Ladies and gentlemen - it is a pleasure to make some opening remarks at the launch of the Forest Footprint Disclosure Review of 2010.
Let me start by giving some context for today’s discussion.
Forests are fundamental for the jobs, incomes and livelihoods of 90% of the one and a half billion people who live in extreme poverty around the world.
About 17% of all carbon emissions are caused by deforestation in the tropics and subtropics - more than from the whole of the global transport sector.
In the past 50 years, the world has lost a third of its tropical forests, and continues to lose some 13 million hectares each year - an area larger than Switzerland, the Netherlands and Denmark combined.
I used to live and work in places like Tanzania and Indonesia and have seen the damage at first hand.
And we know that the pressure on forests worldwide is not lessening, it’s actually increasing.
The challenge we face today is to find new ways to reconcile the competing demands for wood, for food, for fuel, as well as for biodiversity conservation and reduced emissions from deforestation.
Crucially what can we do to prevent the global demand for cheaper food and fuel from driving unsustainable agricultural expansion?
What role can investors and the private sector play?
What role can we play, as consumers, in reducing the demand for goods which rely on deforestation for their production?
And what is my department also doing to help make a difference directly on the ground in developing countries?
As we go forward, there are, I believe, four key areas on which we need jointly to focus our attention.
First, we need more secure rights governing who can control, use and benefit from forests.
Unclear rights are bad for business and, when this leads to forest clearance, bad for the local communities who depend on forests. It is also bad for global climate change.
Civil society groups in Indonesia, for example, have demanded a halt to all new palm oil plantation deals until their forest land rights are protected in legislation.
The Government of Indonesia has recently placed a moratorium on further conversion of peat forest to palm oil as part of its efforts to reduce its carbon emissions from deforestation and help tackle climate change.
We, governments and private sector, can work with local communities to help them get back control of their livelihoods and improve their access to markets, while making strides in investment and in contributing to the broader good.
For example, the UK is supporting the international Rights and Resources Initiative (RRI) which seeks to advance regulatory reforms in the forest sector.
Second, protecting forests is actually hardest where governance is weak.
That is why we are building the capacity of producer countries to formulate and enforce better laws and regulations - this will help protect forests and also create a better climate for investment and sound business practice.
Only one percent of tropical forests in Africa, Asia, Latin America and Oceania have been certified as sustainably managed since the early 1990s. Most of the 320 million hectares of the world’s forests that have been certified are in Europe and North America.
So clearly we also need to take that certification process a lot further.
UK is supporting producer countries like Ghana, Liberia, Cameroon, the Democratic Republic of Congo and Indonesia through the Forest Law Enforcement Governance and Trade programme (FLEGT) to develop better regulation and law enforcement of their forest and natural resource sectors.
For example, helping them put in place “chain-of-custody” systems that trace timber as it is transported from forest to port. This reduces opportunities for trafficking. It builds transparent and accountable government by shedding light on who cuts forests and how forest revenues are collected and used. It provides evidence on whether timber is from legal sources - an essential first step to achieving sustainable management of forests.
A report last year by Chatham House showed that every £1 we are investing in tackling illegal logging results in £6 of additional revenue that can be used for the public good by countries with cash-strapped exchequers.
And improving the way forests are governed also results in reduced carbon emissions and helps fight climate change. The same report mentions reductions in deforestation and degradation that avoid 14.6 billion tonnes of carbon emissions - that is two and a half times the UK emissions over the same 10 year period.
Emerging economies are also taking action. Brazil reduced its rate of deforestation in 2009/10 compared with the year before. It brought more of its Amazon area under clearer jurisdiction, in particular for traditional communities living directly from forest resources. It monitors the use of its forests. Furthermore, the City and State of Sao Paulo have, like the UK, established procurement policy which favours certified timber products.
UK is looking at expanding its support to countries beyond law enforcement and governance on timber to other commodities that drive deforestation. For example, we are supporting Indonesia in reviewing the laws it has for governing its palm oil sector. This means developing laws, policies and incentives that are less bureaucratic and facilitate market access for businesses, smallholder producers and workers. That help businesses meet sustainable and legal standards - standards for safer working, based on more sustainable ways of farming, on clearly titled land.
This brings me on to the third area I wish to highlight. The buyers’ market in the UK and Europe, and elsewhere, is also changing.
New regulation at home will reduce the risks for consumers, as well as for buyers. UK is one of the world’s biggest importers of tropical timber, for example. The European “Illegal” Timber Regulation (ITR) came into force last December. This will make first sale in the EU of timber and wood products that have been illegally logged, an offence.
Similarly last April the USA amended its Lacey Act, making it unlawful to import plants and a range of wood and plant products illegally obtained in the country of origin. Japan, China and Australia are considering similar action.
This kind of risk-based regulation provides some guarantee to consumers. It will inspire them with greater confidence that the wood products they purchase are sustainable and legal.
The fourth area where we need to focus attention, is due diligence in the private sector.
I will be interested to hear today how businesses are becoming more informed and discerning about their impact on forests, and what actions they have taken over the past year to reduce their forest footprint.
Improved due diligence for forestry investments by banks such as JP Morgan Chase, Citigroup and Bank of America has already had a significant influence on investment in the pulp and paper sector in Asia through tighter lending conditions that are based on the sustainability of supply chains.
Marks and Spencer launched its Plan A - Doing the Right Thing - four years back. It committed to sourcing all its palm oil, soy, cocoa, beef, leather and coffee only from the most sustainable sources by 2015 and all its timber products from the most responsibly managed sources by 2012. I hope we will hear more about progress with initiatives like this.
Unilever and other members of the Roundtable on Sustainable Palm Oil (RSPO) have committed to using only palm oil from sources that are certified as being sustainable.
British Airways is committed to helping partner companies reach “One Destination” - the name of BA’s responsible air travel endeavour - and is the first airline to declare its forest footprint.
I hope great progress is being made against all these commitments!
The UK government backs the Forest Footprint Disclosure project. It is an innovative initiative. It helps companies identify more clearly the implications of their investment and their marketing decisions on deforestation. But not just on forests. In the end it is about the billion or so poor people that depend on forests for their livelihoods. Being part of this initiative means we can work together - business, government and non-government organisations - and make a difference to the indigenous and local communities who live at the sharp end of poverty and climate change.