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Supporting the Development of Liberia's Chain of Custody System

CHALLENGE
The objective of the national Chain of Custody (CoC) System is to capture the economic potential of the Liberia forest sector and its associated benefits for rural livelihoods and national growth through a comprehensive monitoring system ensuring that wood products and associated revenues are tracked down and accounted for. The CoC allows the tracking of logs harvested in the forestry concessions in Liberia, from the stump to the port. In addition to the tractability of commercial timber, the CoC controls the legality of log export and ensures that all taxes and fees related to the logging concessions are reported and collected.

The CoC is considered a crucial governance and transparency initiative, mandated by law in Liberia, and was a requirement for the lifting of the UN logging ban on Liberia. It provides a foundation for the Liberian Extractive Industry Transparency Initiative (LEITI) and the Voluntary Partnership Agreement (VPA) that has been negotiated and signed with the European Union and is due to be ratified. 

APPROACH
Société Générale de Surveillance (SGS) was hired in October 2007 to build, implement and eventually transfer the CoC system known as LiberFor to the Forestry Development Authority (FDA).

SGS is responsible for the following services:

  • Control logs and wood products from stump to point of export or domestic market, and develop and maintain a computerized CoC information system;
  • Invoice and monitor all forest payments related to log, wood production and trade;
  • Issue timber export permits upon confirmation that the shipment originates from registered harvesting area and all relevant forest payments have been made to the Central Bank of Liberia;
  • Provide training to FDA counterpart staff and other relevant government staff in the Ministry of Finance, Central Banks and Ports Authority.

In addition to providing support for Liberfor in 2010-2011, PROFOR committed to sharing lessons from the development of this chain of custody system on its website.

RESULTS AND NEXT STEPS

  • Between 2009 and end of 2012, almost 370,000 m3 of timber were exported under the CoC system. In 2012, stumpage, export and other fees and taxes collected by the CoC system generated almost $9 million in revenue for the Government of Liberia. Over the 2008-2012 period, the system secured $27 million in net state revenue (gross revenue, minus the CoC management fee).
  • FDA personnel have been incorporated into SGS operational teams in field offices and at SGS headquarters.
  • The system has been developed to adapt to the requirements of field operations, from the trees’ felling to the export of logs.
  • Training of FDA staff and independent block verification and data processing is preparing the ground for a gradual transfer of responsibilities to FDA.

The viability of the CoC system was challenged initially by the slow roll out of concessions -- and resulting slow export of timber -- and insufficient numbers of officers, trainers, monitoring vehicles and offices in the field. A number of daunting forest governance and logitical issues, from controversy surrounding Private Use Permits to rehabilitation of roads and ports, remain ahead.

The system however has been continuously refined to tackle difficulties. For example, Standard Operating Procedures have been added to handle new challenges such as in-country change of ownership or cross border shipments. And the barcode has been reworked from 12-digits to 8-digits to reduce the number of barcodes errors.

Liberia is preparing to transition to a Legality Verification Department that includes LiberFor.

A field note summarizing lessons learned from the establishment of the chain of custody was published by PROFOR in February 2013.