How Effective Is The Forest Stewardship Council In Achieving Sustainable Forest Management Business Essay

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Over the past few decades the rate of deforestation has increased due to increasing demands and consumption from a rising population. There are many drivers of deforestation, including agriculture,

One of the biggest drivers of deforestation is agriculture as farmers remove forests to create space for planting crops or livestock. Deforestation damages the quality of the land; at a local scale it leads to soil degradation and at a global scale it contributes to global warming. Furthermore forests also play a key role in the carbon cycle and as wildlife habitats (Fairhead and Leach 1995, Nyerges and Green 2000). Each year approximately 13 million hectares of forest cover are lost (FAO 2005). This has resulted in an increasing concern and demand for sustainable management of forests, especially from environmental non-governmental organisations (ENGOs). Financial realities make it unlikely that deforestation will cease to continue. Therefore the most workable solution is to manage forest resources sustainably ensuring that felling which does occur is balanced by the planting of young trees to replace older ones and to eliminate clear-cutting, which is the total removal of the forest environment, to ensure the forest remains intact. Here the Forest Stewardship Council (FSC) is a key player, which uses certification of products that are sourced from forests which are managed sustainably. The aim of this essay is to describe, explain and evaluate the FSC. In order to evaluate the FSC the essay will be split into three main sections. Section one will give an overview of the FSC as a market-based mechanism for environmental conservation examining its main aims and objectives, and explaining how and why eco-labels work. The second section will evaluate the FSC, looking at the successes of the certification and eco-labelling practices. However, the final part will challenge this and argue that there are some weaknesses of the FSC certification scheme. In particular the essay will analyse whether forest resources are managed sustainably. It will also outline recommendations for improvement. In order to gain a succinct analysis his essay will focus on tropical rainforests in Latin America. Finally, the conclusions reached are that the FSC has had a lot of success however, the future is uncertain as there are some important weaknesses that need to be addressed. There are still improvements to be made; arguably the most important would be addressing how small-scale producers could also benefit from the certification scheme.

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Outlining the FSC

There is no single guide to analysing the state of the environment, thus it is usually evaluated in terms of individual resources or measurements of environmental quality. Environmental quality can be measured by the stock of forests. Forests have received considerable attention for their role in soil and water conservation, wildlife habitat, the carbon cycle and biodiversity protection, as well as a source of raw material for the timber industry and local communities (Panayotou 2000). Deforestation occurs for many reasons, such as for agriculture, logging operations and as a result of growth in urban sprawl (Livi-Bacci 2001). This has negative impacts on the environment, for example trees play a critical role in absorbing greenhouse gases which drive global warming. Therefore less tress results in an increase speed of global warming (National Geographic 2010). At a local level deforestation results in soil degradation, which

However, one of the immediate threats to forests is poor forest management policies. Forest policies must be implemented to provide incentives for local people to manage forest resources (Fox 1993). Tiffen and Mortimore (1994) claimed that better management would ensure forest environments are protected. Forest certification arose as a new method for governing forest resources. Certification ensures forests are managed sustainably through third-party audits. Additionally, the use of a label or logo gives a guarantee to consumers that the product comes from an environmentally responsible and economically viable forest management (Cashore et al 2005). Environmental certification of commodities is a voluntary market-based method and requires independent compliance verification and involves prescriptive standards (Jacquet et al 2010).

The Forest Stewardship Council (FSC) is one of the most well known organisations which uses certification to manage forest resources responsibly. The FSC defines sustainable forestry as "promoting good forest stewardship to assure that forest products, including timber, are environmentally benign and socially acceptable" (cited in Hock 2001:361). The FSC is an international non-profit, multi-stakeholder organization established in 1993 to promote responsible management of the world's forests. The FSC sets standards and uses independent certification and labelling of forest products to ensure forest environments are managed sustainably. The FSC uses principles and criteria to assess how forests should be managed to meet economic, social and environmental needs of present and future generations. The FSC criteria are the strictest and have the highest social and environmental requirements then any forestry eco-label. Some of the principles and criteria include reduction of environmental impact of logging activities, appropriate management of areas that need special protection and long term land tenure and use rights. Policies and standards are developed such as guidelines for certification to support responsible forest management worldwide. The FSC provides three different types of standards which are global forest management standards, chain of custody standards and standards for the accreditation of independent certifiers (Pattberg 2005). These standards also address workers rights, environmental impacts and monitoring (Moffat 1998). The FSC is the only forest certification scheme that operates at a global level. It sets global standards which provide a framework for more specific standards in certain countries or regions (Taylor 2005). 73 million hectares of forests in more than 50 countries around the globe which have FSC certified forests (FSC 2010). The FSC has certified forests of a wide variety of tenures such as small forest owners, government lands an companies. These range in size from 5 hectares to 1.8 million hectares (Ozinga 2001).

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This process is democratic, transparent and inclusive, as the public are encouraged to participate. Therefore, the FSC uses a multi-stakeholder approach to provide solutions to forest degradation. The membership includes a range of actors such as consumer groups, retailers, traders and environmental organisations. Governments are forbidden from being members (Hock 2001). This approach means that social, environmental and economic interests are all given an equal value in the policymaking process (Cashore et al 2005).

Based on these standards, the FSC has developed an international eco-label for forest products (see figure one). The distinctive logo is marked on certified timber and wood products, which is promoted to consumers via in-store publicity and media coverage. The eco-label is used on products around the world to offer consumers a guarantee and the ability to choose products from socially and environmentally responsible forestry. The FSC has labelled many products ranging from toilet paper to Christmas cards. Certification allows timber growers to invite independent bodies to assess their forest management practices against the FSC criteria. If they perform well they can then label their timber with the FSC logo. The logo also states what percentage of the product has been source from well-managed forests (Pattberg 2005).

Figure 1: FSC Eco-Label (Source: www.fsg.org)The FSC eco-label works by providing an incentive in the market place for responsible forestry. For forest owners and the forestry industry, certification provides an opportunity to maintain or obtain market access (Ozinga 2001). The eco-label also works by assuming that consumers are keen to support sustainable forests and will actively seek products with the FSC eco-label on them. It therefore offers a potential a competitive advantage and distinguishes companies from other manufactures and producers (Thøgersen 2000). The FSC eco-label also provides companies with a third part verification of their sustainable practices (Bass et al 2001). Furthermore forest certification offers communities with a defence against criticism for their alleged role in forest degradation (Taylor 2005). Additionally corporate social responsibility (CSR) was also a reason for companies to seek certification. In Argentina for example, companies considered it part of their CSR and "the right thing to do" (Araujo et al 2009:580). Therefore for eco-labels to work effectively and for the FSC to achieve its objectives, they must operate in the mainstream market (Taylor 2005).

Successes of the Forest Stewardship Council

Overall, forest certification has been very successful in raising awareness and spreading knowledge about economic, social and environmental issues worldwide (Rametsteiner and Simula 2003). If public attention continues, the demand for certified products should increase or at the very least, remain constant. Thus the FSC's global success has ensured public attention and has guaranteed that there is a market for certified products. It has also been a key resource for communities to gain more secure land and resource tenure. In particular the FSC is considered the most successful forest certification scheme and is claimed to be the most effective in terms of its impact on forestry (Pattberg 2005). Many authors have commented on the success of the FSC for example, Meidinger (2006) argues that the FSC is the driving force in forest certification. Furthermore, Conroy (2007) states that the FSC should be credited for improvements in forest management practices. Due to the FSC more timber products are arriving in stores from areas which are more sustainably managed than before. Therefore, because of the FSC, Visseren-Hamakers and Glasbergen (2007) argue certification of sustainable timber has become normal. Thus, the significant degree of success of FSC certification illustrates that market-based instruments can be used to make progress toward environmental and social goals (Taylor 2005). It has also been a successful model of private rule making and implementation (Pattberg 2005).

More specifically the FSC has the strongest performance-based standard, which includes social, economic and ecological aspects of forest management. The FSC cover a range of environmental, social and economic issues of sustainability such as biodiversity conservation, use of pesticides and workers rights, which are all addressed in national FSC standards, and are not present in other schemes. The FSC also has criteria and indicators that vary from region-to-region or country-to-country, but all have to implement global performance-based FSC principles and criteria. Therefore these standards include the most relevant environmental and social issues in each country where they are applied. The FSC label is used on products where the whole chain of custody is audited, even if stages of the processing are in different countries, to ensure that the certified product genuinely originates from a specific certified forest. The FSC's processes are quite transparent at all levels, from national standards-setting consultations to accreditation procedures. One indication of the FSCs success is the constant support and cooperation of the various environmental and social organizations and the endorsement by various public actors (Pattberg 2005).The scheme has also been supported by many NGOs as a credible scheme for the certification of forest products (Ozinga 2001). For example, Greenpeace currently recognises FSC as the most credible certification scheme for forest conservation (Greenpeace 2008). Certification take place at the forest management unit level. The FSC has the most rigorous and clearest procedures for certification and standard setting (Ozinga 2001).

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This has led to some success in tropical forests. There is a widespread support across Central America and Mexico for the FSC's role in forest certification and as a guarantor of national indicators (De Camino and Alforos 2000). In particular, certification holders indicated that it helped improve market access, and better landowner and supplier communication. In 2002 the FSC had 100% of the market share of Latin America. Producers of tropical timber have reported to have gained access to new markets and consumers in Europe and the United States (Eba'a Atyi and Simula 2002). Brazil has the largest area certified by the FSC in Latin America and it if often argued to be one of the FSC main successes (Schulze et al 2008). Certificate holders stated there was an improvement of forest management and practices, and in retaining and gaining market access. For example, the Brazilian company Mil Madereira Itacoatiara (MMI), which has an area of 80,000ha, stated that the FSC certificate had increased the national credibility of the company (De Camino and Alforos 2000). The FSC is the only option where producers can gain international recognition (Ayti and Simula 2002). Therefore the FSC certification scheme ensures that forests are managed sustainably while also bringing benefits to the producers.

However, the future of the FSC in Brazil will depend in the international market and the demand for certified forest products (Araujo et al 2009).

Furthermore, in Bolivia approximately 1 million ha of forest have been certified under the FSC scheme. In Bolivia it is seen as an important driver for the implementation of sustainable forest management practices and better access to export markets (Nebel et al 2005). Bolivia now exports 51% of its forestry products to North America, and overall, 80% of Bolivian exports reached potentially 'green markets' (Ebeling and Yasue 2009). In Bolivia there is now a more interactive process between legal forest reforms and certification (Segura 2004). Therefore, the FSC has successfully ensured sustainable management of tropical forests, particularly in Brazil and Bolivia. This has resulted in these countries gaining access to markets that were previously unavailable to them.

Finally, and perhaps most importantly, one of the key strengths of the FSC is its emphasis on stakeholder involvement in evaluation and standard setting has created new spaces for community participation in policy debates. Multi-stakeholder standards ensure there is consensus-building and knowledge sharing. The FSC uses multi-level governance and has developed a mechanism for stakeholder consultation. The FSC is the only scheme where social, environmental and economic stakeholders have equal say (Ozinga 2001). Thus the FSC consists of a re-scaling of environmental governance, where by multiple stakeholders in commodity networks such as private sector producers, retailers, consumers, and social movement actors, cooperate in the governance of a commodity network (Klooster 2010). Furthermore, representatives from southern and northern countries each have half of the votes, which ensures a fair representation of both sides (FSC 2005). This makes the organisation unique due to the balance of power between the different interest groups. It ensures that one group does not dominate the decision making process, allowing input from all members and non-members (Vallejo and Hauselmann 2004). The mutli-stakeholder process of the FSC also has benefits for policy discussions and stakeholder relations, especially in countries where there is weak forestry governance (Pattberg 2005). This results in the FSC standards being more specific and well-elaborated (Fransen and Kolk 2007). Thus the FSC gains good governance through multi-stakeholder involvement, as it helps to build consensus and solutions, and also helps to improve equity between different stakeholders. This process also shows the shift from 'government to governance' within the international forest governance system (Visseren-Hamakers and Glasbergen 2007). Furthermore, the mutli-stakeholder nature of the FSC helped to create the FSC's buyer groups, which are key drivers of the FSC though supply chains. These buyer groups made up of companies that commit to purchase only FSC certified products have been a main part of the FSC success (UNEP 2005).

However, different stakeholders sometimes have competing goals for forest certification (Ozinga 2001).

Negative

Despite the success of the FSC, it still has many weaknesses. Perhaps the main weakness is that the FSC is not fulfilling its original intention of conserving tropical forests and biodiversity in tropical areas. Overall forest certification appears to benefit the most powerful participants with the best managed forests (Kruedener 2000). The FSC has had most success in the North, in temperate and boreal forests. However, this means that the FSC certification may not be having the desired positive impact on the world's most threaten forests (Eba'a Atyi and Simula, 2002). Public concern over tropical deforestation played an important role in establishing forest certification; however, temperate and boreal forests now represent the vast majority of FSC certified forests. Three years after FSC's founding, 70% of all certified forests were still found in developing countries, however today the vast majority are in the United States and Europe (Taylor 2005). Almost 80% of the FSC-certified forests are located in the North, and about 20% are in the South (Pattberg, 2005). In particular only 12% of the schemes certified areas are in tropical forests (Eba'a Atyi and Simula, 2002). Thus, the original intention to save tropical biodiversity and forests through certification has been unsuccessful to date. The most important region for certified forest areas is now Europe (Rametsteiner and Simula 2003).

This shift to boreal and temperate forests in the North has meant that the FSC has evolved from an NGO that is concerned with deforestation and degradation, particularly in Southern forests, to an organisation which is buyer driven and involved in large quantities of certified wood products. This has led to a focus on big producers who already have well managed forests and can readily supply the produce (Bass et al 2001). Therefore, the growth of the FSC has occurred in Northern forests, rather than as originally envisioned, among the smallholders, community and indigenous groups in the threatened tropical forests of the South. This shift has been due to a lack of price premiums, as retailers argue that end-consumers are unwilling to pay more for certified wood products. Furthermore there are relatively higher certification costs in the South and insufficiency in production and commercialisation (Taylor 2005). Moreover, environmentally sensitive markets mainly exist in Europe and North America; therefore producers from developing countries have less access to these markets, which means northern producers have the majority of certified forests by the FSC (Gullison 2003). Therefore the FSC certification is not a global solution to managing forests (Pattberg 2005). The FSC therefore only works for tropical forests if a high proportion of its products are sold to foreign markets that are environmentally sensitive (Micheletti et al 2009).

Thus this form of private governance benefits some type of actors, which it evidently disadvantages others. For northern companies, compliance with the FSC principles and criteria is relatively easy compared to those in developing countries, because regulation is already tight in industrial nations, and therefore they usually already have well-organised and managed forests. This makes it easier for them to meet the FSC standards and criteria (Taylor 2005). Furthermore, private environmental regulation can be used as a strategic tool for companies to drive others out of the 'green' markets, rather than as a global mechanism for sustainability (Pattberg 2005).

Tropical producers have less access to environmentally sensitive markets. Only 14% of Amazonian timber production is exported, which the remainder is used primarily in southern Brazil, which at present demonstrates little or no concern about the origin of its timber. Therefore, the incentive of market access only benefits global producers, primarily located in temperate countries (Gullison 2003).

Some critics argue that the certification process intensifies inequalities among participants. Forest certification has not resulted in improved direct incomes for producers or access to new markets. Certification has mostly resulted in greater market stability for producers that already have market access, as certification increasingly becomes a requirement for entry. Therefore a solution is needed to make community forest certification economically feasible in the long term. Large retailers exercise power of the certified wood products supply chain. They gain benefits from certification without a price premium. Their primary interest in certification lies in reputation enhancement and risk management as it protects them from criticism from government regulatory agencies and environmental groups. This has led to a shift in the FSC as a tool for more sustainable forest management to one of improved marketing of forest products. However, if the FSC are to ensure progress towards their goals, they neither isolate themselves from mainstream markets nor abandon their alternative visions of the market. The FSC's commodity chain does not aid more direct ties between consumers and producers. The global market can lead a movement away from original objectives (Taylor 2005).

Arguably, the most important failure of the FSC is that is has created market barriers to the people it originally tried to help. Relatively few FSC certificates have been issued for communal or community forests (Thornber 1999). The FSC encourages the inclusion of community or indigenous groups; however, there are significant barriers to certification for communal forestry (Molnar 2003). Certified community forestry operations still face the same barriers to international markets, such as lack of commercialisation expertise and organisational inefficiencies (Fernandez and Alatorre-Guzman 2003). Small scale producers find it difficult to gain access as they cannot afford the certification costs due to lack of price premiums. Furthermore, certification in tropical forests is more costly than temperate or boreal forests because non-tropical forests are less complex and thus require less auditing time (Pattberg 2005). De Camino and Alfaro (1998 cited in Pattberg 2005) did a study of natural forests in Latin America and found certification costs for small-scale forestry were up to four times higher than for larger operations. For example under Mexican conditions, average evaluation and monitoring costs can total $US 36,000 over five years. In Mexico, Guatemala and Bolivia community forest certification has been financed by international donors, government grants and the forestry industry (Molnar 2003). However, these subsidies cannot continue indefinitely (Taylor 2005). Therefore forest owners claim the FSC scheme is not suitable to deal with small-scale forestry. Furthermore as the certification provides no price premium, it offers little incentives for small scale producers to join (Klooster 2010). Moreover, certification has not provided niche markets where communities can compete successfully. Furthermore, literacy problems also create barriers to small scale producers in developing countries, as complicated paper work is required.

It is large retailers that control markets which are not accessible to small-scale or community based producers. The certified wood products market increasingly resembles a buyer-driven commodity chain, with large global retailers like B&Q and IKEA as the key actors. Yet, these retailers control markets that are not readily accessible to small-scale or community-based forest producers in the South (Taylor 2005).

The FSC has been criticised by a variety of environmental organisations, such as the World Rainforest Movement. They argue that monoculture plantations do not support biodiversity. The Ecological Internet campaigned against the FSC arguing that its support for logging old-growth forests was completely at odds with its purpose. It has campaigned to ask NGOs to withdraw their support for the FSC including Greenpeace and WWF (Hance 2008). Another criticism of the FSC is that it supports plantations, whereas research has shown that monoculture plantations do little to support biodiversity. Tree plantations contribute to the degradation of forests. Monocultures of trees destroy the original vegetation where they are planted. Furthermore due to their high level of water consumption plantations have a negative effect on biodiversity in adjacent habitats or farmland. Few facts would support a conclusion that forest certification is a particularly effective instrument for biodiversity maintenance (Rametsteiner and Simula 2003). A tenth plantation principle, added in 1996, has led to a standoff between industry players and supporters (mainly certification bodies) that benefit financially from their involvement with the FSC system and other "green" groups that do not support the certification of environmentally and socially destructive industrial tree plantations under the FSC. This impasse has led to many NGO members withdrawing their support for FSC, but the organization continues to certify plantations that damage biodiversity. In reality, few tree plantations that have been certified by FSC meet all its criteria. FSC certification still permits the use of toxic substances in plantations and forests (Menne 2010). Plantations currently make up approximately 12% of the total area certified by the FSC (Pattberg 2005)

My analysis here suggests that certification schemes like the FSC do not offer a clear example of "actually existing sustainability" (Klooster 2010).

Therefore, investments are needed, particularly in tropical countries to reduce the costs of certification and increase the benefits to the producers. There is also a need to increase consumer education to generate greater awareness and increase consumers' willingness to pay. Furthermore, promoting forest certification will also increase financing for the scheme (Gullison 2003). More resources are needed to help Southern producers achieve certification.

In Latin America regional groups lack the structure and economic size to become certifiers (de Camino and Alforos 2000).

FSC funding is problem-prone issue. Greater profit might be a necessity however this counters the fundamental idea of the FSC and therefore might jeopardize its credibility. The need to secure long-term financial stability includes the possibility of moving from a non-profit organisation to a business of its own. For the FSC eco-label to be an effective mechanism of governance towards sustainable development demand for certified products needs to be sufficiently high. Therefore the shortcomings analysed above need to be addressed market-based methods achieve sustainable development through good governance (Pattberg 2005).

There is a need to increase awareness, especially in tropical countries. For example, in Ecuador, there is limited awareness about certification among government officials (Ebeling and Yasue). Plenty of work needs to be done before certification becomes common in the tropics (Taylor 2005).

Access to FSC certification by small businesses could be improved further, although many improvements have been made recently (Ozinga 2001). Most participants, particularly those in the global South, have yet to find that certification opens doors to significant new markets (Taylor 2005).

Furthermore, certified timber is still a niche market and most timber traded worldwide is not certified. Therefore, there is a need to further promote forest certification to ensure in benefits all types of forests (Visseren-Hamakers and Glasbergen 2007).

One of the main reasons why FSC is successful in Bolivia is that it exports a large amount.

However, FSC certification in Germany is both suitable and affordable for small forest owners (Ozinga 2001).

Conclusion

In conclusion, the FSC has received a lot of praise and is considered a successful scheme for raising awareness for sustainable forest management practices. It is the most well known eco-label for forest environments and it is the only scheme that acts on a global level. As discussed above the essay has also highlighted how the FSC has the strongest performance based standards. It has also outlined examples of success in tropical forests in Latin America.

However, this essay has also challenged this and argued that there are some failures for providing sustainable forest management in Latin America. It has argued that temperate and boreal forests in the North represent the vast majority of FSC certified forests. Therefore the most threatened tropical forests are not being sustainably managed. It has also argued that the FSC has created barriers to the small scale producers it originally intended to assist. Thus the FSC does not ensure sustainable managed of forests globally, and most importantly it fails to meet its original goals.

In general the FSC certified forests are better that none at all however, the future of the FSC remains uncertain. Consequently, improvements are needed to ensure sustainable forest management. Arguably the most important would be addressing how small-scale producers could also benefit from the certification scheme. This would involve making certification more affordable for small-scale producers, especially in developing countries in the tropics.

This issue is therefore not whether certification is beneficial when considered in isolation but rather what improvements should be made in order for the FSC to benefit all producers globally. Furthermore deciding how funding and investment should be spent. It could be argued that in the future greater funding is needed in order to benefit tropical forests in the South and small-scale producers.