Introduction and status update

The Malaysia-EU Voluntary Partnership Agreement

This introduction and status update document provides information on the Malaysia-EU Voluntary Partnership Agreement, which aims to address illegal logging, improve forest governance and promote trade in legal timber products. 

Quick read

  • Illegal logging creates social problems, environmental degradation and loss of economic opportunities.
  • In January 2007, Malaysia and the EU began negotiating a Voluntary Partnership Agreement (VPA) to promote trade in legal timber products and improve forest governance.
  • Under a VPA, Malaysia would develop a timber legality assurance system and implement legal and governance reforms identified by stakeholders.
  • The negotiation process has encountered obstacles that are yet to be overcome.
  • These include the challenge of ensuring the VPA covers not only Peninsular Malaysia and the state of Sabah but also Sarawak.

What is a VPA?

A Voluntary Partnership Agreement (VPA) is a legally binding trade agreement between the EU and a timber-exporting country outside the EU. A VPA aims to ensure that all timber and timber products destined for the EU market from a partner country comply with the laws of that country.

In addition to promoting trade in legal timber, VPAs address the underlying causes of illegality: weak forest governance. A major strength of VPAs is that they look beyond trade to consider development and environmental issues.

Stakeholders in government, the private sector and civil society develop VPAs through participatory processes. A VPA is, therefore, a vehicle for addressing the needs of different stakeholders and for including many people who have never before had a voice in decision-making.

VPAs are a key component of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan of 2003. Malaysia is one of several tropical countries that are negotiating VPAs with the EU. Six countries have ratified VPAs and are implementing the agreements.

Key elements of a VPA

Key elements of a VPA are described in its main text and annexes. In countries where VPAs have already been signed, these include:

  • A timber legality assurance system to verify that timber products are legal and can be issued with FLEGT licences
  • Commitments to legal reforms, public disclosure of information and other improvements to forest governance
  • A framework for overseeing, monitoring and evaluating implementation of the VPA and its economic, social and environmental impacts.

Status of the Malaysia-EU VPA negotiations

Malaysia and the EU began negotiating the VPA in January 2007. Progress has been slow and negotiations have been stalled for some time, although some discussions took place in 2014 and 2015.

While Malaysia’s national VPA process has engaged relevant government ministries, the private sector and some civil society groups, other civil society representatives and indigenous peoples have raised concerns about their ability to influence the process. Full stakeholder engagement remains a challenge.

In Malaysia’s political system, the states of Sarawak and Sabah have considerable autonomy from the seat of the federal government in Peninsular Malaysia. Land and forestry fall under jurisdiction of the individual states. This means, in effect, that the VPA negotiations need to bring together three separate timber legality assurance systems.

However, Sarawak’s forestry and timber related agencies and especially the key players in the timber industry continue to have strong reservations about the VPA negotiations. Sarawak has independently developed a Sarawak Timber Legality Verification System (STLVS) to meet market requirements outside of the VPA context.

Without a cohesive and integrated national approach towards the negotiations, it will be difficult for the VPA talks to resume.