Many forest-based companies in developing countries like Indonesia have attacked forest certification as a market tool used by their competitors in the industrialized markets to fight against the comparative advantages tropical forests possess.
However, initial forest certification experiences in Indonesia and many other countries in Asia and Latin America have shown that independent assessment of forestry operations against predetermined standards has produced a wide range of economic, social and political benefits.
This is because certification involves the inspection of the activities of forest-based companies to verify that the land is being managed in accordance with social, environmental and economic aspects of forest management, as described in the predetermined standards.
First of all, certification will help ensure good forest management and this, in turn, will secure a sustained supply of timber, thereby minimizing the risk of investment in forest-based enterprises being wasted due to a shortage of wood supply.
Business-wise, too, certification helps improve the shareholder value of a forest-based company because good forest management will minimize the risk of lawsuits and civil liabilities arising from environmental damage, consequently decreasing insurance premiums.
Illegal logging will be discouraged because, within the certification process, the independent certifier will audit each step forest products pass through, from harvest, primary and secondary processing and manufacturing to distribution and sale.
This process, known as the chain of custody, is designed to assure consumers that the certified products they buy were made from wood originating in a certified forest area.
As the assessment process also involves dialog with local communities and other local stakeholders on how the forests should be managed, forest certification provides opportunities for civil society groups, which have traditionally been marginalized in the forest policy debate, to raise environmental and community issues for negotiation. This, in turn, can become a forum for resolving any land use conflicts.
As a forest certificate is valid only for a fixed period of time and is subject to periodic evaluation, certification also can serve as a supervisory and monitoring tool to ensure that good management is sustained.