Movements Toward Responsible Timber Sourcing

Movements Toward Responsible Timber Sourcing

Rachelle Jackson looks at some of the policies and projects that are trying to tackle the challenges of illegal logging.

Sourcing pressures often drive corporate procurement managers to the ends of the globe, looking for the ideal combination of quality, price, and timeliness.

This search often ends in developing regions, like South East Asia, where high quality timber and wood products can be purchased at the lowest prices.

Under pressure from retail giants like Wal-mart, many companies find themselves unable to compete without capitalizing on this low cost source.

However, with the low price also comes a high risk, in the way of illegal logging from lands with a high conservation value.

Unable to pass-up the low cost wood in this competitive market, leading retailers, some of whom are known for their robust environmental programs, continue to source from these regions.

Yet what do these retailers do to mitigate their risk from sourcing wood products that are potentially illegal?

Procurement Policies and the FSC

Many retailers use “procurement policies” to define and guide their wood sourcing decisions. These policies normally reiterate the organization’s goal to not intentionally utilise wood from protected or endangered forests.

Most of these policies endorse outside forest management standards as a means of reaching this goal; perhaps the best known of these is the Forest Stewardship Council, or FSC.

The FSC certification standard governs forest management and wood use, attempting to ensure sustainable use of the land. Forest and wood processing operations that are able to obtain FSC certification for their operations are considered low risk for buyers.

Retailers such as B&Q, Lowe’s, IKEA, and Kinko’s all recognize the FSC in their procurement policies as the highest standard, and in some cases, the only acceptable standard, for forest and wood processing operations.

This is due in part to the fact that FSC is widely viewed as the only certification scheme having global application and endorsement from major environmental groups.

Unfortunately, FSC certified forests dominate in the United States and Europe, where the risk of illegal logging is comparatively low, while high risk regions such as Indonesia, Brazil, Russia, and the African Congo account for only around 6% of global FSC certifications.

The reasons for this imbalance in regional certifications, while not entirely clear, include in part the different political and economic situations in the least developed regions.

For example, Indonesia’s former President Suharto left a legacy of corruption throughout the state. Powerful timber interests continue to influence forest policy, while reformist lawmakers struggle to create adequate protections for the forests.

In addition to the political legacy of corruption, Indonesia also must confront economic challenges in protecting their forests. Unscrupulous agents pay impoverished locals to act as illegal loggers on their behalf. Fighting illegal logging means fighting against what has, for some, become a way out of poverty.

These loggers often respond with violence to land owners and government agents that attempt to inhibit their illegal activities. In an environment such as this, it is difficult to build sustainable practices that reflect the high standard of the FSC.

In fact, all of the forest operations in Indonesia that managed at one point to obtain FSC certification subsequently had their certification withdrawn after they failed to continue to meet the standard in their long-term forest practices.

If FSC is not yet a realistic option for these regions, what standards can be applied to allow credible measurement of forest practices in nations where the rule of law is often lacking?

Viable Alternatives

Realizing the current geographic limitations of FSC, some retailers have approved alternate forest standards schemes.

Although lacking the theoretical global reach of FSC, as well as recognition by major environmental non-governmental organizations, these alternate schemes represent an intermediate step for regions and suppliers who, for external political and economic reasons, are not yet ready for FSC.

Regional schemes in non-FSC strongholds include the International Tropical Timber Association, the Malaysian Timber Certification Council, and Lembaga Ekolabel Indonesia.

Most retailers reserve the right to approve these schemes on a case-by-case basis. B&Q, the U.K. home improvement giant, outlines a portion of their exemption plan in the following way:

“B&Q recognizes that FSC currently has the best available standards and certification procedures and so will only buy products certified under the FSC scheme. […] The following exceptions do however apply, at present:
  • Products certified by other schemes, which in our judgment are likely to achieve mutual recognition or accreditation by the FSC

  • Products certified by other schemes, which in our judgment require improvement before they are likely to achieve mutual recognition or accreditation by the FSC, but which nevertheless provide some reassurance on forestry standards.
In addition B&Q will, on a very limited basis consider buying timber from sources still under development, but only when there is an independently verifiable action plan being implemented to drive continuous improvement and ultimately certification.”

By way of contrast, other retailers may prefer not to take upon themselves the responsibility of assessing each of the many national and regional certification schemes.

Instead, they prefer to participate in partnership projects oriented toward building sustainable practices at the supplier level.

Step-by-Step Goals

The WWF Global Forest and Trade Network (GFTN) offers a good example of a partnership project which strives to connect retailers with suppliers who are making committed and incremental improvements to their forest management practices.

Consisting of over 30 national Forest and Trade Networks, the GFTN works with the supplier members in each country to prepare them for achieving certification under a credible certification scheme, such as FSC.

Applied in a country like Indonesia, the program works as follows: a local forest concessionaire signs up with WWF-Indonesia as a member of the FTN, committing to work toward the end goal of certification over a five year maximum period.

The concessionaire then undergoes an assessment in which their forest management practices are thoroughly reviewed and evaluated. Following the assessment, an action plan is created and aligned to an implementation timetable.

The concessionaire must begin implementing corrective actions through their management systems and making the appropriate changes that will ultimately help them qualify for certification.

Along the way, the WWF-Indonesia provides this concessionaire with technical support, including training for forest managers comprised of 20 modules designed to provide the tools necessary for certification.

This step-by-step concept is mirrored in the procurement policy of IKEA, which defines the expected progression of suppliers over time to ensure realistic movement toward certification.

Suppliers are expected to progress from one step to the next within a realistic period of time, e.g. from unknown wood sources, to known wood sources and compliant to forest laws, to compliance with IKEA requirements, and finally to compliance with an IKEA-recognised certification, such as FSC.

Both IKEA and the WWF programs recognize the inherent difficulties and challenges of sustainable forest management and responsible timber sourcing by creating realistic targets for change over time, rather than expecting overnight improvements.

Industry Projects

Other projects are looking to technology to fight illegal logging and promote sustainable forest management practices. The Nature Conservancy, a U.S.-based environmental group, is working with two Indonesian logging companies to begin tracking their timber via computerized bar codes.

Sponsored in part by the Home Depot, the goal of the pilot project is to allow the origin of the trees to be determined at any stage of production from the bar code. To allow that to occur, the bar code would remain on the tree throughout the production process, including when turned into a final product.

The Nature Conservancy has also spearheaded collaborative efforts to create a preferential market for legally logged timber, hoping this will decrease the amount of illegally logged wood.

The Conservancy invited villagers in Borneo to discuss a logging deal wherein the village would receive payments for trees, kept in a trust fund overseen by village leaders, funding roads, medical clinics, and electric generators. In return, the logger would have access to the forest and would strive to log in an environmentally responsible way.

These creative policies and projects reflect a wide array of efforts by retailers to overcome illegal logging and promote sustainable forest management in the most challenged areas of the world.

While some campaigners say that the pace of change is just not quick enough when it comes to saving the world’s threatened forests, at least some parties are trying to come up with sustainable solutions, long and hard though the road may be.

The fall out between the World Wildlife Fund and the Indonesian firm Asia Pulp & Paper over the viability of the latter’s sustainability action plan earlier this year highlight how hard it often is to drive long term change in timber.

The expulsion of Tesco from another group, WWF 95+, over standards and WWF’s disagreement with Tetra Pak over communicating paper policy and verifiable change show that differences remain over timescales for action between corporates and environmental groups.

Clearly, many NGOs also have serious doubts about the real commitment of some wood-sourcing companies that have signed up under pressure, to certain projects. Equally it is also obvious that some good progress has already been made.

The big challenge, of course, is to tackle the root causes of poverty where vulnerable forest still lies and illegal loggers prevail over under funded and unwilling law enforcement authorities. That will take a little longer.

Rachelle Jackson is the director of research and development at CSCC, a corporate social responsibility service provider.

This article has been reprinted courtesy of Ethical Corporation. It was first printed in October 2004.