(2017) Scattered Timber Sources in Vietnam and Potential Development under the FLEGT VPA with European Union, funded by FAO

Vietnam export-oriented timber industry has been expanding rapidly in recent decade. The sector now has about 3,400 timber processing enterprises and employ more than 300,000 labours. In 2015, the total export revenue derived from wood product export reached USD 6.2 billion, with 70% of which derived from the EU and US market. The expansion trend continues, particularly with the Bilateral Free Trade Agreement (FTA) with European Union and with other multinational and bilateral trade agreements waiting to be commenced soon in the future.

A substantial amount of revenue from export has drawn tremendous attention in Vietnam with regard to export market. This is also for the government to focus primarily on policies and measures aiming at boosting the export. By contrast, little is known about the domestic timber market (e.g. magnitude, market outlets, types of timber species, the legality of products), with about 90 million people and an expanding middle class with an increasing demand on timber products.

Studies have highlighted the dynamic relationship between domestic and export market, and called for urgent research into the former. Vietnam is not a timber producing country, but a processing hub. Annually, Vietnam also spends about USD 1.68 billion to import timber which accounts for 70-80% of the total timber supply nationwide . The shortage of domestic timber supply offers an important opportunity for plantation in the country, including scattered trees.

Vietnam has been in negotiation with the European Union on a VPA with aim eliminate illegal timber from supply chains, including those supply timber products to the EU markets. The legality of the timber is the core issue of the negotiation. The Vietnamese government has decided to include domestic markets into the VPA. This means that the legal of requirements on the legality of timber products for domestic market (Vietnam) would be the same with those required for the products exported to the EU and export markets.

The scattered timber source (STS) is defined as a source of timber harvested from scattered plantation such as on roadsides, canal banks, home gardens, forest gardens, shade trees, intercropped forest trees in agroforestry systems or forest trees in small plots and salvaged fruit trees. In many places across agricultural landscapes and shifting cultivation areas, exotic and native timber trees can be found on public, customary and private lands. In some cases, scattered trees have been planted or just natural regeneration stands protected or not and cut/burned by local people. Studies have suggested that STS is an important timber supply source for domestic timber market (To et al. 2014). An estimation suggests that the total amount of STS harvested in 2014 is approximately 5.93 million cubic meters , but this figure has been disputable. The number of dispersed trees is enormous in the agroforestry systems in the Central Highlands, mainly used for shading and windbreak for coffee plantations. From the demand side, STS is basically legal and becoming an increasing proportion of the domestic timber supply.

There exist policies that regulate scattered tree in Vietnam. These include the Ministry of Agriculture and Rural Development (MARD) Circular 34 (2009) on the definition of scattered trees and Circular 35 (2011) on the harvest of dispersed trees. According to these circulars, trees on plantation areas smaller than 0.5 hectare or on a strip narrower than 20 meters are considered scattered trees. There exist other policies those aim to promote the production of scattered trees. For example, MARD’s Decision 2241 in promotes the planting and then harvesting 2 billion trees by 2020, MARD’s Decision 147 (2007) prescribing financial and material supports for the development of scattered tree plantation. Government statistic records that the country planted 75, 52.5 and 55 million scattered trees in 2013, 2014 and 2015 respectively.

Speculation has been that a large volume of STS has been provided to market. However, little is known on how much exactly the volume is and to where the tree goes after harvest . Despite a large quantity of scattered trees (ST) harvest each year (as mentioned earlier), the legality of STS is still in question. In the context of ongoing VPA negotiation in Vietnam, the question on the legality of STS is important and very relevant to the identification of the scope of the VPA, particularly concerning the timber legality definition and the design of Timber Legality Assurance System (TLAS).  Specific questions include if there exists any legal framework regulating the use and management of ST, or whether the harvesting, transporting, processing and trading of ST complies with legal requirement identified in the legal documentsLD. In other words, it is important to understand the role of ST as a source of raw material inputs of the wood processing industry for exports and domestic consumption in Vietnam, as well as the legality of the wood. The proposed study will provide insights into the scope and transparency of market and highlight important implication for the improvement of Timber Legal Definition (TLD) and Timber Legality Assurance System (TLAS) in the future.

2.2 Objective:

The ultimate goal of the project is to understand the extent to which scattered timber sources contribute to the wood processing industry in Vietnam and the legality of the wood so that evident-based recommendations for the improvement the existing TLD and TLAS in Vietnam could be made.

The specific objectives:

1.         To investigate the current status of scattered trees (ST) production concerning its type, tenure status, quantity and its role in timber supply in Vietnam.

2.         To assess the legality status of STS concerning the harvesting, processing and trade of the wood along the supply chain.

3.         Base on (1) and (2) to make recommendations for the improvement of existing TLD and TLAS and for promoting the sustainable harvesting and utilization of STS in Vietnam.