Opportunities for wood exports
According to General Secretary of the Vietnam Timber and Forest Product Association (Viforest) Nguyen Ton Quyen, the EU is a very important market for Vietnamese wood. Therefore, the FLEGT VPA will help wooden products to be directly exported to 28 European countries without any intermediate country. Vietnam’s timber export turnover is expected to double from US$700 million to over US$1 billion in the next few years.
He also noted that, with clear regulations on lawful wood origins, the FLEGT VPA will help Vietnam improve the institution on forest management and deal with illegal wood exploitation and trade, contributing to promoting the export market for Vietnamese wood and wooden products as well as raising the prestige and image of the wood processing industry of Vietnam in the world.
Enterprises’ readiness
Under the FLEGT VPA, 100% of timber exported to the EU must be legal, which will increase costs and require many steps to ensure the traceability of origins.
In order to meet requirements of the agreement, General Director of the General Department of Forestry under the Ministry of Agriculture and Rural Development, Nguyen Quoc Tri, said that, firstly, enterprises should have certificates proving the clear and legal origins of their timber and prepare documents on the origin of the wood. In addition, they should self-assess their capacity under the agreement’s criteria. If enterprises are classified into the Category 1, they will be self-control in timber exports and have the ability to expand their markets.
Over the past ten years, wood processing and export enterprises have gained sustainable forest certifications (FSC), said Viforest General Secretary Quyen. In 2015, the association’s members signed a commitment to say “no” to illegal timber.
General Director of the General Department of Forestry Tri emphasised that FLEGT VPA’s commitments have been stipulated in the Forest Law, which will take effect from January 1, 2019. By early 2021 when the agreement is put into force, forest management agencies, and forestry and timber enterprises in Vietnam will be ready to meet the conditions.
According to the General Department of Forestry, after signing the FLEGT VPA, Vietnam will establish a system to verify legal timber and license shipments of wood and wooden products that are exported to the EU.
The State agencies shall classify the levels of risk of enterprises, which will be considered as a basis for granting FLEGT licenses.
Accordingly, Group 1 includes law-abiding companies. They are allowed to be proactive in their production and business activities and will be granted FLEGT licenses if eligible. Meanwhile, Group 2 consists of enterprises which are non-compliant with the law. They will have to suffer a practical check for 20% of their shipments prior to export and FLEGT licensing.
The EU is currently the fourth largest wood import market, accounting for over 10% of the wood export market share of Vietnam. There are now over 400 Vietnamese timber enterprises conducting their export activities to this market. The General Department of Forestry is improving its legal documents and facilities to start issuing FLEGT licenses to enterprises by the end of next year.
The negotiations for the FLEGT VPA started in November 2010. It aimed to expand the export market for Vietnamese wood and wooden products through Vietnam's commitment to building a legal timber certification system (VNTLAS) to serve for issuing FLEGT licenses for shipments of wood and wooden products to the EU.
