PEFC Council webinar

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PEFC Council webinar Revision of the PEFC chain
of custody standard
The webinar will start on 31 July 2009 at 1600
pm (1hr presentations, 1 hr QA session)
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Revision of the PEFC chain of custody standard
Ben Gunneberg, PEFC Council Secretary
General Jaroslav Tymrak, PEFC Council Head of
Technical Unit
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Agenda

• Revision process (Ben Gunneberg)
• Main elements / changes / issues of the revision
  (Jaroslav Tymrak)

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Purpose of the revision

• The purpose of the initiative is to revise the
  PEFC chain of custody standard in order to
• accommodate the experience gained to date from
  the chain of custody certification,
• to respond to the current and future market
  circumstances, and customers expectations and
  needs,
• to continue ensuring truthful, credible and
  honest claims are made on the content of PEFC
  certified raw material.

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Revision governance (i)

• The following organisational arrangements were
  applied for the revision of the PEFC chain of
  custody standard
• The PEFC Chain of Custody was be used for the
  purposes of discussion, obtaining consensus
  amongst the concerned stakeholders. It is
  expected that Chain of Custody WG would provide
  recommendation to the PEFC BoD
• Chain of Custody revision task force a small
  task force (up to 5 people) ideally comprising
  representatives of PEFC NGBs, industry and
  certification bodies.
• PEFC Council secretariat managed and
  co-ordinated the revision process.

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Revision governance (ii)
2008 Collection and analysing the issues
relating to implementation of the current
standard (where are the problems?) 2009 Finding
solutions (how to solve the problems?) and
rewrite the standard
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Revision timetable
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Scope

• forest based products only,
• for PEFC claims or specific claims of PEFC
  endorsed schemes,
• the organisation defined as an entity which is
  making the claims and can define a supplier and
  customer (including internal one),
• labeling optional
• chain of custody only implemented for the
  purposes of third party certification

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Chain of Custody model
Management System
Chain of Custody Process
Suppliers claim
Claim to customer
Management System
Suppliers claim
Claim to customer
C-oC Process
C-o-C Process
Claim to customer
Suppliers claim
C-oC Process
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Chain of Custody Model
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Requirements for input / output information
Management System
Suppliers claim
Identification of the origin
Communic. on the origin
Claim to customer
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Requirements for input / output information

• Information for delivery of all material
• the customer of the delivery (new)
• supplier identification in order to be able to
  verify the suppliers status,
• products identification (new)
• date in order to properly use the input material
  in the calculation and to verify the suppliers
  status (valid at the time of the delivery),
• volume in order to use the input material in the
  calculation,

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Requirements for input / output information

• Information for delivery of certified material /
  products
• formal claim x PEFC certified (new)
• suppliers certification number (new) (a copy of
  the certificate will be required only once, not
  for every delivery)

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Usage of logos and labels
The new draft continues considering the product
labelling as an optional communication activity.
The new draft is however more explicit that
where the logo is used, the user shall follow
requirements of the logo owner and that those
requirements are integral part of the chain of
custody requirements
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Usage of the PEFC Logo
The PEFC Council revised its PEFC Logo usage
rules (2008)

• PEFC certified
• 70 of PEFC certified material,
• Post-consumer recycled material considered as
  neutral in the calculation

• PEFC certified and recycled
• gt 70 of PEFC certified PEFC recycled
  material,
• Post-consumer recycled material is calculated and
  communicated separately from PEFC certified

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Definition of the product group (previously
production batch)

• The term production batch has been replaced by
  two terms
• Product group (type of products for which the
  percentage is calculated)
• Claim period (defines time period for which the
  calculation applies)

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Usage of PEFC methods
Physical separation
Percentage methods

• Percentage calculation
• Simple percentage
• Rolling average

• Percentage distribution
• Average percentage
• Volume credit

The company can choose its own methods or
combination of methods (for individual production
batches).
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Calculation of the certification percentage

• Still two options for calculating the
  certification percentage (simple percentage and
  rolling percentage),
• Improved definition of the rolling percentage
  with 12 months material input period and 3
  months claim period.

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Transfer of the calculated percentage to the
outputs
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Volume credit method

• Volume credit account mandatory,
• Option for calculating credits directly from
  claimed input material based on input/output
  ratio,

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Management system requirements
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Top management responsibilities

• Responsibilities originally required from the top
  management are to be required generally from the
  organisation

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Documented procedures

• The new draft includes more detailed requirements
  for the organisations documented procedures
  (list of only new or more detailed elements)
• material flow and definition of product groups,
• procedures for C-o-C process (identification of
  the origin, physical separation, definition of
  product groups, calculation of percentage,
  calculation of volume credits, credit account
  management, product sales, product labelling)
• procedures for the due diligence system,
• procedures for internal audits,
• procedures for complaints resolution.

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Records keeping

• The new draft includes more detailed requirements
  for the organisations record keeping
• suppliers and their certificates,
• input material
• percentage calculation, transfer of percentage
  and volume credit account management,
• due diligence system,
• internal audits
• complaints.

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Human resources / personnel

• The revision is also discussing new set of
  requirements relating to the health, safety and
  labour issues.
• PEFC has received a proposal from BWI (Building
  and Wood Workers International, an international
  trade unions organisation) which was sent for
  public consultation.
• The proposal requires the organisation to
• ensure compliance with labour, health and safety
  legislation and fundamental ILO conventions
• have policy and procedures (i) for commitment on
  core ILO conventions compliance, (ii) for freedom
  of workers association, (iii) against forced
  labour, (iv) against child labour, (v) for equal
  opportunities, (vi) for wages ensuring adequate
  standard of living, (vii) for indigenous peoples
  rights, etc.
• Note The requirements would be incorporated in
  chapter 6.5.1.

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Complaints

• The new draft includes requirements for the
  organisations complaints resolution process
  (acknowledgement of the complaint, gathering and
  verification of information, communication of the
  decision, corrective and preventive measures),
• Complaints procedures is not a new requirement
  as it was already included in ISO Guide 65
  (requirements for the supplier)

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Subcontracting

• The new drafts defines requirements for
  sub-contracting which would be covered by the
  companys C-o-C certification.
• The sub-contracting will only cover activities
  where
• the subcontractors receives material/product from
  and send it back to the company (not involved in
  procurement of sale of products) and
• the subcontractor is not mixing the received
  material/products with other material.

The organisation
Supplier
Customer
Subcontractor
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Specification of the PEFC claims

• The definition of the PEFC claims should include
  (Appendix 1 to the standard)
• An explicit claim (e.g. PEFC certified x )
• Requirements for origin categories (certified,
  neutral and other material) (i) requirements for
  the supplied material (e.g. supplied as PEFC
  certified x ) and (ii) requirements for the
  supplier (e.g. a holder of C-o-C certificate).
• Limitations for the usage of C-o-C methods (if
  applicable).

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Recycled material - definitions
Pre-consumer material material diverted from the
waste stream during a manufacturing process.
Excluded is reutilization of materials such as
rework, regrind or scrap generated in a process
and capable of being reclaimed within the same
process that generated it (ISO 14 021) The
definition of pre-consumer material excludes
sawmilling by-products such as sawdust, chips,
bark, etc. Note capable of being reclaimed
within the same process that generated it means
that the material generated in one process is
continuously returned to the same process. As an
example can be residues generated by a press line
in a panel board production and continuously
entering the same pressline is not considered as
pre-consumer recycled material. Post-consumer
material Material generated by households or by
commercial, industrial and institutional
facilities in their role as end-users of the
product which can no longer be used for its
intended purpose. This includes returns of
material from the distribution chain (ISO
14 021). Note The commercial, industrial and
institutional facilities role as end-users
excludes material which is a result of the
organisations processing or manufacturing
activities, such as of-cuts. Example 1
Printers off-cuts are not post-consumer material
as the printer is not end-user of the product but
is involved in the product manufacturing. Example
2 Newspaper, magazines and books, which were
displayed at the store (distribution chain) but
have been returned because they were not sold t
the users, are post-consumer material.
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Recycled material - definitions
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Recycled material recognition within PEFC claims

• The Task Force agreed that
• both pre- and post-consumer recycled material
  would have the same recognition within the PEFC
  claims. Both definitions would create the
  definition of recycled material.
• From number of options the Task Force selected
  three for further discussion

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Recycled material recognition within PEFC claims
Option 1 PEFC certified claim would be the
only PEFC claim. Both recycled material and PEFC
certified primary fibres would be covered by a
single PEFC claim on PEFC certified material.
Neither the PEFC chain of custody nor the PEFC
labelling would be able to distinguish between
the recycled content and PEFC certified primary
fibres content. Alternative 1a Post-consumer and
pre-consumer material are classified as
certified material for PEFC certified
claim. Alternative 1b Post-consumer and
pre-consumer material are classified as neutral
material.
Option 2 two claims on PEFC certified and
PEFC recycled material which would have their
own definitions. The PEFC certified primary
fibres would enter as claimed material in the
claim on PEFC certified material and recycled
material would enter as claimed material in the
claim on PEFC recycled material. Alternative
2a Post-consumer and pre-consumer material are
classified as certified material for the PEFC
recycled claim
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Recycled material recognition within PEFC claims
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Avoidance of raw material from controversial
sources
The reality is that due to the complexity and
fragmentation of the supply chain it is not
feasible to have a full chain of custody for
the supply chain of un-certified raw material.
However PEFCs approach requires that every
company with a PEFC chain of custody certificate
must have control over its un-certified raw
materials and implement measures to eliminate the
risk of procuring controversial sources.
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Due diligence system avoidance of raw material
from controversial sources

• Scope
• - Shall be implemented for product groups
  covered by the chain of custody percentage based
  methods and their input material other than
  claimed material / products and recycled
  material,
• Can be implemented for other product groups and
  by organisations without chain of custody,
• On-product claims are not allowed.

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Due diligence system avoidance of raw material
from controversial sources

• Definition of controversial sources
• Forest management activities which are not
  complying with applicable local, national or
  international legislation relating to the
  following areas
• forestry operations and harvesting, including
  conversion of forest to other use,
• management of areas with high environmental and
  cultural values designed and covered by the
  legislation,
• protected and endangered species, including
  requirements of CITES,
• health and labour issues relating to forest
  workers,
• property, tenure and use right of indigenous
  people,
• payment of taxes and royalties
• and from areas utilising GMOs.

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PEFC approach to controversial sources
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Risk Analysis
This is a mechanism that determines whether a
companys supplies have a high risk of
originating from controversial sources. (If so
their control requires a higher level of
scrutiny, i.e. a second or third party
inspection).

• Risk likelihood of procuring illegal wood
  depends on
• Country of origin in some countries / regions
  likelihood is higher than in others
• Complexity and uncertainty of supply chain In
  more complex, unclear, unidentified supply chain
  the likelihood that illegal wood is procured is
  higher than in simple, clear and data supported
  supply chains

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Due diligence system avoidance of raw material
from controversial sources

• The following changes have been introduced
• An explicit threshold (5) have been made for
  transparency international PCI
• The sample of inspected supplies is calculated
  as square root of number of high risk supplies
  for each supplier delivering high risk supplies.

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Due diligence system avoidance of raw material
from controversial sources

• Other topics
• Should the definition go outside legality?
• Should the self-declarations be avoided where the
  material is procured directly from a forest owner
  of the same country which is classified as low
  risk?

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Multi-site chain of custody certification

• The PEFC Council recognises that
• companies (with branches) would like to implement
  and have certified a common chain of custody for
  all its operations,
• a significant part of the woodprocessing sector
  are small and medium sized enterprises (SMEs).
• The PEFC Council requirements for multi-site
  certification deal with
• Implementation of chain of custody requirements,
• The certification of multi-site organisation.

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Organisations with multiple production locations
(multisite/group)

• Definitions
• The organisation with multiple production
  locations covers
• multisite organisations such as organisations
  operating with franchises or companies with
  multiple branches and
• producers group of independent legal enterprises
  (producers group).

The same set of requirements however apply for
both scenarios.
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Multi-site chain of custody certification
Multisite certification allows a statement on the
conformity to be made for the whole multisite
organisation. This permits the use of a sampling
method for the auditing of individual sites.
Multisite organisation
Head office (group co-ordinator)
Site 1 (group member)
Site 2 (group member)
Site 3 (group member)
The use of sampling requires that the structure,
responsibilities and control mechanisms within
the multisite organisation are clearly defined
and implemented.
Site 4 (group member)
Site x (group member)
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Organisations with multiple production locations

• New elements
• size limitation for producer group,
• sites (group members) shall be located in one
  country,
• detailed requirements for the central office
  responsibilities (having commitments, contractual
  relationship with sites, information and guidance
  service, records keeping, documented procedures,
  internal audits, conformity review).

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Project C-o-C certification

• Originally PEFC UK initiative but developed and
  applied globally.
• Basic principles
• PEFC CoC standard can be used as standard for
  project C-o-C certification,
• A non-mandatory guideline interpreting the CoC
  standard requirements for the purposes of the
  project C-o-C has been added,
• Project is considered as product group (CoC
  terminology) for which the calculation is done
  and declarations made,
• The guideline also describes the role of a
  project co-ordinator and project members.

• Promoting Sustainable Forest Management
• for more info www.pefc.org

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Next steps

• The PEFC Council has published an enquiry draft
  for public consultation and has invited all
  stakeholders and businesses to comment on it. The
  deadline is 7 August 2009.

Thank you for your contribution in todays
presentation and your participation in the
public consultation