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Risk of Russian timber entering certified supply chains
Assurance Services International (ASI), FSC's assurance partner has identified a set of prioritized actions to address the risk of Russian wood entering certified supply chains through the Eurasia region. Countries in this region include China, Kazakhstan, and Turkey among others, which informs the choice of locations for ASI’s onsite oversight activities. In accordance with the workplan, ASI will conduct onsite compliance assessments of certification bodies and audits of certificate holders, especially in high-risk supply chains. ASI will also implement other actions around the verification of the quality of certification activities of certification bodies and the performance of certificate holders.
In April 2024, in association with ASI, FSC launched a transaction verification (TV) loop on certified supply chains of birch wood panels. This TV loop is a part of the integrity workplan, with the objective of identifying if and how uncertified birch may be entering FSC supply chains through 18 countries in the Eurasian region. This TV loop will run alongside another TV loop that ASI launched in 2023 on FSC-certified birch plywood.
While the implementation of TV loops takes time, in case FSC finds clear evidence of violation of FSC requirements, necessary actions might be taken prior to the completion of the TV loop.
Another important integrity protection tool that FSC uses is the Policy for Association (PfA). The PfA defines six destructive activities that are unacceptable to FSC, including illegal trade of timber and forest products. Certificate holders need to conform with the PfA in their certified and non-certified parts of their operations; and the entire corporate group it belongs to needs to be in conformity. In case a certificate holder is found to be trading/processing Russian timber in countries where timber imports from Russia have been prohibited, FSC will look into it as a potential case of PfA violation connected to the use of illegal wood. Such cases can result in FSC disassociating from the entire corporate group of the certificate holder.
Furthermore, Russian wood is not only a threat to legality depending on national legislation, but it may also contribute to forest destruction in high conservation value (HCV) areas. FSC has been made aware of cases where former FSC-certified companies in Russia harvested wood from HCV areas for wood exports. The environmental and social impact of trade in such products can represent considerable reputational risks for importing companies.
To mitigate the risk of Russian wood entering certified supply chains, FSC will work with certificate holders to explore possible/potential timber species that could be used as a substitute for birch (predominantly) in FSC-certified products. For instance, Eucalyptus or rubberwood might be considered as an alternative for birch in manufacturing plywood.
Technology-based solutions
After the launch of FSC Blockchain, which will be offered as a voluntary solution for supply chains, FSC will make it mandatory in certain high-risk supply chains in the Eurasian region. This will introduce an additional level of scrutiny to the monitoring of transactions taking place in these supply chains.
FSC will explore the pairing of blockchain with Wood ID-based sample testing. With the identification of high-risk certificate holders, ASI and certification bodies will collect wood samples to be tested against reference samples to determine the origin of timber. FSC is working closely with World Forest ID on developing an archive of reference samples which can be used as a tool for confirming the declared origins of certified wood species.
For more information about the collaboration between FSC and World Forest ID to use technology for tracing the origins of timber, click here to listen to our podcast:
Normative provisions to strengthen system integrity
FSC will develop Advice Notes to integrate changes in the normative framework that will enable FSC to use new integrity protection methods such as blockchain and wood ID. These Advice Notes will be developed through a consultative process and enable FSC to test these new technology-driven changes before taking measures to make them a permanent part of the normative framework. Please refer to FSC’s procedure on Development and Revision of FSC requirements (FSC-PRO-01-001) for more information about Advice Notes.
If evidence will indicate the need, then FSC will consider the applicability of classifying birch as a risky species for certificate holders in the Eurasia area, including those in China, Vietnam, Turkey, Kazakhstan, and other countries, as part of the risk mitigation efforts.
Strengthening the FSC system to support certification bodies
Some certificate holders frequently move from one certification body to the next based on attractive pricing. And there are consultants who help certificate holders to painlessly migrate from one certification body to another. Presently, it is entirely dependent on a certificate holder to inform the certification body whether they have been certified previously. This practice is a risk to the integrity of certified supply chains.
ASI will closely monitor the activities of certification bodies in the Eurasian region to determine the extent of the above-mentioned challenge. Based on the findings of ASI’s investigation into the certification body ecosystem in the region, risk mitigation actions will be taken.
Systemic changes to curb dubious activities of certificate holders
Several certificate holders regularly declare zero sales of materials with FSC claims. This type of risk is known as “zero sales”. When a certificate holder declares zero sales, they might avoid the annual audit at the discretion of the certification body. This is potentially a way for dubious certificate holders to avoid inspection and disguise non-conforming activities behind a “zero sales” curtain.
To address the integrity risks posed by certificate holders frequently declaring “zero sales” to avoid audits, FSC is looking into the possibility of displaying information regarding “zero sales” claims on the FSC public search dashboard. FSC will also make provisions to remove the audit waiver that is associated with “zero sales” claims.
Expected outcomes
Some of the actions included in the Eurasia integrity workplan will be implemented by the end of 2025. The outcomes of these actions will result in FSC identifying if, where, and how Russian timber is entering certified supply chains. FSC will take strong measures against certificate holders against whom evidence of wrongdoing such as false claims, illegal trade of timber and cheating (through “zero sale”) is found.
By monitoring the supply chain ecosystem in the Eurasian region, FSC will be able to support certification bodies with their audit-related activities, identify gaps in the normative system and take necessary measures to plug them.
And FSC will help certificate holders who are facing problems with sourcing FSC-certified timber – especially birch – to identify and source alternative timber species.