When Is Sustainable Forestry Sustainable? the Forest Stewardship Council in Argentina and Brazil • Ralph Espach*

RalphWhen isEspach Sustainable Forestry Sustainable? When is Sustainable Forestry Sustainable? The Forest Stewardship Council in Argentina and Brazil • Ralph Espach*

Dissatisªed with the efforts of governments to address the environmental costs of globalization, private actors such as industry groups and nongovernmental organizations (NGOs) have created their own initiatives to improve industrial standards and practices around the world. Over the last two decades these private regulatory programs have proliferated across markets and industries worldwide. Today labels claiming certiªcation under the environmental standards of the ISO 14001, the Marine Stewardship Council, the Forest Steward- ship Council, and other programs adorn thousands of products on store shelves across the globe. These private regulatory programs are central to several debates about con- temporary global environmental politics. Do private regulatory programs in- fringe upon or complement traditional state regulation?1 Through mechanisms such as these do liberalized trade and investment raise international environmental standards, or promote races “to the top” rather than to the bottom?2 Pri- vate initiatives should be especially welcome in developing nations, where governments often lack the capacity to enforce their own environmental laws.3 On the other hand, some view these programs as a new set of tools with which major transnational corporations (TNCs) stiºe pressures for further regulation and protect their dominance by raising the costs of market entry.4 The importance of private regulation as a mode of global governance, however, depends on the effectiveness of these regimes at the local level. Ulti-

* I am indebted to the scores of individuals in Argentina and Brazil who generously shared with me their time and knowledge, often with kindness as well. I wish to thank especially Pablo Yapura of the Fundación Vida Silvestre, Claudia Peirano of the Asociación Forestal Argentina, and Gerardo Alonso Schwarz of the Fundación Mediterránea in Argentina, and in Brazil Lineu Siqueira Jr. at the Instituto de Manejo e Certificação Florestal e Agrícola (IMAFLORA). I also wish to thank Jane Lister at the University of British Columbia and two anonymous reviewers for their helpful comments. Comments are welcome at [email protected]. 1. Biersteker and Hall 2002; and Kahler and Lake 2003. 2. Vogel 1995; and Garcia-Johnson 2000. 3. Berman and Webb 2003; and Weidner et al. 2002. 4. Clapp 1998; Hauºer 2001; and Levy and Egan 1998.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 56 • When is Sustainable Forestry Sustainable?

mately, these programs must beneªt participating companies, consumers, and/or environmental advocates or they will atrophy and regulation will come via other sources. This is especially true in developing countries, where unfold- ing environmental catastrophes such as the destruction of tropical rainforests, the desertiªcation of arable lands, and dwindling clean water supplies are gaining political salience. Yet we know very little about the effectiveness of these private programs, whom they impact and in what ways, within developing countries. This paper compares the effectiveness of one prominent global private environmental program—the Forest Stewardship Council (FSC)—in Argentina and Brazil. These countries share similar economic histories including a dedica- tion, since the late 1980s, to liberalization and export-led growth. Both countries have signiªcant forestry industries, and the same environmental NGOs promoted the FSC in both countries at nearly the same time. Yet in Argentina the FSC has struggled to establish itself and to grow, while the Brazilian chapter has thrived. This study examines the national and industry-level factors that explain this variance, and in so doing assesses several assumptions common to the political-economic literature on international private regulation. This paper presents the results of ªeld research conducted in both countries in 2004 and 2005. The data is drawn principally from semi-structured interviews with regime administrators, corporate managers, auditors, certifying agents, and representatives of environmental NGOs and government agencies. In all, I conducted ªfty-three interviews for the project.5 I also consulted docu- mentary sources including industry journals, government and NGO reports, and surveys of national and regional forestry by the United Nations and other organizations. The comparative analysis presented in this paper is oriented by insights derived from theories of institutions, club goods, and stakeholder relations, as well as from research conducted on private regulatory programs in other countries. Although only exploratory, the ªndings call into question several assumptions common to the literature on international private regulation, which is derived mostly from studies conducted in rich, industrialized countries. Put brieºy, I argue that the conventional wisdom overstates the central importance of market beneªts as the driving factor behind private environmental regimes. The beneªts in terms of proªts or market access from FSC certiªcation are nearly the same in Argentina and Brazil, and for most producers they are extremely low. The ªndings also contrast with the prevailing emphasis on the signiªcant role played by transnational actors, NGOs and companies, as purveyors of private regulation. In these countries the capacities of the transnational NGOs that

5. 29 of the interviews were conducted in Argentina, and 24 in Brazil. 22 were with corporate managers or industry ofªcials, 8 were with government ofªcials, 5 were with certiªcation service providers or auditors, 11 were with NGO ofªcials, and 8 were with independent experts on forestry or regulation. The anonymity of these individuals and the ªrms they represent is protected as a condition of their full participation in the study.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 57

champion the FSC are limited by the extent to which they can establish local support and partnerships. Also, contrary to studies that stress the inºuence of state actors over the implementation of private initiatives, governments in these countries have had little effect on the effectiveness of their national FSC chapters, despite signiªcant efforts to do so. The principal factors that explain variation in the effectiveness of the FSC in Argentina and Brazil are the structures of these national forestry industries, and the organization and strategies of program administrators in each country.

Assessing and Accounting for Program Effectiveness Analysts of international regimes have yet to agree upon a method for the measurement of their effectiveness, a task that poses several challenges. Researchers must calculate changes in the environmental impact of the activity in question at different jurisdictional and environmental levels. They must isolate the share of these changes that can be attributed to the regime from those that may be due to other variables such as changes in regulation, new technologies, evolving corporate strategies, etc. Most perplexing is the need to construct convincing counterfactual scenarios in order to establish benchmark levels of environmental impact in the absence of the regime or if a different regime were in place.6 Even when well conceptualized and formally operationalized,7 measurement suffers from the widespread lack of consistent, reliable data. This study evaluates program effectiveness at the level of national industries. Even at this level, a scarcity of data frequently hinders efforts to estimate change in environmental impact. Moreover, were reliable quantitative data available, establishing a causal link between program creation and aggregate changes in emissions would be impossible using statistical analysis alone. In- puts, outputs, and management and production practices differ not only across sectors of the industry and individual ªrms, but over time and production cycles as well. If these problems confound research on environmental regimes in Eu- rope and North America, they are generally worse in developing nations where research on corporate environmental practice is scarce and data virtually nonex- istent. This study assesses program effectiveness across two dimensions: ªrst, the number and diversity of participating ªrms (in absolute number and in terms of their share of the industry’s total production); and second, the difªculty and cost of the reported changes in practice compelled by participation in the program. Whenever possible, I present quantitative data that reºects these dimensions. However, these numbers frequently require subjective interpretation in order to be meaningful. The number of FSC certiªcations, for example, may be impressively high because the beneªts of certiªcation equal or exceed the costs

6. Young 2001. 7. See, for example, Helm and Sprinz’s (2000) “Oslo-Potsdam Solution”; see also Hovi et al. 2003.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 58 • When is Sustainable Forestry Sustainable?

and difªculties it entails, or because it entails no cost or difªculty at all. Also, we can only interpret the signiªcance of a ªrm’s reported costs of certiªcation in re- lation to its budget and resources. Effectiveness, therefore, is assessed using a combination of quantitative and qualitative data. This study divides the factors and conditions that may potentially inºu- ence effectiveness across two pairs of categories: market and nonmarket, demand-side and supply-side. The market and nonmarket division is straightfor- ward and common in the literature on regulatory pressures.8 The demand-side or supply-side distinction is useful for identifying the nature of the impact of each factor, as well as the stage in program development at which it operates. Factors that operate similarly may substitute for one another, but an absence of demand- or supply-side conditions precludes regime effectiveness. Private regulatory programs would not exist without sufªcient demand for them on the part of consumers, ªrms, or advocacy groups, adequately met by some form of supply through the actions of industry groups or NGOs or multi-party coalitions. This categorization of variables helps to identify in individual cases at what point(s) in their development these programs gain or lose effectiveness in terms of members and their inºuence over members’ behaviors.9

Demand-side factors: Demand for private environmental regulatory programs consists of pressures on producers of an either market or nonmarket nature. Re- garding market pressures, most of the world’s consumer demand for environmentally certiªed products comes from upper middle-class or wealthy markets in Europe or North America. This is the basis for what David Vogel (1995) de- scribes as a “California Effect” in South-North trade: regardless of national regulations, exporters in developing countries must raise their environmental standards of operations in order to meet those of consumers and regulators in Northern markets.10 Consumer demand for “eco-labeled” goods is strongest in luxury goods and weakest in commodities where preference tends mostly to fol- low price.11 Market demand for goods produced under compliance with private regulatory programs may come not only from end consumers, but from clients or retailers as well. Firms concerned about their own client relations and public image may impose standards of environmental management across their supply chains. Research on environmental management systems in developing countries emphasizes the role TNCs play as channels for the diffusion of higher standards, often through supply chain pressures.12 Client-based market demand is

8. David Baron’s (1996) classic text uses this distinction. Also see Gunningham et al.’s (2003) dis- cussion of social, regulatory, and economic “licenses” for production. 9. Aseem Prakash (2000) applies a similar demand and supply side approach in his study of the Responsible Care initiative in the US chemical industry. 10. For a comprehensive treatment of the issue see Kagan and Vogel 2002. 11. Reinhardt 1999. 12. Jeppesen and Hansen 2004; Utting 2002; and Jenkins 2000.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 59

most common in industries of high asset speciªcity where suppliers cannot easily shift to less demanding clients.13 The most common sources of nonmarket demand for regime participation are threats of state regulatory action or public campaigns by environmental or community activists. The credibility of a state’s regulatory threat depends on the estimated likelihood of policy enactment and the rigor with which it would be enforced, while the threat of public scrutiny depends on the capacities and credibility of local activists. As with market-based pressures, some industries are more vulnerable than others to nonmarket pressures. Threats of state regulation are of less concern to industries of high strategic value or with strong ties to the political system. On the other hand, ªrms with high brand recognition, that are publicly owned, that work with toxic materials, and/or that are based on natural resource extraction, make especially promising targets for regulatory actions or activist campaigns.14 In sum, several demand-side factors are expected to boost the effectiveness of private programs for environmental regulation. These include export ties to Northern markets, the extent of the local presence of Northern corporations and NGOs, legitimate risks of further state regulation, and the possibility of a targeted negative campaign by environmental or community NGOs.

Supply-side factors: Supply-side factors that promote the provision of effective private regulatory programs involve the capacity for collective organization and the formation of partnerships at the industry level. These factors can also be divided by their market and nonmarket properties, although most supply-side conditions fall into the nonmarket category. The only exception is the availability of veriªcation instruments across the production chain, which is necessary to translate demand among foreign consumers for eco-friendly practices to pressure on developing country producers. Meeting this condition requires a combination of mutually recognized instruments at the local and international levels.15 Among nonmarket factors that inºuence supply, administrating organizations must grapple with collective action dilemmas such as free-ridership, and must establish program rules that lend credibility to the program but without excessive rigidity.16 As programs grow, administrators may face efforts by rivals to undermine their credibility or to put forth an alternative program.17 A capable administrative organization plays an important role in steering a program through these institutional challenges.18 Collective action theory suggests that

13. Reinhardt 1999; and Kahler no date. 14. Reinhardt 1999. 15. Cashore et al. 2004b. 16. King and Lenox 2000; and Prakash and Potowski 2005. 17. Cashore et al. 2004a. 18. Reinhardt 1999.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 60 • When is Sustainable Forestry Sustainable?

industry organization should work best in industries that are highly concentrated.19 For outside stakeholders to view them as credible, programs often require partnership with organizations independent from industry inºuence, such as auditing agencies, community organizations, or NGOs.20 Many programs, including the FSC, feature administration based on consensus-building among industry representatives, environmentalists, and community members. These open participatory designs improve program credibility, but they can put off ªrms by potentially compromising their control over their internal information and operations.21 Programs must strike a balance between openness that improves legitimacy, and ºexibility that allows ªrms to participate without compromising their economic priorities. Private programs operate without direct state involvement. However, governments can affect the supply of private regulatory programs in many ways.22 For example, governments can make certiªcation a licensing requirement, sub- sidize program participation, or promote participation through their procurement policies or by applying program standards to their own practices (for example, as stewards of public forests). Governments may also withhold their support or oppose a program, perhaps by creating or supporting rival programs viewed as more friendly to the interests of local industry. To summarize, the supply-side factors that are expected to increase the likelihood of program effectiveness include a high level of industry concentration, a capable administrating agency, the availability of independent stakeholder groups that can widen participation and increase a program’s legitimacy, and favorable treatment by relevant local regulatory and policy-making agencies.

The FSC and Forestry in Argentina and Brazil, 1990-present

What is the Forest Stewardship Council? The Forest Stewardship Council is an international network of environmental and social NGOs, producers and retailers of forest products, and certiªcation agencies that promotes standards for environmentally, socially, and economi- cally sustainable forest management. Founded in 1993, the original aim of the FSC was to unite various sustainable forestry labels under a single, global label so that buyers could conªdently purchase wood certiªed as coming from sustainably managed forests. Unlike most other forest certiªcation regimes, FSC standards are performance-based and speciªc in their requirements for compliance. By offering both forest certiªcations and chain of custody certiªcations,

19. Rees 1994. 20. Murphy and Bendell 1997. 21. Garcia-Johnson et al. 2000. 22. Delmas 2002; Cashore 2002; and Falkner 2003.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 61 Institutional requirement Organization and oversight of program acrossthrough commodity network chain or central administration ministrative agency laborate State legitimacy as a voice forment public initiatives interest, credibility of govern- Institutional requirement Competitive markets with environmentally conscious consumers (domestic or foreign) Asset specificity and/or coordination among clientsconditions (easiest of under high industry concentration) malpractice Consumer preference Client preference or pressure (supply chain pressure) Enhanced company imageThreat of negative public campaigns Company orThreat brand Presence of differentiation of litigation activist groups and media for public dissemination Judiciary open to public claims against firms alleging environmental Availability of verification instruments across the entire commodity chain Availability of external supportGovernment position relative to program Capable NGOs or other independent organizations willing to col- Market Nonmarket Threat of further state regulation Competent state regulation Market Nonmarket Organization and administration Industry concentration, leadership by major firms, and capable ad- Factors that Influence the Effectiveness of Private Environmental Regulatory Regimes Demand-side factors Supply-side factors

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 62 • When is Sustainable Forestry Sustainable?

the FSC is able to certify product across the supply chain. The FSC is considered a pioneer of this market-based, “eco-consumerist” approach.23 FSC’s international headquarters, based in Berlin, deªnes its global principles and standards,24 accredits certifying agencies, gathers and disseminates information, and oversees program operations around the globe. FSC-Interna- tional also sets worldwide compliance, auditing, and enforcement procedures. Independent, external veriªcations by an accredited auditor are mandatory. Au- dits are required every six months for chain of custody certiªcation, and annu- ally for forest management certiªcation during the ªrst four years. Enforcement is left up to public monitoring and an open investigative process. Any individual or group can call for the investigation of a local FSC certiªcation, a process that consists of outside reviews, requiring full reports from all major local stakeholders.25 While FSC-International, presiding over an international, multi-sectoral congress, deªnes the program’s principles, the writing of actual forestry standards and criteria for compliance fall to regional working groups coordinated by national chapters. Standards must be deªned individually for each type of forest (e.g., planted forests, tropical rainforest, temperate rainforest, alpine forest, etc.) through open negotiations. Consensus among local and national economic, social, and environmental councils is required, a process that can take several years.

The Argentine and Brazilian Forestry Industries during an Era of Crisis and Growth The industry: The forestry industries in Argentina and Brazil consist of two dis- tinct sectors: forestry plantations and extractive activities from native forests. Forest plantations are typically high capital, large-scale operations, producing pulp for paper goods, wood planks, ªberboard, plywood, or compensated wood products, charcoal, and other goods. Most plantations grow fast-growing eucalyptus trees, a family exotic to South America, and pine, which is exotic to tropical and semi-tropical regions. Climatic conditions throughout eastern and southern Brazil and in northern Argentina are excellent for the cultivation of these trees. Due to this geographic advantage, along with highly reªned strains of trees specialized to the area, the cultivated wood sector in the region is inter- nationally competitive, especially Brazil’s. Over the last decade wood and wood products production has been among the region’s fastest-growing industries. Small-scale, privately owned forests also account for a signiªcant share of regional wood supplies, particularly in Argentina.26

23. Cashore et al. 2004. 24. FSC’s system is currently based on ten global principles of sustainable forestry, which are imple- mented through the application of 55 performance measures. See the FSC’s Principles and Crite- ria for Forest Stewardship, at http://www.fsc.org/en/about/policy_standards/princ_criteria, accessed 6 February 2006. 25. See http://www.fsc.org/en/about/accreditation/disp resol, accessed 6 February 2006. 26. Sánchez-Acosta 2000.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 63

The growth and competitiveness of the tree plantation industry in the region has brought new pressures on the FSC system. Industry ofªcials and certiªers, particularly in Brazil, interpret some of the FSC-International’s recent policy decisions as inºuenced by the interests of European tree plantation ªrms and their workers’ unions, and designed to reduce the competitive advantage that Southern producers enjoy.27 As the competitiveness of Brazil’s wood products industry improves, threatening European competitors, some believe that labor and industry organizations in Europe have begun to utilize FSC standards as a non-tariff trade barrier. 28 In this view, the current movement within FSC- International to prohibit the certiªcation of exotic tree plantations is driven by fear of competition from Southern forests as much as it is by environmentalist opponents of tree farming. Such a prohibition, if passed, would remove FSC certiªcation as an option for South American plantations. Extraction from native forests yields tropical wood, rubber, and other products, mostly for niche market uses. The Brazilian Amazon forest is the world’s leading source of tropical wood, much of which is logged and sold illegally. Decades of national and international public attention to rapid regional deforestation, including a ban in 2001 on the cutting of mahogany, has failed to slow this activity. The majority of Brazil’s native forests are publicly owned, while in Argentina the vast majority is in private hands.29 Argentina’s tropical native forests in the north of the country are relatively small and insigniªcant as a source of production. In both countries, much of the remaining native forest is threatened by logging, much of it illegal. In addition pressures to cut forest to expand agricultural production, particularly soybeans, continue to rise with the high prices of commodities on international markets. As with many industries in the region, the deregulation and market re- forms of the late 1980s and early 1990s had a signiªcant impact on forestry. In neither case was the forest industry a major recipient of state largesse under military rule. Deregulation, however, sparked a powerful process of industry concentration and investment. In Brazil this expansion consisted of both indigenous and foreign capital, while in Argentina it was led by large, highly industrialized Chilean companies that faced increasing constraints on their operations at home. During the 1990s the production and value of wood and wood products, especially pulp and paper, increased dramatically through the use of new ge- netic lines and more modern, efªcient forestry practices. However, the market pressures from regional integration, which coincided with an overvalued Argen-

27. For example, Northern groups promoted FSC’s decision to replace, in its ªberboard and compsite board certiªcation, the logo “70 percent FSC Certiªed” with “FSC Mixed Sources” to help European producers qualify for the logo. Brazil’s large, extremely efªcient producers can provide internally 100 percent or 90 percent ªberboard more easily than can European producers, who generally must purchase ªber from small producers. 28. Interviews with ofªcials at certiªcation agencies, 11 August 2005; at the World Bank ofªce in Brasilia, 25 July 2005; a national industry association, 12 August 2005; at WWF-Brazil and at FSC-Brazil, 18 July 2005. 29. FAO 2002.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 64 • When is Sustainable Forestry Sustainable?

tine peso and industrial concentration in Brazil, squeezed Argentine producers and oriented them toward the export of commodity products, largely to Brazil, instead of higher end manufacturing.30 The global ªnancial crisis of 1997–98 hit both countries hard. Brazil was forced to allow the value of the real to slide, but in Argentina’s case, the linkage of the peso to the US dollar hampered its recovery. Wood and wood products producers faced precarious times, and investment withered. In December 2001 political and economic crises combined to topple the Argentine economy and sink the peso. Between 2001 and 2002 Argentina’s GDP fell by 13 percent, and the share of its citizens living in poverty rose to almost 50 percent. Since 2002 the Argentine and Brazilian economies have both experienced moderate growth with relative stability. In Argentina’s case, the weaker peso and economic expansion in Brazil has given exports a much-needed boost. For- eign investment has begun to return to both countries’ forestry and wood products manufacturing industries and regional integration continues, with higher capital operations such as paper and cardboard products conducted chieºy in Brazil.

Regulation: Public concern over environmental destruction began to spread in South America in the 1980s. A series of highly publicized environmental catastrophes, including the Bhopal toxic leak in India and public illness surrounding Brazil’s industrial city Cubatão, sparked public interest just as the push for democratization galvanized civil society. The 1992 UN Conference on the Envi- ronment and Development, held in Rio de Janeiro, created hundreds of regional environmental NGOs.31 Despite public demands for environmental management, both nations’ regulatory regimes are institutionally and politically frail.32 While environmental laws are strict in letter (many were lifted wholly from regulations in the US or Europe) most are never technically translated into enforceable regulations. Enforcement tends to be weak, especially outside of major urban areas. Public spending on environmental management is low and is typically funneled through labyrinthine bureaucracies and federal control sharing arrangements where funds are spread about and accountability is lost. Across different states or provinces, licensing requirements, audits, and degrees of enforcement vary dramatically. Many state regulatory agencies lack the capacity to conduct pre- ventative enforcement which, moreover, is often discouraged by political bosses with ties to major industrial or agricultural interests. Finally, corruption seems to be common among low-paid local regulators. Feckless government environmental regulation should favor private programs. Governments that seek low cost, development friendly tools for im-

30. Schorr 2004; and Aggarwal, Espach, and Tulchin 2004. 31. Cappellin and Giuliani 2002. 32. Hochstetler 2003.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 65

The Forest Stewardship Council in Argentina, Brazil, and Other South American Countries Average of other South American Argentina Brazil countries**

Launch of national 2000 (no national 1994 (first national initiative standard approved yet standard approved by FSC-International) 1997) No. of certified 9 forests 64 forests 6 forests forests/producers* 7 chain of custody 182 chain of custody 10 chain of custody certifications certifications certifications Total hectares 131,443 3,532,154 356,149 certified* Hectares certified .38 percent .65 percent .22 percent as % of total forest area*

*as of January 2006. **Bolivia, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela. Suriname, Guyana, and French Guiana hold no FSC certifications. Sources: FSC list of certified forests (www.fsc.org/en/about/documents/Docs_sent). Total forest area by country: FAO (2000).

proved environmental management should welcome such initiatives, especially when they come with the support of the international development banks and major investors.33 However, as Table 1 demonstrates, a survey of FSC certiªcat- ions across South America shows remarkable diversity in the degrees of development of national chapters. What explains this variation? We turn next to the comparison of the Argentine and Brazilian cases.

The Forest Stewardship Council in Argentina Participation: Established in December 2001, Argentina’s FSC chapter has not as yet completed the writing of local forestry standards.34 Still, nine forests have been certiªed compliant with FSC standards, seven owned by small or medium- sized Argentine companies or private landowners. Of these, four produce high value-added wood products, such as moldings and ºoors and medium- or high- density ªberboard, and one produces teas and maté, a similar infusion.

33. Berman and Webb 2003. 34. Existing certiªcations meet generic FSC international standards.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 66 • When is Sustainable Forestry Sustainable?

Two of Argentina’s certiªed forests are foreign-owned (Swiss and US), though both tracts are relatively small and are not managed for production. The industry’s three dominant transnational corporations were, until recently, all Chilean-owned. Until late 2005 none of these had sought FSC certiªcation.35 These ªrms operate large-scale plantations and produce mostly pulp and cut wood, product lines in which there is little demand for certiªcation.36 Also, FSC’s prohibition of certiªcation for any plantation established after 1994 upon land that previously was native forest rules out certiªcation on much of these companies’ lands. The rest of the Argentine forestry industry consists of a handful of medium-sized, relatively capitalized ªrms and an estimated 2,200 local farmers and sawmill operators selling logs or cut wood, mostly for the domestic market.37 Two collectives of small producers account for the two most recent FSC management certiªcations.

Effect on certiªed companies’ practices: FSC certiªcation in Argentina demands ap- preciable modiªcations in management practices. Companies estimated that the costs of certiªcation ranged from US$50,000 (for smaller operations) to over US$150,000. The challenges posed by certiªcation varied across ªrms of different sizes and regions, but most reported that requirements for the legaliza- tion, training, and care of the workforce are the most difªcult to achieve. FSC’s requirement of demonstrable, full legal compliance raises costs signiªcantly in a sector where most hiring and contracting are informal and where many competitors operate illegally.38 Moreover, laws and requirements differ across federal and local agencies, and often pose unreasonable obstacles to compliance.39 The institutional mechanisms behind the reported “seriousness” of FSC certiªcation are its international requirements for accreditation,40 regular audits, and its public transparency. The program’s credibility is also based on its international status. As one industry ofªcial phrased it,“...doyouthink [the FSC]

35. In 2002 GrupoNueva, directed by the Swiss corporate social responsibility advocate Stephan Schmidheiny, purchased one of these three Chilean forestry holdings in Argentina (Masisa S.A.). That ªrm certiªed 33,000 hectares under FSC in late 2005. (Interviews with an ofªcial at a forestry services company in Corrientes province and an ofªcial at a federal research agency that promotes forestry certiªcation, 17 November 2004; and personal correspondence with an ofªcial at the Argentine Forestry Association, 6 February 2006). 36. Sánchez Acosta 2000. 37. Braier 2004; and República Argentina 2002. 38. Interviews with an ofªcial at a large Chilean-owned company in Corrientes province, and an ofªcial at a federal agency that promotes forestry certiªcation, 12 and 17 November 2004. 39. In order to comply, one company was forced to build a special storage unit for the indeªnite storage of packaging from chemicals used, because neither waste disposal services nor local chemical companies offered the type of treatment process required by law (Interview with an ofªcial at a forest services company in Corrientes province, 17 November 2004). In the province of Corrientes, compliance with local law included registration on a government list that did not exist. (Interview with an ofªcial at an FSC-certiªed company, 11–12 November 2004.) 40. All eight certiªcations in Argentina have been and are audited by one of three agencies: SGS Certiªcation Services, Inc., Scientiªc Certiªcation Systems, and the non-proªt Smartwood program of the Rainforest Alliance.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 67

FSC Certified Forests in Argentina Size Company/owner Nationality Province Forest type (hectares)

Las Marias ARG Corrientes Plantation 13,298 Fiplac S.A. ARG Buenos Aires Plantation 6,424 FIPLASTO S.A. ARG Buenos Aires Plantation 2,995 Forestadora Tapebicua S.A. ARG Corrientes Plantation 6,906 Forestal Santa Bárbara US Salta Native forest 81,332 S.R.L./The Candlewood Timber Group LLC LD Manufacturing ARG Misiones Plantation 3,892 S.A. LIPSIA UBS Brinson FIDEICOMISO Swiss Corrientes Plantation 16,146 Financiero forestal Alto Verde S.A. ARG Entre Rios Plantation 221 Agrupación Bosques Libres ARG Mendoza Plantation 229 Mendocinos

Source: Forest Stewardship Council registry, as of January 2006. Available at http://www.fsc.org/ keepout/en/content_areas/92/1/files/ABU_REP_70_2006_01_09_FSC_certified_forests.pdf.

would compromise its international legitimacy . . . for some bribe from some small Argentine businessman?”41 FSC’s credibility in Argentina rests largely on these properties of the system, not on any direct enforcement. FSC-Argentina has not conducted any ofªcial review in Argentina nor has it reprimanded any certiªcation agency.42

Factors Inºuencing FSC Effectiveness in Argentina Market demand: Gaining access to markets and clients in European and North American markets is the foremost incentive for ªrms to seek FSC certiªcation. Firms that held FSC certiªcation reported that the label had proved a key advantage in tapping those markets. There is no domestic demand for certiªed wood or wood products, nor do ªrms report any gains within main trade partner Brazil. Market beneªts from the FSC label are reported to be greatest in the reªned wood products sector, where sales outside of Mercosur countries (i.e., to Europe, North America, or to Asia) were highest, and for companies that sell eucalyptus wood products, in order to overcome the negative image associated

41. Interview with a professor of agricultural engineering in Misiones province, 12 November 2004. 42. Interview with the FSC coordinator at the Fundación Vida Silvestre, 18 October 2004.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 68 • When is Sustainable Forestry Sustainable?

with that tree among European buyers.43 On the other hand, none of the producers of pulp or untreated wood, destined for domestic or regional markets, has yet sought FSC certiªcation. Market beneªts from certiªcation are thus far mostly unrealized. Many industry experts view certiªcation as a gamble, especially for small companies. It entails signiªcant short-term costs for uncertain longer-term beneªts of being a leader and innovator in penetrating markets for higher quality wood. Many producers are watching and waiting to see if the investment in FSC certiªcation will ever pay off for those already certiªed. Demand from clients or across the supply chain does not yet exist in Ar- gentina, as evidenced by its few (7) chain of custody certiªcations. Home De- pot’s withdrawal from establishing a store in Buenos Aires disappointed several FSC-certiªed ªrms.44 This lack of market demand or price premiums for certiªed product limits the attractiveness of certiªcation and strengthens the position of ªrms that oppose the FSC. One Argentine industry consultant explained: “When [a large Chilean ªrm] came here, they told everyone here that they’re not fools like the people who cave in to pressure and certify. They’ve gone almost ten years, they said, and despite all the pressure there was no reason at all to certify. There were no market returns. They said they’d wait another ten years to see if it’s worth it then. . . . This was the attitude these companies brought to Argentina.”45

Nonmarket demand: Pressures from state regulators, NGOs, or threats of litigation are reported to be absent or insigniªcant. State regulations and enforcement over forestry practices are extremely weak and easily avoided. Aside from the organization that coordinates the FSC, Argentine environmental NGOs focus more on stopping deforestation, or on urban and public health issues, than on sustainable forest management.46 Despite constitutional protections for public natural resources, the law does not permit collective injury claims in law- suits, which complicates litigation against companies over forest degradation.47

Supply-side factors: FSC-International is coordinated by and housed within the Fundación Vida Silvestre, the Argentine partner of the World Wildlife Fund. FSC- Argentina is currently coordinating six different standards-writing initiatives, ªve regarding regional native forests and the sixth for a standard on plantations, as well as pursuing public outreach. The initiative is administered by a single

43. Interviews with an ofªcial at an FSC-certiªed company and an ofªcial at a federal agency that promotes forestry certiªcation, 11 and 17 November 2004. 44. Interviews with an ofªcial at a FSC-certiªed company and with the coordinator of the FSC, 18 November and 29 September 2004. 45. Interview with an industry consultant in Misiones province, 15 November 2004. 46. Interview with Greenpeace forestry division director, 19 November 2004. 47. Interview with an attorney specializing in environmental law, 25 October 2004.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 69

person who shares time between the Fundación and employment as a university professor. Environmental and social rights NGOs in Argentina tend to be regionally and topically speciªc. This complicates the efforts of FSC administrators to lead a constructive, extended dialogue at the national level. Participation is sometimes beyond the resources of small environmentalist or community groups, yet without their representation the process cannot move forward. Without national coordinating organizations the FSC must cobble together new negotiat- ing councils for each new regional standard. The Argentine federal government is divided in its attitude toward the FSC. The Ministry of the Environment, responsible for conservation, supports the FSC as a standard for managing native forests. This Ministry, however, has little resources or political leverage. The more powerful Secretary of Agriculture, Ranching, Fishing, and Food (SAGPyA), which oversees policies regarding planted forests, announced in 2004 that it would begin composing a national standard for sustainable forest management to cover plantations. This initiative, with sponsorship from the European Union, aims to provide market beneªts for exporters similar to those of the FSC, but under requirements more sensitive to the concerns of the national industry.48 Argentina’s national institute for standardization (Instituto Argentino de Normalización y Certiªcación, [IRAM]), commissioned by law to write national technical and operational standards, has also began to write a national forestry standard. These two initiatives vary in two signiªcant ways. The Secretary of Ag- riculture’s program, modeled after Chile’s Certfor system, intends to base its certiªcation on ºexible system standards akin to those of the EU’s Programme for the Endorsement of Forest Certiªcation (PEFC). IRAM, on the other hand, aims to write performance-based standards like those of the FSC, and would prefer mutual recognition between its national standard and those of the FSC.49 Industry ofªcials give short shrift to these state-based standards programs. The Secretary of Agriculture’s initiative is viewed with skepticism due to the support it enjoys from the country’s largest forestry companies, including two of the Chilean behemoths. Industry ofªcials and experts doubt it could ever gain credibility in the eyes of consumers.50 Many also question the capacity of the federal bureaucracy to complete the project, due to a legacy of poorly conceived and

48. Interviews with the ofªcial at the SAGPyA Forestry Division who is coordinating the national forestry standards initiative, and with an industry consultant active in national standards programs, 29 October and 19 November 2004. 49. Interviews with the ofªcial at the SAGPyA Forestry Division coordinating the national forestry standards initiative and with an ofªcial at the national institute for standardization, 29 October and 4 November 2005. 50. Several industry and company ofªcials who do not work for one of these ªrms attribute the competition between two government agencies to pressure from TNCs, which view the IRAM as too independent (Interviews with an industry consultant active in national forestry standards programs and the coordinator of FSC-Argentina, 19 November and 18 October 2005).

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 70 • When is Sustainable Forestry Sustainable?

uncompleted policy initiatives toward the forestry sector.51 Indeed, as of Febru- ary 2006 industry ofªcials reported that this initiative had hardly advanced.52 One industry expert commented that “In this country, the label ‘governmental’ condemns any initiative or plan to failure. It’s a death sentence.”53

The Forest Stewardship Council in Brazil Participation: Since the creation of the Working Group in 1996, FSC-Brazil has had three different sets of standards approved by the FSC-International (for forest management in the Amazonian rainforest, for extractive use of forests in the Atlantic Forest, and for the management and harvesting of cashew fruits), and two others await approval. Brazil’s certiªcation numbers are among the highest in the world. As of October 2005, 59 Brazilian forests, totaling 3,455,513 hectares, are FSC certiªed, and 182 Brazilian companies hold chain of custody certiªcation. Brazil’s participation in FSC resembles more closely that of Canada (26 forests, 15,231,115 hectares) or the US (98 forests, 5,606,253) than other Latin American nations.54 FSC certiªcations account for over 80 percent of the country’s certiªed forest area. The remaining share pertains to certiªcations under CERFLOR, an alternative, government sponsored program similar to the one proposed in Argentina.55 The planted forests sector is highly concentrated. Approximately 20 companies operate in the sector, but four stand out in terms of forest assets and production volume.56 Most ªrms in this sector are Brazilian or are of shared Brazil- ian-foreign ownership. Approximately 30 percent of all planted forests are certiªed under FSC, and an estimated additional 10–15 percent are preparing for certiªcation.57 This includes all but one of the largest plantation ªrms, and that ªrm is expected soon to seek FSC certiªcation for a signiªcant share of its operations.58 One company ofªcial predicts that, between FSC and CERFLOR

51. Interview with an attorney and journalist who specializes in environmental law, 24 November 2005. 52. Personal correspondence with an ofªcial at the Argentine Forestry Association, 6 February 2006. 53. Interview with an attorney and journalist who specializes in environmental law, 24 November 2005. 54. Bolivia (16 forests, 1,902,954 hectares), where FSC certiªcation is required of all public forest concessions, is an interesting exception. 55. Garlipp 2004. Also, personal correspondence with the director of the Brazilian Forestry Society, 2 February 2006. There is some dispute over these percentages which are constantly changing with new certiªcations, but there is no disputing the dominance of the FSC. Estimations of its share of total certiªed hectares in Brazil range from 65 to 96 percent. I calculate 80 percent using what I consider the most reliable data as of 6 February 2006. 56. BRACELPA 2003; and an interview with the director of the Brazilian Forestry Society, 12 August 2005. 57. Interviews with director of a certiªcation agency and an expert on forestry goods markets at WWF-Brazil, 11 September and 21 July 2005. 58. Interview with an ofªcial at a certiªcation agency, 11 August 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 71

Summary of the FSC-Argentina Case

Demand-side factors that Demand in European and North American markets drives in- influence effectiveness terest in FSC certification. No domestic market or demand for certified products. No pressure across production chains. Large companies are not certified and certified chains of custody (from forest to mill to manufacturer to retailer) are not yet established nationally. Nonmarket pressures from regulators, advocacy groups, or public are negligible.

Supply-side factors that Administrative agency is capable, although the management influence effectiveness of multiple initiatives across a large country stretches its few resources and small staff. No other NGOs or independent groups play significant supporting role. State policies toward FSC are divided; however, serious efforts are underway to create a state-sanctioned alternative to FSC’s standards for plantations. The government’s overall lack of credibility, however, hampers these efforts.

certiªcations, within ªve years perhaps as much as 90 percent of managed or planted forests will be certiªed.59 While forestry plantations are formal, high-capital operations, most extraction from native forests is illegal, small-scale, and difªcult to regulate. It is estimated that over half, and perhaps as much as 85 percent, of all wood ship- ped out of the Amazon was cut illegally.60 In contrast to the high percentage of tree plantations that are certiªed, less than one-half of one percent of total native forest area is certiªed.61 Still, until recently Brazil’s FSC chapter boasted the largest volume of certiªed tropical forest in the world.62 With a tropical rainforest half the size of the continental United States, the Brazilian Amazon forests offer tremendous potential for future certiªcations. Brazil is not only the world’s largest supplier of tropical wood; it is also the

59. Interview with an ofªcial at a major tree plantation company, 16 August 2005. 60. Interview with an expert on wood markets at the WWF, July 21, and certiªcation agency ofªcial on 11 August 2005. See also American Forests & Paper Association 2004. 61. Of course this is due partly to the vastness of Brazil’s native forests. Interview with a certiªer afªliated with an international forest certiªcation agency, 11 August 2005. 62. Brazil’s top ranking was claimed by Bolivia in October 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 72 • When is Sustainable Forestry Sustainable?

world’s largest market. Less than a third of wood logged in the Amazon is sold for export. The rest is sold domestically, more than half within the state of São Paulo.63 At present, the most signiªcant impediment to further certiªcations of Amazon rainforest is the lack of clear legal ownership and tenureship rights in the region, which limits the growth of legal operations and reduces incentives for certiªcation. FSC administrators believe that a new federal Program for For- est Management, currently under consideration in the Senate, will clarify land rights on public lands and encourage certiªcation in the Amazon.64

Impact on behavior: The impact of FSC certiªcation on producers’ behavior differs across the two industry sectors. Regarding planted forests, FSC certiªcation is reported to have little impact on environmental management or practices. This is not due to laxity in the FSC standards, but because most of Brazil’s forestry companies had high internal standards of management and practice well before FSC certiªcation became available in 1997. Planted forest managers report that obtaining FSC certiªcation was relatively easy because most had been dedicated to good practice for years.65 In this sector, the impact of certiªcation tends to be greatest in terms of the ªrms’ relations with neighboring communities. Indeed, one of the signal differences between the standards of the FSC and the more ºexible CERFLOR system is that the performance standards of the FSC demand agreements on local management policy with local communities, unions, and other stakeholders, while CERFLOR’s practice standards require docu- mented efforts toward that goal. Extractive operations in native forests report signiªcant changes in environmental practice, as well as in community relations and operational accounting. Many native forest extractive operations are community- or family-run and small in scale. Most forms of process, data, and practice management are com- pletely new to these producers, so obtaining FSC certiªcation entailed dramatic investment in training, data collection, planning, and new extraction techniques and equipment. On the other hand, larger operations in the Amazon report little impact from FSC certiªcation. These producers, like their large plantation operating counterparts, already tend to manage their forests with care in order to distinguish themselves from typical Amazonian forestry operations.66 As with plantation managers, ªrms that operate in native forests report that the impact of FSC certiªcation is greatest in the areas of labor management, community relations, and social development.67 Many managers report that en-

63. May 2004. 64. Interview with director of the forestry division at the Ministry of the Environment, 19 July 2005. 65. The most signiªcant change in environmental practices for plantation operators required by FSC is the minimization of chemicals use. Ofªcials foresee that the FSC’s prohibition against the use of transgenic technology will become increasingly costly from a competitive viewpoint. 66. Interviews with ofªcials of two certiªcation agencies and managers of two ªrms that operate in native forest, 11 August, 23 August, and 17 September 2005. 67. Interview with directors of two certiªcation agencies, and with an ofªcial at a small wood products company, 11 September and 23 September 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 73

vironmental management, being basically technical or procedural, is simpler to communicate to workers and to implement than are improved social or community management, which require skills and training beyond those typical of forestry technicians. Also, improvements in environmental practice are sometimes made easier by the availability of technical and ªnancial assistance from state agencies, universities, consultants, and certiªcation providers.

Factors that Inºuence FSC Effectiveness in Brazil Market demand: Expectations of improved market access and price premiums are the chief motivation for ªrms to seek FSC certiªcation. However, as in Argentina actual reported beneªts generally fall short of ªrms’ expectations. For ªrms that export to Europe, certiªcation is reported to be an increasingly common criterion for market entry. Price premiums, however, are rare and differ by market segment. Premiums of 20 to 50 percent have reportedly been paid for tropical native wood carrying the FSC logo. As a result, 70 to 80 percent of Brazil’s native wood exports are FSC certiªed.68 However, for cut wood, ªberboard or compensated wood products, the FSC label brings no signiªcant price premium due to inexpensive supplies from within the EU or from Asia. Prices for pine board are determined mostly by swings in global supply and demand, and FSC certiªca- tion brings no meaningful price premium. Even in these markets, however, certiªcation is an increasingly important criterion for market access, especially in Europe.69 Domestic demand for certiªed wood and wood products is limited. For producers of cut wood, pulp, chips, and most paper products, consumer or client demand for certiªed goods hardly exists. Some industry experts claim that FSC certiªed wood pulp can bring a small premium (of around one percent) in certain product lines, but company ofªcials disagree. One producer scoffed at the claim: “A price premium for certiªed goods? Forget it! Certiªcation adds costs, more than beneªts.”70 For many product lines such as pine board, charcoal for steel mills, or wood as fuel for pizza ovens (a large source of demand, especially in voracious São Paulo) there is little prospect of consumer or client- based demand for certiªcation. Some ªrms, however, have found niche export markets—such as selling charcoal briquettes or high-end paper—in which certiªcation has provided a competitive advantage.71 Regardless of any market beneªts or price premiums, most ªrms view certiªcation as important for their public image. Since at least the 1980s, Brazil- ian forests have been synonymous with environmental destruction, illegality, and corruption. This places a double burden on companies that wish to legally

68. Interview with an expert on forest goods markets with the WWF, 24 July 2005. 69. Interview with an expert on forest goods markets with the WWF, 24 July 2005. 70. Interview with an ofªcial at a major tree plantation ªrm, 16 August 2005. 71. Interview with World Bank ofªcial, 25 July, and with a manager of a major pulp and paper ªrm, 16 August 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 74 • When is Sustainable Forestry Sustainable?

and legitimately sell products from the rainforest. They must differentiate themselves from this sea of nefarious competition and compete against a constant supply of much cheaper, illegally cut wood. One CEO of a ªrm in the western Amazon decided to seek FSC certiªcation when her daughter asked her if her work was killing the forest.72 Plantation operators like to point out that their production reduces demand for wood from native forests. However, they also suffer the stigma of Brazil’s inability to staunch the loss of its native forests. The forestry industry in Brazil has been “under a regulatory and public microscope for years,” because of the symbolic importance of forests in Brazil.73 Plantation ofªcials who harvest eucalyptus and pine wood in the south of Brazil report reluctance on the part of some foreign clients to buy any Brazilian wood without certiªcat- ion, in order to insulate themselves from any connection to the situation in Amazônia.74 Because Brazilians buy more tropical wood products than any other country in the world, FSC administrators and advocates see tremendous opportuni- ties in building domestic demand for certiªed products. Now that signiªcant internal supplies of certiªed wood exist, there is pressure to increase demand. One ªrm that produces FSC certiªed cardboard claims that certiªcation actually hinders, instead of helps, market access since few clients want to submit themselves to complying with chain of custody standards.75 To build a client base, FSC partners have organized national groups of certiªed wood buyers and sellers. These associations host annual fairs and encourage networking among harvesters, processors, sellers, and consumers. The WWF has created a group of top-end architects, furniture designers, and builders who use only certiªed wood. This group, Design and Nature (Desenho e Natur- eza), began holding annual exhibitions featuring certiªed wood products in 1999, and after 2000 only FSC certiªed wood were permitted for display. The strategy is to target the use of certiªed wood products among the trendsetting elite and fashionable of São Paulo and Rio de Janeiro, in order to stimulate an eventual nationwide trend. In another sector, in October 2005 the Portuguese author José Saramago, a Nobel laureate, launched Brazil’s ªrst FSC-certiªed book. Efforts to increase demand from government purchasers have also recently met with success. Following a lengthy campaign by Greenpeace, the state of São Paulo has agreed to give preference to certiªed wood in its procurement decisions. Considering the size of the state’s budget for construction, once im- plemented this should prove a major boost to domestic demand for certiªed wood. Wood suppliers report little demand from clients for certiªed wood. Re- tailers in Brazil show little interest in offering certiªed wood to a public that is

72. Interview with an ofªcial at the WWF, 18 July 2005. 73. Interview with an ofªcial at a major Brazilian forest plantation ªrm, 16 August 2005. 74. Interview with manager of a major pulp and paper ªrm, 16 August 2005. 75. Interview with an ofªcial at a major Brazilian forest plantation ªrm, 16 August 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 75

largely unaware of the FSC program.76 Brazil’s high number of chain of custody certiªcations reºect signiªcant export activity, and the anticipation of many manufacturers that a domestic market for certiªed wood will develop.

Nonmarket factors affecting demand for certiªcation: Producers in Brazil report few direct nonmarket pressures in terms of NGO campaigns or threats of legal action that affect their decisions regarding FSC certiªcation.77 This seems surpris- ing, considering that Brazil has a sizeable and diverse activist community and that environmental issues have received so much attention.78 Part of the expla- nation is that deforestation in Brazil is due mostly to illegal logging and the clearing of land for agriculture, not to formal forestry operations. The main thrust of local activists and regulatory campaigns to stop deforestation target illegal operations and/or corrupt regulators, and have little effect on formal forestry operations. Also, although Brazil’s environmental laws are relatively strict, in practice the courts are extremely overloaded and slow. Federal prosecutors and judges sometimes act aggressively against alleged environmental violations, but this is more common in urban areas.79 In Amazônia, more often the oppo- site is the case, that local regulators and judges have personal political or ªnan- cial incentives to overlook activities that are making local operators rich. This is not to say that Brazilian civil society has had no inºuence on FSC effectiveness. Widespread public concern and activism over deforestation and illegal activity in Amazônia is a critical contextual factor that helps explain the industry’s interest in forest certiªcation.80 Broader social awareness of the plight of the nation’s forests has shaped the attitude and behavior of Brazilian forest industry ofªcials, even in the absence of direct pressures from activists. This accounts for the fact that, for the majority of FSC certiªcation holders, certiªcation followed a previous commitment to high standards of environmental management and practice. The poor reputation of logging and forest management industries in Brazil has resulted in a clear division between large-scale, legal operators who generally implement high standards of practice, and smaller-scale, illegal operations bent only on short-term proªts. Few are the formal, legal producers who operate at levels of minimum legal compliance or skirt the law, as in other industries. As a result, for Brazilian forestry operators obtaining certiªca- tion tends to be either relatively easy or unthinkable. The government in Brazil, at both the federal and local levels, has had little direct inºuence over demand for FSC certiªcation or certiªed products. São Paulo state’s promise on procurement policies is the nation’s only instance of a state-based program promoting the purchase or use of certiªed wood. Forest

76. Interview with FSC expert on wood and wood products markets, 21 July 2005. 77. Direct campaigns by Greenpeace and other NGOs tend to target exports and purchasers of illegal tropical wood in the US or Europe. 78. Cappellin and Giuliani 2002; and Hochstetler 2002. 79. McAllister 2003. 80. May 2004.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 76 • When is Sustainable Forestry Sustainable?

managers report no regulatory beneªts from nor state recognition of the value of FSC certiªcation. However, while state agencies fail to directly inºuence the FSC in Brazil, the longstanding ineffectiveness of government regulation, and public skepticism of its independence and enforcement capabilities, have indirectly promoted the program’s growth. The weakness of state regulation, combined with widespread concern over deforestation, has generated broad public demand for independent, private veriªcation of good practice. One of the ªrst ªrms to certify with FSC did so because its managers sought an independent source of veriªcation and recognition for what they believed to be excellent environmental practices. Company ofªcials wanted an entity that“...wasnotfrom the government and was not from the industry. Someone we were not paying, that was checking our operations independently.”81 In the coming years the government’s role as a source of demand for forest certiªcation may become more proactive. A new federal Public Forest Manage- ment Program under Congressional consideration would require independent sustainable management certiªcation for all economic activities in public forests not set aside for conservation, approximately a third of the Amazonian region. While this certiªcation is not required to be through FSC, many believe the new program will push the vast majority of forest managers in that direc- tion. Beyond this, the only existing example of state action in support of demand for FSC comes from the state of São Paulo.

Supply side: Similar to the Argentine case, the Forest Stewardship Council in its early years in Brazil (1996–2002) was supported almost entirely by ªnancial and human resource support from the World Wildlife Fund. Today, however, FSC-Brazil has its own ofªce in Brasilia and a full-time staff of six. The key reason why the program has ºourished in Brazil is because the FSC model suited the interests of various industry, environmental, and social groups that had already been promoting responsible forestry practices since the early 1990s. For- est certiªcation was underway, on a small scale, before the FSC became available in 1994. Brazilian certiªers and industry experts participated in the original meetings in Canada and the US that led to the formation of the FSC.82 These individuals and the groups they represented were enthusiastic to participate in the FSC Working Group (formed in 1996) and to promote an FSC chapter in Brazil. The core of this network consisted of an informal group of Brazilian experts with experience working in the forestry industry and with international certiªcation agencies. Many of these individuals either worked previously or at that time for major local forestry companies, a fact that helped to bring several ªrms on board with the FSC at an early stage.83

81. Interview with an ofªcial from a major plantation ªrm, 16 August 2005. 82. Interviews with forest certiªcation ofªcials, 11 August 2005, and with ofªcials at WWF-Brazil, 18 July 2005. 83. Interviews with a certiªcation agency ofªcial, 11 August, and with an ofªcial at the World Bank, 25 July 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 77

This large, well-connected, and active local group of Brazilian and foreign advocates and coordinators provided several beneªts to the Brazilian FSC initiative. The fact that the Group was dominated by Brazilians, and included several Brazilian NGOs, muted criticism of the FSC as foreign interference.84 Also, in a move different from the approach in Argentina, the Brazilian Working Group selected as its director the CEO of a major domestic forestry company. This sig- naled that although the program was founded primarily by NGOs, it was not in- compatible with industry competitiveness or growth. This director was able to contact his colleagues directly and solicit their participation, and most of the country’s major industry players contributed to the process of deªning local FSC standards. This effectively isolated conservative opponents, and as a result in Brazil there is no ideological disagreement among major producers regarding the value of forest management certiªcation or sustainable practice.85 This was not accidental. The Working Group perceived the need to forefend collective industry opposition and took various strategic actions to do so. The native forest sector is not organized, so we faced no strong opposition from them. The only possible source of opposition there was from the Asso- ciation for the Export of Tropical Lumber ...soweputthem on the economic council of the FSC. We mapped who could be a potential adversary, and targeted them to bring them into the group. We did not give a spot to any company in the Amazon. Instead we gave one of six seats on the Eco- nomic Council to the Association. We did the same thing with the pulp and paper industry. It negated any resistance within the industry, it blocked any notion that the process favored one company over another, and it gave these industries control over their participation.86 In recent years, this network of FSC participants and supporters has been responsible for many of the activities that have made the program effective. So- cial and environmental NGOs and certiªcation agencies play various critical roles in support of the FSC. These groups advocate the certiªcation of forests and mills, offer technical and ªnancial assistance to facilitate certiªcation, participate actively in FSC standards negotiations, coordinate participation by their clients or local partners, and monitor the activities of certiªed producers to report any non-compliance.87 This network consists of several individual organizations, each with its own interests, orientation, and prerogatives. To some degree, FSC’s dependence on their activities may cause problems. When promoting the program to companies, communities, and government agencies, these organizations do not al- ways use the language or arguments that FSC staff would prefer.88 In another ex-

84. Interviews with a certiªcation agency ofªcial, 11 August, the director of the forestry division at the Ministry of the Environment, 19 July, and a World Bank ofªcial, 25 July 2005. 85. Interview with a certiªcation agency ofªcial, 11 August 2005. 86. Interview with a World Bank ofªcial and board member of FSC-Brazil, 25 July 2005. 87. These include the WWF-Brazil, Greenpeace, Friends of the Earth, IMAFLORA (a Brazilian forestry services and certiªcation ªrm), and Scientiªc Certiªcation Systems. 88. Interview with ofªcials at FSC-Brazil, 18 July 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 78 • When is Sustainable Forestry Sustainable?

ample, monitoring of compliance with FSC standards is transparent and open to anyone. Recently Greenpeace has been particularly active in questioning the behavior of a few certiªed operations. While it has every right to do so, this action on the part of what is perceived as a particularly aggressive and publicity- seeking NGO makes some FSC certiªed ªrms uncomfortable.89 One of the program’s current challenges is to establish its independence from these organizations, since their objectives often differ from the FSC’s ofªcial, neutral position.90 Industry ofªcials warn that groups from the “radical Left,” particularly some social rights NGOs and the “Green Desert” anti-plantations campaign, have gained too much inºuence within FSC.91 Looking ahead, this trend toward radicalism, coupled with controversies at FSC-International over the certiªcation of tree plantations, may drive ªrms toward alternative certiªcation regimes such as the government-sponsored CERFLOR. The federal Environmental Ministry (Ministerio do Meioambiente, or MMA) ofªcially supports voluntary forest certiªcation. However, the MMA and especially its enforcement branch, which is run by the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (IBAMA), suffers from internal division and corruption.92 Despite the Ministry’s ofªcial position, local IBAMA regulators often view FSC standards and audits as infringements on their authority. Some have recently withheld harvesting licenses to FSC certiªed forest owners, allegedly because these ªrms do not pay the usual bribes because certiªcation requires transparent accounting. Some of these certiªed ªrms have halted operations, and fear that this may force them to sell out, most likely to a less scrupu- lous manager.93 At least one ªrm recently went to court to pressure the agency to allow it to operate.94 As in Argentina, in the early 1990s the Brazilian forestry industry collabo- rated with the national standards agency (Instituto Nacional de Metrologia, Normalização e Qualidade Industrial [INMETRO]) to write an alternative national forest management standard for tree plantations. This Certiªcação Floresta (CERFLOR) standard is modeled on state-sanctioned programs in Canada and the US, and like those programs is recognized by the international Program for the Endorsement of Forest Certiªcation schemes (PEFC), supported by the

89. An investigative action by Greenpeace sparked the withdrawal of a producer’s FSC certiªcation, as well as that of the certifying agency that had certiªed the producer. Interview with an ofªcial at a certiªcation agency, 11 August 2005. 90. Interview with WWF-Brazil staff in Brasilia, 18 July 2005; and with an ofªcial at the World Bank, 25 July 2005. 91. Interviews with ofªcials at certifying agencies, 11 August 2005; a national industry association, 12 August 2005; and with managers at tree plantation ªrms, 15 and 16 August 2005. 92. In June 2005, a federal sting operation netted 47 IBAMA ofªcials in seven states proªting from illegal logging in the Amazon region. Estado de São Paulo, Ciência e Meio Ambiente, 3 June 2005: “PF prendeu pelo menos 95 na Operação Curupira.” 93. Interview with an ofªcial at a certifying agency, 11 August 2005. 94. Interview with an ofªcial at the Ministry of the Environment, 22 July 2005, a small company operating in Amazônia, 23 September 2005, and two forest management certiªers, both on 11 August 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 79

European Union. Like these other national programs CERFLOR is distinctive from the FSC in the ºexibility of its compliance standards (compliance with CERFLOR standards demands management practices instead of meeting speciªc performance targets) and the relative weight of industry representation in its di- rectorship. Also, CERFLOR’s technical committees include government representation—as well as that of industry and civil society groups—and its standard- setting body as well as the independent agency overseeing accreditation and veriªcation processes are both government funded. CERFLOR’s environmental standards, however, are generally considered equal to those of the FSC, with the exception that CERFLOR accepts transgenic trees while the FSC does not, which may in the future reduce the appeal of the FSC system.95 The more important difference in terms of impacts on behavior is that CERFLOR’s standards are less exacting in terms of relations with local communities, and open, public negotiations to resolve conºicts over land use or ownership. Proponents of CERFLOR, however, claim that these differences are virtually all in style, rather than sub- stance.96 FSC requirements regarding community relations pose a serious com- plication for a few major plantation operators that are in engaged in prolonged disputes with indigenous groups over land rights and ownership. Such conºicts are spreading across Brazil. In Amazônia, squatters and land rights activists have begun to target certiªed forests for illegal invasion, since according to FSC standards the owners must engage in open negotiations and seek mutually bene- ªcial solutions instead of offering the traditional response: expulsion at the end of a gun.97 Certiªcation under CERFLOR standards has been an option since 2002. To date, however, only two forests have obtained CERFLOR certiªcation. De- spite its technical soundness and ofªcial sanction, the CERFLOR program suffers from a lack of market recognition and a general view that it is compromised by its close ties to major ªrms, a national industry association, and the government. While market demand for FSC certiªed goods may be limited, industry ofªcials and experts report that they have never heard of a client, domestic or foreign, demanding a logo under the PEFC system, with which CERFLOR is associated. As is the case in Argentina, state support for the program results into low credibility. In addition, CERFLOR faces an uphill struggle to gain participants because FSC has already achieved such a signiªcant market position. As is the case with demand-side action by the government, future inºu- ence may come more at the state than the federal level. Three state governments in the Amazon region (Amapá, Amazonas, and Pará) sponsor incentives pro-

95. Incidentally, quite unlike the case in the US, where the SFI has little credibility outside of the industry. Interviews with ofªcials at forestry companies 16 August 2005; a national industry association 12 August 2005; and certifying agencies, 11 August 2005. 96. Personal correspondence with the director of the National Industry Association (the Sociedade Brasileira de Silvacultura, 6 February 2006. 97. Interviews with certifying ofªcials, 11 August 2005; ofªcials at WWF-Brazil, 18 July 2005; and with ªrms with operations in Amazon native forests, 17 August and 23 September 2005.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 80 • When is Sustainable Forestry Sustainable?

Summary of the FSC-Brazil case

Demand-side factors that Market demand in Europe drives interest in FSC certification, influence effectiveness especially for tropical wood exports. In other sectors, and in the domestic market, there is little demand and no price premium for certified products. Certified chains of custody aimed chiefly at export markets are well developed, but thus far there is little market return, domestic or foreign. Direct nonmarket pressures from regulators, advocacy groups, or the public are negligible. However, legacy of failed forest management in Brazil has created a climate in which legal, formal forestry operations face high public and com- mercial scrutiny. FSC certification is viewed as a useful tool to demonstrate corporate responsibility and good management.

Supply-side factors that Administrative agency is capable, with a full-time staff of six. influence effectiveness However, organizational capacity is strengthened most by a network of active NGOs and certification agencies that share the goals of the FSC. Brazilian chapter successfully engaged industry leaders from the start, isolating ideological opponents and linking forest certification with successful, well managed businesses. Federal and state governments officially encourage forest certification, but this is not yet true in practice. In Amazônia corruption is rampant among regulators who sometimes pe- nalize certified operations. The national standards agency offers a state-sanctioned domestic alternative to the FSC. However, the program’s lack of credibility and market recognition, and the effectiveness of the FSC, have limited interest in the new system.

grams that support community-based forest certiªcation through FSC by offering technical and ªnancial assistance.

Conclusions What accounts for this difference in the effectiveness of the FSC program in Ar- gentina and Brazil? Two factors that are often the focus of studies on the diffusion of global private regulation—market demand channeled largely through

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 81

exports, and advocacy by transnational corporations and/or NGOs—do not explain this variation. While it is true that ªrms often join the FSC hoping to gain greater access to European and North American markets, or to obtain a higher price for their goods, only a handful of ªrms in niche markets report ever achieving such beneªts. Also, program effectiveness does not correlate with real- ized market beneªts. The strongest examples of participation—among Brazilian forest plantations and Argentine wood exporters—report virtually no market beneªts. Moreover, Argentine and Brazilian producers both describe similar interest in certiªcation in order to improve their access to export markets in Eu- rope or North America, as well as similar levels of skepticism regarding price premiums. The main cross-national difference in this regard is that Brazil has a much larger extractive industry selling products from native forests. There is not enough difference, however, in market demand in these industries to explain the dramatic variation in the effectiveness of the FSC. In general, ªrms continue to participate in or to join the FSC in both nations because of its non-market beneªts in terms of improved management and forestry techniques, or to distinguish themselves as responsible producers amid the multitude of illegal and destructive operators. These cases also indicate that although transnational actors were critical to introducing these programs in Argentina and Brazil in the ªrst place, after implementation their effectiveness has depended on participation and advocacy by local actors. The success of Brazil’s FSC chapter is largely due to the network of local individuals, ªrms, NGOs, and certiªcation agencies that predated the FSC but found in the program a workable tool for the pursuit of their shared interests. In Argentina, on the other hand, the World Wildlife Fund sustains the chapter, but the strongest opposition to the FSC comes from transnational ªrms, led by Chileans, that are collaborating with the Ministry of Agriculture to create a more industry-friendly alternative. The attitudes and relative leverage of local ªrms and organizations have been more important to program effectiveness than have the presence of transnational actors. The inºuence of state actors in these cases is complex, but generally fails to support arguments that effective local governance is a primary condition for the success of private regulatory programs. Government agencies in Argentina and Brazil have little or no direct inºuence over ªrms’ decisions whether to participate. Government policies and incentives in this regard—especially government efforts to present a more industry-friendly alternative certiªcation program—are widely held to lack credibility. On the other hand, the success of Brazil’s FSC program is in large part due to the demand from both ªrms and social and environmental activists for some credible mechanism to distinguish responsible forestry practices, since legal compliance is viewed as meaningless. Thus, longstanding regulatory failures and public frustrations have boosted the effectiveness of the FSC. More inºuential at the level of national industries than any demand-side factors are those that promote the supply of effective private regulation through

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 82 • When is Sustainable Forestry Sustainable?

the FSC. These include the availability of willing and capable local partners, and the resources and strategies of program administrators. It must be noted, however, that in these cases industry concentration has not boosted effectiveness. The Brazilian forestry sector is heterogeneous and diffuse, yet the FSC has been more effective there than in Argentina, where high industry concentration leaves the program vulnerable to the opposition of two major ªrms. Brazil’s diverse network of nationally active forestry-oriented organizations differs dramatically from the case in Argentina, where environmental NGOs and industry groups are more regionally fractured. In addition, the strategy of FSC’s administrators in Brazil to target, early on, the inclusion of key ªrms and industry actors successfully undercut ideological opposition from industry actors, a problem that persists in Argentina. This comparison of two South American FSC chapters indicates that the effectiveness of private environmental regulatory programs is likely to vary dramatically across developing countries, regardless of similar levels of demand in export markets and advocacy by transnational NGOs or TNCs. Local supply- side conditions at the industry level, typically overlooked in studies of private environmental regulation at the global level, have signiªcant inºuence over program success. Unfortunately, however, these conditions seem for the most part beyond the ken of government action, so that there is little policy-makers can do in the short term to promote effective private regulation within their borders.

References Aggarwal, Vinod K., Ralph Espach, and Joseph S. Tulchin. 2004. The Strategic Dynamics of Latin American Trade. Stanford, CA: Stanford University Press. American Forest & Paper Association. 2004. “Illegal” Logging and Wood Markets: The Competitive Impacts on the U.S. Wood Products Industry. Report prepared for the AFPA by Seneca Creek Associates LLC and Wood Resources International LLC. Available at www.afandpa.org. Baron, David P. 1996. Business and its Environment. Fourth Edition. New York, NY: Prentice Hall. Berman, Jonathan E., and Tobias Webb. 2003. Race to the Top: Attracting and Enabling Global Sustainable Business. Washington, D.C.: The World Bank. Biersteker, Rodney Bruce, and Thomas J. Hall, eds. 2002. The Emergence of Private Author- ity in Global Governance. Cambridge, UK: Cambridge University Press. Braier, F. Gustavo. 2004. Informe Nacional: Argentina. Proyecto Información y Analises para el Manejo Forestal Sustenible. Santiago: European Union/Food and Agricultural Orga- nization. Cappellin, Paola, and Gian Mario Giuliani. 2002. The Political Economy of Corporate Social and Environmental Responsibility in Brazil. Unpublished paper written for the United Nations Research Institute for Social Development, Rio de Janeiro, 2002. Cashore, Benjamin, Deanna Newsome, and Graeme Auld. 2004a. Governing Through Markets: Forest Certiªcation and the Emergence of Non-state Authority. New Haven, CT: Yale University Press.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 Ralph Espach • 83

______. 2003. Legitimizing Political Consumerism: The Case of Forest Certiªcation in North America and Europe. In Politics, Products, and Markets. Exploring Political Con- sumerism Past and Present, edited by Michele Micheletti, Andreas Follesdal, and Dietlind Stolle. New Brunswick, NJ: Transaction Publishers. _____. 2002. Legitimacy and the Privatization of Environmental Governance: How Non- State Market-Driven (NSMD) Governance Systems Gain Rule-Making Authority. Governance: An International Journal of Policy, Administration, and Institutions 15 (4) October: 503–529. Clapp, Jennifer. 1998. The Privatization of Global Environmental Governance: ISO 14000 and the Developing World. Global Governance 4 (3): 295–316. Delmas, Magali. 2002. The Diffusion of Environmental Management Standards in Eu- rope and the United States: an Institutional Perspective. Policy Sciences 35 (1): 91– 119. Falkner, R. 2003. Private Environmental Governance and International Relations: Ex- ploring the Links. Global Environmental Politics 3 (2): 72–87. FAO (UN Food and Agricultural Organization). 2002. Socio-economic Trends and Outlook in Latin America: Implications for the Forestry Sector to 2020. Prepared by Sandra Velarde. Available at http://www.fao.org/documents. _____. 2000. Global Forest Resources Assessment 2000. FAO Forestry Papers 140. Available at http://www.fao.org/documents. Garcia-Johnson, Ronie. 2000. Exporting Environmentalism: U.S. Multinational Chemical Corporations in Brazil and Mexico. Cambridge, MA: The MIT Press. Garcia-Johnson, Ronie, Gary Gerefª, and Erika Sasser. 2000. Certiªcation Institution Emergence: Explaining Variation. Unpublished paper. Garlipp, Rubens C. 2004. Recursos Forestales-Brasil. Proyecto Información y Analises para el Manejo Forestal Sustenible. Santiago, Chile: European Union/Food and Agricultural Organization. Gunningham, Neil, Robert A. Kagan, and Dorothy Thornton. 2003. Shades of Green: Busi- ness, Regulation, and the Environment. Stanford, CA: Stanford University Press. Hauºer, Virginia. 2001. A Public Role for the Private Sector: Industry Self-Regulation in the Global Economy. New York, NY: Carnegie Endowment for International Peace. Helm, Carsten, and Detlef Sprinz. 2000. Measuring the Effectiveness of International En- vironmental Regimes. Journal of Conºict Resolution. 44 (5): 630–652. Hochstetler, Kathryn. 2003. Fading Green? Environmental Politics in the Mercosur Free Trade Agreement. Latin American Politics and Society 45 (4): 1–32. _____ (with Elisabeth Jay Friedman). 2002. Assessing the ‘Third Transition’ in Latin American Democratization: Civil Society in Brazil and Argentina. Comparative Poli- tics 35 (1): 21–42. Hovi, Jon, Detlef F. Sprinz, and Arild Underdal. 2003. The Oslo-Potsdam Solution to Measuring Regime Effectiveness: Critique, Response, and the Road Ahead. Global Environmental Politics 3 (3): 74–96. Jenkins, Rhys, ed. 2000. Industry and the Environment in Latin America. London: Routledge. Jeppesen, Soeren, and Michael W. Hansen. 2004. Environmental Upgrading of Third World Enterprises Through Linkages to Transnational Corporations. Theoretical Perspectives and Preliminary Evidence. Business Strategy and its Environment 13: 261–274.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021 84 • When is Sustainable Forestry Sustainable?

Kagan, Robert A., and David Vogel. 2002. Dynamics of Regulatory Change: How Globaliza- tion Affects National Regulatory Policies. Berkeley, CA: University of California Press. Kahler, Miles, and David Lake, eds. 2003. Governance in a Global Economy: Political Author- ity in Transition. Princeton, NJ: Princeton University Press. Kahler, Miles. No date. Modeling Races to the Bottom. Unpublished paper. Available at: http://irpshome.ucsd.edu/faculty/mkahler/RaceBott.pdf. King, A., and M. Lenox. 2000. Industry Self-regulation without Sanctions: The Chemical Industry’s Responsible Care Program. Academy of Management Journal 43 (4): 698– 716. Levy, David, and Daniel Egan. 1998. Capital Contests: National and Transnational Channels of Corporate Inºuence on Climate Change Negotiations. Politics and So- ciety 26 (3): 337–361. May, Peter H. 2004. Forest Certiªcation in Brazil. Paper presented at the Symposium “Forest Certiªcation in Developing and Transitioning Societies: Social, Economic, and Ecological Effects.” Yale School of Forestry and Environmental Studies, New Haven, Connecticut. McAllister, Lesley Krista. 2004. Environmental Enforcement and the Rule of Law in Brazil. Ph.D. Thesis. Energy and Resources Group, University of California at Berkeley. Murphy, David F., and John Bendell. 1997. In the Company of Partners. Bristol: Polity Press. Prakash, Aseem, and Matthew Potowski. 2005. Green Clubs and Voluntary Governance: ISO 14001 and Firms’ Regulatory Compliance. American Journal of Political Science 49 (2): 235–248. _____. 2000. Responsible Care: An Assessment. Business and Society 39(2): 183–209. Rees, Joseph. 1994. Hostages of Each Other: The Transformation of Nuclear Safety Since Three-Mile Island. Chicago, IL: Chicago University Press. Reinhardt, Forest. 1999. Down to Earth: Applying Business Principles to Environmental Man- agement. Cambridge, MA: Harvard Business School Press. República Argentina, Ministerio de Desarrollo Social y Secretaria de Ambiente y Desarrollo Sustentable. 2002. Primer Inventario Nacional de Bosques Nativos. Buenos Aires: Secretaria de Ambiente y Desarrollo Sustentable, Dirección de Bosques. Sánchez Acosta, Martin. 2000. Recursos Forestales Argentinas. In Argentina: Sector Forestal, edited by L. Corindalesi, L. La Rosa, S. Brandon, D. Pinasco, and C. Frisa. Buenos Aires: SAGPyA, Diciembre 2000. Schorr, Martin. 2004. Industria y Nación: Poder Económico, Neoliberalismo y Alternativas de Reindustrialización en la Argentina Contemporánea. Buenos Aires: Edhasa. Utting, Peter, ed. 2002. The Greening of Business in Developing Countries. London: Zed Books. Vogel, David. 1995. Trading Up: Consumer and Environmental Regulation in a Global Econ- omy. Cambridge, MA: Harvard University Press. Weidner, Helmut, and Martin Jänicke, eds. 2002. Capacity Building in National Environ- mental Policy: A Comparative Study of 17 Countries. Berlin: Springer. Young, Oran R. 2001. Inferences and Indices: Evaluating the Effectiveness of Interna- tional Environmental Regimes. Global Environmental Politics 1 (1): 99–121.

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/glep.2006.6.2.55 by guest on 23 September 2021