The Rainforest Alliance has issued a Verification of Legal Origin (VLO) statement to PT ScanCom Indonesia, a manufacturer of teak garden furniture, confirming that the company is sourcing teak wood from a specific group of suppliers that have a documented legal right to harvest. The verification, which covers 34 entities in the company’s supply chain, comprises the largest number of sites and is the most complex of any legality verification that has been carried out to date by the Rainforest Alliance’s SmartWood program.
Located in Semarang, Central Java, PT ScanCom Indonesia exclusively produces teak garden furniture for its parent company, ScanCom International A/S–one of the world’s largest manufacturers and wholesalers of outdoor furniture. Headquartered in Korsor, Denmark, ScanCom International has branches around the globe, including in Hong Kong, Vietnam, Brazil, the US, Germany and the UK, and its major business partners include leaders in the furniture industry.
Since 1999, PT ScanCom Indonesia has been working in cooperation with the local wood industry of Jepara, in Central Java, where most of its suppliers are located. The decision by ScanCom’s regional branch to apply for VLO status reflects the parent company’s commitment to environmentally friendly wood-sourcing practices. Though the Indonesia verification was the first of its kind for the furniture company, six of ScanCom International’s subsidiaries have already received Forest Stewardship Council (FSC) Chain-of-Custody (CoC) certification from the Rainforest Alliance’s SmartWood program, including ScanCom’s operations in Vietnam–among the first to do so in that country, where FSC CoC certification has since become the industry standard.
PT ScanCom Indonesia’s verification highlights the company’s longstanding commitment to the country where it operates. “When most of the industry shifted away from Indonesia in the late 1990s,” says Rene De Kok, ScanCom International’s commercial director, “we continued to build our presence there, investing in Indonesia’s future. We are very proud to be recognized by the Rainforest Alliance for our achievements.” And ScanCom’s verification is also a milestone for Indonesia’s wood industry. “As the demand for legally sourced wood increases, driven by ScanCom and others,” says Christian Sloth, the Rainforest Alliance’s verification services manager, “more and more wood suppliers will have to consider verification.”
The VLO assessment took place in mid-March 2010 and was carried out by two Indonesian auditors, whose local expertise proved extremely helpful for an assessment of such complexity. Suppliers of VLO timber must follow and maintain documented Chain-of-Custody systems, and the ScanCom verification included 34 processing sites and one forest management entity, run by the Indonesian state-owned company Perum Perhutani. Currently, there are very few sources of verified or FSC-certified teak in Indonesia. Despite the fact that Perum Perhutani manages close to 3 million acres (1.2 million hectares) of teak plantations in Indonesia, only one other state-owned entity (covering 79,000 acres, or 32,000 hectares) has been verified by the Rainforest Alliance.
ScanCom has been working since 2008 to improve its sourcing systems and prepare for the verification, investing considerable time, resources and money in the process. However, the company believes that verification is a necessity and that its benefits outweigh the costs. “The demand for legal and sustainably verified products is increasing rapidly, and we have to be sensitive to what the market wants. If we are not proactive in responding to these types of changes, we will lose our competitiveness,” says Charlotte Korn, PT ScanCom Indonesia’s managing director.
As a benefit of receiving VLO status, PT ScanCom Indonesia may use the Rainforest Alliance Verified™ mark on its off-product marketing and public-information materials, such as Web sites, brochures and advertisements. But ScanCom’s achievement is much greater than a single verification statement. “A company the size of ScanCom has considerable influence on local suppliers, and its practices can help set the norm,” says Sloth. “ScanCom’s decision to achieve legality verification proves that there is an international demand for verified products.”
The Rainforest Alliance considers legality verification a first step towards FSC certification; verification should not be a final destination–a milestone on the path towards even more sustainably managed forest resources. ScanCom, which has been active in FSC certification for a number of years, remains committed to both verification and certification. “We have invested in improving our supply chains and moving our wood sourcing towards more legal and, where possible, sustainable sources of wood. We intend to continue this work in the future, making further investments towards these goals in the near and long term,” says De Kok. “Doing the right thing is not only something to be proud of but it’s also good business, as more and more retailers around the world are demanding social and environmental accountability.”
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