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FSC International flow-on financial effects of COVID-19

In the wake of the Covid-19 pandemic, FSC International has expressed concern regarding the financial risks posed by continuing extended shutdowns across the 90 plus countries using FSC for certification. Source: Timberbiz

The financial risks to FSC stem from:

  • The global nature of the pandemic;
  • The global contraction – leading to recession;
  • The disruption to supply chains and the labour market through illness, social isolation, and distancing;
  • The forecast impact of the Covid-19 virus as it works its way through the population over the next 12 months;
  • The time required to produce a suitable vaccine; and
  • The unknown seasonality of Covid-19 and the effectiveness of the subsequent residual immunity inherent in the workforce.

These challenges pose a significant impact on the ability of certificate holders to operate effectively and meet scheduled audits in order to maintain certification.

FSC International has undertaken to implement a number of financial controls in an effort to reduce expenditure including:

  • Staff hiring freeze;
  • No travel for the remainder of 2020;
  • Reduction of staff hours by 20% or more; and
  • Implemented a work from home policy.

In addition, FSC International has reduced the level of funding for network partners (FSC Australian New Zealand is a network partner), which will take effect from 01 July. This reduction is a significant impact on its income for 2020.

This reduction effectively means FSC ANZ has had to move quickly to implement a financial strategy that:

  • Preserves the team;
  • Reduces costs;
  • Ensures delivery on core functions; and
  • Enables a recovery when the economy rebounds.

The following actions have been implemented to achieve the four key objectives above:

  • Staff hiring freeze (any resignations will not be replaced);
  • No travel for the remainder of 2020;
  • Reduction of full-time staff hours by 20% for the remainder of 2020;
  • Implementing a work from home policy for the remainder of 2020;
  • Telepresence or video conferencing for board meetings; and
  • Reduction in other forecast expenditure.

In addition, government assistance has been approved as a result of the loss of income during this period.

The consequence of these measures is that the FSC ANZ office will be closed on Fridays. This aligns with FSC APAC and International office closures.