of timber to the EU proving its legality with the country’s laws on forestry. As will be shown in the subsequent paragraphs it is very likely that most of Ghana’s exported timber does not currently meet the legality definition of the VPA because necessary legal reforms in the sector has not yet been achieved. The VPA is also aimed at assisting timber producing countries to improve governance in the forest sector in return for guaranteed market access for timber into the EU. The Ghana VPA includes a wide range of necessary policy and legal reforms that will promote transparency, accountability and good governance[6]. Since the VPA came into force in 2009, most activities have focused on how to put technical specifications of the Legality Assurance System (LAS) in place and to pilot the Wood Tracking System (WTS) which is part of the LAS to ensure traceability of timber along the value chain from the forest of origin to the port of export. Since the pilot system was completed in 2012, little progress has been made with regards to scaling it up at the national level.

1.3      Governance reforms envisaged by the VPA

The promised governance improvement integrated in the VPA and towards improved transparency and accountability is not happening. The fundamental challenges are deepening rather than abating. Ghana is moving at a snail’s pace with the VPA implementation and this threatens the credibility of the VPA process, the created momentum and its appropriateness to improve forest governance. This paper highlights the persisting challenges in the forest sector and explains why there is the need for CSOs to put pressure on government and the EU to move forward on them or risk plunging the whole FLEGT VPA into a credibility crisis.  The paper further aims to inform the general public on the remaining challenges in order to galvanise stakeholder support to demand the necessary governance reform. The focus of this paper is on the governance reform aspects of the VPA that is necessary to ensure accountability, transparency and coordination of capacity for participation. It will indicate the progress made since the VPA was ratified in 2009 and then conclude by providing some recommendations on the way forward.



[1] This represents 2.6% of the population of the country
[2] GHc is Ghana cedis (national currency for Ghana). Using an exchange rate of GHc 1 to $ 1.98 at the time of writing the paper
[3] This data is sourced from the Ghana government’s Forest Investment Plan. The Plan is the government’s proposal for funding from the Forest Investment Program of the Climate Investment Fund run by World Bank (WB), African Development Bank (AfDB) and the International Finance Corporation (IFC) 
[4] According to the June 2013 edition of the TIDD of Forestry Commission’s report on the trade and export performance of the industry, Europe emerged as the major destination for Ghana’s wood products export during Jan-June 2013. Export to various European countries in Jan- June 2013 amounted to Euro 29.76million (48.48%) from a volume of about 56,700m3 (41.28%). Report available on http://www.fcghana.org/assets/file/Publications/Industry_Trade/Export_Reports/year%202013/June_2013.pdf
[5] Information is sourced from a recently published study of Global Witness that alleges massive abuse of Ghana’s timber permits systems and alarms of high-risk coming from Ghana. Available on http://www.globalwitness.org/ghanapermits
[6] Press release from the first (1st) Joint Monitoring and Review Mechanism (JMRM) of the Ghana-EU VPA published on January 29, 2010. Available at the Forestry Commission website: www.fcghana.org

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