African teak supply chains show integrity risks

The preliminary results of the transaction verification (TV) loop on FSC-certified Afrormosia, also known as African Teak, have revealed some integrity risks that have been prioritized for deeper investigation. The transaction data analysis shows volume mismatches between the declared sales and purchase data of a few certificate holders.

The Forest Stewardship Council (FSC), and its assurance partner Assurance Services International (ASI) launched the Afrormosia TV loop in July 2023. The objective of this TV loop was to identify trade patterns and volumes of certified Afrormosia (Pericopsis elata) and related products in global supply chains. There are four forest management (FM) certificate holders included in the scope of this TV loop, located in Africa, and 169 chain of custody (CoC) certificate holders, located across the world.

Along with the TV loop, ASI also conducted a Forest Inventory Fraud investigation. This investigation collected data from 21 November to 6 December 2023 from three forest management certificate holders located in Cameroon and the Republic of Congo. This enabled ASI to compare the total volume of timber produced by the FM certificate holders to the total amount of certified logs they sold and check the origins of the wood – whether it came from a certified or non-certified forest.

Some of the key findings from the analysis of the transaction data are:

• All four FM certificate holders have their own certified processing units as CoC trading partners. This structure is created in accordance with the national legislation, where forest concessionaires can process the logs harvested within their processing unit. As a result, the FM certificate holders directly transferred certified logs to their CoC counterparts. Consequently, the FM certificate holders reported no sales to CoC certificate holders.
• Certificate holders further down the supply chain reported sales of products with FSC 100% and FSC controlled wood claims. This imbalance could be explained by the direct transfer of logs to associated processing units or it could be an indication of the possibility of non-certified timber entering FSC-certified Afrormosia supply chains.
• FSC controlled wood claims account for a large portion of the total volume of purchases reported by certificate holders.
• Despite FSC’s standards not allowing certificate holders to sell their products with controlled wood claims to non-certified companies, such sales have taken place, and they are a violation of the FSC Chain of Custody Standard (FSC-STD-40-004-V1, clause 5.6).
• There are some certificate holders who are trading FSC-certified Afrormosia even though this species is not included in the scope of their certificate.

For the next phase of the TV loop – TV investigation – ASI will verify the potential volume mismatches uncovered in the first phase of the TV loop. ASI will also conduct a deeper examination of specific supply chain clusters in which integrity risks have been identified. For more information about TV loops, click here.