Unpacking Forest Stewardship Council certification in Chile: The scope and limitations of neoliberal market‐driven governance for achieving sustainable development

Abstract The Forest Stewardship Council (FSC) is an international NGO promoting sustainable forest management by setting standards and certifying timber as eco‐friendly. After facing significant resistance from the Chilean forestry sector, which is plagued by environmental and territorial conflicts, FSC began certifying Chile's main forestry corporations in 2010. This article examines the implementation of FSC's standards by addressing two questions. First, how does FSC function in practice, including the roles of consultants, chambers, and instruments in the certification process? Second, what are the scope and limitations of FSC in achieving sustainable development and managing forestry industry conflicts? Elaborating on 24 interviews with key forestry stakeholders, ethnographic fieldwork, and documentary analysis, the findings indicate that FSC enhances management practices in the forestry industry by promoting legal compliance, rational production management, and improved relations between firms and local communities. FSC provides a green imaginary that ‘cleans up’ timber production as conflict‐free, facilitating its free circulation in the international market. However, as a private governance system, FSC is based on an artificial consensus that has limitations such as power imbalances between firms and communities, limited sanctioning power, and close ties with large industry actors. This neoliberal form of governance fails to resolve structural problems between industry and indigenous communities, yet it creates strategic opportunities for mediating the relationships between actors. In Chile, FSC enables incomplete citizenship for communities and serves as a ‘soft regulation’ for firms, reducing the likelihood of increased State regulation in the forestry sector.