FSC’s re-association with Danzer: surely some mistake?

In August this year, FSC proudly announced that it had ‘re-associated’ itself with the Swiss timber conglomerate, Danzer.  But there remain serious doubts about whether FSC’s credibility will be further damaged by this decision.

Danzer was only the second company to have been put into FSC’s black-books under its policy of ‘disassociation’, which is one of the very few sanctions against companies which the FSC affords itself. The disassociation, in May 2013, followed a November 2011 complaint from Greenpeace about the dismal human rights record and “atrocities” allegedly committed by local police and military, transported and paid for by the Danzer subsidiary SIFORCO in the Democratic Republic of Congo. It accused the company of causing “social chaos and plundering Congo’s rainforests”.

The readmission of Danzer had involved ‘independent’ monitoring by the UK-based Forest Peoples’ Programme of Danzer’s attempts to rectify the problems which led to the expulsion. According to FPP Africa regional coordinator ,John Nelson, the changes Danzer has now implemented set “a new benchmark that should be followed by all certified logging companies operating in the Congo Basin”. Welcoming Danzer back into the fold, Kim Carstensen, Director General of the Forest Stewardship Council, said “This story demonstrates the rigor and real benefits of FSC certification. We are convinced they now have what it takes to manage well-performing FSC certified operations in the Congo Basin.”

Unsurprisingly, Greenpeace announced that they “strongly disagreed” with Danzer’s readmission. Greenpeace pointed to the failure of SIFORCO to commit to a process of Free Prior and Informed Consent (FPIC) for local communities in the company’s extensive concessions, conflict with whom had led to the original disassociation. The organisation said that Danzer’s re-association was happening “far too soon to properly determine if the agreed improvements needed to prevent further human rights violations have been completed.”

Danzer had washed its hands of the SIFORCO problem by selling the company in March 2012, but less than a month after its readmission, another shadow was cast over the decision to readmit it to the loggers’ greenwashing club. The report of the official Independent Observer (IO) of forests in neighbouring Republic of Congo raised doubts about the propriety of funds made available to local authorities by Danzer’s remaining Congo Basin logging subsidiary, IFO. According to the report, in February 2013, IFO had paid 16,500,000 FCFA (25,154€) in cash to the president of the Sangha Department Council to cover this institution’s annual meeting.  The IO noted that the company’ s ‘Local Development Fund’ from which this payment appears to have been debited “is not meant for this use” but for community development projects only – and should not be paid in cash, but by check.  Contacted by the IO, the president of the Sangha Department Council acknowledged the “loan” from IFO and promised to reimburse it in 2015.  A spokesperson for Danzer, Ulrich Grauert has said the Fund is “authorised” by the president of the Sangha Department Council. However, the decree establishing the Fund also requires withdrawals to be authorised by IFO. Grauert admitted that only half of the development funds in recent years have actually been spent on projects to benefit local communities. The rest – some 68,500 euros – has been spent on “administration” of the fund.

FSC-Watch has not been provided with any evidence that Danzer finds this freedom to use funds intended for local development – and the imbalance in its use – at all unusual. It appears that local authorities are able to dip their fingers at will into IFO’s fund – though Grauert says that “IFO could verify that the money was spent for development projects”. Local villagers might not be so fortunate: the amount paid into the development fund, at only 200 FCFA (or about 38 US cents) per cubic meter, is a miserly 0.1% of the FOB value of a cubic metre of sapelli timber. In 2010, as reported on 21st January in the national newspaper, Les Dépêches de Brazzaville, IFO’s Managing Director was forced to leave the logging town of Ngombé “following a peaceful protest” by local people. Ngombé had been “paralyzed” by employees and local people critical of the director’s “methods” and “authoritarianism,” which they consider “contrary” to FSC standards.

This will all come as a double embarrassment for FSC. In July 2013, only four months after IFO’s local fund was put to questionable uses, an FSC delegation to the Republic of Congo led by the Director General Kim Carstensen had expressed “its appreciation of the dedication and tireless efforts of IFO towards sustainable forest management.”

Once again, FSC finds itself in the stranded in the reputational minefield of the Congo Basin logging industry. It clearly has a long way to go to learn how this industry really works.

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