Professional Documents
Culture Documents
26%
OF TOTAL LAND AREA
740,000,000 ha
But only 0.2 ha per person
255
80 214
191
1990
2000
2010
East Asia
South Asia
Southeast Asia
Oceania
Primary forests
19% OF ASIA-PACIFIC
FORESTS
65% OF ASIA-PACIFIC
FORESTS
Planted forests
16% OF ASIA-PACIFIC
FORESTS
70
60 million m3
ASIA
Import Export
50
40
30
20
10
0
Export
OCEANIA
80
60 40
120 100 80
60 40 20
20 0
40 20 0
International Value-
Forest Tenure
Forest ownership in Asia-Pacific
Private sector 4%
Forest Use
20% multiple-use
management
14% Conservation of
biodiversity
What happens to forests and forestry is determined to a large extent by what happens outside the forestry sector and by larger societal changes.
Population increase
3.6 billion (2005) 4.2 billion (2020)
Greatest increases in
densely populated developing countries
Urban population
38% people in urban areas (2005) 47% people in urban areas (2020)
Key drivers of change: Societal and Environmental concerns Local and national issues and
actions
commitments and the outcomes of climate change negotiations Pressure from stakeholders in the global forest resource
local forest tenure mainstreamed into National Forest Programmes Sustained efforts in REDD+ readiness FLEGT: demand and supply Third party certification of legality, SFM and Chain-of-Custody Payments for ecosystem services (PES)
Thank you
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26
10% of the world forests are certified (UNECE/FAO 2013) 28% of industrial roundwood production is certified 60% of total certified area is PEFC
98%
92%
89%
2% of forests in Asia are certified (UNECE/FAO 2013) 8% of forests in Southeast Asia are certified (WB/Profor 2012) 11% of production forests in Southeast Asia are certified
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(WB/Profor 2012)
Million Hectares
28
6609
Legality & Governance issues being addresses at the highest levels FSC actively promoting certification in many countries throughout the region results are evident PEFC working to scale up its Asia Promotions Initiative and expand our presence in the region Number of national certification organizations emerging with the potential to achieve wider uptake in forests & markets Companies continuing to make commitments to sourcing sustainable products driving up demand signals
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THANK YOU
PEFC International
10 Route de lAroport, 1215 Geneva, Switzerland www.pefc.org info@pefc.org
31
32
33
Address the driving forces of illegal logging both on the demand side as well as in the timber producing countries.
Course of Action/Main Instruments Public Procurement Policies (demand) Voluntary Partnership Agreements (supply) EU Timber Regulation (demand and supply)
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EU FLEGT AP
FLEGT regulation
FLEGT
implementing regulation
EU Timber regulation
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
37
38
EU Timber Regulation
Not covered:
Recycled products Musical instruments Printed matter including magazines, newspapers and books Some special products, like wooden toys
Most timber products are covered. The products covered may change in future.
39
40
Private sector initiatives :Timber certified under the main forest certification schemes is still subject to due diligence requirements.
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42
43
44
700
600
others
500 million US$
veneer
particleboard
400
fiberboard
paper
300
plywood
100
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
45
1800 1600
others
Million US$
1400
particleboard
fiberboard veneer
1200
1000 800
plywood
wood chips
600
400
paper sawnwood
pulp
200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
46
900
800
Million US$
700 600
500
others veneer
wood charcoal
paper
Sawnwood
400
300 200
Furniture
Logs
Wood chips
100
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
47
1000
800
million US$
others
fiberboard wood pulp
600
particleboard
paper
400
200
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
48
200
150
million US$ Others
Sawn wood
100 Logs
50
10
11
12
49
50
51
52
Thank you
EU FLEGT Facility Tomi Tuomasjukka 00358 50 433 9049 Tomi.tuomasjukka@efi.int www.euflegt.efi.int
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EU China BCM
Bilateral Cooperation Mechanism on FLEG signed 2009, implementation started in 2010
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55
56
Thank-you.
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Global union Federations on Wood, Forestry, Construction and Building Material Sectors; 328 Free and Democratic Trade Unions around the world, 89 of them in Asia-Pacific Region; Representing more than 12 million members around the world; Number of International Framework Agreements (IFAs): Mission: to promote the development of trade unions in our sectors throughout the world and to promote and enforce workers rights in the context of sustainable development.
Solidarity Actions
Pacific
IP-SFM Legal Network Organising Unsustainable Logging
Japan/China
Govt Agreement
SEA
Unsustainable logging Outsourcing FC/MNC Organising
South Asia
Unsustainable logging Self-Help Groups Organising
REGIONAL INITIATIVES
Certification:
Ensures legality of the woods and products; Secures a higher priced, highly sought after timber; Adds value to the wood products: Myanmar Timber is $500 per ton vs. Malaysian Timber is $20,000 per ton; Enables unions to organise and promote decent work.
Evolve the national forestry certification scheme through tripartite mechanism process Confidence and Capacity Building Measures
Strengthening of Technical Assistance in cooperation with MTCC and PEFC Tripartite workshop on promotion of Decent Work Agenda in wood and forestry industry
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RAFT (2012-2015)
Provide capacity building & knowledge sharing services to promote trade in responsibly harvested & manufactured wood products
RAFT Partners
Institute for Global Environmental Strategies (IGES)
Analytical inputs on timber legality and sustainable forest management certification Conducted a RAFT study on the potential role of Customs Authorities Produced the first draft of the ASEAN chain of custody guidelines for timber Undertaking a comprehensive review of timber legality issues in PNG
RAFT Partners
Tropical Forest Foundation (TFF)
RAFT work in Indonesia & Papua New Guinea RIL training for forest concessions & training organisations Facilitates legality & chain-of-custody audits & related trainings for forest industries and concessions Provides certification support in technical & management matters
RAFT Partners
WWF Global Forest & Trade Network (GFTN)
Alongside TRAFFIC, developing practical guidance for establishing legality verification systems including: updating GFTNs Guide to Legal and Responsible Sourcing and Exporting in a Shifting Legal Landscape raising awareness and understanding of legality issues
Providing technical assistance to selected tree growers, companies, industry associations & training institutions regarding legal compliance Providing support to forest management companies for mainstreaming legal & responsible forest management using GFTNs existing model, tools and learning
RAFT Partners
The Nature Conservancy (TNC)
Provides strategic coordination for the RAFT Partnership as a whole Implements activities at the regional level and in China, Indonesia & PNG Supports policy and systems development governing land management & spatial planning Provides technical support to national timber legality verification systems in China and Indonesia Pioneering logging practices that reduce carbon emissions Helping roll out community-based natural resource management in PNG
RAFT Support:
Some financial support for selected buyer-supplier dialogues & international knowledge sharing events Mostly provides technical assistance to governments, forest managers, wood processors, & buyers of wood products through its implementing partners
www.responsibleasia.org
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Engages with various stakeholders, including governments, NGOs, private sector and local communities
Since its foundation in 1987, has trained over 25,000 people from more than 27 countries
3 Guiding Principles
Good governance
Fair benefits
Strategic communication
Forest Smallholders
More than 450 million people depend on forests in Asia and the Pacific, earning an income of 20%
ForInfo Project
Teak Collateral
Background: Teak harvested prematurely for immediate cash needs Lack of economic and silvicultural consideration
Issuing Teak Management Certificates: Tree valuation data, Farmer identity, Plot location Information for future planning: thinning plans and thinning products 84
ForInfo Project
Teak Collateral
Outcomes: Smallholders secure clearer tenure rights Longer rotation of teak cultivation, mature trees more valuable Used as collateral for microfinance loans Certification provides stand and financial valuation Improve negotiating power of smallholders
Securing user rights and creating access to microfinance for smallholder teak plantations
FSC, PEFC, REDD, FLEGT may exacerbate regulations for communities & smallholders
Different scale of regulatory barriers according to forest type and tenure arrangement
The number of regulations increase along the continuum from plantations to natural forests, while for income per hectare is the opposite (i.e. higher for plantations than for natural forests)
November 25, 2013 87
Promote social justice in SFM practices In part by reducing incidence and negative impact of natural resource conflict
Whats Next?
Beyond the forest: Broad landscape approach Link with agriculture and energy policies Improve capacity of small entrepreneurs Business planning & development skills Links to markets, finance, policy processes Ex: Rights and Resources Initiative (RRI) collaboration, Ongoing efforts to engage communities and improve role in forest sector RECOFTC brokering PPP processes: collaboration with private sector with increased understanding, mutual gain Ex: Stora Enso
Asia
Thank You
Martin Greijmans
martin.greijmans@recoftc.org
www.recoftc.org
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Adam Grant Manager, Certification and Environmental Markets PEFC Kuala Lumpur, Malaysia November 2013
Important Note
New Forests 2013. This publication is the property of New Forests. This material may not be reproduced or used in any form or medium without express written permission.
The information contained in this publication is of a general nature and is intended for discussion purposes only. The information does not constitute financial product advice or provides a recommendation to enter into any investment. This presentation has been prepared without taking account of any persons objectives, financial situation or needs. This is not an offer to buy or sell, nor a solicitation of an offer to buy or sell any security or other financial instrument. Past performance is not a guide to future performance. Past performance is not a reliable indicator of future performance. You should consider obtaining independent professional advice before making any financial decisions. The terms set forth herein are based on information obtained from sources that New Forests believes to be reliable, but New Forests makes no representations as to, and accepts no responsibility or liability for, the accuracy, reliability or completeness of the information. Except insofar as liability under any statute cannot be excluded, New Forests, including all companies within the New Forests group, and all directors, employees and consultants, do not accept any liability for any loss or damage (whether direct, indirect, consequential or otherwise) arising from the use of this presentation.
The information contained in this publication may include financial and business projections that are based on a large number of assumptions, any of which could prove to be significantly incorrect. New Forests notes that all projections, valuations, and statistical analyses are subjective illustrations based on one or more among many alternative methodologies that may produce different results. Projections, valuations, and statistical analyses included herein should not be viewed as facts, predictions or the only possible outcome. Before considering any investment, potential investors should conduct such enquiries and investigations as the investor deems necessary and consult with its own legal, accounting and tax advisors in order to make an independent determination of the suitability, risk and merits of any investment. New Forests Advisory Pty Limited (ACN 114 545 274) is the holder of AFSL No 301556. New Forests Asset Management Pty Limited (ACN 114 545 283) is registered with the Australian Securities and Investments Commission and is an Authorised Representative of New Forests Advisory Pty Limited (ACN 114 545 274, AFSL 301556). New Forests Inc. has filed as an exempt reporting adviser with the Securities and Exchange Commission.
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Sydney
Australia New Zealand Forest Fund Australia New Zealand Forest Fund 2
Singapore
Tropical Asia Forest Fund
Back Office, Administration, Risk and Compliance Systems and Governance Financial and Forest Resource Modeling Services Sustainability and Responsible Investment Investor Services
Slide 99
Originated from logging concessions in natural forests Low cost of timber from these concessions meant attractive returns were possible without operating efficiently or sustainably
Natural forest timber has been largely depleted
Global concern over rainforest logging and a demand for certification and sustainable forest management models are on the rise Fast-growing, high-quality managed timber plantation estates are emerging as the basis for the future of the industry, which will require significant capital Invest in existing forestry enterprises or assets Upgrade and expand those businesses
Help Implement modern forestry systems and practices
TAFF will:
Obtain certification and where possible, access environmental markets Exit after 10-15 years of investment
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30
25
20
15
20 15
10
10
5 0
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Slide 102
Sources: Malaysia Timber Council and personal communication with Yayasan Sabah; ITTO; Indonesian Forestry Department Annual Report, 2008.
Both China and Vietnam currently import plantation hardwoods from South America, North America, Europe and Africa primarily to fulfill demand for certified timber. There are significant cost advantages to regional sourcing.
Source: New Forests Asia estimates based upon RISI 2011 Pulp and Chip wood Conference, ITTO 2005 Sus tainable Forestry Ma nagement Report, a nd government data s ets. Data does not include rubber estates and i s based on priva te/government commercial scale plantations not small holders (except for Thailand where s ma ll scale priva te growers are fundamental to the industry)
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The SEMS defines third-party certification and responsible management requirements relevant to the asset class and type of investment Sustainability reporting is integrated into funds reporting structure and New Forests publishes an annual Sustainability Report covering responsible investment activities, targets, and progress
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Sustainability Reporting
Reduced greenhouse gas emissions and other forms of pollution Maintenance or enhancement of high conservation value forests and biodiversity Improvements in local livelihoods and safe working conditions Recognition of indigenous rights Price premiums and better market access for certain products Lower project and political risk through reduced social conflicts Improved asset liquidity and lower risk-adjusted discount rates on exit Lower cost of debt capital and better debt access, especially from development banks Improved access to licences, operating permits or additional assets from host countries Reputational risk reduction for fund investors Opportunities for increasing operating efficiencies through better management Opportunities for environmental market products from areas set aside from production
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Brazil US South
Australia
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Innovating Markets
New Forests established Malua BioBank in 2008 with seed investment from The Eco Products Fund. The project creates an alternative economic value for Borneos rainforests and offers sustainability solutions for oil palm supply chain.
Slide 109
SO2 market drove changes in fuel from high to low sulphur coal EU Emissions Trading Scheme (ETS) drove $ billions into carbon funds and carbon companies Australian water market restructured agriculture to increased efficiency and more valuable cropping US Mitigation Banking is a $billion+ turnover industry Investment funds sprang up related to the EU ETS, Australian Water market, and Mitigation banking industrycreates liquidity to meet market needs Markets create transparency in pricing; futures and options create stability; water rights as collateral for investment in water use efficiency Meddling by Government killed the SO2 markets Excessive allocations and unexpectedly huge offset supply have made the EU ETS unstable Lack of price premium has hampered most voluntary certification schemes REDD has struggled to have impact because private sector is disengaged and continues to operate on a business as usual basis
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World timber demand will continue to rise, markets will evolve to encompass Asian demand growth Supply increases will primarily come from timber plantations, rather than further expansion of the economic margin in primary forests Increases in plantation area are more difficult to achieve than increases in productivity of existing plantation baseland competition will also rise among food, energy, and fibre crops Institutional portfolios have gone from 5% real assets in 2000 to 15% real assets today, and likely will reach 25-30% by 2025huge inflow of capital for real estate, infrastructure, agriculture, forestry, etc. Need fopr a financing source for conservation as well as production this could include REDD+, biobanking, water rights, no net loss supply chains, etc. Social and community integration via benefit sharing, consultation, and governance models, and respect for traditional and legal rights will be core to sustainable outcomes
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www.newforests.com.au
Appendices
July 2005 Company established in Sydney and receives Australian Financial Service Licence
May 2007 Establishes US office
August 2008 Establishes SE Asian office October 2009 Begins Funds Management Business August 2010 Closes the AU$490 million Australia New Zealand Forest Fund January 2011 Closes AU$415 million acquisition of 270,000 hectares of Australian forest land from the Receivers of Great Southern Plantations 2011-2012 Acquires major softwood plantations and softwood sawmills in Australia June 2013 Final close of the New Forests Tropical Asia Forest Fund, now with commitments of US$171 million, and first close of the New Forests Australia New Zealand Forest Fund 2 with AU$570 in commitments June 2013 Makes first Asian investment, acquiring Hijauan Benkoka plantations in Sabah
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50
40
Russian log exports have fallen dramatically over the past six years while lumber exports have been flat to slightly increasing.
30
20
10
0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Slide 116
Source: FAOstat
60 50
40 30
20 10
0
British Columbia
Alberta
Ontario
Quebec
Slide 117
Source: Mark Kennedy, CIBC. Global Perspectives on Forest Products Trade. Presentation to Future Forestry Finance 2012.
Slide 118
Sources: Malaysia Timber Council and personal communication with Yayasan Sabah. / Indonesian Forestry Department Annual Report, 2008.
Native
10 000
8 000
Plantation
'000 m3
6 000
4 000
2 000 0
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600 25
400
20 200
Base Genetics
Management TRV
Nutrition
If industrial wood demand grows at an equivalent rate to global GDP can we meet much of this via productivity enhancement rather than land base expansion Investor strategies focus on silviculture, nutrition, risk management and genetics to increase productivity by 50-100% over the next 50 years
Slide 121
Future wood supply growth will largely be delivered by plantationsthis will be from existing plantations managed more intensively and expansion of plantation areaexpansion is a key policy challenge As timber plantations take on increasing share of wood supply, innovation is needed in financial mechanisms for forest conservationREDD, biobanks, supply chain initiatives Social outcomes need to balance multiple stakeholders and conflicting interests and rights. Innovations around consultation/governance models, sharing in economic benefits, community benefits are needed
Slide 122
Price premiums and better market access for certain products Lower project and political risk through reduced social conflicts Improved asset liquidity and lower risk-adjusted discount rates on exit Lower cost of debt capital and better debt access, especially from development banks Improved access to licences, operating permits, or additional assets from host countries Reputational risk reduction for fund investors Opportunities for increasing operating efficiencies through better management Opportunities for environmental market products from areas set aside from production Achieve compliance against IFC Performance Standards within three years of acquisition on all assets including plantations, natural forests, and processing facilities Achieve FSC certification on all natural forests within three years of acquisition if the asset meets all FSC eligibility criteria Where plantation assets do not meet all FSC eligibility criteria, engage an FSC-accredited certification body to undertake third-party verification of compliance with all applicable FSC requirements and, depending on market requirements, pursue additional third-party certification against an alternative certification system depending on market demands such as PEFC, LEI, FSC controlled wood, VLO, and/or VLC or other future standard that may be developed
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External Motivations
New Forests designed its Social and Environmental Management System (SEMS) in 2010 and began full implementation in 2011. The SEMS is designed to systematically identify, manage, and report on social and environmental issues and potential impacts.
English pension fund manager said, Youre the only manager weve seen who can show how they manage assets sustainably. Dutch pension fund manager said, FSC certification is absolutely required for us as a target and your SEMS shows us how you pursue that. Provides a reference point and tool for due diligence Current clients ask to see audit reports Streamlines responses to client inquiries
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