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  • 1

    Funded by:

    This report has been produced by NEPCon, on behalf of WWF-Malaysia. Field research was conducted in

    collaboration with the Malaysian Wood Industries Association (MWIA).

    Supply Chain Mapping

    of Malaysian Timber and

    Wood-based Industries

  • 2

    Supply Chain Mapping

    of Malaysian Timber and

    Wood-based Industries

    NEPCon Tel: +45 8618 0866

    Sren Frichs Vej 38K, Fax: +45 8618 1012

    1. Sal, Email: info@nepcon.net

    8230 byhj, http://www.nepcon.net/

    Denmark

    This publication has been produced with the assistance of the European Union.

    The contents of this publication are the sole responsibility of the partners and can

    no way be taken to reflect the views of the European Union.

    The Project is funded by the European Union, represented by the European

    Commission.

    Published on 18 January 2016

  • 3

    Contents

    1. List of Abbreviations ..................................................................................................................... 5

    2. Introduction ................................................................................................................................... 6

    2.1 Background ............................................................................................................................. 6

    2.2 Forest governance in Malaysia ............................................................................................... 7

    2.3 Legality and sustainability risk in timber supply chains ......................................................... 8

    3. Objective and Research Questions ............................................................................................ 11

    3.1 Objective ............................................................................................................................... 11

    3.2 Research questions ................................................................................................................ 11

    4. Limitations of the Study ............................................................................................................. 12

    4.1 Challenge to engage the timber industry ............................................................................... 12

    4.2 Limited on-site time .............................................................................................................. 12

    4.3 Barriers between regions ....................................................................................................... 12

    4.4 Poor national trade data (by volume) .................................................................................... 12

    5. Methodology ................................................................................................................................ 13

    5.1 Research methods ................................................................................................................. 14

    5.1.1 Literature review ........................................................................................................... 14

    5.1.2 Questionnaire ................................................................................................................ 14

    5.1.3 Semi-structured interview (SSI) and supply chain mapping ......................................... 15

    5.2 Methodological framework ................................................................................................... 15

    6. Results and Discussion ................................................................................................................ 16

    6.1 Domestic production, import and export in Malaysian timber and wood-based industries .. 16

    6.1.1 Domestic production ..................................................................................................... 17

    6.1.2 Imports .......................................................................................................................... 19

    6.1.3 Exports .......................................................................................................................... 21

    6.2 Timber species used in Malaysian timber and wood-based industries ................................. 28

    6.2.1 Threatened species ........................................................................................................ 28

    6.2.2 Protected/ prohibited species ........................................................................................ 29

    6.2.3 Convention on the International Trade in Endangered Species of Wild Fauna and Flora

    (CITES)-listed species ........................................................................................................... 29

    6.3 Sustainability and legality certification in the Malaysian timber and wood-products

    industries ....................................................................................................................................... 32

    6.3.1 Programme for the Endorsement of Forest Certification (PEFC) ................................. 33

    6.3.2 Forest Stewardship Council (FSC) ............................................................................... 34

    6.3.3 Malaysian Timber Legality Assurance Systems ........................................................... 34

    6.3.4 Voluntary legality verification schemes ........................................................................ 35

    6.4 Structure of timber and wood product supply chains in Malaysia ........................................ 37

    6.5 Legality and sustainability risk in Malaysian supply chains ................................................. 42

  • 4

    6.5.1 Risks and mitigation measures for domestic products .................................................. 42

    6.5.2 Risks and mitigation measures for imported products .................................................. 48

    6.5.3 Legality and sustainability risk matrix .......................................................................... 50

    7. Future Trends .............................................................................................................................. 57

    7.1 Domestic production and trade ............................................................................................. 57

    7.2 Imports and exports ............................................................................................................... 57

    7.3 Certification .......................................................................................................................... 58

    8. Recommendations ....................................................................................................................... 59

    8.1 Capacity building .................................................................................................................. 59

    8.2 Collaboration within and across supply chains ..................................................................... 59

    8.3 Support SFM in Sarawak ...................................................................................................... 60

    8.4 Certification .......................................................................................................................... 60

    8.5 Building reference databases for species and origin testing ................................................. 61

    8.6 Further research into the furniture and paper industry .......................................................... 61

    8.7 Standardised reporting of trade data ..................................................................................... 61

    8.8 Certification of Rubber Wood............................................................................................... 62

    8.9 Due diligence regulations...................................................................................................... 62

    8.10 Environmental sustainability criteria for financial institutions ............................................. 62

    8.11 Tackling corruption ............................................................................................................... 63

    9. Conclusion .................................................................................................................................... 64

    10. Bibliography ................................................................................................................................ 65

    11. Appendices ................................................................................................................................... 71

    Appendix 1 Company Overview ..................................................................................................... 71

    Appendix 2 Sample of Supply Chain Questionnaire .................................................................... 74

    Appendix 3 Semi-Structured Interview Questions ....................................................................... 75

    Appendix 4 Protected/ Prohibited Tree/ Plant Species in Malaysia ............................................ 76

    Appendix 5 Legality Verification/ Certification Schemes ............................................................ 78

    Appendix 6 List of HS Codes Used for Trade Analysis ................................................................ 79

  • 5

    1. List of Abbreviations

    AILPA Australian Illegal Logg

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