Verification of Wood Origin - Case Russia Anna-Liisa Myllynen, Director, Forest Environment, Wood Supply 03 April 2006

10 November Stora Enso in Brief Publication Paper A world leader –16.4 million tonnes of paper and board –7.7 million m 3 of sawn and processed wood products Four main divisions –Publication paper, Fine Paper, Packaging Boards and Forest Products Sales: EUR 12.4 billion Approximately employees in more than 40 countries Market capitalisation: EUR 8.6 billion Shares listed on Helsinki, Stockholm and New York stock exchanges Packaging Boards Forest Products Fine Paper

10 November Stora Enso position Stora Enso actively works to combat illegal logging wherever the Group operates. Stora Enso also acts to prevent any other illegal activities related to the wood supply. Where Stora Enso cannot directly prevent such illegal incidents, the Group co-operates with the authorities and other stakeholders in order to improve the working environment. Illegal logging= Wood harvesting in violation of national laws and state laws

10 November Strategies to ensure origin of wood Recognize and analyse the risks related to legality and sustainability issues Focus on long term partnerships and investments Have local representative network Increase own logging operations Keep the supply chains as short as possible Offer training and cooperation to promote supplier’s awareness of sustainability issues Have active stakeholder dialogue and development projects

10 November Traceability – our most important instrument in verifying the origin Traceability systems –Cover all sources of wood and fibre –Tool to verify compliance with corporate policies and national legislation –Can be third party verified through EMAS, ISO 14001, Chain-of-Custody, Controlled Wood Auditing Wood origin data Contracts C B A External audits D

10 November Traceability – case Russia Traceability system in Russia –Tool for verifying compliance with corporate policies and legislation –Third-party-verified through EMAS, ISO and FSC Controlled Wood Auditing Wood origin data Contracts C B A External audits D Wood in line with national laws Environment and origin Stora Enso auditing rights Supplier’s commitment to Stora Enso policies and practices Wood origin data from each harvesting site to SE database and GIS mapping system –Location–Certification data –Legal documents–Volumes for control –Environmental values Internal audits for monitoring and development Supplier audit to verify –Harvesting rights & documents –Environmental issues –Labour safety Field audits to verify –Origin of wood, documents –Environmental issues of the site –Labour safety

10 November Example of supplier ranking - Russia Ranking Requirements Origin of Wood -documents are not complete, or 2. Harvesting company doesn’t have all documents, or 3. Harvesting company doesn't have responsible person for labour safety issues Complete Origin of Wood –documentation in place 2. Labour Safety issues are in line with legal requirements 3. Harvesting according to terms of harvesting license Complete Origin of Wood –documentation in place 2. Labour Safety issues are in line with legal requirements 3. Harvesting according to terms of harvesting license 4. Additional score on forest certification or environmental policy/ management system 7 1. Complete Origin of Wood –documentation in place 2. Labour Safety issues are in line with legal requirements 3. Harvesting according to terms of harvesting license 4. Additional score on forest certification and environmental policy/management system 5. Harvesting site has all nature and multiple use values protected as defined in Stora Enso traceability system  Annually, 30 % of the contracts are audited  Corrective actions required on levels 1-3  Level 4 indicates compliance with national laws and Stora Enso requirements  Levels 5-7 requires sustainability performance, which exceeds the legal minimum

10 November Example of supplier performance -Russia % of the audited suppliers