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 with the European Union and is due to be signed. 

APPROACH
Société Générale de Surveillance (SGS) was hired in October 2007 to build, implement and eventually transfer the CoC system 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, PROFOR is committed to sharing lessons from the development of this chain of custody system on its website.

RESULTS
This activity is ongoing. A second phase of support was approved in June 2011. As of June 2011, SGS had reported the following results:

• Approximately 60,000 m3 of timber have been exported  from Liberia under the CoC

• Generated $1,172,301.00 in export fees for fiscal year (2010-2011)

• Generated $1,036,497.00 in stumpage fees for fiscal year (2010-2011)

• FDA personnel have been incorporated into the SGS operational team and located in SGS base office

• The system has been developed to adapt to the requirements of field operations, from the trees’ felling to the export of logs

• Daily training is provided to the companies and FDA field staff.  Since January 2011, SGS has undertaken 80 field and training trips 

FINDINGS
The viability of the CoC system (also known as LiberFor) has been challenged 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.

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

SGS expects the CoC system to become economically viable in FY 2012. Follow us on twitter or join our mailing list for regular updates.