VLTP being implemented as from 01.01.2006 in Russia Khabarovsk region of the Russian Far East:

1. ‘VALIDATION OF LEGAL TIMBERPROGRAMME’(VLTP) Russian Far-East Khabarovsk RegionIllegal Logging Update and Stakeholders Consultation 20.01.2006 Chatham House, London

2. ‘VALIDATION OF LEGAL TIMBERPROGRAMME’(VLTP):BECOMING OPERATIONAL • VLTP being implemented as from 01.01.2006 in Russia • Khabarovsk region of the Russian Far East: • first region to implement VLTP • the 2nd largest timber producing region in Russia • annual harvest of over 9 million cubic meters • 8 million m3 produced for export • 99% to China, Japan and Korea (China over 60%) • 200 logging & processing companies (some international) • forest system based on concessions(long term lease of forest resources) and annual permits

3. WHAT IS VLTP? • a programme of independent timber legalityverification designedbySGS • an alternative but complementary / stepwise approach to responsible FM and Certification • a tool designed to meet the requirements of international mechanisms (eg. ENA FLEG, EU FLEGT) – VLTP Statements could serve as a basis for issuing official export permits • a scheme implemented in the Khabarovsk region under regional government mandate and on a voluntary basis • operated by SGS in association with a local partner - the RFE Forest Certification Centre (FCC) • SGS VLTP Statements and Stickers (for use on products) provide independent and internationally-recognized assurances that wood-based products have been produced and sold legally, in compliance with specified legality criteria • VLTP processes: • a combination of audits, spot checks and monitoring of Legal Origin (company, production sites), Legal Compliance (activities, products), and Traceability • a CoC mechanism for companies processing and trading in legal products

4. VLTP in the Khabarovsk Region: a Government initiative • The Government of the Khabarovsk Region requested voluntary forest certification or verification as a tool to combat illegal logging, associated trade and corruption in the forest sector • In 2005 the interdepartmental working group (IDWG) selected the SGS concept of Independent Validation of Legal Timber • note: IDWG was created by a decree of the Governor of the Khabarovsk Region to assist with developmentof voluntary forest certification. The IDWG members represent federal and regional government departments, agencies and institutions which are responsible for forest inventory, management, monitoring and control as well as for developing regional and federal legislation • The regional Government endorsed the scheme, including a preliminary definition of “legal timber” and methods to verify it

5. VLTP in the Khabarovsk Region: a multi-stakeholder partnership • The VLTP scheme will involve the Government, an independent verifier and the main stakeholder groups in different ways: • Collaboration Agreement between the regional Government and SGS on implementation of VLTP • Operation Council (OC) will: • be based on IDWG members and alsoinclude representatives of local environmental NGOs, industry, indigenous people association, etc. • approve and maintain the VLTP Standard • manage interdepartmental coordination in matters related to VLTP • monitor the implementation and functioning of the Programme • manage a dispute settlement and an appeal mechanisms • FCC: provides technical assistance such as education and training, assistance with improvement of forest management standards and company level CoC systems, etc. • Partnership between SGS and FCC: will eliminate risks of conflict of interest by separating independent third party auditing and consulting • International environmental/ social NGOs will be invited to sit in an Advisory Committee and meet with the OC to make recommendations • Open lines (Internet, phone/fax, post, seminars) will enable civil society and the public to interact with the Programme

6. STATUS OF VLTP IMPLEMENTATION • October 2005: • first VLTP informational workshop held in Khabarovsk • logging companies representing 50% of regional timber production participated • December 2005: several of the biggest companies expressed interest in participating and filed formal Applications • January 2006: • VLTP Agency starts operating • procedures and documentations being developed • February 2006: • VLTP Standard approved, following expert consultations • educational & training workshop organised by FCC with USAID support • 28 companies from four Russian Far East Regions have registered • Initial activities: • training of local auditors (VL, CoC) • initial auditing of 3 logging companies with over 600,000 m3 of timber production (export to China and Japan)

7. FUTURE PROSPECTS for VLTP in Russia • As from 2007 Regional Governments will be responsible for all forest management functions • There is potential for verification of legality to be implemented in other regions: • as a replication of the VLTP model under similar regional schemes • or to expand under the SGS ‘Timber Legality and Traceability Verification’ (TLTV) service to individual companies All of you who are interested are kindly invited to provide support and input to the development of VLTP in Russia

8. THANK YOU! Andrey Zakharenkov • RFE Forest Certification Center, Khabarovsk, Volochaevskaya, 71 • Phone/fax (4212) 21-79-52 • Email: ntfpas@mail.ru • Antoine de La Rochefordière • SGS Natural Resource Monitoring Services (NRMS) • Sustainable Forestry Programme • Geneva, Switzerland • Web site: http://www.sgs.com/forestrymonitoring • Email:antoine.delarochefordiere@sgs.com