Legal framework for forest management and timber trade of Liberia

Forest governance

The Forestry Development Authority (FDA) is the national authority responsible for the sustainable management and conservation of Liberia’s forest resources, which includes management of the forest policy, the forest legislative framework and the enforcement of forest laws. This mandate was further strengthened through the National Resource Law of 1979. FDA governance relies on a Managing Director and a Board of Directors appointed by the Liberia’s President. Main FDA departments: Commercial, Community, Conservation, Legality Verification, and R&D Departments. Main FDA divisions: Administration & Finance, Law Enforcement, and Public Affairs Divisions. FDA units include the REDD+ implementing and Strategic Planning Units.

The Environmental Protection Agency (EPA) is responsible to supervise, monitor and coordinate all activities that impact the environment (soils, water, biodiversity, land uses), also overseeing conservation areas, and coordinating e.g. wildlife issues, mainly through an Environmental & Social Impact Assessment (ESIA).

Other ministries involved include: Finance & Development Planning (MFDP) and its Liberia Revenue Authority (LRA) that covers Tax and Customs, Agriculture (MoA), Commerce and Industry (MoCI), Justice (MoJ), and Labour (MoL).

The framework for assessing legality of forestry operations, timber processing and trade in Liberia that has been retained as part of the VPA between Liberia and the EU is the Legality matrix.

The 2006 National Forestry Reform Law (NFRL 2006) is the current legal instrument that guides the management of forest resources in Liberia. It is based on the “3Cs” approach: Commercial, Community and Conservation forestry.

Other important laws and regulations include:

• FDA Ten Core Regulations 101-07 to 110-07 (2007)
• Guidelines for Forest Management Planning in Liberia’ (2009)
• Community Rights Law (CRL) (2009)
• LVD Manual of Procedures (2016)
• Code of Forest Harvesting Practices (CFHP) (amended in 2017)
• Community Rights Regulations (amended in 2017)
• Abandoned Logs, Timber and Timber Products (2017)
• Third Party Access to Forest Resource License Areas (2017)
• Confiscated Logs, Timber and Timber Products (2017)
• Sustainable Wood-based Biomass Energy Production and Marketing in Liberia (2017)

Other regulations and guidelines that are in the process of being developed or amended and approved (and eventually added to a revised Legality matrix) include:

• Import Logs, Timber and Timber Products
• Transit Logs, Timber and Timber Products
• Guidelines for Plantation Forests
• Community Rights Regulations
• Chainsaw Milling Regulation, and Charcoal Regulation
• Regulations on Timber Processing, Penalties, Access to Timber Resource Wastes/Residues, EIA, Fiscal Policy and Bid Premium Payments, Complaints, etc.

Legal rights to harvest

The NFRL 2006 provides for the issuance of five types of licenses by the FDA to carry out activities over forested land, as follows:

• Forest Management Contract (FMC): a license issued for forest exploitation over land areas between 50’000 and 400’000 ha that excludes private land, generally for a period of 25 years;
• Timber Sales Contract (TSC): license issued over a land area of not more than 5’000 ha that excludes private land, for a (renewable) period of 3 years;
• Forest Use Permit (FUP): a license issued for small scale forest exploitation (and limited to local use), research, NTFP activities or other special uses on an area of less than 1’000 ha, and without a concession process for a value of less than 10’000 USD;
• Private Use Permit (PUP): a license that is issued to private land owners (individual, group, community) to extract wood to enter into contracts directly with logging companies. PUPs covered up to approximately 30% of Liberia’s forests between 2011 and 2012. Because of massive mismanagement of the PUPs, however, a (temporary) presidential moratorium was declared on the issuance of PUPs (01/2013) and all existing PUPs were cancelled. Nothing would in fact prevent new PUPs to be lawfully issued.
• Community Forest Management Agreement (CFMA): license issued to communities for the purpose of community-based forest management over an area smaller than 50’000 ha, to enter into small-scale commercial contracts for harvesting timber and non-timber forest products. However, the Community Rights Law (CRL) allows for CFMAs to exceed 50’000 ha, in which case the contracting of a logging company must follow a public bidding process and must be signed by the President and ratified by the Parliament, as is the case for FMCs.

Contract holders need to comply with all major requirements under the Public Procurement and Concession Act (PPCA) in order to obtain the contract, including tax clearance, an annual business registration certificate, and a prequalification certificate. The FMC also includes: socio-economic survey, forest inventory and environmental survey. FMCs and TSCs can be obtained via tender. The contract to use or harvest forest resources is then signed between the contract holder and the FDA. Public information on forest contracts can be found on LEITI’s website.

Pre-felling requirements listed by the FDA for export permit include:

1. Boundary line demarcation
2. Social agreement
3. Environmental and social impact assessment
4. Performance bond
5. Strategic forest management plan (SFMP)
6. Five years forest management plan (5YFMP), which is the compartment plan
7. Annual operation plan (AOP)
8. Annual coupe demarcation
9. Tax clearance; and proof of payment of Area fee and Annual Administration Fee.

The contract holder must uniquely number, label (tree ID tag) and record all trees above 50 cm DBH (Diameter at Breast Height) on a Stock Survey Form (SSF) and a Block map. These are verified by the Legality Verification Department (LVD) of the FDA when new blocks are submitted for inspection. All trees above Diameter Cut Limits (DCLs) in harvestable species and outside exclusion areas (like streams and slopes, as defined by the CFHP) will be approved for felling by the FDA. The logging company may decide which trees it eventually wants to fell for its market.

Until October 2018 the LVD was operated and its capacity and (Chain of Custody) CoC Information System (COCIS, known as LiberTrace) developed, to be eventually transferred to FDA/LVD, by SGS (Société Générale de Surveillance SA). As of October 2019, following initial extensions, the handover was almost complete. For a new extension period until February 2021, though, SGS Liberia will continue providing hosting and maintenance for the LiberTrace system and will keep an evaluation role for the Export permits processed by the LVD. SGS countersigns the Export permits that it finds acceptable with regards to the requirements currently enforced for export permitting.

Contract holders are only allowed to fell trees when they are in the possession of a valid Annual Harvesting Certificate (AHC). This certificate can only be obtained after the contract holder has, among others, obtained an approved Annual Operation Plan (AOP) in addition to, for FMCs, an approved 5 Years’ Management Plan covering the area to be harvested, and a signed Social Agreement. The AOP shall specify the volume and species of the annual coupe, or the annual blocks of harvest, in case of FMCs.

Taxes and fees

Taxes and fees include, where relevant and applicable:

• Auction Fee, Bid Premium, Land Rental Bid Fee, Sawmill Permit Fee, Timber Export License Fee, Chainsaw Lumber Fee
• Area Fee, Chain of Custody Registration Fee, Annual Contract Administration Fee, Annual Coupe/ Block Inspection Fee, Barcode Issuance Fee, Block Inspection Fee, Stumpage Fee, Forest Product Fee
• Waybill Fee, Log and wood product export fee

Taxes and fees in the last two groups are invoiced by the LVD using LiberTrace. An Export Permit can only be issued when all taxes and fees relating to the forest products subject to the permit have been paid. The Tax Clearance Certificate (TCC) issued by the Liberian Revenue Authority (LRA) certifies that the timber operator has complied with all known tax requirements with the government (or has reached an agreement to defer/waive tax obligations), with the notable exception of forestry-related taxes and fees, since these are under FDA control (LRA source). The TCC is presented to qualify an Operator for signing forest contracts, for the AHC, and for an Export Permit.

Timber harvesting activities

Felling requirements listed by FDA for Export Permit include, for the respective export products:

1. Tax clearance; barcode issuance fee, block inspection fee
2. Annual Harvesting Certificate (AHC)
3. Tree (at inventory stage) and log ID tag issuance
4. Verification of Stock Survey Form (SSF)/ Tree Data Form (TDF).

Once the Inventory and Annual Coupe have been validated by LVD, and the AHC issued by the FDA NAD (National Authorizing Division), the Contract Holder is permitted to commence harvesting at the locations indicated on the Block map. The tree tag must remain on the stump, and a new log tag is affixed to the butt end of the long/“mother” log. Details of the harvested trees are recorded on a felled Tree Data Form (TDF) (a.k.a. “Felling Registration Form”, that will then be uploaded to LiberTrace). For each tree, the TDF is completed at the stump prior to trimming the felled tree into an initial long log; it includes: tree and log tag nos., species and dimensions.

Once the corresponding trees have been felled, and the long logs labelled and measured, and the TDFs filled in, the Logging Operator can extract the long logs to the log landing in the forest. After cross-cutting, each crosscut log receives a new ID tag, for all logs to then be traceable back to the stump or location (block, cell) where the tree grew. The logs are recorded on a Log Data Form (LDF) a.k.a. “Cross-cut Form” for uploading to LiberTrace. The logs are prepared for transport with the help of Waybills. Special felling and Special entry forms are used under particular circumstances.

Third parties’ rights

FMC and TSC holding companies sign Social Agreements (SAs) with affected communities within 3.0 km following advanced notice. A SA attested to by the FDA is a pre-felling requirement and a condition for an AHC and an Export permit. A SA includes: code of conduct for the parties; dispute resolution mechanism; financial benefits payable to the community through quarterly payments to an escrow account. As part of implementing these SAs, a National Benefit Sharing Trust mechanism has been established to oversee the disbursements (cubic meter fee) to forest-affected communities and community projects.

Community Forest Management Agreements (CFMAs) allow communities to enter into contracts with logging companies for the purpose of community-based forest management. The new ‘Land Rights Act’ (09/2018) now recognizes customary land rights and includes important provisions on e.g. Free Prior and Informed Consent (FPIC). A regulation on ‘Third Party Access to Forest Resource License Areas’ (2017) is also in force.

Trade and transport

The COC System (COCS) of the LVD (which includes COCIS management, CoC inspections and legality verification and audits) is used to facilitate the verification of the three pillars for Export Permit Request (EPR) approval: Traceability, Legality and Fiscality, throughout the supply chain. The verification system is described in the LVD Manual of Procedures (2016) that contains the Liberia COCS Standard Operating Procedures (SOPs).

Post-felling requirements listed by FDA for export permit include:

1. Stump verification
2. LDF (Log Data Form)
3. Transportation and Waybill checks
4. EPR/LDF submission
5. Log yard verification
6. Shipment specification (SPEC)
7. Shipment verification
8. Certificate of origin (COO)
9. Verification of taxes/fees paid

Waybill booklets having a unique barcode for identification are issued to concession holders against a fee. For transport, a waybill form is completed, including barcode, species and dimensions, as well as official barcoded stickers and references to the bar-coded tag numbers of the wood products of the load. These waybills can be checked in the forest concessions while loading, at checkpoints during transportation and at the log yard while unloading, by FDA and the LVD. Relevant SOP: 14.

Facilities mechanically processing the wood (sawmills) need to be in the possession of an annual Sawmill Permit. The sawmill receiving the logs keeps records of all wood raw materials entering the site (Sawmill Input Form), as well as records of stock, processing and exit of processed products (Sawmill Output Form). Processed products are labelled with official barcoded PVC labels. The details of inputs and outputs of the processing facility are uploaded in the COCIS. Relevant SOP: 20.

The COCIS is also used for the recording of exports of logs, timber and other wood products. Exporters of these products shall be in the possession of an Annual export registration in the first place. Upon successful LDF verification through log inspection in the log yard and against TDF & SSF before exportation, the logs can be submitted for issuance of an Export Permit, accompanied by an Export shipment specification (SPEC) listing the products and, upon request, issuance of a Certificate of Origin (COO) to the Operator. Export permits (EPs) are issued to exports that comply with the official “Requirements for Export Permit under Current regime” listed by the FDA, representing a set of minimum requirements for “legal exports” from Liberia that needs to be compared to EUTR requirements and is an interim measure prior to full implementation of FLEGT Licenses. The actual Shipment verification is done through an inspection of the logs while loading onto the ship. Relevant SOPs: 22, 23, and 26. The Operator must also have provided a Tax Clearance Certificate as proof of payment of export fees and other taxes.

A Certificate of origin (COO) is issued for certain export markets following the loading inspection, subject to receipt by LVD of the Bill of Lading (B/L) and a Short-shipped report. Relevant SOP: 25.