Illegal Logging has a devastating impact on some of the world's most valuable remaining forests and the people that live in them and rely on the resources they provide. Its environmental effects include deforestation, the loss of biodiversity and the emission of green house gases. Its direct impacts on people include conflicts with indigenous and local populations, violence and human rights abuses, the fuelling of corruption and exacerbation of poverty. In some cases it has even funded armed conflict. Furthermore, it undermines the legitimacy of the forest sector and efforts of governments to implement sustainable forest management. The extent of illegal logging is difficult to assess. The World Bank estimates that governments worldwide lose between US$ 10-15 billion per year as a result of illegal logging – money that could be spent towards economic development of the countries. The EU FLEGT Action Plan provides a number of measures to exclude illegal timber from markets, to improve the supply of legal timber and to increase the demand for responsible wood products.
A key element of the FLEGT Action Plan is a voluntary scheme to ensure that only legally harvested timber is imported into the EU from countries agreeing to take part in this scheme. The internal EU legal framework for this scheme is a Regulation adopted in December 2005, and a 2008 Implementing Regulation, allowing for the control of the entry of timber to the EU from countries entering into bilateral FLEGT Voluntary Partnership Agreements (VPA) with the EU. Once agreed, the VPAs will include commitments and action from both parties to halt trade in illegal timber, notably with a license scheme to verify the legality of timber exported to the EU. The agreements also promote better enforcement of forest law and promote an inclusive approach involving civil society and the private sector.The European Commission has been given a mandate from the Council of Ministers of the EU to conduct negotiations in view of concluding such FLEGT VPAs. While the European Commission is leading in these negotiations, EU Member States play a key role in supporting the negotiations and implementation.