The core role of the new Broader Market Recognition Coalition (BMRC) is to increase consumer market awareness and appreciation of its tropical member countries’ national sustainable forestry systems (NSFS).
In communicating the latter’s environmental, social and economic benefits, the objective is to strengthen members’ sustainability credentials and boost demand for their legal and sustainable forest products. This, in turn, is intended to incentivise and underpin sustainable forest management – as well as attract more member countries to the BMRC. Essentially, it’s about harnessing the increasingly sustainability conscious international market to the cause of tropical forest maintenance.
The BMRC has six founder members, Indonesia, Cameroon, Ghana, Liberia, the Republic of the Congo and Guyana. Its roots can be traced to the Tropical Timber Accord, signed by these and other countries and presented to COP 26 in Glasgow in 2021.
This contended that the EU and UK’s Forest Law Enforcement Governance and Trade (FLEGT) programme, which is about incentivising sustainable and legal forest management by delivering market access, has had positive results. Under FLEGT, supplier tropical countries enter Voluntary Partnership Agreements (VPAs) with the EU and the UK, undertaking to establish national timber legality assurance systems. Once these systems are approved by the EU, the UK and the producer country government, the latter can issue FLEGT licences, which exempt goods from further import legality due diligence in EU and UK markets.
While so far only Indonesia has achieved licensing status – although with Ghana set to follow suit in 2024 (see p40) – it’s acknowledged that other partner countries have progressed their timber legality assurance and tracking systems. FLEGT is also accepted as pushing environmental performance up the agenda in both tropical timber consumer and producer countries.
However, the Tropical Timber Accord maintained, FLEGT’s impact and appeal is limited by the fact that it’s only about access to EU and UK markets, whose share of the global tropical timber trade has been in historical decline. What was needed, said the Accord, was something new “to incentivise good forest governance in tropical countries through broader market recognition of national systems”. This, concluded subsequent discussions, should be an “initiative that defines and recognises a system of rulesbased legality and sustainability for tropical countries which supports governance and strong global collaboration”. The BMRC is designed to be that initiative.
The Coalition’s Roadmap, agreed this summer, has been developed through wide stakeholder engagement. It’s involved input from member countries’ governments, the private sector and civil society.
It explains that members commit to their NSFS being assessed and validated against international sustainable forest policy criteria and indicators. They must be developed and backed by all stakeholder groups and comply with laws that address environmental, social and economic principles, ensure nationwide enforcement and also involve independent third party compliance monitoring.
If the BMRC’s lead body, its Council, is initially unable to endorse an NSFS, an action plan will be drawn up for corrective action. Countries will be supported in getting to endorsement level through best practice exchange with other members and donor backing, leveraged by the BMRC.
The Roadmap does not bill the BMRC as a replacement for third party sustainability certification, as provided by FSC and PEFC, but it does say national sustainability forestry systems have advantages. They encompass the entire national landscape, whereas thirdparty certification covers individual forest management units, which can be “small islands of responsible production in a sea of illegal and destructive practice”. Moreover, third-party certification is voluntary, whereas national systems are embedded in law.
“Where significant reductions in deforestation and increased afforestation have occurred in the past, it has always been in the context of national policies designed to promote socio-economic development on the one hand, and sustainable use of the land resources on the other,” states the Roadmap.
In terms of governance and structure of the BMRC, the Council, including representatives of each members’ government, private sector and civil society, will be the executive. It will decide on admission of new members and endorsement of NSFSs and lead on market promotion of BMRC countries’ NSFS and forest products. A small secretariat will undertake day-to-day management, with responsibilities including BMRC communications, trademarks and logo use.
An independent endorsement criteria review body will make recommendations to the Council on criteria and indicators for endorsement of NSFSs, while independent assessment and broader market recognition panels will respectively assess NSFSs against endorsement criteria and advise on the Systems achieving political and market recognition. Each member country also has a national committee.
A BMRC chain of custody standard will build on those of existing certification schemes, such as the FSC, PEFC and SVLK. It will also align with the ISO38200 standard for wood and wood product chain of custody. The idea is that companies accredited to these can easily adapt to the BMRC’s standard.
On-product BMRC labelling won’t just be the preserve of member countries with endorsed NSFS, but also those en-route to endorsement. The proviso is that they use graduated claims alongside the logo, such as “progressing to sustainability”.
The message behind the label will be that products delivered by BMRC NSFSs “are sustainable (or progressing to sustainable), contribute to achievement of socio-economic goals, and provide for wider environmental benefits, such as biodiversity conservation”.
“By connecting demand with supply from NSFSs, and by providing for phased market recognition of NSFSs depending on progress, the BMRC mechanism will also help to support and incentivise members’ responsible national agencies to implement effective forest governance, enforcement, and other regulatory and non-regulatory measures to deliver legal and sustainable forestry,” says the Roadmap.
BMRC marketing will engage key decision makers, such as architects, designers, civil engineers and other specifiers and will lobby for harmonised import regulations to combat trade in illegal and unsustainable forest products. It will also support research into life cycle impacts of products delivered under BMRC-endorsed forest systems. This will “provide for credible scientifically supported messaging on their low carbon footprint and other environmental benefits”.
The view is that the importance attached to independently endorsed sustainable forestry systems will grow globally as more consumer markets follow in the footsteps of those such as the US, EU, Japan and Australia and implement timber and forest product import controls to ensure legal and sustainable sourcing. And that is set to include the biggest tropical timber market of all, China.
At the same time, sustainability is becoming an increasingly central plank of public and private sector procurement policy.
“By demonstrating conformance of robust NSFSs with clearly stated principles, BMRC will provide a harmonised framework for recognition of legal and sustainable forest products from participant tropical countries in the import regulations and procurement policies of trade partners,” says the BMRC Roadmap.
Such systems, it adds can also ensure and assure sustainable supply of non-timber forest products, from foodstuffs, to medicinal plans, resins and fibres. These support the livelihoods of two billion people worldwide.
Another BMRC objective is to make the forest product industries of member countries more investible. As sustainability moves up the agenda of government, business and consumers, financial institutions and the wider investment community internationally are increasingly putting money into environmental, social and governance (ESG) compliant finance instruments. The Global Sustainable Investment Alliance estimated in 2020 that the value of sustainable investment in major financial markets globally was over US$35trn. Since then, it’s clearly grown. Research by PwC found that three-quarters of large investors, including pension funds and insurance companies, intended to stop buying conventional funds in favour of ESG alternatives by 2022.
The BMRC says it will help member countries tap into this growing investment pot by “giving confidence to national and international creditors and investors that BMRC-endorsed NSFS are robust and implemented in accordance with internationally recognised principles”. It will also promote BMRC-endorsed NSFSs “as a factor to improve the credit rating of forest sector enterprises in participant tropical countries”.
The Roadmap says that BMRC will initially need overseas development aid seed funding from donor governments. Longer term it will look to secure domestic public funding from member countries, given that endorsed and effectively enforced NSFSs should increase their tax take. It will also explore charging licence fees for use of the BMRC label along the supply chain and “innovative mechanisms to raise finance for NSFSs in participant countries and support BMRC activities at international level”. These could include blended finance initiatives, where “public and private funders pool capital to reduce risk for private investors, while enabling deployment of large projects or provision of credit to large numbers of smallholders”.
