This series of case studies is intended to show commercial buyers of wood and paper-based products how their supply chains can conform with U.S. legal requirements on importing certain types of wood. The case studies, compiled by the Forest Legality Alliance (FLA), draw lessons from emerging best practices for managing risk in high-risk contexts.
In this case, WRI worked with IKEA on a demonstration study focused on the production of a composite product (board materials such as particle board, Medium Density Fiber Board, etc). We looked at the controls needed to procure the raw material for this product’s manufacture. The study reviews how IKEA’s internal systems work to ensure that source materials are purchased with an adequate level of due care.
One of the goals of this report is to initiate a discussion with policy makers and the private sector on implementation of due care systems to ensure that materials are sourced legally. Specifically, we hope to address how the United States can import composite products that are largely made up of waste materials and produced by a number of diverse, small producers within a weak local governance system while still showing a high level of due care. One focus is the level of detail that IKEA is trying to achieve. The report looks at this policy’s applicability in the field and its practicability for Lacey Act’s reporting requirements.
This study focuses on IKEA and the
company’s production of composite
products (board materials such as
particleboard, Medium Density Fiber
Board (MDF), etc.) in China. The
study describes the internal systems
of IKEA and how they work to ensure
that the material sourced can be
shown to have been purchased with
an adequate level of due care to help
ensure legality. Specifically, the study
looks at how composite products
made up of a large percentage of
waste material supplied by diverse
small producers within a weak governance
context can be imported into
the USA while showing that a high
level of due care was attained.
The study shows how IKEA is
adapting its operations to meet
the requirements of a challenging
procurement situation and the company’s
understanding of how they
can show adequate levels of due care.
Four main lessons have been identified
and are explored in this paper:
Lesson 1: The implementation of
the Lacey Act means that responsible
procurement is no longer voluntary
but is now mandatory.
Lesson 2: Each company must
understand the supplying country’s
laws and associated risks so that it
can define its own level of appropriate
Lesson 3: A risk assessment can
help determine the level of traceability
required to ensure confidence in
any forest product supply and ensure
that a reasonable level of due care
can be shown.
Lesson 4: To be able to complete
the declaration form, a company
needs to understand its supply chain
fully. Good information management
is key, and a proactive approach to
the management of the supply chains
is required. It is no longer enough to
just rely on trust: a company must
now ask questions and back this up
with on-the-ground audits.