Forest management 2011 annual audit for easter ontario model forest group by Vince Murphy

SmartWood Headquarters 65 Millet St. Suite 201 Richmond, VT 05477 USA Tel: 802-434-5491 Fax: 802-434-3116 www.rainforest-alliance.org/forestry

Audit Managed by: Canada Regional Office P.O. Box 1771 Chelsea, QC Tel: 819-827-8278 Fax: 819-827-0464 Contact person: Alexandre Boursier Email: aboursier@ra.org

ACCREDITED FSC-ACC-004 ÂŠ 1996 Forest Stewardship Council A.C.

FM-06 January 2011

Forest Management

2011 Annual audit Report for:

Eastern Ontario Forest Group In Kemptville, Ontario, Canada

Report Finalized: Audit Dates: Audit Team:

May 31, 2011 April 12-14, 2011 Christine Korol Vivian Peachey

Certificate code(s): Certificate issued: Certificate expiration:

SW-FM/COC-000232 January 28, 2008 January 27, 2013

Organization Contact: Address:

Scott Davis 10 Campus Dr. PO Box 2111 Kemptville, ON

TABLE OF CONTENTS 1.

INTRODUCTION...........................................................................................................................................3

AUDIT FINDINGS AND RESULTS..............................................................................................................3 2.1. 2.2.

AUDIT CONCLUSION ..................................................................................................................................3 CHANGES IN FMES’ FOREST MANAGEMENT AND ASSOCIATED EFFECTS ON CONFORMANCE TO STANDARD REQUIREMENTS ...................................................................................................................................................3 2.3. STAKEHOLDER ISSUES (COMPLAINTS/DISPUTES RAISED BY STAKEHOLDERS TO FME OR SMARTWOOD SINCE PREVIOUS EVALUATION) ............................................................................................................................4 2.4. CONFORMANCE WITH APPLICABLE NON CONFORMITY REPORTS ...............................................................4 2.5. NEW CORRECTIVE ACTIONS ISSUED AS A RESULT OF THIS AUDIT ..............................................................7 2.6. AUDIT OBSERVATIONS ..............................................................................................................................9 3.

AUDIT PROCESS.......................................................................................................................................10 3.1. 3.2. 3.3. 3.4. 3.5. 3.6.

AUDITORS AND QUALIFICATIONS:............................................................................................................10 AUDIT SCHEDULE ...................................................................................................................................11 SAMPLING METHODOLOGY: ....................................................................................................................11 STAKEHOLDER CONSULTATION PROCESS ...............................................................................................12 CHANGES TO CERTIFICATION STANDARDS .............................................................................................12 REVIEW OF FME DOCUMENTATION AND REQUIRED RECORDS................................................................13

APPENDIX I: FSC Annual Audit Reporting Form: ..........................................................................................15 APPENDIX II: List of visited sites (confidential) ..............................................................................................17 APPENDIX III: List of stakeholders consulted (confidential) ..........................................................................18 APPENDIX IV: Forest management standard conformance (confidential) ...................................................20 APPENDIX V: Chain-of-Custody Conformance (confidential)........................................................................26 APPENDIX VI: SmartWood Database Update Form ......................................................................................31 APPENDIX VII: Group management conformance checklist FSC-STD-30-005 v1-0 (confidential) ...........32 APPENDIX VII-a: Certified Pool Participation List ...........................................................................................38 APPENDIX VIII: Non-Timber Forest Products Certification Evaluation (confidential) ..................................40

SmartWood Prgram FM-06 January 2011

Page 2 of 42

1. INTRODUCTION The purpose of this report is to document annual audit conformance of Eastern Ontario Forest Group (EOFG), hereafter referred to as Forest Management Enterprise (FME). The report presents the findings of SmartWood auditors who have evaluated company systems and performance against FSC forest management standards and policies. Section 2 of this report provides the audit conclusions and any necessary follow-up actions by the company through corrective action requests. SmartWood audit reports include information which will become public information. Sections 1-3 will be posted on SmartWood’s website according to FSC requirements. All appendices will remain confidential. Dispute resolution: If SmartWood clients encounter organizations or individuals having concerns or comments about Rainforest Alliance / SmartWood and our services, these parties are strongly encouraged to contact SmartWood regional or Headquarters offices directly (see contact information on report cover). Formal complaints or concerns should be sent in writing.

2. AUDIT FINDINGS AND RESULTS 2.1.

Audit conclusion

Based on Company’s conformance with FSC and SmartWood requirements, the audit team makes the following recommendation: Certification requirements met, certificate maintenance recommended Upon acceptance of NCR(s) issued below Certification requirements not met: Additional comments: Issues identified as controversial or hard to evaluate.

2.2.

Changes in FMEs’ forest management and associated effects on conformance to standard requirements

The Eastern Ontario Forest Group has seen considerable growth over the audit period, with the addition of the Renfrew County Certified Woodlot Owners group (12 members), the Boisés Est forest group (5 members) and Lavern Heideman & Sons forest group. In addition, the EOFG is pursuing a group Chain-of-Custody certificate for small sawmills in eastern Ontario (note that this is not included in the scope of the EOFG FM/COC certificate). As the EOFG’s size, scope and complexity continue to expand, this growth has implications on the Group Manager’s ability to track and maintain accurate and up-to-date records covering the FSC requirements for all certified group members.

In response to this growth, the EOFG is in the process of developing a new Certification Data Management tool. This web-based application will allow all group members to easily access information covering the entire scope of EOFG services, including information pertaining to the group FSC certificate, as well as a secure system for accessing individual group member information. Group members will be able to upload data and download information necessary to meet their certification requirements. This management tool will greatly assist the Group Manager in membership tracking and in maintaining a central, up-to-date database.

2.3.

Stakeholder issues (complaints/disputes raised by stakeholders to FME or SmartWood since previous evaluation)

Issue/Comment

SmartWood Response

Prior to the audit, the auditors received a complaint from a member of the Algonquin First Nation. The complaint voiced concern that the majority or property owners have not met Principle 3 and have not consulted with First Nations whose territory their woodlots are located. The complaint was not specific to the EOFG group certificate, but a general complaint to all FSC group certificates in Canada.

Based on the wording of the Great Lakes-St. Lawrence standard (the ‘Rainforest Alliance/SmartWood Locally adapted Standards for Assessing Forest Management in the Great Lakes/Saint-Lawrence Region’ was used during this year’s audit), the emphasis is on evaluating conformance of the ‘manager’ and not specifically individual group members. Both the former FSC GLSL Draft standard and the RA/SW GLSL standard require that ‘the manager’ be in conformance with the indicators in Principle 3. While this is a slight distinction, in a group certificate scenario the onus is on the group manager to demonstrate conformance to the requirements of Principle 3 on behalf of all group members.

Community forest managers indicated that all comments, requests and complaints are addressed, with a record of any significant complaint kept on record.

No response required.

2.4.

The audit team found EOFG to be in conformance with the requirements of Principle 3 at this time. The EOFG Group Manager has demonstrated a good knowledge of the First Nations issues, an openness to continual support of Aboriginal values identification and has made a good effort to make available opportunities for group members participate in Aboriginal Value identification events.

Conformance with applicable non conformity reports

The section below describes the activities of the certificate holder to address each applicable non conformity report (NCR) issued during previous evaluations. For each NCR a finding is presented along with a description of its current status using the following categories. Failure to meet NCRs will result in non-conformances being upgraded from minor to major status with conformance required within 3 months with risk of suspension or termination of the SmartWood certificate if Major NCRs are not met. The following classification is used to indicate the status of the NCR: Status Categories

SmartWood Prgram FM-06 January 2011

Explanation

Page 4 of 42

Closed Open

Operation has successfully met the NCR. Operation has either not met or has partially met the NCR.

Check if N/A (there are no open NCRs to review) CAR 01/10 Nonconformance Major Minor X

Reference Standard & Criteria: 7.3.1 Regarding training in the community forests, there are training programs in place which are given to the contractors in meetings prior to the annual start-up of operations. It was found however, that this training was incomplete related to avoiding damaging to the environment. All training was not adequately passed along to the forest workers. Contracts between the forest manager and the logging contractors included penalties for various cutting infractions, but did not cover avoiding damage to the environment and how to proceed in the event this damage was likely to occur. Related to training, supervision was also found to be inadequate specific to avoiding potential damage to the environment. Once damage was realized, proper steps were not taken fast enough to avoid damage of a larger magnitude. The EOFG and the community forest manager both acknowledged the current problems associated with training and supervision and indicated that work has already begun to ensure a situation like this does not re-occur.

Corrective Action Request: The EOFG shall develop procedures to ensure that adequate training is given to both the supervisors and forest workers in order to meet the standard requirements as outlined in 7.3.1. Timeline for conformance: By the next annual audit. Evidence to close CAR: This non-conformance was a resulted from rutting damage on a South Nation Conservation managed Larose Forest tract. During the 2011 audit, the auditor visited the site in question. Prior to the above identified non-conformance, processes were in place requiring a pre-operational meeting; however the supervisor, but not the forest workers, were required to attend. In response to the above CAR, it is now required that forest workers attend the onsite start-up meeting. Specifically, additional wording in the Condition of Sale contract states “UCPR (United Counties of Prescott and Russell) requires the Purchaser’s field supervisor and the operators who will perform the work to attend a start-up meeting to review the operating conditions and standard operating procedures”. These modified procedures were implemented during the 2011 audit period. Contracts with logging contractors (Operating Conditions section 6) now explicitly indicate site and residual tree damage as well as soil erosion (rutting) standards, and reference how to proceed in the event of site damage. Rutting standards have been changed and are consistent with the Ontario Ministry of Natural Resource’s Stand and Site Guide 2010. Additionally, in response to the incident, the Operating Conditions for 2011 stipulate increased supervision. As is standard practice after a

SmartWood Prgram FM-06 January 2011

Page 5 of 42

contractor incident is identified more intensive monitoring both by the supervisor and the FME manager is conducted.

CAR Status: Follow-up Actions (if app.):

The requirements of this CAR have been met and is closed. CLOSED None required.

CAR 02/10 Nonconformance Major Minor X

Reference Standard & Criteria: COC 1.3 FME sells standing timber to logging contractors who are not covered in the scope of the certificate. Contractors use FME bills of lading which include the FMEâ&#x20AC;&#x2122;s FSC certificate code and FSC claim. Contractors are not provided with the FSC claim and certificate code on sales documentation (timber sale contracts). Corrective Action Request: FME shall develop and implement procedures to ensure that: a) All logging contractors who use FMEâ&#x20AC;&#x2122;s bills of lading are covered under the certificate scope; and b) The FSC claim (FSC Pure) and certificate code shall be included on sales documentation such as timber sale contracts when standing timber is sold to a logging contractor who is not included in the scope of the certificate. Timeline for conformance: By the next annual audit. Evidence to close CAR: EOFG has developed a list of Logging Contractors that operate on EOFG FSC-certified properties. All operators who harvest and deliver wood carry numbered bill of lading documentation that identifies the EOFG Certificate number SW-FM/COC-000232, in addition to the forest owner, location, species, destination and product group. The contractors are included on the list and in most cases are covered in the scope of the EOFG certificate. Using the definition of forest gate, EOFG has delineated logging contractors into the following categories of forest gate: 1) Standing tree/stump 2) Log Landing 3) Off-site mill - Loggers who are work on behalf of another CoC holder, such as a sawmill, are covered under the sawmill CoC certificate. Note: Some members of the group managing a FMU have extended their certificate retaining ownership of the log until it reaches the purchaser. For loggers included in categories 1 and 2, EOFG has included them within the scope of their certificate and requires them to sign a MOU indicating that FSC material harvested from an EOFG group memberâ&#x20AC;&#x2122;s property cannot be mixed with non-certified material, and that trademark use does not extend to the logger. All contractors are notified of the designation in a letter that accompanies the Timber Sales Contract and will include the information that: (a) all wood harvested from the eligible tract is FSC Pure. (b) all logging contractors will use the EOFG Bill of Lading booklets provided to them by the forest owner or forest

SmartWood Prgram FM-06 January 2011

Page 6 of 42

manager. For loggers not included in the scope of the certificate, FSC Guidance has stipulated that non-certified loggers harvesting wood from an FSC-certified forest may pass on the FSC claim so long as the wood is delivered it directly to a FSC-certified mill, where payment is made by the logger after the wood has been delivered. In this way, category 3 loggers may use the EOFG Bill of Lading and pass on the FSC claim so long as logs are shipped directly from the FSC forest to the sawmill, where ownership is transferred. In addition, EOFG will include a procedure in the revised CoC Policy for Loggers (version 3 Policy & Procedure Manual) for logging contractors not included in the scope of the EOFG FSC certificate (ie. category 3). All logging contractors not included in the scope of the certificate will: a) Not mix FSC and non-FSC certified logs at any time through the process of transportation or at the harvest site. b) Use the EOFG Bill of Lading system to identify the EOFG certificate code, source, location, date, destination, product group and volume of FSC material. c) Provide a signature to indicate that all material harvested from an identified site is FSC-certified and no contamination occurred. The EOFG will provide SmartWood with a list of all loggers that are included in the scope of the certificate. This will be provided through our EOFG Forest Certification Organizational Chart. The EOFG or an agent assigned will monitor compliance of this procedure to ensure no contamination of FSC and non-FSC material occurs. This CAR is closed. CAR Status: Follow-up Actions (if app.):

2.5.

CLOSED None required.

New corrective actions issued as a result of this audit

NCR#: 01/11 Standard & Requirement:

NC Classification: Major Minor X FSC-STD-30-005 V1-0, Indicator 1.3, 4.1 IV, Vd, 5.1 II, 6.2

Report Section:

Appendix VI, section 1.3, 4.1 IV, Vd, 5.1 II, 6.2

Description of Non-conformance and Related Evidence: The EOFG has switched to the new Group Standard (30-005) and have not yet updated their administration systems and records to be in conformance with all the requirements of the new standard. Specifically, the following non-conformances were identified: â&#x20AC;˘ there was no evidence provided of a written public policy of the EOFG's commitment to the FSC Principles & Criteria (1.3); â&#x20AC;˘ Group member MOUs do not clearly outline what information is required to be made publicly available to SW or FSC. (4.1 IV);

SmartWood Prgram FM-06 January 2011

Page 7 of 42

Group member MOUs do not make reference to the restrictions or requirements of FSC promotional trademark use (4.1 Vd); • Group training is conducted, but a record of such is not explicitly maintained (5.1 II); and • The Group Manager has not specified the maximum number of members that can be supported by the management system and the human and technical capacities of the Group entity (6.2). Organization shall implement corrective actions to demonstrate Corrective Action Request: conformance with the requirement(s) referenced above. Note: Effective corrective actions focus on addressing the specific occurrence described in evidence above, as well as the root cause to eliminate and prevent recurrence of the non-conformance. By the next annual surveillance audit. Timeline for Conformance: PENDING Evidence Provided by Organization: PENDING Findings for Evaluation of Evidence: OPEN NCR Status: •

Comments (optional):

NCR#: 02/11 Standard & Requirement:

NC Classification: Major FSC-STD-30-005 V1-0, Indicator 5.1 VI, 8.1, 8.2, 8.3

Report Section:

Appendix VI, section 5.1 VI, 8.1, 8.2, 8.3

Minor X

Description of Non-conformance and Related Evidence: The EOFG Group Manager conducts internal audits of all active operations on an annual basis. However, not all internal auditing/monitoring requirements of the new Group Standard (30-005) have been met. Specifically: • Records of internal audits or monitoring have not been maintained (5.1 VI); • There is no policy for sampling other types of group members (ie. non-active sites) to ensure continued compliance (8.1); • The specific criteria that the Group Manager evaluates during internal audits are not defined or recorded (8.2); and • The minimum sample to be visited annually for internal monitoring in accordance with Type 1 Group sampling has not been determined (8.3). Organization shall implement corrective actions to demonstrate Corrective Action Request: conformance with the requirement(s) referenced above. Note: Effective corrective actions focus on addressing the specific occurrence described in evidence above, as well as the root cause to eliminate and prevent recurrence of the non-conformance. By the next annual surveillance audit. Timeline for Conformance: PENDING Evidence Provided by Organization: PENDING Findings for Evaluation of Evidence: OPEN NCR Status: Comments (optional):

SmartWood Prgram FM-06 January 2011

Page 8 of 42

NCR#: 03/11 Standard & Requirement:

NC Classification: Major Minor X FM-35 SmartWood Chain-of-Custody Standard for Forest Management Enterprises (FMEs) - CoC 1.3 SmartWood Certification Standard for NTFP – Addendum for the Certification of Maple Sugaring Operations in Canada (March 2007) Indicator 8.3 MAPLE2 Appendix V - CoC 1.3 Report Section: Appendix IX - section 8.3 MAPLE2 Description of Non-conformance and Related Evidence: Volume of maple syrup sold is well documented. However, there is no process in place requiring the FSC claim (FSC Pure) and the FM/CoC code to be included on sales invoices when product is being sold to a non-end user. Organization shall implement corrective actions to demonstrate Corrective Action Request: conformance with the requirement(s) referenced above. Note: Effective corrective actions focus on addressing the specific occurrence described in evidence above, as well as the root cause to eliminate and prevent recurrence of the non-conformance. By the next annual surveillance audit. Timeline for Conformance: PENDING Evidence Provided by Organization: PENDING Findings for Evaluation of Evidence: OPEN NCR Status: Comments (optional):

2.6.

Audit observations

Observations are very minor problems or the early stages of a problem which does not of itself constitute a non-conformance, but which the auditor considers may lead to a future nonconformance if not addressed by the client. An observation may be a warning signal on a particular issue that, if not addressed, could turn into a NCR in the future (or a pre-condition or condition during a 5 year re-assessment).

OBS 01/11

Reference Standard & Requirement: Rainforest Alliance/SmartWood Locally adapted Standards for Assessing Forest Management in the Great Lakes/SaintLawrence Region – Indicator 8.1, 8.2 Most monitoring occurs by group member FMU’s at the stand level (e.g. pre, partial and post-harvest inspections). For community forests, monitoring activities would be identified in their management and operational plans. EOFG conducts internal audits but does not have any other monitoring activities nor do they track monitoring activities of participating community forests or group members. Typically there is only limited consideration of social factors in monitoring activities at the group entity, FMU and stand. Observation: EOFG should consider methods of tracking monitoring activities for the purpose of ensuring that monitoring is occurring and to explore opportunities for information exchange. More formalized monitoring of social values should be considered.

SmartWood Prgram FM-06 January 2011

Page 9 of 42

OBS 02/11

Reference Standard & Requirement: FM-35 SmartWood Chain-of-Custody Standard for Forest Management Enterprises (FMEs) - CoC 1.3 SOP 7.0 - Group Chain of Custody is out of date and is misleading. The scope of the EOFG’s FM/CoC certificate does not cover full CoC certification (under the FSC-STD-40-004 standard), yet some of these details are included in the FM/CoC Policy Manual. The CoC requirements for the FM/CoC are vastly different than what is required under the full CoC standard. EOFG has independently sought Group CoC Certification (FSC-STD-40-004 V2) and has prepared separate Group CoC Procedures. The dates of updates to the FM/CoC Policy Manual are not included making it impossible to track document versions. Observation: The organization should remove FSC-STD-40-004 CoC policies and SOPs that are outdated and incorrect in the FM/CoC Policy Manual, and clearly delineate the CoC requirements under the EOFG’s FM/CoC certificate. Dates of developing new procedures and revisions to the FM/CoC Policy Manual should be noted.

OBS 03/11

Reference Standard & Requirement: Rainforest Alliance/SmartWood Locally adapted Standards for Assessing Forest Management in the Great Lakes/SaintLawrence Region – Indicator 6.2.1 The most recent Species At Risk (SAR) list for the EOFG group was provided to the audit team (Kemptville District Species at Risk – Sept. 2010). The list is based on information from governmental agencies, specifically the MNR Natural Heritage Information Centre (NHIC) database. In an email provided to the audit team, the EOFG described other species at risk that have been identified by other groups (non-OMNR). These species are not formally documented on the organization’s master SAR list, but are considered in management plans and given additional protection. Observation: As the organization continues to grow in size and scope, the FM Group Manager should maintain a central and up-to-date list that of all species at risk presently or potentially found in any of the forest area included in the scope of the EOFG certificate.

3. AUDIT PROCESS 3.1.

Auditors and qualifications:

Auditor Name

Christine Korol

Qualifications:

Christine Korol, M.F.C., is the SmartWood Forest Management and Chain-ofCustody Associate for Ontario. Christine has a Masters degree in Forest Conservation from the University of Toronto, and a Honours Bachelor of Science degree in Ecology from the University of Guelph. Previously, Christine has worked with organizations such as the World Wildlife Fund, the Grand River Conservation Authority and the Toronto and Region Conservation Authority. Christine has conducted over 35 CoC audits/assessments and 6 FM audits/assessments for SmartWood, as well as completed the SmartWood Lead Auditor Training program.

Auditor Name

Vivian Peachey

SmartWood Prgram FM-06 January 2011

Auditor role

Lead Auditor

Auditor

Page 10 of 42

Qualifications:

3.2.

Audit schedule

Date April 12 April 13 April 14 April 14 May 18 May 19 May 31

Vivian Peachey has worked in the forest management sector for the past 10 years specifically as it relates to forest certification. Vivian has a Master of Forest Conservation from UofT and Specialist in International Development. She worked seven years for the Forest Stewardship Council Canada as Director of Certification Applications and Brand Management on forest and chain of custody standards and policies. Specialties include green markets and private woodlot management. Vivian has conducted over 100 Chain of Custody evaluations and 13 FM audits/assessments. Vivian is an approved SmartWood Lead Auditor, and has completed the ISO 14001 auditor course.

Location /Main sites

Principal Activities

Kemptville Office Eastern Ontario Kemptville area Kemptville Office SmartWood Office SmartWood Office SmartWood Office

Opening meeting, Field Visits Field Visits Closing meeting Draft report to EOFG Comments received from EOFG Report finalized Total number of person days used for the audit:7.0 = number of auditors participating 2 X number of days spent in preparation, on site and post site visit follow-up including stakeholder consultation

3.3.

Sampling methodology:

On-site sampling followed the guidance outlined in FSC-STD-20-007 (V3-0). Subsets were classified based on the forest size, type (private vs. community/county forest), standard used (ie. NTFP addendum for maple syrup). New members were also sampled as a separate subset. In total, 5 subsets were identified. SmartWood then determined the minimum number of sites to be evaluated per subset by applying the application sampling calculation formula based on the characteristics of the subset (see FSC-STD-20-007 Annex 1 for formulas). Subset

# Members

# Sites to be Evaluated (based on sampling formula in 20-007)

Small private landowners (SLIMFs) Community forests Large forests (> 1000 ha) Maple syrup operations New members Minimum Site Visits Required:

86 4 4 7 24

6 1 1 1 3 12

Once the number of sites per subset was determined, site selection focused on evaluating active operations or operations that had had activity over the audit period, group members not visited previously, and sites that specifically related to the Principles and Criteria being evaluated this year (P3 and P8, 6.2, 6.3, 6.9, 9.4, 6.2.5, 6.5.1). Other sites were selected based on their proximity to other sites being visited as to maximize the number of sites to be visited over the course of the on-site evaluation. The main geographic areas focused on were Renfrew County, the United Counties of Stormont Dundas and Glengarry, Prescott & Russell and the United Counties of Leeds and Grenville.

SmartWood Prgram FM-06 January 2011

Page 11 of 42

3.3.1 List of FMUs selected for evaluation FMU Name Leduc Property South Nation Conservation Brandstad Property Stuart Property Adamchick Property Renfrew County Forest Bonenburg Property South Nation Conservation Larose Forest

SD&G Forest

3.4.

Rationale for Selection Private landowner - recent pine harvest Community Forest (North Stormont) - recent lowland hardwood harvest - culturally significant species project New private landowner - recent hardwood harvest Private landowner - recent harvest white pine uniform shelterwood & cedar operation New private landowner - mix of hardwood, pine stands, and plantations County Forest - recent red pine plantation harvest, late stage removal. Private landowner - maple forest Maple syrup production Community Forest - culturally significant species project Community Forest - thinning and shelterwod - salvage and tending - maple sap production - site of CAR 03/10 re: rutting County Forest - active operation

Stakeholder consultation process Stakeholder type

(i.e. NGO, government, local inhabitant etc.) Private Forest Owners Government (non-members) Independent Contractors First Nations Forest Mangers

3.5.

Stakeholders notified (#)

Stakeholders consulted or providing input (#)

6 1 2 2 8

Changes to Certification Standards

Forest stewardship standard used in audit: Revisions to the standard since the last audit:

Changes in standard:

Rainforest Alliance/SmartWood Locally adapted Standards for Assessing Forest Management in the Great Lakes/Saint-Lawrence region

No changes to standard. Standard was changed (detail changes below) Some minor errors like typos and cross references from the FSC Canada GLSL standard were fixed, but also some indicators were modified and some were added following comparison with the SmartWood Generic Standard. Changes were made to indicators under Criteria: 1.2; 1.5; 2.2; 2.3; 4.2; 6.1; 6.2; 6.3; 6.4; 6.5; 7.1; 7.4; 8.1; 8.3; 8.4; 9.1; 9.4. Most of the changes done to Indicators in this new SW locally adapted generic standard are corrected typos, or other changes that do not

SmartWood Prgram FM-06 January 2011

Page 12 of 42

represent a significant change from original FSC Canada GLSL indicators. The only new/corrected Indicators where substantial change occurs and where conformance needed to be verified this year are: 6.2.5 and 6.5.1

Implications for FME:

3.6.

Conformance to new requirements verified .

Review of FME Documentation and required records

a) All certificate types Required Records

Reviewed

Complaints received by FME from stakeholders, actions taken, follow up communication

Comments: No complaints sent to the EOFG from stakeholders over the audit period. Accident records

Comments: There have been no accidents reported to the Forest Certification Coordinator over the past 12 month period since the 2010 Annual Audit Training records

Comments: Training includes workshops conducted by EOFG and informal meetings with Forest Mangers and landowners. Operational plan(s) for next twelve months

Comments: Each of the Community based forests have their 5 year operational plans as a part of their Forest Management Plan. Smaller private forest owners do not usually set operational plans in advance of a harvest. Plans for sites visited were made available to the auditors for review. Inventory records

Comments: The EOFG do not maintain inventory of products. Harvesting records

Comments: Annual harvesting records over the period of July - July. Records for previous periods are available. b) Group Certificates (delete this table if not a group certificate) Required Group Records Group management system

Reviewed Y

Comments: Policy & Procedure manual reviewed. Rate of membership change within the group Comments: Updated list of members provided. Formal communication/written documentation sent to members by the group entity during the audit period

Comments: The Certification Working Group meets quarterly and minutes are

SmartWood Prgram FM-06 January 2011

Page 13 of 42

maintained. Forest Managers interact with landowners at their SGM, workshops and functions. Each group member is a member of the EOFG and have access to enews, a monthly forestry forum with a specific certification page for FSC-certified EOFG members. Records of monitoring carried out by the group entity

Comments: Interal auditing/monitoring records not documented. See NCR 02/11. Post-harvest inspection reports were provided for some sites visited. Records of any corrective actions issued by the group entity

N N/A

Comments: No Corrective Actions were issued over the audit period. Updated list of group members

Comments: Updated list of members provided.

SmartWood Prgram FM-06 January 2011

Page 14 of 42

APPENDIX I: FSC Annual Audit Reporting Form: (NOTE: form to be prepared by the client prior to audit, information verified by audit team)

Forest management enterprise information: Eastern Ontario Forest Group FME legal name: SW-FM/CoC â&#x20AC;&#x201C; 000232 FME Certificate Code: Previous 12 month period Reporting period Dates 1. Scope Of Certificate Type of certificate: group

SLIMF Certificate: Private Landowners = Small SLIMF Community Forests = non-SLIMF New FMUs added since previous evaluation Yes No Group Certificate: Updated FMU and group member list on file with SmartWood. Multi-FMU Certificate: List of new FMUs added to the certificate scope: FMU Area Forest Location Name/Description Type Latitude/Longitude Renfrew Cluster (12 members) Boises Est (5 members)

2039 ha 165 ha

Mixed Mixed

2. FME Information No changes since previous report (if no changes since previous report leave section blank) Temperate Forest zone Certified Area under Forest Type 30,775 hectares - Natural 14,000 hectares - Plantation Linear Kilometers Stream sides and water bodies 4. Forest Area Classification No changes since previous report (if no changes since previous report leave section blank) 44,775 hectares Total certified area 44,775 hectares Total forest area in scope of certificate Private ownership Ownership Tenure private management Management tenure: Forest area that is: Privately managed 10,206 hectares hectares State/Public managed 34,569 hectares Community managed Area of production forests (areas where timber may be harvested) 34,775 hectares Area without any harvesting or management activities: strict forest 10,000 hectares reserves 5. High Conservation Values identified via formal HCV assessment by the FME and respective areas No changes since previous report (if no changes since previous report leave section blank)

Code

HCV TYPES1

Description:

Area

3. Workers Number of workers including employees, part-time and seasonal workers: 4 workers Total number of workers 2 Male 2 Female - Of total workers listed above 0 Number of serious accidents 0 Number of fatalities 6. Pesticide Use FME does not use pesticides. (delete rows below)

The HCV classification and numbering follows the ProForest HCVF toolkit. The toolkit also provides additional explanation regarding the categories. Toolkit is available at http://hcvnetwork.org/library/global-hcv-toolkits.

SmartWood Prgram FM-06 January 2011

Page 16 of 42

APPENDIX II: List of visited sites (confidential) FMU or other Location Leduc Property SN Conservation Brandstad Property Stu art Property

Compartment/ Area Compartment 82

Adamchick Property Renfrew County Forest

Deacon Tract

Bonenburg Property SN Conservation (North Stormont) Larose Forest Larose Forest Larose Forest Larose Forest SD&G Forest SN Conservation Office

Compartment 56 Compartment 140 Compartment 139 Compartment 98/99 Compartment 289/290 McCuaigâ&#x20AC;&#x2122;s Corners

Site description / Audit Focus and Rationale for selection Private landowner - recent pine harvest Community Forest - recent lowland hardwood harvest New private landowner - recent hardwood harvest Private landowner - recent harvest white pine uniform shelterwood & cedar operation New private landowner - interesting mix of hardwood, and pine stands, as well as plantations County Forest - recent red pine plantation harvest, late stage removal. Private landowner - maple forest, maple syrup production Community Forest - culturally significant species project Community Forest - thinning and shelterwood Community Forest - salvage and tending Community Forest - maple sap production Community Forest - site of CAR 03/10 re: rutting County Forest - active operation Meeting with Algonquin First Nation members

APPENDIX III: List of stakeholders consulted (confidential) List of FME Staff Consulted Name Scott Davis Mark Richardson

Title EOFG Certification Coordinator EOFG General Manager

Contact

Type of Participation

(613) 258-8422 sdavis@eomf.on.ca (613) 258-8424 mrichardson@eomf.on.ca

Interview Interview

List of other Stakeholders Consulted Name Jim Hendry

Organization

Contact

Type of Participation Interview

Amanda Lessard Ron Keane

OMNR Stewardship Coordinator and SD&G Project Coordinator SN Conservation Forestry Specialist Renfrew County Certified Woodlot Owners Cluster Coordinator Boisés Est Forest Manager Senior Forest Technican Larose UCPR SD&G Certified Woodlot Owner Logging Contractor – Leduc Property EOCFG Forest Consultant President – Lavern Heideman & Sons Vice President Lavern Heideman & Sons EOFG Director, Certified Woodlot Owner Renfrew County Certified Woodlot Owner, President of Renfrew Chapter of OWA Renfrew County Certified Woodlot Owner County of Renfrew Forest Manager Renfrew County Certified Woodlot Owner, Maple Syrup Producer SN Conservation Forest Tech, Algonquin First Nation Algonquin – Sharbot Lake SN Conservation Director of Lands and Fisheries Plent Canada Intern OMNR Native Liaison Officer

Louis Prevost

Director of Planning UCPR

Interview

Josee Brizard

Director of Conservation Programs, SNC

Interview

Steven Hunter Dean Johnson Yannick Loranger Nicolas Gautier JP Leduc Greg Beach Dan Baker Ed Heideman Kris Heideman Tony Bull John Stuart Tom Adamchick Jeff Muzzi Ray & Carol Anne Bonenberg Chris Craig Larry McDermott Pat Piitz

Interview Interview Interview Interview Interview Interview Interview Interview Interview Interview Interview Interview Interview Interview Interview Interview Interview ron.keane@onta rio.ca

Interview Phone interview

Achille Drouin Simon-Pierre Desjarlais Rose-Marie Chretien Manon Besner

EOFG Board Member, landowner and group member (SDG) Larose Forest â&#x20AC;&#x201C; Junior Forest Technician Woodlot Advisory Service, Coordinator, SNC Larose Forest Junior Forestry Technologist

SmartWood Prgram FM-06 January 2011

Interview Interview Interview Interview

Page 19 of 42

APPENDIX IV: Forest management standard conformance (confidential) The table below demonstrates conformance or non-conformance with the Forest Stewardship Standard used for evaluation as required by FSC. The SmartWood Task Manager should provide guidance on which sections of the standard should be evaluated in a particular audit. SmartWood may evaluate only a subset of the criteria or principles of the standard in any one particular audit provided that the FME is evaluated against the entire standard by the end of the certificate duration. Findings of conformance or non conformance at the criterion level will be documented in the following table with a reference to an applicable CAR or OBS. The nonconformance and CAR is also summarized in a CAR table in Section 2.4. All nonconformances identified are described on the level on criterion though reference to the specific indicator shall be noted. Criteria not evaluated are identified with a NE.

P&C

2.1

Conform ance: Findings Yes/No/ NE Principle 2. TENURE AND USE RIGHTS AND RESPONSIBILITIES Y With respect to private landowners, an assessment roll number for the property must be provided on the MFTIP (Managed Forest Tax Incentive Program) application form, a program which all private landowners in the group participate in. The roll number can be linked to the property tax statement, which includes information about the property title.

NCR OBS (#)

All group members (private, County and Community forests) are required to sign MOUs with the group manager. The MOU includes details about the property boundaries, size and location, as well as a clause requiring that the applicant be the registered owner of the property. 2.2

The ‘Pre-assessment Checklist’ (see EOFG Policy & Procedure version Sept 2007) includes identifying any groups that traditionally use the forest owner’s property. Customary use rights have not been identified on any private lands. County and Community Forests are multi-use forests and some (ie. Larose Forest) have agreements with various user groups (e.g. ATV, snowmobile). The various activities permitted on these public forests are outlined in their MOUs (see Renfrew County MOU). The resource use rights are also incorporated into local plans.

2.3

Within the Larose Forest, the feasibility of innovative tenure arrangements are being explored with the possibility of maple syrup producers leasing land from Larose forest (10 year period). Additional annual income ($0.50 per tap x 5000 taps = $25,000 per annum), would be generated and would complement management plans and harvest schedules for the stand. EOFG has a dispute resolution policy (see P&P, Policy 3.2) which outlines the process for resolving disputes with stakeholders and adjacent landowners. Based on interviews with EOFG staff, forest

SmartWood Prgram FM-06 January 2011

Page 20 of 42

3.1

landowners and managers, there were no disputes over tenure claim and use rights identified over the audit period. Principle 3. INDIGENOUS PEOPLES' RIGHTS The EOFG Group manager has demonstrated good working knowledge of Aboriginal communities in the region. There is an open line of communication between the Mohawk Akwesasne First Nation and the Algonquin First Nation. Evidence of this includes: • Member of the Mohawk Akwesasne First Nation has a permanent seat on the EOFG board; • There are several First Nations landowners in the EOCFO program; • Member of the Algonquin First Nation (Chris Craig) is a Forest Technician with South Nation Conservation, and a member of the EOFG Forest Certification Group. Prior to the audit, the auditors received a complaint from Chris Craig of the Algonquin First Nation. The complaint voiced concern that the majority of property owners have not met Principle 3 and have not consulted with First nations whose territory their woodlots are located. The FM Group Manager had not been made aware of this concern prior to the email being received by the audit team. During the audit, the audit team and the FM Group Manager met with Chris Craig and Larry McDermott (Algonquin – Sharbot Lake, EOCFO Group member) at the SNC office to discuss the nature of the complaint. The concerns centered around the opinion that individual landowners do not have a good knowledge of First Nation communities in the area, as well as the First Nation values may be present in their woodlot. In essence, the complainant had concerns that FSC group members across Canada were not meeting the ‘spirit’ of Principle 3. The complaint was not specific to the EOFG group certificate. In fact, the Algonquin First Nation members felt that the EOFG Group Manager had been active in maintaining a good relationship with First Nations and in supporting activities to increase awareness of First Nation values. As the meeting progressed, it was clarified that based on the wording of the standard, the emphasis is the evaluation of the ‘manager’ and not specifically on individual group members. While this is a slight distinction, the onus of evaluation to the requirements of P3 is on whether the group manager can demonstrate conformance on behalf of all group members. In the past, the EOFG has supported various events and workshops aimed at encouraging knowledge of First Nation communities and their values with group members, specifically: • Hosted a First Nations Values workshop in Oct. 2006; • Partnered with SNC in hosting a 2-day Cultural Values workshop in Nov. 2007 During the meeting, both the Algonquin First Nation members and the EOFG Group Manager identified the need to hold another First Nation Values workshop, and both sides were committed to making it happen soon. Following the meeting, the EOFG Group Manager contacted Chris Craig (April 26) to initiate a meeting to discuss next steps in planning a First Nations Values workshop or event in the

SmartWood Prgram FM-06 January 2011

Page 21 of 42

near future. Overall, despite the complaint, the audit team does not find that EOFG was in non-conformance with the standard. The EOFG Group Manager has demonstrated a good knowledge of the First Nations issues, an openness to continual support of Aboriginal values identification and good efforts to make available opportunities for group members participate in Aboriginal Value identification events.

3.2 3.3

N/A Y

3.4

6.2

A phone interview with the OMNR Liaison officer did not reveal any concerns from the Algonquin communities that the officer was made aware. See above in Criterion 3.1. As detailed above, the EOFG has been supportive of the identification of Aboriginal values in the region by hosting workshops aimed at increasing the identification of Aboriginal values in the region. Specific values covered in the last workshop (2007) include Black Ash regeneration/preservation and medicinal forest plant identification. The Mohawks of Akwesasne were also represented on an Emerald Ash Borer committee lead by the EOFG. The EOFGâ&#x20AC;&#x2122;s Policy & Procedure manual include an SOP (1.8) for identifying, recording and protecting Aboriginal values. Natural heritage values are considered in a SNC cedar dominated forest where yellow birch & cedar are favored through single tree removal to release remaining trees for spiritual and medicinal purposes. As evidenced in discussion, there are no formal agreements in place regarding compensation for Traditional Ecological Knowledge (TEK). However, the EOFG has been actively supportive in the sharing of knowledge with Aboriginal groups for many years, as noted above. Specifically, for the past 15 years, the EOFG has donated $40,000/yr to support environmental programs for the Mohawk of Akwesasne (workshops, staff, to author publications, etc). While this is not specifically considered compensation for TEK, it is important to note the financial ways in which the EOFG supports local Aboriginal communities. Principle 6. ENVIRONMENTAL IMPACT The most recent Species At Risk (SAR) list for the EOFG group was provided to the audit team (Kemptville District Species at Risk â&#x20AC;&#x201C; Sept. 2010). The list is based on information from governmental agencies, specifically the MNR Natural Heritage Information Centre (NHIC) database.

OBS 03/11

Prior to the finalization of the report, EOFG submitted evidence which details the other strategies for compiling information regarding SAR identification, including a list of 12 groups (other than the OMNR) who are consulted with to determine the overall designation of species at risk for EOFG members. These other groups have contributed to the addition of several other SAR (apart from the NHIC list) that had been provided protection. While there are several pieces of information that contribute to SAR listings for EOFG group subsets (example from UCPR County Forest), a central and updated SAR list covering all EOFG group members has yet to be compiled by the FM Group Manager. See OBS 03/11.

SmartWood Prgram FM-06 January 2011

Page 22 of 42

If a SAR is identified on a private or community woodlot, measures are incorporated into the Forest Management Plan (FMP) and the prescription to address and protect the SAR. For sites visited during this audit, FMPs included specifications for protection of butternut (Bonenberg) consideration from milksnake sightings (Renfrew County - Deacon tract) and monarch butterfly habitat (Bonenberg). 6.2.5 - This indicator was specifically evaluated due to the switch to the RA/SW GLSL standard. (Note this indicator does not apply to SLIMFs). Currently, butternut is the only tree species identified as rare according to EOFG’s SAR list. However, the EOFG has gone a step further by developing a list of 12 rare tree species in their P&P (Appendix S – Tree Species of Concern). Individual harvest plans (Larose, SNC, and SD&G) identify uncommon tree species that will “take preference over crop tree priorities”. Species identified in plans included Butternut, black cherry, white pine etc. SOP 1.5 includes the minimum standards of the protection of forest values, including tree species of concern. The goal is to maintain the population of these rare tree species outlined in Appendix S, with a priority of retaining butternut, hickory, white oak and hemlock. Specific targets in abundance are not specified, but the forest manager and tree markers have a process whereby all Acceptable Growing Stock of tree species that represent less than 10% of the stand shall NOT be harvested (see SOP 1.4). This default direction on all Forest Operations Prescriptions encourage the abundance and regeneration of rare or uncommon tree species in the forest region, and works towards meeting the requirements of 6.2.5. 6.3

6.5

Restoring ecological functions and values is an overall objective for EOFG and several group members (e.g. community forests, landowner groups etc.) and is addressed in management plans and prescriptions, tree marking and strategic tree planting. a) Forest regeneration and succession – the Larose community forest was previously an agreement forest planted with red pine for soil conservation purposes. Management objectives indicate that the red pine plantations will serve as nurse crops for the transition to dominant hardwood stands; b) Genetic, species and ecosystem diversity – EOFG is working with the Forest Gene Conservation Association and preference is given to native and regionally appropriate species. . Areas of focus include the butternut recovery that aims to regenerate butternut with disease tolerant growing stock; and c) Natural cycles that affect productivity of the forest ecosystem are considered at a FMU and stand level (e.g. climate change and increasing prevalence of invasive species). EOFG does not provide overarching ecological function management planning. 6.5.1 - This indicator was specifically evaluated due to the switch to the RA/SW GLSL standard. The EOFG P&P manual includes several written guidelines and procedures regarding measures to reduce forest damage during

SmartWood Prgram FM-06 January 2011

Page 23 of 42

harvesting, including during: * water-crosssing (SOP 2.2); * logging (SOP 3.1, 3.4); * skidding (SOP 3.2) ; and * road construction (SOP 2.3) 6.9

8.1

Procedures are in place. This indicator is met. Larose forest - Native species are preferred and are in the majority of cases used by participating group forest managers. In special cases however, exotic species (Norway spruce, European and Japanese larch, Scots pine, hybrid popular) might be used after consideration of whether it was an appropriate species. None of these species are considered invasive with the exception of Scots pine, and it was explained that this species was outside of its natural regeneration boundary and can be easily controlled. Private forest, Renfrew County â&#x20AC;&#x201C; one landowner had several exotic species that had been planted in the 70â&#x20AC;&#x2122;s but are limited and are easily controlled. Principle 8. MONITORING AND ASSESSMENT The EOFG and its participating group members are varied in their management structure and range in the scale and intensity of forest management. Consistent to all members, whether it is a small landowner or large (>1000ha) forest is stand level inspections (pre, partial and post), inventories and stand level prescriptions.

OBS 01/11

EOFG conducts internal audits but does not manage monitoring activities nor do they track non-harvest related monitoring activities of group members although there was some understanding that some monitoring activity occurred (e.g. carbon sequestration work by MNR on a private landowners property in Almont) including some permanent sample and EMAN (Environmental Monitoring & Assessment Network) plots. The Larose forest oversees other monitoring activities including a Blanding Turtle assessment study. There is limited monitoring of social considerations by group members and none by EOFG on behalf of the group. One community forest maintains a medicinal plant plot (SNC), and Black Ash Monitoring Program as part of an agreement with Ontario Heritage Trust. Another example of the monitoring of social values was a volunteer community group who had conducted a forest use survey (e.g. Summertime forest in Prescott and Russell) and there are studies related to representation and abundance of eastern white cedar and yellow birch for cultural purposes (South Nation); and emerald ash borer (Mohawks). See OBS 01/11. Forest managers have a good antidotal understanding of forest user groups: for example SD&G is primarily hunters; Larose and South Nation are trail users and hunters 8.2

EOFG requires participating members to collect the following information: a) yield of all forest products harvested â&#x20AC;&#x201C; estimated and actual yields are recorded and this information is forwarded to EOFG (Jul 1-Jul 1);

SmartWood Prgram FM-06 January 2011

OBS 01/11

Page 24 of 42

8.3

8.4

8.5

9.4

b) growth rates, regeneration, and condition of the forest – a pre and post-harvest inventory is maintained and prescriptions make note of forest condition and regeneration. There is limited useful data from MNR for permanent sample plots; c) composition and observed changes in the flora and fauna – prescriptions record changes to the forest; d) environmental and social impacts of harvesting and other operations – there is good monitoring of environmental impacts but limited data on social impacts. See OBS 01/11. The EOFG is well connected to community groups and a well-functioning certification working group who provide social feedback; and e) cost, productivity, and efficiency of forest management – data related to costs are recorded by landowners. Larose forest managers intend to conduct a study comparing the estimated volumes and sales revenues against the actual sales and their annual budget provides analysis on the previous year’s efficiency. Y EOFG manages their FM/CoC systems to trace certified products from the origin to the forest gate and has been assessed for a Group CoC certificate. Systems are in place and the necessary documentation has been provided. Y Managers of the various landowner groups and community forests maintain a management plan (20 year). Prescriptions are maintained for individual properties and forests and the results of monitoring would be incorporated in these. For example, a Forest Operations Inspection Report for SNC (Property ID 82 01/31/11) noted that while operations were within standards, rutting and water damage led the inspector recommending a change to prescription by relocating parts of the skid trail to mitigate damage. Y The results of monitoring are made publically available via community members who sit on the board of directors, educational workshops, and most importantly, a comprehensive website. The EOFG has high transparency and an open relationship with the public. Principle 9. MAINTENANCE OF HIGH CONSERVATION VALUE FORESTS A shortlisted list of high conservation features was developed by the certification working group, and this list is provided to all group managers. Currently the monitoring of these values are addressed as part of prescriptions and post-harvest inspections. Prescriptions were reviewed and show references to high conservation values.

SmartWood Prgram FM-06 January 2011

Page 25 of 42

APPENDIX V: Chain-of-Custody Conformance (confidential) Note: This CoC Appendix is used for FMEs only selling standing timber, stumpage, logs and/or chips produced within a FMU covered by the scope of the certificate. FME certificate scopes that include primary or secondary processing facilities shall include an evaluation against the full FSC CoC standard: FSC-STD-40-004 V2. Refer to that separate report Appendix.

Definition of Forest Gate: (check all that apply) Standing Tree/Stump: FME sells standing timber via stumpage sales. The Log Landing: FME sells wood from the landing/yarding area. On-site Concentration Yard: Transfer of ownership occurs at a concentration yard under the control of the FME. Off-site Mill/Log Yard: Transfer of ownership occurs when offloaded at purchaserâ&#x20AC;&#x2122;s facility. Other: explanation Comments: See Closed CAR 02/10.

Scope Definition of CoC Certificate: Does the FME further process material before transfer at forest gate? (If yes then processing must be evaluated to full CoC checklist for CoC standard FSC-STD-40-004 v2.)

Note: This does not apply to on-site production of chips/biomass from wood harvested from the evaluated forest area. Comments: Is the FME a large scale operation (>10,000 hectares) or a Group Certificate? (If yes then CoC procedures for all relevant CoC criteria shall be documented.)

Yes

Comments: Policy 2.0 Processing, Manufacturing and Purchasing Policy Policy 2.1 Wood Purchasing Policy Policy 2.2 Group Chain of Custody Policy Policy 2.3 Outsourcing Policy Policy 2.4 Certified Maple Syrup Policy Policy 2.5 Certified Firewood Policy Policy 2.6 Labeling and Text Approval Policy SOP 7.0 Group Chain of Custody SOP 8.0 Certified Maple Syrup Production SOP 7.0 Group Chain of Custody is out of date and is misleading. The scope of the certificate FM/CoC certificate does not cover the full CoC certification for which EOFG has independently sought Group CoC Certification and has prepared separate Group CoC Procedures. Refer to OBS 02/11. Does non-FSC certified material enter the scope of this certificate prior to the forest gate, resulting in a risk of contamination with wood from the evaluated forest area (e.g. FME Yes No owns/manages both FSC certified and non-FSC certified FMUs)? Comments: No non-certified material is mixed with the FSC Pure logs harvested from group member properties. There are mechanisms and procedures to ensure this including instructions to logging contractors (refer to closed NCR 01/10). Does FME outsource handling or processing of FSC certified material to subcontractors Yes No (i.e. milling or concentration yards) prior to transfer of ownership at the forest gate? (If yes a finding is required for criterion CoC 7 below.)

Comments: There were no instances of this during the audit period. Does FME purchase certified wood from other FSC certificate holders and plan to sell that material as FSC certified? (If yes then a separate CoC certificate is required that includes a full

Yes

evaluation of the operation against FSC-STD-40-004 v2.).

SmartWood Prgram FM-06 January 2011

Page 26 of 42

Comments: Does FME use FSC and/or Rainforest Alliance trademarks for promotion or product labeling? (If FME does not or has no plans to use FSC/RA trademarks delete trademark criteria

Yes

checklist below.)

Comments: The FME uses FSC trademarks on its bills of lading, for on-product labels on maple syrup and for other promotional uses.

Annual Sales Information Total Sales/ Turnover Volume of certified product sold as FSC certified (i.e. FSC claim on sales documentation) (previous calendar year) Value of certified product sold as FSC certified (i.e. FSC claim on sales documentation) (previous calendar year)

US$ 45,000 m3 625,000 US$

Chain-of-Custody Criteria [FM-35 SmartWood Chain-of-Custody Standard for Forest Management Enterprises (FMEs)] 1. Quality Management COC 1.1: FME shall define the personnel/position(s) responsible for implementing the CoC Yes No control system. Findings: Scott Davis is responsible for the management of the FME, including implementation of the CoC system. Individuals responsible for additional tasks for the certificate or for group members are listed in the organization's contact list and organizational chart. COC 1.2: All relevant staff shall demonstrate awareness of the FMEâ&#x20AC;&#x2122;s procedures and Yes No competence in implementing the FMEâ&#x20AC;&#x2122;s CoC control system. Findings: The CoC Coordinator and group members involved in the sale of logs had a good understanding of systems and procedures. CoC 1.3: FME procedures/work instructions shall provide effective control of FSC certified forest products from standing timber until ownership is transferred at the forest gate. Note: For large scale operations (>10,000ha) and Group Managers, CoC procedures covering all relevant CoC criteria shall be documented. Including: a) Procedures for physical segregation and identification of FSC certified from non-FSC certified material. (If applicable) b) Procedures to ensure that non-FSC certified material is not represented as FSC certified on sales and shipping documentation. (If applicable) Yes No c) Procedures to include FME FSC certificate registration code and FSC claim (FSC Pure) on all sales and shipping documentation for sales of FSC certified products. d) Recordkeeping procedures to ensure that all applicable records related to the production and sales of FSC certified products (e.g. harvest summaries, sales summaries, invoices, bills of lading) are maintained for a minimum of 5 years. e) Procedures to ensure compliance with all applicable FSC/Rainforest Alliance/SmartWood trademark use requirements. Findings: a) N/A for wood. SOP (EXH 1) 2.4 & 8.0 identify that FSC certified maple sap/syrup must be segregated from non-FSC maple sap/syrup. The group manager indicated that this is standard procedure for maple syrup operations to meet legal requirements. This was verified on-site during a visit to a maple syrup operation. b) N/A for wood. FSC Maple syrup sold separately from non-certified maple syrup. Labels are not applied to non-certified maple syrup. c) SOP 3.5 specifies that EOFG (FME) bills of lading must be used for all truck loads of wood hauled from group member FMUs. FME bills of lading include the FME certificate code and claim - FSC Pure. FME sells standing timber to logging contractors. EOFG s developed a list of contractors who are included in SmartWood Prgram FM-06 January 2011

Page 27 of 42

the scope of the certificate. Refer to closed CAR 02/10. Volumes of syrup sold is well documented. Sales of FSC-certified maple syrup are to the end-user (consumer) only. As such, formal sales invoices are not issued, but instead, cash payment receipts are issued. In this case, since the landowner is selling to the consumer who will not be passing on the FSC claim, the FM/CoC code and the FSC claim is not required on the receipts. However, there is no process in place requiring the FSC claim (FSC Pure) and the FM/CoC code on sales invoices when product is being sold to a non-end user (ie. a store). See NCR 03/11. d) References to maintaining records on file for five years, including reference to specific records, are found throughout the SOP. e) SOP 2.6 addresses trademark use requirements, including requirements to obtain approval from SmartWood and to maintain approvals on-file. SOP 7.0 Group Chain of Custody is out of date and is misleading. The scope of the certificate FSM/CoC certificate does not cover CoC certification and EOFG has independently sought Group CoC Certification and has prepared separate Group CoC Procedures. Dates of revisions to procedures are not included making it impossible to track Manual version. Refer to OBS 02/11.

2. Certified Material Handling and Segregation COC 2.1: FME shall have a CoC control system in place to prevent the mixing of non-FSC certified materials with FSC certified forest products from the evaluated forest area, including: a) Physical segregation and identification of FSC certified from non-FSC certified Yes No material. N/A b) A system to ensure that non-FSC certified material is not represented as FSC certified on sales and shipping documentation. Note: If no outside wood is handled by FME within scope of certificate, mark as N/A. Findings: a) N/A – logs: certified material is FSC pure and does not require segregation. EOFG provides instructions via a new procedure to logging contractors not covered under their certificate to not mix FSC Pure logs with non-certified material. FSC certified maple syrup is segregated SOP (EXH B) 2.4 & 8.0, CoC 2.2: FME shall identify the sales system(s) or “Forest Gate”, for each FSC certified product covered by the Chain of Custody system: i.e. standing stock; sale from log yard in Yes No the forest; sale at the buyer’s gate; sale from a log concentration yard, etc. Findings: The forest gate is standing timber for logs. In some instances the log landing is covered under the certificate scope. Forest gate is clearly idenfied in the Stumapge Sale Contract with contractor. CoC 2.3: FME shall have a system that ensures that FME products are reliably identified Yes No as FSC certified (e.g. through documentation or marking system) at the forest gate. Findings: Logging contractors use pre-printed and numbered bill of ladings that identify the certified product as FSC Pure and EOFG’s certificate number - SW-FM/COC-000232. CoC 2.4: FME shall ensure that certified material is not mixed with non-FSC certified Yes No material at any stage, up to and including the sale of the material. N/A Note: If no outside wood is handled by FME within scope of certificate, mark as N/A. Findings: See COC 2.1 3. Certified Sales and Recordkeeping COC 3.1: For material sold with FSC claim the FME shall include the following information on sales and shipping documentation: a) FME FSC certificate registration code, and b) FSC certified claim: FSC Pure

Yes

Findings: The EOFG bills of lading are used when FSC material is harvested, and include the FM/CoC code SmartWood Prgram FM-06 January 2011

Page 28 of 42

and the FSC claim - FSC Pure. CoC 3.2: FME shall maintain certification production and sales related documents (e.g. harvest summaries, invoices, bills of lading) for a minimum of 5 years. Documents shall be Yes No kept in a central location and/or are easily available for inspection during audits. Findings: The Group Manager receives volumes of wood harvested and maple syrup sold annually. This is compiled on a July-July basis. CoC 3.3: FME shall compile an annual report on FSC certified sales for SmartWood containing monthly sales in terms of volume of each FSC certified product sold to each Yes No customer. Findings: The EOFG's period of annual harvest reporting is July 1st to July 1st. This is due to the fact that winter harvest records for community forests generally take a couple months to be processed. All Forest Managers are responsible for entering their harvest volume into the Data Management Tool for the period of July 1st 2010 until July 1st 2011, once the Data Management Tool is up and running. This will make future volume summaries easily available to the Group Manager, the Forest Managers and to SmartWood. 4. Outsourcing CoC 4.1: FME control system shall ensure that CoC procedures are followed at subcontracted facilities for outsourcing and FME shall collect signed outsourcing agreements covering all applicable FSC outsourcing requirements per FSC--40-004 v-2.0 FSC Standard for Chain of Custody November 2007. Yes No Note 1: If FME outsources processing or handling of FSC certified material the N/A outsourcing report appendix is required. Note 2: Check N/A If FME does not outsource processing or handling of FSC material. Findings: The group is no longer outsourcing. The contract for outsourcing during the last annual audit has since expired. Therefore, this requirement is N/A.

5. FSC/Rainforest Alliance Trademark (TMK) Use Criteria Standard Requirement: The following section summarizes the FME’s compliance with FSC and Rainforest Alliance trademark requirements. Trademarks include the Forest Stewardship Council and Rainforest Alliance/SmartWood names, acronyms (FSC), logos, labels, and seals. This checklist is directly based on the FSC labeling standard (FSC-STD-40-201 FSC on-product labeling requirements (version 2.0) and FSC-TMK-50-201 V1-0 FSC Requirements for the Promotional Use of the FSC Trademarks by FSC Certificate Holders. References to the specific FSC document and requirement numbers are included in parenthesis at the end of each requirement. (Rainforest Alliance Certified Seal = RAC seal). General COC 5.1: FME shall have procedures in place that ensure all on-product and off product Yes No FSC/Rainforest Alliance trademark use follows the applicable policies: Findings: SOP 2.6 addresses trademark requirements. COC 5.2: FME shall have procedures in place and demonstrate submission of all FSC/Rainforest Alliance/SmartWood claims to SmartWood for review and approval prior to use, including” a) On-product use of the FSC label/RAC seal; Yes No b) Promotional (off-product) claims that include the FSC trademarks (“Forest Stewardship Council”, “FSC”, checkmark tree logo) and/or the Rainforest Alliance/SmartWood trademarks (names and seal)(50-201,2.3). Findings: EOFG obtained trademark use approval from SmartWood for a promotional brochure and signage and described that approvals are sought for all trademark use. On-product stickers for maple syrup that have the FSC trademark were produced in the previous year and approvals had been received. COC 5.3: FME shall have procedures in place and demonstrates that all trademark review and approval correspondence with SmartWood is kept on file for a minimum of 5 years (40Yes No 201, 1.10; 50-201, 2.4): Findings: See CoC 5.2 SmartWood Prgram FM-06 January 2011

Page 29 of 42

Off-product / Promotional Check if section not applicable (FME does not, and does not plan to use the FSC trademarks offproduct or in promotional pieces) Note: promotional use items include advertisements, brochures, web pages, catalogues, press releases, tradeshow booths, stationary templates, corporate promotional items (e.g., t-shirts, cups, hats, gifts). When applicable to the FME’s promotional/off-product use of the trademarks, the criteria Yes No below shall be met: Findings: A promotional brochure and signage using the FSC trademark was produced. Approval from SmartWood was sought by the FME. Requirements as listed below were met. 5.4 – Promotion is appropriately limited to group members. 5.5 - RAC Seal is on the signage and is appropriate. 5.6 - N/A 5.7 - Promotion is done appropriately and within the scope of the certificate. 5.8 – N/A 5.9 – N/A COC 5.4: If the FSC trademarks are used for promotion of FMUs, FME shall limit promotion to FMUs covered by the scope of the certificate. COC 5.5: In cases that the Rainforest Alliance trademarks are used (50-201, 13.1, 13.2): a) The FSC trademarks shall not be at a disadvantage (e.g., smaller size); b) The FSC checkmark tree logo shall be included when the RAC seal is in place. COC 5.6: In cases that the FSC trademarks are used with the trademarks (logos, names, identifying marks) of other forestry verification schemes (SFI, PEFC, etc.), SmartWood approval shall be in place (50-201, 3.0). COC 5.7: Use of the FSC trademarks in promotion of the FME’s FSC certification shall not imply certain aspects are included which are outside the scope of the certificate (50-201, 1.6). COC 5.8: Use of the FSC trademarks on stationery templates (including letterhead, business cards, envelopes, invoices, paper pads) shall be approved by SmartWood to ensure correct usage (50-201, 12.0). COC 5.9: In cases that the FSC trademarks are used as part of a product name, domain name, and/or FME name, SmartWood approval shall be in place (50-201, 9.0, 10.0). On-product Check if section not applicable (FME does not, and does not plan to apply FSC labels on product) COC 5.10: FME shall have a secure system in place for labeling products that ensures the following (40-201, 1.2): a) Only those products originating from forests covered by the scope of a valid FSC certificate are FSC-labeled; b) Only those products that meet the eligibility requirements per CoC standard requirements for FSC-labeling are FSC-labeled; c) Only the FSC Pure label is used. Findings: No new on-product trademarks were created during the audit period. When applicable to the FME’s on-product labeling, the criteria below shall be met:

Yes

Findings: No new on-product trademarks were created during the audit period. COC 5.11: FME shall not use the FSC labels together with the logos or names of other forestry verification schemes (40-201, 1.11, 1.13). COC 5.12: FME shall not use the FSC labels together with claims referring to the sustainability of the forest from which the wood is sourced (40-201, 1.11, 1.13). COC 5.13: The FSC label shall be applied to products in such a way that it is clearly visible (40-201, 1.14).

SmartWood Prgram FM-06 January 2011

Page 30 of 42

APPENDIX VI: SmartWood Database Update Form Instructions: For each FSC certificate, SmartWood is required to upload important summary information about each certificate to the FSC database (FSC-Info). During each annual audit SW auditors should work with the certificate holder to verify that the information posted on FSCInfo is up to date as follows: 1. Print out current Fact Sheet prior to audit from FSC-Info website or direct link to fact sheets (http://www.fsc-info.org) 2. Review information with the FME to verify all fields are accurate. 3. If changes are required (corrections, additions or deletions), note only the changes to the database information in the section below. 4. The changes identified to this form will be used by the SW office to update the FSC database. Is the FSC database accurate and up-to-date? YES (if yes, leave section below blank)

Client Information (contact info for FSC website listings) Organization name Primary Contact

Eastern Ontario Forest Group Scott Davis

Primary Address

P.O Box 2111, 10 Campus Drive Kemptville, ON

Address Email

Telephone

Certification Coordinator (613) 258-8422

Fax Webpage

(613) 258-8363 www.eomf.on.ca

Title

sdavis@eomf.on.ca

Forests Change to Group Certificate Total certified area

Yes

Change in # of parcels in group 44775 Hectares (or)

18 total members Acres

Species (note if item to be added or deleted) Scientific name Common name

Add/Delete

Products Product type

Add/Delete

SmartWood Prgram FM-06 January 2011

Description

Page 31 of 42

APPENDIX VII: Group management conformance checklist FSC-STD30-005 v1-0 (confidential) Group Certification Division of Responsibilities Type of Forest Management Group:

Type I group

Forest Management Activity Forest management planning FMU monitoring activities Forest and resource inventory Harvest planning Harvesting Training of forest workers Legal compliance (taxes, permitting, etc) Timber Sales Marketing FSC/RA trademark use (if applicable) Summary of division of responsibilities:

Group Entity

Group Member

Quality System Requirements 1.0 General Requirements 1.1 The Group entity shall be an independent legal entity or an individual acting as a legal entity. Findings required if No:

Yes

1.2 The Group entity shall comply with relevant legal obligations, as registration and payment of applicable fees and taxes.

Yes

Findings required if No: 1.3 The Group entity shall have a written public policy of commitment to the FSC Principles and Criteria.

Findings required if No: There was no evidence provided of a written public policy of the EOFG's commitment to the FSC P's & C's. See NCR 01/11. 1.4 The Group entity shall define training needs and implement training activities and/or communication strategies relevant to the implementation of the applicable FSC standards.

Yes

Findings: The training policy for Forest Certification Program staff is outlined in the P&P Manual - Policy 4.0. 2.0 Responsibilities 2.1 The Group entity shall clearly define and document the division of responsibilities between the Group entity and the Group members in relation to forest management activities (for example with respect to management planning, monitoring, harvesting, quality control, marketing, timber sale, etc). Yes

NOTE: The actual division of responsibilities may differ greatly between different group certification schemes. Responsibilities regarding compliance to the applicable Forest Stewardship Standard may be divided between the Group entity and Group members in order to take into account of a landscape approach. Findings: The organization has developed a organization chart which outlines the division of responsibilites across the group, specifically the Forest Managers (Project Coordinators) for each sub group. Within the P&P manual, Policy 1.0 - EOFG Forest Certification Program Structure details the specific roles and responsibilities of the Resource Manager, Forest Manager, Landowner, Landowner Group and Community Forest Manager. SmartWood Prgram FM-06 January 2011

Page 32 of 42

2.2 The Group entity shall appoint a management representative as having overall responsibility and authority for the Group entity‘s compliance with all applicable requirements of this standard.

Yes

Findings: Scott Davis has been appointed as the FM Group Manager, responsible for overseeing the EOFG group certificate. 2.3 Group entity staff and Group members shall demonstrate knowledge of the Group‘s procedures and the applicable Forest Stewardship Standard.

Yes

Findings: The EOFG has been certified for 2003 - group staff and managers are well aware of the FSC standards and procedures. 3.0 Group Entity Procedures 3.1 The Group entity shall establish, implement and maintain written procedures for Group membership covering all applicable requirements of this standard, according to scale and complexity of the group including: I. II.

Organizational structure; Responsibilities of the Group entity and the Group members including main activities to fulfill such responsibilities (i.e. Development of management plans, sales and marketing of FSC products, harvesting, planting, monitoring, etc); Yes No III. Rules regarding eligibility for membership to the Group; IV. Rules regarding withdrawal/ suspension of members from the Group; V. Clear description of the process to fulfill any corrective action requests issued internally and by the certification body including timelines and implications if any of the corrective actions are not complied with; VI. Documented procedures for the inclusion of new Group members; VII. Complaints procedure for Group members. Findings: I. The EOFG has provided an updated organizational chart outlining the structure of the group. II. The EOFG's Policy & Procedure (P&P) - Policy 1.0 details the program structure, and the corresponding roles and responsibilities of the group entity (Resource Manager), Forest Managers and the group members. III., IV., VI. Policy 1.4 outlines the rules for entering and exiting the Group. V. Policy 3.1 outlines the Group's Corrective Action Request policy. Group audit and monitoring schedules are outlined in SOP 5.1. VII. Policy 3.2 outlines the Group's Dispute Resolution policy. 3.2 The Group entity‘s procedures shall be sufficient to establish an efficient internal control system ensuring that all members are fulfilling applicable requirements.

Yes

Findings: The Group procedures cover the aspects required for group management. To date, these procedures have been effective. 3.3 The Group entity shall define the personnel responsible for each procedure together with the qualifications or training measures required for its implementation.

Yes

Findings: Procedures distinguish who is responsible for policies and SOPs (ie. Resource Manager, Forest Manager, landowner etc). 3.4 The Group entity or the certification body (upon request of Group entity and at the Group entities expense) shall evaluate every applicant for membership of the Group and ensure that there are no major nonconformities with applicable requirements of the Forest Stewardship Standard, and with any additional requirements for membership of the Group, Yes No prior to being granted membership of the Group. NOTE: for applicants complying with SLIMF eligibility criteria for size, the initial evaluation may be done through a desk audit. Findings: Each new member is evaluated by the respective Forest Manager prior to being included in the group. This includes a pre-inspection site visit to determine whether the member's property will meet the requirements of the FSC standard. The forest management plan for the property is also required to meet the FSC standard prior to inclusion in the group. See P&P policy 1.4 and MOU. SmartWood Prgram FM-06 January 2011

Page 33 of 42

4.0 Group Member Informed Consent 4.1 The Group entity shall provide each Group member with documentation, or access to documentation, specifying the relevant terms and conditions of Group membership. The documentation shall include: I. II. III. IV. V.

Access to a copy of the applicable Forest Stewardship Standard; Explanation of the certification bodyâ&#x20AC;&#x2122;s process; Explanation of the certification body's, and FSC's rights to access the Group members' forests and documentation for the purposes of evaluation and monitoring; Explanation of the certification body's, and FSC's requirements with respect to publication of information; Explanation of any obligations with respect to Group membership, such as: a. maintenance of information for monitoring purposes; b. use of systems for tracking and tracing of forest products; c. requirement to conform with conditions or corrective action requests issued by the certification body and the group entity d. any special requirements for Group members related to marketing or sales of products within and outside of the certificate; e. other obligations of Group membership; and f. explanation of any costs associated with Group membership.

Yes

Findings: The MOU that is signed by group members includes specification regarding: I. Reference to being provided a copy of the FSC GLSL standard; II. An overview of the certification process; III. Agreement that the property can be accessed for audit and compliance purposes; IV. The MOUs do not clearly outline what infomration is required to be made publicly available to SW or FSC. See NCR 01/11; V. a. Maintenance of records of member's properties for the purpose of meeting the FSC requirements; b. Maintenance of timber sale details; c. Requirement to take prompt action to rectify non-conformances; d. Details requiring the use of the 'Certified Forest" signs, however, there is no mention of FSC promotional trademark use restrictions or requirements. (NCR 01/11). Maple syrup MOUs include provisions for labelling products with the FM/CoC code; e. Other details of group membership; f. The costs of the annual membership fee and for the use of te 'Certified Forest' signs. 4.2 A consent declaration or equivalent shall be available between the Group Entity and each Group member or the memberâ&#x20AC;&#x2122;s representative who voluntarily wishes to participate in the Group. The consent declaration shall: I. II. III. IV. V.

include a commitment to comply with all applicable certification requirements; acknowledge and agree to the obligations and responsibilities of the Group entity; acknowledge and agree to the obligations and responsibilities of Group membership; agree to membership of the scheme, and authorize the Group entity to be the primary contact for certification and to apply for certification on the member's behalf.

Yes

NOTE: A consent declaration does not have to be an individual document. It can be part of a contract or any other document (e.g. meeting minutes) that specifies the agreed relationship between the Group member and the Group entity. Findings: The MOU that is signed by group members includes details regarding: I. the requirement to be in conformance with the certification standard; II. the role and responsibilities of the EOFG III. the role and responsibilities of the group member IV. the details of membership SmartWood Prgram FM-06 January 2011

Page 34 of 42

V. Manage the FSC certificate, designate a contact person for the landowner. 5.0 Group Records 5.1 The group entity shall maintain complete and up-to-date records covering all applicable requirements of this standard. These shall include: I. II. III. IV. V. VI.

VII.

List of names and contact details of Group members, together with dates of entering and leaving the Group scheme, reason for leaving, and the type of forest ownership per member; Any records of training provided to staff or Group members, relevant to the implementation of this standard or the applicable Forest Stewardship Standard; A map or supporting documentation describing or showing the location of the memberâ&#x20AC;&#x2122;s forest properties; Evidence of consent of all Group members; Documentation and records regarding recommended practices for forest management (i.e. silvicultural systems); Records demonstrating the implementation of any internal control or monitoring systems. Such records shall include records of internal inspections, noncompliances identified in such inspections, actions taken to correct any such noncompliance; Records of the estimated annual overall FSC production and annual FSC sales of the Group.

Yes

NOTE: The amount of data that is maintained centrally by the Group entity may vary from case to case. In order to reduce costs of evaluation by the certification body, and subsequent monitoring by FSC, data should be stored centrally wherever possible. Findings: The EOFG during tracks their group members via an excel database. Due to the growth and size of the EOFG FSC group, this method of tracking is no longer sufficient to effectively track the status of their group members. At the time of the audit, the EOFG are in the process of developing an EOFG Certification Data Management tool which will provide an easily accessible and secure site covering the entire scope of services offered by the EOFG. All group members will have propriertary access to this site and will be able to update their profiles as required. This will take some of the onus of tracking and reporting off of EOFG staff. However, at the time of the audit, the following requirements were covered: I. Spreadsheet with the list of all group members with enter and exit dates; II. Training is conducted, but a record of such is not explicitly maintained. See NCR 01/11; III. Each group member's FMP include details regarding the property included in the group, and include maps and descriptions of the property; IV. MOUs for all members are on file; V. FMPs and silvicultural prescriptions are on file for each landowner/property; VI. Internal monitoring and/or audits are not currently documented. See NCR 02/11; VII. FSC timber sales are calculated on an annual basis (July-July). The Group Manager obtains this information from all group members. 5.2 Group records shall be retained for at least five (5) years.

Yes

Findings: All records are maintained by the EOFG for at least 5 years. 5.3 Group entities shall not issue any kind of certificates or declarations to their group members that could be confused with FSC certificates. NOTE: Group member certificates may however be requested from SmartWood. Findings: The EOFG makes available 'Certified Forest' signs for landowners to post on their properties. These signs have been approved by SmartWood.

Group Features SmartWood Prgram FM-06 January 2011

Page 35 of 42

6.0 Group Size 6.1 The Group entity shall have sufficient human and technical resources to manage and control the Group in line with the requirements of this standard. NOTE: The number of Group members, their individual size and the total area will influence the evaluation intensity applied by the certification body in their annual audits.

Yes

Findings: With the development of the new Certification Data Management tool, the Group will have sufficient resources to track and maintain information about the expanding group. Currently, the technical resources are at the maximum for a group of this size and scope. 6.2 The Group entity shall specify in their procedures the maximum number of members that can be supported by the management system and the human and technical capacities of the Group entity.

Yes

Findings: EOFG does not have procedures for this requirement. See NCR 01/11. 7.0 Multinational Groups 7.1 Group schemes shall only be applied to national groups which are covered by the same Forest Stewardship Standard.

Findings required if No: All members are Canadian and covered under the GLSL standard. 7.2 The Group entity shall request formal approval by FSC IC through their accredited Certification Body to allow certification of such a group scheme.

Yes

No NA

Findings required if No:

Internal Monitoring 8.0 Monitoring Requirements 8.1 The Group entity shall implement a documented monitoring and control system that includes at least the following: I. II.

Written description of the monitoring and control system; Regular (at least annual) monitoring visits to a sample of Group members to confirm continued compliance with all the requirements of the applicable Forest Stewardship Standard, and with any additional requirements for membership of the Group.

Yes

Findings: The EOFG P&P includes procedures for monitoring group members with active harvesting on an annual basis (SOP 5.1). However, there is no policy or procedure that samples other types of group members to ensure continued compliance (ie. on non-active sites). See NCR 02/11. 8.2 The Group entity shall define criteria to be monitored at each internal audit and according to the group characteristics, risk factors and local circumstances.

Yes

Findings: SOP Table 1 details the minimum schedule of auditing and monitoring. However, the specific criteria that the Group Manager evaluates during internal audits are not defined. Records of internal auditing are not documented. See NCR 02/11. 8.3. The minimum sample to be visited annually for internal monitoring shall be determined as follows: a) Type I Groups with mixed responsibilities (see FSC-STD-30-005 v-1 section D Terms and definitions) Groups or sub-groups with mixed responsibilities shall apply a minimum sampling of X = √y for ‘normal’ FMUs and X= 0.6 * √y for FMUs < 1,000 ha. Sampling shall be increased if HCVs are threatened or land tenure or use right disputes are pending within the group. b) Type II Resource Manager Groups (see FSC-STD-30-005 v-1 section D Terms and definitions) SmartWood Prgram FM-06 January 2011

Yes

Page 36 of 42

Group entities who also operate as resource managers may define the required internal sampling intensity at their own discretion for the forest properties they are managing, independent of their size and ownership (the minimum numbers as defined above do not apply here). NOTE: for the purpose of sampling, FMUs < 1,000 ha and managed by the same managerial body may be combined into a ‘resource management unit’ (RMU) according to the proposal made in FSC-STD-20-007 Annex 1. Findings: The EOFG conducts internal audits of all active operations. However, minimum sampling requirements for internal audits and monitoring have not been specified according to the sampling formula above for a Type I Group. See NCR 02/11. FSC-STD-30-005 recommendations for internal monitoring. 8.4 For monitoring purposes the Group entity should use the same stratification into sets of ‘like’ FMUs as defined by the certification body in their evaluation. 8.5 The Group entity should visit different members in their annual monitoring than the ones selected for evaluation by the certification body, unless pending corrective actions, complaints or risk factors are requiring a revisit of the same units. 8.6 In the selection process of members to be visited, the Group entity should include random selection techniques. Comments: EOFG does not use the above sampling strategy. 8.7 The Group entity shall issue corrective action requests to address non-compliances identified during their visits and monitor their implementation.

Yes

Findings: Internal audits are operational-based and comprehensive. The Group Manager goes through the steps of the planning, operations and the post-harvest inspection reports. There were no Corrective Actions identified during internal audits over the audit period. 8.8 Additional monitoring visits shall be scheduled when potential problems arise or the Group entity receives information from stakeholders about alleged violations of the FSC requirements by Group members.

Yes

No NA

Findings: No problems have been identified over the audit period. Group Assessment Requirements: (Completed by SW Task Manager/Lead Auditor) The development of the Certification Data Management tool will Group member size restriction: allow for an increase in the size of the group. Until that time, for technical resouce reasons, the group is basically at capacity. Follow auditing strategy outlined in FM-01 and FSC-STD-20-007. SW Certificate auditing strategy:

SmartWood Prgram FM-06 January 2011

Page 37 of 42

APPENDIX VII-a: Certified Pool Participation List (Insert additional rows as necessary for groups with more than 15 members).

1. Total # members in the certified pool: 114 2. Total area in Current Pool (ha. or acres): 44,775 ha GROUP ORGANIZATION CHART

CERTIFIED POOL MEMBERSHIP TABLE See separate excel files for list/information on group members.

SmartWood Prgram FM-06 January 2011

Page 39 of 42

APPENDIX VIII: Non-Timber Forest Products Certification Evaluation (confidential) Non-Timber Forest Products Addendum for the Certification of Maple Sugaring Operations in Canada - March 2007 version CRITERIA AND INDICATORS Yes PRINCIPLE #2: TENURE AND USE RIGHTS AND RESPONSIBILITIES Criterion 2.3 Appropriate mechanisms shall be employed to resolve disputes over tenure claims and use rights. The circumstances and status of any outstanding disputes will be explicitly considered in the certification evaluation. Disputes of substantial magnitude involving a significant number of interests will normally disqualify an operation from being certified. Indicator 2.3.MAPLE Any conflicting claims over traditional access to sugaring stands is being addressed in a systematic and effective manner. PRINCIPLE #3: INDIGENOUS PEOPLES' RIGHTS

COMMENTS AND/OR DESCRIPTION OF MAJOR GAPS

X Currently no conflicting claims over traditional access.

Criterion 3.3 Sites of special cultural, ecological, economic or religious significance to indigenous peoples shall be clearly identified in cooperation with such peoples, and recognized and protected by forest managers. Indicator 3.3.MAPLE Sites, as well as plants and animal resources of cultural and religious significance shall be identified and protected during sugaring activities. PRINCIPLE #8: MONITORING AND ASSESSMENT

No cultural/religious sites identified on maple syrup operations.

Criterion 8.1 The frequency and intensity of monitoring should be determined by the scale and intensity of forest management operations as well as the relative complexity and fragility of the affected environment. Monitoring procedures should be consistent and replicable over time to allow comparison of results and assessment of change.

SmartWood Prgram FM-06 January 2011

Page 40 of 42

Indicator 8.1.MAPLE Sugarbush monitoring shall be incorporated into the overall monitoring plan for the forest management operation and provide data on forest changes upon which management prescriptions can be updated.

Interviews with Ray & Carol Anne Bonenberg and the site visit to the Bonenberg sugarbush demonstrated that the landowners are very active in monitoring the state of the sugarbush with respect to forest health, disease, invasive species, and other forest changes over time. In the site FMP, short-term objectives include continual monitoring of the area for the above factors (over next 10 years). FMPs are updated every 10 years.

Criterion 8.2 Forest management should include the research and data collection needed to monitor, at a minimum, the following indicators: a) Yield of all forest products harvested. b) Growth rates, regeneration and condition of the forest. c) Composition and observed changes in the flora and fauna. d) Environmental and social impacts of harvesting and other operations. e) Costs, productivity, and efficiency of forest management. Indicator 8.2.MAPLE The sugarbush monitoring plan is technically sound and identifies/describes monitoring of the following: * changes in the maple component of forest composition (size class and distribution) maple growth rates and regeneration; * changes in maple health (decline, die-back or poor tap hole closure rates); * presence of pests; and, * harvesting levels including the number of taps used, volume of sap collected and volume and grades of syrup produced. Criterion 8.3 Documentation shall be provided by the forest manager to enable monitoring and certifying organizations to trace each forest product from its origin, a process known as the "chain of custody." Indicator 8.3.MAPLE1 The volume and source of sap collected and the volume and grades of syrup produced shall be recorded for future tracing. Indicator 8.3.MAPLE2 Invoices of syrup or sap sales are documented, include required information (certification code, FSC product group) and are stored for inspection.

SmartWood Prgram FM-06 January 2011

Due to the size and scope of the forest operation, the monitoring plan is informal, but comprehensive. The landowners are constantly present in the forest and monitoring the condition of the forest. X

The volume, grade and batch of syrup produced is well recorded. This is a requirement of the Canadian Food Inspection Agency. Volumes of syrup sold are well documented. Sales of FSC-certified maple syrup are to the end-user (consumer) only. As such, formal sales invoices are not issued, but instead, cash payment receipts are

Page 41 of 42

issued. In this case, since the landowner is selling to the consumer who will not be passing on the FSC claim, the FM/CoC code and the FSC claim is not required on the receipts.

Indicator 8.3.MAPLE3 For operations with multiple (certified and non-certified) sources of sap, production and labelling of product will follow FSC requirements for mixed products. X

Indicator 8.3.MAPLE4 100% FSC Certified syrup and sap is kept separate from non-certified product and clearly distinguished through marks, labels or other means.

SmartWood Prgram FM-06 January 2011

However, there are other group members not evaluated during this audit that sell to a non-end user, and there is no process in place requiring the FSC claim (FSC Pure) and the FM/CoC code on sales invoices when product is being sold to a non-end user (ie. a store). See NCR 03/11. Currently, there is only one source of non-FSC sap entering the production facility. This source is run as a separate batch and not sold as FSC. The landowners demonstrated how this is possible. However, this situation will be changing soon â&#x20AC;&#x201C; the landowner will be dropping the non-FSC supplier and will likely be using an FSC-certified forest to replace the non-FSC supply. This agreement is currently in the works. Overall, there is no mixing of non-FSC syrup with FSC syrup. All non-FSC syrup is sold separately. FSC syrup is processed separately from non-FSC syrup. FSC Pure labels are applied to the FSCcertified syrup only.

Page 42 of 42