Germany, provides EUR 20 million for enhanced forest management and conservation in Laos

The German Federal Ministry for Economic Cooperation and Development (BMZ), KfW Development Bank is providing around EUR 20 million to support the reform of the Laos’ forest sector.
The Lao government contributes around EUR 4 million as non-cash benefits to the project.
The implementation of the Forest Law Enforcement, Governance and Trade - Financial Cooperation project (FLEGT-FC) was recently agreed with the Lao government.

On December 17, Deputy Minister of the Ministry of Planning and Investment (MPI) Dr Kikeo Chanthaboury, and Deputy Minister of Agriculture and Forestry (MAF) Mr Thongphat Vongmany, and Director of KfW Development Bank in the Lao PDR Mr Jan Wiegelmann, signed the Grant and Separate Agreements for around EUR 20 million in Vientiane.
The project will start the implementation in 2021 and will be completed in 2026. The project is implemented by the both MAF and MPI with the technical support from an international consultant company.
The EU FLEGT Action Plan is an initiative of the European Union, which is currently being implemented in nine countries worldwide based on Voluntary Partnership Agreements (VPAs) - since 2017 the EU is negotiating with Laos as well.
The Ministry of Agriculture and Forestry is leading the negotiations with the EU with support of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on behalf of the BMZ. The FLEGT FC will follow up with the implementation - a good example of the close integration of German commitments in Laos.
Even though large parts of Laos are still covered with forest today, the quality of the forest has deteriorated significantly: The reason for the rapid decline is not only large infrastructure projects but also illegal logging, which is fueled in particular by insufficient coordination and communication between stakeholders and legal uncertainties.
The forest sector is of great importance both for the Lao economy (especially the wood-processing industry) and for preserving biodiversity and reducing poverty. Illegal logging can have devastating effects on the rural population, who still thrive from the products of the forest in many places in Laos.
Nevertheless, wooden products from illegal timber or timber from unknown sources are often unconsciously purchased by consumers and companies, Germany included.
The challenge is therefore to combat the root causes of illegality, which includes intransparent systems, lack of clarity about land rights and lack of transparency in the supply chain - Laos’ forestry sector and wood-processing industry is suffering as a result.
This is where the FLEGT-FC project comes into play, offering financial support to the Lao government in order to implement the reform efforts of the forestry sector in a consistent and sustainable manner, as timber and wooden products with a FLEGT license will be considered legal in the future, provided they are verified in accordance with FLEGT requirements.

By Times Reporters
(Latest Update December 23, 2020)