FSC-Watch

An independent observer of the Forest Stewartship Council

WWF and certification of Danzer: all a foregone conclusion?Tags: Democratic Republic of Congo, Congo, Absence of national standards, WWF

In September 2006, WWF and the large German tropical logging company Danzer issued the joint press release below, announcing Danzer’s intention to obtain FSC certification. The announcement stated that Danzer’s operations in the Republic of Congo were ‘scheduled’ to be certified in 2008, whilst the larger concessions in Democratic Republic of Congo (DRC) would be certified in 2010.

This is curious for several reasons. Firstly, it assumes that Danzer’s compliance with the FSC’s Principles and Criteria is a foregone conclusion, and merely a matter of ‘scheduling’ the certification. FSC-Watch understands that the purpose of a performance-based certification system is to assess compliance at any given time, and it is therefore not possible to determine whether a certificate can be issued until that assessment has actually been undertaken.

Secondly, the certification of Danzer’s operations in DRC could prove particularly interesting. At present, all logging operations in DRC are being subject to an official ‘legal review’, which is backed by the World Bank and being undertaken by an ‘Independent Observer’, the World Resources Institute. This process is likely to be completed in mid-2007, and is likely to lead to the cancellation of many logging activities. Unless Danzer has privileged knowledge, it is possible, in theory, that the company’s operations may not be in the same form after the review as they are now – and therefore it is not possible to say whether they could be certified.

Even assuming that Danzer retains all of its 1.9 million hectares, certification could prove problematic, if for no other reason than that it could be extremely challenging to determine compliance with FSC Principle 1: “Forest management shall respect all applicable laws of the country in which they occur and international treaties and agreements”. Criterion 1.1 specifically requires that “Forest management shall respect all national and local laws and administrative requirements”.

The legal basis for forestry in DRC is presently in a state of total chaos. The country adopted a new framework Forest Code in August 2002 but, four years later, of the 35-40 ministerial or presidential decrees needed to properly implement the law, only one has actually been formally adopted. There seems to be little progress on developing all the other specific decrees, and thus there is almost a complete legal vacuum; simply put, logging companies don’t know what legal requirements they might be expected to comply with in several years time, because these have mostly not yet even begun to be defined.

One particularly problematic area is in the payment of forestry royalties and taxes. According to one estimate, there are presently no less than 155 fees and taxes payable in the forest sector in DRC. Many of these are ‘para-fiscal’ fees payable at the local level to various interests that may or may not actually be authorised by the central authorities in Kinshasa. At least part of Danzer’s operations are located in territories that were formerly held by the rebel group MLC, which controlled (and may still control) some of these para-fiscal systems. There is much evidence to suggest that many of FSC’s certifiers have little capacity or experience in assessing ‘legality’ of forestry operations in relatively stable and well-governed countries, let alone those where the challenges are as monumental as they are in DRC.

A third issue is that there are, as yet, no national FSC standards for forestry in either Congo-Brazzaville or DRC, and no immediate initiatives to develop such standards. As WWF should be well aware, the clear expressed intention of the members of the FSC has been that the issuing of certifictes in countries without national standards should cease.

FSC-Watch invites WWF to explain how resolution of these very complicated issues will feature in the 'schedule' to get Danzer certified?

DARLINGTON, Pa./FRANKFURT (GERMANY), Sept. 11, 2006 – Danzer Group, a leading global producer of hardwood veneer and lumber, and WWF will start a broad cooperation aimed at promoting sustainable forest management in Africa. As part of this cooperation, Danzer subsidiaries IFO in the Republic of Congo Brazzaville and SIFORCO in the Democratic Republic of Congo — which manage a combined total forest area of 7.9 million acres (3.2 million hectares) — are scheduled to be certified by FSC (Forest Stewardship Council) from 2008 onwards. This is the largest concession area in Africa currently being prepared for FSC certification.

Danzer Group has also announced it will join the WWF’s Global Forest and Trade Network (GFTN). Danzer is working closely with the conservation organization to draw up a detailed timetable for implementation, including detailed measures for its own managed forest concessions, procurement from third-party suppliers and all sales of African timber. Danzer Group, with its portfolio of subsidiary companies that produce and trade products made from African wood, would become the largest GFTN company of its kind. Globally Danzer Group has production facilities and trading companies in Europe, North and South America, Africa and Asia.

The IFO concession, comprising a total of 3.2 million acres (1.3 million hectares) is scheduled to achieve FSC certification during 2008. Gradual certification of the five SIFORCO concessions totaling nearly 4.7 million acres (1.9 million hectares) is set to begin in 2010. This schedule for Certification will build upon the company’s comprehensive Environmental and Safety Management System (ESMS) as well as Danzer Group’s strict “Procurement Rules African Timber”. The ESMS is based on the ISO 14001:2004 standard and covers the Danzer Group’s entire global African supply chain from forest management and sourcing of timber to the processing and sale of products.

Through its own ESMS, Danzer Group has already met a number of requirements for certification of its own sustainably managed forests. Both IFO and SIFORCO have been granted an independently verified legality certificate by the Swiss auditing company Société Générale de Surveillance (SGS). The measures and schedule for achieving FSC certification, which will be drawn up by Danzer Group and WWF in the coming months, are a requirement of GFTN membership.

“We look forward to working together within the framework of our membership of WWF’s GFTN and to jointly undertake long-term efforts to effectively promote prudent and responsible forestry in the Central African forests,” says Hans-Joachim Danzer, CEO of Danzer Group. “Illegal logging is a threat to serious producer companies and fair competition on world markets, and must be stopped.”

“Through our joint efforts, the WWF and Danzer Group can make a significant contribution to rectifying this situation. We also hope that our joint activities will lead to a better mutual understanding of ecological demands and private economic interests in conjunction with sustainable forest management. By adhering to the requirements set forth in a certificate, customers can rest assured that the wood that they buy from us comes from responsibly managed sources. At the same time they are making an important contribution to the economic development of one of the world’s poorest regions.”

Danzer Group and the WWF have been in discussions about working together for some time now. The WWF has been active in the Congo basin for many years and has worked to establish and oversee protected areas that would provide safe habitats for endangered species such as gorillas, forest elephants and other wildlife in the region.

“We believe that the cooperation between WWF and Danzer represents an important shift towards responsible forestry for some of the world’s most threatened forests in the Congo Basin” says Per Rosenberg, GFTN Director. “WWF looks forward to working with Danzer to realize their commitment.”

In addition to certification measures for its own concessions, the cooperation with WWF will also cover procurement from third-party suppliers and the trade in African timber by Danzer Group. FSC’s current Controlled Wood Standard, which establishes minimum requirements with respect to legality and responsible forestry, will apply. Danzer Group and the WWF will also establish measures aimed at preparing the company’s suppliers to be able to meet the requirements of the Controlled Wood Standard. These measures will be based on Danzer Group’s “Procurement Rules African Timber”, which have been part of the ESMS since 2005. The procurement rules will ensure progressively that African wood supplied by Danzer comes from legally verifiable sources and will help companies progressing towards sustainable management.

About the Danzer Group Danzer Group operates six veneer factories and five sawmills in Europe, North America and Africa, making it the world’s largest manufacturer of hardwood veneers. These facilities primarily process regional timber to produce high-quality veneers and lumber. A total of 31 sales outlets worldwide take care of customer needs. The Danzer Group employs a workforce of some 4,700 staff and posted a turnover of approximately 418 million euros in 2005. www.danzergroup.com

About WWF WWF is one of the largest independent nature conservation organizations in the world. WWF operates in more than 100 countries and is supported by nearly five million donors. WWF’s mission is to conserve the world's biological diversity, ensure the use of renewable natural resources, and promote the reduction of pollution and wasteful consumption. ww.panda.org/gftn

Comments

To pick on the tax system and legal review is a bit cheap.

WWF's pragmatism also brings about meaningful changes, as it had by pursuing FSC certification by challenging forestry laws that prescribed clearcutting in Latvia by working with a company that practised illegal forestry by introducing selective logging in the country.

We all know that World Bank led sector reviews can be both good, and disastrous. While their findings may be significant, such processes cannot determine whether or not FSC certification goes ahead: FSC is about certifying the management practise by a forest manager at a given time, it is not about certifying third party studies. The World Bank today, another study the other day.. I pity certifiers for having to take all completed research on board, but wonder if that is really always done. Still, one cannot reasonably ask them to take uncompleted research on board.

As for issuing press releases to express commitment to FSC certification: I support that within reason. I don't think FSC has guidelines for off product claims on commitments to achieving the benchmark. Specification of time (< x years) and place (xxx ha) would be a reasonable demand as this would be verifiable. Such press releases may lead buyers and investors to prefer the company, which may translate into a financial award for the commitment, which would then motivate the company to go ahead.. Arrrr, yes, lots of assumptions here! But it should be ok, but only if publicized targets are not vague (we will certify under a national FSC standard or intepreted standard and we realise that action needs to be taken in this and that field) and within a reasonable scope and term (we aim to be certifiable for an area covering no less than 50.000 hectares in 1-2-3 years).

But what if the commitment is not realised for no reasonable cause, then what? Does it have to be FSC Watch to inform all the eager buyers and bankers? Should a rule be introduced that FSC will publicly list companies that have previously publicly announced to go for FSC as non-compliant from the moment when they have not achieved their set and publicized targets?

By the way, I wonder if FSC could challenge FSC Watch for using its name and a very similar logo? The resemblance of logos is awefully close. As a result, confusion may arise among those less well informed wood consuming web surfers as to meaning of the logo: good, or bad forestry? That may lead them to make different buyers' choices tomorrow in the DIY store. And that... could be the basis for litigation which I'm not entirely sure that FSC Watch could keep up.... Don't tell me that that's what FSC Watch is after... ??

Eric

I think most people would agree that there is no reason why companies (or WWFF) should not announce that they are commiting to achieving certification. But the point is that the circumstance in Democratic Republic of Congo are very particularly, very unstable, and very unpredictable.

I think it is far from 'cheap' point that, at the moment, something like 95% of the necessary forestry legislation in DRC is absent. Some of it has been drafted, most of it hasn't. When the World Bank pushed through DRC's new Forest Code in early 2002, they anticipated that all of the implementation legislation would be complete by the end of that year, but more than four years later only ONE imlementation decree out of about the necessary 40 or so have actually been formally adopted. At the current rate, it could be years before the full suite of legislation is adopted - so it is quite difficult to see how a company operating in DRC now could foresee what the precise legal requirements will be - and therefore whether the company could comply with FSC Principle 1.

(As an example of the legal chaos currently prevalent in DRC's forests, under a strict reading of a Presidential Decree signed in October 2005, all logging 'concessions' - probably including those of Danzer - ceased to be legal on October 23rd of this year.)

Concerning the use of the name 'FSC' in FSC-Watch, as far as I am aware FSC does not have any proprierary rights over letters of the alphabet! Actually, if you type FSC into Google you can find hundreds of organisations that have the acronym 'FSC'.

Dear Simon Counsell,

With regard to your statements on the collaboration between the WWF and the Danzer Group in the article entitled "WWF and the certification of Danzer: all a foregone conclusion?", I would like to comment as follows:

1. You believe that there is no possibility of defining the timing of FSC certification in advance – that an exact date cannot be established before verification of compliance has been successfully completed. It goes without saying that any decision concerning cooperation between industry and NGOs requires a concrete objective. This includes a timetable within which the agreed stages can be worked through successively. If this would not be the case, the specific expertise of the parties involved could not be coordinated and a shared commitment to a joint course of action could not be achieved. This is precisely what WWF and Danzer Group have done and made public. Accordingly both parties are highly motivated to succeed and will do all that is necessary to achieve the common goal. NGOs, in particular, call for targets which are definitely measurable – as proof of the seriousness of a statement. It is characteristic for any plan of action addressing goals to be reached in the mid term future that on the go planned actions have to be reassessed and possibly readjusted in order to ensure that based on the changed reality they still meet the foreseen target.

2. You are of the opinion that WWF and Danzer Group could not make any statements concerning the FSC certification of individual SIFORCO concessions because all the concessionaries are currently subject to legal review, which has still to be completed. It is correct that the result of this legal review is of decisive importance for the legality of the titles and consequently for the management of the concessions. This applies to all forestry companies in the DRC which are determined to continue their operations in accordance with the relevant laws. In spite of the generally difficult underlying legal framework, Danzer Group has rendered all the necessary services in connection with this process and, like WWF, is confident that verification of legality will have a positive outcome for the company. Although this process has been held up in general for a variety of reasons, Danzer Group and WWF will continue to undertake such measures as are necessary within the framework of their announced cooperation. Waiting for the end of the legal review and simply doing nothing would mean delaying certification. This we would not like to see happen.

3. You think that every FSC certification in the DRC runs up against insoluble problems with regard to the verification of legality compliance because the corresponding decrees in the forestry legislation do not exist. It is a fact that of the 42 implementation decrees in the Code Forestier, 17 have still to be drawn up, but this is not an obstacle to certification of the first two SIFORCO concessions planned for 2010. Even if there were still shortcomings in the DRC forestry legislation between now and then, this would not represent an impediment to FSC certification. The certifying body will then determine itself the extent to which the company fulfills the terms and conditions for legal compliance. As you point out yourself, "the purpose of a performance-based certification system is to assess compliance at any given time".

4. You wonder how in the absence of national FSC standards there a FSC certification could be achieved. To my knowledge neither a decision of the General Assembly of FSC nor a motion to cease the issuance of certificates in countries which do not have national standards exists. On the other hand would it make sense as in consequence no further certificates could be issued in the whole of the Congo Basin.

Sincerely yours,

Markus Radday
Senior Officer Tropical Forests
WWF Germany
E-mail: radday@wwf.de

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