World Growth Forestry and Poverty Project Newsletter – Issue 23

The Significance of Indonesia’s Moratorium

After many months of delay, Indonesia’s President Yudhyono has signed a law declaring a moratorium on land clearance in Indonesian forests.  Green groups have already attacked the decree, stating that it does not go far enough.

Brazil Loosens Forest Protections
Brazil’s Lower House recently passed a new forest code that has drawn the ire of environmentalists. Brazil’s farmers, however, have expressed support for the decision.

Protectionist Interests Ride on ‘Illegal Logging’ Bandwagon
Environmental campaigners and Western businesses have united to support an Australian Government initiative to restrict the imports of ‘illegal’ timber.  But the alliance brings together the worst elements of trade protectionism and in the name of environmental stewardship.

Greenpeace Attacks FSC in the Congo
Greenpeace has called for an immediate moratorium on the issuing of FSC certificates in the Congo Basin in an attempt to tighten FSC’s standards in Africa’s tropical forests.  The question is – does the action have FSC’s tacit support?

SFI Hits Back at U.S. Smear Campaign
The Sustainable Forestry Initiative (SFI) has hit back at campaign group ForestEthics’ smear campaign against the certification body and is calling the environmentalists’ bluff.

The Significance of Indonesia’s Moratorium
After many months of delay, Indonesia’s President Yudhyono has signed a law declaring a moratorium on land clearance in Indonesian forests.  Green groups have already attacked the decree, stating that it does not go far enough.

The drafting process for the moratorium was subject to considerable government lobbying by Green groups.  Green groups wanted the moratorium to cover primary and secondary forests in Indonesia for an open-ended period.

The final result – negotiated between the President’s office, the forestry ministry and the economics ministry – covers primary forests and peatland forests.

The prohibition covers only new proposals for permits in these areas for forestry and palm oil projects. Existing projects will remain, and proposals for rice and sugar plantations as well as oil and gas projects are also exempted.

Despite Green protestations, the area covered by the moratorium is significant. Primary forest covers more than 45 million ha in Indonesia; this includes just under half of all of Indonesia’s forest land and just under one-quarter of its total land mass.  This is an area roughly equivalent to Sweden.

Plantation forests, in contrast, make up one-tenth of Indonesia’s forests.

The area covered also varies significantly between islands.  In Kalimantan, for example, primary forests make up just under one-third of all forest land and cover around 20 per cent of Indonesian territory on Borneo – an area larger than Austria.

Groups such as Greenpeace have already heavily criticized the President’s office, and claimed that the final version of the decree was heavily influenced by lobbying.  Similarly, many climate commentators have held up the decree as a significant part of a solution to reduce carbon emissions.

However, very few people – particularly outside of Indonesia – are seeing the decree within the context of Indonesian land reform.

Indonesian forests that are protected by law – as national parks or otherwise – are subjected to severe deforestation and degradation.  For example, one national park in Riau in Sumatra has a small community living within it that has cleared land for housing and is establishing coffee plantations.  Local level governments have the ability in some cases to parcel out land for development, even if this is in forests that are listed as ‘protected’ by provincial or federal governments.

This is partly due to a lack of harmonization of spatial planning at the national and provincial levels, and because of weak land tenure in Indonesia.  There is significant legislative and regulatory overlap between federal, provincial and local governments.  Further, there are many ministerial decrees that contradict each other.

What the Presidential decree actually does is coordinate the three ministries and six regulatory bodies that are able to make land use decisions, as well as provincial and local-level governments.

In other words, the key achievement of the moratorium is not even particularly relevant to the environment. Its relevance is to clarifying land tenure in Indonesia, which has been a key factor not only in Indonesia’s deforestation rates, but also in its economic development.

Green critics of the moratorium will not see this and instead look only for the environmental targets. Those who understand the bigger picture about Indonesia’s future will appreciate its significance.

Brazil Loosens Forest Protections
Brazil’s Lower House recently passed a new forest code that has drawn the ire of environmentalists. Brazil’s farmers, however, have expressed support for the decision.

The legislation gives amnesty to farmers that illegally cleared land prior to 2008. Those who proposed and have backed the bill – including Brazil’s communist party – have stated that it will support farmers and remote rural communities; agricultural production among these groups will expand and prosperity will be more evenly distributed.

Not so, say (generally Western) environmental groups, who have expressed dismay at the democratic approval of the bill.  Greenpeace has stated that if the new legislation is passed by the Upper House and President’s office (as required by law) that Brazilian exports will face increasing opposition in wealthy markets, and that a groundswell of opposition to imports will emerge – thus blunting any economic gains.

Yet Greenpeace is most likely happy to gloss over the fact that Brazil’s key markets for beef and soy – the main culprits according to the group – are domestic and in other emerging nations such as China. The group’s smear campaign against the Brazilian beef industry a little over two years ago did precisely that, acutely aware that environmental arguments against economic development hold little sway in emerging markets.

Protectionist Interests Ride on ‘Illegal Logging’ Bandwagon
Environmental campaigners and Western businesses have united to support an Australian Government initiative to restrict the imports of ‘illegal’ timber.  But the alliance brings together the worst elements of trade protectionism and in the name of environmental stewardship.

In Australia a number of high-profile campaigners such as Greenpeace, the Wilderness Society and WWF have united under a ‘common platform’ with large industry players such as furniture producer, IKEA and paper manufacturers Kimberly-Clark Australia (KCA) and SCA.

The platform supports a recently drafted Australian Government bill aimed to combat trade in illegal timber. It is part of a wider public campaign calling for immediate action to stamp out illicit imports on the part of both domestic industry and environmental groups.

The alliance comes despite a history of animosity between the groups.  Why?

Restrictions on the import of timber, pulp and paper products, illegal or otherwise, could potentially serve the interests of Australian producers.  Australian pulp and paper producers have been struggling to compete against imported products.  KCA recently closed its South Australian paper operations, despite Australia being a net importer of paper products.

KCA and SCA filed anti-dumping claims in an attempt to restrict overseas competitors gaining market share.  However, these claims were dismissed by Australian Customs, noting that it was in fact newer, more efficient Australian producers relying on imported pulp that were gaining market share from the two companies.

The industry, however, should be wary. The legislation, as it stands, puts an equal burden on both Australian and overseas harvesters of timber. Both Australia’s peak bodies for forestry and small forest farmers made submissions to the Australian Government expressing concern over the regulatory burden this will place on domestic producers.

Despite the apparent support of both industry and Green groups, there is little reason to believe that the bill will reduce global rates of illegal logging.  Australian imports probably account for as little 0.34% of global products incorporating illegally logged timber.  Any effort by Australia will have minimal effects on global rates of illegal logging.

Furthermore, recent World Growth research demonstrates that global rates of illegal logging are much less significant than previously estimated.  Efforts to establish trade bans based on illegal logging rates therefore do little to reduce illegal logging.  Their actual effect is to hold back emerging economies that depend on their forestry sector.

Greenpeace Attacks FSC in the Congo
Greenpeace has called for an immediate moratorium on the issuing of FSC certificates in the Congo Basin in an attempt to tighten FSC’s standards in Africa’s tropical forests.  The question is – does the action have FSC’s tacit support?

Greenpeace recently called for an immediate ban on new certificates for ‘industrial scale’ logging in Congo Basin.  The organization followed this with an updated version of its 2008 report, “Holding the Line with FSC” in which Greenpeace demand the FSC increase their standards or else risk losing NGO support.

The timing of the Greenpeace action is highly strategic.  FSC has just completed a two-year consultation for the development of its Congo Basin Sub-Regional Standard.  The consultation was managed by an external consultant and produced a number of outputs.  A vote on the Standard is to take place at the FSC General Assembly to be held in Malaysia at the end of June.

Greenpeace has stated quite publicly that the standard must be tightened, otherwise FSC will ‘lose NGO support’ in the Congo Basin.

Greenpeace was a founding member of the FSC and has been a key advocate of the Council since its inception two decades ago.  The influential ENGO acknowledges that it has invested significant resources and efforts into the organisation throughout this time.  Why then would Greenpeace attack a long standing partner-organisation operating with their public support?

The answer lies in the complex strategy of environmental campaigners such as Greenpeace.  FSC’s apparent aim is to promote commercial sustainable forestry.  Given Greenpeace’s formal opposition to any commercial forestry (or any commercial agriculture – it is opposed to monoculture) the rationale for its membership of FSC has always been illogical and remains unexplained.  Answers can only be deduced from its actions.

These organisations attempt to ‘capture’ markets by pressuring industry into adopting specific certification systems such as FSC.  Once in these systems, environmentalists continue to ramp up the environmental standards, beyond the scope of reasonable forest management practices and objectives. This is the Greenpeace play.

One would expect an organisation confident in its own systems to rebut such claims, or at least distance itself from such criticism.  But FSC has taken the opposite approach to Greenpeace’s aggression.  In a bizarre turn of events, FSC invited Greenpeace International Executive Director, Kumi Naidoo, as the plenary speaker at the FSC General Assembly to be held this month in Malaysia.

In doing so, FSC has given Greenpeace the opportunity to influence the organisation’s supreme decision making forum.  From this one, might draw the conclusion that Greenpeace’s campaign maintains the implicit support of the FSC.

Indeed, Danzer, a German forestry company operating in the Congo Basin has found itself at the center of such a play previously.  Danzer found itself subject to stream of Greenpeace criticisms of its forest practices that Danzer publicly demonstrated as untrue. In what seemed like an attempt to placate the campaigners, it invested time and resources into working with WWF and gaining FSC certification. Despite this, Greenpeace continued its attacks, then releases a highly questionable report about Danzer’s involvement in corruption.

The Greenpeace play in the Congo should underline the risk a system such as FSC poses to businesses.

SFI Hits Back at U.S. Smear Campaign

The Sustainable Forestry Initiative (SFI) has hit back at campaign group ForestEthics’ smear campaign against the certification body and is calling the environmentalists’ bluff.

SFI, the largest forest certification scheme in the United States has found its members are coming under increasing attack from ForestEthics, a radical campaign group based in Canada.

ForestEthics has made a call for companies using SFI certification to either switch to FSC certification completely, or not label their SFI-certified timber.  Those that don’t comply with the ForestEthics demands are threatened with protests, further campaigning and scorecards designed to damage company reputations.

SFI’s CEO Kathy Abusow has taken ForestEthics on directly, pointing out that a great deal of SFI-certified timber ends up in FSC-certified products.  It is also common knowledge among forest professionals that many firms have both FSC and Programme for the Endorsement of Forest Certification (PEFC)-endorsed certification.

Abusow asked ForestEthics directly: “Why it acceptable to ForestEthics that companies still source from SFI forests, provided they don’t label it? … Could it be that ForestEthics only cares about appearances?”

What Absuow doesn’t point out is that unlike FSC, the SFI certification process meets world’s best practice in standard setting and certification as required by PEFC.  This means that the standard setting body and the accreditation body for certifiers are completely separate.

Under the FSC system, FSC acts as both standard setter and accreditor.  Why is this important?  It means that the standard is not truly independent from those who do the certifying.  Not to have this separation is not considered world’s best practice.  It also means that FSC has the potential to influence its certifiers.

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