The illegal timber trade is not a small problem. As we looked at last time, the World Bank estimates global illegal logging is worth $10-$15 billion annually.
Much of that is in Australia’s backyard. The United Nation’s Food and Agriculture Organisation (FAO) estimates illegal logging in Indonesia represents 73% of log production! While it’s 80% in Brazil and 50% in Cameroon. These are three of the world’s largest tropical timber suppliers. Here are some other startling statistics: the FAO also estimates 90% of wood used in Indonesia’s pulp and paper industry comes from native forests; in 2000, the USA imported more than US$450 million worth of timber from Indonesia; while the European Union imports some US$1.5 billion in stolen tropical timber each year. But it’s not just tropical countries: up to half Russia’s timber production is thought to be illegally harvested.
So how do we go about preventing illegal logging? One way might be to track timber from its very origins — a bit like having traceability for ingredients or components of manufactured goods. (It’s in food, but this news story highlights the importance of traceability from the consumer end, and check out the QR code to the right, as an example of tracking.)
How to track timber?
But how do we actually go about tracking timber in the supply chain?
As the Commonwealth of Australia Explanatory Memorandum for the notes for the Illegal Logging Prohibition Bill 2011-2012 points out, the problem of illegally imported timber is exacerbated because of a lack of measures in consuming countries to restrict (or prohibit) importing this illegally logged timber and products made from that wood.
Hence the relatively newly passed legislation in Australia. At the other end, Indonesia, and other timber-producing countries, are also (slowly) developing timber-legality verification schemes to reduce illegal logging and be able to show their trading partners the timber they’re being sold is legal.
So how can this be done? In a practical sense, how can Australian importers and mills track timber from the time it’s felled? Or before?
German tests with RFID
There are several instances of RFID being used in timber supply chains, and the benefits are many, including:
- the increased automation reduces the likelihood of human error
- entire truck loads can be scanned at once
- biodegradable tags can be processed without causing problems
- integrating the labeller on the harvester reduces the number of actions within the supply chain
- RFID increases the mill’s ability to automatically sort upon arrival (such as into processing lines)
- RFID tags can store far more data, and data can be added through the chain (depending upon the tag type)
In collaboration with timber-harvesting equipment manufacturer Ponsse, the Technical University of Munich developed a prototype RFID-enabled harvesting head. In a 500-tag test in a Munich forest no tags were damaged when timber was felled and logs stacked; however, 5% were lost between the forest and the mill. Total costs of tagging were around $6 per cubic metre of harvested wood.
Generally the thought is that RFID is better suited to higher-value timber products.
Then there’s barcoding.
British company Helveta has put more than a million plastic barcode labels onto trees across South East Asia, Africa and South America.
It’s very intensive, with every tree in a plantation over a certain size given its own barcode, but also proving worthwhile, because the company has continued to receive investor funding.
Although barcoding in this way doesn’t stop people from selling illegal timber, it does make it more difficult for illegally harvested wood to be sold or exported, as timber processed without tags is considered illegal.
And for Australia?
So what’s practical for Australia, now that we have our anti-illegal-logging legislation?
John Szabo is the Industry Manager for the hardware sector with GS1 Australia (Matthews is a GS1 Strategic Alliance Partner, and we work with them closely on certain projects). John says work with both retailers and suppliers is driving best-practice supply-chain principles through the sector. Adopting the GS1 standards of numbering, barcoding, eMessaging and Electronic Data Synchronisation is improving business efficiency and effectiveness right through the chain.
Trade item identification has particularly improved in the past 2.5 years, driven by the Hardware GS1 Action Group, which is made up of key retailers and suppliers across Australia and New Zealand. The hardware group has begun talking about chain of custody (or “CoC”), in the agribusiness sector, but encoding CoC in a barcode hasn’t reached timber discussions yet.
John says some big hardware operators use logistics labelling — just as in the grocery industry — so when a barcode is scanned it says what the product’s GTIN is, and then also the batch code, use-by, manufacture date and those sorts of things. Some big suppliers also barcode packs; for example that pack X is 500m of merbau decking. But the only way we can track origin at the moment is via the associated paperwork that comes with the product, so by linking with FSC paperwork to prove legal harvest. (The Forest Stewardship Council is just one such group, there are several others.)
As John says, timber is pretty specific. There is an opportunity to codify this information and put it in a barcode through the appropriate application identifier — but we haven’t discussed what that will be. Some timber suppliers are struggling to put a barcode on their standard timbers because there are several challenges to overcome. Most likely there’ll be reliance on a bit of manual input unless we can build a clear business case that stacks up for all parties.
But, there is certainly an opportunity to do something in that area.
The hardware chain Masters, which came to Australia just a couple of years ago, is barcoding individual pieces of timber, with the code applied on the end of the cut timber length. So far, it’s achieved 98% barcode compliance on all its timber and panel products.
Masters has announced a long-term goal of ensuring that all timber and timber products it sells and uses come from well-managed, sustainable forests.
As specialists in coding, labelling and product traceability, we agree.
On top of the economic impacts, illegal timber harvesting is an emotive issue.
Working with manufacturers across many industries, the key with compliance is always to ensure that there’s a value add for the manufacturer. We see this as no different.
The missing link
GS1’s John Szabo says in an ideal situation, the information throughout the entire supply chain for a piece of timber could be linked to a central database that could be accessed at each point of handling.
Say each piece of timber had its own unique reference number. When looking that up on the database, people could see that this final bit of timber has actually been through 15 processes, where it’s been and where the original source was.
John says while the infrastructure isn’t in place right now, the standards and technology are all there to make this happen given the right business case.
Several years ago, GS1 and Matthews began working on the concept of a link in supply chains. Such a link is the key piece that’s missing with a lot of traceability solutions — and that’s not just timber and CoC, but anything that must be ethically sourced so it can be verified. iDSnet — a fully integrated product-traceability solution that centralises managing product ID in the company — certainly creates that link. The key is to make information available across the whole supply chain and not just part of it.
Another option is using RFID chips, just like pharmaceutical companies do to prevent counterfeits closely copying their packaging.
In the USA, some pharma companies have piloted RFID tags that, when scanned, show a unique ID revealing that the product is from the genuine supplier, known as the “pedigree”. Maybe that’s where we need to go with timber? But we need to look at several aspects.
Still some work to be done…
So, going back to the original question: how can we go about tracking timber in the supply chain?
Our 2012 law is based in sound ethics, but the infrastructure is not there yet in Australia. There are different aspects to how traceability can be tackled, using systems such as iDSnet for tracking, but the missing part electronically is linking the harvest site with this, and thus capturing the legal origins of timber products, species, country of harvest and so on. At this point, that gap just has to be filled by paperwork through organisations such as FSC or Australian Forestry Standard.
In a nutshell, full supply chain traceability can’t be done completely electronically — yet. It’s a case of where legislation has out-paced technology. But we’re working on it.
For those who want to read more, Mark Dingley wrote an article about it in the November 2012 issue of Australian Forests & Timber News (which covers from trees into the ground to finished product being used). Let’s hope we keep making progress.