Sustainability standards and certification systems have been criticized for creating entry barriers and adding burdens to small-holders. The demanding, knowledge-intensive techni­cal requirements and the certification process itself can exclude small-holders who are not given adequate extension service support or training in how to adapt to new standards [15]. The high financial, time, and opportunity costs of implementation can cause additional burdens, resulting in income loss and market access restrictions for small-scale farmers and enterprises, particularly those considered among the poorest [11, 25]. Sometimes the extra investment and effort needed to gain certification status does not pay off in terms of price premiums gained for certified products. Existing developing country suppliers might lose their position in global market chains as rising standards create new challenges [11]. If and when a standard becomes widely accepted, it could become de facto purchasing criteria. Buyers may be less willing to pay extra premiums for standards compliance, thus leaving producers to bear the burden of higher production and compliance expenses but with no direct financial incentive apart from market access [11]. When expected benefits do not materialize in the short term, the hidden costs of compliance undermine effective and cohesive collective action by cooperatives or associations designed to take advantage of certification systems [11].

Sustainability standards and certification systems have also been criticized for exacerbat­ing inequalities in commodity chains. Even when producers receive some benefits, power relations remain unaltered when producers are non-participants in the decision making pro­cesses that affect them [11]. Downstream actors such as retailers can set higher consumer prices due to the value attached to symbolic attributes of the products; yet these higher prices do not always yield higher producer prices. Therefore, the inequalities of value distribution within different stages of certified chains are often higher for certified chains compared to conventional chains [15]. Moreover, sustainability standards and certification systems may enhance product quality and environmental outcomes for export-oriented production, giving the appearance of success, but fail to create incentives for sustainability in domes­tic markets, hence creating additional difficulties for companies wanting to produce for both markets.

Observers have further criticized sustainability standards for their failure to recognize and uphold certain social criteria for sustainability. For example, the Ethical Trading Initiative (ETI) fails to address gender-specific concerns of female workers and farmers arising from their domestic and household responsibilities [38]. Furthermore, the degradation of social well-being for populations in producing countries is one implication of uneven, unequal standards-induced employment and income in these areas. Some scholars go as far as to question the democratic legitimacy of sustainability standards, noting that “What private food governance does not foster and, in fact, tends to worsen, however, is the aspect of the social sustainability of the global agrifood system” [25].

The national context in which sustainability standards are implemented greatly influences the success or failure to reach compliance and enhance sustainability. Indonesia, where sustainable forestry standards conflict with local land tenure arrangements, provides a good example. The logic of certification does not adapt well to the political economy of land use in Indonesia. Certification systems rely on evaluations occurring in specific forest units, but the system of forest governance in Indonesia does not respect the integrity of such units [10]. Certification requires clearly defined forest boundaries and clear classification of forest types. Such clarity, however, does not exist in Indonesia, as 90% of state forest land has ambiguous legal status. Ambiguity results from conflicting interpretation of land rights and land use practices between the central government and customary, community-based land rights (adat). Land reforms to address these issues have stalled.

Social sustainability is often ignored by national governments who choose not to respect local land rights by leasing land directly to TNCs. The resulting predicament runs counter to FSC principles. FSC principle 2.2 says, among other things, that.. local communities with legal or customary tenure or use rights shall maintain control, to the extent necessary to protect their rights or resources, over forest operations unless they delegate control with free and informed consent to other agencies…”. FSC principle 3 includes that “… the legal and customary rights of indigenous peoples to own, use and manage their lands, territories, and resources shall be recognized and respected…”. Despite these FSC principles, the

Indonesian Ministry of Forestry has often granted timber concessions to large Arms in areas where communities claim land use rights or where the legal status of the land is still unresolved [10].

Pressures to implement social sustainability standards will be based on the vigilance of CSO and the major buyers, including the U. S. government and major transportation companies, such as airlines. Pattberg [39] claims that effective market-based systems for governance toward sustainability outcomes must meet two basic conditions. Firstly, demand for eco-labeled products must be sufficiently high and steady to affect changes in production processes and business practices beyond temporary, “hot topic” public relation campaigns that are acted on in the media. To meet this condition, the champions (such as civil society organizations) of standards and certification systems must adequately inform consumers about existing choices. Secondly, effective private governance requires an adequate and consistent supply of certified products. When new systems are unable to provide a consistent visible presence in the market, they lessen their credibility, reduce their market share, and face difficulties in rivaling the non-certified products of competitors.

One shortcoming of sustainability standards and certification systems is their tendency to undermine social sustainability by marginalizing small-scale producers, enterprises, and retailers. Forest certification can also marginalize small-scale private forest owners and producers in developing countries. Certification adds cost to the production process, costs that are more heavily felt by small-scale producers who are unable to spread costs out across a larger operation. The result is loss in market share as they fail to cost-effectively meet market demands for certified timber and forestry products [18].