FSC Motion 20 Study on the Impacts of Large-Scale Forestry Operations in Global North and South

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1 FSC Motion 20 Study on the Impacts of Large-Scale Forestry Operations in Global North and South August 26, 2014 Report Authors: Alfredo Unda and Tawney Lem Commissioned by: FSC Policy Standards Unit

2 Acknowledgements The study authors wish to thank Chris van Dam, Luis Astorga and Grant Rosoman, authors of Motion 20, for their feedback throughout the project. Pasi Miettinen, FSC Program Manager, contracted the study authors; provided the Terms of Reference as well as other documents and information; contributed by requesting participation of LSFO companies worldwide; and provided translation of the Indigenous People and Stakeholders questionnaire in the Finnish language. His guidance and support was sincerely appreciated. Thanks are also extended to the 14 certificate holder respondents that replied to the survey; the 8 FSC National/Regional Offices which provided information and helped to distribute surveys; the 51 Certification Body (CB) respondents that provided information through the survey; the 3 Accreditation Services International (ASI) auditors that replied to the survey; and the 147 Indigenous People and stakeholders from several countries global North and South, who answered the questionnaires as well as those who also kindly participated in direct interviews and answered s. This study is a reflection of their experiences, knowledge and perspectives. Appreciation also goes to National Office staff and other individuals who provided translation services so the study questionnaires could reach, and be accessible, to as wide a range of people as possible. The study authors remain very much aware that the Motion 20 work is not finished, but it is hoped that the study will contribute to solutions that will strengthen both the performance and evaluation of LSFOs in the FSC system. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

3 Study Authors In October 2013, the FSC Policy and Standards Unit released a Call for Expressions of Interest seeking consultants to conduct a study on Motion 20. After a review the submitted letters of interest and CVs, FSC PSU assessed the candidates. Based on professional profiles and experience two specialists were selected and presented with background information and offers of engagement. Alfredo Unda is a forest engineer from Universidad de Chile, who also holds a Masters in Environmental Studies from York University, Canada. Mr. Unda has broad experience in environmental projects related to the forestry sector, including: participation in activities to develop FSC standards for Chile; serving as lead auditor, local expert and interpreter in Chile, Honduras, Canada, USA, Uruguay, Peru and other countries for several CBs and for ASI; and overseeing a project to prepare the ecological restoration guidelines and HCV guidelines to comply with the FSC standards in Chile for FSC-Chile. He is the local person responsible for Carbon sequestration projects in small-scale forestry plantations in Central Chile, which is registered in the Voluntary Carbon System (VCS), generating 1.6 million tco2 of compensation, diversifying the objectives and benefits of forestry projects. In the Instituto Forestal (Chile), Alfredo led the direction and execution of several environmental impact assessment studies of forestry investment projects; and has participated in a variety of agroforestry and social forestry projects in the Amazon basin countries like Brazil, Colombia, Ecuador and Peru, and in countries like Costa Rica, El Salvador, Haiti, Honduras and Nicaragua. Tawney Lem is a social scientist from Canada, who holds a Political Science degree from the University of British Columbia, and a Certificate in Dialogue and Civic Engagement from Simon Fraser University. Ms. Lem has been a contract lead auditor, or audit team member on over 55 pre-assessments, assessments, annual surveillance audits, Major CAR verification audits and gap analysis in Canada with Rainforest Alliance, and has served as a local expert for an ASI. She was also on the Controlled Wood Working Group for FSC Canada, and has participated in activities related to Standards development and revision in Canada. Tawney has worked with 30 Indigenous groups in Canada on projects including governance policy development, organizational development, strategic planning, land use planning, traditional use and occupancy studies, and consultation protocols. She has a strong background in facilitation, and has led numerous sessions focused on finding shared solutions within and between Indigenous groups, governments and civic sectors. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

4 Abbreviations AAC AIFBN ASI CAR CB CH CoC FAO FMU FSC GA GFA Ha HCVs HCVF IFL IGI IP ISO K M NCR NGO NO NTFP P&C PSU RA SA SCS SD SDG SIR Annual Allowable Cut Agrupación de Ingenieros Forestales por el Bosque Nativo Accreditation Services International Corrective Action Request also known as Non- Conformity Report (NCR) Certification Body Certificate Holder Chain of Custody Food and Agriculture Organization (of the United Nations) Forest Management Unit Forest Stewardship Council General Assembly GFA Certification Hectares High Conservation Values High Conservation Value Forests Intact Forest Landscapes International Generic Indicators Internet protocol International Organization for Standardization Thousand Million Non-Conformity Report also known as Corrective Action Requests (CARs) Non-governmental organization (FSC) National Office Non-timber forest products Principles and Criteria (FSC) Policy and Standards Unit Rainforest Alliance Soil Association Scientific Certification Systems Standards Development Standards Development Group Scale, Intensity, Risk Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

5 SLIMF SGS TOR UN UNDP UNDRIP USD Small or Low Intensity Managed Forests Société Générale de Surveillance Terms of Reference United Nations United Nations Development Program UN Declaration on the Rights of Indigenous Peoples United States dollars Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

6 Executive Summary At the FSC General Assembly in 2011, Motion 20 was passed: The GA requests FSC to commission a participatory study of the social and environmental landscape level impacts of large operations, with recommendations of best practice indicators and procedures. Motion 20 arose from the growing perception, especially from some members of the Social and Environmental Chambers, that the Principles and Criteria and existing certification procedures and processes are not sufficient to ensure responsible forest management in the case of Large or Big Operations. In their presentation, the authors of the Motion argued that Certification of large-scale operations and also small-scale certification has special characteristics. In the case of small-scale certification, special procedures and standards have been developed. In the case of large-scale operations, the mere application of the standards and procedures for field review and consultations with stakeholders is not sufficient to ensure that the operation fully meets the letter and spirit of FSC certification. There have been frequent complaints of large-scale operations, especially in the south. Moreover, the size of the operation often has an influence on whole towns and on local, regional or national policies and development. Therefore, it is necessary to analyse the certification of these large operations in more detail to see whether or not it is necessary to add some elements to the standards and procedures that make it possible to guarantee a proper FSC certification. (FSC Motion 20 Terms of Reference) Between January and August 2014, a study was carried out with the purpose of evaluating the potential positive and negative impacts of Large-Scale Forestry Operations (LSFOs). The study gathered data from Public Summary Reports of certified companies, as well as through questionnaires and interviews conducted with stakeholders, Indigenous Peoples, FSC National Offices, ASI, and company representatives. The study confirmed that LSFOs have unique characteristics that differentiate them from non-lsfos; both in terms of the nature of impacts they can generate, and in terms of what is needed to effectively evaluate their performance. These characteristics can also be quite different depending on whether the LSFO is plantation or natural forest. Findings are organized into five areas of enquiry: defining LSFOs, impacts of LSFOs, LSFO consultation of Indigenous Peoples and stakeholders, CB evaluations, and FSC Standards. Defining LSFOs Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

7 A clear definition of LSFO did not emerge from the study. Four criteria, with thresholds, were presented to study participants for consideration, with a company being considered an LSFO if any one of the criteria was present: a. It has an area greater than 80,000 ha of plantation or 300,000 ha of natural forest (either in individual operations or collectively under one ownership or in one landscape), or b. It has more than 2000 employees (directly or through contractors, including seasonal workers), or c. It has an annual sales of more than USD 200 million, or d. It occupies more than 50% of the land base of a district or municipality. Area was generally acknowledged as a common measure of size, but consideration must be given to whether the area must be contiguous or not. Area does not necessarily say anything about impact though: a very large area with low intensity of operations is not likely a concern compared to a moderately large area with high intensity of operations. The concept of what is considered large is also very variable between countries and regions. Where there is a diverse and fragmented ownership the threshold of size may need to be lower versus where there are large landmasses. Number of employees can be an important measure of social and economic impact, but there are examples of very large operations that are highly mechanized and therefore employ fewer people. This can also be an unreliable measure, as it can be difficult to get accurate reporting of numbers especially where contractors are primarily used. Sales are an important factor of economic impact, but are relative to the type and quality of wood, sometime subject to significant changes in wood prices, and difficult to get accurate reporting on. Percentage of a district/municipality can be reflective of a certificate holder s influence over the economic, social and environmental condition of that district or municipality (e.g. may be the major employer). However, percentage is relative to the size of the district/municipality, and administrative divisions of districts, municipalities, departments and regions are too diverse from country to country to allow for any type of meaningful comparison. Information received about the definition of LSFO shows that an international set of fixed criteria and thresholds will not serve the high degree of variation between countries. Criteria will need to be dependent on the national situation, and thresholds may vary depending on different ecosystems, ownership, and management systems. Recommendations Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

8 1. Take a holistic, strategic, multi-dimensional approach to defining LSFO Look beyond the scope of scale, and discuss the concept of LSFOs in connection with the SIR component of the IGIs, and in connection with the work of the Safeguards Task Force Take a regional approach to defining LSFO Discuss study findings and potential criteria/thresholds in a local context at the national SDG level, versus the international level. PSU may serve a role in countries where there isn t an SDG. Impacts The impacts of LSFOs that were evaluated in the study were: land tenure; local, regional and national level politics; lives of local population; local and regional economy; local and regional environment; labour; and human rights. While the impacts have been broadly categorized, they must be read collectively as many of the impacts are interrelated and/or overlap several categories. Social and environmental concerns regarding LSFOs were the most mentioned by respondents, especially in South plantation forestry countries with notable historic land claim processes (Brazil, Chile), that still are ongoing or unresolved despite the company being FSC certified. Impacts from LSFO plantations, such as water scarcity, pollution, rural to urban migration, community safety (e.g. fire), and infringements on Indigenous People s and local communities land claims and/or, etc., were cited as greatly impacting the lives of local population in some countries. Clarification of land tenure rights prior to any forestry activity should be the rule. The responses from Indigenous People, stakeholders and National Offices suggest that improvements in this area are still very much needed. The undue influences of LSFOs on governments were identified as a major issue. Examples were mentioned for many regions in the world, but especially in tropical, developing countries. Most of the impacts that CBs identified were to the local and regional environment. Impacts include sedimentation, water loss, negative impacts on landscape ecology, fragmentation of IFLs, very large clear-cuts in plantations, and increased danger of forest fires for locals. There are similarities between countries in terms of the types of impacts observed, the impacts vary greatly in scale, intensity and risk between countries and regions, and especially between natural and plantation LSFOs. National and regional approaches will best address these impacts, although a recommendation has been made 1 This recommendation was repeatedly raised throughout the study, and some parties declined to participate in this study until a fully formed policy or position was developed for SIR within their organization. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

9 for Environmental and Social Impact Assessments to be required in plantation forestry no matter the plantation size. Although respondents of plantation forestry countries mentioned improvements in labour conditions, there is still room for improvements, especially in labour outsourcing which negatively impacts working conditions in several ways. Labour is very connected with social/environmental concerns. The new Standard for Brazil was mentioned as an example of positively addressing outsourcing through the addition of Indicator The Organization shall undertake continuous efforts to reduce impacts from outsourcing processes, seeking to minimize differences between employees and contractors performing the same function. This may be considered as an IGI. Many comments made by study respondents, especially those in Southern and tropical countries, related directly or indirectly to some of the human rights described in the Universal Declaration of Human Rights, like articles related to the right to property; right to the economic, social and cultural rights basic for a person s dignity; right to favourable conditions of work and to protection against unemployment; right to a standard of living; right to education and several others. Comments were also received that represented concerns about rights described in the United Nations Declaration on the Rights of Indigenous People. Efforts within the FSC system on social issues have been marked by some challenges. Some respondents expressed disappointment that the historical situation of major land conflicts (e.g. in Chile) were not adequately reflected in two large FSC certificates. This is linked to perceived inadequacies in the evaluation process (see section 3.5). Definitions of rights and ownership to the land are highly contested and controversial in many countries, and interpretations (as related to Principle 3 requirements) were noted to vary (sometimes significantly) between CBs. Some study respondents said implementation of FPIC will hopefully lead to the development of tools that can facilitate gaining the consent of Indigenous People. However, other respondents suggested that much work was still to be done especially on a regional basis - in figuring out how to practically implement FPIC when Indigenous rights are not fully and legally defined/ recognized; and when forestry is just one part of a larger operational, legal, and political picture. Recommendations 1. Especially in countries where land claims are a major and historical issue, consider developing regional guidance on how to assess whether rights have been fully identified, and how to interpret potential infringement of those rights 2. Consider developing an FSC global strategy to ensure National Offices have the financial and human resource capacity to develop improved relationships with Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

10 Indigenous People and local stakeholders; and provide important local understandings to CBs, such as local political issues. 3. Consider requiring that plantations, regardless of size, conduct environmental and social impact assessments prior to being certified. 4. Consider including guidance or a requirement related to decision-making that balances economic benefit with long-term social and environmental impacts. 5. Consider conducting a study to further understand the ecological and social impacts of LSFO plantations. LSFO Consultation of Indigenous Peoples and Stakeholders Geographic location and local populations are two factors that strongly impact processes for consultation. Some LSFOs have a large number of Indigenous Peoples and stakeholders who are potentially affected by operations. Where populations are remotely located and have poor communication infrastructure, challenges were observed in companies ability to develop initial relationships, and maintain ongoing contact (incomplete stakeholders lists, low number of contacts compared to size of the certificate area, poor diversity of contacts, contact lists that are not updated, some very long lists but with many contacts irrelevant to the consultation). 66.7% of respondents said they had not been consulted by an FSC certified company, even though it was confirmed that an FSC certified company was active in their area. Common concerns expressed were: Organizations being consulted don t represent the Indigenous Peoples and stakeholders, and CHs aren t consulting the people in the towns and villages who are most affected; and Reliance on digital forms of communications, which only reach a small percentage of people, and specifically disadvantage those living in remote areas and areas without technology infrastructure. CBs also use the CH stakeholder lists. Therefore, respondents expressed these same concerns when answering about auditing practices. The meaningfulness of consultation is directly linked to the capacity of Indigenous Peoples and stakeholder. A majority of respondents said that they did not feel they had the capacity to adequately deal with LSFOs, and many of these respondents were the same people who indicated that CH consultation wasn t meaningful. Even a good consultation process will have limited benefits if Indigenous Peoples and stakeholders cannot fully participate due to low capacity. Capacity challenges were characterized in the following ways: Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

11 Technical lack of understanding of forest management and certification. Political imbalance of political power between LSFOs and individuals or small groups (e.g. inability of individuals to challenge government decisions related to the CH). Legal imbalance of legal resources between LSFOs and individuals or small groups. Recommendations 1. Consider developing a requirement or guidance related to certificate holders needing to: a. Consult both individuals and organizations within the definition of local communities ; and b. Consult a full range of stakeholders (individuals and organizations) they should be consulting (e.g. small business, ecological, social, economic, tourism, health, recreation, rights holders, academic, unionized and nonunionized workers, etc.). Development of a community and stakeholders relationship strategy, and improvements to stakeholder databases are methods that could facilitate implementation of these items. 2. Consider developing a requirement or guidance related to certificate holders needing to support the capacity of Indigenous Peoples and stakeholders to participate in forest management. 3. Consider developing a requirement for certificate holders to proactively inform Indigenous Peoples and stakeholders about aspects of the Standard that relate to their interests. 4. Consider developing a best practices guidance document for certificate holders (e.g. through facilitated information sharing between LSFOs) on how to conduct meaningful consultation (e.g. types of stakeholders, methods of contact, methods of soliciting feedback, follow up, development of a stakeholder survey better understand the needs of local communities). CB Evaluations Comments provided by study respondents can be categorized as: general evaluation practices; evaluation levels of effort; field sampling; Indigenous Group and stakeholder consultation; auditor skills; and public summary reports. General evaluation practices Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

12 Comments were received about differences between CBs performances; namely that some CBs had less stringent interpretation of the P&C than others. This was linked to the identification of some certificates having a very low number of CARs/NCRs compared to other certificates, even though larger social and environmental impacts were perceived. These respondents further believed that some LSFOs switched to a different CB so they wouldn t have as many restrictions. Indigenous Peoples and stakeholders provided several examples where they felt the evaluation process was being controlled or led by the LSFO instead of the CB. Control of the evaluation process is linked to concerns about there being a conflict of interest between certificate holders and CBs. Indigenous Peoples and stakeholders in almost every country (although to varying degrees) commented on the feeling that an inherent conflict of interest has been built into the system. CBs are expected to provide an independent evaluation of a certificate holder, but the CH is paying the CB for the evaluation. The study questionnaire identified this as a serious issue requiring attention. Evaluation Level of Effort Evaluation level of effort is the number of overall days that a CB spends on the evaluation of a CH, and also relates to how those days are allocated between activities such as preparation, Indigenous Peoples and stakeholder consultation, field site review, and reporting. Many respondents felt evaluation periods should be longer to allow for more sites to be visited, and for time to be granted for interviews. Remote areas were most at risk of not being visited due to the extra time and cost. Further, questions were posed about whether the complexity of issues could be evaluated in such short periods of time (e.g. in some cases, a few days of field work). A balance is needed between delivering a rigorous, thorough evaluation, and keeping costs for the CH reasonable. Public summary reports showed that CBs report on their levels of effort in very different ways, which makes it very difficult to evaluate how much time is actually being spent on field reviews and stakeholder consultation versus office reviews and report writing. Respondents suggested that levels of effort for LSFO evaluations should be defined through quantitative and/or qualitative methods, and the involvement of ASI, National Offices and local experts. Field sampling Field sampling refers to the number and type of sites visited during an evaluation. Indigenous Peoples, stakeholders and ASI respondents all frequently commented that improvements were needed in field sampling. In particular, the need was identified for Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

13 better geographical coverage of sites in the FMU (especially more remote areas); a better range/type of sites to be reviewed; independence when selecting sites to visit; and visiting sites suggested by Indigenous Peoples and stakeholders (who therefore must be consulted prior to the development of the field visit plan). CB consultation of Indigenous Peoples and Stakeholders Only 31.4% Indigenous People and stakeholders were satisfied or very satisfied with the way they were consulted by CB and 20.2% were not aware that CBs were conducting consultation. Invitations for consultation must reach a broader number and type of stakeholder. To do this, consultation opportunities must be publicized more effectively (e.g. not relying on digital methods when technology infrastructure is limited); opportunities for consultation must be provided with adequate advance notice; and consultation must be accessible (e.g. in local villages, not urban centres). Capacity issues must also be addressed. The bigger barrier to participation was cited as being a lack of education and capacity. Repeated comments were heard on the need for increased education on FSC, the Standards and the auditing process (17.9% of Indigenous People and stakeholder respondents said they were not aware of the Standard). For CB consultation to be meaningful, education must be provided before consultation is conducted. More people would likely participate in consultation if they were aware of how certification could serve as a social tool to address their rights and interests. The value of participation must also be demonstrated. Many stakeholders questioned the utility of participating in consultation because they didn t see how their input was being used by the CB, and weren t seeing any difference in how the company operated after being certified or after an audit. Scepticism about the audit process is linked to the perceived conflict of interest between CB and CH, and to poor past experiences during audit interviews. Auditor skills Indigenous Peoples and stakeholders, as well as CB and National Office respondents all made suggestions regarding increasing the skill of auditors. Particular areas to address include: knowledge of local/regional/national legislation when working in numerous different countries; knowledge of both the urban and rural contexts in which the LSFO operates and influences; sufficient fluency in the local language; adequate knowledge of how to objectively assess stakeholder concerns; and having operational, not just academic, knowledge. Public summary reports Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

14 Some reports are much easier than others to read (e.g. Word vs. Excel format) and there is a fair degree of variation in the basic information contained in the reports (e.g. some do not provide audit team member names, or the number of people on the team). Stakeholders cited concerns about report formats being full of acronyms and being hard to understand and follow. A standard format should be developed for use by all CBs that includes all information required by stakeholders to properly assess the evaluations reported, and includes all basic and relevant information. The website info.fsc.org was used to access public summary reports for all companies studied. On numerous occasions, it was noted that not all reports were available. Cases of companies were certified for a decade or more, but reports were only available for the last five-year certificate cycle. Cases of where a certificate holder switched to a new CB and then the reports by the previous CB were no longer available. Some of these reports were on the certificate holder s website, but info.fsc.org should be a comprehensive source for accessing reports. There were also cases where it took a year or two after the audit date to publish the public reports. Reporting of Consultation Process and Recording of Indigenous and Stakeholder Concerns. There is a fair degree of variation in how CBs summarize Indigenous and stakeholder concerns. Some reports clearly showed the concern alongside the auditors response (and whether there was an associated CAR/NCR). However, other reports listed the concern, but either did not specifically say how the comment was factored in to the assessment/audit process, or it was very difficult to find this information in the report. There was insufficient information in some public reports for stakeholders to identify how their concerns were dealt with. Indigenous People and stakeholders frequently said that audit reports do not reflect the feedback provided during the CB consultation process. Therefore, they continue to see practices believed to be non-conformant to the Standard, but certificates are granted. When certificates are granted where Indigenous People and stakeholders feel there are unresolved conflicts/impacts, the conflicts become even more aggravated. Some CBs make their full certification report available instead of just a public summary. Within these reports, the names and contact information (usually address) of stakeholders are included. Consideration should be given as to whether this constitutes a breach of stakeholder confidentiality. Concerns were expressed about certificate holders not sharing maps showing the certified area. Some public summary reports include maps, while many do not. The absence of a map makes it very difficult for Indigenous Peoples and stakeholders to determine if their areas of interest are certified or not, and which company to contact if they have a particular concern. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

15 Many Indigenous Peoples and stakeholders (globally) gave the opinion that CBs were not spending enough time interviewing local people, not spending enough time reviewing field sites, and generally not spending enough time on the evaluation of LSFOs. Many respondents expressed a serious questioning of the legitimacy of the FSC process, with this issue being one of the reasons. Since CBs do not universally report this information, the concerns of Indigenous Peoples and stakeholders can not easily be investigated. Some CBs have their whole evaluation team collaboratively write the final report. Other CBs have one person (e.g. the lead auditor) write the report using material that has been generated by other members of the evaluation team. In this latter case, questionnaire respondents expressed concern that the main report writer may not have fully or correctly understood the findings made by the other auditors. Recommendations 1. Through guidance documents, joint CB workshops or other means, consider developing methods to ensure greater consistency in the standard of practice between CBs, and within CBs between evaluation teams/auditors). 2. Consider adding a requirement to FSC-STF _V3-0 under section 2 for CBs to document and implement a system and procedure that demonstrates CBs are in control of all aspects of the evaluation process (e.g. advertising of evaluation, selection of field sites, maintaining confidentiality of stakeholders). 3. Consider ways to address both the real and perceived conflicts of interest that emerge as a result of certification bodies having a direct client relationship with certificate holders. 4. Utilizing ASI-ADV DRAFT V1.1 and any other relevant material/research, develop guidance for CBs on adequate levels of effort for LSFO evaluations (main assessments and annual surveillance audits). 5. Consider developing a best practices/guidance document for CBs on LSFO evaluation preparation, with a particular emphasis on the fieldwork component of evaluations. 6. Utilizing ASI-ADV DRAFT V1.1 and any other relevant material/research, develop guidance for CBs on adequate levels of LSFO field site sampling (main assessments and annual surveillance audits). 7. Consider developing additional requirements or guidance for CBs regarding consultation of Indigenous Peoples and stakeholders, which may include but is not limited to: Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

16 a. Adequacy of sampling (number and variety of stakeholders) and time spent on consultation; b. Editing clause 2.5 of FSC-STD _V3-0 to emphasize the relevance of CBs consulting local level individuals and organizations (as well as national and sub-national level organizations) during the evaluations of LSFOs; c. Ensuring accessibility of consultation sessions; and d. Supporting Indigenous Peoples and stakeholders capacity to participate in consultation. NB: Motion 37 passed at the 2008 GA is very similar to these recommendations: FSC develops guidance on stakeholder consultation that includes: The required facilitation and stakeholder consultation skills for CB and ASI auditors, Different consultation requirements and acceptable levels of time spent by CBs or forest/plantation managers, in relation (to the) scale and type of operation, level of intensity and impact, and different cultural settings, Facilitation of stakeholder participation. However, comments from Indigenous Peoples and stakeholders show that more work in this area is needed. The effectiveness of measures taken to implement Motion 37 should be reviewed when considering this recommendation. 8. Consider ways to provide additional monitoring of CB conformance to stakeholder consultation requirements and guidelines (e.g. consultation notice period, interview confidentiality, interview conduct e.g. asking open ended questions). 9. Consider ways to demonstrate greater independence of the evaluation process (e.g. enhancing the peer review process), as related to concerns about conflict of interest between certificate holders and CBs. 10. Consider developing requirements, guidelines or mechanisms to ensure auditors are adequately qualified and trained for the role they serve on an evaluation team, for the environmental/social/legislative context that are working in. NB: Motion 50 passed at the 2008 GA included direction for FSC/ASI to resume plans for the development of a comprehensive and affordable training programme in FSC standards for CB and ASI auditors, FSC, NGOs and consultants ). However, the study revealed that concerns still exist about auditor skills and training. The effectiveness of measures taken to implement Motion 50 should be reviewed when considering this recommendation. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

17 11. Ensure all public summary reports are fully accessible in one well-advertised place. 12. Ensure that the content of all public summary reports is conformant with the requirements of FSC-STD a. 13. Consider developing a standardized public summary report format (with associated guidance material), based on best examples for readability and ease of identifying how Indigenous group and stakeholder comments were addressed. NB: This issue was raised at the 2008 GA in Motion 37 (passed) Motion to have a single format for public summaries of forest management assessments. However, as of July 2014, varying formats were still being used. If the intent of the Motion is the same as study recommendation, ensure that the Motion is implemented in a timely manner. If the study recommendation is beyond the scope of the Motion, consider implementing the additional aspects of the recommendation. 14. Consider requiring that all public summary reports include a map of the certified area. 15. Consider requiring that all public summary reports include an accounting of how evaluation time is spent (office, field, reporting). FSC Standards Study respondents from across the participant sectors largely spoke favourably about the new P&Cs and the IGIs, and anticipated that many of the impacts identified in the study would be addressed directly by the IGIs, and/or by the revised national standards. ASI, National Offices, CBs, certificate holders, Indigenous People and stakeholders all hold unique perspectives on the FSC Standard based on the role that they fill within the certification system. While these groups may have differing opinions on the solutions, there is similarity in many of the topic areas that were identified as being specifically relevant to LSFOs. Two topics areas raised by National Office respondents spoke literally and specifically to the size of LSFOs: the scale component of Scale, Intensity and Risk; and the practice of large leases being divided into smaller certificates. However, all other topic areas raised by NO respondents, Indigenous People, stakeholders, CBs and certificate holders related to the effects that companies can have effects that can be amplified by certificate size. These areas require further consideration and discussion at all levels of the standards development process. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

18 Recommendations 1. Have all standards development processes (IGI and National Standard) review Section 3.6 of the Motion 20 Study, and consider whether edits or additions to indicators are required. Particular consideration should be given to the topics of: a. Monitoring criteria based on scientifically recognized indicators; b. Scale, intensity and risk; c. Intact forest landscapes; d. Definition of the owner ; e. Ecosystem service approach and/or cumulative impacts arising from outside the certified area; f. Modernization of equipment; g. Social impact assessments; h. Transparency and managing of political connection; i. Support for local and regional markets; j. Price control; k. Road density and fragmentation; l. Outsourcing; m. Pesticides and agrochemicals; n. Reserves; o. Monopolies and monopsonies; p. Exotic fauna; and q. Conversion of land to other purposes. 2. Consider developing guidance for: a. Implementation of FPIC; b. Determining direct responsibility for social impact; c. Best practices for plantations (e.g. water quality, landscape level limits); d. Development and maintaining relationships with Indigenous People and stakeholders; 3. Ensure the Standards Development process is inclusive of all relevant and interested Indigenous People and stakeholder groups. Next Steps The study will be presented at the General Assembly in Seville, Spain, on September 10, As outlined in the Motion TOR, after the General Assembly FSC will convene a chamber balanced Working Group. This WG will review and adjust the definition of LSFO, and will assess whether or not it is necessary to add some elements to the standards and Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

19 procedures that are specific to LSFOs in order to ensure that the integrity and credibility of the FSC system is upheld. 2 2 The funding for such Working Group is not decided yet but it may be integrated with implementation of Motions 18 or 21 (Annex 2 and Annex 3) Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

20 Table of Contents Acknowledgements... 2 Study Authors... 3 Abbreviations... 4 Executive Summary... 6 Table of Contents Methodology Study Terms of Reference Definition of LSFO Aspects and Dimensions of Impact Field Case Studies and Desk Reviews Certificate Holder Selection Criteria Primary Research (Engagement Process) Questionnaires Study Team Interviews Secondary Research (Data Review) Public Summary Reports FSC Database Internet Research Study Implementation Selected Certificates Questionnaire Distribution and Response Study Challenges and Limitations Study Findings Defining LSFOs TOR Criteria TOR Thresholds Additional Criteria and Thresholds Recommendations Impacts of LSFOs Land Tenure Local, Regional and National Level Politics Lives of Local Populations Local and Regional Economy Local and Regional Environment Labour Human Rights Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

21 3.2.8 Recommendations CARs/NCRs a. Common Themes LSFO Consultation of Indigenous Peoples and Stakeholders a. Consultation Process b. Meaningfulness of Consultation c. Recommendations CB Evaluations a. General Evaluation Practices b. Evaluation Level of Effort c. Field Sampling d. CB Consultation of Indigenous Peoples and Stakeholders e. Auditor Skills f. Public Summary Reports g. Recommendations FSC Standards ASI Perspective National Office Perspective Certification Body Perspective Certificate Holder Perspective Indigenous Peoples and Stakeholders Perspective Recommendations Next Steps References Appendices Appendix A Motion 20 TOR Appendix B Sample Invitation to CH to Participate (Case Study) Appendix C Questionnaires Appendix D Questionnaire Distribution Appendix E Definition of LSFO Full Responses Appendix F Distribution of CARs/NCRs by Principle Appendix G CARs/NCRs Compared to the Number of Indicators per Principle Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

22 1. Methodology 1.1. Study Terms of Reference FSC PSU hired the author of the Motion 20 to draft Terms of Reference for Conducting Case Studies (see Appendix A) that guided the development of the final study methodology Definition of LSFO For the purposes of the study, the TOR included a tentative definition of LSFO; that being any company that meets at least one of the following criteria: e. It has an area greater than 80,000 ha of plantation or 300,000 ha of natural forest (either in individual operations or collectively under one ownership or in one landscape), or f. It has more than 2000 employees (directly or through contractors, including seasonal workers), or g. It has an annual sales of more than USD 200 million, or h. It occupies more than 50% of the land base of a district or municipality. This definition was used in the study as presented Aspects and Dimensions of Impact A provisional list of aspects or dimensions to be addressed in the study was included in the TOR. These aspects focussed on possible impacts (both positive and negative) not yet addressed by the FSC Standards or FSC certification procedures, and included the following categories: a. Impacts on land tenure; b. Impacts on local, regional and national level politics; c. Impacts on the life of local population; d. Impacts on the local and regional economy; e. Impacts on the local and regional environment; f. Impacts on labour; g. Human rights; and h. Influence on the procedures and transparency of the certification process. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

23 Illustrative examples were provided under each category. The study team made minor refinements to this section of the TOR by expanding the illustrative examples and adding a category for conduct of the certification process by the certification body. Examples under this category included: quality of public consultation; quality of field work; quality of reporting; consideration of stakeholder ability to actively and effectively participate in assessments; and consideration of stakeholder burden Field Case Studies and Desk Reviews The TOR proposed that study data would be gathered through two means: field case studies and desk reviews. The field case studies were to involve: on-site visits to participating certificate holders; review of existing documentation; and contact with stakeholders, Indigenous Peoples, and FSC members in the countries where operations were located. The desk reviews were to involve: review of existing documentation; research of other publicly available information; and contact with stakeholders, Indigenous Peoples, certification bodies, FSC National Offices, and FSC members in the countries where operations were located. As the study team worked on identifying certificate holders to approach (See section 1.2 below), FSC confirmed the final project budget. Based on the budget and timelines, a goal was set to conduct two field case studies (one natural forest, and one plantation forest) and three desk reviews (one natural forest, and two plantation forests). A work plan was developed that included several key activities: introductory communications with certificate holders, National Offices, and certification bodies; study preparation (confidentiality agreements as needed, gathering data and stakeholder lists, scheduling field visits and interviews, field logistics); study implementation; development of a reporting matrix; ongoing study reporting to FSC; and development of the final report. Invitations to participate in the study were sent to certificate holders (See Appendix B for sample invitation). Many of the certificate holders approached indicated an interest in the study, but declined to participate for reasons including: internal priorities; time already being spent on other FSC matters (e.g. new national Standards, IGI evaluations, annual surveillance audits); concerns about stakeholder burnout (consultation and audit overload); and perceived added scrutiny. As declines to participate were received, invitations were sent to additional certificate holders. In total, invitations for either a field case study or a desk review were sent to twelve certificate holders for natural forests, and eight certificate holders for plantation forests. After several months of intensive follow up, by April 2014 voluntary participation had been secured for only one field case study (plantation) and two desk reviews (one each of plantation and natural). In the absence of adequate voluntary participation, an alternate plan was developed to conduct non-voluntary desk reviews using information that was publicly available. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

24 Continued delays in confirming logistics led to the unfortunate decision of having to cancel the field case study. As implemented, the final study included: 3 voluntary desk reviews (1 natural and 2 plantations), and 14 non-voluntary desk reviews (8 natural and 6 plantations), for a total of 17 desk reviews across 12 countries in all 5 FSC regions (Asia/Pacific, Africa, Europe & Russia, Latin America, and North America) Certificate Holder Selection Criteria The selection of certificate holders for the desk studies was based on criteria in the draft TOR, and then refined by the study team. The overall goal stated in the TOR was to have enough documentation and references in order to have a framework for understanding the social and environmental impacts that LSFOs have at a larger level. The final selection criteria included a mix of: a. Natural and plantation forests; b. Certificates with significant issues (e.g. stakeholder complaints, disputes); c. Certificates in global North and South; d. Companies that have been certified for a long time; e. Large forest entities with several smaller companies or subsidiaries through a region; and f. Certificates of varying size (e.g. some close to the 80,000ha plantation and 300,000ha natural forest size threshold defined in the TOR, and some moderately and much larger than the threshold). Certificates selected did not need to meet all of these criteria, but the goal was to have all criteria represented through the final mix of certificates selected Primary Research (Engagement Process) One of the study goals was to gather as broad a perspective as possible on the potential positive and negative impacts of LFSOs. Perspectives identified included: Indigenous Peoples and stakeholders; certification bodies; FSC National Offices; ASI; and certificate holders. The stakeholder perspective was further divided into subcategories such as academic, tenure and use rights holders (e.g. trappers, commercial recreation), government (local, regional, state/provincial, national), local businesses, community associations, and NGOs. Two sources of primary research data were used: questionnaire data, and interviews via phone/skype. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,

25 Questionnaires Based on the LSFO definition, and the aspects and dimensions in the TOR, specific questionnaires were crafted for each group being engaged (see Appendix C): a. Indigenous and Stakeholder (English, Finnish, French, Portuguese, Spanish, Russian) b. Certification Body (English only) c. FSC National Offices (English and Spanish) d. ASI (English only) e. Certificate holders (English only) f. Motion 20 Authors (English only) The choice of languages was determined by factors including the location of certificates selected and availability of translation resources. All questionnaires were developed using the confidential SurveyGizmo web-based tool. The following table summarizes the broad categories of inquiry included in each questionnaire: Definition of LSFO Impacts FSC Standard Certification Process Indigenous and Yes Yes Yes Stakeholder Certification Bodies Yes Yes Yes Yes FSC National Offices Yes Yes Yes Yes ASI Yes Yes Yes Certificate Holders Yes Yes Yes Yes Motion 20 Authors Yes Yes Yes Yes Due to project timelines and budget, was selected as the most time and cost efficient method of distributing the questionnaire. This was a regrettable, but acknowledged constraint in terms of achieving the participation of Indigenous and local communities (see Limitations below in section 2.3). The project team accessed contact information through certificate holder contact lists, FSC PSU (certification body information), FSC National Offices (FSC members, Indigenous groups, and stakeholders), Internet searches, and personal contacts in different countries. Motion 20 Report on the Impacts of Large Scale Forestry Operations DRAFT Aug. 14,