PRESS RELEASE

Posted on 10 November 2020

STREAMLINE TIMBER TRADE AND PROMOTE FOREST INDUSTRIAL DEVELOPMENT

Kampala: November 9, 2020 – Uganda’s forest cover is currently estimated at 12.4% of its total land area, down from the 24% in 1990 due to deforestation and forest degradation. Deforestation has been partly attributed to illegal logging, unsustainable harvesting and illegal and uncertified products on the market. As the country strives to make headways economically, heavy investments in infrastructure and oil and gas development require forest products. As developments continue to occur, consumption of industrial wood is expected to reach 1.7 million cubic metres by 2030 rising from 1.3 million cubic metres in 2008. If this trend is not checked, Uganda will soon be a wood scares country, as a recent study has pointed out.

The study, a result of the lack of harmony in a number of legislations governing the forestry sector, focused mainly on the forestry laws and those charged with public procurements, resulted in; The National Forest and Tree Planting Act, 2003, and Public Procurement and Disposal of Public Assets Act, 2003, - A Gap Analysis of the Hinderance to Effective Trade in Forest Products in Uganda.

Some of the issues highlighted as a result of this study included:
The titling of the National Forest and Tree Planting Act, 2003, under section 1 seems to indicate that the law is about planting, growing and protection of trees only despite having provisions on regulation of harvesting and movement of forest products. “Part VI” of the same Act also provides for Trade in Forest Products, which includes timber. However, the provisions therein concerning the trade of the forest products have not been operationalized; and there is no formal regional mechanism to regulate cross-border trade and movement of timber.

The study also indicated that Statutory instrument No. 16 of 2000 on Forest Produce Fees and License Order prescribed fees and taxes to be paid for forest products, but current timber valuations on which the tax is levied are below present market value. An “equalization fee” of 15% was proposed, but it wasn’t provided for in the Statutory Instrument No. 16.

Uganda imports approximately 9,000 m3 of high value mahogany and other sawn timber mainly from DR Congo (WWF, 2012). Timber from neighboring countries is considered legal once it is received in Uganda. This makes it difficult to regulate the trade. In addition, there are different, often conflicting policies and procedures, regarding entry and exit of timber into and from neighbouring countries. The law is silent about regulating importation of forest products, but clear in the Local Content provisions as well as Buy-Uganda Build Uganda Policy which emphasize sourcing from locally registered businesses, forest products inclusive.

Whereas the PPDA Act, 2003 contains provisions relating to local content, the provisions are limited only to the creation of preference and reservation schemes, and it is only applicable to public procurements and considered at the end of the procurement process after all other evaluation criteria have been considered. There are no provisions in the PPDA Act guiding the procuring entity on how to procure forest products from sustainable sources, a harmonized and coordinated traceability system is also absent.

The combined effect of high deforestation of 92,000ha (MWE, 2016) and high consumption estimated at 360,000 m3 per year, equivalent to 1,440,000 m3 of round sawlogs at current sawing efficiency of 25% using the one man chainsaw (WWF, 2014) is resulting in an accelerated imbalance between national demand and supply of forest wood-based products. A 2014 study indicated that over 80% of the timber traded in the market was illegal causing an estimated annual financial loss of sh23b through unpaid taxes. The ENR CSOs Sector Performance Report (2019) notes that Uganda’s forest products market is characterized by low quality products because of lack of timber and forest products standards, in addition to poor technologies for wood processing. Most of the products are from illegal sources and therefore the prices are low.

As such, the sector is grappling with a number of challenges that should be addressed to streamline the procurement and trade of forest products in the country. The challenges include:

A lack of guidelines to regulate procurement of forest products by public institutions that should procure legal and/or certified forest products.
The failure to institutionalize forest trade among forestry institutions such as the Forestry Sector Support Department of the Min of Water and Environment, the National Forestry Authority and the District Forest Services), as a result, there is insufficient planning and products development across the country which has led to a lack of monitoring of forest industries across the country.
Continued insulation of environmental crime through the Environmental Police Protection Force that has failed to eliminate illegal timber from forest product hubs across the country.
Failure to utilize opportunities under the Buy-Uganda, Build-Uganda policy and pronouncements made by His Excellency the President demanding Uganda Ministries, Departments and Agencies to procure locally manufactured furniture.

Call to Action:
We call upon the Government agencies charged with managing forestry resources to:

Review the process by considering the clauses that regulate importation of forest products, limiting importation to only those that cannot be locally produced.
Review the forest policy and the law highlighting the importance of trade, its contribution to development and the need to use markets to control trade in illegal produce.
The mandate for forest trade development should be assigned to a specific institution with a fully-fledged institutional mandate to manage forest trade.
The PPDA law should provide for application of local content to all undertakings where public funds are used, and at every stage of the procurement process. The law should also consider products from responsibly managed and certified sources by responsible bodies.
Whereas the law talks about sustainable procurement, it is important to specify responsibly-managed forest products that is explicit and excludes illegal timber from the procurement process.
Any procurement requiring use of timber or other forest products should have evidence of legality and sustainable management of the product source with preference to certified forest sources. Procurement entities should demand for timber harmer marks and/or labelling by forest certification entities as part of the procedure.