Are you confused yet? The phytosanitary issue for solid wood packaging has had more twists and turns than a scary suspense movie. And as the compliance deadlines for NAFTA countries has come and gone, the United States, Canada and Mexico are delaying strict enforcement of the new voluntary standard, known as ISPM-15, for at least a few more months. The reason is simple – importers are not ready to comply and the NAFTA region doesn’t want to hamper trade just to stop a few wood pests.
International governments are trying to balance security needs, plant health concerns and the desire to avoid any major trade disruptions. This is a tough task even under the best conditions.
According to William (Bill) Aley, a senior import specialist with Animal Plant Health Inspection Service (APHIS), the U.S. government estimated that as of July 70% of the packaging coming into the country was not in compliance with ISPM-15. This fact made it impossible to begin strict enforcement without jeopardizing the free flow of international trade.
The NAFTA’s region official adoption date for ISPM-15 was September 16, 2005. But the U.S. government has pushed for a phased in enforcement process. Canada and Mexico appear to be harmonizing their enforcement plans with what the U.S. does since it is such a major part of total trade in the region. The U.S. government started to require ISPM-15 compliance on September 16, 2005 for all solid wood packaging material, especially pallets, crates and dunnage. However, it is not going to actually reject non-compliant packaging until next year. Pallet and crates will be rejected starting February 1, 2006. Dunnage, which constitutes a greater percentage of the infested packaging, will not undergo strict enforcement until July 5, 2006. Shippers that send non-compliant packaging will be notified of the regulations and their breech of them.
While it is physically impossible for ports to inspect every piece of packaging, the U.S. Customs & Border Protection (CBP) will inspect as many shipments as possible. Aley estimated that 80,000 shipments per month are inspected. Authorities will be looking for official marks as well as any sign of infestation. Bore holes, wood residue left as pests burrow into the wood, and live pests are the most common indicators of a problem. Some packaging even will have little piles of sawdust on them that have been left by pests.
Aley said that loose pieces of wood or dunnage tend to be the biggest source of quarantine pests not pallets or crates. Once the United States starts rejecting non-compliant packaging, importers will have to ship it elsewhere because the CBP will not allow treatment at the port of entry. While the packaging does not have to be shipped back to the country it came from, it will not be allowed into the United States. Non-compliant packaging also jeopardizes the cargo on it. At the discretion of the port director, the CBP may allow the non-compliant packaging to be separated from the accompanying merchandise. In some cases this will not be possible or the port may not have time or manpower to handle the hassle, thus the entire load would be rejected in that situation. The decision about whether or not to allow the load to be offloaded onto another packaging is at the complete discretion of the port director. All expenses related to the movement, inspection, separation, safeguarding, storage, and ultimate disposition of non-compliant wood packing material (WPM) are at the expense of the importer or party of interest.
Some WPM is exempted from the new regulations. This includes the following: manufactured wood materials, loose wood packing materials (defined as excelsior [wood wool], sawdust, and wood shavings, produced as a result of sawing or shaving wood into small, slender, and curved pieces), and pieces of wood that are less than 6 mm thick in any dimension.
What about Canada, eh?
Because the U.S. and Canada share a contiguous forest border and have very similar forest ecosystems and pest enforcement policies, both countries have decided to exempt packaging coming from the other. Packaging crossing the U.S./Canadian border does not have to be ISPM-15 compliant. Mexico, even though it is a NAFTA region country, will be treated just like any other foreign country.
The actual language of the U.S. code calls for the WPM to be made from either Canadian origin and/or U.S. origin wood. This has raised some concerns because both countries use wood for WPM that come from foreign sources. For example, some U.S. pallet companies use Eucalyptus from South America. Since these pallets have some foreign wood could they travel back and forth across the U.S./Canadian border without having to be ISPM-15 compliant? Do U.S. or Canadian pallet producers have to show the chain of custody for that pallet or is it just assumed that a pallet coming from either country is OK to ship across the U.S./Canadian border?
Aley said, "If wood packaging material meets the entry requirements of Canada, it is OK to enter the USA. Once packaging is in either country, the assumption is that it entered on legal basis unless you can show otherwise." WPM coming from Canada may still be inspected at a port.
The only requirement for WPM entering the USA from Canada is a declaration that it is a product of Canada. This could be a simple statement declaration on a bill of lading, an import declaration form, etc. Unlike the ISPM-15 programs, there is no requirement for a mark, an official certification program, proof of chain of custody, etc. Aley said that once a product is in U.S. circulation then it is considered by the government to be a product of the USA.
Canada doesn’t require any paperwork at all for shipments across the U.S./Canadian border. Trevor Yu of the Canadian Food Inspection Agency confirmed that there is no declaration required for WPM coming into Canada from the USA. He said that the NAFTA region countries have been working together to harmonize implementation schedules and that Canada will follow a similar enforcement approach to what the U.S. government has announced.
The U.S. government has grandfathered in all wine crates for vintage years preceding 2006. This means that wine crates for any wine with a vintage year through 2005 are exempt from treatment and marking requirements.
Articles of wood that are manufactured to transport a specific non-regulated commodity (for example, fuel gauges, armaments, etc.) are not considered WPM and are not required to be treated and marked.
WPM that are part of any bundle of imported lumber are excepted from the rule. Other WPM used in the transport of bundled lumber (for example, pallets or planks) are not exempted and are regulated WPM.
Even if WPM is properly marked, if bugs or signs of infestation are found, the protocol associated with safeguarding or eradication of the pest threat will supersede WPM enforcement. Once a pest threat has been eliminated, the WPM enforcement will be applied. This means that the infested packaging will be quarantined, treated at the port and then shipped out of the U.S. Infested WPM will not be allowed entry even after it has been treated.
Is Removing Bark Really Necessary?
At the recent Interpal meeting in Canada, it became clear that the USA and Europe are far apart on the issue of debarking WPM. European pallet producers and governments are concerned about re-infestation. Most of the pallets in Europe are made from debarked wood. So for them, there is no extra processing involved. In North America, pallets frequently are made from lumber with bark on it.
European delegates at Interpal, a global meeting of leading pallet companies, made a strong case for removing bark to prevent re-infestation and overall improve the appearance of WPM to customers. U.S. representatives led by the leaders of the National Wooden Pallet & Container Association (NWPCA) effectively argued that a debarking requirement should only be enacted if sound science shows a real need for such a measure. NWPCA leaders questioned the validity of previous tests because they did not reflect real world conditions. These experiments merely showed that re-infestation could occur if treated packaging was intensively subjected to pests, which does not tend to happen in most situations. The NWPCA has begun a study to demonstrate the high cost of requiring strict bark removal in the U.S. market. Bruce Scholnick, the president of the NWPCA, said that a debarking requirement would substantially increase the cost of treatment in the USA.
The questions remains, "Are the Europeans pushing for a treatment level that has no real scientific justification?" While both heat treatment and fumigation effectively kill pests present at the time, neither method prevents a pest from later attacking WPM. Scientists from around the world are doing research right now to discover exactly how much of a problem bark could cause in terms of re-infestation.
The International Forestry Quarantine Research Group (IFQRG) is a scientific review panel that is studying the debarking issue now and will make recommendations to the government officials responsible for updating ISPM-15. IFQRG is scheduled to have formal research results to report at its meeting in November. Preliminary results will likely be available sometime in October. These results will be considered when international government leaders meet in the spring of 2006 to discuss any changes to current world standards.
Bill Snell of APHIS said that any changes that occur probably wouldn’t be incorporated into the standard right away because there is a lengthy review process. He added that it really is all about what the science shows, and at
this point, he has not seen any scientific data that would backup the need for
a debarking requirement. Snell went on to say that Europe is making overtures that it intends to require debarking
anyway. At that point, the U.S. government could take the issue to the World Trade Organization or try other trade
negotiation tactics.
Hoping to avoid a major trade dispute, the European Union agreed when it officially adopted ISPM-15 to delay the debarking requirement for one year until March 1, 2006. This was designed to give the EU time to develop additional scientific justification for the requirement. The EU has already backed down once, and it will be interesting to see what happens as scientists from around the world start to weigh in on the issue.
Phytosanitary Issue –
Good or Bad for the WPM Industry?
Some people claim the phytosanitary issue has opened the door to increased use of alternative materials. Suppliers of wood composite, corrugated and plastic pallets claim that they are getting a lot of business from customers that just want to avoid any headaches with WPM, especially for export shipments. While I have yet to see any hard numbers on the issue, it does make sense that for high end items, some shippers might choose alternatives to wood. But when you consider the various pros and cons, a treated and certified wood pallet is in many cases still the most economical and strongest shipping option on the market.
Others claim that the issue has elevated the status of the wooden pallet beyond just a commodity. Customers need quality suppliers who know the regulations. They can’t just buy a load from a guy operating out of a shed making pallets with a hammer and some nails. Treatment services must be done by a licensed company, and the barrier to entry can be kind of high in terms of equipment investment, paperwork and just keeping up with the regulations.
For more information about the U.S. procedures, please visit the following internet web site at http://www.customs.ustreas.gov/xp/cgov/import/commercial_enforcement/wpm/.
