This study examines why the Forest Stewardship Council (FSC) certification appears to tolerate practices associated with recurring ecological harm despite its preventive environmental mandate. Drawing on empirical material from Denmark and comparative evidence from Ireland, Romania, Sweden, and cross-contextual sources, the study develops a systems-dynamics model explaining how structural tolerance emerges within FSC governance. The analysis identifies three interacting stabilising mechanisms: (I) Compliance Erosion, (II) Proceduralisation, and (III) Remedy Substitution. Together, these mechanisms weaken the coupling between documented ecological harm and consequential certification response. Violations are increasingly processed administratively rather than escalated through sanctions, thereby preserving certification continuity despite recurring concerns regarding non-conformity with FSC Principles and compliance with EU and national law. The study argues that these dynamics are not isolated implementation failures but structural features of a market-embedded governance system in which enforcement is constrained by economic dependence on continued participation, institutional interdependence, and legitimacy management. This produces a Sanctions-Credibility Paradox: Enforcement must be strong enough to maintain trust, yet soft enough to keep participation and economic viability intact. The findings suggest that FSC governance stabilises around tolerable non-compliance, thereby strengthening institutional resilience while limiting transformative ecological effectiveness. More broadly, the findings point to a structural tension within voluntary certification systems between maintaining market participation and achieving ecologically meaningful transformation, with significant implications for the future credibility, effectiveness, and design of biodiversity governance in extractive industries.
Michael Brinch-Pedersen (Mon,) studied this question.