Due diligence case studies

Case study 1: Information gathering

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 to provide the information the Rules requires Sonja to obtain. Her supplier provides her with a completed questionnaire, plus supporting harvest and export certificates.

Sonja thanks her supplier for their cooperation and together with the information she gathered from further desktop research, uses this information to assist her due diligence risk assessment. (Step 2 of the due diligence framework).

Case study 2: Information gathering

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 makes further enquiries to the supplier and asks him to supply any information about the source of the products that the supplier does know about, or where it may be from. It doesn’t take him too much time and it does not cost much to make this enquiry. 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 2 of the due diligence framework). If he is unable to conclude that the risk the product contains illegally logged timber is low at the risk assessment step, Toby will need to take additional steps to mitigate the risk (Step 3 of the due diligence framework).

Case Study 3: Certified products pathway

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 certification number is actually for the company that supplies the pulp in the cardboard. As his cardboard supplier is not the certified party, a certification claim for the cardboard product cannot be passed on. Uri cannot use the certified products pathway and must conduct a risk assessment for non-certified products (Pathway 2B of the due diligence framework).

Case Study 4: Certified products pathway

Joe has ordered some plywood from a recommended supplier. Joe undertakes a due diligence process, including obtaining a copy of the Forest Stewardship Council (FSC) certificate for his supplier. Joe checks the FSC database, obtains the time stamped record for the supplier and confirms that the supplier and address details match the information Joe has obtained about the direct supplier of the plywood. Joe also confirms that the plywood and the species in the plywood match the products that are in scope of the FSC certification held by his supplier. However, when Joe receives an invoice for the plywood, the invoice does not contain an FSC certification claim for the plywood. Joe has been sold uncertified plywood from an FSC certified supplier. As the timber product is not certified, Joe cannot use the pathway for certified products (Pathway 2A of the due diligence framework) and must use the alternative risk assessment pathway for non-certified products (Pathway 2B of the due diligence framework).

Case study 5: Non-certified products pathway

Mateo has worked with his supplier to gather the information for his due diligence process. He now needs to determine which risk assessment pathway to use. Having received a FSC chain of custody certificate from his supplier, he initially tries the certified products pathway (Pathway 2A of the due diligence framework). However, after checking the FSC database website, he discovers that the decking boards he wants to import are not within the scope of the certification that is held by the supplier. Based on this information, Mateo then conducts his risk identification and assessment using the non-certified products pathway (Pathway 2B of the due diligence framework).

Case study 6: Non-certified products pathway

Blake determines that he will use the non-certified products pathway (Pathway 2B of the due diligence framework) 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 considers the non-certified risk factors in his written risk assessment and concludes the products are low risk and imports the daybeds.

Several months later, Blake is selected for a compliance assessment. As part of the assessment, he is asked and must provide written records of the assessment and risk identification that he made in relation to the daybeds.

Information obtained about the product and other factors, including reports of illegal logging in the country of harvest and other information known to Blake (including that he cannot verify the content of documents which are not in English, and that the documents do not relate to the daybeds he has imported), may not reasonably support a conclusion that the daybeds were low risk. In this situation, Blake may be non-compliant with the due diligence requirements and could face serious penalties.

Case study 7: Repeat identical imports

Brian imports engineered flooring from one overseas supplier. Brian completes his due diligence obligations in March 2025 for his first imported certified timber product arriving under the Illegal Logging Rules. Brian continues to import the same product during 2025, gathering the required information before each import and undertaking the exception process for his imported flooring for all subsequent imports. In April 2026, while continuing to import the same flooring, Brian identifies it has been more than 12 months since the engineered flooring product was imported. As such Brian can no longer utilise the exception process and must undertake a new written risk assessment process.

Case study 8: Composite product

Duncan intends to import some composite timber products made from multiple timber species harvested across several countries. Given the complexity of the supply chain, Duncan was concerned that he would need to gather information about the final manufactured product from his direct supplier and additionally gather information about the components from all the sub-suppliers.

After contacting the department, Duncan was advised that where credible information about all components is obtained from the direct supplier, there is no requirement to duplicate information gathering by approaching sub-suppliers. The department also clarified that if Duncan undertakes a single written risk assessment for the final manufactured product, that considers all the particulars about the final product, there is no requirement to undertake individual component risk assessments.

The department explained that this also applies to risk mitigation.

Case study 9: Establishing a due diligence system

John’s sawmill business is PEFC certified, and its timber processing activities are conducted in accordance with PEFC Chain of Custody requirements. John is aware of Australia’s illegal logging laws and understands that due diligence must be undertaken before processing raw logs.

John’s business was issued a Requirement to Give Information and Produce Documents notice, which required the business to provide the written due diligence system in place at the time the raw logs were processed, along with other specified documents. In response, John provided a copy of the business’s Chain of Custody manual and the most recent PEFC audit as evidence of its written due diligence system.

However, a PEFC or FSC Chain of Custody manual alone is not sufficient to meet the due diligence obligations that are set out in the Act and the Rules. In this situation, John’s business is non-compliant with Sections 17 and 17A of the Act, as a PEFC or FSC Chain of Custody manual does not set out a process of due diligence that covers the very specific requirements of Australia’s illegal logging legislation.

Case study 10: Information gathering

Donald is planning to establish a new contract for the supply of high quality sawlogs with a supplier. He contacts the supplier, explains the information he requires every time, and provides them with a questionnaire. Donald also discusses with his supplier the information and documentation they have that can be used to demonstrate the legality of the logs to support his identification and assessment of risk. Donald’s supplier confirms they will be able to provide a completed questionnaire, together with delivery dockets that identify the scientific and common name of the logs, the log supplier and the area the logs were harvested with each load of logs delivered. Donald thanks his supplier for their cooperation, knowing that together with information gathered from his own further desktop research, he will have the required information that is required before processing to assist his due diligence identification and assessment of risk. (Step 2 of the due diligence framework).

Case study 11: Information gathering

Kirstjen owns a furniture business and wants to source hardwood logs from a local contractor who has accumulated logs in his yard. She asks her supplier for the required information to support her due diligence process. However, Kirstjen’s supplier notes the logs have come from a range of private sources, and they can’t confirm where and when they were harvested. Kirstjen records her attempt to gather the information and her supplier’s response. She now needs to determine if she has enough information to complete her risk assessment (Step 2 of the due diligence framework). If she is unable to conclude that the likelihood the raw log was illegally logged is low at the risk assessment step, Kirstjen will need to take additional steps to mitigate the risk (Step 3 of the due diligence framework).

Case Study 12: Certified product pathway

ExampleCo Sawmill is an Australian timber processor that receives PEFC  and FSC certified raw logs from external suppliers. While certification provides useful assurance about supply chain controls, ExampleCo Sawmill understands that certification alone does not satisfy the due diligence requirements under Australia’s illegal logging laws.

Before processing, ExampleCo Sawmill gathers the prescribed information, determines whether the logs meet the definition of certified logs under the Rules, and undertakes a written risk assessment considering all prescribed risk factors. Where risks are identified, additional information or risk mitigation is undertaken, and records are retained to demonstrate compliance.

Case Study 13: Non-certified products pathway

Antonia is using the non-certified raw logs pathway (Pathway 2B of the due diligence framework) to conduct a risk assessment on some logs she plans to process. Working her way through the risk factors, Antonia uses several online resources, including the relevant State Specific Guideline, to research whether illegal logging is a problem in the area of harvest, and whether the species of tree of the logs is regularly illegally logged. In doing her research, Antonia finds nothing to suggest the logs have come from illegally logged sources. Drawing on this research and the information she originally gathered from her supplier in Step 1, Antonia completes her written risk assessment and concludes the logs are low risk. She records her research and this conclusion and arranges to purchase and process the logs.

Case study 14: Non-certified products pathway

Mikhail has worked with his supplier to gather the information for his due diligence process. He now needs to decide which risk assessment pathway to use. Having received a Responsible Wood PEFC certificate code from his supplier, he wants to use the certified raw logs pathway (Pathway 2A of the due diligence framework). Mikhail goes to the PEFC database to obtain a copy of the certification record. He confirms that his raw logs fall within the scope of the certification and that all the details he obtained about the supplier match the details in the certification record. When he receives the sales or delivery documentation from his supplier, he confirms that the certification claim is consistent with the certification that is held by the supplier. Confident that his logs are a certified log, Mikhail proceeds with the certified raw logs pathway to identify and assess the risk.

Case study 15: Non-certified products pathway

Chris operates a small sawmill and is approached by a local forestry contractor willing to sell him some sawlogs. Aware of his legal obligations, Chris asks the contractor for the information for his due diligence process and evidence of the logs’ legality. The contractor advises that the logs have come from a range of private sources in the region, and assures Chris they are all legally sourced. Chris is aware of reports of logs being illegally harvested from local forests and recognises the logs are particularly cheap. Despite this, Chris has a good relationship with the contractor and decides to give him the benefit of the doubt. He completes his written risk assessment and records his risk decision as low-risk and processes the sawlogs.

Several months later, Chris is issued with a Requirement to Give Information and Produce Documents notice. Undertaking its own assessment, the department may decide a reasonable person concluded the sawlogs were not low risk. In this situation, Chris may be found non-compliant and face further compliance action.

Case study 16: Consignment value

Serena is importing a mixed consignment of commercial goods into Australia. The total value of the consignment is $30,000. This includes a selection of paper products worth $900. No other regulated timber products are contained in this consignment. As the value of the regulated timber products does not exceed $1000, they are exempt and Serena does not need to do due diligence.

Case study 17: Recycled material

Fadel is importing a range of second-hand timber panels from stripped and deconstructed boats. Because the panels that made up the boat are no longer used for their intended purpose, Fadel decides that the timber meets the law’s requirements for exemption. He keeps suitable records to justify his claims and imports the timber without having to do more due diligence.

Case study 18: Recycled material

Geoff is importing a range of second-hand wine barrels. He plans to rejuvenate the barrels and sell them as functioning wine barrels. As these barrels are being imported for their original intended use, Geoff must complete due diligence prior to importing the barrels.

Geoff later decided to import more second-hand wine barrels, with plans to refurbish the barrels into furniture or planters. As the barrels are no longer in use for their intended purpose, Geoff decides that the timber barrels meet the law’s requirements for exemption. He keeps suitable records to justify his claim and imports the barrels without having to do more due diligence.

Case study 19: Other non-regulated products

Sofia has a stationery business that imports a wide range of products, from pens to decorative gift boxes. Researching her due diligence obligations, Sofia concludes the packaging materials used to transport most of her goods (such as crates and timber pallets) are not regulated. However, as the gift boxes are the primary goods being imported, and fall within one of the regulated tariff codes, she needs to do due diligence on the boxes.