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By Tom Wright and Jim Carlton -- Wall Street Journal, 30 October 2007 --The
environmental group that runs a widely recognized labeling system to identify
"green" wood and paper products has acknowledged that some companies
using its label are destroying pristine forests and says it plans to overhaul
its rules.
The
admission by the Forest Stewardship Council, based in Bonn,
threatens the credibility of an organization whose tree-with-a-check-mark logo
adorns products for sale at big retailers including Home Depot Inc., Lowe's Cos and Ikea
AB.
Some
environmentalists have long complained the FSC's rules are too lax. A catalyst
for the group's move to tighten its standard came earlier this month when it
emerged that Singapore-based Asia Pulp & Paper Co. Ltd. -- one of the
largest paper companies in the developing world and a target of criticism for
its forestry practices -- planned to start using the FSC logo. The FSC has also
faced questions about companies in other parts of the world that use its logo.
A
rising number of "green" product-labeling organizations face a
dilemma similar to the FSC's: how to maintain high standards while promoting
their logos and increasing the supply of approved products to meet demand from
conscientious consumers and big retailers.
For
the past 14 years, the FSC -- with diverse members, from environmental groups
to big retailers -- has endorsed paper, furniture, tissues and other products.
Initially, the label signified that 100% of the wood used in a product was
harvested by sustainable methods. The original standard measured a company's
performance in specific forest areas and its overall environmental record.
But
there weren't many takers. In 1993, the year it was founded, the FSC issued
just three approvals and in the next few years not many more. To boost the
supply of FSC-endorsed products, the organization in 1997 added a more relaxed
labeling standard, allowing producers to use an FSC logo for paper in which
just 50% of the pulp came from forests that that met the organization's
original criteria.
For
the rest of the pulp, companies had to show only that it came from legal
sources. Products that passed this test could use an FSC logo with the words
"Mixed Sources" printed underneath.
The
number of FSC endorsements soared. As of last year, it issued 6,276
certifications. In all, the FSC's logo now adorns about $5 billion in products
a year, in terms of retail sales, the FSC says.
The
move to increase the number of certifications had an unintended consequence,
FSC officials say, allowing forestry companies to put the FSC label on some of
their products even if they are destroying large tracts of rain forest in other
places. "Companies are free-riding on our name," said Andre de
Freitas, head of operations at the FSC. "I feel bad about it."
The
FSC, which has a headquarters staff of just 26, relies on a network of outside
auditors to decide whether a company passes muster These auditors are paid
directly by the companies they assess, a practice that has also drawn
criticism.
For
APP, the auditor was SGS Group, a Geneva-based surveying firm. Salahudin
Yaacob, a Malaysia-based SGS executive who carried out the APP audit, said that
under FSC rules, his role was limited to ensuring that about 472,000 acres of
an APP tree plantation was legally owned by APP. Also in accordance with FSC
standards, he gave a green light to APP to use pulp from that plantation mixed
with fully FSC-certified pulp from companies in Brazil
and Australia
to make paper that APP could label with the FSC "mixed sources" logo.
But
environmentalists charge that APP has devastated a Delaware-size portion of
natural forest on Indonesia's
Sumatra island, putting the survival of
orangutan, tiger and elephant species there at risk. Several large paper
purchasers, including Ricoh Co, Ltd., of Japan; Office Depot Inc. in the U.S.;
and Idisa Papel, of Spain, have canceled contracts with APP out of concern that
its practices destroy rain forests.
Canecio
Munoz, executive director for environment at Sinar Mas Forestry, part of the
Sinar Mas Group, of Indonesia,
which also owns APP, says the company is working to improve its environmental
standards.
But
some environmentalists were dismayed. "If they [APP] can get an FSC
accreditation, there must be something wrong with the system," says Nazir
Foead, director of the Indonesian-species program at the Geneva-based World
Wildlife Fund, a co-founder of the FSC.
After
inquiries from The Wall Street Journal for this article, the FSC this month
proposed new, tighter regulations to its members, which include environmental
groups WWF, Greenpeace, and Friends of the Earth, as well as Ikea and Home
Depot.
Heiko
Liedeker, executive director of the FSC, rescinded the FSC's approval of APP
products at the same time he proposed a tightening of the FSC's rules.
"This company goes against our mission," he said in an interview.
APP
reacted angrily. "We played by the rules," Mr. Munoz said. "To
say one company or group cannot come out with an FSC logo is, to me,
ridiculous." He said APP plans to seek certification for its products from
a standards-setting organization that competes with the FSC.
The
FSC's proposed new rules, which the group's board will vote on next month, are
aimed at preventing any company that destroys rain forests or engages in
illegal logging from using the FSC's label. "This is a significant change
in the FSC systems, although it addresses an issue which has concerned FSC
stakeholders for many years," the FSC said in a statement to members.
If
approved, the measures will make it harder for companies to acquire the green
credibility -- and higher sales -- that FSC approval confers. But it could also
reduce the amount of FSC-approved paper at a time when big retailers say it
already is hard to come by. Home Depot, the Atlanta-based home-improvement
giant and an FSC member, formally expresses a "preference" for wood
certified by the group. Yet so little is available that it still represents "under
10%" of the company's total wood purchases, says Ron Jarvis, senior vice
president of environmental innovation at Home Depot.
Critics
say it is too late to prevent the damage done to the label's credibility, and
it remains unclear how it may affect the products already on store shelves. FSC
officials haven't yet decided whether the new standards will apply to companies
retroactively -- a move that could potentially require an extensive review of
the practices of every approved forestry company.
While
the FSC's standard has the widest geographic reach and the most endorsements by
environmental groups, it competes with many rivals. In North
America, for example, the timber-industry-originated Sustainable
Forestry Initiative, or SFI, encompasses about 135 million acres of forests,
while the FSC covers just 73 million acres, according to industry records. The
SFI was started in 1994 by members of the American Forest
and Paper Association in response to the FSC's founding a year earlier, but SFI
officials say they now operate independently from industry.
Still,
many environmentalists regard FSC as the best of the existing forest
certification groups. "It's a question of how do we improve the system,
not whether we can keep the system," says Brant Olson, director of the old-growth-forest
campaign at the Rainforest Action Network in San Francisco. "Because if you look at
the alternative systems run by industry, those are even weaker."
Yet
Mr. Salahudin, the SGS auditor, cautions that the FSC's moves to tighten its
rules could simply push big companies in the developing world to stop working
toward approval from the council. The proposed rules, he says, "will
surely drive away most of the big players in tropical forestry."
--Copyright wsj.com
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