International Seminar in Tokyo for
Tackling Illegal Logging, 2007

China’s Efforts
for Timber Verification
Lu Wenming
Professor and Chief Expert
Chinese Academy of Forestry

Contentz 1. General Description
z 2. Timber Certificate Scheme
z 3. Response to Procurement

Policies of Japanz 4. Future Prespective
z 5. Conclusoon

Illegal Logging / Illegal Tradez Rampant in a global context– Indonesia and Cambodia in Asia
– Russia in Europe– Brazil in Latin America– Papua New Guinea in Oceania– Democratic Republic of Congo in Africa
z Serious environmental problems– Mass destruction of virgin, natural and secondaryforest– Threatened habitats of rare and endangered species– Rapid loss of biodiversity– Many othersz Also economic and social problems

1. General DescriptionWorld’s leading timber traderz World’s leading timber importer due to NFPP

– 134 m RWE in 2005
– Russia (temperate softwood) and Indonesia (tropicalhardwood) where illegal logging is still rampant
z World’s leading timber products exporter– Furniture and plywood etc– US, Japan and Europe

What are we aiming?
z Sustainable forestry development --- sole fundamental

forestry development strategy in a long run
z Actively tackle illegal logging and illegal tradez Very very rare case of illegal timber tradeWhat do we face?
z Somequite small cases of mis-conducts of forest
harvestingz Doesnot fully
regulations

complywithrelevantlaws

z Can not regard them as illegal logging– Logging exceeding the harvesting quota– Logging not in the approved stand– Logging without any forest harvesting certificate– Activities damaging forest resources– Stolen logging and severe deforestation

andInternational cooperationz Efforts to actively tackle mis-conduct of forest

harvesting– by improving domestic policy and regulation

monitoring system– strengthening international cooperationz A member of North East Asia FLEG Processz A member of South East Asia FLEG Ministerial

Conference Process

2. Timber Certificate Scheme

Objectivesz China has had a very effective forest resources

monitoring system for several decades, aiming:– To protect and utilize forest resources and ecologicalenvironment– To strengthen the monitoring management for forest

conservation, forest harvesting, timber production,
timber marketing and timber consumption etc– To actively extend technology for saving the timberand substituting the timberz So as to accelerate the development of resource saving

and environmentally friendly society

Timber Certificate Schemez Very effective document (certificate, document,invoice) management systemz Forest harvesting, timber transportation, marketing(processing)z Logging: Annual allowance cut (AAC) quota, forest

harvesting plan and forest harvest certificate (timberconcession), as well as code of forest harvesting
and reasonable timber making

Forest authority checks:z AACquota and forest harvesting certificate andverification of timber origin (also through stamp labeling(seal) and forest harvesting certificate and document)z Timbertransportation certificate and buying invoice(also through timber transportation certificate anddocument)z In

some places, also timber selling certificate anddocument
processingin

timbermarketingstageandtimbercertificateanddocumentintimberprocessing stage when these regulations are applicableConstraints and suggestionsz No any further custody management after the timber

is sold out, such as for timber processing (someplaces has), product packaging, product loading andunloading, product transportation, productmarketing and product consumption etc
z Eventually impossible to identify the origin of timber

just from the timber productsz Timber tracing system for whole stages of chain-of-

custody is suggested by the academia

3. Response to Procurement
Policies of Japan

Encouraging approachz Tackling illegal logging through verify the legality andsustainability of timberz Notjust the procurement policy itself, but is acomprehensive system with supporting mechanismz A number of countries such as Indonesia, Malaysia,

Papua New Guinea and Russia actively responded thepolicy

Very unfortunately, China…
z Has not at the moment a complete timber tracing andmonitoring management systemz Timbercertificate scheme just cover the custody

processingz Impossible to identify or verify the origin of timber justfrom the final timber productsz Not applicable to China at the moment

Neverthelessz China and Japan are important timber trade partners
z China needs to think about the actions in respond to

the procurement policies of Japanz Not only for trade market accessz But also for the responsible and sustainable forestmanagementz SFM

is the primary and final objective of forestry

development

4. Future Perspective

What is China facingz Challenges in timber monitoring system along withall chain of custodyz Due to technical, financial and other constraints
z A lot of efforts are being initiated by the government,

the academia, and the industry to improve suchsystem

Efforts by the governmentForest law enforcementz Improve forest laws and regulationsz Enhance forest law enforcementz Strengthen the capacity of forest law enforcement

expertisez Forest law enforcement was one of the major twotasks of the forestry sector across the country in2004

Forest certificationz Resolution to Accelerate Forestry Development– To actively carry out forest certification work and try

to be in line with international practices as soon aspossiblez SFA: initiating National Forest Certification Scheme ofChina– CAF: developed the National Standard for Forest
Certification in China– CAF: developing National Standard for COC
Certification in China– CAF: establishing independent and third party
forest certification bodyLinkage to Japan’s Policies
z NationalForest Certification Scheme of China iscurrently aimed at domestic objectives to promotesustainable forest managementz Quiteenough for meeting the requirement ofprocurement policies of Japan in terms of legality oftimber origin– Regardless whether China’s scheme could be or not

be recognized by Japanz Different schemes have different focus of standards,

but legality is the key and common standard

FSC forest certificationz As of December 31, 2006

– 5 forest management units, totaling 442,500 ha andcovering both natural forests and plantation– 221 timber processing companies including Hong

Kong, Macau and Taiwan

Efforts by the academia

Efforts by the academiaz Chinese Academy of Forestry (CAF):
z Initiating government green timber procurement policyz Initiating timber tracing system– To verify legality of timber origin– Tackle mis-conducts of forest harvesting– To promote responsible and sustainable forest

managementz These two initiatives are related each otherz Likely funded by British Government

Government green timber
procurement policyz All the government organizationsz All government-funded institutionsz Only buy the timber products listed in the government

endorsed timber products and timber producing
companiesz Both legality and sustainability (Chinese scheme orother schemes such as FSC or PEFC)

Two kinds of government
procurement policies
z Both prove to be quite effective– One is for general commodity items– The

other one is for environmentally soundmanufacturing process, relevance of timber sector

Green procurement policyz Issued on October 24, 2006 by MOF and SEPA

– Partially effective January 1, 2007 for national andprovincial levels– Fully effective January 1, 2008 for all levels
z Green products - environmentally sound manufacturing– Includes 856 products in 14 categories by 81
companies– Covers 17 products by 9 wood-based panel
companies, 24 products by 10 wooden flooring
companies and 6 products by 5 furniture companies
z Not yet verified legality or sustainability
z Strong signal for further extension

Timber tracing systemz Improve “timber certificate scheme”
z Identify the legality and/or sustainability of the timber

productsz A challenging task to well develop such timber tracing

systemz Shall

improve the timber monitoring management
systemz Encouraging the good conduct of forest harvesting andresponsible forest managementz Tackling any mis-conduct of forest harvestingz Also linking procurement policies of JapanEfforts by the industry

China Timber Distribution
Associationz Initiating a pilot campaign of “Credibility Assessment

System for Timber Sector in China”– Qualified Suppliers Assessment System for Timber
Sector in China– Company Credibility Assessment System for Timber
Sector in Chinaz Regulate codes of conduct for the timber sector (bothfor processing and marketing through government
behavior)– Through State-owned Assets Supervision andAdministration Commission of the State Council toadopt such system as a government procurement
policyCredibility systemz Contains a lot of assessment indexes
z Classifies into 4 gradesz Marks with A, B, C and D
z Values up to 100
z 6 fields for assessment:– (1) qualification, (2) management and competition,(3) management capacity; (4) economic debtpaying capacity, (5) credibility record; and (6)social responsibility

Social responsibility assessmentz Currently

notincludetimberlegalityorsustainability
z Likely to include as forest certification (especiallyCOC label) is likely to be incorporated into thesystem and also increase the weight of points
z Will also be an effective tool for verify the legality orsustainability of timber originz Have very encouraging future perspectives

5. Conclusion

Procurement policies of Japanz Current irrelevance as it is not applicable to Chinaz Promising future perspective as China’s:– Government green timber procurement policy– Timber tracing system for legality– Forest certification schemes for both legality andsustainability– Timber company credibility assessment system– And likely some more othersz Will surely improve the verification of legality andsustainability of timber origin
z And will very easily link to the procurement polices ofJapan, and any other countries around the world

Let’s cooperate each otherz Both China and Japanz And all other timber trade partnersz Work and cooperate together to make full use of allkind of approaches, schemes, mechanisms etc topromoteresponsible(legality)

andsustainable(sustainability) forest management and internationaltimber tradeThank you!