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Timber and Timber Products and FLEGT (Amendment) (EU Exit) Regulations 2020

Volume 807: debated on Tuesday 27 October 2020

Motion to Approve

Moved by

My Lords, this instrument amends the Timber and Timber Products and FLEGT (EU Exit) Regulations 2018—SI 2018/1025—on the trade in timber and timber products, also known as the 2018 exit regulations.

This instrument is for purposes relating to the implementation of the Northern Ireland protocol and to address deficiencies that have arisen since the 2018 exit regulations were made. This is considered a reserved policy. We have worked with the devolved Administrations on this instrument. The technical amendments in this instrument address deficiencies that have arisen since the 2018 exit regulations were made and, in addition, relate to the implementation of the Northern Ireland protocol. The minor amendments contained in this instrument will ensure that the regulations for the trade in legally harvested timber will operate effectively in the United Kingdom. I make it clear that all the amendments introduced by this instrument are technical operability amendments and do not introduce any policy changes.

The timber regulation and FLEGT licensing regulations address the issue of illegally harvested timber through two measures. On the supply side, the FLEGT regulations provide for a licensing regime with countries which have entered into a partnership agreement, allowing them to issue licences that prove legality of harvest. On the demand side, the timber regulation prohibits the placing on the market of illegally harvested timber and requires businesses to exercise due diligence on timber to ensure its legality.

Illegal logging is a significant driver of deforestation, leading to a dramatic decline in biodiversity and the loss of critical ecosystems services. Deforestation is also a major contributor to climate change. It directly affects rural communities that rely on forests for livelihoods and results in revenue loss to Governments and legitimate businesses. The timber regulation and FLEGT licensing system are therefore vital tools in preventing the trade in this timber.

The instrument’s main purpose is to make amendments to the 2018 exit regulations to facilitate operability within the context of the Northern Ireland protocol. This is achieved by substituting, in several instances, “the Community” and “the United Kingdom”, with “Great Britain”. There are several instances in which reference to “the United Kingdom” is retained from the 2018 regulations. This is to do three things.

First, as a FLEGT voluntary partnership agreement is defined as being constituted between two states or regional organisations, the reference must be to the United Kingdom for this to be correct. Secondly, for the purposes of the UK timber regulation, it defines the market on which timber is placed as the United Kingdom. If this market were to be defined as Great Britain it would have the effect of imposing the obligation to exercise due diligence on businesses importing timber from Northern Ireland to England, Scotland or Wales. This would represent a new check on goods moving from Northern Ireland to Great Britain and so the definition of the United Kingdom is retained. The third retention of United Kingdom is in relation to monitoring organisations. These are approved businesses which are able to offer access to their due diligence systems to those placing timber on the market. The regulations set out requirements in relation to where businesses must be legally established in order to be able to apply to be a monitoring organisation. If this area were to be defined as Great Britain it would preclude businesses in Northern Ireland from being able to apply to be a monitoring organisation under the UK regulations. As such, the definition of the United Kingdom has been retained.

The instrument also amends the dates when the first reports on the UK timber and FLEGT regulations are required. This is to ensure that there is an appropriate amount of time between the implementation of the regulations and the first report being produced. If this were not amended, the first report would be due just three months after the regulation comes into force. It also corrects a typographical error in the 2018 exit regulations by changing “in” to “by” in relation to sanctions imposed by the United Kingdom on timber imports or exports. It also amends the reporting period for the FLEGT regulation to a calendar rather than a financial year to bring it in line with other reporting schedules. This amendment was necessary to deal with an amendment to the EU regulations made after our 2018 exit SI. Finally, this instrument substitutes “IP completion”—the implementation period—for “exit” in the context of the date at which existing monitoring organisations established in the United Kingdom will retain recognition. This change is simply to correct a deficiency that has arisen since the 2018 exit regulations.

The instrument has always been intended for the affirmative procedure. It went through the JCSI without comment. This instrument was not subject to consultation, as it does not alter existing policy. In line with published guidance, there is no need to conduct an impact assessment for this instrument. This is because no, or no significant, impact on the private or voluntary sector is foreseen as this instrument relates to maintenance of existing regulatory standards and the cost of any direct impact from this instrument falls under £5 million. The territorial extent of this instrument is the United Kingdom. This is considered a reserved policy. The devolved Administrations were engaged in the development of the instrument and are content.

The Office for Product Safety & Standards, part of the Department for Business, Energy and Industrial Strategy, is the delivery body for the regulations and will continue in this role for both Northern Ireland and Great Britain. It has been involved in the development of this instrument and has no concerns in relation to implementation or resources. Its expertise in the enforcement of the regulations and its history of working with businesses to understand and meet their obligations will ensure a consistent and transparent transition.

The UK has a long and proud history of work in this area and the Government’s 25-year environment plan has made clear our commitment to support and protect international forests. This regulation will ensure that we can continue to protect valuable global resources, safeguard the livelihoods of some of the world’s most vulnerable people and contribute to tackling climate change. I beg to move.

My Lords, this regulation applies to timber harvested in the EU and third countries. It imposes obligations on those who place timber or timber products on the EU internal market for the first time—

This regulation applies to timber harvested in the EU and third countries. It imposes obligations on those who place timber or timber products plus those who sell or buy these goods in the course of commercial activity. The traders must not place illegally harvested timber—

My Lords, I believe there is a problem connecting to the noble Lord, Lord Bhatia. I suggest we move on and maybe return to him if we can reconnect.

My Lords, although there was no debate in 2018 when these regulations were transposed into UK law, we really should not take it that this is an unimportant issue. The UK is the second-largest importer of timber in the world, so the issue affects a lot of companies. Moreover, as the Minister said, deforestation and forest degradation are responsible for a significant amount of biodiversity loss and 11% of our greenhouse gas emissions. It therefore poses a serious threat to the health of our planet.

We supported the transposition in 2018 of the EU law which prohibited the sale of illegally harvested timber, and we supported the approach which imposes a due diligence obligation on companies. I take this opportunity to welcome the Government’s consultation and their commitment to introducing a due diligence obligation on companies using other commodities associated with deforestation, such as soya, palm oil and cocoa. It was a Liberal Democrat manifesto commitment to introduce such a due diligence obligation, and I called again, in a debate which I led in the House in March, for the Government to introduce such a due diligence obligation in the Environment Bill. Now that the Government have completed their consultation, I hope very much that they will be in a position to do just that.

This specific SI deals mainly with addressing the implications of the Northern Ireland protocol and the fact that EU timber regulations will continue to apply in Northern Ireland, unlike in England, Scotland and Wales. I had a number of questions about the monitoring organisations that timber companies in Northern Ireland would use and I sent them to officials in advance of today’s debate, saying that I would be extremely grateful if they could respond before today. Sadly, they were unable to answer the questions at that point, so I shall repeat them now.

Do these regulations mean that Northern Ireland companies can use only the monitoring organisations on the approved and published EU list? The list is an integral part of the EU regulations. Given that we will come out of the European Union on 31 December, will UK monitoring organisations be removed from the list, therefore requiring companies in Northern Ireland to use monitoring organisations from elsewhere in Europe? The officials have responded that they will clarify with the European Commission whether that is the case.

It is a very important issue because most timber companies in the UK, including in Northern Ireland, are small and medium-sized companies and very few of them have their own due diligence obligations, so they will require monitoring organisations to undertake that function for them. As it stands now, no organisations in Northern Ireland are able to undertake that function. Let us be clear about it: there are only 13 such organisations in the whole of Europe, so it is not likely that a new one will be set up quickly in Northern Ireland. I do not oppose this statutory instrument but think we should put on record that it will undoubtedly bring further uncertainty to timber companies in Northern Ireland, post Brexit.

I shall close my remarks on the issue of the enforcement of these environmental regulations. At the weekend, the “Countryfile” programme on the BBC highlighted the cuts to budgets for environmental enforcement resources and programmes here in the UK. It was disappointing that no one from Defra was prepared to go on to that programme to comment. The enforcement of these regulations falls, as the Minister said, to the Office for Product Safety and Standards. It is not an insignificant responsibility and I hope the Minister can reassure us that that body—it is a unit in BEIS—will have sufficient resources to ensure that the regulations will be properly enforced to ensure that there is no lessening in our commitment to tackling problems of deforestation.

My Lords, I thank the Minister for his explanation of this revised SI. I also thank the noble Baroness, Lady Parminter, for her contribution and very helpful questions. Obviously, we are keen to have in place a robust and comprehensive licensing scheme for the import of timber. As the noble Lord and the noble Baroness said, we are all too well aware of the devastation that can be caused by illegal logging on biodiversity and global attempts to mitigate the impact of the climate change emergency. It is good that the EU has taken a stand on this and it is important that we replicate the provision when we leave the EU.

The Explanatory Memorandum makes clear that the EU has entered into a number of voluntary partnership agreements with certain countries to implement a licensing scheme. Does the Minister believe that this licensing scheme is sufficiently widespread to cover all potential timber-exporting countries we might deal with in the future, or is it the UK’s ambition to expand the reach of these licensing agreements so that other countries become partners with us? If the EU makes new or improved licensing agreements after we leave the EU, is it the UK’s intention to mirror those new agreements in UK law as well?

The Explanatory Memorandum also makes clear that it is necessary to have slightly different provisions for Great Britain and Northern Ireland to respect the terms of the Northern Ireland protocol. It says that any voluntary partnership agreement entered into with a third country by the Government will automatically be extended to Northern Ireland, even though Northern Ireland will technically be subject to the EU regulations. So, following on from my earlier question, if the UK entered into a new agreement with a country that does not have an equivalent agreement with the EU, could the Minister clarify what impact this would have on Northern Ireland and the flow of cross-border trade on the island of Ireland?

Finally, I return to the vexed question of errors—and I am sorry to return to this issue. It is interesting that I call them “errors” and the Minister calls them “deficiencies”—we could argue on the head of a pin about the difference. Either way, when we debated the INSPIRE (Amendment) (EU Exit) Regulations on 9 September—which also was correcting a number of errors—I asked the Minister what lessons the department had learned from these recurrent mistakes and what processes had been put in place to overcome them. At the time, the Minister chose not to respond to those questions, so I am giving him the opportunity to address them today. Could he perhaps also write to me with the total number of Defra EU exit SIs that have already come into effect only for errors to be identified and revisions needing to be made? I raise the issue now because, as the Minister will know, we have a heavy couple of months ahead, with hundreds of pages of SIs still to be considered. The last thing that we want to be doing is correcting previous mistakes on top of that. Perhaps the Minister could therefore tell us what improved checks have been put in place to avoid that. I look forward to his response.

My Lords, I will try calling the noble Lord, Lord Bhatia, one more time to see whether we can connect with him. Lord Bhatia? No, we are still having trouble with the connection. I call the Minister.

I thank noble Lords who have contributed—or tried to contribute—to this debate today. The Timber and Timber Products and FLEGT (Amendment) (EU Exit) Regulations 2020 make no change to the existing policy to tackle the trade in illegally harvested timber. The Government’s 25-year environment plan sets out our continued commitment to protecting and restoring the world’s forests and to supporting sustainable agriculture. This instrument will ensure that we have the operable regulations we need to address this.

I begin by acknowledging the attempts by the noble Lord, Lord Bhatia, to contribute to the debate. I am afraid that I was not able to pick up on any of the questions or comments that he raised. I invite him to write to me after this sitting and I shall do my best to provide a written response to him on whatever issues he was planning on raising.

I appreciate very much the kind sentiments and support which the noble Baroness, Lady Parminter, expressed for this measure and for other measures that the Government are introducing against illegal forestry. This clearly is an important issue. The UK is a significant importer of timber and other forest products. As we know, deforestation contributes approximately 25% or 26%—although some put the figure at 30%—of the emissions that are contributing to climate change, as well as undermining the world’s biodiversity, contributing to the extraordinary levels of biodiversity loss that we have seen in recent years. It is also undermining those who depend most directly on forests; up to 1 billion people depend on forests for their livelihood. Deforestation is a global issue and a high priority.

I also thank the noble Baroness for acknowledging the work being conducted to extend the due diligence on timber and timber products to commodities. As she said, the Government have just finished consulting on measures that will introduce due diligence requirements on bigger businesses to ensure that, as they import commodities, they are not also importing illegal deforestation. The Government will respond to the consultation soon, but we are keen to avoid overlapping this regime with the timber regulations that we are discussing today. Timber and timber products are not in the scope of our current due diligence on proposals for forest-risk commodities. Our intention is to build an alliance of countries around the world—north, south, east, west; producer, consumer, rich and poor—committed to doing similar on commodities, with the view that we can theoretically flip the market in favour of forests being worth more alive than dead. It matters.

The noble Baroness asked whether we would, in any sense, end up in a weaker position on illegally harvested timber following the introduction of this SI. The answer is no. The UK timber regulation FLEGT replicates the EU regulations, so there is no reduction in any sense—of scope, application or enforcement. It makes no change to policy whatsoever. Our 25-year environment plan sets out our ambition to support and protect the world’s forests, not just to expand our own, as well as to support sustainable agriculture and work towards zero-deforestation supply chains. Our commitment in this area remains absolutely undimmed.

The noble Baroness raised questions on the situation in Northern Ireland following the passage of this instrument. As she said, officials are not yet able to provide a forensic answer to the question she raised. However, we will clearly have to, and will. We are in the process of resolving a number of operational issues with the European Commission and will clarify whether Northern Ireland companies importing timber can use only monitoring organisations on the approved and published EU list, and if Northern Ireland businesses will have to find other monitoring organisations from elsewhere in the EU. A monitoring organisation based in Northern Ireland would be able to operate in both Great Britain, under our regulations, and Northern Ireland, based on the technical notice.

The noble Baroness also asked whether the OPSS would be sufficiently resourced and whether I can provide that reassurance. I am happy to provide it: the regulatory body for Northern Ireland is the same organisation, the OPSS, and will be sufficiently resourced to undertake its duties in both Northern Ireland and Great Britain.

I move on to questions from and comments made by the noble Baroness, Lady Jones. I also thank her for her remarks, as this is important. She celebrated the stand the European Union has taken on this issue, and I join her in doing so. This is important legislation; I add only that the UK took a leading role in helping to craft it from the outset. A lot of the work that we are funding through what was the Department for International Development, and is now part of the FCDO, is enabling and helping producer countries to comply with those regulations. The UK Department for International Development, as it then was, worked closely with Indonesia, which is the first country to achieve recognised status, with considerable investment on our part. This investment is now being mirrored in other countries. I fully agree that this is a pioneering move by the European Union, and the UK can take credit for having driven this process through and ensuring that it is sufficient and, indeed, radical.

The noble Baroness asked whether our ambition for VPAs is sufficiently widespread. I think that was her question. It is worth saying that the countries that have signed VPAs with the EU so far include Cameroon, the Central African Republic, Ghana, Indonesia, Liberia, the Democratic Republic of the Congo and Vietnam. As I said, Indonesia was the first to reach the milestone of FLEGT licensing. VPAs with Guyana and Honduras have been initiated, and the countries currently negotiating VPAs are Côte d’Ivoire, the Democratic Republic of the Congo, Gabon, Laos, Malaysia and Thailand.

As I said, the function of this instrument is to make minor amendments to the Timber and Timber Products and FLEGT (Amendment) (EU Exit) Regulations. As such, the replication of VPAs is not within its scope. We will be laying a separate instrument in January 2021 related to the FLEGT licensing scheme in Indonesia. This will list Indonesia as a partner country, which will allow Indonesian licences to be accepted under FLEGT regulations. Needless to say, our ambition is to ensure that, in due course, the global timber trade is covered by these or similar regulatory protections.

The noble Baroness asked me how many EU exit SIs have had to return as a consequence of errors. She will probably not be surprised to hear that I do not know or have the answer to that question. However, I will write to her and provide an answer. I will let her know exactly how many there are and include, in my response, the steps taken by the department to minimise the risk of such errors being repeated over the next few months. I hope I covered all the questions that were raised. If I did not, I apologise.

There was one question I was not clear on, which is what will happen if, post January, the EU and UK diverge on voluntary agreements. I was thinking of the impact on Northern Ireland if the UK and EU were to have separate voluntary agreements with different countries. Was that envisaged or did we always intend to follow the EU’s lead on this?

I thank the noble Baroness for the question. Our ambition on this issue is no less than that of the European Union. We will clearly have to work together and fully intend to. This instrument does not change the 2018 exit regulations on which VPA applies in Northern Ireland, so the effect is that the UK VPA would apply. We are working on ensuring the operability of the agreement in Northern Ireland, alongside the protocols. There are questions that remain unanswered, but those discussions are happily with our European Union colleagues. There do not seem to be issues there that we will struggle to resolve, but discussions will need to continue for the foreseeable future.

Motion agreed.

Sitting suspended.