ANNEX VIIISupplementary provisions
ANNEX VIII CRITERIA FOR EVALUATION OF THE LEGALITY ASSURANCE SYSTEM (LAS) This Agreement provides for the implementation of a Legality Assurance System (LAS) intended to guarantee that all timber and derived products specified in the Agreement and exported from Cameroon to the Union are produced entirely legally. The LAS should include: — a definition of legally produced timber that lists the laws that must be complied with in order for a licence to be issued, — control of the supply chain to track timber from the forest to the point of export, — verification of compliance with all elements of the definition of legality and control of the supply chain, — the procedures for issuing certificates of legality and FLEGT licences, and finally, — the independent audit to ensure that the system is working as intended. The LAS will be subject to an independent technical evaluation before the licensing scheme becomes fully operational; the Terms of Reference will be jointly agreed between the Parties, via the Joint Monitoring Committee (JMC) for the Agreement. These evaluation criteria describe what the LAS is expected to produce and will provide the basis for the Terms of Reference for the evaluation. The evaluation will be aimed in particular at: — reviewing the system description with special focus on any revisions made after the Agreement was signed, and — examining the functioning of the system in practice. I. Definition of legality Legally produced timber needs to be defined on the basis of the laws applicable in Cameroon. The definition used must be unambiguous, objectively verifiable and operationally workable and, as a minimum, include those laws which cover: Harvesting rights: granting of legal rights to harvest timber within legally gazetted boundaries. Forestry operations: compliance with legal requirements regarding forest management including compliance with relevant environmental and employment legislation. Fees and taxes: compliance with legal requirements concerning taxes and fees directly related to timber harvesting and harvesting rights. Other users: respect for other parties’ legal tenure or rights of use of land and resources that may be affected by timber harvesting rights, where such other rights exist. Trade and customs: compliance with legal requirements for trade and customs procedures. Is it clear what legal instrument underpins each element of the definition? Are criteria and indicators that can be used to test compliance with each element of the definition specified? Are the criteria/indicators clear, objective and operationally workable? Do the indicators and criteria clearly identify the roles and responsibilities of the various parties and does verification assess performance of all relevant parties? Does the definition of legality include the main areas of existing law outlined above? If not: why were certain areas of law left out of the definition? In drawing up the definition, did the parties concerned consider all the main areas of applicable law? Does the legality control system incorporate the main legal provisions identified through prior discussion between the various parties involved? Has the definition of legality and the legality control matrix been amended since the Agreement was concluded? Have indicators and criteria been defined to ensure verification of these changes? II. Control of the supply chain Systems to control the supply chain must provide credible assurance that timber products can be traced throughout the supply chain from harvesting or point of import to the point of export. It will not always be necessary to maintain physical traceability for a log, log load or timber product from the point of export back to the forest of origin, but it is always needed between the forest and the first point of mixing (e.g. a timber terminal or a processing facility). II a. Logging rights There is clear delineation of areas where forest resource rights have been allocated and the holders of those rights have been identified. Does the control system ensure that only timber originating from a forest area with valid and permissible rights of use enters the supply chain? Does the control system ensure that enterprises carrying out harvesting operations have been issued appropriate logging rights for the forest areas concerned? Have the procedures for issuing logging rights and information on issued logging rights and their holders been published? II b. Systems for controlling the supply chain There are effective mechanisms for tracing timber throughout the supply chain from harvesting to the point of export. The approach for identifying timber may vary, ranging from the use of labels for individual items to reliance on documentation accompanying a load or batch. The selected method must reflect the type and value of the timber and the risk of contamination with illegal or unverified timber. Are all the supply chain alternatives identified and described in the control system? Are all stages in the supply chain identified and described in the control system? Are methods defined and documented to (a) identify the product origin and (b) prevent mixing with timber from unknown sources in the subsequent stages of the supply chain? — timber in the forest, — transport, — interim storage, — arrival at the primary processing facility, — processing facilities, — interim storage, — transport, — arrival at point of export? Which organisations are in charge of controlling the timber flows? Do they have adequate human and other resources for carrying out the control activities? Is there a protocol for verifying the results of the control procedures set up and applied? Are the application procedures clearly defined and communicated to all interested parties? II c. Quantities There are robust and effective mechanisms for measuring and recording the quantities of timber or timber products at each stage of the supply chain, including reliable and accurate pre-harvest estimates of the volume of standing timber in each harvesting site. Does the control system produce quantitative data of inputs and outputs at the following stages of the supply chain? — standing timber, — logs in the forest, — transported and stored timber, — arrival at the primary processing facility, — control within the processing facilities, — arrival at point of export? Which organisations are responsible for feeding the quantitative data into the control system? How are these organisations linked? Are the staff of these organisations given standard training in data management? What is the quality of the controlled data? If different organisations are responsible, how is it ensured that control performance and data management are conducted in the same way in each organisation? II d. Data gathering All data is recorded in a way which makes it possible to reconcile it with the prior and subsequent links in the chain in a timely manner. Reliable reconciliation is carried out for the entire supply chain. Is all quantitative data recorded in a way which makes it possible to quickly reconcile quantities with the prior and subsequent stages in the supply chain? Are there methods to assess coherence between inputs of raw materials and outputs of processed products at sawmills and other plants? Is reliable reconciliation by individual item or by batch of timber products possible throughout the supply chain? What information systems and technologies are applied for storing and reconciliation of data and for recording it? Are there robust systems in place for securing the data? How is unauthorised access to the system avoided (system security)? How is the viability of the security systems guaranteed? Which organisation is responsible for data reconciliation? Does it have adequate human and other resources for carrying out the data management activities? What information on the supply chain control is made publicly available? How can the interested parties access this information? II e. Mixing of legally verified timber with timber approved elsewhere If mixing of logs or timber from verified legal sources with logs or timber from other sources is allowed, there are sufficient controls in place to exclude timber from unknown sources or which was harvested without legal logging rights. Does the control system allow verified timber to be mixed with other approved timber (e.g.: with imported timber or timber originating from a forest area where clear legal harvesting rights have been granted, but that is still not covered by the full verification process)? What control measures are applied in these cases? For example, do controls ensure that verified output volumes declared do not exceed total verified input volumes at each stage? What are the conditions for introducing into the supply chain confiscated timber sold at public auction, and is there a viable verification procedure? II f. Imported timber products There are adequate controls to ensure that imported timber and derived products have been legally imported. How is the legality of imports of timber and derived products demonstrated? What evidence is required to demonstrate that imported products originate from trees harvested legally in a third country? Does the LAS identify imported timber and timber products throughout the supply chain? Where imported timber is used, can the country of origin be identified on the FLEGT licence, including that of components in composite products? Does the use of barcodes on imported timber guarantee that only forestry products that have been legally logged and processed will be exported with a FLEGT licence? (For example, what happens to imported timber after the initial processing stage, how is the mark applied, how will the mark be altered after the subsequent processing stages)? III. Verification Verification provides adequate checks to ensure the legality of timber. It must be sufficiently robust and effective to ensure that any non-compliance with requirements, either in the forest or within the supply chain, is identified and corrective action is taken in good time. III a. Organisation Verification is carried out by a government, a third-party organisation or some combination of these, which has adequate resources, management systems and skilled and trained personnel, as well as robust and effective mechanisms to control conflicts of interest. Has the government appointed a body or bodies to undertake the verification tasks? Is the mandate (including associated responsibilities) clear and in the public domain? Are the responsibilities clearly allocated and are the required competences associated with the responsibilities clearly defined; how are they implemented? How do the departments responsible for verifying legality guarantee the highest possible level of rationalised collaboration and data management between the administrations involved in forestry sector control (MINEP – MINFI etc.)? Does the verification body have adequate resources for carrying out the verification of the legality definition and the systems for controlling the timber supply chain? Does the verification body have a fully documented management system that: — ensures adequate competence/experience for the personnel of the verification body, — applies internal control/supervision, — includes mechanisms to control conflicts of interest, — ensures transparency of the system, — defines and applies verification methodology, — uses a publicly accessible complaints management system? III b. Verification against the definition of legality There is a clear definition setting out what has to be verified. The verification methodology is documented and ensures that the process is systematic, transparent, evidence-based, carried out at regular intervals and covers everything included within the definition. Does the verification methodology cover all elements of the legality definition and include tests of compliance with all specified indicators? Does verification require: — checks of documentation, operating records and field operations (including spot checks), — collection of information from external interested parties, — recording of verification activities that allows checking by internal auditors and the independent monitor? Are institutional roles and responsibilities clearly defined and applied? Are the verification results against the definition of legality made publicly available? How can the interested parties access this information? III c. Verification of systems for controlling the supply chain There is a clear scope setting out what has to be verified, which covers the entire supply chain from harvesting to export. The verification methodology is documented and ensures that the process is systematic, transparent, evidence-based, carried out at regular intervals and covers everything included within the scope, and includes regular and timely reconciliation of data between each stage in the chain. Does the verification methodology fully cover checks on supply chain controls? Is this clearly spelt out in verification methodology? What evidence is there to demonstrate application of verification of supply chain controls? Are institutional roles and responsibilities clearly defined and applied? Are the verification results on supply chain control made publicly available? How can the interested parties access this information? III d. Non-compliance There is an effective and functioning mechanism for requiring and enforcing appropriate corrective action where offences are identified. Does the verification system define the above requirement? Have mechanisms been developed for handling non-compliance? Are these applied in practice? Are there adequate records available on the offences identified and corrective action taken? Is the effectiveness of corrective actions evaluated? What information on identified breaches goes into the public domain? IV. Licensing Cameroon has assigned a licensing authority overall responsibility for issuing FLEGT licences. FLEGT licences are issued on the basis of either individual shipments or forestry entities. IV a. Organisation What body is assigned responsibility for issuing FLEGT licences? Are the roles of the licensing authority and its personnel with regard to issuing of FLEGT licences clearly defined and publicly available? Are the competence requirements defined and internal controls established for the personnel of the licensing authority? Does the licensing authority have adequate resources for carrying out its task? IV b. Issuing of FLEGT licences Does the licensing authority have documented procedures for issuing licences? Are these publicly available, including any fees payable? What evidence is there that these procedures are properly applied in practice? Are there adequate records available on licences issued and refused? Do the records clearly show the evidence on which the issuing of licences is based? IV c. Consignment-based licences Is the licensing based on an individual consignment? Has the legality of an export consignment been demonstrated through government verification and traceability systems? Are the requirements for issuing licences clearly specified and available to the exporter? Do exporters fully understand the criteria for the issue of FLEGT licences? What information on issued licences goes into the public domain? V. Instructions on the independent system audit The Independent System Audit (ISA) is a function that is independent of Cameroon’s forestry sector regulatory bodies. It aims to provide credibility to the FLEGT licensing scheme by checking that all aspects of the LAS are operating as intended. V a. Institutional arrangements Designation of authority: Cameroon has formally authorised the ISA function and allows it to operate in an effective and transparent way. Independence from other elements of the LAS: There is a clear separation between organisations and individuals that are involved in management or regulation of the forest resource and those involved in the independent audit. — Does the government have documented requirements for the independence of the independent auditor? — Do provisions state that organisations or individuals from both Parties having a commercial interest or an institutional role in the forestry sector are not eligible to perform the independent auditor function? Designation of the independent auditor: The independent auditor was appointed through a transparent mechanism and there are clear and publicly-available rules regarding his actions. — Has the government made the terms of reference for the independent auditor publicly available? — Has the government documented the procedures for appointing the independent auditor and made them publicly available? Establishing a mechanism for handling complaints: there is a mechanism for handling complaints and disputes that arise from the independent audit. This mechanism makes it possible to deal with any complaint relating to the operation of the licensing scheme. — Is there a documented mechanism for handling complaints that is available to all interested parties? — Is it clear how complaints are received, documented, escalated (where necessary) and responded to? V b. The independent auditor Organisational and technical requirements: the independent auditor is independent of the other components of the Legality Assurance System and operates in accordance with a documented management structure, policies and procedures that meet internationally accepted best practice. — Does the independent auditor operate in accordance with a documented management system that meets the requirements of ISO Guide 17021 or similar standards? Methodology of the audit: the methodology of the independent audit is evidence-based and verifications are carried out at specific and frequent intervals. — Does the methodology specify basing all findings on objective evidence concerning the functioning of the LAS? — Does the methodology of the independent audit specify the maximum intervals at which each element of the LAS will be verified? Scope of the audit: The independent auditor operates according to terms of reference that clearly specify what has to be audited and that cover all agreed requirements for the issuing of FLEGT licences. — Does the methodology of the independent audit cover all elements of the LAS and specify the main tests of effectiveness? Reporting requirements: The ISA auditor shall submit a preliminary report to the Joint Implementation Council (Council) through the Joint Monitoring Committee (JMC) of the Agreement. The reports of the independent auditor and any corrective action required will be discussed in the JMC. — Do the independent auditor’s terms of reference specify the reporting requirements and reporting intervals? — Do the terms of reference of the auditor and the procedures of the JMC describe the publication process for audit results? VI. The Evaluation criteria of the system established in the Union to accept FLEGT licences The FLEGT Regulation and its application measures lay down procedures for establishing the FLEGT licensing scheme, including procedures to enable verification that the Cameroon timber products intended for release for free circulation within the Union are properly covered by a FLEGT licence. These procedures also require the Member States of the Union to designate a competent authority to take on this responsibility. Since these are new measures introduced specifically to implement the FLEGT scheme, the evaluation will examine the degree of preparedness of the Union as regards verification of the FLEGT licences. Have the competent authorities been identified in each Member State of the Union? Has this information been made public? Have the procedures for processing the FLEGT licences been established in every Member State of the Union? Have these procedures been made public? Have appropriate legislation and regulations been established where deemed necessary by the Member States of the Union? Have the means of communication between the competent authorities and the customs authorities been determined? Have procedures been established to enable the Union, or any person or body designated by the European Union, to gain access to relevant documents and data and to avoid any problems arising that could hamper the proper functioning of the FLEGT licensing scheme? Have procedures been established to enable the independent auditor to gain access to all relevant documents and data? Have reporting methods been negotiated between the Member States of the Union and the European Commission? Have publication procedures for these reports been drawn up and adopted? Do procedures cover cases where goods accompanied by a FLEGT licence are not accepted? Have procedures been established to report any contradictions in the licences and to deal with offences? Has the information relating to fines in various offence scenarios been published?