By 2020, FSC plans to double its share in global timber trade

June 14, 2018
Since its establishment in 1993, FSC has issued 33 thousand certificates for timber companies in 120 countries. By 2020, the organization plans to double its share in the global timber trade. The interview of the Director General of FSC Kim Carstensen.

- This year the FSC celebrates its 25th anniversary. How and for what purposes was the company created?

-  Back in the late 80s and early 90sthere was lot of international focus on forest crises. There were big discussions about the destruction of tropical forests in Malaysia, countries in South America. There was a big hope that as part of the general focus on the sustainable development at that time, the forest issue would be also resolved by joint efforts of governments. However, it did not happen. At the United Nations Earth Summit in Rio de Janeiro in 1992 there was an agreement on a climate change convention and a convention on biological diversity. There was also agreement on a convention to combat the desertification and there were many hopes that governments would come together to resolve also the forest crisis. But nothing worked out.

Then in some countries people decided that if governments are not willing or are not able to come together internationally to make rules for how we should manage and protect forests, we need another tool. Maybe a market will be able to do it, they thought. Different organizations set up the Forest Stewardship Council as a market based tool to try and help to protect and maintain the world's forests for the future. So, the objective of the organization was to use a market tool to save economic, social and environmental values of the world's forests.

- Who personally owns the idea of creating a FCS?

- I do not think that it belongs to one person. There were a lot of meetings which involved organizations like WWF, like Greenpeace, Indigenous Peoples' organizations, trade unions and also companies which were concerned about the possibility for them to continue to produce or sell wooden products. So, a group of people with different interests came together and then began to develop the idea of having social, environmental and economic interests connected to responsible forestry work together.

- At the very beginning it was a German organization or was it originally created as an international organization?

- From the very beginning it was completely international organization. The first General Assembly was held in Toronto in Canada. It was decided that the first global office would be set up in Oaxaca, Mexico, with a global mandate.

- What are the main results of the organization in these 25 years?

- First of all, FSC has actually become a success in the market. We have over 33 thousand certificates in our chain of custody for the companies which want to sell or process the products certified by FSC and offer them to the market. These certificates are spread in over 120 countries around the world - it is a very good reach and a wide market access. Another achievement was the development of our principles and criteria - this is actually the definition of what responsible forest management is. There are ten different principles in terms of how we should manage forest with different criteria. But the interesting thing was not just the principles in themselves as many could have done that. The very special and unique thing was the way the principles were agreed, FSC brought together different stakeholders from social interests, trade unions, indigenous peoples and communities together with the environmental organizations like Greenpeace, WWF, local NGOs and with economic interests into one room where they had to agree on what responsible forest management is. And no one of these stakeholders could come and say "we decide it". All had to agree. This is the principal way we still work.

- FCS uses a market-based certification mechanism. Companies have to pay for the audit, and when they receive a certificate, they can sell their products at a higher price. So why does FSC call itself a non-profit organization?

- Well, because we are. This is democratic organization which is owned by its members. We have over a thousand members globally, split into these three groups that I've said before. They are decision makers in the organization. They needed to come together democratically and nothing can be decided unless all three groups agree. They are the ones who set our principles and criteria and our national forest management standards. There are the ones who come together at our General Assembly where we have about 800 people gathering every 3 years to make big decisions about the organization's strategy. The members also elect our Board. It is true that some of our operations are commercial, in the sense that we sell services to companies which want to get a certificate.

- Is this means that FSC earns money?

-  We have a system of fees. There is a service fee that companies pay to us for being certified.  However, that is independent to certification. We ourselves do not certify, that is the role of the certification bodies thereby ensuring that we have independent verifications outside of FSC. We set the rules and then we entrust auditing to independent companies to grant certificates on FSC's behalf. We have about 40 such certification bodies which work around the world. These certification bodies are the only which do audits of companies. If a company wants to be certified, it contacts a certification body, which will then look at the forest and at the operations of the company and decide about the certification in the end of the process

-  Is the market certification mechanism competitive efficient in ensuring responsible use of forests more effective in comparison with state regulation?

- Both are very complimentary of each other. Certification is a voluntary tool for businesses. It can document the performance - environmental or social - to the market. This is important because consumers worldwide are increasingly seeking some kind of documentation for the environmental and social performance of the products they buy. And certification works for those companies which choose to be part of the system. But it does not work for others, which say "no, we don't want to be the part of this system". And on such companies, we certainly do not have any influence. 

Governments work another way, of course. Government can set regulations that are applicable for everybody. And that's also important. So, I think both complement each other. Functioning of the state regulations is, of course, the strongest measure one can have, but I think it is important to have a voluntary tool for others, who can say "ok, but we will definitely document that we are meeting all requirements".

- Does your organization interact with the states in which it is represented?

- We are a market based system and we don't have governments as members. Public state companies can be members of FSC but governments themselves cannot. But it is important for us to work with governments, of course. I have mentioned 10 principles for responsible forest management. The first of these principles is that operations which are certified must be done in accordance with the law, ensuring that companies that are FSC certified comply with national legislation. We accept and respect what the law says. In many countries we have to dialog with governments or many state managed forests that are certified.

-  How did illegal logging in the world change over 25 years?

- The need to be legal is a very important part of our system. Companies and forests that are certified by FSC are required to strengthen the level of legality, because it is a tool to combat illegal logging. However, we don't have any influence on the areas that are not certified and we see many countries where illegal logging is still an issue. Unfortunately, certified operations often have to compete with companies that carry out illegal logging and it’s difficult for them because they are making an effort to comply and improve their performance with added costs. Luckily governments are beginning to take actions in this matter and I hope in the future illegal logging will be reduced.

- How are the standards established?

-  Everything is done by our members. Our ten principles were decided by our members who vote to agree on those principles. These principles need to be relevant at a national level, so they are taken and developed further as national FSC standards. These national standards are developed by groups of members and this is important. These groups of members are always having an equal power across the different interests. So, the social group has as much voting power as the economic and the environmental groups. Each of them has one third of the vote and they each have to agree to the rules that they set. So that's our way of standard development.

- By 2020, the company plans to increase its share in global timber trade to 20% that is almost twice. What specific measures will you take to achieve this goal?

- We want to increase the use of FSC certification among some groups that have not been using it much until now. And in particular we are focusing on what we call "smallholders" or small forest owners. Often, they are families, people who have relatively limited areas of forest and small operations. This is very important in Asia, in West Europe and Latin America. Another big area are tropical forests. Because of governance difficulties, illegal logging and hence problems with competition, certification needs more support to get the level we would like to see. At the moment, according to our analysis, the volume of commercially sold forest products coming from FSC certified forests around the world is somewhere around 15% of global production, going up to 20%. So, we are not so far from 2020.

- In which regions of the world did FSC certification become the most popular in these 25 years?

- I can mention two countries with the most certified forest areas. The largest certified area is Canada, in which we have 54 million hectares of certified forest. It is followed by Russia with 46 million hectares. In some other countries with lesser territory certified forest area is proportionally bigger, in Belarus for instance, or in Poland. We've seen a lot of success in these countries. Overall, we have certified forest in 85 countries around the world driven by a global market. Companies like IKEA and Tetrapak source FSC certified products all over the world.

- In which regions is the FSC progressing at a slow pace?

In regions where governance is limited. For instance, in parts of Africa, the Amazon - in such regions certification is more difficult to achieve due to illegality, corruption and other bad government's practices. Such areas are also difficult with obtaining smaller operations to be certified. Certification needs that you do an effort and that you document it. A company with a big operation can document certification much easier than a company with a smaller operation. However, we are working on solving these problems by increasing our efforts in Africa, Amazon and other regions. And we see progress there now.

- And can the FСS in any way influence the governments in these countries?

- I would not call it influencing governments. We collaborate with governments, for instance, in Peru. One thing that we are doing in Peru is to see if we can work with the government to help companies with certified operations. The government would decrease the taxes that it claims from certified operations. Governments do not obtain any income in the form of taxes from illegal operations. But they can ensure a level of income from legal operations, so it is an incentive for these companies when the government reduces fiscal pressure while guaranteeing itself a source of stable income. We are also working with governments in Africa. In Congo basin we have 6-7 million hectares of certified forests. We have a lot of collaboration and discussions with the governments of Republic of Congo, Gabon, Cameroon about how we can work together to ensure that there will be sustainable forest management in these countries.

- How many affiliated companies does FSC have and what they do?

- FSC AC, based in Mexico manages the membership of the whole organization. It is our mother organization, which owns the brand and determines the direction of the organization and the definition of our principles and criteria. Under that FSC AC we have the subsidiary units. One of them is FSC Global Development which provides the services to certificate holders in terms of market and trade development - all of these things are managed by this company which is an important taxpayer in Germany. We have another not for profit organization - FSC International Center, which manages the rules, principles and criteria. It is the organization of technical experts. Thus, the mother organization manages the membership and the membership's discussions. In Germany one company provides the services - FSC Global Development - and the other one defines and maintains the rules. In addition, we own an independent organization called ASI (Accreditation Services International). It manages the system of auditors. It oversees the quality of audits and checks whether the auditors have the qualifications to make an audit on behalf of the organization.

- How does FSC affect the reduction of tropical forests?

- In the area of tropical forests which are certified, and which is about 20 million hectares around the world, we see a lot of positive benefits like a decrease of bad forest management and far less deforestation. For example, from a biodiversity perspective, the presence of important jaguar populations has been recently documented within FSC certified operations in Central and South America. We also see very positive social aspects of independent research from Center for International Forestry Research. This Center did a study of the social conditions of the people living in or around FSC certified forests in the Congo basin. They found that no matter what social indicators they looked at, living conditions were better in FSC certified operations than in non-FSC certified forests. Researchers looked at such indicators like access to clean water, sanitation, general health, education, etc. Everything was in favor of FSC certified forests.

- What proportion of all tropical forests is currently certified?

- About 10% of the FSC certified forests are natural forests in the Tropics. That’s about 20 million hectares, which unfortunately is still quite a small proportion of the total forest area in the Tropics. In addition to that there are also plantations certified in tropical countries, which bring very important volumes of forest products to global markets. 

- How does the FSC intend to increase the share of certified tropical forests until 2020?

-  We work with our partners in Brazil, Indonesia and Congo to develop new FSC standards for these countries that make it more possible to be certified, and we work with partners in Europe or in North America or in Japan to increase market interest as well as market tools to help certified products enter the market.  We hope that this will lead to improvements. We also work with indigenous peoples because in many of these countries there are a lot of natural forests and indigenous peoples have a right to those forests. We work with indigenous peoples’ organizations from all over the world to make sure that FSC is a useful tool for them in terms of the management of a forest and also in terms of the market access.

- In 2014, Greenpeace accused FSC that certified companies in destruction of the Russian taiga, in particular in the Dvina forest. How valid are these charges?

- We have had long discussions about the protection of intact forest landscapes, in particular in the forests in Archangelsk and also in Far East and in Siberia. In 2014 there was actually a decision made by our members and as a result now we have rules for the protection of intact forests. These rules are now in place globally and provide a moratorium that protects at least 80% of these intact landscapes inside the forests certified by FSC. In Russia, there is about 3.7 million hectares of intact forests inside FSC certified areas. Using the system of moratoria in FSC, the certified forest managing companies have agreed to set aside 1.2 million hectares of intact forest landscapes for protection.

We have had discussions with the government of Archangelsk together with some of the forest management companies and groups like WWF or Greenpeace on how this idea of moratoria can be strengthened. It would be ideal, if these moved beyond just being commitments by the certified companies to becoming protected areas declared by government, which of course gives stronger protection. But this is something we cannot just do ourselves, we need to work with partners and in particular with government. I was therefore very happy to see the recent announcement by two large forest companies in Arkhangelsk together with Greenpeace and WWF that they agree on the establishment of a large protected area in the Dvinskoy forest. This is a very important development, and I believe FSC certification has played a major role in making it possible.

- Is this means that Greenpeace's accusations against your organization are unfair?

- Greenpeace is demanding more protection. In my understanding Greenpeace would like to stop the logging of intact landscapes, and this goes further than our rules. But we agree on the need to establish new protected areas and as we have seen in Arkhangelsk, there are good initiatives under way that we actually help make happen.

- The incident with the American company Lumber Liquidators, who pleaded guilty to smuggling timber from the forest in the Far East of Russia, inhabited by the Amur tiger, also became famous. The main supplier of this timber was the Chinese company Xingjia, which conducted the certification of FSC. A similar situation occurred in Peru. Can these incidents be attributed to the imperfection of the certification mechanism?

- I would like to say the other way around. The fact is that these incidents are a sign that the system works. We have fifteen hundred forest management certifications and 33 thousand chain of custody certificates worldwide. Of course, there are mistakes, there are people who cheat or try to avoid our rules. But we have a very elaborate system of managing this. First, the certificates get regularly checked and audited.  If there are irregularities detected and these are not addressed, the certificates are suspended. On our website you can consult our public data base of all the certificates that have been issued worldwide.  There are 17 pages of suspended certificates. 17 pages account for about 800-900 certificates, which is a significant number of suspended certificates.  We also receive and process complaints from NGOs or individuals or other companies who detect irregularities. And we have a system which studies these complaints. If some violations are confirmed, we suspend or terminate the certificate.

- Does FSC support accused companies that it certifies?

- We have a dispute system that looks at how valid complaints are. If there is enough evidence,we take action against a company. But of course, in the process we do check whether the complaint is valid or not. We have many complaints that we find not valid. In these cases we will support the companies, communicate with them and maintain their certificate.

- How often does the FSC suspend certificates and in what cases does it happen?

- I've mentioned before that we have 800-900 suspended certificates. As part of the audit process or as part of a complaint management process, if we find out that the certificate is not managed well and does not fulfill all our rules, quite often we suspend or terminate it. We also have a specific policy which we call "the policy for association". This is the policy that allows not to associate with the companies which we think create or have significant reputational problems. For example we disassociated from the company Asia Pulp and Paper, because it established plantations destroying rainforests for many years. As a result of this, we witnessed a high level of forest destruction and this is contrary to our principles. Recently we disassociated with the Schweighofer Group from Austria, which is operating in Romania, because we had received a complaint against it. After closely investigating the complaint, we found sufficient evidence to conclude that the company had been involved with illegal timber in Romania. A similar situation was with Vietnam Rubber Group (VRG), because this state-owned entity illegally destroyed thousands of acres of forests for rubber plantations in Cambodia. If one does something unacceptable under our rules then we will not be associated at all.

- Are there cases when logging companies get FSC certification for work in one forest, and then use it to work in other forests, without taking into account the ecological compatibility or legality?

- They cannot do that. A certificate is tied to one specific location - big or small - but you cannot use the certificate for somewhere else. This is completely against our rules, and if someone will try to do that, we will immediately terminate the certificate.

- How does the FSC secretariat supervise the certification bodies that are responsible for issuing certificates on behalf of FSC? How well does this control system work?

- They are controlled by ASI, which is independent of us and has the task of authorizing through accreditation the certification bodies and then to oversee their performance. Each of these bodies are checked annually, including their audit work. Also ASI has a system of incidents being reported. So, if a person goes to a certified forest and sees irregularities in the way it is managed, this can be reported as an incident to ASI. And they will check it in the next audit or earlier if it would be a major incident. 

- How to prevent possible errors in the audit?

- Of course, there may be errors, as in any system. Recently we investigated allegations that an auditor had been bribed by a company. We immediately started an investigation to find out whether the complaint had been correct or not. In this case it was not valid, but if the suspicions had been confirmed, we would have suspended the certificate immediately.

- What is an investigation? How does it happen?

- It depends on each specific case. For instance, if somebody says "I believe that this certificate was given on a wrong base, and it had been done because of bribing of the auditor", we go to talk to the auditors, to the company and to all involved people. We also look at the audit report and if we find something strange, we look at all the audit reports. If we find there are some issues, we try to check the whole system, and a financial auditor goes and looks at these issues.

- May an accused company appeal the decision of a certification body?

- Yes it is possible. Appeals will be looked at first by the certification body, but if the complainant is still not satisfied, the appeal will end up with ASI, which can decide. In final instance these appeals and complaints can end up with FSC.

-  Critics of FSC note that the standards of the organization are not strict enough. They also note that the organization cannot influence illegal land use change. How would you comment on this?

- Our standards are always agreed in a compromise decision between the social, environmental and economic interests. Not all of our stakeholders will be fully satisfied. Environmental organizations often feel that their demands are not sufficiently met, and the same is true of social groups. Therefore, there will always be someone who thinks that our system is not strict enough. On the other hand, there will always be those who consider our rules to be too strict, and these will often be the economic interests. All sides have to concede to a certain extent. It is very important that the FSC system, its rules and standards reflect political and technical properties of the different groups which need to come together to agree them.

- How do you see FSC in 5 years?

- Based on our global plan, we will move forward in improving our system for small forest managers and for tropical forests. Through doing that, we will see market increase in the level of certification. And at the same time, we will have become much better in showing the impact of certification. We are in the process of increasing transparency by sharing maps and much more available information about the performance of certified areas. We are going to improve the digitization of our system.


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