CERTIFICATION OF FORESTS AND WOOD PROD- UCTS IN SERBIA IN THE CONTEXT OF NEW EU- ROPEAN UNION LEGISLATIONS-CURRENT SIT- UATION, PROBLEMS AND CHALLENGES

The paper presents research results of the current situation in the area of certification of forests and wood products in Serbia in the context of new European Union legislation referring to the placement of wood and wood products on this market. The objective of the research was to observe the situation, phases which Serbia implemented in the process of forest and wood products certification until now, as well as the problems and challenges the companies in this process face. Based on research results, future development of the market of certified wood products in Serbia was assessed and the proposal of measures which should be realized in order for Serbia to become a country whose companies will be ready for the moment when provisions and measures of the new EU legislation become effective was given. The selection of the abovementioned objective was conditioned by the fact that from January 1st, 2013 new legislation takes effect, with significantly stricter terms for the placement of wood and wood products from other countries on this market. One of the conditions which will have to be fulfilled by the companies wishing to export their products on this market refers to proving their origin. Since the EU is the most significant market for wood products exported from Serbia, fulfillment of the stated and other terms from the new EU legislation is of great importance to Serbian companies. Until the beginning of September 2010, only 387,000 ha were certified, namely 17.2% of the total area under forests. In the same period, only 33 wood processing companies in Serbia possessed CoC certificates for their products. Such a small number of companies possessing certificates for their wood products compared to competitive neighboring countries can represent a serious limitation in achieving their satisfactory competitiveness on the EU market in the following period.


INTRODUCTION
During 1990s sustainable forest management became the key factor in forestry around the world.As a challenge to the requirements for sustainable forest management, in California in 1990 a group of stakeholders identified the needs for establishing a credible system which will identify the sources of forest products acceptable from that aspect.In 1993, the Forest Stewardship Council (FSC) was officially founded in Toronto, Canada, by the WWF and other environmental NGOs, timber traders, indigenous peoples' groups, forest worker organizations, and other stakeholders to globally promote sustainable forest management (A u l d , 2008).FSC certification scheme for forest management was launched, followed by a set of Principles and Criteria for certifying forests.
As a component of sustainable forest management, certification of forests and wood products has caused numerous debates and polemics in forestry and allied activities and has become an inseparable part of contemporary forest management.Forest certification developed together with the increase of environmental awareness, thus connecting "green consumers" with the producers who apply the measures of sustainable forest management in practice.Certification connects "green consumers" with the producers who strive to improve their forest management practices in order to achieve better position on the market as well.
Certification is a multi-faceted process involving retailers, consumers, producers, mills, environmental organizations, societies (Pe r e r a , 2006).Although voluntary, forest certification has become a condition set by the developed markets.Companies unable to fulfill this condition are faced with the possibility of the loss of market.
Forest certification is an increasingly important "tool" for forestry, wood industry and consumers today.Through forest certification, a buyer obtains the confirmation that the product is produced and distributed pursuant to the set standards.

OBJECTIVES AND RESEARCH ISSUES
The main objective of this paper is to research the current situation in Serbia regarding the certification of forests and wood products, as well as the significance of certification in relation to Corporate Social Responsibility of forest companies and export of wood products to the European market.
An overview of the current situation in Serbia regarding the certification of forests and wood products is of vital importance.On the basis of that overview an evaluation of the situation can be made and recommendations for future activities can be given.
Having in mind the main objective of the paper, specific questions that are asked refer in particular to the following: -What is the current situation in Serbia regarding forest and wood products certification, experience of the companies in introducing certification and what problems do they face?-What are the requirements of the European Union market regarding these products?-What is the scope and structure of wood products export from Serbia to the European market?
Beside the above mentioned, a special objective of this paper is an overview of the current situation on the market of wood products in the European Union regarding the requirements for certified products.A special segment of research and analysis in this paper refers to the regulation of the European Parliament "The obligations of operators who place timber and timber products on the market" (05885/4/2010 -C7-0053/2010-COD/2008/0198) which additionally regulates the market of wood products in the European Union.These processes, although not mandatory for Serbia currently, point to the objectives of the EU policy referring to the prevention of illegal logging in forestry and guide sectoral activities in the process of transition and EU accession.This is also of extreme importance to Serbia as it is the most significant market for the export of wood products from the country.
This paper also observes the research of the current situation and problems in implementing certification process for forests and wood products in Serbia and the related forecasts of the future development of the certified wood products market in Serbia.

RESEARCH METHODOLOGY
The methodology is defined according to the research objectives and the main purpose of the paper.As general scientific methods, the historical method was used as well as the methods of analysis, synthesis, induction and deduction.The historical method was used in the part where the development of certified forests in the world and in Europe was represented.Methods of analysis and synthesis were used to research the markets of certified wood products in Europe and Serbia, while the methods of induction and deduction were used for drawing adequate conclusions on the market potentials.The generalization method was used for deriving general conclusions based on several individual observations in the part of the paper referring to the analysis of the FLEGT process and the provisions of the new Directive for the placement of wood products on the European Union market.
The questionnaire method was used for the purpose of surveying the producers of certified wood products in Serbia.During field research, numerous interviews were conducted in forestry and wood working companies as holders of the certificate for wood products.In that sense, three different questionnaires were composed based on which interviews were conducted and necessary information and data were collected.The first questionnaire referred to the certification company which conducted the process (SGS Serbia) and consisted of the following groups of questions: a) Scope and success of the companies of Serbian wood industry in the process of Chain of Custody certification; b) Time and expenses needed for fulfilling all the requirements; c) Major problems noticed in the assessment process.The second questionnaire referred to the company which conducted the activities of preparation of other companies to start the certification process for their products through the system of CoC certificates.Within this questionnaire the questions are grouped as follows: a) Recent experience and current interest of the companies; b) Capabilities and capacities of the companies for the Chain of Custody certification; c) Costs of the preparation for certification; d) Major problems noticed in the assessment process; c) Support from government institutions.
The third questionnaire was made for the purpose of interviewing companies which obtained CoC certificate for their products in order to observe the time needed, as well as resources, costs, benefits, impact of certification on business operations of the company, understanding of the significance of certification for future business operations, etc. Questions in the interview were grouped as follows: a) Significance of forest certification for the company; b) Requirements of foreign markets for certified products; c) Impact of the certification on organizational processes and needed investments; d) Future activities and plans of the company.
The obtained answers, information and data after the completed researches (surveys) were used for drawing conclusions by applying adequate scientific methods, explained in the text below.
Since the market of certified wood products in Serbia is in the initial phase of its development, the paper also used the method of "PESTEL" analysis with the purpose of identifying the impacts of the surrounding factors (political, economic, social, environmental and other) on the development of the market of these products in Serbia (M a t ej i c , 2004).Among numerous factors included in this method, for the purpose of drawing conclusions in this paper, Policy and Legislative factors that directly refer to applying the new EU Regulations and provisions of the FLEGT process to the placement of wood products on the EU market were used.
Beside the abovementioned methods, the method of case study was used as well which was conducted on the example of certified wood products supplied to the company IKEA.This example shows activities of an individual company, which harmonizes its business operations with global policy of sustainable development and Corporate Social Responsibility.

Data collection and reliability
The researched area is relatively new in Serbia, thus the data is not always fully available and no detailed researches have been conducted so far.Researches for the needs of this paper included the activities conducted in recent years in the field of certification in state administration and companies in Serbia.Official data from government institutions were used in this paper as well as company reports and data obtained in direct interviews with company representatives.In the sector of wood industry, companies holders of certificates were analyzed and the data and information were obtained from the Agency for Wood representing the cluster of wood industry companies, which coordinates the process of CoC certification of its members.For companies which are not members of the abovementioned cluster, field researches were performed during which the companies representing the biggest wood processors and at the same time certificate holders were visited.Main issues analyzed in the paper, based on the collected data, refer to the size and participation of certified forests in the total area under forests in Serbia as of September 1 st , 2010, their geographic distribution as well as the distribution of wood industry companies that process certified roundwood, number of companies in wood industry that possess CoC certificates for their products, structure of products for which Serbian companies possess certificates and their participation in the export structure of wood products from Serbia, the needed time and costs for introducing CoC certificates.
During the research, attention was paid to the identification of problems and difficulties which the companies faced in the process of introducing CoC certificate as well as advantages and effects of holding the above certificate.
Having in mind the above mentioned, it can be stated that the data used in this paper possess a sufficient level of reliability.Companies which provided data for the research are respectable and reliable, and the obtained information concurred with the information obtained from the company which performed the assessment of conditions fulfillment (SGS * ), renowned worldwide in this field of activities.Such type of research is conducted in Serbia for the first time, with which it gained weight.It will represent the basis for further researches since the paper gives an overview of the results achieved during a certain time period.

RESEARCH RESULTS AND THEIR ANALYSIS
In every respect, European market is one of the most demanding markets in the world regarding high standards and economic development.Required standards and established control systems, apart from other things, also set high requirements for observing ecological standards to the suppliers of raw material.When wood is concerned, forest certification is added to the existing standards as a response to the requirements of the markets with a high level of environmental awareness.
By May 2010 in Western Europe 85.0 million hectares or 51.2% of forests were certified.This area was certified pursuant to FSC standards, which are mostly applied by state companies and pursuant to PEFC standards towards which private forest owners and smaller companies are more oriented.The estimated potential total industrial roundwood supply from certified forest amounted to 262 million m 3 in the period May 2009 -May 2010-an increase by 9.9% over the same period the previous year.Certified forests are estimated to account for 14.6% of the total industrial roundwood supply, which is higher than 13% the previous year (2010/a).
Such large areas of certified forests in Europe result not only from the awareness on the significance of forest certification but also from market requirements, as a reaction to the increased environmental awareness of consumers.
Green public procurement policies for wood products are a relatively new instrument, and implementation is still at an early phase in most countries.By May 2010, at least 8 national governments in Europe had operational green procurement policies including specific criteria for wood products (Belgium, Denmark, France, Germany, the Netherlands, Norway, Switzerland and the UK).Although several other countries are in the planning stage, the list of countries that have operational public sector timber procurement policies has changed little since January 2009.
While the number of national governments adopting green timber procurement policies has not increased since January 2009, there have been significant developments at local levels.For example, the Olympic Delivery Authority specifies that PEFC-and FSCcertified timber will be used for all construction including buildings, transport and energy infrastructure for the 2012 London Olympics.In the Russian Federation, the Ministry of Natural Resources recently endorsed "green standards" for the 2014 Winter Olympics in Sochi, which specifies that FSC-certified timber will be used (2010/a).
Latest researches show that on the territory of Europe (EU-25) wood with some of the certificates that confirm its legal origin participates with 25% (15.1 million m 3 ) in the total import of wood raw material (60.4 million m 3 ) (TTF, 2009/b).The same report also estimates that about 12.7 million m 3 (21%) of wood which is imported to Europe from other continents comes from suspicious sources.
For species outside European continent, the possibility of buying certified wood is still significantly reduced due to the lack of certified forests (primarily tropical) and thus the offer of certified wood is insufficient.
An additional reason for this is the fact that activities to adopt measures which will disable the placement of wood and wood products without sure and confirmed origin are rapidly undertaken in Europe.As a part of applying this policy, the European Commission submitted the proposal of regulation "Obligations of operators who place timber and timber products on the market" (COD/2008/0198) to the European Parliament.This proposal was adopted by the European Parliament on 7 th July 2010 and to the European Council on 12 th October 2010.The stated regulation anticipates new measures which businessmen dealing with the placement of timber and wood products on the EU market will have to implement.EU timber importers will have to be ready for the implementation of the new regulation on January 1 st , 2013.This regulation provides that the placing of illegally harvested timber or timber products derived from such timber on the internal market should be prohibited.EU member states are expected to draw up a list of penalties for non-compliance.The regulation allows for immediate interim measures for companies suspected of placing illegal wood products on the markets, including seizure of timber products and prohibition of marketing of timber products by the company involved.Operators that place timber and timber products on the internal market for the first time should be subject to the due diligence system, while an internal trader in the supply chain should be required to provide basic information on its supplier and its buyer to enable the traceability of timber and timber products.
Regarding the directive COD/2008/0198, the due diligence system shall contain the following elements (European Parliament, 2010/c): a) measures and procedures providing access to the following information concerning the operator's supply of timber or timber products placed on the market -description, including the trade name and type of product as well as the common name; -of tree species and, where applicable, its full scientific name; -country of harvest, and where applicable; -sub-national region where the timber was harvested; and concession of harvest quantity (expressed in volume, weight or number of units); -name and address of the supplier to the operator; -name and address of the internal trader to whom the timber and timber products have been supplied; -documents or other information indicating compliance of that timber and those timber products with the applicable legislation; b) risk assessment procedures enabling the operator to analyze and evaluate the risk of illegally harvested timber or timber products derived from such timber being placed on the market.In order for the system to be functional, monitoring measures are anticipated, as well as the conditions which have to be fulfilled by organizations that will perform the monitoring.
Taking into consideration all the above mentioned, it can be concluded that it is necessary to accelerate the certification process of both-forests and wood products (CoC) so that companies from Serbia get ready for January 1 st , 2013 when it will not be possible to export wood and wood products of uncertain origin to the European Union market.
For exporters from Serbia European market is highly attractive due to high prices, security and business like attitude of purchasers, but on the other hand it is very demanding regarding the quality and delivery dates.According to the conducted researches among the leading exporters of wood products from Serbia, requirements referring to forest certification and proving of the legal origin of wood are being ever more imposed upon them.In practice, exporters quite often meet the requirements for their products to possess certificates both for raw material and elements as well as for finished wood products.These requirements are distinguished in particular among purchasers from Belgium, Netherlands, Great Britain and Scandinavian countries.
Research results of the current situation and problems in the field of forest and wood products certification in Serbia, conducted for the purpose of this paper, are presented hereafter.
All state forests have not been certified yet and do not possess certificates for sustainable management.Until the beginning of September 2010, only 387,000 ha or 17.2% of the total area under forests in Serbia was certified, of which 256,000 hectares in the PE Serbiaforests and 131,000 ha in the PE Vojvodinaforests (PE "Serbiaforests", 2010/g and PE "Vojvodinaforests", 2010/h).The share of certified forests in Serbia of 17.2% is significantly lower compared to their share in Western Europe, which indicates that lagging of Serbia behind Europe in this regard is huge.
Map of certified forests in Serbia as of September 1 st , 2010 is given in figure 1.
Until the beginning of September 2010, only 33 wood processing enterprises in Serbia had CoC certificates for their products (FSC Certificate Database and Author's questionnaire, 2010/b).Compared to the total number of registered companies for wood processing and furniture production (2,053) in 2010, the participation of companies with CoC certificates is only 1.6%.Such a small share of companies with CoC certificates indicates that the companies in the field of wood processing and furniture production in Serbia have not made big progress in the process of certification and fulfilling of the conditions for the placement of their products on the EU market which will be applied from January 1 st , 2013.Such a conclusion is confirmed by the fact that the first CoC certificate for wood products in Serbia was obtained in the second half of 2009, and that most of the existing 33 certificates were been obtained during 2010 (FSC Certificate Database, 2010/b).
Most of the companies with CoC certificate are situated in Belgrade ( 16) although there are no big areas under forests in the region of Belgrade.This implies that wood industry companies which operate in the region of Belgrade "import" certified wood raw material from the regions with certified forests.It is also indicative that although the entire area under forests in Vojvodina is certified, only five companies in that area possess CoC certificates.This shows that a certain amount of certified roundwood goes for processing in other regions.Field researches conducted for the purposes of this paper have shown that companies with headquarters and production in the region of Belgrade buy the largest amounts of certified roundwood from Vojvodina and the region of east Serbia.Among other companies with CoC certificates for their products, 6 companies are situated in the region of southwest and west Serbia, 5 companies are in the region of central Serbia and 1 company is in south-east Serbia (Author's questionnaire, 2010).
Researches conducted among the companies that produce wood products, which possess CoC certificates for their products, indicate that most of the certificates refer to sawnwood, and elements for furniture and wood flooring.Certificates for sawnwood, elements for furniture and wood flooring participate with 54% in the total number of CoC certificates, followed by certificates for joinery (including wood flooring), furniture and components for furniture and veneer, with 10% respectively (graph 1).
Regarding the dominant share of products with a lower degree of finalization, structure of CoC certificates for wood products in Serbia in 2010 can be marked as unfavorable.
Time needed for introducing a CoC certificate mostly depended on the readiness of the company.Preparations in the companies lasted from 10-30 days (Author's questionnaire, 2010).Total time needed from making the decision till final evaluation for the companies ranged from 90 to 120 days (graph 2).
Out of 33 companies in total, only 6 have completed the process of introducing CoC certificates in the time period of 90-95 days, while the deadline for other companies was somewhat longer.For 2 companies, 116-120 days were necessary (graph 2).Companies with employed qualified persons, wood processing engineers and other professional staff did not have significant problems in the procedure of introducing the certificate and Having in mind the stated time periods which were necessary for the companies for introducing CoC certificates as well as the fact that the provisions of the new Regulation on the placement of wood and wood products on the EU market start being applied in about 20 months, it can be concluded that companies in Serbia which do not possess the stated certificates have sufficient time for their introduction.
Concerning certification costs, companies which have successfully completed this process most often state that certification costs are bearable and also add that the state subsidy is significant.The costs of preparation for CoC certification (consulting services) range from EUR 1,000-1,500 for small companies up to EUR 3,000 for big companies (Author's questionnaire, 2010).
Evaluation costs by control organization are also determined depending on the company size.So far, the evaluation price has not exceeded EUR 2,000.However only smaller companies were concerned (SGS, 2010/d).Companies which obtained FSC CoC certificate state that with this certificate they have better position on the market and expect that the main effects of it possession are yet to become visible since the requirements for certified products are getting more rigid.
Regarding the impact of certification on company organization, top managers of these companies estimate that the entire process has a positive impact on the increase of the degree of responsibility of all employees.
Serbian wood industry is traditionally directed towards the export of products, which was US$ 326 million in 2008.Compared to the total value of export, export to Europe was 47.9%, followed by Russia, Egypt and markets of the former Yugoslav countries (Foreign trade of the Republic of Serbia, 2009/a).The great share of European countries in the total export of wood products from Serbia results from higher prices compared to the markets of the countries in other regions, degree of market development, established partnership relations through multiannual cooperation and other favorable conditions.The most significant partner in wood products export from Serbia is Italy.In 2008, export of wood products to Italy was US$ 35 million (External trade of the Republic of Serbia, 2009/a).
According to the groups of products, greatest share in the export belongs to wooden furniture followed by wood based panels and floorings and sawnwood (graph 3).In the comparative analysis of the data on export structure of wood products from Serbia (graph 3) and the participation of CoC certificates for certain products in the total number of certificates (graph 1) * , it can be concluded that there is a big disproportion.Namely, products with a low level of finalization (sawnwood and elements for furniture and flooring) are dominant in the structure of products for which Serbian companies possess CoC certificates, while final products (furniture and wood flooring) have the largest share in the structure of wood products export.Such a disproportion results from the requirements of importers of sawnwood and elements from the European Union that these products must have adequate CoC certificates because they are placed in final products accompanied by such certificates in the system of their distribution and sale.Big producers of wood products in EU do not want to jeopardize their hard gained position on the market by using raw material for which they have no confirmation that it originates from forests managed in a sustainable manner.Their approach is very simple.Socially responsible business operations, which include the usage of wood with an adequate certificate are more worth the trouble than the accusations for collaboration in deforestation and environment disturbance.By using certified wood this risk is minimized as the third party gives a confirmation that wood raw material originates from forests with proper management.
On the other hand, having in mind that Italy (furniture) and the Russian Federation (wood flooring) are the two most significant markets for the export of these products from Serbia, majority of importers in these countries do not pose such strict requirements for possessing CoC certificates yet.According to the conducted researches among national companies, the number of importers and distributors of final wood products from the European Union that set the requirements for possessing CoC certificates for these products exported from Serbia has been increasing in the last three years.Thus, it can be expected for these requirements to become more expressed in the future period as well, especially after January 1 st , 2013 when the provisions of the new EU Regulation take effect.

DISCUSSION
Taking into consideration all the abovementioned, it can be concluded that it is necessary to accelerate the certification process of both forests and wood products (CoC) so that companies from Serbia get ready for 2013 when it will not be possible to export wood and some wood products of uncertain origin to the European Union market.
* Since the analysis of the structure of participation of products with CoC certificates is done for 2010, and the analysis of the structure of Serbian wood industry products export for 2008, it is necessary to highlight that the share of certain categories of wood products in the total export has not significantly changed during 2009 and 2010.The analysis of the export data for the first nine months of 2010 shows that furniture and wood flooring are still the two most significant export products of Serbian wood industry with the participation of 45.9% and 28.1% respectively, while 2009 was not taken into consideration due to the effects of the world economic crisis (Statistical Office of the Republic of Serbia, 2010).
The EU Forest Law Enforcement Governance and Trade's Voluntary Partnership Agreements negotiated with tropical forest countries include provisions for comprehensive legality verification and CoC systems that provide a foundation for independent forest certification.Chain of custody (CoC) certification has accelerated over the past year indicating strong trade interest in certification as a tool to demonstrate high environmental performance and to differentiate products in a depressed marketplace.The growth in CoC certification continued at an accelerating rate between January 2009 and May 2010, indicating that trade interest in certification as a tool to demonstrate high environmental performance has remained strong despite the recession (2010/a).
Certain distributors in Europe have already taken measures which prevent the distribution of wood products without proven origin in their retail facilities.The example of IKEA shows best what amount of attention is already paid to the issues of certification and origin of wood and wood products, even though the above Directive has not taken effect yet.
The Swedish company IKEA has grown into a global giant recognizable all around the planet, not only by its products and innovations in organization and production but also by social responsibility and care for forests and environment in general.
Beside the position of a global leader which IKEA definitely is in furniture distribution, it is also a global leader in the sector of wood industry in applying the principles of social and environmental responsibility.In its business operations IKEA voluntarily stimulates the principles of sustainable forest management.IKEA's long-term objective is to use exclusively the wood raw material originating from certified forests and with an adequate certificate.Striving towards that objective, IKEA has introduced its own model ("staircase model") which provides and promotes legal and sustainable forest management (K i s h o r, 2006).Main characteristics of this model are presented in the continuation.
The "Staircase model" has four levels with defined minimum requirements regarding wood raw material and its origin.By applying the model, requirements are increased "step by step" for raw material suppliers.Requirements primarily insist on wood origin, which has to be entirely legal (IKEA, 2008).In order to implement this model, IKEA in cooperation with WWF 5* has established the Chain of Custody for wood trade so as to provide full confirmation of its legal origin.
An important segment in the development of the certification of forests and wood products in Serbia is surely the market of certified products.So far, there is no interest in * WWF -World Wide Fund for Nature (WWF) is an international nongovernmental organization dealing with nature protection.
products which possess a certificate for sustainable forest management on the market of finished wood products in Serbia.Certain products with certificate can be found on the market, however they do not attract special attention of purchasers.The reason for this is surely the fact that certification of forests and wood products is for the time being known exclusively in professional circles, while ordinary buyers and citizens are not informed of the existence and significance of forest certification.
The current number of CoC certificates of the enterprises in Serbia is significantly lower compared to the competitive neighboring countries (Croatia, Romania) and can be a limitation in achieving their satisfactory competitiveness on the European market of wood and wood products in the upcoming period, unless it is significantly increased.
The trend of expanding the CoC certification on other wood industry companies in Serbia is positive and at the moment there is a larger number of companies in the procedure of voluntary certification of the Chain of Custody (Agency for Wood, 2010/e).
One of the preconditions for the development of markets of certified wood and wood products is the promotion of certification significance and education of stakeholders.So far, marketing campaigns promoting these processes have not been conducted in Serbia.Realization of such activities is necessary and they can be conducted by the Government institutions or nongovernmental organizations engaged in forestry, environmental protection, consumer protection, trade and other similar activities.The existing holders of FSC certificate for forest management also have the obligation to publically promote the significance of forest certification (Va s i l j e v i ć , 2010).
Further development of certification schemes in Serbia, or implementation of forest and timber products certification will mostly depend on the market requirements.According to the plans of the authorized Ministry of Agriculture, Forestry and Water Management and public enterprises for forest management, all forests in state ownership should be certified according to FSC scheme until the end of 2011 (Forest Directorate, PE Serbiaforest and Vojvodinaforest, 2010/i).PEFC scheme is planned for private forests, because according to its definition, it is more suitable for group certificates.The NGO "Initiative for Sustainable Forestry" is in the process of writing the National Standard for Sustainable Forest Management pursuant to PEFC certification scheme, which after the completion should additionally strengthen the processes of voluntary approach to certification and licensing (Forest Directorate, 2010/f).
Regarding the certification of wood processing companies, in the so called chain of custody (CoC certificates), it is certain that this process will get significantly intensified due to the increasing requirements of the foreign market and the support from the competent institutions.In recent practice, wood processing companies have mainly entered the certification process at the request of the purchasers, thinking that the process is being imposed upon them, often without realizing the significance of certification.This is understandable, as certification causes additional costs and engagement and requires increased control of the flow of raw material and finished products and thus increased administration.
One of the factors that aggravate the development of forest certification is certification costs.Concerning state enterprises for forest management, Government has subsidized the costs of realized forest certification with funds from the budget (Forest Directorate, 2010/f).In wood processing, CoC certification is also supported and partly subsidized by the competent Ministry of Economy and Regional Development so that all costs are not exclusively covered by the company itself.Companies which have introduced FSC standards have so far not adjusted the prices of their products in order to compensate for the newly arisen costs, so that it can be expected the certification process will not have an impact on the increase of prices of wood assortments and products in future as well (Agency for Wood, 2010/e).
Compared to global activities conducted with the purpose to prevent illegal logging and the enforcement of forest legislation (FLEG * ), forest certification has special importance as an additional mechanism for the implementation of these objectives.
Based on the abovementioned international initiative for preventing illegal activities in forestry and wood industry, pursuant to the National Strategy for Forestry and action plans, the "Action Plan for suppressing illegal activities in forestry and wood industry in Serbia" was adopted in Serbia in 2008 within the Forest Directorate, and with the support of the World Bank and participation of all institutions in the forestry sector (Forest Directorate, 2008/a).FLEGT ** activities also have significant support from the European Commission and the Council of Europe for the implementation of EU FLEGT action plan directed towards the prevention of timber trade originating from illegal logging.In that sense, exporters are expected to provide adequate confirmation that timber and timber products are produced pursuant to FLEGT principles, which practically implies the possession of an adequate certificate.This represents only one of additional requirements which will be implemented within FLEGT licensing plan anticipated within the action plan through which the exporting country will prove that wood is produced in accordance with the adopted regulations (Commission of European Communities, 2008).

CONCLUSIONS
Forest certification has become an instrument which verifies the harmonization of forest management practice with the principles of sustainable development.Forest certification has become the condition under which wood products are accepted on developed markets.The companies which do not fulfill the set requirements face the possibility of losing the market.
By May 2010 in Western Europe 85.0 or 51.2% million hectares of forests were certified.The estimated potential total industrial roundwood supply from certified forests * Forest Law Enforcement and Governance (FLEG).** Forest Law Enforcement, Governance and Trade (FLEGT).
amounted to 262 million m 3 in the period from May 2009-May 2010, which is an increase by 9.9% compared to the same period the previous year.Certified forests are estimated to account for 14.6% of the total industrial roundwood supply, which is higher than 13% the previous year.On the territory of Europe (EU-25), wood that has some of the certificates confirming its legal origin participates with 25% (15.1 million m 3 ) in the total import of wood raw material (60.4 million m 3 ).The high percentage of certified forests in Europe gives the purchasers of raw material the opportunity to choose between certified wood and the uncertified one.
Producers from Serbia, primarily in the area of primary wood processing are aware of the situation on the European market, so they have started the certification activities.However, it cannot be said that these activities are timely and sufficiently intensive, especially concerning the fact that all state-owned forests do not have forest management certificate yet, as well as that so far only 33 CoC certificates have been issued, which is significantly lower compared to some other neighboring countries and can represent a huge constraint in achieving competitiveness of producers and exporters from Serbia to the market of the EU and other countries.The practice of exporting uncertified goods is also not sustainable in the long run because of the official policy of the European Union concerning suppression of illegal activities in the forestry sector.
All the facts point to the necessity of intensifying the process of certification in Serbian forestry and wood industry in order to enable a good position of exporters on the European and other markets where wood products are exported.
Having in mind the stated time periods which were necessary for the companies for introducing CoC certificates as well as the fact that there are about 24 months left before the provisions of the new Regulation on the placement of wood and wood products on the EU market start being applied, it can be concluded that companies in Serbia which do not possess the above certificates have enough time for their introduction.However, it has to be highlighted that beside wood industry companies, other institutions and organizations which should be included in the monitoring process pursuant to the provisions of the new regulation, have to initiate preparatory activities as soon as possible in order to get ready for the start of their application.

Graph 1 .
The share of certificates for certain wood products in the total number of CoC certificates in Serbia (2010/j) Графикон 1. Учешће сертификата појединих производа од дрвета у укупном броју CoC сертификата у Србији (2010/j)their preparations lasted shorter.A smaller number of companies which do not have engineers needed more time to do the preparations for evaluation.It was the easiest to conduct FSC CoC certification in the companies which already possessed the ISO certificate.