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    Certification: Helping Markets Support the World's Forests


    © International Trade Centre, International Trade Forum - Issue 2/2001

    Sustainable plantation of fast- growing eucalyptus trees in South Africa.

    Voluntary forest management certification and associated wood labelling schemes are becoming accepted as a way to help markets contribute to the conservation of tropical and other types of forests.

    Originally proposed by environmental non-governmental organizations in the early 1990s, certification has emerged as a way to improve forest management by providing an economic incentive to produce sustainable wood products. For producers, the aim is to improve access to markets which pay premiums for certified products, as well as to provide a marketing edge. The world's leading buyers of wood products are increasingly moving towards policies that favour certified wood products. However, several problems have to be solved before certification becomes an effective promotional instrument.

    Forests under growing strain

    Forests in the developing world provide valuable economic, social, ecological and even climatic benefits, mainly thanks to gradually expanding plantations. But it has proven difficult to find a sustainable balance between these benefits, each of which has a cost.

    Prevailing methods of land use and resource exploitation, together with increasing population pressure, have led to the depletion of forest cover at an annual rate, in the 1990s, of 13.7 million hectares in developing countries. Some countries in Africa and Asia have lost as much as 70% of their forest cover in the past 20 years. This has caused mounting environmental concerns about the degradation of forest ecosystems and loss of biodiversity.

    This detrimental trend can only be reversed if local populations apply their knowledge to manage their resources in a sustainable way, and if they receive a greater share of the commercial benefits derived from forest products. Unclear ownership of forest lands remains an obstacle for improved management in many developing countries.

    While certification and labelling alone cannot lead to sustainable forest management, they can make a significant contribution. Certification and labelling primarily affect international trade, which consists of 15% to 20% of total logging volume. Over the last decade, as the certification trend has grown, the supply base has been growing fast, although only 1% to 2% of the world's forest wood is now certified. The influence of certification is broader than these figures imply, as it has affected forest management practices for non-certified areas as well. Nevertheless, effective government policy on forest use remains the primary tool for sustaining these finite resources.

    Marketing sustainability

    Today, certification and labelling have already passed the point of no return: they are practised in most major international markets. The implications for the global forestry community as a whole, however, remain uncertain. First, some markets are clearly more environmentally sensitive. Second, only few timber-producing countries are heavily dependent on export markets. Third, certification has so far been implemented mostly in countries in the northern hemisphere, and not in the tropics, where it was first targeted. Fourth, many developing countries continue to lack the financial, institutional and human resources to implement it.

    Certified areas grow

    In spite of market uncertainties, national certification schemes have proliferated, and certified forest areas have been rapidly increasing since the mid-1990s. There are an estimated 25 certification schemes operating worldwide, with around 80 million hectares of forests certified. In the United States, for example, about 22 million hectares have been certified under various sustainable forest management schemes. Several million hectares have been certified in Canada, Finland, Norway and Sweden. The largest certified areas in the tropics are in Bolivia and Brazil, both covering more than 1 million hectares.

    A regional initiative to create a common African certification scheme has been put forward by the African Timber Organization. The Pan-European Forest Certification (PEFC) Scheme has the largest areas of forests under certification to date - about 32 million hectares, of which 22 million are in Finland - and has created a framework for mutual recognition of national certification schemes. The Forest Stewardship Council (FSC), the pioneer of performance-based forest certification, has approved around 21 million hectares worldwide.

    Trade intermediaries, particularly do-it-yourself (DIY) retailers in western Europe, have been the major catalyst to move markets towards certified products. Since the early 1990s, a number of buyers' groups, with support from the World Wide Fund for Nature (WWF), agreed to buy and retail certified wood products, despite a shortage of such products when the groups were first set up. Buyers' groups often refer to the FSC for guidance, as this international non-profit organization, founded in 1993, initially established the only standards for certification systems for the wood industry.

    Consumer demand unclear

    The status of actual demand for certified wood products is unclear, and far too little surveyed. A recent study conducted in the United Kingdom suggests that demand is driven more by DIY stores than by individual consumers, who still give priority to quality and price over environmental sustainability. Other consumer surveys reveal that there is little willingness to pay any premium for certified wood products. This has caused concern among forest industries that the benefits of getting certificates may not offset the additional costs.

    Which products are certified?

    Softwood-based products have been more easily certified than those of hardwoods. There are more and larger softwood forest product conglomerates, which market fewer species from forests that are ecologically less complex.

    Tropical hardwoods are another story. It is difficult to ensure uninterrupted availability of certified tropical hardwood with uniform quality and sustained commercial volumes. This is largely due to the fact that supply sources are very fragmented. The ownership problems in tropical developing countries create additional complexity and raise the cost of implementing certification.

    Plantation timbers such as rubberwood and eucalyptus have made market inroads, becoming the first certified hardwoods with sufficient volumes for a proper market stance. They are clearly visible in the leading European do-it-yourself outlets and builders' stores, which showcase certified eucalyptus shelving, glue-laminated boards, garden furniture, decking, flooring and similar products. Rubberwood is more typically sold in higher value-added products such as household furniture, kitchen utensils and decorative products.

    Over the past few years, the supply base of certified wood products has increased. According to the FSC, about 20,000 certified wood and non-timber forest product items are being sold, commanding an annual trade of around US$ 1 billion.

    Towards mutual recognition

    With the current proliferation of certification schemes, only the very best-informed consumers are able to make a balanced choice between different certificates and labels.

    Because ecological zones and economic situations vary in different parts of the world, it is unlikely that there will ever be one global certification scheme for all. Individual countries are likely to develop their own national certification systems if they cannot choose an existing system.

    Yet producers and consumers do need an international framework to recognize acceptable certification schemes that are sound and market-oriented. Without mutual recognition, or some other arrangement, there is a danger of discriminatory trade practices between wood products coming from different certification schemes and ecological regions.

    Mutual recognition of certification schemes has remained largely unsolved despite recent international efforts toward this end. Credible forest certification schemes would recognize other equivalent schemes and shared use of trademarks and labels could be envisaged. For suppliers of certified products, it would simplify market access radically. For consumers, it would bring greater clarity, by reducing the array of competitive and possibly fraudulent labels in the marketplace.

    The Confederation of European Paper Industries (CEPI) has developed a comparative matrix of certification schemes. The International Forest Industry Roundtable (IFIR) has developed a framework for mutual recognition, which focuses on reciprocal arrangements between existing certification schemes to recognize compatible standards and procedures.

    Certification and labelling of wood products must be compatible with international trade rules. If it leads to unfair distortions in trade, it may be challenged inside WTO as a technical barrier to trade. In order to alleviate these fears, which have been mostly stated by developing countries, the Food and Agriculture Organization of the United Nations, the International Tropical Timber Organization and the German development agency, Deutsche Gesellschaft für Technische Zusammenarbeit, organized a seminar to build confidence in certification among stakeholders in developing countries in February 2001.

    Jukka Tissari, ITC Market Development Officer, may be contacted at tissari@intracen.org

    What can ITC do in certification?

    - Carry out in-depth market research on supply and demand of certified wood products and their price structures.

    - Contribute to generic market promotion of certified wood products exported by developing countries, linking it with promotion of sustainable forest management.

    - Implement tailor-made certification programmes to support pioneering enterprises.

    - Contribute to capacity building and institutional strengthening (standardization bodies, national institutions for accreditation and other such bodies).