Smartwood's Certification of the Forest Industry Organisation in Thailand: Why FSC Should Revoke the Certificate
Thailand, November 2002
A report written by Chris Lang(*) for the World Rainforest Movement.

index

5. COMPLIANCE WITH FSC PRINCIPLES AND CRITERIA

Whether FIO's management complies with FSC Principles and Criteria should have been the key question for SmartWood to answer in their assessment of FIO's two plantations. Before the certificate was awarded, FIO's Chittiwat Silapat did not seem to think that achieving FSC certification would be difficult. He said, "We've left some native trees in the area, we've left some buffer zones along streams and along the border of the plantations. It's almost the same as FSC principles and criteria" (Chittiwat 2000).

Before granting the certificate, SmartWood issued one pre-condition regarding wages. The pre-condition was later withdrawn after SmartWood was satisfied that FIO had met the requirements. In their Public Summary, SmartWood's assessors listed 26 conditions that FIO had to meet in order to retain the certificate. The conditions illustrate clearly that, at the time SmartWood issued the certificate, FIO's management was in breach of several FSC principles and criteria.

As a record of the assessment of FIO, SmartWood has produced a Public Summary of the certification. FSC has certain guidelines about the information that should be available in such summary documents. For example, Motion 26a, which was passed at the 1999 FSC General Assembly, states that "Public Summary Documents shall contain sufficient information to make clear the correlation between the specific results of the certification assessment and FSC Principles and Criteria."

SmartWood's public summary fails to do this. There is extremely limited information in the Public Summary about how SmartWood considered FIO's management against FSC's Principles. For example, SmartWood's 26 conditions are listed in the public summary, but with no explanation of how the conditions relate to FSC's Principles.

The introduction to FSC's Principles and Criteria states,

FSC and FSC-accredited certification organizations will not insist on perfection in satisfying the P&C. However, major failures in any individual Principles will normally disqualify a candidate from certification, or will lead to decertification. These decisions will be taken by individual certifiers, and guided by the extent to which each Criterion is satisfied, and by the importance and consequences of failures. Some flexibility will be allowed to cope with local circumstances (FSC 2000: 1).

However, what constitutes a "major failure" is not defined in the principles. A great deal is left up to the individual certifier. Perhaps as an attempt to clarify this, FSC wrote in January 1998, "As from 1st January 1999 ALL certification body scoring and decision support systems must demonstrate explicitly, and at the level of each FSC Principle individually, that the Principle has been met by the forest management enterprise in order for a certificate to be awarded" (FSC 1998).

SmartWood's Public Summary (produced in June 2001) includes no scoring at all. The Public Summary does not demonstrate at the level of each FSC Principle how SmartWood's consultants believe that the Principle has been met.

The draft version of the "SmartWood Certification Assessment Report", dated 24 January 2001, however, includes the following tables:

SmartWoods scoring principles

Score for TPP and KKY

(Source: SCC Natura 2001: 31-32)

According to this table, SmartWood judged FIO's management at Thong Pha Phum to be slightly less than "Satisfactory" and at Khao Kra Yang to be just "Satisfactory".

SmartWood's Generic Guidelines for Assessing Forest Management state: "In order to pass certification, certified operations must have an average score above 3 for each subject area . . ." (SmartWood 2000a: 3). If SmartWood's assessors had applied their own guidelines strictly, Thong Pha Phum would have failed against the following principles: 6 (Environment); 7 (Management Plan); and 10 (Plantations); as well as 4 (Community and Workers) for which it received a pre-condition.

However, instead of rejecting FIO's application for FSC certification, SmartWood issued the certificate with 26 conditions.

In August 2001, Richard Donovan of Rainforest Alliance and Jeffrey Hayward of SmartWood wrote,

Our main function is to determine if their new efforts result in a style of management that is more balanced between social, economic, and environmental values and that meets the principles and criteria of the FSC. This means that we require each management unit to have put in place practices (not just promises) that meet the FSC standards. They have to meet our conditions or the certificates will be revoked (Donovan and Hayward 2001 emphasis added).

Fifteen of SmartWood's conditions had to be met within one year of the certificate being awarded. In May 2002, SmartWood's team was back to check that FIO had in fact met the conditions. SmartWood found that FIO had failed to meet five of the conditions and had only "partially met" seven more conditions. However, instead of revoking the certificate as promised, SmartWood issued a series of "corrective action requests" with new deadlines. These requests are in many cases weaker than the conditions originally imposed and serve simply to let FIO off the hook.

The following compares the reality of FIO's plantations with FSC's Principles and Criteria.

PRINCIPLE 1: COMPLIANCE WITH LAWS AND FSC PRINCIPLES

Forest management shall respect all applicable laws of the country in which they occur, and international treaties and agreements to which the country is a signatory, and comply with all FSC Principles and Criteria.

Perhaps the most obvious law that SmartWood should have considered in the case of FIO is the ban on logging concessions, passed by the Thai government in January 1989. Yet SmartWood's Public Summary includes no mention of the logging ban.

FER's Virawat Dheeraprasert worked for almost 25 years at the Royal Forestry Department. He argues that the plantations were established as part of logging concessions, and are therefore covered under Thailand's logging ban. He said,

The land is a former logging concession area. The area was replanted by the FIO under the guidelines of the logging concessions and is therefore not actually 'plantation' land. The land belongs to the citizens of Thailand and is managed by the Royal Forestry Department for the Thai State. In this case the RFD gave the land areas to FIO not for cutting and selling but under the terms of logging concession guidelines for replanting and ecological recovery (Virawat 2002).

According to SmartWood's Public Summary, FIO has registered both Thong Pha Phum and Khao Kra Yang under the Forest Plantations Act (1992) but Virawat challenges the legality of this registration. He said,

The land cannot be considered as a plantation. It doesn't come under the 1992 plantations act, because this act is aimed at getting private companies to invest in plantations. FIO is state enterprise. FIO could register the land as a plantation in order to log, but under the plantations act the area is planted so the company can cut and sell logs. In this case the RFD gave the land areas to FIO not for cutting and selling but under the terms of logging concessions guidelines for replanting and ecological recovery.

In order to register as a plantation it has to be done by the owner of the plantation. Which means that the FIO can't register the plantation as it is not the owner of the plantation," said Virawat (Virawat 2002a).

When asked why there was no mention of the logging ban in SmartWood's public summary, Pearmsak Makarabhirom, one of SmartWood's assessors replied,

I feel like the logging ban just did not translate into the Thai society appropriately. Who made the decisions, the official translation of the law? It's the government, they can say you can log, you cannot log. You are doing so legally, you are doing so illegally. I think that it's not very clear. In the case of FIO, I feel it is very complicated. The purpose of some plantations planted by FIO is very clear: it's for commercial purpose. But in many plantation areas now under the FIO the trees were planted by logging concessionaires a long time ago. The purpose was not commercial, but was to form restoration forest. In fact, nobody knows. I think that it's too complicated. How can we know which areas were planted for commercial purposes and which area planted for restoration? And if they planted for restoration, why did they plant a teak plantation like this? (Pearmsak 2002).

However, for Richard Donovan of Rainforest Alliance and Jeffrey Hayward of SmartWood, there is no confusion and no complications. They explained SmartWood's position on the logging ban as follows:

As to the issue of the commercial log ban, it is important to be very clear on the scope of the ban. Although TERRA espouses the view that there should be no commercial logging in Thailand, the logging ban does not apply to these teak plantations. . . . The logging ban appears to have been extremely important for protecting Thai natural resources and fostering ecological recovery. We respect the logging ban on natural forests and certified operations must do so as well. However, the logging ban does not extend to the teak (or other species) plantations managed by FIO and other organizations/individuals (Donovan and Hayward 2001).

In other words, SmartWood's assessors have decided that the logging ban simply does not apply to FIO's plantations. In doing so, they are ignoring an ongoing discussion in Thailand about the logging ban and the role of the FIO. Further, SmartWood's position on the logging ban is contrary to SmartWood's Generic Guidelines for Assessing Forest Management, which state: "The purpose of the certification process is not to assess actual legal compliance; that is the mandated task of government institutions" (SmartWood 2000a: 5).

SmartWood's Guidelines continue,

But SmartWood must check with government agencies and other stakeholders to verify that an operation is dealing with legal requirements in a responsible fashion, and in some cases the field assessment can be a valuable way for helping operations improve the quality of their compliance (SmartWood 2000a: 5).

As mentioned above, SmartWood's Public Summary contains no discussion about the logging ban in Thailand. It contains no information about any discussions that SmartWood's consultants had with government agencies or "other stakeholders" about whether FIO's logging operations are legal. As mentioned above, the SmartWood team's consultation with Thai NGOs was so weak that SmartWood's assessors must be in breach of SmartWood's own guidelines.

An important point about the logging ban in Thailand is that it did not appear as if from nowhere. It was, at least in part, the result of a campaign by villagers and NGOs opposing logging and its impacts on forests and people.

Witoon Permpongsacharoen, editor of the magazine Watershed, and a senior NGO figure in Thailand described the background to the logging ban as follows:

In my view there are two things that happened in parallel. One was because of the campaign on Nam Choan dam which drew the attention of people to national parks and wildlife sanctuaries, especially Tung Yai and Huay Kha Kheng. At that time at Huay Kha Kheng, there was a concession area for the Thai Plywood Company, which they had not yet started logging. This became an issue after the Nam Choan dam campaign, how can we get the Huay Kha Kheng concession cancelled? So people started looking at the relationship between logging concessions and forest areas that we found that important to protect.

Another thing that happened, in the north of Thailand, local people in Chiang Mai started a movement to fight against the logging companies. They blockaded roads in some areas, monks ordained trees. We can say that this was the beginning of the community forest movement in the north, but it started from opposition to logging companies. It became news at a national level. The protests spread to other areas such as Loei province and Rayong province.

I remember that we organised a conference at Kasetsart University. The meeting involved both groups: a network of people working on protected areas; and local communities that were fighting against logging companies. The idea was to discuss issues surrounding logging in Thailand. The night before the seminar the devastating floods happened in the south. So the seminar focussed on the impact of logging concessions. After the seminar, the various networks demanded that the government impose a logging ban.

Before the logging ban, everyone thought that it was impossible to stop the logging. Every politician was somehow involved in the logging business. But after the logging ban, the issue changed to 'the logging ban is wrong, how can you manage or maintain the forest if you take all the forest area back from the companies?' The argument is that logging is not a bad thing, logging is a way to manage the forest. This is scientific forestry. All the foresters came out very strongly arguing 'how can we manage the forests without logging?' (Witoon 2002)

1.1 Forest management shall respect all national and local laws and administrative requirements.

SmartWood's condition 2 states: "By the end of year 1, FIO must review the Local Administration Organization (TAO) Act (1994) and ensure that the plantations respect all of the act's requirements" (SmartWood 2001: 30). This implies that at the time the certificate was awarded, SmartWood's assessors were unable to asses whether FIO's plantations conformed to FSC's criterion 1.1. SmartWood's first year audit claims that this condition has been closed, although no further information is given.

When asked about this condition, Surapong Supkai, president of the council of the TAO in Huay Kayeng subdistrict, near Thong Pha Phum, said, "FIO come, they talk, they are invited to the meetings, they come and talk about various things, but they never talk about that, they never talk of that" (Surapong 2002).

1.2 All applicable and legally prescribed fees, royalties, taxes and other charges shall be paid.

In June 2001, SmartWood issued a condition regarding payments to local authorities. Condition 3 states: "By the end of year 1, FIO will make available at the plantations clear documentation that payments were made for taxes and required fees made in the previous year, which specify date, quantity paid, and to whom" (SmartWood 2001: 30). In the first year audit, SmartWood's assessors claim that this condition has been closed, but provide no further details.

In August 2002, Surapong Supkai, of the TAO in Huay Kayeng subdistrict near Thong Pha Phum, commented,

Two years ago, we sent a letter to the FIO about these taxes that have to be paid to the TAO from the revenue from the [logging], but FIO hasn't replied yet. The head office in Bangkok replied. They said there are some problems with the process and they still can't pay the taxes. After that they have not done anything.

Sometimes the head of the FIO comes to the TAO meetings but he never talks about taxes, he just talks of other things. The assumption is that the head office has already replied that there are some problems but they don't talk about it (Surapong 2002).

When asked about condition 3 and whether FIO had met the condition, Surapong simply said, "Never. For the past two years, never" (Surapong 2002).

Soonan Nawan, a former head man of Ban Wang Nam Khieo, a village near Thong Pha Phum said, "In reality the FIO has not paid any taxes to the local area, and the income they got from selling they've not given to develop the village" (Soonan Nawan 2002).

In Pitsanulok, when Sakorn Songma, of the Centre for Building Local Organisations for Ecological Recovery, was asked about the issue of taxes to be paid to local TAO, he replied, "I went and looked at the income records of the TAO and the TAO did not get any income from the FIO. They only have funds from the central government and from local taxes" (Sakorn 2002).

1.6 Forest managers shall demonstrate a long-term commitment to adhere to the FSC Principles and Criteria.

SmartWood's condition 4 states: "By the end of year 1, FIO's Administrative Board should endorse its commitment to the FSC P&C and should communicate this commitment to a broad range of stakeholders, which may include staff, workers, local district administration, and neighboring communities" (SmartWood 2001: 4-5).

In the first year audit, SmartWood claimed that this condition had been "partially met", without giving any further information. SmartWood's team replaced condition 4 with a corrective action request. CAR 1-2002 states: "Within 6 months, FIO must put into action communication of what its commitment to FSC P&C means in terms of its policies, plans, and activities, especially to the broad range of stakeholders" (SmartWood 2002: 37). It is difficult to see how SmartWood's assessors could consider the condition to be partially met, given the work that FIO still has to do to meet the corrective action request, which is more or less identical to condition 4.

PRINCIPLE 2: TENURE AND USE RIGHTS AND RESPONSIBILITIES

Long-term tenure and use rights to the land and forest resources shall be clearly defined, documented and legally established.

The whole issue of tenure, access and rights to management in Thailand is a highly charged political arena. For many years, local villagers and NGOs have campaigned on these issues, demanding land rights for villagers and Thailand's hill-tribes or indigenous peoples.

In both Thong Pha Phum and Khao Kra Yang people were using the land before FIO established its plantations. SmartWood's Public Summary acknowledged that "local farmers used the area for shifting cultivation" but commented "At the time when these plantations were established, 20 to 30 years ago, the shifting cultivators did not have title to the land and therefore the government of Thailand or FIO offered no formal compensation payment" (SmartWood 2001: 11).

2.1 Clear evidence of long-term forest use rights to the land (e.g. land title, customary rights, or lease agreements) shall be demonstrated.

SmartWood's condition 5 states: "By the end of the year 2, FIO plantations shall produce a complete list and an "Ownership Map" that includes the location, area, and period of validity, etc. for each parcel that FIO has land use rights" (SmartWood 2001: 30). This implies that at the time of the certification FIO was not able to demonstrate to SmartWood clear evidence of use rights to the land.

Condition 6, which related only to Khao Kra Yang, states: "During the period of certification, KKY will take action to legalize KKY's land area related to forest plantation law - in particular they must confirm their land use rights" (SmartWood 2001: 33). Putting aside the question of whether FIO can, as a state enterprise, register its plantations under the Forest Plantation Act (see above, under Principle 1), this condition indicates that FIO was unable to confirm land use rights at the time that the certificate was awarded.

A year later, SmartWood announced that condition 6 had been partially met, although the public summary provides no further information. SmartWood's first year audit replaces condition 6 with a correction action request. CAR 2-2002 states: "By the time of the next annual audit, KKY shall proceed with steps necessary to register the lands of the office, arboretum, and seed orchard (for itself) and of the forest village area (for the forest villagers)" (SmartWood 2002: 37). This indicates that there are still serious doubts as to whether FIO's activities at Khao Kra Yang conform to FSC's criterion 2.1.

2.2 Local communities with legal or customary tenure or use rights shall maintain control, to the extent necessary to protect their rights or resources, over forest operations unless they delegate control with free and informed consent to other agencies.

The FIO plantations at Thong Pha Phum were established by the Royal Forestry Department. To do so it simply took villagers' fallow land, fields and forest and converted it to teak plantation. The example of Ban Huay Paak Kok, a village near Thong Pha Phum, indicates how the Royal Forestry Department took over villager's land.

Ban Huay Paak Kok was settled by Karen, Mon and Burmese people fleeing from fighting during the Second World War. Niprapar Riancharoen, a village elder from Ban Huay Paak Kok, described the forest before logging concessions were granted in the area. "It was very fertile forest area at that time. It was so thick that it was always wet. If you washed your clothes it would take a week to dry," he said (Niprapar 2002).

According to Niprapar, after the concessions were logged, the Royal Forestry Department gave concessions to replant and started to prepare plots for replanting in 1975. The following year, the RFD started planting. Niprapar said,

they were also encroaching on village people's land and village people had to start moving their farmland away. Obviously the villagers were using it because there were a lot of vegetables and other things being grown there. So why were they coming and taking it? (Niprapar 2002).

Villagers were told that because they did not have land certificates they could not claim rights to the land.

After about five years, the RFD stopped planting, and the FIO took over. None of the villagers from Ban Huay Paak Kok worked for the FIO, partly because the work was very seasonal. Niprapar said, "more than 3,000 households of Burmese came to work on the plantations" (Niprapar 2002).

As a result of losing their land to plantations, villagers were forced to look for new areas to cultivate, and took forest areas across the river from their village.

Niprapar said, "How can they call it sustainable, because it has been planted and now it is being cut and sold? How can it be called sustainable management? Their sustainable should be that the trees should grow and should be used by the villagers" (Niprapar 2002).

2.3 Appropriate mechanisms shall be employed to resolve disputes over tenure claims and use rights. The circumstances and status of any outstanding disputes will be explicitly considered in the certification evaluation. Disputes of substantial magnitude involving a significant number of interests will normally disqualify an operation from being certified.

SmartWood's Generic Guidelines for Assessing Forest Management state that resource conflicts should be "being addressed in a systematic and legal manner" (SmartWood 2000a: 7). There is no mechanism in place at either Thong Pha Phum or Khao Kra Yang to resolve disputes over tenure claims. SmartWood's Public Summary observes that villagers living in FIO's Forest Villages resent the fact that they have not received title to their lands. Elsewhere SmartWood's Public Summary comments, "The forest villagers of KKY continue to view that land tenure as the problem [sic]. But they do not know how to proceed with this. They may even be reluctant to talk to unit managers" (SmartWood 2001: 22). Clearly, resource conflicts are not being addressed in a systematic or legal manner as required by SmartWood's own guidelines.

SmartWood's condition 7 states: "By the end of year 1, FIO plantations should make plans to formalize existing informal land and resource use arrangements through written agreements or contracts. By the end of year 2, the plans should be implemented" (SmartWood 2001: 31).

In their first year audit, SmartWood announced that this condition had been "partially met" without giving any further details. SmartWood replaced condition 7 with CAR 3-2002, which states, "By the time of the next annual audit, NTFP collection and other informal resource uses are to be formalized by participatory methods among the users and FIO officers. FIO will implement plans and agreements that are in written form" (SmartWood 2002: 37).

In fact, according to Niprapar Riancharoen, a village elder at Ban Huay Paak Kok, near Thong Pha Phum, villagers are simply not allowed into the plantations. He said, "They don't let the villagers go into the [plantation] area and try to use it. My son got caught once for entering the area. They tried to put him in jail, but he got him out. They tried to make a case against him, for forest encroachment. He went to take a dead tree to make charcoal and they caught him" (Niprapar 2002).

PRINCIPLE 3: INDIGENOUS PEOPLES' RIGHTS

The legal and customary rights of indigenous peoples to own, use and manage their lands, territories, and resources shall be recognised and respected.

SmartWood's Generic Guidelines for Assessing Forest Management comment: "Fairness to indigenous peoples has been one of the founding crucibles of the FSC and the SmartWood program. However, in order to achieve such fairness, first there must be clarity as to which groups constitute 'indigenous'" (SmartWood 2000a: 7) SmartWood's guidelines then quote the FSC definition of indigenous peoples:

The existing descendants of the peoples who inhabited the present territory of a country wholly or partially at the time when persons of a different culture or ethnic origin arrived there from other parts of the world, overcame them and, by conquest, settlement, or other means reduced them to a non-dominant or colonial situation; who today live more in conformity with their particular social, economic and cultural customs and traditions than with the institutions of the country of which they now form a part, under State structure which incorporates mainly the national, social and cultural characteristics of other segments of the population which are predominant. (Working definition adopted by the UN Working Group on Indigenous Peoples) (FSC 2000: 8).

SmartWood's guidelines continue, "If there are any doubts as to whether groups qualify under this definition, please contact SmartWood" (SmartWood 2000a: 7).

In its Public Summary, SmartWood's assessment team states that in Thong Pha Phum,

Historically, the area was used for shifting agriculture by Karen and Mon ethnic groups, who migrated from near the Myanmar [sic] border about 100 years ago. At the time of establishment, in 1978, those people who lived along the river, outside the plantation area, and those new migrants (about 50 years ago) from northern Thailand, cultivated the area that is now the plantation (SmartWood 2001: 4).

Karen people have lived for centuries in what is now Thailand, predating the arrival of Tai-speaking groups, including the Thai who now form the dominant ethnic group in Thailand (Prasert and Leake 2002: 272). Karen and Mon peoples have their own languages, customs and culture independent of the language, customs and culture of the Thai.

Given FSC's definition of "indigenous people" it would appear that there is a strong case for considering the Karen and Mon peoples living in Thong Pha Phum as indigenous. However, a more important point is that it is up to the Karen and Mon people (or people belonging to any other ethnic groups) themselves, and not SmartWood's consultants, to define whether or not they are indigenous.

The principle of self-identification is recognised in Article 8 of the Draft Declaration of the Rights of Indigenous Peoples, which is currently under discussion at the United Nations Human Rights Commission (Colchester 1999: 6).

The International Labour Organisation's Convention Indigenous and Tribal Peoples 1989 (ILO 169) makes clear the importance of the principle of self-identification: "Self-identification as indigenous or tribal shall be regarded as a fundamental criterion for determining the groups to which the provisions of this Convention apply" (Article 1(2)).

Tim Synnott, then-head of the FSC Policy and Standards Unit, said in November 2001, "The aim is that FSC should adopt in ALL countries the implications of ALL the relevant [ILO] Conventions, even when some of them are still legally unratified in some countries" (Synnott 2001).

Yet, SmartWood's assessors report in the Public Summary that "TPP and KKY have not had indigenous people, as per FSC definition. In TPP, most villagers migrated from the lower North of Thailand, e.g. Mae Sot of Tak province, Phrae province, and the Northeast" (SmartWood 2001 12). There is no information in the public summary about how SmartWood's assessors came to this conclusion or whether they even spoke to any Karen or Mon people living near the plantations.

PRINCIPLE 4: COMMUNITY RELATIONS AND WORKER'S RIGHTS

Forest management operations shall maintain or enhance the long-term social and economic well being of forest workers and local communities.

SmartWood gave FIO a pre-condition against this principle, demanding that FIO increases workers' salaries at both plantation sites. Obviously, given the low wages at FIO's plantations, villagers working for FIO welcome any increase. However, as discussed below, the situation is not as straightforward as reported in SmartWood's Public Summary. There remain serious questions about FIO's employment practices and relations with local communities who are not employed in FIO's plantations.

SmartWood's pre-condition stated that "Prior to certification, FIO plantations will prepare verifiable documentation of workers' wages and other payments that will demonstrate and ensure that the daily wage, piecework production bonus, and/or any other benefits, are increased to meet or exceed the regional norm" (SmartWood 2001: 26). Before issuing the certificate, SmartWood was satisfied that FIO had met this precondition by raising the daily wage to approximately 130 baht (about US$3.25), depending on the worker's job.

However, in August 2002, more than one year after the wages should have been increased, workers at Thong Pha Phum still may have seen no pay rise. When asked how much daily wages were, Soonan Nawan, a former head of Ban Wang Nam Khieo, answered,

90 baht per day. I want people to understand the reality that local people have no benefit from this plantation. FIO keeps taking migrant labour from outside. Basically they have a system where they contact a middle man. The Burmese get 90 baht, and it is written down as 140 baht or 130 baht and the rest of the money is given to the middle man. So the local people don't get anything more than that" (Soonan 2002).

He also explained that he did not trust FIO's documents:

Those people whose names are there probably don't even work for FIO. They just sign it. They get 10 baht for signing. FIO tells the middle men to hire a group of Burmese people and they give them 90 baht. The Burmese work for 90 baht, the middle man gets 40 baht just for hiring. The villagers who sign their names to validate the whole thing get 10 baht each. FIO is not allowed to hire illegal Burmese immigrants (Soonan 2002).

SmartWood's Public Summary expressed a similar concern about FIO's documenting of wages at Khao Kra Yang:

The KKY management will still need to improve the system for documenting the pay to workers, so that this can be made more transparent to SmartWood auditors in the future. For example, the Evidence of Payment Document for Contractors (Piecemeal Work), which is the document signed by the workers upon receipt of their payment, did not include the amount that each worker was paid. Apparently this amount is filled in later, after payment. To ensure fairness, and to be more transparent, the amount of Baht must be put down on the document prior to the payment of the wage to the worker (SmartWood 2001: 28).

However, SmartWood's concern does not translate into a condition, no deadline is given by which time FIO must comply and SmartWood gives no indication of how they propose to check whether or not FIO has complied with this request.

SmartWood's team added condition 26 after their audit in April 2001 (which was carried out to assess whether FIO had met the pre-condition requirements), and also relates to workers' wages. Condition 26 states: "During the period of certification, FIO plantations will maintain daily wage rates, piecemeal rates, and/or other benefits for workers that consistently meet or exceed the regional standard rate" (SmartWood 2001: 32). However, this condition is not referred to in SmartWood's first year audit.

Richard Donovan of Rainforest Alliance and Jeffrey Hayward of SmartWood, claim that the pre-conditions and conditions imposed by SmartWood,

produced some dramatic changes. . . . The most important changes were in terms of the relationship between forest villagers and the plantations, and of most concern to us, the distribution of benefits to the workers. In fact, FIO was not initially able to meet our certification standards. SmartWood issued a precondition requiring FIO to raise the level of worker compensation commensurate to the minimum wage in the province. In the villages where people work for FIO this represented income gains of 20 to 40% for most workers. Without FSC certification we do not believe this would have happened (Donovan and Hayward 2001).

However, Virawat Dheeraprasert of FER, responded,

SmartWood focuses on wages more than on other issues such as ecosystem, watershed area, the Queen Sirikit crab and so on. SmartWood thinks that the point about wages is important for local people, but in reality, the point is that local people want to go beyond this question of wages, for example now local people area asking is the plantation destroying their livelihoods or their culture or their community and what are the benefits to local people in this area, other than wages for example. And also what about other questions like the local participation in decision making? The point being that when SmartWood talks about local people, they are talking only of a wage earning kind of population. They are not supposed to have any other interest (Virawat 2002a).

Virawat also pointed out that there are mechanisms within Thailand for improving wages, and that the situation is not necessarily as straightforward as SmartWood's assessment team makes out. He said,

Whatever low wages there are in the area is something that can be changed within Thailand by Thai laws, because there is a minimum wage act. So if local people are suffering because of lower wages, they can demand and change, there's no need that FSC or SmartWood has to come and certify areas so that they can get higher wages. This is the whole point of the local situation.

Local people also are saying that they want to manage the forest; it's not just a question of wanting a factor of wages. They also say that logging a forest is not what they think of as sustainable forest management. They want to do other things like ecotourism or allow research or get NTFPs which they can sell. And these things they feel can provide them a better standard of living. This is how local people want to use these areas. However, FSC says that wages are important. If FSC claims that wages are important, it's not true because if it is logged, the area is logged, local people may get wages, but if it is left to grow as forest, local people feel they may get actually long term security rather than these areas logged.

The concept of local security is different. It is not just the factor of wages alone. This basically then requires understanding local culture, local context and the many factors involved in local people's happiness and local people's living as a community. This question of wages is a very northern aspect where the FSC feels that the community can live on wages alone, but local people in rural Thailand have various other factors even happiness and how to live in a community. And not just one question of how much money can we get. This basically is a reflection of how much unaware of local culture and tradition FSC is. It is unaware of rural conditions because FSC uses standards of urban living such as a good wage (Virawat 2002b).

4.1 The communities within, or adjacent to, the forest management area should be given opportunities for employment, training, and other services.

SmartWood's condition 9 states:

During the period of certification, FIO plantations should ensure that a significant portion of its work force originates from local villages. By the end of year 1, plantations must have an employment register that will document worker names, place of residence, nationality, identity card number, sex, age, and number of days worked (SmartWood 2001: 31).

Many of the people employed at FIO's Thong Pha Phum plantation immigrated recently to Thailand from Burma. Soonan Nawan, a former head man of the FIO forest village at Ban Wang Nam Khieo, said,

At first the village members of the forest village got some land and they were working, but later on things got worse. Nowadays, local people are not working there any more; it's mostly Burmese migrant labour, who work in the forest village (Soonan 2002).

SmartWood's assessment team observe in the Public Summary that

Significant numbers of 'outside' workers make up the current labor force - apparently due to low wage rates, which local people find inadequate." SmartWood's assessors added, "FIO should find the way to make good on their policy of giving priority in employment to local residents (SmartWood 2001: 26).

The "'outside' workers," that SmartWood referred to, are largely people who have recently come to Thailand from Burma and who may not be able to return because of the military regime in Burma. SmartWood gives no indication what these people should do if FIO were to sack them in order to employ local people.

Among the documents that SmartWood's assessment team reviewed during the first year audit was one entitled KKY "almost completed" Employment Register, totaling 234 workers. No Employment Register is mentioned for Thong Pha Phum. In the first year audit, SmartWood decided that condition 9 had been "partially met", without providing any further information.

SmartWood's first year audit replaced condition 9 with two corrective action requests.

CAR 4-2002: Within 6 months, and prior to inclusion of any new plantation under the FIO certificate, minimum pay must be raised to the regional minimum wage and the plantation authority undertaking the responsibility of this raise must be supported in doing so by the FIO HQ (SmartWood 2002: 37).

CAR 5-2002: Within 3 months, and prior to inclusion of any new plantation under the FIO certificate, the register of the workers must be improved to clearly indicate the tasks and number of days worked by each worker, for the work/task accomplishment per month, along with the exact amount of payment - in order to make the information applicable for audits (SmartWood 2002: 37).

4.2 Forest management should meet or exceed all applicable laws and/or regulations covering health and safety of employees and their families.

SmartWood's condition 10 states: "By the end of year 1, FIO plantations will provide appropriate safety equipment to those requiring it." (SmartWood 2001: 31). This indicates that safety equipment may not have been available (or adequate) at the time of the certification. SmartWood's first year audit states that this condition was not met. However, rather than revoking the certificate, SmartWood simply replaced condition 10 with two corrective action requests.

CAR 6-2002: "By the time of the next annual audit, FIO shall implement systematic rules and policies within all certified plantations, to offer adequate and similar worker compensation to workers injured on the job and to fairly handle worker health and safety isses [sic], particularly workplace accidents and incidental death (SmartWood 2002: 37).

CAR 7-2002: "By the time of the next annual audit, FIO shall implement systematic training of workers in use of appropriate safety equipment and practices. Training is particularly important for workers in high risk or high skill operations, such as chainsaw operators or log yarders. Training programs shall be taught by experienced individuals, and utilize appropriate manuals and experiential coursework. FIO shall ensure that all workers are equipped with adequate safety equipment, and using it, for their jobs (SmartWood 2002: 38).

4.5 Appropriate mechanisms shall be employed for resolving grievances and for providing fair compensation in the case of loss or damage affecting the legal or customary rights, property, resources, or livelihoods of local peoples. Measures shall be taken to avoid such loss or damage.

When FIO established their plantations they simply took the land from local communities. These communities have never received any compensation from FIO.

SmartWood issued a condition relating to relations between FIO and local communities. Condition 11 stated: "By the end of year 1, FIO plantations will appoint one staff member with a mandate and responsibility for implementation and documentation of a formal public consultation process. (This staff member may be considered the 'Community Relations Officer')" (SmartWood 2001: 31). This indicates clearly that at the time of certification there was no mechanism for resolving grievances with FIO.

One year later, there was still no community relations officer. SmartWood confirmed in their first year audit that FIO had failed to meet this condition. Again, rather than withdrawing the certificate, SmartWood issued a corrective action request to replace condition 11.

CAR 8-2002: Within 6 months, FIO shall demonstrate that in all certified plantations there is at least one Community Relations Officer with proper training in place and functionioning [sic] with the full support of FIO management (SmartWood 2002: 38).

When asked whether FIO consults with local people before logging, Chittiwat Silapat of the FIO said, "Frankly speaking I don't really know. But what I have been informed, in those plantations they have started a dialogue in those villages, not really a committee, but some interested groups. They have some dialogue and they have some meetings from time to time to talk with them. And they have done a really good job. The villagers are very praising of them. Maybe because they generate a lot of income to the area" (Chittiwat 2002).

Virawat commented,

This is not a participation process. It is only public relations for the FIO. Participation must begin with decisions on sustainable forest management and whether local people agree or not with the plans. Local people must be in a position to evaluate the FIO's work (Virawat 2002a).

Condition 11 also required FIO to:

1. create an updated list of stakeholders, such as contract workers, FIO workers, community members, adjoining landowners, etc.;
2. create an updated list of neighboring villages, their locations and populations;
3. conduct regular meetings with stakeholders;
4. document outcomes of consultation meetings,
5. use these outcomes to assist in evaluating the social impacts of FIO activities (SmartWood 2001: 31).

This condition was to be met "during the period of certification", but as none of these points are included in CAR 8-2002, it appears that since the first year audit, they are no longer required. Comments from villagers indicate that FIO has made little or no attempt to comply with this condition.

In August 2001, Noel Rajesh of TERRA visited Ban Prajam Mai, near Thong Pha Phum. The village is not one of FIO's forest villages and FIO employs no one in the village. FIO has provided no benefits to the village in the past. The village head man and a village representative of the Tambon Administration Organisation (TAO) told Rajesh that the area was formerly fertile forest before FIO established its plantations. FIO did not consult with either villagers or local TAO members before starting to log its plantations.

Rajesh also visited Ban Paak Kok, a Karen village which was established more than 60 years ago. Again villagers told him that before the FIO started its plantations, the area contained fertile wet evergreen forest. Then the government awarded logging concessions in the area which led to the clearfelling of almost one-third of the forest area. Once the area was logged, FIO established its plantations. Villagers living in and using the surrounding forest area were pushed out and the FIO did not allow villagers to use the forest area. Some of the villagers in Ban Paak Kok worked as hired labour in the plantations, but other than hiring the villagers as labour FIO has never provided the village with any infrastructure such as water or electricity.

Villagers in both villages visited were concerned that if the area is cleared of trees there will be impacts such as the drying of water sources (Rajesh 2002c).

Niprapar Riancharoen, a village elder at Ban Huay Paak Kok, near Thong Pha Phum, remembers that when the plantations were first established, the water table dropped and streams in the area dried up. "We are afraid that if they log, clearcut the area we'll face the same problem. There were actually fights about water, because there was water scarcity at that time" (Niprapar 2002). However, no one from FIO has been to the village to discuss their plans for the plantations with the villagers. Niprapar had never heard of SmartWood, and he had only heard of FSC from Virawat Dheeraprasert of FER.

SmartWood's condition 12 states: "By the end of year 2, FIO plantations must develop a policy and mechanism for formal resolution of grievances, including measures to refer unresolved issues to a higher forum to adjudicate" (SmartWood 2001: 31). In other words, at the time of certification there was no appropriate mechanism for resolving grievances, which is in breach of criterion 4.5. SmartWood's first year audit makes no mention of condition 12 and does not discuss whether FIO has taken any steps towards developing "a policy mechanism for formal resolution of grievances".

PRINCIPLE 5: BENEFITS FROM THE FOREST

Forest management operations shall encourage the efficient use of the forest's multiple products and services to ensure economic viability and a wide range of environmental and social benefits.

In the context of Principle 5, SmartWood defines its mandate as "to evaluate economic viability from the perspective of ensuring, as much as possible, that sound long-term investments are being made by the operation in terms of forest management, conservation and local communities" (SmartWood 2000a: 9).

FIO's forest management in the two plantations that have been certified is focussed mainly on producing teak with rubber production and eco-tourism as sidelines. Local people are not allowed access to the plantations. However, the organisation is heavily in debt and loses money every year. Villagers living near the plantations, but not employed by FIO, receive no environmental or social benefits from the plantation.

SCC Natura's Tomas Jonsson wrote in the FIO project Final Report that "'economic forest management' does not exist within FIO since the company runs at a considerable loss each year. . . . Undoubtedly FIO's main concern is still the lack of profitability" (SCC Natura 2001: 9).

Jan Attebring, another consultant for SCC Natura wrote in a 2000 report about certification and FIO, "TPP is maybe too small to be sufficient on its own as a sustainable commercial unit, the possibility to share resources with nearby plantations should be investigated" (Attebring 2000: 3).

However, SmartWood's assessment team seems to disagree with SCC Natura. They wrote in the Public Summary:

From 2001 onward, eco-tourism revenue is expected to increase due to completion of new tourist facilities, currently under construction. Latex production will increase from 2005 onward, as new rubber plantations established in 1998/1999 come into production. These increasing revenues and profits, along with continued revenue from wood production, will safeguard TPP's economic viability over the next 10 years (SmartWood 2001: 14).

5.2 Forest management and marketing operations should encourage the optimal use and local processing of the forest's diversity of products.

SmartWood's Generic Guidelines on Assessing Forest Management state that to meet the criteria, the following should be in place:

FMO [forest management unit] encourages utilization of frequently occurring, lesser known, or less-commonly utilized plant species for commercial and subsistence uses. Non-timber forest products (NTFPs) are considered during forest use and processing. Local processing is emphasised where possible (SmartWood 2000a: 9).

Dealing with each point in turn:

• The two plantations are predominantly teak plantations. FIO does not use lesser known or less-commonly utilised species in either plantation, except in buffer zones or conservation zones, which are not logged.

• SmartWood's Public Summary reported that "NTFPs are collected, consumed and sold by local people with sales revenue going directly to them, not to FIO" (SmartWood 2001: 13). However, Niprapar Riancharoen, a village elder at Ban Huay Paak Kok, near Thong Pha Phum, stated that villagers are simply not allowed into the plantation areas (see comments under Criteria 2.3, above).

• Most of the timber cut in FIO's Khao Kra Yang plantation is not processed locally. Instead, as reported in SmartWood's Public Summary, 70 per cent of it is sold to sawmills in Tak province, 300 kilometres away (SmartWood 2001: 14).

5.5 Forest management operations shall recognize, maintain, and, where appropriate, enhance the value of forest services and resources such as watersheds and fisheries.

SmartWood's condition 1 states: "By the end of year 1, FIO must verify the presence and location of any Watershed Class 1 areas in the plantation area and ensure that no economic activities are carried out there" (SmartWood 2001: 30). Clearly, at the time of the assessment, FIO and SmartWood did not know whether Watershed class 1 areas occurred in the plantation.

Maria Berlekom, a consultant for SCC Natura's project with FIO, commented in January 2001,

TPP have obtained a map from RFD showing the classifications in the plantation areas. A small portion has been classified as Watershed Class 1- possibly 1B, which means critical areas with some economic activity. It should be noted that TPP was given the permit to establish plantations before the watershed survey in the area was undertaken. The areas further appear to be fairly flat, and the reason for the classification unclear (Berlekom 2001: 4).

She added that FIO will obtain a similar map for Khao Kra Yang. In the first year audit, SmartWood's assessors state that this condition has been "closed" although they provide no further information. It is not clear, from SmartWood's Public Summary, whether FIO will restrict its activities in Watershed Class 1 areas or not.

When asked about condition 1, Surapong Supkai, president of the council of the Tambon Administration Organisation, Huay Kayeng subdistrict, near Thong Pha Phum plantation, said, "They may have come and done it, but they have not informed us. We don't know whether they have done it or not. We have no idea whether they have done it" (Surapong 2002).

Although technically FIO may have met the terms of the condition, FIO staff have failed to consult with the either the TAO or local people living in the area of the plantation about this condition.

(Click here to read this comparation among principles 6 to 10.)

next page