Opportunities for the smallholder sandalwood industry in ... - ACIAR

markets include growing consumer preference for
natural ingredients; manufacturer preference for
sustainable, ethically produced ingredients; and a
growing global beauty industry (Adviser Edge 2008).
Certification schemes and
quality standards
Certification schemes
Certification schemes are formal, auditable management
systems, commonly used for a myriad key
operational purposes, such as sustainable production
practices, quality assurance, environmental management,
organics, and workplace health and safety.
Private or public sector organisations that advertise their
compliance with a particular certification scheme will
normally have been audited by a qualified independent
party as acting in accordance with the stated program.
These schemes are becoming increasingly important
within the forestry and essential oil industries
and impact on both small-scale and large corporate
businesses. Implementing certification schemes
can ‘prove’ that a business complies with defined
management systems—for example, sustainable production
and harvesting practices—or illustrate equitable
arrangements with Indigenous communities.
Certification schemes will often provide transparency
and allow traceability of product throughout the supply
chain, and hence enhance buyer confidence in a
supplier’s capability.
Although used primarily for compliance purposes,
certification schemes can be used commercially as
marketing tools to illustrate a company’s or supply
chain’s ‘positive points of difference’ relative to the
competition. Certification schemes can also be used
to promote companies as ethical, environmentally
responsible and ‘good corporate citizens’, and hence
attract consumer and investor support.
Certification schemes can be developed at the
national or community level. AusAID reports that
non-government organisations and other agencies are
currently initiating programs at the community level in
a number of Pacific countries. Group certification can
be used to certify a number of small enterprises that
independently would not have the expertise or finance
to meet the costs of certification (AusAID 2006).
Certification schemes, particularly pertaining
to sustainable production, environmental management
and ethical business practices, are particularly
valued in the European Union and have become a
key element of supplier–buyer relationships among
leading European perfume manufacturers.
This trend is of particular relevance to the future
development of the Vanuatu sandalwood industry. An
interesting case study in the sandalwood industry is
the Songman Circle of Wisdom Certification Protocol.
This case study can provide a lead to the Vanuatu
sandalwood industry in its strategic and export market
planning for a number of reasons:
• It is an international, ‘whole of supply chain’
business arrangement involving Indigenous producers,
processors, exporters and leading global
perfumeries.
• In essence, a premium is being paid for product
sourced from an Indigenous community over and
above the standard commodity price.
• The focus of the scheme is on sustainable production,
quality integrity, traceability from harvest
to final point of sale, and production of natural,
unique end products.
• Involvement in the program is heavily and
proudly promoted by the Australian processor,
Mt Romance, and most importantly by Aveda and
Givaudan. All of these companies see this protocol
as a key element of their business model and
preferred sourcing policy.
• There is due recognition of the key role of the
Government of Western Australia in providing an
appropriate regulatory framework to protect the
resource.
• In the absence of available statistics, the volumes
of product being marketed via this protocol are
likely to be relatively small in global terms given
the size of the available resource. Despite this,
the program is effectively resourced and heavily
promoted in the international marketplace, at little
or no cost to the producers involved.
Product standards
Product standards are used to ‘grade’ and accurately
describe a product, and are becoming increasingly
important within the commercial forestry and
essential oil industries. If a product has complied
with a specified standard, it is deemed to meet
specified minimum quality criteria. This can greatly
enhance buyer confidence and facilitate export trade.
To be valued and effective, product standards must
be measurable, achievable and verifiable. In the case
of essential oils, such as sandalwood, verification is
often carried out by accredited laboratories to enhance
the independence and technical credibility of the
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