ANNEX VISupplementary provisions
ANNEX VI TERMS OF REFERENCE FOR THE INDEPENDENT SYSTEM AUDIT I. Introduction In connection with the implementation of this Voluntary Partnership Agreement (VPA), the Union and Cameroon agree on the need for independent auditing in order to check the performance and efficiency of the FLEGT licensing scheme. II. Main tasks The Independent System Audit (ISA) will cover the following operations: 1. Auditing the Legality Assurance System (LAS) — verifying the conformity of the allocation process for the different types of title — Human resources and capacities — Award procedure for the different types of title — Verifying (based on sampling) the licences for the different types of title — Title registration system — Integrating the titles into the computer system administering forestry information (SIGIF II) — If necessary, verifying the registration of the guarantee in the Public Revenue department — Publishing licences — Evaluating the system for the issue of certificates of legality — Human resources and capacities — Procedure for issuing certificates of legality (application of the legality matrix) — Verifying (based on sampling) the certificates of legality issued — System for registering the certificates issued — Use and function of the SIGIF II — Field verification procedures (in the forest, en route and in the processing units) — Registering the reports following field verification procedures — Mechanism for recognising private certificates recognised on the basis of the principles, criteria and indicators applicable in Cameroon and verification of their conformity with the requirements of the legality matrix — Evaluating the traceability system — Human resources and capacities — Field control procedures (implementation of the national forestry and fauna control strategy) — Evaluating control activities (including any field verifications that may be required) — Registration at the individual stages of the traceability chain — Evaluating interaction between the individual systems: Computer system administering forestry information (SIGIF II), Monitoring offences and IT management of forestry disputes (SIGICOF), Customs IT system (SYDONIA) and Better monitoring of fiscal of return (MESURE) — Evaluating harvesting/reconciliation of information along the supply chain — Evaluating the FLEGT licensing scheme — Human resources and capacities — Licensing procedures — Use and function of SIGIF II, SIGICOF, SYDONIA and MESURE — Verifying (based on sampling) the FLEGT licences issued — FLEGT licence registration system — Production of statistics and other consolidated information. 2. Identifying deficiencies in the LAS and reporting them to the Joint Implementation Council. 3. Evaluating the effectiveness of any corrective measures taken to address failures identified in audit reports. 4. Evaluating the efficiency of the procedure established by the Union for release for free circulation of the products covered by the FLEGT scheme within the Union market, and specifically: — verification period, — institutional problems between the competent authorities and the licensing authority. 5. Evaluating the monitoring system for timber in transit. 6. Examining the joint application of both Parties at any other point during implementation of the LAS. III. Qualification required The ISA must be undertaken under the responsibility of an independent organisation with a proven track record in auditing and able to demonstrate a thorough knowledge of the forestry sector in Cameroon and/or the Congo Basin. It must also have the following characteristics: — not be directly involved in the management (logging, processing, timber trading, control) of the activities of the forestry sector in Cameroon. Service providers under contract with the Cameroon government with respect to forestry control are not eligible to carry out ISAs, — not have any direct or indirect interests with respect to one of the actors in the forestry sector of Cameroon or of the Union, — have an internal quality system in accordance with the ISO 17021 system or equivalent, — be able to demonstrate that its teams include experts in the fields of audits relating to forestry management, the processing industry, traceability systems and knowledge of the Union market, — be able to demonstrate that its teams include experts having sufficient experience in Cameroon and elsewhere in the Congo Basin, — the involvement of experts from the subregion is to be encouraged alongside the use of international experts. IV. Methodology The ISA must be undertaken using documented procedures. — The ISA auditor must act in accordance with a documented management system, policies and procedures which meet the requirements laid down in the internationally accepted good practice guide and made publicly available. — The ISA auditor will draw up an audit timetable based on the following frequency: 6 months following the effective establishment of the assurance scheme, thereafter once a year after the initial period, subject to confirmation that the schemes are functioning effectively. — The ISA will take place, if possible, during the first quarter of the year. — The documented procedures must serve as a guide for verifications based on the sampling of documents, registrations and operations. — All observations made during the audits must be documented. — The observations made during the audit will culminate in the definition of the systemic problems encountered. — The audit report must contain all relevant information on the programme and the findings made. An outline for the audit report and summary report must be provided in the documented procedures. — The ISA auditor sets up a system for receiving and dealing with complaints made against him. V. Sources of information The ISA must use all the available sources of information, in particular: 1. Reports of the permanent forestry control missions undertaken as part of the national forestry and fauna control strategy (SNCFF). 2. Information from the Legality Assurance System (LAS) and its four components: — verifying conformity of the title allocation process, — verifying the system for the issue of certificates of legality, — verifying the traceability system, — verifying the licensing system. 3. The other administrations: — customs, — tax administration (forestry revenue securing program – PSRF). 4. Information from external control mechanisms: — independent observation (IO) for controlling and monitoring forestry offences, which seeks to strengthen the control capacities of the Ministry responsible for forests and provides independent sources of information on the forestry sector, — Société Générale de Surveillance (GSS) [supervisory company], responsible for physical inspection of timber logs in order to secure customs revenue, — private voluntary legality and traceability certification systems, recognised under the PCIs (principles, criteria and indicators) applicable in Cameroon, and recognised sustainable management certificates (such as the ‘Forestry Stewardship Council’ [FSC] label), — other mechanisms for monitoring logging in Cameroon, which provide important information on illegal activities. 5. Field visits by third parties. 6. Information gathered from other organisations (specialist NGOs etc.). 7. Report from the competent Union authorities. 8. All other sources of information deemed useful by the ISA. 9. Published audits from other countries that have established a FLEGT licensing scheme. VI. Reports Every ISA report will include: (i) a complete report for the Parties containing all relevant information on the audit programme and on the operation of the Legality Assurance System and the issuing of FLEGT licences; (ii) a summary of the report, for the public, based on the full report and summarising the main conclusions and deficiencies of the system that have been identified. The ISA shall submit a preliminary report to the Joint Implementation Council through the Joint Monitoring Committee of the Agreement. The associated comments will be sent to the ISA for finalisation of the report. The ISA must provide all necessary information and responses to requests for clarification. The final report will be based on the preliminary report, to which will be added any clarification provided by either Party, and any responses by the ISA to this clarification. The ISA auditor will send the final report to the Council. If the Council gives a favourable opinion, Cameroon will publish the report. ISA reports and any corrective action required will be discussed by the Council. The ISA auditor is then notified of the corrective action to be taken. VII. Recruitment rules The ISA auditor will be selected in accordance with the rules in force in Cameroon. The Cameroon Government will conclude a contract with the ISA, following consultation with the Union, and based on documented and transparent selection procedures.