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Sustainable supply chain management in Thai leather and food industry
EU will announce a regulation to bar agricultural products that are illegal and produced on deforested land from the EU market. It sets to regulate timber, cocoa, coffee, soy, cattle, palm oil, and rubber and will be applied to products in the EU and imported. Operators will need to conduct due diligence before placing any of these products on the EU market. /*! elementor - v3.6.2 - 04-04-2022 */ .elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#818a91;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#818a91;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block} As an agricultural country, Thailand is alerted by this new EU regulation. Recently, on 14 Dec., Prime Minister Prayut Chan-o-cha urged all relevant agencies to follow up on any development closely. In this article, TEFSO talked with representatives from the leather and the food industry to discuss their views on EU regulation and their sustainable supply chain management. With high export volume to the EU, leather industry is familiar with sustainable supply chain management and is not concerned about the new EU regulation There are three main groups of leather export; leather for shoes, automotive and furniture. ‘My company supplies leather to major brands like Nike and Adidas; other members of our group supply to the automotive industry like Mercedes, Toyota and Honda.’ – representative of Leather Industrial Group, Federation of Thai Industries said. Export of cocoa, coffee and corn to the EU are low to non-existent, but the group has some concerns in case the EU expands the product scope ‘For now, deforestation-free regulation might not impact much because Thailand has never exported beef or pork to the EU. There’s some export of coffee but in a minimal quantity. So does cocoa which is not Thailand’s agricultural produce though there has been some initiative to promote it. We still have some concerns in case the EU expands the product scope in the future.’ – representative of Food Industrial Group, Federation of Thai Industries said. Sustainable supply chain management is nothing new for the leather or food industry The Leather Industrial Group and the Food Industrial Group confirmed their familiarity with sustainable supply chain control. Overall, the leather industry is ready for EU regulation because, for a long time, they have had a certification system to comply with major brands from the US and EU. ‘In 2017, our customers; Nike, Timberland and Adidas launched a Global Policy to take only traceable leather certified by recognized third party auditors. These major brands only allow tanneries to use leather from certified farms. There’s a certification system like the Leather Working Group. As an estimation, I’d say 30% of leather producers in Thailand are certified.’ ‘In food industry, there’s Good Agricultural Practices (GAP) managed by the Ministry of Agriculture and Cooperatives. GAP verifies legal and sustainable agricultural production. For most products, GAP is voluntary; only five are required.’ Concern over small-scale operators who do not have capacity to get certified ‘In food supply chain, there’re still many uncertified small-scale farmers. Without certification, they might have difficulties proving that their production is sustainable. Big companies like CPF and Betagro have stepped in to help farmers in their networks to get certified, but there’s still a lack of government support.’ ‘GAP has existed for more than ten years. If then the government had supported farmers to get certified, farmers would be readied for the EU regulation by now and would not have to wait for help from big companies.’
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Progress of THA-TLAS and field study on import control at Laem Chabang Port
A strong collaboration of the government, private sector and civil societies in the FLEGT VPA process has resulted in the completed concept and plan for the Thai Timber Legality…
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Video: Reflections on the VPA and way forward
The FLEGT VPA has been ongoing for nine years. It has improved the Thai timber sector in various aspects, especially by establishing an efficient supply chain control and certification system, which will strengthen the position of Thai timber products on the international market. It has established and maintained a robust multi-stakeholder participatory process, enabling the government, private sector and civil societies to collaborate on regulatory reform and strengthen good governance in the Thai timber sector. Moving forward, TEFSO launched a survey from Oct – Dec 2022 to gather stakeholders’ opinions, which would lay a foundation for the next phase plan. Building on the survey results, we also sought interviews with the Royal Forest Department, Fast-Growing Tree Association and RECOFTC to get their insightful opinions. See the video for the summary of the survey results, views and recommendations from our stakeholders.
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COP27: EU launches Forest Partnerships with five partner countries
Today, European Commission President Ursula von der Leyen, on behalf of the EU, signed five Memoranda of Understanding for a Forest Partnership with Guyana, Mongolia, the Republic of Congo, Uganda and Zambia in the presence of President of Guyana Mohamed Irfaan Ali, President of Mongolia Ukhnaagiin Khürelsükh, President of Zambia Hakainde Hichilema and representatives of President of the Republic of Congo, Denis-Christel Sassou Nguesso, and President of Uganda Yoweri Museveni. They were signed during the COP27 UN Climate Change Conference as a contribution to the external dimension of the EU Green Deal.Forest Partnerships encompass the EU’s holistic cooperation framework for joint work on forests, aimed at reversing deforestation in supported countries and consequently enhance climate and biodiversity protection. Forests act as carbon sinks, and are essential for both climate adaptation and mitigation.European Commission President, Ursula von der Leyen, said: “Forests are essential in so many respects: fighting against climate change, protecting biodiversity, providing means of subsistence to millions across the globe. Indeed, forests are home to 80% of terrestrial species of plants, animals and micro-organisms, while 1.6 billion people rely on forest resources for their livelihoods, food and fuel. With so much at stake, it is essential to take impactful actions and reverse deforestation. So we need Forest Partnerships with as many partners as possible to maintain healthy forests for a more sustainable future. Through these Partnerships, we will support our partners in sustainably managing and preserving forests, one of the world’s richest natural resource to combat climate change and conserve biodiversity as well as to promote sustainable development.”Memoranda of Understanding for Forest PartnershipsThrough the Forest Partnerships, the partners reaffirm their long-term political commitment and intention to cooperate closely to:Ensure sustainable forest management by improving forest governance and enhancing the business environment;Generate an economic transformation by stimulating the forest bio-economy, which would lead to job creation and socio-economic development through sustainable forest-related value chains and market access;Reduce deforestation and forest degradation;Look for ways to facilitate production of and trade in legal and sustainable forest products.Forest Partnerships are tailor-made, demand-driven and aligned with the specific situations, needs and objectives of each of the signatory countries.BackgroundForest Partnerships and the €1 billion European Union contribution to the Global Forests Finance Pledge were first announced at the UN Climate Change Conference COP26 in Glasgow. One year on, the signature of the 5 Forest Partnerships during COP27 is an opportunity to show translation of EU promises into concrete deliveries and to renew its commitment to protect, restore and sustainably manage forests.Furthermore, the EU has committed approximately 35% of its external action budget in 2021-2027 to climate objectives and 7.5% to biodiversity objectives.Source: COP27: EU launches Forest Partnerships with five partner countries (2022) European Commission – European Commission. European Commission. Available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6653 (Accessed: November 11, 2022).
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European Parliament votes for stricter policy against deforestation
The European Parliament wants to see a stricter approach to deforestation. A large majority voted in Strasbourg today for an increase in the number of products that will be covered by the new rules, which require companies to ensure that products do not come from deforested or degraded land. European consumption is responsible for 16% of global deforestation through imports. This makes the European Union the second largest destroyer of tropical forests after China, according to WWF. Against this background, the European Commission has proposed introducing a duty of care for companies. They must verify that products sold on the European market were not produced on deforested or degraded land.Products included in the proposalThe Commission’s proposal covered livestock, cocoa, coffee, palm oil, soya and wood, including products containing these commodities or used in the production process (e.g. leather, chocolate, furniture, etc.).MEPs want to add pork, sheep and goats, poultry, maize, rubber, charcoal and printed paper products to that list and expand the field of application to “other wooded lands”. That should also offer more protection for less densely wooded areas, explains Saskia Bricmont (Ecolo). However, the Greens regretted that this protection was not extended to all ecosystems.In addition, EU parliamentarians also demanded for additional obligations for banks to ensure that their activities do not contribute to deforestation. “We say: don’t just focus on the producers, but also on the capital, which makes this destruction of biodiversity possible. If we don’t do that, a large part of the cause remains untouched,” says Sara Matthieu (Groen).The position was adopted by a majority of 453 to 57 with 123 abstentions, but that does not mean that the forthcoming negotiations with Member States and the Commission will be easy. Member States have already established their position. They were then sharply criticised by environmental groups such as Greenpeace and WWF, who denounced that a large part of Europe’s forests would thus remain unprotected and the harmful forestry practices would continue.The Commission is also concerned about an extension of the field of application. “We need to make progress step by step, rather than overload the system and risk failure,” said Environment Commissioner Virginijus Sinkevicius. He is waiting for analyses to show that the other products are indeed those with which the EU contributes most to deforestation.The European Commissioner also underlined the burden on economic operators. Against this background, Christophe Hansen, the Luxembourg Christian Democrat who has to steer the file through parliament, argues for economic and technical support for smaller farmers.One of the advantages of the new regulation, adds Belgian MEP Tom Vandenkdelaere (CD&V), is that Europe will also eliminate all competitive disadvantages for those who already work with certificates, such as socially responsible soy cultivation.Marie Arena (PS) argues that the regulation should also protect the rights of indigenous peoples and environmentalists. She points out that more than 1,540 murders of these activists have been recorded in the past decade, mainly in the Amazon region and Indonesia. Source: (2022) European Parliament wants stricter policy against deforestation. The Brussels Times. Available at: https://www.brusselstimes.com/288890/european-parliament-votes-for-stricter-policy-against-deforestation (Accessed: October 28, 2022).
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EU and Côte d’Ivoire conclude negotiations on an agreement to combat illegal logging
On 19 October 2022, the European Union (EU) and the Republic of Côte d’Ivoire concluded negotiations for a Voluntary Partnership Agreement (VPA) on Forest Law Enforcement, Governance and Trade (FLEGT). The Agreement will help improve forest governance, fight against illegal logging and support Côte d’Ivoire’s efforts to improve the management of its natural resources. The conclusion of the negotiations celebrated on 19 October materialises with the initialling, an administrative procedure that confirms that both parties adhere to the content of the Agreement. The next step for Côte d’Ivoire and the EU will be to sign and then ratify the VPA, thus making its commitments legally binding.Initiated in 2013, the VPA negotiations have been very participatory, including representatives of civil society organisations, the private sector, Ivorian ministries and government agencies, and traditional chiefs.So far, these negotiations have helped Côte d’Ivoire to implement important legal and policy reforms in the forest sector. This includes recognising the property rights of farmers and landowners, and strengthening requirements for forest planning, management and traceability. The VPA also contributes to a better integration of women in forest resources management.With the signature in sight, the emphasis will shift to implementing the Agreement. The VPA will put in place a traceability system to ensure that all timber traded on the Ivorian domestic market, as well as international markets, is legal. This includes trade with the EU, but also regional timber trade.Besides forest governance and timber legality, the VPA will also contribute to better forest management, transparency and accountability in the sector. This will help in the fight against climate change and increase the Ivorian state’s revenue from a more competitive forestry industry.Source: EU and Côte d’Ivoire conclude negotiations on an agreement to combat illegal logging (2022) The VPA Africa – Latin America Facility . Available at: https://flegtvpafacility.org/eu-cote-divoire-conclude-negotiations-agreement-combat-illegal-logging/ (Accessed: October 28, 2022).
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Thai timber industry: readiness for the EU regulation on deforestation-free products
As the EU regulation on deforestation-free products is underway, how does the Thai timber industry view its impacts and challenges? Find out in this article as we sat down with representatives from the Thai Timber Association and the Sawmill Association. When mentioning products at risk of deforestation, timber is undoubtedly the first product that comes to mind. Thus, wood trading has always been under scrutiny and rigorous control. However, studies have now shown that timber is not the only industry at risk of contributing to deforestation, but also agricultural and cattle products. This paradigm shift led to the new EU regulation on deforestation-free products. The regulation will impose control on timber and agricultural commodities at risk of deforestation, mandating due diligence before selling in or exporting from the EU market. Once the EU announced its plan, parties worldwide came out to channel their opinions; some see it as too restricted, fearing burdens on operators, while others see it as too relaxing. In this article, we sat down with members of the Thai Timber Association and the Timber Processing Industry Group from the Federation of Thai Industries to talk readiness of the Thai timber industry for the regulation on deforestation-free products and possible impacts on other commodities.Operators are confident of the industry’s readiness It is believed that the timber industry is more well-equipped than other sectors because forest management, legality, and supply chain control have always been the standard practices of the timber sector. Moreover, the industry is used to controls and regulations by the European Timber Regulation from the EU and other countries.Mr. Prasert Iamdeengamlert, Sawmill Association: ‘As a timber operator, I do not see that the new regulation is much different from the European Timber Regulation since both are based on Due Diligence, which the timber industry is familiar with.’Mr. Ekasit Aneksittisin, Thai Timber Association: ‘I am not too worried, but of course, more documents need to be processed.’Most importantly, Thailand should prepare for a valid land deed system, a vital document to prove deforestation-free Since the regulation stresses that products must be able to confirm their deforestation-free origin, operators see that Thailand should prepare a valid land deed system to prove that commodities are produced on deforestation-free land; the document should be able to demonstrate the date of allocation to show compliance with the EU cut-off date.Divergence of legal definitions of “forest” and “forest degradation” between the EU and producing countries is a cause of concern, also the challenge in proving deforestation-freeMr. Iamdeengamlert: ‘Different interpretation of the term “forest” which depends on the countries’ contexts poses a challenge; also, to verify deforestation or not, I expect further discussions on these.’Concerns looming over other products outside the timber industry that may not be familiar with Due DiligenceFor a long time, timber products have always been strictly regulated. Thus, timber operators are aware of what to do. But concerns are shared over other commodities as this might be the first time they will be subjected to tighter control. Above all, attention is given to smallholders in those products and their capacity to control the supply chain. It is seen that some commodities in Thailand are produced on lands at risk of deforestation.Mr. Krairawee: ‘Deforestation-free products will affect important Thai exports. I believe that some of them are still produced on land at risk of deforestation. Moreover, many of them are smallholders.’ Thai government should take a lead role, and the timber industry is ready to supportAll agreed that the government should take a lead role; all relevant agencies should get involved and promote it with stakeholders.
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Thailand plans for an e-timber license, pilot test on its way
22 Sep. 2022 - At the 6th FLEGT VPA Ad-Hoc Working Group Meeting, the Royal Forest Department presented the current development of the e-timber license. The electronic system will streamline licensing by allowing operators to request and obtain licenses online. Pilot testing will take place in November before launching. The electronic system could later be used to operate the Thai Timber Legality Assurance System (THA-TLAS). The Royal Forest Department has started discussions with other government agencies on the possibility of data sharing to allow access to relevant data for checking legal compliances.The current regulatory development was informed at the meeting. A new draft regulation on timber imports and exports has passed the public hearing and will enter into force after the cabinet’s approval. The new draft will strengthen the traceability of Thailand’s supply chain by requiring that only certified timber and timber products will be allowed to export from or import to Thailand.To facilitate legal timber trade, the Royal Forest Department will start deliberating laws that obstructed businesses. The legal review committee has been convened and is expected to conclude in the next two years. #gallery-1 { margin: auto; } #gallery-1 .gallery-item { float: left; margin-top: 10px; text-align: center; width: 33%; } #gallery-1 img { border: 2px solid #cfcfcf; } #gallery-1 .gallery-caption { margin-left: 0; } /* see gallery_shortcode() in wp-includes/media.php */
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News from DW: EU and Thailand cap turbulent decade with a partnership agreement
The deal serves the EU's ambitions to increase its influence in Southeast Asia, as Thailand seeks out diverse trade links. The deal was delayed by almost a decade in the wake of a military coup. The EU has finally sealed a Partnership and Cooperation Agreement (PCA) with Thailand, its sixth with a Southeast Asian country, as both sides seek to repair relations that frayed following a military coup in Bangkok eight years ago. It may provide the needed momentum to relaunch talks over a full free trade agreement. The PCA, which is still awaiting a formal signing, improves bilateral ties on a range of issues, from human rights to counterterrorism. Brussels sees it as yet another step in its path to boosting relations with countries in Southeast Asia, an increasingly important region economically and geopolitically for the bloc. Negotiations for an EU-Thailand Free Trade Agreement (ETFTA) were launched in March 2013 but put on hold following a military coup in Bangkok in May 2014, after which bilateral relations remained frosty for several years. The coup also put the brakes on the initial PCA deal — more limited than a full free trade agreement — which had been agreed in 2013. Partnership agreement returns to the tableThe European Council, the EU’s main decision-making body, gave the green light in late 2019 to restart formal talks again following a long-delayed general election in Thailand, which was won by the same military leaders who took power during the coup. The first round of preparatory talks for the revised PCA began in July of last year. It was concluded after a seventh meeting this June. The two sides also renewed talks regarding the possible ETFTA.“The PCA will enhance the political dialogue on issues of global concern and will give more scope for mutually-beneficial cooperation in a wide number of policy areas,” the European External Action Service (EEAS), responsible for the EU’s foreign and defense policies, said in a statement. “It will be a roadmap, which will positively frame EU-Thai relations in the years to come,” it added.Paola Pampaloni, the deputy managing director of the EEAS, and Chulamanee Chartsuwan, deputy permanent secretary to Thailand’s Foreign Ministry, closed the negotiating process for the PCA deal on Friday. Pending institutional procedures from the EU and Thailand, it will be formally signed at a later date, David Daly, EU ambassador to Thailand, told DW.Mutually beneficial dealThe PCA is an “important vehicle to strengthen the dialogue in the economic and trade domain,” said Guillaume Rebiere, executive director of the European Association for Business and Commerce in Thailand.Bilateral trade in goods between the EU and Thailand rose to €35.4 billion ($35.16 billion) in 2021, up from €29.3 billion the previous year, according to EU data. The EU is the second-largest investor in Thailand, after Japan. “Thailand is an important trade and political partner and, therefore, this agreement is also important in strengthening the role of the EU within Southeast Asia,” Rebiere added. “Both businesses and investors will be encouraged by the signing of this agreement.”The deal makes sense for both sides, noted Trinh Nguyen, a senior economist covering Emerging Asia at Natixis, an investment management firm. “It would signal a boost to relations from both sides as they both are more willing and eager to work with one another to diversify sources of growth and investment,” she added.Partners in diversificationFor Thailand, long reliant on its vast tourism industry, the decline of Chinese visitors since the pandemic has forced it to rethink its dependence on Beijing and find other sources of growth. Bangkok is also conscious of the need to seek out trade links away from the US and China, two of its main partners. “Expanding access to trade and investment with the EU, the largest economic bloc in the world, is part of that strategy,” said Nguyen.The EU is also “warming up” to Thailand as it seeks to diversify from China as geopolitical risks rise and as Brussels increasingly views Beijing as a competitor, she added.“The willingness to negotiate with Thailand through the signing of the Framework Agreement is part of that growing closer in relations not just to Thailand but also to the rest of Southeast Asia and India,” Nguyen said.In December, the European Union and the Association of Southeast Asian Nations (ASEAN) will hold a summit of national leaders for the first time in Brussels, a milestone in bloc-to-bloc relations that celebrate their 45th anniversary this year. A free trade agreement next?The PCA’s conclusion may also indicate that both sides are inching closer toward a free trade agreement (FTA), which would be the third the EU has struck with a Southeast Asian country after landmark deals with Singapore and Vietnam. “There is no immediate link between the PCA and the FTA process,” stressed Daly, the EU ambassador to Bangkok. But judging by how the EU has negotiated FTAs with other Asian countries, the timeline would suggest that a trade deal with Thailand would follow a PCA, said Nguyen. Vietnam, for instance, signed a similar PCA with the EU in 2015, four years before their landmark FTA was approved. “We’ve still got other hurdles to cross but certainly [an FTA] is closer,” she added.Bryan Tse, lead analyst for Thailand at the Economist Intelligence, reckons the FTA would be signed between 2024 and 2026 unless politics “gets in the way.”Bangkok is currently on edge after the country’s Constitutional Court ruled last week that Prayuth Chan-ocha, the prime minister, must temporarily step down as it considers whether he has exceeded an eight-year term limit in office that his own government introduced. Prayuth was the military chief who took power after the 2014 coup. “The EU and Thailand are not particularly close economically, compared to China, US or other ASEAN members, so this is more of a diversification tactic for both parties and a reflection of the growing importance of Southeast Asia in terms of global trade for other countries,” said Tse.Edited by: Alex BerryNews published on Deutsche Welle, authored by David Hutt, Thai translation by TEFSOSource: Hutt, D., 2022. EU and Thailand cap turbulent decade with a partnership agreement. Deutsche Welle, [online] Available at: <https://www.dw.com/en/eu-and-thailand-cap-turbulent-decade-with-a-partnership-agreement/a-63019958> [Accessed 8 September 2022].
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Govt. agencies discussed impacts of the EU regulation on deforestation-free on Thai agriculture and timber exports
3 Aug. 2022 – Thai government agencies – forest, agriculture, and international partnership, held the first preliminary discussion to prepare Thailand’s export for the EU regulation on deforestation-free products….
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Strong law enforcement drives responsible timber businesses in Ghana