New deal with EU challenges Vietnamese woodwork producers

09:25 | 18/07/2018 Industry

(VEN) - Vietnam and the European Union (EU) have signed an agreement on removing illegal timber from supply chains. The Forest Law Enforcement, Governance and Trade (FLEGT) Voluntary Partnership Agreement (VPA) will present wood product makers in craft villages throughout Vietnam with major challenges.

new deal with eu challenges vietnamese woodwork producers

Many woodwork producers in craft villages use raw materials of doubtful legality

Under the VPA, Vietnam develops Timber Legality Assurance Systems (TLAS) to verify that its timber exports are legal, and the EU agrees to accept only licensed imports from Vietnam once the FLEGT licensing system is in place.

According to a survey by the Vietnam Timber and Forest Product Association (VIFORES) and Forest Trend, almost all timber used in five major woodwork production villages in Vietnam – La Xuyen, Van Diem, Dong Ky, Lien Ha and Huu Bang – are imported and their legality is questionable. Only a few production households in Lien Ha and Huu Bang villages use environmentally friendly timber materials including those imported from the US and EU, and timber planted in Vietnam.

A VIFORES representative said craft village producers’ poor knowledge of and interest in timber legality is one of the biggest problems for implementing the VPA. Most transactions between raw timber sellers and woodwork producers are oral ones with almost no proof of origin and legality.

The survey shows that about 90 percent of transactions between woodwork producers and suppliers of raw material lack proof of timber legality; 27 percent of traded wood products have documentation proving some aspects of product legality, of which 26 percent are sales invoices and only one percent is forest ranger certification. Also according to the survey, 74.5 percent of woodwork production households do not have a business registration certificate, 64 percent of the households use their families’ living area for production, and all of their employees have been hired through oral contracts. Not only timber legality but also environmental hygiene and worker safety will become big problems when VPA takes effect.

Experts say legalization of production and trading activities is the best way for craft village businesses to improve working conditions and meet VPA regulations.

Craft village producers should be assisted to access information and law-related consultancy to implement business registration and enjoy tax incentives. Unofficial small to medium-sized enterprises should no longer be licensed and legal businesses should be prioritized in registration.

The EU is the third largest importer of Vietnamese timber and wood products, importing about US$800 million worth

of these products from Vietnam each year.

Hai Linh