FOREST MANAGEMENT CERTIFICATION REPORT

SGS QUALIFOR

(Associated Documents)

Doc. Number: AD 36A-12

Doc. Version date: 21 Sept. 2010

Page: 1 of 33

Approved by: Gerrit Marais

SGS services are rendered in accordance with the applicable SGS General Conditions of Service accessible at http://www.sgs.com/terms_and_conditions.htm

SGS South Africa (Qualifo r Programme) 58 Me lvil le Road, Booysens - PO Box 82582 , Southdale 2185 South A fri caSystems and Services Certification Division fo [email protected] South Africa (Qualifo r Programme) 58 Me lvil le Road, Booysens - PO Box 82582 , Southdale 2185 -South A fri caSystems and Services Certification Division Contact Programme Director at t. +27 11 681-2500 www.sgs.com/forestrySGS South Africa (Qualifo r Programme) 58 Me lvil le Road, Booysens - PO Box 82582 , Southdale 2185 South A fri caSystems and Services Certification Division fo [email protected] South Africa (Qualifo r Programme) 58 Me lvil le Road, Booysens - PO Box 82582 , Southdale 2185 -South A fri caSystems and Services Certification Division Contact Programme Director at t. +27 11 681-2500 www.sgs.com/forestry

FOREST MANAGEMENT CERTIFICATION REPORT

SSEECCTTIIOONN AA:: PPUUBBLLIICC SSUUMMMMAARRYY

Project Nr: 12632-TH

Client: Siam Forestry Company Limited SLIMF West

Web Page: www.paper.scg.co.th

Address: 99 Moo 6 Wungsala Thamueng, Kanchanaburi

Country: Thailand

Certificate Nr. SGS-FM/COC-008662 Certificate Type: Group SLIMF

Date of Issue 05 April 2011 Date of expiry: 04 April 2016

Evaluation Standard SGS Forest Management Standard (AD33) adapted for Thailand, version 02 of 6 Sep 2010

Forest Zone: Tropical

Total Certified Area 1325.48 ha

Scope: Forest Management of the Siam Forestry Company Limited West SLIMF group of plantations in the Central and Western Regions of Thailand for the production of hardwood timber.

Location of the FMUs included in the scope

The SLIMF Group members are located in the Central and Western Regions of Thailand

Company Contact Person:

Mr Narong Meenual, FSC Promotion (Group) Manager

Address: 99 Moo 6, Saeng-Xuto Rd, Wangsala, Tha Muang, Kanchanaburi 71130, Thailand

Tel: 0 3461 5000 ext. 7351

Fax +66 3456 1512

Email: [email protected]

Dates:

Main Evaluation 7-9 December 2010

Surveillance 1

Surveillance 2

Surveillance 3

Surveillance 4

AD 36A-12 Page 2 of 33

Date the current version of the report was finalised

11 January 2011

Copyright: © 2010 SGS South Africa (Pty) Ltd – Revised on 21 September 2010. All rights reserved


TTAABBLLEE OOFF CCOONNTTEENNTTSS

1. SCOPE OF CERTIFICATE .................................................................................................................... 6

2. COMPANY BACKGROUND .................................................................................................................. 8

2.1 Ownership .................................................................................................................................... 8

2.2 Company Key Objectives ............................................................................................................ 9

2.3 Company History ......................................................................................................................... 9

2.4 Organisational Structure ............................................................................................................10

2.5 Ownership and Use Rights ........................................................................................................10

2.6 Other Land Uses .........................................................................................................................10

2.7 Non-certified Forests ..................................................................................................................10

3. Group Management (delete the whole section if this is not a group) ............................................. 11

3.1 Group Management System .......................................................................................................11

3.2 Membership of the Group ..........................................................................................................11

3.3 Monitoring of Group Members...................................................................................................12

4. FOREST MANAGEMENT SYSTEM .................................................................................................... 12

4.1 Bio-physical setting (Not required for SLIMF) .............................................................................

4.2 History of use (Not required for SLIMF) .......................................................................................

4.3 Planning process ........................................................................................................................12

4.4 Harvest and regeneration ...........................................................................................................12

4.5 Monitoring processes.................................................................................................................13

5. SOCIO-ECONOMIC AND ENVIRONMENTAL CONTEXT ................................................................... 13

5.1 Social aspects .............................................................................................................................13

5.2 Environmental aspects (Not required for SLIMF) ........................................................................

5.3 Administration, Legislation and Guidelines (Not required for SLIMF) .......................................

6. CHANGES IN MANAGEMENT, HARVESTING, SILVICULTURE AND MONITORING ....................... 14

7. PREPARATION FOR THE EVALUATION ........................................................................................... 15

7.1 Schedule .....................................................................................................................................15

7.2 Team ............................................................................................................................................15

7.3 Checklist Preparation .................................................................................................................15

7.4 Stakeholder notification .............................................................................................................15

8. THE EVALUATION .............................................................................................................................. 15

8.1 Opening meeting ........................................................................................................................16

8.2 Document review ........................................................................................................................16

8.3 Sampling and Evaluation Approach ..........................................................................................16

8.4 Field assessments ......................................................................................................................16

8.5 Stakeholder interviews (Not required for SLIMF) ........................................................................


8.6 Summing up and closing meeting .............................................................................................16

9. EVALUATION RESULTS .................................................................................................................... 17

9.1 Findings related to the general QUALIFOR Programme ..........................................................17

PRINCIPLE 1: Compliance with law and FSC Principles ...................................................................17

PRINCIPLE 2: Tenure and use rights and responsibilities .................................................................18

PRINCIPLE 3: Indigenous peoples’ rights .........................................................................................18

PRINCIPLE 4: Community relations and workers rights ....................................................................19

PRINCIPLE 5: Benefits from the forest ............................................................................................20

PRINCIPLE 6: Environmental impact...............................................................................................22

PRINCIPLE 7: Management plan ......................................................................................................24

PRINCIPLE 8: Monitoring and evaluation .........................................................................................25

PRINCIPLE 9: High Conservation Value Forests ..............................................................................26

PRINCIPLE 10: Plantations ................................................................................................................27

10. CERTIFICATION DECISION ............................................................................................................... 28

11. MAINTENANCE OF CERTIFICATION ................................................................................................. 29

12. RECORD OF CORRECTIVE ACTION REQUESTS (CARs) ................................................................ 30

13. RECORD OF OBSERVATIONS .......................................................................................................... 31

14. RECORD OF STAKEHOLDER COMMENTS AND INTERVIEWS ....................................................... 31

15. RECORD OF COMPLAINTS ............................................................................................................... 32

ASSOCIATED DOCUMENTS (not part of the Public Summary)

AD 20: Evaluation Itinerary

AD 21: Attendance Record

AD 36-B: Evaluation - Observations and Information on Logistics

AD 36-C: Evaluation – Information on Group Members

AD 38: Peer Review Report

AD 40: Stakeholder Reports

Evaluation team CV’s

List of stakeholders contacted


Complaints and Disputes

Procedures for submitting complaints, appeals and disputes, and the SGS processing of such are published on www.sgs.com/forestry. This information is also available on request – refer contact details on the first page.


INTRODUCTION

The purpose of the evaluation was to evaluate the operations of Siam Forestry Company Limited SLIMF Group West against the requirements of the QUALIFOR Programme, the SGS Group’s forest certification programme accredited by Forest Stewardship Council.

1. SCOPE OF CERTIFICATE

The scope of the certificate falls within the Tropical Forest Zone and includes 29 Group Members as summarised below.

Description of Group members:

Description Ownership Area (ha) Longitude E/W Latitude N/S

Kanchanaburi Province 25 members (legal title deed)

872 90° 03’ 14° 34’

Ratchaburi Province 2 members (legal title deed)

43.48 99° 34’ 13° 31’

Petchaburi Province 1 member (legal title deed)

50 90° 03’ 14° 34’

Suphanburi Province 1 member (legal title deed)

45 99° 37’ 12° 56’

Note: SGS holds the updated detailed information per member (excel file data base), and a list of members is included as Annexure 1 of this report

The location of the above mentioned provinces and the concentration of members are illustrated in the figure below. The group headquarters are located at the Pulp mill, also illustrated below:


Size of FMUs (group members):

Nr of FMUs Area (ha)

Less than 100ha 29 1325.48

100 to 1000 ha in area

1001 to 10000 ha in area

More than 10000 ha in area

Total 29 1325.48

Total Area in the Scope of the Certificate that is:

Area (ha)

Privately managed 1325.48

State Managed 0

Community Managed 315

Composition of the Certified Forest(s)

Area (ha)

Area of forest protected from commercial harvesting of timber and managed primarily for conservation objectives

See below. Forest set aside for conservation and

community use.

Area of forest protected from commercial harvesting of timber and managed primarily for production of NTFPs or services

315

Area of forest classified as “high conservation value forest” 0

Area of non-forest managed primarily for conservation objectives 0

Total area of production forest (i.e. forest from which timber may be harvested) 1325.48

Area of production forest classified as “plantation” 1325.48

Area of production forest regenerated primarily by replanting or coppicing 1325.48

Area of production forest regenerate primarily by natural regeneration 0

List of High Conservation Values

Description Notes

There are no High conservation areas on the FMU, based on the classification system given in the Glossary of the FSC Principles and Criteria (FSC-STD-01-001) for High Conservation Values. The FMU is in an area that was previously agricultural land dating back some 2000 years. Title deed is not allocated to non-productive land.

315 ha of forest land are included in the scope. This area comprises three community forests, namely Bangchongkap, Hauy Saphan and Nong Sarn Jao. These forests are in the process of being rehabilitated for conservation ideals, NTFP use and for educational purposes. The management and monitoring of these forests is supported by Siam Forestry since they are in the member’s respective communities and the Siam Group Entity has committed to support the conservation of native forests equivalent to 10% of the productive land of their members, so as the membership grows, so the Siam Group Entity will finance the conservation of more areas. Studies by the Royal Forest Department have documented that these forests are not threatened forest types and that there are no rare, threatened and endangered species that


List of High Conservation Values

Description Notes

occur in these forest patches.

List of Timber Product Categories

Product Class Product Type Trade Name Category Species

Wood in the rough

Logs of non-coniferous wood

Eucalyptus hardwood for the production of wood chips

Deciduous (Hardwood)

Eucalyptus

camaldulensis

Annual Timber Production

Species (botanical name) Species (common name) Area (ha) Maximum Annual Sustainable Yield (m3)

Projected Actual

Eucalyptus

camaldulensis and E.

camaldulensis x E.

urophilla hybrid clones*

Eucalyptus 1325.48 20000 Supply has not yet commenced

Totals 1325.48 20000

*new compartments are being afforested with the clonal hybrids

Approximate Annual Commercial Production of Non-Timber-Forest-Products

Product Species Unit of measure Total units

Botanical Name Common Name)

Not applicable. No commercial production of NTFP’s

Lists of Pesticides

Product Name Quantity Used Area of application (ha)

MA SA1 SA2 SA3 SA4 MA SA1 SA2 SA3 SA4

Glyphosate 49 ℓ 39.2

Copper oxychloride Nursery* nursery

Captan Nursery* nursery

Carbendazim Nursery* nursery

Abamectin Nursery* nursery

*Used in very small amounts and only as necessary.

2. COMPANY BACKGROUND

2.1 Ownership

Siam Forestry Company Ltd is part of SCG Paper PLC, which in turn is part of the Siam Cement Group (SCG). SCG was established by Royal decree in 1913 and is today Thailand's largest industrial conglomerate with three divisions, namely Petrochemical, Cement and Paper. The major shareholdings of the company are held by The King’s Property Bureau Office.


The Siam Cement Group includes the following companies operating in the pulp and paper industry: SCG Paper PLC, Siam Forestry, Siam Cellulose, Thai Paper, Thai Union Paper, Siam Kraft Industry, Kraft Paper Industry, Thai Kraft Paper Industry, Thai Union Paper Industry, Thai Containers, Thai Containers Industry, Thai Containers Ratchaburi (1989), Thai Containers Songkhla (1994), Thai Containers Chonburi (1995), Citypack and Siam Toppan Packaging. The SCG is a listed company on the Thai Stock Market and had a turnover in 2006 of approximately US$ 7.4 billion and employs some 28 000 staff and is ISO 9001 and ISO 14001 certified. All employees and shareholders are of Thai nationality. The Siam Forestry Company Ltd was formed in 1992 to supply Eucalyptus pulpwood to the pulp and paper factories owned by SCG PAPER. The Group has three pulp and paper mills that use Eucalyptus logs as raw input viz. Phoenix Pulp and Paper, Siam Cellulose, and SCG Paper PLC. Siam Forestry Company Ltd also owns 2 nurseries to the north of Kamphaeng Phet province that produce 70 million seedlings per year, and one nursery in kanchanaburi province that produces 18 million seedlings per year.

The Siam Forestry Company Ltd has limited land for plantation forestry, therefore depends largely on numerous private small timber growers for the supply of pulpwood for their mills. There are some 20,000 such small growers throughout the country. It is for this reason that the Siam Forestry Company established their first group certification scheme in the North East in January 2009 (SGS-FM/COC-005754). The success of this scheme laid the foundations for this current second group scheme in the West of Thailand.

2.2 Company Key Objectives

Objective Notes

Commercial

Ensure a sustainable supply of pulp logs to the SCG Pulp and Paper mills.

Yield improvement of member plantations through ongoing research and development of good clonal material.

Social

Provide fair and reasonable wood prices to members and equitable distribution of income.

Provide Support to the local communities

Compliance with health and safety requirements

Environmental

Support local conservation initiatives (areas equivalent to or greater than 10% of the member’s plantation area).

Promote environmental awareness of the local communities

2.3 Company History

See 2.1 above. Siam Forestry Company Ltd is part the Siam Cement Group (SCG). SCG was established by Royal decree in 1913 and is today Thailand's largest industrial conglomerate with three divisions, namely Petrochemical, Cement and Paper. The Siam Forestry Company Ltd was formed in 1992 to supply Eucalyptus pulpwood to the pulp and paper factories owned by SCG PAPER. The Siam Forestry Company has its own plantation forests, but relies heavily on the small private timber growers for the supply of Eucalyptus pulpwood to the various mills. Portion of Siam Forestry’s plantations were FSC certified in March 2008, and Siam Forestry set up their first group certification scheme in the North East of Thailand,

AD 36A-12 Page 10 of 33

FSC certified in January 2009. The success of that scheme led to the setting up of their second group scheme in West Thailand, the certification of which is the purpose of this report.

2.4 Organisational Structure

In terms of the Paper Division of SCG, there is an FSC Steering Committee which deals with all FSC certification, three certificates in three zones. In each zone, there is an FSC Working Committee. In the case of the West Zone, the chairperson of this FSC Working Committee is also the SLIMF Group Manager West Zone.

The Organisational structure of the Siam West SLIMF Group scheme is quite simple in that there is one Group Manager and three operational field support staff who are responsible for visiting, auditing and providing services to the members (2010 figure). The Group Manager and Operational support staff (including the FSC Working Committee as mentioned above) are all employed by The Siam Forestry Company. In addition, all of the technical and human resources of the Siam Forestry Company are made available to support members as necessary. This is especially in the case of meeting training needs.

All harvesting is contracted out and only contractors approved by Siam Forestry are used by the members. Siam Forestry audits these harvesting contractors to ensure that they meet the FSC requirements.

2.5 Ownership and Use Rights

Since this is a group scheme created and managed by Siam Forestry, the plantation forests are privately owned by the members belonging to the group (freehold title deed). The size of the member’s plantations range from 11-100ha, with 100 ha being the maximum cut off size, based on the SLIMF eligibility criteria. Most of the members have mixed farms with other crops such as rice, maize, cassava, palm trees or sugar cane in addition to their Eucalyptus plantations.

Since the land is privately owned, there are no other legal or customary use rights of the farmer’s lands.

There are also three community forests that are included in the scope of the certificate, due to the commitment of the Siam Forestry Company to support the management of these forests for the benefit of the local communities, including their members who may use these forests for aesthetic and educational purposes. These forests belong to the specific community of the area and are open to the public.

2.6 Legislative, Administrative and Land Use Context (not applicable to SLIMF)

Not applicable to SLIMF.

2.7 Other Land Uses

The group members are currently concentrated in four adjacent provinces with agriculture as the prominent land use. Most farmers have mixed farms with crops such as rice, maize, cassava, palm trees (for palm nut oil), or sugar cane. Other crops such as fruit orchards and ginger and pineapple lands are also common. The forest plantations in the area are mostly Eucalyptus, but there are also rubber and teak (Tectonia grandis) plantations.

Commercial tourism is also an important source of income in the area. There are numerous National Parks, and the rivers are also very popular for boating excursions.

2.8 Non-certified Forests

This (SLIMF Group West) is the third certificate sought by the Siam Forestry Company Limited. They have their own FSC certified Kamphaeng Phet Plantation (SGS-FM/COC-004426) of 1472 ha, they have a SLIMF Group scheme in the North East of Thailand (SGS-FM/COC-005754).

The non-FSC certified areas of forest over which The Siam Forestry Company has some responsibility are tabulated as follows:

Forest Name Location (Province) Total Area (ha) Reason for exclusion

AD 36A-12 Page 11 of 33

K.C. Kanjanaburi 136 Leased land

Evergreen Kanjanaburi 64 Leased land

CPAC (Tha Maung) Kanjanaburi 11 Leased land

CPAC (Chum Phaong) Nakorn Ratchasima 176 Leased land

Thai Cane Kanjanaburi 10 Leased land

Sri Suphan Suphanburi 691 Leased land

River Hill (Waung Dong) Kanjanaburi 691 Leased land

Ban Ngaen (Chong Dan) Kanjanaburi 101 Leased land

Ban Ngaen (Lad Ya) Kanjanaburi 48 Leased land

Wiliwan Ratchaburi 97 Leased land

The Legacy Ratchaburi 120 Leased land

Ms Kanokwan Khon Kaen 16 Leased land

Mr Pongsak Nougbualamphoo 106 Leased land

Mr Vorawit Chaiyaphoom 110 Leased land



FIO (Forest Industry Organization) Joint Venture Land:

- Ong Pha / Ong Kod Suphanburi 651 Joint venture land

- Nong Rong Kanjanaburi 153 Joint venture land

- Don Slab / Lao Kwaun Kanjanaburi 48 Joint venture land

- Mun Ja Kreri / Tha Swan Khon Kaen 1 281 Joint venture land

- Dan Kun Tod / Pak Thong Chai

Nakorn Ratchasima 506 Joint venture land

- Karset Somboon / Kon San Chaiyaphoom 159 Joint venture land

TOTAL : 19045

Management has indicated the intention to certify all of its operations in Thailand to the FSC standard, and the progressive certification in 2008, 2009 and currently 2010 supports this intention. All of the SGC’s pulp and paper mills are FSC certified on a FSC Mixed system.

The Siam Cement Group is looking to expand its Eucalyptus plantations to Laos and Cambodia and the company had started planting Eucalyptus on pilot areas in the two countries. No conversion of natural forests takes place on these areas and Siam Forestry is not involved in any such conversions that may have taken place in the past.

3. GROUP MANAGEMENT

3.1 Group Management System

The Group Management is controlled by the Siam Forestry Company, who employs a Group Manager and three Operational Field staff. The Group Management is responsible for the:

a) compilation and updating of the Group Manual, which is a file with all of the necessary supporting documents

b) provision of training of all of the members and the contract harvest teams

c) annual auditing of the members to ensure compliance to the Group Standards

3.2 Membership of the Group

FSC has developed a simplified procedure, “to assist in the practical solutions to the problems faced by small forest operations and low intensity forest operations in accessing and retaining FSC

AD 36A-12 Page 12 of 33

certification”. This system is known as SLIMF or “Small and Low Intensity Managed Forests”. The system does not reduce the requirements, i.e. “thresholds” for complying with the standard, but it does simplify the procedures that are used in the process of assessing such compliance.

To qualify as a SLIMF the FSC policy requires that the forest will be:

• small operations, this means operations of 100 hectares or smaller; or

• For low intensity operations, this means all non-timber forest product (NTFP) operations OR operations harvesting less than 20% mean annual increment AND harvesting less than 5000 m3 per year.

In the case of the Siam Company Group SLIMF West, all of the members have plantation forests of ≤ 100 ha. The forest sizes range from 11-100 ha, with an average size of about 50 ha.

3.3 Monitoring of Group Members

Each member is audited formally at least annually by a multidisciplinary team made up of Siam staff. In addition, each member will be visited at least 4 times per year by the Siam Operational Field staff. In the event of a non-compliance noted, a corrective action requests will be raised against the group member, with specified close-out timelines.

4. FOREST MANAGEMENT SYSTEM

4.1 Planning process

Siam Forestry carries out planning on three levels as follows:

Strategic 15 year plan: Long term planning is done on a 15 year cycle to manage and regulate the supplies to the various pulp and paper mills of SCG Paper. The long term plan schedules a range of activities under the headings covering economic, social/community, environmental plans, and also indicates the proposed harvest levels over 15 years.

Tactical 5 year plan: This is the planning over one rotation, and is updated annually. A management plan for 5 years was submitted to the SCG Paper Board, which formed the basis of the long term 15 year plan.

Annual Plans: This planning schedules a range of activities under the headings group management, economic, community/social and environmental on a monthly basis and indicates financial provision and responsibility for each activity.

Planning is reviewed on an on-going basis, but formal revised plans are produced annually.

4.2 Harvest and regeneration

The plantation species initially planted was Eucalyptus camaldulensis on a 4-5 year rotation. More recent plantings however have been to the improved hybrid clone Eucalyptus camaldulensis x Eucalyptus urophilla. The recommended espacement is generally 3mx3m, but this can vary depending on the land owner and agro-forestry needs e.g. the inter-row planting of cassava.

There is no pruning or thinning of the Eucalyptus plantations and the forest inventory is carried out in year 3. Members have been trained to carry out their own forest inventory, but Siam Forestry will assist as requested. The yield prediction is based on the inventory (10% sample), but the average yield based on past harvests is about 60 tons/ha. The local SCG mill has a capacity of 60 000 tons/annum which translates to a required harvest of 1000 ha/annum. This means that the current membership base can be doubled to meet the needs of the mill.

Currently, based on the membership and plantation area of the group the AAC has been set at 332 ha or 20 000m

3, which is sustainable over the 5 year rotation period.

All harvesting is carried out be contractors approved by Siam Forestry Company. These contractors have been through intensive FSC training to meet the standards required, especially for health and safety.

AD 36A-12 Page 13 of 33

The chart below illustrates the current age-class distribution of the member’s plantations collectively.

(Source:: SIAM Forestry Planning and Inventory Department, December 2010)

4.3 Monitoring processes

The monitoring plan forms part of the management plan. A monitoring schedule is available listing indicators (divided into group management issues, economic, social and environmental aspects) that are monitored. Monitoring frequency, time of year and responsibility is documented.

Examples of the specific indicators being monitored are as follows:

Group aspects: member’s records up to date, visit/monitor of large members, management documents/news distributed to members, internal management audits, member satisfaction survey, and follow-up on member’s complaints/suggestions.

Economic aspects: wood harvested every week/month, net income (revenue & expenditure) of harvesting, log volume obtained from estimated plantations, log volume procured, lost rate from harvesting (waste), and annual re-established (planted) area.

Social aspects: register of stakeholders, complains/correction of problems with communities, report on public relations in communities, report on assessment of social impacts, stakeholder meetings, legal compliance and accidents by members, legal compliance and accidents by contractors.

Environmental aspects: inspection of soil disturbance and surface soil erosion, biodiversity in conservation areas, performance of protected trees, pre- and post-harvest inspections, soil and water quality; chemicals in members’ plantations and the nursery, register of areas of special significance.

Monitoring is done by group management and is based on quarterly visits to the members by the field staff, and an annual audit per member, carried out by a multidisciplinary team.

5. SOCIO-ECONOMIC AND ENVIRONMENTAL CONTEXT

5.1 Social aspects

Male Female

Number of own workers (Siam Forestry) 4 0

Number of contract workers (group members and the staff that 1000 200

AD 36A-12 Page 14 of 33

they hire)

Minimum daily wage for agricultural/forestry workers 169 Baht

Infant mortality rates (under 5 years) 1,8

Proportion of workers employed from the local population (%) 100

Thailand's population is relatively homogeneous. More than 85% speak a dialect of Thai and share a common culture. This core population includes the central Thai (33.7% of the population, including Bangkok), Northeastern Thai (34.2%), northern Thai (18.8%), and southern Thai (13.3%). The language of the central Thai population is the language taught in schools and used in government.

The population is mostly rural, concentrated in the rice-growing areas of the central, north-eastern, and northern regions. However, as Thailand continues to industrialize, its urban population principally in the Bangkok area is growing. Life expectancy also has risen, a positive reflection of Thailand's efforts at public health education. However, the AIDS epidemic has had a major impact on the Thai population. Today approximately 1.4 % of the adult population lives with HIV or AIDS and each year 25 – 30 000 Thais die from AIDS-related causes. Ninety percent of them are aged 20 - 49, the most productive sector of the workforce.

The constitution mandates 12 years of free education, however, this is not provided universally. Education accounts for 18 % of total government expenditures. The Government allocates revenue for education to the Buddhist temples in each province and all education is under control of Buddhist monks. Thailand enjoys 92.6% literacy.

Theravada Buddhism is the major religion of Thailand and is the religion of about 95% of its people. The government permits religious diversity, and other major religions are represented. Spirit worship and animism are widely practiced.

Small-scale farmers represent a key portion of the plantation industry in Thailand, particularly in the case of Eucalyptus. Indeed, Eucalyptus from small farmers represents a critical fiber supply source for every major pulp and paper producer in Thailand and accounts for over 60 % of the total Eucalyptus area in the country. The official unemployment rate is put at 1.7 % and only 10 % of the population lives below the poverty line.

6. CHANGES IN MANAGEMENT, HARVESTING, SILVICULTURE AND MONITORING

The following table shows significant changes that took place in the management, monitoring, harvesting and regeneration practices of the certificate holder over the certificate period.

Description of Change Notes

SURVEILLANCE 1

SURVEILLANCE 2

SURVEILLANCE 3

SURVEILLANCE 4

AD 36A-12 Page 15 of 33

Description of Change Notes

7. PREPARATION FOR THE EVALUATION

7.1 Schedule

The Evaluation was not preceded by a pre-evaluation by SGS QUALIFOR since this is not required for SLIMF.

7.2 Team

The table below shows the team that conducted the main evaluation and the independent specialist that was selected to review the main evaluation report before certification is considered.

Evaluation Team Notes

Team Leader Has a BSc Honours Degree in Forest Ecology and Ecophysiology, and H.D.E, 20 years experience in forestry nationally and internationally, over 500 days FSC auditing, speaks local language English and Afrikaans.

Local Specialist Has a BSc Degree in Environmental Health and 5 years experience auditing Chain of Custody, ISO 9001and ISO 14001 and speaks Thai (local language) and English.

Local Specialist Has a BSc Degree in Food Science, and a Masters Degree in Safety Engineering and 4 years experience auditing ISO 9001 and Health and Safety auditing and speaks Thai (local language) and English.

Peer Reviewers Notes

Peer Reviewer 1 No peer review required for SLIMF Group

7.3 Checklist Preparation

A checklist was prepared as documented below. This checklist was prepared by adapting the QUALIFOR generic forest management checklist for Thailand.

The original adaptation 2005 adaptation included canvassing comments from stakeholders such as ENGOs, Government Departments and academics 4 weeks before the field evaluation. This checklist was then updated by SGS in September 2010. A copy of this checklist is available on the SGS Qualifor website, www.sgs.com/forestry.

A group checklist was also used to audit the management of the group. These checklists are tabulated below.

Standard Used in Evaluation Effective Date Version Nr Changes to Standard

SGS Qualifor: Generic Forest Management Standard (AD33) adapted for Thailand

6 September 2010

Version 02 This was updated from the 2005, Version 01 standard.

SGS Qualifor: Group Management Checklist (AD34)

9 April 2010 Version 02 This checklist was used to prepare the AD36C Group Management Report.

7.4 Stakeholder notification

Group management conducted a stakeholder consultation process prior to the main assessment. A formal stakeholder meeting was conducted with a wide range of stakeholders more than 4 weeks before the planned evaluation to inform them of the evaluation and ask for their views on relevant forest management issues. Questionnaires were also distributed to stakeholders to obtain their

AD 36A-12 Page 16 of 33

input. These included environmental interest groups, local government agencies and forestry authorities and forest user groups. Interviews were also conducted with stakeholders during the assessment.

The full list of stakeholders is available from SGS. Responses received and comments from interviews are recorded under paragraph 14 of this Public Summary.

8. THE EVALUATION

The Main Evaluation was conducted in the steps outlined below.

8.1 Opening meeting

An opening meeting was held at the Siam Kanchanaburi Office at the mill. The scope of the evaluation was explained and schedules were determined. Record was kept of all persons that attended this meeting.

8.2 Document review

A review of the main forest management documentation was conducted to evaluate the adequacy of coverage of the QUALIFOR Programme requirements. This involved examination of policies, management plans, systems, procedures, instructions and controls.

8.3 Sampling and Evaluation Approach

A detailed record of the following is available in section B of the evaluation report. This section does not form part of the public summary, but includes information on:

� Sampling methodology and rationale;

� FMUs included in the sample;

� Sites visited during the field evaluation; and

� Man-day allocation.

At the main Assessment of December 2010, 5 members within two of the four provinces were visited over a period of 3 days. The Siam Nursery and two of the three community forests were also visited. Field activities such as the harvesting were audited, numerous people interviewed and relevant documents reviewed.

8.4 Field assessments

Field assessments aimed to determine how closely activities in the field complied with documented management systems and QUALIFOR Programme requirements. Interviews with staff, operators and contractors were conducted to determine their familiarity with and their application of policies, procedures and practices that are relevant to their activities. A carefully selected sample of sites was visited to evaluate whether practices met the required performance levels.

8.5 Summing up and closing meeting

At the conclusion of the field evaluation, findings were presented to company management at a closing meeting. Any areas of non-conformance with the QUALIFOR Programme were raised as one of two types of Corrective Action Request (CAR):

� Major CARs - which must be addressed and re-assessed before certification can proceed

� Minor CARs - which do not preclude certification, but must be addressed within an agreed time frame, and will be checked at the first surveillance visit

A record was kept of persons that attended this meeting.

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9. EVALUATION RESULTS

Detailed evaluation findings are included in Section B of the evaluation report. This does not form part of the public summary. For each QUALIFOR requirement, these show the related findings, and any observations or corrective actions raised. The main issues are discussed below.

9.1 Findings related to the general QUALIFOR Programme

PRINCIPLE 1: COMPLIANCE WITH LAW AND FSC PRINCIPLES

Criterion 1.1 Respect for national and local laws and administrative requirements

Strengths

Weaknesses

Compliance There was no evidence of any non-compliance with national and local laws and administrative requirements at the time of the assessment, and forest managers and members are aware of these requirements.

Relevant legislation is distributed to the members (on their files) and members sign an agreement to follow implement relevant regulations, and to keep updated regulation lists applicable to forest management.

Criterion 1.2 Payment of legally prescribed fees, royalties, taxes and other charges

Strengths

Weaknesses

Compliance The applicable and legally prescribed fees, royalties, taxes and other charges have been paid by all members. There is a work instruction (WI-FSC-401, effective since 6 Jan 2009) that has been established to ensure member’s compliance. Proof of certain payments such as the land title or land ownership license and the land tax receipt are maintained in all member profiles.

Criterion 1.3 Respect for provisions of international agreements

Strengths

Weaknesses

Compliance Thailand is a signatory to both CITES and certain ILO Conventions. The country’s regulations encapsulate the requirements of these international agreements.

Based on interviews with Forest Managers, workers, contractors and labour welfare committee members (there is no labour union in The Siam Forestry Co., Ltd.), there is no forced labour and no discrimination of any kind within the Siam Forestry Co., Ltd or the SLIMF members.

Criterion 1.4 Conflicts between laws and regulations, and the FSC P&C

Strengths

Weaknesses

Compliance Based on interview with Forest Manager and the Forest Management Sustainable Steering Team, there have been no identified conflicts between laws and regulations and the FSC Principles and Criteria in terms of the management activities of all members and the Siam SLIMF Group management.

Criterion 1.5 Protection of forests from illegal activities

Strengths

Weaknesses

Compliance There is member monitoring work instruction (W-FSC-402) which details measures to monitor, identify and control any illegal or unauthorised activities. Interviews with

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stakeholders and with all of the members visited (see site visit record) indicated that there was no problem with any illegal activities such as timber theft, poaching or illegal settlement. Indeed, this is probably a reflection of the high employment rate in Thailand.

Criterion 1.6 Demonstration of a long-term commitment to the FSC P&C

Strengths

Weaknesses

Compliance There is a publicly available “Sustainable Plantation Management Policy” endorsed by the Managing Director explicitly stating long term commitment to forest management practices consistent with the FSC Principles and Criteria (dated 1 July 2010).

The Siam Forestry Company does have some uncertified leased land in the area, but have made good progress towards getting all of their areas and suppliers FSC certified. This Siam group SLIMF West will be their third FSC certificate.

PRINCIPLE 2: TENURE AND USE RIGHTS AND RESPONSIBILITIES

Criterion 2.1 Demonstration of land tenure and forest use rights

Strengths

Weaknesses

Compliance All of the members have documentation showing their legal rights to the land. This is kept on their Member’s File and checked by the Siam Group Management. Members may not join unless they have this documentation.

Criterion 2.2 Local communities’ legal or customary tenure or use rights

Strengths

Weaknesses

Compliance Not applicable. There are no local communities with legal or customary tenure or use rights on any of the member’s lands.

Criterion 2.3 Disputes over tenure claims and use rights

Strengths

Weaknesses

Compliance Not applicable. There are no disputes relating to tenure and use rights. The SLIMF members all have legal title to their own land. All local community members generally have their own small farms, and the area is characterised by mixed agriculture.

PRINCIPLE 3: INDIGENOUS PEOPLES’ RIGHTS

Criterion 3.1 Indigenous peoples’ control of forest management

Strengths

Weaknesses

Compliance Not applicable. There are no indigenous people who have legal or customary use rights to the group member’s farms.

Criterion 3.2 Maintenance of indigenous peoples’ resources or tenure rights

Strengths

Weaknesses


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Criterion 3.3 Protection of sites of special cultural, ecological, economic or religious significance to indigenous peoples

Strengths

Weaknesses

Compliance Some of the members have their own Spirit gardens and religious structures on their own land, but these are for their own benefit and are private and personal and not visited by members of the public. There are therefore no Sites of special cultural, historical, ecological, economic or religious significance on member’s farms that have any interest to the public. There are also no indigenous people who have legal or customary use rights to the group member’s farms.

The three community forests may be seen as sites of ecological and cultural significance to the local people, but these forests are owned and managed by the communities, and the Siam Group Entity plays a supportive role in the welfare of these forests in terms of financing research and paying for certain infrastructure that is needed. Siam Forestry has committed to support and assist in conserving forest area equivalent to at least 10% of the forest area of their members. These community forests constitute 15.9% of the total area (productive plantation plus community forests).

Criterion 3.4 Compensation of indigenous peoples for the application of their traditional knowledge

Strengths

Weaknesses


PRINCIPLE 4: COMMUNITY RELATIONS AND WORKERS RIGHTS

Criterion 4.1 Employment, training, and other services for local communities

Strengths The Siam Forestry Company donated a water filter for drinking water to the Nong Sarn Jao Temple community. This was based on their request.

Weaknesses

Compliance People in local communities are given opportunities in employment, training and contracting. Stakeholder and member’s farm workers were interviewed and confirmed that local workers and contractors were used wherever possible by The Siam Forestry Co., Ltd. and members. The Siam Forestry Co., Ltd. provided training courses that related to sustainable forestry, labour and the environment. Special training is also provided for the harvesting contractor teams, which includes techniques, safety and first aid.

There are three community forests which are managed for the benefit of the local communities, who are allowed access to the forests for educational and aesthetic reasons. The Siam Forestry Company supports the management of these forests in terms of financial input, sponsored research, donation of infrastructure and the provision of technical expertise of their own people.

Criterion 4.2 Compliance with health and safety regulations

Strengths The Siam Forestry Company arranged for First Aid training for new Group members and their employees and also provided first aid kits to the new members.

Weaknesses PPE was generally good, however Siam Forestry Co Ltd needs to investigate the need for safety trousers incorporating clogging material (or legging/chaps) as specified by ILO Table 1 p37. Tree cutters are not provided with such trousers. This was raised as Observation 01.

The Tree fellers do not have the necessary certificates of competence. There is no evidence that their skills have been evaluated against the best practice guidelines for the job of tree cutting. Minor CAR 02 was raised.

Compliance Forest Managers and group members are aware of laws and/or regulations covering Heath

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and safety of employees and their families and comply with such. Evidence of this was based on interviews and the checking of records such as the minutes of safety committee meetings, wage calculations and payment evidence, and payment slips, etc. Field activities such as a harvesting operation also confirmed good compliance with Thai Regulations and the ILO code of practice on safety and health in forestry. The two issues of concern noted are described above.

Criterion 4.3 Workers’ rights to organise and negotiate with employers

Strengths

Weaknesses

Compliance Based on interviews with The Siam Forestry Co., Ltd. employees and their contractors, it was confirmed that there are no trade union in the area, but the people are free to organise of join any groups in the area that deal with workers rights or religion or local customary ceremonies.

Workers are free to organise and bargain collectively. Group members generally run their farms as a family business and are small, which means that communication with their workers is good and agreements are usually only verbal agreements made prior to commencement of casual employment. Negotiations normally revolve around wage rates and meals. Verbal agreement is due to the fact that work is based on short term task work and not full time employment.

Criterion 4.4 Social impact evaluations and consultation

Strengths

Weaknesses

Compliance A Social Impact Assessment was carried out by the Kasetsart University (Report dated November 2010 available). This dealt with the community’s attitude towards plantation forest management in Kanchanaburi and Ratchaburi provinces where most of the group members are located. The attitude towards timber production in the area was generally found to be very good with numerous queries in connection with timber prices, seedling quality and the extension services provided. There was no antagonism towards Siam Forestry or their recruitment of FSC members.

The Eucalyptus plantations are not newly established. The members are scattered between other small timber growers who have all been farming timber for decades. Good communication between neighbours is maintained for the purposes of mutual assistance.

In all cases of stakeholder interviews conducted, the presence of Siam Forestry and their support of the small growers were thought to be very positive. One of the Local Government Leaders said that since the company had initiated their FSC membership scheme of Group certification, his villagers under Berk Prai Municipality were eager to join the group because of the benefits such as training, technical assistance, increased productivity and better knowledge in safety and health. In addition he stated that the members got better prices for their timber.

Criterion 4.5 Resolution of grievances and settlement of compensation claims

Strengths

Weaknesses

Compliance There have not been any recorded grievances or disputes, but Siam Group Manager stated that in the event of such a grievance, every reasonable effort would be made to resolve the issue through consultation and mutual agreement.

PRINCIPLE 5: BENEFITS FROM THE FOREST

Criterion 5.1 Economic viability taking full environmental, social, and operational costs into account

Strengths

Weaknesses

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Compliance SCG has two pulp and paper mills in the area, namely SCG Pulp Mill in Ratchaburi which takes the smaller size logs (diameter <5cm diameter) and the Siam Cellulose Mill in Kanchanaburi, which takes the larger diameter logs (≥ 5cm). The Siam Group therefore ensures that the member gets optimal use of their timber yield.

The Forest Manager is aiming to be in an economically viable situation which permits long term forest management. All of the members do not depend on forestry alone, but have mixed farms with other crops such as cassava, sugar cane, and palm trees. Some of them used fallow land to plant to Eucalyptus. In addition, the rotation is short (4 years), so the return on the investment is not that long, and the environmental impacts of harvesting and transport are immensely reduced. The generally flat terrain also improves the economic viability of the crop.

Criterion 5.2 Optimal use and local processing of forest products

Strengths

Weaknesses

Compliance All timber is processed locally. All timber supplied by the members goes to one of two local pulp mills. The purpose of the group certification scheme in the area is to supply FSC certified timber to the Siam mills. The Siam Group has effectively guaranteed purchasing all of the member’s timber, and also provides a premium for FSC certified timber.

Criterion 5.3 Waste minimisation and avoidance of damage to forest resources

Strengths

Weaknesses

Compliance Wood waste and damage to the remaining forest during harvesting is avoided. This was verified at harvesting site visited where there was good directional felling and the log crosscutting was carried out to maximise and optimise the recovery. Stump height is also minimised to reduce wastage. The stump height was generally about 5cm. There is no on site processing of the timber besides the crosscutting. The harvesting residue (tree tops/slash) is left on site for nutrient cycling.

Criterion 5.4 Forest management and the local economy

Strengths

Weaknesses

Compliance Most of the SLIMF group members practice mixed farming and generate annual cash crops in addition to their timber compartments, but means of example, one of the members deliberately increased the inter-row size between the trees, to allow for the planting of cassava )until canopy closure/excessive shading) and access by small tractor.

Criterion 5.5 Maintenance of the value of forest services and resources

Strengths

Weaknesses

Compliance The forest is a fast growing hybrid Eucalyptus monoculture, generally planted in fairly flat areas and none of the members have compartments adjacent to rivers or water resources. The Eucalyptus compartments are small islands within a sea of other agricultural land uses. Forest management practices do aim to minimise negative impacts on other resources such as rivers, in that the plantations are not planted adjacent to rivers.

The members do not have any conservation land on their farm because all of the land is utilised for some form of agriculture. The Siam Group Management does invest effort into the indigenous community forests in the form of research funding and management expertise to enhance the value of the forest services of these community forests.

Criterion 5.6 Harvest levels

Strengths

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Weaknesses

Compliance The rotation of the Eucalyptus plantations in the area is 4-5 years. Data on forest growth is collected and collated in Year 3 in order to determine the predicted yield. This will then be compared to the actual yields. Since all of the members have small forests of ≤ 100 ha, the trees are harvested at the recommended 4 years. In some cases, where the farmer only has one small compartment, the harvesting will only sustain an income every four years. Some of the members have compartments of different ages, in which case the income may be staggered over the four years.

PRINCIPLE 6: ENVIRONMENTAL IMPACT

Criterion 6.1 Environmental impacts evaluation

Strengths

Weaknesses

Compliance There is a specific Work Instruction that covers Environmental Impact Assessment – the identification and management of potential impacts. Other WI’s cover for example Plant and Wildlife Management, Chemical Use, Waste Management, and Soil Erosion to mention a few dealing with mitigation of environmental impacts.

Before starting any operation, the possible negative environmental impacts are identified and the operation is designed to minimise them. This is generally applicable to harvesting operations and new planting operations. Rivers are well protected and none of the member’s has timber compartments close to rivers or streams. Only 2 of the members use chemicals, so the impacts of their operations are relatively low.

Criterion 6.2 Protection of rare, threatened and endangered species

Strengths

Weaknesses

Compliance Part of the member’s assessment prior to formal contractual membership is a biodiversity survey in order to determine the status of fauna and flora on the member’s farm. This biodiversity survey is kept on the member’s file, and was seen at all members visited. There have been no RT&E species identified on any of the member’s farms. All wild animals however are protected from harm on the member’s farms with a prohibition in hunting and thorough pre-harvest checking.

Since the members do not have conservation land on their farms, Siam Forestry has committed to support three community forests, constituting 15.9% of the area included in the scope of this certificate. As the membership grows and the area under FSC certification increases, so new conservation areas will be created/supported by the Siam Group Entity. Their commitment is to support ≥ 10% conservation area in relation to their plantation area. These forests are in the process of being rehabilitated for conservation ideals, NTFP use and for educational purposes. The management and monitoring of these forests is supported by Siam Forestry since they are in the member’s respective communities. Studies by the Royal Forest Department have documented that these forests are not threatened forest types and that there are no rare, threatened and endangered species that occur in these forest patches.

Criterion 6.3 Maintenance of ecological functions and values

Strengths

Weaknesses The alien invasive species on the FMU have not been identified. This was raised as Minor

CAR 01 based on the following evidence: The status of Lantana camara is not known by the group. This species was present in the Banchong Kap Community Forest and in Compartment 03 of one of the member’s plantation. Lantana camara is documented to be from South America. Mimosa pudica is also an invasive weed that was seen to be invading the ecotone of the Nong Sarn Jao Community Forest.

Compliance The status of the member’s farms is known in terms of the Eucalyptus forest stands (age, species, density, MAI etc).

In terms of the community forests, studies have been carried out to determine forest type, biodiversity and management activities necessary to maintain and enhance their functions

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and values. Indeed, the Siam Group Entity has adopted the three community forests to assist with the rehabilitation of these forests.

Criterion 6.4 Protection of representative samples of existing ecosystems

Strengths

Weaknesses

Compliance This in not strictly applicable to SLIMF, however, since the Group members do not have any conservation land, the Siam Forestry Company has adopted three community forest comprising 315 ha (15.9% of total area) to assist with rehabilitation and management of these forests as representative samples of the existing ecosystems of the area.

Criterion 6.5 Protection against damage to soils, residual forest and water resources during operations

Strengths

Weaknesses

Compliance The Siam Group Management has identified sensitive forest operations, and provided guidelines and on-site training to all members in best practice and mitigation measures. Much of the focus has been on harvesting and chemical use. Only approved contractors (trained and audited) may be used for the harvesting operations. In terms of the establishment and re-establishment operations, the Siam Group Management provides technical expertise (e.g. soil analysis, planting techniques) to ensure optimal productivity with a minimum environmental impact.

Criterion 6.6 Chemical pest management

Strengths Only two of the current members used pesticides in 2010. Moving away from dependence on chemical pesticides is in line with the FSC goals.

Weaknesses

Compliance The Siam Group Manager provided an up-to-date list of the chemicals/pesticides used by the members since 2006. Only two of the members used pesticide in 2010, and this was, in both cases, glyphosate for weed control (a total of 49 litres was used for the year by). The aim is to move away from dependence on chemical pesticides which is in line with the FSC goals.

The Siam Nursery also provided an up-to-date list of pesticides used, and none of these were prohibited pesticides. The nursery was visited and the manager confirmed that only small amounts were used as necessary. Three of the four pesticides are fungicides, of which copper oxychloride is most commonly used. Copper oxychloride is a very soft chemical and is also allowed in organic agriculture.

Criterion 6.7 Use and disposal of chemicals, containers, liquid and solid non-organic wastes

Strengths

Weaknesses

Compliance All chemical containers are kept and returned to the supplier. All members (and the Siam Nursery) have been trained to separate their general and hazardous waste, which is all taken to the municipality. Members confirmed that vehicle batteries were returned and exchanged for new batteries, and that UV tubes were taken the municipal waste bin, and that recyclable material such as paper, plastics and glass were separated and sold to recycling agents.

As an alternative, the Siam Group Entity have also indicated that all hazardous waste can be collected and given to the Group Entity, who will then ensure that this waste gets to the appropriate site/organisation for disposal.

Criterion 6.8 Use of biological control agents and genetically modified organisms

Strengths

Weaknesses

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Compliance There is no use of any biological control agents by the Siam Group members or by the Siam group itself, including the nursery.

Criterion 6.9 The use of exotic species

Strengths

Weaknesses

Compliance Eucalyptus was assessed by the Department of Forests in terms of its suitability to be grown in Thailand – this process was completed during the 1960’s and the first Eucalyptus

camaldulensis was established in 1964.

Eucalyptus camaldulensis is a species which is propagated by clone and does not regenerate naturally by seed easily, so seed pollution and unwanted regeneration is not a problem.

Criterion 6.10 Forest conversion to plantations or non-forest land uses

Strengths

Weaknesses

Compliance There has been no conversion of forest to non-forest land. The area has been productive agricultural land for centuries. The cutting of natural forest has been prohibited by law since 1989.

PRINCIPLE 7: MANAGEMENT PLAN

Criterion 7.1 Management plan requirements

Strengths Good maps generated illustrating the location and size of the member’s Eucalyptus plantation compartments in relation to roads and other infrastructure, as well as the member’s location within the area and province. The location of all members has been mapped within the provincial boundaries of Thailand.

Weaknesses

Compliance Management planning is the responsibility of the Siam Group Management. The generic management plan for the West Contract farming is divided into four sections, namely Economic, Social, Environment and Project Management. Each of these sections has supporting procedures (e.g. Economic: P-FSC-102 Plantation Inventory; Social P-FSC-202 Stakeholder Management; Environmental P-FSC-301 Environmental Management; Project management P-FSC-404 Internal Audit). In total there are 16 Procedures. The management plan also has 36 supporting Work Instructions grouped in the same four sections as mentioned for the procedures e.g. W-FSC-306 RTE Species Management; W-FSC-204 Health and Safety etc.

Each member is given a comprehensive file which includes all issues pertaining to the management of their timber plantations and their social and environmental responsibilities. The relevant FSC procedures and Work instructions are provided to the members on their files. The Siam Group management is responsible for the document control and will ensure that when members are handed new templates, procedures or WI’s that the old documents are removed from the file and destroyed.

The information provided in the member’s file adequately covers the FSC requirements as specified for the management plan.

Criterion 7.2 Management plan revision

Strengths

Weaknesses

Compliance The Siam Group Manager has the responsibility of the overall compilation and updating of the management plan. He has the assistance of a Siam SLIMF Group West Committee, as well as three operational staff members who are responsible for the field visits and the auditing of the members.

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Criterion 7.3 Training and supervision of forest workers

Strengths

Weaknesses

Compliance The Siam Forestry Company has an annual training plan for their sustainable forest management program for employees, members and subcontractors. This training covers sustainable forest management, harvesting, silviculture, fundamentals of the use of organic fertilizer in plantations, environmental management in plantation forestry, health and safety, labour relations, and first aid. Siam Forestry fully covered the training costs.

Due to the small scale of the operations there is good monitoring and supervision. All members are visited at least quarterly by the Siam field staff, and are formally audited annually to ensure that plans, policies, procedures and contract specifications (for contractors) are adequately implemented.

Criterion 7.4 Public availability of the management plan elements

Strengths

Weaknesses

Compliance The Siam management plan is publicly available on the website www.paper.scg.co.th.

PRINCIPLE 8: MONITORING AND EVALUATION

Criterion 8.1 Frequency, intensity and consistency of monitoring

Strengths

Weaknesses

Compliance All activities that require monitoring have been identified. These have been divided into the monitoring requirements of:

• The Group Management e.g. member records, document distribution, quarterly visits, auditing, member complaints and suggestions, training etc

• Economic Aspects such as harvesting operations, log volumes, inventories

• Social and community aspects e.g. Stakeholders, complaints, social impacts, social support activities

• Environmental aspects e.g. Conservation and community forests, soil and water conservation, waste management, post harvest auditing, weed control in community forests, environmental support activities

All of the above activities have work instructions, indicators, listed frequency of monitoring, the duration of monitoring and the person in charge of the monitoring.

Criterion 8.2 Research and data collection for monitoring

Strengths

Weaknesses

Compliance The Eucalyptus pulpwood yields are recorded over the weighbridge and Siam have a data base of all timber purchased by the various members. Payments are based on the weighbridge mass information. These actual yields are compared with the predicted yields from the Year 3 inventory.

Criterion 8.3 Chain of custody

Strengths

Weaknesses

Compliance The CoC procedure is as follows: The member must inform Siam of their intention to harvest. With notification of the proposed harvest, the pre-harvest assessment will be done by Siam

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staff together with the member to ensure that the correct compartment and evaluate quality and quantity of the forest stand.

Once the pre-harvest audit has been completed, Siam Forestry will issue the member with a number of copies of an “FSC Log Control Document”. One of these forms is completed per load, and serves as a delivery note with the certificate number, the member’s name and membership number, the compartment number, truck number, harvesting contractor’s details. The harvesting contractor is also responsible for the transport, and only Siam approved harvesting contractors may be used by the members. The timber is then taken to the Siam Mill where it enters over a weighbridge and leaves over the weighbridge to record the accurate tonnage for monitoring and payment purposes.

The Siam Mills are themselves CoC certified, so the traceability of the input timber is carefully monitored through this certification.

Criterion 8.4 Incorporation of monitoring results into the management plan

Strengths

Weaknesses

Compliance The results of research and monitoring programmes are regularly analysed and incorporated into planning on a regular basis. This is the responsibility of the Siam Group management.

Criterion 8.5 Publicly available summary of monitoring

Strengths

Weaknesses

Compliance The Siam management plan is publicly available on the website www.paper.scg.co.th. This included a section on “FSC Sustainable Plantation Management Monitoring Plan 2010 (West Contract Farming) which presents the activity or aspect to be monitored, the frequency, duration and person in charge. Monitoring results may be requested for any of the listed activities monitored, and each member will have his/her own monitoring results on the Member File.

PRINCIPLE 9: HIGH CONSERVATION VALUE FORESTS

Criterion 9.1 Evaluation to determine high conservation value attributes

Strengths

Weaknesses

Compliance There are no High conservation areas on the FMU, based on the classification system given in the Glossary of the FSC Principles and Criteria (FSC-STD-01-001) for High Conservation Values. The FMU is in an area that was previously agricultural land dating back some 2000 years. Studies by the Royal Forest Department have documented that the three community forests supported by Siam Forestry are not threatened forest types and that there are no rare, threatened and endangered species that occur in these forest patches. The community forests are in the process of being rehabilitated for aesthetic and educational purposes, and have been listed as sites of special interest under Criterion 3.3.

Criterion 9.2 Consultation process

Strengths

Weaknesses

Compliance Not applicable.

Criterion 9.3 Measures to maintain and enhance high conservation value attributes

Strengths

Weaknesses


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Criterion 9.4 Monitoring to assess effectiveness

Strengths

Weaknesses


PRINCIPLE 10: PLANTATIONS

Criterion 10.1 Statement of objectives in the management plan

Strengths

Weaknesses

Compliance The management plan has a “Policy of Forest Sustainability” which specifically states the management objectives for the plantation itself. The plantations are well managed with good growth rates.

Criterion 10.2 Plantation design and layout

Strengths

Weaknesses

Compliance The plantation compartments are generally small and scattered as islands in a sea of other agricultural land uses in the area. The Eucalyptus trees provide some diversity in the landscape, especially since they are not contiguous. The aesthetics of the area is not compromised by the presence of these scattered timber compartments.

Criterion 10.3 Diversity in composition

Strengths

Weaknesses The group has not clearly defined and justified the maximum contiguous clear-cut size. This was raised as Observation 02.

Compliance Research has indicated that Eucalyptus camuldulensis is the most suitable species for the area. More recently established compartments have been planted with a hybrid Eucalyptus

camuldulensis x Eucalyptus urophilla clone. Since the compartments are generally not contiguous and there is a wide range of different agricultural land uses in the area this lack of diversity does not represent a high risk to the ecological and social stability.

Criterion 10.4 Species selection

Strengths

Weaknesses

Compliance Eucalyptus was assessed by the Department of Forests in terms of its suitability to be grown in Thailand – this process was completed during the 1960’s and the first Eucalyptus

camaldulensis was established in 1964. The purpose of the exotic commercial plantations was to reduce the pressure on the natural forests, and .Eucalyptus camaldulensis has been shown to outperform any native species.

Criterion 10.5 Restoration of natural forest

Strengths

Weaknesses

Compliance The Siam Forestry Company Group Management has adopted three community forests with the intention of assisting with the restoration and management of these forests. None of the members have any of their own natural forests.

Criterion 10.6 Impacts on soil and water

Strengths

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Weaknesses

Compliance Each of the members is supplied with a soil map of the District or sub-district. This information includes the soil types and soil series and is supplied by the Government Land Development Organisation. Prior to planting a detailed soil analysis is carried out to determine fertilizer requirements and any impediments. In the event of a change in land use e.g. changing a field from maize or sugar cane to a timber compartment, the Siam Group Manager will be informed and an expert team will visit the site in order to determine (through soil testing and site evaluation) if the soil and the site is suitable for a Eucalyptus plantation, and will facilitate easy harvesting and extraction.

Measures taken to improve soil structure, fertility and biological activity include minimising compaction during harvesting by limiting vehicles in the compartment, and leaving adequate slash on site for nutrient cycling. Organic fertilizers are used and one of the members uses organic matter from mushroom propagation as a fertilizer. This promotes biological activity in the soil. There is no burning of the slash post harvest.

None of the members have timber compartments near water bodies or water courses therefore the impact on the water is not a significant factor.

Criterion 10.7 Pests and diseases

Strengths

Weaknesses

Compliance Currently there are no problems with any pests or diseases, but the Siam Group Management must be informed in the event of any problem, and this will be recorded on the member’s file as well as captured in the data base.

In terms of fire protection, fire breaks are cleared around the compartments and the undercover is also cleared to reduce the fuel load and for ease of access for fire fighting.

Criterion 10.8 Monitoring of impacts, species testing and tenure rights

Strengths

Weaknesses

Compliance The monitoring of plantations includes regular and ongoing assessments of the potential on site and off site impacts. Potential on site impacts include the harvesting operations and log transport, as well as the soil preparation for planting and the use of chemicals. Off site impacts include noise, risks of harvesting near to towns, as well as any seed pollution (natural regeneration of the Eucalyptus species off-site). The Eucalyptus species used have been extensively tested and are generally not invasive. The impacts on local welfare and social well being are also monitored through regular communication. All members have legal rights to their land and right of access is not an issue.

Criterion 10.9 Plantations established in areas converted from natural forests after November 1994

Strengths

Weaknesses

Compliance There has been no conversion of forest to non-forest land. The area has been productive agricultural land for centuries. The cutting of natural forest has been prohibited by law since 1989.

10. CERTIFICATION DECISION

SGS considers that The Siam Forestry Company’s forest management of the SLIMF Group West forests can be certified as:

i. There are no outstanding Major Corrective Action Requests

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ii. The outstanding Minor Corrective Action Requests do not preclude certification, but The Siam Forestry Company is required to take the agreed actions before December 2011. These will be verified by SGS QUALIFOR at the first surveillance to be carried out about 6 months from the date of the issuance of the certificate. If satisfactory actions have been taken, the CARs will be ‘closed out’; otherwise, Minor CARs will be raised to Major CARs.

iii. The management system, if implemented as described, is capable of ensuring that all of the requirements of the applicable standard(s) are met over the whole forest area covered by the scope of the evaluation;

iv. The certificate holder has demonstrated, subject to the specified corrective actions, that the described system of management is being implemented consistently over the whole forest area covered by the scope of the certificate.

11. MAINTENANCE OF CERTIFICATION

During the surveillance evaluation, it is assessed if there is continuing compliance with the requirements of the Qualifor Programme. Any areas of non-conformance with the QUALIFOR Programme are raised as one of two types of Corrective Action Request (CAR):

01. Major CARs - which must be addressed and closed out urgently with an agreed short time frame since the organisation is already a QUALIFOR certified organisation. Failure to close out within the agreed time frame can lead to suspension of the certificate.

02. Minor CARs - which must be addressed within an agreed time frame, and will normally be checked at the next surveillance visit

The full record of CARs raised over the certification period is listed under section 12 below.

The table below provides a progressive summary of findings for each surveillance. A complete record of observations demonstrating compliance or non-compliance with each criterion of the Forest Stewardship Standard is contained in a separate document that does not form part of the public summary.

MAIN EVALUATION

Issues that were hard to assess

None.

Number of CARs raised No Major CARs were raised and 2 Minor CARs were raised.

SURVEILLANCE 1


Number of CARs closed Outstanding CARs were closed.

Nr of CARs remaining open Outstanding CARs from previous evaluations were not closed.

New CARs raised New Major CARs and Minor CARs were raised.

Recommendation The forest management of the forests of to remain certified as:

� The management system is capable of ensuring that all of the requirements of the applicable standard(s) are met over the whole forest area covered by the scope of the evaluation; and

� The certificate holder has demonstrated, subject to the specified corrective actions, that the described system of management is being implemented consistently over the whole forest area covered by the scope of the certificate.

SURVEILLANCE 2


Number of CARs closed

AD 36A-12 Page 30 of 33

Nr of CARs remaining open

Nr of New CARs raised

Recommendation

SURVEILLANCE 3





Recommendation

SURVEILLANCE 4





Recommendation

12. RECORD OF CORRECTIVE ACTION REQUESTS (CARS)

CAR # Indicator CAR Detail

01 6.3.1.1 Date Recorded>

09 Dec 2010

Due Date> Dec 2011 Date Closed> dd mmm yy

Non-Conformance:

The alien invasive species on the FMU have not been identified.

Objective Evidence:

The status of Lantana camara is not known by the group. This species was present in the Banchong Kap Community Forest and in the Sing District on member’s plantation. Lantana camara is documented to be from South America.

Mimosa pudica is also an invasive weed that was seen to be invading the ecotone of the Nong Sarn Jao Community Forest.

Close-out evidence:

02 4.2.3 Date Recorded>

09 Dec 2010

Due Date> Dec 2011 Date Closed> dd mmm yy

Non-Conformance:

Certain workers do not hold the necessary skills certificates.

Objective Evidence:

The Tree fellers do not have certificates of competence. There is no evidence that their skills have been evaluated against the best practice guidelines for the job of tree cutting.

Close-out evidence:

AD 36A-12 Page 31 of 33

CAR # Indicator CAR Detail

Date Recorded>

dd mmm yy

Due Date> dd mmm

yy Date Closed> dd mmm yy

Non-Conformance:

Objective Evidence:

Close-out evidence:

13. RECORD OF OBSERVATIONS

OBS # Indicator Observation Detail

01 4.2.5 Date Recorded> 09 Dec 2010 Date Closed> dd MMM yy

Observation:

PPE was generally good, however Siam Forestry Co Ltd needs to investigate the need for safety trousers incorporating clogging material (or legging/chaps) as specified by ILO Table 1 p37. Tree cutters are not provided with such trousers.

Follow-up evidence:

02 10.3.2 Date Recorded> 09 Dec 2010 Date Closed> dd MMM yy

Observation:

The group has not clearly defined and justified the maximum contiguous clearcut size.

Follow-up evidence:

14. RECORD OF STAKEHOLDER COMMENTS AND INTERVIEWS

Nr Comment Response

Main Evaluation

1 The Provincial Labour protection and Welfare office undertook to provide training in legal compliance in terms of worker.

Appreciated by Siam Forestry. No further comment.

2 The Kasetsart University undertook to provide technical documents on e.g. Community Forest Management and Eucalyptus plantation research papers.


3 The land Development Organisation undertook to provide guidance documents in terms of soil protection and enrichment and water management.


AD 36A-12 Page 32 of 33

Nr Comment Response

Main Evaluation

4 Office of Natural Resources and Environment recommended a survey of plant and animal species on the member’s plantations and on the Community Forests.

The surveys of the three community forests have been done and species lists are available. The surveys were completed by the Royal Forest Department in 2010. The ICUN status of the species is also listed and only one vulnerable animal was encountered. Siam Forestry supported this project financially.

Siam Forests support staff also visited the member’s farms to record any valuable plant species within the plantations, and recorded only three tree species that needed to be protected from harvesting. These surveys also included checking for any RT&E species.

5 Mahidol University: They suggested the establishment of a learning centre at Banchong Kap Community Forest.

Siam Forestry subsidised the building of such a learning area and educational signage within the forest. This forest was visited and this input verified at the different stations. The educational area is in the form a an amphitheatre.

Surveillance 1

Surveillance 2

Surveillance 3

Surveillance 4

15. RECORD OF COMPLAINTS

Nr Detail

Complaint: Date Recorded > dd MMM yy

No complaints have been received to date.

Objective evidence obtained:

Close-out information: Date Closed > dd MMM yy

AD 36A-12 Page 33 of 33

ANNEXURE 1

List of Group Certificate Members

Name of

member

Contact Details

(Telephone)

Sub-District Province Geographical Co-ordinates *

Mrs.Thawee 034 - 561335 Mueng

Kanchanaburi Kanchanaburi E 90° 03’ N 14° 34’

Mr.A-kom

081-7050667,081-

7361672 Lao Khuan Kanchanaburi

E 90° 03’ N 14° 34’

Mr.Songsak 081-8145707 Lao Khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr.Sanan 089-0485513 Lao khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr. Chalerm 083-7028030 Nong prue Kanchanaburi E 90° 03’ N 14° 34’

Mr.Suwhatch 081 - 3786282 Dan ma kam

tia Kanchanaburi E 90° 03’ N 14° 34’

Mrs.Ng-en yuang 081-7050633 Lao Khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr.Kriangchai 081-7239088 Nong prue Kanchanaburi E 90° 03’ N 14° 34’

Mr.Sommuth 081-7598667 Dan ma kam


Mr.Kiattisak 081-8568357 Haui kra jao Kanchanaburi E 90° 03’ N 14° 34’

Mr. Jamlong 081-9816106 Sai yok Kanchanaburi E 90° 03’ N 14° 34’

Mr.Prasirt 081-9873089 Boa ploi Kanchanaburi E 90° 03’ N 14° 34’

Mr. Kun 083-1089594 Tha muang Kanchanaburi

E 90° 03’ N 14° 34’

Mrs.Pra yath 085-8484547 Dan ma kam


Mr.Chaiyapong 081-6126174 Lao Khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr. Som nueng 089-2541047 Dan ma kam


Mrs.Sam lit 081-8054328 Lao Khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr.Patipan 081-8805631 Lao khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr.Withoon

084-7069748,081-

7432814 Dan ma kam

tia Kanchanaburi

E 90° 03’ N 14° 34’

Mr.Panat 089-2598288 Boa ploi Kanchanaburi E 90° 03’ N 14° 34’

Mr.Sanchai 089-5495205 Lao Khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr.Kanchith 081-8433530 Lao Khuan Kanchanaburi E 90° 03’ N 14° 34’

Mrs. Sopha 086-3377654 Boa ploi Kanchanaburi E 90° 03’ N 14° 34’

Mr.Paisan 081-8577579 Lao khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr.Ming 085-2503055 Lao Khuan Kanchanaburi E 90° 03’ N 14° 34’

Mr.Boonsong - Nong ya

plong Petchaburi E 90° 03’ N 14° 34’

Mr.U-dom 081-9010787 Suan pueng Ratchaburi E 99° 34’ N 13° 31’

Mr.Panya 081-8566799 Jom bueng Ratchaburi E 99° 34’ N 13° 31’

Mr.Manas Don je dee Supanburi E 99° 37’ N 12° 56’

*Note: Please see map in Chapter 1 for detailed location of members per province.

End of Public Summary