Jurisdictional risk assessments reveal high overall levels of legal compliance

The risk assessments of all hardwood producing states produced independently using the AHA framework for jurisdictional risk assessment of legal compliance collectively have brought great insight onto the forest governance associated with American hardwood production.

The assessments reveal that the forest governance and legal systems evidently in force are able to identify offenders and to prosecute them when the laws are broken. Good forest governance of course goes beyond simple prosecutions, it provides clear and appropriate laws, useable systems, provides education, incentives, monitoring, enforcement, and penalties where needed. Further it does all of this in a transparent non-corrupt environment that allows business to not be burdened by undue bureaucracy.  

The individual State risk assessments provide clear referenced evidence of all of the above being in place. Whilst Federal laws and regulations apply universally, each State has its own approach to regulating their own forest industries. Whilst these approaches vary to a degree there is no evidence presented suggesting that any state has any evident specified risks requiring further mitigation.  

The previously published and most comprehensive assessment of lawful harvesting in the conterminous United States concluded that there is a widely varying perception of the regularity and impact of timber theft. Timber theft in the 2008 Seneca Creek assessment was defined as “the unauthorized entry onto private or public property for the purpose of cutting trees and stealing timber.” The report addressed timber theft to include instances of fraud, withholding payments, over or under scaling, and stealing logs. Such theft is recognized as a concern for US timberland owners, especially absentee owners. The issue of theft is recognized as occurring and of importance on the individual ownership level, but throughout the hardwood region stolen timber represents a very small portion of total production and is estimated at less than 1%.

The jurisdictional risk assessments undertaken using AHA’s framework do nothing to change the opinion that “illegal logging” is both extremely rare and in turn contributes less than one percent of the wood supply to US hardwood mills. Illegal logging does happen, logs resulting from it do enter supply chains – but the volumes are extremely low in all of the States assessed and perhaps most importantly, such events are neither systematic nor regularly occurring. It is also important to consider that prosecutions for violations are evident within the assessments. As the assessments themselves state, this is healthy evidence of functional regulatory processes.

The assessments go much further than just considering timber theft, as important as this is, especially to victims. The very broad nature of the framework used considers forest governance at both a federal and State level and considers relevant legislation in the broadest sense. Overall, the cascade of federal, State and local regulations can be demonstrated to be comprehensive. From an assessment of legal compliance perspective, the practicalities are not always as straightforward as they might be in some other countries as the nature of legislation under consideration here varies to a degree by State, with some States having comprehensive forestry related legislation condensed under a single `forest Act’, and with others having multiple sets of legislation focused through different lenses, for example with a focus on water quality or soils.

Despite the lack of homogeneity, the framework has ensured that each Sate has been approached and considered consistently and thoroughly to ensure consideration of all aspects of forest governance and legal compliance within the hardwood sector.

Negligible risk does not mean zero risk

Summarizing legality risks at the State level has the potential to lump operators in good standing with bad practices and the bad operators that may occur in the same State. The very nature of an assessment at a State-wide level ensures that both routine and exceptional practices and events must be considered. Exceptions are not the rule in this type of assessment and much thought is given to the integrity of the wider governance system and its ability to monitor and control non-compliance.

There are of course a number of different ways of considering the concept of negligible risk. For example, the chemical industries use a definition of negligible risk where it is the probability of adverse effects occurring that is so low that it cannot be reduced appreciably by increased regulation or investment of resources.

Forest certification organisations, such as the Forest Stewardship Council (FSC) use as their definition – “A conclusion, following a risk assessment, that either there is no cause for concern that material from a specific geographic area originates from unacceptable sources, or that material is mixed with non-eligible inputs or material with a different origin in such a way that would not allow the level of risk related to origin to be confirmed as negligible”.

‘Negligible risk’ as defined within the EU deforestation regulation is as follows: [Negligible risk being] “the level of risk that applies to relevant commodities and relevant products, where these commodities or products show no cause for concern for not being compliant with Articles 3(a) and 3(b) on grounds of a full assessment of both the product-specific and the general information, and, where necessary, of the application of the appropriate mitigation measures.”

AHA has advised its assessors that Negligible Risk should be understood to apply against an AHA criterion when, following full assessment against the indicators, taking appropriate account of the guidance, no cause for concern can be discerned. In terms of quantification Negligible Risk is assumed to apply where less than one percent of the wood harvested is believed to originate from harvests that breach relevant harvesting regulations or associated wood or log trading regulations.

The broad nature of the indicators and the relative lack of hard data as to the levels of non-compliance require a wide consideration of the elements of risk. Therefore, the assessors have also determined Negligible Risk to be concluded only where substantive and robust evidence of legal compliance is presented, and where the researchers have further concluded that illegal actions associated with given Indicators are isolated and irregular occurrences and are therefore not systematic or system-wide.

The jurisdictional risk assessment framework itself is fundamentally based on the principle of there being sufficient evidence available, of a credible quality, to provide assurance that for each indicator there is a low or negligible risk of inherent illegal practices within hardwood production in the jurisdiction under assessment. The evidence offered in the risk assessment should seek to provide sufficient assurance that the condition described within the criteria and indicators is likely to be observed across the jurisdiction. Negligible risk is not the same as “no risk” and the assessors were advised to consider whether evidence of non-compliance is the exception or the norm.

What is evident from the jurisdictional risk assessments is that the level of risk identified arguably meets all of the definitions highlighted above. Drawing on the chemical’s industry example the evidence is clearly that occurrences are so low that they cannot be reduced appreciably through increased regulation or investment of resources. Considering FSC’s definition there is no evidence of a cause for concern.  Most importantly in this context, using AHA’s own definition, there is evidently no cause for concern and no evidence of systematic failures or regular occurrences of irregularities has been identified.

‍

- George White, Programme Development Consultant for AHA

‍

‍

1 Goetzl, A., Ellefson, P., Guillery, P., Dodge, G., & Berg, S. (2008). Assessment of Lawful Harvesting & Sustainability of US Hardwood Exports. Seneca Creek Associates.

2 Glossary of Terms Used in Toxicokinetics.  https://doi.org/10.1515/iupac.76.0317

3 https://www.fsc-eudr-journey.org/definitions#:~:text=A%20conclusion%2C%20following%20a%20risk,level%20of%20risk%20related%20to

4 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32023R1115#d1e32-243-1

‍