How to Conduct Solid Wood Due
Diligence in Timber Value-Chains
Introductions
2
Sarah Hickman
Deputy Director,
NEPCon Solutions
Oscar de Frías Marin
CSR Manager-APAC,
El Corte Inglés Kathy Roussel
Policy and
Government
Affairs Manager,
amfori
Eric Gravier
Environment & Chemical
Programmes Lead,
amfori
Florence Sarrazin
Environmental
Policy Advisor,
amfori
Agenda
3
10:00 – 10:05: Introduction
10:05 – 10:15: EU Regulatory landscape (Florence Sarrazin, amfori
advocacy)
10:15 – 10:35: NEPCon (Sarah Hickman, NEPCon Solutions)
10:35 – 10:45: amfori Timber Due Diligence Tool (Eric Gravier, amfori BEPI)
10:45 – 10:50: Member best practice (Oscar de Frías Marin, El Corte Inglés)
10:50 – 11:00: Q&A
EUTR – Now and after
Florence Sarrazin,
Environmental Policy Advisor,
amfori
Timber Due Diligence policies
5
Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan
Timber Due Diligence policies
6
EU Timber Regulation (EUTR)
Objective: Reduce illegal logging by ensuring that no
illegal timber or timber products can be sold in the EU
• First Review of EUTR in 2016
identified that the current product
scope is not optimal
• the impact assessment study in
2018 studied scenarios on
revising the EUTR product scope
• The European Commission is
now conducting a Fitness Check
of the Forest Law Enforcement,
Governance and Trade (FLEGT)
and the EU Timber Regulations Impact Assessment Study of the EUTR (2018)
A turning point with the European Green Deal
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Communication of the European Commission on Stepping up EU Action to Protect and Restore the World's Forests (July 2019)
The European Commission will:
- assess additional regulatory and non-regulatory measures for a common understanding of deforestation-free supply chains
- consider improving company reporting on the impacts that company activities have on deforestation and forest degradation
The European Green Deal (December 2019)
“The Commission will take measures, both regulatory and otherwise, to promote imported products and value chains that do not involve deforestation and forest degradation.”
+ Climate law enshrines into law carbon neutrality by 2050
+ Biodiversity Strategy
+ Farm to fork strategy
What to expect next?
8
The Commission is conducting a Fitness Check of
the Forest Law Enforcement, Governance and
Trade (FLEGT) and the EU Timber Regulations
The European Green Deal Roadmap
plans on measures to support
deforestation-free value chains
EU Justice Commissioner announces a
Legislative initiative on mandatory human
rights and environmental due diligence
The Commission will:
- assess additional regulatory and non-regulatory measures for a common understanding of deforestation-free supply chains
- consider improving company reporting on the impacts that company activities have on deforestation and forest degradation
The European Parliament report suggests a due diligence regulation to halt deforestation:
- for the main commodities driving deforestation (palm oil, meat, soy, cocoa, maize, timber, rubber)
- beyond legality, looking at sustainability
- Suggesting 4 types of obligations:
- duty of due diligence
- duty of consultation
- duty of transparency
- duty of documentation
Mandatory
Due
Diligence for
deforestation
-free supply
chains ?
COM(2019) 640 final Annex
29/04/2020 in a European
Parliament’s Responsible Business
Conduct Working Group webinar
COM(2019) 352 final
2020/2006(INL)
Ref. Ares(2020)616191
Sarah Hickman
Deputy Director,
NEPCon Solutions
Timber Due Diligence (TDD) Building Blocks and Solutions
9
Placing on the market of illegally timber or timber products shall be harvested prohibited1
2
3 Maintain and regularly evaluate the due diligence system
Exercise due diligence through system and procedures
Defining obligations: For operators
Source: EU Timber Regulation. Article 4
…‘Operators are required to exercise due diligence. To that end they shall use a framework of procedures and measures, referred to as a ‘due diligence system’.
“A ‘due diligence system’ can be described as a documented, tested, step-by-step method, including controls, aimed at producing a consistent desired outcome in a business process”
Source: Commission Notice of 12.02.16, Guidance Document for the EU Timber Regulation
What is due diligence?
Obtain information about the supply chain
Access to Information1
Evaluate the risks of illegal harvested material entering the supply chain
Risk Assessment2
Mitigate any identified riskRiskMitigation3
What is due diligence?
Supply chain information
is key!
Operators are required to keep thisinformation for at least five years andprovide it to competent authorities onrequest
1. Access to Information
Supply chain information
requirements
• Product type
• Quantity
• Supplier (tier 1)
• Species
• Origin; Country, and if applicable,
region or concession
• Documents or other
information indicating legal
compliance
Information to a level of detail that allow you to:
• conclude that input materials originate from forest sources or supply chains with low risk of legal violations or that potential risks have already been mitigated; OR
• effectively identify, specify and mitigate risks of producing or receiving illegally harvested, traded or transported material
1. Access to Information
• The details of supply chain
information required will
change with the level of risk
• More risk = more information
needed
Documentation can assist in further risk assessment, it is
NOT a self-standing requirement nor is it always sufficient.
1. Access to Information
• First step is to map the supply chain.
Supply Chain Mapping
Documents evidencing the physical & financial flow of material to
support declaration and facilitate risk assessment
1. Access to Information
“ legally harvested means harvested in
accordance with the
applicable legislation
in the
country of harvest ”
Ref: Regulation (EU) No 995/2010
The EU definition; What is legal?
2. Risk Assessment
EU definition
Applicable legislation covering…
Legal rights to harvest
Payment for harvest rights
Timber harvesting
Third parties’ rights
Trade & customs
What is legal?
• Risk assessments must happen at least annually
• Evaluate risks that forest products are:
• Illegally harvested,
• Illegally transported/traded, or
• Mixed with material with illegal or unknown origin.
• Specify risks to a level that enables effective risk mitigation.
Objectives of the risk assessment
Risk mitigation
Avoid risk
Replace supply chain
Use certified material
Use noncertified low risk material
Replace supplier
Control risk
Change procedures
Collect additional
information
Collect additional documents
Conduct timber testing
Consult stakeholders
Supplier Training
Conduct supplier
audit
Can the risk be avoided?
Risk Mitigation process can take different paths: avoidance vs controlling the risk
www.nepcon.org/sourcinghub
Download
NEPCon’s due
diligence toolkit
for free
Country pages
includes
relevant risk data
and free
downloadable tools
Projects
In partnership with the Forest Stewardship Council With funding from
Presentation of amfori TDD tool
Eric Gravier
Environment & Chemical Programmes Lead,
amfori
BEPI Timber Due Diligence
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5 key deliverables
Services designed with
well-known experts:
- NEPCon
- amfori environmental
experts
How to assess your Timber Due Diligence “maturity”
To assess your “EUTR maturity” and your needs, you may complete the 5-minute survey developed by NEPCon and its partners, including amfori,.
24 | Title of Presentation
Language Links
English http://sgiz.mobi/s3/Survey-about-legal-timber-in-the-EU
Dutch http://sgiz.mobi/s3/Enqu-te-Inkopers-van-hout-en-papierproducten-in-de-EU-NL
French http://sgiz.mobi/s3/Enqu-te-entreprises-europ-ennes-achetant-des-produits-base-de-bois-et-de-papier-FR
German http://sgiz.mobi/s3/Umfrage-f-r-Unternehmen-ber-den-EU-Import-von-Holz-und-Papierprodukten
Italianhttp://sgiz.mobi/s3/Indagine-rivolta-alle-aziende-dell-Unione-europea-che-importano-legno-o-prodotti-
derivati-compresi-quelli-del-settore-cartario-IT
Spanish http://sgiz.mobi/s3/Encuesta-Empresas-de-la-UE-que-se-abastecen-de-productos-de-madera-y-papel-ES
EU Timber Regulation (EUTR)LIFE Legal Wood
Top level product information – filled in
by participant
Product components – filled in by tier I based on
information collected from the value-chain
Supply chain information (Nodes) – per component
- filled in by tier I based on information collected from
the value-chain
Timber Due Diligence: Data Collection
The information is collected at different levels, as seen in the diagram below:
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Detailed reporting & risk mitigation
Losing the forest for the
trees
Supply chains are
complex and the amount
of data and documentation
that needs to be collected
can be confusing and
overwhelming
Supported Risk
Assessment
The amfori BEPI platform
makes it easy to organize all
the information that has
been collected and shows
key indicators that should be
taken into consideration
when conducting a risk
assessment
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On-line – Timber questionnaires
▪ On-line: BEPI 13156
▪ Participant Guide – Annex I
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DEMO
Product information
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DEMO
Notification sent to the tier I
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DEMO
Mapping of a Supply Chain
List of questions and
data to be provided
change accordingly to
the type of node
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DEMO
Risk assessment report
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DEMO
Risk assessment report
– Extended View
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DEMO
Member’s good practice and sharing
Oscar de Frías Marin
CSR Manager-APAC,
El Corte Inglés
EUTR, TDD, and BEPI
Capacity building experiences with staff and suppliers amfori BEPI webinar June 25th 2020
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KEY POINTS
1. Preparedness of company and need for a partner for TDD for EUTR
2. Selection of partner with proved expertise in EUTR: NEPCon
3. Internal training to let staff know about EUTR and TDD
4. Pilots with amfori BEPI and TDD program with selected suppliers
5. Supplier’s training so they are aware of the need and importance to set up their own TDD system
6. Flexibility of online trainings to reach all suppliers
7. Provide guides with clear and precise information about EUTR and how to set up a TDD
8. Continue with pilots after training reaching all the suppliers
9. Update knowledge by webinars/seminars/academy by amfori