A recent paper in the Journal of Business Ethics provides an in-depth case study of FSC as a multi-stakeholder initiative.

The report, which is titled, “The Politics of Multi-Stakeholder Initiatives: The Crisis of the Forest Stewardship Council”, found that FSC has failed to transform commercial forestry practices and has not had a meaningful impact on stopping tropical deforestation.

The authors, Sandra Moog, Andre Spicer and Steffen Böhm, from the University of Essex and City University London, found that,

[F]ar from being a robust forum, the FSC is currently very fragile. This fragility has been caused by a range of problems, such as participating NGOs’ organizational incapacity to oversee monitoring and enforcement of FSC standards and downward pressure on the FSC standard caused by the rise of competing forestry eco-labels. These problems have progressively led to a decline in the legitimacy of the scheme, as endemic conflicts over the integrity of the scheme’s standards and enforcement practices have affected public perception of the FSC label.

The authors note that scandals about FSC have appeared in the mainstream press and several NGO members have left FSC. They write that,

These challenges have seriously compromised the FSC, both in terms of its on-going capacity to encourage democratic dialogue, and in terms of its ability to create more effective forms of regulation to tackle issues of global deforestation and forest degradation.

FSC rose out of the failure of the International Timber Trade Organisation and the United Nations to develop an international solution to deforestation, in part because timber-producing countries showed little interest in limiting the timber trade, or even setting up international tracking and monitoring systems. Moog, Spicer and Böhm write that this failure led to the principle of “sustainable management”, and FSC was an important part of this. The setting up of FSC saw forest activists involved in a “rather counterintuitive business”: trying to reduce deforestation by “becoming active participants in the marketing of timber products”.

When FSC was formed, it faced a choice. It could either set the highest possible social and ecological standards and accept that few forestry operations could meet the standards, or it could aim for a fast-growth strategy with a high volume of certified products. FSC chose the latter – and many of its problems came from this decision. Moog, Spicer and Böhm write:

The first task would be to gain market dominance and global recognition for the label. Perhaps standards could be raised over time, but in the initial phases, they must be set low enough that the majority of mainstream forestry concerns would be able, with some efforts at improvement, to participate in the scheme. The FSC thus set its sights on bringing the industrial forestry sector into the certification process.

Moog, Spicer and Böhm note FSC’s decision in 1995 to certify tree plantations was controversial, “given that monoculture tree plantations are clearly not the ‘well-managed forests’ that the FSC label was originally intended to support, but a type of large-scale industrial agriculture.” They also point out the impacts of industrial tree plantations on biodiversity, local communities and their environment.

The authors also note the controversies around FSC’s “mixed sources label”, that allow products “with a significant portion of non-FSC-certified wood to carry an FSC label”. FSC’s justification for the label was to “increase availability of FSC certified products”, according to FSC’s website. But verifying that the “controlled wood” used in these products meets any standards at all has proved to be a nightmare for FSC.

Moog, Spicer and Böhm explain the conflict of interest at the heart of the FSC system: certifiers are paid directly by the forestry companies they certify. The authors quote from a 2008 letter to FSC from FERN, Greenpeace, Inter-African Forest Industry Association, Precious Woods, Swedish Society for Nature Conservation and Tropical Forest Trust:

At the moment there are no real consequences for certification bodies for poor performance, and few incentives to do better. This leads to corners being cut to compete for contracts and to increase the number of clients a certification body can take on. It is cheaper to do a poor quality audit and consultation than a high quality one, and the system fails to address this.

The authors also highlight that “it is unclear whether certification has actually helped address the issue of tropical deforestation to any significant extent”. Moog, Spicer and Böhm argue that,

The contemporary regime of market-based governance will simply not be robust enough to tackle the crisis which continues to decimate the world’s forests without, 1) a reduction of consumption in rainforest commodities, 2) improved legal protection of forest-based populations’ land tenure, 3) state backing of highest common denominator standards for forestry, and 4) the commitment of significant public funding, not only for enforcement of standards, but in order to financially subsidize forests and forestry operations, especially in the tropics.

The authors quote from a 2004 presentation given by Marcus Colchester, then-director of the Forest Peoples Programme, at the IUCN world conservation congress in Bangkok. Colchester argues that eco-labeling schemes like FSC are limited because they fail to use the state’s legal and financial resources, and its regulatory power:

What indeed is the role of the state in this model of self-regulation? I think we need to give a role to democratic processes—to the State as a process of countervailing powers — if we are to control and regulate the private sector…. This is the kind of real accountability that people seek… I think there is a major problem with the current model of self-regulation, which gives no role to the State, to the rule of law, or even to leverage for reformed governance by government itself. Instead, almost without realizing it, conservationists have replaced the organs of democracy: we now have consumers instead of enfranchised citizens; we have NGOs in watchdog roles to replace the executive; we only have recourse to the media — the 4th Estate — as a court of appeal. So am I saying conservationists should abandon market-based reforms? No. I think there is a role for self-regulation to promote standards of ‘best practice’ — but this is only leading to market leaders establishing themselves in ‘niche’ markets. These processes do not lead to wider sectoral reforms or provide real accountability.