FO:APFC/2000/10  |
| FO:APFC/2000/10 |
ASIA-PACIFIC FORESTRY COMMISSION |
Item 7 of the Provisional Agenda |
EIGHTEENTH SESSION |
Noosaville, Queensland, Australia, 15-19 May 2000 |
IN-SESSION SEMINAR: CERTIFICATION AND FOREST PRODUCT LABELLING: A REVIEW |
Secretariat Note |
1. This paper provides a brief background on the subject of certification of the sustainable management of forests and the labelling of forest products. It reviews where certification stands at present, what some of the important issues concerning it are, and where it may be going in the future. The purpose is to provide a basis for more detailed discussion, and particularly to raise some questions that require attention1.
2. Certification of forests and the associated labelling of forest products continue to be a high profile subject in the forestry sector. Despite the considerable attention it has been receiving, certification remains a complex, and in many situations, a controversial subject.
3. There are two main components to certification:
4. The first involves an investigation of all aspects relating to the forests - including social, economic and environmental conditions - and assessing how the management of these are being addressed. The process may then include the second component, that of product certification and the associated labelling.
5. Currently a wide range of actions are underway concerning certification. Although main emphasis to date has been on timber and timber products, attention has recently expanded to include pulp and paper products. There is also some interest in developing a certification system for non-wood forest products.
6. Certification commenced with a strong focus on the goal of improving forest management standards, and in particular contributing strongly to reducing the rate of deforestation and degradation of the world's forests - with initial focus heavily oriented to tropical forests. The aim has been to use market forces to encourage or force improved management of the forests. Those promoting it hope that buyers will show a preference for certified products, which in turn will either encourage producers to improve their forest management in order to tap this demand, or force them to do so under the threat of losing markets if they do not. The focus has, however, changed considerably as the realities of what it might or might not be able to achieve have become recognized. It has also changed to reflect the interests of the many different groups that have become involved with it in one way or another - environmentalists, forest managers, governments, industry, traders, retailers, certifying companies, consultants, investment firms, aid agencies, etc.
7. It is currently being promoted for a variety of reasons - from forest management reasons to marketing reasons. Despite its stated purpose of improving forest management, the main interest of most of those undertaking certification at present is probably in the marketing benefits it may offer them. The aim is to either increase market share, or at least avoid loss due to boycotts or restrictions such as are increasingly common in some parts of Europe and the United States of America.
8. As an instrument, certification has both strengths and weaknesses which vary with the specific circumstances of the country, the ownership of the forests, the social environment and, last but certainly not least, the markets served. A point that should be noted is that sustainable forest management is possible without certification, but the reverse is not.
9. Suggested benefits from certification include the following:
10. Possible disadvantages include:
11. Its benefits are thus varied, as are its disadvantages.
12. Certification schemes continue to be developed or studied at international, regional and national levels. They exist in both developed and developing countries. Only a small number of schemes are operational at present, and the volume of timber covered by them is relatively small.
13. Certification is in a continual state of flux as new processes emerge, old ones become modified, or various systems come to some level of agreement or recognition. Among importing countries, attention continues to be greatest in (and largely restricted to) Western Europe, especially the United Kingdom, Germany, and the Netherlands where environmental groups are active and where some retail interests see a potential market advantage from providing certified products. Some areas and some major retailers in the United States of America are also showing increasing interest. Important markets in Asia (such as Japan and China) and Latin America (Brazil) are showing limited interest.
14. For exporting countries, most interest and activity is occurring in those countries whose main export markets are showing greatest interest. A number are working to develop schemes in order to ensure the markets remain open to them, or to benefit from any actual or perceived market opportunities. Amongst these are: Indonesia, Malaysia, Sweden, Finland, Norway, Canada, the United States of America, Brazil, New Zealand and Australia. Domestic consumers in most of these countries are not generally showing an interest in certified products. The attention of the main producers is thus because of the interest of some of their export markets, not of their own domestic consumers.
15. The most obvious sign of growth in certification is the area of forests certified little of which are in tropical areas. However, the area data provides little indication of what is being traded. While data on trade in certified products is very sketchy, it is clear that the volumes on the market are very small in regional or global terms, and most of the trade is concentrated in a few market segments.
16. Two important changes in attitude have emerged recently: one is the increased interest/ attention that is being given to mutual recognition/harmonization of the different certification processes. Initially there was considerable resistance to even discussing the idea, and some of the early players had fixed positions and attitudes on the subject. A number of recent moves indicate a greater willingness to acknowledge that many different processes have merit and may even be acceptable alternatives. There is little support for the idea of harmonization, but growing support for mutual recognition.
17. The other is the increasing use of the term certification/verification, with the implication that these are two linked, but not synonymous, actions. Certification is a means of verifying a standard, but there are also other means of verifying without formal certification. For example there is a view that national-level criteria and indicator processes could be used to verify standards at a national level, rather than taking the more costly and time-consuming route of certifying specific forests; another is a greater reliance on country laws and regulations. Views on this, and other options, differ however.
18. Forest products trade in Asia-Pacific is largely inter-regional. The main exporters of products that are being certified - namely logs and sawnwood - are in order of importance, Malaysia, Hong Kong (Special Administration Region of China),2 New Zealand, Indonesia, Myanmar, China and Papua New Guinea. The main export markets for logs and sawnwood from these countries are within the region itself - Japan, Australia, Republic of Korea, China, Taiwan Province of China and Thailand. These markets are showing little interest in certified products. However, the main exporters also trade sawnwood, and in some cases furniture made from this material, to the certification-sensitive markets of United Kingdom, Germany, Netherlands, and the United States of America. As a result these exporting countries are showing most interest in certification.
19. The two countries in the region which are most actively interested in certification are Indonesia and Malaysia. Both are seeking overseas recognition of their certification schemes. Indonesia has established an Indonesian Ecolabelling Institute (LEI), which has developed criteria and indicators for the auditing of forest management on logging concessions, and the ecolabelling of products from these concessions. Malaysia has established a National Timber Certification Council (NTCC) which is developing a national set of criteria and indicators based on the International Tropical Timber Organization (ITTO) framework. The Council is responsible for planning and operating a voluntary certification scheme. While Peninsular Malaysia has adopted the system, Sarawak and Sabah have not yet formally done so.
20. In New Zealand and Australia there is mild interest in certification. While interest in both countries is currently limited, industry in New Zealand is developing a Verification of Environmental Performance (VEP) report card system; and Commonwealth and State Governments in Australia are investigating an Australian Forestry Standard that would allow forest products to be independently certified.
21. Some Pacific Island countries have made moves to develop or encourage certification of small private forests or community forests. The goals range from accessing higher-priced export markets, to providing an independent assessment of the standard of forest management. Certification of such small forest areas presents particular challenges and expense. Encourage- ment and financial assistance, however, is coming from aid agencies and environmental non-governmental organizations who suggest there are market access and price benefits to be achieved. Some 40,000 ha is reported to have been certified in the Solomon Islands, and 4,000 ha in Papua New Guinea.
22. A degree of consensus has been reached on many of the important issues concerning certification, but there continue to be a number of unanswered or unresolved issues and uncertainties which will affect certification. In many countries the question of whether to support certification or not is still being debated.
23. Some of the important questions that have yet to be adequately answered include:
As far as trade is concerned there is still little evidence of the market impacts of certification - positive or negative. Even in the markets showing greatest interest there is little sign of a substantial demand, or any price premium being paid, although some large retailers are indicating they will only stock certified products in the future. A price premium for most certified products seems unlikely. Demand is being pushed by retail chains, especially the "do-it-yourself" retailers, rather than pulled by the consumer.
Most certification attention is focussed on developed temperate countries. One positive note though in developing countries is that certification has already brought increased attention and focus to forestry issues.
There is no consensus on this. There is, however, growing interest in some level of improved mutual recognition between the different certification processes.
This remains a concern for producers in developing countries who feel that, rather than encouraging improved forest management, certification will act as a barrier to trade by discriminating either intentionally or unintentionally against those who are not certified.
24. Certification is one of a number of market-based instruments that may contribute to improved management of the forests and to improved forestry sector development. As an instrument it has both strengths and weaknesses which vary with the specific circumstances of the country, the ownership of the forests, the social environment and last, but certainly not least, the markets being served. While certification will not have a direct impact, it can have an indirect effect by being an additional element to encourage stronger efforts towards sustainable management.
25. It is still difficult to predict where certification will finally settle. In the future, market interest may expand and have a significant impact; equally it could remain limited to a few markets and a few specific end-uses (e.g. high-value furniture). The deciding factor will be consumer reaction to the products - which is far from clear at this stage. The area of forests being certified will continue to expand as major producing countries, especially Canada, Finland, Indonesia and Malaysia, the United States of America, and some in Europe, finalize the systems they are developing. In turn the volumes traded will increase.
26. From the market perspective, most attention seems likely to continue to be focused on parts of Western Europe, and to a lesser degree North America. Important consumption areas in Asia (e.g. Japan, Republic of Korea, China, India, Thailand), the Middle East, and Latin America (Brazil) are likely to continue to show much more limited interest. If these latter (mainly developing) markets continue to show limited interest, certification will not account for a major share of products produced and sold worldwide.
27. Countries and individual forest owners should assess the implications of certification carefully and determine whether certification is a desirable/necessary action for them; and, if so, determine how best to proceed. Whether certification provides the hoped-for stimulus to improved forest management worldwide remains to be seen.
1
Those wishing more detailed information on the subject are referred to the documents indicated in the References.
2
Largely a re-exporter of material imported from other Asian countries.