chain-of-custody (coc) for the printing, paper and

CHAIN-OF-CUSTODY (COC) FOR THE PRINTING, PAPER and other WOOD INDUSTRIES

2

CoC Webinar Meeting Agenda

� Who is SGS

� What is Chain-of-Custody?

� Where did this come from

� What are the standards available (FSC, PEFC)

� Why do this certification

� How do you achieve CoC certification

� What are the benefits for an organization.

OVERVIEW OF SGS

4

SGS Group Overview

� The World’s Leading Inspection, Verification, Testing and Certification Body

5

SGS Profile

North

America:84 offices

100 labs

LatinAmerica

90 offices30 labs

Europe

410 offices115 labs

128 offices

39 labsAfrica/

Middle East

Asia/Pacific

133 offices

54 labs

Originally founded in 1878 in Rouen as a French grain shipment

inspection house, SGS is today the world’s leading inspection, verification, testing and certification company.With more than 50,000 employees, SGS operates a network of over 1,000 offices and laboratories around the world.

SGS Headquarters in Geneva

6

SGS Systems & Services Certification

Just a few of our certification products…

� Quality Management Systems (ISO 9001:2000)

� Environmental Management Systems (ISO 14001:2004)

� Customized Audit Solutions

� Logistics (TAPA, FSR, C-TPAT)

� Food Safety Certification (HACCP, ISO 22000, BRC etc.)

� Six Sigma Deployment Certification™ (SS-8339)

� Forestry Certification (Forest Management and Chain-of-Custody)

7

SGS Experience in Chain-of-Custody

� SGS has over 3,000 Chain-of-Custody Certificates globally under FSC and PEFC

� In the FM (Forest Management) market, we have currently certified over 250 forests

� We have a network of over 100 CoC auditors and 35 FM auditors

� Integrated solutions to clients seeking flexible, multi-standard certifications in this rapidly-evolving market.

8


� Who is SGS

�What is Chain-of-Custody?� Where did this come from

� What are the standards available (FSC, SFI, PEFC)



� What re the benefits an organization

9

…and the product being sold

Link between the forest…

� Chain of Custody (CoC) is the process of tracking

and recording the possession and transfer of wood and fiber from a certified forest through the different stages of production — primary manufacturer, secondary manufacturer, wholesaler and to the retailer or end user.

� Chain of Custody Certification is required for every stage in the manufacture of a product.

What is Chain of Custody?

10

Certification of Forest Managementguarantees the quality of

the management

Certification of Chain of Custody

guarantees the origin of forest raw material

Certified Forest

Certified Product

SGS

11

Chain-of-Custody Example

Chain-of-Custody

Simple Example 2

Sawmill Manufacturer Packing Plant

Distributor

Retail Chain

Verified Source 1

Verified Source 2

Non-Verified Source 1

Non-Verified Source 2

12

Who Needs Chain of Custody?

� Chain of Custody is required of companies who manufacture or trade in wood or wood-based products and wish to sell those products with a certification claimusing the names and/or trademark of one of the recognized standards.

� A CoC certificate provides the required verification to ensure that products bearing a certification claims can be traced back to their point of origin in forests that have been managed to the standards of the respective system.

13

Chain of Custody Basics

� Chain of Custody involves three basic processes:

• Procurement of certified materials – including verification of appropriate sources of supply and record-keeping to ensure traceability.

• Processing and handling of certified materials – including storage, sorting, grading, manufacturing, and conversion.

• Sales of certified goods – including proper record-keeping and documentation of product claims to customers.

� Logos are important to determining the traceability of a product.

14


� Who is SGS


�Where did this originate from?

• The short answer is “need”





15

The facts

Deforestation of closed tropical rainforests could account for the loss of as many as

100 species a day.

Deforestation accounts for up to20 percent of the global greenhouse

gas emissions that contribute to global warming.

About 60 million indigenous people are almost wholly dependent on forests.

Each year about 13 million hectares of the world’s forests are lost due to

deforestation. One and one-half acres of rainforest are lost every second

Copyright Edward Parker Images

16

Illegal logging

� Example: Indonesia (UNEP report 02/2007)

• 88% of Indonesian timber felled illegally

• 2.1 Mio ha/year illegally logged forest, value of timber US$ 4 billion

• rate of illegal logging 30% higher than previously thought

• new predictions: 98% of lowland rainforests deforested by 2022 (10 years earlier than previously thought)

• within five years, likely disappearance of habitat for orangutans in Indonesia

17

Illegal Logging & the Associated Timber Trade

• Contribute to deforestation, causing loss of biodiversity and destruction of ecosystems

• Undermine responsible forest management –non-compliance with basic social and environmental standards

• Have serious economic and social implications for the poor and disadvantaged

• Create unfair competition for those companies that are behaving responsibly and are ready to play by fair rules

• Encourage waste and low productivity due to cheap raw material

• Undermine international security, being frequently associated with corruption, money laundering, organized crime, human rights abuses, violent conflicts, etc.

18

The Response From Environmental NGOsand Industry Was...

� In 1993 the FSC published a standard : 10 principles and criteria for forest stewardship.

� In 1999 in Europe, a large scale initiative is launched by the association of private owners (PEFC)

19


� Who is SGS



� What are the standards available (FSC, PEFC) & how they interrelate ..or not?




20

Main Forestry Accreditation Bodies and Standards

� FSC• One international FM standard – allowing for local adaptation

� PEFC• 23 different FM standards recognized across the world – Mostly

developed by private owners and industry – Includes SFI

� Generic CoC certificates are available. These are not recognized under

these accreditation scheme & are of limited use for product claims .

Chain-of-Custody Standards

22

Chain of Custody Standards

� FSC• Forest Stewardship Council

� PEFC• Programme for the Endorsement of Forest Certification

23

What is FSC?

� Chain of Custody is often sought under FSC (Forest Stewardship Council) accreditation (older and more well known)

• Promoted by advocacy groups like Sierra Club, Greenpeace, WWF and Friend of the Earth.

� Forests are evaluated against a set of standards that include universal principles and criteria and then, indicators to provide for local conditions and requirements

� More information on this program can be had at www.fsc.org

24

What is FSC? ContinuedWhat is FSC? ContinuedWhat is FSC? ContinuedWhat is FSC? Continued…………

Founded in 1993 in Toronto Founded in 1993 in Toronto Founded in 1993 in Toronto Founded in 1993 in Toronto (Canada) by 130 (Canada) by 130 (Canada) by 130 (Canada) by 130

representatives from around the representatives from around the representatives from around the representatives from around the world. world. world. world.

ENGOENGOENGOENGOThe FSC is an international The FSC is an international The FSC is an international The FSC is an international

nonnonnonnon----profit organization whoprofit organization whoprofit organization whoprofit organization who’’’’s s s s founding mission was to provide founding mission was to provide founding mission was to provide founding mission was to provide

a truly independent, a truly independent, a truly independent, a truly independent, international and credible international and credible international and credible international and credible

labelling scheme for timber and labelling scheme for timber and labelling scheme for timber and labelling scheme for timber and timber products.timber products.timber products.timber products.

The FSC has 2 main responsibilities:The FSC has 2 main responsibilities:The FSC has 2 main responsibilities:The FSC has 2 main responsibilities:

• Setting standardsSetting standardsSetting standardsSetting standards• Accrediting the Certification Accrediting the Certification Accrediting the Certification Accrediting the Certification

BodiesBodiesBodiesBodies

25

Who Supports the FSC?Who Supports the FSC?Who Supports the FSC?Who Supports the FSC?

Furthermore, FSC has the Furthermore, FSC has the Furthermore, FSC has the Furthermore, FSC has the support of a large and growing support of a large and growing support of a large and growing support of a large and growing

number of companies, who, under number of companies, who, under number of companies, who, under number of companies, who, under the auspices of the WWF Global the auspices of the WWF Global the auspices of the WWF Global the auspices of the WWF Global Forest and Trade Network have Forest and Trade Network have Forest and Trade Network have Forest and Trade Network have

joined 'buyers groups'. The joined 'buyers groups'. The joined 'buyers groups'. The joined 'buyers groups'. The members of such buyers groups members of such buyers groups members of such buyers groups members of such buyers groups have committed themselves to have committed themselves to have committed themselves to have committed themselves to

selling only independently selling only independently selling only independently selling only independently certified timber and timber certified timber and timber certified timber and timber certified timber and timber

products The FSC scheme is the products The FSC scheme is the products The FSC scheme is the products The FSC scheme is the preferred labelling scheme for preferred labelling scheme for preferred labelling scheme for preferred labelling scheme for

these buyers groups.these buyers groups.these buyers groups.these buyers groups.

Unprecedented alliance of Unprecedented alliance of Unprecedented alliance of Unprecedented alliance of major companies, NGOs major companies, NGOs major companies, NGOs major companies, NGOs

and a host of other and a host of other and a host of other and a host of other supporters around the worldsupporters around the worldsupporters around the worldsupporters around the world

ENGO SupportENGO SupportENGO SupportENGO Support

BuyerBuyerBuyerBuyer’’’’s Groupss Groupss Groupss Groups

AllianceAllianceAllianceAlliance

26

What is PEFC, and How Does it Relate to SFI?

� 23 standards recognized across the world – Mostly developed by private owners and industry� Includes SFI Forest Management

� The PEFC Council (Programme for the Endorsement of Forest Certification) is an independent, non-profit, non-governmental organization, founded in 1999.

� PEFC is a global umbrella organization for the assessment of and mutual recognition of national forest certification schemes.

� PEFC has in its membership 33 independent national forest certification systems of which 23 to date have been through a rigorous assessment process.

� These 23 systems account for more than 200 millionhectares of certified forests. PEFC the world's largest certification system.

� www.pefc.org

27


� Who is SGS




�Why do this certification

• Market reasons & why this IS NOT GOING to GO AWAY!



28

Why? Protection of You and Your Client’s Brand (Just Ask Victoria Secret)

Time Magazine –

Paper War: Environmentalists Take On Victoria's Secret for

Mailing More Than 1 Million Catalogs a Day

For Immediate Release: April 11th, 2006

San Francisco – A record-setting 225 protests and events were held against Victoria’s Secret today for its environmentally-devastating catalog business. The company mails more than a million catalogs a day, which contain little to no recycled content, and the paper that they use for these catalogs comes from some of the world’s last remaining Endangered Forests.

http://catalogcutdown.org

29

Why ? Part 2!

Dogwood Alliance Announces National Day of ActionTargeting OfficeMax:

Citizens and Activists Will Converge on Stores Across the Country on March 23, 2006

Having forced the world’s two largest office supply companies to sign

agreements promising not to buy paper made from trees felled in illegally

logged or endangered forests, activists are now turning up pressure on

OfficeMax. But the world’s third largest office supply company has so far

refused to sign a similar agreement.

30

Time is on Board!

� To protect forests, Time Inc. asks its paper suppliers to participate in a program called Certified Sustainable Forestry, which means working to make sure that the wood they use comes from “certified” sources. Time Inc. accepts several certification schemes that have been evaluated to ensure that they meet Time Inc.’s requirements.

� Time Inc. has recognized and encouraged all major certification bodies and set a goal that by the end of 2006, they wanted 80% of the paper they use to be from certified wood

31

Wal-Mart is on Board!

� “So we asked ourselves: What if we manufactured our bathroom tissue out of sustainably harvested wood? Over the last two years, our supplier has worked closely with the Forestry Stewardship Council, which is the stamp of approval for sustainable forestry. Now 45 percent of the fiber used to make our bathroom tissue is sourced from a FSC certified plantation in Brazil. Eventually, we want to use only sustainable timber and pulp-based products to manufacture our brands.”

� Remarks as Prepared for H. Lee Scott, Jr.CEO and President of Wal-Mart Stores, Inc.

“Sustainability 360: Doing Good, Better, Together”Lecture to the Prince of Wales’s Business & the Environment ProgramFebruary 1, 2007

32

DELL is on Board!

� Effective October 2004.

� "Dell Forest Products Stewardship Model":"Dell prefers paper suppliers that use a significant mix of fiber certified to sustainable forestry standards “

� Dell adopts a preference for certified products over non-certified products in general and will work to increase purchases of FSC (or other certification schemes that develop equivalent or higher standards) products for its paper purchases.

� Dell’s long-term goal is to have all of its forest product suppliers certified to FSC or similarly recognizedstandards.

33

Some Apparently are Coming on Board Later……!

August 13, 2007

� At the Sears/Lands' End storefront on State Street in Chicago today, nearly 40 activists and one costumedcaribou converged to send a message about catalogs: don't put Endangered Forests in our mailboxes.

� Between its several brands the company sends out 420 million catalogs a year--that's enough to wrap the Sears Tower 5 times a day.

� The colorful demonstration made quite a spectacle, and passersby quickly learned about the company's offenses and what they as consumers could do to help.

34


� Who is SGS






• Labeling of FSC or PEFC


35

Reiterating the Chain of Custody Basics

� Chain of Custody involves three basic processes:

• Procurement of certified materials – including verification of appropriate sources of supply and record-keeping to ensure traceability.

• Processing and handling of certified materials – including storage, sorting, grading, manufacturing, and conversion.

• Sales of certified goods – including proper record-keeping and documentation of product claims to customers.

� Logos are important to determining the traceability of a product.

36

What is Involved in Attaining Chain of Custody?

� For most companies, CoC certification is a simple process that can be easily managed in a short period of time.

� The heart of the process is basic inventory control

procedures. In most cases, in-place business procedures (SOP’s) are sufficient, with slight modifications, to meet the requirements of the standards.

� For large organizations with formalized operating procedures –CoC implementation usually requires minor adaptation of existingprocedures and training of key personnel.

� For smaller organizations with informal operating procedures –CoC implementation usually requires drafting of simple, written procedures to cover the standard requirements, training of key personnel, and the development of some customized record-keeping systems.

37

The Audit & Certificate

� Audit comprises…• Application completed by client

• Pre-Assessment (optional)

• Main Assessment and reporting

• Surveillances and reporting

� Certificate is for 5 Years

• Certificate belongs to certification body

• User has right to use logo and to mark products

� Certificate can be suspended if:• CARs not closed out

• Improper use of certificate or trademarks

• Surveillance cancelled

� Certificate can be withdrawn if:• reasons for suspension not rectified

• financial obligations not met

38

What does a Chain of Custody Auditor Look For?What does a Chain of Custody Auditor Look For?What does a Chain of Custody Auditor Look For?What does a Chain of Custody Auditor Look For?

The key points that auditors check are:The key points that auditors check are:The key points that auditors check are:The key points that auditors check are:

That the raw material being purchased is certified and covered by a valid Chain of Custody

certificate.

That any use of the relevant trademark (which includes use of the logo and

name) complies with the rules of trademark usage.

That adequate records are maintained relating

to purchase, production and sale of products.

That all points where mixing between certified and uncertified material might occur (critical control

points) have been identified.

That an appropriate, written COC procedure (set of work instructions) has been implemented and staff

trained to maintain it.

39

A Typical Audit

� Opening Meeting

• an introduction of the audit process for your staff

� Desk Review

• an overview of your company and your prepared system with key staff

• Review of your written CoC procedures, training records, document examples, record-keeping systems, etc.

� Tour of the Plant

• The auditor will inspect your system from end to end – generally beginning with the receiving dock, proceeding through material handling and processing operation, and ending with shipping.

• Staff will be interviewed to verify system implementation.

� Purchasing, Sales, Marketing, Trademark Use

• Staff in these areas will be interviewed and systems reviewed.

� Closing Meeting

• The auditor will summarize and present the audit findings & recommendation.

40

Logo Usage for FSC

� FSC is a privately-owned trademark. For a company to use the trademark correctly when describing their products to their customers or stakeholders, the respective programs (owners of the trademarks) require conformance to the CoC standard, verified by a certificate from SGS.

� VERY complicated set of rules for usage.

FSC-SECR-0020

The FSC trademark The FSC trademark The FSC trademark The FSC trademark identifies forests which have identifies forests which have identifies forests which have identifies forests which have been certified in accordance been certified in accordance been certified in accordance been certified in accordance with the rules of the Forest with the rules of the Forest with the rules of the Forest with the rules of the Forest

Stewardship Council.Stewardship Council.Stewardship Council.Stewardship Council.

41

A Great GREEN Logo!

� Certified FSC printers obtain all the graphic elements as well as the guidelines

� The specific questions about graphics are directed to SGS

� Each label must have:• The FSC logo

• The statement on well-managed forests

• The certification code ( ex. SGS-COC-0123)

• The copyright statement

42

PEFC/SFI Certification & Logo Usage

� To be certified to PEFC (Programme for the Endorsement of Forest Certification) and use the trademarks, a few steps are required – all fairly simple:

• Adapt your CoC system to conform to the requirements of the PEFC Annex 4 CoC standard. You’ll find it is very similar to the FSC standard in most ways.

• Contract SGS to review your new procedures and write an additional audit report. SGS can use the existing on-site audit trail; supplemented by an off-site review of your updated system.

• Assuming a clean audit, SGS will issue a PEFC CoC certificate

• Will need to sign a licensing contract with the appropriate PEFC affiliate, where such exist, else PEFC’s international office.

43

Conditions of the Chain of Custody Certificate

� Certificate belongs to SGS

� SGS must be notified of changes to system

� Surveillance every year

� Re-assessment every 5 years

� Applicant has right to appeal certification decisions

� User has right to use logo and to mark products

44


� Who is SGS






� What are the benefits for our organization

45

Benefits of Getting CoC Certification

� To demonstrate to customers, stakeholders, and investors that wood is coming from sustainable, well-managed forests.

� To minimize commercial and environmental risks

� Protection of you and your customers brand

� Ability to sell paper and wood products to new potential customers that demand CoC

� Key to stay and play in the game

� IT’S THE RIGHT THING TO DO!

46

Why Select SGS?

� Chain of Custody experience

• SGS is an acknowledged industry leader with an established and mature CoC business that has issued over 3,000 certificates worldwide.

• We provide integrated solutions to clients seeking flexible, multi-standard certifications in this rapidly-evolving market.

• Integrations include Chain of Custody certifications to multiple standards, as well as project integrations with other system certifications including ISO 14001, ISO 9000, OHSAS 18001 and others.

47

SGS Forestry Team and Contacts

We have offices in most countries from where you can be serviced directly

Visit us on the web at WWW.SGS.COM/forestry for more information

48

Thank you - Any questions?

chain-of-custody (coc) for the printing, paper and

Documents