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Demystifying environmental certification of forests – and how it affects the small grower

Almost all the large/corporate forest owners in New Zealand are FSC certified. Many medium-sized owners are following suit. Globally, forest certification is growing. So what is this environmental certification all about, and what options are available to smaller growers interested in forest certification?

Market Drivers

Certification is about forest management quality assurance and in particular, balanced management that considers environmental, social, cultural and economic performance as a unit – the "triple (or quadruple) bottom line" concept.

Originally, FSC was conceived on the basis that consumer market signals would drive preferences and subsequently log price returns, benefitting forest owners that could prove good management. That particular objective has proved elusive in New Zealand. Instead, in this country, certification is predominantly recognised as a means to protect market access in export dominated markets where increasing volumes of available certified logs and lumber provide an easy point of difference between otherwise similar and competitively priced commodities.

Insofar as the market signals get to the forest grower as a market preference or specification, they have tended to be most driven by the high value solid wood segments where end product consumers actually do see and sometimes make choices based on more than price. At the other end, the environmental procurement policy of international business has lead to strong signals in the pulp, paper and packaging area. In between, and especially in New Zealand, structural products which become invisible elements in structures, have been slow to follow. A lack of institutional leadership such as government procurement policies and weak and somewhat distorted signals from green labelling schemes such as the Green Building Council have not helped.

So Why Certify?

Presently for the small forest owner in New Zealand, aside from altruistic reasons, a decision to certify will be based on the market they believe they will be confronting at harvest. For some, the business drivers may not exist and certification will not be for them. However, there are trends at play that all forest owners need to keep in mind.

  1. While only FSC is currently available in New Zealand, there are other very widely recognised systems in the world, especially those falling under the umbrella of the PEFC (Programme for Endorsement of Forest Certification).
  2. Certified forest area continues to increase under all schemes around the world and at 419 million hectares, FSC and PEFC are filtering into customer supply chains including Australia.
  3. Market demands for "proof of legality" and or proof of "responsible sourcing" (even if not certified) are also blossoming throughout the world. Recent legislation in Australia is the latest that will directly affect New Zealand exports to that significant market. Certification may serve one of those "proofs".
  4. Eventually, if large proportions of the supply to a regional processor are available as certified input, the complexities and costs involved in running dual or mixed inventory and output streams may lead processors to seek total certified input.

Practical Hurdles

While each certification scheme has its particular points of differentiation and supporters, they all have many features in common.

Size does matter!

Like most things in forestry, economies of scale apply. While the New Zealand standard recognises the Small and Low Intensity Managed Forest (SLIMF) concept to simplify the obligations for small forests, the basic certification requirements still apply and on a like-for-like basis the smaller the forest the higher the unit costs per hectare of certification, whether accounted in monetary terms or personal time devoted to the process. A plantation under 1,000 hectares meets the SLIMF criteria. However, the certification cost curve is relatively flat and low until the forest area starts to drop below about 200 hectares and thereafter steepens quickly the smaller the area becomes. The challenge for many farm foresters is that many of their forests are less than 200 hectares.

Reserve set-asides

The NZ FSC standard requires that within any Ecological District in NZ within which a forest is located, an equivalent of 10% of the area of the productive forest estate must be set aside as reserves. For forests set within a substantially pastoral landscape, largely defined by the events of history, such indigenous reserve options may be limited. To help overcome this problem there are some alternative options designed to assist. However, anyone considering certification should understand their options from an early stage. Fortunately for some farmers, one option may be to instigate programmes of farm riparian or wetland restoration, gully stabilisation or retirement that they may have been planning in any case. Sometimes they may even be able to source financial assistance.

Significant ecosystems, species, or cultural sites

Inherent to the whole philosophy behind certification is that sites of ecological cultural or historical importance will be accorded protection. In New Zealand, this is now largely covered under the auspices of the RMA. However, it is possible that even a small forest might contain rare or threatened species, rare ecosystems or important cultural or historic sites. These may require more specific management interventions. Recognising, planning and implementing any requirements could add costs and require professional expertise. If such situations arise financial assistance may be able to be organised but early identification of the likelihood of a situation arising is important.

The Management Plan

The required management plan is one of those elements that can most influence the start-up cost of getting certified. There are a significant number of elements of the FSC certification standard that must be addressed in a management plan, from descriptions of the forest estate, its reserves and management to access for recreation and monitoring of operations. These aspects can be incorporated into a single document or addressed via separate documents and complimentary systems and processes. In theory, while a plan for a SLIMF forest may be simplified and smaller, the basic elements must still be addressed. This will usually take some time, effort and sometimes a degree of research as well as on-site knowledge. This effort in time and or direct cost can still reach into the low $1,000's and spread as a one-off cost over a small block may be quite high. It should however be kept in perspective if real market requirements or transport cost differentials apply. The cost may easily be recovered at harvest.

Consultation

Another concept somewhat foreign in the context of private land use management is the requirement that key stakeholders be consulted. Every forest will be different in terms of who might constitute a stakeholder with an interest in what and how you manage aspects of your forest. Very often, for a small simple farm forest where neighbourly relations are in good stead, the process of identifying and consulting stakeholders will be quite smooth and simple. For any number of reasons however, consultation can occasionally be very difficult and early consideration of any potential issues should be factored in.

Those infernal records!

Certification imposes a whole new realm of record keeping in addition to the normal records of operations undertaken in forest stands. For an individual small forest, the intensity will be low, especially during the mid-rotation phases. However, records must be kept and retained in a "durable" form. This is where the power of a group scheme that includes centralised data records management comes into its own. Records will include operational environmental monitoring, incident recording, threatened or rare species records, chemical use records, ecological management operations, records of consultation and other matters. While any manual records system can suffice, developing the processes around what is recorded and when as well the formats and means of record management can be a time consuming process. This is streamlined under a group scheme where record keeping is systematic.

Cost

For the small forest owner, the single most compelling issue to be addressed is cost. While some cost can be reduced through personal effort, a significant cost that can't be avoided is the annual audit cost. It is here that the second strength of the group scheme comes into play. The sharing of costs of audit, provided there are enough members, can lead to significant cost reductions that are unlikely to be able to be improved upon by any party trying to 'go it alone' at a small scale.

A certified world

If you intend to maintain your forest into the future and can meet the certification criteria, any decision to certify is ultimately down to your world view and personal circumstances. What seems increasingly clear is that some sort of environmental performance verification will be required with your product. The only question will be when, under what criteria and how fast will the landscape continue to change.

Group Certification is one way to help manage the hurdles!

Forest environmental certification is about balancing values.