ANNEX I - Description of The Action

Supporting participation of national civil society organisations
and private sector federations/entities in FLEGT VPA related

activities
- Vietnam component ACTION
Increasing capacity of CSOs and SMEs to implement FLEGT

requirements
Contract number: DCI-ENV/2013/316-088
ANNEX I - Description of the Action
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Table of content
DESCRIPTION OF THE ACTION ............................................................................................ 3
1.
Description .....................................................................................................................................3
2.
Description of Project Activities ....................................................................................................6
3.
Methodology ................................................................................................................................16
4.
Duration and indicative action plan for implementing the action ................................................20
5.
Sustainability of the action ...........................................................................................................23
6.
Logical Framework ......................................................................................................................27
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DESCRIPTION OF THE ACTION
1. DESCRIPTION
The Timber Legality Assurance System (TLAS), which is a requirement of the Voluntary Partnership
Agreement (VPA) signed by each participating country, is, in reality, the heart of the FLEGT
Regulation the European Unions primary measure for tackling illegal logging in the worlds forests.
The TLAS is what actually turns the VPA from a paper-based agreement into a functional, verifiable
system for ensuring legal sources of wood. According to the EU FLEGT Facility:
VPAs ensure through Legality Assurance Systems that timber being exported to the EU is legally
produced. The legal source and production of wood will be verified by the partner country, which
will award a FLEGT license to each consignment that is verified as legal. Once the LAS is in
place and has successfully passed an independent evaluation, the EU will only accept FLEGT
licensed timber from that country. The European Commission and EU Member States provide
support to help implement such systems. http://www.euflegt.efi.int/portal/home/vpas/the_goal/
In addition to the FLEGT Regulation, the EU Timber Regulation (EUTR) is the other key piece of
legislation that makes up the overall FLEGT Action Plan1. The EUTR requires companies who place
timber products for sale on the EU market to conduct due diligence to ensure that the timber does not
come from illegal sources.
Therefore, the functionality, implementation and uptake of the TLAS by timber products producers
and exporters, in a manner that ensures importers in the EU can meet EUTR requirements, is critical to
achieving the objectives of the VPA process and overall FLEGT Action Plan.
The overall objective of the project is to encourage the participation of civil society organisations and
the private sector in the FLEGT process by strengthening the capacity of intermediary organisations
(i.e., industry associations, NGOs, heads of wood processing villages, private consultants, etc.) that
work with hard to reach stakeholders (i.e., SMEs) in the Vietnamese timber industry.
The specific objective of the project aims to increase the capability of SMEs to implement systems
that allow them to comply with FLEGT legality requirements, by strengthening the capacity of the
intermediary organisations that work with them.
These objectives will be achieved by:
Capacity development and training of 15 intermediary organisations (approximately 50-75

people) in how to implement risk mitigation and conduct due diligence according to FLEGT
legality requirements. Intermediary organisations will, in turn, train approximately 300-500
SMEs in how to implement the system.
Implementation of an awareness-raising campaign that reaches 300-500 hard to reach

stakeholders (i.e., SMEs) directly, and thousands more indirectly, to make them aware of TLAS
requirements as well as the project results, including a toolkit for legality risk mitigation
designed specifically for Vietnamese companies.
Specific Expected Results

1) Increased ability of SMEs to implement FLEGT legality requirements by strengthening the
capacity of 15 relevant intermediary organisations (50-75 people).
1
http://ec.europa.eu/environment/forests/illegal_logging.htm
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Sub-result 1.1 - The activities in 1.1 aim to increase the implementation of legality requirements
by hard to reach stakeholders in the private sector (SMEs) by ensuring important stakeholders and
members of the target group (industry intermediary organisations) agree to the project and support
its implementation. The direct results are that the project concept is finalized and accepted by all
major stakeholders, and a minimum of 15 intermediary organisations are committed to
implementation of the project activities, and 20-25 SMEs commit to conducting pilot field tests of
the toolkit.
Sub-result 1.2 The activities in 1.2 aim to support implementation of the VPA process by the
private sector by enabling them to more easily identify legality risks in the supply chain in
Vietnam. The result is reached by conducting an assessment of specific legality risks in countries
exporting to Vietnam for further processing, taking into account existing legality verification
systems and certification systems which aim to secure the legality of timber. The direct result is a
risk assessment and risk mitigation framework for Vietnam and desk risk assessments for 5 key
import countries, including an evaluation of any legality verification and certification systems in
place that may comply with both TLAS and EUTR requirements. In addition, a supply chain
mapping tool will be developed, and the supply chain for Vietnamese SMEs will be mapped.
Sub-result 1.3 - The activities in 1.3 aim to increase the implementation of FLEGT legality
requirements through SMEs in Vietnam by development of a toolkit for legality risk mitigation.
The toolkit is made up of a set of guidance documents, background information on supply chain
risks, and background material and checklists for evaluation of different legality verification and
certification systems. The direct result is a toolkit for risk mitigation that allows SMEs in Vietnam
to mitigate risk of illegal timber entering the supply chain down to a negligible level, including
tools and guidance that help companies to handle a mix of sourcing from different systems.
Sub-result 1.4 The activities in 1.4 aim to increase the participation of hard to reach stakeholders
in the private sector in implementation of FLEGT legality requirements by developing the
capacity of intermediary organisations that work directly with SMEs, and monitoring them in
passing knowledge and training on to SMEs. The direct result is training of 50-75 experts from
intermediary organisations; the risk mitigation toolkit is pilot tested on 20-25 Vietnamese SMEs
through an on-site evaluation that shows their understanding and proper implementation of due
diligence and risk mitigation; and implementation and monitoring plans are developed with each
participating intermediary organisation in how they will pass this expert knowledge on to SMEs
and help them to use the toolkit for effective implementation of due diligence and legality risk
mitigation.
2) Increased awareness of 300-500 hard to reach stakeholders (i.e., SMEs) regarding effective
implementation of FLEGT requirements
Sub-result 2.1 The activities in 2.1 aim to increase awareness of hard to reach stakeholders in the
private sector (i.e., SMEs) of TLAS requirements through an awareness raising campaign. Hard
to reach stakeholders are defined as SMEs that are organised into hundreds of wood processing
villages which may each contain many small family-owned businesses that are typically not in
direct contact with their customers nor governmental authorities in Vietnam.
The direct results are: an awareness raising campaign that directly reaches 300-500 SMEs
through targeted information distributed by intermediary organisations, while thousands more are
reached indirectly through a media campaign.
3) Project outputs and results are widely disseminated and make best possible use of funding
resources.
Sub-result 3.1 - The activities in 3.1 aim to ensure best possible use of funding resources by
ensuring that project results and impacts are effective, sustainable, replicable, and receive the
broadest possible dissemination. The direct results are: a project dissemination approach
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including a defined and written communications and visibility plan, to ensure project outreach
and implementation of the European Commissions Communication and Visibility Manual for EU
External Actions.
Improvements for Target Groups and Beneficiaries:
Target Groups
Intermediary organisations (NGOs, industry associations, heads of the wood processing villages,
consultants, etc.) that work with SMEs in Vietnam are the target group of the proposed project. They
will benefit from increased capacity through the training activities included in the project that will
teach them how to work with their stakeholders (i.e., SMEs) in order to implement systems that
effectively ensure legal sources of wood in the Vietnamese supply chain. Specifically, the target group
will benefit from the development of a tested system for tracing and verifying legal sources, which
includes all background information on supply chain risks specific to Vietnam, compatibility with
other types of legality verification and certification systems, and tool-kit materials which are ready
and packaged to pass on to their SME stakeholders and clients.
Final Beneficiaries
Wood processing and timber trading SMEs in Vietnam
The primary beneficiary of the proposed action is wood processing and timber trading SMEs in
Vietnam, many of whom are organised into hundreds of wood processing villages which, while they
each contain many small family-owned businesses, combine to make up a significant percentage of
wood that is exported from Vietnam into the EU and other primary consumer markets. Currently this
group suffers from limited resources for considering new requirements of wood legality (most likely, a
complete lack of awareness about FLEGT, TLAS and the EUTR).
The SMEs do not have the means to individually develop tools to adequately address requests from
international clients and suppliers. This action will improve the situation of SMEs by ensuring their
ability to fulfil new documentation requirements regarding timber legality through training in and
implementation of a set of guidance documents and tools that will be developed specifically for them.
They will benefit from the development of a pilot-tested system for tracing and verifying legal sources
of wood that will allow Vietnamese timber products companies to meet the FLEGT requirements,
including TLAS and EUTR. Intermediary organisations and key suppliers/exporters are likely to play
an important role in adapting new procedures and support single SMEs.
In terms of economic development, SMEs will become more competitive in an environment that
increasingly favours corporations with sufficient resources to accommodate the markets increasing
demands for documentation and assurance. As markets tighten their gates to exclude illegal timber,
there is a risk that small and medium enterprises will be excluded, while larger companies will reap
the benefit of being able to build in-house competence and customised systems in order to comply
with the new demands. The proposed project addresses this risk of growing inequality by increasing
the capacity of intermediary organisations, which will, in turn, pass this capacity on to their SME
stakeholders.
The European Commission, Vietnamese Authorities and other government agencies that have already
invested billions of Euros in the VPA process, as well as in better forest governance efforts in general,
will benefit from the increased capacity of companies to implement due diligence and ensure legal
sources of timber in their supply chains.
Vietnamese Society will receive economic benefits from increased competitiveness in the international
marketplace, particularly the EU. Wood products exports constitute a significant part of the
Vietnamese economy, estimated to be $4.3 billion in 2012 and are growing at an astounding 22 % per
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year 2. Ensuring that Vietnamese companies can meet new timber legality regulations in the EU market
(as well other top export markets with timber legality legislation in place, such as the U.S. and
Australia) will be critical to ensuring the vitality of this economically important industry, as well
ensuring their successful inclusion in the VPA process.
Global society at large will gain environmental benefits in terms of keeping valuable forests intact. If
wood from tropical forests cannot be traded with proper documentation and licenses intact, such as
FLEGT, it will be devalued in the marketplace and ecologically valuable forestland will likely be
converted to other uses that are more financially beneficial to the owners (such as agriculture).
Tropical forests represent some of the most important ecological and bio diverse places on earth, and
provide valuable carbon storage functions (up to 17% of global carbon emissions are estimated to be
the result of forest degradation.) Yet forests and particularly tropical forests - are at constant risk of
being illegally logged due to the market value of the timber. While initiatives such as FLEGT and the
EUTR aim to combat illegal logging, there is a significant risk that these regulations will not achieve
their intended effects. This could be the case if the land is devalued and converted to other purposes
because companies trading in timber do not have the capacity to deal with legality requirements and,
as a consequence, wooden products are exported to other markets than the EU with less strict
requirements.
2. DESCRIPTION OF PROJECT ACTIVITIES

RESULT 1: INCREASED ABILITY OF SMES TO IMPLEMENT FLEGT LEGALITY REQUIREMENTS BY
STRENGTHENING THE CAPACITY OF 15 RELEVANT INTERMEDIARY ORGANISATIONS (50-75
PEOPLE).
1.1 Engage the target group, key stakeholders, and SMEs.
The target group (i.e., intermediary organisations) will be selected based on the following criteria:
That they have contact to EU companies and/or associations,
They have sufficient capacity to participate meaningfully in the training workshops and are
willing to set aside resources to maintain capacity in this area
They are willing to commit to being active in the project, setting aside resources to pass
knowledge and training on to their SME clients/members/stakeholders.
1.1.1 Identify and engage key stakeholders and the target group. (Implementing partner:
SFMI) The objective of this activity is to ensure that important stakeholders and target groups are
informed of and engaged in the project in order to ensure best possible support to reach the
expected results.
The activity includes the following tasks:
1.1.1.1 Kick-off meeting for key stakeholders and target group: Project concept is elaborated
and a kick-off meeting is held to communicate the concept and give opportunity for comments
and improvements by the target group (intermediary organisations) and other key
stakeholders, including authorities that are working on the VPA process in Vietnam. Up to 75
participants are expected in total, with a goal of confirming the project concept and supporting
the action plan for companies to support the project. Key issues are identified for consultation
with the Advisory Committee which consists of 5-10 representatives from the target group
(intermediary organisations), beneficiaries (SMEs), and other key stakeholders. This is needed
to ensure the correct and best representatives are organised and supporting the project concept
in order to ensure maximum impact on expected results.
2
http://vietnamnews.vn/Economy/233919/wood-industry-urged-to-reform.html
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1.1.1.2 Identify and secure involvement of intermediary organisations: Through contacts

gained at the kick-off meeting, individual meetings are held with key intermediary
organisations in Vietnam that have contact with and communications channels to wood
processing companies, such as trade associations, NGOs, provincial timber trade federations,
leaders from local wood processing villages, and private consultants, to secure their formal
engagement in the project by signing a letter of commitment. This activity is needed to
identify target group members whom are in contact with hard to reach stakeholders in the
private sector (SMEs), ensure that they understand the goals of the project and what is
required of them, and secure their formal commitment to participate in the project. It is
expected that 15 intermediary organisations will commitment to full participation in the
project.
1.1.2 Secure commitment of SMEs to participate in pilot tests. (Implementing partner: SFMI)
The objective of this activity is to provide information about the project to a selected group of hard
to reach stakeholders in the private sector (SMEs) and secure their formal commitment to
participate in a pilot test of the legality risk mitigation toolkit that is developed by the project.
The beneficiaries (i.e., Vietnamese SMEs) participating in the pilot tests will be identified based
on established relationships with one of the intermediary organisations. In addition, they will also
be selected based on the following criteria:
1. They export products to clients in the EU or are sub-suppliers for bigger companies which
export wooden products to the EU.
2. They have not started a process of actively addressing FLEGT issues and appear not to
have the capacity to implement adequate procedures without the support of the project.
3. At the same time they are positive towards the project goals and are willing to agree in
writing to a cooperation where sufficient resources to implement the tools developed by
the project are allocated from their side.
1.1.2.1 A select group of SMEs are identified by members of the target group as possible pilot
test participants. An informational meeting is held with each selected SME to ensure that they
understand the objective of the project, and secure their commitment and willingness to
provide necessary supply chain information, as well as to participate in a pilot test of the risk
mitigation system. This activity is necessary to ensure that the tools and systems developed by
the project can be pilot-tested by actual SMEs whom are working toward implementation of
TLAS requirements. SMEs will be expected to sign a letter of commitment to be involved in
the project. Approximately 20-25 SMEs will participate in pilot-test activities.
Justification and efficiency to achieve Result 1 via Activity 1.1: Ownership of true motivation by the
target group, beneficiaries and other stakeholders is extremely important to achieving the result of this
activity. The overall project objective will only be achieved if the right target group members are
identified and willing to participate, and SMEs are willing to test the risk mitigation toolkit developed
by the project to ensure that it will work in practice.
Implementation by partner: SFMI will have main responsibility to identify and engage Vietnamese
stakeholders.
1.2 Identify legality risks in the supply chain in Vietnam.
1.2.1 Analyse and produce a summary of countries, species, product types, and legality
verification status for wood imported into Vietnam. (Implementing partner: NEPCon) The
objective of this activity is to make assessments of legality risks of illegal timber available to
Vietnamese companies in order for them to fulfil due diligence requirements. Assessments of
country specific legality risks and application of corresponding risk assessment tools will result in
less import of illegal timber from 3rd countries into the Vietnamese supply chain. Five countries,
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which represent the highest risks of illegal export and large amounts of timber supply to Vietnam,
will be selected for completion of a national risk assessment. Risk assessments will be conducted
using the TLAS adopted by Vietnam (or latest draft version, if the TLAS is not yet adopted), as
well as EUTR requirements, for establishing a framework of risk factors that need to be assessed.
This activity includes the following tasks:
1.2.1.1 Conduct desk assessments regarding national level risk from the top 5 countries that
export wood into Vietnam, based on information identified and made available by
stakeholders and the target group. The work includes classifying key countries where products
are imported from according to FLEGT/VPA status; countries selling FLEGT licensed timber;
countries negotiating a VPA; and countries not in the process of a VPA. Although general
indications are that Laos, Cambodia, Malaysia, China and Thailand probably pose the biggest
legality risks to the Vietnamese supply chain, this activity will help to specify those risks.
1.2.1.2 Establish a framework for evaluating and mitigating legality risk within Vietnam. Such
a framework will include: evaluation of applicable legislation and the risk of non-compliance.
The field work includes interviews and meetings with relevant stakeholders, visits to logging
sites and consultations with authorities and independent NGOs.
1.2.1.3 Conduct an evaluation of other types of legality verification and certification systems
to assess compatibility with the TLAS requirements of Vietnam and the 5 selected exporting
countries. Other existing verification and certifications systems are likely to already be in use
(such as FSC or PEFC certification, Verification of Legal Compliance (VLC), etc.). The
criteria and requests for forest management and trade will be analysed and compared to those
requirements included in TLAS and EUTR.
Most certification and verification schemes including FSC and PEFC have been undergoing
rapid development in recent months, partly in order to align with the EUTR and FLEGT. The
result will be a list of systems that are evaluated to meet TLAS and EUTR requirements, as
well as a list of specific gaps in the requirements of other systems. This will be used as the
basis to address those issues when products are imported into Vietnam are covered by systems
that document compliance with some, but not all legality requirements.
1.2.2 Map supply chains. (Implementing partner: SFMI) The objective of this activity is to map
the supply chains, from point of import to export. This will be done for those SMEs which are
registered as being committed to the project, and represent a cross-section of usual supply chains
in Vietnam.
1.2.2.1 Develop a supply chain mapping tool which defines how supply is registered and
related information can be documented. It will be a priority to clarify methods to structure and
categorize the information obtained to provide useful conclusions for the project.
1.2.2.2 Compile and register information on supply chain complexity. The goal is to provide
maps which clarify how supply enters Vietnam and which main actors are involved in the
trade inside and outside Vietnam.
1.2.2.3 Compile information on the raw material input for products exported to the EU
including: country of origin, species, type of product (according to EU classification system),
legality classification (FLEGT license, CITES license, other legality verification/certification
scheme, other proof of legality, or no information), and include identification of key importers
of wood to Vietnam. The goal is to ensure that information necessary to meet EUTR/FLEGT
requirements is available so that Vietnamese companies can provide this information to their
EU customers.
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Justification and efficiency to achieve Result 1 via activity 1.2: Before implementing risk mitigation, it
is necessary to identify types of risk that are present in the supply chain in Vietnam. Being primarily a
processing rather than producing country, identification of the top countries for exporting timber
products into Vietnam, and an assessment of the risks that each of those countries poses in terms of
allowing illegal timber to exit its borders, will be essential to knowing what possibly illegal material is
likely to be imported into Vietnam and how to ultimately mitigate those risks. NEPCon is already
undertaking gathering of some of this information through our Global Forest Risk Registry, as well as
through our current Forest Legality Assessment Framework project with our partner Forest
Stewardship Council. Information already gathered from these projects will feed into the desk
assessments performed in activity 1.2.1.1.
In addition, using the information that can be obtained from other types of verification and
certification systems can be a great help in documenting the risk of illegal timber trade. In order for a
company to implement a comprehensive risk mitigation system, issues that are relevant to FLEGT
(TLAS and EUTR requirements) that are not covered by these systems need to be identified.
Finally, risk assessments will be developed in close consultation with relevant authorities involved in
the VPA process in Vietnam, and will be based on the final versions (or latest drafts) of the TLAS for
Vietnam, the Timber and Timber Product Legality Definition for the Voluntary Partnership
Agreement, as well as the EUTR. Depending on how the TLAS is developed as the time of
implementation of the proposed project, the approach to developing risk assessments for Vietnam and
important countries that export to Vietnam may need to be adjusted to ensure that they make sense
according to the requirements specific to the Vietnamese TLAS. The project aims to be flexible in
adjusting for changes in the TLAS as it is being developed.
Implementation by partner: NEPCon will be the main responsible partner for elaborating the country
level risk assessments. SFMI will assist in identifying top countries that export to Vietnam. NEPCon
will be responsible to draft a supply chain mapping methodology for the project in close cooperation
with SFMI, and SFMI will conduct the actual mapping of the supply chain.
1.3 Development of a toolkit for legality risk mitigation.
1.3.1 Develop a legality risk mitigation toolkit for SMEs in Vietnam. (Primary implementing
partner: NEPCon) The objective of this activity is to develop guidance and background material to
be provided to Vietnamese SMEs by intermediary organisations regarding how to conduct due
diligence and implement FLEGT legality requirements, including TLAS and EUTR.
Because the TLAS for Vietnam is currently still in a draft stage, the project will develop tools
based on the current draft and will be flexible to adjust tools when more detailed requirements are
known. Because TLAS is part of the FLEGT Action Plan, the assumption will be made that the
TLAS requirements will be similar to those required for importing directly into EU, and will
therefore use EUTR requirements as a basis.
The project will draw from NEPCons extensive experience in this area, including tools we have
already developed regarding verification of due diligence and risk mitigation that can be improved
and adapted to the Vietnamese context. In addition, our cooperation with the European Timber
Trade Federation in analysing their Responsible Purchasing Policy as it relates to EUTR
requirements as well as presenting trainings in Eastern Europe to timber products companies
regarding the EUTR have given NEPCon great experience in terms of providing capacity building
on the topic. Finally, NEPCons application to become a Monitoring Organisation under the
EUTR will likely be approved very soon (NEPCon is currently positioned to be among the first
approved Monitoring Organisations).
We will use our extensive experience from working with different civil society and private sector
organisations from across the EU in the areas of due diligence and legality risk mitigation to
develop tools that work in the Vietnamese context and work with similar partners in Vietnam.
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The tasks for this activity include:

1.3.1.1 Conduct a baseline study among wood industry intermediary organisations and SMEs
documenting awareness regarding legal sourcing to assess their current capacity and present
procedures related to legality. The study will be conducted using a combination of
questionnaires, telephone interviews, and meetings with target group representatives. The
information will be analysed and a report will be elaborated. Special attention will be given to
the wood processing villages, each representing a large number of small family businesses.
This activity is needed to determine the baseline level of knowledge of the target group and
beneficiaries regarding the topic of timber legality documentation so that the project can
develop appropriately-based toolkit and training materials to fill in the gaps identified and
address needs for capacity building correctly.
1.3.1.2 Establish tools and guidance for sourcing material with negligible risk of legal noncompliance. This includes a checklist of useful documentation that needs to be asked for from
suppliers and other information which must be made available. The guidance will clarify how
responsibility can be taken to sufficiently reduce the risk of importing illegal timber. All tools
and guidance will be developed in close consultation with the relevant authorities, and will be
based on the final versions (or latest drafts) of the TLAS for Vietnam, the Timber and
Timber Product Legality Definition for the Voluntary Partnership Agreement, as well as the
EUTR.
1.3.1.3 Establish tools and guidance for traceability and mixing of material with negligible
risk, including mixing forest products traded with a FLEGT license with forest products
verified by voluntary certification schemes that fulfil TLAS and EUTR requirements. When
the supply comes from certified sources, guidance is needed to address requests necessary to
fulfil these requirements. An example of such a tool would be a list of certification and
verification systems indicating what additional information may be needed beyond proof of
certification - to ensure compliance with TLAS and EUTR requirements.
1.3.1.4 Establish tools and guidance for communication with customers/operators in the EU to
provide assurance that products exported to the EU comply with TLAS, and ultimately, EUTR
requirements. At the stage of export, the documentation related to the components of products
and its origin needs to be clearly elaborated. It is crucial that this documentation be tailored
toward FLEGT and EU Timber Regulation requirements to be useful for EU buyers.
1.3.1.5 Establish tools and guidance for verification of compliance with TLAS requirements,
including an option for group models and family-owned businesses. Since many SMEs in
Vietnam are family or village based, they will have limited capacity to address issues
regarding legality. It therefore becomes very important to look into a system of group
management where legality issues are handled at a level above the individual villages
producing wooden products. Since transport and other logistic challenges are managed at a
higher level, it is necessary to target this sourcing at group level, and also helps to ensure
long-term sustainability of capacity regarding mitigation of legality risks.
Justification and efficiency to achieve Result 1 via activity 1.3: Practical guidance and tools for
Vietnamese SMEs is a key activity to secure the success of the project. All outputs will be thoroughly
tested before they are made available to the intermediary organisations for dissemination to SMEs. If
tools become too sophisticated to use, and procedures get too complex, they will not have a lasting
effect and impact. Therefore, all tools and guidance will be quality checked to obtain the simplicity
and easy access required to be realistic for SMEs.
In addition, all toolkit materials will be developed in close consultation with relevant authorities
involved in the VPA process in Vietnam, and will be based on the final versions (or latest drafts) of
the TLAS for Vietnam, the Timber and Timber Product Legality Definition for the Voluntary
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Partnership Agreement, as well as the EUTR. Depending on how far the TLAS is developed at the
time of implementation of the proposed project, some of the activities involved in developing the
toolkit may need to be adjusted to ensure that the toolkit makes sense according to the requirements
specific to the Vietnamese TLAS. The project aims to be flexible in adjusting for changes in the TLAS
as it is being developed.
Finally, following NEPCons open source organisational policy, the toolkit will be openly and freely
available via the project website, NEPCons website, and will be encouraged to be made available in
other places where Vietnamese SME timber companies go to find industry information. Therefore no
companies will ever be charged for use of the toolkit, nor will the toolkit be limited to just those that
are participating directly in the project.
Implementation by partner: NEPCon will take lead on this activity, with support from SFMI in
ensuring that the guidance offered is relevant and implementable for Vietnamese SMEs.
1.4 Capacity Building
.
1.4.1 Training of intermediary organisations. (Primary implementing partner: NEPCon) The
training has the goal to prepare intermediary organisations to become experts on the topics of
FLEGT, TLAS, EUTR and legality risk mitigation, as well as to learn how to effectively pass that
training on to their SME clients and stakeholders. The specific tasks for this activity are:
1.4.1.1 Hold workshops for training of 75 experts, whom are representatives of the
intermediary organisations (i.e., the target group). A total of 5 training workshops will be
conducted with these organisations to provide expert-level knowledge regarding FLEGT,
TLAS, EUTR, legality risk mitigation, and due diligence approaches. This is important to
ensuring that knowledge and capacity about implementation of legality risk mitigation is
gained at a higher level so that SMEs have local resources to contact if questions arise. In
addition, the activity helps to ensure long-term sustainability of the project so that knowledgeexperts are created at the local Vietnamese level.
The workshops, which will last 3 days each, will include the following topics:
Overview of information about the issue of illegal logging, as well as FLEGT, the VPA
process, TLAS and EUTR regulations specifically as they relate to companies in
Vietnam.
Overview of the concepts of risk mitigation and conducting due diligence.
Presentation of the supply chain mapping tool and training in how to teach companies to
use it.
Presentation of the national risk assessment for Vietnam, as well as findings for the 5 key
exporting countries (activity 1.2.1) in order to make experts aware of where the top risks
of illegal material entering their supply chains are coming from.
Presentation of the toolkit for risk mitigation. It will include a number of steps and
actions to be taken to assess and mitigate risk when engaging in trade with a wood
supplier, including: change to purchase FLEGT licensed timber, change to timber verified
by a legality scheme that mitigates the risk identified, or establish other risk mitigation
actions. The tools and guidance developed are an important basis in presenting actual
methods in how to mitigate risk it is not merely a theoretical discussion of risk without
presenting practical solutions. The toolkit is presented during the training and made
available for all trainers to use in working with their SME stakeholders and clients.
1.4.1.2 Development of online training platform Materials developed for the workshop will
be made available as part of an online training platform, including documents from the toolkit
available for download, as well as videos of the training presentations. The online platform
will help experts from intermediary organisations by gathering all training materials in one
spot, so that they can easily be used when passing knowledge on to SMEs. The online training
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module will also allow for training of additional experts from intermediary organisations that
could not attend in person. In addition, the online platform will be available after the project to
allow the impacts of the project to be continued after the project end date.
1.4.2 Pilot tests of the toolkit for legality risk mitigation. (Primary implementing partner:
NEPCon) The objective of this activity is to evaluate SMEs through a pilot test evaluation to see if
the legality risk mitigation toolkit developed by the project is: 1) being put into use, and 2)
effective in mitigating legality risks in the companies supply chains. Those SMEs which fulfil the
requirements of the legality risk mitigation toolkit will receive an evaluation statement which
helps them to document their adherence to FLEGT requirements, including TLAS and EUTR.
In addition, these pilot test evaluations will serve an important role as on-site field training for the
experts trained in the workshops from activity 1.4.1. These 2-day on-site evaluations will allow
the trainees to see actual on-site implementation of due diligence and risk mitigation, and be able
to train using real life examples of purchasing systems, documentation, etc., that they are likely to
be dealing with as they, in turn, train their own SME clients and stakeholders.
The specific tasks for this activity are:
1.4.2.1 Onsite visit of 20-25 SMEs evaluating the procedures implemented by the companies
to ensure legality risks in their supply chains have been mitigated. Interviews are performed
and documents are checked to get first-hand knowledge to verify that their implementation of
due diligence and ability to mitigate legality risks is accurate and functional. The activity, at
the same time, serves as the on-site training for experts in activity 1.4.1.1.
1.4.2.2 A report is issued to each company presenting the main findings of the on-site
evaluation. The report will identify potential non-conformance by the requirements of the
legality risk mitigation toolkit. The goal is that information about non-conformances provided
in the evaluation report can be used by each company to address problems in how it is actually
interpreting and implementing due diligence and legality risk mitigation, and make any
adjustments as necessary.
1.4.2.3 A summary of the cumulative findings from the pilot test evaluations of SMEs to
determine if they are in compliance with due diligence and risk mitigation requirements is
elaborated. This activity will test to see if the work done in Vietnam provides sufficient
documentation to satisfy legality requirements. Furthermore, it will provide feedback to see if
adjustments can be made to the training program and toolkit.
1.4.2.4 A final conference is conducted in Vietnam presenting the summary of findings and
final project results. A report will be elaborated based on feedback provided at the conference,
and added to the recommendations and final results of the project. This activity ensures that
the technical part of the project result is communicated, and important lessons are learned for
future efforts in this field to be addressed as efficiently as possible. Approximately 40
participants are expected for the final conference, including representatives from the target
group, relevant authorities, and other key stakeholders.
1.4.3 Training of SMEs - After experts from intermediary organisations have been trained, the
project will undertake planning and monitoring activities with each organisation to ensure that
they are implementing training of SMEs on use of the legality risk mitigation toolkit. It is expected
that the organisations will be able to start implementation of training activities with SMEs by the
start of year 3 of the project, so that there are 12 months available to conduct on-going monitoring
of their successes in building the capacity of SMEs to implement legality risk mitigation. This
activity will mainly be implemented by the trainers trained as part of activity 1.4.1.
1.4.3.1 Conduct meetings with each participating intermediary organisation to develop a plan
for and monitor their implementation of trainings with SMEs. Conducted during year 3 of the
Page 12 of 27
project, this activity will ensure that capacity is being passed down to SMEs, and feedback
from this monitoring can be used to make any necessary adjustments to the tools, trainings,
etc., developed by the project in order to ensure they are as useful as possible for these hard to
reach stakeholders. It is expected that the intermediary organisations will ultimately be able to
train 300-500 SMEs.
Justification and efficiency to achieve Result 1 via Activity 1.4: Creating increased capacity in the form
of providing training to intermediary organisations is a key objective of the project. Trainings will be
conducted primarily via in-person workshops. Training materials and videos will also be made
available via an online platform, which will allow for additional experts to be trained that either could
not attend in person, as well as after the end date of the project. The on-site evaluation of SMEs is a
major component of the project. It ensures that theory is transformed into a practical system which can
be implemented by SMEs to reach the project goals. Finally, training of SMEs will be done in the final
year of the project via the experts from intermediary organisations that were trained in the workshops.
This activity ensures that capacity is actually passed down from the intermediary organisations to the
hard to reach stakeholders, and will allow time for adjustments to be made to the risk mitigation
toolkit or training materials if feedback indicates that improvements should be made.
Implementation by partner: NEPCon will be responsible for the actual training of experts and
implementing pilot test evaluations of SMEs. However SFMI will be responsible for coordinating the
logistical details of the workshops and pilot tests.
RESULT 2 ACTIVITIES: INCREASED AWARENESS OF 300-500 HARD TO REACH STAKEHOLDERS
(I.E., SMES) REGARDING EFFECTIVE IMPLEMENTATION OF FLEGT REQUIREMENTS.
2.1 Awareness raising campaign that increases the understanding and engagement of SMEs in
the VPA process through implementation of the legality requirements.
2.1.1 Awareness raising campaign implemented in Vietnam. (Primary implementing partner:
SFMI) The objective of this activity is to increase the awareness, understanding, and engagement
of hard to reach stakeholders in the private sector (SMEs) of their role in the VPA process (i.e.,
implementation of TLAS and EUTR requirements) through an awareness raising campaign. The
goal is to reach 300-500 SMEs through direct outreach implemented by intermediary
organisations, as well as thousands of additional SMEs through a media campaign.
The campaign will include the following activities:
2.1.1.1 An informational leaflet covering FLEGT, VPA, TLAS, EUTR, as well as information
about the project, is developed and targeted for SMEs in Vietnam. The leaflet will be
distributed to the target group, for further distribution to SMEs, and outlines challenges and
actions that can be taken by SMEs to address legal wood supply. The leaflet emphasizes the
potential benefits for SMEs of using the legality risk mitigation toolkit provided by the
project.
2.1.1.2 As the project is implemented, results are promoted in already-established
communication channels of the intermediary organisations. To ensure acceptance of the
legality risk mitigation toolkit among the target groups, in-country communication and
promotion are considered a high priority. Working with trade associations and federations,
NGOs, and heads of wood processing villages is considered a primary means to efficiently
reach the SMEs.
Media List - an extensive list of at least 100 relevant stakeholder organisations and media outlets in
Vietnam will be developed, including print media, electronic media, wood industry portals, wood
industry associations etc. This list will be used throughout the project to ensure efficient outreach to
the target group and stakeholders of the project, including use of already existing communications
channels frequented by these groups.
Page 13 of 27
Media Materials - relevant informational materials will be developed and released to the targeted
media list. The purpose will be to raise awareness about FLEGT and timber legality issues, along with
the project and its objectives and impacts (including recognition of EC financing). This will include a
series of press releases and articles relevant to the Vietnamese media context and targeted for
Vietnamese SMEs. It is expected that approximately 20 press releases, news articles related to the
topic of timber legality and other materials will be developed throughout the course of the project.
Television Promotion - International efforts in Vietnam are often promoted via Vietnamese national
television, due to affordable air time rates, and ability to reach target groups and stakeholders that may
have limited access to internet or other communications means. A television program will be
developed to help raise awareness about the FLEGT/VPA process in Vietnam, and will provide
information about how Vietnamese companies can participate in the process, as well as how they can
participate in the project described in this application.
Promotion at Industry Events and Stakeholder Meetings - Produce and distribute materials for use at
relevant trade fairs, conferences, and stakeholder meetings, such as Vietnam International
Woodworking Industry Fair and Vietnam International Furniture & Home Accessories Fair. Materials
could include roll-ups, leaflets, etc. The materials will be used to present the project concept and
results (including recognition of EC financing) at meetings and workshops, fairs and other events
where the stakeholders, target groups and beneficiaries are already gathered. The project will expect to
participate in 4-6 major trade fairs and events.
Case studies After the completion of pilot test evaluations, 2-3 case studies will be developed giving
voice to participating SMEs, their European/Vietnamese buyers, and their timber suppliers. These
case studies will let the SMEs themselves instead of the project explain why they engaged in the
action, how it benefits them, and what their experience has been. The case studies will be developed
as a PDF document available on the project website (as well as other industry related websites that
wish to support the project), and will also be used as the basis for an article distributed to the media
(part of activity 2.1.1.4).
Justification and efficiency to achieve Result 2 via Activity 2.1: It is a key component of the project to
raise awareness of hard to reach stakeholders in the private sector to make them aware of their role in
the VPA process, and how it benefits them as well as the overall efforts against illegal logging.
Without awareness raising and directly addressing the industry, the project would run a high risk of
being technically successful but not appreciated as providing practical solutions that can work on the
ground.
In all, it is expected the 15 participating intermediary organisations will implement the awareness
raising campaign activities, directly reaching 300-500 SMEs. In addition, several thousands more
private sector stakeholders will be reached indirectly through a media campaign. In general, the
project will seek to make use of already existing communications channels (for example, industry
newsletters, industry events, etc.) As a means of financially efficient yet effective means to reach
private sector stakeholders (i.e., the project beneficiaries).
Implementation by partner: SFMI will implement the awareness raising campaign, with help from
NEPCons communications staff that can provide technical expertise on the development of materials
related to timber legality topics.
RESULT 3 ACTIVITIES: PROJECT OUTPUTS AND RESULTS ARE WIDELY DISSEMINATED AND MAKE
BEST POSSIBLE USE OF FUNDING RESOURCES.
3.1 Projects results and outputs receive widest possible dissemination.
3.1.1 Project Dissemination (Primary implementing partner: NEPCon). The objective of this
activity is to ensure that awareness of the project, its results and impacts, and recognition of
Page 14 of 27
European Commission financing of the project, are disseminated as widely as possible. Specific
tasks include:
3.1.1.1 Develop a project communications and visibility plan. The ultimate success of the
project depends on outreach to relevant stakeholders in Vietnam and the projects ability to
reach hard to reach stakeholders in the private sector. As a first step to ensure awareness
raising and proper communication outside the project team, a communications and visibility
plan will be prepared. At the same time, the EU Communication and Visibility Manual for
External Actions will be carefully observed throughout the project to ensure the visibility of
the EU financing. The plan will be developed at the very beginning stages of the project, and
will be presented to the Advisory Committee for comment and approval. The objectives of the
communication and visibility plan are:
To enhance efficient outreach to and uptake of the projects results to the target group,
beneficiaries, and other stakeholders.
To ensure the sustainability of project impacts after project completion.
To ensure the visibility of the EU financing of the project.
3.1.1.2 Implement the project communications and visibility plan. The plan is likely to include
the following tasks (although tasks are likely to be added or deleted after consultation with the
Advisory Committee, described in 3.1.1.1):
Project Website - In addition to providing details about the project and its current implementation
status, the website will act as a depository of needed information for key stakeholders that work with
SMEs in Vietnam. The website will include basic information about FLEGT, the VPA process in
Vietnam, TLAS the EU Timber Regulation, and other information relevant to legality in wood trade,
as well as a list of useful online resources providing in-depth information about these topics. The
website will also guide users to the online training platform developed under activity 1.4.
Consideration will be taken to see if there are already existing websites that the project could work in
partnership with.
Project News Service A project news service is made available to the target group and other
stakeholders that are engaged in the project, with a purpose to provide regular updates on project
implementation and achievements.
Dissemination to complementary initiatives The project will work to disseminate information about
activities, results and outputs to complementary initiatives that include the Vietnamese wood industry
as a key stakeholder, such as the FLEGT Facility, REDD Facility, Forest Sector Support Partnership,
EU FAO FLEGT programme, the Global Forest and Trade Program by WWF, and others.
3.1.1.3 Evaluate dissemination efforts and plan for further dissemination after the projects
end date. At the mid-point of the project, an evaluation will be conducted regarding the
success of the projects dissemination efforts. Based on that evaluation, a report will be
developed with recommendations on how to continue dissemination efforts for the remainder
of the project, as well as after the end of the official project implementation period.
3.1.1.4 Participation in Information Exchange Meetings The project will plan to participate
in any information exchange meetings in Europe, the Asia region, or elsewhere regarding EC
funded initiatives that may be relevant to illegal logging, FLEGT or the VPA process.
3.1.1.5. Final Study - A final project assessment study is conducted using the baseline study
conducted at project start, measuring impacts achieved by the project. The results will be
presented on the project website and communicated to all stakeholders, as well as presented at
the final project conference (activity 1.4.2.4).
Justification and efficiency to achieve Result 3 via Activity 3.1: While dissemination work is included
as a part of many of the previous activities, this activity aims to ensure that all dissemination efforts
Page 15 of 27
are closely coordinated and carried out to maximum possible effect. By framing dissemination work as
its own activity with its own action plan, it helps to ensure that dissemination is an integral part of the
project work, and not considered secondary to the more technical work.
Implementation by partner: NEPCon, as the project applicant, will take overall responsibility to ensure
dissemination of the project. The work will be closely coordinated with SFMI to ensure dissemination
among Vietnamese stakeholders. Resources have been allocated in the budget to allow for the
necessary communications experts.
Project Management
It is of vital importance to the project partners, NEPCon and SFMI, to ensure that the project is
managed according to contract terms, and that activities are implemented and results are achieved.
Specific tasks include:
A. Establish a project Management Group. The purpose of the Management Group is to create a forum
that monitors project progress and is able to decide when the project leaders need feedback to
implement the activities according to the needs and wishes of the target group, beneficiaries and other
stakeholders. Since the resources of the project are limited, priorities will need to be made to ensure
best possible implementation. The directors of SFMI and NEPCon will be among the 3-5 members of
the Group, and will have ultimate responsibility for the proper implementation of the project.
B. Establish a project Advisory Committee. The Advisory Committee will comment on project
progress and issues of importance to make sure a wider range of stakeholders can influence the project
and ensure the results are practical and of real use to Vietnamese producers and traders. The
Committee will be composed of SME umbrella organisations, trade network organisations, NGOs, as
well as other relevant industry organisations in Vietnam. In addition, government agencies relevant to
the trade of timber will be asked to be part of the committee. The committee will be invited to give
comments to the project management every 6 months. A report is elaborated and recommendations
from the Committee recorded as minutes.
C. Project Procedures and Monitoring A project procedures manual will be elaborated at in the first
months of the project, and it will describe a basis for monitoring of project results and impacts through
the project duration. In addition, the manual will set overall expectations for each partner on the
project, and will establish guidelines for handling of any disputes that may erupt between project
partners, target groups or key stakeholders that may come up during project implementation.
D. Reports are elaborated based on grant agreement - This task will ensure that all relevant reports are
prepared in due time and show a valid picture of project progress during all 3 years of implementing
activities. The reporting will be used to make sure all project activities, outputs and results are
monitored and used to evaluate progress within the project team and for the Advisory Committee.
Implementation by partner: The reporting will be used to secure on-going communication between
SFMI and NEPCon, where the reporting is used as the basis for strategy and decisions made. It is thus
a shared effort between the project partners, but overall responsibility and implementation of
reporting, will lie with NEPCon (the applicant).
3. METHODOLOGY
Methods of project implementation
The activities of the project need to be implemented in very close cooperation with the target group of
intermediary organisations (industry associations, NGOs, heads of wood processing villages,
consultants and others that work with SMEs in the wood sector), as well as relevant government
authorities, and SMEs themselves. Therefore, SFMI will be responsible for the practical
implementation to ensure all project activities are communicated, implemented and handled in a way
which is appropriate and secures maximum impact. At the same time NEPCons role is to ensure that
Page 16 of 27
all formalities are considered in regard to management of the project including all contractual
obligations and also make sure the international aspects and requirements for documenting legality
from the EU side are fully considered when implementing project activities.
The project team will work in close cooperation with all stakeholders, beneficiaries as well as the
target group. To ensure this, an Advisory Committee will be established which will receive regular
updates on project progress and be consulted to implement the project as efficient as possible. The
Advisory Committee is used to provide feedback on more general issues and the strategy of project
implementation. This approach will secure that implementation is integrated closely with all
stakeholders to ensure long term sustainability and ownership to project results.
Synergies with other projects and activities
Though the present project is not part of a larger program, the objectives of the proposed action
represent a great number of potential synergies with other initiatives.
In addition, the proposed action will complement and coordinate with past and on-going wood
sustainability and supply chain related projects in Vietnam. For example, while the following projects
have different objectives, there is some potential for synergies with the proposed action - particularly
in terms of using existing communications channels to disseminate information about the project and
encourage uptake:
EU FLEGT Facility - Vietnam (The European Forest Institute) - The EU FLEGT Facilitys FLEGT
Facilitator in Hanoi (Tim Dawson) will be considered a priority throughout the action to ensure that
the project is in line with, but not replicating, other FLEGT initiatives being conducted in Vietnam.
EU REDD Facility The Facility works to foster sustainable forest management in developing
countries by addressing drivers of deforestation and forest degradation. They will be an important
stakeholder, as well as a means of communication with other stakeholders.
EU FAO FLEGT Programme - The programme provides project assistance and information services
to stakeholder groups in VPA countries (such as Vietnam) as well as targeted non-VPA countries. The
project proposed here will work in close coordination with the EU FAO FLEGT programme to ensure
that resources are shared where possible, and efforts are not doubled.
Forest Sector Support Partnership Part of the Ministry of Agriculture and Rural Development,
FSSP promotes dialogue and cooperation on forestry issues in Vietnam between the government,
international organisations, and the private sector.
Global Forest and Trade Network-WWF - GFTN is WWF's initiative to eliminate illegal logging and
improve the management of valuable and threatened forests. GFTN-Vietnam provides a framework by
which producers and processors can work towards credible certification (www.gftn.panda.org).
GFTN, including its project in Vietnam funded by the Switch Asia facility of the European
Commission, is focused primarily on the production of certified wood products.
Forest Trade and Finance Program - Forest Trends This program, which is actively working in
Vietnam, has a goal of raising transparency and accountability, and ultimately for improving practices
by financial institutions that fund forestry investment. They were consulted during the development of
this proposal, and would be considered as a key stakeholder.
German International Development Agency (GIZ) - GIZ has an active forest policy and sustainable
forest management program in Vietnam. As part of their aim to create conditions that are conducive to
the sustainable management of Vietnams national forest resources, one of the goals of the program is
to establish timber processing industries that are competitive on international markets3. Part of this
work includes engagement in forest governance policy processes, including FLEGT. The project
proposed here will work in close coordination with the GIZ programme to ensure that resources are
shared where possible, and efforts are not doubled.
3
http://www.giz.de/en/downloads/giz2013-en-072-forest_policy.pdf
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None of the initiatives mentioned above are specifically focused on how to implement legality risk
mitigation within the supply chain at the producer level. The proposed project will communicate
closely with the projects listed above to ensure best possible coordination between on-going activities
in the field of forest management according to FLEGT and the new activities which focus on the
processing of wooden products.
In terms of the European Union, the action will directly aid implementation of the EU Timber
Regulation, which began implementation from 3 March 2013. The European market depends heavily
on imports of wooden products from Vietnam for example, in 2011 furniture worth an estimated
value of 494 million EUR was imported to the EU from Vietnam4. Growth in both markets is highlylinked and the present project will enforce the implementation of measures to increase sustainability
through the sourcing of legal wood.
Procedures for evaluation
The management of the project will use the project description as the basis for monitoring progress
throughout implementation of the project. Regular progress reports will be prepared and used for
evaluation. The projects Advisory Committee will review and comment on project progress in the
interim based on the quarterly reports. All requirements of the grant contract for both internal and
external evaluation will be followed.
In terms of a system for internal monitoring, the Chief Advisor (EU expert) and the Project
Coordinator (Vietnamese expert) will work together to develop consensus on all decisions. However,
it is the Chief Advisor that has final responsibility for project implementation. The Chief Advisor and
Project Coordinator will be in regular communication with each other to ensure project goals are met
according to the estimate timeline. In addition, quality assurance (QA) procedures will be put in place
to ensure that QA is checked on every major activity throughout the projects implementation, and will
be monitored at the headquarter level by the Project Manager for NEPCon.
Role and participation of various actors
The project builds largely on the participation of the intermediary organisations, and their commitment
to ultimately pass their learned awareness and knowledge on to private sector stakeholders (SMEs).
The following measures will be taken to ensure participation:
Work with the already existing contacts and related network of SFMI (the partner organisation
on this project).
Work with related projects and initiatives already operating in Vietnam (mentioned above).
Work with existing information channels and platforms relevant to the Vietnamese wood
processing industry to communicate the progress and challenges of the project.
Planned meetings and workshops will help to ensure good communication, invite continuous
participation, and receive feedback from stakeholders.
The establishment of an Advisory Committee to comment on project progress and strategic
decisions.
Participation in events organised by the stakeholders to address the issue and communicate the
project whenever the input is appreciated by the stakeholders.
SMEs will be invited, through their relationships to intermediary organisations, to participate in
information meetings and can later qualify for an on-site pilot test evaluation of the risk
mitigation toolkit.
Organisational structure and team - The Vietnamese project coordinator is responsible for the
proper and timely implementation of activities in Vietnam and is the reference for all Vietnamese staff
and their work. The international chief advisor, to be based part-time in Vietnam, is responsible for
overall project implementation in an international context and to secure contractual obligations and
reporting to NEPCon. Within NEPCon, the Projects Manager (who is located at NEPCon headquarters
4
http://bit.ly/XtJc0H
Page 18 of 27
in Denmark and oversees all projects in NEPCon) is the supervisor of the Chief Advisor (see below).
The Projects Manager is responsible to the NEPCon management and ultimately the NEPCon board of
directors. At project start, SFMI and NEPCon will enter an agreement to agree upon clear division of
responsibilities and implementation of project activities.
The project team consists of the following Vietnamese experts:
Project coordinator employed full time to consistently coordination and management of
activities implemented in Vietnam
Chief Legality Expert ensuring regulations regarding timber legality, including FLEGT, VPA,
TLAS and EUTR, are considered in project implementation
Chief trainer responsible for training of auditors and trainers
Communications expert and project assistant ensuring implementation of all activities related to
awareness raising, public relations and project dissemination, as well as implementation of
workshops/trainings in Vietnam.
Expert in wood processing market - working with tools for documentation of legality
Project Secretary Responsible for coordination, communication and logistical support related to
company visits and planning of workshops/trainings in Vietnam. This position is full time as well
to ensure proper administration and organisation of project activities.
Ad-hoc consultants Additional professional consultants will be engaged as needed to provide
expertise on specific topics where a regular full or part-time position is not required.
The project team will also consist of the following international experts:
Chief Advisor (based part-time in Vietnam) - ensuring that all project activities implemented in
order to achieve maximum project results. Though only employed for 14 months, the majority of
time is spent working approximately half-time during the first 24 months of the project where
most activities are implemented. Dissemination and awareness raising to the SMEs during the last
year of the project will be led by the Vietnamese project coordinator (who will have built up
sufficient learning and capacity during the first 24 months of the project), with only some input
and oversight needed from the Chief Advisor.
Risk mitigation expert overall responsible for development of the toolkit documenting legality
Communications expert for EU trade EU based communications expert to ensure technical
accuracy of communications materials from the context of EU market requirements, working in
close cooperation with Vietnamese communications expert.
Project means
The primary means required for project implementation are office facilities large enough for the
project team. Only standard office equipment will be required, such as laptop computers, mobile
phones, copy machine, and office furniture. No special equipment (such as vehicles, machinery, or lab
equipment) will be necessary.
Stakeholder attitudes
In Vietnam, there are huge numbers of small, family-owned companies organised into wood
processing villages that produce a significant amount of the products being exported to the EU and
other primary markets. There is a lack of capacity to supply information necessary to enable
assurance of legal wood sources. SMEs are under the pressure of new international market demands
and are eager to find a tool to meet the requirements and not risk losing the market for their products.
As international markets tighten their gates to exclude illegal timber, there is a risk that small and
medium enterprises will be excluded, while larger companies will reap the benefit of being able to
build in-house competence and customised systems in order to comply with the new demands. The
Page 19 of 27
current project addresses this risk of growing inequality by increasing the capacity of intermediary
organisations, which will, in turn, pass this capacity on to their SME stakeholders.
The Vietnamese government clearly recognises its precarious position as being a wood processing
country which imports its timber from a large number of countries in the region, including Laos,
Thailand, Cambodia, Malaysia and China, with their timber exports mainly targeted to high-end,
environmentally conscious markets such as the EU and the US5. As such, the Vietnamese government
began negotiations of a FLEGT VPA in 2010, recognising the need to provide assurances of wood
legality to the EU market.
Equally, trade organisations and NGOs have a positive attitude towards the objectives of the project,
as learned through conversations that NEPCons Executive Director had with several CSOs while
visiting Vietnam in January 2013.
Project visibility
As described in activity 1.1, key stakeholders will be engaged from the beginning stages of the project.
The project will aim to use their already established communications channels as a means to ensure
the highest visibility for the project.
Visibility among EU stakeholders (i.e., buyers of Vietnamese products) will be assured through
NEPCons network of more than 1,200 forest products industry clients, as well as through our
newsletter mailing list (currently more than 8,000 subscribers). Project visibility will also be ensured
through NEPCons regular engagement (including as presenters) at the illegal logging stakeholder
meetings at Chatham House in London, where key global stakeholders gather twice each year.
In addition, while many of the individual project activities contain communications and dissemination
aspects, the proposed action will develop and implement a communications and visibility plan to help
ensure widest possible dissemination of the project (activity 3.1). The plan is framed as its own
specific activity in order to help ensure that dissemination and visibility are an integral part of the
work of the project, and not considered secondary to the more technical work.
The communications and visibility plan will be fully developed at the beginning stages of the project,
with stakeholder input to ensure best possible effectiveness and dissemination. The plan will build
visibility of the project among target groups, beneficiaries on stakeholders through many means,
including industry media, stakeholder meetings and events, and other communications channels
already used by stakeholders. The concept behind the communications plan is to ensure that any news
and information will be highly relevant and present solutions and actions that can be taken by
Vietnamese companies. The approach is to provide information about the project and its work, while
talking about the needs and challenges/options of companies to improve their business in the area of
legal sourcing.
Funding provided by the European Commission will be clearly recognised in all communications and
dissemination materials. In addition, visibility of EC funding will be ensured by careful observation
and implementation of the EU Communications and Visibility Manual for External Actions throughout
the projects activities.
4. DURATION AND INDICATIVE ACTION PLAN FOR IMPLEMENTING THE ACTION

The bulk of project activities are planned for semesters 1-4, during which the local project coordinator
and secretary will work full-time to secure the implementation of the project. Activities 2.1.1
Awareness campaign and 3.1.1 Dissemination are supported for the majority of the project duration,
but during the last 12 months of the project the work to continue to implement these activities will be
provided partly as in kind contribution by NEPCon and SFMI. This will supplement the resources
5
http://www.euflegt.efi.int/portal/home/vpa_countries/in_asia/vietnam/
Page 20 of 27
available through the project. The only other activity to be implemented during the final year of the
project is training of SMEs, which will be carried out by the trainers from intermediary organisations
not by project staff. To ensure the proper implementation of this and to be available to help with any
issues that may arise, the local project coordinator and secretary will continue to work full-time to
monitor this activity (1.4.3) during the last year of the project.
Year 1
Semester 1
Activity
Month
1
Semester 2
3
10
11
12
Implementing
body
Preparation
Activity 1.1.1
Engage target
group
SFMI
Execution
Activity 1.1.1
Engage target
group
SFMI
Preparation
Activity 1.1.2
SME
Commitment
SFMI
Execution
Activity 1.1.2
SME
Commitment
SFMI
Preparation
Activity 1.2.1
Identify supply
chain risks
NEPCon
Execution
Activity 1.2.1
Identify supply
chain risks
NEPCon
Preparation
Activity 1.2.2
Map supply
chain
SFMI
Execution
Activity 1.2.2
Map supply
chain
SFMI
Preparation
Activity 1.3.1
Develop risk
mitigation
toolkit
NEPCon
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Execution
Activity 1.3.1
Develop risk
mitigation
toolkit
NEPCon
Preparation
Activity 1.4.1
Training
Workshops
SFMI
Preparation
Activity 1.4.2
Pilot tests
SFMI
Preparation
Activity 2.1.1
Awareness
Campaign
SFMI
Execution
Activity 2.1.1
Awareness
Campaign
SFMI
Preparation
Activity 3.1.1
Dissemination
NEPCon
Execution
Activity 3.1.1
Dissemination
NEPCon
Activity
Year 2
Semester 3
Year 3
4
Implementing
body
Execution Activity 1.4.1

Training Workshops
NEPCon
Preparation Activity 1.4.2

Pilot tests
SFMI

Pilot tests
NEPCon
Preparation Activity 1.4.3

SME training monitoring
NEPCon

SME training monitoring
NEPCon

Awareness Campaign
NEPCon

Dissemination
NEPCon
Please note: the indicative action plan takes into account the time needed (approximately 20 days) to
obtain a project operating permit in Vietnam. Many preparatory tasks can still be done from NEPCon
and SFMI offices while waiting for permit approval.
Page 22 of 27
5. SUSTAINABILITY OF THE ACTION

Impact of the action - The primary expected impact of the action will be increased participation of
civil society organisations and the private sector in the FLEGT process in Vietnam by strengthening
the capacity of intermediary organisations (i.e., NGOs, associations, consultants, etc.) that work with
hard to reach stakeholders (i.e., SMEs) in the Vietnamese timber industry. The project will increase
the awareness of SMEs about their role in implementing FLEGT legality requirements, and increase
the capacity of intermediary organisations in implementing due diligence and legality risk mitigation
that will pass that training and knowledge on to SMEs.
Impacts during the project period are that a toolkit for legality risk mitigation will be developed, and
300-500 SMEs will be trained in how to implement it. In addition, due to project replication and
dissemination efforts, many hundreds, if not thousands, more SMEs will be made aware of their
obligations to implement TLAS requirements, and the toolkit will be made available to them free of
charge In a wider context, the project is intended to cause a change in the mind-set among SMEs in the
wood processing sector of Vietnam. Legality will be seen as just as important as other values of their
product, such as overall quality, to ensure long term client satisfaction. Those companies which fulfil
legality requirements will be seen as competitive in comparison to those neglecting legal supply
measures.
At the policy level, the action will have the impact of directly addressing an important gap regarding
civil society involvement that has been identified in the VPA process in Vietnam: namely that
experiences from other FLEGT partner countries have noted that a strong civil society has an
important role to play in ensuring enhanced forest governance and achieving the aims of the VPA,
but the situation in Vietnam is such that civil society and local NGOs are no yet familiar and
organized to feed a meaningful dialogue.6 Specifically the action will build the capacity of 15 civil
society organisations, through the development of tools and provision of trainings, which will give
these organisations the ability to engage hard to reach stakeholders (SMEs) more directly in the VPA
process through increasing their capacity to implement TLAS requirements.
Thus, the project results can be seen as providing the right background to ensure that the overall VPA
process is strengthened sufficiently to become truly successful and a showcase in how to facilitate a
solid VPA.
At the technical level, through the development of a risk mitigation toolkit targeted primarily for
Vietnamese companies, the action has a direct impact to develop and test an operational system to
mitigate risk when sourcing wood. The toolkit will be compatible with and thereby support FLEGT,
including TLAS and the EU Timber Regulation. Quantifiably, experts from 15 intermediary
organisation (50-75 people) will be trained, that will in turn train 300-500 SMEs.
The direct economic impact of the action will be that Vietnamese companies will be able to trade with
important export markets by fulfilling the documentation requirements of the new timber legality
regulations in those markets (EU Timber Regulation). Wood products exports constitute a significant
part of the Vietnamese economy, estimated to hit US$5.5 billion in 2013, an increase of 12.5% over
2012.7 This is an important trade sector that is at risk of being lost if companies cannot deal with
legality requirements of the markets they are selling to:
The majority of the wood-processing industry in Vietnam is privately owned and of small or
medium size (SMEs), and the potential impact of market requirements for legal timber is
likely to affect SMEs the most. Small and medium sized enterprises (SMEs) with lower
capital and capacity, and weak or no mechanisms for controlling legality of sourced timber,
are more at risk from market regulations such as the EU Timber Regulation. These SMEs may
6
7
Taken from page 4 of the guidelines for this call for proposals (Reference: EuropeAid/133707/L/ACT/VN)
http://vietnamnews.vn/economy/242137/wood-exports-to-hit-annual-target.html
Page 23 of 27
be those most likely to opt for the markets with less sensitive environmental requirements,
transition to being subcontractors for the larger enterprises, or may disappear entirely if they
cannot meet market requirements. 8
It is important to note that wood-processing companies in Vietnam are relatively small-scale. Of the
current 3,000 enterprises, approximately 50% employ 10-50 labourers, 20% employ 50-200 labours,
and very few companies employ more than 200 labourers each (most of these companies are foreignowned).9
At the present time, a vast majority of these SMEs are not aware of new legislative actions in the
consumer markets where their products are ultimately sold (such as the EU Timber Regulation), and
have no ability or system in place for documenting the legality of the wood in their supply chain. As
international markets tighten their gates to exclude illegal timber, there is a risk that small and
medium enterprises will be excluded, while larger companies will reap the benefit of being able to
build in-house competence and customised systems in order to comply with the new demands. The
current project addresses this risk of growing inequality by increasing the capacity of intermediary
organisations, which will, in turn, pass this capacity on to SME stakeholders.
In order to quantify this impact, a baseline study will be conducted among Vietnamese companies that
will assess their capacity and present procedures related to legality. The study will give an indication
of how many companies in the wood processing industry would be at risk of losing their trade with EU
buyers due to inability to mitigate and document legality risks of their products according to the
EUTR.
The action will have a significant social impact given that many of the SMEs are family businesses. A
regular income from the business is very important for sustaining the family welfare, and provides a
means for women to contribute. The project addresses one of the key challenges of FLEGT: that it
may favour the larger companies with more resources, while the small and poor companies will have
difficulties to comply. Therefore the project will help to address an unintended but negative social
consequence of the FLEGT Action Plan.
Plans for replication, extension, and dissemination of the action
The project will ensure the replication and dissemination of the improved techniques and procedures
made available for wood producers in Vietnam by involving local intermediary organisations that
work with SMEs. Through the provision of training activities, their engagement will have lasting
duration and will not be limited to the duration of the project. The risk mitigation toolkit will be made
available to document compliance by companies, and the framework will be set to create acceptance
of the system by key stakeholders.
In addition, the project expects to conduct pilot tests of the legality risk mitigation toolkit with 20-25
SMEs. These companies are really just the first demonstration cases in achieving long-term market
penetration. It is planned that many more companies will be able to make use of the projects
procedures and tools as they are further disseminated down through the intermediary organisations
trained by the project. The awareness raising and dissemination activities of the project will facilitate
the process of increasing outreach and full market penetration.
Risk analysis and contingency plan
Activity
1.1
Engagement
of target
group, SMEs
Possible Risks
- Lack of interest from
intermediary
organisations
Mitigation Measures
- Individual meetings to highlight benefits for target group before
kick-off meeting
- Work with intermediary organisations to engage SMEs for pilot
tests
Forest Trends, April 2011, page 6, "Baseline study 3: Vietnam. Overview of Forest Governance and Trade.
(financed by European Forest Institute as part of the FLEGT Asia programme).
9
Forest Trends, page 9.
8
Page 24 of 27
Activity
and
stakeholders
1.2 Identify
risks in
supply chain
1.3
Development
of legality
risk
mitigation
toolkit
1.4
Capacity
Develop
ment
2.1
Awareness
raising
campaign
3.1 Project
dissemination
Possible Risks
SMEs for pilot tests
-- Consensus on
concept not reached
- Relevant information
is not available to make
risk assessment in 5 key
exporters to Vietnam
- Lack of transparency
in supply chain
information
- TLAS and EUTR
requirements may be
interpreted and
implemented differently
at national levels
Mitigation Measures
- Networking among main stakeholders to find solutions to
challenges and discus how concept can be implemented best
possible
- NGOs and intl organisations monitoring country performance on
legality are contacted to gain best possible knowledge. An approach
to document legal trade where sensitive information is not critical.
- Confidentiality of information is secured and meetings conducted
to ensure support and understanding of the benefit by sharing
information.
- target group is not

committed to receive
training
- target group members
do not set aside
resources to train SMEs
- Lack of involvement
in the continuous
maintenance,
dissemination and
uptake of the toolkit
VN timber industry
- Too little awareness of
FLEGT impact
- media does not show
interest in project
approach and results
- target group members are asked to sign a letter of commitment at

the beginning of the project committing to receiving training
themselves, as well as to pass that capacity on to the SMEs that they
work with
- Throughout the duration, the project will identify and engage with
stakeholders including authorities, business associations etc. who are
willing to be involved in keeping the toolkit up-to-date after project
completion, and to continue disseminating information and
providing support to SMEs.
- Forwarding requests from EU timber traders which are potential
clients will make the point that the project supports basic business
- The project may use the strategy to suggest presentations during
planned industry fairs and workshops conducted in Vietnam and
offer the logistics to facilitate meeting between stakeholders to raise
interest and awareness
- The project will make an effort to integrate project activities with
other projects and on-going work to promote how FLEGT can be
dealt with
- Cases can be made and specific stories can be told to increase the
interest for news the pilot tests made will be of great help to
achieve this in a way which creates attention by the industry
- Dissemination of project results will build on already existing
relationships and communications channels that SFMI has with
timber industry stakeholders in VN
- TV broadcast is planned to secure attention by the industry/SMEs
- stakeholders do not
show interest in project
approach and results
- NEPCon will seek to achieve clarification by becoming an EU

approved monitoring organisation and thereby build capacity to
efficiently deal with general issues related to risk mitigation and
implementing due diligence
Preconditions and assumptions

1) At the time of this proposal, Vietnam has not signed a VPA and no TLAS system is in place.
However, even if there is no TLAS, the project can still be implemented. The project will develop
guidance and tools based on the current draft and will be flexible to adjust these documents when
more detailed requirements are known. Because TLAS is part of the FLEGT Action Plan, the
assumption will be made that the TLAS requirements will be similar to those required for importing
directly into EU, and will therefore use EUTR requirements as a basis. In any case, the core of the
project is to teach approaches to due diligence and risk mitigation - which can easily be adjusted and
applied by SMEs as needed when legality requirements are added or changed.
2) Another key assumption is that the TLAS is enforced by Vietnamese authorities, and the EUTR is
enforced by the relevant national authorities in the EU. If the regulations are not enforced in practice,
companies will not be likely to willingly and voluntarily comply with their requirements.
3) Legality of timber inputs into the supply chain is only one among several factors affecting overall
success of Vietnamese companies involved in timber trade. Other global and local economic factors
Page 25 of 27
that may happen during the 3-year course of the project will have influence on the overall project
impact. For example, a global economic recession could take focus away from legality and
sustainability issues, and cause companies to give financial issues top priority in their production
choices.
Sustainability after completion of action:
Institutional level sustainability - Ensuring institutional sustainability, so that the results may be
continued after the end of the project date, is a core value of this project. While the project aims to
work with intermediary organisations directly with awareness-raising and capacity building efforts, the
work of the project does not simply end after the organisations have received information and training.
The tools and systems developed by the project represent a framework for implementing mitigation of
legality risks in the supply chain that companies can continually integrate as a regular part of their
sourcing practices to comply with FLEGT.
Long-term capacity building is ensured through training of experts (activity 1.4.1.1). The best
approach to reach out to the many small SMEs is through the representatives of associations, NGOs,
consultants, and other intermediary organisations who already are in contact with all SMEs. Training
workshops are conducted with this target group to provide expert-level knowledge regarding FLEGT,
TLAS, EUTR, legality risk mitigation and due diligence approaches. The activity helps to ensure longterm sustainability of the project so that knowledge-experts are created at the local Vietnamese level
and future implementation of the legality risk mitigation toolkit will not be reliant on project staff for
expert assistance.
Long-term sustainability is also ensured by including options for evaluations to be conducted for a
group of SMEs, not just at the individual SME level. By conducting training and designing the toolkit
to allow for implementation at the group level, knowledge about how to conduct due diligence and
implement risk mitigation will be retained at a higher level, and can be disseminated to additional
SMEs as groups become larger. Therefore, an entire training is not lost if a single SME discontinues
their operations. (Activity 1.3.1.5)
Financial sustainability The willingness of intermediary organisations to use their own resources
(i.e., time) to participate in the project trainings, and then pass that training and knowledge on to
SMEs, will help to demonstrate the financial sustainability of the project e.g., it is likely that these
organisations will continue to commit to training SMEs in due diligence and risk mitigation
approaches after the project, as they were not reliant on project resources to begin with (the project
does not pay for their time). The 3rd year of the project is dedicated to this approach to ensure (and
monitor) willingness of intermediary organisations to use their own resources to train SMEs. In
addition, NEPCon is a non-profit organisation that, through its commitment to sustainability of natural
resources, has an open source policy for sharing any tools, reports, etc., developed by NEPCon in
the public domain for free. Therefore all documents, materials, etc., developed by the project will be
freely available to those that want to use them in the future. Also, NEPCon is engaged in numerous
activities related to timber legality and has earned a reputation for its expertise within this area. For
example, NEPCon experts are frequent speakers at international events focussing on this topic, such as
the Chatham House illegal logging stakeholder meetings. Since NEPCon is behind several
development processes aiming to facilitate due diligence and legal timber trade, it may be expected
that further tools will be made available in the future, through other projects, which could be easily
adapted to the Vietnamese context. NEPCon provides a free e-newsletter and stakeholder updates
where stakeholders can be directly informed of any such developments.
Policy level sustainability - The project will directly contribute to policy level sustainability by
demonstrating a toolkit that can be used by SMEs for effective implementation of TLAS requirements.
Because the system is a framework for assessment of risk mitigation, rather than a direct indication of
legality compliance, adjustments in current policies or new policy initiatives can be continually
applied to the framework as needed.
Page 26 of 27
Environmental sustainability - The main objective of the project is to raise the awareness and
increase the capability of SMEs in Vietnam to implement due diligence and risk mitigation approaches
that allow them to comply with TLAS requirements. This means that the project directly makes a
difference to decrease the use of illegal wood form forests which, as a general rule, suffer largely from
unauthorised logging and cutting of timber. Other beneficial aspects of the project will be to support
environmentally-friendly practices once wood from legally managed forests is used. Also aspects of
fairness and overall advantageous management of the forests is supported as well as good management
to avoid unnecessary greenhouse gas emissions from poorly managed forests. It is estimated that 17%
of global carbon emissions are the result of forest degradation.
6. LOGICAL FRAMEWORK
The Logical Framework is attached in Annex I-A.
Page 27 of 27

ANNEX I - Description of The Action

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Supporting participation of national civil society organisations

and private sector federations/entities in FLEGT VPA related

- Vietnam component ACTION

Increasing capacity of CSOs and SMEs to implement FLEGT

Contract number: DCI-ENV/2013/316-088