On December 8th, FSC Brazil announced that the certificate of the country’s largest certified forestry operation, Jari, had been suspended following raids on companies suspected of massive fraud and laundering of illegal timber. Such certificate suspensions or terminations usually provoke claims from FSC’s supporters and apologists that “this shows that the system is working” – because unworthy companies are losing their endorsement. More often, however, it merely raises questions as to how the company was ever certified in the first place, and how it maintained its certificate for often many years despite there being clear problems. Jari is  certainly one of these cases. Inevitably, it also raises serious questions about the ability of the FSC to properly control the work of the certification companies  – and whether wood-users were misled about the acceptability of the company’s certified products in the mean time.

The Jari forestry project has had a long and highly controversial history, starting with the private acquisition of 1.6 million hectares of land in Brazil’s Para state in 1967 by American businessman Daniel K Ludwig. From 1982 to the 2000s, the company has been progressively cutting down native forest and replacing it with various species of fast-growing exotic trees, such as Gmelina, and producing wood-pulp. In 2000, the entire operation was acquired by Brazil’s Orsa Group. 715,000 hectares of forest were FSC certified by California-based SCS in 2004, with the company being recertifed in 2009 and 2014.

The suspension of Jari’s FSC certificate follows enforcement action by several Brazilian Federal authorities, including the Environmental Agency, IBAMA, in which searches and seizures took place at over 4o locations linked to five companies in Pará, São Paulo and Curitiba. According to Brazilian government sources, Jari had used elaborate but well-known mechanisms to circumvent the requirements for timber to come from controlled and managed sources. Fictitous timber production from fictitious felling sites (which might belong to third parties) was allegedly being used to create official timber tracking numbers, but these ‘credits’ were then used to cover actual timber dervied from other, illegal, sources.

The alleged timber laundering was operating on a huge scale, involving some 9,000 cubic metres of logs, or roughly 220 truckloads of prime species ipe and tabebuia. The authorities noticed that Jari had 50% more of this wood in its possession than was approved in the company’s own management plan. The tracking numbers showed that logs had supposedly come from another forest management area some 500km distant. Despite there being no road connection to this area, the timber had somehow managed to arrive at Jari’s yards in less than two days – a physical impossibility.

This is embarassing for SCS and FSC because the company had been re-certified for forest management and chain of custody only 18 months prior, in July 2014. Of course, it’s possible that none of the alleged frauds were taking place at the time SCS conducted its audit. However, SCS’s own reports show some worrying problems were noticed. In the annual assessment carried out in November 2013, which was the basis for the recertification, SCS’s assessors issued  two Major Corrective Action Requests in relation to irregularities about timber sources and traceability. One noted that the information entered in Jari’s wood traceability control system “does not match the real situation found in field operations”. A second noted that:

“It was verified, during the audit, that the company did not abide by the forest management legislation regarding product list on the transport document for logs found at the logyard. Log lengths, as indicated on the transport list, did not match the real measurement on any of the samples taken for verification.”

The assessment also found that there had been “significant problems in implementation of management activities.” Altogether, seven Major CARs were listed as ‘preconditions’ to the certificate (along with 18 Minor CARs and Observations, to which were added another 12 during the annual  surveillance in November 2014). Rather than ringing alarm bells, and forcing deeper probing into the log traceabilty system in particular, the Major CARs had all been closed out within a few months. Brazil’s Public Ministry contested the positive findings of  SCS’s 2014 certification report, but the certificate was re-issued anyway.

In fact by the time SCS carried out its November 2013 assessment, other major issues were already starting to surface which, like the problems with log traceability, should also have rung alarm bells. Earlier that year, the Brazilian authorities had been forced to intervene in Jari, following reports to the office of the Ombudsman of serious conflicts between the company and local communities. FSC Brazil became involved in a mediation process. SCS’s 2008 certification assessment had already found that Jari was not properly mapping the location of communities within its concession, including those of indigenous people. This prompted the issuing of a Major CAR , but this was promptly closed out. Nonetheless, the problems with local communities continued. This suggests that the certifier was prepared to accept weak commitments or inadequate measures as sufficient to close-out CARs.

Once again, something is going seriously wrong with the FSC system when there are clear warning signs of major problems with forest management and CoC assessments, but certificates are issued regardless. In a situation where the certifiers are competing for business and contracting directly with the company they certify, and are paid by them, there are strong incentives to issue certficates and hope for the best…

FSC’s credibility will continue to deteriorate until such time as the Secretariat is able to confront the conflict of interest that underlies all of these problems.