It is clear that the NMO (National Measurements Office) have targeted efforts based on risk. Namely Chinese plywood, a product that is imported in large volumes to the UK from China and can be made of a mixture of species, including tropical hardwoods in many cases.
In brief, sixteen companies were identified by the NMO as Operators and requested to submit their due diligence system to be evaluated by the NMO against all of Article 6 of the EU Timber Regulation 995/2010. The common thread with all systems seen by the NMO and reported by the NMO was,
‘A lack of narrative explaining how the combination of document gathering, risk assessment and mitigation (where necessary) enable the company to reach a conclusion of negligible risk that the timber in the product was sourced illegally’.
Many risk assessments are simply cannot be understood by a second or third person and often constitute and mass of fields in a spreadsheet and do not clearly articulate how the conclusion was reached. The information gathered, risk assessment, mitigation should form a comprehensive record that is safely stored which can be accessed by an authorised second or third person two years later or more and that same person should be able to understand how the conclusion was reached. Additionally, the person in question should also come to the same logical conclusion if using the due diligence system as the initial person conducting the exercise. In short, this means a straightforward and plain-english due diligence process that is agreed and documented as a protocol or procedures, with an output that is a clear report for that product or products and supply chain which does, or does not, recommend and detail mitigation measures. Not a spreadsheet.
The NMO has also stated that, ‘only one company was found to be compliant with the EUTR as a result of testing and the submission of their due diligence system’ and, ‘the NMO continues to investigate the remaining cases. Various sanctions will be applied to the companies in question’.
The companies in question due diligence systems that were reviewed according to the NMO fall-short with the exception of one company. To draw a conclusion, it is apparent that the NMO is assessing companies compliance to all of Articles of 6 EUTR 995/2010 including the need to maintain due diligence. The latter point of maintaining due diligence is extremely important . Previous guidance released made reference to one year as period for review. The period should be equatable to the risk, high risk products, such as plywood should be assessed in some cases per shipment. Supply chains are not static and companies are well-advised to determine where they are at risk and what their exposure is. Ultimately, seizures will happen in relation to high-risk products and the NMO will have their first case to pursue prosecution.