Action on Potential Fraud in Plywood Supply Chains

FSC suspends and terminates several FSC certificates in the plywood supply chain.

This move comes after systematic violations of FSC certification requirements were uncovered in an extensive investigation by ASI and FSC into plywood supply chains using tropical face veneers. The violations were made by companies that were trading non-certified plywood products as certified. 

FSC chain of custody certified companies trading plywood products using calophyllum were investigated. The investigation revealed that the Jiangsu High Hope Arser group of companies and the group’s processing manufacturers had inflated volumes of certified wood and were selling it as FSC certified into the European market. Two of these certificates have now been suspended pending further investigation, and four have been terminated. Further investigations involving other companies are still ongoing and may lead to additional suspensions or terminations. 

Terminated certificates: 

• Jiangsu High Hope Arser Co., Ltd SCS-COC-005079
• Pizhou Arser Wood Co., Ltd. SCS-COC-003910
• Linyi Jujin Wood Products Factory SCS-COC-005939
• K-Sun Wood Company Limited SCS-COC-005572

Suspended certificates:

• Linyi Arser Haode Wood Co. Ltd SCS-COC-004969
• Huaian Arser Wood Co., Ltd. SCS-COC-003753

Suspended companies must now introduce specific actions to correct their wrongdoings. Until the suspended companies have been cleared of wrongdoing, they cannot use the FSC trademark or FSC license. Companies with certificates that have been or will be terminated as a result of this investigation are automatically expelled from the system and will no longer be allowed to trade with an FSC license. 

The actions taken against these businesses mean that from the suspension/ termination  they can no longer make any FSC sales claims or label products as FSC certified. Furthermore, any products that are already in circulation on the market and have been identified as originating from a specific false claim (based on the investigation’s findings) are currently being removed from the market as FSC products (through FSC’s non-conforming products procedures). Any product in circulation on the market that is not connected to a specific false claim, remains valid and can continue to be traded with FSC Claims or labels.

Through this action, FSC demonstrates that its highest priority is the integrity of its brandmark distinguishing responsibly procured wood and wood-based products. By thoroughly investigating suspected violations, FSC acts to ensure that the companies found to misuse the FSC label cease doing so and are otherwise penalized.  

FSC is implementing several integrity measures in high-risk supply chains to reduce certification violations in the system. This includes a blockchain-based transaction verification platform to enhance assurance across its supply chains.

Transaction verification

Plywood manufactured in China has been identified as posing a risk of false FSC claims. Consequently, in July 2019, FSC and ASI launched a transaction verification for some plywood supply chains, which brought this case related to the Jiangsu High Hope Arser group of companies to light.

Transaction verification is the process of comparing and verifying all transactions relating to a specific product type, group or region over a given time period. In this case, certificate holders that traded calophyllum were required to submit to transaction verification for purchases and sales for the first two quarters of 2019. ASI provided FSC an initial report of the analysis of the transaction verification.

Calophyllum is a type of tropical flowering plant in the family Calophyllaceae. It is mainly distributed in Asia, but some species can also be found in Africa, the Americas, Australasia, and the Pacific Islands.

FSC will provide additional updates as its investigations continue.