ANNEX VIISupplementary provisions
ANNEX VII ASSESSMENT CRITERIA FOR THE OPERATIONAL LEGALITY ASSURANCE SYSTEM IN THE CAR The Voluntary Partnership Agreement (APV-FLEGT) between the Union and the CAR provides for the development and implementation of a Legality Assurance System (LAS) to ensure that all timber and derived products specified in the Agreement and exported from the CAR to the Union have been legally produced. The LAS must comprise the following elements: a definition of legally produced timber that states the laws and texts that must be complied with for a licence to be issued; supply chain controls to track timber from the forest to the point of export; verification of compliance with all elements of the legality definition and control of the supply chain; licensing procedures and issuing of FLEGT licences; and finally, independent auditing to ensure that the system is working as planned. Union expectations with regard to the LAS are given in a series of briefing notes prepared by a group of experts from the European Commission ( 1 ) . ASSESSMENT CRITERIA 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 interested Parties and the Joint Implementation Committee. These assessment 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 aim to: (i) review the system description with special focus on any revisions made after the FLEGT-VPA was signed; and (ii) examine the functioning of the system in practice. PART 1: LEGALITY DEFINITION Legally produced timber needs to be defined on the basis of the existing laws and regulations of the CAR. The definition used must be unambiguous, objectively verifiable and operationally workable. In addition, it must, as a minimum, include the laws which cover the following thematic areas: Harvesting rights: granting of legal rights to harvest the 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 over 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. (a) Are references to the legislative or regulatory texts that underpin each element of the definition clearly identified? (b) Are criteria and indicators that can be used to test compliance with each element or principle of the definition specified? (c) Are the criteria/indicators clear, objective and operationally workable? (d) Do the indicators and criteria clearly identify the roles and responsibilities of the various actors and does verification assess the actions of all relevant actors? (e) Does the legality definition include the main areas of existing law outlined above? If not, why were certain areas of law left out of the definition? (f) Did the parties concerned consider all the main areas of applicable law in the country (including or not the thematic areas presented above)? (g) Does the legality assurance system incorporate the main legal provisions identified during prior discussions between the various stakeholders involved, in particular those noted in Annex IX? (h) Have the legality definition and the legality enforcement matrix been amended since the FLEGT-VPA was concluded? Have indicators and criteria been defined to ensure verification of these changes? PART 2: 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 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). 2.1. Use rights: there is clear delineation of areas where forest resource rights have been allocated and the holders of those rights have been identified. (a) Does the control system ensure that only timber originating from a forest area with valid and permissible use rights enters the supply chain? (b) Does the control system ensure that companies carrying out harvesting operations have been issued with appropriate use rights for the forest areas concerned? (c) Are the procedures for issuing use rights and information on issued use rights and their holders available in the public domain? 2.2. Systems for supply chain control: there are effective mechanisms for tracing timber throughout the supply chain from point of harvest to 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 should reflect the type and value of timber and the risk of contamination with illegal or unverified timber. (a) Are all the supply chain alternatives identified and described in the control system? (b) Are all stages in the supply chain identified and described in the control system? (c) Are methods defined and documented to (a) identify the product’s 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. (d) Which organisations are responsible for monitoring the timber flows? Do they have adequate human and other resources to carry out the control activities? 2.3. 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 cutting area. Does the control system produce quantitative data on inputs and outputs at the following stages of the supply chain? — standing timber, — logs in the forest, — transported and stored timber, — arrival at the factory, — between production lines/processing facilities, — exit from production lines/processing facilities, — exit from factory, — arrival at point of export. (a) Which organisations are responsible for feeding the quantitative data into the control system and are the corresponding procedures documented? What is the relevance of the data that is checked? (b) Does the control system enable quantitative data to be recorded and reconciled quickly with prior and subsequent stages in the supply chain? (c) Are the staff in charge of control system management adequately trained? (d) What information is made publicly available on supply chain control? How can interested parties access this information? 2.4. Mixing legally verified timber with other approved timber: 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 timber which was harvested without legal harvesting rights. (a) 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 with clear legal harvesting rights but still not covered by the LAS described in this Agreement)? (b) What control measures are applied in these cases? For example, do controls ensure that verified declared output does not exceed total verified input at each stage? (c) Does the control system enable watertight segregation of verified timber from other timber of illegal origin or timber harvested without legal logging rights? 2.5. Imported timber products: there are adequate controls to ensure that imported timber and derived products have been legally imported. (a) How is the legality of imports of timber and derived products demonstrated (does the system ensure that the timber was legally imported)? (b) How is the traceability of timber and derived products ensured? Are these timber and derived products identified throughout the whole supply chain? (c) What evidence is required to demonstrate that imported products originate from trees harvested legally in a third country? (d) Where imported timber is used, can the country of origin be identified on the FLEGT licence, including that of components in composite products? PART 3: 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 taken in good time. 3.1. Organisation Verification is carried out by a government, a third-party organisation or some combination of these. This body will have adequate resources, management systems and skilled and trained personnel, as well as robust and effective mechanisms to monitor conflicts of interest. (a) 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? (b) Does the verification body have adequate resources to verify the legality definition and systems for monitoring the timber supply chain? (c) Does the verification body have a fully documented management system that: — has sufficient resources to undertake on-site checks as often as required to ensure the credibility of the system? — ensures that its staff have the necessary skills and experience to implement effective verification? — applies internal control/supervision? — includes mechanisms to monitor conflicts of interest? — ensures the transparency of the system? — defines and applies verification methodology? 3.2. Verification against the legality definition 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. (a) Does the verification methodology cover all elements of the legality definition and include tests of compliance with all specified indicators? (b) 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 auditor? (c) Are institutional roles and responsibilities clearly defined and applied? (d) Are the results of verification against the legality definition made publicly available? How can interested parties access this information? 3.3. Verification of supply chain control systems 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. (a) Are institutional roles and responsibilities clearly defined and applied? (b) Does the verification methodology fully cover checks on supply chain controls? Is this clearly spelt out in the verification methodology? (c) Is there a clear distinction in the LAS between products coming from sources (forest concessions) included in the legality definition and those coming from sources not included? (d) What evidence is there to demonstrate enforcement of supply chain control verification? (e) Data reconciliation: Which organisation is responsible for data reconciliation? Does it have adequate human and other resources to carry out the data management activities? Are there methods to assess consistency between standing timber and timber entering the factory, and then at export point? Are there methods to assess consistency 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 data recording and for data storage and reconciliation? Are there robust systems in place for making the data secure? Are the verification results on supply chain control made publicly available? How can interested parties access this information? 3.4. Non-compliance There is an effective and functioning mechanism for requiring and enforcing appropriate corrective action when infringements are identified. (a) Does the verification system define the above requirement? (b) Is there available documentation specifying the methods for handling non-compliances? (c) Have mechanisms been developed for handling non-compliances? Are these applied in practice? (d) Are there adequate records available on the infringements identified and corrective actions taken? Is the effectiveness of corrective actions evaluated? Is monitoring of corrective actions provided? (e) What information on identified infringements goes into the public domain? PART 4: AUTHORISATION Each shipment is accompanied by a FLEGT licence. The CAR is responsible for issuing licences. 4.1. Organisation (a) What body is assigned responsibility for issuing FLEGT licences? (b) Are the roles of the licensing authority and its personnel clearly defined and publicly available? (c) Are the required skills defined and internal controls established for the licensing authority staff? (d) Does the licensing authority have adequate resources to carry out its task? 4.2. Issuing licences (a) Does the licensing authority have documented procedures for issuing licences? Are these publicly available, including any fees payable? (b) Is there documented proof that these procedures are properly applied in practice? (c) 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? 4.3. Licences issued (a) Is the licensing based on individual shipments? (b) Has the legality of an export shipment been demonstrated through government verification and traceability systems? (c) Are the requirements for issuing licences clearly specified and available to the exporter and other parties concerned? (d) What information on issued licences goes into the public domain? PART 5: INDEPENDENT SYSTEM AUDIT The Independent System Audit (ISA) is a function that is independent of the CAR’s forest sector regulatory bodies. It aims to provide credibility to the FLEGT licensing scheme by checking that all aspects of the CAR’s LAS are operating as intended. 5.1. Institutional arrangements 5.1.1. Designation of the authority The CAR has formally authorised the ISA function and allows it to operate in an effective and transparent way. 5.1.2. 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. (a) Does the government have documented independence requirements for the ISA? (b) Do provisions state that organisations or individuals with a commercial interest or an institutional role in the CAR’s forest sector are not eligible to perform the role of ISA? 5.1.3. Appointment of the independent auditor The independent auditor is appointed through a transparent mechanism and there are clear and publicly available rules regarding its actions. (a) Has the government made the Terms of Reference for the independent auditor publicly available? (b) Has the government documented the procedures for appointing the independent auditor and made them publicly available? 5.1.4. Establishing a complaints mechanism There is a mechanism for handling complaints and disputes arising from the independent audit. This mechanism makes it possible to deal with any complaint relating to the operation of the licensing scheme. (a) Is there a documented complaints mechanism in place that is available to all interested parties? (b) Is it clear how complaints are received, documented, referred to a higher level (where necessary) and responded to? 5.2. The independent auditor 5.2.1. 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 Guides 62, 65 or similar standards? 5.2.2. Audit methodology The methodology of the independent audit is evidence-based and verifications are carried out at specific and frequent intervals. (a) Does the methodology specify that all findings are based on objective evidence concerning the functioning of the LAS? (b) Does the methodology specify the maximum intervals at which each element of the LAS will be verified? 5.2.3. 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? 5.2.4. Reporting requirements The independent auditor sends regular reports on LAS integrity to the Joint Implementation Committee, including failings and an assessment of the corrective measures taken. Do the independent auditor’s Terms of Reference specify the reporting requirements and reporting intervals? ( 1 ) http://ec.europa.eu/development/policies/9interventionareas/environment/forest/forestry_intro_en.cfm