Forest and Wood Products Australia Limited (FWPA) - Australian … · 2018. 8. 2. · Australia)...
Transcript of Forest and Wood Products Australia Limited (FWPA) - Australian … · 2018. 8. 2. · Australia)...
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Australian Industry Timber Due Diligence
Guidance and Tools
Stephen Mitchell Sustainability Programme Manager
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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
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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.
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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.
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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
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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
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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.”
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This Project
Stage 1: Investigation of current due-diligence measures for illegally logged wood
www.fwpa.com.au/Demonstrating_legal_wood_products_Industry_benchmarking
Stage 2: Development of due diligence guidance a nd tools
www.fwpa.com.au & www.timberduediligence.com.au
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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.
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10 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
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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
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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 www.timberduediligence.com.au
• 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)
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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
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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
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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 level
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AITDD-01 Importers due diligence system guide
• Core document
• Step by step guidance on DD
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1 2 3 4 Establish a due 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
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AITDD-01 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.
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AITDD-01 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
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Supplier Spreadsheet (AITDD-03) Questionnaire (Annex) where additional
info. needed
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AITDD-01 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
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AITDD-01 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.
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Annex 4: Risk assessment flowcharts
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AITDD-01 Step 3. Risk identification and assessment
METHOD 4 - Assess against four factors – Prevalence of illegal logging in the
area in which the timber was harvested
– 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.
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Annex 4: Risk assessment flowcharts
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AITDD-01 Step 3. Risk identification and assessment
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AITDD-01 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)
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Annex 4: Risk assessment flowcharts
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AITDD-01 Step 3. Risk identification and assessment
Must also consider any other information that you ought reasonably know about.
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Annex 4: Risk assessment flowcharts Annex 6: Other information sources
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AITDD-01 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.
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AITDD-03 Supplier and product spreadsheet
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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 Question
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AITDD-01 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 authorisation
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AITDD-02 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)
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AITDD-03 Supplier and product spreadsheet
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AITDD-03 Supplier and product spreadsheet
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AITDD-03 Supplier and product spreadsheet
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AITDD-03 Supplier and product spreadsheet
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AITDD-03 Supplier and product spreadsheet
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AITDD-04 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!)
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AITDD-05 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.
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AITDD-05 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.
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AITDD-05 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.
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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
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IIS-02 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
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IIS-02 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.
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IIS-03 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.
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IIS-05 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.
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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
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Thank you
Questions
www.timberduediligence.com.au
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