Knowing the context and conditions surrounding the harvesting of the raw materials and the manufacturing processes of the products is important. A knowledgeable buyer will be in a better position to properly assess the social and environmental claims of a product (e.g., wood was harvested under a Sustainable Forest Management (SFM) regime, etc.).
When information to support the claims of the product is not complete, accurate, or enough for the buyer to properly assess these claims, monitoring and verification are used to add credibility to the process. In some cases information may come from long and well-established business relationships. In other cases the buyer may wish to consult outside sources for additional information.
Monitoring and verification can take three forms:
Self verification - a producer monitors and reports about its own harvesting and manufacturing processes. Typical outputs include sustainability reports, emissions reports, reports on social indicators, resource usage reports, recycling reports, etc.
Second party verification - a buyer verifies that a supplier and/or the products of that supplier conform to a certain standard.
Third party verification - an independent party verifies that a supplier and/or its products conform to a certain standard. Independent, third-party verification is generally considered to provide more assurance.
Monitoring and verification systems tend to be designed differently depending on which part or aspect of the supply chain (production in the forest or manufacturing processes) they address:
Production in the forest -the classical monitoring system- forest authorities enforcing relevant laws - can be a reliable system where governance is strong, but it may not be adequate where governance is weak. Concerned business, environmental groups and labor and trade organizations, generally agree that independent, third-party verification of forestry operations is desirable, particularly in areas of high risk (Box 2: Areas of high and low risk of encountering unacceptable practices). Forest certification systems are intended to provide an alternative in this part of the supply chain.
Voluntary forest certification schemes have been developed to guide the marketplace. These systems allow interested producers to be independently assessed against a locally appropriate standard and to be recognized in the marketplace through a label that certifies compliance. The appropriateness of the standard includes having the right content for the right place, but also entails the process by which the standard was defined and implemented.
There are two major international systems for forest certification: the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification Systems (PEFC). Both are used by community and family owned forests and large landowners and/or industrial operations.1 These systems have similarities, but they also have differences that are considered important by their respective constituencies. Environmental organizations tend to prefer the FSC, while landowners and tenure holders tend to prefer PEFC. The choice of systems varies by geography, and many forest companies are certified to both systems depending on the location of their operations.
Table 3: General characteristics of the two major systems for forest certification, provides an overview of the general characteristics of these two systems. Table 3 is NOT meant to be an exhaustive comparison. A proper comparison should include more detail of aspects such as compliance with international standards, system governance, accreditation, certification, criteria used as basis for the systems, performance on the ground, and others (Nussbaum and Simula, 2005). A list of comparisons can be found in Section III of this guide. Some of these comparisons represent the interests of specific stakeholder groups that claim there are significant differences between the certification systems.
Manufacturing processes - once raw materials leave the forests and reach mills and factories, they may no longer differ significantly from those of other industries if processing facilities are located in developed areas. However, when mills and factories are in less developed areas there may not be enough government enforcement of environmental and social standards. Self- and third-party verification systems can be useful to report and verify status and progress in relation to general standards and organizational commitments (e.g., to reduce emissions or increase recycled content).
Environmental Management Systems (EMS) and Social Management Systems (SMS) can be useful in the manufacturing process. An EMS is generally defined as a series of processes and practices seeking to assess and reduce the environmental impact of an organization, while an SMS encompasses the management of interactions between an organization and its social environment. In general, EMS and SMS have four major elements (EPE, 2007; SMS, 2007):
Assessment and planning - identification of environmental and social aspects of interest, establishment of goals, targets, strategy and infrastructure for implementation.
Implementation - execution of the plan, which may include investment in training and improved technology.
Review - monitoring and evaluation of the implementation process, identification of issues.
Adaptive management and verification - review of progress and adjustments for continual improvement. Different EMS/SMS have various degrees of third-party verification.
The presence or absence of viable EMS and SMS programs can be useful in assessing a supplier's efforts to improve environmental and social performance and enhance compliance with pre-determined standards (EPE, 2007). Third-party verification systems, including chain-of-custody certification (Table 3: General characteristics of the two major systems for forest certification) and some ecolabels (Box 3: Ecolabels other than forest certification system) can also be of help.
Factors to consider regarding monitoring and verification
Many have compared certification standards, although comparisons are a complex task because of the many factors and elements that need to be considered. Section IV of this resource kit includes a list of resources about comparisons.
Different stakeholders have different perspectives; certification standards are backed by different constituencies, reflecting their different interests, concerns, and values. Environmental organizations tend to prefer the FSC while industry and tenure holders tend to prefer PEFC.
The choice of systems varies by geography, and many forest companies are certified to both systems depending on the location of their operations.
Approximately 7% of the world's total forest area is currently certified. The area under certification is growing rapidly and so is the supply of certified products; however, there may be cases when it can be difficult to meet the demand of certified products. Most certified areas are in developed countries.
In some regions small landowners have not embraced third party certification.
The need for independent monitoring and verification varies for different forest areas. A buyer with many supply chains might want to prioritize focusing on monitoring and verification efforts based on the perceived risks associated with sourcing from areas where information may be incomplete or misleading.
________________ 1In general, and at a global scale, large industrial forests and forests plantations are mostly certified to FSC, while public forests and small land holder forests are mostly certified to PEFC.