European Union Timber Regulation: Is It Legal?

Date01 July 2014
Published date01 July 2014
European Union Timber Regulation: Is It Legal?
Akiva Fishman and Krystof Obidzinski
The recent entry into force of the European Union (EU)
Timber Regulation completes the EU’s anti-illegal
logging policy framework – the most comprehensive
legislative effort to combat illegal logging in the world.
The Regulation prohibits the import of timber to the
European market that violates applicable laws of the
harvest country, and requires that importers conduct
due diligence to mitigate the risk that their inventories
contain illegal timber. Despite this strong stance, the
Regulation’s ability to reduce the incidence of timber
illegality depends on its ability to withstand challenges
under international trade law. No case yet decided by
the World Trade Organization’s dispute bodies has
considered the implications of trade restrictions built
on foreign definitions of legality. An analysis of the
evant trade and environment cases reveals a possibil-
ity that the EU Timber Regulation may constitute an
illegal trade barrier.
Deforestation has variously been proclaimed a
‘modern-day plague’1and a ‘tragedy’ of grand propor-
tions.2Its adverse consequences are significant and
widely felt, including the disruption of hydrological
cycles,3a reduction in biodiversity4and a contribution
to rising atmospheric levels of greenhouse gases.5
Forests are often perceived as private goods, but the
global benefits they provide (e.g., weather-regulating
services, habitat for biota, sinks for carbon) indicate
that they are properly regarded as public goods as well.6
This public good character has spurred a ‘high level of
global interest’ in the sustainability of forest manage-
ment practices employed in forested countries.7The
international community has pursued several strategies
to address deforestation, but to date these have gener-
ally proven unsuccessful. In the lead-up to the 1992
United Nations (UN) Conference on Environment and
Development, some countries pressed for a robust
international forest convention, but strong opposition
from actors including the Group of 77 and China to the
inclusion of any binding commitments forced negotia-
tors to settle for a set of non-legally binding Forest
Principles.8Following this conference, a series of insti-
tutions were established to keep deforestation on the
international agenda, but these have failed to make
significant headway toward a binding treaty.9Simulta-
neously, international development groups tried condi-
tioning development aid on domestic efforts to tackle
deforestation, and private schemes, such as the Forest
Stewardship Council, emerged to certify sustainably
managed forests, but these efforts have also largely
failed to slow deforestation.10 A related trend has seen
increased attention paid to the economic ‘services’ that
ecosystems provide, with numerous initiatives being
launched to pay ecosystem users to conserve these ser-
vices.11 However, the conservation impacts to date of
such payment for ecosystem services programmes have
been ‘modest’ and their methods have been heatedly
criticized.12 All the while, ‘soft’ forest law has continued
to evolve through instruments such as Chapter 11 of
Agenda 21 on ‘Combating Deforestation’, policy pro-
posals developed by the Intergovernmental Panel on
Forests and the Intergovernmental Forum on Forests,
the Non-Legally Binding Instrument on All Types of
1National Geographic, ‘Deforestation’, found at: http://
2B. Bowonder, ‘Deforestation in Developing Countries’, 15:2 Journal
of Environmental Systems (1985/1986), 171, at 171.
3D. Werth and R. Avissar, ‘The Local and Global Effects of Amazon
Deforestation’, 107:D20 Journal of Geophysical Research (2002),
8087, at 8087; P.M. Fearnside, ‘Deforestation in Brazilian Amazonia:
History, Rates and Consequences’, 19:3 Conservation Biology
(2005), 680, at 683.
4M.K. Pandit et al., ‘Unreported Yet Massive Deforestation Driving
Loss of Endemic Biodiversity in Indian Himalaya’, 16:1 Biodiversity
Conservation (2007), 153, at 153.
5R.F Hughes, J.B Kauffman and V.J. Jaramillo, ‘Ecosystem-Scale
Impacts of Deforestation and Land Use in a Humid Tropical Region of
Mexico’, 10:2 Ecological Applications (2000), 515, at 515.
6D. Brown et al., Legal Timber: Verif‌ication and Governance in the
Forest Sector (Overseas Development Institute, 2008), at 3.
9Ibid., at 4.
10 Ibid. Aid conditionality has failed in part because withholding loans
runs counter to the purposes of the World Bank and the International
Monetary Fund, and because the forest industry is often more inf‌lu-
ential than international donors within forested countries. Certif‌ication
of sustainably managed forests has been too expensive and prone to
benef‌itting forest managers who already employ sustainable prac-
tices. Ibid., at 4–5.
11 E. Gómez-Baggethun et al., ‘The History of Ecosystem Services in
Economic Theory and Practice: From Early Notions to Markets and
Payment Schemes’, 69:6 Ecological Economics (2010), 1209, at
12 S. Wunder, ‘Are Direct Payments for Environmental Services Spell-
ing Doom for Sustainable Forest Management in the Tropics?’, 11:2
Ecology and Society (2006).
Review of European Community & International Environmental Law
RECIEL 23 (2) 2014. ISSN 2050-0386 DOI: 10.1111/reel.12060
© 2014 John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
Forests13 and a mechanism to tackle emissions from
deforestation and forest degradation adopted under the
UN Framework Convention on Climate Change.
Whatever the merits of these various strategies, the
fact is that throughout the period of their application
in the 1990s and 2000s, rapid deforestation per-
sisted.14 At the current rate of loss, tropical rainforests
could disappear within 100 years.15 In response to con-
tinued forest loss, interest grew around the turn of the
millennium in the possibility of indirectly addressing
deforestation by focusing on trade in illegal timber.16
Restricting imports to allow only timber that complies
with the relevant laws of the country in which it was
harvested should, in principle, eliminate illegal har-
vests driven by foreign demand and reduce the contri-
bution of illegal logging to deforestation. Of course,
deforestation could continue even if all logging were
done legally, but eradicating illegality from the sector
would at least enhance the ability of governments to
require sustainable practices.
The European Union (EU) has taken a leading role in
the effort to create a market for legal timber, enact-
ing the Forest Law Enforcement, Governance and
Trade (FLEGT) licensing scheme17 and the EU Timber
Regulation (EUTR),18 which respectively create volun-
tary and compulsory regimes for assuring the legality
of imported timber. Fundamentally, the EUTR bans
the import of illegal timber and requires importers
to conduct due diligence to ensure that the timber
products in which they trade have legal origins.19
FLEGT licensing provides timber-exporting countries a
means of sidestepping these burdensome due diligence
requirements,20 which could harm the competitiveness
of their timber.
The EUTR is a ‘potentially powerful tool to help the
EU exclude illegal timber from its markets, and so
contribute to its broader objectives of environmental
protection and sustainable development’.21 As the
EU accounts for about 40% of global forest product
imports,22 it has substantial potential to influence the
global timber trade through domestic legislation.
However, the Regulation’s value to the struggle against
illegal logging depends on its ability to withstand chal-
lenge in the World Trade Organization (WTO). The ban
on illegal timber potentially violates two treaties which
the WTO administers: the Agreement on Technical Bar-
riers to Trade (TBT) and the General Agreement on
Tariffs and Trade (GATT). WTO tribunals have never
confronted a regulation quite like the EUTR. Unlike
previously litigated regulations, the EUTR seeks to limit
trade on the basis of foreign definitions of legality
rather than imposing its own substantive requirements.
There is a plausible argument that such an approach
constitutes an impermissible restriction on trade,
which, if borne out, could put the EU’s illegal logging
efforts at risk.
This article analyzes the consistency of the EUTR with
WTO law, arguing that there is a case to be made that
the Regulation violates the GATT. First, it briefly
outlines the development of policy and regulatory
responses to the problem of illegal logging, culminating
in the promulgation of the EUTR. Next, it analyzes the
EUTR with a view to highlighting provisions that poten-
tially conflict with international trade law. The follow-
ing section analyzes relevant elements of this body of
law, arguing that the EUTR is not subject to the TBT,
but that although it probably does not violate the GATT,
it raises novel legal questions that could plausibly result
in a finding to the opposite effect. The concluding
section summarizes the article’s main findings.
International attention first turned to the problem of
illegal logging in the late 1990s,23 but early initiatives
involved limited binding commitments. The Group of 8
(G8) released an Action Programme on Forests in 1998,
which did little more than oblige G8 members to
13 Non-legally Binding Instrument on All Types of Forests (UNGA
Resolution A/RES/62/98, 17 December 2007).
14 Global net deforestation between 1990 and 2000 is estimated at
8.3 million ha per year, or an annual loss of 0.2% of the remaining
forest area. The rate of loss between 2000 and 2010 declined to 5.2
million ha per year, but this still represented an annual net loss of ‘an
area slightly bigger than the size of Costa Rica’. Food and Agriculture
Organization (FAO) of the United Nations, Global Forest Resources
Assessment 2010 (FAO, 2010), at 15–17.
15 See National Geographic, n. 1 above.
16 See D. Brown et al., n. 6 above, at 5–6.
17 Regulation 2173/2005/EC of 20 December 2005 on the Establish-
ment of a FLEGT Licensing Scheme for Imports of Timber into the
European Community, [2005] OJ L347/1, Article 4.1.
18 Regulation 995/2010/EU of 20 October 2010 Laying Down the
Obligations of Operators Who Place Timber and Timber Products on
the Market, [2010] OJ L295/23.
19 Ibid., Articles 4.1 and 6.1.
20 Ibid., Article 3.
21 J. Buckrell and A. Hoare, Controlling Illegal Logging: Implementa-
tion of the EU Timber Regulation (Chatham House, 2011), found at:‌iles/0611buckrell_hoare
22 In 2008, 2009 and 2010, respectively, the EU accounted for 45%,
43% and 41% of global forest product imports. FAO, ‘Forestry Trade
Flows’, FAOSTAT database, found at:
default.aspx>. However, only 20% of timber imports come from tropi-
cal countries, and this proportion is declining rapidly because of the
economic downturn in Europe and increasing barriers to trade in
tropical timber products. See UN Economic Commission for Europe
and FAO, Forest Products Annual Market Review, 2012–2013 (UN,
23 See D. Brown et al., n. 6 above, at 6.
© 2014 John Wiley & Sons Ltd

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