ANNEX VISupplementary provisions
ANNEX VI TERMS OF REFERENCE FOR THE INDEPENDENT AUDIT OF THE FLEGT SYSTEM (SIA) I. Tasks The main tasks to be carried out in the independent audit, through documentary checks and on-site inspections, will be: — to audit the legality verification system (LVS) and its operation by assessing use of the legality matrix and controls, the traceability system and the system for issuing licences, — to verify the use of licences during the process of entering the Union market, — to identify any loopholes or failures in the LVS and report findings to the Joint Agreement Implementation Committee of the Agreement (JIC), — to evaluate the effectiveness of any corrective measures taken to address failures identified in audit reports. II. Qualification required The Independent Audit is assigned to an independent firm of auditors having proven ability in carrying out audits and providing evidence of a thorough knowledge of the forestry sector in Congo and/or the Congo Basin. It must also have the following characteristics: — not be directly involved in the management, processing or trade of timber or its derived products or the monitoring of forestry sector activities in Congo. Service providers under contract with the Congolese government with respect to forestry control are not eligible to carry out SIAs, — 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, the exporting of timber and international markets – including the Union market, — be able to demonstrate that its teams include experts having sufficient experience in Congo and/or elsewhere in the Congo Basin. The involvement of experts from the subregion is to be encouraged alongside the use of international experts, — not be in an administrative or financial position that might put the firm of auditors or experts named in a position where there is a conflict of interests. III. Methodology The Independent Audit is carried out according to documentary and on-site procedures: — The Independent Auditor of the System acts in accordance with this Agreement and has a documented management structure, policies and a procedural manual drawn up in accordance with ISO standards 17021, 19011 or equivalent, which are made available for public inspection. The Auditor’s Procedural Manual and its annexes, which serve as a guide for documentary and on-site verification (based on samples), will be submitted to the JIC for approval. — The Independent Auditor of the System prepares a timetable of audit operations over the course of 3 years, based on a frequency to be decided in consultation with the JIC. In the first two years, the frequency must be three or more. In year three, the frequency may be reduced but must be accompanied by spot checks. The frequency and thoroughness of the checks to be carried out may be reviewed at meetings of the JIC responsible for examining audit reports, according to established findings. — The Independent Auditor of the System sets up a system for receiving and dealing with complaints made against it. The system of managing complaints is approved by the JIC, including the guiding principles of reports on complaints and action taken. This system has to ensure the secure receipt of complaints, guaranteeing the confidentiality of the party making it. — The Independent Auditor of the System provides an analysis of the systemic problems encountered on the basis of monitoring carried out. — The Independent Auditor of the System has a duty of confidentiality in respect of data gathered from various structures it has visited while carrying out its audit. — The audit report contains all useful information on the programme and the findings made. An outline of the audit report and summary is given in the Procedural Manual. — The Independent Auditor of the System reports its findings using the mechanism set up by the JIC. IV. Sources of information To carry out its functions, the Independent Auditor of the System uses all sources of information available (inspection reports, annual reports, other documentation, interviews, computer databases, site visits, etc.) and, in particular, has access to documents and databases that it deems relevant to the following departments and to accredited bodies under the LVS and its constituent parts (verification of legality, verification of the traceability system, verification of the system for granting licences): 1. All departments of the Ministry of Forest Economy (DGEF, DVRF, IGEF, SCPFE, DDEF, teams and control stations, etc., in Congolese territory and, if applicable, in neighbouring countries) responsible for the permanent implementation of forestry control provisions carried out under the framework of the National Control Strategy (to be drawn up by the MEF before implementation of the VPA). 2. Those involved in monitoring or checking forest exploitation: — approved private bodies and systems for the voluntary certification of legality, traceability and sustainable management, — structure of the national civil society, based on the approach adopted in the Independent Forest Monitoring project carried out between 2007 and 2009 by Resource Extraction Monitoring and Forest Monitor. This will be responsible for carrying out independent monitoring of the application of the law and forestry regulations with support, if required, of international NGOs over a minimum period of 3 years (cf. Annex IX). 3. Other ministry departments such as the Ministry of Trade, the Ministry for the Economy, Finances and Budget (Customs, Tax, etc.), the Ministry of Transport and the Ministry of Employment (ONEMO, CNSS). 4. Bodies responsible for verifying legality and bodies responsible for the independent audit of the FLEGT system in neighbouring countries and their sources of information. 5. Joint Implementation Committees for Voluntary Partnership Agreements between the Union and neighbouring countries. 6. Other sources: — forestry companies, — unions, — university, — local authorities, — local communities, — national and international NGOs, — forestry and environmental sector projects carried out in Congo, — parties making complaints if not anonymous, — any other source deemed to be relevant by the Independent Auditor. 7. Competent authorities of the Union The independent auditor of the system can question staff involved in the legality verification system or accredited bodies in this audit and gather witness evidence it deems necessary to carry out the audit, without prejudice to the handling of complaints that may be brought to its attention regarding the implementation or operation of the legality verification system and/or its accredited bodies. The Parties will ensure that the independent auditor of the system has access in the respective territories of the two Parties to any information required in order to carry out its functions. V. Reports The System Independent Audit report contains all relevant information on the audit programme and on the operation of the legality verification system and the issuing of FLEGT licences. The report includes in its annex all of the complaints received, the replies given and the action to be taken. This report will be published by the JIC. The Independent Auditor of the System will submit a preliminary report to each of the two Parties within one month from the end of the on-site inspection. An oral presentation of the audit report to the JIC may be scheduled. Comments made by the Parties will be passed on to the Independent Auditor of the System for finalisation of the report by a deadline agreed between the independent auditor of the system and the JIC, but no longer than one month after receipt of the report. The Independent Auditor of the System has to provide any information required and any clarification requested by a deadline agreed between the independent auditor of the system and the JIC, but no longer than 15 days after receipt of the comments of the two Parties. 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 SIA to this clarification. The JIC will publish the final report. On the basis of the audit report and on the basis of other evidence in its possession and, in particular, any criticisms or complaints regarding the operation of the legality verification system, the JIC identifies the corrective action to be taken, if any, and ensures that it is carried out. The minutes of meetings of the JIC regarding the report of the Independent Auditor of the System will be published. VI. Institutional arrangement Those taking part in the JIC process select, via an appropriate and transparent call for tenders, the applicant best qualified to carry out the Independent Audit of the System. The selection process involves looking at the capabilities of the applicants in terms of carrying out audits, their capabilities in relation to the forestry sector in Congo or the Congo Basin and the international credibility of the applicant, particularly in terms of independence. The latter then signs with the government, which allows it to operate transparently and effectively, a three-year contract that may be extended, subject to approval by the JIC. If applicable, a new call for tenders will be launched. The independent auditor must have or must set up an office (throughout the contractual period) in Brazzaville. This office must be open throughout the contractual period, serving as a point of contact for the parties involved and organising specific checks by auditors. It will be used by the auditors during the periods specified. SIA reports and any corrective action required are discussed by the JIC. The SIA is then notified of the corrective action to be taken. If applicable, the procedural manual is amended.