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Sweden sets legal precedent with prosecution of Myanmar teak trader

  • Sweden’s forest agency, Skogsstyrelsen, prosecuted the trader, Almtra Nordic, under the EUTR after an investigation found that the company could not demonstrate who harvested its timber or where it was cut prior to the company purchasing it from the state-operated Myanmar Timber Enterprise (MTE).
  • The EUTR, which came into force in 2013, bans the sale of illegal or high-risk wood in EU markets and requires companies to perform the due diligence necessary to ensure their risk of importing illegally logged timber is negligible.
  • A Swedish administrative court confirmed a previous ruling that MTE’s documentation did not provide adequate proof that a shipment of teak was produced legally because it failed to provide critical information about the logs’ origins, the logging company that harvested them, and whether or not the harvester was in compliance with Myanmar’s forest legislation.

A Swedish court upheld a ruling today that finds an importer of teak from Myanmar to be in violation of the EU Timber Regulation (EUTR) — setting a legal precedent that conservationists hope will be followed across Europe.

Sweden’s forest agency, Skogsstyrelsen, prosecuted the trader, Almtra Nordic, under the EUTR after an investigation found that the company could not demonstrate who harvested its timber or where it was cut prior to the company purchasing it from the state-operated Myanmar Timber Enterprise (MTE).

The EUTR, which came into force in 2013, bans the sale of illegal or high-risk wood in EU markets and requires companies to perform the due diligence necessary to ensure their risk of importing illegally logged timber is negligible. The principle of due diligence has become a crucial part of efforts to tackle the illegal timber trade in key markets such as the EU, the U.S., and Australia.

A Swedish administrative court confirmed a previous ruling that MTE’s documentation did not provide adequate proof that a shipment of teak was produced legally because it failed to provide critical information about the logs’ origins, the logging company that harvested them, and whether or not the harvester was in compliance with Myanmar’s forest legislation.

Almtra Nordic has reportedly been fined 17,000 Swedish kronor (about $1,700) and received an injunction that prevents the company from selling teak imported from Myanmar into the EU until it can identify and mitigate the risks of the timber having been harvest illegally.

“The Swedish courts have agreed that documentation currently provided by MTE does not satisfy the requirements of the EUTR, setting a precedent which all EU member states should follow,” EIA Forest Campaigner Peter Cooper said in a statement.

The EIA released a briefing earlier this month showing that mitigating risk of illegality when importing teak from Myanmar is essentially impossible because the MTE is “unable or unwilling” to provide the information required by the EUTR. According to the EIA, the yachting industry is a major consumer of Burmese teak, as yacht owners and builders consider decks made from the wood to be a luxury item and status symbol.

Following its investigation of teak from Myanmar sold in EU markets, the EIA filed legal complaints in five countries over EUTR violations by nine companies.

“The ruling means no Burmese teak can be legally placed on the EU market until the Myanmar Timber Enterprise addresses illegality and transparency within the supply chain,” Cooper said. “EIA now expects to see EUTR rulings equivalent to that imposed in Sweden in all nine cases we have submitted. This is a key test of Europe’s resolve to enforce a piece of environmental legislation central to EU forests and climate policy.”

The Swedish case against Almtra Nordic represents the first instance of a court determining that the documents supplied by MTE are not enough to prove legality, and the ruling is likely to be used as guidance by other courts in the EU responsible for judging whether European companies have complied with the EUTR, according to Jade Saunders, a policy analyst with Washington, D.C.-based NGO Forest Trends who works with law enforcement officials in Europe and the US.

“Cases involving Myanmar teak are already being investigated by authorities in other European countries, and we expect to see similar conclusions,” Saunders said.

The government of Myanmar adopted a nationwide logging moratorium in August in acknowledgement of the damage already done to its forests by decades of over-harvesting. While a temporary pause provides breathing space for Myanmar’s forests, Forest Trends notes that the moratorium is set to expire in March 2017 for most of the country’s forests, and such time-bound logging bans rarely result in meaningful change on the ground.

Forest Trends argues that logging should only be allowed to resume after Myanmar’s forests have sufficiently recovered and the relevant government bodies have adopted systems that can ensure verifiable, legal, and sustainable forest management.

Barber Cho, Secretary of the Myanmar Forest Certification Committee (MFCC), a government-linked body, said that those systems are already being created. According to Forest Trends, Cho said that the MFCC is currently developing a system to demonstrate that Myanmar’s timber exports are legal.

“The MTE is working on improving data systems so that information on traceability becomes more readily accessible,” Cho said. “After Myanmar’s current logging moratorium, all timber extraction will be the sole responsibility of MTE, so there will no longer be any question over who has the right to harvest. In the meantime, MFCC, with the support of [the UN’s Food & Agricultural Organization] and the EU, is working on improving current verification systems with the aim of providing clearer evidence that our timber exports are legal.”

As the Swedish court case shows, it’s imperative that Myanmar reforms its forestry practices to include supply chain transparency if the country wants to continue to have access to European wood markets, which were valued at close to €50 million between 2012 and 2015, Forest Trends said. Without such reforms, the EU might not be the only markets Myanmar teak is excluded from.

“This ruling makes explicit that European companies must document their full supply chain back to area of harvest in order to assess and mitigate risk,” Forest Trends’ Saunders told Mongabay. “Today we are focusing on Europe but the court decision is also likely to impact on US imports from Myanmar by raising the bar for expectations of Due Care under the Lacey Act. Where timber source countries have not yet established robust transparent national systems, an expectation of third party audit must become the new global norm for responsible timber buyers.”

Log yard in Myanmar. Photo © EIA.