SFI Update

Forest Legality

Alliance Meeting

May 7, 2014

Kathy Abusow

President and CEO

Outline

• SFI Introduction

• How SFI Addresses Legality

• Meeting EUTR Requirements

• SFI Standard Review Process

SFI Board of Directors

SFI Forest Certification on

the Rise

April 2013

SFI Forest PartnersSM

Program

Multiple Standards Improve All

Forest Certification Programs

10% of the World’s Forests

are Certified

December 31, 2012

How do we

improve forestry

on this 90%?

8

32 PEFC Endorsed National

Certification Systems 30 FSC Approved Standards

Russia

U.S.

UK

Global Context

SFI’s Global Position

• 98% of the fiber sourced by SFI program participants

for their North American facilities comes from the U.S.

or Canada

• Yet illegal logging is a critical global issue that SFI is

addressing through:

– Partnerships/tools

– Key requirements in our standard

– Support for regulation

9

Working with Partners

10

• SFI awarded $90K grant to WRI to support

the Forest Legality Risk Tool, also

supported by USAID and others.

• Open access, map-based, global

information hub designed to assist users in

conducting due diligence on forest trade.

• Tool was publicly launched June 2012

• Useful not just for SFI Program Participants

but for whole marketplace

Number of grants awarded since 2010 33

SFI investment $1.3 million

Total value with partner contributions $4.8 million

SFI Conservation Grants

11

SFI 2010-2014 Standard

12

• Legal compliance continues to be a foundation (Objective 14)

• Specific requirements related to offshore fiber sourcing (Objectives 11, 12, 13)

• Board policy on illegal logging

SFI Standard

Objective 14. Legal and Regulatory Compliance.

• Compliance with applicable federal,

provincial, state and local forestry and

related social and environmental laws and

regulations… in the country in which the

Program Participant operates

SFI Standard

Objective 12. Avoidance of Controversial Sources

including Illegal Logging.

• Performance Measure 12.1. Program Participants

shall ensure that their fiber sourcing programs

support the principles of sustainable forestry,

including efforts to thwart illegal logging.

• Indicators include: risk assessment, risk mitigation,

promotion of sustainable forestry, documented

information

SFI Standard

Objective 13. Avoidance of Controversial Sources

including Fiber Sourced from Areas without

Effective Social Laws.

• Performance Measure 13.1. Program Participants shall avoid

controversial sources and encourage socially sound practices.

• Indicators address risk related to

– workers’ health and safety;

– fair labor practices;

– indigenous peoples’ rights;

– anti-discrimination and anti-harassment measures;

– prevailing wages; and

– workers’ right to organize

SFI Policy

SFI developed policy in 2008 – designed to consider the full set of operations of program participants.

• “SFI Inc. will not license any person or entity to use SFI’s trademarks or labels, and SFI may revoke any license previously granted, if the proposed licensee or an Affiliate of the licensee has been found to have engaged in Illegal Logging by a government authority in the jurisdiction where the logging occurred…”

• “…or if the evidence available to SFI supports a conclusion that…the proposed licensee or an Affiliate of the licensee has engaged in a pattern of Illegal Logging…even if the licensee has not been subject to government enforcement actions…”

Forest Certification in a

Regulatory Context

Evidence of legality and sustainability can be… independent certification of the timber and timber products by any of the forest certification schemes that meet the policy requirements (such as FSC and PEFC)

- Central Point of Expertise on Timber Procurement (CPET)

“In order to recognize good practice in the forestry sector, certification or other third party verified schemes that include verification of compliance with applicable legislation may be used in the risk assessment procedure.”

- EU Timber Regulation

EU Timber Regulation

NEWS RELEASE: SFI APPLAUDS EU’S NEW ILLEGAL LOGGING RULES

FOREST CERTIFICATION WILL BE A KEY TOOL IN EFFORTS TO CRACK DOWN ON ILLEGAL LOGGING

EU Timber Regulation

March 2013 Fact Sheet:

Addressing EUTR

Requirements through SFI

Certification

EU Timber Regulation

SFI Standard addresses criteria for certification systems laid out in European Commission Implementing Regulation (July 2012) and Guidance (February 2013):

• Publicly available system of requirements

• Third-party audits by independently accredited certification bodies

• Tracking fiber through supply chain

• Ensure illegally harvested timber does not enter the supply chain

• Compliance with international standards

• No substantiated reports about problems with schemes

EU Timber Regulation

“Introduction of the EUTR represents a significant shift

in Europe towards a management systems approach to

environmental procurement – an approach that the SFI

Program pioneered well over a decade ago. Through

SFI’s fibre sourcing requirements, the SFI program

stands apart from other forest certification programs by

addressing the fact that all forest landowners play a

critical role in the long-term health and sustainability of

forests — and that 90 percent of the world’s forests are

not certified.”

- Rupert Oliver, Forest Industries Intelligence Limited

Development of the SFI 2015-

2019 Standard and CoC

• Begins in June 2013, 18 month process

• Two public comment periods

• 10 public workshops

• Addresses: – forest management

– fiber sourcing

– chain of custody

• Process completed in December 2014

• New standard will be effective January 1, 2015

Standard Revision Workshops

• September 17, 2013, San Antonio, TX (at SFI Annual Conference)

• November 2013, Washington DC

• January 2014, Vancouver, BC

• January 2014 Edmonton, AB

• January 2014, Portland, OR

• February 2014, Charlotte, NC

• February 2014, Memphis, TN

• February 2014, Quebec City, QC

• February 2014, Portland, ME

• March 2014, Minneapolis, MN

Exact locations and dates to be announced in June