Forest and Wood Certification. Ed. 7/2000
Newsletter Forestry and Wood Certification No. 6/2003
Information contained in this newsletter is sent to approximately 14 000 recipients in 14 countries and is translated into 9 languages.
This newsletter provides information on credible forest certification and other steps towards improving forest management. Particular attention is given to combating illegal logging and forest crime, the involvement of communities in forest management, conservation of highly valuable forests, trends in the investment sector and companies/ individuals showing leadership.
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/ NewsletterForestry and Wood Certification
No. 6 (December)– 2003
Contents
Improving Forest Management in Europe and Around the World 1
Stop Denial of Illegal Logging in Eastern Europe 1
Estonian Government Cracks Down on Illegal Logging 1
NGOs United for Green Procurement 2
Danes Exclude Illegal Timber From Public Works 2
UK Construction Sector Chooses FSC 2
Illegal Logging Responsible for Indonesian Flood Disaster 3
New WWF Producer Groups in Indonesia and Africa 3
UK Website on Illegal Logging 3
Focus on Responsible Investment 4
Minimise Bottom Line Risk - New WWF Investment Guidelines 4
FSC Causes a Competitive Edge With Investors 4
Forests are not Safe From Banks 4
Forest - Phoenix From the Ashes of Bankruptcy 5
Are Global Businesses Profiting from Congo War? 5
Corporate Responsibility Website 6
News on FSC 6
Rise of FSC Certified Forests in Europe 6
FSC Pledge in Canada to Double FSC Area in North America 6
Sixteen State Forest Enterprises in Lithuania FSC Certified 7
FSC- Paper Boom 7
50% Premium on Low Quality Timber Through FSC 7
Handling Complaints Effectively 7
Background and Facts 8
Certification Assistance 8
Improving Forest Management in Europe and Around the World
Stop Denial of Illegal Logging in Eastern Europe
WWF calls on EU member states to acknowledge the problem of illegal logging in Accession and Candidate countries and to take effective measures through the European Commission Action Plan on Illegal Logging. The recent report, The features of illegal logging and related trade in the Baltic Sea Region, shows the complexity of illegal logging in Accession countries. It reveals the dangerous combination of lack of governance, illegal actors and socio-economic problems. The European Commission's Action Plan on Illegal Logging currently does not see illegal harvesting and trade in Accession and Candidate countries as a problem that needs to be tackled, despite repeated calls by NGOs. In addition, it can be expected that an increasing amount of illegal timber from Russia will be entering the EU through the new member states.
Source: WWF Press release, October 21 2003
Estonian Government Cracks Down on Illegal Logging
While the EU is not acknowledging the problem of illegal logging in Accession countries the Estonian government is taking matters in their own hands. The Estonian Ministry of Environment is seizing forestry machines suspect to be used in illegal cuttings and increases law enforcement capacity through new surveillance devices.
The Estonian NGOs ELF and Estonian Green Movement welcome these actions but urge the Government to focus on key drivers for illegal logging in the country. Changes in forestry, tax and criminal legislation are urgently needed to alter the perception that illegal forestry can be a profitable business.
The Estonian Ministry estimates that the damage to forests due to illegal logging amounts to EUR 2,5 million, down from EUR 3.83 million early 2002.
Sources: Baltic News Service November 14 2003; Joint NGO Press release on the EU action plan against illegal logging; ELF and Estonian Green Movement November 2003 www.panda.org/about_wwf/where_we_work/europe/news/news.cfm?uNewsID=9277
NGOs United for Green Procurement
In October a coalition of 14 NGOs sent a strong message to the EU to urgently progress on green and social procurement. Public authorities must be allowed to take environmental and social criteria, as well as
equality, into account when awarding their public contracts. Despite strong support by the European Parliament and a recent positive ruling by the European court of Justice, the Council continues to block municipalities and other public authorities that seek to award public contracts in a more ethical manner.
“The Council makes a farce of democracy by ignoring the demands of the municipalities and most significantly the cross-party demand of the European Parliament,” says Jan Willem Goudriaan, Deputy General Secretary of the European Federation of Public Service Unions speaking on behalf of the Coalition for Green and Social Procurement and organisations representing municipalities. The NGO coalition consists of WWF, EEB, EPSU, Association of European Consumers, Social Platform, European Disability Forum, Greenpeace, Solidar, Oxfam, Climate Alliance, CAN Europe, EUROCITIES, Fairtrade and the UK Clean Clothes Campaign.
Source: NGO coalition paper October 2003 http://www.panda.org/news_facts/publications/forests/index.cfm
Excluding Illegal Timber From Public Works
The Danish Ministry of the Environment recently published a timber purchasing guide which helps public and semi- public institutions to ensure the tropical timber they purchase is produced in a legal and sustainable manner. The guide concludes that “at present the easiest way to obtain legally and sustainably produced tropical timber is by means of an FSC certificate”. The guide is however voluntary and requires implementation.
“WWF welcomes that the Danish government takes a first step to exclude illegal and controversial timber from their public works”, said Duncan Pollard, Head of the WWF European Forest Programme. “We continue to urge the EU to approve green procurement in their new directives and hope that other countries will take matters in their own hands like Denmark.”
The Danish guide gives some credit to the certification system MTCC on legality issues however notes that MTCC is not yet a guarantee for sustainable forest management. “Currently only FSC gives buyers a choice to buy from legal and well managed sources”, said Duncan Pollard. “Other systems do not meet the required criteria. MTCC certified timber for instance currently does not guarantee environmentally, socially and economically sustainable forest management and is still missing important steps to verify legal compliance.”
Access the procurement guide on http://www.sns.dk/udgivelser/2003/tropical/default.htm
UK Construction Sector Chooses FSC
On November 11 UCATT (Britain's construction workers' union) and Greenpeace launched a new initiative to exclude controversial timber from the UK construction sector. In the report The Case for Specifying Timber From Sustainable and Legal Sources the organisations make it clear that companies can only guarantee that timber used in their projects is from well managed forests by purchasing timber certified by the Forest Stewardship Council (FSC). The report will be distributed to UCATT members, contractors, local authorities, housing associations and property developers.
The UK is currently the largest importer of illegal tropical timber in Europe, with approximately 60% of all UK tropical timber imports coming from illegal logging operations in some of the world's most important rainforests, including the Amazon, Indonesia and Central Africa. The construction industry uses approximately 70% of all the timber sold by the UK timber industry. Central Government contracts account for 15% of UK timber use, and the public sector as a whole accounts for 40%.
George Brumwell, UCATT General Secretary, said 'The construction industry is often criticised for its approach to the use of natural resources. This initiative is an opportunity to silence those critics and prove that everyone within the industry can contribute to sustainable development.”
Sources: Editorial, Timber Trades Journal, November 15 2003; Press Release Greenpeace, UCATT November 10 2003
Illegal Logging Responsible for Indonesian Flood Disaster
The devastating flood in Indonesia beginning of November which left more than 200 people dead or feared killed is largely due to the rampant logging in Sumatra's forests, according to environmental groups and government officials.
"At least 85 percent of the floods and landslides in Indonesia are caused by illegal logging", said Longgena Ginting, Executive Director of Walhi, Indonesia's largest environmental group.
Unchecked logging disrupts the natural absorption and flow of rainwater from the highlands, triggering floods and landslides that sweep into the valleys.
Indonesia struggles to stop forest crime which devastates the country. 8 trees out of 10 are cut illegally. Indonesia has already lost 75% of its forests.
Sources: Associated Press; Environmental News Network November 5 2003; TTJ November 7 2003
New WWF Producer Groups in Indonesia and Africa
WWF has recently formed Producers Groups for West and Central Africa as well as Indonesia, offering a framework for committed logging companies to progress towards certification.
By setting up Producer Groups WWF offers incentives for timber producers around the world to progress to environmentally, socially, and economically sustainable forestry practices. Any company may be eligible to join, provided they have a clear and timebound action plan to show how they intend to progress towards credible forest certification. Progress against this action plan will be periodically monitored, using independent third party auditors.
Indonesian and African producers are facing increasing scrutiny to demonstrate to buyers that the products they are offering are legal and progressing towards certification. Producer Groups are part of the WWF Global Forest and Trade Network.
Source: Global Forest and Trade Network October 2003 For more information go to www.panda.org/forestandtrade
UK Website on Illegal Logging
The Sustainable Development Programme of the Royal Institute of International Affairs in London, has developed a website which covers all aspects of illegal logging. The informative site describes current political processes, case studies and recent news on illegal logging from around the world. Visit http://www.illegal-logging.info
Focus on Responsible Investment
Minimise Bottom Line Risk - New WWF Investment Guidelines
WWF has produced investment guidelines to assist financial institutions to minimise their bottom line and reputational risk when investing in forest, mining and agricultural projects around the world. This new focus results from a mounting recognition of environmental and financial risks through the financing of projects impacting forests e.g. pulp and paper mills, palm oil plantations, mines and dams.
In October WWF, the World Bank and the World Business Council for Sustainable Development hosted a Forest Investment Forum in Washington DC which brought together nearly 150 Senior Executives of globally significant forest product companies, development and commercial banks and other financial institutions as well as leading conservation agencies. In this conference a need for investment safeguards was agreed, both as an incentive to responsible investment and a deterrent to unsustainable and destructive activities.
WWF will work with financial institutions (commercial banks, development banks, export credit agencies), forest companies, governments and others to agree a process to further develop and implement these investment policies to protect forests and local communities.
Source: WWF International October 2003 For a copy of the investment guidelines go to http://www.panda.org/downloads/forests/wwfinvestmentpol7oct03final.doc
FSC Causes a Competitive Edge With Investors
Innovest - a New York based leading environmental finance advisory firm - has improved the rating of North America's largest producer of paper and other wood products, Domtar, from BBB to A, due to its recent decision to seek certification for all of its forests and mills according to FSC standards.
Innovest states that companies like Domtar who seek FSC certification and co-operation with NGOs are gaining a competitive edge.
“Major global institutional investors increasingly recognise commitments such as Domtar´s as a differentiating factor, demonstrating the business case for beyond compliance environmental and social initiatives”.
According to Innovest companies receiving their top ranking in the forestry sector have outperformed others by 43% over the last 4 years. “Innovests rating have shown that sector leaders are becoming more aware of the link between environmental performance and the bottom line, leveraging this to reduce the cost of capital, risk exposure and to improve reputation.”
Source: Innovest Strategic Value Advisors, Upgrade Alert (NYSE/TSX: DTC) November 2003 Domtar Inc. www.innovestgroup.com
Forests are not Safe From Banks
WWF recently published a report which rates 11 German, Dutch and Swiss Banks according to their investment behaviour: the existence and implementation of environmental and social standards, and the transparency of their investment. The overall results show that many banks have no effective safeguards to prevent their money being used for forest destruction.
The ranking and scoring of the banks from best to worst:
1. ABN Amro - Netherlands (B+);
2. DEG - Deutsche Investitions- und Entwicklungsgesellschaft - Germany (B+);
3. Hypo Vereinsbank - Germany (B+);
4. UBS – Switzerland (B-);
5. Kreditanstalt für Wiederaufbau – Germany (C+);
6. Dresdner Bank – Germany (C+);
7. Westdeutsche Landesbank - Germany (C);
8. Commerzbank – Germany (C-);
9. Participation in the evaluation was refused by Deutsche Bank (Germany), IKB Deutsche Industriebank (Germany) and NORD/LB – Norddeutsche Landesbank (Germany)
Since the 1990s all the surveyed banks had been subject to massive NGO criticism for their investment in the Indonesian pulp and paper and palmoil sector. ABN AMRO from the Netherlands has developed environmental policies together with NGOs and in this could serve as an example to others.
Source: WWF Press release November 20 2003 Download the German report from http://www.panda.org/downloads/forests/bankenrating.pdf
Forest - Phoenix From the Ashes of Bankruptcy
Following the bankruptcy of the forest company Bosques S.A. nearly 60.000 hectares of temperate rainforest in Southern Chile will be protected with the help of a bank. FleetBoston Financial Corporation, the largest creditor of Bosques S.A., assisted a Chilean conservation group to purchase the forest property in public auction for conservation purposes. "By partnering with The Nature Conservancy we were able to construct a unique transaction that reflects our corporate values and fulfils our financial responsibilities to our shareholders, while preserving an ecologically-critical area in Chile," said Chad Gifford, chairman and CEO of FleetBoston Financial Corporation.
The Valdivian Coastal Range is one of only five temperate rainforests on Earth. When FleetBoston learned of the significance of this forest, they made a corporate decision to balance their interests as a creditor with their commitment to be environmentally and socially responsible.
The acquisition is part of a larger partnership between The Nature Conservancy, WWF, the Global Conservation Fund of Conservation International and local organizations in Chile.