Confronting Sustainable Forestry in a Period of Uncertainty and Change

1. Confronting Sustainable Forestry in a Period of Uncertainty and Change - Forest Certification’s Role as a Market-Based Catalyst - Masami Shiba Field Science Education and Research Center, Kyoto University Kyoto, 606-8502, Japan Tel +81-75-753-6441; Fax +81-75-753-6451 E-mail: mshiba@kais.kyoto-u.ac.jp Naoya Ogawa Project Development Dept., Planning HQ, AMITA Corporation Tokyo, 102-0075, Japan Tel +81-3-5215-8326; Fax +81-3-5215-3040 E-mail: nogawa@amita-net.co.jp FSERC/Dr. M. SHIBA

2. Purpose of this research The primary purpose of this research is to discuss the potential effects of forest certification in association with CoC on management and market strategies of plantation forestry through different certification schemes such as FSC, PEFC and SGEC which parallel or competently emerge on the same products markets in Japan and also partly in the Asia and Pacific regions. FSERC/Dr. M. SHIBA

3. Area to be covered • Background • Overview of development of forest certification in Japan • 　　　 ・　Forestry issues outlook • ・　The emergences of Forest Certification • 　　　 ・　Reaction to Certifications • Current Status • Concluding remarks FSERC/Dr. M. SHIBA

4. News of international exciting success, interesting stories or important events relating to forest certification over the several last months! FSERC/Dr. M. SHIBA

5. News - October 4, 2007 Independent Research finds FSC to be most effective certification option for sustainable forest management SFM in Canada. PriceWaterhouseCooper’s 2007 report on the Global Forest, Paper and Packaging Industry confirms Forest Stewardship Council (FSC) certification as the preferred choice of the industry’s top 100 companies. FSERC/Dr. M. SHIBA

6. News - June 25th 2007 A unique multi-stakeholder FSC National Initiative (NI) was established in China with the support of China’s State Forest Administration (SFA), the Chinese Academy of Forestry (CAF), the WWF China and many others. FSERC/Dr. M. SHIBA

7. China’s Timber Trade China’s market for industrial timber, pulp, and paper is the second largest in the world, outranked only by the United States. China’s timber product imports 1.5 time in volume between 2003 and 2006. FSERC/Dr. M. SHIBA

8. Development of FM and CoC certification in China FSC certification is growing quickly in China, particularly in Chain of Custody (CoC). There are over 300 FSC-CoC certificates issued and the numbers are increasing at an astonishing rate. In June 2007, China had six Forest Management Units (FMUs) certified according to FSC standards. In China, more than 700,000 ha of forest are currently FSC certified. FSERC/Dr. M. SHIBA

9. News - 27 September 2007 Odai-cho, Mie Prefecture The Toyota Motor Corporation, directing to domestic forestry reclamation model construction, acquired the private owner’s forest (Moroto Forest Product Corp. in Nagoya) of 1630ha located in Odai-cho, Mie Prefecture. For the promotion of sustainable forest management globally, TOYOTA is now starting various supports through its financial and technical development assistance at the private sector level. FSERC/Dr. M. SHIBA

10. Year 2001 2004 2007 Programs Area certified (%) FSC 22,165,741 (31.6) 40,422,684 (27.4) 90,710,640 (30.7) 32,370,000 (46.2) 48,600,000 (32.9) 69,408,326 (23.5) PEFC CSA 4,215,000 ( 6.0) 28,400,000 (19.2) 81,172,835 (27.5) 30,319,476 (20.5) 54,121,158 (18.3) SFI 11,336,032 (16.2) 70,086,773 (100 ) 147,742,160 (100 ) 295,412,959 (100 ) Total Overview of development of forest certification Forest certification verified by independent third-party assessments has widely accepted a relatively short time and has solidified its place as integral tool for addressing SFM issues in all types of climate forests around the world . Table Comparison of forest areas certified by major forest certification programs: in 2001, 2004 and 2006 FSERC/Dr. M. SHIBA

11. Statistical year: 2004 - 2006 Certification Programs Area (ha) Sites (No.) CoC (No.) FSC 199,853 - 267,706 19 - 24 202 - 413 SGEC 3,919 - 256,140 6 - 29 3 - 29 PEFC - - 3 - 20 Total 203,772 - 523,846 25 - 53 208 - 462 FSC certification is growing in Japan following its first forest management certificate in 2000. Currently, 24 forest management units are certified according to FSC's high social and environmental standards, covering a total area of 267,706hectares of forestland. One certificate holder consists of 120 groups, representing 3643 forest owners. Table Progress of FM- and CoC certifications under three different programs; in 2004 - 2006 FSERC/Dr. M. SHIBA

12. Completed forest certification under FSC program in Japan, as of October 2007 20/SGS/3028 10/SGS/5991 Certified turn/certifier/area (ha) Total area: 267,706ha FMUs: 24sites CoC: 413 14/SA/9266 11/SA/5316 12/SGS/955 8/SGS/3044 22/SGS/3984 E: Yamanashi 1:PRF/143000/P&N/SW/2003 19/SA/32391 6/SGS/1462 18/SGS/25526 7/SW/143000 3/SCS/2152 21/SGS/41 23/SA/1270 1/SCS/1070 4/SA/1814 17/SA/4447 2/SW/11312 5/SA/1257 24/SAS/106 9/SA/3274 16/SGS/12096 13/SA/2352 15/SA/1281 FSERC/Dr. M. SHIBA

13. Most of the 413 FSC chain of custody certificates are in the paper sector and Mitsubishi Paper Mills Ltd. (MPM) is one of the forerunners. FSERC/Dr. M. SHIBA

14. 2/3 of the Land is covered with forests of which 41% consists of plantation forests. Approximately 10 million hectares of plantation forests have been established since the end of World War Ⅱ for the rehabilitation of degraded land and the expansion of the timber industry. Current land use in Japan FSERC/Dr. M. SHIBA

15. Background Some sticky issues on plantation forestry in Japan Small scale forestry: average size of private forests is 2.6 ha and most (89 %) of the forests are 5 ha or less. Lack of forestry labor, aging of workers, increasing absentee owner, the depopulation of urban village. Lack of silvicultural tending: 60 % of the plantations are in the 15-35 year age class being under necessary of thinning. Few market chance for the thinned logs. Increasing awareness of environmental issues between public. Increasing unreliability upon changeable governmental forestry policies and related regulations. Continuing dependence on relative cheaper imported timber since 1970’s and shrinking the market opportunity for domestic forest industry sectors: the rate of domestic timber supply falls to less than 20 %. FSERC/Dr. M. SHIBA

16. Approximately 60% of plantations are less than 40 years olds and therefore need sustained nurturing. A concentration of plantations of the same stand, structure, and age class resulted, later causing a nationwide silvicultural problem FSERC/Dr. M. SHIBA

17. Small-scale individual forest owners comprise the majority of non-national forest proprietor. There are approximately 2.9 million private owners of non-national forests. They are widely dispersed throughout Japan and typically manage small-scale operations covering less than 5ha. FSERC/Dr. M. SHIBA

18. According to the most recent population survey in 2000, there were about 70,000 forestry workers, representing a decline to 9 percent of the peak number in 1960. Of these, 25% are over the age of 65, so a further decline in the near future is unavoidable. FSERC/Dr. M. SHIBA

19. It is increasing by necessary to promote the use of wood, especially domestic wood with the increase in forests ready for harvest, and the interest to use of wood as global warming countermeasures. FSERC/Dr. M. SHIBA

20. The industrial wood demand in 2004 increased from the previous year, and the domestic wood supply increased for two years in a row. In particular, the use of domestic conifer for plywood , mainly Sugi (Japanese cedar) increased. In addition, log export volume increased from previous year. FSERC/Dr. M. SHIBA

21. The timber demand ranges approximately from 90 to 110 million cubic meters per year or about one cubic meter per capita, which has been relatively stable. About 60% of this is lumber and plywood to be used in construction. In recent years the demand for lumber is decreasing while the demand for plywood and wood chip are increasing. FSERC/Dr. M. SHIBA

22. Number of new housing by construction methods in 2006 Today’s new housings by construction methods are classified into four types such as, the traditional post and beam, the wooden reinforced prefabricated, the two by four (2 x 4), and the steel reinforced prefabricated, respectively. Accordingly, over 62.3% of all new houses were built by the traditional post and beam method in 2006. FSERC/Dr. M. SHIBA

23. According to a complete survey of sawmills by power categories, there were 6479 mills under 75kw, 2444 mills under 300kw, and 497 mills over 300kw in 2004, respectively. Number of small-scale mills under 7.5kw is rapidly decreasing in these years. FSERC/Dr. M. SHIBA

24. The stumpage price of Sugi (Japanese cedar9 in 2004 was one-fifth of the price in 1980, and in 2005 one sixth of the price. Forest owners’ motivation towards forestry activities is diminishing due to the depressed profitability of forestry. LW: Logging wage, LWPI: Lumber and wood pro price index, CGP: Corporate goods price (Aggregate average), SMLP: Sugi middle log price, STM: stumage Sugi price, WHLP: Western hemlock log price FSERC/Dr. M. SHIBA

25. Missing or Weakness identified through certification program • Compliance with Law and Principles • ・In sufficient understanding of relevant forest, forestry and natural preservation laws, • ・No document records on natural and local laws and regulations related to forest management, • ・Lack of records on taxes, applicable charges, and other operational expense. • Tenure and Use Rights and Responsibilities • ・Lack of clearly documented and mapped information supporting legal ownership and boundaries, • ・No documentation of legal or customary use right to the non-timber products of local communities. • Community Relations and Workers’ Right • ・ Lack of opportunities for employee’s training and education, • ・Insufficient relevant health and safety guidelines and practices, • ・No documentation of the right of workers to organize and voluntarily negotiate with their employers, FSERC/Dr. M. SHIBA

26. Missing or Weakness identified through certification program Benefits from the Forests ・The expected level of harvesting is not clearly justified in terms of permanently sustainable yield of the timber products on which the management plan is based, ・No work plan and budget for management practice showing expected costs and revenues for short-term financial years, ・In sufficient extraction and processing of thinned logs on –site taking into account of the need to minimize timber waste; most thinned logs are left on site, ・Too emphasis and dependence on single forest products and lack of attempt to create non-timber products. Management Plan ・Lack of upfront documentation on the description of the forest in management plan, ・Missing mapped information on a management plan; maps adequate to guide on-site activities, ・Less freedom of timeframe (short-term, middle-term, long-term) of management plan; nebulous plan without updated description and condition. FSERC/Dr. M. SHIBA

27. Findings through certifications examined Although there are many different criteria between competing certification schemes applied to each management practice of forestry sector, most of the information identified as “missing” or “weakness” relative to each of criteria were surprisingly similar for the different types of forest operation, and they delineated of particular relevance to management context of Japanese plantation forestry. FSERC/Dr. M. SHIBA

28. Policy/management-based approaches SFM • Criteria and Indicators • Practice Code/Guidelines • Model Forests • Governmental Regulationｓ Market-based approaches Certification of Forest Products • Wood Supply Chain Management • Timber Logistic • Biomass use • IC/IT Technology Concluding remarks Forest certification will play an important role as a “catalyst” and/or “powerful driver” towards responsible forest management practices because these initiatives have requirements related to corporate environmental policies, industrial process planning, use of best available technology, self-auditing, and a commitment to continual improvement. FSERC/Dr. M. SHIBA

29. Sustainable Forest Management Forest Certification - to support environmentally appropriate, socially beneficial, and economically viable forest management. Why should such challenges be so meaningful ! • Private forestry sector will be examined to see how a Japanese private forest management would measure up to international standards! • Forest Owner’s Association done as a resource-manager (group) certification for a large group of small-forestland owners will be looked at as an example of how certification can work on the infrastructural reconstruction of cooperative association for the economic welfare of individual forest owners! • Industrial forestry sector will be looked as an example of how certification can work on sustainable forestry-based socioeconomic development through partnership with local communities! FSERC/Dr. M. SHIBA