1. Update on the UK Timber Trade

2. Presentation 1.UK Trade latest 2.Responsible Purchasing 3.Bintangor and the Chinese connection 4.More words 5.More action 6.Conclusion 1.UK Trade latest 2.Responsible Purchasing 3.Bintangor and the Chinese connection 4.More words 5.More action 6.Conclusion

3. Where does UK timber come from 30% from UK forests 70% is imported Majority from Europe –>90% of our softwood –>60% of our hardwood –EU forests are growing at 252million m3 every year = 30x UK consumption North America –16% of our hardwood –<5% of our softwood Tropical sources; = small % by volume of UK consumption 30% from UK forests 70% is imported Majority from Europe –>90% of our softwood –>60% of our hardwood –EU forests are growing at 252million m3 every year = 30x UK consumption North America –16% of our hardwood –<5% of our softwood Tropical sources; = small % by volume of UK consumption

4. How much of UK imported timber is certified? Sawn Softwood = 59% Sawn Hardwood = 36% Plywood = 23% Sawn Softwood = 59% Sawn Hardwood = 36% Plywood = 23%

5. Rupert Oliver, 2005

6. 2. Responsible Purchasing Policy (AKA What to do when you can’t get certified timber)

7. The RPP and the Code of Conduct The RPP is a tool to help members comply with the Code of Conduct

8. So far so good….. 40% of membership by volume 25% of membership by number Larger companies tend to sign first 100% certified companies don’t see the point Hardwood companies are more keen than softwood companies The membership voted in favour of making the RPP compulsory, but at a time to be decided when 51% of membership by number have signed up 40% of membership by volume 25% of membership by number Larger companies tend to sign first 100% certified companies don’t see the point Hardwood companies are more keen than softwood companies The membership voted in favour of making the RPP compulsory, but at a time to be decided when 51% of membership by number have signed up

9. RPP 2006 Audit Results SGS audited all Annual Management Reports SGS issued Major and Minor Compliance Requests 26 companies passed We published list of audited companies and made that list available to all stakeholders Lessons incorporated in a good audit guide and revisions of the RPP in 2006….. SGS audited all Annual Management Reports SGS issued Major and Minor Compliance Requests 26 companies passed We published list of audited companies and made that list available to all stakeholders Lessons incorporated in a good audit guide and revisions of the RPP in 2006…..

10. Lessons learnt in 2005 (1) Screen out certified suppliers + Focus in on high risk countries = Pre-screening step Screen out certified suppliers + Focus in on high risk countries = Pre-screening step

11. Combined supplier and product assesment does not work (e.g. Bintangor-faced plywood) So, RPP now has been split into two sections; supplier assessment and product assessment Now RPP signatories can supply customers with information on their suppliers and the products they supply Combined supplier and product assesment does not work (e.g. Bintangor-faced plywood) So, RPP now has been split into two sections; supplier assessment and product assessment Now RPP signatories can supply customers with information on their suppliers and the products they supply Lessons learnt in 2005 (2)

12. Some questions were unnnecessary Some questions needed to be clearer or more simply put Some questions needed specific indicators of performance in the answers So, we’ve streamlined the question set and provided more specific guidance to suppliers of what we are looking for Some questions were unnnecessary Some questions needed to be clearer or more simply put Some questions needed specific indicators of performance in the answers So, we’ve streamlined the question set and provided more specific guidance to suppliers of what we are looking for Lessons learnt in 2005 (3)

13. Next steps for the RPP More recognition from customers, banks, insurance companies, NGO’s. More recognition from Ecohomes, Sustainable Construction, Green Guide, etc.. Keep the RPP aligned with CPET work on legality Develop the RPP on CD/DVD as a business tool to help SME’s link up with their stock control and financial systems Harmonise RPP with other European trade organisations (e.g. Spain, Germany, NL, Be, Denmark, France) More recognition from customers, banks, insurance companies, NGO’s. More recognition from Ecohomes, Sustainable Construction, Green Guide, etc.. Keep the RPP aligned with CPET work on legality Develop the RPP on CD/DVD as a business tool to help SME’s link up with their stock control and financial systems Harmonise RPP with other European trade organisations (e.g. Spain, Germany, NL, Be, Denmark, France)

14. 3. Bintangor and the Chinese Connection

15. Greenpeace International Press Release “London, International — A criminal trail of illegally logged timber from the world's last rainforests, which is 'laundered' in China before arriving in Europe, the USA and other consumer countries, has been uncovered by a major Greenpeace investigation. Greenpeace International Press Release “London, International — A criminal trail of illegally logged timber from the world's last rainforests, which is 'laundered' in China before arriving in Europe, the USA and other consumer countries, has been uncovered by a major Greenpeace investigation.

16. The TTF Response 9 members decided to suspend purchases of Chinese plywood with a bintangor face/back veneer coming from PNG Code of Conduct Review China Action Plan 9 members decided to suspend purchases of Chinese plywood with a bintangor face/back veneer coming from PNG Code of Conduct Review China Action Plan

17. 4. More Words….. Weaknesses in Code of Conduct must be addressed TTF National Panel Products Division decided to extend Bintangor statement to advise members against purchases of PNG and Solomons timber unless credibly certified Other TTF Divisions agreed Statement issued on 28 th June Raising the bar for the international industry Weaknesses in Code of Conduct must be addressed TTF National Panel Products Division decided to extend Bintangor statement to advise members against purchases of PNG and Solomons timber unless credibly certified Other TTF Divisions agreed Statement issued on 28 th June Raising the bar for the international industry

18. Code of Conduct Review Tropical Forest Trust study of Greenpeace allegations and recommendations to TTF on improving the Code of Conduct Forests Forever working group to recommend changes to Code of Conduct to the Governing Board in September 2006 More specific advice and guidance to members country by country…. Alignment with CPET….. Tropical Forest Trust study of Greenpeace allegations and recommendations to TTF on improving the Code of Conduct Forests Forever working group to recommend changes to Code of Conduct to the Governing Board in September 2006 More specific advice and guidance to members country by country…. Alignment with CPET…..

19. 5. More Action China Action Plan launched on 11 th June TFT support to up to 20 mills in China supplying TTF and TFT members with wood products Linking up with responsible timber suppliers in SE Asia, Central Africa and eventually Latin America One mill in China is already getting more orders from UK merchants based on the China Action Plan China Action Plan launched on 11 th June TFT support to up to 20 mills in China supplying TTF and TFT members with wood products Linking up with responsible timber suppliers in SE Asia, Central Africa and eventually Latin America One mill in China is already getting more orders from UK merchants based on the China Action Plan

20. TFT field staff now operating in Malaysia, Indonesia and Central Africa GAP Assessments underway Chain of Custody work to follow Independently audited timber TTAP2 just been approved by the European Commission for China and Latin America TFT field staff now operating in Malaysia, Indonesia and Central Africa GAP Assessments underway Chain of Custody work to follow Independently audited timber TTAP2 just been approved by the European Commission for China and Latin America

21. Indonesia –The industry is in free fall – 80 mills have shut in the past 12 months –Fierce price competition from China –Government is restricting log supply –Some unintended consequences: restrictions seems to affect both good and bad suppliers alike –Is there a better way of restructuring industry than this? –We are now finding it very difficult to engage with Indonesian suppliers on illegal logging issues –The industry is in free fall – 80 mills have shut in the past 12 months –Fierce price competition from China –Government is restricting log supply –Some unintended consequences: restrictions seems to affect both good and bad suppliers alike –Is there a better way of restructuring industry than this? –We are now finding it very difficult to engage with Indonesian suppliers on illegal logging issues

22. Asia Roadshows Follows success of African roadshows in 2005 Changing EU and International markets Briefing packs on trade and legality issues Supporting FLEGT process Malaysian trade workshops in October 2006 Indonesia trade workshops early 2007 Follows success of African roadshows in 2005 Changing EU and International markets Briefing packs on trade and legality issues Supporting FLEGT process Malaysian trade workshops in October 2006 Indonesia trade workshops early 2007

23. 6. Concluding remarks Step change is required UK market demand remains uneven (latest Oliver report) Industry is responding and collectively Government needs to push through it’s timber policy and toughen up its own policing CPET needs to focus on legality issues EU governments need to harmonise their procurement policies But words are not enough….. Step change is required UK market demand remains uneven (latest Oliver report) Industry is responding and collectively Government needs to push through it’s timber policy and toughen up its own policing CPET needs to focus on legality issues EU governments need to harmonise their procurement policies But words are not enough…..

24. Thank You

25. www.ttf.co.uk