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

Motion to Approve

Moved by

That the draft Regulations laid before the House on 5 October be approved.

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.

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—

The House is having some difficulty hearing the noble Lord. Can you be a little closer to your microphone?

Yes. Can you hear me now? Is this better?

Please continue.

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.

I will call the next speaker, the noble Baroness, Lady Parminter.

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.

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?

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.