Voluntary Sustainability Standards, which can be private-led, public-led, or implemented as a public-private partnership, but remain voluntary and face trade-offs between specificity and cost, are an element of a multi-pronged approach to forest conservation.
Environment-related forest provisions are increasingly prevalent in trade agreements, having been identified in over 730 agreements.
Although VSS certifications can be expensive, oftentimes producers will meet or exceed VSS requirements because they need to access markets, although, as “price takers,” they would benefit from more equitable sharing of costs.
The International Institute for Sustainable Development (IISD), in partnership with the UK, delivered a webinar to unpack the complex world of Voluntary Sustainability Standards (VSSs), novel and existing international trade policy mechanisms that can encourage forest conservation and reduce deforestation associated with agricultural and forest commodities, and potential synergies between international trade agreements and VSSs.
The webinar themed, ‘Reducing Deforestation and Enhancing Forest Conservation Through International Trade Policy,’ was held on 24 March 2021.
The event’s first set of speakers examined the characteristics, effectiveness, and scalability of VSSs as tools for reducing deforestation and enhancing forest conservation, focusing primarily on the cocoa, palm oil, soybean, and timber sectors when discussing specific commodities.
Cristina Larrea, IISD, introduced the a session on VSSs, highlighting the need to ensure visibility throughout value chains, given continually-high rates of deforestation. VSSs, she noted, can be private-led, public-led, or implemented as a public-private partnership (PPP). Larrea flagged that although referenced in due diligence systems or integrated into international trade agreements, VSSs remain largely voluntary rather than conditional or mandatory standards.
Vivek Voora, IISD, provided an overview of VSS characteristics, outlining options for design, implementation, and enforcement. Describing VSSs as “governance systems for sustainability in supply chains,” Voora compared alignment of provisions across specific VSSs in the four commodity sectors. While most VSSs aim to protect high conservation value (HCV) or high-carbon-stock areas, VSS implementation can also include capacity-building support and follow principles such as that of continuous improvement, he said.
Highlighting the various levels of VSS depth, Voora flagged that there is a trade-off between specificity and cost: while an “identity preserved” VSS enables tracking back to a product’s origin, and provides the highest level of traceability, it is also the most costly. Conversely, “book and claim” systems feature products that are mixed and traded as non-sustainable, but sustainability certificates are bought so that the consumer can make sustainability claims based on the amount of certificates issued and traded.
Voora emphasized that different commodities offer different opportunities for reforestation and preventing deforestation. He underscored that VSS systems are “not created equal,” and differences in design, implementation, and enforcement have implications for how well they prevent deforestation. Given the complexities, he stressed that addressing sustainability issues such as deforestation requires a set of multi-pronged approaches, noting that VSS systems are one tool among many.
Verina Ingram, Wageningen Economic Research, presented a study that looks at VSSs and other value chain-driven approaches. While VSSs performed better than some other approaches, Ingram noted a research limitation relating to the types of evidence available, noting that VSSs have been around longer than other approaches reviewed, and therefore may have more evidence than newer systems. She said “VSS are not a magic bullet,” and underscored that although standards “have something to offer,” users need to recognize their limits.
Rounding out the first section of the webinar, Joanna Nowakowska, Forest Stewardship Council (FSC) International, presented the latest GIS tools, which moderator Nathalie Bernasconi-Osterwalder, IISD, noted are being used to enhance VSS efficacy. The presentation highlighted how a GIS platform can verify forest areas’ compliance with VSSs and reduce costs of audits, thereby making FSC certification easier and increasing accessibility. Nowakowska also demonstrated the FSC Risk Assessment Platform, which communicates risk associated with wood in FSC mix-certified products, and the FSC Impacts Dashboard, which shares information on impacts originating from studies about FSC, geared towards a wide audience of stakeholders and regulatory partners.
Opening the second part of the webinar, Soledad Leal Campos, IISD, provided an overview of the different approaches trade agreements have taken to address or incorporate forest provisions. Building on the TREND and Environment database, which identifies nearly 300 different types of environmental provisions across 730 trade agreements, she outlined three sub-categories of environment-related forest provisions: conservation of forests, present in 49 trade agreements; sustainable trade in forestry products, found in 23 trade agreements; and combating illegal exploitation of forests, also in 23 trade agreements.
Forest-related provisions, she explained, can be seen from two perspectives. The first, substantive law, spans declarative clauses, cooperation provisions, and specific commitments, and can include certification schemes for sustainably harvested forest products. The second, enforcement, can take a “minimalist approach” that provides for consultations in a negotiation model, or can be soft or hard, and feature quasi-judicial dispute settlement procedures. New approaches to inclusion of forest-related sustainability provisions in trade agreements, she noted, can include preferential treatment for products that meet sustainability requirements.
Part 3 of the webinar connected VSSs and international trade agreements. Charlotte Sieber-Gasser, University of Lucerne, discussed an example where the European Free Trade Association (EFTA) states and Indonesia signed a Comprehensive Economic Partnership Agreement (CEPA), which, she said, is the first to include a mechanism to promote the sustainable management of forest resources. Sieber-Gasser noted that although preferential market access for sustainable products exists, non-sustainable goods can still be traded. She emphasized that exporting commodities is not a sustainable way for countries to engage in trade in the long term, and recommended investing in value-add productions in Indonesia, such that the country’s economy is less reliant on raw palm oil exports.
Rounding out the third session, Mary Kinyua, Fairtrade Africa and Oserian, highlighted linkages between climate impacts and economies. She pointed to the flower industry in Africa, which faces significant challenges relating to carbon emissions. Under the current system, “we need to stop growing flowers to the detriment of our economy, or we continue to the detriment of the earth,” she noted, underscoring the need to work together on shared solutions. Kinyua emphasized that although certifications can be expensive, oftentimes producers will meet or exceed VSS requirements because they understand the need to simultaneously protect the planet and access markets. However, she said producers are often “price takers,” and would benefit from more equitable sharing of costs, as only some actors within supply chains are incentivized to change behavior.
To fill the “legal void” left by many VSSs, which do not have a legal mandate to force action, Kinyua called on governments to create the enabling environment that spurs action without forcing it. [Webinar Landing Page and Recording] [SDG Knowledge Hub Sources] [SDG Knowledge Hub Coverage of IISD Webinar on Role of VSSs in Achieving SDGs]