Many forward-thinking corporate buyers of paper, paper products and printed material are expanding their sustainability programs to a due diligence approach on paper sourcing. Of special interest is the more than 81% of printing and writing papers that are imported into Australia.
For some buyers, internal drivers and policies push them to further investigate the sources of fibre in the paper they purchase due to. Others have been motivated by stakeholder pressure and the impact that has, or could have, on their reputation and corporate brand.
Towards the end of 2012, Federal Parliament passed the Illegal Logging Prohibition Act. This has enlivened the interest of the risk management and compliance teams in major corporations.
Not long ago, certification by PEFC or FSC was the gold standard. Buyers would rely on certification by one of these schemes as evidence of sustainability, without looking beyond the logo. These schemes carried sufficient credence to get stakeholders off the corporation’s back and out of their offices. In general, companies were correct. That now seems long ago. Certification is a starting point and by no means a guarantee of sustainability.
Over the past year, several major corporate buyers of paper, paper products and printed material have pursued sustainability issues beyond third-party certification.
Experience gained working with and supporting many of those businesses, suggests to IndustryEdge that leading buyers are increasingly aware that certified or not, some paper imports will remain controversial and may be unsustainable.
The concept of what is now known as ‘over the horizon’ procurement risk seems to be understood by an increasing number of corporate buyers. Without evidence, they cannot accept the product is sustainable just because someone else said it was.
Not robust enough
The major issue corporate buyers raise is the source of the wood used to make the paper. Smart buyers are aware of situations where independent third-party certification has been insufficient to satisfy genuine sustainability criteria.
For example, work undertaken in 2012 for a major corporation demonstrated that controversial Uruguayan industrial plantations were being used to manufacture a well-known certified brand of copy paper labelled as ‘Made in China’. Even though the labelling was legally correct, it was misleading and masked the original and controversial source of wood fibre. In this instance the major buyer declined to purchase the paper.
An increasing number of corporations are looking beyond wood fibre supply as the only issue and are turning attention to major issues including biodiversity , social, human and labour rights considerations. International businesses, including in the finance sector, have their eye firmly planted on global covenants. These include the UN Global Compact, the Global Reporting Initiative and applicable international standards. They try to avoid failing to comply with international standards just like they will not tolerate a failure to comply with Australian laws.
Partly as a result, self-certification by overseas suppliers is increasingly being treated as suspicious. For instance, a major buyer recently requested a review of whether a claimed ‘carbon neutral’ office paper product meets the requirements of the Australian National Carbon Offset Standard (NCOS). If the product does not meet the rigorous NCOS, it will be ‘dropped from the roster’.
In 2012, a further example was the lack of certainty about children working in forest operations and concerns about dispossession of indigenous people’s lands to grow industrial tree plantations in Indonesia. One buyer changed its intended procurement as a result of this uncertainty.
The motivation of commercial buyers may vary and will change, but the direction corporate buyers are taking on imported paper is critical for everyone in the paper and print supply chain in Australia.
Certification by PEFC and FSC is now the entry point to commercial procurement of paper and printed material. The question that is increasingly be asked of the printer, the broker and the agent is ‘have you checked legality and sustainability beyond certification?’ Some already provide the answer to the question; many are still working through the issues.
Concerns over ethical and sustainability issues for buyers and the importers of paper and paperboard are being kept at the front of people’s minds due to the illegal logging laws and the consequences of importing what is essentially banned material. Under the Australian laws, ignorance is specifically no excuse.
Better due diligence on imported paper should be a way of life for everyone in the print supply chain.
Tim Woods is a director of IndustryEdge, which publishes the monthly trade and market data report, Pulp & Paper Edge, and consults in Australia, New Zealand and Asia Pacific
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter