EUTR – Is the Regulation Effecting Change?

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Our years of experience working with a range of timber industry partners placed EnviroSense in an excellent position to help them implement due diligence systems in accordance with the European Timber Regulations (EUTR).

The regulations have been in place for over a year and we have seen a shift in the attitude of many suppliers, however this has varied between sectors. Retailers have been early adopters and in fact have been addressing supply chain risk well before the EUTR was written in 2010.

Requests for supply chain information from suppliers in countries with low levels of illegal harvesting and good levels of governance were initially met with scepticism or even mild offence. Now that suppliers realise this is a legal requirement, not an indication of lack of faith in their product, most companies have had less problems with suppliers initial response to requests of evidence of chain of custody and proof of legality. Skepticism naturally exists, and will always exist as disclosing supply chains are a sensitive matter and should be treated as so.
Reputable companies trading in high value species in countries which have been highlighted as having high levels of illegal logging realised the need for full chain of custody back to harvest prior to the EUTR’s introduction. Providing the necessary evidence, while a challenge, should be possible. Other, less reputable companies, or those with particularly complex supply chains have had real problems meeting the requirements of the EUTR and we have seen orders cancelled or a de-facto trade embargo on specific regions (African timber that is not certified for example). This can be seen as an indication that the EUTR is starting to have a positive effect in some cases, while also potentially leading to a de-facto ban on some countries or regions that locally will have a negative affect. This clearly is a consequence of buyers not wishing to consider measures to mitigate risk including on-the-ground verification or closer scrutiny, both of which use more of their company resources.

However, most of the problems we have encountered have been with composite materials processed in countries with high perceived levels of corruption. Complex products containing timber of multiple species and countries of origin together with a reluctance or inability to show evidence of supply chains initially proved a real barrier. This lack of evidence didn’t necessarily indicate illegality – more often attributable to poor management systems, or misinterpretation of the aim of the EUTR, or communication problems. Following the cancellation of orders from some major players, we have seem the situation for many clients slowly improving.
The coming months and years will show if the EUTR has really provided a mechanism to cause significant changes in buying and sourcing attitudes. Invariably it must, the length of time to reach the point when legality becomes one of the first questions raised as part of the normal product review process may be many months or years. The NMO’s recent change in stance moving into more of a compliance and prosecution phases will expedite the process (see earlier news item). Many companies themselves are all to aware that they have not implemented sufficiently robust timber due diligence systems and it may take prosecutions to change directors and key persons attitudes within such organisations to enable those working daily on timber sourcing issues to have more authority and resources at their disposal.

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