The Outlook
May 2007

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W e l c o m e

This month's newsletter includes three relatively “meaty” topics: legality of wood sourcing, controlled wood, and a discussion of TIMOs and REITs.

We've raised some tough questions, and we don't have all the answers this time. The key is that we get you thinking!   This month's articles should do that.

- Jeff

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I n  T h i s  I s s u e:

Is the Wood in Your Product Line of Legal Origin? What is Your Responsibility to Make Sure That It Is?

FSC Controlled Wood Standard: What It Is and What It's For

TIMOs & REITs: What, Why, and How They Might Impact Sustainable Forestry

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D o v e t a i l   R e p o r t s

All reports are available online.

Is the Wood in Your Product Line of Legal Origin?

What is Your Responsibility to Make Sure That It Is?

Jim Bowyer

If you have in your product line wood that comes from anywhere in the tropics, the Russian Federation, or China, chances are good that a significant portion of that wood is of illegal origin.   The fact you may be buying illegal wood matters.   Illegality is directly linked to a number of problems, including corruption, financing of regional conflicts, forest loss and degradation, and the loss of billions in revenue to developing nations and to the domestic forest products industry.   In short, buying illegal wood is the antithesis of supporting sustainable forestry.

Given that serious problems are known to exist that are rooted in the international trade of illegally harvested timber, and that the portion of wood in international trade that is of illegal or suspicious origin is non-trivial, every forest sector company should seriously consider the origin of the wood coming into its manufacturing facilities or distribution centers.   Is the origin known?   Is the wood verifiably legal?   If the answers to these questions are not known, or if the answers indicate or suggest problems, it is time to act, if for no other reason than that it is the responsible thing to do.  

To download the report, click here.

FSC Controlled Wood Standard: What It Is and What It's For

Matthew Wenban-Smith

The Forest Stewardship Council's (FSC's) revised "FSC Controlled Wood" standard came into effect for FSC chain-of-custody certified primary wood product manufacturers on January 1, 2007 and will become effective for secondary manufacturers January 1, 2008.

For FSC and its members the standard's primary purpose is to ensure that all of the non-FSC-certified wood in 'mixed' FSC products comes from acceptable sources, as defined by the FSC membership.   But the standard potentially has other uses - as a tool to exclude illegally harvested timber from company supply chains; as a 'first step' for modular approaches to ertification; and as a tool to manage reputational risk in the forest sector.   The standard also has potential negative impacts, including additional costs for companies labeling 'FSC-mixed' products and, potentially, for forest product companies operating in or sourcing from 'controversial' forest regions.

This article explains the origins of the “Controlled Wood” standard and its requirements.

To download the report, click here.

TIMOs & REITs

What, Why, and How They Might Impact Sustainable Forestry
Kathryn Fernholz

Forestland ownership patterns can have a significant impact on the long-term continuance of large tracts of forestland as diverse natural forests.   In recent years, there has been something of a perfect storm impacting forestland ownership. Increased demands for liquid capital for core operations, rising Wall Street pressures to improve returns, and a realization that many timberland assets have been undervalued have combined with an increased willingness by the financial sector to invest in forestland. This combination has caused millions of acres to change hands from large integrated forest product companies to investment management vehicles such as TIMOs and REITs.  

The jury is still out as to the long-term impact of this ownership shift on forest management activities; however there are growing concerns about the commitment of these ownership entities to forests in general and to sustainable forests (e.g. certified) specifically. This report provides a brief overview of TIMOs and REITs and those policies and pressures that have been driving their growth. This report also provides information about how TIMOs and REITs are currently impacting sustainable forestry and how these impacts may evolve.  

To download the report, click here.

“The Outlook” is the monthly e-newsletter of Dovetail Partners Inc, a 501c3 non profit corporation.

Dovetail Partners is a highly skilled team that collaborates to develop unique concepts, systems, programs and models to foster sustainable forestry and catalyze responsible trade and consumption.

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