Laos Timber Risk Profile

Mitigate the risks in your supply chain

Learn which actions we recommended to mitigate the risks associated with the timber sources from Laos.

Source Certified Materials 

NEPCon believes that third party certification (for example FSC and PEFC certification) can provide strong assurances of the legality of the products they cover. Companies seeking to mitigate the risks of sourcing illegal timber should seek to purchase third party certified materials wherever possible. 

While the European Timber Regulation does not include an automatic “green lane” for certified products, it does recognise the value of certification as a tool for risk assessment and mitigation. The European Commission says that companies “may rate credibly certified products as having negligible risk of being illegal, i.e. suitable for placing on the market with no further risk mitigation measures, provided that the rest of the information gathered and the replies to the risk assessment questions do not contradict such a conclusion.”

For more information on using certified materials in your due diligence, including how to assess whether a certification system meets EUTR requirements, see the page on Certification and Due Diligence.

Mitigation recommendations

There are four recommended actions to mitigate the risks associated with timber sources from Laos.

1. Fully map your supply chain

• Our supply chain mapping tool can help you do this.

2. Obtain and verify documents

• Land tenure documents: 
  • Maps of national forest categories. These indicate possible locations of forest management units and potential risks that development projects or plantations overlap with officially designated forest categories
  • Village Forest Management Agreement and maps of village land and zoning of village forests. The existence of these documents reduces risk of possible violations of rights of villagers.These documents can be used to assess compliance of location of timber source (tree plantation, forest conversion under development project etc.) to zoning of village area
  • Land title for private land, which confirms legitimate right to plant trees
  • A three-year temporary land use certificate for tree planting issued by the District Office of Natural Resources and Environment/District Agriculture and Forestry Office, which confirms the right to conduct commercial tree planting. Documents must include accurate descriptions of borders as well as a map
  • Temporary Land Use Certificates for tree planting issued by District Offices of Natural Resources and Environment confirm legitimate right to plant trees
  • Business registration document confirms legitimate right to deal with logging operations and to harvest plantation timber for commercial use
  • Basic document justifying the need for forest conversion, which allows a check of whether authorities were empowered to sign an agreement. The document should include an accurate description of concession borders and a map. The map date must correspond to date of agreement’s signing
  • Concession/lease agreement for tree plantation by the Ministry of Natural Resources and Environment or Provincial/City Offices of Natural Resources and Environment. This agreement legitimates the right of the holder to plant trees commercially. It allows a check of whether authorities were empowered to sign agreement. It should include accurate description of concession borders and a map. The map date must correspond to date of the signing of the agreement
  • Decision on conversion of degraded and barren forest lands made by authorities of different levels (municipal, district, province, national) depending on the area. This confirms that the decision on conversion was made by authorities according to their mandate
  • Study on socio-economic information and appropriateness to natural conditions, land tenure rights. This study must be undertaken and approved before a concession agreement is signed and must include information on the existence or absence of third party rights. The study provides evidence that the area lacks productive forests and complies with the definition of degraded forest or barren land (in case of a concession for establishment of a tree plantation)
  • Social and environmental impact assessment, including appropriate resolution measures. The assessment must be undertaken and approved before the concession agreement is signed. It must provide evidence that the area lacks productive forests and complies with the definition of degraded forest or barren land (in case of concession for establishment of tree plantation). It must evidence that the plans will cause an irreversible negative effect, and provide measures for reforestation and/or compensation of any negative social and environment impacts. It must provide proof of consultations with stakeholders
  • Operational plan on protection of water resources and environment, land clearing, village development, participation of local people, benefit sharing etc.. This must be undertaken and approved before concession agreement is signed. It must include maps with accurate borders of clearing areas, proofs of consultations with stakeholders, information on compensation to, and benefit sharing with, affected local population
  • National and provincial annual logging plans/quotas approved by the National Assembly and the Ministry of Agriculture and Forestry. A relevant quota has to be included in annual logging plan for current year
  • Forest management plan for production forest area endorsed by the Department of Forestry of the Ministry of Agriculture and Forestry. The forest management plan must be approved for the concerned production forest area. It must allow verification of information on location of logging sites, annual allowable cut, as well as composition of tree species available for harvesting
  • Pre-harvesting inventory and tree marking report approved by Provincial Agriculture and Forestry Office. The report must be undertaken in the year preceding the logging season, and must include maps in accordance with requirements; data from tree marking report (species, sizes, volumes) must match specification of timber on sale
  • Logging plan approved by the supervision committee responsible for logging management or by Provincial Agriculture and Forestry Offices (for conversion timber). The plan must be undertaken in year preceding logging season and include maps in accordance with requirements; data from tree marking report (species, sizes, volumes) must match specification of timber on sale
  • Village Forest Management plan, which includes information on areas allocated for smallholding tree plantations, age of plantations, planted tree species
  • Plantation management plan for registered plantation: includes information on location of parcels allocated for logging in current year, age structure and planted species
  • Contract for logging in production forest areas between Provincial Agriculture and Forestry Offices and operator
  • Logging permit. The contractor must be a state logging unit
  • Contract for logging in areas with infrastructure development, mining, tree and industrial crop plantations between a specially appointed committee responsible for logging management and operator, and a logging permit issued by the supervision committee. The contractor must be a state logging unit. In cases where the contractor is a concession holder or its associate company, this can be indicative of illicit activities. The borders of the logging (clearing) area must comply with project design (approved route of road, transmission line, maximum flooding level of reservoir etc.)
  • Approval of District office of Agriculture and Forestry or by Provincial or Vientiane Capital Agriculture and Forestry Offices via a request to District Agriculture and Forestry Offices for verification of registered plantations is required
  • Government permission for harvesting prohibited tree species (in case of forest conversion) 
• Tax related documents
  • Log list: made at log landing II. Volumes, composition of species, and sizes in log list must match the characteristics of the timber for sale
  • Sales contracts. These can provide evidence that timber was officially sold by government agency, and that royalties were paid
  • Royalty payment receipt. Compare the prices with market prices and minimum prices set by the Ministry of Industry and Commerce for current year. This information may provide an indication as to whether timber was auctioned or sold via negotiations at the lowest price (which can be indicative of conspiracy between officials and buyer)
  • Bank deposit slip 
  • Payment receipt 
• Harvesting related documents
  • Logging contract and logging permit, pre-harvesting inventory and tree marking report
  • Logging contract and logging plan (for conversion timber). The borders of the logging area must comply with the project design (route of road or transmission line, maximum flooding level of reservoir etc.)
  • Government approval for prohibited tree species
  • Map of national forest categories, to find out whether timber sources are situated within protection or conservation forests
  • Management plans for National Protected Areas, protection and production forest areas. The allocation of logging areas must comply with management plans. Protection sites (habitats of rare wildlife species, areas with high biodiversity) shall be set aside
  • Maps of tree plantation, plantation management plan for registered plantations: to find out whether plantation falls within conservation or protection forests
  • Government approval for prohibited tree species. This is only allowed for forest conversion
  • Environmental impact assessment. This must be undertaken and approved before granting a concession. The assessment can be used to check whether irreversible negative impact on the environmental was considered, and what measures were taken to mitigate and compensate for any negative impacts
  • Operational plan on protection of water resources and environment, for development projects and tree plantations
  • Summary report of actual implementation of measures to mitigate and minimise impacts
  • For tree plantations
    • Records of good agricultural practices, and records of complaints and actions taken to resolve them, which are reviewed by the Department of Agriculture once a year
    • License for import of pesticides
    • Records of pesticide use
    • Pesticide registration certificates
• Health and safety documents
  • Reports by companies to the Labour Inspection Agency on assessment of risks to safety and health, and to the Labour Inspection Agency on accidents
  • For tree plantations
    • Pesticide registration certificate
    • List of banned pesticides
    • Instructions on the correct use of pesticides, with information on the negative impacts of pesticide exposure
  • For development projects and tree plantations
    • Report on the completion of a UXO (unexploded ordinance) survey or report on UXO clearance and release of land for use (combined with the handover certificate)
    • UXO/Mine Accident/Victim Reports, to check whether there were accidents, detail victims and circumstances)
• Labour related documents 
  • For development projects and tree plantations
    • Study on socio-economic information
    • Operational plan on participation of local people
  • Employment contracts. Check they comply with basic legal requirements
  • List of the company's internal regulations on labour practices
  • Company reports on youth and foreign employees. Check the number of foreign and youth workers
• Documents relating to third parties
  • Concession/lease agreement granted by the state for hydropower dam construction, mining etc. to find out whether concession overlaps village areas. The contract should consider the rights of the local population, and require mitigation of damage and compensation for damage and relocation expenses (including provision of appropriate source of subsistence)
  • Concession/lease agreement for tree plantation by Ministry of Natural Resources and Environment or Provincial/City Offices of Natural Resources and Environment to find out whether the concession overlaps village areas. The contract should consider the rights of the local population, and require mitigation of damage and compensation for damage and relocation expenses (including provision of appropriate source of subsistence)
  • For development projects and forest plantations
    • Social impact assessment
    • Resettlement plan
    • Land acquisition assessment
    • Land acquisition and compensation report
    • Ethnic minority development plan
  • Memo with the estimation of compensation signed by all stakeholders
• Trade and transport documents
  • Sales contract with the government (for natural timber). This is a key document which provides legitimate grounds for issuing all other permissions
  • Removal permit from log landing II
  • Transportation permit for timber commodities
  • Receipt of sale and collection of revenue from timber sale – for natural timber
  • Export license
  • Certificate of origin
  • Copy of Enterprise Registration Certificate authorised to exercise timber business
  • Packing list
  • Customs declaration form
  • Copy of sale-purchase contract
  • Copy of payment receipt through Bank of Laos
  • Bank slip on payment of export tariffs and royalties
  • Government approval for prohibited tree species (for conversion timber). This is a document is required in order to justify application for a CITES certificate

3. Carry out on-site verification

• Confirm that contractors have a Timber Extraction Contract 
• Confirm that plans are in accordance with legal requirements, and that maps correspond to actual delineation on the ground.
• Confirm that management practices meet legal requirements

4. Conduct targeted timber testing

• Conduct timber testing on samples of purchasd material to verify the species or origin of timber, where appropriate