In December 2020, a new study on responsible business conduct in tropical timber value chains was released. The study was titled, ‘International responsible business conduct in tropical timber value chains – social and environmental risks in the top eight exporting countries of (semi-) finished products to the Netherlands: Brazil, China, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam.’ amfori contributed to the development of the study through the provision of aggregated data from its amfori BSCI and amfori BEPI monitoring activities.
Social Risks in Tropical Timber Processing
The study shows that in all eight focus countries, social and environmental risks have been identified during tropical timber processing. In general, large, export-oriented and certified (FSC/PEFC) companies perform better on CSR. These companies carry low(er) risks than small, domestic market oriented, non-certified and illegal companies. There is (in some cases a lot of) room for improvement on occupational health and safety for all types of companies in all countries.
All countries in this study score poorly on the ITUC Global Rights Index for freedom of association and upholding workers’ rights. In all countries, wages below the living wage were considered an issue, often related to excessive working hours. In all eight countries, women get paid less than men and in the majority of countries there is a risk that there are not equal opportunities for women to obtain a management position.
Environmental Risks in Tropical Timber Processing
Some of the major environmental risks that were identified relate to poor waste management, discharge of hazardous chemicals and substances, noise and dust. Communities living nearby timber processing facilities risk being negatively affected by these environmental nuisances. For the eight countries included in this study, bribery and corruption was indicated as a medium or high risk. Poor law enforcement was reported as a risk in half of the countries.
Within the timber sector, tropical timber has been identified as the subsector with the highest social and environmental risks. Furthermore, although international forest management standards FSC and PEFC cover the large majority of social and environmental aspects of leading international CSR guidelines, there is limited coverage of these aspects in both chain of custody (CoC) standards.
Consequently, there may be social and environmental risks in the value chain for the processing, production and trade of certified timber (products).
As the study focused on the import of (semi-) finished products to the Netherlands, it has included some recommendations for Dutch tropical timber importers.
- Map your supply chain(s), including sub-suppliers where risks may be more likely to occur;
- Source certified (FSC/PEFC) tropical timber products and eliminate illegal timber
- Start and/or maintain a dialogue with your suppliers on CSR
- Identify CSR risks for the companies in your supply chain(s), including for vulnerable groups (e.g. migrants, those under temporary contracts, sub-suppliers)
- Prioritise CSR risks to work on, based on severity of the risk, the likelihood and the level of change you would be able realise by yourself or in partnership with others
- Write a CSR policy/commitment and communicate these to your suppliers
- Support your suppliers in finding solutions and measures to address identified social and environmental risks
- Pay a fair price for timber products (that reflects production costs including CSR investments)
- Monitor effectiveness of measures to address social and environmental risks
- Consider working with support organisations and systems (e.g. ISO OSH certification, amfori BCSI and/or amfori BEPI)
This report was commissioned by CNV Internationaal and Tropenbos International within the framework of the Dutch IRBC ‘Promoting Sustainable Forest Management’, Working Group 1, ‘minimising international responsible business conduct risks.’