ARTE Documentary: Bozovich and the scandal of “controlled wood” in Peru. FSC is “no guarantee of legality”

For the recent documentary “Who is Protecting our Forests?”, ARTE journalists Manfred Ladwig and Thomas Reutter visit the operations of Bozovich Timber Products, an FSC-certified logging company. The company is supported by the German government.

The journalists ask whether the chain of custody is better monitored in Peru than in Cambodia and Vietnam.

They travel with the company and film logging operations in the Otorongo concession. They film in the company’s sawmill, where FSC certified timber is painted red and non-FSC certified timber, blue. The wood should be stored separately. But it isn’t.

They speak to Simon Counsell, of the Rainforest Foundation UK (and co-founder of FSC-Watch). On his computer screen, Counsell scrolls through FSC’s Chain of Custody Certification
FSC-STD-40-004 V3-0 document. He stops at this graphic:

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Counsell explains the problem:

“One would think, if you’re buying a product with an FSC label, that would be a quite simple message that the wood inside this product is all from an acceptable source that has been actually inspected by FSC auditors and guaranteed to be from an acceptable source.

“FSC 100%, in which the labelled product contains only FSC certified timber, is actually just a very small part of the picture. And the others are from what are called, euphemistically, controlled wood. And controlled wood is that which hasn’t actually been controlled.

“So instead of auditors on behalf of FSC going into the forest to inspect the logging operations, it’s basically done from a desk somewhere else, in Bonn, or in London.”

Kim Carstensen, FSC’s director general, acknowledges that controlled wood is controversial. He tells Ladwig and Reutters that,

“Controlled wood is one of the big controversies inside FSC. It’s always been a big controversy. The good news, I think, is that we have strengthened the controlled wood standard and I think everybody agrees now that there is a level of control.”

Ladwig and Reutter aim to find out what “a level of control” actually means in Peru.

They meet the director of EIA Peru, Julia Maria Urrunaga. In February 2018, EIA published a report on illegal logging in Peru, titled “Moment of Truth”.

This latest report is one of a series by EIA and Global Witness on illegal logging in Peru – the first dated 2012:

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EIA’s 2012 report, “The Laundering Machine”, found that, “Peru’s primary exporter, Maderera Bozovich, exported shipments under 152 CITES permits during this time [January 2008 and May 2010], at least 45% of which included wood of illegal origin.”

EIA’s most recent report, “Moment of Truth” finds that FSC is “no guarantee of legality”:

Bozovich Group is one of several ADEX [Association of Exporters] members with Forest Management and Chain of Custody certification from the Forest Stewardship Council (FSC). Another company with FSC CoC certification is Inversiones La Oroza, whose exports have been under investigation in both Peru and the United States for illegal timber. Inversiones La Oroza obtained an FSC CoC certificate for its sawmill in Loreto in 2015,215 and certification of its own forest concession was granted in September 2017.

Peru’s Forest Law 29763, Article 127, specifically mentions forest certification as a tool for traceability, and FSC has long championed its systems as a way to ensure legal sourcing. However, the FSC’s chain of custody certification does not require physical traceability of wood products through different stages of processing, but instead relies on a volume-based (“balance of materials” or “balance of volumes”) approach. Additionally, the CoC certificate as such does not refer to the actual wood product, but certifies only the facility where it has been processed. It basically states that the sawmill is capable of keeping physically separated any certified timber that it might receive from the rest of the non-certified timber. A sawmill can thus be FSC CoC certified without actually producing any certified material.

CoC certificates are frequently used in combination with the FSC “controlled wood” label, which aims to ensure that timber does not come from illegal or controversial sources, while not meeting the higher standard of the FSC “Forest Management” certificate. “Controlled wood” does not require traceability back to the point of harvest, and field verification is only done on a small sample of suppliers. Inversiones La Oroza processes “controlled wood” in addition to certified material.

EIA’s Julia Maria Urrunaga tells Ladwig and Reutter that paperwork is often falsified in the timber sector in Peru. She shows a table from the most recent report (GTF = Guía de Transporte Forestal, Timber Transport Permit):

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Urrunaga explains that,

“In this report, and in this other report that we produced before, they [Bozovich] show the largest numbers of illegal papers. That’s also because they are the largest exporters, right, so that’s not a surprise. But the problem here is that they consistently keep showing large numbers of illegal papers. And from the 419 papers that they used, that were sampled here, at least 62 are illegal. Documented by official, I mean by the government.”

Carstensen responds by telling ARTE’s journalists that he is aware of the EIA report:

“Regarding Bozovich, we are aware of the EIA reports. We are aware of also the US authorities have looked into some of these cases. To our knowledge, none of that material was FSC certified or FSC labelled. To our knowledge, there may be some issues with it, but it’s not FSC certified. Therefore we are still interested in the company, because if the company is involved in illegality in one way or the other then that’s of course also an issue for us.”

It’s interesting (to say the least) that Carstensen doesn’t seem even remotely concerned that Bozovich has been exposed as faking its Timber Transport Permits.

And this has been going on for several years. EIA’s 2012 report found that, “information gathered and analyzed for this report demonstrates serious problems regarding the legal origin of a significant portion of the products sold by the Bozovich group, if not necessarily the wood harvested or exported under FSC labels”.

Ladwig and Reutter visit the port of Pucallpa and find huge stockpiles of timber waiting to be exported. Their boat driver tells them that it is all illegally logged timber. “Here, it’s an open secret,” he says.

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From here the timber goes to the timber companies – with falsified documents. The journalists comment that anyone who relies on documents and stamps is either naive, or bribed.


This is the fifth post in a series based on ARTE’s documentary about FSC: “The exploitation of primary forests: Can an ecolabel stop the forest industry?”
Unfortunately, the documentary is no longer available on ARTE’s website, but it is available here (also in German and Spanish).

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