© P.E. Huet - Rougier
In 2008, Rougier embarked on the process of securing FSC certification for its Gabon concessions and for its traceability chain (FSC-C017653). The decision was essentially a leap of faith: at that time, the absence of any longterm perspective made a purely economic reasoning impossible. The process has proved nothing less than a cultural revolution, allowing Rougier to adopt the best forestry management practices, to retain its marketshare and build a fund of experience that will be valuable for the future.
While the management plan is a regulatory tool for organising a sustainable forestry operation, certification is voluntarily implemented by the producer and has a wider remit, taking account of both environmental and social factors in a more comprehensive way.
The Rougier Group has been operating in Central Africa since 1952 and currently manages more than 2 million hectares of forestry concessions in Gabon, Cameroon and the Republic of Congo. The forestry concessions in the Congo basin belong to the state; they are allocated to a forestry operator by a tender process, for a period lasting between 15 and 30 years depending on the region and the land area involved. Once the concession has been granted, the forestry operator generally has three years to prepare and submit its management plan. The plan effectively defines in detail how the concession will be managed during the years ahead. The Rougier Group is currently implementing approved management plans across all its forestry concessions.
Rougier embarked on the certification process after having implemented a sustainable forestry management policy from 1994. Moving beyond basic forestry management requirements to operate in accordance with best forestry management practices, Rougier set up internationally recognised certification and legality/traceability verification systems across all its concessions. In 2008 the group reached a significant landmark, achieving FSC1 certification for 688,000 hectares of forestry concessions in Gabon. Certification can not be approached in a binary way. It is, by its nature, the result of a long process, with very specific milestones to be achieved along the way. For Rougier it is also the outcome of discussions – conflicts, even, at times – instigated by civil society.
Certification: origins and rationale
Historically, the management plans have been the first step towards certification. Yet the company already had an established forestry ma-nagement culture derived from the pragmatic imperatives of economy and effective resource management. The principle of rotation in harvesting ensured that the same stock was standing at the end of the rotation cycle – with reference to the woods used for commercial purposes. From the 2000s onwards, management plans were subject to regulatory approval: this gave companies like Rougier the opportunity to develop their experience and their range of expertise. At this point the company considered various kinds of certification and labelling schemes. Initially it opted to move towards the Programme for the endorsement of forest certification schemes (PEFC), partly because a local organisation, Pan African Forest Certification System (PAFC) Gabon, had just been established. But it was going to take some time for the PAFC system to be fully developed and officially recognised by PEFC International. Looking at both this situation and the fact that Rougier’s main competitors had definitely decided for the FSC – mainly because it was already operational, and supported by the major environmental NGOs – in the end the company decided for the FSC.
No-one could honestly deny today that this move towards certification in the mid-2000s was primarily driven by pressure from civil society regarding the trade in tropical woods. The NGOs in particular, who played a major role in raising consumer awareness, considered guarantees supplied by the operators themselves to be inadequate, judging that only the FSC label could provide reliable guarantees of good forestry resource management and proper consideration of local populations.
The commitment to FSC certification at this time cannot therefore be explained as the result of an economic calculation. There was no business plan: at that stage, in the years 2005–2006, no figures were available to plan the costs and amortisation schedules involved. Rougier, after all, was one of the very first companies in the Congo Basin to embark on the process. Moreover any projections would have been complicated by the frequent regulatory changes in the countries where the company operates – such as when Gabon applied a log export ban with effect from 1st January 2010.
So although there were many reasons for choosing the FSC, the move towards certification was still largely a leap of faith – a decision based on intuition.
The next step was to make it happen. The first FSC certification in Gabon came through in 2008 – but this had required three years of preparation and maturation. Internally those three years saw moments of doubt about the strategy, because of the high costs involved – costs that were multiplied in Gabon due to the geographic fragmentation of the company’s operations – and the cultural revolution it entailed. The failure of the first audit can be partly explained by the fact that local employees had not yet fully bought into the strategy. It is important to look beyond the technical criteria and take into account the time period required for major changes in habits and working practices to be assimilated on the ground (Box).
Actions taken to obtain FSC certification
Forest Management (FM) certification from the FSC is based on ten principles which include compliance with applicable laws, social factors (indigenous people’s rights, workers’ wellbeing, etc.), and various environmental requirements (conservation, stock renewal, etc.). The process has many stages, starting with a written application to a certification body accredited by the ASI (Accreditation Service International).3 Rougier’s forest management system was already geared to resource preservation and so the new investments required to obtain FSC FM certification in Gabon mainly related to the social criteria. Where industrial sites are located in an isolated rural environment, the group is responsible for its employees’ accommodation and welfare, guaranteeing access to all basic services. The group is therefore undertaking social initiatives in the areas of safety, hygiene, housing, education, food and healthcare. Occupational health and safety programmes have been set up and personal protection equipment has been issued to all workers. Access to drinking water is ensured; this involves drilling wells and making the water safe for drinking. Organic, metal and plastic waste is sorted and toxic or pollutant materials are stored in purpose-built locations. Information sessions are provided to ensure that staff are kept up to date with all these measures. Rougier compensates for the absence of healthcare infrastructures by financing the construction of medical centres and dispensaries, and recruiting nurses and even doctors. Medical visits and vaccination/STD awareness campaigns are organised on a regular basis. Continuing education is vital: an investment that also serves to build local capacity. The group is also funding the establishment of schools. Finally, in order to comply with FSC principles relating to intensive engagement with the needs of local populations, Rougier involves sociologists to prevent any conflict with local people and to reach consensus on the division of the areas under management.
Higher value for certified products?
One of Rougier’s leading FSC-labelled products is its 100% okoume plywood.2 The product has a very short marketing chain (a low number of intermediaries) and it is a finished product, ready to be sold. Nearly all the group’s plywoods now have FSC certification. These products are not necessarily sold to customers at a higher price, but the presence of the label on the products helps Rougier to maintain its market share where other producers have experienced significant declines.
With respect to sawn timber from Gabon – the raw product from the initial log processing stage – the FSC label does not automatically add value in the same way as for plywoods, although this can vary widely according to the specific type of wood involved. Here the marketing chain is longer: the sawn timber will be processed several times before being used for a given purpose by the end customer.
Whatever the product, the Rougier Group has not found that FSC-labelled products attract an automatic price premium. Yet certification does represent a definite competitive advantage, especially when it comes to maintaining a current market position or breaking into new markets. Manufacturers highlight specific labels and certificates in accordance with the prevailing awareness levels in each particular target market. In the US, for example, the Lacey Act was recently extended to include plant products, requiring importers to verify the legality of the products they import. In this market, Rougier focuses therefore on its TLTV certification (Timber Legality and Traceability Verification) – based on the assumption that this will reassure the market and that demand will grow as a result.
Much progress still needs to be made, however, in terms of raising awareness of the FSC among buyers and the general public. The picture still varies enormously from one market to another. In Switzerland, 68% of consumers recognise the FSC label, but the recognition level is no more than 10% in Spain, and less than 20% in the US and in France (FSC, 2012). Awareness is growing significantly, however, in markets like the UK and Belgium. Variations between different types of wood must be taken into account, too. Demand for okoume sawn timber is high in the Middle East and in southern European markets – in other words in markets where awareness of the FSC label is low. By contrast, other hardwood species also produced in Gabon are in great demand in northern European markets where the FSC label attracts a premium.
As for the costs of certification, excluding initial investments, in Gabon these amount to more than €1 million a year: around 30% for dedicated management, 10% for environmental monitoring and the lion’s share, 60%, for social initiatives (housing, healthcare, sanitation, education, etc.). While the return on investment in Gabon is still very limited, the growing interest in some markets could offer interesting opportunities in the medium term.
Any assessment of the switch to FSC accreditation must also take the non-economic benefits into account. The process literally transforms the company’s entire culture. From the first-aid kit in all vehicles to the hydrocarbon decanters/separators, and including accommodation standards for employees: at Rougier the improvement in working conditions has been enormous. Nonetheless it should be noted that accreditation has a major impact on resource management: the lower extraction rate means that operators need to expand their management plans and extend their concessions in order to harvest the same volume of wood as before.
The company also benefits from a far better image. The work undertaken as part of the certification process definitely helped to build more constructive relations with local civil society. Participatory mapping was used across the board, for example: local communities were invited to participate in mapping each concession or plot and drawing up an inventory of the trees (identifying, for example, the trees they regarded as sacred). This process substantially improved relations and the quality of dialogue with local populations.
No feedback report on certification can exclude a dispassionate look at the challenges the process involves. For example, in many non-mature markets (as regards responsible forestry resource management) the few operators who have opted for certification suffer persistent competition from wood with dubious origins and production methods. Even so, for a company like Rougier, turning back the clock would be unthinkable at this stage, given the progress achieved to date. The key is to maintain a long-term view when confronted with these immediate challenges. Rougier is therefore looking to finalise FSC certification for all its Congo Basin concessions. The company now has a valuable fund of experience to draw on – and a clearer view of the economic prospects, too.
Footnotes
¹ The FSC (Forest Stewardship Council) is an international NGO bringing together timber industry professionals, environmental groups, and representatives of indigenous community organisations. The FSC awards a label which certifies forests that are managed in a responsible and sustainable way.
² Okoume is by far the main tree species harvested in Gabon (65% of the total volume). It regenerates very well in open surroundings like village plantations or large forest clearings, but less effectively in a natural forest environment.
³ The ASI is the sole accreditation body for FSC and MSC certifications.
References / FSC, 2012, Newsletter n° 12, France, available at https://docs.google.com/document/d/1VFiFqZkXtaASvOiT3WQagSivE6qVfHKxWYRyzUsAMiQ/edit?pli=1#
