Pulp and Paper Canada

Features Environment & Sustainability

November 1, 2001  By Pulp & Paper Canada

It takes money and patience to become a good steward. This becomes clear when one sees companies spending millions of dollars racing to have their wood holdings certified by internationally recognized…
It takes money and patience to become a good steward. This becomes clear when one sees companies spending millions of dollars racing to have their wood holdings certified by internationally recognized third-party auditors before the end of next year — with the expectation of capturing a large share of the so-called green market of environmental products.

By last report, about 72 million hectares, representing more than half of Canada’s managed forests, have been certified to one of four major standards: International Standards Association (ISO) 14001, Canadian Standards Association (CSA), Forest Stewardship Council (FSC) and US Sustainable Forestry Initiative (SFI). And by December 2001, more than 60% of Canada’s managed forests will be certified to one of these standards, says the Forest Products Association of Canada, an Ottawa-based industry lobby group.

The reported aim of certification is to prove to consumers that the wood the industry produces meet responsible sustainable forestry practices. Certification neatly fits in to sustainable forest management, or SFM. “About 90% of the productive forest land in Canada is publicly owned,” said Tony Rotherham, the recently retired director of forests for FPAC, “and many Canadians want a say in how this land will be used.”


The most vocal have been global environmental groups like Greenpeace, Sierra Club and World Wildlife Fund, which, for years, mounted public relations campaigns and boycotts of Canadian wood products to force companies to alter such practices as clear-cutting. “Certification has become a huge issue in the last two or three years,” says Michael Alexander, vice-president, forestry specialists group for KPMG in Vancouver, BC, a leading auditor. “There is a general trend toward environmentalism, and some Big-Box stores look to certification as a way to get a leg up on their competition.” (See sidebar, Starting at home.)

Not surprising, auditors like KPMG are busy in Canada, the United States and nations around the globe. It is one of the few auditing firms able to work to the four major standards. The firm doesn’t, however, recommend any particular certification system. “We do a pre-assessment to show a company how its current system fits in to various standards,” notes Alexander, who served on CSA’s technical committee. “From there, it can determine if its operations match up with CSA, FSI or FSC.” (See sidebar, Vying for market share.)

Certification is a lengthy process, taking between six months and 18 months. Much of the time is dedicated to assessing logging practices. One of the requirements of certification is that companies have to perform computer modelling on the effects of various forestry practices on an area’s ecosystem.

The cost, which depends on such factors as size of business, geography and number of employees, ranges from $10 000 for a small single-site operation like a woodlot to more than one million dollars for a company the size of Abitibi-Consolidated or Weyerhaeuser. That doesn’t include the costs associated with changing forestry practices and training the workforce.

Meeting market demand

Companies are looking at various ways to meet expected market demand for so-called green products. For one, companies might elect to use different standards for different parts of their operations, common after a merger or acquisition. Or a company might start off with one standard, with the intent of moving up to a more rigorous standard — like FSC — after a few years.

Generally, most companies start out with the ISO 14001 environmental management system (EMS) standard as an anchoring point. “This is really good, because it gives companies the tools they need to achieve performance at whatever level they decide,” says Alexander, referring to ISO’s built-in flexibility.

That is the case with such Montreal-based companies like Tembec Inc. and Domtar Inc. For example, Domtar announced earlier this year that its Spanish Forest timberlands in Ontario meet ISO 14001, and intends to have all of its forestry practices certified to that standard before the end of 2002.

As well, Tembec said that most of its more than 12-million hectares of wood holdings now meet the ISO standard. The company, which started its environmental campaign in September 1998, decided to adopt an umbrella approach to its certification process. “We separated the ISO 14000 criteria into site-specific ones and corporate-level ones,” says Jacques Rocray, vice-president of environment. Corporate-level criteria include system and compliance audits and management reviews and reporting, whereas site-specific areas are dedicated to environmental effects of forestry practices.

The chief reason for this approach is that it lends itself to sampling. Tembec separated its operations into various groups, which considered geography, language of employees and type of operation. For example, since all of its sawmills in Quebec use the same procedures, when the registrar wanted to certify Tembec’s sawmills, he had to audit only one sawmill in Quebec, Rocray explains.

Saving money

The sampling method had the added benefit of reducing the cost to certify its 35 sites to about $500 000 a year — equating to about $15 000 a site. That’s a bargain compared to the cost of one site looking to achieve certification. To compare, when its Spruce Falls operation in Ontario independently started the certification process, it had to shell out almost $50 000.

Although Tembec’s umbrella approach deviates somewhat from the site-specific method of some companies, it has decided benefits. One could develop a template of procedures that can be transferred to other mills within the organization, even after a merger or acquisition. Consequently, Tembec’s newly acquired business units have until the end of 2002 to gain registration. “Now we know how to do it cost effectively,” Rocray points out.

Its next step is to achieve certification to the standards of the Forest Stewardship Council of Oaxaca, Mexico, a bold step that many in the industry have thus far avoided, with perhaps good reason. Environmental groups spearheaded the drive to create the FSC, mainly as a way to influence forestry practices. It uses the idea of coalition building. Since then, it has not only established offices worldwide in such nations as Brazil, Sweden, England, but has signed up forest-products companies and retailers as partners, including Tembec and Home Depot.

Environmental groups, or environmental non-governmental organizations (NGO), as they are now called, are changing their strategy. For long, Greenpeace, Sierra Club and World Wildlife Fund put increasing pressure on forest products companies to change their forest management practices, mainly through calls for boycotts of Canadian wood and persuasive, slick media campaigns and related measures to warn consumers of the ills of clear-cutting. These public relations campaigns met with limited success.

Accordingly, environmental NGOs have found a better strategy: sit at the same table as forest product companies, First Nations peoples, and retailers like Home Depot, Lowe’s and Home Improvement Warehouse to form a competing certification standard that would serve their needs.

Even so, companies ought to know what they are signing up to, says Jean-Pierre Kiekens, editor of Forest Certification Watch, a Montreal-based newsletter that keeps an eye on competing standards. “It’s very obvious that you have very big bottlenecks with FSC certification,” says Kiekens, who adds that companies looking to FSC certification are entering into a highly charged political arena. For example, Principle Three spells out the involvement of First Nations at the bargaining table. “First Nations are investing a lot of hope in forest certification as a way to achieve one of their objectives of land claims,” he says.

Setting the standard

Equally noteworthy is that FSC is trying to set itself as the only credible standard, which he says, “is being challenged in the marketplace.” That challenge centres on claims that FSC is an independent authority, which Kiekens s
ays is dubious, because it has strong links to environmental NGOs, which got it off the ground.

Sierra Club of Canada typifies the response of environmental NGOs. “FSC has done the most to set high standards, particularly in its involvement of First Nations people and its inclusion of workers’ rights,” says Rachel Plotkin, a spokesperson based in Ottawa. “It’s more than logging practices, but how logging affects the community in which companies operate.”

This makes people like Kiekens wonder how Tembec will achieve FSC certification. “Tembec has yet to deliver on its promise to meet FSC certification,” yet it has achieved green PR. Is Tembec more green than Weyerhaeuser or Weldwood, he questions, referring to two companies that are looking at alternatives other than FSC.

Still, Tembec remains undeterred of such requirements. “It’s part of our culture,” Rocray says, “and it helps explain why these stakeholders sit at the table.” In Tembec’s calculation, such an broad-based approach goes a long way to explaining why the company has avoided the bad publicity that others have faced, which ultimately leads to roadblocks, barricades and nasty confrontations. One has to only recall what took place in Clayoquot Sound in British Columbia a few years ago to buttress Tembec’s argument that negotiation is often better than confrontation.

One of its sites in Ontario already meets the criteria set out by FSC, although it has not yet officially applied for such certification. It might take some time to achieve FSC approval, though. FSC has all kinds of additional conditions that are outside traditional forestry practices. This falls into what is called chain of custody monitoring. Simply put, FSC claims to be the only certification body that traces a product from the forest to the end user, while maintaining a balance between various factions, notably the industry, First Nations and retailers.

To be sure, companies are looking at market access as one of the benefits of certification. “Many corporations have come to the conclusion that they have to demonstrate some form of sustainable forest practice through certification,” Kiekens says. Yet, companies can find most of the features of FSC in the Canadian standard. “Third-party audits, multi-stakeholders and performance standards are all part of CSA,” he points out.

At the heart of the matter is whether consumers would pay more for wood products that meet standards? Simply put, do most consumers really care how the tree was felled and prepared for the paper and wood products they buy at big-box retailers like Home Depot and Lowe’s Home Improvement Warehouse? Although it’s unlikely consumers will greatly care about the finer points of certification, KPMG’s Alexander says, “It can help increase sales.”

Kiekens adds that consumers might not initially care about the finer details of forestry, but might become influenced by the media and “education” from retailers that have a stake in FSC. That’s precisely what companies like Tembec are banking on as it works out ways to better its public image, and capitalize on changing consumer tastes, which favour green products. “We’ll be in a good position to meet the demands of the marketplace,” Rocray says.

Perry J. Greenbaum is a Montreal-based freelance business and technology writer. He can be reached at saltpub@sympatico.ca.

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