Integrity Risks Identified in Bamboo Supply Chains

The results of the third transaction verification (TV) loop on FSC-certified bamboo supply chains reveal that several certificate holders in China pose a serious threat to the integrity of FSC’s certification system. While some certificate holders have made false claims on their products, others have engaged in actions that pose a significant risk to FSC’s integrity and credibility.

Based on the evidence gathered by Assurance Services International (ASI) during the TV loop, FSC has blocked the following certificate holders for making false claims:

• Hangzhou Ruihe Bamboo Wood Co., Ltd (FSC-C138791): This company applied FSC 100% claims on bamboo plywood, but the origins of the raw material could not be verified. They also did not report any transactions to their certification body.
• Hangzhou Zen Bamboo & Hardwood Products Co. Ltd. (FSC-C147487) and Hangzhou Zenbamboo Technology Co., Ltd. (FSC-C192793): They sold bamboo plywood and veneers with FSC 100% claims but reported zero transactions to their certification body for three consecutive years. After the certificate of Hangzhou Zen Bamboo was terminated, a new company called Hangzhou Zenbamboo Technology was established, which obtained FSC certification. FSC has confirmed that the new company is the successor of Hangzhou Zen Bamboo. Therefore both certificate holders have been blocked.
• Nanping City Jianyang Xinen Bamboo Industry Co., Ltd. (FSC-C155776): This company sold bamboo products claimed to be FSC certified without having eligible raw materials to support these claims. Furthermore, they did not disclose these sales during the surveillance audit.
• Xuancheng Bothbest Enterprise Co., Ltd. (FSC-C165363): This certificate holder repeatedly (from 2018 to 2022) obtained certification and then voluntarily terminated their certificate within 12 months each time. This enabled them to skip the first surveillance audit after getting certified. During the timeframe of this TV loop (July – December 2021), they sold bamboo products with FSC 100% claims but reported no transactions with FSC claims in the documents submitted to their certification body.

FSC is investigating several other cases where potential integrity risks were identified by ASI. More certificate holders within the bamboo supply chain may be blocked as a result. Information about blocked organizations can be found in FSC’s public search.

In addition to false claims, the following integrity risks and wrongdoing by certificate holders were identified in this TV loop:

• Some certificate holders did not report the sale of certified products to their certification bodies during the annual surveillance audit, which is a normative requirement by FSC. These sales were discovered when the certificate holders or their clients within the supply chain submitted their transaction data for the TV loop.
• The investigation revealed that there is a risk of a blocked organization who is continuing their wrongdoings but routing them through a valid certificate holder. This typically happens when personnel in decision-making and leadership positions at an active certificate holder previously managed a blocked organization.
• Some certificate holders were observed as being uncooperative, hindering the progress of the TV loop.

Most certificate holders against whom evidence of integrity risks has been found belong to the manufacturing segment of the FSC bamboo plywood/flooring supply chain, primarily located in China. Consequently, products with false claims could eventually be passed on to downstream buyers, including retailers or distributors in import markets, primarily in Europe and North America.  

Transaction verification investigations and analysis of certified supply chains will help FSC to strengthen its normative framework. Observations from this investigation would be included in the ongoing revision process of FSC’s chain of custody standards. For more details, click here: Revision of Chain of Custody Standards and FSC-STD-20-011 Chain of Custody Evaluations | FSC Connect

Certificate holders purchasing manufactured bamboo products are encouraged to conduct their own due diligence on FSC-certified suppliers and verify that the purchased products are correctly covered by the scope of the suppliers’ FSC certificates.

Read more about this TV loop here:

• Launch announcement: FSC revisits integrity of bamboo supply chains | fsc.org (June 30, 2022) 
• Preliminary results: Potential risks identified in bamboo supply chains | fsc.org (July 4, 2023) 

Background

About TV loops on FSC-certified bamboo:

FSC and its assurance partner Assurance Services International (ASI) launched the third TV loop on FSC-certified bamboo supply chains in June 2022. The scope of this TV loop included:

• 425 certificate holders, out of which 311 are located in China. All certified bamboo forests originate in China, thereby making it a significant producer and manufacturer of bamboo products.
• Geographically, other than China, certificate holders from the United States (22), Germany (16) and 20 other countries across the world were included.
• Certificate holders included in the scope of this TV loop submitted their transaction records for the following period: July 2021 to December 2021.

In the past, FSC and ASI have conducted two TV loops on bamboo supply chains. The previous Bamboo TV loops conducted in 2018 resulted in nine organizations being blocked due to false claims in the sales of FSC bamboo plywood or flooring products. For more information about the previous TV loops on FSC-certified bamboo supply chains, click here.

About the tools and mechanisms FSC uses to protect the integrity of its supply chains:

FSC takes any supply chain integrity violations seriously. FSC may block such a company, or the certification body may suspend or terminate their certificate. For more information about FSC’s position on false claims, click here.

Prior to getting certified, organizations applying for certification are required to complete the FSC Check process. FSC Check is a tool that reveals any connections that an applicant for certification might have with disassociated or blocked organizations. In addition, FSC is in the process of updating its normative requirements related to Chain of Custody certification and auditing approaches of certification bodies.  Through these revision processes, normative gaps related to integrity matters are being addressed. Interested stakeholders are invited to observe and comment on the revision processes. For more information about ongoing revisions and opportunities to participate in these revision processes, click here.