NANJING (11 June 2010)—The Forest Trust (TFT) announced today that a Chinese factory has for the first time produced plywood whose origins have been verified as 100 percent legal, the result of the non-profit TFT's partnership with a United Kingdom wood products company and the willing cooperation of a Chinese plywood maker, a group of Chinese poplar farmers, and a Malaysian timber producer and forest concession owner.
The sheets of poplar and hardwood veneer—which will roll off the factory floor at Jiangsu Sainty Bancom Co. Ltd. in Hongze County and be shipped to the UK this month—have been legally verified for the first time by Smartwood, part of the Rainforest Alliance, to be free of illegitimate timber. The historic moment was marked today, during a workshop in Nanjing on how to ensure the legality of wood used in products for export to the United States and Europe. Sainty Bancom received a certificate of verification from the Rainforest Alliance in recognition of its compliance with the guidelines provided by TFT.
"Prior to our partnership with the UK's Premier Forest Products Ltd., attempts to trace the legality of timber used in plywood had been able to guarantee the legitimacy of only some of the wood contained in the product," said TFT's Executive Director Scott Poynton. "The plywood produced here shows we can ensure the legality of even composite wood products like plywood—even when made with materials purchased from different countries and multiple sources."
A Chinese plywood supplier was chosen as the partnership's first target because China is the world's largest manufacturer of hardwood plywood and accounts for about 42 percent of the UK's imports of tropical plywood by volume. Tropical plywood has a wide variety of commercial uses such as paneling, container flooring, furniture backing and construction.
China's plywood exports have grown 20-fold since the late 1990s, part of an intensive expansion of China's wood products industry that has seen the country go from a net importer of wood products to the world's dominant exporter.
The availability of legally verified plywood comes as governments in Europe and the US are aggressively pushing the wood products industry to use its purchasing power to combat illegal logging, which simultaneously destroys forests and robs forest communities of valuable resources.
"With all these new laws and regulations coming on line, we've heard a lot of pessimism about the ability to ensure the legality of wood products, particularly of composite products like plywood," said Poynton. "But we've done it, and the model is now here for others to adopt."
The European Parliament is considering a regulation that would require EU importers to show they have used a system of "due diligence" to exclude illegal wood products from their purchases. And the new UK coalition government has promised to seek measures making the import or possession of illegal timber a criminal offense. The US has already adopted a tough amendment to a law known as the Lacey Act that bans any domestic commerce in wood or wood products that contain illegally harvested timber.
Today, China is the world's largest market for hardwood lumber, a large proportion of which comes from tropical species. But there is widespread concern that China's voracious appetite for tropical wood, coupled with its lack of a strong system for ensuring the legality of log and lumber imports, is fueling illegal and environmentally and socially destructive timber harvests in Southeast Asia, Africa and the Amazon Basin.
To help Premier obtain a supply of legally verified plywood from China, expected to arrive in the UK later this month, TFT created a system that permits regular, transparent monitoring of a complex supply chain that in China routinely includes both domestic and foreign wood.
Hardwood plywood is typically comprised of a lower quality wood core, like poplar or eucalyptus, which is sandwiched between a thin appearance grade veneer "face" and "back." In China, core material is typically obtained from domestic poplar or eucalyptus growers, while the face and back are usually manufactured with imported tropical hardwood like Bintangor and Red Canarium, which originates from Southeast Asia or Papua New Guinea with limited traceability and dubious origins.
The problem with the core materials, said Poynton, is that in China there are thousands of suppliers, but limited verifiable systems to prove that wood has been harvested legally. To deal with this, TFT set up a supply group consisting of farmers who sell their poplar trees to a peeling mill that verifies the legality of their timber and then processes the veneer for sale to the Sainty Bancom assembly mill.
Poynton said TFT used its extensive contacts around the world to identify a potential partner among hardwood suppliers. It found Sabah Forest Industries (SFI), Sdn Bhd, located in Sipitang, Sabah, Malaysia. The company agreed to work with TFT to adopt a stringent set of procedures to confirm that its logs have been harvested in compliance with local laws. With support from the EU-funded Timber Trade Action Plan, TFT worked with the Malaysian company, helping it achieve third-party Verified Legal Origin (VLO) for its factory and forest concession in Malaysia. TFT then linked SFI into Sainty Bancom's supply chain and helped Sainty demonstrate that its domestic and tropical feedstock material originates from legal sources and to achieve its own VLO certificate.
"These activities completed a global and legal supply chain from Malaysia to China that is going to allow the UK to import China's first-ever, third-party legally verified plywood," said Poynton.
In compliance with its agreement, the Chinese manufacturer segregated a section of the factory production line where only legally verified plywood will be produced. And both the suppliers and the manufacturer will be subject to regular audits from SmartWood, a program of the Rainforest Alliance that offers certification and verification services.
Staffed by experts with many years of experience in the timber trade, TFT acted as a 'trust agent' throughout the process, said Poynton, helping the various partners understand each other's point of view in order to reach agreements and to solve issues that could have scuttled the effort.
"This is a brand new world for many of the people involved here," said Dejan Lewis, who coordinated TFT's work in Malaysia and China to achieve the VLO certificates. "While all the players are interested in providing legal products, there are market realities that they can't ignore and that impact their ability to deliver, and that is why it is critical for TFT to know as much about the timber business as it does forest conservation."
Poynton noted that challenges remain. "While there are even more complex and difficult to trace composite products like MDF and fibre-board, we've now proven that you can comply with the Lacey Act and the upcoming FLEGT regulations by going back to first principles and building supply chain solutions from the forest up. The collaboration we've seen from SFI, Sainty Bancom and Premier shows that when supply chain partners work together, really tough problems can be solved. We've put a man on the moon; surely we can work out where our wood products come from?"
Poynton noted that plywood suppliers in the UK have another reason to clean up how they source the plywood they import. The nation's Olympic Delivery Authority (ODA) has promised to use only products made of legal and sustainable timber in the construction of the London 2012 Olympic and Paraolympic Games venues and infrastructure. Poynton said, however, that the hard-won success of the TFT-Premier partnership suggests much effort will have to be made if the UK's plywood suppliers and others are to meet the ODA's criteria with plywood imported from China. [1]
Poynton explained, "It's taken us over 18 months to achieve this goal, and Sainty's product is the first third party legally verified plywood coming from China. There are vast volumes of Chinese plywood coming into the UK, across Europe and the US. Where is that ending up—what systems are in place to prove that illegal plywood isn't being used somewhere at some building site, even in small volumes? It's tough to prove a negative. The point is, if today only one Chinese factory can prove its plywood is legal, it makes you wonder about the legality of the rest. Is it legal? Good question, but one buyer had better answer soon, given Lacey and FLEGT."
The plywood project has been supported by funding from the Timber Trade Action Plan (TTAP), a consortium of European timber federations backed by the European Commission; the UK Timber Trade Federation, which represents the wood products industry; and the Rainforest Alliance SmartWood program. TFT made the announcement today during a workshop designed to provide advocates, policymakers and industry with basic information regarding the new policy climate in Europe and the US, and a sense of the process required to ensure access to legal wood and obtain third-party certification that demonstrates a clean supply chain.
About The Forest Trust (TFT)
Established in 1999, TFT is a global nonprofit that helps businesses bring Responsible Products to market. Responsible Products improve peoples' lives and respect the environment at all stages of the product lifecycle. TFT helps its more than 75 members worldwide to build responsible supply chains by identifying and addressing embedded social and environmental issues. Having established a strong record of achievement in the wood sector, TFT now provides its members with supply chain and communication support services in a diversity of product categories; alongside its foundation Wood Group, it has established Beef & Leather; Stone, Cotton, Palm Oil and Wool Groups. For more information, visit: www.tft-forests.org.