Friedrich-Elbert-Allee 65 53113 Bonn Germany FSC WORK ORDER REPORT ANALYSIS OF COMPANY CONTROLLED WOOD RISK ASSESSMENTS WORK ORDER - FSC-GD-2013-001 Part 2: REVIEW OF COMPANY RISK ASSESSMENTS IN 87 CERTIFICATES IDENTIFIED BY FSC IC By: Martin Walter and Etienne Kuzong, ASI Date : 23 September, 2013 (Finalized 28 November 2013) - Updated 17 September 2014 Work order - FSC-GD-2013-001 - Analysis of Controlled Wood risk assessments - Part 2 - Nov 2013 The electronic version of this document on the ASI server is the latest version. All printed material is uncontrolled documentation. 2006 ASI-Accreditation Services International GmbH All rights reserved No part of this work covered by the publisher s copyright my be reproduced or copied in any form or by a means (graphic, electronic or mechanical, including photocopying, recording, recording taping, or information retrieval systems) without the written permission of the publisher.
Table of Contents 1 Background : The Work order... 3 2 Results of the investigation... 4 2.1 General risk assessments as per FSC list... 4 2.2 Risk assessments indicated in Greenpeace report for Finland... 4 2.3 Risk assessments indicated in Greenpeace report for Canada... 4 3 Analysis... 4 3.1 Initial follow up outcomes... 4 3.2 Overall performance level of the RAs and pattern of issues... 5 4 Pertinent issues encountered and to be considered by FSC in CW and RA system.... 6 2
1 Background : The Work order Title Work Order-No. Description Deliverables Analysis of company Controlled Wood risk assessments FSC-GD-2013-001 FSC requests ASI to undertake a review of company risk assessments as part of their Controlled Wood verification programs that have been identified as likely non-conformant with the relevant Controlled Wood standard (FSC-STD-40-005). The review shall include company risk assessments a) pre-evaluated by Martin Walter as compiled in the attached Excel table; b) identified in the Greenpeace case studies Finland: How FSC Controlled Wood certification is threatening Finland s High Conservation Value Forests and its species at risk from June 2013 and Canada s Resolute forest products: opening FSC to controversial Controlled Wood sources from August 2013. The review shall identify non-conformities both at company (certification requirements) and at CAB level (accreditation requirements) and shall result in actions towards CABs in line with ASI procedures for compliance assessments. ASI report to FSC GD including 1. An overview table listing all reviewed risk assessments, issues identified and actions taken 2. A summary with a basic statistical analysis describing the overall performance level of the reviewed risk assessments, patterns of nonconformities and first outcomes of follow-up activities. 3. A short report on the risk assessments by Finish companies and Resolute, Canada flagged in the Greenpeace case studies. ASI understood that the work order comes as a result of an initial review that had been carried out in 2011/2012 by Dr Martin Walter, and thus used the same resource for this second review to keep the same perspective. During the evaluation that started in April 2013, the RAs concerned were obtained from the FSC database. The RAs were evaluated for conformance with relevant FSC requirements for risk assessments. These are included (but not limited to) FSC-DIR-40-005 and FSC-STD-40-005 v2.1 part 3 and Annex 2. 3
2 Results of the investigation 2.1 General risk assessments as per FSC list ASI conducted a review of all the risk assessments indicated in the FSC Work order, 87 companies with FSC CW in their certificate scope, that includes the elaboration of a risk assessment). It is important to note that the first review of these RAs was done in 2009, by Dr Martin Walter. At the time of this second review carried out by ASI, - 3 certificates were not found on the FSC database and / or no longer certified (between the initial study in 2011 and this study) - 12 Risk Assessments had been removed from FSC database, implying that these companies did not source controlled wood from the respective regions or were only buying and/or selling already certified controlled wood (between the initial study in 2009 and this study). - 32 certificate holders (or districts under some certificates) did not have any risk assessment reports uploaded. ASI did not follow up with CABs to find out if the companies only buy and sell FSC CW, as this was not in the scope of the evaluation. - 17 non compliant risk assessments were found which were evaluated and published by 8 CABs (SGS, SCS, DNV, RA, CU, SGSHK, FCBA, BVC) The overall (above) results are presented in an annexed Excel spreadsheet. The spreadsheet contains the details of the issues found. 2.2 Risk assessments indicated in Greenpeace report for Finland See attached report on ASI analysis of Greenpeace report's risk assessments for Finland. 2.3 Risk assessments indicated in Greenpeace report for Canada See attached report on ASI analysis of Greenpeace report's risk assessments for Canada. 3 Analysis 3.1 Initial follow up outcomes Following the ASI review, the 8 CABs were contacted to notify of them of the non compliances identified. At this stage, ASI decided to deal with the resolution directly with all the CABs concerned, without formal non compliances being issued to the CABs. The complete follow up with CABs was outside the ASI Nonconformity issuing framework, mainly because this has not followed the ASI normal / formal process where ASI can mainly raise nonconformities as part of a formal assessment process. This was a process for analysis to identify issues 4
and provide feedback to FSC. However, ASI also followed up with CABs to ensure that issues identified are resolved. A follow up on CW risk assessments had already been started with the general RAs reviewed (part 2) earlier before the GP case studies. ASI contacted the 8 CABs directly and requested corrections, mainly because after review of so many RAs, these were spot cases and with very specific aspects that required ample dialogue and discussions with CABs before any solid conclusions could be made. After some discussions with the CABs, all the 17 non compliant risk assessments were either revised or withdrawn and companies were no longer sourcing from the regions with non compliant risk assessments. In one case, the certificate holder decided to carry out an onsite verification together with the CAB, in order to confirm the low risk designation. In some cases, CABs issued nonconformities to the certificate holders and followed up for closure. ASI also followed up with the CABs and the instances have been resolved either with updated and reapproved RAs or companies clarify and update their districts of origin accordingly. The direct follow up and discussions resulted in the corrections mentioned in the excel sheet. Given that the follow up mechanism has lead to the correction of all the cases identified, we consider this to be sufficient at this stage, since this is coming from a large sample study and that we would still have these in our normal assessment processes, where it would be more appropriate to identify root causes and then issue normal NCs to the CABs. Also, if after dialogue and follow up, the CABs still did not do any corrections, then ASI would proceed to do a desk review and raise relevant NCs. This is the case for one CAB, for which ASI carried out further follow up desk review, which showed that the CAB had carried out follow up in the field and required onsite verification process by the certificate holder, in order to confirm the low risk designation before sourcing wood from the given region. Overall, ASI considers the follow up to have been sufficient to address the identified issues. A full result of the situation of the RAs can be found in the attached excel sheet. 3.2 Overall performance level of the RAs and pattern of issues The overall performance level of the RAs was not very impressive. As can be seen from the figures, 43% of the available RAs had non compliant issues. The main issues that could be found as non compliant from the RAs were - Most RAs concerned wood supplied or sourced from Eastern Europe and China - Most non compliances concerned the fact that districts were considered as low risk meanwhile there are indicators that indicate unspecified risk or without any justification - 45% of the non compliances were regarding designation of Low risk for areas in countries where the CPI is less than 5, without any justification on corruption at district level 5
4 Pertinent issues encountered and to be considered by FSC in CW and RA system. During discussions with CABs, some pertinent issues came up which would require consideration. 1. Some CABs have now accepted low risk designation for most EU countries with CPI <5, with the justification that the EUTR system is now in place and that constitutes a formal system of timber tracking, can be seen as mitigating evidence (ADV 40-005-12). This was challenged by ASI due to the fact that it was not clear how the EUTR is currently being monitored and with this, there needs to be an onsite field verification. 2. Some CABs considered that in situations where CPI < 5, timber that has been sold through auction sales under government auction sales can be considered as low risk, given that it has passed through public tenders and further scrutiny. This also applies to timber from Government owned forests, harvested by government officials. However, ASI argued that given that there has been no onsite verification to determine the actual source of the wood and verify if all necessary conditions are in place to determine its legality, as corruption may still exist even in Government operations, which is the bases on which a CPI is mostly calculated (public sector). 3. Certificates that have FSC CW in their scope without RAs, may be tricky, as it is not clear if the company sources FSC CW or only purchases and sell FSC CW. This information can only be obtained through looking at the specific certification reports (which are not publicly available). ASI suggests that the FSC database could include a section under the certificate scope or applicable standards which has a tick box that "Company only buys and sells FSC certified CW". With such a tick box, it is directly understood that no RA is required for its FSC CW certificate. 4. It is important to note that RAs can give completely opposite results based on the sources of information used. 5. Some CABs questioned the type of evidence that ASI/FSC would accept as sources of information in cases of illegally harvested wood. 6