The FAO Advisory Committee on Paper and Wood Products held its thirty-ninth session at FAO Headquarters in Rome, on 23 and 24 April 1998. Mr M. Mezzour chaired the session, which was attended by 15 members and 52 advisers from 35 countries and 7 international organizations (Annex 1).
1. The Chairman opened the session and welcomed the participants. He recalled the role and the importance of the Committeeís work to FAO and reviewed the industry situation worldwide emphasizing the integration and the globalization of the industry, and the growing liberalization of trade in the sector. He described the main issues to be discussed during the session:
• forest products trade;
• forest products production and trade flows;
• the Global Fibre Supply Study; and
• sustainable forest management
as well as the procedures for nomination of the Chairperson and Vice-chairperson for the next term, and a proposed reduction in term of office of the members.
2. On behalf of Dr Diouf, Director-General, FAO, and Dr Hosny El-Lakany, Assistant Director-General, Forestry department, FAO, Mr Lennart Ljungman, Director of the Policy and Planning Division, welcomed the participants and expressed the thanks of the Organization for the time and efforts of the Committee's members to further the goals of FAO. He stressed the importance of the role of the private sector, and hoped for its accrued contribution to the forest activities of the Organization. He recognized the importance of the liberalization of trade while stating that FAO was not the body to promote or oversee negotiations on the subject. He acknowledged the support and the contribution from the members of the Committee and the private sector to the Global Fibre Supply Study in spite of the difficulties encountered in its preparation.
3. The Chairman introduced the agenda, which was approved as shown in Annex 2, with some minor changes in its order.
4. Messrs Sakai (Japan), Szikla (Hungary), Moore (USA) and Silva (Colombia) accepted to be part of the nomination committee. After discussion, the nomination committee recommended the nomination of Mrs. Lise Lachapelle (Canada) as Chairperson and Mr Luis Deslandes (Portugal) as Vice-chairman for the next term. The Chairman and the Committee accepted this recommendation.
5. The Chairman informed the Committee that Brazil had offered to host the next session in 1999 in São Paolo, and that New Zealand had offered to hold the session in 2000 in Rotorua. After discussion the Committee decided to accept these invitations and recommended that the next meetings be held in Brazil and New Zealand in 1999 and 2000, respectively.
6. The Committee accepted a reduction of the term of office of its members from the current three to two years, starting in 1999.
7. The Secretariat reviewed the recommendations from the last session, indicating that there were some limitations in what could be achieved because of financial constraints in the Organization. The Committee was informed of the following activities undertaken following its recommendations:
• Three workshops were held in Malaysia, Brazil and Ghana, as well as a meeting in the United States, to validate the data in the Global Fibre Supply Study (GFSS). Though there was general agreement with the baseline data, there were still some inaccuracies. The structure of the database was found useful. In the meeting held in the USA, future wood availability caused some concern. Furthermore the differences in forecasts presented by the Fifth European Timber Trends Study (ETTS V) and North American Timber Trends Study (NATTS) and by GFSS raised some questions.
• Informal discussions have taken place with forest industry representatives, exploring practical ways for a cooperation in the implementation of global and regional forestry sector outlook studies
• Efforts to continue the publication on Recovered Paper Data were initiated, while Projected Pulp and Paper Mills in the World was discontinued temporarily due to lack of funds.
• FAO continued work on stimulating forest inventories/assessments through its Global Forest Resources Assessment Programme (FRA).
• A private sector forestry plantation development project had been proposed for Ghana, with the support of the African Development Bank (ADB), the Government of Ghana and FAO.
• A publication entitled Guidelines for the Management of Tropical Forests. 1. The Production of Wood was completed earlier in the year and was expected to be available at by the end of April 1998. This publication was prepared in response to a request from the twelfth session of the Committee on Forestry (13-16 March 1995) which called for a handbook on tropical forest management, aimed at providing practical advice to forest services and to the practising tropical forest manager in the field.
• Two new publications were completed in the field of environmentally sound forest harvesting: Forest harvesting in natural forests of the Congo, 1997 and Environmentally sound forest harvesting, testing the applicability of the FAO Model Code in the Amazon in Brazil, 1997.
8. The Committee was informed of the progress on trade liberalization in the APEC countries. APEC was established in 1989, it includes 18 countries (soon to be 21), and is committed to free trade, open investment and sustainable economic growth, including forest products among other sectors. The milestones and achievements of the forum were presented along with an illustration of the benefits. Tariff on wood products will be eliminated on 1 June 2002 in developed countries and on 1 January 2004 in developing countries. Negotiations regarding the elimination of tariff for pulp and paper are still going on; the objective is to eliminate tariff by 1 January 2000 for the APEC countries who signed the Uruguay round, and by 1 January 2002 for the other countries. Some details were provided on the last and next meetings, their agenda and their progress.
9. Reservations were expressed by some participants about including a discussion on tariff in the programme of an FAO advisory committee, and it was suggested that tariff should be discussed in other forums such as WTO. Others participants found that the presentation was just that, i.e. a presentation, and was acceptable since it was not a negotiation on tariff reduction, and suggested that other experiences on that issue should be presented at future sessions.
10. Though Indonesia did not have any representatives at the session, the Committee enquired about the lifting of the ban for export of log and sawn timber from Indonesia and its impact on sustainable forest management, due to the recent crisis in the region. The crisis, however, did not have any impact on Malaysia policies, which will attain sustainable forest management in eight of its 11 provinces.
11. Though Japan is not among the ten largest producers of wood products, it is by far the largest importer, with about 15 percent of its total imports from the Asian region. There has been a drastic shift in the imports to Japan in recent years with a decrease in logs and an increase in more value-added products, due to the movement toward environmental protection on a global scale and to sustainable forest management policies. Indonesia and Malaysia are the two largest exporters of wood products to Japan. Indonesia began to restrict log exports in 1982 and totally banned them in 1985. Since then, their exports of plywood and laminated wood to Japan have increased sharply. Indonesia is currently suffering an economic crisis and the Government is being forced to change its policy. However, the effect of policy changes for wood products is unpredictable at the moment. Like Indonesia, Malaysia has been restricting log exports since mid-1980s and boosting exports of value-added products, although this varies depending on states.
12. Europe is an important consumer of forest products as well as a major importer and exporter, accounting for 41 percent of world forest product imports (by value) and 43 percent of exports. Overall total imports and exports have remained relatively stable, but specific country situations have fluctuated more. Much of the trade is intra-Europe with many countries being both important importers and exporters. The main exceptions are the United Kingdom and the Netherlands who are mainly importers, and the Nordic countries and East European countries who are mostly exporters.
13. Trade in semi-processed and processed products, such as laminated lumber, builders' woodwork, furniture, has been growing. Europe experienced a major drop in supply from the former USSR (mainly Russia) since 1990, and an increase in supply from the Baltic countries (Estonia, Latvia and Lithuania).
14. The major issues affecting markets are:
• effect of environmental pressures on supply;
• regulations on recycling, re-use, and disposal;
• certification;
• currency fluctuations; and
15. The presentation limited itself to the situation in the United States, with the exclusion of Canada and Mexico. In the United States on industrial lands, volumes planted are superior to harvest by 20-30 percent. Exports of wood products have increased from about US$ 3 billion in 1980 to US$ 7.2 billion last year. Importantly, the ratio of value-added products rose from 53 percent to 62 percent of the total. The largest export markets are Japan, Canada and the European Union, followed by Mexico and Korea. With the decline of lumber production in the United States, imports of softwood lumber have increased in recent years. The United States negative trade balance in solid wood products stood at US$ 4.3 billion in 1996. Production of paper and paperboard grew by an average of 2.7 percent between 1990 and 1997 when it reached 86.3 million tons. The trade deficit in paper products was reduced from 5.6 million tons in 1990 to 2.3 million tons in 1997.
16. Because of public pressure, the United States industry will have to demonstrate that it applies sustainable forestry management principles. Customers, not only in the United States but also in the world in general, will want assurances that the wood and wood products they are buying/using are coming from sustainably managed forests. This will require the establishment of sustainability principles.
17. The American paper industry is not profitable because of overcapacity and underutilization. Trade liberalization, as initiated in the APEC countries, is one way, among others, to solve the overcapacity problem, and a recent study showed that world consumption would likely increase by 3-4 percent if free trade was implemented globally.
18. In the United States, Forest Stewardship Council certification is not taking hold because of the problem of individual landowners. The American Forest and Paper Association has prepared and presented the "Sustainable Forestry Initiative" (SFI). It was decided to let it be a voluntary programme, which could evolve into a certifiable programme. In the next several years, it will develop standards, issued from SFI that can be certifiable if a company wishes to do so. All AFPA members must subscribe to the SFI, but they do not have to go to a certification programme unless they feel it necessary because of customer or social pressure.
19. During the past decade an average of 20 percent in value of the production of industrially processed forest products was traded internationally; this is now approaching 25 percent. However, the internationally traded share has not increased lately as fast as in the past decades. This may be a symptom that anticipates stabilization of the traded share. The development is still going on and is not homogeneous over the product categories.
20. The regions that used to be raw material sources have started their own primary processing industries based on the raw material supply that was previously available for exports in rough form. One such example has been the fast development of the Indonesian plywood trade. Various policy instruments have been in use to support such developments, including export bans on roundwood and less processed products.
21. At the same time as new capacities were established close to the raw material base, traditional producers rapidly increased the efficiency of wood utilization by, among others, utilizing more by-products from mechanical wood processing and more recycled fibre. There is less and less primary wood in several successful products. The new types of mechanical wood products often provide more square metres of sheltering per cubic metre of primary wood consumed. This is achieved among other things through higher use of minerals and recycled fibre.
22. In parallel with higher fibre productivity, technological change is contributing to improving economic efficiency through lower production costs. Improvement in the performance-cost ratio, together with product innovations, has improved the competitiveness of new wood-based products against traditional ones, as well as against other substitutes.
23. In the case of paper and board, both the growth of production and the increased traded portion have contributed toward their increasing role in the overall trade in forest products. Another factor is the relatively high unit value compared to other forest products. One of the basic driving forces behind the improved economic efficiency and subsequent trade performance, especially in the pulp and paper industry, has been increasing economies of scale. The resulting bigger units of production create a need for larger market areas as well. Improving cost competitiveness has made it possible to capture more distant market shares.
24. International trade of forest products comprises a group of important material and value flows which successfully cross the borderlines of various trade unions and local markets. It is foreseen that the basic differences in the demands are so big, and resource endowments are so slow to change radically, that the flows are there to stay for long at least in terms of wood raw material equivalent.
25. Participants were cautioned against the use of aggregate figures, which should be complemented with figures for individual products and for individual countries.
26. With support from industry, government and academia, the study was undertaken on a country-by-country basis, reviewing all available inventory reports. It covers all types of fibres including wood, non-wood and recovered materials. It is not done in isolation but in conjunction with such other studies as the Global Fibre Resources Assessment, the State of the Worldís Forests, and regional outlook studies. The draft study is now completed and is tabled for discussion before release. Within the context of the GFSS, and in addition to the draft report itself, others studies were prepared including:
• an interactive database;
• a model to see developments until 2050;
• six working papers; and
• the material relevant to three regional workshops held in Asia, Latin America and Africa, and to a meeting in the USA.
27. A recommendation was made to try to obtain data from countries not yet included in the database. The draft report of the study does not provide policy analysis, conclusions, or recommendations. So far, the total cost of the study for the last two and a half years amounts to just over US$ 600 000 including the costs incurred under the partnership programme.
28. Participants were given an explanation of the concepts of the model and the database, as well as a demonstration in their use.
29. Participants congratulated FAO on its excellent work in the preparation of the GFSS considering the limited time and resources available. They agreed it was only a draft document, still being reviewed by governments and industry, but identified some issues where further work is required and which prevent the release of the study in its present form. The main problem concerns definitions and data used in the model, which will both require further consultations with industry and government before publication of the final report. There should be more involvement from industry in the acceptance of definitions, and members of the Committee were urged to contact their respective governments on the subject. The data did not take into consideration such factors as timing (when are wood resources currently unavailable going to become available), economics (price considerations), social and political aspects. A participant expressed concern over definitions and the possible consequences of adding heterogeneous numbers. These totals could be misquoted and/or misleading should the report be released in its present form.
30. The Committee recommended that a subgroup be created, chaired by Mr David Barron (Canada), and consisting of experts to be chosen. This subgroup would have to review and finalize the study within the next six months before its public release. The necessity to bring this tool to governments and industry as soon as possible was recognized, and it was agreed that delaying it too much would be counterproductive. A proposal was made to change the title of the study to Global Fibre Supply Model to emphasize the usefulness of the tool over that of the data. It was recognized that data collection and update would be a continuous activity. Since in some developing countries the data is either unavailable or out-of-date, distribution and promotion of this model would be a strong incentive to forestry bodies to organize collection of the required information.
31. The Committee reiterated its continued support to the study and recommended that it be presented at the next COFO meeting in 1999, as well as at FAO regional commissions. The promotion and distribution (hard copy, Internet, CD-ROM, etc.) of the study would require careful consideration, not only to ensure complete exposure, but also to prevent tempering with the model. Participants were reminded that further work on the study would require additional resources and, as an example, were invited to sponsor the printing of the study.
32. Canada was the first country in the world to adopt national standards for sustainable forest management using a broad, multi-stakeholder process. The standards were prepared by the Canadian Standards Association (CSA) and cover key environmental, economic and social values. Criteria and indicators associated with sustainable forest management are addressed in areas ranging from biological diversity to ensuring the security of resource-dependent communities.
33. The CSA standards were developed by a committee consisting of representatives from academic and research organizations, governments and the forest industry, and special interest groups including environmentalist groups. They were field tested and approved as National Standards by the Standards Council of Canada. Canadaís national standards are built on the same management system framework as the Geneva-based International Organization for Standardizationís ISO 14000 series environmental standards.
34. There are other regulatory and voluntary systems which could generate conflict and confusion among the public ñ and barriers to international trade in forest products. A global forest convention is needed to provide the necessary framework for addressing and rationally debating the many challenges associated with sustainable development. To achieve this there is a need to strengthen and unite the existing forest-related UN initiatives.
35. The Committee was informed of what sustainable development and sustainable forest management has meant to the E.B. Eddy Company in Canada. Which criteria they used and how they measured them. The companyís report on sustainable development was praised by UNEP and nationally.
36. The issue of C&I for SFM and certification is a controversial one on which FAO cannot take any lead as indicated by COFO 1997, by the high level panel on forestry last January and by the last two meetings of the Committee. However, one of the Committeeís recommendations last year was to provide a forum for a baseline discussion to protect the environment, such as the issue of SFM and certification.
37. There are many indicators at the global level, but very few at the forest management unit level. The Centre for International Forest Research (CIFOR) is conducting a project on the testing of C&I in forest sites in Cameroon, Côte díIvoire, Indonesia, Brazil and India, with the objective of defining and testing those C&Is which can be considered objective, cost-effective, and relevant in the assessment of the sustainability of prevailing forest management practices. Ecological, institutional and socio-economic parameters have to be taken into account. At the last review meeting of the CIFOR project it was noted that there should be less focus on methodologies and social issues and more on economic and forest policy, as well as on adaptive co-management
38. Certification, through the five Forest Stewardship Council (FSC)-accredited bodies, continues, although not at the same pace as during the last two years. Continuous promotion of FSC certification by the organization itself as well as by environmental NGOs like WWF, IUCN and others, will likely result in a growing number of countries and companies adopting its system. This will be assisted by modifications that FSC continues to make to many of the requirements. It was noted that in the field, certification does not always enjoy the high technical level expected, being somewhat descriptive, lacking objective measurable standards and, in particular, following rather commercial interests as regards the assessment of the economic performance of the certified companies.
39. The Committee was informed of the status of various national initiatives. In Canada, the standards are based on ISO 14000 and other principles; in Finland the system will be based on ISO 14001, EU EMAS regulations and most of the FSC principles; Swedish industry groups followed FSC, while small landowners would rely on other local organizations. In Indonesia the system is based on ITTO, FSC, part of ISO 14000 and the National Standard Council of Indonesia; in Brazil it is based on the work of CERFLOR, a national certification scheme initiated by the Brazilian Society for Silviculture, while in Malaysia it is based on the scientific work of a technical cooperation agency. The African Timber Organization (ATO) is using a methodology developed by CIFOR. Various bilateral agencies, such as SIDA (Sweden) and GTZ (Germany), are organizing training programmes or testing activities related to C&I.
40. Sustainable Forest Management and standards will be discussed in various forthcoming ministerial conferences. Many companies and institutions are participating in these initiatives, but coordinated efforts are required to harmonize the various initiatives, one possible way is through a forest convention with legally binding instruments.
41. The Committee was informed that the United States believe very strongly in sustainability and in the necessity of sustainable forestry; they also recognize that ultimately there may be cases where customers, or public opinion, will require certification that the resources are sustainably managed. However, they are absolutely opposed to any group, such as FSC, having the mandate to define sustainability.
42. The Committee was informed of the activities of the European Commission, who organized on 13 March 1998, through the European Forest Institute, (EFI) a conference in Brussels under titled "Potential Markets for Certified Products in Europe". This meeting concluded that consumers in general are not willing to pay more for the costs of certification and SFM should be achieved before going to certification. There is a general unawareness of the public and a misunderstanding of forestry in general and forest management in particular regarding this issue. Thus, the need for more harmonized and scientific sound information on forest, forest industries, environment and trade through public relations campaigns.
43. On behalf of FAOís Director-General and of the Assistant Director-General, Forestry Department, Mr Ljungman thanked the participants for taking the time to attend this session. He reiterated the importance the Organization places in the advice and recommendations of the members of this Committee. Finally he thanked Mr. Mezzour for his work as Chairman of the Committee.
44. The Chairman of the Committee complimented Mr. Schmincke, Director, Forest Products Division, for his valuable contribution to the work of the Committee and wished him well in his forthcoming retirement.
45. The Committee made the following recommendations:
• Having listened with interest to the position of various regions on production patterns and trade flows, it proposed that other regions be invited to present their position on the same issue at the next meeting. A special invitation was extended to Latin America, who offered to host the next session.
• After congratulating FAO on the high value and excellent quality of the work done on the Global Fibre Supply Study, it recommended that this work be presented to the next COFO meeting in 1999. Furthermore, the Committee proposed that a technical working committee be established to finalize the study.
• Members of the Committee were invited to give recommendations on issues to be followed up during the next 12 months or forward their suggestions to the Secretariat within one month.
46. The Committee accepted the invitation of Brazil that its fortieth session be held in São Paulo, Brazil, on 27 and 28 April 1999; and the invitation of New Zealand that its forty-first session in 2000 be held in Rotorua, New Zealand.
47. The Chairman thanked the participants for their support during his tenure and, since there was no other business, closed the thirty-ninth session of the FAO Advisory Committee on Paper and Wood Products.
