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

7

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