Ten U.S. firms exposed to timber sourced from illegally issued ag licenses in Papua New Guinea

Thursday, August 10th, 2017

Logging in Papua New Guinea. Image courtesy of Global Witness

Ten US companies may be selling wood flooring made with timber sourced from illegal clearances of indigenous land in Papua New Guinea, according to a new report from Global Witness.

The report shows how special agricultural permits known as SABLs were distributed to multinational agribusiness and logging firms, which used them to clear vast areas of rainforest and export the valuable timber. By 2011, 12 percent of Papua New Guinea’s total land area had been handed out by the government as agricultural concessions under these permits, removing this land from the control of its customary owners.

The ensuing clearances of ancient rainforest destroyed the livelihoods of many of Papua New Guinea’s indigenous communities. Global Witness interviewed dozens of people who lost their land to loggers through the SABLs. One activist, Paul Pavol, told researchers of the harassment and police intimidation he has experienced as a result of challenging the legality of the license used to give away his land to logging and palm oil interests.

“These people say they own the land now, and they do whatever they want,” Pavol said. “Police came to our community at night. People were scared that they might burn down our houses.”

Papua New Guinea’s constitution guarantees citizens legal ownership over the land they have traditionally lived on. A 2013 government inquiry into the issuance of SABL permits concluded that the majority violated people’s land rights. In August 2016, the Supreme Court struck down one specific permit which had accounted for roughly 10 percent of all logs exported under the leases. The court decision found that it had been issued without the consent of indigenous landowners and thereby violated PNG law, rendering all operations under it illegal.

But in the months following this verdict, at least six more ships carrying millions of dollars of illegal timber cut under the lease left Papua New Guinea. All these ships were bound for China, where PNG timber is commonly fashioned into commercial products.

Global Witness’s investigation focused on flooring made from one Papua New Guinea’s most frequently exported species, taun. It charts the taun supply chain from Papua New Guinea to its arrival at huge timber ports on the Yangtze River, and on to the sawmills and factories of Naxun, China’s production hub for solid wood flooring. From there, while most taun flooring is sold domestically, a significant quantity is also exported to the U.S., which is the biggest buyer of wood products from China.

The U.S. Lacey Act prohibits imports of illegal wood, but there are no equivalent measures in place in China. This creates substantial risks for U.S. importers of wood products from China. In 2016, U.S. flooring firm Lumber Liquidators was forced to pay a $13 million fine after being prosecuted under the Lacey Act for importing Chinese-made flooring linked to illegal logging in Russia.

Stained Trade identifies ten U.S. companies which are selling taun flooring, including Home Depot, Home Legend, and the U.S. subsidiary of one of China’s largest flooring companies, Nature Home. On being asked what measures they had taken to ensure the taun in their products is legal and did not involve deforestation or land rights violations in Papua New Guinea, none of the firms denied having sold flooring made with taun from SABLs. Home Legend and Nature Flooring subsequently made commitments to halt procurement and/or sales of taun flooring and to review their sourcing policies and practices. Home Depot said it had already decided to discontinue its taun product line in 2016 and had been selling what remained of its inventory in 2017.