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The fourth transaction verification (TV) loop on FSC-certified charcoal has been concluded. One company, Califórnia Biomassa, was blocked by FSC for not cooperating with Assurance Services International (ASI) during the investigation and hindering the process. FSC will consider ASI’s recommendations to standardize the content and the way in which information about volume of material traded within supply chains is recorded and reported by FSC certificate holders. This will reduce the risk of volume mismatches and information gaps.
This TV loop was launched in 2020 by FSC and its assurance partner, ASI, to examine the transaction records from 2019 of all companies belonging to FSC-certified charcoal supply chains. To read FSC’s announcement, which was issued when this TV loop was launched, click here. At the end of the first phase of this TV loop, ASI found potential volume mismatches and false claims that emerged from the data analysis.
Based on the findings of the first phase, ASI identified the high-risk supply chain clusters for closer investigation. These clusters originate in Eastern Europe, Africa, and South America. The final products predominantly end up in Central Europe.
In the second phase of the TV loop, ASI further investigated the risks and allegations and clarified the specific reasons for mismatches. It emerged that the discrepancies found earlier were a result of differences in financial reporting practices between organizations and human error.
In most cases, the original mismatches in declarations originated from differences in the accounting periods between sellers and buyers, who presented volume information for different timeframes. Human errors associated with inclusion of irrelevant invoices was discovered as a common reason for mismatches too.
Due to the ongoing conflict in Ukraine, ASI had to pause the transaction verification activities for Ukrainian companies with FSC-certified charcoal in their certificate’s scope. However, FSC and ASI will continue to monitor the charcoal supply chains and conclude any pending actions as soon as the situation allows it.
To read about the preliminary outcomes of this TV loop, click here.
To read more about older TV loops on FSC-certified charcoal, click here.
To read about FSC’s strong position against companies that make false claims, access our Position Paper here.