PEFC UK Limited Jupiter House, High Street, Tattenhall, Cheshire, CH3 9PX United Kingdom Telephone +44 (0) 1829 770438

Email info@pefc.co.uk Web www.pefc.co.uk Promoting Sustainable Forest Management

29th November 2007 GUIDANCE FOR THE IMPLEMENTATION OF PEFC CHAIN OF CUSTODY FOR SPECIFIED PROJECTS Informative document 1 INTRODUCTION

This Guidance has been developed by PEFC UK Ltd. in co-operation with the PEFC Council and the PEFC Council Chain of Custody Working Group. It was approved by PEFC UK Ltd. on 29th November 2007. The PEFC Chain of Custody Standard (Annex 4 of the PEFC Council Technical Document) provides a mechanism to enable businesses to make claims regarding the content of timber from sustainable managed forests or of recycled woody material in a particular product or structure. 1.1 PURPOSE

This document provides guidance on the implementation of the requirements of Annex 4 of the PEFC Council Technical Document (Chain of Custody of Forest Based Products – Requirements) covering any specifically defined project where PEFC certified timber and timber products or recycled timber material is used.
The implementation and certification of the PEFC chain of custody at the project level is specific in the terms that it is only linked to and valid for a time and site specific project rather than on-going and continuous production or trade of PEFC certified products.

The information given here should be read in conjunction with Annex 4 which is the definitive and controlling statement.

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1.2

REFERENCES

The information given here is taken from the following PEFC Council Annexes to the PEFC Council Technical Document (as adopted and amended by the PEFC Council, as published: www.pefc.org): Annex 1: Annex 4: Terms and Definitions Chain of Custody of Forest Based Products - Requirements

Appendix 1: PEFC Council specification for the origin for the purposes of PEFC label and declarations Appendix 6 Specification of the origin for the purposes of PEFC label and declarations covering recycled raw material

Appendix 7: Implementation of requirements for the avoidance of the procurement of raw material from controversial sources
The following appendices to Annex 4 may also assist in the application of the Guidance Appendix 2: Appendix 3: Implementation of Chain of Custody within ISO 9001:2000 Implementation of Chain of Custody within ISO 14001:1996

Annex 5:

PEFC Logo Use Rules

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1.3

TERMS AND DEFINITIONS

The relevant definitions as given in Annex 4 apply, together with the following definitions specific to this Guidance: Controlling Entity A Controlling Entity is an organisation which has overall control and management of a specifically defined project. Project A project is a clearly defined tangible product, or group of related products forming a functional unit, manufactured and/or assembled at one particular site (exceptionally at an integrated series of sites, e.g. a ship built at one site and fitted out at another).
Note 1: The term “project” used in this guidance is equivalent to the term “production batch” used in Annex 4. Note 2: Examples of a project include: a ship, a new building such as stadium or office building, the refurbishment of such a ship or building, etc.

Project Member A Project Member is an organisation involved in the procuring and installing of raw material or products for a specifically defined project. The term does not include organisations involved in the manufacturing or replacing of products at a location other than the project site or sites.

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2

BASIS FOR CLAIMING PROJECT CHAIN OF CUSTODY

Any one project will entail a range of different suppliers providing differing contents of certified materials. In such circumstances physical separation becomes meaningless and so a single Project Chain of Custody is derived by calculating the percentage of certified material incorporated into the project. 3 3.1 PERCENTAGE BASED METHOD Application of the percentage based method

Project Chain of Custody is based on the total input of certified raw material to the whole project enabling a single claim to be made for the proportion of certified raw material involved. 3.2 Project

Annex 4 requires that chain of custody requirements shall be implemented for a specific production batch. In the case of Project Chain of Custody the specific project is considered to be the production batch to which the chain of custody process shall be applied. The chain of custody process entails the identification and quantification of (a) certified, (b) neutral and (c) other raw material utilised, and then the calculation of the certification percentage. It is this percentage value that can then be claimed. In this context the project must be limited to: a) the product, or part or group of products, covered by the chain of custody, b) the single site at which the project was manufactured or assembled, c) the time period over which the project was manufactured or assembled. The project must correspond to the product, construction or part thereof for which a project chain of custody is to be claimed. Examples are given below:
The coverage of the project The whole building, e.g. the Olympic stadium, including supporting material Roof element of the housing project “abc” Chain of custody claims X % of the woody raw material used in the Olympic stadium construction, including supporting material, was PEFC certified. X % of the woody raw material used in the roof element of housing project “abc” was PEFC certified. X % of the woody raw material used in the reconstruction of ship “xyz” was PEFC certified.

Reconstruction of the ship “xyz”

The project can cover several products (e.g. several buildings), however in such a case all of them shall together form a single functional unit. Unlike the position for batch certification, where there is a time limit of three months, the time period for project certification is not limited and corresponds with the duration of the manufacturing and assembling of the project, (provided that a simple percentage calculation method is applied, see below).

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3.3

Identification of origin

The Controlling Entity is responsible for ensuring that all raw materials procured for the project, either directly by that entity or by other Project Members, are identified and verified as being (a) certified, (b) neutral or (c) other as defined in Annex 4, chapters 3.2.1 and 3.2.2 and with reference to Appendix 1 and Appendix 6 of Annex 4. For each delivery the identification must cover supplier, date of delivery, volume (or weight) and certified status, including percentage of certified raw material (Appendix 1 and Appendix 6 apply). For each supplier of PEFC certified raw material the identification must include verification of the supplier‟s chain of custody or forest management certification through provision of copies of PEFC recognised certificates based on the definitions in Appendix 1 and Appendix 6. Project Members are responsible for providing the Controlling Entity with verifiable information on the receipt of all certified raw material as a part of this overall identification of inputs. 3.4 Calculation of certified percentage

The certified percentage for the project is calculated as a simple percentage in compliance with Annex 4, Chapter 3.3.5 (which states that the claim on the content of certified raw material must be based only on raw material used in that specific project). It is clearly necessary that a single common unit of measurement is used in calculating the certified percentage. Chapter 3.3.2 of Annex 4 requires “that the organisation shall calculate the certification percentage based on a single measurement unit used for all raw material covered by the calculation”. Where a complex variety of products have been incorporated in the project the determination of such a single measurement unit can be difficult. If the Controlling Entity is able to demonstrate that a common volume or weight unit cannot be found, either based on an official or on an internally derived conversion ratio, then the calculation can be based on values in a single currency.
NOTE: The certification body reviews the justification for a decision by the Controlling Entity to use monetary values and requires evidence to demonstrate that a common unit in volume or other appropriate terms could not be found.

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3.4.1

Transfer of the calculated percentage to output

The certification percentage is transferred to the output product (“the defined project”) using the average percentage method in compliance with Annex 4 chapter 3.5.2. This means that the calculated certification percentage refers to the whole defined project only and cannot be distributed its constituent parts 3.5 Sale of products (including communication of certified status)

The calculation of the simple percentage of certified material by the Controlling Entity can only be done after the completion of the project when all raw materials have been procured, delivered and identified as (a) certified, (b) neutral or (c) other raw material. However, the Controlling Entity can obtain a Chain of Custody Certificate to indicate the expected content of certified raw material before the completion of the project if he/she is able to demonstrate the anticipated content of certified raw material to be used based on commitments entered into during the planning stage regarding specifications and contractual relationships with suppliers. In this event the compliance between the planning stage claims and the final calculation based on delivered raw material must be verified by the Controlling Entity as a part of the internal audit and then subsequently by a certification body during the third party audit. The Controlling Entity can only use the PEFC Logo (based on a PEFC Logo Usage Licence issued by the PEFC Council or the relevant PEFC National Governing Body) once it has obtained a Chain of Custody Certificate. Any usage of the PEFC Logo with reference to the specific project is considered as an „on-product usage‟ and can only be applied when the content of PEFC certified raw material (or sum of PEFC certified and PEFC recycled raw material) exceeds 70 %. The on-product usage of the PEFC Logo before the completion of the project is only possible where the “expected” content of the certified raw material (see above) exceeds 70 %. Both communication of the content of certified raw material and the usage of the PEFC Logo before the completion of the project should include a claim on “expected” content calculated during the planning stage. 3.6 Controversial sources

The Controlling Entity is responsible for establishing measures, in compliance with chapter 3.6 of Annex 4 and Appendix 7 to Annex 4, to ensure that uncertified products supplied to the project through the Controlling Entity or through a Project Member do not originate from controversial sources. The Controlling Entity and Project Members are responsible for obtaining from their suppliers self-declarations that the supplied uncertified products do not originate from controversial sources. The Project Members must provide any such self-declarations to the Controlling Entity.

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The Controlling Entity is responsible for carrying out a risk assessment for the all supplies of uncertified products delivered directly to the Controlling Entity or to the Project Members. The Controlling Entity must also carry out a subsequent second or third party verification programme where the risk has been classified as high. The Controlling Entity should enter into a contractual, or other agreed relationship, with Project Members whereby it can implement such second or third party verification programmes of the supplies to Project Members. 4 MANAGEMENT RESPONSIBILITIES

The Controlling Entity is required to establish a management system in accordance with the following elements of this guidance, and of Annex 4, to ensure correct implementation and maintenance of the Project Chain of Custody process. The management system shall also cover activities performed by Project Members. SUMMARY OF APPLICATIONS AND RESPONSIBILITIES Ref 3 3.1.2 3.2 3.3 3.4 3.5 3.6 3.6.2 3.6.3 3.6.3 4 4.2 4.2.1 4.2.2 Responsibilities Controlling entity Project member Chain of custody process - percentage based method Definition of the Project YES NO Identification of the origin of YES YES (for its own supplies) supplied raw material Calculation of the certification YES NO percentage Transfer of the certification YES NO percentage Sale and communication YES NO
(including PEFC Logo usage)

4.2.3 4.3 4.4

Controversial sources YES Self declaration YES Risk assessment YES 2nd and 3rd party verification YES Management system requirements Management responsibilities YES Top management YES commitment A person with overall YES responsibility (project manager) Periodic review YES Documented procedures YES Record keeping YES

YES YES NO NO NO NO NO

NO NO NO
(provides records on supplied raw material to the controlling entity)

4.5 4.6

Resource management Inspection and control

YES YES

NO NO

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SUMMARY OF THE USAGE OF THE ALTERNATIVE APPENDICES FOR THE DEFINITION OF THE RAW MATERIAL ORIGIN (APPENDIX 1 AND APPENDIX 6 TO ANNEX 4) Appendix 1 Usage of declarations (content of) “PEFC certified” material “PEFC certified” material certified other other other neutral Appendix 6 “PEFC recycled” material other other other certified neutral

Raw material classification PEFC certified raw certified material PEFC uncertified (other other than recycled) Pre-consumer recycled other Post-consumer recycled neutral Non-wood based neutral Usage of PEFC Logo and claims 70 % of PEFC Minimum threshold certified raw material Claims “Promoting SFM” PEFC Logo

70 % of PEFC certified + PEFC recycled raw material “Promoting SFM and recycling” PEFC Logo with the Mobius Loop symbol

PEFC Logo usage

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EXAMPLE OF THE APPENDIX 1 AND APPENDIX 7 USAGE Supplies: PEFC certified raw material PEFC uncertified raw material Pre-consumer recycled Post-consumer recycled Non wood raw material

45 t 30 t 10 t 75 t 80 t

Note 1: Only the actual percentage of PEFC certified raw material in supplied products can be counted as “PEFC certified raw material”. The rest shall be counted as “un-certified raw material” Note 2: PEFC un-certified raw material shall be verified as not originating in controversial sources. Appendix 1 Appendix 6 “PEFC certified” material
“Product includes 53 % of PEFC certified raw material”

“PEFC certified” material

Usage of declarations (content of)

“PEFC recycled” material

“Product includes 28 % of PEFC certified raw material and 47 % of PEFC recycled raw material” 45 t 80 t 115 t (30+10+75) 28 % 75 t 80 t 85 t (45+30+10) 47 %

Raw material classification 45 t Certified 155 t (80 + 75) Neutral 40 t (30 + 10) Other Certification percentage 53 %

YES (28 % + 47 % = 75 %) > 70 %)

Meeting the PEFC Logo usage 70 % threshold

NO (53 % < 70 %)

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