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News release

Tropical timber trade speaks on downturn, illegal activities, new agreement

Yokohama, Japan, 8 November 2003

The tropical timber trade had not yet turned the economic corner and continued to suffer from low prices, a spokesperson for the trade said on Wednesday.

In a statement made at the 35th Session of the International Tropical Timber Council, the spokesperson for the Trade Advisory Group (TAG), Mr Barney Chan, said 2003 has been a difficult year for the trade.

"Demand for tropical timber has been severely affected in many of the major markets as the world economies struggled to shake off economic recession," he said.

"SARS and the Middle East conflicts have all had a serious impact on consumer confidence and this has affected the timber trade. Currency fluctuations have also made trading difficult and currency hedging has become an even more important skill in the timber business.

"While we have seen encouraging signs of improvement in the prices for logs and sawnwood in some producing regions, the tropical plywood sector is still reeling from desperately low prices. At these price levels mills are either cutting back on production or even being forced to close. The consequences of this have been serious job losses in the sector."

Mr Chan also condemned those loggers and traders who engage in illegal activities, and said a relatively small number of rogue traders were having a damaging effect on the majority of traders who operated within the law.

"It concerns us that discussions on illegal logging are becoming increasingly politicized," he said. "There appears to be a rush to judgment, to indict all of industry for the illegal activities of a few. This is wrong. If we continue down this path, the future of the tropical timber trade is at risk."

Mr Chan urged Council members to involve the private sector as they pursue ways of combating illegal activities.

"Industry must be an equal partner in this pursuit. Industry has been remiss in answering some of the absurd allegations that surround the very real problem of illegal logging. We have left unanswered charges of gross negligence. We do so no longer."

Mr Chan pointed out that producing and consuming countries have systems in place that account for the purchasing and inventory of raw materials and products. Domestic industry and the international trade operate on a system of permits, certificates and receipts, he said. The TAG proposed that ITTO consider a review and audit of such existing industry systems to identify areas for improvement. This idea was subsequently included in ITTO's biennial work program, although it awaits funding and further discussion within Council.

In a related initiative, the Council also approved and provided funding to support the participation of and contribution of the TAG and its sister body, the Civil Society Advisory Group, in Council sessions, including the organization of a panel at the 36th Session (in July 2004) to debate illegal logging and trade.

In noting that preparations are underway for the negotiation of the successor agreement to the International Tropical Timber Agreement, 1994, Mr Chan said that TAG members thought the present agreement had served the Organization well.

"The Council has, over the years, proved that it can be flexible and move with the times as new issues arise," he said.

"The process of negotiation and consensus building that has developed in the Organization is unique in the international community and ITTO has a well-deserved reputation for being an action-oriented body. Our view is that if it is not broken, do not fix it."

The TAG is an informal grouping established to provide input to ITTO's policy and project work. It is open to anyone with an interest in the tropical timber trade, including representatives of tropical forest industries, timber exporters and importers, timber trade and industry consultants, and trade and industry associations.

Background documents for the 35th Session of the International Tropical Timber Council are available at (www.itto.or.jp). Daily reports are downloadable from the website of the Earth Negotiations Bulletin (www.iisd.ca). For more information contact: Mike Adams, ITTO Market Information Service (itto-mis@itto.or.jp).