Getting industry back on track

Throughout the summer we have been supporting a number of members on improving the robustness of their due diligence systems, some of which has been in response to visits by the NMO.

Much of this has been tweaking members' systems rather than any wholesale changes but it is clear that the depth the NMO is looking for in terms of due diligence is greater than anyone has really expected.

It is clear from dialogue with other timber trade federations across Europe that expectations of due diligence on the UK trade are greater than anywhere else in Europe, except perhaps in Germany.

The best example of this is feedback I have received from European colleagues on the level of due diligence accepted by Competent Authorities on the same supply chain, with the NMO going into much greater depth than another Competent Authority in Europe. The inconsistency of enforcement was also backed up by the EUTR scorecard published by the Commission at the end of July (TTJ August).

The TTF continues to put pressure on both the European Commission and other timber trade federations to press their governments to ramp up enforcement efforts, both in terms of their breadth as well as the depth at which they analyse Operators' due diligence systems. It is extremely important to ensure that Operators in the UK are not disadvantaged, particularly in the panels and hardwood sectors, where there are significant European competitors on the UK market. It is also important to ensure that UK buyers are managing their commercial risks by buying products from Europe, where the risk of illegality is being managed robustly.

As enforcement has ramped up it has been disappointing to see that the good work that is already taking place in the trade has not been taken into account when identifying Operators to visit. Only two factors seem to be considered when identifying Operators using data from HMRC - the type of product purchased and its source. Surely those Operators that are not part of industry-regulated schemes or Monitoring Organisations should be considered a higher risk business, so visits should focus on those outside of these initiatives. We hope this is down to the current phase of learning about the EUTR in practice and that, over time, this will become a factor the NMO and other Competent Authorities take into account, especially as application of industry-developed schemes becomes more consistent.

I expect that much of this will be picked up in the EUTR review, which is in its planning and scoping phase. Again, we've taken the opportunity to influence the suite of performance indicators that we would expect Competent Authorities to report on, including both quantitative and qualitative information to understand the breadth and depth of enforcement.

The review also gives us a chance to refocus on the aim of buying timber from sustainable sources. The EUTR has, at times, caused a detour away from this path and although it has strengthened buying processes, industry must now get back on track and refocus on sustainably-sourced timber products.

In this regard it was great to attend the business preview of the WWF's forest campaign. There is a really positive buzz about this campaign, with industry supporting its principles and wanting to be a part of it. There are some clear commitments that timber traders can make now, such as influencing the EUTR product scope to be clearer. However, when committing to setting a procurement target, as always with such initiatives, the devil is in the detail; the key sticking point is how the WWF defines "sustainable sources". This is a conversation I am looking forward to having with them!

Finally, I would like to make a call to the trade across Europe to ensure that your governments have in place national FLEGT legislation. As I understand it, all EU countries must have this in place before FLEGT timber, when it's ready in producer countries, can enter Europe. After waiting 10 years for FLEGTlicensed timber the last thing we need is European governments holding it up!