Outsourcing Requirements

Summary Fact Sheet

August 2007

1.0 Introduction
This fact sheet is provided for companies that will outsource processing or other services related to its
FSC product groups to subcontractors. These requirements are based on FSC-ADV-40-010 FSC
requirements for outsourcing and FSC-STD-20-011 Accreditation Standard for Chain of Custody
Evaluations.

2.0 Terminology
In this document,
FSC certificate holder always refers to the company that is FSC-certified and initiating an outsourcing
arrangement and agreement;
Subcontractor always refers to the company that is outsourced to and identified in the outsourcing
agreement;
FSC refers to the Forest Stewardship Council;
SW refers to SmartWood;
RA refers to the Rainforest Alliance.

3.0 FSC Requirements for Outsourcing

A. FSC certificate holder shall have each outsourcing arrangement approved by SmartWood and included in its
certificate scope prior to outsourcing.
B. FSC certificate holder shall include procedures in its documented control system that cover each
outsourcing arrangement.
C. FSC certificate holder shall have legal ownership of all materials for use in FSC-certified products included
in each outsourcing arrangement.
D. FSC certificate holder shall not relinquish legal ownership of all materials for use in FSC-certified products
during each outsourcing arrangement.
E. FSC certificate holder shall have an agreement or contract (e.g., outsourcing agreement) that covers each
outsourcing arrangement with each subcontractor.
F. FSC certificate holder shall include in the above outsourcing agreement a clause reserving the right of
SmartWood to audit the subcontractor.
G. FSC certificate holder shall ensure the subcontractor tracks and controls all materials that are outsourced
for use in FSC-certified products to ensure they are not at risk of mixing or contamination with any other
materials during the outsourcing arrangement.
H. FSC certificate holder shall ensure the subcontractor maintains records of inputs, outputs, and shipping
documents associated with all material processed during the outsourcing arrangement.
I. FSC certificate holder shall issue the final invoice with the FSC certificate holder’s certificate code for the
FSC-certified products following the outsourcing arrangement as is required under normal FSC CoC
procedures.
J. If FSC certificate holder does not issue the final invoice for the FSC-certified products following the
outsourcing arrangement, the products shall not be sold as FSC-certified.
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K. If outsourcing arrangement requires that the subcontractor apply FSC labels to the FSC-certified products,
FSC certificate holder shall ensure the subcontractor only uses the FSC labels covered by the scope of the
outsourcing arrangement and outsourcing agreement.
L. FSC certificate holder shall ensure the subcontractor does not use the FSC/SW/RA trademarks for
promotional use or on any products not included in the outsourcing arrangement.
M. FSC certificate holder shall ensure the Subcontractor does not further outsource processing of the material
to any other entity.
N. FSC certificate holder shall maintain a record of the names and contact details of all subcontractors included
in the scope of the certificate.
O. Outsourcing of FSC-certified products is acceptable in cases that the FSC certificate holder would not
normally take physical possession of the products after outsourcing.
P. SmartWood audit sampling of subcontractors is required for assessments, surveillance audits, and
reassessments for all high risk outsourcing arrangements, as follows:

High Risk Outsourcing Arrangements

Company outsources a wide range of production activities
Company outsources to more than one subcontractor on a regular basis
Subcontractor(s) grade and/or sort the material
Subcontractor(s) apply FSC labels to the product
Company does not take physical possession of the material after outsourcing
Outsourcing takes place across national borders
Other factors SmartWood deems high risk
Sampling Equations
(y = sample size & is rounded up, x = number of subcontractors)
Assessment: Annual Surveillance Audit: Reassessment:
y = √x y = 0.8√x y = 0.8√x

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 4.0 Example Outsourcing Agreement

Reference Document: CoC-51 Outsourcing Summary Fact Sheet

Official Guidance Documents:
Disclaimer:
FSC-ADV-40-010 FSC requirements for outsourcing,
FSC-STD-20-011 Accreditation Standard for Chain of Custody Evaluations
This document is not required for use as a template. We encourage other
parties to use this document as one starting point for developing a
corresponding part within their control system. However, we should also
state that, based on input we have received directly from the FSC, mere use
of this document with no changes or company-specific adaptation to
address an operation’s specific CoC systems is NOT sufficient for FSC
requirements, as audited by Rainforest Alliance/SmartWood or other FSC-
approved Certification Bodies (CBs). FSC-approved CBs will always require
that an operation have its own CoC system, which may be based in part on
this and other resources. The official documents listed above provide the
requirements necessary for this aspect of a CoC control system.

COMPANY Outsourcing Agreement

FSC Certificate Code: SW-COC-

Primary Contact for Certificate:
Subcontractor Company Name:
Subcontractor Contact Person:
Location of Subcontractor:
Details of Outsourcing
Arrangement:

General Terms for Outsourcing:

A. The subcontractor shall track and control all materials that are outsourced for use in FSC-certified products
to ensure they are not at risk of mixing or being contaminated with any other materials during the
outsourcing arrangement.
B. The subcontractor shall use only the material provided by the FSC certificate holder for products covered by
this outsourcing arrangement.
C. The subcontractor shall maintain records of inputs, outputs, and shipping documents associated with all
material processed during the outsourcing arrangement.
D. FSC certificate holder shall issue the final invoice for the FSC-certified products following the outsourcing
arrangement.
E. The subcontractor shall not use the FSC/SW/RA trademarks for promotional use or on any products not
included in this outsourcing arrangement.
F. Subcontractor shall not further outsource processing of the material to any other entity.
G. Subcontractor shall allow SmartWood to conduct audits of its operation, including on-site evaluation, as part
of its auditing of the FSC certificate holder.

Specific Terms for this Outsourcing Arrangement:

A. {IF APPLICABLE} The subcontractor shall only apply the FSC labels provided by the FSC certificate holder
to the FSC-certified products covered by the scope of this outsourcing arrangement and agreement.
B. {LIST ADDITIONAL TERMS SPECIFIC TO THIS OUTSOURCING AGREEMENT}

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