Last month, we reported on how FSC’s former Executive Director, Andre de Freitas, had raised serious doubts about the FSC’s Chain of Custody (CoC) certification mechanism, describing it as a “myth”. Now a new and, for the FSC, more worrying voice has been added to those expressing concern about the integrity of CoC certificates; that of NEPCon, one of FSC’s accredited certifiers.
As NEPCon explains in a new posting on its website, Chain of Custody certification is critical, because it
“traces and controls certified material flows throughout the supply chain. This provides assurance for the end consumer that the eco-labelled product they buy conforms to the rules of certification schemes“.
CoC auditing is normally done through annual audits that include on-site inspection, sample control of documents and staff interviews. However, as NEPCon explains, the system is:
“not well adapted for detecting fraud or gross errors in terms of the volumes [of certified material] that are sold as certified.”
NEPCon points out that:
“there is no systematic way of tracking transactions between certified companies, and that’s where the biggest potential for double-dealing lies. The company may well be selling products containing a volume of ‘certified’ timber material that exceeds the volume of certified raw material that they are buying. We don’t know how many Chain of Custody fraudsters there are.“
There have probably been serious problems with the CoC system since the very inception of the FSC. Under pressure from the certification bodies and FSC’s ‘economic interests’, it was agreed that, unlike the certification of ‘forest management’ (ie, the actual production of timber from forests’), the certification of the links in the supply chains of companies using or selling certified timber would not be open to pubic scrutiny. Of the many tens of thousands of reports of CoC certification for companies trading in certified timber, not a single one has ever been made public; FSC’s entire CoC system is shrouded in a veil of ‘commercial confidentiality’.
NEPcon Director Peter Freiburg: “Ignoring the issue could spell disaster”
This website has for many years reported on doubts about the Chain of Custody system. However, the lack of transparency in the system, plus the requirement to carry out frequent audits, has meant that it has been a ‘licence to print money’ for FSC’s accredited certification companies. As NEPCon’s director, Peter Freiburg says, “Many critics haven’t voiced their concerns very loudly for fear of causing harm to the systems or their participants.” Yet, as Freiburg points out the problem needs to be addressed because it “constitutes a threat to the credibility of eco-labels. Ultimately that could cause the systems to break down altogether“.
Whilst the FSC has toyed with other ways to verify that what companies and members of the public buy in good faith really is from FSC certified sources, it has remained largely complacent. It seems likely that any solutions to the problem will require much greater transparency in supply chains, which many companies will resist. Most importantly, it will likely mean a reduction in the certification companies’ profits, resistance to which has always been a serious obstacle to every attempted reform of the FSC.
As a comprehensive 2013 paper from researchers at UK’s Essex Business School and Cass Business School put it, FSC is an organisation in “crisis”. The long-overdue questions about the integrity of the Chain of Custody system is yet another major challenge to the FSC’s credibility.