1. INTERPAL ‘6’ REPORT Western Pallet Association January 21-23

2. AGENDA 1.The European Union Debarking issue for imported Wood Packaging 2.Phase In Requirement for Wood Packaging Imports for NAFTA 3.Movement of recycled/repaired wood packaging ˆ third world producers 4.Petition for changes to ISPM 15 – April 2007 5.EURO Pallet Requirement - Non Standard Penalized Monetarily 6.Movement of Products from Pacific Rim - how is it going to impact the US/CAN pallet industry? 7.Satisfying your need for good Workers

3. EU – Debarking Issue 1.Lobby Issue by the Plastics Industry - IPPC Program to move product worldwide opened the door 2.Lobbying EU Council by FEFPEB was a success and Debarking Issue born

4. IPPC-ISPM 15 Standard 4Debarking statement in the IPPC-ISPM 15 Document Subject to technical justification, countries may require that imported wood packaging material subjected to an approved measure be made from debarked wood and display a mark as shown in Annex II.

5. Debarking Issue 4 EU demanding DB-HT - CONCERN 4 Proof of pest introduction to HT debarked material needed 4 IFQRG – International Forestry Quarantine Research Group – advises UN on scientific issues related to forestry quarantine and the spread of wood pests. 4 Rome – experiments to prove or disprove that pieces of bark as small as 1” square on ISPM 15 SWP could re- infest, harvest and hide quarantined pests. 4 Re-infest – could never happen – pests not interested. – this is what we have been told by scientists – yes or no!

6. IFQRG Findings -Statement: “information collected by Australia indicated that 0.5% of ISPM 15 marked material inspected at the point of entry was infested by organisms of phytosanitary concern.”

7. IFQRG Finding at meeting 4No clear answers 4More questions than answers 1. Size of bark required to interest pests 2.Moisture content 3.HT vs. KD with moisture 20% or less 4.Real world conditions 5.Is this about pest issues or Quality demands

8. New Zealand – Australia Issue Recent trip discussed the debarking issue with NZ and Australian government official – wood packaging companies. 1.Already practices no-bark 2.Extreme measures to meet EU requirements, their largest consumer.

9. The cost 4 Lumber used for export wood packaging will increase at least two grades, subjecting our customers to increased costs. 4 low grade [#3 common, #3] will be utilized for domestic use [USA/CANADA] or disappear 4 KD [20% of less moisture] will be a requirement; therefore all timber will be KD/HT, even hardwood. I have been told that if we KD hardwood, the timber will check and crack, twist and split and will become unworkable and unwanted by wood packaging companies.

10. The Cost 1.Owners of HT chambers, which maintain the moisture and kill quarantined pests, will be forced to re- invest and add the KD option.

11. Testing Must be controlled World Pallet Council 4 Wood Pallet/Packaging Associations must be part of the testing 4 Attend and become a component of all committees controlling the results. 4 Need to control scientists from issuing statements and results that are from sources that has little or no controls.

12. Result timeline 4 IFQRG – chair Dr. Eric Allen of Canada has asked the CWPCA to assist in the study. - request a non-controlled study of SWP. – no lab testing until SWP put through a designated life cycle.

13. If we lose this battle 4 Mills must stop severe optimization of the small log. 4 It will be the mill who must supply the packaging industry with certified debarked material. 4 Wood Packaging companies, unless you utilize saws and use cants, cannot control debarked material. Costly 4 We cannot be expected to breakout lumber lifts and extract those pieces that meet the new ISPM 15 debarking policy. 4 If we lose, the price of lumber will increase 30- 40%.

14. Timeline Saving Grace 4 Dr. Allen, if all studies and testing is completed on time the results will be posted in a document in April 2009. 4Jan 16-17 – EU voted to no ruling until Dec. 31, 2008. 4 we have time to react and fight back but what if HT will re- infest?