Evaluation of chain of custody (COC) cost components in the Malaysian certified plywood mills

Abstract

Chain of custody (COC) certification is often seen as a significant challenge and cost increment activity by mill operations which involve hundreds of wood raw material suppliers as well as continuous processing such as those of plywood mills. This includes the cost of implementation and maintenance of COC certification. This paper discusses COC certification of the Malaysian plywood manufacturing companies. The study was conducted on plywood mills that were certified by the Forest Stewardship Council (FSC), the Malaysian Timber Certification Scheme (MTCS) and/or Program for the Endorsement of Forest Certification (PEFC). The aim of the study was to identify cost components and evaluate the main cost that contributed to the COC certification of plywood mills. A 100% survey through personal interview was conducted on certified plywood mills in Peninsular, Sabah and Sarawak. Only primary data (data obtained from the interview) was used in the study. The results revealed there are seven basic cost components to attain, implement and maintain COC certification which include: certified raw material, consultancy (plus training), auditing fees charged by certification body, documentation for reporting, recording and preparation of standard operation procedures (SOP), marketing or promotional including the use of logo, printing of brochures and pamphlets for promoting certified product, continuous training and cost for hiring additional staff and/or reward given for successfully getting certified. Amongst the above components, certified raw material cost was identified as the biggest contributor to the average certification cost (41%, valued at USD0.73/m³) of COC certified plywood mill in Peninsular, Sabah and Sarawak.