Timber industry in jeopardy

RIGA - Latvia's leading export industry needs to adopt management
standards or else it will lose its market share, according to a
member of the country's World Wildlife Fund.

Timber, or wood and wood products, comprised almost 40 percent of
Latvia's exports in the first half of 1999, worth more than 195
million lats ($336.2 million).

"If we don't catch the train, we'll be pushed out of the market
sooner or later," said Edgars Stanga, who handles public relations
for the WWF.

Standards alone will not prevent a country like Latvia from being
pushed out of the forestry market. It is merely the first step toward
obtaining certification from the Forestry Stewardship Council, a
non-governmental organization that establishes the criteria for
global forest management.

Countries with certified forests are exporting timber through
environmentally sustainable practices: They are not depleting their
forests, ensuring they will be around for future generations.

SGS Forestry, the forestry arm of an international inspection
verification company, emphasized the economic as well as the
environmental significance of certification.

However, the FSC will not enforce its standards on a country, leaving
Latvia's forestry stockholders, forestry owners and managers and
environmental groups, to create their own.

Nor will it certify a country, deferring instead to an FSC approved
auditor such as SGS, which reviews the standard and decides if it is
acceptable. To date, Latvia has not certified a single forest.

At the same time, 17 million hectares of international forests have
been certified, almost half of them in 1999.

"Sooner or later, the certified timber will conquer the non-certified
timber," said Stanga.

Starting Sept. 23, SGS Forestry started to review Latvia's draft
forestry management standard to see if it complies with sustainable
practices.

Auditors said Latvia would be wise to certify, given the country's
reliance on the United Kingdom's imports of its wood products

"The U.K. market is an environmentally conscious market," said Mike
Garforth, an SGS associate based in Edinburgh, Scotland.

He cited the WWF 1995 plus group as a significant example: Its 90
members, who account for a quarter of all wood product purchases in
the U.K., are committed to buying wood from certified sources.

"So if Latvia wants to compete in that market, then they need to
pursue certification," Garforth said.

"And the label of choice of those companies in the U.K. who have this
policy of buying certified products, the label of choice is the FSC
label."

Certification requires a country's forestry industry to strike a
balance between environmental sensitivity, social responsibility and
economic viability, according to SGS Forestry. It ensures products
are well-cared for as they travel from the forest to the customer.

"Consumers need to be able to assure themselves that what they're
buying is from an environmentally sound source," said Garforth. "Or
that they're buying from a factory that's not employing child labor
or slave labor. And one way, perhaps the best way, of getting this
assurance is through independent certification."

Independent certification has been used in other business sectors for
a long time, and there are similarities between forest certification
standards to other quality management systems, said Garforth.

With a forest, certification means the wood product is grown in a
well-managed forest, one that it is not contributing to environmental
degradation, he said.

Still, fewer than 25 countries have certified their forests by the
beginning of September, and the number of hectares in each country
wildly vary, according to FCS's statistics.

Panama has certified merely 23 hectares; South Africa has certified
nearly 500,000.

Latvia has 3,258 hectares in its forest fund, according to its
Central Statistical Bureau, while its major competitors for Western
Europe, the U.K. and Sweden, have certified about 16,000 hectares and
8,900 hectares respectively.

But Latvia waited and hesitated about certifying its forests, while
other countries were receptive to market demands, according to Sophie
Higman, a forest audit specialist with SGS based in Oxford, England.

"It's quite difficult for people, from what have been traditionally
opposing backgrounds, to sit down together and work out a standard
they can all agree on as being a compromise," said Higman.

Yet a paper compromise cannot suffice on its own, so Higman and
Garforth tested Latvia's draft forestry management standards in
Selijas forest near Jekabpils during the week of Sept. 23.

"It's quite interesting when people develop a forest standard, it's
quite often written in a way that makes it difficult to assess in the
field," said Higman.

"What we're going to do is to test whether the standard is actually
auditable. Can we use it as a field check in forest management
practice in Latvia," said Garforth.

Details of the field test were not available at publication, as SGS's
auditors intended to release their review of Latvia's standard on
Sept. 30.

However, the auditors said they already encountered some skepticism
about forestry certification from the companies themselves.

"Some companies are clearly under considerable pressure from their
customers in the U.K., in particular, and other markets, and want to
move quickly, and [there are] other companies that are under less
pressure who feel no need to move at all," said Garforth.

But even the SGS auditor performed a delicate verbal dance between
environmental protection and economic concern that lent begrudging
support to those corporations skeptical about forestry certification.

"This whole business of certification is market driven," said Garforth.

"It's a market mechanism. It uses the power of the marketplace and
consumer purchasing power to help draw forward sustainable
development and sustainable forest management."