New Report: Discrepancies in Vietnam’s Wood Supply Chains

The TV Loop claims that suppliers could be under reporting FSC-controlled wood through its supply chains.

Tue 04 Jun 24


The world’s largest wood chip market has “some potential discrepancies” in its supply chains, leading “several suppliers to declare fewer sales than the purchases reported to their customers.”

That is according to the latest “transaction verification loop” or TV Loop, which has raised the alarm on Vietnam’s supply of FSC-controlled wood in paper, packaging, and biomass, which could enter China, Japan and South Korea.

These “TV Loops” are investigations operated by FSC’s assurance partner, Assurance Services International (ASI), to “compare and verify commercial transactions related to a specific product type, group or region over a given period.”

The most recent, which wrapped up last week, included 424 certificate holders – split into 368 chain of custody and 56 forest management certificates required to submit their transaction data from 2022. “However, 17 certificate holders did not respond,” ASI said, leading to the suspension or termination of the certificates.

The first phase of the TV loop revealed the following trends:
  • 98% of certified wood harvested in Vietnam was Acacia, while Eucalyptus was mostly imported. These are the two main timber species used to produce FSC-certified wood pellets.
  • Certified forest management units nationwide are actively growing and harvesting various timber species, including PinusTectonaStyrax, and Magnolia.
  • Timber species like QuercusTectona, and Betula are imported into Vietnam for further processing. This indicates that Vietnamese certificate holders actively engage with suppliers from diverse geographic regions, including North America, Europe and other Asian countries, demonstrating the country’s role as a critical player in the international timber trade.
  • A large number of chain-of-custody certificate holders procure timber from controlled sources. Certificate holders also make FSC-controlled wood claims on biomass sector products that are exported.
  • Some certificate holders sold products with FSC-controlled wood claims to non-certified companies, which is against the normative provisions related to FSC-controlled wood (FSC-STD-40-004-V1, clause 5.6).
  • The volume of FSC-controlled wood traded in the supply chains surpasses the volume of timber sourced from FSC-certified forests.

According to ASI, “Vietnamese certificate holders, particularly in the biomass sector, demonstrate a heavy dependence on timber from controlled sources.” Adding that “controlled wood is sourced from uncertified forests, but certificate holders have to ensure that FSC’s requirements procure the wood.”

As a result, “FSC controlled wood claims becoming more prevalent in the country, fewer forest management companies are choosing to undergo the rigorous process of certifying their forests.”

FSC—known as the gold standard—is working to promote forest management certification among smallholders and community forests across Vietnam’s vast smallholders. The initiative is “part of FSC’s drive to increase forest management certification and encourage certified supply chains to choose wood from certified forests over controlled sources.”

For more information about the TV Loop, visit the ASI website.


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