Summary
• In the private sector, timber tracking systems tend to be limited to large companies.
• The ITTO is funding a pilot scheme to establish timber tracking systems for small and medium-sized companies.
• So far, three schemes, in Indonesia, PNG and Peru, have been approved.
• The ITTO has funding for two further pilot schemes.

In the tropics, modern timber tracking that meets the demands of governments, certification schemes and overseas buyers has so far been largely limited in the private sector to big companies with the means and capacity to implement systems of their own, involving the use of computerised databases, bar codes, stripe and smart cards, tracer points, radio-frequency identification, the internet and satellites.

The prospects for numerous small and medium companies using tracking have been constrained in part by a lack of awareness that it is becoming a requirement in a growing number of customer markets. Many of these businesses also lack the financial and technical capacity to implement systems. There is concern about meeting the added costs of developing and maintaining them and the extent to which these would be met by the markets. This is understandable given that these companies currently operate in an environment where incentives for complying with legal, sustainable and governance requirements are either non-existent or grossly inadequate.

Against this background, the International Tropical Timber Organisation (ITTO) is encouraging small and medium private sector forest companies operating in ITTO-producing and developing consuming member countries to participate in pilot schemes for the wider adoption of tracking. The initiative forms part of a strategy to strengthen forest law governance and enforcement and promote production and trade in timber from legally and sustainably managed forests. Selected companies are being given financial support to examine the feasibility of introducing tracking systems, amounting to US$40,500 for each scheme. To date, three have been approved to participate in the pilot.

PT Gema Hutani Lestari (GHL) in Indonesia is a medium-sized timber concession company seeking to achieve third-party verification of legality in accordance with the Indonesian Legality Standard set up by the Indonesian Ecolabelling Institute (LEI). It also wants to establish a chain of custody log tracking system from the company’s concession to PT Katingan Timber Celebes (KTC), a medium-sized plywood company, and chain of custody through KTC to the point of shipment. This will be achieved through base-line assessments and gap analyses, technical assistance and training, independent third-party auditing by a recognised auditing agency, implementation of corrective actions required and information dissemination. The Tropical Forest Foundation is providing technical assistance and guidance.

GHL is aiming for a certificate of legal origin and chain of custody for all products made from logs from its concession and its planning to publicise its move with a brochure in English, Japanese and Bahasa Indonesia.

Progress in Papua New Guinea

Under the same initiative Saban Enterprise Ltd in Papua New Guinea will trial SGS’s Timber Legality and Traceability Verification (TLTV) system to demonstrate that its timber products exported to Australia are legal and meet PNG forest law and policy requirements. The pilot scheme, which will evaluate the feasibility of the system and its customisation to meet the needs of the PNG timber industry sector, involves an assessment of the company’s existing tracking systems in relation to PNG forest laws and policies and changes required, identification of the legality requirements of the Australian market, chain of custody audits of the com-pany’s shipment to Australia, and cost-benefit analysis to determine the financial implications of implementing the TLTV system. Saban will also collaborate with the PNG Forest Industries Association, SGS PNG and the Australian Timber Importers Federation.

Meanwhile, Maderas Industriales y Laminadas (MAILSAC) of Peru intends to establish an “appropriate, easy to replicate and efficient timber tracking system” from its forest concession to the sawmill Forestal Rio Mar SAC (FORSAC). This involves the development of guidelines, procedures, registration forms and a computerised information system for data gathering at each stage of the production chain and for the tracking of trees to be harvested in MAILSAC’s forest concessions right to the FORSAC sawmill.

The proposed methodology includes development of forms and training of MAILSAC personnel, development of data processing software, training for government officials responsible for monitoring and control activities, and control processes.

The pilots for GHL and Saban Enterprise are already being implemented, while the proposal by MAILSAC is being modified and refined.