The legal institutionalization of FSC certification in Gabon (commentary)

Gabon’s President Ali Bongo announced on September 26, during a visit to a Rougier wood processing plant, that all forest concessions in Gabon will have to be certified with the Forest Stewardship Council (FSC) standard by 2022. There are about 40 active logging concessions in Gabon, covering nearly 16 million hectares or nearly 40 million acres.

The FSC is considered the most demanding label in terms of forest management. Launched with the active support of WWF in 1993, this certification makes the bet that it is possible to exploit the forest without destroying it, and that the three pillars of sustainable development — ecological, social, and economic — can be reconciled.

Known to be closer to NGOs than to industrialists, FSC has a “global” competitor, the PEFC (Program for the Endorsement of Forest Certification), launched with the support of the European timber industry. The PEFC was intended to be more appropriate to the fragmented structure of small European forest property (the original name was Pan European Forest Certification), before becoming a global program for the mutual recognition of national or regional certifications, often considered less demanding.

A gradual process of institutionalization

Forest certification is a voluntary instrument, based on the willingness of consumers to pay more for legal timber from “sustainable” forest exploitation. It assumes that the certified entity (an owner or concessionaire) goes beyond regulatory standards in environmental and social terms, and is committed to continuous improvement of its practices. The results must be measurable in the field and, of course, the certification must be carried out by third parties, certification bodies accredited by Accreditation Service International (ASI) on behalf of the FSC.

The FSC has always wanted to be independent of public authorities by adopting a business-to-business model. The certifying bodies, for-profit organizations that are accredited on behalf of the FSC, are chosen and remunerated by the concessionaires who apply for certification. In the 1990s, FSC certification was viewed with caution, if not hostility, by professional foresters and developing country governments. They saw it as an encroachment on the prerogatives of forest services, which were supposed to have a monopoly on quality control in forest management. Gradually, companies selling their wood on ecologically sensitive markets (particularly in northern Europe) perceived the interest they had in adopting the FSC label, in order to maintain or increase their shares on these profitable markets. Southern governments, frequently attacked by NGOs for their lax enforcement of environmental laws, have highlighted the development of certification in their countries as evidence of their ecological virtue.

Despite the initial skepticism of many observers about governance issues, the “Congo Basin” (a name that has become common in Central African forest countries) is the sub-region with the largest area of certified natural tropical forests (up to 5.6 million hectare in 2017). States have also begun to draw inspiration from the principles and criteria of certification for their own legislation. Borrowings, however, have remained modest, as the new generation of forest laws is still under preparation.

At the end of the 2000s, the European Union made a proposal to tropical forest countries for voluntary partnership agreements (VPAs) to improve governance and eliminate illegal logging and trade. This process, known as FLEGT (Forest Governance, Law Enforcement and Trade), aims to restore the control capacities of administrations as the priority objectives. In the eyes of EU decision makers, FSC certification should remain in the field of private arrangements. In fact, in Central Africa, FSC certification has stagnated or even declined for several years. In parallel, the “legality certifications,” less demanding than the FSC and proposed by various organizations, attract several large forestry companies exporting to the EU, insofar as they help them to demonstrate the legality of the timber and its traceability from the forest to the port of shipment

Governing by private instruments

The Gabonese President’s decision to require FSC certification is a further step in the use of private instruments for public regulation purposes. In concrete terms, it means that the Gabonese government “offloads” control of forest concessions onto an international organization (the FSC) and certification bodies. It can also be seen as an admission of the administration’s inability to regulate the sector and enforce forest management plans, which are legal obligations. This will undoubtedly accentuate the feeling of marginalization felt by many executives of the ministry in charge of forests, while the government has multiplied in recent years the creation of agencies, directly linked to the Presidency, for environmental management.

Unlike its neighbors, Gabon has never shown any interest in the European proposal for a Voluntary Partnership Agreement, probably because its timber exports are increasingly focused on Asia. If other countries follow Gabon’s lead and make private certification mandatory (the Congo-Brazzaville is considering this in its forestry law under preparation), the European strategy, which gives only a secondary place to private certification, will probably have to be reviewed.

President Bongo’s exclusive choice of the FSC is surprising, as the competing label (PAFC, Pan African Forest Certification, a partner of the PEFC), has begun to be deployed (the first PAFC certification took place in 2017 in Gabon) and a recent circular from the ministry in charge of forests pushed companies to commit themselves to PAFC certification. Several concessionaires have so far considered adopting this label, which does not question the exploitation within “Intact Forest Landscapes,” a concept put forward by NGOs referring to forested areas of at least 50 square kilometers (12,355 acres) not crossed by roads. At the FSC, the issue of IFLs is under discussion. The choice of FSC is therefore likely to be a problem at some point for companies having this type of “intact landscape” in their permits.

Underlying policy objectives

One of the objectives of Bongo’s measure is probably also to reduce the areas occupied by forest concessions in favor of an extension of protected areas (objective of the powerful National Agency for the Protection of Nature). The likely abandonment of permits by operators who will not be able or willing to certify will also free up space for the development of oil palm and rubber plantations by the Olam Group. This multinational agro-business corporation, headquartered in Singapore, was founded in 1989 by members of the Indian diaspora. With its two main shareholders, Mitsubishi and the Singapore Sovereign Wealth Fund, it now plays a key role in Gabon’s economy.

The ban on log exports imposed by the Gabonese government in 2011 has led to a significant drop in timber production and a concentration of companies in the sector. The certification requirement, in turn, will lead to a new phase of concentration for the benefit of a limited number of large companies. With the three major companies now FSC-certified being European, the question is what will Chinese companies do, as they own more than half of the country’s concessions. It is likely that Chinese publicly owned companies, under Beijing’s control, would succeed in being certified, if they can control more strictly the practices of their subcontractors. However, for private Chinese companies, which are the most numerous, the task is difficult, and it is likely that many of them will not want to or be able to bear the costs of certification without being able to pass them on to the selling prices of wood. Their departure is, therefore, almost certain.

A sign of Sino-Indian rivalry in Africa?

Should this unprecedented political measure also be seen as a sign of growing competition between Indian and Chinese actors on the African continent? India, whose timber imports are growing faster than China’s, has clearly set its sights on Gabon to access Central Africa’s forest resources. The Free Zone of Nkok (Gabon Special Economic Zone, or GSEZ), built near Libreville by the Olam group to attract timber industries after the ban on raw timber exports, has attracted many Indian investors, much more than Chinese industrialists. These industries need large quantities of logs, which are supplied by the French group Rougier in particular through a contract with GSEZ, an entity co-managed by the Gabonese government and Olam.

The reduction of Chinese companies’ control over Gabon’s forests could open up interesting opportunities for Indian industrialists wishing to acquire concessions to secure their wood supply, in a context of emerging overcapacity in wood processing in Gabon.

A risk for the FSC?

For the FSC, this announcement is a resounding recognition, especially since the words of the Gabonese president are laudatory (“in terms of quality, there is now an essential label that will guarantee access for our production to the reference markets, it is that of the FSC”). The FSC might have preferred the use of incentives (through tax reductions for certified concessions) to a government-mandated obligation, because the pressure from forest companies will be strong on the certifying bodies to obtain the necessary label.

However, these organizations accredited on behalf of the FSC (which does not certify itself) are chosen and remunerated by companies applying for certification, and they have certain margins of interpretation of the criteria of “good forest management.” Some of these certifying bodies are known to be more understanding than others vis-à-vis their clients’ constraints. The FSC will have to pay particular attention to the quality of the certificates issued by these bodies, especially since NGOs hostile to industrial logging will not fail to try to call out companies constrained to FSC certification that have not really integrated the change in the managerial approach that must go with it.

Forest certification is based on consumer confidence, in a context of uncertainty about the content of the notion of “sustainable forest management” of large tropical forests and controversies about the impacts of logging. It is, therefore, a fragile instrument, as trust can quickly be undermined by a few unfavorable media episodes. The future will tell us whether the Gabonese decision is the first step in consecrating the power of private governance in an area that has long remained particularly sovereign, or whether the conversion of a voluntary instrument into a legal prerequisite is turning against the FSC by undermining its credibility.

This commentary is derived from a paper initially published in French at Willagri.com.

Alain Karsenty, environmental economist, has been research director with CIRAD (Montpellier, France) since 1992. His research and expertise area covers the economic instruments for the environment, including taxation, Payments for Environmental Services (PES), and REDD+. He has an extensive knowledge of land tenure, concessions, forest policies and practices in West & Central Africa and Madagascar, his main areas of fieldwork. As an international consultant, he participated in several policy and economic reforms processes with national teams in Africa. He is the author of one hundred scientific articles and co-authored several books and special issues. He is a member of the scientific board of the French GEF (FFEM).

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