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Including smallholders through certification, a Programme with IKEA in Viet Nam

Being among the world's largest exporters of wooden furniture and parts, Viet Nam supplies many international buyers including IKEA. However, with a limited supply of certified sustainable wood within the country, many manufacturers are now importing wood from abroad to satisfy the increasing demand for certified products. In response, the Vietnamese government is taking action to increase its internal production of certified wood and the country national forest strategy aims to certify 30 per cent of the country’s 4.48 million hectares of production forests by 2020.

WWF’s Living Forests report predicts that globally by 2050 we will be using nearly three times as much wood as we are now. This puts pressure on forests but it could also represent an opportunity to include smallholders in international supply chains.

Protecting, restoring and promoting sustainable use of forests is one of the 17 Sustainable Development Goals, and governments worldwide have committed to promoting sustainable management of all types of forests, halting deforestation, restoring degraded forests and substantially increasing afforestation and reforestation globally (SDG 15.2).

IKEA is one of the world’s largest consumers of wood products and recognizes its own contribution to deforestation. The company has proactively sought to increase its supply of wood without destroying or degrading forests. According to their People and Planet Positive strategy, the furniture giant has backed up its commitment with two target indicators; buying at least 50 per cent of its wood from sustainable sources by 2017 and 100 per cent by 2020.

In Viet Nam, smallholders manage the vast majority of Viet Nam’s of plantation forests. Certification costs can be prohibitive and inadvertently pushes smallholders out of international supply chains. This is why IKEA is partnering with smallholders to increase access to certification worldwide. A part from promoting equitable access to international markets, IKEA uses credible forest certification schemes as a way to monitor the social and economic well-being of forest workers and communities, thus reducing risks and improving its reputation in the hosting countries.

IKEA has supported a group of smallholders in central Vietnam to sustainably manage their forest plantations and empower forest-reliant communities through certification. Some key aspects of the programme are:

• Improved forest management practices: extending acacia tree rotation from 4-5 years to 9-11 years, which results in better-quality timber for furniture manufacturing. Native species are planted alongside the acacias, particularly in buffer zones around rivers, streams and lakes, which supports biodiversity and natural ecological cycles. Controls are in place around both planting and harvesting – such as limiting clear-cutting and avoiding burning vegetation.
• Enhanced access to certification: supporting the organization of groups and cooperatives to provide technical support to access and gain Forest Stewardship Council (FSC) certification. The Association of Quang Tri Smallholder Forest Certification Groups, for example, received a new five-year certificate for 2015-20, covering a total of 1,393 hectares of acacia plantations belonging to 517 smallholders.
• Access to international market: farmers sell directly to local furniture manufacturers that supply IKEA, rather than paying intermediaries to trade on their behalf.

Impact:

• Growing certified wood supply. IKEA has increased the availability and supply of certified trees in Viet Nam and support further growth over the coming years. The certification process allows IKEA to trace timber and other forest products through supply chains. The FSC label enables and encourages businesses and consumers alike to purchase timber and forest products produced in a legal, sustainable and socially responsible way.
• Increased income for farmers. Apart from the economic benefits of better prices for their FSC-certified timber, the group certification model reduces the financial and administrative burden of obtaining certification for smallholders. In addition, farmers have the option to sell directly to factories rather than through traders, which further boosts their income and secures access to international markets.
• Farmers’ empowerment. By implementing responsible forestry practices, farmers are more aware of the social and environmental impacts of forest functions and ecosystem services. This enables them to conduct forestry businesses in a sustainable way.
• Regenerative forest use management and risk reduction: Better forest practices help to improve soil quality and prevent erosion.
• Multiplier effect. IKEA’s local suppliers, such as Scansia Pacific Company, also sources from two larger Vietnamese plantation companies, which have also just achieved FSC certification.

Partnerships: 
Over the years, IKEA has collaborated with several institutions to research, review, and support the implementation of sustainable forestry practices.

• WWF has provided ongoing training and support to help smallholders improve their forest management practices and to strengthen their business models. In return, IKEA has provided financial support to the programme as part of its commitment to increasing the supply of FSC-certified timber in key producer countries.
• The partnership with the Food and Agriculture Organization of the UN (FAO) aims to identify and evaluate options for and barriers to sustainable forest management certification while empowering forest-dependent communities.

Future plans: 
Local government and farmers in two other central Viet Nam provinces are keen to follow this model and to pursue FSC certification. WWF is in discussions with FAO on how to support this. A planned IKEA-FAO study will look into options and barriers to effective forest certification in northern Viet Nam, including:

• Assessing local legal and regulatory frameworks and the quality of local forest resource assessments
• Locating communities and producer organizations that could potentially benefit from participating in a certification scheme and access to IKEA’s supply chain
• Identifying barriers to the certification process and issues which have been or are currently hindering it

The study will also assess the potential to scale activities and replicate them on a larger scale elsewhere.

Quotes:
“For a poor farmer, of course the economic benefit is always the first priority. However, after a few years participating in the project with several training programmes, villagers realized there were other important social and environmental impacts. Now, with improved knowledge and skills, farmers understand how to do their forestry business in a sustainable way. Livelihoods are improved and enhanced, and people feel more responsible for the living environment around them.”  Le Bien Hoa, smallholder farmer beneficiary of the programme since 2010.

"IKEA has committed to source responsibly and contribute to the sustainability of forest management. A very important wood supply comes from smallholders around the world. The partnership with FAO is not only about how the forests are managed in Viet Nam, but about improving the everyday life of people in the countryside." Anders Hildeman, Global Forestry Manager for IKEA of Sweden

CSR Asia has been working with Oxfam to create materials and toolkits for implementation of CSR Standards and Guidelines and inclusive value chains with an emphasis on engaging women and men smallholders in innovative ways. We will shortly be launching a research paper on Making the case for smallholder inclusion: A collection of ten case studies identifying the business case and business drivers for large agricultural private sector actors to adopt a responsible and inclusive approach towards both women and men smallholder producers. It will cover various agribusiness value chains include the likes of Jollibee, StoraEnso, Univanich, and Unifrutti. 

Source : CSR Asia