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Report Points Finger at US Timber Distributors for Illegal Deforestation in PNG

The global timber trade is driving deforestation in Papua New Guinea (PNG), and abuses are being seen in the supply chains of companies you might not expect, including Home Depot, according to a new report from Global Witness.

Home Depot’s supplier, Home Legend, has halted sales of exotic wood flooring linked to often illegal logging in PNG following a Global Witness investigation. Home Legend, along with Nature Home, one of China’s largest flooring sellers with a distributor in the US, are reviewing their supply chains and sourcing procedures.

Global Witness says this is the first time the 9,000 mile journey of timber from PNG through Chinese factories to retail shelves in the US has been documented, and that it shows the “extensive harm” the trade is doing to the world’s third largest tropical rainforest; the report claims a third of the timber coming from PNG involves the clear-cutting of rainforests “stolen” from local communities.

Most of PNG’s timber is shipped to China, to be turned into flooring, furniture, plywood or other products that are sold domestically or exported globally. The US is the largest buyer of wood products from China, a trade worth $15 billion per year.

Violations to the Lacey Act

The US Lacey Act bans the import of illegal wood. However, Global Witness found wood from PNG readily available on US markets in the form of flooring manufactured in China. Home Depot and Home Legend stated that they took the necessary steps to comply with the Lacey Act for the wood from PNG that they were selling. Companies that don’t fully investigate the supply chain of the timber they import can face tough penalties. Gibson Guitar, for example, agreed to a deal that settled a US Department of Justice probe from 2012 that claimed the company illegally bought and imported ebony and rosewood from Madagascar and India, according to the Financial Times. Gibson Guitar was ordered to pay a $300,000 fine and make a $50,000 contribution to the National Fish and Wildlife Foundation. The company also had to give up wood valued at an estimated $260,000, The New York Times reported at the time of the settlement.

Rick Jacobsen, Global Witness campaign leader said: “Papua New Guinea’s government has illegally handed over vast tracts of indigenous land to logging companies, who are gutting virgin rainforests at breakneck speed. Responsible companies should not be dealing in this wood.”

While the US and Europe have laws in place prohibiting imports of illegal wood, the lack of equivalent measures in China creates risks for American and European importers of wood products made in China, as demonstrated by a recent criminal case involving US flooring giant Lumber Liquidators. Last year the company agreed to pay $13 million in penalties for importing Chinese-made flooring linked to illegal logging in Russia, in violation of the Lacey Act.

‘Revising’ Sourcing Practices

Home Legend and a US subsidiary of leading Chinese flooring brand Nature Home told Global Witness they were reviewing their sourcing practices and would revise their policies as needed. Nature stopped short of dropping the flooring, but said it would put a “pause on new procurement” for the US market while it reviewed its sourcing procedures.

US Efforts to Reduce Deforestation in Supply Chains

Apple is one company focused on reducing deforestation, working specifically with China. The company recently announced that 320,000 acres of working forest in China have been certified by the Forest Stewardship Council and that the company is now protecting and creating enough sustainable working forest to cover the paper use in its packaging for all products.

Apple’s forestry program was launched in 2015 with a five-year partnership with WWF to transition up to one million acres of forest, across southern provinces of China, into responsible management by 2020. Apple’s first goal, to increase responsible management of working forests in China by creating up to 300,000 acres of FSC–certified forests, was reached in just two years, the company points out. Apple says the progress was made through collaboration with two companies in Hunan and Guangxi provinces, one of which will be the largest FSC-certified plantation area in the Chinese pulp and paper sector. WWF worked with both companies to create forest management plans and train their employees to identify High Conservation Value Forest—both necessary for FSC certification.

PepsiCo, too, is addressing the global problem of deforestation with its Palm Oil Action Plan it launched in 2015. The beverage giant just released its action plan Progress Report for 2016, which details the work the company is doing in order see that its sources of palm oil remain sustainable and ensuring the company’s future growth. PepsiCo is a significant buyer of palm oil and, as a result, has a complex global supply chain that encompasses dozens of suppliers, more than 1,500 mills and tens of thousands of farms and plantations that produce palm fruit. PepsiCo put the Palm Oil Action Plan in place to “help advance the sustainability of the palm oil industry” and to commit to sourcing only 100% certified sustainable palm oil.

With deforestation a top concern among companies that source materials from forests, the non-profit CDP created a supply chain platform to help drive companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests. Eight major corporations including McDonald’s and L’Oreal recently joined the group and have agreed to request information from their key suppliers on how they are managing the risks linked to deforestation. The companies say they are combining their purchasing power to achieve deforestation-free commodity supply chains.

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