Volume 1, Issue 1, August 2006

Restricted circulation only

In this issue UPDATES

Message from CEO

It is my great pleasure to present the inaugural issue of the MTCC News to all certificate holders and stakeholder groups involved in the multi-faceted aspects of sustainable forest management (SFM). MTCCs main objective in producing this newsletter is to keep certificate holders and stakeholder groups updated on the latest developments in the MTCC timber certification scheme and matters related to timber certification and SFM in Malaysia. Since starting its operations in January 1999, MTCC has carried out various activities in the development of forest management and chain-of-custody standards through multi-stakeholder consultations, culminating in the operation of the MTCC scheme in October 2001. Over the nearly five years of implementation of the scheme, MTCC has achieved a number of milestones, in particular the certification of more than 4.73 million hectares of permanent reserved forests (PRFs) (which account for nearly 33% of the total PRFs in Malaysia) and 92 timber product manufacturers and exporters for chain-of-custody. Exports of various MTCC-certified timber products, which include sawn timber, mouldings, laminated finger-jointed timber, plywood and furniture have been increasing over the years. Similarly, the list of destinations has also increased. To date, the list comprises 12 countries i.e. The Netherlands, Belgium, Germany, the United Kingdom, France, Australia, Greece, Denmark, Poland, Italy, Norway and Indonesia. Authorities and organizations in more countries have accorded recognition to the MTCC scheme, including those in Denmark, the United Kingdom, France, New Zealand, The Netherlands, and more recently Japan. The MTCC scheme has also been given a conditional recognition by the City of Hamburg, Germany for a two-year period beginning June 2006.

2 Implementation of New Institutional Arrangement for MTCC Scheme Joint Project between MTCC and The City of Hamburg, Germany on MC&I(2002) Development of MC&I (Forest Plantations) 2

NEWS ON MTCC SCHEME Forest Management Certification

Surveillance Visits on Certified Forest Management Units (FMUs)

Chain-of-Custody Certification

New Certificate Holders and More MTCC-Certified Products Exported More MTCC Certificates accepted under The Netherlands Keurhout Protocol for Legal Origin (KH-LET) Dialogue Session with Certificate Holders

MTCC is taking action to further strengthen the scheme by implementing the use of FACTS AND FIGURES the new standard for forest management certification, the MC&I(2002). In order to meet the requirements of the PEFC Council and public procurement policies in key markets for Malaysian timber products, MTCC is moving towards a new institutional arrangement for the scheme, where MTCC continues to play the role of the national governing body while the independent assessors will become the certification bodies (CBs) and have to be accredited to the Department of Standards Contact Information: Malaysia (DSM), the national accreditation body.

In conjunction with this issue, may I also take this opportunity to wish all fellow Malaysian Timber Certification Council Malaysians Selamat Menyambut Hari Kemerdekaan Ke-49. 19F, Level 19, Menara PGRM, No. 8, Jalan Pudu Ulu, Cheras, Chew Lye Teng 56100 Kuala Lumpur, Malaysia Tel : 603-9200 5008 Fax : 603-9200 6008 E-Mail : info@mtcc.com.my Website: http://www.mtcc.com.my

MTCC NEWS: UPDATES

Volume 1, Issue 1, August 2006

Implementation of New institutional Arrangement for MTCC Scheme

As an important measure to further strengthen and enhance the acceptance of the MTCC scheme in the international market, MTCC will be implementing a number of activities to establish a new institutional arrangement for the MTCC scheme. The new institutional arrangement is one of the measure taken to meet the requirements for endorsement by the Programme for the Endorsement of Forest Certification (PEFC) and the timber procurement policies which have been implemented by importing countries (such as the United Kingdom and Denmark) or are in the process of being finalised (such as in Germany and The Netherlands). In the present institutional arrangement, MTCC plays the role of the National Governing Body (NGB) as well as the Certification Body (CB) which issues certificates based on assessments by independent assessors. Under the new arrangement, MTCC will continue to play the role of the NGB in the timber certification scheme with, the independent assessors taking on the role of CBs which would need to be accredited to the DSM, Malaysias Accreditation Body (AB). national

Development of MC&I(Forest Plantations)

A 12-member Technical Working Group (TWG) comprising representatives from multi-stakeholder groups, i.e. environmental, social, economic and relevant government agencies, nominated during respective regional consultations in Sabah, Sarawak and Peninsular Malaysia, has been formed to develop a standard for the certification of forest plantations, i.e. the Malaysian Criteria and Indicators for Forest Management Certification (Forest Plantations) or in short MC&I(Forest Plantations). The need to develop a standard for the certification of forest plantations in Malaysia has been deliberated at the various meetings of the multi-stakeholder National Steering Committee (NSC) including the convening of a National Workshop on Standard for Certification of Plantation Forests in October 2002. This led to the decision to form a special TWG to undertake the task of developing the standard. This is in view of the increasing importance given to the establishment and management of forest plantations, as evidenced by the formation of the Ministry of Plantation Industries and Commodities (MPIC), and the target for establishing of 375,000 hectares of forest plantations in 15 years announced by MPIC. The 12-member TWG held its first meeting on 5-6 July 2006 and second meeting on 7 August 2006. The meetings culminated in the draft MC&I(Forest Plantations) which will be subjected to deliberations at regional consultations scheduled in September and October this year. The regional consultation for Sarawak has been scheduled for 17-18 September 2006 in Kuching, while the regional consultations for Peninsular Malaysia and Sabah are being finalised. For further information check out M T C C s w e b s i t e a t http://www.mtcc.com.my

A target date of 1 April 2008 has been set for the establishment and operation of the new institutional arrangement. Thus, all assessments and surveillance visits will be conducted by CBs which have been a c c re d ite d to DSM u n de r th e forest management and chain-of-custody certification accreditation programme. The CBs will also be responsible for issuing the MTCC certificate to any applicant which has been assessed and found to comply with the relevant certification standard. As part of the process to encourage the assessors to become accredited to the DSM as soon as possible, with effect from 1 April 2007, only CBs which have been accredited with DSM under the relevant ISO Guides such as Guides 62, 65 or 66 under other programmes [such as the ISO 9001 (quality management system) and ISO 14000 (environmental management system)] will be appointed to conduct assessments and surveillance visits under the MTCC scheme.

The Joint Project Between MTCC and The City of Hamburg, Germany on MC&I(2002)
A joint project between MTCC and the Free and Hanseatic City of Hamburg (FHH), Germany or in short the MTCCHamburg project which commenced on 1 June 2006 for a two-year period until 31 May 2008 is one of the outcomes of the Malaysian Timber Certification Mission to Europe which took place on 1-10 June 2002. The main objective of the joint project is to provide scientific support to refine the Malaysian Criteria and Indicators for Forest Management Certification [MC&I(2002)], to fulfil the requirements of the FHH for the use of tropical timber, as well as to ensure its practical application in the field. As part of the mutual agreement between MTCC and FHH under the MTCCHamburg project, MTCC will ensure that the FHH will have access to MTCCcertified timber products which comply with the policy of the FHH and in turn, FHH shall recognise the MTCC scheme on a conditional basis for a two-year period beginning 1 June 2006. This means that the FHH will accept on a preliminary basis the MTCC timber certification scheme using the MC&I(2001) and will permit the use of timber products from FMUs certified under this scheme. Full acceptance of the MTCC scheme by the FHH shall be granted when the MC&I(2002) is used fully in the scheme. The FHH will then accept certificates issued by certifiers accredited by MTCC. Under the MTCC-Hamburg project, a joint project team (JPT) comprising German and Malaysian forest management and certification specialists will be formed and work independently in cooperation with MTCC and other relevant organisations in Malaysia to provide the necessary expertise and technical advice in the implementation of the project. A junior scientist from the University of Hamburg, Mr. Andreas H. Knoell, has been attached to the MTCC office under this project. Other organisations which will be actively involved with the project are the Forestry Departments in Sabah, Sarawak and Peninsular Malaysia, Sarawak Forestry Corporation, and forestry

research organizations such as the Forest Research Institute Malaysia. A number of workshops will be held during the two-year period of the MTCC-Hamburg project, in which

representatives of the stakeholder groups will be invited to participate.

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MTCC NEWS: NEWS ON MTCC SCHEME

Volume 1, Issue 1, August 2006

Surveillance Visits on Certified Forest Management Units (FMUs)

Surveillance and verification visits were conducted on all the nine certified FMUs (i.e. Pahang, Kelantan, Terengganu, Selangor, Perak, Kedah, Selaan-Linau, Johor, Negeri Sembilan) in 2005 to ensure that the forest management practices of the certified FMUs continued to comply with the requirements of the MC&I(2001). The MTCC Certification Committee Meeting held on 3 March and 10 April 2006 have decided to maintain the Certificate for Forest Management issued to all nine certified FMUs based on the surveillance and verification visits and the recommendations made by the independent assessors. Details of the Surveillance and Verification visits carried out are as shown in the table below: FMU (Surveillance/Verification visit) Second Surveillance Visit Perak FMU Verification Visit Perak FMU Third Surveillance Visit Pahang FMU First Surveillance Visit Kelantan FMU Second Surveillance Visit Terengganu FMU Verification Visit Terengganu FMU Third Surveillance Visit Selangor FMU Second Surveillance Visit Kedah FMU First Surveillance Visit Selaan-Linau FMU Second Surveillance Visit Johor FMU Second Surveillance Visit Negeri Sembilan FMU Date 19-23 September 2005 19 20 October 2005 26-29 September & 3-4 October 2005 1-6 October 2005 2-6 October 2005 2-4 April 2006 18-21 October 2005 19-24 September 2005 10-18 October 2005 14-18 November 2005 28-30 November 2005
Verification visit of Terengganu FMU Well constructed feeder road observed during verification visit in Terengganu FMU

Surveillance visit of Selaan-Linau FMU

New Certificate Holders and More MTCC-Certified Products Exported

Carl Ronnow (Malaysia) Sdn. Bhd. has become the first timber company in Sabah to be certified under the MTCC scheme after receiving the MTCC Certificate for Chain-of-Custody (COC 090) on 14 June 2006. The scope of the certification is for sawn timber and will allow the company to export Malaysian sawn timber carrying the MTCC logo. Carl Ronnow (Malaysia) Sdn. Bhd. began its operations in 1998 in Sabah as a wholly owned subsidiary of DLH Nordisk A/S of Denmark. Since the beginning of 2006, nine more timber companies have been awarded the MTCC Certificate for CoC, bringing the total number of companies certified to 92 by the end of August 2006. A wide range of MTCC-certified timber products, including sawn timber, solid wood moulding, plywood, logs, finger-jointed and/or laminated moulding, sliced laminated veneer, dressed timber (S4S timber), furniture and furniture components, pictures frame, flooring and door and window components, are now available in the market. MTCC-certified timber products have also been exported to more countries especially in Europe since the first shipment to The Netherlands in July 2002. By the end of August 2006, a total of 89,933 m of MTCC-certified timber products has been exported to The Netherlands, United Kingdom, Belgium, France, Germany, Australia, Greece, Denmark, Poland, Italy, Norway and Indonesia. The Netherlands is currently the biggest market for MTCC-certified timber products, accounting for 41,407 m (or 65.8%) of the total quantity exported.

MTCC NEWS: NEWS ON MTCC SCHEME

Volume 1, Issue 1, August 2006

More MTCC Certificates Accepted under The Netherlands Keurhout Protocol for Legal Origin (KH-LET)
Another four holders of the MTCC Certificate for Chain-of-Custody (CoC) have been accepted under the Keurhout Protocol for Legal Origin (KH-LET) in The Netherlands and are now recognized as KH-Legal admitted. Hence, by the end of August 2006, seven FMUs and 28 timber companies certified under the MTCC scheme have been accepted under the KH-LET. With this acceptance, MTCC-certified timber products originating from these FMUs and exported by these companies are allowed to carry the Keurhout Legal Timber logo. The KH-LET includes three main aspects which require validation, i.e. (i) the requirements regarding the third party certifier; (ii) the assessment scheme; and (iii) the standard. The KH-LET only accepts timber products containing 100% certified materials. The 28 holders of Certificate for Chain-of-Custody are as follows:1. Bortim Sdn. Bhd., Petaling Jaya, Selangor 2. Mentakab Sawmill Sdn. Bhd., Temerloh, Pahang 3. United Trading & Sawmill Sdn. Bhd., Kuala Lipis, Pahang 4. Maran Road Sawmill Sdn. Bhd., Kuala Lumpur 5. Pan Resources Sdn. Bhd., Petaling Jaya, Selangor 6. Mahawangsa Timber Industries Sdn. Bhd., Mentakab, Pahang 7. Kilang Papan Datuk Wan Ahmad (Raub) Sdn. Bhd., Raub, Pahang 8. Asrama Raya Sdn. Bhd., Kuala Lumpur 9. Lionex (M) Sdn. Bhd., Kuala Lumpur 10. Exsell Corporation Sdn. Bhd., Petaling Jaya, Selangor 11. Finewood Export Associates Sdn. Bhd., Kuala Lumpur 12. Costraco Sdn. Bhd., Petaling Jaya, Selangor 13. TSL Timber Sdn. Bhd., Kalumpang, Selangor 14. Salak Soon Lee Sawmill Sdn. Bhd., Salak, Selangor 15. Seng Peng Sawmills Sdn. Bhd., Kuantan, Pahang 16. Lionvest Timber Industries Sdn. Bhd., Temoh, Perak 17. Suria Dayapi Timber Products Sdn. Bhd., Kuala Lumpur 18. Kilang Papan Bukit Emas Sdn. Bhd., Raub, Pahang 19. Victory Enterprise Sdn. Bhd., Klang, Selangor 20. Leong Seng Sawmill Sdn. Bhd., Kuantan, Pahang 21. Papanjaya Sdn. Bhd., Semenyih, Selangor 22. Sim Seng Huat Timber Industries Sdn. Bhd., Klang, Selangor 23. Guan Hin Sawmill & Hardware Sdn. Bhd., Chemor, Perak 24. Lengkap Arif Sdn. Bhd., Batu Caves, Selangor 25. Yee Poh Timber Sdn. Bhd. 26. Maju Weko Timber Industries Sdn. Bhd. 27. Kim Ban Huat Sdn. Bhd. 28. Firmwood Sdn. Bhd. COC001 COC002 COC003 COC004 COC005 COC006 COC007 COC008 COC009 COC010 COC011 COC018 COC019 COC021 COC022 COC023 COC024 COC036 COC037 COC039 COC042 COC043 COC045 COC051 COC059 COC062 COC069 COC072

Dialogue Session with Certificate Holders

A dialogue session on the promotion of MTCC-certified timber products was jointly organised by the Malaysian Timber Council (MTC) and MTCC on 17 February 2006 at the MTC headquaters. The objective of this event was to provide an update of the MTCC timber certification scheme and activities undertaken to promote MTCC-certified timber products. The dialogue was also aimed at providing an opportunity for MTCC certificate holders to provide their views and suggestions pertaining to the promotion of MTCC-certified timber products. During the session, Mr. Chew Lye Teng, CEO of MTCC presented a paper on the Update of the MTCC timber certification scheme where he highlighted the supply and demand situation of MTCC-certified logs and the increasing interest shown by some local authorities and companies of key importing countries in the MTCC scheme, as a result of various promotional programmes undertaken jointly by MTC and MTCC. Mr. Tham Sing Khow, Director of MTC, London presented a paper entitled Promotion of Certified Products in Europe. His presentation highlighted the various certification schemes i.e. FSC, PEFC, SFI, CSA and ATFS as well as their promotional activities in Europe. His presentation also touched on timber procurement policies by governments in Europe and the challenges faced by the MTCC scheme in Europe. Other issues related to the green premium for certified products, incentive to promote the exports of MTCC-certified products, and efforts to encourage more timber companies to apply for CoC were discussed. A total of 81 participants attended the dialogues session. Participation from holders of MTCC certificates was very encouraging. The dialogue was also attended by representatives from government agencies and timber trade associations.

Importers in Europe can now be certified under the MTCC Scheme

Importers of MTCC-certified timber products in Europe can now apply for Chain-of-Custody certification under the MTCC scheme following the registration of NEPCon (Nature, Ecology and People Consult), a company based in Denmark as the first overseas-based independent assessor for Chain-of-Custody certification. NEPCon can be contacted at: Postbox 5102, Odensegasde 4B, DK8100, Aarhus C Denmark Contact person: Flemming Sehested E-mail: info@nepcon.dk Tel: +45 8618 0866 Fax: +45 8618 1012 www.nepcon.dk

MTCCs Website Upgraded

MTCC has revamped its website to better portray its profile and activities in operating the MTCC timber certification scheme. Visit the MTCC website at www.mtcc.com.my

Welcome page of MTCC website

MTCC NEWS: FACTS & FIGURES

Volume 1, Issue 1, August 2006

Holders of Certificate for Forest Management : 9 FMUs

Eight FMUs in Peninsular Malaysia (i.e. Pahang, Selangor, Terengganu, Johor, Kedah, Perak, Negeri Sembilan and Kelantan) and one FMU in Sarawak (Selaan-Linau) covering a total of 4.73 million hectares of Permanent Reserved Forests (PRFs) have been awarded the Certificate for Forest Management. The area represents about 33% of the total PRF in Malaysia.

FMU Pahang FMU Selangor FMU Terengganu FMU Johor FMU Kedah FMU Perak FMU Negeri Sembilan Kelantan FMU Selaan Linau FMU

Certificate No. FMC 001 FMC 002 FMC 003 FMC 004 FMC 005 FMC 006 FMC 007 FMC 008 FMC 009 Total Area Certified

Area of FMU (ha) 1,524,132 233,781 535,929 356,922 344,530 884,205 165,639 629,687 55,949 4,730,774

Holders of Certificate for Chain-of-Custody : 92 Timber Companies Export of MTCC-Certified Timber Products
By Destination (June 2006) Destination Netherlands Norway UK Germany Belgium Greece Denmark Total Volume (cu.m) 2,810.58 1,063.64 943.81 474.76 395.27 180.46 34.27 5,902.80 Monthly & Cumulative Exports
Monthly Export Volume (cu.m) 16,000

Source : MTIB / MTCC

Cumulative Export Volume (cu.m) 100,000

12,000

50,000

8,000

By Product (June 2006) Product Sawn timber Plywood Finger-jointed timber Laminated timber Mouldings Finger-jointed moulding Total Volume (cu.m) 3,822.96 1,787.64 107.89 73.78 72.24 38.30 5,902.80
4,000

Monthly Volume (cu.m)

Cumulative Volume (cu.m)

-50,000

0 M a y-0 3 M a y-0 4 M a y-0 5 M a y-0 6 N o v-0 2 N o v-0 3 N o v-0 4 N o v-0 5 M a r-0 3 M a r-0 4 M a r-0 5 S e p -0 2 S e p -0 3 S e p -0 4 S e p -0 5 M a r-0 6 Ja n -0 3 Ja n -0 4 Ja n -0 5 Ja n -0 6 Ju l-0 2 Ju l-0 3 Ju l-0 4 Ju l-0 5

-100,000

Volume exported in June 2006 Cumulative volume exported since July 2002

: 5,902.80 cu.metres : 89,933.05 cu.metres

Contact information on MTCC certificate holders and Map of MTCC certified FMUs can be obtained at: http://www.mtcc.com.my under MTCC Scheme.
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