Sourcing Hub

Tools available in Vietnamese:

Timber Risk Score: 6 / 100 in 2021. The Timber Legality Risk Assessment contains an evaluation of the risk of illegality in Viet Nam for 5 categories and 22 sub-categories of law. We found:

  • Specified risk for 16 sub-categories
  • Low risk for 1 sub-category
  • No legal requirements for 5 sub-categories

This page provides an overview of the legality risks related to timber produced in Viet Nam.

The forestry sector in Viet Nam contributed USD 12.5 billion to the economy in 2020 (Viet Namnews, 2020).  The forest sector is growing as Viet Nam becomes a major international manufacturing country. 

Nearly half of Viet Nam is covered by forest (15.4 million ha), which is categorized into three main categories:

  • Production forests (48%)
  • Protection forests (38%)
  • Special use forest (14%).

Wood sourced from Viet Nam forests mostly originates from plantations. According to Ministry of Agriculture and Rural Development  (2019), the Viet Nam "mass" plantation forests (i.e., not including scattered trees) produced about 16 million m3 of logs in 2019, which is mainly used for processing by the domestic industry. Species most commonly used in forest plantations are Acacia (Acacia spp.), Eucalyptus (Eucalyptus spp.), and rubber.

Illegal logging and trade in illegal timber is a serious problem in Viet Nam and several legality risks are present in Vietnamese timber supply chains. It has been estimated that 30,000-50,000 forest violations are reported per year, and the volume of high-risk imports in 2013 was estimated to be 2.3 million m3 (18% of the country’s wood-based imports) (Chatham House, 2014). Risks of illegal timber produced in Viet Nam are wide-ranging and relate to land tenure, taxes and fees, timber harvesting activities, and trade and transport. If you are sourcing timber from Viet Nam you should take care to ensure the risks identified are not present in your supply chains or have been sufficiently mitigated.

Corruption Perceptions Index

Score: 39 / 100 in 2021

Rank: 110 out of 180 countries in 2021

Bans and restrictions

A temporary ban on import and re-export of round and sawn timber from natural forests of Laos and Cambodia. Valid 1 January 2019 - 31 December 2023.

Harvesting ban for natural forests.

Prohibition of all harvest and export of rosewood (Dalbergia cochinchinensis and Dalbergia oliveri) from the wild for the next five years (from March 2022). 

Armed conflict

There are currently no armed conflicts in Viet Nam according to the Council on Foreign Relations' Global Conflict Tracker 

Voluntary Partnership Agreement

VPA status: Implementing

CITES species

CITES appendix II: Aquilaria spp.,  Dalbergia spp.

Certification

FSC Certified Forest Area: 200,120 hectares (1 December 2021).

Timber sources

  • Find out the different sources of legal timber
  • Determine which source type your timber comes from
Timber source type Description of source type

Plantations
  • State-owned
  • Private company owned (local or international) 
  • Individuals/Households owned

Risk assessment summary

Legal rights to harvest

Legal rights to harvest, EUTR
  • The risk that required land-use right certificate or proof of legal right to harvest the forest is lacking (1.1).
  • Risk of disputes/conflicts over the forest between State Forest Companies and local communities (1.1).
  • The risk of forest allocation and contracting to wrong contractors, using forest land for inappropriate purposes (1.2).
  • The risk is a lack of equity, transparency, and accountability, leading to long delays and corrupt practices (1.2).
  • The risk is that land measurements and borders are not included in the lease contracts (1.2).
  • The risk is a lack of SFM plans and approval by the appropriate authority as legally required (1.3).
  • The risk that the forest owner does not implement the SFM plan (1.3)
  • The harvest of plantations established with the State's funds may not follow the required procedures, and the harvest dossier is not in place (1.4).
     

Taxes and fees

Taxes and fees, EUTR
  • Risk of evading tax by minimizing taxable income compared to actual income through reducing revenue or increasing costs or both when making tax declarations (1.7).

Timber harvesting activities

timber harvesting activities, EUTR
  • The risk is that timber in the protected area is illegally harvested and enters the commercial supply chain (1.9).
  • The forest owners do not have and implement a Fire prevention and fighting plan (1.10).
  • The forest owners do not have the SFM plan approved by the appropriate authority as legally required; if it is in place, it is not implemented (1.10).
  • The safe working procedures and measures are not in place, and the employers do not provide the safety training, chemical use training or inadequate training for the employees, safety cards, the workers are without personal protective equipment or unqualified personal protective equipment, the insurance for occupational accidents and occupational diseases (1.11)
  • Lack of labor contract for the workers, lack of insurances for workers, child labor, overtime work (1.12)

Third parties' rights

Third party rights, EUTR
  • No specified risks identified. See full risk assessment for details
Trade and transport
Trade and transport, EUTR
  • The risk of incorrect quantity on the packing list to avoid the corporate income tax and profit tax (1.16, 1.17)
  • Risk of offshore trading and transfer pricing, especially related to trade with FDI companies/corporations from the tax heaven countries (1.18)
  • Risk of illegal import of timber from Laos and Cambodia (1.19)
  • Illegal harvest from the natural forest of CITES species, CITES permits have been obtained fraudulently (1.20)

Supply chain transparency and traceability

Traceability, EUTR
  • High complexity of timber supply chain from Viet Nam (1.22)
  • The Forest Product Entry and Exit Book are not completed comprehensively (1.22)
  • Low traceability system in the supply chain (1.22)

 

Mitigate the risks in your supply chain

Learn which actions we recommended to mitigate the risks associated with the timber sources from Viet Nam.

We have two tools to help you mitigate risks for Viet Nam timber supply chains:

The tools above give you the most information. Below is a summary of our five recommended actions to mitigate the risks associated with timber sourced from Viet Nam that is not third-party certified

Source Certified Materials 

NEPCon believes that third-party certification (for example FSC and PEFC certification) can provide strong assurances of the legality of the products they cover. Companies seeking to mitigate the risks of sourcing illegal timber should seek to purchase third-party certified materials wherever possible. 

While the European Timber Regulation does not include an automatic “green lane” for certified products, it does recognise the value of certification as a tool for risk assessment and mitigation. The European Commission says that companies “may rate credibly certified products as having the negligible risk of being illegal, i.e. suitable for placing on the market with no further risk mitigation measures, provided that the rest of the information gathered and the replies to the risk assessment questions do not contradict such a conclusion.”

For more information on using certified materials in your due diligence, including how to assess whether a certification system meets EUTR requirements, see the page on Certification and Due Diligence.

Mitigation recommendations

There are five generally recommended actions to mitigate the risks associated with the timber sources from Viet Nam:

1. Fully map your supply chain

2. Obtain and verify documents     

3. Consult with stakeholders    

4. Carry out on-site verification    

5. Conduct targeted timber testing

 

 

 

Profile Publication Date
2022-05-23