Lao PDR reflects on current situation and policy implications for operators engaged in wood product…

Lao PDR reflects on current situation and policy implications for operators engaged in wood product export towards improving, easing and increasing legal timber trade specifically from Laos to Vietnam

Laos has strengthened and improved the forestry sector by revising major regulations on restricting export of unprocessed timber products made from both plantation and natural timber. It is also committed to sustainable forest management and combating illegal activities in the countries forests.  To meet such commitments, Lao Government has formally entered into negotiations with EU on a Voluntary Partnership Agreement since 2015 in which timber legality assurance system (TLAS) is one of the most crucial parts under this agreement.  Under the negotiation, Laos and the EU agreed to assess existing institutional and business environments influencing the wood processing industry to inform policy change in Laos and to facilitate operator’s legality compliance and cross-border timber trade. 

 

Thus, with support from the Foreign, Commonwealth & Development Office (FCDO) via the ProFEB project, the Ministry of Agriculture and Forestry and the Ministry of Industry and Commerce conducted a survey of 40 operators in six provinces to identify operator’s challenges in complying to the government’s legality requirements. This includes the challenges faced by the operators in export preparation, during the export, and after the completion of their export activities. 

 

The important findings from this survey indicated that the major inhibiting factors for export of timber by Lao operators to Vietnam include: (i) restrictive regulation on export products, especially the products list allowed for export do not reflect market demand,  (ii) cumbersome export procedures and requirements, particularly slow and complicated export procedures and requirements, (iii)  unforeseen cost, whereas such cost occurs at different stages starting from preparation of export documents, operator’s facility check to transportation, (iv) and other related reasons, particularly the information on how to prepare export documentation including the filling in of custom declaration form, calculating tax, accessing to market information on demands and preferences, among others were not available.  

 

With such challenges and constraints, the survey provides comprehensive recommendations to improve and ease the legal timber trade of Lao operator to Vietnam and other countries. These include: (i) simplifying the export process and requirements by reviewing and improving the entire export processes, rules and regulations, and providing clear checklists with required documentation (ii) reducing unforseen cost of operator by providing clear information on what operator needs to be paid before, during and after export including establishing a hotline to report on misconduct cases, (iii) simplifying legal requirements for products made from plantation timber by simplifying export procedures and reducing physical check before and during export, (iv) understanding of export markets by providing information on export markets, market dynamics, product preferences to operator, and (iv) providing capacity building to Lao wood processing association and Lao furniture association on preparing export documents, tax calculation and payment, and timber legality compliance.  It is agreed by the Government line agencies that the results of this survey will be published and delivered to relevant line ministries to take actions to improve, ease and increase legal timber trade by Lao operator to Vietnam.  

 

The report in English version can be reached by:  Publications – Lao-EU Forest Law Enforcement, Governance and Trade towards (flegtlaos.com).

The info brief in Lao and English versions can be reached by:  Publications – Lao-EU Forest Law Enforcement, Governance and Trade towards (flegtlaos.com).