Annex I: Glossary

Claim	A challenge, originating from a purchaser, disputing the conditions under which a supplier’s shipment was received. Sources of complaint can include; timing of delivery, unacceptability of quality, unacceptability of grade and species distribution, and variance between invoice and contracted price.
Conversion Return	The monetary gains that arise when converting a resource (e.g. forests) into sellable end products (e.g. wood). It is normally distributed to owners (as stumpage payments) and to those factors of production that contributed to the "conversion" activities (as dividends, wages and taxes).
Factor of Production	A term used in economics to describe the inputs (financial capital, equipment, buildings, labour or land) to production activities. One distinguishing characteristic amongst factors of production is their ‘ownership’ and the perceptions of what constitutes a fair distribution of the gains or earnings (profits, wages, dividends, etc.) that arise from their respective use.
Horizontal Integration	Extending a production process by adding more of an already installed level of capacity. Adding a second primary saw to an already installed one is an example of horizontal integration.
Initial Resource Endowment	The geographic distribution of resources amongst populations. Local areas, regions and nations can be either resource rich or resource poor.
Macro-economics	Activities and instruments meant to support the achievement of government’s economic, social and political objectives. The State has the largest role for direct intervention in these arrangements - though not commonly independently of other social actors. Macro economic issues include fiscal and monetary policy, labour and business codes, trade and currency regulations, taxes and excise etc.
Micro-economics	Economics related to production activities. Commonly referred to as the economics of the firm. Micro-economic issues include production technology and costs, efficiency, product and market development, organisation development and management, etc.
Primary sector	The participants, infrastructure, and activities directed towards the establishment of forest crops, their harvest, and the transport of roundwood to their point of subsequent conversion (manufacture) into wood products, or, their shipment as roundwood exports.
Private sector	That segment of society distinguished by its collective goal of maximising their return (profits) from the application of their capital and land to commercial activities.
Secondary sector	The manufacture of wood, paper and related products from roundwood.
Stakeholder	An individual or group that has an interest in the decision, action or status of an outcome. The outcome may be considered either positive or negative depending upon the viewpoint of the stakeholder.
Stumpage	The price paid by a harvester to the owner of a forest for the volumes harvested. Historically it was calculated as a given amount per "stump" multiplied by the number of stumps left after logging. Today a wide range of sophisticated methodologies may be used – though most are based upon a "conversion return" principle. (Initial usage originates from western North America.)
Tenure	An operational and administrative arrangement for assigning or user rights to an individual or group or an incorporated entity. Tenures may be legally formalised and documented or they may be conventionally accepted as ‘customary’ or ‘traditional’. Depending upon the country each form may be accepted as "legitimate" and defendable through legal processes.
Vertical Integration	Adding an earlier (background integration) or later (forward integration) phase of production that is not currently part of an enterprise’s sequence of operations. Adding remanufacturing, finger-jointing, planing and sanding units, or furniture manufacturing to primary manufacturing are examples of forward vertical integration. Adding log transport or saw-blade manufacturing would be examples of backward integration for the same mill.