Chinese response to market demand for legal timber
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Chinese response to market demand for legal timber. Update on SmartWood Approach to Verification of Legality Illegal Logging Update and Stakeholder Consultation January 24-25, 2007. China’s surging timber consumption. Staggering economic growth, surging capacity, dramatic levels of consumption

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Chinese response to market demand for legal timber

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Chinese response to market demand for legal timber

Update on SmartWood Approach to Verification of Legality

Illegal Logging Update and Stakeholder Consultation January 24-25, 2007


China’s surging timber consumption

  • Staggering economic growth, surging capacity, dramatic levels of consumption

  • 2005, China world’s second largest importer of timber

  • Exports went from $2.7 to $17 billion from 1997 to 2005

  • 30% of global furniture manufacturing

  • Largest exporter of plywood

  • 1999 – a handful of FSC COC certificates

  • 2007 – close to 250 COC and increasing


New demands on Chinese factories

  • 80% of exports to NA, Japan, EU

  • Private sector sourcing initiatives, driven by large European companies

  • Placing external pressure to know more about sources

  • Seeking accurate information on supply chains that are long, complex, and non-transparent

  • Historically, a company’s relationship with contract manufacturers based on product, not sources

    • Time in factory dedicated to design, materials, pricing, production, logistics, etc.

    • Oversight in factory on quality control


Pressure from NA, EU, and Japan

  • NA, EU, and Japanese private sector are driving some initial interest in verifying the chain of custody and tracing timber to its source.

  • SW has reached agreements, or in discussion, for verification of legal origin and/or compliance with:

    • Major EU furniture retailer

    • Major EU home products retailer

    • EU timber trader

  • These companies voluntarily seek validation and view 3rd party auditing as critical


SW Verification Program

  • Developing an auditing program for legality verification

  • Voluntary in nature

  • Borrowed on experience in FSC COC auditing

  • Verifies company’s timber tracking from all forest sources and all points within a defined scope

  • COC is required for any entity and audited:

    • at the forest

    • contractors

    • sawmills

    • Manufacturers


SW Verification Program

  • Research on existing legality definitions, standards, approaches

  • Framework of principles, criteria, and indicators for legality

  • Two generic standards (in draft, for consult)

  • Will incorporate national ‘legality definitions or standards’ (as developed)

  • Will be adapted for each country (China, Malaysia)


Legal Right to Harvest

  • Authorization to harvest in the forest management unit has been granted from the resource owner(s)

  • Planning approvals are in place

  • There is a valid permit, license or similar instrument

  • Such rights are issued pursuant to the laws and regulations governing the jurisdiction of the operation(s)


Legally Harvested

  • Raw material harvested from a source with a legal right to harvest.

  • In compliance with ALL national and sub-national laws governing the management and harvesting of forest resources.


Harvesting Regulations

Planning Approvals

Environmental Regulations

Legal Right to Harvest

Social & Labor Regulations

Control of Unauthorized Activities

Trade Regulations

Fees & Taxes

COC

VLO


Harvesting Regulations

Planning Approvals

Environmental Regulations

Legal Right to Harvest

Social & Labor Regulations

Control of Unauthorized Activities

Trade Regulations

Fees & Taxes

COC

V L C


TODAY

and

LEGAL

+

SUSTAINABLE

FSC

VLC

TOMORROW?

NEXT WEEK?

NEXT YEAR?

TODAY?


UNK.

Timber Production

POTENTIAL L & S

FSC

L--Complexity of compliance--H

CW

VLC

VLO

S------------------- Time required to comply ---------------------------L


SmartStep

UNK.

Timber Production

POTENTIAL L & S

FSC

L--Complexity of compliance--H

CW

VLC

VLO

S------------------- Time required to comply ---------------------------L


SW Verification claims

  • VLO/VLC verified companies may communicate the message

  • Evidence of status demonstrated by “Verification Statement” issued by Rainforest Alliance.

  • Can use the Rainforest Alliance and SmartWood names and logos onlyoff-product.

  • Can not label a product.

  • Can put a verification code number (e.g. SW-VLO-####) on invoices and on products.

  • SW requires review and approval of all VLO related advertising, brochures, catalogues, or other promotional materials.


Stepwise approach to certification

  • VLO is the minimum acceptable starting point for timber tracking

  • VLO will be linked closely to other SW programs promoting responsible forestry

  • After VLO, progress is expected towards:

    • VLC - Full legal compliance

    • CW – Controlled Wood certification

    • SmartStep / Phased program

    • FSC certification

  • “A milestone, not a destination”

  • Want feedback and input on standards


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