China introduces new law to safeguard forests and improve governance

On 1 July, China’s newly amended forest law came into effect, marking the first revision of the law in over twenty years.

The law comes with a number of significant improvements, aiming to better protect China’s forest resources, promote sustainable development and contribute to the national policy of building an ecological civilisation.

Key changes to the law

The amended forest law has several new components.

For one, it clarifies forest ownership in China and defines the legitimate rights and interests of the owners, which are the state, the collective (groups) and individuals. As part of this, it allows rights for use of the forests, trees and woodlands to be transferred, leased and valued as investment capital.

It also emphasises forest protection. By categorising forests as for either public benefit or commercial use, it allows for the adoption of different management measures. Further to this, it strictly controls logging of natural forests in the country and limits the annual harvest volume with permits and specific regulations.

More importantly, the amended forest law includes a ban on buying, transporting, and/or processing illegally sourced timber, and requires processing companies to establish a data record of raw materials and products (Article 65).

Establishing a ledger management system by law to record input and output of raw materials and timber products can be an effective way to identify timber sources. This system should also be applicable for timber imported into China, and has significant impact on traceability. A further step should be explored along the timber supply chain, especially on due diligence obligations.

While the law stipulates that “no operator or individual may knowingly purchase, process, or transport timber of illegal sources,” it has clear ambiguity and thus leaves a loophole if an operator claims lack of knowledge. Strong enforcement is therefore very important, and an implementable due diligence system is urgently needed.

Towards better timber governance

While the scope of the forest law is within China’s territory, the potential implications of Article 65 could be substantial and far-reaching if implemented effectively. China is the top timber importer and consumer in the world, but many countries that supply the Chinese market with timber and forest products are at high risk of illegal timber harvesting and broader forest conversion due to poor governance.

As a result, export‐oriented enterprises in China are facing pressure from international markets where more and more countries have legislation in place requiring imports of only legally‐harvested timber. Chinese timber companies themselves are increasingly vocal about the support they need to ensure their products meet the requirements of international buyers who need to comply with timber regulations.

Alongside the new law, if China takes practical and effective measures to ensure that only legally sourced timber and timber products enter the country, it can greatly contribute to legal timber trade worldwide. In taking decisive action to combat illegal logging and to protect global natural resources, China would also be supporting climate change mitigation and the preservation of the world’s biodiversity hotspots.

It is yet to be seen how the amended law will be implemented, as more detailed judicial interpretations and additional measures for some of the articles are expected in the coming months. Nonetheless, the new law is a positive step towards safeguarding forests and improving forest governance – with implications for not only China but also worldwide.

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