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Veto on illegal timber in action

21 october 2015
The largest supplier of hardwood flooring in the US, the company Lumber Liquidators, will pay $10 million fine for the import of wood materials made of Mongolian oak illegally logged in the Russian Far East.

According to WWF-Russia, it will serve as good lesson for timber importers used to think that it’s possible to export illegally harvested timber from Russia with impunity. The decision made by a US court creates a significant precedent for implementation of the “Lacey Act”, which prohibits the import of illegally produced wood materials to the US and requires to provide documentation confirming the legality of timber.

In 2011-2013, Lumber Liquidators concealed the Russian origin of more than 2 thousand cubic meters of parquet materials made of Mongolian oak purchased from a Chinese company under the incorrect label of German oak. In 2013, the company again imported about 2 500 cubic meters of hardwood flooring and declared it as the product made of Mongolian oak from Russia. However, as a proof of legal origin, Lumber Liquidators repeatedly provided the same forest declaration from the company based in Khabarovsky Province, which had the right to harvest only 373 cubic meters of oak!

The research carried out by the Environmental Investigation Agency (EIA) proved that the Chinese supplier to Lumber Liquidators was aware of buying valuable hardwood timber of illegal origin in Khabarovsky Province. Among the major suppliers to the Chinese firm were the leaders of an organized criminal group in Khabarovsky Province who had been brought to court in 2014 for a large-scale case of illegal logging, as well as another company in the region which has a similar criminal case initiated.

In addition to $10 million in fines for caused damage Lumber Liquidators will be obliged to establish a strict system of risk assessment in all flooring supply chains that the company is utilizing.

“Despite the fact that the penalty is quite impressive, and reputational risks may be even more important for such big financial companies, it may take longer time until this example takes effect on other market players. Unfortunately, in situation with a huge demand for fine wood, the effect can be quite the opposite.  The unprincipled companies can become more twisty. Therefore it is difficult to overestimate the importance of adequate measures against illegal logging, which are taken in our country in recent years,” - says Evgeny Lepeshkin, project coordinator at WWF-Russia Amur branch.

For instance, in spring of 2013 the President of the Russian Federation signed the orders which resulted in amendments to the Forest Code and customs legislation. The first amendment introduced control over timber trade and established fine wood marking, the latter - an additional procedure to confirm the legal origin of the exported Mongolian oak and Manchurian ash (Annex III of CITES).

This week the government of Primorsky Province announced results of such measures during the meeting of the commission on the prevention of illegal logging and timber trade. Thus, according to the vice-governor Evgeny Vishnyakov, in recent years there has been a steady decline in illegal cuts and illegally harvested timber volumes. This surely will affect the export volume. “The decline in fine wood export is caused by measures taken by government authorities to minimize the factors that allow dishonest players of foreign trade to export illegal timber,' - said Evgeny Vishnyakov.

WWF Russia has warned about the scale and consequences of illegal logging in its 2013 report “Illegal logging in the Russian Far East: global demand and taiga destruction”, as well as in the 2015 study of “Timber export from the Russian Far East in 2004-2014”.

“Indeed, the attention of government agencies towards the problem of illegal logging is growing. It is also important that the global nature of underlying causes of illegal logging is recognized, which has a positive effect on fighting illegal logging inside the country and abroad, - says Evgeny Lepeshkin, project coordinator at WWF-Russia Amur branch. - We hope that these market-based tools to combat illegal logging will support responsible Russian forest users who are often not competitive because the black market of illegal timber is driving the prices down. The Lumber Liquidators case is a good lesson for companies that still believe that one can with impunity export illegal wood from Russia.”


All what's left from a great oak. Illegal logging site uncovered in Khabarovsky Province
© Dmitry Sychikov / WWF Russia
Khabarovsky Province. Site with illegally logged oak
© Dmitry Sychikov / WWF Russia
Mixed broadleaf and coniferous forests of the south of the Russian Far East - key habitat of the Amur tiger
© Pavel Fomenko / WWF Russia
Money or tiger?
© Anatoly Kabanets / WWF Russia
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