Open Timber Portal and SPOTT: Raising the bar for corporate disclosure in Gabon

Author(s)

Oliver Cupit, ZSL

Please note that this blog was written by ZSL and has been reposted on the Forest Legality Initiative website. To view the original article, click here.

In April 2021, the World Resources Institute’s Open Timber Portal (OTP) launched its first transparency rankings of forestry producers in Gabon, aimed at incentivising companies to disclose evidence that they are operating in compliance with forest management legislation. ZSL attended the launch event of the OTP in Gabon to discuss how the OTP and our flagship transparency initiative SPOTT collaborate to provide forest managers the tools to increase transparency around legal forest management.

It is estimated that 15 to 30% of all wood traded globally is produced illegally. As a means of tackling this illegality tropical timber markets are, rightly, becoming increasingly regulated at all stages of the supply chain. Forest codes in producer countries frame the way lands are allocated for timber production, define the requirements for management plans, and set harvesting rules. The European Union Timber Regulation (EUTR) and associated FLEGT Voluntary Partnership Agreements (VPAs) aim to ensure that all wood that enters the European market is produced legally. Voluntary Partnership Agreements are negotiated by producer countries with the European Union to define the rules of forest management and facilitate the entry of legally produced timber into the European market. Since leaving the European Union the United Kingdom has maintained the approach, implementing the UK Timber Regulation and accepting FLEGT licenses.

Regulations in both producer and consumer countries have contributed to reduce illegal logging and the negative outcomes it has on forest ecosystems and communities. However, enforcement of such regulations still needs to be improved and governance strengthened to ensure that all wood that is harvested, processed and traded complies with legal requirements.

Greater transparency in the tropical forestry sector is vital to improve the enforcement of legal requirements and shed light on illegal practices, including logging of protected species prohibited for commercial use, logging outside of concessions allocated for timber, or illegal activities within timber concessions, such as mining or poaching. It can also highlight where companies with higher Environmental, Social and Governance (ESG) commitments are going beyond legal compliance.

Open Timber Portal (OTP) expands to Gabon

By tracking transparency and improving access to information, both SPOTT and the OTP incentivise legal timber and the implementation of ESG best practice. Deforestation and community rights violations that still occur in tropical forests can only be halted if forestry operations are fully legal, and this cannot be achieved without transparency.

The OTP brings transparency to timber operations by compiling information from different sources:

  1. Governments’ official concession boundaries and list of registered timber producers
  2. Documents uploaded voluntarily by timber producers to demonstrate compliance based on a country-specific list of documents
  3. Observations of suspected non-compliance from third-party forest monitors and NGOs
  4. Annual tree cover loss and weekly alerts on tree cover loss within the boundaries of the concessions.

The country-specific list of documents covers 10 categories: legal registration, use right, forest management, timber harvesting, impact assessments, transport, trade export and CITES, taxes, population rights and labour regulations. In countries that are engaged in the FLEGT VPA process, the OTP draws these lists from the multistakeholder-developed legality grid, which defines specific forest legality indicators and includes associated verification compliance documents. For countries with no VPA in place, the OTP list builds on the forestry law and subsequent regulatory instruments. The list is submitted to stakeholders for feedback until a consensus is reached. The OTP was designed by WRI in consultation with government, private sector and civil society actors.

The OTP currently focuses on the Congo Basin and covers Cameroon, Central African Republic, Democratic Republic of Congo, Republic of Congo and has expanded in December 2020 to include operators in Gabon.

ZSL’s SPOTT project has worked closely with the OTP to raise transparency around legality requirements in the Congo Basin. "As SPOTT and the OTP are working to achieve the same goal through complementary approaches, it is crucial to develop synergies between the tools and join efforts to reach out to the private sector in producer countries"  says Achille Djeagou, OTP coordinator in the Congo Basin.

New indicators[1] were added to SPOTT’s scoring criteria in 2019 covering eight of the ten categories covered by the OTP. These include whether a forestry company has provided valid legal documents to the Open Timber Portal on legal registration, use rights, forest management, timber harvesting, impact assessments, population rights, labour regulations and taxes, fees and royalties.

For these indicators, companies assessed on SPOTT receive up to 1.0 point based on their score on the OTP within the category. For example, if a company has submitted two valid documents out of five (40%) to the OTP in the category “Timber harvesting”, it will receive 0.4 points for SPOTT indicator “Company has provided valid legal documents to OTP on timber harvesting (at the time of SPOTT assessments)”. These indicators only apply to SPOTT-assessed companies which operate in the countries currently covered by the OTP and are disabled for other companies. While OTP scores are updated daily, SPOTT assessments provide a yearly analysis on the state of transparency in the timber sector. Company scores in these eight indicators provide a snapshot of company scores on the OTP at the time of SPOTT assessments.

For ZSL this is a vital resource for indicating legality compliance of forest management companies in the Congo Basin, as the OTP process of defining necessary legality evidence draws on multistakeholder VPA processes where possible. ZSL’s Sustainable Business Advisor in the Congo Basin, Armstrong Mba, says: “We’re encouraging all companies in Gabon to disclose using the OTP, especially SPOTT-assessed companies, which can increase their SPOTT scores for legality indicators. For us, this collaboration makes sense, as the OTP has already clearly defined the legality evidence companies should be disclosing in a robust manner and for companies it reduces the reporting burden as they know that OTP and SPOTT are evaluating their legality disclosures in the same way.”

Both SPOTT and the OTP recognise that corporate disclosure of legality evidence alone is imperfect. In many countries, corruption and lack of rigorous assurance processes for the issuance of legality evidence means that fraud occurs in many instances. However, making evidence available is a first step towards shining a light on these issues. It can help identify those companies operating outside the scope of their legal mandate and it allows increased scrutiny from civil society organisations, buyers and financiers concerned with legal forest management.

To promote the launch of OTP in Gabon, WRI held a multistakeholder workshop in Libreville on 29th of April 2021. This was attended by representatives from the forestry sector in Gabon and aimed to highlight the importance of corporate transparency in supply chains, conclude on the list of legality documents to be submitted on OTP by Gabonese companies , as well as train companies on how to upload them to the Open Timber Portal. ZSL’s Sustainable Business Advisor in the Congo Basin joined the workshop to present SPOTT and encourage Gabonese operators to use OTP disclosures to increase their 2021 SPOTT assessments which will be launched in June 2021.

Access the Open Timber Portal (OTP) here

[1] Indicators 23, 24, 25, 57, 96, 100, 126, 128: “Company has provided valid legal documents to Open Timber Portal on [Open Timber Portal category] (at the time of SPOTT assessments)”