INTERPAL

1
INTERPAL 6 REPORT

• Western Pallet Association
• January 21-23

2
AGENDA

1. The European Union Debarking  issue for imported
   Wood Packaging
2. Phase In Requirement for Wood  Packaging Imports
   for NAFTA
3. Movement of recycled/repaired  wood packaging ˆ
   third world producers
4. Petition for changes to ISPM 15 April 2007
5. EURO Pallet Requirement - Non  Standard Penalized
   Monetarily
6. Movement of Products from Pacific Rim - how is it
   going to impact the US/CAN pallet industry?
7. Satisfying your need for good  Workers

3
EU Debarking Issue

• 1. Lobby Issue by the Plastics Industry
• - IPPC Program to move product worldwide opened
  the door
• 2. Lobbying EU Council by FEFPEB was a success
  and Debarking Issue born

4
IPPC-ISPM 15 Standard

• Debarking statement in the IPPC-ISPM 15 Document
• Subject to technical justification, countries
  may require that imported wood packaging material
  subjected to an approved measure be made from
  debarked wood and display a mark as shown in
  Annex II.

5
Debarking Issue

• EU demanding DB-HT - CONCERN
• Proof of pest introduction to HT debarked
  material needed
• IFQRG International Forestry Quarantine
  Research Group advises UN on scientific issues
  related to forestry quarantine and the spread of
  wood pests.
• Rome experiments to prove or disprove that
  pieces of bark as small as 1 square on ISPM 15
  SWP could re-infest, harvest and hide quarantined
  pests.
• Re-infest could never happen pests not
  interested. this is what we have been told by
  scientists yes or no!

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IFQRG Findings

• Statement
• information collected by Australia indicated
  that 0.5 of ISPM 15 marked material inspected at
  the point of entry was infested by organisms of
  phytosanitary concern.

7
IFQRG Finding at meeting

• No clear answers
• More questions than answers
• 1. Size of bark required to interest pests
• 2. Moisture content
• 3. HT vs. KD with moisture 20 or less
• 4. Real world conditions
• 5. Is this about pest issues or Quality demands

8
New Zealand Australia Issue

• Recent trip discussed the debarking issue with NZ
  and Australian government official wood
  packaging companies.
• 1. Already practices no-bark
• 2. Extreme measures to meet EU requirements,
  their largest consumer.

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The cost

• Lumber used for export wood packaging will
  increase at least two grades, subjecting our
  customers to increased costs.
• low grade 3 common, 3 will be utilized for
  domestic use USA/CANADA or disappear
• KD 20 of less moisture will be a requirement
  therefore all timber will be KD/HT, even
  hardwood. I have been told that if we KD
  hardwood, the timber will check and crack, twist
  and split and will become unworkable and unwanted
  by wood packaging companies.

10
The Cost

• Owners of HT chambers, which maintain the
  moisture and kill quarantined pests, will be
  forced to re-invest and add the KD option.

11
Testing Must be controlled

• World Pallet Council
• Wood Pallet/Packaging Associations must be part
  of the testing
• Attend and become a component of all committees
  controlling the results.
• Need to control scientists from issuing
  statements and results that are from sources that
  has little or no controls.

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Result timeline

• IFQRG chair Dr. Eric
• Allen of Canada has asked
• the CWPCA to assist in
• the study.
• - request a non-controlled study
• of SWP. no lab testing
• until SWP put through a
• designated life cycle.

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If we lose this battle

• Mills must stop severe optimization of the small
  log.
• It will be the mill who must supply the
  packaging industry with certified debarked
  material.
• Wood Packaging companies, unless you utilize
  saws and use cants, cannot control debarked
  material. Costly
• We cannot be expected to breakout lumber lifts
  and extract those pieces that meet the new ISPM
  15 debarking policy.
• If we lose, the price of lumber will increase
  30-40.

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Timeline

• Saving Grace
• Dr. Allen, if all studies and testing is
  completed on time the results will be posted in a
  document in April 2009.
• Jan 16-17 EU voted to no ruling until Dec. 31,
  2008.
• we have time to react and fight back but what if
  HT will re-infest?