Europe’s Rich Continue to Buy Myanmar’s Illegal Teak: EIA

By Nyein Nyein 28 May 2020

Illegal teak from Myanmar is not allowed to be traded in the European Union under the EU Timber Regulation (EUTR) since 2013. However, the London-based Environmental Investigation Agency (EIA)’s latest report said traders are paying to ship illicit teak into Europe, avoiding import rules to get their hands on valuable timber for high-paying clients for use in luxury products, like yacht decking.

The EIA’s latest report The Croatian Connection Exposed – Importing illicit Myanmar teak through Europe’s back door – said the import/export documentation the agency obtained showed that 10 shipments of timber totaling 144 tonnes arrived in Rijeka in Croatia between 2017 and 2019. Invoices put the total value at nearly US$1 million (1.4 billion kyats), although the wood was selling at far higher rates to yacht builders.

Alec Dawson, a forestry campaigner at the EIA, took part in an email interview with The Irrawaddy on Myanmar’s dwindling forests.

What is the highlight of your latest report? 

The report reveals the results of an EIA investigation into companies throughout Europe attempting to circumvent enforcement of the EU Timber Regulation by landing timber in Croatia. In the last two years, European authorities have a strong stance on Myanmar teak being brought into the EU, and direct trade in teak has declined significantly in countries that have enforced this position. However, other countries have seen a rise in Myanmar timber imports, including Croatia.

Through documents provided by the Croatian Ministry of Agriculture in response to a freedom of information request, EIA has discovered that a Croatian company, named Viator Pula, has been used by traders throughout Europe to land timber and trade it on to them. In several cases, the companies receiving the timber have had warnings given to them specifically or to the industry in their country stating that either their due diligence for Myanmar teak was inadequate or that it was not possible to provide adequate due diligence in Europe for Myanmar teak. Instead of ceasing trading or improving their own due diligence systems, they have opted to source timber through Croatia.

Why isn’t Myanmar’s teak yet able to comply with the EUTR? What reforms are needed?

To comply with the EUTR, importers of Myanmar teak need to be able to conduct “due diligence” to ensure that their timber is from a legal source. Myanmar has been significantly affected by illegal logging. For many years there was harvesting above the allowable cuts set by the Forest Department. In recent years Myanmar has taken significant steps to reform, for example by reducing its annual cuts and introducing a log export ban. In recent months the Forest Department has seized large quantities of illegal timber so are clearly taking action against illegal logging. However, what is needed is transparency to ensure that this illegal timber is not making its way into international markets.

Your report says the imports of timber from Myanmar have substantially increased in many EU states, including Croatia, Greece and Italy and decreased in Belgium, Germany and the Netherlands. Myanmar has introduced the log export ban and reduced the annual timber harvests, but Myanmar teak logs are still being traded illicitly within the EU as you say. Why is that? 

The timber is not coming into the EU as logs – it is sawn timber so avoids the log export ban. This timber is being illegally imported into the EU because it is against EU regulation to bring timber into the EU market without adequate due diligence to confirm its legality, all the way to the source. Timber companies in the EU have not been able to prove this due diligence to a high enough standard. About two years ago, a number of EU countries (Belgium, Germany and the Netherlands, for example) took action to stop these European companies trading timber with inadequate due diligence. Some of those companies have then chosen to use middlemen in places like Croatia to ship timber, rather than cease trading or improve their own due diligence. The Croatian authorities has now taken action to try and stop this, and hopefully trade of illicit timber into Croatia will be reduced as well.

How many EU companies are being punished or face punishment for trading illegal teak logs in the EU or for violating EUTR? 

At the moment, EIA is aware of an investigation into two Dutch companies and one Czech company, as well as steps being taken against two Croatian companies, including Viator Pula.

How many tonnes of Myanmar’s teak is being confiscated due to EU companies not following due diligence?

Not very much teak is being confiscated, as companies are circumventing enforcement by trading through places like Croatia and Italy. In April 2019 the German authorities issued an order that 26 tonnes of Myanmar teak be confiscated and returned to where it was shipped from.

How serious is the crisis facing Myanmar’s forests? Does deforestation continue and why?

Recent reports of large seizures of illegal timber, such as 1,400 tonnes seized in Mandalay and 2,800 tonnes seized in Kachin, show that illegal logging is still contributing to deforestation in Myanmar. However, that these seizures are taking place shows that Myanmar is taking positive steps to combat the illegal timber trade.

There were claims about your report last year, “State of Corruption: The top-level conspiracy behind the global trade in Myanmar’s stolen teak” that some of the facts were wrong, what would you like to say?

EIA gave a comprehensive response to these criticisms in this piece on our website.

In brief, EIA had multiple sources for its findings about Cheng Pui Chee and stands by the report. The article cited above misquotes EIA’s report in multiple instances. EIA welcomes reforms that make MTE [Myanma Timber Enterprise] more transparent, however, any suggestion that PEFC [Programme for the Endorsement of Forest Certification] verifies Myanmar timber for the EU market is not true at present.