(1) At its meeting on 6 December 2011, Cabinet approved the promulgation of a new Mahogany (Licensing and Branding) Decree 2011 (“Decree”). The Decree implements a comprehensive regime for the licensing and branding of Fijian mahogany.
(2) With Fiji having one of the world’s largest reserves of plantation grown, non-native mahogany forests, the licensing of mahogany purchasers and the branding of Fijian mahogany will ensure that the mahogany industry operates on a sustainable basis, and at the same time, provides maximum returns to all Fijians, including in particular, the landowners.
Licensing
(3) The Decree empowers the Mahogany Industry Council (“Council”) to grant a licence to any person or entity to purchase plantation grown mahogany logs from Fiji Hardwood Corporation Limited (“FHCL”).
(4) Subject to such directions as may be given by the Council, FHCL shall only supply plantation grown mahogany logs to those persons and entities that have obtained a licence from the Council pursuant to the provisions of this Decree.
(5) The Decree formalises regime established by the Council this year for the licensing of all purchasers of mahogany logs from the FHCL. In June 2011, the Council issued its first licence to Sustainable Mahogany Industries Limited (“SMI”) at an upfront licence fee of $1million. In addition to this upfront licence fee, SMI is also required to pay a licence fee of $1 million. In addition to this upfront licence fee, SMI is also required to pay a licence fee of $70 per cubic metre for every cubic metre of mahogany logs purchased from FHCL, as well as $25 per cubic metre reforestation fee. This fee is separate from the actual price of the mahogany logs purchased from FHCL, which will have to be paid to FHCL.
(6) Further expressions of interest will be sought from other purchasers of mahogany and this will be advertised in tomorrow’s Fiji Sun and through other agencies, in order to grant licenses to suitable purchasers of grades 3, 4 and 5 of mahogany logs from FHCL. All proposed purchasers will be required to pay a reforestation fee, together with the licence and branding fees, to ensure that the mahogany industry continues to operate on a sustainable basis.
Branding
(7)
In addition to licensing of purchasers, the Council has also established the distinct Fijian mahogany brand, which will promote the plantation grown Fijian mahogany as an exclusive brand. The Decree provides for the following Fijian mahogany brands:
(8) Branding will prevent unscrupulous buyers from overseas from exploiting the mahogany industry, by mixing and selling Fijian mahogany with mahogany timber from other places where the harvesting of native mahogany is prohibited under the Convention in International Trade in Endangered Species if Wild Fauna and Flora (‘cites Convention”).
(9) Given the urgent need to protect the plantation grown Fijian mahogany which is exempt from the CITES Convention, the Council has lodged registration of the distinct Fijian mahogany brand in numerous countries including, Argentina, Australia, Brazil, Canada, China, European Union, Guatemala, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Norway, Singapore, South Africa, Switzerland, United Kingdom and the United States of America.
(10) The Decree provides that only those timber harvested under the direction of FHCL and produced by a licensee in compliance with the Fijian Mahogany Brand Protocols and Standards (“Protocol”) shall be branded with the Fijian mahogany brand. The Protocol has been finalised and is part of the Decree, together with the sample of the licence, branding application form, as well as branding licence form.
(11) All licensees must, immediately upon the grant of licence from the Council to purchase mahogany logs from FHCL, apply in writing to the Council for the use of the Fijian mahogany brand.
(12) Upon the granting of its application for the use of the Fijian mahogany brand, all licensees must stamp the Fijian mahogany brand on all mahogany timber produced from mahogany logs purchased from FHCL whether for export or for sale and use in Fiji.
(13) All licensees shall pay a fee for the opportunity to use the Fijian mahogany brand, regardless of whether they are able to actually meet the requirements of the Protocol. The fee shall be fixed by the Council and shall be provided in the licence, or in any agreement entered into between Council and the licensee.
Harvesting Code of Practice
(14) With the finalisation of the Protocol for the Fijian mahogany brand, and in accordance with its functions prescribed in the Decree, the Council has also issued a separate and distinct Fiji Plantation Grown Mahogany Harvesting Code of Practice (“Code”).
(15) The Code applies specifically to the harvesting of plantation grown mahogany trees in any mahogany plantation land in Fiji. With clearly defined harvesting rules and procedures for all parties involved in the harvesting of plantation grown mahogany, the Code is an integral part of the Government’s policy of having a sustainable mahogany industry, which at the same time provides vital economic benefits to all Fijians.