On April 1, the Tropical Forest Trust (TFT) started full-time activities in China. With the appointment of our first Chinese staff member, Lewis Du, who has offices in both Beijing and Shanghai, we’ve started a new phase in our activities to support our members and other clients.

The TFT has to be in China. Half of all internationally traded tropical hardwood ends up there, either for processing and re-export or for domestic use. European and US wood products trading companies are the main customers for what has been a boom in Chinese exports over the past three to five years. The environmental credentials of some of these products has been questioned in recent NGO reports so we’ve been asked by our members to help their Chinese suppliers achieve better environmental performance. We’ll help them secure wood raw materials from FSC-certified forests or from forests in transition to FSC certification and we’ll guide them on the implementation of wood control systems to verify their wood raw material’s origins.

Our aim over the coming months is to expand our programme to work with an increasing number and diversity of factories. If we can do this, then a growing number of importers and retailers will trade in ‘good wood’ products from China. Their Chinese suppliers will secure orders in the UK and other environmentally sensitive markets and gain access to sustained log supplies. The source forests will become well managed and remain standing to everyone’s advantage.

Complex systems

Can we achieve this? Raw material sourcing systems in China are so complex, opaque and lacking in any controls that some feel that verifying wood origin is and will remain impossible. We believe otherwise. There’s no doubting that there are serious issues with the way supply chains currently function, but these problems have been faced and overcome elsewhere already. The TFT has worked with exactly the same issues in South-east Asia, particularly Vietnam and Indonesia.

Seven years ago TFT members – UK and European garden furniture retailers and their supplier in Vietnam – set out to transform their business into one based on FSC-certified timber. They started with annual production reliant on 80,000m3 of logs, all of which came from unknown sources and all of which was processed in over 50 factories with no wood control systems whatsoever. It was as big a mess as people are now facing in China.

Within months they consolidated their factory supply base, and 18 months later had supported 35 factories to implement third-party audited wood control systems. The TFT helped link those factories to known legal forest operations and FSC-certified and TFT project forests. Within three years, TFT members had fully operational wood control systems – audited chains of custody linked to a credible, verified log sourcing programme. More than that, they were and still are doing good business while other companies have fallen by the wayside.

Since then the rest of the European trade in Vietnamese hardwood garden furniture has become largely based on FSC timber, and the TFT now works successfully with factories in Indonesia and elsewhere on garden furniture, flooring and plywood supply chains, repeating the same supply chain rebuilding process.

To share its experience, the TFT produced its Good Wood Good Business Guide which can be found on the TFT website (www.tropicalforesttrust.com) in eight languages, including Mandarin, Indonesian and Vietnamese.

Lessons learned

Sourcing logs from verified legal and well-managed forests isn’t always a straightforward business in the tropics. We have learned – sometimes the hard way – some key lessons:

  • Third-party audited chain of custody is only part of the solution – it’s a useful tool to monitor the performance of a factory that is genuinely committed, but on its own is insufficiently robust to prevent deliberate fraud.
  • Many tropical log producing countries are afflicted by weak policy and legal frameworks, conflicting forest law, and weak and corrupt enforcement. In that context how do you define ‘legal’ wood sources?

The answer is that you can’t rely on the existing systems. You need to know log origin back to stump, and cross-check the evidence that logs were cut under a legal right to harvest, and that all due fees and taxes have been paid. That way illegal wood is excluded before it reaches the production stage.

The process is challenging, but we know it’s possible. Companies that have done it are seeing major benefits to their businesses as a result.