Just more red tape?

TRADA Technology principal consultant Elizabeth Turner discusses the impact the EU Timber Regulation will have on timber specification and supply

Summary
• The EU Timber Regulation comes into force in March 2013.
• It applies to timber and timber-based products manufactured within the EU and/or imported into Member states from outside the EU.
• Defra is responsible for the implementation of the EUTR in the UK.
• The regulation does not specifically give a green light to certified timber.

Forests are used for much more than timber structures and building components. However, the construction industry and the timber supply chain have a key role to play in ensuring that only timber from legal and sustainable sources is used in all their activities.

To support the work being done on reducing illegal harvesting of timber – such as the United Nations Reducing Emissions from Deforestation and Forest Degradation (REDD) programme and other projects run by national governments and NGOs – the European Commission has chosen a legislative route: the EU Timber Regulation (EUTR). This comes into force in March 2013 and applies to timber and timber-based products manufactured both within the EU and imported into Member States from outside the EU.

It covers a wide range of products, such as sawn timber, panel boards and prefabricated buildings, as well as fuel wood, paper and furniture. The only exception is recycled timber/timber products. Within the EUTR, the various players in the timber supply chain have different roles. Those who ‘first place’ on the market, be that the forester in the EU who sells felled timber, or the company that direct sources plywood from the Far East, are required to carry out due diligence. Within the regulation they are known as ‘operators’. Those who trade in timber, known as ‘traders’, are simply required to ensure records are kept for five years.

EUTR in practice

So what does this mean? For traders it’s likely to be straightforward. Records of purchases and sales will be on a database and kept for five years for taxation purposes. As such, existing ways of working should be easily adapted for compliance with the EUTR.

In the UK, importers, for example, could be both operator and trader for different product ranges. For operators, the position is slightly trickier. The due diligence process is in two parts. The first calls for specific information about the product. Although it is likely that much of that required would be provided as part of usual business practices – for example, invoices which will set out number of units, product type, source company and so on – it is essential that documentation indicating compliance with forestry legislation in the country of source is included. The second part of the process is a risk assessment, examining the risk that the timber might have come from an illegal source. The risk assessment should include consideration of a number of factors: Have the local laws governing timber harvest been followed? How prevalent is illegal harvesting in that country/region? Is there illegal harvesting of specific tree species?

Supply chain

The complexity of the supply chain should also be considered – too many middlemen might constitute more risks. While the purchase of sawn timber baulks from a single sawmill is reasonably straightforward, importing wooden chairs, where components are from several sources, is much more complex. Finally, incidence of any armed conflict must be taken into account.

If, based on examination of all this information, the operator assesses the risk as ‘negligible’, then the timber can be placed on the market. If not, further ‘risk mitigation’ measures must be taken. These are required effectively to minimise the risk that timber is from an illegal source and the regulation says they should be “reasonable and proportionate”. Clearly this is subjective and should be on a case-by-case basis. However, operators must show the enforcing authorities that mitigation measures were taken. For example, further documentation may be gathered and decisions may be made about the complexity of the supply chain or even if a particular supplier is a reliable source of legal timber.

All this information should be recorded and kept for examination by the UK authority enforcing the legislation. Defra is responsible for implementation of the EUTR in the UK and decisions will be made soon as to which government agency will be responsible for enforcement.

Clearly, for some SMEs and possibly larger companies, this process will be seen as impossible for their organisation and so the EUTR has made provision for the creation of monitoring organisations. These will set up and provide a functional due diligence system for use by companies that don’t have the resources to set one up themselves. Monitoring organisations will also be responsible for ensuring correct use of their due diligence system and for reporting misuse of it to the authorities in the relevant Member State. In addition, it’s expected that various organisations will develop tools to assist in the processes to allow for easier implementation.

Certified timber

The question many have asked is, where does certified timber fit into the EUTR?

The regulation does not specifically give a green light to certified timber. Only timber and timber products covered by valid FLEGT or CITES licences are considered to have been legally harvested for the purposes of the EUTR.

However, the use of certification schemes is extremely valuable in the risk assessment and it is likely that timber and products that are from certified sources will be low risk. That will particularly be the case for schemes that cover forest management practices and chain of custody (CoC) certification. The added benefit of these schemes is that, as well as proving legality, they also provide assurance that timber has been harvested sustainably and ensure its traceability. However, certification schemes are only a part of the due diligence process and operators must ensure that they follow the EUTR’s requirements in full. Caution should be exercised with CoC certification to ensure that the timber is subject to that CoC certification and that the chain remains unbroken. Many suppliers/manufacturers do have CoC certification, but not all products they sell or make are covered by it.

European Commission and Defra guidance will help pave the way for the introduction of the regulation in 2013. There are already several EU schemes requiring those who sign up to them to follow certain rules for responsible timber purchasing (for example, the Timber Trade Federation’s Responsible Purchasing Policy) and it’s expected that they will be adapted to comply with the EUTR – ie they will become due diligence systems.

The UK government’s Central Point of Expertise on Timber Procurement (CPET) provides detailed advice and information on how public sector buyers and suppliers can meet its timber buying procedures in practice.

Those who first place timber/timber-based products on the EU markets will need to think about developing supply chains that are easy to examine and offer a traceable source

of legal timber and the EUTR will offer confidence to the specifier and contractor that the timber they purchase has been legally sourced. Legally harvested timber has often also been sourced sustainably, with all the benefits that offers in contributing to climate change mitigation, as well as supporting social, political and economic betterment.

So although the EUTR may mean more red tape in the short term, in the long term it will underpin good forest management and that has to be good for timber, good for construction and good for future generations.