The new system brought by iov42, an enterprise-grade blockchain operating platform, promotes transparency and accountability along the timber supply chain. This data-driven solution ensures regulatory compliance and improves supply chain integrity by providing blockchain digital identities to each of the stakeholders that are part of the supply chain and represents timber as digital assets.
The stakeholders use their digital identities to record timber information on each step of the supply chain, such as forest, sawmill, kiln drying facility, and supplier facility. This way, the buyer can trace the route of the timber they have purchased and verify if it comes from a legal, certified source.
iov42 works together with Preferred by Nature, a globally recognized certification company, and Carl Ronnow, an international timber supplier from Malaysia. They will soon start the Proof of Concept (PoC), which will focus on the import of tropical timber into the European Union (EU) market. After the successful implementation of the PoC, there will be a chance to expand to other regional markets.
The UN Environment Programme estimates that globally 15 – 30% of timber is taken illegally. The international illegal timber trade is worth $50B – $150B USD annually. The organization Earthsight identified three main problems that have caused the loss of revenue and ecological threats: the circumvention or ignoring of the environmental regulation, the use of “ghost employees” and the illegal exports that drive down legal timber prices. This situation worsens in developing and countries that are prone to corruption, where authorities have been found to often be ineffective in auditing supply chains and certifying compliance with regulation and additional standards.