FSC Study on Impacts of Large-Scale Forestry and Recommendations

FSC Motion 20 Study on the Impacts of Large-Scale Forestry Operations in Global North and South
August 26, 2014
Report Authors: Alfredo Unda and Tawney Lem
Commissioned by: FSC Policy Standards Unit

Motion 20 Report on the Impacts of Large Scale Forestry Operations – DRAFT Aug. 14, 2014 2
The study authors wish to thank Chris van Dam, Luis Astorga and Grant Rosoman, authors of Motion 20, for their feedback throughout the project. Pasi Miettinen, FSC Program Manager, contracted the study authors; provided the Terms of Reference as well as other documents and information; contributed by requesting participation of LSFO companies worldwide; and provided translation of the Indigenous People and Stakeholders’ questionnaire in the Finnish language. His guidance and support was sincerely appreciated.
Thanks are also extended to the 14 certificate holder respondents that replied to the survey; the 8 FSC National/Regional Offices which provided information and helped to distribute surveys; the 51 Certification Body (CB) respondents that provided information through the survey; the 3 Accreditation Services International (ASI) auditors that replied to the survey; and the 147 Indigenous People and stakeholders from several countries global North and South, who answered the questionnaires – as well as those who also kindly participated in direct interviews and answered e-mails. This study is a reflection of their experiences, knowledge and perspectives. Appreciation also goes to National Office staff and other individuals who provided translation services so the study questionnaires could reach, and be accessible, to as wide a range of people as possible.
The study authors remain very much aware that the Motion 20 work is not finished, but it is hoped that the study will contribute to solutions that will strengthen both the performance and evaluation of LSFOs in the FSC system.

In October 2013, the FSC Policy and Standards Unit released a Call for Expressions of Interest seeking consultants to conduct a study on Motion 20. After a review the submitted letters of interest and CVs, FSC PSU assessed the candidates. Based on professional profiles and experience two specialists were selected and presented with background information and offers of engagement.
Alfredo Unda is a forest engineer from Universidad de Chile, who also holds a Masters in Environmental Studies from York University, Canada. Mr. Unda has broad experience in environmental projects related to the forestry sector, including: participation in activities to develop FSC standards for Chile; serving as lead auditor, local expert and interpreter in Chile, Honduras, Canada, USA, Uruguay, Peru and other countries for several CBs and for ASI; and overseeing a project to prepare the ecological restoration guidelines and HCV guidelines to comply with the FSC standards in Chile for FSC-Chile. He is the local person responsible for Carbon sequestration projects in small-scale forestry plantations in Central Chile, which is registered in the Voluntary Carbon System (VCS), generating 1.6 million tCO2 of compensation, diversifying the objectives and benefits of forestry projects. In the Instituto Forestal (Chile), Alfredo led the direction and execution of several environmental impact assessment studies of forestry investment projects; and has participated in a variety of agroforestry and social forestry projects in the Amazon basin countries like Brazil, Colombia, Ecuador and Peru, and in countries like Costa Rica, El Salvador, Haiti, Honduras and Nicaragua.
Tawney Lem is a social scientist from Canada, who holds a Political Science degree from the University of British Columbia, and a Certificate in Dialogue and Civic Engagement from Simon Fraser University. Ms. Lem has been a contract lead auditor, or audit team member on over 55 pre-assessments, assessments, annual surveillance audits, Major CAR verification audits and gap analysis in Canada with Rainforest Alliance, and has served as a local expert for an ASI. She was also on the Controlled Wood Working Group for FSC Canada, and has participated in activities related to Standards development and revision in Canada. Tawney has worked with 30 Indigenous groups in Canada on projects including governance policy development, organizational development, strategic planning, land use planning, traditional use and occupancy studies, and consultation protocols. She has a strong background in facilitation, and has led numerous sessions focused on finding shared solutions within and between Indigenous groups, governments and civic sectors.

AAC
Annual Allowable Cut
AIFBN
Agrupación de Ingenieros Forestales por el Bosque Nativo
ASI
Accreditation Services International
CAR
Corrective Action Request – also known as Non- Conformity Report (NCR)
CB
Certification Body
CH
Certificate Holder
CoC
Chain of Custody
FAO
Food and Agriculture Organization (of the United Nations)
FMU
Forest Management Unit
FSC
Forest Stewardship Council
GA
General Assembly
GFA
GFA Certification
Ha
Hectares
HCVs
High Conservation Values
HCVF
High Conservation Value Forests
IFL
Intact Forest Landscapes
IGI
International Generic Indicators
IP
Internet protocol
ISO
International Organization for Standardization
K
Thousand
M
Million
NCR
Non-Conformity Report – also known as Corrective Action Requests (CARs)
NGO
Non-governmental organization
NO
(FSC) National Office
NTFP
Non-timber forest products
P&C
Principles and Criteria
PSU
(FSC) Policy and Standards Unit
RA
Rainforest Alliance
SA
Soil Association
SCS
Scientific Certification Systems
SD
Standards Development
SDG
Standards Development Group
SIR
Scale, Intensity, Risk

SLIMF
Small or Low Intensity Managed Forests
SGS
Société Générale de Surveillance
TOR
Terms of Reference
UN
United Nations
UNDP
United Nations Development Program
UNDRIP
UN Declaration on the Rights of Indigenous Peoples
USD
United States dollars

At the FSC General Assembly in 2011, Motion 20 was passed:
The GA requests FSC to commission a participatory study of the social and environmental landscape level impacts of large operations, with recommendations of best practice indicators and procedures.
Motion 20 arose “from the growing perception, especially from some members of the Social and Environmental Chambers, that the Principles and Criteria and existing certification procedures and processes are not sufficient to ensure responsible forest management in the case of Large or Big Operations. In their presentation, the authors of the Motion argued that Certification of large-scale operations – and also small-scale certification – has special characteristics. In the case of small-scale certification, special procedures and standards have been developed. In the case of large-scale operations, the mere application of the standards and procedures for field review and consultations with stakeholders is not sufficient to ensure that the operation fully meets the letter and spirit of FSC certification. There have been frequent complaints of large-scale operations, especially in the south. Moreover, the size of the operation often has an influence on whole towns and on local, regional or national policies and development. Therefore, it is necessary to analyse the certification of these large operations in more detail to see whether or not it is necessary to add some elements to the standards and procedures that make it possible to guarantee a proper FSC certification.” (FSC Motion 20 Terms of Reference)
Between January and August 2014, a study was carried out with the purpose of evaluating the potential positive and negative impacts of Large-Scale Forestry Operations (LSFOs). The study gathered data from Public Summary Reports of certified companies, as well as through questionnaires and interviews conducted with stakeholders, Indigenous Peoples, FSC National Offices, ASI, and company representatives.
The study confirmed that LSFOs have unique characteristics that differentiate them from non-LSFOs; both in terms of the nature of impacts they can generate, and in terms of what is needed to effectively evaluate their performance. These characteristics can also be quite different depending on whether the LSFO is plantation or natural forest.
Findings are organized into five areas of enquiry: defining LSFOs, impacts of LSFOs, LSFO consultation of Indigenous Peoples and stakeholders, CB evaluations, and FSC Standards.
Defining LSFOs

A clear definition of LSFO did not emerge from the study. Four criteria, with thresholds, were presented to study participants for consideration, with a company being considered an LSFO if any one of the criteria was present:
a. It has an area greater than 80,000 ha of plantation or 300,000 ha of natural forest (either in individual operations or collectively under one ownership or in one landscape), or
b. It has more than 2000 employees (directly or through contractors, including seasonal workers), or
c. It has an annual sales of more than USD 200 million, or
d. It occupies more than 50% of the land base of a district or municipality.
‘Area’ was generally acknowledged as a common measure of size, but consideration must be given to whether the area must be contiguous or not. Area does not necessarily say anything about impact though: a very large area with low intensity of operations is not likely a concern compared to a moderately large area with high intensity of operations. The concept of what is considered large is also very variable between countries and regions. Where there is a diverse and fragmented ownership the threshold of size may need to be lower versus where there are large landmasses.
‘Number of employees’ can be an important measure of social and economic impact, but there are examples of very large operations that are highly mechanized and therefore employ fewer people. This can also be an unreliable measure, as it can be difficult to get accurate reporting of numbers especially where contractors are primarily used.
‘Sales’ are an important factor of economic impact, but are relative to the type and quality of wood, sometime subject to significant changes in wood prices, and difficult to get accurate reporting on.
‘Percentage of a district/municipality’ can be reflective of a certificate holder’s influence over the economic, social and environmental condition of that district or municipality (e.g. may be the major employer). However, percentage is relative to the size of the district/municipality, and administrative divisions of districts, municipalities, departments and regions are too diverse from country to country to allow for any type of meaningful comparison.
Information received about the definition of LSFO shows that an international set of fixed criteria and thresholds will not serve the high degree of variation between countries. Criteria will need to be dependent on the national situation, and thresholds may vary depending on different ecosystems, ownership, and management systems.
Recommendations

1. Take a holistic, strategic, multi-dimensional approach to defining LSFO Look beyond the scope of scale, and discuss the concept of LSFOs in connection with the SIR component of the IGIs, and in connection with the work of the Safeguards Task Force1.
2. Take a regional approach to defining LSFO Discuss study findings and potential criteria/thresholds in a local context at the national SDG level, versus the international level. PSU may serve a role in countries where there isn’t an SDG.
Impacts
The impacts of LSFOs that were evaluated in the study were: land tenure; local, regional and national level politics; lives of local population; local and regional economy; local and regional environment; labour; and human rights. While the impacts have been broadly categorized, they must be read collectively as many of the impacts are interrelated and/or overlap several categories.
Social and environmental concerns regarding LSFOs were the most mentioned by respondents, especially in South plantation forestry countries with notable historic land claim processes (Brazil, Chile), that still are ongoing or unresolved despite the company being FSC certified. Impacts from LSFO plantations, such as water scarcity, pollution, rural to urban migration, community safety (e.g. fire), and infringements on Indigenous People’s and local communities’ land claims and/or, etc., were cited as greatly impacting the lives of local population in some countries. Clarification of land tenure rights prior to any forestry activity should be the rule. The responses from Indigenous People, stakeholders and National Offices suggest that improvements in this area are still very much needed.
The undue influences of LSFOs on governments were identified as a major issue. Examples were mentioned for many regions in the world, but especially in tropical, developing countries.
Most of the impacts that CBs identified were to the local and regional environment. Impacts include sedimentation, water loss, negative impacts on landscape ecology, fragmentation of IFLs, very large clear-cuts in plantations, and increased danger of forest fires for locals. There are similarities between countries in terms of the types of impacts observed, the impacts vary greatly in scale, intensity and risk between countries and regions, and especially between natural and plantation LSFOs. National and regional approaches will best address these impacts, although a recommendation has been made
1 This recommendation was repeatedly raised throughout the study, and some parties declined to participate in this study until a fully formed policy or position was developed for SIR within their organization.

for Environmental and Social Impact Assessments to be required in plantation forestry no matter the plantation size.
Although respondents of plantation forestry countries mentioned improvements in labour conditions, there is still room for improvements, especially in labour outsourcing which negatively impacts working conditions in several ways. Labour is very connected with social/environmental concerns. The new Standard for Brazil was mentioned as an example of positively addressing outsourcing through the addition of Indicator 4.4.10 – “The Organization shall undertake continuous efforts to reduce impacts from outsourcing processes, seeking to minimize differences between employees and contractors performing the same function.” This may be considered as an IGI.
Many comments made by study respondents, especially those in Southern and tropical countries, related directly or indirectly to some of the human rights described in the Universal Declaration of Human Rights, like articles related to the right to property; right to the economic, social and cultural rights basic for a person’s dignity; right to favourable conditions of work and to protection against unemployment; right to a standard of living; right to education and several others. Comments were also received that represented concerns about rights described in the United Nations Declaration on the Rights of Indigenous People.
Efforts within the FSC system on social issues have been marked by some challenges. Some respondents expressed disappointment that the historical situation of major land conflicts (e.g. in Chile) were not adequately reflected in two large FSC certificates. This is linked to perceived inadequacies in the evaluation process (see section 3.5). Definitions of rights and ownership to the land are highly contested and controversial in many countries, and interpretations (as related to Principle 3 requirements) were noted to vary (sometimes significantly) between CBs.
Some study respondents said implementation of FPIC will hopefully lead to the development of tools that can facilitate gaining the consent of Indigenous People. However, other respondents suggested that much work was still to be done – especially on a regional basis - in figuring out how to practically implement FPIC when Indigenous rights are not fully and legally defined/ recognized; and when forestry is just one part of a larger operational, legal, and political picture.
Recommendations
1. Especially in countries where land claims are a major and historical issue, consider developing regional guidance on how to assess whether rights have been fully identified, and how to interpret potential infringement of those rights
2. Consider developing an FSC global strategy to ensure National Offices have the financial and human resource capacity to develop improved relationships with

Indigenous People and local stakeholders; and provide important local understandings to CBs, such as local political issues.
3. Consider requiring that plantations, regardless of size, conduct environmental and social impact assessments prior to being certified.
4. Consider including guidance or a requirement related to decision-making that balances economic benefit with long-term social and environmental impacts.
5. Consider conducting a study to further understand the ecological and social impacts of LSFO plantations.
LSFO Consultation of Indigenous Peoples and Stakeholders
Geographic location and local populations are two factors that strongly impact processes for consultation. Some LSFOs have a large number of Indigenous Peoples and stakeholders who are potentially affected by operations. Where populations are remotely located and have poor communication infrastructure, challenges were observed in companies’ ability to develop initial relationships, and maintain ongoing contact (incomplete stakeholders’ lists, low number of contacts compared to size of the certificate area, poor diversity of contacts, contact lists that are not updated, some very long lists but with many contacts irrelevant to the consultation).
66.7% of respondents said they had not been consulted by an FSC certified company, even though it was confirmed that an FSC certified company was active in their area. Common concerns expressed were:
Organizations being consulted don’t represent the Indigenous Peoples and stakeholders, and CHs aren’t consulting the people in the towns and villages who are most affected; and Reliance on digital forms of communications, which only reach a small percentage of people, and specifically disadvantage those living in remote areas and areas without technology infrastructure.
CBs also use the CH stakeholder lists. Therefore, respondents expressed these same concerns when answering about auditing practices.
The meaningfulness of consultation is directly linked to the capacity of Indigenous Peoples and stakeholder. A majority of respondents said that they did not feel they had the capacity to adequately deal with LSFOs, and many of these respondents were the same people who indicated that CH consultation wasn’t meaningful. Even a good consultation process will have limited benefits if Indigenous Peoples and stakeholders cannot fully participate due to low capacity. Capacity challenges were characterized in the following ways:

Technical – lack of understanding of forest management and certification. Political – imbalance of political power between LSFOs and individuals or small groups (e.g. inability of individuals to challenge government decisions related to the CH). Legal – imbalance of legal resources between LSFOs and individuals or small groups.
Recommendations
1. Consider developing a requirement or guidance related to certificate holders needing to:
a. Consult both individuals and organizations within the definition of “local communities”; and
b. Consult a full range of stakeholders (individuals and organizations) they should be consulting (e.g. small business, ecological, social, economic, tourism, health, recreation, rights holders, academic, unionized and non- unionized workers, etc.).
Development of a community and stakeholders’ relationship strategy, and improvements to stakeholder databases are methods that could facilitate implementation of these items.
2. Consider developing a requirement or guidance related to certificate holders needing to support the capacity of Indigenous Peoples and stakeholders to participate in forest management.
3. Consider developing a requirement for certificate holders to proactively inform Indigenous Peoples and stakeholders about aspects of the Standard that relate to their interests.
4. Consider developing a best practices guidance document for certificate holders (e.g. through facilitated information sharing between LSFOs) on how to conduct meaningful consultation (e.g. types of stakeholders, methods of contact, methods of soliciting feedback, follow up, development of a stakeholder survey better understand the needs of local communities).
CB Evaluations
Comments provided by study respondents can be categorized as: general evaluation practices; evaluation levels of effort; field sampling; Indigenous Group and stakeholder consultation; auditor skills; public summary reports; and reporting of consultation process and recording if indigenous people and stakeholder concerns.

General evaluation practices
Comments were received about differences between CBs´ performances; namely that some CBs had less stringent interpretation of the P&C than others. This was linked to the identification of some certificates having a very low number of CARs/NCRs compared to other certificates, even though larger social and environmental impacts were perceived. These respondents further believed that some LSFOs switched to a different CB so they “wouldn’t have as many restrictions”.
Indigenous Peoples and stakeholders provided several examples where they felt the evaluation process was being controlled or led by the LSFO instead of the CB. Control of the evaluation process is linked to concerns about there being a conflict of interest between certificate holders and CBs.
Indigenous Peoples and stakeholders in almost every country (although to varying degrees) commented on the feeling that an inherent conflict of interest has been built into the system. CBs are expected to provide an independent evaluation of a certificate holder, but the CH is paying the CB for the evaluation. The study questionnaire identified this as a serious issue requiring attention.
Evaluation Level of Effort
Evaluation level of effort is the number of overall days that a CB spends on the evaluation of a CH, and also relates to how those days are allocated between activities such as preparation, Indigenous Peoples and stakeholder consultation, field site review, and reporting. Many respondents felt evaluation periods should be longer to allow for more sites to be visited, and for time to be granted for interviews. Remote areas were most at risk of not being visited due to the extra time and cost. Further, questions were posed about whether the complexity of issues could be evaluated in such short periods of time (e.g. in some cases, a few days of field work). A balance is needed between delivering a rigorous, thorough evaluation, and keeping costs for the CH reasonable.
Public summary reports showed that CBs report on their levels of effort in very different ways, which makes it very difficult to evaluate how much time is actually being spent on field reviews and stakeholder consultation versus office reviews and report writing. Respondents suggested that levels of effort for LSFO evaluations should be defined through quantitative and/or qualitative methods, and the involvement of ASI, National Offices and local experts.
Field sampling
Field sampling refers to the number and type of sites visited during an evaluation. Indigenous Peoples, stakeholders and ASI respondents all frequently commented that

improvements were needed in field sampling. In particular, the need was identified for better geographical coverage of sites in the FMU (especially more remote areas); a better range/type of sites to be reviewed; independence when selecting sites to visit; and visiting sites suggested by Indigenous Peoples and stakeholders (who therefore must be consulted prior to the development of the field visit plan).
CB consultation of Indigenous Peoples and Stakeholders
Only 31.4% Indigenous People and stakeholders were satisfied or very satisfied with the way they were consulted by CB and 20.2% were not aware that CBs were conducting consultation.
Invitations for consultation must reach a broader number and type of stakeholder. To do this, consultation opportunities must be publicized more effectively (e.g. not relying on digital methods when technology infrastructure is limited); opportunities for consultation must be provided with adequate advance notice; and consultation must be accessible (e.g. in local villages, not urban centres).
Capacity issues must also be addressed. The “bigger barrier to participation” was cited as being a lack of education and capacity. Repeated comments were heard on the need for increased education on FSC, the Standards and the auditing process (17.9% of Indigenous People and stakeholder respondents said they were not aware of the Standard). For CB consultation to be meaningful, education must be provided before consultation is conducted. More people would likely participate in consultation if they were aware of how certification could serve as a social tool to address their rights and interests.
The value of participation must also be demonstrated. Many stakeholders questioned the utility of participating in consultation because they didn’t see how their input was being used by the CB, and weren’t seeing any difference in how the company operated after being certified or after an audit. Scepticism about the audit process is linked to the perceived conflict of interest between CB and CH, and to poor past experiences during audit interviews.
Auditor skills
Indigenous Peoples and stakeholders, as well as CB and National Office respondents all made suggestions regarding increasing the skill of auditors. Particular areas to address include: knowledge of local/regional/national legislation when working in numerous different countries; knowledge of both the urban and rural contexts in which the LSFO operates and influences; sufficient fluency in the local language; adequate knowledge of how to objectively assess stakeholder concerns; and having operational, not just academic, knowledge.
Public summary reports

Some reports are much easier than others to read (e.g. Word vs. Excel format) and there is a fair degree of variation in the basic information contained in the reports (e.g. some do not provide audit team member names, or the number of people on the team). Stakeholders cited concerns about report formats being “full of acronyms” and being “hard to understand and follow”. A standard format should be developed for use by all CBs that includes all information required by stakeholders to properly assess the evaluations reported, and includes all basic and relevant information.
The website info.fsc.org was used to access public summary reports for all companies studied. On numerous occasions, it was noted that not all reports were available. Cases of companies were certified for a decade or more, but reports were only available for the last five-year certificate cycle. Cases of where a certificate holder switched to a new CB and then the reports by the previous CB were no longer available. Some of these reports were on the certificate holder’s website, but info.fsc.org should be a comprehensive source for accessing reports. There were also cases where it took a year or two after the audit date to publish the public reports.
Reporting of Consultation Process and Recording of Indigenous Peoples and Stakeholder Concerns.
There is a fair degree of variation in how CBs summarize Indigenous and stakeholder concerns. Some reports clearly showed the concern alongside the auditors’ response (and whether there was an associated CAR/NCR). However, other reports listed the concern, but either did not specifically say how the comment was factored in to the assessment/audit process, or it was very difficult to find this information in the report. There was insufficient information in some public reports for stakeholders to identify how their concerns were dealt with. Indigenous People and stakeholders frequently said that audit reports do not reflect the feedback provided during the CB consultation process. Therefore, they continue to see practices believed to be non-conformant to the Standard, but certificates are granted. When certificates are granted where Indigenous People and stakeholders feel there are unresolved conflicts/impacts, the conflicts become even more aggravated.
Some CBs make their full certification report available instead of just a public summary. Within these reports, the names and contact information (usually email address) of stakeholders are included. Consideration should be given as to whether this constitutes a breach of stakeholder confidentiality.
Concerns were expressed about certificate holders not sharing maps showing the certified area. Some public summary reports include maps, while many do not. The absence of a map makes it very difficult for Indigenous Peoples and stakeholders to

determine if their areas of interest are certified or not, and which company to contact if they have a particular concern.
Many Indigenous Peoples and stakeholders (globally) gave the opinion that CBs were not spending enough time interviewing local people, not spending enough time reviewing field sites, and generally not spending enough time on the evaluation of LSFOs. Many respondents expressed a serious questioning of the legitimacy of the FSC process, with this issue being one of the reasons. Since CBs do not universally report this information, the concerns of Indigenous Peoples and stakeholders can not easily be investigated.
Some CBs have their whole evaluation team collaboratively write the final report. Other CBs have one person (e.g. the lead auditor) write the report using material that has been generated by other members of the evaluation team. In this latter case, questionnaire respondents expressed concern that the main report writer may not have fully or correctly understood the findings made by the other auditors.
Recommendations
1. Through guidance documents, joint CB workshops or other means, consider developing methods to ensure greater consistency in the standard of practice between CBs, and within CBs between evaluation teams/auditors).
2. Consider adding a requirement to FSC-STF-20-007_V3-0 under section 2 for CBs to document and implement a system and procedure that demonstrates CBs are in control of all aspects of the evaluation process (e.g. advertising of evaluation, selection of field sites, maintaining confidentiality of stakeholders).
3. Consider ways to address both the real and perceived conflicts of interest that emerge as a result of certification bodies having a direct client relationship with certificate holders.
4. Utilizing ASI-ADV-20-007 DRAFT V1.1 and any other relevant material/research, develop guidance for CBs on adequate levels of effort for LSFO evaluations (main assessments and annual surveillance audits).
5. Consider developing a best practices/guidance document for CBs on LSFO evaluation preparation, with a particular emphasis on the fieldwork component of evaluations.
6. Utilizing ASI-ADV-20-007 DRAFT V1.1 and any other relevant material/research, develop guidance for CBs on adequate levels of LSFO field site sampling (main assessments and annual surveillance audits).

7. Consider developing additional requirements or guidance for CBs regarding consultation of Indigenous Peoples and stakeholders, which may include but is not limited to:
a. Adequacy of sampling (number and variety of stakeholders) and time spent on consultation;
b. Editing clause 2.5 of FSC-STD-20-006_V3-0 to emphasize the relevance of CBs consulting local level individuals and organizations (as well as national and sub-national level organizations) during the evaluations of LSFOs;
c. Ensuring accessibility of consultation sessions; and
d. Supporting Indigenous Peoples’ and stakeholders’ capacity to participate in consultation.
NB: Motion 37 passed at the 2008 GA is very similar to these recommendations: “FSC develops guidance on stakeholder consultation that includes: The required facilitation and stakeholder consultation skills for CB and ASI auditors, Different consultation requirements and acceptable levels of time spent by CBs or forest/plantation managers, in relation (to the) scale and type of operation, level of intensity and impact, and different cultural settings, Facilitation of stakeholder participation.
However, comments from Indigenous Peoples and stakeholders show that more work in this area is needed. The effectiveness of measures taken to implement Motion 37 should be reviewed when considering this recommendation.
8. Consider ways to provide additional monitoring of CB conformance to stakeholder consultation requirements and guidelines (e.g. consultation notice period, interview confidentiality, interview conduct e.g. asking open ended questions).
9. Consider ways to demonstrate greater independence of the evaluation process (e.g. enhancing the peer review process), as related to concerns about conflict of interest between certificate holders and CBs.
10. Consider developing requirements, guidelines or mechanisms to ensure auditors are adequately qualified and trained for the role they serve on an evaluation team, for the environmental/social/legislative context that are working in.
NB: Motion 50 passed at the 2008 GA included direction for FSC/ASI to resume plans “for the development of a comprehensive and affordable training programme in FSC standards for CB and ASI auditors, FSC, NGOs and consultants…). However, the study revealed that concerns still exist about auditor skills and training. The effectiveness of measures taken to

implement Motion 50 should be reviewed when considering this recommendation.
11. Ensure all public summary reports are fully accessible in one well-advertised place.
12. Ensure that the content of all public summary reports is conformant with the requirements of FSC-STD-20-007a.
13. Consider developing a standardized public summary report format (with associated guidance material), based on best examples for readability and ease of identifying how Indigenous group and stakeholder comments were addressed.
NB: This issue was raised at the 2008 GA in Motion 37 (passed) – “Motion to have a single format for public summaries of forest management assessments”. However, as of July 2014, varying formats were still being used. If the intent of the Motion is the same as study recommendation, ensure that the Motion is implemented in a timely manner. If the study recommendation is beyond the scope of the Motion, consider implementing the additional aspects of the recommendation.
14. Consider requiring that all public summary reports include a map of the certified area.
15. Consider requiring that all public summary reports include an accounting of how evaluation time is spent (office, field, reporting).
FSC Standards
Study respondents from across the participant sectors largely spoke favourably about the new P&Cs and the IGIs, and anticipated that many of the impacts identified in the study would be addressed directly by the IGIs, and/or by the revised national standards. ASI, National Offices, CBs, certificate holders, Indigenous People and stakeholders all hold unique perspectives on the FSC Standard based on the role that they fill within the certification system. While these groups may have differing opinions on the solutions, there is similarity in many of the topic areas that were identified as being specifically relevant to LSFOs.
Two topics areas raised by National Office respondents spoke literally and specifically to the size of LSFOs: the ‘scale’ component of Scale, Intensity and Risk; and the practice of large leases being divided into smaller certificates. However, all other topic areas raised by NO respondents, Indigenous People, stakeholders, CBs and certificate holders related to the “effects” that companies can have – effects that can be amplified by certificate size.

These areas require further consideration and discussion at all levels of the standards development process.
Recommendations
1. Have all standards development processes (IGI and National Standard) review Section 3.6 of the Motion 20 Study, and consider whether edits or additions to indicators are required. Particular consideration should be given to the topics of:
a. Monitoring criteria based on scientifically recognized indicators;
b. Scale, intensity and risk;
c. Intact forest landscapes;
d. Definition of the “owner”;
e. Ecosystem service approach and/or cumulative impacts arising from outside the certified area;
f. Modernization of equipment;
g. Social impact assessments;
h. Transparency and managing of political connection;
i. Support for local and regional markets;
j. Price control;
k. Road density and fragmentation;
l. Outsourcing;
m. Pesticides and agrochemicals;
n. Reserves;
o. Monopolies and monopsonies;
p. Exotic fauna; and
q. Conversion of land to other purposes.
2. Consider developing guidance for:
a. Implementation of FPIC;
b. Determining ‘direct’ responsibility for social impact;
c. Best practices for plantations (e.g. water quality, landscape level limits);
d. Development and maintaining relationships with Indigenous People and stakeholders;
3. Ensure the Standards Development process is inclusive of all relevant and interested Indigenous People and stakeholder groups.
Next Steps
The study will be presented at the General Assembly in Seville, Spain, on September 10, 2014.

As outlined in the Motion TOR, after the General Assembly FSC will convene a chamber – balanced Working Group. This WG will review and adjust the definition of LSFO, and will assess whether or not it is necessary to add some elements to the standards and procedures that are specific to LSFOs in order to ensure that the integrity and credibility of the FSC system is upheld.2
2 The funding for such Working Group is not decided yet but it may be integrated with implementation of Motions 18 or 21 (Annex 2 and Annex 3)

Acknowledgements ..................................................................................................................... 2
Study Authors ................................................................................................................................ 3
Abbreviations ................................................................................................................................ 4
Executive Summary..................................................................................................................... 6
Table of Contents ....................................................................................................................... 20
1. Methodology ........................................................................................................................ 22
1.1. Study Terms of Reference............................................................................................. 22
1.1.1. Definition of LSFO................................................................................................................... 22
1.1.2. Aspects and Dimensions of Impact ................................................................................. 22
1.1.3. Field Case Studies and Desk Reviews ............................................................................. 23
1.1.4. Certificate Holder Selection Criteria ............................................................................... 24
1.2. Primary Research (Engagement Process) .............................................................. 24
1.2.1. Questionnaires ......................................................................................................................... 25
1.2.2. Study Team Interviews ........................................................................................................ 26
1.3. Secondary Research (Data Review) .......................................................................... 26
1.3.1. Public Summary Reports ..................................................................................................... 26
1.4. FSC Database ................................................................................................................................ 27
1.5. Internet Research ....................................................................................................................... 27
2. Study Implementation ..................................................................................................... 27
2.1. Selected Certificates ....................................................................................................... 27
2.2. Questionnaire Distribution and Response ............................................................. 29
2.3. Study Challenges and Limitations ............................................................................. 30
3. Study Findings ..................................................................................................................... 32
3.1. Defining LSFOs .................................................................................................................. 32
3.1.1. TOR Criteria .............................................................................................................................. 32
3.1.2. TOR Thresholds ....................................................................................................................... 38
3.1.3. Additional Criteria and Thresholds ................................................................................. 40
3.1.4. Recommendations .................................................................................................................. 41
3.2. Impacts of LSFOs .............................................................................................................. 42
3.2.1. Land Tenure .............................................................................................................................. 42
3.2.2. Local, Regional and National Level Politics ................................................................. 45
3.2.3. Lives of Local Populations .................................................................................................. 46
3.2.4. Local and Regional Economy ............................................................................................. 50
3.2.5. Local and Regional Environment ..................................................................................... 55
3.2.6 Labour .......................................................................................................................................... 60
3.2.7 Human Rights ............................................................................................................................ 63

3.2.8 Recommendations ................................................................................................................... 67
3.3 CARs/NCRs .......................................................................................................................... 68
a. Common Themes ............................................................................................................................ 69
3.4 LSFO Consultation of Indigenous Peoples and Stakeholders ........................... 71
a. Consultation Process .................................................................................................................... 71
b. Meaningfulness of Consultation ............................................................................................... 72
c. Recommendations ......................................................................................................................... 75
3.5 CB Evaluations ................................................................................................................... 76
a. General Evaluation Practices ..................................................................................................... 76
b. Evaluation Level of Effort ........................................................................................................... 78
c. Field Sampling ................................................................................................................................. 81
d. CB Consultation of Indigenous Peoples and Stakeholders ........................................... 82
e. Auditor Skills .................................................................................................................................... 87
f. Public Summary Reports ............................................................................................................. 88
g. Recommendations ......................................................................................................................... 90
3.6 FSC Standards..................................................................................................................... 93
3.6.1 ASI Perspective ......................................................................................................................... 93
3.6.2 National Office Perspective ................................................................................................. 93
3.6.3 Certification Body Perspective ........................................................................................... 95
3.6.4 Certificate Holder Perspective ........................................................................................... 97
3.6.5 Indigenous Peoples and Stakeholders Perspective ................................................... 99
3.6.6 Recommendations ................................................................................................................ 103
4 Next Steps ........................................................................................................................... 103
5 References .......................................................................................................................... 105
6 Appendices ......................................................................................................................... 107
Appendix A – Motion 20 TOR ................................................................................................. 107
Appendix B – Sample Invitation to CH to Participate (Case Study) ......................... 122
Appendix C – Questionnaires ................................................................................................ 125
Appendix D – Questionnaire Distribution ........................................................................ 152
Appendix E – “Definition of LSFO” Full Responses......................................................... 154
Appendix F – Distribution of CARs/NCRs by Principle ................................................. 157
Appendix G – CARs/NCRs Compared to the Number of Indicators per Principle .......................................................................................................................................................... 158

1.
1.1. Study Terms of Reference
FSC PSU hired the author of the Motion 20 to draft Terms of Reference for Conducting Case Studies (see Appendix A) that guided the development of the final study methodology.
1.1.1. Definition of LSFO
For the purposes of the study, the TOR included a tentative definition of LSFO; that being any company that meets at least one of the following criteria:
e. It has an area greater than 80,000 ha of plantation or 300,000 ha of natural forest (either in individual operations or collectively under one ownership or in one landscape), or
f. It has more than 2000 employees (directly or through contractors, including seasonal workers), or
g. It has an annual sales of more than USD 200 million, or
h. It occupies more than 50% of the land base of a district or municipality.
This definition was used in the study as presented.
1.1.2. Aspects and Dimensions of Impact
A provisional list of ‘aspects or dimensions’ to be addressed in the study was included in the TOR. These aspects focussed on possible impacts (both positive and negative) not yet addressed by the FSC Standards or FSC certification procedures, and included the following categories:
a. Impacts on land tenure;
b. Impacts on local, regional and national level politics;
c. Impacts on the life of local population;
d. Impacts on the local and regional economy;
e. Impacts on the local and regional environment;
f. Impacts on labour;
g. Human rights; and
h. Influence on the procedures and transparency of the certification process.

Illustrative examples were provided under each category. The study team made minor refinements to this section of the TOR by expanding the illustrative examples and adding a category for ‘conduct of the certification process by the certification body’. Examples under this category included: quality of public consultation; quality of field work; quality of reporting; consideration of stakeholder ability to actively and effectively participate in assessments; and consideration of stakeholder burden.
1.1.3. Field Case Studies and Desk Reviews
The TOR proposed that study data would be gathered through two means: field case studies and desk reviews. The field case studies were to involve: on-site visits to participating certificate holders; review of existing documentation; and contact with stakeholders, Indigenous Peoples, and FSC members in the countries where operations were located. The desk reviews were to involve: review of existing documentation; research of other publicly available information; and contact with stakeholders, Indigenous Peoples, certification bodies, FSC National Offices, and FSC members in the countries where operations were located.
As the study team worked on identifying certificate holders to approach (See section 1.2 below), FSC confirmed the final project budget. Based on the budget and timelines, a goal was set to conduct two field case studies (one natural forest, and one plantation forest) and three desk reviews (one natural forest, and two plantation forests). A work plan was developed that included several key activities: introductory communications with certificate holders, National Offices, and certification bodies; study preparation (confidentiality agreements as needed, gathering data and stakeholder lists, scheduling field visits and interviews, field logistics); study implementation; development of a reporting matrix; ongoing study reporting to FSC; and development of the final report.
Invitations to participate in the study were sent to certificate holders (See Appendix B for sample invitation). Many of the certificate holders approached indicated an interest in the study, but declined to participate for reasons including: internal priorities; time already being spent on other FSC matters (e.g. new national Standards, IGI evaluations, annual surveillance audits); concerns about stakeholder burnout (consultation and audit overload); and perceived added scrutiny.
As declines to participate were received, invitations were sent to additional certificate holders. In total, invitations for either a field case study or a desk review were sent to twelve certificate holders for natural forests, and eight certificate holders for plantation forests. After several months of intensive follow up, by April 2014 voluntary participation had been secured for only one field case study (plantation) and two desk reviews (one each of plantation and natural). In the absence of adequate voluntary participation, an alternate plan was developed to conduct ‘non-voluntary’ desk reviews using information that was publicly available.

Continued delays in confirming logistics led to the unfortunate decision of having to cancel the field case study. As implemented, the final study included: 3 voluntary desk reviews (1 natural and 2 plantations), and 14 non-voluntary desk reviews (8 natural and 6 plantations), for a total of 17 desk reviews across 12 countries in all 5 FSC regions (Asia/Pacific, Africa, Europe & Russia, Latin America, and North America).
1.1.4. Certificate Holder Selection Criteria
The selection of certificate holders for the desk studies was based on criteria in the draft TOR, and then refined by the study team. The overall goal stated in the TOR was to “have enough documentation and references in order to have a framework for understanding the social and environmental impacts that LSFOs have at a larger level”.
The final selection criteria included a mix of:
a. Natural and plantation forests;
b. Certificates with significant issues (e.g. stakeholder complaints, disputes);
c. Certificates in global North and South;
d. Companies that have been certified for a long time;
e. Large forest entities with several smaller companies or subsidiaries through a region; and
f. Certificates of varying size (e.g. some close to the 80,000ha plantation and 300,000ha natural forest size threshold defined in the TOR, and some moderately and much larger than the threshold).
Certificates selected did not need to meet all of these criteria, but the goal was to have all criteria represented through the final mix of certificates selected.
1.2. Primary Research (Engagement Process)
One of the study goals was to gather as broad a perspective as possible on the potential positive and negative impacts of LFSOs. Perspectives identified included: Indigenous Peoples and stakeholders; certification bodies; FSC National Offices; ASI; and certificate holders. The stakeholder perspective was further divided into subcategories such as academic, tenure and use rights holders (e.g. trappers, commercial recreation), government (local, regional, state/provincial, national), local businesses, community associations, and NGOs.
Two sources of primary research data were used: questionnaire data, and interviews via phone/Skype.

1.2.1. Questionnaires
Based on the LSFO definition, and the aspects and dimensions in the TOR, specific questionnaires were crafted for each group being engaged (see Appendix C):
a. Indigenous and Stakeholder (English, Finnish, French, Portuguese, Spanish, Russian)
b. Certification Body (English only)
c. FSC National Offices (English and Spanish)
d. ASI (English only)
e. Certificate holders (English only)
f. Motion 20 Authors (English only)
The choice of languages was determined by factors including the location of certificates selected and availability of translation resources. All questionnaires were developed using the confidential SurveyGizmo web-based tool.
The following table summarizes the broad categories of inquiry included in each questionnaire:
Definition of LSFO
Impacts
FSC Standard
Certification Process
Indigenous and Stakeholder
Yes
Yes
Yes
Certification Bodies
Yes
Yes
Yes
Yes
FSC National Offices
Yes
Yes
Yes
Yes
ASI
Yes
Yes
Yes
Certificate Holders
Yes
Yes
Yes
Yes
Motion 20 Authors
Yes
Yes
Yes
Yes
Due to project timelines and budget, email was selected as the most time and cost efficient method of distributing the questionnaire. This was a regrettable, but acknowledged constraint in terms of achieving the participation of Indigenous and local communities (see Limitations below in section 2.3). The project team accessed contact information through certificate holder contact lists, FSC PSU (certification body information), FSC National Offices (FSC members, Indigenous groups, and stakeholders), Internet searches, and personal contacts in different countries.

The study team directly distributed most of the questionnaires to Indigenous Peoples and stakeholders, and all of the questionnaires to certificate holders, FSC National Offices, ASI and the Motion 20 Authors. FSC PSU distributed the relevant questionnaire to all certification bodies, which in turn distributed it to their auditors. FSC National Offices distributed some questionnaires to their members and additional stakeholders. Questionnaire recipients were encouraged to forward the questionnaire to other interested people and groups as a means of further expanding the reach of the study.
1.2.2. Study Team Interviews
The study team initiated interviews with certificate holder representatives associated with the voluntary desk reviews. All questionnaires also included the option for respondents to receive a follow up interview with the study team. All requests for interviews were responded to and carried out where requested. These interviews provided a direct opportunity to gain a greater depth of information on issues than the limits of the questionnaire format could provide.
1.3. Secondary Research (Data Review)
1.3.1. Public Summary Reports
For each of the certificates selected for study, the Public Summary Reports were downloaded from info.fsc.org. Each report was reviewed for the following information:
General Certificate code Certifying body Evaluation date Total certified hectares Annual allowable cut Number of employees
Evaluation Process Evaluation team size Evaluation level of effort (total days, days on site, days in the field) Stakeholders and Indigenous Peoples contacted and interviewed Scope (which portions of the Standard were evaluated)
Evaluation Findings Non-conformances Responses to Stakeholder and Indigenous Peoples’ comments

To allow direct comparison of the Public Summary Report data by Certificate Holder, Certifying Body, year (e.g comparing assessments to surveillance audits), and Principle and Criteria (e.g. where the most non-conformances arose, and when they arose during the life of a certificate), information was summarized in Excel sheets. To augment the Excel sheets, which focused on quantitative data, tables in MS Word were also developed for each certificate that summarized the nature of each non-conformance and observation issued by Indicator.
1.4. FSC Database
FSC PSU accessed data on the size of all certificates. For confidentiality reasons, a city name was associated with each certificate size (in hectares), but the certificate holder name was not. This data was collected to compare the range of certificate sizes in each country and FSC region.
1.5. Internet Research
Internet research was conducted to gain a general familiarity of the certificate holder and its operational, environmental and social context. Research was also conducted to gain additional information on comments received in the distributed questionnaires, especially where respondents did not provide contact information to allow for direct follow-up. In all cases, balanced information sources were sought.
2.
2.1. Selected Certificates
The following table provides a non-identifying profile of the certificates selected for desk review:
Forest Type
Country
Size Range
Natural
Canada
> 1M ha
Natural
Canada
> 300K ha, but <1M ha
Natural
China

Natural
China
Natural
Congo
Natural
Croatia
> 1M ha
Natural
Finland
Natural
Russia
> 1M ha
Natural
United States
> 1M ha
Plantation
Australia
>80K ha, but <500 ha
Plantation
Brazil
Plantation
Brazil
Plantation
Chile
>1M ha
Plantation
Chile
>500 ha
Plantation
New Zealand
Plantation
South Africa
Plantation
South Africa
For confidentiality purposes, the names of the certificate holders have not been included in this report. Similarly, the certification body has not been associated with the certificates. However, the following table shows the how certification bodies were represented in the study.
Certification Body
GFA
RA
SA
SCS
SGS
Natural
1
2
2
1
3
Plantation
3
3
2

2.2. Questionnaire Distribution and Response
The distribution of questionnaires is summarized in the following table. A more detailed breakdown of the stakeholder questionnaire distribution can be found in Appendix D.
Type
Number of Questionnaires Distributed3
Number of Times Questionnaires Viewed
Number of Fully or Partially Completed Questionnaires
Indigenous Peoples and Stakeholders
23334
569
147
Certification Bodies
345
73
51
FSC National Offices
326
36
10
ASI
17
6
3
Certificate Holders
188
37
14
Motion 20 Authors
3
2
1
Totals
2421
723
226
For clarification:
a. The ‘number distributed’ includes questionnaires sent directly by the study team and FSC PSU (to certification bodies), but does not include:
i. Re-sharing of the questionnaire by original recipients
ii. Questionnaires distributed by the FSC National Offices
iii. Questionnaires distributed internally by certification bodies, ASI and certificate holders.
3 Number of times the questionnaire was shared beyond the direct recipient is unknown
4 A range of different types of stakeholder, plus Indigenous Peoples, in nine countries (see Appendix D)
5 All ASI accredited CBs, including those that may only be accredited to CoC. Distributed via the CB Forum.
6 Sent to the lead contact in the National or Regional Office
7 Sent to ASI Managing Director, Guntars Laguns, then distributed internally.
8 Sent to main FSC contact for the CH, then distributed internally.

b. The ‘number viewed’ is tracked by the web-based survey tool, and is derived from the number of times a potential respondent viewed the questionnaire link. This includes:
i. People who may have viewed the link several times
ii. People who filled in the questionnaire fully or partially
iii. People who reviewed the questionnaire, but did not record a response
c. The ‘number of fully or partially completed questionnaires’ is tracked by the web- based survey tool, and represents sources of data incorporated into this report’s findings. Tracking of IP addresses reduces (but does not eliminate) the chance that the same person has responded to the questionnaire multiple times. There were a few cases where the same IP address showed up multiple times. These questionnaires were individually reviewed. The responses were sufficiently different, and were attributed to different persons within the same organization responding over a network.
There were also instances of the same IP address showing up multiple times, but given identifying information provided it was evident that one questionnaire was an earlier draft of a later response. As needed, data was combined into one questionnaire and the draft questionnaire was tracked and deleted to avoid any over counting of responses received.
2.3. Study Challenges and Limitations
Using the methodology and implementation steps summarized above, best efforts were made to ensure the study was thorough and conducted with integrity. However, consistent with this intent, the challenges and limitations to the study must be disclosed.
a. Indigenous Group and Stakeholder Identification
The voluntary participation of certificate holders was difficult to acquire as noted in section 1.1.3. The main limitation to this was the lack of access to stakeholder lists. The names and contact information for Indigenous Peoples and stakeholders had to be identified through Internet research. This was a very time intensive process. Even with Google website translation, trying to work in various languages that were non-native to the study team proved to be a barrier, as was the general lack of availability of public information in some countries. The team attempted to mitigate this limitation by requesting any contact information that the FSC National Offices might have had. Where Indigenous group and stakeholder information was included in the public summary evaluation reports, in some cases these lists where limited to a relatively small number of organizations, and included no individuals such as rights holders (see the findings in section 3.4.1). Similarly, where Internet searches had to be relied on to find

contact information, available information was biased more towards organizations and groups versus individuals.
b. Indigenous Group and Stakeholder Contact
Due to budget constraints, initiation of contact with stakeholders was restricted to email. Where email addresses were known, this method allowed for a high level of questionnaire distribution. However, many communities are remote and do not have Internet access. To adequately communicate with these communities, many local partners to the study would have been needed, which unfortunately was not feasible.
c. Communication in Local Languages
Internal and external resources were drawn upon in order to provide some of the questionnaires in multiple languages. Where translation of responses was needed, care was then taken to maintain data confidentiality. Given the number of different questionnaires that were distributed, translation into all relevant languages was not possible. By not providing questionnaires in all local languages, this undoubtedly prohibited the participation of some people, and may have biased participation towards people with higher education levels who spoke multiple languages.
d. Use of a Questionnaire
Use of a questionnaire as a method of gathering information has its benefits, but it is also inherently limited. First, based on the study methodology, two mandatory factors that were not universally present were access to technology and literacy in the language used. Second, many people simply dislike filling in questionnaires. Third, unless people are very invested in the questionnaire topic, responses provided tend to be quite short. Finally, unless people request a follow up interview, there is no chance to seek clarification or elaboration on responses.
e. Competing for Time and Resources
The study team consistently heard from certificate holders, certification bodies, ASI and the National Offices that it was an extremely busy time in the world of FSC. Between assessment/audits, IGI development and field-testing, and standard development/revision, people felt hard-pressed to direct attention to another FSC initiative.
f. Root Cause
Questionnaire wording encouraged respondents to focus on potential positive and negative impacts arising specifically because the certificate holder is large. However, after reviewing the responses, the study team felt that some people had difficulty making this differentiation. Many impacts identified were known to be

present in certificates of all sizes, but were relevant to the study because the impacts were amplified in the case of an LSFO. Other impacts identified did not readily appear to be a function of certificate size. If a follow up interview was not requested, the study team was not able to confirm the root cause of the impact.
g. Absence of Triangulation
Due to the scope of the study, the inability to conduct additional follow up interviews with many stakeholders (who didn’t provide contact information), and the fact that most certificate holders did not voluntarily participate, the study team was unable to triangulate evidence for most of the input received. For example, where a respondent cited a particular negative impact, the study team was not able substantiate whether the impact had actually occurred. Similarly, a respondent may have indicated the need for a certain procedure or criteria that the study team knew already existed. Responses have not been filtered, as they are a true reflection of respondents’ perceptions. Where responses are not factual or are misinformed, learning can still be gained (e.g. identifying the need for education/awareness).
h. Non-statistical
The web-based questionnaire was designed to gather open-ended text responses as well as quantifiable responses, but was not designed to be a statistical report. Some areas of this report provide the percentages of how people responded (e.g. 54% agreed, 46% disagreed), but these values should be viewed as an indication of the general level or absence of support for particular concepts/criteria. Where possible, information has also been provided to distinguish the source of the data (e.g. stakeholder vs. certificate holder, plantation vs. natural, North vs. South), but percentages have not been calculated. The intent is only to demonstrate whether a concept has universal or sector-based support, and whether the concept has broad or regional application.
3.
3.1. Defining LSFOs
3.1.1. TOR Criteria
The definition of LSFO provided in the study TOR was used as the starting point for discussion. First respondents were asked to comment on whether they agreed with the

four criteria provided in the definition: area, number of employees, annual sales, and percentage of a district municipality. In summary: The strongest support was shown for ‘area’; Half of the respondents supported ‘number of employees’; An equal number agreed and disagreed with ‘annual sales’; More, but not a majority, disagreed with ‘percentage of a district/municipality’.
Each respondent group indicated a fair mix of agree/neutral/disagree for each criterion. The only group that was uniformly in disagreement on any one criterion was certificate holders re: percentage of a district/municipality.
Agree/Strongly Agree
Neutral
Disagree/Strongly Disagree
Area
69.4%
14.3%
16.3%
Number of Employees
51.0%
20.4%
28.6%
Annual Sales
37.5%
25.0%
37.5%
Percentage of a district/ municipality
34.7%
18.4%
46.9%
See Appendix E for the breakdown of these numbers by group.
3.1.1.1. Area
Those who agreed with area as a criterion cited that the definition of scale in forestry is inherently about area. These respondents did suggest that some conditions on area were needed, including: The certificate area must be considered in proportion to the landscape it’s in; and The calculation of area should only include productive forest.
Conflicting opinions were presented on whether on land needed to be contiguous or not. One opinion favoured area being calculated on a contiguous land base, arguing that contiguity is needed for landscape level management to take place. However, another opinion was that all land managed by a company within a reasonably close geographic distance (to be defined) should be considered. This would avoid deliberate divisions of large tenure to avoid regulations9. This latter opinion was also suggested for application
9 One example given is that in Chile, all forest harvest of more than 500 ha a year should comply with an Environmental Impact Assessment. However, stakeholders expressed concern that large companies divide their holdings into small administrative units to stay under the 500 ha threshold, thereby avoiding the EIA requirement.

to group certifications where a large company was the manager, and was managing the land as if it was a large tenure versus numerous small holds.10
Those who did not agree with the criterion cited reasons including: Total area says nothing about impact. Impact of operations is more important than just the size of the area. E.g. there are large tenures with lots of protected areas, and/or low rates of harvest, therefore the impact is low. Alternately, there are small tenures with very intensive harvests, which therefore have high impacts. A single, fixed number of hectares does not account for the variability of each region; One large entity is no different than many small entities on the same landscape; and With plantations, looking at the area planted does not capture the full extent of the area the plantation affects (e.g. roads, villages etc.).
A review of the size of all certificates by country11 demonstrates the degree of regional variation and supports the suggestion of approaching thresholds on a regional basis. By way of example:
Natural Forests In Canada, 54% of the certificates are larger than the 300,000ha threshold suggested in the TOR. 32% of the certificates are over 1M ha, and 5% are over 2M. Therefore, the threshold in Canada could arguably be raised. Compare this to the US where only 12% of the certificates are over 300,000ha. In this context, the TOR threshold may be appropriate.
Plantation Forests Brazil has 6,438,000 ha12 under plantation forestry of which 96% are exotics species (FAO statistics). Of that, there are over 2 million hectares in 8 certificates over 80,000 ha size. These are, concentrated mainly in the south-east part of the country. In Chile, 97% of certified area is under plantation forestry. 4 certificates are over 80,000 ha, but they correspond to 85% of the total area certified in the country. All are located in the same Central-South zone of the country, where all plantation forestry (certified and non-certified) is established. Therefore, when considered as a block, the area of plantation is very large. The local population especially feels the impacts since the plantations are located in regions where people tend agricultural lands, which in Chile is a very scarce resource.
10 In this case, it was suggested that SLIMF Standards should only apply to individual small holds, and not group schemes.
11 Data sourced by FSC PSU
12 Data sourced by FSC Brazil web page

66% of the certificates in the Latin American & Caribbean region (166) are in Brazil, Chile, Uruguay and Argentina (and are mainly plantation forestry certificates). South Africa has almost half of the certificates in the Africa region. In Oceania, Australia and New Zealand total around 60% of the certificates there.
3.1.1.2. Number of Employees
Those who agreed with this criterion cited that ‘number of employees’ is an important indicator of social and economic impact. One condition suggested when calculating number of employees is that it must be associated with the certified FMU, not the company as a whole.
Those who did not agree with this criterion cited reasons including: Data unreliability - the number is difficult to accurately track in organizations that have many layers of contractors, subcontractors, and annually changing seasonal workers; Many large scale operations are highly mechanized, and therefore employ fewer people; Large operations can manage forests with a fewer number of employees; Plantations often have a very limited number of employees; and Differences between national capitalist and socialist governance will give distorted results.
A review of public summary evaluation reports shows the high degree of variability in employee numbers; numbers that may be the actuals, or may be an indication of how differently each company reports its numbers.
The forests below are presented from the largest to smallest size.
Type of Forest
Region
Certified Area ha
# of Employees
# of Workers
# of Contract Workers
TOTAL
Natural
North America
> 1M ha
360 men & 90 women
450
Natural
Europe
> 1M ha
5,525 men & 2,975 women
1000
9,500
Natural
North America
> 1M ha
2,729 men & 1,254 women
3,983
Natural
Africa
720 men & 27 women
28 (all men)
775
Natural
Europe
> 300K ha,
453 men & 63 women
40 (all
556

but <1M ha
men)
Natural
Asia Pacific
5986 (3890 men & 2096 women)
1018 (all men)
7,004
Natural
Asia Pacific
2,199 (1482 men & 717 women)
866 (719 men & 147 women)
3,065
Plantation
Latin America
>1M ha
782
13,389
14,171
Plantation
Latin America
>500 ha
450
7,500
7,950
Plantation
Latin America
7,515 employees & workers (522 women)
7,515
Plantation
South Africa
548 men & 391 women employees & workers
10,873 men & women
10,873
Plantation
South Africa
208 men & 122 women;
3,518 men & 4,046 women
7,894
Plantation
New Zealand
262,000
1103 men & 110 women, including contractors
1,213
Plantation
Australia
700 total: employees, workers & contractor workers
115 men & 40 women
Number not given in public reports
700
Plantation
Latin America
336
2,210
2,546
Each of the CBs reports this information differently. Some use the term ‘employee’ and ‘worker’ interchangeably, while others use the term ‘employee’ to mean an office worker, and the term ‘worker’ to mean a forest worker. Some CBs report contractors separately, while others provide one cumulative number for all workers regardless of employment/contractor status.

Of note, in most cases, plantations provide a higher number of jobs per hectare than natural forests, which is contrary to the belief of some of the respondents. Also of note, one of the largest certificates studied had the fewest number of employees recorded.
3.1.1.3. Annual Sales
Those who agreed with this criterion observed that sales are an important factor of economic impact. As with calculating number of employees, sales also must be associated with the certified FMU, not the company as a whole.
Those who did not agree with this criterion cited reasons including: Value (and sales) is too relative to the type and quality of wood; Big differences in sales for the same volume of harvest; developed countries will reach the threshold sooner, although the impact may be smaller than in non- developed countries; There are companies that people would agree are large scale, but due to the economic downturn their sales values are not even reaching USD $10M; Wood prices can change quickly and quite significantly; Varying values of currency (USD $1,000 does not have the same value in every country); Data unreliability – there is difficulty in getting certificate holders to report on sales accurately; Sales can be high in small areas due to overutilization; Differences between national capitalist and socialist governance will give distorted results; and Many plantations in the development phase have little or no sales; sales only commence after rotational ages are achieved, but impacts occur right from start up.
3.1.1.4. Percentage of a District/Municipality
Those who agreed with this criterion suggested that if an FMU overlaps a significant part of a district or municipality, the certificate holder’s activities could be largely influential over the economic, social and environmental condition of that district or municipality (e.g. may be the major employer). One suggestion was that all of a company’s operations within one district must be considered together, even if those operations are under separate licences. The individual licences may be under the threshold values suggested, but together are equivalent to the definition of an LSFO.
Those who did not agree with this criterion cited reasons including:

Percentage is relative to the size of the district/municipality. A certificate could cover 100% of a district/municipality, but still be small if the district/municipality was only 50,000 ha in size. In extremely large districts/municipalities the problem could be reversed; Some municipalities are built after the establishment of a plantation, and are very small in size; Depending on the locations of the districts/municipalities, a large contiguous operation could touch on multiple districts/municipalities, but only occupy a small percentage of each; Many large plantations are not contiguous, and therefore may comprise a small portion of many different districts/municipalities; Percentage alone does not address impact; some districts/municipalities have hardly any forested land, while others have a large amount; and The administrative divisions of districts/municipalities/departments/regions are too diverse from country to country to allow for any type of meaningful comparison.
3.1.2. TOR Thresholds
Respondents were also asked to comment on whether they supported the thresholds provided in the TOR. The thresholds suggested in the TOR for area and number of employees received more support than those for annual sales and percentage of the land base.
Threshold
Agree
Disagree
Area greater than 80,000 ha (plantations)
66.7%
33.3%
Area greater than 300,000 ha (natural)
60.9%
39.1%
More than 2,000 employees (direct or contractors, including seasonal)
60.9%
39.1%
Annual sales of more than USD $200M
50.0%
50.0%
Occupies more than 50% of the land base of a district/municipality
47.7%
52.3%
If respondents did not agree with a threshold, they were asked to provide an alternative. Regional trends can be observed within the suggested alternative values. The portions of the questionnaire related to alternate threshold suggestions was not well populated. Therefore, all responses have been summarized, but the number of people responding one way or the other has not been calculated.

3.1.2.1. Area
In general, those who did not support the thresholds suggested in the TOR felt a regional approach was needed. These respondents cited that the thresholds should decrease for regions where there is diverse and fragmented forest ownership, and where there are a large number of small ownerships (e.g. Central and East Europe, Mediterranean region). For areas with a large landmass such as Canada and Russia, the respondents said the thresholds needed to increase. One respondent believed that the GA Motion was meant to address the “million ha type forests”, and was therefore surprised that the TOR thresholds were so low.
Respondents did not specify alternative thresholds for all countries, but some of the suggestions included:
Country and Forest Type
Suggested Area Threshold to Define LSFO
China – plantations
10,000 ha
Europe – plantations
Low of 30,000 ha, average of 50,000 ha, and high of 250,000 ha
Europe - natural
100,000 ha - 150,000 ha
South Africa – plantations
250,000 ha
South Africa – natural
100,000 ha
Russia – natural
500,000 ha
Canada – natural
500,000 - 1,000,000 ha (northern boreal)
100,000 in southern parts of Ontario & Quebec
3.1.2.2. Number of Employees
Those who did not support the threshold suggested in the TOR recommended that the threshold be decreased. Only a few alternative thresholds were provided, and they were not suggested on a country specific basis. The range of suggestions spanned from a low of 350 to a high of 1000.
3.1.2.3. Annual Sales
As with number of employees, those who did not support the threshold suggested in the TOR recommended that the threshold be decreased. Only a few alternative thresholds were provided, and they were not suggested on a country specific basis. The range of suggestions spanned from a low of USD $10M to a high of USD $100M.

3.1.2.4. Percentage of a District/Municipality
Similar to number of employees and annual sales, those who did not support the threshold suggested in the TOR recommended that the threshold be decreased. Only a few alternative thresholds were provided, and they were not s suggested on a country specific basis. The range of suggestions spanned from a low of 20% to a high of 30%.
3.1.3. Additional Criteria and Thresholds
Several suggestions were made to amend and add to the criteria, mostly which were based on the concept of changing “large-scale” to “large impact”. These suggestions included:
Combination of AAC or harvested area per year, and area;
o If harvesting below 33% of AAC, large = 1M ha
o If harvesting 33-66% of AAC, large = 600K ha
o If harvesting 67-100% of ACC, large = 300K ha Total AAC
o E.g. >1,000,000 m3 (Canada) Public vs. private land
o Exclude public land if there are mechanisms for Indigenous Peoples and stakeholders to review management plans. Annual log production
o For natural forest, 80,000 m3/yr. (average over 3 years) Risk to value Corruption levels in a country Presence of regulation in a country Monitoring mechanisms in place Levels of endemism Social values including Indigenous Peoples rights Fragmentation and restoration objectives Annual clear cut area Number of management units
o E.g. over 10 indicates an increased complexity of management Productivity of the forest Land consolidation Level of management
o E.g. over 2 levels of management indicates increased complexity in supervision and monitoring Type of machinery used (relates to potential soil compaction)
Suggestions were also made to consider combinations of criteria, with a weighting assigned to each criterion based on local context.

Any proposed criterion needs to be evaluated for benefits and challenges; with further discussion on how/if the challenges can be addressed.
3.1.4. Recommendations
There was no consensus on how to define LSFO, and compelling reasons were provided both in support and against various criteria and thresholds. At the most fundamental level, there was no consensus on even if LSFOs should be differentiated from other operations.
Many respondents emphasized the need to focus on effects, not size. Other respondents felt that their National Standard already adequately incorporated the concept of scale, and that in some cases were addressing large scale better than small scale. They also noted that large operations can be beneficial (socially, environmentally, and economically), and have resources that make them better equipped to meet the requirements of FSC. In contrast, smaller operations often have less sophisticated systems and few employees, which can affect performance against the Standard. One respondent even suggested that FSC is already geared towards large companies, since they are the only one that can afford the costs of complying with the Standard requirements.
Other respondents cited the inadequacies of their National Standard, and provided examples of the negative impacts of large operations. These comments are more fully discussed in the sections below. The recommendation of these respondents was that LSFOs needed to be addressed in a more specific and deliberate way.
A clear need exists to further examine and discuss the concept of defining LSFOs. In doing so, the recommendations suggested by respondents to guide these discussions are:
3. Take a holistic, strategic, multi-dimensional approach Look beyond the scope of scale, and discuss the concept of LSFOs in connection with the SIR component of the IGIs, and in connection with the work of the Safeguards Task Force13.
4. Take a regional approach Discuss study findings and potential criteria/thresholds in a local context at the national SDG level, versus the international level. PSU may serve a role in countries where there isn’t an SDG.
13 This recommendation was repeatedly raised throughout the study, and some parties declined to participate in this study until a fully formed policy or position was developed for SIR within their organization.

3.2. Impacts of LSFOs
The impacts of LSFOs´ operations were evaluated based on the seven main topics described in the TOR: land tenure; local, regional and national level politics; lives of local population; local and regional economy; local and regional environment; labour; and human rights. Therefore comments have been summarized by theses main subjects and further summarized based on the positive and negative impacts mentioned by Indigenous People and stakeholders, FSC National and Regional Offices as well as other sources, and CBs. While the impacts have been broadly categorized, they must be read collectively as many of the impacts are interrelated and/or overlap several categories.
For Natural forests, most comments came from Indigenous People and stakeholders in Canada and the USA, and a few from some European countries including Finland, Russia and Sweden.
For plantations, the bulk of the comments come from Indigenous People and stakeholders in Brazil and Chile. Similar situations are also found in countries like Uruguay, South Africa and other countries with extensive certified plantation forestry. A few comments were received from Central American countries like Nicaragua and Honduras, but they referred to non-certified LSFOs.
The majority of comments received were about negative impacts, especially related to social and environmental issues, and concentrated on plantation LSFO in countries like Brazil and Chile.
3.2.1. Land Tenure
3.2.1.1. General Comments
In several countries, Indigenous People and other communities often rely on customary rights because land title has not been acknowledged. Since forestry companies have been allocated concessions or granted legal tenure rights to the same areas Indigenous Peoples claim as their traditional lands, this creates land tenure conflicts. Ultimately, addressing legal tenure rights is within the authority of government. FSC certification can play an indirect role though by ensuring customary rights are respected, and social benefits are generated for those who hold these rights.
Some CBs reported that companies operating in natural forests in several countries have made tenure areas accessible for customary and legal use rights. National Office respondents also reported hearing positive comments from Indigenous People and stakeholders in the Congo basin countries, where HCV 4 and 5 had been

implemented (Respect for the sacred, patrimonial sites, or sites with economic values for the populations, and Respect for the ancestral limits of the sacred forests).
However, many respondents to the study said that there is tendency to favour the industrial scale of forest management and commercial activity, which under-values subsistence and cultural values, as well as community and smallholder scale forest enterprises. This perspective was also expressed within an International Land Coalition study done in several tropical countries, which indicated that, “the data on industrial concessions for timber and non-timber forest products demonstrate that clarification of tenure rights should precede the growing demand on forest lands, but unfortunately, tenure security measures are lagging far behind. Without progress in specifying property rights, conflict over forest lands is likely to increase.
A review of the current and anticipated demands on forest lands underscores the point that governments must urgently address the problem”. “Serious and widely documented issues are documented concerning the sustainability of natural forests managed under industrial-scale concessions… The national and international initiatives to address problems through corporate responsibility, higher legality standards, or independent certification of standards have had a mixed outcome. Countries’ imposition of higher standards on concessionaires, through national reforms of the forest sector or demands of trade partners/buyers, have the adverse impact of favouring the larger scale of industrial concessions, as these find it easier to comply with the levy of taxes and fees, cost of application of social or environmental standards, including provision of social goods and services, or can exert pressure on officials to waive the requirements.” “The first glaring conclusion is the lack of evidence that industrial-scale forest concessions deliver a sustainable system of natural forest management in unlogged areas or permit sustainable natural forests in logged over areas. Nor is there evidence that, apart from a limited set of concessions that have been independently certified to FSC or equivalent standards, concession contracts are implemented according to social and environmental requirements – either to ensure local livelihoods and cultural values or to improve incomes.” 14
3.2.1.2. Specific Comments
A very high percentage of CBs reported that land tenure impacts were either ‘not applicable’ to the areas they audit, or that they ‘never or seldom’ see impacts to land tenure (e.g. eviction, increase in land prices, illegal land clearing). CBs noted that any land tenure issues that exist would be predominately limited to developing
14 Large acquisition of rights on forest lands for tropical timber concessions and commercial wood plantations. Prepared by: Augusta Molnar, Keith Barney, Michael DeVito, Alain Karsenty, Dominic Elson, Margarita Benavides, Pedro Tipula, Carlos Soria, Phil Shearman and Marina France. The International Land Coalition. January 2011. Pp. 39, 42.

countries, unless the developing country had strong and long term implemented provisions about tenure and organized forest management.
Two examples of tenure issues were cited. In Indonesia, most land is considered ‘state’ land, but tribal communities claim some areas. Canada (though not a developing country) has a similar situation where there are outstanding land claims, and challenges against historical land claims. CB comments generally stated that the FSC Standards, including FPIC, should address any potential land tenure issues. One CB respondent suggested that if there were issues, such as eviction, there would be questions about whether that LSFO should be certified.
As noted below, Indigenous People and stakeholders raised some concerns about land tenure beyond those mentioned by CB respondents. However, the amount of information received via the study questionnaire was too small to draw any major conclusions.
Natural Forests
Indigenous People and stakeholder respondents from Canada expressed concern about provincial governments over-allocating timber resources through the granting of large tenures. Cumulative effects were also mentioned arising from the additional harvest of forest resources prior to other tenured industrial development (e.g. oil and gas). In the US, stakeholder concerns were expressed about the “widespread selling off of land” previously used for forestry, and the conversion of this land to agricultural purposes.
Plantations
Land tenure problems differ according to the land ownership status. In Latin American countries, land is mainly under private ownership. In these cases, negative comments primarily centred on issues such as eviction of Indigenous people, etc. In countries where land is mainly given under concessions, negative comments were mainly related to the misuse and overexploitation of resources.
Indigenous People and stakeholder respondents from Brazil expressed general concern about the size of some forest tenures, and about a high percent of plantations occupying the landscape. Plantations, such as eucalypt, were described as a “massive introduction of a unique pattern of land use”, and as being the source of a now fragmented landscape. The resulting impacts to local agriculture and the livelihoods of smallholders and Indigenous communities were adequately mitigated according to respondents. Further, socio-environmental conflicts were cited as being common in the region since “old land grabbing issues” were not thoroughly solved.

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