TED Case Studies

Dutch Tropical Wood Import Ban

Go to All TED Cases

          CASE NUMBER:          20 
          CASE MNEMONIC:      DUTCHWD
          CASE NAME:          Dutch Tropical Wood Import Ban

A.        IDENTIFICATION

1.        The Issue

     The Netherlands instituted a national policy on
environmental and trade matters conforming with EC law.  However,
some locales have initiated additional restrictions beyond the
scope of the EC law.  This is particularly true with respect to
the use of tropical hardwoods, in projects where there is an
interest on the part of the locale.  Some locales have banned the
use of certain tropical hard woods in construction projects, and
these are especially imports from Malaysia and to a lesser extent
Indonesia, who in turn threatened to retaliate against Dutch
products.  These local policies are at odds with EC policy.

2.        Description

     Reports from the Food and Agriculture Organization (FAO)
suggests that the annual tropical loss in rain forests was 9
million hectares in 1980 and by 1990 this figure will have jumped
to 17 million hectares annually.  About 80 percent of this is
"attributed to clearance, the underlying causes of which include
poverty, high population pressure, and lack of employment." 
Trade can also play an important role.

     In light of this trend, The Dutch Government relies on
policies of the EC and other international organizations to which
it is a party to address problems of tropical forests.  Beyond
that, the Government itself and various provincial authorities
also prescribe regulations in this matter.  As the above report
notes: "This is fragmented local policy."

     Provincial actions have used two measures to prohibit the
use of tropical hardwood in provincial building.  First, in
municipally-financed projects there are restrictions on the use
of tropical hardwoods; and second, building regulations
themselves prohibit the use of tropical hardwood.

     The Minister for Housing, Physical Planning and the
Environment requested that the Council of State give some
guidance on the legality of these measures.  The debate hinged on
interpretation of Article 168 of the Municipalities Act and is at
present inconclusive.  "The Government takes the view that, while
there are obstacles in international law to municipal regulations
prohibiting the use of tropical timber, some scope remains for
other municipal activities."

     Notwithstanding the added problems that tropical wood
imports impose on tropical forest areas, the Netherlands imports
a wide variety of products grown on land that was once tropical
forests and cleared to make way for agricultural production. 
These products include cocoa and coffee beans, rubber, palm oil,
soya and tapioca.

     Dutch Government policy on the import of raw materials must
comply with general EC policy, and with respect to this product
the guidelines set by the International Tropical Timber
Organization (ITTO).  The EC follows basic tenets in their
Environmental Action Programme (EAP), now in its fifth term.  The
EAP vaguely states that wood can only be imported from tropical
areas that are managed and practice sustainable wood harvesting
practices.  The EC is planning to set quotas (by 1995) on such
imports and institute a licensing program.  Imports from non-
certified countries would be refused entry and the Government
would support a labelling system.  The Government also will do
everything in its power to create limits on the import of
tropical timber as part of the GATT and other agreements to which
it is a party.  A levy on tropical timber imports has been
proposed to raise funds to support sustainable development
policies.  As the Dutch Government's Policy Paper stated:

     "The idea of an import levy on tropical timber was
     launched by the Netherlands Timber Association jointly
     with the British Timber Trade Federation and taken up
     by the Union Commerciale des Bois Tropiceaux (UCBT). 
     The Netherlands Institute of Economics (NEI) has issued
     a report on the importance, feasibility and
     implementation of such a levy.  A levy of 2% in the EC,
     Japan and the USA would yield about $65 million a
     year."

3.   Related Cases

     NEMATODE case
     MALAY case
     ITALYBAG case
     DUTCHWD case
     INDONES case
     THAILOG case
     SOLOMON case
     AUSTRIA case
     USRECYC case
     CHILE case

     Keyword/Category

     (1) SIC:                      = WOOD
     (2) Trade Measure             = Import Ban [IMBAN]
     (3) Environmental Problem     = DEFORestation

4.        Draft Author:  Jim Lee

B.        LEGAL Filters

5.        Discourse and Status:  DISagreement and INPROGress

     Both the EC and the governments of Indonesia and Malaysia
object to the ruling.  The Netherlands, along with other members
of the EC, is in the process of implementing a new policy on the
importation of tropical hardwoods, set to take effect in 1995. 
In theory, this overall policy would supersede local municipal
policies, but this condition is not assured.  The case actually
involves the setting of standards regarding the imports of
tropical hardwoods.
6.        Forum and Scope:  EURCOM and REGION
     The basic issue is the forum, whether it is the municipality
or Dutch national policy which must conform to overall EC policy. 
At the moment, the government suggests that the national policy
is precedent over that of the municipality, and that EC policy
guides Dutch policy. 
7.        Decision Breadth: 12 (EURCOM members)
8.        Legal Standing:  TREATY
C.        GEOGRAPHIC Filters
9.        Geographic Locations
     a.   Geographic Domain : ASIA
     b.   Geographic Site   : East ASIA [EASIA]
     c.   Geographic Impact : NETHerlands
10.       Sub-National Factors:  YES
     This is actually a local law that is not consistent with
Dutch national law or EC policy.
11.       Type of Habitat:  TROPical
D.        TRADE Filters
12.       Type of Measure: Regulatory Ban [REGBAN] 
     The elements of the policy call for an overall quota on
tropical hardwood imports used in government projects. 
Municipalities, in addition, have put regulatory standards on its
use as well.  The measure applies to the direct importation of
tropical hardwood, but does not address other imports produced
through the clearing of land on which tropical forests once
thrived.  Since the certification for imports, even with a quota,
would require licensing based on sustainable practices, then the
measures concerns itself with the process as well.
13.       Direct vs. Indirect Impacts:  INDirect
14.       Relation of Measure to Environmental Impact
     a.  Directly Related     : YES  WOOD 
     b.  Indirectly Related   : YES  WOOD products  
     c.  Not Related          : NO
     d.  Process Related      : YES  DEFORestation 
15.       Trade Product Identification:  WOOD
16.       Economic Data
     The Netherlands imports about 1.9 million cubic meters of
tropical timber each year, according to 1988 data.  Of this
total, about two-thirds comes from Asia, especially from
Indonesia and Malaysia.  However, the concentration of trade is
much more intense at a more discrete level of examination. 
Almost 45 percent of roundwood imports come from Cameroon alone,
and Africa accounts for 80 percent of the country's total
tropical timber imports.  However, almost 58 percent of sawn wood
comes from Malaysia and almost 46 percent of plywood comes from
Indonesia alone.  Indonesia and Malaysia account for 62 percent
of the Netherland's total tropical wood imports and the inclusion
of trans-shipments would probably increase this total.  For
example, Singapore is actually the third largest provider of
plywood to the Netherlands, but of course has no forests of its
own.  Plywood and other woods products are probably made out of
sawn wood imported from Malaysia and Indonesia.
17.       Impact on Trade Competitiveness:  LOW
     The imposing of a ban or limitation on importing tropical
hardwoods in the whole of the Netherlands will naturally deprive
Malaysia and Indonesia of some export earnings.  The real danger
would be if the entire EC imposed this limitation, but perhaps
demand would no doubt shift elsewhere.  However, other suppliers
would step into the EC market with the exclusion of Malaysian and
Indonesian wood products.  The United States and Canada are in
fact the two largest wood exporters in the world, both hard and
soft, and some supply from Scandinavian softwoods would also
likely occur as well as African hardwoods.  In all, the EC
accounts for 10-20 percent of wood imports from Southeast Asia.
18.       Industry Sector:  WOOD
19.       Exporter and Importer: MANY and NETHerlands
E.        ENVIRONMENT Filters
20.       Environmental Problem Type:  DEFORestation
21.       Name, Type, and Diversity of Species 
     Name:          Tropical Hardwoods
     Type:          Plant/Angiospermae/Dicots
     Diversity:     4,311 higher plants per
                    10,000 km/sq
                    (Indonesia)
     The rain forests of Southeast Asia are one of the richest
habits for bio-diversity in the world.  Many species are at risk.
22.       Impact and Effect:  LOW and SCALE
     This action alone will not change the deforestation trends.
23.       Urgency and Lifespan:  LONG and 100s of years
24.       Substitutes: RECYCling
VI.       OTHER Factors
25.       Culture:  YES
     Most of the logged products comes from the island of Borneo
(the Indonesians now refer to their portion of the island as
Kalimantan).  The people living in the forests are neither Malay
nor Chinese, but of an older race of people who were the
ancestors of modern day Filipinos.  Many have made contact with
the rest of the world only in this century and some within the
last few decades.  Logging and the building of roads needed by
loggers opens up a great number of contacts with the outside
world, severely straining the traditional lifestyle of the
indigenous peoples.
26.       Trans-Border:  YES
     Timber is actually harvested illegally on both sides of the
Malaysia-Indonesia border on Borneo.  Wood trade crosses the
virtually unmarked border between Malaysia and Indonesia on the
island.  Indonesia has been accused of poaching from Malaysian
territory.
27.       Human Rights:  YES
     The Penang and other peoples who live on these lands do not
own the land in the "modern" sense of the word.  The logging and
the wealth from the wood goes to Chinese (mostly) and Malay
peoples.  Some peaceful resistance, the blocking of roads and
demonstrations, has occurred.
28.  Relevant Literature
The Dutch Government's Policy Paper on Tropical Rainforests.  The
     Hague (December 1992).
ECE/FAO, Agriculture and Timber Division.  Study of the Trade and
     Markets for Tropical Hardwoods in Europe.  Geneva,
     1989.
R.C. de Boer, de and L.J.M. Dielen.  "Tropisch bos, Tropisch hout
     en Netherland ["Tropical Forests, Tropical Wood and the
     Netherlands"]).  Stichtung Bos en Hout, Wageningen,
     Netherlands, 1989.
Grainger, Alan.  "Future Supplies of High-Grade Tropical
Hardwoods
     from Intensive Plantations."  Journal of World Forest
     Resource Management 3 (1988): 15-29.
Gebruik, C.F.W.M.  "Van en Alternatieven voor Tropish Hout."
     Ministry of Housing, Physical Planning and Environment.
     The Hague, Milieubeheer 24 (1985).

                          References