HS Timber responds to International Consortium of Investigative Journalists' reports on deforestation; Austrian company says its due diligence system works, it has pursued a sustainable supply chain for years, and axed suppliers over integrity doubts

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March 3, 2023 (press release) –

Since March 1, international journalists' network ICIJ has been publishing reports worldwide on the subject of deforestation.

HS Timber Group was contacted in advance of the publication by journalists who are part of the research network. We responded to these questions with our commitment to open and transparent communication.

The Due Diligence System works

With regard to the latest event - the request for information from Romanian authorities in September 2022 regarding Romanian lumber suppliers, the request has clearly shown that HS Timber Group's Supply Chain Control and Due Diligence System is working.

"Internal investigations have shown that we had not had an upstanding business relationship with the companies at the centre of the investigation for some time. For one of the lumber suppliers involved, there have already been concerns about its integrity for years, which is why, at that time, cooperation on the part of our company was already ruled out. In addition, precautionary suspensions were immediately issued for the other companies at the centre of the investigation."- Michael Proschek-Hauptmann (Chief Compliance and Sustainability Officer).

The HS Timber Group Action Plan

We are convinced that it is possible to ensure a sustainable supply chain. We have massively expanded our Due Diligence System in recent years. Ensuring a sustainable supply chain has been a key concern for us for years. We therefore welcome the initiatives of the Romanian authorities and support them to the best of our ability.

Since 2017, the company has consistently implemented an Action Plan for a Sustainable Supply Chain that goes far beyond the legal requirement. The core element of this action plan was and is the introduction of the company's own GPS tracking system - Timflow. All suppliers are required to install this system in their trucks in order to make all deliveries to the mills transparent and, above all, traceable. In addition to detailed GPS coordinates from the harvest site to the mill gate, including a time stamp, photo documentation of the load is also mandatory.

Elements of this system were integrated into the state SUMAL system at the beginning of 2021 and have since been mandatory for all parties involved in Romania. HS Timber Group nevertheless continues to operate Timflow, as it remains an important tool for us to verify every single delivery.

The combination of governmental and our own tracking systems allows us to trace every timber load back to the harvest site. This allows us to decisively exclude wood from National Parks as well as virgin forest areas from our supply chain. This is one of the voluntary commitments to which we have devoted ourselves in the discourse with our stakeholders.

In addition to tracking and controlling every wood delivery, screening and monitoring our suppliers is very important to us. Suppliers commit to comply with our Code of Conduct as well as our Timber Sourcing Policy. Suppliers who do not observe these themselves may not and cannot deliver to us. Suppliers who violate these principles and rules are ultimately delisted. Companies or persons who have been convicted of corruption or illegal logging are generally excluded from our supply chain. In order to ensure compliance with these rules, we check every supplier before signing a contract, especially on site.

Existing suppliers with timber logyards are inspected at least once a year, depending on their size. When inspecting our timber suppliers, we also repeatedly work together with experts from recognised auditing organisations. In case of concerns regarding the integrity of a supplier in the course of an on-site audit, a contractual relationship is either abandoned or ultimately terminated.

In addition to these control measures, transparency is an important component of our safety architecture. All supplies to our mills in Romania are published on the timflow.com website and can be accessed by anyone for one year. This means: the supplier data, the GPS coordinates, but also the photo documentation and the deposited documents. Suppliers who work with us know this, of course.

We have already introduced a whistleblower hotline in 2017, to be able to promptly follow up on possible violations of our rules. We publish further details on our wood sourcing in an annual Supply Chain Report.

Through our 'Open Doors policy for NGOs', we allow representatives of civil society access to our plants and insight into our control procedures.

With these measures, we always provide our stakeholders with first-hand information. We stand for the fact that a discourse based on facts and information, in particular also with critics, helps us move forward as a company. In this way, we have created high standards in our environment.

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