In DepthThe QuestionEco-certification: Who watches the watchers?


Posted on Tuesday, 16 November 2010 15:29

Eco-certification: Who watches the watchers?

By Khadija Sharife in Durban

As the global pressure to stop illegal logging intensifies, forestry companies have scrambled to acquire environmental certification. But as our Southern Africa correspondent Khadija Sharife reports, the credentials of those put in charge of monitoring the process are often murky.

More than half of the world’s tropical forests have been devoured through market-driven consumption. But preventing global deforestation is not as easy as it sounds: the global supply chain from origin to disposal is rarely accounted for by self-regulated multinationals, from logging corporations to retailers. Yet the tide appears to be turning. Pressurised by consumer demand, companies such as Lidl, a leading German food retailer, have begun using ‘green’ certified wood fibre to manufacture products.

The movement that appears to have catalysed the paradigm shift, specifically targeting the vast ecological footprints of ‘first world’ consumers, is the Forest Stewardship Council (FSC), an international non-profit organisation founded in 1993. Trained to interpret reality not as humans or even citizens but consumers, global populations have responded to the call through the only political tool accessible: their wallets. The brand, adorning myriad products from toilet paper to books, is now worth US$20bn - a massive increase from the US$5bn estimated just three years ago.

FSC signifies a voluntary market-driven vehicle designed to introduce and implement a new value system structured around sustainability. There is even a day to commemorate the event - FSC Friday on 24 September. The system, present in over 50 countries, operates through services ranging from standards to trademarks and accreditation.

Purchasing products branded ‘green’, we’re informed, constitutes a conscience choice to be ‘part of the solution’. This is because, according to the FSC, the brand is the only system enabling consumers to invest in products protecting the rights of indigenous peoples, prohibiting conversion of natural forests or other habitat around the world, the use of highly hazardous pesticides, and the cultivation of genetically modified trees.

Given that as much as 80% of timber is illegally harvested in many developing nations, FSC’s unique forest certification standard is not only backed by major ‘green’ muscle such as Greenpeace International and the World Wildlife Fund (WWF) but it is often perceived as the only acceptable system by organisations such as the American Green Building Council.

As far off as Romania and Bulgaria, timber-producing countries are acutely aware that first-world consumers are increasingly active. To date, 120,052,350ha have been certified (4.3% of global forested land), an increase of 11% since October 2009. Romania, for instance, now seeks to certify 40% of forested land by 2011, with Bulgaria hitting slightly lower at 30%.

Big money in illegal logging

Ironically, until 1997, when the FSC relaxed its criteria, multinationals weren’t biting. In 1993, just three approvals were issued. Relaxation allowed for multinationals to utilise the ‘best standard’ logo, provided that 50% of wood used came from acceptable sources. The remainder would make the cut on the basis of legal ownership of concessions.

In former Francophone territories, French corporations exploited more than five times the legal concessions. According to one senior official at the Cameroonian Centre for Environment and Development based in Yaoundé, ‘the police shy away from investigating the matter … because those who are profiting illegally from logging allegedly include senior police officials.’ As one French national involved in the logging industry revealed, ‘We’re asked for bribes amounting to millions of CFA francs, and we often pay these out.’

France remained a key importer of illegally logged timber from Liberia during the reign of former president and warlord Charles Taylor. Taylor himself would admit that timber, logged by Dutch arms dealer Guys Kouvenhoven through his Oriental Timber Company (OTC) generated ‘more than half the gross national product’. In 2001, for instance, OTC (accounting for 41 of 60 timber-loaded vessels departing from Liberia), exported timber to foreign buyers including France and China, two primary objectors to timber sanctions. Since 1996 in fact, half of all timber logged from Central Africa has been exported to Asia, namely to China and Taiwan, making inroads into traditional European strongholds through ‘political non-interference’.

But who watches the watchers?

Dubious legality is further compounded by the opacity through which corporations are certified, chiefly via auditing institutions such as SGS, which is accredited worldwide and ‘deputised’ by the FSC as a watchdog. The company states it is “the world’s leading and most recognised forest- certification program. Since 1994, wood-processing enterprises and wood-product producers have achieved the SGS Qualifor certification in 60 countries around the world. "

SGS, a Geneva-based auditing firm specialising in inspection and certification, supplies the forestry industry with both training as well as a chain-of-custody certification system including, ‘audit of the transport and transformation of wood-based products from the forests, through processing, to final product at consumer outlets’.

The choice of Geneva, Switzerland as SGS’s corporate residence is far from accidental. Similar to the multinationals that require external auditing for accountability purposes, SGS intentionally selected the only legal jurisdiction in the world characterised by complete opacity. Despite repeated requests, SGS has so far declined to comment to The Africa Report.

SGS was already a 90-year-old business by the time the IMF and World Bank came knocking in the early 1980s via the pre-shipment inspection (PSI) industry. By the early 1990s, one quarter of SGS's revenues, reported at US$1.2bn, was generated from PSI and the company maintained a presence in 140 countries, with just 40,000 staff. SGS would later be retained by the Bank, this time in an official capacity, as the Bank’s ‘global auditor’ to conduct spot audits in Kenya and other countries to sniff out corruption.

By 1997, SGS admitted to paying ‘substantial commission’ - conservatively estimated at US$15m - to Pakistan's President Benazir Bhutto and her husband. Pakistani officials believe that cumulatively, the Bhuttos made off with US$1.5bn in total from a variety of sources. SGS payments were remitted in true SGS-style through shell entities incorporated in secret jurisdictions such as the British Virgin Islands. Two years later, SGS was banned from operating in Ethiopia for similar reasons. SGS was interlocked with, and even represented by, systemically powerful interests and persons, such as James Woolsey, a former CIA Director who listed SGS as a client.

Following the boom and bust of SGS’s pre-shipment industry, and despite receiving an average of 12% revenue from countries such as Zimbabwe, Madagascar and Indonesia, SGS shifted to certification targeting private industries rather than countries. More crucially, it also began focusing on eco-certification.

Apartheid-era plantation legacy

Despite mass deforestation through illegal logging and commercial and monoculture development taking place across the continent, just 2.9% of forest cover in Africa is certified by the FSC. Countries experiencing mass deforestation such as Cameroon and the Republic of Congo, chiefly through China and France, have certified just 2.7% and 3.3% of land. This is, of course, save for South Africa, which at 17.8% (1,567,811 ha) averages one-fifth of the continent’s overall FSC certification.

The two giants dominating the industry in South Africa are Mondi and SAPPI. Mondi, formed by Anglo-American in 1967, manages over 450,000 ha with 35,000 employees in more than 30 countries. SAPPI, a global paper and pulp company incorporated in 1936, holds 465,000 ha in South Africa, with a further 75,000 ha in Swaziland. By 2007, the company manufactured five million tonnes of paper and three million tons of pulp. While percentages of timber products from total exports have increased from 3.4% in 1992 to 3.8% in 2002, timber’s contribution to GDP has decreased in proportion from 2.2% in 1992 to 1.6% in 2002.

Within South Africa 80% of FSC-certified forests in 2005 constituted industrial timber plantations (ITPs) composing 1,34m ha and 1,8m ha of monocultures initially developed by the apartheid regime as a means of independently sourcing wood products.

The initiative began with state-led plantations between 1920 and 1960. The development of ITPs under Mondi and SAPPI in the 1980s was preceded by the lucrative undertaking of private companies in the 1960s. The government established a tax incentive system, such as the general export-incentive scheme, later voided by the ANC liberation government in 1994.

Expansion accounted for 45,000 ha annually during the 1990s, five times that of indigenous forests. By 1996, the Natal Agricultural Union reported an 82% reduction in stream flow over a 20 year period in areas where grasslands were ‘developed’ by commercial plantations.

The ANC government further emphasised the importance of plantations to growth, gender income and employment. “Forestry makes a significant contribution to the economy,” said Lindiwe Hendricks, then minister of water affairs and forestry. “In 2006 this contribution amounted to approximately R14bn and 170,000 people were employed in the sector, which includes about 30,000 small scale growers most of whom are women. With forestry being a rural activity, this sector has enormous potential to contribute to the economy and to job creation.”

Water-intensive plantations, covering 1.2% of land, far outweigh natural forest cover (0.3%). Mpumulanga holds 42% of plantations, followed by Kwa-Zulu Natal, which accounts for 38%, and the Eastern Cape, which accounts for 11%. Plantations correspond to the poorest rural communities, aided by unchecked depletion of water sources, displacement, and the ‘capture’ of fertile land for monocultures.

Beyond ITPs, the reality of corporate ‘self-regulation’ - and the externalised social and ecological costs, often concealed under the guise of corporate social responsibility, is not limited to communities living in close proximity to the plantations.


In 2010, Mondi was named one of the top three polluters in Durban, thanks to the company's paper mill. SAPPI came under fire for polluting a critical conduit between sea and land, the Thukela River, with highly toxic chemicals. Despite serious complaints, little has been done. “I would have expected some clarity from the department of water affairs by now on what actions have been taken, and what recourse there is,” said Rudy van der Elst of the Durban-based Oceanographic Research Institute.

“The department has a responsibility to clarify the position for the public - but the reports of dead fish, the strong odour in the water and treatment with hydrogen peroxide are indicative of a serious problem,” he was quoted as saying by The Mercury newspaper.

But such realities are not accounted for by FSC's green-washed branding. According to the timber industry, SA now has a far higher percentage (80%) of its plantation area certified than most countries. But this is misleading according to Timberwatch, a South African civil-society organisation. If the areas under illegal plantations and unmanaged feral trees were taken into account, it would be under 40%.

The consequences, claims the organisation’s report Life As Commerce, have been to grant respectability to historical and current destructive aspects of the timber industry, including land dispossession, pollution of rivers, streams and wetlands, and contamination and compaction of soil within plantation areas. The report cites the example of Hans Merensky Holdings (HMH) in two provinces - KwaZulu-Natal (Singisi Forest Products) and Limpopo (Northern Timbers). Both are certified by SGS Qualifor (2003 and 2000). Interestingly, though HMH’s activities were packaged as a shift toward the private sector, the authors go on to reveal that 42.6% of shares were held at the time by the Industrial Development Corporation (IDC), a “wholly-owned government entity within the national department of trade and industry (DTI)”. The decision to sell off the plantation holdings through government asset restructuring was allegedly prompted by the need for government to remove a conflict of interest in its role as an impartial regulator and industry player. But assets were merely shifted from one state enterprise, the South African Forestry Company Ltd, to another, the IDC.

South Africa holds one of the world’s largest timber estates. As such, the need for a regulator without vested interests is fundamental to upholding human and environmental rights. The poverty innate in areas converted to alien plantations is characterised by, amongst other aspects, massive outsourcing and sub-contracting, rendering SAPPI a management shell, with significant reductions in direct employment. Nonetheless, FSC certification - and auditors like SGS - are blind to these realities. Market-driven eco-certification, says Cori Ham, lecturer in forest management at Stellenbosch University, often has the opposite effect: “As a net exporter of forestry products, South Africa’s procurement of new markets and securing of existing markets were critical. The forestry industry saw certification as a marketing tool and accepted it fairly easily. What makes this certification effort more remarkable was that it took place without a national FSC standard and with very little government intervention,” he says.

FSC certification has proved to be a powerful mobilising mechanism for environmental justice. The real question is whether the brand delivers a solution for the environment, communities and consumers, or a green-washed veneer enabling corporates and governments to engage in business as usual.

This article was first published on Pambazuka News.

Last Updated on Tuesday, 16 November 2010 17:15

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