Understanding Corporate Purchases of Wood Products

This article is adapted from information in Sustainable Procurement of Wood and Paper-Based Products: Guide and Resource Kit, which will be released later this year by WRI and the World Business Council for Sustainable Development. It originally appeared in the May/June 2007 issue of Green@Work Magazine. By Ruth Noguerón Consisting of 14 former forestry-students-turned-environmental-activists, ARuPA monitors forest activities across the Indonesian region of Central Java, and also trains members of 20 different nonprofit organizations to document environmental crime and mismanagement. ARuPA and its partners have focused on illegal logging in Java’s teak forests by Perhutani, a government-owned forestry company. They create films that feature villagers’ complaints about Perhutanis disregard for forest-dwellers’ rights, and are shown to local civil-society groups and decision-makers. In 2002, ARuPA’s efforts contributed to the revoking of Perhutani’s Forest Stewardship Council (FSC) certification by Smartwood, an international timber assessor, which impacted the company’s market among Western furniture buyers. Subsequent attempts by the company to regain certification and lost business have failed. ARuPA also uses film to highlight successful examples of alternative, decentralized, sustainable forest-based livelihoods, including community-based forestry management and one Javan community’s initiative to plant bamboo after local pine plantations had been clear-cut. “Bamboo forests protect communities from flooding, landslides and drought – environmental services that could not be provided by the pine forest,” said ARuPA spokesman Rama Astraatmaja. This example of management that has worked – and there are many other similar examples in Indonesia alone – illustrates the importance of education for the 300 million people around the world who live in forests. More than 1.6 billion people depend on forests for their livelihoods (through fuel wood, medicinal plants and forest foods). About 1.2 billion people rely directly on agroforestry farming systems that help sustain agricultural productivity and generate income. Sustainable Procurement of Forest Products On the other end of the spectrum, corporate managers who often live a very long way from forests need to also have a degree of understanding concerning the impact their procurement of wood products can have. Those items include construction materials, furniture, packaging, tissue paper and countless other practical products used every day in their business operations. With interest rapidly growing in what is often called sustainable procurement of forest products, consumers, retailers, investors, communities and other groups increasingly want to know that the social and environmental impacts of buying and consuming wood-based products are acceptable. Corporate managers must look beyond price, quality, availability and functionality to consider other factors in their procurement decisions. These include environmental aspects (the effects that the products and services have on the environment throughout their entire lifecycle) and social aspects (the effects on labor conditions, human rights and poverty eradication). Sustainable procurement seeks to ensure that what we do today for an ever-growing population does not compromise the needs of future generations. Sustainable procurement can make organizations along the supply chain more competitive, more resilient to changing business conditions, and more likely to attract and hold customers, investors and the best employees. Sustainable procurement can also provide consistency and transparency for business operations. Making sustainability part of a business procurement process aligns companies with their stakeholder values, and maintains a company’s social license to do business. Questions to Ask When Purchasing Forest-Based Products Later this summer, WRI and the World Business Council for Sustainable Development will release a guide called Sustainable Procurement of Wood and Paper-Based Products: Guide and Resource Kit. It is the first time that office managers without environmental or forestry backgrounds can find, in one user-friendly document, an overview of the issues surrounding sustainable procurement of forest products and of some of the tools, projects, initiatives and labels that have emerged over the past few years to aid sustainable procurement. Some of the questions any manager should ask include: Where do the products come from? It is important to understand all the steps through which forest products go from being harvested to the end product. This will help the procurement manager know where the wood is coming from and help assess the likelihood of several important characteristics:

• That the products have the properties they are claimed to have
• That the products have been legally produced
• That the products come from well-managed forests
• That the values of areas in the forest that have unique qualities have been maintained or enhanced
• That satisfactory social safeguards are in place.

Is information about the products credible? Typically, forest products originate in remote rural areas and, increasingly, in a foreign country. The products may pass many producers, dealers and borders before they reach their destination. The accompanying information is not always complete or accurate enough for the customer to properly assess their environmental and social characteristics. Have the products been legally produced? There is no universally accepted definition of illegal logging and trade. Strictly speaking, illegality is anything that occurs in violation of the legal framework of a country. A strict definition is difficult to apply, however, and it is generally acknowledged that what is legal may not always be sustainable, and what is sustainable may not always be legal. Legality is therefore not a synonym for sustainable forest management. Have forests been well-managed? The environmental impacts of poor forest management, inattention to unique and special landscapes, and conversion affect ecosystem services (meaning it may eliminate species or affect erosion control and water supplies). However, converting forests to non-forest uses such as urban settlements completely eliminates the forest ecosystem. Because of the variety of ecosystem services forests provide, often the value of an intact forest, or a standing forest, is greater to society than the value of a converted forest. Have the needs of local communities and indigenous peoples been addressed? Logging and other forestry operations take place in the forest. This is a potentially dangerous production environment, lacking the protection and standardized conditions of a factory. The first industries to process the wood are often located in remote and sparsely populated areas where the supply of job opportunities, social support systems, government supervision and adequate infrastructure may be limited. Forces and conditions beyond the control of government authorities can sometimes be found in forest areas. The forest sector employs millions of workers, and forest companies are sometimes compelled to make up for governmental voids and take a leadership role in addressing social and governance issues. Values such as fair pay, employment benefits, health and safety, and interaction with local communities are a part the social contract between employers and the communities in which they operate. Have climate issues been addressed? Climate and forests are intrinsically linked. Climate change may already be stressing forests through higher mean annual temperatures, altered precipitation patterns, and more frequent and extreme weather events. At the same time, forests play a major role in climate change by either mitigating it or contributing to it. Forests mitigate climate change by removing carbon from the atmosphere (carbon sequestration) and storing it in the biomass they produce and accumulate, such as wood and peat. This carbon is released back to the atmosphere either through decomposition (slowly) or burning (quickly). Forests contribute to climate change when they are logged, destroyed or burned at a faster rate than they grow back. Over the past 150 years, deforestation has contributed an estimated 30 percent of the atmospheric buildup of carbon dioxide. Products from sustainably managed forests are relatively more carbon-neutral than other products. Emissions in sustainably produced forest products are associated with logging operations, transportation, manufacturing and disposal.