July August 2004
Mandatory certification gets lukewarm response
Ontario’s Sustainable Forest Licence holders are leery of the recently announced mandatory third-party certification they will have to put in place by 2007, arguing that marketing help from the provincial government might be more helpful.
By Tony Kryzanowski
Ontario’s Sustainable Forest Licence (SFL) holders support third-party certification of the province’s forest management practices, but many are questioning whether making this certification mandatory will improve market access for Ontario’s forest products. The Ontario government recently announced its intention to require SFL holders to be certified to an accepted performance standard by 2007, replacing the current voluntary approach. Ontario is the largest jurisdiction in North America to announce it intends to require mandatory third-party certification.
Right now, about 24 per cent—or eight million hectares—of the province’s potential forested area is certified through voluntary, internationally recognized systems such as the Forest Stewardship Council (FSC), the Canadian Standards Association (CSA) and the Sustainable Forest Initiative (SFI). About 70 per cent of SFL holders are currently working toward achieving one of these certification standards. By 2007, all SFL holders must be certified by either FSC, CSA or SFI. “If this is going to result in better forestry in Ontario, I think sometimes the minister has the right to make that kind of moral judgment,” says the manager of the Timiskaming Forest Alliance, Alan Foley. “But I am not sure if this is going to do what it is intended to do.”
The Timiskaming Forest Alliance is one of the province’s largest SFL holders, harvesting about 1.2 million cubic metres annually from one million hectares of productive forest area. It is a co-op with members ranging from small independent loggers to large forest companies like Tembec, Domtar and Grant Forest Products. It is presently working toward certification. Foley is not alone in questioning whether mandatory third-party certification will lead to improved market access. Several SFL holders expressed similar sentiments following an informational session in mid-May. The session was organized by senior Ministry of Natural Resources (MNR) staff to explain the rationale for this new policy.
Even the manager of Canada’s first certified large public forest questions the mandatory approach. They also question the use of three systems. Westwind Forest Stewardship Inc is a not-for-profit company and SFL holder that manages the French-Severn Forest in the Parry Sound/Muskoka area of Ontario. It was the first FSC certified forest in Canada. General manager Steve Munro says that SFL holders should not fear certification—he says it shows everyone that the forest is being managed in a sustainable manner. However, he and others question whether the policy of mandatory certification is fair to those SFL holders who have already spent the money pursuing certification voluntarily.
As managers of a certified forest land base, Westwind Forest Stewardship has benefited from its FSC designation. This has been particularly so in marketing its high volume of lower grade pulp wood to pulp mills with customers who demand that manufactured forest products come from certified forests. Westwind has also discovered significant demand for FSC sawlogs. However, several SFL holders wonder if those markets, particularly for pulp wood, will suffer from oversupply if everyone is certified. While certification has provided Westwind with more market access, it has not translated into additional income.
Consumers have not shown a willingness to pay a premium for products manufactured from a certified forest. Yet, SFL holders must incur significant extra costs to become certified. Munro estimates that it has cost Westwind about $350,000 over the past five years to achieve and maintain FSC certification. There are presently 47 SFL holders in Ontario. SFL forest management areas came about as part of a major overhaul of the province’s forest management guidelines, culminating in the Crown Forest Sustainability Act.
It transferred a considerable amount of forest management responsibility from the Ministry of Natural Resources to forest stakeholders. For now, SFL holders are willing to follow MNR Minister David Ramsay’s direction, as it seems that the government is intent on pushing ahead with its plan for mandatory third-party certification. Ramsay announced the Ontario government’s plan at the fifth Certification Watch Conference this past April in BC.
The issue of mandatory third-party certification moved to the front burner with the election of the new Liberal government in Ontario and the appointment of a new minister—Ramsay—from Northern Ontario. “With the softwood lumber dispute ongoing and the current situation in Northern Ontario, where we have about 4,000 people in the forest industry temporarily unemployed, the minister wanted to be assured that we were doing everything possible to ensure we had market access,” said Riet Verheggen, director of the MNR’s Forest Management Branch. “He wanted something to address the security and prosperity of Northern Ontario communities.” Secondly, given the current leading edge regulatory framework of Ontario’s sustainable forest management system, she says the MNR felt achieving certification from one of the three internationally recognized systems would not be a huge leap for SFL holders.
In addition to considering the advantages and disadvantages of mandatory certification, Verheggen says the minister also took into account a decision by the American states of Michigan, Minnesota and Wisconsin to require third-party certification of forest management in their public forests. Given these circumstances, Ramsay decided to forge ahead with mandatory certification in Ontario. However, SFL holders are concerned how mandatory FSC, CSA, or SFI certification might impact on those who can barely afford the cost of meeting existing provincial forest management standards.
Based on the input she received at the meeting in May, Verheggen says it appears that only about four SFL holders may find pursuit of certification difficult. Both the MNR and SFL holders agree that there is a cost to certification, and its affordability will depend on how much volume each SFL is generating. Larger SFL holders will be able to spread the cost over a larger volume, making it far more affordable. The concern is with smaller SFL holders generating high volumes of lower grade pulp wood, located in areas where they will likely have to do a lot more legwork with other forest stakeholders to achieve certification. There is concern that under a mandatory certification system, some SFL holders will simply let their licences lapse because of the cost and hassle factor.
Helping these SFL holders make the adjustment is an MNR priority, says Verheggen. “If it is a mandatory requirement, we are going to have to put training in place for our staff at the local district offices,” she says. “And we need to work with industry, especially with the smaller operators, on how to get started and prepare for this.” She says ballpark figures show that it will cost SFL holders about the salary of one additional employee per year to put the proper certification system in place and maintain the reporting requirements. Because third-party, independent forest management audits are already a government requirement under Ontario’s forest management guidelines, some SFL holders have suggested that the government develop a fourth “made-in-Ontario” certification system. MNR has not responded to this suggestion, but is discussing it as part of the feedback it has received from industry.
A suggestion made by Nipissing Forest Resource Management general manager Peter Street at the May meeting was that rather than pinning its hopes on improving market access through mandatory certification, the Ontario government could better serve industry by doing a better job of helping it market its products. This received widespread support from other SFL holders. The concept was to provide industry with additional tools like a “Made-In-Ontario” logo to assist with its marketing efforts.
The province has adopted a stylized trillium as part of its Foodland Ontario program to help consumers identify agricultural products produced in Ontario. It has a similar program with wine producers. Many SFL holders felt that a program aimed at Ontario consumers and promoting the virtues of existing sustainable forest management guidelines had a much better chance of building market share for the province’s forest industry than mandatory third-party certification.
They also felt that encouraging more value-added forest product manufacturing in the province—rather than shipping primary forest products for remanufacturing elsewhere—should also be a bigger government priority. “The government should start thinking of our product as their product,” says Alan Foley, “because ultimately, it’s coming from a Crown resource.”
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