Market-based instrument curbs deforestation<\/p>\n
Vincent Lingga, Senior Editor, The Jakarta Post, Jakarta<\/p>\n
The devastating flash floods at Bahorok, North Sumatra, early
\nthis month that killed more than 150 people, are another strong
\nreminder of how the traditional approach to protecting forests
\nthrough a regulatory system has failed miserably due to a corrupt
\nsystem of governance and inadequate institutional capacity.<\/p>\n
Indonesia has enacted laws on environmental protection and has
\nissued myriad regulations and rules to protect forests, and
\nerected nontariff barriers to prevent trading in illegally felled
\ntimber.<\/p>\n
Yet deforestation continues. Interisland trade and export of
\nillegally felled timber have been going on. The Central Bureau of
\nStatistics has officially recorded exports of logs, even though
\nthis commodity is banned from export.<\/p>\n
As only incremental improvement can, at best, be made in the
\nsystem of governance and institutional capacity, it seems more
\nurgent now to expand forest product certification as a market-
\nbased instrument to supplement the regulatory system for curbing
\nillegal logging.<\/p>\n
The concept of forest certification is designed to use market
\nforces to control illegal logging through demand-side and supply-
\nside approaches, mobilizing consumers and traders to shun forest
\nproducts that are not certified according to internationally
\nrecognized standards of sustainable forest management.<\/p>\n
This virtual boycott forces forest-based companies (producers)
\nto have their operations and products certified by accredited,
\nindependent forest-certifying bodies.<\/p>\n
The demand for forest product certification has escalated
\nsince the early 1990s as a result of the campaign for green
\nproducts by consumers, traders and conservation groups in North
\nAmerica and West Europe, who have been concerned about high rates
\nof deforestation, especially in developing countries.<\/p>\n
The green consumer movement became more organized and better
\ncoordinated after the establishment in 1993 of an international,
\nindependent and nonprofit organization called the Forest
\nStewardship Council (FSC), with its headquarters in Bonn.<\/p>\n
Grouping representatives from environmental and conservation
\ngroups, the timber industry, forestry professions, forest
\ncertification organizations and forestry communities, FSC has
\ndeveloped forest certification standards, accredits independent
\ncertifiers and helps develop national and regional forest
\nmanagement standards.<\/p>\n
FSC gets full support from the Global Forest and Trade Network
\n(GFTN), a group of organizations around the world also committed
\nto promoting trade in certified forest products as a means of
\nimproving forest management practices.<\/p>\n
Latest data shows that GFTN now has more than 18 regional and
\nnational organizations, called forest and trade networks, under
\nthe coordination of the Worldwide Fund for Nature (WWF), with
\naround 800 members consisting of large timber companies and
\nretailers (producers and buyers) spread out in more than 30
\ncountries.<\/p>\n
Therefore, even though the government does not require forest
\ncertification, more than two dozen Indonesian companies, mostly
\nfurniture, door, panel and frame producers in Java, have
\nvoluntarily sought forest certification for their products from
\naccredited certifiers to gain access to the American and European
\nmarkets.<\/p>\n
The term \"voluntary\" here is not entirely correct because the
\ncompanies have effectively been forced to obtain green
\ncertificates; not through regulation, but by the market.<\/p>\n
Importers\/traders in the two regions simply don't want to
\ntouch uncertified forest products.<\/p>\n
Likewise, two of Indonesia's largest pulp and paper producers,
\nAsia Pulp and Paper Co. Ltd. (APP), with annual capacities of 2.3
\nmillion metric tons of pulp and 3.6 million tons of paper, and PT
\nRiau Andalan Pulp and Paper (RAPP), with two million tons of pulp
\nand 350,000 tons of paper, are now geared up to comply with the
\ncriteria and standards required for certification.<\/p>\n
The companies will not explicitly acknowledge it, but pressure
\nfrom their buyers overseas has been responsible partly for their
\ncommitment to having their operations and products certified
\naccording to the principles of sustainable forest management.<\/p>\n
APP signed in August an agreement with the WWF for preparing
\nprograms on the sustainability of its forest concessions, the
\nlegality of its pulp materials and the resolution of land
\nconflicts with communities.<\/p>\n
As RAPP environmental general manager Canesio P. Munoz
\nobserves, \"even though we have always seen to it that all pulp
\ninputs entering our mills are legal, we will remain under
\nsuspicion of using illegal wood unless we have our operations and
\nproducts independently certified.\"<\/p>\n
RAPP has obtained an ISO 14001 certificate for environmental
\nmanagement system standards from SGS Yarsley International
\nCertification Services and is geared up to gain forest
\ncertification next year or 2005.<\/p>\n
Without sustainable forest management, these two companies,
\nwhich require around 20 million cubic meters of wood fiber inputs
\na year, could indeed be a major threat to Indonesian forests.<\/p>\n
They have often been accused by non-governmental organizations
\n(NGOs) of using illegally cut wood, though none of these charges
\nhas ever been proven in court.<\/p>\n
The problem is that more than 95 percent of forest-based
\ncompanies in Indonesia, especially pulp and paper and plywood
\nproducers, have yet to realize the vital role of certification in
\nmaintaining the principles of good forest management.<\/p>\n
Traders and general consumers in Indonesia, like those in
\nother Asia-Pacific, African and Latin American countries, have
\nyet to be converted into full supporters of the green product
\ncampaign. This task is quite daunting, not only because of the
\nneed to change attitudes but also because forest certification is
\ncostly and initially time consuming.<\/p>\n
Forest certification is based not only on the principles of
\nsustainable management of forests and wildlife reserves but also
\non the maintenance of the legal and customary rights of local
\ncommunities and indigenous peoples and long-term social and
\neconomic welfare of forest workers.<\/p>\n
Indonesia began to develop standards and criteria for forest-
\nproduct certification only in 1999 after the establishment of the
\nIndonesian Ecolabelling Institute (LEI), an independent
\norganization, with funding support from the WWF, the U.S.
\ngovernment and many NGOs in Europe and North America.<\/p>\n
LEI is now developing, in cooperation with FSC, standards and
\ncriteria for certification systems for the management of
\nsustainable natural forest and industrial timber plantations,
\ncommunity-based forests and a chain of custody (a system of
\ntracking the source of wood) as well as an accreditation scheme
\nfor certifiers.<\/p>\n
According to LEI executive Daru Ascarya, LEI and FSC have thus
\nfar accredited four forest-certifying bodies, namely PT SGS ICS
\nIndonesia, PT TUV International Indonesia, PT Sucofindo and PT
\nMutuagung Lestari.<\/p>\n
Indonesia, like most other developing countries, has still a
\nlong way to go before the bulk of its forest-based companies are
\ncapable of complying with the principles of sustainable
\nmanagement, but expanding forest certification across the timber
\nindustry could speed up the process.<\/p>\n
The Nature Conservancy and WWF, in cooperation with many other
\nNGOs and foreign governments, are sponsoring projects in East
\nKalimantan, Java and Riau to develop a cost-effective method of
\ncertifying the legal origins of wood right through the supply
\nchain, from forest to customers.<\/p>\n
The projects are being implemented by Geneva-based SGS, the
\nworld's largest inspection, testing and verification
\norganization, and URS Forestry environmental services company.<\/p>\n
But other major donors affiliated with the Consultative Group
\non Indonesia (CGI), who have often expressed grave concern about
\nextensive damage to the world's second-largest tropical forests
\nin Indonesia, should contribute more to building up a higher
\nnational capacity for forest certification.<\/p>\n
The market for tropical forest products could be damaged if
\nthe global demand for certified products generated by the green-
\nconsumer campaign far outpaced the capacity of forest
\ncertification in Indonesia.<\/p>\n
However, the development of the certification system will not
\nrun smoothly unless the Indonesian government itself streamlines
\nthe system of its regulatory procedures in land-use planning,
\nland rights, forest harvesting permits and wood transport
\ndocumentation, which have often left forest-based companies in a
\ncatch-22 situation.<\/p>\n
Forest certification, as a market-based instrument, will also
\nbe less effective in saving forests if banks and financial and
\nsecurities analysts do not use sustainable forest management as
\nan investment-screening tool.<\/p>",
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"sponsor": "Okusi Associates",
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