To halt deforestation, we must empower smaller businesses in the legal timber trade

By Daphne Hewitt, Senior Forestry Officer, Food and Agriculture Organization of the United Nations

More than 140 countries in November pledged to work collectively to halt and reverse forest loss and land degradation by 2030 at the United Nations Climate Change Conference.

With agricultural expansion driving 90 percent of deforestation, putting sustainability at the heart of all food production – and not just forest logging activities – is key if we are to meet this pledge. 

But ensuring the legality of timber production and trade is also a critical piece of the puzzle, especially when much of global agricultural expansion starts with cutting trees, and this activity is often illegal.

Illegal logging degrades forests, undermines countries’ efforts to manage them sustainably, contributes to biodiversity loss and threatens livelihoods. It undermines progress towards many of the Sustainable Development Goals, including Goals 8 (decent work), 12 (responsible consumption and production), 13 (climate action) and 15 (life on land).

While the full extent of illegal logging is difficult to gauge, the International Criminal Police Organization (INTERPOL) estimates that its value lies in the range of USD 51–152 billion per year.

The good news is that progress is being made to combat trade in illegally logged timber, for example through bilateral trade agreements between timber-exporting countries and the European Union. Countries are working towards increasing demand for and improving the supply of legal timber, increasingly shaping a global trade environment where the legality of timber imports must be demonstrated.

However, as countries tighten rules to enable sustainable production, there is a danger that one of the biggest players will be left behind, with wide-reaching impacts not only for deforestation, but for livelihoods and national economies.

Micro, small and medium-sized (MSMEs) timber producers and processors play a central role in meeting the growing demand for forest products worldwide. It is estimated that MSMEs provide over 50 percent of total forest-related employment, with the figure in some countries such as Guyana rising to 80-90 percent.

MSMEs often form the backbone of global supply chains for large companies. And the majority of domestic market demand for forest products in tropical timber producing countries is met by MSMEs, often dwarfing a given country’s volume of timber exports.

Forest-sector MSMEs are central to ensuring that forest resource use is legal and sustainable into the future.

But MSMEs can face hurdles in meeting the standards for legality required of increasingly sophisticated and global assurance processes. Despite their limited size and resources, they are expected to comply with legal requirements that are often designed for industrial-sized companies.

So what can we do to ensure they are not inadvertently left behind – which may mean they have little choice but to turn to illegal practices to stay afloat?

Over the last six years, the Food and Agriculture Organization of the United Nations (FAO) and the European Union (EU) have reached out to some 3,300 MSMEs in 20 countries through the FAO-EU Forest Law Enforcement, Governance and Trade (FLEGT) Programme.

What is clear from this work is that both MSMEs and their supporting partners need direct support. This includes packaging legality awareness and compliance training together with business skills development, and promoting peer-to-peer networks to share experiences and best practices. Fostering business-to-business exchanges – where MSMEs can prove their ability to provide legality documentation to companies who require it for export markets – are crucial.

In addition, MSMEs working with legal timber need  to be able to compete successfully against those using illegal timber. This requires regulatory frameworks with which MSMEs can comply, and their effective enforcement. It also means creating demand for legal timber so that businesses gain economically from being legal. 

Communication campaigns can raise awareness and inform both the public and businesses simultaneously, creating market pressure. In Guatemala, the National Forests Institute commissioned a campaign entitled Todos a la Legalidad (Everyone for Legality), which reached more than 170,000 people through social media and resulted in the registration of over 300 companies to the National Forest Registry.

Ultimately, MSMEs need to be part of the solution. Who could be better placed to play a first-hand role in ensuring that forests are legally and sustainably used, and so safeguard their own livelihoods and those of generations to come?

With continuing and targeted support, MSMEs can be leaders in the fight to reverse forest loss and to build more sustainable economies by providing a source of legal, traceable timber and sustainable livelihoods.