Final results of the Vietnam Forest Management investigation

FSC and Assurance Services International (ASI) have concluded the Vietnam Forest Management Transaction Verification (TV) loop. The TV loop introduced an additional level of scrutiny, leading to the voluntary exit or mandated removal of non-diligent organizations by certification bodies.

FSC and ASI launched the Vietnam Forest Management TV loop in 2023 to trace the trade patterns and volume of timber-based feedstock originating from FSC-certified forests and ending in wood pellet manufacturing certificate holders. ASI collected transaction data between January to December 2022 from 56 Forest Management and 368 Chain of Custody certificate holders, covering an area of over 241,600 hectares of forest in Vietnam.

Based on the high risk volume mismatches and other integrity risks identified in the first phase of the TV loop, ASI conducted further investigations into 10 supply chain clusters, taking into consideration information earlier submitted to ASI by whistleblowers and insights from previous investigations in the regional pellet market. During the TV loop, six certificate holders were terminated by their certification body because they did not respond to the request for transaction data submission. A handful of certificate holders also voluntarily withdrew their certificates, particularly in cases where withdrawal potentially helped them avoid scrutiny.  

Main findings and actions

1. Actions resulting in blockage: ASI has recommended FSC to suspend and block three certificate holders from the FSC system. FSC is currently examining the evidence ASI has provided to initiate the blockage process. Additionally, one certificate holder who deliberately impeded the investigation is also being considered for blockage.
2. Self-billing integrity risk: Many of the Forest Management certificate holders participating in this TV loop were group entities. ASI observed that some of these group entities let the group members handle sales with buyers directly, with the buyer preparing the invoices and associated documents. However, the group entity (who holds the FSC certificate) is not aware of the sales and does not manage them as required. While sales by group members are permitted under FSC-STD-30-005 V2-1  (Standard Forest Management Groups), certain risks may arise as identified in this TV Loop, particularly in ensuring full conformity with FSC requirements.
3. Clarification on harvesting practices: FSC standards require that harvesting of products and services be conducted at levels that are permanently sustained. In this investigation, ASI identified that some acacia plantations in Vietnam are operating on shortened harvest cycles. While these operations may be certified, FSC acknowledges the potential environmental considerations associated with shortened rotation period and emphasizes the importance of consistent interpretation and application of the requirements by both certification bodies and certificate holders. Further exploration of this issue may be warranted where relevant.

The wood pellet sector is dynamic and fast growing. With a global push on emission reduction, especially from fossil-fuel generated emissions, government policy is encouraging energy companies to switch to wood pellets and other biomass fuels. In the Asia Pacific region, both the Republic of Korea and Japan have provided subsidies to further this agenda. While the Republic of Korea revoked their policy in January 2025, Japan continues to incentivise the use of biomass fuels. Vietnamese wood pellet manufacturers trade extensively with Japan, hence the demand for FSC-certified wood pellets is high. Therefore, it is very important for FSC and ASI to monitor trade and volume patterns of FSC-certified wood pellets – from forest to pellet.

The insights gained from the Vietnam Forest Management TV loop present an opportunity to further strengthen transparency and reinforce good practices across supply chains. FSC will continue to engage with stakeholders, certification bodies, and certificate holders to support the consistent implementation of FSC requirements and promote ongoing system improvements. 

Previous news release: Launch of transaction verification loop in Vietnam | fsc.org (15 May 2023) 

Preliminary results of transaction verification loop in Vietnam | fsc.org (21 May 2024)