Madagascar Stockpile Audit Mechanism and Business Plan Robert Garner Director ForestBased Solutions, LLC ForestBased Works Globally • Currently work in over 15 countries • Large scale industrial forests • Community forests • Manufacturers / Suppliers • Mills • Supply Chain Mgt ForestBased Solutions • Promote market-based incentives to Private Sector that merge the triple bottom line social, economic and environmental objectives; • Promote and develop sourcing initiatives for high quality timber from responsibly managed forests; • Provide due diligence and technical expertise for investment in sustainable forestry • We work from Global Policy all the way to the ground with forest managers and forest dependent people. • Clients include governments, private sector, NGOs . Pioneered Species Specific Programs • Sustainable Forest Management • Private Sector and NGOs • Key Economic Indicators • Ebony - Cameroon • Rosewood - India, Tanzania, Madagascar, Central America • Mahogany - Brazil • Whole forest needs to be managed for species specific issues to be addressed Madagascar Rosewood (Dalbergia spp.) • Over 300 species • 10-15 are commercial • Indian • Central and South America • Madagascar • Entire Genus is CITES App II India Dalbergia latifolia • Most widely used • Southern India • Mix from Coffee estates and Gov forests • Gov Auctions Tanzania Dalbergia melanoxylon • African Blackwood • East Africa • Tanzania and Mozambique • Woodwinds Brazil Brazilian Rosewood • Dalbergia nigra • Atlantic Forest • 400 years of use and exploitation • 1992 CITES APP I • Most desired guitar wood Central America Dalbergia spp. Guatemala Nicaragua Business Plan Overview • Practical solutions to • Phase 1 and Phase 2 complex problems • Based on • Step-wise process Madagascar Legal • Rapid but Realistic Framework Timelines • Goal dispose of • Transparent stockpiles to move Management towards sustainable Systems forest management • International regime Partnership • CITES Mandate First Step – Define Stockpiles • 2015 Law – Key word and Position – • Only one type It is illegal to possess of Stockpile – Rosewood, Ebony, Officially Palisander Controlled by the Government Stockpile Definitions • Officially Controlled • Many Decrees over • Uncontrolled the years Declared Wood • 2011 – Required • Non-Conforming Declarations Wood • Still illegal to possess • Business Plan Legal Mandate based 2015 law Imminent Domain / Benefit Civil Society Government must act • RW crisis has to benefit all Civil destabilized regions Society • Prevented viable commercial forest sector Adhere to CITES Mandate Uncontrolled Declared Wood • 2011 Declarations • This is 90% of wood • Controlling this large reported to CITES volume of wood is • 290,000 logs / forms Key to completing • 165 Declarations CITES Mandate • Potentially 400 Sites • Ten regions Phase 1 Strategy • Institute Governance • Step 1 – Re Audit – MEEF / SE Seized Stocks – create systems • Institute International • Step 2 Inventory and Oversight code all Declared Committee wood in place • Implement 4 Step • Step 3 – Transfer process to Control wood to Official and Officially Audit Depots • Step 4 Audit and report to CITES Phase 1 – Step 1 • Implement Biz Plan • Re-audit 2015 SGS audit procedures • Code and Mark • Test system on • Institute procedures current seized stocks – based on Biz Plan • Designate Official • Secure facilities Depots for intake • Report Phase 1 – Step 2 • Inventory Declared • Official Wood Authorizations • SAVA – Test add • Institute SMC markers to inventory procedures from 2017 • Code, GPS, Mark • Continue inventory and Grade by region • Issue official receipts to owners • Report Phase 1 – Step 2 Operations Management MEEF SMC - SE COMINT TEAM # Regional Civil Society BIANCO DCF / MEEF DREEF Observer Phase 1 – Step 2 Example Phase 1 – Step 2 Example Phase 1 – Step 3 • Limited Open Door • Verify Markers • Implement • Code, Mark and Compensation Grade program – • Imminent Domain • Report to Oversight Concept Committee • Transfer Declared wood to official depots Reasons for Moving Wood • Government is Security for people and taking the risk locations where Step 2 inventories have • Present an Audited been completed total of marked, coded and secured • Create a controlled Official Stockpiles to system for valuing complete the CITES the wood mandate • Simplifying logistics • Prevent further for any potential laundering of illegal sales of wood wood Phase 1 – Step 4 • Repeat Step 1 • The total volume verified at Step 4 are • Officially Audit all the only Officially systems for Controlled Stockpiles controlling wood • All other wood is • Report to CITES illegal and subject enforcement Risk Management • Practical Verification Goal • Rapid Progress • Stabilization • Oversight / • Break Chain of Monitoring Illegal Transactions • Systematically • Funding inventory, control • Partnership / Shared and audit global responsibility • Dispose through • Clear Legal PHASE 2 Mandates Phase 2 Business Plan – Sales • Requires all systems • Key aspects: from Phase 1 be • Complete Audit and completed inventory • Official Sites • Grade evaluation for • Requires enterprise valuation systems be in place • Logistics for • Business transport after sales management Indian Auction Model • All rosewood from • All logs are officially private or graded and marked government forests required to be auctioned • Now online • Buyers can physically visit and inspect lots of logs Phase 2 • Step –wise or by • Risk Management: region • Requires expert • Test Business business Management management systems • Clear legal • The 1/3 issue can be framework addressed based on • Market Expertise completion of Phase • Timing 1 systems.