Pressure on FSC to address transparency and conflict of interest concerns

The eco wood certifier needs to fulfill its role to protect forests by fixing a flawed system, say NGOs. FSC says change is coming.

A man cuts timber with power saw.
A man cuts a tree with a power saw. FSC is one of the world's most trusted ethical product certifier, but the Bonn-headquartered organisation has come under increasing scrutiny. Image: FSC, CC BY 2.0

The Forest Stewardship Council (FSC), a sustainable forestry products certification scheme, needs to address weaknesses in its system that allow deforesters to sell products using the FSC label, environmentalists say.

FSC is one of the world’s most established ethical product certifiers, but the Bonn-headquartered organisation has come under scrutiny for delaying investigations into companies linked to deforestation and human rights abuses, and an inquiry system that critics say is undermined by conflict of interest.

An investigation by environmental group Earthsight in June revealed that FSC had certified as sustainable wood used to make IKEA furniture that had been sourced illegally from high conservation value forests in Ukraine.

The following month, Indonesian non-governmental organisation (NGO) Auriga complained that FSC had shelved investigations into companies linked to illegal forest clearing and was instead focusing its efforts on getting companies that had been kicked out of FSC for violating its rules re-certified.

If FSC claims it is a brand that people can trust for sustainable forest products then it should be transparent and accountable.

Aida Greenbury, sustainability advisor, Indonesian Oil Palm Farmers Union (SPKS)

FSC has blamed the Covid-19 pandemic for the delays, saying that the organisation lacks the resources to conduct investigations until later in the year.

The companies in question were Indonesian business empire Djarum, whose forestry companies are alleged to have cleared rainforests in Kalimantan, and Korindo, a palm oil firm linked to deforestation and human rights abuses in Papua.

Grant Rosoman, a global forests solutions senior adviser with Greenpeace International, commented that while FSC has said that it doesn’t have the capacity to handle these investigations, it is working on bringing companies like Indonesian pulp and paper firm Asia Pacific Resources International Limited (APRIL) back into the scheme.

“That sounds odd to us. How did APRIL manage to get favourable treatment?” said Rosoman.

APRIL, which is alleged to have used wood sourced from firms linked to Djarum, was banned from using the FSC green label in 2013 following complaints made by NGOs.

Rosoman said that FSC should make public any conflicts of interest among board members who are involved in investigations. Sources familiar with FSC have said that some board members have tried to sway decisions in favour of certain companies.

“If conflicts of interest are not declared publicly it raised questions about FSC’s overall transparency,” said Rosoman, whose organisation quit FSC in 2018 on the grounds that the certification body was no longer fulfilling its mandate to protect forests and human rights. Greenpeace remains involved with FSC in some countries.

Another point of contention lies with FSC not publishing maps that show where its 200 million hectares of certified forests are. 

It is imperative that companies within the FSC system support efforts to improve transparency and monitoring and ensure these issues do not undermine or reverse the benefits that exist from FSC-certified forest management.

World Wide Fund for Nature

Aida Greenbury, a sustainability advisor for the Indonesian Oil Palm Farmers Union (SPKS), said that she expects “the highest standards” of transparency from a global certification body like FSC, and maps of certified areas should be made public.

In addition, FSC should introduce “proper” public consultations before major decisions on conflict cases are made, said Greenbury, who is a member of FSC and former sustainability chief of Indonesian pulpwood giant Asia Pulp and Paper (APP), a company that FSC cut ties with in 2007 due to evidence of destructive forestry practices. 

Rosoman noted that the Roundtable on Sustainable Palm Oil (RSPO), the leading certifier for the palm oil trade, is ahead of FSC in terms of transparency because it publishes data on where RSPO-certified plantations are. 

Companies involved with FSC have blocked calls for maps to be made public in the past, Rosoman said. “They say they don’t see the need [for public maps] and don’t want the attention. But the public need to know, and have a right to know,” he said.

Rosoman said that while FSC is the best sustainable wood products certification system there is, the involvement of rogue players in the system is undermining its credibility. “The bad eggs bring the whole system down,” he said.

The World Wide Fund for Nature (WWF) joined the FSC as an international board member in January. The environmental group told Eco-Business that FSC is the only credible global forest certification system, thanks to “good and solid” due diligence practices and a multi-stakeholder structure. But it acknowleged that improvement is needed.

WWF said in a statement that close scrutiny of FSC’s board structure is “fundamental” for ensuring transparency and dealing with conflict of interest. “The stronger the review of candidates to rule out this risk, the better, and if further ways to prevent this are clear, they should be adopted.”

“WWF has actively questioned where it believed candidates coming forward could be inappropriate due to conflict of interest, including a recent candidate,” the group said.

FSC promises change

In an interview with Eco-Business, FSC director general Kim Carstensen rejected allegations that conflicts of interest have “at any point” affected decisions made by the board, but admitted that the system does face challenges.

FSC’s board is made up of 12 elected representatives from three chambers; environmental, social and economic. Six new members were elected for a new four-year term in January. According to FSC policy, board members are obliged to declare any conflict of interest, so they can be excluded from discussions where necessary. 

Carstensen cited two conflicts of interests related to APRIL that were declared at the end of last year, and one recently declared related to Korindo, which meant that those board members were excluded from discussions about those companies.

He said that conflict of interest could become a problem if too many board members need to be excluded. “We could get into a situation where the board is unable to make decisions,” he said.

So FSC is looking into new ways of handling complaints that would exclude the board.

The current complaints panel, which consists of three members, one from each chamber, is a “weakness”, because it’s difficult to find members who have enough experience of the issue “without being implicated in the case”, said Carstensen.

The bigger the company under investigation, the more difficult that becomes, he added. 

“With a giant like APP or APRIL, everybody related to Indonesia has somehow been involved in something to do with these companies. It’s quite difficult to find [unconflicted] members.”

FSC has about 1,160 members.

Hiring a contractor to do the investigation work would be one way to “professionalise, speed up and avoid the conflict of interest we might have otherwise”, Carstensen said.

NGOs have voiced concern that FSC’s move towards a new way to handle complaints—where a formal investigation and potential expulsion from the certification body is replaced with mediation—could let forest destroyers off the hook.

Carstensen said that mediation would speed up the complaints process, which he noted some NGOs have said is “simply too slow”.

Also, removing a company from the certification body could mean several years before FSC could enter “positive” talks again, for instance guiding the firm towards a moratorium on deforestation, Carstensen said.

Carstensen clarified that FSC would retain the option of removing rogue companies from the system.

“We have to be clear that if a company breaks our rules, and is involved in deforestation or human rights violations, they need to change and provide a remedy. If that doesn’t happen, disassociation will be the outcome.”

The Covid-19 outbreak has made on-site audits difficult for FSC, squeezing a major source of income for the certifier. But the organisation would largely return to normal operations by next month, Carstensen said.

APRIL, rubber firm Vietnam Rubber Group and agribusiness giant Olam International have been priorities for FSC as they are “ongoing cases”, but newer cases would be “reprioritised” towards the end of the year, Carstensen said.

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