Transparency International has released the 2013 Corruption Perception Index covering most countries of the world. The index is an important indicator of the risk of illegal timber harvesting in the FSC Controlled Wood system and the EUTR.
The CPI is an important resource for companies that need to carry out risk assessment under the EU Timber Regulation or other legal frameworks. It is also an important indicator used in the FSC Controlled Wood system and in the PEFC chain of custody requirements for avoiding controversial sources.
Transparency International scores the perceived corruption levels of 177 countries and territories around the world.
The Index uses a scale from 0 (highly corrupt) to 100 (no corruption), based on perceived levels of public sector corruption.
In the 2013 CPI, New Zealand and Denmark share the first place as the world's least corrupt countries with 91 points each. Somalia, Afghanistan and North Korea rank lowest with 8 points each.
Three more countries pass Controlled Wood threshold
In the FSC Controlled Wood system, a CPI below 50 automatically places a country in the “unspecified risk” category for legal timber harvesting (indicator 1.4 in the Controlled Wood category 1 – Illegally Harvested Wood). Field verification of legal harvesting is therefore required for companies sourcing controlled wood from such countries.
Latvia, Malaysia and Turkey have surpassed the CPI 50 threshold since 2012. However, this does not imply that these countries are automatically low risk with regard to timber legality. Other indicators of illegal harvesting risk also need to be assessed in order to gain the full picture.
CPI not sufficient to conclude low risk
„It is important to note that perception of low corruption is only one out of four indicators of risk of illegal harvesting in the FSC Controlled Wood system. A country may have serious issues with illegal harvesting even though the CPI is higher than fifty. All four Controlled Wood legality risk indicators must be assessed as low risk in order to conclude low risk of illegal harvesting”, explains NEPCon chain of custody expert Roman Polyachenko.
For example, illegal activities and corruption are frequently reported from some parts of Malaysia. The Controlled Wood risk indicator 1.3 requires “no evidence or reporting of illegal harvesting in the district of origin” and this may become crucial when assessing the risk in Malaysia, especially the Sarawak region.
“The CPI indicates the overall perception of corruption levels for each country, and does not specify sub-country level variation in perceived corruption. An indicator above 50 may in some cases conceal high perceived levels of corruption in certain parts of a country. Also, the CPI is not specific to the forest sector but an average for all sectors. The level of corruption may be low in some sectors, such as construction or health, which may mask a high level of corruption the forestry sector.
“These are some of the reasons why the CPI needs to be complemented by other indicators when assessing the risk of illegal harvesting”, explains Mr Polyachenko.
Companies sourcing controlled wood from Latvia, Turkey and Malaysia are thus still required to conduct field verification for legal harvesting until they have a) updated their risk assessment; b) found the risk to be low for all four indicators; and c) had the updated assessment approved by their certification body.
Mr Polyachenko also stresses that even for low risk products, companies still need to keep records about the products’ origin and must be able to verify the documentation’s authenticity.
Two countries fall below Controlled Wood threshold
Georgia and Bahrain have seen a negative development and have moved below the 50 CPI threshold since 2012.
As we reported last year, several European countries have a CPI score below 50. Whilst Latvia has moved above, six EU countries – Bulgaria, the Czech Republic, Greece, Italy, Romania, and Slovakia – remain unspecified risk for illegal harvesting under the FSC Controlled Wood system, based on the corruption indicator alone.
Using the CPI in EUTR risk assessments
The CPI is an important indicator for EUTR risk assessments. However, as in the FSC Controlled Wood system, the CPI is only one indicator amongst several and cannot stand alone in risk assessments under the EUTR.
A low CPI does not necessarily imply illegal logging, but generally indicates a higher risk of illegal harvesting in a country. Conversely, whilst a high CPI is reassuring in terms of low levels of corruption, it cannot be taken as the sole evidence of legal timber harvesting under the EUTR.
Corruption is mainly relevant with regard to government approvals and permits, payment of royalties etc. Other types of legal violations are typically not related to corruption. Examples include legal requirements pertaining to employment, buffer zones along rivers and levels of soil damage during harvesting operations.