KEEP IT LEGAL

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• KEEP IT LEGAL
• A WWF/IKEA forest partnership project

Rod Taylor WWF Asia Pacific Forests
Coordinator The Forest Dialogue, Hong Kong,
March 2005
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• Aim of Keep It Legal Project
• A critical mass of companies manufacturing or
  purchasing products in China adopt compatible
  best practices for keeping illegally harvested
  wood out of their supply chains.

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• Main product
• A keep it legal manual that gives practical
  guidance to companies on how to reduce the risk
  of illegally-sourced wood entering their supply
  chains.

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• First Challenge Defining legal wood

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• A comprehensive approach to determining the
  legality of wood and paper products could cover
• Many subjects beyond forestry e.g. laws
  relating to taxes, labour, health, corporations,
  transport, customs, pollution, and money
  laundering
• Many ingredients beyond wood e.g. paints,
  lacquers, other materials, and packaging
• Many phases of production harvesting, hauling,
  milling, shipping, manufacturing, and trading
• The process by which harvesting rights were
  obtained, including adherence to planning laws,
  impact assessment requirements, tendering
  procedures, contractual fairness provisions,
  and absence of suspicion of corruption or
  collusion.

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• Solution needed An expedited stakeholder
  process to agree when wood in a product can be
  regarded as legal.
• Towards a definition of legal wood -
• the wood is harvested in compliance with laws
  governing the acquisition, management and
  harvesting of forest resources
• harvesting charges are duly paid
• If relevant, the wood is traded in compliance
  with laws related to CITES, and
• the wood is not smuggled or otherwise illegally
  traded across any borders .

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• Third challenge What to do when the law is bad
  or applied unjustly

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Should responsible companies encourage law
enforcement or legal compliance where

• The law extinguishes traditional rights. E.g.,
  where logging concessions or protected areas
  ignore traditional rights
• The law is bad for the forest E.g. outdated
  silvicultural prescriptions
• Punishment is severe. E.g. in Indonesia there is
  talk of introducing the death penalty for illegal
  loggers
• The concession allocation system is corrupt E.g.
  where legal permits are handed out to cronies and
  bribe payers.
• The perpetrators are poor and the logging is low
  impact E.g. bicycle logging by local communities

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• Approaches where legal doesnt equate with
  desirable
• Purchasing policies and investment screens that
  position legal compliance within the broader
  context of corporate social responsibility
• Private sector support for law reform advocacy
• See legal compliance as one-strand of sustainable
  forest management

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An example The IKEA-way - products must be
manufactured under acceptable working conditions
by suppliers that care for the environment.
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• Second challenge How much checking should a
  company do?

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Issues

• Many companies have no idea where the wood in
  their products comes from. Should companies
  assume they are buying legal wood if the source
  is unknown?
• Systems to identify the source of wood across
  numerous supply chains require time to implement
  effectively. How quickly should big trading
  companies be expected to clean up their supply
  chains?
• Many developing country producers lack credible
  systems to verify their products are legal.
  Should responsible companies boycott high-risk
  countries or stay engaged while legal producers
  develop systems to distinguish their products
  from illegal wood?
• Legality auditing systems can be costly, and may
  also be offset by benefits such as higher forest
  revenues and improved forest management. What
  level of investment in legal compliance auditing
  yields the greatest net benefit to stakeholders
  in the forest sector.

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• Solution needed risk assessment tools so degree
  of checking can match level of risk

Where there is a high risk that the wood in a
product could have been sourced through illegal
logging or trading, a company buying or supplying
the product should verify the wood is legal.

• This would require -
• Confirmation by a third party auditor that the
  wood was legally harvested and traded
• an unbroken chain of custody that can be traced
  from the company back to the original source of
  the wood,
• Confirmation by a third party auditor of the
  integrity of the chain of custody documentation
  and control points.

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Solution available stepwise approaches to
responsible procurement
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THE STAIRCASE MODEL
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Certified
Solution Stepwise approaches to responsible
purchasing
Verified legal
Progressing
Legal right to harvest
Known sources