FSC has published the first results of centralised risk assessments covering the top 20 countries for companies sourcing controlled wood (CW). The evaluations released for consultation include illegal harvesting and two other CW risk categories.
FSC’s Centralised National Risk Assessment (CNRA) is a major project that aims to provide a sound information basis for companies sourcing controlled wood. It addresses the five CW categories of unacceptable forest management in more than 50 timber-producing countries of the world.
The CNRA project underpins FSC’s ongoing revision of the Controlled Wood system.
“The CNRA is a massive undertaking that addresses key challenges in the FSC system”, states NEPCon Executive Director Peter Feilberg.
“Its results will support companies sourcing controlled wood, but the benefits go beyond the FSC trade. In the area of timber legality alone, it fills a huge information gap for many companies sourcing timber products".
For example, the EU Timber Regulation requires many EU importers to assess the risk that the applicable legislation in the country of origin is violated. To do this, companies need a good overview of the legal framework applying in each sourcing country and an understanding of the existing risks. This type of detailed, in-country information is provided by this project and is not readily available anywhere else.
The CNRA studies feature detailed information pertaining to the risks, an assessment of all key risk factors, and guidance on how to address specific types of risk.
Once finalised, all results will be freely available at the Global Forest Registry.
First results available
The centralised national assessments are being rolled out for over 50 countries in the course of three years.
Results from 20 countries are now ready for three CW categories: 1. Risk of illegal harvesting 2. Violation of traditional people’s rights and 5. Use of genetically modified organisms (GMO). The two remaining categories – forest conversion and destruction of high conservation values – are still being assessed.
A number of indicators are used to assess and specify risks in each category. The assessment assigns the risk level as either “low risk” or “specified risk” for each indicator that is applicable in the country. An indicator is non-applicable in countries where no legislation covers the point.
The term “specified risk” conveys FSC’s approach to any risk that a CW buyer needs to deal with: The CNRA reports describe and explain each “specified” risk, and they also present recommendations for how to control and verify those risks.
Forest legality: key risk aspects revealed
Using FSC’s CNRA methodology, NEPCon has been leading the evaluations of CW category 1 and 5 - illegal harvesting and the use of GMOs. “We have been able to draw on our own expertise within FSC certification, Controlled Wood and timber legality. In addition, we have secured solid input from local experts for all countries. Local expertise is a clear prerequisite for reliable results,” explains Mr Sloth.
An analysis of the draft results for illegal harvesting reveals some key areas of frequent risk. Topping the list is the risk of failure to meet legal requirements for due diligence or due care procedures. Specified risk was found in 85% of the countries where such regulations apply.
All these countries were located in Europe, and the risk was consistently related to non-compliance with the EU Timber Regulation (EUTR). The evaluation thus indicates that the EUTR is poorly enforced by many EU Member States.
Other frequent types of risk concerned added value tax and other sales taxes, health and safety during forest operations, management of protected areas and species and legal employment.
“Based on the CNRA results, buyers willl know which specific risks to look out for in each sourcing country”, says Mr Sloth. “However, the results are still preliminary. Inputs from stakeholders during the consultation stage may lead to revisions. Comments and contributions are much appreciated.”
The risk of non-compliance was mostly low with regard to laws on customs, concession licenses, offshore trading and transfer pricing. This applied to between 85% and 95% of countries with such regulations.
Only Canada, Japan, South Africa and the US were found to be low risk for all categories of applicable legislation.
At the other end of the spectrum, Russia came out with 17 specified risks followed by India (14) and Brazil (13).
NEPCon is working to transform some of the comprehensive analyses of timber legality risk into user-friendly country risk profiles.
Join the consultation
FSC is running a public stakeholder consultation on the CNRA results. Until 2 April 2015, you have the opportunity to provide comments.