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Forest certification and the green economy

M.K. Muthoo

More investment in orest certification is a soft policy market access through the economically certification could pay dividends instrument that seeks to use assess- viable, environmentally appropriate and in the quest for a more ments of , the socially beneficial management of , prosperous, sustainable world. Fverification of legality, chains of custody, and related renewable resources. ecolabelling and trademarks to promote Forest certification, therefore, can be the sustainable management, conservation a pragmatic instrument for harnessing and development of forests in a holistic market forces, public opinion and civil manner without compromising the rights, The ultimate objective of forest resources or requirements of present and certification should be to Maharaj K. Muthoo is President of the future generations. It aims to encourage "improve the quality of life without Roman Forum, Rome. ethical trade and commerce and improve using up an unsustainable share of the planet’s resources" FAO/M. MUGISHAFAO/M.

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society in support of sustainable forest to a greener economy. Certification can requirements and management systems. management (SFM). also help ensure that forests are not only Standards-setting is a multi-faceted pro- SFM systems supported by forest certi- well-managed but also properly valued cess involving the custodians of the forest fication conform with the green economy by markets. Healthy forests and their sus- and related resources, owners, workers and paradigm because they appropriately tainable management, assured by forest managers, local communities and societ- balance the social, economic and envi- certification, can contribute to the goals ies, retailers and consumers, producers ronmental dimensions of development. of the multilateral environmental agree- and processors, business, and civil-society Forest certification (and associated ments and to poverty alleviation and organizations. Harmonized standards are chain-of-custody – CoC – certification) green growth. required to bring synergy between the is developing into a prerequisite for public The ultimate objective of forest certifica- various stakeholders and their diverse procurement and market access, and has tion should be eco-affluence – that is, to help expectations regarding economic return, become associated with ethical trade and make it “possible to immensely improve the environment and social justice. The social responsibility. the quality of life without increasing green- accreditation of certification bodies is Certification can play an important role house gases or using up an unsustainable designed to ensure the reliability and con- in combating climate change and sustain- share of the planet’s resources” (Martin, sistency of the assessments they undertake. ing the livelihoods of forest-dependent 2011). Forest certification systems must Forest certification systems require people. It can ensure the maintenance of continue to evolve, to think beyond Rio+20 periodic monitoring and assessment for ecologically important forests as safety and to incorporate pertinent Millennium improving and adapting the principles, nets that conserve gene pools and sup- Development Goals and the adaptation to criteria, indicators and standards for cer- port food security and as sustainable and mitigation of climate change as explicit tifying forest management units (FMUs): sinks for capturing and storing carbon criteria. A ten-point forest certification certification could lose its effectiveness dioxide. It can help ensure the provision charter has been drafted accordingly and if its requirements are unreasonable or if of forest as a renewable carbon- was showcased at Rio+20, at which FAO’s it serves, for example, only the boutique neutral energy source and as a substitute side-event had the theme “forest end of the market (Muthoo, 2001). It could for carbon-intensive building materials, certification: a paradigm shift in a green also lose credibility if its demands are such as steel and cement, thereby lower- economy”. But spreading the influence of insufficiently rigorous, or if its criteria are ing the carbon footprint and contributing certification, especially in the tropics, will stagnant in the face of changing conditions. need more investment. Compliance with standards for SFM Community (panchayat) forest, dominated certification requires, among other by chir pine (Pinus roxburghii), India. A BROAD TOOL things, recording forest flora and fauna, The international donor community should consider greatly increasing investment in Forest certification is a third-party pro- monitoring ecologically important forest promoting forest certification and related cess of standards-setting for performance areas, deploying reduced impact , ecolabelling in the global South FAO/K. BISHT

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Interest in certification is growing in China, potentially affecting millions of forest farmers, such as these members of a forest farmer cooperative FAO/E. MULLER

building public–private partnerships, and forest certification should thus be at the between 2010 and 2011. More than the equitable sharing of benefits among top of the sustainability agenda. 30 percent of the world’s industrial stakeholders. If it brings tangible benefits roundwood supply is now sourced from to local communities and certified FMUs, GLOBAL REACH certified forests, and the certification of forest certification can be an effective tool More than 120 countries have some form related products, including paper, pulp, for promoting sustainable livelihoods, safe- of forest certification, many with their panels and , is also increasing. guarding the biodiversity of ecosystems, own national systems. There are two The number of CoC certifications rose combating climate change and reducing global forest certification schemes: the by 88 percent between 2009 and 2010 carbon emissions through avoided defor- Forest Stewardship Council (FSC), and (UNECE, 2010), with 3 000 new certifi- estation and forest degradation (REDD+).1 the Programme for the Endorsement of cates issued in 2011. Forest certification can serve as a back- Forest Certification (PEFC). These two There is increasing interest in develop- stop for the verification and monitoring of schemes involve a total of 31 263 CoC ing national forest certification standards. projects on REDD+ and payments for eco- certifications and 149 million hectares Australia, Brazil, Chile, Indonesia and system services (PES), which would trans- (ha) and 245 million ha of certified forests, Malaysia, among others, already have late into opportunities for new resources respectively (FSC, 2012; PEFC, 2012). The operational national forest certification for the conservation and restoration of FSC provides centralized accreditation for standards, and Gabon recently completed forests (Muthoo, 2012). Mainstreaming its certification, while the PEFC supports a process to develop its national forest recognized national accreditation bodies. certification scheme. China has initiated In some countries, forests may be certi- intensive work on a national forest cer- 1 REDD+ is being developed to encourage fied by both the FSC and a PEFC affiliate, tification scheme and related standards. developing countries to contribute to climate change mitigation through the such as the Sustainable Forestry Initiative China is a huge timber importer and the following activities: reducing emissions in the United States of America. world’s largest exporter of secondary from and forest degradation; The area of certified forest expanded processed products, with a value the conservation of forest carbon stocks; the sustainable management of forests; and the by 8 percent between 2009 and 2010 estimated at around US$17 billion per year enhancement of forest carbon stocks. (UNECE, 2010) and by 12.6 percent (ITTO, 2010). There has been an upsurge

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A red ironwood (Lophira alata) log marked and tagged for chain-of-custody purposes in Zogabli, Grand Bassa County, Liberia. Worldwide, the number of chain-of-custody certifications rose by 88 percent between 2009 and 2010

(collectively referred to as FLEGT); green economy procurement policies; REDD+ potential for and con- servation; the scope for eco-development and PES, including water and renewable energy; and the need to certify farm for- estry and planted and smallholder and community forests. China has announced that all its exporters of wood products must have CoC certificates by 2020. This will be a huge driver of CoC growth, as will the European Union’s due diligence requirements for imports. Barely five percent of certified forests ebedys worldwide is in the global South. Neverthe-

FAO/A. L FAO/A. less, the extent of certified forest there is expanding – from 6.4 million ha in 2002 in FSC and PEFC CoC certifications in by the global South, such as plywood and to over 20 million ha towards the end of China, which will lead to greater demand veneers, have grown threefold in the past the decade (UNECE, 2010); the area of and reward for its products 30 years. certified forest in the main tropical for- worldwide. India’s imports are skyrocket- Removing barriers to the market entry est countries of Africa more than tripled ing, having doubled between 2005–06 and of forest products from the global South between 2005 and 2010, to 4.63 million 2010–11, to about US$2 billion, with a can be an ingredient in poverty-reduction ha (Blaser et al., 2011). Almost 80 percent growing gap between demand and supply strategies. Forest certification must take of certified forests in the global South are (Muthoo, 2006; 2011). The next section up this issue and strengthen the global natural forests, and a study of 123 evalu- presents a synopsis of the situation in the South’s role in international trade, given ations in 24 tropical countries found that global South,2 where forest certification its inherent comparative advantage, as forest management improves soon after is not as widespread as it is in Europe, demonstrated by tropical timber exports the forest certification process is launched elsewhere in the global North, and in from Cameroon, China, Gabon, Ghana, (Peña-Claros, Blommerde and Bongers, emerging economies. Guatemala, Malaysia and Viet Nam, and 2009). This is because the process requires, products such as pulp, paper, among other things, upfront engagement THE GLOBAL SOUTH particleboard and medium-density with forest stakeholders and the baseline The global is economically fibreboard from Brazil and China. This assessment and monitoring of biodiversity, important to the global South. The annual recognition can contribute to green jobs productivity and forest cover. turnover of wood products, including pulp and the generation of income, to SFM by Despite considerable potential to and paper, exceeded US$200 billion in preventing the degradation of biodiversity- expand the area of certified forest in the 2007, with developing countries account- rich natural forests, and to ethical trade, by global South, there are many obstacles, ing for over 17 percent of the trade. The preventing . All these out- including limited domestic demand for value of annual tropical timber exports was comes are in the interests of all countries. certified products, the incompatibility of over US$20 billion (Blaser et al., 2011). Many countries in the global South are certification standards with local legal The production and export of products encouraging forest certification and label- frameworks, weak governance, and bar- ling to increase the market acceptance of riers to adoption by small landholders 2 The term ‘global North’ is used to refer to their products worldwide. They are moti- and forest communities, especially those wealthy, or ‘developed’, countries, and is not vated by ongoing and emerging issues without clear title or tenure. Moreover, the wholly defined by geography. ‘Global South’ refers to tropical forest countries and other of forest law enforcement, governance cost of certification and a lack of know- ‘developing’ countries. and verifying the legality of timber trade how are huge hurdles for farmers,

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woodland owners and public forest cus- efforts to erode persistent poverty, which relevant to non-wood forest products todians in many countries in the global is both a cause and a consequence of defor- (NWFPs). Millions of the poorest of the South. A significant increase in the area estation and forest degradation. poor derive their livelihoods from NWFPs, of certified forest in such countries will which have untapped benefit-sharing require not only an increase in the demand Phased approach potential that could be realized through for certified wood but also technical Developing fully fledged national certi- certification (Yadav, Kotwal and Menaria, and financial assistance (Peña-Claros, fication systems is both time-consuming 2007). This is particularly significant for Blommerde and Bongers, 2009). and costly. One way to address this chal- internationally traded and niche market lenge is to adopt a roadmap that uses a products handled by local communities, CHALLENGES AND OPPORTUNITIES phased approach, in which certification such as Brazil nuts, bushmeat, bamboo Credible forest certification can unite standards need not be cast-iron measures baskets, mats and handicrafts. In the poor- stakeholders in a quest for an inclusive of sustainability but rather evolving tools est Indian state, Odisha, pickers of siali green economy. It can address fair trade, of adaptive management (Muthoo, 2009). leaf (Bauhinia vahlii) have benefited from the need to balance the social, cultural, Such an approach enables convergence labelling leaves and receiving multiple economic and environmental dimensions between forest certification and initiatives price premiums (Sasmal, 2008). of development, and environmental con- to verify timber legality and would encour- cerns for the biodiversity- and carbon-rich age learning-by-doing while also offering Small-scale operators forests of the global South. Appropriately tangible benefits to forest producers by User groups that need special consideration evolved forest certification can be used as a increasing market access for their products. include farm , women workers, tool in REDD+-related strategies and PES forest-fringe villagers, forest-dwellers and to address climate change and to benefit Non-wood forest products indigenous groups. Forest certification local forest stewards. Dynamically adapted To date, forest certification has focused systems must be synergized with innova- forest certification systems can backstop largely on wood products, but it is also tive institutional support, such as good

Non-wood forest products, such as these Brazil nuts from Brazil, have considerable benefit-sharing potential that could be realized through

FAO/J. MASUCH certification

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governance and dedicated chambers for investment in promoting forest certifica- in the timber market to avoid trade in gender-balanced community and indig- tion and related ecolabelling in tropical illegal products, will help drive certifica- enous groups. Environmental, economic forests (Muthoo, 2001); at the national tion forward. and social chambers should also have an level, public-sector and private-sector appropriate balance of interests. Such mea- organizations could contribute to and help MULTISTAKEHOLDER SYNERGIES sures would help ensure that certification deliver such investment. The motives and interests of the various can cater to forest rights given the ground- stakeholders in forest certification are level realities in FMUs and that no party Forest law enforcement and rarely fully mutually reinforcing. There receives more or less than is equitable. governance are many potential conflicts: for exam- There have been positive moves in this Another challenge is ensuring the legality ple between local communities, traders direction, such as the adoption of codes of timber. Illegal logging generates illicit and consumers, between those who incur of harvesting practice (Muthoo, 2003) earnings of US$10–15 billion annually, costs and those who receive benefits, and and simplified procedures for develop- including the huge underpayment of royal- between big and small operators, North ing national forest certification standards. ties and taxes (Goncalves et al., 2012). This and South, and global and national certi- Measures to make certification more attrac- estimate does not capture the enormous fication systems. tive and less costly are critical. Engaging environmental and societal costs associ- Certification also has many potential local small-scale stakeholders is also ated with illegal logging, with criminals beneficiaries. For those whose main con- essential if certification is to be a mecha- profiting at the expense of the poor and cern is the environment, it can be a means nism for improving equity. Cooperatives the environment. Illegal logging stifles to influence how forests are managed and can increase the marketability of certified sustainable development and distorts the to promote biodiversity conservation. For products, and group certification is another marketplace, discouraging legitimate forest social movements, it can be an opportunity option. An additional innovation could be enterprises from investing in good forest for benefit-sharing and recognizing the to combine certification for the production management and undermining attempts role and responsibilities of local commu- of timber and NWFPs with PES and related to achieve forest certification and SFM. nities. For industry and trade, it can be an landscape labelling (Ghazoul, 2011). The legality of timber production and instrument for branding and marketing and trade is “an essential pre-requisite” for for buyers and consumers it can provide Capacity-building and support achieving SFM (van Dam and Savenije, credible information about products they The costs and benefits of certification, 2011). It must be addressed upfront in for- purchase. For forest owners and manag- such as a small, or no, price premium for est certification, even if a phased approach ers, it can be a tool for market access and certified products, can be approached by is used to roll out certification practices. advantage. For governments and civil stakeholders from varying perspectives. An effective criminal justice plan should society, it is a soft policy instrument to The profitability of certified products be an integral part of any strategy, so that promote SFM and sustainable consump- will influence the marketing strategies, forest crime can be addressed in paral- tion patterns. Certification has to take into entrepreneurship and stewardship of forest lel with preventive programmes of forest account all these sometimes divergent val- custodians, communities and companies. certification. The two approaches should ues, interests and goals. There is a need to strengthen institutions, be mutually reinforcing, so that both help policies and legislation to reduce the gap to increase the effectiveness of FLEGT. CONCLUSION between current standards of forest man- Forest officials and policy-makers need Forest certification and related eco-labelling agement and certification requirements, so a comprehensive understanding of the are innovative policy instruments for assur- that certification delivers due rewards to positive impact of an integrated criminal ing the sustainability and multifunctional forest stewards, especially in recognition justice strategy on combating illegal log- role of forest assets for human well-being. of their contribution to SFM, forest law ging; a forest-certification-related legality Forest certification needs to be reinvig- enforcement and legality. dimension can be a key component in orated, however, so that it continues to In many tropical forests there is a big FLEGT systems. Meanwhile, emerging contribute concomitantly and increasingly gap between existing management and legislation, such as the 2008 amendment to the vision of a green economy. We must what is required for certification. Bridging to the Lacey Act in the United States not miss the opportunity presented by certi- this gap warrants international recogni- of America, which broadened activities fication as an agent of sustainability, equity tion and investment to strengthen capacity banned by the Act to include commerce and justice in forests and related indus- and promote better management. The in illegal timber and wood products, and tries. Innovative people–public–private international donor community in par- the European Union Timber Regulation, partnerships for eco-affluence and a green ticular should consider greatly increasing which sets out the obligations of operators economy must be built, globally and locally.

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