Timber companiesfrom Asia stand to lose millions of dollars if a proposed law is passed by two cities in the US
UNDER proposed timber purchasing laws in Los Angeles and New York, USA, preference would be given to wood certified by an environmental organization called the Forest Stewardship Council (FSC). Environmentalists are pushing to implement this certification process to keep logging at sustainable levels.
"If these laws arc passed, it could become a trend across the US," says Susan Holmes of the New York office of the Sierra Club, an environmental group that is supporting the law. Companies that need to compete for these markets would have to meet FSC standards, and governments would have to follow suit, she adds.
Malaysia and Indonesia, the world's leading timber exporters, will be badly hit by this legislation. Malaysia says that FSC is a western plot to foist alien environmental standards on Asia and keep Asian wood products out of Western markets. Malaysian diplomats have been keeping a close watch on the hearing in these two cities to stop this legislation. The Kuala Lumpur-based Malaysian Timber Council says that the proposed laws are unfair, "It is not the amount at stake but the principle that concerns us," says Noharudin Nordin, Malaysia's trade commissioner 13.3 million cubic metres of timber in 1998 worth Us $3.5 billion.
Under FSC, the timber exporter would have to adhere to standards set by the certification body. The exporter will have to accept supervision and must label products. Inspection agencies of the FSC would monitor forest-management policies, approve use of certification-body label and supervise products from forests to the shops.
The proposed laws could not have come at a worse time for the Asian countries. Japan, till recently, was the bigger buyer of timber in Asia, consuming close to a third of the wood products produced by Malaysia and Indonesia. But now the demand for timber is declining not only in Japan but also in South Korea, another major buyer of timber from Asia, Asian timber companies has started looking towards the West to expand their business. Some felt that exporting timber would help in restarting the Asian economics, which are in the doldrums.
Many environmentalists, both in and outside Southeast Asia, support the proposed legislation. They say that logging is far in excess of a sustainable level. Imposing standards would in some way reduce the pressure on forests, they claim. Till now, 115 timber-buying companies in the US have agreed to purchase only FSC-Certified products. Experts say that this figure still represents just one per cent of the total market.
Asian timber companies have a tough time ahead of them. European countries have stricter regulations. For example, the UK's 1995 Plus Group, which represents an estimated one-quarter of the country's tropical timber market, has committed to purchase only FSC-certified products by the end of 1999 - more bad new for Asian timber companies.
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