Decision No. 1415/MOIC.DOI on the form and size of timber products

Lao People’s Democratic Republic Peace Independence Democracy Unity Prosperity Ministry of Industry and Commerce No 1415/MOIC.DOI Vientiane Capital, 28 August 2008 Decision on The Form and Size of Timber Products Pursuant to Industrial Processing Law No. 01-99/NA dated 3 April 1999 and its Implementing Decree No. 67/PM dated 12 April 2006. Pursuant to the Decree on the Structure and Activities of the Ministry of Industry and Commerce No. 188/PM dated 17 August 2006. Pursuant to the Decision on the Standard of Wood, Rattan and Bamboo Processing Manufacture No. 0221/MOIC dated 13 February 2007 and the Decision on the Management of Industrial Processing Manufacture No. 1301/MOIC dated 30 July 2007. The Minister of Industry and Commerce issued a Decision: Chapter I General provisions Article 1: Objective and goal The objective of this Decision is to set out the definition, form and type of timber products produced by wood processing manufacture fulfilling the criteria with the goal: To raise awareness and understanding on timber products in Lao PDR for uniformity throughout the country. To ensure that the restructuring of the wood processing industry manufacture meet the standard and be modernized. To create value addition for the timber products that has been processed either through industrial or handicraft processes, aiming at increasing exportation. To administer and promote the use of log as raw material from limited natural resource for optimum benefit and protect the environment and biodiversity for security and sustainability. Article 2: Definition Timber products refers to the product that is derived from wood processing industry manufacture as provided in Articles 2 and 9 of the Law on Industrial Processing and from special processes as provided in Article 3 of the Decision No 0221/MOIC, dated 13 February 2007. Timber products from primary wood processing manufacture, secondary wood processing manufacture and tertiary wood processing manufacture under this Decision shall be divided into three forms, namely: sawed timber, semi-processed timber, and finished product in accordance with the degree of value addition in the production process of such manufactory (pursuant to the diagram on the structure of the timber processing industry) as detailed below: 2.1 Sawed timber It is the timber product which is through the production process of sawing by primary wood processing manufacture or sawmill, composing of: 2.1.1 Sawed timber ( ISIC Code 1610): Product from sawmill as per the list of product provided in Table 1 of Annex 1, composing of: 1. Big size sawed timber: Large scale sawed timber which is derived from log through the use of large saw machine and in low value added. The list of the product is provided in number 1 in Table 1. 2. Processed-sawed timber: Timber products from sawmill where big size sawed timber has been further sawn with medium sized saw machine and in low value added. The list of the product is provided in number 2 in Table 1 3. Spited wood: Timber products from sawmill where the sawed timber has been sawn, cut, and trimmed in different shapes according to the form of the components of table, chair, wardrobe, bed or others that are rough like general form of timber. The list of the product is provided in number 3 in Table 1. 2.2 Semi-processed timber products It is the timber product which is through the production process of sawing by secondary wood processing manufacture (Manufacture of veneer sheets, , plywood, and boards; Manufacture of builders’ carpentry and joinery and Manufacture of paper pulp) as detailed below: 2.2.1 Veneer, Slicing Board (ISIC Code 1621): Product from Manufacture of veneer sheets, plywood, and boards which uses log as raw material. Such timber product has low to medium value added that can be further supplied to secondary and tertiary wood processing manufactures. The list of product is provided in number 1 and 2 in Table 2 of Annex 2. 2.2.2 Builders’ carpentry and joinery or wood for housing (ISIC Code 1622.1): Timber product from secondary wood processing manufacture where uses sawed or trimmed timber is processed to be components for construction which went through many stages of production processes and in many sizes, being heat-dried, debarked, drilled, formed into shape, sanded, carved and any others according to relevant architectural design in order to meet the objective and goal for use. Such timber product is a semi-processed timber product as provided in Table 2 of Annex 2. In case of wood for housing which has been through the production processes as prescribed above to further process to be components for finished product that can be easily dissembled and resembled (knock-down) according to the design to for one set/building, it is considered finished timber product for housing as a means to add value and for ease in packaging, containing, and transporting. 2.3 Finished timber product It is the timber product which is through the processing by secondary wood processing manufacture (Manufacture of plywood , Manufacture of builders’ carpentry and joinery, Manufacture of wood flooring and parquet, including Manufacture of paper, containers from paper, and paperboard) and tertiary wood processing manufacture (Manufacture of wood containers, Manufacture of other products of wood, Manufacture of wood furniture) which has medium to high added value and can be instantly consumed. It is composed of: 2.3.1 Plywood (ISIC Code 1621): Product from manufacture of plywood which uses raw materials from log, veneer, slicing board, or other particle of wood. Such product is the general plywood that is further supplied to tertiary wood processing manufacture or general construction; and waterproof plywood which has low to medium added value. The list of the product is provided in number 3, 4 and 5 in Table 2 of Annex 2. 2.3.2 Builders ‘carpentry and joinery(ISIC Code 1622.2) Timber product that is the component of building in the form of components that can be assembled, being the product through various stages of production and can be further supplied to tertiary wood processing manufacture or general construction and has medium to high added value. The list of the product is provided in Table 2 of Annex 2. 2.3.3 Wood flooring and parquet (ISIC Code 1624): All types of wood flooring where uses sawed and trimmed timber is processed through many production processes such as: being heat-dried, , planning, grooving, tonguing and others. Such product has medium added value which can be further supplied to tertiary wood processing manufacture or construction or other industries. It includes general wood flooring, interior wood flooring, exterior wood flooring, walkway wood flooring, public area wood flooring, truck body joinery, parquet flooring and others. The list of the product is provided in Table 2 of Annex 2. 2.3.4 Wooden containers (ISIC Code 1623): The wooden containers is made from finished timber product which is through industrial or handicraft production processes to be finished product for use. The list of the product is provided in Table 3 of Annex 3. 2.3.5 Other products of wood (ISIC Code 1629): The other product of wood is made from finished timber product which is through industrial or handicraft production processes with fine and artistic skills to be finished product for use. The list of the product is provided in Table 3 of Annex 3. 2.3.6 Wood furniture (ISIC Code 3100): The wood product that is processed by tertiary wood processing manufacture or furniture manufacture with fine and artistic skills. Such wood product shall be in the form of component that has been assembled or non-assembled (knock-down), but shall be in a complete set of components which can be easily assembled and for use. The list of the product is provided in Table 3 of Annex 3. 2.3.7 Wood product from wood stump: The other product of wood items code 1629 and furniture code 3100 where wood stump is used as the key raw materials through handicraft or industrial processes such as: cutting, trimming, or slicing, carving, drilling or others of wood stump. Such product is in fine and artistic shape, outstanding and as the product with high added value. Chapter II Form and size of timber product Article 3: Form and size of timber product The form of each type of timber product as defined in Article 2 is illustrated in the last column of Tables 1, 2 and 3 of Annexes 1, 2 and 3. The size of each type of timber product is provided in Table 1 (timber product from sawmill); Table 2 (product from Manufacture of veneer sheets, plywood, and boards, Manufacture of builders’ carpentry and joinery, Manufacture of wood flooring and parquet, Manufacture of paper, containers from paper and paperboard); Table 3 (Manufacture of wooden containers, Manufacture of other products of wood and wood furniture manufacture). Article 4: Form of other timber products and size of product other than those specified 4.1 For the list of other timber products in the form and size other than those specified in this Decision, the manufacture shall propose to the Industry and Commerce sector for consideration on a case by case basis. 4.2 Rattan and bamboo product and product from non-timber manufacture and traditional medicines manufacture, perfume extracting, oil extracting and others manufacture shall be regulated separately. Article 5: Registration of quality and standard of timber product Wood processing industry manufacturer may register the quality and standard of their timber product with the agencies as provided in Article 15 of the Industrial Processing Law through standard setting of their wood product as provided in Articles 9 and 10 of Decree No. 85/PM, dated 2 November 1995 on the Management of Standard and Quality of Products. The standard of each type of timber product as provided in Table 1, 2 and 3 shall be created as technical documents to become national standards which shall be created or developed on a case by case basis which is considered necessary or proposed by the enterprise in accordance with regulations on standard and quality of Lao products. The unit of measurement shall follow those being adopted by Lao PDR. Article 6: Production plan of manufacture The production plan of the manufacture as provided in Article 5(9) of Decision No. 1301/MOIC, dated 30 July 2007 shall follow: 6.1. Wood processing manufacture shall follow: 6.1.1 Prepare production plan (º1) based on the actual capacity of the manufacture as a basis for wood quota allocation; 6.1.2 Prepare plan for distributing timber product (º2); 6.1.3 Prepare plan for needs of raw materials (º3); 6.1.4 Calculate prices of finished product per production unit (º4); 6.1.5 Report the actual implementation (º6) on quarterly basis or in case of needs and necessity in each period. To ensure uniform implementation, the statistics in such plan (º1, º2, º3, º4) shall be submitted to the wood processing industry association and Department of Industry and Commerce at Provincial and Vientiane capital for mutual consideration, monitoring and management. 6.2 Department of Industry and Commerce at Provincial and Vientiane capital has the duties to monitor and inspect the implementation of the above mentioned plans and report to the Ministry Industry and Commerce on a quarterly basis or in case of needs. Article 7: Added value of timber product The wood product shall be through different production processes and value adding according to the form, category, type and characteristic of each product which producer clearly specifies such production processes of each item of the wood product as provided in Table 1, 2 and 3. The calculation of added value of each timber product shall have supplementing guideline separately. The government encourages and promotes the exportation of timber product with high added value. For some timber product items which are semi-processed as provided in Table 2 such as: complete set of household items or timber product provided in Article 4 (4.1), the businessman who has sales-purchase contract with buyer and wishes to export shall propose to the Ministry of Industry and Commerce through the Department of Industry and Commerce at Provincial and Vientiane Capital for consideration on a case by case basis. Chapter III Inspection, certification and measures against violator Article 8: Inspection of timber product The Department of Industry and Commerce at provincial and Vientiane capital has the duties to inspect timber product in the wood processing industry manufacture according to production plan as provided in Article 6 of this Decision or the order or proposal of manufacture as well as other relevant agencies by using the inspection and certification form of the timber product (º5). Article 9: Certification The Department of Industry and Commerce at provincial and Vientiane capital has the duties to certify timber product that has been inspected according to the form and size as provided in this Decision, using the inspection and certification form of the timber product (º5). In the actual inspection prior to certifying, if the finished timber product found to be not meeting that specified in the proposal, there shall be recorded in the inspection form accordingly. Article 10: Measures against violator Any persons who are authorized to operate the wood processing industry manufacture violate or fail to follow this Decision or forge the inspection and certification form of the timber product shall be warned, educated, paying compensation, fined and subject to criminal punishment according to Articles 24, 25, 26 and 27 of the Decision on the Management of Industrial Processing Manufacture No. 1301/MOIC, dated 30 July 2007 and Articles 54, 55, 56 and 57 of the Industrial Processing Law No. 01/99/NA dated 3 April 1999. If any employees and government officials taking part in the management and inspection of the timber product pursuant to this Decision behave in a manner violating the prohibitions of the government officials in Chapter 6 shall be strictly prosecuted according to Chapter 14 of Decree No. 82/PM, dated 10 May 2003 on the Code of Conduct of the Government Officials of Lao PDR. Chapter IV Final provisions Article 11: Implementation The Department of Industry, Department of Import and Export, Domestic Trade Department, and Department of Industry and Commerce at provincial and Vientiane capital shall coordinate with relevant agencies and local authorities to strictly implement this Decision. Article 12: Entry into force This Decision shall be entry into force from the date of its signature. This Decision replaces Decision No. 1048/MOIC.DOI, dated 26 June 2008. If any provisions previously adopted found to be conflicting with this Decision shall be annulled. Minister of Industry and Commerce [signed and sealed] Dr. Nam Viyaketh