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SHARE joins Boreal Business Forum to represent institutional investor interests in CBFA

SHARE has joined the “Boreal Business Forum” of the Canadian Boreal Forest Agreement (CBFA), an agreement signed in May 2010 by the Forest Products Association of Canada (FPAC), the twenty-one FPAC member companies, and nine environmental organizations. The Forum is made up of representatives of institutional investors and large forest products consumers, including publishers and printing companies, tissue paper manufacturers and forest products retailers.

The main purpose of the Boreal Business Forum (BBF) is to monitor progress in the implementation of the CBFA by reviewing independent progress reports to be produced under the agreement, and to respond to questions from marketplace participants.

First Boreal Business Forum (BBF) meeting

The first BBF meeting was held in Toronto on November 1-2, 2010. Since the CBFA was at an early stage of implementation and there was no independent progress report to review yet, the meeting’s materials and discussion focused on examining the CBFA itself, the BBF’s role in the CBFA process, and the expectations of each BBF member about the agreement’s outcomes. Among other things, SHARE noted institutional investor clients’ interest in a much larger area of Canada’s Boreal forest becoming certified to the superior environmental and social standards of the Forest Stewardship Council (FSC) as a result of the CBFA process. Under the agreement, signatory companies made a commitment to implement world-leading sustainable forest management practices in their Boreal tenures. Those standards of practice will be developed under the CBFA using the FSC National Boreal standard as a “reference point” (See Key Elements of the CBFA below for details).

CBFA signatories include the following publicly traded companies (which are all FPAC members): AbitibiBowater, AV Group (a subsidiary of India’s Aditya Birla Group), Canfor Pulp Limited Partnership, Canfor Corporation, Cascades Inc., West Fraser Timber Co. Ltd, LP Canada (a subsidiary of Louisiana-Pacific Corporation), Mercer International, Tembec Inc., and Weyerhaeuser Company Limited. The CBFA states that non-FPAC members and other industry associations and environmental organizations can sign the CBFA, subject to the approval of a CBFA committee and provided the conditions set in the CBFA for new signatories are met.

The second BBF meeting will be held in Montreal in late May.

Key elements of the Canadian Boreal Forest Agreement (CBFA)

The Canadian Boreal Forest Agreement is one of the largest conservation agreements worldwide. If fully implemented, it will conserve significant areas of Canada’s vast Boreal forest, protect threatened woodland caribou and provide a competitive market edge for participating companies.

The CBFA covers more than 72 million hectares of public forests in the Canadian Boreal forest where FPAC member companies have the right to harvest timber. An early component of the CBFA is the suspension of logging on nearly 29 million hectares of Boreal forest, which represent virtually all Boreal caribou habitat within company tenures, to allow for caribou protection planning. Another component is the suspension, by signatory environmental organizations, of divestment and “do not buy” campaigns targeting the Boreal operations and products of companies participating in the CBFA. Environmental organizations will provide gradual support for environmentally responsible forest products as the CBFA’s milestones are accomplished.

The CBFA seeks to achieve the following six strategic goals:

  1. The development and implementation of world-leading sustainable forest management practices in the Boreal forest, based on the principles of ecosystem management, active adaptive management, and third party verification;
  2. Completion of a network of protected areas that together represent the diversity of ecosystems within the Boreal region and serve to provide ecological benchmarks;
  3. The recovery of species at risk within the Boreal forest, including the woodland caribou;
  4. A reduction of greenhouse gas emissions along the full life-cycle of forest products;
  5. Improved prosperity of the Canadian forest sector and the communities that depend on it; and
  6. Recognition by the marketplace of the CBFA and its implementation in ways that benefit FPAC members and their Boreal forest products.

The Boreal Business Forum (originally called the “customer and investor update group”) was created to help achieve Goal 6 of the CBFA.

Two issues are of particular interest to institutional investors. The first is Goal 1, which seeks to ensure that sustainable forest management practices are implemented in the Boreal forest tenures covered by the CBFA. The second is the engagement of CBFA signatories with Aboriginal communities whose rights and title in the Boreal forest could be affected by the agreement in relevant processes, including in the creation of protected areas to be proposed under Goal 2 of the agreement.

Sustainable forest management practices

Under Goal 1, CBFA signatories made a commitment to jointly develop key principles and forest management approaches to achieve ecosystem-based management in Canada’s Boreal forest. The standards of practice will be developed by a small group of experts that will use the Forest Stewardship Council (FSC) National Boreal Standard as a reference point, as well as elements of the three main forest certification systems used in Canada (i.e., those of the FSC, the Sustainable Forestry Initiative (SFI) and the Canadian Standards Association (CSA)) that best embody an ecosystem-based management approach.

Compliance with the standards of practice developed under the CBFA will be independently verified through third-party audits. Since FPAC members’ Boreal tenures are already certified for sustainable forest management to the CSA, SFI or FSC standards, third-party audits related to the CBFA practices will likely be incorporated into the audits under existing certification systems in order to avoid duplication. Most environmental organization signatories expect that the CBFA will enable and prompt signatory companies whose operations are currently not FSC-certified to certify their Boreal tenures to the FSC standard¹. This flows from the expectation that the standards of practice to be developed under the CBFA will be at least as stringent as the FSC National Boreal standard that will serve as their benchmark².

First Nations and the CBFA

Institutional investors will also need to pay special attention to the engagement of CBFA signatories with First Nations, in particular with regard to the development of a network of protected areas across the Boreal forest. While First Nations were not included in the CBFA negotiations, which has been a source of tension between the CBFA and many Aboriginal groups, the agreement explicitly recognizes Aboriginal peoples’ constitutionally protected Aboriginal and treaty rights and title, and stresses that the CBFA is intended to be without prejudice to, and in accordance with, those rights and title. The agreement further states that “FPAC, FPAC Members and ENGOs believe both successful forest conservation and business competitiveness require effective involvement of Aboriginal peoples and their governments. The signatories are committed to such involvement taking place in a manner that is respectful of and engages these Aboriginal rights, title, interests and aspirations.” (CBFA, Art. 8)

Under Goal 2 of the CBFA, signatories are “committed to jointly advocating for, and working with governments, Aboriginal groups, communities and stakeholders to accelerate the completion of a network of protected areas networks across Canada’s boreal forests.” (CBFA, Schedule A, Goal 2, Art. 1)

For further details, see:
Canadian Boreal Forest Agreement (CBFA), CBFA text and Media Centre,
http://www.canadianborealforestagreement.com/index.php/en/media/#media-kit

Contact:
Paula Barrios, Research Analyst (SHARE) [email protected] 604.695.2021


¹ See Canadian Boreal Initiative, Press release, “FSC and the Canadian Boreal Forest Agreement” (20 Oct. 2010), online: http://www.borealcanada.ca/pr/10-20-2010-e.php.
² While signatory environmental organizations strongly support FSC, it is recognised that the current version of the FSC National Boreal Standard falls short in addressing concerns related to species at risk such as woodland caribou. The National Boreal Standard is scheduled for review in 2011, and it is anticipated that the process will lead to stronger requirements around species at risk, specifically the woodland caribou. See ibid. and FSC Canada, National Boreal Standard Revision: http://fsccanada.org/borealstandardrevision.htm.
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