THE ELUSIVE CREDIBILITY OF FOREST CERTIFICATION CLAIMS
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____________________________________________
THE ELUSIVE CREDIBILITY OF
FOREST MANAGEMENT CERTIFICATION CLAIMS
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JULIO CESAR CENTENO
JUNE 20, 1996
INTRODUCTION
The worldwide concern with the fate of the planet's forest heritage has
led to a series of proposals to overcome its degradation and
destruction. Among these proposals is the attempt to limit the trade
and use of industrial timber to that originating from forests managed
according to internationally recognized principles. Such forests would
be certified by reliable and properly accredited certification
organizations. The accreditation of certification bodies would in turn be
the responsibility of one or more authorized organizations, of
worldwide recognition and credibility.
The public concern with the degradation and destruction of forests has
also led to an emerging market for certified timber and timber
products. This has encouraged all kinds of claims of "sustainably
produced" timber, from tropical, temperate and boreal regions of the
world, from natural forests and from plantations.
We have simultaneously witnessed the appearance of a variety of
self-proclaimed certifiers, some lacking basic technical background,
with questionable objectivity, independence and transparency. The
credibility of some certifiers has been further eroded by their issuing
of certificates of "good forest management" on questionable grounds.
One such case relates to a certificate issued by the Rainforest
Alliance, a certifier based in the USA, to a Dutch owned company in
Costa Rica by the name of Flor y Fauna.
Different aspects of this case have been previously reported [see
references 1, 2, 3, 4, 5]. On March 12, 1996, the Rainforest Alliance
issued a public statement, in an attempt to justify what seem to be
obvious flaws in its management of this case, and to recover its
serious loss of credibility as a reliable certification body. Unfortunately,
its statement seems to have only served to further erode its reliability
as an objective and capable forest management certifier.
On May 09, 1996, the Reclame Code Commissie [Code of Ethics
Committee on Advertising] of the Netherlands made decisions related
to two complaints which had been introduced there. The first related
to the yield of timber upon which financial returns from the Flor y
Fauna plantations are based. The other related to the claim to an
"FSC Certificate" for the plantations.
[NOTE: The Reclame Code Commissie is referred to in English in
different ways by different people. Some translate the name as The
Code of Ethics Committee on Advertising, some as The Code
Committee on Advertising, and some refer to it as the local branch of
the European Advertising Standards Alliance].
The following day, on May 10, 1996, the Netherlands office of the
World Wide Fund for Nature [WWF-NL] published a statement which
attempts to make believe all is well at the teak front. It presents the
conclusions of the RCC as follows:
The Dutch Advertising Code Committee concludes that:
OHRA has NOT published misleading advertisements;
OHRA has NOT painted a too rosy picture of the returns; and
OHRA has NOT made false claims regarding the FSC certification
This posting deals with these developments of the Flor y Fauna case.
BACKGROUND
Flor y Fauna is a Dutch owned company with over 3,000 hectares of
teak plantation in northern Costa Rica. Planting started in 1989. Flor
y Fauna sold the economic ownership of the standing trees in most of
the plantation to the Dutch insurance company OHRA, who in turn
sold it to the general public in The Netherlands, in small lots of one-
eighth of a hectare each.
The cost of planting, harvesting and maintenance during the 20 year
rotation is less than 5,000 dollars per hectare. Investors are entitled
to 85 per cent of the revenues from the thinnings at years 12, 16 and
20, when a clear cut is planned. The returns to investors were
promised to range from a minimum of 600,000 US dollars per hectare,
to a maximum of US$ 1,450,000 per hectare in 20 years. The cost to
investors was 65,000 US dollars per hectare [Details in Ref. 1].
Investments in OHRA's Teakwood project were tied to a life insurance,
with a guaranteed return equivalent to the premium paid plus a
marginal nominal interest, varying from 0.4 to 0.7 percent per year
(IRR), depending on the age of the investor. Such an insignificant
interest rate should be easily overshadowed by inflation, except in the
unlikely event that inflation in the Netherlands remains at zero during
the 20 year investment period. The guaranteed interest is 7 to 10
times lower than what is normally the case for insurance policies in
The Netherlands.
In 1993, OHRA and Flor y Fauna obtained exclusive endorsement of
this plantation project by the Netherlands office of the World Wide
Fund for Nature [WWF-NL]. This endorsement turned WWF into an
active and interested partner in the venture, while adding credibility
amongst the general public to which investments were sold. The
terms of endorsement excludes the possibility of support by WWF to
other similar initiatives. In return, and according to a memo from
WWF-Netherlands to WWF-International of April 16, 1993, the
financial retribution to WWF-Netherlands would exceed 85 million US
dollars [Ref. 6].
ISSUES UNDER CONSIDERATION
Following a request by WWF, an assessment of the project took place
in 1993, concluding in a report entitled ECONOMIC ANALYSIS OF
FLOR Y FAUNA'S TEAK PLANTATIONS IN COSTA RICA, dated
December 22, 1993 [ref. 1]. Several key issues were raised there:
- The unrealistic projections on the yields of commercial timber
expected at the time from the plantations, ranging from 40 to 48 cubic
meters per hectare per year.
- The unrealistic projections on the prices at which this timber could
be sold [ Up to 830 dollars per cubic meter for 8-year old logs, and
up to 2,100 US dollars per cubic meter for 20-year old logs, both at
the plantation site].
- The consequent highly unrealistic internal rates of return promised
to investors at the time, ranging from 16.8 per cent to 22.4 per cent.
[memo from Van Rossum & Van Veen, a representative of Flor y
Fauna, addressed to WWF-US, dated April 08, 1993; in Ref. 1].
- The unbalanced distribution of the risks associated to the uncertainty
of these projections, designed to protect the interests of Flor & Fauna
and OHRA, while severely skewed against the interest of investors.
- The legal and ethical implications of the gross disparity between
what people were led to believe in order to make their investments,
and what they might actually receive, based on the best available
information to date.
- The highly speculative gap between costs incurred [less than US$
5,000 per hectare] and the price at which investment policies were
sold to the public in The Netherlands [US$ 65,000 per hectare].
In August of 1994, the contents of this report were leaked to a local
newspaper in Costa Rica by the name of THE TICO TIMES. In two
separate half-page articles on the subject, the fundamental and most
controversial findings of the report were exposed. A sample of what
was then published follows:
A Costa Rican tree company popular with Dutch investors and the
Dutch branch of the World Wildlife Fund is making exaggerated
claims, warned an internal investigation of the World Wildlife Fund
"Investors are led to believe that they will receive returns which are
highly unlikely" wrote Centeno...
Ebe Huizinga, Owner of Flor y Fauna, responded to Centeno's
report by saying: "He doesn't know anything about insurance or teak
plantations"
Yet, the World Wildlife Fund doesn't endorse this company, said
Miguel Cifuentes, regional director of the World Wildlife Fund in
Central America. "Flor y Fauna works only with the WWF branch in
Holland" Cifuentes stressed.
While teak realistically can be expected to grow 15 to 16 cubic
meters annually per hectare, Flor y Fauna investors are told to expect
an average of 40 to 48 cubic meters annually per hectare
If Flor&Fauna's projections are not true, the credibility of the World
Wide Fund for nature could be damaged
Centeno warned the Dutch World Wildlife Fund that it seems
involved in an agreement with questionable economic, technical and
ethical dimensions
One of the issues highlighted in the report was the non-existence of
a management plan at the time of the assessment.
YIELD PROJECTIONS
One fundamental point of controversy is the yield expected by the
company, which in turn affects the financial returns offered to
investors. In Flor y Fauna's promotional material, as well as in their
correspondence with WWF, they claimed that as a minimum they
would produce 40 cubic meters of commercial timber per hectare per
year under one scenario, and an average of 48 cubic meters per
hectare per year under another, during the 20 year rotation period
[ References 1, 12].
The yield of timber was expected to stay within normal range during
the first 8 years, at 15 M3 per hectare per year. But an abnormal
behavior was expected to take place after each thinning. The first
thinning, at the age of 8, was expected to increase growth to between
40 and 50 M3 of tradable timber per hectare per year. The second
thinning, at the age of 12, was expected to further increase growth to
between 59 and 71 M3 per hectare per year. And the third thinning,
at the age of 16, would increase growth even further, to the
astonishing figure of 68 to 83 cubic meters per hectare per year !!
[see reference 1 and 12 for details].
Perhaps not surprisingly, the production derived from the first thinning
at the age of 8, the only one within normal range, happens to be
reserved for Flor y Fauna. The return to investors depends mainly on
the accomplishment of the highly unlikely growth rates projected from
the second thinning till the final clear-felling at age 20.
Such were the figures presented to investors from the beginning of
1993 till an undisclosed date, in the autumn of 1995, when partial
corrections were introduced. During this time, thousands of investors
were led to believe in unrealistic projections, magnified by equally
unrealistic estimates of the price at which the timber could be sold.
The silvicultural behavior expected by the company, upon which
projections of returns to the public in The Netherlands were based, is
an absolute anomaly for teak. The unrealistic behavior expected by
Flor y Fauna, both in the magnitude of the yields, and in the effects
of each thinning, could no be clarified by the company. Evidence to
support such projections could not be obtained, although specifically
requested. The report [ 1 ] thus highlights:
The expected yields are unjustified, reverting in equally unjustified
expectations on the financial returns to be obtained. Investors are thus
led to believe they will receive returns which are highly unlikely. This
may be considered fraud
CERTIFICATION ASSESSMENT
Following a request from Flor y Fauna, at the end of 1993 the
Rainforest Alliance carried out an initial assessment of the plantations.
According to the Rainforest Alliance, the assessment concluded that:
"Flor y Fauna did not qualify for Smartwood certification in 1993"
[References 7, 8].
One important reason for the lack of qualification for positive
certification was the non-existence of a management plan for the
project, even though over 1,300 hectares had already been planted by
the end of 1993. It is estimated that by the time the management plan
was finally prepared, the general public in the Netherlands had already
invested over 200 million dollars in the project. The acceptability of the
project amongst the general public was largely due to WWF's
endorsement, with the consequent assumption that the potential
environmental, social and economic impact of the project had been
taken into consideration.
That was precisely one of the main concerns with the position of
WWF at the time. The organization had been stating in international
negotiations, such as the International Tropical Timber Organization
[ITTO], through the Forest Stewardship Council [FSC], publications
and other media, that a plantation project would NOT be acceptable
without the prior existence of a comprehensive management plan,
where the potential environmental, social and economic impact of the
project should be thoroughly analyzed. However, one of its national
organizations, WWF-Netherlands, was formally endorsing a plantation
project in a tropical country, without the existence of such a
management plan, a pre-requisite the organization demanded from
others. This attitude was reminiscent of the old colonial dogma: "Do
as I say, not as I do".
Despite what the Rainforest Alliance has reported to be the conclusion
of the first assessment of the plantations, Flor y Fauna, OHRA and
WWF-Netherlands publicly claimed that this assessment concluded in
the operation being "pre-certified" as of mid 1993.
The certifier has not yet explained the contradiction between what it
claims was the result of its initial assessment, and the claim made by
the interested parties involved. Should the information supplied by the
Rainforest Alliance be the truth, then it could be concluded that the
Dutch public was purposely misled by the allegations of those who
procured investments in this scheme, and who had a direct economic
interest in the project.
The Rainforest Alliance proceeded later with a second evaluation of
the project, which concluded in April of 1995 with a formal certificate
to the plantations as "well managed". In this manner, the Rainforest
Alliance ended up endorsing Flor y Fauna's claims to fictitious yields
and rates of return.
In a message from the Rainforest Alliance, dated February 01, 1996,
it is stated:
"Based on interviews, field work, and research data collected in Costa
Rica, we did not find that F&F's projections in terms of growth and
yields were inaccurate, but that further empirical substantiation was
important from a variety of different management perspectives...".
If the RA did not find these projections to be inaccurate, it in fact
found them to be accurate. What it expects in the future is simply
further substantiation of this finding. This is fundamental to the
discussion, and therefore the RA seems to be under the responsibility
of bringing this evidence openly to the attention of the different parties
involved. This would resolve the case to the benefit of its client, and
the whole discrepancy would be largely settled. Why has the RA not
done so yet?
What is the nature of the field work that led the RA to come to this
conclusion? What sort of research data is the RA referring to? Where
can the relevant reports be found?
In a message from the Chairman of the Board of the FSC, dated
January 22, 1996, and referring to the director of the Rainforest
Alliance, it is stated:
He [the director if the RA] informed me that FyF significantly
reduced its growth estimates based upon empirical data from the
monitoring program...
What sort of significant reductions is the RA referring to?
When where they introduced?
How did they affect expected financial returns?
Where can the corresponding reports be obtained?
Why was it necessary for Flor y Fauna to make significant reductions
to growth estimates, when the RA found during the evaluation process
that the original projections were accurate?
The information supplied by the Rainforest Alliance to the FSC,
regarding "significant reductions" in growth rates by Flor y Fauna, is
contradicted by the Adjunct Director of OHRA, Henk Janssen. He
denies that there was ever a downward adjustment. In a declaration
to the "Het Financieele Dagblad" on May 7, 1996, he states:
"It is an old misunderstanding... OHRA has, from the very start in
March of 1993, used the range from 20 to 42.5 m3 in its advertising
materials."
This assertion is clearly contrary to facts. It is contradicted by the firm
Van Rossum & Van Veen, a direct representative of Flor y Fauna and
with close relations to OHRA. In a letter addressed to WWF-US, dated
April 08, 1993, while lobbying for WWF's support, they highlight
growth rates ranging from 40 to 48 cubic meters per hectare per year.
It is also contradicted by WWF-Netherlands, in their communication of
17-02-93, reference avk/rw/93-256, where the same growth rates were
reported [Copies of both in the Appendix of Reference 1]
In its promotional brochure: TEAKWOOD III: AN INVESTMENT IN A
GREENER FUTURE [Ref. 11], Flor y Fauna pushed investments in its
venture promising unaware customers a total of 950 M3 of tradable
timber per hectare in 20 years [equivalent to a mean annual increment
of 47.5 M3 per hectare per year, and refers only to the proportion of
the timber whose economic value belonged to investors]. At that time
Flor y Fauna sold directly to investors, requesting 28,600 US dollars
per hectare. The return to investors was highlighted at over 1.6 million
dollars per hectare!
In March of 1993, Flor y Fauna published its TEAKWOOD VI
brochure, also entitled EEN INVESTERING IN EEN GROENERE
TOEKOMST [An Investment in a Greener Future, Ref. 12]. It portrays
the WWF panda-logo on its cover, with the statement:
"In Cooperation with the World Wide Fund for Nature".
This promotional brochure highlights a yield range for commercial
timber from 40 to 48 cubic meters per hectare per year under its three
scenarios. These are the same scenarios reported in the 1993
assessment [Ref. 1]. WWF's open endorsement of this publication
clearly shows its agreement with the figures. It also provided credibility
to such unrealistic projections, now denied by OHRA itself.
The same promotional brochure was submitted by Flor y Fauna as
evidence to a court of law on December 7, 1993, and by OHRA to the
Reclame Code Commissie in March of 1996.
As late as December of 1995, Flor & Fauna introduced as evidence
in a court of law a document from the Ministry of Agriculture of the
Netherlands, dated December 28, 1993 [Reference 9], where the
MINIMUM expected yield for these plantations is established at 1,057
M3 per hectare during the 20 year rotation period. This implies a
MINIMUM mean annual increment of nearly 53 M3 per hectare per
year!!
The same document was introduced as evidence by OHRA to the
Reclame Code Commissie in January of 1996.
[NOTE: This document has proved to be an embarrassment to the
Ministry of Agriculture, due to its speculative nature, to its lack of
professionalism, and to the inclusion of such an array of elementary
mistakes that would flunk first year forestry students at any University]
To deny now such documented evidence of grossly exaggerated
growth rates is a serious miscalculation of the memory and
intelligence of the investors OHRA it bound to serve.
In the Summer of 1993 issue of OHRA's inhouse magazine, an
article entitled HET GROENE GOUD [The Green Gold], boasts
nominal rates of return from 15% to 25% for the Flor y Fauna
plantations.
In a May 29, 1995 ad in the newspaper 'De Telegraaf', investment in
the teak plantations are promoted by OHRA with the following caption:
"Your Return: 14%, 18% or More!".
Only a few days later, a circular by OHRA of June 7, 1995, with a
caption "Investing Green with High Rates of Return", states:
"Pending on the assumptions made, a rate of return is expected of
15% to 25%."
Six months later, in a personalized letter to all Teakwood investors by
Huesmann, chairman of OHRA, dated December 1, 1995, investors
are assured that:
"The trees grow well... If we judge the realized growth rate of the
teaktrees, and if this growth continues, we can conclude that we will
attain results somewhere between our pessimistic (11%) and
optimistic (25%) rates of return."
Three issues need to be highlighted at this point in relation to the
estimates on returns. Their variability. The significant drop of the
minimum return promised to investors. And the perception that, in the
very worst case, you would receive between 11% and 15% yearly
returns on your investments.
FSC ACCREDITATION
The Rainforest Alliance was accredited by the Forest Stewardship
Council as a certifier on February 21, 1996. This FSC accreditation is
conditional to certification of natural forests management only. It is
specifically established that this accreditation does not in any way
imply an endorsement by the FSC of certificates which might be
issued by accredited certifiers on plantations.
PREMATURE ENDORSEMENT AND LOSS OF IMPARTIALITY
Nevertheless, in a written statement by the Executive Director of the
FSC, dated December 21, 1995, it is established that the FSC
Secretariat scrutinized all the certifications reports existing up to that
date, and concluded:
We believe that the Flor y Fauna evaluation report was thorough
and competent
This is, or could legitimately be interpreted as, an endorsement by the
FSC of the certificate issued to this plantation by a still non-accredited
certifier. At the time this endorsement was presented, the FSC had
not yet approved its basic principles for the management of
plantations. Furthermore, the FSC was at the time not authorized to
endorse the activities of any certifier until the time they were fully
accredited, least of all endorse a certificate on a plantation. Specially
not after a highly controversial and potentially damaging public debate
had already erupted in The Netherlands, precisely on that particular
plantation operation.
Now that the certificate is being openly questioned, the need for
independent arbitration from the FSC Secretariat is clearly and
seriously curtailed by its previous endorsements of the certificate
issued to Flor y Fauna, as per the statement above.
THE CLAIM TO AN FSC CERTIFICATE
During the last quarter of 1995, the claim that the plantations
established by Flor y Fauna in Costa Rica had been awarded
an "FSC CERTIFICATE" appeared in full-page advertisements in the
largest newspaper in The Netherlands, De Telegraaf. The claim was
also included in full page ads in other newspapers [Volkskrant, issues
of 19-08-95 and 23-09-95], in promotional brochures, and in
thousands of letters sent by OHRA to potential investors. Even WWF-
Netherlands boasted of an "FSC Certificate" for the plantation it is
formally endorsing, in a full color promotional brochure placed on
distribution as late as January of 1996 [Ref. 9]
It is well known that the FSC is not a certifier, and that it is not within
its mandate to issue certificates of good forest management
anywhere. However, despite the contractual agreement which is
presumed to exist between the Rainforest Alliance and Flor y Fauna,
no mention to the actual certifier, the Rainforest Alliance, was made
in such advertisement claims. The name of the FSC was thus openly
abused and manipulated to add credibility to the project, and to lure
investors into the scheme.
By the time the press ad-campaign was launched at the end of 1995,
the Rainforest Alliance had not yet been accredited by the FSC. Even
today, plantation operations are formally excluded from the FSC range
of operations. There is now obvious pressure for the FSC to quickly
expand its endorsement to plantations.
The claims which have been made by Flor & Fauna, OHRA and
WWF-Netherlands to the effect that their plantations have been
certified as "well managed" by the FSC is well documented. OHRA
itself has publicly recognized this fact, referring to it as a mistake, a
slip of the pen, and promising it won't happen again, as in the
declaration by its Adjunct Director, Henk Janssen, in the February
17, 1996 issue of Elsevier Magazine.
According to the FSC Secretariat, WWF-Netherlands has also
recognized its own misuse of the FSC name, and has promised the
FSC that they would include a disclaimer in the brochure where WWF
refers to the "FSC Certificate" for the plantation. According to the FSC
Secretariat:
" WWF-NL informed us that they realized their error after the fact, and
subsequently included a correction notice inside the brochure"
It is absurd and counter-productive to continue to deny at this stage
what has been publicly advertised through the press, brochures and
letters, for months in The Netherlands. Specially when these untruthful
claims have already been publicly recognized by OHRA itself, and by
WWF to the FSC.
Following the decisions of the February 96 meeting of the Board of
Directors of the Forest Stewardship Council, the FSC reported the
following:
" The Secretariat has sent letters to both OHRA and WWF-NL to
explain our policy, and to request that they correct any mis-statements
in their respective brochures and other places where the original mis-
statements circulated".
The 'other places' where the original mis-statement circulated
obviously includes the press.
This decision of the FSC Board of Directors has so far been ignored
by both OHRA and WWF-NL, for no such corrections have been
reported anywhere in the Dutch press. The credibility of the FSC itself
is therefore at stake. These organizations openly abused the name of
the FSC to sell their products, while arguing that the FSC was the
most authoritative body in forestry. Now that they have been exposed,
they have chosen to ignore the decision of its board of directors.
THE RECLAME CODE COMMISSIE
A recent decision by the Reclame Code Commissie, dated May 09,
1996, dossier 95.8994, includes two different aspects of the Flor y
Fauna - OHRA case:
1). A statement on the rates of returns promoted by OHRA in a May
29, 1995 ad in the newspaper 'De Telegraaf':
Your Return: 14%, 18% or More! .
2). The claim to an FSC certificate.
With regard to the rates of return promised to investors, the decision
of the Committee highlights:
With regard to the return, the advertiser [OHRA] leaves no doubt
that there is no certainty at all about that
It also indicates that OHRA made the following allegations:
The yield of the first cut, taking place only after 20 years, depends
upon 3 variables, namely the growth of the trees, the exchange rate
of the dollar, and the development of the price of the timber. Of
course at this moment no certainty exists about the development of
these variables
The return can vary. This implies that the return can also be less
than the percentages named in the expression
The Committee further elaborates:
The guarantee, which goes according to the advertiser [OHRA] not
much further that the paid premiums, once more points out that
certainty with regard to the achievable returns is missing
It is then clear that OHRA has no confidence at all about the yield of
timber to be expected, the prices at which it may be sold, and the
rates of return to be expected. OHRA argued at the RCC that it does
not guarantee any rate of return whatsoever, except for the
insignificant internal rate of return averaging 0.5 percent attached to
the life-insurance aspect of the policy!
Following these line of considerations, the Committee concluded:
...the possible achievable return is not pictured brighter than it is
With regard to the FSC certificate, the Committee simply indicates:
"..in the advertising submitted to the Committee it is not stated that the
Flor y Fauna project is provided with an official certificate by the FSC.
This part of the complaint is therefore lacking actual basis".
The Committee ruled on advertisements which did not contain the
claim to an FSC certificate. The decision of the Committee indicates:
"The complaint concerns an advertisement in DE TELEGRAAF, of
May 29, 1995, and an advertisement in the magazine PANDA, issue
of Winter 1996."
Neither of these advertisements include the claim to an FSC
certificate. The claim to such a false certificate was made in over 1.5
million full-page ads in the following newspapers:
Volkskrant, issue of 19-08-95
Volkskrant, issue of 23-09-95
De Telegraaf, issue of 07-10-95
Plus hundreds of thousands of brochures and letters delivered to
potential investors by OHRA.
The claim to a false 'FSC Certificate' has also been made public by
WWF-Netherlands, in its full color promotional brochure NAAR EEN
HOUTBARE WERELD, 1996, apparently intended to promote the FSC
in The Netherlands [Ref. 9]. It has also been reported as part of
WWF-NL statements to the papers "De Gelderlander" and "Het
Brabants Dagblad" as late as February 9, 1996.
I understand an appeal before Reclame Code Commissie is pending
for the end of June, 1996, with the introduction of some 30 exhibits.
It is only prudent to wait and see what the final decision will be.
Nevertheless, it is clear the Dutch branch of WWF has rushed to
distort the findings and conclusions of the Reclame Code Commissie.
An action that can only back-fire, further eroding its own reputation
and credibility.
In a fax widely circulated at the end of January, 1996 [dated
"December 28, 1996"] the Rainforest Alliance claimed it would take
"immediate action" as soon as it was aware of documented evidence
about the false FSC certificate claimed by its client. Somehow this has
not yet taken place.
DEPTH OF THE ECONOMIC ANALYSIS AS PART OF A
CERTIFICATION PROCESS
It has never been suggested that the Rainforest Alliance, or any other
certification program, should guarantees specific financial returns from
forest management operations anywhere. That is obviously not the
intent of certification, and has not been proposed or implied by
anyone, as far as I am aware.
It is true, though, that the Rainforest Alliance's Smartwood Program,
like other certification programs, is expected to operate according to
the Principles and Criteria approved by the Forest Stewardship
Council.
FSC Principle 7, applicable to both natural forests and plantations,
states:
"The long term objective of management, and the means to achieve
them, shall be clearly stated"
The fundamental objective of the Flor y Fauna teak plantations in
Costa Rica is the achievement of a certain financial return, based on
specified projections on yields and prices.
Expected returns are a particularly important objective in this case,
due to the sale of policies to the general public in The Netherlands,
based on advertisement and promotional material which highlights the
high revenues to be expected. The same general public, as a matter
of fact, from which we expect trust and credibility in the certification
process.
In compliance with FSC Principles, then, the means to achieve this
fundamental objective should have been properly and thoroughly
assessed during the certification process.
The certification of Flor y Fauna by the Rainforest Alliance has
obviously become a formal endorsement of the company's projections
on yields, prices and rates of return. This is at least a logical and
legitimate interpretation by the public, specially if no reservations are
made to this effect when the certificate was issued. Should such
projections be significantly out of proportion, this endorsement will
inevitably cause serious damage to the credibility of the Rainforest
Alliance's Smartwood Program. This has already proved to be the
case.
The certification assessment of Flor y Fauna failed to ensure
compliance with FSC Principle 7.
The Rainforest Alliance argues [Reference 7] that their main concerns
during the certification process were that:
- The operation was silviculturally sound.
- Environmental benefits were maximized
- A positive impact on local communities and F&F employees
This is possible, while still violating FSC Principle 7.
Despite what it is argued to be an emphasis on silvicultural,
environmental and social issues in the Rainforest Alliance certification
program, the scope of the economic analysis included in this
assessment has been presented to the public as rather thorough. In
a brochure published by WWF-NL and IUCN [BOS INFO, October
1995] the director of the Rainforest Alliance is quoted as follows, in
relation to Flor & Fauna:
"Richard Donovan emphasized that certification processes encompass
more than ecological criteria. He qualified the project as an impressive
combination of social responsibility and economic viability"
CONCLUSIONS
The success of forest management certification is based on the
transparency and reliability of the organizations involved, and on the
credibility of their judgements. This case highlights how difficult this
can be, when there is no clear mechanism to screen the reliability of
potential certifiers, and when certifiers are free to operate without due
accountability to the public. The lack of transparency of the case has
eroded trust in the institutions involved, and has cast shadows over
the ultimate objectives pursued.
REFERENCES
1]. Centeno, J.C: ECONOMIC ANALYSIS OF FLOR Y FAUNA'S
TEAK PLANTATIONS IN COSTA RICA. Assessment Report
prepared by request of WWF-International and WWF-Netherlands.
December 1993.
2]. Centeno, J.C: TEAK CONTROVERSY FLARES UP IN THE
NETHERLANDS. Posting to Internet, February 05, 1996.
3]. Centeno, J.C: TEAK STING. Posting to Internet, February 19,
1996.
4]. Centeno, J.C: WORLD RECORD ON TEAK GROWTH: TRUTH
OR TRICKERY? Posting to Internet, March 12, 1996.
5]. Centeno, J.C: BLASTING THE FSC IN THE NETHERLANDS.
Posting to Internet, March 1996.
6]. Memo from Jos de Wit, WWF-Netherlands, to Frances Horne,
WWF-International, dated April 16, 1993.
7]. The Rainforest Alliance: Open letter dated December 28, 1996,
actually received on February 1, 1996.
8]. The Rainforest Alliance, February 22, 1996 open statement.
9]. WWF-NL: NAAR EEN HOUTBARE WERELD, 1996.
10]. DE TEAK PLANTAGES VAN FLOR Y FAUNA SA IN COSTA
RICA. A.J.M. Wouters, Ministry of Agriculture of The Netherlands,
December 28, 1993.
11]. Flor y Fauna: TEAKWOOD III: AN INVESTMENT IN A
GREENER FUTURE.
12]. Flor y Fauna - WWF-NL: TEAKWOOD VI: EEN INVESTERING
IN EEN GROENERE TOEKOMST. March 1993.
_____________________________
JULIO CESAR CENTENO
PO BOX 750
MERIDA - VENEZUELA
FAX INT +58 - 74 - 714576
EMAIL: jcenteno@ciens.ula.ve
_____________________________
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