By: Retno Kusumaningtyas

Recently, Greenpeace International announced that it is leaving the Forest Stewardship Council (FSC). Since its establishment in 1994, Greenpeace has been advocating FSC as setting more stringent standards than competing certification systems, such as PEFC. But Greenpeace has lost confidence that the certification system can consistently guarantee enough protection to local peoples’ rights and forests, especially in regions with weak governance.

Losing one of its founding members and one of its most vocal supporters in the NGO community, means a serious blow for the credibility of the FSC certification system. This also affects the multi-stakeholder initiatives set up for other commodities following the FSC model, such as the Roundtable on Sustainable Palm Oil (RSPO), the Roundtable on Responsible Soy (RTRS), and the Marine Stewardship Council (MSC). The NGO support for these initiatives generally was lower than for FSC and tends to decrease further. Greenpeace never joined the RSPO, RTRS and MSC. From the start, some of these initiatives, suffered from poor credibility among NGOs.

Several issues are plaguing these commodity roundtables, such as less stringent standards in FSC, MSC, RSPO and RTRS. Very prominent is the enduring lack of transparency on where, and under which conditions, commodities are produced. Greenpeace calls on FSC to “transparently publish the mapped boundaries of sourcing areas and assessment reports to allow external monitoring and input”. Interestingly, in the palm oil industry various traders and downstream buyers have responded to similar calls by publishing detailed data on the suppliers where they source their palm oil from. As of now, such transparency is not yet demanded by the RSPO, FSC and other certification schemes. It would be a step forward if this would become part of commodity certification processes, with producers, buyers and traders having to offer detailed sourcing information according to a pre-determined set of standards.

The second issue is the dominance of the primary commodity producers, sometimes supported by their governments, in standard setting and decision making. This results in weak standards and poor enforcement among non-compliant members. The people most affected by the industries’ activities are underrepresented and social and environmental interests are insufficiently recognised. This holds true for concerns around deforestation and climate change, but even more for the rights of local communities and labour rights. For instance, a mere two labour unions are members of the RSPO, on a total membership of over 3,000. If a multi-stakeholder initiative wants to have relevance in an industry, it should let all different stakeholders participate on the basis of mutual respect for their rights and interests.
                                             
A third problem is how the implementation and monitoring of the certification schemes is contracted out to many private auditors. As the companies being monitored pay their bills and there is a lot of competition among them, the auditors are usually reluctant to be too critical of their clients. A system needs to be put in place where auditors are less dependent on the companies that they audit, by changing the way auditing assignments are allocated and the way auditors are paid for their work.

Together, these problems lead to the disappointing conclusion that, while commodity roundtables such as FSC and RSPO may have successfully formulated new standards for the forestry and palm oil sectors, they are failing to transform commercial practices across the board and to address (tropical) deforestation in a structural way - which was the reason they were established in the first place.

So, what next? Both NGOs and downstream companies need to make up their mind. A coordinated NGO strategy regarding roundtables is missing more than ever. NGOs should reflect on what strategy is more effective to create the desired change they wish to see in multi-stakeholder initiatives. They must critically ask themselves whether it is not more effective to stay and continue contributing constructive ideas and pressure from the inside, than to leave with the hope that it serves as a wake-up call. Also, a key to success lies in the hands of the downstream companies, who use the commodities. If they really want the roundtables to become credible instruments to implement their promise to consumers of sourcing in a responsible way, they need to team up more consistently with the NGO world to reform the auditing processes, create more transparency and resist the pressure of the commodity producers to water down standards and compliance. If not, their reputational risks will surely increase.

For more information or to discuss research opportunities on this topic, please contact: Retno Kusumaningtyas r.kusumaningtyas@profundo.nl