Keep It Legal
Keep It Legal
Best Practices for Keeping
Illegally Harvested Timber
Out of Your Supply Chain
By Frank Miller, Rodney Taylor and George White
A guide for organizations wishing to extend
a program of responsible purchasing to further
address difficulties arising from possible trade
in “illegal” forest products.
A publication of WWF’s Global Forest & Trade Network
Frank Miller, Rodney Taylor, and George White | July 2006
The authors gratefully acknowledge the assistance of colleagues within WWF and at other organizations
in the preparation of this document. We would particularly like to thank Charles Townsend for his help with
initial consultations with companies trading in timber products in China and the UK and Hugh Speechly
(UK Department for International Development), Jeff Hayward and Richard Donovan (Rainforest Alliance
Smartwood Program), Sofie Beckham (IKEA), and Ruth Nussbaum (ProForest) for their invaluable peer
review comments on an earlier draft of this document.
This publication was completed with active support from the WWF and IKEA Co-operation on Forest
and Cotton Projects: A partnership to promote responsible forestry and better cotton production.
1 © WWF-Canon / Edward PARKER
© 2006 WWF International. All rights reserved.
1
2 © WWF-Canon / Edward PARKER
Any representation in full or in part of this publication must mention the title
2 4
3 © WWF-Canon / Tim PORTER
and credit the above-mentioned publisher as the copyright owner.
3
4 © WWF-Canon / Alain COMPOST
CONTENTS
2 Introduction
17 Reducing the Risk of Trading
in Illegal Timber
5 The Illegal Logging Problem
17 Certified Timber—the Least-Risk Option
5 Negative Impacts in the Country Where
20 Uncertified Timber—Reducing the Risk
Illegal Logging Takes Place
21 Step 1—Risk rate suppliers
5 Implications for Those Buying and
23 Step 2—Select a verification approach
Supplying Illegal Timber
24 Step 3—Make further inquiries
6 Countries Where Illegal Harvesting
where needed
Takes Place
25 Step 4—Improve traceability and
verify legality
10 Developing Policies on
Legal Compliance
29
Appendix 1
Model Questionnaires
10 Timber Purchasing Policies in General
38
Appendix 2
10 Policy on Legal Compliance—Defining
Scenario Tables for Risk Ratings
the Problem
43
Appendix 3
12 Defining Your Response to the Problem
CITES-Listed Species
13 Defining “Legal” Timber
44
Appendix 4
14 Defining a Breach of the Law
The WWF Global Forest & Trade Network
15 Addressing Bad or Unfair Laws
48
Appendix 5
16 Developing Operational Procedures
Examples of Responsible Purchasing Policies
for Forest Products
51
Appendix 6
Glossary
54
Appendix 7
Country Legal Documentation Lists
Contents
1
INTRODUCTION
This manual has been developed by WWF’s Global Forest &
WWF has produced this manual with the intention that it should
Trade Network (GFTN) for use by organizations wishing to
become the first point of reference for all parts of the timber sup-
extend a program of responsible purchasing to further address
ply chain seeking to establish what represents current best prac-
difficulties arising from possible trade in “illegal” forest prod-
tice with respect to buying, processing, and selling legal timber
ucts. The manual has been developed to add detail to legality
and timber products. It consolidates the efforts of many different
issues encountered by companies adopting a responsible pur-
parties, including those companies at the forefront of efforts to
chasing program.
avoid use of illegally harvested timber.
The manual is aimed at any medium-size or large enterprise
that purchases forest products, including processors, importers,
The Keep it Legal Manual is
manufacturers, wholesalers, and retailers. It may also be useful
presented in five parts:
to smaller enterprises.
Introduction—describes the purpose of
The manual outlines the various ways in which purchasing
this manual and its relationship to the GFTN
organizations can demonstrate compliance with best practice
guide to Responsible Purchasing of
and ultimately their own purchasing policies. It combines tried
Forest Products.
and tested mechanisms and new approaches and definitions,
The illegal logging problem—describes
based upon on GFTN’s exetensive experience in the develop-
the nature and magnitude of the illegal log-
ment of responsible purchasing programs. These approaches are
ging problem and the threat it poses to
designed to make the process of “keeping it legal” easier.
forests and the people and businesses that
depend on them.
Developing policies on legal compliance—
The principles outlined in this manual are
explains the challenges involved in develop-
in line with WWF Global Forest & Trade
ing a clear, fair, and realistic policy on legal
Network (GFTN) participation requirements,
compliance.
and the manual will support GFTN trade
Reducing the risk of trading illegal timber—
participants in meeting those requirements.
details a systematic approach to identifying
and eliminating the risk of illegal wood enter-
ing your supply chain.
The Keep It Legal manual is a living document, so it will be
Appendices—various practical tools that you
regularly updated using feedback from users to provide new
can adapt for use in your company.
information about
what is happening in major exporting countries and in the
critical supply regions,
developments in supply chain management, and
the wider global debate on the prevention of illegal logging.
2
WWF GFTN Keep it Legal
WWF GFTN’s Responsible Purchasing
of Forest Products
The WWF GFTN publication Responsible Purchasing of Forest
Products (the Responsible Purchasing Guide) sets out a step-
wise approach for organizations purchasing timber and timber
products. It describes how companies can systematically estab-
lish a management system that will aid them in buying timber and
timber products in a responsible manner that steers them away
from suppliers involved in illegal and unsustainable logging. At the
same time the purchasing program supports and rewards those
organizations that are sourcing product from forests progressing
toward sustainable forest management. A key objective for those
using the guide is the development and promotion of credible
forest management certification and the purchase of timber prod-
ucts from certified forests.
The Keep It Legal manual is for purchasing companies that need
to focus their efforts on tackling illegal issues before, or as a
part of, progressing up the stepwise approach described in the
Responsible Purchasing Guide.
GFTN recommends that an organization familiarize itself with the Responsible Purchasing Guide before beginning
to use the Keep It Legal manual. The two documents are highly compatible, and the organization should adopt
recommendations for best practice from both sources where the issues to be managed are complex.
Note on this symbol
Refer to the
Responsible
This document makes references to the Responsible Purchasing Guide.
Where you see this symbol it is recommended that the Guide be referred to
Purchasing Guide
for more detail. The Guide is available at www.panda.org/gftn.
for more information
As a supplement to this manual, GFTN will publish specific
The principles outlined in this manual are in line with WWF
guides for major timber-producing and exporting countries.
Global Forest & Trade Network (GFTN) participation require-
These Country Guides (www.panda.org/gftn) discuss the issues
ments, and the manual will support GFTN trade members in
encountered in those countries in detail and offer practical guid-
meeting those requirements. Legality is just one step on the road
ance to organizations sourcing timber from those countries.
towards certification, and whilst it can be a major challenge in
itself to achieve a measure of legality, sight should not be lost of
the overall objective: responsible forest management.
Introduction
3
The Keep It Legal manual is designed so that it can be used in
different countries and by different parts of the supply chain.
This vertical and geographic integration of approaches offers
potential benefits to the whole supply chain by
reducing duplication of effort,
promoting the harmonization of practices within the indus-
try, so that vendors selling to several customers can hold a
single set of answers,
clarifying what questions should be asked of suppliers to
give assurance,
suggesting traceability systems that are compatible with
chain-of-custody procedures,
outlining a risk assessment process to rate companies,
promoting a systematic and transparent process within
the supply chain.
Many organizations involved in the timber supply chain regard
purchasing as their most critical commercial activity. The Keep
It Legal manual is designed to be a “how-to” manual to support
an organization’s overall responsible purchasing strategy.
4
WWF GFTN Keep it Legal
THE ILLEGAL LOGGING PROBLEM
The global trade in illegally extracted timber is a multibillion-
and poor forest management can also lead to increased access
dollar industry. Illegal logging occurs when timber is har-
to, and unsustainable use of, forests and an increase in activi-
vested, transported, processed, bought, or sold in violation
ties such as illegal mining, bushmeat hunting, and unauthorised
or circumvention of national or sub-national laws. Although
clearing for new settlements.
generally portrayed as a problem in tropical forests, illegality
also occurs in developed countries and economies in transition.
Forest crime also affects human communities
Negative Impacts in the Country
through loss of natural forest resources and
Where Illegal Logging Takes Place
sometimes through intimidation and violence.
The hundreds of millions of dollars of tax rev-
Illegal logging takes place in many countries on a small scale
enues that are lost as a result of forest crime
and has limited impact on the environment or society in general.
also have a wider social impact.
However, in a significant number of countries, illegal logging is a
major problem that poses a serious threat to forests, communities,
and wildlife. The negative impacts of illegal logging include:
Implications for Those Buying
encouragement of corruption and bad practices
and Supplying Illegal Timber
major revenue loss for governments
Companies that buy products containing illegal timber may do
loss of long-term income and security for forest-based
so knowingly or because they have failed to exercise due dili-
communities
gence over their supply chains. Either way, the potential negative
degradation and clearing of forests and consequent loss
consequences of trading in such products include the following:
of habitat for plant and animal species
vulnerability to NGO criticism and consequent loss
increased vulnerability to natural disasters such as erosion,
of reputation
river silting, landslides, flooding, and forest fires
loss of business contracts because of failure to meet the pro-
Loss of long-term supplies of timber, threatening both
curement policies of an end-user company or government
quality and quantity
agency. In the first case, for example, WWF GFTN trade
Undercutting of and unfair competition with responsible,
members are required to eliminate illegally sourced timber
well-managed forestry, potentially leading otherwise com-
from their supply chains; in the second case, the British gov-
mitted managers from legal practices to illegal ones
ernment purchasing officers are required to purchase only
Illegal logging has a particularly devastating effect on biodiver-
sustainable or legal timber; see www.proforest.net/cpet
sity because the perpetrators often deliberately target remain-
potential prosecution for breach of trade regulations. In
ing high-conservation-value forests, including protected areas,
December 2005, EU member states adopted proposals to
which contain the highly valuable species that have been over-
implement a timber import licensing scheme. Once the
exploited elsewhere.
scheme is operational, it will allow EU customs authorities
to prevent the import of timber from key exporting partner
Forest crime also affects human communities through loss of nat-
countries (recognized as voluntary partners) if the product is
ural forest resources and sometimes through intimidation and vio-
not accompanied by a license attesting its legality
lence. The hundreds of millions of dollars of tax revenues that are
uncertain supply of raw material, because illegal sources are
lost as a result of forest crime also have a wider social impact.
seldom sustainable
Illegal logging is part of a larger problem that includes issues of
forest governance and corruption. These extend far beyond some
individuals violating resource-management laws. Poor governance
The Illegal Logging Problem
5
Countries Where Illegal
Harvesting Takes Place
Although exact figures are difficult to obtain (given the nature
of the activity), recent estimates of the scale of illegal logging in
some countries are given in Table 1.
Table 1. Country Sources of Illegally Harvested Timber
Country
American Forest & Paper
Other estimates
Source of other estimates
Association estimates of
of illegal logging
“suspicious” timber
Eastern Europe
Estonia
50% of production
Taiga Rescue Network 2005 (1)
50% of production
Estonian Green Movement 2004 (2).
Latvia
20% of production
Taiga Rescue Network 2005 (3)
15–20% of production
WWF Latvia 2003 (4).
Russia
15–-20% of production
25% of exports
World Bank 2005 (5)
15–30% of exports
25–50% of exports
USDA Foreign Agricultural Service
2005 (6)
30% of production
House of Commons Environmental
(one-third)
Audit Committee (UK) 2006 (7)
20–60% of production
IUCN 2005 (8)
Africa
Cameroon
30% of production
50–65% of production
World Bank/WWF Alliance 2002 (9)
Equatorial Guinea
30% of production
Gabon
30% of production
Ghana
30% of production
50% of production
The Forestry Commission
of Ghana 2003 (10)
Liberia
30% of production
100% of production
National Transitional Government
of Liberia (NTGL) 2005 (11)
6
WWF GFTN Keep it Legal
Country
American Forest & Paper
Other estimates
Source of other estimates
Association estimates of
of illegal logging
“suspicious” timber
Asia Pacific
China
30% of production
50% of production
USDA Foreign Agricultural Service
2005 (12)
30-32% of export products
Indonesia
60% of production
80% of production
House of Commons Environmental
Audit Committee (UK) 2006 (13)
55% of plywood exports
83% of production
CIFOR 2004 (14)
100% of log exports
Malaysia
5% of production
70% of log imports
Papua New Guinea
20% of production
65% of log exports
Forest Trends 2006 (15)
Latin America
Brazil
15% of production
37% of production
Imazon 2005 (16)
15% of export products
Ecuador
70% of production
Ecuador’s Wood Industry
Association 2005 (17)
Peru
70-90% of production
ITTO 2002 (18)
80% of production
The Peruvian Environmental Law
Society, 2003 (19)
> 90% of exports
ParksWatch 2005 (20)
(mahogany)
Note: Illegal harvesting does not just occur in developing countries. It occurs to a limited extent across Europe and North
America. Good regulatory systems that are enforced, however, ensure that it is kept to a minimum. For more information on
illegal logging go to www.illegal-logging.info, a Web site sponsored by the Department for International Development, U.K.
Government and managed by the Royal Institute for International Affairs, Chatham House, London.
This table is not exhaustive and is for illustrative purposes only. Countries not specifically mentioned may have levels of illegal
logging which are unmeasured or not reported to date. It would be incorrect to assume that if a country is absent from this table
that there is no problem.
All estimates of “suspicious timber” from American Forest & Paper Association from: Seneca Creek Associates and Wood
Resources International, 2004, “Illegal” Logging and Global Wood Markets: The Competitive Impacts on the U.S. Wood Products
Industry.” Prepared for American Forest & Paper Association. Available from www.afandpa.org.
(Table 1 Notes continued next page)
The Illegal Logging Problem
7
(Table 1 notes, continued)
(1,3) Taiga Rescue Network, 2005, Sweden: Forest Industry—Giant with Big Timber Footprints in the Baltic Region. p. 2.
http://www.taigarescue.org/_v3/files/pdf/160.pdf.
(2) Estonian Green Movement, 2004, Il egal forestry and Estonian timber exports. p. 2.
http://www.il egal-logging.info/papers/Il egal_Forestry_and_Estonian_Timber_Exports.pdf.
(4) WWF Latvia, 2003, The features of il egal logging and related trade in the Baltic Sea region. p. 5.
http://www.il egal-logging.info/papers/Il egal_logging_in_Baltic_Sea_region.pdf.
(5) World Bank, 2005, Forest Law Enforcement Governance (FLEG) in Eastern Europe and Northern Asia (ENA-FLEG). p. 8.
http://siteresources.worldbank.org/INTRUSSIANFEDERATION/Resources/ref1_eng.pdf.
(6) USDA Foreign Agricultural Service GAIN Report, 2005, Russian Federation Solid Wood Products Forestry Sector Continues
to Struggle 2005. p. 4. http://www.fas.usda.gov/gainfiles/200511/146131434.doc.
(7,13) House of Commons Environmental Audit Committee, 2006, Sustainable Timber: Second Report of Session 2004–05. p. 12.
http://www.publications.parliament.uk/pa/cm200506/cmselect/cmenvaud/607/607i.pdf.
(8) IUCN Global Temperate and Boreal Forest Programme IUCN Office for Russia and the Commonwealth of Independent
States, 2005, The Beginning of the ENA FLEG Process in Russia: Civil Society Insights. p. 21.
http://research.yale.edu/gisf/assets/pdf/tfd/logging/ENA%20FLEG/ENA%20FLEG_CivilSociety%20INsights.pdf.
(9) World Bank / WWF Al iance, 2002, Forest Law Assessment in Selected African Countries. p. 19.
http://www.il egal-logging.info/papers/WWFWorldBankForestLawAssessment.pdf.
(10) The Forestry Commission of Ghana, 2003, Keynote Address by Hon. Prof. Dominic K. Fobi—Minister for Lands & Forestry:
http://www.fcghana.com/news/ministers_speech_afleg.htm.
(11) Al logging concessions in Liberia were cancel ed in Feb 2006 fol owing a report by the Forest Concession Review
Committee—Phase 3, 31 May 2005, which had found that no individual concession holder was able to demonstrate sufficient
level of legal compliance. UN Security Council sanctions were re-imposed on Liberian timber exports in December 2005:
http://www.il egal-logging.info/news .php?newsId=1257.
(12) USDA Foreign Agricultural Service GAIN Report, 2003, People’s Republic of China Solid Wood Products Annual 2003. P. 5.
http://www.fas.usda.gov/gainfiles/200308/145985736.pdf.
(14) Tacconi L, Obidzinski K, Agung F, 2004. Learning Lessons to Promote Certification and Control Il egal Logging in Indonesia,
Report for the WWF/TNC Al iance to Promote Forest Certification and Combat Il egal Logging in Indonesia, Centre for
International Forestry Research.
(15) Forest Trends, 2006, Logging, Legality, and Livelihoods in Papua New Guinea: Synthesis of Official Assessments of the
Large Scale Logging Industry Volume I. http://www.forest-trends.org/documents/png/index.php.
(16) Figure based on data from IMAZON (Amazon Institute of People and the Environment) and Brazil’s environmental agency
Ibama. Imazon, 2005, Human Pressure in the Brazilian Amazon. P. 5. http://www.imazon.org.br/especiais/especiais.asp?id=318.
(17) Office of the United States Trade Representative (USTR), 2005, Interim Environmental Review of the United States-Andean
Free Trade Agreement http://www.ustr.gov/assets/Trade_Agreements/Bilateral/Andean_FTA/asset_upload_file27_7305.pdf.
(18) ITTO, 2002, Achieving the ITTO Objective 2000 and Sustainable Forest Management in Peru—Report of the Diagnostic
Mission. P. 4, http://www.itto.or.jp/live/Live_Server/214/E-C35-15-EX.doc.
(19) The Peruvian Environmental Law Society, 2003, Case Study on the Development and Implementation of Guidelines for the
Control of Il egal Logging with a view to Sustainable Forest Management in Peru.
(20) ParksWatch, 2005, An Investigation of Il egal Mahogany Logging in Peru’s Alto Purús National Park and its Surroundings.
The report confirmed nearly al of Peru’s exports of Mahogany were il egal: http://www.parkswatch.org/spec_reports/logging_
apnp_eng.pdf. See also Natural Resources Defense Council press release, April 2005:
http://www.nrdc.org/media/pressreleases/050414.asp.
8
WWF GFTN Keep it Legal
Many of the countries identified in Table 1 are among the world’s
major timber exporters. It is thus clear that large volumes of illegal
Key Points
timber are being harvested. Although it is becoming marginally
more difficult to trade illegal timber because of various restric-
tions by some governments and other concerned parties, logic
Companies trading in forest products face
dictates that huge volumes of illegal timber and timber products
exposure to great risks if they ignore illegal
are being traded internationally. The objective of this manual is
logging issues. The problem is not confined
to support trading organizations that wish to avoid buying illegal
to one or two countries, and most companies
timber. It covers company policies and methods for identifying
that trade in wood products will be exposed to
suppliers that are more likely to be supplying illegal timber.
this issue at some point.
The issue of il egal logging is not one that
can be solved simply or quickly in many
cases, but as with many problems, the solu-
tion starts with recognition that the problem
exists. This manual guides organizations
through the complex issues and shows that
with careful and dedicated management, any
company can use an array of solutions to
manage its trade.
If the problem of il egal logging continues to
VEY
be ignored, many of the world’s most impor-
HAR
tin
tant productive and biological y diverse for-
Mar
/
ests, and the people and industries that they
support, wil be further degraded or disappear.
WWF-Canon
©
It is in everyone’s interest that the forest
industry and those that trade its products take
an interest, take action, and “keep it legal”.
The Illegal Logging Problem
9
DEVELOPING POLICIES ON LEGAL COMPLIANCE
Timber Purchasing Policies in General
Your policy should also include references to
periodic review of the policy and its associated targets (pos-
Defining a company-wide policy with regard to timber purchas-
sibly as part of a larger environmental or “corporate social
ing is the first step in the process for excluding illegal timber
responsibility” reporting agenda),
from your supply chain. Without this first step the whole process
will fail. Setting the policy has to be led by senior management.
communication of the policy and its associated targets to
A timber purchasing policy may form a component of your
key audiences.
company’s overall purchasing policy.
The policy and any associated documents should be the respon-
sibility of senior management within your organization and
There is no right, wrong, or perfect set of policies to underpin the
should have the same level of endorsement as any other of your
effort to achieve more responsible sourcing of forest products.
organization’s policies.
However, the policy should be aligned with SMART targets, that
is, be specific, measurable, achievable, realistic, and time bound.
Appendix 5 contains model policies for forest product purchas-
It is also important that you consider the consequences of the
ing that can be adapted for use by your organization. Examples
policy prior to publishing it. Strong policies, for example, may
of company and government policies for forest product purchas-
have a financial cost that renders them unsustainable; weak poli-
ing can be found on the web at: http://www.forestandtradeasia.
cies may attract criticism from stakeholder groups. A workable
org/guidance2/Asia_Pacific/English/2/387/54.
balance must be struck.
WWF GFTN’s guide Responsible
Refer to the
Policy on Legal Compliance—
Purchasing of Forest Products
Responsible
(Responsible Purchasing Guide,
Defining the Problem
Purchasing Guide
www.panda.org/gftn) describes a
for more information
The starting point for a specific policy on legality is to clearly
well-established stepwise approach
identify the problem that it is meant to address. The content of
that begins with the formulation
the policy, and procedures created to support it, should ultimately
of a purchasing policy. The stepwise approach is practical and
target the problem identified by your organization.
well reasoned, and takes account of commercial realities by
phasing out the purchase of forest products from potentially
Most organizations aspire to full legal compliance on the part of
illegal sources.
all actors involved in the supply and manufacture of the products
they purchase. However, you may need some prioritization to
The scope of the policy may vary from one organization to the
focus your resources on preventing or avoiding the kinds of ille-
next, for example, through the inclusion or exclusion of for-
gal activities that are of highest concern to your staff, customers,
est products that are intended for resale only, sold under “own
shareholders, financiers, and other stakeholders.
brand” or “store brand” only, procured for service use and not for
resale (for example, copier paper), or used within the fabric of
Of the many possible legal compliance problems, illegal log-
buildings (for example, wooden doors or floors in new offices or
ging, related trade, and corruption are the focus of this man-
factories). Best practice dictates that the scope of your policy be
ual. WWF defines these as occurring when timber is harvested
set to apply to the business’s area of largest impact; for example,
or traded in violation of relevant national or sub-national laws
if you are a retailer, you could focus on the products you sell
or where access to forest resources or trade in forest products is
before your copier paper. You can also change the scope of your
authorized through corrupt practices. This generic definition of
policy over time; for example by starting with a focus on traded
the problem has three key elements:
products and later expanding the scope to include paper, furni-
ture and building materials for your own use.
Illegal harvesting. Timber cut or removed without the
required license or in breach of a harvesting license or law.
This includes timber that is stolen.
10
WWF GFTN Keep it Legal
Illegal trading. Timber, or a product containing timber,
Table 2 provides examples of how other organizations have
bought, sold, exported, or imported and processed in
defined the illegal logging problem. The variety of definitions is
breach of the laws, including laws implemented under the
an indication of the complexity of the issue. The tipping point
Convention on International Trade in Endangered Species.
at which activities become illegal tends to be a reflection of the
Corruption. Authorization to harvest or trade logs or tim-
philosophy of the organization concerned, combined with any
ber products is secured through corrupt application of laws
specific geographical considerations.
or administrative procedures.
Table 2. Other Definitions of Illegal Logging
Organization
Definition
Reference
American
Theft of timber or logs; cutting in parks, reserves or similar areas;
American Forest &
Forest Products
and cutting where government approvals are obtained by corrupt practices.
Paper Association
Association
(AF&PA) 2004. (1)
European
Harvesting timber in violation of national laws is illegal. Illegal harvesting
European Commission
Commission
may include not only using harvesting practices that contravene the regu-
2004. (2)
lations but also using corrupt means to gain harvesting rights, extraction
without permissions or from protected areas, cutting protected species
or extracting timber in excess of agreed limits. Beyond harvesting, illegal
practices may also extend to transport infringement, illegal processing and
export, nonpayment of taxes or charges, and misdeclaration to customs.
Greenpeace
Illegal logging takes place when timber is harvested, processed, trans-
Greenpeace 2005) (3)
ported, bought or sold in violation of national laws. Laws can be violated at
many different stages of the supply chain and can include:
Obtaining concessions illegally (for example, via corruption and bribery)
Cutting protected tree species or extracting trees from a protected area
Taking out more trees and more undersized and oversized trees than is
permitted or trees outside an agreed area
Illegal processing and export
Fraudulent declaration to customs of the amount of timber being exported
Nonpayment or underpayment of taxes
Use of fraudulent documents to smuggle timber internationally.
Malaysian
In Peninsular Malaysia, three categories are used to classify forest offences.
Malaysian Timber
Timber Council
Council 2004. (4)
Category 1 covers offences involving logging without license, logging
outside licensed area and unauthorized construction of infrastructure and
forest roads. Category 2 covers encroachment of forest reserves for agri-
cultural activities and settlement. Category 3 covers other forest offences
that involve felling of unmarked trees, cutting trees below the cutting limit,
unlicensed workers, contractors with no valid sub-license, unregistered
machinery plus other breaches of rules and regulations committed within
and outside the forest reserve.
(Table 2 continued next page)
Developing Policies on Legal Compliance
11
Table 2. (continued) Other Definitions of Illegal Logging
Organization
Definition
Reference
Supreme Court
An illegal forest felling operation (cutting) is
Resolution No.14,
Decision in
cutting of trees, bushes and lianas without a harvesting license or authority,
Russian Federation
Russia
Supreme Court 1998
cutting with a harvesting license or authority issued with abuse of the
(The definition is
existing cutting-practice rules,
related to the applica-
cutting carried out at the wrong site, beyond a site’s borders or
tion of Article 260 of the
exceeding the set quantities
Criminal Code of the
cutting of species or of trees, bushes and lianas that are not covered by
Russian Federation). (5)
the harvesting licence or authority,
cutting before and after the logging period fixed in the harvesting
licence or authority,
cutting trees, bushes and lianas that are forbidden by Resolution
No. 155 of the Government of the Russian Federation June 1, 1998,
cutting after the announcement of a temporary prohibition, restriction
or complete discontinuation of forest user activities or the right to use
a forest area.
World Business
Sourcing of illegal wood takes place when unprocessed wood is
WWF/WBCSD Joint
Council on
procured in the absence of the seller’s legal right to sell or harvest.
Statement on Illegal
Sustainable
Illegal logging takes place when timber is harvested in violation of
Logging 2005. (6)
Development
relevant forestry and environmental laws and regulations.
Illegal forest products trade involves the procurement, processing,
distribution and marketing of products made from wood that has been
obtained by illegal sourcing or illegal harvesting and/or are not in com-
pliance with relevant national and international trade laws.
(1) ‘Illegal Logging and Global Wood Markets: The Competitive Impacts on the US Wood Products Industry.
Commissioned by American Forest and Paper Association. Prepared by Seneca Creek Associates. November 2004.
(2) Briefing Note Number 03. FLEGT Briefing Notes, European Commission, April 2004.
(3) Lawless: How Europe’s Borders Remain Open to Trade in Illegal Timber (Greenpeace Fact File, October 2005)
http://www.greenpeace.org/raw/content/international/press/reports/lawless-illegal-timber.pdf.
(4) Malaysian Timber Council, www.mtc.com.my
(5) Resolution No. 14, Russian Federation Supreme Court from November 5, 1998 (The definition is related to the application
of Article 260 of the Criminal Code of the Russian Federation).
(6) WWF/WBCSD Joint Statement on Illegal Logging for The Forest Dialogue (March 2005)
http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=13627
Defining Your Response to the Problem
transport, customs, pollution or money laundering); many ingre-
dients besides wood (finishes, other materials, packaging), and
In defining the scope of its purchasing policy, your organiza-
many phases of production (harvesting, hauling, milling, shipping,
tion will need to balance the range of legal compliance issues of
manufacturing, trading, and end use). In addition, a full approach
concern to stakeholders with the need to contain auditing costs.
could address the procedures leading up to the grant of a timber
A comprehensive approach to determining the legality of forest
permit, including adherence to planning laws, impact assessment
products could cover many issues beyond forestry (for example,
requirements, tendering procedures, contractual “fairness” provi-
adherence to laws relating to taxes, labour, health, corporations,
sions, and absence of any suspicion of corruption or collusion.
12
WWF GFTN Keep it Legal
Your policies need to prioritize the legal compliance problems
Although pervasive corruption is a major cause of poor forest
to be addressed; for example, is the focus on illegal logging or
governance, this manual focuses on illegal logging and related
does it also include labour and pollution laws in factories further
trade. Experience has shown that both illegal harvesting and
along the supply chain? The following approaches can be used
related trade can be addressed directly through responsible pur-
to find this balance:
chasing, whereas pervasive corruption is a broader problem that
generally requires a different set of responses. (For mechanisms
Limit the scope of inquiry to offences that relate to forest
to address corruption, go to Transparency International Web site
management. For example, you could focus your inquiry
at www.transparency.org/policy_and_research/ach.)
on legal compliance during harvesting, transport, and trade
in the source country, and only investigate activity in inter-
mediate countries so far as they relate to “laundering” or
Defining “Legal” Timber
traceability of the origins of the timber.
Concentrate routine inquiries on what can be readily
To direct your organization’s purchasing away from the products
verified (for example, existence of a valid permit to harvest
of illegal logging and in favour of legal operators, you will need
in the area where the timber was sourced), while investi-
to define what you mean by “legal” or acceptable sources. That
gating forms of illegality that are harder to pinpoint (for
definition should exclude products or activities that fall within
example, fraudulent transfer-pricing schemes) if and when
the scope of the problem defined in your policy. The scope of
a suspicion is raised.
concern may be broad, and thus be difficult to comply with, or
Use a stepwise approach that starts with simple checklists
narrow, and run the risk of not addressing key issues. A balance
and becomes more complex as experience and confidence
between these extremes needs to be struck.
are gained.
WWF GFTN has developed a two-tiered approach to defining
A key role of your policy on illegal logging is to establish the
and verifying legal compliance (see Table 3 below). This
framework upon which a culture of legal purchasing can be
approach may be used by companies that would like to join a
built. A good policy will precisely define the issues that it seeks
Forest & Trade Network or may be adapted by companies or
to address and will identify what is and what is not acceptable
procurement agencies that prefer to remain outside GFTN.
to your organisation. The policy should clearly convey the
values of your organization and show how these values will
be upheld.
Table 3. Known Licensed Source and Verified Legal Timber
Basic legal compliance check
Known licensed source
The purchaser knows where the timber was grown and can identify the
harvesting entity.
The harvesting entity has a legal right to harvest (has a harvesting permit
and authorization from the forest owner).
The chain of custody is unbroken.
Full legal compliance check
Verified legal timber
Timber was legally harvested.
Charges were paid.
Timber was legal y traded (including compliance with CITES laws; see Appendix 3).
Third-party audit of legal compliance was conducted and chain
of custody verified.
Equates to compliance with FSC Principles 1.1 and 1.2 plus checking
the legality of importing and exporting.
Developing Policies on Legal Compliance
13
In defining the legality of a timber source, the basic category is
Another example of a definition of legal timber can be found
“known licensed source”. Verifying that the timber in a product
in the UK government’s timber procurement policy (see www.
is from a known licensed source involves checking that the
proforest.net/cpet/documents). That policy defines “legal timber
timber originated from a forest management unit in which the
and timber derived products” as those that originate from a forest
harvesting entity had a legal right to harvest. It requires the
where the following requirements are met:
purchaser to (a) know the geographic source of the timber, and
(b) confirm that the harvesting entity had a legal right to harvest.
The forest owner/manager holds legal use rights to the forest.
It does not involve verifying that the timber in a product was
Both the forest management organization and any contrac-
actually harvested and traded legally. For example, the timber
tors comply with local and national laws, including those
may have been cut in breach of the permit conditions, royalties
relevant to forest management, the environment, labor and
may not have been paid, or the timber may have been exported
welfare, and health and safety.
illegally. It also does not involve third-party verification of the
All relevant royalties and taxes are paid.
chain of custody.
Defining a Breach of the Law
Verifying that the timber in a product is from a
In applying your policy, another set of challenges lies in deter-
known licensed source involves checking that
mining what constitutes an illegal act and interpreting global
the timber originated from a forest management
definitions within the context of the legal system of a given pro-
ducer country. These challenges include the following:
unit in which the harvesting entity had a legal
right to harvest.
Unclear line between a significant offence and a minor
transgression. For example, how many instances of
improper road construction are permitted before a conces-
The second category, requiring a higher level of scrutiny, is
sion holder strays beyond poor harvesting practices into the
described as “verified legal timber”. The category requires the
realm of illegal logging?
purchaser to obtain proof that, in addition to having a legal right
Overly prescriptive regulations. For example, should a
to harvest, the harvesting entity complied with the law when
forest manager be penalized for adapting practices to fit the
harvesting the timber and that the timber was legally exported or
local ecosystem of a given forest, while technically breach-
imported. The category also requires a higher degree of scrutiny
ing a poorly conceived regulation?
over the chain of custody. WWF recommends that purchasers
Conflicts with laws from other sectors and levels of
undertake this higher level of compliance checking where there
government or with administrative procedures. For exam-
is a high risk of illegal timber entering their supply chain. Forest
ple, is it illegal to harvest timber according to a timber permit
management certification systems that require independent
issued by the central forestry authority if that permit conflicts
chain-of-custody audits can also provide this level of assurance
with the land-use planning policy of the local government?
on legal compliance (see Table 4).
Conflicts between unwritten customary law and formal
The categories of sources and the supporting definitions (see
laws. For example, is it illegal for a community with usu-
Appendix 6) have been carefully developed to reduce the poten-
fruct rights that derive from traditional law to harvest timber
tial for users to make misleading claims. For example, if you
in a logging concession that fails to recognize these rights?
know that timber comes from a licensed operator, you can legiti-
In many jurisdictions, rationalization and clarification of such
mately claim that the timber came from a known licensed source;
issues are clearly needed to enable effective law enforcement.
however, you would not necessarily have the evidence to claim
However, where laws are unclear, best practice for purchasing
that the timber was legally harvested. Making this claim would
organizations, suppliers and auditors is to note the flaws in the
require further investigation of the circumstances in which the
relevant laws and state clearly the basis on which verification has
timber was harvested in order to exclude the possibility that
been assessed, including, where possible, the rationale for the
the licensed operator cut the logs in contravention of the law
interpretation by the verifier.
(for example, by cutting outside the concession boundary or in
excess of the allowable cut).
14
WWF GFTN Keep it Legal
WWF is preparing a series of Keep It Legal Country Guides (www.
The law is bad for the forest; for example, outdated silvicul-
panda.org/gftn) to explain how an individual country’s forest sector
tural prescriptions required by regulation may do more harm
laws and policy frameworks operate. WWF intends to prepare these
than good to the forest resource.
guides for key countries with a significant illegal logging problem
Punishment is severe; for example, in Indonesia some
or high incidence of trade in timber products resulting from illegal
officials have proposed introducing the death penalty for
logging. The guides will help purchasers navigate the forest sector
illegal loggers.
regulatory systems of countries of interest and tailor their legal
The application of the concession allocation system is
verification systems to the circumstances of the country.
corrupt; for example, legal permits are handed out to cro-
In some countries, local processes are addressing the above chal-
nies and bribe payers. This could mean that those holding
lenges. For example, the Indonesian Ecolabeling Institute (LEI)
“legal” rights to harvest have gained their permits through
is leading a multistakeholder effort to develop a timber legality
corrupt administration of the law.
standard. The standard is intended for use as a yardstick against
The perpetrators of “illegal logging” are poor and the
which auditors and other stakeholders can assess whether a forest
logging is low impact; for example, “bicycle logging”
operation is operating legally. The standard is designed to help
by local communities.
stakeholders navigate a complex body of 900 or so laws, regula-
The key safeguard against associating with unjust but legal out-
tions, and decrees that govern forestry in Indonesia by identifying
comes in a supplying country is to position your company’s pol-
a manageable number of clearly defined criteria. Within that body
icy within the broader context of corporate social responsibility.
of laws are many conflicting or ambiguous provisions and uncer-
Similarly, efforts to avoid the products of illegal logging should
tainties that result from the absence of implementing regulations
be embedded within a broader goal of promoting sustainable for-
and functioning systems to support high-level decrees.
estry. Legal compliance is best seen as a factor that contributes to
In other countries, standards, criteria, and checklists relating to
sustainable forest management rather than as the end game. The
legal compliance may have been developed for forest certification
WWF GFTN Responsible Purchasing Guide deals with this by
purposes. These can serve as useful reference points to interpret
positioning legality as one step along the way toward achieving
the forestry law of a given country.
environmentally sound, socially beneficial, and economically
viable production and purchasing of forest products.
Another safeguard is to have an explicit policy on disputed or
The key safeguard against associating
controversial decisions by officials, for example, alleged corrupt
with unjust but legal outcomes in a supplying
or improper allocation of forestry concessions. This would allow
for the reality that many developing countries lack effective
country is to position your company’s policy
administrative law mechanisms such as complaints procedures;
within the broader context of corporate social
tribunals to review official decisions, including the allocation of
responsibility.
permits, freedom–of-information provisions, and independent
watchdog institutions such as an ombudsman. Where such sys-
tems are weak or absent, aggrieved parties cannot easily chal-
lenge official decisions made improperly or at odds with legal
Addressing Bad or Unfair Laws
requirements. Your purchasing policy could include a proviso, for
Illegality in the timber extraction business is often a symptom
example, that if your organization is made aware of a significant
of deeper underlying problems. A narrow focus on illegal activi-
dispute over the process by which the forest manager secured the
ties may perpetuate inequities and corrupt resource allocation
permit, it will inquire into the status of the dispute and not regard
processes. Forest laws, or decisions made in purported applica-
the forest as a legal source until the dispute is resolved.
tion of the law, often reinforce unfair relationships or disregard
customary forest rights. Arguably, such laws need to be reformed
Refer to the
before their enforcement can properly serve the public inter-
Responsible
est. The following are some examples of laws that may have
Purchasing guide
undesirable results:
for more information
The law extinguishes traditional rights; for example, where
logging concessions or protected areas are created without
recognition of traditional rights over the forest resource.
Developing Policies on Legal Compliance
15
Another issue to consider when formulating a policy is that
Developing Operational Procedures
illegal logging problems are greatest in countries where forest
governance is poor. In such countries the task of strengthen-
To meet your policy requirements, you will need to develop
ing governance and building local regulatory capacity will
operational procedures that underpin your purchasing policy.
take time, even where there is the political will to improve.
These written instructions prescribe what individuals with
In the transition phase, purchasers can contribute significantly
specific jobs need to do to meet the policy requirements. The
to improved governance by awarding contracts to legitimate
next chapter of this manual provides guidance on how to imple-
enterprises that are attempting to do a good job under difficult
ment your policy and ensure legal compliance within your
conditions. This helps keep the ‘good’ operators engaged. It
supply chain. You will need to adapt the suggested steps to the
is a more positive way forward than boycotting all business
circumstances of your company and describe those steps in your
in the country. Such contracts, however, must encourage con-
operational procedures.
stant improvement, and contracts with organizations that fail
to take positive steps should not be renewed. The stepwise
approach to responsible purchasing advocated by WWF GFTN
Key Points
allows flexibility for your company, encouraging your business
to stay engaged and to drive reform in the places where the
problems are greatest.
Preparing a timber purchasing policy and
making it known to your suppliers and stake-
holders is vital. This policy must be approved
by senior management.
Clearly defining the problem of illegal logging
and related trade will help you focus on the
subset of legal compliance issues that are of
highest concern to your stakeholders.
Although there are other definitions for
legal timber, WWF recognizes “known
licensed source” and “verified legal timber”
BANGUN
and has developed supporting definitions to
o
reduce the potential for users to make
/
T
anty
misleading claims.
WWF-Canon
Not all forest laws are good; some are bad,
©
unfair, or corruptly administered. Thus, pur-
chasers cannot simply focus on legality to
be seen externally as credible. Legality
should be addressed as one strand of the
broader concept of responsible forestry
and timber purchasing.
16
WWF GFTN Keep it Legal
REDUCING THE RISK OF TRADING IN ILLEGAL TIMBER
The simplest way to avoid trading illegal timber is to buy
and sell only certified timber. For the majority of businesses
Timber legality can be viewed as a product
involved in the timber sector, particularly those trading in
quality issue. When you ask your suppliers to
tropical hardwoods, this is not an option because only relatively
provide legal timber, you are requesting timber
small volumes are currently being sold. This manual therefore
with a new quality: legality. If timber lacks proof
focuses on the approaches to legal compliance for the trade in
of legality, it lacks the quality that you require.
non-certified timber.
Legal timber (that is not certified) is traded internationally every
day of the year. For timber originating in countries with well-
Two basic questions should always be at the back
functioning regulatory systems, the risk of trading in illegal
of your mind:
timber is relatively low and stringent legal compliance auditing
is not warranted. However, if the country of origin of the timber
“Is the source legal?”
is uncertain, or the timber is known to come from a country with
Where was the forest of origin? Was the quality of the forest
weak regulatory systems, the risk of trading in illegal timber is
management such that all timber coming from this forest had the
high. Addressing this risk requires commitment and vision by all
right ‘legal’ quality?
those involved in the supply chain.
Timber legality can be viewed as a product quality issue. When
“How did it get here?”
you ask your suppliers to provide legal timber, you are requesting
Was the quality and traceability of the supply chain such that
timber with a new quality: legality. If timber lacks proof of legal-
no illegal timber was introduced and the legal quality was not
ity, it lacks the quality that you require. Timber can be attributed
subsequently diluted?
the quality, or status, of legality only in its forest of origin. It can
maintain that legal quality only if it remains unmixed and is not
diluted by illegal timber as it travels down the supply chain. Its
Certified Timber—
legal quality can also be devalued by other illegal activities con-
the Least-Risk Option
nected with its passage down the supply chain.
The simplest way to answer the two questions is to buy timber
that has been independently certified as coming from well-
managed forests. Forest management certification schemes
answer the question, “Is the source legal?”. Practically all forest
certification standards require independent verifiers to confirm
that the forest management is legal. Chain-of-custody certificates
answer the question, “How did it get here?” If purchasers can
buy certified timber, the risk of trading in illegal timber will be
minimal, or at least greatly reduced. Table 4 summarizes the
various schemes’ ability to verify legality.
Reducing the Risk of Trading in Illegal Timber
17
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18
WWF GFTN Keep it Legal
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Reducing the Risk of Trading in Illegal Timber
19
All forest management certification schemes examined for prepa-
However, suppliers in countries where significant volumes of
ration of this manual require compliance with relevant forest leg-
illegal timber and timber products are traded often find deliver-
islation. Some also provide a relatively high degree of assurance
ing timber with legal verification too difficult. These suppliers
that the material covered by their chain-of-custody system is legal.
often have little incentive to invest in legal verification systems.
The situation is made more complex, however, by “percentage
Their timber may be legal, but proving it takes significant extra
claims”. Percentage claims are permitted when it is accepted that
effort and cost and therefore is not done.
it is impractical to demand that 100% of a product be certified.
This is commonly the case for products in which wood raw
Suppliers can find it difficult to comply with the most basic
materials from many forest sources are mixed during manufac-
requests for proof of legality for a range of reasons, such as the
ture (for example, paper or plywood). In such cases, authorities
following:
responsible for governance of the various sustainable manage-
The national regulatory authorities lack the capacity to
ment standards acknowledge that some mixing with non-certified
implement the regulatory system or provide proof of imple-
material is inevitable. Percentages are normally set, with some
mentation.
material coming from certified sources and the remainder com-
The regulatory system, even when properly implemented, is
ing from non-audited sources. Though many of the certification
too loose or confusing to guarantee legality.
programs specify that illegal timber must be excluded from that
non-audited percentage, only the FSC requires that the non-
The supplier is unable to fully comprehend what is required
certified percentage be audited against their Controlled Wood
by the timber purchasing policy that you have supplied.
Standard; however, the precise way this will operate is still under
The supplier does not have the management systems or
discussion and peer review (see www.fsc.org/en/work_in_prog-
ability to supply the appropriate objective evidence or doc-
ress/other_docs). The Controlled Wood Standard seeks to provide
uments that prove legality.
a framework by which non-FSC-certified timber (which will be
Compliance with your purchasing policy requirements may take
mixed with FSC-certified timber when making percentage-based
the supplier considerable time and effort, particularly when non-
claims) can be assessed for legality.
compliance and illegal practice, rather than good forest manage-
Several certifying bodies (organizations that certify forest man-
ment, may be the rule.
agement against the standards listed in the table above) are also
considering creating certification or verification programs to
assess legality alone (i.e. excluding the non-legal aspects of the
Compliance with your purchasing policy
applicable standard).
requirements may take the supplier consider-
able time and effort, particularly when non-
Uncertified Timber—
compliance and illegal practice, rather than
good forest management, may be the rule.
Reducing the Risk
Most forests, particularly tropical forests, are not certified
and the bulk of timber products traded internationally remain
In recognition of these realities, this section describes a four-step
uncertified. Thus other approaches are needed to reduce risk in
system to reduce the risk of having noncertified timber that has
trading in illegal timber from non-certified forests.
been illegally harvested or traded enter your supply chain. The
methodology is based on a range of practical experiences gained
In an ideal world, as a purchasing organization, you would state
by traders, trade associations, and WWF GFTN participants.
that you did not want any illegal timber or timber products in your
It provides a systematic approach to evaluating the suppliers
business’s supply chain; you would then pass this specification
in your supply chains, including an assessment of the level of
to your suppliers and they would follow it. The outcome would
risk associated with each supplier and then, based on that infor-
be the delivery of legal timber and timber products.
mation, the level or degree of legality verification needed. In
addition, the methodology provides guidance on how to ensure
that the timber arrives at the location you control without being
substituted or diluted with illegal timber.
20
WWF GFTN Keep it Legal
STEP 1—RISK RATE SUPPLIERS
Mail out the questionnaire with an accompanying
Because simple, objective evidence demonstrating legality is
letter explaining why you need this information and what
rarely available from countries with the highest levels of illegal
the information will be used for. Emphasize that all com-
harvesting, your organisation will need to identify which sup-
mercial information they provide will remain completely
pliers are most likely to be able to comply with your company’s
confidential and will not be shared with anyone else,
aims and which are least likely; that is, which suppliers present
whether buyer or supplier.
the lowest risk of supplying illegal timber and which suppliers
Allow 2 to 3 months for a supplier to complete the
present the highest risk.
questionnaire from the time that they receive it. It tends
not to be a priority; also, the supplier may need time to
Your organization will need to develop systems for assessing and
gather the appropriate documentation. You will need to be
rating risk (risk rating). Risk rating allows you to do the following:
prepared to answer questions and concerns that suppliers
systematically identify the suppliers most likely to be
raise regarding the questionnaire.
trading illegal timber
Provide a deadline date for completion, stating clearly
develop future purchasing strategies based on the risk
that if they fail to return a completed questionnaire, they
rating of suppliers
will be rated automatically as a high-risk supplier. You may
need to contact some suppliers just before the deadline to
show suppliers what actions they could take that would help
remind them what they need to do; you also may need to
them reduce their risk rating
extend the deadline by a few days for some.
monitor the progress of suppliers over time as they work
Emphasize that the supplier needs to provide appropri-
toward being able to supply legal timber, that is, continual
ate objective evidence to support all self-declarations.
improvement
This is still an inexact science. What constitutes objective
Risk rating is used to assess the likelihood that a given non-certified
evidence to support the answers to the range of questions
product from a given supplier contains illegally sourced timber.
will vary significantly from one country to another. WWF
(If the timber or timber products you are purchasing have a
is in the process of preparing Keep It Legal Country Guides
chain-of-custody certificate, they do not need to be rated.) Rating
(www.panda.org/gftn) for major timber exporting countries.
suppliers based on this risk considers a range of information from
Use these guides (where available) to identify the appropri-
various sources, some of which is available in the public domain
ate objective evidence.
and some that is provided by the suppliers themselves.
Make sure that the mill or manufacturer is answering
the questions or supplying the appropriate information
Risk rating consists of the following activities:
when the organization you have sent the questionnaire to is
requesting suppliers to complete and return questionnaires
merely acting as an intermediary for a mill or manufacturer.
analyzing the returned questionnaires using scenario tables
Some intermediaries get concerned about confidentiality.
feedback to suppliers and monitoring for continuous
If you deal with this type of organization, you may need
improvement
to reassure them that you are not excluding them from the
supply chain but merely want answers to questions: Where
data management
did it come from? How did it get here?
Requesting suppliers to complete and return questionnaires
Ensure that all forest sources for each product are
The first step in the risk rating process is to send questionnaires
identified, if known. Although you may be asking a single
to your suppliers. A model questionnaire that can be adapted for
supplier about a single product, if you purchase significant
use in your organization is set out in Appendix 1.
quantities, or different components of composite products,
these may come from more than one source forest, and
Suppliers need encouragement in order to complete question-
even more than one country. One of the sources may be
naires. Below are some strategies, based on practical experience
legal and the other not, making an entire product line effec-
that can help get the questionnaires completed and returned.
tively illegal. Traceability is critical in such cases.
Contact suppliers well in advance of them receiving the
questionnaires to explain the commercial reasons for asking
them to complete a questionnaire. This can be done by
e-mail and should be backed up by a phone call.
Reducing the Risk of Trading in Illegal Timber
21
In an ideal world it would be possible to calculate a risk rating
If a supplier is based in a country from which
for each product that you purchase; that is, each product in your
high volumes of illegal timber are exported
inventory that carries a unique product code would have an
and that supplier is unable to provide objec-
individual risk rating. In reality this may not prove cost-efficient
because of the difficulty of gathering any meaningful informa-
tive evidence demonstrating legality, then the
tion on a product-by-product basis. Experience has shown that a
risk that the timber is illegal is high.
more practical approach may be to group products into product
categories, such as redwood moldings from company X, rather
Analyzing the returned questionnaires using scenario tables
than rate each individual molding (with all their different dimen-
sions) supplied by company X.
The returned questionnaires now need to be systematically ana-
lyzed so that suppliers can be rated between high risk and low
Any supplier that has not returned a questionnaire within the
risk. The risk of illegal timber being traded along a supply chain
specified deadline is automatically classified as a high risk. The
can be broken down into three broad elements.
assumption is that the supplier was either unable or unwilling to
supply the required information or too badly organized to do it.
1. Country of origin of the timber. There are risks associated
with the geographical source of the supply. Table 1, at the
The importance of receiving the supplier’s objective evidence
beginning of this manual, sets out estimated percentages of
to support the questionnaire answers cannot be overempha-
illegal timber from a range of countries. If a supplier is based
sized. Examples of objective evidence can be found in the Keep
in a country from which high volumes of illegal timber are
It Legal Country Guides. A completed questionnaire without
exported and that supplier is unable to provide objective evi-
objective evidence is just a self-declaration. Experience sug-
dence demonstrating legality, then the risk that the timber is
gests that self-declarations without supporting evidence cannot
illegal is high. The Keep It Legal manual’s risk-rating approach
be relied on.
takes this into account. The scenario tables in Appendix 2 indi-
Feedback to suppliers and monitoring for continuous
cate the type of regulatory infrastructure that is most likely
improvement
to encourage trading in both legal and illegal timber. Ratings
for some countries are suggested, based on estimated rates of
The analysis of the questionnaire to reach a supplier rating has
illegal logging or “suspicious” sources in those countries.
the added advantage of identifying weaknesses in the supplier’s
responses. It is then possible to give suppliers feedback, explain-
2. Supplier company’s attitude. The way a supplier operates
ing how their score was derived and the types of actions needed
with regard to a range of issues, such as its own general
to reduce the score. It is therefore possible to provide practical
purchasing policies, how it relates to stakeholders, and its
advice (without necessarily being specific or an expert) on how
attitude toward local communities, has been shown to be
they can reduce their risk rating, an additional benefit to the sup-
strongly linked to that company’s attitude to buying and
plier for completing the questionnaire. The types of actions that
supplying illegal timber. The questionnaire asks a number of
will move suppliers from the high risk to the low risk category
questions in this respect.
are discussed later in this section.
3. Supply chain complexity. The way a supplier sources timber
from its own suppliers is key to the risk of it trading in illegal
Some suppliers may rate as high risk in terms of supplying illegal
timber or timber products. The questionnaire requests vari-
timber in the initial assessment but they may strive to improve by
ous types of objective evidence to assess whether sufficient
changing their practices so that on subsequent assessments their
supporting documentation has been gathered.
risk-rating score improves. Others’ ratings may change very little
over time. It is important to maintain records that demonstrate
You can analyze these three elements using scenario tables (see
how suppliers have improved their performance and processes
Appendix 2). The analysis uses three different scenario tables,
over time. Experience suggests that suppliers who are unwilling
which relate to different sections of the questionnaire.
to make adjustments to comply with a buyer’s purchasing policy
Although indexes tend to be difficult to justify in purely
requirements are potentially also those more likely to trade in
scientific terms, they provide a systematic means for analyzing
illegal timber. Over time you may wish to stop trading with these
questionnaires. For example, the UK Timber Trade Federation,
suppliers and replace them with companies that seek to support
which used scenario tables for field trials (using a very similar
your commitments.
approach), showed that the tables were effective and the results
were independently repeatable.
22
WWF GFTN Keep it Legal
Data Management
Known Licensed Source
Managing the whole process of supplier assessment involves
The category known licensed source involves checking that
sending out the questionnaires, following up with suppli-
the timber in a product originates from a forest management
ers to get them to respond, capturing their responses and the
unit in which the harvesting entity had a legal right to harvest.
associated objective evidence, analyzing the returns, and then
For this category, WWF GFTN recommends that purchasers
reporting the results to all relevant parties. This process can
conduct sufficient due diligence inquiries and require a level
be demanding in terms of management time. You will need an
of verification from their suppliers that results in the following
electronic database system and/or well-organized manual filing
conditions:
system to maintain the process.
The timber can be traced along an unbroken supply chain
Two sources provide help with this task. WWF GFTN has
from the supplier back to the source entity.
developed a software package for FTN member companies that
Each delivery of wood-based products to your supplier
allows the tracking of their sources and enables simplified report-
(from their upstream supplier) is supported by documenta-
ing to the FTN manager and to internal audiences (the software
tion that identifies the source forest management
is available from national FTN managers). Track Record (www.
unit and source entity and each intermediary in the
trackrecordglobal.com) offers an Internet-based means for sup-
supply chain.
plier assessment. They currently undertake this role for members
The supplier has documentation demonstrating the source
of the UK Timber Trade Federation that are signatories to their
entity’s legal right to harvest.
responsible purchasing policy. Track Record charges its clients
on the basis of the number of suppliers assessed.
The supplier (and/or its suppliers) has systems in place that
periodically check the authenticity of the documentation
and integrity of the supply chain.
If the purchaser is made aware of any dispute over the
The need for verification depends on the risk
source entity’s legal right to harvest, the purchaser should
of illegality of the timber and timber products
inquire into the status of the dispute. An entity’s claimed
you are buying. The higher the risk that your
right to harvest should not be regarded as having been
supplier is trading in illegal timber, the more
verified if legal proceedings are in progress concerning
the dispute
intense the verification processes required for
you to keep your supply chain legal.
Verified Legal Timber
The verified legal timber category requires the purchaser to
obtain proof not only that the harvesting entity had a legal right
STEP 2—SELECT A VERIFICATION APPROACH
to harvest, but also that the entity complied with the law when
Having identified the level of risk of your suppliers, you should
harvesting the timber in question and that it was legally traded.
now consider the level and degree of verification or due diligence
It also requires a higher degree of scrutiny over the traceability
that you need to undertake. The need for verification depends on
of the timber.
the risk of illegality of the timber and timber products you are
For this category, WWF GFTN recommends that purchasers
buying. The higher the risk that your supplier is trading in illegal
require the following level of verification for each product line:
timber, the more intense the verification processes required for
you to keep your supply chain legal.
A third-party auditor has confirmed that the timber in the
product line was legally harvested and legally traded and
WWF GFTN has developed two levels of legality verification
that all harvesting charges were duly paid.
(see Defining “Legal” Timber in Section 3). For a company
A third-party auditor has confirmed the integrity of the
using these categories, suppliers that fall into the low-risk cat-
traceability documentation and control points. In other
egory (based on the risk-rating assessment) can be verified using
words, an independent inspection organization has stated,
the known licensed source approach. High-risk sources require a
following an inspection of the supply chain, that no illegal
much greater level of scrutiny, as defined under the verified legal
timber is getting into the supply chain.
timber approach (see definitions in Appendix 6).
Reducing the Risk of Trading in Illegal Timber
23
A number of organizations are beginning to offer third-party
Supplier misunderstood a question—Make contact with
verification of legal compliance and traceability, the precise
the supplier and explain why you are asking the question
scope of which differs from case to case. Verification may be
and what sort of answer you require.
restricted to compliance with harvesting regulations, for exam-
Supplier refuses to complete the questionnaire—The
ple, or may be much broader, including other legal requirements
supplier may refuse to complete questionnaires or provide
such as those pertaining to health and safety laws. Contact your
data. Lack of resources is a common excuse, as is “com-
local GFTN branch for advice on organizations offering this type
pany policy.” Explain to the supplier that your requests are
of service in your area.
valid and that you routinely make this request of all your
suppliers. Small suppliers may have genuine concerns about
STEP 3—MAKE FURTHER INQUIRIES
committing time and resources to providing data; in such
WHERE NEEDED
circumstances agree that the data can be provided in small
Once you have assessed the risk associated with a given
segments over an agreed-upon period of time. Suppliers
product range from a given supplier and decided what kind of
that continue to avoid supplying data should be given an
verification process is required, the next step involves imple-
ultimatum, after which they should be removed from the
menting that process and, over time, progressively eliminating
supply chain. This is a last resort, however, and the inter-
sources that are unable to provide the verification required.
vention of senior management on both sides may be useful
One key strategy will be to make follow-up inquiries with
to maintain a dialogue and to avoid this.
suppliers that have provided weak responses to the question-
Concerns over confidentiality—In some industries and
naire. Suppliers rated through the questionnaire assessment as
in some countries it is common to experience concerns
being high risk are likely to have not provided any or enough
over the confidentiality of supply chain data. This can be
supporting evidence; thus the questionnaire, if returned, will
overcome in a number of ways, ranging from giving the
be largely a self-declaration. You will need to either ask the
supplier verbal assurance that the data are used for environ-
supplier to provide more evidence or investigate the timber
mental and quality control purposes and will not be used
source directly.
in a commercial context, through to giving the supplier a
signed confidentiality agreement. The provision of data may
Gathering information from the upstream parts of the supply
have to be made in a manner that furnishes the required
chain is frequently difficult. Traders are concerned about issues
information without revealing the names of commercial
such as confidentiality, particularly if they occupy a “middle-
intermediaries or processors. However, full disclosure is
man” position in the supply chain. They are concerned that the
preferred and may come in time as part of an action plan.
objective evidence will reveal the identity of their supplier and
that you may begin trading directly with the upstream end of the
Supplier “does not feel responsible”—Some suppliers
supply chain. Also, suppliers occupying an intermediary role
do not feel obliged to respond to requests for supply chain
may have great difficulty getting the information from those
data. Arguments can vary, from a position of “being too
upstream from them, particularly if they only buy a relatively
small to have any effect” to “it is none of your business.”
small percentage of their supplier’s total production; that is, they
Suppliers in this situation should be given an opportunity to
have limited leverage. Sometimes the objective evidence you
reflect on their position. Experience has shown that compa-
require just does not exist.
nies with little regard for their customers’ expectations and
requirements usually fail. If a supplier cannot change its
Below are some common issues that arise when suppliers are
opinions and recognize your point of view, it should have
asked questions regarding their sourcing of forest products,
no place in your supply chain.
along with suggestions on how to deal with them.
Supplier cannot provide evidence of legality—Depending
on your supplier’s place within the supply chain, obtain-
Supplier didn’t provide enough information—Major
ing such proofs may prove difficult. Those supply chain
gaps in data make it difficult to make any form of assess-
elements furthest removed from the forests or primary pro-
ment. Talk to the supplier and find out why it cannot or
cessors will experience the greatest difficulty in obtaining
did not provide the data requested. If the supplier does not
the required documentation. You have several options to
have the technical expertise, ask that it request its own
address this difficulty:
suppliers to furnish the missing data and to collate these
data for you. Agree on a date by which the data will
Give the supplier more time to obtain the documents
be provided.
required.
24
WWF GFTN Keep it Legal
Encourage the supplier to source forest products in less
The traceability of the supply chain is vital for ensuring that you
controversial areas.
receive goods containing legal timber and that there is no “laun-
Encourage the supplier to seek independent certification
dering” of illegal timber. In practical terms, it can be expensive
for its forest products.
and, in some cases, physically impossible to track timber down
highly complex or fragmented supply chains. In developing
Encourage the supplier to obtain a third-party legal
countries, complex supply chains will always be more likely to
verification audit.
support the laundering of illegal timber.
STEP 4—IMPROVE TRACEABILITY AND
VERIFY LEGALITY
A key component of ensuring that timber is kept
Working with suppliers to improve traceability
legal once it leaves the forest and enters the
Certified timber is tracked using inspected and verified chain-of-
supply chain is to prevent illegal timber mixing
custody systems that enable you to easily answer the question,
with it. If legal timber and illegal timber are
How did it get here? Timber and timber products that suppos-
mixed, the whole product line can be “tainted.”
edly originate from a certified forest but are not accompanied
by a current and credible chain-of-custody certificate cannot
be regarded as certified because the chain-of-custody has been
broken and illegal product may have become mixed with the
The risk-rating system takes into consideration the potential for
certified product. Chain-of-custody certificates apply only to
dilution of the supply chain by illegal timber. In high-risk situ-
timber and timber products from a certified forest. If a product
ations that have a history of laundering timber—mixing legal
comes from a verified legal forest, traceability is just as critical.
and illegal timber to yield “legal” timber—the best option to
ensure a clean supply chain is by tracking the timber from the
A key component of ensuring that timber is kept legal once it
source forest to the physical location where it comes under your
leaves the forest and enters the supply chain is to prevent ille-
organization’s control. Without such tracking or traceability
gal timber mixing with it. If legal timber and illegal timber are
in their supply chains, your suppliers will be unable to meet
mixed, the whole product line can be “tainted.” Once timber has
your verification requirements for a verified legal or known
left the forest, its legal quality can only be recognized if it can
licensed source or any other verification approach, such as those
be shown to have come from that forest; in other words, trace-
described below.
ability. Without traceability, verification of the legality of forest
management is largely a waste of time.
Traceability can be achieved through various combinations of
paper- and technology-based tracking systems. In many coun-
The supply chain, or as some prefer to call it the demand chain,
tries where the trade in illegal timber is a problem, elaborate
must have a dependable level of integrity. An efficient way of
official paper-based systems have been implemented to theoreti-
achieving this is to encourage suppliers to develop a system for
cally track the movement of timber from the forest to the point
tracing all timber and timber products from their own suppliers.
of export. This has included the use of unique government
If you take the demand chain view, traceability should start at
certificates or permits covering the transportation and move-
the downstream end of the chain and steadily be applied back
ment of timber in general. These documents are often linked
upstream toward the forest. Traceability implemented in this
with national forest legislation, and in many cases it is illegal to
manner will have a strong commercial orientation with a greater
transport timber without the necessary specific official permis-
likelihood for successful implementation, with each business
sion accompanying the timber or timber products.
that forms a step along the demand chain benefiting.
However, such systems can easily break down in countries where
Logs, timber, and processed timber goods start their journey
the regulatory capacity is weak because of a lack of resources or
in the source forest and are then processed by primary and
because of corruption, where the forest areas to be regulated are
possibly secondary processing industries, exported, possibly
huge, or where the government has no means to manage data
transshipped, and imported. All this may happen before the
centrally. To make matters worse, modern printing technologies
goods finally fall under your organization’s control. Although it
have made it relatively simple to corrupt paper-based systems
is critical to identify the source forest, it is also critical to make
with virtually indistinguishable false or forged paperwork.
sure that the timber from that source forest is what you receive,
rather than illegal timber that has infiltrated into the supply
chain en route.
Reducing the Risk of Trading in Illegal Timber
25
Nevertheless, paper-based documentation is still the mainstay
type described helps those collecting the information to benefit
of traceability systems and is likely to be so for some time. A
directly from their efforts as they receive reports containing key
good understanding of the system that produces documentation,
management metrics that are compiled and made available the
and familiarity with the “look and feel” of relevant documenta-
instant any new “flow” information arrives at the database.
tion, will provide a measure of confidence and some safeguard.
To assist with this, WWF is producing a series of Keep It Legal
In an ideal world, in countries where the risk of illegality is high,
Country Guides, for use in conjunction with this manual, that
the timber or timber product would all be tracked from the stand-
describe how these paper-based systems operate in reality and
ing tree in the forest to the point where it enters your warehouse
their strengths and weaknesses.
or comes under your organization’s control. The reality is that,
currently, little tracking of the types described is taking place. It
The feasibility of tracking timber has increased significantly as
is a new approach and is being adopted only by the more innova-
Internet-related technologies and services have become more
tive and forward-looking operators.
effective, cheaper, and more accessible. Unreliable paperwork
combined with scribed or painted identifiers on the end of logs
Tracking, if appropriately implemented, should help a busi-
are starting to be replaced by bar-coded tags and radio frequency
ness operate more efficiently. Information from tracking can
identification devices (RFIDs) with the data capture carried out
be useful for
with handheld PCs. This enables the tree-related information to
forest managers, in terms of monitoring the volumes being
be scanned electronically and uploaded from the handheld PC
harvested from each location,
directly onto the Internet, and from there it is stored in dedicated
mill owners, in terms of knowing what logs or timber prod-
database systems. These modern technologies provide the oppor-
ucts are coming out of the forest and when they may arrive
tunity to link individual standing trees in the forest with the logs
at the mill,
produced from them in a much more secure manner than was
possible in the past. These approaches rely on the standing trees in
the regulatory authorities, in terms of being able to verify
the forest being tagged and then the data on its position and main
the legal right of a specific forest operation to transport tim-
parameters (height, species, and diameter) all being captured
ber and for estimation of revenues to be collected,
on a database. The systems are made secure by using uniquely
independent auditors wishing to audit legality.
identifiable tags that are linked to the key tree measurements and
Many of the business benefits have yet to be fully realized.
resultant log metrics through a record on the database.
Currently, log and timber tracking is principally seen as a system
of control that is used by government and verification organiza-
tions rather than as a business tool. Once these systems are more
Many of the business benefits have yet to be
widely implemented and understood, it is likely their full value
will be better appreciated.
fully realized. Currently, log and timber track-
ing is principally seen as a system of control
(For a more detailed review of timber tracking and chain–of-
that is used by government and verification
custody systems, see Dykstra et al, 2003, Technologies for Wood
organizations rather than as a business tool.
Tracking—Verifying and Monitoring the Chain of Custody and
Legal Compliance in the Timber Industry,” available online at
http://www.forestandtradeasia.org/files/Wood_Tracking_
Report.pdf.)
Any supply (or demand) chain has a number of critical control
points along its length. Critical control points are locations at
A promising recent technological advance is the use of DNA
which the timber undergoes basic changes, for example, where
fingerprinting to prove the source and traceability of timber.
the trees are felled, where the logs are loaded onto a log lorry,
Each individual tree has a unique genetic code (DNA) and code
and where the logs enter the sawmill. The Internet enables infor-
variations between individuals can be modeled to predict codes
mation from these critical control points along the supply chain
across a given geographical area. The primary use is to verify
to be aggregated in a single online database, no matter how
source by matching the DNA from samples taken from individual
remote the geographic locations of the critical control points are
stumps in a source concession with the DNA from associated
or what companies are involved. To manage all or part of a sup-
logs at a processing mill. The second, and possibly more power-
ply chain efficiently, you need information on how the product is
ful, method amalgamates the DNA data gathered from individual
moving along the supply chain. An Internet-driven system of the
testing into a genetic database covering a geographical area.
26
WWF GFTN Keep it Legal
The database allows samples taken from anywhere to be com-
timber sector in that country. In addition, Appendix 7 (Country
pared with known spatial DNA variations in order to pinpoint
Legal Documentation Lists) presents a more general view of
actual source to a geographical range. Certisource Timber has
documentary requirements for timber from different countries,
tested this technology in Southeast Asia and is currently able to
mainly for trade in round logs.
undertake DNA matching for Merbau, Teak, Nyato, Mersawa
and Matoa species.
In many cases, official government documentation alone is
insufficient to guarantee legality, because the whole regulatory
Some companies that provide log and timber tracking services
infrastructure is corrupt and ineffective. In such circumstances,
include:
even “official letters” on government department letterheads
(such as Certificates of Origin and so forth) claiming the legality
Certisource Timber—www.certisource.net
of a shipment should be treated with the utmost suspicion. You
SGS—www.sgs.com
will need to seek additional reassurances.
TracElite—www.tracelite.com
Track Record—www.trackrecordglobal.com
A supplier warranty is a written commitment
Other organizations offer similar services.
from your supplier that it will supply you with
products in accordance with the warranty.
Strategies for verifying legality—Low-risk suppliers
This will form a part of the commercial con-
Low-risk suppliers are those that are unlikely to supply illegal
tract with your supplier.
timber. The level of objective evidence supplied for the risk-
rating process should already have been significant. Little
more needs to be requested of these suppliers other than to
For suppliers and product lines rated as high risk in an initial
ask them to complete a new risk-rating questionnaire each
assessment, you can adopt various strategies to ensure that risk
year or when you plan to purchase a new product category
is mitigated to a lesser or greater extent.
from them. However, you should ask them to inform you if
their own upstream supply chain is altered significantly, and
Supplier warranties
have them complete a new questionnaire. In the longer term,
suppliers in the low-risk category need to be encouraged to
If a supplier is not willing to provide you with transparent infor-
work toward sourcing all their timber from credibly certified
mation about its own suppliers, a way forward might be to obtain
forest sources.
a supplier warranty from them. A supplier warranty is a written
commitment from your supplier that it will supply you with
Low-risk suppliers should supply the following documents as
products in accordance with the warranty. This will form a part
evidence that the timber in their products originates from known
of the commercial contract with your supplier.
licensed sources:
You can ask the supplier to warrant that the products supplied
A copy of the license, lease, or other document with an
will comply with your definition of legal timber. Your contract
official boundary map showing that the company has the
can specify the consequences of the supplier breaching the war-
right to harvest timber from the area in question
ranty, including termination of the contract for cause and con-
Evidence of full traceability up and down the supply chain
sequent rights to damages. Genuine suppliers will develop their
own Keep it Legal systems to ensure that they comply with this
Strategies for verifying legality—High-risk suppliers
warranty and to keep you as a customer.
Suppliers will fall into the high risk category because they did
A less committed supplier might sign the warranty but run a
not supply sufficient reassurances or objective evidence to prove
calculated risk that any illegal timber entering their supply chain
that they could remove illegal timber from their supply chain.
will go undetected by you or others. Because the promise they
The range and types of objective evidence that suppliers can
make is not checked by an independent organization, the level of
provide vary greatly from one country to another. A series of
risk you would be taking on by relying only on a supplier war-
Keep it Legal Country Guides is being developed to complement
ranty is relatively high. But it is a step in the right direction and
this manual. The country guides cover the key issues for specific
you may be able to claim damages if you find out from a third
countries and the types of evidence you need from the forest and
party that the supplier’s products contain illegal timber.
Reducing the Risk of Trading in Illegal Timber
27
Second-party audits
Other organizations offer similar services. Such organizations
It is entirely possible that you will meet resistance from your
are commonly more expensive to employ than the second-party
supplier with regard to providing information on the business
operators because of the increased accreditation overheads they
that supplies them. One likely reason for this reluctance is that
have to support.
they will fear that you want to eliminate them from the supply
chain. If you are unable to persuade suppliers to provide this
Issues with audits
information, there are alternative solutions. You can engage an
Second- and third-party audits are regarded as the best means of
independent organization or second party to gather the appropri-
determining the legality of a supplier. However, there are issues
ate information under strict confidentiality guidelines. This will
to consider concerning the level of assurance provided. Auditors
prevent the revealing of any information that would identify an
are only on site for the duration of the audit, maybe only two or
element of the supply chain. This is a more costly option, but
three days. Many observers ask what happens when the auditors
it could prove cost-effective in the long run if it allows you to
are not present, particularly with respect to high-risk suppliers.
identify your forest sources and demonstrate that the timber you
Evidence suggests that some suppliers put on a special “show”
are using was legally harvested. This information can be used to
for auditors and then revert to normal practice as soon as the
target markets such as the public procurement sectors in some
auditors have left the premises.
Western European countries that are now asking for this level of
Your local trade body will probably be able to suggest a
assurance about their timber purchases. Some of the organiza-
certification body with appropriate skills in the timber sector. It
tions that undertake second-party audits include:
is also wise to ask for recommendations from NGOs, including
Global Forestry Services—www.gfsinc.biz
WWF’s Forest & Trade Networks.
ProForest—www.proforest.org
Tropical Forest Trust—www.tropicalforesttrust.com
Key Points in Reducing Risk
Other organizations offer similar services.
Legality and third-party audits
The first step in reducing risk of illegally
sourced timber entering your supply chain is
Third-party audits are recommended by WWF GFTN for high-risk
to perform an assessment to rate the level of
suppliers and are a key element of the verification requirements
risk your suppliers represent.
for the verified-legal timber classification. The third-party auditor
must check both legal compliance in the forest and the integrity of
This is achieved by having suppliers fill out
the chain of custody to ensure against mixing with illegal timber.
questionnaires, analyzing responses using
scenario tables, and assigning suppliers a
Several independent verification organizations now offer legal
numeric index of scores that rate them as
verification services and third-party audits. These companies
high or low risk.
generally claim that their service is the only truly independent
one because they avoid conflicts of interest by either not under-
On the basis of a supplier’s risk rating,
taking any consultancy work or, if they do, by keeping the work
different levels of verification actions can be
entirely functionally separate from their auditing work. To pro-
selected. High-risk suppliers need indepen-
vide additional rigor to their auditing role, many such inspection
dent assessments of legality.
bodies employ accreditation bodies that inspect them to make
Traceability of all timber products is key to
sure their independence is not compromised and that their work
ensuring that legal and illegal timber and tim-
is of a consistently high standard. Organizations offering a form
ber products do not get mixed together in the
of legal verification include
supply chain.
Bureau Veritas—www.bureauveritas.com
There are both paper-based (most popular)
Certisource Timber—www.certisource.net
and technology-based traceability systems
available.
Rainforest Alliance—www.rainforest-alliance.org
SGS—www.sgs.com
Soil Association—www.soilassociation.org/forestry
28
WWF GFTN Keep it Legal
APPENDIX 1 Model Questionnaires
The questionnaire below provides a template for purchasers to use with their suppliers to establish traceability. The example given shows a
completed questionnaire for a limited number of products supplied. It includes some notes to the purchaser and some notes to the supplier.
It is suggested that the purchaser develop and enhance the notes section to ensure that as much information is provided as possible.
[COMPANY NAME] SUPPLIER QUESTIONNAIRE
Guidance on completing this questionnaire
The survey consists of 5 key parts [with particular sections only to be completed by suppliers trading timber and timber products
(Part D and E) and alternative sections for suppliers only trading paper products (Part F and G)]:
Part A identifies some company-level information and only needs to be completed once for each company.
Part B asks questions about your company’s forest products purchasing policy, and like Part A, it only needs to be completed
once by your company.
Part C asks for detailed information about the forest sources used in the products that your company supplies, or wishes to supply.
Please answer all questions in the format provided. This will help us evaluate the source of the wood used in these products,
as well as the balance between recycled and virgin material used.
Part D [FOR TIMBER AND TIMBER PRODUCT SUPPLIERS ONLY] al ows you to group together the sources identified in Part C and
to indicate the volume of material supplied in a calendar year and only needs to be completed once.
Part E [FOR TIMBER AND TIMBER PRODUCT SUPPLIERS ONLY] enables you to identify which of these groupings is used in
each individual product supplied and only needs to be completed once.
Part F [FOR PAPER PRODUCT SUPPLIERS ONLY] allows you to group together the sources identified in Part C and to indicate
the volume of material supplied in a calendar year and only needs to be completed once.
Part G [FOR PAPER PRODUCT SUPPLIERS ONLY] enables you to identify which of these product groupings is used in each
individual product supplied and only needs to be completed once.
PART A: YOUR COMPANY DETAILS
A 1
Supplier Code:
Full Company Trading Name:
A 2
Company Full Postal Address:
Postal / Zip Code:
Country:
A 3
Name of Managing Director / Chief Executive:
A 4
Environmental Contact:
Company Telephone Number:
Company Fax Number:
A 5
Country Dialling Code:
I certify that to the best of my knowledge, the information provided in this Questionnaire is correct.
Name:
Signature:
Position:
Date:
Appendix 1
29
PART B: YOUR FOREST PRODUCTS PURCHASING POLICY
Your Company Policy:
Question
Question
Response
Notes to suppliers completing
number
the questionnaire
B1
Has your company an official written pro-
(YES/NO)
A forest products purchasing policy is a
curement policy for forest products?
clear indication that our suppliers have
similar values and aspirations to our
organization.
B2
If yes, does your policy include reference
(YES/NO)
Our policy is very clear. We expect our
to: Promoting traceability of what is in
suppliers to have clear policies that are
your supply chain?
similar to our own.
Sourcing only legal timber?
(YES/NO)
Only sourcing from forests that are being
(YES/NO)
converted to other land use when this is
appropriate?
Not sourcing from forests with threat-
(YES/NO)
ened high conservation values?
A commitment to continuously increasing
(YES/NO)
the amount of forest products you trade
that comes from credibly certified forests?
B3
Is a copy of your policy enclosed with
(YES/NO)
your response?
B4
Is your company a participant in a Forest
(YES/NO)
Forest & Trade Network membership is a
& Trade Network? Or is your company
clear way of demonstrating commitment
involved in a program that will assist
to responsible purchasing or production
them toward sourcing from well-man-
of forest products.
aged forests such as those supported by
GFS, ProForest, RA/SmartSource, TFT,
TTF’s RPP program?
B5
If yes, in which country?
B6
Does your company have chain-of-cus-
(YES/NO)
Chain-of-custody certification allows the
tody certification from a certification
organization to clearly segregate material
body?
that is certified and allows us as a pur-
chaser to ensure that what is delivered is
Which organization endorsed the
(Organization)
what was specified.
certification? (for example, FSC, PEFC,
CSI, etc.):
Please give details of the COC
(COC number)
certificate, including reference number:
continued next page
30
WWF GFTN Keep it Legal
PART B: (continued) YOUR FOREST PRODUCTS PURCHASING POLICY
Question
Question
Response
Notes to suppliers completing
number
the questionnaire
B7
Other relevant standards:
(Standard)
ISO or similar management systems
Does your company have other forms of
provide good frameworks for delivering
certification, such as ISO 9000 or ISO
improved environmental performance.
14000, which place emphasis on product
traceability? Please give brief details
below:
B8
Does your company have a system to
(YES/NO)
We require our suppliers to be able to
manage its supply chain and to promote
demonstrate that their policies are deliv-
the responsible purchasing of forest
ered though a management system that
products?
routinely evaluates the environmental sta-
tus of forest products and that continually
Please give brief details below and please
strives to improve performance.
attach further documentation if required.
B9
Does your company provide formalized
(YES/NO)
Companies that train their staff about their
training on the timber procurement policy
policies are better at delivering those policy
for your staff?
objectives. Please describe this program.
B10
Does your company have a system for
(YES/NO)
Preferred suppliers are those that your
defining “preferred suppliers” status?
company has identified as having the
capability to supply the timber/wood
products with the characteristics that you
require and may have set out in a timber
purchasing policy.
B11
Does your company develop long-term
(YES/NO)
Our company wants to reduce the risk
relationships with its suppliers?
associated with purchasing timber
from illegal or badly managed forest.
Experience suggests that companies that
deal with known suppliers are less likely
to deal in risky product.
B12
How do you communicate your timber
Suppliers normally form a part of a long
purchasing policy to your suppliers?
and complex supply chain. They may well
be so disconnected from the end user
that they do not know or cannot hear
what the marketplace is demanding in
terms of environmental and social per-
formance. Suppliers therefore need to be
kept up to date with environmental best
practice so that they can react accord-
ingly and supply you with what we need.
Your timber purchasing policy should
make it clear what we need.
continued next page
Appendix 1
31
PART B: (continued) YOUR FOREST PRODUCTS PURCHASING POLICY
Question
Question
Response
Notes to suppliers completing
number
the questionnaire
B13
Does your company work with its prior-
(YES/NO)
The more your company supports
ity suppliers to develop joint projects to
suppliers in their efforts to prevent illegal
meet the future environmental demands
timber or wood products from entering
of the market or support any specific
the supply chain, the greater the chance
supplier activities relating to sustainable
of excluding such products from the
and/or legal forest management?
supply chain.
B14
Does your company have a means of
(YES/NO)
Your supplier needs a systematic means
discouraging suppliers providing timber
of preventing illegal timber/wood prod-
products that have no known geographi-
ucts (stolen timber, or timber originally
cal origin?
cut from protected areas or similar areas
otherwise precluded by law) from enter-
ing the supply chain. If they do not have
a system or do not directly know where
their wood comes from, then there is an
increased risk of illegal material entering
the supply chain that we are a part of.
B15
Are you and your suppliers working
(YES/NO)
We like to know where our timber/timber
toward traceability or chain-of-custody
products come from. We then have a
certification for the timber/wood products
head start on proving its legality to our
that you supply?
clients. Traceability (a set of technologies,
procedures, and documents that are used
to manage the wood supply chain, usu-
ally defined in terms of documentation,
identification. and segregation) does this.
Proof of a preaudit report provides the
necessary evidence of this.
B16
For these products, are you able to inde-
(YES/NO)
We are committed to only buying inde-
pendently verify that they are legal?
pendently verified legal timber. If the tim-
ber and timber products that you supply
us does not meet these requirements, we
need to know.
32
WWF GFTN Keep it Legal
PART C: PRIMARY SOURCES OF FOREST PRODUCTS
Please duplicate this sheet and complete for ALL sources used to supply our products.
Question
Question
Response
Notes to suppliers completing the
number
questionnaire
C1
Reference Number of Source
If a mill has a number of forests supply-
ing it, enter each forest in sequence; for
example, Mill 1 / Forest 1; M1 / F2 etc.
C2
Forest Management Unit:
(Forest name)
We require both the mill and the forest
or forests to be named. If the mill or the
Primary Mill:
(Mill name)
forest is “unknown,” state as such. The
same for location and country. Please
Location / Region:
(Region)
provide as much information as possible.
Country:
(Country)
C3
Type of Ownership / Operation:
(State owned)
(Private company)
(Public company)
(Community)
C4
Details of Forest Management Unit /
Where the forest or mill can not be
Primary Mill
identified at present, please indicate as
such and complete the questionnaire as
Name of Company:
far as possible.
Company’s Full Postal Address:
Name of Managing Director:
Phone number:
Fax. number:
C5
Does this source comply with our pur-
(YES/NO)
chasing policy?
If not, what steps will be taken to ensure
future compliance?
C6
Is this source already certified or pro-
(Certified—
gressing to certification?
certificate details)
If certified, or if certification is in prog-
(Progressing—
ress, please give details of scheme:
GFTN / TFT /
SGS CSP / other)
continued next page
Appendix 1
33
PART C: (continued) PRIMARY SOURCES OF FOREST PRODUCTS
Question
Question
Response
Notes to suppliers completing the
number
questionnaire
C7
Please give details of measures you
(Letter / contract /
have taken to check whether this source
visit / audit)
is complying with our policy?
C8
Are you aware of any concerns or
(YES/NO)
issues that have been publicly raised
about this source?
Please give brief details;
(NGO cam-
paigns, press,
prosecutions)
C9
How would you categorize this source?
Choose one only
Insufficient detail to assess and / or non-
(YES/NO)
compliant with our purchasing policy?
Known and compliant with our policy?
(YES/NO)
You are confident the source is
identifiable?
Is a known licensed source?
(YES/NO)
Traceable with a high level of confidence
that there was a legal right to harvest the
timber?
Progressing to credible certification?
(YES/NO)
Source is working with WWF Forest &
Trade Networks or other similar mecha-
nisms to achieve credible certification?
Credibly Certified?
(YES/NO)
This source is certified under a credible
certification scheme?
C10
Do you have any proof that the harvest-
(YES/NO)
Please provide brief details of the infor-
ing company had the legal right to har-
mation you hold. We may ask for more
vest the wood?
details in future.
C11
Do you have any proof that the har-
(YES/NO)
Please provide brief details of the infor-
vesting company had the legal right to
mation you hold. We may ask for more
transport the timber?
details in future.
C12
Of all the volume of material that you
supply us each year, approximately
what percentage in volume terms
comes from this source?
continued next page
34
WWF GFTN Keep it Legal
PART C: (continued) PRIMARY SOURCES OF FOREST PRODUCTS
Question
Question
Response
Notes to suppliers completing the
number
questionnaire
Additional questions for paper companies only
C13
Paper grade and name:
(Grade)
(Name)
C14
Bleaching process used:
(TCF)
(ECF)
(Other—named)
None
PART D: FOR TIMBER AND TIMBER PRODUCT PRODUCERS:
YOUR FOREST PRODUCTS INVENTORY
Group
Species Used
Ref. of Forest Source
Quantity of this timber type
—Use where products are
(Trade Name & Latin
(from Part C1)
supplied to us within [defined]
made from more than one
name)
reporting period
primary source / mill
(Please state unit of volume used.)
1
Pine
M1/F1
100 m3
(Pinus sylvestris)
1
Pine
M1/F2
100 m3
(Pinus sylvestris)
1
Pine
M1/F3
2000 m3
(Pinus sylvestris)
2
Birch
M2/F1
1000 m3
(Betula spp.)
3
Spruce
M3/F1
50 m3
(Picea abies)
3
Spruce
M3/F2
50 m3
(Picea abies)
Note to purchaser using the questionnaire: The defined reporting period should be set by the user of the questionnaire.
Appendix 1
35
PART E: FOR TIMBER AND TIMBER PRODUCT PRODUCERS DETAILS
OF PRODUCTS SUPPLIED BY YOU
Product Code:
Product Description:
Group used for this product
Our order code or your product code
(from D)
12345678
Sawn wood
1
91011121
Birch flooring
2
314151617
Softwood flooring
3
181920212
Softwood flooring
3
PART F: FOR PAPER PRODUCERS ONLY
YOUR FOREST PRODUCTS INVENTORY
Group
Species Used
Ref. of
Quantity of this timber type
—Use where products are
(Trade Name & Latin name)
Forest Source
supplied to us within the
made from more than one mill
(from Part C1)
last calendar year (Please
state unit of volume used.)
1
Pine
M1/F1
100 tons
(Pinus sylvestris)
1
Pine
M1/F2
100 tons
(Pinus sylvestris)
1
Pine
M1/F3
2000 tons
(Pinus sylvestris)
1
Birch
M1/F1
1000 tons
(Betula spp)
2
Post consumer
M2/ –
1000 tons
recycled fiber
3
Eucalyptus
M3/F1
50 tons
(Eucalyptus grandis)
36
WWF GFTN Keep it Legal
PART G: FOR PAPER PRODUCERS ONLY
DETAILS OF PRODUCTS SUPPLIED BY YOU
Product Code:
Product Description:
Group used for this product
Our order code or your product code
(from D)
12345678
Copier paper
1
91011121
Copier paper
1
314151617
Copier paper
2
181920212
Kraft paper
3
Appendix 1
37
APPENDIX 2
Scenario Tables for Risk Ratings
Applicable to non-certified timber and timber products only
Instructions:
3. In exactly the same manner, use Part C of the completed
questionnaire (the Primary Sources section) to select an
1. Look at the first section of the questionnaire on company
option in Scenario Table B, “What is the county of origin of
details to make sure that they are complete and accurate.
the timber?”
2. Read Part B of the completed questionnaire to complete
For Timber and Timber Suppliers—You should now have a good
Scenario Table A. “What are the supplier’s environmental
idea of the complexity of the supply chain. Use the impressions
and timber procurement policies?” Read the questionnaire
gained from the answers given in Parts C, D and E of the com-
answers in Part B regarding purchasing policies and form in
pleted questionnaire to make a final selection for Scenario Table
your mind a generalized view of how the supplier manages
C, “How does the supplier manage their own wood raw material
its own purchasing. For example, if the company has no
supply chain?”.
purchasing policy and no individual specifically managing
environmental issues, then this would point to an organiza-
Or
tion that has no commitment to sourcing legal timber and
has no top-level management interest in doing the “right”
For Paper Suppliers—You should now have a good idea of the
thing. Then go to Scenario Table A and read the five pos-
complexity of the supply chain. Use the impressions gained from
sible scenarios. Decide which of the five descriptions in the
the answers given in Parts C, F and G of the completed question-
scenario tables most closely fits the purchasing behaviour
naire to make a final selection for Scenario Table C, “How does the
described in Part B of the questionnaire, and on that basis
supplier manage their own wood raw material supply chain?”.
select that option and write down the associated score.
4. Sum the scores from the three scenario tables and you will
have the supplier’s risk rating, which is an index.
38
WWF GFTN Keep it Legal
Scenario Table A. What are the supplier’s environmental
and timber procurement policies?
Keep It Legal Manual—Supplier Procurement Policy Scenario Table
Choice nos.
Description
Selection [X]
5
The supplier has no clear environmental policy for purchasing timber. If someone
is selling it and it’s the right species and dimensions, then they’ll buy it. Generally
lacks any documented objective evidence to support claims.
4
Supplier has a timber procurement policy but the policy is unclear. Does not
acknowledge that purchasing illegal timber is an issue to be tackled.
3
Has a timber procurement policy that addresses most of the critical issues, but
it could be better worded and better communicated. Is attempting to understand
the nature of its supply chains.
2
Is trying hard to address the critical issues through its procurement policy and
environmental action plan and makes sure that all within the company know
what is required. Has an overarching environmental policy. The critical issues are
periodically discussed with external stakeholders. Is considering independent
certification.
1
Has a clearly defined timber procurement policy (as part of an overall envi-
ronmental policy) developed following consultation with internal and external
stakeholders. The policy and related action plans form an important part of
management systems. Has ISO 9000 and/or ISO 14000 series certificates. Is a
member of an organization promoting sustainable forestry (such as WWF GFTN).
Appropriate documentation supplied as objective evidence.
Objective evidence:
Positive
Copy of environmental policy
Copy of timber procurement policy
Copy of environmental action plan
Names of NGOs consulted with
Examples of staff training documentation
Negative
Unable to produce any policies
Copies of policies have just been cut and pasted from others
No evidence of consultation with stakeholders
Takes time to produce an irrelevant or poor policy
Appendix 2
39
Scenario Table B. What is the country of origin of the timber?
Keep It Legal Manual—Country of Source Forest Scenario Table
Choice nos.
Description
Selection [X]
5
Country of source forest is unknown or uncertain.
4
The country has a weak and ineffective regulatory system with a major lack of
capacity (in terms of manpower and supporting infrastructure) in comparison to
the size of the forest resource. The legal systems and supporting governance
structures are weak and open to corrupt influences. There is limited or no trans-
parency with regard to al regulatory activities connected with the forestry and
timber sectors. Example: Countries with 30% or more production regarded as
suspicious (see Table 1): Estonia, Cameroon, Equatorial Guinea, Gabon, Liberia,
Ghana, Indonesia, Papua New Guinea, China, Peru, Ecuador. (This is not a
complete list.)
3
The country has a relatively ineffective regulatory system with a lack of capacity
(in terms of manpower and supporting infrastructure) in comparison to the size of
the forest resource. The legal systems and supporting governance structures can
be manipulated to obscure the true origin of timber. There is limited transparency
with regard to regulatory activities connected with the forestry and timber sec-
tors. Example: Countries with 15–29% of production regarded as suspicious (see
Table 1): Russia, Latvia, Malaysia. (This is not a complete list.)
2
The country has a reasonably well-managed regulatory system with a significant
capacity (in terms of manpower and supporting infrastructure) to control many
forest crimes. The legal systems and supporting governance structures are
largely effective. When someone commits a forest crime and is caught, there is a
significant degree of transparency with regard to the due legal processes.
1
The country has a rigorous and well-managed regulatory system with sufficient
capacity (in terms of manpower and supporting infrastructure) to more than
adequately control forest crime of all types. The legal systems and support-
ing governance structures are regarded as largely honest and open. There is
transparency with regard to all regulatory activities connected with the forestry
and timber sectors.
40
WWF GFTN Keep it Legal
Scenario Table C. How does the supplier manage its own
wood raw material supply chain?
Keep It Legal Manual—Suppliers Wood Raw Material Scenario Table
Choice nos.
Description
Selection [X]
5
Supplies come from unknown source forests. The supply chain is very complex and
long, with plenty of potential for il egal timber mixing. Supplier shows no commitment
to helping reveal supply chain. The supply chain operators refuse to cooperate with
identifying sources. Documents presented are impossible to independently verify.
4
The supply chain is poorly defined. Timber is imported from free trade port, or
the port of entry is rumored to be associated with the illegal timber trade.
3
The suppliers are working toward traceability with organizations like TFT, WWF
GFTN, GFS, Certisource Timber, or some other independent agency.
2
The structure of the supply chain is wel established and supported and docu-
mented by second-party verification. There are regular inspections by these organi-
zations, which can vouch for the integrity of the supply chain and its transparency.
1
There is complete traceability that is independently verified by internationally
recognized third-party certification companies against a credible standard. The
supply chain is well understood and tightly controlled.
Objective evidence:
Positive
Legitimate copies of certificates
Objective evidence of successful implementation of traceability system
Positive reports issued by independent chain-of-custody experts
Negative
No intention of being involved with any independent certification program
No intention of being involved with any legality verification program
No evidence of any supply chain traceability
Appendix 2
41
Supplier name
Date
Keep It Legal Scenario Tables
Risk Rating Assessment Matrix
Choice selected
Choice table number
Score
Higher risk Lower risk
Part A. What are the supplier’s environmental and
5
4
3
2
1
timber procurement policies?
Part B. What is the country of origin of the timber?
5
4
3
2
1
Part C. How does your supplier manage its own
5
4
3
2
1
wood raw material supply chain?
TOTAL SCORE
Overall Risk Level
TOTAL SCORE
High Risk
9–15
Low Risk
3–8
42
WWF GFTN Keep it Legal
APPENDIX 3
CITES-Listed Species
The Convention on International Trade in Endangered Species of
Appendix III. The third appendix is a voluntary mechanism
Wild Fauna and Flora (CITES) is a global response to concern over
that any country may invoke simply by verifying that its
the trade of endangered species. CITES was enacted in 1975, and
exported specimens were legally harvested. Once a species is
currently 160 countries have ratified the treaty. CITES regulates
listed (by any country) on Appendix III, all exporting countries
the trade in live animals, animal parts, ornamental plants, medicinal
are required to issue a certificate of origin with shipments of
plant parts, and timber species. It seeks to identify threatened species
that species. Export permits are required only if a country has
and create increasingly strong legal barriers to their harvest and trade,
included the species on Appendix III.
depending on their conservation status (see also www.cites.org).
Almendro (Dipteryx panamwnsis)
CITES lists threatened or endangered wood species under three
Spanish cedar (Cedrela odorata)
classifications, known as the Appendices. The restrictions on
trade within these appendices vary depending on the extent to
CITES Listing—Relevance for Responsible Purchasers
which the species is threatened with extinction. The CITES list-
CITES Appendix I-listed species should be avoided. For
ing includes species that are traded for wood products, traded for
Appendix II and III species, a high degree of caution must be
medicinal purposes, and rare but not commercially traded. The
exercised. First, there is a legal obligation on any importer and
species listed below are those that are traded most often in the
trader in these species that ensures that all imports and trades are
international wood products market.
registered with the relevant authorities. Penalties are often large
Appendix I. Species in this list face an imminent threat of
for failure to register imports of Appendix II and III species.
extinction and are banned from all international commercial
The second question concerns the endangered nature of these
trade. Trade is permitted for artificially grown species, products
species. Trade in these species may be legal, but it is impor-
that were created before the species was added to the list, and
tant to recognize that in many cases it is trade that has led to
specimens used for scientific purposes. Permits are required
the need to require close monitoring. CITES-listed species
from both the exporting and importing countries to verify that
are subject to being removed from trade (through removal to
an example of the species was obtained legally.
Appendix I or through a reduction in quotas), so in many cases
Alerce (Fitzroya cupressoides)
there is no guarantee of the long-term availability of species on
Brazilian rosewood (Dalbergia nigra)
Appendices II and III.
Appendix II. International trade in these species is allowed as
long as the country of origin issues documents ensuring that
the harvesting of the species was undertaken legally and that it
is not detrimental to the survival of the species. These species
should be used only when accompanied by a valid chain-of-cus-
tody certificate ensuring that they come from an independently
certified well-managed forest.
Afrormosia (Pericopsis elata)
Lignum vitae (all species of Guaiacum)
Cuban mahogany (Swietenia mahagoni)
Bigleaf mahogany (Swietenia macrophylla)
Ramin (all species of Gonystylus)
Appendix 3
43
APPENDIX 4
The WWF Global Forest & Trade Network
What Is the Global Forest & Trade Network?
Develops and promotes credible certification as a vital tool
to improve forest management and make purchasing of for-
The Global Forest & Trade Network (GFTN) is a WWF-led
est products more responsible.
partnership between leading nongovernmental organizations and
Works with companies to initiate and monitor a stepwise
approximately 300 companies and communities that are commit-
approach to achieve responsible forest management or for-
ted to demonstrating leadership and best practice in responsible
est products sourcing.
forest management and trade. The participants, who represent a
wide range of actors including forest owners, timber processors,
Creates mutually beneficial partnerships between the private
importers, traders, construction companies, retailers, and investors,
sector, community-based operations, NGOs, trade regula-
are organized in affiliated national and regional Forest & Trade
tors, funders, and others to mobilize the technical, financial,
Networks (FTNs) operating across nearly 30 producing and con-
and human resources necessary to achieve transformation.
suming countries in Europe, the Americas, Africa, and Asia.
Focuses activities to improve forest management in forests
that are valuable and threatened.
Since the first FTN was established in the United Kingdom in
Links responsible producers of forest products with buyers
1991, GFTN participants together have generated the demand
interested in purchasing responsibly with lower environ-
that has created a new kind of global market—the market in
mental risk.
environmentally responsible forest products.
The business case for responsible and certified forestry begins
How Does the GFTN Work?
with the need to sustain supplies of raw materials, but also
includes the need to satisfy shareholders, build a positive corpo-
The demand of GFTN participants for responsible forest prod-
rate profile, and establish strategic supply relationships that will
ucts has led to millions of independently certified well-man-
differentiate businesses. To satisfy the needs of its producing,
aged forest hectares worldwide. Yet despite the rapid growth in
supplying, and buying members, the GFTN provides an assort-
demand for credibly certified timber and pulp from producing
ment of services and benefits to members of its FTNs, such as
regions, reliable sources of supply are still limited. Wood and
help with developing responsible purchasing policies, giving
pulp producers working in valuable and threatened forests are
advice on certification, and facilitating contact between impor-
facing complex obstacles and are often unsure of how to achieve
tant stakeholders.
and benefit from certification. Worse, significant trade in wood
and pulp from illegal or controversial sources continues, generat-
GFTN—Working with Responsible Buyers
ing corporate risk for buyers and suppliers and providing unfair
competition for responsible actors by ensuring a supply of dis-
GFTN participation will help you develop a responsible purchas-
counted timber to a generally undiscerning market.
ing policy and deliver on it by giving advice on environmental
concerns and facilitating contacts with responsible suppliers.
The GFTN provides a supporting framework to overcome these
GFTN participation can also give your company recognition as
obstacles in the following ways:
an industry leader.
Works with buyers, suppliers, and producers from across
Encouraging your existing suppliers to join the GFTN or buying
the spectrum of forest products sectors to eliminate illegally
from new suppliers who are participants of the GFTN helps you
harvested and traded forest products and drive improve-
to manage risks, particularly when sourcing high-risk species or
ments in the quality of forest management.
from high-risk countries. GFTN participation ensures that pro-
ducers and suppliers are genuinely committed to responsible for-
estry and receive the technical support and guidance they need
to achieve certification. Although some suppliers may need time
before they can offer credibly certified products, their progress
will be ensured through regular monitoring.
44
WWF GFTN Keep it Legal
GFTN—Working with Responsible
Define the participation scope: The participant shall define an
Producers and Suppliers
initial participation scope that clarifies which forest management
units (FMUs), processing facilities, factories, trading businesses,
Participation in the GFTN can give your company significant
and product range are within the initial scope of its participation.
local, national, or international recognition as an industry leader.
GFTN participation is not a substitute for credible certification
Nominate a senior manager: The participant shall nominate
and responsible forest management; it will help you achieve and
a senior manager who will be responsible for realization of
sustain it. As a GFTN participant you can benefit from practi-
commitments made by the participant and who has sufficient
cal advice, training, and technical support on responsible for-
seniority to do so. The participant may choose to identify another
est management, forest and chain-of-custody certification, and
person for day-to-day contact with the FTN.
responsible supply chain management.
Comply with the communications code: The participant must
The GFTN will also help you establish new contacts with GFTN
agree to follow the GFTN Communication Code of Practice.
buyers. GFTN buyer companies are genuinely committed to buy
from sources that are either credibly certified or in progress to
Pay participation fees: The participant is required to pay an
certification and to report regularly on the implementation of
annual participation fee to the FTN. The fee contributes to the cost
their commitments.
of managing and promoting the FTN and providing services to par-
ticipants. Participants must pay their fees by the due date and can
Networks Around the World
expect the FTN to be accountable for monies raised in this manner.
GFTN works with over 300 companies around the world and
Comply with competition laws: The participant must undertake
operates in the following places:
to respect the competition and antitrust laws relevant to the coun-
try in which the FTN operates and not use any forum arranged
Europe: Austria, Belgium, Bulgaria, France, Germany, Italy,
under the auspices of the FTN to discuss customers, suppliers, or
Netherlands, Romania, Russia, Spain, Sweden, Switzerland,
activities in any way that may be construed as anticompetitive.
United Kingdom
Africa: Central Africa, Ghana
Specific Requirements for Trade Participants
Asia: China, Indonesia, Japan, Malaysia, Vietnam
Americas: Bolivia, Brazil, Central America/Caribbean, North
A stepwise approach to responsible purchasing is fundamental
America, Peru
to this set of requirements. A trade participant shall be required
All FTNs are affiliated with the Global Forest & Trade Network
to do the following:
and all have common minimum requirements. The networks are
Commit to responsible forestry and timber sourcing:
fundamentally similar in their objectives, but the activities and
The participant must submit a public written statement of poli-
services of each network will differ depending on the mix of
cies and practices relevant to its operations for the promotion of
participating companies.
responsible forestry and wood/fiber sourcing.
What GFTN Asks of Participant Companies
Eliminate timber from unwanted sources:
The public written statement of policies and practices for the
To qualify for participation, a participant is required to do the
promotion of responsible forestry must include a commitment to
following:
eliminate, within five years, timber in the products procured by
Operate responsibly: As a condition of participation, the partic-
the participant that originates from unwanted sources (as defined
ipant shall undertake to adhere to business principles for respon-
in Element 6).
sible forestry that go beyond the scope of forest certification,
including transparency when participating in concession alloca-
tion processes and avoidance of bribery and other corrupt busi-
ness practices.
Appendix 4
45
Provide copies of chain of custody certificates
Submit an action plan that sets out time-bound targets and
and related reports:
steps to be taken to implement the participant’s responsible
For each certified site covered by the scope of participation,
timber purchasing policies and practices and to meet the
the participant must submit a copy of a valid certificate from a
commitments described above.
credible certification scheme, the main certification report and
Implement the action plan and meet the specified
reports of any subsequent monitoring visits carried out by the
progress targets.
certification body.
Subject to prior notification of the participant, the GFTN reserves
Increase the proportion of timber from responsible sources:
the right to make the baseline appraisal report summary and the
The public written statement of policies and practices for the
action plan publicly available.
promotion of responsible forestry must include a commitment to
Provide progress reports and permit inspections:
progressively increase the proportion of timber in the products
The participant shall provide regular progress reports (at a fre-
procured by the participant that originates from sources that can
quency specified by the FTN, usually every six or 12 months)
be designated as
and report summaries on action plan implementation, and shall
known and complying with policy,
permit periodic monitoring visits, inspections, or data reviews
known licensed source,
from the FTN coordinator or his or her nominated assessor to
in progress toward certification, or
verify the claims made in the progress reports. Subject to prior
notification of the participant, the GFTN reserves the right to
credibly certified.
make progress report summaries publicly available.
Commit to certification of chain of custody:
Report production volumes:
Where the participant is a manufacturer, trader, or processor,
they must include a commitment to achieve credible chain of
The participant shall provide an annual summary on its timber
custody certification for at least one processing facility, factory,
production. This data shall be supplied in a format agreed to with
or mill owned or managed by the participant within one year
the FTN coordinator and will include data on
and for all facilities, factories, or mills owned or managed by the
– Species of timber handled,
participant within five years.
– Volume of each species harvested annually,
Undergo a baseline appraisal, develop and implement an
– Form and volume of all products sold annually (logs, sawn
action plan, and meet time-bound targets:
timber, machined timber, etc.), and
For each processing or manufacturing facility covered by the
– Environmental status of products.
scope of participation, the participant must do the following:
Specific Requirements for Forest
Undergo a baseline appraisal to determine whether the
chain-of-custody system is certifiable and to identify
Participants
all areas of noncompliance with requirements of the
A stepwise approach to credible forest certification is funda-
nominated, locally operational, credible chain–of-custody
mental to this set of requirements. A forest participant shall be
certification system, and to determine the environmental
required to accept the following conditions:
status categories of the entire timber supply. The appraisal
must be carried out by a suitably qualified and experienced
Commit to responsible forestry:
assessment team.
The participant must submit a public written statement of poli-
Submit a comprehensive baseline appraisal report and
cies and practices relevant to its operations for the promotion of
report summary.
responsible forestry.
46
WWF GFTN Keep it Legal
Commit to certification of all forest management units:
Subject to prior notification of the participant, the GFTN reserves
Where the participant is responsible for managing several
the right to make the baseline appraisal report summary and the
FMUs, the public written statement of policies and practices
action plan publicly available.
must include a commitment to achieve and maintain
Comply with relevant laws:
credible forest certification for at least one FMU within five
The participant must
years and for all FMUs within 10 years, and
undertake to supply only timber that has been legally
credible chain-of-custody certification (covering the timber
harvested; and
tracking system from the forest to first point of sale) within
one year.
undertake to pay all forest charges as they become due.
Provide copies of forest certificates and related reports:
Provide progress reports and permit inspections:
For each certified FMU covered by the scope of participation,
The participant shall provide regular progress reports (at a fre-
the participant must submit a copy of a valid certificate from a
quency specified by the FTN—usually every six or 12 months)
credible certification scheme, the main certification report, and
and report summaries on action plan implementation, and permit
reports of any subsequent monitoring visits carried out by the
periodic monitoring visits and inspections from the FTN coor-
certification body.
dinator or his or her nominated assessor to verify the claims
made in the progress reports. Subject to prior notification of the
Undergo a baseline appraisal, develop and implement
participant, the GFTN reserves the right to make progress report
an action plan on uncertified forest management units:
summaries publicly available.
For each uncertified FMU covered by the scope of participation,
the participant must
Report production volumes:
The participant shall provide an annual summary on its timber
Undergo a baseline appraisal to determine whether the FMU
production. This data shall be supplied in a format agreed to with
is certifiable and to identify all areas of non-compliance that
the FTN coordinator and will include data on
preclude certification under the nominated locally-opera-
tional credible certification scheme (also called “gaps”,
– Species of timber handled,
preconditions or major non-compliances) or membership
– Volume of each species harvested annually,
of the FTN. The appraisal must be carried out by a suitably
– Form and volume of all product sold annually (logs, sawn
qualified and experienced assessment team.
timber, machined timber, etc.), and
Submit a comprehensive baseline appraisal report and
– Environmental status of products.
report summary. The appraisal report must provide clear
evidence that the participant has a legal right to harvest in
The full participation requirements for GFTN are available
the FMU. Where the participant’s legal right to harvest is
from www.panda.org/gftn.
disputed by another party, the participant shall either pro-
vide evidence of prior resolution of the dispute through a
voluntary settlement or court order or undertake to satisfac-
torily resolve the dispute within 12 months, subject to the
right of the FTN coordinator to suspend the participant if
the undertaking is not fulfilled.
Submit an action plan with time-bound progress targets for
achieving credible forest certification within five years and
credible chain-of-custody certification (covering the tim-
ber tracking system from the forest to first point of sale)
within one year.
Implement the action plan and meet the specified
progress targets.
Appendix 4
47
APPENDIX 5
Examples of Responsible Purchasing Policies
for Forest Products
Example 1
Responsible purchasing policy—Forest products
This organization is committed to the responsible purchas-
To ensure that these goals are achieved, this organization will
ing of forest products. Our long-term intention is that all
Scrutinize all suppliers of forest products for all pur-
timber used in products that we purchase or specify is sourced
chases of goods for resale, not for resale, and in all new
from well-managed forests that have been certified to cred-
construction activities.
ible certification standards, and/or are from post-consumer
recycled materials.
Seek information on the source of the wood, fiber or
other forest materials in the products we harvest and the
This commitment will be realized through a stepwise
circumstances under which they were harvested.
approach to responsible purchasing that uses the best avail-
Seek information on the chain of custody of the forest
able techniques and information.
products we purchase, including the circumstances under
This organization will not source products containing timber,
which they were manufactured and traded.
fiber, and other raw materials if the following apply:
Evaluate chain-of-custody information against this
The source forest is known or suspected of containing
policy and supporting operational procedures.
high conservation values, except where the forest is
Continually improve the level of compliance with
certified or in progress to certification under a credible
these policies, using annual reviews, reports, and actions
certification system, or the forest manager can otherwise
agreed upon with our suppliers.
demonstrate that the forest and/or surrounding landscape
Work with and encourage suppliers and forest
is managed to ensure those values are maintained.
sources that are actively engaged in a process of time-
The source forest is being actively converted from
bound, transparent, stepwise commitment to credible
natural forest to a plantation or other land use, unless
certification (such as WWF Forest and Trade Network
the conversion is justified on grounds of net social and
participants in producer countries).
environmental gain, including the enhancement of high
Work with key stakeholders to ensure that best practice
conservation values in the surrounding landscape.
is followed.
The material was illegally harvested or traded.
Set annual, publicly communicated targets regarding
The material was traded in a way that drives violent
our performance.
armed conflict or threatens national or regional
Maximize the use of post consumer recycled timber.
stability (i.e., what is commonly called conflict timber).
The harvesting or processing entity, or a related political
or military regime, is violating human rights.
The material is sourced from genetically modified trees.
The source forest is unknown.
48
WWF GFTN Keep it Legal
Appendix 5—Example 2
Responsible purchasing policy—Forest products
As a [public/business/opinion] and global leader, [COMPANY
3. [NAME] will reduce and by [DATE] eliminate its
NAME] is committed to leveraging our influence in the mar-
purchase of wood, paper, and other products con-
ketplace to conserve, protect and restore natural resources.
taining timber from controversial sources, including
As a cornerstone of that commitment, [NAME] will pursue
conflict timber, entities accused of human rights vio-
a Responsible Timber Purchasing Program to promote the
lations and genetically modified trees.
development of markets for environmentally responsible
Explanation: [NAME] intends not to give support to
forest products.
regimes and practices that have a detrimental impact
on civil society or the environment. [NAME] will
PREAMBLE
remain aware of controversial source areas that may
[NAME] recognizes that leadership in the global marketplace
be identified by internal and external stakeholders, and
carries a responsibility to the environment and, in particular,
will adopt a precautionary approach regarding the use
a responsibility to promote the conservation, protection, and
of genetically modified trees, which pose risks to native
restoration of the world’s forests. [NAME] is a leader in [a
species and may cause large-scale disruptions in the eco-
market/public/opinion sector that is relevant]. Therefore,
logical food web.
[NAME] is positioned to influence [supply and/or demand]
4. [NAME] will reduce and by [DATE] eliminate its
in the market, and thus contribute to the development of envi-
purchase of wood, paper, and other products contain-
ronmental solutions that influence responsible forest manage-
ing timber from harvesting operations that threaten
ment. [NAME] fully supports responsible forest management
high conservation values or involve unjustified con-
practices that promote ecosystem sustainability, biodiversity,
version of natural forest to other land uses.
and long-term environmental, social, and economic benefits.
Explanation: [NAME] intends to expedite the transition
Toward these ends, [NAME] hereby establishes the following
away from forest harvesting practices that lead to envi-
policy commitments:
ronmental degradation and will embrace a scientifically
credible, land-based assessment to identify and appro-
POLICY
priately manage forests that contain exceptional envi-
1. [NAME] will work with all vendors and associated
ronmental and social values. [NAME] will regard high
suppliers to trace the origin of our current products.
conservation value as safe from threat if the forest is
Explanation: Traceability in the forest product supply
certified or in progress to certification under a cred-
chain is crucial to assessing whether or not the forest
ible certification system, or if the forest manager can
products used were derived through environmentally
otherwise demonstrate that the forest and/or surround-
responsible means. [NAME] will attempt to determine
ing landscape is managed to ensure those values are
not just where current products were purchased, but
maintained. Similarly, [NAME] will only accept con-
where the timber in those products was grown, taking into
version as justified in the rare circumstances that it can
account the possible necessity for third-party verification.
be justified on grounds of net social and environmental
gain, including the enhancement of high conservation
2. [NAME] will require that all vendors and associ-
values in the surrounding landscape.
ated suppliers demonstrate compliance with all legal
requirements for forest management, timber harvest-
5. [NAME] will promote the appropriate and efficient
ing and related trade, with third-party verification in
use of wood, paper, and other forest products.
high-risk areas.
Explanation: [NAME] intends to contribute to efforts
Explanation: [NAME] will work to ensure that no market
that maximize use of the entire fiber resource and assist
advantage is realized by entities that circumvent the law,
in the reduction of per capita consumption.
and encourage support for forest conservation, protection,
and environmental law enforcement mechanisms.
Appendix 5
49
Appendix 5—Example 2 (continued)
6. [NAME] will advocate and incorporate the use
8. [NAME] will publish and distribute to all interested
of sustainability-based criteria in selecting
stakeholders an annual report, which will detail our
alternative materials.
progress in implementing this policy and commitment
Explanation: [NAME] intends to support the expan-
to continuous improvement.
sion of the natural resource base and promote life-cycle
Explanation: [NAME] will seek to maintain open com-
assessment as a metric of environmental merit.
munications and collaborative relationships with all
7. [NAME] will give purchasing preference to products
stakeholders interested in our environmental perfor-
from credibly certified, well-managed forests and
mance by providing standardized information about our
those from suppliers that have made a commitment
environmental performance on an annual basis.
to progress toward credible certification.
Explanation: [NAME] intends to promote the develop-
ment of markets for environmentally preferable products
by supporting certification of best management practices
through the purchase of credibly certified forest prod-
ucts, when price and availability allow.
50
WWF GFTN Keep it Legal
APPENDIX 6
Glossary
Credibly certified—Source category for FSC or other forest
Forest participant (in a Forest & Trade Network)—A participant
certification, with specified criteria and requirements.
who is a forest owner or manager. The participant may or may
not possess credibly certified forest management units (FMUs).
Criteria
The source forest is certified as well managed under a
Harvesting charges—The charges due to the resource owner or
credible forest certification system.
official body, such as a regional or national government, arising
as a result of the harvesting of forest resources.
Verification requirements
High conservation values (as defined by the Forest Stewardship
Confirmation that the source forest is covered by a for-
Council)—Any of the following values:
est management certificate issued under a credible forest
certification system at the time of harvesting.
Forest areas containing globally, regionally, or nationally
Confirmation that a valid chain-of-custody certificate
significant concentrations of biodiversity values (e.g.,
number, issued by an accredited certification body under
endemism, endangered species, and refugia).
a credible forest certification system, is printed on the
Forest areas containing globally, regionally, or nation-
relevant invoices and attached to the product.
ally significant large-landscape-level forests contained
within, or containing, the management unit where
Credible chain-of-custody certification—Certification of specified
viable populations of most if not all naturally occurring
products as traceable back to raw material source by a third party
species exist in natural patterns of distribution
(for example, an accredited certification body).
and abundance.
Credible forest certification—Certification by a third party that
Forest areas that are in or contain rare, threatened, or
a forest is well managed, under a certification system requiring
endangered ecosystems.
(a) participation of all major stakeholders in the process
Forest areas that provide basic services of nature in criti-
of defining a standard for forest management that is
cal situations (e.g., watershed protection, erosion control).
broadly accepted;
Forest areas fundamental to meeting basic needs of local
(b) compatibility between the standard and globally appli-
communities (e.g., subsistence, health).
cable principles that balance economic, ecological, and
Forest areas critical to local communities’ traditional
equity dimensions of forest management; and
cultural identity (areas of cultural, ecological, economic,
(c) an independent and credible mechanism for verifying
or religious significance identified in cooperation with
the achievement of these standards and communicating
such local communities).
the results to all major stakeholders.
Illegal logging (and related trade and corruption)—Harvesting
Environmental status—The source category designation of the
or trading of in violation of relevant national or subnational laws,
timber in a given product. WWF GFTN recognizes the following
or access to forest resources or trade in forest products that is
categories:
authorized through corrupt practices.
Unwanted
In progress to certification—Source category with specified cri-
Known
teria and requirements denoting environmental status of source.
Known licensed
Criteria
In progress to certification
The source is a known licensed source.
Credibly certified
The source entity has made a public commitment to
Recycled
achieve credible certification of the source FMU.
Appendix 6
51
A site inspection has been carried out by a suitably
The purchaser has systems in place that periodically
qualified and experienced assessment team to deter-
check the authenticity of this documentation.
mine whether the source FMU is certifiable and to
identify all areas of noncompliance with certification
Known licensed source—Source category with specified
requirements.
criteria and requirements denoting environmental status
of source.
The source entity
has agreed to a time-bound, stepwise action plan to
Criteria
achieve certification of the source FMU;
The purchaser knows where the timber was grown and
provides periodic progress reports on implementation
can identify the harvesting entity.
of its action plan, and is open to third-party inspec-
The timber originates from an entity that has a legal
tion to verify that progress is being made as reported;
right to harvest timber in the forest management unit
is participating in an initiative that supports and
where the timber was grown.
monitors stepwise progress toward credible forest
Verification requirements
certification (e.g., the entity could be a forest partici-
The timber can be traced along an unbroken chain of
pant in an FTN or a project of the Tropical
custody from the purchaser back to the source entity.
Forest Trust).
Each delivery of timber-based products to the purchaser
Verification requirements
is supported by documentation that identifies the source
Confirmation from information issued by the
forest management unit and source entity and each inter-
certification support initiative that these criteria are
mediary in the supply chain.
satisfied with respect to a given source.
The purchaser has documentation demonstrating the
The timber can be traced along an unbroken chain of
source entity’s legal right to harvest.
custody from the purchaser back to the source entity.
The purchaser, and/or its suppliers, has systems in
A second- or third-party auditor has confirmed the
place that periodically check the authenticity of the
integrity of the chain-of-custody documentation and
documentation and integrity of the chain-of-custody
control points.
control points.
If the purchaser is made aware of any dispute over
Known Source—Source category with specified criteria and
the entity’s legal right to harvest, the purchaser should
requirements denoting environmental status of product source.
inquire into the status of the dispute. An entity’s claimed
right to harvest should not be regarded as having been
Criteria
verified while legal proceedings are in progress alleg-
The purchaser knows where the forest material was
ing that the entity is in breach of the law governing the
grown and can identify the harvesting entity.
acquisition of either harvesting rights from the resource
As far as the purchaser is aware, the source is not
owner(s), or regulatory approval (i.e., a permit, license,
unwanted, as described in the purchasing organization’s
or similar instrument) for the harvesting of timber.
policy.
Legally harvested—Timber that was harvested
Verification requirements
(a) pursuant to a legal right to harvest timber in the forest
The source forest is identifiable to a degree of precision
management unit in which the timber was grown, and
that is commensurate with the risk that the source may
(b) in compliance with national and subnational laws
be unwanted. For example, where the risk is low, the
governing the management and harvesting of forest
location could be as broad as a district; where risk is
resources.
higher, the specific forest management unit should
be identifiable.
Legally traded—Timber, or products made from the timber,
The timber can be traced along an unbroken chain of
that was
custody from the purchaser back to the source entity.
(a) exported in compliance with exporting country laws
Documentation is provided that identifies the source
governing the export of timber and timber products,
location, the source entity, and each intermediary in the
including payment of any export taxes, duties, or levies;
supply chain.
52
WWF GFTN Keep it Legal
(b) imported in compliance with importing country laws
Documentation has not been provided that identifies the
governing the import of timber and timber products,
source location, the source entity, and each intermediary
including payment of any import taxes, duties, or levies
in the supply chain.
or in contravention of exporting country laws governing
The participant does not have systems in place that peri-
the export of timber and timber products, including pay-
odically check the authenticity of this documentation.
ment of any export taxes, duties, or levies;
(c) traded in compliance with legislation related to the
Unwanted source—A source that falls within one or more of the
Convention on International Trade in Endangered
following categories:
Species (CITES), where applicable.
The source forest is known or suspected of containing
high conservation values, except where
Legal right to harvest—Authorization to harvest in the forest
management unit
The forest is certified or in progress to certification
under a credible certification system, or
(a) from the resource owner(s), and
The forest manager can otherwise demonstrate that
(b) under a valid permit, license, or similar instrument
the forest and/or surrounding landscape is managed
issued pursuant to the laws and regulations governing
to ensure those values are maintained.
the management and harvesting of forest resources.
The source forest is being actively converted from
Protected area—An area of forest especially dedicated to the
natural forest to a plantation or other land use, unless
protection and maintenance of biological diversity, and of natu-
the conversion is justified on grounds of net social and
ral and associated cultural resources, and managed through legal
environmental gain, including the enhancement of high
or other effective means.
conservation values in the surrounding landscape.
Resource owner(s)—The holder(s) of property and usufruct rights
The timber was illegally harvested or traded.
over the land and/or trees within a forest management unit, includ-
The timber is conflict timber (i.e., it was traded in a way
ing legally recognized rights held according to customary law.
that drives violent armed conflict or threatens national or
regional stability).
Source—A combination of the supplying entity and the place
from which the timber in a product originates. The source com-
The harvesting or processing entity, or a related political
prises the location where the timber was grown and the entity
or military regime, is violating human rights.
that was responsible for harvesting the timber.
The timber is from genetically-modified trees.
The source forest is unknown.
Timber—Wood, fiber, and other woody materials harvested
from trees.
Verified legal—Source category with specified criteria and
Trade participant (in a Forest & Trade Network)—A partici-
requirements denoting environmental status of product source.
pant who is a processor, manufacturer, trader, specifier, or end
Criteria
user of timber or paper products.
The source is a known licensed source.
Unknown source Source category with specified criteria and
The source entity legally harvested the timber.
requirements denoting environmental status of product source.
All harvesting charges have been duly paid.
The purchasing organization does not know where the
The timber was legally traded.
timber was grown and cannot identify the harvesting
entity. The source forest is not identifiable to a degree
Verification requirements
of precision that is commensurate with the risk that the
A third-party auditor has confirmed that the timber was
source may be unwanted. For example, where the risk
legally harvested and legally traded and that all harvest-
is low, the location could be as broad as a district, and
ing charges were duly paid.
where risk is higher, the specific forest management unit
The timber can be traced along an unbroken chain of
(FMU) should be identifiable.
custody from the purchaser back to the source entity.
The timber cannot be traced along an unbroken chain of
A third-party auditor has confirmed the integrity of the
custody from the participant back to the source entity.
chain-of-custody documentation and control points.
Appendix 6
53
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1.
2.
controlled
from
3.
4.
5.
de
declar
Fiscal
1.
2.
3.
4.
a
n
a
g
e
r
s
a
n
d
o
t
h
e
r
W
m
N
w
b
y
F
F
T
allo
en
b
y
W
to
k:
Office
en
or
giv
s
w
giv
y
y
or’
ational
ocessing
Ma
wmill
vironmental
Pr
documents
Documents
sa
—License
the
Hall
—Oper
License
En
Secretar
e
n
t
s
t
h
a
t
s
h
o
u
l
d
b
e
a
v
a
i
l
a
b
l
e
t
o
b
u
y
e
r
s
w
i
t
h
t
h
e
a
s
s
i
s
t
a
n
c
e
o
f
W
t
A
TPF
T
ranspor
documents
1.
,
-
a
.
a
-
This
er
legal
par
all
in
de
orest
ação
b
uy
(F
ation)
susten
e
xplor
Lists
Products
processes
ização
ization)
final
enda
V
Declar
Explor
h
i
s
l
i
s
t
h
a
s
b
e
e
n
p
r
e
p
a
r
e
d
w
Produtos
to
management
logging
utor
needed
Manejo
de
orest
uthor
tation
VPF—
UTEX—
de
D
de
A
le
(F
A
is
Florestais
Sale
de
documents
te
t
v
est
of
of
desmatamento
y
ação
y
legal
mit)
anspor
har
ização
ou
tr
or
Plano
per
A
TPF—A
Cop
Cop
el
Forest
utor
1.
T
r
anspor
Florestal
T
r
anspor
document
the
from
2.
Declar
Produtos
Products
3.
A
do
táv
(Sustainab
plan
tion
b
e
r
o
f
t
h
e
p
r
o
d
u
c
i
n
g
c
o
u
n
t
r
i
e
s
,
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t
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d
e
n
t
i
f
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e
s
t
h
e
k
e
y
d
o
c
u
m
le
the
that
.
e
,
f
or
f
orest
A
ual
b
y
is
v
ation,
plan
ictiv
f
or
v
esting
PO
v
estab
route
b
e
r
o
f
Ann
a
plans
v
ed
Management
unit
har
connect
the
or
v
ested.
e
xploitation
har
restr
preser
2004.
f
or
main
y
ear
y
that
v
e
ual,
y
har
(appro
orest
IBAMA
as:
le
the
07-Ibama).
be
more
a
y
Documentation
F
An
a
b
y
to
e
v
er
,
such
appro
to
manent
w
to
ks
la
mahogan
management
7
that
v
ed
management
mativ
per
planned
h
e
r
e
a
r
e
a
n
u
m
y
w
December
areas
ational
Plan)
no
areas
inaccessib
are
b
loc
ne
the
Nor
mahogan
of
appro
le),
in
a
ere
as
Legal
i
t
h
r
e
s
p
e
c
t
t
o
t
h
e
l
e
g
a
l
i
t
y
o
f
f
o
r
e
s
t
p
r
o
d
u
c
t
s
.
T
ation.
f
orest
ab
ation).
ation
Oper
the
is
w
required
be
areas
e
d
h
a
r
v
e
s
t
i
n
g
p
e
r
i
o
d
.
ictions:
ução
h
e
a
r
e
a
a
l
o
c
a
t
e
d
t
o
t
h
e
e
x
p
l
o
r
a
t
i
o
n
necessar
ational
ws
v
esting
y
is
The
xplor
xplor
Routes
is
regulate
Notes
h
i
s
p
l
a
n
c
a
n
b
e
d
i
v
i
d
e
d
i
n
t
o
t
h
r
e
e
It
Plan
e
xplor
T
p
h
a
s
e
s
:
1.
divided
(e
and
(e
2.
e
xplor
3
.
T
i
s
d
i
v
i
d
e
d
i
n
t
o
b
l
o
c
k
s
o
f
a
n
n
u
a
l
e
x
p
l
o
r
a
t
i
o
n
.
T
b
l
o
c
k
s
t
h
a
t
c
a
n
b
e
h
a
r
v
e
s
t
e
d
a
n
n
u
-
a
l
y
,
a
n
d
e
a
c
h
b
l
o
c
k
h
a
s
a
n
i
n
v
e
n
t
o
r
y
o
f
t
r
e
e
s
e
l
i
g
i
b
l
e
f
o
r
c
u
t
t
i
n
g
,
f
o
r
e
a
c
h
a
l
o
w
It
(Plano
Oper
allo
Restr
There
to
(Instr
There
har
IBAMA)
i
n
g
l
i
s
t
i
s
n
o
t
e
x
h
a
u
s
t
i
v
e
,
b
u
t
f
o
r
a
n
u
m
ting
y
APPENDIX
Countr
azil
h
e
f
o
l
l
o
w
Expor
Countr
Br
T
d
e
g
r
e
e
o
f
c
o
n
f
i
d
e
n
c
e
w
54
WWF GFTN Keep it Legal
with
tation
mit
xpor
er
P
d’e
pest
t
LIC(s).
and
Expor
to
documents
t
isation
utor
A
Disease
Timber
erence
Expor
1.
1.
q
u
a
r
a
n
t
i
n
e
c
e
r
t
i
fi
c
a
t
e
1.
ref
,
.)
ers
is
ter
ually
de
that
ref
issue
.
Inspection
(LIC).
(This
ann
of
LIC
that
Expor
sheet
le
to
.
ab
date
a
ybill
ood
w
k
ocessing
tificate
tificate
Attestation
Lumber
T
ally
ers
W
LIC
W
Pr
documents
1.
specifications
1.
Cer
2.
ref
3.
to
4.
Cer
rene
chec
.
v
oiture
erence
t
v
e
y
ance
(LMCC).
,
es
de
ref
siz
con
v
e
y
ance
,
tificate
tificate
Lettre
Log
Log
Con
Species
T
ranspor
documents
1.
1.
cer
1.
Measurement
&
Cer
Includes
to:
v
olume
-
ou
es
iat
de
State
ty
(This
le
v
e
y
issued
m,
m,
the
&
prof
that
b
y
or
m
ab
sur
m—this
F
stump
log(s)
or
F
to
la
tenar
visoire
w
or
or
Lists
v
ed
production
F
code
Commission.
the
F
tificate
de
tment
“Proper
par
pro
quota
area
admission
Schedule
y
d’assiette
chantier
rene
mit
a
mation
Cer
de
ood
scheme
mation
de
appro
is
w
er
P
or
or
mation
documents
at
Depar
y
ears)
unique
orestr
rément
v
ention
e
or
tificat
v
esting
y
5
ual
v
esting
v
esting
v
esting
F
Inf
identifies
Inf
corresponds
Measurement
f
orestière
net
been
y
design
include
”
a
Inf
tificate
elling
k,
corresponding
v
e
y
ance
L
’ag
Contr
Con
Cer
Car
Har
Ann
Har
Har
Concession/Lease
reement
Har
F
ust
the
T
ree
Log
Log
Forest
orestr
1.
sion
2.
3.
définitiv
4.
coupe
5.
1.
has
F
document
e
v
er
2.
plan
3.
and
4.
cer
1.
Ag
2.
3.
m
mar
b
y
4.
which
and
5.
which
T
ree
6.
Con
(LMCC).
al
b
y
are
y
ted
ts
timber
within
natur
are
Documentation
wn
and
f
orestr
wn
f
or
f
orest
bear
Timber
sa
e
xpor
tment
e
xpor
products
sa
Ghana
v
est
the
f
or
from
and
the
log
v
ested
f
or
the
har
Ghana.
same
of
ted
,
har
legally
should
Depar
of
documents
timber
.
t
Legal
tment.
the
from
v
al
.
legal
nment
from
be
y
required
e
xpor
China.
and
required
are
timber
wing
v
e
v
er
e
xpor
tment
depar
ted
appro
are
go
f
orests
of
logs
from
of
f
ollo
pro
are
plantations
cannot
al
and
v
elopment
ed
ts
to
timber
e
xpor
documents
De
depar
Commission.
and
circumstances
w
the
of
point
a
y
t
and
y
e
xpor
logs
documents
Logs
natur
All
to
Countr
most
allo
Chinese
stamp
Notes
or
orestr
Documents
timber
Cameroon.
In
not
F
China,
required
e
xpor
the
management
Documents
and
The
f
orest
Note:
from
Note:
gate
the
Industr
(TIDD),
F
ued)
ting
y
Expor
Countr
Cameroon
China
Ghana
(contin
Appendix 7
55
-
the
b
y
nal
timber
indicat
produce
Cutting
to
inter
wn
the
issued
sa
to
f
or
records
used
igin
the
ere
listed
Or
tment
f
or
w
erence
of
ref
lists
Custody
logs
documents
Lading
Depar
of
t
with
.
plus:
y
,
of
tificate
king
documents
ac
which
timber
Bill
Cer
P
Chain
Expor
ade
orestr
All
tr
1.
2.
F
3.
4.
ing
the
WTWB
License
.
the
to
with
License
ocessing
erence
Pr
documents
WTWB
ref
Cutting
.
,
-
y
-
-
of
to
ma
v
ol
load
WTWB
or
of
should
License
t
tation
(WTWB)
inf
o
wnership
unloading.
erence
accompan
v
ements
.
The
place
ref
ood
Bill
on
,
and
WTWB
e
Cutting
W
a
y
vides
ust
mo
T
ranspor
documents
A
T
r
anspor
W
m
all
timber
pro
tion
specification,
ume
ing
The
mak
the
-
y
f
or
a
b
y
logs
log
t
mill.
on
.
a
f
or
ear
is
to
from
v
olume
logs
required
vice
reement
the
e
n
t
t
h
a
t
i
s
summar
e-y
license
map
a
anspor
is
The
issued
Lists
ag
of
fiv
L
a
r
e
a
)
that
tr
and
Ser
a
n
n
u
a
l
c
u
t
t
i
n
g
pond
is
K
logs
is
Indonesia:
area
T
tree
t
to
list
required
log
HPH
K
RKL
pond
v
esting.
orest
indicating
cutting
that
v
est
k
u
r
d
o
c
u
m
License
F
documents
within
of
of
log
quantity
License
y
y
har
document
anspor
from
tr
a
map
v
ed
detailed
o
p
y
o
f
R
i
t
h
i
n
t
h
e
R
to
u
k
u
U
to
to
document
State
Cop
Cop
Prehar
DP
SKSHH
logs
Cutting
ior
Forest
aded
Documents
tr
1.
2.
management
with
appro
3
.
C
l
i
c
e
n
s
e
(
a
r
e
a
i
n
d
i
c
a
t
e
d
s
h
o
u
l
d
f
a
l
w
4.
5
.
B
a
l
o
g
l
i
s
t
t
o
r
e
c
o
r
d
l
o
g
e
x
t
r
a
c
-
t
i
o
n
a
t
f
o
r
e
s
t
l
o
g
l
a
n
d
i
n
g
6.
list
est
7.
log
specific
of
DHH
SKSHH.
A
pr
Cutting
the
as
v
e
.
.
ha
.
f
or
of
ies
date
Documentation
are
y
no
protect
to
identified
Indonesia
2004,
timber
this
industr
logs
Ministr
decree
Indonesia,
598/MPP/
wn
from
from
sa
issued
Indonesia
y
of
&
Legal
an
and
joint
of
ted
obtained.
,
y
y
ts
y
been
from
September
processing
ore
banned
e
xpor
ts
obtained.
outside
orestr
24
F
has
Industr
e
xpor
are
ood
illegally
ood
w
theref
of
ore
al:
e
xpor
illegally
y
and
that
decree
wnw
Countr
log
species
sa
theref
Notes
ep/9/2004,
Gener
All
banned;
Indonesian,
been
Ministr
T
r
ade
350/Menhut-VI/2004
K
states
all
The
domestic
All
is
ued)
ting
y
Expor
Countr
Indonesia
Latvia
(contin
56
WWF GFTN Keep it Legal
&
or
in
(BK1)
uvian
f
orest
m
er
(disease
b
y
P
tified
timber
f
or
eninsula
(P
ak)
b
y
wn
a
w
tificate
issued
sa
ation
mit
er
igin
cer
P
(Sar
Or
the
t
y
mit
of
antine—cer
timber)
of
Declar
tificate
er
commerce
P
wn
cer
list
documents
Expor
lading
of
quar
t
t
sa
of
tificate
yto-sanitar
tment—INRENA
king
products
pest
of
ac
Customs
MTIB
STIDC
Bill
Cer
Ph
Expor
P
ood
Expor
1.
2.
Sabah)
3.
1.
2.
chamber
3.
and
case
4.
depar
5.
w
ak:
lieu
pass/
y
Letter
er
tment
in
a
w
receipt
v
al
yment
the
yment
the
the
pa
bank
Sabah
Depar
of
pa
of
y
taking
y
remo
Disposal
of
y
y
v
oice/deliv
y
alty
the
cop
y
alty
local
cop
o
n
t
r
a
c
t
s
o
f
s
a
l
e
e
e
n
t
h
e
f
o
r
e
s
t
ocessing
mit
mit
Log
In
cop
ro
a
Under
ro
A
Pr
documents
eninsula/Sar
orestr
er
P
1.
per
2.
note
Sabah:
A
of
from
F
or
of
of
from
2.
Timber
P
3
.
C
b
e
t
w
o
p
e
r
a
t
i
o
n
a
n
d
a
l
p
l
a
y
e
r
s
i
n
t
h
e
s
u
p
p
l
y
c
h
a
i
n
t
o
t
h
e
p
r
o
c
e
s
s
o
r
.
u:
t
-
a
er
logs
P
to
to
guide
logs
quantity
of
t
anspor
(includ
list
f
or
tr
logs
.
Includes
tax
within
t
list
log
ance)
orest
the
specific
v
olume
orest
adv
Log
F
Remission
F
T
ranspor
documents
aded
anspor
Documents
required
tr
1.
2.
document
ing
tr
purchaser
the
and
3.
4.
(in
y
Plan
&
f
or
Sabah/
orestr
Plan
F
(PGMF)
Plan
in
Lists
eninsula,
P
v
el
king
State
Plan
king
required
in
or
orest
F
or
Management
W
W
documents
v
el
from
al
t:
ak)
ual
tment
ual
orest
a
w
A)
F
Ann
Gener
Ann
Forest
Documents
e
xpor
1.
(State-le
concession-le
Sar
2.
License
Depar
1.
Management
2.
(PO
u.
er
al
and
the
P
Documentation
f
or
from
Gener
v
al
from
ed
(PGMF)
ed
w
w
appro
allo
require
Plan
tment—INRENA.
allo
Legal
u
not
y
ysia.
er
Plan
not
P
depar
are
king
are
ts
Mala
ts
from
or
W
policy
al:
Management
y
e
xpor
cut
ual
e
xpor
Countr
Notes
eninsula
orest
Gener
Log
P
Notes:
Logs
F
Ann
f
orestr
Log
ued)
ting
y
ysia
u
Expor
Countr
er
Mala
P
(contin
Appendix 7
57
documents
t
Expor
-
o
o
d
p
a
n
y
p
a
n
y
f
or
clear
the
-
as
(based
v
enance
mation
quantity
o
o
d
)
.
and
mation
with
quantity
pro
or
ood:
or
of
mill
w
processed
process
plus:
w
timber
o
n
t
r
a
c
t
o
f
s
a
l
e
e
e
n
t
h
e
c
o
m
,
sa
ood
ocessing
h
e
r
e
t
h
e
c
o
m
wn
w
T
r
ansf
T
r
ansf
logs
Log
wn
Pr
documents
Logs:
1
.
C
b
e
t
w
p
a
n
y
e
x
p
o
r
t
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n
g
l
o
g
s
a
n
d
a
s
t
a
n
d
i
n
g
w
p
r
o
c
e
s
s
i
n
g
c
o
m
(
w
e
x
p
o
r
t
i
n
g
t
h
e
l
o
g
s
d
o
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58
WWF GFTN Keep it Legal
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60
WWF GFTN Keep it Legal
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