Teakwood's growth and yield

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                       GROWTH AND YIELD
       with some details on rates of return to investors
                -the Flor y Fauna plantations-

                         July 18, 1996
                    Paul Romeijn, Treemail

This paper is prepared to serve as a reference sheet to those who follow the public debate on the Teakwood programme. It highlights some of the materials on file at Treemail's office.

Although the materials have been compiled and translated with due care, Treemail fully disclaims any responsibility as to the correctness of its contents and refers the readership to the original documents.

OPENING STATEMENTS:

"A timber yield of 1,057 m3 per hectare, that is what Huizinga is going for, and he will attempt to do better still." (Flor y Fauna, in court, on December 7, 1993)

"OHRA has, from the very start in March of 1993, used the range of 20 to 42.5 m3 in its advertising materials." -rotation: 20 years- (OHRAs adjunct Director H. Janssen in Het Financieele Dagblad May 7, 1996)

"In the notably prudent basic scheme the timber yield is calculated at 1,057 m3/ha (!)." (OHRA, in court, on December 7, 1993)

INTRODUCTION

Teakwood:

This is an investment programme in teak plantations in Costa Rica. The programme was started in 1989 by Dutch owned Flor y Fauna S.A. who independently sold the projects called Teakwood I-V to Dutch investors until 1993. In 1993 Flor y Fauna was joined by OHRA insurance company and WWF-NL for the plantation projects called Teakwood VI, VII and VIII.

Rainforest Alliance:

The Rainforest Alliance is based in the USA. It has certified the Flor y Fauna plantations under its Smart Wood programme in 1995, thus allowing the plantation's produce to carry the 'Smart Wood' label.

Forest Stewardship Council:

The FSC was established as a legal entity on October 25, 1995, is based in Mexico, and accredits certifying agencies. As of end of February 1996, the FSC has accredited the first four certifying agencies, including the Rainforest Alliance. This accreditation does not include plantation forestry at the time of writing of this paper.

CHAPTER 1

                         -------------
                         The Brochures
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1) Teakwood I-V (1989-1992)

Year           m3/ half ha         m3/ha

8               15.57               31.14
12              51.54              103.08
16             121.23              242.46
20             473.71              574.42

TOTALS         475.71              951.42

This yield forecast is after retainment of 5% for Flor y Fauna.

The total yield expectation is therefore at 1,001.50 m3/ha for Teakwood I-V (MAI=50.07 m3/ha).

2) Teakwood VI (as per brochure of March 1993)

This section deals with the official, full-color Teakwood sales brochure which is adorned with a Panda logo under the text 'in collaboration with WWF-NL'. The brochure is entitled "Een investering in een groenere toekomst (An investment in a greener future)". This sales brochure portrays three scenario's, that have two yield expectations.

Example 1 and 2 (mean diameter increment of 2 cm/year)

Year           m3/ 1/8th ha        m3/ha

8                3.80               30.40
12              10.69               85.52
16              25.34              202.72
20              59.38              475.04

TOTALS          99.21              793.68

Treemail understands this yield forecast is after retainment of 5% for Flor y Fauna, 5% for WWF-NL and 5% for OHRA.

This total yield expectation is therefore 933.74 m3/ha for Teakwood VI (MAI=46.69 m3/ha).

Example 3 (mean diameter increment of 2.2 cm/year)

Year           m3/ 1/8th ha        m3/ha

8                4.60               36.80
12              12.93              103.44
16              30.66              245.29
20              71.85              574.80

TOTALS         120.04              960.32

Treemail understands this yield forecast is after retainment of 5% for Flor y Fauna, 5% for WWF-NL and 5% for OHRA.

This total yield expectation is therefore at 1,129.69 m3/ha for Teakwood VI (MAI=56.45 m3/ha).

The brochure's text, not in the tables on rates of return, contains one reference to the possibility of a mean diameter increment of 1.5 cm/yr. This is portrayed "in the case of a extremely pessimistic scenario". The text in the brochure fails to detail the effects on yield predictions. However, in a presentation in court (see chapter 3), Flor y Fauna provides these details. A mean diameter increment of 1.5 cm/yr results in a total yield of 867 m3/ha (MAI=43.35 m3/ha).

Notes to brochure 2) on Teakwood VI:

The Teakwood VI brochure does not give the data on the first thinnings. These data were derived from the data that were presented to Prof. J.C. Centeno by Flor y Fauna, and as reported in the next section. Because the data provided by van Rossum van Veen (Flor y Fauna's representatives in The Netherlands) to WWF-USA show identical overall growth expectations, these data were used as source to complete the tabes for Teakwood VI-VIII yield predictions for year 8, as above.

In the case of Teakwood VI-VIII, the returns derived from yield of year 8 is for Flor y Fauna.

This brochure, in section 4.2, states that increment projections are arrived at "on the basis of publications and research in the region".

A 1990 base price of USD 450 per m3 of teak is used to calculate the profits for the investors. This timber value is expected to rise, as of 1990, at a rate of 4-8% per year, according to the brochure.

For the calculation of rates of return to the investors, it is assumed that the wood derived from thinnings would fetch the same prices per m3 as the wood from the final cut. This remarkable assumption is highly unusual in forestry. 3) Later advertisements

The yield projections from the sales brochure as described in section 2) of this chapter were never lowered, refuted or withdrawn by any of the Teakwood partners.

However, later advertisements by the OHRA insurance company became less outspoken on the question of yield expectations. In fact, they contain no reference whatsoever to yield expectations. The advertisements only refer to expected rates of return for investors as "14 to 18% ... or more!"

The only reference to anything reminiscent of informing potential investors on yield expectations that are left standing in 1996 are the minimum and maximum values for expected mean annual diameter increment (e.g. in OHRA's magazine 'Vast en Zeker', Spring 1996, on page 8; positioned besides an advertisement as referred to in the previous paragraph on the facing page 9).

The table presents data for the minimum and maximum values for expected mean annual diameter increment and their effect on rates of return to the investors. These range from 1.5 to 2.2 cm per year, and result in returns on investment of 11 to 25%. In agreement with the data provided by Teakwood in their earlier brochure and in court, these values are indicative of an expectation for accumulative log volume which ranges from 867 to 1,130 m3 per hectare.

CHAPTER 2

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            Data as presented to Prof. J.C. Centeno
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In 1993, Prof. J.C. Centeno was commissioned by WWF-NL to research the economic aspects of the Flor y Fauna plantations. For the purpose, following materials were made available on growth and yield for the plantations to Prof. Centeno.

Yield expectations for Teakwood VI (according to fax from WWF-NL dated February 2, 1993)

Example 1 and 2

Year m3 per 1/2 ha m3/ha 8 15.20 30.40 12 42.75 85.50 16 101.34 202.68 20 237.50 475.00 TOTALS 396.79 793.58 Treemail understands that this yield forecast is after retainment of 5% for Flor y Fauna.

The total yield expectation is therefore 835.35 m3/ha for Teakwood VI (MAI=41.77 m3/ha).

Example 2 and 3


Year      m3 per 1/2 ha       m3/ha

8          18.39               36.78
12         51.73              103.46
16        122.62              245.24
20        287.38              574.76

TOTALS    480.12              960.24

Treemail understands that this yield forecast is after retainment of 5% for Flor y Fauna.

The total yield expectation is therefore 1,010.78 m3/ha for Teakwood VI (MAI=50.54 m3/ha).

In addition, Prof. J.C. Centeno received a copy of a fax message of April 15, 1996, from van Rossum van Veen (advisors to Flor y Fauna in The Netherlands) to WWF-USA. The figures in this fax provide identical growth predictions as the official brochure for Teakwood VI of March 1993. Year 8 assumptions for yield are 3.80 m3 for 1/8th of a ha, which equals an expectation of 30.40 m3/ha annually for example 1 and 2; example 3 has these respective figures at 4.60 and 36.80.

CHAPTER 3

                          ----------
                          Court Case
                          ----------
Before the Court of Leeuwarden, in session on December 7, 1993, OHRA and Flor y Fauna's legal representatives presented memoranda of pleading. In these documents, to the best of Treemail's knowledge, OHRA and Flor y Fauna have provided the most elaborate source of publicly available materials on their justification of growth and yield projections for the Flor y Fauna plantations. In this chapter excerpts from the court memorandum are presented.

Flor y Fauna builds the presentation upon the findings of a bailiff who has measured a few trees. Measurements provide hard data, it is argued. From the bailiff's data, several forecasts are presented in yield tables. Flor y Fauna's lawyer argues at length to show the court that Flor y Fauna considers the following tables to reflect very prudent representations of reality. The Flor y Fauna lawyer F.H.J. van Schoonhoven pleads as follows (excerpts):

"Theories can be good, stories can sound convincing, but is numbers that speak the purest language. Upon Huizinga and OHRA's request, bailiff Groot left for Costa Rica on November 22, 1993, with the assignment to visit a number of plantations and to draw up a report. Bailiff Groot was accompanied on this occasion by one of the few tropical foresters from The Netherlands, Mr. A.J.M. Wouters (Ministry of Agriculture, Nature and Fisheries, department of Tropical Forestry), Mr. W. Kriek (International Coordinator of the Forestry Action Plan) and Mr. H. Voortman (WWF-NL)."

"The measurements were taken from both thinner and thicker trees, to which bailiff Groot observes that the thicker trees were in the majority. With this, bailiff Groot wishes to make it clear that it is not entirely correct to take the mean of all of his measurements, but that in order to determine a more accurate mean this value should be increased."

"The figures and measurements of bailiff Groot are of no value without a correct interpretation. It is important here, to arrive at drawing up a basic scheme of expected timber yields for the nearby and further future. As point of departure the measurements of the bailiff should be taken, from which point prudent calculous follows. The following points of departure are thus formulated on these data, on which the basic scheme is calculated. Already at this point it should be noted that these points of departure are explicitly supported by Mr. Wouters, who gave evidence in a written statement to this effect (EXHIBIT 5)."

"After four years, the average Huizinga [Flor y Fauna's Director; author's note] teak tree in Teakwood I has reached a diameter of over twelve centimeters (calculated by division of the diameters as measured by the bailiff by the number of trees measured). The young teak trees (Teakwood III and IV) are (comparatively) somewhat thicker. For the calculation of the basic scheme this is left out. When corrected for the thickness of the bark the net thickness after three years is put at 10.5 centimeters. Actually, this figure is too low as point of departure now that the better trees (i.e. the ones with the larger diameters) surpass the lesser ones (i.e. the ones with the smaller diameters). (See the official report near the bottom of the penultimate page: "...to which I can further remark, that the thicker trees were predominantly present"). The purer mean thickness will thus be more than the mean of the trees that were measured by bailiff Groot. For the purpose of drawing up the basic scheme this fact will be left out. On top of that, the thinnest trees will be removed at time of the first cut and especially the thicker trees will be left standing. Comparatively, this will result in an extra mean diameter increment, at every cut. This effect will also be left out of the equation."

"The mean height of all the measurements taken by bailiff Groot in Teakwood I, II and IV is 14.3 meters. For the basic scheme we will lower this to twelve meters."

"The current growth will continue (three centimeters per year for the coming four years is a minimum that can be expected). A mean diameter increment of 1.7 cm per year is absolutely too low. This low mean would deny all the added value of future maintenance, fertilization and management. For the basic scheme we will "forget" this added effect and keep the increment at 1.7 centimeter per year."

"The height increment will be curtailed in favor of the diameter increment as a result of a change in the nourishment and fertilization (less P, more K). Even so, the trees will continue to grow at a gross rate of 2-2.5 m per year. As a result, Huizinga expects the trees to be (substantially) higher than 30 m after 20 years. For the basic scheme Huizinga uses a gross increment of 1.1 meters per year. Thus the usable height will increase with 66.6% of 1.1 meter = .77 meter, which is rounded off to the lower value of .75 meters per year."

"Huizinga starts all projects with 1,600 teak trees per hectare (the distance between trees is two and a half meters)."

"Because of the strong initial growth, Huizinga expects that the first cut can be advanced (after year seven). If the current growth continues (and this is to be expected), then it might be that the first cut will take place in two years from now (that is, after year six). This will further increase the yield because the trees that are not cut will receive more space, light and nutrition. (N.B. each cut amounts to 25% of the standing trees)."

"The average height of the Teakwood I trees is already 5 m over what is used as an assumption in the basic scheme."

"The increment of the usable height per tree with .75 meters per year is too conservative. A teak tree can, even during the last years (between age fourteen and twenty), hardly grow any slower than one and a half gross meters per year (=one meter usable height per year)."

"The loss of a total number of trees of 240 per ha will prove to be far too high. At this point it can already be concluded that the loss at the first cut [Treemail notes: the word thinning would be more appropriate, but is never used] is practically zero (a maximum of 10 trees per ha). Huizinga already foresees now that the expected loss at the first cut will be practically zero. For the fourth cut, so Huizinga expects, the loss will also be small. These are the strongest, thickest and most healthy trees from the plantation, that will be cut last. In fact, it is to be expected that the final cut of the thickest trees should not even have any loss whatsoever. For the purpose of the basic scheme, prudent points of departure are taken. The sum total loss of 160 trees per hectare at the second and third cut can be considered as high. Initially, Huizinga assumed a loss of 200 trees for the second and third cut. This appears to be unrealistic, and is therefore reduced to two times 80, which is 160 trees. Finally, the sales value of all the trees that are lost is set at NLG 0.--. This is, it goes without saying, quite different in practice. After all, it is evident that these trees will also be processed and sold. For the calculation of the basic scheme this is left out of the equation."

BASIC SCHEME 1

For reasons of economy of space, the full table is not presented here.

The main results are:

Diameter at year 20 is 37.7 cm
Usable tree height at year 20 is 20 m
Total tree loss is 240 trees/ha
Total commercial yield is 1,057 m3/ha

The table is based on the following assumptions:
1. mean diameter increment is 1.7 cm/yr
2. usable height increment is .75 m/yr
3. trees lost: 40 - 80 - 80 - 40
4. cylinder correction: 25%
 

BASIC SCHEME 2
Year      Diameter  Loss           Cut            Yield
          (in cm)   (trees/ha)     (trees/ha)     (m3/ha)

4         10        
5         12.5      
6         14.5      
7         16.5      
8         18.5      10             390            94
9         20.5      
10        22.5      
11        24.5      
12        26.5      50             350            232
13        28.5      
14        30.5      
15        32.5      
16        34.5      50             350            491
17        36.5      
18        38.5      
19        40.5      
20        42.5      10             390            996

TOTAL               120            1480           1813

This table gives, in addition to the above, a "usable tree height of 24 m after 20 years".

This table is based on 4 assumptions:
1. mean diameter increment is 2 cm/yr
2. usable height increment is 1 m/yr
3. trees lost: 10 - 50 - 50 - 10
4. cylinder correction: 25%

"The written declaration from Mr. Wouters (see exhibit 5) confirms that all the points of departure are correct and that he can approve of the basic scheme which results in a commercial timber yield of well over 1,000 m3 per hectare. A timber yield of 1,057 m3 per hectare, that is what Huizinga is going for, and he will attempt to do better still. This should be easily attainable."

Flor y Fanua's legal representative F.H.J. van Schoonhoven then continues with the presentation of a basic scheme 3:

"In conclusion, more minimal [author's note: yes, that is what is written because the basic scheme 1 has already been depicted as minimal projection of expected yields] assumptions than those used for the basic scheme are not justified by the findings of bailiff Groot. But still, in order to arrive at a scheme with even lower values, the initial diameter is lowered with half a centimeter to ten centimeters (instead of 10.5 centimeter) and the annual increment is lowered to one and a half centimeter (in stead of 1.7 centimeter). The following picture then emerges:"

BASIC SCHEME 3

For reasons of economy of space, the full table is not presented here. The main results are: Mean diameter increment of 1.5 cm/yr results 34 cm at year 20 Usable tree height at year 20 is 20 m Total tree loss is 240 trees/ha Total yield is 867 m3/ha (MAI=43.35 m3/ha)

"From basic scheme 3 it appears that an even further reduction of the already low points of departure lead to a yield per hectare that is within the margins as they were presented in the calculated examples by Huizinga and OHRA."

-end of court presentation by F.H.J. van Schoonhoven-

Notes on the data OHRA and Flor y Fauna presented in court:

The Ministry of Agriculture's report on the Flor y Fauna teak plantations informs that: "In WWF-NL's commission, the FYFSA plantations were checked in 1992, by an environmental consultant (Masterson, 1992), against the Forest Stewardship Councils' Principles."

Prof. Dr. Ir. R.A.A. Oldeman notes on February 17, 1996 (excerpts):

"After careful study of bailiff Groot's report on the teak plantations of Flor y Fauna in Costa Rica (Nov. 1993) and the appended declaration of a former student of mine named Ir. Wouters (Dec. 1993), and the derived written memorandum of pleading in a case [Flor y Fauna + OHRA + Huizinga + Natura Bergum] versus van Weezendonk (Dec. 1993), I summarize the value of the joint papers as follows. Forty trees out of 2 million were measured, this amounts to one in 50,000. From this, values for mean diameters are calculated within a margin of one tenth of a millimeter (e.g. 12.06 cm). This is comparable to measuring the body length of 300 Dutch people (1 in 50,000) and to determine that the average Dutch person's body length would be 1 meter and 76 cm and 6.2 mm.

-THE SAMPLING SURVEY IS NO GOOD.

-THE ERRORS OF MEASUREMENTS ARE NOT RATED.

-THE SOURCE OF THE MEAN RATED HEIGHTS IS OBSCURE AND THEREWITH THEIR RELIABILITY IS VERY LOW.

-THE SLIPSHOD USE OF CORRECTION FACTORS AND (SO-CALLED HARVESTABLE) HEIGHTS HAVE INTRODUCED SERIOUS ERRORS INTO THE CALCULATIONS.

-THE YIELD TABLES, AS INTRODUCED IN THE WRITTEN MEMORANDUM OF PLEADING, LACK ANY, I REPEAT ANY, BEARING ON REALITY.

-THE ERRORS THAT HAVE BEEN MADE ARE AT THE LEVEL OF SECONDARY FORESTRY TRAINING WHERE, AS A RULE, SUCH ERRORS ARE CONSIDERED UNACCEPTABLE.

In conclusion, I point out the substantial damage to the national and international reputation of Dutch forestry and nature conservation, to the credibility of the Dutch civil service as an instrument of policy-, certification-, and project- making, and to the investors who have been lured towards the teak investments through the media; all of this brought about by the OHRA/Flor y Fauna teak affair. The most impacting long-term damage of all will hit the tropical forests. As a result, their preservation will be taken far less serious."

On the Ministry of Agriculture's report, Professor Centeno notes on June 20, 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."

CHAPTER 4
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       Compiled Comments on Flor y Fauna's Projections:
       ------------------------------------------------
a) In a letter to WWF-NL and OHRA of November 11, 1995 (which was made public for the Standards Advertising Committee's hearing on May 9, 1996) Flor y Fauna's Pablo Camacho states that:

"Since early 1995 I have been part time employed by Flor y Fauna. As part of my work for Flor y Fauna I am responsible for collecting growth and yield data of the teak plantations set up since 1989."

"At the request of Flor y Fauna I have analyzed the growth data from a series of selected sites in TEAKWOOD III, IV, and V that are best comparable with the sites of the TEAKWOOD VI plantation. The initial growth figures for TEAKWOOD VI (planted in 1993) have also been analyzed again using data recently collected."

"Based on all these data it is my professional judgement that the yield that can be achieved on the OHRA/TEAKWOOD VI plantation will be approximately 700 cubic meters per hectare over the 20 years rotation. Similar growth figures are expected for TEAKWOOD VII, and VIII plantations." "I have been informed that Flor y Fauna has indicated a range for the expected yields to range between 400 to 850 m3/ha over the 20 year rotation. Based on the current growth data and the current development of the plantations there is no doubt that the yield prediction of the various stands will fall in this range." -end-

b) Prof. Centeno comments on June 20, 1996:

"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!" -end-

c) In a message to Prof. Centeno 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..."

OHRAs adjunct Director H. Janssen denies this in a statement to 'Het Financieele Dagblad (NL's financial daily newspaper) on May 7, 1996. Janssen 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."

d) On January 28, 1996 OHRA's Director of the Board Huesmann informs the Associated Press of The Netherlands, ANP, that: "The yield of the first plots that Flor y Fauna started eight years ago is exactly conform the expectations. Investors that have joined have meanwhile received their first share of the profits [note: to the best of Treemail's knowledge, these first shares of the profits were not yet received by investors at the time of the writing of this paper]."

e) On March 4, 1996, OHRA and WWF-NL present an 'executive summary' of a report by CCT to the press. The summary presents data on attained growth based on measurements provided by Flor y Fauna. The reported MAI for Teakwood I (at age 6) is given as 17.38 m3/ha, and for Teakwood II (at age 5) as 14.48 m3/ha.

f) In the Flor y Fauna info-sheet to investors of April 28, 1996, called 'Teakwood Info' the following information can be found:

"The thinnings for TW I - V are completed, and in TW VI a partial thinning was executed."

"Thinnings in TW I - VI have produced 65 cubic meters of sawn timber. This yield is not high because it was mainly a purification, which means that all the poorly growing trees were removed. Only the stems with a diameter of > 8 centimeters were sawn. Smaller diameters go to the turnery to be processed into table-legs, chair-legs, lamp posts etc."

The Dutch language summary of the CCT report informs: "FyF has started storage and maintenance of the trees with a small diameter, which are produced during thinning of the plantations. The tree stems are still waiting for a suitable demand."

CHAPTER 5

                            -------
                            The End
                            -------
Flor y Fauna's information sheet 'Teakwood Info' of April 28, 1996, informs the investors that the projected date of thinnings has been advanced and that the yield is lower than expected. Thinnings have been initiated for Teakwood VI, according to the same Teakwood Info. This implies that, for Teakwood VI, the thinnings have been advanced from the anticipated year 8 to year 3. This is by no means a small margin!

The rationale for a possible advancement of the Teakwood thinning schedule is in the case of trees growing faster than expected, according to Flor y Fauna's court presentations. However, according to the information provided in Teakwood Info, this condition is not met. In fact, Flor y Fauna has informed that the yield is lower than expected. At least one alternative rationale for such drastic advancement of thinning schedules as Flor y Fauna now reports for the Teakwood VI plantation is well known in forestry; and this is when the thinnings are primarily required as a phytosanitary measure.

After having projected timber yields in the order of 1,000 m3/ha in sales brochures for Teakwood I-V and VI, and after having substantiated these figures in court, Teakwood's present attempts at demonstrating that they have never portrayed any other yield range than 400-800, or 400-850 m3/ha remain unconvincing and they are in flagrant contradiction to the very materials that the OHRA itself has presented as exhibit before the Standards Advertising Committee (i.e. the March 1993 sales brochure). The first utterance to outsiders of the latter figure appears to have been by OHRA in a letter to NOVA on November 30, 1995 (see separate agenda).

OHRA's latest 'infomercial', Vast en Zeker of Spring 1996, repeats the same range of mean diameter increments as those given in the original sales brochure for Teakwood VI of 1993. In forestry, there is a conversion factor named 'form factor' that provides a linear relationship between stem-diameter and stem-volume. Even if this conversion factor is invariably depicted as 'cylinder correction' by Flor y Fauna, the fact remains that this is a constant for any given seed provenance and its value can be found in any serious teak volume table for the provenance of the trees planted by Teakwood (see the full text of the Declaration by Prof. Oldeman of February 17, 1996).

If the Teakwood trees would demonstrate a decrease of expected yields from 1,000 to, say, 500 m3/ha while maintaining the same diameters, this would imply that the form factor would have halved. This portrayal of calculous is reminiscent of [.....]. Such unusual growing behavior is arguably typical for car antennas and telescopes, but it is not likely to occur with trees, not even with teak trees.

The Rainforest Alliance's Smart Wood Programme has certified the Flor y Fauna plantations in 1995. This was done on the basis of yield forecasts of 1,001.50 m3/ha for Teakwood I-V (MAI=50.07 m3/ha). In the case of the plantations of Teakwood VI-VIII, the certificate endorses a range from 933.74 m3/ha for Teakwood VI-VIII (MAI=46.69 m3/ha) to 1,129.69 m3/ha (MAI=56.45 m3/ha).

Basically, only three reports were ever presented by the Teakwood partners in substantiation of the yield predictions. These are: a) the bailiff report of 1993, b) the Ministerial report by Mr. Wouters, and c) the CCT 'executive summary' presented in March 1996 [note: All three reports were produced after OHRA and WWF-NL had joined the programme. The Rainforest Alliance presented its first audit report during the mission of Wouters and the bailiff; according to the Ministerial report that is].

ad a) The bailiff's report and tables have been convincingly dismissed as statistically invalid and as entirely irrelevant to the formulation of yield projections.

ad b) The Ministerial report states on page 2 that its conclusions and findings are for the Ministry's internal use only. What is more, two years after its publication, it surfaced that the report had been prepared by the President of Flor y Fauna's Scientific Advisory Board [note: see agenda on main events for details]. As to the author's endorsement of the bailiff's findings, see ad a) above.

ad c) For the hearing at the Standards Advertising Committee's of July 18, 1996, OHRA has announced that the CCT report has not been finalized, and that it can therefore not present the full text of the CCT report. This does not bode well with regards to CCTs methodology, as executive summaries are supposedly written only after a main text body is finalized. Even so, the executive summary informs: "The company has reported data on teak volume yields and increments higher than those reported for teak in Costa Rica and other countries." According to CCT's 'executive summary', these figures that are higher than anything ever reported, result in an endorsement of an expected cumulative log volume "from some 400m3 to 800m3".

From this it can be deduced that Flor y Fauna acknowledges that in order to attain growth figures within the range of 400 to 800 m3, cumulative log volume will have to surpass anything ever recorded prior to the presentation of the CCT 'executive summary' in March 1996. Notwithstanding, Flor y Fauna has advertised Teakwood I-V with cumulative log volume projections of 1,001.50 m3/ha. This notwithstanding, OHRA has advertised Teakwood VI with projections ranging from 933.74 to 1,129.69 m3/ha.

Investors have at no point in time been informed of the staggering magnitude by which 'anything ever recorded on teak growth in Costa Rica or other countries' would have to be surpassed in order to attain such projections. Quite to the contrary: the sales brochure for Teakwood VI assures the investors that the projections are arrived at "on the basis of publications and research in the region".

At this point, it is relevant to look into the Smart Wood Programme's 'Guidelines for assessing forest plantations, revised draft of October 1993. The chapter 'Generic information and criteria for forest plantations' outlines requirements that have to be fulfilled in order to obtain a Smart Wood certificate: "Growth and yield projections in planning and/or marketing documents are reasonable and based on a combination of scientific literature and documented or practical local experience." However, it is precisely this type of documentation that CCT claims to be non-existent. Is this perhaps the reason why Teakwood has never presented such documentation; not in court, not to NOVA journalists, not to the media, and possibly not even to the Rainforest Alliance as would be required under the Smart Wood criteria for certification of forest plantations?

On at least three counts, Teakwood can be perceived as having the responsibility to base its yield projections on scientifically valid data:

1. The text of the Teakwood brochure of 1993, in section 4.2, states that increment projections are arrived at "on the basis of publications and research in the region".

2. The Smart Wood Programme's 'Guidelines for assessing forest plantations, revised draft of October 1993, chapter 'Generic information and criteria for forest plantations': "Growth and yield projections in planning and/or marketing documents are reasonable and based on a combination of scientific literature and documented or practical local experience."

3. As the Teakwood contract partners all claim that the Flor y Fauna plantations are managed according to the FSC Principles and Criteria [note: see agenda of main events for details], Flor y Fauna is required to operate within the accredited Smart Wood Guidelines. This is all the more acute, now that the FSC Director T. Synnott has expressed to WWF-NL in a letter of January 30, 1996, that: "The FSC expects to extend accreditation to cover plantations in the very near future."

Arguably, there is a fourth count by which Teakwood contract partners are bound to base yield projections on scientifically valid data and regional research. This would be out of their shared responsibility and respect towards the investor. But that, of course, remains a matter of perception.

Treemail urgently calls upon all those involved in the Teakwood debate to consult and adhere to the Society of American Foresters' Code of Ethics. It is a mighty fine document.

Treemail (full copyright)
Prins Bernhardlaan 37
6866 BW Heelsum
The Netherlands
tel & fax: +31 317 314860
E-mail: treemail@vr.nl
NL Chamber of Commerce: 09088647
NL Vat registration: 0929 26 502 B 01

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Subject: Teakwood's agenda of events

	AGENDA of Main Events
	subject: Teakwood
	author: Paul Romeijn
	date: July 18, 1996


                         INTRODUCTION
                         ------------
This agenda is made to serve as a reference sheet to those who follow the public debate on the Teakwood programme. It highlights some of the materials on file at Treemail's office.

Although the materials have been compiled and translated with due care, Treemail fully disclaims any responsibility as to the correctness of its contents and refers the readership to the original documents.

(Introduction-Section A)
The principal players in the debate:
------------------------------------
Teakwood:

This is an investment programme in teak plantations in Costa Rica. The programme was started in 1989 by Dutch owned Flor y Fauna S.A. who independently sold the projects called Teakwood I-V to Dutch investors until 1993. In 1993 Flor y Fauna was joined by OHRA insurance company and WWF-NL for the plantation projects called Teakwood VI, VII and VIII.

The principal Teakwood contract partners are: Van Rossum van Veen of The Netherlands as chief advisors to the Teakwood programme; Flor y Fauna S.A. of Costa Rica as managers of the plantations; OHRA insurance company to operate as a sales agency for a financial product that ties the teak investment to a life insurance policy; and WWF-NL (The Netherlands branch of the World Wide Fund for Nature) as endorsing agency with an important PR and sales function (e.g. the sales brochure of 1993 refers to WWF's role in sale of Teakwood's end-products as: "Of course, a buyer must be found for this product in advance. The collaboration with WWF will make this easier and can probably lead to even higher returns for the investors, according to the programme's initiators." The Teakwood VI brochure portrays the WWF Panda logo on its cover).

Rainforest Alliance:

The Rainforest Alliance is based in the USA, and has certified the Flor y Fauna plantations in 1995. The Teakwood plantations were thereby recognized as 'well-managed' under the Rainforest Alliance's 'Smart Wood' programme, thus allowing the plantation's produce to carry the 'Smart Wood' label.

FSC:

The Forest Stewardship Council was established as a legal entity on October 25, 1995, is based in Mexico, and accredits certifying agencies. As of end of February 1996, the FSC has accredited the first four certifying agencies, including the Rainforest Alliance. This accreditation does not include plantation forestry at the time of writing of this agenda.

Prof. Dr. J.C. Centeno:

WWF-NL commissioned a report on the economic analysis of the Teakwood plantations in 1993 to Prof. J.C. Centeno of Venezuela.

Treemail:

The Dutch television programme NOVA approached Treemail, a forestry advisory company based in The Netherlands, to provide information for a broadcast on the Teakwood programme. In the programme, NOVA interviewed Treemail's Director Paul Romeijn.

(Introduction-Section B)

The incorrect claim to an 'FSC certificate':
--------------------------------------------

One key-issue of the debate is the claim to a certificate for the Flor y Fauna plantations supposedly issued by the Forest Stewardship Council.

This claim was made by Flor y Fauna at the occasion of a court hearing on December 28, 1996.

This claim was made by WWF-NL in a book that was written, printed and put in circulation in 1995 (ISBN 90-74595-07-3). The WWF book is adorned by the (new) FSC accreditation logo on its front cover.

OHRA printed and distributed this claim millions of times in its advertisements over the period between August 19, 1995 and November 30, 1995, according to its own memo of February 2, 1996.

Before, during and after this period, another version of these advertisements for the Teakwood investment scheme was circulated. The sole difference between the two versions is that the text 'Rainforest Alliance' replaces the text 'Forest Stewardship Council' when referring to Teakwood's certificate.

In the advertisement, the text under the header Eco- Certificate reads as follows: "The Teakwood plantation Flor y Fauna has recently received the official certificate of 'well managed' plantation from the Forest Stewardship Council (or the Rainforest Alliance, depending on the version), and is thereby the first have plantation grown tropical timber with an eco-certificate."

This agenda does not deal with the reference to an 'eco- certificate' for Flor y Fauna, of which Treemail is not aware of any substantiation by the Teakwood partners. This agenda refers only to the claim of the Flor y Fauna plantations having been 'FSC-certified'.

The (draft) 'Manual for evaluation and accreditation of certification bodies' of January 1996 (FSC Document #2.1), on page 86, states that type of use of the FSC accreditation logo as in the WWF publication "can only be made with prior, written consent of the FSC." The FSC announced this accreditation logo in FSC Notes of January 1996, Vol.1, Issue 2, where it reads: "correct use is controlled by legally binding contracts and will be protected by legal action."


                TEAKWOOD AGENDA OF MAIN EVENTS
                ------------------------------
[note: near to all the written communications referred to below have been transmitted per E-mail or fax]

1995

23-11     NOVA broadcasts Teakwood over Dutch national
          television.

24-11     The Greens in the Dutch Parliament submit 6
          questions on the Teakwood case to Ministers of
          Agriculture and Finance.

30-11     OHRA informs NOVA in writing that expected yields
          are in the order of 400-850 m3/ha over the 20 year
          cycle, and this is "without doubt" according to
          their scientists.

01-12     OHRA's Board Director Huesmann writes personalized
          letter to Teakwood investors where he projects 11-
          25% rates of return to investors.

06-12     Van Weezendonk files case of misleading
          advertisements against 5 teak investment schemes at
          the Standards Advertising Committee. OHRA requests
          and receives time for refuting, this allows for
          preparation of CCT summary report.

10-12     Prof. J. Centeno reports to FSC Director T. Synnott
          on possible claim to FSC certification having been
          made for the Flor y Fauna plantation.

18-12     Treemail presents WWF-INT forestry officer Per
          Rosenberg a video copy of the NOVA broadcast and of
          one of the OHRA advertisements containing the claim
          to 'FSC certification' obtained by the Flor y Fauna
          plantation (and as reported by Treemail to FSC
          Director T. Synnott on December 20, 1995, and to SW
          Director R. Donovan on January 7, 1996).

20-12     Ministers of Agriculture and Finance answer to the
          questions from the Greens in Parliament of November
          24, 1995.

20-12     FSC Director T. Synnott phones to Treemail's office.
          The fictitious claim 'FSC certified' for the Flor y
          Fauna plantations is discussed at length. During the
          conversation T. Synnott ascertains and is assured
          that Treemail perfectly understands the terminology
          'endorsed', 'accredited', 'certified' and the
          distinction between 'a possible claim to FSC or
          Smart Wood certification' and that there is mutual
          agreement that there is no misunderstanding
          whatsoever about the exact nature of the fictitious
          claim [note: witnessed by G.Ch. Kiel, international
          forestry expert, at Treemail office].

21-12     OHRA's adjunct Director Janssen informs Treemail per
          fax that copies of the FSC certificate can be
          obtained from Flor y Fauna, in response to a request
          by Treemail to OHRA of December 15, 1995.

21-12     Following the telephone conversation of December 20,
          1995, FSC Director Synnott informs Treemail per fax
          that "the FSC Board cannot yet approve the
          certificates for plantations in the absence of the
          new Plantation P&C.", and: "We believe that the Flor
          y Fauna evaluation and report was thorough and
          competent."

28-12     Court case Flor y Fauna S.A. against Van
          Weezendonk's reputed libel in his statements in NOVA
          broadcast. in The Hague. Tomlow, Van Weezendonk's
          legal advisor, distributes notes to court, including
          a copy of the 'Centeno report' to journalists. Flor
          y Fauna claims 'official FSC certificate' for their
          plantations in court (which Treemail reports to FSC
          Director T. Synnott on same day). At the hearing,
          Flor y Fauna did not once mention an organization
          called Rainforest Alliance, or its 'Smart Wood'
          certificate.

1996

05-01     Le Vif/L' Express reports that tropical tree
          investments schemes have been spreading into
          Flanders, and are now active in the French speaking
          part of Belgium.

07-01     Treemail informs Smart Wood Director, with copy to
          FSC Director, that: "I regret to inform you that
          your interventions have not succeeded in preventing
          F&F stating in court on 28 December 1995 that F&F
          plantations have been officially certified by the
          FSC ...". This letter is later referred to by the
          Smart Wood Director as part of the listing of
          communications of January 28, 1996 [note: cross-
          reference with FSC announcement of June 25, 1996].

08-01     FSC Director T. Synnott copies letter to SW Director
          R. Donovan to Treemail office. Quote: "I expect you
          will be asking OHRA why they stated in public that
          the F&F plantations have been certified by the
          FSC.", and: "Richard: I expect that this issue can
          be sorted out without too much harm. We also
          anxiously await your decision on whether the
          Rainforest Alliance is willing to sign the
          [accreditation, Treemail's note] contracts.", and :
          "Paul: Thank you very much for keeping us informed,
          and for working at damage-control."

10-01     Ruling on case Flor y Fauna versus Van Weezendonk,
          libel case dismissed, and judge condemns Teakwood to
          cover legal costs.

10-01     Van Weezendonk adds incorrect FSC certification
          claim for the Flor y Fauna plantations to his
          complaint at the Standards Advertising Committee.

10-01     Prof. J. Centeno suggests to FSC Director T. Synnott
          to the FSC should request a public disclaimer from
          the Rainforest Alliance to the effect that the
          certificate they issued does not in any way imply an
          endorsement by the FSC; with copy to SW Director R.
          Donovan.

19-01     Ir. P. Hulsebosch reports to the internet forestry
          list about a red code (ie instructions to remain
          silent) issued by DGIS to Costa Rica based sector
          specialist for the environment Ir. J. Bauer. This
          was never refuted by DGIS, or by its forestry
          advisors at IKC-NBLF (part of the Ministry of
          Agriculture) who are subscribers to the list.

23-01     Coordinator W. Kloppenburg of the Foundation BOS
          makes written suggestion to OHRA to 'reconsider the
          financial product Teakwood' [note: co-reference the
          agenda's entry for January 31, 1996].

23-01     Prof. J. Centeno writes to FSC's Board Director B.
          Cabarly that: "It seems appropriate in this case for
          the FSC to request a public disclaimer from OHRA.
          The lack of reaction by the FSC to these statements
          [note: this refers to the fictional claim to FSC
          certification for the Flor y Fauna plantations] can
          only be considered an endorsement by the FSC of
          OHRA's untruthful claim."

25-01     Prof. J. Centeno requests support from Minister
          Pronk of The Netherlands for an opportunity to speak
          in The Netherlands, and this request is copied to
          HRH Prince Bernhard.

27-01     Press release "Setting the record straight, the teak
          sword swings again" by Prof. Dr. J.C. Centeno
          distributed to ANP, The Netherlands Associated Press
          service. This press release includes reference to
          the incorrect claim to FSC certification for the
          Flor y Fauna plantations. The press release is
          circulated over the internet forestry list.

28-01     Smart Wood Director states in generic letter to have
          "seen no documented evidence that they have
          represented the certification in any other way."
          when referring to possible claim to "FSC
          certification' made for the Flor y Fauna plantations
          (instead of 'Rainforest Alliance certified'). This
          letter was copied to Treemail's office per fax on
          January 30, 1996, and to Prof. J. Centeno's office
          on February 1, 1996.

29-01     FSC Director T. Synnott informs Treemail in a fax
          message that: "It is unfortunate that OHRA referred
          to the plantations as being FSC certified. The
          expression FSC certified is inaccurate and
          premature. The possibility of a certified enterprise
          making misleading public claims is in first
          instance, a matter for the certifier. Therefore
          Rainforest Alliance is pursuing the matter, in close
          communication with the FSC [ref: agenda entry for
          March 11, 1996 and June 25, 1996]."

30-01     Treemail sends a copy of advertisement to FSC
          containing the incorrect FSC certification claim,
          with notification to Smart Wood Director R. Donovan
          (who received similar copy faxed directly to their
          office on February 2, 1996; also see notes in this
          agenda of January 28, 1996 and March 11, 1996). The
          letter states: "I hope we can all agree that as of
          this moment further ignorance of this OHRA claim in
          their advertisements will be labelled as silly by
          all others from now till ever after."

30-01     FSC's Director T. Synnott informs A. van Kreveld and
          W. Braakhekke, both WWF-NL, in a fax ("designed for
          your support and use, as appropriate", according to
          the letter) that: "The Rainforest Alliance Smartwood
          Program is one of four certification programs which
          the FSC has evaluated and approved for accreditation
          as an independent certification body", and:
          "Accreditation contracts will refer only to
          certification of natural forests."

31-01     WWF-NL Director of Conservation W. Braakhekke
          communicates to Professor Centeno (with copies to
          HRH Prins Bernhard of The Netherlands, Minister
          Pronk, WWF-NL Chairman Nijpels, FSC and Rainforest
          Alliance) that WWF-NL research has failed to
          identify one single instance of Flor y Fauna claim
          to a certification by the FSC [note: This is
          precisely the issue of a complaint before the
          Standards Advertising Committee, as per January 10,
          1996]. This letter is later made public by OHRA's
          use in defence before a hearing at the Standards
          Advertising Committee on March 26, 1996.

31-01     OHRA threatens Stichting BOS with legal action [see:
          this agenda's note of January 23, 1996].

01-02     Internal OHRA memo counts well over 1.5 Million
          incorrect advertisements of FSC certification for
          Flor y Fauna plantation, and a mailing of 127,000 to
          potential investors.

04-02     "Teak controversy flares up in The Netherlands"
          distributed over forestry list by Prof. Dr. J.C.
          Centeno.

05-02     OneWorld Online publishes "WWF endorsed teakwood
          scandal hits tropical timber market" on
          http://www.oneworld.org/

06-02     OHRA threatens Prof. Dr. J.C. Centeno with legal
          action.

06-02     FSC Board decides to ask the FSC Secretariat to
          request correction from OHRA and WWF-NL for
          incorrect claim to FSC certificate for Flor y Fauna
          plantations "in their respective brochures and other
          places where the original misstatements circulated
          [note: consult agenda entry for April 3, 1996, on
          how this Board decision is reflected in
          correspondence from the FSC Secretariat to OHRA]".

07-02     The Greens in the Dutch Parliament submit second
          round of questions on the Teakwood case, this time
          to Ministers of Agriculture, Finance and Foreign Aid
          [note: see agenda entry for March 29, 1996, for
          Ministerial response].

09-02     Prof. Dr. J.C. Centeno takes up residence at Tomlow
          lawyers office in the Netherlands to facilitate
          legal action to be taken by OHRA.

09-02     WWF spokesperson Marie Christine Reusken states in
          articles of GPD (e.g. as reported in the newspapers
          'De Brabander' and 'De Gelderlander) that "Flor y
          Fauna received a certificate from the Forest
          Stewardship Council in Mexico."

12-02     Treemail distributes extra info on "Teak controversy
          in The Netherlands" over the forestry list. This
          message contains excerpts from the 1993 bailiff
          report and Flor y Fauna's provisional yield table.

15-02     Elsevier Magazine states: "Flor y Fauna is the first
          teak plantation that supposedly received a
          certificate issued by the so-called Forest
          Stewardship Council, FSC. The claim is important,
          for such a certificate would furnish the project
          with the essential credibility. In addition, WWF-NL
          has made swift certification conditional to joining
          the Teakwood programme. All the more painful to
          mother organization WWF and WWF-INT that, as it
          appears now, the claim is untrue. OHRA, Flor y
          Fauna, nor any other party involved can claim an FSC
          issued certificate." and: "Salient detail: WWF is
          one of the main sponsors to the FSC."

18-02     Distribution over the forestry list of excerpts from
          Professor Oldeman's "Notes on measuring procedure
          'Huizinga & Groot'".

21-02     FSC announces accreditation of the first four
          certification bodies. Plantation forestry is
          explicitly excluded from this FSC accreditation.

22-02     FSC Director T. Synnott announces launch of the
          worldwide FSC timber logo (for independent eco-
          friendly forest products) on RTL-4 Dutch television
          news broadcast.

22-02     Smart Wood Director R. Donovan releases an open
          letter entitled 'preliminary comments on Centeno
          observations and Rainforest Alliance certification
          of Flor y Fauna'. For months on end, R. Donovan
          fails to communicate a copy of this open letter to
          Professor Centeno in spite of repeated requests, and
          even though this document clearly states "cc: Julio
          Centeno".

          This open letter states: "We request that any
          individual contact us if they have specified
          DOCUMENTED situations where misleading information
          is being presented on either Smart Wood, the FSC or
          Smart Wood certification on Flor y Fauna. Please
          contact us immediately. To be fair to all concerned,
          verbal statements are not sufficient; we need
          documented evidence [ref: agenda's entry of January
          30, and February 2, 1996]."

24-02     Article "Blasting the FSC in The Netherlands"
          distributed over forestry list by Prof. Dr. J.C.
          Centeno.

01-03     Intermediair (weekly) reports shipment of 'FSC
          certified timber' to have been unloaded at Rotterdam
          ports, reports 5 Million ha of FSC certified forests
          worldwide, and in same article interviews Gemma
          Boetekees (FoE-NL, and later FSC-NL office holder)
          and Arnold van Kreveld (WWF-NL).

04-03     Teakwood press conference hosted by OHRA and WWF-NL,
          in presence with Costa Rican Minister of Environment
          and Energy R. Castro. Presentation of CCT summary
          report and KPMG report.

06-03     Costa Rica's Prime Minster J.M. Figueres and
          Minister of Environment and Energy R. Castro joins
          in with Teakwood representatives at a round table
          conference on "Reforestation investments in Costa
          Rica", organized in cooperation between the Costa
          Rican Embassy in the Netherlands and the foundation
          Eco Operation (DGIS funded institution to execute
          the bilateral environmental treaty between the two
          countries).

08-03     The Tico Times, an English language newspaper for
          Central America, publishes an interview with
          Rainforest Alliance's Smart Wood Director R.
          Donovan. Quotes: 'Smart Wood now admits it didn't
          investigate the company's financial projections and
          its advisors are disputing the plantation's growth
          projections. Donovan said he believes Flor y Fauna's
          higher projections are not realistic, but that "the
          lower rates are possible".' and: 'Donovan confessed
          that he himself would have doubts about investing
          with OHRA in a teak farm in Costa Rica.'

11-03     FSC publishes public statement on certification,
          which includes a reference that any claim to
          plantations being certified by FSC to be a 'double
          mistake'.

11-03     Smart Wood Director R. Donovan releases statement on
          Flor y Fauna certification, with a copy to the
          forestry list. Here the Smart Wood Director again
          claims not to have been able to identify a single
          document containing a claim to 'FSC certification'
          after having studied the materials [see notes of
          January 28, 30 and 31, and February 22, 1996)]. R.
          Donovan adds to be "in almost daily contact with the
          FSC Secretariat" over the Teakwood case [also
          consult with agenda entry for May 11, 1996].

          The statement claims: "Smart Wood is now working to
          verify Flor y Fauna's advertising claims with
          respect to FSC and/or Smart Wood. If deliberately
          misleading claims have been made by others, then
          appropriate actions will be taken." 

          [note: The Smart Wood Director here reiterates the
          impression that it is Smart Wood and not the FSC
          that is investigating the incorrect claim of FSC
          certification for the Flor y Fauna plantations. This
          is congruent with a letter by FSC Director T.
          Synnott to Treemail of January 29, 1996. However,
          the FSC issues a public statement on June 25, 1996
          to the contrary. There the FSC announces that only
          the issue of the growth and yield projections "is
          being dealt with by the Rainforest Alliance".]

12-03     "World record on teak yield: truth or trickery?"
          distributed over forestry list by Prof. Dr. J.C.
          Centeno.

29-03     Ministers answer to second round of questions from
          the Greens in the Parliament. Minister of Finance is
          not willing to exert control over teak investment
          schemes. Workshop on Dutch plantation investment
          schemes in developing countries as commissioned by
          DGIS to the Foundation BOS is cancelled. Prof. J.C.
          Centeno is not invited to The Netherlands by
          Minister Pronk [note: At the time of publication of
          this agenda, DGIS still fails to communicate the
          nature of this decision to Prof. J.C. Centeno. Cross
          reference this agenda's entry for January 25, 1996].

03-04     FSC Director T. Synnott informs OHRA on the claim to
          FSC certification for Flor y Fauna that: "We urge to
          ensure that statements of this kind are withdrawn
          immediately. [see agenda entries February 6, 1996
          and of June 25, 1996]"

12-04     Treemail communicates to key-FSC Board members and
          the FSC Secretariat [cross reference: FSC statement
          of June 25, 1996]:

          "End of December 1995 Tim Synnott phoned our office
          and convinced himself that I understood perfectly
          well the distinction between certification and
          endorsement, which is not too hard for someone who
          was brought up bi-lingual and was later trained as a
          tropical forester. I have never, to my knowledge,
          confused these terms neither in English or in Dutch.
          We have seen many euphemisms used to smoothen
          mis-information produced intentionally by F&F,
          WWF-NL, OHRA and van Rossum van Veen, including some
          of these statements originating from Oaxaca.
          Examples of such statements are: unfortunate,
          premature, mistake, slip of the pen, and now
          possibly a language difficulty. 

          Intentional? Yes, because even after being
          confronted with the misleading nature of the
          statements, WWF-NL -as I quoted- still maintained
          use of FSC certified to the press. And yes, since
          WWF-NL brochure, OHRA advertisements and F&F
          statements in court skipped any mention of RA when
          elaborating the subject. Nor will it suffice for RA
          to investigate Flor y Fauna advertisements, since we
          all know quite well that advertising for Teakwood is
          done by OHRA, and not by Flor y Fauna. And even more
          yes, since Teakwood is backed by a scientific
          advisory board whose members are all perfectly
          capable of understanding these issues and of
          handling any of the possible language barriers
          between Dutch and English that you refer to. Also,
          this hide and seek game was prolonged for months as
          parties were unable to find statements produced by
          OHRA and WWF-NL that were printed and distributed
          over 1,500,000 times or to verify statements made in
          court; and is apparently even maintained after
          Treemail faxed copies of same to RA and FSC."

14-04     Wageningen University Newspaper, WUB, publishes
          major article on Teakwood.

15-04     A.J.M. Wouters is advanced to the much higher
          position of interim Director of the Directorate
          Science and Knowledge Transfer of the Ministry of
          Agriculture, Nature and Fisheries, a key position
          for controlling these budget lines for the
          Agricultural University of Wageningen and the
          cluster of agricultural research institutions 'DLO'
          (ref: 'Wagenings Alumniblad', June 6, 1996).

          A.J.M. Wouters is the author of an official report
          on the Teakwood plantations by the Ministry of
          Agriculture. Meanwhile, it has surfaced that he is
          also the President of Flor y Fauna's scientific
          advisory board. The fact of this collaboration was
          not declared when the author presented his
          declarations of support of the Teakwood programme
          before several courts. The Ministerial report has
          lost its pretence of independence, as claimed by
          WWF-NL's Director S. Woldhek in a letter to the
          editor in the national newspaper NRC, published on
          December 30, 1993, where he announced this report as
          an "independent and professional evaluation of the
          project" [note: cross reference Treemail's
          publication over the internet forestry list of June
          5, 1996]. 

          Professor J. Centeno notes the following on this
          document (ref: The elusive nature of forest
          management certification claims, June 20, 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 (by Prof. Centeno): 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]"

          [note: also see this agenda's entry of February 18,
          1996]

16-04     Questions in Parliament to the Minister of Finance
          raised by VVD, a political party that is coalition
          member of the Dutch Government, as a result of
          publicity surrounding ostrich farming, diamond and
          teak investment schemes, and calling for effective
          control by the Minister [note: agenda entry on
          Ministers answers for May 30, 1996].

28-04     FSC's newly opened NL office sends generic mailing,
          with introductory letter of April 9, 1996. Enclosed
          in the mailing is a report on the FSC Board meeting
          of early February, with the Board's decision to
          request rectification of incorrect claim to FSC
          certification for Flor y Fauna plantations to WWF-NL
          and OHRA. Enclosed is the Smart Wood statement on
          certification of Flor y Fauna of March 11, 1996. The
          mailing does not contain FSC's March 11, 1996
          statement.

28-04     Symposium presentation by Paul Romeijn at University
          of Twenthe. DGIS representative and speaker at the
          symposium Ph.J. Bastiaenen informs symposium public
          that DGIS has had no ties or dealings whatsoever
          with Teakwood.

01-05     DGIS publishes an article entitled "OHRA does not
          mislead investors" [note: published in the May 1996
          issue of 'Internationale Samenwerking', the official
          magazine of the public information service on
          international cooperation from the Ministry of
          Foreign Affairs; cross reference with agenda's entry
          for May 9, 1996].

09-05     The Standards Advertising Committee rules on
          complaints against five teak investment schemes,
          including Teakwood.

09-05     Flor y Fauna submits their first and only
          contribution to forest mailing list, and announce
          circulation of an English translation of an article
          in Money "shortly" (which never materialized).

11-05     Francis Sullivan, WWF-UK, informs Treemail's office
          that: "I have been following these developments
          closely in my capacity as a member of the FSC Board
          and in view of the involvement of WWF Netherlands. 
          I understand that there is full involvement of all
          interested parties within Holland and Costa Rica and
          that a solution appears to be emerging [note: this
          may well be the solution emerging on June 25, 1996,
          as emergence at an earlier stage would still allow
          plaintiff at the Standards Advertising Committee to
          submit an exhibit of written evidence. Plaintiff can
          hereby only use a full 10 minutes. This is the time
          allocated to plaintiff for entire oral presentation
          before the Committee]."

20-05     Publication by Treemail of open letter to FSC's
          Director of the Board with question on independence
          of accrediting body (FSC) from timber producing
          entity (WWF-NL).

30-05     Ministry of Finance again rejects call for control
          of teak investments, in answer to questions by the
          VVD in Parliament (ref: NRC Handelsblad, May 31,
          1996).

05-06     Treemail publishes University of Twenthe Symposium
          presentation of April 18, 1996, over the forestry
          list.

12-06     WWF-INT declares ISO 14001 proposal "a sham
          certification system".

24-06     Publication of 'The elusive credibility of forest
          management certification claims' by Prof. J.C.
          Centeno over the forestry list.

25-06     FSC Secretariat makes a 'public statement' named
          "FSC/OHRA/WWF-Netherlands" available to OHRA and
          WWF-NL only (?) while referring to letter to OHRA
          referenced in agenda entry of April 3, 1996. This
          letter is used as exhibit by OHRA for the Standards
          Advertising Committee hearing of July 18, 1996
          [note: compare with agenda entry of February 6, 1996
          to see how the FSC Board decision on this subject
          has transpired into the FSC Secretariat's practice;
          and with the entry for May 11, 1996]; [second note:
          this 'public statement' by the FSC was copied to
          defendant OHRA, but not to plaintiff van Weezendonk
          or to anyone else that Treemail is aware of]. 

          In its 'public statement' the FSC Secretariat states
          that: "During the period August 1995 to January
          1996, a brochure published by WWF-Netherlands and
          several newspaper advertisements by OHRA linked
          FSC's name with the Flor y Fauna plantations and the
          Smart Wood certificate. They wrongly stated or
          implied that the plantations had been certified by
          the Forest Stewardship Council. These statements
          were incorrect on two counts, because the FSC does
          not carry out certification, and because the FSC
          does not yet endorse or recognize the plantation
          certificates issued by FSC-accredited bodies [note:
          the advertisements and the WWF publication referred
          to by the FSC Director contain no reference
          whatsoever to the Rainforest Alliance or its Smart
          Wood certificate and, in reality, only refer to a
          certificate issued by the FSC for the Flor y Fauna
          plantations]." 

          About OHRA, the FSC Director states that: "They soon
          discovered the error, but because of production
          times the statements appeared once more in a mailing
          distribution [note: the last time the fictitious
          claim was made in mailing distributions is,
          according to OHRA, November 30, 1995]." 

          FSC Director sums up: "The FSC concludes that the
          mistakes made by WWF-Netherlands and OHRA were
          unintentional", and that the FSC is therefore
          "satisfied" [ref: consult and compare this with the
          agenda's entry for July 18, 1996, and with the
          references given for that entry; also cross-
          reference with note on Smart Wood release date March
          11, 1996, and the entry for April 12, 1996]." 

          Please note the use of the key-word "UNINTENTIONAL"
          as the FSC Director's principal conclusion.

28-06     Het Financieele Dagblad (the Financial Daily)
          announces transfer for WWF-NL public relations
          director F. Strietman, as per September 1, 1996.

18-07     Standards Advertising Committee hears the appeal in
          the Teakwood case. OHRA presents in evidence a
          letter from OHRA adjunct Director Janssen of April
          24, 1996, to the FSC Secretariat. Janssen informs
          the FSC Director T. Synnott that: "Fairly quickly we
          discovered the error. As some leaflets were in
          production (with a lead time of some 8 weeks) these
          were issued in November 1995 with the same error in
          a limited mailing [note: compare with Flor y Fauna's
          position voiced on December 28, 1995]." 

          OHRA thereby claims to have become aware of its
          fictitious claim somewhere within the eight weeks of
          the lead time of end of November 1995 [note: for
          WWF's declared position see agenda entry dated
          January 31, 1996; and entry for February 9, 1996]. 

          For the same occasion, OHRA's legal representatives
          Ekelmans den Hollander write in defence on the
          certification complaint: "The mistake has been
          detected and corrected by the OHRA itself in January
          1996, before [note: the word 'before' appears
          underlined] the complaint was filed by van
          Weezendonk [ref: this complaint was filed on January
          10, 1996; consult entries in this agenda of June 25,
          1996 for FSC's conclusion and position, with note
          dated January 7, 1996, and with February 9, 1996 for
          WWF's subsequent comments to the media.]"

          In continuation, OHRA's legal representatives
          Ekelmans den Hollander write: "OHRA has always
          portrayed that it has been certified by the
          Rainforest Alliance." and: "OHRA stresses once more
          that it has itself discovered the mistake and that
          OHRA itself it has immediately corrected it itself."

Treemail (full copyright)
Prins Bernhardlaan 37
6866 BW Heelsum
The Netherlands
tel & fax: +31 317 314860
E-mail: treemail@vr.nl
NL Chamber of Commerce: 09088647
NL Vat registration: 0929 26 502 B 01

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