Developing social and biodiversity standards for government-led REDD and other forest carbon programs A review of existing standards and verification systems Final Report, April 2009 About ProForest ProForest is an independent company working with natural resource management and specialising in practical approaches to sustainability. Our work ranges from international policy development to the practical implementation of requirements on the ground, with a particular focus on turning policy into practice. Our extensive and up-to-date knowledge of the international context ensures that our work for individual companies and organisations is set within an appropriate framework. At the same time, we are able to bring a wealth of current practical experience to policy development processes and debates. The ProForest team is international and multilingual and has a broad variety of backgrounds, ranging from industry to academia and NGOs. This allows us to work comfortably in many types of organisations, as well as in a range of cultures. We have in-house knowledge of more than 15 languages, including Mandarin, Malay, French, Spanish and Portuguese. ProForest was set up in 2000 and our expertise covers all aspects of the natural resources sector, from agricultural commodities and forestry to conservation, supply chain management and responsible investment. About ProForest ProForest is an independent company working with natural resource management and specialising in practical approaches to sustainability. Our work ranges from international policy development to the practical implementation of requirements on the ground, with a particular focus on turning policy into practice. Our extensive and up-to-date knowledge of the international context ensures that our work for individual companies and organisations is set within an appropriate framework. At the same time, we are able to bring a wealth of current practical experience to policy development processes and debates. The ProForest team is international and multilingual and has a broad variety of backgrounds, ranging from industry to academia and NGOs. This allows us to work comfortably in many types of organisations, as well as in a range of cultures. We have in-house knowledge of more than 15 languages, including Mandarin, Malay, French, Spanish and Portuguese. ProForest was set up in 2000 and our expertise covers all aspects of the natural resources sector, from agricultural commodities and forestry to conservation, supply chain management and responsible investment. For this report your contact person is Ruth Nussbaum T: +44 (0) 1865 243439 E: ruth@proforest.net Government-led standards for REDD and other forest carbon programs Table of contents 1. Introduction ................................................................................................................. 4 2. Methodology................................................................................................................ 4 3. The standard ............................................................................................................... 5 3.1. Content of the standard............................................................................ 6 3.1.1. The scope of the standard................................................................. 7 3.1.2. Types of criteria................................................................................ 8 3.1.3. Phased approaches ......................................................................... 11 3.2. Development of the standard.................................................................. 12 3.2.1. Developing the global requirements................................................ 12 3.2.2. National interpretation and/or implementation................................ 13 4. Evaluation and conformance options ......................................................................... 15 4.1. Monitoring, reporting and verification ..................................................... 15 4.2. Consultation during evaluation ............................................................... 19 4.3. Transparency.......................................................................................... 20 4.4. Conformance and sanctions .................................................................... 21 4.4.1. Undertaking improvements ............................................................. 21 4.4.2. Implementing sanctions.................................................................. 22 5. Governance ................................................................................................................ 24 5.1. National implementation ........................................................................ 24 5.2. Imposing sanctions................................................................................. 25 6. Links to other international commitments ................................................................. 26 Annex 1 – Summary of schemes and standards reviewed ....................................................... 28 1. Forest Stewardship Council (FSC) .................................................................... 29 2. Marine Stewardship Council (MSC) .................................................................. 31 3. Extractive Industries Transparency Initiative (EITI) ........................................... 34 4. The Kimberley Process Certification Scheme ................................................... 38 5. Independent Forest Monitoring (IFM) .............................................................. 41 6. Voluntary Partnership Agreement (VPA) .......................................................... 43 7. The Convention on Trade in Endangered Species (CITES) ................................. 46 Government-led standards for REDD and other forest carbon programs 1. Introduction This report presents the results of a review of a range of international standards and verification systems relating to the forest and natural resource sector. The review has been undertaken at the request of CCBA and CARE to inform a discussion about the development and adoption of social and biodiversity standards that national or sub- national governments can adopt to demonstrate that their forest carbon programs and policies are socially just and delivering significant benefits for poverty alleviation and for conservation of biodiversity. An important context for the discussions is that the approach which is developed needs to be • Voluntary; • Applicable to government-led REDD and other forest carbon programs; • Supply-side led with input from governments and stakeholders; • Address the interests of the demand-side including potential funders of or markets for REDD and other forest carbon; • Allow for phased application. The outputs from this study are intended to assist CCBA, CARE and advisers to prepare for and inform a workshop with broader government and civil society actors from REDD countries to be held in early May. The workshop aims to collect opinions and build consensus about key issues related to design of the standards, including principles, potential criteria, evaluation and monitoring systems and governance that will give a core working group a mandate to develop draft standards for wider review. 2. Methodology Seven schemes or initiatives, selected in discussion with CCBA and CARE, were reviewed for this report. These included both certification schemes aimed at project- level certification and national initiatives. Project level certification schemes reviewed were: • The Forest Stewardship Council (FSC) • The Marine Stewardship Council (MSC) National/sub-national level initiatives reviewed were: • The Extractive Industries Transparency Initiative (EITI) • The Kimberley Process Certification Scheme (KPCS) • Independent Forest Monitoring (IFM) • European Union Voluntary Partnership Agreements (VPAs) • The Convention on Trade in Endangered Species (CITES) Government-led standards for REDD and other forest carbon programs A summary of all issues from the schemes reviewed can be found in Annex 1. If useful reference was also made to other initiatives with which the authors were familiar. In addition, informal discussions were held with a number of people actively working with national or sub-national level programs on forests and carbon to seek their views on the way a scheme aimed at government-led REDD or other forest carbon programs should operate. The draft report was reviewed by CCBA and CARE and informed a planning workshop in early April. The outputs were used to revise the report. The report covers the following areas: • Standards (Section 3): the standard defines what the scheme delivers and both the process for developing the standard and the content are important. • Evaluation and conformance (Section 4): there are a variety of ways of approaching monitoring, reporting and verification of implementation which are discussed in this section together with the question of conformance. • Governance (Section 5): the institutions of the scheme are also very important in ensuring effectiveness and credibility. The analysis also examines how the CCBA standard might be linked to existing international commitments such as CBD and ILO (section 6). Note: a core component of any system aimed at government-led REDD and other forest carbon programs will relate to carbon. This is explicitly not included in this discussion but must be an integral part of the outcome. 3. The standard When considering the development and content of a standard, it is important to also consider what the standard is for. For national REDD and forest carbon programs there are a number of options which are possible including: • A good practice guideline; • A tool for self-assessment and improvement; • A tool for communication within a country; • A tool for improving access to finance and markets; • A basis for independent certification. Further discussion will be necessary about which of these (one or more) are important roles for the standard. The standard which is then developed will need to be appropriate for the uses identified. Government-led standards for REDD and other forest carbon programs Box 3.1: Standards Standards are made up of a number of components which form a basic hierarchy. At the top is the overall objective or goal of the initiative developing the standard. Below this are: • Principles: These are the ‘intent’ level of a standard which further elaborate the objectives and define the scope. They are fundamental statements about the desired outcome and are not designed to be verified. • Criteria: These are the ‘content’ level of a standard which set out the conditions which need to be met in order to deliver a principle. It can be possible to verify criteria directly but they are usually further elaborated by indicators. • Indicators: Indicators are quantitative or qualitative parameters which can be achieved and verified in relation to a criterion. Standards may also include verifiers (a source of information for an indicator), guidance, threshold levels or other detail. There are two linked components which are important in considering standards -the content of the standard and the way in which the standard was developed. Each of these is discussed below. Box 3.1 gives a brief overview of the different components of a standard. 3.1. Content of the standard This section considers three aspects of the content of the standard: • The scope, including both issues and activities addressed; • The type of criteria used; • The potential and need for phased approaches. Government-led standards for REDD and other forest carbon programs 3.1.1.The scope of the standard There are two important components to the scope of the standard, each of which is discussed further: • The range of issues covered by the principles and criteria; • The range of activities to which the standard applies. 3.1.1.1. Range of issues addressed The overall objective of the standard will be to demonstrate that forest carbon programs and policies are socially just and delivering significant benefits for poverty alleviation and for conservation of biodiversity. To turn this objective into a standard, it must be further described by a set of principles and criteria. The principles, as discussed in Box 3.1, set out the scope and intent of the standard. CCBA has already identified major issues which might be included as principles in the standard. These include: • Recognition of traditional property rights • Free, prior and informed consent of those whose rights may be affected • Full and effective participation by poor and marginalized social groups • Equitable distribution of costs and benefits • Enhancement of ecological services and biodiversity • Enhancement of sustainable livelihoods and economic opportunities In addition, other issues which need to be considered, either as principles or as criteria (see Box 3.1) include the way in which national REDD and other forest carbon programs are developed and implemented: • Stakeholder involvement: The greater the extent to which a wide range of stakeholders are involved in developing the plan for reducing emissions, the greater the probability that the interests of these groups will be reflected in the various programs and approaches which are developed. Stakeholder involvement is important both in the development of plans and in the ongoing implementation. The groups involved at each stage may differ since planning is often influenced by associations or other representatives while implementation needs to involve consultation with the directly affected parties. • Transparency: All of the initiatives examined, as well as the discussions with various actors involved directly with forests and carbon, emphasized the importance of transparency and provision of information. Critical areas include providing details of plans and programs, good information on income received and spent and the results of evaluation and monitoring. Making this type of information available in real time is very important in building better governance and greater trust and credibility. Government-led standards for REDD and other forest carbon programs • Institutional capacity and effectiveness of the bodies engaged in developing, implementing and monitoring forest carbon plans and programs has been highlighted as an important component of an effective system. This includes areas such as competence, resourcing and adequate training. • Mechanisms for dealing with grievances and complaints are important in ensuring robust implementation since it provides a mechanism for anyone who feels that the requirements are not being met to challenge the implementing organisation directly. • Regular internal monitoring and review of progress has been shown to be an important component of the successful implementation of a wide range of standards and other initiatives. Each of these issues needs to be considered, together with any others which are considered important by relevant stakeholders (see Section 3.2). 3.1.1.2. Scope of application There are a number of possible activities to which the standard could apply, for example • Planning; • Implementation of plans; • Outcomes on the ground; • Combination of the planning, implementation and outcomes. It will be important to consider which of these the standard should apply to – this links also to the discussion of phased approaches in 3.1.3. 3.1.2.Types of criteria Most standards include two types of criteria: outcome criteria which specify the level of performance which must be achieved and process requirements which set out the systems which must be followed. Most natural resource standards contain a combination of both. An additional type of criteria which may need to be considered for a standard relating to government-led programs is policy criteria. All of these are discussed below. 3.1.2.1. Outcome criteria The advantage of the performance requirements set out in outcome criteria is that it makes it very clear what the standard should deliver. However, in the natural resource sector there are major variations in both the ecological and the socioeconomic situation between countries which makes it difficult to prescribe detailed outcome criteria globally. Therefore, it is usually necessary to undergo a process of further elaboration at a national level which adds additional complexity to the process. Government-led standards for REDD and other forest carbon programs All of the initiatives reviewed include some outcome criteria. In general those which were designed for project level certification (eg FSC, MSC) have more comprehensive and detailed requirements. The national level initiatives reviewed tended to have fewer outcome criteria but this in part reflects their purpose which is fairly narrowly focused in the case of both EITI (information about money in the extractive industry sector) and the Kimberley Process (excluding conflict diamonds from supply chains). The one exception is the requirements for legality assurance systems (LASs) within VPAs which provide considerable detail about what is required though still allowing scope for flexibility for national implementation. A very important and potentially challenging aspect of outcome criteria is defining what exactly must be achieved with respect to each of the requirements at a national level and how can this be evaluated and verified (which is discussed further in Section 4). For each of the issues it needs to be clear whether the expectation is that the program or policy aims in a particular direction or delivers a complete outcome. For example, should the standard require that all relevant poor and marginalised social groups in the country are participating fully and effectively in the program or should the requirement be that the program or policy being assessed is seeking to encourage and build participation from poor and marginalised social groups. If the former is adopted can this ever be met in practice? If the latter is adopted then how much has to be done to be sufficient to meet the requirement? This is already a complex question at the level of project certification with serious disagreements between different groups (for example within the FSC scheme). It is likely to be even more difficult at a national level because the implications are much greater when issues are being considered at a national level and government is being judged. There are some national level initiatives which do require full implementation of requirements (eg the ILO Core Conventions) and where countries have to report on any contravention. However, for a number of recent initiatives which touch on complex issues such as resource rights there is already some evidence of differences of opinion. For example, within both VPAs and Independent Forest Monitoring there have been very tense and difficult discussions between different interest groups – particularly government and NGOs – about exactly what is required in order to deliver conformance. Therefore, it is very important that when outcome criteria are used there is real clarity about what is expected and that this is realistic, implementable and verifiable. This also links to the question of national interpretation which is discussed below. 3.1.2.2. Process criteria While outcome criteria provide assurance about achievement of a defined performance level, process criteria can be equally important in delivering a robust and effective outcome. There is considerable evidence from a range of different Government-led standards for REDD and other forest carbon programs initiatives that having robust systems in place is very important in both achieving and maintaining conformance with a range of social and environmental criteria. As well as being important in their own right, a major advantage of process criteria for a national level scheme is that it is much easier to specify what is sufficient in order to meet the standard, unlike outcome criteria where specifying adequate performance can be challenging. All of the national level initiatives reviewed include a high proportion of process requirements including requirements for commitments, formation of organisations and undertaking processes. Many of these are designed to ultimately deliver a specific outcome but it is the processes which are required by the standard rather than the actual performance outcome. This approach is one which may be useful to consider for CCBA. In summary, it is clear that there will need to be process requirements in any national level standard. The two main questions to consider are: • What process requirements should be included in the standard? • Should these be principles in their own right (eg stakeholder involvement) or should they be included as criteria describing how the principle should be achieved. 3.1.2.3. Policy requirements A third area for consideration is that of government policy and legislation. This type of requirement is not generally included in voluntary standards since they need to be implemented independent of government support. However, in several of the initiatives reviewed developed specifically for government-led national programs there were explicit requirements for: • Legislation; • Government commitments and policy; • Official bodies or agencies. The justification for inclusion of such requirements is that a national government-led program, whether implemented directly by an arm of national government or by a state government or an independent agency, will be extremely unlikely to meet its goals if they are in conflict with existing legislation or government policy. This can be particularly challenging where there are differences between different parts of government (eg Ministry of Environment versus Ministry of Mining) which have different and sometimes contradictory policies or where the existing legal framework is complex and contradictory or inadequate. All of the national initiatives reviewed addressed this issue. EITI specifically requires government to ‘issue an unequivocal public statement of its intention to implement EITI’. VPAs have included support for reviewing the legal framework and, where necessary, undertaking revision of contradictory or unsatisfactory laws. The Kimberley Process and CITES are both implemented directly through the Government-led standards for REDD and other forest carbon programs development and implementation of new or revised laws that make the requirements a legal obligation at national level. In summary, consideration should be given to the appropriateness of inclusion of requirements about the legal and policy framework. If included these could range from checking that there is no policy or law which would actively prevent the program being delivered to requiring a more actively supportive policy and regulatory framework. 3.1.3.Phased approaches An important consideration for the development of the standard is to include provision for a phased approach since the implementation of national level REDD and other forest carbon programs is likely to be a phased process itself. There are various ways in which phasing can be achieved, for example: Preparation phase and compliance phase: the approach adopted by the EITI is to have an initial preparation phase where the country makes a public commitment to compliance and an action plan to reaching this stage. It can then be recognised as a Candidate country – a status which it can maintain for at least two years and possibly more provided an independent verification confirms that adequate progress towards full compliance is being made. Once the country complies it then moves from Candidate to full compliance. A similar approach could potentially be used for national REDD or other forest carbon programs. Partial certification: an approach which is used by various certification schemes (eg FSC for forests, RSPO for oil palm plantations) to deal with very large organisations Is to allow partial certification. This approach allows the organisation to certify part of its holdings provided that: • There is a commitment to certify the entire holding within a defined timeframe (eg maximum 5 years); • The entire holding meets a defined set of minimum criteria which usually refer to issues such as legal compliance, maintenance of high conservation values and absence of serious social conflict. This type of approach could be adapted in various ways for a national system. For example, implementation of a national plan could be rolled out gradually to different provinces or regions, with each one moving towards compliance with the standard at different rates. Alternatively, if some form of project payment or crediting was allowed within an overall national framework then the national framework could be verified against the minimum criteria while projects could be required to meet the full standard. If this type of approach is adopted it is important to provide very explicit requirements and guidance to certifiers or verifiers about how to check the requirements for minimum compliance. Stepwise approaches: an approach which has been developed by a number of initiatives is the stepwise approach. This approach allows the full set of requirements Government-led standards for REDD and other forest carbon programs of the standard to be broken up into various steps or modules. The implementing organisation then implements various components gradually and is able to report on progress made en route to full compliance. Most stepwise approaches require compliance with a minimum set of requirements before any claims are made but then allow each organisation to develop its own action plan for full compliance. The attraction of this approach is that it allows claims to be made relatively early in the process linked to very clear reporting on both the current performance and ongoing progress (see Section 4.4 for further discussion about claims). If any of these approaches are considered it has implications for the way in which the standard is formulated – either necessitating requirements for different phases or requiring criteria setting out minimum and additional requirements. Content of the standard: Key issues for discussion 1. What should the scope of the standard be, including both scope of requirements included and scope of application (plans, implementation etc)? 2. What type of criteria should be used? • Outcome criteria including clarity on the performance level required; • Process criteria (or inclusion of process requirements at the principle level); • Policy criteria including requirements for legislation, government policy and official bodies. 3. Should phased approaches be built into the standard and if so how? 3.2. Development of the standard There is fairly general agreement among all initiatives that work with standards and sustainability for the natural resources sector that it is important to involve a wide range of stakeholders in the development of the requirements or standards. It is also generally accepted that this should encompass economic, environmental and social interests with some input from government as appropriate. For this work it will be particularly important to identify and include all relevant supply-side stakeholders, as well as ensuring sufficient input from demand-side stakeholders. 3.2.1.Developing the global requirements The key issue is to ensure that the right stakeholders are identified and that they are able to participate in a meaningful way. In order to decide who the right stakeholders are it is important to consider why their involvement is necessary. There are at least three reasons: Government-led standards for REDD and other forest carbon programs • To ensure that all the relevant issues are considered and discussed since the issues which seem crucial to one stakeholder group may not be identified by others (as discussed in Section 3.1.1 above); • To negotiate the way in which issues are turned into requirements. This may involve both agreeing on the appropriate compromise between economic, social and environmental demands where it is not possible to maximise all three and deciding on what needs to be achieved in order to provide an adequate minimum level of conformance (as discussed in Section 3.1.1 above); • To provide credibility and ‘buy-in’ into the outcome from all the important stakeholders which tends to be much greater where people feel they have had an influence over the process. Based on this, each scheme must ensure that the right range of stakeholders is invited into the process and that they are able to genuinely participate. The way in which different initiatives approach this in practice varies. Some have used international multi-stakeholder standard-setting groups comprising industry, environmental interests and social interests, working over a one or two year timeframe with periods of formal public consultation throughout. This approach is required by the ISEAL Code of Good Practice for setting environmental and social standards and so must be followed by any member of ISEAL (eg FSC, MSC) and has also been adopted by some of the commodity roundtables such as the Roundtable on Sustainable Palm Oil (RSPO) and the Roundtable on Responsible Soy (RTRS). The ISEAL approach puts a strong emphasis on the importance of balanced participation by all relevant groups. An alternative approach is to use one or more technical groups to develop requirements and then consult on the outcome with a range of stakeholders (this was the approach used recently by the Roundtable on Sustainable Biofuels (RSB) and the Better Sugarcane Initiative (BSI)). Whichever approach is followed the most important aspects are to ensure that: • All important stakeholder groups and interests are represented; • The process adopted ensures that all interests are equally able to influence the final outcome (balanced decision-making). • There is a mechanism for dealing with disputes, complaints or grievances (this is very important in ensuring that complaints are dealt with rather than turning into public campaigns against a particular scheme or standard). 3.2.2.National interpretation and/or implementation Once global requirements have been developed, it is necessary to consider how the standard will be used in each country. For many project-level certification schemes such as the FSC and RSPO there is a defined process for interpreting the global principles and criteria at a national level via a multi-stakeholder process. The national Government-led standards for REDD and other forest carbon programs interpretation is then used by certification bodies as the basis for all project certification in that country. For standards applied to national initiatives there are also requirements for interpretation or implementation at the national level. In general, these refer more to national implementation since each initiative is only implemented once unlike project-based approaches where the national interpretation is used to judge implementation by many different projects. The schemes reviewed vary in the extent to which they make provision for some stakeholder involvement in the process of implementation. For example: • EITI requires the development of a national body called the multi-stakeholder group which must agree on the reporting template used and approve the independent financial auditor. • The VPA process includes provision for regular consultation with national stakeholders during the negotiation of each agreement including a multi- stakeholder process to identify the scope of laws to be included under the agreement (the Legality Definition). It also requires the formation of a Joint Implementation Committee to oversee interpretation and implementation of the VPA requirements. • The Kimberly Process does not include significant requirements for engagement with stakeholders. Participants are required to ensure that the processes for issuing Certificates meet the minimum standards on internal controls. However, there is no requirement for engaging stakeholders in individual countries which has led to some criticism from NGOs. Development of the standard: Key issues for discussion 1. Which stakeholders need to contribute to the development of the standard and how can balanced input be achieved? • Supply-side stakeholders • Demand-side stakeholders 2. What process, including mechanisms to ensure appropriate stakeholder involvement, should be used in developing the generic global requirements? 3. What process should be used to create a national interpretation or implementation of the standard? To how great an extent should national stakeholders be involved and via what mechanisms? Government-led standards for REDD and other forest carbon programs 4. Evaluation and conformance options Three aspects have been considered when reviewing schemes, each of which contributes to the transparency and rigour of a system: • Monitoring, reporting and verification: what information about performance/progress is collected, who collects it, and how is it used (and by whom) to verify conformance with the requirements of the standard; • Consultation: what is the role of consultation with stakeholders as part of evaluation; • Transparency: what information is reported and to whom. How much is in the public domain; • Non-conformance and sanctions: what happens if there is non-conformance and should the scheme include provision for sanctions. 4.1. Monitoring, reporting and verification While all the schemes reviewed include mechanisms for evaluating performance or progress in delivering the requirements of the scheme, there are big differences in how this is done and by whom. Evaluation encompasses three components: • Monitoring is the process of collecting information on how the requirements of the standard are being implemented. This can be done by one or more organisations and can range from self-assessment through information collection by official bodies or civil society groups to information being collected by independent auditors. • Reporting of the information collected can range from a minimal summary to a full report of all relevant information. Reports can be produced exclusively for internal use, made available for review or be put in the public domain. • Verification involves checking that the information collected and reported is accurate. It can range from verification of information provided by others in a report to verification of actual activities on the ground, and may or may not include consultation. Project certification schemes such as FSC, MSC and CCB all have clearly defined auditing processes which require the evaluation to be undertaken by an audit team from an accredited certification body. Information is collected by the team during a visit to the project site, a report produced and a decision on whether the project conforms with the standard made (usually by the auditing organisation) on the basis of this information. The national initiatives reviewed use a much wider range of approaches. At one end of the spectrum is Independent Forest Monitoring (IFM) which usually involves the collection and analysis of detailed information by the independent monitoring organisation. For example, in Cameroon the exploitation of concessions has been monitored using satellite imagery to track where and when logging is taking place. Government-led standards for REDD and other forest carbon programs Based on the information collected, the monitoring organisation produces a report on progress with meeting the concession allocation requirements. At the other end of the spectrum, the initiatives which are mainly inter-governmental agreements such as the Kimberley Process and CITES rely almost entirely on self- monitoring and reporting by the country. In both cases the requirements need to be implemented via national legislation and the establishment of a national ‘competent authority’ which is then responsible for implementing the requirements (in both cases relating to provision of export certificates to show that diamonds and rare species respectively are legal). Both systems require countries to report information and aggregated statistics but it is at the discretion of the country to decide who does this and there are very limited mechanisms for any verification of the information provided. The Kimberley Process does include provision for a peer review system to oversee implementation. This is not compulsory, although the majority of participants have received review visits. However, there are limited specific provisions for follow-up to review visit findings. The EITI and VPAs both utilise approaches which combine internal monitoring with independent verification. The aim of the EITI is to ensure transparency (and implicitly honesty) in the flow of money from companies to government in the extractive industries sector. Therefore, a key requirement is that information on payments is provided by both the companies and the government and that this is reconciled and checked. EITI requires this to be done by an independent financial auditing firm (selected by a national multi-stakeholder group) following international good practice guidelines for financial auditing (see Figure 4.1). Figure 4.1 Simplified schematic representation of the approach taken by EITI to monitoring, reporting and verification. In addition, there is also a requirement for Validation (an evaluation or audit) of implementation of all the EITI requirements by an independent Validator approved by Government-led standards for REDD and other forest carbon programs EITI. EITI has produced a validation grid (a checklist of the issues to be validated) together with guidance to be used to undertake the validation. The Validator seeks evidence of conformance via review of documents in the public domain, requesting all companies to provide a self-assessment of conformance (via a ‘Company Form’) and consultation with the international EITI Secretariat, the national EITI body and with stakeholders in the country. However, validation does not involve collection of primary evidence through visits to companies. This is shown schematically in Figure 4.1. The legality assurance system (LAS) which is a core component of VPAs uses a combination of local verification which can range from self-assessment to third party checks and ‘independent monitoring’ which is a verification of the whole system by a third party. The aim of the LAS is to ensure that timber is legally produced in the forest and not mixed with illegal timber in the supply chain. Verification of the adequacy of both of these activities (forest management and supply chain control) is required (see Figure 4.2) and can be implemented by ‘… government, market participant [ie company] or third-party organisation or some combination of these, which has adequate resources, management systems and skilled and trained personnel, as well as robust and effective mechanisms to control conflicts of interest.’ FLEGT Briefing Note 05: Legality Assurance Systems: Requirements for Verification. Series 2007 European Commission. A very important point is that the VPA requirements recognize that legality in the forest and control of the supply chain are two very different activities and that the verification agency and mechanism for control for each may be different. Source: FLEGT Briefing Note 03. A Timber Legality Assurance System. European Commission. Series 2007. Figure 4.2 Schematic representation of a VPA Legality Assurance System showing the various levels of evaluation Government-led standards for REDD and other forest carbon programs VPAs also include the requirement for independent monitoring of the legality assurance scheme. This Third-Party Monitor is ‘…a non-political body, possessing the necessary skills and systems to ensure its independence and objectivity, which monitors implementation of the LAS by: (i) checking all its aspects using best auditing practice; (ii) identifying non- compliances and system failures and (iii) reporting its findings to the JIC [management committee]. FLEGT Briefing Note 07 Guidelines for Independent Monitoring. 2007 Series European Commission. It is not yet clear how much authority the independent monitor will have in practice since no LAS is yet fully functioning. The review of different initiatives raises a number of questions which need to be considered. Different types of monitoring and verification: the approaches used by the initiatives reviewed ranged from self-reporting by those implementing the system to completely independent audit by accredited third-parties. In general, the greater the degree of independence, the greater the perceived credibility and robustness of the system but also the greater the costs of implementation. This is the case whether a system aims at project level or national level implementation. An additional issue for national verification is that of sovereignty. It is clear that for several of the governmental initiatives reviewed there was considerable reluctance to require a national government to undergo an independent audit. Rather the independent element needed to be confined to certain key aspects. Different levels of monitoring and verification: a major difference between a scheme operating at the project level and one operating at the national level is the extent to which any verifier can collect information at the national level. While it is realistic for an audit team to visit a project site and check conformance with a standard in a relatively short period, this is much more challenging at a national level. A number of approaches to resolving this issue were identified from the national initiatives reviewed. In particular, the use of different types of evaluation and verification at different levels. For example, EITI combines elements of self- declaration for individual companies with independent financial audit for aggregated data. VPAs allow national governments to identify appropriate bodies for verifying implementation of the system at a national level – simply providing guidance on minimum competence – but also requires oversight by an independent third party. Evaluation methodologies: as the discussion of approaches to evaluation and verification progresses, it will be important to consider in more detail the evaluation methodology to be used. Generally most project-based certification schemes have very clear methodologies to guide auditors. There was more variation between national schemes but there does seem to be a tendency with those developed more recently (eg EITI, VPAs) to be clearer and provide more guidance. A number of other issues such as recognition and control of verifiers and dealing with complaints will also need to be considered. As many of these issues are very Government-led standards for REDD and other forest carbon programs similar for project or national-level evaluation it should be possible to build on existing mechanisms. Evaluation of implementation: Key issues for discussion 1. Monitoring: how should information be collected and by whom? Should different approaches be used for different requirements of the standard? 2. Reporting: What should be reported and who should see reports. 3. Verification: What type of verification is needed – verification of reports or in the field. How independent should the verification organisation be? 4.2. Consultation during evaluation The issue of consultation with stakeholders was touched on in the previous section, but is highlighted again because of the importance attached to it by many of those involved with the different processes. Consultation plays three important roles within the evaluation process. • Firstly, it provides a source of evidence of conformance with any requirement in the standard which relates directly to relationships with stakeholders. • Secondly, stakeholders are able to raise concerns with relation to conformance with other parts of the standard. While this may not be sufficient evidence on its own, it can guide a verifier to look more closely at certain issues. • Thirdly, bringing stakeholders into the process through consultation is an important component (together with transparency) of building trust and credibility. All the certification schemes reviewed include a requirement for consultation during the assessment process. Both EITI and VPAs also require consultation as a core component of validation (EITI) and independent monitoring (VPAs): • EITI specifies that ‘…the Validator meets with the multi-stakeholder group, the organisation contracted to reconcile the figures … and other key stakeholders including companies and civil society not in the multi-stakeholder group).’ EITI Rules Including Validation Guide. DFID 2009. • Under VPAs ‘Monitoring activities seek and consider input from a range of stakeholder groups including forest owners and managers, processors, buyers, central and regional governments, academics, conservation organisations, NGOs, workers, forest users, indigenous groups and communities’. FLEGT Briefing Note 07 Guidelines for Independent Monitoring. Series 2007 European Commission. However, neither scheme provides any detailed methodology to show how consultation should be carried out and how much is enough. This is a very important Government-led standards for REDD and other forest carbon programs issue as consultation can be complex and expensive. Therefore, if consultation is required it is useful to provide guidance on mechanisms and what is sufficient. Intergovernmental approaches such as the Kimberley Process and CITES have less focus on consultation for which they have received some criticism from NGOs. Consultation during evaluation: Key issues for discussion 1. What requirements for consultation with interested parties should be included in the evaluation process. 2. What guidance can be provided on appropriate mechanisms for consultation. 4.3. Transparency A very important aspect of any initiative is the degree of transparency and in particular the information which is available in the public domain. In addition to information on implementation, it is also useful to have information on evaluation and conformance. Most project-based certification schemes in the natural resources sector, including FSC and MSC require a public summary of the findings of certification audits. These are generally available on the website of the scheme or the certification body. For national schemes there is more variation. • EITI requires both the Auditor’s Report (containing the results of an independent financial audit) and the Validator’s report (providing information on implementation of the EITI Principles and Criteria) to be made publicly available. These are posted on the EITI website. So far, only Azerbaijan has undergone a full validation which was carried out by Coffey International Development. • VPAs require a summary of the findings from the independent monitor to be published publicly. So far, no system is fully functional so no report has been published. • KP participants are required to submit annual reports on implementation of the Kimberley Process in their countries. However, annual reports are not made public. Only ‘review visit’ reports are publicly available. These are monitoring reports to check the implementation of Kimberley Process. • CITES requires each country to report to the conference of parties annually on issues such as volumes traded. These reports are made publicly available. The general view of those consulted with was that transparency should be an integral component of any scheme. Government-led standards for REDD and other forest carbon programs Reporting and transparency: Key issues for discussion 1. What information should be required in the public domain? 2. Who should provide the information and where should it be found (eg CCBA website, other websites, other places)? Should different levels of information be available in different places? 4.4. Conformance and sanctions An important issue which needs to be considered is the response to failure to conform with the standard and the potential for provision for sanctions. 4.4.1.Undertaking improvements If the evaluation process identifies that there are areas of non-conformance with the requirements of the standard then there is a need to take action to resolve the issue. For project-based certification schemes when the auditor identifies a nonconformance a corrective action request is issued to the certified organization with clear guidelines on how much time is allowed to address the issue before further action is taken. For national schemes there is a wider range of approaches. • EITI: The guidance provided indicates that countries should be provided with an opportunity to address weaknesses: ‘The Validation Report should contain …. An overall assessment of the implementation of the EITI: is a country a Candidate, Compliant or is there no meaningful progress? … Before making any … recommendation [that a country should be de-listed] the Validator should seek to ensure that the country has had time to act on any such findings – this might mean, for instance, that such a recommendation would only be justified following two Validation exercises which had both reached similar conclusions...’ IETI Rules Including the Validation Guide, DFID, 2009. • VPAs: While no VPA is yet fully functioning the intention is that for each VPA signed there will be a Joint Implementation Committee (JIC) comprising representatives of the Partner Country and the EU which oversees the implementation of the agreement. One responsibility of the JIC is to appoint a Reporting Body which is required to: (i) Examine and validate the findings of the Third-Party Monitor before their public release; (ii) identify corrective actions where appropriate and check whether such actions are taken …’. FLEGT Briefing Note 07 – Guidelines for Independent Monitoring. Series 2007 European Commission. Government-led standards for REDD and other forest carbon programs • CITES: The conference of parties can raise issues of non-conformance with national governments and there is a defined time for governments to respond. 4.4.2.Implementing sanctions A very important issue is what happens if non-conformances are identified but no action is taken to resolve the situation. The extent to which sanctions are necessary, and the type of sanction used, depends very much on the purpose of the scheme. For project-based certification schemes sanctions are achieved through the suspension of the certificate. While not a frequent occurrence, certificates are regularly withdrawn under schemes such as the FSC indicating that this approach works. For the national approaches reviewed there is a wider range of approaches. • EITI: The ultimate sanction in EITI for failure to make progress in implementing requirements is to be de-listed: It is important that, where Validation shows that no meaningful progress has been made, and that there is little intention to implement the EITI in line with its Principles and Criteria, the Validator provides a clear assessment of whether this means the Board should consider de-listing the country from the list of Candidate countries. • VPAs: The ultimate sanction under a VPA would be the suspension of the agreement. The European Commission has indicated that this would be a decision to be taken by the Joint Implementation Committee. However, this is not publicly documented so it is unclear whether, in practice, such action would ever be taken. • Kimberley Process: The Kimberley Process requirements are supposed to be implemented through enacting national legislation. Therefore, enforcement should be undertaken as part of each country’s enforcement of its own laws. If this does not work in practice, there does not appear to be a robust mechanism to suspend a country with significant conformance issues: 16. In the event that an issue regarding compliance by a Participant or any other issue regarding the implementation of the Certification Scheme arises, any concerned Participant may so inform the Chair, who is to inform all Participants without delay about the said concern and enter into dialogue on how to address it. Participants and Observers should make every effort to observe strict confidentiality regarding the issue and the discussions relating to any compliance matter. Kimberley Process Certification Scheme, Section VI Administrative Matters. • CITES: While there are clear procedures for the conference of parties to request corrective actions, it is very unclear what sanctions, if any, are available if a country fails to implement changes. Government-led standards for REDD and other forest carbon programs The response to non-conformances is very important in influencing both the effectiveness and the credibility of a scheme. If there are no sanctions for ongoing non-conformance, then experience from the schemes reviewed and other sectors suggests that there is a real risk of ineffectiveness and gradual loss of credibility of the standard. Sanctions can operate at a number of levels depending on the purpose of the standard: • Transparency: putting information on non-conformance in the public domain can act as an incentive to improve without necessitating any further action. • Recognition: using various levels of recognition allows the level to be reduced without complete exclusion. • Certification: where a full certification scheme is in place then certificates can be withdrawn. However, sanctions also raises important questions of governance and sovereignty. • Governance: If sanctions are used, then there must be a very clear structure and mechanism for deciding whether sanctions are appropriate, what they should be and ensuring that they are enforced. • Sovereignty: Schemes developed for government-led initiatives face the particular issue that it is quite challenging to impose sanctions on sovereign governments. Therefore, careful thought will need to be given to the question of sanctions which balances the need for effectiveness and credibility with the issues of governance and sovereignty. 4.4.3.Making claims The question of claims is very closely related to that of conformance and sanctions because if the standard is to remain credible then it is important that any claims made are accurate. Therefore, it is important to develop very clear guidance on the types of claims which are and are not permitted. A national level approach raises particular issues since it may not be desirable or possible to stop a government from reporting on use of the standard. Therefore, it will be important to ensure that the rules on claims are very clear, effective and implementable. This is particularly important if a phased approach is adopted as there is considerable scope in such a system for claims to be made which go beyond current performance. Government-led standards for REDD and other forest carbon programs Non-conformance and sanctions: Key issues for discussion 1. What are the appropriate mechanisms for identifying non-conformances and requesting corrective actions at a national level 2. Should there be sanctions for continued non-conformance? What might sanctions include? 3. What control, if any, should there be over claims. 5. Governance While governance was not reviewed in detail for this review, some issues were identified during the analysis which may be useful to consider. 5.1. National implementation The issue of national interpretation or (particularly in the case of national initiatives) oversight of implementation of the standard at national level was discussed in Section 3.2. An important issue this raises with respect to governance is what type of organization, if any, exists to undertake this in the country. The different initiatives reviewed use different approaches: FSC encourages the formation of multi-stakeholder National Initiatives which, once endorsed become the FSC organization responsible for standard-setting and for convening stakeholder involvement in certification in the country. However, in the absence of a National Initiative, certification bodies can undertake certification activities in a country based on their own interpretation of the global standard informed by some local consultation (ie without any local representation of FSC). The Roundtable on Sustainable Oil Palm (RSPO) has used the model of setting up national offices as branches of the Secretariat rather than as multi-stakeholder groups. However, it also requires a multi-stakeholder national interpretation process for its standard Most of the national schemes reviewed have a requirement for some type of structure at the national level which generally focus on oversight of implementation. These can be broadly divided into two types: Individuals or bodies responsible for ensuring that requirements are met: Several initiatives specifically require an individual or body to be identified or established with the responsibility of ensuring that the requirements of the initiative are implemented. For example EITI requires appointment of ‘a senior individual to lead on EITI implementation’ while VPAs require the formation of a Joint Implementation Committee made up of representatives of the Partner Country, the European Commission and EU Member States to ‘… facilitate and monitor the implementation of the VPA, and to mediate and resolve any conflicts and disputes that arise.’ CITES and the Kimberley Process both require enactment of national legislation and the formation of national ‘competent authorities’. Government-led standards for REDD and other forest carbon programs Ensuring stakeholder involvement: There are also mechanisms which aim to ensure wider stakeholder involvement in implementation of the scheme. EITI requires the formation of a ‘multi-stakeholder group to oversee EITI implementation’. Both VPAs and Independent Forest Monitoring include the option for using some type of committee to review findings which may include a range of different interests though this is not a requirement. Neither Kimberley nor CITES require strong involvement of stakeholders at a national level. An important question will be the extent to which some type of organization or process is required in the country to provide local governance for the interpretation and implementation of the requirements. 5.2. Imposing sanctions and controlling claims Dealing with governments, whether national or sub-national can be much more challenging than dealing with an individual organisation or company. In particular, while all the certification systems for project-level implementation had clear guidance on non-conformance and withdrawal of recognition, the national initiatives were much more vague in this area. As discussed in Section 4.4 above, if there is a need for a system which includes sanctions or seeks to control the claims being made, it will need to have a very clear and robust governance mechanism if it is to work. Governance: Key issues for discussion 1. How can governance be provided at a national level to oversee the interpretation/implementation of the standard. 2. What additional mechanisms, if any, are required to manage the additional pressures of dealing with governments rather than individual organisations, particularly if there is a process of sanctions for non-conformance or control of claims? Government-led standards for REDD and other forest carbon programs 6. Links to other international commitments Convention on Biological Diversity (CBD) The CBD is an international convention which countries can join voluntarily. Countries which have ratified the CBD are already committed to reporting on the implementation of a range of specific measures to slow down the loss of biological diversity. Each country must designate a management authority, with responsibility for oversight and monitoring of all related activity at the national level. This includes a range of measures including establishing national protected areas, and enacting action plans specific to certain threatened species or their habitats. ILO Conventions Member Countries of the ILO core conventions are committed to report annually to the governing body of the ILO on measures taken to bring the conventions into force in domestic law. However, there is a crucial difference between ILO conventions and other international conventions (such as the CBD). As a UN institution, the ILO can have jurisdiction over a sovereign state even if that country has not ratified a given convention. The ILO tracks developments in all countries, and, under article 19 of the ILO Constitution, member States are required to report at regular intervals, even on the conventions they have not ratified. Furthermore, the ILO can bring cases to the International Court of Justice, if a member country fails to respond effectively after the raising of a set of recommendations by the ILO. Convention on International Trade in Endangered Species (CITES) CITES is another international convention which countries voluntarily commit to. Signatories must implement controls on the trade of CITES-listed animals and plants and report annually on statistics. Although it has very wide acceptance, (the treaty has now been ratified by everyone except Angola, Mauritania, Oman, Turkmenistan and North Korea) there is no agency with authority to hold states to account for failure to comply with the process. However, the structure of CITES, where much of the monitoring is carried out by expert committees (animals and plants) with balanced geographical representation does allow for some supra-statal oversight. Decisions to list species can be passed on a two thirds majority of the COP, so it seems possible that a species can be listed even if the country of origin is against such a listing. UN Declaration on Rights of Indigenous Peoples The UN Declaration on Rights of Indigenous Peoples is not a legally binding convention, and therefore, does not impose legal obligations on governments. The Declaration is an aspiration document which provides guidance on other legal obligations signed by countries that are embodied within the Declaration. Monitoring Government-led standards for REDD and other forest carbon programs on compliance to what is contained within the Declaration is done through the UN’s eight treaty bodies which monitor core human rights obligations. These bodies monitor how the various embodied conventions are implemented. All States parties are obliged to submit regular reports to the Committee on how the rights are being implemented. States must report initially two years after acceding to the Convention and then every five years. The Committee examines each report and addresses its concerns and recommendations to the State party in the form of “concluding observations. Millennium Development Goals (MDGs) The Millennium Development Goals (MDGs) are eight goals to be achieved by 2015 that respond to the world's main development challenges. The MDGs are drawn from the actions and targets contained in the Millennium Declaration that was adopted by 189 nations-and signed by 147 heads of state and governments during the UN Millennium Summit in September 2000. Each country has to provide data in term of achievement of MDGs. Data are typically drawn from official statistics provided by governments to the international agencies responsible for the indicator. This is done through periodic data collection from ministries and national statistical offices around the globe. Similar to UN Declaration on the Rights of Indigenous Peoples, the MDGs is not a legally binding convention hence does not impose any legal obligation. Government-led standards for REDD and other forest carbon programs Annex 1 – Summary of schemes and standards reviewed Seven schemes or initiatives were reviewed for this report. These included both certification schemes aimed at project-level certification and national/sub-national initiatives. Project level certification schemes reviewed included: • The Forest Stewardship Council (FSC) • The Marine Stewardship Council (MSC) National/sub-national level initiatives reviewed included: • The Extractive Industries Transparency Initiative (EITI) • The Kimberley Process Certification Scheme (KPCS) • Independent Forest Monitoring (IFM) • European Union Voluntary Partnership Agreements (VPAs) • The Convention on Trade in Endangered Species (CITES) For each initiative information on the following was collated: • Ownership: initiation and participation; • Objectives; • Scope: sector or commodity; • Types of criteria and/or indicators: quantitative, qualitative, process • Assessment methods: how is information on conformance collected • Verification systems: how is conformance checked • Accreditation, independence and quality control of assessors • Governance of the standards (participation and decision making) • Public reporting • Sanctions for non-conformance Government-led standards for REDD and other forest carbon programs 1. Forest Stewardship Council (FSC) Aspects Standard/ scheme information Ownership, Initiation and participation FSC was founded in 1993. Representatives from timber industry, traders, retailers and NGOs were involved. Those not involved include European small forest owners, north American forest industry and governments. Objectives FSC is an independent, non-governmental, not for profit organization established to promote the responsible management of the world’s forests. Sectors/ commodities/ scope Forestry Types of The international standard of FSC is the 10 Principles and 56 Criteria criteria/ (P&C). National/ regional standard-setting bodies and certification indicators – bodies develop their standards using the P&C as basis. quantitative, Certification bodies can carry out certification according to their own qualitative, ‘interim’ standards which are adapted for use in the country with input process from stakeholders. These interim standards would be superseded should a national initiative develop and have a standard accredited by FSC. Assessment methods FSC certification assessments/audits require certification body to review documentations and carry out sampling of sites and consultation with stakeholders. Verification systems Only certification bodies accredited by Accreditation Services International (ASI) can carry out certification audits (both forest management and chain of custody). Accreditation, ASI manages the FSC accreditation programme on behalf of FSC. ASI is independence operating a management system according to ISO/IEC 17011:2004 and and quality is a member of the ISEAL Alliance. control of Certification bodies are required to comply with the requirements of assessors ISO/ IEC Guide 65:1996. Certification body must be accredited for forest management and chain of custody certification. Governance of the standards (participation and decision making) The FSC is an international association of members consisting of a diverse group of representatives. FSC has three levels of decision making bodies: • The General Assembly of FSC members -It is the highest decision-making body in FSC and is made up of the three membership chambers: Environmental, Social and Economic. Each chamber has 33.3% of the voting power. Decisions are adopted with 66.6% of the total vote plus a quorum of 50 % plus one vote in each chamber. The purpose of the chamber structure is to maintain the balance of voting power between different interests without having to limit the number of members. Government-led standards for REDD and other forest carbon programs Aspects Standard/ scheme information • The Board of directors - It is accountable to the FSC members. It is made up of nine individuals who are elected from each of the chambers for a three-year term. • The Executive Director and Secretariat - Manages FSC on a day- to-day basis from a head office in Bonn, Germany. Public reporting Certification bodies are required to publish the summary of certification audits at their website. Sanctions for nonconformance Certificates can only be issued if there are non non-conformances or minor non-conformances. When minor non-conformances are detected, certified organizations are given normally 12 months, but sometimes 24 months to remedy the problem. Government-led standards for REDD and other forest carbon programs 2. Marine Stewardship Council (MSC) Aspects Standard/ scheme information Objectives To use an ecolabel and fishery certification programme to contribute to the health of the world’s oceans by recognising and rewarding sustainable fishing practises, influencing the choices people make when buying seafood, and working with partners to transform the seafood market to a sustainable basis. Ownership: The Marine Stewardship Council was first formed in 1997 by Unilever Initiation and and WWF, the international conservation organisation. In 1999, the MSC participation became independent from both these organisations to become a global, non-profit organisation. The MSC was set up to tackle the problem of over-fishing that is damaging fishing industries and marine environments around the world. To this end, the MSC spent two years developing standards for sustainable and well managed fisheries. MSC is supported by retailers, governments, non-governmental organizations, conservationists, and the fishing industry. Over 35 fisheries around the world are now certified, representing over 8% of global wild fisheries production for human consumption Scope: sectors or commodities Fishery Types of MSC has two standards covering production and tracing of sustainable criteria/ fishing: indicators – • Environmental standard for sustainable fishing quantitative, qualitative, • Chain of custody standard for seafood traceability process MSC has 3 core principles that every fishery must meet: • Principle 1: Sustainable fish stocks • Principle 2: Minimising environmental impact • Principle 3: Effective management The detailed assessment of a fishery is made against set of 31 performance indicators and scoring guideposts. Once a fishery has been certified, all companies in the supply chain from boat to plate must have MSC CoC certification. Government-led standards for REDD and other forest carbon programs Aspects Standard/ scheme information Assessment The Fisheries Certification Methodology (FCM) sets out all the steps that methods certifiers must take to assess a fishery against the MSC standard. This includes the requirements for consultation with stakeholders, the submission of draft reports at specific stages, objection procedures. The MSC Fisheries Assessment Methodology (FAM) prescribes how the MSC standard for sustainable fishing should be interpreted when assessing fisheries for MSC certification. The FAM was developed in July 2008 to ensure consistency of MSC assessments and to streamline the assessment process. The FAM replaced the Assessment Tree, the previous methodology which provided Performance Indicators relating to each element of the MSC standard, along with Scoring Guideposts defining the levels of responses needed to achieve passing marks. Verification systems Verification is undertaken by a third-party accredited certification body. Only accredited certifiers can carry out assessments or make certification decisions. Accreditation, Accreditation is operated by Accreditation Services International (ASI). To independence obtain accreditation certifiers must meet the requirements set out in the and quality MSC Accreditation Manual, which ensures that certifiers fully understand control of the requirements of MSC standards and the certification methodologies. assessors Governance of Structure of MSC: the standards The MSC is governed by a Board of Trustees. The Technical Advisory (participation Board and Stakeholder Council advise the Board. The Board of Trustees, and decision Technical Advisory Board and Stakeholder Council include making) representatives from industry, environmental groups and science, and from different geographical regions. Trustees are chosen for their knowledge, expertise and support for the MSC. There is no formal membership structure, but it is recognised that the Board should be balanced with representatives from different sectors and geographical regions to reflect the broad mix of people who have a stake in the MSC's mission. Decision making: According to the MSC Article of Association: ‘Proceedings at general meetings: Article 16: In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall be entitled to a casting vote in addition to any other vote he may have. Stakeholder Council: Article 51(6): The two chairs shall jointly chair meetings of the Stakeholder Council and, in the case of an equality of votes for and against any resolution, the chair with the shortest period of office unexpired shall have a second or casting vote. The chairs shall, in carrying out their duties as chairs, seek impartially to promote and represent the Stakeholder Council as a whole.’ Public reporting There is a requirement for public reports for all certified fisheries. Public certification reports are available at MSC website. Fisheries in assessment can also be found at website. Government-led standards for REDD and other forest carbon programs Aspects Standard/ scheme information Sanctions for nonconformance If major non-conformances are identified by assessors then these must be addressed prior to certification or, in the case of a certified operation, within an agreed timeframe or the certificate is withdrawn. Government-led standards for REDD and other forest carbon programs 3. Extractive Industries Transparency Initiative (EITI) Aspects Standard/ scheme information Objectives The Extractive Industries Transparency Initiative (EITI) aims to strengthen governance by improving transparency and accountability in the extractives sector. EITI is a globally developed standard that promotes revenue transparency at the local level. Implementation takes place at the country level, in a process that emphasises multi-stakeholder participation. Ownership, The Extractive Industries Transparency Initiative (EITI) was launched by Initiation and the former UK Prime Minister Tony Blair at the World Summit on participation Sustainable development in Johannesburg, September 2002. Its aim is to increase transparency over payments by companies and revenues to governments in the extractive industries. The EITI gains supports from governments, industry and civil society. Forty of the world’s largest oil, gas and mining companies support and actively participate in the EITI process -through their country operations in implementing countries, through international-level commitments, and through industry associations. Eighty global investment institutions (that collectively manage over 14 trillion US$) support the initiative. Civil society organisations participate in the EITI directly and through the Publish What You Pay campaign, which is supported by over 300 NGOs worldwide. International organisations supporting the EITI include the World Bank, IMF, African Development Bank, Asian Development Bank, the European Bank for Reconstruction and Development, and the European Investment Bank. These organisations provide technical and financial support to implementing countries, and support EITI outreach. A number of governments including Australia, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, the United Kingdom and the United States support the EITI. Sectors/ EITI applies to the oil, gas and mining industries. commodities/ Note that Liberia has successfully campaigned to include forestry in the scope EITI process; as a result, Liberia has become the first country to extend the scope beyond mining, oil and gas extraction to include forestry. Types of There are 12 EITI principles that an implementing country is required to criteria/ comply with. These principles serve as a framework for implementation indicators – of EITI, and are process-oriented. There are several steps that the quantitative, government needs to follow. qualitative, To become an EITI Candidate, a country must meet four sign up process indicators: 1. Issue an unequivocal public statement of intent; 2. Be committed to working with civil society and companies on EITI Government-led standards for REDD and other forest carbon programs Aspects Standard/ scheme information implementation; 3. Appoint an implementation leader; 4. Publish and make widely available the costed Country Work Plan, containing measurable targets, a timetable for implementation and an assessment of capacity constraints (government, private sector and civil society). Following this, the country has to fulfil several requirements to get validation. Preparation: 5. Establish a multi-stakeholder working group; 6. Engage civil society; 7. Engage companies; 8. Remove obstacles to implementation; 9. Agree reporting templates; 10. Approve independent EITI Administrator; 11. Ensure full participation from companies; 12. Ensure that company accounts are properly audited; 13. Ensure that government accounts are properly audited. Disclosure: 14. Disclose to the Administrator payments by companies to government; 15. Disclose to the Administrator revenues received by the government; 16. Ensure that payment and revenue figures are reconciled; 17. Identify discrepancies and recommend improvements. Dissemination: 18. Make EITI report publicly accessible, comprehensive and comprehensible; 19. Examine companies’ support of EITI implementation; 20. Establish Review mechanism to ensure sustainable implementation. Validation: Country undertakes external Validation To achieve EITI Compliant status – or to extend Candidate status beyond 2 years – a country must complete an EITI Validation. If the EITI International Board considers a country to have met all the indicators in the Validation grid, the country will be recognised as EITI Compliant. If a country has made good progress, but does not meet all of EITI requirements, the country may apply to retain its Candidate status for a limited period. Where validation shows that no meaningful progress has Government-led standards for REDD and other forest carbon programs Aspects Standard/ scheme information been achieved, the Board will revoke the country’s Candidate status. Currently only Azerbaijan has achieved Compliant status. 25 other countries have achieved EITI Candidate status: Cameroon, Central African Republic, Democratic Republic of Congo, Republic of Congo, Côte d’Ivoire, Equatorial Guinea, Gabon, Ghana, Guinea, Kazakhstan, Kyrgyzstan, Liberia, Mali, Mauritania, Madagascar, Mongolia, Niger, Nigeria, Norway, Peru, Sao Tome and Principe, Sierra Leone, Tanzania, Timor-Leste and Yemen. Assessment Information disclosed by the companies and government is audited to methods reconcile figure and produce the EITI report. EITI has a Validation process which is the quality assurance mechanism. It evaluates EITI implementation in consultation with stakeholders, it verifies achievements with reference to the EITI global standard, and it identifies opportunities to strengthen the EITI process going forward. Validation is a consultative process. The Validator meets with the multi- stakeholder group, the organisation contracted to reconcile the figures disclosed by companies and the government and other key stakeholders. There are 7 companies which are accredited by the EITI Secretariat to carry out validation. Verification systems Audits are carried out by third party approved by the stakeholders. Validation is carried out by companies who are accredited by EITI Secretariat. Accreditation, independence and quality control of assessors No information available on accreditation arrangement. Governance of The EITI is overseen by the EITI International Board, chaired by Dr Peter the standards Eigen, founder and former chairman of Transparency International. The (participation Board consists of representatives from EITI implementing country and decision governments, extractive companies, civil society groups, investors, and making) supporting country governments. The highest governing body is the Members Meting at the EITI Global Conference. The last conference in Doha in February 2009 was attended by over 500 people including Heads of States, CEOs and civil society leaders. The international community provides support both bilaterally and through the EITI Multi-Donor Trust Fund managed by the World Bank. The Secretariat is funded by the supporting countries and the supporting companies. Implementing country governments, pay for the validation of their EITI process. Public reporting All EITI reports are required to publish publicly. Government-led standards for REDD and other forest carbon programs Aspects Standard/ scheme information Sanctions for nonconformance Where validation shows that no meaningful progress has been achieved, the Board will revoke the country’s Candidate status. Government-led standards for REDD and other forest carbon programs 4. The Kimberley Process Certification Scheme Aspects Standard/ Scheme information Ownership, The Kimberley process started when Southern African diamond- Initiation and producing states met in Kimberley, South Africa, in May 2000, to discuss participation ways to stop the trade in ‘conflict diamonds’ and ensure that diamond purchases were not funding violence. In December 2000, the United Nations General Assembly adopted a landmark resolution supporting the creation of an international certification scheme for rough diamonds. By November 2002, negotiations between governments, the international diamond industry and civil society organisations resulted in the creation of the Kimberley Process Certification Scheme (KPCS) . The KPCS document sets out the requirements for controlling rough diamond production and trade. The KPCS entered into force in 2003, when participating countries started to implement its rules. The Kimberley Process (KP) is open to all countries that are willing and able to implement its requirements. As of November 2008, the KP has 49 members, representing 75 countries, with the European Community and its Member States counting as an individual participant. KP members account for approximately 99.8% of the global production of rough diamonds. In addition, the World Diamond Council, representing the international diamond industry, and civil society organisations – Global Witness, Partnership-Africa Canada – are participating in the KP and have played a major role since its outset. Objectives The Kimberley Process Certification Scheme (Kimberley Process) is an international governmental certification scheme that was set up to prevent the trade in diamonds that fund conflict. Launched in January 2003, the scheme requires governments to certify that shipments of rough diamonds are free from blood diamonds. Sectors/ commodities/ scope Diamonds Types of criteria/ indicators – quantitative, qualitative, process Countries that participate must pass legislation to enforce the Kimberley Process. They must also set up control systems for the import and export of rough diamonds. Participants are only allowed to trade rough diamonds with other participants. The aim is to prevent blood diamonds from entering the Kimberley Process system. Participants are required to ensure that the processes for issuing Certificates meet the minimum standards on internal controls: Undertakings by Participants ‘Each Participant should: (a) establish a system of internal controls designed to eliminate the presence of conflict diamonds from shipments of rough diamonds imported into and exported from its territory; Government-led standards for REDD and other forest carbon programs Aspects Standard/ Scheme information (b) designate an Importing and an Exporting Authority(ies); (c) ensure that rough diamonds are imported and exported in tamper resistant containers; (d) as required, amend or enact appropriate laws or regulations to implement and enforce the Certification Scheme and to maintain dissuasive and proportional penalties for transgressions; (e) collect and maintain relevant official production, import and export data, and collate and exchange such data in accordance with the provisions of Section V. (f) when establishing a system of internal controls, take into account, where appropriate, the further options and recommendations for internal controls as elaborated in Annex II.’ There is no baseline standards that all participants control systems must meet, though it does recommend some controls and enforcement measures that should be implemented. These include the registration of diamond traders, recordkeeping of diamond transactions and spot checks of companies involved in the trade and polishing of rough diamonds. Assessment Participating countries are required to submit data on a quarterly basis methods for the trade of rough diamonds and on a semi-annual basis for the production of rough diamonds in order to comply with the agreement. However, independent and regular data analysis has been limited because the participating governments have been unwilling to contribute the resources needed to adequately fund these efforts. Verification There is no assessment of whether the internal controls implemented by systems participant countries are effective. There is a peer review monitoring system to oversee the implementation of the Kimberley Process. However, this is not a compulsory obligation, though vast majority of participants have received review visits. There are also very limited specific provisions for follow-up to review visit findings. Accreditation, Nil independence and quality control of assessors Governance of the The KP is not, strictly speaking, an international organisation: it has no standards permanent offices or permanent staff. It relies on the contributions of (participation and participants, supported by industry and civil society observers. decision making) The Kimberley Process participants (governments) and observers (the diamond industry, NGOs) meet once a year to discuss the implementation of the scheme. Working groups monitor participants' implementation of the scheme, assess applications to join, gather and analyze statistics, and discuss technical issues. Global Witness, Partnership Africa Canada (PAC), and other NGOs have had an unusual Government-led standards for REDD and other forest carbon programs Aspects Standard/ Scheme information level of involvement in developing and building support for the scheme, helping to write the Kimberley Process Technical Document, and playing an active role in negotiations and implementation. Public reporting Participants are required to submit annual reports on implementation of the Kimberley Process in their countries. However, annual reports are not made public. Only ‘review visit’ reports are publicly available. These are monitoring reports to check the implementation of Kimberley Process. Sanctions for nonconformance There is no mechanism to temporarily suspend a country with significant conformance issues with the KP until its problems have been rectified. Government-led standards for REDD and other forest carbon programs 5. Independent Forest Monitoring (IFM) Aspects Standard/ scheme information Ownership, Independent Forest Monitoring (IFM) was pioneered by Global Witness in Initiation and 1999 to assess and strengthen legal compliance in the forest sector. participation They established the first field-based independent monitoring of forest law enforcement in Cambodia. Objectives The objectives of IFM are: • An increase in transparency regarding information and decisions in forestry; • Improved detection and prosecution of illegal activity, and enforcement of the law; • Better governance through analytical work, informed debate, and wider participation; • Greater understanding of the law, and legal compliance Sectors/ commodities/ scope Forestry Types of criteria/ indicators – quantitative, qualitative, process IFM is not a performance-based standard so does not include set of criteria and indicators. However, there are certain basic principles on how IFM operates in a specific country. IFM centres on the establishment of a contractual relationship between an official host institution responsible for regulation and control in the forest sector and an independent monitoring organisation (monitor), and the use of a Reporting Panel for peer review. The institutional arrangements will vary with local circumstances, but certain principles for structuring IFM should be employed: • A management and reporting system • Broad participation • A system of clear ownership • Commitment to ongoing participation • Participation of key public services • Involvement of civil society organisations • A proactive and prominent role for the donor community • Well-defined provision for dispute resolution The monitor’s contract provides clear terms of reference, which include the minimum standards for IFM. These include: • Access to information • Freedom to investigate and monitor • Reporting panel – including basic principles on procedures Government-led standards for REDD and other forest carbon programs Aspects Standard/ scheme information • Freedom to publish Assessment methods The principal activity of IFM entails field investigations by which independent monitors (with or without the presence of forestry officials) observe and document activity, legal and illegal, in the forest and through the trade (i.e. sawmill, factory, port). Verification systems IFM includes a report panel, or other peer review mechanism, to check that the conclusions and recommendations made in any report are fully in line with the evidence and the forest, environmental, social/labour, and tax laws and international commitments/ agreements. The reporting panel is consists of the forest authority, other key ministries and non- government stakeholders. The panel validates the monitor’s findings or requests further information that will aid the validation process. Accreditation, independence and quality control of assessors The monitoring organisation is independent from the host institution. It is usually selected through a public tendering process with selection being made by the funding agency and the beneficiary government. Governance of the standards (participation and decision making) There are formal (contractual) arrangements between the host institution and the organisation who conduct independent forest monitoring. Public reporting Reports are publicly published Sanctions for nonconformance Host institution is committed to act upon recommendations but there are no sanctions involved for failure. It aims to improve governance in forestry sector rather than a standard that the country has to fully comply with. In some cases (eg Honduras) the findings of the Independent Monitor were used to instigate court cases and prosecutions were made. Government-led standards for REDD and other forest carbon programs 6. Voluntary Partnership Agreement (VPA) Aspects Standard/ system information Ownership, Voluntary Partnership Agreement (VPA) is the centrepiece of the EU Initiation and Forest Law Enforcement, Governance and Trade (FLEGT) Action plan. The participation EU FLEGT Action Plan sets out a programme of actions that forms the EU’s response to the problem of illegal logging and trade in associated timber products. The EU published its firs proposal for a FLEGT Action Plan in 2003. A VPA is a binding agreement between the EU and a Partner Country by which the EU and the Partner Country undertake to work together to support the aims of the FLEGT Action Plan and to implement a timber licensing scheme. To enable this, a new European Regulation on the implementation of the FLEGT licensing scheme has been adopted. Objectives VPAs are designed ultimately to eliminate illegally-produced timber from a Partner Country’s international and domestic trade. Sectors/ commodities/ scope Forestry Types of criteria/ indicators – quantitative, qualitative, process The definition of legality is seen as a sovereign right of countries and the exact definition will be a matter for agreement between the EU and the individual countries. However, FLEGT briefing note 2 set out the framework for definition of legality: • Granting of and compliance with rights to harvest timber within legally-gazetted boundaries • Compliance with requirements regarding forest management, including compliance with relevant environmental, labour and community welfare legislation • Compliance with requirements concerning taxes, import and export duties, royalties and fees directly related to timber harvesting and timber trade • Respect for tenure or use rights to land and resources that may be affected by timber harvest rights, where such rights exists • Compliance with requirements for trade and export procedures One element common to all agreements will be that Partner Countries have, or be committed to developing credible legal and administrative structures and technical systems to verify that timber is produced in accordance with national laws. This implies: • A commitment to ensure that the applicable forest law is consistent, understandable and enforceable and promotes sustainable forest management • Developing technical and administrative systems to monitor logging operations and indentify and track timber from the point Government-led standards for REDD and other forest carbon programs Aspects Standard/ system information of harvest to the market or point of export • A commitment to improve transparency and accountability in forest governance. • Building checks and balances into the tracking and licensing system, including the implementation of an independent monitoring system • Developing procedures to licence the export of legally harvested timber. It is recognized that conditions affecting forest governance and law enforcement in Partner Countries differ. Key elements to consider in designing and implementing VPAs are likely to include: • Social safeguards – VPAs should seek to minimise adverse impacts on local communities and poor people by taking account of indigenous and local communities’ livelihoods associated with forests. • Stakeholder involvement – Provision should be made for regular consultation with stakeholders during the design and implementation of VPAs. Assessment methods Assessment methods include documentation review and field audits to verify: • Compliance with the requirements of the definition of legality in the forest and, where the definition requires it, at processing facilities • Implementation of supply chain controls at each point where a product is shipped, received or transformed - such as sawmills and plywood mills – to check that no material that is unaccounted for has entered the process. Verification There are a set of principles and criteria for verification activities. systems Verification is carried out by a government, market participant or third- party organisation, or some combination of these, which has adequate resources, management systems and skilled and trained personnel, as well as robust and effective mechanisms to control conflicts of interest. VPA also includes an independent monitoring component, which is a function that is independent of a Partner Country’s government forest sector regulatory bodies. It aims to provide credibility to the FLEGT licensing scheme by checking that all aspects of a Partner Country’s Legality Assurance System (LAS) are operating as intended. Accreditation, Appointment of the Third-Party Monitor: independence There is a transparent mechanism for the appointment of the Third-Party and quality Monitor and clear, publicly-available rules regarding its operation. The control of terms of reference for the Third-Party Monitor are approved by the JIC assessors and made public prior to the selection process for the Third-Party Monitor. There are clear guidelines for engaging the Third-Party Monitor, Government-led standards for REDD and other forest carbon programs Aspects Standard/ system information which include an appropriate selection procedure that is open to all qualified domestic and international applicants and ensures transparency and value for money. Organisational and technical requirements: The Third-Party Monitor is subject to external audits by a body which meets the requirements of ISO 17011 or equivalent. These audits verify: • that the Third-Party Monitor operates in accordance with the requirements of ISO Guides 62, 65, 66 or equivalent; and • that is qualified to offer assessment services covering the forest sector and forest products supply chains. There are also requirements for monitoring methodology, scope of monitoring and reporting. Governance of the standards (participation and decision making) A Joint Implementation Committee (JIC) made up of representatives of the Partner Country, the European Commission and Member States to be established to oversee implementation of each VPA. It will be responsible for the ensuring that discussion between the EU and the Partner Country is regular and effective. The JIC’s tasks will include: • Deciding on the timing of the effectiveness of the licensing scheme • Monitoring and reviewing overall progress of implementation of the Partnership Agreement • Reviewing reports from the Independent Monitor and complaints about the operation of the licensing scheme • Mediating and working to resolve conflicts relating to the Agreement and the licensing scheme Public reporting Two reports are delivered by the Third-Party Monitor: • A full report for consideration by the Reporting Body or the JIC, containing all relevant information on the monitoring programme and findings; and • A public summary report based on the full report and covering, as a minimum, a summary of key findings, non-compliances identified and concerns of stakeholders. Sanctions for nonconformance Where any review identifies serious failures in the implementation of the Partnership Agreement and these are not rectified within a mutually agreed timeframe, the Agreement can be suspended, with the result that the Partner Country will revert to non-partner status. Government-led standards for REDD and other forest carbon programs 7. The Convention on Trade in Endangered Species (CITES) Aspects Standard/ system information Ownership, The Convention on International Trade in Endangered Species (CITES) is Initiation and an international treaty. participation The treaty has now been ratified by everyone except Angola, Mauritania, Oman, Turkmenistan and North Korea. Objectives CITES works by subjecting international trade in selected species to certain controls. All import & export of species covered by the Convention has to be authorized through a licensing system. Species covered by the Convention are listed on one of three appendices according to the degree of control that needs to be exerted on their trade. Species listed on Appendix 1 are the most strictly controlled. This means: Any trade in the species must be licensed by both origin and destination authorities on the basis that: • Trade is not for commercial purposes • Trade is not detrimental to the survival of the species in the country of origin Sectors/ The convention is cross sectoral, but applies to any biological species commodities/ which is listed in the annexes of the convention. scope The convention applies to any listed species in its natural form e.g. live animals and plants, and to all products derived derived from them, including food products, exotic leather goods, wooden musical instruments, timber, tourist curios medicines etc. Types of criteria/ The decision to list a species is made by committee of based on the indicators – advice of national and regional experts. The species is listed according quantitative, to how much control should be placed on the trade in the species. qualitative, Once listed, the trade in the listed species can be monitored by the process management authority Assessment Decisions relating to the annexes are made by the conference of the methods parties (COP) at meetings held every 2-3 years. The designated management authority from each state participates on behalf of the country. Decisions to list or de-list species on the appendices are made by committee (there is an animal and a plant committee). Proposals to the committee are made by national authorities based on assessments made at the country level. Any Party can propose an amendment to an appendix. The text of the proposed amendment shall be communicated to the Secretariat at least 150 days before a COP meeting. The Secretariat then consults the other Government-led standards for REDD and other forest carbon programs Aspects Standard/ system information Parties and interested bodies on the proposed amendment. Amendments need to be adopted by a two-thirds majority of Parties present and voting. Parties abstaining from voting are not counted among the two-thirds required for adopting an amendment. Verification There is no provision for the verification of the activities of the systems designated management authority by the secretariat or other bodies. Any party can raise issues to the secretariat concerning the implementation of measures by a given management authority. The secretariat is obliged to follow up. (see sanctions, below) Accreditation, Trade is regulated at the national level by the designated management independence authority. In some cases the management authority, scientific authority and quality and the enforcement authority can be the same organisation. (e.g. USA, control of different divisions of the Fish and Wildlife Service) assessors Governance of the CITES is an international convention. standards The text of the Convention was agreed by representatives of 80 (participation and countries in Washington DC in 1973. There are now 175 signatory decision making) countries. States (countries) adhere voluntarily. States that have agreed to be bound by the Convention ('joined' CITES) are known as Parties. Although CITES is legally binding on the Parties – in other words they have to implement the Convention – it does not take the place of national laws. Rather it provides a framework to be respected by each Party, which has to adopt its own domestic legislation to ensure that CITES is implemented at the national level. Each Party to the Convention must designate a Management Authority in charge of administering that licensing system and a Scientific Authority to advise them on the effects of trade on the status of the species. Public reporting The management authority is obliged to report to the COP on implementation of the convention. Specifically: • An annual report containing a summary of numbers and types of permits issued and quantities of listed species traded • A biennial report on legislative, regulatory and administrative measures taken to enforce the provisions of the Convention The reports are available to the public from the secretariat. Sanctions for non-It is the Secretariat who has responsibility to pick up on issues relating conformance to the improper implementaiton of the convention. If the secretariat believes that any listed species is being affected adversely by trade, or that the provisions of the Convention are not Government-led standards for REDD and other forest carbon programs Aspects Standard/ system information being properly implemented, it shall communicate such information to the authorized Management Authority of the Party or Parties concerned. If a Party receives a communication it should carry out an inquiry. The information provided by the inquiry should then be reviewed by the next Conference of the Parties which “may make whatever recommendations it deems appropriate.” Government-led standards for REDD and other forest carbon programs