Locally developed Due Diligence System launched in Viet Nam
The ability to effectively assess the legality of timber is critical to ensuring that only legal or low risk timber enters responsible supply chains or markets. In line with commitments made under the Voluntary Partnership Agreement (VPA) between Viet Nam and the European Union, and in anticipation of the full implementation of the Viet Nam Timber Legality Assurance System (VNTLAS), the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) has developed a Due Diligence System (DDS) with support of the FAO-EU Forest Law Enforcement, Governance and Trade (FLEGT) Programme.
The HAWA DDS is an IT platform supporting transparency and due diligence for each seller-buyer transaction involving HAWA DDS members. The current system focuses on domestic timber sources and suppliers but HAWA is working on the inclusion of imported timber. The system design is based on international best practices, guided by a number of principles, standards, and procedures and managed by a team of dedicated HAWA DDS staff. After three years of development, the HAWA DDS Platform has been approved by the Chairman of HAWA and went live on 1 July.
Promoting legality assurance by facilitating and documenting due diligence along the supply chain
Assisted by experts in certification and due diligence from Preferred by Nature (formerly NEPCon), the HAWA DDS team developed an IT platform underpinned by seven overall principles: confidentiality, transparency, truthfulness and accuracy, impartiality and fairness, effectiveness and efficiency, independent monitoring, and voluntary approach. For domestic timber sources, real-time and georeferenced evidence can be uploaded together with the required documentation or verifiers listed in the Legality Definition of the VNTLAS. The HAWA DDS team flags possible risks and makes all information available to potential buyers. As well as providing the opportunity for forest owners to register their plantations and document their harvests, the platform contains a trading module to facilitate and document a transparent due diligence process for all transactions and sales along the timber supply chain.
Locally defined solutions
The platform is unique due to the transparent and participatory nature of its development process, taking particular note of the context in which it will operate. HAWA DDS has been developed in consultation with HAWA members, their suppliers, and customers, as well as government and other relevant stakeholders. The HAWA DDS design is based on the requests, needs, expectations, and implementation capacity of Vietnamese enterprises while remaining aligned with international standards and practices. It is believed that because of this locally defined solution, Vietnamese enterprises will see the added value of the platform and widely adopt its use.
According to the of the Director of the HAWA DDS Project Management Unit, Huynh Van Hanh, ‘HAWA DDS is the first such platform developed by an association in Viet Nam in general, and in the wood industry specifically. Its implementation will benefit the Vietnamese forestry and woodworking business communities during their integration into global markets.’
Cross-sectoral support boosts platform credibility
The platform has already received widespread support from major players in Viet Nam’s timber industry. HAWA has successfully engaged Viet Nam Rubber Group (VRG) – the largest plantation owner in Viet Nam managing over one million hectares – who have committed to registering 1 500 hectares of mature plantations due to be harvested in 2021. Meanwhile, four companies in the key acacia growing provinces of Dong Nai, Quang Tri, Dak Nong, and Gia Lai have also committed to registering over 3 000 hectares of acacia plantation area.
The platform has also received a positive response from timber traders in the country. Two of Viet Nam’s largest timber traders, Hao Hung Co. Ltd (Acacia wood chip) and Hung Hoang Co. Ltd (rubberwood), have committed to joining the HAWA DDS and to purchasing timber from plantations registered in the system.
It is expected that the HAWA DDS platform will be a critical premise on which HAWA can collaborate with other domestic and international wood associations to successfully promote the trade timber products made in Viet Nam.
Since 2016 the FAO-EU FLEGT Programme has supported 22 projects in Viet Nam, amounting to approximately USD 2 323 000, primarily focusing on the development of a Timber Legality Assurance System, establishing VPA monitoring structures, and institutional strengthening and capacity building.
The FAO-EU FLEGT Programme is a global demand-driven initiative that provides technical support and resources for activities that further the goals of the EU’s FLEGT Action Plan. The Programme is funded by the European Union, the Swedish International Development Cooperation Agency, and the Foreign, Commonwealth and Development Office of the United Kingdom.
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Handicraft and Wood Industry Association of Ho Chi Minh City
PHOTO: ©FAO/Joan Manuel Baliellas