The New Staple State: Political Economy and Public Policy Regimes in Canada’s Primary Industries

Emergence and Support for Forest Certification in Canada

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Emergence and Support for Forest Certification in Canada

The FSC conception of forest certification first entered the Canadian forest policy community as an idea in the mid-1990s, following the FSC's founding meeting in Toronto in 1993. A national FSC office was officially launched in 1996. In addition to social, environmental and economic chambers, a fourth "aboriginal" chamber was created for national board deliberations and for regional standards setting processes (Forest Stewardship Council 1999). However it would be some time before the FSC idea would gain significant attraction in Canada. Instead, industry turned to the second conception of certification, with the Canadian Pulp and Paper Association (CPPA, renamed the Forest Products Association of Canada in 2001)—taking a leadership role in creating the Canadian Sustainable Forestry Certification Coalition35 whose mandate was to create an internationally recognized, third-party certification system for Canadian forest companies. Ultimately the CCPA approached the Canadian Standards Association, which operates under the rules and discipline of the National Standards System about creating a CSA forest certification standard reviewed above.

The Canadian Council of Forest Ministers, the Canadian Forest Service, and Industry Canada, and most Canadian forest companies gave early support to the CSA certification process, viewing it as a more legitimate alternative to the FSC while, they hoped, being adequate enough to maintain market access (Elliott 1999). Most major environmental groups, along with other social organizations36, ended up boycotting the CSA process (Gale and Burda 1997), arguing that the CSA was an effort to reduce the stricter environmental regulations offered by the FSC (Mirbach 1997), and that the CSA would permit, among other things, continued clearcutting (Curtis 1995) and the application of chemical pesticides (cited in Greenpeace Canada, Greenpeace International, and Greenpeace San Francisco 1997: 25).

FSC supporters responded to these intense efforts to promote a certification alternative with aggressive market focused strategies targeting European purchasers of Canadian forest products. Drawing on previously successful boycott campaigns, environmental groups were now returning to the same companies to offer them a carrot (public recognition that they were supporting sustainable forest management) alongside their usual stick (that they would also be subject to a boycott if they did not comply). Most of the efforts were focused on Germany and UK specifically, from the British Broadcasting Corporation’s magazine publishing division, the British home retailer B&Q, and key German companies such as publisher Springer-Verlag and paper producer Haindl.37

In addition to the targeting of individual companies the World Wide Fund for Nature (WWF) also helped establish “buyers groups” where “environmentally and socially aware” businesses would be recognized by the WWF as supporting environmentally sensitive harvesting practices. The first example was the creation of the WWF 95 group, later changed to the “95 plus group”, established in anticipation of the FSC in 1991. By 1997, FSC buyers groups existed in Germany, Belgium, Austria, Switzerland, and the Netherlands (Hansen and Juslin 1999).

As we show below support from Canadian forest companies has mirrored a pendulum of sorts – with strong and unified support for the CSA dissipating as key companies, including JD Irving in the Maritimes (Lawson and Cashore 2001) and six of the top nine industrial companies in BC (Cashore, Auld, and Newsom 2004: Chapter Three), giving the FSC serious attention. Yet following standards setting processes in both regions much of this support dissipated, leaving the CSA and SFI as preferred programs of most companies. Yet revealing the highly dynamic processes, the FSC would enjoy somewhat of a revival in 2004, as industry giant Tembec was joined by Domtar in promoting FSC certification on its forest lands, most of which are found away from the historical battle zones of their competitors in BC and the Maritimes.

The remainder of this chapter details these regional experiences in BC and the Maritimes, including the development of specific standards that were required to follow FSC international’s principles and criteria. We focus on assessing the underlying support between environmental groups and industrial interests for non-state forms of governance designed to regulate staples extraction in the forest sector in these two regions.

British Columbia

The British Columbia case is important because it became a key battle-ground in which industry and environmental groups pursued their efforts to define and address sustainable forestry regulation through NSMD governance. However such attention was not preordained or expected, as certification was originally deemed of little value among members of the BC forest policy community. The first group to champion forest certification in BC was the Silva Forest Foundation, an organization that fundamentally challenged traditional industrial forestry approaches to forest harvesting and emphasized community based, smaller scale, and lower impact “eco-forestry” harvesting (Gale and Burda 1997).

In these early days forest certification efforts were poorly funded, receiving little in-kind support from domestic and international environmental groups, nor support from US philanthropic foundations that had been the lifeblood of the province’s environmental movement. Most environmental groups at this time were focusing mainly on public forest policy in BC, including the effectiveness of the provincial Forest Practices Code (Sierra Legal Defence Fund 1996), which came into effect on June 15, 1995 (British Columbia. Ministry of Forests 1995). However, high-profile environmental organizations, such as Greenpeace, did recognize the value of the FSC, offering the fledgling program their support, in the hopes that such a move might apply further pressure on the BC government and forest companies to reform their forest management practices and policies (Greenpeace). The idea that BC companies might actually be able to meet FSC’s high standards was not deemed likely.

The initial support and direction of the FSC reinforced the view within most forest companies that if certification were to occur it ought to be through the CSA process (Paget and Morton 1999). The hope was that the CSA program would ensure international customers that “Canada is working towards sustainability in its forests” (Forest Alliance 1996) without having to adhere the stricter standards promoted by the FSC.

At this time federal and provincial agencies offered funding and technical support to assist in correcting what they asserted to be “misinformation” distributed by environmental groups about BC forest companies (Greenpeace Canada, Greenpeace International, and Greenpeace San Francisco 1997, 20-25; British Columbia. Ministry of Forests 1998). Reflecting their trade-oriented mission, Canadian embassy officials in Europe played a key role, setting up meetings where local buyers were invited to presentations made by BC forest-company and government officials.38

Meanwhile environmental groups such as Friends of the Earth, Greenpeace, and Rainforest Action stepped up their media campaigns to criticize BC forest practices and, following what they perceived to be a weakening of BC’s forest practices code, began to directly relate their demands that Canadian companies undertake steps toward FSC certification (Paget and Morton 1999)(Hansen and Juslin 1999).

By the mid-1990s the mood within BC forest policy deliberations was one of continued conflict. Environmental groups remained dissatisfied with the provincial government’s forest policy initiatives and were unwilling to offer support to the CSA program. They continued pressing international buyers of wood from BC’s large vertically integrated firms in the hope that BC companies would modify their forest management practices. However, the FSC Principle Nine -- which addresses the management of high conservation value forests -- continued to pose problems to BC forest companies that might otherwise have been willing to consider the FSC.

With no side willing to back down, market efforts expanded through the creation of the Global Forest and Trade Network (GFTN) in September 1998, which was designed to coordinate the activities of the national buyers groups around the world (World Wildlife Fund for Nature 1999). And in the US, the Certified Forest Products Council (CFPC) was launched officially in 1998, merging the former US buyers group with the Good Wood Alliance (World Wildlife Fund for Nature 1999). This development was significant for the BC forest companies as together they sent approximately 73 percent of their softwood products to the US market (Council of Forest Industries 2000). Seeing an important window, market campaigners, led by the San Francisco based Rainforest Action Network, decided at this time to target much of their efforts on the US do-it-yourself-giant, Home Depot

These developments occurred alongside the parallel market campaign led by Greenpeace to force logging companies to stop harvesting in BC’s central coast region, which, as noted above, was important because it illustrated how environmental groups and forest companies might work together, offering a way out of the continued polarization of the public policy debates. The central coast campaign focused on MacMillan-Bloedel (now Weyerhaeuser), Western Forest Products (WFP), and Interfor, all of whom were suffering economically owing to their reliance on the collapsed Asian markets, and their inability to move more products into the US market owing to the Canada-US Softwood Lumber Agreement (SLA) quota system, which rendered FSC European market strategies even more effective on BC companies than they might otherwise have been.

The market-based campaigns were further facilitated by focusing on the most vulnerable firms (Stanbury 2000) of which Western Forest Products, which operated on the central coast, was a key target. Initial successes forced BC companies to re-evaluate their previous forest certification choices. For example, having been informed by Greenpeace UK that some of its products bought from German suppliers (publishers) might be coming from the central coast’s “Great Bear Rainforest”, the British Broadcasting Corporation, queried these German suppliers for verification, who subsequently decided they would suspend their contract with WFP.39

Faced with intense scrutiny, Western Forest Products became the first company in BC to announce its application for FSC certification (Hayward 1998; Hogben 1998). One industry official called this a “breaking of ranks” of previous industry support for only the CSA40. And just a week later, MacMillan-Bloedel also “broke ranks”, announcing intentions to pursue FSC certification (Alden 1998; Tice 1998)(Hamilton 1998) as well as its withdrawal from membership in the Forest Alliance (Hamilton 1998).

What is important to understand about these early commitments is they were undertaken before any changes had been made to the FSC’s Principle Nine, but on the belief, or hope, that once BC standards were developed existing practices would suffice. As WFP’s Chief Forester, Bill Dumont, was quoted as saying, "We do not expect in any way to have to make significant changes in our operations (Hogben 1998).”

Standards-setting process

These initial firm-level decisions sparked a series of strategic decisions within the BC forest industry to participate in FSC processes in order to change the program from within, rather than fighting it from the outside. At the provincial level a number of key forest companies were now indicating some degree of support for the FSC, including joining the FSC standards-setting process, rather than boycotting it - a decision that stood in stark contrast to most US forest company decisions to not participate in FSC regional standards-setting processes. Individuals, companies, and associations began to apply for membership (Hamilton 1999; Jordan 1999), taking elected positions on the FSC-BC steering committee and nominating and having their members posted to the BC Standards Team (Forest Stewardship Council. Canada 2002). And in a striking move, the Forest Alliance of BC, soon to be joined by BC’s Industrial Wood and Allied Workers Union, decided to apply for FSC membership, attending its meetings, and influencing policy debates (Jordan 1999). Importantly, this increased support was occurring as the Home Depot announced its pro-FSC purchasing policy in August of 1999 (Carlton 2000). While movement had already started in the BC case, this announcement certainly served to shore up support, with industry officials now recognizing that BC’s largest market, not just Europe, was becoming an increasingly important factor in shaping its certification choices.

The result of these moves was that support for the CSA was being undercut, since companies were focusing on changing the FSC, rather than attempting to make the CSA more palatable. The BC industry strategy to “work from the inside” was also welcomed by FSC officials, with one industry official explaining that “In BC... [the first FSC standards development process] turned out to be a complete mess, so they wiped the slate clean and they’re starting over again. The industry is making damned sure that they’re [at the standards development process] this time, so they get something out of it, if they have to do it.” 41

The response of many provincial governmental officials toward the FSC mirrored these firm level strategic changes. Governmental officials in the Ministry of Forests and trade agencies were at first highly skeptical of certification in general, and the FSC in particular, laying out conditions under which certification must work in the province (British Columbia. Ministry of Forests 2000). (Though industry was clearly the target, support from the government was key, since, as both the regulators and owners of 95 percent of the forest land base, their support would be important for removing any obstacles that might exist). However, by 2000 government support was increasingly proactive. The recently elected Liberal government indicated it would work to address conflicts between provincial legislation and the FSC standard (Haddock 2000) and BC forest ministry officials now participated in the post-industry joining the FSC-BC standards setting process by offering its expertise to the Standards Team. In 1999, the government had the Small Business Forest Enterprise program (SBFEP) assessed to determine the changes that would be required to achieve certification on SBFEP lands, including according to the FSC rules (PricewaterhouseCoopers 1999). As a result of these dynamics, by 2000 six of of the nine largest forest companies in British Columbia had either made an announcement of their intention to pursue FSC certification, or had made other proactive overtures.42

However, two important caveats are in order to describe this period. First, companies in BC were clearly hedging their bets -- they had not given up on the CSA approach and could easily turn to only support the CSA if the market pressure ended. Second, CPPA efforts to support the CSA in European markets had not in any way abated. Still, European buyers continued to view the CSA as unable to satisfy their own certification requirements, including the lack of an international profile. The CSA has responded to the latter criticism by joining the PEFC program, and recently had its approach formally “recognized” through the PEFC mutual recognition program. The CSA also addressed its credibility issue by launching a new “Forest Products Marking Program” which introduces a chain-of-custody system and a product label (Canadian Standards Association 2001).

While leaving options open with the CSA, BC forest companies and their allies were able to use their decision to support the FSC to target what had long been considered a key obstacle: the fear that, if not clarified or changed, Principle Nine on old growth forests would make successfully pursuing FSC certification difficult. The BC government echoed these concerns, arguing in a press release that, "We urge European buyers to support certification processes which are compatible with the sustainable forest management practiced here, but we are opposed to approaches that inherently discriminate against jurisdictions like BC which retain and protect significant amounts of primary forests while continuing to harvest in them (British Columbia. Ministry of Forests 1998).”

In part recognizing that the BC case could lead to significant gains for the FSC if the Principle Nine obstacle could be removed, the FSC clarified Principle Nine so that it was clear it was not forbidding harvesting in old growth forests per se, but in maintaining or enhancing “high conservation value” forests.43 Partly in an effort to limit further changes to the FSC standards, “Good Wood Watch” was created by Greenpeace, Sierra Club of BC, The Friends of Clayoquot Sound, West Coast Environmental Law, The David Suzuki Foundation, and the Rainforest Conservation Society, to specifically “[ensure] that the FSC-BC Regional Standards develops into a credible standard that upholds ecological integrity and social responsibility (Good Wood Watch 2001).”

By the end of 2001 the FSC in BC was in the rather enviable position of working to maintain key forest company support, rather than still striving to achieve it. Forest companies were working within the FSC to make it more hospitable to their profit-maximizing goals, while the environmental groups pressed to keep the standard as high as possible.


Despite this rosy picture painted for FSC supporters in BC, the year 2002 would witness what some observers had predicted -- increased acrimony between industry and environmental groups over the final draft of the regional standards, and a signal from industry actors that their support of the FSC might be short lived. Produced in the summer of 2001, the final draft standard was crafted by an eight-person technical standards team and was then revised by the working group’s steering committee after having been subject to widespread public comment. By a 7-1 margin with Bill Bourgeois, the sole industrial forestry representative, voicing his opposition, the committee voted to send the standards to FSC Canada for approval. While different actors have different interpretation of what transpired the overall story is not in dispute. Bourgeois voiced concerned that the emerging standard was going to place the FSC as a “boutique” standard that would be unacceptable to the major industrial forest companies in British Columbia: “If it is the stated intent of FSC Canada to have a regional standard for British Columbia that will be applied in a limited number of unique circumstances, I would say that Draft 3 should be endorsed. On the other hand, if FSC Canada’s intention is to have a standard that will be applied across a spectrum of sizes and types of forest operations, then Draft 3 should not be endorsed. In which case further work is required to develop a certification standard that measures the achievement of good forest management, and which has broad applicability in British Columbia (Bourgeois 2002).”

Mirroring industry responses to the Harcourt government’s Forest Practices Code Act (Hoberg 2001), Bourgeois asserted that he could not support such standards without an impact assessment of the effects of these standards on industry economic health and its annual allowable cut. The announcement took other participants by surprise -- they asserted this was too late in the day to perform such an assessment, while Bourgeois felt that an assessment was not possible until the final standards were known.44 Assessments were conducted on the economic viability and costs of the standards (Spalding 2002) and impact on allowable cut (Bancroft and Zielke 2002), and both reports predicted significant cost increases to the BC forest industry, and impacts on the AAC from 10-30% of existing allocations.

Frustrated environmental and social participants sent the standards on to FSC-Canada despite Bourgeois’ objections45 and the FSC Canada board likewise voted to send the standards to Oaxaca for approval (Forest Stewardship Council. Canada 2002), though with no support from the economic representative (Tembec voted against and the other member abstained). The FSC international office scrambled to put its British Columbia egg back together again. If they accepted the standards, they risked losing support from industry in one of the places in the North that had been most hospitable to FSC-style certification -- and risked sending signals to other potential industry supporters to be very careful before offering support to the FSC.

This conundrum came at a time when the CSA had been given new life. The CPPA recreated itself as the Forest Products Association of Canada in 2001, hired a new director, moved to the nation’s capital, and immediately began to set a path of “approachment” with the World Wildlife Fund and the Global Forest and Trade Network. While efforts to have the CSA formally interact with the FSC have proven difficult, the future path in BC, and in Canada as a whole, does now seem to rest on the ability of strategic actors, both within the FSC and the CSA, to recognize what kind of strategies are most likely to be effective given the environment within which they operate, and the broader constraints imposed by market-based governance. Recognizing these dynamics, FPAC announced in 2002 that it would be a requirement of all of its members to become third party certified but left open to individual firms whether to undertake FSC, CSA, SFI, or some combination thereof (Forest Products Association of Canada, 2005 #8616).

FSC international officials similarly recognized these constraints. They supported changes made at their General Assembly that would require broader support from national initiatives before standards were sent to Oaxaca for approval. And in January of 2003 they proposed a compromise solution for the BC case in which standards would be approved, but subject to revisiting a number of the most controversial rules, and to involving forest companies directly in such revisions. Indeed, their report went out of its way to note that a number of the BC standards went “significantly beyond the requirements of the FSC P&C (Principles and Criteria) (Forest Stewardship Council 2003: 5).” And in a direct rebuke to the BC regional standards setting process for moving ahead without industry support, the report asserted that such high standards would require a “higher than normal degree of agreement (Forest Stewardship Council 2003).”

Canadian Maritimes

Forest certification gained support in the Canadian Maritimes, in contrast to BC, among environmental groups who had focused their efforts on domestic centered processes, with limited efforts or abilities in using European markets to influence forest company evaluations. Environmental groups in this region had developed longstanding critiques about industrial forest practices in the Maritimes, particularly over the use of biocides (herbicides and pesticides), as well as how to maintain naturally functioning ecosystems, but had had limited success in influencing forestry regulations and practices. As a result, environmental groups saw the FSC as a new, more hospitable arena in which to force change and seek redress over their longstanding industrial forestry critiques. They a number of small woodlot owner associations who shared their critique of industrial forestry practices (Sandberg and Clancy, 2000, pp. 201-270, May, 1998, Sandberg, 1992), as well as aboriginal groups who were attempting to gain increased access to the forest resource. 46

However, the Maritimes process did involve industrial participation from one of the region’s most dominant, and domestically-owned, industrial forest company, JD Irving.47 Irving officials saw the FSC as an opportunity to demonstrate to the world and to the market place that it was indeed practicing responsible forestry. In fact, Irving was quite proactive in its support of the FSC, having been in contact with Scientific Certification Systems (SCS) about third party certification of its practices, and with Home Depot, long before the giant retailer made its 1999 announcement that it would support FSC style certification. Largely owing to its proactive approach, JD Irving had decided to proceed with FSC certification before regional standards process had been developed, relying instead on provisional rules developed by its FSC endorsed auditor, SCS.

These different starting points among environmental groups meant that while non-industrial stakeholders saw the FSC primarily as a way of offsetting perceived industrial influence over public policy development, Irving saw support of the FSC as a way to recognize as environmentally appropriate its conception of industrial forestry, including what it asserted to be the responsible use of biocides in intensive management.

These two very different conceptions about the role of the FSC explain the ultimate clash during the FSC regional standards-setting process. With limited direction, at this time,48 from FSC-International and FSC-Canada over how this process ought to be structured, the initial approach did not immediately adhere to the international “three-chamber” format, or to the “four-chamber” format that would later come to be a requirement of Canadian FSC standards setting processes. Instead, the April 1996 stakeholders meeting in Truro, Nova Scotia (known as “Truro I”) decided on a nine-group structure, of which only one member came from large industry.49 (There would be two representatives from each group forming the Technical Standards Writing Committee; the latter was to draft regional standards and refer them back to a second large meeting). While participants agreed to follow a “consensus” approach, this resolve dissipated when it came time to address the key public policy controversies of the last two decades, with Irving feeling isolated from the non-industrial interests, and environmental groups and their supporters feeling, similarly, that Irving was being intransigent.

Development of the Standards

Over more than two years, the technical standards writing committee met monthly for two- to three-day sessions. Step by step, the least controversial aspects of the draft standards were developed and refined, but the most important controversies that had dominated public policy making processes were not resolved. Public consultation meetings were held in August and November 1997 and again in May 1998, drawing considerable interest from the general forest policy community. On June 23, 1998, a second review meeting was held (known as “Truro II”), with fewer industrial interests attending, as the industry felt increasingly frustrated by their lack of influence.

On July 15, 1998, a 19-member Maritimes Regional Steering Committee was established and given the task of developing the technical standards into regional working standards. About half the members had been on the technical standards writing committee, with Irving’s chief forester Blake Brunsdon the sole industry representative. Just four days later, 12 of the 19 members of the Maritime Regional Steering Committee completed their review of the technical standards; the latter were much stricter than existing public policy regulations governing pesticides, herbicides and natural forest regeneration (Duinker: 1999, 47). For these reasons, Irving would later express its opposition to the draft standards as well as to the processes that led to these decisions.

On August 1, 1998, the Maritime Regional Steering Committee passed on their draft standards to the FSC national office, which in turn asked the steering committee to reconsider their proposed standards. The national office argued that other FSC regional standards, such as those in Sweden, had taken more flexible approaches on the issues in question (Boetekess, Moore, and Weber 2000: 4; Duinker: 1999, 47).

The FSC Maritime Regional Steering Committee then met to reconsider its standards, with environmental groups and their allies announcing that a consensus had now been reached among all participants on biocides (6.6.1 and 10.7.2), exotics (6.9.2) and conversions (10.1.1) (Duinker: 1999, 47). While debates continue between the two sides about whether there was indeed a fleeting consensus at this meeting (Boetekess, Moore, and Weber 2000: 29- 30), the next day Irving’s Chief Forester, Blake Brundson, made it clear that Irving could not support the standards.

At this point, JD Irving faced a dilemma. It had just earned a precedent-setting industrial certification at its Black Brook site under the more flexible Scientific Certification Standards (The Black Brook site had been known for intensive industrial forest management, in which the use of biocides and the conversion of sites to single-species stands were key components.) Irving faced two choices: adhere to the new, stricter FSC regional standards in order to maintain its FSC certification, or launch a final attempt to convince FSC Canada and FSC International why its current practices should be FSC certified. Deeming the draft standards so costly to its operations that the costs of adherence would outweigh any economic and social-license benefits, Irving reasoned that its only ability to stick with the FSC lay in attempting the latter route. Such a strategy would not be easy. Shocked by FSC approval of the Black Brook site, the Sierra Club of Canada immediately appealed, reasoning that FSC certification there would entrench the very forest practices against which they had spent decades campaigning.

This time, Irving’s efforts to seek redress again at the Canadian FSC national level failed, mirroring similar dynamics we reviewed above in the BC case. With strong dissent from the lone industrial representative at the FSC national level, Tembec, the majority of board members voted to pass the draft standards on to FSC International for consideration and approval, while requesting advice from FSC International on the controversial biocides standards (Boetekess, Moore, and Weber 2000: 4).

Irving simultaneously appealed to FSC International to have the FSC Canada approval overturned, registering formal complaints about the Maritimes process (Boetekess et al., 2000, p. 4, Duinker: 1999, 49). As with the BC situation, the FSC- International officials knew they faced a conundrum: the desire to maintain one of their biggest industrial supporters in the Canadian Martimes and US Northeast, without alienating some of their most committed environmental and social advocates.

The FSC-International attempted to strike a delicate balance in two ways: it provided conditional approval for the standards in January 1999, but it also required the Canadian office to address Irving’s appeal. Preconditions for the approval included requirements that: 1) standards would have to be “harmonized” with the standards of other FSC regions; and 2) a number of specific procedural requirements in the standards, including those for biocide use, would have to be re-examined (FSC-Maritimes, 2000, Annex 1, pp. 55-6). The FSC-International executive director was to assess the results in three months time. Any biocide standards that remained different from FSC standards elsewhere, they ruled, would have to enjoy “significant agreement by all relevant stakeholder groups”, and even then, such standards would be reviewed after two years. Conflict now arose within the Maritimes about whether “significant agreement” could be met without industrial forest company support, since the other economic representative involved with the FSC-Maritimes, a small private woodlot owner, tended to side with the environmental and social majority.

Disputes continued on several fronts in February and March 1999. The Maritimes Regional Steering Committee met regularly to address FSC International’s preconditions and on February 22, the Canada Working Group dispute resolution process began to consider Irving’s appeal of the Maritimes process. Now other industrial interests, concerned with the proposed standards, stepped up their interest in the regional standards process. Recognizing the difficult road ahead and the need to think strategically about its commitments to certification, Irving cultivated certification credentials beyond the FSC-Maritimes. It had its Black Brook operations successfully audited under the systems-based International Organisation for Standardisation (ISO) Environmental Management System (JD Irving Ltd. 1999), while continuing its efforts to achieve FSC certification in northern Maine – which fell under what Irving felt was a more hospitable FSC standard setting climate.

Ultimately while a number of revisions were made to the draft standards, efforts to gain industrial support for the final standards failed, owing largely to continuing disagreements about the use of biocides. Faced with essentially the same dilemma in September 1999 that it had repeatedly faced during the spring and summer, the FSC regional process did not find any new solution to the fundamental and underlying structural and policy issues. Meanwhile the FSC national office’s dispute resolution process, for the most part, ruled against Irving’s appeal.

Recognizing that this ruling could be the last straw for Irving and undermine general efforts to obtain industrial support for the FSC, FSC-International officials undertook three strategic overtures. First, it initiated reforms to representation and decision-making requirements that they believed would make more balanced future power relationships amongst participating stakeholders in the region (Forest Stewardship Council. Maritimes 2000). (FSC-Maritimes, 2000 #84, Annex 4, pp. 59-60)(Boetekess, Moore, and Weber 2000: 39)(Duinker: 1999 1, 49).50 Second, it commissioned a leading forest academic from the region, Peter Duinker, to report on whether the Maritimes Regional Steering Committee had reached the level of agreement FSC-International had required of it, notably on the biocides issue. (Duinker reported in November that given Irving’s dissent, it had not (Duinker: 1999, 51-2)). Third, it proposed that on the most controversial issue – the use of biocides – companies would have to make a clear, demonstrable commitment to phase out biocides, but they would not be required to meet an explicit time-frame. FSC International was clearly trying to show its best face to industry in general and to Irving in particular. Its denial of the Sierra Club’s appeal of the Black Brook certification -- on the grounds that key appeal documents had been filed late – coincided with these efforts and was also seen by some as an attempt to show good faith to industrial concerns.

The efforts at compromise pleased no one. On December 20, 1999, nine days after the FSC-International endorsed the regional standards, Irving publicly broke with the FSC-Maritimes process, returning its Black Brook certification and characterizing the Maritimes Regional Steering Committee as unrepresentative and biased (Brunsdon 1999; Canadian Broadcasting Corporation 1999). Observers wrote of a crisis of “North American proportions” (Kiekens 2000: 2; Boetekess, Moore, and Weber 2000: 57).

While many FSC supporters in the Maritimes continue to seek a reconciliation with Irving, the relationship appears to have been permanently damaged. Irving has remained disconnected from the FSC-Maritimes process following the Moncton impasse, and despite FSC overtures towards its, ultimately withdrew its support for the FSC in the US Northeast, which operated under more flexible rules (Cashore and Lawson, 2003)

Conclusions: Non-state Governance

Wellstead’s analaysis (Chapter) revealed that traditional “minimal”, “emergent”, “Keynesian” and “competitive” categories of the staples state literature have been confronted by a new era of post staples state policy analyses that see a policy “heterarchy”, in which “territorial synchrony” (Hajor), and a decline of “state sovereignty” (Jessop) are becoming enduring features of policy making (Scharpf). However, significant conceptual problems still exist within this literature, because it has yet to analyse NSMD governance as an arena of authority outside of existing state-centred approaches. Whether certification systems end up being ultimately subsumed by some form of traditional public policy, or become enduring features of NSMD governance that could replace, or compete, with traditional state authority, is one of the most critical questions facing students of a post-staples state and policy development. This chapter has contributed to such a project by carefully reviewing what constitutes the key features of NSMD governance, and whether and how NSMD systems might come to gain widespread support among societal interests as well as those industrial staples extractors they seek to regulate.

Our review of the British Columbian and Maritimes experiences with certification reveal strong interest in the structure and form of NSMD governance, but uncertainty about whether adhering to the FSC – whose main advantage was that it had support from most domestic and transnational environmental groups – would, for the same reasons, impose costs – both in terms of the level of behavioral change, as well as uncertainty that comes with relatively limited influence over the policy making process. However, what is striking is that as industrial companies in these regions came to feel marginalized by the FSC process, they did not abandon the idea of NSMD at all, but turned to alternative programs.

Where the competition between the FSC and its competitors will head is far from preordained. Indeed, contrary to the trends noted in above, in 2003 Eastern Canadian giant Domtar decided to join Tembec in pursuing FSC certification (Newswire 2003), giving support for the FSC in Canada new life. As part of its efforts to engage environmental groups including the innovative Boreal Accord (Canadian Boreal Initiative 2003), Domtar made the strategic choice that the good-will and market-access issues associated with FSC certification made its support worthwhile. And with environmental groups and other FSC supporters “learning” from the BC and Maritimes experiences, all parties seem intent on finding a negotiated solution to standards for the FSC Boreal forest standards.

In recognition of the ambivalence of its members in their support for different certification programs, but also their virtually universal support for NSMD governance, the Forest Products Association of Canada (FPAC) announced in 2003 that it would require its members to undergo independent third-party certification of their forestry operations by 2006 – while leaving open to individual companies whether they supported the FSC, CSA, or SFI (Canadian Business and Current Affairs 2002). Reflecting these trends, the Canadian forest sector contained, as of the summer of 2004, more certified forest land than any other country (Figure 2). And reflecting the increasingly global dimensions over the emergence of NSMD, the two key North American certification programs, the CSA SFI, each announced in 2005 that they had been formally mutually recognized by the PEFC – entrenching forest industry and forest owner association efforts to create a credible global alternative to the FSC.

For students of the Canadian staples state then, it is imperative to understand where certification is headed, and the potential effects of NSMD in regulating extractive industries. What is clear from the review above is that for NSMD systems to gain support, the market benefits must be evaluated as higher than the increased costs of compliance. This means that in the short run, NSMD systems cannot require standards impose higher costs than the economic benefits – otherwise they risk putting forest companies at a competitive disadvantage. However, in the long run the more NSMD systems gain support and recognition and become “accepted” practices by all or most firms, the more these governance systems will be able to develop more holistic and comprehensive requirements.

For these reasons any analysis of how NSMD governance emerges must take into account the logic of its dynamic impacts over the short and long run. To do this, scholarship must increasingly take into account the role of non-territorially based supply chains on company support, decision-making processes, and policy outcomes. Such recognition challenges the underlying assumptions of many staples-state scholars that the economic relations captured by the “hinterland and metropole” concepts are physically located in different geographical locations. While arguably always problematic, increasing economic globalization has revealed the difficulty with such stark descriptions. The economic relations described by the “hinterland” and “metropole” concepts are as valid as ever, but just where they reside, and the structures that influence them, are increasingly non-territorial in nature. Those designing NSMD systems appear well aware of these dynamics, and have created globally focused institutions that, if supported over the long run, may be able to regulate transnational markets in ways that states are unable.


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