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Sources: Next Rio Tinto boss to cut costs and make big deals.
Rio Tinto's next CEO, who may be named as early as this month by the company, should be open for mergers and acquisitions that are transformative, as well as for cost-cutting and productivity improvements. After announcing in May that Jakob Stausholm was stepping down after four and a half years, the world's largest iron ore mining company is now in the final stages of selecting a new CEO through an internal search and an external search. Two other sources familiarized with the search process said that the finalist for the top position will present their case to the board this week in London. A decision could be made as early as the end of July. The timing of board presentations and Chair Dominic Barton’s preference that the new CEO be open to large deals, as well as his preference for the CEO to have a positive attitude towards them, were not previously reported. According to a report in May, internal candidates include Bold Baatar (chief commercial officer) and Simon Trott (chief executive of the iron ore division). A fifth source said that Chief Technical Officer Mark Davies was also a possible candidate. All sources spoke under condition of anonymity, as the search is confidential. Rio, who is due to announce its half-year results July 30, has declined to comment. Barton Trott Baatar Pecresse Davies have not responded to requests for comments. Barton met with stakeholders after Stausholm announced his departure to discuss this abrupt change of guard. Two people who were privy to Barton's discussions about his priorities for a new CEO revealed that he had floated the idea of a "big ticket M&A", with another mining giant, if enough value could be found. According to a source with knowledge of the matter, Glencore approached Rio about a possible asset combination in 2013. However, talks ended abruptly due to Stausholm's pushback. Analysts have suggested that a tie up with Canada's Teck Resources might be more suitable. A new CEO must walk a thin line between cost discipline, and repositioning a miner to a dramatic shift to copper. Copper is expected to become in high demand because of the energy transition. The two people Barton briefed said that the company has acknowledged the fact that its internal costs are excessive, including staffing. It needs a CEO to better manage these costs. Financial results reveal that from 2020 to 2024 costs at Rio increased by 46.5% faster than BHP and Anglo American. This means a new boss must be disciplined in capital allocation. RBC Capital Markets estimates that Rio will spend $30 to $35 billion over the next decade on capital expenditures, including $8 to $9 billion for lithium projects following Stausholm's May acquisition of two new lithium projects in Chile. Kaan Peker, an analyst at RBC, said: "Jakob had previously stated that they were going to be aggressive on lithium. But I wouldn't surprise if some lithium growth projects get pushed back a little in favour of Copper." Peker believes that any M&A is unlikely to happen in the near future because the new CEO would have to boost the share price of the company to get the best bang for the buck if it decides to use its shares to compete with another major miner. CONSTRAINTS According to a source familiar with the process of CEO search, the company has been discussing an internal hire. Analysts and investors have said that all the top contenders face constraints when it comes to a board that is concerned about operational excellence and cutting costs in particular. They added that it was uncertain whether a hire from within would be able to adequately address cultural issues, such as safety in Guinea or sexual harassment in Australia. Trott was responsible for the final ramp up of the Gudai Darri mine, which led to the second highest iron ore shipment in history by 2023. He also brought in new replacement projects. He also handled sensitive Aboriginal heritage matters after Rio damaged rock-shelters at Juukan Gorge, in 2020. Since Trott assumed the role of Rio in 2021 Rio has continued as the most expensive major Australian iron ore producers, its ore has decreased and it is currently guiding production to be in the lower half its expected range this year because of cyclones. It's been four tough years. "The business showed a turnaround in 2023, but it was a difficult hand because of Juukan Gorge as well as the weather," said Barrenjoey Analyst Glyn Lawcock. Baatar's concern is his relationship with the government, as he previously worked three years at Rio Copper, including the Oyu Tolgoi mine, in his native Mongolia. Stausholm announced in 2022 a reset for Mongolia, including a $2.4 billion debt waiver. Rio announced last month that it was forced to alter its mine plan because the government had delayed the transfer of the mining licence. Pecresse, a candidate who has led the Aluminium division to a 61% rise in EBITDA in 2024, is favored by some members of the board, according o ne source familiar with the process. He was a former leader of GE's renewable energies division. His departure from GE saw a significant expansion in the global presence of this unit, which had struggled to be profitable. Davies has been responsible for driving productivity improvements which could help cost-cutting initiatives. He led the smaller titanium and iron and marine arms of the company, but not its major operational divisions like other candidates. Analysts said that there is only a small chance of Rio hiring an outsider. Reports have previously mentioned that Newmont CEO Tom Palmer, and former Oz Minerals Chief Andrew Cole, are potential candidates. Investors have said that Sandfire Resources' CEO Brendan Harris could also be a candidate. Harris didn't respond to a comment request.
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Dollar gains on US tariffs; shares steady and oil drops
The Asian stock markets took the latest twist of President Donald Trump’s tariff announcement on Tuesday in stride, while the dollar remained strong and oil fell. Wall Street shares fell after Trump sent a letter to 14 countries including Japan and South Korea revealing sharply increased tariffs on imported goods into the United States. He also delayed their implementation until August 1. Japan's Nikkei opened lower, but then turned positive when Trump said that the deadline was "firm but not 100% solid" and that tariffs could be adjusted for certain countries. The Aussie Dollar surged when the Reserve Bank of Australia held policy rates at their current level, as expected. Tapas Strickland is the head of market economy at National Australia Bank. He said that there was a muted reaction from the market to Trump's tariff announcements, as a result of Trump's swift reversal of his "Liberation Day", duties originally set out on 2 April. Strickland told a NAB podcast that "there's going be a lot volatility" as headlines begin to appear, more letters are released, and the negotiation process really comes to the forefront before the August 1 deadline. Trump set a 10% cap on all so-called reciprocal trade tariffs until the 9th of July to allow time for negotiations. Two agreements have been made, with Britain, and Vietnam. Washington and Beijing reached an agreement in June on a framework for tariff rates. This restored a fragile truce to their trade war. Tariffs for Japan and South Korea will now increase to 25% by August 1. The Japanese prime minister Shigeru Shiba described the increase as deeply regrettable, and stated that his country would continue to negotiate with the U.S. Thailand’s finance ministry Pichai Chunhavajira revealed his country was preparing a backup plan to deal the 36% tariff on its exports. EU sources informed on Monday that the European Union would not receive a letter outlining higher tariffs. After a "good conversation" between Trump and European Commission President Ursula von der Leyen, a spokesperson for the commission said that the EU is still hoping to reach a deal on trade by Wednesday. The broadest MSCI index of Asia-Pacific stocks outside Japan increased by 0.3%. Japan's Nikkei index rose 0.4% while South Korea's KOSPI increased 1.5%. After reaching a new two-week high, the dollar gained 0.1% at 145.88yen. The euro increased by 0.3% to $1.1744. The Australian dollar increased by 0.8% to $0.6541. The RBA kept its cash rate at 3.85%. This was a surprise to markets who had confidently priced a reduction. They said that the majority of board members wanted to wait until more information could be confirmed to confirm the inflation slowdown. U.S. crude oil fell 0.5% to $66.71 a barrel, after surging almost 2% on Sunday. Spot gold fell 0.2%. Euro Stoxx futures in the pan-region were down by 0.2%. German DAX was also down by 0.2%. FTSE futures fell 0.4%. (Reporting and editing by Jacqueline Wong, Sonali Paul and Rocky Swift)
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Australia's central Bank keeps rates at 3.85% and stuns the markets
The central bank of Australia left its cash rate unchanged at 3.85% on Tuesday, shocking markets that had confidently bet on a reduction. It said the majority wanted to wait until more information was available to confirm the inflation slowdown. The Australian dollar rose 0.8% to $0.6545 while the three-year bond contract extended previous losses by falling 13 ticks to 96.5. The Reserve Bank of Australia, which concluded a two-day meeting on policy, said that it was cautious about the outlook for inflation. Six members voted in favor of keeping rates the same, while three others voted against. This is a rare split vote by the board. The markets had almost fully priced in an easing of the RBA to 3.60%, given that core inflation has slowed down to the midpoint of its 2%-3% target range. Consumer spending is also proving to be weaker than anticipated. The board stated that they could wait until more information was available to confirm the inflation rate is still on track to achieve 2,5% on a sustainable base. It noted that the monetary policy was well placed to respond to international developments, if they had material implications for Australian activity and inflation. On Monday, Donald Trump escalated his global trade war by telling trading partners such as Japan and South Korea higher U.S. duties would begin on August 1. However, there were opportunities for further negotiations. The RBA reduced interest rates twice in February and once in May. However, the cuts did not have much of an impact on consumer spending despite driving housing prices to new records. A stubbornly frugal customer is the reason why the economy barely grew during the first quarter. Retail sales data suggest that households are saving instead of spending tax cuts. In May, the closely watched trimmed average measure of inflation hit 2.4%. This was a three-and-a half year low. It also fell below the target range of 2-3%. Many economists shifted their call for a rate cut to July, from August. However, the labour market remained resilient. This is why it's not a good idea for RBA to rush into stimulatory policies. Since over a year, the unemployment rate has been at 4,1%. (Reporting and editing by Shri Navaratnam.
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Oil prices ease as traders evaluate US tariffs and OPEC+ production hike
Investors retreated from oil prices on Tuesday, after a nearly 2% rise in the previous session. They were assessing new developments regarding U.S. Tariffs and a larger-than-expected OPEC+ production increase for August. Brent crude futures fell 22 cents or 0.3% to $69.36 per barrel at 0330 GMT. U.S. West Texas Intermediate Crude fell 27 cents or 0.4% to $67.66 per barrel. U.S. president Donald Trump began Monday telling U.S. trade partners, including major suppliers South Korea, Japan, as well as smaller U.S. Exporters such as Serbia, Thailand, and Tunisia that the U.S. will begin imposing sharply higher tariffs on August 1. He later clarified that this deadline is not 100% certain. Trump's tariffs have caused uncertainty on the market, and there are concerns that they could negatively impact the global economy, and therefore, oil demand. There are signs that demand is still strong, especially in the U.S. Last week, AAA data showed that a record number of Americans (72,2 million) were expected to travel over 50 miles (80 kilometers) during their Fourth of July holidays. The U.S. Commodity Futures Trading Commission published data on Monday that showed money managers increased their net-long positions in futures and options contracts for crude oil in the week leading up to July 1. Seasonal factors continue to support a healthy prompt demand. It remains to be seen if the forward demand can continue to absorb OPEC+'s larger than expected supply. India, the third largest oil consumer in the world, also showed signs of increased demand. government data Reporting fuel consumption was 1.9% more than it was a year earlier in June. On Saturday, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed to increase production by 548,000 barrels a day in August. This is a higher rate than the 411,000 bpd they increased for the previous three months. This decision eliminates almost all the voluntary reductions of 2.2 million bpd that the group made. Five sources with knowledge of the situation say that they are likely to approve a 550,000-bpd increase for September at their meeting on August 3. This would undo all the cuts. Analysts said that the actual increase in production has been less than what was announced and the majority of the supply comes from Saudi Arabia. (Reporting from Stephanie Kelly in New York, and Jeslyne Lerh in Singapore. Editing by Christian Schmollinger).
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Exxon, Hess Dispute Over Chevron Deal Nears Resolution
The arbitrators in a legal dispute between Exxon Mobil and Hess have reached a decision related to a major oilfield project in Guyana, according to two sources familiar with the matter.The ruling will determine whether Chevron can move forward with its $53 billion planned acquisition of Hess.The Paris-based International Chamber of Commerce, which is overseeing the arbitration case, is now reviewing the decision before it is released to the parties.It is unclear what the arbitrators decided or when the decision will be released."We remain confident in our position and appreciate the arbitration panel giving this issue the due consideration it deserves," an Exxon spokesperson said in a statement.Hess, Chevron and the ICC did not immediately respond to requests for comment.Chevron struck its deal to acquire smaller U.S. oil producer Hess in October 2023, with the prize being the latter's 30% stake in the prolific Stabroek block in Guyana that is operated by Exxon with a 45% interest.The closing of the acquisition has been delayed due to arbitration claims from Exxon and CNOOC, the other minority partner in the joint venture, who argue that they have a contractual right of first refusal to purchase Hess' stake in the Stabroek block. CNOOC did not immediately respond to request for comment.Chevron and Hess argue the clause does not apply to the sale of the whole company. If they lose the arbitration or are unable to agree on an acceptable resolution with Exxon and CNOOC, the acquisition would fail, according to the terms of the deal.The stakes are high for Chevron. Acquiring Hess is key to Chevron CEO Mike Wirth's strategy to improve the company's performance. Gaining access to the Stabroek block would provide a valuable addition to Chevron's declining oil and gas reserves.(Reuters - Reporting by Sheila Dang in Houston; Editing by Sandra Maler and Sonali Paul)
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Rotra Futura RoRo Vessel Enters Offshore Wind Operations
The Rotra Futura Roll-on/Roll-off (RoRo) vessel has entered operations, with the transportation of wind turbine blades from Denmark to the United States.The project supply vessel, specifically designed to handle larger and heavier offshore wind turbine components, collected the 108-meter-long blades at the Port of Aalborg, Denmark, under the supervision of deugro Denmark’s wind experts.The vessel, delivered in late March 2025, was developed as part of the the partnership between Danish logistics specialist deugro, Siemens Gamesa Renewable Energy and Amasus Offshore.“We are delighted to officially welcome Rotra Futura to our fleet of RoRo vessels dedicated to servicing the offshore wind industry.“After years of preparation and hard work, it brings great joy to finally see her in action.“Witnessing the first loading operation executed so smoothly and precisely – just as we had planned for – is a proud moment for our entire team. Rotra Futura has performed to our full expectations, reaffirming her vital role in supporting the logistics needs of the offshore wind market,” said Dennis Bjørslev Jensen, Branch Manager, deugro Denmark.Rotra Futura's sister ship Rotra Horizon was launched in Apirl 2025, from Zhenjiang Shipyards in Jiangsu Province, China, and is salted for delivery this July.Pair of China-Built Offshore Wind Vessels Enter Fleet
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Gold prices hold steady as investors evaluate US tariff hike
Gold prices held steady after U.S. president Donald Trump announced higher tariffs for imports from Japan and South Korea. A firmer dollar and higher Treasury yields also limited gains. As of 0220 GMT, spot gold was unchanged at $3,334 an ounce. U.S. Gold Futures are unchanged at $3.344.20. Trump told trade partners on Monday that the U.S. would begin imposing tariffs of 25% on all goods imported from Japan and South Korea on August 1. This marks a new phase in his trade war, which he began earlier this year. Trump stated that the deadline of August 1, 2018 for the implementation of tariffs is firm, but he will consider extensions if other countries make proposals. The "reciprocal tariffs", which were set at 10%, remained in place until the 9th of July to allow time for negotiations. However, only agreements have been reached with Britain and Vietnam. Tim Waterer, KCM Trade's Chief Market Analyst, said that Trump's latest tariffs letters keep gold on the radar of investors looking for a hedge against uncertainty. However, a strong dollar and rising bond yields limit the metal's upside potential in the short term. The yield on the benchmark 10-year U.S. notes hovered around a two week high while the U.S. Dollar Index steadied, after hitting a one-week-high in the previous session. Gold's price increases when the dollar is stronger. Waterer stated that "traders appear relatively unfazed" by Trump's tariffs letters. With safe-haven demands largely contained, gold is just waiting to see if a breakout on the topside occurs. Trump's tariffs have increased inflation fears and complicated the Federal Reserve's efforts to reduce interest rates. The minutes of the Fed meeting from June, which are expected to be released on Wednesday, will provide more information about the central bank's outlook. The spot price of silver fell 0.1%, to $36.78 an ounce. Platinum rose 0.6%, to $1379.29, and palladium grew 1%, to $1170.46. (Reporting and editing by Sumana Nady and Subhranshu Sahu in Bengaluru.
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Iron ore prices rise despite Trump's tariff threats
Iron ore prices rose on Tuesday due to a resilient short-term demand from China, the world's largest consumer. However, caution caused by President Donald Trump’s threat of increased tariffs limited gains. As of 0244 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange added 0.14%. It now stands at 733 yuan per metric ton. As of 0234 GMT, the benchmark August iron ore traded on Singapore Exchange was up 0.55% at $95.75 per ton. The near-term demand for iron ore was stable, as shown by the relatively high output of hot metal, which is a measure of iron ore consumption, and underpins the prices of this key ingredient in steelmaking. The fall in portside iron ore inventories, which fell 0.4% compared to the previous week and reached 144.04 millions tons by July 7, according to data from Mysteel consultancy. The resumption of trade tensions around the world has limited price gains. Trump began Monday telling his trade partners, from major suppliers like Japan and South Korea down to minor ones, that the U.S. will be imposing sharply higher tariffs on August 1. This marks a new phase of the trade war Trump launched earlier this summer. Coking coal and coke were both up by 0.54%, but other steelmaking ingredients did not change much. The benchmarks for steel on the Shanghai Futures Exchange have been moving sideways. Rebar fell 0.13%, while hot-rolled coils were down 0.06%. Wire rod remained flat, and stainless steel was up 0.63%. The (steel market) focus has returned to the seasonally weak fundamentals, after the frenzy over promises of crackdowns on price wars receded," Zhuo Guqiu said. Analyst at Jinrui Futures. The downside is likely to be limited, as supply and demand are not in conflict at the moment. (Reporting and editing by Amy Lv, Lewis Jackson, and Rashmi aich).
UNIQUE REPORT-' Sustainable' logging operations are clear-cutting Canada's climate-fighting forests
With its vast areas of forest, Canada has the most licensed sustainable timber operations of any nation, according to the not-for-profit companies that attest to the ecological stability of logging practices.
Such forestry-standards groups were born in the 1990s out of rage over tropical jungle damage. Today, they put their leafy seals of approval on toilet paper, two-by-fours and other wood and paper items to ensure eco-conscious customers and investors they were properly produced.
Yet research shows Canadian forests have actually seen a few of the world's biggest decreases in environmentally critical main and old-growth forests over the last 20 years, even as sustainability-certification programs grew to include almost all of Canada's logging.
To track damage of older forests in these accredited zones, Reuters evaluated forestry data in Ontario, a major logging province. The analysis found that about 30% of the licensed boreal forests harvested from 2016 to 2020 were at least 100 years of ages. That resulted in the loss of 377 square miles of these older forests, an area the size of New york city City and Washington D.C. integrated, the analysis found.
Canada's forests-- accounting for 9% of the world's total--. are considered important to including international warming. Ecological advocates have actually long pressed to end visiting. main or old-growth forests, which soak up far more. climate-damaging carbon than logged-and-replanted locations. Main. forests are those that reveal no sign of previous harvesting. They. can consist of old-growth areas-- some with trees hundreds or. thousands of years old-- however also fairly newer forests. that, for example, might have regrown after wildfires.
Forest-certification nonprofits have chosen to enable logging. of older forests through a host of concessions to industry. The. harvesting of such areas in Ontario came in spite of the reality that. 94% of the province's managed forests are certified by one of. the 2 dominant environmental-certification organizations in. Canada, the analysis found. Reuters analyzed satellite-derived. logging information, government forest-age quotes and. forest-certification maps to approximate the harvest of forests at. least 100 years of ages in Ontario's licensed zones.
Why the heck are they enabling logging-- licensed logging. -- in main forests that are over 100 years old? asked. Dominick DellaSala, a conservation biologist with ecological. group Wild Heritage who studies Canadian logging impacts. For. Canada to claim that it's doing sustainable management, it's. absurd. To put a certification seal of approval on it is more. disconcerting.
The quick loss of older Canadian forests highlights the. flaws of certification programs that have actually come under heavy. influence of the logging and forest-products industries, a. Reuters examination has discovered. The damage has come under the. watch of the Forest Stewardship Council (FSC), the world's very first. such certification organization, founded in 1993 with. ecologist support; and the Sustainable Forestry. Effort (SFI), a competing established by a timber and. forest-products trade group the list below year.
This account is based upon the Reuters analysis of Ontario. forests, a review of numerous pages of FSC and SFI audits,. in addition to policy and method files, and interviews with 20. present or former FSC staff members or members and more than a. half-dozen researchers who study the environmental impacts of. Canadian logging.
In a declaration, FSC stated it has not fluctuated from its. original dedication to responsible forest management which. its certification requirements are robust and trustworthy. SFI said. its requirements are strong and constantly improving and that. its certification has actually ended up being a extremely relied on solution to the. growing demand for products from sustainably managed forests.
Neither company commented on the Reuters analysis or on. whether they thought about gathering large areas of century-old. forests to be sustainable.
The FSC and SFI accredit logging business' practices in. particular forests and examine consumer-product supply chains. Their seals of approval-- a leaf insignia for SFI, and a tree. with a checkmark for the FSC-- have actually ended up being essential to wood. and forest-products companies amidst rising pressure for ecological. stewardship.
But these business hold immense take advantage of over the big. forest-certification nonprofits, which depend heavily on the. market for funding through certification charges, Reuters found. And because its creation, the FSC has watered down its forestry. standards in action to the competitive threat posed by SFI and. other industry-friendly certifiers, according to. ecologists and more than a lots existing and previous FSC. staffers and members, who recommend the company on policy and. strategy.
Companies are totally free to choose which certifier to utilize,. permitting them to prevent those with stricter standards and providing. them influence to lobby all certifiers for permissive policies, stated. the FSC staffers and members.
Extensive accreditation of British Columbia lumber. operations over the previous two decades hasn't stopped the. disappearance of more than half of the province's old-growth. woodlands over that duration. Logging caused the large majority of. the decreases in the most significant old-growth trees storing one of the most. carbon, according to one 2021 study in the Canadian Journal of. Forest Research and another last year in the journal Frontiers. in Forests and Global Modification. Studies in 2009 and 2017 analyzed. areas of Quebec forests and discovered areas of forests. controlled by trees more than a century old had diminished to. in between 13% and 28% of the forest amid heavy logging. Without. logging, these older areas would account for in between 40% and. 68% of these forests, the scientists estimated.
Herb Hammond, an experienced forest ecologist, ran a British. Columbia not-for-profit company that carried out a few of Canada's. initially FSC audits in the late 1990s. He later on left the. organization, annoyed with what he described as too many. compromises with industry.
It's easy to pull the wool over people's eyes about what is. great forestry, he stated. Certification has ended up being a. little a pet's breakfast. It does not really suggest anything.
A 'CHESS RELOCATION'
Forestry certification has become common in the global. forest-products trade, assisting business such as Procter && . Gamble, Starbucks and Penguin Random Home appeal to. eco-conscious consumers and investors. Those three companies. decreased to comment.
The certifying trend began in the 1990s when environmental. organizations including Greenpeace, Buddies of the Earth and the. World Wildlife Fund helped release the FSC after stopping working to. safe forest-conservation promises from federal governments worldwide. They wished to incentivize business instead with a market-driven. system that branded items as sustainable, stimulating demand. from critical buyers. The FSC was established in 1993 with a. membership of organization, environmental and community. agents.
Still, lots of companies were wary of aligning with. environmentalists. The following year, the American Forest &&. Paper Association, a trade-group, started the SFI as an. industry-friendly alternative. The trade association said its. discussions about sustainable forestry began previously, in 1990,. and consisted of input from academics and preservation groups.
Competitors from the industry-backed SFI required the FSC to. reckon with how to preserve rigorous forestry standards while. hiring companies to certify, 10 present and former FSC. members stated. A 2002 FSC management report highlighted the need. to quickly increase the supply of qualified wood or run the risk of. losing out to an ever-increasing number of completing. accreditation schemes.
The FSC introduced an internal push to improve its market share. that led to compromises with market and weaker harvesting. limitations, according to FSC documents and the FSC members.
Compromising FSC requirements didn't stop the SFI's development,. nevertheless. The FSC accredited about 46 million hectares of Canadian. forests at the end of 2023, less than half the SFI's 119 million. hectares, according to the Forest Products Association of. Canada, a market group. Worldwide, the FSC accredits 160. million hectares compared to 295 million hectares by the. Programme for the Recommendation of Forest Accreditation (PEFC). The PEFC is a global company that oversees the SFI, which. covers The United States and Canada, and affiliated certifiers in other. areas.
Both the FSC and the SFI largely make it through on industry-paid. charges. FSC International reported in 2022 that such fees. accounted for 86% of its $58 million in annual earnings. The SFI. derived 77% of its $12 million in profits from such fees,. according to its 2022 tax return.
Some ecological groups and supporters, while acknowledging. the FSC's drawbacks, continue to view the organization as the. best option amongst imperfect alternatives. Jen Skene, a policy. director at the Natural Resources Defense Council, said FSC. certification represents a minimum standard.
FSC is the most reputable certification system out there,. she said, while adding that it must be deemed a floor, not. a ceiling for sustainability standards.
FSC told Reuters it had actually not damaged requirements in action. to SFI competition. Instead, FSC said, the competition has prompted. it to improve and fine-tune its certification process to make sure. it stays the gold requirement for responsible forestry.
SFI said competition among certifiers does not exert a. down pressure on requirements but rather promotes continuous. improvement. The PEFC stated it allows regional groups including. the SFI to develop their own standards, which the PEFC said. adds to long-lasting commitment to sustainable forest. management practices.
Though some corporations prefer FSC-certified wood, few. clients understand the difference among accrediting groups and their. labels.
Peter Wood, a forestry speaker at the University of British. Columbia who has served on FSC-rulemaking committees, called the. SFI's creation a chess move.
The industry wished to take the power far from FSC, and it. worked, he stated. Now, everything is certified.
RACE TO THE BOTTOM
FSC's early standards highlighted the need to safeguard main. and old-growth forests. One pivotal provision read: Main. forests ... will be conserved. Such areas shall not be replaced. by tree plantations or other land usages.
However business grumbled the policy was too limiting and. difficult to enforce, said Grant Rosoman, a Greenpeace forests. advisor and former FSC International board member.
FSC members spent years disputing policy changes and in 1999. eliminated requirements to save primary forests. Rather, the. FSC adopted a more subjective requirement to safeguard forests. with high preservation value, based upon an intricate matrix of. ecological, financial and cultural qualities.
That unclear language, still in effect, gives business broad. impact over which forests get approved for protection. It has likewise. spawned a market of specialists-- hired and paid by. forest-products companies-- to perform studies determining which. forests have high conservation value, according to FSC audits. and six current and former FSC members.
Rosoman of Greenpeace was among the FSC's members who. approved the language at the time. He now regrets it, believing. its subjectivity allowed damage of critical forests. The. continued logging of main forests and old-growth forests was. never ever dealt with, he stated.
FSC acknowledged that its rules enable accredited logging in. such areas but said the high conservation worth designation aims. to ensure such harvesting is performed with the greatest level. of analysis and duty.
In another significant concession, FSC in 2004 presented the FSC. Mix system, which created a brand-new label for products including. up to 30% wood from non-certified sources.
The relocation came after pressure from pulp-and-paper companies. consisting of Klabin of Brazil, SCA of Sweden and Mondi of South. Africa, along with book publishers and furniture makers,. stated Rosoman, who took part in the negotiations.
Mondi did not comment. SCA said it might not address its. role at the time due to the fact that the business has actually since been divided into. 2 firms. Klabin did not address concerns on whether the. business affected the FSC Mix guidelines. However it said the label. alleviated the logistical concern of separating wood from certified. and non-certified sources, a view echoed by SCA.
FSC Mix has given that become the certification group's dominant. label, accounting for more than three-fourths of the FSC-product. trade, according to a 2017 FSC paper. The paper added that FSC. Mix was the main source of income for the operating costs of. FSC.
The FSC informed Reuters it does not know what portion of. FSC-certified items use the Mix label today. The label, it. said, helps business shift to more sustainable. practices.
FSC Mix guidelines provide companies wide latitude to use the label. Some consumer-products companies are enabled to put the Mix label on. products that contain no FSC-certified material at all because. the FSC gives them credit for certified content in other. items they offer.
The SFI likewise offers a label-- SFI Licensed Sourcing--. that makes no assurances that items contain any wood from. licensed forests, so long as business meet certain other. conditions.
Phil Guillery, a previous FSC United States board member and. supply chain stability director, stated permitting uncertified wood. into the FSC system brought a lot more timber and forest-products. companies into the organization and gave them more influence.
They understood and learned about the politics of FSC, and. they became extremely effective, he said.
Wood, the University of British Columbia lecturer, served on. 2 FSC groups that starting in 2011 attempted to revamp what. internal critics had actually called a weak system of company. self-assessments to guarantee their FSC Mix products did not. contain wood from undesirable sources, such as unlawfully. gathered forests. The guidelines modifications took eight years in a. procedure that was greatly affected by market, he said.
The FSC informed Reuters the procedure resulted in a considerable. reinforcing of rules governing non-certified wood. Wood had a. various take, stating the limitless deliberations did little to. screen out problematic sources of timber. He called his. involvement a horrible experience.
I just wished to turn away from the whole project, he. stated, and alert people: 'Don't trust it.'
QUALIFIED FOREST DESTRUCTION
Environmentalists slam the FSC but normally take a. harsher view of the SFI, mentioning its founding by a market. group and weaker forestry requirements.
The SFI disagreements that it serves just industry interests,. informing Reuters its standards show input from a varied group. of collaborators including ecologists on its board.
Environmental groups consisting of the Sierra Club, Stand.earth. and the Natural Resources Defense Council state the impact of the. SFI's industry-friendly method is clear in British Columbia,. where the organization has actually dominated accreditation.
The province, a showcase of Canada's raw beauty and diverse. ecosystems, has seen old-growth forests decrease by more than 50%. over the last twenty years, according to the 2021 and 2023. studies. A subset of highly productive old-growth woodlands--. forests with the largest trees saving the most carbon, and also. the most attractive to logging companies-- has declined by an. approximated 85%.
The SFI became the certifier of choice in British Columbia. largely due to the fact that market viewed the FSC's early guidelines as too. burdensome, said Karen Tam Wu, an FSC specialist during the 2000s.
The wood market and Canada's government share in the. logging wealth. Canada's forests are normally on public land,. which implies provincial federal governments get a cut of the profits from. every dropped tree. In British Columbia, that amounted to more than. $ 7.3 billion over the decade ending in March of this year,. according to the province's forest ministry.
British Columbia in 2020 revealed a strategy to protect its. decreasing old-growth forests after years of public pressure. A. year later on, authorities launched maps revealing at-risk areas where. it required a deferral of logging. But the federal government never ever. barred visiting those zones, instead leaving it to industry. discretion.
Some significant companies picked instead to continue harvesting,. including Vancouver-based Canfor Corp, an international timber-and-pulp. manufacturer.
Canfor in 2022 whacked about 3,700 acres of old-growth. forest the federal government had recommended for deferral of logging,. according to satellite images analysis from Stand.earth. The. provincial federal government stated previously this year that more than. 50,000 acres of old-growth forest had been gathered in areas it. sought to protect.
BC's Ministry of Forests stated it is not seeking to end all. old-growth logging which harvesting in some areas is. possible and essential to support regional, sustainable tasks. while safeguarding forests.
SFI certified Canfor's large western Canada operations in. 2019, 2021, 2022 and again last year. None of the openly. launched audit summaries ever discussed the cutting of. old-growth forests. Significant auditing firm KPMG, which conducted. the evaluations, had no remark.
Nothing in SFI's standards would have avoided logging of. old-growth forests.
SFI said old-growth-forest harvesting in British Columbia is. contentious, including settlements among governments,. industry and indigenous communities. It said its standards. require compliance with all appropriate laws.
Canfor stated it is dealing with native groups,. neighborhoods and government to review old-growth management and. look for input into our proposed harvesting.
' LIKE PRINTING CASH'
Logging companies' capability to select their own watchdogs. poses the biggest barrier to promoting high sustainability. standards, environmental advocates said.
The auditing structure all but assurances logging business. can get certified, said Simon Counsell, who was an FSC starting. member while with the not-for-profit group Pals of the Earth. He's. now an FSC critic.
There's a clear, vested financial interest for the. auditor, since giving FSC accreditations leads to more. auditing opportunities, Counsell said. It's like printing. cash.
The FSC stated it prevents conflicts of interest by outsourcing. evaluations and accreditation to independent auditors who take a look at. business' forestry practices and are paid by the firms being. accredited. The companies, it said, pay a separate yearly. administration charge based upon their forest-products profits that. goes to the FSC after being collected by the auditor.
In one example of industry impact over sustainability. audits, a significant Canadian wood company, Resolute Forest. Products, defeated an effort in 2014 to remove its FSC. certification in a western Ontario forest by taking legal action against and. eventually shooting its auditor.
Resolute for many years dealt with charges from researchers and. environmentalists that its clear-cuts in the FSC-certified Black. Spruce Forest had actually decimated environment for threatened forest. caribou. As early as 2012, auditors at the Rain forest Alliance,. a nonprofit employed by Resolute, found the lumber company failed. to fulfill FSC habitat-protection requirements. Another 2013. Jungle Alliance audit took a look at grievances from ecological. groups that Resolute's logging will lead to the extirpation of. caribou from the Black Spruce Forest.
Auditors suspended Resolute's accreditation in January 2014,. mentioning a failure to satisfy FSC forest-protection requirements. In. May 2014, Resolute sued the Rain forest Alliance and its. auditors, personally, calling their reviews flawed and biased. The company sought $400,000 in damages. It likewise asked for an. injunction obstructing the audit's public release, which an Ontario. court gave. The suit noted that accreditation was. important to Resolute's service design.
The suit was settled in 2015, with the alliance concurring. to designate brand-new auditors to renovate Resolute's unfavorable evaluation. The. follow-up audit discovered Resolute satisfied FSC requirements and had. dealt with the problems from the earlier audit.
Chris Wedeles, one of the original auditors Resolute sued,. said he was disappointed that the new auditors examined the. very same evidence and pertained to a different conclusion.
The Rainforest Alliance renewed Resolute's certification. Undaunted dumped the alliance anyway, moving its auditing. business in 2016 to SAI Global, which has re-certified the. business every year because.
After the settlement, Resolute's then-CEO Richard Garneau. told FSC's global director general in a 2015 letter that. the firm would take out of FSC unless the certifier dealt with. the business's grievances about burdensome FSC requirements. A. leading Undaunted executive was chosen to FSC Canada's board in 2021. and continues to serve today.
Resolute did not respond to questions about its forestry. practices or its claim but said it supports the highest. standards in forestry management.
SAI Global, Garneau and the Rainforest Alliance, which no. longer carries out FSC forestry audits, declined to comment.
The FSC stated it was not associated with the conflict in between. Resolute and its auditor which it wasn't affected to change. its standards by Garneau's 2015 letter. FSC indicated current. suspensions of certifications in Quebec as evidence of its. dedication to protect caribou.
Meanwhile, problems with caribou in the Black Spruce Forest. continue.
In 2020 and 2021, SAI Global auditors found that Resolute. might not corroborate the effectiveness of its. caribou-conservation plan. The auditors dealt with the matter,. however, after an Undaunted specialist argued that logging would. decrease to a level that could sustain caribou populations--. though not until 2039.
BULLDOZING FORESTS FOR OIL
One of the world's largest stretches of certified forests is. in northern Alberta, where the FSC has actually accepted the logging. practices of Alberta-Pacific Forest Industries Inc.
. Over the last twenty years, about 878,000 acres of these. woodlands, a location more than twice the size of Los Angeles, have. been set aside to make way for oil companies to operate open-pit. mines, drilling websites and pipelines in Canada's oil sands. The. oil exploration involves clear-cutting and bulldozing the. forest. Some ecologists consider it one of the world's. most devastating industrial tasks.
Alberta-Pacific Forest Industries holds logging rights to. the forest, that includes old-growth forests, according to. company disclosures and ecological research studies. A clause in the. business's contract with Alberta permits regulators to designate. chunks of the woods for oil-and-gas development.
When that happens, the FSC allows Alberta-Pacific to do a. carve-out: eliminating the FSC certification from the land significant. for oil advancement, while keeping accreditation for the. surrounding forest. The plan has actually enabled Alberta-Pacific. to maintain accreditation in the area since 2005 despite the. oil-related damage.
FSC said it motivates qualified firms to participate in. dialogue and utilize their impact to impact land-use decisions. such as oil-and-gas advancement. But the company said such. choices are outside of FSC's direct accreditation scope and. are governed by provincial and national laws.
Alberta-Pacific said it is proud to have actually been FSC-certified. considering that 2005 which it has a goal of maintaining biodiversity. and other forest values. It said FSC's policies allow. carve-outs for oil development because the resulting. ecological effects are beyond the full control of. Alberta-Pacific.
Alberta-Pacific earns money from the oil development: Under. a contract with Alberta, it receives settlement from. oil-and-gas firms for the ruined forests. It can likewise offer. wood from forests cleared for oil mining under the FSC Mix. label, FSC audits program.
Some of the oil is extracted through surface area mining, a. procedure that needs the forest to be bulldozed and removed of. vegetation and soil to make way for pits that can be numerous. feet deep.
The mining is completely unsustainable, said Barry Robinson,. an Alberta ecological attorney who has specialized in. oil-and-gas problems. It will be generations before it ever grows. trees once again.
(source: Reuters)