Verification of Wood Origin- Case RussiaAnna-Liisa Myllynen, Director, Forest Environment,Wood Supply03 April 2006

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Stora Enso in Brief

Publication Paper

• A world leader– 16.4 million tonnes of paper and board – 7.7 million m3 of sawn and processed wood products

• Four main divisions – Publication paper, Fine Paper, Packaging Boards

and Forest Products • Sales: EUR 12.4 billion • Approximately 45 000 employees in more than 40 countries• Market capitalisation: EUR 8.6 billion • Shares listed on Helsinki, Stockholm and New York stock exchanges

Packaging Boards

Forest Products

Fine Paper

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Stora Enso position

• Stora Enso actively works to combat illegal logging wherever the Group operates. Stora Enso also acts to prevent any other illegal activities related to the wood supply. Where Stora Enso cannot directly prevent such illegal incidents, the Group co-operates with the authorities and other stakeholders in order to improve the working environment.

• Illegal logging= Wood harvesting in violation of national laws and state laws

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Strategies to ensure origin of wood

• Recognize and analyse the risks related to legality and sustainability issues

• Focus on long term partnerships and investments• Have local representative network• Increase own logging operations • Keep the supply chains as short as possible• Offer training and cooperation to promote supplier’s awareness of

sustainability issues• Have active stakeholder dialogue and development projects

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Traceability – our most important instrument in verifying the origin

• Traceability systems– Cover all sources of

wood and fibre– Tool to verify

compliance with corporate policies and national legislation

– Can be third party verified through EMAS, ISO 14001, Chain-of-Custody, Controlled Wood

Auditing

Wood origin data

Contracts

C

B

A

External auditsD

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Traceability – case Russia

• Traceability system in Russia– Tool for verifying compliance with

corporate policies and legislation– Third-party-verified

through EMAS, ISO 14001 and FSC Controlled Wood

Auditing

Wood origin data

Contracts

C

B

A

External auditsD

• Wood in line with national laws• Environment and origin• Stora Enso auditing rights• Supplier’s commitment to

Stora Enso policies and practices

• Wood origin data from each harvesting site to SE database and GIS mapping system

– Location – Certification data– Legal documents – Volumes for control– Environmental values

• Internal audits for monitoring and development• Supplier audit to verify

– Harvesting rights & documents– Environmental issues– Labour safety

• Field audits to verify– Origin of wood, documents– Environmental issues of the site– Labour safety

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Example of supplier ranking - RussiaRanking Requirements

1-3 1. Origin of Wood -documents are not complete, or2. Harvesting company doesn’t have all documents, or3. Harvesting company doesn't have responsible person for labour safety issues.

4 1. Complete Origin of Wood –documentation in place2. Labour Safety issues are in line with legal requirements3. Harvesting according to terms of harvesting license

5-6 1. Complete Origin of Wood –documentation in place2. Labour Safety issues are in line with legal requirements3. Harvesting according to terms of harvesting license4. Additional score on forest certification or environmental policy/ management system

7 1. Complete Origin of Wood –documentation in place2. Labour Safety issues are in line with legal requirements3. Harvesting according to terms of harvesting license4. Additional score on forest certification and environmental policy/management system5. Harvesting site has all nature and multiple use values protected as defined in Stora Enso traceability system

Annually, 30 % of the contracts are audited Corrective actions required on levels 1-3 Level 4 indicates compliance with national laws and Stora Enso requirements Levels 5-7 requires sustainability performance, which exceeds the legal minimum

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Example of supplier performance -Russia

010

20304050

607080

%

1 2 3 4 5 6 7

points

Audits results 2005

% of the audited suppliers