WATCH ABOVE: 16×9’s “Liquidating the Forests” follows the trail of illegal lumber stolen in Russia, shipped to China and sold in Canada.
In the heart of the Siberian forest, men risk their lives for the chance to make a fortune cutting timber – a crime that involves Russian mob bosses, Chinese middlemen and some of the biggest corporations in the U.S. and Canada.
“If you’re there and you see the actual corruption and the way that the Chinese factories work and the way that the mafia’s cutting down the forest,that each step you realize that cash that’s being delivered in a suitcase is coming from you, wouldn’t be there otherwise,” says environmentalist Sascha Von Bismarck. “It’s the demand that drives it.”
16×9 obtained shipping records showing that Xingjia, a Chinese company that’s been accused of illegally sourcing its wood from the Russian Far East, sent over $5.7 million dollars-worth of wood to the port of Vancouver bound for North American store shelves.
Von Bismarck runs an NGO called the Environmental Investigation Agency. He spent three years tracking wood from the Russian Far East to that Chinese company, Xingjia, where the wood is processed. Some of that wood is eventually sold in North America and much of it by Lumber Liquidators he says.
“We followed the trail to the biggest companies in the U.S. that were getting most of that wood. Unfortunately that just blazed a trail that led predominately to Lumber Liquidators,” Bismarck says.
And the disappearing forest in the Russian Far East is also threatening the last remaining Siberian tigers, one of the rarest and most elusive species of big cat on earth.
With fewer than 500 left, logging is devastating the food supply of red deer and wild boar, which feed on pine nuts and acorns and are the main prey for the tigers.
Lumber Liquidators, which has nine retail stores in Canada, has denied these allegations.
Lumber Liquidators says that the EIA report “contained fundamental inaccuracies and unsubstantiated claims.” Xingjia has in the past denied these allegations as well.
And, Lumber Liquidators also said it exceeds industry standards by making sure every shipment of wood is legal. And that it will “reject that order before it leaves a dock” if the proper documentation is not produced. The company said it has a training program, and regular independent audits to make sure the wood comes from permissible forests.
Lumber Liquidators has a “real commitment” to making sure wood is sourced legally says Jonathan Geach, Executive Director of Double Helix, a company with an expertise in tracking and identifying timber. Geach was hired earlier this year by Lumber Liquidators to help them “improve their risk assessment procedures” which includes using DNA to test wood.
Lumber Liquidators also told 16×9 it met with Greenpeace in response to a 2014 Greenpeace USA investigation alleging that some of Lumber Liquidators’ Brazilian suppliers had controversial logging practices. In a written response to 16×9 Lumber Liquidators said “Although it has not alleged that any Lumber Liquidators’ wood was harvested or sourced illegally… both parties realized that Lumber Liquidators needed to do a better job of broadly communicating our longstanding policies and actions to protect the environment.” The statement went on to say “Our communications with Greenpeace have helped them better understand the positive things we’ve always done as a business, and our interactions have included inviting Greenpeace’s input into our recent efforts to better develop Lumber Liquidators’ public facing sustainable wood sourcing policy.”
Since 16×9 posted Lumber Liquidator’s response, Greenpeace USA put up its own clarification saying “some of Lumber Liquidators’ Brazilian suppliers exposed the company to sourcing from controversial logging practices in Brazil” and that “Lumber Liquidators… needs to do a better job of developing and implementing sustainability policies”.
Meanwhile, EIA’s Von Bismarck says his investigation proved that Lumber Liquidators bought and sold illegal wood. Pretending to be a businessman, he flew to China and spoke with what Bismarck says is Lumber Liquidators principal Chinese supplier of wood, Xingjia.
By using official documents and trade data, he says he also identified approximately 30 Russian trading companies and concession holders that sold timber to this company in 2012.
Bismarck investigated Xingjia’s top Russian suppliers, many of which, his report says, “had links to recent illegal logging cases…one supplier that Xingjia explicitly named when asked for documentation about their sourcing was sanctioned in 2010 for illegal logging and is the subject of a criminal investigation” in the Russian Far East.
In a press release, issued Friday titled “Lumber Liquidators Lies to the Public”, EIA reiterated that “Lumber Liquidators imported illegal wood. A lot of it. And they know it.” In the release EIA raises serious doubts about Lumber Liquidators compliance program and urges the company to focus on fixing it “instead of attempting to cover up their shortcomings” by having a better communications strategy. EIA also encouraged Lumber Liquidators to make public “any information it has to substantiate its negative assertions about EIA’s report and its claims that it has never received illegally logged wood from the Russian Far East.”
U.S. Homeland Security and Justice Department officials raided Lumber Liquidators offices in September 2013, investigating whether the company imported illegal wood. That investigation is ongoing.
WATCH BELOW: An extended interview with Sascha Von Bismarck
One senior Xingjia official also told EIA that Costco Canada was a “major customer.” Costco Canada denied this, telling 16×9 that it did not buy this wood in the past. Moreover, none of its “current products come from the factories that were mentioned” in the EIA report.
In Canada, The Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act (WAPPRIITA) is the federal anti-trafficking law that is meant to control illegal wood trafficking.
While the government claims that this legislation is meant to stop illegal logging, Shane Moffatt of Greenpeace told 16×9 that “the law is unclear and is much weaker than equivalent US and EU regulations.”
The law has had little direct effect in stemming illegally cut wood imports that might be coming into this country. Environment Canada, in a statement, said there have never been “prosecutions or large fines for illegal wood imports” under the relevant section of WAPPRIITA.
In the US, illegal wood imports are regulated by the Lacey Act. It forbids importers from selling wood that was illegally cut overseas. It also requires importers to provide paperwork explaining the origins of the wood. Similar legislation exists in the European Union.
WATCH BELOW: An extended interview with Don Finkell, chairman of the Hardwood Federation which represents domestic US hardwood suppliers
After initially trying to import wood from China Don Finkell, who used to run the world’s second biggest wood flooring company, eventually decided to get out. He was uncomfortable with how businessmen were sourcing their wood.
“Chinese companies that would make this product for me, would source it from this warehouse and I would ask them, ‘How do you know its legal, where did it come from?’ They would tell me:‘We don’t know we can’t find that out,’” Finkell says.
In 2011, China exported $9.4 billion of wood furniture primarily made from hardwood species and $393 million of solid hardwood flooring to the US, EU and Japan according to a World Wildlife Fund report.
The recent EIA report is only the most recent from think tanks and environmental groups which point to a much bigger problem. According to WWF, in 2010, at least half the oak sold for export from Primorsky and Khabarovsky provinces was stolen.
16×9’s investigation “Liquidating the Forests” airs this Saturday at 7pm.