Drivers, perceived benefits and impacts of FSC chain of custody certification in a challenging sectoral context: the case of Romania.

This article aims to analyze the adoption of FSC Chain of Custody certification scheme in connection with the adoption of the main general meta-standards (e.g. ISO certifiable standards), in a challenging context such as that faced by Romanian forestry companies. Using a questionnaire-based survey covering a large number of recently certified firms, the study sheds light on the profile of these companies, the drivers of certification, its economic aspects, the perceived benefits, the intention to keep the Chain of Custody certification, as well as some aspects of the joint adoption of FSC Chain of Custody certifiable standards and general meta-standards. The findings show that companies in the sector use the FSC Chain of Custody certification scheme to maintain their external market and to improve their reputation in a context were the image of the Romanian forest sector has been questioned in the media. Premium price for certified products is pointed out by most of the respondents as one of the benefits, although the mentioned premium is below 5% for the majority of them. More than half of the companies have at least one type of ISO certification. Implications for scholars, managers and decisions markers are discussed in the article

Forest Management Certification in Romania: Motivations and Perceptions

Forestland privatization and transition to a market economy triggered important changes in the Romanian forest sector, imposing challenges for forest management structures. Voluntary forest management certification has been considered a possible solution; therefore, the certified forest area has increased rapidly regardless of the land owner. The purpose of this study is to provide an insight into the certification process. It presents the result of a survey applied to 417 forest management structures in Romania, which was intended to identify the perception of their managers regarding the reasons to adopt certification, the changes determined by the certification, the problems during the process, and the benefits. The study reveals the difference in perception among different types of forest management structures. Non-state management structures voluntarily adopted FSC certification, mainly aiming to obtain economic advantages. Most of the respondents indicated important changes in the consultation with stakeholders including local communities, transparency and clear records, the use of chemicals, and biodiversity protection. Although the FSC certification was not perceived as solving issues like illegal logging, there is a general perception that it improved forest management. The study concludes that the FSC certification proves the willingness of the Romanian forest management sector to cope with the market and trends and clarify its position in society

The Interaction between FSC Certification and the Implementation of the EU Timber Regulation in Romania

This explorative study aims to shed light on the ways in which Forest Stewardship Council (FSC) certification interacts with the implementation of the EU Timber Regulation (EUTR) in Romania. To this end, the EUTR implementation process is examined, and the relationship between this implementation and FSC certification is explored. There is a particular focus on the extent to which certification has helped companies to comply with EUTR requirements. The study uses the analytical framework of Transnational Business Governance Interactions (TBGI) and a mixed research approach. It is found that FSC certification has to a large extent helped companies to prepare for and align with the EUTR’s requirements, in particular concerning risk assessment and risk mitigation procedures needed for a due diligence system (DDS), and in the context of a “policy vacuum” period related to EUTR implementation. Moreover, recent changes in the FSC standard make it theoretically in line with EUTR requirements. However, difficulties remain in relation to the lack of information, costs and bureaucracy associated with both EUTR implementation and FSC certification. Notably, in the absence of a monitoring organization, the establishment of a viable DDS is still problematic as many companies remain unprepared for developing their own systems. Finally, the EUTR and its risk management requirements may have partly fueled the increase in uptake of chain of custody (CoC) certification in Romania. However, due to the risk of CoC certificates including illegally sourced timber, this recent uptake in certification does not necessarily indicate improved sustainable forest management (SFM) or full compliance with EUTR

Forest Administration in Romania: Frequent Problems and Expectations

The aim of this study is to describe the status and evolution of forest management in Romania in terms of forest regime, as well as to highlight the most frequent problems and common expectations of forest district managers. Underlying the presented results are an analysis of the compiled statistical indicators used in Romanian forestry and the outcome of a sociological survey conducted on a sample of 345 forest district managers. In early 2013, over 4.4 million hectares of state, public and private forest land were administered by state and experimental forest districts, and over 1.7 million hectares of forest land, other than state-owned, by private forest districts. Note that approximately 0.36 million hectares (over 5% of Romania’s forest area) are not in the care of specialized units, contrary to the legal provisions. The most frequent problems faced by forest district managers arise in relation to the owners of forests or are caused by illegal logging. This study is a contribution to making the concrete problems faced by foresters and especially the structure and ownership related characteristics of forestland the driving force of legislative changes in the forestry sector

An Analysis of Forest Management Non-Conformities to FSC Standards in Different European Countries

The purpose of this study was to assess the most frequent non-conformities identified in different European countries in the processes of forest management certification according to FSC standards. A total of 31 active certificates from five countries (Bosnia and Herzegovina, Estonia, Romania, Slovenia and the United Kingdom) were analysed, including all active certificates (as of 1st of June 2014) from three countries along with a sample of 13 FSC certificates issued in the UK and one certificate covering 95% of the certified forest area in Slovenia. 253 non-conformities in relation to FSC standard requirements were identified as formulated by the audit teams and the most frequently identified non-conformities in the certification process were those related to Principle 6 - Environmental impact (34%), Principle 4 - Community relations and worker’s rights (17%) and Principle 8 - Monitoring and Assessment (13%). A slight positive correlation was noticed between the FSC certified area and the total number of non-conformities, with a closer link in the case of Principle 9 - Maintenance of high conservation value forests, and Principle 4. The non-conformities related to Principles 4, 6 and 9 appeared to be significantly influenced in occurrence by country development; less often in the UK compared with the other four countries

Efficiency of Wood-Processing Enterprises—Evaluation Based on DEA and MPI: A Comparison between Slovakia and Bulgaria for the Period 2014–2018

The ongoing transition to a low-carbon, sustainable forest-based economy, and the adoption of circular bioeconomy principles in the wood-processing industry is associated with the optimization of natural resources, application of environmentally sustainable production technologies, adoption of technological and organizational innovations, and increased economic efficiency and competitiveness. The implementation of all these measures can help to reach the biggest challenge of our time in the fight against climate change in a cost-effective and competitive way. The aim of this study was to estimate the technical efficiency of wood-processing companies in the Slovak Republic and the Republic of Bulgaria by applying data envelopment analysis (DEA) and the Malmquist productivity index (MPI), and to reveal some factors for efficiency improvements. The economic efficiency evaluation based on official data was performed using selected indices of four wood-processing companies in each country in the period 2014–2018. The study implemented an output-oriented DEA model with constant returns to scale as a nonparametric linear approach for measuring the efficiency of production decision-making units (DMUs). The results obtained revealed that the studied Slovak companies were more efficient with better management in terms of machinery planning and overhead utilization. Markedly, the Bulgarian companies achieved better materials management and current planning quality. Increased economic efficiency of wood-processing enterprises in both countries can be realized through investments in innovative technological improvements, and enhanced research and development activities

Capital Structure Determinants of Forest Enterprises: Empirical Study Based on Panel Data Analysis from the Czech Republic, Slovakia, and Bulgaria

At present, forest enterprises face many challenges in adopting innovative bio-based approaches considering global changes. Due to the specifics of forestry, the choice of financing sources is a complex issue. The aim of this study is to estimate the capital structure determinants of forest enterprises in the Czech Republic, Slovakia, and Bulgaria in the context of the relationship between leverage and the factors of its appearance. The evaluation of capital structure determinants was carried out using selected indicators for 18 forest enterprises, with 6 enterprises per country. Data were processed for the period of 2015–2019. The study methodology was based on a Panel Data Analysis with Fixed Effects and Random Effect models and Ordinary Least Squares estimation. The following specific variables were included: liquidity, leverage, return on assets, size of the enterprises, and gross domestic product. The results revealed that the forest enterprises in these three countries can be differentiated by size and form individual functional relationships with the positive influence of enterprise size on liability share. The next significant determinant was found to be liquidity, which has a negative relationship with enterprise leverage. These results will be useful for managers of forest enterprises in decision-making processes to determine the amount of debt and planning investment programme strategies