The context of natural forest management and FSC certification in Brazil
This volume presents baseline information from four studies carried out in Brazil, as part of CIFOR's ongoing evaluation of the impacts of Forest Stewardship Council (FSC) certification on natural tropical forests. The findings of these studies will facilitate the design of an empirical impact evaluation, by providing background information on the biophysical, social, economic, and policy contexts of FSC certification. As such, this study aims to answer the questions of when, where, how, to what extent, why, at what cost to whom, and for how long FSC certification has contributed to the maintenance of the values of natural tropical forests. The components of this evaluation will link: 1) a theory-based impact evaluation of the intervention, developed through counterfactual analysis, and 2) a process evaluation, which assesses the extent to which the intervention was implemented as designed. Our first chapter (Introduction) lays out the rationale for this study, and provides an overview of its philosophy and implementation. Chapter 2 (Political economy considerations of the forest and timber sectors and natural forest management certification in Brazil) presents an account of the main factors that have shaped the occupation, transformation, and use of forest lands in Brazil. The colonization of forested areas of the Legal Amazon (hereafter the Amazon), and the associated changes in land cover, began in the second half of the twentieth century, with the implementation of federal policies that prompted agrarian reform by providing economic incentives for migration into the area. The region has been characterized by high rates of deforestation, driven mainly by cattle ranching and industrial agriculture, with logging as a secondary activity concentrated on the harvesting of high value timber. Deforestation is the outcome of land-use decisions by a range of social actors (e.g., federal and state governments, landowners, and smallholders). The land use decisions made by these actors may have been influenced by a number of factors, including explicit incentives to advance commodity production into the forest frontier (e.g. soy and cattle ranching), the development of infrastructure (e.g. roads, dams), and the expansion of services (e.g. education, health). As selective techniques are employed, logging contributes directly to forest degradation, but only indirectly to deforestation, and then only under conditions that favor land-cover change (e.g., increased access that facilitates agroindustrial development). In the 1990s, in response to high deforestation rates, rampant illegality, and alarming biodiversity losses, Brazil's federal government began to adopt measures to tackle these problems. Concerns about global climate change, which became prominent in the early 2000s, led the federal government to assume a more active role and demonstrate its commitment to forest conservation. A number of policies were implemented to curb deforestation in the Amazon, with the goal of reducing greenhouse gas emissions, which are mainly associated with forest conversion. These policies were consolidated into the Action Plan for the Prevention and Control of Deforestation in the Legal Amazon (PPCDAm), which was launched in 2003, and restricted land use change in selected forested areas by designating Areas of Permanent Protection (APPs) and Legal Reserves. In 2006, further legal provisions were introduced to regulate the activities of the forest sector, which led to the creation of timber concessions in Public Forests. 2006 was also marked by the establishment of the Brazilian Forest Service (SFB), which represented an important institutional innovation. Many States launched their own initiatives to curb deforestation (e.g. Acre state's 2001 Forest Law) and established institutions to support these goals (e.g. the founding of IDEFLOR in the state of Pará in 2007). The Forest Code (FC) (1935) was most recently updated in 2012. The New Forest Code (NFC) presents refined criteria for the use of forest resources on both public and private property. Legal frameworks for land tenure and forest protection in Brazil continue to be both complex and dynamic. Powerful and diverse actors at various levels of government and society have made forest policy definition a playing field that is loaded with conflicts and prone to corruption and illegality. The vastness of the Amazon has historically posed a challenge to the enforcement of regulations, which has been only partially overcome by the launching of the Projeto de Monitoramento da Floresta Amazônica Brasileira por Satélite (PRODES) satellite, and the initiation of the Real-Time Detection of Deforestation (DETER) program in 2009. A range of public and private institutions and non-governmental organizations (NGOs) (e.g. Instituto do Homem e Meio Ambiente da Amazônia [IMAZON], Instituto de Manejo e Certificação Florestal e Agrícola [IMAFLORA], Amigos da Terra), have generated knowledge that facilitates the identification of the fundamental constraints to responsible forest management, and opportunities to improve forest governance. Market-based instruments have become an important complement to command-and-control approaches. Examples include the emergence and implementation of instruments such as payments for ecosystem service schemes (PES) such as REDD+. Forest certification arose as a means to battle tropical forest loss and became a mechanism to facilitate market access with the prospects of more rewarding prices while fostering an image of social and environmental responsibility. The FSC scheme started in Brazil in the mid-1990s; in the early 2000s the national scheme CERFLOR, which is recognized by PEFC, was launched yet mostly focused on tree plantations. Although FSC certification is also more widespread in planted forests (61%), considerable efforts were made by institutions and initiatives to promote natural forest certification (e.g., Instituto Floresta Tropical – IFT since 1997; The Amazon Alternative –TAA since 2009; different international NGOs and internationally-supported programs). Yet the limited potential of FSC certification to address loss of natural forest values rests on the limited proportion of timber produced that is aimed at export (22% in 2009) when compared to national markets. Chapter 3 (Typology of the timber sector and dynamics along the natural forest certification continuum) analyzes characteristics of the forest sector and the dynamics of FSC certification, using data from 1994-2013. The heterogeneity of Forest Management Unit (FMU) traits that determine management decisions is analyzed for just a fraction of the FMUs in the country (N=65 out of ~ 2000), due to the wide range of coverage of timber harvesting operations (i.e. in 192 municipalities). Sampled units were located in polos madeireiros (i.e. regions where >100,000 m3 / yr. of roundwood is industrially processed) where there was some evidence of involvement in the certification process (e.g. participation in improved forest management training sessions; scope-visits to assess baseline management conditions; and audits to verify compliance with certification standards). These decisions are, in turn, located along the certification continuum, a conceptual model that identifies the certification states of FMUs. Data were collected for 22 Amazonian polos madeireiros and used to discern groups of FMUs with several shared characteristics. Characteristics were chosen based on their potential to affect the outcomes of management operations relevant to an impirical evaluation of FSC certification impacts. The analysis revealed that most FMUs in the sample are vertically integrated (97%) and Brazilian owned (83%). The resulting four "clusters" of similar FMUs differed in terms of: FMU area, company origin, and market outlets explained 67% of the variance. The clusters also differed in terms of the extent of their engagement with certification, with only limited engagement among FMUs in clusters 1 and 2 (53 FMUs), and greater involvement among FMUs in clusters 3 and 4 (12 FMUs). The second part of chapter 3 presents a more detailed account of how FMU decisions on certification have evolved over time. Based on data gathered from the FMUs, and records collected by certifying bodies (CBs) and FSC over a period of 20 years, it was possible to document the FMU's activities which indicate their interest in adopting certification (i.e., along the certification continuum). The first step along the certification continuum was defined as the participation of FMU staff in training activities related to improved forest management. Although this activity does not guarantee the FMU's intention to proceed with FSC certification, it is the first step towards responsible forest management. Although the vast majority of FMUs surveyed (99 out of 105) had engaged in improved management training, 71% of these FMUs had made no further effort to become certified. Temporal peaks in engagement along the certification continuum are apparent, perhaps due to external incentives to participate in the training programs (e.g. IFT training in 2001; training supported by TAA in 2009). Later peaks (e.g. 2012) may be attributable to government bonuses and benefits for FMUs adhering to international certification schemes. Just over half of all certified FMUs (14 out of 24) were still certified at the time of this study's completion. In recent years, documented logging production in Brazil has declined from 24.4 million m3 in 2004 to 11.6 million m3 in 2010. Possible causes of this include market competition from abundant, illegal timber and burdensome bureaucratic procedures that restrict access to logging rights. Volumes of certified timber have also declined, from 540,000 m3 in 2011 to 340,000 m3 in 2012. Experts estimated that there was potential for FSC certification in Brazil to expand by 36% by 2015. These estimates were based on the on- going expansion of forest concessions on public lands. Understanding the motivations of FMU managers for seeking certification can enhance our understanding of how certification might expand. Chapter 4 (Assessment of self-selection into natural forest management certification in the Brazilian Amazon), provides insights into the factors that might motivate a company to pursue, obtain, and retain FSC certification. Semi-structured interviews were conducted with 10 stakeholders that represented a range of interests with respect to certification, out of a potential sample of 49 companies in 10 selected polos madeireiros that had received training in improved forest management through TAA or IFT. This information was combined with the results of reviews of documentation (e.g., IMAZON and FSC reports) and relevant scientific literature, which focused on the years 2004–2009, when 46% of all certificates were issued. A non-negligible proportion of the interviews corresponded to FMUs that had either ended operations or were no longer involved in the management or logging of natural forests (i.e. 36% of the companies that had indicated interest in certification by participating in forest management training). Each of these interviews helped to identify: the characteristics of companies/ FMUs that would never consider certification, might consider certification, and would definitely seek certification; the advantages and disadvantages of certification; and recommendations for how to promote certification. The interviews revealed that companies operating in regions with social conflicts, and those selling timber to local markets were highly unlikely to consider certification. Other companies were unable to consider certification because they lacked management and/ or annual cutting plans, which prevented them from operating legally. The ability to publicize the certified status of an FMU might facilitate its access to international markets. Despite this potential advantage, respondents pointed out that high costs of compliance with certification requirements, in addition to competition from producers of illegal timber, deters participation. This reluctance was also reported among FMUs that received initial support for certification, but were unable to cover the continued costs. According to respondents, necessary improvements to the certification system include: increased transparency, disclosure of reports, and communication with the public; as well as increased market demand and stability, including from national market outlets. The descriptive research presented in chapter 5 (Conclusions) provides a comprehensive overview of the dynamics and characteristics of managed natural forests as they relate to FSC certification in Brazil. Although the adoption of certification remains modest, despite the considerable efforts of a range of individuals and organizations, FSC certification still could have a significant, potential role in maintaining forest values. Brazil is one of the few tropical countries with a specific program (implemented in 2013) to facilitate the FSC certification of forests managed by traditional and indigenous communities, and small-scale producers (i.e., Small or Low-Intensity Managed Forests [SLIMF]; < 100 ha; <5,000 m3 /yr.). Community forest management in Brazil has generated a range of innovative modes of resource use. Yet, the added value of FSC certification for community managed operations remains to be demonstrated. This report provides the foundation to implement an empirical evaluation of FSC impacts. A theory of change is now required to guide the impact evaluation's assumptions, definitions and the testing of its hypotheses, to reveal the impacts of FSC certification of Brazil's natural forests, and the overall engagement of social actors with stakes in their management.