Monitoring Organisations

What is a Monitoring Organisation?

The role of monitoring organisations is to maintain and regularly evaluate due diligence systems, which will be available to operators to use. Monitoring organisations also need to ensure that operators apply the due diligence systems correctly. 

The use of a monitoring organisation is optional and operators can choose to implement their own due diligence system.

Monitoring organisations shall be legally established within the EU and will be subject to checks. They are yet to be established in the UK.

Role of monitoring organisations

A monitoring organisation shall:

1. maintain and regularly evaluate a due diligence system and grant operators the right to use it;
2. verify the proper use of its due diligence system by such operators;
3. take appropriate action in the event of failure by an operator to properly use its due diligence system, including notification of competent authorities in the event of significant or repeated failure by the operator.

Checks on monitoring organisations

Monitoring organisations will be checked by the competent authorities at least once every two years to verify that the monitoring organisations continue to fulfil its functions and comply with the requirements. Checks may also be carried out when the competent authority of the Member State is in possession of relevant information, including substantiated concerns from third parties or when it has detected shortcomings in the implementation of the due diligence system established by a monitoring organisation.

If a competent authority determines that a monitoring organisation either no longer fulfils the functions or no longer complies with the requirements, it shall without delay inform the Commission.

Delegated Regulation

The Commission adopted Commission Delegated Regulation of 23.2.2012 on the procedural rules for the recognition and withdrawal of recognition of monitoring organisations as provided for in Regulation (EU) No 995/2010 of the European Parliament and of the Council laying down the obligations of operators who place timber and timber products on the market.

How do we become a Monitoring Organisation?

Any entity legally established in the EU may submit to the Commission an application to be recognised as a monitoring organisation.

The  entity  shall  submit  the  application  in  any  of  the  official languages  of  the EU together  with  the  documents  listed  in the  Annex (please refer to the text of the regulation for details).

To be recognised as a monitoring organisation, an applicant shall demonstrate that it fulfils all requirements set out below.

What are the requirements of a Monitoring Organisation?

Legal personality and legal establishment within the Union

Where an applicant is legally established in more than one Member State, it shall provide information about its registered office, central administration or principal place of business within the EU as well as about all its agencies, branches or subsidiaries set up in the territory of any Member State. The applicant shall also declare in which Member States it intends to provide services.

Appropriate expertise

An applicant shall meet the following minimum criteria:

1. formal professional training in a discipline relevant to the functions of a monitoring organisation;
   
2. for senior technical positions, at least five years of professional experience in function related to the functions of a monitoring organisation.

Capacity to exercise function as a monitoring organisation

An  applicant  shall  demonstrate  that  it  has  in  place  all  of the  following:

1. an organisational structure that ensures a proper exercise of the functions of a monitoring organisation;
2. a due diligence system to be made available to and used by operators;
3. policies and procedures that allow for the evaluation and improvement of the due diligence system;
4. procedures and processes to verify the proper use of its due diligence system by operators;
5. procedures for corrective actions to be taken in a case of a failure by an operator to properly use its due   diligence system.

An  applicant shall  demonstrate  that  it  has  financial  and  technical  capacity  to exercise  the  functions  of  a  monitoring  organisation.

Absence of conflict of interest

An applicant shall be organised so as to safeguard the objectivity and impartiality of its activities.

An applicant shall identify, analyse and maintain records documenting risks of conflict of interest arising as a result of it exercising functions as a monitoring organisation, including any conflicts arising from its relationships with related bodies or subcontractors.

Where a risk of a conflict of interest has been identified the applicant shall have in place written policies and procedures to avoid conflicts of interest at organisational and individual level. The written policies and procedures shall be maintained and implemented.  Those policies and procedures may include third party audits.

Is a list of recognised Monitoring Organisations available?

The EC is currently in the process of recognising Monitoring Organisations. A list of recognised MOs will be published at EC website when it is available. CPET will provide this information as soon as it becomes available.