1. Recent years have witnessed rapid growth in the use of environmental labels. The first eco-labelling scheme was introduced by the German Government some twenty years ago. Today, eco-labelling programmes exist in nearly every OECD country and are gaining importance also in a number of developing countries including Brazil, India, Indonesia and Thailand. Products such as paint, washing detergent and paper were among the first to become labelled for improved environmental standards. In the agricultural sector, products indicating organic or bio-organic production have been marketed for many years. More recently, eco-labels on forest products have been introduced, and it is anticipated that the first eco-labelled fishery products will be on the market in the course of 1999².

2. Eco-labelling programmes aim at marshalling the force of consumer demand in order to effect environmentally beneficial changes in the way firms produce, package and distribute goods.³ The eco-label conveys information to consumers indicating that among goods of the same category, the eco-labelled ones cause less environmental harm in production, consumption and/or disposal. In mandatory government programmes, eco-labels may also convey "negative" information about a product in order to encourage consumers to reduce consumption of such products or choose other products of the same category causing less environmental harm. The desired change in consumer demand as a result of the eco-label is expected to be economically rewarding for those firms which have fulfilled the requirements or standard based on which the label has been awarded.

3. According to the nature of these requirements, two main categories of environmental labelling schemes may be distinguished: (1) single issue labels and (2) multiple-criteria labels. The former address one specific environmental concern in the production or consumption of a product. Examples include the "Dolphin Safe" label on canned tuna or labels indicating that a product is "biodegradable" or "recyclable". It can be argued that many certification schemes in forestry are of the "single issue" type because their focus is on sustainability of forests and exclude subsequent stages of the products� life cycle.

4. The salient characteristic of multiple-criteria eco-labelling schemes is that the underlying certification standard relies to a varying extent on a life-cycle assessment of the environmental effects of a product in the chain from production to consumption and/or final disposal (i.e. "from the cradle to the grave"). Environmental effects may result from the product itself or by substances physically incorporated into it (e.g. toxic substances; lead content in gasoline). In this case, the environmental damage arises when the product is being consumed/used or disposed off (consumption externality). Environmental effects may also result during the production process itself (production externality). An example is the release into air, soil or water of harmful chemicals during the production process.⁴

5. Eco-labelling programmes are mostly of a voluntary nature and have proliferated in recent years. Many schemes have been initiated and sponsored by governments even though their day to day administration may rest with private parties. There is also a growing number of eco-labelling programmes initiated and administered entirely by private parties. Most eco-labelling schemes have not reached full cost-coverage and thus depend on continued financial support by their sponsors including governments, NGOs and private firms. In these schemes, certification standards are usually established through a consultative process with various interested parties including governments, industry, consumer organizations, environmental NGOs and others. The consultative process is intended to give the scheme credibility as well as also to ensure its practicability.

6. In its ISO 14020 series, the International Organization for Standardization (ISO) has classified eco-labelling schemes into the following three types:

• Based on multiple criteria aiming at life cycle assessment of environmental effects
• Bestowed only on a percentage share of products within a product category depicting above average environmental performance
• Third party verification

• Informative environmental self-declaration claims by producers

• Environmental product description containing quantitative information
• Based on set criteria
• Third party verification

7. The objective of the ISO 14 020 series is to set standards for the design and implementation of different types of eco-labelling programmes but not to lay down specific certification standards.

8. This review is not exhaustive but attempts to summarize some of the major developments which have taken place in the establishment of eco-labelling programmes for forest and food products. It does not encompass a discussion of the actual contents of specific certification standards and criteria applied for such products.

9. The introduction of eco-labelling schemes in the forestry sector was motivated by growing concern about tropical deforestation among environmental organizations, governments and eco-sensitive consumers in the 1980s. Concerned consumers, retail chains and institutional buyers including governments at local, provincial and national levels of several European and North American countries started to avoid, or even ban, the purchase of products made from tropical hardwood. Eco-labelling schemes were introduced, on one hand, as a means to reduce the demand for timber from non-managed tropical forests without taking recourse to restrictive trade measures that might be challenged under multilateral trading rules. On the other hand, producing countries with important tropical timber supplies to eco-sensitive consumers in North America and Europe were motivated to introduce such schemes to avoid losing market shares. Further motivating factors include the gaining of competitive advantages by producers, wholesalers and retailers. In more recent years, eco-labelling schemes in forestry have expanded to include products made from temperate and boreal forests.

10. The first certification scheme introduced was the United States based Smart Wood Programme in 1990. Today more than 20 companies are engaged in forest certification and several standards are in operation. Some of the standards in use are regional or national while others have made an attempt to establish global standards for forest management.

11. Most of the schemes certify operations based on guidelines and criteria to assess sustainable forest management, environmental and social impacts, and economic viability of operations. Not all the certification schemes provide a label for on-product exposure.

12. International guidelines and standards for sustainable forest management have been developed in various multilateral fora. The first organization to develop guidelines for sustainable management of natural tropical forests was the International Tropical Timber Organization (ITTO). These were developed by an international panel of experts representing a broad spectrum of interested parties including producer and consumer countries of tropical timber, environmental NGOs, UN agencies, trade and industry representatives and others. These guidelines were endorsed by the ITTO Council in 1990 and ITTO members adopted the "Year 2000" objective committing them to attain sustainable forest management by that date. While ITTO members have not yet agreed on the exact role the Organization should play with respect to eco-labelling, its has undertaken several assessments of certification programmes and their likely impacts on its members (Crossley, 1996).

13. The objectives of the Montreal and Helsinki Processes were to develop and achieve international agreement on common criteria and indicators of sustainable forest management for non-European (Montreal Process) and European (Helsinki Process) temperate and boreal forests. The Montreal Process involved the Governments of Australia, Canada, Chile, China, Japan, Mexico, New Zealand, the Republic of Korea, the Russian Federation and the United States, and started in 1993. After a series of meetings, the process culminated in the "Santiago Declaration" of 1995 laying down, inter alia, seven criteria and 67 possible indicators for sustainable forest management (Crossley, 1996).

14. The Helsinki Process was initiated at the Second Ministerial Conference on the Protection of Forests in Europe (Helsinki, June 1993), which adopted four resolutions regarding general guidelines for sustainable management and conservation of biodiversity of European forests, cooperation with economies in transition, and strategies for a process of long term adaptation of European forests to climate change. In continuation of this process, the 34 participating countries adopted in Geneva (1995), the "European Criteria and Most Suitable Indicators for Sustainable Forest Management" comprising of six criteria and 27 most suitable quantitative indicators (Crossley, 1996).

15. In a meeting in Tarapoto, Peru, February 1995, the eight signatory countries of the Amazon Cooperation Treaty (ACT) developed 12 criteria and associated indicators of sustainability for the Amazon forest which, after subsequent adoption by ACT countries, was presented at the session of the UN Committee on Sustainable Development in April 1995.

16. In more recent years, FAO, in partnership with UNEP, has initiated several regional processes in support of developing similar sets of criteria and indicators for forest management among countries not covered in the above processes, especially in Africa.

17. Whereas the above briefly described processes did not aim at the development of eco-labelling schemes, the Forest Stewardship Council (FSC), a membership-based non-governmental organization formally established in 1994, was set up with the set objective of promoting such schemes, initially for tropical timber but with its scope having subsequently expanded to include temperate and boreal forests. FSC was established to act as an accreditor of certification bodies in order to ensure that common standards are used in the certification process. It has developed through a consultative process with various interested parties global principles and criteria for good forest management which serve as the framework for the development of specific local, regional and national forest management performance standards tailored to prevailing biological, economic and social conditions. Moves are being made to elaborate these standards through national working groups in some countries and provide the basis for certification by FSC recognized certification bodies. National FSC initiatives to develop national certification standards are in progress in Belgium, Brazil, Switzerland, United Kingdom and United States. The Swedish Working Group was the first to get a national standard approved by FSC International in January 1998.

18. As of June 1998 about 10 million hectare forests have been certified by FSC accredited certifying bodies in 22 countries but with about 60 % of this area in Sweden, Poland and United States. Some forest areas have become certified in countries such as Brazil, Bolivia, Honduras, Solomon Islands, South Africa, Zambia and Zimbabwe.⁵ Most certified forests comprise large holdings. In recognition of the specific difficulties of small forest holders, FSC approved its group certification policy in August 1998. To date group certificates exist in Costa Rica, Honduras, Solomon Islands, Sweden, United Kingdom and United States.

19. FSC is funded by charitable foundations, government donors, membership subscriptions and accreditation fees. The European Union provides financial support. Within the next 3-4 years, FSC is expected to develop a system to obtain royalties for the use of its logo. As of today, there are about 2000 available products on the market carrying the FSC logo, but still the quantity of each product is very small.

20. As against FSC�s performance-based approach, the ISO Forestry Working Group has prepared a technical report to assist forestry organizations in implementing the ISO-14001 Environmental Management System Standard which is a process-based approach.⁶ Countries are using one or the other of these or a modified version, as appropriate to their own circumstances. While many consider the two approaches to be incompatible, there appears to be growing recognition that they may in fact be mutually supportive, and that a degree of mutual acceptance could eventually be achieved ( FAO. State of Forests 1999. Forthcoming).

21. A regional eco-labelling initiative was started by the African Timber Organization (ATO) in 1993 to assign a Green Label for African timber. This is an inter-governmental scheme to be based on regional criteria and guidelines (Simula, 1997).

22. A regional certification approach is pursued by Central American countries through the Central American Council on Forests and Protected Areas (CCBAP). The Council was convened under the CCAD (Central American Council for Development) in 1993 to implement the Central American Convention on Natural Forests and Plantation Ecosystems, and to take over responsibilities under the Tropical Forestry Action Plan.

23. Proposals for action on certification and labelling were adopted by the UN Ad Hoc Intergovernmental Panel on Forests (IPF) at its fourth session, 11-21 February 1997. The Panel urged countries, within their respective legal frameworks, and international organizations to consider the potentially mutually supportive relationship between sustainable forest management, trade, and voluntary certification and labelling schemes operating in accordance with relevant national legislations, and to endeavour to ensure, as necessary, that such schemes are not used as a form of disguised protectionism and do not conflict with international obligations. The Panel also invited developed countries and international organizations to support, including through technical and financial assistance, efforts in developing countries to enhance the assessment capabilities of developing countries in relation to voluntary certification and labelling. It further urged countries to seek to it that certain concepts are applied to certification schemes including open access and non-discrimination in respect of all types of forests, forest owners, mangers and operators; credibility; non-deceptiveness; cost-effectiveness; transparency; and participation that seeks to involve all interested parties, including local communities. Furthermore, the Panel invited relevant organizations to carry out further studies on various aspects of voluntary certification and labelling schemes in forestry relating to, inter alia, effectiveness, the special needs of local communities, monitoring of practical experiences, equivalence and mutual recognition, comparability, and competitiveness.

Asia

24. In Indonesia, the Indonesian Ecolabelling Institute Working Group was initiated in 1994 with three objectives: a) to set up a set of criteria and indicators of sustainable forest management, b) to design a decision making method in the timber certification process, and c) to design institutional arrangements for the formal establishment of the Indonesian Ecolabelling Institute (Lembaga Ecolabel Indonesia (LEI)). Since then, LEI has been formally established and oversees a third party certification process based on criteria relating to both the outcome of the management process and the management strategy and procedure. The criteria encompass ecological, economic and social aspects.

25. In Malaysia, a process has been intitiated to develop a national certification scheme (Crossley 1996).

26. National certification schemes are underway in Costa Rica and Honduras under the Smart Wood network and FSC (Crossley 1996).

27. Among South American countries Bolivia has advanced furthest to establish a certification programme. In 1994, a study supported by USAID (Bolivia Sustainable Forest Management Project: BOLFOR) found that there was strong public and private sector interest in developing independent, voluntary and internationally recognized certification. Particular interest has been shown in certified timber by processors in Bolivia producing high-end products (flooring, furniture) apparently reflecting clients� requests. In March 1995 a Standards Committee has been formed to draft forest management certification standards based on, inter alia, FSC principles and criteria. The Bolivian Council for Voluntary Forest Certification (CFV), a NGO, has been established to oversee national certification (Crossley, 1996).

28. In Brazil, the Sociedada Brasileira de Silvicultura (SBS) began to develop a national wood and wood-products certification system in 1992. The principles of the system developed are those of voluntarism, self-regulation and independence; flexibility and gradual implementation, with constant upgrading; transparency; applicability to Brazilian conditions; non-discrimination (i.e. that certification is available to all scales of producers); and harmonization with international standards. Reportedly the scheme has no broad support among environmental NGOs (Crossley, 1996).

29. The Instituto de Manejo e Certificacao Florestal e Agricola (IMAFLORA) is a member of the Smart Wood Network. Through consultative processes it is developing guidelines for certification of various types of forests as well as non-timber forest products. It is also involved in domestic market research of certified products (Crossley, 1996).

30. World Wide Fund for Nature (WWF)-Brazil has also established an FSC Working Group that has developed target dates by which to develop and gain agreement on forest management standards for Brazil (Crossley, 1996).

31. Efforts are also under way in Peru, Ecuador and Venezuela to develop forest certification programmes.

32. In Germany two non-governmental organizations not accredited by FSC award eco-labels for timber from private and state forests. German forest owners have rejected certification for individual firms, such as through FSC accredited certifiers, due to the perceived increase in bureaucracy. As a reaction to the increasing use of eco-labels, the forestry industry has begun issuing an eco-label guaranteeing the origin of German timber. Under a WWF initiative, a federation of firms, "Group '98", has pledged to trade only in timber from firms with FSC certification from 1998 onwards.

33. Projects for developing criteria, standards and monitoring systems for sustainable forest management have been established in the three Nordic countries (Norway, Sweden and Finland). The work in the three countries started out at the same time in 1996 through parallel processes, but have so far chosen different approaches.

34. In Finland there are currently two processes, one resulting from a 1996 initiative which was supported by industry, forest owners and government as well as environmental NGOs. Through this process 37 standards for regional certification were developed. In the spring of 1998, environmental NGOs decided to lobby for the FSC standard and have subsequently initiated a new process on their own (Finnish Forest Association, Press Release 24. June 1998).

35. The Norwegian process, Living Forests, has led to development of a national standard for forest management based on ten principles including social, environmental as well as economic aspects of forestry. As of today no decision has been taken whether to adopt the ISO system or FSC standards.

36. In Sweden the initial process was through the establishment of a regional FSC Working Group. The national standard elaborated by this group was approved by FSC in January 1998. The Swedish Forest Owners Association (SSR), representing many small forest owners, was concerned about the conditions and approach taken and withdrew from the FSC process in May 1998. SSR decided to develop an environmental management system approach in accordance with the ISO 14001 and EMAS standard (Levende Skog, 1998).

37. Skal (the Netherlands), the Woodmark Scheme (UK) and SGS Forestry QUALIFOR Programme (UK), are all FSC accredited certification schemes. The Woodmark Scheme is an independent certification scheme operated by the Soil Association (UK) which also operates schemes on organic agriculture, food processing and manufacturing.

38. In the United Kingdom, the 1995+ Group was formed at the initiative of WWF-UK. At present more than 70 companies have committed to purchase FSC-certified wood, primarily in the retail and do-it-yourself sector. The members of the Group include ten large retail chains (Donovan, 1997).

39. Just recently, a new initiative was taken by private sector interests and NGOs in Germany, France, Austria, Norway and Finland to develop a European forest certification and authentication framework for small-scale private forests based on the pan-European criteria which were developed through the Helsinki process described above (Finnish Forest Industries Federation, Press Release 25 August 1998).

40. The Canadian Standards Association (CSA) was approached in 1994 by the Canadian Sustainable Forestry Certification Coalition with a request to develop sustainable forest management system standards for Canada along the ISO 14000 series. The Coalition was formed in 1994 by 22 organizations representing various interested parties. In October 1996, the CSA Sustainable Forest Management System Standards were published as National Standards of Canada. The Standards Council of Canada (SCC) controls the promotional use of the certificate of registration. The scheme does not provide any on-product logo.

41. In addition there is also a FSC process under way in Canada. A national working group has been formed and is currently engaged in developing national certification standards (Levende Skog, 1998).

42. The United States based Smart Wood Programme is a forest management certification programme of the Rainforest Alliance, a non-profit environmental NGO. Smart Wood was initiated in 1989 and is the oldest forest management certification programme. Recently, it was accredited as a certifier by FSC. The programme initially covered only tropical forests but has been expanded to include all forest types and operates globally. To foster regionally-based certification activities, Smart Wood has recently launched a network of regional non-profit partner organisations interested in establishing certification programmes.

43. Scientific Certification Systems (SCS) is another certification agency in the United States which is also accredited by the FSC and with activities in several countries around the world.

44. Labels on food items providing information on nutrient contents have a long tradition and have become mandatory in many countries for a wide range of products. A large degree of international harmonization has been reached on the contents of such labelling as part of the work of the Codex Alimentarius Commission (CAC) whose secretariat is provided jointly by FAO and WHO. Standards developed by CAC are in principle not binding.

45. Labels indicating "organic" or "bio-organic" production go beyond the above kinds of nutrition labels because these terms relate directly to the way in which the food items have been produced and processed. The concept of organic agriculture stems from the desire to produce agricultural products in an ecological manner without, or with reduced, use of modern types of pesticides and fertilizers. The origin of organic farming goes back to the early days of modern agriculture when introduced by Rudolf Steiner based on his philosophy. The labelling of agricultural products according to the bio-dynamic model8 started several decades ago (the Demeter-label). In most European countries, farmers following "bio-dynamic" and "organic" farming practices are organised in separate organisations.

46. Several schemes have been developed in Europe and in North America for organic food production with a much stronger tradition and longer history in the former region. There is evidence that the demand for organic foodstuff in Europe and North America has been outstripping supplies for several years. As a result, organic food items fetch significant premium prices which have created a strong incentive for expanded production not just in these regions but also in a growing number of developing countries.

47. The rapid increase in labelling schemes indicating "organic" products led to a rather confusing picture for consumers and attempts were made to produce harmonized standards which would provide organic growers access to global markets through mutual recognition of certification schemes across borders. The two major efforts to arrive at common international standards are briefly described below.

48. In 1992, IFOAM representing over 600 member organisations in more than 100 countries, established the IFOAM Accreditation Programme (IAP) which provides for possible accreditation of existing national labelling schemes of organic agricultural products. IFOAM has established "Basic Standards" for organic farming and the IAP Criteria for Certification Programmes. The Accreditation programme focuses on the performance of certification schemes and is operated independently under a licensing agreement between IFOAM and the International Organic Accreditation Service Inc. (IOAS).

49. At its Twenty-Sixth Session, Ottawa, 26 - 29 May 1998, the Codex Alimentarius Committee on Food Labelling reached agreement on most of the contents of draft guidelines for the production, processing, labelling and marketing of organically produced foods. These will now be submitted to the Codex Alimentarius Commission for adoption. The aims of these guidelines include, inter alia, to protect consumers against deception and fraud in the market place and unsubstantiated product claims; to ensure that all stages of production, preparation, storage, transport and marketing are subject to inspection and comply with these guidelines; and to harmonize provisions for the production, certification, identification and labelling of organically grown produce. The guidelines are considered a first step into official international harmonization of the requirements for organic products and are expected to require regular improvement and updating in order to take into account technical progress and the experience with their implementation.

50. The EC Regulation 2092/91/EEC is governing organic food production, marketing and labelling in the European Union. Also EU legislation requires eco-labelling schemes or inspection bodies to comply with European Standard EN 45011 or the international equivalent ISO 65. Most of the European schemes certifying and labelling organic products are national in nature, but this does not mean that a product carrying a label from a national certification scheme is prevented from entering the rest of the European market.

51. In Germany AGÖL (Arbeitsgemeinschaft ökologischer Landbau), is the umbrella organisation for German organic farming associations of which there are several.⁹ Bioland, founded in 1971, is Germanys largest organic farmers� association, counting more than 3200 members all over Germany and farming an area of about 110 000 hectare. The Bioland guidelines include aspects of ecological agricultural production, animal husbandry as well as food processing. Bioland is a registered trademark which members and partners of Bioland can use to label their products.

52. Demeter Bund is the second largest association in Germany, organising about 1300 farmers, with a productive area of 47 000 hectare. They certify bio-dynamic agricultural production.

53. Naturland was founded in 1982 and has at present a membership of about 1000 farmers. It is active not only in Germany, but also in several Mediterranean countries as well as in Sri Lanka, Mexico, Bolivia, Brazil and India. The association also undertakes research and education projects. The certification scheme is IFOAM accredited since January 1997.

54. SKAL is the only organisation in Holland which can grant the so-called EKO-label. SKAL has been appointed by the Ministry for Agriculture, Nature and Fisheries as the supervisory board and approved by the European Commission. The EKO-label can be found on more than 3,500 products ranging from textiles to organic agricultural product and forest products from sustainable managed forests.

55. In the United Kingdom the Soil Association operates various schemes both on a national and international level. The Soil Association has developed standards for organic farming which are accredited by IFOAM. The scheme represents 70% of the UK organic market.

56. All the Nordic countries have officially recognised certification bodies for organic products. KRAV is a independent certification organisation in Sweden established in 1985. It certifies that a production is done without any chemical pesticides or fertilisers, that animals are well taken care of and have free out-door access, and that the entire production is free from GMO. KRAV carries out inspections on the Åland Islands and in Uganda as well as in Sweden. KRAV provides a logo for on-product exposure. Their work is financed through membership fees. More than 2100 products carry its logo. KRAV is accredited by IFOAM.

57. In Norway, Debio is a private membership organisation established in 1986. It has been entrusted by the government to certify organic products. Debio is caretaker of all aspects related to organic farming, including labelling. A distinctive characteristic of the Norwegian system is that standards for both bio-dynamic and organic farming are administered by the same organisation. The scheme receives about 2/3 of its funds from the annual agreement between the farming sector and the government and the rest from fees paid by users.

58. In Denmark the certification of organic products is carried out by the state. The authorities grant organic farmers the right to use the label for organic products (Ø-label). The authorities carry out the inspection of farms. The scheme also include standards for certification of animal husbandry (labelled Friland Food).

59. In the United States, the Department of Agriculture has proposed a national organic standard. The draft include standards for growing, processing, labelling, importing and certifying organically grown food (USDA, 1998).

60. The Organic Crop Improvement Association (OCIA ) is a United States based, globally operating certification programme which complies with the US Department of Agriculture proposed organic standard as well as the accreditation requirements of IFOAM. The organisation represents over 35,000 members with over 2.5 million certified acres. The programme provides a seal for on-product exposure.

61. In Canada, the Canadian Organic Advisory Board (COAB) has been engaged in the development of a national organic standard. The draft is currently on a new round of comments and revisions after an earlier draft did not find support by the farmers� organization. Pending finalization of the national standard, provincial accreditation programmes are in operation.

62. Canadian Organic Certification Co-Operative Ltd. in Saskatchewan is one of the certifying bodies approved by COAB. Also the Canadian branch of the United States based OCIA is approved by COAB.

63. Certification generally depicts scale-economies, i.e. certification costs do not vary significantly with the scale of the company. As a result, certification costs are relatively higher for small companies than for large ones. Experience with forest certification indicates that the size of the property is extremely important for the average costs of a certification process. Factors creating uncertainty in determining actual certification costs include the starting point of the activity to be certified, competition between certifiers and difficulties in distinguishing external (system related) and internal (management related) costs (Levende Skog, 1998).

64. Whereas for organic products a price premium of 10-20 % is usually not difficult to obtain ( examples of a price premium of as much as 50% have been reported by Simula, 1996), premiums for certified forest products are lower and estimated in the range of 5-10 % (Donovan, 1997). However, a study by Brockmann, Hemmelskamp and Hohmeyer (1996) on the impact of a certification scheme on German demand for tropical timber indicates that a credible scheme can induce a significant expansion of demand for sustainably produced tropical timber.

65. In the forestry sector the traded volume of certified timber is expected to increase significantly once the large North American and Nordic forest industry corporations become certified. This may diminish the price premium for certain kinds of certified forest products as the segment of consumers willing to pay premium prices is limited.

66. The issue of credibility is at the core of any certification or labelling scheme, not only in the eyes of consumers but also of industry. Baharuddin and Simula (1994) have pointed out some critical requirements for a certification-labelling scheme to achieve credibility:

67. Critique has been directed at the FSC concerning the first and second of the requirements listed above. As the FSC principles and criteria are global in nature it is left to national working groups to develop national or regional standards. While to date specific national standards have only been established for Sweden, FSC accredited certifiers have already conducted forest certifications in a total of twenty-two countries.

68. The ISO 14020 guidelines require that the process of developing environmental labels and declarations should be an open participatory consultation among all interested parties. Critique has been voiced that in the design of some schemes either governments, various segments of the industry or environmental interest groups have not had sufficient opportunity to express their respective interests. As a consequence, accusations have been made regarding the independence of the initiators of such schemes from vested interests, be they governments, industry or environmental NGOs.

69. Another issue affecting credibility is that the continuing growth of certification and eco-labelling schemes based on a variety of environmental claims may cause consumer confusion. While in both the forestry sector and the agricultural sector attempts are being made to establish common global frameworks, the process of reaching agreement has experienced difficulties because schemes already in place take a defensive stand vis-à- vis their model for certification and labelling. These difficulties might have been avoided if such global frameworks had been in place at an earlier stage.

70. Guaranteeing the chain of custody is of uttermost importance in securing the credibility of a certification scheme. In Canada, the proposed standard for certification of sustainable managed forests does not include a label for on-product exposure. This is a deliberate choice made by the initiators based on the view that a guaranteed chain of custody is not feasible. At the opposite side, the FSC labelling scheme is based on the view that guaranteeing the chain of custody is in fact feasible. In the European context it has been pointed out that the chain of custody is particularly difficult to follow and that this may make the FSC scheme less suitable for European conditions.

71. In the case of organic farming, the positive environmental effects of reduced or minimal application of pesticides and fertilizers are beyond doubt. Pollution of subsoil water is an increasing problem in many countries and any reduction in sources contributing to this problem will be beneficial to the environment.

72. The view has been expressed that present experiences indicate that improvements are limited in forest management from the FSC scheme in Europe and North America. In Poland, which currently constitutes the largest surface area certified under the FSC, and in Belgium, no changes in forest management were recommended by the accredited certifier. (Kiekens, 1997). This could of course signify that environmental standards were sufficiently high.

73. The actual volume of forest products covered by operational certification schemes is still insignificant at global and regional levels and estimated below one percent. As up to 80 percent of tropical timber is consumed in producing countries and as a significant share of traded products are exported to markets where consumers are not at present very responsive to eco-labelling programmes, (e.g. Japan and China), the impact of certification programmes on improved management of tropical forests is expected to remain limited in the medium term and restricted to a few countries having important markets in Europe and North America.

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