- The Forest Stewardship Council (FSC) has adopted a number of significant changes during its recent general assembly in Bali, chief among them moving its cutoff date for eligibility from 1994 to 2020.
- With the change, logging companies that have cleared forests since 1994, but before 2020, will be allowed to obtain certification from the body, something they weren’t allowed to do before.
- To qualify, companies will have to restore forests and provide remedy for social harms done in the 1994-2020 period in their concessions.
- The decision has sparked responses from both critics and supporters, with the former saying the new rule rewards known deforesters, and the latter saying it opens opportunities for forest restoration and remedies for Indigenous and local communities.
JAKARTA — Environmental activists have slammed a rule change by the Forest Stewardship Council that will allow some loggers who couldn’t qualify over the past 30 years to now be certified sustainable.
Known as Motion 37, the rule moves a crucial cutoff date from 1994 to 2020: Under the long-standing rule, companies that had cleared any forests since 1994 weren’t eligible for FSC certification. Now, however, they are — as long as they haven’t cleared forests since 2020.
FSC members voted overwhelmingly in favor of the motion during the council’s general assembly on Oct. 13 on the Indonesian island of Bali.
The Rainforest Action Network, a San Francisco-based NGO, said the change would reward companies with “sordid legacies” by giving them “access to markets that have been exclusively accessible for companies that ended deforestation and the conversion of forests at the time of the creation of the FSC system.”
“The FSC’s commitment to maintain its 1994 cut-off date has been a defining feature which has separated it from other weaker certification systems that are not trusted by civil society,” RAN, a founding member of the FSC, said in a blog post.
But certain conditions will apply to prevent the policy change becoming a whitewash, according to proponents. Companies would have to restore the same amount of forests that had been cleared in their concessions between 1994 and 2020, and to provide remedy for the social harm done in the conversion process.
The rationale behind the new cutoff date is to encourage timber companies to restore deforested and degraded lands in their concessions as well as to offer social restoration to communities affected by the deforestation, which could come in the forms of handing land back to the communities and compensate them financially.
“This change will provide a route by which millions of hectares of forests can be restored and then become FSC certified and managed in a responsible manner according to the Principles and Criteria,” the FSC said on its website.
‘No quick fix’
For groups like RAN, the primary concern around the rule change is that the new cutoff date will allow forestry companies that have long histories of large-scale deforestation and conflicts with local and Indigenous communities to get FSC certificates and thus gain market access for which they would otherwise not be eligible.
RAN cited the cases of pulp and paper giants Asia Pulp and Paper (APP), which belongs to Indonesia’s Sinar Mas Group, and APRIL, a subsidiary of Singapore-based Royal Golden Eagle Group. Both companies have for years cleared, or “converted,” vast areas of tropical rainforest in Indonesia over the past 30 years, and with the cutoff date now moved to 2020, will be able to qualify for FSC certification.
Both companies used to have FSC certificates. But in 2007, the FSC disassociated from APP because the company was involved in destructive forestry practices that violated the FSC’s rules. APRIL withdrew from the FSC in 2013 after a number of NGOs, including RAN, filed a complaint against the company for large-scale deforestation activities in Indonesia.
Both APP and APRIL are seeking reassociation with the FSC.
“Together, these companies have cleared more than 2 million hectares [5 million acres] of Indonesia’s rainforests for pulp plantations and incited hundreds of ongoing social conflicts with Indigenous Peoples and traditional communities,” said RAN forest policy director Gemma Tillack. “Moving forward with efforts to end the dissociation of APP and APRIL is a massive risk to the reputation of the FSC system.”
Responding to the adoption of the 2020 cutoff date, both APP and APRIL said they fully intend to commit to the remedy framework under the FSC system.
“[A]nd the recent General Assembly votes now gives us the opportunity to evaluate and improve on the progress we have made since 2013 [to end disassociation with FSC],” APP said in a statement to Mongabay.
“APRIL remains engaged with FSC International and will continue to cooperate constructively towards the objective of ending our disassociation,” APRIL told Mongabay.
Civil society organizations that aren’t members of the FSC but attended the general assembly in Bali as observers also voiced their concerns.
Supintri Yohar, the forestry director at the Indonesian environmental NGO Auriga Nusantara, who attended the meeting, said the change of cutoff date will only benefit the companies.
“When these companies [that have destroyed forests and displaced Indigenous peoples] join the FSC, they will benefit from the presence of FSC labels [on their products],” he told Mongabay. “Meanwhile, local people won’t benefit from these logos.”
Aditya Bayunanda, acting CEO of WWF Indonesia, which is an FSC member, said the remedy framework that companies will have to abide by to make up for their pre-2020 deforestation is stringent. A proposal to beef up the framework, known as Motion 45, was also approved at the Bali meeting; the improved framework must be in place before companies can apply for it. Aditya said this means the new cutoff date could lead to restoration of forests and prevent future deforestation.
“We want the FSC to also use its market pressure, market tools, market strength to influence these plantations that have been developed,” he said. “So the remedy framework that is put forward is very strict. It’s a very high bar and it doesn’t allow for a company to immediately be certified. And we know that compensating and remedying for social harm takes time. So there is no quick fix for these companies. It’s still a very high bar and that’s how it should be.”
‘FSC’s track record doesn’t inspire confidence’
Even if a more robust remedy framework is developed and put in place, critics question whether the FSC has the capacity to enforce its rule on companies, given its spotty history of failing to uphold the standards that it touts.
Tillack of RAN pointed out that even when the cutoff date was 1994, many local and Indigenous communities impacted by companies with FSC certification had filed complaints with the council for years. And many of these communities still haven’t received remedy for the rights violations committed by the companies in their areas, she said.
“While the FSC claims that moving the cutoff date will enable it to play a role in restoring previously converted forests and remedying social harm, FSC’s track record does not inspire confidence,” Tillack said. “Countless communities who have filed complaints against FSC-certified members have still not received remedy.”
Representatives from some of these communities were at the meeting in Bali to urge the FSC to resolve their complaints immediately. Among them was Lusang Arang, a leader of Indigenous Dayak Bahau tribe from the village of Long Isun village in eastern Borneo.
The community has been in conflict with logging subsidiaries of the Roda Mas Group conglomerate since 2011. In 2014, several community members were arrested after confronting company workers felling trees on their ancestral lands without their consent.
The Long Isun community filed a complaint with the FSC in January 2020 and is still awaiting a remedy.
“For years, communities have filed complaints with the FSC over Indigenous and land rights violations committed by its members,” Lusang said. “Yet the FSC has not been able to deliver remedy for Indigenous and local communities at the urgency and pace at which our communities are being attacked. The remedy framework needs to be strengthened to serve impacted communities and needs to be improved with direct input from communities.”
The FSC has also been criticized by observers for failing to identify and address corruption, logging in protected areas, and large-scale deforestation. In recent years, investigations by the London-based NGO Earthsight have exposed the trade in illegal Russian timber and illegal Ukrainian timber, both certified by the FSC and sold by IKEA.
“So the question remains, can the FSC do what it has never done before and deliver remedy for Indigenous peoples and communities affected by its members and FSC-certified organizations?” Tillack said. “And can it secure remedy at a scale commensurate with the scale of destruction caused by the biggest corporate groups in the forestry sector on Indonesia’s forests and communities?”
No more hiding behind shell companies
For the remedy framework to be truly effective, Tillack said, the requirement to restore the environment and provide social remedy for harmed communities must be imposed on all companies controlled by corporate groups that try to obtain FSC certification or seek to end their disassociation with the FSC.
This is crucial because conglomerates often hide their connections to ongoing deforestation and conversion through opaque corporate structures or shadow companies. The true owners of deforesting companies are often concealed through networks of offshore holdings, secret jurisdictions and nominee shareholders and/or directors instead of the formal parent-subsidiary relationships.
In many cases, the beneficial owners have adopted “no deforestation, no peat and no exploitation” (NDPE) policies, and as such can still claim they’re respecting their policies because the deforestation is done by companies they don’t legally own.
A 2018 report by risk analysis group Chain Reaction Research shows this practice of hiding true corporate ownership is common among major agribusiness firms in Southeast Asia. In 2018, Indonesia’s Auriga Nusantara analyzed the ownership and management structures of APP’s declared pulpwood suppliers in Indonesia, and found that of 27 forest plantation companies that APP described as being “independent” partners, at least 24 had apparent close links with the Sinar Mas Group, the parent company of APP. Auriga said this indicated a practice of shadow companies.
Read more: Revealed: Paper giant’s ex-staff say it used their names for secret company in Borneo
Tillack said the FSC had recognized this practice in its new policy for association, which was approved in August 2022 and will take effect in January 2023. In its current policy, FSC says a company belongs to a corporate group only if the group owns 50 percent of the company. But according to the new policy, a company could be considered to belong to a corporate group even if the group has no formal ownership over the company, as long as the group controls the company.
This includes family control, financial control, management control, and operational control.
And if the beneficial owner of the company is the corporate group but it tries to conceal this through offshore companies or the use of nominees, then that company is still considered to belong to the group.
Through the new definitions of corporate group, FSC recognizes the importance of assessing the harm caused by associated companies across the entire operations of their corporate groups, including shadow companies.
Tillack said it’s crucial for the FSC to be able to deliver remedy and proportionate restoration at scale from companies like APP and APRIL prior to welcoming them back as members.
“Failing to do so will cast the FSC as irrelevant in the eyes of the world market and those who care about the world’s forests and forest communities,” she said.
‘Opportunities for better management’
Amid all the concerns over the rule change, there’s been a chorus of approval from the logging industry in Indonesia, which has a large pulp and paper industry and is a major timber exporter.
Purwadi Soeprihanto, secretary-general of Indonesia’s association of forestry businesses, APHI, said many loggers had been ineligible for FSC certification because of the 1994 cutoff date. He said most forestry plantations in Indonesia only started to be developed after that date, and thus missed the cutoff.
Herry Purnomo, a scientist at the Center for International Forestry Research (CIFOR), agreed that Indonesia, like other less-industrialized countries, only started converting forests for economic development in the 1990s, decades after industrialized countries had already started clearing their forests.
“In my opinion, the 1994 cutoff date doesn’t make sense because only European countries and the U.S., whose forest management is advanced, would [get certified]. In developed countries, deforestation finished in the 1990s,” Herry told Mongabay. “So the forest transition curve in each country is different.”
Countries like the U.S., Canada and Sweden have large swaths of their forests certified by the FSC. Indonesia, a country four and a half times bigger than Sweden, has just 3.3 million hectares (8.2 million acres) of FSC-certified forest, compared with Sweden’s 19.6 million hectares (48.4 million acres). Indonesia’s figure is also only 11% of the total 29.9 million hectares (74 million acres) of timber concessions in the country.
The change of cutoff date now gives a chance for millions of hectares of forestry concessions in Indonesia to be certified, Purwadi said.
“This step is an opportunity for companies to improve their credibility,” he said. “Motion 37 gives more opportunities for better forest management.”
He added the requirement to restore degraded and deforested lands would also support efforts to combat climate change.
Banner image: Deramakot forest reserve is a FSC-certified logging concession in Sabah, Malaysia. Image by Rhett A. Butler/Mongabay.
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