Due diligence requires the operator to gather information about the timber and timber products it is handling and about its suppliers in order to carry out a full risk assessment. Article 6 specifies the two categories of information that must be assessed:
- Article 6(1)(a) — specific information related to the timber or timber product itself: a description, the country of harvest (and, where applicable, the sub-national region and concession), the supplier and trader, and documentation showing compliance with applicable legislation.
- Article 6(1)(b) — general information that provides the context for assessing the product- specific information, on the prevalence of illegal harvesting of specific tree species, the prevalence of illegal harvesting practices in the place of harvest, and the complexity of the supply chain.
While the general information provides operators with the context in which to evaluate the level of risk, the product specific information is necessary to determine the risk linked to the timber product itself. This means that if the general information shows potential risks, special attention must be given to gathering product-specific information. If the product is derived from several timber sources, it is necessary to assess the risk for each component or species.
The level of risk can only be assessed on a case-by-case basis, as it depends on a number of factors. Although there is not a single accepted system for risk assessment, as a general rule the operator has to address the following questions:
- Where was the timber harvested? Is illegal logging prevalent in the country, sub-region or concession from which the timber originates? Is the specific tree species involved particularly at risk of illegal logging? Are there sanctions imposed by the UN Security Council or the Council of the European Union on timber imports and exports?
- Is the level of governance a concern? The level of governance might undermine the reliability of some documents showing compliance with applicable legislation. Therefore, the country’s corruption level, business risk indices, and other governance indicators should be considered.
- Are all documents showing compliance with applicable legislation made available by the supplier, and are they verifiable? If all relevant documents are readily available, it is more likely that the product’s supply chain is well established. The operator can be confident that the documents are genuine and reliable.
- Are there indications of a company in the supply chain being involved in practices related to illegal logging? There is a higher risk that timber purchased from a company that has been involved in practices related to illegal logging will have been illegally harvested.
- Is the supply chain complex? The more complex the supply chain, the harder it may be to trace the origins of a product’s timber back to the logging source. Failure to obtain the necessary information at any point in the supply chain may increase the possibility of illegally harvested timber entering the chain.
Negligible risk should be understood to apply to timber supply if a full assessment of both the product-specific and the general information shows no cause for concern.
The list of risk assessment criteria is not exhaustive; operators may choose to add further criteria if these would help determine the likelihood that a product’s timber had been illegally harvested, or if it would help prove legal harvesting.
(see the full Guidance document here: https://ec.europa.eu/environment/forests/pdf/eutr_guidance.zip)