PEFC certification and the combat against illegal logging

PEFC certification and the combat against illegal logging PEFC s Standard for the Avoidance of Controversial Sources: Technical Document Annex 4 - Appendix 7 Promoting Sustainable Forest Management for more info: www.pefc.org PEFC certification and the combat against illegal logging! PEFC and forest certification globally! Background of illegal logging! Solutions and tools available! Role of forest certification! PEFC requirements to avoid illegal wood! PEFC China Initative Promoting Sustainable Forest Management for more info: www.pefc.org 1

PEFC and forest certification globally PEFC - Programme for the Endorsement of Forest Certification schemes PEFC is an independent, non-profit, non-governmental organisation, founded in 1999 which promotes sustainably managed forests through independent third party certification. The PEFC provides an assurance mechanism to purchasers of wood and paper products that they are promoting the sustainable management of forests. PEFC and forest certification globally PEFC big events: PEFC was launched on the 30th June 1999 in Paris by representatives of eleven officially constituted national PEFC governing bodies with the support of associations representing some 15 million woodland owners in Europe and of many international forest industry and trade organizations. May of 2000 July of 2000 July of 2001 August of 2001 October of 2001 May of 2002 August of 2002 Finland, Norway and Sweden Germany France and Latvia Czech Switzerland Spain Danmark October of 2004 Russia became member, Australia (AFS), Italy, Chile be endorsed December of 2004 Portugal 2

PEFC and forest certification globally PEFC big events: March of 2005 October of 2005 December of 2005 October of 2007 Canada (CSA) Brazil USA (SFI) PEFC China Initiative launched PEFC Council International PEFC endorsed certification systems PEFC members undergoing endorsement PEFC member systems not endorsed yet (1 January 2007) 3

Forest area certified against schemes Million ha - PEFC - FSC 193 85 PEFC accounts for more than two thirds of the total area of certified forests globally (an area larger than the combined forest area of all 27 member countries of the EU) January 1 st, 2007 22 national systems endorsed covering over 196 million hectares and 3100 Chain of Custody certificates *Only PEFC s International Chain of Custody (31 March 2007) PEFC / Countries Australia Austria Belgium Brazil Canada Chile China* Czech Republic Denmark Finland France Germany Hungary* Italy Japan* Latvia Luxembourg Malaysia * Morocco * Netherlands* Norway Portugal Slovak Republic Spain Sweden Switzerland United Kingdom USA (SFI) Total Endorsed certified forest area (ha) 8 541 296 3 374 000 248 789 762 657 73 250 071 1 531 239 0 1 976 000 26 880 22 144 082 4 256 740 7 185 774 0 633 565 0 37 860 21 630 0 0 0 9 231 700 50 012 336 396 1 015 464 7 047 960 398 588 0 54 376 769 196 447 475 Number of Chain of Custody certificates 4 276 75 2 66 14 3 233 17 108 946 591 2 51 21 3 4 1 1 22 6 8 2 75 67 182 369 0 3 149 4

PEFC Forest Certification Development PEFC Certified Forests 250 200 187.68 193.81 Mill.Hectares 150 100 50 32.37 41.06 46.1 50.86 55.32 0 1999 2000 2001 2002 2003 2004 2005 2006 PEFC CoC Development PEFC Certified Companies 3500 3000 Number of Chain of Custody certificates 2500 2000 1500 1000 500 0 1999 2000 2001 2002 2003 2004 2005 2006 5

PEFC Forest Certification South America 1% Australia 3% Europe 30% North America 66% (31 December 2006) PEFC CoC Certification Europe 97.3% Australia 0.1% Asia 0.9% Africa 0.0% North America (31 December 2006) 1.2% South America 0.5% (31 December 2006) 6

Why controversial sources = illegal harvesting? Current situation and future trends (a) Illegal logging has become a highly sensitive topic with high awareness amongst politicians as well as the general public. (b) The awareness has been raised primarily by environmental NGOs together with investment and development agencies (e.g. the World Bank). (c) High political priority demonstrated by several processes at (i) national level (e.g. UK, Danish, German, Dutch public procurement policies), (ii) EU level (EU FLEGT programme) and (iii) at international level (G8). PEFC s definition of controversial sources Illegal or unauthorised harvesting. Note: Examples of the illegal and unauthorised harvesting include harvesting in forest areas protected by law as well as in forest areas officially published by government authorities (or body with the legal authority to do so) as planned to become strictly protected by law, without the government authorities (or the body with the legal authority to do so) giving permission to harvest. (Annex 4 of PEFC Technical Document 1.3.4) 7

PEFC s definition of controversial sources The definition covers: - Raw material harvesting and extraction itself, - Administrative requirements related to raw material harvesting (permissions, taxes, loyalties, etc.) - Social rights related to harvesting protected by legislation, - Protection of conservation areas designated by legislation. Existing tools to tackle the issue of controversial sources Trade oriented solutions to combat illegal logging (a) National governments public procurement policies (b) EU FLEGT program (c) Individual large companies have established their own programs for tracking wood origin in high risk countries d) Industry associations voluntary commitments (e.g. CEPI or TTF Code of Conducts) e) Other options (e.g. boycotts of some species) f) Forest Certification 8

How forest certification schemes contribute to combat controversial sources Certified raw material certified raw material originates in sustainably managed forest (not controversial in principle) chain of custody provides confidence that the claims, origin and the content of certified raw material is truthful. Un-certified raw material PEFC requires the certified company to implement measures to avoid the procurement of un-certified raw material from controversial sources. Why the verification of un-certified raw material is difficult SFM Certification Certified forests Non-certified forests C-o-C Certification Supplier 3 Supplier 2 Supplier 1 Supplier? Supplier? Supplier 1 THE COMPANY Suppliers of certified raw material (from forest to the company) are covered by forest management and chain of custody certification. But suppliers of un-certified raw material are not (so the reliability and verifiability of their claims is uncertain). 9

What is PEFC s approach to controversial sources? The reality is that due to the complexity and fragmentation of the supply chain it is not feasible to have a full chain of custody for the supply chain of un-certified raw material. However PEFC s approach requires that every company with a PEFC chain of custody certificate must have control over its un-certified raw materials and implement measures to eliminate the risk of procuring controversial sources. PEFC approach to controversial sources Supplier selfdeclaration Risk analysis 2 nd or 3 rd party verification To make all suppliers responsible for their supplies To identify supplies which require a special attention To audit / inspect the high risk supplies 10

Different actions for different supplies Certified products (products including certified raw material) Certified raw material is not controversial, Uncertified raw material verified by the supplier s C-o-C No further verification needed Un-certified products (products without certified raw material) Self-declaration Risk assessment Low risk supplies High risk supplies No further verification needed 2 nd or 3 rd party verification STEP 1: Self-declarations A self-declaration is required from all suppliers of noncertified products which includes: (a) A written statement in the contract that raw material does not originate from controversial sources, (b) A commitment to supply information on the geographical origin of the supplies (country / region), (c) A commitment to supply detailed information for high risk supplies, (d) An agreement for a second or third party audit to be undertaken for, and in the case of high risk supplies 11

STEP 2: Risk Analysis This is a mechanism that determines whether a company s supplies have a high risk of originating from controversial sources. (If so their control requires a higher level of scrutiny, i.e. a second or third party inspection). Risk = likelihood of procuring illegal wood depends on: Country of origin: in some countries / regions likelihood is higher than in others Complexity and uncertainty of supply chain: In more complex, unclear, unidentified supply chain the likelihood that illegal wood is procured is higher than in simple, clear and data supported supply chains Chain complexity High Low Low HIGH RISK High Country of origin STEP 2: Risk Analysis New PEFC Appendix gives examples:! List of indicators for high likelihood at country or regional level (e.g. UN Security Council timber ban, Country with low level of forest law enforcement and high level of corruption, Country with decrease in forest area, FAO statistics www.transparency.org, www.illegallogging.info, globalwitness.org, etc.)! List of indicators for low likelihood at supply chain level (e.g. certified to another certification system, supplies verified through licensing mechanisms such as FLEGT) 12

List of indicators for high likelihood at country or regional level Indicators Examples of external reference sources) The country / region is covered by UN Security Council ban on timber exports. The country / region is known as a country with low level of forest law enforcement and high level of corruption. a Currently applied to Liberia since July 2003 (UN Security Council resoluti on 1521 (2003) http://www.un.org/docs/sc/unsc_resolutions03.html In defin ing this indicator, t he organisation can use its internal surveys or results of surveys of external governmental or non -governmental organisations active in monitoring forest law enforcement and corruption such as the World Bank (http://info.worldbank.org/governance/kkz2004/sc_ country.asp ), the UK based Chatham House, (www.illegal -logging.info ), Environmental Investigation Agency ( www.eia-international.org, Global Witness ( www.globalwitness.org ), Transparency International (www.transparency.org ), etc. The country is one where official FAO statistics show a decrease in forest area FAO Global Forest Resources Assessment 2005 (ftp://ftp.fao.org/docrep/fao/008/a0400e/a0400e1 4.pdf ) The organisation has received comments supported by reliable evidence from their customers or other external parties, relating to its supplies with respect to controversial sources, which have not been disp roved by the organisation s own investigation. List of indicators for high likelihood at country or regional level 13

List of indicators for high likelihood at country or regional level List of indicators for high likelihood at country or regional level 14

List of indicators for high likelihood at country or regional level List of indicators for high likelihood at country or regional level 15

List of indicators for high likelihood at country or regional level List of indicators for high likelihood at country or regional level The country is one where official FAO statistics show a decrease in forest area FAO Global Forest Resources Assessment 2005 (ftp://ftp.fao.org/docrep/fao/008/a0400e/a0400e1 4.pdf ) 16

List of indicators for low likelihood at supply chain level List of indicators for low likelihood at supply chain level Supplies declared as certified against a forest certification scheme (other than PEFC endorsed ) supported by a forest management or chain of custody certificate issued by a third party certification body. The organisa tion shall be able to provide evidence that the certification scheme includes: - third party certification of forest management which covers activities defined by the term controversial sources, - third party certification of chain of custody, - a verification m echanism that non -certified raw material does not originate from controversial sources where percentage based claims apply. Examples of PEFC non -endorsed forest certification schemes: Forest Stewardship Council, etc. Raw material certified by other than PEFC endorsed schemes is low risk (low likelihood at supply chain level) 17

List of indicators for low likelihood at supply chain level Supplies verified by governmenta l or non-governmental verification or licensing mechanisms other than forest certification schemes focused on activities covered by the term controversial sources. The organisation shall be able to provide evidence on the scope of the verification or licensing mechanism. Examples of verification and licensing mechanisms: EU FLEGT (http://ec.europa.eu/comm/development/ body/theme/forest/initiative/index_en.htm ) Tropical F orest Trust (www.tropicalforesttrust.com ), Raw material supported by FLEGT licenses or other assurances is low risk (low likelihood at supply chain level) List of indicators for low likelihood at supply chain level The company can consider a supply as low risk (low likelihood at supply chain level) if: - has documentation which verifies the whole supply chain and FMU, - has documentation which proves compliance with legal requirements. 18

STEP 3: 2 nd and 3 rd party verification programme for high risk supplies Identification of the supply chain On site inspections (sampling based) - Suppliers in the supply chain, - Forest Management Unit (FMU) Corrective and preventive measures Where are the detailed requirements described? The PEFC international Chain of Custody standard (PEFC Technical Document Annex 4, chapter 3.6) lists requirements for the avoidance of controversial sources (effective since October 2004). The Appendix 7 to Annex 4 provides detailed guidance on how the Annex 4 requirements are to be implemented (effective since October 2006). The compliance with both Annex 4 and the Appendix 7 are subject to the an independent audit as a part of the company s chain of custody certification. 19

PEFC China Initiative PEFC China Initiative Main task of PEFC China Initiative To increase the market awareness of PEFC Scheme in China and promote among the main stakeholders. Offer the information service and technical support for Chinese forestry and wood industry in PEFC certification. 20

PEFC China Initiative Room 1507, KUNTAI International Mansion, Yi 12, Chaowai Avenue, Chaoyang District, Beijing 100020 Tel: 86 10 59251256 Fax: 86 10 59251259 For more information!www.pefc.org www.pefcasia.org Thank you for your attention! 21