Changes to FSC Standards: Implications for U.S. Hardwoods

Michael Snow, executive director of American Hardwood Export Council, recently released an AHEC Trade Alert concerning upcoming changes to both the FSC Chain of Custody (CoC) and Controlled Wood standards that are expected to have major implications for US hardwood producers, particularly those of you using the FSC Controlled Wood Standard.  AHEC is sending this Trade Alert now because of a critical timing issue associated with the deadline set by FSC for receipt of comments on the latest draft of FSC-US National Risk Assessment (FSC-US NRA), which must be received by no later than 28th February 2018 (to be sent to Amy Clark Eagle by email at a.eagle@us.fsc.org). 
 
AHEC is monitoring the situation and considering various strategic options. The immediate concern is to encourage those U.S. hardwood exporters involved in FSC certification to actively participate in the drafting process for the FSC-US NRA, specifically to provide comments by the Feb. 28 deadline. 
 
To follow is the complete Trade Alert-FSC Statement:
 
Changes to FSC Standards: Implications for U.S. Hardwoods

Major changes have been introduced into the FSC chain of custody (CoC) standard and
requirements for Controlled Wood that will require substantially more time and effort on
the part of individual certificate holders in the U.S. hardwood sector. The changes are
considered in detail in the updated Seneca Creek Assessment of Lawful Harvesting &
Sustainability of US Hardwood Exports, commissioned by AHEC last year, which is now
being finalised and will soon be published by AHEC.
A comprehensive review of the results of the updated Seneca Creek study will be
provided in the next AHEC market report. However, the FSC aspects of that study are
highlighted here because of a critical timing issue associated with the deadline set
by FSC for receipt of comments on the latest draft of FSC-US National Risk
Assessment (FSC-US NRA), which must be received by no later than 28th February
2018 (to be sent to Amy Clark Eagle by email at a.eagle@us.fsc.org).

For now, it is worth highlighting the following key conclusions of the Seneca Creek study:
• The preponderance of evidence collected by the Seneca Creek team strongly
indicates that there is very low or "negligible" risk that US hardwood exports
contain wood from illegal and unsustainable sources.
• All states in the US hardwood-producing region can be considered Low Risk of
sourcing illegal hardwoods per the requirements of the EU Timber Regulation, the
Australia Illegal Logging Prohibition, Japan’s Goho program, and the due
diligence and risk assessment requirements of the certification programs
(FSC/SFI/PEFC) operating in the United States.
• Overall, federal and state forest programs contribute to ensuring sustainable and
legal hardwood supplies and, in some important respects are even more
comprehensive than at the time of the previous report in 2008, particularly due to
introduction of requirements for statewide forest resource assessments and
wildlife assessments, measurable gains made in the effectiveness and compliance
with BMPs in all hardwood producing states, and the rise in area of conservation
easements.
• Adoption of voluntary forest management certification programs remains a
significant challenge in the hardwood sector (with numerous technical barriers to
certification being identified by Seneca Creek)….the availability of certified forest
content remains limited and will likely remain so in the near term.
Implications for U.S. Hardwoods of Changes to FSC Standard
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• Absent availability of certified hardwood products, the data and information
compiled for this report provides evidence that US hardwood supply chains meet
all current due diligence standards as legal and sustainable.
While these results of the updated Seneca Creek study are positive, the conclusions
relating to FSC are less clear-cut. Those U.S. hardwood exporters that have participated
in FSC CoC certification will be aware that the 2008 Seneca Creek risk assessment served
as a primary source of information for company-developed risk assessment of US
hardwood sourcing areas, enabling companies to demonstrate that the supply chain for
US hardwoods was Low Risk for all five FSC Controlled wood categories: (1) legality; (2)
violation of traditional and civil rights; (3) threat to High Conservation Value Forest
(HCVF); (4) conversion and deforestation; and (5) use of GMOs.
However, the changes to the FSC standards since publication of the original Seneca
Creek assessment mean that suppliers wishing to continue to demonstrate FSC
Controlled status for U.S. hardwoods may be less able to rely only on the updated
Seneca Creek assessment and may well be required to implement additional “Control
Measures” specified by FSC.
This is partly due to the decision by FSC to phase out the use of company-developed risk
assessments, to be replaced by FSC National Risk Assessments, and partly to the
introduction of much more restrictive criteria to demonstrate that wood isn’t from
conversion forest or high conservation value forest (as defined by FSC).
The FSC membership voted to phase out the use of company-developed risk
assessments in 2014, taking the view that a certificate holder conducting a risk
assessment of its own supplies inherently involves bias and a conflict of interest
(ironically, the existence of the Seneca Creek study means that this criticism is much less
relevant to U.S. hardwood suppliers).
The revised FSC Controlled Wood Standard (FSC-STD-40-0-05 V3-1) requires that FSC
National Risk Assessments, prepared in a participatory process managed by FSC, be
used to identify areas within a country that are at risk (called “specified risk”) from forest
activities and to establish the risk-mitigation actions (called “control measures”)
certificate holders can use if they wish to purchase wood originating in those areas.

FSC timetable to phase out company-developed risk assessments
At present company-developed risk assessments are still viable in the US, but these will
be phased out and replaced by the FSC-US NRA when it is finalised (expected in July this
year). FSC has specified that no company-based risk assessments will be permissible
beyond 1st January 2019. Until then, the updated Seneca Creek assessment, together with
the draft FSC-US NRA, can be used by companies as supporting information when
conducting and updating individual company-developed risk assessments.
In the draft FSC-US NRA, of the five categories of unacceptable wood in the FSC
Controlled Wood standard, “Low Risk” is assigned to three, namely: (1) legality; (2)
Implications for U.S. Hardwoods of Changes to FSC Standard
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violation of traditional and civil rights; and (5) use of GMOs rights. This low risk
assignment covers the entire U.S. and no “Control Measures” are required.
However, the draft FSC-US NRA assigns “Specified Risk” for the two other categories of
unacceptable wood, namely; (3) threat to HCVF; and (4) “conversion and deforestation”.
The “specified risk” designation applies to specific delineated regions of the United
States, including large areas of hardwood forest.
FSC’s new standard for low risk designation of threats to HCVF has a higher bar than the
previous standard requiring identification and detailed assessment of the potential
impact of forest operations on a much wider range of forest ecotypes. The draft FSC-US
NRA designates “Specified Risk” for the following forest types from which hardwoods
may be sourced:
• “Critical Biodiversity Areas”: the Central and Southern Appalachians, Cape Fear
Arch, Florida Panhandle, and the Ouachita River Valley.
• Rare ecosystems and habitats including mesophytic cove sites in the Appalachian
region and late successional bottomland hardwood sites in the Southeast and
Mississippi Alluvial Valley regions.
• Priority species habitat for the Cheoh Bald Salamander (which occurs in North
Carolina and was recently dismissed for inclusion in the Endangered Species Act
by the US Fish and Wildlife Service) and the Ivory Billed Woodpecker (a species
listed in the ESA which is extremely rare, the only confirmed sighting in the last
decade being in the "Big Woods" region of eastern Arkansas).
For forest conversion, the FSC-US NRA designates Specified Risk for portions of the
Southeast Region (not including Mississippi, Alabama, and Arkansas), a part of Louisiana,
and the entire Pacific Coast Region due to forest loss and higher rates of urbanization.
This designation is particularly surprising given that analysis of US Forest Service Forest
Inventory Analysis (FIA) and satellite-derived National Land Cover Dataset (NLCD)
indicate that forest cover in the U.S. is relatively stable. That is also the conclusion drawn
in the updated Seneca Creek report that states forest area in the hardwood region
generally, and in each of the hardwood states specifically, is stable.
However, the draft FSC-US NRA uses a more specific threshold of forest extent and
concludes that the FIA and other available data do not demonstrate with statistical
confidence that forest loss does not exceed the revised FSC threshold of less than 0.02%
per annum.

FSC mandated “Control Measures” for HCVF and conversion forest

For each “specified risk” the draft FSC-US NRA identifies the control measures to be
implemented by FSC certificate holders to claim “Controlled” origin for wood from
affected regions. For HCVF, certificate holders would be required to:
Implications for U.S. Hardwoods of Changes to FSC Standard
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• educate their procurement foresters and suppliers about the specified risk
designation;
• make a statement of commitment that inputs from areas of Specified Risk are
considered unacceptable;
• make a statement that suppliers are expected to either: 1) avoid sources from
these areas, or 2) mitigate the threat prior to sourcing from these areas;
• provide "guidance and resources" for the identification of the HCV(s) and forest
management recommendations for avoiding harm to the HCV(s).
For conversion forest, certificate holders would be required to:
• avoid any material from converted forest areas that are greater than 100 acres
• provide procurement foresters and suppliers with educational materials including
information about why conversion is specified risk and a statement that any
conversion of forest to plantation or non-forest use may have negative impacts
on social, economic and/or environmental values.
• participate in collaborative dialogues with stakeholders to identify a focused set
of actions to reduce the risk of conversion
The details of control measures will be worked out during regional “stakeholder”
meetings to occur during the summer of 2018 which organizations holding FSC
Controlled Wood certificates will be required either to attend in person, send a
representative or to review and understand the meeting report shared by FSC US, and
then, during subsequent audits be able to demonstrate their knowledge of the meeting
outcomes and implementation of the Control Measures to their auditor.

Comment on FSC-US national risk assessment

AHEC is monitoring the situation and considering various strategic options. The
immediate concern is to encourage those U.S. hardwood exporters involved in FSC
certification to actively participate in the drafting process for the FSC-US NRA,
specifically to provide comments by the 28th February deadline.

There are positives to be taken from the FSC-US NRA. The low legality risk assessment is
reassuring from the perspective of U.S. hardwood conformance to laws like the Lacey
Act and EU Timber Regulation, reinforcing the very clear conclusion of Seneca Creek
review that there is negligible risk of any illegal wood entering U.S. hardwood supply
chains. It’s particularly encouraging when it is considered that FSC now requires risk of
illegality to be assessed against 21 different indicators compared to only 4 indicators
when the original Seneca Creek study was carried out.
At the same time, the FSC-US risk designations on HCVF and conversion forest are open
to challenge, particularly for hardwoods which derive mainly from private non-industrial
forest owners, where management of the land has historically changed from forests to
agriculture, and back again. Conversion of forests in the U.S. is largely driven by land use,
Implications for U.S. Hardwoods of Changes to FSC Standard
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tax policy and economic factors that are not typically under the control of the forest
owner, or for that matter, the control of the timber purchaser.
Even if the risk designations remain unchanged in the final NRA, there is also an
opportunity to influence the FSC process to ensure that the Control Measures remain
viable for hardwood suppliers. The updated Seneca Creek study can assist in this
because it summarises extant protections, conservation programs, BMP monitoring, and
public and private sustainable forestry programs in each hardwood state operating at
landscape scale that already address HCVF and forest conversion issues.
It is possible that AHEC could commission additional hardwood-focused assessments to
help “close-out” the risks identified in the FSC-US NRA relation to HCVF and conversion
forest in the draft FSC-US NRA. However, FSC’s tighter parameters may mean this
national-level approach is no longer technically viable or cost-effective, particularly as it
only helps deliver “Controlled” status for a single scheme. It is also problematic for
AHEC’s neutral stance in relation to different certification schemes.
Meanwhile AHEC will continue to build on the various tools it has developed to assist U.S.
hardwood exporters to demonstrate products are from legal and sustainable sources.
The conclusions of the updated Seneca Creek study reinforce the statements of legality
and sustainability contained in the American Hardwood Environmental Profile (AHEP)
which can be provided by all AHEC members with each export consignment or supply
contract as required.
 


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