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To boost exports, domestic cos go in for forest certification
Hindu Business Line - 27 Sep 2009

As international buyers insist on the Forest Stewardship Council (FSC) certification as a necessary prerequisite to place orders, more and more domestic companies are going in for the qualification to help increase their exports.

Forest certification is a mechanism for forest monitoring, tracing and labelling timber, wood and pulp products, besides non-timber forest products where the quality of management is judged against a series of agreed standards. Quality of management includes environmental, social and economic perspectives. The certificate is issued by an independent party, which verifies that an area of forest is managed to a defined standard.

“From the export market, there is a demand for certified suppliers. Companies overseas like Marks and Spencers, which source from India, look for suppliers which have been certified as per FSC’s 10 principles,” said Dr T.R. Manoharan, Senior Coordinator, Worldwide Fund for Nature (WWF)-India.

He added that the 10 principles underline that all Government laws regarding forests need to be stringently followed, while the company has to refrain from using genetically modified plants. Also, the companies concerned need to follow rules regarding payment of its workers, such as maintaining parity between the wages of men and women and not allowing child labour.

According to Dr Manoharan, at present 25 Indian companies in the paper and timber business have secured such certificates, while 10-15 more are in the pipeline. This includes ITC, which availed a certificate last month for a unit of its paper business based out of Coimbatore, Tamil Nadu.

“The unit in Coimbatore is where they collect used paper and waste material and recycle it. ITC has also applied for certification for its other units,” he said. Other major companies include Ballarpur Industries Ltd (BILT), Relaxo Footwear, Khanna Paper Mills and Century Plyboards.

Mr S.N. Venkataraman, General Manager (Paperboards and Speciality Papers Division), ITC, said that the company, since 2008, has planted eight trees for every tree it cut and it is now a carbon positive company. He added that ITC, which is now focussing more on its other businesses besides tobacco, sources most of its fibre for its paper plants from four plantations in India.

“Less that 50 per cent of the net revenue from the 2008-09 fiscal came from the tobacco business. This shows how fast our other businesses are growing. Over the next five years, we’ve committed up to half of our sales from FSC certified products,” he said.

Among the 10-15 companies awaiting certification is Tamil Nadu Newsprint and Paper Ltd (TNPL). However, names of the other companies could not be availed.

Elaborating on the system of audit, Dr Manoharan said that there is an annual check on the company’s premises, by the auditor assigned by the FSC. Moreover, if FSC senses any discrepancy, it can conduct its own surprise check. He added that FSC has assigned several certifying bodies such as Smartword/Rainforest Alliance, which keep a check on the standards followed by companies.

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