SGS TIMBER LEGALITY AND TRACEABILITY VERIFICATION PROGRAMME
Bruce Telfer
SGS Forest Monitoring Services, Asia/Pacific Region

SGS has designed a service geared to assist both forestry and wood processing companies achieve market
recognition for their efforts to improve forest management standards under their control and at assisting companies
trading in “legal” timber products. The service is called Timber Legality and Traceability Verification (TLTV). TLTV is anindependent verification service designed to ensure that timber has been legally acquired/produced and sold by aparticular forestry company. Legally verified wood products are traced throughout the supply chain. This voluntary
approach is of particular relevance for companies operating in countries without an internationally credible legality
verification system required by buyers and importing countries.

BACKGROUND
The Need for TLTV
There is a growing awareness and widespread
concern over increased illegal timber trade activities,
mainly due to active campaigning by environmental
NGOs. It is clear that a need exists for a credible
independent third-party verification service. In fact,organized timber markets and individual buyers areincreasingly requiring a credible proof of legal origin andcompliance for timber products, especially fromcountries with weak government control.
The variety of initiatives designed to address thisissue is confusing for customers. They would like to beable to rely on experienced and reputable (independentthird-party) verification/certification company to audit
their wood production and tracking information system.
In an effort to bar illegal timber, various Governments
are enacting legislation and procurement policies thatincorporate specific requirements to prove the legality oftimber. Parallel to these governmental efforts, industry
associations and civil society groups are also working
on mechanisms to ensure that products purchased are“legal forest products”.
In a number of countries, SGS is contracted to run
national schemes that are geared to legality, whether ona mandatory or voluntary basis. Complementary tothese schemes, TLTV is a service that is offered toindividual companies outside any national scheme – i.e.
for situations where no such scheme exists. TLTV
provides companies with an opportunity to obtain
voluntary verification of operations in accordance with apre-defined set of requirements. This demonstrates torelevant stakeholders that a company participating in theTLTV service has a commitment to eliminating both theproduction of and trade in illegal forest products.
Buyers in importing countries can assist theirproducers and suppliers to enter an SGS TLTV service
that is tailor made to meet the requirements of theircustomers and other stakeholders e.g. Government andenvironmental NGOs.
GENERAL OVERVIEW OF VERIFICATION

Party responsible for issuing verification
The TLTV service was developed and is run bySociété Générale de Surveillance (SGS) of Geneva,
Switzerland. SGS group is the world’s largest
verification, testing and certification company. With its
headquarters in Geneva and 48,000 staff world-wide, it
operates a network of 1180 offices and 321 laboratories
in 145 countries. The Forestry Monitoring Programme ofSGS offers services to governments, companies andinternational institutions aimed at revenue protection,
trade facilitation, legal and sustainable use of naturalresources.
Outline of verification process
The scope of TLTV activities includes verification of
the legal origin of forest products and the legal
compliance of a particular company’s forest operations,its timber processing activities and its products.
Preliminary work is needed to adjust the legal
standard checklist to suit local laws and regulations.
Then the audit team conducts the verification through aseries of field and documentary checks.
The
company’s tracking system is also audited to test thetraceability of wood products from the port back tostump in legitimate forest concessions. An audit teamchecks compliance against defined and externallyverifiable criteria and compiles a verification report. A“TLTV-Legal Production” Statement is issued after
positive evaluation of the forestry company. This SGS
Statement is intended to be a public document which acompany can provide to all interested stakeholders
SCHEME TO CHECK FOR LEGALITY AT THE TIME
OF LOGGING
Definition of legality
Prior to the verification audit a set of requirements(e.g. laws, regulations, codes of practice) to be retainedfor implementation of a TLTV service must be agreed
with the applicant. It is likely to include environmental,forest, tax and customs legislation, depending on thecompany’s scope of activities.

Generic principles have been developed by SGS
for defining ‘Legality’. These are basic requirementsthat should be covered to ensure a consistent approach.
However the precise definition to be used will be basedon the laws of the country in which the company isoperating.

where there is a significant risk of verified materials
becoming mixed with unverified materials, under either
normal or abnormal operating conditions.

The generic SGS principles are:
1. Legal right of the company to conductbusiness.
2. Rights of workers and local communities.
3. Approval for forestry activities.
4. Payment of all forest related charges andtaxes.
5. Forest Harvesting Regulations.
6. Marketing and Timber processing Regulations.
7. Registrations maintained by the company.

The company’s tracking system is audited at a site
visit which examines production records and monitoringprocedures. The audit scope must cover theChain-of-Custody from where the company takes
ownership (start-point) to where ownership istransferred (end-point). The scope should be a clear
description of the verified inputs (verified raw material orproduct), ownership or physical possession status,transportation, processing, manufacturing, labelling andsale or dispatch covered by the evaluation.

The definition of legality that these principles form
can be modified over time, its scope can be broadenedor it can, for example, incorporate further social andenvironmental requirements.

Records and traceability will be checked under theTLTV-Legal Production program for companies with noon-site processing sites.

In order to make clear which laws are being
complied with, all SGS TLTV Statements include a list of
the principles and criteria used for verification.

Companies with on-site processing sites underTLTV-Legal Production must be TLTV-CoC verified andget a TLTV-LP statement that lists the processing sites.

Procedures for retaining and verifying the evidence

Companies processing, manufacturing, trading or
selling timber from TLTV-Legal Production must beTLTV-CoC verified and issued a TLTV-CoC Statement tosupport their claims that they sell ‘legal timber’.

TLTV activities include:
1.
2.
3.
4.
5.

verification of documentation, including
production permits and declarations,verification of log tracking from the forest to theprocessing mill or point of log sale,verification of timber product tracking from thepoint of primary processing to the final use orpoint of sale,field inspections, including checks on logging
areas, truck loads and sawmills to ensure theaccuracy of documented records,
verification of payment of royalties and otherduties.

The results of the verification activities arepresented to the company with an independent
third-party audit/verification report, a verification
schedule, and the verification statement itself, including
terms and conditions of use.
All verification procedures are managed andexecuted by the third party verification company, SGS
under SGS General Conditions of Services that ensure
reliability and international creditability.
CHAIN OF CUSTODYTLTV requirementsThe objective of these requirements is to ensure thatany product bearing a TLTV label or sold as
TLTV-verified is produced from material that originatesfrom legal timber production.
Chain-of-custody controls must therefore be
implemented at all critical control points in the process
under evaluation. Critical control points are those

Chain of custody verification

FUTURE TASK AND PERSPECTIVES
Future perspectives
Sustainability must remain as the ultimate objectiveof forest management and verification of legal timber
under TLTV can be regarded as a first step tocertification of sustainable forest management, forexample under FSC or PEFC. An ideal combination isprobably when forest certification is undertaken after
thorough verification of legality. This is an approach
widely supported by parties involved in the policy
dialogue regarding certification, particularly in countries
where law enforcement and governance is weak, andwhere the technical capacity of companies to achievecertification under a scheme such as the FSC is alimiting factor.