Green label’s ‘multi-stakeholder approach’ fails to deliver for forests and forest peoples

With governments slowly waking up to the dangers posed by fake green credentials in undermining meaningful climate action, greenwashing is a term that has seen a rise in popularity of late. At the 27th United Nations climate change conference in Egypt last week, the UN Secretary General declared that there would be “zero tolerance for greenwashing” claims made by governments and non-state actors. His words accompanied the release of a new UN report titled ‘Integrity Matters’ which denounces false net-zero claims and “slow movers, fake movers or any form of greenwashing.”

One of the most public facing forms of greenwashing concerns the ubiquitous ethical or green label, when it fails to deliver on its implied promises. Seals such as Fairtrade or Red Tractor are commonly seen on the backs of many products found on supermarket shelves. For everyday items made from paper and wood, one of the most recognisable labels is that issued by the FSC (Forest Stewardship Council). What is perhaps less well-known is that such green seals can signal not only to consumers but also to authorities tasked with enforcing key laws and standards in consuming countries that the products carrying such labels were legally and ethically produced.

The Forest Stewardship Council (FSC) held the second part of its two-part General Assembly in the exotic surrounds of Nusa Dua in Bali last month, where the 2007 Climate Change conference was also hosted. Its stated goal was to ‘define the credibility and value of FSC on global agendas.’ FSC, whose stamp is found on everything from packaging and toilet roll to clothing and furniture sold by well-known brands across the world, has seen an uptick in criticism in recent years. The decisions made at its General Assembly in Bali were to be a bellwether of its intentions to take that criticism on board and stay relevant in an era of climate emergency.

Mounting criticism

Formed in 1993 and originally supported by progressive members of the wood industry as well as environmental and social NGOs, FSC’s reputation has all but disintegrated over the last two decades. Many original environmental NGO founders have left FSC membership, denouncing it as a mere tool for timber extraction rather than a meaningful guarantee of legality or sustainability of forests and forest products it certifies.

The more independent members that remain have persevered within FSC’s ‘multi-stakeholder’ system to try to limit the worst damage - to push through rules that would prevent FSC from certifying the most destructive logging practices and close other gaps that have been repeatedly abused by companies trading illegal and laundered timber products.

Earthsight and many other groups have connected FSC-certified firms and forests to large-scale illegal logging, ponzi schemes, timber laundering and indigenous rights abuses. Earthsight has published two reports linking one of FSC’s biggest patrons, founding member Ikea, to illegal FSC-certified wood in Ukraine and Russia, in the hope it would lead the furniture giant to demand meaningful change at the wood label. Ikea has failed to act despite the scandals and related calls by hundreds of thousands of ordinary citizens.

During the first part of its two-part General Assembly last year, Earthsight coordinated an open letter supported by 33 other NGOs around the world including Fern, Mighty Earth, Rainforest Action Network, Greenpeace Indonesia, Greenpeace Russia, Global Witness, Auriga, Pro Regenwald, Canopée, Environmental Investigations Agency and Rainforest Foundation Norway. The letter, which cited many of the same problems already exposed by some of its early supporters as far back as the turn of the millennium, called for systemic reform to finally be brought about at the green label, pointing out that in a time of climate crisis, the FSC risked becoming completely obsolete if it did not make these changes.

Shifting the goalposts

One of the key ways in which FSC makes internal decisions comes in the form of ‘motions’ which can be tabled either by the management of the FSC itself, proposed by its Board or by its members. These motions come up for voting at a General Assembly organised by FSC every four years. In theory a motion is passed only after consensus among its three chambers - environmental, social and economic. FSC claims this ‘balanced voting process’ is what sets it apart from other wood certification schemes.

In practice, however, commentators both from industry and civil society have pointed to the system being corrupt and the tendency of the wood industry to organise and veto the most vital rule changes. One of the most cynical examples of this comes from the recent Bali General Assembly when FSC reversed its position on one of its hitherto most sacred rules - its policy on conversion of forest to timber plantations by pulp and paper companies.

On October 13th 2022 - the third day of the Bali meeting - that position came crashing down when FSC members voted overwhelmingly to bring forward the cut-off date for conversion from 1994 to 2020. The powerful pulp and paper lobby had been pushing for these rule changes for years.

Motion 37 was put forward by the FSC Board and would allow for the FSC certification of vast areas of timber plantations which replaced precious native forest between 1994 and 2020. Many of these forests were illegally cleared and involved abuses of indigenous people (especially in Malaysia and Indonesia).

Gemma Tillack of the Rainforest Action Network, one of the signatories to last year’s open letter, headed the campaign to safeguard this rule at the General Assembly this year. She called it a “make or break moment” for the scandal-wracked green label.

Not only was the motion approved, but it won a large majority in all three chambers. Many environmental groups were more in favour of it than economic chamber members. 90 per cent of environmental chamber members voted in favour.

The theory is that letting such companies back into the tent could force them to provide remuneration and remedies to local communities harmed by previous clearances, although the same commentators also admit the rule change could risk companies using the opportunity to greenwash themselves before they have made actual progress in this regard.

Indeed, Rainforest Action Network have said this would allow notorious pulp and paper companies like APP and APRIL who have together “cleared more than 2 million hectares of Indonesia’s rainforests for pulp plantations and incited hundreds of ongoing social conflicts with Indigenous Peoples and traditional communities” all while holding FSC certification, to once more regain FSC’s tree-tick stamp. She called it a “massive risk to the reputation of the FSC system.”

Earthsight has analysed other motions tabled at the General Assembly to see if any of the concerns NGOs raised in last year’s open letter were sought to be addressed by FSC. Although the motions that were tabled would not be enough to rid it of rot completely, they would have provided a glimmer of hope that the green label acknowledged the failures of its system that allow the greenwashing of illegal products through them, and that it was still on the right track in the battle against the global deforestation crisis.

There were three such motions:

Motion 5 on the culture at FSC HQ: Motion 5, seeking a change of culture at FSC HQ, was put forward by Board members at FSC UK, and is an acknowledgement of the need for a change in FSC culture on a broad level. It reads:

“With the growth of FSC, FSC Intl. has drifted away from the membership with increasing bureaucracy so that it is no longer fully accountable for its decisions. Old patterns are no longer helpful and now hold back the evolution of FSC. Silos have formed and internal disputes waste time, money and talent. Such culture endangers the assessment of risks and opportunities while ostracising both network offices and members who still remain engaged and committed to the cause. A good starting point would be a performance review of roles, at all levels, carried out by an independent and experienced professional. There is therefore a need for a change of culture that the GSP (Global Strategic Plan) does not address.”

REJECTED: Approved by Social and Environmental chambers. Won 52 per cent of the vote overall, but was VETOED by Economic chamber, 71 per cent of whom voted against the measure. 

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Motion 30 on mandatory traceability: Motion 30 would have addressed the issue of the fraudulent laundering of non-FSC wood into FSC supply chains, a commonly abused loophole the green label has been called on to fix for years. Earthsight has previously linked such practices to FSC-certified Ikea suppliers in Russia.

REJECTED. Received overwhelming support overall, with 74 per cent of the total vote (including 90 per cent of Environmental NGO members), but VETOED by the Economic Chamber, which voted narrowly (54/46) against. 

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Motion 54 on FSC chain of custody abuse: Motion 54 would have required any firm advertising its FSC ‘chain of custody’ certificate to actually handle some FSC-certified wood. This may sound counter-intuitive but it would have addressed one of the many weaknesses in the FSC CoC certification system, where companies routinely flaunt their FSC CoC certificates as if they are proof a company's wood is ethical, when all they actually do is give them the right to handle FSC-certified timber, which they may or may not do in practice.

REJECTED. Received overwhelming support overall, with 69 per cent of the total vote (including 93 per cent of environmental NGO members), but VETOED by the Economic Chamber, 74 per cent of whom voted against it. 

Failing forests, climate and forest peoples

None of these motions had been put forward by FSC's leadership, whose only response to the recent criticism of the organisation - including the joint NGO letter of October 2021 - was to propose a new mechanism (Motion 34, put forward by a member of the FSC Board) whereby the FSC members who signed it can be kicked out, for denigrating FSC. This was supported by 73 per cent of FSC's industry members, but was fortunately rejected by social and environmental NGOs.

These are not the only examples. A motion passed at the 2017 General Assembly, Motion 61, had promised to look into threats to the integrity of FSC systems. Background discussions that led to the passing of the Motion had centred around the flawed financing model that allows loggers to pay private companies for certification directly, creating a ‘race to the bottom’ that drives down the quality of implementation of FSC standards.

A report subsequently commissioned by FSC to look into how to solve problems raised by Motion 61, seen by Earthsight, was presented at last year’s virtual meeting. It acknowledges the threats to the system created by this relationship and recommended further research to reveal ‘how deep and how widespread certification integrity issues may be’ because of it. At the meeting last year, FSC cited fears of poor uptake and increased certification costs as the main challenges to reforming its flawed financing model. The discussion was concluded, the issue left unresolved.

The conflict of interest in how auditors are paid has long been considered one of FSC’s most fundamental flaws. Its failure to resolve it ensures the stage is set for scandals involving the label to continue well into the future.

Time has run out for the FSC. It is up to its few remaining members, key among them the highly influential WWF, progressive timber traders and FSC’s own Board, to force a change in philosophy and culture, force it to reform or threaten to walk away so as not to be complicit in FSC’s failures themselves.

In the meantime, Earthsight’s Director has previously written about how certification schemes like FSC are undermining effective law enforcement in western countries as their standards are lower than those set by laws such as the European Union Timber Regulation (EUTR), which requires wood products to be at ‘’negligible’’ risk of illegality before they enter the EU market. New draft legislation on EU deforestation, which will subsume the EUTR and include timber, takes into account the concerns of civil society and failed to give FSC or any certification scheme a formal role in meeting the standards set by them. Earlier this year civil society including Earthsight outlined 10 reasons why certification schemes like FSC should not be promoted by such laws.

The draft EU Regulation will open the door to reassess this stance on certification two years after the law enters into force. The outcome of the Bali meeting last month must serve as a reminder to the EU and legislators working on similar laws in other jurisdictions of why that door must be kept tightly shut - and barricaded.