07-12-2012 - New paper by Duncan Brack of Chatham House, London and Alexandra C. Chandra and
Herjuno Kinasih of Trade Knowledge Network South East Asia. Available on the Chatham House illegal logging website:
http://illegal-logging.info/item_single.php?it_id=1334&it=document

The Australian government is currently legislating to exclude illegally logged timber from imports and from domestic processing. The proposals in the draft bill include: a prohibition on the import of all timber products containing illegally logged timber, and on the processing of domestically grown raw logs that have been
illegally harvested; a requirement on importers and processors to undertake due diligence to mitigate the risk of products containing illegally logged timber; and a comprehensive monitoring, investigation and enforcement regime to ensure compliance.

The proposed legislation has been criticized on the basis, among other things, that it conflicts with the disciplines of the World Trade Organization (WTO). Similar criticisms have, on occasion, been levelled at other consumer-country measures to exclude illegal timber from their markets, such as the European Union’s Forest Law Enforcement, Governance and Trade licensing scheme and Timber Regulation, or the
United States’ Lacey Act.

This paper explores whether the measures proposed in the Australian legislation are likely to be WTO-compatible, and concludes that they should be. The Australian government will need to be careful to ensure the legislation is designed and implemented in ways that do not afford protection to Australian products, and is as non-trade-restrictive as possible. Within those constraints, however, they should
not be inhibited from pressing ahead and introducing measures, similar to those being implemented in other consumer countries, to exclude illegal products from the market—and by so doing, improve sustainable development, protect the interests of companies playing by the rules and uphold the rule of law.