Integrating TVD Audits into Ghana Wood Tracking System to Improve Legality and

Forest Governance

RICHARD GYIMAH (PhD)

Verification/Audit Manager, TVD-FC

Presentation outline

Brief Illustration of Ghana’s Timber Legality Assurance System (GhLAS) Highlights of chain of custody system- GWTS

Key institutional roles

Legal Timber Audit Approach Scope of Timber Legality Verification

How it operates and at what levels

Legality verification outputs and corrective actions mechanisms to improve compliance

Access to TVD Audits

BRIEF ILLUSTRATION OF GHANA’S LAS WITH HIGHLIGHTS ON GWTS + KEY INSTITUTIONAL ROLES

Ghana’s Timber Legality Assurance System

Aim:

Provide assurance to the Legality of all Timber exports to International market destinations, especially the EU and also the domestic market

Components of GhLAS:

Legal timber definition

Chain of custody system driven by a Wood Tracking System (WTS)

Verification system

Independent Monitoring

FLEGT License Issuance

LEGALITY (FLEGT) LICENSING SYSTEM

FLEGT License

EU

Exports

Domestic

ALL destinations must satisfy full legality qualities

EXPORTPERMIT

Timber SalesTimber Sales

INSPECTION CERTIFICATE

EU Destinations

Other Export Destinations

COC & LAS TOOLKIT CORE MODULES

Sources – Forests / plantations /salvage & confiscated timber/ imports

Processes – Transformation of timber / movement of products

Reconciliation – Monitoring changes along the supply chain & validation

Legality audit – Monitoring legal compliance through the supply chain

GWTS Forest Info

Source Documentation

Forest Measurement

Log production

Log transport

GWTS Industrial Timber Processing

Wood material

Sawn timber

Plywood

Finished Products

GWTS Sales

Domestic Trade

Export Trade

Customs

GWTS Audit

Legality standards

Audit planning

Reconciliation & Legality checks

FLEGT Licensing

Ghana’s Wood Tracking System - Supply Chain & Legality Applications

Key Institutional Roles under Forestry Supply ChainForest Reserves Map of Ghana

Forest Service Division

(FSD)

• Forest Management & Development

• Regulation of Harvesting

Timber Industry Development Division

(TIDD)

• Monitor flow of timber from forest to mill

• Implement all national timber trade practices

• Industry Regulation & Development

FC-HQ(TRAU & FINANCE)

• TRAU- Assist CE in timber rights allocation procedures

• FINANCE- Revenue collection & disbursement

Timber Validation Department (TVD)

• Internally placed auditor

• Compliance monitoring and reporting

Resource Management Support

Centre (RMSC)

• Sets standards for Forest Management

• Forest quality assurance

London Office (LO)

• Trade Promotion

Ministry of Lands & Natural Resources

(MLNR)

• Forest Policy & Legislation

• Grant of Timber Rights (TUC)

• Overall monitoring of the forestry sector

FORESTRY COMMISSION

Timber industry• Logging

• Transformation• Trade data

LEGAL TIMBER AUDIT SCOPE/METHODS/APPROACH

Legal Timber Audit by the Forestry CommissionA new Timber Validation Department (TVD) in the Forestry Commission (FC) is responsible for legality audits

Key roles of TVD include:

Remains at arm’s length as a verifier (i.e. “internal auditor”)

Validate control processes and outputs of the divisions/units of FC at the critical supply chain control points from source of timber to point of export or sale via WTS platform and periodic conventional audit

Application of auditing principles and protocols in performing the verification and validating functions

SCOPE OF TIMBER LEGALITY VERIFICATION

Principle Control Points (Legality Areas) No. of Criteria

1 Source of Timber 2

2 Timber Rights Allocation 4

3 Timber Harvesting Operations 7

4 Transportation 2

5 Processing 2

6 Trade 2

7 Fiscal Obligation 4

Legality matrix guides the determination of legality of timber for export

or domestic market

Consists of 7 Principles and 23 key Criteria

Ghana’s Timber Verification Approach

Level 4:

External audit requirements

Level 3:

Internal audit requirements

Level 2:

Inspection/enforcement requirements

Level 1:

Execution requirementsDivisions/Dept/Units of FC and Timber Companies performing assigned roles

Checks within Divisions, Dept./Units of FC to ensure level 1 requirements are done

TVD conducts sample verification & validation of outputs from FSD, TIDD, Timber Companies through routine audit

Independent Monitor conducts sample checks of the entire system annuallyCivil society groups have

opportunities to be involved in these audits

Compliance evidence available at

divisional level

Legality

Standard

requirements

Compliance to

requirements

by operators,

or FC divisions

Inspection of

compliance at

divisional level

Verification of mandatory requirements

Supply Chain

(WTS)

requirements

Ghana Legality Assurance System (GhLAS)

Requirements

Independent Monitor of the GhLAS (External Auditor)

Licensing Internal Audit

Verification Licensing mandatory

Schematic Illustration of Ghana’s Verification Approach

1ST level Verification

2nd level Verification

3rd level VerificationBy TVD

HOW THE 3RD LEVEL VERIFICATION BY TVD AUDITORS IS DONE

A hybrid application of field audits by TVD Auditors and a Wood Tracking System (WTS) for data reconciliation and validation

Documented Audit system in place which comprise of:

▪ Verification protocols (e.g. Sanctions & CAR, Audit protocols, Complaints, IM, etc.)

▪ Supporting documents (e.g. Administration, Forest, Transport, Mill Processing & Trade checklist)

▪ Contract documents (e.g. Observer role of Civil Society)

▪ Work instruction

▪ Guidance documents

▪ Policy documents

Application of Audit principles in the conduct of legality verification

Use of WTS platform to upload legality verification results which will enable the issuance of FLEGT License

3RD LEVEL LEGALITY VERIFICATION OUTPUT & CORRECTIVE ACTION MECHANISM TO

IMPROVE COMPLIANCE

What does the Field Legality Verification Audit Do?

Raises Corrective Action Requirements (CARs) against practices that have not conformed to the list of VPA legality criteria and indicators

Communicates the CARs to all Auditees – Industry and FC actors

Requires all Auditees to close the CARs raised and communicated to them within a given time frame to assure compliance for legality licensing

Licensing

Forest offence

Compliance with

Legality Standard

Non-compliance

management

Not resolved through Non-compliance

management process

Resolved through Non-

compliance management

Compliance with WTS

X No License

Failure to comply

with administrative

duty

Non-compliance

detected

√ License

LEGALITY VERIFICATION OUTPUTS RECORDED & KEPT ELECTRONICALLY

✓ Results of timber legality verification are now properly stored and can be easily retrieved for FLEGT license decision by the Licensing Authority

Example of a CAR addressed to a Company 01/08/2016

THE MANAGING DIRECTOR,

XXX COMPANY LTD

ODA

Dear Sir/Madam,

Corrective Action Requirements: TVD Legality Audit in the Kade Forest District in April 2016

Please find below company-specific legal timber non-compliance observed through TVD audit for your

information. Kindly take steps to effect the necessary corrective measure before TVD’s next audit cycle

during the last quarter of 2016.

Yours sincerely,

Chris Beeko

Director, TVD

cc: Chief Executive, FC

Forest

District

Geographic scope Non-compliance(s) Criteria/Indicator Responsible FC

Div./Organization

Kade Nsuensa Forest Reserve -Compartment 12

Criterion 3.2.2: Logger did not observe correct logging practices as outlined in the FC-Logging Manual.

In compartment 12 of XXX felling area, tree numbers 334-Sapele, and 1545-Edinam were found to have been felled outside the approved yield by the company without authorization.

FSD

Examples of Non-Compliance Identified for Corrective Action

“Red flags”- showing data inconsistency

Bad environmental logging practice

Incorrect metric data measurements

Bad health & safety in the mills

There is greater awareness of legality compliance requirements by both FC Divisions and Timber CompaniesAreas of compliance improvements include:- Efforts at addressing social issues through SRA documentation and reporting- Forest hygiene- Payment of stumpage fees (statutory taxes for Government & Landowners)

0

10

20

30

40

50

60

70

80

2015 2016

6961

78

50

SUMMARY OF AUDITEE NON-COMPLIANCES IDENTIFIED FOR 2015 & 2016 AUDIT CYLES

FC CAR Company-related CAR

SUMMARY OF LEGAL COMPLIANCE TRENDS FROM TVD AUDITS

ACCESS TO TVD AUDITS

How to Access TVD Audits - Current Opportunities

The Ghana’s wood tracking system is a data source for accessing TVD Legality Audits Civil society is exploring the possibility of a web portal to interface with GWTS under a EU-sponsored

project

Summarized TVD audit reports can also be made available to stakeholders upon request to the Forestry Commission

Public summary reports from the Independent Monitor on the entire GhLAS including TVD audits to the JMRM will be available to all stakeholders

VPA annual reports submitted to the JMRM will contain information on TVD audits and how non-compliances have been or are being addressed

It is important to note that as the VPA implementation becomes fully operational in Ghana, not only will access to information become key but also security & interpretation of data as well as confidentiality of information

THANK YOU

yawgyimah1968@gmail.com