FSC system updates for FSC CoC certificate holders
Due to the alignment process of the FSC system with the EUTR, FSC chain of custody certified companies face a number of changed and new requirements. Several are effective immediately and need urgent attention by certificate holders. Read this article to gain the overview as well as all the details including deadlines for compliance.
FSC recently adopted a number of system revisions aligning the FSC system with the EU Timber Regulation, the US Lacey Act and the Australian Illegal Logging Prohibition Act.
The changes relevant for FSC CoC certificate holders are included in two FSC directives providing guidance on the requirements of key FSC standards through so-called "Advice Notes". FSC directives are mandatory, so following them is essential to ensure compliance.
Here is an overview of the directives and the key changes included in the latest round of revisions:
| FSC document | Key changes |
|---|---|
FSC Chain of Custody Directive (FSC-DIR-40-004) Mandatory guidance on the FSC Chain of Custody Standard FSC-STD-40-004 V.2.1 | Changes related to handling of non-conforming products, access to information, compliance with trade and customs laws, and phase-out of minor components. |
FSC Controlled Wood Directive (FSC-DIR-40-005) Mandatory guidance on the FSC Controlled Wood Standard for company evaluation FSC-STD-40-005 | Incorporates a revised list of applicable legislation into the FSC requirements for company evaluation of Controlled Wood. |
Below, we are delving into the details of each change, providing information that enables certificate holders to understand and respond to the changes. Use the headlines below to navigate to the topics that are relevant for your company.
A. Changes relevant for all FSC CoC certificate holders
The following advice notes included in the FSC Chain of Custody Directive (FSC-DIR 40-004) have been revised:
1. Advice note on non-conforming products (ADVICE-40-004-08)
2. Advice note on access to information (ADVICE-40-004-10)
Read below to understand the new requirements and see sample procedures corresponding to the new rules.
1. Advice note on non-conforming products (ADVICE-40-004-08) requires certificate holders to have procedures in place to deal effectively with non-conforming products. This strengthens the credibility of the FSC system and helps ensure alignment with the EUTR.
The advice note has been amended to exempt small CoC certified enterprises from having a written procedure for handling non-conforming products. Small CoC enterprises are defined as organisations with: i. No more than 15 employees (full time equivalent), or ii. No more than 25 employees (fulltime equivalent) and a maximum total annual turnover of USD 1,000,000.
Deadline for implementation: This advice note is already in force.
Required actions: Any CoC certificate holder larger than ‘small’ as defined above needs to have a written procedure for handling non-conforming products in place.
Sample company procedures for handling non-conforming products Purpose of this procedure: the purpose of this procedure is to ensure correct handling of non-conforming products. Definition of non-conforming product: product or material labelled with FSC trademarks or registered or sold with an FSC claim, for which an organisation is unable to demonstrate that it complies with FSC eligibility requirements for making claims and/ or for using the FSC on-product labels. Points of action: In case non-conforming products are discovered in storage or production facilities, we will take the following actions: 1. Immediately remove any on-product FSC claims . In case non-conforming products have been sold with an FSC claim, we will take the following actions: 1. Identify all relevant customers, advise those customers in writing within three (3) business days of the non-conforming product, and maintain records of this communication; Once immediate actions have been taken as described above, we will take the following actions: 1. Identify causes for the occurrence of non-conforming products. |
2. Advice note on access to information (ADVICE-40-004-10) sets out requirements for providing information on species, scientific or trade name and origin to buyers about FSC certified or controlled wood products, upon the buyers’ request. This applies regardless of whether the buyer is certified or not.
It now also obliges FSC CoC certificate holders to provide proof of compliance with relevant trade and customs laws, if so requested by their buyers. “Trade and customs laws” can include various regulations, such as bans on the export of unprocessed logs or rough-sawn lumber, requirements for export licenses for timber and timber products, official authorisation, and taxes and duties applying to timber product exports.
Providing information on species, name, origin and compliance with trade and customs laws may require cooperation with suppliers further up the supply chain. Certified suppliers are also obliged by this advice note to provide the information to their buyers.
Deadline for implementation:This advice note is already in force. All CoC certificate holders thus need to provide proof of compliance with relevant trade and customs laws whenever requested from their buyers.
Actions required: Certified operations are expected to establish procedures corresponding to this advice note. This will be verified during annual audits.
NOTE: FSC only requires certified suppliers to make information on origin and species available to their customers upon request. Although many importers based in the EU and the US are now legally required to have access to such information, the advice note does not go so far as to require that such information always accompanies FSC products. It is therefore still up to the importing EU and US companies to request and obtain information on origin and species from their suppliers.
NEPCon recommends companies trading in and/or manufacturing products that may be exported to the EU market or sold within the US to 1) consistently ensure acess to information on species, origin and compliance with trade and customs laws, and 2) provide such information to their customers by default.
| Samples procedures for information on species and origin Purpose of this procedure: Ensure that information on origin and species is available and can be provided to customers. Points of action: Purchasing: 1. When purchasing FSC or FSC Controlled Wood certified products, we request suppliers to provide information on species and country of harvest. In case the same trade name may cover different scientific names, the scientific name shall be used. 2. We require suppliers to inform us immediately in case species or country of harvest changes. 3. We communicate these requirements to suppliers directly and also in agreements. Record keeping and client communication: 4. We record the information on species and country of harvest in the inventory. 5. We register information about all species and all countries of origin in case products contain several species or material from different countries. Sales 6. We include information on species and country of harvest in the order confirmation. 7. We inform customers immediately in case of changes in species composition or country of harvest for any specific product. Note: The FSC advice note also covers information on compliance with trade and custom legislation. See the section on ADVICE-40-004-11 below. |
B. Changes relevant for FSC CoC certificate holders importing or exporting timber products
The following advice note has been added to the FSC Chain of Custody Directive (FSC-DIR 40-004):
Advice note on trade and customs laws (ADVICE-40-004-11) requires FSC certificate holders exporting and/or importing timber or timber products to have procedures in place to ensure that the commercialisation of FSC certified products comply with all applicable trade and custom laws.
The advice note specifically mentions:
- Bans, quotas and other restrictions on the export of timber and timber products (e.g. ban on export of uncrossed logs or rough –sawn timber).
- Requirement for export licenses for timber and timber products
- Official authorisation that entities exporting timber and timber products may require.
- Taxes and duties applying to timber products export.
NOTE: While the advice note specifies a number of important issues related to trade and customs, these are only examples - the list is not meant to be exhaustive. Missing aspects exclude illegal offshore trading, misclassification of products and transfer pricing (for moving profit to tax havens). Such infractions are very commonly connected with timber products from some high risk countries, and these types of legislation are considered to be covered by the EUTR. We recommend using our more complete specification of legislation covered by the EUTR as a basis.
Deadline for implementation: This advice note is already in force.
Action required: All FSC CoC certificate holders importing or exporting FSC products thus need to immediately put procedures into place ensuring that their products comply with all applicable trade and customs laws. Evidence of compliance shall be available to customers on request (see advice note ADVICE-40-004-10 above). This will be evaluated by the certification body during the annual audits.
Sample procedures for compliance with trade and customs laws Purpose of this procedure: Ensure compliance with all applicable trade and custom laws when importing or exporting products with FSC claim. Points of action: Importing products: 1. If possible, we will avoid purchasing products through companies located in countries considered as tax havens and being involved in other financial transactions which support tax fraud in the country where the products are manufactures. In cases where trading trough countries considered as tax havens cannot be avoided, we will check if this is a violation of the trade legislation in the country of our supplier. Exporting products: 1. We will not engage with trading through companies located in countries considered as tax havens or other financial transactions with the aim at avoiding legally applicable taxes and fees. |
C. Changes relevant for CoC certified companies sourcing controlled material
The following new advice note has been added to the FSC Controlled Wood Directive (FSC-DIR-40-005):
Advice note on applicable legislation (ADVICE-40-005-19) requires FSC Controlled Wood certified companies sourcing from areas classified as “unspecified risk” for legality to use a list of applicable legislation and any legally required verifiers, such as licenses or permits in conducting Controlled Wood field verification. The advice note includes a minimum list of applicable types of legislation. >Go to advice note
Resources and guidance:
The free on-line resource for responsible timber sourcing, the Global Forest Registry, will be continuously updated with country-specific lists of applicable legislation that follow this advice note. Such lists are being developed for a number of countries. To ease your work, make sure to check with this site if you need to update existing risk assessments or conduct new risk assessments. The site is jointly managed by FSC and NEPCon, and FSC recommends using its information as part of your efforts to secure compliance with the FSC Controlled Wood requirements.
In countries with an endorsed FSC standard or an interim standard used by FSC-accredited certification bodies, these standards shall include a list of applicable legislation. This can be used as basis. However, please note that some of these are not updated to the latest FSC requirements.
Countries involved in the FLEGT/VPA process will often have compiled lists with applicable legislation in this connection that can be used as basis.
Deadline for implementation: This advice note became effective on 1 March 2013. No company-based controlled wood risk assessments may be conducted according to Annex 3 after this date without applying this advice. Certificate holders should update their risk assessments accordingly; this will be verified during their next annual audit.
D. Changes relevant for FSC CoC certificate holders using Minor Components
The following advice note included in the FSC Chain of Custody Directive (FSC-DIR 40-004) has been revised:
Advice note on minor components (ADVICE-40-004-09) has been modified to effectively phase out the use of minor components in manufacturing FSC products by end-2013 and a complete phase-out of minor components in FSC products by end-2014, when sale of such products is no longer allowed.
In the intervening period, FSC has adopted language to ensure alignment with legislation applicable not only in the EU but also in the US and Australia. It reads: “From 01 March 2013, uncertified and uncontrolled minor components shall no longer be used in products and commercial activities […] in countries where timber legality legislation applies and where these products and activities are included in the scope of the legislation [...]”.
Requirements and deadlines applying in different markets throughout 2013:
The implications of this for the remainder of 2013 depend on the applicable timber legislation. Here is an overview of restrictions and deadlines applying until the end of 2013 in the EU, US and Australia:
- Companies based in the EU: FSC products containing Minor Components will lose their FSC status when customs cleared for entry into the EU market. FSC certificate holders may continue using Minor Components in manufacturing FSC products within the EU until 31 December 2013. This is effective as of 1 March 2013.
- Companies based in the US and Australia: The use of Minor Components in manufacturing products is excluded for companies based in the US and Australia. This is effective as of 1 March 2013.
- Companies based in Australia: the use of Minor Components in manufacturing products is excluded for components imported into Australia, effective as of 1 March 2013; however, domestic Australian manufacturers who have bought minor components on the domestic market, produced these in their own manufacturing, can continue using them until end-2013.
Deadlines applying worldwide from end-2013:
- After 31 December 2013 and applying worldwide, the production of FSC products containing uncertified and uncontrolled minor components is no longer allowed.
- After 31 December 2014 and applying worldwide, the sale of FSC products containing uncertified and uncontrolled minor components is no longer allowed.
