Agencies examine disputes
Updated: Friday, September 09, 2011 9:38 AM
It has been nearly two years since critics of two competing forestry certification groups lodged complaints against the nonprofits with federal agencies.
Nothing has come of the complaints against the Forest Stewardship Council and Sustainable Forestry Initiative yet, and it's possible nothing will, according to legal experts.
Though it usually takes a long time for the Federal Trade Commission to begin proceedings against a nonprofit or company, it's possible the agency will never take action, said Prentiss Cox, a law professor specializing in consumer protection at the University of Minnesota.
As a rule of thumb, the agency pursues cases when a reasonable person could have been misled by a representation, he said. However, he said, the definition of "reasonable person" is vague and provides some "wiggle room."
Ultimately, the FTC makes a fact-based decision, Cox said. In this case, it would rest on how the certifications square with what is actually done in the woods.
The dispute centers on a politically charged disagreement about which practices are considered sustainable, he said. Usually, the FTC prefers to take on blatant violations.
"It's hard to imagine FTC will want to charge into this kind of dispute," Cox said.
The Internal Revenue Service examines whether a nonprofit provides a public benefit, said Susan Gary, a law professor specializing in nonprofit regulation at the University of Oregon.
It's fine for a nonprofit also to benefit private interests, but only if it's tangential to the public interest, she said. If the main goal is helping board members of the group, for example, the nonprofit status may be revoked.
In this case, the controversy seems to stem from opposing political views, Gary said. "What the IRS is supposed to do is not take a political position on anything."