Due diligence for importers

​​​​​​These steps will guide you on how to set up and use a due diligence system to undertake a risk assessment under Australia’s illegal logging laws.

You need to establish and use your due diligence system before you import a regulated timber product into Australia. This is a legal requirement.

A good due diligence system will help you:​

  • understand where the timber in your product has come from
  • decide if it has been legally sourced
  • avoid illegally logged timber
  • support local investment, profitability and jobs

If you do not carry out a suitable due diligence assessment before importing a regulated timber product, you could face significant financial penalties.

These steps are the minimum requirements for a due diligence system, and are the core elements that must be included in all due diligence systems.

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Step 1 - Establish and maintain a due diligence system

Before you import a regulated timber product, you must have a written due diligence system. It must list the steps you are going to take to minimise the risk of importing illegally logged timber products.

Your due diligence system should include:

  1. Your details, including: business name (if applicable), street and postal address, contact number and email address.
  2. If you import as a business, your ABN/ACN and a description of your main business activity.
  3. The name of the person in charge of the due diligence system, and their contact details.
  4. The steps you will take to minimise the risk of importing illegally logged timber.

Your due diligence system should be easy to understand and follow. It will help you make decisions about how to act each time you import a regulated timber product.

If you change your due diligence process, you should also update your due diligence system.

If you are audited you will be asked to provide a copy of your system to us for review.

Step 2 - Gather information

Before you import a regulated timber product, you need to gather information about the timber in the product.

As a minimum, you need to seek:

  • The type and trade name of the product you are importing.
  • The quantity of product being imported (in volume, weight or number of units).
  • The country where the product was manufactured.
  • The country, region and harvesting unit from where the timber was harvested.
  • The name (common or scientific) of the tree the timber has come from.
  • Details of your supplier, including name, address, trading name, and business identification numbers.
  • Documents provided by your supplier for the product’s purchase.
  • Any materials or documents that can demonstrate the timber was logged legally.

Much of this information may be found in existing commercial documents, contracts, invoices, etc. But, you may need to work with your supplier to get more information, documents, or evidence.

How you gather the necessary information is up to you. This could include: phone calls, emails, online research, questionnaires sent to suppliers, and so on.

Case Study

Sonja wants to import a range of window frames for her home improvement chain. She contacts her supplier, explains the information she needs, and sends them a questionnaire. Sonja also asks them for any other documents that could demonstrate the legality of the timber she is importing. Her supplier provides her with a completed questionnaire, plus supporting harvest and export certificates. Sonja thanks her supplier for their cooperation and uses this information to support her due diligence risk assessment (see Step 3).

The law requires you to collect information where it is “reasonably practical”. In determining what is reasonable, you should consider the availability of the required information; the time, expense and difficulty in gathering the information; and the steps required to gather the required information.

However, if you can’t answer basic questions about the timber in your product, and where it has come from, it will be difficult to conclude that the product is low risk (see Step 3).

Case Study

Toby wants to import particleboard, and asks his supplier for the required information to support his due diligence process. However, Toby’s supplier notes the wood in the particleboard comes from a range of sources, and can’t confirm where it was harvested or what species are included. Toby records his attempt to gather the information and his supplier’s response. He now needs to determine if he has enough information to complete his risk assessment (Step 3). If he is unable to complete the risk assessment with the information he has, Toby will need to take additional steps to mitigate the risk (Step 4).

If audited, you will need to be able to show that you have made a reasonable effort to get the required information. You must keep a record of your efforts, and any information you find, for at least five years after the import date.

Step 3 - Assess the risk

Once you have completed Step 2, you need to use the information you have gathered to conduct a risk assessment.

The illegal logging laws provide three methods to do this:

  • Option 3A: a Timber Legality Framework
  • Option 3B: a Country Specific Guideline (CSG)
  • Option 3C: the Regulated Risk Factors

You need to use one of these methods to carry out your risk assessment. Detailed information on each of these methods is provided below.

The method that you use will depend on your circumstances. However, the first two methods can only be used where your product(s) meets certain requirements. The third method can be used in all circumstances.

Case Study

Mateo has worked with his supplier to gather the information for his due diligence process. He now needs to decide which risk assessment method to use. Having received a Forest Stewardship Council (FSC) certificate from his supplier, he initially tries the Timber Legality Framework method (Option 3A). However, after checking the FSC website, he is unable to link the certificate to the decking he is importing. Mateo also notes there isn’t a Country Specific Guideline (Option 3B) for the country where the timber was harvested. Based on this information, Mateo then relies on the Regulated Risk Factors method (Option 3C) to conduct his risk assessment.

Each method requires you to come to a risk conclusion. You need to consider any other information you are aware of, or should know. This means you can’t ignore relevant information when coming to your risk conclusion.

Your risk conclusion needs to be reasonable and supported by the information that you have gathered. If audited, you may be asked to justify your risk conclusion.

Case Study

Blake decides to use the Regulated Risk Factors method (Option 3C) to conduct a risk assessment on the wooden daybeds he wants to import. He contacts his supplier and receives a collection of documents – some in English and some not. However, on closer inspection, the documents don’t seem to be related to the daybeds. Blake is also aware of reports of illegal logging in his supplier’s country. Despite this, Blake has a good relationship with his supplier. Considering the cheap purchase price, he decides to give them the benefit of the doubt. He records his risk decision as low-risk and imports the daybeds.

Several months later, he is selected for a compliance audit. Undertaking its own assessment, the department may decide that a reasonable person wouldn’t have concluded the beds were low risk. In this situation, Blake may be found non-compliant and face further compliance action.

If, after using the method, you believe your product is low risk then you can import it. However, if your product represents a higher level of risk, you will need to take the risk mitigation steps set out in Step 4 (see below).

Additional resources are available to help with your risk assessment.

Option 3A - Timber Legality Framework

You can use this risk assessment method when the regulated timber product(s) you are importing are certified under the:

This method recognises that the FSC and PEFC certification schemes provide rigorous forest management and chain of custody standards that consider risks of illegally logged timber.

You may encounter documents or claims from other non-FSC or PEFC accredited forest certification schemes. While they can be used to support a risk assessment using Option 3C, they cannot be used under the timber legality framework method.

If you use this method, you need to do two key things:

  • Confirm your supplier and the products you are importing are certified (see below).
  • Consider the information gathered in Step 2 to determine if anything suggests the product has come from illegal sources.

If you can confirm that the timber is certified, and are not aware of any other information that suggests the product contains illegal timber, you can assess the risk as low and proceed with importing.

common mistake is assuming that your products are certified because your supplier or someone else in the supply chain is certified. A certified business can still deal in non-certified products. There is also a risk that your supplier may be falsely claiming their products are certified.

If you find that your supplier or product is not certified, you must choose a different risk assessment method (see option 3B or 3C).

Case Study

Uri would like to import some cardboard and is provided with a Programme for the Endorsement of Forest Certification (PEFC) certificate number by his supplier. Uri searches the PEFC website to confirm that the certificate is valid and covers the product he wants to import. He finds that the name on the certificate does not match his supplier. Uri contacts his supplier and is told the number is actually for the company that supplies the pulp in the cardboard. As his supplier is not the certified party, the certification claims cannot be passed on and Uri cannot use the Timber Legality Framework risk assessment method (Option 3A).

Assessing if your products are FSC or PEFC certified

This section outlines the key steps that you can take to assess if your products are FSC and PEFC certified. A downloadable version is also provided for your ongoing use and reference.

Step one: Check that the supplier’s certificate number is legitimate

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Certified suppliers should have a unique FSC or PEFC certificate code or number quoted on their certificate.

The number will generally follow this structure: TT-COC-1234, BMT-PEFC-2334 or SGS-COC-12244.

You can verify this code or number by searching on the relevant scheme’s website:

Forest Stewardship Council (FSC)
PEFC International

Common problems and solutions

If the number or code has been typed incorrectly (and you cannot find it online) contact your supplier. Ask them to email you a link to the online certificate. Or, contact the scheme and ask about the certificate codes given by the supplier.

Step two: Check your supplier is the certificate holder

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When you have found the certificate details online, check that they match the details given by your supplier.

Common problems and solutions

If the details of your supplier do not match those on the certificate, you should seek to confirm the authenticity of the certificate.

If your supplier has claimed the product is FSC or PEFC certified but it is not their name on the certificate, the chain of custody may be broken. You need to get more information from your supplier, or the scheme.

If the chain of custody is broken, you must use a different risk assessment option (3B or 3C).

Step three: Check the certificate is valid for the period of supply

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The expiry date of the supplier’s certificate should be listed on the FSC or PEFC’s websites. Check the certificate is valid for the period of supply.

Common problems and solutions

If the certificate appears to have expired or is currently suspended, you should ask why this has occurred. You may need to discuss this with the supplier or directly with the scheme.

Step four: Check the products being supplied are listed on the certificate’s record

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Certified suppliers can supply both certified and non-certified products. You will need to check that the products being supplied are the same as those on your supplier’s FSC or PEFC certificate.

Common problems and solutions

If the product you are purchasing is not covered by your supplier’s certification, you should ask the supplier if there is a mistake on the record. If this is the case, you should also ask for written confirmation from the certification body.

Step five: Check the product that is supplied is the product that was promised

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After completing all of the steps above, it is possible the supplier has not given you a certified product.

Common problems and solutions

Check your invoice(s) and delivery notes to ensure the certificate number is quoted. The product description should list the product as FSC or PEFC certified.

It may include a product claim, such as:

  • FSC 100%, FSC Mix X%, FSC Mix Credit, FSC Controlled Wood
  • X% PEFC Certified, PEFC Controlled Sources

Download the FSC/PEFC Risk Assessment

Documents

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File size

Illegal logging FSC and PEFC risk assessment template PDF

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433 KB

Illegal logging FSC and PEFC risk assessment template DOCX

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16 KB

If you have difficulty accessing these files, visit web accessibility.

Option 3B - Using a Country Specific Guideline

You can use this risk assessment method when you are importing products that have been wholly harvested in and directly shipped from a country with a Country Specific Guideline (CSG).

Case Study

Rio wants to import a range of paper bags for a conference she is organising. The paper bags will be imported from Country A, which has an existing Country Specific Guideline (CSG). However, after speaking to her supplier, she realises the wood-fibre in the bags was harvested in a different country. As a result, she is unable to use the CSG for Country A. Rio must now determine if she will use the Timber Legality Framework (Option 3A) or Regulated Risk Factors (3C) methods to conduct her risk assessment.

CSGs are documents that have been negotiated by the Australian Government with key trading partners. They help you understand:

  • the legal frameworks that regulate timber harvesting in these countries
  • relevant documents (certificates, licences, etc.) you can seek to demonstrate legality

The CSGs may also provide helpful information on timber transportation, processing, and export approval processes.

In using a CSG, you need to:

  1. Confirm that your product is covered by a CSG.
  2. Compare the documents you gathered in Step 2 with those described in the CSG.
  3. Use all of the information and documents you have collected to decide if the product(s) you are importing are likely to include illegally logged timber.

Case Study

Ali would like to import a consignment of teak chairs from an overseas supplier. Having found that a Country Specific Guideline (CSG) exists for the country of harvest, he downloads the relevant document. He then uses the CSG to identify and collect documentation that suggests the timber in the chairs has been legally sourced. Ali also considers any other information about the timber species and the country of harvest that may indicate the timber was illegally logged. He discovers teak is often illegally harvested and seeks further clarity from his supplier. The supplier confirms the teak used in the chair is plantation grown and was harvested legally. This claim is supported by invoices, certificates and permits. Ali uses this evidence to support his low risk conclusion.

Assessing risk against a Country Specific Guideline

This section outlines the key steps that you should take when using a CSG to support your risk assessment. A downloadable version is also provided for your ongoing use and reference.

Step one: Decide if a CSG applies to the product you are importing

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Check that your product is covered by a Country Specific Guideline.

Common problems and solutions

The CSG method can only be used for regulated timber products that:

  • have been harvested wholly in the CSG country; and
  • are directly exported to Australia.

It cannot be used where the timber is being processed in, or exported from, a third country.

It is also not possible to use a CSG when dealing with products containing timber sourced from multiple countries.

If the product will be shipped via a third country and not unpacked, the CSG method can still be used.

If you find that a CSG does not apply to your product, you must choose a different risk assessment method (3A or 3C).

Questions:

Does the information and documentation clearly identify the country of harvest?

Was the timber in your product wholly harvested in the CSG country?

Is the country of harvest also the exporting country?

Step two: Assess the information you have gathered against the CSG

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Compare the information and documents you gathered from your supplier with those shown in the CSG.

If the CSG specifies other documents that you don’t have, you should try to obtain these as well.

Common problems and solutions

If your supplier cannot provide you with documentation, the CSG may offer guidance on the type of documents available, the issuing authority, and how to get copies of the documents.

You do not need to gather all of the documents listed in the CSG – only those that are reasonably practicable to obtain (see the definition in Step 2). However, you will need enough information to help you make a reasonable risk assessment.

Questions:

Have you checked the information, or obtained the documents, that the CSG suggests could support that the harvest was legal?

Does the information you have gathered on your product match the information and documentation in the CSG?

Step three: Assess the risk

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Using all of the information and documents you have collected, you need to decide if the product(s) you are importing are likely to include illegally logged timber.

In coming to your conclusion, consider any other information that may indicate if the product has come from illegally harvested timber.

Common problems and solutions

CSGs may not account for local corruption, fraud, and the effectiveness of forestry laws in the country. Consider how these factors might affect your product(s).

CSGs may not show the latest developments in forestry laws.

Questions:

Are the documents collected genuine and have they been generated by the appropriate government entity or other body?

Are there any inconsistent or missing documents?

Is the timber in your product the subject of a logging ban or restriction in the CSG country?

Have there been any media articles, third party reports, or government statements that would bring the legality of your product(s) into question?

Is there any other information you know or should know, that would call into question the legality of the product(s)?

Step four: Determine your risk assessment outcome

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Once you have completed the steps above, you should be able to determine if your product is likely to include illegally logged timber.

If you have decided the risk is low, you have completed your due diligence. You must document your risk conclusion and can import the regulated timber products.

Common problems and solutions

If your risk is higher than low, you must take actions to mitigate the risk before you are able to import the regulated timber product. This is explained in Step 4 (below).

Download the Country Specific Guideline Risk Assessment

Documents

Pages

File size

Illegal logging country specific guidelines risk assessment template PDF

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434 KB

Illegal logging country specific guidelines risk assessment template DOCX

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16 KB

If you have difficulty accessing these files, visit web accessibility.

Option 3C - Using the regulated risk factors

You can use this risk assessment option for regulated timber products from any source or background.

This method requires you to:

  • evaluate the information you gathered in Step 2
  • assess the risk against the factors outlined below.

By using the risk factors, you should be able to make an educated assessment of whether your product is likely to include illegally logged timber.

If you have assessed the risk and decided that your product is a low risk of being illegally harvested, you have completed your due diligence. You must document your risk conclusion and can then import the timber products.

If you have assessed the risk as anything other than low, you must take additional actions to mitigate the risk before you are able to import the regulated timber product. This is explained in Step 4 (below).

In using the regulated risk factors, you may need to do additional research. There are additional resources to help with your risk assessment.

Case Study

Maja is using the Regulated Risk Factors method (Option 3C) to conduct a risk assessment on notebooks she wants to import. Working her way through the risk factors, Maja uses the Australian Government’s Smart Traveller website to confirm there is no armed conflict in the area of harvest. She also uses several online resources to research if illegal logging is currently a problem in the area of harvest, and if the species of wood-fibre contained in her notebooks is regularly illegally logged. Maja finds nothing to suggest the timber in the notebooks may have come from illegal sources. Drawing on this research and the information she originally gathered from her supplier in Step 2, Maja concludes her product is low risk. She records a low risk conclusion and imports the notebooks.

Assessing risk against the regulated risk factors

This section outlines the regulated risk factors and provides some guidance on how they can be used to support your risk assessment. We have also included a downloadable template which can be used to record your use of the regulated risk factors.

Risk factor one: Is there much illegal logging in the area where the timber was harvested?

Action:
Some countries/regions have issues with governance and enforcement over forestry activities or issues with corruption that result in illegal logging. Consider these factors when determining the risk of illegal logging.
If the timber is harvested from a known protected area, or your supplier can’t tell you where it has come from, this would be considered a higher risk of illegal logging.

Risk factor two: Is the species of the log often illegally harvested in this area?

Action:

Some timber species are more likely to be illegally logged. To answer this question, you need to know which species of timber you are importing, and where it was harvested.

If your supplier can’t tell you the timber species, or you can’t confirm that the species grows in the area the supplier says it came from, or the species is listed as ‘vulnerable’ or ‘threatened’, it may indicate a higher risk of illegal logging.

Risk factor three: Is there, or has there recently been, armed conflict in the area of harvest?

Action:

You need to establish where the timber was harvested and whether there is armed conflict in the area of harvest.

Armed conflict may make it difficult for authorities to control forest resources, and ensure legal timber harvesting.

Risk factor four: How complex is the product?

Action:

Establish and consider the complexity of the supply chain involved in producing your product.

Long supply chains (involving multiple parties) and complex composite products (involving multiple timbers and/or sources) can introduce greater risks that illegal timber has been used.

Without a full understanding of the components and their source, you need to consider the risk that your product might contain illegally logged timber.

Risk factor five: Does any other information indicate that the timber was illegally logged?

Action:

Does any other information indicate that the timber was illegally logged?

This might include:

  • potentially forged, inconsistent or missing documents
  • the supplier is known to deal in illegally logged timber
  • goods being sold significantly below the market rate
  • appropriate taxes not included in price
  • cash only, or lower price for goods without paperwork
  • asked to pay a bribe
  • unable to get rational answers to questions

Download the Regulated Risk Factors Assessment Template

DocumentsPagesFile size
Regulated risk factors assessment template PDF 2426 KB
Regulated risk factors assessment template DOCX 230 KB

If you have difficulty accessing these files, visit web accessibility.

Step 4 - Risk mitigation

If you come to the conclusion that your product is not low risk, you need to take reasonable steps to reduce the risk before you import the product.

How you mitigate the risk is up to you. It will depend on your individual circumstances.

You may need to do more research, such as:

  • ask for more evidence or information from your supplier
  • ask your supplier for a certified alternative
  • visit your supplier to learn more about their supply chains
  • start a regular audit process

In some cases you may need to consider sourcing a lower risk product, or even changing suppliers.

Regardless of the steps you take, your mitigation efforts need to be adequate and relative to the identified risk.

Once you are satisfied that you have reduced the risk to a low level of containing illegally harvested timber, you must keep your records to show the steps you have taken.

If you cannot reduce the risk to low, you should not import the product. If you do import the product(s), and they are later found to contain illegally logged timber, you could face serious penalties.

Step 5 – Keep records

You must keep records covering all the steps you took in the due diligence process. Records can be kept digitally or on paper. They must be maintained for at least five years after the import date.

Your records should clearly state:

  • your due diligence system (Step 1)
  • the information gathered (Step 2)
  • your risk assessment process and conclusion (Step 3)
  • any ways you attempted to reduce the risk (Step 4)
We may audit your records. Learn more about our compliance audits.

Questions and answers

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Do I need to lodge my due diligence information with the department?

No. You do not have submit your due diligence information to the department each time you import a regulated timber product. However, this information must be available if you are approached by the department in the future for compliance purposes and you must keep a written record of your due diligence process.

Do I need to conduct due diligence for each consignment that I import or process?

This will depend on your individual circumstances. The department recognises that some importers may be able to establish a due diligence system for regularly imported items on a supplier basis rather than an individual import basis. Such an approach would generally be used where you are regularly sourcing the same timber product from a consistent and trusted supplier.

My supplier has provided me with a written statement that the product is legal. Is this sufficient?

No. While such a statement can help inform your risk assessment, in most cases it is not sufficient evidence to satisfy your due diligence requirements.

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