Ch i f t d tifi ti Chain of custody certification
What is it? How do you get it? Is it worthwhile?
Hamish Crawford Cailum Pty Ltd
P t ti t Presentation to:
Carter Holt Harvey
Sales & Marketing Meeting Sales & Marketing Meeting Melbourne, 16 April 2008
Chain of custody certification
Why is it important?
Why is it important?
How does it work?
Growth in forest certification and the il bilit f tifi d f t d t availability of certified forest products
Chain of custody requirements y q
Implementing the requirements
Getting certified
Background g
Global decline in forest areas
Impacts of unsustainable practices
Biodiversity
Soil and water
Soil and water
Communities and workers
No recognition for good practice
Trade in illegal forest products
Australian imports of forest products from high risk sources
Australia imports $0.5 billion wood products from Indonesia and Malaysia alone each year
Imports into Australia of wood products – 2005/06 ($ million) 600
Indonesia:
Illegal harvesting
Malaysia:
Illegal harvesting estimated at 35%
500
harvesting estimated at 70-90%
300 400
$ (millions) Paper manufactures
100 200
$
Miscellaneous Wood-based panels Paper & paperboard
p
0
Indonesia Malaysia
Sawnwood
Source: Jaakko Pöyry (2005) Source: ABARE (2007)
The response – independent certification
Chain of custody certification
CONNECTS CONNECTS
Sustainable forest management g Consumer decisions
Certification and the chain of custody
ransport logs
Sawmill
Transport sawn timber
Forest End
consumer
Furniture factory/
retailer
Tr s
Certificate chain
COC certificate
- Assumes logs
COC certificate FM
Certificate
logsCertificate chain
purchased at stump, timber
delivered
certificate
Certificate
Certification - how does it work and what’s available in Australia?
Involves 3 stages - standards development, accreditation and certification
Australian Forest
Certification Scheme Forest Stewardship Council St d d A t li
PEFC
recognition AS4708 - AFS AS4707 - COC
FM Principles
and Criteria COC Standards Australia
development process Standards development
FSC ti l
recognition AS4708 AFS AS4707 COC
Accreditation
JAS-ANZ Independent certification Independent certification ASI
FSC national initiatives
Interim standards applied Accreditation
accreditation accreditation
Woodmark SmartWood
bodies bodies
pp Certification
Forest growers
Processors
Manufacturers Forest
growers
Processors Manufacturers Forest
growers
g Agents
Retailers
g Agents
Retailers g
FSC and AFS – basic principles of management
FSC principles of forest stewardship AFS criteria for sustainable management
p p g
Tenure and use rights and 2
Compliance with laws and FSC principles
1
Public participation 2
Management system 1
Community relations and worker's 4
Indigenous peoples' rights 3
responsibilities
Forest productive capacity 4
Protect and maintain biological diversity 3
es
Environmental impact 6
Benefits from the forest 5
y rights
P t t il d t 6
Forest ecosystem health and vitality 5
p p y
linkag
Monitoring and assessment 8
Management plan 7
Environmental impact 6
Contribution to carbon cycles 7
Protect soil and water resources 6
Key
Plantations 10
Maintenance of high conservation value forests
9
Social and economic benefits 9
Natural, cultural, social, religious &
spiritual values 8
Approach to certifying forest management pp y g g
Both FSC and AFS use a three-tiered approach to assessing forest management
FSC AFS
management
Tier 1 Principle Criterion
Tier 2 Management criteria Management requirements Tier 3 Norms or Points of Assessment Basis of assessment
B h h AFS AFS
Both approaches are performance-based
10
FSC
9
10 10
FSC
9
9
AFS
9
9 9
AFS
9
10 Principles 56 specific
criteria
193 specific requirements 10
Principles 56 specific
criteria
193 specific requirements 10
Principles 56 specific
criteria
193 specific requirements
9 Criteria 40 forest mgt requirements
166 i t f t
9 Criteria 40 forest mgt requirements
166 i t f t
9 Criteria 40 forest mgt requirements
166 i t f t
193 specific requirements (Woodmark –norms) 193 specific requirements
(Woodmark –norms) 193 specific requirements
(Woodmark –norms)
166 points of assessment 166 points of assessment 166 points of assessment
Certification – what it tells us … and what it doesn’t ! Certification can tell us
Forest products are legally sourced
F t t i t t d d i
Forest management is structured and encompasses economic, environmental and social values and outcomes
Products can be tracked back to certified forests
What it doesn’t tell us What it doesn t tell us
Wood quality, characteristics and fitness for purpose
Environmental and social credentials of supply chain after the forest
Area certified ≠ certified forest products p
Growth in forest area certified in Australia since 2003 has been significant
significant
However, this has not yet been reflected in the quantities of , y q certified forest products reaching Australia’s end consumers
T j f t
Two major factors:
Market focus – many certified growers export their products and most y g p p imported products are not certified
Chain of custody – few fully certified supply chains y y pp y
Certification – current state of market
Current area of certified forest in Australia is 8.96 million ha
Chain of custody:
C ifi Total
- AFS: 14
- AFS and FSC: 5
Certificates Total
8.96
- FSC: 91 COC
8 FM/COC
DUAL AFSFSC
AFS d DUAL
0.24 FSC
FSC 0.53 AFS
AFS 8.67
2008 2003
0
and FSC
Chain of custody – elements of the system y y
There are 5 parts to chain of custody requirements
Material sourcing
Certified, non-certified,
Production controls
Quantities, conversions,
Labelling
On-product, off-
, ,
re-cycled
, ,
segregation/batches, “%-in, %-out”, record-keeping
p ,
product, claims
Documentation
Invoices, shipping and sales
Quality system
Policies, procedures, staff, training, records, health & safety, continuous improvement
Material sourcingg
Approved sources
All wood entering the chain of custody must be from approved sources
Purchase specifications for certified material
Purchase specifications are set to enable supplied certified material to be cross referenced to a valid certificate.
Due diligence for non-certified material
For non-certified raw materials, the company needs to undertake sufficient due diligence (described in documented procedures) to demonstrate that due diligence (described in documented procedures) to demonstrate that materials come from approved sources.
Receipt and storage of material Receipt and storage of material
Quantities of materials are verified and recorded, and certified material is
stored separately to non-certified material.
Material sourcing – allowable sources
FSC Type of material AFCS
g
FSC P
Non-certified but
Certified Category 1 - AFS certified wood or AFCS certified material FSC-Pure
FSC-Mixed
Other reclaimed
Post-consumer reclaimed Category 2 - includes post-consumer wood and recycled fibres and re-claimed pre-consumer by-products
OK in "mixed"
production control systems Other reclaimed
Controlled wood
Category 4 - Other wood material and re claimed pre consumer by products
Category 3 - urban forestry and non-wood waste material
Illegal operations or sources Illegally harvested wood
Wood harvested from areas where traditional or civil rights are violated
Wood that is specifically
prohibited Wood harvested from non-FSC forests where
HCVs are threatened by forest management activities
Wood harvested from genetically modified
Wood harvested from forests being converted to plantations or non-forest use
Wood harvested from genetically modified (GM) trees or wood
Material sourcing under the FSC system
Non-certified
g y
forests
FSC-STD-40-005 V2-0 EN
Company
Chain of custody certified company Controlled
wood
Company undertakes
controlled wood due diligence on
sources Forest certified to FSC
Controlled Wood Standard
FSC-STD-40-004 V1-0 EN
FSC-Pure, FSC-Mixed, FSC- Recycled, FSC-Controlled
Chain of FSC-STD-30-010 V2-0 EN Certified “FSC
Controlled Wood”
y ,
Wood
custody certified company FSC-certified
forest Certified
“FSC- Pure”
wood
Other recycled sources
Recycled wood
FSC-STD-40-004 V2-0 EN FSC-STD-01-001
wood
FSC-Pure, FSC-Mixed, FSC- Recycled, FSC-Controlled wood
Production control
Systems and accounting procedures to keep track of material fl th h th d ti
flows through the production process.
The essential components of this are: p
Keeping account of the quantities of each of the different types of material inputs (certified and non-certified) for each production line. p ( ) p
Keeping account of the relative changes in these respective inputs as they progress through the manufacturing or value-adding process (e.g.
conversion factors changes in moisture content ) conversion factors , changes in moisture content ).
Accounting for sales of products (certified and non-certified) – that is,
removals from stock inventories.
Production control – material flow
Does the production process use non- certified inputs as well as certified inputs?
Can certified and non-certified material be physically separated in the prod ction certified inputs as well as certified inputs?
Yes No
separated in the production process?
Yes No
Segregated systems
(Wood inputs to particular
Mixed systems
(Wood inputs a (Wood inputs to particular
production line/batch 100%
certified)
(Wood inputs a mixture of certified and
uncertified material)
FSC transfer system
Physical separation and/or marking of
raw material
Threshold system
(being phased out)
FSC credit system Inventory control and
raw material flow
Percentage Input/Output
Rolling average %
FSC AFCS AFCS percentageAverage Volume credit FSC
Documentation
Sales invoices to include:
Date
Date
Name and address of buyer
Description of certified products sold
Type of certified products (FSC – Pure, Mixed, certified %) (AFCS – category of input Type of certified products (FSC Pure, Mixed, certified %) (AFCS category of input material’s origin, % certified raw material)
Quantity of certified products sold
Cross-reference to shipping documents (if invoiced separately)
Chain of custody certificate number Shipping documentation:
If d t hi d t l t i i hi i d t t i t f
If products shipped separately to invoice, shipping documents contain same set of details required of invoices
Sales records
Records of quantities of certified products sold are kept
Sales records specifically include the names of buyers
Labellingg
Labelling rules cover aspects such as:
Entities that can use logos and marketing claims
On-product labelling and claims
Off-product labelling and claims Off product labelling and claims
Logo design specifications
Process for licensing of logo use
For FSC certified material, labelling rules are described in the chain of custody standard itself and in:
FSC STD 40 201 FSC on product labelling requirements
FSC-STD-40-201 FSC on-product labelling requirements
For AFCS certified material, labelling rules for the use of the AFCS logo and the PEFC logo are described in separate documents: g p
AFS Limited’s Logo Use Rules Manual – Issue 4 (2006)
AFS Limited's PEFC Logo Use Rules Manual – Issue 4 (2006)
FSC labels – making sense of it all g
FSC-Pure
FSC-Mixed
FSC-Recycled
Examples sourced from Examples sourced from
FSC-STD-40-201 (version 2.0) FSC on-product labeling requirements
AFCS labels – making sense of it all g
100% certified wood content
Claims:
From sustainably managed forests
< 100% certified wood content
Promoting sustainable forest management
L b l h th f A t li F t St d d Ltd h i Labels shown are those of Australian Forestry Standard Ltd, showing appropriate licence numbers. Used with permission of AFS Ltd.
