Forest Certification Critical for our Highly-Valued Mahogany: A-G and Economy Minister
“The launch of Fiji Hardwood Corporation Ltd (FHCL)’s Forest Certification Gap Analysis and
Roadmap Report is an important and critical step towards
certifying our highly valued mahogany,” says Attorney-General and Minister for Economy Hon. Aiyaz
He made the comment while launching the report at the Holiday Inn Suva on June 24, 2022, when he was also acting as Prime Minister and Minister for Forestry.
Mr Sayed-Khaiyum said for the premium market positioning of Fiji's mahogany products, FHCL's readiness to target entrance into the Forest Stewardship Council Certification Scheme must be applauded.
FHCL was established in 1998 as a State-owned Enterprise to manage the Government of Fiji's hardwood plantations.
Fiji developed its own Mahogany Branding and Licencing Act, which was endorsed by Cabinet in 2011. This safeguards our mahogany products from illegal local and international traders. However, a major barrier to accessing lucrative markets overseas and negotiating prices is the inability to deliver products from a ‘certified mahogany plantation forest’.
Mr Sayed-Khaiyum said there was a tremendous need to get our mahogany certified to enable us to compete in the international market arena, adding niche value to place us above other similar mahogany sources from Asia and Africa.
In light of this, he said there was a need for forest certification on our mahogany forest plantations because once our mahogany is certified, it would be able to access niche markets internationally with the optimum price in the European and U.S markets.
Currently, most of our mahogany products have been exported to the South American and American markets where our Fijian mahogany has been re-classified before being resold to other niche markets in Europe and the U.S as certified products.
"Since the reforms of the mahogany industry in Fiji, the Government way back then recognised the fact that FHCL, notwithstanding the fact that it had the largest planted mahogany forest in the world, did not get premium dollars for its mahogany, which I think was a great tragedy," Mr Sayed-Khaiyum said.
"And at that point in time, FHCL had a debt stock of about $25 million, even though it had the largest planted mahogany forest in the world. Another factor was that it was planted predominantly on indigenous land. The fact that it came from Fiji, our mahogany was not sold at a premium price. Our mahogany was not distinguished from other mahogany that was harvested illegally and from virgin forests.
“And we are still selling some of that mahogany to Central America or South America where it gets mixed up with other mahogany, so the value comes below what it should be sold for.
“There is no doubt that since the licensing regime that was put in place after the 2011 Act was put in place, our mahogany has become a lot more inaccessible where there is a particular regime of people who can only harvest mahogany. That was the critical first step. It was also critically important to have the branding done to be able to distinguish Fijian mahogany from other mahogany in the world.”
Fiji was once exporting around 500 cubic metres a month of Fijian mahogany decking and exterior furniture products to the New Zealand and Australian markets 10 years ago. However, this stopped when both of these countries only allowed certified timber products into their countries.
The current average Fijian Mahogany export price is around FJ$2,000 per cubic metre, and the current potential international markets can easily double once our mahogany are certified.
Mr Sayed-Khaiyum mentioned that the Fiji Pine Limited was already Forest Stewardship Certification (FSC) certified and the company now enjoys the many certification benefits that have been achieved via market access, technological advancements, and tightened documentary controls that have enabled efficient and effective decision-making.
“We know that Fiji Pine has already received the certification and the idea is to extend that certification to FHCL,” he added.
The Gap Analysis and Roadmap Report is FHCL’s Certification Strategic Action Plan.
The report highlights the gaps in FHCL management to allow them to be actively addressed to achieve compliance to international FSC Forest Management Standards. By obtaining a FSC, a forest could confirm that it was being managed in a way that conserves biological diversity, enhances the lives of landowners and workers, while ensuring economic sustainability.
He said FSC certification would also mean that we needed to safeguard the environment, reduce the negative impacts with our operations, address social issues with our landowners and the need to operate sustainably by harvesting and reforestation projects. It will also raise the standard of work, looking after workers and industry players.
“So today it’s a very significant achievement together with the fact that with this Board now, the debt stock of FHCL is less than what it ever was. This is a highly significant milestone that FHCL has achieved and that should also be applauded,” Mr Sayed-Khaiyum said.
He added that this would ensure our mahogany products can access lucrative markets which will in turn help increase the forestry sector’s contribution to Fiji’s economic growth.
"Once this gap analysis report is put in place, then if you get the mahogany forests certified, you will then be able to get FHCL trees certified, which will get a much higher value. Once FHCL is on a sustainable path, then there will be more proceeds in the sharing of profits with the landowners themselves," Mr Sayed-Khaiyum said.
"I want to thank all those involved in the process of identifying the gaps, in identifying a pathway towards which we can achieve the certification of mahogany forests. In fact, if we have the proper certification, it could be optimal for us to do the value adding in Fiji itself. It would attract investors to set up plants here to do the value adding process in Fiji. And we must try and achieve this strategically," he added.
The FHCL Forest Certification Gap Analysis and Roadmap Report was handed to FHCL to take actions on the recommendations of the report. It will be a Guide and with the Roadmap will allow the company to prioritise which activities to undertake on the road to achieving Forest Certification.
The report was funded by WWF under the UNDP Ridge to Reef Project, with the Ministry of Forestry providing technical support and authored the Report.