FSC fails to kick out Schweighofer despite “clear and convincing evidence” of illegalities in Romania

Two-thirds of the last old-growth forests in Europe are in Romania. Unfortunately, Romania’s forests are under threat from rampant illegal logging. And by failing to kick out companies involved in this illegal logging, the Forest Stewardship Council is complicit in this destruction.

One company, the Austrian firm Holzindustrie Schweighofer, dominates the Romanian softwood market, buying from many different suppliers and processing the timber. In 2015, the Environmental Investigation Agency went undercover and recorded Karl Schmid, Schweighofer’s purchasing manager in Romania.

EIA’s investigators presented Schweighofer with a contract to cut 3,000 cubic metres per year, then told Schmid they would prefer to cut more than the contract, but they needed an agreement form Schweighofer to take the additional (illegally cut) timber. Schmid said that would be “no problem”. Schweighofer officials even offered to pay a bonus for the illegal wood:

Also in 2015, EIA put out a report about Schweighofer, titled “Stealing the last forest: Austria’s largest timber company, land rights, and corruption in Romania”.

In May 2015, Germany’s Spiegel magazine ran an article titled “Logging Threatens One of Europe’s Last Virgin Forests”, that looks into Schweighofer’s involvement in illegal logging.

At this time, Schweighofer’s logging operations were certified under the FSC system. As EIA pointed out in its report, less than 2% of Schweighofer’s timber supplies came from its own FSC-certified forests. The rest was from more than 1,000 logging companies. Many of these companies had been prosecuted or were under investigation for illegal logging. Nevertheless, Schweighofer used the FSC certificate to demonstrate that everything was above board in its operations in Romania.

In November 2015, WWF Germany filed a formal complaint with FSC International against Schweighofer. WWF submitted EIA’s report as part of the complaint. WWF’s allegations against Schweighofer were as follows:

  • HS [Holzindustrie Schweighofer] was involved in the trade in illegal timber in Romania over a long period of time, as well as in the purchase of illegally restituted land;
  • HS was involved in the trade of illegal timber, both indirectly by buying illegally harvested timber and directly by failing to follow all regulatory requirements;
  • HS is associated with and has financed suppliers with criminal and corrupt backgrounds;
  • HS’ purchasing strategy actively encourages its suppliers to deliver illegal timber;
  • HS has destroyed HCVs [High Conservation Value Forests] as a result of buying timber from National Parks in Romania.

In June 2016, FSC suspended Schweighofer’s certificate in Austria.

“Clear and convincing evidence” of illegalities

In October 2016, FSC’s complaints panel submitted its evaluation report to FSC’s Board of Directors.

While the complaints panel did not find evidence that Schweighofer has caused the destruction of high conservation value forests, it did find “clear and convincing evidence” of involvement in illegal logging.

Here’s how EIA summarises the findings of the complaints panel – Schweighofer, amongst other things:

  • Purchased illegal timber;
  • Has an inadequate due diligence system for assessing the legality of its timber purchases;
  • Has “itself violated several laws and regulations” in its timber sourcing;
  • Sourced timber from stolen forests;
  • Continues to associate with “individuals and companies with criminal and corrupt backgrounds;
  • Developed a bonus system that encourages illegal logging.

The 110-page report included a clear recommendation:

FSC shall disassociate from Holzindustrie Schweighofer and all companies controlled by Gerald Schweighofer.

FSC however decided to ignore the complaints panel’s recommendation, instead placing Schweighofer on “probation”. FSC has set Schweighofer a series of conditions to be met before the next meeting of the FSC Board in February 2017.

WWF Germany’s Johannes Zahnen described the decision as “absurd”.

In a press release, Alexander von Bismarck, Executive Director of EIA, said,

“It is now unfortunately clear that the FSC logo is used to launder illegal wood. It is all the more shocking that the FSC comes to this conclusion itself, and yet allows it to continue.”

EIA has produced a series of videos that document in detail the extent of Schweighofer’s involvement in illegal timber trading:

And here’s a documentary released in September 2016, produced by RISE and OCCRP, that names Schweighofer as one of the biggest buyers of illegal timber in Romania:

There is a large amount of evidence – “clear and convincing evidence”, as FSC’s complaints panel puts it – that Schweighofer is involved in illegal timber trading. By failing to kick out Schweighofer, FSC is complicit in Schweighofer’s illegalities.

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