Background

During the audit period of MaForest Operations of Westernsurveillance audit to the CANregistration cycle is over 3 yeannually. This report summaQMI-SAI Global surveillancecertification process.

Scope of Certificat

The Sustainable Forest Manathey apply to the Defined Forat Port Alberni F.O.; TFL 39,MF 61 and various Timber Lic

Certification Recom

As a result of the 12 Month SWestern Forest Products Inc.Western Forest Products Inc.maintenance and registrationrecommended for continued

Sustain

Overview of Western Fo

WFP holds the harvesting rights to nof renewable forest tenures grantedapproximately 7.2 million cubic metreWestern Hemlock and Amabilis Fir (H

WFP staff at the 5 Forest Operationsfrom initial inventories, assessmentsgrowth stand management. A comboperations.

WFP plants approximately 8 millionthe balance contracted out to other

Western Forest Products

able Forest Management System

CAN/CSA Z809-2008

y 22-29, 2012 the Holberg and Mid-IslandForest Products underwent a 12 month

/CSA Z809-2008 Standard. Thears with surveillance audits conductedrizes the audit process and results of theaudit of Western Forest Products multisite

ion

gement requirements and activities asest Areas of TFL 37 at Englewood F.O.; TFL 39 Blk 2 at Mid Island F.O.; TFL 44Blk. 1 at Stillwater F.O.; and, TFL 6, TFL 39 Block 4, FL A19244, MF 29, MF 31,enses at Holberg F.O. and Port McNeill F.O.

mendation

urveillance audit including the review of the performance of theManagement System over the past 3 years, indicate that

’s Management System meets the following criteria forto the CAN/CSA - Z809-2008 standard. WFP will be

registration to the CAN/CSA - Z809-2008 standard.

rest Products Forest Operations

early 2 million hectares of Crown and Private land on the BC coast under a varietyby the provincial government. These tenures allow the sustainable harvest ofs of first- and second-growth logs each year. The main species harvested areem-Fir), Western Red Cedar, Douglas Fir and Sitka Spruce.

certified to the CSA Z809:2008 standard manage the company’s forestry programand plans, through road building and harvesting, to reforestation and second-ination of company and contract crews carries out these activities at the forest

trees each year, with a third of these grown at WFP’s nursery near Victoria andprivate nurseries.

#R149.08.12 Rev.01

Audit Summary

The CAN/CSA Z809-2008 third-party 12 Month Surveillance audit wasundertaken by QMI-SAI Global. QMI-SAI Global is an independent thirdparty registrar that is accredited by the Standards Council of Canada(SCC) for registrations to the CAN/CSA Z809-2008 standard. Thisensures the integrity and credibility of the audit process.

To gather the evidence that shows WFP is meeting the requirements ofthe CAN/CSA Z809-2008 Standard, the audit assessed the Company’sSFM and EMS documentation, planning, active and completed harvestoperations, road construction and silviculture activities. This assessmentincluded WFP offices in Holberg, Campbell River and the head officefunctions in Campbell River as well as field sites in the Holberg and Mid-Island Forest Operations. Evidence was gathered by document andrecord reviews, observations and interviews with staff and contractors.

The following interested parties were interviewed as part of the audit:

3 members of the VINWAG (Holberg); 3 members of MIFLAG (Mid-Island); Compliance and Enforcement staff with the BC Ministry of

Forests, Lands and Natural Resource Operations for bothoperations;

DFA workers for both operations.

A total of 11 sites were field reviewed at both Holberg and Mid-Island.

No non-conformances were identified during the audit; however 5 areasof concern and 17opportunities forimprovementwere noted asdetailed in thisreport.

CAN/CSA Z809-200812 Month Surveillance

Audit

Non-conformance (NCR) 0

Areas of Concern (AOC) 5

Recommendations(OFI) 17

Positive Aspects 10

Non-conformances

Non-conformance (NCR):A systemic failure of the programParticipant’s EMS/SFM systemto meet an EMS/SFM objective,performance measure orindicator.

All non-conformances require anaction plan within 30 days.Non-conformance must beaddressed by the operation orregistration cannot be achieved /maintained.

Area of Concern (AOC):An isolated lapse in EMS/SFMsystem implementation whichdoes not indicate a systemicfailure to consistently meet anEMS/SFM objective,performance measure orindicator.

Opportunity for Improvement(OFI):Are isolated observations thatare non-critical to theachievement / maintenance ofEMS/SFM objectives.

Positive Aspects

Are features of the EMS/SFMsystem that are considered asenhancements to the expectedlevel of EMS/SFM performance.

Retention is used for several values, including visual andbio-diversity. This retention patch is on the Holberg

2

operations.

#R149.08.12 Rev.01 3

The auditors

The QMI audit team who performed the audit consisted of Nathan Ryant, RPF, EMS(LA); SFM(LA) as the leadauditor and William Sloan, RFT, EMS(LA); SFM(LA) audit team member. The auditors are ForestProfessionals and certified lead auditors.

Review of Previous Audit Non-

conformances

There were no identified non-conformances fromthe audits conducted in 2011.

Areas of Non-conformance

No areas of non-conformance were identifiedduring the audit.

Areas of ConcernThe following Areas of Concern were identifiedduring the audit:

Both Operations:o 7.3.3 Evaluation of Compliance: The audit

found 7 of 14 truck mounted fuel tankssampled that do not meet certificationrequirements and/or not secured in a propermanner at all operations audited. Inspectionshad not noted these tanks as being in non-conformance to the WFP requirements.Ensure that legal requirements fortransportation of fuel are adhered to.

Holberg Forest Operations:

o 6 Performance Measures: Ensure allindicator targets are reported on prior to thenext external audit.

o Indicator 6.3.3: The audit found that the prime falling contractor for the Holberg operations was not SAFEcertified and there is no process in place to verify that contractors are maintaining their certification.

Mid-Island Forest Operation:

o 7.4.6 Operational Control: The audit found that a grader had snowplowed dirt and snow over an S4 streamcrossing (box culvert) and introduced some road material into the stream channel. Ensure the operationalcontrols address the issue of snowplowing around streams.

WFP Holberg Forest Operations use stubbing to identify andhelp protect Karst features, as shown in the photo above.

#R149.08.12 Rev.01 4

Opportunities for Improvement

Holberg Forest Operations

5.2 Interested Parties: Consider offering the public advisory group members the opportunity to join theaudit in the field.

7.3.2 Shared Responsibilities: The NVIR SFMP states that WFP will request information from BCTSannually and there was old SBFEP blocks in the DFA. The audit found this information was not correct.

7.5.1 Monitoring and Measurement: Consider implementing a more regular inspection schedule for bridgedecks that have a potential to introduce sediment to a stream. The audit found one bridge deck withsediment that could enter a fish stream.

7.5.1 Monitoring and Measurement: Considerupdating the Tracking of Inspection spreadsheetregularly to ensure inspections are completed asper the planned frequency.

Indicator 3.1.2 for downed woody debris: considerreviewing to ensure it reflects the expectations ofthe Core indicator.

Mid-Island Forest Operations

5.2 Interested Parties: Consider other methods oftrying to get FN participation to the PAG processas efforts have been unsuccessful to date.

5.2 Interested Parties: Consider offering the PAGmembers the opportunity to join the audit in thefield.

5.5 Communications: Consider addressingMIFLAG concerns or issues with documentedresponses and action plans.

7.3.1 Defined Forest Area: Consider fixing thelink to the TFL Management Plan in the SFMP.

7.4.7 Emergency Preparedness & Response:Consider reviewing the forestry container locatedat the Menzies shop. The audit found:o although there was no fuel at the time of the

audit, there are indications that both fueland fertilizer may be stored together;

o doors not secured;o no ventilation;o no proper signage that reflects the actual contents.

Chemical conifer release of ungulate browse protectedseedling on Mid Island operation.

#R149.08.12 Rev.01 5

Opportunities for Improvement (continued)

7.4.7 Emergency Preparedness & Response: consider reviewing with (company) crews the requirementsto have suitable spill response supplies. The audit found one pickup with a fuel tank that only had whitepads and one pickup with a fuel tank with no spill kit.

7.5.1 Monitoring & Measurement: when doing facilities inspections consider including contractor equipmentwhen it is parked at the facility.

7.5.1 Monitoring & Measurement: when creating action items from inspections consider noting a specificdue date rather than the “ASAP” that the audit noted on some action items.

7.5.2 NCR Corrective and Preventative Actions: Consider amalgamating the Parking Lot items with theAction Plans to ensure they have responsibilities and due dates. May want to attach the action plans tothe meeting minutes so they can be discussed at all meetings.

Indicator 2.1.1b Regen failure: consider reviewing thetarget/variance as with the new calculation process basedon current silviculture liabilities, regeneration failure of over1,000 ha in one year could still result in meeting thetarget/variance as it’s currently written.

Indicator 6.2.A Volume of Old Growth Cedar madeavailable to FNs: consider reviewing the target to ensure itreflects the indicator.

Indicator 6.4.3 Efforts to promote capacity for FNcommunities: consider reviewing the reporting to ensure itaccurately reflects the actual results.

Positive Aspects

Holberg Operations

Vinwag schedule of meetings and speakers well inadvance to ensure attendance.

Managers from either Holberg or Pt McNeill inattendance at meetings.

The Holberg operation has an excellent compliancerecord with the MOF and a great working relationship with the C&E staff.

Good performance in meeting free growing requirements was noted for the Holberg operations.

The audit found that the Holberg operations was allowing contractors to drop off their used oil and cleanup-materials at the shop so they can be handled as part of the WFP operations;

Armouring of waterbars on completed blocks where there is the potential for water to run over the roadsurface.

Rain gauges are used to monitor for excessiverainfall that would require operations be

suspended.

#R149.08.12 Rev.01 6

Mid-Island Operations

Indicator 6.4.A around MIFLAG stakeholder representation is an excellent measure of communityinvolvement.

Excellent compliance record with the MOFLNRO.

Good tracking of SAFE Companies status was noted, with annual review of the BCFSC web site

Two contractors had their spill kits zipp tied, allowing for a quick check to see if the kit had beenopened.

Next Audit

The second surveillance audit of this current registration willtake place April 22-26, 2013. It will be undertaken on theEnglewood and Port McNeil operations as well as the HeadOffice in Campbell River.

QM-SAI Global forestry specialist group registers/certifies forest companies to ISO 14001, OHSAS 18001, CSA Z809 SFM, FSC FM & CoC,SFIS, SFI CoC and PEFC. The group, led by Sylvain Frappier F.Eng., Product Manager, Forestry Sector, consists of a highly qualified teamof professional foresters, technical and industry experts. Contact marketingservices@qmi.com for more information.

Company Contact:

Mr. Michel de Bellefeuille, RPF

Western Forest Products Inc.

Timberlands Head Office

118 - 1334 Island Highway

Campbell River, British Columbia

Canada, V9W 8C9 Phone (250) 286-4120 or e-mail MdeBellefeuille@westernforest.com

This report may only be reproduced by the intended client, with the expressconsent of QMI-SAI Global. Information in this issue is of a general nature withrespect to audit findings and is not intended to be acted upon without appropriateprofessional advice.

These two photos highlight the management of FirstNation values on both operations. The photo aboveshows how trees are left around an identified CulturallyModified Tree (CMT) to protect it during operations inHolberg; while the photo to the left shows a CMTidentified prior to harvest and protected during harvest atMid Island operations.