An Austrian company is accused of harvesting timber from the continent’s last primeval forests.
Richard Conniff
We tend to imagine that illegal logging mostly targets tropical forests in the Amazon, Southeast Asia, and other remote and poorly regulated regions, not in our own backyards. For people who pay attention to such things, there’s comfort in the idea that buying only Forest Stewardship Council–certified lumber keeps us free of complicity in criminal destruction of woodland habitat.
The latest undercover work by the Environmental Investigation Agency focuses on Europe and undermines both those assumptions. It’s a significant embarrassment for the FSC, which until last week was putting its seal of sustainability on timber said to be illegally harvested from Europe’s last surviving virgin forests, in the Carpathian Mountains, and from national parks and other protected areas in Romania. Those habitats were for many years the only refuge in Europe for bears, wolves, lynx, and other species—and they have played a major part in the recent continent-wide rewilding of Europe.
The FSC’s decision to suspend its certification of the Austrian logging company Holzindustrie Schweighofer comes eight months after the U.K.-based EIA published its initial report, Stealing the Last Forest, alleging extensive ties between the company and illegal logging and corruption in Romania. It’s also more than a year after the release of an EIA video showing a company executive offering to accept illegal timber from an undercover investigator posing as an American investor in Romanian forests.
FSC announced that it is also suspending Quality Austria, the auditing body that was supposed to have done due diligence on Schweighofer’s operations. Both suspensions are temporary, pending the outcome of an investigation to be completed in September. Schweighofer is also under criminal investigation in Romania after an investigation discovered more than 100,000 cubic meters of illegal timber in just one of its three Romanian mills. The World Wildlife Fund Austria has also filed a complaint with Austria’s Federal Forest Office alleging violations of European Union timber regulations.
Corey Brinkema, president of Forest Stewardship Council U.S., said FSC “relies on multiple levels of checks and balances to ensure the integrity of our system.” He praised WWF and EIA for “playing an invaluable watchdog role” and also said, “The investigation and suspension of the certification indicate that the FSC system is working. We take allegations of illegal logging and other egregious practices very seriously and invest significant resources into investigating such claims. Where evidence supports it, we have a history of taking strong action to maintain the integrity of the FSC system.”
Schweighofer, a 400-year-old woodworking company, enjoyed a reputation for sustainability in its Austrian forests. But in 2002, it sold off its operations there and began heavily investing in Romania, a country with widespread political corruption. It made a point of touting the FSC certification for its own 30,000 or so acres of forest in Romania, according to the EIA report. But that forest supplied just 2 percent of its Romanian production in 2014, with the rest coming from more than 1,000 individual suppliers.
During negotiations with Schweighofer, EIA Executive Director Alexander von Bismarck posed as an American investor who had purchased a Romanian forest. His permits allowed him to harvest the timber over seven years, he said, but he wanted to cash out in just three. Schweighofer executives repeatedly agreed to accept illegal timber, according to EIA, and while their contract stipulated a small penalty, they told von Bismarck they would pay a bonus of $10 per cubic meter for everything beyond the contracted amount.
In the aftermath of the original EIA study, Holzindustrie Schweighofer chief executive Gerald Schweighofer acknowledged that “Romania’s forest suffers undeniably from illegal logging” but called the charges against the company “unjust, misleading and unsubstantiated.” After last week’s suspension by the FSC, a lower-ranking company executive offered to work to uncover “potential risks with regard to the lawful sourcing of timber” and predicted that “after a successful audit, the FSC certificate can again be used in full.”
EIA reports, however, that as Schweighofer’s purchases in Romania have come under scrutiny, the company has begun to shift its sourcing to neighboring Ukraine, which ranks 130th out of 167 nations on the Transparency International corruption index and also has a reputation for illegal logging. In a new report aimed at buyers in Japan, EIA warns that “Japanese buyers need to be extra vigilant in questioning the validity of the company’s documents of origin,” in part because of recent media reports about “illegal logging of irradiated pine logs within the forbidden zone surrounding Chernobyl,” site of the world’s largest nuclear disaster.
The EIA campaign against Schweighofer comes in the wake of the agency’s successful investigation of U.S. retailer Lumber Liquidators. Early this year, that company paid $13.1 million, the largest fine in the history of the century-old Lacey Act, for illegally purchasing timber from another temperate-zone forest, the only remaining habitat of the Siberian tiger in the Russian Far East. Lumber Liquidators’ stock price plummeted by 90 percent because of the simultaneous report that it risked poisoning customers through high doses of formaldehyde in its products.
The immediate take-home from the Schweighofer investigation is that the European Union needs to close a major loophole in its rules against the sale of illegal timber products. Those rules aim to block imports into the EU but do nothing to stop the sale of illegal timber from member states such as Romania and Ukraine. The Lacey Act, by contrast, bans trafficking in illegal wood products even across state borders. EIA has also been lobbying for Japan to establish rules against illegal logging imports. That country has no equivalent of the EU forest regulations or the Lacey Act but has been a major buyer of Schweighofer wood.
The other big message that major retail buyers should be getting—remind your favorite home supply or furniture store—is that they can’t just look the other way and hope that suppliers are doing the right thing anymore. Though no company executives have gone to jail yet, blissful ignorance is becoming a good way to end up in serious trouble. And for the rest of us? Until the FSC tightens its certification process, we are still back where we started, at “Buyer beware.”