Country Risk Profiles

Download all data excel  
Filter by timber species
Filter by Source Types

List of risks by indicator

Risks are listed below and organised under the relevant indicator. Click on the risk below for details on the specifc risk, mitigation options and the related legal requirements.
  • Specified Risks
  • Low Risks
  • Not Applicable
Legal rights to harvest
1.1 Land tenure and management rights
  • Conflict between villages and other types of forest management
  • Lack of business registration 
1.2 Concession licenses
  • Concession licences being issued for areas greater than allowed by Law 
  • Concessions being established or granted in violation of regulations
  • Forest being cleared for plantation concessions 
  • Concession plantations being established without proper maps/boundaries
1.3 Management and harvesting planning
  • Lack of social and environmental impact assessments
  • Lack of plantation certificates” and use of “borrowed” plantation certificates 
  • Annual Logging Plan (which sets basis for maximum allowed harvest volumes) is based on inadequate inventories and requests from districts as well as prepared in the office without conducting actual field surveys. This leads to the approval of unsustainable logging activities
  • Wood quotas approved by officials without legal authority
  • Lack of management plans with which logging is to be comply 
  • Logging in areas with development projects fails to comply with basic requirements of relevant forest legislation 
1.4 Harvesting permits
  • Clearing of forest outside concession boundaries
  • Bribes used to obtain logging permits (corruption) 
  • Conversion of areas within conservation/protection forests
1.5 Payment of royalties and harvesting fees
  • Risk of corruption related to payment of tax
  • Unofficial sale, and lack of harvested timber being registered in log yards as required for tax registration
  • Risk that smallholders lack business registration, and do not pay taxes 
1.6 Value-added taxes and other sales taxes
  • Unofficial sale, and lack of harvested timber being registered in log yards as required for tax registration
1.7 Income and profit taxes
  • Unofficial sale, and lack of harvested timber being registered in log yards as required for tax registration
1.8 Timber harvesting regulations
  • Harvesting regulations not being met by forest operators
1.9 Protected sites and species
  • Legal requirements covering protected tree species are being ignored and protected species being harvested without official authorization
  • Conversion of protected areas for development projects established in conflict with legislation
  • Illegal sale (laundering) of natural-grown timber though teak plantations 
1.10 Environmental requirements
  • General disregard of environmental requirements 
  • Misuse of fertilisers and other chemicals (overuse and use of banned pesticides)
1.11 Health and safety
  • Risk of non-compliance with health and safety rules 
  • Failure to clear unexploded ordinance (UXO)/mines 
  • Health issues from handling pesticides 
  • Lack of labour contracts 
  • Risk of priority of employment not being giving to local Lao citizens 
1.12 Legal employment
  • Risk that workers do not nor receive salary 
1.13 Customary rights
  • Local communities are not adequately compensated when communal lands are re-allocated to a company 
  • Lack of formalisation of complaints from villagers due to corruption 
1.16 Classification of species, quantities, qualities
  • A lack of, or falsification of the registration of harvested logs at Log yard II 
  • Disparities between records of quantities, species composition and quality of harvested timber at different stages of the chain of custody (from pre-felling inventory, to log list and custom documents) 
1.17 Trade and transport
  • Timber being transported without required documents 
  • Transport documents carrying incorrect information 
1.19 Custom regulations
  • Irregular or unofficial timber exports
  • Dual contracting between exporters and importers, with underestimated prices on the Laos side and real prices invoiced in the receiving country
1.20 CITES
  • Illegal harvest and export of Siamese rosewood under CITES export permits 
  • Illegal issuance of CITES export permits 
1.23 Legal Registration of Business
  • Lack of business registration
1.24 Environmental Requirements for Processing
  • Violation of environmental requirements
1.25 Processing Requirements
  • Violation of processing requirements
1.26 Health and Safety in the Timber Processing Sector
  • Violation of health and safety requirements
1.27 Legal Employment in The Timber Processing Sector
  • Lack of labour contracts
1.1 Land tenure and management rights
Last updated on 2022-03-01 Conflict between villages and other types of forest management Specified RISK
Borders and mapping: The borders of different categories of forests are not precisely defined. Zoning and management plans for different categories of forest have yet to be developed.Forests are defined under Article 2 of the Forestry Law as ‘land with various tree species growing naturally or planted in an area more than zero point five (0.5) Hectares with crown cover more than 20 percent (20%)’. Delineation of the three forest categories,... VIEW MOREBorders and mapping: 
The borders of different categories of forests are not precisely defined. Zoning and management plans for different categories of forest have yet to be developed.
Forests are defined under Article 2 of the Forestry Law as ‘land with various tree species growing naturally or planted in an area more than zero point five (0.5) Hectares with crown cover more than 20 percent (20%)’. 
Delineation of the three forest categories, especially at the national and provincial levels, are made on large scale maps, and also contain types of land use other than forest, which, in a strict sense, are not forest as defined in the Forestry Law.
The following forestland types allow for secondary land uses if these do not undermine the primary role of these categories; these are Village land forest; plantations which are restricted to degraded and barren forestland; and conversion land which, in a strict sense, is no longer forestland.
According to current strategies (including the 8th National Socio-Economic Development Plan 2016-2020 (NSEDP-8), the Vision 2030 , the 10-Year Socio-Economic Development Strategy (2016-2025) , the National Green Growth Strategy 2019-2030, and the Forestry Strategy to the Year 2020 ) given the lack of detailed maps, the high rate of population increase and rapid changes in land use, it is not feasible at this stage to delineate forest and to manage it at this scale for the chosen purpose. 
The Study for Understanding Timber Flows and Control in the Lao PDR (2012) revealed that the areas mapped as protection forest were often used for agricultural production, and even included major town areas. In one case, an entire district was mapped as protection and production forests, but in reality, contained the district’s capital, large lowland agricultural areas, and a coal mining concession.
The Strategy for Agricultural Development 2011 to 2020  may also generate conflicts with the objective to establish a 70% forest cover as it allows for an expansion of agricultural production lands and increased market focused investments. However, the new Forestry Law provisions may reduce these impacts through clearer approval processes and increased transparency. 
A further example: MAF Regulation No. 360/2003, Article 16, prohibits the expansion of rice fields and shifting cultivation in conservation forests, as well as gathering of forest products, hunting, removal of plant and animal species, and any other type of forestry activities in the restricted areas of national protected areas and corridors. However, strict enforcement of these restrictions is impossible and unfeasible given the degrees of population movement and increase. Coordination among concerned sectors within these forest areas is insufficient, and due to lack of management units in some national protected areas, especially at the field level, deforestation and forest degradation may go unnoticed (Forestry Strategy to the Year 2020 of the Lao PDR, 2005), and listed prohibited practices are often continued by villagers as part of their customary rights, or under licenses issued by the relevant authority.
Through the land and forest allocation process, village boundaries and village forest and agricultural areas are delineated and ownership bestowed (Article 39 and 40 of the Forestry Law, and forest areas are classified into one of the three categories. However, Article 39 states that Village forest management planning shall be regulated by a separate specific regulation, and it is unknown if this has been issued. Specific permitted uses are detailed under Article 62-66, and in Protection forests, such uses are restricted to controlled use or buffer zones (Article 71). Village forest management is allocated (Article 120) and administered by the Village Administrative Authority (Article 39, 111 and 114). 
Conversion of village protection and conservation forests can be approved by the Provincial People’s Assembly (Article 86). Article 53 specifically restricts uncontrolled shifting cultivation practices.
Delineation of village forests can lead to double-layered classification in circumstances where a village is situated inside one of three nationally categorised forests and there is conflict between the national and village levels on the management and use of forests. 
Rights to manage village forests are often not verifiably granted to villagers. Commonly, borders of village lands are drawn on a single “hard copy”, which is a billboard in a village; if this is lost or damaged, the village loses its only legally recognised source of information on its forest rights (Kenney-Lazar, 2010).
Laos has about 1.6 million land plots, and so far about 620,000 plots have been titled, of which 300,000 are owned by the State, while the rest are villagers’ land. The government had planned to complete a land survey and allocation of lands to villagers, as well as a land title project by 2015. Land disputes were the top issue of concern raised by members of the public who called the National Assembly hotline during the June 2012 session of the National Assembly (Vientiane Times, 21 August 2012). The lack of title means that disputes can arise when allocating logging rights and establishing plantations.
Under the new Forestry Law and the Law on Enterprise 11/NA 2005, business registration is required for all participants in the plantation value chain. Article 41 of the Forestry Law (as well as references in Articles 19, 30, 63 and 68) indicates that there is a legal requirement for the registration of plantations (both plantations under concession agreements and plantations under temporary land use certificates). Article 41 notes that the steps and details for registration of planted forest, planted NTFPs and planted trees verification shall be prescribed in a specific regulation and it is unclear if such a regulation has been issued.
However, few smallholder plantations have been formally registered. According to Smith (2014), only about 10% of teak smallholder plantations are registered, as most growers do not see the benefits of getting plantation registration certificates (regulations are considered to be overly complex, with numerous steps and associated costs). There is some evidence that some farmers “borrow plantation certificates” when they sell their timber to meet this legal requirement (Smith and Phengsopha, 2014). 
Business registration is also required for the importation and selling of forestry and wood-transport equipment, including logging machinery and chainsaws (Article 38, 134, and 136), although it appears that this is inconsistently enforced and it is unknown if there are supporting instructions issued to Customs or the Ministry of Industry and Commerce. These regulations are designed to regulate machinery that could be used in illegal operations, but also potentially create barriers to the development of small-scale timber logging and processing operations.
Summary:
For all source types, there is a risk of or relating to:
•    A lack of detailed maps (showing accurate borders and zoning)
•    Low levels of technical and professional capacity to implement resulting in inappropriate, inaccurate, and inconsistent identification, planning, and management standards
•    Conflicts and inappropriate allocation and approvals while provisions under the 2007 Forestry Law have yet to be updated to reflect new provisions under the 2019 Forestry Law.
•    Conflict between villages and other types of forest management, due to;
o    Lack of titles, meaning that disputes with villages can arise when logging rights are being allocated and plantations established
o    Risk of double-layered classification, when a village is situated inside more than one of the three nationally categorised forest types 
o    Rights to management of village forests not being verifiably granted to villagers
For Plantations (smallholding), there is risk of or relating to:
•    A lack of business registration
•    Access to working capital, technical support, equitable market information, and competitive scale.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verificationStakeholder consultation
1
Verify Map of national forest categories
Provide an indication of possible location of forest management unit and potential risk in case of overlapping of development project or plantation with officially designated forest categories.
2
Verify Village Forest Management Agreement
The existence of the document reduces risk of possible violations of rights of villagers. The document can be used to assess compliance of location of timber source (tree plantation, forest conversion under development project etc.) to zoning of village area.
3
Verify Maps of village land
The existence of the document reduces risk of possible violations of rights of villagers. The document can be used to assess compliance of location of timber source (tree plantation, forest conversion under development project etc.) to zoning of village area.
4
Verify Zoning of village forests
The existence of the document reduces risk of possible violations of rights of villagers. The document can be used to assess compliance of location of timber source (tree plantation, forest conversion under development project etc.) to zoning of village area.
5
Verify Social and environmental impact assessment
Social and environmental impact assessment, including appropriate resolution measures: must be undertaken and approved before concession agreement is signed; must provide evidence of consultations with stakeholders.
6
Verify Operational plan
Operational plan on village development, participation of local people, benefit sharing etc.: must be undertaken and approved before concession agreement is signed. Must include maps with accurate borders of clearing areas, proofs of consultations with stakeholders, information on compensation to, and benefit sharing with, affected local population.
7
Verify Land title for private land or a three-year Temporary Land Use Certificate for tree planting
Land title for private land or a three-year Temporary Land Use Certificate for tree planting issued by the District Office of Natural Resources and Environment/District Agriculture and Forestry Office: legitimates right of holder to conduct commercial tree planting. Documents must include accurate descriptions of borders as well as a map
8
Consult Local villages
Consult local villages in the areas adjacent to plantations to verify the absence of conflicts
Description of legal requirements
Conflicts between villages and other types of forest management shall be avoided
VIEW MORE
Overview of Legal Requirements 
Natural forests and forest land are designated as property of the national community, with the State acting as representative in the management and allocation of forest land for use by individuals and organisations.
The Government of Laos holds national responsibility for zoning and demarcation of boundaries for each land category, including forest land (Article 12, the Land Law).
The three categories of forest in Laos managed by the government are: 
a.    National protection areas (35%) 
b.    National conservation forests (26%)
c.    National production forests (16%) 
d.    Other forestlands outside these areas (23%)
A significant share of current forests (24%) are located outside of the three mentioned forest categories and are unclassified, and there is no clarity as to which state agency is responsible for the management of these areas. 
Reclassification of different categories of forests requires approval from the government, or in some cases from the National Assembly Standing Committee.
After forest zoning, classification of forest categories, delineation of forest and forest land areas, the state allocates ownership to organisations and individuals.
Lao individuals and organisations may obtain land use rights through titles or leases. The Government of Laos land-titling project under the Ministry of Finance issues private title to Lao citizens in urban and peri-urban centres, but not for forest land or land in rural villages. 
Individuals and organisations may not own natural forest, since it is state property. 
Households and individuals can be granted the right to use and inherit plots of degraded and barren forest land for agriculture and tree planting, and can potentially obtain full property rights and title after an initial three-year trial period (Temporary Land Use Certificates) upon a showing of good management and payment of taxes, but such rights and titles may not be transferred or used as collateral. 
Foreigners do not qualify for land titles in Lao but are eligible as foreign investors to lease forest land from the State for tree planting or other specified activities.
The Forestry Law (2019) states that timber and forest resources on these lands remain the property of the State except for the planted trees of individuals, legal entities and organizations (Article 87).  In some specific cases, the Government of Laos leases forest areas as a form of concession to a village or association of villages for up to 50 years, including some commercial timber rights, upon payment of royalties and fees, in addition to customary use and management rights. For instance, Prime Ministerial Decrees have authorised village associations and lease agreements for villages in the Nakai-Nam Theun area to mitigate the costs of resettlement from the inundation zone.
Customary rights are prescribed under Article 64 of the Forestry Law. These rights are different to those associated with village rights as they extent to cultural activities that are prescribed in plans or laws.
Village-use rights. Village forest areas are defined under Article 3.8 and their permitted use under Article 3.9 of the Forestry Law. Provisions for village management and planning is prescribed under Article 39 and can apply to any forestland category. Article 39  also states that Village forest management planning shall be regulated by a separate specific regulation which can allocate exclusive customary use and protection rights with no tax obligations. This timber cannot be sold but can only be used by villages for use within that village. 
Within the village boundary, villagers are allowed to collect and sell NTFPs, and to harvest timber for domestic use. Customary use rights include logging of 5m3/year of timber from natural forest for non- commercial household and public purposes. Villagers may be allocated land for tree planting and regeneration, and ownership of the resulting trees is guaranteed upon registration. 
The Law does not specify the duration or terms of these agreements, but Prime Ministerial Decree 59 sets a minimum of 10 years.
Through the Land Use Planning and Land Allocation Programme (stipulated by MAF Guidelines on Land Use Planning and Allocation for Management and Use, No. 0822/MAF 1996), the boundaries of village forests have been identified and agreed upon between villages and district authorities. 
Village forests are classified into three categories: village-use forests, protection forests (roadside, water resources, and river-side forests) and conservation forests (sacred and cemetery forests). The MAF Regulation (0535/MAF issued in June 2001) on Village Forestry Management gives guidelines for classification of forest land allocated to villages and clarifies the rights and responsibilities of villagers in protecting, conserving and using their forest.
Plantations:
Plantations are defined under Article 3 of the Forestry Law and an objective of this law is to promote tree plantings for multiple benefits. Commercial development is encouraged (Article 54, 76, 94 and 117) where suitable lands have been identified (Article 57 and 68) and is restricted to degraded and barren forestland (Article 59, 60, and 89).   
While the Forestry Law clearly declares that all natural forests remain the sole property of the State, plantations and trees outside natural forests may be individually owned (Article 4) and those on forestlands are restricted to degraded or barren areas may be leased (Article 5).
On non-forestlands, approval from the Government is not required for individuals and organisations. However, Article 40 and 41 of the new Forestry Law does require these plantings to be registered so that a village certificate (of ownership) can be issued.
Where a right is recognised, plantation owners may have the right of occupation, use, profit, transfer and inheritance from these resources where they have an existing right (Article 94 104) and planted and maintained them with their own funds and labour (Article 126). 
Household use is permitted (Article 63, 70 and 71). Rights (Article 117, 119, 121-23, and 126) and other requirements, such as felling (Article 30) and registration (Articled 41 of the Forestry Law) are also prescribed. 
Rights to establish a plantation can be granted under a concession or lease (Articles 87-91).
PMO09 bans the issuing on new leases or concessions on government lands for rubber plantations (part 1.2) while promoting Eucalyptus, Acacia, Acacia Mangium, Teak, Bamboo and other native species (part 1.3). 
This Order continues to support the 2+3 system but requires existing agreements to be reviewed to address any gaps where benefits are not equally shared (part 1.6). Please note that this system involves farmers providing the labour and the land while the companies supply the saplings, technical assistance, and marketing (Vientiane Times, 30 March 2016). 
The Forestry and Tax Laws, and Prime Ministerial Decree 150/2000 on Land Tax, exempt tree plantations from land taxes and fees. Exemptions from land tax have been used to encourage plantation registration, as plantations eligible for tax exemptions must be registered under Directive 1849/AF.99. 
 
Legally required documents
  • Business registration certificate
  • Land title for private land or a three-year Temporary Land Use Certificate for tree planting
  • Concession/lease agreement
  • Decision on conversion of degraded and barren forest lands
Applicable legislation
VIEW LESS
1.1 Land tenure and management rights
Last updated on 2022-03-01 Lack of business registration  Specified RISK
Borders and mapping: The borders of different categories of forests are not precisely defined. Zoning and management plans for different categories of forest have yet to be developed.Forests are defined under Article 2 of the Forestry Law as ‘land with various tree species growing naturally or planted in an area more than zero point five (0.5) Hectares with crown cover more than 20 percent (20%)’. Delineation of the three forest categories,... VIEW MOREBorders and mapping: 
The borders of different categories of forests are not precisely defined. Zoning and management plans for different categories of forest have yet to be developed.
Forests are defined under Article 2 of the Forestry Law as ‘land with various tree species growing naturally or planted in an area more than zero point five (0.5) Hectares with crown cover more than 20 percent (20%)’. 
Delineation of the three forest categories, especially at the national and provincial levels, are made on large scale maps, and also contain types of land use other than forest, which, in a strict sense, are not forest as defined in the Forestry Law.
The following forestland types allow for secondary land uses if these do not undermine the primary role of these categories; these are Village land forest; plantations which are restricted to degraded and barren forestland; and conversion land which, in a strict sense, is no longer forestland.
According to current strategies (including the 8th National Socio-Economic Development Plan 2016-2020 (NSEDP-8), the Vision 2030 , the 10-Year Socio-Economic Development Strategy (2016-2025) , the National Green Growth Strategy 2019-2030, and the Forestry Strategy to the Year 2020 ) given the lack of detailed maps, the high rate of population increase and rapid changes in land use, it is not feasible at this stage to delineate forest and to manage it at this scale for the chosen purpose. 
The Study for Understanding Timber Flows and Control in the Lao PDR (2012) revealed that the areas mapped as protection forest were often used for agricultural production, and even included major town areas. In one case, an entire district was mapped as protection and production forests, but in reality, contained the district’s capital, large lowland agricultural areas, and a coal mining concession.
The Strategy for Agricultural Development 2011 to 2020  may also generate conflicts with the objective to establish a 70% forest cover as it allows for an expansion of agricultural production lands and increased market focused investments. However, the new Forestry Law provisions may reduce these impacts through clearer approval processes and increased transparency. 
A further example: MAF Regulation No. 360/2003, Article 16, prohibits the expansion of rice fields and shifting cultivation in conservation forests, as well as gathering of forest products, hunting, removal of plant and animal species, and any other type of forestry activities in the restricted areas of national protected areas and corridors. However, strict enforcement of these restrictions is impossible and unfeasible given the degrees of population movement and increase. Coordination among concerned sectors within these forest areas is insufficient, and due to lack of management units in some national protected areas, especially at the field level, deforestation and forest degradation may go unnoticed (Forestry Strategy to the Year 2020 of the Lao PDR, 2005), and listed prohibited practices are often continued by villagers as part of their customary rights, or under licenses issued by the relevant authority.
Through the land and forest allocation process, village boundaries and village forest and agricultural areas are delineated and ownership bestowed (Article 39 and 40 of the Forestry Law, and forest areas are classified into one of the three categories. However, Article 39 states that Village forest management planning shall be regulated by a separate specific regulation, and it is unknown if this has been issued. Specific permitted uses are detailed under Article 62-66, and in Protection forests, such uses are restricted to controlled use or buffer zones (Article 71). Village forest management is allocated (Article 120) and administered by the Village Administrative Authority (Article 39, 111 and 114). 
Conversion of village protection and conservation forests can be approved by the Provincial People’s Assembly (Article 86). Article 53 specifically restricts uncontrolled shifting cultivation practices.
Delineation of village forests can lead to double-layered classification in circumstances where a village is situated inside one of three nationally categorised forests and there is conflict between the national and village levels on the management and use of forests. 
Rights to manage village forests are often not verifiably granted to villagers. Commonly, borders of village lands are drawn on a single “hard copy”, which is a billboard in a village; if this is lost or damaged, the village loses its only legally recognised source of information on its forest rights (Kenney-Lazar, 2010).
Laos has about 1.6 million land plots, and so far about 620,000 plots have been titled, of which 300,000 are owned by the State, while the rest are villagers’ land. The government had planned to complete a land survey and allocation of lands to villagers, as well as a land title project by 2015. Land disputes were the top issue of concern raised by members of the public who called the National Assembly hotline during the June 2012 session of the National Assembly (Vientiane Times, 21 August 2012). The lack of title means that disputes can arise when allocating logging rights and establishing plantations.
Under the new Forestry Law and the Law on Enterprise 11/NA 2005, business registration is required for all participants in the plantation value chain. Article 41 of the Forestry Law (as well as references in Articles 19, 30, 63 and 68) indicates that there is a legal requirement for the registration of plantations (both plantations under concession agreements and plantations under temporary land use certificates). Article 41 notes that the steps and details for registration of planted forest, planted NTFPs and planted trees verification shall be prescribed in a specific regulation and it is unclear if such a regulation has been issued.
However, few smallholder plantations have been formally registered. According to Smith (2014), only about 10% of teak smallholder plantations are registered, as most growers do not see the benefits of getting plantation registration certificates (regulations are considered to be overly complex, with numerous steps and associated costs). There is some evidence that some farmers “borrow plantation certificates” when they sell their timber to meet this legal requirement (Smith and Phengsopha, 2014). 
Business registration is also required for the importation and selling of forestry and wood-transport equipment, including logging machinery and chainsaws (Article 38, 134, and 136), although it appears that this is inconsistently enforced and it is unknown if there are supporting instructions issued to Customs or the Ministry of Industry and Commerce. These regulations are designed to regulate machinery that could be used in illegal operations, but also potentially create barriers to the development of small-scale timber logging and processing operations.
Summary:
For all source types, there is a risk of or relating to:
•    A lack of detailed maps (showing accurate borders and zoning)
•    Low levels of technical and professional capacity to implement resulting in inappropriate, inaccurate, and inconsistent identification, planning, and management standards
•    Conflicts and inappropriate allocation and approvals while provisions under the 2007 Forestry Law have yet to be updated to reflect new provisions under the 2019 Forestry Law.
•    Conflict between villages and other types of forest management, due to;
o    Lack of titles, meaning that disputes with villages can arise when logging rights are being allocated and plantations established
o    Risk of double-layered classification, when a village is situated inside more than one of the three nationally categorised forest types 
o    Rights to management of village forests not being verifiably granted to villagers
For Plantations (smallholding), there is risk of or relating to:
•    A lack of business registration
•    Access to working capital, technical support, equitable market information, and competitive scale.
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
  • Plantation timber – smallholders
Risk mitigation options
Document verification
1
Verify Business registration certificate
Document confirms legitimate right to deal with logging operations and to harvest plantation timber for commercial use.
Description of legal requirements
Business registration shall be in place
VIEW MORE
Overview of Legal Requirements 
Natural forests and forest land are designated as property of the national community, with the State acting as representative in the management and allocation of forest land for use by individuals and organisations.
The Government of Laos holds national responsibility for zoning and demarcation of boundaries for each land category, including forest land (Article 12, the Land Law).
The three categories of forest in Laos managed by the government are: 
a.    National protection areas (35%) 
b.    National conservation forests (26%)
c.    National production forests (16%) 
d.    Other forestlands outside these areas (23%)
A significant share of current forests (24%) are located outside of the three mentioned forest categories and are unclassified, and there is no clarity as to which state agency is responsible for the management of these areas. 
Reclassification of different categories of forests requires approval from the government, or in some cases from the National Assembly Standing Committee.
After forest zoning, classification of forest categories, delineation of forest and forest land areas, the state allocates ownership to organisations and individuals.
Lao individuals and organisations may obtain land use rights through titles or leases. The Government of Laos land-titling project under the Ministry of Finance issues private title to Lao citizens in urban and peri-urban centres, but not for forest land or land in rural villages. 
Individuals and organisations may not own natural forest, since it is state property. 
Households and individuals can be granted the right to use and inherit plots of degraded and barren forest land for agriculture and tree planting, and can potentially obtain full property rights and title after an initial three-year trial period (Temporary Land Use Certificates) upon a showing of good management and payment of taxes, but such rights and titles may not be transferred or used as collateral. 
Foreigners do not qualify for land titles in Lao but are eligible as foreign investors to lease forest land from the State for tree planting or other specified activities.
The Forestry Law (2019) states that timber and forest resources on these lands remain the property of the State except for the planted trees of individuals, legal entities and organizations (Article 87).  In some specific cases, the Government of Laos leases forest areas as a form of concession to a village or association of villages for up to 50 years, including some commercial timber rights, upon payment of royalties and fees, in addition to customary use and management rights. For instance, Prime Ministerial Decrees have authorised village associations and lease agreements for villages in the Nakai-Nam Theun area to mitigate the costs of resettlement from the inundation zone.
Customary rights are prescribed under Article 64 of the Forestry Law. These rights are different to those associated with village rights as they extent to cultural activities that are prescribed in plans or laws.
Village-use rights. Village forest areas are defined under Article 3.8 and their permitted use under Article 3.9 of the Forestry Law. Provisions for village management and planning is prescribed under Article 39 and can apply to any forestland category. Article 39  also states that Village forest management planning shall be regulated by a separate specific regulation which can allocate exclusive customary use and protection rights with no tax obligations. This timber cannot be sold but can only be used by villages for use within that village. 
Within the village boundary, villagers are allowed to collect and sell NTFPs, and to harvest timber for domestic use. Customary use rights include logging of 5m3/year of timber from natural forest for non- commercial household and public purposes. Villagers may be allocated land for tree planting and regeneration, and ownership of the resulting trees is guaranteed upon registration. 
The Law does not specify the duration or terms of these agreements, but Prime Ministerial Decree 59 sets a minimum of 10 years.
Through the Land Use Planning and Land Allocation Programme (stipulated by MAF Guidelines on Land Use Planning and Allocation for Management and Use, No. 0822/MAF 1996), the boundaries of village forests have been identified and agreed upon between villages and district authorities. 
Village forests are classified into three categories: village-use forests, protection forests (roadside, water resources, and river-side forests) and conservation forests (sacred and cemetery forests). The MAF Regulation (0535/MAF issued in June 2001) on Village Forestry Management gives guidelines for classification of forest land allocated to villages and clarifies the rights and responsibilities of villagers in protecting, conserving and using their forest.
Plantations:
Plantations are defined under Article 3 of the Forestry Law and an objective of this law is to promote tree plantings for multiple benefits. Commercial development is encouraged (Article 54, 76, 94 and 117) where suitable lands have been identified (Article 57 and 68) and is restricted to degraded and barren forestland (Article 59, 60, and 89).   
While the Forestry Law clearly declares that all natural forests remain the sole property of the State, plantations and trees outside natural forests may be individually owned (Article 4) and those on forestlands are restricted to degraded or barren areas may be leased (Article 5).
On non-forestlands, approval from the Government is not required for individuals and organisations. However, Article 40 and 41 of the new Forestry Law does require these plantings to be registered so that a village certificate (of ownership) can be issued.
Where a right is recognised, plantation owners may have the right of occupation, use, profit, transfer and inheritance from these resources where they have an existing right (Article 94 104) and planted and maintained them with their own funds and labour (Article 126). 
Household use is permitted (Article 63, 70 and 71). Rights (Article 117, 119, 121-23, and 126) and other requirements, such as felling (Article 30) and registration (Articled 41 of the Forestry Law) are also prescribed. 
Rights to establish a plantation can be granted under a concession or lease (Articles 87-91).
PMO09 bans the issuing on new leases or concessions on government lands for rubber plantations (part 1.2) while promoting Eucalyptus, Acacia, Acacia Mangium, Teak, Bamboo and other native species (part 1.3). 
This Order continues to support the 2+3 system but requires existing agreements to be reviewed to address any gaps where benefits are not equally shared (part 1.6). Please note that this system involves farmers providing the labour and the land while the companies supply the saplings, technical assistance, and marketing (Vientiane Times, 30 March 2016). 
The Forestry and Tax Laws, and Prime Ministerial Decree 150/2000 on Land Tax, exempt tree plantations from land taxes and fees. Exemptions from land tax have been used to encourage plantation registration, as plantations eligible for tax exemptions must be registered under Directive 1849/AF.99. 
 
Legally required documents
  • Business registration certificate
  • Land title for private land or a three-year Temporary Land Use Certificate for tree planting
  • Concession/lease agreement
  • Decision on conversion of degraded and barren forest lands
Applicable legislation
VIEW LESS
1.2 Concession licenses
Last updated on 2022-03-01 Concession licences being issued for areas greater than allowed by Law  Specified RISK
General: Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). According to Wellmann (2014), screening of the concession inventory data suggests that currently abou... VIEW MOREGeneral: 
Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). 
According to Wellmann (2014), screening of the concession inventory data suggests that currently about 5 million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties. How much of this is plantation concessions is not known. 
However, the Government-supported State Land Leases and Concessions Inventory (Schönweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to compile documents for concessions and leases of a total area of only 1.1 million hectares. 
Schönweger et al. (2012) found that no line agencies, either at the central or provincial levels, had full or sufficiently detailed information on land leases and concessions granted to date. Moreover, where data was available, it was often inaccurate, and the size and location of investment projects – both allocated areas and actual developments – were frequently unknown.
Data for each project available at the provincial and district levels was rarely complete, especially with regard to documents related to the project approval process. In some cases, only one type of project document, such as the investment licence, agreement or contract was available, and for some, no documents at all were available or shared. Information about the implementation status and progress of projects (e.g. land clearance, planting, processing and production) was almost never available.
Registration of plantations is a legal requirement for all plantation owners (plantations under both concession agreements and temporary land use certificates), but few smallholder plantations have been formally registered. According to Smith (2014), only about 10% of teak smallholder plantations are registered, as most of the growers do not see the benefits of getting plantation registration certificates (regulations are overly complex, with numerous steps and associated costs). There is some evidence that some farmers “borrow plantation certificates” when they sell their timber, to meet this legal requirement (Smith and Phengsopha, 2014). 
The lack of a monitoring mechanism and on-the-ground regulatory enforcement for land concessions has created an environment in which companies feel free to proceed with development plans, with or without written permission or approval documentation. Furthermore, a lack of transparency in all land-related transactions results in situations in which citizens and local communities cannot monitor how well Laws and regulations are being implemented.
The allocation of large-scale land concessions has been a highly controversial issue in Laos over the past decade, so much so that the Government of Laos has already issued several moratoriums on land concessions. Despite the decision to extend a moratorium on the consideration and approval of proposed new large-scale rubber and eucalyptus plantation projects, at the end of January 2016 Oudomxay authorities approved a 30-year land concession on a total area of 420 hectares for a Chinese businessman to plant rubber trees in the Namor district of Oudomxay Province (KPL, 25 January 2016).
Obtaining concessions through bribes
Transparency International has ranked Laos 130th of 180 countries in their 2019 Corruption Perception Index (CPI) report , with score of 29 (which is far below the FSC’s “low risk” threshold of 50). Professor Martin Stuart-Fox argues that “…the outlook for reduction of corruption in the Lao PDR is not encouraging, despite the new anti-corruption Law. Political patronage is deeply engrained in the political culture of the Lao PDR, and in particular in its political institutions and their functioning” (Stuart-Fox, 2006).
According to the report of the Inspection Committee of the Party Central Committee, and the Government Inspection Authority, in 2018 inspection authorities uncovered 595 people involved in illegal cases of corruption relating to timber of whom 50 were government officials, 182 were businessmen and the remaining were local residents . 
The embedded problem of corruption in state agencies responsible for the management of the land resources sector has been acknowledged by many. 
According to Forest Trends research (2010), Vietnamese companies usually pay significant “invisible costs” to provincial and national authorities to obtain land for the establishment of rubber plantations. 
Kenney-Lazar (2010) presents a case in which a Vietnamese corporation provided material incentives to certain village leaders and government officials to ensure the successful acquisition of land for the establishment of a rubber plantation. 
Companies begin activities on land before receiving authorisation
The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) documented a number of cases in which companies have begun activities on land before receiving (and sometimes before even requesting) authorisation from the relevant government authority. 
Getting approval of concessions above 100 ha from authorities without proper authorisation
According to Forest Trends (2014), despite the moratoriums on the granting of new land concessions larger than 100 ha announced by the Prime Minister in May 2007 (PM Announcement No. 743), and further suspension of approvals for all investment proposals for the exploration and survey of a range of mineral ores and rubber and eucalyptus plantations (PMO No. 13) in June 2012, concessions of various sizes continue to be granted in a number of scenarios.
A number of provincial reports have provided evidence that some authorities have abused or “misinterpreted” their power and mandates. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) found that in many cases authorities at the provincial or district levels were approving land areas over the limit of their mandate. For instance, authorities of Vientiane and Xayabury provinces approved land concessions for tree plantations of 670 and 300 ha respectively, which exceed many-fold the limits of their authority. 
In order to evade the Law and grant such large concession areas at the provincial level, the land was divided into several parcels, and the approvals were made in separate documents. 
Establishment of commercial tree plantations in natural forests 
In numerous cases, plantation concessions have been issued or extended into areas where establishment of commercial tree plantations is not legally allowed. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) revealed that a considerable share of tree plantation projects granted permission (59.517 ha, or 19%) occur on land categorised as forest. Most of the tree plantation area occurring on land categorised as forest falls within protection forest (42,257 ha). A sizeable amount of tree plantation (10,127 ha) was found within areas categorised as conservation forest. 
For example, concession areas allocated to several rubber plantations were found to fall inside the Dong Hua Sao National Protected Area in Champasak Province (Schönweger et al., 2012). 
The Government revealed that allocation of rubber plantations contributed to encroachment of 39,000 ha in Phou Phanang and Phou Khao Khoay National Protected Areas in Vientiane and Borikhamxay provinces, and ordered that all encroachment into protected areas cease. The Government intended to confiscate illegally planted lands and incorporate them into the protected areas as national property (Vientiane Times, 05 April 2013). 
Forest Trends research (2010) provides an example of a Vietnamese company applying for land in Attapeu province to establish a rubber plantation for which the primary objective was to get “legal” access to timber logging in natural forest. As a result, the company was granted 20,000 ha of forest land, half of which had standing trees of marketable value. 
Despite legislation that prohibits the clearing of productive natural forest during the process of development of tree plantations, much evidence has been collected recently to prove that a number of concessions have been granted for areas such as dense forest (which means that plantation establishment begins with deforestation). 
For example, the report on the results of the state land leases and concessions inventory in Laos (Schönweger et al., 2012) presents a case in which a concession for an area of 300 ha, granted to plant rubber trees was predominantly covered by healthy secondary and primary forest. However, land survey report by the District Agriculture and Forestry Office stated that the land consisted solely of fallow forest (left after shifting cultivation, 2-7 years old), in other words, that no trees with economic value existed within the area.
Hunt (2014) highlights numerous examples of large scale clearance of dense/rich natural forests in Oji LPFL concessions (pulp wood plantations) conducted by the Government of Laos immediately prior to preparing land for plantations operations. It involved clearance of high conservation value forests – forest which meets the FSC criteria of forest areas fundamental to meeting the basic needs of local communities (e.g. subsistence, health), and/or critical to local communities’ traditional cultural identity (village conservation forest areas, among other areas). 
Baird (2014) notes that productive dry dipterocarp forest has been frequently defined as degraded, thus allowing eucalyptus plantation development to occur, even when this has caused serious negative impacts on productive habitats with great livelihood importance for local people who rely on them. According to Hunt (2014), lands designated as degraded commonly include secondary forest, or areas that are part of extensive agro-forestry cropping systems such as rotational (“shifting”) cultivation. Such areas have been shown to have a high degree of biodiversity, and the resources within these forest areas are invariably used by villagers for their livelihood needs.
One reason for this is the lack of clear legal definitions of “degraded” and “barren” forest lands, which can be zoned for conversion into planted forests, and what exactly constitutes “degradation” (Lestrelin et. al, 2013; Baird, 2014). Baird (2014) emphasises that “the concept has been left vague and open to interpretation… even while the term has remained [a] powerful determinant of what happens on the ground”. He suggests that vague wording and the lack of clear and consistent definitions gives the state more power to facilitate plantation development, or to prevent it, and to decide either way arbitrarily. 
Additionally, commercial grade timber harvested in preparation for conversion activities has become a critical source of timber in Laos (Forest Trends, 2014; Smirnov, 2015). Potential revenue from conversion timber is a strong enticement for local authorities to facilitate the development of large land concessions (including rubber and eucalyptus) in forested areas, in contravention of legislative requirements. 
Baird (2010) points out that when the Government allocates concessions for industrial crops, they only give concession holders permission to cultivate land, while logging operations associated with concession lands are usually allocated to other companies that become responsible for removing the marketable trees from “degraded” forest land before an investor clears the remaining vegetation and begins replanting the area. On the other hand, a Forest Trends report (2010) presents examples when logging could be a part of concession deals. 
In 2010, a Vietnamese corporation reported that it held rights to 300,000m3 of timber for furniture production, which was “sourced from the reclamation of land from forest for rubber plantation” in Southern Laos (Global Witness, 2013).
Much evidence has been collected indicating that concessions acquired for plantations are used as a cover for access to valuable timber resources. Some companies discontinue the projects or transfer the concessions to other companies after extracting all conversion timber, which is extremely profitable but legally questionable (Forest Trends, 2010; 2014). The legal status of this wood remains unclear, and information on the extent, volumes, use, and value of such timber is limited and inconsistent.
Furthermore, under cover of clearance of plantations, logging operators often extend the range of their logging operations into the areas surrounding the concession (Schönweger, O. et al., 2012). 
Granting concessions without maps and border demarcations 
Numerous reports provide evidences of the unavailability of maps for granted concessions. 
As shown by the concession inventory conducted in Vientiane Province in 2008-2009 (CRILNR (NLMA), 2009), the unavailability of maps and even of simple schematics identifying concession borders has been a systematic violation. According to this inventory, only 5% of all active land lease and concession projects (e.g. agriculture, plantation, mining, hydro dams) were able to provide proper maps with boundaries of lease/concession areas (12 of 237), including 3.5% of agriculture projects (4 of 114), which include plantation projects. In 21.9% of cases, representatives’ rough hand-drawn maps were available, including 27.2% of agriculture projects (31); it has been noted that these maps often “did not reflect reality”.
According to Wellmann (2014), screening of the data of the concession inventory suggests that currently about five million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties.
However, even the government-supported State Land Leases and Concessions Inventory (Shonweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to spatially reference only 53% of all concessions and leases. Of the 2,642 deals in the inventory, spatially referenced data was available for only 1,258 projects (48% of all projects) covering 587,564 hectares. The inventory also revealed several examples of low quality concession maps. In one case in 2006, a company was granted authorisation for a rubber plantation of 214 ha. At the same time, borders on the map attached to the contract covered an area of 3,411 ha. By the time the inventory was made, the developer had already cleared 345 ha of forest. 
Kenney-Lazar (2010, 2015) mentions cases of the granting of massive concessions for pulp and rubber plantations in which maps demarcating the extent of the plantation fields were made by the companies after the land had already been cleared. 
It is not unusual for concession holders to clear land outside of the agreed-upon boundaries (Kenney-Lazar, 2010). Kenney-Lazar (2010) provides an example of a Vietnamese company which acquired more land in Savannakhet province at the local level than allowed within their MOU with the central Government while district officials “only complained that the company cleared land outside of the area allocated to them, and did so without notifying the district, only apologizing and making up excuses afterward” (Kenney-Lazar, 2015).
Further, analysis of satellite images of areas with some rubber concessions in Attapeu province has revealed large areas of forest cleared beyond the legal boundaries of concessions (Global Witness, 2013).
Failing to conduct and get approval for social and environmental impact assessment before granting concession 
Numerous researchers provide evidences that companies either conduct required social and environmental impact assessments post-factum – already long after acquiring land concessions – or do not conduct them at all.
For instance, according to Kenney-Lazar (2015), a Vietnamese company cleared land in Savannakhet province for the establishment of a eucalyptus plantation before detailed surveys of what land was available had been conducted. Further, companies usually only conduct surveys if there is a conflict with villages concerning the land cleared. Another Vietnamese corporation did not conduct any environment and social impact assessments prior to being granted a concession in Attapeu province for the establishment of a rubber plantation. The required assessments were made after the project had been operational for two years (Kenney-Lazar, 2010).
Summary:
Concessions in natural forest are not allowed.
For Plantation (concessions) there is risk of or relating to:
•    Concession licences being issued as a result of corruption (bribes)
•    Licenses being issued without legal authority
•    Concessions being established without authorisation
•    Concession licences being issued for areas greater than allowed by Law (100 ha)
•    Forest being cleared for plantation concessions (illegal)
o    Within conservation forest, or
o    Established on areas that are not degraded/barren
•    Concession plantations being established without proper maps/boundaries
o    Clearing of forest outside concession boundaries
•    Concessions being established without social and environmental impact assessments
For Plantations (smallholding), there is risk of:
•    Lack of plantation certificates” and use of “borrowed” plantation certificates
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
Risk mitigation options
Document verificationField verification
1
Verify Concession/lease agreement
Concession/lease agreement for tree plantation by the Ministry of Natural Resources and Environment or Provincial/City Offices of Natural Resources and Environment: legitimates right of holder regarding commercial tree planting; shall include accurate description of concession borders and a map. Date of map must correspond to date of the signing of the agreement. The ownership of surrounding plantation concessions shall be investigated to verify if one person/company owns several adjacent concessions. This could indicate that what is officially listed as several plantation concessions on paper in fact is run as a single large concession plantation in violation with legal requirements
2
Visit Logging area
To verify that the plantation concession does not cover a greater area than 100 ha.
3
Verify Arial and satellite maps
Visual validation of boarders could also be confirmed through arial and satellite maps.
Description of legal requirements
Concession licenses shall not be granted for areas exceeding 100ha. Concessions shall not form an area exceeding 100 ha
VIEW MORE
Selection Logging and Conversion: N/A
According to the Forestry Law, Articles 28 and 29, timber harvested from natural forests remain the property of the Government and must be carried out: 
•    where there is a sustainable forest management plan and the survey is done according to Article 23 or
•    in the approved forestland conversion areas where the survey is completed according to Article 24.
All logging (Article 26) and harvesting of NTFPs (Article 27) in natural forests is undertaken in accordance with the Annual Logging Plan as specified under the Forestry Law and as ultimately approved by the Government based on National Assembly approvals. This plan is developed by MAF and its provincial counterparts.
Under PMO15 (2016), conversion project developers or construction contractors cannot carry out logging and MAF has the direct responsibility for timber harvest and sales under established harvesting units. However, under the Forestry Law, timber logging in natural forests is only allowable by enterprises legally established and possess capacity and are approved by the PAFO (Article 26, 28, 29, 89, 104, 105). Under this law, it may be possible for non-government enterprises to be registered for the purpose of logging in natural forests, as Article 134 states that businessmen cannot harvest or clear forestland ‘where is not allowed to do so by the agriculture and forestry sector’. All logging in natural forests must be undertaken with the approval, supervision and monitoring of government officials.
Plantation (concessions):
Concessions for tree plantation are restricted to degraded and barren forest lands. Concessions can be on production forestlands, but only in the form of a lease or concession for no more than 50 years (with a maximum extension of 30 years). 
•    Degraded Forestland is the forestland areas where forests have been heavily and continually damaged for many decades  and take many years to regenerate by itself, which has the crown cover not over 10% and the volume of standing trees with more than 10 cm diameter and no more than 20m3/ha (Article 3.15)
•    Barren Forestland is the forestland areas where forests have been heavily and continually damaged for many years causing the areas to be covered by Alang alang (Imperata cylindrical), Vetiver, shrub, which the trees cannot naturally regenerate by itself (Article 3.16).
The Ministry of Natural Resources and Environment, formerly the National Land Management Authority, is technically in charge of approving prescriptions for the issuing approval for all land concessions, except mining and hydro-electricity concessions. The Ministry of Planning and Investment issues final consent, with consultation across other line agencies (including the Ministry of Agriculture and Forestry, the Ministry of Industry and Commerce, the Ministry of Energy and Mines etc.) and the appropriate provincial counterparts. 
In the Lao PDR, a tree plantation is broadly defined as an operation approved by the State to plant trees on an area of degraded or barren forest land (Regulation No. 196/2000 MAF Article 2). 
Plantations eligible for registration must have an area of 1,600m2, and legislation recognises different planting systems, some of which imply fewer than 1,100 trees/ha (MAF Directive1849/AF.99).
Plantations (smallholding):
For the establishment of plantations, approval from the Government is not required for individuals and households who plant trees on land formally allocated to them and using their own funds and labour. It is not clear if village forest areas could be developed to include commercial tree plantations.
Village forest area is defined under Article 3.8 and their permitted use under Article 3.9 of the Forestry Law. Provisions for village management and planning is prescribed under Article 39 and can apply to any forestland category. Article 39 also states that village forest management planning shall be regulated by a separate specific regulation which can allocate exclusive customary use and protection rights with no tax obligations.
Three-year temporary land use certificates for tree planting on degraded forest land (three ha per labourer in a household) are issued to villagers by the District Administrative Authority in coordination with the Village Administrative Authority. More land can be requested from village and district authorities. If managed properly during the initial term, then the lessee may request the Land Management Office to issue a Land Title for long-term use (Land Law, 2003, Articles 21 and 22). 
Concessions for tree plantations are granted upon approval by the Ministry of Natural Resources and Environment or by Provincial/City Offices of Natural Resources and Environment, depending on: the category of land (degraded forest land or barren forest land), the size of the concession, and the duration of concession agreement (Decree 135/PM 2009 Article 28, Forestry Law, 2007 Articles 75 and 76). 
Approval of concessions (only for Land Title for Long Term Use) is conditional upon surveys which have to be conducted and approved before the lease or concession is granted (Forestry Law, 2007, Article 74). The following documents must be developed:
•    Study on socio-economic information and appropriateness to natural conditions, land tenure rights 
•    Business feasibility study 
•    Social and environmental impact assessment, including appropriate resolution measures, and
•    Operational plan on protection of water resources and the environment, land clearing, village development, participation of local people, benefit sharing etc.
A “technical social and economic impact assessment” is required for any tree plantation of more than 5 ha, including groups of neighbouring parcels with a total area of more than 5 ha (Regulation 196/AF, 2000 Article 4).
Procedural requirements for foreign investors to gain permission and licenses for tree plantation are described in Regulation No. 196/2000 MAF, Article 7.
The legitimacy of concession rights is confirmed by a concession registration certificate, while the terms and conditions are defined in the concession agreement (Law on Investment Promotion Articles 25, 26). 
The requirements and procedure for the registration of tree plantations are specified in Directive No. 1849/1999 MAF Articles 1-6 and Regulation No. 196/2000 MAF, Article 12 (See 1.1.4). 
In May 2007, the Prime Minister of the Lao PDR announced a moratorium on granting of new land concessions greater than 100 ha to give the Government of Laos an opportunity to review its policy on granting large-scale concessions, and to address the shortcomings of its previous land management strategy. 
In an attempt to properly regulate the existing mining and tree plantation investment projects, order No 13/PM on ceasing consideration and approval for new investment of mining exploration and survey, rubber and eucalyptus plantations was implemented on 11 June 2012. This moratorium (2012(13/PM)) on consideration and approval for proposed new rubber and eucalyptus plantation projects was extended in December 2015 by a decision of the Prime Minister’s cabinet (Vientiane Times, 25 December 2015).
The Government clarified that the moratorium does not apply to investments in tree plantations by companies operating on a 2+3 system, where farmers provide the labour and the land (often under temporary land use certificates) while the companies supply the saplings, technical assistance and marketing without large land concessions from the Government (Vientiane Times, 30 March 2016). 
 
Legally required documents
  • Land title for private land or a three-year Temporary Land Use Certificate for tree planting
Applicable legislation
VIEW LESS
1.2 Concession licenses
Last updated on 2022-03-01 Concessions being established or granted in violation of regulations Specified RISK
General: Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). According to Wellmann (2014), screening of the concession inventory data suggests that currently abou... VIEW MOREGeneral: 
Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). 
According to Wellmann (2014), screening of the concession inventory data suggests that currently about 5 million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties. How much of this is plantation concessions is not known. 
However, the Government-supported State Land Leases and Concessions Inventory (Schönweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to compile documents for concessions and leases of a total area of only 1.1 million hectares. 
Schönweger et al. (2012) found that no line agencies, either at the central or provincial levels, had full or sufficiently detailed information on land leases and concessions granted to date. Moreover, where data was available, it was often inaccurate, and the size and location of investment projects – both allocated areas and actual developments – were frequently unknown.
Data for each project available at the provincial and district levels was rarely complete, especially with regard to documents related to the project approval process. In some cases, only one type of project document, such as the investment licence, agreement or contract was available, and for some, no documents at all were available or shared. Information about the implementation status and progress of projects (e.g. land clearance, planting, processing and production) was almost never available.
Registration of plantations is a legal requirement for all plantation owners (plantations under both concession agreements and temporary land use certificates), but few smallholder plantations have been formally registered. According to Smith (2014), only about 10% of teak smallholder plantations are registered, as most of the growers do not see the benefits of getting plantation registration certificates (regulations are overly complex, with numerous steps and associated costs). There is some evidence that some farmers “borrow plantation certificates” when they sell their timber, to meet this legal requirement (Smith and Phengsopha, 2014). 
The lack of a monitoring mechanism and on-the-ground regulatory enforcement for land concessions has created an environment in which companies feel free to proceed with development plans, with or without written permission or approval documentation. Furthermore, a lack of transparency in all land-related transactions results in situations in which citizens and local communities cannot monitor how well Laws and regulations are being implemented.
The allocation of large-scale land concessions has been a highly controversial issue in Laos over the past decade, so much so that the Government of Laos has already issued several moratoriums on land concessions. Despite the decision to extend a moratorium on the consideration and approval of proposed new large-scale rubber and eucalyptus plantation projects, at the end of January 2016 Oudomxay authorities approved a 30-year land concession on a total area of 420 hectares for a Chinese businessman to plant rubber trees in the Namor district of Oudomxay Province (KPL, 25 January 2016).
Obtaining concessions through bribes
Transparency International has ranked Laos 130th of 180 countries in their 2019 Corruption Perception Index (CPI) report , with score of 29 (which is far below the FSC’s “low risk” threshold of 50). Professor Martin Stuart-Fox argues that “…the outlook for reduction of corruption in the Lao PDR is not encouraging, despite the new anti-corruption Law. Political patronage is deeply engrained in the political culture of the Lao PDR, and in particular in its political institutions and their functioning” (Stuart-Fox, 2006).
According to the report of the Inspection Committee of the Party Central Committee, and the Government Inspection Authority, in 2018 inspection authorities uncovered 595 people involved in illegal cases of corruption relating to timber of whom 50 were government officials, 182 were businessmen and the remaining were local residents . 
The embedded problem of corruption in state agencies responsible for the management of the land resources sector has been acknowledged by many. 
According to Forest Trends research (2010), Vietnamese companies usually pay significant “invisible costs” to provincial and national authorities to obtain land for the establishment of rubber plantations. 
Kenney-Lazar (2010) presents a case in which a Vietnamese corporation provided material incentives to certain village leaders and government officials to ensure the successful acquisition of land for the establishment of a rubber plantation. 
Companies begin activities on land before receiving authorisation
The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) documented a number of cases in which companies have begun activities on land before receiving (and sometimes before even requesting) authorisation from the relevant government authority. 
Getting approval of concessions above 100 ha from authorities without proper authorisation
According to Forest Trends (2014), despite the moratoriums on the granting of new land concessions larger than 100 ha announced by the Prime Minister in May 2007 (PM Announcement No. 743), and further suspension of approvals for all investment proposals for the exploration and survey of a range of mineral ores and rubber and eucalyptus plantations (PMO No. 13) in June 2012, concessions of various sizes continue to be granted in a number of scenarios.
A number of provincial reports have provided evidence that some authorities have abused or “misinterpreted” their power and mandates. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) found that in many cases authorities at the provincial or district levels were approving land areas over the limit of their mandate. For instance, authorities of Vientiane and Xayabury provinces approved land concessions for tree plantations of 670 and 300 ha respectively, which exceed many-fold the limits of their authority. 
In order to evade the Law and grant such large concession areas at the provincial level, the land was divided into several parcels, and the approvals were made in separate documents. 
Establishment of commercial tree plantations in natural forests 
In numerous cases, plantation concessions have been issued or extended into areas where establishment of commercial tree plantations is not legally allowed. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) revealed that a considerable share of tree plantation projects granted permission (59.517 ha, or 19%) occur on land categorised as forest. Most of the tree plantation area occurring on land categorised as forest falls within protection forest (42,257 ha). A sizeable amount of tree plantation (10,127 ha) was found within areas categorised as conservation forest. 
For example, concession areas allocated to several rubber plantations were found to fall inside the Dong Hua Sao National Protected Area in Champasak Province (Schönweger et al., 2012). 
The Government revealed that allocation of rubber plantations contributed to encroachment of 39,000 ha in Phou Phanang and Phou Khao Khoay National Protected Areas in Vientiane and Borikhamxay provinces, and ordered that all encroachment into protected areas cease. The Government intended to confiscate illegally planted lands and incorporate them into the protected areas as national property (Vientiane Times, 05 April 2013). 
Forest Trends research (2010) provides an example of a Vietnamese company applying for land in Attapeu province to establish a rubber plantation for which the primary objective was to get “legal” access to timber logging in natural forest. As a result, the company was granted 20,000 ha of forest land, half of which had standing trees of marketable value. 
Despite legislation that prohibits the clearing of productive natural forest during the process of development of tree plantations, much evidence has been collected recently to prove that a number of concessions have been granted for areas such as dense forest (which means that plantation establishment begins with deforestation). 
For example, the report on the results of the state land leases and concessions inventory in Laos (Schönweger et al., 2012) presents a case in which a concession for an area of 300 ha, granted to plant rubber trees was predominantly covered by healthy secondary and primary forest. However, land survey report by the District Agriculture and Forestry Office stated that the land consisted solely of fallow forest (left after shifting cultivation, 2-7 years old), in other words, that no trees with economic value existed within the area.
Hunt (2014) highlights numerous examples of large scale clearance of dense/rich natural forests in Oji LPFL concessions (pulp wood plantations) conducted by the Government of Laos immediately prior to preparing land for plantations operations. It involved clearance of high conservation value forests – forest which meets the FSC criteria of forest areas fundamental to meeting the basic needs of local communities (e.g. subsistence, health), and/or critical to local communities’ traditional cultural identity (village conservation forest areas, among other areas). 
Baird (2014) notes that productive dry dipterocarp forest has been frequently defined as degraded, thus allowing eucalyptus plantation development to occur, even when this has caused serious negative impacts on productive habitats with great livelihood importance for local people who rely on them. According to Hunt (2014), lands designated as degraded commonly include secondary forest, or areas that are part of extensive agro-forestry cropping systems such as rotational (“shifting”) cultivation. Such areas have been shown to have a high degree of biodiversity, and the resources within these forest areas are invariably used by villagers for their livelihood needs.
One reason for this is the lack of clear legal definitions of “degraded” and “barren” forest lands, which can be zoned for conversion into planted forests, and what exactly constitutes “degradation” (Lestrelin et. al, 2013; Baird, 2014). Baird (2014) emphasises that “the concept has been left vague and open to interpretation… even while the term has remained [a] powerful determinant of what happens on the ground”. He suggests that vague wording and the lack of clear and consistent definitions gives the state more power to facilitate plantation development, or to prevent it, and to decide either way arbitrarily. 
Additionally, commercial grade timber harvested in preparation for conversion activities has become a critical source of timber in Laos (Forest Trends, 2014; Smirnov, 2015). Potential revenue from conversion timber is a strong enticement for local authorities to facilitate the development of large land concessions (including rubber and eucalyptus) in forested areas, in contravention of legislative requirements. 
Baird (2010) points out that when the Government allocates concessions for industrial crops, they only give concession holders permission to cultivate land, while logging operations associated with concession lands are usually allocated to other companies that become responsible for removing the marketable trees from “degraded” forest land before an investor clears the remaining vegetation and begins replanting the area. On the other hand, a Forest Trends report (2010) presents examples when logging could be a part of concession deals. 
In 2010, a Vietnamese corporation reported that it held rights to 300,000m3 of timber for furniture production, which was “sourced from the reclamation of land from forest for rubber plantation” in Southern Laos (Global Witness, 2013).
Much evidence has been collected indicating that concessions acquired for plantations are used as a cover for access to valuable timber resources. Some companies discontinue the projects or transfer the concessions to other companies after extracting all conversion timber, which is extremely profitable but legally questionable (Forest Trends, 2010; 2014). The legal status of this wood remains unclear, and information on the extent, volumes, use, and value of such timber is limited and inconsistent.
Furthermore, under cover of clearance of plantations, logging operators often extend the range of their logging operations into the areas surrounding the concession (Schönweger, O. et al., 2012). 
Granting concessions without maps and border demarcations 
Numerous reports provide evidences of the unavailability of maps for granted concessions. 
As shown by the concession inventory conducted in Vientiane Province in 2008-2009 (CRILNR (NLMA), 2009), the unavailability of maps and even of simple schematics identifying concession borders has been a systematic violation. According to this inventory, only 5% of all active land lease and concession projects (e.g. agriculture, plantation, mining, hydro dams) were able to provide proper maps with boundaries of lease/concession areas (12 of 237), including 3.5% of agriculture projects (4 of 114), which include plantation projects. In 21.9% of cases, representatives’ rough hand-drawn maps were available, including 27.2% of agriculture projects (31); it has been noted that these maps often “did not reflect reality”.
According to Wellmann (2014), screening of the data of the concession inventory suggests that currently about five million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties.
However, even the government-supported State Land Leases and Concessions Inventory (Shonweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to spatially reference only 53% of all concessions and leases. Of the 2,642 deals in the inventory, spatially referenced data was available for only 1,258 projects (48% of all projects) covering 587,564 hectares. The inventory also revealed several examples of low quality concession maps. In one case in 2006, a company was granted authorisation for a rubber plantation of 214 ha. At the same time, borders on the map attached to the contract covered an area of 3,411 ha. By the time the inventory was made, the developer had already cleared 345 ha of forest. 
Kenney-Lazar (2010, 2015) mentions cases of the granting of massive concessions for pulp and rubber plantations in which maps demarcating the extent of the plantation fields were made by the companies after the land had already been cleared. 
It is not unusual for concession holders to clear land outside of the agreed-upon boundaries (Kenney-Lazar, 2010). Kenney-Lazar (2010) provides an example of a Vietnamese company which acquired more land in Savannakhet province at the local level than allowed within their MOU with the central Government while district officials “only complained that the company cleared land outside of the area allocated to them, and did so without notifying the district, only apologizing and making up excuses afterward” (Kenney-Lazar, 2015).
Further, analysis of satellite images of areas with some rubber concessions in Attapeu province has revealed large areas of forest cleared beyond the legal boundaries of concessions (Global Witness, 2013).
Failing to conduct and get approval for social and environmental impact assessment before granting concession 
Numerous researchers provide evidences that companies either conduct required social and environmental impact assessments post-factum – already long after acquiring land concessions – or do not conduct them at all.
For instance, according to Kenney-Lazar (2015), a Vietnamese company cleared land in Savannakhet province for the establishment of a eucalyptus plantation before detailed surveys of what land was available had been conducted. Further, companies usually only conduct surveys if there is a conflict with villages concerning the land cleared. Another Vietnamese corporation did not conduct any environment and social impact assessments prior to being granted a concession in Attapeu province for the establishment of a rubber plantation. The required assessments were made after the project had been operational for two years (Kenney-Lazar, 2010).
Summary:
Concessions in natural forest are not allowed.
For Plantation (concessions) there is risk of or relating to:
•    Concession licences being issued as a result of corruption (bribes)
•    Licenses being issued without legal authority
•    Concessions being established without authorisation
•    Concession licences being issued for areas greater than allowed by Law (100 ha)
•    Forest being cleared for plantation concessions (illegal)
o    Within conservation forest, or
o    Established on areas that are not degraded/barren
•    Concession plantations being established without proper maps/boundaries
o    Clearing of forest outside concession boundaries
•    Concessions being established without social and environmental impact assessments
For Plantations (smallholding), there is risk of:
•    Lack of plantation certificates” and use of “borrowed” plantation certificates
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
Risk mitigation options
Document verification
1
Verify Basic document justifying necessity of forest conversion
Basic document justifying necessity of forest conversion allows checking of whether authorities were empowered to sign agreement; shall include accurate description of concession borders and a map. Date of map must correspond to date of agreement’s signing.
2
Verify Concession/lease agreement
Concession/lease agreement for tree plantation by the Ministry of Natural Resources and Environment or Provincial/City Offices of Natural Resources and Environment: legitimates right of holder regarding commercial tree planting; allows checking of whether authorities were empowered to sign agreement; shall include accurate description of concession borders and a map. Date of map must correspond to date of the signing of the agreement
3
Verify Social and environmental impact assessment
Social and environmental impact assessment, including appropriate resolution measures: must be undertaken and approved before concession agreement is signed; must provide evidence that area lacks productive forests and complies with definition of degraded forest or barren land (in case of concession for establishment of tree plantation), to substantiate absence of irreversible negative effect, and to provide measures for reforestation and/or compensation of negative social and environment impact; must provide proof of consultations with stakeholders
4
Verify Operational plan
Operational plan on protection of water resources and environment, land clearing, village development, participation of local people, benefit sharing etc.: must be undertaken and approved before concession agreement is signed. Must include maps with accurate borders of clearing areas, proofs of consultations with stakeholders, information on compensation to, and benefit sharing with, affected local population
Description of legal requirements
Plantation concessions shall have concession/lease agreement in place issued following legal requirements, issued without corruption; by the correct legal authority
VIEW MORE
Selection Logging and Conversion: N/A
According to the Forestry Law, Articles 28 and 29, timber harvested from natural forests remain the property of the Government and must be carried out: 
•    where there is a sustainable forest management plan and the survey is done according to Article 23 or
•    in the approved forestland conversion areas where the survey is completed according to Article 24.
All logging (Article 26) and harvesting of NTFPs (Article 27) in natural forests is undertaken in accordance with the Annual Logging Plan as specified under the Forestry Law and as ultimately approved by the Government based on National Assembly approvals. This plan is developed by MAF and its provincial counterparts.
Under PMO15 (2016), conversion project developers or construction contractors cannot carry out logging and MAF has the direct responsibility for timber harvest and sales under established harvesting units. However, under the Forestry Law, timber logging in natural forests is only allowable by enterprises legally established and possess capacity and are approved by the PAFO (Article 26, 28, 29, 89, 104, 105). Under this law, it may be possible for non-government enterprises to be registered for the purpose of logging in natural forests, as Article 134 states that businessmen cannot harvest or clear forestland ‘where is not allowed to do so by the agriculture and forestry sector’. All logging in natural forests must be undertaken with the approval, supervision and monitoring of government officials.
Plantation (concessions):
Concessions for tree plantation are restricted to degraded and barren forest lands. Concessions can be on production forestlands, but only in the form of a lease or concession for no more than 50 years (with a maximum extension of 30 years). 
•    Degraded Forestland is the forestland areas where forests have been heavily and continually damaged for many decades  and take many years to regenerate by itself, which has the crown cover not over 10% and the volume of standing trees with more than 10 cm diameter and no more than 20m3/ha (Article 3.15)
•    Barren Forestland is the forestland areas where forests have been heavily and continually damaged for many years causing the areas to be covered by Alang alang (Imperata cylindrical), Vetiver, shrub, which the trees cannot naturally regenerate by itself (Article 3.16).
The Ministry of Natural Resources and Environment, formerly the National Land Management Authority, is technically in charge of approving prescriptions for the issuing approval for all land concessions, except mining and hydro-electricity concessions. The Ministry of Planning and Investment issues final consent, with consultation across other line agencies (including the Ministry of Agriculture and Forestry, the Ministry of Industry and Commerce, the Ministry of Energy and Mines etc.) and the appropriate provincial counterparts. 
In the Lao PDR, a tree plantation is broadly defined as an operation approved by the State to plant trees on an area of degraded or barren forest land (Regulation No. 196/2000 MAF Article 2). 
Plantations eligible for registration must have an area of 1,600m2, and legislation recognises different planting systems, some of which imply fewer than 1,100 trees/ha (MAF Directive1849/AF.99).
Plantations (smallholding):
For the establishment of plantations, approval from the Government is not required for individuals and households who plant trees on land formally allocated to them and using their own funds and labour. It is not clear if village forest areas could be developed to include commercial tree plantations.
Village forest area is defined under Article 3.8 and their permitted use under Article 3.9 of the Forestry Law. Provisions for village management and planning is prescribed under Article 39 and can apply to any forestland category. Article 39 also states that village forest management planning shall be regulated by a separate specific regulation which can allocate exclusive customary use and protection rights with no tax obligations.
Three-year temporary land use certificates for tree planting on degraded forest land (three ha per labourer in a household) are issued to villagers by the District Administrative Authority in coordination with the Village Administrative Authority. More land can be requested from village and district authorities. If managed properly during the initial term, then the lessee may request the Land Management Office to issue a Land Title for long-term use (Land Law, 2003, Articles 21 and 22). 
Concessions for tree plantations are granted upon approval by the Ministry of Natural Resources and Environment or by Provincial/City Offices of Natural Resources and Environment, depending on: the category of land (degraded forest land or barren forest land), the size of the concession, and the duration of concession agreement (Decree 135/PM 2009 Article 28, Forestry Law, 2007 Articles 75 and 76). 
Approval of concessions (only for Land Title for Long Term Use) is conditional upon surveys which have to be conducted and approved before the lease or concession is granted (Forestry Law, 2007, Article 74). The following documents must be developed:
•    Study on socio-economic information and appropriateness to natural conditions, land tenure rights 
•    Business feasibility study 
•    Social and environmental impact assessment, including appropriate resolution measures, and
•    Operational plan on protection of water resources and the environment, land clearing, village development, participation of local people, benefit sharing etc.
A “technical social and economic impact assessment” is required for any tree plantation of more than 5 ha, including groups of neighbouring parcels with a total area of more than 5 ha (Regulation 196/AF, 2000 Article 4).
Procedural requirements for foreign investors to gain permission and licenses for tree plantation are described in Regulation No. 196/2000 MAF, Article 7.
The legitimacy of concession rights is confirmed by a concession registration certificate, while the terms and conditions are defined in the concession agreement (Law on Investment Promotion Articles 25, 26). 
The requirements and procedure for the registration of tree plantations are specified in Directive No. 1849/1999 MAF Articles 1-6 and Regulation No. 196/2000 MAF, Article 12 (See 1.1.4). 
In May 2007, the Prime Minister of the Lao PDR announced a moratorium on granting of new land concessions greater than 100 ha to give the Government of Laos an opportunity to review its policy on granting large-scale concessions, and to address the shortcomings of its previous land management strategy. 
In an attempt to properly regulate the existing mining and tree plantation investment projects, order No 13/PM on ceasing consideration and approval for new investment of mining exploration and survey, rubber and eucalyptus plantations was implemented on 11 June 2012. This moratorium (2012(13/PM)) on consideration and approval for proposed new rubber and eucalyptus plantation projects was extended in December 2015 by a decision of the Prime Minister’s cabinet (Vientiane Times, 25 December 2015).
The Government clarified that the moratorium does not apply to investments in tree plantations by companies operating on a 2+3 system, where farmers provide the labour and the land (often under temporary land use certificates) while the companies supply the saplings, technical assistance and marketing without large land concessions from the Government (Vientiane Times, 30 March 2016). 
 
Legally required documents
  • Land title for private land or a three-year Temporary Land Use Certificate for tree planting
Applicable legislation
VIEW LESS
1.2 Concession licenses
Last updated on 2022-03-01 Forest being cleared for plantation concessions  Specified RISK
General: Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). According to Wellmann (2014), screening of the concession inventory data suggests that currently abou... VIEW MOREGeneral: 
Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). 
According to Wellmann (2014), screening of the concession inventory data suggests that currently about 5 million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties. How much of this is plantation concessions is not known. 
However, the Government-supported State Land Leases and Concessions Inventory (Schönweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to compile documents for concessions and leases of a total area of only 1.1 million hectares. 
Schönweger et al. (2012) found that no line agencies, either at the central or provincial levels, had full or sufficiently detailed information on land leases and concessions granted to date. Moreover, where data was available, it was often inaccurate, and the size and location of investment projects – both allocated areas and actual developments – were frequently unknown.
Data for each project available at the provincial and district levels was rarely complete, especially with regard to documents related to the project approval process. In some cases, only one type of project document, such as the investment licence, agreement or contract was available, and for some, no documents at all were available or shared. Information about the implementation status and progress of projects (e.g. land clearance, planting, processing and production) was almost never available.
Registration of plantations is a legal requirement for all plantation owners (plantations under both concession agreements and temporary land use certificates), but few smallholder plantations have been formally registered. According to Smith (2014), only about 10% of teak smallholder plantations are registered, as most of the growers do not see the benefits of getting plantation registration certificates (regulations are overly complex, with numerous steps and associated costs). There is some evidence that some farmers “borrow plantation certificates” when they sell their timber, to meet this legal requirement (Smith and Phengsopha, 2014). 
The lack of a monitoring mechanism and on-the-ground regulatory enforcement for land concessions has created an environment in which companies feel free to proceed with development plans, with or without written permission or approval documentation. Furthermore, a lack of transparency in all land-related transactions results in situations in which citizens and local communities cannot monitor how well Laws and regulations are being implemented.
The allocation of large-scale land concessions has been a highly controversial issue in Laos over the past decade, so much so that the Government of Laos has already issued several moratoriums on land concessions. Despite the decision to extend a moratorium on the consideration and approval of proposed new large-scale rubber and eucalyptus plantation projects, at the end of January 2016 Oudomxay authorities approved a 30-year land concession on a total area of 420 hectares for a Chinese businessman to plant rubber trees in the Namor district of Oudomxay Province (KPL, 25 January 2016).
Obtaining concessions through bribes
Transparency International has ranked Laos 130th of 180 countries in their 2019 Corruption Perception Index (CPI) report , with score of 29 (which is far below the FSC’s “low risk” threshold of 50). Professor Martin Stuart-Fox argues that “…the outlook for reduction of corruption in the Lao PDR is not encouraging, despite the new anti-corruption Law. Political patronage is deeply engrained in the political culture of the Lao PDR, and in particular in its political institutions and their functioning” (Stuart-Fox, 2006).
According to the report of the Inspection Committee of the Party Central Committee, and the Government Inspection Authority, in 2018 inspection authorities uncovered 595 people involved in illegal cases of corruption relating to timber of whom 50 were government officials, 182 were businessmen and the remaining were local residents . 
The embedded problem of corruption in state agencies responsible for the management of the land resources sector has been acknowledged by many. 
According to Forest Trends research (2010), Vietnamese companies usually pay significant “invisible costs” to provincial and national authorities to obtain land for the establishment of rubber plantations. 
Kenney-Lazar (2010) presents a case in which a Vietnamese corporation provided material incentives to certain village leaders and government officials to ensure the successful acquisition of land for the establishment of a rubber plantation. 
Companies begin activities on land before receiving authorisation
The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) documented a number of cases in which companies have begun activities on land before receiving (and sometimes before even requesting) authorisation from the relevant government authority. 
Getting approval of concessions above 100 ha from authorities without proper authorisation
According to Forest Trends (2014), despite the moratoriums on the granting of new land concessions larger than 100 ha announced by the Prime Minister in May 2007 (PM Announcement No. 743), and further suspension of approvals for all investment proposals for the exploration and survey of a range of mineral ores and rubber and eucalyptus plantations (PMO No. 13) in June 2012, concessions of various sizes continue to be granted in a number of scenarios.
A number of provincial reports have provided evidence that some authorities have abused or “misinterpreted” their power and mandates. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) found that in many cases authorities at the provincial or district levels were approving land areas over the limit of their mandate. For instance, authorities of Vientiane and Xayabury provinces approved land concessions for tree plantations of 670 and 300 ha respectively, which exceed many-fold the limits of their authority. 
In order to evade the Law and grant such large concession areas at the provincial level, the land was divided into several parcels, and the approvals were made in separate documents. 
Establishment of commercial tree plantations in natural forests 
In numerous cases, plantation concessions have been issued or extended into areas where establishment of commercial tree plantations is not legally allowed. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) revealed that a considerable share of tree plantation projects granted permission (59.517 ha, or 19%) occur on land categorised as forest. Most of the tree plantation area occurring on land categorised as forest falls within protection forest (42,257 ha). A sizeable amount of tree plantation (10,127 ha) was found within areas categorised as conservation forest. 
For example, concession areas allocated to several rubber plantations were found to fall inside the Dong Hua Sao National Protected Area in Champasak Province (Schönweger et al., 2012). 
The Government revealed that allocation of rubber plantations contributed to encroachment of 39,000 ha in Phou Phanang and Phou Khao Khoay National Protected Areas in Vientiane and Borikhamxay provinces, and ordered that all encroachment into protected areas cease. The Government intended to confiscate illegally planted lands and incorporate them into the protected areas as national property (Vientiane Times, 05 April 2013). 
Forest Trends research (2010) provides an example of a Vietnamese company applying for land in Attapeu province to establish a rubber plantation for which the primary objective was to get “legal” access to timber logging in natural forest. As a result, the company was granted 20,000 ha of forest land, half of which had standing trees of marketable value. 
Despite legislation that prohibits the clearing of productive natural forest during the process of development of tree plantations, much evidence has been collected recently to prove that a number of concessions have been granted for areas such as dense forest (which means that plantation establishment begins with deforestation). 
For example, the report on the results of the state land leases and concessions inventory in Laos (Schönweger et al., 2012) presents a case in which a concession for an area of 300 ha, granted to plant rubber trees was predominantly covered by healthy secondary and primary forest. However, land survey report by the District Agriculture and Forestry Office stated that the land consisted solely of fallow forest (left after shifting cultivation, 2-7 years old), in other words, that no trees with economic value existed within the area.
Hunt (2014) highlights numerous examples of large scale clearance of dense/rich natural forests in Oji LPFL concessions (pulp wood plantations) conducted by the Government of Laos immediately prior to preparing land for plantations operations. It involved clearance of high conservation value forests – forest which meets the FSC criteria of forest areas fundamental to meeting the basic needs of local communities (e.g. subsistence, health), and/or critical to local communities’ traditional cultural identity (village conservation forest areas, among other areas). 
Baird (2014) notes that productive dry dipterocarp forest has been frequently defined as degraded, thus allowing eucalyptus plantation development to occur, even when this has caused serious negative impacts on productive habitats with great livelihood importance for local people who rely on them. According to Hunt (2014), lands designated as degraded commonly include secondary forest, or areas that are part of extensive agro-forestry cropping systems such as rotational (“shifting”) cultivation. Such areas have been shown to have a high degree of biodiversity, and the resources within these forest areas are invariably used by villagers for their livelihood needs.
One reason for this is the lack of clear legal definitions of “degraded” and “barren” forest lands, which can be zoned for conversion into planted forests, and what exactly constitutes “degradation” (Lestrelin et. al, 2013; Baird, 2014). Baird (2014) emphasises that “the concept has been left vague and open to interpretation… even while the term has remained [a] powerful determinant of what happens on the ground”. He suggests that vague wording and the lack of clear and consistent definitions gives the state more power to facilitate plantation development, or to prevent it, and to decide either way arbitrarily. 
Additionally, commercial grade timber harvested in preparation for conversion activities has become a critical source of timber in Laos (Forest Trends, 2014; Smirnov, 2015). Potential revenue from conversion timber is a strong enticement for local authorities to facilitate the development of large land concessions (including rubber and eucalyptus) in forested areas, in contravention of legislative requirements. 
Baird (2010) points out that when the Government allocates concessions for industrial crops, they only give concession holders permission to cultivate land, while logging operations associated with concession lands are usually allocated to other companies that become responsible for removing the marketable trees from “degraded” forest land before an investor clears the remaining vegetation and begins replanting the area. On the other hand, a Forest Trends report (2010) presents examples when logging could be a part of concession deals. 
In 2010, a Vietnamese corporation reported that it held rights to 300,000m3 of timber for furniture production, which was “sourced from the reclamation of land from forest for rubber plantation” in Southern Laos (Global Witness, 2013).
Much evidence has been collected indicating that concessions acquired for plantations are used as a cover for access to valuable timber resources. Some companies discontinue the projects or transfer the concessions to other companies after extracting all conversion timber, which is extremely profitable but legally questionable (Forest Trends, 2010; 2014). The legal status of this wood remains unclear, and information on the extent, volumes, use, and value of such timber is limited and inconsistent.
Furthermore, under cover of clearance of plantations, logging operators often extend the range of their logging operations into the areas surrounding the concession (Schönweger, O. et al., 2012). 
Granting concessions without maps and border demarcations 
Numerous reports provide evidences of the unavailability of maps for granted concessions. 
As shown by the concession inventory conducted in Vientiane Province in 2008-2009 (CRILNR (NLMA), 2009), the unavailability of maps and even of simple schematics identifying concession borders has been a systematic violation. According to this inventory, only 5% of all active land lease and concession projects (e.g. agriculture, plantation, mining, hydro dams) were able to provide proper maps with boundaries of lease/concession areas (12 of 237), including 3.5% of agriculture projects (4 of 114), which include plantation projects. In 21.9% of cases, representatives’ rough hand-drawn maps were available, including 27.2% of agriculture projects (31); it has been noted that these maps often “did not reflect reality”.
According to Wellmann (2014), screening of the data of the concession inventory suggests that currently about five million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties.
However, even the government-supported State Land Leases and Concessions Inventory (Shonweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to spatially reference only 53% of all concessions and leases. Of the 2,642 deals in the inventory, spatially referenced data was available for only 1,258 projects (48% of all projects) covering 587,564 hectares. The inventory also revealed several examples of low quality concession maps. In one case in 2006, a company was granted authorisation for a rubber plantation of 214 ha. At the same time, borders on the map attached to the contract covered an area of 3,411 ha. By the time the inventory was made, the developer had already cleared 345 ha of forest. 
Kenney-Lazar (2010, 2015) mentions cases of the granting of massive concessions for pulp and rubber plantations in which maps demarcating the extent of the plantation fields were made by the companies after the land had already been cleared. 
It is not unusual for concession holders to clear land outside of the agreed-upon boundaries (Kenney-Lazar, 2010). Kenney-Lazar (2010) provides an example of a Vietnamese company which acquired more land in Savannakhet province at the local level than allowed within their MOU with the central Government while district officials “only complained that the company cleared land outside of the area allocated to them, and did so without notifying the district, only apologizing and making up excuses afterward” (Kenney-Lazar, 2015).
Further, analysis of satellite images of areas with some rubber concessions in Attapeu province has revealed large areas of forest cleared beyond the legal boundaries of concessions (Global Witness, 2013).
Failing to conduct and get approval for social and environmental impact assessment before granting concession 
Numerous researchers provide evidences that companies either conduct required social and environmental impact assessments post-factum – already long after acquiring land concessions – or do not conduct them at all.
For instance, according to Kenney-Lazar (2015), a Vietnamese company cleared land in Savannakhet province for the establishment of a eucalyptus plantation before detailed surveys of what land was available had been conducted. Further, companies usually only conduct surveys if there is a conflict with villages concerning the land cleared. Another Vietnamese corporation did not conduct any environment and social impact assessments prior to being granted a concession in Attapeu province for the establishment of a rubber plantation. The required assessments were made after the project had been operational for two years (Kenney-Lazar, 2010).
Summary:
Concessions in natural forest are not allowed.
For Plantation (concessions) there is risk of or relating to:
•    Concession licences being issued as a result of corruption (bribes)
•    Licenses being issued without legal authority
•    Concessions being established without authorisation
•    Concession licences being issued for areas greater than allowed by Law (100 ha)
•    Forest being cleared for plantation concessions (illegal)
o    Within conservation forest, or
o    Established on areas that are not degraded/barren
•    Concession plantations being established without proper maps/boundaries
o    Clearing of forest outside concession boundaries
•    Concessions being established without social and environmental impact assessments
For Plantations (smallholding), there is risk of:
•    Lack of plantation certificates” and use of “borrowed” plantation certificates
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
Risk mitigation options
Document verification
1
Verify Maps of tree plantation, plantation management plan for registered plantations
Verify to find out whether plantation falls within conservation or protection forests
2
Verify Map of national forest categories
Verify to find out whether timber sources are situated within protection or conservation forests
3
Verify Decision on conversion of degraded and barren forest lands
Decision on conversion of degraded and barren forest lands made by authorities of different levels (municipal, district, province, national) depending on area: confirms that decision on conversion was made by authorities according to their mandate.
4
Verify Study on socio-economic information and appropriateness to natural conditions, land tenure rights
Document must be undertaken and approved before concession agreement is signed; must include information on existence or absence of third party rights; provides evidence that area lacks productive forests and complies with definition of degraded forest or barren land (in case of concession for establishment of tree plantation).
5
Verify Social and environmental impact assessment
Social and environmental impact assessment, including appropriate resolution measures: must be undertaken and approved before concession agreement is signed; must provide evidence that area lacks productive forests and complies with definition of degraded forest or barren land (in case of concession for establishment of tree plantation), to substantiate absence of irreversible negative effect, and to provide measures for reforestation and/or compensation of negative social and environment impact; must provide proof of consultations with stakeholders.
6
Verify Concession/lease agreement
Concession/lease agreement for tree plantation by the Ministry of Natural Resources and Environment or Provincial/City Offices of Natural Resources and Environment: legitimates right of holder regarding commercial tree planting; allows checking of whether authorities were empowered to sign agreement; shall include accurate description of concession borders and a map. Date of map must correspond to date of the signing of the agreement
Description of legal requirements
Plantation concessions shall not be established within conservation forest or areas that are not degraded/barren
VIEW MORE
Selection Logging and Conversion: N/A
According to the Forestry Law, Articles 28 and 29, timber harvested from natural forests remain the property of the Government and must be carried out: 
•    where there is a sustainable forest management plan and the survey is done according to Article 23 or
•    in the approved forestland conversion areas where the survey is completed according to Article 24.
All logging (Article 26) and harvesting of NTFPs (Article 27) in natural forests is undertaken in accordance with the Annual Logging Plan as specified under the Forestry Law and as ultimately approved by the Government based on National Assembly approvals. This plan is developed by MAF and its provincial counterparts.
Under PMO15 (2016), conversion project developers or construction contractors cannot carry out logging and MAF has the direct responsibility for timber harvest and sales under established harvesting units. However, under the Forestry Law, timber logging in natural forests is only allowable by enterprises legally established and possess capacity and are approved by the PAFO (Article 26, 28, 29, 89, 104, 105). Under this law, it may be possible for non-government enterprises to be registered for the purpose of logging in natural forests, as Article 134 states that businessmen cannot harvest or clear forestland ‘where is not allowed to do so by the agriculture and forestry sector’. All logging in natural forests must be undertaken with the approval, supervision and monitoring of government officials.
Plantation (concessions):
Concessions for tree plantation are restricted to degraded and barren forest lands. Concessions can be on production forestlands, but only in the form of a lease or concession for no more than 50 years (with a maximum extension of 30 years). 
•    Degraded Forestland is the forestland areas where forests have been heavily and continually damaged for many decades  and take many years to regenerate by itself, which has the crown cover not over 10% and the volume of standing trees with more than 10 cm diameter and no more than 20m3/ha (Article 3.15)
•    Barren Forestland is the forestland areas where forests have been heavily and continually damaged for many years causing the areas to be covered by Alang alang (Imperata cylindrical), Vetiver, shrub, which the trees cannot naturally regenerate by itself (Article 3.16).
The Ministry of Natural Resources and Environment, formerly the National Land Management Authority, is technically in charge of approving prescriptions for the issuing approval for all land concessions, except mining and hydro-electricity concessions. The Ministry of Planning and Investment issues final consent, with consultation across other line agencies (including the Ministry of Agriculture and Forestry, the Ministry of Industry and Commerce, the Ministry of Energy and Mines etc.) and the appropriate provincial counterparts. 
In the Lao PDR, a tree plantation is broadly defined as an operation approved by the State to plant trees on an area of degraded or barren forest land (Regulation No. 196/2000 MAF Article 2). 
Plantations eligible for registration must have an area of 1,600m2, and legislation recognises different planting systems, some of which imply fewer than 1,100 trees/ha (MAF Directive1849/AF.99).
Plantations (smallholding):
For the establishment of plantations, approval from the Government is not required for individuals and households who plant trees on land formally allocated to them and using their own funds and labour. It is not clear if village forest areas could be developed to include commercial tree plantations.
Village forest area is defined under Article 3.8 and their permitted use under Article 3.9 of the Forestry Law. Provisions for village management and planning is prescribed under Article 39 and can apply to any forestland category. Article 39 also states that village forest management planning shall be regulated by a separate specific regulation which can allocate exclusive customary use and protection rights with no tax obligations.
Three-year temporary land use certificates for tree planting on degraded forest land (three ha per labourer in a household) are issued to villagers by the District Administrative Authority in coordination with the Village Administrative Authority. More land can be requested from village and district authorities. If managed properly during the initial term, then the lessee may request the Land Management Office to issue a Land Title for long-term use (Land Law, 2003, Articles 21 and 22). 
Concessions for tree plantations are granted upon approval by the Ministry of Natural Resources and Environment or by Provincial/City Offices of Natural Resources and Environment, depending on: the category of land (degraded forest land or barren forest land), the size of the concession, and the duration of concession agreement (Decree 135/PM 2009 Article 28, Forestry Law, 2007 Articles 75 and 76). 
Approval of concessions (only for Land Title for Long Term Use) is conditional upon surveys which have to be conducted and approved before the lease or concession is granted (Forestry Law, 2007, Article 74). The following documents must be developed:
•    Study on socio-economic information and appropriateness to natural conditions, land tenure rights 
•    Business feasibility study 
•    Social and environmental impact assessment, including appropriate resolution measures, and
•    Operational plan on protection of water resources and the environment, land clearing, village development, participation of local people, benefit sharing etc.
A “technical social and economic impact assessment” is required for any tree plantation of more than 5 ha, including groups of neighbouring parcels with a total area of more than 5 ha (Regulation 196/AF, 2000 Article 4).
Procedural requirements for foreign investors to gain permission and licenses for tree plantation are described in Regulation No. 196/2000 MAF, Article 7.
The legitimacy of concession rights is confirmed by a concession registration certificate, while the terms and conditions are defined in the concession agreement (Law on Investment Promotion Articles 25, 26). 
The requirements and procedure for the registration of tree plantations are specified in Directive No. 1849/1999 MAF Articles 1-6 and Regulation No. 196/2000 MAF, Article 12 (See 1.1.4). 
In May 2007, the Prime Minister of the Lao PDR announced a moratorium on granting of new land concessions greater than 100 ha to give the Government of Laos an opportunity to review its policy on granting large-scale concessions, and to address the shortcomings of its previous land management strategy. 
In an attempt to properly regulate the existing mining and tree plantation investment projects, order No 13/PM on ceasing consideration and approval for new investment of mining exploration and survey, rubber and eucalyptus plantations was implemented on 11 June 2012. This moratorium (2012(13/PM)) on consideration and approval for proposed new rubber and eucalyptus plantation projects was extended in December 2015 by a decision of the Prime Minister’s cabinet (Vientiane Times, 25 December 2015).
The Government clarified that the moratorium does not apply to investments in tree plantations by companies operating on a 2+3 system, where farmers provide the labour and the land (often under temporary land use certificates) while the companies supply the saplings, technical assistance and marketing without large land concessions from the Government (Vientiane Times, 30 March 2016). 
 
Legally required documents
  • Land title for private land or a three-year Temporary Land Use Certificate for tree planting
Applicable legislation
VIEW LESS
1.2 Concession licenses
Last updated on 2022-03-01 Concession plantations being established without proper maps/boundaries Specified RISK
General: Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). According to Wellmann (2014), screening of the concession inventory data suggests that currently abou... VIEW MOREGeneral: 
Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). 
According to Wellmann (2014), screening of the concession inventory data suggests that currently about 5 million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties. How much of this is plantation concessions is not known. 
However, the Government-supported State Land Leases and Concessions Inventory (Schönweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to compile documents for concessions and leases of a total area of only 1.1 million hectares. 
Schönweger et al. (2012) found that no line agencies, either at the central or provincial levels, had full or sufficiently detailed information on land leases and concessions granted to date. Moreover, where data was available, it was often inaccurate, and the size and location of investment projects – both allocated areas and actual developments – were frequently unknown.
Data for each project available at the provincial and district levels was rarely complete, especially with regard to documents related to the project approval process. In some cases, only one type of project document, such as the investment licence, agreement or contract was available, and for some, no documents at all were available or shared. Information about the implementation status and progress of projects (e.g. land clearance, planting, processing and production) was almost never available.
Registration of plantations is a legal requirement for all plantation owners (plantations under both concession agreements and temporary land use certificates), but few smallholder plantations have been formally registered. According to Smith (2014), only about 10% of teak smallholder plantations are registered, as most of the growers do not see the benefits of getting plantation registration certificates (regulations are overly complex, with numerous steps and associated costs). There is some evidence that some farmers “borrow plantation certificates” when they sell their timber, to meet this legal requirement (Smith and Phengsopha, 2014). 
The lack of a monitoring mechanism and on-the-ground regulatory enforcement for land concessions has created an environment in which companies feel free to proceed with development plans, with or without written permission or approval documentation. Furthermore, a lack of transparency in all land-related transactions results in situations in which citizens and local communities cannot monitor how well Laws and regulations are being implemented.
The allocation of large-scale land concessions has been a highly controversial issue in Laos over the past decade, so much so that the Government of Laos has already issued several moratoriums on land concessions. Despite the decision to extend a moratorium on the consideration and approval of proposed new large-scale rubber and eucalyptus plantation projects, at the end of January 2016 Oudomxay authorities approved a 30-year land concession on a total area of 420 hectares for a Chinese businessman to plant rubber trees in the Namor district of Oudomxay Province (KPL, 25 January 2016).
Obtaining concessions through bribes
Transparency International has ranked Laos 130th of 180 countries in their 2019 Corruption Perception Index (CPI) report , with score of 29 (which is far below the FSC’s “low risk” threshold of 50). Professor Martin Stuart-Fox argues that “…the outlook for reduction of corruption in the Lao PDR is not encouraging, despite the new anti-corruption Law. Political patronage is deeply engrained in the political culture of the Lao PDR, and in particular in its political institutions and their functioning” (Stuart-Fox, 2006).
According to the report of the Inspection Committee of the Party Central Committee, and the Government Inspection Authority, in 2018 inspection authorities uncovered 595 people involved in illegal cases of corruption relating to timber of whom 50 were government officials, 182 were businessmen and the remaining were local residents . 
The embedded problem of corruption in state agencies responsible for the management of the land resources sector has been acknowledged by many. 
According to Forest Trends research (2010), Vietnamese companies usually pay significant “invisible costs” to provincial and national authorities to obtain land for the establishment of rubber plantations. 
Kenney-Lazar (2010) presents a case in which a Vietnamese corporation provided material incentives to certain village leaders and government officials to ensure the successful acquisition of land for the establishment of a rubber plantation. 
Companies begin activities on land before receiving authorisation
The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) documented a number of cases in which companies have begun activities on land before receiving (and sometimes before even requesting) authorisation from the relevant government authority. 
Getting approval of concessions above 100 ha from authorities without proper authorisation
According to Forest Trends (2014), despite the moratoriums on the granting of new land concessions larger than 100 ha announced by the Prime Minister in May 2007 (PM Announcement No. 743), and further suspension of approvals for all investment proposals for the exploration and survey of a range of mineral ores and rubber and eucalyptus plantations (PMO No. 13) in June 2012, concessions of various sizes continue to be granted in a number of scenarios.
A number of provincial reports have provided evidence that some authorities have abused or “misinterpreted” their power and mandates. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) found that in many cases authorities at the provincial or district levels were approving land areas over the limit of their mandate. For instance, authorities of Vientiane and Xayabury provinces approved land concessions for tree plantations of 670 and 300 ha respectively, which exceed many-fold the limits of their authority. 
In order to evade the Law and grant such large concession areas at the provincial level, the land was divided into several parcels, and the approvals were made in separate documents. 
Establishment of commercial tree plantations in natural forests 
In numerous cases, plantation concessions have been issued or extended into areas where establishment of commercial tree plantations is not legally allowed. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) revealed that a considerable share of tree plantation projects granted permission (59.517 ha, or 19%) occur on land categorised as forest. Most of the tree plantation area occurring on land categorised as forest falls within protection forest (42,257 ha). A sizeable amount of tree plantation (10,127 ha) was found within areas categorised as conservation forest. 
For example, concession areas allocated to several rubber plantations were found to fall inside the Dong Hua Sao National Protected Area in Champasak Province (Schönweger et al., 2012). 
The Government revealed that allocation of rubber plantations contributed to encroachment of 39,000 ha in Phou Phanang and Phou Khao Khoay National Protected Areas in Vientiane and Borikhamxay provinces, and ordered that all encroachment into protected areas cease. The Government intended to confiscate illegally planted lands and incorporate them into the protected areas as national property (Vientiane Times, 05 April 2013). 
Forest Trends research (2010) provides an example of a Vietnamese company applying for land in Attapeu province to establish a rubber plantation for which the primary objective was to get “legal” access to timber logging in natural forest. As a result, the company was granted 20,000 ha of forest land, half of which had standing trees of marketable value. 
Despite legislation that prohibits the clearing of productive natural forest during the process of development of tree plantations, much evidence has been collected recently to prove that a number of concessions have been granted for areas such as dense forest (which means that plantation establishment begins with deforestation). 
For example, the report on the results of the state land leases and concessions inventory in Laos (Schönweger et al., 2012) presents a case in which a concession for an area of 300 ha, granted to plant rubber trees was predominantly covered by healthy secondary and primary forest. However, land survey report by the District Agriculture and Forestry Office stated that the land consisted solely of fallow forest (left after shifting cultivation, 2-7 years old), in other words, that no trees with economic value existed within the area.
Hunt (2014) highlights numerous examples of large scale clearance of dense/rich natural forests in Oji LPFL concessions (pulp wood plantations) conducted by the Government of Laos immediately prior to preparing land for plantations operations. It involved clearance of high conservation value forests – forest which meets the FSC criteria of forest areas fundamental to meeting the basic needs of local communities (e.g. subsistence, health), and/or critical to local communities’ traditional cultural identity (village conservation forest areas, among other areas). 
Baird (2014) notes that productive dry dipterocarp forest has been frequently defined as degraded, thus allowing eucalyptus plantation development to occur, even when this has caused serious negative impacts on productive habitats with great livelihood importance for local people who rely on them. According to Hunt (2014), lands designated as degraded commonly include secondary forest, or areas that are part of extensive agro-forestry cropping systems such as rotational (“shifting”) cultivation. Such areas have been shown to have a high degree of biodiversity, and the resources within these forest areas are invariably used by villagers for their livelihood needs.
One reason for this is the lack of clear legal definitions of “degraded” and “barren” forest lands, which can be zoned for conversion into planted forests, and what exactly constitutes “degradation” (Lestrelin et. al, 2013; Baird, 2014). Baird (2014) emphasises that “the concept has been left vague and open to interpretation… even while the term has remained [a] powerful determinant of what happens on the ground”. He suggests that vague wording and the lack of clear and consistent definitions gives the state more power to facilitate plantation development, or to prevent it, and to decide either way arbitrarily. 
Additionally, commercial grade timber harvested in preparation for conversion activities has become a critical source of timber in Laos (Forest Trends, 2014; Smirnov, 2015). Potential revenue from conversion timber is a strong enticement for local authorities to facilitate the development of large land concessions (including rubber and eucalyptus) in forested areas, in contravention of legislative requirements. 
Baird (2010) points out that when the Government allocates concessions for industrial crops, they only give concession holders permission to cultivate land, while logging operations associated with concession lands are usually allocated to other companies that become responsible for removing the marketable trees from “degraded” forest land before an investor clears the remaining vegetation and begins replanting the area. On the other hand, a Forest Trends report (2010) presents examples when logging could be a part of concession deals. 
In 2010, a Vietnamese corporation reported that it held rights to 300,000m3 of timber for furniture production, which was “sourced from the reclamation of land from forest for rubber plantation” in Southern Laos (Global Witness, 2013).
Much evidence has been collected indicating that concessions acquired for plantations are used as a cover for access to valuable timber resources. Some companies discontinue the projects or transfer the concessions to other companies after extracting all conversion timber, which is extremely profitable but legally questionable (Forest Trends, 2010; 2014). The legal status of this wood remains unclear, and information on the extent, volumes, use, and value of such timber is limited and inconsistent.
Furthermore, under cover of clearance of plantations, logging operators often extend the range of their logging operations into the areas surrounding the concession (Schönweger, O. et al., 2012). 
Granting concessions without maps and border demarcations 
Numerous reports provide evidences of the unavailability of maps for granted concessions. 
As shown by the concession inventory conducted in Vientiane Province in 2008-2009 (CRILNR (NLMA), 2009), the unavailability of maps and even of simple schematics identifying concession borders has been a systematic violation. According to this inventory, only 5% of all active land lease and concession projects (e.g. agriculture, plantation, mining, hydro dams) were able to provide proper maps with boundaries of lease/concession areas (12 of 237), including 3.5% of agriculture projects (4 of 114), which include plantation projects. In 21.9% of cases, representatives’ rough hand-drawn maps were available, including 27.2% of agriculture projects (31); it has been noted that these maps often “did not reflect reality”.
According to Wellmann (2014), screening of the data of the concession inventory suggests that currently about five million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties.
However, even the government-supported State Land Leases and Concessions Inventory (Shonweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to spatially reference only 53% of all concessions and leases. Of the 2,642 deals in the inventory, spatially referenced data was available for only 1,258 projects (48% of all projects) covering 587,564 hectares. The inventory also revealed several examples of low quality concession maps. In one case in 2006, a company was granted authorisation for a rubber plantation of 214 ha. At the same time, borders on the map attached to the contract covered an area of 3,411 ha. By the time the inventory was made, the developer had already cleared 345 ha of forest. 
Kenney-Lazar (2010, 2015) mentions cases of the granting of massive concessions for pulp and rubber plantations in which maps demarcating the extent of the plantation fields were made by the companies after the land had already been cleared. 
It is not unusual for concession holders to clear land outside of the agreed-upon boundaries (Kenney-Lazar, 2010). Kenney-Lazar (2010) provides an example of a Vietnamese company which acquired more land in Savannakhet province at the local level than allowed within their MOU with the central Government while district officials “only complained that the company cleared land outside of the area allocated to them, and did so without notifying the district, only apologizing and making up excuses afterward” (Kenney-Lazar, 2015).
Further, analysis of satellite images of areas with some rubber concessions in Attapeu province has revealed large areas of forest cleared beyond the legal boundaries of concessions (Global Witness, 2013).
Failing to conduct and get approval for social and environmental impact assessment before granting concession 
Numerous researchers provide evidences that companies either conduct required social and environmental impact assessments post-factum – already long after acquiring land concessions – or do not conduct them at all.
For instance, according to Kenney-Lazar (2015), a Vietnamese company cleared land in Savannakhet province for the establishment of a eucalyptus plantation before detailed surveys of what land was available had been conducted. Further, companies usually only conduct surveys if there is a conflict with villages concerning the land cleared. Another Vietnamese corporation did not conduct any environment and social impact assessments prior to being granted a concession in Attapeu province for the establishment of a rubber plantation. The required assessments were made after the project had been operational for two years (Kenney-Lazar, 2010).
Summary:
Concessions in natural forest are not allowed.
For Plantation (concessions) there is risk of or relating to:
•    Concession licences being issued as a result of corruption (bribes)
•    Licenses being issued without legal authority
•    Concessions being established without authorisation
•    Concession licences being issued for areas greater than allowed by Law (100 ha)
•    Forest being cleared for plantation concessions (illegal)
o    Within conservation forest, or
o    Established on areas that are not degraded/barren
•    Concession plantations being established without proper maps/boundaries
o    Clearing of forest outside concession boundaries
•    Concessions being established without social and environmental impact assessments
For Plantations (smallholding), there is risk of:
•    Lack of plantation certificates” and use of “borrowed” plantation certificates
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
Risk mitigation options
Document verificationField verification
1
Verify Concession/lease agreement
Concession/lease agreement for tree plantation by the Ministry of Natural Resources and Environment or Provincial/City Offices of Natural Resources and Environment: legitimates right of holder regarding commercial tree planting; shall include accurate description of concession borders and a map. Date of map must correspond to date of the signing of the agreement.
2
Visit Logging area
Onsite verification to verify that mapped boundaries ar reflect the boundaries on the ground.
3
Verify arial and satellite maps
Visual validation of boarders could also be confirmed through arial and satellite maps.
Description of legal requirements
Concession maps/boundaries shall be well established and reflect the accurate situation on the ground
VIEW MORE
Selection Logging and Conversion: N/A
According to the Forestry Law, Articles 28 and 29, timber harvested from natural forests remain the property of the Government and must be carried out: 
•    where there is a sustainable forest management plan and the survey is done according to Article 23 or
•    in the approved forestland conversion areas where the survey is completed according to Article 24.
All logging (Article 26) and harvesting of NTFPs (Article 27) in natural forests is undertaken in accordance with the Annual Logging Plan as specified under the Forestry Law and as ultimately approved by the Government based on National Assembly approvals. This plan is developed by MAF and its provincial counterparts.
Under PMO15 (2016), conversion project developers or construction contractors cannot carry out logging and MAF has the direct responsibility for timber harvest and sales under established harvesting units. However, under the Forestry Law, timber logging in natural forests is only allowable by enterprises legally established and possess capacity and are approved by the PAFO (Article 26, 28, 29, 89, 104, 105). Under this law, it may be possible for non-government enterprises to be registered for the purpose of logging in natural forests, as Article 134 states that businessmen cannot harvest or clear forestland ‘where is not allowed to do so by the agriculture and forestry sector’. All logging in natural forests must be undertaken with the approval, supervision and monitoring of government officials.
Plantation (concessions):
Concessions for tree plantation are restricted to degraded and barren forest lands. Concessions can be on production forestlands, but only in the form of a lease or concession for no more than 50 years (with a maximum extension of 30 years). 
•    Degraded Forestland is the forestland areas where forests have been heavily and continually damaged for many decades  and take many years to regenerate by itself, which has the crown cover not over 10% and the volume of standing trees with more than 10 cm diameter and no more than 20m3/ha (Article 3.15)
•    Barren Forestland is the forestland areas where forests have been heavily and continually damaged for many years causing the areas to be covered by Alang alang (Imperata cylindrical), Vetiver, shrub, which the trees cannot naturally regenerate by itself (Article 3.16).
The Ministry of Natural Resources and Environment, formerly the National Land Management Authority, is technically in charge of approving prescriptions for the issuing approval for all land concessions, except mining and hydro-electricity concessions. The Ministry of Planning and Investment issues final consent, with consultation across other line agencies (including the Ministry of Agriculture and Forestry, the Ministry of Industry and Commerce, the Ministry of Energy and Mines etc.) and the appropriate provincial counterparts. 
In the Lao PDR, a tree plantation is broadly defined as an operation approved by the State to plant trees on an area of degraded or barren forest land (Regulation No. 196/2000 MAF Article 2). 
Plantations eligible for registration must have an area of 1,600m2, and legislation recognises different planting systems, some of which imply fewer than 1,100 trees/ha (MAF Directive1849/AF.99).
Plantations (smallholding):
For the establishment of plantations, approval from the Government is not required for individuals and households who plant trees on land formally allocated to them and using their own funds and labour. It is not clear if village forest areas could be developed to include commercial tree plantations.
Village forest area is defined under Article 3.8 and their permitted use under Article 3.9 of the Forestry Law. Provisions for village management and planning is prescribed under Article 39 and can apply to any forestland category. Article 39 also states that village forest management planning shall be regulated by a separate specific regulation which can allocate exclusive customary use and protection rights with no tax obligations.
Three-year temporary land use certificates for tree planting on degraded forest land (three ha per labourer in a household) are issued to villagers by the District Administrative Authority in coordination with the Village Administrative Authority. More land can be requested from village and district authorities. If managed properly during the initial term, then the lessee may request the Land Management Office to issue a Land Title for long-term use (Land Law, 2003, Articles 21 and 22). 
Concessions for tree plantations are granted upon approval by the Ministry of Natural Resources and Environment or by Provincial/City Offices of Natural Resources and Environment, depending on: the category of land (degraded forest land or barren forest land), the size of the concession, and the duration of concession agreement (Decree 135/PM 2009 Article 28, Forestry Law, 2007 Articles 75 and 76). 
Approval of concessions (only for Land Title for Long Term Use) is conditional upon surveys which have to be conducted and approved before the lease or concession is granted (Forestry Law, 2007, Article 74). The following documents must be developed:
•    Study on socio-economic information and appropriateness to natural conditions, land tenure rights 
•    Business feasibility study 
•    Social and environmental impact assessment, including appropriate resolution measures, and
•    Operational plan on protection of water resources and the environment, land clearing, village development, participation of local people, benefit sharing etc.
A “technical social and economic impact assessment” is required for any tree plantation of more than 5 ha, including groups of neighbouring parcels with a total area of more than 5 ha (Regulation 196/AF, 2000 Article 4).
Procedural requirements for foreign investors to gain permission and licenses for tree plantation are described in Regulation No. 196/2000 MAF, Article 7.
The legitimacy of concession rights is confirmed by a concession registration certificate, while the terms and conditions are defined in the concession agreement (Law on Investment Promotion Articles 25, 26). 
The requirements and procedure for the registration of tree plantations are specified in Directive No. 1849/1999 MAF Articles 1-6 and Regulation No. 196/2000 MAF, Article 12 (See 1.1.4). 
In May 2007, the Prime Minister of the Lao PDR announced a moratorium on granting of new land concessions greater than 100 ha to give the Government of Laos an opportunity to review its policy on granting large-scale concessions, and to address the shortcomings of its previous land management strategy. 
In an attempt to properly regulate the existing mining and tree plantation investment projects, order No 13/PM on ceasing consideration and approval for new investment of mining exploration and survey, rubber and eucalyptus plantations was implemented on 11 June 2012. This moratorium (2012(13/PM)) on consideration and approval for proposed new rubber and eucalyptus plantation projects was extended in December 2015 by a decision of the Prime Minister’s cabinet (Vientiane Times, 25 December 2015).
The Government clarified that the moratorium does not apply to investments in tree plantations by companies operating on a 2+3 system, where farmers provide the labour and the land (often under temporary land use certificates) while the companies supply the saplings, technical assistance and marketing without large land concessions from the Government (Vientiane Times, 30 March 2016). 
 
Legally required documents
  • Land title for private land or a three-year Temporary Land Use Certificate for tree planting
Applicable legislation
VIEW LESS
1.3 Management and harvesting planning
Last updated on 2022-03-01 Lack of social and environmental impact assessments Specified RISK
General - Annual logging plan: The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested... VIEW MOREGeneral - Annual logging plan: 
The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested by necessity of forest clearance for development projects. In practice, however, requests for quota are usually bound up with the financial needs of central and local authorities and demands for raw materials by the various sawmills, furniture makers and other wood processing factories in each province (Baird, 2010; Forest Strategy to the Year 2020 of the Lao PDR, 2005).
Minister of Agriculture and Forestry, Dr Lien Thikeo, describing forestry management in Laos, highlighted that officials have misunderstood the division of responsibility between the central and local levels, and that some village and district authorities approve wood quotas for entrepreneurs despite the fact that it is not their role to do so (Vientiane Times, 14 June 2016).
Deputy Minister of Agriculture and Forestry, Mr Thongphat Vongmany, also stressed the point that many local (provincial and district) authorities have violated the Forestry Law in the past by granting logging permission for timber not included in the Annual Logging Plan and without having a Lawful right (Vientiane Times, 14 June 2016). 
The WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber harvested in Laos is in doubt because the Government of Laos lacks reliable information on issued logging licenses (quotas). Furthermore, numerous signs have been observed in production forest areas of locals felling and processing logs into sawnwood/planks. This is done without logging permits and undermines the Annual logging plan. 
Selective logging:
Since the 2011-12 season, the Lao government has not issued national quotas on logging in production forest areas before a forest survey and forest management plan have been made. The moratorium was articulated in Order No. 31/PM 2013, while for the first time a decision not to approve Annual Logging Plan in production forest areas was announced by Deputy Prime Minister on January 26, 2012 (Vientiane Times, 27 January 2012). 
Agreement No. 32/PM 2012, Article 4, called for urgent development of forest management plans for production forest and that these be completed in 2015. The Ministry of Agriculture and Forestry aimed to complete a survey on the remaining areas of production forest which had yet to be surveyed and assessed by 2015 (Vientiane Times, 05 May 2014). However, work was still in progress in the first half of 2016. According to an official from the Forest Department of the Ministry of Agriculture and Forestry, by May 2016 the forest survey was about 50 or 60 percent complete (Vientiane Times, 09 May 2016). Order No. 15/PM on 13 May 2016 reinstated the temporary suspension of logging in production forest, and stressed the necessity of carrying on the development of production forest management plans (Article 4). 
As the Government of Laos has the opportunity to allow logging in national forests in any given year, the risks in relation to selective logging are described based on the practices of selective logging before the moratorium was in place. Whether the risk specification will be changed if selective logging is allowed depends on whether the legislation is properly implemented. 
According to the Forest Strategy to the Year 2020 of the Lao PDR (2005), it was reported that occasionally:
•    Management plans for production forest areas are not implemented, 
•    Logging has been undertaken immediately after completion of the management survey, without awaiting the pre-logging survey or tree marking, and
•    In spite of long-term logging plans, logging rotations and annual coupe areas specified in management plans, logging actually proceeds predominantly in accessible or well-endowed areas, or focuses on higher value trees. 
Many researchers have reported that personnel of District Agriculture and Forestry offices responsible for coupe demarcation in accordance with management plans have no relevant experience (for instance, working with maps), lack the necessary equipment and, what is more, important foresters are not incentivised to fulfil these duties. This, combined with their very low salaries, makes it easier for them to participate in corrupt management practices (Hodgdon, 2010).
For instance, inspection in an FSC-certified production forest area (Thapangtong districts of Savannaket province) with a valid forest management plan and approved logging plans (Jonsson, 2006) revealed that: 
•    On all inspected logging sites, no tree was marked as per requirements (simplified marking was done with bad paint and in such a way that it was often impossible to read the numbers), and
•    Most of the tree maps did not have skid trails marked. 
Ghost inventories and inaccurate inventory
Timber logged from conversion forest areas has generally not been subject to a forest inventory or of sufficient quality to allow effective monitoring and accountability. Consequently, logs were often sourced from outside approved areas (noting such areas were in themselves usually poorly defined) and either directly exported or laundered by the mixing of logs from unauthorized areas.
According to Baird (2010), most pre-logging inventory in production forest areas was not actually done at all, let alone according to the stated rules. Instead, officials often conduct “ghost inventories”, while they sit in government offices, or at home. 
Given that many production forests have already been depleted by predatory logging, forestry officials have fabricate survey data in such a way as to overestimate volumes of particular commercial species. Extra volume of timber is acquired from elsewhere (including national protected areas) and then it is effectively laundered as legal (Baird, 2010). 
It is a well-known practice that authorities at different levels (national, provincial, district) allocate various kinds of “special” logging plans in categorised forests over and above the harvestable volumes as per approved management plans in production forest areas and logging plans for clearance in areas with development projects. As timber resources are being deprived, this further undermines the inventory and management planning conducted for selective logging. According to Baird (2010), there are various kinds of “special” logging plans, including: for deadwood, debt repayment, barter-development, military logging, district and village construction etc. The specific terms for many of these logging plans vary, and the arrangements are often unclear, or at least not transparent to a large number of officials, let alone the general public, and the terms are not included in the management plan (see more about “Special logging plans” under section 1.4, Logging Permits). This practice also violates the Forestry Law, which allows timber logging only under the national annual logging plan.
All types of “special” quotas are difficult to control. Logging sites are allocated in areas with good forest stands with no regard for basic forestry practices. Allocation of special quotas in production forest areas places an additional burden on timber resources, undermining the expediency of forest management plans and depreciating production forest areas as a future source of commercial timber. In 2012, Agreement No. 32/PM Article 5 required authorities to approve special logging plans only in the areas of infrastructure development projects, clearance for tree and industrial crop plantation establishment which have already been approved by the Government, and with proper management. However, this is often not the case. It is quite likely that residual timber stock in production forest areas has already been significantly diminished compared to the volumes shown in surveys, as in reality timber extraction in production forest areas has continued unabated (Smirnov, 2015).
Conversion:
There is evidence that management and planning of logging in areas with development projects fail to comply even with basic requirements of the relevant legislation. The required total measurement of all trees of exploitable diameter is unfeasible under current conditions due to financial and technical restrictions, therefore the survey must be conducted in sampling plots representative of the main forest formations. 
For road construction, rigorous documentation is typically lacking by the start of construction, and projection of the route after the beginning of construction is common practice. In such conditions it is infeasible to estimate expected volumes and species composition prior to the beginning of the work (Smirnov, 2015).
Two detailed case studies on timber logging under quotas for road construction and limestone quarry conducted by the WWF (Smirnov, 2015) have revealed the following list of major non-compliances in relation to conversion of the area: 
•    There were no maps with correct borders of concessions for what forest land should be converted. 
•    In case of road construction, there were reasons to believe that a pre-felling inventory was not undertaken at all, and that documents included fictitious data (“ghost inventory”). 
•    In case of limestone quarry pre-felling, an inventory was conducted only for a part of the territory, and the survey recorded only trees with a larger diameter (>30 cm) than is required by Law, meaning that many trees that should have been measured were not. 
•    This partial pre-felling inventory was completed more than two months after provincial the logging plan had received government approval. Thus, the approved national Annual Logging Plan included only indicative amounts, even though legislation requires provincial authorities to submit applications for approval with precise specification of expected volume and species composition based on results of pre-felling inventories. Moreover, pre-felling inventory was complete already after logging under this quota commenced. 
•    No logging plans were ever made.
•    Border demarcation was not carried out. 
According to the Tropical Rainforest Programme report of 2000, logging of flooding areas is often approved for conversion and starts well before the feasibility of proposed hydropower dams has been assessed. There has been criticism that in some cases dam proposals are nothing more than a front for logging. For instance, logging under the pretext of clearance of the area to be flooded for the Xekong 4 hydropower dam continued after the Lao government announced its decision to close the project due to inaction of the developer, and the commencement of coal mining within the proposed flooding areas (Smirnov, 2015).
The WWF report (2000) also questioned the practical necessity of conversion of many hundreds of thousands of hectares of forest for limestone quarrying given that the actual annual rate of expansion of limestone quarries was less than ten hectares (Smirnov, 2015). 
In an interview with local mass media in June 2014, the Deputy Minister of Industry and Commerce, Mr. Bounmy Manivong, recognised the existence of loopholes which allow companies to legalise timber from unauthorised sources under the cover of conversion timber harvested during land clearance (mining, road and electricity grid construction projects, flooded water catchment areas with planned hydropower dam project constructions). The Deputy Director General of the Ministry of Agriculture and Forestry's Forest Inspection Department, Mr Paphakon Vongxay, gave examples of cases in which some companies that were involved in road construction began cutting down trees in an area larger than that which was necessary for the road (Vientiane Times, 24 July 2014). Usually a permit is issued, but these permits are issued based on ghost inventories. 
For geological prospecting and exploration concessions, which usually cover vast areas, a lack of specific regulations on management and logging planning creates especially favourable opportunities for illegal logging. It is unclear whether reduction of timber stands resulting from logging in the course of land clearance for development projects is recorded and reflected in forest management plans with subsequent recalculation of annual allowable cut in cases where areas with development projects fall inside production forest areas. Otherwise, this unrecorded additional burden on timber resources undermines the principle of sustainability which underlies the forest management plans.
Plantations:
Regulations require plantation owners to undertake all operations (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities, harvest of planted trees for commercial purposes etc.) in compliance with approved plantation management plans and the technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11, 14). However, these rules are not yet promulgated and often management plans are not developed for plantations.
In the absence of plantation management plans, evidence suggests that plantations are inadequately managed – silviculture practices, such as thinning, pruning and weeding, do not occur as required (Smith and Phengsopha, 2014).
Summary:
For the Annual Logging Plan, there is risk that the Annual Logging Plan is based on inadequate inventory and requests from districts, leading to approvals for logging not reflecting the resources available on the ground. This picture is further distorted by “special logging plans” that are issued without taking the annual logging plans into consideration. 
For all source types, there is risk of or relating to:
•    Wood quotas approved by officials without legal authority
•    Lack of inventory survey, or documents which include fictitious data (“ghost inventory”)
•    Lack of, or delay in, logging/management plans
•    Lack of border demarcation
For Selective logging there is risk of:
•    Lack of tree marking, or marking not done according to requirements (bad paint/unclear marking)
For Conversion there is risk of or relating to:
•    Logging in areas with development projects fails to comply with basic requirements of relevant forest legislation
•    Maps with no or incorrect borders of concessions for what forest land should be converted
•    Conversion for road construction: lack of documentation by the start of construction, and projection of the route done after construction has begun
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
Risk mitigation options
Document verification
1
Verify Social and environmental impact assessment
Social and environmental impact assessment, including appropriate resolution measures: must be undertaken and approved before concession agreement is signed; must provide evidence that area lacks productive forests and complies with definition of degraded forest or barren land (in case of concession for establishment of tree plantation), to substantiate absence of irreversible negative effect, and to provide measures for reforestation and/or compensation of negative social and environment impact; must provide proof of consultations with stakeholders.
Description of legal requirements
Social and environmental impact assessment shall be in place
VIEW MORE
General - Annual logging plan: 
According to the Forestry Law, the main document allowing logging in natural and plantation forests is the (national) Annual Logging Plan approved by the National Assembly
This divides quotas amongst the Provinces, where the District Agriculture and Forestry Offices (DAFOs) distribute provincial logging plans amongst the districts and, together with their provincial counterparts (PAFOs), to individual production forests, based on the approval of the Government. 
The Annual Logging Plan is determined on the basis of a proposal prepared by the Ministry of Agriculture and Forestry, and the proposal itself is prepared on the basis of applications submitted by provincial authorities
Provincial and Capital City Agriculture and Forestry Offices summarise annual logging plans, which include the results of pre-logging inventories in production forest areas and in areas with various development projects (roads, transmission lines, hydropower dam construction, mining, clearance for tree and industrial crop plantations etc.) which have already been approved by the Government, in their provinces. 
After the Government and the National Assembly approve the Annual Logging Plan for the country, the Ministry of Agriculture and Forestry issues the national Annual Logging Plan and then designates logging volumes for each province based on the proposed logging plans for each province. 
Logging of natural forests is only officially allowed in Production Forests (Article 28) and approved conversion areas (Article 29) under approved logging plans (Article 26 or 29) and where resource assessment surveys (Article 20) and inventory (volume and quality species) surveys (Article 23 or 24) and sustainable management plans (Article 28) have been completed.
Approval should be made in July of each year to allow logging over the dry season (generally October to April), and the approval of additional quotas is strictly prohibited (PMO15, Part 7.2 states that “For logs harvested beyond the approved quota, they are subjected to confiscate and become the State asset and strictly conduct prosecutions to the offenders”). An example of government approval of the Annual Logging Plan is Notice No. 135/2013 GO on the Implementation of the Tree Plantation & Forest Regeneration Plan and the Timber Logging and NTFP Logging Plan for the Year 2012 ± 2013, 30 January 2013, Article 1 on timber quotas, and associated tables.
Article 20 appoints MAF to ‘to lead the survey of forest and forest resources ‘, and their provincial counterparts to coordinate and implement them (Article 150). It is an offence to falsify survey data (Article 133).  Businessmen can undertake resource surveys with permission (Article 134), which would presumably under approval of MAF.
Selective logging:
Commercial timber logging in natural production forest areas is only permitted where a forest inventory survey (Article 23 and 24) and forest management plan have been conducted and developed for production land (Article 28), and on the basis of a pre-logging inventory survey for conversion land (Article 29).
The Department of Forestry of the Ministry of Agriculture and Forestry has the overall responsibility for coordinating preparation of management plans in association with relevant sectors and local authorities, as well as for final endorsement of these plans (Article 22, 39).
The template of management plans and general principles of planning, the pre-logging inventory, and tree marking are described in Guideline No. 2156/2006 DOF Part III and Regulation No. 0108/2005 MAF, Article 8.
The period of validity of the forest management plan corresponds to a 15-20 year cutting cycle, meaning that every 15 or 20 years the management plan must be revised and updated (Regulation No. 0108/2005 MAF Article 9, Guideline No. 2156/2006 DOF Part IV).
For logging in production forest areas, District Agriculture and Forestry Offices prepare a logging plan based on the forest management plan and pre-logging inventory report approved by the Department of Forestry.
The main requirements of the pre-harvest inventory in production forest areas are listed in the Forestry Law.
The pre-harvest inventory shall be conducted in a harvestable compartment one year before a harvest operation, and includes (Regulation No. 0108/2005, Article 8):
A 100 % inventory of all species of large trees that have a girth equal to or greater than an allowable girth for harvest defined in the MAF regulation
A listing of tree species assessing stand quality and mapping location of large trees that have been previously listed, and
The designing of skid trails for log extraction, and defining of sites for log yards I and II.
All boundaries of licensed logging areas for natural forests shall be clearly demarcated on maps of an appropriate scale, and on the ground. Logging plans shall include:
Topographic map, with scale 1:25,000-1:50,000
Forest management map, with scale 1:10,000-1:25,000, and
Tree location map, with scale 1:1,000 or 1:2,000
Guideline No. 2155/2006 Part V sets very detailed requirements for the selection of trees to be cut and to leave standing. Part VI describes the tree marking procedure. Results of the Pre-harvest Inventory and Tree Marking are approved by the Provincial Agriculture and Forestry Office (Regulation No. 0108/2005 Article 9).
Conversion:
Forest legislation requires precise specification of expected volume and species composition in the annual plan for timber to be harvested in areas of hydropower development, mining, infrastructure construction. This is to be based on the result of the pre-felling survey (Forestry Law, 2007, Article 18; Order No. 17/2008 PM Article 5; Order No. 15/PM, 13 May 2016, Article 4.1).
Current regulations on management and logging planning do not cover logging in the course of clearance of an area for mining.
Under Article 29 of the Forestry Law (2019), the GoL appoints a ‘responsible committee to manage, monitor and inspect the logging in accordance with regulations’. This committee is responsible for operational planning, appointing a logging enterprise, compliance monitoring, and inventory management at log yards I and II (as per Article 32).
The procedure for forming the supervision committee responsible for management of logging and clearing in areas with hydropower development, and its rights and duties, are described in Regulation No. 0112/2008 MAF Article 25 and 27. The supervision committee is mandated to guide the pre-logging survey (assessment of timber resources), and to approve the logging plan through the application by the team responsible for field logging management (Article 6 and 27). On the other hand, Regulation No. 0108/MAF 2005 Article 11 assigns inventory of areas with proposed infrastructure construction to the Provincial and Capital City Agriculture and Forestry Offices, thus leading to a contradiction in areas of overlap.
According to regulation No. 0108/MAF on 20 April 2005 Article 8.3, pre-harvest inventory within areas with infrastructure projects shall include measurement, coding and stamping of all trees with a diameter at chest height equal to or greater than 10 cm. This measurement is close to Article 18 of the Forestry Law (2007), which requires for surveying prior to infrastructure construction that all tree species with a circumference over 15 cm be marked.
A detailed regulatory framework exists only for logging in reservoir areas of hydropower dams, although the Government has been calling for urgent issuance of additional legislation related to logging in mining areas, hydropower development areas, road alignments, transmission lines and areas to be cleared for tree/industrial crop plantation (Agreement No. 32/PM 2012, Article 10).
Pre-harvest survey and logging planning in flooding areas of hydropower dams includes assessment of volume of all tree species with a diameter over 10 cm, marking of selected trees (in case of selective logging), zoning logging and NTFP logging areas, mapping of logging and sub-logging areas to a scale of 1:50,000 and 1:10,000, demarcation of logging areas by staking poles, designing of the network of log hauling roads, bridges, log yards, and the surveying of historical and archaeological sites, and of wildlife (Regulation No. 0112/2008 MAF, Articles 2 and 7).
Plantations:
Domestic investment enterprises shall operate in accordance with the feasibility study or business plan that was attached to the application for an investment licence (Law on the Promotion of Domestic Investment, 2004, Article 13).
Plantation owners are required to undertake all tree plantation activities (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities etc.) in compliance with the approved plantation management plan and technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11). Note that it is unclear whether these rules have been elaborated.
Harvest of planted trees for commercial purposes by a registered plantation shall be consistent with the plantation management plan (Regulation No. 196/2000 MAF, Article 14), although no technical requirements exist on the preparation of that plan.
It is unclear who is responsible for pre-harvest measurements, although there is an expectation that these assessments must be made by the District Agriculture and Forestry Office (Smith and Phensopha, 2014).
A quota system has been developed for natural forests and large scale plantations. While there seems to be a clear protocol that logs from smallholders should be included in the annual logging plan, it is unclear how (or whether) smallholder plantation volumes are actually included, and whether the legality of this timber can be demonstrated subsequently (Smith and Phensopha, 2014).

 
Legally required documents
  • National and provincial annual logging plans/quotas
Applicable legislation
VIEW LESS
1.3 Management and harvesting planning
Last updated on 2022-03-01 Lack of plantation certificates” and use of “borrowed” plantation certificates  Specified RISK
General - Annual logging plan: The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested... VIEW MOREGeneral - Annual logging plan: 
The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested by necessity of forest clearance for development projects. In practice, however, requests for quota are usually bound up with the financial needs of central and local authorities and demands for raw materials by the various sawmills, furniture makers and other wood processing factories in each province (Baird, 2010; Forest Strategy to the Year 2020 of the Lao PDR, 2005).
Minister of Agriculture and Forestry, Dr Lien Thikeo, describing forestry management in Laos, highlighted that officials have misunderstood the division of responsibility between the central and local levels, and that some village and district authorities approve wood quotas for entrepreneurs despite the fact that it is not their role to do so (Vientiane Times, 14 June 2016).
Deputy Minister of Agriculture and Forestry, Mr Thongphat Vongmany, also stressed the point that many local (provincial and district) authorities have violated the Forestry Law in the past by granting logging permission for timber not included in the Annual Logging Plan and without having a Lawful right (Vientiane Times, 14 June 2016). 
The WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber harvested in Laos is in doubt because the Government of Laos lacks reliable information on issued logging licenses (quotas). Furthermore, numerous signs have been observed in production forest areas of locals felling and processing logs into sawnwood/planks. This is done without logging permits and undermines the Annual logging plan. 
Selective logging:
Since the 2011-12 season, the Lao government has not issued national quotas on logging in production forest areas before a forest survey and forest management plan have been made. The moratorium was articulated in Order No. 31/PM 2013, while for the first time a decision not to approve Annual Logging Plan in production forest areas was announced by Deputy Prime Minister on January 26, 2012 (Vientiane Times, 27 January 2012). 
Agreement No. 32/PM 2012, Article 4, called for urgent development of forest management plans for production forest and that these be completed in 2015. The Ministry of Agriculture and Forestry aimed to complete a survey on the remaining areas of production forest which had yet to be surveyed and assessed by 2015 (Vientiane Times, 05 May 2014). However, work was still in progress in the first half of 2016. According to an official from the Forest Department of the Ministry of Agriculture and Forestry, by May 2016 the forest survey was about 50 or 60 percent complete (Vientiane Times, 09 May 2016). Order No. 15/PM on 13 May 2016 reinstated the temporary suspension of logging in production forest, and stressed the necessity of carrying on the development of production forest management plans (Article 4). 
As the Government of Laos has the opportunity to allow logging in national forests in any given year, the risks in relation to selective logging are described based on the practices of selective logging before the moratorium was in place. Whether the risk specification will be changed if selective logging is allowed depends on whether the legislation is properly implemented. 
According to the Forest Strategy to the Year 2020 of the Lao PDR (2005), it was reported that occasionally:
•    Management plans for production forest areas are not implemented, 
•    Logging has been undertaken immediately after completion of the management survey, without awaiting the pre-logging survey or tree marking, and
•    In spite of long-term logging plans, logging rotations and annual coupe areas specified in management plans, logging actually proceeds predominantly in accessible or well-endowed areas, or focuses on higher value trees. 
Many researchers have reported that personnel of District Agriculture and Forestry offices responsible for coupe demarcation in accordance with management plans have no relevant experience (for instance, working with maps), lack the necessary equipment and, what is more, important foresters are not incentivised to fulfil these duties. This, combined with their very low salaries, makes it easier for them to participate in corrupt management practices (Hodgdon, 2010).
For instance, inspection in an FSC-certified production forest area (Thapangtong districts of Savannaket province) with a valid forest management plan and approved logging plans (Jonsson, 2006) revealed that: 
•    On all inspected logging sites, no tree was marked as per requirements (simplified marking was done with bad paint and in such a way that it was often impossible to read the numbers), and
•    Most of the tree maps did not have skid trails marked. 
Ghost inventories and inaccurate inventory
Timber logged from conversion forest areas has generally not been subject to a forest inventory or of sufficient quality to allow effective monitoring and accountability. Consequently, logs were often sourced from outside approved areas (noting such areas were in themselves usually poorly defined) and either directly exported or laundered by the mixing of logs from unauthorized areas.
According to Baird (2010), most pre-logging inventory in production forest areas was not actually done at all, let alone according to the stated rules. Instead, officials often conduct “ghost inventories”, while they sit in government offices, or at home. 
Given that many production forests have already been depleted by predatory logging, forestry officials have fabricate survey data in such a way as to overestimate volumes of particular commercial species. Extra volume of timber is acquired from elsewhere (including national protected areas) and then it is effectively laundered as legal (Baird, 2010). 
It is a well-known practice that authorities at different levels (national, provincial, district) allocate various kinds of “special” logging plans in categorised forests over and above the harvestable volumes as per approved management plans in production forest areas and logging plans for clearance in areas with development projects. As timber resources are being deprived, this further undermines the inventory and management planning conducted for selective logging. According to Baird (2010), there are various kinds of “special” logging plans, including: for deadwood, debt repayment, barter-development, military logging, district and village construction etc. The specific terms for many of these logging plans vary, and the arrangements are often unclear, or at least not transparent to a large number of officials, let alone the general public, and the terms are not included in the management plan (see more about “Special logging plans” under section 1.4, Logging Permits). This practice also violates the Forestry Law, which allows timber logging only under the national annual logging plan.
All types of “special” quotas are difficult to control. Logging sites are allocated in areas with good forest stands with no regard for basic forestry practices. Allocation of special quotas in production forest areas places an additional burden on timber resources, undermining the expediency of forest management plans and depreciating production forest areas as a future source of commercial timber. In 2012, Agreement No. 32/PM Article 5 required authorities to approve special logging plans only in the areas of infrastructure development projects, clearance for tree and industrial crop plantation establishment which have already been approved by the Government, and with proper management. However, this is often not the case. It is quite likely that residual timber stock in production forest areas has already been significantly diminished compared to the volumes shown in surveys, as in reality timber extraction in production forest areas has continued unabated (Smirnov, 2015).
Conversion:
There is evidence that management and planning of logging in areas with development projects fail to comply even with basic requirements of the relevant legislation. The required total measurement of all trees of exploitable diameter is unfeasible under current conditions due to financial and technical restrictions, therefore the survey must be conducted in sampling plots representative of the main forest formations. 
For road construction, rigorous documentation is typically lacking by the start of construction, and projection of the route after the beginning of construction is common practice. In such conditions it is infeasible to estimate expected volumes and species composition prior to the beginning of the work (Smirnov, 2015).
Two detailed case studies on timber logging under quotas for road construction and limestone quarry conducted by the WWF (Smirnov, 2015) have revealed the following list of major non-compliances in relation to conversion of the area: 
•    There were no maps with correct borders of concessions for what forest land should be converted. 
•    In case of road construction, there were reasons to believe that a pre-felling inventory was not undertaken at all, and that documents included fictitious data (“ghost inventory”). 
•    In case of limestone quarry pre-felling, an inventory was conducted only for a part of the territory, and the survey recorded only trees with a larger diameter (>30 cm) than is required by Law, meaning that many trees that should have been measured were not. 
•    This partial pre-felling inventory was completed more than two months after provincial the logging plan had received government approval. Thus, the approved national Annual Logging Plan included only indicative amounts, even though legislation requires provincial authorities to submit applications for approval with precise specification of expected volume and species composition based on results of pre-felling inventories. Moreover, pre-felling inventory was complete already after logging under this quota commenced. 
•    No logging plans were ever made.
•    Border demarcation was not carried out. 
According to the Tropical Rainforest Programme report of 2000, logging of flooding areas is often approved for conversion and starts well before the feasibility of proposed hydropower dams has been assessed. There has been criticism that in some cases dam proposals are nothing more than a front for logging. For instance, logging under the pretext of clearance of the area to be flooded for the Xekong 4 hydropower dam continued after the Lao government announced its decision to close the project due to inaction of the developer, and the commencement of coal mining within the proposed flooding areas (Smirnov, 2015).
The WWF report (2000) also questioned the practical necessity of conversion of many hundreds of thousands of hectares of forest for limestone quarrying given that the actual annual rate of expansion of limestone quarries was less than ten hectares (Smirnov, 2015). 
In an interview with local mass media in June 2014, the Deputy Minister of Industry and Commerce, Mr. Bounmy Manivong, recognised the existence of loopholes which allow companies to legalise timber from unauthorised sources under the cover of conversion timber harvested during land clearance (mining, road and electricity grid construction projects, flooded water catchment areas with planned hydropower dam project constructions). The Deputy Director General of the Ministry of Agriculture and Forestry's Forest Inspection Department, Mr Paphakon Vongxay, gave examples of cases in which some companies that were involved in road construction began cutting down trees in an area larger than that which was necessary for the road (Vientiane Times, 24 July 2014). Usually a permit is issued, but these permits are issued based on ghost inventories. 
For geological prospecting and exploration concessions, which usually cover vast areas, a lack of specific regulations on management and logging planning creates especially favourable opportunities for illegal logging. It is unclear whether reduction of timber stands resulting from logging in the course of land clearance for development projects is recorded and reflected in forest management plans with subsequent recalculation of annual allowable cut in cases where areas with development projects fall inside production forest areas. Otherwise, this unrecorded additional burden on timber resources undermines the principle of sustainability which underlies the forest management plans.
Plantations:
Regulations require plantation owners to undertake all operations (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities, harvest of planted trees for commercial purposes etc.) in compliance with approved plantation management plans and the technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11, 14). However, these rules are not yet promulgated and often management plans are not developed for plantations.
In the absence of plantation management plans, evidence suggests that plantations are inadequately managed – silviculture practices, such as thinning, pruning and weeding, do not occur as required (Smith and Phengsopha, 2014).
Summary:
For the Annual Logging Plan, there is risk that the Annual Logging Plan is based on inadequate inventory and requests from districts, leading to approvals for logging not reflecting the resources available on the ground. This picture is further distorted by “special logging plans” that are issued without taking the annual logging plans into consideration. 
For all source types, there is risk of or relating to:
•    Wood quotas approved by officials without legal authority
•    Lack of inventory survey, or documents which include fictitious data (“ghost inventory”)
•    Lack of, or delay in, logging/management plans
•    Lack of border demarcation
For Selective logging there is risk of:
•    Lack of tree marking, or marking not done according to requirements (bad paint/unclear marking)
For Conversion there is risk of or relating to:
•    Logging in areas with development projects fails to comply with basic requirements of relevant forest legislation
•    Maps with no or incorrect borders of concessions for what forest land should be converted
•    Conversion for road construction: lack of documentation by the start of construction, and projection of the route done after construction has begun
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – smallholders
Risk mitigation options
Document verification
1
Verify Plantation certificate
Description of legal requirements
Plantation certificate shall be in place
VIEW MORE
General - Annual logging plan: 
According to the Forestry Law, the main document allowing logging in natural and plantation forests is the (national) Annual Logging Plan approved by the National Assembly
This divides quotas amongst the Provinces, where the District Agriculture and Forestry Offices (DAFOs) distribute provincial logging plans amongst the districts and, together with their provincial counterparts (PAFOs), to individual production forests, based on the approval of the Government. 
The Annual Logging Plan is determined on the basis of a proposal prepared by the Ministry of Agriculture and Forestry, and the proposal itself is prepared on the basis of applications submitted by provincial authorities
Provincial and Capital City Agriculture and Forestry Offices summarise annual logging plans, which include the results of pre-logging inventories in production forest areas and in areas with various development projects (roads, transmission lines, hydropower dam construction, mining, clearance for tree and industrial crop plantations etc.) which have already been approved by the Government, in their provinces. 
After the Government and the National Assembly approve the Annual Logging Plan for the country, the Ministry of Agriculture and Forestry issues the national Annual Logging Plan and then designates logging volumes for each province based on the proposed logging plans for each province. 
Logging of natural forests is only officially allowed in Production Forests (Article 28) and approved conversion areas (Article 29) under approved logging plans (Article 26 or 29) and where resource assessment surveys (Article 20) and inventory (volume and quality species) surveys (Article 23 or 24) and sustainable management plans (Article 28) have been completed.
Approval should be made in July of each year to allow logging over the dry season (generally October to April), and the approval of additional quotas is strictly prohibited (PMO15, Part 7.2 states that “For logs harvested beyond the approved quota, they are subjected to confiscate and become the State asset and strictly conduct prosecutions to the offenders”). An example of government approval of the Annual Logging Plan is Notice No. 135/2013 GO on the Implementation of the Tree Plantation & Forest Regeneration Plan and the Timber Logging and NTFP Logging Plan for the Year 2012 ± 2013, 30 January 2013, Article 1 on timber quotas, and associated tables.
Article 20 appoints MAF to ‘to lead the survey of forest and forest resources ‘, and their provincial counterparts to coordinate and implement them (Article 150). It is an offence to falsify survey data (Article 133).  Businessmen can undertake resource surveys with permission (Article 134), which would presumably under approval of MAF.
Selective logging:
Commercial timber logging in natural production forest areas is only permitted where a forest inventory survey (Article 23 and 24) and forest management plan have been conducted and developed for production land (Article 28), and on the basis of a pre-logging inventory survey for conversion land (Article 29).
The Department of Forestry of the Ministry of Agriculture and Forestry has the overall responsibility for coordinating preparation of management plans in association with relevant sectors and local authorities, as well as for final endorsement of these plans (Article 22, 39).
The template of management plans and general principles of planning, the pre-logging inventory, and tree marking are described in Guideline No. 2156/2006 DOF Part III and Regulation No. 0108/2005 MAF, Article 8.
The period of validity of the forest management plan corresponds to a 15-20 year cutting cycle, meaning that every 15 or 20 years the management plan must be revised and updated (Regulation No. 0108/2005 MAF Article 9, Guideline No. 2156/2006 DOF Part IV).
For logging in production forest areas, District Agriculture and Forestry Offices prepare a logging plan based on the forest management plan and pre-logging inventory report approved by the Department of Forestry.
The main requirements of the pre-harvest inventory in production forest areas are listed in the Forestry Law.
The pre-harvest inventory shall be conducted in a harvestable compartment one year before a harvest operation, and includes (Regulation No. 0108/2005, Article 8):
A 100 % inventory of all species of large trees that have a girth equal to or greater than an allowable girth for harvest defined in the MAF regulation
A listing of tree species assessing stand quality and mapping location of large trees that have been previously listed, and
The designing of skid trails for log extraction, and defining of sites for log yards I and II.
All boundaries of licensed logging areas for natural forests shall be clearly demarcated on maps of an appropriate scale, and on the ground. Logging plans shall include:
Topographic map, with scale 1:25,000-1:50,000
Forest management map, with scale 1:10,000-1:25,000, and
Tree location map, with scale 1:1,000 or 1:2,000
Guideline No. 2155/2006 Part V sets very detailed requirements for the selection of trees to be cut and to leave standing. Part VI describes the tree marking procedure. Results of the Pre-harvest Inventory and Tree Marking are approved by the Provincial Agriculture and Forestry Office (Regulation No. 0108/2005 Article 9).
Conversion:
Forest legislation requires precise specification of expected volume and species composition in the annual plan for timber to be harvested in areas of hydropower development, mining, infrastructure construction. This is to be based on the result of the pre-felling survey (Forestry Law, 2007, Article 18; Order No. 17/2008 PM Article 5; Order No. 15/PM, 13 May 2016, Article 4.1).
Current regulations on management and logging planning do not cover logging in the course of clearance of an area for mining.
Under Article 29 of the Forestry Law (2019), the GoL appoints a ‘responsible committee to manage, monitor and inspect the logging in accordance with regulations’. This committee is responsible for operational planning, appointing a logging enterprise, compliance monitoring, and inventory management at log yards I and II (as per Article 32).
The procedure for forming the supervision committee responsible for management of logging and clearing in areas with hydropower development, and its rights and duties, are described in Regulation No. 0112/2008 MAF Article 25 and 27. The supervision committee is mandated to guide the pre-logging survey (assessment of timber resources), and to approve the logging plan through the application by the team responsible for field logging management (Article 6 and 27). On the other hand, Regulation No. 0108/MAF 2005 Article 11 assigns inventory of areas with proposed infrastructure construction to the Provincial and Capital City Agriculture and Forestry Offices, thus leading to a contradiction in areas of overlap.
According to regulation No. 0108/MAF on 20 April 2005 Article 8.3, pre-harvest inventory within areas with infrastructure projects shall include measurement, coding and stamping of all trees with a diameter at chest height equal to or greater than 10 cm. This measurement is close to Article 18 of the Forestry Law (2007), which requires for surveying prior to infrastructure construction that all tree species with a circumference over 15 cm be marked.
A detailed regulatory framework exists only for logging in reservoir areas of hydropower dams, although the Government has been calling for urgent issuance of additional legislation related to logging in mining areas, hydropower development areas, road alignments, transmission lines and areas to be cleared for tree/industrial crop plantation (Agreement No. 32/PM 2012, Article 10).
Pre-harvest survey and logging planning in flooding areas of hydropower dams includes assessment of volume of all tree species with a diameter over 10 cm, marking of selected trees (in case of selective logging), zoning logging and NTFP logging areas, mapping of logging and sub-logging areas to a scale of 1:50,000 and 1:10,000, demarcation of logging areas by staking poles, designing of the network of log hauling roads, bridges, log yards, and the surveying of historical and archaeological sites, and of wildlife (Regulation No. 0112/2008 MAF, Articles 2 and 7).
Plantations:
Domestic investment enterprises shall operate in accordance with the feasibility study or business plan that was attached to the application for an investment licence (Law on the Promotion of Domestic Investment, 2004, Article 13).
Plantation owners are required to undertake all tree plantation activities (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities etc.) in compliance with the approved plantation management plan and technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11). Note that it is unclear whether these rules have been elaborated.
Harvest of planted trees for commercial purposes by a registered plantation shall be consistent with the plantation management plan (Regulation No. 196/2000 MAF, Article 14), although no technical requirements exist on the preparation of that plan.
It is unclear who is responsible for pre-harvest measurements, although there is an expectation that these assessments must be made by the District Agriculture and Forestry Office (Smith and Phensopha, 2014).
A quota system has been developed for natural forests and large scale plantations. While there seems to be a clear protocol that logs from smallholders should be included in the annual logging plan, it is unclear how (or whether) smallholder plantation volumes are actually included, and whether the legality of this timber can be demonstrated subsequently (Smith and Phensopha, 2014).

 
Legally required documents
  • National and provincial annual logging plans/quotas
Applicable legislation
VIEW LESS
1.3 Management and harvesting planning
Last updated on 2022-03-01 Annual Logging Plan (which sets basis for maximum allowed harvest volumes) is based on inadequate inventories and requests from districts as well as prepared in the office without conducting actual field surveys. This leads to the approval of unsustainable logging activities Specified RISK
General - Annual logging plan: The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested... VIEW MOREGeneral - Annual logging plan: 
The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested by necessity of forest clearance for development projects. In practice, however, requests for quota are usually bound up with the financial needs of central and local authorities and demands for raw materials by the various sawmills, furniture makers and other wood processing factories in each province (Baird, 2010; Forest Strategy to the Year 2020 of the Lao PDR, 2005).
Minister of Agriculture and Forestry, Dr Lien Thikeo, describing forestry management in Laos, highlighted that officials have misunderstood the division of responsibility between the central and local levels, and that some village and district authorities approve wood quotas for entrepreneurs despite the fact that it is not their role to do so (Vientiane Times, 14 June 2016).
Deputy Minister of Agriculture and Forestry, Mr Thongphat Vongmany, also stressed the point that many local (provincial and district) authorities have violated the Forestry Law in the past by granting logging permission for timber not included in the Annual Logging Plan and without having a Lawful right (Vientiane Times, 14 June 2016). 
The WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber harvested in Laos is in doubt because the Government of Laos lacks reliable information on issued logging licenses (quotas). Furthermore, numerous signs have been observed in production forest areas of locals felling and processing logs into sawnwood/planks. This is done without logging permits and undermines the Annual logging plan. 
Selective logging:
Since the 2011-12 season, the Lao government has not issued national quotas on logging in production forest areas before a forest survey and forest management plan have been made. The moratorium was articulated in Order No. 31/PM 2013, while for the first time a decision not to approve Annual Logging Plan in production forest areas was announced by Deputy Prime Minister on January 26, 2012 (Vientiane Times, 27 January 2012). 
Agreement No. 32/PM 2012, Article 4, called for urgent development of forest management plans for production forest and that these be completed in 2015. The Ministry of Agriculture and Forestry aimed to complete a survey on the remaining areas of production forest which had yet to be surveyed and assessed by 2015 (Vientiane Times, 05 May 2014). However, work was still in progress in the first half of 2016. According to an official from the Forest Department of the Ministry of Agriculture and Forestry, by May 2016 the forest survey was about 50 or 60 percent complete (Vientiane Times, 09 May 2016). Order No. 15/PM on 13 May 2016 reinstated the temporary suspension of logging in production forest, and stressed the necessity of carrying on the development of production forest management plans (Article 4). 
As the Government of Laos has the opportunity to allow logging in national forests in any given year, the risks in relation to selective logging are described based on the practices of selective logging before the moratorium was in place. Whether the risk specification will be changed if selective logging is allowed depends on whether the legislation is properly implemented. 
According to the Forest Strategy to the Year 2020 of the Lao PDR (2005), it was reported that occasionally:
•    Management plans for production forest areas are not implemented, 
•    Logging has been undertaken immediately after completion of the management survey, without awaiting the pre-logging survey or tree marking, and
•    In spite of long-term logging plans, logging rotations and annual coupe areas specified in management plans, logging actually proceeds predominantly in accessible or well-endowed areas, or focuses on higher value trees. 
Many researchers have reported that personnel of District Agriculture and Forestry offices responsible for coupe demarcation in accordance with management plans have no relevant experience (for instance, working with maps), lack the necessary equipment and, what is more, important foresters are not incentivised to fulfil these duties. This, combined with their very low salaries, makes it easier for them to participate in corrupt management practices (Hodgdon, 2010).
For instance, inspection in an FSC-certified production forest area (Thapangtong districts of Savannaket province) with a valid forest management plan and approved logging plans (Jonsson, 2006) revealed that: 
•    On all inspected logging sites, no tree was marked as per requirements (simplified marking was done with bad paint and in such a way that it was often impossible to read the numbers), and
•    Most of the tree maps did not have skid trails marked. 
Ghost inventories and inaccurate inventory
Timber logged from conversion forest areas has generally not been subject to a forest inventory or of sufficient quality to allow effective monitoring and accountability. Consequently, logs were often sourced from outside approved areas (noting such areas were in themselves usually poorly defined) and either directly exported or laundered by the mixing of logs from unauthorized areas.
According to Baird (2010), most pre-logging inventory in production forest areas was not actually done at all, let alone according to the stated rules. Instead, officials often conduct “ghost inventories”, while they sit in government offices, or at home. 
Given that many production forests have already been depleted by predatory logging, forestry officials have fabricate survey data in such a way as to overestimate volumes of particular commercial species. Extra volume of timber is acquired from elsewhere (including national protected areas) and then it is effectively laundered as legal (Baird, 2010). 
It is a well-known practice that authorities at different levels (national, provincial, district) allocate various kinds of “special” logging plans in categorised forests over and above the harvestable volumes as per approved management plans in production forest areas and logging plans for clearance in areas with development projects. As timber resources are being deprived, this further undermines the inventory and management planning conducted for selective logging. According to Baird (2010), there are various kinds of “special” logging plans, including: for deadwood, debt repayment, barter-development, military logging, district and village construction etc. The specific terms for many of these logging plans vary, and the arrangements are often unclear, or at least not transparent to a large number of officials, let alone the general public, and the terms are not included in the management plan (see more about “Special logging plans” under section 1.4, Logging Permits). This practice also violates the Forestry Law, which allows timber logging only under the national annual logging plan.
All types of “special” quotas are difficult to control. Logging sites are allocated in areas with good forest stands with no regard for basic forestry practices. Allocation of special quotas in production forest areas places an additional burden on timber resources, undermining the expediency of forest management plans and depreciating production forest areas as a future source of commercial timber. In 2012, Agreement No. 32/PM Article 5 required authorities to approve special logging plans only in the areas of infrastructure development projects, clearance for tree and industrial crop plantation establishment which have already been approved by the Government, and with proper management. However, this is often not the case. It is quite likely that residual timber stock in production forest areas has already been significantly diminished compared to the volumes shown in surveys, as in reality timber extraction in production forest areas has continued unabated (Smirnov, 2015).
Conversion:
There is evidence that management and planning of logging in areas with development projects fail to comply even with basic requirements of the relevant legislation. The required total measurement of all trees of exploitable diameter is unfeasible under current conditions due to financial and technical restrictions, therefore the survey must be conducted in sampling plots representative of the main forest formations. 
For road construction, rigorous documentation is typically lacking by the start of construction, and projection of the route after the beginning of construction is common practice. In such conditions it is infeasible to estimate expected volumes and species composition prior to the beginning of the work (Smirnov, 2015).
Two detailed case studies on timber logging under quotas for road construction and limestone quarry conducted by the WWF (Smirnov, 2015) have revealed the following list of major non-compliances in relation to conversion of the area: 
•    There were no maps with correct borders of concessions for what forest land should be converted. 
•    In case of road construction, there were reasons to believe that a pre-felling inventory was not undertaken at all, and that documents included fictitious data (“ghost inventory”). 
•    In case of limestone quarry pre-felling, an inventory was conducted only for a part of the territory, and the survey recorded only trees with a larger diameter (>30 cm) than is required by Law, meaning that many trees that should have been measured were not. 
•    This partial pre-felling inventory was completed more than two months after provincial the logging plan had received government approval. Thus, the approved national Annual Logging Plan included only indicative amounts, even though legislation requires provincial authorities to submit applications for approval with precise specification of expected volume and species composition based on results of pre-felling inventories. Moreover, pre-felling inventory was complete already after logging under this quota commenced. 
•    No logging plans were ever made.
•    Border demarcation was not carried out. 
According to the Tropical Rainforest Programme report of 2000, logging of flooding areas is often approved for conversion and starts well before the feasibility of proposed hydropower dams has been assessed. There has been criticism that in some cases dam proposals are nothing more than a front for logging. For instance, logging under the pretext of clearance of the area to be flooded for the Xekong 4 hydropower dam continued after the Lao government announced its decision to close the project due to inaction of the developer, and the commencement of coal mining within the proposed flooding areas (Smirnov, 2015).
The WWF report (2000) also questioned the practical necessity of conversion of many hundreds of thousands of hectares of forest for limestone quarrying given that the actual annual rate of expansion of limestone quarries was less than ten hectares (Smirnov, 2015). 
In an interview with local mass media in June 2014, the Deputy Minister of Industry and Commerce, Mr. Bounmy Manivong, recognised the existence of loopholes which allow companies to legalise timber from unauthorised sources under the cover of conversion timber harvested during land clearance (mining, road and electricity grid construction projects, flooded water catchment areas with planned hydropower dam project constructions). The Deputy Director General of the Ministry of Agriculture and Forestry's Forest Inspection Department, Mr Paphakon Vongxay, gave examples of cases in which some companies that were involved in road construction began cutting down trees in an area larger than that which was necessary for the road (Vientiane Times, 24 July 2014). Usually a permit is issued, but these permits are issued based on ghost inventories. 
For geological prospecting and exploration concessions, which usually cover vast areas, a lack of specific regulations on management and logging planning creates especially favourable opportunities for illegal logging. It is unclear whether reduction of timber stands resulting from logging in the course of land clearance for development projects is recorded and reflected in forest management plans with subsequent recalculation of annual allowable cut in cases where areas with development projects fall inside production forest areas. Otherwise, this unrecorded additional burden on timber resources undermines the principle of sustainability which underlies the forest management plans.
Plantations:
Regulations require plantation owners to undertake all operations (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities, harvest of planted trees for commercial purposes etc.) in compliance with approved plantation management plans and the technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11, 14). However, these rules are not yet promulgated and often management plans are not developed for plantations.
In the absence of plantation management plans, evidence suggests that plantations are inadequately managed – silviculture practices, such as thinning, pruning and weeding, do not occur as required (Smith and Phengsopha, 2014).
Summary:
For the Annual Logging Plan, there is risk that the Annual Logging Plan is based on inadequate inventory and requests from districts, leading to approvals for logging not reflecting the resources available on the ground. This picture is further distorted by “special logging plans” that are issued without taking the annual logging plans into consideration. 
For all source types, there is risk of or relating to:
•    Wood quotas approved by officials without legal authority
•    Lack of inventory survey, or documents which include fictitious data (“ghost inventory”)
•    Lack of, or delay in, logging/management plans
•    Lack of border demarcation
For Selective logging there is risk of:
•    Lack of tree marking, or marking not done according to requirements (bad paint/unclear marking)
For Conversion there is risk of or relating to:
•    Logging in areas with development projects fails to comply with basic requirements of relevant forest legislation
•    Maps with no or incorrect borders of concessions for what forest land should be converted
•    Conversion for road construction: lack of documentation by the start of construction, and projection of the route done after construction has begun
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verificationStakeholder consultation
1
Verify National and provincial annual logging plans/quotas
National and provincial annual logging plans/quotas approved by the National Assembly and the Ministry of Agriculture and Forestry: relevant quota has to be included in Annual Logging Plan for current year.
2
Verify Forest management plan
Forest management plan for production forest area endorsed by the Department of Forestry of the Ministry of Agriculture and Forestry: forest management plan must be approved for concerned production forest area; allows verification of information on location of logging sites, annual allowable cut, as well as composition of tree species available for logging.
3
Verify Pre-logging inventory and tree marking report
Pre-logging inventory and tree marking report approved by Provincial Agriculture and Forestry Office: must be undertaken in year preceding logging season, and must include maps in accordance with requirements; data from tree marking report (species, sizes, volumes) must match specification of timber on sale.
4
Verify Logging plan
Logging plan approved by the supervision committee responsible for logging management or by Provincial Agriculture and Forestry Offices (for conversion timber): must be undertaken in year preceding logging season and include maps in accordance with requirements; data from tree marking report (species, sizes, volumes) must match specification of timber on sale
5
Verify Logging area
Confirm plans are in accordance with legal requirements, and that maps correspond to actual delineation and situation on the ground.
6
Consult Provincial Agriculture and Forestry Office
Consult the Provincial Agriculture and Forestry Office and Department of Forestry of the Ministry of Agriculture and Forestry: to confirm that inventory and logging plans have been developed based on field survey.
Description of legal requirements
Annual Logging Plans shall be based on accurate inventory survey.
VIEW MORE
General - Annual logging plan: 
According to the Forestry Law, the main document allowing logging in natural and plantation forests is the (national) Annual Logging Plan approved by the National Assembly
This divides quotas amongst the Provinces, where the District Agriculture and Forestry Offices (DAFOs) distribute provincial logging plans amongst the districts and, together with their provincial counterparts (PAFOs), to individual production forests, based on the approval of the Government. 
The Annual Logging Plan is determined on the basis of a proposal prepared by the Ministry of Agriculture and Forestry, and the proposal itself is prepared on the basis of applications submitted by provincial authorities
Provincial and Capital City Agriculture and Forestry Offices summarise annual logging plans, which include the results of pre-logging inventories in production forest areas and in areas with various development projects (roads, transmission lines, hydropower dam construction, mining, clearance for tree and industrial crop plantations etc.) which have already been approved by the Government, in their provinces. 
After the Government and the National Assembly approve the Annual Logging Plan for the country, the Ministry of Agriculture and Forestry issues the national Annual Logging Plan and then designates logging volumes for each province based on the proposed logging plans for each province. 
Logging of natural forests is only officially allowed in Production Forests (Article 28) and approved conversion areas (Article 29) under approved logging plans (Article 26 or 29) and where resource assessment surveys (Article 20) and inventory (volume and quality species) surveys (Article 23 or 24) and sustainable management plans (Article 28) have been completed.
Approval should be made in July of each year to allow logging over the dry season (generally October to April), and the approval of additional quotas is strictly prohibited (PMO15, Part 7.2 states that “For logs harvested beyond the approved quota, they are subjected to confiscate and become the State asset and strictly conduct prosecutions to the offenders”). An example of government approval of the Annual Logging Plan is Notice No. 135/2013 GO on the Implementation of the Tree Plantation & Forest Regeneration Plan and the Timber Logging and NTFP Logging Plan for the Year 2012 ± 2013, 30 January 2013, Article 1 on timber quotas, and associated tables.
Article 20 appoints MAF to ‘to lead the survey of forest and forest resources ‘, and their provincial counterparts to coordinate and implement them (Article 150). It is an offence to falsify survey data (Article 133).  Businessmen can undertake resource surveys with permission (Article 134), which would presumably under approval of MAF.
Selective logging:
Commercial timber logging in natural production forest areas is only permitted where a forest inventory survey (Article 23 and 24) and forest management plan have been conducted and developed for production land (Article 28), and on the basis of a pre-logging inventory survey for conversion land (Article 29).
The Department of Forestry of the Ministry of Agriculture and Forestry has the overall responsibility for coordinating preparation of management plans in association with relevant sectors and local authorities, as well as for final endorsement of these plans (Article 22, 39).
The template of management plans and general principles of planning, the pre-logging inventory, and tree marking are described in Guideline No. 2156/2006 DOF Part III and Regulation No. 0108/2005 MAF, Article 8.
The period of validity of the forest management plan corresponds to a 15-20 year cutting cycle, meaning that every 15 or 20 years the management plan must be revised and updated (Regulation No. 0108/2005 MAF Article 9, Guideline No. 2156/2006 DOF Part IV).
For logging in production forest areas, District Agriculture and Forestry Offices prepare a logging plan based on the forest management plan and pre-logging inventory report approved by the Department of Forestry.
The main requirements of the pre-harvest inventory in production forest areas are listed in the Forestry Law.
The pre-harvest inventory shall be conducted in a harvestable compartment one year before a harvest operation, and includes (Regulation No. 0108/2005, Article 8):
A 100 % inventory of all species of large trees that have a girth equal to or greater than an allowable girth for harvest defined in the MAF regulation
A listing of tree species assessing stand quality and mapping location of large trees that have been previously listed, and
The designing of skid trails for log extraction, and defining of sites for log yards I and II.
All boundaries of licensed logging areas for natural forests shall be clearly demarcated on maps of an appropriate scale, and on the ground. Logging plans shall include:
Topographic map, with scale 1:25,000-1:50,000
Forest management map, with scale 1:10,000-1:25,000, and
Tree location map, with scale 1:1,000 or 1:2,000
Guideline No. 2155/2006 Part V sets very detailed requirements for the selection of trees to be cut and to leave standing. Part VI describes the tree marking procedure. Results of the Pre-harvest Inventory and Tree Marking are approved by the Provincial Agriculture and Forestry Office (Regulation No. 0108/2005 Article 9).
Conversion:
Forest legislation requires precise specification of expected volume and species composition in the annual plan for timber to be harvested in areas of hydropower development, mining, infrastructure construction. This is to be based on the result of the pre-felling survey (Forestry Law, 2007, Article 18; Order No. 17/2008 PM Article 5; Order No. 15/PM, 13 May 2016, Article 4.1).
Current regulations on management and logging planning do not cover logging in the course of clearance of an area for mining.
Under Article 29 of the Forestry Law (2019), the GoL appoints a ‘responsible committee to manage, monitor and inspect the logging in accordance with regulations’. This committee is responsible for operational planning, appointing a logging enterprise, compliance monitoring, and inventory management at log yards I and II (as per Article 32).
The procedure for forming the supervision committee responsible for management of logging and clearing in areas with hydropower development, and its rights and duties, are described in Regulation No. 0112/2008 MAF Article 25 and 27. The supervision committee is mandated to guide the pre-logging survey (assessment of timber resources), and to approve the logging plan through the application by the team responsible for field logging management (Article 6 and 27). On the other hand, Regulation No. 0108/MAF 2005 Article 11 assigns inventory of areas with proposed infrastructure construction to the Provincial and Capital City Agriculture and Forestry Offices, thus leading to a contradiction in areas of overlap.
According to regulation No. 0108/MAF on 20 April 2005 Article 8.3, pre-harvest inventory within areas with infrastructure projects shall include measurement, coding and stamping of all trees with a diameter at chest height equal to or greater than 10 cm. This measurement is close to Article 18 of the Forestry Law (2007), which requires for surveying prior to infrastructure construction that all tree species with a circumference over 15 cm be marked.
A detailed regulatory framework exists only for logging in reservoir areas of hydropower dams, although the Government has been calling for urgent issuance of additional legislation related to logging in mining areas, hydropower development areas, road alignments, transmission lines and areas to be cleared for tree/industrial crop plantation (Agreement No. 32/PM 2012, Article 10).
Pre-harvest survey and logging planning in flooding areas of hydropower dams includes assessment of volume of all tree species with a diameter over 10 cm, marking of selected trees (in case of selective logging), zoning logging and NTFP logging areas, mapping of logging and sub-logging areas to a scale of 1:50,000 and 1:10,000, demarcation of logging areas by staking poles, designing of the network of log hauling roads, bridges, log yards, and the surveying of historical and archaeological sites, and of wildlife (Regulation No. 0112/2008 MAF, Articles 2 and 7).
Plantations:
Domestic investment enterprises shall operate in accordance with the feasibility study or business plan that was attached to the application for an investment licence (Law on the Promotion of Domestic Investment, 2004, Article 13).
Plantation owners are required to undertake all tree plantation activities (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities etc.) in compliance with the approved plantation management plan and technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11). Note that it is unclear whether these rules have been elaborated.
Harvest of planted trees for commercial purposes by a registered plantation shall be consistent with the plantation management plan (Regulation No. 196/2000 MAF, Article 14), although no technical requirements exist on the preparation of that plan.
It is unclear who is responsible for pre-harvest measurements, although there is an expectation that these assessments must be made by the District Agriculture and Forestry Office (Smith and Phensopha, 2014).
A quota system has been developed for natural forests and large scale plantations. While there seems to be a clear protocol that logs from smallholders should be included in the annual logging plan, it is unclear how (or whether) smallholder plantation volumes are actually included, and whether the legality of this timber can be demonstrated subsequently (Smith and Phensopha, 2014).

 
Legally required documents
  • National and provincial annual logging plans/quotas
Applicable legislation
VIEW LESS
1.3 Management and harvesting planning
Last updated on 2022-03-01 Wood quotas approved by officials without legal authority Specified RISK
General - Annual logging plan: The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested... VIEW MOREGeneral - Annual logging plan: 
The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested by necessity of forest clearance for development projects. In practice, however, requests for quota are usually bound up with the financial needs of central and local authorities and demands for raw materials by the various sawmills, furniture makers and other wood processing factories in each province (Baird, 2010; Forest Strategy to the Year 2020 of the Lao PDR, 2005).
Minister of Agriculture and Forestry, Dr Lien Thikeo, describing forestry management in Laos, highlighted that officials have misunderstood the division of responsibility between the central and local levels, and that some village and district authorities approve wood quotas for entrepreneurs despite the fact that it is not their role to do so (Vientiane Times, 14 June 2016).
Deputy Minister of Agriculture and Forestry, Mr Thongphat Vongmany, also stressed the point that many local (provincial and district) authorities have violated the Forestry Law in the past by granting logging permission for timber not included in the Annual Logging Plan and without having a Lawful right (Vientiane Times, 14 June 2016). 
The WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber harvested in Laos is in doubt because the Government of Laos lacks reliable information on issued logging licenses (quotas). Furthermore, numerous signs have been observed in production forest areas of locals felling and processing logs into sawnwood/planks. This is done without logging permits and undermines the Annual logging plan. 
Selective logging:
Since the 2011-12 season, the Lao government has not issued national quotas on logging in production forest areas before a forest survey and forest management plan have been made. The moratorium was articulated in Order No. 31/PM 2013, while for the first time a decision not to approve Annual Logging Plan in production forest areas was announced by Deputy Prime Minister on January 26, 2012 (Vientiane Times, 27 January 2012). 
Agreement No. 32/PM 2012, Article 4, called for urgent development of forest management plans for production forest and that these be completed in 2015. The Ministry of Agriculture and Forestry aimed to complete a survey on the remaining areas of production forest which had yet to be surveyed and assessed by 2015 (Vientiane Times, 05 May 2014). However, work was still in progress in the first half of 2016. According to an official from the Forest Department of the Ministry of Agriculture and Forestry, by May 2016 the forest survey was about 50 or 60 percent complete (Vientiane Times, 09 May 2016). Order No. 15/PM on 13 May 2016 reinstated the temporary suspension of logging in production forest, and stressed the necessity of carrying on the development of production forest management plans (Article 4). 
As the Government of Laos has the opportunity to allow logging in national forests in any given year, the risks in relation to selective logging are described based on the practices of selective logging before the moratorium was in place. Whether the risk specification will be changed if selective logging is allowed depends on whether the legislation is properly implemented. 
According to the Forest Strategy to the Year 2020 of the Lao PDR (2005), it was reported that occasionally:
•    Management plans for production forest areas are not implemented, 
•    Logging has been undertaken immediately after completion of the management survey, without awaiting the pre-logging survey or tree marking, and
•    In spite of long-term logging plans, logging rotations and annual coupe areas specified in management plans, logging actually proceeds predominantly in accessible or well-endowed areas, or focuses on higher value trees. 
Many researchers have reported that personnel of District Agriculture and Forestry offices responsible for coupe demarcation in accordance with management plans have no relevant experience (for instance, working with maps), lack the necessary equipment and, what is more, important foresters are not incentivised to fulfil these duties. This, combined with their very low salaries, makes it easier for them to participate in corrupt management practices (Hodgdon, 2010).
For instance, inspection in an FSC-certified production forest area (Thapangtong districts of Savannaket province) with a valid forest management plan and approved logging plans (Jonsson, 2006) revealed that: 
•    On all inspected logging sites, no tree was marked as per requirements (simplified marking was done with bad paint and in such a way that it was often impossible to read the numbers), and
•    Most of the tree maps did not have skid trails marked. 
Ghost inventories and inaccurate inventory
Timber logged from conversion forest areas has generally not been subject to a forest inventory or of sufficient quality to allow effective monitoring and accountability. Consequently, logs were often sourced from outside approved areas (noting such areas were in themselves usually poorly defined) and either directly exported or laundered by the mixing of logs from unauthorized areas.
According to Baird (2010), most pre-logging inventory in production forest areas was not actually done at all, let alone according to the stated rules. Instead, officials often conduct “ghost inventories”, while they sit in government offices, or at home. 
Given that many production forests have already been depleted by predatory logging, forestry officials have fabricate survey data in such a way as to overestimate volumes of particular commercial species. Extra volume of timber is acquired from elsewhere (including national protected areas) and then it is effectively laundered as legal (Baird, 2010). 
It is a well-known practice that authorities at different levels (national, provincial, district) allocate various kinds of “special” logging plans in categorised forests over and above the harvestable volumes as per approved management plans in production forest areas and logging plans for clearance in areas with development projects. As timber resources are being deprived, this further undermines the inventory and management planning conducted for selective logging. According to Baird (2010), there are various kinds of “special” logging plans, including: for deadwood, debt repayment, barter-development, military logging, district and village construction etc. The specific terms for many of these logging plans vary, and the arrangements are often unclear, or at least not transparent to a large number of officials, let alone the general public, and the terms are not included in the management plan (see more about “Special logging plans” under section 1.4, Logging Permits). This practice also violates the Forestry Law, which allows timber logging only under the national annual logging plan.
All types of “special” quotas are difficult to control. Logging sites are allocated in areas with good forest stands with no regard for basic forestry practices. Allocation of special quotas in production forest areas places an additional burden on timber resources, undermining the expediency of forest management plans and depreciating production forest areas as a future source of commercial timber. In 2012, Agreement No. 32/PM Article 5 required authorities to approve special logging plans only in the areas of infrastructure development projects, clearance for tree and industrial crop plantation establishment which have already been approved by the Government, and with proper management. However, this is often not the case. It is quite likely that residual timber stock in production forest areas has already been significantly diminished compared to the volumes shown in surveys, as in reality timber extraction in production forest areas has continued unabated (Smirnov, 2015).
Conversion:
There is evidence that management and planning of logging in areas with development projects fail to comply even with basic requirements of the relevant legislation. The required total measurement of all trees of exploitable diameter is unfeasible under current conditions due to financial and technical restrictions, therefore the survey must be conducted in sampling plots representative of the main forest formations. 
For road construction, rigorous documentation is typically lacking by the start of construction, and projection of the route after the beginning of construction is common practice. In such conditions it is infeasible to estimate expected volumes and species composition prior to the beginning of the work (Smirnov, 2015).
Two detailed case studies on timber logging under quotas for road construction and limestone quarry conducted by the WWF (Smirnov, 2015) have revealed the following list of major non-compliances in relation to conversion of the area: 
•    There were no maps with correct borders of concessions for what forest land should be converted. 
•    In case of road construction, there were reasons to believe that a pre-felling inventory was not undertaken at all, and that documents included fictitious data (“ghost inventory”). 
•    In case of limestone quarry pre-felling, an inventory was conducted only for a part of the territory, and the survey recorded only trees with a larger diameter (>30 cm) than is required by Law, meaning that many trees that should have been measured were not. 
•    This partial pre-felling inventory was completed more than two months after provincial the logging plan had received government approval. Thus, the approved national Annual Logging Plan included only indicative amounts, even though legislation requires provincial authorities to submit applications for approval with precise specification of expected volume and species composition based on results of pre-felling inventories. Moreover, pre-felling inventory was complete already after logging under this quota commenced. 
•    No logging plans were ever made.
•    Border demarcation was not carried out. 
According to the Tropical Rainforest Programme report of 2000, logging of flooding areas is often approved for conversion and starts well before the feasibility of proposed hydropower dams has been assessed. There has been criticism that in some cases dam proposals are nothing more than a front for logging. For instance, logging under the pretext of clearance of the area to be flooded for the Xekong 4 hydropower dam continued after the Lao government announced its decision to close the project due to inaction of the developer, and the commencement of coal mining within the proposed flooding areas (Smirnov, 2015).
The WWF report (2000) also questioned the practical necessity of conversion of many hundreds of thousands of hectares of forest for limestone quarrying given that the actual annual rate of expansion of limestone quarries was less than ten hectares (Smirnov, 2015). 
In an interview with local mass media in June 2014, the Deputy Minister of Industry and Commerce, Mr. Bounmy Manivong, recognised the existence of loopholes which allow companies to legalise timber from unauthorised sources under the cover of conversion timber harvested during land clearance (mining, road and electricity grid construction projects, flooded water catchment areas with planned hydropower dam project constructions). The Deputy Director General of the Ministry of Agriculture and Forestry's Forest Inspection Department, Mr Paphakon Vongxay, gave examples of cases in which some companies that were involved in road construction began cutting down trees in an area larger than that which was necessary for the road (Vientiane Times, 24 July 2014). Usually a permit is issued, but these permits are issued based on ghost inventories. 
For geological prospecting and exploration concessions, which usually cover vast areas, a lack of specific regulations on management and logging planning creates especially favourable opportunities for illegal logging. It is unclear whether reduction of timber stands resulting from logging in the course of land clearance for development projects is recorded and reflected in forest management plans with subsequent recalculation of annual allowable cut in cases where areas with development projects fall inside production forest areas. Otherwise, this unrecorded additional burden on timber resources undermines the principle of sustainability which underlies the forest management plans.
Plantations:
Regulations require plantation owners to undertake all operations (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities, harvest of planted trees for commercial purposes etc.) in compliance with approved plantation management plans and the technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11, 14). However, these rules are not yet promulgated and often management plans are not developed for plantations.
In the absence of plantation management plans, evidence suggests that plantations are inadequately managed – silviculture practices, such as thinning, pruning and weeding, do not occur as required (Smith and Phengsopha, 2014).
Summary:
For the Annual Logging Plan, there is risk that the Annual Logging Plan is based on inadequate inventory and requests from districts, leading to approvals for logging not reflecting the resources available on the ground. This picture is further distorted by “special logging plans” that are issued without taking the annual logging plans into consideration. 
For all source types, there is risk of or relating to:
•    Wood quotas approved by officials without legal authority
•    Lack of inventory survey, or documents which include fictitious data (“ghost inventory”)
•    Lack of, or delay in, logging/management plans
•    Lack of border demarcation
For Selective logging there is risk of:
•    Lack of tree marking, or marking not done according to requirements (bad paint/unclear marking)
For Conversion there is risk of or relating to:
•    Logging in areas with development projects fails to comply with basic requirements of relevant forest legislation
•    Maps with no or incorrect borders of concessions for what forest land should be converted
•    Conversion for road construction: lack of documentation by the start of construction, and projection of the route done after construction has begun
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify National and provincial annual logging plans/quotas
National and provincial annual logging plans/quotas approved by the National Assembly and the Ministry of Agriculture and Forestry
2
Verify Logging plan
Review Annual Logging Plan to verify that relevant quota has been included for current year
Description of legal requirements
National and provincial annual logging plans/quotas have been approved by the National Assembly and the Ministry of Agriculture and Forestry
VIEW MORE
General - Annual logging plan: 
According to the Forestry Law, the main document allowing logging in natural and plantation forests is the (national) Annual Logging Plan approved by the National Assembly
This divides quotas amongst the Provinces, where the District Agriculture and Forestry Offices (DAFOs) distribute provincial logging plans amongst the districts and, together with their provincial counterparts (PAFOs), to individual production forests, based on the approval of the Government. 
The Annual Logging Plan is determined on the basis of a proposal prepared by the Ministry of Agriculture and Forestry, and the proposal itself is prepared on the basis of applications submitted by provincial authorities
Provincial and Capital City Agriculture and Forestry Offices summarise annual logging plans, which include the results of pre-logging inventories in production forest areas and in areas with various development projects (roads, transmission lines, hydropower dam construction, mining, clearance for tree and industrial crop plantations etc.) which have already been approved by the Government, in their provinces. 
After the Government and the National Assembly approve the Annual Logging Plan for the country, the Ministry of Agriculture and Forestry issues the national Annual Logging Plan and then designates logging volumes for each province based on the proposed logging plans for each province. 
Logging of natural forests is only officially allowed in Production Forests (Article 28) and approved conversion areas (Article 29) under approved logging plans (Article 26 or 29) and where resource assessment surveys (Article 20) and inventory (volume and quality species) surveys (Article 23 or 24) and sustainable management plans (Article 28) have been completed.
Approval should be made in July of each year to allow logging over the dry season (generally October to April), and the approval of additional quotas is strictly prohibited (PMO15, Part 7.2 states that “For logs harvested beyond the approved quota, they are subjected to confiscate and become the State asset and strictly conduct prosecutions to the offenders”). An example of government approval of the Annual Logging Plan is Notice No. 135/2013 GO on the Implementation of the Tree Plantation & Forest Regeneration Plan and the Timber Logging and NTFP Logging Plan for the Year 2012 ± 2013, 30 January 2013, Article 1 on timber quotas, and associated tables.
Article 20 appoints MAF to ‘to lead the survey of forest and forest resources ‘, and their provincial counterparts to coordinate and implement them (Article 150). It is an offence to falsify survey data (Article 133).  Businessmen can undertake resource surveys with permission (Article 134), which would presumably under approval of MAF.
Selective logging:
Commercial timber logging in natural production forest areas is only permitted where a forest inventory survey (Article 23 and 24) and forest management plan have been conducted and developed for production land (Article 28), and on the basis of a pre-logging inventory survey for conversion land (Article 29).
The Department of Forestry of the Ministry of Agriculture and Forestry has the overall responsibility for coordinating preparation of management plans in association with relevant sectors and local authorities, as well as for final endorsement of these plans (Article 22, 39).
The template of management plans and general principles of planning, the pre-logging inventory, and tree marking are described in Guideline No. 2156/2006 DOF Part III and Regulation No. 0108/2005 MAF, Article 8.
The period of validity of the forest management plan corresponds to a 15-20 year cutting cycle, meaning that every 15 or 20 years the management plan must be revised and updated (Regulation No. 0108/2005 MAF Article 9, Guideline No. 2156/2006 DOF Part IV).
For logging in production forest areas, District Agriculture and Forestry Offices prepare a logging plan based on the forest management plan and pre-logging inventory report approved by the Department of Forestry.
The main requirements of the pre-harvest inventory in production forest areas are listed in the Forestry Law.
The pre-harvest inventory shall be conducted in a harvestable compartment one year before a harvest operation, and includes (Regulation No. 0108/2005, Article 8):
A 100 % inventory of all species of large trees that have a girth equal to or greater than an allowable girth for harvest defined in the MAF regulation
A listing of tree species assessing stand quality and mapping location of large trees that have been previously listed, and
The designing of skid trails for log extraction, and defining of sites for log yards I and II.
All boundaries of licensed logging areas for natural forests shall be clearly demarcated on maps of an appropriate scale, and on the ground. Logging plans shall include:
Topographic map, with scale 1:25,000-1:50,000
Forest management map, with scale 1:10,000-1:25,000, and
Tree location map, with scale 1:1,000 or 1:2,000
Guideline No. 2155/2006 Part V sets very detailed requirements for the selection of trees to be cut and to leave standing. Part VI describes the tree marking procedure. Results of the Pre-harvest Inventory and Tree Marking are approved by the Provincial Agriculture and Forestry Office (Regulation No. 0108/2005 Article 9).
Conversion:
Forest legislation requires precise specification of expected volume and species composition in the annual plan for timber to be harvested in areas of hydropower development, mining, infrastructure construction. This is to be based on the result of the pre-felling survey (Forestry Law, 2007, Article 18; Order No. 17/2008 PM Article 5; Order No. 15/PM, 13 May 2016, Article 4.1).
Current regulations on management and logging planning do not cover logging in the course of clearance of an area for mining.
Under Article 29 of the Forestry Law (2019), the GoL appoints a ‘responsible committee to manage, monitor and inspect the logging in accordance with regulations’. This committee is responsible for operational planning, appointing a logging enterprise, compliance monitoring, and inventory management at log yards I and II (as per Article 32).
The procedure for forming the supervision committee responsible for management of logging and clearing in areas with hydropower development, and its rights and duties, are described in Regulation No. 0112/2008 MAF Article 25 and 27. The supervision committee is mandated to guide the pre-logging survey (assessment of timber resources), and to approve the logging plan through the application by the team responsible for field logging management (Article 6 and 27). On the other hand, Regulation No. 0108/MAF 2005 Article 11 assigns inventory of areas with proposed infrastructure construction to the Provincial and Capital City Agriculture and Forestry Offices, thus leading to a contradiction in areas of overlap.
According to regulation No. 0108/MAF on 20 April 2005 Article 8.3, pre-harvest inventory within areas with infrastructure projects shall include measurement, coding and stamping of all trees with a diameter at chest height equal to or greater than 10 cm. This measurement is close to Article 18 of the Forestry Law (2007), which requires for surveying prior to infrastructure construction that all tree species with a circumference over 15 cm be marked.
A detailed regulatory framework exists only for logging in reservoir areas of hydropower dams, although the Government has been calling for urgent issuance of additional legislation related to logging in mining areas, hydropower development areas, road alignments, transmission lines and areas to be cleared for tree/industrial crop plantation (Agreement No. 32/PM 2012, Article 10).
Pre-harvest survey and logging planning in flooding areas of hydropower dams includes assessment of volume of all tree species with a diameter over 10 cm, marking of selected trees (in case of selective logging), zoning logging and NTFP logging areas, mapping of logging and sub-logging areas to a scale of 1:50,000 and 1:10,000, demarcation of logging areas by staking poles, designing of the network of log hauling roads, bridges, log yards, and the surveying of historical and archaeological sites, and of wildlife (Regulation No. 0112/2008 MAF, Articles 2 and 7).
Plantations:
Domestic investment enterprises shall operate in accordance with the feasibility study or business plan that was attached to the application for an investment licence (Law on the Promotion of Domestic Investment, 2004, Article 13).
Plantation owners are required to undertake all tree plantation activities (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities etc.) in compliance with the approved plantation management plan and technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11). Note that it is unclear whether these rules have been elaborated.
Harvest of planted trees for commercial purposes by a registered plantation shall be consistent with the plantation management plan (Regulation No. 196/2000 MAF, Article 14), although no technical requirements exist on the preparation of that plan.
It is unclear who is responsible for pre-harvest measurements, although there is an expectation that these assessments must be made by the District Agriculture and Forestry Office (Smith and Phensopha, 2014).
A quota system has been developed for natural forests and large scale plantations. While there seems to be a clear protocol that logs from smallholders should be included in the annual logging plan, it is unclear how (or whether) smallholder plantation volumes are actually included, and whether the legality of this timber can be demonstrated subsequently (Smith and Phensopha, 2014).

 
Legally required documents
  • National and provincial annual logging plans/quotas
Applicable legislation
VIEW LESS
1.3 Management and harvesting planning
Last updated on 2022-03-01 Lack of management plans with which logging is to be comply  Specified RISK
General - Annual logging plan: The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested... VIEW MOREGeneral - Annual logging plan: 
The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested by necessity of forest clearance for development projects. In practice, however, requests for quota are usually bound up with the financial needs of central and local authorities and demands for raw materials by the various sawmills, furniture makers and other wood processing factories in each province (Baird, 2010; Forest Strategy to the Year 2020 of the Lao PDR, 2005).
Minister of Agriculture and Forestry, Dr Lien Thikeo, describing forestry management in Laos, highlighted that officials have misunderstood the division of responsibility between the central and local levels, and that some village and district authorities approve wood quotas for entrepreneurs despite the fact that it is not their role to do so (Vientiane Times, 14 June 2016).
Deputy Minister of Agriculture and Forestry, Mr Thongphat Vongmany, also stressed the point that many local (provincial and district) authorities have violated the Forestry Law in the past by granting logging permission for timber not included in the Annual Logging Plan and without having a Lawful right (Vientiane Times, 14 June 2016). 
The WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber harvested in Laos is in doubt because the Government of Laos lacks reliable information on issued logging licenses (quotas). Furthermore, numerous signs have been observed in production forest areas of locals felling and processing logs into sawnwood/planks. This is done without logging permits and undermines the Annual logging plan. 
Selective logging:
Since the 2011-12 season, the Lao government has not issued national quotas on logging in production forest areas before a forest survey and forest management plan have been made. The moratorium was articulated in Order No. 31/PM 2013, while for the first time a decision not to approve Annual Logging Plan in production forest areas was announced by Deputy Prime Minister on January 26, 2012 (Vientiane Times, 27 January 2012). 
Agreement No. 32/PM 2012, Article 4, called for urgent development of forest management plans for production forest and that these be completed in 2015. The Ministry of Agriculture and Forestry aimed to complete a survey on the remaining areas of production forest which had yet to be surveyed and assessed by 2015 (Vientiane Times, 05 May 2014). However, work was still in progress in the first half of 2016. According to an official from the Forest Department of the Ministry of Agriculture and Forestry, by May 2016 the forest survey was about 50 or 60 percent complete (Vientiane Times, 09 May 2016). Order No. 15/PM on 13 May 2016 reinstated the temporary suspension of logging in production forest, and stressed the necessity of carrying on the development of production forest management plans (Article 4). 
As the Government of Laos has the opportunity to allow logging in national forests in any given year, the risks in relation to selective logging are described based on the practices of selective logging before the moratorium was in place. Whether the risk specification will be changed if selective logging is allowed depends on whether the legislation is properly implemented. 
According to the Forest Strategy to the Year 2020 of the Lao PDR (2005), it was reported that occasionally:
•    Management plans for production forest areas are not implemented, 
•    Logging has been undertaken immediately after completion of the management survey, without awaiting the pre-logging survey or tree marking, and
•    In spite of long-term logging plans, logging rotations and annual coupe areas specified in management plans, logging actually proceeds predominantly in accessible or well-endowed areas, or focuses on higher value trees. 
Many researchers have reported that personnel of District Agriculture and Forestry offices responsible for coupe demarcation in accordance with management plans have no relevant experience (for instance, working with maps), lack the necessary equipment and, what is more, important foresters are not incentivised to fulfil these duties. This, combined with their very low salaries, makes it easier for them to participate in corrupt management practices (Hodgdon, 2010).
For instance, inspection in an FSC-certified production forest area (Thapangtong districts of Savannaket province) with a valid forest management plan and approved logging plans (Jonsson, 2006) revealed that: 
•    On all inspected logging sites, no tree was marked as per requirements (simplified marking was done with bad paint and in such a way that it was often impossible to read the numbers), and
•    Most of the tree maps did not have skid trails marked. 
Ghost inventories and inaccurate inventory
Timber logged from conversion forest areas has generally not been subject to a forest inventory or of sufficient quality to allow effective monitoring and accountability. Consequently, logs were often sourced from outside approved areas (noting such areas were in themselves usually poorly defined) and either directly exported or laundered by the mixing of logs from unauthorized areas.
According to Baird (2010), most pre-logging inventory in production forest areas was not actually done at all, let alone according to the stated rules. Instead, officials often conduct “ghost inventories”, while they sit in government offices, or at home. 
Given that many production forests have already been depleted by predatory logging, forestry officials have fabricate survey data in such a way as to overestimate volumes of particular commercial species. Extra volume of timber is acquired from elsewhere (including national protected areas) and then it is effectively laundered as legal (Baird, 2010). 
It is a well-known practice that authorities at different levels (national, provincial, district) allocate various kinds of “special” logging plans in categorised forests over and above the harvestable volumes as per approved management plans in production forest areas and logging plans for clearance in areas with development projects. As timber resources are being deprived, this further undermines the inventory and management planning conducted for selective logging. According to Baird (2010), there are various kinds of “special” logging plans, including: for deadwood, debt repayment, barter-development, military logging, district and village construction etc. The specific terms for many of these logging plans vary, and the arrangements are often unclear, or at least not transparent to a large number of officials, let alone the general public, and the terms are not included in the management plan (see more about “Special logging plans” under section 1.4, Logging Permits). This practice also violates the Forestry Law, which allows timber logging only under the national annual logging plan.
All types of “special” quotas are difficult to control. Logging sites are allocated in areas with good forest stands with no regard for basic forestry practices. Allocation of special quotas in production forest areas places an additional burden on timber resources, undermining the expediency of forest management plans and depreciating production forest areas as a future source of commercial timber. In 2012, Agreement No. 32/PM Article 5 required authorities to approve special logging plans only in the areas of infrastructure development projects, clearance for tree and industrial crop plantation establishment which have already been approved by the Government, and with proper management. However, this is often not the case. It is quite likely that residual timber stock in production forest areas has already been significantly diminished compared to the volumes shown in surveys, as in reality timber extraction in production forest areas has continued unabated (Smirnov, 2015).
Conversion:
There is evidence that management and planning of logging in areas with development projects fail to comply even with basic requirements of the relevant legislation. The required total measurement of all trees of exploitable diameter is unfeasible under current conditions due to financial and technical restrictions, therefore the survey must be conducted in sampling plots representative of the main forest formations. 
For road construction, rigorous documentation is typically lacking by the start of construction, and projection of the route after the beginning of construction is common practice. In such conditions it is infeasible to estimate expected volumes and species composition prior to the beginning of the work (Smirnov, 2015).
Two detailed case studies on timber logging under quotas for road construction and limestone quarry conducted by the WWF (Smirnov, 2015) have revealed the following list of major non-compliances in relation to conversion of the area: 
•    There were no maps with correct borders of concessions for what forest land should be converted. 
•    In case of road construction, there were reasons to believe that a pre-felling inventory was not undertaken at all, and that documents included fictitious data (“ghost inventory”). 
•    In case of limestone quarry pre-felling, an inventory was conducted only for a part of the territory, and the survey recorded only trees with a larger diameter (>30 cm) than is required by Law, meaning that many trees that should have been measured were not. 
•    This partial pre-felling inventory was completed more than two months after provincial the logging plan had received government approval. Thus, the approved national Annual Logging Plan included only indicative amounts, even though legislation requires provincial authorities to submit applications for approval with precise specification of expected volume and species composition based on results of pre-felling inventories. Moreover, pre-felling inventory was complete already after logging under this quota commenced. 
•    No logging plans were ever made.
•    Border demarcation was not carried out. 
According to the Tropical Rainforest Programme report of 2000, logging of flooding areas is often approved for conversion and starts well before the feasibility of proposed hydropower dams has been assessed. There has been criticism that in some cases dam proposals are nothing more than a front for logging. For instance, logging under the pretext of clearance of the area to be flooded for the Xekong 4 hydropower dam continued after the Lao government announced its decision to close the project due to inaction of the developer, and the commencement of coal mining within the proposed flooding areas (Smirnov, 2015).
The WWF report (2000) also questioned the practical necessity of conversion of many hundreds of thousands of hectares of forest for limestone quarrying given that the actual annual rate of expansion of limestone quarries was less than ten hectares (Smirnov, 2015). 
In an interview with local mass media in June 2014, the Deputy Minister of Industry and Commerce, Mr. Bounmy Manivong, recognised the existence of loopholes which allow companies to legalise timber from unauthorised sources under the cover of conversion timber harvested during land clearance (mining, road and electricity grid construction projects, flooded water catchment areas with planned hydropower dam project constructions). The Deputy Director General of the Ministry of Agriculture and Forestry's Forest Inspection Department, Mr Paphakon Vongxay, gave examples of cases in which some companies that were involved in road construction began cutting down trees in an area larger than that which was necessary for the road (Vientiane Times, 24 July 2014). Usually a permit is issued, but these permits are issued based on ghost inventories. 
For geological prospecting and exploration concessions, which usually cover vast areas, a lack of specific regulations on management and logging planning creates especially favourable opportunities for illegal logging. It is unclear whether reduction of timber stands resulting from logging in the course of land clearance for development projects is recorded and reflected in forest management plans with subsequent recalculation of annual allowable cut in cases where areas with development projects fall inside production forest areas. Otherwise, this unrecorded additional burden on timber resources undermines the principle of sustainability which underlies the forest management plans.
Plantations:
Regulations require plantation owners to undertake all operations (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities, harvest of planted trees for commercial purposes etc.) in compliance with approved plantation management plans and the technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11, 14). However, these rules are not yet promulgated and often management plans are not developed for plantations.
In the absence of plantation management plans, evidence suggests that plantations are inadequately managed – silviculture practices, such as thinning, pruning and weeding, do not occur as required (Smith and Phengsopha, 2014).
Summary:
For the Annual Logging Plan, there is risk that the Annual Logging Plan is based on inadequate inventory and requests from districts, leading to approvals for logging not reflecting the resources available on the ground. This picture is further distorted by “special logging plans” that are issued without taking the annual logging plans into consideration. 
For all source types, there is risk of or relating to:
•    Wood quotas approved by officials without legal authority
•    Lack of inventory survey, or documents which include fictitious data (“ghost inventory”)
•    Lack of, or delay in, logging/management plans
•    Lack of border demarcation
For Selective logging there is risk of:
•    Lack of tree marking, or marking not done according to requirements (bad paint/unclear marking)
For Conversion there is risk of or relating to:
•    Logging in areas with development projects fails to comply with basic requirements of relevant forest legislation
•    Maps with no or incorrect borders of concessions for what forest land should be converted
•    Conversion for road construction: lack of documentation by the start of construction, and projection of the route done after construction has begun
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
Risk mitigation options
Document verification
1
Verify Forest management plan
Plantation management plan for registered plantation: includes information on location of parcels allocated for logging in current year, age structure and planted species.
2
Verify Forest management plan
Village Forest Management plan: includes information on areas allocated for smallholding tree plantations, age of plantations, planted tree species.
Description of legal requirements
Plantation management plan for registered plantations shall be in place.
VIEW MORE
General - Annual logging plan: 
According to the Forestry Law, the main document allowing logging in natural and plantation forests is the (national) Annual Logging Plan approved by the National Assembly
This divides quotas amongst the Provinces, where the District Agriculture and Forestry Offices (DAFOs) distribute provincial logging plans amongst the districts and, together with their provincial counterparts (PAFOs), to individual production forests, based on the approval of the Government. 
The Annual Logging Plan is determined on the basis of a proposal prepared by the Ministry of Agriculture and Forestry, and the proposal itself is prepared on the basis of applications submitted by provincial authorities
Provincial and Capital City Agriculture and Forestry Offices summarise annual logging plans, which include the results of pre-logging inventories in production forest areas and in areas with various development projects (roads, transmission lines, hydropower dam construction, mining, clearance for tree and industrial crop plantations etc.) which have already been approved by the Government, in their provinces. 
After the Government and the National Assembly approve the Annual Logging Plan for the country, the Ministry of Agriculture and Forestry issues the national Annual Logging Plan and then designates logging volumes for each province based on the proposed logging plans for each province. 
Logging of natural forests is only officially allowed in Production Forests (Article 28) and approved conversion areas (Article 29) under approved logging plans (Article 26 or 29) and where resource assessment surveys (Article 20) and inventory (volume and quality species) surveys (Article 23 or 24) and sustainable management plans (Article 28) have been completed.
Approval should be made in July of each year to allow logging over the dry season (generally October to April), and the approval of additional quotas is strictly prohibited (PMO15, Part 7.2 states that “For logs harvested beyond the approved quota, they are subjected to confiscate and become the State asset and strictly conduct prosecutions to the offenders”). An example of government approval of the Annual Logging Plan is Notice No. 135/2013 GO on the Implementation of the Tree Plantation & Forest Regeneration Plan and the Timber Logging and NTFP Logging Plan for the Year 2012 ± 2013, 30 January 2013, Article 1 on timber quotas, and associated tables.
Article 20 appoints MAF to ‘to lead the survey of forest and forest resources ‘, and their provincial counterparts to coordinate and implement them (Article 150). It is an offence to falsify survey data (Article 133).  Businessmen can undertake resource surveys with permission (Article 134), which would presumably under approval of MAF.
Selective logging:
Commercial timber logging in natural production forest areas is only permitted where a forest inventory survey (Article 23 and 24) and forest management plan have been conducted and developed for production land (Article 28), and on the basis of a pre-logging inventory survey for conversion land (Article 29).
The Department of Forestry of the Ministry of Agriculture and Forestry has the overall responsibility for coordinating preparation of management plans in association with relevant sectors and local authorities, as well as for final endorsement of these plans (Article 22, 39).
The template of management plans and general principles of planning, the pre-logging inventory, and tree marking are described in Guideline No. 2156/2006 DOF Part III and Regulation No. 0108/2005 MAF, Article 8.
The period of validity of the forest management plan corresponds to a 15-20 year cutting cycle, meaning that every 15 or 20 years the management plan must be revised and updated (Regulation No. 0108/2005 MAF Article 9, Guideline No. 2156/2006 DOF Part IV).
For logging in production forest areas, District Agriculture and Forestry Offices prepare a logging plan based on the forest management plan and pre-logging inventory report approved by the Department of Forestry.
The main requirements of the pre-harvest inventory in production forest areas are listed in the Forestry Law.
The pre-harvest inventory shall be conducted in a harvestable compartment one year before a harvest operation, and includes (Regulation No. 0108/2005, Article 8):
A 100 % inventory of all species of large trees that have a girth equal to or greater than an allowable girth for harvest defined in the MAF regulation
A listing of tree species assessing stand quality and mapping location of large trees that have been previously listed, and
The designing of skid trails for log extraction, and defining of sites for log yards I and II.
All boundaries of licensed logging areas for natural forests shall be clearly demarcated on maps of an appropriate scale, and on the ground. Logging plans shall include:
Topographic map, with scale 1:25,000-1:50,000
Forest management map, with scale 1:10,000-1:25,000, and
Tree location map, with scale 1:1,000 or 1:2,000
Guideline No. 2155/2006 Part V sets very detailed requirements for the selection of trees to be cut and to leave standing. Part VI describes the tree marking procedure. Results of the Pre-harvest Inventory and Tree Marking are approved by the Provincial Agriculture and Forestry Office (Regulation No. 0108/2005 Article 9).
Conversion:
Forest legislation requires precise specification of expected volume and species composition in the annual plan for timber to be harvested in areas of hydropower development, mining, infrastructure construction. This is to be based on the result of the pre-felling survey (Forestry Law, 2007, Article 18; Order No. 17/2008 PM Article 5; Order No. 15/PM, 13 May 2016, Article 4.1).
Current regulations on management and logging planning do not cover logging in the course of clearance of an area for mining.
Under Article 29 of the Forestry Law (2019), the GoL appoints a ‘responsible committee to manage, monitor and inspect the logging in accordance with regulations’. This committee is responsible for operational planning, appointing a logging enterprise, compliance monitoring, and inventory management at log yards I and II (as per Article 32).
The procedure for forming the supervision committee responsible for management of logging and clearing in areas with hydropower development, and its rights and duties, are described in Regulation No. 0112/2008 MAF Article 25 and 27. The supervision committee is mandated to guide the pre-logging survey (assessment of timber resources), and to approve the logging plan through the application by the team responsible for field logging management (Article 6 and 27). On the other hand, Regulation No. 0108/MAF 2005 Article 11 assigns inventory of areas with proposed infrastructure construction to the Provincial and Capital City Agriculture and Forestry Offices, thus leading to a contradiction in areas of overlap.
According to regulation No. 0108/MAF on 20 April 2005 Article 8.3, pre-harvest inventory within areas with infrastructure projects shall include measurement, coding and stamping of all trees with a diameter at chest height equal to or greater than 10 cm. This measurement is close to Article 18 of the Forestry Law (2007), which requires for surveying prior to infrastructure construction that all tree species with a circumference over 15 cm be marked.
A detailed regulatory framework exists only for logging in reservoir areas of hydropower dams, although the Government has been calling for urgent issuance of additional legislation related to logging in mining areas, hydropower development areas, road alignments, transmission lines and areas to be cleared for tree/industrial crop plantation (Agreement No. 32/PM 2012, Article 10).
Pre-harvest survey and logging planning in flooding areas of hydropower dams includes assessment of volume of all tree species with a diameter over 10 cm, marking of selected trees (in case of selective logging), zoning logging and NTFP logging areas, mapping of logging and sub-logging areas to a scale of 1:50,000 and 1:10,000, demarcation of logging areas by staking poles, designing of the network of log hauling roads, bridges, log yards, and the surveying of historical and archaeological sites, and of wildlife (Regulation No. 0112/2008 MAF, Articles 2 and 7).
Plantations:
Domestic investment enterprises shall operate in accordance with the feasibility study or business plan that was attached to the application for an investment licence (Law on the Promotion of Domestic Investment, 2004, Article 13).
Plantation owners are required to undertake all tree plantation activities (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities etc.) in compliance with the approved plantation management plan and technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11). Note that it is unclear whether these rules have been elaborated.
Harvest of planted trees for commercial purposes by a registered plantation shall be consistent with the plantation management plan (Regulation No. 196/2000 MAF, Article 14), although no technical requirements exist on the preparation of that plan.
It is unclear who is responsible for pre-harvest measurements, although there is an expectation that these assessments must be made by the District Agriculture and Forestry Office (Smith and Phensopha, 2014).
A quota system has been developed for natural forests and large scale plantations. While there seems to be a clear protocol that logs from smallholders should be included in the annual logging plan, it is unclear how (or whether) smallholder plantation volumes are actually included, and whether the legality of this timber can be demonstrated subsequently (Smith and Phensopha, 2014).

 
Legally required documents
  • National and provincial annual logging plans/quotas
Applicable legislation
VIEW LESS
1.3 Management and harvesting planning
Last updated on 2022-03-01 Logging in areas with development projects fails to comply with basic requirements of relevant forest legislation  Specified RISK
General - Annual logging plan: The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested... VIEW MOREGeneral - Annual logging plan: 
The Annual Logging Plan is developed on the basis of a proposal prepared by the Department of Forestry of the Ministry of Agriculture and Forestry. The proposal is itself prepared on the basis of applications submitted by provincial authorities. Formally, provincial applications must be based on the actual supply capacity of the forests, a long-term forestry development strategy, and on the amount of wood harvested by necessity of forest clearance for development projects. In practice, however, requests for quota are usually bound up with the financial needs of central and local authorities and demands for raw materials by the various sawmills, furniture makers and other wood processing factories in each province (Baird, 2010; Forest Strategy to the Year 2020 of the Lao PDR, 2005).
Minister of Agriculture and Forestry, Dr Lien Thikeo, describing forestry management in Laos, highlighted that officials have misunderstood the division of responsibility between the central and local levels, and that some village and district authorities approve wood quotas for entrepreneurs despite the fact that it is not their role to do so (Vientiane Times, 14 June 2016).
Deputy Minister of Agriculture and Forestry, Mr Thongphat Vongmany, also stressed the point that many local (provincial and district) authorities have violated the Forestry Law in the past by granting logging permission for timber not included in the Annual Logging Plan and without having a Lawful right (Vientiane Times, 14 June 2016). 
The WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber harvested in Laos is in doubt because the Government of Laos lacks reliable information on issued logging licenses (quotas). Furthermore, numerous signs have been observed in production forest areas of locals felling and processing logs into sawnwood/planks. This is done without logging permits and undermines the Annual logging plan. 
Selective logging:
Since the 2011-12 season, the Lao government has not issued national quotas on logging in production forest areas before a forest survey and forest management plan have been made. The moratorium was articulated in Order No. 31/PM 2013, while for the first time a decision not to approve Annual Logging Plan in production forest areas was announced by Deputy Prime Minister on January 26, 2012 (Vientiane Times, 27 January 2012). 
Agreement No. 32/PM 2012, Article 4, called for urgent development of forest management plans for production forest and that these be completed in 2015. The Ministry of Agriculture and Forestry aimed to complete a survey on the remaining areas of production forest which had yet to be surveyed and assessed by 2015 (Vientiane Times, 05 May 2014). However, work was still in progress in the first half of 2016. According to an official from the Forest Department of the Ministry of Agriculture and Forestry, by May 2016 the forest survey was about 50 or 60 percent complete (Vientiane Times, 09 May 2016). Order No. 15/PM on 13 May 2016 reinstated the temporary suspension of logging in production forest, and stressed the necessity of carrying on the development of production forest management plans (Article 4). 
As the Government of Laos has the opportunity to allow logging in national forests in any given year, the risks in relation to selective logging are described based on the practices of selective logging before the moratorium was in place. Whether the risk specification will be changed if selective logging is allowed depends on whether the legislation is properly implemented. 
According to the Forest Strategy to the Year 2020 of the Lao PDR (2005), it was reported that occasionally:
•    Management plans for production forest areas are not implemented, 
•    Logging has been undertaken immediately after completion of the management survey, without awaiting the pre-logging survey or tree marking, and
•    In spite of long-term logging plans, logging rotations and annual coupe areas specified in management plans, logging actually proceeds predominantly in accessible or well-endowed areas, or focuses on higher value trees. 
Many researchers have reported that personnel of District Agriculture and Forestry offices responsible for coupe demarcation in accordance with management plans have no relevant experience (for instance, working with maps), lack the necessary equipment and, what is more, important foresters are not incentivised to fulfil these duties. This, combined with their very low salaries, makes it easier for them to participate in corrupt management practices (Hodgdon, 2010).
For instance, inspection in an FSC-certified production forest area (Thapangtong districts of Savannaket province) with a valid forest management plan and approved logging plans (Jonsson, 2006) revealed that: 
•    On all inspected logging sites, no tree was marked as per requirements (simplified marking was done with bad paint and in such a way that it was often impossible to read the numbers), and
•    Most of the tree maps did not have skid trails marked. 
Ghost inventories and inaccurate inventory
Timber logged from conversion forest areas has generally not been subject to a forest inventory or of sufficient quality to allow effective monitoring and accountability. Consequently, logs were often sourced from outside approved areas (noting such areas were in themselves usually poorly defined) and either directly exported or laundered by the mixing of logs from unauthorized areas.
According to Baird (2010), most pre-logging inventory in production forest areas was not actually done at all, let alone according to the stated rules. Instead, officials often conduct “ghost inventories”, while they sit in government offices, or at home. 
Given that many production forests have already been depleted by predatory logging, forestry officials have fabricate survey data in such a way as to overestimate volumes of particular commercial species. Extra volume of timber is acquired from elsewhere (including national protected areas) and then it is effectively laundered as legal (Baird, 2010). 
It is a well-known practice that authorities at different levels (national, provincial, district) allocate various kinds of “special” logging plans in categorised forests over and above the harvestable volumes as per approved management plans in production forest areas and logging plans for clearance in areas with development projects. As timber resources are being deprived, this further undermines the inventory and management planning conducted for selective logging. According to Baird (2010), there are various kinds of “special” logging plans, including: for deadwood, debt repayment, barter-development, military logging, district and village construction etc. The specific terms for many of these logging plans vary, and the arrangements are often unclear, or at least not transparent to a large number of officials, let alone the general public, and the terms are not included in the management plan (see more about “Special logging plans” under section 1.4, Logging Permits). This practice also violates the Forestry Law, which allows timber logging only under the national annual logging plan.
All types of “special” quotas are difficult to control. Logging sites are allocated in areas with good forest stands with no regard for basic forestry practices. Allocation of special quotas in production forest areas places an additional burden on timber resources, undermining the expediency of forest management plans and depreciating production forest areas as a future source of commercial timber. In 2012, Agreement No. 32/PM Article 5 required authorities to approve special logging plans only in the areas of infrastructure development projects, clearance for tree and industrial crop plantation establishment which have already been approved by the Government, and with proper management. However, this is often not the case. It is quite likely that residual timber stock in production forest areas has already been significantly diminished compared to the volumes shown in surveys, as in reality timber extraction in production forest areas has continued unabated (Smirnov, 2015).
Conversion:
There is evidence that management and planning of logging in areas with development projects fail to comply even with basic requirements of the relevant legislation. The required total measurement of all trees of exploitable diameter is unfeasible under current conditions due to financial and technical restrictions, therefore the survey must be conducted in sampling plots representative of the main forest formations. 
For road construction, rigorous documentation is typically lacking by the start of construction, and projection of the route after the beginning of construction is common practice. In such conditions it is infeasible to estimate expected volumes and species composition prior to the beginning of the work (Smirnov, 2015).
Two detailed case studies on timber logging under quotas for road construction and limestone quarry conducted by the WWF (Smirnov, 2015) have revealed the following list of major non-compliances in relation to conversion of the area: 
•    There were no maps with correct borders of concessions for what forest land should be converted. 
•    In case of road construction, there were reasons to believe that a pre-felling inventory was not undertaken at all, and that documents included fictitious data (“ghost inventory”). 
•    In case of limestone quarry pre-felling, an inventory was conducted only for a part of the territory, and the survey recorded only trees with a larger diameter (>30 cm) than is required by Law, meaning that many trees that should have been measured were not. 
•    This partial pre-felling inventory was completed more than two months after provincial the logging plan had received government approval. Thus, the approved national Annual Logging Plan included only indicative amounts, even though legislation requires provincial authorities to submit applications for approval with precise specification of expected volume and species composition based on results of pre-felling inventories. Moreover, pre-felling inventory was complete already after logging under this quota commenced. 
•    No logging plans were ever made.
•    Border demarcation was not carried out. 
According to the Tropical Rainforest Programme report of 2000, logging of flooding areas is often approved for conversion and starts well before the feasibility of proposed hydropower dams has been assessed. There has been criticism that in some cases dam proposals are nothing more than a front for logging. For instance, logging under the pretext of clearance of the area to be flooded for the Xekong 4 hydropower dam continued after the Lao government announced its decision to close the project due to inaction of the developer, and the commencement of coal mining within the proposed flooding areas (Smirnov, 2015).
The WWF report (2000) also questioned the practical necessity of conversion of many hundreds of thousands of hectares of forest for limestone quarrying given that the actual annual rate of expansion of limestone quarries was less than ten hectares (Smirnov, 2015). 
In an interview with local mass media in June 2014, the Deputy Minister of Industry and Commerce, Mr. Bounmy Manivong, recognised the existence of loopholes which allow companies to legalise timber from unauthorised sources under the cover of conversion timber harvested during land clearance (mining, road and electricity grid construction projects, flooded water catchment areas with planned hydropower dam project constructions). The Deputy Director General of the Ministry of Agriculture and Forestry's Forest Inspection Department, Mr Paphakon Vongxay, gave examples of cases in which some companies that were involved in road construction began cutting down trees in an area larger than that which was necessary for the road (Vientiane Times, 24 July 2014). Usually a permit is issued, but these permits are issued based on ghost inventories. 
For geological prospecting and exploration concessions, which usually cover vast areas, a lack of specific regulations on management and logging planning creates especially favourable opportunities for illegal logging. It is unclear whether reduction of timber stands resulting from logging in the course of land clearance for development projects is recorded and reflected in forest management plans with subsequent recalculation of annual allowable cut in cases where areas with development projects fall inside production forest areas. Otherwise, this unrecorded additional burden on timber resources undermines the principle of sustainability which underlies the forest management plans.
Plantations:
Regulations require plantation owners to undertake all operations (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities, harvest of planted trees for commercial purposes etc.) in compliance with approved plantation management plans and the technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11, 14). However, these rules are not yet promulgated and often management plans are not developed for plantations.
In the absence of plantation management plans, evidence suggests that plantations are inadequately managed – silviculture practices, such as thinning, pruning and weeding, do not occur as required (Smith and Phengsopha, 2014).
Summary:
For the Annual Logging Plan, there is risk that the Annual Logging Plan is based on inadequate inventory and requests from districts, leading to approvals for logging not reflecting the resources available on the ground. This picture is further distorted by “special logging plans” that are issued without taking the annual logging plans into consideration. 
For all source types, there is risk of or relating to:
•    Wood quotas approved by officials without legal authority
•    Lack of inventory survey, or documents which include fictitious data (“ghost inventory”)
•    Lack of, or delay in, logging/management plans
•    Lack of border demarcation
For Selective logging there is risk of:
•    Lack of tree marking, or marking not done according to requirements (bad paint/unclear marking)
For Conversion there is risk of or relating to:
•    Logging in areas with development projects fails to comply with basic requirements of relevant forest legislation
•    Maps with no or incorrect borders of concessions for what forest land should be converted
•    Conversion for road construction: lack of documentation by the start of construction, and projection of the route done after construction has begun
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Field verification
1
Visit Logging plan
Compliance with compliance of legal requirements shall be confirmed at the ground
Description of legal requirements
Documentation and maps for plantation and development projects must be in place prior to conversion of an areas. Converted areas shall not exceed the area granted for development projects
VIEW MORE
General - Annual logging plan: 
According to the Forestry Law, the main document allowing logging in natural and plantation forests is the (national) Annual Logging Plan approved by the National Assembly
This divides quotas amongst the Provinces, where the District Agriculture and Forestry Offices (DAFOs) distribute provincial logging plans amongst the districts and, together with their provincial counterparts (PAFOs), to individual production forests, based on the approval of the Government. 
The Annual Logging Plan is determined on the basis of a proposal prepared by the Ministry of Agriculture and Forestry, and the proposal itself is prepared on the basis of applications submitted by provincial authorities
Provincial and Capital City Agriculture and Forestry Offices summarise annual logging plans, which include the results of pre-logging inventories in production forest areas and in areas with various development projects (roads, transmission lines, hydropower dam construction, mining, clearance for tree and industrial crop plantations etc.) which have already been approved by the Government, in their provinces. 
After the Government and the National Assembly approve the Annual Logging Plan for the country, the Ministry of Agriculture and Forestry issues the national Annual Logging Plan and then designates logging volumes for each province based on the proposed logging plans for each province. 
Logging of natural forests is only officially allowed in Production Forests (Article 28) and approved conversion areas (Article 29) under approved logging plans (Article 26 or 29) and where resource assessment surveys (Article 20) and inventory (volume and quality species) surveys (Article 23 or 24) and sustainable management plans (Article 28) have been completed.
Approval should be made in July of each year to allow logging over the dry season (generally October to April), and the approval of additional quotas is strictly prohibited (PMO15, Part 7.2 states that “For logs harvested beyond the approved quota, they are subjected to confiscate and become the State asset and strictly conduct prosecutions to the offenders”). An example of government approval of the Annual Logging Plan is Notice No. 135/2013 GO on the Implementation of the Tree Plantation & Forest Regeneration Plan and the Timber Logging and NTFP Logging Plan for the Year 2012 ± 2013, 30 January 2013, Article 1 on timber quotas, and associated tables.
Article 20 appoints MAF to ‘to lead the survey of forest and forest resources ‘, and their provincial counterparts to coordinate and implement them (Article 150). It is an offence to falsify survey data (Article 133).  Businessmen can undertake resource surveys with permission (Article 134), which would presumably under approval of MAF.
Selective logging:
Commercial timber logging in natural production forest areas is only permitted where a forest inventory survey (Article 23 and 24) and forest management plan have been conducted and developed for production land (Article 28), and on the basis of a pre-logging inventory survey for conversion land (Article 29).
The Department of Forestry of the Ministry of Agriculture and Forestry has the overall responsibility for coordinating preparation of management plans in association with relevant sectors and local authorities, as well as for final endorsement of these plans (Article 22, 39).
The template of management plans and general principles of planning, the pre-logging inventory, and tree marking are described in Guideline No. 2156/2006 DOF Part III and Regulation No. 0108/2005 MAF, Article 8.
The period of validity of the forest management plan corresponds to a 15-20 year cutting cycle, meaning that every 15 or 20 years the management plan must be revised and updated (Regulation No. 0108/2005 MAF Article 9, Guideline No. 2156/2006 DOF Part IV).
For logging in production forest areas, District Agriculture and Forestry Offices prepare a logging plan based on the forest management plan and pre-logging inventory report approved by the Department of Forestry.
The main requirements of the pre-harvest inventory in production forest areas are listed in the Forestry Law.
The pre-harvest inventory shall be conducted in a harvestable compartment one year before a harvest operation, and includes (Regulation No. 0108/2005, Article 8):
A 100 % inventory of all species of large trees that have a girth equal to or greater than an allowable girth for harvest defined in the MAF regulation
A listing of tree species assessing stand quality and mapping location of large trees that have been previously listed, and
The designing of skid trails for log extraction, and defining of sites for log yards I and II.
All boundaries of licensed logging areas for natural forests shall be clearly demarcated on maps of an appropriate scale, and on the ground. Logging plans shall include:
Topographic map, with scale 1:25,000-1:50,000
Forest management map, with scale 1:10,000-1:25,000, and
Tree location map, with scale 1:1,000 or 1:2,000
Guideline No. 2155/2006 Part V sets very detailed requirements for the selection of trees to be cut and to leave standing. Part VI describes the tree marking procedure. Results of the Pre-harvest Inventory and Tree Marking are approved by the Provincial Agriculture and Forestry Office (Regulation No. 0108/2005 Article 9).
Conversion:
Forest legislation requires precise specification of expected volume and species composition in the annual plan for timber to be harvested in areas of hydropower development, mining, infrastructure construction. This is to be based on the result of the pre-felling survey (Forestry Law, 2007, Article 18; Order No. 17/2008 PM Article 5; Order No. 15/PM, 13 May 2016, Article 4.1).
Current regulations on management and logging planning do not cover logging in the course of clearance of an area for mining.
Under Article 29 of the Forestry Law (2019), the GoL appoints a ‘responsible committee to manage, monitor and inspect the logging in accordance with regulations’. This committee is responsible for operational planning, appointing a logging enterprise, compliance monitoring, and inventory management at log yards I and II (as per Article 32).
The procedure for forming the supervision committee responsible for management of logging and clearing in areas with hydropower development, and its rights and duties, are described in Regulation No. 0112/2008 MAF Article 25 and 27. The supervision committee is mandated to guide the pre-logging survey (assessment of timber resources), and to approve the logging plan through the application by the team responsible for field logging management (Article 6 and 27). On the other hand, Regulation No. 0108/MAF 2005 Article 11 assigns inventory of areas with proposed infrastructure construction to the Provincial and Capital City Agriculture and Forestry Offices, thus leading to a contradiction in areas of overlap.
According to regulation No. 0108/MAF on 20 April 2005 Article 8.3, pre-harvest inventory within areas with infrastructure projects shall include measurement, coding and stamping of all trees with a diameter at chest height equal to or greater than 10 cm. This measurement is close to Article 18 of the Forestry Law (2007), which requires for surveying prior to infrastructure construction that all tree species with a circumference over 15 cm be marked.
A detailed regulatory framework exists only for logging in reservoir areas of hydropower dams, although the Government has been calling for urgent issuance of additional legislation related to logging in mining areas, hydropower development areas, road alignments, transmission lines and areas to be cleared for tree/industrial crop plantation (Agreement No. 32/PM 2012, Article 10).
Pre-harvest survey and logging planning in flooding areas of hydropower dams includes assessment of volume of all tree species with a diameter over 10 cm, marking of selected trees (in case of selective logging), zoning logging and NTFP logging areas, mapping of logging and sub-logging areas to a scale of 1:50,000 and 1:10,000, demarcation of logging areas by staking poles, designing of the network of log hauling roads, bridges, log yards, and the surveying of historical and archaeological sites, and of wildlife (Regulation No. 0112/2008 MAF, Articles 2 and 7).
Plantations:
Domestic investment enterprises shall operate in accordance with the feasibility study or business plan that was attached to the application for an investment licence (Law on the Promotion of Domestic Investment, 2004, Article 13).
Plantation owners are required to undertake all tree plantation activities (production and transport of seedlings, site preparation, planting, protection, maintenance and thinning activities etc.) in compliance with the approved plantation management plan and technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11). Note that it is unclear whether these rules have been elaborated.
Harvest of planted trees for commercial purposes by a registered plantation shall be consistent with the plantation management plan (Regulation No. 196/2000 MAF, Article 14), although no technical requirements exist on the preparation of that plan.
It is unclear who is responsible for pre-harvest measurements, although there is an expectation that these assessments must be made by the District Agriculture and Forestry Office (Smith and Phensopha, 2014).
A quota system has been developed for natural forests and large scale plantations. While there seems to be a clear protocol that logs from smallholders should be included in the annual logging plan, it is unclear how (or whether) smallholder plantation volumes are actually included, and whether the legality of this timber can be demonstrated subsequently (Smith and Phensopha, 2014).

 
Legally required documents
  • National and provincial annual logging plans/quotas
Applicable legislation
VIEW LESS
1.4 Harvesting permits
Last updated on 2022-03-01 Clearing of forest outside concession boundaries Specified RISK
General: Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). According to Wellmann (2014), screening of the concession inventory data suggests that currently abou... VIEW MOREGeneral: 
Despite an extensive regulatory framework on land concessions, the capacity of relevant government agencies to ensure legal compliance are limited, and many critics note that concessions and leases have been granted to investors without adherence to national regulations, and with little regard to customary tenure (Forest Trends, 2012). 
According to Wellmann (2014), screening of the concession inventory data suggests that currently about 5 million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties. How much of this is plantation concessions is not known. 
However, the Government-supported State Land Leases and Concessions Inventory (Schönweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to compile documents for concessions and leases of a total area of only 1.1 million hectares. 
Schönweger et al. (2012) found that no line agencies, either at the central or provincial levels, had full or sufficiently detailed information on land leases and concessions granted to date. Moreover, where data was available, it was often inaccurate, and the size and location of investment projects – both allocated areas and actual developments – were frequently unknown.
Data for each project available at the provincial and district levels was rarely complete, especially with regard to documents related to the project approval process. In some cases, only one type of project document, such as the investment licence, agreement or contract was available, and for some, no documents at all were available or shared. Information about the implementation status and progress of projects (e.g. land clearance, planting, processing and production) was almost never available.
Registration of plantations is a legal requirement for all plantation owners (plantations under both concession agreements and temporary land use certificates), but few smallholder plantations have been formally registered. According to Smith (2014), only about 10% of teak smallholder plantations are registered, as most of the growers do not see the benefits of getting plantation registration certificates (regulations are overly complex, with numerous steps and associated costs). There is some evidence that some farmers “borrow plantation certificates” when they sell their timber, to meet this legal requirement (Smith and Phengsopha, 2014). 
The lack of a monitoring mechanism and on-the-ground regulatory enforcement for land concessions has created an environment in which companies feel free to proceed with development plans, with or without written permission or approval documentation. Furthermore, a lack of transparency in all land-related transactions results in situations in which citizens and local communities cannot monitor how well Laws and regulations are being implemented.
The allocation of large-scale land concessions has been a highly controversial issue in Laos over the past decade, so much so that the Government of Laos has already issued several moratoriums on land concessions. Despite the decision to extend a moratorium on the consideration and approval of proposed new large-scale rubber and eucalyptus plantation projects, at the end of January 2016 Oudomxay authorities approved a 30-year land concession on a total area of 420 hectares for a Chinese businessman to plant rubber trees in the Namor district of Oudomxay Province (KPL, 25 January 2016).
Obtaining concessions through bribes
Transparency International has ranked Laos 130th of 180 countries in their 2019 Corruption Perception Index (CPI) report , with score of 29 (which is far below the FSC’s “low risk” threshold of 50). Professor Martin Stuart-Fox argues that “…the outlook for reduction of corruption in the Lao PDR is not encouraging, despite the new anti-corruption Law. Political patronage is deeply engrained in the political culture of the Lao PDR, and in particular in its political institutions and their functioning” (Stuart-Fox, 2006).
According to the report of the Inspection Committee of the Party Central Committee, and the Government Inspection Authority, in 2018 inspection authorities uncovered 595 people involved in illegal cases of corruption relating to timber of whom 50 were government officials, 182 were businessmen and the remaining were local residents . 
The embedded problem of corruption in state agencies responsible for the management of the land resources sector has been acknowledged by many. 
According to Forest Trends research (2010), Vietnamese companies usually pay significant “invisible costs” to provincial and national authorities to obtain land for the establishment of rubber plantations. 
Kenney-Lazar (2010) presents a case in which a Vietnamese corporation provided material incentives to certain village leaders and government officials to ensure the successful acquisition of land for the establishment of a rubber plantation. 
Companies begin activities on land before receiving authorisation
The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) documented a number of cases in which companies have begun activities on land before receiving (and sometimes before even requesting) authorisation from the relevant government authority. 
Getting approval of concessions above 100 ha from authorities without proper authorisation
According to Forest Trends (2014), despite the moratoriums on the granting of new land concessions larger than 100 ha announced by the Prime Minister in May 2007 (PM Announcement No. 743), and further suspension of approvals for all investment proposals for the exploration and survey of a range of mineral ores and rubber and eucalyptus plantations (PMO No. 13) in June 2012, concessions of various sizes continue to be granted in a number of scenarios.
A number of provincial reports have provided evidence that some authorities have abused or “misinterpreted” their power and mandates. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) found that in many cases authorities at the provincial or district levels were approving land areas over the limit of their mandate. For instance, authorities of Vientiane and Xayabury provinces approved land concessions for tree plantations of 670 and 300 ha respectively, which exceed many-fold the limits of their authority. 
In order to evade the Law and grant such large concession areas at the provincial level, the land was divided into several parcels, and the approvals were made in separate documents. 
Establishment of commercial tree plantations in natural forests 
In numerous cases, plantation concessions have been issued or extended into areas where establishment of commercial tree plantations is not legally allowed. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) revealed that a considerable share of tree plantation projects granted permission (59.517 ha, or 19%) occur on land categorised as forest. Most of the tree plantation area occurring on land categorised as forest falls within protection forest (42,257 ha). A sizeable amount of tree plantation (10,127 ha) was found within areas categorised as conservation forest. 
For example, concession areas allocated to several rubber plantations were found to fall inside the Dong Hua Sao National Protected Area in Champasak Province (Schönweger et al., 2012). 
The Government revealed that allocation of rubber plantations contributed to encroachment of 39,000 ha in Phou Phanang and Phou Khao Khoay National Protected Areas in Vientiane and Borikhamxay provinces, and ordered that all encroachment into protected areas cease. The Government intended to confiscate illegally planted lands and incorporate them into the protected areas as national property (Vientiane Times, 05 April 2013). 
Forest Trends research (2010) provides an example of a Vietnamese company applying for land in Attapeu province to establish a rubber plantation for which the primary objective was to get “legal” access to timber logging in natural forest. As a result, the company was granted 20,000 ha of forest land, half of which had standing trees of marketable value. 
Despite legislation that prohibits the clearing of productive natural forest during the process of development of tree plantations, much evidence has been collected recently to prove that a number of concessions have been granted for areas such as dense forest (which means that plantation establishment begins with deforestation). 
For example, the report on the results of the state land leases and concessions inventory in Laos (Schönweger et al., 2012) presents a case in which a concession for an area of 300 ha, granted to plant rubber trees was predominantly covered by healthy secondary and primary forest. However, land survey report by the District Agriculture and Forestry Office stated that the land consisted solely of fallow forest (left after shifting cultivation, 2-7 years old), in other words, that no trees with economic value existed within the area.
Hunt (2014) highlights numerous examples of large scale clearance of dense/rich natural forests in Oji LPFL concessions (pulp wood plantations) conducted by the Government of Laos immediately prior to preparing land for plantations operations. It involved clearance of high conservation value forests – forest which meets the FSC criteria of forest areas fundamental to meeting the basic needs of local communities (e.g. subsistence, health), and/or critical to local communities’ traditional cultural identity (village conservation forest areas, among other areas). 
Baird (2014) notes that productive dry dipterocarp forest has been frequently defined as degraded, thus allowing eucalyptus plantation development to occur, even when this has caused serious negative impacts on productive habitats with great livelihood importance for local people who rely on them. According to Hunt (2014), lands designated as degraded commonly include secondary forest, or areas that are part of extensive agro-forestry cropping systems such as rotational (“shifting”) cultivation. Such areas have been shown to have a high degree of biodiversity, and the resources within these forest areas are invariably used by villagers for their livelihood needs.
One reason for this is the lack of clear legal definitions of “degraded” and “barren” forest lands, which can be zoned for conversion into planted forests, and what exactly constitutes “degradation” (Lestrelin et. al, 2013; Baird, 2014). Baird (2014) emphasises that “the concept has been left vague and open to interpretation… even while the term has remained [a] powerful determinant of what happens on the ground”. He suggests that vague wording and the lack of clear and consistent definitions gives the state more power to facilitate plantation development, or to prevent it, and to decide either way arbitrarily. 
Additionally, commercial grade timber harvested in preparation for conversion activities has become a critical source of timber in Laos (Forest Trends, 2014; Smirnov, 2015). Potential revenue from conversion timber is a strong enticement for local authorities to facilitate the development of large land concessions (including rubber and eucalyptus) in forested areas, in contravention of legislative requirements. 
Baird (2010) points out that when the Government allocates concessions for industrial crops, they only give concession holders permission to cultivate land, while logging operations associated with concession lands are usually allocated to other companies that become responsible for removing the marketable trees from “degraded” forest land before an investor clears the remaining vegetation and begins replanting the area. On the other hand, a Forest Trends report (2010) presents examples when logging could be a part of concession deals. 
In 2010, a Vietnamese corporation reported that it held rights to 300,000m3 of timber for furniture production, which was “sourced from the reclamation of land from forest for rubber plantation” in Southern Laos (Global Witness, 2013).
Much evidence has been collected indicating that concessions acquired for plantations are used as a cover for access to valuable timber resources. Some companies discontinue the projects or transfer the concessions to other companies after extracting all conversion timber, which is extremely profitable but legally questionable (Forest Trends, 2010; 2014). The legal status of this wood remains unclear, and information on the extent, volumes, use, and value of such timber is limited and inconsistent.
Furthermore, under cover of clearance of plantations, logging operators often extend the range of their logging operations into the areas surrounding the concession (Schönweger, O. et al., 2012). 
Granting concessions without maps and border demarcations 
Numerous reports provide evidences of the unavailability of maps for granted concessions. 
As shown by the concession inventory conducted in Vientiane Province in 2008-2009 (CRILNR (NLMA), 2009), the unavailability of maps and even of simple schematics identifying concession borders has been a systematic violation. According to this inventory, only 5% of all active land lease and concession projects (e.g. agriculture, plantation, mining, hydro dams) were able to provide proper maps with boundaries of lease/concession areas (12 of 237), including 3.5% of agriculture projects (4 of 114), which include plantation projects. In 21.9% of cases, representatives’ rough hand-drawn maps were available, including 27.2% of agriculture projects (31); it has been noted that these maps often “did not reflect reality”.
According to Wellmann (2014), screening of the data of the concession inventory suggests that currently about five million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties.
However, even the government-supported State Land Leases and Concessions Inventory (Shonweger et al., 2013), considered to be the most comprehensive source on land-based investment in the Lao PDR, was able to spatially reference only 53% of all concessions and leases. Of the 2,642 deals in the inventory, spatially referenced data was available for only 1,258 projects (48% of all projects) covering 587,564 hectares. The inventory also revealed several examples of low quality concession maps. In one case in 2006, a company was granted authorisation for a rubber plantation of 214 ha. At the same time, borders on the map attached to the contract covered an area of 3,411 ha. By the time the inventory was made, the developer had already cleared 345 ha of forest. 
Kenney-Lazar (2010, 2015) mentions cases of the granting of massive concessions for pulp and rubber plantations in which maps demarcating the extent of the plantation fields were made by the companies after the land had already been cleared. 
It is not unusual for concession holders to clear land outside of the agreed-upon boundaries (Kenney-Lazar, 2010). Kenney-Lazar (2010) provides an example of a Vietnamese company which acquired more land in Savannakhet province at the local level than allowed within their MOU with the central Government while district officials “only complained that the company cleared land outside of the area allocated to them, and did so without notifying the district, only apologizing and making up excuses afterward” (Kenney-Lazar, 2015).
Further, analysis of satellite images of areas with some rubber concessions in Attapeu province has revealed large areas of forest cleared beyond the legal boundaries of concessions (Global Witness, 2013).
Failing to conduct and get approval for social and environmental impact assessment before granting concession 
Numerous researchers provide evidences that companies either conduct required social and environmental impact assessments post-factum – already long after acquiring land concessions – or do not conduct them at all.
For instance, according to Kenney-Lazar (2015), a Vietnamese company cleared land in Savannakhet province for the establishment of a eucalyptus plantation before detailed surveys of what land was available had been conducted. Further, companies usually only conduct surveys if there is a conflict with villages concerning the land cleared. Another Vietnamese corporation did not conduct any environment and social impact assessments prior to being granted a concession in Attapeu province for the establishment of a rubber plantation. The required assessments were made after the project had been operational for two years (Kenney-Lazar, 2010).
Summary:
Concessions in natural forest are not allowed.
For Plantation (concessions) there is risk of or relating to:
•    Concession licences being issued as a result of corruption (bribes)
•    Licenses being issued without legal authority
•    Concessions being established without authorisation
•    Concession licences being issued for areas greater than allowed by Law (100 ha)
•    Forest being cleared for plantation concessions (illegal)
o    Within conservation forest, or
o    Established on areas that are not degraded/barren
•    Concession plantations being established without proper maps/boundaries
o    Clearing of forest outside concession boundaries
•    Concessions being established without social and environmental impact assessments
For Plantations (smallholding), there is risk of:
•    Lack of plantation certificates” and use of “borrowed” plantation certificates
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
Risk mitigation options
Field verificationStakeholder consultation
1
Visit Logging area
Conduct onsite verification to ensure boarders are respected
2
Consult Local villages
Consultation with local villagers and stakeholders that no logging takes place outside plantation concession boundaries.
Description of legal requirements
Forest shall not be cleared outside forest concession bounderies
VIEW MORE
Selection Logging and Conversion: N/A
According to the Forestry Law, Articles 28 and 29, timber harvested from natural forests remain the property of the Government and must be carried out: 
•    where there is a sustainable forest management plan and the survey is done according to Article 23 or
•    in the approved forestland conversion areas where the survey is completed according to Article 24.
All logging (Article 26) and harvesting of NTFPs (Article 27) in natural forests is undertaken in accordance with the Annual Logging Plan as specified under the Forestry Law and as ultimately approved by the Government based on National Assembly approvals. This plan is developed by MAF and its provincial counterparts.
Under PMO15 (2016), conversion project developers or construction contractors cannot carry out logging and MAF has the direct responsibility for timber harvest and sales under established harvesting units. However, under the Forestry Law, timber logging in natural forests is only allowable by enterprises legally established and possess capacity and are approved by the PAFO (Article 26, 28, 29, 89, 104, 105). Under this law, it may be possible for non-government enterprises to be registered for the purpose of logging in natural forests, as Article 134 states that businessmen cannot harvest or clear forestland ‘where is not allowed to do so by the agriculture and forestry sector’. All logging in natural forests must be undertaken with the approval, supervision and monitoring of government officials.
Plantation (concessions):
Concessions for tree plantation are restricted to degraded and barren forest lands. Concessions can be on production forestlands, but only in the form of a lease or concession for no more than 50 years (with a maximum extension of 30 years). 
•    Degraded Forestland is the forestland areas where forests have been heavily and continually damaged for many decades  and take many years to regenerate by itself, which has the crown cover not over 10% and the volume of standing trees with more than 10 cm diameter and no more than 20m3/ha (Article 3.15)
•    Barren Forestland is the forestland areas where forests have been heavily and continually damaged for many years causing the areas to be covered by Alang alang (Imperata cylindrical), Vetiver, shrub, which the trees cannot naturally regenerate by itself (Article 3.16).
The Ministry of Natural Resources and Environment, formerly the National Land Management Authority, is technically in charge of approving prescriptions for the issuing approval for all land concessions, except mining and hydro-electricity concessions. The Ministry of Planning and Investment issues final consent, with consultation across other line agencies (including the Ministry of Agriculture and Forestry, the Ministry of Industry and Commerce, the Ministry of Energy and Mines etc.) and the appropriate provincial counterparts. 
In the Lao PDR, a tree plantation is broadly defined as an operation approved by the State to plant trees on an area of degraded or barren forest land (Regulation No. 196/2000 MAF Article 2). 
Plantations eligible for registration must have an area of 1,600m2, and legislation recognises different planting systems, some of which imply fewer than 1,100 trees/ha (MAF Directive1849/AF.99).
Plantations (smallholding):
For the establishment of plantations, approval from the Government is not required for individuals and households who plant trees on land formally allocated to them and using their own funds and labour. It is not clear if village forest areas could be developed to include commercial tree plantations.
Village forest area is defined under Article 3.8 and their permitted use under Article 3.9 of the Forestry Law. Provisions for village management and planning is prescribed under Article 39 and can apply to any forestland category. Article 39 also states that village forest management planning shall be regulated by a separate specific regulation which can allocate exclusive customary use and protection rights with no tax obligations.
Three-year temporary land use certificates for tree planting on degraded forest land (three ha per labourer in a household) are issued to villagers by the District Administrative Authority in coordination with the Village Administrative Authority. More land can be requested from village and district authorities. If managed properly during the initial term, then the lessee may request the Land Management Office to issue a Land Title for long-term use (Land Law, 2003, Articles 21 and 22). 
Concessions for tree plantations are granted upon approval by the Ministry of Natural Resources and Environment or by Provincial/City Offices of Natural Resources and Environment, depending on: the category of land (degraded forest land or barren forest land), the size of the concession, and the duration of concession agreement (Decree 135/PM 2009 Article 28, Forestry Law, 2007 Articles 75 and 76). 
Approval of concessions (only for Land Title for Long Term Use) is conditional upon surveys which have to be conducted and approved before the lease or concession is granted (Forestry Law, 2007, Article 74). The following documents must be developed:
•    Study on socio-economic information and appropriateness to natural conditions, land tenure rights 
•    Business feasibility study 
•    Social and environmental impact assessment, including appropriate resolution measures, and
•    Operational plan on protection of water resources and the environment, land clearing, village development, participation of local people, benefit sharing etc.
A “technical social and economic impact assessment” is required for any tree plantation of more than 5 ha, including groups of neighbouring parcels with a total area of more than 5 ha (Regulation 196/AF, 2000 Article 4).
Procedural requirements for foreign investors to gain permission and licenses for tree plantation are described in Regulation No. 196/2000 MAF, Article 7.
The legitimacy of concession rights is confirmed by a concession registration certificate, while the terms and conditions are defined in the concession agreement (Law on Investment Promotion Articles 25, 26). 
The requirements and procedure for the registration of tree plantations are specified in Directive No. 1849/1999 MAF Articles 1-6 and Regulation No. 196/2000 MAF, Article 12 (See 1.1.4). 
In May 2007, the Prime Minister of the Lao PDR announced a moratorium on granting of new land concessions greater than 100 ha to give the Government of Laos an opportunity to review its policy on granting large-scale concessions, and to address the shortcomings of its previous land management strategy. 
In an attempt to properly regulate the existing mining and tree plantation investment projects, order No 13/PM on ceasing consideration and approval for new investment of mining exploration and survey, rubber and eucalyptus plantations was implemented on 11 June 2012. This moratorium (2012(13/PM)) on consideration and approval for proposed new rubber and eucalyptus plantation projects was extended in December 2015 by a decision of the Prime Minister’s cabinet (Vientiane Times, 25 December 2015).
The Government clarified that the moratorium does not apply to investments in tree plantations by companies operating on a 2+3 system, where farmers provide the labour and the land (often under temporary land use certificates) while the companies supply the saplings, technical assistance and marketing without large land concessions from the Government (Vientiane Times, 30 March 2016). 
 
Legally required documents
  • Approval of District office of Agriculture and Forestry
Applicable legislation
VIEW LESS
1.4 Harvesting permits
Last updated on 2022-03-01 Bribes used to obtain logging permits (corruption)  Specified RISK
Selective logging and Conversion:Formally, logging/timber logging in natural forests is separated from sales turnover of timber, since harvested timber is considered to be state property that must be sold via auction or by means of negotiation. Consequently, an operator/contractor (state logging unit or logging company) provides a logging service which is paid for by state agencies. However, due to the absence of state logging capacity and funds... VIEW MORESelective logging and Conversion:
Formally, logging/timber logging in natural forests is separated from sales turnover of timber, since harvested timber is considered to be state property that must be sold via auction or by means of negotiation. Consequently, an operator/contractor (state logging unit or logging company) provides a logging service which is paid for by state agencies. 
However, due to the absence of state logging capacity and funds to pay for logging services, in practice logging contracts are given to a company that is interested in the acquisition of the entire timber harvest or of its share. Payment for logging is by barter, i.e. the fee for logging services is taken from the money (royalties) paid by the company to the Government for harvested timber.
Timber is usually sold at the lowest price, which is many times lower than the market price. Besides this, in practice, logging companies and responsible state agencies view logging permits as permission to harvest some specific volume of timber, while other logging specifications, such as timber line, species composition etc., based on pre-felling inventory, are disregarded (Smirnov, 2015). 
Given these conditions, companies are generally willing to pay substantial amounts of money in the form of bribes to relevant forestry authorities at the provincial or district level in order to gain logging permits (Baird, 2010).
The Ministry of Agriculture and Forestry has also admitted that some provincial and local authorities fail to enforce legally required timber logging regulations and certification and stamping procedures, and that a lack of coordination and enforcement is providing room for some companies to carry out illegal logging, which is facilitated by some officials exploiting loopholes in the permit issuing system (Vientiane Times, 27 January 2012). Laos’ government-controlled media acknowledges that some government authorities are conspiring with timber businesses by forging documents to enable illegal logging (Vientiane Times, 21 September 2015).
Deputy Director General of Forestry Department of the Ministry of Agriculture and Forestry, Mr. Bualy Phameuang, has stressed that currently relevant government officials have not been involved in logging conducted by project developers (companies), and that consequently huge numbers of trees in various projects have been felled illegally outside areas approved by the government, including areas where expensive trees are available (Vientiane Times, 16 June 2016).
In light of this issue, Prime Minister Thongloun Sisoulith, on 13 of May 2016, issued Prime Ministerial Order No. 15, prohibiting project developers or construction contractors from carrying out logging in infrastructure development projects (Article 4.3) as this must be done by the state officials in charge. 
Deputy Minister of Agriculture and Forestry Mr Thongphat Vongmany recently pointed out that the Forestry Law allows only the state officials in charge to carry out the logging and sale of lumber through a bidding process (Vientiane Times, 14 June 2016). 
However, according to the Deputy Director General of the Forestry Department of the Ministry of Agriculture and Forestry, Mr Bualy Phameuang, at the moment, logging units have only been reported in Savannakhet province; logging units in other provinces are expected to be initiated next year. “If the establishment of the units is not initially possible in all provinces, we can begin with some four or five provinces in the early stage,” he said (Vientiane Times, 16 June 2016). 
Selective logging:
Jonsson (2006) noticed the lack of a standardised format and content for logging contracts specifying the key elements of the services to be provided, and references to guiding documents. Inspection of logging sites in the Don Situang production forest area has demonstrated that required documents (including maps, logging plans etc.) were scattered, and elements were missing (Jonsson, 2006). Permits were issued despite this lack of documents, which reflects a general problem at the national level. 
Special logging plans
A number of different forms of quotas have been and are still being issued. There is a lack of a clear legal basis for the issuing of “selective logging” quotas. 
Deadwood quotas usually do not specify locations for cutting (and sometimes do not specify quantity), and no tracking system exists to identify the origin of deadwood. These quotas, which can be for volumes of dozens of thousands of cubic metres, have been used to illegally cut healthy trees in any category of forest, including production forest areas (Jonsson, 2006). 
For instance, inspection of log yards with timber harvested under deadwood quotas in the Don Situang production forest area, under a valid forest management plan and logging plans which have been formally approved in line with prescribed official procedures, has shown that at least one third of the timber cut was fresh (Jonsson, 2006). Besides this, logging of “deadwood” at sites with recent selective logging causes additional damage to remaining trees. Baird (2010) reports a case in which Champassak province authorities issued a deadwood quota for cutting unspecified quantity of Siamese rosewood (Dalbergia cochinchinensis), a species officially listed as prohibited for logging.
The Government of Laos acknowledges serious problems with deadwood logging plans in general, but especially in relation to conservation forests (National Protected Areas). Despite the lack of legal foundation, the practice was recognised and, since 2008,, sites for logging deadwood are required to be located and identified, although verification remains a problem (Baird, 2010). 
Minister of Agriculture and Forestry Dr Lien Thikeo pointed the finger at permission to collect dead or poisoned trees as one of the reasons for illegal logging: “…this process has never ended as people continue to poison the trees and use that as an excuse to cut them from the forests” (Vientiane Times, 14 June 2016).
Debt-repayment logging plans are designed to facilitate debt repayment to foreign countries, especially former or present-day socialist allies. The government of Laos issues these quotas to large logging and wood processing companies, and profits from selling wood products (after the company takes its cut) are paid to lending countries (Baird, 2010). Usually, no information on the origin and conditions of the debts is publicly available, and no such quotas are mentioned in available documentation. One of the concerns associated with debt-repayment quotas is that, allegedly, there is no restriction on the source of the timber, and contractors can cut virtually wherever they choose (Tropical Rainforest Programme, 2000). In 2012, Agreement No. 32/PM Article 2 called for termination of debt repayment by allocating logging plans directly to investors, but the practice has not been entirely prohibited, leaving room for debts to be settled through timber transactions “in cases of necessity”. In 2012, trucks were observed on the Lao-Thai border with timber harvested for repayment of a debt to Russia (author’s personal experience).
Barter-development logging plans involve timber being traded for investment in public projects, such as the building of infrastructure, especially public buildings and roads (Forestry Strategy to the Year 2020 of the Lao PDR, 2005). 
For instance, provincial logging plans in Attapeu and Champassak provinces for the 2011-12 logging season allocated timber to a Vietnamese corporation (supposedly, for the construction of the 25th Southeast Asian Games athletes’ village in Vientiane), and for construction of road #14C correspondingly (Smirnov, 2015). According to a report of the Tropical Rainforest Programme (2000), this system has the unfortunate result that contractors are motivated to carry out construction at the lowest possible cost while extracting the maximum possible value of timber from forests. In 2012, Agreement No. 32/PM Article 2 prohibited the granting of permits to barter for timber with any type of projects.
Despite being prohibited, the practice of bartering logging plans in exchange for investment in public projects is still used by local authorities. Deputy Minister of Agriculture and Forestry Mr Thongphat Vongmany stressed that most of the logging illegally approved by local authorities was in exchange for infrastructure development projects, including road construction in which the exchanged trees were used to finance construction. Such schemes were reportedly making use of a loophole for massive illegal loggings (Vientiane Times, 14 June 2016). In light of the issue, Prime Minister Thongloun Sisoulith, on 13 May 2016, issued Prime Ministerial Order No. 15, prohibiting all state bodies from exchanging wood with development projects. It is currently not possible to assess whether this new Order will be effectively implemented and enforced.
Military logging plans can be granted to military companies within their areas of interest (including the so-called “National Defence Strategic Zone” defined in Decree No. 111/PM 2011) to obtain wood for construction projects, or to raise money for various activities related to military infrastructure development (Baird, 2010). Logging operations of these companies are claimed to be outside the jurisdiction of the Ministry of Agriculture and Forestry, and information about their activities, including the volumes of timber harvested and where and how their products are marketed, is confidential (Moore et al., 2011; Tropical Rainforest Programme report, 2000).
District and village construction quotas are granted for communal constructions (village offices, meeting halls, schools, health centres, etc.) by approval of the district or municipal administrations on the recommendation of the District or Municipal Agriculture and Forestry Offices. Article 40 of the Forestry Law (2007) stipulates that timber under these quotas is to be harvested only from village-use forests, and that these quotas are supposed to be approved by the central government as part of the provincial or capital city Annual Logging Plan (quota). Besides district and village construction quotas, villagers are entitled to harvest non-prohibited timber species in village-use forests for building and repairing their own house with the approval of the village administration and permission from the District or Municipal Agriculture and Forestry Offices (Forestry Law 2007, Article 41). Due to a lack of village forest management plans formulated and implemented by villagers, almost all villagers make extensive use of nearby forests regardless of the classification and rules on use (Forestry Strategy to the Year 2020 of the Lao PDR, 2005). While officially not a source of commercial timber, this timber often enters the commercial timber chain and causes deterioration of commercial timber resources.
Extra provincial quotas are designated to specific sawmills which are reported to be directly involved in operations over and above the harvestable volumes as approved in the logging plan under valid forest management plans. Inspection in an FSC-certified production forest area has shown that trees under these quotas were cut wherever loggers found attractive commercial timber, and that this included logging blocks allocated according to approved logging plans, thus imposing extra burden on available timber stands (Jonsson, 2006). Such quotas include permission for removal of logs “left over from earlier years’ operations” from log yards. In practice, this permission is often used by loggers as a pretext to enter forests in order to harvest extra-timber (Jonsson, 2006). 
Conversion:
Regardless of 2012 Agreement No. 32/PM Article 2, which prohibits granting permits to barter timber for any type of public projects (construction of roads or public buildings), logging permits for logging conversion timber can be granted to the construction company responsible for upfront investment from its own resources against debt obligations to the authorities which have contracted the project. In such cases, debt obligations are considered by the contractor and controlling agencies to be an indulgence, which allows the contractor to violate the Law and to harvest illegal timber as a debt service payment (Smirnov, 2015). 
There is evidence that the cost of public construction is overestimated through “behaviourism” agreements between government officials and contractors. For instance, before making debt payments to contractors in 2016, the government ordered that an inspection be carried out “of those state investment projects [of] which implementation was completed if the investment cost was reasonable, before disbursing the money” (Vientiane Times, October 28, 2015).
In recent years, the government, being concerned with the scale of the debenture situation, has been trying to limit the number of public work contracts which are not attached to funds set aside in the budget (Vientiane Times, 17 Sep 2013; Vientiane Times, October 28, 2015).
Prime Ministerial Order No 15, issued on 13 of May 2016, reinstated the prohibition on carrying out the direct trade or exchange of timber with infrastructure development projects (Article 4.3).
Granting mining concessions in conservation and protection forests is in apparent contradiction to the Law on Mining (1997) Article 16, which prohibits mining (prospecting, exploration, extraction) in “protected forest areas”, with the result that permits for conversion are issued under illegal conditions. Analysis conducted by Stenhouse R. and Bojö J. (2011) has revealed three mineral exploration concessions and numerous general survey concessions within national protected areas (including petroleum exploration concessions in six national protected areas). According to their estimates, up to 5% of the national protected areas is under some kind of mining concession, and up to 2.4 percent of the NPA system may become exploited for mining. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) found around 80,000 ha of mineral extraction concessions within conservation and protection forests.
In another case, a map for a clearance area of 1,172 ha was mistakenly attached to a contract which many times exceeded the size of an area granted for coffee plantation clearance (150 ha). In this case, the company made use of this “mistake” and cleared an area much larger than had been approved.
Plantations:
Legislation sets conflicting requirements as to which agencies are responsible for granting permits to log plantation timber for commercial purposes (Provincial or Vientiane Capital Agriculture and Forestry Offices or District Agriculture and Forestry Offices). 
It is evident that the majority of smallholder plantations do not have registration and plantation management plans (see 1.3). This makes it impossible to get a legal permit for timber logging in accordance with the Law. Many of the regulations for logging applied to plantations have been developed for natural forests, and large-scale plantations are overly complex, costly, and inappropriate to the scale of plantings when applied to smallholder plantations. There is evidence that some farmers “borrow plantation certificates” when they sell their timber in order to meet this legal requirement (Smith and Phengsopha, 2014). 
Summary:
For Selective logging and Conversion, there is risk of or relating to:
•    Bribes used to obtain logging permits (corruption)
•    Lack of certification and stamping procedures
•    Governmental authorities involved in forging of documents 
•    Logging outside areas approved by government
For Conversion, there is risk of:
•    Conversion of areas within conservation/protection forests or development projects
•    Clearance of areas greater than areas granted for development projects
For Selective logging, there is risk of:
•    Permits issued despite lack of documentation
For Special logging plans, there risk of:
•    Permits issued despite lack of legal basis to issue Special Logging Permits
For Plantations, there is risk of:
•    Permits issued without required registration and management plans
•    Farmers do not have Plantation Certificates, but instead borrow them when required
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verification
1
Verify Contract for logging in areas with infrastructure development, mining, tree and industrial crop plantations
Contract for logging in areas with infrastructure development, mining, tree and industrial crop plantations between specially appointed committee responsible for logging management and operator, and logging permit issued by the supervision committee: thecontractor shall be a state logging unit. In cases where the contractor is a concession holder or its associate company, this can be indicative of illicit activities.
2
Verify Approval of District office of Agriculture and Forestry
Approval of District office of Agriculture and Forestry or by Provincial or Vientiane Capital Agriculture and Forestry Offices via a request to District Agriculture and Forestry Offices for verification of registered plantations is required.
3
Verify Government permission
Government permission is required for logging of prohibited tree species (in case of forest conversion).
Description of legal requirements
Corruption when issuing logging permits shall be avoided.
VIEW MORE
Logging permits are issued on the grounds, and upon receipt, of an approved forest plan (quota) and logging plan. The equipment used by logging companies (chainsaws, timber trucks, wood extraction machinery etc.) must be licensed. 
Selective logging: 
The issue of logging plans in production forest areas is suspended (2016). However, the Government can lift this suspension for any given logging season. 
As legally required, the Provincial Agriculture and Forestry Offices and District Agriculture and Forestry Offices are to organise and monitor selective logging operations in production forest areas according to forest management plans and the annual logging plan. There are two fundamental documents that allow logging operations: a signed logging contract between Provincial Agriculture and Forestry Offices and the operator (comprised of duty, responsibility and instructions that logging contractors need to strictly follow), and a logging permit (Guideline No. 2157/2006 DOF). 
On a formal level, timber logging in production forest areas (including logging and hauling logs to log yard II) shall be conducted by “using logging units that are officially established” by approval of the Ministry of Agriculture and Forestry under administration of the agriculture and forestry authorities, or are otherwise sub-contracted under supervision of Government staff with the participation of affected villagers (Agreement No. 32/PM, 2012, Article 5).
The necessity, and development, of specialised organisations and institutions to realise “complex forestry activity (including logging, tree planting, protection and rehabilitation) on [a] continuous and professional basis is under management responsibility of local authorities and related line agencies” is stressed in Order No. 17/2008 PM, Article 10. PMO15 assigned the Ministry of Agriculture and Forestry to collaborate with local authorities on the establishment of logging units to regularly conduct timber harvest in conjunction with carrying out forest protection, and preservation activities under the supervision of the local authorities and relevant sectors (Article 9). Further details on logging units are specified in Agreement No. 0182/2009 MAF on the Establishment and Management of Timber Harvest Units and Enterprises.
In reality, it is common practice for Provincial Agriculture and Forestry Offices to contract private companies for specific logging operations. 
All approved logging must be within production forest area boundaries and subject to management plans; activities not included in the management plan, or otherwise in violation of Forestry Law and its implementing regulations, are prohibited. 
Conversion:
Permission for wood extraction under development projects (logging contracts and logging permits) is granted by specially appointed supervision and management committees, or by “a specific taskforce to be responsible for the management” (Order No. 17/2008 PM Articles 5.2; Regulation 112/2008 MAF Article 27). Contracts on logging in areas with infrastructure development, mining, tree and industrial crop plantations shall be awarded through bidding to companies which meet technical and capacity requirements (Agreement No. 32/PM, 2012, Article 5). Article 4.3 states that it is prohibited “for project developers or construction contractors to carry out logging in infrastructure development projects and …. [on] carry[ing] out the direct trade or exchange of timber with infrastructure development projects.”
Plantations:
Harvest of timber in a commercial tree plantation shall comply with that plantation’s management plan and be approved by a permit issued by the District Agriculture and Forestry Office (Regulation No. 196/2000 MAF Article 14), which shall report to the Provincial Agriculture and Forestry Office on the permits issued. On the other hand, Forestry Law (2007) Article 48 requires a permit to be obtained for felling of planted trees for commercial use from Provincial or Vientiane Capital Agriculture and Forestry Offices via a request to the relevant District Agriculture and Forestry Office. In the process of issuing logging permits for tree plantation, there is no difference between logging by smallholders for commercial use and large scale industrial concessions. 
 
Legally required documents
  • Approval of District office of Agriculture and Forestry
Applicable legislation
VIEW LESS
1.4 Harvesting permits
Last updated on 2022-03-01 Conversion of areas within conservation/protection forests Specified RISK
Selective logging and Conversion:Formally, logging/timber logging in natural forests is separated from sales turnover of timber, since harvested timber is considered to be state property that must be sold via auction or by means of negotiation. Consequently, an operator/contractor (state logging unit or logging company) provides a logging service which is paid for by state agencies. However, due to the absence of state logging capacity and funds... VIEW MORESelective logging and Conversion:
Formally, logging/timber logging in natural forests is separated from sales turnover of timber, since harvested timber is considered to be state property that must be sold via auction or by means of negotiation. Consequently, an operator/contractor (state logging unit or logging company) provides a logging service which is paid for by state agencies. 
However, due to the absence of state logging capacity and funds to pay for logging services, in practice logging contracts are given to a company that is interested in the acquisition of the entire timber harvest or of its share. Payment for logging is by barter, i.e. the fee for logging services is taken from the money (royalties) paid by the company to the Government for harvested timber.
Timber is usually sold at the lowest price, which is many times lower than the market price. Besides this, in practice, logging companies and responsible state agencies view logging permits as permission to harvest some specific volume of timber, while other logging specifications, such as timber line, species composition etc., based on pre-felling inventory, are disregarded (Smirnov, 2015). 
Given these conditions, companies are generally willing to pay substantial amounts of money in the form of bribes to relevant forestry authorities at the provincial or district level in order to gain logging permits (Baird, 2010).
The Ministry of Agriculture and Forestry has also admitted that some provincial and local authorities fail to enforce legally required timber logging regulations and certification and stamping procedures, and that a lack of coordination and enforcement is providing room for some companies to carry out illegal logging, which is facilitated by some officials exploiting loopholes in the permit issuing system (Vientiane Times, 27 January 2012). Laos’ government-controlled media acknowledges that some government authorities are conspiring with timber businesses by forging documents to enable illegal logging (Vientiane Times, 21 September 2015).
Deputy Director General of Forestry Department of the Ministry of Agriculture and Forestry, Mr. Bualy Phameuang, has stressed that currently relevant government officials have not been involved in logging conducted by project developers (companies), and that consequently huge numbers of trees in various projects have been felled illegally outside areas approved by the government, including areas where expensive trees are available (Vientiane Times, 16 June 2016).
In light of this issue, Prime Minister Thongloun Sisoulith, on 13 of May 2016, issued Prime Ministerial Order No. 15, prohibiting project developers or construction contractors from carrying out logging in infrastructure development projects (Article 4.3) as this must be done by the state officials in charge. 
Deputy Minister of Agriculture and Forestry Mr Thongphat Vongmany recently pointed out that the Forestry Law allows only the state officials in charge to carry out the logging and sale of lumber through a bidding process (Vientiane Times, 14 June 2016). 
However, according to the Deputy Director General of the Forestry Department of the Ministry of Agriculture and Forestry, Mr Bualy Phameuang, at the moment, logging units have only been reported in Savannakhet province; logging units in other provinces are expected to be initiated next year. “If the establishment of the units is not initially possible in all provinces, we can begin with some four or five provinces in the early stage,” he said (Vientiane Times, 16 June 2016). 
Selective logging:
Jonsson (2006) noticed the lack of a standardised format and content for logging contracts specifying the key elements of the services to be provided, and references to guiding documents. Inspection of logging sites in the Don Situang production forest area has demonstrated that required documents (including maps, logging plans etc.) were scattered, and elements were missing (Jonsson, 2006). Permits were issued despite this lack of documents, which reflects a general problem at the national level. 
Special logging plans
A number of different forms of quotas have been and are still being issued. There is a lack of a clear legal basis for the issuing of “selective logging” quotas. 
Deadwood quotas usually do not specify locations for cutting (and sometimes do not specify quantity), and no tracking system exists to identify the origin of deadwood. These quotas, which can be for volumes of dozens of thousands of cubic metres, have been used to illegally cut healthy trees in any category of forest, including production forest areas (Jonsson, 2006). 
For instance, inspection of log yards with timber harvested under deadwood quotas in the Don Situang production forest area, under a valid forest management plan and logging plans which have been formally approved in line with prescribed official procedures, has shown that at least one third of the timber cut was fresh (Jonsson, 2006). Besides this, logging of “deadwood” at sites with recent selective logging causes additional damage to remaining trees. Baird (2010) reports a case in which Champassak province authorities issued a deadwood quota for cutting unspecified quantity of Siamese rosewood (Dalbergia cochinchinensis), a species officially listed as prohibited for logging.
The Government of Laos acknowledges serious problems with deadwood logging plans in general, but especially in relation to conservation forests (National Protected Areas). Despite the lack of legal foundation, the practice was recognised and, since 2008,, sites for logging deadwood are required to be located and identified, although verification remains a problem (Baird, 2010). 
Minister of Agriculture and Forestry Dr Lien Thikeo pointed the finger at permission to collect dead or poisoned trees as one of the reasons for illegal logging: “…this process has never ended as people continue to poison the trees and use that as an excuse to cut them from the forests” (Vientiane Times, 14 June 2016).
Debt-repayment logging plans are designed to facilitate debt repayment to foreign countries, especially former or present-day socialist allies. The government of Laos issues these quotas to large logging and wood processing companies, and profits from selling wood products (after the company takes its cut) are paid to lending countries (Baird, 2010). Usually, no information on the origin and conditions of the debts is publicly available, and no such quotas are mentioned in available documentation. One of the concerns associated with debt-repayment quotas is that, allegedly, there is no restriction on the source of the timber, and contractors can cut virtually wherever they choose (Tropical Rainforest Programme, 2000). In 2012, Agreement No. 32/PM Article 2 called for termination of debt repayment by allocating logging plans directly to investors, but the practice has not been entirely prohibited, leaving room for debts to be settled through timber transactions “in cases of necessity”. In 2012, trucks were observed on the Lao-Thai border with timber harvested for repayment of a debt to Russia (author’s personal experience).
Barter-development logging plans involve timber being traded for investment in public projects, such as the building of infrastructure, especially public buildings and roads (Forestry Strategy to the Year 2020 of the Lao PDR, 2005). 
For instance, provincial logging plans in Attapeu and Champassak provinces for the 2011-12 logging season allocated timber to a Vietnamese corporation (supposedly, for the construction of the 25th Southeast Asian Games athletes’ village in Vientiane), and for construction of road #14C correspondingly (Smirnov, 2015). According to a report of the Tropical Rainforest Programme (2000), this system has the unfortunate result that contractors are motivated to carry out construction at the lowest possible cost while extracting the maximum possible value of timber from forests. In 2012, Agreement No. 32/PM Article 2 prohibited the granting of permits to barter for timber with any type of projects.
Despite being prohibited, the practice of bartering logging plans in exchange for investment in public projects is still used by local authorities. Deputy Minister of Agriculture and Forestry Mr Thongphat Vongmany stressed that most of the logging illegally approved by local authorities was in exchange for infrastructure development projects, including road construction in which the exchanged trees were used to finance construction. Such schemes were reportedly making use of a loophole for massive illegal loggings (Vientiane Times, 14 June 2016). In light of the issue, Prime Minister Thongloun Sisoulith, on 13 May 2016, issued Prime Ministerial Order No. 15, prohibiting all state bodies from exchanging wood with development projects. It is currently not possible to assess whether this new Order will be effectively implemented and enforced.
Military logging plans can be granted to military companies within their areas of interest (including the so-called “National Defence Strategic Zone” defined in Decree No. 111/PM 2011) to obtain wood for construction projects, or to raise money for various activities related to military infrastructure development (Baird, 2010). Logging operations of these companies are claimed to be outside the jurisdiction of the Ministry of Agriculture and Forestry, and information about their activities, including the volumes of timber harvested and where and how their products are marketed, is confidential (Moore et al., 2011; Tropical Rainforest Programme report, 2000).
District and village construction quotas are granted for communal constructions (village offices, meeting halls, schools, health centres, etc.) by approval of the district or municipal administrations on the recommendation of the District or Municipal Agriculture and Forestry Offices. Article 40 of the Forestry Law (2007) stipulates that timber under these quotas is to be harvested only from village-use forests, and that these quotas are supposed to be approved by the central government as part of the provincial or capital city Annual Logging Plan (quota). Besides district and village construction quotas, villagers are entitled to harvest non-prohibited timber species in village-use forests for building and repairing their own house with the approval of the village administration and permission from the District or Municipal Agriculture and Forestry Offices (Forestry Law 2007, Article 41). Due to a lack of village forest management plans formulated and implemented by villagers, almost all villagers make extensive use of nearby forests regardless of the classification and rules on use (Forestry Strategy to the Year 2020 of the Lao PDR, 2005). While officially not a source of commercial timber, this timber often enters the commercial timber chain and causes deterioration of commercial timber resources.
Extra provincial quotas are designated to specific sawmills which are reported to be directly involved in operations over and above the harvestable volumes as approved in the logging plan under valid forest management plans. Inspection in an FSC-certified production forest area has shown that trees under these quotas were cut wherever loggers found attractive commercial timber, and that this included logging blocks allocated according to approved logging plans, thus imposing extra burden on available timber stands (Jonsson, 2006). Such quotas include permission for removal of logs “left over from earlier years’ operations” from log yards. In practice, this permission is often used by loggers as a pretext to enter forests in order to harvest extra-timber (Jonsson, 2006). 
Conversion:
Regardless of 2012 Agreement No. 32/PM Article 2, which prohibits granting permits to barter timber for any type of public projects (construction of roads or public buildings), logging permits for logging conversion timber can be granted to the construction company responsible for upfront investment from its own resources against debt obligations to the authorities which have contracted the project. In such cases, debt obligations are considered by the contractor and controlling agencies to be an indulgence, which allows the contractor to violate the Law and to harvest illegal timber as a debt service payment (Smirnov, 2015). 
There is evidence that the cost of public construction is overestimated through “behaviourism” agreements between government officials and contractors. For instance, before making debt payments to contractors in 2016, the government ordered that an inspection be carried out “of those state investment projects [of] which implementation was completed if the investment cost was reasonable, before disbursing the money” (Vientiane Times, October 28, 2015).
In recent years, the government, being concerned with the scale of the debenture situation, has been trying to limit the number of public work contracts which are not attached to funds set aside in the budget (Vientiane Times, 17 Sep 2013; Vientiane Times, October 28, 2015).
Prime Ministerial Order No 15, issued on 13 of May 2016, reinstated the prohibition on carrying out the direct trade or exchange of timber with infrastructure development projects (Article 4.3).
Granting mining concessions in conservation and protection forests is in apparent contradiction to the Law on Mining (1997) Article 16, which prohibits mining (prospecting, exploration, extraction) in “protected forest areas”, with the result that permits for conversion are issued under illegal conditions. Analysis conducted by Stenhouse R. and Bojö J. (2011) has revealed three mineral exploration concessions and numerous general survey concessions within national protected areas (including petroleum exploration concessions in six national protected areas). According to their estimates, up to 5% of the national protected areas is under some kind of mining concession, and up to 2.4 percent of the NPA system may become exploited for mining. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) found around 80,000 ha of mineral extraction concessions within conservation and protection forests.
In another case, a map for a clearance area of 1,172 ha was mistakenly attached to a contract which many times exceeded the size of an area granted for coffee plantation clearance (150 ha). In this case, the company made use of this “mistake” and cleared an area much larger than had been approved.
Plantations:
Legislation sets conflicting requirements as to which agencies are responsible for granting permits to log plantation timber for commercial purposes (Provincial or Vientiane Capital Agriculture and Forestry Offices or District Agriculture and Forestry Offices). 
It is evident that the majority of smallholder plantations do not have registration and plantation management plans (see 1.3). This makes it impossible to get a legal permit for timber logging in accordance with the Law. Many of the regulations for logging applied to plantations have been developed for natural forests, and large-scale plantations are overly complex, costly, and inappropriate to the scale of plantings when applied to smallholder plantations. There is evidence that some farmers “borrow plantation certificates” when they sell their timber in order to meet this legal requirement (Smith and Phengsopha, 2014). 
Summary:
For Selective logging and Conversion, there is risk of or relating to:
•    Bribes used to obtain logging permits (corruption)
•    Lack of certification and stamping procedures
•    Governmental authorities involved in forging of documents 
•    Logging outside areas approved by government
For Conversion, there is risk of:
•    Conversion of areas within conservation/protection forests or development projects
•    Clearance of areas greater than areas granted for development projects
For Selective logging, there is risk of:
•    Permits issued despite lack of documentation
For Special logging plans, there risk of:
•    Permits issued despite lack of legal basis to issue Special Logging Permits
For Plantations, there is risk of:
•    Permits issued without required registration and management plans
•    Farmers do not have Plantation Certificates, but instead borrow them when required
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verification
1
Verify Logging area
Verify that the development project from where the timber is originating fromis not placed within conservation/protection forests
Description of legal requirements
Conversion of forest shall not occur within conservation/protection forests
VIEW MORE
Logging permits are issued on the grounds, and upon receipt, of an approved forest plan (quota) and logging plan. The equipment used by logging companies (chainsaws, timber trucks, wood extraction machinery etc.) must be licensed. 
Selective logging: 
The issue of logging plans in production forest areas is suspended (2016). However, the Government can lift this suspension for any given logging season. 
As legally required, the Provincial Agriculture and Forestry Offices and District Agriculture and Forestry Offices are to organise and monitor selective logging operations in production forest areas according to forest management plans and the annual logging plan. There are two fundamental documents that allow logging operations: a signed logging contract between Provincial Agriculture and Forestry Offices and the operator (comprised of duty, responsibility and instructions that logging contractors need to strictly follow), and a logging permit (Guideline No. 2157/2006 DOF). 
On a formal level, timber logging in production forest areas (including logging and hauling logs to log yard II) shall be conducted by “using logging units that are officially established” by approval of the Ministry of Agriculture and Forestry under administration of the agriculture and forestry authorities, or are otherwise sub-contracted under supervision of Government staff with the participation of affected villagers (Agreement No. 32/PM, 2012, Article 5).
The necessity, and development, of specialised organisations and institutions to realise “complex forestry activity (including logging, tree planting, protection and rehabilitation) on [a] continuous and professional basis is under management responsibility of local authorities and related line agencies” is stressed in Order No. 17/2008 PM, Article 10. PMO15 assigned the Ministry of Agriculture and Forestry to collaborate with local authorities on the establishment of logging units to regularly conduct timber harvest in conjunction with carrying out forest protection, and preservation activities under the supervision of the local authorities and relevant sectors (Article 9). Further details on logging units are specified in Agreement No. 0182/2009 MAF on the Establishment and Management of Timber Harvest Units and Enterprises.
In reality, it is common practice for Provincial Agriculture and Forestry Offices to contract private companies for specific logging operations. 
All approved logging must be within production forest area boundaries and subject to management plans; activities not included in the management plan, or otherwise in violation of Forestry Law and its implementing regulations, are prohibited. 
Conversion:
Permission for wood extraction under development projects (logging contracts and logging permits) is granted by specially appointed supervision and management committees, or by “a specific taskforce to be responsible for the management” (Order No. 17/2008 PM Articles 5.2; Regulation 112/2008 MAF Article 27). Contracts on logging in areas with infrastructure development, mining, tree and industrial crop plantations shall be awarded through bidding to companies which meet technical and capacity requirements (Agreement No. 32/PM, 2012, Article 5). Article 4.3 states that it is prohibited “for project developers or construction contractors to carry out logging in infrastructure development projects and …. [on] carry[ing] out the direct trade or exchange of timber with infrastructure development projects.”
Plantations:
Harvest of timber in a commercial tree plantation shall comply with that plantation’s management plan and be approved by a permit issued by the District Agriculture and Forestry Office (Regulation No. 196/2000 MAF Article 14), which shall report to the Provincial Agriculture and Forestry Office on the permits issued. On the other hand, Forestry Law (2007) Article 48 requires a permit to be obtained for felling of planted trees for commercial use from Provincial or Vientiane Capital Agriculture and Forestry Offices via a request to the relevant District Agriculture and Forestry Office. In the process of issuing logging permits for tree plantation, there is no difference between logging by smallholders for commercial use and large scale industrial concessions. 
 
Legally required documents
  • Approval of District office of Agriculture and Forestry
Applicable legislation
VIEW LESS
1.5 Payment of royalties and harvesting fees
Last updated on 2022-03-01 Risk of corruption related to payment of tax Specified RISK
Selective logging and Conversion:Formally, logging/timber logging in natural forests is separated from sales turnover of timber, since harvested timber is considered to be state property that must be sold via auction or by means of negotiation. Consequently, an operator/contractor (state logging unit or logging company) provides a logging service which is paid for by state agencies. However, due to the absence of state logging capacity and funds... VIEW MORESelective logging and Conversion:
Formally, logging/timber logging in natural forests is separated from sales turnover of timber, since harvested timber is considered to be state property that must be sold via auction or by means of negotiation. Consequently, an operator/contractor (state logging unit or logging company) provides a logging service which is paid for by state agencies. 
However, due to the absence of state logging capacity and funds to pay for logging services, in practice logging contracts are given to a company that is interested in the acquisition of the entire timber harvest or of its share. Payment for logging is by barter, i.e. the fee for logging services is taken from the money (royalties) paid by the company to the Government for harvested timber.
Timber is usually sold at the lowest price, which is many times lower than the market price. Besides this, in practice, logging companies and responsible state agencies view logging permits as permission to harvest some specific volume of timber, while other logging specifications, such as timber line, species composition etc., based on pre-felling inventory, are disregarded (Smirnov, 2015). 
Given these conditions, companies are generally willing to pay substantial amounts of money in the form of bribes to relevant forestry authorities at the provincial or district level in order to gain logging permits (Baird, 2010).
The Ministry of Agriculture and Forestry has also admitted that some provincial and local authorities fail to enforce legally required timber logging regulations and certification and stamping procedures, and that a lack of coordination and enforcement is providing room for some companies to carry out illegal logging, which is facilitated by some officials exploiting loopholes in the permit issuing system (Vientiane Times, 27 January 2012). Laos’ government-controlled media acknowledges that some government authorities are conspiring with timber businesses by forging documents to enable illegal logging (Vientiane Times, 21 September 2015).
Deputy Director General of Forestry Department of the Ministry of Agriculture and Forestry, Mr. Bualy Phameuang, has stressed that currently relevant government officials have not been involved in logging conducted by project developers (companies), and that consequently huge numbers of trees in various projects have been felled illegally outside areas approved by the government, including areas where expensive trees are available (Vientiane Times, 16 June 2016).
In light of this issue, Prime Minister Thongloun Sisoulith, on 13 of May 2016, issued Prime Ministerial Order No. 15, prohibiting project developers or construction contractors from carrying out logging in infrastructure development projects (Article 4.3) as this must be done by the state officials in charge. 
Deputy Minister of Agriculture and Forestry Mr Thongphat Vongmany recently pointed out that the Forestry Law allows only the state officials in charge to carry out the logging and sale of lumber through a bidding process (Vientiane Times, 14 June 2016). 
However, according to the Deputy Director General of the Forestry Department of the Ministry of Agriculture and Forestry, Mr Bualy Phameuang, at the moment, logging units have only been reported in Savannakhet province; logging units in other provinces are expected to be initiated next year. “If the establishment of the units is not initially possible in all provinces, we can begin with some four or five provinces in the early stage,” he said (Vientiane Times, 16 June 2016). 
Selective logging:
Jonsson (2006) noticed the lack of a standardised format and content for logging contracts specifying the key elements of the services to be provided, and references to guiding documents. Inspection of logging sites in the Don Situang production forest area has demonstrated that required documents (including maps, logging plans etc.) were scattered, and elements were missing (Jonsson, 2006). Permits were issued despite this lack of documents, which reflects a general problem at the national level. 
Special logging plans
A number of different forms of quotas have been and are still being issued. There is a lack of a clear legal basis for the issuing of “selective logging” quotas. 
Deadwood quotas usually do not specify locations for cutting (and sometimes do not specify quantity), and no tracking system exists to identify the origin of deadwood. These quotas, which can be for volumes of dozens of thousands of cubic metres, have been used to illegally cut healthy trees in any category of forest, including production forest areas (Jonsson, 2006). 
For instance, inspection of log yards with timber harvested under deadwood quotas in the Don Situang production forest area, under a valid forest management plan and logging plans which have been formally approved in line with prescribed official procedures, has shown that at least one third of the timber cut was fresh (Jonsson, 2006). Besides this, logging of “deadwood” at sites with recent selective logging causes additional damage to remaining trees. Baird (2010) reports a case in which Champassak province authorities issued a deadwood quota for cutting unspecified quantity of Siamese rosewood (Dalbergia cochinchinensis), a species officially listed as prohibited for logging.
The Government of Laos acknowledges serious problems with deadwood logging plans in general, but especially in relation to conservation forests (National Protected Areas). Despite the lack of legal foundation, the practice was recognised and, since 2008,, sites for logging deadwood are required to be located and identified, although verification remains a problem (Baird, 2010). 
Minister of Agriculture and Forestry Dr Lien Thikeo pointed the finger at permission to collect dead or poisoned trees as one of the reasons for illegal logging: “…this process has never ended as people continue to poison the trees and use that as an excuse to cut them from the forests” (Vientiane Times, 14 June 2016).
Debt-repayment logging plans are designed to facilitate debt repayment to foreign countries, especially former or present-day socialist allies. The government of Laos issues these quotas to large logging and wood processing companies, and profits from selling wood products (after the company takes its cut) are paid to lending countries (Baird, 2010). Usually, no information on the origin and conditions of the debts is publicly available, and no such quotas are mentioned in available documentation. One of the concerns associated with debt-repayment quotas is that, allegedly, there is no restriction on the source of the timber, and contractors can cut virtually wherever they choose (Tropical Rainforest Programme, 2000). In 2012, Agreement No. 32/PM Article 2 called for termination of debt repayment by allocating logging plans directly to investors, but the practice has not been entirely prohibited, leaving room for debts to be settled through timber transactions “in cases of necessity”. In 2012, trucks were observed on the Lao-Thai border with timber harvested for repayment of a debt to Russia (author’s personal experience).
Barter-development logging plans involve timber being traded for investment in public projects, such as the building of infrastructure, especially public buildings and roads (Forestry Strategy to the Year 2020 of the Lao PDR, 2005). 
For instance, provincial logging plans in Attapeu and Champassak provinces for the 2011-12 logging season allocated timber to a Vietnamese corporation (supposedly, for the construction of the 25th Southeast Asian Games athletes’ village in Vientiane), and for construction of road #14C correspondingly (Smirnov, 2015). According to a report of the Tropical Rainforest Programme (2000), this system has the unfortunate result that contractors are motivated to carry out construction at the lowest possible cost while extracting the maximum possible value of timber from forests. In 2012, Agreement No. 32/PM Article 2 prohibited the granting of permits to barter for timber with any type of projects.
Despite being prohibited, the practice of bartering logging plans in exchange for investment in public projects is still used by local authorities. Deputy Minister of Agriculture and Forestry Mr Thongphat Vongmany stressed that most of the logging illegally approved by local authorities was in exchange for infrastructure development projects, including road construction in which the exchanged trees were used to finance construction. Such schemes were reportedly making use of a loophole for massive illegal loggings (Vientiane Times, 14 June 2016). In light of the issue, Prime Minister Thongloun Sisoulith, on 13 May 2016, issued Prime Ministerial Order No. 15, prohibiting all state bodies from exchanging wood with development projects. It is currently not possible to assess whether this new Order will be effectively implemented and enforced.
Military logging plans can be granted to military companies within their areas of interest (including the so-called “National Defence Strategic Zone” defined in Decree No. 111/PM 2011) to obtain wood for construction projects, or to raise money for various activities related to military infrastructure development (Baird, 2010). Logging operations of these companies are claimed to be outside the jurisdiction of the Ministry of Agriculture and Forestry, and information about their activities, including the volumes of timber harvested and where and how their products are marketed, is confidential (Moore et al., 2011; Tropical Rainforest Programme report, 2000).
District and village construction quotas are granted for communal constructions (village offices, meeting halls, schools, health centres, etc.) by approval of the district or municipal administrations on the recommendation of the District or Municipal Agriculture and Forestry Offices. Article 40 of the Forestry Law (2007) stipulates that timber under these quotas is to be harvested only from village-use forests, and that these quotas are supposed to be approved by the central government as part of the provincial or capital city Annual Logging Plan (quota). Besides district and village construction quotas, villagers are entitled to harvest non-prohibited timber species in village-use forests for building and repairing their own house with the approval of the village administration and permission from the District or Municipal Agriculture and Forestry Offices (Forestry Law 2007, Article 41). Due to a lack of village forest management plans formulated and implemented by villagers, almost all villagers make extensive use of nearby forests regardless of the classification and rules on use (Forestry Strategy to the Year 2020 of the Lao PDR, 2005). While officially not a source of commercial timber, this timber often enters the commercial timber chain and causes deterioration of commercial timber resources.
Extra provincial quotas are designated to specific sawmills which are reported to be directly involved in operations over and above the harvestable volumes as approved in the logging plan under valid forest management plans. Inspection in an FSC-certified production forest area has shown that trees under these quotas were cut wherever loggers found attractive commercial timber, and that this included logging blocks allocated according to approved logging plans, thus imposing extra burden on available timber stands (Jonsson, 2006). Such quotas include permission for removal of logs “left over from earlier years’ operations” from log yards. In practice, this permission is often used by loggers as a pretext to enter forests in order to harvest extra-timber (Jonsson, 2006). 
Conversion:
Regardless of 2012 Agreement No. 32/PM Article 2, which prohibits granting permits to barter timber for any type of public projects (construction of roads or public buildings), logging permits for logging conversion timber can be granted to the construction company responsible for upfront investment from its own resources against debt obligations to the authorities which have contracted the project. In such cases, debt obligations are considered by the contractor and controlling agencies to be an indulgence, which allows the contractor to violate the Law and to harvest illegal timber as a debt service payment (Smirnov, 2015). 
There is evidence that the cost of public construction is overestimated through “behaviourism” agreements between government officials and contractors. For instance, before making debt payments to contractors in 2016, the government ordered that an inspection be carried out “of those state investment projects [of] which implementation was completed if the investment cost was reasonable, before disbursing the money” (Vientiane Times, October 28, 2015).
In recent years, the government, being concerned with the scale of the debenture situation, has been trying to limit the number of public work contracts which are not attached to funds set aside in the budget (Vientiane Times, 17 Sep 2013; Vientiane Times, October 28, 2015).
Prime Ministerial Order No 15, issued on 13 of May 2016, reinstated the prohibition on carrying out the direct trade or exchange of timber with infrastructure development projects (Article 4.3).
Granting mining concessions in conservation and protection forests is in apparent contradiction to the Law on Mining (1997) Article 16, which prohibits mining (prospecting, exploration, extraction) in “protected forest areas”, with the result that permits for conversion are issued under illegal conditions. Analysis conducted by Stenhouse R. and Bojö J. (2011) has revealed three mineral exploration concessions and numerous general survey concessions within national protected areas (including petroleum exploration concessions in six national protected areas). According to their estimates, up to 5% of the national protected areas is under some kind of mining concession, and up to 2.4 percent of the NPA system may become exploited for mining. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) found around 80,000 ha of mineral extraction concessions within conservation and protection forests.
In another case, a map for a clearance area of 1,172 ha was mistakenly attached to a contract which many times exceeded the size of an area granted for coffee plantation clearance (150 ha). In this case, the company made use of this “mistake” and cleared an area much larger than had been approved.
Plantations:
Legislation sets conflicting requirements as to which agencies are responsible for granting permits to log plantation timber for commercial purposes (Provincial or Vientiane Capital Agriculture and Forestry Offices or District Agriculture and Forestry Offices). 
It is evident that the majority of smallholder plantations do not have registration and plantation management plans (see 1.3). This makes it impossible to get a legal permit for timber logging in accordance with the Law. Many of the regulations for logging applied to plantations have been developed for natural forests, and large-scale plantations are overly complex, costly, and inappropriate to the scale of plantings when applied to smallholder plantations. There is evidence that some farmers “borrow plantation certificates” when they sell their timber in order to meet this legal requirement (Smith and Phengsopha, 2014). 
Summary:
For Selective logging and Conversion, there is risk of or relating to:
•    Bribes used to obtain logging permits (corruption)
•    Lack of certification and stamping procedures
•    Governmental authorities involved in forging of documents 
•    Logging outside areas approved by government
For Conversion, there is risk of:
•    Conversion of areas within conservation/protection forests or development projects
•    Clearance of areas greater than areas granted for development projects
For Selective logging, there is risk of:
•    Permits issued despite lack of documentation
For Special logging plans, there risk of:
•    Permits issued despite lack of legal basis to issue Special Logging Permits
For Plantations, there is risk of:
•    Permits issued without required registration and management plans
•    Farmers do not have Plantation Certificates, but instead borrow them when required
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verification
1
Verify Log list
Log list: made at log yard II.​ Volumes, composition of species, and sizes in log list shall match characteristics of timber on sale.
2
Verify Contract on sale-purchase
Contract on sale-purchase: proves that timber was officially sold by government agency, and that royalties were paid.
3
Verify Royalty payment receipt (certificate)
Royalty payment receipt (certificate): to be compared with market prices and minimum prices set by the Ministry of Industry and Commerce for current year. This information may provide an indication as to whether timber was auctioned or sold via negotiations at the lowest price (which can be indicative of conspiracy between officials and buyer).
Description of legal requirements
Taxes shall be paid
VIEW MORE
Logging permits are issued on the grounds, and upon receipt, of an approved forest plan (quota) and logging plan. The equipment used by logging companies (chainsaws, timber trucks, wood extraction machinery etc.) must be licensed. 
Selective logging: 
The issue of logging plans in production forest areas is suspended (2016). However, the Government can lift this suspension for any given logging season. 
As legally required, the Provincial Agriculture and Forestry Offices and District Agriculture and Forestry Offices are to organise and monitor selective logging operations in production forest areas according to forest management plans and the annual logging plan. There are two fundamental documents that allow logging operations: a signed logging contract between Provincial Agriculture and Forestry Offices and the operator (comprised of duty, responsibility and instructions that logging contractors need to strictly follow), and a logging permit (Guideline No. 2157/2006 DOF). 
On a formal level, timber logging in production forest areas (including logging and hauling logs to log yard II) shall be conducted by “using logging units that are officially established” by approval of the Ministry of Agriculture and Forestry under administration of the agriculture and forestry authorities, or are otherwise sub-contracted under supervision of Government staff with the participation of affected villagers (Agreement No. 32/PM, 2012, Article 5).
The necessity, and development, of specialised organisations and institutions to realise “complex forestry activity (including logging, tree planting, protection and rehabilitation) on [a] continuous and professional basis is under management responsibility of local authorities and related line agencies” is stressed in Order No. 17/2008 PM, Article 10. PMO15 assigned the Ministry of Agriculture and Forestry to collaborate with local authorities on the establishment of logging units to regularly conduct timber harvest in conjunction with carrying out forest protection, and preservation activities under the supervision of the local authorities and relevant sectors (Article 9). Further details on logging units are specified in Agreement No. 0182/2009 MAF on the Establishment and Management of Timber Harvest Units and Enterprises.
In reality, it is common practice for Provincial Agriculture and Forestry Offices to contract private companies for specific logging operations. 
All approved logging must be within production forest area boundaries and subject to management plans; activities not included in the management plan, or otherwise in violation of Forestry Law and its implementing regulations, are prohibited. 
Conversion:
Permission for wood extraction under development projects (logging contracts and logging permits) is granted by specially appointed supervision and management committees, or by “a specific taskforce to be responsible for the management” (Order No. 17/2008 PM Articles 5.2; Regulation 112/2008 MAF Article 27). Contracts on logging in areas with infrastructure development, mining, tree and industrial crop plantations shall be awarded through bidding to companies which meet technical and capacity requirements (Agreement No. 32/PM, 2012, Article 5). Article 4.3 states that it is prohibited “for project developers or construction contractors to carry out logging in infrastructure development projects and …. [on] carry[ing] out the direct trade or exchange of timber with infrastructure development projects.”
Plantations:
Harvest of timber in a commercial tree plantation shall comply with that plantation’s management plan and be approved by a permit issued by the District Agriculture and Forestry Office (Regulation No. 196/2000 MAF Article 14), which shall report to the Provincial Agriculture and Forestry Office on the permits issued. On the other hand, Forestry Law (2007) Article 48 requires a permit to be obtained for felling of planted trees for commercial use from Provincial or Vientiane Capital Agriculture and Forestry Offices via a request to the relevant District Agriculture and Forestry Office. In the process of issuing logging permits for tree plantation, there is no difference between logging by smallholders for commercial use and large scale industrial concessions. 
 
Legally required documents
  • Log list
  • Contract on sale-purchase
  • Royalty payment receipt (certificate)
Applicable legislation
VIEW LESS
1.5 Payment of royalties and harvesting fees
Last updated on 2022-03-01 Unofficial sale, and lack of harvested timber being registered in log yards as required for tax registration Specified RISK
Selective logging and Conversion: Negotiation/bargaining with buyers remains the standard system for sale of logs, contrary to regulations which encourage provincial authorities to maximise revenue from timber and secure prices above those set by the Ministry of Commerce though the use of bidding.Even prior to logging, rights for buying timber are usually informally reserved for a contractor that bankrolls logging and timber transportation to lo... VIEW MORESelective logging and Conversion: 
Negotiation/bargaining with buyers remains the standard system for sale of logs, contrary to regulations which encourage provincial authorities to maximise revenue from timber and secure prices above those set by the Ministry of Commerce though the use of bidding.
Even prior to logging, rights for buying timber are usually informally reserved for a contractor that bankrolls logging and timber transportation to log yard II. Timber is usually sold by the government at the lowest prices (equal to or slightly above royalties), much lower than market prices.
There is evidence that documents (log lists) specify timber as being of lower grade and smaller size than is accurate as a possible result of informal agreements between buyers and the state agencies responsible for timber sale. This is done to subsequently understate payments/charges in the process of selling and paying taxes to the state on the Lao side (Smirnov, 2015). In some cases, such a deliberate undervaluation may also be a result of the concealed barter of timber in exchange for the construction of public roads and buildings, which is prohibited by the government. 
The wood product flow is poorly monitored; the many discrepancies in statistics suggest significant leakages in national revenue (Forest sector performance indicators, 2014). 
Only the smaller part of harvested timber is officially registered in log yards as legally required. According to the Study for Understanding Timber Flows and Control in the Lao PDR (2012), only 34% of the total recorded harvested timber volume from four provinces in the 2010-11 logging season was registered at log yard II, which could suggest significant potential loss of revenue.
The comparison of official data on volumes of issued quotas and the officially registered volume of timber harvested in Laos’ four southern provinces in the 2011-12 logging season with data on export of wood products from this area has found that >50% of timber products exported were from undocumented sources. In monetary terms, the value of this undocumented timber could exceed the Lao national budget income from timber sales planned for the 2013-14 fiscal year threefold (Smirnov, 2015).
Regulatory fees and service charges are potentially substantial, and in many cases are not articulated in regulatory guidance. Logging taxes and fees are inconsistently applied, and provincial variations create an incentive for wood to be transported to provinces with more favourable tax treatment (Smith, Phengsopha, 2014). 
Consequently, there are inconsistencies in the collection of fees and service charges, causing uncertainty, and also creating the opportunity for unofficial fees to be charged (Smith, Phengsopha, 2014). 
According to sources, the tax department is perceived as one of the most corrupt state agency in the country, and the practice of bribing tax officers in return for tax deductions is common (RFA - Radio Free Asia, 19 January 2016). 
The embedded problem of corruption in the logging sector has been acknowledged by many, including the Government of Laos. 
The Ministry of Finance has identified numerous loopholes in the accounting of timber sold by local authorities, meaning that the government has been missing out on much-needed revenue. For instance, the government has set a revenue target of 100 billion kip from the sale of its timbers for the 2014-15 fiscal year, but in the first six months of this fiscal year only 13 billion kip was collected (Vientiane Times, 08 July 2015). 
Forestry officials have admitted that financial leaks have been reported in this sector in past years, causing great losses to the national budget (Vientiane Times, 14 June 2016). Forestry officials said losses in revenue from the timber industry were triggered by several factors, including corruption on the part of officials, and illegal logging (Vientiane Times / 04 July, 2016).
Transparency International has ranked Laos 139th out of 168 countries in their latest Correption Perception Index report (2015), with a score of 25 (far below FSC’s threshold for low risk, which is 50 points).
As a way to ensure transparency, and to generate more income from the sale of timber for the national budget, the Government of Laos wants state logging units to be solely responsible for felling trees for the government (Vientiane Times, 16 June 2016). The felled timber must then be sold through a bidding process so the government can maximise revenue from this natural resource.
Summary:
For Selective logging and Conversion, there is risk of or relating to:
•    Timber of lower grade and smaller size is recorded on log lists in order to subsequently understate payments/charges in the process of selling and paying taxes to the state; 
•    Unofficial sale, and lack of harvested timber being registered in log yards as required for tax registration; 
•    Logging taxes and fees are inconsistently applied at the provincial level. Variations create an incentive for wood to be transported to provinces with more favourable tax treatment; and
•    Bribing of tax officers in return for tax deductions is not uncommon.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verification
1
Verify Log list
Log list: made at log yard II.​ Volumes, composition of species, and sizes in log list shall match characteristics of timber on sale.
2
Verify Contract on sale-purchase
Contract on sale-purchase: proves that timber was officially sold by government agency, and that royalties were paid.
3
Verify Royalty payment receipt (certificate)
Royalty payment receipt (certificate): to be compared with market prices and minimum prices set by the Ministry of Industry and Commerce for current year. This information may provide an indication as to whether timber was auctioned or sold via negotiations at the lowest price (which can be indicative of conspiracy between officials and buyer).
Description of legal requirements
Sale of timber shall be done officially, and harvested timber shall be registered in log yards
VIEW MORE
Selective logging and Conversion: 
Buyers (firms and individuals) shall pay log royalties, or stumpage rates per cubic metre of timber removed (bought) from second log yard. Royalties are set and updated periodically by the Ministry of Industry and Commerce according to species and grades. Amongst other considerations, rates are primarily based on international market data. Royalties act as a floor price, ensuring a minimum level of revenue is collected at the provincial level, while the Government of Laos encourages the use of bidding to secure prices above those set by the Ministry of Industry and Commerce to maximise revenue for the Government, forest management units, and participating villagers. 
In addition to national-level royalties, wood processing industries and private logging companies may also be required to pay provincial, district and village development levies and fees.
To help sustain current forest cover, the government has also instigated the collection of Reforestation Fees, charged for sale of both timber and non-timber forest products, to finance reforestation activities. The wood processing companies which have been allocated logs from the government have to pay the reforestation fee at different rates, fixed for each species category (protected timber species category I or II; controlled timber species category I, II or III).
Timber revenue is transferred to the state treasury and divided according to the timber sharing Decree.
The Law on Mining (1997) stipulates that the use of wood in mining lease areas requires approval and compensation for the wood (Article 40). 
Plantations:
Plantation timber is exempted from resource tax and royalties (Regulation No. 196/2000 MAF Article 20, Directive No. 1849/1999 MAF Article). The Forestry and Tax Laws and Prime Ministerial Decree 150/2000 on Land Tax, exempt tree plantations from land taxes and fees. Exemptions from land tax have been used to encourage plantation registration, as plantations eligible for tax exemptions must be registered under the Directive1849/AF.99 to be granted exempt status. 
However, there are inconsistencies in the rules as to the quality indicators of plantations that are eligible for tax exemptions. For instance, according to Decree No. 01/PO on Land Tax (2007), registered plantations are exempt from land taxes after three years if they consist of 1,100 trees per ha, while Regulation No. 196/2000 MAF requires an 80% survival rate and more than 800 trees/ha in lowland area, and 600 trees/ha in upland areas (Article 19).
Temporary land use certificates are only valid for three years, and land tax exemptions are not available within this period because registration as a tree plantation cannot occur until three years after planting.
Scattered plantings are not eligible for land tax exemption. 
There is also conflicting information about which government agencies can grant land tax exemptions.
Foreign investors in natural resource exploitation (including investors in tree plantations) shall pay resource/land taxes as stated in a project (concession) agreement with the Government of Laos (Law on Foreign Investment, 1994, Article 16). According to Sigaty (2003), these requirements have been waived in existing agreements.
 
Legally required documents
  • Log list
  • Contract on sale-purchase
  • Royalty payment receipt (certificate)
Applicable legislation
VIEW LESS
1.5 Payment of royalties and harvesting fees
Last updated on 2022-03-01 Risk that smallholders lack business registration, and do not pay taxes  Specified RISK
Selective logging and Conversion: Negotiation/bargaining with buyers remains the standard system for sale of logs, contrary to regulations which encourage provincial authorities to maximise revenue from timber and secure prices above those set by the Ministry of Commerce though the use of bidding.Even prior to logging, rights for buying timber are usually informally reserved for a contractor that bankrolls logging and timber transportation to lo... VIEW MORESelective logging and Conversion: 
Negotiation/bargaining with buyers remains the standard system for sale of logs, contrary to regulations which encourage provincial authorities to maximise revenue from timber and secure prices above those set by the Ministry of Commerce though the use of bidding.
Even prior to logging, rights for buying timber are usually informally reserved for a contractor that bankrolls logging and timber transportation to log yard II. Timber is usually sold by the government at the lowest prices (equal to or slightly above royalties), much lower than market prices.
There is evidence that documents (log lists) specify timber as being of lower grade and smaller size than is accurate as a possible result of informal agreements between buyers and the state agencies responsible for timber sale. This is done to subsequently understate payments/charges in the process of selling and paying taxes to the state on the Lao side (Smirnov, 2015). In some cases, such a deliberate undervaluation may also be a result of the concealed barter of timber in exchange for the construction of public roads and buildings, which is prohibited by the government. 
The wood product flow is poorly monitored; the many discrepancies in statistics suggest significant leakages in national revenue (Forest sector performance indicators, 2014). 
Only the smaller part of harvested timber is officially registered in log yards as legally required. According to the Study for Understanding Timber Flows and Control in the Lao PDR (2012), only 34% of the total recorded harvested timber volume from four provinces in the 2010-11 logging season was registered at log yard II, which could suggest significant potential loss of revenue.
The comparison of official data on volumes of issued quotas and the officially registered volume of timber harvested in Laos’ four southern provinces in the 2011-12 logging season with data on export of wood products from this area has found that >50% of timber products exported were from undocumented sources. In monetary terms, the value of this undocumented timber could exceed the Lao national budget income from timber sales planned for the 2013-14 fiscal year threefold (Smirnov, 2015).
Regulatory fees and service charges are potentially substantial, and in many cases are not articulated in regulatory guidance. Logging taxes and fees are inconsistently applied, and provincial variations create an incentive for wood to be transported to provinces with more favourable tax treatment (Smith, Phengsopha, 2014). 
Consequently, there are inconsistencies in the collection of fees and service charges, causing uncertainty, and also creating the opportunity for unofficial fees to be charged (Smith, Phengsopha, 2014). 
According to sources, the tax department is perceived as one of the most corrupt state agency in the country, and the practice of bribing tax officers in return for tax deductions is common (RFA - Radio Free Asia, 19 January 2016). 
The embedded problem of corruption in the logging sector has been acknowledged by many, including the Government of Laos. 
The Ministry of Finance has identified numerous loopholes in the accounting of timber sold by local authorities, meaning that the government has been missing out on much-needed revenue. For instance, the government has set a revenue target of 100 billion kip from the sale of its timbers for the 2014-15 fiscal year, but in the first six months of this fiscal year only 13 billion kip was collected (Vientiane Times, 08 July 2015). 
Forestry officials have admitted that financial leaks have been reported in this sector in past years, causing great losses to the national budget (Vientiane Times, 14 June 2016). Forestry officials said losses in revenue from the timber industry were triggered by several factors, including corruption on the part of officials, and illegal logging (Vientiane Times / 04 July, 2016).
Transparency International has ranked Laos 139th out of 168 countries in their latest Correption Perception Index report (2015), with a score of 25 (far below FSC’s threshold for low risk, which is 50 points).
As a way to ensure transparency, and to generate more income from the sale of timber for the national budget, the Government of Laos wants state logging units to be solely responsible for felling trees for the government (Vientiane Times, 16 June 2016). The felled timber must then be sold through a bidding process so the government can maximise revenue from this natural resource.
Summary:
For Selective logging and Conversion, there is risk of or relating to:
•    Timber of lower grade and smaller size is recorded on log lists in order to subsequently understate payments/charges in the process of selling and paying taxes to the state; 
•    Unofficial sale, and lack of harvested timber being registered in log yards as required for tax registration; 
•    Logging taxes and fees are inconsistently applied at the provincial level. Variations create an incentive for wood to be transported to provinces with more favourable tax treatment; and
•    Bribing of tax officers in return for tax deductions is not uncommon.
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – smallholders
Risk mitigation options
Document verification
1
Verify Business registration certificate
2
Verify Bank deposit slip
3
Verify Payment receipt (certificate)
Description of legal requirements
Business registration shall be in place and relevant taxes shall be paid.
VIEW MORE
Selective logging and Conversion: 
Buyers (firms and individuals) shall pay log royalties, or stumpage rates per cubic metre of timber removed (bought) from second log yard. Royalties are set and updated periodically by the Ministry of Industry and Commerce according to species and grades. Amongst other considerations, rates are primarily based on international market data. Royalties act as a floor price, ensuring a minimum level of revenue is collected at the provincial level, while the Government of Laos encourages the use of bidding to secure prices above those set by the Ministry of Industry and Commerce to maximise revenue for the Government, forest management units, and participating villagers. 
In addition to national-level royalties, wood processing industries and private logging companies may also be required to pay provincial, district and village development levies and fees.
To help sustain current forest cover, the government has also instigated the collection of Reforestation Fees, charged for sale of both timber and non-timber forest products, to finance reforestation activities. The wood processing companies which have been allocated logs from the government have to pay the reforestation fee at different rates, fixed for each species category (protected timber species category I or II; controlled timber species category I, II or III).
Timber revenue is transferred to the state treasury and divided according to the timber sharing Decree.
The Law on Mining (1997) stipulates that the use of wood in mining lease areas requires approval and compensation for the wood (Article 40). 
Plantations:
Plantation timber is exempted from resource tax and royalties (Regulation No. 196/2000 MAF Article 20, Directive No. 1849/1999 MAF Article). The Forestry and Tax Laws and Prime Ministerial Decree 150/2000 on Land Tax, exempt tree plantations from land taxes and fees. Exemptions from land tax have been used to encourage plantation registration, as plantations eligible for tax exemptions must be registered under the Directive1849/AF.99 to be granted exempt status. 
However, there are inconsistencies in the rules as to the quality indicators of plantations that are eligible for tax exemptions. For instance, according to Decree No. 01/PO on Land Tax (2007), registered plantations are exempt from land taxes after three years if they consist of 1,100 trees per ha, while Regulation No. 196/2000 MAF requires an 80% survival rate and more than 800 trees/ha in lowland area, and 600 trees/ha in upland areas (Article 19).
Temporary land use certificates are only valid for three years, and land tax exemptions are not available within this period because registration as a tree plantation cannot occur until three years after planting.
Scattered plantings are not eligible for land tax exemption. 
There is also conflicting information about which government agencies can grant land tax exemptions.
Foreign investors in natural resource exploitation (including investors in tree plantations) shall pay resource/land taxes as stated in a project (concession) agreement with the Government of Laos (Law on Foreign Investment, 1994, Article 16). According to Sigaty (2003), these requirements have been waived in existing agreements.
 
Legally required documents
  • Log list
  • Contract on sale-purchase
  • Royalty payment receipt (certificate)
Applicable legislation
VIEW LESS
1.6 Value-added taxes and other sales taxes
Last updated on 2022-03-01 Unofficial sale, and lack of harvested timber being registered in log yards as required for tax registration RISK
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verification
1
Verify Log list
Log list: made at log yard II.​ Volumes, composition of species, and sizes in log list shall match characteristics of timber on sale.
2
Verify Contract on sale-purchase
Contract on sale-purchase: proves that timber was officially sold by government agency, and that royalties were paid.
3
Verify Royalty payment receipt (certificate)
Royalty payment receipt (certificate): to be compared with market prices and minimum prices set by the Ministry of Industry and Commerce for current year. This information may provide an indication as to whether timber was auctioned or sold via negotiations at the lowest price (which can be indicative of conspiracy between officials and buyer).
Description of legal requirements

Sale of timber shall be done officially, and harvested timber shall be registered in log yards

VIEW MORE
VAT is to be paid in full to the state treasury for the preceding month by the 15th of each month, or at the time of import of goods. VAT is to be overseen and collected by the Tax Department of the Ministry of Finance and district- and provincial-level tax divisions.
Exempt from value-added tax are goods and services for export, and activities of sapling nurseries, afforestation, and operations relating to industrial plantations (Law No. 04/ NA 2006 on Value Added Tax, Articles 10 and 19).
Local authorities are prohibited from deriving any additional taxes from sale of logs, timber products, timber transport and export which are not stipulated in the national legislation (Agreement No. 32/PM, 2012, Article 9).
 
Legally required documents
  • Bank deposit slip
  • Payment receipt (certificate)
Applicable legislation
VIEW LESS
1.7 Income and profit taxes
Last updated on 2022-03-01 Unofficial sale, and lack of harvested timber being registered in log yards as required for tax registration Specified RISK
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verification
1
Verify Log list
Log list: made at log yard II.​ Volumes, composition of species, and sizes in log list shall match characteristics of timber on sale.
2
Verify Contract on sale-purchase
Contract on sale-purchase: proves that timber was officially sold by government agency, and that royalties were paid.
3
Verify Royalty payment receipt (certificate)
Royalty payment receipt (certificate): to be compared with market prices and minimum prices set by the Ministry of Industry and Commerce for current year. This information may provide an indication as to whether timber was auctioned or sold via negotiations at the lowest price (which can be indicative of conspiracy between officials and buyer).
Description of legal requirements

Sale of timber shall be done officially, and harvested timber shall be registered in log yards

VIEW MORE
Legally required documents
  • Bank deposit slip
  • Payment receipt (certificate)
Applicable legislation
VIEW LESS
1.8 Timber harvesting regulations
Last updated on 2022-03-01 Harvesting regulations not being met by forest operators Specified RISK
Selective logging:Before the moratorium on selective logging was established in 2012, Jonsson (2006) inspected selective logging in an FSC-certified production forest area (the Thapangtong districts of Savannaket province) with valid forest management plans and approved logging plans. Jonsson concluded that logging plans were seen as providing “quotas” – as giving the right to cut a certain volume – rather than as directing logging to spe... VIEW MORESelective logging:
Before the moratorium on selective logging was established in 2012, Jonsson (2006) inspected selective logging in an FSC-certified production forest area (the Thapangtong districts of Savannaket province) with valid forest management plans and approved logging plans. Jonsson concluded that logging plans were seen as providing “quotas” – as giving the right to cut a certain volume – rather than as directing logging to specific marked trees, which are selected to ensure low impact, low intensity logging, and, as a consequence, the desired stand structure and long-term growth was jeopardised. 
In the inspected areas, only in parts did logging adhere to the plans and guidelines, while logging practice was still driven by the needs to supply sawmills with their desired wood (preferred species composition, log sizes, and total volumes). 
Significant and commonly occurring breaches of plans/prescriptions were encountered, such as: 
•    Cutting of unmarked trees (including important NTFP trees) in all inspected harvest blocks, but in some more than in others; 
•    Fresh, dead and dying trees had been cut in the harvest blocks over and above the harvest plan as part of fulfilling the quota for sawmills:
•    In spite of the previous point, some good and large logs were left in the felling area and not extracted to log yard II;
•    Marked trees had been left standing with the explanation that the lower part of the trunk was affected by rot, or that the quota for the block and for that species had been filled; and 
•    Where skid trails were marked on the map, they were not followed during operations.
The organisational control structure was weak, monitoring on all levels was unclear, and lines of command were disorganised. At the district and village levels, there were no forest staff who had control as their main task. No FMU or provincial logging company staff were present at the logging sites, leaving Village Forest Organisation personnel to be used as tree spotters. Loggers were Vietnamese nationals which hampered communication with Village Forestry Organisation personnel. The logging crew had no copy of a map or plan, and no instructions apart from what tree to cut.
According to Hodgdon’s observations (2010), state foresters are routinely reassigned to work with companies that are illegally removing timber from production forest areas. Middle and low-level state foresters were all part of this “black market” system as well. Their payoffs, while considerably less than what the top-level officials make, are still far more than they could hope to earn in almost any other endeavour.
Conversion:
Logging permits for conversion are seen as providing “quota” – as giving the right to cut a certain volume, regardless of the area allocated for clearance, and results of the pre-felling survey.
WWF’s study on timber logging under logging permits for mining, road construction and reservoir clearances (Smirnov, 2015) revealed that timber logging in the framework of these permits does not meet even basic legal requirements, and accordingly almost the entire volume of harvested timber must be deemed illegal. 
These contradictions between the practice of logging “conversion” timber and relevant forest legislation were as follows:
•    Logging was carried out on the principle of creaming for the most valuable trees, regardless of concession borders and the stated objectives of logging activities (removal of timber from development project areas);
•    Administrative district borders apparently become the only spatial reference for such “concessions” (even this limit is ruled out in some cases). A majority of logging sites (and even all sites in some cases) were located beyond concession areas;
•    Accordingly, the composition and volume of harvested timber had no relation to the pre-felling inventory in practice, the maximum volume of harvested timber allowed by quota can be the only limitation on loggers (although this limit can be disregarded as well); 
•    Even basic forestry and environmental requirements had been ignored: logging took place in areas with complete restriction on logging (on slopes over 35 degrees and within riparian forests), including hauling along and across streams. 
Neither foresters of Provincial and District Agriculture and Forestry Offices, nor the specially assigned supervision committee responsible for logging management, is in control of the compliance of logging operations in forests.
Lao Prime Minister Thongloun Sisoulith was strongly critical of the timber logging done for Lao public works projects, like dams, roads, and power transmission facilities, as this logging is conducted far beyond designated areas. “In the past we were lied to, with timber harvests starting with trees for dam catchment beginning at the top of the mountains and then cutting their way down,” he said.
“Cutting trees for electric lines covers many metres of jungle on each side of the right-of-way,” he added. “After the logs were cleared, the project developers would say they went the wrong way, so that they would then clear the jungle in another direction” (Radio Free Asia, 20 June 2016).
Senior authorities of the Ministry of Agriculture and Forestry recently pointed a finger at businesses that funded road construction under a scheme in which the trees felled to make way for a new road were used to finance construction. They admitted that such schemes were leaving a loophole for massive illegal logging, and that more trees than necessary were reportedly felled. In many cases most of the trees cut down to make way for a new road through a natural forest appeared to be the most expensive trees. 
Minister of Agriculture and Forestry Dr Lien Thikeo gave one example of a road construction project in which the construction company was allowed to log trees only within 10 or 20m of the route, but the company in fact cut trees up to 50m from the route on both sides (Vientiane Times, 16 June, 2016).
Deputy Minister of Agriculture and Forestry Mr Thongphat Vongmany “stated it was an unbelievable coincidence that only expensive trees, such as Mai Dou (Pterocarpus indicus), grew where these new roads were planned, saying the trees grew randomly in natural forest and not in a plantation. This indicated it was a tactic applied by logging businesses” (Vientiane Times, 14 June 2016).
Plantations:
In the absence of standards, evidence suggests that plantations are inadequately managed (Smith and Phengsopha, 2014). It is not possible to make an evaluation of the legal implementation, as there are no specific regulations. However, there is a risk of a lack of management plans (see 1.3), which is why the risk must be considered specified. 
Summary:
For Selective logging, there is risk of or relating to:
•    Logging not adhering to plans and regulations;
•    Cutting of unmarked trees (including important NTFP trees); 
•    Harvest occurring above the level specified in harvest plans;
•    Skid trails being marked on maps but not being followed during operations; and
•    Illegal removal of timber from production forest areas.
For Conversion, there is risk of or relating to:
•    Cutting of timber volume regardless of area allocated for clearance and results of pre-felling survey;
•    Composition and volume of harvested timber having no relation to the pre-felling inventory in practice; and
•    Logging in areas with complete restriction on logging (on slopes over 35 degrees, and within riparian forests), including hauling along and across streams. 
For Plantations, there is risk of:
•    Lack of management plans with which logging is to be comply. 
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verificationField verification
1
Verify Logging contract
Logging contract (for conversion timber): borders of logging area must comply with project design (route of road or transmission line, maximum flooding level of reservoir etc.)
2
Verify Logging plan
Logging plan (for conversion timber): borders of logging area must comply with project design (route of road or transmission line, maximum flooding level of reservoir etc.)
3
Visit Logging area
Conduct onsite verification to confirm legal management practices.
Description of legal requirements
Harvesting regulations shall be in place and followed during harvesting.
VIEW MORE
General:
Logging and transportation of logs to log yard II in production forest areas and areas with infrastructure projects must be stopped by 31st of May, and are prohibited from 1st June to 31st October due to the rainy season, even if the logging plan was not fully completed (Order No. 17/2008 PM Article 11 and Guideline No. 0105/MAF, 2008, Article 3). Logging and timber transportation can be allowed to proceed during the rainy season only in special cases based on government approval in areas with infrastructure projects where it is necessary to ensure timely completion of the construction. In this case it is required to use specific routes for timber transportation to prevent negative impact on the environment, and on national and public roads.
Selective logging:
NOTE: The issuing of logging plans in production forest areas are temporarily suspended (2016). The government can lift the suspension at any time, for instance, for the forthcoming logging season. 
The main principles of logging in production forest areas require applying selective cutting systems as key to ensuring natural regeneration, minimising negative impacts on the natural environment and society, and limiting damage to surrounding trees (Law No. 06/2007 NA on Forestry, 24 December 2007, Article 49).
The allowable volume for harvest is limited to 25% of the total volume of trees that have a DBH equal to to greater than 20 cm in a forest compartment (Regulation No. 0108/2005 MAF, Article 8). 
The list of requirements for selective logging intended to ensure timber supply on a regular and sustained basis includes, but is not limited to, (Guideline No. 2157/2006 DOF):
•    Presence of minimal standing volume;
•    Felling to be done according to the approved logging plan;
•    Logging only within logging block; 
•    Felling only marked trees included in the pre-felling-survey list;
•    Felling to be done according to the prescribed techniques and logging season, and felled tree to be extracted and utilised;
•    Damage to surrounding trees to be minimised, as well as negative impact on areas with conservation, social and environmental values; 
•    Skidding to be by the determined routes in order to prevent negative environmental impact;
•    After logging is completed, artificial regeneration to supplement in places where natural regeneration is not satisfactory;
•    Each log to be marked with indications of the PFA, sub-PFA, compartment, base line, strip line, tree number and log number;
•    Forestry officers to supervise logging activities, making thorough record of species, number of trees, number of logs and branches in order to provide information that can be followed up in the second log yard; 
•    Health protection equipment should be provided during logging operation.
The Provincial and District Agriculture and Forestry Offices supervises logging and is required to record log information to cross-check the logs against the logging plan, and subsequent stamping. District Agriculture and Forestry Offices are responsible for organizing the district Forest Management Units who actually implement the logging plans.
Provincial Agriculture and Forestry Office conducts an evaluation to measure actual harvest vs. harvest design. It certifies that monitoring of implementation during logging and after logging have been done and actual logging has been compared to the harvest plan and any issues with logging outside designated.
Post-logging assessment shall be done no later than one month after logging operation are completed and cover about 15% of the total number of felled trees (Guideline No. 2155/2006, Part VII).
Conversion:
Logging under permits for infrastructure construction is subject to specific management regulations (Law No. 06/2007 NA on Forestry, Article 49). 
Regulations on timber logging in course of permits (quotas) for land clearances is almost non-existent. For instance, there are no regulations on logging for construction of road and electric transmission lines and for clearance of degraded or barren forest land for purpose of industrial crop plantations. At present almost all permitted timber logging in Lao PDR is conducted on the ground of this type of quotas. Legislation covers only one type of forest conversion related to clearance of reservoir areas during construction hydropower dams (Regulation 112/2008 MAF) and involves following basic principles for logging activities:
•    Logging area in a reservoir is defined as the area 5-10 m below designed flood level;
•    Two types of logging - clear cut and selective (salvage)– are envisaged; 
•    Clear cut stipulates logging of all trees with diameter over 15 cm;
•    Selective logging stipulates cutting of only marked trees selected during pre-felling survey; 
•    Logging is prohibited outside the allocated reservoir (marked flooding area);
•    Preparation of road and log yard construction plan;
•    Marking the felling trees (code number of felling groups, sub-logging area and tree number); 
•    Forestry officers supervising logging activities makes thorough daily record of species, number of trees, number of logs and branches in order to provide information that can follow up in the second log yard; 
•    Measuring, grading and making log list in log yard II;
•    Marking logs in log yard II including: unique sequential number, length and diameter;
•    Cleaning must be conducted simultaneously with logging including chopping of logging waste.
Logging activities are managed and inspected by relevant units of the committee responsible for logging management and reservoir cleaning.
Plantations:
Plantation owners are required to undertake all tree plantation activities in compliance with approved plantation management plan and technical standards of the Ministry of Agriculture and Forestry (Regulation No. 196/2000 MAF, Articles 9-11), though it is unclear whether these rules have been promulgated. Harvest of planted trees for commercial purposes by a registered plantation shall be consistent with a plantation management plan (Regulation No. 196/2000 MAF, Article 14), although no technical requirements exist on the preparation of this document and thus are not enforced. 
 
Legally required documents
  • Forest management plan
  • Logging plan
  • Logging contract
  • Logging permit
  • Pre-logging inventory and tree marking report
Applicable legislation
VIEW LESS
1.9 Protected sites and species
Last updated on 2022-03-01 Legal requirements covering protected tree species are being ignored and protected species being harvested without official authorization Specified RISK
General:Legal requirements for obtaining government permits for logging protected tree species are routinely disregarded. Evidence of the logging of prohibited tree species such as Mai Champa Pa and Mai Pa Dong without authorisation under the cover of quotas for clearance of new roads is provided in a WWF report (Smirnov, 2015). Moreover, in this case, logging took place far from the planned road route and only for the purpose of high-grading, a... VIEW MOREGeneral:
Legal requirements for obtaining government permits for logging protected tree species are routinely disregarded. 
Evidence of the logging of prohibited tree species such as Mai Champa Pa and Mai Pa Dong without authorisation under the cover of quotas for clearance of new roads is provided in a WWF report (Smirnov, 2015). Moreover, in this case, logging took place far from the planned road route and only for the purpose of high-grading, and had no connection with clearance of the road route and/or its buffer zone. 
Cases of even more blatant disregard of regulations on restricted tree species were highlighted by the mass-media in Bolikhamxay province, where Électricité du Laos, the state-owned national energy company, forced villagers to pay for a connection to the electricity grid with timber from endangered rosewood species (Southeast Asia Globe, 8 December 2015).
Baird (2010) reports a case in which Champassak province authorities issued a so-called “deadwood quota” for cutting an unspecified quantity of Dalbergia cochinchinensis (Siamese rosewood), which is officially listed as a tree species which it is prohibited to harvest. 
Military logging plans can be granted to military companies within their area of interest regardless of the protected status of forests and without the oversight of the Ministry of Agriculture and Forestry, or of the Ministry of Natural Resources and Environment. 
Selective logging:
Before the moratorium on selective logging in natural forest was in place, Jonsson (2006) undertook field inspection of selective logging in an FSC-certified production forest area (the Thapangtong districts of Savannaket province) where valid forest management plans and approved logging plans were in place. This field visit showed that the conservation and non-timber aspects of forest use had been down-played, and the timber logging aspects being treated as the only thing of importance. The Vietnamese loggers were given no instructions apart from the location of trees to be cut. There are no indications of this case being unique. Highly biodiverse production forest areas were not set aside during planning of timber logging. If the moratorium is lifted, there is a risk that these issues will again prevail. However, a final assessment will only be possible if and when the practice of selective logging is reinstated.
Conversion in protected areas:
Quotas for timber logging under logging permits for mining, road construction and reservoir clearances are being allocated in national protected areas and protection forests regardless of the status of these areas – national protected areas and protection forests usually lack management plans and zoning.
Granting mining concessions in conservation and protection forests is in apparent violation of the Law on Mining (1997), Article 16 of which prohibits mining (prospecting, exploration, extraction) in “protected forest areas”. 
An analysis conducted by R. Stenhouse and J. Bojö (2011) has revealed three mineral exploration concessions and numerous general survey concessions within national protected areas (including petroleum exploration concessions in six national protected areas). According to their estimates, up to 5% of national protected areas are under some kind of mining concession, and up to 2.4 percent of the NPA system may become exploited by mining in the future. 
The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) has found approximately 80,000 ha of mineral extraction concessions within conservation and protection forests. Just as these mines are established in conflict with legislation, the conversion of land has also been allowed on false premises.
Plantations:
In numerous cases, tree concessions have been issued or extended into conservation and protection forest where establishment of commercial tree plantations is not legally allowed, leading to subsequent encroachment into natural forests. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) revealed that a significant part of tree plantation areas falls within protection (42,257 ha) and conservation (10,127 ha) forests. For example, concession areas allocated near several rubber plantations were found to fall within the Dong Hua Sao National Protected Area in Champasak Province. The real extent of the tree plantations in conservation forests seems to be far greater the official data suggests. The government revealed that allocation of rubber plantations has contributed to 39,000 ha of encroachment into the Phou Phanang and Phou Khao Khoay National Protected Areas in Vientiane and Borikhamxay provinces. The government had intended to confiscate illegally planted lands and incorporate them into protected areas as national property (Vientiane Times, 05 April 2013), but it is not possible to verify whether this has in fact been done. 
Teak, which is a protected species (Decision 0116/2007) occurs naturally in the forests of the Lao PDR, and there is a risk of illegal logging and export of naturally grown teak in consignments of plantation timber. There are specific rules in place for natural teak, but these rules are not consistently implemented, as in some provinces, plantation grown teak is a “special timber” (Smith, Phengsopha, 2014). 
Summary:
For all source types, there is risk of: 
•    Disregard for the legal requirements covering protected tree species, and
•    Misuse of deadwood quotas is common.
For Conversion, there is risk of:
•    Conversion of protected areas for development projects established in conflict with legislation.
For Plantations, there is risk of:
•    Concessions located within concession/protection forest; and
•    Illegal sale of natural-grown timber though teak plantations.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Village Forest Management Agreement
Village Forest Management Plan and map with zoning of village forests: to find out whether plantation or area with forest conversion falls within village conservation or protection forests
2
Verify Management plans for National Protected Areas
Management plans for National Protected Areas, protection, and production forest areas: allocation of logging areas shall comply with management plans, and protection sites (habitats of rare wildlife species, areas with high biodiversity) shall be set aside.
3
Verify Logging contract
Logging contract: protection sites (habitats of rare wildlife species, areas with high biodiversity) and trees of prohibited species shall be mapped and set aside.
4
Verify Logging permit
Logging permit: protection sites (habitats of rare wildlife species, areas with high biodiversity) and trees of prohibited species shall be mapped and set aside.
5
Verify Forest management plan
Forest management plan for production forest area, pre-logging inventory, and tree marking report: protection sites (habitats of rare wildlife species, areas with high biodiversity) and trees of prohibited species shall be mapped and set aside.
6
Verify Pre-logging inventory and tree marking report
Pre-logging inventory: protection sites (habitats of rare wildlife species, areas with high biodiversity) and trees of prohibited species shall be mapped and set aside.
7
Verify Tree marking report
Tree marking report: protection sites (habitats of rare wildlife species, areas with high biodiversity) and trees of prohibited species shall be mapped and set aside.
8
Verify Government approval
Government approval for prohibited tree species: can be allowed only in case of forest conversion.
Description of legal requirements
Government approval for harvesting protected tree species shall be in place (only allowed for forest conversion).
VIEW MORE
Conservation forests are defined as forest and forest land designated for the purposes of biological conservation, forest ecosystems, historical and cultural value, maintenance of ecological stability, recreation and tourism, or education and science research (Decree No. 164/PM, 1993 Article 3, Decree No. 134/G, 2015 Article 1.
It is forbidden to exploit any species of tree, except if authorised by the Government of the Lao PDR, for scientific research” (Decree No. 164/PM, 1993). 
Legislation provides the list of zones delineated within conservation forests and sets specific restrictions for each of them (Law No. 06/2007 NA on Forestry Article 24 and Decree No. 134/G, 2015 Article 8).
For instance, it is strictly prohibited to harvest any forest product in totally protected zones, and to conduct timber logging in corridor zones. The regime of controlled use zones is distinct from the regime of totally protected zones in that local people are allowed to use timber and forest products based on the regulations and the management plan. 
Besides this, restrictions on mining concessions in “protected forest areas” are imposed by the Law on Mining (1997) Article 17, and thus no conversion for mining can take place. 
The general principles of planning management in production forest areas include setting aside, and prohibition of timber logging in, areas with high biodiversity (Regulation No. 0108/2005 MAF, Article 8).
Six special tree species from natural forests are prohibited for cutting, selling, purchasing and transportation without permission from the government (Law No. 06/2007 NA on Forestry, Article 101 and 102). 
Order No. 17/2008 PM, Article 20, includes twelve protected tree species which are under threat of extinction, and reaffirms the prohibition on their being harvested in natural forests. A full list can be found in table 0008/2012 MAF of Prohibited, Special and Controlled Species (Listed on ProFLEGT website: http://flegtlaos.com/resources/forestry-legality-compendium/). 
Rare tree species must not be selected for cutting during pre-logging inventory (Guideline No. 2155/2006 Part V), and habitats of rare wildlife species are excluded from logging areas (Guideline No. 2157/2006 Part IV, Article 3).
 
Legally required documents
  • Forest management plan
  • Pre-logging inventory and tree marking report
  • Logging plan
  • Logging contract
  • Logging permit
Applicable legislation
VIEW LESS
1.9 Protected sites and species
Last updated on 2022-03-01 Conversion of protected areas for development projects established in conflict with legislation Specified RISK
General:Legal requirements for obtaining government permits for logging protected tree species are routinely disregarded. Evidence of the logging of prohibited tree species such as Mai Champa Pa and Mai Pa Dong without authorisation under the cover of quotas for clearance of new roads is provided in a WWF report (Smirnov, 2015). Moreover, in this case, logging took place far from the planned road route and only for the purpose of high-grading, a... VIEW MOREGeneral:
Legal requirements for obtaining government permits for logging protected tree species are routinely disregarded. 
Evidence of the logging of prohibited tree species such as Mai Champa Pa and Mai Pa Dong without authorisation under the cover of quotas for clearance of new roads is provided in a WWF report (Smirnov, 2015). Moreover, in this case, logging took place far from the planned road route and only for the purpose of high-grading, and had no connection with clearance of the road route and/or its buffer zone. 
Cases of even more blatant disregard of regulations on restricted tree species were highlighted by the mass-media in Bolikhamxay province, where Électricité du Laos, the state-owned national energy company, forced villagers to pay for a connection to the electricity grid with timber from endangered rosewood species (Southeast Asia Globe, 8 December 2015).
Baird (2010) reports a case in which Champassak province authorities issued a so-called “deadwood quota” for cutting an unspecified quantity of Dalbergia cochinchinensis (Siamese rosewood), which is officially listed as a tree species which it is prohibited to harvest. 
Military logging plans can be granted to military companies within their area of interest regardless of the protected status of forests and without the oversight of the Ministry of Agriculture and Forestry, or of the Ministry of Natural Resources and Environment. 
Selective logging:
Before the moratorium on selective logging in natural forest was in place, Jonsson (2006) undertook field inspection of selective logging in an FSC-certified production forest area (the Thapangtong districts of Savannaket province) where valid forest management plans and approved logging plans were in place. This field visit showed that the conservation and non-timber aspects of forest use had been down-played, and the timber logging aspects being treated as the only thing of importance. The Vietnamese loggers were given no instructions apart from the location of trees to be cut. There are no indications of this case being unique. Highly biodiverse production forest areas were not set aside during planning of timber logging. If the moratorium is lifted, there is a risk that these issues will again prevail. However, a final assessment will only be possible if and when the practice of selective logging is reinstated.
Conversion in protected areas:
Quotas for timber logging under logging permits for mining, road construction and reservoir clearances are being allocated in national protected areas and protection forests regardless of the status of these areas – national protected areas and protection forests usually lack management plans and zoning.
Granting mining concessions in conservation and protection forests is in apparent violation of the Law on Mining (1997), Article 16 of which prohibits mining (prospecting, exploration, extraction) in “protected forest areas”. 
An analysis conducted by R. Stenhouse and J. Bojö (2011) has revealed three mineral exploration concessions and numerous general survey concessions within national protected areas (including petroleum exploration concessions in six national protected areas). According to their estimates, up to 5% of national protected areas are under some kind of mining concession, and up to 2.4 percent of the NPA system may become exploited by mining in the future. 
The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) has found approximately 80,000 ha of mineral extraction concessions within conservation and protection forests. Just as these mines are established in conflict with legislation, the conversion of land has also been allowed on false premises.
Plantations:
In numerous cases, tree concessions have been issued or extended into conservation and protection forest where establishment of commercial tree plantations is not legally allowed, leading to subsequent encroachment into natural forests. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) revealed that a significant part of tree plantation areas falls within protection (42,257 ha) and conservation (10,127 ha) forests. For example, concession areas allocated near several rubber plantations were found to fall within the Dong Hua Sao National Protected Area in Champasak Province. The real extent of the tree plantations in conservation forests seems to be far greater the official data suggests. The government revealed that allocation of rubber plantations has contributed to 39,000 ha of encroachment into the Phou Phanang and Phou Khao Khoay National Protected Areas in Vientiane and Borikhamxay provinces. The government had intended to confiscate illegally planted lands and incorporate them into protected areas as national property (Vientiane Times, 05 April 2013), but it is not possible to verify whether this has in fact been done. 
Teak, which is a protected species (Decision 0116/2007) occurs naturally in the forests of the Lao PDR, and there is a risk of illegal logging and export of naturally grown teak in consignments of plantation timber. There are specific rules in place for natural teak, but these rules are not consistently implemented, as in some provinces, plantation grown teak is a “special timber” (Smith, Phengsopha, 2014). 
Summary:
For all source types, there is risk of: 
•    Disregard for the legal requirements covering protected tree species, and
•    Misuse of deadwood quotas is common.
For Conversion, there is risk of:
•    Conversion of protected areas for development projects established in conflict with legislation.
For Plantations, there is risk of:
•    Concessions located within concession/protection forest; and
•    Illegal sale of natural-grown timber though teak plantations.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
Risk mitigation options
Document verification
1
Verify Logging plan
Logging plan (for conversion timber): to find out whether logging area falls within protection or conservation forests
2
Verify Logging contract
Logging contract (for conversion timber): to find out whether logging area falls within protection or conservation forests
3
Verify Map of national forest categories
Map of national forest categories: to find out whether timber sources are situated within protection or conservation forests.
Description of legal requirements
VIEW MORE
Conservation forests are defined as forest and forest land designated for the purposes of biological conservation, forest ecosystems, historical and cultural value, maintenance of ecological stability, recreation and tourism, or education and science research (Decree No. 164/PM, 1993 Article 3, Decree No. 134/G, 2015 Article 1.
It is forbidden to exploit any species of tree, except if authorised by the Government of the Lao PDR, for scientific research” (Decree No. 164/PM, 1993). 
Legislation provides the list of zones delineated within conservation forests and sets specific restrictions for each of them (Law No. 06/2007 NA on Forestry Article 24 and Decree No. 134/G, 2015 Article 8).
For instance, it is strictly prohibited to harvest any forest product in totally protected zones, and to conduct timber logging in corridor zones. The regime of controlled use zones is distinct from the regime of totally protected zones in that local people are allowed to use timber and forest products based on the regulations and the management plan. 
Besides this, restrictions on mining concessions in “protected forest areas” are imposed by the Law on Mining (1997) Article 17, and thus no conversion for mining can take place. 
The general principles of planning management in production forest areas include setting aside, and prohibition of timber logging in, areas with high biodiversity (Regulation No. 0108/2005 MAF, Article 8).
Six special tree species from natural forests are prohibited for cutting, selling, purchasing and transportation without permission from the government (Law No. 06/2007 NA on Forestry, Article 101 and 102). 
Order No. 17/2008 PM, Article 20, includes twelve protected tree species which are under threat of extinction, and reaffirms the prohibition on their being harvested in natural forests. A full list can be found in table 0008/2012 MAF of Prohibited, Special and Controlled Species (Listed on ProFLEGT website: http://flegtlaos.com/resources/forestry-legality-compendium/). 
Rare tree species must not be selected for cutting during pre-logging inventory (Guideline No. 2155/2006 Part V), and habitats of rare wildlife species are excluded from logging areas (Guideline No. 2157/2006 Part IV, Article 3).
 
Legally required documents
  • Forest management plan
  • Pre-logging inventory and tree marking report
  • Logging plan
  • Logging contract
  • Logging permit
Applicable legislation
VIEW LESS
1.9 Protected sites and species
Last updated on 2022-03-01 Illegal sale (laundering) of natural-grown timber though teak plantations  Specified RISK
General:Legal requirements for obtaining government permits for logging protected tree species are routinely disregarded. Evidence of the logging of prohibited tree species such as Mai Champa Pa and Mai Pa Dong without authorisation under the cover of quotas for clearance of new roads is provided in a WWF report (Smirnov, 2015). Moreover, in this case, logging took place far from the planned road route and only for the purpose of high-grading, a... VIEW MOREGeneral:
Legal requirements for obtaining government permits for logging protected tree species are routinely disregarded. 
Evidence of the logging of prohibited tree species such as Mai Champa Pa and Mai Pa Dong without authorisation under the cover of quotas for clearance of new roads is provided in a WWF report (Smirnov, 2015). Moreover, in this case, logging took place far from the planned road route and only for the purpose of high-grading, and had no connection with clearance of the road route and/or its buffer zone. 
Cases of even more blatant disregard of regulations on restricted tree species were highlighted by the mass-media in Bolikhamxay province, where Électricité du Laos, the state-owned national energy company, forced villagers to pay for a connection to the electricity grid with timber from endangered rosewood species (Southeast Asia Globe, 8 December 2015).
Baird (2010) reports a case in which Champassak province authorities issued a so-called “deadwood quota” for cutting an unspecified quantity of Dalbergia cochinchinensis (Siamese rosewood), which is officially listed as a tree species which it is prohibited to harvest. 
Military logging plans can be granted to military companies within their area of interest regardless of the protected status of forests and without the oversight of the Ministry of Agriculture and Forestry, or of the Ministry of Natural Resources and Environment. 
Selective logging:
Before the moratorium on selective logging in natural forest was in place, Jonsson (2006) undertook field inspection of selective logging in an FSC-certified production forest area (the Thapangtong districts of Savannaket province) where valid forest management plans and approved logging plans were in place. This field visit showed that the conservation and non-timber aspects of forest use had been down-played, and the timber logging aspects being treated as the only thing of importance. The Vietnamese loggers were given no instructions apart from the location of trees to be cut. There are no indications of this case being unique. Highly biodiverse production forest areas were not set aside during planning of timber logging. If the moratorium is lifted, there is a risk that these issues will again prevail. However, a final assessment will only be possible if and when the practice of selective logging is reinstated.
Conversion in protected areas:
Quotas for timber logging under logging permits for mining, road construction and reservoir clearances are being allocated in national protected areas and protection forests regardless of the status of these areas – national protected areas and protection forests usually lack management plans and zoning.
Granting mining concessions in conservation and protection forests is in apparent violation of the Law on Mining (1997), Article 16 of which prohibits mining (prospecting, exploration, extraction) in “protected forest areas”. 
An analysis conducted by R. Stenhouse and J. Bojö (2011) has revealed three mineral exploration concessions and numerous general survey concessions within national protected areas (including petroleum exploration concessions in six national protected areas). According to their estimates, up to 5% of national protected areas are under some kind of mining concession, and up to 2.4 percent of the NPA system may become exploited by mining in the future. 
The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) has found approximately 80,000 ha of mineral extraction concessions within conservation and protection forests. Just as these mines are established in conflict with legislation, the conversion of land has also been allowed on false premises.
Plantations:
In numerous cases, tree concessions have been issued or extended into conservation and protection forest where establishment of commercial tree plantations is not legally allowed, leading to subsequent encroachment into natural forests. The inventory of state land leases and concessions in Laos (Schönweger et al., 2012) revealed that a significant part of tree plantation areas falls within protection (42,257 ha) and conservation (10,127 ha) forests. For example, concession areas allocated near several rubber plantations were found to fall within the Dong Hua Sao National Protected Area in Champasak Province. The real extent of the tree plantations in conservation forests seems to be far greater the official data suggests. The government revealed that allocation of rubber plantations has contributed to 39,000 ha of encroachment into the Phou Phanang and Phou Khao Khoay National Protected Areas in Vientiane and Borikhamxay provinces. The government had intended to confiscate illegally planted lands and incorporate them into protected areas as national property (Vientiane Times, 05 April 2013), but it is not possible to verify whether this has in fact been done. 
Teak, which is a protected species (Decision 0116/2007) occurs naturally in the forests of the Lao PDR, and there is a risk of illegal logging and export of naturally grown teak in consignments of plantation timber. There are specific rules in place for natural teak, but these rules are not consistently implemented, as in some provinces, plantation grown teak is a “special timber” (Smith, Phengsopha, 2014). 
Summary:
For all source types, there is risk of: 
•    Disregard for the legal requirements covering protected tree species, and
•    Misuse of deadwood quotas is common.
For Conversion, there is risk of:
•    Conversion of protected areas for development projects established in conflict with legislation.
For Plantations, there is risk of:
•    Concessions located within concession/protection forest; and
•    Illegal sale of natural-grown timber though teak plantations.
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
  • Plantation timber – smallholders
Risk mitigation options
Document verificationField verification
1
Verify Logging contract
Check that teak was is not included
2
Verify Logging permit
Check that teak was is not included
3
Verify Forest management plan
Check that teak was is not included
4
Verify Pre-logging inventory and tree marking report
Check that teak was is not included
5
Verify Tree marking report
Check that teak was is not included
6
Visit Logging area
Visit logging area to verify that teak has not been harvested
Description of legal requirements
Naturally grown teak shall not be sold through teak plantations
VIEW MORE
Conservation forests are defined as forest and forest land designated for the purposes of biological conservation, forest ecosystems, historical and cultural value, maintenance of ecological stability, recreation and tourism, or education and science research (Decree No. 164/PM, 1993 Article 3, Decree No. 134/G, 2015 Article 1.
It is forbidden to exploit any species of tree, except if authorised by the Government of the Lao PDR, for scientific research” (Decree No. 164/PM, 1993). 
Legislation provides the list of zones delineated within conservation forests and sets specific restrictions for each of them (Law No. 06/2007 NA on Forestry Article 24 and Decree No. 134/G, 2015 Article 8).
For instance, it is strictly prohibited to harvest any forest product in totally protected zones, and to conduct timber logging in corridor zones. The regime of controlled use zones is distinct from the regime of totally protected zones in that local people are allowed to use timber and forest products based on the regulations and the management plan. 
Besides this, restrictions on mining concessions in “protected forest areas” are imposed by the Law on Mining (1997) Article 17, and thus no conversion for mining can take place. 
The general principles of planning management in production forest areas include setting aside, and prohibition of timber logging in, areas with high biodiversity (Regulation No. 0108/2005 MAF, Article 8).
Six special tree species from natural forests are prohibited for cutting, selling, purchasing and transportation without permission from the government (Law No. 06/2007 NA on Forestry, Article 101 and 102). 
Order No. 17/2008 PM, Article 20, includes twelve protected tree species which are under threat of extinction, and reaffirms the prohibition on their being harvested in natural forests. A full list can be found in table 0008/2012 MAF of Prohibited, Special and Controlled Species (Listed on ProFLEGT website: http://flegtlaos.com/resources/forestry-legality-compendium/). 
Rare tree species must not be selected for cutting during pre-logging inventory (Guideline No. 2155/2006 Part V), and habitats of rare wildlife species are excluded from logging areas (Guideline No. 2157/2006 Part IV, Article 3).
 
Legally required documents
  • Forest management plan
  • Pre-logging inventory and tree marking report
  • Logging plan
  • Logging contract
  • Logging permit
Applicable legislation
VIEW LESS
1.10 Environmental requirements
Last updated on 2022-03-01 General disregard of environmental requirements  Specified RISK
Selective logging:According to Jonsson (2006), inspection of the Don Situang production forest area tree maps for all inspected harvest blocks revealed that mother trees had not been marked as per requirements, and that no information on conservation features had been noted on the maps. Village Forest Organisation personnel were not aware of “mother trees”, and they were not marked on the tree maps. The proposed felling direction was not mark... VIEW MORESelective logging:
According to Jonsson (2006), inspection of the Don Situang production forest area tree maps for all inspected harvest blocks revealed that mother trees had not been marked as per requirements, and that no information on conservation features had been noted on the maps. Village Forest Organisation personnel were not aware of “mother trees”, and they were not marked on the tree maps. The proposed felling direction was not marked on the trees. Unmarked Mai Nganag trees of importance for NTFP use (resin) had been cut, and villagers were unhappy about this fact. No further information was available on the implementation of environmental requirements, however, the disregard for forest management regulation (see. 1.8), could indicate a risk of the environmental regulations being violated.
Conversion and Plantations:
Two detailed case studies on timber logging under quotas for road construction and limestone quarrying conducted by the WWF (Smirnov, 2015) revealed that logging of “conversion” timber was carried out under the principle of creaming for the most valuable trees, regardless of concession borders, including logging in environmentally sensitive areas such as slopes of more than 35 degrees, and within 30-50 m buffer zones along the banks of rivers and streams. 
Numerous researchers have provided evidence that companies have failed to meet requirements for having an Environmental Impact Assessment for development projects undertaken before commencement of project activities, or had not conducted this assessment at all. 
For instance, according to Kenney-Lazar (2015), a Vietnamese company had cleared land in Savannakhet province to establish a eucalyptus plantation before detailed surveys of what land was available had been conducted, and they had usually only conducted surveys if there was a conflict with villages concerning the land cleared. Another Vietnamese corporation did not conduct any environmental or social impact assessments prior to getting a concession in Attapeu province for the establishment of a rubber plantation. The required assessments were made only after the project had been running for two years (Kenney-Lazar, 2010).
Fertiliser and pesticides in plantations
Overuse of fertilisers and pesticides, as well as use of banned pesticides in plantations, is a widely acknowledged problem. Questions about the impact of chemicals on the environment, and the government’s ability to control their use have been raised in numerous publications (RFA – Radio Free Asia, 14 April 2016; RFA – Radio Free Asia, 06 May 2016). 
According to the report “Illegal Pesticide Trade in the Mekong Countries: The Case of the Lao PDR” (Vázquez, 2012), the expansion of rubber plantations has greatly increased inputs of herbicides into the ecosystem, especially glyphosate and paraquat, even though the latter is on the list of banned pesticides in Laos (Regulation No. 2860/2010 MAF, Annex 1).
Nearly all pesticides sold and used in Laos originate in Thailand and China, and to some extent from Vietnam, and are sold under Thai and Chinese labels, which makes it difficult to identify the types of chemicals used (Vázquez, 2012); this is contrary to a regulation stipulating that pesticide formulations should bear labels written in Lao and/or English (Regulation No. 2860/2010 MAF, Article 26).
Laos’ long, porous borders, and the ease of movement of pesticides with little oversight, make enforcement of pesticide regulations and bans a challenge, as was admitted by the Lao authorities responsible (including the Department of Agriculture’s deputy director, the head of the Pesticides Regulatory Division). Besides the formal import of pesticides, there are also pesticides illegally traded along the border (through forest trails across the Laos-China border, and across the Mekong River from Thailand by means of small private boats), including those that are prohibited (Vázquez, 2012; RFA – Radio Free Asia, 06 May 2016; RFA – Radio Free Asia, 14 April 2016; The Straits times, 16 April 2016). 
Vongpaphan Manivong, a researcher with the Lao National Agriculture and Forestry Research Institute, found that chemical counterfeiting was rampant, as banned chemicals are imported with new labels attached to fool Lao customs officers. Researchers have found nearly 50 different chemicals bound for plantations, chemicals that were either banned or faked to look like they were approved (RFA – Radio Free Asia, 14 April 2016), a direct violation of Regulation No. 2860/2010 MAF, Article 25 and 27, which require that pesticides be kept in their original packaging during importation, transportation, storage and distribution, and which prohibit false statements. 
In 2011, most officials in charge of inspecting pesticides were not familiar with these chemicals, and few knew about Laos’ new regulations enacted in 2010. Inspection of pesticides and detection of banned agricultural chemicals were not an important aspect of the daily routine of officers at the traditional checkpoints in the districts along the Mekong River. They were not aware of pesticide regulations, nor that imported pesticides must be cross-checked with the Ministry of Agriculture and Forestry’s list of registered and banned pesticides (Vázquez, 2012). 
Officials of District Agriculture and Forestry offices did not inspect farms (which includes smallholders of teak and rubber plantations), or monitor pesticide use, and inspection was limited to retail shops. 
A field assessment in July 2011 indicated that most of the pesticides sold and used in Laos were technically illegal, because imports and sales tended to take place largely without a government license, outside government regulations. Most retail shop owners were unaware of pesticide regulations and banned pesticides, and reported that purchases were not scrutinised for banned or illegal pesticides (Vázquez, 2012). 
The Lao Upland Rural Advisory Service (LURAS) discussion paper claimed that: "The use of herbicides, such as paraquat, has brought about a transformation of the landscape in upland provinces such as Xieng Khuang", and that “these chemicals are a serious threat to human health and a contributing factor in the loss of biodiversity and declining soil fertility” (2016). Laos, as with most non-industrialised countries, lacks the technology to dispose of pesticides safely. Plantation owners do not manage their waste, and are blamed for throwing that waste, including fertiliser and plastic bags, plastic bottles of pesticides and insecticides, into rivers and near houses (Vazquez, 2012). These practices contaminate the soil, plants, water, fish, and the air, and increase the health risks to rural communities. One case showed that pesticides were thrown into a stream used by the local people. The chemicals leached into the ground water, causing concerns about contamination, and, in at least one case, a death was linked to the pollution (RFA – Radio Free Asia, 14 April 2016). Media reports say that locals in Bokeo province are now afraid to collect forest food like mushrooms near plantations, and quoted the governor of Bokeo as saying that the "impact on the environment and nearby communities partly results from the fact that relevant government authorities failed to carry out proper management and monitoring" of chemical fertilisers, harmful herbicides and pesticides, which “have been used by foreign investors" (The Straits Times, 16 April 2016). Vongpaphan Manivong, a researcher with the Lao National Agriculture and Forestry Research Institute, told mass media that the dearth of enforcement allows unscrupulous plantation owners to use banned chemicals (RFA – Radio Free Asia, 14 April 2016).
Xiangkhouang officials admitted that they are unable to control the use of banned herbicides, and farmers in the province can easily buy these chemicals (RFA – Radio Free Asia, 06 May 2016).
There is no mechanism in place in the region to send illegal pesticides back to their country of origin. Thus, enforcing pesticide regulations, for example by confiscating illegal pesticides, becomes a challenge in the absence of adequate technology to dispose of hazardous products. Cases have been recorded in which inspectors of District Agriculture and Forestry Offices did not confiscate illegal pesticides because of the difficulty of disposing of them in a safe manner (Vázquez, 2012). 
Summary:
For all source types there is a general disregard of environmental requirements. 
For Selective logging, there is risk of: 
•    Lack of marking of mother trees;
•    No mapping of conservation features; and
•    Logging of important NTFP trees. 
For Conversion and Plantations, there is risk of:
•    Logging in environmentally sensitive areas (slopes, buffer zones and stream banks);
•    Lack of Environmental Impact Assessments; and
•    Misuse of fertilisers and other chemicals (overuse and use of banned pesticides).
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Forest management plan
Village Forest Management Plan and map with zoning of village forests.
2
Verify Management plans for National Protected Areas
Management plans for National Protected Areas, protection and production forest areas: shall set environmental limitations for logging activities. Plantation management plan for registered plantations: to find out whether plantation is situated outside of conservation and protection forests, whether plan provides standards for application of pesticides and fertilisers, procedures on storing of chemicals and disposal of empty containers, whether list of banned pesticides is available.
3
Verify Logging plan
Logging plan: shall contain measures on environmental protection (forest roads shall not cross steep slopes or go along river banks, temporary bridges shall be built over streams).
4
Verify Social and environmental impact assessment
Environmental impact assessment: must be undertaken and approved before granting concession; to check whether irreversible negative impact on environmental value was considered, and what measures were taken to mitigate and compensate negative impact.
5
Verify Operational plan
Operational plan on protection of water resources and environment: for development projects and tree plantations
6
Verify Summary report
Summary report of actual implementation of measures to mitigate and minimise impacts.
Description of legal requirements
Environmental requirements shall be adhered to.
VIEW MORE
Selective logging:
The general principles of logging management in production forest areas include setting aside of, and prohibition of timber logging in, highly biodiverse or environmentally sensitive areas.
Preparation of a logging plan requires delineation of areas excluded from timber logging, including: 
•    Areas determined by villagers as village buffer zones,
•    Wildlife corridors determined in the management plan, 
•    Slopes exceeding 35 degrees, and
•    Buffer zones along river banks, watersheds, habitats of rare wildlife etc. 
Trees that are used for traditional medicine are marked both on tree maps and on the ground, and together with mother and NTFP trees are excluded from logging (Guideline No. 2157/2006, Part IV, Articles 3, 5 and 6).
Areas of particular scenic beauty and biodiversity are also set aside from logging (Regulation No. 0108/2005 MAF, Article 8). 
Regulations require the taking of a wide array of measures to mitigate negative environmental impact of logging in production forest areas (Guideline No. 2157/2006 DOF), such as:
•    Measures related to road construction (including limitations on road width, avoidance of construction on steep slopes and inside of buffer zones along river banks, minimisation of the number of stream crossings etc.);
•    Clearances of log yards/log yards I and II (including optimal selection of sites at a distance from streams, limitation of area to no more than 0.5 ha); and
•    Forest fire prevention (including minimisation of wood residuals on logging sites, prevention of fire incidents caused by expansion of fires from logging camps, equipping logging machinery with fire extinguishers etc.).
Training should be conducted to upgrade the knowledge and skill of workers on environment and biodiversity protection.
Conversion and Plantations:
Holders of state land concessions or leases must submit and obtain approval for the following documents from the Water Resources and Environment Administration (a part of the Ministry of Nature Resources and Environment since 2011): 
•    Report on initial environmental examination, amended based on comments of the Water Resources and Environment Administration/Ministry of Natural Resources and Environment if needed; 
•    Report on environmental impact assessment;
•    Management and environmental monitoring plan; 
•    Logging plan, including definitions for stream buffer zones. Compliance is monitored by the Forest Management Units and Provincial Agriculture and Forestry Office;
•    Environmental compliance certificate, including compliance with any conditions listed in the certificate; 
•    Summary report of actual implementation of measures to mitigate and minimise impacts; and,
•    Records of good agricultural practices, and records of complaints and actions taken to resolve them are reviewed by the Department of Agriculture once a year. 
Requirements on pesticide use are detailed in Regulation No. 2860/2010 MAF on the Control of Pesticides in the Lao PDR, which includes rules on registration, import, export, distribution, transportation, storage, disposal and transport of pesticides; and on packaging, labelling and advertising. These regulations contain a list of banned pesticides, and provisions on pesticide labelling in Lao and/or English.
All kinds of pesticides imported and used in the Lao PDR are under the responsibility and control of the Department of Agriculture of the Ministry of Agriculture and Forestry, which is responsible for legislation on imported pesticides and oversees the implementation of pesticide regulations at the national level. The Provincial Agriculture and Forestry Offices are in charge of implementing the regulations at the provincial level, such as import and distribution of pesticides and agricultural products, license approval, and inspection of pesticide shops (Regulation No. 2860/2010 MAF Articles 31 and 32). 
Timber harvesting activities related to clearance of reservoirs of hydropower dams must also implement a set of measures to prevent and reduce specific negative impacts (Regulation No. 0112/2008 MAF, Article 7-13, 15 and 35). These measures include: 
•    Determining corridor zones for nearby logging (reservoir) which can be used by wildlife as a passage to migrate from the flooding area;
•    Determining and demarcating buffer zones to serve as substitute habitats for wildlife that has escaped from the flooding area;
•    Designing the forest road and hauling track network in such a way as to prevent soil erosion, and siltation of streams, and to limit the number of river crossings;
•    Constructing temporary bridges over perennial streams;
•    Prohibiting the hauling and transportation of logs during heavy rains;
•    Preparing forest fire prevention troughs to act as fire breaks surrounding the logging (reservoir) area and logging camps;
•    Managing waste and dangerous materials; 
•    Prohibiting hunting of wildlife, including aquatic animals. 
 
Legally required documents
  • Forest management plan
  • Logging plan
Applicable legislation
  • Forestry law No. 08/NA, (25 May 2019), 2019.
  • Law on Water and Water Resources (amended) No 010/NA, 2017.
VIEW LESS
1.10 Environmental requirements
Last updated on 2022-03-01 Misuse of fertilisers and other chemicals (overuse and use of banned pesticides) Specified RISK
Selective logging:According to Jonsson (2006), inspection of the Don Situang production forest area tree maps for all inspected harvest blocks revealed that mother trees had not been marked as per requirements, and that no information on conservation features had been noted on the maps. Village Forest Organisation personnel were not aware of “mother trees”, and they were not marked on the tree maps. The proposed felling direction was not mark... VIEW MORESelective logging:
According to Jonsson (2006), inspection of the Don Situang production forest area tree maps for all inspected harvest blocks revealed that mother trees had not been marked as per requirements, and that no information on conservation features had been noted on the maps. Village Forest Organisation personnel were not aware of “mother trees”, and they were not marked on the tree maps. The proposed felling direction was not marked on the trees. Unmarked Mai Nganag trees of importance for NTFP use (resin) had been cut, and villagers were unhappy about this fact. No further information was available on the implementation of environmental requirements, however, the disregard for forest management regulation (see. 1.8), could indicate a risk of the environmental regulations being violated.
Conversion and Plantations:
Two detailed case studies on timber logging under quotas for road construction and limestone quarrying conducted by the WWF (Smirnov, 2015) revealed that logging of “conversion” timber was carried out under the principle of creaming for the most valuable trees, regardless of concession borders, including logging in environmentally sensitive areas such as slopes of more than 35 degrees, and within 30-50 m buffer zones along the banks of rivers and streams. 
Numerous researchers have provided evidence that companies have failed to meet requirements for having an Environmental Impact Assessment for development projects undertaken before commencement of project activities, or had not conducted this assessment at all. 
For instance, according to Kenney-Lazar (2015), a Vietnamese company had cleared land in Savannakhet province to establish a eucalyptus plantation before detailed surveys of what land was available had been conducted, and they had usually only conducted surveys if there was a conflict with villages concerning the land cleared. Another Vietnamese corporation did not conduct any environmental or social impact assessments prior to getting a concession in Attapeu province for the establishment of a rubber plantation. The required assessments were made only after the project had been running for two years (Kenney-Lazar, 2010).
Fertiliser and pesticides in plantations
Overuse of fertilisers and pesticides, as well as use of banned pesticides in plantations, is a widely acknowledged problem. Questions about the impact of chemicals on the environment, and the government’s ability to control their use have been raised in numerous publications (RFA – Radio Free Asia, 14 April 2016; RFA – Radio Free Asia, 06 May 2016). 
According to the report “Illegal Pesticide Trade in the Mekong Countries: The Case of the Lao PDR” (Vázquez, 2012), the expansion of rubber plantations has greatly increased inputs of herbicides into the ecosystem, especially glyphosate and paraquat, even though the latter is on the list of banned pesticides in Laos (Regulation No. 2860/2010 MAF, Annex 1).
Nearly all pesticides sold and used in Laos originate in Thailand and China, and to some extent from Vietnam, and are sold under Thai and Chinese labels, which makes it difficult to identify the types of chemicals used (Vázquez, 2012); this is contrary to a regulation stipulating that pesticide formulations should bear labels written in Lao and/or English (Regulation No. 2860/2010 MAF, Article 26).
Laos’ long, porous borders, and the ease of movement of pesticides with little oversight, make enforcement of pesticide regulations and bans a challenge, as was admitted by the Lao authorities responsible (including the Department of Agriculture’s deputy director, the head of the Pesticides Regulatory Division). Besides the formal import of pesticides, there are also pesticides illegally traded along the border (through forest trails across the Laos-China border, and across the Mekong River from Thailand by means of small private boats), including those that are prohibited (Vázquez, 2012; RFA – Radio Free Asia, 06 May 2016; RFA – Radio Free Asia, 14 April 2016; The Straits times, 16 April 2016). 
Vongpaphan Manivong, a researcher with the Lao National Agriculture and Forestry Research Institute, found that chemical counterfeiting was rampant, as banned chemicals are imported with new labels attached to fool Lao customs officers. Researchers have found nearly 50 different chemicals bound for plantations, chemicals that were either banned or faked to look like they were approved (RFA – Radio Free Asia, 14 April 2016), a direct violation of Regulation No. 2860/2010 MAF, Article 25 and 27, which require that pesticides be kept in their original packaging during importation, transportation, storage and distribution, and which prohibit false statements. 
In 2011, most officials in charge of inspecting pesticides were not familiar with these chemicals, and few knew about Laos’ new regulations enacted in 2010. Inspection of pesticides and detection of banned agricultural chemicals were not an important aspect of the daily routine of officers at the traditional checkpoints in the districts along the Mekong River. They were not aware of pesticide regulations, nor that imported pesticides must be cross-checked with the Ministry of Agriculture and Forestry’s list of registered and banned pesticides (Vázquez, 2012). 
Officials of District Agriculture and Forestry offices did not inspect farms (which includes smallholders of teak and rubber plantations), or monitor pesticide use, and inspection was limited to retail shops. 
A field assessment in July 2011 indicated that most of the pesticides sold and used in Laos were technically illegal, because imports and sales tended to take place largely without a government license, outside government regulations. Most retail shop owners were unaware of pesticide regulations and banned pesticides, and reported that purchases were not scrutinised for banned or illegal pesticides (Vázquez, 2012). 
The Lao Upland Rural Advisory Service (LURAS) discussion paper claimed that: "The use of herbicides, such as paraquat, has brought about a transformation of the landscape in upland provinces such as Xieng Khuang", and that “these chemicals are a serious threat to human health and a contributing factor in the loss of biodiversity and declining soil fertility” (2016). Laos, as with most non-industrialised countries, lacks the technology to dispose of pesticides safely. Plantation owners do not manage their waste, and are blamed for throwing that waste, including fertiliser and plastic bags, plastic bottles of pesticides and insecticides, into rivers and near houses (Vazquez, 2012). These practices contaminate the soil, plants, water, fish, and the air, and increase the health risks to rural communities. One case showed that pesticides were thrown into a stream used by the local people. The chemicals leached into the ground water, causing concerns about contamination, and, in at least one case, a death was linked to the pollution (RFA – Radio Free Asia, 14 April 2016). Media reports say that locals in Bokeo province are now afraid to collect forest food like mushrooms near plantations, and quoted the governor of Bokeo as saying that the "impact on the environment and nearby communities partly results from the fact that relevant government authorities failed to carry out proper management and monitoring" of chemical fertilisers, harmful herbicides and pesticides, which “have been used by foreign investors" (The Straits Times, 16 April 2016). Vongpaphan Manivong, a researcher with the Lao National Agriculture and Forestry Research Institute, told mass media that the dearth of enforcement allows unscrupulous plantation owners to use banned chemicals (RFA – Radio Free Asia, 14 April 2016).
Xiangkhouang officials admitted that they are unable to control the use of banned herbicides, and farmers in the province can easily buy these chemicals (RFA – Radio Free Asia, 06 May 2016).
There is no mechanism in place in the region to send illegal pesticides back to their country of origin. Thus, enforcing pesticide regulations, for example by confiscating illegal pesticides, becomes a challenge in the absence of adequate technology to dispose of hazardous products. Cases have been recorded in which inspectors of District Agriculture and Forestry Offices did not confiscate illegal pesticides because of the difficulty of disposing of them in a safe manner (Vázquez, 2012). 
Summary:
For all source types there is a general disregard of environmental requirements. 
For Selective logging, there is risk of: 
•    Lack of marking of mother trees;
•    No mapping of conservation features; and
•    Logging of important NTFP trees. 
For Conversion and Plantations, there is risk of:
•    Logging in environmentally sensitive areas (slopes, buffer zones and stream banks);
•    Lack of Environmental Impact Assessments; and
•    Misuse of fertilisers and other chemicals (overuse and use of banned pesticides).
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
  • Plantation timber – smallholders
Risk mitigation options
Document verification
1
Verify Records of good agricultural practices
Records of good agricultural practices, and records of complaints and actions taken to resolve them, are reviewed by the Department of Agriculture once a year.
2
Verify License on import of pesticides
3
Verify Records on pesticides turnover
4
Verify Pesticide registration certificate
Description of legal requirements
VIEW MORE
Selective logging:
The general principles of logging management in production forest areas include setting aside of, and prohibition of timber logging in, highly biodiverse or environmentally sensitive areas.
Preparation of a logging plan requires delineation of areas excluded from timber logging, including: 
•    Areas determined by villagers as village buffer zones,
•    Wildlife corridors determined in the management plan, 
•    Slopes exceeding 35 degrees, and
•    Buffer zones along river banks, watersheds, habitats of rare wildlife etc. 
Trees that are used for traditional medicine are marked both on tree maps and on the ground, and together with mother and NTFP trees are excluded from logging (Guideline No. 2157/2006, Part IV, Articles 3, 5 and 6).
Areas of particular scenic beauty and biodiversity are also set aside from logging (Regulation No. 0108/2005 MAF, Article 8). 
Regulations require the taking of a wide array of measures to mitigate negative environmental impact of logging in production forest areas (Guideline No. 2157/2006 DOF), such as:
•    Measures related to road construction (including limitations on road width, avoidance of construction on steep slopes and inside of buffer zones along river banks, minimisation of the number of stream crossings etc.);
•    Clearances of log yards/log yards I and II (including optimal selection of sites at a distance from streams, limitation of area to no more than 0.5 ha); and
•    Forest fire prevention (including minimisation of wood residuals on logging sites, prevention of fire incidents caused by expansion of fires from logging camps, equipping logging machinery with fire extinguishers etc.).
Training should be conducted to upgrade the knowledge and skill of workers on environment and biodiversity protection.
Conversion and Plantations:
Holders of state land concessions or leases must submit and obtain approval for the following documents from the Water Resources and Environment Administration (a part of the Ministry of Nature Resources and Environment since 2011): 
•    Report on initial environmental examination, amended based on comments of the Water Resources and Environment Administration/Ministry of Natural Resources and Environment if needed; 
•    Report on environmental impact assessment;
•    Management and environmental monitoring plan; 
•    Logging plan, including definitions for stream buffer zones. Compliance is monitored by the Forest Management Units and Provincial Agriculture and Forestry Office;
•    Environmental compliance certificate, including compliance with any conditions listed in the certificate; 
•    Summary report of actual implementation of measures to mitigate and minimise impacts; and,
•    Records of good agricultural practices, and records of complaints and actions taken to resolve them are reviewed by the Department of Agriculture once a year. 
Requirements on pesticide use are detailed in Regulation No. 2860/2010 MAF on the Control of Pesticides in the Lao PDR, which includes rules on registration, import, export, distribution, transportation, storage, disposal and transport of pesticides; and on packaging, labelling and advertising. These regulations contain a list of banned pesticides, and provisions on pesticide labelling in Lao and/or English.
All kinds of pesticides imported and used in the Lao PDR are under the responsibility and control of the Department of Agriculture of the Ministry of Agriculture and Forestry, which is responsible for legislation on imported pesticides and oversees the implementation of pesticide regulations at the national level. The Provincial Agriculture and Forestry Offices are in charge of implementing the regulations at the provincial level, such as import and distribution of pesticides and agricultural products, license approval, and inspection of pesticide shops (Regulation No. 2860/2010 MAF Articles 31 and 32). 
Timber harvesting activities related to clearance of reservoirs of hydropower dams must also implement a set of measures to prevent and reduce specific negative impacts (Regulation No. 0112/2008 MAF, Article 7-13, 15 and 35). These measures include: 
•    Determining corridor zones for nearby logging (reservoir) which can be used by wildlife as a passage to migrate from the flooding area;
•    Determining and demarcating buffer zones to serve as substitute habitats for wildlife that has escaped from the flooding area;
•    Designing the forest road and hauling track network in such a way as to prevent soil erosion, and siltation of streams, and to limit the number of river crossings;
•    Constructing temporary bridges over perennial streams;
•    Prohibiting the hauling and transportation of logs during heavy rains;
•    Preparing forest fire prevention troughs to act as fire breaks surrounding the logging (reservoir) area and logging camps;
•    Managing waste and dangerous materials; 
•    Prohibiting hunting of wildlife, including aquatic animals. 
 
Legally required documents
  • Forest management plan
  • Logging plan
Applicable legislation
  • Forestry law No. 08/NA, (25 May 2019), 2019.
  • Law on Water and Water Resources (amended) No 010/NA, 2017.
VIEW LESS
1.11 Health and safety
Last updated on 2022-03-01 Risk of non-compliance with health and safety rules  Specified RISK
Often logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from V... VIEW MOREOften logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from Vietnam (apparently these are not certified/licensed as required by Lao regulations).
According to Forest Trends’ 2010 report, almost all loggers in the southern Lao province of Attapeu are Vietnamese seasonal workers. Logging companies and tree plantation holders prefer to employ temporary/seasonal workers instead of full-time workers to avoid liability in case of accidents. Logging jobs in Laos are risky business, and injuries and deaths are not uncommon. Vietnamese interviewees told Forest Trends that injured workers or families of victims receive only minimum compensation from companies (Forest Trends, 2010). 
Plantations
Hunt’s report (2014) also raised questions regarding the welfare of workers engaged in Acacia and Eucalyptus plantations due to the presence of unexploded ordnance (UXO) in plantation areas, and a lack of evidence that concession holders had surveyed and cleared UXO before commencing work as required by Notification #093 of the National Regulatory Authority for the UXO/Mine Action Sector in the Lao PDR, 19 November 2012. This report presented a case study of a company’s employees having been exposed to extreme danger in the workplace through failure to clear unexploded ordnance from plantation sites before plantation operations began.
The Lao Upland Rural Advisory Service (LURAS) states that the government has made no effort to enforce the ban on chemicals of which all uses have been prohibited in Laos under MAF regulation 2860 (2016). Two rounds of nationwide inspections in 2012, conducted by FAO and the Department of Agriculture, found that banned pesticides, such as paraquat and methomyl, were readily available (Vázquez, 2012). 
Researchers pointed out that officials of Provincial and District Agriculture and Forestry offices do not have any records of fertilisers and chemical substances used on plantations, and do not inspect farms or monitor pesticide use (RFA – Radio Free Asia, 14 April 2016; Vázquez, 2012). 
While paraquat is banned in Laos, farmers (including plantation owners) have become accustomed to using it. While its toxicity is low when sprayed in recommended doses, it poses serious health issues to anyone who handles the chemical. A small, undiluted dose can kill a human, and paraquat is blamed for a large number of pesticide-related deaths. It is a major method of suicide in many developing countries, is easily absorbed through the skin, and has been linked with Parkinson's syndrome in farm workers (RFA – Radio Free Asia, 06 May 2016). 
Reports of illness and death from pesticide poisoning are widespread in Xiangkhuang. Nevertheless, farmers, including smallholders of tree plantations, keep spraying with minimal precautions (LURAS, 2016). It has been reported that farmers in Xiangkhouang, an epicentre of rubber plantation, are using about 25 times the amount recommended by the manufacturer (RFA – Radio Free Asia, 06 May 2016). 
Officials of District Agriculture and Forestry Offices, in charge of teaching farmers the appropriate use of pesticides, are not aware of the negative impacts of pesticide exposure, nor of the correct use of pesticides (Vázquez, 2012). 
According to government officials and researchers, pesticide application is often done with a pump sprayer by women and even children, the latter in contravention of labour legislation which prohibits the employment of minors in activities that are dangerous to health (Law No. 43/NA 2013 on Labour, Article 102). 
Adequate personal protective equipment for pesticide applicators is lacking, and even if it were available, farmers may not be able to afford it, and thus, highly hazardous pesticides are used by farmers wearing little or no protection (Vázquez, 2012; LURAS, 2016). When mixing pesticides, the mixing tank was frequently placed in a river with children playing nearby. Some farmers reported buying and splitting pesticides with other farmers, a dangerous practice which increases exposure risks. 
Despite the requirement that pesticide storage facilities be located at least 100m from housing and domestic animal farms (if pesticides are stored in amounts of more than 10 litres or kilograms), some farmers store pesticides inside or under their houses. 
Summary:
For all source types, there is risk of: 
•    Lack of safety equipment and protective gear;
•    Very basic forest camp facilities; and
•    Use of non-certified hauling/winch trucks.
For Plantations there is risk of:
•    Failure to clear unexploded ordinance (UXO)/mines; and
•    Health issues from handling pesticides.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verificationStakeholder consultation
1
Verify Pesticide registration certificate
For Plantations. Companies shall report to the Labour Inspection Agency on assessment of risks to safety and health within the labour units, and to the Labour Inspection Agency on accidents
2
Verify List of banned pesticides
For Plantations. Companies shall report to the Labour Inspection Agency on assessment of risks to safety and health within the labour units, and to the Labour Inspection Agency on accidents
3
Verify Instructions on the correct use of pesticides
For Plantations. The document should include information on the negative impacts of pesticide exposure. Companies shall report to the Labour Inspection Agency on assessment of risks to safety and health within the labour units, and to the Labour Inspection Agency on accidents
4
Verify Logging area
Visual inspection of harvesting sites to confirm that health and safety regulatons are in place, including verification of use of PPE, forest camp facilities.
5
Consult Forest workers
Interview with forest workers shall confirm that PPE is provided and being used.
Description of legal requirements
Health and safety requirements shall be in place
VIEW MORE
General
The employer must inspect and assess risks to safety and health within the labour unit and workplace regularly, and must report the results of the risk assessment to the Labour Inspection Agency at least once per year (Law No. 43/ NA on Labour 2013, Articles 119 and 122). 
The employer is obliged to supply individual safety gear to employees in full and in good condition according to international standards; to ensure working conditions are safe, and that there is appropriate lighting, supply of drinking water and washing water, showers, toilets etc., a room set aside for the storage of toxic substances, and other measures against electric shocks, fire, etc.; to facilitate medical examinations of employees at least once a year, and to provide an on-site first aid kit (Law No. 43/ NA on Labour 2013, Articles 43 and 119). 
Workplaces with 100 employees or fewer must appoint a person responsible for the safety and health of employees; workplaces with more than 100 employees must establish a health and safety unit or committee. Remote workplaces with at least 50 employees must hire one medical officer; for fewer than 50 employees, the workplace must include a first aid kit and have a person trained in first aid on site (Law No. 43/ NA on Labour 2013, Article 123). 
Legislation prohibits the employment of minors in activities that are unsafe, or dangerous to health (Law No. 43/ NA on Labour 2013, Article 102). An employer cannot require a pregnant woman or woman with a child younger than one year old to undertake dangerous work (Law No. 43/ NA on Labour 2013, Article 97).
The employer must record accidents within a labour unit in detail, including the cause, and report it to the Labour Administration Agency (Law No. 43/NA 2013 on Labour, Article 125). 
Companies shall provide assistance to victims of labour accidents and workers who suffer from occupational diseases (including the cost of treatment as determined in the Law on Social Insurance), and payment of normal salary or wages during medical treatment and rehabilitation for up to 6 months (Law No. 43/NA 2013 on Labour, Article 128).
The employer (logging company) shall provide yearly medical examinations for all workers. Logging companies are required to submit specific regulations for workers to the Provincial Agriculture and Forestry Office, the Provincial Forestry Sector, and Timber Exploitation Unit for acknowledgment (Instruction No. 1035/2010 MAF, Article 3).
Safety equipment should be provided to workers for logging in production forest areas (Guideline No. 2157/2006 DOF Part X Article 1). Chainsaws should be equipped with protective features (Guideline No. 2157/2006 DOF Part X, Article 2). 
Requirements of qualifications of personnel include safety competence and first aid skills (Guideline No. 2157/2006 DOF Part XI). Training should be conducted to upgrade knowledge and skills of workers on the use of safety devices (including protective clothing), first aid, and precautions against accidents (Guideline No. 2157/2006 DOF Part XIV). Use of unregistered logging machinery is prohibited (Guideline No. 2157/2006 DOF Part XIII). 
Water tanks in logging camps must be kept clean and covered as a preventive measure against the breeding of mosquitoes that may cause the spread of diseases (Regulation No. 0112/2008 MAF Article 10).
Plantations
The Lao PDR is the most heavily bombed country, per capita, in history. It is heavily contaminated with cluster munitions and other explosive remnants of the Indochina War of the 1960s and 1970s, as well as landmines to a lesser extent. Fourteen of the Lao PDR’s 17 provinces suffer from unexploded ordnance (UXO) contamination; put another way, 98 districts are contaminated, covering an area of about 87,000 km2. 
Development projects (which include commercial development projects such as plantation operations and infrastructure construction) are required to survey and clear UXO before commencing work in accordance with the national standards, and must also allocate funding to cover the cost (Notification #093 of the National Regulatory Authority for UXO/Mine Action Sector in the Lao PDR, 19 November 2012, Clause 1; NRA Announcement No. 004/NRAB, 21 January 2015). 
Completion surveys are to be carried out for all areas of land released for use, either through clearance or technical survey. Information from the completion survey is to be reported in a “Completion Survey Report”, which is to be combined with the handover certificate and other task documentation and submitted to the National Regulatory Authority.
Requirements of pesticide use are detailed in Regulation No. 2860/2010 MAF on the Control of Pesticides in the Lao PDR. These regulations contain a list of banned pesticides (55 kinds), and providers of pesticides should possess safety instructions for their correct handling and use to ensure that they are not causing negative effects to people and the environment (Articles 19 and 21).
Applying pesticides requires farmers to wear protective equipment and to properly follow label instructions to minimise the negative impacts of pesticide exposure (Article 23). Employers should provide employees with proper equipment and training in pesticide application (Article 23). 
Employment of child labour in sectors that pose a threat to health, including activities involving the application of chemicals, is prohibited (Law No. 06/2006 NA on Labour Article 41).
 
Legally required documents
  • Report on completion of UXO survey or UXO clearance
Applicable legislation
VIEW LESS
1.11 Health and safety
Last updated on 2022-03-01 Failure to clear unexploded ordinance (UXO)/mines  Specified RISK
Often logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from V... VIEW MOREOften logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from Vietnam (apparently these are not certified/licensed as required by Lao regulations).
According to Forest Trends’ 2010 report, almost all loggers in the southern Lao province of Attapeu are Vietnamese seasonal workers. Logging companies and tree plantation holders prefer to employ temporary/seasonal workers instead of full-time workers to avoid liability in case of accidents. Logging jobs in Laos are risky business, and injuries and deaths are not uncommon. Vietnamese interviewees told Forest Trends that injured workers or families of victims receive only minimum compensation from companies (Forest Trends, 2010). 
Plantations
Hunt’s report (2014) also raised questions regarding the welfare of workers engaged in Acacia and Eucalyptus plantations due to the presence of unexploded ordnance (UXO) in plantation areas, and a lack of evidence that concession holders had surveyed and cleared UXO before commencing work as required by Notification #093 of the National Regulatory Authority for the UXO/Mine Action Sector in the Lao PDR, 19 November 2012. This report presented a case study of a company’s employees having been exposed to extreme danger in the workplace through failure to clear unexploded ordnance from plantation sites before plantation operations began.
The Lao Upland Rural Advisory Service (LURAS) states that the government has made no effort to enforce the ban on chemicals of which all uses have been prohibited in Laos under MAF regulation 2860 (2016). Two rounds of nationwide inspections in 2012, conducted by FAO and the Department of Agriculture, found that banned pesticides, such as paraquat and methomyl, were readily available (Vázquez, 2012). 
Researchers pointed out that officials of Provincial and District Agriculture and Forestry offices do not have any records of fertilisers and chemical substances used on plantations, and do not inspect farms or monitor pesticide use (RFA – Radio Free Asia, 14 April 2016; Vázquez, 2012). 
While paraquat is banned in Laos, farmers (including plantation owners) have become accustomed to using it. While its toxicity is low when sprayed in recommended doses, it poses serious health issues to anyone who handles the chemical. A small, undiluted dose can kill a human, and paraquat is blamed for a large number of pesticide-related deaths. It is a major method of suicide in many developing countries, is easily absorbed through the skin, and has been linked with Parkinson's syndrome in farm workers (RFA – Radio Free Asia, 06 May 2016). 
Reports of illness and death from pesticide poisoning are widespread in Xiangkhuang. Nevertheless, farmers, including smallholders of tree plantations, keep spraying with minimal precautions (LURAS, 2016). It has been reported that farmers in Xiangkhouang, an epicentre of rubber plantation, are using about 25 times the amount recommended by the manufacturer (RFA – Radio Free Asia, 06 May 2016). 
Officials of District Agriculture and Forestry Offices, in charge of teaching farmers the appropriate use of pesticides, are not aware of the negative impacts of pesticide exposure, nor of the correct use of pesticides (Vázquez, 2012). 
According to government officials and researchers, pesticide application is often done with a pump sprayer by women and even children, the latter in contravention of labour legislation which prohibits the employment of minors in activities that are dangerous to health (Law No. 43/NA 2013 on Labour, Article 102). 
Adequate personal protective equipment for pesticide applicators is lacking, and even if it were available, farmers may not be able to afford it, and thus, highly hazardous pesticides are used by farmers wearing little or no protection (Vázquez, 2012; LURAS, 2016). When mixing pesticides, the mixing tank was frequently placed in a river with children playing nearby. Some farmers reported buying and splitting pesticides with other farmers, a dangerous practice which increases exposure risks. 
Despite the requirement that pesticide storage facilities be located at least 100m from housing and domestic animal farms (if pesticides are stored in amounts of more than 10 litres or kilograms), some farmers store pesticides inside or under their houses. 
Summary:
For all source types, there is risk of: 
•    Lack of safety equipment and protective gear;
•    Very basic forest camp facilities; and
•    Use of non-certified hauling/winch trucks.
For Plantations there is risk of:
•    Failure to clear unexploded ordinance (UXO)/mines; and
•    Health issues from handling pesticides.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
Risk mitigation options
Document verification
1
Verify Report on completion of UXO survey or UXO clearance
2
Verify UXO/Mine Accident/Victim Reports
Description of legal requirements
Unexploded ordinance (UXO)/mines shall be cleared prior to clearing of forest
VIEW MORE
General
The employer must inspect and assess risks to safety and health within the labour unit and workplace regularly, and must report the results of the risk assessment to the Labour Inspection Agency at least once per year (Law No. 43/ NA on Labour 2013, Articles 119 and 122). 
The employer is obliged to supply individual safety gear to employees in full and in good condition according to international standards; to ensure working conditions are safe, and that there is appropriate lighting, supply of drinking water and washing water, showers, toilets etc., a room set aside for the storage of toxic substances, and other measures against electric shocks, fire, etc.; to facilitate medical examinations of employees at least once a year, and to provide an on-site first aid kit (Law No. 43/ NA on Labour 2013, Articles 43 and 119). 
Workplaces with 100 employees or fewer must appoint a person responsible for the safety and health of employees; workplaces with more than 100 employees must establish a health and safety unit or committee. Remote workplaces with at least 50 employees must hire one medical officer; for fewer than 50 employees, the workplace must include a first aid kit and have a person trained in first aid on site (Law No. 43/ NA on Labour 2013, Article 123). 
Legislation prohibits the employment of minors in activities that are unsafe, or dangerous to health (Law No. 43/ NA on Labour 2013, Article 102). An employer cannot require a pregnant woman or woman with a child younger than one year old to undertake dangerous work (Law No. 43/ NA on Labour 2013, Article 97).
The employer must record accidents within a labour unit in detail, including the cause, and report it to the Labour Administration Agency (Law No. 43/NA 2013 on Labour, Article 125). 
Companies shall provide assistance to victims of labour accidents and workers who suffer from occupational diseases (including the cost of treatment as determined in the Law on Social Insurance), and payment of normal salary or wages during medical treatment and rehabilitation for up to 6 months (Law No. 43/NA 2013 on Labour, Article 128).
The employer (logging company) shall provide yearly medical examinations for all workers. Logging companies are required to submit specific regulations for workers to the Provincial Agriculture and Forestry Office, the Provincial Forestry Sector, and Timber Exploitation Unit for acknowledgment (Instruction No. 1035/2010 MAF, Article 3).
Safety equipment should be provided to workers for logging in production forest areas (Guideline No. 2157/2006 DOF Part X Article 1). Chainsaws should be equipped with protective features (Guideline No. 2157/2006 DOF Part X, Article 2). 
Requirements of qualifications of personnel include safety competence and first aid skills (Guideline No. 2157/2006 DOF Part XI). Training should be conducted to upgrade knowledge and skills of workers on the use of safety devices (including protective clothing), first aid, and precautions against accidents (Guideline No. 2157/2006 DOF Part XIV). Use of unregistered logging machinery is prohibited (Guideline No. 2157/2006 DOF Part XIII). 
Water tanks in logging camps must be kept clean and covered as a preventive measure against the breeding of mosquitoes that may cause the spread of diseases (Regulation No. 0112/2008 MAF Article 10).
Plantations
The Lao PDR is the most heavily bombed country, per capita, in history. It is heavily contaminated with cluster munitions and other explosive remnants of the Indochina War of the 1960s and 1970s, as well as landmines to a lesser extent. Fourteen of the Lao PDR’s 17 provinces suffer from unexploded ordnance (UXO) contamination; put another way, 98 districts are contaminated, covering an area of about 87,000 km2. 
Development projects (which include commercial development projects such as plantation operations and infrastructure construction) are required to survey and clear UXO before commencing work in accordance with the national standards, and must also allocate funding to cover the cost (Notification #093 of the National Regulatory Authority for UXO/Mine Action Sector in the Lao PDR, 19 November 2012, Clause 1; NRA Announcement No. 004/NRAB, 21 January 2015). 
Completion surveys are to be carried out for all areas of land released for use, either through clearance or technical survey. Information from the completion survey is to be reported in a “Completion Survey Report”, which is to be combined with the handover certificate and other task documentation and submitted to the National Regulatory Authority.
Requirements of pesticide use are detailed in Regulation No. 2860/2010 MAF on the Control of Pesticides in the Lao PDR. These regulations contain a list of banned pesticides (55 kinds), and providers of pesticides should possess safety instructions for their correct handling and use to ensure that they are not causing negative effects to people and the environment (Articles 19 and 21).
Applying pesticides requires farmers to wear protective equipment and to properly follow label instructions to minimise the negative impacts of pesticide exposure (Article 23). Employers should provide employees with proper equipment and training in pesticide application (Article 23). 
Employment of child labour in sectors that pose a threat to health, including activities involving the application of chemicals, is prohibited (Law No. 06/2006 NA on Labour Article 41).
 
Legally required documents
  • Report on completion of UXO survey or UXO clearance
Applicable legislation
VIEW LESS
1.11 Health and safety
Last updated on 2022-03-01 Health issues from handling pesticides  Specified RISK
Often logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from V... VIEW MOREOften logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from Vietnam (apparently these are not certified/licensed as required by Lao regulations).
According to Forest Trends’ 2010 report, almost all loggers in the southern Lao province of Attapeu are Vietnamese seasonal workers. Logging companies and tree plantation holders prefer to employ temporary/seasonal workers instead of full-time workers to avoid liability in case of accidents. Logging jobs in Laos are risky business, and injuries and deaths are not uncommon. Vietnamese interviewees told Forest Trends that injured workers or families of victims receive only minimum compensation from companies (Forest Trends, 2010). 
Plantations
Hunt’s report (2014) also raised questions regarding the welfare of workers engaged in Acacia and Eucalyptus plantations due to the presence of unexploded ordnance (UXO) in plantation areas, and a lack of evidence that concession holders had surveyed and cleared UXO before commencing work as required by Notification #093 of the National Regulatory Authority for the UXO/Mine Action Sector in the Lao PDR, 19 November 2012. This report presented a case study of a company’s employees having been exposed to extreme danger in the workplace through failure to clear unexploded ordnance from plantation sites before plantation operations began.
The Lao Upland Rural Advisory Service (LURAS) states that the government has made no effort to enforce the ban on chemicals of which all uses have been prohibited in Laos under MAF regulation 2860 (2016). Two rounds of nationwide inspections in 2012, conducted by FAO and the Department of Agriculture, found that banned pesticides, such as paraquat and methomyl, were readily available (Vázquez, 2012). 
Researchers pointed out that officials of Provincial and District Agriculture and Forestry offices do not have any records of fertilisers and chemical substances used on plantations, and do not inspect farms or monitor pesticide use (RFA – Radio Free Asia, 14 April 2016; Vázquez, 2012). 
While paraquat is banned in Laos, farmers (including plantation owners) have become accustomed to using it. While its toxicity is low when sprayed in recommended doses, it poses serious health issues to anyone who handles the chemical. A small, undiluted dose can kill a human, and paraquat is blamed for a large number of pesticide-related deaths. It is a major method of suicide in many developing countries, is easily absorbed through the skin, and has been linked with Parkinson's syndrome in farm workers (RFA – Radio Free Asia, 06 May 2016). 
Reports of illness and death from pesticide poisoning are widespread in Xiangkhuang. Nevertheless, farmers, including smallholders of tree plantations, keep spraying with minimal precautions (LURAS, 2016). It has been reported that farmers in Xiangkhouang, an epicentre of rubber plantation, are using about 25 times the amount recommended by the manufacturer (RFA – Radio Free Asia, 06 May 2016). 
Officials of District Agriculture and Forestry Offices, in charge of teaching farmers the appropriate use of pesticides, are not aware of the negative impacts of pesticide exposure, nor of the correct use of pesticides (Vázquez, 2012). 
According to government officials and researchers, pesticide application is often done with a pump sprayer by women and even children, the latter in contravention of labour legislation which prohibits the employment of minors in activities that are dangerous to health (Law No. 43/NA 2013 on Labour, Article 102). 
Adequate personal protective equipment for pesticide applicators is lacking, and even if it were available, farmers may not be able to afford it, and thus, highly hazardous pesticides are used by farmers wearing little or no protection (Vázquez, 2012; LURAS, 2016). When mixing pesticides, the mixing tank was frequently placed in a river with children playing nearby. Some farmers reported buying and splitting pesticides with other farmers, a dangerous practice which increases exposure risks. 
Despite the requirement that pesticide storage facilities be located at least 100m from housing and domestic animal farms (if pesticides are stored in amounts of more than 10 litres or kilograms), some farmers store pesticides inside or under their houses. 
Summary:
For all source types, there is risk of: 
•    Lack of safety equipment and protective gear;
•    Very basic forest camp facilities; and
•    Use of non-certified hauling/winch trucks.
For Plantations there is risk of:
•    Failure to clear unexploded ordinance (UXO)/mines; and
•    Health issues from handling pesticides.
 
References
VIEW LESS
The risk applies to the following source types
  • Plantation timber – concessions
  • Plantation timber – smallholders
Risk mitigation options
Field verification
1
Visit Logging area
Safe handling of pesticides shall be confirmed through observations and interview with staff. Plans regarding handling of pesticides shall be confirmed.
Description of legal requirements
Pesicides shall be handled safely
VIEW MORE
General
The employer must inspect and assess risks to safety and health within the labour unit and workplace regularly, and must report the results of the risk assessment to the Labour Inspection Agency at least once per year (Law No. 43/ NA on Labour 2013, Articles 119 and 122). 
The employer is obliged to supply individual safety gear to employees in full and in good condition according to international standards; to ensure working conditions are safe, and that there is appropriate lighting, supply of drinking water and washing water, showers, toilets etc., a room set aside for the storage of toxic substances, and other measures against electric shocks, fire, etc.; to facilitate medical examinations of employees at least once a year, and to provide an on-site first aid kit (Law No. 43/ NA on Labour 2013, Articles 43 and 119). 
Workplaces with 100 employees or fewer must appoint a person responsible for the safety and health of employees; workplaces with more than 100 employees must establish a health and safety unit or committee. Remote workplaces with at least 50 employees must hire one medical officer; for fewer than 50 employees, the workplace must include a first aid kit and have a person trained in first aid on site (Law No. 43/ NA on Labour 2013, Article 123). 
Legislation prohibits the employment of minors in activities that are unsafe, or dangerous to health (Law No. 43/ NA on Labour 2013, Article 102). An employer cannot require a pregnant woman or woman with a child younger than one year old to undertake dangerous work (Law No. 43/ NA on Labour 2013, Article 97).
The employer must record accidents within a labour unit in detail, including the cause, and report it to the Labour Administration Agency (Law No. 43/NA 2013 on Labour, Article 125). 
Companies shall provide assistance to victims of labour accidents and workers who suffer from occupational diseases (including the cost of treatment as determined in the Law on Social Insurance), and payment of normal salary or wages during medical treatment and rehabilitation for up to 6 months (Law No. 43/NA 2013 on Labour, Article 128).
The employer (logging company) shall provide yearly medical examinations for all workers. Logging companies are required to submit specific regulations for workers to the Provincial Agriculture and Forestry Office, the Provincial Forestry Sector, and Timber Exploitation Unit for acknowledgment (Instruction No. 1035/2010 MAF, Article 3).
Safety equipment should be provided to workers for logging in production forest areas (Guideline No. 2157/2006 DOF Part X Article 1). Chainsaws should be equipped with protective features (Guideline No. 2157/2006 DOF Part X, Article 2). 
Requirements of qualifications of personnel include safety competence and first aid skills (Guideline No. 2157/2006 DOF Part XI). Training should be conducted to upgrade knowledge and skills of workers on the use of safety devices (including protective clothing), first aid, and precautions against accidents (Guideline No. 2157/2006 DOF Part XIV). Use of unregistered logging machinery is prohibited (Guideline No. 2157/2006 DOF Part XIII). 
Water tanks in logging camps must be kept clean and covered as a preventive measure against the breeding of mosquitoes that may cause the spread of diseases (Regulation No. 0112/2008 MAF Article 10).
Plantations
The Lao PDR is the most heavily bombed country, per capita, in history. It is heavily contaminated with cluster munitions and other explosive remnants of the Indochina War of the 1960s and 1970s, as well as landmines to a lesser extent. Fourteen of the Lao PDR’s 17 provinces suffer from unexploded ordnance (UXO) contamination; put another way, 98 districts are contaminated, covering an area of about 87,000 km2. 
Development projects (which include commercial development projects such as plantation operations and infrastructure construction) are required to survey and clear UXO before commencing work in accordance with the national standards, and must also allocate funding to cover the cost (Notification #093 of the National Regulatory Authority for UXO/Mine Action Sector in the Lao PDR, 19 November 2012, Clause 1; NRA Announcement No. 004/NRAB, 21 January 2015). 
Completion surveys are to be carried out for all areas of land released for use, either through clearance or technical survey. Information from the completion survey is to be reported in a “Completion Survey Report”, which is to be combined with the handover certificate and other task documentation and submitted to the National Regulatory Authority.
Requirements of pesticide use are detailed in Regulation No. 2860/2010 MAF on the Control of Pesticides in the Lao PDR. These regulations contain a list of banned pesticides (55 kinds), and providers of pesticides should possess safety instructions for their correct handling and use to ensure that they are not causing negative effects to people and the environment (Articles 19 and 21).
Applying pesticides requires farmers to wear protective equipment and to properly follow label instructions to minimise the negative impacts of pesticide exposure (Article 23). Employers should provide employees with proper equipment and training in pesticide application (Article 23). 
Employment of child labour in sectors that pose a threat to health, including activities involving the application of chemicals, is prohibited (Law No. 06/2006 NA on Labour Article 41).
 
Legally required documents
  • Report on completion of UXO survey or UXO clearance
Applicable legislation
VIEW LESS
1.11 Health and safety
Last updated on 2022-03-01 Lack of labour contracts  Specified RISK
Often logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from V... VIEW MOREOften logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from Vietnam (apparently these are not certified/licensed as required by Lao regulations).
According to Forest Trends’ 2010 report, almost all loggers in the southern Lao province of Attapeu are Vietnamese seasonal workers. Logging companies and tree plantation holders prefer to employ temporary/seasonal workers instead of full-time workers to avoid liability in case of accidents. Logging jobs in Laos are risky business, and injuries and deaths are not uncommon. Vietnamese interviewees told Forest Trends that injured workers or families of victims receive only minimum compensation from companies (Forest Trends, 2010). 
Plantations
Hunt’s report (2014) also raised questions regarding the welfare of workers engaged in Acacia and Eucalyptus plantations due to the presence of unexploded ordnance (UXO) in plantation areas, and a lack of evidence that concession holders had surveyed and cleared UXO before commencing work as required by Notification #093 of the National Regulatory Authority for the UXO/Mine Action Sector in the Lao PDR, 19 November 2012. This report presented a case study of a company’s employees having been exposed to extreme danger in the workplace through failure to clear unexploded ordnance from plantation sites before plantation operations began.
The Lao Upland Rural Advisory Service (LURAS) states that the government has made no effort to enforce the ban on chemicals of which all uses have been prohibited in Laos under MAF regulation 2860 (2016). Two rounds of nationwide inspections in 2012, conducted by FAO and the Department of Agriculture, found that banned pesticides, such as paraquat and methomyl, were readily available (Vázquez, 2012). 
Researchers pointed out that officials of Provincial and District Agriculture and Forestry offices do not have any records of fertilisers and chemical substances used on plantations, and do not inspect farms or monitor pesticide use (RFA – Radio Free Asia, 14 April 2016; Vázquez, 2012). 
While paraquat is banned in Laos, farmers (including plantation owners) have become accustomed to using it. While its toxicity is low when sprayed in recommended doses, it poses serious health issues to anyone who handles the chemical. A small, undiluted dose can kill a human, and paraquat is blamed for a large number of pesticide-related deaths. It is a major method of suicide in many developing countries, is easily absorbed through the skin, and has been linked with Parkinson's syndrome in farm workers (RFA – Radio Free Asia, 06 May 2016). 
Reports of illness and death from pesticide poisoning are widespread in Xiangkhuang. Nevertheless, farmers, including smallholders of tree plantations, keep spraying with minimal precautions (LURAS, 2016). It has been reported that farmers in Xiangkhouang, an epicentre of rubber plantation, are using about 25 times the amount recommended by the manufacturer (RFA – Radio Free Asia, 06 May 2016). 
Officials of District Agriculture and Forestry Offices, in charge of teaching farmers the appropriate use of pesticides, are not aware of the negative impacts of pesticide exposure, nor of the correct use of pesticides (Vázquez, 2012). 
According to government officials and researchers, pesticide application is often done with a pump sprayer by women and even children, the latter in contravention of labour legislation which prohibits the employment of minors in activities that are dangerous to health (Law No. 43/NA 2013 on Labour, Article 102). 
Adequate personal protective equipment for pesticide applicators is lacking, and even if it were available, farmers may not be able to afford it, and thus, highly hazardous pesticides are used by farmers wearing little or no protection (Vázquez, 2012; LURAS, 2016). When mixing pesticides, the mixing tank was frequently placed in a river with children playing nearby. Some farmers reported buying and splitting pesticides with other farmers, a dangerous practice which increases exposure risks. 
Despite the requirement that pesticide storage facilities be located at least 100m from housing and domestic animal farms (if pesticides are stored in amounts of more than 10 litres or kilograms), some farmers store pesticides inside or under their houses. 
Summary:
For all source types, there is risk of: 
•    Lack of safety equipment and protective gear;
•    Very basic forest camp facilities; and
•    Use of non-certified hauling/winch trucks.
For Plantations there is risk of:
•    Failure to clear unexploded ordinance (UXO)/mines; and
•    Health issues from handling pesticides.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Employment contract
The presence of labor contracts shall be verified during onsite visits.
Description of legal requirements
Contracts shall be in place for workers.
VIEW MORE
General
The employer must inspect and assess risks to safety and health within the labour unit and workplace regularly, and must report the results of the risk assessment to the Labour Inspection Agency at least once per year (Law No. 43/ NA on Labour 2013, Articles 119 and 122). 
The employer is obliged to supply individual safety gear to employees in full and in good condition according to international standards; to ensure working conditions are safe, and that there is appropriate lighting, supply of drinking water and washing water, showers, toilets etc., a room set aside for the storage of toxic substances, and other measures against electric shocks, fire, etc.; to facilitate medical examinations of employees at least once a year, and to provide an on-site first aid kit (Law No. 43/ NA on Labour 2013, Articles 43 and 119). 
Workplaces with 100 employees or fewer must appoint a person responsible for the safety and health of employees; workplaces with more than 100 employees must establish a health and safety unit or committee. Remote workplaces with at least 50 employees must hire one medical officer; for fewer than 50 employees, the workplace must include a first aid kit and have a person trained in first aid on site (Law No. 43/ NA on Labour 2013, Article 123). 
Legislation prohibits the employment of minors in activities that are unsafe, or dangerous to health (Law No. 43/ NA on Labour 2013, Article 102). An employer cannot require a pregnant woman or woman with a child younger than one year old to undertake dangerous work (Law No. 43/ NA on Labour 2013, Article 97).
The employer must record accidents within a labour unit in detail, including the cause, and report it to the Labour Administration Agency (Law No. 43/NA 2013 on Labour, Article 125). 
Companies shall provide assistance to victims of labour accidents and workers who suffer from occupational diseases (including the cost of treatment as determined in the Law on Social Insurance), and payment of normal salary or wages during medical treatment and rehabilitation for up to 6 months (Law No. 43/NA 2013 on Labour, Article 128).
The employer (logging company) shall provide yearly medical examinations for all workers. Logging companies are required to submit specific regulations for workers to the Provincial Agriculture and Forestry Office, the Provincial Forestry Sector, and Timber Exploitation Unit for acknowledgment (Instruction No. 1035/2010 MAF, Article 3).
Safety equipment should be provided to workers for logging in production forest areas (Guideline No. 2157/2006 DOF Part X Article 1). Chainsaws should be equipped with protective features (Guideline No. 2157/2006 DOF Part X, Article 2). 
Requirements of qualifications of personnel include safety competence and first aid skills (Guideline No. 2157/2006 DOF Part XI). Training should be conducted to upgrade knowledge and skills of workers on the use of safety devices (including protective clothing), first aid, and precautions against accidents (Guideline No. 2157/2006 DOF Part XIV). Use of unregistered logging machinery is prohibited (Guideline No. 2157/2006 DOF Part XIII). 
Water tanks in logging camps must be kept clean and covered as a preventive measure against the breeding of mosquitoes that may cause the spread of diseases (Regulation No. 0112/2008 MAF Article 10).
Plantations
The Lao PDR is the most heavily bombed country, per capita, in history. It is heavily contaminated with cluster munitions and other explosive remnants of the Indochina War of the 1960s and 1970s, as well as landmines to a lesser extent. Fourteen of the Lao PDR’s 17 provinces suffer from unexploded ordnance (UXO) contamination; put another way, 98 districts are contaminated, covering an area of about 87,000 km2. 
Development projects (which include commercial development projects such as plantation operations and infrastructure construction) are required to survey and clear UXO before commencing work in accordance with the national standards, and must also allocate funding to cover the cost (Notification #093 of the National Regulatory Authority for UXO/Mine Action Sector in the Lao PDR, 19 November 2012, Clause 1; NRA Announcement No. 004/NRAB, 21 January 2015). 
Completion surveys are to be carried out for all areas of land released for use, either through clearance or technical survey. Information from the completion survey is to be reported in a “Completion Survey Report”, which is to be combined with the handover certificate and other task documentation and submitted to the National Regulatory Authority.
Requirements of pesticide use are detailed in Regulation No. 2860/2010 MAF on the Control of Pesticides in the Lao PDR. These regulations contain a list of banned pesticides (55 kinds), and providers of pesticides should possess safety instructions for their correct handling and use to ensure that they are not causing negative effects to people and the environment (Articles 19 and 21).
Applying pesticides requires farmers to wear protective equipment and to properly follow label instructions to minimise the negative impacts of pesticide exposure (Article 23). Employers should provide employees with proper equipment and training in pesticide application (Article 23). 
Employment of child labour in sectors that pose a threat to health, including activities involving the application of chemicals, is prohibited (Law No. 06/2006 NA on Labour Article 41).
 
Legally required documents
  • Report on completion of UXO survey or UXO clearance
Applicable legislation
VIEW LESS
1.11 Health and safety
Last updated on 2022-03-01 Risk of priority of employment not being giving to local Lao citizens  Specified RISK
Often logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from V... VIEW MOREOften logging crews do not have safety equipment and live in very basic conditions in forest camps. This was recorded by Jonsson (2006) during an inspection of a forest site where the logging crew had neither safety equipment nor protective gear, and where conditions at the camp were very rudimentary (their shelter was a tarpaulin with no hygiene/sanitation facilities). Usually, Vietnamese loggers use their own hauling/winch trucks brought from Vietnam (apparently these are not certified/licensed as required by Lao regulations).
According to Forest Trends’ 2010 report, almost all loggers in the southern Lao province of Attapeu are Vietnamese seasonal workers. Logging companies and tree plantation holders prefer to employ temporary/seasonal workers instead of full-time workers to avoid liability in case of accidents. Logging jobs in Laos are risky business, and injuries and deaths are not uncommon. Vietnamese interviewees told Forest Trends that injured workers or families of victims receive only minimum compensation from companies (Forest Trends, 2010). 
Plantations
Hunt’s report (2014) also raised questions regarding the welfare of workers engaged in Acacia and Eucalyptus plantations due to the presence of unexploded ordnance (UXO) in plantation areas, and a lack of evidence that concession holders had surveyed and cleared UXO before commencing work as required by Notification #093 of the National Regulatory Authority for the UXO/Mine Action Sector in the Lao PDR, 19 November 2012. This report presented a case study of a company’s employees having been exposed to extreme danger in the workplace through failure to clear unexploded ordnance from plantation sites before plantation operations began.
The Lao Upland Rural Advisory Service (LURAS) states that the government has made no effort to enforce the ban on chemicals of which all uses have been prohibited in Laos under MAF regulation 2860 (2016). Two rounds of nationwide inspections in 2012, conducted by FAO and the Department of Agriculture, found that banned pesticides, such as paraquat and methomyl, were readily available (Vázquez, 2012). 
Researchers pointed out that officials of Provincial and District Agriculture and Forestry offices do not have any records of fertilisers and chemical substances used on plantations, and do not inspect farms or monitor pesticide use (RFA – Radio Free Asia, 14 April 2016; Vázquez, 2012). 
While paraquat is banned in Laos, farmers (including plantation owners) have become accustomed to using it. While its toxicity is low when sprayed in recommended doses, it poses serious health issues to anyone who handles the chemical. A small, undiluted dose can kill a human, and paraquat is blamed for a large number of pesticide-related deaths. It is a major method of suicide in many developing countries, is easily absorbed through the skin, and has been linked with Parkinson's syndrome in farm workers (RFA – Radio Free Asia, 06 May 2016). 
Reports of illness and death from pesticide poisoning are widespread in Xiangkhuang. Nevertheless, farmers, including smallholders of tree plantations, keep spraying with minimal precautions (LURAS, 2016). It has been reported that farmers in Xiangkhouang, an epicentre of rubber plantation, are using about 25 times the amount recommended by the manufacturer (RFA – Radio Free Asia, 06 May 2016). 
Officials of District Agriculture and Forestry Offices, in charge of teaching farmers the appropriate use of pesticides, are not aware of the negative impacts of pesticide exposure, nor of the correct use of pesticides (Vázquez, 2012). 
According to government officials and researchers, pesticide application is often done with a pump sprayer by women and even children, the latter in contravention of labour legislation which prohibits the employment of minors in activities that are dangerous to health (Law No. 43/NA 2013 on Labour, Article 102). 
Adequate personal protective equipment for pesticide applicators is lacking, and even if it were available, farmers may not be able to afford it, and thus, highly hazardous pesticides are used by farmers wearing little or no protection (Vázquez, 2012; LURAS, 2016). When mixing pesticides, the mixing tank was frequently placed in a river with children playing nearby. Some farmers reported buying and splitting pesticides with other farmers, a dangerous practice which increases exposure risks. 
Despite the requirement that pesticide storage facilities be located at least 100m from housing and domestic animal farms (if pesticides are stored in amounts of more than 10 litres or kilograms), some farmers store pesticides inside or under their houses. 
Summary:
For all source types, there is risk of: 
•    Lack of safety equipment and protective gear;
•    Very basic forest camp facilities; and
•    Use of non-certified hauling/winch trucks.
For Plantations there is risk of:
•    Failure to clear unexploded ordinance (UXO)/mines; and
•    Health issues from handling pesticides.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Local villages
Receive input from local villagers or stakeholder on whether employment has been open to Lao nationals and whether it is onsidered fair.
Description of legal requirements
Priority of employemnt should be given to Lao citizens.
VIEW MORE
General
The employer must inspect and assess risks to safety and health within the labour unit and workplace regularly, and must report the results of the risk assessment to the Labour Inspection Agency at least once per year (Law No. 43/ NA on Labour 2013, Articles 119 and 122). 
The employer is obliged to supply individual safety gear to employees in full and in good condition according to international standards; to ensure working conditions are safe, and that there is appropriate lighting, supply of drinking water and washing water, showers, toilets etc., a room set aside for the storage of toxic substances, and other measures against electric shocks, fire, etc.; to facilitate medical examinations of employees at least once a year, and to provide an on-site first aid kit (Law No. 43/ NA on Labour 2013, Articles 43 and 119). 
Workplaces with 100 employees or fewer must appoint a person responsible for the safety and health of employees; workplaces with more than 100 employees must establish a health and safety unit or committee. Remote workplaces with at least 50 employees must hire one medical officer; for fewer than 50 employees, the workplace must include a first aid kit and have a person trained in first aid on site (Law No. 43/ NA on Labour 2013, Article 123). 
Legislation prohibits the employment of minors in activities that are unsafe, or dangerous to health (Law No. 43/ NA on Labour 2013, Article 102). An employer cannot require a pregnant woman or woman with a child younger than one year old to undertake dangerous work (Law No. 43/ NA on Labour 2013, Article 97).
The employer must record accidents within a labour unit in detail, including the cause, and report it to the Labour Administration Agency (Law No. 43/NA 2013 on Labour, Article 125). 
Companies shall provide assistance to victims of labour accidents and workers who suffer from occupational diseases (including the cost of treatment as determined in the Law on Social Insurance), and payment of normal salary or wages during medical treatment and rehabilitation for up to 6 months (Law No. 43/NA 2013 on Labour, Article 128).
The employer (logging company) shall provide yearly medical examinations for all workers. Logging companies are required to submit specific regulations for workers to the Provincial Agriculture and Forestry Office, the Provincial Forestry Sector, and Timber Exploitation Unit for acknowledgment (Instruction No. 1035/2010 MAF, Article 3).
Safety equipment should be provided to workers for logging in production forest areas (Guideline No. 2157/2006 DOF Part X Article 1). Chainsaws should be equipped with protective features (Guideline No. 2157/2006 DOF Part X, Article 2). 
Requirements of qualifications of personnel include safety competence and first aid skills (Guideline No. 2157/2006 DOF Part XI). Training should be conducted to upgrade knowledge and skills of workers on the use of safety devices (including protective clothing), first aid, and precautions against accidents (Guideline No. 2157/2006 DOF Part XIV). Use of unregistered logging machinery is prohibited (Guideline No. 2157/2006 DOF Part XIII). 
Water tanks in logging camps must be kept clean and covered as a preventive measure against the breeding of mosquitoes that may cause the spread of diseases (Regulation No. 0112/2008 MAF Article 10).
Plantations
The Lao PDR is the most heavily bombed country, per capita, in history. It is heavily contaminated with cluster munitions and other explosive remnants of the Indochina War of the 1960s and 1970s, as well as landmines to a lesser extent. Fourteen of the Lao PDR’s 17 provinces suffer from unexploded ordnance (UXO) contamination; put another way, 98 districts are contaminated, covering an area of about 87,000 km2. 
Development projects (which include commercial development projects such as plantation operations and infrastructure construction) are required to survey and clear UXO before commencing work in accordance with the national standards, and must also allocate funding to cover the cost (Notification #093 of the National Regulatory Authority for UXO/Mine Action Sector in the Lao PDR, 19 November 2012, Clause 1; NRA Announcement No. 004/NRAB, 21 January 2015). 
Completion surveys are to be carried out for all areas of land released for use, either through clearance or technical survey. Information from the completion survey is to be reported in a “Completion Survey Report”, which is to be combined with the handover certificate and other task documentation and submitted to the National Regulatory Authority.
Requirements of pesticide use are detailed in Regulation No. 2860/2010 MAF on the Control of Pesticides in the Lao PDR. These regulations contain a list of banned pesticides (55 kinds), and providers of pesticides should possess safety instructions for their correct handling and use to ensure that they are not causing negative effects to people and the environment (Articles 19 and 21).
Applying pesticides requires farmers to wear protective equipment and to properly follow label instructions to minimise the negative impacts of pesticide exposure (Article 23). Employers should provide employees with proper equipment and training in pesticide application (Article 23). 
Employment of child labour in sectors that pose a threat to health, including activities involving the application of chemicals, is prohibited (Law No. 06/2006 NA on Labour Article 41).
 
Legally required documents
  • Report on completion of UXO survey or UXO clearance
Applicable legislation
VIEW LESS
1.12 Legal employment
Last updated on 2022-03-01 Risk that workers do not nor receive salary  Specified RISK
It is common for plantation workers not to have a valid, signed labour contract, and for salaries not to be paid on time.In his research paper on the expansion of the rubber plantations of a Vietnamese corporation (HAGL) in Attapeu province, Kenney-Lazar (2010) concludes that work on rubber plantations is so demanding and unfair in the eyes of the villagers that they will only work when they have to, usually only two or three times per year. The ... VIEW MOREIt is common for plantation workers not to have a valid, signed labour contract, and for salaries not to be paid on time.
In his research paper on the expansion of the rubber plantations of a Vietnamese corporation (HAGL) in Attapeu province, Kenney-Lazar (2010) concludes that work on rubber plantations is so demanding and unfair in the eyes of the villagers that they will only work when they have to, usually only two or three times per year. The villagers complained that the work was too difficult and that the duration of the working day was too long for such low wages. Some even suspected that the company was making the work so difficult for the villagers on purpose in order to prevent them from coming to work, as this would then give the company an excuse to evade Lao labour Laws requiring priority be given to Lao citizens in recruiting and hiring employees, thus allowing them to import Vietnamese labour.
The biggest complaint of villagers was concerning the payment process. The company usually pays the supervisor (usually a Vietnamese employee of the company, rarely Lao, and never a member of a local minority) for all of the group members’ wages, and the supervisor was then responsible for paying each worker. Since such payments are not regulated, this opens up a significant space for corruption on the part of the supervisor. Sometimes the supervisor would pay late. There were also cases of employees not getting paid at all. 
Similar cases in which a Chinese rubber company paid nothing to local workers were also reported in a study on the rubber plantation boom in Luang Namtha. The company manager explained that it was agreed with the villagers that payment would be given in a lump sum at the end of the year, so it was all a big misunderstanding. The district government, in response to the villagers complaints, ordered the villagers to pay to have their case addressed (Shi, 2008). 
A Forest Trends’ report (2010) stressed that Lao villagers are largely excluded from employment opportunities in Vietnamese companies. Vietnamese companies do not want to employ Lao labourers, particularly ethnic minority villagers, because Lao workers are considered unskilled, ineffective, less diligent than Vietnamese workers, and unable to communicate with Vietnamese managers. As a result, almost all the loggers are Vietnamese people brought from Vietnam during the dry season (October to May). Those who have a labour contract are eligible for social benefits, such as social and health insurance, as stipulated in Vietnamese labour Law. However, some loggers do not have a labour contract, and thus are not eligible for benefits other than payment for their work. The President of the Vietnamese-Lao Association in Attapeu province, cited in the Forest Trends’ report (2010), stated that there were about 5,000 Vietnamese workers in Attapeu, many of whom had entered Laos illegally. 
The Lao PDR has not ratified International Labour Organisation Conventions 87 and 98 covering trade union rights on freedom of association and collective bargaining. According to Fry (2008) the lack of democratisation has created a vulnerable situation for employees in Laos. Wages in Laos are very low, putting the majority of workers in a difficult position. There are legal rights to organise, but in reality there are extremely limited possibilities for associations, labour unions and collective bargaining. 
Summary:
For all source types, there is risk of:
•    Lack of salary payment or payment on time;
•    Lack of labour contracts; and
•    Risk of priority not being giving to local Lao citizens.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Payslips and payment receipts
Review payslips and payment receipts during onsite audits
Description of legal requirements
Salary shall be paid.
VIEW MORE
Law No. 43/NA 2013 on Labour is the cornerstone of the legal framework on employment in Laos and covers the following areas: 
•    General principles and employer obligations; 
•    Internal working conditions; 
•    Weekly rest, public holidays, annual and sick leave, maternity leave and maternity allowance; 
•    Working hours and overtime;
•    Salary and payment of wages
•    Form and duration of employment contracts; 
•    Termination of contracts and severance pay;
•    Rights and obligations of foreign labour;
•    Employment of women and children; 
•    Social insurance and retirement;
•    Employment of minors and forced labour;
•    Resolution of labour disputes;
•    Employer or social insurance implementation agency responsibility for care of victims of labour accidents and occupational diseases, and the obligation to pay an allowance to such victims. 
Foreign investors shall give priority to Lao citizens in recruiting and hiring employees, yet reserving the right to employ skilled and expert foreign personnel when necessary with the approval of the relevant government authority (Law No. 43/NA 2013 on Labour, Article 68; Law on Foreign Investment, Article 11). 
Approval must be obtained from the Ministry of Labour and Social Welfare to employ foreign workers (Law No. 43/NA 2013 on Labour, Article 156).
The acceptable ratio for foreign labour within a labour unit must be as follows: 15% percent of the total number of Lao labourers within a labour unit for manual workers, and up to 25% for skilled employees. For large government projects lasting up to five years, the use of foreign labour is in accordance with the agreement between the government and the project owner.
Foreign employees must meet several requirements to be employed in the Lao PDR, including being over the age of 20 years, possessing the skills and professional level required for the position, having no criminal record, and being in good health). Foreign employees may work under a contract for 12 months, which may be extended by 12 months up to a maximum of five years in total (Law No. 43/NA 2013 on Labour, Article 45).
The employment of unauthorised foreign workers for logging in production forests is prohibited (Guideline No. 2157/2006 DOF Part XIII). Agreement No. 32/PM (2002), Article 5 calls for an “[i]ncrease [in] the effectiveness of [the] controlling of foreign labour, logging vehicles and machineries, timber hauling and transport by which there must be strict rules and measures of controlling”. 
The workplace must have its own internal regulations, and these must not conflict with the Labour Law. These regulations must be approved by the Labour Administration Authority. The Labour Administration Authority has a template of the Internal Regulations that companies are encouraged to use (Law No. 43/NA on Labour 2013, Article 122). 
The employer is obliged to provide training to develop their employees’ skills and knowledge (Law No. 43/NA 2013 on Labour, Article 28).
‘Youth labour’ means employees older than 12 but younger than 18. Employers are prohibited from employing persons under the age of twelve years. Children of ages 12 and 13 may be employed for “light work”, provided that they are not required to undertake work that is unsafe, interferes with their schooling or vocational training, or is dangerous to their bodily or psychological health.
Employees under the age of eighteen years are prohibited from working overtime (Law No. 43/NA 2013 on Labour Articles 101 and 141). Employers must keep records of youth employees, and these must be supplied to the labour inspection authorities (Law No. 43/NA 2013 on Labour Articles 102 and 141). 
A woman is entitled to at least 105 calendar days of fully paid maternity leave, at least 45 days of which must be after the birth. During the year after birth, the woman is entitled to have one hour a day of rest in order to feed and take care of the child. If a woman suffers a miscarriage, she is entitled to leave on full pay for a period determined by a doctor. On the birth of her baby, a woman is entitled to an allowance as specified in the Social Security Law (Law No. 43/NA 2013 on Labour, Article 98).
An employer cannot require a pregnant woman or woman with a child younger than one year old to carry heavy loads, stand for long periods, undertake dangerous work or work at night, nor to work overtime or on a day of rest. If necessary, the employer shall temporarily assign the employee to more suitable work during this period, but must pay her the normal salary (Law No. 43/NA 2013 on Labour Article, 97). 
The employer must pay at least the minimum wage set by the government (Law No. 43/NA 2013 on Labour, Article 105). 
Wages are to be paid at least once per month (Law No. 43/NA 2013 on Labour, Article 110).
Deductions from an employee’s salary are permissible to compensate for damage to the property of the employer to the value of the item damaged. If the employee is not able to repay the amount owing, the compensation must be deducted from the employee’s salary or wage over time, but these deductions must not exceed 20% of the employee’s salary or wage.
The employer has the duty to declare the income which is paid to the employee to the Tax Department to deduct personal income tax (Law No. 43/NA 2013 on Labour, Article 113).
Every employer shall make payments to the National Social Security System with respect to their employees in accordance with the Social Security Law governing social security payments (Law No. 43/NA 2013 on Labour, Article 71).
Normal hours of work are 6 days a week, no longer than 8 hours a day, or 48 hours a week (Law No. 43/NA 2013 on Labour, Articles 51 and 52). 
The employer may request an employee to work overtime. When overtime is necessary for more than 45 hours per month, or 3 hours per day, the employer must request particular authorisation from the Labour Administration Agency, and either the trade union, worker’s representative, or the majority of employees in the labour unit. Overtime cannot be worked for more than 4 consecutive days (except in the case of natural disaster) (Law No. 43/NA 2013 on Labour, Article 53).
Employment contracts must be made in writing in cases where one or both parties are a legal entity or organisation (Law No. 43/NA 2013 on Labour Article 77). The contract can either be for a fixed term or an indefinite period. If a fixed term contract, including any extensions, is longer than three years, the contract shall be deemed to be an indefinite employment contract.
If the parties wish to extend the term of a fixed term employment contract, they must notify each other 15 days before its expiry, with the extension commencing within 60 days of the date of expiration of the contract (Law No. 43/NA 2013 on Labour, Article 76).
The contract must stipulate the place of work, the work to be performed, the level of wages, the duration of the contract, the commencement date, the expiry date and any probationary period, workings days, rest days and holidays, any welfare entitlements of the worker, the benefits the employee will receive at the expiration of the employment contract, and any other matters agreed between the parties (Law No. 43/NA 2013 on Labour, Article 78).
Employee representatives are allowed to participate in labour dispute resolution, collective bargaining, the creation of employment contracts and internal regulations of labour units, recommend improvements to wages, work conditions, and social insurance systems (Law No. 43/NA 2013 on Labour, Article 167). In case a labour dispute cannot be resolved, strikes can be organised based on the Law and regulations (Law No. 43/NA 2013, Article 154). 
For labour units that include grassroots trade union groups, it is held that the head of the grassroots trade union group shall be the employees’ representative. In cases where a labour unit has not yet established a grassroots labour trade union, the employees may appoint their own representative. Workplaces with 10 to 50 employees must have an employees’ representative; workplaces with 51 to 100 employees must appoint two representatives, and one additional representative for every further 100 employees (Law No. 43/NA 2013 on Labour, Article 166). 
 
Legally required documents
  • Study on socio-economic information and appropriateness to natural conditions, land tenure rights
  • Employment contract
Applicable legislation
VIEW LESS
1.13 Customary rights
Last updated on 2022-03-01 Local communities are not adequately compensated when communal lands are re-allocated to a company  Specified RISK
For the majority of rural citizens of the Lao PDR, tenure is extremely insecure. The country’s Constitution (Article 15), dated August 15, 1991 requires that citizens hold “rights to using, transferring, and inheriting [land] in accordance with the Law.” However, in practice, the government still claims ownership of most forest land, maintaining a highly centralised system of forest governance with inadequate recognition of customary tenure... VIEW MOREFor the majority of rural citizens of the Lao PDR, tenure is extremely insecure. The country’s Constitution (Article 15), dated August 15, 1991 requires that citizens hold “rights to using, transferring, and inheriting [land] in accordance with the Law.” However, in practice, the government still claims ownership of most forest land, maintaining a highly centralised system of forest governance with inadequate recognition of customary tenure rights, leaving millions of forest-dependent communities vulnerable to land expropriation. State views often conflict with villagers’ notions of customary rights and authority.
The National Export Strategy (2011-2015) prioritises a foreign investment-oriented economic growth model through nine sectors with the potential to generate revenue, including organic plantation agriculture, encompassing eucalyptus and acacia (for paper, pulp, and fiber), sugarcane, and rubber. The strategy targets foreign investors who bring new technology and market access, while acknowledging that the large-scale investment model may negatively impact rural citizens. This approach is best illustrated by the shift from reliance on small-scale, local production and the logging of natural forests and lower-value products, to the establishment of commoditised export-oriented industrial agriculture and forestry plantations. 
It is worth specific note that the process of land allocation for production of export commodities is unstable and unclear, potentially resulting in conflicts of interest between local communities and investors.
Consequently, the Lao PDR has allocated a rapidly expanding area to large-scale foreign direct investment (FDI) projects in agriculture, forestry, and other sectors promoted under the National Export Strategy. 
Screening of the concession inventory data suggests that currently about five million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties (Wellmann, 2012). This area amounts to 21% of the total territory of the country. Roughly 13% of all villages in the Lao PDR have at least one concession within their village boundaries (these concessions can relate to plantations, but also to mini natural gas and hydropower where forest conversion would have occurred). Eighty-five percent of all investment in agricultural concessions comes from foreign investors. In 2012, the International Food Policy Research Institute listed Laos among seven countries in the world in which international land deals account for more than 10 percent of the total agricultural area (IRIN, 22 May 2014). 
Most of the concessions (tree plantations, hydropower dams, mining and geological prospecting) are granted within forest areas, which results in a high rate of forest conversion, and deprivation of non-timber forest products critically important to the subsistence of the rural population.
Laos has about 1.6 million land plots, and so far about 620,000 of these plots have been titled. Of these, 300,000 are owned by the State, while the rest is land belonging to villagers. The government had planned to complete a land survey and allocation of lands to villagers, as well as a land title project by 2015 (Vientiane Times, 21 August 2012). 
Rights to manage village forests are often not secured to villagers. Commonly, borders of village lands are drawn on a single “hard copy” – a billboard in a village – and if/when this is lost or damaged, the village loses its only source of information on village forests (Kenney-Lazar, 2010). 
Despite the allocation of use rights over forest and other communal lands, communal lands are not compensated for when re-allocated to companies, despite legislation requiring compensation to ensure that people are not left worse off due to a project. Communal lands have no land title and are considered to be within the realm of state ownership. Public or state ownership means that such lands can be easily given away without any sort of payment for the loss of resource entitlements (Kenney-Lazar, 2010). The lack of statutory recognition of traditional land rights before land is opened up to investors often means that local communities have little or no political recourse to defend their rights and to prevent the loss of both non-legally tenured communal and legally tenured individual land in the face of land concessions. 
Accordingly, land use plans and associated formal use rights are often totally ignored by concessionaries, and researchers have reported cases of conversion of every type of allocated forest (conservation, production, protection, regeneration, and cemetery forests) and land category (agriculture, grazing, and industrial tree land) (Hunt, 2014; Kenney-Lazar, 2010).
Land concessions have come under criticism for ignoring village customary forest and land tenure rights, and for depleting the resources of forest-dependent communities. Land disputes were the top issue of concern raised by members of the public who called the National Assembly hotline during the session of the National Assembly in June 2012 (Vientiane Times, 21 August 2012).
Researchers and activists point out that land deals in Laos, despite decent Laws, are carried out with little transparency or accountability, and with a lack of equitable consultation with affected local communities (Kenney-Lazar, 2010, 2015; Hunt, 2014). Conflicts often arise due to limited, inadequate, or non-existent compensation for acquired land being paid by project owners to the land use right holders. 
Many villagers in Laos have a high degree of dependency on NTFP and still practice shifting cultivation, which requires large plots of land to allow some soil to lie fallow to regenerate while other sections are planted – a system that is “completely different” from the settled farming of the lowland areas where displaced villagers are resettled. When the government relocates farmers to consolidated villages near towns and cities, families in some cases have been given as little as 0.75 hectares of land – roughly half what they traditionally use for farming (IRIN, 22 May 2014).
Kenney-Lazar (2010) reported cases of farmers accepting the low price that a Vietnamese rubber corporation offered out of fear that if they refused they would not receive any money at all.
Government officials often fail to formalise the tenure complaints of villagers as they are involved in the acquisition of village land (through bribes from concessionaries). 
The typical grievance process in Laos is that the headman of a village raises any complaint of the villagers with the district government. However, these are usually the same district government officials who brought the company to the community in the first place. As such, it is highly likely that government officials will hesitate to formalise the tenure complaints of villagers when they themselves have been involved in the acquisition of village land. For instance, a company was accused of making monthly payments to both district and provincial government officials, ostensibly as a per-diem payment, for being on the company committee; this creates a serious conflict of interest, and it is entirely predictable under such circumstances that any grievance mechanism would be corrupted (Hunt, 2014).
Villagers in Attapeu told Global Witness that armed soldiers, hired by a Vietnamese rubber corporation, regularly prevent them from entering the forest in at least one concession, and threaten them with arrest. These soldiers also protected logging operations inside the concession area, where luxury timber, including rosewood, was being cleared and trucked across the border to Vietnam as round logs (Global Witness, 2013). Along with force and pressure, the company used material incentives to influence the decisions of the headmen of a village, as well as government officials (Kenney-Lazar, 2010).
In an attempt to properly regulate the existing mining and tree plantation investment projects, in June 2012 the government issued Order No 13/PM 2012 ceasing consideration and approval of new investment in mining exploration and surveys, and rubber and eucalyptus plantations throughout the country. 
This moratorium on new rubber and eucalyptus plantation projects was extended in December 2015 by the Prime Minister’s cabinet decision, while the Government has reopened consideration of new mining projects (Vientiane Times, 25 December 2015).
However, researchers say, murky land deals continue to drive ethnic communities off their land without adequate consultation or compensation (IRIN, 22 May 2014). 
Hodgdon (2010) pointed out a central contradiction in Lao Law that hinders local communities from participating in forest management activities. On the one hand, basic legal documents like the Constitution and the Forestry Law cite the central role of the state as sole land owner and ultimate decision maker over forest resource use. On the other hand, legislation entitles local communities to certain rights in forest management, and to benefit sharing. When conflicts arise between communities and state agencies, it is easy for officials to simply cite the Constitution or the Forestry Law to deny communities any meaningful role in decision making. 
According to Jonsson (2006) villagers did not understand forest management plans for production forest areas, indicative of a lack of participation of the villagers in forest management. 
Summary:
For all source types, there is risk of:
•    Conflicts over land rights and tenure;
•    Lack of compensation to villagers when relocated;
•    Lack of formalisation of complaints from villagers due to corruption; and
•    Villagers not being allowed to enter forest concessions.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verificationStakeholder consultation
1
Verify Concession/lease agreement
Concession/lease agreement granted by the state for hydropower dam construction, mining etc. Or for tree plantation by Ministry of Natural Resources and Environment or Provincial/City Offices of Natural Resources and Environment. The document can be used to identify if concession overlaps village areas; contract considers right of local population, and terms require mitigation of damage and compensation for damage, relocation expenses (including provision of appropriate source of subsistence).
2
Verify Forest management plan
Village Forest Management Plan and map with zoning of village land/forests: to find out whether forest management plans for production forest areas reckon with these documents; in case of conversion, mitigation and compensation measures must be commensurate with type and value of converted lands.
3
Verify Social and environmental impact assessment
4
Verify Resettlement plan
5
Verify Land acquisition assessment
6
Verify Ethnic minority development plan
7
Verify Memo with the estimation of compensation signed by all stakeholders
8
Consult Re-allocated communities
Consult with re-allocated communities to verify that they have been adequately compensated.
Description of legal requirements
Local communities shall be adequately compensation when re-allocated
VIEW MORE
Villages in the Lao PDR have open access to, and exclusive use of, forest land and resources within their village boundaries.
Customary forest rights are defined in Article 42 of the 2007 Forestry Law, with all rural communities having these rights: 
“Customary utilisation of forest is the use of forest and forest products that has been carried out for a long time in accordance with Laws and regulations. The State allows the use of trees and the harvest of non-protected species of forest products for household consumption with the condition that such customary use shall not cause adverse impacts on forests, forest resources, the environment, nor impinge upon rights and benefits of other individuals or organisations.” 
Villagers may be allocated land for tree planting and regeneration, and ownership of the resulting trees is guaranteed upon registration. 
A village, as a community, can lease natural forest areas within the village boundary under a Village Forest Management Agreement from the state for exclusive customary use and protection rights with no tax obligations. The Law does not specify the duration or terms of these agreements, but Prime Ministerial Decree 59 2002 sets a minimum of 10 years. 
In addition to these customary rights under the Law, most villages have already gone through the Lao government’s Land Use Planning and Land Allocation programme (as stipulated by “MAF Guidelines on Land Use Planning and Allocation for Management and Use, No. 0822/MAF 1996) that formally allocates land and forest to villagers for legal recognition. 
Organisations and people who are directly or indirectly affected by investment projects or activities in development shall be involved in development of an integrated spatial plan, strategic environmental assessment, environmental action plan, social and natural environmental impact assessment, environmental management and monitoring plan, pollution control and other measures (Environmental Protection Law No. 29/NA, Article 48). 
Selective logging:
To strengthen the role of forestry in poverty eradication, the government has established a policy that villagers in production forest areas, organised into Village Forestry Organisations, should participate in forestry planning and operations in the field and should share in the derived proceeds. 
The role of Village Forestry Organisations is to organise villagers’ participation in implementation of forest management activities under a Village Forest Management Agreement signed by the VFO and the relevant FMU. This agreement specifies the rights and responsibilities of signatories, the scope of village participation, and the arrangements for sharing of revenue from commercial timber harvests.
Conversion and Plantations:
The right of usufruct or any generated income from land is secured to the holder of land use rights by Article 56 of the Land Law No. 04/2003 NA. The parties related to the lease or concession of land (aliens, apatrids, foreign Individuals and their organisations) are under an obligation “to not violate the rights and interests of other persons” (the Land Law No. 04/2003 NA, Article 67).
In case of acquisition of land for public purposes or development projects, the state entity or company shall conduct assessments and receive approval from the relevant government agencies for the following documents, where required by Law (Decree 192/PM 2005, Article 15): 
•    Initial social assessment; 
•    Social impact assessment; 
•    Land acquisition and compensation report; 
•    Resettlement plan; and
•    Ethnic minority development plan. 
For government-financed projects, these documents should be submitted to the central-level agency (Ministry of Natural Resources and Environment). In case of a foreign or domestic private or joint venture, the documents should be submitted to the ministry in charge of the project, and the relevant local authority. The ministry shall forward these documents to the Ministry of Natural Resources and Environment for final approval.
Owners of state land concessions are also responsible for providing budgets, short-term implementation, long-term assistance, and economic rehabilitation of affected people, as well as monitoring and evaluation of the compensation process. They are required: 
•    To pay particular attention to the needs of the “poorest affected people and vulnerable groups”;
•    To ensure the meaningful involvement of project-affected communities and their existing social and cultural institutions in the resettlement process; 
•    To collaborate with “concerned local governmental authorities”, and to get the approval of “concerned agencies” for all submitted plans and surveys. 
If it is confirmed by the “responsible government authorities” that the development of a project will have adverse impact on affected people, Article 6 of the Decree 192/PM 2005 regulates the principles of compensation. 
Compensation is defined as “payment in cash or in kind for an asset to be acquired or affected by projects at replacement cost”, where replacement cost is “the amount in cash or in kind needed to replace lands, houses, infrastructure or assets on the lands (crops, fruit trees) and other assets (income) affected by the development projects” (Decree 192/PM 2005, Article 3). 
The project’s owner shall compensate losses to the holders of legitimate rights for different types of land use by calculating the value of production, or the value received from land development as the basis for determining the amount of compensation (Decree No. 135/2009 PM Article 6 and 43). 
Affected people living in rural or remote areas who do not have any legal Land Use Certificate or other acceptable proof indicating land use rights, shall be compensated for their lost assets at replacement cost and provided assistance “to ensure that they are not worse-off due to the project”.
Where significantly large areas of land are affected by a project (i.e. agriculture, residential or commercial land), the compensation shall be through the provision of “land for land”. This land must be of equivalent size and productivity and must be located at a location acceptable to the affected people and the project owners (Decree 192/PM 2005 Article 6).
Before compensation is provided, the project owners shall establish a joint committee with representatives of all stakeholders to assess the loss to affected people. The estimation of compensation must be done with the participation of line agencies, local administrative authorities, village administration and villagers by preparing a written memo which must be signed by all participants. 
The compensation and resettlement measures must be in place prior to the commencement of the project; rehabilitation measures must already be in place, although they need not have been completed. 
Detailed information on the resettlement and compensation process regarding procedures, planning and implementation can be found in the Technical Guidelines on Compensation and Resettlement in Development Projects (prepared by the Science Technology and Environment Agency (STEA) in 2005). 
Regulation No. 0112/2008 MAF (Article 31) requires dissemination of information about logging and reservoir area cleaning among all interested parties, including local people.
 
Legally required documents
  • Village Forest Management Agreement
  • Forest management plan
  • Resettlement plan
Applicable legislation
VIEW LESS
1.13 Customary rights
Last updated on 2022-03-01 Lack of formalisation of complaints from villagers due to corruption  Specified RISK
For the majority of rural citizens of the Lao PDR, tenure is extremely insecure. The country’s Constitution (Article 15), dated August 15, 1991 requires that citizens hold “rights to using, transferring, and inheriting [land] in accordance with the Law.” However, in practice, the government still claims ownership of most forest land, maintaining a highly centralised system of forest governance with inadequate recognition of customary tenure... VIEW MOREFor the majority of rural citizens of the Lao PDR, tenure is extremely insecure. The country’s Constitution (Article 15), dated August 15, 1991 requires that citizens hold “rights to using, transferring, and inheriting [land] in accordance with the Law.” However, in practice, the government still claims ownership of most forest land, maintaining a highly centralised system of forest governance with inadequate recognition of customary tenure rights, leaving millions of forest-dependent communities vulnerable to land expropriation. State views often conflict with villagers’ notions of customary rights and authority.
The National Export Strategy (2011-2015) prioritises a foreign investment-oriented economic growth model through nine sectors with the potential to generate revenue, including organic plantation agriculture, encompassing eucalyptus and acacia (for paper, pulp, and fiber), sugarcane, and rubber. The strategy targets foreign investors who bring new technology and market access, while acknowledging that the large-scale investment model may negatively impact rural citizens. This approach is best illustrated by the shift from reliance on small-scale, local production and the logging of natural forests and lower-value products, to the establishment of commoditised export-oriented industrial agriculture and forestry plantations. 
It is worth specific note that the process of land allocation for production of export commodities is unstable and unclear, potentially resulting in conflicts of interest between local communities and investors.
Consequently, the Lao PDR has allocated a rapidly expanding area to large-scale foreign direct investment (FDI) projects in agriculture, forestry, and other sectors promoted under the National Export Strategy. 
Screening of the concession inventory data suggests that currently about five million hectares of the Lao PDR are leased or conceded to either domestic or foreign parties (Wellmann, 2012). This area amounts to 21% of the total territory of the country. Roughly 13% of all villages in the Lao PDR have at least one concession within their village boundaries (these concessions can relate to plantations, but also to mini natural gas and hydropower where forest conversion would have occurred). Eighty-five percent of all investment in agricultural concessions comes from foreign investors. In 2012, the International Food Policy Research Institute listed Laos among seven countries in the world in which international land deals account for more than 10 percent of the total agricultural area (IRIN, 22 May 2014). 
Most of the concessions (tree plantations, hydropower dams, mining and geological prospecting) are granted within forest areas, which results in a high rate of forest conversion, and deprivation of non-timber forest products critically important to the subsistence of the rural population.
Laos has about 1.6 million land plots, and so far about 620,000 of these plots have been titled. Of these, 300,000 are owned by the State, while the rest is land belonging to villagers. The government had planned to complete a land survey and allocation of lands to villagers, as well as a land title project by 2015 (Vientiane Times, 21 August 2012). 
Rights to manage village forests are often not secured to villagers. Commonly, borders of village lands are drawn on a single “hard copy” – a billboard in a village – and if/when this is lost or damaged, the village loses its only source of information on village forests (Kenney-Lazar, 2010). 
Despite the allocation of use rights over forest and other communal lands, communal lands are not compensated for when re-allocated to companies, despite legislation requiring compensation to ensure that people are not left worse off due to a project. Communal lands have no land title and are considered to be within the realm of state ownership. Public or state ownership means that such lands can be easily given away without any sort of payment for the loss of resource entitlements (Kenney-Lazar, 2010). The lack of statutory recognition of traditional land rights before land is opened up to investors often means that local communities have little or no political recourse to defend their rights and to prevent the loss of both non-legally tenured communal and legally tenured individual land in the face of land concessions. 
Accordingly, land use plans and associated formal use rights are often totally ignored by concessionaries, and researchers have reported cases of conversion of every type of allocated forest (conservation, production, protection, regeneration, and cemetery forests) and land category (agriculture, grazing, and industrial tree land) (Hunt, 2014; Kenney-Lazar, 2010).
Land concessions have come under criticism for ignoring village customary forest and land tenure rights, and for depleting the resources of forest-dependent communities. Land disputes were the top issue of concern raised by members of the public who called the National Assembly hotline during the session of the National Assembly in June 2012 (Vientiane Times, 21 August 2012).
Researchers and activists point out that land deals in Laos, despite decent Laws, are carried out with little transparency or accountability, and with a lack of equitable consultation with affected local communities (Kenney-Lazar, 2010, 2015; Hunt, 2014). Conflicts often arise due to limited, inadequate, or non-existent compensation for acquired land being paid by project owners to the land use right holders. 
Many villagers in Laos have a high degree of dependency on NTFP and still practice shifting cultivation, which requires large plots of land to allow some soil to lie fallow to regenerate while other sections are planted – a system that is “completely different” from the settled farming of the lowland areas where displaced villagers are resettled. When the government relocates farmers to consolidated villages near towns and cities, families in some cases have been given as little as 0.75 hectares of land – roughly half what they traditionally use for farming (IRIN, 22 May 2014).
Kenney-Lazar (2010) reported cases of farmers accepting the low price that a Vietnamese rubber corporation offered out of fear that if they refused they would not receive any money at all.
Government officials often fail to formalise the tenure complaints of villagers as they are involved in the acquisition of village land (through bribes from concessionaries). 
The typical grievance process in Laos is that the headman of a village raises any complaint of the villagers with the district government. However, these are usually the same district government officials who brought the company to the community in the first place. As such, it is highly likely that government officials will hesitate to formalise the tenure complaints of villagers when they themselves have been involved in the acquisition of village land. For instance, a company was accused of making monthly payments to both district and provincial government officials, ostensibly as a per-diem payment, for being on the company committee; this creates a serious conflict of interest, and it is entirely predictable under such circumstances that any grievance mechanism would be corrupted (Hunt, 2014).
Villagers in Attapeu told Global Witness that armed soldiers, hired by a Vietnamese rubber corporation, regularly prevent them from entering the forest in at least one concession, and threaten them with arrest. These soldiers also protected logging operations inside the concession area, where luxury timber, including rosewood, was being cleared and trucked across the border to Vietnam as round logs (Global Witness, 2013). Along with force and pressure, the company used material incentives to influence the decisions of the headmen of a village, as well as government officials (Kenney-Lazar, 2010).
In an attempt to properly regulate the existing mining and tree plantation investment projects, in June 2012 the government issued Order No 13/PM 2012 ceasing consideration and approval of new investment in mining exploration and surveys, and rubber and eucalyptus plantations throughout the country. 
This moratorium on new rubber and eucalyptus plantation projects was extended in December 2015 by the Prime Minister’s cabinet decision, while the Government has reopened consideration of new mining projects (Vientiane Times, 25 December 2015).
However, researchers say, murky land deals continue to drive ethnic communities off their land without adequate consultation or compensation (IRIN, 22 May 2014). 
Hodgdon (2010) pointed out a central contradiction in Lao Law that hinders local communities from participating in forest management activities. On the one hand, basic legal documents like the Constitution and the Forestry Law cite the central role of the state as sole land owner and ultimate decision maker over forest resource use. On the other hand, legislation entitles local communities to certain rights in forest management, and to benefit sharing. When conflicts arise between communities and state agencies, it is easy for officials to simply cite the Constitution or the Forestry Law to deny communities any meaningful role in decision making. 
According to Jonsson (2006) villagers did not understand forest management plans for production forest areas, indicative of a lack of participation of the villagers in forest management. 
Summary:
For all source types, there is risk of:
•    Conflicts over land rights and tenure;
•    Lack of compensation to villagers when relocated;
•    Lack of formalisation of complaints from villagers due to corruption; and
•    Villagers not being allowed to enter forest concessions.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Stakeholder consultation
1
Consult Local villages
Consultation with surrounding villagers to verify if there are any complaints which have not been formalised. Verify is the complaint is being handled.
Description of legal requirements
All complaints raised by villagers shall have been formalised and addressed (or in the process of being addressed)
VIEW MORE
Villages in the Lao PDR have open access to, and exclusive use of, forest land and resources within their village boundaries.
Customary forest rights are defined in Article 42 of the 2007 Forestry Law, with all rural communities having these rights: 
“Customary utilisation of forest is the use of forest and forest products that has been carried out for a long time in accordance with Laws and regulations. The State allows the use of trees and the harvest of non-protected species of forest products for household consumption with the condition that such customary use shall not cause adverse impacts on forests, forest resources, the environment, nor impinge upon rights and benefits of other individuals or organisations.” 
Villagers may be allocated land for tree planting and regeneration, and ownership of the resulting trees is guaranteed upon registration. 
A village, as a community, can lease natural forest areas within the village boundary under a Village Forest Management Agreement from the state for exclusive customary use and protection rights with no tax obligations. The Law does not specify the duration or terms of these agreements, but Prime Ministerial Decree 59 2002 sets a minimum of 10 years. 
In addition to these customary rights under the Law, most villages have already gone through the Lao government’s Land Use Planning and Land Allocation programme (as stipulated by “MAF Guidelines on Land Use Planning and Allocation for Management and Use, No. 0822/MAF 1996) that formally allocates land and forest to villagers for legal recognition. 
Organisations and people who are directly or indirectly affected by investment projects or activities in development shall be involved in development of an integrated spatial plan, strategic environmental assessment, environmental action plan, social and natural environmental impact assessment, environmental management and monitoring plan, pollution control and other measures (Environmental Protection Law No. 29/NA, Article 48). 
Selective logging:
To strengthen the role of forestry in poverty eradication, the government has established a policy that villagers in production forest areas, organised into Village Forestry Organisations, should participate in forestry planning and operations in the field and should share in the derived proceeds. 
The role of Village Forestry Organisations is to organise villagers’ participation in implementation of forest management activities under a Village Forest Management Agreement signed by the VFO and the relevant FMU. This agreement specifies the rights and responsibilities of signatories, the scope of village participation, and the arrangements for sharing of revenue from commercial timber harvests.
Conversion and Plantations:
The right of usufruct or any generated income from land is secured to the holder of land use rights by Article 56 of the Land Law No. 04/2003 NA. The parties related to the lease or concession of land (aliens, apatrids, foreign Individuals and their organisations) are under an obligation “to not violate the rights and interests of other persons” (the Land Law No. 04/2003 NA, Article 67).
In case of acquisition of land for public purposes or development projects, the state entity or company shall conduct assessments and receive approval from the relevant government agencies for the following documents, where required by Law (Decree 192/PM 2005, Article 15): 
•    Initial social assessment; 
•    Social impact assessment; 
•    Land acquisition and compensation report; 
•    Resettlement plan; and
•    Ethnic minority development plan. 
For government-financed projects, these documents should be submitted to the central-level agency (Ministry of Natural Resources and Environment). In case of a foreign or domestic private or joint venture, the documents should be submitted to the ministry in charge of the project, and the relevant local authority. The ministry shall forward these documents to the Ministry of Natural Resources and Environment for final approval.
Owners of state land concessions are also responsible for providing budgets, short-term implementation, long-term assistance, and economic rehabilitation of affected people, as well as monitoring and evaluation of the compensation process. They are required: 
•    To pay particular attention to the needs of the “poorest affected people and vulnerable groups”;
•    To ensure the meaningful involvement of project-affected communities and their existing social and cultural institutions in the resettlement process; 
•    To collaborate with “concerned local governmental authorities”, and to get the approval of “concerned agencies” for all submitted plans and surveys. 
If it is confirmed by the “responsible government authorities” that the development of a project will have adverse impact on affected people, Article 6 of the Decree 192/PM 2005 regulates the principles of compensation. 
Compensation is defined as “payment in cash or in kind for an asset to be acquired or affected by projects at replacement cost”, where replacement cost is “the amount in cash or in kind needed to replace lands, houses, infrastructure or assets on the lands (crops, fruit trees) and other assets (income) affected by the development projects” (Decree 192/PM 2005, Article 3). 
The project’s owner shall compensate losses to the holders of legitimate rights for different types of land use by calculating the value of production, or the value received from land development as the basis for determining the amount of compensation (Decree No. 135/2009 PM Article 6 and 43). 
Affected people living in rural or remote areas who do not have any legal Land Use Certificate or other acceptable proof indicating land use rights, shall be compensated for their lost assets at replacement cost and provided assistance “to ensure that they are not worse-off due to the project”.
Where significantly large areas of land are affected by a project (i.e. agriculture, residential or commercial land), the compensation shall be through the provision of “land for land”. This land must be of equivalent size and productivity and must be located at a location acceptable to the affected people and the project owners (Decree 192/PM 2005 Article 6).
Before compensation is provided, the project owners shall establish a joint committee with representatives of all stakeholders to assess the loss to affected people. The estimation of compensation must be done with the participation of line agencies, local administrative authorities, village administration and villagers by preparing a written memo which must be signed by all participants. 
The compensation and resettlement measures must be in place prior to the commencement of the project; rehabilitation measures must already be in place, although they need not have been completed. 
Detailed information on the resettlement and compensation process regarding procedures, planning and implementation can be found in the Technical Guidelines on Compensation and Resettlement in Development Projects (prepared by the Science Technology and Environment Agency (STEA) in 2005). 
Regulation No. 0112/2008 MAF (Article 31) requires dissemination of information about logging and reservoir area cleaning among all interested parties, including local people.
 
Legally required documents
  • Village Forest Management Agreement
  • Forest management plan
  • Resettlement plan
Applicable legislation
VIEW LESS
1.16 Classification of species, quantities, qualities
Last updated on 2022-03-01 A lack of, or falsification of the registration of harvested logs at Log yard II  Specified RISK
The flow of wood products is poorly monitored, and only the smaller part of harvested timber is officially registered at log yards as required. According to the Study for Understanding Timber Flows and Control in the Lao PDR (2012), only 34% of the total recorded harvested timber volume from four provinces in the 2010-11 logging season was registered at log yard II. There is evidence that documents (log lists) specify timber of lower grade and s... VIEW MOREThe flow of wood products is poorly monitored, and only the smaller part of harvested timber is officially registered at log yards as required. According to the Study for Understanding Timber Flows and Control in the Lao PDR (2012), only 34% of the total recorded harvested timber volume from four provinces in the 2010-11 logging season was registered at log yard II. 
There is evidence that documents (log lists) specify timber of lower grade and smaller size than is accurate, possibly because of an informal agreement between the buyer and the state agencies responsible for timber sale. The control measurement of logs at log yards II in the Don Situang production forest area revealed that volumes were up to 30% higher than documented on log lists (Jonsson, 2006). 
The WWF’s analysis of timber movement under quotas for road construction (Smirnov, 2015) has revealed significant disparities between records of quantities, composition and quality of harvested timber at different stages of the chain of custody (from pre-felling inventory and accounting at log yard II, to the stage at which custom documents are prepared), supposedly in order to conceal illegally harvested timber and to understate payments/charges in the process of selling and paying taxes to the state on the Lao side:
•    Evidence that some valuable restricted species (Burma padauk and Burmese rosewood) went unrecorded at log yard II;
•    Significant underreporting of quantity – the volume of exported timber (as it was reported to Vietnamese customs) exceeded the entire volume of timber officially documented at log yard II more than threefold; 
•    The average volume of logs as reported by the importer at Vietnamese customs was 1.7-2.6 times higher than in log lists and sale-purchase contracts for the same species on the Lao side. Subsequently, the average price increased many fold from the contract between the Lao buyer and the Provincial Office of Industry and Commerce to the contract between the exporter and the importer.
It is obvious that most of the wood harvested in smallholding tree plantations is shipped without notice to, and approval of, relevant government bodies due to a lack of business registration of plantations, and a reluctance of holders to follow ambiguous procedures and pay substantial regulatory fees and service charges (Smith, Phengsopha, 2014). 
Summary:
For all source types there is risk of: 
•    Lack of registering of harvested logs at log yard II; and 
•    Disparities between records of quantities, composition and quality of harvested timber at different stages of the chain of custody (from pre-felling inventory, to log list and custom documents).
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Logging contract
Basic information on permitted timber for logging for comparison with log list and checking of its validity.
2
Verify Logging permit
Basic information on permitted timber for logging for comparison with log list and checking of its validity.
Description of legal requirements
Timber sources shall have been registered accurately at log yard II
VIEW MORE
A log list, which is used to calculate timber values and to generate transport and/or export permits, is created at log yard II, where all logs are to be measured and graded. Law on Forestry (2007) Article 21 stipulates that logs stored at log yard II shall be thoroughly measured, graded and recorded in a log list according to MAF regulations. Provincial and District Agriculture and Forestry Offices staff are responsible for making log lists at log yard II, and for handover of log lists to the Provincial Office of Industry and Commerce (Order No. 17/2008 PM Article 16). Measurement, scaling and registering of logs at log yard II is used for valuation, payment of fees, royalties etc., and is undertaken in accordance with Decision No. 0116/2007 MAF Annex 1 governing measurement of logs, stumps, knots and classification of log grades. 
In addition to this, according to Guideline No. 2157/2006 DOF Part X and Regulation No. 0112/2008 MAF Articles 19 and 21, forestry officers (Provincial and District Agriculture and Forestry Offices) supervising logging activities in compartment/logging zone are required to record logs already at log yard I (the species, number of trees, number of logs), including log markings which indicate the logging site. This list is to be used as a transport document to bring the material to log yard II.
In cases in which timber was harvested in production forest areas, assigned forestry officers must check that all logs are derived from marked trees in the harvested blocks according to logging plan (Guideline No. 2157/2006 DOF Part X) before scaling and grading of the logs at log yard II.
After completion of a log list, foresters of Provincial Agriculture and Forestry Offices shall make a release-mark on every recorded log using a special hammer-stamp: a F-mark (ປມ) for logs taken from log yard II to log yard III or a timber processing factory, an LF-mark (ປມລ) for logs intended for export in special cases approved by the GoL (Order No. 17/2008 PM Article 16).
Transport permits are required for plantation timber and shall contain the relevant required information on quantity and quality (Regulation 196/AF, 2000 Article 14). The tier of government body approving transportation depends on the point of shipment. Transportation of plantation timber within the same province can be approved by a Village Forest Organisation, while transportation of plantation timber out of a province is to be approved by a District Agriculture and Forestry Office and reported to a Provincial Agriculture and Forestry Office. Permits for export abroad are issued by a Provincial Agriculture and Forestry Office. 
Foresters of Provincial and District Agriculture and Forestry Offices may inspect log yard II and check that the volume harvested is consistent with the logging permit. 
 
Applicable legislation
VIEW LESS
1.16 Classification of species, quantities, qualities
Last updated on 2022-03-01 Disparities between records of quantities, species composition and quality of harvested timber at different stages of the chain of custody (from pre-felling inventory, to log list and custom documents)  Specified RISK
The flow of wood products is poorly monitored, and only the smaller part of harvested timber is officially registered at log yards as required. According to the Study for Understanding Timber Flows and Control in the Lao PDR (2012), only 34% of the total recorded harvested timber volume from four provinces in the 2010-11 logging season was registered at log yard II. There is evidence that documents (log lists) specify timber of lower grade and s... VIEW MOREThe flow of wood products is poorly monitored, and only the smaller part of harvested timber is officially registered at log yards as required. According to the Study for Understanding Timber Flows and Control in the Lao PDR (2012), only 34% of the total recorded harvested timber volume from four provinces in the 2010-11 logging season was registered at log yard II. 
There is evidence that documents (log lists) specify timber of lower grade and smaller size than is accurate, possibly because of an informal agreement between the buyer and the state agencies responsible for timber sale. The control measurement of logs at log yards II in the Don Situang production forest area revealed that volumes were up to 30% higher than documented on log lists (Jonsson, 2006). 
The WWF’s analysis of timber movement under quotas for road construction (Smirnov, 2015) has revealed significant disparities between records of quantities, composition and quality of harvested timber at different stages of the chain of custody (from pre-felling inventory and accounting at log yard II, to the stage at which custom documents are prepared), supposedly in order to conceal illegally harvested timber and to understate payments/charges in the process of selling and paying taxes to the state on the Lao side:
•    Evidence that some valuable restricted species (Burma padauk and Burmese rosewood) went unrecorded at log yard II;
•    Significant underreporting of quantity – the volume of exported timber (as it was reported to Vietnamese customs) exceeded the entire volume of timber officially documented at log yard II more than threefold; 
•    The average volume of logs as reported by the importer at Vietnamese customs was 1.7-2.6 times higher than in log lists and sale-purchase contracts for the same species on the Lao side. Subsequently, the average price increased many fold from the contract between the Lao buyer and the Provincial Office of Industry and Commerce to the contract between the exporter and the importer.
It is obvious that most of the wood harvested in smallholding tree plantations is shipped without notice to, and approval of, relevant government bodies due to a lack of business registration of plantations, and a reluctance of holders to follow ambiguous procedures and pay substantial regulatory fees and service charges (Smith, Phengsopha, 2014). 
Summary:
For all source types there is risk of: 
•    Lack of registering of harvested logs at log yard II; and 
•    Disparities between records of quantities, composition and quality of harvested timber at different stages of the chain of custody (from pre-felling inventory, to log list and custom documents).
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Pre-logging inventory and tree marking report
Pre-logging inventory and tree marking report: basic information on permitted timber for logging for comparison with log list and checking of its validity.
2
Verify Records from log yard I
Records from log yard I: basic information on permitted timber for logging for comparison with log list and checking of its validity
3
Verify Log list
Log list: made at log yard II.​ Volumes, composition of species, and sizes in log list shall match characteristics of timber on sale.
4
Verify Transport permit
Transport permits as required for plantation timber: this is the only official document for plantation timber that specifies composition, quantity and quality.
Description of legal requirements
Records of quantities, species composition and quality of harvested timber shall match through the supply chain.
VIEW MORE
A log list, which is used to calculate timber values and to generate transport and/or export permits, is created at log yard II, where all logs are to be measured and graded. Law on Forestry (2007) Article 21 stipulates that logs stored at log yard II shall be thoroughly measured, graded and recorded in a log list according to MAF regulations. Provincial and District Agriculture and Forestry Offices staff are responsible for making log lists at log yard II, and for handover of log lists to the Provincial Office of Industry and Commerce (Order No. 17/2008 PM Article 16). Measurement, scaling and registering of logs at log yard II is used for valuation, payment of fees, royalties etc., and is undertaken in accordance with Decision No. 0116/2007 MAF Annex 1 governing measurement of logs, stumps, knots and classification of log grades. 
In addition to this, according to Guideline No. 2157/2006 DOF Part X and Regulation No. 0112/2008 MAF Articles 19 and 21, forestry officers (Provincial and District Agriculture and Forestry Offices) supervising logging activities in compartment/logging zone are required to record logs already at log yard I (the species, number of trees, number of logs), including log markings which indicate the logging site. This list is to be used as a transport document to bring the material to log yard II.
In cases in which timber was harvested in production forest areas, assigned forestry officers must check that all logs are derived from marked trees in the harvested blocks according to logging plan (Guideline No. 2157/2006 DOF Part X) before scaling and grading of the logs at log yard II.
After completion of a log list, foresters of Provincial Agriculture and Forestry Offices shall make a release-mark on every recorded log using a special hammer-stamp: a F-mark (ປມ) for logs taken from log yard II to log yard III or a timber processing factory, an LF-mark (ປມລ) for logs intended for export in special cases approved by the GoL (Order No. 17/2008 PM Article 16).
Transport permits are required for plantation timber and shall contain the relevant required information on quantity and quality (Regulation 196/AF, 2000 Article 14). The tier of government body approving transportation depends on the point of shipment. Transportation of plantation timber within the same province can be approved by a Village Forest Organisation, while transportation of plantation timber out of a province is to be approved by a District Agriculture and Forestry Office and reported to a Provincial Agriculture and Forestry Office. Permits for export abroad are issued by a Provincial Agriculture and Forestry Office. 
Foresters of Provincial and District Agriculture and Forestry Offices may inspect log yard II and check that the volume harvested is consistent with the logging permit. 
 
Applicable legislation
VIEW LESS
1.17 Trade and transport
Last updated on 2022-03-01 Timber being transported without required documents  Specified RISK
The procedures for documenting timber movement from logging sites and log yards are inadequately enforced. The WWF’s analysis of data on timber movement in the southern provinces of Laos provides sufficient grounds to believe that most timber is shipped without the required documentation (Smirnov, 2015).A comparison of official data on issued quota volumes and the officially registered volume of timber harvested in Laos’ four southern provinc... VIEW MOREThe procedures for documenting timber movement from logging sites and log yards are inadequately enforced. The WWF’s analysis of data on timber movement in the southern provinces of Laos provides sufficient grounds to believe that most timber is shipped without the required documentation (Smirnov, 2015).
A comparison of official data on issued quota volumes and the officially registered volume of timber harvested in Laos’ four southern provinces in the 2011-12 logging season with data on export of wood products from this area has found that >50% of timber products exported were from undocumented sources. Not less than 50% (most likely more than 60%) of wood products exported in the 2010-11 logging season from Sekong province were from undocumented sources. Results of the analysis also suggest that documented timber may comprise only a quarter of raw timber used by local wood processing factories in the Sekong province in 2010-11 (Smirnov, 2015).
According to Jonsson (2006), during the inspection of two sawmills in Savannaket province it was found that none of the logs in the log-yard had been numbered (marked) as per regulations (only their dimensions and number had been marked), and that no log lists for any contracts were available.
Vietnamese traffic police in the central province of Nghe An have detained eight Lao-registered trucks carrying timber without accompanying documents. According to the police, the trucks had brought the timber from Laos to Vietnam via the Nam Can border gate, i.e. the trucks had gone through formal customs control (Vientiane Times, 20 April 2015).
Timber trucks are known to carry timber in excess of the amount specified in the accompanying documents. For example, of the 200 trucks carrying timber from Laos into Vietnam that were checked at weigh stations in Vietnam’s Nghe An Province, twenty five trucks were reportedly carrying between five and 30 percent more than their allowed capacity (Vientiane Times, 22 April 2015).
It is obvious that most of the wood harvested in smallholding tree plantations is shipped without notice to, or approval of, relevant government bodies due to a lack of business registration of plantations and the reluctance of smallholders to follow challenging and costly procedures. In the absence of transport permits, it is unclear how the source of timber can be tracked (Smith, Phengsopha, 2014).
Summary:
For all source types there is risk of:
•    Timber being transported without required documents; and
•    Transport documents carrying incorrect information.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Sale contract
Sale contract: the sale contract with the government (for natural timber) is the key document which provides legitimate grounds for issuing all other permissions. Verify that information contained in the document correspond, and relate to the material transported and purchased.
2
Verify Removal permit
Removal permit from log yard II. Verify that information contained in the document correspond, and relate to the material transported and purchased.
3
Verify Transport permit
Transport permit for timber commodities. Verify that information contained in the document correspond, and relate to the material transported and purchased.
Description of legal requirements
Timber shall be transported with required documents
VIEW MORE
Selective logging and Conversion:
Timber harvested in production forests and areas with infrastructure development projects may be sold through bidding or price consultation (applying the price set by the Ministry of Industry and Commerce) or allocation in a higher efficiency priority order to processing factories which meet the standards required by the National Wood Processing Industry Association (Order No. 17/2008 PM Article 6).
The Provincial Office of Industry and Commerce (POIC) accepts logs stored at log yard II after checking the log list and signing a hand-over memorandum with the Provincial Agriculture and Forestry Office. The POIC is responsible for setting the sale price for each timber category and species based on government-fixed prices, for arranging the sale of timber and monitoring of market prices to derive maximum profit for the state, and signs purchase-sale contracts with buyers (Order No. 17/2008 PM Article 16).
Transportation of logs to log yard II in production forest areas and areas with infrastructure projects must be stopped by 31 May and is prohibited from 1 June to 31 October because of the rainy season, even when the logging plan has not been fully completed (Order No. 17/2008 PM Article 11 and Guideline No. 0105/MAF, 2008, Article 3.8). Logging and timber transportation can be allowed to proceed during the rainy season only in special cases based on government approval in areas with infrastructure projects where the continuation is necessary to ensure completion of the construction in time. In such circumstances, specific routes must be used for timber transportation to prevent negative effects on the environment, or on national and public roads.
A log transport permit is required for the movement of logs from log yard II, and the Provincial Agriculture and Forestry Office is responsible for issuing domestic transport permits (Decision 32/PM 2012 Article 5.7), although the regulations regarding the approval of, and responsibility for, the transport of logs from log yard II to log yard III are not clear; the responsibility for issuing log movement permits has been transferred between agencies several times.
The Provincial Agriculture and Forestry Offices shall make release-marks on every recorded log by means of a special hammer-stamp: a F-mark (ປມ) for timber transported within the country, and a LF-mark (ປມລ) for logs intended for export in special cases approved by the Government of Laos (Law No. 06/2007 NA on Forestry Article 53; Order No. 17/2008 PM Article 16).
Shipments of logs and wood products must be transported on pre-determined routes, equipped with weighing stations, during the right season and time, and with declarations made at prescribed check-points.
Every shipment containing timber shall be accompanied by a set of documents issued by the relevant authority, including: 
•    A sale contract and calculation of timber royalties to be paid, registered by the Ministry of Finance;
•    A receipt of sale and of collection of revenue from timber sale (by the Ministry of Finance); 
•    A permit for removal of timber from log yard II (Provincial Agriculture and Forestry Office); and
•    A transportation permit for timber commodities, for finished and semi-finished timber products within the country, and for export (Provincial Office of Industry and Commerce). 
Cargo trucks transporting timber products shall also have a valid transport enterprise license approved for import, and registration for use for logging and timber transport from the Ministry of Agriculture and Forestry and the Ministry of Public Works and Transport (Order No. 17/2008 PM Article 22).
Plantations:
Only a transport permit is required for plantation timber (Regulation 196/AF, 2000 Article 14). The tier of the government body approving transportation depends on the point of shipment. Transportation of plantation timber within a province can be approved by a Village Forest Organisation, while transportation of plantation timber between provinces shall be approved by the District Agriculture and Forestry Office and reported to the Provincial Agriculture and Forestry Office. A permit for export abroad is issued by the Provincial Agriculture and Forestry Office. 
Foresters of Provincial and District Agriculture and Forestry Offices may inspect log yard II and check that the volume actually harvested is consistent with the logging permit. 
 
Legally required documents
  • Log list
  • Sale contract
  • Removal permit
  • Transport permit
Applicable legislation
VIEW LESS
1.17 Trade and transport
Last updated on 2022-03-01 Transport documents carrying incorrect information  Specified RISK
The procedures for documenting timber movement from logging sites and log yards are inadequately enforced. The WWF’s analysis of data on timber movement in the southern provinces of Laos provides sufficient grounds to believe that most timber is shipped without the required documentation (Smirnov, 2015).A comparison of official data on issued quota volumes and the officially registered volume of timber harvested in Laos’ four southern provinc... VIEW MOREThe procedures for documenting timber movement from logging sites and log yards are inadequately enforced. The WWF’s analysis of data on timber movement in the southern provinces of Laos provides sufficient grounds to believe that most timber is shipped without the required documentation (Smirnov, 2015).
A comparison of official data on issued quota volumes and the officially registered volume of timber harvested in Laos’ four southern provinces in the 2011-12 logging season with data on export of wood products from this area has found that >50% of timber products exported were from undocumented sources. Not less than 50% (most likely more than 60%) of wood products exported in the 2010-11 logging season from Sekong province were from undocumented sources. Results of the analysis also suggest that documented timber may comprise only a quarter of raw timber used by local wood processing factories in the Sekong province in 2010-11 (Smirnov, 2015).
According to Jonsson (2006), during the inspection of two sawmills in Savannaket province it was found that none of the logs in the log-yard had been numbered (marked) as per regulations (only their dimensions and number had been marked), and that no log lists for any contracts were available.
Vietnamese traffic police in the central province of Nghe An have detained eight Lao-registered trucks carrying timber without accompanying documents. According to the police, the trucks had brought the timber from Laos to Vietnam via the Nam Can border gate, i.e. the trucks had gone through formal customs control (Vientiane Times, 20 April 2015).
Timber trucks are known to carry timber in excess of the amount specified in the accompanying documents. For example, of the 200 trucks carrying timber from Laos into Vietnam that were checked at weigh stations in Vietnam’s Nghe An Province, twenty five trucks were reportedly carrying between five and 30 percent more than their allowed capacity (Vientiane Times, 22 April 2015).
It is obvious that most of the wood harvested in smallholding tree plantations is shipped without notice to, or approval of, relevant government bodies due to a lack of business registration of plantations and the reluctance of smallholders to follow challenging and costly procedures. In the absence of transport permits, it is unclear how the source of timber can be tracked (Smith, Phengsopha, 2014).
Summary:
For all source types there is risk of:
•    Timber being transported without required documents; and
•    Transport documents carrying incorrect information.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Sale contract
Sale contract: the sale contract with the government (for natural timber) is the key document which provides legitimate grounds for issuing all other permissions. Verify that information contained in the document correspond, and relate to the material transported and purchased.
2
Verify Removal permit
Removal permit from log yard II. Verify that information contained in the document correspond, and relate to the material transported and purchased.
3
Verify Transport permit
Transport permit for timber commodities. Verify that information contained in the document correspond, and relate to the material transported and purchased.
Description of legal requirements
Documents shall contain accurate information
VIEW MORE
Selective logging and Conversion:
Timber harvested in production forests and areas with infrastructure development projects may be sold through bidding or price consultation (applying the price set by the Ministry of Industry and Commerce) or allocation in a higher efficiency priority order to processing factories which meet the standards required by the National Wood Processing Industry Association (Order No. 17/2008 PM Article 6).
The Provincial Office of Industry and Commerce (POIC) accepts logs stored at log yard II after checking the log list and signing a hand-over memorandum with the Provincial Agriculture and Forestry Office. The POIC is responsible for setting the sale price for each timber category and species based on government-fixed prices, for arranging the sale of timber and monitoring of market prices to derive maximum profit for the state, and signs purchase-sale contracts with buyers (Order No. 17/2008 PM Article 16).
Transportation of logs to log yard II in production forest areas and areas with infrastructure projects must be stopped by 31 May and is prohibited from 1 June to 31 October because of the rainy season, even when the logging plan has not been fully completed (Order No. 17/2008 PM Article 11 and Guideline No. 0105/MAF, 2008, Article 3.8). Logging and timber transportation can be allowed to proceed during the rainy season only in special cases based on government approval in areas with infrastructure projects where the continuation is necessary to ensure completion of the construction in time. In such circumstances, specific routes must be used for timber transportation to prevent negative effects on the environment, or on national and public roads.
A log transport permit is required for the movement of logs from log yard II, and the Provincial Agriculture and Forestry Office is responsible for issuing domestic transport permits (Decision 32/PM 2012 Article 5.7), although the regulations regarding the approval of, and responsibility for, the transport of logs from log yard II to log yard III are not clear; the responsibility for issuing log movement permits has been transferred between agencies several times.
The Provincial Agriculture and Forestry Offices shall make release-marks on every recorded log by means of a special hammer-stamp: a F-mark (ປມ) for timber transported within the country, and a LF-mark (ປມລ) for logs intended for export in special cases approved by the Government of Laos (Law No. 06/2007 NA on Forestry Article 53; Order No. 17/2008 PM Article 16).
Shipments of logs and wood products must be transported on pre-determined routes, equipped with weighing stations, during the right season and time, and with declarations made at prescribed check-points.
Every shipment containing timber shall be accompanied by a set of documents issued by the relevant authority, including: 
•    A sale contract and calculation of timber royalties to be paid, registered by the Ministry of Finance;
•    A receipt of sale and of collection of revenue from timber sale (by the Ministry of Finance); 
•    A permit for removal of timber from log yard II (Provincial Agriculture and Forestry Office); and
•    A transportation permit for timber commodities, for finished and semi-finished timber products within the country, and for export (Provincial Office of Industry and Commerce). 
Cargo trucks transporting timber products shall also have a valid transport enterprise license approved for import, and registration for use for logging and timber transport from the Ministry of Agriculture and Forestry and the Ministry of Public Works and Transport (Order No. 17/2008 PM Article 22).
Plantations:
Only a transport permit is required for plantation timber (Regulation 196/AF, 2000 Article 14). The tier of the government body approving transportation depends on the point of shipment. Transportation of plantation timber within a province can be approved by a Village Forest Organisation, while transportation of plantation timber between provinces shall be approved by the District Agriculture and Forestry Office and reported to the Provincial Agriculture and Forestry Office. A permit for export abroad is issued by the Provincial Agriculture and Forestry Office. 
Foresters of Provincial and District Agriculture and Forestry Offices may inspect log yard II and check that the volume actually harvested is consistent with the logging permit. 
 
Legally required documents
  • Log list
  • Sale contract
  • Removal permit
  • Transport permit
Applicable legislation
VIEW LESS
1.19 Custom regulations
Last updated on 2022-03-01 Irregular or unofficial timber exports Specified RISK
The WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber exported by Laos is doubtful. Flow of timber export is poorly monitored, and the Government of Laos lacks reliable information on export of wood products. There are substantial discrepancies in trade statistics with importing countries. For example, Lao wood exports to China and Vietnam from 2012-14 as reported by importing countries exceeded total annual log... VIEW MOREThe WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber exported by Laos is doubtful. Flow of timber export is poorly monitored, and the Government of Laos lacks reliable information on export of wood products. There are substantial discrepancies in trade statistics with importing countries. For example, Lao wood exports to China and Vietnam from 2012-14 as reported by importing countries exceeded total annual logging plans many-fold, and the officially registered volume of timber by an order of magnitude. The total value of Lao wood products as reported by importing countries exceeded the value of exported wood products. according to analysis of data from Lao state customs statistics, many-fold, and the disparity between these two data sets is increasing. In 2013, the official export value was only 8% of the total value of Lao timber imported as reported by destination countries (Smirnov, 2015).
According to Deputy Minister of Agriculture and Forestry Thongphat Vongmany, “on average, the government approved only about 200,000 cubic metres of logs to be cut annually, but statistics provided by customs officials of neighbouring countries showed that as high as one million cubic metres of wood was exported from Laos in a year” (Vientiane Times, 13 June 2016).
These discrepancies imply irregular or unofficial timber exports, and the corresponding leakages from national revenue (Forest Sector Performance Indicators 2014). WWF research indicates that a significant part of shipments containing wood cross the Lao border without being declared at border gates, i.e. these shipments are smuggled (Smirnov, 2015). Traffic of large amounts of undocumented timber via official Laos-Vietnam border crossings is reported by Vietnamese mass-media. As of the beginning of April 2015, traffic police in Chuong Duong District (Nghe An province) have seized eight Laos-registered trucks on National Highway No. 7, allegedly laden with smuggled timber (no documents were provided by the trucks’ drivers). According to the police, dozens of Laotian timber trucks are hiding from police on small roads off National Highway 7, and timber is brought to Vietnam via the Nam Can Border Gate situated between Xiang Khouand and Nghe An provinces (Thanh Nien News, 10 April 2015).
Dual contracting between exporters and importers may also take place when one contract with an underestimated price is presented on the Lao side (in order to understate payments/charges in the process of selling and paying taxes to the Lao state), and another with the real price is presented to customs in the importing country (Smirnov, 2015). 
There are indications that some contracts may be made with dummy (“ghost”) companies (Smirnov, 2015). 
Investigation of the seizure of a large shipment of rosewood from Laos conducted by Vietnamese Customs found no evidence that the wood was legally procured in Laos prior to its import to Vietnam, as the Lao export company specified in the contract denied trading the timber (Xuan To et al., 2014). Furthermore, the investigation found evidence that only six trucks out of the original 13 had legally crossed the border.
Provincial branches of the Customs Department of the Ministry of Finance do not disclose full records of timber export to higher authorities. As was acknowledged by government-controlled media, “information regarding the amount of wood exported is not available as the government has been unable to collect the information from local authorities” (Vientiane Times, September 18, 2015).
According to sources, the Customs Department is perceived as one of the most corrupted state agencies in the country. According to a finance official in a government office: “It is well-known that officials in the tax and customs sectors in Laos earn extra income somehow by getting involved in corruption, so they can have big houses and luxurious cars. This causes money to leak from tax collection" (RFA - Radio Free Asia, 23 July 2015). 
Another source from the Ministry of Finance told mass media that: “The people who will be accepted to work at the tax and customs department must pay under the table at least 50 million kip (about U.S. $6,100)”, and “if they are accepted to work at an international border checkpoint, they must pay at least 100 million (about U.S. $12,000), because they can easily earn more money for two years” (RFA - Radio Free Asia, 19 January 2016). According to a Forest Trends’ report (2010), “facilitation” payments made to Lao officials overseeing the export procedure on site at various levels, amounted to about US$13/m3 of timber exported to Vietnam.
Almost all export of wooden products from Laos is still comprised of logs and sawn wood (Smirnov, 2015). The share of these products in total exports from Laos in monetary terms almost always exceeded 90% in the period between 2000 and 2014, reaching 95% in 2011-13, and nearly 98% in 2014. From the mid-2000s, the share of logs in exports has been increasing steadily, and reached 56% in 2014, while in 2002 logs accounted for only 14% of the total (further, the export value of logs doubled in 2014 compared to 2013).
The ban on the export of logs and sawn timber from natural forests imposed by the Government of Laos from 1999 is either not enforced, or is circumvented due to numerous permissions issued in “exceptional cases” backed by high ranking national and provincial officials who share an interest in the timber trade. Sources quoted in mass media reports have linked Lao national leaders to the flourishing illegal log trade, and have claimed that they pressure enforcement officials not to take action against smuggling activities (RFA - Radio Free Asia, 26 November 2014; 23 September 2015).
The Deputy Minister of Agriculture and Forestry admitted that many local authorities breached the Law in the past by permitting export of wood from natural forests (Vientiane Times, 14 June 2016). This includes first-hand evidence and analysis of systemic corruption in government authorisations for cross-border trade in illegal logs between Laos and Vietnam, (including in Attapeu Province, South Laos) involving officials of both countries, and senior timber trade representatives in Vietnam. 
Recently, the Government of Laos reaffirmed its strong commitment to enforcing the ban on the export of all types of unfinished wooden products, and new regulations (PM Announcement No. 1360 on 08 August 2015 and Order No. 15/PM on 13 May 2016) exclude the possibility of export of natural timber logs and sawn wood without exception, including suspendsing special cases approved by Government that have not yet been implemented. Prime Minister Thongloun Sisoulith announced that any government official involved in illegal logging will be penalised without exception (Vientiane Times, 16 June, 2016).
Deep Involvement of high-ranking politicians with illegal export of unfinished wood products challenges recent measures taken by the Lao government to crack down on the implementation and enforcement of the ban.
Based on analysis of Vietnamese customs data, Forest Trends (2016) reported that in 2015 Vietnamese import of logs from Laos increased by 4% compared to 2014 (321,700m3 in 2015, against 308,600m3 in 2014), while import of sawn wood decreased by 23% (383,100m3 in 2015, against 495,100m3 in 2014).
According to local sources, hundreds of trucks in Champasak, Salavan, Sekong and Attapue provinces were continuing to transport logs to neighbouring Vietnam, around the clock, months after on the Prime Ministerial Decree of August 8, 2015 prohibited export of unfinished wood products without exception (RFA - Radio Free Asia, 23 September 2015). 
A hundred large trucks laden with logs were seen on 15 December 2015 at the Lao Bao-Dansavanh international border checkpoint in the Sepon district of Savannakhet province transporting timber to Vietnam. The convoy was directed by traffic policemen on motorcycles, and export of logs was allegedly permitted by a “Lao national leader” (RFA - Radio Free Asia, 30 December 2015). 
Apart from such brazen violations, perpetrators also hide timber and partially processed logs in containers of under-finished wood products. According to Deputy Minister of Finance Mr Bounchom Ubonpaseuth, businessmen are attempting a number of approaches to ensure that their undocumented logs are able to cross the border, and consequently more thorough inspections by the relevant authorities are required (Vientiane Times, 22 June 2016).
Officials also voiced concerns that traders could export unfinished wood products made from natural timber under the guise of timber coming from plantations (Vientiane Times, 25 June 2016).
Summary:
For all source types there is risk of:
•    Export of illegal harvested timber;
•    Dual contracting between exporters and importers, with underestimated prices on the Laos side and real prices invoiced in the receiving country;
•    Contracts may be made with dummy (“ghost”) companies with no proof of the timber’s origin; and
•    Violation of the ban on export of logs and sawn timber from natural forests. 
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Export license
2
Verify Certificate of origin
3
Verify Business registration certificate
Copy of Business Registration Certificate authorised to exercise timber business.
4
Verify Packing list
5
Verify Customs declaration form
6
Verify Sale-purchase contract
7
Verify Payment receipt (certificate)
Through Bank of Laos.
Description of legal requirements
Wood export shall be officially and legally exported.
VIEW MORE
General:
For all kinds of wood products, export companies must have a sales contract with a foreign company, and must transact money via the banking system of the Lao PDR (Notification No. 0094/MOF.DPAM 2013 Article 1). 
Export phytosanitary certificates are issued by the Plant Protection Authority in Provincial and Vientiane Capital Agriculture and Forestry Offices in accordance with Decree No 229/PO, 31 May 2012 Article 26. 
Wood products from natural forest (logs, trunk, bark, rough-processed timber, and semi-finished timber) are subject to non-automatic export licencing, while wood products from plantations are generally subject to automatic export licencing under Notification No 0076/MOIC.DIMEX.
The documents required for a detailed customs declaration are as follows (Law No. 04/NA 2011 on Customs Article 23):
•    Invoice;
•    Manifest;
•    Packaging list;
•    Certificates of origin; and
•    Export permit.
Laos is currently modernising its customs service according to ASEAN standards, therefore the declarant is required to lodge an ASEAN Customs Declaration Document with the following supporting documents attached (Instruction No. 1696/CD 2010): 
1.    Original copies of: 
•    Invoice; 
•    Certificate of Origin; 
•    Sale Contracts; 
•    Packing List; and
•    Permits from concerned agency (for controlled commodities). 
2.    Photocopies of: 
•    Business Registration License; 
•    Tax License (officially valid); and
•    Other relevant documents.
Wood products are subject to customs duty, and the customs value of exported goods is defined as the actual value of goods, including transportation costs delivered to the customs border checkpoint of export (Law No. 04/NA 2011 on Customs Articles 6, 12). Products from tree plantations shall not be exempt from export duties (Regulation No. 196/2000 MAF Article 22), although legislation provides for the exemption from export tax duties of certain agricultural products derived from plantations (Law No. 04/NA 2011 on Customs Article 59). However, in practice, concession agreements with certain companies waive export duties for plantation timber, and customs officials and industry operators have verified that export duties are not collected (Sigaty, 2003).
Selective Logging and Conversion:
In order to promote the export of semi-finished and finished products, the Government of Laos has introduced numerous bans on the export of logs and sawn timber (PM Orders No. 11/1999, 10/2000, 15/2001, 18/2002, 25/2004, with Decision No.1415/MOIC.DOI, 2008 providing clarification on types of that timber products prohibited for export).
The government is the only body authorised to consider and agree on specific cases in regard to the grant of permission to export unfinished products (logs, sawn timber, stumps, wood galls and semi-finished timber products) made of natural timber. The specific considerations depend on the purpose, quantity and actual logging situation, and on the use of the timber (Law No. 6/2007 NA on Forestry, Article 52; Order No. 17/2008 PM Article 23). 
Notification No. 1940/2011 MOIC.DIMEX Article 1.3 describes in detail the procedure for application for approval of export of logs, sawn wood and semi-finished wood products through the Department of Import and Export of the Ministry of Industry and Commerce. Regarding obtaining government approval on exportation (as a special case), the Department of Industry and Commerce of POIC is empowered to issue export monitoring permits.
A copy of the notification to the Government of Laos shall be provided to the Customs Department, which, in its turn, provides notices to customs at all international checkpoints where the exportation of relevant timber products takes place. Export without such notification is not allowed (Notification No. 1324/2010, Article 1). 
Logs intended for export in special cases approved by the Government of Laos shall have an LF-mark (ປມລ), which is made by means of a special hammer-stamp by PAFO foresters at log yard II (Order No. 17/2008 PM, Article 23).
PM Announcement No. 1360 2015 excluded the possibility of the export of logs and sawn wood without exception. It states: “Export is not allowed for logs, timber, or sawn timber in any case, these logs and sawn timbers must be processed into finished wood products in order to be exported”. 
A recent Prime Ministerial order confirmed the suspension of the export of logs, sawn wood (large sawn timbers, sawn timbers, split wood), roots, stumps, knots, branches and standing trees, or decorative trees that are harvested from natural forest, and extended it to special cases defined by the Government that have not yet been implemented. All border checkpoints are prohibited to approve or facilitate the export of logs and sawn timber (Order No. 15/PM 13 May 2016 Article 2, 14).
For export of finished wooden products to comply with the standards of the Ministry of Industry and Commerce, the exporter must obtain permission for export issued by the Department of Industry and Commerce (No. 1601/MOIC.DIMEX 2008 Part IV). The package of documents for export shall comprise:
•    Copy of Enterprise Registration Certificate authorising carrying on of a timber business;
•    Export-controlling license issued by the Department of Industry and Commerce, attached to the packing list;
•    Customs declaration forms;
•    Letter of duties exemption (export duties), for finished timber products;
•    Copy of sale-purchase contract with foreign buyer; 
•    Copy of payment receipt through the relevant bank (company must pay export tariffs and royalties as required, including special export royalties for controlled wood).
Plantations:
Domestic processing of wood from plantations is also encouraged, but such wood may be exported as logs or sawn wood if it cannot be processed domestically (Notice No 1812/MOIC 2015). 
Provincial Offices of Industry and Commerce are authorised to issue export permits for non-prohibited, special or controlled species of planted timber (Teak, Rubber, Agar wood, Eucalyptus, Acacia auriculiformis and Acacia mangnium) in the form of logs and sawn timber based on a certificate of origin of timber certified by a Provincial and Capital Agriculture and Forestry Office (Decision 41/PM 2014 Articles 1; Additional Notification 1135/PSO.DIMEX 2014). Provincial and Capital Agriculture and Forestry Offices are responsible for managing, inspecting and monitoring the transportation of planted timber to be exported abroad, in order to avoid opportunities for smuggling natural timber and other planted timber other than that mentioned in Article 1 (Decision 41/PM 2014, Article 3).
The exporter must apply to the Department of Import and Export of the Ministry of Industry and Commerce for an export licence for species not listed in Decision 41/PM 2014. For prohibited, special and controlled species, the exporter is required, by a letter from the Permanent Office of the Ministry of Agriculture and Forestry, to verify the origin of timber. 
For all plantation species the exporter is to submit an application, as well as the following documents (Notification No 1791/MOIC.DIMEX, 2011 Article 3): 
•    Certificate of origin 
•    Enterprise registration which allows a timber business 
•    Tax registration 
•    Log list acknowledged by the Provincial Agriculture and Forestry Office 
•    Document releasing the timber from the Provincial Agriculture and Forestry sector (record of logs marked/stamped) 
•    Tax payment 
•    Fee receipt
Export licenses are valid for 90 days and shall expire automatically if such period has elapsed (Notification No 1791/MOIC.DIMEX, 2011 Article 7).
After receiving an export permit/license, wood exporters shall be inspected by the Department of Public Asset Management of the Ministry of Finance in cooperation with the Provincial Office of Industry and Commerce and the Provincial Agriculture and Forestry Office (Notification No. 0094/MOF.DPAM 2013), which shall: 
•    Recheck and register payments of timber taxes and other royalties; 
•    Examine and register purchase orders between foreign buyers and sellers, which must envisage payment via a legitimate bank in Laos; and
•    Check, record and seal wood shipments.
 
Legally required documents
  • Export license
  • Packing list
  • Customs declaration form
  • Sale-purchase contract
  • Payment receipt through Bank of Laos
  • Bank slip on payment of export tariffs and royalties
  • Certificate of origin
Applicable legislation
VIEW LESS
1.19 Custom regulations
Last updated on 2022-03-01 Dual contracting between exporters and importers, with underestimated prices on the Laos side and real prices invoiced in the receiving country Specified RISK
The WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber exported by Laos is doubtful. Flow of timber export is poorly monitored, and the Government of Laos lacks reliable information on export of wood products. There are substantial discrepancies in trade statistics with importing countries. For example, Lao wood exports to China and Vietnam from 2012-14 as reported by importing countries exceeded total annual log... VIEW MOREThe WWF’s report (Smirnov, 2015) concludes that the legal status of much of the timber exported by Laos is doubtful. Flow of timber export is poorly monitored, and the Government of Laos lacks reliable information on export of wood products. There are substantial discrepancies in trade statistics with importing countries. For example, Lao wood exports to China and Vietnam from 2012-14 as reported by importing countries exceeded total annual logging plans many-fold, and the officially registered volume of timber by an order of magnitude. The total value of Lao wood products as reported by importing countries exceeded the value of exported wood products. according to analysis of data from Lao state customs statistics, many-fold, and the disparity between these two data sets is increasing. In 2013, the official export value was only 8% of the total value of Lao timber imported as reported by destination countries (Smirnov, 2015).
According to Deputy Minister of Agriculture and Forestry Thongphat Vongmany, “on average, the government approved only about 200,000 cubic metres of logs to be cut annually, but statistics provided by customs officials of neighbouring countries showed that as high as one million cubic metres of wood was exported from Laos in a year” (Vientiane Times, 13 June 2016).
These discrepancies imply irregular or unofficial timber exports, and the corresponding leakages from national revenue (Forest Sector Performance Indicators 2014). WWF research indicates that a significant part of shipments containing wood cross the Lao border without being declared at border gates, i.e. these shipments are smuggled (Smirnov, 2015). Traffic of large amounts of undocumented timber via official Laos-Vietnam border crossings is reported by Vietnamese mass-media. As of the beginning of April 2015, traffic police in Chuong Duong District (Nghe An province) have seized eight Laos-registered trucks on National Highway No. 7, allegedly laden with smuggled timber (no documents were provided by the trucks’ drivers). According to the police, dozens of Laotian timber trucks are hiding from police on small roads off National Highway 7, and timber is brought to Vietnam via the Nam Can Border Gate situated between Xiang Khouand and Nghe An provinces (Thanh Nien News, 10 April 2015).
Dual contracting between exporters and importers may also take place when one contract with an underestimated price is presented on the Lao side (in order to understate payments/charges in the process of selling and paying taxes to the Lao state), and another with the real price is presented to customs in the importing country (Smirnov, 2015). 
There are indications that some contracts may be made with dummy (“ghost”) companies (Smirnov, 2015). 
Investigation of the seizure of a large shipment of rosewood from Laos conducted by Vietnamese Customs found no evidence that the wood was legally procured in Laos prior to its import to Vietnam, as the Lao export company specified in the contract denied trading the timber (Xuan To et al., 2014). Furthermore, the investigation found evidence that only six trucks out of the original 13 had legally crossed the border.
Provincial branches of the Customs Department of the Ministry of Finance do not disclose full records of timber export to higher authorities. As was acknowledged by government-controlled media, “information regarding the amount of wood exported is not available as the government has been unable to collect the information from local authorities” (Vientiane Times, September 18, 2015).
According to sources, the Customs Department is perceived as one of the most corrupted state agencies in the country. According to a finance official in a government office: “It is well-known that officials in the tax and customs sectors in Laos earn extra income somehow by getting involved in corruption, so they can have big houses and luxurious cars. This causes money to leak from tax collection" (RFA - Radio Free Asia, 23 July 2015). 
Another source from the Ministry of Finance told mass media that: “The people who will be accepted to work at the tax and customs department must pay under the table at least 50 million kip (about U.S. $6,100)”, and “if they are accepted to work at an international border checkpoint, they must pay at least 100 million (about U.S. $12,000), because they can easily earn more money for two years” (RFA - Radio Free Asia, 19 January 2016). According to a Forest Trends’ report (2010), “facilitation” payments made to Lao officials overseeing the export procedure on site at various levels, amounted to about US$13/m3 of timber exported to Vietnam.
Almost all export of wooden products from Laos is still comprised of logs and sawn wood (Smirnov, 2015). The share of these products in total exports from Laos in monetary terms almost always exceeded 90% in the period between 2000 and 2014, reaching 95% in 2011-13, and nearly 98% in 2014. From the mid-2000s, the share of logs in exports has been increasing steadily, and reached 56% in 2014, while in 2002 logs accounted for only 14% of the total (further, the export value of logs doubled in 2014 compared to 2013).
The ban on the export of logs and sawn timber from natural forests imposed by the Government of Laos from 1999 is either not enforced, or is circumvented due to numerous permissions issued in “exceptional cases” backed by high ranking national and provincial officials who share an interest in the timber trade. Sources quoted in mass media reports have linked Lao national leaders to the flourishing illegal log trade, and have claimed that they pressure enforcement officials not to take action against smuggling activities (RFA - Radio Free Asia, 26 November 2014; 23 September 2015).
The Deputy Minister of Agriculture and Forestry admitted that many local authorities breached the Law in the past by permitting export of wood from natural forests (Vientiane Times, 14 June 2016). This includes first-hand evidence and analysis of systemic corruption in government authorisations for cross-border trade in illegal logs between Laos and Vietnam, (including in Attapeu Province, South Laos) involving officials of both countries, and senior timber trade representatives in Vietnam. 
Recently, the Government of Laos reaffirmed its strong commitment to enforcing the ban on the export of all types of unfinished wooden products, and new regulations (PM Announcement No. 1360 on 08 August 2015 and Order No. 15/PM on 13 May 2016) exclude the possibility of export of natural timber logs and sawn wood without exception, including suspendsing special cases approved by Government that have not yet been implemented. Prime Minister Thongloun Sisoulith announced that any government official involved in illegal logging will be penalised without exception (Vientiane Times, 16 June, 2016).
Deep Involvement of high-ranking politicians with illegal export of unfinished wood products challenges recent measures taken by the Lao government to crack down on the implementation and enforcement of the ban.
Based on analysis of Vietnamese customs data, Forest Trends (2016) reported that in 2015 Vietnamese import of logs from Laos increased by 4% compared to 2014 (321,700m3 in 2015, against 308,600m3 in 2014), while import of sawn wood decreased by 23% (383,100m3 in 2015, against 495,100m3 in 2014).
According to local sources, hundreds of trucks in Champasak, Salavan, Sekong and Attapue provinces were continuing to transport logs to neighbouring Vietnam, around the clock, months after on the Prime Ministerial Decree of August 8, 2015 prohibited export of unfinished wood products without exception (RFA - Radio Free Asia, 23 September 2015). 
A hundred large trucks laden with logs were seen on 15 December 2015 at the Lao Bao-Dansavanh international border checkpoint in the Sepon district of Savannakhet province transporting timber to Vietnam. The convoy was directed by traffic policemen on motorcycles, and export of logs was allegedly permitted by a “Lao national leader” (RFA - Radio Free Asia, 30 December 2015). 
Apart from such brazen violations, perpetrators also hide timber and partially processed logs in containers of under-finished wood products. According to Deputy Minister of Finance Mr Bounchom Ubonpaseuth, businessmen are attempting a number of approaches to ensure that their undocumented logs are able to cross the border, and consequently more thorough inspections by the relevant authorities are required (Vientiane Times, 22 June 2016).
Officials also voiced concerns that traders could export unfinished wood products made from natural timber under the guise of timber coming from plantations (Vientiane Times, 25 June 2016).
Summary:
For all source types there is risk of:
•    Export of illegal harvested timber;
•    Dual contracting between exporters and importers, with underestimated prices on the Laos side and real prices invoiced in the receiving country;
•    Contracts may be made with dummy (“ghost”) companies with no proof of the timber’s origin; and
•    Violation of the ban on export of logs and sawn timber from natural forests. 
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Description of legal requirements
Prices of timber exported shall be correctly declared
VIEW MORE
General:
For all kinds of wood products, export companies must have a sales contract with a foreign company, and must transact money via the banking system of the Lao PDR (Notification No. 0094/MOF.DPAM 2013 Article 1). 
Export phytosanitary certificates are issued by the Plant Protection Authority in Provincial and Vientiane Capital Agriculture and Forestry Offices in accordance with Decree No 229/PO, 31 May 2012 Article 26. 
Wood products from natural forest (logs, trunk, bark, rough-processed timber, and semi-finished timber) are subject to non-automatic export licencing, while wood products from plantations are generally subject to automatic export licencing under Notification No 0076/MOIC.DIMEX.
The documents required for a detailed customs declaration are as follows (Law No. 04/NA 2011 on Customs Article 23):
•    Invoice;
•    Manifest;
•    Packaging list;
•    Certificates of origin; and
•    Export permit.
Laos is currently modernising its customs service according to ASEAN standards, therefore the declarant is required to lodge an ASEAN Customs Declaration Document with the following supporting documents attached (Instruction No. 1696/CD 2010): 
1.    Original copies of: 
•    Invoice; 
•    Certificate of Origin; 
•    Sale Contracts; 
•    Packing List; and
•    Permits from concerned agency (for controlled commodities). 
2.    Photocopies of: 
•    Business Registration License; 
•    Tax License (officially valid); and
•    Other relevant documents.
Wood products are subject to customs duty, and the customs value of exported goods is defined as the actual value of goods, including transportation costs delivered to the customs border checkpoint of export (Law No. 04/NA 2011 on Customs Articles 6, 12). Products from tree plantations shall not be exempt from export duties (Regulation No. 196/2000 MAF Article 22), although legislation provides for the exemption from export tax duties of certain agricultural products derived from plantations (Law No. 04/NA 2011 on Customs Article 59). However, in practice, concession agreements with certain companies waive export duties for plantation timber, and customs officials and industry operators have verified that export duties are not collected (Sigaty, 2003).
Selective Logging and Conversion:
In order to promote the export of semi-finished and finished products, the Government of Laos has introduced numerous bans on the export of logs and sawn timber (PM Orders No. 11/1999, 10/2000, 15/2001, 18/2002, 25/2004, with Decision No.1415/MOIC.DOI, 2008 providing clarification on types of that timber products prohibited for export).
The government is the only body authorised to consider and agree on specific cases in regard to the grant of permission to export unfinished products (logs, sawn timber, stumps, wood galls and semi-finished timber products) made of natural timber. The specific considerations depend on the purpose, quantity and actual logging situation, and on the use of the timber (Law No. 6/2007 NA on Forestry, Article 52; Order No. 17/2008 PM Article 23). 
Notification No. 1940/2011 MOIC.DIMEX Article 1.3 describes in detail the procedure for application for approval of export of logs, sawn wood and semi-finished wood products through the Department of Import and Export of the Ministry of Industry and Commerce. Regarding obtaining government approval on exportation (as a special case), the Department of Industry and Commerce of POIC is empowered to issue export monitoring permits.
A copy of the notification to the Government of Laos shall be provided to the Customs Department, which, in its turn, provides notices to customs at all international checkpoints where the exportation of relevant timber products takes place. Export without such notification is not allowed (Notification No. 1324/2010, Article 1). 
Logs intended for export in special cases approved by the Government of Laos shall have an LF-mark (ປມລ), which is made by means of a special hammer-stamp by PAFO foresters at log yard II (Order No. 17/2008 PM, Article 23).
PM Announcement No. 1360 2015 excluded the possibility of the export of logs and sawn wood without exception. It states: “Export is not allowed for logs, timber, or sawn timber in any case, these logs and sawn timbers must be processed into finished wood products in order to be exported”. 
A recent Prime Ministerial order confirmed the suspension of the export of logs, sawn wood (large sawn timbers, sawn timbers, split wood), roots, stumps, knots, branches and standing trees, or decorative trees that are harvested from natural forest, and extended it to special cases defined by the Government that have not yet been implemented. All border checkpoints are prohibited to approve or facilitate the export of logs and sawn timber (Order No. 15/PM 13 May 2016 Article 2, 14).
For export of finished wooden products to comply with the standards of the Ministry of Industry and Commerce, the exporter must obtain permission for export issued by the Department of Industry and Commerce (No. 1601/MOIC.DIMEX 2008 Part IV). The package of documents for export shall comprise:
•    Copy of Enterprise Registration Certificate authorising carrying on of a timber business;
•    Export-controlling license issued by the Department of Industry and Commerce, attached to the packing list;
•    Customs declaration forms;
•    Letter of duties exemption (export duties), for finished timber products;
•    Copy of sale-purchase contract with foreign buyer; 
•    Copy of payment receipt through the relevant bank (company must pay export tariffs and royalties as required, including special export royalties for controlled wood).
Plantations:
Domestic processing of wood from plantations is also encouraged, but such wood may be exported as logs or sawn wood if it cannot be processed domestically (Notice No 1812/MOIC 2015). 
Provincial Offices of Industry and Commerce are authorised to issue export permits for non-prohibited, special or controlled species of planted timber (Teak, Rubber, Agar wood, Eucalyptus, Acacia auriculiformis and Acacia mangnium) in the form of logs and sawn timber based on a certificate of origin of timber certified by a Provincial and Capital Agriculture and Forestry Office (Decision 41/PM 2014 Articles 1; Additional Notification 1135/PSO.DIMEX 2014). Provincial and Capital Agriculture and Forestry Offices are responsible for managing, inspecting and monitoring the transportation of planted timber to be exported abroad, in order to avoid opportunities for smuggling natural timber and other planted timber other than that mentioned in Article 1 (Decision 41/PM 2014, Article 3).
The exporter must apply to the Department of Import and Export of the Ministry of Industry and Commerce for an export licence for species not listed in Decision 41/PM 2014. For prohibited, special and controlled species, the exporter is required, by a letter from the Permanent Office of the Ministry of Agriculture and Forestry, to verify the origin of timber. 
For all plantation species the exporter is to submit an application, as well as the following documents (Notification No 1791/MOIC.DIMEX, 2011 Article 3): 
•    Certificate of origin 
•    Enterprise registration which allows a timber business 
•    Tax registration 
•    Log list acknowledged by the Provincial Agriculture and Forestry Office 
•    Document releasing the timber from the Provincial Agriculture and Forestry sector (record of logs marked/stamped) 
•    Tax payment 
•    Fee receipt
Export licenses are valid for 90 days and shall expire automatically if such period has elapsed (Notification No 1791/MOIC.DIMEX, 2011 Article 7).
After receiving an export permit/license, wood exporters shall be inspected by the Department of Public Asset Management of the Ministry of Finance in cooperation with the Provincial Office of Industry and Commerce and the Provincial Agriculture and Forestry Office (Notification No. 0094/MOF.DPAM 2013), which shall: 
•    Recheck and register payments of timber taxes and other royalties; 
•    Examine and register purchase orders between foreign buyers and sellers, which must envisage payment via a legitimate bank in Laos; and
•    Check, record and seal wood shipments.
 
Legally required documents
  • Export license
  • Packing list
  • Customs declaration form
  • Sale-purchase contract
  • Payment receipt through Bank of Laos
  • Bank slip on payment of export tariffs and royalties
  • Certificate of origin
Applicable legislation
VIEW LESS
1.20 CITES
Last updated on 2022-03-01 Illegal harvest and export of Siamese rosewood under CITES export permits  Specified RISK
The EIA’s analysis of the impact of the CITES listing for Siamese rosewood concluded that it has largely failed, because the actions of Laos and Cambodia – Parties to CITES and key range states for the species – have fundamentally undermined efforts to curb trade (EIA, 2016a).Laos was registered as the origin of 63,530m3, or 83% of Siamese rosewood imports reported to the CITES trade database during the first 18 months of the species’ App... VIEW MOREThe EIA’s analysis of the impact of the CITES listing for Siamese rosewood concluded that it has largely failed, because the actions of Laos and Cambodia – Parties to CITES and key range states for the species – have fundamentally undermined efforts to curb trade (EIA, 2016a).
Laos was registered as the origin of 63,530m3, or 83% of Siamese rosewood imports reported to the CITES trade database during the first 18 months of the species’ Appendix II listing (from June 2013 to December 2014). 
EIA’s report (2016a) stresses that Laos has no credible inventories of remaining populations of Siamese rosewood to justify any exports at all, or likely any evidence of legality, as required under the Convention. The lack of any credible inventory or survey data on populations or stocks in Laos excludes the possibility that a Non-Detriment Findings system could have been devised in the country. 
Field surveys carried out in two central Lao provinces in 2012 have confirmed that natural populations of Dalbergia cochinchinensis in the Lao PDR are under severe and continuing threat from illegal logging. No mature individuals were found, and all trees with a DBH (diameter at breast height) greater than 15cm had been logged. This trend was observed for all surveyed populations, even within strictly protected areas.
According to experts interviewed by EIA (2016), the current amount of Siamese rosewood logging and export in Laos cannot be considered non-detrimental and represents a severe threat to the future survival of the species.
At the December 2014 Regional Rosewood Dialogue in Bangkok, representatives from Laos acknowledged their CITES Management Authorities neither knew what standing stocks of Siamese rosewood remained in Laos, nor conducted Non-Detriment Findings. It was formally recommended that Laos develop a Non-Detriment Findings system during 2015, and that all range states party to the Rosewood Dialogue must “provide NDF when issuing export CITES permit (and export license depending on countries)”. It appears that neither recommendation has been implemented. EIA believes that no CITES-certified exports from Laos since 2013 have been justified by Non-Detriment Findings, nor will they be in future. Consequently, without significant reform, all on-going exports are in violation of CITES (EIA, 2016a).
The complicity of government officials has been a key factor in the failure to enforce legal controls over the harvest and export of Siamese rosewood in Laos (EIA, 2014), and it is highly unlikely that much of the volume of D. cochinchinensis exported from Laos under CITES permits in 2013 and 2014 was legally harvested. 
There is also evidence of the illegitimate issuance of CITES export permits by Laos. In March 2014, a rosewood trader in China offered to sell EIA undercover investigators numerous export permits issued by Laos’ CITES Management Authority, covering thousands of cubic metres of rosewood logs. This constitutes a glaring violation of CITES procedures and principles, and suggests the CITES authority in Laos is culpable (EIA, 2016a).
EIA stressed that Laos has systemically disregarded the most basic legal safeguards of UN trade rules for endangered species in ways that seriously undermine the credibility of CITES. 
EIA is calling for an immediate suspension of all trade in Siamese rosewood from Laos until they demonstrate that trade levels are not detrimental to the survival of the species in the wild and that the timber is legal (EIA, 2016b). 
EIA is advocating strengthening protection for Siamese rosewood by removing a loophole in the CITES Appendix II listing – Annotation 5 – which exempts semi-finished and finished products from CITES protection (2015a, 2015b, 2016c). This approach is adopted by a Thai Proposal to the CITES Conference of the Parties in September 2016, which suggests extending the product coverage of Appendix II. 
Based on analysis of Vietnamese customs data, Forest Trends (2016) reported that import of Siamese rosewood from Laos to Vietnam declined dramatically from 26,400m3 in 2014 to around 3,000m3 in 2015 (Forest Trends, 2016). This decline could be partly due to the impact of a Vietnamese Ministry of Industry and Trade Circular 37 dated October 24, 2014, which temporarily suspended re-export of logs and sawn wood from Lao and Cambodian natural forests, and due to restrictions on import of Siamese rosewood from Laos imposed by the CITES authority in Vietnam.
The Vietnamese Customs Department investigated a case in which Siamese rosewood (Dalbergia cochinchinnesis) imported from Laos to Vietnam was fraudulently mis-declared in import-export documents as Dalbergia Cambodiana. The importer falsified the name of the wood species in an attempt to limit the company’s tax liability and, more significantly, to change the timber from a prohibited to a permitted species (Xuan To et al., 2014). 
Summary:
For all source types there is risk of or related to:
•    Illegal harvest and export of Siamese rosewood under CITES export permits; and
•    Illegal issuance of CITES export permits.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Government approval for prohibited tree species
It is recommended to avoid sourcing CITES listed species. At a minimum, this document shall be in place. The origin of the timber shall be confirmed before sourcing.
2
Verify CITES permit
It is recommended to avoid sourcing CITES listed species. At a minimum, this document shall be in place. The origin of the timber shall be confirmed before sourcing.
Description of legal requirements
Rosewood shall not be exported
VIEW MORE
Lao PDR became a signatory on May 30, 2004 to The International Convention on Trade in Endangered Species of wild Flora and Fauna (CITES). Lao PDR has an obligation to enforce its commitments under CITES.
The Law on Making Legislation (No 19/NA 2012), Article 9: Contradiction of Legislation, states that “…If the provisions of existing legislation and newly adopted legislation are inconsistent with the provisions of international conventions or treaties that Lao PDR is party to, the provisions of the international convention or treaty prevail and [the provisions of] existing legislation or newly adopted legislation shall be revised in due time”.
On 13 May 2016, PMO 15 (On intensifying strictness in the management and inspection of wood exploitation, timber removal and wood related businesses) was issued by the Prime Minister of Lao PDR, Mr. Thongloun Sisoulith 
On 9 June 2016, Instruction No. 0054/MAF (The expansion and implementation of the Order of the Prime Minister No. 15) was issued by the Minister of Agriculture and Forestry, Dr. Lien Thikeo.
Strictly prevent hunting, transport, merchandise in local market, import-export and transit of aquatic and wild animals and their parts through Laos to the third countries. Commercial farming of aquatic and wild animals in the list I of CITES which is the list for merchandise prohibition is prohibited. 
On 19 December 2016 Notice No: 1990/PMO.ED, issued by the Prime Ministers Office included the following:  
•    …understand and raise awareness in participation against and to prevent all forms of illegal wildlife trading
•    … protection of national conservation areas and national protection areas from all aspects of damage and encroachment.
•    … reduce hunting and illegal wildlife trading as well as promote biodiversity trade. 
•    Study suitable measures to completely resolve the prohibited animal farming issue (tiger and bear farms) for trading proposes in the country, which does not comply with international conventions. 
These initiatives were further strengthened under Order No. 05/PM on Strengthening strictness of the management and inspection of prohibited wild fauna and flora (dated 8 May 2018) which restricts trade in CITES Appendix 1 species, including timber. Also, in March 2017, the Lao PDR signed a cooperation agreement with China’s State Forestry and Grasslands Administration to cooperate on CITES implementation. As a result, the Lao PDR enforcement agencies are now better equipped and obliged to combat illegal wildlife trade, such as by controlling shops and retail hotel facilities, including in its Special Economic Zones.
The proclamation of the new Penal Code (No. 26/NA  Vientiane Capital, 17 May 2017: Officially endorsed by the Lao National Assembly on 17 October 2018) and the new Forestry Law in 2019 provides clarity in regards to the extent of allowable activities, responsibilities and accountability for such activities, and enforcement and sanctions related to breaches of these requirements.
The Penal Code codifies penalties and sanctions across the majority of Lao PDR laws, and replaces previous provisions under lower laws (Article 425: Effectiveness). However, it does not replace those penalties and sanctions under Customs Law, although it codifies these in regard to specific actions related to the export or import of specified goods (such as forest products).
The new Penal Law simplifies the decision making process relating to the imposition of penalties (for goods whose value is more than 1 million KIP) compared to education (for goods whose value is less than 1 million KIP); broadens and increases fines and imprisonment penalties relating to crime; and creates a two tiered system of offences where serious or organised (more than 3 people) crime is automatically considered a Major Offence and associated penalties are significantly higher than those for individuals acting in isolation.  There are also penalties for Breaching Regulations on Forest Management, and for Offences relating to Breach of Civil Servants’ Responsibilities or Offences relating to Breach of the Administration and Judiciary Regulations. Chapter 10 details provisions relating to Corruption.
Classified as vulnerable on the IUCN Red List, Dalbergia cochinchinensis (Siamese rosewood) was listed in Appendix II of CITES at the 16th meeting of the Conference of Parties (CoP16) in Bangkok in March 2013, following a proposal by Thailand and Vietnam. The restrictions on endangered Dalbergia cochinchinensis Siamese rosewood came into effect from June 12, 2013.
As logging is banned in all range states, the listing should prohibit international trade in Siamese rosewood logs, sawn timber, and veneers. 
Under CITES Appendix II, species cannot be exported from range state producer countries without CITES export permits issued by relevant management authorities, with these being issued, in turn, on the basis of scientific authorities confirmation that such trade will not be detrimental to the survival of the species. Range states are also obliged to pre-notify the CITES Secretariat regarding quotas for harvest and trade before any CITES export permits can be issued. For Siamese rosewood, these export obligations apply to Thailand, Laos, Cambodia and Vietnam – all of which have experienced rampant illegal exports in recent years. 
Importing countries also have clear obligations to ensure imports of Siamese rosewood are not accepted unless accompanied by valid CITES export permits.
CITES requires that export permits should not be issued without “legality acquisition” (verified legality), and that imports should not be accepted where illegal acquisition in the country of harvest is suspected.
 
Legally required documents
Applicable legislation
VIEW LESS
1.20 CITES
Last updated on 2022-03-01 Illegal issuance of CITES export permits  Specified RISK
The EIA’s analysis of the impact of the CITES listing for Siamese rosewood concluded that it has largely failed, because the actions of Laos and Cambodia – Parties to CITES and key range states for the species – have fundamentally undermined efforts to curb trade (EIA, 2016a).Laos was registered as the origin of 63,530m3, or 83% of Siamese rosewood imports reported to the CITES trade database during the first 18 months of the species’ App... VIEW MOREThe EIA’s analysis of the impact of the CITES listing for Siamese rosewood concluded that it has largely failed, because the actions of Laos and Cambodia – Parties to CITES and key range states for the species – have fundamentally undermined efforts to curb trade (EIA, 2016a).
Laos was registered as the origin of 63,530m3, or 83% of Siamese rosewood imports reported to the CITES trade database during the first 18 months of the species’ Appendix II listing (from June 2013 to December 2014). 
EIA’s report (2016a) stresses that Laos has no credible inventories of remaining populations of Siamese rosewood to justify any exports at all, or likely any evidence of legality, as required under the Convention. The lack of any credible inventory or survey data on populations or stocks in Laos excludes the possibility that a Non-Detriment Findings system could have been devised in the country. 
Field surveys carried out in two central Lao provinces in 2012 have confirmed that natural populations of Dalbergia cochinchinensis in the Lao PDR are under severe and continuing threat from illegal logging. No mature individuals were found, and all trees with a DBH (diameter at breast height) greater than 15cm had been logged. This trend was observed for all surveyed populations, even within strictly protected areas.
According to experts interviewed by EIA (2016), the current amount of Siamese rosewood logging and export in Laos cannot be considered non-detrimental and represents a severe threat to the future survival of the species.
At the December 2014 Regional Rosewood Dialogue in Bangkok, representatives from Laos acknowledged their CITES Management Authorities neither knew what standing stocks of Siamese rosewood remained in Laos, nor conducted Non-Detriment Findings. It was formally recommended that Laos develop a Non-Detriment Findings system during 2015, and that all range states party to the Rosewood Dialogue must “provide NDF when issuing export CITES permit (and export license depending on countries)”. It appears that neither recommendation has been implemented. EIA believes that no CITES-certified exports from Laos since 2013 have been justified by Non-Detriment Findings, nor will they be in future. Consequently, without significant reform, all on-going exports are in violation of CITES (EIA, 2016a).
The complicity of government officials has been a key factor in the failure to enforce legal controls over the harvest and export of Siamese rosewood in Laos (EIA, 2014), and it is highly unlikely that much of the volume of D. cochinchinensis exported from Laos under CITES permits in 2013 and 2014 was legally harvested. 
There is also evidence of the illegitimate issuance of CITES export permits by Laos. In March 2014, a rosewood trader in China offered to sell EIA undercover investigators numerous export permits issued by Laos’ CITES Management Authority, covering thousands of cubic metres of rosewood logs. This constitutes a glaring violation of CITES procedures and principles, and suggests the CITES authority in Laos is culpable (EIA, 2016a).
EIA stressed that Laos has systemically disregarded the most basic legal safeguards of UN trade rules for endangered species in ways that seriously undermine the credibility of CITES. 
EIA is calling for an immediate suspension of all trade in Siamese rosewood from Laos until they demonstrate that trade levels are not detrimental to the survival of the species in the wild and that the timber is legal (EIA, 2016b). 
EIA is advocating strengthening protection for Siamese rosewood by removing a loophole in the CITES Appendix II listing – Annotation 5 – which exempts semi-finished and finished products from CITES protection (2015a, 2015b, 2016c). This approach is adopted by a Thai Proposal to the CITES Conference of the Parties in September 2016, which suggests extending the product coverage of Appendix II. 
Based on analysis of Vietnamese customs data, Forest Trends (2016) reported that import of Siamese rosewood from Laos to Vietnam declined dramatically from 26,400m3 in 2014 to around 3,000m3 in 2015 (Forest Trends, 2016). This decline could be partly due to the impact of a Vietnamese Ministry of Industry and Trade Circular 37 dated October 24, 2014, which temporarily suspended re-export of logs and sawn wood from Lao and Cambodian natural forests, and due to restrictions on import of Siamese rosewood from Laos imposed by the CITES authority in Vietnam.
The Vietnamese Customs Department investigated a case in which Siamese rosewood (Dalbergia cochinchinnesis) imported from Laos to Vietnam was fraudulently mis-declared in import-export documents as Dalbergia Cambodiana. The importer falsified the name of the wood species in an attempt to limit the company’s tax liability and, more significantly, to change the timber from a prohibited to a permitted species (Xuan To et al., 2014). 
Summary:
For all source types there is risk of or related to:
•    Illegal harvest and export of Siamese rosewood under CITES export permits; and
•    Illegal issuance of CITES export permits.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Risk mitigation options
Document verification
1
Verify Government approval for prohibited tree species
It is recommended to avoid sourcing CITES listed species. At a minimum, this document shall be in place. The origin of the timber shall be confirmed before sourcing.
2
Verify CITES permit
It is recommended to avoid sourcing CITES listed species. At a minimum, this document shall be in place. The origin of the timber shall be confirmed before sourcing.
Description of legal requirements
CITES permits shall be issued legally and only for legally harvested wood.
VIEW MORE
Lao PDR became a signatory on May 30, 2004 to The International Convention on Trade in Endangered Species of wild Flora and Fauna (CITES). Lao PDR has an obligation to enforce its commitments under CITES.
The Law on Making Legislation (No 19/NA 2012), Article 9: Contradiction of Legislation, states that “…If the provisions of existing legislation and newly adopted legislation are inconsistent with the provisions of international conventions or treaties that Lao PDR is party to, the provisions of the international convention or treaty prevail and [the provisions of] existing legislation or newly adopted legislation shall be revised in due time”.
On 13 May 2016, PMO 15 (On intensifying strictness in the management and inspection of wood exploitation, timber removal and wood related businesses) was issued by the Prime Minister of Lao PDR, Mr. Thongloun Sisoulith 
On 9 June 2016, Instruction No. 0054/MAF (The expansion and implementation of the Order of the Prime Minister No. 15) was issued by the Minister of Agriculture and Forestry, Dr. Lien Thikeo.
Strictly prevent hunting, transport, merchandise in local market, import-export and transit of aquatic and wild animals and their parts through Laos to the third countries. Commercial farming of aquatic and wild animals in the list I of CITES which is the list for merchandise prohibition is prohibited. 
On 19 December 2016 Notice No: 1990/PMO.ED, issued by the Prime Ministers Office included the following:  
•    …understand and raise awareness in participation against and to prevent all forms of illegal wildlife trading
•    … protection of national conservation areas and national protection areas from all aspects of damage and encroachment.
•    … reduce hunting and illegal wildlife trading as well as promote biodiversity trade. 
•    Study suitable measures to completely resolve the prohibited animal farming issue (tiger and bear farms) for trading proposes in the country, which does not comply with international conventions. 
These initiatives were further strengthened under Order No. 05/PM on Strengthening strictness of the management and inspection of prohibited wild fauna and flora (dated 8 May 2018) which restricts trade in CITES Appendix 1 species, including timber. Also, in March 2017, the Lao PDR signed a cooperation agreement with China’s State Forestry and Grasslands Administration to cooperate on CITES implementation. As a result, the Lao PDR enforcement agencies are now better equipped and obliged to combat illegal wildlife trade, such as by controlling shops and retail hotel facilities, including in its Special Economic Zones.
The proclamation of the new Penal Code (No. 26/NA  Vientiane Capital, 17 May 2017: Officially endorsed by the Lao National Assembly on 17 October 2018) and the new Forestry Law in 2019 provides clarity in regards to the extent of allowable activities, responsibilities and accountability for such activities, and enforcement and sanctions related to breaches of these requirements.
The Penal Code codifies penalties and sanctions across the majority of Lao PDR laws, and replaces previous provisions under lower laws (Article 425: Effectiveness). However, it does not replace those penalties and sanctions under Customs Law, although it codifies these in regard to specific actions related to the export or import of specified goods (such as forest products).
The new Penal Law simplifies the decision making process relating to the imposition of penalties (for goods whose value is more than 1 million KIP) compared to education (for goods whose value is less than 1 million KIP); broadens and increases fines and imprisonment penalties relating to crime; and creates a two tiered system of offences where serious or organised (more than 3 people) crime is automatically considered a Major Offence and associated penalties are significantly higher than those for individuals acting in isolation.  There are also penalties for Breaching Regulations on Forest Management, and for Offences relating to Breach of Civil Servants’ Responsibilities or Offences relating to Breach of the Administration and Judiciary Regulations. Chapter 10 details provisions relating to Corruption.
Classified as vulnerable on the IUCN Red List, Dalbergia cochinchinensis (Siamese rosewood) was listed in Appendix II of CITES at the 16th meeting of the Conference of Parties (CoP16) in Bangkok in March 2013, following a proposal by Thailand and Vietnam. The restrictions on endangered Dalbergia cochinchinensis Siamese rosewood came into effect from June 12, 2013.
As logging is banned in all range states, the listing should prohibit international trade in Siamese rosewood logs, sawn timber, and veneers. 
Under CITES Appendix II, species cannot be exported from range state producer countries without CITES export permits issued by relevant management authorities, with these being issued, in turn, on the basis of scientific authorities confirmation that such trade will not be detrimental to the survival of the species. Range states are also obliged to pre-notify the CITES Secretariat regarding quotas for harvest and trade before any CITES export permits can be issued. For Siamese rosewood, these export obligations apply to Thailand, Laos, Cambodia and Vietnam – all of which have experienced rampant illegal exports in recent years. 
Importing countries also have clear obligations to ensure imports of Siamese rosewood are not accepted unless accompanied by valid CITES export permits.
CITES requires that export permits should not be issued without “legality acquisition” (verified legality), and that imports should not be accepted where illegal acquisition in the country of harvest is suspected.
 
Legally required documents
Applicable legislation
VIEW LESS
1.23 Legal Registration of Business
Last updated on 2022-03-01 Lack of business registration Specified RISK
Due to the changes currently being undertaken to revisions of law in Laos, it is difficult to evaluate the risk that the laws are being violated.There exists a high potential for technical non-compliance while new laws are being implemented and support regulations are being developed. However, existing regulations may be adequate to minimise this in the short term.Various legal instruments assign responsibility for project ‘proposal’, ‘endo... VIEW MOREDue to the changes currently being undertaken to revisions of law in Laos, it is difficult to evaluate the risk that the laws are being violated.
There exists a high potential for technical non-compliance while new laws are being implemented and support regulations are being developed. However, existing regulations may be adequate to minimise this in the short term.
Various legal instruments assign responsibility for project ‘proposal’, ‘endorsement’ and ‘approval’ to different agencies at different administrative levels without clearly articulating the process or the extent of consultation required
Many key legislative documents relevant to the Lao forestry sector contain imprecise clauses such as: “unless approved by the government”, “on a case by case basis as approved by the government”, or “determined in special cases to be in the interest of the national community” which leaves room for selective interpretations in granting of concessions.
The issuing of business licenses by Special Economic Zones concessional holders may establish enterprises that are outside the direct control, and monitoring authority of GoL agencies. Such businesses may be based on illegal or unauthorized exploitation of timber and provide avenues for the domestic or export of such products. 
There remains a potential for provincial authorities to issue business licence independently of national knowledge or approval processes, and such enterprises may assist in the laundering of illegal forest-based products. However, as Customs is a central agency, the capacity for such enterprises to directly export non-approved products is minimised.
  VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Description of legal requirements
VIEW MORE
New laws have been developed and introduced which seek to address some of the confusion, omissions, duplications, inconsistencies, and vagrancies that existed within and across previous laws. However, the application of the laws has not yet been undertaken and many rely on older sub-regulatory instruments being updated to reflect these new laws.
Legally required documents
Applicable legislation
VIEW LESS
1.24 Environmental Requirements for Processing
Last updated on 2022-03-01 Violation of environmental requirements Specified RISK
For all source types there is risk of or relating to: •    Lack of land survey prior to activities commencing;•    Lack of ESIAs or feasibility studies or quality studies; and •    Lack of appropriate buffers or protection zones.•    Encroachment on natural forest or protected area;  •    Clearing outside permitted land; •    Erosion via planting on steep slopes; •    Exploitation of watersheds; •    ... VIEW MOREFor all source types there is risk of or relating to: 
•    Lack of land survey prior to activities commencing;
•    Lack of ESIAs or feasibility studies or quality studies; and 
•    Lack of appropriate buffers or protection zones.
•    Encroachment on natural forest or protected area;  
•    Clearing outside permitted land; 
•    Erosion via planting on steep slopes; 
•    Exploitation of watersheds; 
•    Use of chemicals threatening water sources; 
•    Increased sedimentation of water sources; 
•    Fragmentation to habitats; 
•    Loss of habitat and biodiversity;
•    Compensation payments to affected people are often ignored, or corruption results in reduced payments; and
•    Commencing work before authority granted
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Description of legal requirements
VIEW MORE
Clarification with regard to roles, responsibilities, obligations and requirements are outlined under the Ministerial Agreement on Endorsement and Promulgation of a List of Investment Projects and Activities Required for Conducting Initial Environmental Examination or Environmental Impact Assessment, No. 8056/MONRE, 17 December 2013; Ministerial Instruction on Initial Environmental Examination of the Investment Projects and Activities, No. 8029/MONRE, dated 17 December 2013, and Ministerial Instruction on Environmental and Social Impact Assessment of the Investment Projects and Activities, No. 8030/MONRE, 17 December 2013. 
The duties and responsibilities of the Project developer are defined under s.2.8 of Ministerial Instruction No. 8029/MONRE when undertaking an IEE, and under s.2.12 of Ministerial Instruction No. 8030/MONRE for an ESIA. Both instructions set out clear timelines, the roles, responsibilities and authority of GoL agencies, public engagement and disclosure expectations, funding and fee payment requirements, and reporting and monitoring obligations .
Ministerial Agreement No. 8056/MONRE; Ministerial Instruction No. 8029/MONRE; and Ministerial Instruction No. 8030/MONRE approved and established the framework requirements for investment projects which are classified into two groups:
•    Group 1 Investment Projects and Activities that are anticipated to cause insignificant or minimal environmental and social impacts; therefore, generally required to conduct an Initial Environmental Examination; 
•    Group 2 Investment Projects and Activities that are anticipated to cause significant or major environmental and social impacts; therefore, generally required to conduct an Environmental and Social Impact Assessment.
It should be noted that while an IEE is generally only required for Group 1 developments, Ministerial Agreement No. 8056/MONRE states that an EIA is required “if these investment projects and activities are located in socially and environmentally valuable sites” as defined in an approval agreement. Therefore, all project developers are required to assess impacts under an EIA where project-related activities negatively impact on socially and environmentally valuable sites (also referred to as High Conservation Value (HCV) sites
The ESIA requirements are specified but rarely applied or undertaken to a reasonable (let alone high) standard. In any case, many concession projects have progressed to the implementation phase without any apparent submission of an ESIA document
Established and establishing business are not monitored with many agencies unclear of their regulatory responsibilities due to poorly issued approvals where such conditions are deficient, political interference, threats of violence from foreign nationals, lack of capacity, or unclear inter-agency authority. 
 
Applicable legislation
  • Forestry law No. 08/NA, (25 May 2019), 2019.
  • Agreement on Good Agricultural Practices for Worker Health, Safety and Welfare, 2011.
  • Law No 11/NA on the Promotion of Foreign Investment, 2014.
  • Law on Enterprise No 46/NA (2013) for the registration of enterprises (Article 14), capital requirements, 2013.
  • Law on Land No. 70/NA dated 21 June 2019 which provides the framework for the registration of land, approval of land-uses (and associated conditions for the protection of environmental values), and rights of such land., 2019.
  • Law on Water and Water Resources (amended) No 010/NA, 2017.
  • Ministerial Agreement on Endorsement and Promulgation of a List of Investment Projects and Activities Requiring for Conducting Initial Environmental Examination or Environmental Impact Assessment No. 8056/MONRE, 2013.
  • National Pollution Control Standards.
  • Regulation on Environmental Assessment No. 1770/STEA, 2000.
  • Regulation on the Control of Pesticides.
  • Regulations for Implementing Decree on Compensation and Resettlement of People Affected by Development Projects No. 2432/STEA, 2005.
VIEW LESS
1.25 Processing Requirements
Last updated on 2022-03-01 Violation of processing requirements Specified RISK
Agency priorities do not always align across legislation or ministries at the national and provincial level. The Lao government prioritizes development activities that contribute to the national agenda on poverty reduction. Hence, investment proposals are rarely rejected, or enforceable conditions applied. For example, MoIP plays the primary role in investment promotion by co-operating with land management agencies, and project proponents, to sup... VIEW MOREAgency priorities do not always align across legislation or ministries at the national and provincial level. The Lao government prioritizes development activities that contribute to the national agenda on poverty reduction. Hence, investment proposals are rarely rejected, or enforceable conditions applied. For example, MoIP plays the primary role in investment promotion by co-operating with land management agencies, and project proponents, to supply land for an investment; Ministry of Industry and Commerce have monitoring responsibilities but no powers to enforce provisions; the Environment Police have powers to enforce laws but have no directive to do so, and while the Forestry Department has only the right to comment on and endorse an investment proposal, and have limited power to oppose the activities even though they may result in the destruction of natural forest. VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Description of legal requirements
VIEW MORE
New laws have been developed and introduced which seek to address some of the confusion, omissions, duplications, inconsistencies, and vagrancies that existed within and across previous laws.
However, the full assessment of the laws has not yet been undertaken and many rely on older sub-regulatory instruments being updated to reflect these new laws.
 
Legally required documents
Applicable legislation
  • Forestry law No. 08/NA, (25 May 2019), 2019.
  • Law on Enterprise No 46/NA (2013) for the registration of enterprises (Article 14), capital requirements, 2013.
  • Law on Land No. 70/NA dated 21 June 2019 which provides the framework for the registration of land, approval of land-uses (and associated conditions for the protection of environmental values), and rights of such land., 2019.
  • Table No. 0008/2012 MAF of Prohibited, Special and Controlled Timber Species..
VIEW LESS
1.26 Health and Safety in the Timber Processing Sector
Last updated on 2022-03-01 Violation of health and safety requirements Specified RISK
Description of Risk reflects a knowledge of the laws and then a combination of observations made by technical experts employed in the country who have direct knowledge, and dialogue with both government and non-government sources. The unregulated use of foreign workers and poor regulatory compliance capacity means than labour conditions are variable, with standards inconsistently applied and workers often underpaid and exploited. Child labour is... VIEW MOREDescription of Risk reflects a knowledge of the laws and then a combination of observations made by technical experts employed in the country who have direct knowledge, and dialogue with both government and non-government sources. 
The unregulated use of foreign workers and poor regulatory compliance capacity means than labour conditions are variable, with standards inconsistently applied and workers often underpaid and exploited. Child labour is often used.
The humid and hot conditions, combined with a lack of air-condition and personal protective equipment means that regulated standards are not enforced, or when provided are often disregarded by workers who see limited value in such items.
Organised union representation is often limited, or unduly influenced by external officials who have no, or limited, direct association with a business.
Knowledge of, and compliance with, limited wages and entitlements, and taxation obligations can result in exploitation and an avoidance of laundering of tax obligations.
Job security is not a common right, with many employment contracts informal and subject to termination without recourse.  This places woman and other vulnerable groups at higher risk of exploitation.
Health risks to works is often not monitored, with knowledge of hazardous material often limited of absent. Many chemicals used in Lao are unregistered and unregulated.
 
References
VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Description of legal requirements
VIEW MORE
General
The employer must inspect and assess risks to safety and health within the labour unit and workplace regularly, and must report the results of the risk assessment to the Labour Inspection Agency at least once per year (Law No. 43/ NA on Labour 2013, Articles 119 and 122). 
The employer is obliged to supply individual safety gear to employees in full and in good condition according to international standards; to ensure working conditions are safe, and that there is appropriate lighting, supply of drinking water and washing water, showers, toilets etc., a room set aside for the storage of toxic substances, and other measures against electric shocks, fire, etc.; to facilitate medical examinations of employees at least once a year, and to provide an on-site first aid kit (Law No. 43/ NA on Labour 2013, Articles 43 and 119). 
Workplaces with 100 employees or fewer must appoint a person responsible for the safety and health of employees; workplaces with more than 100 employees must establish a health and safety unit or committee. Remote workplaces with at least 50 employees must hire one medical officer; for fewer than 50 employees, the workplace must include a first aid kit and have a person trained in first aid on site (Law No. 43/ NA on Labour 2013, Article 123). 
Legislation prohibits the employment of minors in activities that are unsafe, or dangerous to health (Law No. 43/ NA on Labour 2013, Article 102). An employer cannot require a pregnant woman or woman with a child younger than one year old to undertake dangerous work (Law No. 43/ NA on Labour 2013, Article 97).
The employer must record accidents within a labour unit in detail, including the cause, and report it to the Labour Administration Agency (Law No. 43/NA 2013 on Labour, Article 125). 
Companies shall provide assistance to victims of labour accidents and workers who suffer from occupational diseases (including the cost of treatment as determined in the Law on Social Insurance), and payment of normal salary or wages during medical treatment and rehabilitation for up to 6 months (Law No. 43/NA 2013 on Labour, Article 128).
The employer (logging company) shall provide yearly medical examinations for all workers. Logging companies are required to submit specific regulations for workers to the Provincial Agriculture and Forestry Office, the Provincial Forestry Sector, and Timber Exploitation Unit for acknowledgment (Instruction No. 1035/2010 MAF, Article 3).
Safety equipment should be provided to workers for logging in production forest areas (Guideline No. 2157/2006 DOF Part X Article 1). Chainsaws should be equipped with protective features (Guideline No. 2157/2006 DOF Part X, Article 2). 
Requirements of qualifications of personnel include safety competence and first aid skills (Guideline No. 2157/2006 DOF Part XI). Training should be conducted to upgrade knowledge and skills of workers on the use of safety devices (including protective clothing), first aid, and precautions against accidents (Guideline No. 2157/2006 DOF Part XIV). Use of unregistered logging machinery is prohibited (Guideline No. 2157/2006 DOF Part XIII). 
Water tanks in logging camps must be kept clean and covered as a preventive measure against the breeding of mosquitoes that may cause the spread of diseases (Regulation No. 0112/2008 MAF Article 10).
Plantations
The Lao PDR is the most heavily bombed country, per capita, in history. It is heavily contaminated with cluster munitions and other explosive remnants of the Indochina War of the 1960s and 1970s, as well as landmines to a lesser extent. Fourteen of the Lao PDR’s 17 provinces suffer from unexploded ordnance (UXO) contamination; put another way, 98 districts are contaminated, covering an area of about 87,000 km2. 
Development projects (which include commercial development projects such as plantation operations and infrastructure construction) are required to survey and clear UXO before commencing work in accordance with the national standards, and must also allocate funding to cover the cost (Notification #093 of the National Regulatory Authority for UXO/Mine Action Sector in the Lao PDR, 19 November 2012, Clause 1; NRA Announcement No. 004/NRAB, 21 January 2015). 
Completion surveys are to be carried out for all areas of land released for use, either through clearance or technical survey. Information from the completion survey is to be reported in a “Completion Survey Report”, which is to be combined with the handover certificate and other task documentation and submitted to the National Regulatory Authority.
Requirements of pesticide use are detailed in Regulation No. 2860/2010 MAF on the Control of Pesticides in the Lao PDR. These regulations contain a list of banned pesticides (55 kinds), and providers of pesticides should possess safety instructions for their correct handling and use to ensure that they are not causing negative effects to people and the environment (Articles 19 and 21).
Applying pesticides requires farmers to wear protective equipment and to properly follow label instructions to minimise the negative impacts of pesticide exposure (Article 23). Employers should provide employees with proper equipment and training in pesticide application (Article 23). 
Employment of child labour in sectors that pose a threat to health, including activities involving the application of chemicals, is prohibited (Law No. 06/2006 NA on Labour Article 41).
 
Applicable legislation
  • Law on Lao Trade Unions (Amended) No. 71/NA (dated 15-11-2017), 2017.
  • Decree on Labour Dispute Resolution No.76 /MLSW, 2018.
VIEW LESS
1.27 Legal Employment in The Timber Processing Sector
Last updated on 2022-03-01 Lack of labour contracts Specified RISK
In general, it is concluded that the implementation of labour laws are often weak and not enforced by the authorities.... VIEW MOREIn general, it is concluded that the implementation of labour laws are often weak and not enforced by the authorities. VIEW LESS
The risk applies to the following source types
  • Conversion timber
  • Plantation timber – concessions
  • Plantation timber – smallholders
  • Timber sourced via selective logging and concessions in natural production forest
  • Village forests
Description of legal requirements
VIEW MORE
Description of Risk reflects a knowledge of the laws and then a combination of observations made by technical experts employed in the country who have direct knowledge, and dialogue with both government and non-government sources. Understanding of labour laws is difficult as many regulations and documents are not available in English, there is limited or no access to records or reports
The National Assembly adopted an amended Labour Law (No. 43/NA, 24 December 2013) which was published in the Lao Gazette on 14 October 2014 and became effective on 29 October 2014. The 2013 Labour Law repeals the Labour Law (No. 06/NA, 27 December 2006) and applies to Lao and foreign employees working in the private sector or for international organizations, embassies and non-governmental organizations. 
The employer is obliged to:
•    provide training to develop employees’ skills and knowledge;
•    ensure working conditions are safe, and ensure there is appropriate lighting, supply of drinking water and washing water, showers, toilets etc., a storage room for the storage of toxic substances and other measures against electric shocks and fire.;
•    facilitate medical examinations of employees once a year and provide a first aid kit on site.
The workplace must have its own Internal Regulations, and they must not conflict with the Labour Law. They must be approved by the Labour Administration Authority. The Labour Administration Authority has a template of the Internal Regulations that companies are encouraged to use.
Normal hours of work are 6 days a week, no longer than 8 hours a day or 48 hours a week.
 
Applicable legislation
VIEW LESS
For smoother experience please switch do your desktop.
We are currently working on impoving our mobile interface. Thank you for your understanding.