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EUTR checks and reports by external organisations

Since the EUTR entered into force in 2013, the HS Timber Group’s Due Diligence system has been audited by the competent authorities a total of 23 times. All official EUTR audits to date have confirmed the observance of statutory duties of care (Due Diligence).

 The HS Timber Group is keen to maintain its high standards for supply chain security in the long term. Assisted by external experts who examine, evaluate and enhance the systems, we ensure that we have the latest measures and systems in place at all times.

A recent expert opinion issued by the independent consulting firm SGS also confirms conformity of the HS Timber Group’s security system to EUTR, especially for the supplier countries of Ukraine and Belarus.

In the past, independent expert organisations such as INDUFOR from Finland and KPMG Canada also carefully examined the company’s security systems, confirming the efficiency of the steps taken and helping to advance a continuous improvement process at the same time. 


Outcome of HS Timber Group Due Diligence scrutiny by KPMG experts

HS Timber Group engaged KPMG LLP to support its continuous improvement initiatives for timber sourcing at its Romanian sawmills. KPMG LLP (KPMG) examined HS’s current chain of custody processes and provided findings and recommendations on areas where further improvements may be possible to mitigate the risk of receiving timber from illegal sources. 

KPMG Canada’s forest practices group consists of foresters, biologists and forest carbon and chain of custody specialists with international experience in sustainable forestry and chain of custody processes, including SFI, PEFC and FSC certification systems. 

KPMG visited the HS Timber Group head offices, its sawmills in Sebeș and Reci as well as a sample of log yards, active harvest areas and forest management administration offices. Site visits included field observations, interviews with company staff, wood suppliers and other stakeholders and a review of internal chain of custody information maintained by the company and its suppliers. 

In addition to that, processes for managing the risk of sourcing timber from illegal logging were also assessed. Both traditional chain of custody controls as well as incremental processes required to focus on and mitigate risks in jurisdictions where there is a higher risk of illegal logging were checked. 

All identified opportunities to improve processes, controls and communication, focusing on building on existing controls developed by HS Timber Group to further reduce the risk of receiving logs from illegal sources were addressed and worked out by HS Timber Group during 2019. 

KPMG’s report noted that significant enhancements had been made to timber sourcing programs by the company in the last two years and that these included the development of controls to mitigate specific risks identified in historic NGO reports alleging receipt of illegal logs by the company. 

In June and December 2019, KPMG conducted follow-up assessment and field work to assess HS Timber Group’s progress in implementing the recommendations. High and moderate priority actions and recommendations were found to have been implemented. The agreed actions were completed and, where applicable, led to a longer-term continuous improvement program which is intended to yield additional improvements over time that will include benefits for forest management and log traceability across suppliers.