Enc: Revised 2010 ISO 14001, CSA Z809 and SFI Audit Report for BC Timber Sales Kamloops Business Area

Transcription

1 KPMG Performance Registrar Inc. Box 10426, 777 Dunsmuir Street Vancouver BC V7Y 1K3 Canada Telephone (604) (604) Telefax (604) Mr. Richard Cooper Certification Standards Officer BC Timber Sales Kamloops Timber Sales Office 1265 Dalhousie Drive Kamloops, B.C. V2C 5Z5 Dear Rick: Re: Revised 2010 ISO 14001, CSA Z809 and SFI Audit Report for BC Timber Sales Kamloops Business Area Our revised 2010 ISO 14001, CSA Z809 and SFI Audit Report for BC Timber Sales Kamloops Business Area is attached. The report documents the results of the audit that took place during the period November 15-18, As communicated to you previously, you are required to submit corrective/preventive action plans to address all identified non-conformities within 30 days of the date of this report. Upon receipt by KPMG PRI, these will be reviewed to verify that they adequately address the root cause(s) of the non-conformities identified during the audit, and either approved or returned to you for revision. We value the ongoing working relationship that we have with BC Timber Sales Kamloops Business Area, and appreciate the assistance provided to the audit team by BCTS staff and LPCs during the audit process. If you have any questions regarding the results of the audit or what is required in the way of corrective actions, please call me at the phone number listed below. Yours truly, Dave Bebb, RPF, CEA(SFM), EMS(LA) Vice President, Registration Operations KPMG Performance Registrar Inc Enc: Revised 2010 ISO 14001, CSA Z809 and SFI Audit Report for BC Timber Sales Kamloops Business Area Wholly owned subsidiary of KPMG LLP, the Canadian member firm of KPMG International, a Swiss nonoperating association.

2 for This audit report is intended solely for the use of the intended client, BC Timber Sales Kamloops Business Area. It may only be reproduced by with the express consent of KPMG. Any opinions contained in this audit report are subject to the terms and conditions expressed in the governing KPMG PRI client engagement contract.

3 Table of Contents A. Client Information... 1 B. Document Review Findings... 1 C. Audit Details... 2 D. Audit Findings... 3 E. Corrective Action Plans F. Focus Areas for Next Audit Visit... 13

4 Page 1 A. Client Information Client Name: Audit Criteria: ISO 14001:2004, CSA Z and SFI Scope of Registration: Client Representative: ISO 14001: Kamloops Business Area Forestry operations on Crown forest land including planning and performance on active and completed timber sales as well as EMS conformance by individual participating B.C. Timber Sales licencees, permitees and contractors. CSA Z809: Kamloops TSA BC Timber Sales operations within the BCTS Kamloops Defined Forest Area and responsibilities under the Kamloops TSA Sustainable Forest Management Plan which covers the entire Kamloops Timber Supply Area. CSA Z809: Merritt TSA BC Timber Sales operations within the BCTS Merritt Defined Forest Area and responsibilities under the Merritt TSA Sustainable Forest Management Plan which covers the entire Merritt Timber Supply Area. CSA Z809: Lillooet TSA Scope statement to be determined. SFI: 100 Mile House TSA Sustainable forestry for BCTS planning and operations in the 100 Mile House Timber Supply Area (TSA). Richard Cooper, Certification Standards Officer Assessment Number: ISO 14001: # CSA Kamloops TSA: # CSA Merritt TSA: # CSA Lillooet TSA: # SFI 100 Mile House TSA: #PRI-SFIS-032 B. Document Review Findings The surveillance audit portion of the 2010 audit included a limited scope assessment against selected elements of the ISO 14001, CSA Z809 and SFI standards. As such, no formal document review was required in advance of the audit. In the case of the Lillooet CSA Z809 certification audit, the document review report identified a number of potential concerns for follow-up during the field portion of the audit. These issues were reviewed by the audit team while on-site and either closed or carried forward to this report.

5 Page 2 C. Audit Details Type of Audit: Certification audit: Lillooet CSA Z809 Surveillance audit: ISO (entire BA), CSA Z809 (Merritt and Kamloops TSAs), SFI (100 Mile House TSA) Date(s) of Audit: Document Review: November 4 th (Lillooet CSA Z809) and November 9-10, 2010 (ISO 14001, CSA Z809 and SFI surveillance audits) Field Audit: Nov 15-18, 2010 Date of Next October 2011 Assessment: Audit team: Lead auditor: Yurgen Menninga Audit team members: Dave Bebb, Sylvi Holmsen, Dennis Lozinsky Audit Report Distribution: KPMG PRI audit files SFI Inc. (public summary report only) Audit objective(s): The objective(s) of the audit was to evaluate the environmental and sustainable forest management system at BC Timber Sales Kamloops Business Area, its implementation, effectiveness and conformance with the requirements of the ISO 14001, CSA Z809 and SFI standards. These objective(s) were met. Audit scope: The scope of the audit included: The elements of the ISO 14001, CSA Z809 and SFI standards outlined in the audit plan. Activities conducted under the Company s management system during the period October 22, 2009 Nov 18, Visits to the following Kamloops BA operations: Site 1. Kamloops Timber Sales Office Site 2. Clearwater Field Team (Kamloops TSA) Site 3. Merritt Field Team (Merritt TSA) Site Mile House Field Team (100 Mile House TSA) Audit sample size: Number of field sites visited during the audit: Clearwater Merritt 100M House Lillooet Total Roads: Harvesting: Silviculture: Other: 1 (bridge installation) 1

6 Page 3 D. Audit Findings Good Practices The following good practices were noted during the audit: 1. The Nicola Thompson Fraser (NTF) Public Advisory Group (PAG) have expended considerable effort over the past year in working to combine the 3 predecessor SFM plans into a single SFM plan ( which now covers the Kamloops, Merritt and Lillooet TSAs and TFL 18), while at the same time attempting to address the requirements of CSA Z The 2010 Kamloops Business Area internal audit included 3 BCTS staff from the BA (although from different field teams from those that they audited to ensure independence). The use of staff on internal audit teams provides an opportunity for cross-pollination and sharing of information regarding different approaches to forest management that might not otherwise occur with an audit team composed entirely of outside contractors. 3. The organization documents potential TSL issues under TASKs in Genus. These noted issues or concerns are available for review prior to commencement of forestry activities. The purpose of TASKs is to ensure all concerns or issues are addressed prior to commencement of work. This was found to be a good practice at tracking issues to ensure they are addressed through to completion. Follow-up on open non-conformities from previous audits At the time of this assessment there were no open non-conformities from previous audits. Major non-conformities No major non-conformities were identified during the audit.

7 Page 4 Minor non-conformities The following 7 minor non-conformities were identified during the audit: 1. Minor non-conformity: TKA-2010-NC-01 Standard/Element(s): CSA Z809: Client Procedure: Internal SFM Audit Lillooet TSA CSA Z809 element requires the organization to conduct annual internal audits of its SFM system to assess its conformance with the requirements of the standard. However, while an internal CSA Z809 audit was conducted at the TKA Business Area in 2010, it did not include an assessment of BCTS operations within the Lillooet TSA. While there has been little BCTS activity in this TSA in recent years, it has not previously been included within the scope of the CSA Z809 certification and has not been subject to internal audit since Note: The 2010 TKA internal audit took place between June 8 th and 10 th, The audit conformed with the BCTS internal audit program and plan that was in existence at that time (dated June 25, 2009), which only listed the Kamloops and Merritt TSAs as being within scope for the annual CSA Z809 internal audit. However, subsequent to the completion of the 2010 TKA audit, the BCTS internal audit program and plan was revised (on June 24, 2010) to expand the scope of the 2010 TKA CSA Z809 internal audit to include the Lillooet TSA. 2. Minor non-conformity: TKA-2010-NC-02 Standard/Element(s): CSA Z809-02: (Shared Responsibility) Client Procedure: Nicola Thompson Fraser SFM plan The CSA Z809 standard (element ) requires that the organization: (1) ensure that all parties necessary to address the CSA SFM elements for the DFA are involved in the process, and (2) clearly describe the respective roles and responsibilities of the parties involved. There are a variety of licensees operating within the DFA (the area under the Nicola Thompson Fraser (NTF) SFM plan), and not all of these licensees have formally agreed to implement the SFM plan or report on their performance under it. However, the participating licensees have yet to conduct a formal risk assessment to determine the risk that the forest management activities of non-participating licensees pose to the achievement of the targets for the DFA. 3. Minor non-conformity: TKA-2010-NC-03 Standard/Element(s): CSA Z809-02: Client Procedure: NTF SFM Plan CSA Z element requires the organization to develop DFA-specific performance measures that address all of the CSA SFM elements. However, although the audit found that the NTF SFM plan included indicators and targets in relation to most of the CSA SFM elements, a gap was identified in relation to CSA SFM element 1.2 (Species Diversity).

8 Page 5 The SFM plan includes 4 targets (#6, #7, #8 and #9) in relation to species at risk. In addition, Appendices 6 and 7 identify the wildlife species and red-listed ecological communities that are believed to occur within the plan area. However, although a species explorer query indicated that there are a number of rare plants that are likely to occur within the plan area, neither the targets noted above nor the associated SFM plan Appendices currently address the identification and protection of rare plants. 4. Minor non-conformity: TKA-2010-NC-04 Standard/Element(s): CSA Z809-02: Client Procedure: NTF SFM Plan CSA Z809 element requires the SFM plan to include documentation of the current status and forecasts for each indicator. However, the NTF SFM plan does not include descriptions of the current status of the indicators but rather reports on current status in the annual SFM plan monitoring reports. While data respecting current status has been documented in previous annual monitoring reports for the three predecessor plans for a number of the indicators, because a number of indicators in the NTF SFM Plan are new to the Merritt and/or Lillooet TSAs (as they have been carried over from the Kamloops TSA SFM plan without an analogous pre-existing indicator established for one or both of the other 2 TSAs), the current status has not been assessed and documented as required by the CSA Z809 standard for a number of these indicators (e.g., indicators 1.1.1,.1.1.2, 1.4.1, 3.1.2, 5.2.2, 5.2.4, 6.3.2, 6.3.3, 6.4.2, 6.4.3). 5. Minor non-conformity: TKA-2010-NC-05 Standard/Element(s): CSA Z809-02: , d) Client Procedure: NTF SFM Plan CSA Z809 element requires that forecasts be prepared for the expected responses of each indicator to each alternative strategy. Assumptions and analytical methods used for making each forecast must be described. In addition, CSA Z809 element d) requires documentation of the current status and forecasts for each indicator, including a description of the assumptions and analytical methods used for forecasting. Our assessment found that in relation to Criterion 1, the underlying SFM plan strategy is to move the forest to a relatively balanced age class distribution. Within this context, biodiversity objectives are to be achieved (primarily) by: Maintenance of existing BEC zones (over which licensee influence is identified as limited ). 70% of free growing areas having 3 or more tree species. Age class targets for Age Class 1-4 of at least 8.5% of the THLB. Retention of approximately 195,000ha of OGMAs. Maintenance of wildlife tree patches and stubs. Adherence to Section 7 notices, UWRs and WHAs.

9 Page 6 FSP strategies for riparian area management, wildlife tree retention, coarse wood debris and old growth management. Conformance to obligations under higher level plans. Conformance with stocking standards. The specific actions to be undertaken are clearly documented (e.g., 78% of areas declared free growing during the reporting year have 3 or more tree species, 195,995ha of spatially located OGMAs, 3,300ha of flammulated Owl habitat). However, the forecasting information provided in the SFM plan is in most cases limited to a quantitative re-statement of actions (e.g., Indicator : 91% of harvested cutblocks greater than 10 hectares in size had wildlife tree patches and/or individual leave trees) or a statement as to the intent of the action (e.g., Indicator 1.1.2: Healthy generically diverse ecosystems with a mix of native species). As a result, the SFM plan currently lacks forecasting information as to the effects of these actions on ecosystem diversity and wildlife habitat over time that is specific to the DFA that is defined within the plan (which has been developed at a different scale from the TSR assumptions and the data and actions developed under Section 7 for the maintenance of wildlife habitat). The above weakness in forecasting also leaves a number of the indicators and targets lacking in clarity as to their purpose and ability to provide information on the effectiveness of the plan over time. The indicators and targets of concern in this regard are: Indicator (Ecosystem area by type) As the BEC system is an ecological classification system that describes the late seral plant community that is expected to exist on zonal sites within a given subzone, it does not describe the plant community that actually exists on a site at a given point in time. Licensees operations within the plan area have no ability to impact on the presence, geographic distribution or relative abundance of the BEC subzones that occur within the DFA. As such, the contribution of the indicator and target to assessing SFM performance over time is unclear. Indicator (Forest area by type or species composition) The target developed in relation to this indicator is restricted to species composition at free growing. How this relates to the relative abundance of forest types on the DFA over time is not stated. Indicator (Additions and deletions to the forest area) The current targets are restricted to measuring on-block permanent access structures (PAS). As a result, the cumulative, landscape-level impact of these block-specific targets over time is unclear. Note: The SFM plan does not include any description of the nature or results of the forecasting already completed at different spatial scales than the DFA, and does not indicate a methodology to assess over time how effective this approach is in relation to the plan objectives (in order to facilitate top management s assessment as to whether progress toward SFM is effective per CSA Z809 element 7.6). However based on the selected indictors, it is recognized that there may be potential linkages to the FREP program in some instances.

10 Page 7 6. Minor non-conformity: TKA-2010-NC-06 Standard/Element(s): CSA Z809: 7.5.2, Client Procedure: Internal Audit, Action Plans The CSA Z809 (element 7.5.4) and ISO (element 4.5.5) standards include requirements for conducting internal audits to assess whether the system: (1) conforms to planned arrangements for environmental management, including the requirements of ISO and CSA Z809, and (2) has been properly implemented and maintained. In addition, element of the CSA Z809 standard requires that the organization establish and maintain procedures for initiating and completing corrective and preventive actions to address nonconformities identified through inspections and internal audits. The 2010 BCTS Kamloops Business Area internal audit included a limited scope CSA Z809 audit of performance under the Kamloops and Merritt SFM plans. However, review of the internal audit report and associated action plans identified the following: The audit report includes various non-conformities related to weaknesses in forest practices, but does not reference the applicable BCTS procedures that are designed to prevent these occurrences. As a result, the audit report does not clearly identify whether the findings relate to a failure to follow existing procedures, ineffectiveness of an existing procedure or the lack of a procedure. The action plans developed in relation to the non-conformities identified in the 2010 TKA internal audit identify a number of preventive actions but do not include any corrective actions as required by the standard. For example, the action plans developed in relation to NCR 01, NCR 03 and NCR 04 do not include any actions to address the problems noted on the sites in question (i.e., TSLs A84597 and A83814). 7. Minor non-conformity: TKA-2010-NC-07 Standard/Element(s): ISO 14001: 4.4.6; CSA Z809: Client Procedure: Operational Controls Kamloops TSA (Clearwater Area) The ISO (element 4.4.6) and CSA Z809 (element 7.4.6) standards require that the organization have operational procedures and controls to meet its environmental policy and SFM requirements. The audit found that the required operation controls were in place. However, the following weaknesses in implementation were noted: One operational control is the field inspection of operations. The inspection frequency is determined by the risk rating form. However, weaknesses were observed for 2 TSLs in the McMurphy area (TSLs A84580 and A84581). On one TSL the risk ranking was not completed, and for the other it was completed but the required inspections every 3 weeks did not occur (i.e., there was a 6 week gap). Another operational control is the BCTS spill kit requirements, which are sized to the machine/fuel tank type. The audit found that these kits were generally complete, however on one block (A85645 block 1 in Robina) items were missing from some of the four spill kits inspected (i.e., one did not have the required # of spill pads, one kit had no bioremediation, another had no bioremediation or emergency tank sealant).

11 Page 8 At one active operation assessed in Clearwater (TSL A85645 in Robina) the commercial bioremediation product (e.g., Plug-N-Dike, Seal-it or equivalent) that is required in the spill kits for the tidy tank and on-site fuel truck was not present, and the foreman did not know what it was or how it is used. Opportunities for improvement The following 9 opportunities for improvement were also identified during the audit: 1. Opportunity for improvement: TKA-2010-OFI-01 Standard/Element(s): CSA Z809: Client Procedure: Kamloops North Thompson SFM Plan Annual Report CSA Z809 element requires the organization to prepare and make public an annual report on its performance in meeting the SFM requirements. CSA Z809 element further elaborates on the content requirements for the annual report, and indicates that progress, success, shortcomings, emerging issues, future plans, corrective actions and management commitment are some of the topics that an annual report should address. Review of the 2009 annual monitoring report for the Kamloops North Thompson SFM plan found that 2 of the targets (indicators 2 and 8) had not been met within the variances prescribed in the plan. However, although the annual monitoring report provided a rationale as to why the targets were not met, it did not describe what corrective/preventive actions (if any) were being taken to address this. 2. Opportunity for improvement: TKA-2010-OFI-02 Standard/Element(s): CSA Z809: Client Procedure: Operational Control Lillooet TSA CSA Z809 element requires the organization to establish and maintain documented procedures (e.g., EOPs, EFPs, site plans, etc.) to cover those situations where the absence of such procedures could lead to deviations from the SFM requirements. Review of the TSL documents for two timber sales identified inconsistencies between the grass seeding requirements in the TSL documents and the Lillooet TSA Forest Stewardship Plan. The FSP requires seeding for control of invasive plants to be completed on permanent access structures, temporary access structures and temporary and bladed trails within two spring seasons of completing timber harvesting or road construction. However, the TSL document only specifies that: Skid trails be grass seeded, and; Rehabilitated roads may be re-vegetated or have wood debris placed on the exposed soil (A82374 and A80961).

12 Page 9 3. Opportunity for improvement: TKA-2010-OFI-03 Standard/Element(s): CSA Z809: Client Procedure: Inspection Reports Lillooet TSA CSA Z809 element requires the organization to establish and maintain documented procedures to monitor, on a regular basis, the key characteristics of it operations and activities that demonstrate progress towards SFM in the DFA. The audit found that the applicable BCTS monitoring and measurement procedures had been implemented as required in the large majority of instances. However, the following opportunity for improvement was identified in the Business Area s procedures for assessing performance against targets in site plans. Field inspections of a sample of blocks in the Lillooet TSA noted that site plans included targets for retention of stubs and live trees. While visual inspection indicated that there was good retention of stubs and live trees, it was not evident if retention is actually measured against the target in the site plans as this was not recorded in the inspection reports. 4. Opportunity for improvement: TKA-2010-OFI-04 Standard/Element(s): ISO 14001: 4.4.6; CSA Z809: Client Procedure: Operational Control Lillooet TSA CSA Z809 element requires the organization to establish and maintain documented procedures (e.g., EOPs, EFPs, site plans, etc.) to cover those situations where the absence of such procedures could lead to deviations from the SFM requirements. The audit found that operational controls had been implemented as required in the large majority of instances. However, the following opportunity for improvement was identified in the Business Area s procedure for amending site plans to ensure consistency between the plan, associated maps, and field conditions. Review of the site plan for one block examined in the field indicated that the plan refers to backspar trails and temporary access structures. However, because the site plan was amended to remove the cable yarding portion of the block, these structures do not actually exist on the ground (A ). 5. Opportunity for improvement: TKA-2010-OFI-05 Standard/Element(s): SFI Transition Requirements Client Procedure: BCTS SFI Transition Plan The transition requirements of SFI provide the option of conducting surveillance audits in 2010 against either SFI (which is the case for all 2010 BCTS surveillance audits) or SFI However, regardless of which standard is used, 2010 surveillance audits are required to include an assessment of action plans to address the incremental requirements of SFI BCTS has developed an action plan (dated September 24, 2010) for transition to SFI before the end of Review of the contents of the plan found that it adequately documents the actions required to address the incremental requirements of SFI in most respects. However, although the plan includes corporate timelines for the completion of

13 Page 10 various action plan items (notably the completion of the provincial SFM plan and SFI roles and responsibilities template), it does not identify Business Area-specific timelines for the action plan items that have been assigned to BA staff. 6. Opportunity for improvement: TKA-2010-OFI-06 Standard/Element(s): ISO 14001: 4.5.1; SFI Performance Measure 11.1 Client Procedure: BCTS CHK Mile House TSA ISO element requires the organization to establish and maintain documented procedures to monitor, on a regular basis, the key characteristics of its operations that can have a significant environmental impact. In addition, SFI Performance Measure 11.1 requires the organization to develop and implement a system to achieve compliance with applicable federal, provincial, state, or local laws and regulations. The BCTS EMS includes a variety of procedures (e.g., SFM annual report, various checklists, etc.) that are intended to address these requirements. The EMS procedure CHK-011 (BCTS Client Self Inspection Report) requires LPCs to conduct monthly inspections. However, an inspection of active operations at 100 Mile House (TSL A87046) identified an isolated weakness in implementation of the LPC inspection requirement as the contractor had not completed the required monthly self-inspection of active operations. 7. Opportunity for improvement: TKA-2010-OFI-07 Standard/Element(s): CSA Z809-02: 7.3.1, Client Procedure: Nicola Thompson Fraser SFM plan CSA Z809 element requires the organization to designate a clearly defined DFA to which the standard applies. In addition, CSA Z809 element requires that the SFM plan include DFA-specific performance requirements. As currently written, the text of the NTF SFM plan indicates that there are a total of 6 company-specific DFAs within the plan area. However, in the large majority of cases the targets developed in relation to the SFM plan are for the plan area as a whole, and do not relate directly to the various DFAs as currently defined in the plan. As a result, there is an opportunity to improve the clarity of the DFA description included in the plan. 8. Opportunity for improvement: TKA-2010-OFI-8 Standard/Element(s): CSA Z809-02: Client Procedure: NTF SFM Plan CSA Z element requires the organization to develop DFA-specific performance measures that address all of the CSA SFM elements. CSA SFM Element 1.2 requires species diversity to be conserved by ensuring that habitats for the native species found in the DFA are maintained through time, including habitats for known occurrences of species at risk. The NTF SFM plan includes a total of 4 targets related to species at risk, including #6 (proactive habitat protection targets established in accordance with non-legally binding

14 Page 11 guidelines and best practices). While the processes currently employed by BCTS are consistent with this proactive approach, the approach described in the plan is reliant on CDC making known the location of SAR within the plan area. Planning consideration is focused on critical habitat features that are documented, mapped (GPS/UTM) and field verified. As a result, there is an opportunity to improve the plan text to accurately reflect the proactive approach taken by BCTS to supplement the information obtained from the CDC (e.g., SAR training for staff and contractors, identification of SAR and development of management strategies during block layout and planning, etc.) so that it is clear that this is a DFA-wide expectation. 9. Opportunity for improvement: TKA-2010-OFI-9 Standard/Element(s): CSA Z809-02: Client Procedure: NTF SFM Plan CSA SFM element 1.3 (Genetic Diversity) requires that genetic diversity be conserved by maintaining the variation of genes within species. However, while the SFM plan references 3 indicators (1.1.2, 1.1.3, 1.2.3) and 3 targets (#2, #4,#10) in relation to this element and clearly addresses tree species diversity, it does not describe any linkage to non-tree species genetic diversity explicitly (although target #4 -maintaining existing OGMA area has a linkage to non-tree species genetic diversity). Audit conclusions CSA Z809 Surveillance Audit: Kamloops and Merritt TSAs The audit found that s environmental and sustainable forest management systems for the Kamloops and Merritt TSAs: Were in full conformance with the requirements of the CSA Z809 standard included within the scope of the audit, except where noted otherwise in this report; Continue to be effectively implemented, and; Are sufficient to systematically meet the commitments included within the Company s environmental and SFM policy, provided that the systems continue to be maintained as required. As a result, a decision has been reached by the lead auditor to recommend that BC Timber Sales Kamloops Business Areas operations in the Kamloops and Merritt TSAs continue to be registered to the CSA Z809 standard. CSA Z809 Certification Audit: Lillooet TSA The audit found that BC Timber Sales, Kamloops Business Area s environmental and sustainable forest management systems for the Lillooet TSA: Were in full conformance with the requirements of the CSA Z809 standard included within the scope of the audit, except where noted otherwise in this report;

15 Page 12 Have been effectively implemented, and; Are sufficient to systematically meet the commitments included within the Company s environmental and SFM policy, provided that the systems continue to be maintained as required. As a result, a decision has been reached by the lead auditor to recommend that BC Timber Sales Kamloops Business Areas operations in the Lillooet TSA be registered to the CSA Z809 standard. Once we have received and approved any required corrective action plans, the certification file will be subject to a KPMG Independent Technical Review as required by our accreditation. Provided the Independent Technical Reviewer approves the recommendation, BCTS Kamloops Business will receive a CSA Z809 certificate of registration covering its operations within the Kamloops TSA in approximately 4 weeks from the date of corrective action plan approval. SFI Surveillance Audit: 100 Mile House TSA The audit found that BC Timber Sales, Kamloops Business Area s sustainable forest management system in the 100 Mile House TSA: Was in full conformance with the requirements of the SFI standard included within the scope of the audit, except where noted otherwise in this report; Continues to be effectively implemented, and; Is sufficient to systematically meet the commitments included within the Company s environmental and SFM policies, provided that the system continues to be implemented and maintained as required. As a result, a decision has been reached by the lead auditor to recommend that BC Timber Sales Kamloops Business Area operations in the 100 Mile House TSA continue to be registered to the SFI standard. ISO Surveillance Audit: The audit found that s environmental management system: Was in full conformance with the requirements of the ISO standard included within the scope of the audit, except where noted otherwise in this report; Continues to be effectively implemented, and; Is sufficient to systematically meet the commitments included within the Company s environmental policies, provided that the system continues to be implemented and maintained as required. The results of the ISO surveillance audit will be combined with the results from the upcoming ISO surveillance audits for: (1) the BCTS Corporate Office, and (2) the remaining Business Areas included within the 2010/11 audit sample. Once this work is complete, a multi-site ISO audit report will be prepared that includes the

16 Page 13 lead auditor s recommendation regarding the continued certification of BC Timber Sales to the ISO standard. NB: Our assessment by its nature is a sample and is not intended to be as comprehensive as your internal inspection and auditing procedures. It is possible for nonconforming issues to remain undetected. Our next assessment will verify that your internal inspection and auditing procedures have continued to operate as the primary mechanism to ensure that your environmental and sustainable forest management systems remain effectively implemented and continue to improve. E. Corrective Action Plans Written corrective action plans that are designed to address the root causes of all identified nonconformities are required within 30 days of the date of this report. These will be reviewed by KPMG PRI for adequacy, and either approved or returned for revision. A template to develop the required corrective action plans will be provided to you for this purpose. Please complete the appropriate section of this template and your proposed corrective actions to the KPMG PRI lead auditor for review. F. Focus Areas for Next Audit Visit The following issues/potential concerns have been identified as focus areas for the next audit visit: 1. Completion of action plans developed to address: (1) the findings of this audit, and (2) the applicable open findings from previous CSA Z809 audits of other licensees conducted within the NTF SFM Plan DFA (i.e., those that relate to the SFM plan and the public participation process). In addition, the next audit will also include a follow-up assessment of the status of previously-identified opportunities for improvement to determine if they are still a concern, and if so, whether their significance has increased to the point where they now represent a non-conformity with the requirements of the ISO and/or CSA Z809 standards. 2. Although questionnaires were sent to PAG participants as part of the 2010 Lillooet CSA Z809 certification audit, time limitations during the field portion of the audit prevented the audit team from conducting detailed follow-up interviews with a sample of PAG members from the Lillooet area. The 2011 audit will include a greater focus on soliciting feedback regarding the public participation process from PAG members. 3. The concept of respect for traditional licensee operating areas no longer exists under FRPA. This fact, combined with the issuance of various NRFLs, ongoing industry efforts to meet mill needs in the light of a deteriorating timber resource as a result of the MPB epidemic and a first come, first served MoFR CP approval process has the potential to negatively impact a number of landscape level biodiversity objectives (e.g., patch size targets, amount of harvesting and road disturbance in sensitive watersheds, etc.). (100 Mile)