Forestry & Development E-News
www.forestryanddevelopment.com         April 2007
Forestry & Development E-News is an electronic newsletter which reports and comments on regional and international developments in forestry.  If you do not wish to receive Forestry & Development E-News, please click here.
	PNG moves towards timber legality verification Papua New Guinean forestry has taken a step towards legality verification. The PNG Forest Industry Association (PNGFIA) announced last week that it is now working with Swiss firm SGS (Societe Generale du Surveillance), one of the world's most credible inspection and verification auditors. Under a new pilot programme, the PNGFIA and SGS will assist PNGFIA members in joining the Timber Legality and Traceability Verification (TLTV) programme offered by SGS. The TLTV programme is a service designed by SGS that ensures timber has been legally acquired, processed and traded by a particular company. The PNG forest industry is an important source of revenue for the PNG economy. It employs more than 10,000 people and generates between 5 and 9 percent of the country's GDP. The forest industry is also a major contributor to infrastructure in rural areas in PNG. The industry has come under repeated attack from international NGOs such as Greenpeace, who have made a sustained effort to shut the industry down. NGOs have also made unsubstantiated allegations that the industry violates human rights, condones rape and operates illegally. However, independent monitoring by Swiss firm SGS for the PNG government has confirmed that there have been no large-scale log-smuggling operations in PNG over the past 12 years and that appropriate taxes and royalties have been paid on all tracked export logs. PNG is one of only two tropical timber-producing countries to employ an independent monitoring service for log exports at arms' length from the government. In a statement issued last week, PNGFIA president Tony Honey said that the implementation of the programme means the PNG industry will be able to "constructively engage with the key stakeholders, including civil society, commercial business organizations and NGOs on the future of PNG's forest industry." The Australian Minister for Fisheries, Forestry and Conservation, Senator Eric Abetz, applauded the development, saying in a press release that the programme complements new Australian Governement policy to reduce the amount of illegal timber being imported to Australia. The Australian Timber Importers Federation has also given its support to the programme. The move has been particularly welcomed by the ANZ Bank. One of the bank's biggest clients in the Pacific region is PNG forestry company Rimbunan Hijau PNG (RH). ANZ has come under pressure from environmental NGOs such as Greenpeace to drop RH as a client or regulate its behaviour. Despite this, NGOs have responded negatively. In an Australian radio interview on March 28, Greenpeace campaigner Dorothy Tekwie said that the programme will not stop illegal logging. Similarly, WWF has suggested that a clear definition of legality is yet to be established. Both these responses highlight the fact that environmental NGOs give higher priority to stopping commercial native forestry than the welfare of PNG citizens.
	Australia announces $200m international forest fund The Australian Government has announced a practical approach to address climate change in the form of the Global Initiative on Forests and Climate. The initiative commits A$200 million to promote sustainable forestry to preserve forestry sinks in developing countries.  The initiative will develop projects in cooperation with countries in Southeast Asia and relevant international organizations. According to a press release from Australian Environment Minister Malcolm Turnbull, the projects will reflect the economic and environmental needs of the participating countries and "achieve the maximum possible benefit for forest management and the global climate." The initiative will aim to: build technical capacity to assess, manage and monitor forest resources; develop effective regulatory, legal and enforcement arrangements to protect forests; promote the sustainable use of forest resources; support practical research into the drivers of deforestation; encourage reforestation of degraded forest areas; develop and deploy technology and to help developing countries manage forest resources; pilot approaches to providing real financial incentives to countries and communities that will encourage sustainable use of forests. These measures will reduce emissions without proposing regulation of energy or unachievable targets for reductions of emissions as in the Kyoto Protocol. The initiative represents a potential twofold gain for developing countries. Improved sustainable forest use will result in stronger economic growth and better returns as well as durable carbon sinks. Half of the funding has been targeted at Indonesia which, according to FAO figures, has one of the highest rates of deforestation in the region. Funding will also be directed towards PNG and the Solomon Islands. Programmes will mainly be administered through AusAID, the Australian government's aid office. Australia has called for support from other countries for the initiative, putting it in a position to lead global policy on deforestation without being subject to anti-development agendas pushed by environmental NGOs. Read the statement from Australian Environment Minister Malcolm Turnbull here.
	In other news STORA ENSO, BOTNIA UNDER ATTACK FROM GREENPEACE 22 March 2007: Finnish pulp and paper manufacturer Stora Enso has come under attack from environmental NGO Greenpeace. Greenpeace helped organize a protest at both the Stora Enso and Botnia pulp and paper plants in northern Finland, claiming that the company had accepted pulp from native forests. Stora Enso accepts pulp from Metsahallitus, a state-owned timber company. The campaign commenced with a demonstration on March 12 that was very similar to a number of previous Greenpeace demonstrations against forest industries. The campaign has also been directed against European publishing houses and packaging manufacturers that purchase paper from Stora Enso and Botnia, two of Europe's largest paper manufacturers. Stora Enso strenuously denied the claim, citing its wood procurement principles and its national stakeholder processes that prevent the purchase of products from native forests. Stora Enso also noted that the areas used for procurement by Stora Enso have not been defined as 'old growth' by the Finnish government. Stora Enso has worked with Greenpeace in the past when the NGO has made allegations about the legality of its sources. In November last year, Greenpeace claimed that Stora Enso procured illegally logged wood from Karelia, Russia. An investigation by both Greenpeace and Stora Enso found the FSC-certified areas were being harvested legally. Greenpeace has not published any evidence to substantiate its claims on the Greenpeace Europe website. Read the Stora Enso press release here. BEWARE THE EQUATOR PRINCIPLES 22 March 2007: International banks HSBC and Credit Suisse have come under pressure from NGOs such as Global Witness, who claim that the institutions have breached their own sustainability guidelines. The banks played a managerial role in the IPO for Samling, a Malaysian-based timber company. But, as signatories to the Equator Principles, they have made a voluntary agreement not to provide financial assistance to commercial logging operations in primary tropical moist forest, as defined by International Finance Corporation guidelines. The Equator Principles have gained popularity among international banking institutions. Although they are voluntary and non-binding, they increase exposure to external pressure from NGOs with respect to environmental policy. The case involving Samling indicates that financial institutions may not be aware of the details and ramifications of signing up to the Principles. Read the HSBC Forest Land and Forest Products Sector sustainability guidelines here. FSC SHOWS UP POORLY AT NAFI CONFERENCE 21 March 2007: The National Association of Forest Industry (NAFI) held its annual conference, The Future of Trees in March. Forest certification was a key theme of the conference. The UK-based Chairman of the Programme for the Endorsement of Forest Certification Schemes (PEFC), Mike Clarke, considered that PEFC and the WWF-sponsored Forest Stewardship Council (FSC) should be considered equivalent in providing assurances of sustainable forest management and felt that excessive attention given to minor details of the schemes was diverting efforts to promote sustainable forest management globally. Michael Spencer, Chief Executive of FSC Australia criticized the Australian Forest Certification Scheme (AFS) - which is based on the PEFC system - on the grounds that it was a 'government' scheme because Government agencies participated in AFS technical committees and because Australia's national bodies for standards setting and accreditation of certifiers are government-supported agencies. Spencer did not seem to appreciate that these arrangements were standard practice for national systems of standards and conformance, in accordance with the procedures of the International Organization for Standardization and the International Accreditation Forum. FSC and WWF have been long-term critics of the AFS and recently mounted an unsuccessful campaign to have Governments in Europe recognize only FSC certified timber products in Government procurement. They have irritated Australian government officials and industry leaders with their misrepresentation of features of the AFS. In criticizing further the Australian Government and the National Association of Forest Industries, Spencer will intensify the difficulty of his task of demonstrating that FSC is effective for the Australian timber industry. NAFI sought to focus on future directions for the industry, including bushfire management and opportunities from climate change policy such as biofuels, bioproducts and carbon storage. Other presentations covered the ANZ Bank's draft policy on forests and biodiversity, which will apply to all clients whose activities impact on forests and the links between forestry and water resources management. The conference programme and selected presentations are available here. IUCN REPORT ON WATER AND FORESTS 15 March 2007: The World Conservation Union (IUCN) released a report on the development of markets for natural water systems in developing countries. The report, 'Pay: Establishing Payments for Watershed Services', focuses on four areas in the development of water markets in natural systems, namely, valuing, managing, designing and agreeing upon payments for systems. The report attempts to classify certain landholders in watershed areas as 'service sellers', who would receive payments for leaving a forest area or wetlands area in its current state, thus preventing agricultural and silvicultural conversion. The report prioritises the conservation of ecosystems over the development of sustainable industries or even subsistence farming in developing countries. For example, "clearing forests to expand the area of cultivated land in a watershed will increase the provision of food and some other products but will change and often reduce the availability of many other services, such as hazard mitigation, control of sediment runoff and wildlife habitat. Payment schemes aiming to maintain a particular watershed service or set of services need to create incentives that prevent changes in land cover that will degrade service provision." (p. 26) The report also makes highly generalised findings about forest cover, suggesting that forest cover has positive effects on environmental flows, while criticising plantation forestry for the effect it can have on water flows. Read the IUCN report here.
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