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COUNTRY GUIDE TO TIMBER LEGALITY: BRAZIL

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INTRODUCTION

Introduction 2

1 Brazil background 3

1.1 Overview of Brazilian forest resource 3

1.2 Forest Estate and Ownership 5

1.3 Administrative & legislative context 6

1.4 National traceability system 7

1.5 Timber Production and Processing 9

1.6 Exports 10

1.7 Key challenges to verifying legal harvest 12

ACTIONS

2 Actions 14

2.1 Actions for timber producers in Brazil 15

2.2 Actions for timber processors 18

2.3 Actions for exporters 20

ADDITIONAL RESOURCES

3 Additional resources 22

COUNTRY GUIDE TO TIMBER LEGALITY: BRAZILCONTENTS

1COUNTRY GUIDE TO TIMBER LEGALITY: BRAZIL

ABOUT TFTEstablished in 1999, TFT is a global non-profit that helps businesses bring responsible products to market. Responsible products improve people's lives and respect the environment at all stages of the product lifecycle. TFT helps more than 90 members worldwide build responsible supply chains by identifying and addressing embedded social and environmental issues. Having established a strong record of achievement in timber supply chains, TFT has expanded its work into palm oil, leather and stone. TFT has offices in 15 countries and an on-the-ground presence in many more.

www.tft-forests.org

ABOUT TTAPThe Timber Trade Action Plan (TTAP) is a private sector initiative of the EU’s Forest Law Enforcement Governance and Trade (FLEGT) Action Plan, managed by TFT and its partner Timber Trade Federations of Europe (ETTF), the UK (TTF), Netherlands (VVNH), Belgium (FBCIB) and France (LCB). The project delivers a practical approach by supporting European buyers and their suppliers in producer countries towards legality verification as a means to promote responsible management of tropical forests.

www.tft-forests.org/ttap

The TTAP project receives funding from the European Union. This publication has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of TFT and can in no way be taken to reflect the views of the European Union.

annual net loss of 5.2 million hectares was recorded for the period 2000–2010, down from 8.3 million hectares per year in the period 1990–20002. This deforestation was often accompanied by illegal logging activities and while it has been reported that illegal logging has fallen by 54–75 percent in the Brazilian Amazon over the last ten years, analysis suggests that illegal harvesting still represents 35–72 percent of logging in the Brazilian Amazon3.

Laws have recently been introduced by the USA, EU and Australia that ban illegally harvested timber from their markets. Importers and buyers that place timber products on those markets must be able to demonstrate that timber was harvested legally. Failure to do so could imply prosecution though fines, seizure of products or imprisonment and could therefore affect businesses in producer countries.

Buyers rely on their suppliers in producer countries to provide information and evidence to demonstrate timber has been legally harvested. Without adequate information and evidence of legal harvest, it will not be possible to sell to these markets.

This guide gives practical advice to timber producers, processors and exporters in Brazil on how to demonstrate timber legality to their customers. Buyers can also use this as a guide to complement their understanding of the wood products industry in Brazil and legal requirements such as the types of documentation and information needed by Brazilian timber businesses.

The guide comprises three main sections:

1. Brazil background, primarily for buyers importing timber-based products from Brazil. It summarises Brazil’s forest resource, the timber processing industry, and official regulation of timber production and processing.

2. Actions for timber producers, processors and exporters. Wherever you operate in the supply chain it is recommend that you read all three sets of actions to understand what information and documents may be needed. Communication and exchange of information between supply chain partners about timber legality requirements is critical.

3. Further information provides links and sources of information about the laws in the USA, EU and Australia to better understand the requirements and how to demonstrate legality.

2 COUNTRY GUIDE TO TIMBER LEGALITY: BRAZIL

INTRODUCTION

3www.tft-forests.org

Brazil is the second most forested country in the world covering 519.5 million hectares1 or 61% of the country. It holds about one-third of the world's remaining rainforests in the Amazon Basin, a mosaic of ecosystems and vegetation types and is one of the most biodiverse countries on Earth.

Pressure for land for colonization and agricultural expansion over many decades has driven a large net decrease in forest area in the Amazon. An average

1 Lawson, S., and MacFaul, L. (2010). Illegal Logging and Related Trade: Indicators of the Global Response2 FAO (2010): Global Forest Resources Assessment 2010: Brazil Country Report3 ITTO (2011): Status of Tropical Forest Management. Brazil

BRAZIL BACKGROUND 1.1 OVERVIEW OF BRAZIL FOREST RESOURCE

In terms of the forest estate, about half of the forest area in Brazil (242.9 million ha6) has been identified as PFE “Permanent Forest Estate” comprising forests of all ownership types, either Public (Federal or State) or Private (Indigenous Lands and Legal Reserves), based on secure, long-term land tenure for forest users. The PFE is classified into productive and protected zones on the basis of a national forest inventory, ecological considerations and community consensus.

Forest management units for wood production within the PFE comprise 34.25 million ha7 or 14% of PFE and responsibility for management is allocated amongst various owners and users8 Forest area that is not classified as PFE is open for conversion to other land uses.

Other than harvesting natural forest through a forest management with an approved Plano de Manejo Florestal Sustentável – PMFS (Sustainable Forest Management Plan) - timber can also be legally extracted through:

authorized land clearance for the conversion of forest land into other uses, such as agriculture and livestock; and,

planted forests – the laws and regulations for these vary from state to state.

4 5COUNTRY GUIDE TO TIMBER LEGALITY: BRAZIL www.tft-forests.org

BRAZIL BACKGROUND 1.2 FOREST ESTATE AND OWNERSHIP

and to a lesser degree species such as Acacia, Teak and Rubber wood. These plantations are predominantly located in the south and southeast of the country and as much as 3.38 million hectares5 of it is certified against CERFLOR and FSC standards.

In addition to its expansive natural forest resource, Brazil has also developed large-scale industrial forest plantations through private investment to ensure a sustainable supply of raw material. Forest plantations cover 7.42 million ha4 principally of Eucalyptus and Pine

4 FAO (2010): Global Forest Resources Assessment 2010: Brazil Country Report5 ITTO (2011): Status of Tropical Forest Management. Brazil.

FIGURE 1: MAP OF BRAZIL’S DEFORESTATION HOTSPOTS AND LOGGING FRONTIERS

6 ITTO (2011): Status of Tropical Forest Management. Brazil7 ITTO (2011): Status of Tropical Forest Management. Brazil8 FAO (2013): Guidelines for the management of tropical forests http://www.fao.org/docrep/w8212e/w8212e04.htm

6 COUNTRY GUIDE TO TIMBER LEGALITY: BRAZIL 7www.tft-forests.org

In 2007, IBAMA’s activities were decentralized in order to facilitate the process of licensing activities in the different states. Harvest licenses and other licences became the responsibility of the state, authorised by the State Secretariats of Environment and known in most states as SEMA (Secretaria Estadual do Meio Ambiente).

As a result each SEMA developed similar systems to DOF. In Pará, it is called SISFLORA and the document issued to accompany the transportation of logs, sawn timber and final products is referred to as the Guia Florestal (GF). GF1 is for logs transportation, GF2 for sawn timber and GF3 for final products.

In 2006, IBAMA introduced a computer based system known as the Declarations of Origin document (DOF) to control trade and transportation of timber and other forest products. It should include information about the timber’s origin, species, type of product, quantity and value of the cargo, as well as the detailed transportation route. The DOF enables the accompanying products to be traced from the customs terminal back to the processing sites and the forest source. This system was obligatory at the federal or state level, for any forest exploitation, forest management or legal deforestation. See Section 3 for additional information on how the DOF credit system functions.

Brazil has administrative and legislative powers for forestry at the national and state level. The forest law, the Brazilian Forest Code (Law No. 4.771) has a national scope and has been in place since 15 September 1965. It has since been amended in 2012 (Law No. 12.651). Other pieces of legislation concerning environment, transport, safety and health and others complement it.

A National Forest Programme was launched in 2000 to define a national forest policy. However, no statement defining a forest policy with national scope is currently in place. Forest policies only exist with a regional scope.

Public bodies responsible for the management of Brazil’s forest resource at the federal level are:

• IBAMA, Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (Brazilian Institute of Environment and Renewable Natural Resources) is the Ministry of the Environment's administrative arm. It is responsible for monitoring compliance with Brazilian Environmental legislation

and for issuing environmental licenses for any activity that occurs on federal land.

• Serviço Florestal Brasileiro – The Brazilian Forest Service is primarily responsible for the management of federal forest concession areas.

• ICMBio, Instituto Chico Mendes de Conservação da Biodiversidade or Chico Mendes Institute for Biodiversity Conservation is primarily responsible for the management of federally protected areas (in Portuguese known as unidades de conservação9), which can be divided in two groups: full protection and sustainable use.

Public bodies responsible to the national state’s permanent forests are:

• SEMA State Secretariat for the Environment, responsible for issuing environmental licenses for any activity that occurs in a state land.

• IDEFLOR - The Instituto de Desenvolvimento Florestal is primarily responsible for the management of state forest concessions areas.

BRAZIL BACKGROUND 1.3 ADMINISTRATIVE & LEGISLATIVE CONTEXT

BRAZIL BACKGROUND 1.4 NATIONAL TRACEABILITY SYSTEM

9 WWF (20013) http://www.wwf.org.br/natureza_brasileira/questoes_ambientais/unid/10 ITTO (2011): Status of Tropical Forest Management. Brazil.

VERTICALLY INTEGRATED SUPPLY CHAIN

BUYER(EU/USA/Oz)

BUYER(EU/USA/Oz)

PROCESSOR (Sawmill)

FOREST 1(Smallholder)

EXPORTER(Factory)

FOREST(Private)

PROCESSOR(Sawmill)

FOREST 1(Smallholder)TRADER


A number of trees species are protected and prohibited for export, these being14:

• Brazil nut tree (Bertholletia excelsa)

• Araucária (Araucaria angustifolia). Note: from natural forests only. If from a plantation the origin must be stated.

• Native Brazilwood/pernambuco (Caesalpinia echinata)

• Jacarandá/Brazilian rosewood (Dalbergia nigra)

Mahogany and Cedro may only be harvested and traded following strict CITES regulations.

On average, an estimated 247 million m3 of logs were produced annually in Brazil between 2005 and 2008. This comprised 81 million m3 of logs from natural forests and 166 million m3 of logs from plantations11. It was estimated by FAO that over half of this was fuel wood. Most tropical wood was converted into sawn wood with annual production estimated at 15 million m3 per year, of which 75% is consumed domestically 12.

The key processing sites are principally located in Belém and Santarém in the state of Para. Exports with the most common tree species by importance are13:

• Macaranduba (Manilkara huberi)

• Jatoba (Hymenaea courbaril)

• Ipê (Tabebuia sp)

• Angelim (Dinizia excelsa)

• Cupiuba (Goupia glabra)

• Cedrinho (Erisma uncinatum)

forest sites and traders, as seen in Figure 2. While it has been reported that illegal logging has fallen by 54–75 per cent in the Brazilian Amazon over the last ten years, analysis suggests that illegal harvesting still represents 35–72 per cent of logging in the Brazilian Amazon10. Processors, exporters and buyers should be aware of this. If they source timber from the Brazilian Amazon they should take action to trace their supply chains back to source and secure strong evidence of legal harvest.

All activities on state land and required licences must now be requested from the specific SEMA and all those in federal areas must from IBAMA. Cases can occur where a company operates in one state but the land can belong to the nation and in this instance, such as for federal concessions, all licences must be requested from IBAMA.

Supply chains vary with some companies being vertically integrated, owning forest land that supplies their sawmilling and factory sites, whereas others are more complex with sawmills and factories sourcing raw material from numerous

10 Lawson, S., and MacFaul, L. (2010). Illegal Logging and Related Trade: Indicators of the Global Response

11 ITTO (2010): Status of Tropical Forest Management. Brazil 12 Forest Industries Intelligence (2013)13 Forest Legality Alliance (2013) www.forestlegality.org, 20.02.201314 Forest Legality Alliance (2013) www.forestlegality.org, 20.02.2013

FIGURE 2 EXAMPLE OF A VERTICAL AND NON-VERTICAL INTEGRATED SUPPLY CHAIN

BRAZIL BACKGROUND 1.5 TIMBER PRODUCTION AND PROCESSING

FOREST 1(Smallholder)


The main products Brazil exports are mouldings (softwood and hardwood), plywood, furniture, joinery, pulp and paper and sawn wood. Brazil’s plywood exports have been declining in the face of weak overseas consumption, declining availability of good quality hardwood logs, and stiff competition from Chinese manufacturers. Over 90% of plywood exports from Brazil are now softwood from plantations in the south, much

Between 2004 and 2012, the value of Brazil’s wood products exports decreased from $ 4 billion to $ 2.5 billion after reaching a peak of $4.25 billion in 2007.15 Brazil’s top export destination is the USA followed by the UK, Japan, France and Germany – see Figure 4. Four of these countries have illegal logging legislation in place – three covered by the European Union – and demonstrate the need for Brazilian exporters to provide buyers in these countries with the supply chain information required of them to maintain market access. Unlike some South American countries, China is a relatively minor export market for Brazilian wood products, mainly due to Brazil’s ban on log exports (since 1996) and focus on exports of secondary processed wood.

BRAZIL BACKGROUND 1.6 EXPORTS

15 Forest Industries Intelligence (2013)

of it certified. In contrast, over 95% of sawnwood exports from Brazil are still hardwood, mainly from Amazonia though exports have also been declining.

Given the different types of products, species, origin of timber and supply chain complexity it is of paramount importance that exporters provide supply chain transparency to their buyers to manage risk and maintain trade flows.

FIGURE 3: VALUE OF BRAZIL'S EXPORTS 2004 - 2012 FIGURE 4: BRAZIL’S TOP 5 EXPORT MARKETS BY VALUE 2004 - 2012

Other

Chips

Sawn

Joinery

Plywood

Wood furniture

Mouldings

USA U

K

JAPA

N

FRA

NCE

GER

MA

NY

$ m

illio

n

800.00

700.00

600.00

500.00

400.00

300.00

200.00

100.00

0.00

Other

China

Argentina

Netherland

Belgium

Germany

France

UK

Japan

USA

$ m

illio

n

4500

4000

3500

3000

2500

2000

1500

1000

500

0

2004

2005

2006

2007

2008

2009

2010

2011

2012

This section provides some key issues and complexities in Brazil for companies to demonstrate legal harvest in Brazil and actions to manage these risks.

The 2012 Corruption Perception Index (CPI) developed by Transparency International, scored Brazil with 43 indicating weak governance and unreliable official documentation. As noted above, levels of illegal logging in Brazil remain high.

Action: As a processor, exporter or buyer you should use a variety of approaches of risk assessment, documentation checks, site visits either internal or external e.g. service providers to demonstrate evidence of legally harvested timber.

DOF and/or SISFLORA timber harvesting credits16 have been known to be sold on the black market, for many product types e.g.


BRAZIL BACKGROUND 1.7 KEY CHALLENGES TO VERIFYING LEGAL HARVEST

13www.tft-forests.org

logs, sawn timber or final products. This means that trucks could be carrying timber covered by an official DOF/GF but in reality do not originate from the authorised area.

Action: your upstream suppliers throughout the supply chain should only purchase raw material, logs, sawn timber or finished products from their known and trusted suppliers. You should also undertake due diligence of new suppliers to understand their supply chains and documentation to support how they are sourcing their raw material and provide this information to you to cross check in the field and with official documentation.

Manipulation and misrepresentation of species data at the inventory phase can be deliberate to overstate the stock of certain tree species as a means to gaining additional harvesting credits for that particular species. Prohibited species could also be misnamed to represent a permitted species.

Action: Random checks by SEMA and IBAMA prior to issuing the harvesting licence could pick up some of these issues though this will not always be the case. You should use only recognised companies offering inventory services. Where issues arise inform forestry companies and federations so that blacklisted companies are not used and promoted.

Forest Management Plans submitted to IBAMA/SEMA for harvest authorisation (AUTEX) have been known to have been submitted for a completely different area.

Action: Coordinates of all Forest Management Plans submitted should be monitored by the relevant authority and all approved plans should be published. NGOs’ are controlling this issue but you and each of your supply chain partners should know the origin of the raw material though documentation. Those closer to the forest source undertaking field visits should cross check the field sites against the Forest Management Plan.

Evidence shows that timber has been laundered to and from neighbouring countries such as Peru17.

Action: You should identify the forest origins of the timber they buy, and assess and mitigate the risks of illegal harvest. This information together with associated

documentation of traceability should be provided to downstream customers. You should complement the collection of documentation from upstream suppliers with field and site visits to understand the sourcing and production methods, and evaluate performance against local law and legislation and take necessary action.

“Traditional law enforcement efforts limited to operations against illegal logging have been effective in protecting some national parks, but have also changed the nature of the illegal logging to more refined methods including widespread collusive corruption and laundering of illegal logging under fake permits, ostensible plantation establishment and palm oil development.”18

Action: you should understand the supply chains and undertake robust due diligence to know all of the risk points and request all accompanying documentation that can be cross checked with authorities. Where uncertainty remains you should use service providers and experts to verify the information and if evidence is lacking stop trading with the supplier until assurances of legality can be provided.

16 AUTEX authorizes a specific volume, usually around 30m3/ha , for exploitation. Most often only around 18 to 20 m3/ha are exploited, because non-commercially species are not exploited. A GF1 to transport the logs is only issued if the full credit volume (volume to be exploited) has been achieved. If less is exploited credits should be returned to SEMA – but some companies do not return and sell “extra credits” on the black market.

17 EIA (2012): The laundering machine. How fraud and corruption in Peru’s concession system are destroying the future of its forests18 UNEP/ Interpol (2012): Green Carbon – Black Trade


Within Brazil, forest and timber regulations and document systems vary, as do the types and degrees of risk of illegal harvest. Regulations change, and sometimes appear to contradict each other.

The following ‘actions’ indicate the types of information, documentation and activities that are likely to be needed for a) timber producers, b) processors and c) exporters within the supply chain. They do not provide a comprehensive and definitive list of exactly what will be needed for every product type, wood species and region of harvest, but they provide guidance as to the type of approach you are likely to need for your specific wood sources.

A timber supply chain as represented in Figure 4 below generally comprises a:

The timber producer is critical – everyone else depends on you to demonstrate evidence of legal harvest! You need to ensure that you:

• Show evidence that you have the Legal right to harvest your forest resource;

• Provide information that you have paid all applicable fees and taxes;

• Take into account third party rights;

• Demonstrate that you comply with all required timber harvesting regulations; and,

• Respect all requirements for trade and transport of timber.

Your customers may ask for documentary evidence that your timber was harvested legally. If you operate in an area where illegal harvest is significant or timber from unknown forest sources is commonly traded, or if you sell higher risk commercially valuable species, you are likely to be asked for specific evidence of legal harvest. However, you may be asked for such evidence wherever you operate, and which ever species you sell.

ACTIONS ACTIONS2.1 ACTIONS FOR TIMBER PRODUCERS IN BRAZIL

Timber producer: this could be forest owner or manager, a farmer growing trees, a community forest group, or a timber buyer who buys timber standing and harvests it.

Processor: this could be a company engaged in any stage of processing between the raw logs and the finished product - for example, a small sawmill or log-peeling operation, a component maker, or a large factory that assembles furniture. Raw material could either originate from domestic sources in Brazil or imported from a third country.

Exporter: this could be a company engaged in exports products to the USA, EU and Australia, or to other countries for processing, manufacture or assembly before shipment to the USA, EU or Australia.

Table 1 shows the types of documents that may be requested, depending on which regulations apply to your specific context. Often not all of these documents will be requested - the most frequently requested are likely to be; harvest permission, compliance with harvest codes of conduct/regulations, evidence of stumpage payment, and transport licences (shown in bold in Table overleaf) and you should therefore be ready to provide these to your customer.

Securing the availability of the documents presented below represents a first step towards decreasing the likelihood of illegal timber being used in the supply chain. In case of doubts further proof should be requested and a trustful relationship with the supplier should be built, including field visits.

FIGURE 4: REPRESENTATION OF A TIMBER SUPPLY CHAIN

TIMBER PRODUCERS > TIMBER PROCESSORS > EXPORTERS > BUYERS


LEGAL REQUIREMENT DOCUMENTARY EVIDENCE DESCRIPTION ISSUING AUTHORITY

LEGAL RIGHT TO HARVEST

BUSINESS IS REGISTERED AND PAYS TAXES

AUTEX (AUTORIZAÇÃO DE EXPLORAÇÃO FLORESTAL) espécies, volumes, números de árvores, detentor, respon-sável técnico, número do PMFS; localizaçao do PMFS

TIMBER HARVESTING AUTHORIZATIONS. Carrying slightly different names depending on issuing state: Autorização de Exploração Florestal AUTEF in Pará

STATE ENVIRONMENTAL BODY OR IBAMA

Optional: Certidão autenticada da matricula e registro

Authenticated certificate of property registration

Must be requested from the company. It must be authenticated by a notary

THE BUSINESS OPERATES AS AN OFFICIAL FMU AND HAS THE RIGHT TO DO SO.

AUTEX (AUTORIZAÇÃO DE EXPLORAÇÃO FLORESTAL)

TIMBER HARVESTING AUTHORIZATIONS. Carrying slightly different names depending on issuing state: Autorização de Exploração Florestal AUTEF in Pará.The General Management Plan and Annual Operation Plan have to be approved before this is issued


A FOREST MANAGEMENT PLAN IS IN PLACE


TIMBER HARVESTING AUTHORIZATIONS. Carrying slightly different names depending on issuing state: Autorização de Exploração Florestal AUTEF in Pará.The General Management Plan and Annual Operation Plan have to be approved before this is issued.


ANNUAL HARVESTING RIGHTS APPROVED





TIMBER HARVESTING REGULATIONS

CONFORMITY TO AUTHORISED ALLOWABLE ANNUAL CUT (AAC), SPECIES DIAMETER LIMITS




FORMAL EMPLOYMENT CONTRACTS & SOCIAL SECURITY IN PLACE

“CERTIDÃO NEGATIVA DO MINISTÉRIO DO TRABALHO”

CLEARANCE CERTIFICATE OF THE MINISTRY OF LABOUR. It provides information about possible issues related to labour rights within the company

MINISTÉRIO DO TRABALHO - Ministry of Labour issues the certificate, but it can only be requested by the company concerned and has a period of validity

OCCUPATIONAL SAFETY & HEALTH RESPECTED

“CERTIDÃO NEGATIVA DO MINISTÉRIO DO TRABALHO”

CLEARANCE CERTIFICATE OF THE MINISTRY OF LABOUR. It provides information about possible issues related to labour rights within the company.

MINISTÉRIO DO TRABALHO - Ministry of Labour issues the certificate, but it can only be requested by the company concerned and has a period of validity

PAYMENT OF TAXES & ROYALTIES

FEES AND TAXES HAVE BEEN PAID FOR THE PRODUCTS CONCERNED (ROYALTY, STUMPAGE FEES, SPECIES, VOLUME PAYMENTS, INCOME TAX PAYMENTS)

NOTA FISCAL DE VENDA DO PRODUTO

LOG BILL OF SALES / INVOICES

ISSUED BY THE COMPANY BUT MUST BE LINKED TO THE SECRETARIA ESTADUA DA FAZENDA (SEFA) SYSTEM - State Department of Taxation and Finance

TRANSPORT & TRADE

DOCUMENTATION RELATED TO TRANSPORT AND TRADE IS AVAILABLE FOR THE PRODUCTS

GUIA FLORESTAL DE TRANSPORTE (GF1 – for logs transportation) – in case of exploitation in state area

DOCUMENTO DE ORIGEM FLORESTAL (DOF) – in case of exploitation in federal area

DECLARATIONS OF ORIGIN DOCUMENT


ACTIONS2.1 ACTIONS FOR TIMBER PRODUCERS IN BRAZIL

TABLE 1: DOCUMENT TYPES FOR TIMBER PRODUCERS TO DEMONSTRATE LEGAL HARVEST TABLE 1: DOCUMENT TYPES FOR TIMBER PRODUCERS TO DEMONSTRATE LEGAL HARVEST


• Your customers’ requirements for information and evidence of timber legality:

Action: understand your customers’ requirements whether domestic or international (your domestic customers might be selling to USA, EU or Australia) and secure that information and evidence from your up-stream suppliers. Find more information in the Generic Guide to Legality.

• Your legal timber supply is not mixed with other, potentially illegal, timber:

Action: if you have multiple sources of timber, ensure that those from assessed legal sources cannot be mixed with unknown sources at any point in the process. Implementing a Chain of Custody (CoC) system that tracks, records and segregates the different sources/species and volumes. It also enables you to demonstrate to your customers that no mixing is occurring.

Table 2 opposite documents the type of evidence to demonstrate that your mill or factory buys, processes and sells timber products legally – part of the requirements for the points above. Not all of these document types are always needed or applicable (for example no FLEGT licenses exist at the time of publication).

Additional guidance for processors can be found in the Generic Guide to Legality.

• Where in the sub-region of harvest the timber in your product was harvested:

Action: obtain country/forest of harvest from your suppliers. Request them to include this information in your invoice and also for all species comprising your products to your downstream customers. Develop a database as shown in table 3 to collect this information.

• The risks of illegal harvest associated with the area of harvest and the timber species:

Action: once you know sub-region and forest of harvest assess the risks of illegality in the area. If you uncover evidence of potential illegality in a wood source then you should seek to verify legality or exclude this source from your raw material supply and locate other suppliers. You should maintain records of this and regularly monitor your suppliers to be able to inform your customers, as required.

• Your legal obligations as a processor when you purchase, process and sell timber products. These vary by region, processor type, product and species:

Action: establish a list/database of laws and regulations that apply to you and undertake internal audit to ensure you fulfil all of the requirements.

ACTIONS2.2 ACTIONS FOR TIMBER PROCESSORS


LEGAL RIGHTS TO OPERATE

BUSINESS IS REGISTERED AND PAYS TAXES

LICENÇA DE OPERAÇÃO (LO); ALVARÁ

OPERATION LICENSE AND MUNICIPALITY AUTHORIZATION

STATE ENVIRONMENTAL BODY (FOR LO) OR IBAMA

MUNICIPALITY BODY – TOWN HALL (FOR ALVARÁ)

BUSINESS HAS THE RIGHT TO PROCESS FOREST PRODUCTS

LICENÇA DE OPERAÇÃO (LO); ALVARÁ

OPERATION LICENSE AND MUNICIPALITY AUTHORIZATION

STATE ENVIRONMENTAL BODY (FOR LO) OR IBAMA

MUNICIPALITY BODY – TOWN HALL (FOR ALVARÁ)

FEES & TAXES APPLICABLE TAXES HAVE BEEN PAID

DOCUMENTO DE ORIGEM FLORESTAL (DOF) OR GUIA FLORESTAL (GF)


STATE ENVIRONMENTAL BODY OR IBAMA STATE ENVIRONMENTAL BODY OR IBAMA

DOCUMENT DE ORIGEM FLOTRESTAL (DOF) OR GUIA FLORESTAL (GF)



NOTA FISCAL DE VENDA DO PRODUTO

CERTIDÃO NEGATIVA DA RECEITA FEDERAL (FOR GENERAL FEES AND TAXES OF COMPANY ACTIVITIES)

TIMBER BILL OF SALE/ INVOICES

CLEARANCE CERTIFICATE

ISSUED BY THE COMPANY BUT MUST BE LINKED TO THE SEC-RETARIA ESTADUA DA FAZENDA (SEFA) SYSTEM - State Department of Taxation and Finance

RECEITA FEDERAL - Tax authorities issues certificate, but it can only be requested by the company concerned and it has a period of validity

TRANSPORT & TRADE

APPLICABLE TRANSPORT AND TRADE LICENCES AND DOCUMENTS ARE IN PLACE

DOCUMENTO DE ORIGEM FLORESTAL (DOF) OR GUIA FLORESTAL (GF)

ADECLARATIONS OF ORIGIN DOCUMENT


BILL OF LANDINGPACKING LISTNOTA FISCAL DO PRODUTO

BILL OF LANDINGPACKING LISTPRODUCT INVOICE

COMPANY TO PROVIDECOMPANY TO PROVIDECOMPANY TO PROVIDE ACCORDING TO SEFA’S SYSTEM.

FOR EXPORT-ERS

APPLICABLE TRANSPORT AND TRADE LICENCES AND DOCUMENTS ARE IN PLACE

REGISTRO DE EXPORTAÇÃO (SISCOMEX)DECLARAÇÃO DE DESPACHO DE EXPORTAÇÃO

EXPORT REGISTRATION (SISCOMEX) EXPORT SHIPPING DECLARATION (HAS TO INCLUDE THE SISCOMEX NUMBER)

LOCAL CUSTOMS SERVICE

TABLE 2: DOCUMENT TYPES TO DEMOSNTRATE LEGAL TIMBER PURCHASE, PROCESSING AND EXPORT IN BRAZIL.

*While you might be asked for all or any of the documents listed in table 2, you are more likely to be asked for those that are highlighted.

20 COUNTRY GUIDE TO TIMBER LEGALITY: BRAZIL www.tft-forests.org

As an exporter, or a manufacturer of finished products, you must have the overview and control of all timber sources that feed in to your products. It is to your advantage to be able to demonstrate legality to your customers in the USA, Europe and Australia. They rely on you for the information and evidence that they need to import your products legally. Access to this information over your competitors could help to gain market share.

What you need to know and do:

Provide documents showing legal export;

Action: establish a list/database of laws/regulations that apply to you and undertake internal audit to ensure you fulfil all of the requirements.

Understand the risks of illegally harvested timber in your product;

Action: carry out supply chain mapping (see example database in Table 3 below) to understand where your products originate. Collaborate closely with your upstream suppliers to collect information including invoices and accompanying sales documentation for species (trade and scientific name), forest of origin, complexity of supply chain, and volume.

If your supply chains are simple and timber in your product comes from a known forest

ACTIONS2.3 ACTIONS FOR EXPORTERS

source, it may be easy to demonstrate legal harvest. If your supply chains are long or complex and the harvest origins are unknown and potentially illegal, you will need to plan how to mitigate risk. The greater the risk of illegal harvest that you uncover, the more certain you need to be of the forest origins and legal harvest. Information will need to be more complete, and supporting documents checked.

Supply chain mapping and risk mitigation activities should be monitored on at least an annual basis or more often if you change suppliers and raw material sources.

Understand what further information and documentary evidence your customers in the USA, EU or Australia need.

Action: understand the requirements of your customers in the USA, EU or Australia and secure that information and evidence from your suppliers so that you can provide this to your customers.

Table 2 above includes examples of documentary evidence to help demonstrate legal export from Brazil. Additional guidance for processors can be found in the Generic Guide to Legality

TABLE 3: EXAMPLE DATABASE TO ASSIST IN MAPPING THE ORIGIN OF YOUR RAW MATERIAL SUPPLY BASE

PRODUCT 'ACME KITCHEN TABLE'

TIMBER PROCESSOR FINAL FURNITURE MAKER PRODUCT MANUFACTURER

NAME Fortune Furniture Corp

ADDRESS/LOCATION Street/city/country

ALL UNIQUE WOOD SOURCES A B C USED IN PRODUCT

MATERIAL TYPE Solid wood Veneer Fibre board

COMPONENT Table legs Table top face Table top core

SPECIES (SCIENTIFIC Fraxinus excelsior Acacia melanoxylon Populus deltoides & COMMON NAME) Common Ash Blackwood Poplar

TIMBER PROCESSOR SAWMILL PEELER COMPONENT MAKER

NAME Super Sawmill Ltd Ideal Veneers Company Best Components Ltd

ADDRESS/LOCATION street/city/country street/city/country street/city/country

TIMBER PROCESSOR MDF MILL

NAME QualityMDF Ltd

ADDRESS/LOCATION street/city/country

TIMBER PROCESSOR WOOD CHIP MAKER

NAME PopChip Company

ADDRESS/LOCATION street/city/country

TIMBER PRODUCER Natural Forest Concession Plantation forest Farming region management unit

NAME XYZ Timbers New Eucalyptus Corp Farming Group

ADDRESS/LOCATION Address/Location Address/Location Address/Location

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For more information and details on the USA’s Lacey Act, Europe’s Timber Regulation and Australia’s Illegal Logging Act and how TFT can assist, please refer to the Generic guide to Legality as well as the TFT website.

FURTHER INFORMATION3. ADDITIONAL RESOURCES

DISCLAIMERThis guide is intended as information only and does not constitute legal advice from TFT. Producers, processors and exporters who are seeking further clarity on legislative requirements should contact the legislative-making body or its nominated representative.

LACEY ACThttp://www.aphis.usda.gov/plant_health/lacey_act/index.shtml

Frequently asked questionshttp://www.aphis.usda.gov/plant_health/lacey_act/downloads/faq.pdf

EUTRRegulation (Eu) No 995/2010 of the European Parliament and of The Council http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:295:0023:0034:EN:PDF

Commission Implementing Regulation (Eu) No 607/2012 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:177:0016:0018:EN:PDF

EC guidance document http://ec.europa.eu/environment/forests/pdf/guidance_document.pdf

http://www.euflegt.efi.int/portal/home/the_eu_timber_regulation_and_flegt-licensed_timber/

AUSTRALIAN ACThttp://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r4740

SERVICE PROVIDERSTFT EUTR DDS Support: http://www.tft-forests.org/sure/

TTAP Guide to Service Providers http://tft-forests.org/ttap/page.asp?p=6228

OTHERAdditional information on Brazil can also be found at the Forest Legality Alliance website http://risk.forestlegality.org/countries/548/laws

Additional information regarding the DOF credit system can be found at the following link: http://raa.fgv.br/sites/raa.fgv.br/files/file/Wood_-_From_the_forest_to_the_consumer-baixa.pdf

COUNTRY GUIDE TO TIMBER LEGALITY: BRAZIL - TFT · COUNTRY GUIDE TO TIMBER LEGALITY: BRAZIL FURTHER...

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