• No results found

Australian Industry Timber Due Diligence. Guidance and Tools. Stephen Mitchell Sustainability Programme Manager


Academic year: 2022

Share "Australian Industry Timber Due Diligence. Guidance and Tools. Stephen Mitchell Sustainability Programme Manager"


Loading.... (view fulltext now)

Full text


Australian Industry Timber Due Diligence

Guidance and Tools

Stephen Mitchell

Sustainability Programme Manager stephen.mitchell@tdansw.asn.au



Illegal Logging

• Undercuts legitimate trade

• Contributes to environmental and social degradation

• Organised crime responsible in some countries (Interpol 2012)

• Governments loose revenue (i.e. royalties)

• A significant concern in some developing countries

FWPA Webinar – 30/04/2014


International Context

• European Union – EUTR 2012

– From March 2013 importers and domestic supplier must undertake due diligence

• USA - Lacey Act amendments 2008

– Undertaking due care mitigates penalties

• Many bilateral agreements and projects to reduce illegal logging in some developing countries E.g.

Africa, SE Asia

• Many private company procurement policies.



Australian Legislation

Illegal Logging Prohibition Act 2012

• Implemented in two stages - Nov. 2012 / Nov. 2014

• Prohibition, penalties, inspection regime Illegal Logging Prohibition Regulation 2013

• Effective 30th November 2014

• Defines regulated timber products and exemptions

• Details due diligence requirements.

FWPA Webinar – 30/04/2014


Australian Legislation: ILP Act - from 30/11/14

• Prohibited to import illegally logged regulated timber products or

• Penalties

– Up to 5 years jail

– Fine ($85k for individual, $425k for company) – Forfeiture

• Level of proof for Commonwealth

– Illegally logged & importer negligent



Australian Legislation: Reg - from 30/11/14

• Importers of regulated timber products & domestic processors

of raw logs

• Must undertake due diligence

1. Gather information

2. Identify and assess risk

3. Mitigate (if risk other than low)

• Fines

– $51k for individual – $255k for company

FWPA Webinar – 30/04/2014


Australian Legislation: Definition of illegally logged

“harvested in contravention of laws in force in the place (whether or not in

Australia) where the

timber was harvested.”



This Project

Stage 1: Investigation of current due-diligence measures for illegally logged wood


Stage 2: Development of due diligence guidance a nd tools

www.fwpa.com.au & www.timberduediligence.com.au

FWPA Webinar – 30/04/2014


This Project: Stage 1

Part I - timber and timber products

– All 28 importers are undertaking some due diligence – Certification and large range of 3rd party legality

verification (merbau) and government documentation – Practices driven largely to protect their reputation as well

as market demands from key customers.

Part II – pulp, paper, wood furniture and other wood

– pulp and paper – COC to FSC and/or PEFC/AFS

– wood furniture – not much except single, stable suppliers and regular visits to them.



Source: Mitchell, S. (2012) Demonstrating legal wood products - Industry benchmarking Part I. Prepared for Forest & Wood Products Australia. Available at http://www.fwpa.com.au/Demonstrating_legal_wood_products_Industry_benchmarking

Based on interviews with twenty-eight regular Australian timber product importers/wholesalers

Stage 1: Timber and timber products: Drivers


Stage 2: Guidance and tools

• Australian Industry Timber Due Diligence (AITDD)

• Based on:

– Research into current practices

– Research into overseas due diligence systems – particularly European Timber Trade Federation

– ILP Act, Regulation, accompanying explanatory statements

& memo and Dept. of Agriculture information – Consultation with domestic and importer trade

• Freely available at www.timberduediligence.com.au



Timber Due Diligence: Options

• Develop and use your own system of procedures

• Extend existing system (e.g. FSC, PEFC or AFS CoC)

• AITDD tools and guidance


• Commonwealth Department of Agriculture tools and guidance www.daff.gov.au/illegallogging

• Other standards (e.g. EU NEPCon LegalSource system, US ANS Standard for Due Diligence in

Procuring / Sourcing Legal Timber – later in 2014)

FWPA Webinar – 30/04/2014


AITDD: Tools and Guidance

• Domestic processors of raw logs

– Australian sawmills, pulp and paper mills etc

• Importers into Australia of regulated timber products

– most timber, pulp, paper and wood furniture



AITDD: Domestic processors

1. Overview of legislation and obligations 2. Due Diligence Summary Template

Note: State specific guidelines (to be provided by State and

Commonwealth Governments) will be important for straight forward compliance for some domestic processors


AITDD: Importers

AITDD-01 Due diligence system guide Annexes 1 - 8

AITDD-02 Company due diligence system manual template

AITDD-03 Supplier and product due-diligence spreadsheet

AITDD-04 Supplier questionnaire template

AITDD-05 Evaluating legal conformance at forest





Importers due diligence system guide

• Core document

• Step by step guidance on DD

FWPA Webinar – 30/04/2014



Establish a due

2 3 4

diligence system

Gather information

Assess compliance or risk

Mitigate risk (if not low)

 Gather information about:

• products

• country of harvest

• species

• supply chain

 Collate any certification, legality verification (if available)

 Gather evidence of compliance (if needed)

 Commit to purchasing of legal harvested products

 Appoint a responsible person

 Establish written procedures

• responsibilities

• train staff

 Evaluate information

 Assess compliance against timber legality frameworks and/or country specific guidance (if info. available)

 Assess risk against 4 factors

 Identify specific risks (where not low)

 Identify risk mitigation measures

 Involve supply chain

 Implement mitigation measures: E.g.

• more information

• independent verification




Step 1. Set up system

– Are your timber products regulated timber products? (Info. sheet)

– Assign person with overall responsibility for DD

– Develop a legal timber procurement policy (doesn't have to be public) (Annex 1)

– Read communications guidance (Annex 2)

– Develop written procedures (AITDD-02):

• Assign specific responsibilities & train staff.

FWPA Webinar – 30/04/2014



Step 2. Gather information

As much info. as is “reasonably practicable”

– Type of product

– Common name, or scientific name

– Country, region and/or forest harvesting unit (FMU) of harvest

– Country of manufacture

– Name and address of supplier – Quantity/volume

– Any evidence of compliance with laws that relate to harvesting

Supplier Spreadsheet (AITDD-03) Questionnaire (Annex) where additional

info. needed




Step 2. Gather information

• Evidence around:

– Legal right to harvest

– Harvested within legally gazetted boundaries – Payment of harvesting royalties

– Any person with legal rights of use/tenure, their rights not affected by harvesting

FWPA Webinar – 30/04/2014



Step 3. Risk identification and assessment

METHOD 1 - Assess compliance with a scheduled timber legality framework (FSC or PEFC FM) METHOD 2 - Assess compliance

with relevant scheduled country specific guideline

METHOD 3 - FSC / PEFC Chain of Custody Certification and/or 3rd party verification

METHOD 4 - Assess risk against four factors.

Annex 4: Risk

assessment flowcharts




Step 3. Risk identification and assessment

METHOD 4 - Assess against four factors

– Prevalence of illegal logging in the area in which the timber was


– Prevalence of illegal logging of the species in the area in which the timber was harvested

– Any armed conflict in area of harvest

– Complexity of the product.

FWPA Webinar – 30/04/2014

Annex 4: Risk

assessment flowcharts



Step 3. Risk identification and assessment





Step 3. Risk identification and assessment

• Record risk conclusion

AITDD-03 Supplier and product spreadsheet

• If risk not low go to next Step (Risk Mitigation)

Annex 4: Risk

assessment flowcharts




Step 3. Risk identification and assessment

Must also consider any other information that you ought reasonably know about.

FWPA Webinar – 30/04/2014

Annex 4: Risk assessment flowcharts Annex 6: Other information sources



Step 4. Risk mitigation

• If risk anything “other than low”

• Mitigation measures adequate and proportionate to risk include:

– FHU audit - document based – FHU audit - onsite

– Requesting certified or verified material – Supplier replacement

– Product replacement

– Recommendation - use mitigation

measure that gives strongest assurance of legality

– Record mitigation and reassess risk.

AITDD-03 Supplier and product spreadsheet



AITDD-01 Other tools

• Importer due diligence overview and summary template (Annex 7)

– A template for importers to summarise their due diligence for particular suppliers and/or regulated timber product

• DRAFT Importer customs broker authorisation template (Annex 8)

– declaration for importers to authorise their customs broker to answer the required Customs Community Protection


FWPA Webinar – 30/04/2014



Due diligence system guide

Annexes 1 - 8

1. Explanation of terms

2. Company legal timber policy template 3. Communications guide

4. Risk assessment flowcharts 5. Template - letter for a supplier 6. Further information sources

7. Importer due diligence overview and summary template 8. DRAFT Template – Importer’s customs broker





Due diligence system manual template

• If used must be adapted for circumstances

• Includes suggested words and/or space for:

• Procedures and documents - location

• Legal sourcing policy / commitment

• Quality system and management (e.g. Assignment of

Responsibilities, Training and Competence Assurance, Due

Diligence Revision Process, Procedures for Maintaining Records Relating to Certification, Communication Compliance)

• Material Control

• Gathering Supply Chain Information

• Risk Assessment & Risk Mitigation

• FAQs template for customers (e.g. Merchants)

FWPA Webinar – 30/04/2014



Supplier and product spreadsheet




Supplier and product spreadsheet

FWPA Webinar – 30/04/2014



Supplier and product spreadsheet




Supplier and product spreadsheet

FWPA Webinar – 30/04/2014



Supplier and product spreadsheet




Supplier questionnaire template

• Brief cover letter and detailed attachment

• For sending to suppliers where important information is lacking

• Not for every supplier (e.g. low risk sources)

• Can also be used as basis for research by importer (where suppliers don't fill out questionnaires!)

FWPA Webinar – 30/04/2014



Evaluating legal conformance at forest level

• Where timber has been assessed as not a low risk at the forest harvesting unit (FHU) level and a FHU audit is chosen as a risk mitigating measure

• Includes table of scope of legislation under each and possible verifiers for legality

• Evaluation should only be done by someone with appropriate expertise and experience.




Evaluating legal conformance at forest level

Low risk if non-compliance are:

a) temporary lapses;

b) unusual/non–systematic; or

c) limited in temporal and spatial impact.

FWPA Webinar – 30/04/2014



Evaluating legal conformance at forest level

Not low risk if non-compliances:

a) continue over a long period of time

b) affect a wide area and/or causes significant damage

c) indicate the absence or break down of enforcement of the legal system

d) are not corrected or adequately responded when identified; or

e) have a significant negative impact on the production of forest products and other services, the forest ecosystem and directly or indirectly, any people.



Importer Information Sheets

IIS-01 Importers Overview

IIS-02 Regulated Timber Products IIS-03 Country of Harvest Risk

IIS-04 CITES, Australia and Timber Products IIS-05 PEFC Endorsed Standards

IIS-06 Indonesia TLAS/SVLK & FLEGT/V-legal

FWPA Webinar – 30/04/2014



Regulated Timber Products

• Based on Tariff codes

• Regulated:

– Sawn timber, mouldings, veneer, plywood, MDF, – Doors & window joinery

– Most pulp and paper products, wood furniture

• Exempt or not regulated:

– Recycled timber/pulp/paper – Wood packaging/pallets

– <$1000 customs value




Regulated Timber Products

• Includes worked examples of what is and what isn't an RTP

– E.g. Boxes of tissue boxes

• Lists of typical products under tariff codes

• Important - customs brokers / independent advice be consulted in tariff classification.

FWPA Webinar – 30/04/2014



Country of Harvest – Illegal Logging Indicators

• Includes key indicators of risk of illegal logging at a country level including:

– Transparency International's Corruption Perception Index (CPI) of major wood supply countries.

– NEPCon's FSC Global Forestry Register

– A list of the status of countries negotiating Voluntary

Partnership Agreements (VPAs) with the European Union (EU) as part of the EU's FLEGT (Forest Legality

Enforcement Governance and Trade) Program.




Indonesia TLAS / SVLK & FLEGT / V-legal

• Information on the status of the Indonesian timber legality

assurance system (TLAS or SVLK) for most timber product exports from Indonesia.

• Includes sample SVLK certificates

& V-legal licenses.

FWPA Webinar – 30/04/2014


Timber Due Diligence starter training

• Three pilot one day workshops in early June

• Melbourne, Sydney and Brisbane

• Includes case studies (much easier to understand!)

• To be run with The Forest Trust (TFT)

• Programme and registration

www.timberduediligence.com.au shortly



Thank you Questions


FWPA Webinar – 30/04/2014


Related documents

Penyepuhlindapan setempat dan penyejukan pantas untuk saput tipis yang dimendapkan pada suhu substrat 100 ºC telah dijalankan. Imej topografi AFM menunjukkan bahawa

Variances of education level, marital status, occupation, financing institution, charity per income are not proved statistically significantly give effect to the variance of

In this article we seek to investigate how the consumers’ attitudes and concerns over the environment and city pollution could influence their willingness to play a role as

a) Non-validated Suspect Case - this is closed to COVID-19. SNS 24 defines the usual and adequate procedures for the person's clinical situation and he/she informs the

Yet despite her press hiatus, Mistress Xena did sneak in a previous appearance in Bizarre a few years ago, for a fun shoot with the Japanese garage metal band Electric Eel Shock.

The days’ sales in receivables indicates an increase in the efficiency of collecting accounts receivable by decreasing from 13.5 to 11.9, also indicat- ing a favorable trend.

According to Baur and Lucey (2009), they defined flight-to-quality from stocks to bond as a significant decrease in the correlation in a (stock market) crisis period compared to

• Evaporates quickly and leaves no residue • Contains no Class I Ozone Depleting Chemicals • NSF K2 Registered for use in meat and poultry plants. Part Container