Indonesia has amplified its call for Australia to drop attempts at imposing restrictions on timber imports. Denny Lesmana, First Secretary for Economic Affairs at Indonesia’s embassy in Canberra, said he lamented Australia’s refusal to postpone the landmark timber trade bill. Sources: International Centre for Trade and Sustainable Development, BBC News, Australian Financial Review
Australia’s Illegal Logging Prohibition Bill passed the lower house last month, and is now to be debated by the senate. If approved, the law will ban the import or sale of wood products containing illegally logged timber.
Although the decision falls in line with similar legislation by the US and the EU to slow illegal logging Jakarta has called the move as a threat to its US$5 billion annual timber exports, claiming the law is poorly written.
Indonesia has also criticised Australia for failing to consult with them on the details of the bill. According to Lesmana, Australia’s move does “not take into account Indonesia’s own … controls on illegal logging.”
The bill would allow authorities to impose fines on companies that are found buying and selling wood that has been logged illegally. This comes in accordance with a requirement on importers and processors of raw logs to undertake due diligence to ensure the legal origins of their timber.
Critics say it can be difficult to distinguish between legal and illegal timber and wood.
Many companies say they are unwilling to rely solely on certificates as guarantees that their timber has been legally logged, stating that such documentation can be forged.
Indonesia says the requirement to verify all timber products will be expensive and complex for its timber exporters, leading the government to question whether the bill itself is WTO compatible.
It is in this requirement that Indonesia’s argument comes into play. Although the requirements of the bill would seek to discriminate between legal and illegal goods, if imports are treated differently than domestic products this could be a violation of GATT Article III.
Additionally, if the bill were to impose stricter restrictions on countries with notoriously high levels of illegal logging, this could come into conflict with GATT Article I.
Despite these issues, the legislation has enjoyed continued domestic support from both of Australia’s major political parties, unions, and major timber sellers alike.
