USGBC Accused of Anti-competitive Practices
We may be settling into 2010, but one unresolved legal development in 2009 could have a broad impact on the future of the green building industry. On October 20, 2009, the Coalition for Fair Forest Certification ("the Coalition") filed a complaint with the Federal Trade Commission (pdf), alleging anti-competitive behavior by the Forest Stewardship Council (FSC) and the United States Green Building Council (USGBC):
"[T]he Coalition asks that the FTC investigate through the Bureau of Consumer Protection the deceptive and unfair trade practices arising out of FSC’s forest certification standards; investigate through the Bureau of Competition concerns about anticompetitive activities and monopolization arising out of USGBC’s LEED rating system and preference for FSC-certified products; and provide guidance to standard-setting organizations concerning behavioral standards for compliance with antitrust law."
My law firm represents many of the forest product companies involved in this complaint (another law firm submitted the letter), so I will not be discussing the allegations made against the FSC. Nor will I debate the merits of one wood certification versus another. But I will continue to keep you updated on the status of this complaint and I will be discussing allegations made against the USGBC and the potential impact of these allegations on green building regulations.
First, some background on the connection between USGBC, LEED and FSC:
"Under the LEED system, points can be awarded in five categories: sustainable sites, water efficiency, energy & atmosphere, materials & resources, indoor environmental quality, and innovation & design process. Credit 7 under the materials & resources category addresses the issue of certified wood, with the intent of encouraging environmentally responsible forest management. The requirements for the credit are:
'Use a minimum of 50% (based on cost) of wood-based materials and products, certified in accordance with the Forest Stewardship Council’s Principles and Criteria, for wood building components including, but not limited to, structural framing and general dimensional framing, flooring, finishes, furnishings, and non-rented temporary construction applications such as bracing, concrete form work and pedestrian barriers.'"
According to the Coalition’s complaint, forest product companies that do not supply FSC-certified wood can not contribute to LEED materials & resources Credit 7: "[T]he three standards most widely adopted by forest owners in the U.S. and Canada - SFI, the Canadian Standards Association ("CSA") Sustainable Forest Management Standard, and the American Tree Farm System - receive no points under LEED, creating a substantial disadvantage for American-sourced wood products."
Among other actions, the Coalition has asked the FTC's Bureau of Competition to investigate the USGBC’s preference for FSC-certified wood:
"The Coalition also believes that the exclusionary actions of USGBC and its exclusive endorsement of FSC-certified products . . . warrants investigation by the Bureau of Competition concerning issues of possible monopolization, attempt to monopolize and conspiracy to monopolize the fast-growing certification marketplace. In examining the issue, the Coalition invites the FTC to use USGBC as a case in point to provide specific guidance to USGBC and other standard setting organizations."
It’s this last sentence that has really caught my attention.
How do you think the FTC should respond to the Coalition's complaint?
Related Links:
- FSC, USGBC Accused of Deception, Anti-Competitive Practices (Green Source)
- Letter: Forest Certification and Law and Standards (SJ)(pdf)
Photo: Travelin' Librarian
The issue of forest certification is just one way in which the USGBC has diminished the capability of designers and specifiers to make a green building greener. There are several issues relevant to wood which the USGBC really must come to grips with. Certification is just one. Perhaps just as important is the recognition of the value of having certified materials, especially those with a social equity component, like all credible third-party forest certification systems. There remains no system for evaluating the environmental impact associated with extraction of any other material. While the wood industry can justifiably trumpet its leading role, it is actually at a disadvantage to other materials which do not have the rigorous task of verifying extractive processes.
At the USGBC Greenbuild in Phoenix, I asked a question of Brendan Owens and the MRTAG about this inequity and whether they had the mandate, strength and perseverance to apply certification of extractive processes to all other materials, to the same high standard as wood, and the answer was an unequivocal yes. In fact, the respondent indicated they will be using the wood credit as a benchmark for other materials.
As for the current non-exclusive policy of USGBC, that is actually detrimental to the use of wood because it is one of the most arduous and paper-filled credits to achieve. The result is often a throwing up of hands and specification of another material. That actually is diminishing the 'greenness' of the building because it is a disincentive to use the only renewable structural material we have.
And with only about 10% of all the planet's wood certified under any scheme, why would we quibble over whether my A student is smarter than your A student when all the other kids in class are failing?
Chris,
Great topic, one that you know is near and dear to Jon Kinney's heart! As a result, I blogged on this when the complaint was filed (complete with a three ring binder of state forestry practices too).
You should check out the Dead Tree links in our original post, in particular on the salvos fired before that, interesting background:
http://www.valanduseconstructionlaw.com/2009/10/articles/green/leed-1/my-wood-is-greener-than-your-wood-certification-battles-continue/
I am definitely interested in any details you may have on these disputes. I am personally pretty skeptical of both sides' complaints from a legal perspective. That being said, I share the frustration of the limited spigot of appropriate certifications that USGBC will accept.
FSC does not recognize the pacific north west's Douglas Fir species, rationale being that said tree seedlings are planted in clear cuts which negating recognition.
Douglas Fir tree seedlings however are vulnerable in to an onslaught of animal, rodent and weed overgrowth.
(1) or (2) year old nursery raised tree seedlings are
vulnerable during 1st couple of years of out-planting to attacks from animals, rodents and weed infestation.
Planting in clear cuts is therefore not an option but a vital necessity allowing as it does sunlight to hit the seedlings and promote rapid reforestation growth.
FSC unfortunately, cannot see the woods for the trees and the enigma is why take heed of an organization that is still reeling from it's southern hemisphere debacles in such places as Indonesia and Brasil?