Final report Small research and development activity project Australia–Laos Timber Chain of Custody Capacity Building Project


Project outcomes 8.1.Capacity building



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8.Project outcomes

8.1.Capacity building


The project participants achieved a broad appreciation of the importance of a strong governance and compliance system that demonstrates legality and improves market access. Such systems require clear and consistent standards across all land tenures that incorporate commitment to sustainability and continuous improvement, and that protect cultural and natural values.

The participants have summarised their experience into key lessons and have developed recommendations which have been presented to their respective agencies. The Directors General of both DOF and DOFI acknowledged the benefits of the exchange.


8.2.Key lessons


  1. Benefits arise in establishing standard approaches to compliance by having clearly defined investigation and enforcement, and monitoring and assessment protocols which are applied consistently, transparently and efficiently. Such systems also detail responsibilities of individuals and corporations, and promote a culture of continuous improvement. They also provide a high level of confidence within markets that resources are sourced sustainably and legally.

  2. The importance of having clearly defined roles and responsibilities across supply chains defined under legislation, and a Code of Forest Practices which is enforced through an independent (from the forest manager) regulator that undertakes monitoring and assessments, as well as compliance activities against which planning objectives, operational outcomes and compliance are assessed. The Code of Forest Practices is also important for establishing standards for the protection, conservation and enhancement of cultural and natural assets, including biodiversity, soils and water, rehabilitating riparian zones and establishing buffers to protect natural values. Such systems should also detail responsibilities of individuals and corporations, and in doing so promote a culture of continuous improvement.

  3. Codes of Forest Practices are important for forest management in that they provide a minimum and consistent standard against which planning objectives, operational outcomes, and compliance and monitoring are assessed. Industrial plantation developments, and the conversion of forest land to alternative land uses, should have minimum standards applied (as defined under a Code of Forest Practices that applies equally across land tenures) to ensure the protection, conservation and enhancement of cultural and natural values. This activity is effective where pre- and post-operational assessments are undertaken.

  4. The role and value of certification and Chain of Custody systems was clarified across supply and value chains and how such systems can improve forest management systems where Codes of Forest Practices do not exist. These systems were also demonstrated to be effective within markets as a mechanism which demonstrated a commitment to sustainability and that Chain of Custody systems from forest to end-consumer can provide financial returns across supply chains. Importantly, such systems do not necessarily have to be complex but they do require consistency, transparency and accountability.

  5. While FSC is currently the only certification system in Lao, it was demonstrated that there are credible and simpler alternative certification systems which are comparable to FSC, and that different FSC audit firms apply different criteria.

  6. Recognition of the importance of small integrated and high value-focused forest owners as contributors to the supply chain and providers of economic benefits to individuals. However, issues such as group certification, coordinated marketing, resource quality and compliance costs must be addressed to remove unfair or disproportionate cost burdens. Small holders should also be required to meet minimum management standards, which in turn adds value and credibility.

  7. The benefit of consistent and comprehensive operational and management data files for individual forest management agreements that provide ready access to information that would provide efficiencies within DOF and for compliance by DOFI. They also support monitoring for certification and Chain of Custody systems.

  8. Detailed, consistent and easily understood mapping systems can support decision making for planning, assessment and operations.

  9. Private wildlife protection and conservation parks and organisations can support government efforts when undertaken in a cooperative manner that avoids duplication and incorporates agreed priorities.


9.Conclusions and recommendations

9.1.Conclusions


Identified strategies and actions have been refined to reflect commitments agreed to by the Directors General of DOFI and DOF, and able to be implemented within current budgetary constraints, and those requiring additional resources to achieve.

The agreed actions represent significant progress as they reflect a change in approaches within the two agencies and reflect a broadening view of their roles and responsibilities for forest management. If fully implemented, there are broad benefits that are likely to arise. For example



  • Improved transparency and certainty for private and public forest managers, investors and markets through the development of clear and transparent processes, including codes and standards

  • Improved environmental and social outcomes by engaging with private forest managers to ensure appropriate and consistent standards are enforced

  • Greater role for private forest managers in supply chains, and transparency in price structures as certification and Chain of Custody systems are implemented

  • Improved knowledge of forest resources, their management, and legality.

9.2.Recommendations

9.2.1DOFI: Improvements to current systems (self-funded)


  1. Examine the options for preparing the development and eventual implementation of a national Code of Forest Practices which applies across all land tenures.

  2. Engage with DOF to establish protocols for assessment of forest management plans to ensure compliance with legislative requirements, including that suitable assessments have been undertaken to protect cultural and natural values, and as a basis for post-operational assessments.

  3. Extend DOFI’s role as an independent monitoring and assessment organisation in consultation with DOF and the Department of Industry and Commerce (DIC). This role should include compliance activities across all forests that cover national natural, industrial plantation, village and private forests, as well as standards for protecting natural and cultural values where conversion activities are undertaken. This approach will develop clear roles and responsibilities across supply chains and agencies. To be effective, DOFI will need clear authority and a right of access to inspect converted forest associated with private concession. Training and promotion of such a system would be required once developed.

  4. Engage with private plantation development owners and those who undertake conversion activities, both small and industrial scale, to ensure the legislative requirements for the protection of cultural and natural values and rights are understood and met.

  5. Establish closer partnership arrangements with private wildlife and aquatic conservation agencies and organisations (such as Save the Bear) to identify cooperative activities to address illegal trade in wildlife and aquatic species, as well as methods and approaches to enhance the conservation and protection of such assets.


9.2.2DOF: Improvements within current systems (self-funded)


  1. Examine whether auditing efficiencies and cost savings can be achieved by engaging different FSC auditing organisations.

  2. Trial development of consistent and comprehensive operational and management data files for individual forest management agreements. Undertake this within certified forest areas. Develop the trial in cooperation with DOF, DOFI and DIC.

  3. Review existing mapping capacity across GoL agencies with a view to identifying whether existing systems can support decision making for planning, assessment and operations. Engage with the recently established Forest Resource Information Centre within the Ministry of Planning and Investment to investigate the use of satellite imaging to develop nationwide forest management and operational maps at a scale that is useful and easily understood.

  4. Engage with small integrated and high value-focused forest owners to

    1. examine the feasibility of extending DOF group certification and Chain of Custody through the development of joint management plans

    2. assist in identifying impediments to markets and the development of coordinated marketing opportunities

    3. develop a standard for resource quality assessment to promote a focus on adding value, and reducing compliance costs.

DOF to discuss with DOFI and DIC.

9.2.3Future initiatives which require external funding


Proof of legality is increasingly determining market access within mature economies. Initiatives such as the United States 2008 amendments to the Lacey Act 1900, the European Union’s Forestry Law Enforcement, Governance and Trade Action Plan and Australia’s illegal logging policy are examples of such approaches. The current policies and approaches of both DOF and DOFI could be enhanced through the development and adoption of improved approaches that demonstrate legality and incorporates an independent monitoring and assessment system across production forest management areas.

The following initiatives are outside the current funding capacity within the GoL and would require additional, external funding to progress to implementation.



  1. Develop systems which improve the approaches that demonstrate legality and a commitment to sustainable forest management or, where conversion occurs, a high level of protection, conservation and enhancement of cultural and natural values. Such systems should incorporate:

  1. an independent (of the forest operational manager) regulator

  2. monitoring and assessment protocols against which DOFI can assess the implementation and effectiveness of representative samples of forest management and operational activities

  3. investigation and compliance protocols which detail the policy and procedures employed when conducting investigations of alleged breaches of legislative requirements and departmental/concessional approvals, responsibilities and obligations, and provide guidelines for enforcement.

Responsibility: DOFI and DOF, in consultation with relevant GoL agencies,

  1. Develop a Code of Forest Practices for natural and plantation forests that covers national, industrial, village and private forests, as well as standards for protecting natural and cultural values where conversion activities are undertaken. Training and promotion of such a Code would be required once developed.

Responsibility: DOF in consultation with industrial plantation developers and other GoL agencies

  1. Develop Chain of Custody/legality arrangements with retail/tourist outlets. This should initially focus in Laung Prabang and Vientiane as these are focal areas for tourism. The system should be focused ion low compliance costs, and promote legality.

Responsibility: DOF, DOFI, DIC and the Lao National Tourism Administration (a Ministry which forms part of the Prime Minister’s Office).

10.References

10.1.References cited in report


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Chairman of the National Assembly (2004). Law on the Promotion of Foreign Investment. No. 11/NA. National Assembly of Lao PDR: Vientiane, Lao.

Chatterjee S. 2007. Economic growth and social trends in Asia and their implications for Asia’s forests. Asia-Pacific Forestry Commission: The Future of Forests. FAO Regional Office for Asia and the Pacific: Chiang Mai, Thailand.

CIA (2010). The World Factbook. At , accessed 27 September 2010.

Cleetus R. 2005. Lao PDR: Using Strategic Environmental Vulnerabilities Assessment (Seva) for Evaluating Threats to Forests. WWF Macroeconomics Program Office: Vientiane.

Confidential (2011). Unpublished reports provided by agencies and organisations, or personal comments provided in-confidence to Aidan Flanagan. Vientiane.

DOFI 2010. Forest law enforcement and governance in Lao PDR. FLEG Lao Final report #3, Department of Forest Inspection: Vientiane.

EU_ECP 2006. EC external cooperation programs: FLEGT-Asia. At accessed 27 July 2010.

FLEGT 2001. Ministerial Declaration, Forest Law Enforcement and Governance East Asia Ministerial Conference, 11–13 September 2001. Bali, Indonesia. At , accessed 12.1.2012

Fraser A.I. 2009. Resource-use efficiency in the wood processing industry in Lao PDR for ADB. Institute for Global Environmental Strategies, Asian Development Bank: Bangkok.

Hodgdon B.D. 2009. Frontier Country: The political culture of logging and development on the periphery in Laos. Kyoto Journal 69, 58–65.

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Inoue M. and Hyakumura K. 1999. Forest policy of Laos in terms of local participation. Unpublished IGES Interim Report 1998. Institute for Global Environmental Strategies: Japan.

Keobualapha K. 1993. Decree No. 169/PM – Decree of the Prime Minister on the Management and Use of Forests and Forest Lands. At , accessed 6 February 2011.

Kingsada K. 1998. Asia-Pacific Forestry Sector Outlook Study: Working Paper No: APFSOS/WP/38. Forestry Sector Outlook Studies. At , accessed 27 July 2011.

LaoPDR 2005. Forestry Strategy 2020. Government of Lao PDR: Vientiane.

LaoPDR. 2006. Lao People’s Democratic Republic: Northern Region Sustainable Livelihoods Development Project. Indigenous Peoples Development Plan Project Number: 35297. Prepared by the Government of Lao PDR for the Asian Development Bank.

Lawson S. and MacFaul L. 2010. Illegal logging and related trade: indicators of the global response. Chatham House, London.

LoC 2009. A Country Study: Laos. Library of Congress Country Studies. At , accessed 28 July 2011.

Manivong K. 2005. Country Paper: Water allocation and water right situation of Lao PDR. First NARBO Thematic Workshop on Water Allocation and Water Right, 5–9 December 2005, Hanoi, Vietnam.

Manivong K. and Sophathilath P. 2007. Status of community based forest management in Lao PDR. Status Report, the Regional Community Forestry Training Center for Asia and the Pacific (RECOFTC): Bangkok, Thailand.

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Midgley S. 2009. Key drivers of change in forest policy and management in the Asia Pacific. Salwood Asia Pacific Pty Ltd: Canberra

Midgley S.M., Blyth K., Mounlamai D. and Brown A. 2007. Towards improving profitability of teak in integrated smallholder farming systems in northern Laos. Australian Centre for International Agricultural Research: Canberra.

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Siphandone K. 1993. Decree No 164/PM – Decree on the National Forestry Reservation over the Country. At , accessed 6 February 2011.

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i The Institute of Foresters of Australia was established in 1935. The IFA is a professional body with over 1200 members engaged in all branches of forest management and conservation in Australia.
The Institute is strongly committed to the principles of sustainable forest management and the processes and practices which translate these principles into outcomes.
The membership represents all segments of the forestry profession, including public and private practitioners engaged in many aspects of forestry, nature conservation, resource and land management, research, administration and education. Membership is not restricted to professional foresters and other professionals are welcome to join IFA.


ii Established in 1987 by The Australian Academy of Technological Sciences and Engineering, it is named in honour of the late Sir John Crawford, who played a prominent role in shaping post-war Australia and was a fervent supporter of international agricultural research. The Fund depends on grants and donations from governments, private companies, corporations, charitable trusts and individual Australians. It also welcomes partnerships with agencies and organisations in Australia and overseas.
The Crawford Fund’s purpose is to encourage investment in international agricultural research by governments and the private sector, in the belief that it is an essential, high priority, international activity.
The Fund also has a training program that fills a niche by offering practical, highly focused non-degree instruction to men and women engaged in agricultural research and management in developing countries.





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