A comparison of the Forest Stewardship Council and the Programme for Endorsement of Forest Certification

Report prepared by Forest Industries Intelligence Limited for the Confederation of European Paper Industries April 2006 Edition

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

Contents 1. Executive Summary ...................................................................................3 2. Introduction ................................................................................................4 2.1 Two global certification frameworks ..................................................4 2.2 Source documentation ........................................................................4 2.3 Report structure ...................................................................................6 3. Summary comparison of the FSC and PEFC...........................................6 3.1 Scheme objectives and overall structure ...........................................6 3.1.1 Similarities......................................................................................6 3.1.2 Differences .....................................................................................7 3.2 Content of forestry principles .............................................................7 3.2.1 Similarities......................................................................................7 3.2.2 Differences .....................................................................................9 3.3 Forestry standards-setting process ...................................................9 3.3.1 Similarities......................................................................................9 3.3.2 Differences ...................................................................................10 3.4 Certification and accreditation procedures .....................................11 3.4.1 Similarities....................................................................................11 3.4.2 Differences ...................................................................................12 3.5 Chain of custody standards, labelling and environmental claims .13 3.5.1 Similarities....................................................................................13 3.5.2 Differences ...................................................................................14

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

1. Executive Summary The report draws on research undertaken during development of the CEPI Matrix and www.forestrycertification.info website to provide a detailed comparison of the FSC and PEFC certification frameworks. Together, these two frameworks account for over 98% of forest independently certified around the world, and the majority of products bearing independently verified claims of good forestry practice. The report highlights numerous similarities between the PEFC and FSC schemes, an inevitable consequence of two organisations striving to achieve the same ultimate objective (of sustainable forest management) using essentially the same mechanism (independent third party assessment of onground forestry practices against a set of forestry standards). The report demonstrates that both schemes are promoting and reinforcing a similar concept of sustainable forest management. Both schemes recognise that forestry should aim to conserve the full range of forest functions economic, social, and environmental. At the same time, both schemes acknowledge the need for trade-offs during the development of forestry standards. Both schemes seek to achieve an appropriate balance between environmental, economic and social objectives through a participatory, consensus-building approach. An analysis of the content of the FSC Principles and the Pan European Operational Level Guidelines (PEOLG) that has so far provided the basis of the PEFC scheme, reveal numerous components which are essentially equivalent including those relating to: legal conformance; forest management planning; forest monitoring; forestry training; recognition of customary land rights; maintenance of forest cover and area; sustained yield production; controls on the use of exotic species; bio-diversity conservation; protection of special sites; rural employment opportunities; protection of soil and water courses; controls on use of chemicals; and health and safety issues. The main differences in the PEFC and FSC forestry principles relate to the level of detail provided on different aspects of forest management, for example FSC is more explicit than PEFC in its requirements for public consultation during forestry operations, while PEFC is more explicit than FSC in its requirements for forest protection against pests and fire. Certain key differences in the structure and operation of the two certification schemes are identified. For example, PEFCs role to endorse fully autonomous certification schemes operating at national level is contrasted with FSCs role to act as a global framework to accredit certification bodies. This in turn has led to responsibilities for various certification functions accreditation, certification, standards-setting being allocated differently by the two schemes. However, both schemes are seeking, at minimum, to ensure conformance with exactly the same set of international standards evolved by ISO. This has led to many areas of commonality in the procedures adopted for standards-setting and independent third party verification.

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

2. Introduction 2.1 Two global certification frameworks During the last decade, two international forest certification frameworks have evolved: the Forest Stewardship Council (FSC) and the Program for Endorsement of Forest Certification (PEFC). In December 2005, these two frameworks together accounted for over 250 million hectares of certified forest land and around 6600 chain of custody certificates. Only a tiny area of the worlds existing certified forest (less than 5 million hectares) and a handful of chain of custody certificates have been issued under schemes not affiliated to either of these frameworks. Both schemes aim to operate at a global level. In December 2005, the PEFC Council had endorsed 21 schemes that had certified 186 million hectares of forest in Europe, North and South America, and Australasia. PEFC members include several other national schemes seeking eventual endorsement, one of which is located in Russia and another in Africa. PEFC endorsed schemes had issued 2305 chain of custody certificates in 20 countries at the end of 2005. In December 2005, the Forest Stewardship Council had certified 68 million hectares of forest in 65 countries, recognised national initiatives in 36 countries, and endorsed national or regional forest certification standards in 11 countries. FSC had issued over 4300 chain of custody certificates in 73 countries distributed on all the worlds continents. A major objective of the CEPI Matrix and associated website (www.forestrycertification.info) is to compare forest certification schemes irrespective of their allegiance to any particular labelling brand. However, this more detailed comparison of the FSC and PEFC is provided in recognition of the growing market presence of these two international frameworks, and the inevitable interest that this generates amongst customers and companies involved in the paper and wood products trade. 2.2 Source documentation This comparison was undertaken in December 2005 and is based on documentation understood to be current at that time. A first review of the comparison based on comments received was undertaken in April 2006. While a wide range of documentation available on the schemes respective websites (www.fsc.org and www.pefc.org) has been consulted, the key documents are as follows: For the FSC: FSC-STD-01-001, Principles and Criteria for Forest Stewardship, most recently amended April 2004 FSC National Initiatives Manual, September 1998

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

FSC-STD-20-001, general requirements for certification bodies, published November 2004 FSC-STD-20-002, structure and content of forest stewardship standards, published March 2004 FSC-STD-30-002, Structure and content of forest stewardship standards, published November 2004 FSC-STD-30-003, Local adaptation of generic forest stewardship standards, published November 2004 FSC-STD-30-006, Stakeholder consultation for forest evaluation, published November 2004 FSC-STD-30-010, FSC standard for forest management enterprises, supplying non FSC certified controlled wood, published October 2004 FSC-STD-40-004, FSC chain of custody standard for companies supplying and manufacturing FSC-certified products, published October 2004 FSC-STD-40-005, FSC standard for non FSC-certified controlled wood, published October 2004 FSC-STD-40-201 FSC on-product labelling requirements (for new labels), published October 2004

For the PEFC: PEFC Council Statutes, agreed by the PEFC General Assembly, 22 November 2002 Rules for Standards Setting, first agreed by the PEFC General Assembly, 22 November 2002, and most recently amended on 28 October 2005. Rules for Certification Schemes and their Implementation, first agreed by the PEFC General Assembly, 22 November 2002, and most recently amended on 28 October 2005. Pan-European Operational Level Guidelines for Sustainable Forest Management - PEOLG (PEFCC reference document B) adopted by the Third Ministerial Conference on the Protection of Forests in Europe in Lisbon/Portugal in June 1998 as annex 2 of the Resolution L2 (PanEuropean Criteria, Indicators and Operational Level Guidelines for Sustainable Forest Management (http://www.mcpfe.org). Chain of Custody of Forest Based Products Requirements, published by the PEFC Council, 17 June 2005 Certification and Accreditation Procedures, first agreed by the PEFC General Assembly, 22 November 2002, and most recently amended on 28 October 2005. Endorsement and Mutual Recognition of National Schemes and their Revision, first agreed by the PEFC General Assembly, 22 November 2002, and most recently amended on 28 October 2005. With regard to PEFC references, a key point to note is that this comparison of international forestry principles is based on the Pan-European Operational Level Guidelines for Sustainable Forest Management PEOLG. The PEFC Council requires that the PEOLG form the reference basis when PEFC national and regional certification criteria are elaborated in regions covered

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

either by the Pan-European or Montreal sustainable forestry criteria. However in tropical regions, PEFC states that the ATO/ITTO principles, criteria and indicators for the sustainable forest management of African tropical forests (ATO/ITTO PCI) will form the reference basis. In the time available, it has not been possible to include analysis of the ATO/ITTO principles in this comparison. At this stage, we believe this is a minor omission since the ATO/ITTO PCI has not yet been used as the reference basis for any PEFC assessment. Even the Brazilian Inmetro scheme, which used the ITTO criteria as a reference for development of a standard for native forests, was assessed in 2005 by PEFC against the PEOLG. Furthermore, an independent study undertaken for PEFC by the consultancy Indufor concluded that the ATO/ITTO and PEOLG criteria are compatible. And four outstanding issues identified in the Indufor report have been explicitly added to Annex 3 of the PEFC Technical Document. 2.3 Report structure Section 3 is a narrative report highlighting specific similarities and differences of PEFC and FSC categorised according to the following scheme elements: scheme objectives and overall structure; content of forestry principles; forestry standards-setting process; certification and accreditation procedures; chain of custody standards, labelling and environmental claims. Section 4 comprises a table allowing direct comparison of FSC and PEFC across the full range of forest certification components. 3. Summary comparison of the FSC and PEFC 3.1 Scheme objectives and overall structure 3.1.1 Similarities Both schemes are striving to achieve the same ultimate objective of sustainable forest management. The first objective of the PEFC Council is To promote Sustainable Forest Management through the implementation of PEFC. The first objective stated in the FSC Mission statement is to promote environmentally appropriate, socially beneficial, and economically viable management of the world's forests. Both schemes are seeking to achieve this core objective using essentially the same mechanism: independent third party assessment of on-ground forestry practices against a set of pre-determined forestry standards. Both schemes acknowledge that sustainable forestry requires conservation of the full range of forest functions economic, social, and environmental. At the same time, both schemes acknowledge the need for trade-offs during the development of forestry standards.

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

Both schemes seek to achieve an appropriate balance between environmental, economic and social objectives through a participatory, consensus-building approach. Both schemes seek, at minimum, to ensure conformance with exactly the same set of international standards, evolved by ISO, for standards-setting and independent third party verification. 3.1.2 Differences With regard to scheme objectives and overall structure, the main difference is that PEFC identifies as a central function to assess the conformity of participating certification schemes, whereas FSC identifies as a central function to evaluate and accredit certification bodies. In other words, PEFC operates by endorsing fully autonomous national forest certification schemes capable of independent existence outside the PEFC framework. In the PEFC, accreditation of certification bodies is entirely the responsibility of national accreditation organisations. FSCs approach is more centralised, involving development of an international system to accredit certification bodies. FSC also adopts a more centralised approach to the development of forest certification principles. In the FSC system, all forest certification standards should be in accordance with a set of International Forestry Principles and Criteria developed by FSC International. In contrast, PEFC plays no role in the development of international forestry principles, and instead relies on inter-governmental principles developed and adapted for different forest regions of the world (e.g. Pan European Principles for European forests, Montreal Principles for other temperate and boreal forests, ATO/ITTO principles for tropical forests.) 3.2 Content of forestry principles 3.2.1 Similarities While terminology and the arrangement of text are often very different, many components of the forestry principles which form the foundation of both PEFC and FSC are essentially equivalent: Both schemes require conformance with all relevant international and national laws. Both schemes establish the requirement that forest management should be guided by plans appropriate to the size and use of the forest, that are periodically updated, and that encompass economic, ecological, cultural, and social values of the forest resource. Both schemes require regular monitoring of forest resources and evaluation of management practices to ensure planning objectives are being met.

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

Both schemes require that forestry workers receive adequate training and supervision to ensure implementation of the plan. Both schemes require that land tenure and property rights should be clearly defined documented and legally established. Both schemes require that customary rights of indigenous people are recognised and respected. Both schemes require the long-term maintenance of forest cover and area, and that forestry practices should maintain the quality as well as the quantity of forests. Both schemes require that harvesting of forest products both wood and non-wood - does not exceed levels that can be permanently sustained. Both schemes state a clear preference for re-establishment of forests using native species rather than exotic species. Where exotic species are used, both schemes require measures to ensure that negative impacts on the environment are avoided. Both schemes include a wide range of measures which aim to safeguard bio-diversity, recognising the need both to protect ecologically important forest biotopes and to manage production forests so as to maintain and enhance bio-diversity. Both schemes require that forest resources are mapped and inventoried, so that rare, sensitive and representative forest eco-systems are identified and protected. Both schemes require special measures to protect endangered species. Both schemes require that sites of historic, cultural, and spiritual significance are protected. Both schemes require that forestry improves opportunities for local rural employment. Both schemes require that measures are taken to minimise soil erosion and to protect water courses, particularly during harvesting and road construction, and through the choice of appropriate tree species. Both schemes require that the use of pesticides and herbicides is minimised and promote the use of non-chemical methods of pest control. Both require the controlled use of fertilisers with due consideration for the environment. Both schemes require safe working conditions and compliance with all relevant health and safety standards and core ILO Conventions.

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

3.2.2 Differences The main differences between the content of the PEFC and FSC principles usually relate to the emphasis placed on different aspects of forest management. In particular: FSC sets out more explicit requirements for public consultation during forestry operations, establishing a requirement for forest management to incorporate the results of evaluations of social impact, and stating that consultations shall be maintained with people and groups directly affected by management operations. PEFC is less explicit stating a broad requirement for forest management practices to make the best use of local forest related experience and knowledge, such as of local communities, forest owners, NGOs and local people. FSC explicitly prohibits the use of GMOs, while PEFC makes no specific reference to GMOs. Instead PEFC establishes general principles covering genetic diversity. For example, for reforestation and afforestation, PEFC requires that the origins of native species and local provenances that are well adapted to site conditions should be preferred. PEFC also requires that only those introduced species, provenances or varieties should be used whose impacts on the ecosystem and on the genetic integrity of native species and local provenances have been evaluated, and if negative impacts can be avoided or minimised. While PEFC calls for specific measures to monitor the health and vitality of forests, these factors are not referenced directly in the FSC Principles (except in relation to chemical use). Instead FSC sees these as implicit in other Principles, for example that forest ecological functions and values shall be maintained intact, enhanced, or restored. While PEFC makes a specific reference to the provision of recreational opportunities, the FSC Principles contain no such reference. Instead provision of recreation is implicit to a broader principle, that the communities within, or adjacent to, the forest management area should be given opportunities for employment, training and other services.

3.3 Forestry standards-setting process 3.3.1 Similarities The overall structure of the standards-setting process is very similar in both schemes. Both schemes work on the basis that forest certification standards should be developed through regional or national adaptation of internationally agreed principles of good or sustainable forestry. The preferred approach is to encourage development of regional or national standards by a representative and balanced range of stakeholders through a consensus building process.

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

In the case of PEFC, the main work to develop standards is carried out by national standards-setting bodies that form an essential component of independent forest certification schemes that are endorsed by the PEFC Council. In the case of FSC, the main work to develop standards is carried out by autonomous FSC National Initiatives that are endorsed by the FSC Board of Directors The requirements for endorsement established by the PEFC Council and by FSC International are very similar. Both schemes prefer decisions to be taken by consensus. Both schemes emphasise the need to ensure all relevant stakeholders are invited to participate in the standards development process, and that there is balanced representation of interest categories during decision making. Both schemes emphasise the need to communicate information on the process as widely as possible, and to ensure that draft standards are widely distributed and made available for comment by interested parties. Both schemes require that procedures are established to handle complaints relating to the standards-setting process. So while both schemes establish broad principles for appropriate standardssetting procedures at national and regional level, much of the responsibility for this process is delegated to autonomous organisations. In the FSC scheme for example, national and regional standards setting bodies are under no obligation to repeat the 3 chamber structure used at international level, and may adopt procedures that better reflect the forestry environment and range of interests involved. 3.3.2 Differences The main differences in the standards-setting process are as follows: PEFC is based on governmental sustainable forestry criteria, FSC on nongovernmental criteria. As the reference basis for the development of national and regional standards, PEFC requires the use of international sustainable forestry principles - and their associated operational level guidelines - developed and agreed through inter-governmental processes. In contrast, FSC requires conformance with a set of international Principles and Criteria developed by FSC members using a three chamber system, with balanced representation of economic, social and environmental interests, and from which government representatives are specifically excluded. Whereas the adaptation of national or regional standards through a participatory consensus-building process is a pre-condition of PEFC certification, it is not a pre-condition of FSC certification. In fact, FSC has finalised only 22 national or regional certification standards in 11 countries, whereas it has issued certificates in 79 countries. Around two thirds of FSC certificates have been issued against generic standards developed internally by accredited certification bodies for a specific client or country/region in line with the international P&C. When developing generic standards, certification bodies must publicise the steps they are taking;

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

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encourage broad stakeholder input into the process; and liaise with any national or regional FSC body. But the process falls well short of the requirements established for development of national standards, or indeed of those established in international standards for standards-setting such as ISO Guide 59. Balanced representation and consensus are not requirements for the development of FSC generic standards. PEFC requires that the process to develop certification criteria shall be initiated by national forest owners organisations or national forestry sector organisations having the support of the major forest owners organisations in that country. FSC imposes no conditions on the initiators of the standards-development process. PEFC requires that national standards are reviewed at least every 5 years, while the FSC does not specify a timescale for revision of national or regional standards. Instead, the FSC states only that the consultative process for developing FSC regional and national standards must incorporate a mechanism for encouraging the future review and revision of these standards.

3.4 Certification and accreditation procedures 3.4.1 Similarities Due to heavy reliance on exactly the same set of ISO standards for independent third party assessment and accreditation, the procedures adopted by the two schemes are similar. Specifically: The PEFC Council requires third party certification by an organisation which is in conformance with one or other of ISO Guides 62, 65 and 66, setting out requirements respectively for quality systems, product and environmental management systems certification. While FSC requires certification bodies to be in conformance with FSC procedures, these draw heavily on ISO Guide 65. An FSC standard (FSC-STD-20-001) spells out in detail the relationship between the FSC procedures and ISO Guide 65. Both PEFC and FSC require that auditors conform to the same requirements for quality and environmental management systems auditing established in the ISO19000 series of guidelines. Both schemes accreditation procedures draw on ISO17011 Conformity assessment - general requirements for accreditation bodies accrediting conformity assessment bodies. PEFC specifically requires that accreditation is undertaken by organisations that are in full conformance with ISO17011. In the FSC scheme, certification bodies are accredited by the FSC Board of Directors against FSCs own accreditation standards, which in turn draw on the ISO standard.

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

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PEFC and FSC apply an equivalent requirement for public disclosure. Both schemes require that summary certification reports are made publicly available by the certification body. PEFC and FSC establish equivalent requirements for surveillance and reassessment. Both require monitoring to take place at least annually to verify that certificate holders continue to comply with standard, and both state that certificates are valid for 5 years. Both schemes have developed a variety of special procedures to facilitate certification by smaller forest owners, with group certification being the primary mechanism. Both FSC and PEFC state that in all cases the underlying principle is that all actors involved or operating on the certified area shall conform to the certification requirements. Both PEFC and FSC exceed ISO require that information from external parties is used as part of their audit evaluations. As such, both schemes exceed ISO auditing requirements.

3.4.2 Differences The main differences with respect to certification procedures relate to the way responsibilities for different aspects of forest evaluation (such as development of standards for accreditation, accreditation decisions, on-ground auditing, and certification decisions) are distributed between different players. In broad terms, PEFC has effectively adapted the accreditation and certification framework required by ISO for the forestry sector, while FSC has developed a bespoke system for the forestry sector. Specifically: In the PEFC system, accreditation functions are entirely separated from standards-setting functions. Accreditation is the responsibility of national accreditation bodies that are members of the international accreditation forum or European Co-operation for Accreditation. This provides an assurance that the requirements of IS017011 are being met. In contrast, FSC requires independent third party certification bodies to be accredited by the FSC Board of Directors based on recommendations of the FSC Accreditation Business Unit. Publicly available FSC documentation does not include a detailed description of the internal FSC management system and decision making procedures for accreditation, so it is not possible to comment on the extent of conformance with ISO17011. Because FSC has chosen to develop from scratch a bespoke system of independent assessment for the forestry sector - unlike PEFC which has plugged in to the existing ISO framework - FSC documentation on certification procedures are more expansive than documentation issued by the PEFC Council. For example, FSC documents set out detailed requirements for forest evaluations and sampling of forestry operations which have no direct equivalents in the PEFC Council documentation. In practice, PEFC delegates much more of the responsibility for development

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

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of appropriate assessment procedures to accredited certification organisations and national accreditation bodies. The need for central guidance on forestry assessment is also lessoned in the case of PEFC because consensus agreement of national certification standards is a prerequisite of certification, whereas FSC still allows use of generic standards based on international forestry principles. FSC requires that certification body decisions are reviewed by at least two disinterested, credible and technically qualified reviewers. The certification body must take peer review comments into account when finalising the evaluation report. The PEFC system adheres more closely to the ISO requirements in which the accredited certification body is regarded as fully and ultimately responsible for its own decisions.

3.5 Chain of custody standards, labelling and environmental claims 3.5.1 Similarities Both PEFC and FSC handle logo usage according to the same fundamental principles. That is, both schemes enable on-product application of an internationally registered trademark by organisations that conform to chain of custody standards and strict requirements for logo usage. In both schemes, a key principle is that chain of custody standards and logo usage guidelines be developed in an open and transparent manner. In both schemes, assessment of chain of custody must be undertaken by an accredited independent third party operating in accordance with relevant ISO guidelines. Both systems offer various labelling options based on various chain of custody procedures. Both schemes provide an option for organisations to label products with 100% certified content using procedures that physically segregate certified from uncertified material. Both systems also offer a volume credit method. Using this method, if 75 % (for example) of input raw material is certified, then 75% of output products may be labelled - as PEFC certified in the case of PEFC or FSC-Mixed in the case FSC. Both systems set out similar procedures for monitoring and calculation of % certified content using the volume credit method, for example: requiring that % calculations are maintained individually for different output products or groups of similar products; allowing calculation of monthly rolling averages over a period up to 12 months; and allowing calculations to be based either on dry weight or volume. Both schemes set out requirements for the non-certified component of labelled products with the aim of ensuring that no wood from illegal or other controversial sources enters the certified product chain. Both schemes require that CoC certified companies evaluate the potential risk of procuring raw material from controversial sources and establish programmes of second or

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

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third party verification of their suppliers where there is a high risk of raw material originating from controversial sources. 3.5.2 Differences FSC draws a distinction between FSC-Mixed products and FSC-Pure products. No equivalent distinction is drawn in the PEFC system. FSC offers an option to label using a threshold system whereby 100% of product output can be labelled as FSC-Mixed if the rolling average of FSC material content remains above 70%. No directly equivalent option is offered in the PEFC system. PEFC offers an average percentage option. Under this system, if 75 % (for example) of input raw material is certified, then 100% of output products may be labelled as certified products including 75% percent of certified raw material. No directly equivalent option is offered in the FSC system. In the FSC percentage systems, FSC-certified content must never fall below 10%. In the equivalent PEFC systems, no minimum threshold is set at international level. However an individual PEFC forest certification or labelling scheme can set up a minimum for usage of its label. Recycled products are handled differently in each scheme. PEFC essentially regards such products as entirely distinct from PEFC certified products. Therefore, they are treated as neutral when calculating PEFC-certified percentages. However PEFC allows companies to communicate the content of recycled raw material in their products through a combined label containing the PEFC logo and Mobius Loop. This label can be used on products where the total content of PEFC certified wood or fibres and PEFC recycled raw material exceeds 70%. In the FSC system, organisations using the threshold system to apply the FSC-Mixed label may include post consumer reclaimed material alongside wood sourced from FSC certified forests in order to achieve the required thresholds. In addition, FSC offers a special FSC-recycled label for products that are 100% recycled. FSC is more explicit than PEFC in its requirements for the non-certified component of labelled products with the aim of ensuring no wood from illegal or other controversial sources enters the certified wood supply chain. FSC has set out a detailed specification for a procurement system to ensure that the non-certified wood component is FSC-controlled. The FSC definition of controversial sources is more expansive than the PEFC definition. The latter refers to Illegal or unauthorised harvesting. In contrast, the FSC definition refers to: a forest area where traditional or civil rights are being violated; forests with high conservation value that are under threat; GM trees; illegal sources; natural forests that are being converted to plantations or non-forest areas.

CEPI Matrix, www.forestrycertification.info, Comparison of PEFC and FSC

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