This document summarizes a regional conference on improving forest law enforcement and governance (FLEG) in Eastern Europe and Central Asia. It discusses: 1) The importance of forests and challenges of forest governance, including dependence on forests, economic value of wood trade, and costs of poor governance like corruption and illegal logging. 2) The Eastern Europe and North Asia FLEG process which began in 2004 to address these issues, including national and international declarations and an action plan to strengthen legislation, institutions, and cooperation. 3) Next steps for implementation including support from international organizations like the World Bank, ongoing monitoring and reporting of progress, and ensuring momentum is maintained.

1. ENPI FLEG RegionalConference Tuukka Castrén World Bank Chisinau/July 13 - 14, 2010

2. Structure Why forests are special governance challenge Addressing governance ENA FLEG Process What has happened after St. Petersburg

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4. What do thieves want?

5. Winner is…

6. Forests Matter Over 400 million people depend on forests for income, food, energy, medicines and shelter. Global trade in primary wood products is about US$ 186 billion/yr and the total trade in all wood products is several multiple higher. 20% of global carbon emissions come from deforestation and degradation

7. Costs of poor forest governance Livelihood losses to forest dependent communities Local and global environmental losses – (climate change and biodiversity) Fiscal losses to state Spread of crime and corruption (corruption contagion) Undermining institutions Undermining legitimate forest enterprises

8. Corruption and Illegal Logging Corruption in the forest sector is globally pervasive Has many forms: Criminal: illegal logging, smuggling, extortion Legal but corrupt: state capture, institutional erosion, rent seizing Scale is vast – but quantitative estimates remain elusive: Illegal logging (roundwood)on public lands estimated at >10bn per annum Illegal roundwood trade estimated at >1.2bn per annum

9. Ways to Improve Governance Increase economic efficiency: reduce monopolies Reduce administrative discretion Increase accountability Increase transparency Involve stakeholders Improve compliance

10. Components of Forest Law Enforcement Compliance Detection Suppression Prevention Good governance Theft Prevention Legitimacy

11. ENA-FLEG road map Invitation at UNFF-4 (May 2004) National Preparatory Processes Civil society and Industry processes (dialogue) Preparatory Conference (Moscow, 2005) Interim Period (Drafting/Informal consultations) Ministerial Conference (St.-Petersburg)

12. Declaration: key themes National - 11 principles on commitment to improve fleg and forest legislation strengthening institutions, human capacity, cooperation and anti-corruption actions engaging with stakeholders and recognizing rights and knowledge of forest-dependent and indigenous people exchanging and disseminating information and promoting implementation and analytical work

13. Declaration: key themes International - 11 principles on strengthening cooperation on and information sharing fleg and trade (incl. wildlife, CITES) monitoring, assessment, reporting of progress on FLEG and promoting transboundary collaboration promoting partnerships with private sector and civil society enhancing awareness raising

14. Declaration: key themes Implementation - 7 principles on endorsing indicative list of action as the framework for implementation international organizations (particularly World Bank), institutions, processes to support implementation follow-up structures

15. Indicative actions National Actions: Policy frameworks Legislation systems Institutions and capacity building Sustainable forest management Rural development, livelihoods and poverty alleviation International Action: Forest related policies Trade and customs Research Collaborative implementation of actions

16. Observations process reflects the situation in the region joint commitment between the governments, private sector and civil society includes issues raised by NGOs and private sector strong civil society and private sector participation sensitive topics, like corruption, transparency, participatory approach, certification

17. Observations action is needed to avoid loss of momentum great degree of responsibility on the WB to facilitate this process support of international community is needed for poorer countries

18. Follow-up ENA-FLEG Ministerial Conference(44 countries and European Commission) – St. Petersburg, November 2005 FLEG Implementation Workshop– Antalya, May 2006 Guidelines for National Action Plan Implementation 5th MCPFE Conference – Warsaw, Nov. 2007 Work Program for 2008-2010 FLEG Expert Meeting – Bucharest, Oct. 2008 Review of FLEG and FLEGT Status and Lessons Program on Improving Forest Law Enforcement and Governance in the ENP East Countries and Russia (2008-2011)

19. Some key issues Definition of (il)legality must be national National definition, not same everyplace Covers i) domestic consumption, ii) regulated export to sensitive markets, iii) exports to non-sensitive markets Ministerial Conference: useful framework and a good start

20. International Context Regional processes Asia, Bali declaration ASEAN Africa, Yaoundédeclaration COMIFAC

21. Changes in Global Context Forest governance recognized as key ingredient Consumer country legislation Timber regulation (EU) Amended Lacey act (US) other countries (JPN, Australia) whole supply chain Climate change: Reduced Emissions from Deforestation and Degradation (REDDplus)

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23. Thank you