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Forest Stewardship

The genesis of this movement lies in the creation of the Forest Stewardship Council (FSC) in 1993, a year after the UN Conference on Environment and Development in Rio de Janeiro failed to sign the fo…

The genesis of this movement lies in the creation of the Forest Stewardship Council (FSC) in 1993, a year after the UN Conference on Environment and Development in Rio de Janeiro failed to sign the forestry treaty, recalls Antony Marcil, president and CEO of FSC Canada. “The whole premise in 1993 was to make a market-based system … completely outside government.”

The FSC is an international nonprofit organization, headquartered in Bonn, Germany. It describes itself as “a certification and labeling system that guarantees that paper and wood products carrying the FSC label comes from responsibly-managed forests and verified recycled sources.” FSC governance is balanced among four chambers: environmental groups, businesses, social chamber (labour and other interests) and First Nations, ensuring no one quarter dominates its agenda.

FSC sets its standards for forest management and chain of custody certification. Third-party auditors, of which the world’s largest is the Rainforest Alliance, carry out complex audits of pulp and paper company tenures to determine whether they meet FSC standards and the interests and needs of the chambers. Although there are other certification systems besides FSC, they are considered seriously flawed. “The FSC system gives buyers the best, most complete and most reliable means of ensuring their wood comes from responsibly managed sources,” according to the Environmental Paper Network. “Other systems have given the thumbs-up to some egregious logging and business practices.”

By mid-2007, FSC had over 640 members in 67 countries and 90 million hectares in 78 countries certified to FSC standards. It is estimated that the global market for FSC-certified products was worth over US$5 billion.

In its accord with WWF, Tembec said it would strive to obtain FSC certification for all of its nearly 14 million hectares of forest tenure. “It didn’t feel controversial to us in 2001, although there was virtually no FSC content found in Canada at that time. It certainly was a leap of faith. We took the recognition of the support WWF was offering us and the opportunity to improve our forestry standards to an international standard. Our business was international and the opportunity to work with a set of standards with international reach and to work with a broad set of environmental and First Nations participants was important,” says Chris McDonell, Tembec’s manager of environmental/ aboriginal relations.

This was a giant step. As FSC is not governed by industry, McDonell acknowledges that committing to FSC standards at the time was risky. “It is a voluntary standard and meant to certify to a standard above the law,” says Steve Price, conservation director for WWF Canada.

McDonell notes, “To be certified requires a lot of engagement with your local community. We saw it as a big challenge, but one that would ultimately have durability. The credibility of the approach will stand the test of time.”

Price recalls the reaction to this first move to bring FSC certification into the mainstream of the industry, and the concern that Tembec might find itself whipsawed between industry and environmentalists. “Tembec was criticized strongly by the industry across Canada for committing to this.” However, WWF assisted Tembec with the conservation steps the company had to take to achieve FSC certification, and the company now has 9.7 million hectares of FSC-certified tenure and four million hectares more in the process of being certified.

Domtar came on board shortly afterward. It owns 300,000 hectares of forest, and licences 6.7 million more. All is FSC-certified or in the process of being certified, according to Guy Boucher, Domtar’s vice-president, sustainable development. “In 2000 there was no certification that had everyone’s blessing. We decided to certify all our forests ISO 14,000. It gave us the base and systems to manage all of our forests. When we had that done and saw the momentum of FSC and that it encompassed more of the social dimension, FSC was the certification of choice,” he said.

Other companies have also obtained FSC certification for vast tenures. In September 2005, Alberta-Pacific received FSC certification for 5.5 million hectares of its Forest Management Agreement area. Canada now has 25-30 million hectares of FSC-certified forests -about 25% of the Canadian commercial forest area, according to Price.

The Market

In 2001, FSC certification was presented as a forest management improvement process, and also, by some accounts, as a way out of the war between environmentalists and industry. “The concept of it having a market cach was very much in the background. This was long before the concept of chain of custody was in the mainstream,” McDonell recalls.

Today however, the demand for FSC product is strong enough that Canadian suppliers of FSC-certified paper cannot meet the need, according to Marcil. “There is FSC paper coming from Asia, Latin America and Europe. If Canadian suppliers are not putting it on the market, someone else will.” A perusal of the FSC Canada Website gives a good look at the impressive market penetration of FSCcertified products.

FSC Canada began a marketing campaign in July 2005, asking buyers of wood and paper products to request FSC-certified products. This has boosted demand, but Price observes that more supply is required in order to fuel further demand. Demand is strong along the value chain, from paper mills to end users of paper and wood products. Domtar, for example, gives preference to FSC-certified suppliers and will not buy fibre from illegally harvested wood. This speaks to the value of being FSC-certified for chain of custody -Domtar knows where all of its fibre comes from, and so, it can identify non-FSC-certified sources.

Domtar has increased its production of FSC-certified paper from 50,000 tonnes in 2003 to 250,000 tonnes in 2007 -five percent of its output and rising. Its FSC-certified line, EarthChoice, has more than 850 product options. “Our biggest purchasers of EarthChoice are office paper, publishers, commercial and specialty [users]. We give our customers peace of mind. Publishers using FSC have grown from 10-20 to thousands, with at least 1,000 in Canada alone,” Boucher notes.

One sign of the weight EarthChoice carries in the marketplace is the fact that Office Depot and Staples carry it, Boucher notes. “These two groups normally emphasize their own brands, so the fact that they carry our brand is a statement.” Additionally, the financial sector is reportedly the biggest user of FSCcertified paper, and many companies and governments require it from suppliers.

On the wood side, retail giant Home Depot is a huge buyer of Tembec’s FSCcertified lumber. “In their Eco Options catalogue that profiles environmentally preferable products, it specifically refers to Tembec FSC-certified lumber. We stamp each 2×4 and 2×6 piece of lumber with FSC chain of custody. Home Depot has been a big advocate of FSC,” McDonell says.

Marcil is more pointed: “Home Depot has said very publicly that it will take all the FSC-certified wood Tembec can produce. Tembec’s whole output could not supply Home Depot’s needs.” As a supplier of materials to manufacturers of finished goods, McDonell underscores the importance of FSC certification. “We have chain of custody at all our facilities, enabling our customers to acquire the chain of custody and pass this down the chain to their users.”

FSC certification not only gives its holders exclusive access to a growing market that accepts only FSC-certified products. It also offers innoculation from protests and outright rejection from some buyers who demand it -either from internal policy points of view or for fear that association with irresponsible players will taint their brands.

Last February, Staples announced it was cancelling its paper supply contract -nine percent of what it uses -with Singapore- based Asia Pulp & Paper (APP) over concerns
about rainforest destruction.

FSC has “aggressively disassociated” itself from APP over what it calls partial certification; that is, ” …companies certifying some forest areas and/or chain of custody operations for compliance with FSC requirements while at the same time engaging in unacceptable forest practices in uncertified areas …” according to FSC Canada.

Does FSC give Canadian pulp and paper companies a competitive edge? “Yes,” states Boucher. “It puts us in the limelight with a product that differentiates us from other products. We are very proud of it and it puts us in a competitive position for providing what clients are demanding more and more.”

McDonell adds, “It is clear that the environmental footprint, as characterized by FSC, has become an important product attribute to the customer. It has allowed us to differentiate our product. It is a value that more and more customers recognize -minimized environmental impact and improved socio-economic qualities in the forest. Other countries around the world have been pursuing FSC certification. It is very valuable to us to be a large Canadian producer of an internationally recognized product.”

PPC