Forest Products, Pulp, and Paper

As we have already seen, on the environmental side, particularly, the combined forest, pulp, and paper industry has become an area that attracts high levels of NGO involvement and concern. Deforestation particularly of rainforests, has become a significant problem, and NGOs have been focused on this area since the 1980s, one of their longest-running campaigns . Unrestricted logging and deforestation programs have left an estimated 30 percent of the world s remaining forests seriously degraded, and despite efforts to slow the destruction, trees are being cut down at the rate of 130,000 sq km each year. Wetlands have been reduced by 50 percent over the last 100 years . It is a significant problem, made more difficult by the very low cost of labor required to cut the timber, and the enormous markups available to finishers and retailers for quality (e.g., mahogany) furniture.

A good example of this deforestation can be seen in Paragominas, Brazil, where for the past 15 years suppliers have been clearing the Amazon forest remorselessly, at a rate of nearly $1 billion worth of timber each year. What was once a thick forest is today unused, unkempt fields. Brazil banned logging of mahogany (which can bring up to $1,500 per every square foot ) in October 2001 fearing that at current rates of deforestation, most reserves of mahogany would be wiped out in a few more years; yet it continues to be cut down and sold illegally. Greenpeace has named almost 100 companies that it contends deal in this illegal mahogany to meet a growing demand from American furniture makers . [14]

Similarly, the Three Gorges dam project in China (financed in large part by well-known U.S. and European banking groups) has seen the forest cover of the Yangtze River catchment area reduced from 45 to 16 percent over the last 20 years. Much to environmentalists dismay, this included approximately 40 percent of the habitat of the Giant Panda. The project also promises to flood more than 100 towns and cities, causing the displacement of 1.3 million people, resulting in untold environmental harm to the Yangtze River valley. Although reforestation efforts have been partly successful, the project may have been one of the greatest environmental catastrophes of all time. [15]

Much of the focus of activist attention in this area has been on the do-it-yourself home improvement marketplace . These are the publicfacing companies such as Homebase and B&Q in the United Kingdom and Home Depot and Lowe s in the United States that provide retail sales of lumber products. They also provide both higher profile reputations and more vulnerable targets for protest.

The Forest Stewardship Council s (FSC) forest certification program, for example, launched in Britain in 1993, was one of the first and most effective NGO-sponsored campaigns that advocated ethical sourcing and focused not on pressuring the suppliers, but on pressuring the retail providers. Faced with mounting public and NGO protests about deforestation, and confounded by an inability to explain where their lumber products originated, these large retailers quickly began to require their suppliers to offer only FSC-certified goods. That meant extending the labeling and certification process through the distributors , manufacturers, sawmills, and ultimately, to the forest owners themselves , so that every item could be accounted for. [16]

Devised entirely by NGOs, the FSC program is a standard that contains 10 principles for good forest management, and a supply chain of custody certification process that provides for much more accurate tracking of sources throughout the extended supply chain. The FSC has developed a set of core principles that are concerned with important areas such as timber management, pesticide use, erosion control, and harvesting operations. To receive FSC approval, companies are required to be audited by accreditation firms.

Both Home Depot (August 1999) and Lowe s (August 2000) have now declared acceptance of the FSC certification program, and even Staples ” the office supply store ” has a formal environmental paper procurement policy which pledges to protect forest resources by purchasing postconsumer, recycled products. Similarly, Kinko s has a strong dual environmental procurement policy that incorporates sustainable forest management practices and uses recycling and alternative fibers technologies. The company was one of the first retail firms in America to prohibit the use of paper from old-growth forests in 1997, and in 2003 adopted a strict set of vendor requirements in which suppliers must guarantee and document that none of their supply sources or operations result in the logging of old growth or endangered forests. [17]


There are many other industries where NGO and investor pressure is just beginning to take effect. Coffee growers, for example, have come under fire recently for the poor labor conditions of pickers. Even Starbucks ” once thought to be immune to criticism because of its strong social and environmental core values ” has come under scrutiny for buying coffee that involved child labor, poor working conditions, and low wages . In fact, the food and agricultural industries ” from strawberries to bananas, confectionary to tea and coffee ” are likely to be the next major area of activist focus. There are many reasons for this.

In the past 30 years there has been a tenfold increase in the global export of agricultural products, says Nick Blowfield, from the Natural Resources Institute. This increased reliance on food grown in other countries , is giving the supply chain ” from producer to retailer ” and regulators a host of new challenges . . . The initial concern was for the environmental and food safety impacts of farms and plantations where unsanitary practices and uncontrolled chemical usage were perceived as common-place. More recently, concerns about human rights, worker welfare, and biodiversity loss have become determinants of the success of a product, a company and sometimes even a country in the global marketplace. [18]

Utilizing the Internet, activists have moved quickly to highlight the exploitation of fruit and agricultural workers, among the most poorly paid and downtrodden workers in the world. Web sites such as VINET have become a communication hub for activists to trade stories and bring to light issues.

There are many other industries with similar concerns: conflict diamonds, silk, brass, cosmetics, waste management, building, and construction. The list goes on and on, and promises to grow as activists continue to target industry retail leaders .

[14] Larry Rohter, Brazil s Prized Exports Rely on Slaves and Scorched Land, The New York Times, March 25, 2002; and 2003 State of the World Report, Worldwatch Institute.

[15] China s Bio-diversity, Introduction at www.chinabiodiversity.com/shengwudyx2/vegetation-en/1p.htm.

[16] Sarah Roberts, op. cit.

[17] Kinko s Adopts New Forest-Based Products Purchasing Policy, Greenbiz.com, March 24, 2003 at www.greenbiz.com/news/news_third.cfm?NewsID _ 24236 & CFID _ 7169687&CFTOKEN _ 16723084.

[18] Mick Blowfield, Fundamentals of Ethical Trading/Sourcing in Poorer Countries, The World Bank Group at http://wbln0018.worldbank.org/ESSD/essdext.nsf/26ByDocName/FundamentalsofEthicalTradingSourcinginPoorerCountries.

The Supply Chain Imperative. How to Ensure Ethical Behavior in Your Global Suppliers
Supply Chain Imperative, The: How to Ensure Ethical Behavior in Your Global Suppliers
ISBN: 0814407838
EAN: 2147483647
Year: 2004
Pages: 123
Authors: Dale Neef
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