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PEFC

GOVERNANCE
REVIEW
MAY, 2008

Final Report

PEFC Governance Review Page 1 of 104 Final – 23 May, 2008


TABLE OF CONTENTS
MANAGEMENT SUMMARY ...................................................................................................................5
INTRODUCTION ...........................................................................................................................................5
RECOMMENDATIONS .................................................................................................................................. 7
Phase One – Get Resourced .................................................................................................................7
Phase Two – Get Structured.................................................................................................................9
Phase Three – Get Engaged ...............................................................................................................11
Phase Four – Get Influential..............................................................................................................13
REVISED PEFC ORGANISATIONAL BODIES .............................................................................................14
REVISED PEFC ORGANISATIONAL STRUCTURE .....................................................................................15
REVISED PEFC ASSESSMENT, ENDORSEMENT AND MUTUAL RECOGNITION PROCESS .......................16
I. INTRODUCTION..................................................................................................................................17
PEFC STRATEGIC PLAN ...........................................................................................................................17
MANDATE .................................................................................................................................................17
PANEL ........................................................................................................................................................17
PREVIOUS ANALYSIS ................................................................................................................................18
FINDINGS ...................................................................................................................................................18
II. METHODOLOGY ................................................................................................................................19
III. ORGANISATIONAL REVIEW........................................................................................................21
BACKGROUND ...........................................................................................................................................21
PEFC REVIEW ..........................................................................................................................................22
RECOMMENDATIONS BY CATEGORY .......................................................................................................24
Transparency.......................................................................................................................................24
Participation........................................................................................................................................25
Evaluation............................................................................................................................................25
Complaint and Response ....................................................................................................................26
IV. ISSUES ASSESSMENT - “WHAT COULD BE BETTER?”.......................................................27
GOVERNANCE MODELS ............................................................................................................................27
Balance of Power (Members, Board, Secretariat)............................................................................28
‘Bottom-Up’ versus ‘Top-Down’ .......................................................................................................28
Inclusiveness........................................................................................................................................29
Transparency.......................................................................................................................................30
ORGANISATIONAL STRUCTURE AND MANAGEMENT ..............................................................................31
Members’ Expectations versus Organisational Capacity ................................................................32
Board Workload/Focus.......................................................................................................................32
Technical Resources Insufficient .......................................................................................................33
Complementary Initiatives/Investments.............................................................................................33
STAKEHOLDER GROUPS............................................................................................................................33
‘Low-Hanging Fruit’ Has Been Harvested .......................................................................................34
Lack of Diverse Stakeholder Representation ....................................................................................34
Levels of Integration and Influence ...................................................................................................35
STANDARDS ..............................................................................................................................................36
Variance in Robustness of PEFC Member Standards......................................................................36
‘Meta-Standard’ Could Also Be More Robust ..................................................................................37
‘Northern-Hemisphere’ Standard Barrier to New Members ...........................................................37
Panel of Experts Insufficiently Robust, Clear ...................................................................................38
EXTERNAL PERCEPTIONS .........................................................................................................................38
Poor Global Awareness of PEFC ......................................................................................................38
“PEFC is Industry-Driven” ...............................................................................................................39
‘First Impressions’ are Opaque .........................................................................................................39
OTHER I SSUES ...........................................................................................................................................40
Organisational Conflict – FSC, ENGOs ...........................................................................................40
‘Flash-point’ Issues ............................................................................................................................41

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‘Next Generation’ Challenges............................................................................................................41
V. OPTIONS - “WHAT COULD WE DO ABOUT IT?” ....................................................................42
EXTERNAL PERCEPTIONS OF PEFC..........................................................................................................42
Focus On - Transparency and Public Information...........................................................................42
Focus On – Changing Critics from Within .......................................................................................43
Focus On – Inclusion to Transform the Organisation......................................................................43
Options - External Perceptions of PEFC ..........................................................................................43
PEFC EFFECTIVENESS ..............................................................................................................................44
Focus On – Standards and Enforcement...........................................................................................44
Focus On – Operations and Administration .....................................................................................45
Focus On – Members and Board .......................................................................................................45
Options - PEFC Effectiveness ............................................................................................................45
PEFC'S RULES AND STANDARDS .............................................................................................................46
Focus On – National Standards and Quality ....................................................................................47
Focus On – PEFC Meta-standard and Quality ................................................................................47
Focus On – Additional or Parallel Criteria......................................................................................47
Options – Rules and Standards ..........................................................................................................48
IMPLEMENTATION AND MONITORING OF GOVERNANCE ........................................................................49
Focus On – Centralising Decision-Making Power...........................................................................49
Focus On – Open Membership to All Stakeholders..........................................................................49
Focus On – Trouble-shooting: Engage and Broker .........................................................................49
Options – Implementation and Monitoring of Governance .............................................................50
“BUY-IN" FROM PEFC'S EXISTING STAKEHOLDERS ...............................................................................51
Focus On – Increase Support and Value to Members ......................................................................51
Focus On – Expand Market Share.....................................................................................................51
Focus On – Simplify, Clarify, and Improve Efficiency.....................................................................52
Options – ‘Buy-In’ from Existing Stakeholders ................................................................................52
DIALOGUE WITH ENVIRONMENTAL NON-GOVERNMENT ORGANISATIONS (ENGOS) ..........................53
Focus On – Marketing Push...............................................................................................................53
Focus On – Identify and Partner with One Key ENGO ...................................................................53
Focus On – Open Membership to ENGOs ........................................................................................54
Options – Dialogue with ENGOs.......................................................................................................54
VI. RECOMMENDATIONS - “SO WHAT NOW?” ...........................................................................56
PHASE ONE – GET RESOURCED ...............................................................................................................56
1. Publish Governance Review.......................................................................................................56
2. Establish International Headquarters .......................................................................................56
3. Review Board By-Laws (Executive Committee)........................................................................57
4. Update Staff Position Descriptions............................................................................................57
5. Delegate Operational Authority to Heads of Unit....................................................................57
6. Quantify PEFC ‘Impact’ ............................................................................................................57
7. Commit to the ‘High Road’ ........................................................................................................58
8. Apply the ‘Plain-English’ Principle ..........................................................................................58
9. Promote a ‘Management-Summary’ Practice ..........................................................................58
10. Update Website for Accessibility .............................................................................................58
11. Invest in Marketing Capacity...................................................................................................59
12. Join Stakeholder Initiatives......................................................................................................59
13. PEFC International Conference on Forestry and the Environment .....................................60
14. Develop Annual Internal Governance ‘Check-Up’ ................................................................60
15. Volunteer for One World Trust’s Governance Review...........................................................60
PHASE TWO – G ET STRUCTURED .............................................................................................................61
16. Strategically Update Board Model..........................................................................................61
17. Focus Board Role .....................................................................................................................61
18. Recruit Additional Stakeholders into National Governing Bodies (NGBs) ..........................61
19. Expand ‘Extraordinary Members’ into a Forum....................................................................62
20. Add Stakeholder Forum ‘Right of Agenda’.............................................................................62
21. Expand Secretariat Capacity ...................................................................................................62
22. Tighten Independent Consultant and Panel of Experts’ Role................................................63
23. Launch Tropical Initiative........................................................................................................63

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24.Add Fundraising Capacity .......................................................................................................64
25.Increase Support to Members ..................................................................................................64
26.Sponsor Applied Research in Environmental Impact.............................................................64
27.Create ‘Entry-Level’ Tier of Endorsement..............................................................................64
28.Provide Capacity-Building Assistance ....................................................................................65
PHASE THREE – GET ENGAGED ...............................................................................................................65
29. Post Position Descriptions for ‘Seconded’ Staff.....................................................................65
30. Nominate Two Board Members from Forum ..........................................................................65
31. Nominate Members of the Panel of Experts from Forum ......................................................66
32. Name Board Member to Chair Stakeholder Forum ...............................................................66
33. Revise Engagement Between Board and PEFC International Headquarters ......................66
34. Review and Clarify PEFC Complaints and Appeals Procedures..........................................66
35. Reduce Number of Board and General Assembly Meetings ..................................................67
36. Leverage Engagement with FSC..............................................................................................67
37. Give Stakeholder Forum Votes in the General Assembly ......................................................67
PHASE FOUR – GET INFLUENTIAL ............................................................................................................68
38. Lead Forestry Policy on Carbon .............................................................................................68
39. Update PEFC Brand ................................................................................................................68
APPENDICES .............................................................................................................................................69
A. INTERNATIONAL OVERSIGHT PANEL BIOGRAPHIES ...........................................................................70
Jamie Lindsay, Chair..........................................................................................................................70
Björn Andrén .......................................................................................................................................70
Jon Dee ................................................................................................................................................70
Dr Johannes (Hans) Drielsma ...........................................................................................................72
Dr. Maharaj Muthoo...........................................................................................................................72
Frederick M. O’Regan........................................................................................................................73
Dirk Teegelbekkers .............................................................................................................................73
B. INTERNATIONAL OVERSIGHT PANEL TERMS OF REFERENCE ............................................................75
C. PEFC GOVERNANCE SURVEY .............................................................................................................77
D. GOVERNANCE RECOMMENDATIONS BY SUBJECT AREA....................................................................88
E. PEFC STAKEHOLDER FORUM .............................................................................................................91
F. PEFC ORGANISATIONAL STRUCTURE ................................................................................................93
G. PEFC ASSESSMENT, ENDORSEMENT AND MUTUAL RECOGNITION PROCESS ..................................96
H. ‘EVALUATING LEGITIMACY AND QUALITY OF FOREST GOVERNANCE’ BY TIM CADMAN ..............98

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MANAGEMENT SUMMARY
Introduction

The PEFC Council (Programme for the Endorsement of Forest Certification


schemes) is an independent, non-profit, non-governmental organisation,
which promotes sustainably managed forests through independent third
party certification. To this end, PEFC provides an assurance mechanism to
purchasers of wood and paper products that they are promoting the
sustainable management of forests.

PEFC was launched on the 30th June 1999 in Paris by representatives of


eleven officially constituted national PEFC governing bodies with the support
of associations representing some 15 million woodland owners in Europe and
of many international forest industry and trade organizations.

Since then, its membership has increased and broadened, becoming the
largest forest certification umbrella organisation covering national schemes
from all over the world, and delivering hundreds of millions of tonnes of
certified wood to the processing industry.

This Governance Review was mandated in PEFC’s October 2007 Strategic


Plan and the Z/Yen Group was contracted to convene an independent
Governance Review Panel to guide and contribute to the process. The
Panel’s mandate includes:

• external perceptions of PEFC;


• PEFC effectiveness;
• PEFC's rules and standards;
• implementation and monitoring of governance;
• "buy-in" from PEFC's existing stakeholders;
• dialogue with environmental non-government organisations.

Z/Yen reviewed over thirty leading individuals in sustainable forestry,


sustainability and environmental protection, international organisations,
standards and certification bodies. After careful review, Z/Yen selected a
Panel of seven individuals1 (four independent experts, and three from PEFC),
chaired by Lord Jamie Lindsay of UKAS (United Kingdom Accreditation
Service), and including Björn Andrén of Holmen Skog AB, John Dee, founder
of Planet Ark, Hans Drielsma of Forestry Tasmania, Dr. Maharaj Muthoo of
the Hari Environment & Development Society, Frederick O'Regan of the
International Fund for Animal Welfare, and Dirk Teegelbekkers of PEFC
Deutschland e.V.

1 See Appendix A for biographies of the Panel Members

PEFC Governance Review Page 5 of 104 Final – 23 May, 2008


The Panel established baseline assumptions about the Review and directed
Z/Yen to design an online survey2 about PEFC Governance and to deploy it
as widely as possible. Z/Yen also conducted semi-structured interviews with
key stakeholders, opinion formers, and technical leaders in the forestry and
environmental community in order to enrich the data collection and expand
buy-in to the overall process. The consultation process has been widely
publicised within the relevant communities. 152 people have responded to
the survey, and 26 have been interviewed or have presented contributions to
the Panel’s review and Z/Yen’s analysis in this report. The Panel also drew
on previous research by Z/Yen on PEFC’s Image and Impact, Location
Review, and Governance Desk Study, and incorporated input from PEFC
Secretariat staff during a day-long visit, observation, and interviews. In its
final meeting, the Panel also heard presentations and had discussions about
PEFC’s governance and environmental issues in sustainable forest
management with Tim Cadman in the School of Government of the
University of Tasmania3, and Saskia Ozinga of FERN.

Drawing on comparative research in the field, the Panel has also incorporated
a review of PEFC’s Governance against criteria established by the One World
Trust, a leading institution conducting research on practical ways to make
global organisations more responsive to the people they affect. This report
also includes analysis of PEFC based upon the analytical methodology
developed by One World Trust as the basis of its annual review4 of the
governance of thirty of the world's most powerful organisations from
intergovernmental, non-governmental, and corporate sectors.

Key issues and challenges identified in the Governance Review fell broadly
into five main categories: Governance Models, Organisational Structure and
Management, Stakeholder Groups, Standards, and External Perceptions.
Specific questions focused on the decision-making relationship between the
Members, the Board, and the Secretariat; responsible means to continue to
increase membership and certified hectarage; where inclusiveness and
representation happens within PEFC’s bodies and initiatives; and how best to
develop or improve public and peer understanding of PEFC’s work.

Once the Panel had identified the main challenges facing the organisation, it
reviewed a wide range of options for resolving each issue. In considering
options, the Panel gave preference to recommendations that:
• directly responded to one or more discrete elements of its mandate;
• should have broad support among existing and potential stakeholders;
• sit largely within the purview of PEFC itself (without significant
dependencies upon external actors);
• leads to enhanced credibility of the PEFC scheme;

2 See Appendix C for the numerical results of the survey


3 See Appendix H for a summary of Tim’s analysis on “Evaluating Legitimacy and Quality of
Forest Governance”
4 See the “Global Accountability Report 2007” at: http://www.oneworldtrust.org/

PEFC Governance Review Page 6 of 104 Final – 23 May, 2008


• fit logically into an incremental process of improvement;
• would be financially responsible, reduce costs, or contribute a new
funding stream for the organisation; and
• contributed to addressing multiple issues at once.

Recommendations

After review of options, the Panel has made the following recommendations
in four general, incremental phases:
• collecting the necessary resources to enable PEFC to undertake this
programme of governance work - “Get Resourced”;
• make necessary organisational changes necessary for efficient growth
and effective governance - “Get Structured”;
• implement a variety of outreach initiatives designed to reinforce
PEFC’s Mission with stakeholders – “Get Engaged”;
• proactively to lead policy on sustainable forest management – “Get
Influential”.

Phase One – Get Resourced

Phase One recommendations are ‘immediate-impact’ options, identified both


for their relative ease of initiation/implementation and their role as the basis
for subsequent recommendations. Recommendations in this phase also
include the first steps in longer-term, more complex initiatives.

1. Publish Governance Review – Transparency has been identified as a priority


for PEFC, as such, an important first step would be to publish this Review
prominently on the PEFC web-site, and to publicise it widely.

2. Establish International Headquarters - In line with its expanded


responsibilities and capacity, rename the Secretariat the “PEFC
International Headquarters”, and re-title the Secretary-General the
“Director-General” of the organisation.

3. Review Board By-Laws (Executive Committee) - Review, clarify, and revise


existing procedures on the Board’s Executive Committee for transparency
(for example, how the Chair and Vice-Chairs are selected, what decisions
are within their purview, when meetings take place, how minutes are
distributed to the full Board.)

4. Update Staff Position Descriptions - Bring position descriptions of staff in


line with responsibilities anticipated in the Geneva office, and develop
draft position descriptions for roles likely to be needed in the next twelve
months.

5. Delegate Operational Authority to Heads of Unit - Give responsibility and


authority to Heads of Unit to oversee relevant recommended changes in
each of their respective areas, overseen by the Director-General.

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6. Quantify PEFC ‘Impact’ - Begin to identify the impact of PEFC’s work in
terms of environmental, social, economic, or political impact on
sustainable forest management and non-commercial interests (for
example, “Every hectare of PEFC certified deciduous forest removes X
tonnes of carbon dioxide from the atmosphere every year…”)

7. Commit to the ‘High Road’ - Develop an internal policy, with guidance and
draft materials/text for PEFC leadership, staff, and members that sets out
an organisation-wide principle of universally constructive response to
criticism; the most strident or vitriolic the attack, the more gracious and
engaging the response should be, consistently across the organisation.

8. Apply the ‘Plain-English’ Principle - Create versions of the most frequently


accessed PEFC resources (for example “Elements of credible forest
certification schemes”) free from expert language for the non-technical
reader, and highlight PEFC efforts in broader communities more
prominently (namely content currently located under “Did you know?” on
the web-page);

9. Promote a ‘Management-Summary’ Practice - Ensure that PEFC documents,


reports, and technical documents are prefaced by a short, easy-to-
understand summary of the key points, and where applicable include a
recommendation for decision-making;

10. Update Website for Accessibility - Redesign the PEFC web-site to have four
distinct, dynamic, and well-supported functions:

• First – PEFC’s customers, partners, licensed users of the logo, and


consumers of PEFC certified products;
• Second - general information for the public, media, civil society
organisations, and environmental movement;
• Third - technical information for forestry agencies, certification,
accreditation, and standards specialists, as well as the academic/
scientific community; and
• Fourth - a ‘members-only’ section with discussion forums, PEFC
resources, organisational updates, and opportunities for peer-
based networking and information-sharing.

In addition, the web-site needs to improve the ‘Frequently Asked Questions


(FAQ)’ (currently published as “Did You Know?”) and add a ‘What Do I Do
If…’ section both to cover the most common issues visitors will have, but also
as a resource for PEFC Members on the organisation’s position and
perspective on a variety of subjects (‘High Conservation Value’ forests,
contributions of certified forest to carbon mitigation, and so on).

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11. Invest in Marketing Capacity - PEFC has a dynamic and engaging story to
tell, and needs the capacity to promote the organisation globally to the
media, potential new members, the general public, and stakeholders;

12. Join Stakeholder Initiatives - PEFC should review options to join


stakeholders’ initiatives (for example, Conservation International’s ‘Center
for Environmental Leadership in Business’, or the International Union for
Conservation of Nature’s ‘Commission on Environmental, Economic and
Social Policy’) both to support complimentary efforts in sustainability and
promote a broader understanding of PEFC’s work and contributions;

13. PEFC International Conference on Forestry and the Environment - Announce a


PEFC-sponsored conference in Geneva (targeted to take place in 2009)
with the express purpose of inviting participation and dialogue with
Environmental NGOs. Form and support a four-person conference
planning committee with two PEFC representatives, and two ENGO
representatives (paid as consultants) to develop conference agenda, and
negotiate broad participation.

14. Develop Annual Internal Governance ‘Check-Up’ - Include an internal review


of organisational governance as part of the PEFC annual reporting process
(in the same way as the financial audit) conducted by a variety of internal
stakeholders in a consistent methodology to allow for measurement of
progress over time. Include a review of Board capacity, procedures and
goals against organisational strategy and changes in the sector.

15. Volunteer for One World Trust’s Governance Review - Invite One World Trust,
a leading not-for-profit organisation focused on accountability within
international organisations and corporations, to include PEFC in their
annual review5 of the governance of international trans-national
corporations, international NGOs, and international organisations.

Phase Two – Get Structured

Phase Two recommendations are a mix of ‘next-step’ suggestions for previous


initiatives and organisational changes that will take some internal preparation
and development.

16. Strategically Update Board Model - Develop an updated model of a Board


comprised of a diverse mix of individuals with both relevant skills, and
representational constituencies (e.g. forest owners, environmental NGOs,
corporate leadership, labour organisations, indigenous organisations.)
Also consider the utility and format of Board sub-committees (e.g. finance,
fund-raising, environment, marketing, technical/expert), and
opportunities for additional sub-committee membership from the

5 See: http://www.oneworldtrust.org/

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Stakeholder Forum6. As current Board members’ terms expire, ensure that
replacement members match strategic goals.

17. Focus Board Role - Draft a new preface to by-laws focusing Board duties on
four primary functions: management and financial oversight, networking
and fundraising, promotion and outreach, and strategic planning.
Operational, administrative, and technical issues should be the
responsibility of the PEFC International Headquarters.

18. Recruit Additional Stakeholders into National Governing Bodies - Encourage,


facilitate, and assist National Governing Bodies to identify and recruit a
wide variety of local stakeholders to participate in their activities and
decisions. As members of NGBs, stakeholder representatives should be
able to participate substantively in PEFC International.

19. Expand ‘Extraordinary Members’ into a Forum - PEFC ‘Extraordinary


Members’ should be expanded to include a broader range of stakeholders,
be renamed the ‘Stakeholder Forum’7, and be granted specific rights and
responsibilities in the organisation’s governance process.

20. Add Stakeholder Forum ‘Right of Agenda’ - The Stakeholder Forum should
have the right (as a collective body) to add policy and other issues to the
agenda of the PEFC General Assembly in its periodic meetings, and to
convey to the PEFC International Headquarters Requests for Review on
specific issues or questions identified by its members.

21. Expand Secretariat Capacity - The management, administrative, and


technical capacity of the Secretariat should be expanded to better support
PEFC members, develop an increasingly robust ‘meta-standard8’, and
expand membership and partnerships.

22. Tighten Independent Consultant and Panel of Experts’ Role - Establish an


augmented set of position descriptions, compressed work-flow/time-
table, minimum requirements for professional eligibility, qualification test,
formal review mechanism for quality of completed work, terms of
reference that includes a signed ‘Statement of Independence’ for each
consultant.

23. Launch Tropical Initiative - PEFC should partner with a complementary


organisation of excellence (e.g. ITTO, or the Rain Forest Trust), or lead an
initiative in advancing sustainable forest management in tropical forests,

6 See Recommendation 19, and Appendix E “The Stakeholder Forum”


7 See ‘Appendix E – PEFC Stakeholder Forum’ for more information
8 A certification scheme applying for PEFC endorsement and mutual recognition needs to

meet PEFC rules for standard setting. This is often referred to as the “PEFC meta-standard”.
See http://www.pefc.org/internet/html/documentation/4_1311_400/4_1208_165/
5_1177_288.htm

PEFC Governance Review Page 10 of 104 Final – 23 May, 2008


utilising the project also to expand membership, create new alliances and
promote the PEFC standard’s contributions in the developing world.

24. Add Fundraising Capacity - Recruit a dedicated fund-raiser in the PEFC


International Headquarters to identify and leverage non-membership
based funds, including company and other foundations, contract and
grant funding in forestry from international development organisations
and donors (e.g. World Bank, DFID, UNDP, EU.)

25. Increase Support to Members - The PEFC International Headquarters should


survey existing members to identify and provide additional support (for
example, collecting and disseminating members-only ‘best practices’,
building a database of technical experts and key contacts globally, image
library, draft marketing materials, procurement database, conducting
training, comparative budget templates, support to increase market share,
and other services.)

26. Sponsor Applied Research in Environmental Impact - Invite the Stakeholder


Forum to identify and commission independent research on at least two
major issues, advancing the field of sustainable forest management.

27. Create ‘Entry-Level’ Tier of Endorsement - With an aim to expanding


membership globally, PEFC should create an ‘entry-level’ tier of
endorsement (including separate tools and processes such as the chain-of-
custody procedure) based upon timber legality certification to allow
significantly more developing countries to begin participating in the PEFC
process. This level of certification should be carefully distinct from mutual
recognition, and in no way ‘dilute’ or weaken the PEFC meta-standard.

28. Provide Capacity-Building Assistance - Develop the Technical Unit of PEFC


with specific staff capacity to provide capacity-building services to
members and prospective members, and serve as the implementation
function of the PEFC Secretariat in its partnerships (contractual or
otherwise) with international and development organisations. Revenues
from technical assistance projects can also provide an important funding-
stream for the organisation, and can serve as an additional opportunity for
Stakeholders to participate in PEFC’s broader work of sustainable forest
management.

Phase Three – Get Engaged

Phase Three recommendations are significant changes, medium-term projects,


or major milestones in incremental organisational re-alignments. They will
require significant preparation, and systematic engagement of internal and
external stakeholders to ensure sufficient buy-in.

29. Post Position Descriptions for ‘Seconded’ Staff - Create a mechanism for and
encourage PEFC Members to second appropriate staff for specific needs in

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the PEFC International Headquarters (identified in the revised
organisational chart and position descriptions) for a period of no less than
one year. Secondment (paying the salary of a full-time employee who
works in the Headquarters) increases opportunities for leading Members
to contribute to the organisation, and reduces operating budget costs
while advancing new capacity and initiatives.

30. Nominate Two Board Members from Forum - The Stakeholder Forum should
have the right to nominate two members of the PEFC Board of Directors
through the PEFC Nominating Committee.

31. Nominate Members of the Panel of Experts from Forum - The Stakeholder
Forum should have the right to nominate technical/standards advisors to
the PEFC Panel of Experts.

32. Name Board Member to Co-Chair Stakeholder Forum - One of the Board
members (not nominated by the Stakeholder Forum) should be named to
serve as the Co-Chair of the Stakeholder Forum, working with the internal
leadership set up by that body to integrate it dynamically into the
organisation.

33. Revise Engagement Between Board and PEFC Headquarters - Recognising that
the Board will be taking a higher-level role in the organisation’s Mission9
and delegating operational and administrative management to the PEFC
International Headquarters, the Panel recommends developing a more
consistent and integrated working relationship between the PEFC
International Headquarters and the Board10 to ensure necessary support
and oversight.

34. Review and Clarify PEFC Complaints and Appeals Procedures - Review
existing decentralised Complaints and Appeals Procedures in each
element of the certification process and provide a user-friendly interface
on the PEFC web-site to facilitate understanding of the appropriate levels
and recipients for complaints and appeals. Publish complaints submitted
through the formal PEFC process and their responses on an appropriate
page of the PEFC web-site.

35. Reduce Number of Board and General Assembly Meetings - Review the
frequency of recurring organisational meetings (recognising that Special
Sessions of the Board and other bodies may sometimes be necessary), and
incrementally reduce the number of ordinary meetings as the capacity of
the International Headquarters increases. Additionally, invest in high-
quality ‘virtual meeting’ technology, as well as dynamic technologies to
enable a continuous dialogue among members. Extend the General

9See Recommendation 17 – ‘Focus Board Role’


10In whatever form the current Executive Committee emerges in the new Board model – see
recommendation 16

PEFC Governance Review Page 12 of 104 Final – 23 May, 2008


Assembly to three full days from one and a half to allow for more
substantive debate on issues and effective networking and education of
members.

36. Leverage Engagement with FSC - PEFC should increasingly engage with FSC
in areas and endeavours of mutual benefit or concern (e.g. illegal logging),
increasing communication, and where a ‘united front’ can advance the
global interests of sustainable forest management (for example, inviting
FSC to General Assemblies, exchange of staff at headquarters, joint
development projects, mutual recognition of timber legality certification,
joint chain-of-custody certification, and/or collaboration in forestry
projects with international development organisations.)

37. Give Stakeholder Forum Votes in the General Assembly - Give the Stakeholder
Forum votes up to 50% (rounded down) of those of PEFC Council (e.g.
currently there are 35 PEFC Council members who have a total of 61
votes11, the Stakeholder Forum would have 30 votes on that basis.)
Members of the Stakeholder Forum will decide internally how those votes
are allocated12.

Phase Four – Get Influential

Phase Four recommendations are ‘capstone’ conclusions to which many other


preceding initiatives lead. Implementing these recommendations should
actually begin as early as possible, recognising the long lead times for
collective opinion within and outside the organisation to change sufficiently
to make these issues essentially self-evident by the time all others have been
completed.

38. Lead Forestry Policy on Carbon - PEFC should engage relevant international
organisations (e.g. the United Nations Framework Convention on Climate
Change (UNFCC), or the World Bank Forest Carbon Partnership Facility
(FCPF)) to offer the organisation’s technical assistance in establishing and
implementing the global standard for forestry’s contribution as a carbon
sink in a post-Kyoto Protocol agreement.

39. Update PEFC Brand - The PEFC brand should be reviewed for accuracy and
comprehensiveness with new organisational alignment and expanded
focus and stakeholder engagement.

The Panel’s recommendations are incremental, mutually reinforcing and


inter-dependent, and envisaged to take place ideally within two years.

11 PEFC Member-Schemes may have more than one vote based their certified hectarage, so
that the largest members of PEFC may have up to five votes on issues.
12 See ‘Appendix E – PEFC Stakeholder Forum’ for more information

PEFC Governance Review Page 13 of 104 Final – 23 May, 2008


Revised PEFC Organisational Bodies

National Governing Bodies (NGBs) – As PEFC is a membership organisation,


NGBs remain the ultimate source of authority. To accomplish their Mission,
though, they have delegated certain authority to the Board of Directors and
the International Headquarters to carry out and represent it internationally.

General Assembly – The General Assembly is the decision-making body of


the organisation, comprised of the PEFC Council and the Stakeholder Forum.
Member-Schemes in the PEFC Council have between one and five votes. The
Stakeholder Forum collectively will have votes equal to half the number
(rounded down) of the total votes in the PEFC Council13.

PEFC Council – Members of the Council represent Schemes in their country in


the General Assembly.

Stakeholder Forum – The Stakeholder Forum is made up of international


organisations supportive of sustainable forest management, and engaged in
improving and expanding PEFC work14.

Board of Directors – The Board of Directors is drawn from internal and


external sources as appropriate, and represents a mix of functional capacities
and representation of key constituencies within PEFC.

Executive Committee – The Executive Committee is made up of the Chair and


Vice-Chairs (2) of the Board, who are chosen from by Board members and
who work closely with the Director-General guiding the organisation.

Sub-Committees – The Board of Directors convene and lead standing or ad


hoc Sub-Committees (e.g. on Finance and Audit, Fundraising, or Social Issues)
that support the work of International Headquarters, and serve as venues for
in-depth or topical discussion among members of the General Assembly.

International Headquarters – Led by the Director-General, the staff of the


International Headquarters implements the work of the PEFC, and has access
to the specialised knowledge of Sub-Committees in a variety of areas.

Independent Consultants – Qualified Independent Consultants15 are


responsible for reviewing proposed new member schemes for compliance
with the PEFC meta-standard.

Panel of Experts – The Panel of Experts is a pool of consultants that reinforces


the work of the Independent Consultants, and upon request by the Director-

13 See ‘Appendix E – The Stakeholder Forum’ for specifics on voting rights


14 See ‘Appendix E – The Stakeholder Forum’
15 See ‘Recommendation 22 -Tighten Independent Consultant and Panel of Experts’ Role’

PEFC Governance Review Page 14 of 104 Final – 23 May, 2008


General or Board, supports the organisation by providing advice and
interpretation on technical issues to the General Assembly, the International
Headquarters.

Revised PEFC Organisational Structure

PEFC National
Governing
Bodies (NGBs)

General Assembly

Stakeholder
PEFC Council
(One to Four Votes per
Forum
Member) (up to 50% of PEFC
Council Votes)

PEFC Board of
Directors Sub-Committees
(Twelve Members, (Standing or Ad Hoc)
PEFC Panel of Two Nominated by
Experts Stakeholder Forum)
(Nominated by the
Council and Executive
Stakeholder Forum) Committee

PEFC
PEFC Director-
Independent
General
Consultants International
(Qualified Pool of Headquarters
Technical Specialists)

Note: For comparative illustrations of the current and revised Organisational Structures, please see Appendix F

PEFC Governance Review Page 15 of 104 Final – 23 May, 2008


Revised PEFC Assessment, Endorsement and Mutual Recognition Process

Recommended

Capacity
Prospective PEFC International
Building
member/scheme Headquarters may
decides to apply for work with prospective
mutual recognition by member/ scheme to
PEFC improve quality

Independent Submission Amendment


Assessment

Independent PEFC International Transmits


Prospective
Consultant and Panel Transmits Headquarters Rejection
member/scheme
of Experts review, transmits application
chooses to amend
comment, and make to external review for
scheme or appeal to
recommendation on assessment and PEFC Board
proposed scheme recommendation

Appeal
Transmits
Timeline (Illustrative) Appeal of
Independent PEFC Board of
1. Prospective member may work with Rejection
Assessment Directors reviews
PEFC International Headquarters scheme, technical
[Ongoing as necessary until submission] assessment and
2. Upon submission, scheme transmitted decides on status
for Independent Assessment
(Consultant and Panel of Experts) for Transmits
comment, review, and recommendation Approval
(including with Approval
[100 Days]
conditions)
3. Decision of Independent Assessment
transmitted to Members (on approval),
back to prospective member (on
rejection), or Board of Directors (on
appeal of Assessment’s recommendation)
4. Decision by Board of Directors (in PEFC General
Assembly Rejection
special session) upon appeal of rejection
or findings of Assessment (if applicable) decides on
[14 Days] endorsement by
5. General Assembly decides on Internet ballot
endorsement by Internet ballot [14 Days]
Acceptance

Proposed Scheme
receives mutual
endorsement

Note: For comparative illustrations of the current and revised Assessment Process, please see Appendix G

PEFC Governance Review Page 16 of 104 Final – 23 May, 2008


I. INTRODUCTION
PEFC Strategic Plan

The Programme for the Endorsement of Forest Certification Schemes (PEFC)


adopted their Strategic Plan16 in early October, 2007. Setting out goals in
sustainable forest management, market access, economic benefit, and rural
development, the Plan also called for a comprehensive review of the
organisation’s governance:

3.1 PEFC recognises governance, in its broadest sense, as the key strategic determinant in
achieving its overall strategic goals.

PEFC will implement a restructuring of its terms of Governance, following the


completion of a detailed review by external consultants.

The Z/Yen Group17 was contracted by PEFC to carry out the review in the
first half of 2008.

Mandate

The PEFC Strategic Plan gave the mandate for the Review:

The objectives of the review and restructuring are to update the PEFC Council, its rules
and standards thus making it more effective by:
• Improving external perceptions of PEFC’s governance.
• Making the PEFC organisation more effective.
• Ensuring that PEFC’s rules and standards are simple and easy to understand;
implement and operate.
• Ensuring that PEFC robustly implements and continuously monitors its own
requirements at all levels.
• Removing obstacles to dialogue with international ENGOs.

Panel

Z/Yen, in conjunction with the PEFC Board and Secretariat, drew together an
International Oversight Panel18 made up of seven international experts19,
three from PEFC, and four independent of the organisation (including the
Chair.) Its members included:

• Lord Jamie Lindsay of UKAS (United Kingdom Accreditation


Service), Chair
• Björn Andrén of Holmen Skog AB
• John Dee, Founder of Planet Ark
• Hans Drielsma of Forestry Tasmania

16 http://www.pefc.org/internet/html/documentation/4_1311_1392/4_1208_1380/
5_1177_1719.htm
17 For more information, see: http://www.zyen.com/
18 See Appendix B – International Oversight Panel Terms of Reference
19 See Appendix A – International Oversight Panel Biographies

PEFC Governance Review Page 17 of 104 Final – 23 May, 2008


• Dr. Maharaj Muthoo of the Hari Environment & Development
Society
• Frederick O'Regan of the International Fund for Animal Welfare,
and
• Dirk Teegelbekkers of PEFC Deutschland e.V.

Z/Yen staff provided support and analysis.

Previous Analysis

Z/Yen was familiar with PEFC and its work, having conducted internal
research for the organisation, including ‘Image and Impact’, ‘Location’ (of its
headquarters), and a ‘Governance’ desk study.

These reports contributed to the Panel’s understanding of PEFC, its work, and
potential.

Findings

This report sets out the findings of the Panel.

PEFC Governance Review Page 18 of 104 Final – 23 May, 2008


II. METHODOLOGY

This Governance Review based its analysis, conclusions, and


recommendations on a wide variety of sources.

The seven-member International Oversight Panel20 was drawn from a pool of


approximately thirty-five candidates from a wide variety of organisations and
sectors in forestry and environment.

An on-line survey was developed and widely publicised, including


prominently on the PEFC website for the duration of the Review. The survey
was announced on PEFC’s mailing list (to approximately 4,500 people), in
Z/Yen’s periodic newsletter (to approximately 2,500 people), and in World
Environment News (to approximately 20,000 people.)

Participation in the survey was voluntary and anonymous, and was managed
in its entirely by Z/Yen. In total, 152 people completed the survey21. This
number compares favourably with the participant levels in other, similar
reviews. Where appropriate, quantitative results are included in the analysis
of the report, as are select quotes from the narrative sections of the survey,
illustrating perceptions of individual respondents, which have been
considered by the Panel.

In addition, at the launch of the Review, approximately 150 leaders among


PEFC’s stakeholders were directly contacted by Panel members and invited to
participate in a personal interview. Approximately half-way through the
Review process, an additional 52 additional people in the environmental
movement were personally invited to participate as well to ensure the
broadest possible representation of that stakeholder group.

Of those 202 people, 26 took part in the in-depth interviews conducted by


Z/Yen staff following the same format as the on-line survey. Each interview
took an average of 75 minutes. Some people who were invited to offer their
thoughts in the interview elected to complete the survey instead due to time
or other scheduling constraints.

During the four months of the Review (February – May, 2008), the Panel met
three times in London to identify key issues in PEFC’s Governance, review
the survey and interview data, consider a wide range of options for
improvements to the internal structure and external perception of the
organisation, and to make specific recommendations for this report.

20 See Appendix A for Panel Biographies, and Appendix B for Panel Terms of Reference
21 See Appendix C for quantitative Survey Results

PEFC Governance Review Page 19 of 104 Final – 23 May, 2008


In early April, Z/Yen staff flew to the PEFC Secretariat in Luxembourg and
conducted a day-long process of interviews with all PEFC personnel,
including its Secretary-General.

Z/Yen identified a number of methodologies for measuring organisational


governance, and selected that of the One World Trust (a leading international
NGO in organisational transparency and accountability) to use as the basis for
an organisational review of PEFC. During this process, the Secretary-General
was requested by the Panel to complete a self-assessment of the organisation
using One World Trust’s key indicators.

In its final meeting, the Panel invited several presentations and discussion by
representatives of the environmental movement, including Tim Cadman, a
Ph.D. candidate at the School of Government in the University of Tasmania
who is completing his dissertation on the evaluation of global forest
governance systems22, and Saskia Ozinga, who is the co-founder of the NGO
FERN, where she is currently the campaigns coordinator.

Drawing from all these sources, and directed by the Panel, Z/Yen staff
drafted this report of its findings, and submitted it to the PEFC Board of
Directors in May, 2008.

22See Appendix H for a summary of Tim’s analysis on “Evaluating Legitimacy and Quality of
Forest Governance”

PEFC Governance Review Page 20 of 104 Final – 23 May, 2008


III. ORGANISATIONAL REVIEW
Background

Good governance in organisations has long been a study as well as a practice,


and a number of institutions have invested a great deal of effort building a
methodology for comparative research and analysis on the issue. One of the
most comprehensive and prominent internationally is One World Trust:

“The One World Trust works to


make global governance more
accountable. With its Global
Accountability Project (GAP) the
One World Trust aims in particular
to generate wider commitment
amongst global organisations to
establish and adhere to common
principles and values of
accountability in the relationship
with the people they affect; and to
strengthen the capacity of civil
society to engage in global policy
and decision making processes. The
2007 Global Accountability Report is
the fourth major report published by
the Trust as part of this project.

The Global Accountability Report is


an annual assessment of the
capabilities of 30 of the world’s most
powerful global organisations from Source: One World Trust “Global Accountability Report 2007”
http://www.oneworldtrust.com/
the intergovernmental, non-
governmental, and corporate sectors
to be accountable to civil society, affected communities, and the wider public. The Report
uses the four dimensions of the Global Accountability Framework – transparency,
participation, evaluation, and complaint and response mechanisms – as the basis of the
assessment. Over time, the Report will reassess organisations to track changes in
accountability and highlight progress.”

One World Trust’s methodology draws from a variety of sources in order to


score an organisation: interviews and internal documentation from the
organisation, secondary data on the organisation from other sources, and
expert and stakeholder input. There are numerous international and external
verification loops throughout the process that allow for qualitative input to
the quantitative assessment.

The final result is a maximum score of 100 points, with ‘High Performers’
defined as “organisations have the most consistently developed
accountability policies and management systems scoring over 50 percent in at

PEFC Governance Review Page 21 of 104 Final – 23 May, 2008


least three of the four dimensions.” In the 2007 analysis, organisations
reviewed scored as follows:

PEFC Review

While it is impossible to replicate One World Trust’s entire process


independently, publicly available materials provide insights into the criteria
they use to assess each of the four categories: transparency, participation,
evaluation, and complaint and response. The Panel requested the PEFC
Secretariat to complete a narrative self-assessment based upon One World
Trust’s methodology:

Transparency

One World Trust’s Global Accountability Indicator List (GAIL)23 assesses


whether an organisation has a specific disclosure of information policy
document outlining the commitment to respond to all information requests
within a specified timeframe with the conditions for non disclosure and
appeals process for the denial of information. The disclosure policy should be
overseen by a trained board member or senior executive and this policy
should be widely accessible to external stakeholders in several languages.

23 See: http://www.oneworldtrust.org/documents/Indicator_list_-_2008_report_-_final.pdf

PEFC Governance Review Page 22 of 104 Final – 23 May, 2008


Current PEFC Performance
Due to limited resources the PEFC Council decided to make all key
documents, as well as the full results of its PEFC’s principal work, on the
endorsement of forest certification schemes publicly available on line. This
includes the full PEFC requirements, processes, results and decisions on
assessments.

Actions to be Considered
PEFC should consider developing and adopting a disclosure and
transparency document covering the disclosure of information through both
the website as well as direct information requests, including a compliance
monitoring mechanism.

Participation

GAIL assesses the engagement of both internal and external stakeholders in


an organisation’s decision making.

Current PEFC Performance


External stakeholders: Opportunities to participate is defined within
individual documents covering specific PEFC processes e.g. standards setting
and the endorsement process. The documents are publicly available and
invitations to participate in specific consultations are disseminated through
the website and direct emailing e.g. Scheme assessments, documentation
revision and governance review etc.

Internal stakeholders: The role of members and extraordinary members in the


decision making and control of the organisation is to large extent covered by
the PEFC Council Statutes.

Actions to be Considered
PEFC should consider developing and adopting a participation policy
document outlining the opportunities for external stakeholders to participate
in PEFC processes as well as procedures ensuring meaningful participation

Evaluation

GAIL assesses the processes through which an organisation monitors and


reviews its progress against goals and objectives, feeds learning from this into
future planning, and reports on the results of the process.

Current PEFC Performance


PEFC reviews its progress against goals through actions and documents such
as the periodic reviews of PEFC requirements for certification schemes and
Governance review; strategic and annual operational implementation plans as
approved by the Board; its annual reviews and reports to the General
Assembly including financial reports.

PEFC Governance Review Page 23 of 104 Final – 23 May, 2008


Actions to be Considered
PEFC should consider developing a documented policy covering the
monitoring of PEFC’s performance against strategic and annual targets as
well as the monitoring of member performance on a range of requirements.
The engagement of external stakeholders in these monitoring processes
should also be considered.

Complaints and Response

GAIL assesses the channels and processes through which both external and
internal stakeholders can file a complaint or an appeal.

Current PEFC Performance


GAIL requirements are covered in large by PEFC’s guideline on complaints
and appeals procedures for external stakeholders.

Actions to be Considered
PEFC should consider revising its guidelines in the light of indicators in GAIL
currently not addressed. These include amongst others issues of retaliation
against internal stakeholders (members) and monitoring processes.

Recommendations by Category

The Panel has recommended that PEFC carefully review the specific
requirements for formal participation in a future review by One World
Trust24. To that end and in the meantime, other specific recommendations
will contribute to addressing gaps in PEFC’s Governance when seen through
One World Trust’s analytic methodology.

Transparency

One World Trust defines transparency as an “organisations’ capabilities for


fostering openness in their operations, activities, and decision making
processes.”

Recommendations in this Review that support greater transparency in PEFC


include:

1. Publish Governance Review


3. Review Board By-Laws (Executive Committee)
8. Apply the ‘Plain-English’ Principle
10. Update Website for Accessibility
14. Develop Annual Internal Governance ‘Check-Up’
34. Review and Clarify PEFC Complaints and Appeals Procedures

24 See Recommendation 15 – ‘Volunteer for One World Trust’s Governance Review’

PEFC Governance Review Page 24 of 104 Final – 23 May, 2008


Additional recommendations will improve transparency indirectly (e.g. Join
Stakeholder Initiatives), increasing understanding of PEFC and its work
through collaborative efforts in a variety of complementary initiatives in
sustainable forest management.

Participation

One World Trust defines participation as “fostering equitable member control


and the consistent and coherent engagement of external stakeholders in
decision making and activities.”

Recommendations in this Review that support greater participation in PEFC


include:

13. PEFC International Conference on Forestry and the Environment


16. Strategically Update Board Model
18. Recruit Additional Stakeholders into National Governing Bodies
19. Expand ‘Extraordinary Members’ into a Forum
20. Add Stakeholder Forum ‘Right of Agenda’
27. Create ‘Entry-Level’ Tier of Endorsement
30. Nominate Two Board Members from Forum
31. Nominate Members of Panel of Experts from Forum
36. Leverage Engagement with FSC
37. Give Stakeholder Forum Votes in the General Assembly

While PEFC cannot control the breadth and vigour of engagement by


potential stakeholders to its process, recommendations in this Review
substantively create a clear, substantive framework for it to take place.

Evaluation

One World Trust defines evaluation as “fostering high quality evaluations


that generate learning and strengthen accountability.”

Recommendations in this Review that support more effective evaluation in


PEFC include:

5. Delegate Operational Authority to Heads of Unit


6. Quantify PEFC ‘Impact’
14. Develop Annual Internal Governance ‘Check-Up’
17. Focus Board Role
21. Expand Secretariat Capacity
22. Tighten Independent Consultant and Panel of Experts’ Role
26. Sponsor Applied Research in Environmental Impact

PEFC is still a very small organisation compared to other institutions


reviewed by One World Trust (e.g. UNDP or Coca-Cola) and as such, much of
its evaluatory process will be embedded in its staff and bodies (i.e. the Panel

PEFC Governance Review Page 25 of 104 Final – 23 May, 2008


of Experts or the Board). Still, the One World Trust methodology sets out
important additional options that the Director-General should consider.

Complaint and Response

One World Trust defines complaint and response as “capabilities for handling
complaints from staff, partners, affected communities, and the public at large
on issues of non-compliance with organisational policies (e.g. codes of ethics,
environmental policies, information disclosure policies, etc.) and providing
them with a response.”

Recommendations in this Review that support more efficient complaint and


response mechanisms in PEFC include:

5. Delegate Operational Authority to Heads of Unit


8. Apply the ‘Plain-English’ Principle
10. Update Website for Accessibility
20. Add Stakeholder Forum ‘Right of Agenda’
22. Tighten Independent Consultant and Panel of Experts’ Role
34. Review and Clarify PEFC Complaints and Appeals Procedures

PEFC’s process involves a number of independent organisations with their


own internal complaints and appeals procedures. While PEFC has no control
over those discrete elements, it can improve the clarity and accessibility of its
own process and consider options to assist or facilitate enquiries or
complaints to reach resolution through the proper channels as quickly and
thoroughly as possible.

PEFC Governance Review Page 26 of 104 Final – 23 May, 2008


IV. ISSUES ASSESSMENT - “WHAT COULD BE BETTER?”

Any organisation faces challenges maturing at a pace to match its growth, and
systems that were sufficient at its creation and in its early years grow less and
less effective as the needs of its members and its market change.

Separate from the practicalities of accomplishing its Mission, every


organisation must also wrestle with the perceptions of how well it is governed,
organised, or carrying out its work. Frustrating as it might be at times,
‘perception is reality’ and also remains critical to an organisation’s success.

As mentioned previously, PEFC has been successful at significant growth in


both membership and certified hectarage. Nevertheless, there are specific
challenges that the organisation faces.

Governance Models

Governance can be defined as “how an organisation reaches its goals without


compromising its values.” More specifically, governance is often said to be
made up of three main components or approaches:

Formal Compliance – Direct compliance with legislation and


recommended practice, e.g. UN Statement of Good Practice, OECD
Principles of Corporate Governance and, in PEFC’s particular case,
ASBL law and IAF principles as well.

Constitutional Structure – thinking from the perspective of powers,


checks and balances, and representation. For an organisation like
PEFC, this should mean ensuring that the ‘constitution’ for PEFC
covers the following aspects of legislative, executive and judicial
powers: stakeholder inclusiveness, separation of powers, decision-
making processes, and ethical standards.

Systems Integrity – developing, maintaining and enhancing


organisational system’s to help reach the organisation’s goals. For an
organisation like PEFC, this should include: strategic planning, human
resources management (both executive and governing bodies),
transparency and disclosure, audit and accountability.

All three aspects of governance are important, and must exist within an
organisation in balance, with their priority shifting more toward one or the
other as needs and challenges arise.

In the current review of PEFC’s governance, certain ‘constitutional’ issues


were particularly noteworthy: where decisions get made, how those decisions

PEFC Governance Review Page 27 of 104 Final – 23 May, 2008


are implemented, who participates in the decision-making, and how clearly
that process is understood inside and outside the organisation.

Balance of Power (Members, Board, Secretariat)

“Separation of powers is the issue for strategy and human resources – there are not
good lines of demarcation between Chairman and Secretary-General, and spillover
between the two makes both sub-optimal. Not sure if it is structural or a function of
the individuals in those positions. The Board should make policy and the Secretariat
implement the work, prioritised and/or delegating as necessary.”

PEFC was created in


order to better support,
represent, and promote
the interests of small-
forest owners within
the broader sustainable
forest management
(SFM) movement. The
initial structure was
almost completely
association-based, with
both the organisational
legitimacy and the
operational capacity
vested in the members
themselves, with little
centralised capacity.

The Board was


Percentage of survey respondents answering ‘Most Preferable (1)’
constituted in a way to and ‘Preferable (2)’ to the question “Rank the four organization
be both broad and types illustrated based upon your opinion of which would best
flexible, as it would be advance PEFC's Mission in the future”
the primary Executive
body, dealing with the regular decision-making and policy. The Secretariat
was an administrative body, simply supporting decisions taken by the Board,
and organising regular meetings of the members.

Over time, as PEFC grew in membership and certified hectarage, the very
decentralised structure of the organisation has resulted in significant stress on
its institutions. PEFC leadership must now consider if and how that balance
of power should shift to include the Secretariat to a greater degree.

‘Bottom-Up’ versus ‘Top-Down’

PEFC, in contrast to other organisations in the field, is structured in a ‘bottom-


up’ fashion, with the emphasis in its Mission focused on local conditions in
each member state and unique, local solutions as the most effective means of
implementing its global Mission. An over-arching ‘meta-standard’ of

PEFC Governance Review Page 28 of 104 Final – 23 May, 2008


minimum common requirements in forest certification, and mutual
recognition of schemes provides a common framework and point of reference
for members.

Advantages to this approach include fostering creative solutions and


maintaining ownership in the overall process and organisation by virtue of
the subsidiarity principle25. Challenges include supporting members whose
schemes aren’t perceived to be as robust as others, or who have limited
institutional support, capacity, or budget.

Inclusiveness

“The non-participation of Environmental organisations is an issue as it gives the


wrong perception, the PEFC has to almost go ‘over the top’ to prove that it is as good
as other schemes to achieve the same acceptance.”

“PEFC is strongly dominated by conventional forestry sector, credibility would


increase if its governance would incorporate different views and people with different
backgrounds. Low representation of women in the governance is also a shame.”

PEFC was originally constituted to better represent the needs and


perspectives of small forest owners, primarily in Europe. With the early
success of the organisation, it expanded to include North American members,
and most recently, a number of countries in other regions of the world.

Percentage of survey respondents to the question “Which of the following would better enhance
PEFC’s reputation?”

While the organisation does now include Extraordinary Members


representing a variety of other institutions and companies, the core leadership

25‘Subsidiarity’ is an organisational and political term meaning that resources should be


devoted to solving problems at the level closest to them.

PEFC Governance Review Page 29 of 104 Final – 23 May, 2008


and decision-making capacity is still generally held by the original
constituencies.

With over 200 million hectares of certified forests represented by its members
and standard, PEFC’s Mission now has sufficient global ‘weight’ and
footprint to influence complementary sustainability efforts in other
organisations (e.g. United Nations Food and Agriculture Programme
(UNFAO), the Rainforest Alliance), and in other sectors (e.g. efforts to protect
bio-diversity, or combat climate change.)

Those stakeholders, though, aren’t substantively represented in PEFC


governance process, preventing PEFC from benefiting from their insights and
efforts, increasing chances of misunderstanding among organisations
engaged in reinforcing activities, and robbing them of the impact that PEFC
could have enriching and advancing their Missions as well.

Transparency

“PEFC’s language and process are completely hard to understand for anyone outside
the narrow circle of technical experts in forestry”

“The 2007 governance report was not accessible on the PEFC website. Also
documents relevant to governance (e.g. Board meeting outcomes and audits) not
obvious on the website”

Technical organisations by their definition are designed to support and


engage a discrete population with a deep understanding of a specific issue,
and fluency in a thematic vocabulary. PEFC is no exception.

As the organisation grows to include individuals with a broader range (and


depth) of backgrounds in forestry, however, efforts must be made to ensure
that core documents and other resources, public-information materials,
background and reference papers, and day-to-day administrative work is
presented in the clearest, most accessible language possible.

Similarly, over time the organisation’s internal procedures and decision-


making processes will naturally suffer from increasing ‘bureaucratic creep’.
Assumptions that internal familiarity with ‘how things somehow get done’
equate to external clarity in the public, media, or other interested parties often
results in charges of deliberate obfuscation.

As a result, PEFC needs to make special effort first to simplify, and then to
over-communicate and demonstrate its internal processes publicly and
transparently.

PEFC Governance Review Page 30 of 104 Final – 23 May, 2008


Organisational Structure and Management

In spite of clear organisational charts, logical flow-charts, and mechanical


methodologies and processes, organisations are clearly organic beasts. They
grow in unpredictable directions, rarely respond in entirely predicable
fashion to the best of intentions, and frequently fall victim to ‘the path of least
resistance’ and comfortable habit. That it happens is not a fault; failing to
respond to it and evolve however, is.

PEFC’s recent Strategic Plan26 and subsequent Strategy Implementation Plan27


are important steps in that evolution. However, existing inter-relationships
and inter-dependencies between the Members, Board, Secretariat, and other
bodies are insufficient or misaligned to accomplish those goals effectively.
This Governance Review contributes in practical terms to resolving those
challenges and focuses on PEFC internal bodies, their capacities and
interaction with each other specifically in light of the expectations that
Members place upon them.

Percentage of survey respondents answering ‘More Of’ to the question “For each of the functions
below, please tick whether you would like to see PEFC do more of, the same amount, or less of
each function (and have the necessary budget to do so)”

26 PEFC Paper 4: Adopted at the 11th General Assembly on 05 October, 2007, Munich,
Germany.
27 PEFC Paper 13: Adopted at the Board of Directors Meeting on 01 February, 2008,

Luxembourg.

PEFC Governance Review Page 31 of 104 Final – 23 May, 2008


Members’ Expectations versus Organisational Capacity

“The problem for PEFC has been the lack of resources and by that limited ability to
employ manpower. Those employed have done a very good job.”

The PEFC Strategic Plan sets organisational growth targets for the next ten
years (by 2017) of 45% of industrial roundwood capacity, 60% of total
estimated certifiable area (512 Mha), and 50% of estimated chain-of-custody
growth (32,000).

Recognising long lead-times necessary for such growth, the five-year Plan
identifies objectives in Market Access, Communications, Governance, and
Operations necessary to reach the targets. The plan also recognises that
centralised capacity must increase to implement the Strategy, with reasonable
associated budget.

There remains a gap between current and foreseen capacity in the


organisation, in particular in change-management capacity specifically related
to implementation of recommendation in this Review, overall staffing levels
necessary to reach targets set by the Strategic Plan, and clear and reasonable
levels of autonomous authority to implement decisions and act on policy set
by the PEFC Board.

Board Workload/Focus

“Currently the roles of different actors are unclear for example the board, secretariat
and executive committee, making it impossible to have effective checks and balances,
separation of powers and decision making processes.”

Because PEFC was created as a decentralised, association-style organisation


with limited capacity in its Secretariat, the Board of Directors has played a
greater role in day-to-day management and decision-making, particularly in
the past two years as rapid growth and an increasing understanding of
necessary changes prompted incremental steps toward new structures and
procedures.

With the increased clarity of the Strategic Plan, and the expectations and
resources set for the Secretariat, the Board of Directors is in a position to
reduce its technical, operational and administrative responsibilities and focus
on a more strategic and long-term role for the organisation.

In order for that evolution to happen, a new model of Board composition


must be developed, and gradually integrated as operational management
authority shifts to the Secretariat.

PEFC Governance Review Page 32 of 104 Final – 23 May, 2008


Technical Resources Insufficient

“Working with founding members is difficult, what in the world are we going to do
when we have to figure out how to include Congo or Indonesia?”

Founding members of PEFC were largely homogenous in their backgrounds


and the quality of their schemes. The next ‘wave’ of members were also
largely robust and mature in their institutions and management, resulting in
little ‘culture shock’ as the organisation expanded.

However, in the past two to three years, with the recent addition of Central
and Eastern European members, as well as other countries in Asia, Africa,
and Central/South America, existing technical capacity for review and
strengthening of institutions and schemes has become severely strained.

Looking ahead, and guided by the targets set in the PEFC Strategic Plan, it is
clear that the technical needs of new members (likely in developing countries)
in the next five years will rapidly overwhelm the Secretariat. Corollary
institutions (e.g. Independent Consultant reviews, and the Panel of Experts)
are likewise insufficient to address the demand.

Complementary Initiatives/Investments

“Promotion is very important but must be done with the NGBs. A lack of or weak
enforcement is a great danger to the organisation. Policy leadership creates
legitimacy within the broader industry. Education should be aimed at large
retail/professional purchasing organisations. Research may be better done by
someone else, PEFC needs to know it, but not necessarily run it.”

With the increasing recognition of the inter-dependence of forestry with a


wide variety of global companies, institutions, and initiatives, it has become
clear that accomplishing PEFC’s Mission will also depend upon partnerships
and alliances, international policy leadership, public and technical education,
enforcement, and research and analysis.

While these complementary efforts should not over-shadow or detract from


PEFC’s primary purpose, the capacity to leverage the potential within them is
not fully calculated into the organisation’s structure and budget.

Stakeholder Groups

“How to get the stakeholder groups which do not want to participate due to
entrenched attitudes to participate both at PEFC and national level - the real crux of
PEFC moving forward.”

“I am not sure how to best answer these questions since there must be a limit to how
many groups and interests that should be directly involved with the governance,
management and administration of PEFC. Yes, the organisation should have close
contact and a good an open dialogue with all important stakeholders. But they should
not all necessarily be actively involved in governing bodies.”

PEFC Governance Review Page 33 of 104 Final – 23 May, 2008


PEFC clearly has a core group of internal stakeholders, and the organisation
exists to meet their needs as well those of the broader movement for
sustainable forest management. As PEFC has grown, the organisation’s
impact and influence have extended into areas and issues that bring it in
contact with a larger number of stakeholders outside its current membership.

‘Low-Hanging Fruit’ Has Been Harvested

“Lack of functional general standard (compare with FSC Interim) hamper the
adoption of PEFC certification in countries with weak forestry organizations.”

By 2008, PEFC has already expanded to include members’ schemes that fit
‘easily’ into the over-arching meta-standard. And while at the moment PEFC
is the largest forestry certification organisation in the world, there is a
growing recognition that certification has reached a ‘plateau’, and the next
level of potential will only be reached by dramatic innovation.

PEFC must consider the ‘next generation’ of prospective members as


stakeholders as well, and analyse their needs, capacity, and challenges in the
context of advancing sustainable forest management in their territories.

Lack of Diverse Stakeholder Representation

“PEFC is very inclusive for the stakeholders that want to be included. The difficult
part is the relationship with the environmental organisations that do not want to be
included and support PEFC because they prefer a competitive system under their
own control. The problem is the power struggle between the PEFC stakeholders and
the environmental organisations.”

The second group of stakeholders critical to PEFC’s long-term success are not
forestry agencies and schemes at all. They are a diverse, heterogenous, non-
technical, boisterous, and demanding constellation of environmental not-for-
profits (or non-governmental organisations (ENGOs)), worker and trade
associations, large-scale timber-product retailers, and representations of
consumers, and indigenous peoples.

There has been significant debate over this broader palette of stakeholders
and their actual importance and practical impact on PEFC’s global Mission. It
is clear however that they play two critical roles: first, that they provide global
credibility, acceptability, and accountability, and second, they have the
capacity and have evidenced the will to frustrate PEFC’s work.

PEFC has moved beyond its initial base and made some effort to engage these
stakeholders at the national level by inviting/including them in National
Governing Bodies as they review, develop, and implement schemes.
Similarly, at the international level, PEFC has a body for Extraordinary
Members that includes some representatives of international stakeholders.

PEFC Governance Review Page 34 of 104 Final – 23 May, 2008


Percentage of survey respondents answering ‘Insufficient’ to the question “For the following
stakeholder groups, indicate whether their level of involvement with PEFC at the moment is
insufficient/sufficient/excessive” (minimum of 25%)

However, in the context of PEFC’s strategic objectives and the broader


contributions that PEFC could make internationally, stakeholders must be
integrated more formally into the organisation’s governance.

Levels of Integration and Influence

“Processes are in place to be inclusive with interested parties/stake-holders, but little


guidance on how to proactively engage under-represented participation”

While both sets of stakeholders – potential new members from developing


countries, and a diverse range of organisations invested in PEFC’s market –
are arguably critical to the organisation’s success, it must realistically decide
on levels of integration and influence.

It is also important to note that collaboration is not a unilateral process –


stakeholders must also be willing to engage constructively, to listen,
understand and appreciate fundamental values and aims of PEFC, and also be
willing to compromise in an effort to reach greater, common goals.

PEFC, however, must create an internal environment that makes substantive


engagement with stakeholders possible, and set an example externally
working directly to support stakeholders’ complementary interests, and in the
broader international market and community.

PEFC Governance Review Page 35 of 104 Final – 23 May, 2008


Standards

“Strength - enables consistency at the broad level and flexibility at the local level.
Weakness is that perceptions about the lowest common denominator may tarnish the
meta-standard.”

“Strength – flexibility, a myriad of species, ecosystems, political and economic


cultures. Should enable us to spread wide - where a more rigid approach will fail. But
- inconsistencies or perceived inconsistencies - this is a weakness when engaged in
political tussle. Not actually weak system, but the credibility is challengeable.
Strength outweighs the weakness.”

PEFC is an organisation that endorses forestry schemes, and maintains its


own international meta-standard of sustainable forest management. As such,
it must balance its decentralised nature (deriving its legitimacy from its
members) with an increasing demand for a more robust, centralised, and
independent organisation and staff capacity. That balance will contribute to
the responsible growth of PEFC and its standards.

Variance in Robustness of PEFC Member Standards

“Low minimum standards at the PEFC international level give broad space to move
in, but leads to big differences in the quality of national schemes”

“Over time the real standards agenda should be harmonisation and convergence.
Non-aligned bodies (e.g. FSC) will have the opportunity to criticise the 'lowest-
common denominator' approach at the national level”

PEFC’s greatest strength – the commonality of the meta-standard that retains


the flexibility of local schemes – is also arguably its greatest weakness as well.
National and international standards are merely empty frameworks, and rely
upon a wide variety of other factors to make them ‘live’.

National schemes and the institutions that develop and enforce them must
also have skilled personnel, access to expert consultants, regular education
and training, opportunities for peer review, support of national governments,
industry, and the general public, and sufficient budgetary support.

That distinction is both a caution and a mandate for PEFC: the full
organisation will remain vulnerable to the criticism and obstruction that can
be levelled against the weakest combination of individual national scheme,
and the institution responsible for implementing it, irrespective of the
strength of the overall Mission, or other truly robust schemes and institutions.

PEFC Governance Review Page 36 of 104 Final – 23 May, 2008


‘Meta-Standard’ Could Also Be More Robust

“Administrative and standards compliance (in view of the scheme endorsement) has
been improving during the past year. Still the rules and the decisions are not fully
consistent and fair to all parties. Some rules are applied strictly, whereas some
problem areas are not tackled proactively at all and any performance will go through.
Improvements on in this respect have taken place.”

“Main weakness is no requirement not to convert forests into plantations. Also, no


specific (stringent) requirements for natural forests, which are vital for climate and
biodiversity. Right of indigenous people not protected. Chain of custody not strict
enough to eliminate potential illegal wood from countries at risk. Also, field audit
should be compulsory before the certificate is issued.”

The PEFC ‘meta-standard’ represents the minimum standard which all


endorsed national schemes must meet within their jurisdiction. While
member schemes may not fall below these levels, they are encouraged to
integrate and exceed them if possible.

Percentage of survey respondents answering the question “Which of the following would better
enhance PEFC’s effectiveness?”

Like any standard, it must be updated over time as new challenges and
opportunities arise, and with the addition of new stakeholders to the process,
additional criteria are included to strengthen its holistic value. The
intergovernmental nature of this process has given it the current credibility; a
broader base including more international stakeholders will add yet more to
its credibility in the future.

‘Northern-Hemisphere’ Standard Barrier to New Members

“You will always have a defined minimum standard, however this may preclude
some members who struggle to meet the minimum but could still benefit from
membership”

PEFC Governance Review Page 37 of 104 Final – 23 May, 2008


From its inception, PEFC’s membership was primarily European countries
with generally advanced sustainable forest management schemes and well-
resourced institutions advancing their Missions. The addition of North
American schemes reinforced this standard.

However, the current comprehensiveness of that standard is a de facto barrier


to many potential new members who do not possess the budgetary and
personnel support, or institutional effectiveness to develop national forest
certification schemes, and who may be additionally challenged by wide-
spread poverty, endemic corruption, and civil or ethnic conflict.

As such, PEFC needs to somehow ‘bridge the gap’ between new members’
capacity and the PEFC meta-standard, especially if it continues to become
more and more holistic and robust.

Panel of Experts Insufficiently Robust, Clear

“I had hoped that the panel of experts was a way of simplifying the system. Now it
seems to be yet another layer of administration and bureaucracy. I understand the
good intentions, but this tends to be too much.”

While the Panel of Experts has been cited as improving the PEFC process and
adding additional legitimacy to the PEFC meta-standard, it remains a
relatively new body in the organisation and is not yet sufficiently fleshed-out
or integrated into its governance.

The Panel of Experts, and their added value, is unevenly appreciated within
PEFC, and often unclear in external perceptions. While it is clearly an
important part of the internal checks and balances, its membership, mandate,
process, role, and transparency should be reviewed along with other bodies
and integrated more solidly into the restructured organisation.

External Perceptions

“Perception is reality.”

While PEFC was a smaller organisation, and functioned primarily to support


its original, core constituencies, it could afford to remain primarily inward-
focused. With its successful growth and global prominence, it must now also
consider its image and impact from the perspective of a wide-variety of other
external audiences.

Poor Global Awareness of PEFC

“Still waiting for somebody to ask me for PEFC logs.”

“PEFC should do much more about promotion or marketing. PEFC is a brand which
known only to forest owners and sometimes to processors further down the chain.
NOT known to the end consumer.”

PEFC Governance Review Page 38 of 104 Final – 23 May, 2008


In spite of the organisation’s size, membership, and certified hectarage, PEFC
is not a globally recognised ‘brand’ compared to Fairtrade, the Rainforest
Alliance, or even FSC. The PEFC logo is valuable and important in the over-
all process, but not ‘in demand’ at the consumer level.

Part of this is simply because such consumer awareness has not been a
priority for the organisation, focusing deliberately on timber-product source
certification and chain-of-custody. It also is a challenging, expensive (and
elusive) goal, with popular opinions mercurial and hard to influence
consistently and globally.

While PEFC has strong, well-informed support in some quarters (e.g. small-
forest owners, commercial timber-product wholesalers), its reputation among
other groups is less favourable, or (almost as dangerous) unknown or
misunderstood.

“PEFC is Industry-Driven”

“It is a concern that there is a perception outside of PEFC that it is an industry body.
It needs to show that all stakeholders are involved.”

“PEFC is seen as an industry scheme designed to allow business as usual. To gain


credibility it needs to involve its critics and win them over. This process would also
ensure that any weaknesses in the system would be exposed and righted.”

One of the most common misconceptions of PEFC is that it is almost solely


industry-driven, which is understood to mean representing primarily
commercial interests, aimed at maximising profits at the expense of
sustainability, and aggressive toward the environmental movement, labour
organisations, and the interests of indigenous peoples.

Unfortunately, given the organisation’s origins and current membership, this


misperception will be slow to change. However, the relatively ‘blank slate’ of
impressions within a large portion of the international community invites
efforts by PEFC to proactively communicate its message effectively and allow
those communities to further develop a broad, accurate and positive
awareness.

‘First Impressions’ are Opaque

“It would help if PEFC was able to demonstrate this more transparently through its
website - for those not directly involved it is hard to gauge.”

“How do you think that it would be possible to know anything about these issues, if
one is not constantly working within PEFC organisations?”

Outside the PEFC ‘family’, popular understanding of certification and


international standards is sketchy at the very best, and comprehension of the

PEFC Governance Review Page 39 of 104 Final – 23 May, 2008


complexities of sustainable forestry management even more rare. Members of
the public, the media, environmental, social and other NGOs base their first
impression of PEFC on what they hear from other people, and a quick glance
at the website.

Unfortunately, the most common result of that combination is a muffled


confusion akin to the feeling one gets reviewing the instructions to an
unfamiliar piece of electronic equipment or office software – vague confidence
that it probably works, but little idea what the most important things to know
are for a normal person, and confusion about where best to even start figuring
it out.

As PEFC’s work and influence have grown – in some ways far beyond its
original constituency – a far larger global population seek the organisation out
to understand its Mission, process, and impact. The sources to which they
look must be free from technical jargon, easily understandable, accessible,
exciting, engaging, and a catalyst for them to communicate that message to
other people accurately.

Other Issues

The survey and interview process for this Governance Review was semi-
structured and designed in a way to respond to the Panel’s mandate, but also
encourage other feedback that participants felt was similarly important but
not covered in the framework questions.

Much of the open-ended or “Other” feedback reinforced comments and


findings in other issues, but several significant themes bear noting
independently.

Organisational Conflict – FSC, ENGOs

“PEFC personnel have been kicked over and over by FSC and environmentalists –
it’s no wonder that they’re defensive”

“Somehow, the organisation has to learn to take the high road with its worst critics,
‘killing them with kindness’ (especially when they don’t deserve it!)”

It is no secret that PEFC was formed to represent communities that did not
feel sufficiently supported by FSC, and that the two schemes have since then
been in varying degrees of conflict and competition.

PEFC has also been the subject of vary degrees of criticism from a variety of
environmental NGOs over endorsed schemes, perceived lack of stakeholder
diversity, and other issues.

Much effort has been made to reach out to both groups constructively, both
proactively and in response to specific incidents, but a strong sense of

PEFC Governance Review Page 40 of 104 Final – 23 May, 2008


organisational pain and defensiveness still remains, and clearly colours
discussions about FSC and ENGOs, as well as organisational reactions
publicly to them.

‘Flash-point’ Issues

ENGOs’ criticisms made to this Review have coalesced around a number of


issues they identify as failings internal to the PEFC process, namely logging in
old-growth (and high conservation-value) forests, and response to alleged
breaches at the national level within PEFC endorsed schemes28.

While this Review does not have the resources to research fully the
circumstances and considerations of these or other specific local or national
issues, it does bear noting that ENGOs complaints about these subjects are
sufficiently broad-based and contentious to create a barrier to their current or
future participation in PEFC.

‘Next Generation’ Challenges

PEFC is now a global organisation playing at the international level with


influence (and hence, responsibility) significantly exceeding its initial Mission.
As such, it needs to recalibrate its work to include responses to ‘next
generation’ challenges such as sustainable forestry’s role in climate change,
and international development.

PEFC also needs to expand its role on forest issues, including the use of
chemicals or poisons, genetically modified organisms, threats to tropical and
old-growth forests, biodiversity, and monoculture planting practices, among
others.

The sustainable forestry sector is constantly evolving, changing at a pace that


PEFC must somehow match and when it can, advance the sector
constructively. In the next five years (covered by its strategic plan), that will
mean tactically building capacity to craft good policy on complex and non-
linear problems, and the persuasive skills to argue their implementation.

28See also “Next Generation Challenges” in the following paragraphs for other areas of note
identified as priorities for PEFC’s governance process to review and address.

PEFC Governance Review Page 41 of 104 Final – 23 May, 2008


V. OPTIONS - “WHAT COULD WE DO ABOUT IT?”

The Governance Panel considered a wide range of options as it reviewed


issues and challenges facing PEFC. Some were clearly not viable, but still
helped to focus critical analysis and creativity on innovative and inter-
dependent solutions better suited to the issue in question. All are included
for transparency, and in the event that those not currently recommended
might provide some tangential value, or options at a later date.

Quantitative results from the survey, and qualitative responses in the


interviews contributed significantly to the Panel’s consideration as well, and
are noted specifically in each of the following sections:

• Improving external perceptions of PEFC’s governance.


• Making the PEFC organisation more effective.
• Ensuring that PEFC’s rules and standards are simple and easy to
understand; implement and operate.
• Ensuring that PEFC robustly implements and continuously monitors
its own requirements at all levels.
• Removing obstacles to dialogue with international ENGOs.

External Perceptions of PEFC

PEFC has identified its public and industry reputation as being a priority for
improvement as part of this Governance Review. Perceptions of PEFC fall
into six broad categories: first, positive (which should be reinforced); second,
neutral and informed (an issue of marketing); third, neutral and uninformed
(an issue of education); fourth, critical and informed (an issue of engagement);
fifth, critical and uninformed (an issue of education again); and sixth,
unaware (an issue of introductions.)

Focus On - Transparency and Public Information

“PEFC currently not marketed as visibly as FSC and has not been taken up by the
retailers as such. PEFC needs to ensure that everyone fully understands the impact
of the work it is doing and the lives that are improved through their work.”

PEFC could continue functioning in much the same way, but dramatically
increase its communication efforts, recognising that a significant amount of
neutral, negative, or no perception of PEFC is merely a matter of the
organisation’s technical nature and low public profile.

Simply putting the work and process of PEFC in accessible terminology


would go a long way to increasing an understanding of the organisation.
Communicating the positive impact of certified sustainable forests on the

PEFC Governance Review Page 42 of 104 Final – 23 May, 2008


environment, ecosystems, public and social health, poverty and agriculture
would influence other audiences.

Focus On – Changing Critics from Within

“We get upset that ENGOs aren’t begging to work with us – perhaps we need to go
work with them on their projects and set a good example”

PEFC cannot solely rely upon its audiences to make the effort to understand
and appreciate the organisation’s wider contributions, and could also take the
message to communities that it would like to influence.

Proactively joining stakeholders’ initiatives, contributing to thought


leadership within the industry, conducting direct education in target
communities, or developing and contributing materials to formal educational
programmes in forestry and environmental science would gradually change
perceptions of PEFC.

Focus On – Inclusion to Transform the Organisation

“In general I would say that the national level should have a broader representation
than the international level. The national representation will however depend on the
local conditions. On the international level the representation will depend upon it
here is a real international representation possible from the relevant stakeholder
groups when PEFC and forest based certification is concerned.”

PEFC can also ‘bring its critics into the fold’, and seek to change negative
opinions by changing itself to some degree and making stakeholders part of
the solution by giving them an investment in the organisation and its success.

This can be done in stages, gradually opening PEFC up to engagement by


groups who are affected by its work, while retaining control over key
processes and decisions during a period of mutual confidence-building and
negotiation of roles, rights, and responsibilities.

Options - External Perceptions of PEFC

Specific Themes considered by the Panel include:

Keep It Simple PEFC could create a new ‘front-end’ image on it’s web-site,
materials, and public relations, specifically aimed at the non-
technical audience, media, and other international organisations
Advantages - ‘Opens’ the organisation to the widest possible audience; reinforces
plain speech and a focus on tangible impact of PEFC’s work;
encourages links to PEFC’s site and work from other organisations
Disadvantages - None directly; will need a clear path for existing PEFC technical
materials so current users are not inconvenienced or confused

Outcome Recommended

PEFC Governance Review Page 43 of 104 Final – 23 May, 2008


For example, see 4. Quantify PEFC 'Impact'
recommendations: 6. Apply the 'Plain-English' Principle
9. Update Website for Accessibility

Push the Logo PEFC could aim for broad global brand recognition through
investment in its logo with partners, new alliances aimed at
marketing the PEFC brand, and large-scale advertising
campaigns
Advantages - Broad public recognition could multiply influence in policy-making,
membership development, and fund-raising; would contribute to
combating illegal logging
Disadvantages - Very expensive; would require negotiated agreements with multiple
partners; difficult to guarantee broad public understanding of the
brand; runs risk of ENGO campaign against the PEFC logo

Outcome Not Currently


Recommended

Lead by Example PEFC could also let its actions ‘market’ itself, both internally by
making the organisation more transparent, but also by reaching
out to stakeholders and tactically supporting their efforts
Advantages - ‘Opens’ the organisation to the widest possible audience; reinforces
plain speech and a focus on tangible impact of PEFC’s work;
encourages links to PEFC’s site and work from other organisations
Disadvantages - Will require additional personnel and budgetary resources; PEFC
must be willing to compromise at times when working with other
organisations

Outcome Recommended

For example, see 1. Publish Governance Review


recommendations: 11. Join Stakeholder Initiatives
17. Expand 'Extraordinary Members' into Forum

PEFC Effectiveness

Effectiveness is success in producing a desired effect or result; in PEFC’s case,


‘to give society confidence that people manage forests sustainably.’

PEFC can focus on a number of different levels when improving processes,


management, and quality control, utilising improved systems (how things get
done) and standards (how well they get done.)

Focus On – Standards and Enforcement

“Wood, timber and forest products are in an international trade. The raw materials
and the products floats independent of national borders makes it absolutely necessary
to have some harmonisation. But on the other hand the nature is not identical. The
strength of today’s system is to unify these crossing interests and balance them. The
weakness is the difficulty to create the right balance and that the system tends to be
complicated.”

PEFC Governance Review Page 44 of 104 Final – 23 May, 2008


As a member-based and technical organisation, PEFC could invest
significantly in both national and international (meta-) standards, as well as
develop mechanisms for monitoring and enforcement; essentially becoming
the undisputed gold-standards of forestry.

This would be a case of ‘focusing inward’ and refining PEFC’s core purpose,
and investing resources primarily in the organisation’s technical capacity, and
its members’ ability to meet and advance the standard.

Focus On – Operations and Administration

“PEFC needs more ‘hands on deck’ to do the work and support the existing fulltime
staff”

Fortunately, PEFC is an organisation fallen victim to its own success, and a


number of current and perceived problems with effectiveness could be
remedied with a more robust Secretariat and investment in its operations and
administration.

The mutual-recognition process, Board of Directors, and membership


requirements would remain the same, but be better supported with a broader
range of initiatives, staff and resources.

Focus On – Members and Board

“Top leadership of PEFC should include representation of international well known


opinion leaders, policy makers or authors”

Another approach would be to focus on the ‘high-level’ governance and


invest significantly in membership and the Board of Directors, aiming to gain
the greatest possible market-share of certified forest globally, and recruit the
most influential individuals in the forestry industry, environmental
movement, and international policy arena.

Essentially, this approach emphasises scale, volume, and political sway to


accomplish the organisation’s goals, lead alliances when they are
advantageous, and define policy nationally and internationally.

Options - PEFC Effectiveness

Specific Themes considered by the Panel include:

Adopt a Federal PEFC could centralise its decision-making process through


Structure permanent representation of members and stakeholders in its
International Headquarters, and rely upon Members to
implement decisions in their own jurisdictions
Advantages - Very clear and powerful decision-making process; creates much more
unified organisation to interact with potential partners, funders, and

PEFC Governance Review Page 45 of 104 Final – 23 May, 2008


competitors; reduces variability in implementation quality
Disadvantages - Counter to original purpose of PEFC; very resource and budget
intensive; potentially lose the innovation and applicability of the
subsidiarity principle

Outcome Not Currently


Recommended

Restructure PEFC could reform its Board of Directors to focus it on high-


Board of level strategy and advancement, opening it to a broader range
of personnel, skills and representatives from various
Directors stakeholders
Advantages - Leverages the comparative advantage of Board-level personnel;
increases internal and external buy-in and confidence; matches
Board form to revised function detailed in PEFC Strategic Plan
Disadvantages - Delay in impact of this option as restructuring will only happen as
current Board members’ terms expire and are replaced

Outcome Recommended

For example, see 14. Strategically Update Board Model


recommendations: 15. Focus Board Role
35. Streamline Board, General Assembly Meetings

Build Secretariat PEFC could augment its Secretariat with additional staff,
Capacity focusing on technical assistance to members and potential
members, marketing, fund-raising, outreach and partnerships
Advantages - Would expand the reach of the organisation; increase quality of
support to members and prospective members; improve public
relations and partnerships/alliances
Disadvantages - Will require additional funding

Outcome Recommended

For example, see 3. Delegate Operational Authority to Heads of Unit


recommendations: 20. Tighten Independent Consultant, Panel of Experts'
Role
26.Provide Capacity-Building Assistance

PEFC's Rules and Standards

PEFC is an organisation that endorses standards, and as such, its primary


purpose will be to improve, advance, and expand the acceptance of PEFC
endorsed standards as widely as possible in forestry, whether in industry and
commercial, policy and international, scientific and academic, or non-profit
and social sectors.

PEFC Governance Review Page 46 of 104 Final – 23 May, 2008


Focus On – National Standards and Quality

“Technical assistance is very, very important; there are problems in interpretation of


PEFC rules/regulations/practices at the local level. More over it must be taken into
account that in each country there local laws/regulations. The compromise shall be
found in a lot of issues.”

To that end, PEFC could focus more on the national standards of its members,
helping them through a peer-review process with significant technical
assistance from an augmented Secretariat.

PEFC was established as a member-based organisation, and with the recent


addition of new members, as well as the anticipation of new members in
developing countries who have less rigorous schemes and institutions (or
none at all), services to members assisting them to meet, maintain, and
advance beyond the PEFC meta-standard will be increasingly necessary.

Focus On – PEFC Meta-standard and Quality

“Strengths of the meta-standard - one common set of rules and regulations; the same
requirements to all the organisations; the standard reflects the best practice; easy to
use and to compare. Weaknesses - the same requirements cannot be used for different
countries; lacks procedures of defining of compromise in case of conflicts between the
"meta-standard" and the local legislation must be envisaged”

Alternatively, PEFC could continue to focus on the international meta-


standard that all members must meet, clarifying existing elements, improving
technical and environmental criteria, and expanding the organisation’s
capacity to train experts to assess national schemes.

PEFC could also seek to expand the recognition of its meta-standard globally
(e.g. becoming the “Fairtrade” of sustainability), and engage with national
and international leaders to push for broader use of it in as the basis of
development and environmental policy in forestry.

Focus On – Additional or Parallel Criteria

“Big gap in PEFC is a governance that guarantees some degree of power to


environmental groups, and thus can attract them”

Another option would be to augment the PEFC meta-standard incorporating


recommendations and interests of key PEFC stakeholders, for example
including additional criteria on environmental impact, biodiversity, and
sustainability, or labour and social/indigenous standards.

While it would increase the difficulty of meeting or renewing membership


criteria, it would enrich PEFC’s reputation with key stakeholders and the
public, and expand the organisation’s influence.

PEFC Governance Review Page 47 of 104 Final – 23 May, 2008


Options – Rules and Standards

Specific Themes considered by the Panel include:

Increase PEFC could improve the comprehensiveness of the meta-


Richness of standard by including a broad range of international
stakeholders in its on-going development process
Meta-Standard
Advantages - Adds both applicable content and legitimacy from complementary
stakeholders’ perspectives; increases field accountability as well
through global stakeholder engagement
Disadvantages - Opening discussion on the meta-standard to broader audience will
necessarily complicate process/negotiation as well; technical
resources to review new schemes will have to be augmented
proportionally

Outcome Recommended

For example, see 11. Join Stakeholder Initiatives


recommendations: 16. Recruit Stakeholders into National Governing
Bodies
17. Expand 'Extraordinary Members' into Forum

Assist Members PEFC could build the capacity to provide technical assistance to
to Meet members and prospective members to assist in meeting
requirements of the meta-standard for endorsement
Standard
Advantages - Increases the quality of proposed schemes before review; increases
institutional strength of forestry agencies in developing countries,
supports broader policy aims in sustainable forest management
Disadvantages - Must increase ‘firewall’ between technical assistance to a
prospective member and expert review of the Scheme; will raise
PEFC’s profile internationally making it more susceptible to critical
review/risk

Outcome Recommended

For example, see 19. Expand Secretariat Capacity


recommendations: 20. Tighten Independent Consultant, Panel of Experts'
Role
25. Create 'Entry-Level' Membership Tier

Adopt Common PEFC could incrementally seek to create a common national


National Standard standard among members

Advantages - Creates a more robust common level of forest management; removes


criticism of Scheme variability; increases cohesiveness and influence of
PEFC
Disadvantages - Eliminates flexibility to meet unique local needs/conditions; very
difficult to agree on practical common standard; challenges
fundamental purpose of PEFC

Outcome Not Currently


Recommended

PEFC Governance Review Page 48 of 104 Final – 23 May, 2008


Implementation and Monitoring of Governance

Governance is the means by which an organisation achieves its goals without


compromising its values, and should be a self-improving process, not a self-
perpetuating one, and must be built into any organisation at multiple levels,
in both formal and informal ways.

Focus On – Centralising Decision-Making Power

“Associations tend to display a wide range of quality and consistency among the
members and their commitments to the organisation, leading to a more cumbersome
organisational structure. Over time, a growing body of knowledge and de facto
authority has developed in the PEFC Secretariat, though. The challenge is in
balancing that so that no ones vested interest is being undermined, yet there's a
functional capacity, not necessarily by fewer decision-making bodies, but perhaps
authority coupled with more frequent dialogue with the Secretariat enabling a
nimble role.”

PEFC has always been a highly-decentralised organisation, with the decision-


making authority vested primarily in its members. As such, the
organisation’s reach is limited, and governance is informal and often
personality- and issue-driven.

Centralising additional decision-making power within PEFC and formalising


governance procedures would both invest the organisation with additional
checks and balances, increased transparency, and greater public legitimacy.

Focus On – Open Membership to All Stakeholders

“After the very successful growth of PEFC in the last 5 years, it might be a good
time to try to involve new/more groups in PEFC certification (e.g. through
Extraordinary membership and increased activities for/with Extraordinary
Members)”

Governance mechanisms can also include broader participation by groups


with diverse interests, each of which contributing to keeping a balance of
power within the organisation.

PEFC could open its membership to additional stakeholders beyond the scope
of ‘Extraordinary Members’ and engage them in the standard-setting and
decision-making process, increasing the organisation’s reach, as well as its
broader legitimacy.

Focus On – Trouble-shooting: Engage and Broker

“Enforcement - seeing the PEFC out at national level and working with stakeholders
at national level to address any perceived grievances of implementation of the
objectives of the PEFC.”

PEFC Governance Review Page 49 of 104 Final – 23 May, 2008


“Complaints and appeals procedures are often very weak (people don't know who to
complain to and how)”

PEFC could aim for the role of ‘honest broker’, and actively seek out a broad
range of stakeholders in sustainable forest management to identify issues and
concerns about good governance, and work to broker agreements with them
addressing the issues.

By inviting criticism, PEFC both creates an opportunity to clear the air of


persistent conflict, but also negotiate partnerships that could significantly
advance its mission.

Options – Implementation and Monitoring of Governance

Specific Themes considered by the Panel include:

Establish PEFC PEFC could create an independent Ombudsperson reporting


Ombudsperson only to the General Assembly who is empowered to receive,
investigate and propose redress to infringement of the PEFC
process
Advantages - Would create a point-of-contact for any criticisms of national or
international violation of standards; increases accountability and
transparency; embodies commitment to multi-stakeholder process
Disadvantages - PEFC does not have mandate or capacity to address national
challenges; very difficult to support necessary field-work/assessment
of claims, large administrative support/budget necessary, too much
power being vested in one place

Outcome Not Currently


Recommended

Increase PEFC could both make its work more transparent to


Transparency, external audiences, and create substantive opportunities
for critics to become engaged stakeholders and invest in
Simplify PEFC the process
Process
Advantages - Add value in multiple areas (public relations, membership,
accountability, fund-raising); improve public awareness and opinion
of PEFC; increase PEFC’s ‘weight’ in the international community of
policy-makers
Disadvantages - Danger of unduly simplifying a necessarily complex issue and
process; addition of additional stakeholders must not paralyse
organisation

Outcome Recommended

For example, see 9. Update Website for Accessibility


recommendations: 28. Nominate Two Board Members from Forum
29. Nominate Member of Panel of Experts from Forum

Initiate Governance PEFC could set up both internal and external reviews of its
Mechanisms governance to take place on a regular basis, with results
published in its annual report and publicly available on its
web-site

PEFC Governance Review Page 50 of 104 Final – 23 May, 2008


Advantages - Increase transparency, quality and accountability; improve public
perception, reduce criticism; identify new opportunities for growth
Disadvantages - Risks putting too much emphasis on ‘polishing’ the process;
multiple measures for ‘good governance’ will conflict on priorities

Outcome Recommended

For example, see 7. Volunteer for One World Trust's Governance Review
recommendations: 13. Develop Annual Governance 'Check-Up'
18. Add Stakeholder Forum 'Right of Agenda'

“Buy-in" from PEFC's Existing Stakeholders

“Any change in governance structure should strongly focus on keeping current


supporters ‘on board’”

No organisational change process can succeed without the active


understanding and endorsement of its existing staff and stakeholders. While
part of this Governance Review is focused on what the organisation could
become to new members and external communities, it must first seek to
provide value and efficiency to PEFC’s current members and constituencies.

Focus On – Increase Support and Value to Members

“Compared to the good communication channels between the PEFC Council and
each NGB, there seems to be little horizontal communication among NGBs for
sharing knowledge, information know-how and experiences for promotion of PEFC
in the markets.”

Members join an association for two reasons: to advance an agenda together


more effectively than they are capable of advancing it alone, and to benefit
from collective resources available only at scale. Growth and change in that
association must increase the return on one or both of those investments.

PEFC could increase support and value to members by collecting and


disseminating ‘best practices’, building a database of technical experts and
key contacts globally, hosting an image library, drafting marketing materials,
creating a procurement database, conducting training, providing comparative
budget templates, offering support to increase market share, and other
services.

Focus On – Expand Market Share

“To serve its purpose, PEFC should remain an industry based system”

“If the goal is market access, and the market is represented by the community of
stakeholders, their engagement makes PEFC more effective”

PEFC Governance Review Page 51 of 104 Final – 23 May, 2008


One of the original purposes for PEFC was to represent the interests of small
forest owners, both protecting sustainability and helping to create a market
for certified forest products.

PEFC could invest in both the chain-of-custody certification programme, as


well as marketing capacity to promote PEFC forest products internationally
with large-scale timber retailers, pulp and paper industries, and finished-
goods manufacturers.

Focus On – Simplify, Clarify, and Improve Efficiency

“Very complex governance structure – ‘a lot of moving parts’ - that could be very
burdensome for the organisation. Streamlining would be useful, could be dragged
down by too many players who don't understand the details.”

PEFC is a technical organisation, and since its creation has accumulated a


significant volume of processes, rules, and guidelines. Every organisation
needs a thorough ‘house-cleaning’ on a regular basis, with standard
procedures reviewed for applicability, efficiency, and clarity.

PEFC could conduct an administrative audit, surveying members about the


‘ease-of-use’ and effectiveness of most commonly used processes, simplifying
or eliminating redundancy as necessary.

Options – ‘Buy-In’ from Existing Stakeholders

Specific Themes considered by the Panel include:

More ‘Value for PEFC could increase support to members as part of its re-
the Money’ organisation, providing additional resources, technical
assistance, training and other services
Advantages - Richer communication with and between members; increases
confidence and morale; more appealing to prospective members
Disadvantages - Limited resources will require difficult decisions of budgetary
priorities; funds could be used for identified ‘external’ priorities

Outcome Recommended

For example, see 19. Expand Secretariat Capacity


recommendations: 23. Increase Support to Members
27. Post Position Descriptions for 'Seconded' Staff

Limit Stakeholder/ PEFC could focus on its core constituency – forest owners –
External Influence and increase communication with other stakeholders, without
necessarily giving them additional direct influence in the
organisation
Advantages - Keeps organisation focused on founding principles and objectives;
invests resources in quantifiable and familiar projects and process
Disadvantages - Increases risk of (potentially debilitating) political/social criticism;
cuts off access to resources, credibility, and innovation in other
communities

PEFC Governance Review Page 52 of 104 Final – 23 May, 2008


Outcome Not Currently
Recommended

Focus on New PEFC could invest heavily in expanding membership and


Members endorsed schemes, creating a progressive certification and
setting significant targets for global hectarage
Advantages - Keeps organisation focused on fundamental purpose; leverages
comparative advantage; seizes market opportunity of developing
countries and forests
Disadvantages - Ventures into difficult and largely unfamiliar territory (conflict
zones, corrupt governments/institutions); risk of imbalance between
quantity and quality

Outcome Recommended

For example, see 19. Expand Secretariat Capacity


recommendations: 25. Create 'Entry-Level' Membership Tier
26.Provide Capacity-Building Assistance

Dialogue with Environmental Non-Government Organisations (ENGOs)

ENGOs have significant potential to multiply or diminish PEFC’s impact.


They are highly networked, intensely driven, and often have the active
support of thousands of people who can be leveraged directly on issues, or to
make or change national or international policy.

They also can lend credibility, acceptability, and accountability to PEFC’s


work, and cannot be ignored now that PEFC has grown to be the largest
forestry certification scheme in the world.

Focus On – Marketing Push

“Education - PEFC currently not marketed as visibly as FSC & has not been taken
up by the retailers as such. PEFC needs to ensure that everyone fully understands
the impact of the work it is doing and the lives that are improved through their
work.”

Part (though not all) of PEFC’s ‘trouble’ with ENGOs is a product of


miscommunication, misunderstanding, and mistrust.

While not addressing political and technical differences, PEFC could design
and implement a marketing strategy designed to re-present the organisation,
correct misinformation and lay the foundation for new or renewed dialogue.

Focus On – Identify and Partner with One Key ENGO

Alternatively, PEFC could identify one global ENGO and negotiate a full
partnership with them, granting some rights in the PEFC standards and

PEFC Governance Review Page 53 of 104 Final – 23 May, 2008


decision-making process in exchange for collaboration on certification and
representation in the broader environmental movement.

Working with a dedicated ENGO (as opposed to being forced to maintain


dynamic relationships with multiple ones) would allow PEFC to focus limited
resources and build a deeper, more substantive relationship.

Focus On – Open Membership to ENGOs

“It is clear to improve acceptance of PEFC above a certain threshold it must involve
Environmental groups - equally the Environmental groups cannot continue to
ignore PEFC.”

PEFC could give ENGOs the right to take a formal role in PEFC as Associate
Members with some voting rights (a proportional system of collective votes,
for example.)

There is a clear value to bringing them ‘into the family’, both from a
substantive standpoint, as well as from a marketing view.

Options – Dialogue with ENGOs

Specific Themes considered by the Panel include:

Grant Rights and PEFC could create space, incentives and responsibilities for
Responsibilities ENGOs within the organisation and its processes, inviting
criticism but only when it is paired with suggested upgrades
and engagement
Advantages - Recognises that PEFC is imperfect but improving; increases
transparency, holistic quality, and resources; creates opportunity for
PEFC to ‘tilt the playing field’ of international forestry policy in its
favour
Disadvantages - Will complicate and slow PEFC process to incorporate broader
input and engagement; will be a challenge to new members who are
also targets of ENGO criticism for other issues

Outcome Recommended

For example, see 16. Recruit Stakeholders into National Governing


recommendations: Bodies
17. Expand 'Extraordinary Members' into Forum
28. Nominate Two Board Members from Forum

Join the PEFC could identify global priorities of ENGOs and join them at
Common Battles the global level

Advantages - Proves PEFC’s greater interest is the common good; provides


opportunity for education of broader audiences; contributes to better
PEFC understanding of evolving needs for the organisation’s meta-
standard
Disadvantages - Will require resources and investment of political capital that
otherwise could be invested in members directly; greater political

PEFC Governance Review Page 54 of 104 Final – 23 May, 2008


risk at international level

Outcome Recommended

For example, see 12. PEFC International Conference on Forestry and the
recommendations: Environment
21. Launch Tropical Initiative
38. Lead Forestry Policy on Carbon

Engage Separate PEFC could identify an international environmental umbrella


ENGO Platform organisation/platform/forum and engage ENGOs there
without directly bringing them into the PEFC process
Advantages - Increases communication and engagement without dramatic costs or
organisational changes to PEFC; access to broader range of ENGOs
within an established framework
Disadvantages - Limits positive, proactive contributions to PEFC were ENGOs directly
engaged; little increase in transparency or perceived accountability

Outcome Not Currently


Recommended

PEFC Governance Review Page 55 of 104 Final – 23 May, 2008


VI. RECOMMENDATIONS - “SO WHAT NOW?”

In considering options, and in line with its Mandate29, the Panel gave
preference to recommendations that:
• directly responded to one or more discrete elements of its mandate;
• should have broad support among existing and potential stakeholders;
• sit largely within the purview of PEFC itself (without significant
dependencies upon external actors);
• fit logically into an incremental process of improvement;
• leads to enhanced credibility of the PEFC scheme;
• would be financially responsible, reduce costs, or contribute a new
funding stream for the organisation; and
• contributed to addressing multiple issues at once.

Phase One – Get Resourced

Phase One recommendations are ‘immediate-impact’ options, identified both


for their relative ease of initiation/implementation and their role as the basis
for subsequent recommendations. Recommendations in this phase also
include the first steps in longer-term, more complex initiatives.

1. Publish Governance Review

Transparency has been identified as a priority for PEFC, as such, an important


first step would be to publish this Review prominently on the PEFC web-site,
and to publicise it widely.

Also publish the Executive Summary separately for ease of review, and add a
link to a ‘Comment’ form or E-mail. Receipt of comments should be
acknowledged promptly (e.g. within three business days), and collected for
review as part of the annual governance process.

2. Establish International Headquarters

In line with its expanded responsibilities and capacity, rename the Secretariat
the “PEFC International Headquarters”, and re-title the Secretary-General the
“Director-General” of the organisation.

The Director-General should research possible international and professional


fora that PEFC could join, both to contribute to broader understanding of the
organisation’s Mission, but also to provide a network of peers and resources
that may prove helpful in growing membership and implementing changes
recommended in this document.

29 See section I “Introduction” for the full mandate of the Panel

PEFC Governance Review Page 56 of 104 Final – 23 May, 2008


3. Review Board By-Laws (Executive Committee)

Review, clarify, and revise existing procedures on the Board’s Executive


Committee for transparency (for example, how the Chair and Vice-Chairs are
selected, what decisions are within their purview, when meetings take place,
how minutes are distributed to the full Board.)

4. Update Staff Position Descriptions

“If the Secretariat’s going to do all this, they better have the right people, and the
right people in the right jobs”

Bring position descriptions of staff in line with responsibilities anticipated in


the Geneva office, and develop draft position descriptions for roles likely to
be needed in the next twelve months.

Staff position descriptions may be posted along with staff photos and
biographies on the PEFC web-site to allow interested parties a more complete
understanding of various roles and responsibilities of key staff.

5. Delegate Operational Authority to Heads of Unit

Give responsibility and authority to Heads of Unit to oversee relevant


recommended changes in each of their respective areas, overseen by the
Director-General.

Given subsequent recommendations, the Director-General will be required to


focus much more on organisational representation, building partnerships and
alliances, and engaging various stakeholders. Management of Heads of Unit
will have to be balanced with this expanded external advancement of the
organisation.

6. Quantify PEFC ‘Impact’

“Yes, but what does 200 million hectares really mean?!?”

Begin to identify the impact of PEFC’s work in terms of environmental, social,


economic, or political impact on sustainable forest management and non-
commercial interests (for example, “Every hectare of PEFC certified
deciduous forest removes X tonnes of carbon dioxide from the atmosphere
every year…”)

Stakeholders to PEFC could also be engaged to contribute to this process in


the areas of their expertise (e.g. an NGO involved with indigenous
populations could provided content and arguments for certified forestry’s
positive impact on that constituency.) A more direct understanding of PEFC’s
contributions will be critical for improved public relations and brand
recognition, fund-raising, and membership development.

PEFC Governance Review Page 57 of 104 Final – 23 May, 2008


7. Commit to the ‘High Road’

Develop an internal policy, with guidance and draft materials/text for PEFC
leadership, staff, and members that sets out an organisation-wide principle of
universally constructive response to criticism; the most strident or vitriolic the
attack, the more gracious and engaging the response should be, consistently
across the organisation.

8. Apply the ‘Plain-English’ Principle

“The whole system is very complicated, not easy to understand by layman. Public
relations work should be strengthened for general public”

Create versions of the most frequently accessed PEFC resources (for example
“Elements of credible forest certification schemes”) free from expert language
for the non-technical reader, and highlight PEFC efforts in broader
communities more prominently (namely content currently located under “Did
you know?” on the web-page);

9. Promote a ‘Management-Summary’ Practice

Ensure that PEFC documents, reports, and technical documents are prefaced
by a short, easy-to-understand summary of the key points, and where
applicable include a recommendation for decision-making;

10. Update Website for Accessibility

Redesign the PEFC web-site to have four distinct, dynamic, and well-
supported functions:
• First – PEFC’s customers, licensed users of the logo, and
consumers of PEFC certified products;
• Second - general information for the public, media, civil society
organisations, and the environmental movement;
• Third - technical information for forestry agencies, certification,
accreditation, and standards specialists, as well as the
academic/ scientific community; and
• Fourth - a ‘members-only’ section with discussion forums, PEFC
resources, organisational updates, and opportunities for peer-
based networking and information-sharing.

In addition, the web-site needs to improve the ‘Frequently Asked Questions


(FAQ)’ (currently published as “Did You Know?”) and add a ‘What Do I Do
If…’ section both to cover the most common issues visitors will have, but also
as a resource for PEFC Members on the organisation’s position and
perspective on a variety of subjects (‘High Conservation Value’ forests,
contributions of certified forest to carbon mitigation, and so on).

PEFC Governance Review Page 58 of 104 Final – 23 May, 2008


11. Invest in Marketing Capacity

“PEFC needs greater resources in its management to serve the corporate policy
requirements of advancing its brand.”

“At this point it is about awareness. The elements are strong at this point. They will
evolve with maturity of the system as a whole. Inform, Persuade, Purchase,”

PEFC has a dynamic and engaging story to tell, and needs the capacity to
promote the organisation globally to the media, potential new members, the
general public, and stakeholders;

PEFC should also explore parallel opportunities for promoting the


organisation’s work and value-added, including targeted sponsorship of
events, research, or initiatives, mutual endorsement of complementary efforts
in environmental sustainability, or donations to key stakeholders and
partners.

Any Marketing plans should also consider, engage, and build upon PEFC
Promotion Initiatives globally, as well as be leveraged through them, and
coordinated with National Governing Bodies as set down in the PEFC
Strategic Plan, including national schemes in a unitary certification model30.

12. Join Stakeholder Initiatives

“There are some stakeholders who will not or have difficulty in engaging, so need to
have outreach to get them talking, observing, presenting...to get them into the
'tent'.”

PEFC should review options to join stakeholders’ initiatives (for example,


Conservation International’s ‘Center for Environmental Leadership in
Business’, or the International Union for Conservation of Nature’s
‘Commission on Environmental, Economic and Social Policy’) both to support
complimentary efforts in sustainability and promote a broader understanding
of PEFC’s work and contributions.

Changing critical opinions of PEFC will take deliberate investment in


dialogue, as well as incremental demonstration of ‘game-changing’ policy and
action in PEFC’s membership and sphere of influence to convince key
stakeholders of the sincerity of the organisations desire for collaboration.

30 PEFC Strategic Plan (Internal), Core Strategies, Paragraph 2 –"Bearing in mind that an
external impact and image study undertaken for PEFC has clearly identified the lack of
recognition of a single PEFC brand as a constraint to market access the strategy will
emphasise the inclusion of national schemes, such as FFCS, CSA, AFS and SFI, within a
unitary certification model. This will need to be communicated to all influential procurement
policy makers and to others who influence those policies"

PEFC Governance Review Page 59 of 104 Final – 23 May, 2008


13. PEFC International Conference on Forestry and the Environment

Announce a PEFC-sponsored conference in Geneva (targeted to take place in


2009) with the express purpose of inviting participation and dialogue with
Environmental NGOs. Form and support a four-person conference planning
committee with two PEFC representatives, and two ENGO representatives
(paid as consultants) to develop conference agenda, and negotiate broad
participation.

The Conference should serve as a key event to invite dialogue, engagement,


and admission to the Stakeholder Forum, as well as identifying priorities and
a work-plan for addressing areas of improvement in the PEFC meta-standard
and process.

14. Develop Annual Internal Governance ‘Check-Up’

“Have an assurance process for governance process (independent view and external
review.) Part of annual report should include governance audit.”

“Send out questionnaires to different stakeholders or to make it on-line on the


regular basis; to organize interview with different people from very different
countries, etc.”

Include an internal review of organisational governance as part of the PEFC


annual reporting process (in the same way as the financial audit) conducted
by a variety of internal stakeholders in a consistent methodology to allow for
measurement of progress over time. Include a review of Board capacity,
procedures and goals against organisational strategy and changes in the
sector.

Participation in international fora, and development of a strong network of


peers in similar organisations, the diplomatic and governmental sectors, and
NGOs active in the environmental or standards sectors will provide valuable
insight and resources in crafting dynamic and substantive options for regular
review.

15. Volunteer for One World Trust’s Governance Review

“Good governance requires a systematic review process with outside ‘pair of eyes’”

Invite One World Trust, a leading not-for-profit organisation focused on


accountability within international organisations and corporations, to include
PEFC in their annual review31 of the governance of international trans-
national corporations, international NGOs, and international organisations.

31 See: http://www.oneworldtrust.org/

PEFC Governance Review Page 60 of 104 Final – 23 May, 2008


Improvement against the One World Trust’s standard should begin
immediately, with the aim of the formal review of PEFC taking place by the
2010 publication cycle.

Phase Two – Get Structured

Phase Two recommendations are a mix of ‘next-step’ suggestions for previous


initiatives and organisational changes that will take some internal preparation
and development.

16. Strategically Update Board Model

“As the organisation matures it should have a board that balanced and representative
of the key stakeholder interests and be able to demonstrate that this includes the
industry, environmental and social components.”

Develop an updated model of a Board comprised of a diverse mix of


individuals with both relevant skills, and representational constituencies (e.g.
forest owners, environmental NGOs, corporate leadership, labour
organisations, indigenous organisations.) Also consider the utility and format
of Board sub-committees (e.g. finance, fund-raising, environment, marketing,
technical/expert), and opportunities for additional sub-committee
membership from the Stakeholder Forum. As current Board members’ terms
expire, ensure that replacement members’ backgrounds match strategic goals.

17. Focus Board Role

“I feel members should determine policy through membership of the board, although
other stakeholders should also be included. If the board is structured fairly NGBs
should have no problem implementing its decisions. I think this is also the most
workable model in terms of practical decision-making.”

“Board cannot take a critical look in the endorsement decisions even if consultant
points out weaknesses in the basis for the assessment process for an individual
scheme.”

Draft a new preface to by-laws focusing Board duties on four primary


functions: management and financial oversight, networking and fundraising,
promotion and outreach, and strategic planning. Operational, administrative,
and technical issues should be the responsibility of the PEFC International
Headquarters.

18. Recruit Additional Stakeholders into National Governing Bodies (NGBs)

“The national level is more personalized and makes country feel special attention is
given them, which would be favourable to integrating PEFC practices.”

Encourage, facilitate, and assist National Governing Bodies to identify and


recruit a wide variety of local stakeholders to participate in their activities and

PEFC Governance Review Page 61 of 104 Final – 23 May, 2008


decisions. As members of NGBs, stakeholder representatives should be able
to participate substantively in PEFC International.

National and local stakeholders can be represented at the National Governing


Body level (in contrast to international institutions who can participate in the
Stakeholder Forum.) However, nothing prevents national stakeholders from
earning prominence in NGBs and through them participating at the
international level.

19. Expand ‘Extraordinary Members’ into a Forum

“Promotion and marketing and partnership alliances. PEFC lacks credibility in the
market place and with some governments. It needs to build alliances with
organisations from which it can learn and which will add credibility to its activities.”

PEFC ‘Extraordinary Members’ should be expanded to include a broader


range of stakeholders, be renamed the ‘Stakeholder Forum’32, and be granted
specific rights and responsibilities in the organisation’s governance process.

International institutions can become members and contribute to the PEFC


process in a number of ways, including membership fees, seconded staff,
technical expertise and resources, joint projects, or organisational leadership.

20. Add Stakeholder Forum ‘Right of Agenda’

“Accept that multi-stakeholder participation means multi-stakeholders develop and


drive the system”

The Stakeholder Forum should have the right (as a collective body) to add
policy and other issues to the agenda of the PEFC General Assembly in its
periodic meetings, and to convey to the PEFC International Headquarters
Requests for Review on specific issues or questions identified by its members.

21. Expand Secretariat Capacity

“PEFC's legitimacy is delegated. It would probably benefit from more centralization


(moving from association to confederal).”

The management, administrative, and technical capacity of the Secretariat


should be expanded to better support PEFC members, develop an
increasingly robust ‘meta-standard’, and expand membership and
partnerships.

The Director-General, in conjunction with key staff and other personnel as


necessary, should develop a detailed work-plan detailing timelines, budgets,
and the process for expanding capacity and delivering additional value to

32 See ‘Appendix E – PEFC Stakeholder Forum’ for more information

PEFC Governance Review Page 62 of 104 Final – 23 May, 2008


members and the field in line with recommendations in this Review and the
PEFC Strategic Plan.

22. Tighten Independent Consultant and Panel of Experts’ Role

“The Panel of Experts? It's a rather shadowy body within the PEFC structure.”

“Weakness: Independent auditors - mostly a shame on us - we don't educate them


enough to really understand the meta-standard and/or national standards.”

“Even as a national member, the Panel of Experts hasn't been sold to the
membership. Has been seen as a blockage to date from this far away!”

Establish an augmented set of position descriptions, compressed work-


flow/time-table, minimum requirements for professional eligibility,
qualification test, formal review mechanism for quality of completed work,
terms of reference that includes a signed ‘Statement of Independence’ for each
consultant.

The primary objective of the Independent Consultants’ work should be


consistent quality. As such, the Director-General should take appropriate
steps to establish a professional standard of knowledge required of
prospective consultants, and regularly review that standard for applicability,
and opportunities of improvement. Similar steps should be taken for the
Panel of Experts. In recognition of new and more robust expectations for both
functions, previous engagement should not necessarily be considered
sufficient qualification for subsequent contracts.

23. Launch Tropical Initiative

“The problems and complexity for certification of natural tropical forests need
greater appreciation”

PEFC should partner with a complementary organisation of excellence (e.g.


ITTO, or the Rain Forest Trust), or lead an initiative in advancing sustainable
forest management in tropical forests, utilising the project also to expand
membership, create new alliances and promote the PEFC standard’s
contributions in the developing world.

While PEFC has a great deal of collective expertise, this initiative should
contribute to educating the organisation about the unique challenges of
working in tropical forestry and the countries where they are located. Special
care and attention should be paid to differences in PEFC processes necessary
to contribute to these specific challenges or in these regions.

PEFC Governance Review Page 63 of 104 Final – 23 May, 2008


24. Add Fundraising Capacity

“Fundraising - all organisations need a good capital basis and recurring funding to
expand and move forward”

Recruit a dedicated fund-raiser in the PEFC International Headquarters to


identify and leverage non-membership based funds, including contract and
grant funding in forestry from international development organisations and
donors (e.g. World Bank, DFID, UNDP, EU.)

25. Increase Support to Members

“Sharing of information on good practices adopted to national schemes, open


discussion and constructive criticism on elements that need improvement in national
schemes. Increased expertise among national governing bodies and board members.”

The PEFC International Headquarters should survey existing members to


identify and provide additional support (for example, collecting and
disseminating members-only ‘best practices’, building a database of technical
experts and key contacts globally, image library, draft marketing materials,
procurement database, conducting training, comparative budget templates,
support to increase market share, and other services.)

26. Sponsor Applied Research in Environmental Impact

“International Policy Leadership/Human Resources support. PEFC cannot meet the


policy challenges which the anti-forestry sentiment prevalent today is presenting.”

Invite the Stakeholder Forum to identify and commission independent


research on at least two major issues, advancing the field of sustainable forest
management.

While such research is initially an opportunity to substantively engage PEFC


stakeholders, the process should be carefully considered for longer-term
opportunities in quantitative analysis and research, perhaps in partnership
with academic or international institutions.

27. Create ‘Entry-Level’ Tier of Endorsement

“Focus on legality in developing world? Yes, thought leadership is pointing this


way.”

With an aim to expanding membership globally, PEFC should create an


‘entry-level’ tier of endorsement (including separate tools and processes such
as the chain-of-custody procedure) based upon timber legality certification to
allow significantly more developing countries to begin participating in the
PEFC process. This level of certification should be carefully distinct from
mutual recognition, and in no way ‘dilute’ or weaken the PEFC meta-
standard.

PEFC Governance Review Page 64 of 104 Final – 23 May, 2008


The Director-General should research and engage other organisations that
work in this type of international development, and create a comprehensive
plan for ventures in this field, including plans for risk-analysis and
mitigation.

28. Provide Capacity-Building Assistance

“New members, typically from less developed countries, faced serious problems of
‘institutionality’ (weak institutions in their country)…and they become weak
elements of the PEFC chain, the easiest to be attacked and to discredit the whole
system”

Develop the Technical Unit of PEFC with specific staff capacity to provide
capacity-building services to members and prospective members, and serve
as the implementation function of the PEFC Secretariat in its partnerships
(contractual or otherwise) with international and development organisations.
Revenues from technical assistance projects can also provide an important
funding-stream for the organisation, and can serve as an additional
opportunity for Stakeholders to participate in PEFC’s broader work of
sustainable forest management.

The Director-General should engage with international organisations and


consider short-term engagement of experienced personnel in development
operations to contribute to PEFC’s planning and implementation process.

Phase Three – Get Engaged

Phase Three recommendations are significant changes, medium-term projects,


or major milestones in incremental organisational re-alignments. They will
require significant preparation, and systematic engagement of internal and
external stakeholders to ensure sufficient buy-in.

29. Post Position Descriptions for ‘Seconded’ Staff

Create a mechanism for and encourage PEFC Members to second appropriate


staff for specific needs in the PEFC International Headquarters (identified in
the revised organisational chart and position descriptions) for a period of no
less than one year. Secondment (paying the salary of a full-time employee
who works in the Secretariat) increases opportunities for leading Members to
contribute to the organisation, and reduces operating budget costs while
advancing new capacity and initiatives.

30. Nominate Two Board Members from Forum

The Stakeholder Forum should have the right to nominate two members of
the PEFC Board of Directors through the PEFC Nominating Committee (or
through any revised process)..

PEFC Governance Review Page 65 of 104 Final – 23 May, 2008


31. Nominate Members of the Panel of Experts from Forum

The Stakeholder Forum should have the right to nominate


technical/standards advisors to the PEFC Panel of Experts.

32. Name Board Member to Chair Stakeholder Forum

One of the Board members (not nominated by the Stakeholder Forum) should
be named to serve as the Co-Chair of the Stakeholder Forum, working with
the internal leadership set up by that body to integrate it dynamically into the
organisation.

The Board Co-Chair should serve as an additional point of contact for


Stakeholders (in addition to Board Members nominated by the Forum) and
work actively with them to find new opportunities for substantive
engagement, dialogue and growth.

33. Revise Engagement Between Board and PEFC International Headquarters

Recognising that the Board will be taking a higher-level role in the


organisation’s Mission33 and delegating operational and administrative
management to the PEFC International Headquarters, the Panel recommends
developing a more consistent and integrated working relationship between
the PEFC International Headquarters and the Board34 to ensure necessary
support and oversight.

34. Review and Clarify PEFC Complaints and Appeals Procedures

Review existing decentralised Complaints and Appeals Procedures in each


element of the certification process and provide a user-friendly interface on
the PEFC web-site to facilitate understanding of the appropriate levels and
recipients for complaints and appeals. Publish complaints submitted through
the formal PEFC process and their responses on an appropriate page of the
PEFC web-site.

Further, initiate a dialogue with key partners and stakeholders with an aim to
integrating and simplifying complaints and appeals procedures as much as
possible, and providing a point of contact and process within the PEFC
international process to facilitate review and redress of complaints at the
national level or in other organisations (e.g. accreditation bodies, or local
certification agencies.)

33See Recommendation 17 – ‘Focus Board Role’


34In whatever form the current Executive Committee emerges in the new Board model – see
recommendation 16

PEFC Governance Review Page 66 of 104 Final – 23 May, 2008


35. Reduce Number of Board and General Assembly Meetings

“Faster decision-making (e.g. by Internet ballots on various issues between regular


meetings and General Assemblies)”

Review the frequency of recurring organisational meetings (recognising that


Special Sessions of the Board and other bodies may sometimes be necessary),
and incrementally reduce the number of ordinary meetings as the capacity of
the International Headquarters increases. Set a long-term goal of two in-
person meetings a year (per the PEFC Statutes35) supplemented with virtual
meetings as necessary (particularly from 2008-2010 during implementation of
these recommendations.)

Additionally, invest in high-quality ‘virtual meeting’ technology, as well as


dynamic technologies to enable a continuous dialogue among members.
Extend the General Assembly to three full days from one and a half to allow
for more substantive debate on issues and effective networking and education
of members.

36. Leverage Engagement with FSC

“FSC isn’t the enemy. Perhaps PEFC needs to give them a fine reputation to live up
to.”

PEFC should increasingly engage with FSC in areas and endeavours of


mutual benefit or concern (e.g. illegal logging), increasing communication,
and where a ‘united front’ can advance the global interests of sustainable
forest management (for example, inviting FSC to General Assemblies,
exchange of staff at headquarters, joint development projects, mutual
recognition of timber legality certification, joint chain-of-custody certification,
and/or collaboration in forestry projects with international development
organisations.)

Recognising the comparative advantages in both organisations, and the


complementarity of their respective certification processes, PEFC should
actively recognise, promote, and invest in their common cause and agenda
(e.g. carbon mitigation, combating illegal logging, or promoting sustainable
forest management.)

37. Give Stakeholder Forum Votes in the General Assembly

“Needs some kind of structure where the key stakeholder groups have balanced
decision-making authorities.”

Give the Stakeholder Forum votes up to 50% (rounded down) of those of


PEFC Council (e.g. there are currently 35 PEFC Council members who have a

35 PEFC Statutes, Article 6, Paragraph 5 – “The Chairman convokes the Board meetings at
least twice a year with a notice of at least four weeks.”

PEFC Governance Review Page 67 of 104 Final – 23 May, 2008


total of 61 votes36, the Stakeholder Forum would have 30 votes on that basis.)
Members of the Stakeholder Forum will decide internally how those votes are
allocated37.

Phase Four – Get Influential

Phase Four recommendations are ‘capstone’ conclusions to which many other


preceding initiatives lead. Implementing these recommendations should
actually begin as early as possible, recognising the long lead times for
collective opinion within and outside the organisation to change sufficiently
to make these issues essentially self-evident by the time all others have been
completed.

38. Lead Forestry Policy on Carbon

“Process could evolve in a more 'global' scheme than just addressing the forestry
issues but integrating gradually other environmental concerns like the carbon
footprint of the products for example.”

“Climate debate might affect PEFC’s role - e.g. storing carbon in forests. That would
change PEFC’s governance.”

PEFC should engage relevant international organisations (e.g. the United


Nations Framework Convention on Climate Change (UNFCC), or the World
Bank Forest Carbon Partnership Facility (FCPF)) to offer the organisation’s
technical assistance in establishing and implementing the global standard for
forestry’s contribution as a carbon sink in a post-Kyoto Protocol agreement.

39. Update PEFC Brand

“Name/acronym should change - bland, bureaucratic, not sexy”

The PEFC brand should be reviewed for accuracy and comprehensiveness


with new organisational alignment and expanded focus and stakeholder
engagement.

The Panel’s recommendations are incremental, mutually reinforcing and


inter-dependent, and envisaged to take place ideally within two years.

36 PEFC Member-Schemes may have more than one vote based their certified hectarage, so
that the largest members of PEFC may have up to five votes on issues.
37 See ‘Appendix E – PEFC Stakeholder Forum’ for more information

PEFC Governance Review Page 68 of 104 Final – 23 May, 2008


APPENDICES

A. International Oversight Panel Biographies

B. International Oversight Panel Terms of Reference

C. PEFC Governance Survey

D. Governance Recommendations by Subject Area

E. PEFC Stakeholder Forum

F. PEFC Organisational Structure

G. PEFC Assessment, Endorsement and Mutual Recognition Process

H. “Evaluating Legitimacy and Quality of Forest Governance” by Tim


Cadman

PEFC Governance Review Page 69 of 104 Final – 23 May, 2008


A. International Oversight Panel Biographies

Jamie Lindsay, Chair

Lord Lindsay is currently Chairman of UKAS (United Kingdom Accreditation


Service), the agricultural group SAC Ltd, and Deputy Chairman of the UK
Government’s Better Regulation Commission. Jamie’s other current
appointments include non-executive directorships at Scottish Resources
Group and British Polythene Industries plc. His career has included a
number of senior Public, Private and NGO sector appointments. From 1995 -
1997, he was the Scottish Minister with responsibility for agriculture, forestry,
environmental protection, countryside the sustainable development. Since
then he has had a number of government appointments relating to standards
and sustainable development. He has served on the board of commercial
companies or organisations including UA Group plc, Assured British Meat,
Genesis Quality Assurance Ltd and Scottish Quality Salmon. In the NGO
sector, Jamie is a Vice President of RSPB and between 1998 and 2003 was
chairman of RSPB Scotland and on the RSPB Council. He chaired the Marine
Stewardship Council’s Governance Review between 2000 and 2001 and from
2001 until 2005 was Managing Director of the MSC’s trading arm MSCI.
Jamie is also President of the Royal Scottish Geographical Society and Vice
President of the International Tree Foundation, having served as ITF’s
President between 1995 and 2005.

Björn Andrén

Björn Andrén is Managing Director of Holmen Skog AB with responsibility


for Forestry and Wood Supply to the Swedish Holmen Industries. He serves
as the Chairman of the Forest Committee of the Swedish Forest Industries,
and as Director on the Boards of the Forest Research Institute, Skogforsk; the
Forest Faculty of the Swedish University for Agricultural Sciences SLU; and
PEFC Sweden. He is a member of the Royal Swedish Academy of Agriculture
and Forestry, KSLA.

Jon Dee

Internationally, Jon Dee is best known as the founder of Planet Ark, 'World
Environment News' and his 14 country 'World Environment Review' poll.
Some of Jon's initiatives have become role models for international change.
He initiated the successful lobbying campaign for Australia's 3 year phase-out
of incandescent light globes - a move that has since been copied by other
countries.

Jon also spearheaded the highly successful campaign to phase-out Australia's


usage of plastic bags. This campaign has led to a Government announcement
that Australia will phase-out free plastic bags by the end of this year. Five
years ago, Jon and Ben Kearney got the town of Coles Bay to become

PEFC Governance Review Page 70 of 104 Final – 23 May, 2008


Australia's first plastic bag free town. Many communities around the world
have used Coles Bay as their role model for taking similar action. Indeed, Jon
was Rebecca Hosking's key advisor in telling her how to turn Modbury into
Britain's first plastic bag free town.

In 2007, Jon was the media spokesperson for the Australian release of Al
Gore's 'An Inconvenient Truth' DVD. In June 2007, he also spoke at the House
of Lords to launch his 14 country 'World Environment Review' poll, which
was carried out in partnership with GMIPoll from Seattle.

Jon founded Planet Ark back in 1991 in partnership with close friend Pat
Cash. Jon is also the founder of Planet Ark initiatives such as 'World
Environment News' (used by 8 million people a year), ‘Cards 4 Planet Ark’
(over half a billion greeting cards recycled), RecyclingNearYou.com.au (used
by one million people a year), Australia's 'National Recycling Week' and 'The
National Recycling Hotline', to name but a few.

Together with Olivia Newton-John, he also founded Australia's 'National Tree


Day', an event for which 1.2 million volunteers have planted more than 12
million native trees and shrubs. In the media, Jon's columns have millions of
readers. He writes the 'Eco-Agogo' environment column in Australia's biggest
read weekly magazine 'Sunday' - which is distributed with 'The Sunday
Telegraph' and 'The Sunday Herald-Sun'. The column now also runs in The
Sunday Times 'STM' magazine in WA. He also has a number of regular
environment columns in Australian motoring magazines.

Jon hosts the environment TV series ‘Tipping Point’, which airs on the hour
every hour on 'The Weather Channel' on Foxtel and Austar. He is also a
regular guest on Channel Nine's national 'Today Show'. Jon has directed and
produced over 300 environmentally-focussed TV and radio adverts. These
have featured people such as Tom Cruise, Kylie Minogue, Sir Richard
Branson, Dustin Hoffman, Nicole Kidman, Pierce Brosnan, Olivia Newton-
John, Rolf Harris, Steve Irwin and many others.

Jon is the Chairman of Planet Ark. Prior to this, Jon was the organisation's
Managing Director - a role he held for 15 years after he and Pat started the
organisation back in June 1991. He is now the Managing Director of Issues
Solutions, where he advises leading companies on the many ways that they
can help the environment.

Jon is married to Leanne Dee and they have two daughters - Estelle, who is
four and Claudia who was born on Oct 20th 2007. Jon and Lee met in London
back in 1991 and they live in Yosemite in the Blue Mountains outside of
Sydney.

PEFC Governance Review Page 71 of 104 Final – 23 May, 2008


Dr Johannes (Hans) Drielsma

Hans Drielsma is a Director of Australian Forestry Standard Ltd, and also a


Director of PEFC Council International. He has been involved with the
development of the Australian Forest Certification System, and its
endorsement by PEFC over the last 10 years.

Dr Drielsma is employed as Executive General Manager of Forestry


Tasmania, the government-owned business enterprise which manages
Tasmania’s State forests, where he has responsibility for resources, planning,
environmental management, business systems, information technology and
forest research. Forestry Tasmania is an ISO 14001 and AFS certified
company.

Dr Drielsma has a Bachelor of Science (Forestry) with Honours from the


Australian National University, Canberra, and a Master of Forest Science and
Doctorate from Yale University. Dr Drielsma is a member of the Tasmanian
Forest and Forestry Industry Council and the Tasmanian Forest Practices
Advisory Council, a Director of the Cooperative Research Centre for
Sustainable Forest Landscapes, the Tasmanian Timber Promotion Board, and
a fellow of the Australian Institute of Company Directors and Institute of
Foresters of Australia.

Dr. Maharaj Muthoo

Maharaj Muthoo, PhD, President, The Roman Forum, Former Director of


FAO's Forestry Operations and Former Executive Director of the Forest
Stewardship Council Dr. Muthoo is the President of Roman Forum. It is the
successor to the Club of Rome, which made the wake-up call about the earth's
resources by publishing the celebrated "Limits to Growth". Its mission is to
build partnerships among countries and synergies among international
agreements on global issues of environment and development. In addition,
Maharaj is heading Agronomes et Forestieres sans Frontiers and the Hari
Environment and Development Society. He is a visiting professor and
resource person at various institutions, such as at the Vienna Forest Policy
and Economics Institute, the UN University, and the Italian Inter-University
Centre for Sustainable Development, where he is also the Chairman of its
Scientific and Academic Council. The last position held by him was of the
Executive Director of FSC, where he put in place a strategic review, which led
to the establishment of its International Centre at Bonn. He was FAO's
Director of Forestry Operations for 15 years, during which time he raised
around US$ 2 billion in donor resources and counterpart contributions for
international cooperation on sustainable forest management and related
programs and projects. Dr. Muthoo's areas of expertise are sustainable
development and international cooperation with a passionate dedication to
the cause of one world, its tropical forest heritage and poverty eradication.
Maharaj is of Indian origin with a doctorate in development from Oxford,

PEFC Governance Review Page 72 of 104 Final – 23 May, 2008


forestry honours degree from Wales, MPA from Harvard, and economics and
biology degrees from India.

Frederick M. O’Regan

Mr. O’Regan is currently Chief Executive Officer of the International Fund for
Animal Welfare (IFAW), a world-wide animal protection and conservation
organization with headquarters on Cape Cod, Massachusetts. IFAW has
sixteen international offices and a membership base of 1.4 million. It works in
the areas of policy development, habitat, and direct assistance to animals.

Before becoming CEO of IFAW, Mr. O’Regan was Peace Corps’ Regional
Director for Europe, Central Asia and the Mediterranean, responsible for
Peace Corps operations in 24 countries in Central and Eastern Europe, the
Republics of the Former Soviet Union, North Africa, and the Middle East.
The Region is comprised of 2,000 volunteers and staff, working in the
environment, education, and business development.

Before being appointed to the Peace Corps, Mr. O’Regan was Program
Director with the Aspen Institute heading a national action-research program
on employment-generation and business development among the poor within
the United States. He has also headed Community Economics Corporation, a
policy and consulting organization specialized in developing local-level
economic and development programs in the U.S. and the Third World. In this
capacity he advised major foundations, the World Bank and USAID on
economic development programming. This work included the development
of the first major lending programs in the black townships of South Africa.
During the 1992-93 academic year Mr. O’Regan was Visiting Professor of
Public and International Affairs at the Woodrow Wilson School, Princeton
University where he taught community-based economic development at the
graduate level and guided research.

From 1984-89 he headed the Kenya Rural Enterprise Program, an


intermediary finance and training organization for small-and micro-enterprise
development. This work included efforts to involve indigenous populations
around game parks to participate in tourist-related activities and animal
protection. He founded and co-directed the Development GAP (1977-84), an
advocacy and consulting organization in international development. Mr.
O’Regan was Program Director of the Community Action Program in
Cambridge, Massachusetts (1974-77), and began his career as a Peace Corps
volunteer in Swaziland, 1969-72. He has published numerous articles and
papers on international development and co-authored two books on
development assistance policy and economic development among the poor.

Dirk Teegelbekkers

Dirk studied forest science at the University of Munich, and had his
traineeship at the state forest administration of Hesse. His experience in the

PEFC Governance Review Page 73 of 104 Final – 23 May, 2008


timber trade includes a forestation project of GTZ and the state forest
administration of Hesse in China. He has also worked as a deputy at the state
forest department of Hofheim im Taunus, and as a scientific assistant at the
Institute for Forest Economics and Inventory at the University of Dresden. He
has been the General Secretary of PEFC Germany since 2000.

PEFC Governance Review Page 74 of 104 Final – 23 May, 2008


B. International Oversight Panel Terms of Reference

Mandate

In accordance with and subject to the PEFC’s Strategic Plan (including the
vision, mission, purpose, core values & beliefs, principles and goals contained
therein), the panel will update the PEFC Council, its rules and standards by:
• improving external perceptions of PEFC’s governance;
• making the PEFC organisation more effective;
• ensuring that PEFC’s rules and standards are simple and easy to
understand; implement and operate;
• ensuring that PEFC robustly implements and continuously monitors its
own requirements at all levels;
• ensuring “buy-in” from PEFC’s existing stakeholders;
• removing obstacles to dialogue with environmental non-government
organisations (ENGO)s.

Terms of Reference

PEFC is delegating responsibility for the governance review to a Panel, which


will be facilitated and supported by Z/Yen Group Limited (Z/Yen).
Specifically, the review will:
• examine the current PEFC governance structure;
• consider the governance plans of other similar international
institutions;
• survey relevant people (probably several hundred people would be
asked to participate) from various interested constituencies and sectors;
• deliver a report, including recommendations with respect to:
• internal structures and organisation; and
• external services and transparency.

In fulfilling these terms of reference, the Panel shall be entitled to consult with
any and all sources, individuals and organizations that it believes
appropriate.

Membership

The Panel itself should contain representation from the main interested
constituencies to ensure that the process of the review itself has widespread
credibility and transparency; we currently envisage three members being
chosen from the PEFC Council, and the remaining four, including the Panel
Chair, being chosen from external, interested constituencies.

PEFC Governance Review Page 75 of 104 Final – 23 May, 2008


Term

The Panel will submit its final report and recommendations as soon as
possible, ideally within 90 to 120 days of its establishment. The
recommendations shall be made public.

Meetings

The Panel shall meet as necessary in order to complete the terms of reference
(probably three meetings), including at least one face-to-face meeting.

PEFC Governance Review Page 76 of 104 Final – 23 May, 2008


C. PEFC Governance Survey

An on-line survey was developed and widely publicised, including


prominently on the PEFC website for the duration of the Review. The survey
was announced on PEFC’s mailing list (to approximately 4,500 people), in
Z/Yen’s periodic newsletter (to approximately 2,500 people), and in World
Environment News (to approximately 20,000 people.)

Participation in the survey was voluntary and anonymous, and was managed
in its entirely by Z/Yen. In total, 152 people completed the survey. This
number compares favourably with the participant levels in other, similar
reviews. The quantitative results are appended.

PEFC Governance Review Page 77 of 104 Final – 23 May, 2008


Zoomerang | PEFC Governance Review (v 1.2): Results Overview 11/05/2008 09:43

PEFC Governance Review (v 1.2)


Results Overview
Date: 5/11/2008 1:42 AM PST
Responses: Completes | Partials | Screen Outs
Filter: No filter applied

Respondent Details
Respondent details will not be attributed to answers/comments, and only used in aggregate to ensure a representative
sampling of organisational and geographic input.

3. Type of Organisation

Forest land owners; 18 14%

Forestry
9 7%
management;

Forestry workers; 3 2%

Timber production
14 11%
companies;

Timber production
4 3%
workers;

Timber product
8 6%
wholesalers;

Timber product
1 1%
retailers;

Trade associations; 5 4%

Financial services
0 0%
(e.g. trade finance);

Consumer
1 1%
associations;

Environmental
16 13%
NGOs;

Academic
11 9%
community;

Standards bodies; 2 2%

Certification bodies; 4 3%

PEFC National
9 7%
Governing Body

National government
and quasi 5 4%
government bodies;

International
governmental and
quasi governmental 1 1%
bodies (e.g. EU,
WTO).

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Other, please specify 48 38%

5. Which part(s) of the world do you primarily focus on in your work?

Europe; 62 48%

Asia; 14 11%

Australasia/Oceania; 13 10%

North America; 21 16%

Central/South
7 5%
America;

Africa; 4 3%

International/Global; 32 25%

6. At what level do you or your organisation typically work: locally, nationally, regionally, or internationally?

Local (e.g. Kuala


27 21%
Lumpur);

National (e.g.
63 49%
Malaysia);

Regional (e.g.
25 20%
Southeast Asia);

International (e.g.
34 27%
Globally);

Multiple Jurisdictions 16 12%

Section 1 (of 6) - Introduction


Governance can be defined as “how an organisation reaches its goals without compromising its values.” More specifically,
governance is often said to be made up of three main components or approaches:
Formal Compliance: Direct compliance with legislation and recommended practice, e.g. UN Statement of Good Practice,
OECD Principles of Corporate Governance and, in PEFC’s particular case, ASBL law and IAF principles as well. In short:
legislation, and recommended practice.
Constitutional Structure: thinking from the perspective of powers, checks and balances, and representation. For an
organisation like PEFC, this should mean ensuring that the ‘constitution’ for PEFC covers the following aspects of
legislative, executive and judicial powers: stakeholder inclusiveness, separation of powers, decision-making processes,
and ethical standards.
Systems Integrity: developing, maintaining and enhancing organisational system’s to help reach the organisation’s goals.
For an organisation like PEFC, this should include: strategic planning, human resources management (both executive and
governing bodies), transparency and disclosure, audit and accountability.

Which of the three aspects of Governance above do you feel is most important to PEFC? Rank them in order (1 -
8. "Most Important" to 3 - "Least Important")
Top number is the count of
respondents selecting the option. 1 2 3
Bottom % is percent of the total
respondents selecting the option.

19 19 31

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19 19 31
Formal Compliance;
28% 28% 45%

22 32 21
Constitutional Structure;
29% 43% 28%

38 23 17
Systems Integrity;
49% 29% 22%

10. How would you rate PEFC's Formal Compliance in the following areas?

Top number is the


count of respondents
selecting the option. Very Strong Strong Adequate Weak Very Weak
Bottom % is percent of
the total respondents
selecting the option.

Legislative and 14 39 17 4 0
Regulatory 19% 53% 23% 5% 0%
Administrative and
18 28 22 4 1
Standards
25% 38% 30% 5% 1%
Compliance

12. How would you rate PEFC's Constitutional Structure in the following areas?

Top number is the


count of respondents
selecting the option. Very Strong Strong Adequate Weak Very Weak
Bottom % is percent of
the total respondents
selecting the option.

Stakeholder 13 22 22 11 6
Inclusiveness 18% 30% 30% 15% 8%

Separation of 20 15 28 7 2
Powers 28% 21% 39% 10% 3%

Decision-Making 7 26 31 9 1
Processes 9% 35% 42% 12% 1%

17 30 23 3 1
Ethical Standards
23% 41% 31% 4% 1%

14. How would you rate PEFC's Systems Integrity in the following areas?

Top number is the


count of respondents
selecting the option. Very Strong Strong Adequate Weak Very Weak
Bottom % is percent of
the total respondents
selecting the option.

8 22 34 7 0
Strategic Planning
11% 31% 48% 10% 0%

Human Resources 4 24 33 8 0
Management 6% 35% 48% 12% 0%

Transparency and 21 21 18 11 2
Disclosure 29% 29% 25% 15% 3%

Audit and 16 25 25 6 1
Accountability 22% 34% 34% 8% 1%

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Section 2 (of 6) - Organisational Structure and Management


The extent to which an organisation is centralised depends on two main dimensions: - the extent to which its legitimacy is
intrinsic to the organisation itself, rather than delegated by members and/or member bodies; - the extent to which
operational authority is exerted centrally or elsewhere (e.g. by member bodies).
The diagram below illustrates these dimensions, dividing organisations into four types with (somewhat simplistic)
definitions and examples for ease of reference.

Image -

Based on the above analysis, PEFC is currently closest to an ‘Association-style’ organisation, with authority held by the
members (National Governing Bodies), who meet at least annually to decide policy and direction, delegating authority to
the Board and Secretariat. The Board of Directors represents the entire membership, and an International Secretariat
carries out decisions and administrative duties as directed.

Like any other organisation, the formal structure (on paper) may not necessarily or completely represent the de facto
structure in reality. Some other examples:

In a 'Federal-style' organisation, members make decisions together on a day-to-day basis, the implementation of which is
carried out in each organisation or country;

[E.g. PEFC Council, Board of Directors would be more powerful, and National
Governing Bodies would decide how to implement their decisions to meet
local needs]

In a 'Unitary-style' organisation, issues would be debated and decided centrally in headquarters, which would also
manage their implementation in the field;

[E.g. PEFC Council, Board of Directors take all substantive policy and
standards decisions, operations are implemented by the Secretariat
using resources of National Governing Bodies]

In a 'Confederal-style' organisation, the headquarters has the resources and authority to represent and carry out policy set
by members on a regular basis.

[E.g. PEFC Council would set strategy, policy, and endorses the 'meta-standard',
while the Board of Directors and Secretariat would independently advance the organisation's Mission internationally]

Rank the four organization types illustrated based upon your opinion of which would best advance PEFC's Mission
17. in the future (1 = "Most Suitable", 4 = "Least Suitable")
Top number is the count of
respondents selecting the
option. 1 2 3 4
Bottom % is percent of the
total respondents selecting
the option.

24 13 9 11
Association
42% 23% 16% 19%

14 15 21 7
Federal
25% 26% 37% 12%

6 7 11 34
Unitary
10% 12% 19% 59%

15 23 16 6
Confederal
25% 38% 27% 10%

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For each of the functions below, please tick whether you would like to see PEFC do more of/the same
19. amount/less of each function (and have the necessary budget to do so):
Top number is the count of
respondents selecting the option. More Of The Same Amount Less Of
Bottom % is percent of the total
respondents selecting the option.
Promotion/marketing –
49 13 1
promoting the work and aims
78% 21% 2%
of the organisation
Fundraising – increasing
38 20 1
budgetary capacity from
64% 34% 2%
various sources
Membership/membership
Events – increasing and 19 39 2
deepening membership in the 32% 65% 3%
organisation
Partnership/Alliances –
building collaborative 38 23 0
relationships with other 62% 38% 0%
organizations
Enforcement – ensuring that
PEFC systems are properly
38 26 1
implemented and that
58% 40% 2%
infringements are satisfactorily
dealt with
International Policy
Leadership – influencing
32 26 5
global or bi-lateral/national
51% 41% 8%
policy to better match the aims
of the organisation
Education – building a deep
understanding of the issues 28 28 4
and challenges facing the 47% 47% 7%
organisation in the sector
Technical Assistance –
providing direct expert advise
22 35 3
and consulting to members or
37% 58% 5%
partners to improve their
systems and work
Human Resources Support –
enabling staff and volunteers
19 35 2
to implement the
34% 62% 4%
organisation’s policies and
decisions
Research/Analysis –
providing ‘thought leadership’
to the organisation’s 21 37 4
stakeholders and deepening 34% 60% 6%
the knowledge base of key
issues

The members of the independent Panel of Experts are appointed by the PEFC Council Board of Directors to undertake
the following tasks:
1) Assess whether a revision is major or minor
2) In cases where a revision is deemed minor, to undertake an assessment of, and provide the PEFC Council Board of
Directors with a report on, the conformity of the revision with the requirements of the PEFC Council
3) To act as a quality assurance team on the revisions and or external consultants reports on forest and/or optional
national, regional or sectorial chain of custody standards and schemes submitted to the PEFC Council and to report to the
PEFC Council Board of Directors accordingly
4) To provide advice to the PEFC Council Board of Directors when requested to do so by the PEFC Council Board of
Directors.

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In your opinion and experience, do you consider the PEFC Panel of Experts to be robust, adequate, or inadequate
21. in the following areas?
Top number is the count of
respondents selecting the option. Robust Adequate Insufficient
Bottom % is percent of the total
respondents selecting the option.

20 20 9
Clarity of mandate/purpose;
41% 41% 18%

7 32 9
Number of experts;
15% 67% 19%

6 36 6
Capacity of experts;
12% 75% 12%

10 26 13
Diversity of experts;
20% 53% 27%

6 32 8
Quality of outputs/analysis;
13% 70% 17%

7 21 18
Accessibility to members;
15% 46% 39%

Section 3 (of 6) - Role of Stakeholder Groups in PEFC


PEFC is an independent, non-profit, non-governmental organisation, founded in 1999 which promotes sustainably
managed forests through independent third party certification. The PEFC provides an assurance mechanism to
purchasers of wood and paper products that they are promoting the sustainable management of forests.
PEFC has in its membership 35 independent national forest certification systems of which 23 to date have been through a
rigorous assessment process involving public consultation and the use of independent assessors to provide the
assessments on which mutual recognition decisions are taken by the membership. These 23 systems account for more
than 200 million hectares of certified forests producing millions of tonnes of certified timber to the market place making
PEFC the world's largest certification system. PEFC also has a number of non-voting ‘Extraordinary Members' including
associations of forestry, paper, woodworkers, land-owners, timber trade wholesalers and retailers.
PEFC National Governing Bodies comprise a variety of stakeholders within their jurisdictions including (inter alia)
environmental non-governmental organisations (ENGOs), the academic community, consumer groups, standards bodies,
governmental agencies, timber trade representatives, and others.

For the following stakeholder groups, indicate whether their level of involvement with PEFC at the moment is
23. insufficient/sufficient/excessive.
Top number is the count of
respondents selecting the
option. Not Sure/
Excessive Sufficient Insufficient
Bottom % is percent of the Don't Know
total respondents selecting
the option.

14 30 9 6
Forest land owners;
24% 51% 15% 10%

9 32 8 11
Forestry management;
15% 53% 13% 18%

3 20 21 15
Forestry workers;
5% 34% 36% 25%

Timber production 13 30 10 7
companies; 22% 50% 17% 12%

Timber production 1 21 14 23
workers; 2% 36% 24% 39%

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Timber product 6 20 18 16
wholesalers; 10% 33% 30% 27%

Timber product 4 13 25 14
retailers; 7% 23% 45% 25%

8 25 19 7
Trade associations;
14% 42% 32% 12%

2 32 12 11
Labour associations;
4% 56% 21% 19%

Financial services 2 15 14 27
(e.g. trade finance); 3% 26% 24% 47%

Consumer 2 14 29 13
associations; 3% 24% 50% 22%

3 19 32 5
Environmental NGOs;
5% 32% 54% 8%

1 13 33 13
Indigenous peoples
2% 22% 55% 22%

3 30 15 12
Academic community;
5% 50% 25% 20%

6 35 3 14
Standards bodies
10% 60% 5% 24%

6 34 4 14
Certification bodies;
10% 59% 7% 24%
National government
5 28 10 14
and quasi government
9% 49% 18% 25%
bodies;
International
governmental and 3 21 17 16
quasi governmental 5% 37% 30% 28%
bodies (e.g. EU, WTO)

When thinking about each stakeholder group, are there any that you think should be formally or informally
involved in the PEFC process?

25. Formal governance options could include voting representation on the General Assembly, or a role contributing to
the PEFC meta-standard. Informal governance options could include information dissemination for members,
option to comment on issues under consideration by PEFC Members.

Top number is the count of


respondents selecting the option. None At
Formal Informal
Bottom % is percent of the total All
respondents selecting the option.

46 5 0
Forest land owners;
90% 10% 0%

43 8 0
Forestry management;
84% 16% 0%

32 20 0
Forestry workers;
62% 38% 0%

Timber production 40 12 0
companies; 77% 23% 0%

27 22 2
Timber production workers;
53% 43% 4%

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27 23 1
Timber product wholesalers;
53% 45% 2%

23 29 0
Timber product retailers;
44% 56% 0%

25 24 2
Trade associations;
49% 47% 4%

Financial services (e.g. trade 7 35 9


finance); 14% 69% 18%

26 27 0
Consumer associations;
49% 51% 0%

44 8 0
Environmental NGOs;
85% 15% 0%

20 29 2
Academic community;
39% 57% 4%

Standards and certification 27 22 2


bodies; 53% 43% 4%

National government and 18 26 9


quasi government bodies; 34% 49% 17%
International governmental
10 36 5
and quasi governmental
20% 71% 10%
bodies (e.g. EU, WTO)

Section 4 (of 6) - The Standards Puzzle


Forest certification schemes seeking to be endorsed by PEFC must be developed in an open and transparent way through
a multi-stakeholder consensus-driven process. The forest certification schemes must be reviewed at least every 5 years to
incorporate new experiences and scientific knowledge into the standards.
National forest certification schemes that seek to be recognised by the PEFC Council and to have an access to the PEFC
logo must fulfil all the PEFC requirements for forest certification schemes defined in the PEFC Council Technical
Document and relevant Annexes.
The assessment process includes a public consultation period with the assessment of schemes being undertaken by
independent consultants, and informed by expert, peer review. They assess whether the scheme meets the guidelines and
also the requirements of PEFC Council. Based on this independent assessment, all member countries and their
stakeholders are in a position to participate in an informed vote on whether they mutually recognise the applicant scheme
or not.
This essentially creates a ‘meta-standard’ (an over-arching set of characteristics which, at a minimum, must be met by
each member) which all full members must match, while retaining the flexibility for each national scheme to possess
unique country-specific aspects as well.

Image -

PEFC forest certification and product labelling covers the following steps:

• Standards and rules developed in an open, transparent, and consensus-driven process;


• Forests certified by an independent third-party organisation with expert peer review;
• Wood traced from certified forests to the end consumer by chain-of-custody tracking;
• PEFC labelled products supporting an environmentally positive choice.

Complaints and appeals procedures are available for each separate process in the various bodies that contribute to the
PEFC process.

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31. What are the relative strengths and weaknesses of the following elements of the PEFC system:

Top number is the count


of respondents selecting
the option. Very Strong Strong Adequate Weak Very Weak
Bottom % is percent of
the total respondents
selecting the option.

Certification 15 22 14 4 2
standards/schemes; 26% 39% 25% 7% 4%

Forest certification 18 24 12 2 1
procedures; 32% 42% 21% 4% 2%
Chain-of-custody
18 17 15 6 0
certification
32% 30% 27% 11% 0%
procedures;
Accreditation of 16 22 12 3 2
certification bodies; 29% 40% 22% 5% 4%

1 15 25 4 2
Panel of Experts;
2% 32% 53% 9% 4%
Independent
5 24 15 7 1
assessment
10% 46% 29% 13% 2%
consultants;
PEFC Logo on 3 14 15 18 5
products; 5% 25% 27% 33% 9%
Mutual
10 19 13 9 5
endorsement of
18% 34% 23% 16% 9%
standards;
Complaints and
3 13 26 5 1
appeals
6% 27% 54% 10% 2%
procedures;

Section 5 (of 6) - External Perceptions and Effectiveness of PEFC

34. Which of the following would better enhance PEFC’s reputation?

Engagement with a
wider community of
stakeholders through 47 82%
PEFC’s governance
processes;

Improvements to
relevant elements of 10 18%
the PEFC system;

Total 57 100%

36. Which of the following would better enhance PEFC’s effectiveness?

Engagement with a
wider community of
stakeholders through 24 44%
PEFC’s governance
processes;

Improvements to

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relevant elements of 30 56%


the PEFC system;

Total 54 100%

Section 6 (of 6) - Other

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D. Governance Recommendations by Subject Area

The International Oversight Panel received the following mandate from the
PEFC Council:

In accordance with and subject to the PEFC’s Strategic Plan (including the vision, mission,
purpose, core values & beliefs, principles and goals contained therein), the panel will update
the PEFC Council, its rules and standards by:
• improving external perceptions of PEFC’s governance;
• making the PEFC organisation more effective;
• ensuring that PEFC’s rules and standards are simple and easy to understand;
implement and operate;
• ensuring that PEFC robustly implements and continuously monitors its own
requirements at all levels;
• ensuring “buy-in” from PEFC’s existing stakeholders;
• removing obstacles to dialogue with environmental non-government organisations
(ENGO)s.

To that end, this Governance Review makes recommendations in each of the


six subject areas of its mandate:

External Perceptions of PEFC

6. Quantify PEFC 'Impact'


7. Commit to the 'High Road'
8. Apply the 'Plain-English' Principle
9. Promote an 'Management- Summary' Practice
10. Update Website for Accessibility
11. Invest in Marketing Capacity
12. Join Stakeholder Initiatives
13. PEFC International Conference on Forestry and the Environment
14. Develop Annual Internal Governance 'Check-Up'
15. Volunteer for One World Trust's 2009 Governance Review
19. Expand 'Extraordinary Members' into Forum
23. Launch Tropical Initiative
37. Give Stakeholder Forum Votes in General Assembly
39. Update PEFC Brand

PEFC Effectiveness

1. Establish International Headquarters


2. Review Board By-Laws (Executive Committee)
4. Update Staff Position Descriptions
5. Delegate Operational Authority to Heads of Unit
9. Promote an 'Management- Summary' Practice
10. Update Website for Accessibility
12. Join Stakeholder Initiatives
14. Develop Annual Internal Governance 'Check-Up'
16. Strategically Update Board Model

PEFC Governance Review Page 88 of 104 Final – 23 May, 2008


17. Focus Board Role
21. Expand Secretariat Capacity
22. Tighten Independent Consultant, Panel of Experts' Role
24. Add Fundraising Capacity
25. Increase Support to Members
28. Provide Capacity-Building Assistance
29. Post Position Descriptions for 'Seconded' Staff
33. Revise Engagement Between Board and International Headquarters
34. Review and Clarify Complaints and Appeals Procedure
35. Reduce Number of Board, General Assembly Meetings
37. Give Stakeholder Forum Votes in General Assembly

PEFC’s Rules and Standards

5. Delegate Operational Authority to Heads of Unit


10. Update Website for Accessibility
12. Join Stakeholder Initiatives
18. Recruit Stakeholders into National Governing Bodies
19. Expand 'Extraordinary Members' into Forum
21. Expand Secretariat Capacity
22. Tighten Independent Consultant, Panel of Experts' Role
25. Increase Support to Members
27. Create 'Entry-Level' Tier or Endorsement
28. Provide Capacity-Building Assistance
31. Nominate Members of Panel of Experts from Forum
33. Revise Engagement Between Board and International Headquarters

Implementation and Monitoring of Governance

3. Review Board By-Laws (Executive Committee)


9. Promote an 'Management- Summary' Practice
14. Develop Annual Internal Governance 'Check-Up'
15. Volunteer for One World Trust's 2009 Governance Review
16. Strategically Update Board Model
17. Focus Board Role
22. Tighten Independent Consultant, Panel of Experts' Role
30. Nominate Two Board Members from Forum
31. Nominate Members of Panel of Experts from Forum
32.Name Board Member to Chair Forum
33. Revise Engagement Between Board and International Headquarters
34. Review and Clarify Complaints and Appeals Procedure

‘Buy-In’ from PEFC’s Existing Stakeholders

2. Establish International Headquarters


3. Review Board By-Laws (Executive Committee)
4. Update Staff Position Descriptions
5. Delegate Operational Authority to Heads of Unit

PEFC Governance Review Page 89 of 104 Final – 23 May, 2008


8. Apply the 'Plain-English' Principle
9. Promote an 'Management- Summary' Practice
10. Update Website for Accessibility
14. Develop Annual Internal Governance 'Check-Up'
15. Volunteer for One World Trust's 2009 Governance Review
16. Strategically Update Board Model
17. Focus Board Role
21. Expand Secretariat Capacity
22. Tighten Independent Consultant, Panel of Experts' Role
25. Increase Support to Members
27. Create 'Entry-Level' Endorsement Tier
29. Post Position Descriptions for 'Seconded' Staff
33. Revise Engagement Between Board and International Headquarters
34. Review and Clarify Complaints and Appeals Procedure
35. Reduce Number of Board, General Assembly Meetings
37. Grant Stakeholder Forum Votes

Dialogue with Environmental NGOs

6. Quantify PEFC 'Impact'


8. Apply the 'Plain-English' Principle
10. Update Website for Accessibility
11. Invest in Marketing Capacity
12. Join Stakeholder Initiatives
13. PEFC International Conference on Forestry and the Environment
16. Strategically Update Board Model
18. Recruit Stakeholders into National Governing Bodies
19. Expand 'Extraordinary Members' into Forum
20. Add Stakeholder Forum 'Right of Agenda'
23. Launch Tropical Initiative
26. Sponsor Applied Research in Environmental Impact
27. Create 'Entry-Level' Membership Tier
30. Nominate Two Board Members from Forum
31. Nominate Members of Panel of Experts from Forum
32. Name Board Member to Chair Forum
33. Revise Engagement Between Board and International Headquarters
34. Review and Clarify Complaints and Appeals Procedure
36. Leverage Engagement with FSC
37. Grant Stakeholder Forum Votes
38. Lead Forestry Policy on Carbon

PEFC Governance Review Page 90 of 104 Final – 23 May, 2008


E. PEFC Stakeholder Forum

NAME OF BODY: Stakeholder Forum


Purpose:

To expand the idea of “Extraordinary Members” into a forum, encouraging a broader range of
stakeholders and granting specific rights and responsibilities within the PEFC’s governance
process. International institutions can become members and contribute to the PEFC process in a
number of ways, including membership fees, seconded staff, technical expertise and resources,
joint projects, or organisational leadership.

References

! PEFC Council Statutes (current statutes as adopted at the General Assembly 27 October 2006)
! Governance Review Report Recommendations 19, 20, 30, 31, 32, 37

Accountable To / Responsible For:

! The Stakeholder Forum will be part of the General Assembly of PEFC, the highest authority
of PEFC, with rights and responsibilities as set out below
! The Stakeholder Forum has the right (as a collective body) to add policy and other issues to
the agenda of the PEFC General Assembly in its periodic meetings, and to convey to the
PEFC International Headquarters Requests for Review on specific issues or questions
identified by its members
! The Stakeholder Forum has the right to nominate two members of the PEFC Board of
Directors through the PEFC Nominating Committee
! The Stakeholder Forum has the right to nominate technical/standards advisors to the PEFC
Panel of Experts.
! The Stakeholder Forum will acquire one vote per member up to a maximum of 50% (rounded
down) of those of PEFC Council (e.g. if there are 35 PEFC Council members who have a total
of 61 votes, the Stakeholder Forum will have a maximum of 30 votes. If there are 25 members
of the Stakeholder Forum, they will have 25 votes.

Membership:
! There will be an annual membership fee at rates to be determined by the Board. The
Governance Review Panel envisages the fee per member organisation to be of the order of
$2,000 to $10,000 per annum and that such fees should be designated funds for the purpose of
providing Secretariat and similar facilitative services to the Stakeholder Forum. In
exceptional circumstances, the Governance Review Panel suggests that, with the consent of
the Board, PEFC be willing to accept services and/or expertise in kind in lieu of annual fees.
! Eligibility will apply to international organisations (defined as having substantial operations
in more than one country) which have interests in PEFC’s activities, and as such are
stakeholders. This includes all current extraordinary members, but extends eligibility to
many international organisations that would not currently be eligible. Examples of the
eligible types of international organisation include:
o Trade associations,
o Labour associations e.g. for forestry and/or timber production workers,
o Environmental NGOs,
o Timber production companies,
o Governmental and/or quasi governmental bodies,
o Standards bodies,
o Certification and accreditation bodies,
o Academic and/or scientific bodies,
o Consumer associations.

PEFC Governance Review Page 91 of 104 Final – 23 May, 2008


! Eligibility for membership of the Stakeholder Forum (based on the above criteria) should be
determined by the Director-General. An organisation that applies for membership and is
refused membership on the grounds of ineligibility should have the right of appeal to the
Board. The Board must convene an appeals panel involving at least two members of the
Panel of Experts to make recommendations on eligibility. This is a change to Article 3 (6).
! Members of the Stakeholder Forum should be subject to the same rules as PEFC Council
Members regarding suspension or termination of membership for violations - see Article 3 (4)
! The Stakeholder Forum should be co-chaired (non-voting) by a member of the PEFC Board
who is not one of the Board members proposed for nomination by the Stakeholder Forum

Frequency of Meetings:
! To be determined by the Stakeholder Forum, but the Governance Panel suggests one physical
meeting per annum in addition to the Stakeholder Forum’s role as part of the General
Assembly
! The Governance Panel encourages the Stakeholder Forum to use electronic media for
discussion and debate between meetings

Special Voting Rules:


! Voting within the Stakeholder Forum should be by simple majority voting.
! The Stakeholder Forum should decide for itself how its votes within the General Assembly
are allocated. Options include:
o Votes cast pro rated for the number of votes available to the Stakeholder Forum.
(For example, if there are 40 members with an allocation of 30 votes and those 40
members vote 24 in favour and 16 against, the 30 votes would be cast 18 in
favour and 12 against).
o Stakeholder Forum’s vote on a simple majority basis, its entire quota of votes
then deployed as a block vote. (In the above example, all 30 votes would be cast
in favour.)
o A mixture of the above, depending on the subject matter. For example, the
Stakeholder Forum might wish its votes to be deployed pro rata on policy
matters but to be deployed as a block vote on admissions

Other Standing Orders:


! The Stakeholder Forum should be enabled to amend these and determine its own standing
orders, subject to the agreement of the Board.
! The Board should only refer back a suggested change to the standing orders if the change is
deemed to be unfair, excluding or inequitable towards one or more stakeholder groups

Implementation issues and timescales:


! Will require amendments to PEFC Council Statutes to be effective
! An initial meeting of the Stakeholder Forum should take place within a few months of the
Stakeholder Forum being launched
! The Stakeholder Forum’s nominees for the Board should be made at the next available
opportunity – if one or two vacancies emerge on the Board before the Stakeholder Forum
becomes active, ideally these vacancies should be retained for the initial Stakeholder Forum
nominees
! Ideally the Stakeholder Forum should be activated and:
o Participating in General Assembly in 2009;
o Contributing nominees to the Board and the Panel of Experts by the end of 2009;
o Voting at General Assembly by 2010.

PEFC Governance Review Page 92 of 104 Final – 23 May, 2008


F. PEFC Organisational Structure (Current)

PEFC Governance Review Page 93 of 104 Final – 23 May, 2008


Revised PEFC Organisational Bodies and Structure

National Governing Bodies (NGBs) – As PEFC is a membership organisation,


NGBs remain the ultimate source of authority. To accomplish their Mission,
though, they have delegated certain authority to the Board of Directors and
the International Headquarters to carry out and represent it internationally.

General Assembly – The General Assembly is the decision-making body of


the organisation, comprised of the PEFC Council and the Stakeholder Forum.
Member-Schemes in the PEFC Council have between one and five votes. The
Stakeholder Forum collectively will have votes equal to half the number
(rounded down) of the total votes in the PEFC Council38.

PEFC Council – Members of the Council represent Schemes in their country in


the General Assembly.

Stakeholder Forum – The Stakeholder Forum is made up of international


organisations supportive of sustainable forest management, and engaged in
improving and expanding PEFC work39.

Board of Directors – The Board of Directors is drawn from internal and


external sources as appropriate, and represents a mix functional capacities
and representation of key constituencies within PEFC.

Executive Committee – The Executive Committee is made up of the Chair and


Vice-Chairs (2) of the Board, who are chosen from by Board members and
who work closely with the Director-General guiding the organisation.

Sub-Committees – The Board of Directors convene and lead standing or ad


hoc Sub-Committees (e.g. on Finance and Audit, Fundraising, or Social Issues)
that support the work of International Headquarters, and serve as venues for
in-depth or topical discussion among members of the General Assembly.

International Headquarters – Led by the Director-General, the staff of the


International Headquarters implements the work of the PEFC, and has access
to the specialised knowledge of Sub-Committees in a variety of areas.

Independent Consultants – Qualified Independent Consultants are


responsible for reviewing proposed new member schemes for compliance
with the PEFC meta-standard.

Panel of Experts – The Panel of Experts is a pool of consultants that reinforces


the work of the Independent Consultants, and upon request by the Director-
General or Board, supports the organisation by providing advice and

38 See ‘Appendix E – The Stakeholder Forum’ for specifics on voting rights


39 See ‘Appendix E – The Stakeholder Forum

PEFC Governance Review Page 94 of 104 Final – 23 May, 2008


interpretation on technical issues to the General Assembly, the International
Headquarters.

PEFC National
Governing
Bodies (NGBs)

General Assembly

Stakeholder
PEFC Council
(One to Five Votes per
Forum
Member) (Up to 50% of PEFC
Council Votes)

PEFC Board of
Directors Sub-Committees
(Twelve Members, (Standing or Ad Hoc)
PEFC Panel of Two Nominated by
Experts Stakeholder Forum)
(Nominated by PEFC
Council and Executive
Stakeholder Forum) Committee

PEFC
PEFC Director-
Independent
General
Consultants International
(Qualified Pool of Headquarters
Technical Specialists)

PEFC Governance Review Page 95 of 104 Final – 23 May, 2008


G. PEFC Assessment, Endorsement and Mutual Recognition Process (Current)

Scheme Applicant submits scheme with


completed checklist on paper and in electronic
form to the PEFC Council

PEFCC Web Page


For comments within PEFCC Secretariat makes an invitation for
target time of 60 days Tenders (4 weeks)

General Assembly Members for PEFCC Board of Directors appoints


national comments within
target time of 60 days Independent Consultant at next Board meeting
and contract signed

comments
Independent Consultant starts scheme
assessment.

Make
mandatory
optional Report back to Board of Directors and revisions
applicant within a target time of 7 weeks. to scheme

Panel of Experts Board decides on the conformity of the scheme


after receiving the report and if the Board
Peer review of the assessment report
decision is positive it recommends endorsement
within a target time of 2 weeks Applicant
and mutual recognition to the General
informed
Assembly (GA)
of decision
and can
positive negative either:

Postal Ballot of GA Appeal against the Board of Directors’


with 4 weeks to
decision and have the scheme
respond
reconsidered at the next General Assembly.

If approved, scheme is
General Assembly (GA) members If rejected, the applicant is
endorsed and mutually
recognised by members of the approve or reject informed and can request to
PEFC Council and official recommendation by the Board have scheme reconsidered at
announcement is made on the next General Assembly
of Directors via postal ballot
PEFC Council Web Page

PEFC Governance Review Page 96 of 104 Final – 23 May, 2008


Revised PEFC Assessment, Endorsement and Mutual Recognition Process

Recommended

Capacity
Prospective PEFC International
Building
member/scheme Headquarters may
decides to apply for work with prospective
mutual recognition by member/ scheme to
PEFC improve quality

Independent Submission Amendment


Assessment

Independent PEFC International Transmits


Prospective
Consultant and Panel Transmits Headquarters Rejection
member/scheme
of Experts review, transmits application
chooses to amend
comment, and make to external review for
scheme or appeal to
recommendation on assessment and PEFC Board
proposed scheme recommendation

Appeal
Transmits
Timeline (Illustrative) Appeal of
Independent PEFC Board of
1. Prospective member may work with Rejection
Assessment Directors reviews
PEFC International Headquarters scheme, technical
[Ongoing as necessary until submission] assessment and
2. Upon submission, scheme transmitted decides on status
for Independent Assessment
(Consultant and Panel of Experts) for Transmits
comment, review, and recommendation Approval
(including with Approval
[100 Days]
3. Decision of Independent Assessment conditions)
transmitted to Members (on approval),
back to prospective member (on
rejection), or Board of Directors (on
appeal of Assessment’s recommendation)
4. Decision by Board of Directors (in PEFC General
Assembly Rejection
special session) upon appeal of rejection
or findings of Assessment (if applicable) decides on
[14 Days] endorsement by
5. General Assembly decides on Internet ballot
endorsement by Internet ballot [14 Days]
Acceptance

Proposed Scheme
receives mutual
endorsement

PEFC Governance Review Page 97 of 104 Final – 23 May, 2008


H. ‘Evaluating Legitimacy and Quality of Forest Governance’ by Tim
Cadman

Tim Cadman, a Ph.D. candidate at the School of Government in the University of


Tasmania is completing a dissertation on the evaluation of global forest governance
systems, and presented some of his findings on governance and PEFC to the Panel
during its third meeting.

He generously agreed to the inclusion of the following analysis in this Review.

Evaluating Legitimacy and Quality of Forest Governance


Tim Cadman
University of Tasmania
tmcadman@utas.edu.au

Summary
This brief paper provides a theoretical approach to solving, the ‘problem’ of
legitimacy, its relationship to quality of global (forest) governance, and how
to determine, or evaluate, quality. Here, it is argued that legitimacy of global
governance is understood institutionally in terms of structure, process and
outcomes, and it is the degree of interaction between these elements, which
determines quality of governance. Each of the governance arrangements
linked to legitimacy in the previous sections (such as accountability and
transparency) are located hierarchically within an assessment framework
based upon principles, criteria and indictors (P, C & I). The actual relationship
of these P, C & I to the structure and process of governance is explained
diagrammatically. An evaluative matrix, based upon these P, C & I and
related also to their institutional expression, is also presented.

Discussion
In the literature used in this paper, which spans approximately two decades,
it is possible to discern an interest in coming to grips with the structures and
processes, which underpin contemporary environmental governance. This
emerges relatively early in the material, with a clear distinction made between
governing, understood as a process of coordination, steering, influencing or
‘balancing’ social-political interactions, and governance, interpreted as the
structure that emerges in a social-political system as an outcome of
interaction.40 This idea re-emerges subsequently in terms of ‘governance as
structure’, understood as the models utilised by various institutions (and
repeating some of the debates surrounding typologies of governance), and
‘governance as process’, again referring to the idea of steering or co-
ordinating.41

40
Kooiman, “Findings, Speculations and Recommendations”, pp. 258-259.
41
Pierre and Peters, Governance, Politics and the State, pp. 14-24.

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Elaborating further on structure and process, it is also clear from the literature
that the structures of contemporary governance are understood as being more
participative in nature, in that they include more actors than the traditional
state-bureaucracy model. Secondly, the processes through which decisions are
made - recognising the broader participation of a range of actors - are more
discursive in nature, requiring more deliberation than models oriented
around command and control. The interaction between structure and process
as a whole could be interpreted as comprising the ‘co’ arrangements, referred
to earlier, and relates to participation within an institution’s structure and
deliberation via its processes, which together describe the nature of
collaboration in ‘new’ governance.

It is this interaction, which results in substantive outcomes, such as the


formulation of criteria, or setting of standards.42 Structure, process and
substance are seen as interrelated components necessary for the solving of
problems within contemporary governance.43 Together, they have been
identified as the key determinants of ‘governability’, defined as “the total
quality of a social-political system to govern itself within the context of
broader systems of which it is a part”.44

However, even if quality of governance is conceived in terms of structure


process and outcomes, it is nevertheless still necessary to address the problem
of legitimacy in contemporary theory, since there is disagreement between
global and state-centric theorists as to whence legitimacy is derived. Scholars
with a more global perspective have previously viewed legitimacy in terms of
both outputs (equated to efficiency, or effectiveness) and inputs (equated to
democracy, or alternatively in more recent studies, interest representation,
and accountability and transparency). Those studying public administration
and public policy have tended to focus largely on output legitimacy, whilst
those in the field of comparative politics have followed two schools of
thought, depending on whether their focus is on democracy (in which case
they favour input legitimacy) or efficiency, in which case they concentrate on
output legitimacy.45 Whatever the scholarly perspective, the interrelationship
between structure, process and outcomes is clear, and may be conveniently
married to both input and output legitimacy, since input legitimacy concerns

42
Kooiman, “Findings, Speculations and Recommendations”, p. 260
43
Kooiman, “Social-Political Governance: Introduction” p. 5. See also Robert Falkner, “Private
Environmental Governance and International Relations: Exploring the links”, Global Environmental
Politics 3(2) (2003) pp. 72-87. For a discussion on the interplay between civil society, globalisation,
forest management and governance, and which reflects much of the thinking contained in this
introduction, see also Gordon M. Hickey and John L. Innes, “Monitoring suatinable forest management
in different jurisdictions”, Environmental Monitoring and Assessment 108 (2005) pp. 241-260. For a
detailed investigation of ‘new’ forest governance, see Peter Glück, Jeremy Rayner, Benjamin Cashore,
Arun Agrawal, Steven Bernstein, Doris Capistrano, Karl Hogl, Bernd-Markus Liss, Connie
McDermott, Jagmohan S. Maini, Tapani Oksanen, Pekka Ollonqvist, Helga Pülzl, Rwald Rametsteiner
and Werner Pleschberger, “Changes in the Governance of Forest Resources”, in Forests in the Global
Balance ed. G. Mery, R. Alfaro, M. Kaninnen, and M. Lobovikov (Helsinki: IUFRO, 2005), pp. 51-74,
at pp. 55-64.
44
Kooiman, “Findings, Speculations and Recommendations”, p. 259.
45
Kjaer, Governance, p. 190.

PEFC Governance Review Page 99 of 104 Final – 23 May, 2008


itself with the structures and processes of governance, whilst output
legitimacy is more interested in outcomes. This interrelationship can be
expressed figuratively (see Figure 1 below).

Figure 1 Conceptual model of contemporary global governance

INSTITUTION

Governance
System

Structure Interaction Process Inputs


(Participative) (Collaborative) (Deliberative)

Outcomes Outputs
(Products: criteria,
standards, policies, etc.)

(Determination of
Legitimacy governance
quality)

Quality of governance can consequently be understood as the interrelationship


between structure, process and outcomes, expressed in the observation that “the more
‘balanced’ these elements, the more ‘governable’ is the system”.46 This governability,
or quality of governance, is therefore largely determined by the extent to which the
interaction within the institution as a whole (understood in terms of both structure and
process) leads to effective and substantive outcomes. In this case, being able to
analyse the collaborative arrangements, which underpin the institution, plays a
significant role in determining the total quality of the system under investigation.

Evaluating governance quality


Once the relationship between structure, process and outcomes is understood, there
remain a number of problems confronting the development of a method for evaluating
quality of governance. Firstly, although a wide range of scholars from both global
and state-centric perspectives have commented at length on the various attributes of
‘good’ governance, they have generally not examined the nature of the relationship
between those arrangements as a whole, since they have tended to focus on individual

46
Jan Kooiman, “Societal Governance” in Debating Governance, p. 159.

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attributes (the most notable being accountability), or groups of attributes according to
particular areas of policy (such as forest certification), or institutional focus (such as
the European Union or the World Bank). Secondly, the literature as it exists is
contradictory as to how these governance arrangements are expressed institutionally.
Lastly, and as a consequence of the first two problems, there is at present no simple
matrix for evaluating governance quality. This section offers three analytical tools to
address these problems.
Firstly, for the purposes of understanding the nature of the relationship between the
various governance arrangements already discussed in the review of governance
literature above, a consistent hierarchical framework of principles, criteria and
indicators (P, C & I) relating to governance quality is offered here.47 The intention
behind the placement of these attributes within such a framework is to ensure that
they are located at the right level, to allow for a top-down analysis of principles via
criteria and subsequently to indicators. Consistency in this context relates to the
correct location within the framework: it is important that parameters are placed at the
appropriate level and do not overlap or duplicate those at another, and are linked back
to the appropriate parameter at a higher level. Such P, C & I provide the means for
reporting on the actual performance of each of the case studies explored subsequently.
At the principle level, given the understanding of governance within the literature
in terms of structure and process, and the argument advanced here that the total
quality of a governance system relates to the interaction between structure, process
and outcomes, these elements constitute the basis for a set of related principles. In this
context, a principle is defined as a fundamental rule, which serves as a basis for
reasoning, the objective of which reasoning is to ascertain the function of the total
system in respect to explicit elements of governance. A principle can also express a
certain perspective regarding a specific aspect of the system as it interacts, in this
context, with the overall governance system.48 Figure 1.6 has identified ‘participation
as structure’ and ‘deliberation as process’, both of which contribute to the substantive
outcomes, or products, of the system. The analysis, which follows, consequently looks
at the governance arrangements discussed above in terms of their relationship to either
structure or process. Here the perspective, or attitude, adopted regarding participation
as the fundamental structural aspect of governance is that it should be meaningful.
This term is frequently associated with participation in much of the literature, and
serves here as a normative, qualitative descriptor.49 The second principle, referring to
the procedural aspects of governance, has been ascribed the term productive as its
descriptor.50 In this context the principle is more than a statement about the
democratic legitimacy of a process, as it refers both to the quality of deliberations, as
they occur within the system, as well as the quality of the outcomes, or products, of
those deliberations. This specific analytical approach is discussed further in the
context of Figure 1.7 below.

47
This approach is adapted from Lammerts van Beuren and Blom, Hierarchical Framework, pp. 5-9.
48
Lammerts van Beuren and Blom, Hierarchical Framework, p. 34.
49
This term first appears in the United Nations Declaration on the Right to Development, adopted by
General Assembly resolution 41/128 of 4 December 1986 (Gaventa, John, “Making Rights Real:
exploring citizenship, participation and accountability”, Journal of International Development Studies
33 (2) (2002) pp. 1-11).
50 See for example John Dryzek and Valerie Braithwaite, “On the Prospects for Democratic

Deliberation: Values Analysis Applied to Australian Politics” Political Psychology 21 (2) (200),
pp. 241-266.

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Criteria are parameters functioning at the next level below principles, and
demonstrate compliance with them in relation to specific aspects or states of the
system. They are intended to facilitate the assessment of principles that would
otherwise be ideational and non-measurable.51 A criterion can also be described as “a
category of conditions or processes” against which, a system can be assessed.52
Criteria are themselves not usually capable of being measured directly, however, but
are formulated to provide a determination on the degree of compliance.53 They are
consequently linked to indicators, which are hierarchically lower, and which represent
quantitative or qualitative parameters, and do describe conditions indicative of the
state of the governance system as they relate to the relevant criterion.54
Any discussion regarding the criteria associated with the principles of meaningful
participation and productive deliberation therefore occurs simultaneously with their
associated indicators. In this study, the structural principle of meaningful participation
is demonstrated through two criteria, interest representation and organisational
responsibility. In the discussion of the governance literature presented above interest
representation has been linked to three elements of governance, which function on the
indicator level: inclusiveness, demonstrating who participates in a governance system;
equality, indicating the nature of the relationship between participants; and resources,
referring to the economic, technical or institutional capacity of a participant to
represent their interests within the system. The second criterion, organisational
responsibility is comprised of indicators, accountability and transparency, which are
usually treated together in the literature, and refer to the extent to which the behaviour
of participating organisations can be both called to account both inside the institution
and externally to the public at large, as well a being is visible, to other actors within
the institution, and beyond.
The procedural principle of productive deliberation is demonstrated through two
criteria, decision-making and implementation. Three indicators are linked to decision-
making: democracy, not referring a specific mode of democracy, but rather the extent
to which a system can be deemed to be functioning democratically; agreement,
referring to the method in which decisions are reached, such as voting, or consensus;
and dispute settlement, indicating the system’s capacity manage conflict when there is
no agreement, or there are challenges to decisions made. Three indicators are linked to
implementation: behaviour change, used to determine whether the implementation of
agreements, or substantive outcomes, results in changed behaviour regarding the
problem, which the system was created to address (in the case of this study, forest
management); problem solving, referring to the extent to which the system has solved
the problem it was created to address (understood broadly in this study as
unsustainable forest management); and durability, capturing the two related elements
of adaptability and flexibility, as well as longevity. Table 1 below sets out the
hierarchical relationship between these P, C & I.

51
Lammerts van Beuren and Blom, Hierarchical Framework, p. 20.
52
The Montréal Process, Criteria and Indicators for the Conservation and Sustainable Management
of Temperate and Boreal Forest Ecosystems, Second edition, December 1999, p. 5.
53
Lammerts van Beuren and Blom, Hierarchical Framework, pp. 22 and 34.
54 Lammerts van Beuren and Blom, Hierarchical Framework, p. 22.

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Table 1 Hierarchical framework for the assessment of governance quality

Principle Criterion Indicator

“Meaningful participation” Interest representation Inclusiveness

Equality

Resources

Organisational responsibility Accountability

Transparency

“Productive deliberation” Decision making Democracy

Agreement

Dispute settlement

Implementation Behavioural change

Problem solving

Durability

It should be noted that the P, C & I method of evaluation suggested here, and
derived from the forest management literature, is not without its critics in the
field of environmental science. Indicators in particular have been labelled a
“pathological corruption of the reductionist approach” resulting in a shadow
world based on voodoo science.55 This has led to the conclusion that they are
best used in a controlled manner to account for the critical dimensions of a
system, and only in conjunction with other simultaneous views.56
With these observations in mind, the second tool, designed to located these P,
C, & I within their institutional context, is presented here. This model
accounts for those critical institutional dimensions (or arrangements) within
the governance system to which the indicators and associated criteria and
principles presented above have been hierarchically related. See Figure 1.2
below.

55 Roger Bradbury, “Are indicators yesterday’s news?” Institute of Environmental Studies


(ed) Tracking progress: Linking Environment and Economy through Indicators and Accounting
Systems. Conference Papers. 1996 Australian Academy of Science Fenner Conference on the
Environment (Sydney: Institute of Environmental Studies, The University of New South
Wales, 1996) reproduced at http://www.tjurunga.com/biography/roger-papers.html
(accessed 15/09/07), p. 6.
56 http://www.tjurunga.com/biography/roger-papers.html, p. 7.

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Figure 1.2 Institutional model of governance quality

KEY
Typeface indicates hierarchical relationship at the PRINCIPLE, CRITERION and
INDICATOR levels.
It should be noted in this representation that implementation is to be
conceived in terms of the interaction between structure and process, which
have delivered the outcomes in need of implementation. This model therefore
differs slightly from the hierarchical framework presented in Table 1.3. This
incompatibility should be seen as having arisen out of the attempt to
understand governance from an alternative, but simultaneous viewpoint,
which takes a greater account of the complexity of the interactions within the
system.57

57 http://www.tjurunga.com/biography/roger-papers.html, pp. 8-9 (in relation to the


climate system, rather than a governance system).

PEFC Governance Review Page 104 of 104 Final – 23 May, 2008

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