Opportunity knocks for wood firms

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From March 2013, to enter the EU, made-in-Vietnam wood products will have to be awarded with the Forest Law Enforcement, Governance and Trade (FLEGT) certificate, according to a FLEGT voluntary partnership agreement (VPA) whose negotiations were just initiated by Vietnam and the EU.

The FLEGT certificate aims to keep illegally logged timber products from entering the EU market.

According to the Ministry of Agriculture and Rural Development (MARD), the FLEGT would be beneficial to Vietnamese enterprises since current VPA negotiations between Vietnam and EU were rooted on Vietnam’s legal system.

Once the agreement was ratified and businesses awarded the FLEGT certificate Vietnam’s export of wooden products to the EU would enjoy much more preferences, according to the MARD.

Jiuliana Torta, representing the European Commission’s General Department of Environment, said joining FLEGT would help Vietnamese firms promote export to the EU with more favourable pricing terms and would not require firms to satisfy any additional requirements from EU member countries about the legality of wood products.

“We have adapted to the US’s Lacey Act and export of wooden products to US market rose constantly. This indicates local firms’ quick adaptability to market changes,” said Vietnam Administration of Forestry deputy head Ha Cong Tuan.

Tuan also said firms currently exporting wooden products to demanding markets such as the EU, the US, Japan or Australia were mostly up to scratch to gain the FLEGT certificate.

Vietnam Wood and Forest Products Association chairman Nguyen Ton Quyen said FLEGT imposition would mostly bring opportunities to Vietnam as local wood product exporters had to satisfy diverse requirements from different countries.

From the business community, director Nguyen Van Thu at export wooden furniture maker Pisico in southern Binh Dinh province’s Quy Nhon city worried the FLEGT would scale up business costs.

“Our export products to the EU or North America are all awarded the Forest Stewardship Council (FSC) certificate which costs us $8,000 in addition to maintenance fees of $3,000-3,500 per year,” said Thu.

In this respect, Vietnam Administration of Forestry deputy head Ha Cong Tuan said the FLEGT would not require additional costs from enterprises unlike other certificates such as FSC or certificate of conformance, where firms must resort to international organisations for survey and licencing.

The EU has inked VPAs with three African countries of Congo, Ghana and Cameroon and is holding negotiations with several others including Vietnam on the agreement.