Stora Enso’s approach tocombat illegal logging
Yokohama 3 December 2007
Pirjetta Soikkeli Communications Director
Wood Supply, Sustainability

Outline• Stora Enso in brief• Sustainable forestry• Traceability• Forest certification• Conclusions

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Stora Enso in brief

Stora Ensoin brief
A world leader• 16.5 million tonnes of paper and board• 7.7 million m3 of sawn and processed wood products
Main Business Areas• Newsprint• Magazine Paper• Fine Paper• Consumer Boards• Industrial Packaging• Wood Products
Approximately 44 000 employees
in more than 40 countries
Sales EUR 14.6 billion
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Stora Enso Japanin brief• The key supplier of paper, board
and pulp to Japan and Taiwan• Particularly serves consumer boardmarkets• Supplies of liquid packaging boards
and food service boards• Supplies of graphical, magazine
and newsprint paper• Annual net sales of EUR 120 Million

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Stora Enso Timber Japanin brief– sawn solid and kiln-dried– further processed– engineered wood products• 1.03 Million m³ of timberdelivered to Japan in 2006
• Annual net sales EUR 270 million

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TTL SOFTWOOD IMPORTS

6000
European imports to Japan
North America

5000

RussiaStora Enso Timber deliveries

4000
1000 m3• Leading supplier to Japan,
accounting for 27% of imported
European timber• Particularly serves theconstruction industry (post &beam houses, 2x4 houses, etc.)• Supplies of European white woodand red wood

3000

2000

1000

02000

2001

2002

2003

2004

2005

2006

Stora Enso operates inall main forest zones

WS Sweden

WS Finland
WS RussiaWood Supply US

WS Baltic
WS Continental Europe

Canada, Port
Hawkesbury
LaosChina, Guangxi
Stora Enso Forestry

Brazil, Veracel (JV with Aracruz)
Brazil, Arapoti
Brazil, Rio Grande do Sul
Uruguay, Rio Negro

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Operations in the North

Othercountries

13.0
Finland0.1
0.2

CanadaSweden

11.4
2.7

2.9

US

The Baltic
Countries

7.1
Russia7.1
Continental
EuropeStora Enso’s wood flows (roundwood, chips andsawdust)
Total amounts of wood procured within these areas and delivered to ourown mills. In 2006, the total amount was 45.4 million m3 (solid under bark).

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Operations in the South

Veracel, Brazil
Planted area: 77 000 ha
Main species: Eucalyptus

Guangxi, China
Planted area: 44 000 ha
Main species: Eucalyptus

Laos
Trial plantations
Planned main species: Eucalyptus, acacia

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Rio Grande do Sul, Brazil
Planted area: 5 000 ha
Planned main species: Eucalyptus
Uruguay
Planted area: 4 600 ha
Planned main species: PineSustainable forestry

Sustainability – how we see it

1. A truly sustainable company has
beneficial long-term impacts onsociety
2. Sustainability makes goodbusiness sense– Customers like it– Stakeholders demand it

3. Sustainability has many
dimensions...
– Economic– Social– Environmental... all built on accountability.
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Wood – our most important raw material• Wood is renewable andrecyclable.
• About 80% of our fibre input iswood; about 20% is recycled
paper / board.
• Paper cannot be recycled
indefinitely– fresh fibre will always beneeded.
Sustainable forestry is a must!

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Our sustainable forestry principles• Whenever trees are cut, new ones
are planted– no net CO2 emissions into theatmosphere• Only legal and acceptable woodsources– 100% of traceability• Promoting forest certification– proportion of certified wood 55% in2006• Responsible plantation management– no conversion of rainforest toplantations
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Traceability –knowing every stepKnowing every step – 100% traceability

153 Dec 2007

Illegal Logging, Yokohama/PSAll our wood comes from legal andacceptable sources• Stora Enso uses traceability
tools to document the origin of
all wood and purchased pulp.
• Traceability tools:– Stora Enso’s own traceability
systems– Forest certification and chainof-custody systems• These tools ensure the legalityof loggings.
– Stora Enso does not accept
illegal wood.

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Legality of wood
Stora Enso’s position• Illegal logging = Wood harvestingin violation of national laws andstate laws
– We actively work to combat illegallogging wherever Stora Ensooperates.
– We seek to prevent any otherillegal activities related to wood
supply.
– We co-operate with the authorities
and other stakeholders in order toimprove the working environment.

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Stora Enso’s Traceability System

Traceability involves four main operational steps:18

3 Dec 2007

AContracts

B

Wood origin data registration and storage

CAuditingD

External audits

Illegal Logging, Yokohama/PS

Environmental clausesin every contract• Wood is procured and logged in accordance with locallegislation and instructions.
• No wood is obtained from protected areas, areas planned forprotection, or other areas covered by agreed restriction (unlesspurchases are in line with conservation regulations, goals andplans).
• Suppliers know and are able to verify the origin of all wood.
• Stora Enso has the right to audit suppliers, their logging areas,
and the systems used for collecting and storing data on theorigin of wood.

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Collecting and registering wood origin data

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Knowing every step – 100% traceability• Stora Enso’s objective is that all fibre sources should be fully
acceptable in terms of sustainability, and recognised as such by allstakeholders.
• The best way to do this is to ensure that the origin of the wood usedby the Group is fully traced and documented.
• Traceability systems are also one of the most effective ways tocombat illegal logging.

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Forest certification

What is Forest Certification?

• Verifies that a forest has
been managed in line withprinciples of sustainable
forest management.
• Verification is conducted by
an external certifier.
• Globally there are manydifferent forest certification
systems with slightly different
requirements.

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Only 9% of theWorld’s Forests
are Certified

Relevant forest certification systems
for Stora Enso
• FSC – The Forest Stewardship Council• PEFC – The Programme for the Endorsement ofForest Certification Schemes
Non-European systems endorsed by PEFC:• SFI – The Sustainable Forestry Initiative of theAmerican Forest & Paper Association• CSA Z809 – The Canadian Standards
Association's Programme for Sustainable
Forest Management• CERFLOR – The Brazilian Forest Certification
Program, Certificação Florestal
Other non-European systems:• ATFS – The American Tree Farm System

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Chain-of-custody

YYYT

Ä
TTA
VA
U
DKI
O
TI
EDForest
PEFC
FSC

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Woodprocurement
CoC

Illegal Logging, Yokohama/PS

Mill

Customers

CoC

CoC

Stora Enso promotes forest certification
wherever the Group operates• The Group aims to increase theproportions of wood comingfrom certified forests.
• Due to local variations inconditions, Stora Enso sees aneed for more than one forest
certification system.
The origin of all wood procured by
Stora Enso is always known inany case – regardless of whether
it is certified or uncertified.

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Certified and uncertified forest areas inEuropean countries
RussiaSwedenFinlandFranceSpain
Germany
Italy
Ukraine
NorwayPolandBelarusRomania
Austria
Bulgaria
Portugal
GreeceLatviaCzech Republic
United Kingdom
Estonia
Slovakia
Croatia
Lithuania
Hungary
Switzerland
Slovenia
Belgium
IrelandDenmark
The Netherlands

FSC
FSC+PEFC
PEFC
Uncertified

In some countries FSC and PEFC certificates may overlap.
Thus, the total area of uncertified forests may be larger thanshown in this chart.
05

10

15

20

25
Million ha.

Sources: PEFC, FSC – March-April 2006
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FSC and PEFC
Examples of differences

Founders• FSC: environmental organisations, indigenous
peoples’ organisations• PEFC: forest-owners, industrial organisations
Marketing• FSC: environmental organisations, e.g.
Greenpeace, WWF (The Global
Forest and Trade Network)• PEFC: private forest-owners’ organisations
Coverage• FSC: large forest holdings• PEFC: small, private family forest holdings
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Current challenges in forest certification

Russia• Amount of certified wood growing, butlacking chain-of-custody due to manysuppliers
Brazil• FSC criteria for plantations challenging• NGOs critical towards Veracel plantations
Finland• Current FSC criteria too strict(e.g. compared to Sweden)

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Knowing every step – 100% traceability• Forest Certification is an important tool but…
• Acceptable wood also comes from non-certified sources.
Traceability systems are in place to verify this!

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Conclusions

Conclusions• Depending on sustainable forestry
Sustainable forestry, which guarantees the continuing
availability of wood in the future, is the fundamental basis of all
Stora Enso’s operations.
• Maximising wood flows from certified forests
Forest certification promotes and communicates sustainable
forest management. Stora Enso supports forest certification
wherever the Group operates.
• Knowing every step – 100% traceability
Traceability involves verifying the origin of wood, tracking it all
the way from the forest to wherever it first enters Stora Enso’s
possession.

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Thank you!

From Russia…with Transparency
Tikhvin-Chalna Project 2004–2006

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Stora Enso • Axel Springer • The Random House Group UK • Russkiy Les • Shuyales • Tetra Pak • Time Inc.
WWW.TIKHVINPROJECT.RU
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Why is Russia important to Stora Enso?

• Growing market andinvestment potential• Globally over 50%
of boreal forests inRussia

Stora Enso’s woodprocurement area isclose to Baltic, Finnish
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Stora Enso in Russia• Strong long-term presence throughown organisation• Employees 2 000 – over 95% Russian• Wood procurement 7.3 Mm3 sub• EMAS, ISO 14001, ISO 9002 fortraceability through Wood SupplyFinland• FSC certification for all own cuttingvolumes by 2006
WSR HQ
District office
Harvesting company
Packaging board mill
Sawmill36

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Impilahti
ImatraSt. Petersburg

Russkiy LesNebolchi

Moscow
BalabanovoArzamas

Why Tikhvin Project?
To cover the whole supply chain• Acceptability of fibre is crucial– Integrate Stora Enso values and corporate social
responsibility– Balance environmental, social and economic responsibility• Transparent communication about sustainability
in Russian wood supply
To improve the level ofknowledge regarding Russia•Newspapers•Magazines•BooksRussian Forests

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Tikhvin-Chalna Project in Russia
Co-operation along the value chain• Joint project with customers andwood suppliers to further improvethe environmental and social
aspects of wood procurement inRussia.
• Four focus areas identified– legality of wood
– labour conditions– forest certification– community involvement• Partners– Russian logging company
Russkiy Les– Customers: Axel Springer,
Random House, Time Inc.,
Tetra Pak
• Critical reviews by– Transparency International– Karelian Research Centre38

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Benefits of the Tikhvin-Chalna Project
All partners improved sustainability practices• Partners– reviewed and upgraded their sustainability policies, guidelines,
supplier requirements and management systems• Logging companies– adopted new technical tools to ensure the legality of wood
– improved labour safety– Five of Stora Enso’s logging companies certified more than
400 000 hectares of lease areas according to FSC• Results and best practices are shared with other Russian wood
suppliers through supplier training• Read more at www.tikhvinproject.ru
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Thank you!

Third party verification of traceability –Chain-of-custody & Controlled Wood

YYYT

Ä
TTA
VAUDKIOTIEDForestPEFC
FSC

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Woodprocurement

MillCustomers

CoCCoCCoCFSC CW

FSC CW

FSC CW

Illegal Logging, Yokohama/PSFSC and PEFC
Examples of differences in Finland and Sweden
Actions compared

FSC (Finland)

PEFC (FFCS)

FSC (Sweden)

Valuable habitats

In the area to be certified,at least 5% of the forest
land shall be set aside forbiodiversity protection.

No area target(Areas defined by the Forest
Act shall be preserved)

In the area to be certified, atleast 5% of the forest land
shall be set aside forbiodiversity protection.

Restriction on
final felling

At least 10% of the forest
land shall be permanently
placed outside final felling
operations. This may
include the above
protected areas.

No area target

No area target

Buffer zones
alongwatercourses

A buffer zone of at least
20 metres shall bereserved adjacent towaters. Logging
operations in this zone
are prohibited and soil
surface may not be
broken.

The width of the buffer zone
3-5 metres. Logging can be
carried out, but soil surface
may not be broken.

The width of the buffer zone
not determined. Logging
operations are prohibited andsoil surface may not be
broken. In practise smallerarea than in Finland.

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Sustainable Harvest

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