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Vietnam and the European Union have agreed in principle on a trade mechanism to combat illegal logging, the E.U. Delegation to Vietnam announced Friday.
Under the voluntary partnership agreement, Vietnam's exports of timber and timber products to the EU will require certification attesting to the legality of their origin and production process.
The program will allow for Vietnam to issue Forest Law Enforcement, Governance and Trade (FLEGT) licenses either by consignment or to trusted traders.
"Vietnam and the EU today celebrate a milestone in their cooperation in the global fight to end illegal logging," said E.U. Commissioner for Environment, Maritime Affairs and Fisheries Karmenu Vella.
It may take the parties one to two years to ratify the agreement, according to the E.U. Commision.
Indonesia issued the world's first and only FLEGT license on November 15 after a six year ratification process.
Vietnam will have to develop a timber legality assurance system, said Vietnamese Minister of Agriculture and Rural Development Nguyen Xuan Cuong, and other reforms, including issuing specific legislation to ensure the legality of timber it imports for further processing.
Timber exports to the EU are currently governed by the E.U. Timber Regulation, which requires EU importers to exercise due diligence to screen for illegally harvested timber. The process will be eased for those with a FLEGT license, which means they have already come into compliance with EU regulations.
The amount of paperwork required to obtain a FLEGT license is "not a big thing", said Vella.
It depends on a number of risk factors. Timber sourced from countries with widesprad illegal logging will be labeled "high risk," while those that originate from small holder farmers will be deemed lower risk.
"This process will facilitate even more trade between Vietnam and the EU," said Vella. "Once someone is exporting to the EU under this license, it will give a much better image of the timber industry in Vietnam."
Vietnam's timber trade with the EU in 2014 hit $705 million.
Vietnamese timber exporters are concerned, however, about the "transparency of the mechanism," said Luu Thi Ngoc Anh, communications manager at NEPCon, an NGO which helps producers obtain timber certification.
"Vietnam scores high on the Corruption Perception Index (CPI); it's easy to make fake documents here," Anh told VnExpress International.
Last year, Transparency International ranked Vietnam 112 out of 175 countries and territories in its CPI.
"The EU will be closely monitoring Vietnam's implementation of the agreement, particular in areas where stakeholders have concerns," Vella said, adding that civil society groups will be able to file complaints on any misconduct found in the system in addition to third party auditors who will monitor the process on a regular basis.
Vietnamese timber products are available in about 120 countries and territories; last year's exports hit $7 billion and are expected to hit $7.3 billion by the end of this year.
Illegal logging, however, remains a significant challenge. It deprives the government of revenue, threatens biodiversity and creates conflict within forest communities.
Industry data show that the import volume of non-certified wood from high-risk sources declined from 60 percent of all imported logs in the 2013-2014 period to 50 percent in recent years. Specifically the amount of precious wood from Laos and Myanmar has sharply declined.
Sawn wood from high-risk sources also fell from 30 percent to 20 percent.
Vietnam is one of 15 nations that implementing or negotiating FLEGT agreements with the EU.
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