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Tuesday, 21 May 2013
Decision due to reputational risks for FSC linked to stakeholder disputes in the Democratic Republic of Congo
BONN, Germany –The International Board of Directors of the Forest Stewardship Council (FSC) has decided, reluctantly but firmly, to disassociate from the Danzer Group of forest product companies, after in-depth research by an impartial Complaints Panel concluded that the former Danzer subsidiary SIFORCO had been involved in unacceptable activities, as specified in FSC’s Policy for Association, in the Democratic Republic of Congo (DRC) in 2011, while it was still part of the Danzer Group. “Disassociation”, the termination of all contractual relationships with a company, is the most severe sanction that FSC can impose.
“Based on the unanimous recommendation of the Complaints Panel, which spent several months analyzing the case, and whose work was also reviewed by a Board Complaints Resolution Committee, the Board of Directors decided that Danzer was in violation of FSC’s Policy for Association,” said Kim Carstensen, Director General of FSC.
“Our continued association with the Danzer Group clearly puts FSC’s credibility and reputation at risk,” he added.
The disassociation results from a formal complaint filed by Greenpeace, that SIFORCO was involved in the violation of human rights of forest communities. The alleged events occurred in 2011 in and around the community of Yalisika in the DRC. The Danzer Group and Greenpeace both agreed on the experts who comprised the Complaints Panel.
While the Danzer Group disagrees with the Complaints Panel’s conclusion on its responsibility for what happened at Yalisika, it has chosen to accept the disassociation, and has confirmed its commitment towards resolving the specific issues at Yalisika and to develop robust new conflict avoidance and conflict resolution procedures before applying for re-association with FSC. “We respect the right of FSC to impose disassociation under conditions that could represent severe reputational risk to its system,” noted Danzer Group CEO Hans-Joachim Danzer. “Though this imposes substantial financial consequences on our company, we believe in the principles for responsible forest management defined by FSC and will seek re-association as quickly as possible after our fulfillment of the conditions for re-association has been verified by an independent third-party monitor approved by FSC”, he added.
The disassociation may be temporary, but the FSC Board of Directors must approve a re-association. It can be reviewed when independent verification finds that Danzer has met the following conditions:
The FSC Board further decided that SIFORCO, now owned by the Groupe Blattner Elwyn, will not be granted a new Trademark Licensing Agreement, effectively blocking FSC certification, until the Danzer Group has performed fully on its obligations towards the Yalisika community and until independent monitoring verifies that SIFORCO is not involved in illegal logging activities, as some have reported.
The Danzer Group is one of the largest producers of decorative veneer worldwide and one of the top ten producers of hardwood products in North America. This decision also affects the largest FSC forest management certificate in the Congo Basin, managed by Danzer subsidiary Industrie Forestière de Ouesso (IFO).
A reaction from Greenpeace:
“Greenpeace is pleased FSC is showing that its Policy for Association has teeth and is not risking its reputation by being associated with the Danzer Group due to its involvement in human rights violations. We find this landmark decision critical for the credibility of FSC.” says Judy Rodrigues, senior forest campaigner with Greenpeace International.
“We also caution against any quick re-association with the Danzer Group until it has been independently verified as complying with the policy, as well as fulfilling its social obligations to the affected communities. This case clearly shows that FSC needs to urgently establish safeguards in high risk areas where there are high levels of corruption, and good governance, the rule of law, and organized civil society are lacking.”
For more information, including a public summary of the Complaints Panel report please visit: https://ic.fsc.org/siforco-drc.
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