With FSC in place, NGOs do not recognize any other third-party certification, even those that represent globally accepted sustainability standards such as the Programme for the Endorsement of Forest Certification Schemes (PEFC). NGOs then use their consumer influence to limit the options of paper buyers who must also face demand for certified products.
NGOs strongly support FSC because many were the founders of the scheme and are key stakeholders in the organization’s financial success. However, according to a recent report, some analysts have found FSC certification can add as much as $32 per hectare for operations in emerging markets ; a substantial investment for companies to manage in developing markets. Already, FSC is influencing trade by setting an investment barrier for the certification, and the impact is going to grow since it’s anticipated that by 2015, emerging markets are going to represent 30 percent of the pulp and paper markets globally.
Accordingly, ‘greenmail’ is especially prominent in developing countries, where companies must balance environmental factors with social responsibilities to develop business, create jobs and alleviate poverty. Such countries cannot in turn make such significant financial investments to meet the demands of environmental NGOs. For example, Asia Pulp & Paper (APP) is the third largest pulp and paper manufacturer in the world and a significant employer in Indonesia and China, responsible for more than 120,000 employees. APP’s major paper mills are PEFC-certified and the company is committed to sustainable forestry practices. However, it faces a constant struggle against NGOs that unfairly attack its environmental practices and use their influence to deny APP ‘NGOs-approved’ certification for their mills and forestry standards.
APP received FSC certification in early 2007 for several of its sites in Indonesia and China; but by October, the FSC decided to disassociate with APP with no due process and no opportunities for appeal. Removing the certification was an attempt by NGOs to ‘greenmail’ APP and erects a trade barrier between the large paper buyers that require the certification standard. This type of arbitrary control over certifications, and other attacks on APP customers, puts millions of jobs at stake under the influence of environmental NGOs.
Instead of letting markets operate freely, NGO’s are using their influence to put environmental priorities above market realities and are potentially preventing economic growth for industries and developing countries. Environmental responsibility is an important issue, but NGO ‘greenmail’ also needs to be managed responsibly.