SHAPING THE FUTURE
Tom van Loon, Head of Sustainability
1 EUROPE IHC Headquarters, sales and trading (Switzerland)
IHC Warehouse and sales, Belgium
2 CENTRAL AFRICA IFO Production, Republic of Congo
LCC Logistics, Cameroon
GULF COUNTRIES IHC Sales, Bahrain
4
Interholco in the World
ASIA IHC Sales, China
3
5
Interholco in Africa
36%
14%
10%
9%
7%
5% 4%
2% 13%
SAPELLI
AZOBE
TALI
WENGE
IROKO
KOSIPO
SIPO
~ 65 mill
EUR
Turn-over
0.7 persons / km2
16’000 people living in the forest we manage
of Switzerland
1/4
1’159’000 ha
8’121’000 people living in
Switzerland
Area of forest we manage
200 persons / km2
Natural Capital Assessment The IHC pilot study for the Forest Products Sector Guide of the Natural Capital Protocol
Sustainable Forest Management in the Congo Basin has a minimal
impact on Natural Capital, protecting forests from irreversible
change to other land-use:
• Only 0.5 to 2 trees per ha are felled, once every 30 years,
• Only 6% to 10% of the annual harvest area receives impact.
• 92% to 97% of Carbon stock is maintained, with reconstitution
of the Carbon stock afterwards.
For the IHC concession in Congo, Sustainable forest management
provides annually about 50 million Euro economic value on 1 million ha,
17 times more economic value than conservation and, many co-
products along with timber.
Palm oil could provide up to 650 times more economic value than
conservation, but destroys the natural capital, i.e. the forest.
source : WCS
Elephant 4’000
Gorilla 70’000
source: WCS
Conservation Area 27% of total forest surface
300’000 ha Eco-guards
50
destroyed 72 poacher camps ritual and traditional uses
Protected sites 71
Environmental Landscape 1.159 mill. ha of natural capital
Medical consultations
12’398
at our hospital in 2016
Entry level wage
220% higher
compared to nat. min. wage in Rep. of Congo
Meetings
over 300
at local and Indigenous communities in 2016
provided for free to the village of Ngombé in 2016
Electricity
1’301 MWh Drinking water
96 mill l
Social Landscape over 16’000 local and indigenous peoples
100% Legal and certified
own wood production
FSC certified 7% 3rd party & 6% 2nd party legality verified
87%
budget spent in 2016
Local suppliers
23 mill € Taxes
4.4 mill €
paid to ROC government in 2016
incl. pension plan in 2016
Wages & benefits
Economic Landscape over 64 mill. € net sales (2016)
13 mill €
Regulatory Landscape
FSC®/ GRI / PEFC TM/ Global Compact
International Standards
ILO / Biodiversity, Climate Conventions / REDD+ / FLEGT
International Agreements
EU TR, Lacey Act: forest- social- environmental- tax legislation
(Inter-)National Laws
Global
Development
FSC® C022952 ; PEFCTM 15-31-0084
Tropical forestry produces so much more than timber We do more than wood!
Government Rep Congo Basin Countries
‘The future lies in more
advanced and diversified
wood processing. Waste
should be recovered.’
United Nations FAO
Private sector FSC®-certified forest operators
NGOs Local and International
‘A promise to preserve
vital forest resources so
that future generations can
continue to enjoy benefits.’
‘It is unrealistic to believe
that our companies can
continue harvesting only
primary species, just because
markets are used to them.’
‘Tropical forests are
already the second largest
source of employment in
Gabon.’
Key concerns and expectations
3
1
2
Implemented using
a Due Diligence System
and certified timber
Unacceptable: timber of illegal origin
Legal right to harvest forest sources; legal manufacturing, trade & export
Known source: known origin up to the forest (traceability)
3rd party Verified Controlled sources
(no illegal wood; no violation of civil, human and
workers’ rights; no wood from conversion or GMOs)
3rd party Verified Legality
Sustainable forest management
certification
e.g. FSC® or PEFCTM certified wood *
Our Responsible Procurement System
* FSC® C022952 ; PEFCTM 15-31-0084
ACCESS TO INFORMATION Origin, species, product type, supplier, legality documents
A
RISK EVALUATION With regard to origin (country/ region) and species
B
RISK MITIGATION Complementary documents and Field audits
CONFORM : PURCHASE NOT CONFORM:
NO PURCHASE
Is the wood and supply chain certified? Risk mitigation by certification
Risk evaluation: suppliers and products Information on the suppliers, documents on origin,
legality and chain of custody/ risk of mixing
C
YES
POSITIVE
POSITIVE
LOW / NEGLIGEABLE RISK
NEGATIVE
NEGATIVE
VERY HIGH RISK HIGH / NON NEGLIGIBLE RISK
NO
NOT ENOUGH INFORMATION
Annual external
audit of the
Due Diligence System (DDS)
Field audits are key in Africa / high risk areas !
2nd party legality verified
FSC® certified Legality & FSC® Certified
3rd party legality verified OLB, VLC, Controlled wood 6%
7%
100% 87%
Own wood products Procured wood
Different sources classify certain countries in the tropics and
elsewhere as high risk for illegality.
Nevertheless, working with these countries is crucial for
environmental protection and more:
Corruption Perception Index Transparency International
Timber Risk Assessment NEPCon Sourcing Hub
Global Forest Registry FSC risk assessments
Enhancing forest protection and more
1. Field audits, certification allow to mitigate risk, avoid illegality
2. Procurement of timber drives development and growth in remote areas, fostering governance improvement
3. SFM treats the forest as a ‘natural capital’ with environmental, social and economic benefits. It is the best land-use against deforestation and forest loss by agriculture and mining
NB: Illegal logging, except where clearing land, may have adverse impacts, but does not in and of itself destroy the forest
Legality definition in EU TR compliant standards e.g. FSC-STD-40-005 , NEPCon LegalSource; Control Union TLV…
EU TR Definition of Legality cf. art. 2 (h):
“Applicable legislation…., in the country of harvest covering... :
1. Legal rights
to harvest
1.1 Land tenure and management rights
1.2 Concession licenses
1.3 Management and harvesting planning
1.4 Harvesting permits
- rights to harvest timber within legally gazetted boundaries,
2. Taxes & fees
2.1 Payment of royalties and harvesting fees
2.2 Value added taxes and other sales taxes
2.3 Income and profit taxes
- payments for harvest rights and timber including duties
related to timber harvesting,
3. Timber harvesting activities
3.1 Timber harvesting regulations
3.2 Protected sites and species
3.3 Environmental requirements
3.4 Health and safety / 3.5 Legal employment
- timber harvesting, including environmental and forest
legislation including forest management and biodiversity
conservation, where directly related to timber harvesting,
4. 3rd parties’ rights
4.1 Customary rights ; 4.2 Free, prior and informed
consent ; 4.3 Indigenous Peoples’ rights
- third parties’ legal rights concerning use and tenure that are
affected by timber harvesting, and
5. Trade & transport
5.1 Classification of species, quantities, qualities
5.2 Trade and transport 5.3 Offshore trading &
transfer pricing 5.4 Customs regulations 5.5 CITES
- trade and customs, in so far as the forest sector is
concerned.»
EUTR: field verification is crucial 1. Link documents with the wood product (documents alone usually don’t show legality) 2. Verify legality aspects in brown
Example of a Supplier Risk Assessment
Since 2012, we regularly audit all non certified suppliers based
on our Due Diligence System
Field audits help detect non conformities, improving market availability & eliminating unfair competition:
• Forest & environmental legislation: impact of harvest in buffer-zones,
trees harvested under minimum diameter, surpassing volume
• OHS (Occ. Health & Safety): safety equipment not compliant,
no risk assessment, no OHS committee
• Workers’ rights: lack of certain contracts, lack of organized union
(no child labor incidences seen)
• Refuse to cooperate/receive field audits, for business or other reasons
Rare non conformities registered (wood non compliant) :
• No clear origin proof and likelihood of illegal origin, e.g. ‘Bois Sauvage’
from smallholders, community forests
• Logging outside or without a valid logging permit
• Forest management plan not finalized/ submitted within legal timeframe
• Wrong declaration of species, e.g. Pericopsis elata declared as Iroko
• Significant delay or non payment of taxes, without agreement
Supplier Evaluation in Central Africa
Total number of suppliers (2014-2017): 20 to 22
• Of which certified / 3rd party verified
14 to 16
• Of which internally verified/audited for legality
5 to 8
• New suppliers accepted per year
1 to 4
• Proportion of potential suppliers accepted
1 out of 3
Made in Africa wood is Fair & Precious
In 2018, SPOTT
assessed 50 timber
and, pulp & paper
companies across 10
categories
(+100 indicators):
‘The average score of
companies with FSC or
PEFC forest certification
is 45% compared to 11%
for companies with no
such certification.’
Contributing to sector transparency
Interholco leads the pack for the
2nd year in a row, with a score of 93.4%
Future-minded consumers buy sustainably!
More than wood, more than just the forest
Tropical forest management
develops timber products
loaded with
rural development &
environmental conservation
SHAPING THE FUTURE
ACTING TOGETHER
Thank you for your attention
INTERHOLCO AG
Schutzengelstrasse 36
6340 Baar, Switzerland
Email:
Office Phone: +41 (0)41 767 03 81
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