Logging with care

THE FIRST tropical rainforest in the world to be certified under the Forest Stewardship Council (FSC) standards for sustainable forest management is in Sabah, Malaysia. Back in 1997, the certification of Deramakot Forest Reserve was progressive; moves to create Malaysia’s own national forest certification had not even begun yet.

Today, five out of the seven FSC-certified forests in Malaysia are in Sabah and the state aims to have all its forestry concessions FSC-certified by 2014.

Of the seven certificates, three apply to plantation forests for fast-growing species like Acacia, which is used mostly for chip wood production and sawn wood. Of the four natural forests under certification, three are in Sabah – the Deramakot, Tangkulap-Pinangah and Ulu Segama-Malua forest reserves.

The only natural forest concessionaire in Peninsular Malaysia to hold a FSC certificate, Kumpulan Pengurusan Kayu Kayan Terengganu (KPKKT) manages two concessions: the one in Dungun has been certified whilst the smaller one in Cherul is expected to attain certification next year.

Being certified have earned both Sabah and KPKKT global recognition in the marketplace, and the benefits are not limited to a better reputation or premiums on their products.

“There has been a paradigm shift in our forest management system. Our operation has become more comprehensive and organised,” says Datuk Zakaria Awang in an e-mail interview. Chief executive officer at Golden Pharos, KPKKT’s holding company, Zakaria says while the certification cost is only about 5% of the total production cost, sawn hardwood exported by the company to Europe and the United States fetch prices that are up to 25% more than non-FSC-certified products.

Despite already possessing certification from the Malaysian Timber Certification Council’s (MTCC) national scheme, KPKKT went on to apply for FSC certification in 2008.

“Current premium prices for FSC-certified sawn hardwood exported to Britain are 30% and above. This can be compared to dark red meranti sawn timber certified by MTCC which commands a premium of 2% to 5% in the British market.”

Subscribing to FSC certification has enabled KPKKT to minimise threats from illegal loggers and poachers, through regular stakeholder consultations. One of KPKKT’s advantages is the fact that it does not face the kind of problems arising from short-term tenures as its tenure for the Dungun forest will last until 2037.

Sabah Forestry director Datuk Sam Mannan points to similar advantages with regards to FSC. Green timber premiums fetch them 15% to 20% more than local market prices.

In an e-mail reply, Mannan points out that an improved reputation also attracts more partners, who can offer support with resources and technical assistance.

“Sabah is too small to compete on the basis of size, we can only compete on the basis of governance.

“The FSC is the gold standard for governance and hence our choice for it.”

As to the disadvantages of obtaining FSC certification, Mannan says that would depend on whom you asked.

“Some players used to the old fashion way of forestry may find certification troublesome with tedious and stringent measures, ultimately, increasing management costs and in turn affecting their competitive edge. But for credibility and good governance, third party audits are absolutely essential.”