There are two ways in which we investigate the occurrence of potential fraud and false claims in its certified supply chains – transaction verification loops (TV loops) and other supply chain integrity (SCI) investigations.
Based on the analysis of information received from various sources, including ASI, certification bodies, FSC network partners and other stakeholders, FSC develops an annual plan for TV loops and other SCI investigations to be carried out with ASI and other partners.
Transaction verification loops (TV loops)
A TV loop begins with a public announcement that FSC and ASI make to launch it. ASI also organizes briefing sessions with certification bodies to share critical information about the scope, region, and rationale for a TV loop.
In a transaction verification loop, certification bodies request certificate holders belonging to a certain product type or region to submit their sales and purchase transactions for a certain time-period. ASI receives this information from the certification bodies and analyzes the data to identify volume mismatches and potential false claims. Based on these findings, ASI initiates the next stage of the transaction verification loop (second phase), which includes investigations into supply chain clusters showing high levels of potential violations.
Results of the second phase are assessed in a holistic manner to identify certificate holders making false claims as well as highlight weaknesses in system controls. The conclusion of the TV loop includes confirmed identification of non-conforming CHs. At this stage, ASI reports the results of the TV loop and provides recommendations to FSC. Based on ASI’s recommendation, these CHs are either suspended or terminated by their CBs. They may also be blocked by FSC.
All TV loops are conducted based on the provisions of the FSC Transaction Verification Procedure (FSC-PRO-10-201). Click here for more information.
Other SCI investigations
Other SCI investigations are carried out using tools other than the TV loop. They may include GIS tools, wood ID technologies, review of media, scientific and normative/legal sources. In some cases, SCI investigations may be combined with TV loops, to investigate issues in supply chains or at the level of a particular certificate holder, which might undermine the credibility of FSC certification.
Some of the SCI investigations can detect broader violations and may be considered for assessment under violation of the Policy for Association.
Here are some summaries of some SCI investigations that were conducted in the past:
Outcomes of investigations
FSC may block an organization:
Based on the findings of a TV loop or other SCI investigation, ASI provides recommendations to FSC about certificate holders who should be blocked. Once FSC blocks an organization, they can no longer claim FSC certification on their products, or use the FSC trademark. They will also not be able to seek recertification until FSC lifts their blockage, or the predetermined blockage period expires. Blockage can also take place when a certification body detects a false claim.
For more information about blockage, please refer to Advice Note 18.
Suspension or termination of certificates by certification bodies:
Based on the recommendations of ASI, certification bodies may suspend or terminate the FSC certificate of a non-conforming organization. FSC does not suspend or terminate certificates.
For more information about such outcomes, refer to FSC's standard on General requirements for FSC accredited certification bodies (FSC-STD-20-001).
You can check the status of an organization’s certificate on FSC’s public certificate search.
Prior to deciding whether FSC will pursue a Policy for Association (PfA) violation investigation or a mediation process, we monitor and assess the evidence available – either submitted by a complainant or gathered by FSC from publicly available sources. This stage is known as the preliminary assessment.
When a formal complaint is submitted, FSC ensures that the evidence is substantial before accepting the complaint.
We also open PfA violation cases proactively based on evidence gathered from third party sources. Information and evidence for proactive cases are gathered from media reports, legal cases, studies conducted by NGOs, findings of transaction verification loops, etc.
PfA violation investigation
After the preliminary assessment, if FSC decides to pursue an investigation into the complaint or proactive case, all concerned parties are notified, and a public announcement is made. An investigation typically includes the following steps:
- A methodology for investigation is created.
- The investigation is carried out by investigator(s) selected by FSC.
- The investigator(s) prepare the investigation report based on the findings of the investigation.
- Investigation report shared with organization under investigation; they respond to the findings.
- Summary of the report is shared with complainant.
- Decision Making
- Decision panel examines and analyzes the investigation report and statement from the organization under investigation; forms a decision on the case.
- If the Decision panel recommends disassociation this is shared with the FSC International Board of Directors (FSC BoD).
- The FSC BoD makes final decision about disassociating from the organization.
- FSC informs all parties about the decision and publishes a public announcement.
Outcomes of investigations:
Disassociation: FSC expels the organization that was involved in unacceptable activities, as well as all other organizations belonging to the organization’s corporate group.
The entire corporate group’s trademark license agreements are immediately terminated, all certificates are withdrawn and they are blocked from further certification and association such as membership.
For information about the process and requirements for ending disassociation, click here.
Maintain association with conditions: FSC does not disassociate but sets timebound remedy and improvement requirements for the organizations. If they are kept, the organization may continue to be associated with FSC. If not met, the result will be disassociation from FSC.
Maintain association: FSC allows association without conditions based on investigation confirming that the organization has not violated the PfA.
FSC has established a framework for mediation and alternative dispute resolution (ADR) to help resolve certain PfA violation complaints through a neutral, collaborative, solution-orientated approach. FSC believes that mediation can bring about restoration and restitution for the damage caused by the unacceptable activities.
FSC engages external mediators to facilitate dialogue between the organization involved in an unacceptable activity and parties who have been affected in the process. By working together, resolutions acceptable to all parties are developed.
The mediation approach is focused on constructive actions as opposed to determining culpability.
Outcomes of mediation:
The mediation process results in the development of a remediation agreement that the organization involved in an unacceptable activity has to fulfil. This agreement includes the perspectives of the aggrieved parties and the organization.