TIMBER LEGALITY IN CHINA PRACTICES &PERSPECTIVES
Jeff Cao
International Seminar on Illegal Timber of the Global EastFebruary 29, 2016, Kyoto, Japan

About me2Major Industry Experience• 2016-Present: Director, Quality Assurance-APAC, Lumber Liquidators (LL)
• 2013-2015: Asia Forestry Hub Manager, Bureau Veritas Certification (BV)
• 2008–2013: Associate Regional Manager, East Asia, The Rainforest Alliance (RA)Professional Qualifications•Forest Management Certification Lead Auditor / Technical Reviewer / Decision Maker (BV)
•Chain of Custody Certification Lead Auditor / Technical Reviewer / Decision maker (BV)
•Timber Legality Verification Lead Auditor / Technical Reviewer / Decision maker (BV)
•Quality Management System (LL)
•Product Certification, Testing and Inspection (LL)

Education Background• Ph.D., 2011, University of Washington (USA)• M.Sc. 2004. Oregon State University (USA)• M. Sc. 2001. Nanjing Forestry University (China)• B. Sc. 1999. Nanjing Forestry University (China)

Content• Brief overview of timber legality in the context of China• Structured approach to address timber legality DDS• Future perspectives

Defining Illegal Timber
Harvesting, transporting, processing,buying or selling of timber in violation ofnational laws. It also applies to harvestingwood from protected areas, exporting
threatened plant/tree species, andfalsifying official documents . Less
obvious acts of illegal logging include
breaking license agreements, tax evasion,
corrupting government officials andinterfering with access and rights toforest areas.
非法木材指的是在采伐，运输，生产，买卖木材等环节违反国家法律规定的行为。包括采伐
自然保护区的木材，出口濒危植物，篡改合法证明文件；还包括违反合法证明文件采伐林木，偷税漏税，政府腐败和干扰所在区域的林木使
用权和居民合法权益的行为。

Chinese Forest Laws System
More than 60 laws, regulations, and standards developed during the past 30 years forforest management, biodiversity, land use, harvest, timber trade…
在过去的30年中，针对森林管理、生物多样性、土地利用以及木材贸易等，制定了超过
60个的法律，法规。

宪法：全国人大制定、基本法
法律：全国人大制定、行业性法规、条例：国务院颁布、行业性政府规章：中央政府主管部门、行业性
地方性行政规定：地方人大、政府
实际执行办法：地方林业管理部门

Source: State Forestry Administration

Where timber legality DDS is most concerned?
Harvesting
采伐环节Transportation运输环节Processing
加工环节

Trading贸易环节Administrative
Management
行政管理 Logging without authorization 擅自采伐 Illegal logging 违规采伐 Illegal reforestation违规更新林木 Others 其他行为 Transportation without authorization 擅自运输 Illegal transportation 违规运输 Illegal purchase 非法收购 Illegal processing 非法加工
 Exporting/importing wood without authorization
擅自出口/进口木材
 Illegal exporting/importing wood
违规出口/进口木材
 Others 其他行为 Illegal administrative act 行政行为违法 Taxes 相关税费Harvesting 采伐环节
（1） Logging without authorisation 擅自采伐（未获得采伐许可） Logging of protected species
采伐受保护的树种 Logging in protected areas
采伐保护区域内的林木
 Logging in prohibited areas such as steep
slopes, riverbanks and water catchments
采伐禁止采伐区域(陡峭的山坡，河岸和集水区等)的林木

Harvesting 采伐环节(2) Logging in violation of contract provision违规采伐(未按照采伐规定进行采伐,主要指违反合同规定进行采伐) Incorrect logging ways 错误的选择采伐方式
 Logging in excess of area division
采伐超出区域范围（与本地林木所有者签订合约采伐他
们的林木，但是却采伐了相连公共区域的林木） Extracting more timber than authorized
超出采伐数量采伐林木 Incorrect wood species
未按规定树种采伐

Harvesting 采伐环节（3） Illegal reforestation 违规更新林木
 No reforestation after logging
采伐木材后未进行更新 New species with bio-security risks（poor planting species , lowdensity planting ）更新林木的树种存在安全隐患（种植品种差，低密度种植） Insufficient quantity of newly planted timber
未达到更新的木材量

Harvesting 采伐环节(4)Others 其他行为 Transplanting large trees 移栽大树
 Digging tree seedlings, tree roots 挖树苗、树根 Saftey, PPEs

Transportation 运输环节(1) Transportation without authorization 擅自运输木材
 Without timber transportation
permits
未取得木材运输许可运输木材
 Knowingly transport illegal timber
承运人（明知情况下）违法运输木材
 Accept fake timber transportation
documents (using a forged, alteredtransport documents)
接受篡改的木材运输文件（使用伪造、涂改的运输证明文件）

Transportation 运输环节(2) Illegal transportation 违规运输木材
 Not matching with timber transportation documents，such asspecies, quantity, etc.不按照木材运输文件规定运输木材（树种、数量等）

 Over-loadingProcessing 加工环节(1) Illegal purchase 非法收购木材行为
 Purchase timber from organizations or individuals without harvest
permits
收购来自未获得采伐许可的木材（来源于企业或个人）
 Processing timber without legal documents
加工没有合法证明文件的木材

Processing 加工环节(2) Illegal processing 非法加工木材行为 processing without permission or authorization
未经许可或授权生产木材

 Have not meet the permit conditions，including pollution control
standards
未达到许可条件生产木材（包括污染控制标准等）Trading 贸易环节(1) Exporting/importing wood without authorization
擅自出口/进口木材行为 Exporting and importing tree species
banned under international law, such as
CITES Appendix 1
出口/进口国际法律法规所禁止的树种（国家濒危物种公约附录1）； Exporting/importing wood withoutauthorization，such as CITES Appendix 2and Appendix 3
未经允许擅自出口/进口木材（国家公约附录2和附录3里面的树种）； Exporting and importing logs, sawn timberand other forest products violated nationalban
违背国家禁令擅自出口/进口原木、锯材和其他林产品。

Trading 贸易环节(2) Illegal exporting/importing wood
违规出口/进口木材行为 Exporting more forest products thanallowed on the export license
超出出口许可证上的数量出口大量林产品 Illegal use of timber import and export
documents (altered or forged)
违规使用进出口木材证明文件（涂改、伪造）。

Administrative Management 行政管理
（1） Illegal administrative act 行政行为违法 Obtaining logging concessions
through illegal ways , such asbribes获得采伐权的途径违法（通过贿赂等手段）

 Illegal mining in forest landAdministrative Management 行政管理（2） Taxes 相关税费
 Selling forest products lower than market price, reducing profits andcorporate and individual income tax
低于市场价格出售林产品，减少利润和企业、个人所得税
 Purchasing forest products higher than market price，reducing profitsand corporate and individual income tax
高于市场价格购买入产品，减少利润和企业、个人所得税
 未支付许可费用、税收、罚款和其他行政费用。
Unpaid license fees, taxes, fines and other administrative costs

Government Response to Illegal Logging
美国雷斯法案
欧盟木材法规澳大利亚禁止非法砍伐法案
日本绿色采购政策
俄罗斯原木法案
中国木材合法性验证体系及木材合法性认定管理办法Chinese Timber Legality Verification System

2009 project kick-off
First draft of standards released in 2015, working with 3rdparties on pilot testingGlobal voluntary forest certification schemes
Global Schemes
国际体系National schemes endorsed by PEFC
PEFC认可的国家体系

China (in process…)
中国（申请中）Forest StewardshipCouncil Standards
森林管理委员会

Malaysia (COC)马来西亚Indonesia (in process…)
印尼

The Programme for
the Endorsement ofForest Certification
森林认证体系认可计划

Chile (FM and COC)
智利

Brazil (FM andCOC)巴西USA (FM and COC)美国

Structured approach to address timber legality DDS• Key information collection and documentation• Risk assessment process and criteria• Risk mitigation process• On-going monitoring, reporting and verification

Key information collection:• Supplier self-declaration• Name of legal entity and address, including region and country• Legal registration and evidence of operation in compliance withnational legal requirements• List of suppliers with contact details, including address, region andcountry• Commercial or common name of the timber species purchased andused, or full scientific name when the use of the commercial namemay result in ambiguity• Volumes/quantity of timber or timber products purchased and used in
the production process• Commercial or common name of timber or timber products sold
• Volumes/quantity of timber or timber products sold

Risk assessment criteria
Risk assessment requirements can be based on
Country level: Some countries may be considered as presenting higher
levels of risks due to: e.g. high levels of illegal activities, high levels ofdeforestation, corruption.
Company level: Timber must have been harvested by a legally registeredcompany, within a legal FMU, and in compliance with legal requirements
such as management plan, harvest license, etc.
Species level: Some species may represent a higher level of risk thanother; e.g. CITES species, tropical species, etc.

Supply chain: The complexity of the supply chain and mixing of timber
products from different origin will result in higher levels of risk.
FLEGT and/or Third party certification: FLEGT certificates (for EUTR)
or other third party certification can be taken into account.

Risk assessment criteria
Risk assessment framework can be based on 5 levels of risk, fromnegligible to critical risk
Risk level 1: Negligible risk; company based in low risk country, trading
activities only, all legal documentation available, all production data fully
available per species and per product, no protected timber species ortimber product traded.
Risk level 2: Low risk; based in low risk country, trading activities only
most legal documentation available, most production data available, noprotected timber species or timber product traded.
Risk level 3: Medium risk; based in risky region, engaged in production
activity, most legal documentation available, most production dataavailable, no protected timber species or timber product traded.

Risk level 4: High risk; based in risky region, engaged in forest
management, most legal documentation available, but most production
data missing, no protected timber species or timber product traded.
Risk level 5: Critical risk; Some of required legal documents are missing
or most production data is missing, and protected or controversial timber
species or timber products could be traded.

Risk Mitigation Measures
Risk assessment framework can result in the application of 5 levels of risk
mitigation measures to ensure negligible risk regarding the legal origin of
timber and timber products
Risk level 1: Negligible risk – Registration as qualified suppliers
Risk level 2: Low risk – Registration, and additional risk assessment ordocument review required
Risk level 3: Medium risk – Registration, additional risk assessment
during office audit required
Risk level 4: High risk – Registration, additional risk assessment during
office and field audit required
Risk level 5: Critical risk – Registration, additional risk assessment
during office audit, field audit and shipment inspection requiredFuture perspectives• Call for practical and harmonized criteria to make risk

assessment work more operational• Public information on legal companies/products• Labeling requirement• Solutions for SMEs (group certification model)• Cost of compliance• Implications for supply chain and quality management

Thank You!