This article was originally published on Mongabay News and can be viewed here
In September 2015, a Peruvian cargo ship dropped off 71 shipping containers of rainforest wood on the docks of Houston, Texas. At 3.8 million pounds, the shipment was an ample demonstration of the continued flow of lumber from tropical countries into the Northern Hemisphere; laid out end to end it would have covered “several football fields” and had a retail value of $300,000, the Houston Chronicle reported.
And the wood’s fate shows the criminal practices that still haunt that trade: in early December, American customs officials blocked the import of the shipment, announcing that the wood had been cut illegally and shipped out of Peru on fraudulent permits. Peruvian police carried out further raids in the Amazonian port of Iquitos, resulting in the biggest bust of illegal wood in Peruvian history.
The busts were a black mark for a system intended to marshal the power of markets to protect the world’s forests from destructive logging, among other threats. Since the early 1990s, when attempts to build a system of international law to save the world’s tropical forests collapsed, a union of thousands of civil society, environmental, and corporate groups has turned their hope to the market. The international group they built, the Forest Stewardship Council (FSC), relies on consumer choice to protect the world’s timber market: it certifies operations as environmentally sustainable and socially responsible, with the idea that consumers will pay more for ethically sourced wood.
Over the last twenty years, the FSC has grown into the pre-eminent international forest-products certification body, uniting 30,000 member companies and certifying more than 180 million hectares of forest worldwide — an area bigger than Alaska. (There are many similar certification programs, but they are either very small or generally regarded as having less rigorous standards than the FSC. All together some 439 million hectares of forest are certified under one program or another, nearly 11 percent of the world’s total.)
The FSC’s standards rest on some of the most enlightened forestry practices in the world. In a timber industry blighted by mafia control, environmental destruction, and targeted murder, the FSC logo promises that the forest products that bear it — from logs to plywood to tissue paper — have been produced legally by free, well-compensated laborers, in accordance with environmental best practices. By creating a specific market for ethical wood, the FSC aims to create a world of ethically run and sustainable forests.
But on the ground, it is not clear that the FSC’s regimen has delivered on its promises. That shipment of illegal Peruvian lumber impounded in the Houston docks? And much of the wood confiscated in Peru? According to the Peruvian paper La Republica, it came from an FSC-certified company — Inversiones La Oroza — down an FSC-certified supply chain. Had the Houston shipment not been caught, it would have ended up on the shelf of an American hardware store, stamped with the FSC logo, its price marked up in accordance with its supposedly ethical source.
The Houston seizure is but the latest in a troubling series of cases where FSC-certified forestry operations have turned out not to follow FSC practices — or, in some cases, even the law. According to environmentalist critics, this lack of consistent enforcement mars both the council’s high standards and the real positive effects of its regimen, casting serious doubt on the value of both its imprimatur and market-based solutions as a whole.
A market solution to government inaction
To understand the FSC’s current situation, you have to understand that the group emerged as a response to governmental failure. At the 1992 climate talks in Rio, attempts to craft an international treaty to protect tropical forests wrecked on historic tensions between the Northern and Southern hemispheres. Put broadly: the North wanted the South to stop cutting down the vast belt of forests that circles the equator. But attempts to get the Northern governments to put money into organizational support in return for keeping those forests standing came to nothing, and Rio passed without a forestry agreement.
The FSC was an ingenious solution to this world governmental deadlock: make conservation pay. The council would create a lucrative market for ethical wood, thereby getting consumers, rather than governments, to pay to keep the world’s forests intact.
It started modestly, marketing a luxury “ethical” product to help community- and indigenous-managed logging operations compete with the large industrial businesses then chewing through the world’s forests — something like what the Fair Trade label did for coffee. But throughout the 1990s, the FSC grew dramatically, adding thousands of member companies. By the turn of the millennium, it wasn’t only the world’s leading lumber certification system: many in the environmental NGO world saw it as the best way to protect forests in general.
The system was designed around two ideas. First, that the bulk of those involved in the forestry sector — from indigenous and peasant communities to environmental NGOs to the timber industry itself — shared the goal of keeping the world’s forests productive and free from conflict. Second, that consumers would pay extra to fund the practices that could keep the world’s tropical forests standing.
The FSC became a huge congress for all stakeholders in the forestry sector; its powers shared equally between villagers, environmentalists, and timber companies, as well as between North and South. The result of the congress’ meetings was the FSC’s Principles and Standards: a constitution laying out cutting-edge standards, laboriously agreed upon, that the world’s forestry operations would have to follow if forests and the communities and timber companies that depended on them were to survive. And so that consumers would know for sure that their lumber or paper products were ethical, the FSC created a certification regime. Any wood or paper product bearing its logo promises that no matter where in the world it came from, it lives up to those standards.
It’s hard to say for sure whether this has translated into real change on the ground. There have been no comprehensive studies of the FSC’s overall efficacy in preventing forest loss, though some local studies have shown positive results. For instance, a recent study in Indonesia found that FSC-certified forests had a 5 percent lower rate of forest loss and produced 31 percent less air pollution than noncertified ones. And a report by the Indonesia-based NGO the Center for International Forestry Research found that communities living in and around FSC-certified forests in Central Africa had significantly better living and working conditions, as well as better relations and less conflict with the companies harvesting them, than those in non-FSC forests.
Advocates say that the FSC’s impacts have rippled beyond those companies with an official relationship with the FSC. In 1994, when the organization was founded, the timber industry was one of the world’s greatest drivers of deforestation. It was clear-cutting primary forests and replacing them with fast-growing monocultures of trees for pulp and paper. According to Kerry Cesareo, a forestry advocate with the NGO WWF and a board member of FSC United States, the council’s US arm, the timber industry doesn’t drive deforestation anymore — and that’s thanks to the FSC.
“The expectation of what the norms were as established by FSC raised expectations of the whole forest sector, and [there has] been an overall improvement, a lot more effort to keep illegal wood out and [interest in] knowing where your wood comes from,” Cesareo told Mongabay.
Cesareo has mostly experienced FSC-managed forests in the Northern Hemisphere. To walk in those forests, she said, is to see the benefits to the system. Logging there exerts less of an environmental cost than it once did. “An FSC forest still feels like a real forest,” she said. “There’s much less damage to remaining trees. The streams and other waterways have efficient buffer zones. They leave enough forest left to protect water quality downstream. There’s still birdsong and diverse undergrowth.”
When Cesareo saw this regimen in place in British Columbia’s Clayoquot Sound, home of one of North America’s nastiest logging conflicts, she was amazed to see company surveyors mapping trees of high environmental or indigenous cultural value and taking trees out by cargo helicopter rather than via the cheaper, more damaging method of skidding them out.
The trouble with any certification regime, though, is that its standards are only as good as the people enforcing them. Much of the criticism of the FSC is of the usual right-wing “bad for business” variety familiar from the climate change debate. But the FSC has also drawn criticism from environmentalists — that is, those who generally agree with the conservation mission but disagree with how the FSC is implementing it. Among the common complaints are that the FSC backs carbon trading, which many environmental groups see as pointless and that the council has certified millions of hectares of industrial tree plantations, which many groups see as fundamentally unsustainable.
But one of the ugliest problems, for an agency built around certification, is that companies selling FSC-certified wood or products made from it keep getting caught doing business in a way antithetical to the council’s stated goals. Take the case of the Vietnam Rubber Group, which — according to a report by the human-rights NGO Global Witness — has forcibly evicted communities in Laos and Cambodia from their traditional lands and illegally logged protected forests. Despite this, the FSC certified its products.
It was the same story with products made by Veracel, the Brazilian pulp and wood giant found last year to have planted millions of trees on stolen land. And with Holzindustrie Schweighofer, an Austrian firm linked by the nonprofit Environmental Investigation Agency to illegal logging in Eastern Europe. And with US guitar maker Gibson, which the US Justice Department raided in 2011 for buying illegal rosewood for its guitars.
It is impossible to say how much of the FSC’s caseload is made up of companies like the Vietnam Rubber Group, Veracel, or La Oroza. But critics like Simon Counsell of the London-based Rainforest Foundation UK argue that a body built on certification can only afford so many such scandals.
“In a lot of cases, the wood being sold to members of the public was a lie,” Counsell told Mongabay. “The public was led to believe that it was environmentally sustainable, economically beneficial, and socially responsible. And maybe it was. But that was the problem. You couldn’t know that from the certification.”
Counsell was one of the founding members of the FSC. At first he believed in the value of markets to solve the problems that government regulation had failed to address. But he left the FSC after he came to believe that the organization was terribly compromised, its structure allowing logging companies to use it as a tool for greenwashing their operations. Today he runs FSC Watch, a blog that compiles articles and case studies of supposed FSC failings, and is one of the council’s most vocal critics.
The problem, according to Counsell, was something they inadvertently built into the structure of the council. When he and other NGO and industry groups first set up the FSC, they decided not to issue their own certificates. Instead, they would create a list of standards and authorize third-party companies to certify logging operations on the FSC’s behalf. This is a common method of permitting: when you get certified to scuba dive, for example, you contract an instructor authorized by the international permitting organization, and he or she certifies you.
If the person buying the certification is vested in the results, this sort of regimen can work fine. In the case of diving, for example, you are motivated to pick a good certifier to avoid drowning. But for the FSC, Counsell argues, this was a bad move. The fact that forest-products companies got to contract certification companies directly, and that those companies competed for their business, meant that the early FSC framers had inadvertently created a set of perverse incentives. A certification company known as easy to work with by industry was simply going to get more business.
This created a “race to the bottom,” Counsell said. “The standards remained constant, but what has become apparent is that the interpretation of those standards became extremely lax,” he said. To make matters worse, FSC rules allowed for operations delinquent in some of its standards to be certified based on their stated commitment to improve.
Who certifies the certifiers?
After Global Witness released its report on the Vietnam Rubber Group, the FSC eventually took the strongest possible action — officially disassociating itself from the company. (At least, it did so after a strange runaround where it yanked, then reinstated, Vietnam Rubber Group’s certification.) The council’s critics point out that it isn’t clear how companies like the Vietnam Rubber Group got permitted in the first place, or how many of them may still be producing wood under the FSC logo.
And to Counsell, though booting Vietnam Rubber Group “may be, politically, one of the most important things that the FSC has ever done,” the way in which the council did it points to the larger problem. Because the FSC doesn’t issue its own certificates, it couldn’t simply stop certifying Vietnam Rubber Group. Instead, it could only get rid of the company through the fairly obscure means of “disassociation.” The reason the FSC is “using that mechanism as [a] last desperate measure is because they can’t control the certifiers,” Counsell said.
In theory — as FSC spokespeople are quick to point out — any problems with a certifier should lead to oversight by Accreditation Services International (ASI), the German company charged with certifying the certifiers.
But in practice, this hasn’t happened — even in cases where a certifier has given the FSC imprimatur to operations later found to have broken the law, or there is serious evidence of a pattern of institutional mistakes. The case of Gibson, the guitar maker, shows a particularly dramatic example of this. After their wood was seized, Gibson admitted in court that it had “failed to act” on evidence that the wood it was importing was illegal; the case ended with the US Justice Department seizing the wood and ordering the company to pay $300,000 in fines.
But this wasn’t only Gibson’s mistake. The illegal wood Gibson imported had been certified by a specific company — Rainforest Alliance SmartWood — with which it shared a very close relationship. At the same time that Gibson was importing wood it suspected to be illegal down an FSC-certified supply chain, Gibson’s CEO was on the board of the certification company’s parent organization, the well-known NGO Rainforest Alliance, which is one of the FSC’s founders. Gibson had given the Rainforest Alliance hundreds of thousands of dollars worth of guitars and cash.
None of this — not the illegal wood or the possible conflict of interest — led to an ASI audit of Rainforest Alliance SmartWood, which FSC Watch calls the FSC’s “most prolific” certifier. In fact, ASI only records two audits of Rainforest Alliance in the last six years. Perhaps it should come as no surprise that it was none other than Rainforest Alliance SmartWood that certified La Oroza, the Peruvian logging company later busted for trading in illegal wood.
“No one would get certified if we forced every auditor to audit every part of [a] company,” said Corey Brinkema, the president of FSC United States. Though Brinkema said he had not heard of the Vietnam Rubber Group or La Oroza cases, he emphasized that overall the FSC system was good at balancing all the difficulties inherent in trying to reform the forestry sector.
Forestry companies, Brinkema said, are often very large, spreading across continents or countries. A forestry company that gets FSC-certification for part of their operation has the right to put out FSC-labeled products, but that doesn’t mean that its entire operation has to be FSC-compliant. It might have boutique supply chains that put out FSC-certified wood as well as others that sell conventional wood — as a farm might sell organic and conventional produce.
According to Brinkema, this aspect of the system still leaves the problem of companies getting FSC certification for a small part of their operation and using that to greenwash the rest — despite what he called “egregious activities” like grabbing land from villagers, farming GMO trees, or clearing primary forest for plantations. It is FSC policy to disassociate from entire companies when its subsidiaries do destructive things. But it isn’t the auditors’ job to check on every part of every company. Instead, the FSC ecology relies on third-party groups like Global Witness to make complaints to uncover bad behavior.
This is how many professional licensing boards work. And as many a medical board stuck with complaints against a problem doctor has found, there is a balance between speedy action in removing violators and a fair hearing for those accused of wrongdoing.
“These things sometimes take longer than we’d like,” FSC United States spokesman Brad Kahn told Mongabay. But overall, he said, the ejection of Vietnam Rubber Group is proof that the system works: it may be slow, but that is the price of being an organization built around consensus democracy and due process. Kahn quoted Winston Churchill’s line about democracy being the worst form of government, except for all the rest.
Courting the market
Aside from the certification issue, there is a more practical one: the FSC’s model is built on the idea that companies that follow best forestry practices can make more money. But more than twenty years after the council’s launch, according to FSC United States, FSC-certified products only bring in about 5 percent more than equivalent non-FSC products, tops. Right now, only 4 percent of Americans know what FSC is or care about buying its products.
So the FSC’s goal is expansion. In 2015 FSC International launched a new strategic plan aiming to get 20 percent of the global wood-products market by 2020. To do so, it has a three-point plan. It will tighten its standards and streamline enforcement so that people trust the FSC brand; it will help “increase consumer preference” so there’s more of an incentive for the timber industry to buy in to the system; and it will streamline its internal bureaucracy.
Counsell, the FSC co-founder and critic, argues that the operation needs to think about going in the opposite direction. After all, since there are so few ordinary consumers buying FSC wood, the corporate market is crucial — and the fact that companies can’t trust the FSC to provide them with legal wood (thus avoiding problems with the law) is a potentially crippling problem. (While there is no evidence that corporate clients are moving away from the FSC, a number of prominent American and European NGOs have left the council over disputes about carbon trading or certification.)
“I think salvaging the system is going to require a really different frame of mind than that which has prevailed over [the] last 15 years,” Counsell said. He argues that FSC certificates have become “almost meaningless” as guarantors of legal or ethical wood, and that the council must scale back the number of certificates it offers and focus on quality. He added: “Otherwise they’re probably doomed.”
- Miteva, D.A., Loucks, C.J., Pattanayak, S.K. (2015). Social and Environmental Impacts of Forest Management Certification in Indonesia. PLoS ONE 10(7): e0129675.
- CIFOR (2014). Social impacts of the Forest Stewardship Council certification: An assessment in the Congo basin. Center for International Forestry Research (CIFOR), Bogor, Indonesia.
- Global Witness (2013). Rubber Barrons: How Vietnamese companies and international financiers are driving a land grabbing crisis in Cambodia and Laos. Global Witness, London, UK.