Procurement of African Timber Supporting Sustainable Forest Management and Development

1
Procurement of African TimberSupporting
Sustainable Forest Management and Development
2
Procurement PolicyDanzer Group Procurement Rules

• We commit to gradually, credibly and
  independently demonstrate that the forests in our
  control and those from where we are also sourcing
  timber are managed legally and responsibly.
• By gradually we mean to implement a process
  adapted to the situation of those of our
  suppliers willing to commit to our goals.
• By credibly we mean to implement a holistic,
  transparent, and documented process that takes
  the life cycle of our products into consideration
  and is based on internationally recognized
  standards especially in regard to sustainable
  forestry.
• By independently we confirm that the process and
  its outcomes will be audited and certified by
  qualified third parties.

3
Policy Scope
Procurement of African Timber-Supporting 1)
Legal 2) Sustainable management

• Sustainable Forest Management of Forest
  attributed to Danzer Group companies IFO (Rep.
  Of Congo) SIFORCO(DRC)

4
Objectives Targets The Danzer ladder

• Legality as a threshold with a Progressive
  Approach towards Sustainable Forest
• Management consistent with the ISO 140012004
  Standard
• Legal compliance
• Continual Improvement

Level of performance (time frame)
1. Sustainable Forest Management (SFM)
(Certification)
Superior (long term, 10 y.)
2. Progressing towards SFM
3a. Full legal compliance ( no conflict with
local population or government), 2nd or 3rd party
verified
3b. Known origin up to source forest (concession,
logging permit) and proof of the legal right to
harvest timber (Controlled by the Danzer Group
verification programme)
Acceptable (short term)
4. Inacceptable timber illegal origin
5
Objectives Targets (continued)Legality as a
threshold with a Progress towards SFM

• Stepwise approach with following Timber
  Categories
• Timber originating from a forest with a
  sustainable forest management, approved by an
  independent third party certification, Is
• Timber that has been certified under an
  internationally recognized system according to
  ATO / ITTO criteria or criteria reaching the same
  level at the minimum (FSC, PEFC,...)
• Timber that comes from a forest with a well
  implemented Environmental Management System,
  which social and environmental objectives reach
  as a minimum the level of ATO/ITTO criteria and
  has been third-party verified (e.g. ISO 14001)
• Timber with a proof of legal origin and
  demonstrated progress toward sustainable forest
  management
• must be verified by a recognized initiative
  (FORCOMS, WWF producer group, TFT initiative,
  FSC-MAP approach) or by a 2nd party audit from
  Danzer

6
Objectives Targets (continued)Legality as a
threshold with a Progress towards SFM

• Timber with a proof of legal origin is controlled
  by
• Ideally, a Chain-of-Custody and legality
  certification for full legal compliance
• or a well documented traceability, controlled by
  the 3rd party audited verification programme of
  the Danzer Group, based on 2nd party audits
  according to the risk of suppliers, with the
  proof of the legal right to harvest timber.
• Legality treshhold

7
Objectives Targets (continued)Legality as a
threshold with a Progress towards SFM

• Illegal and unwanted timber is timber with a
  clear suspicion or proof that it comes from
• Conflict areas
• Areas where timber harvesting is associated with
  human rights violations, underwriting armed
  conflicts or the breaking of UN trade sanctions
• Suppliers that have a suspicious background and
  are associated with armed conflicts and illegal
  logging
• Areas where local communities and worker rights
  are violated or where government and concession
  managers are in open conflict
• Protected areas / national parks
• Harvest in breach of forest law (within or
  outside a forest harvesting permit)
• The conversion of forest to a non-forest land-use
  type without the conversion having a clear long
  term social and economical benefit

8
Objectives and Targets Programme and Progress
(Attachment)

• IFO (Republic of Congo)
• SIFORCO (DRC Democratic Republic of Congo)
• Third party (Central and West Africa, Asia, Latin
  America)

9
Regulatory Issues IIFO Legality Audit by SGS
(Sept. 05)

• According to SGS Principles, Criteria and
  Indicators
• For the first time in Central Africa, SGS used an
  extent set of Principles, Criteria and Indicators
  as part of their Timber Legality and
  Traceability Verification (TLTV).
• It confirms legal compliance in all its aspects,
  i.e. respect of worker rights, respect of the
  rights of local populations, compliance with
  legislation regarding forest exploitation, wood
  processing and commercialization activities,
  payment of all forest taxes and royalties, the
  maintenance of a register and the Chain of
  Custody system maintained by the company.
• Due to unavailability of the auditor, the Chain
  of Custody audit has been conducted from Forest
  to sawmill and to expedition from IFO, but has to
  be completed to include the expedition from IFO
  products to the customers.

10
Regulatory Issues IIIFO Legality Audit by SGS
(Sept. 05)

• Following domains have been evaluated
• The Concessionaire is habilitated to exercise an
  economic activity
• Right of workers and local communities
• The company is habilitated to exercise a forest
  activity
• Reglementation regarding forest taxes and
  declarations
• Reglementation concerning forest exploitation
• Reglementation regarding de commercialization and
  transformation of wood
• Records maintained by the company

11
SIFORCO (DRC)Legality and Chain of custody
internal audit (July 05)

• Non compliances
• Chain of custody procedures to be improved
• Registers to be set up for legal documentation
  (personnel, taxes, forest laws and regulations)
• Safety measures and procedures to set up
• Third party procurementLegal documentation to
  be obtained, source of timber and suppliers to be
  proven

12
IFO Progress Progress towards Sustainable
Forest Management
13
IFO Progress Progress towards Sustainable
Forest Management
Forest Management Inventory
Socio-economic study
Wildlife inventory
Preparation of the forest management plan
14
IFO - Forest Management InventoryDistribution
of Tree species Diameter distribution

• Sapelli

Bosse clair
15
IFO Forest Management Inventory Wildlife
distribution
Elephant
Gorilla
16
IFO - Forest Management plan Long term planning
Analysis of sylvicultural, ecological, social
economical data
Definition of objectives targets

• Spatial planning of land-use to answer the
  objectives (production forest, agriculture,
  village zones, conservation areas, protected
  areas, research areas)
• Planning of the timber production in time and
  space

Define actions to reach silvicultural,
ecological, social economical objectives

• Examples
• Wildlife Zoning (non-hunting zones, village
  hunting zones,) Wildlife management with
  eco-guards
• Social Map protect sites important for pygmies
  and local communities Improve social
  infrastructures
• Ecological Define and protect conservation
  areas Research on Rare protected species
• Silvicultural Research on regeneration in Open
  woodland (Marantaceae Forest), Install permanent
  sample plots to monitor forest dynamics, Research
  on growth of major tree species

17
IFO Forest Management planObjectives of Timber
Production
Inventory data
Modeling of the evolution/growth of the forest
Choice of parameters for the management of forest
production
Assure a Sustainable Production (Sustained Yield)
Rotation time (30 years)
Minimum Expl. Diameters
Organise Production in Space and Time
Target species
18
IFO-ProgressReduce Impacts of Harvest on the
Environment
Improved logging and Safety
Precise prospecting skid trail planning
RIL - Reduced Impact Logging
Wildlife management with eco guards
Reduce impact of skidding
Reduce Road width
19
IFO-ProgressGap analysis for ISO 140012004
certificationfollowing the ITTO / ATO Criteria
(July 05)

• Non compliances according to ITTO / ATO criteria
• Environmental and Safety Management System (under
  ISO 140012004) to be implemented
• Interaction with local population and pygmies
• Communication platform to be set up
• Mapping of important sites for local communities
  and pygmies (effectuated for the concession)
  should be repeated in detail for the areas to be
  harvested in the next years
• Nutritional Awareness campaigns on AIDS and
  STDs
• Social infrastructure Ngombé hospital personnel
  and equipment are being improved (new Doctor
  arrived, material in command)
• Increase the provision of protein sources as an
  alternative to bush meat
• Management plan to be finished Ministry
  procedures delay the process. All technical
  studies have been approved (socio-economic,
  ecological, inventory report, dendrometric
  report).

20
Procurement Procedures How to distinguish?
21
Procurement ProceduresImmediate Objectives
Customers
Customers

• Reduce to a minimum the risk that illegal,
  unsustainable or otherwise undesirable timber
  enters our supply chain.
• Reach a proof of legal origin for all timber
  procurement

Danzer Group Sales Europe
Veneer

• Logs
• Lumber
• Veneer
• Others

• Logs
• Lumber
• Veneer
• Others

Veneer plants Danzer group
Logs
Procurement and Sales Danzer Group (Africa and
Europe)
Trader(s) - supplier
Logs Lumber Veneer/Others
Logs
Logs Lumber Veneer
Logs

• Logs
• Lumber
• Veneer/Others

Logs
Transformation by Danzer group
Transformation by Supplier
Transformation
Forest (concession) or logging permit from
Supplier
Forest (concession) or logging permit (not owned
by supplier)
Forest concessions from Danzer Group IFO -
SIFORCO
1.
2.
3.
22
Procurement proceduresSteps for Implementation

• Preliminary risk assessment based on spatial risk
  rating and killing factors
• Suppliers sign a Declaration of Legality
• Identify legal requirements for each country
• Risk assessment of suppliers and collection of
  detailed legal documentationof the origin of
  timber ? Questionnaire
• Targeted 2nd party (or 3rd party) audits/visits
  of suppliers based on the risk assessment
• External audit of procurement policy and
  procedures to verify consistency and effectiveness

23
Step 1 Preliminary risk assessment Killing
Factors

• Killing factors ? exclusion of timber with a
  clear suspicion or proof that it originates
• from illegal and unwanted sources (as mentioned
  before)
• from protected Species (CITES list annex I or
  protected by national legislation)
• from species on CITES list annexes II or III or
  partially protected by national legislation
  without appropriate legal documentation and
  permits.

24
Step 2Suppliers signa Declarationof Legality
25
Step 3 Identify Legal requirementsPrinciples
Criteria for legality legal framework

• SGS Principles Criteria of Legal compliance
• FORCOMS Verificators for legality
• Legislation database

26
Step 3 Identify Legal requirementsChain of
custody requirements in Cameroon
27
Step 4 Risk assessment of suppliersQuestionnaire
Identification of supply chains, progress
towards SFM and Collection of legal documentation
High risk timber
Procurement Danzer Group
1st Supplier
1st Supplier
1st Supplier producer (transformer)
1st Supplier
Traders / transformers known
Traders / transformers known
Transformation
Transformation
Traders / transformers x unknown  
Transformation
Transformation
Forest producer own concession/forest
Forest producer known source
Forest producer known source
Forests ?? (unknown sources)

• One intermediary, direct supply

• Two intermediaries, supplier buys from source

• More than 2 intermediaries

• More than 2 intermediaries, UNKNOWN SOURCE

28
Step 5 2nd party visits audits of high risk
suppliers verification of legal documentation
provided

• To be done beginning 2006

29
Step 6 External audit of procurement policy and
procedures to verify consistency and effectiveness

• To be done Mid 2006

30
Implementation Responsibility /
AccountabilityDecision and Communication Flow
Chart
TIMBER (PRODUCT) SUPPLY or SUPPLIER
Timber is i) CoC and legalityand/or ii) SFM
certified??
NO
YES
Declaration of legality signed by supplier?
YES
NO
Results of preliminary risk assessment based on
killing factors and spatial risk rating?
Positive
Negative
Extend risk assessment of suppliersand control
procedures implementedbased on the risk of
suppliers?
YES
Dont buyInform higher hierarchy and
environmental coordination
NO
BUY TIMBER
31
Thank you for your attention !!