Proceedings of the Subcommittee on the
Boreal Forest

Issue 4 - Evidence

OTTAWA, Wednesday, September 23, 1998

The Subcommittee on Boreal Forest of the Standing Senate Committee on Agriculture and Forestry met this day at 5:30 p.m. to continue its study on the present state and future of forestry in Canada as it relates to the boreal forest.

Senator Nicholas W. Taylor (Chairman) in the Chair.


The Chairman: I call this meeting to order.

One of the major issues facing Canada is how to handle our boreal forest. Some in our audience may not know that the boreal forest is like a cape that hangs around the shoulders of the world in the Northern Hemisphere, with over 20 per cent of the boreal forests being in Canada.

Our committee has a clearly defined mandate to examine the progress our country is making in achieving our national goals of sustainable forestry, protection of biodiversity, aboriginal rights, and federal-provincial issues. Our subcommittee is not just about trees, or even just about forests; we are talking about people, their livelihood, their recreation, their traditions, their heritage and their future. The issues we are examining keep us in touch with Canada's domestic and global interests. In the past year, we have toured the west. We now plan to tour Ontario and the Maritimes. We have looked at our domestic and global interests in Canada. These include: conservation and preservation; industrial wealth and jobs for citizens; aboriginal rights, which are very closely connected with our boreal forests; commercial competition on local and global scales; and the jurisdictional issues that occur between provincial, federal and, to a certain extent, municipal governments. Finally, we have looked at sustainable development in the use of our forest resources.

We must ensure that we see the forest as well as the trees. Let us ensure that we look well beyond both forest and trees to what this invaluable resource means for our country and our future.

Our witness today is Mr. Graham Lochhead, who is the Director of the Office of Forestry and Environment of the Department of Foreign Affairs and International Trade.

Mr. Lochhead, please give us the view of the Department of Foreign Affairs and International Trade.

Mr. Graham Lochhead, Director, Office of Forestry and Environment, Department of Foreign Affairs and International Trade: Thank you, Mr. Chairman and distinguished senators. I am honoured by the invitation to be here today. I propose to preface my remarks with a presentation on the origins and process of forest certification which the Canadian forest industry believes will both contribute to its achievement of sustainable forest management and facilitate its international trade in forest products.

I will follow this with a review of Canadian progress in implementing a new Canadian standard, and highlight the important role of standards in international trade.

With the proliferation of various other international standards, the new Canadian national standard for sustainable forest management systems arrives on stream just in time, as difficulties have already been encountered in certain markets with respect to competing forest certification systems and related matters.

I will close with some recent examples of trade irritants that we have encountered in international trade in this area and remedial actions being taken by the Department of Foreign Affairs and International Trade in this regard.

As custodian of over 10 per cent of the world's forests, Canada has gained international recognition as a responsible steward of this valuable resource and as a leader in the development of progressive policies. Canada is committed to achieving sustainable forest management.

Because of our pre-eminence in forestry matters, we enjoy the ongoing attention of concerned international environmentalists who have often made a useful contribution to what has become an ongoing, coast-to-coast public debate. We have also attracted a fair amount of criticism from time to time.

However, not all of the criticism directed at Canada's forest industry has been justified. There has been frequent misrepresentation of facts, as well as gross overstatement, and some of the more strident criticism has given priority to activities which are clearly staged to attract media attention and generate public funding support for the critics and their cause.

To respond effectively, Canada's forest industry needed to demonstrate its stewardship to the Canadian public and to their customers internationally and domestically. They chose to develop a strong national standard for the sustainable forest management of Canada's forests.

This national standard has been constructed on two strong pillars: the criteria and indicators developed and approved by the Canadian Council of Forest Ministers of all provinces and territories; and the environmental management systems standards developed through the credible and respected ISO process -- the International Organization for Standards.

The first slide is a schematic showing the origins of both of these pillars or building blocks. Down the left-hand side, we see that the UNCED conference in Rio in 1992 called for countries to formulate scientifically sound criteria and indicators that would allow for the management, conservation and sustainable development of all types of forests.

One hundred and ten countries have participated in eight intergovernmental processes to discuss the scientific and policy aspects of forests which comprise the concept of sustainable forest management. This has resulted in the development of eight remarkably similar sets of criteria and indicators -- indicated on the slide on the top left-hand side -- each applicable to the forests of a specific region of the world.

There is, for example, the Montreal process -- which Canada has contributed to -- 12 non-European countries with boreal and temperate forests. Other processes include the Helsinki process, comprising 39 European countries; the International Tropical Timber Organization, with 27 producer countries; the Tarapoto process, eight countries in the Amazon basin; the Lepaterique process, seven Central American countries; the Sub-Sahara dry zone Africa, 28 countries; North Africa and the Near East, 20 countries; and the African Timber Organization, 13 countries, which has not yet reached agreement but is well advanced.

The Canadian Council of Forestry Ministers spearheaded efforts to apply these criteria and indicators to Canada. For this task, they used experts from the academic community, industry, non-governmental organizations, the aboriginal community, and environmentalists. The best available scientific knowledge on sustainable forest management was brought to bear on this task.

This work culminated in February 1995 in Santiago, Chile, when the members of the Montreal process endorsed a comprehensive set of criteria and indicators for forest conservation and sustainable management for use by the individual signatories, that is, the 12 non-European countries.

The second slide identifies criteria developed by the Canadian Council of Forestry Ministers that were used by the Canadian Standards Association to develop our national standards CSA Z808 and Z809.

The first slide also illustrates that the same UNCED conference was the source of the principles used by the International Organization for Standards, ISO, in their work to develop the environmental management systems standard ISO14001.

As the ISO standards are generic, work was undertaken in what was known as Working Group 2, WG2, to develop a bridging document that would translate this generic standard, the environmental management standard which was written for all industries, into terms understandable by forest managers who might wish to obtain ISO14001 certification. The development of the bridging document has been successfully completed, and it was adopted unanimously earlier this year by ISO vote.

This slide also demonstrates that the process of forest certification links the multilateral process of the left-hand side of defining criteria and indicators with the generic objectives on the right-hand side of the ISO environmental management process. It also illustrates that WG2 constructed its report on the results of the global effort to define criteria and indicators for the conservation and sustainable management of the world's forests.

It should come as no surprise to find that the ISO and CSA standards are largely compatible, and Slide 3 elaborates on this fact. There are some distinctions that can be made between the CSA standard and the ISO standard, and this is brought out where there are no crosses under the left-hand column. The CSA standard in fact insists on public participation. It also insists on forecasting. These are two elements that are not present in the ISO. Therefore, the Canadian standard is a stronger, more stringent standard than the ISO standard. In simple terms, an applicant going for ISO14001 would be well along the way to getting a Canadian CSA certification.

A word on standards and trade in general: International standards play a fundamental role in the facilitation of international trade; conversely, the absence of accepted international standards can retard trade. This is the situation we are facing at the moment in the forest management standards.

With the increase in global trade, the existence of international standards gives assurance of conformity to prospective buyers, making the task of product selling easier by ensuring the technical, quality, safety, and environmental aspects of a product or a service. International standards can also benefit suppliers, by attributing market advantage, relative to suppliers who may not have complied with credible, internationally accepted standards. We are seeing examples of this phenomenon in the U.K., in particular where some major retail chains are falling over one another in their anxiety to demonstrate to their customers their dedication to environmentally friendly wood products.

In the knowledge that credible international standards are important in international trade, many forest organizations have already endorsed the quality management standards of the ISO9000 series. These organizations, in their desire to improve environmental performance, wish to adopt and integrate the recently completed environmental management systems standards, the ISO14000 series, of this worldwide federation of national standards bodies.

The main elements of ISO14001 are that the company must develop and publish a management system showing its corporate commitment. A company's environmental goals must be communicated, not only internally, but also externally to all interested stakeholders. There must be continuous improvement. They keep raising the goal, if you like, or the bar. A company must be open to a third-party audit. The certification process is actually handed out as a result of the third-party audit.

The framework is very flexible. Each applicant, each company, is allowed to identify in its plan its own culture, the forest type with which it is dealing, the ownership which prevails in the particular defined forest area, the legislation which is applicable to their particular area or regulations, the wildlife situation, the hydrology, et cetera. It is a very localized situation, and it allows the company this flexibility.

The ISO forestry standard was developed through Technical Committee 207, which developed the 14001 environmental management system. The task of translating this into forestry matters was handled by Working Group 2, where 60 experts from 33 countries contributed to a technical report which is now a basic information reference for forestry organizations in the use of 14001 environmental management systems standards. This went to vote earlier this year, and it was passed unanimously.

The ISO was formed in 1947 to establish international standards achieved through consensus between nations. It is a worldwide federation of national standards bodies, one in each country, comprising 117 members. Thirty thousand international experts from more than 90 countries contribute each year to the work of the ISO, which to date has published close to 11,000 international standards. These standards are developed through a multi-party process involving all the materially affected parties. These are voluntary consensus standards and, as such, remain for voluntary use, even when ratified as national standards by national standards institutes.

International standards facilitate and help bring stability to international trade. They act as instruments to remove technical barriers to trade, and these important functions are acknowledged and reflected in the rules of the World Trade Organization, the centrepiece organization of the global trade regime. The primary objective of the WTO is to provide a stable, transparent, rules-based international trading climate.

The process of developing standards normally provides a forum for discussion among all interested stakeholders, including consumers, governments, non-government organizations and industry. This balanced participation by a variety of interest groups is an important feature in the development of international standards. All concerns can be discussed and accommodated, with a view to integrating valuable ideas into the standard.

Governments understand that a proliferation of standards, each with their own inconsistent requirements, inevitably leads to restraint of trade. It is for this reason that a current WTO priority is to reduce the number of barriers caused by the proliferation of differing standards.

The forest industry is currently facing this problem, as national standards for forest management compete in the market-place against different and various approaches, sometimes developed exclusively and with limited or no consultation among interest groups, and which ignore accepted standards-making processes and institutions.

"Buyers groups" of well-meaning individuals have been formed, convinced of the environmental benefit of purchasing only wood products "certified" by one organization -- at a cost -- as being wood that originates from their own exclusive and sometimes varying definition of a well-managed forest.

In the ensuing confusion in the market-place, the need for a sanctuary in the form of strong, internationally accepted guidelines or credible international standards has become more apparent. This is true particularly when we consider the economic impact of global trade in this sector and measure the potential costs of these unwelcome impediments to the flow of trade in terms of reduced trade and possible loss of employment.

The next slide demonstrates the sad fact related to our discussion of the impact of world trade on forest products upon the environment that only 23 per cent of global forest production contribute to world trade. The remainder is given over to fuel for cooking and heating, about 50 per cent of the total production, and domestic consumption, about 27 per cent. It is only that bottom right-hand segment to which our discussion of forest certification applies.

Current attempts to introduce a respected and credible internationally accepted environmental management system standard could have relevance to the full circle. This is true particularly if we can ultimately address this subject in a balanced manner in the process of developing an international convention or an international code of conduct relating to forest management. This is, in fact, one of Canada's priorities at the moment.

This is a very strong point in favour of the ISO approach, which acknowledges the reality that different countries, particularly those in the developing world, face very different conditions in their respective forests and that forest management practices accordingly vary. The ISO system of environmental management can accommodate this. Its feature of continual improvement, combined with its ability to accept the reality of national conditions, obligates individual countries to pursue improvement on recognizing the present conditions in their forests without necessarily penalizing their trade in forest products.

The subject of slide 9 is Canada in world trade. This schematic shows the relative prominence of various producer countries in the international trade of forest products, which represents about 3 per cent total world trade and has a value of around $155 billion. The value of Canada's forest exports exceeds $31 billion. This sector remains our largest net exporter and provides direct and indirect employment for over 800,000 persons across Canada.

I would like to have a word on Canada's national standard and the Canadian Standards Association. I simply wish to point out that the CSA is a standards writing organization, comprising close to 32 technical committees considering various aspects of different types of standards. It involves producers, academics, scientists, the public, environmentalists and regulators.

The process used to develop Canada's standard took place over a period of two years and nine meetings. There was consultation with non-governmental organizations throughout. There was a series of public reviews. There were pilot studies to test out concepts that were discussed and developed in committee. Finally, there was a ballot vote and unanimous approval in 1996. This then went to the Standards Council of Canada. After its consideration, it was approved as the national standard of Canada.

This slide demonstrates the process toward the goal of sustainable forest management. The system I have been describing as part of the SFM standard, continuous improvement, is applied to a defined forest area. There is public participation in a local scene vis-à-vis the standards, criteria and indicators that should be used in a particular area. The end result is field performance that, we hope, meets our definition of sustainable forest management.

The first feature of the Canadian standard is commitment. To qualify for the CSA certification, the applicant must commit to developing and implementing a system based on criteria and on-the-ground performance, and communicate this both within the organization and to outside stakeholders. This includes a commitment to meet or exceed all relevant regulations and to engage the public at each stage of the planning process.

In referring to regulations there, I am talking about recognizing the fact that forestry matters are a provincial jurisdiction in this respect.

Public participation: The applicant, the auditing agency and the public together identify values that characterize the defined forest area, as well as the management objectives to maintain these values. A performance indicator accompanies each management objective. As an example, if the participants value a healthy moose or grizzly bear population, the management objective might be to increase the habitat size. The accompanying performance indicator might be a total increase in species habitat.

Planning: The applicant develops short and long-term management plans, including procedures to achieve objectives. These plans are tested to determine their expected impact on the forest area.

Implementation: Applicants must demonstrate that they have allocated sufficient resources and controls to the task.

Measurement: On-the-ground performance is an essential component of the CSA sustainable forest management approach. Organizations collect performance data through ongoing field inspections, comparing results to forecasts.

Continuous review and improvement is a defining feature of the process of certification. During the public participation process, an image of the future forest is described in socio-economic and environmental terms and, as such, becomes the basis of a management plan for that area. Using computer models and comprehensive forest data, planners can then test the effects of the management plan on forest development 20 to 50 years ahead. Today, a virtual forest can be obtained using quite advanced technology.

Comprehensive forest data might include information such as topographic mapping information, forest inventory, forest stand types, growth and yield data, the age of the stand, the soils and forest ecosystem classifications, weather patterns and wildlife habitat classifications. This requirement for forecasting is unique to the Canadian CSA standard.

The credibility of the Canadian Standards Association has importance here. The CSA was established in 1919 and has earned an international reputation for integrity and excellence in standards making. Its status as a not-for-profit, non-statutory, voluntary membership association affords the new forestry standard a high degree of credibility.

As 94 per cent of Canada's forests are publicly owned, it is fitting that Canada's pre-eminent standard-setting institution lead in the development of a national system to ensure the sustainability of this valued resource.

The important point to register about the Standard Council of Canada is the fact that this standard has been developed in accordance with the approved processes and disciplines of the Standards Council of Canada. On May 8, 1998, the board of directors of the Canadian Environmental Auditing Association, which ensures professional, technical and ethical standard for auditors, announced that seven individuals had achieved the designation of Certified Environmental Auditor with respect to sustainability forest management. This is the first group of successful candidates to become certified to respond to the demand of forest companies who require registration audit.

This process contrasts with the Forest Stewardship Council scheme, which ignores national accreditation bodies and carries out its own accreditation of certification organizations.

Regarding implementation of the new standards, the Canadian registration organizations expect to begin certifying Canadian forest companies to the CSA standard later this fall.

To this point, I have given priority to a description of the ISO and CSA processes, as these have both been developed within the normal parameters of national and international standard-making processes and institutions dedicated to standard-making.

A third process is emerging in the market-place. The Forest Stewardship Council, FSC, is an international coalition of organizations and individuals in 40 countries, with a common interest in forest issues. The FSC based in Mexico does not certify forest products itself; rather, it assures customers by accrediting that certifiers of forest products meet the FSC criteria for certifiers of forest products based on their adherence to FSC principles for well managed forests. Theirs is a prescriptive approach rather than a management systems approach.

There is no government participation in the FSC process or dialogue. Products from such forests may be issued an FSC label, which distinguishes them in the market-place. The FSC certification program, by placing emphasis on its label, identifies its utility as forest products marketing scheme. The ISO and CSA certification processes, in contrast, place emphasis on achieving sustainable forest management.

At the moment, companies across Canada are currently engaged in the integration of this new standard with their existing corporate practice. About 15 major forest products companies and 12,000 private wood lot owners, representing close to 20 million hectares of forest, have announced their intention to adopt the CSA sustainable forest management systems standard and seek certification.

This encouraging endorsement promises to identify the CSA approach as one of the most successful programs in the world, and will reinforce Canada's role in continuing to lead in the development of forest policies and sustainable forest management practices.

I will now address the trade impacts of forest products.

As you might expect, problems have emerged as a result of the proliferation and evolution of various certification processes. Competition between the processes exists, and there is a danger that the device of certification may be used by some, as a non-tariff barrier to trade, to close access to markets. Canada supports certification as a market-place activity, insofar as it contributes to sustainable forest management. However, we believe that certification should be market-based, independent and voluntary. This view is not universally shared.

Canadian industry has already encountered difficulties in certain markets. The following recent examples connected with forest certification demonstrate the diversity of non-tariff barriers being erected in our forest products trade. I have simply plucked two, which are quite current, from a rather long list.

The Netherlands government is reviewing draft legislation that proposes mandatory labelling of timber and timber products in accordance with rules devised and administered by one agency, namely, the Forest Stewardship Council. The proposed legislation discriminates and would pose an unnecessary obstacle to international trade, contrary to the obligations of the Netherlands and the EU under the WTO agreement. Its mandatory nature appears to violate articles of the technical barriers to trade agreement and, through its reference to the Forest Stewardship Council, it uses definitions with no accepted international agreement and discriminates against other countries which may use equivalent approaches to their forest management.

In another case, the City of Los Angeles has proposed an ordinance that would change its rules of procurement governing temperate woods and wood products, limiting purchases to wood certified by a sole agency, the Forest Stewardship Council, as being wood from sustainably managed forest. The City of Santa Monica and other municipalities in the United States are considering the adoption of similar policies.

This creates a de facto monopoly for the single accrediting organization and discriminates against other legitimate national and international processes that are in place to assure sustainable forest management. It also distinguishes between wood products and similar products constructed of non-wood materials that do not require such certification. NAFTA procurement guidelines note that specifications of this nature should be based on international standards and avoid creating unnecessary barriers to trade.

The Department of Foreign Affairs and International Trade has intervened in each of these cases, noting that regulations of this nature may affect our bilateral trade, and drawing attention to aspects of these proposals which appear to be contrary to accepted trade practice or the rules of the WTO.

Those examples, of course, demonstrate that we cannot rely exclusively on forest certification to resolve our market access difficulties. A credible certification process can, however, provide a professional and science-based response to those who would levy charges of mismanagement of our forests as reason to exclude Canadian companies from international markets.

The ongoing task of responding to overseas criticism of environmental groups lies with the Department of Foreign Affairs and International Trade. The department, in concert with the Canadian Forestry Service, the provinces and industry, addresses these issues by ensuring that embassy personnel throughout Europe and in the United States monitor and report on local difficulties and legislative proposals in this category, respond quickly and factually to any criticism, build partnerships with the various interest groups, and strengthen dialogue with the key institutions, academics, scientists and parliamentarians.

Both incoming and outgoing missions have been organized to ensure that knowledgeable parties have the opportunity to view, firsthand, the reality of conditions in Canadian forests and to discuss local forestry practice with stakeholders across Canada. This has been quite successful.

In this way, the misinformation promulgated by some environmental groups has been exposed. The extensive effort by Canadians to communicate positive developments and achievements in Canadian forest practices, and to describe our forest management in land use policies, has been generally successful in countering these charges and has been welcomed by customers in Europe.

Forestry is unique in the degree to which it continues to be subject to the development of international and domestic principles, criteria and indicators for sustainable management. The process of certification is an added tool that can advance our objective of achieving sustainable forest management in Canada and around the world.

From a trade perspective, an important priority will be to work with other countries to put in place a system of mutual recognition or equivalency for the various forest certification schemes. The trade aspects of certification, and the various campaigns that threaten to limit Canadian trade in certain markets, will continue to absorb the resources of Foreign Affairs and International Trade in related review processes. We will continue to use the most appropriate channels for bilateral and multilateral cooperation between governments, to raise awareness and facilitate resolution of any related trade irritants.

I will be pleased to respond to any questions you may have on my presentation.

Senator Stratton: In the development of a definition of sustainable development of our forests, particularly with respect to global warming, it is now reported that part of the global warming is as a result of deforestation. That is not conclusive, but that is on the agenda. With that as a background, when you look at the definition of sustainable development, and using your benchmarks from CSA and ISO to develop that, is the definition a moving target? In other words, as we gain more knowledge about global warming, is that target moving or are you talking about sustainable development just in the simple fact of being able to reproduce enough trees to keep producing lumber and pulp?

Mr. Lochhead: Both the Canadian standard and the ISO standard have a very strong feature in that they both demand continuous improvement. There is indeed a circle, if you like, of trial and error, but the idea is to keep moving the bar upward as we move along this track. There is a full appreciation in Canada in terms of the scientific community and the research that is being undertaken by Natural Resources Canada to add to our knowledge of these matters. It is an evolving process. The forestry specialists would be the first to admit that there has been a quantum leap over the past decade or so in terms of their understanding and the amount of effort being given to scientific research in this field.

Senator Stratton: When you say "quantum leap," that is in the knowledge and understanding of sustainable development, and you are saying in the last 10 years. In view of the fact that yearly records are being set on the warmest year in the last decade, the warmest year of the century, the warmest summer on record, the question becomes: If there is indeed global warming -- and you cannot say that with absolute certainty yet but we are pretty close to saying it -- is there likely to be another quantum leap? Is there a way of measuring that? Is there a way for scientists to say to us that there is the likelihood that there could be another quantum leap and, again, the effects it would have? Do you look at those things 5, 10 and 20 years out as potential sources of some fairly serious problems?

Mr. Lochhead: My understanding in terms of the amount of work to develop a national forest strategy, and also to develop a set of related scientific priorities, is that this matter has been discussed at length and the challenges which have been set would indeed respond positively to your question. I am not a silviculturist, so I am not qualified to respond to the scientific aspects of this; however, insofar as these certification systems and the various provinces who regulate forestry in this country are becoming more and more aware of the ramifications of forest policies, I am confident that the requisite action is being taken.

Senator Stratton: I wish to ensure that in the establishment of these standards we are attempting, in the best way possible, to take into consideration those unknown factors. That is a very difficult thing to do. I believe it is called "risk management." How would we manage if this trend continues on this so-called global warming? You are always looking at an alternative strategy and hopefully it is there.

Mr. Lochhead: Senator, I would offer that somewhere in my material there is a diagram that shows this feedback of continual improvement in the process of the standard. I would be glad to send that along.

The Chairman: Regarding ISO and CSA, what percentage of lumber exported from Canada will have one of those stamps? Is it 100 per cent or 50 per cent? Does every carload of lumber going out of Canada have that stamp?

Mr. Lochhead: The CSA standard relates to a defined forest area and says simply that wood from a defined forest area has been certified according to Canada's national standard. There is no mark directly related to this.

The Chairman: Let me get this straight. If someone in Germany buys a carload of lumber, how do they know that it is done? Where does the ISO and CSA come out?

Mr. Lochhead: My understanding is that the letterhead of the company is similar to the ISO 9000. If you take the ISO example or approach, the company is certified.

The Chairman: I see. The exporter is certified.

Let us go a step further then. I notice that about 23 per cent of exported lumber is traded. Half of it is for cooking and heating, and close to one-quarter goes to domestic consumption. How much is exported by companies with a recognized ISO or CSA rating?

Mr. Lochhead: None is exported yet. This is day one; this is an evolving process as we speak. The whole process of standards and the putting in place of the audit process and the accreditation of auditors has taken up time over the past couple of years. I thought I had said that we expect the very first Canadian company to announce its certification within the next two months.

The Chairman: Would you care to hazard a guess as to when 90 per cent of Canada's lumber exports will come from certified ISO or CSA companies?

Mr. Lochhead: I would not hazard a guess, Mr. Chairman.

The Chairman: It is all voluntary right now?

Mr. Lochhead: I believe I made a comment regarding the number of companies that have already announced publicly their commitment to the standard. It was 15 major companies.

The Chairman: I know you did, but the commitment sounds a little loosey-goosey, if you will pardon me. There is a line in a song that says: It may be for years; it may be forever. What is this commitment, for years or forever?

Mr. Lochhead: To try to draw an analogy with ISO 9000, if you are running a company and you must introduce new disciplines in terms of environmental management or indeed quality management, it requires from-the-top-down or from-the-bottom-up approach to refining these, what I would call, general management processes. It is not done by the flick of a switch. It does take a bit of time.

There are many new disciplines involved here. I get the sense that for a number of companies out there these disciplines have not been in place. Therefore, there has been a lot of gap analysis and new systems are being introduced. It has been much slower. There has been a sense, in some circles, of exasperation at the slowness. Once we achieved the actual standard, many people had the wrong idea that it could be implemented immediately. It is an ongoing process. Leading companies will be on line first.

There is another dimension to this, Mr. Chairman, and that is that the demand for certified product is not finite.

The Chairman: I was going to say that this is consumer-driven, rather than producer-driven. Is most of the consumer drive coming from Europe?

Mr. Lochhead: So far, the drive has come from Europe but -- I almost said the "disease" is spreading to the United States.

The Chairman: Continuing on that line, you mentioned the audit and that finally we have some trained certified environmental auditors. In our study to date, the committee has learned that the aboriginal communities are very closely identified. There is almost a symbiotic relationship between our aboriginal communities and our boreal forests. Of course, that applies to other forests, too, but we are killing boreal forests.

You just mentioned that Europe is a source of consumer pressure. I would like to say it is a nice verse, not a bad verse. They are interested, of course, in aboriginal welfare. Anyone can tell you how easy it was to put a boycott on a particular company's paper product coming out of northern Alberta. Aboriginal communities have many friends out there among our consuming pulp and lumber companies.

We talk about a consumer-driven process and about sustainable forests and environmental auditing. Are we doing anything about the input of aboriginal peoples into this audit? In other words, can they say on their letterhead that they have a happy bunch of aboriginals out there who are not sitting out there cutting down the trees or ruining their trap lines or something like that? I notice you mentioned "culture," but how far has that thinking progressed in this movement? We have to show that our aboriginal people are either happy or at least fairly treated in ISO and CSA standards.

Mr. Lochhead: The aboriginal communities have been part of the process of developing the standard. In terms of whether or not they are represented in this first production of auditors, I could not tell you. The Canadian Environmental Auditing Association has handled this.

It is a very important point that you raise. I will pass along your remarks in this regard, senator. It is absolutely excellent. It may well have been addressed. If it has not been, it should be.

Senator Robichaud: You were saying that about 15 companies are in the process of making applications to meet the standards or to be qualified. Are they from all across Canada or are they from the boreal forests or more from the temperate area? Do have you any idea as to where they are from?

Mr. Lochhead: They represent all parts of Canada, from coast to coast.

Senator Robichaud: Do you feel that these companies will qualify easily enough? Are we are doing the right things to our forests right now that would give them an advantage to be qualified and then use that as a tool to market their products all over the world?

Mr. Lochhead: These are major companies. I do not particularly want to single out any particular company, but we have major companies from coast to coast. We do not have all of them but we have a good representation in that number.

It is certainly their intention to use this. As I explained at the beginning, they see this as a necessary way to demonstrate their stewardship of the forests they look after, and so they are adapting this.

Senator Robichaud: But the incentive for those companies who qualify is to use it as a tool to market, is it not, where they can use ISO14001 just like the others use the 9000? This is the incentive, is it not?

Mr. Lochhead: Yes, but it is not exclusively market-driven. I would not be naive enough to say that it is exclusively one way or another. The beauty of both the Canadian standard and the ISO standard is that they resolve the matter of sustainable forest management at the same time as, shall we say, improving the corporate response to any criticism of its corporate practices in its forest area. It is helpful to have a national or international standard that you can hold up as proof that you are meeting this standard.

I might say that, in international terms, what we have here in the Canadian standard is very thorough and right up there with the very best. We have nothing to be ashamed of; the Canadian standard will stand up to scrutiny. It has a lot of disciplines in it, and some of the competing standards do not have these same disciplines. The difficulties that are being met, and which are referred to in my examples, relate more to the selling, the marketing, of the standard itself. In view of the fact that it is only coming on stream at the present time, companies have held back, the industry has held back, because the first criticism would be to question where this product is certified. We will be able to respond properly in a couple of months.

Senator Robichaud: You mentioned a couple of cities in the United States that were developing or asking for their own or FSC standards. What is happening in the U.S. regarding ISO certification?

Mr. Lochhead: There are some very different circumstances at work in the United States. Where something like 94 per cent of our forests are publicly owned, it is almost the reverse in the United States: 90 per cent plus is privately owned. There are a series of private owners who are very determined to do their own thing. We do not believe that it is easy to get consensus between 10 provinces and several territories, but in the United States, it would be even more difficult to develop a consensus position. The short answer, however, is that there is a mixed number of adherents to an ISO approach, or to a FSC approach. There is a lot of skating around the trade regulations in the United States, which are even more complex and stronger than we have here in Canada. It is an evolving situation. It is very difficult to get a position from the United States on some of these developments. We have seen this hesitation in their muted support of an international convention.

Senator Robichaud: We talk about lumber, but there is also processed lumber that is being traded through various forums. Will that apply to that also?

Mr. Lochhead: Yes.

Senator Robichaud: So if I process strand board or plywood and sell it as such, then this ISO standard can be made to apply to that as well?

Mr. Lochhead: Yes; the standard will apply to a defined forest area. Therefore, if the fibre comes from a particular forest area, it has the standard. For example, Green Peace was criticizing any product that emanated from the central coast of British Columbia -- which they renamed as the Great Bear Rain Forest. It was an area. Their concern situation was, shall we say, overstated, but it was directed at an area. Had that area been certified, I would think that the companies involved would have been very quick to point that out, even though they had indeed undergone a three-year planning process which the B.C. forestry code and long-range planning process applies to approvals. So the short answer again would be that the standard would apply to strand board.

The Chairman: I have a couple of short questions. You mentioned environmental audits but, as you know, even within the environmental school, there is clear-cutting versus pattern cutting. This may be more cultural, but there is machine logging versus horse logging, or logging that is highly labour intensive, particularly in some of our First Nation communities. It is one thing to use a saw and another to have something that comes in and clears 100 acres overnight. Has that been settled, so that when the consumer says, "I would like to buy your pulp, but I want to ensure that it comes from an area that created a lot of jobs, provided the price is not too high," there is some answer? There is more than one utility company now. You can buy wind electricity or hydro electricity or coal electricity. It depends on how you feel on the environment. Is there, in the auditing process, any work being done, not only respecting the type of cutting, but also on the type of employment it created?

Mr. Lochhead: These matters would be addressed in the public participation part of applying the criteria and indicators that have been approved by the province to the specific area in question. There would be a full public forum, with all interests together, considering what would be appropriate for the development of this particular valley. The objectives would be discussed and agreed upon before proceeding. So if employment were a priority or, as I mentioned in my earlier example, if an ongoing moose pasture were a priority, or indeed if some other biological priority were in existence, the type of cutting would be discussed.

The Chairman: You are talking about the people on the ground. We concluded from what you said that this is consumer-driven or buyer-driven. How will a buyer in Sweden be in on discussions of how to harvest a valley in the mountains somewhere? Because this is voluntary and because the consumer buys our lumber, therefore the consumer is the one who is, in effect, dictating conditions, so the buyer does a lot of dictating. How will they be involved in any process when it comes to setting standards on how to timber out a valley?

Mr. Lochhead: They would simply be told about the merits of the Canadian certification scheme, or the ISO certification scheme, and they would recognize that a strong element of that was public participation at the local level. Hopefully, agreements will be in place at the government level that will allow for the mutual recognition of standards between countries.

Senator Robichaud: Sustainability is not only the production of fibre on a long-term basis; it is also habitat for everything that happens in that designated area, is it not? That is part of the whole picture.

Mr. Lochhead: That is right. That is taken into account in the CCFM criteria. The Canadian Council of Forest Ministers of each province has agreed on the breakdown of these criteria and the indicators appropriate. They are already measuring these indicators to see how far along we have come in the last few years.

Senator Robichaud: This would be quite important to an environmentally minded buyer who would use that line to sell his product in Europe. He could assert that sustainability takes into consideration wildlife and habitat, as well as the production of fibre.

Mr. Lochhead: The first slide showed that the momentum of this emanates from UNCED in 1982. It was at that time that individual countries were challenged to develop criteria and indicators appropriate to each country. Our forestry ministers in Canada have done that; they have identified these and have already started to measure these criteria and indicators.

Senator Robichaud: Would you say that in Canada we are ahead of the others?

Mr. Lochhead: I would say that we are right out there with the others. We may even be leading the others.

The Chairman: Thank you very much, Mr. Lochhead. We appreciate your appearance here today.

The committee adjourned.