Paper Importers Get Set on Illegal Logging Prohibition

Having just come from a briefing on the implications of Australia’s Illegal Logging Prohibition Act (2012) for the paper industry, it is worth sharing that sector’s preparations for the law’s commencement.

From 30th November 2014, not only will it be an offence to import illegally logged timber, it will also be an offence to import certain timber products that contain illegally logged material. Where products are declared as Regulated Timber Products (RTPs), the prospective importer is required to establish and operate a due diligence system to assess the risk of illegally logged timber being contained in the product.

Penalties for importing illegally logged timber (including in RTPs) include up to 5 years imprisonment and fines that range up to $85,000 per offence.

We provided a briefing on the emphasis, major features of the laws and the obligations of importers of paper and paper products. The discussion was with the major trade association for the paper and paper products industry in Australia, which represents the vast bulk of the importers.

More than six months out from the law’s full application in November, most importers comprehend their obligations and increasingly, they are developing strategies to acquit them.

That is understandable really, because most imported paper products and some paper have very long and often opaque supply chains.

Essentially what the legislation requires of an importer is that they take responsibility for knowing and understanding the source of the original wood fibre right down to the level of forest management area. Once they understand that, it is their obligation to conduct a risk assessment against (optionally) PEFC, FSC or FLEGT frameworks and (compulsorily) general criteria, to determine if there is a risk of importing illegally logged timber in the paper product.

That is a long way back upstream and is further than many paper importers have gone before. Some see it as overkill. The alternative view is that the increasing global trade in wood products provides a context that makes Australia’s new laws increasingly relevant.

One example about which IndustryEdge is aware, involves pulp manufactured from a certified plantation in South America being shipped to China. The pulp is mixed with pulp made on-site from wood fibre that comes from Eastern Europe to manufacture paper that is exported the world over, including to Australia. The supply chain is long and various and the opportunity for issues to arise is reasonably high.

With the new laws, the penalties and the examples in mind, importer attention has necessarily turned to the very detailed processes of due diligence and risk assessment, where the outcome is compliance with the law and avoidance of illegally logged timber being imported into Australia. Ultimately, the liability remains with the importer and the importers are taking their additional responsibilities seriously. In the main the importers are well informed about the requirements of the Act and how to meet them.

Some major importers, especially of printing and communication papers, are already deploying their due diligence and risk assessment systems. Most of the requirements are an extension of existing requirements under the major certification schemes. Thats a bit frustrating, but as we discussed with them, certification is no assurance of legality and ultimately, its optional. The laws on the other hand are of course mandatory.

We have been surprised that importers of packaging and industrial papers have not been more focused on the new laws to date. While recycled fibres are exempt from the laws (so long as they are derived from post-consumer sources), any original wood fibre mixed with the recycled fibres must be subjected to the same due diligence and risk assessment processes as for other grades of paper. Some of those packaging importers will need to get their skates on to ensure compliance.

The other sector that will need to improve its focus on compliance and due diligence processes is those involved in importing many stationery items, which have been declared Regulated Timber Products.

This focus on compliance, improved due diligence as to the legality of fibre sources in paper and greater supply chain transparency is interesting. It is interesting because that is the procedural aim of the legislation. The outcome of the legislation aims to end importation of illegally logged timber and it aims to do that through these mandated processes that firms are increasingly focused on.

With that in mind, coming away from a testing and in-depth conversation, I find myself wondering , exactly who was it that said prohibitions don’t work?

In the March 2014 edition of Pulp & Paper Edge (Edition 106), IndustryEdge will publish a more extensive analysis of the implications of the Illegal Logging Prohibition Act, 2012 on the paper trade in Australia. A copy of the presentation to the Australian Paper Industry Association (APIA) will be included for the exclusive reference of subscribers.

If you are interested in subscribing or examining a sample of Pulp & Paper Edge, contact or call us on +61 3 5229 2470.

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