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H.R. 1497, LEGAL TIMBER 

PROTECTION ACT 

LEGISLATIVE HEARING 

BEFORE THE

SUBCOMMITTEE ON FISHERIES, WILDLIFE 

AND OCEANS 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

Tuesday, October 16, 2007 

Serial No. 110-49 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

or 

Committee address: http://resourcescommittee.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

NICK J. RAHALL, II, West Virginia, Chairman 

DON YOUNG, Alaska, Ranking Republican Member 

Dale E. Kildee, Michigan 

Eni F.H. Faleomavaega, American Samoa 

Neil Abercrombie, Hawaii 

Solomon P. Ortiz, Texas 

Frank Pallone, Jr., New Jersey 

Donna M. Christensen, Virgin Islands 

Grace F. Napolitano, California 

Rush D. Holt, New Jersey 

Rau ́l M. Grijalva, Arizona 

Madeleine Z. Bordallo, Guam 

Jim Costa, California 

Dan Boren, Oklahoma 

John P. Sarbanes, Maryland 

George Miller, California 

Edward J. Markey, Massachusetts 

Peter A. DeFazio, Oregon 

Maurice D. Hinchey, New York 

Patrick J. Kennedy, Rhode Island 

Ron Kind, Wisconsin 

Lois Capps, California 

Jay Inslee, Washington 

Mark Udall, Colorado 

Joe Baca, California 

Hilda L. Solis, California 

Stephanie Herseth Sandlin, South Dakota 

Heath Shuler, North Carolina 

Jim Saxton, New Jersey 

Elton Gallegly, California 

John J. Duncan, Jr., Tennessee 

Wayne T. Gilchrest, Maryland 

Chris Cannon, Utah 

Thomas G. Tancredo, Colorado 

Jeff Flake, Arizona 

Stevan Pearce, New Mexico 

Henry E. Brown, Jr., South Carolina 

Luis G. Fortun ̃ o, Puerto Rico 

Cathy McMorris Rodgers, Washington 

Bobby Jindal, Louisiana 

Louie Gohmert, Texas 

Tom Cole, Oklahoma 

Rob Bishop, Utah 

Bill Shuster, Pennsylvania 

Dean Heller, Nevada 

Bill Sali, Idaho 

Doug Lamborn, Colorado 

Mary Fallin, Oklahoma 

Vacancy 

James H. Zoia, Chief of Staff 

Jeffrey P. Petrich, Chief Counsel 

Lloyd Jones, Republican Staff Director 

Lisa Pittman, Republican Chief Counsel 

SUBCOMMITTEE ON FISHERIES, WILDLIFE AND OCEANS 

MADELEINE Z. BORDALLO, Guam, Chairwoman 

HENRY E. BROWN, JR., South Carolina, Ranking Republican Member 

Dale E. Kildee, Michigan 

Eni F.H. Faleomavaega, American Samoa 

Neil Abercrombie, Hawaii 

Solomon P. Ortiz, Texas 

Frank Pallone, Jr., New Jersey 

Patrick J. Kennedy, Rhode Island 

Ron Kind, Wisconsin 

Lois Capps, California 

Nick J. Rahall, II, West Virginia, ex officio 

Jim Saxton, New Jersey 

Wayne T. Gilchrest, Maryland 

Cathy McMorris Rodgers, Washington 

Bobby Jindal, Louisiana 

Tom Cole, Oklahoma 

Bill Sali, Idaho 

Don Young, Alaska, ex officio 

(III) 

CONTENTS 

Page 

Hearing held on Tuesday, October 16, 2007 .......................................................... 1 

Statement of Members: 

Bordallo, Hon. Madeleine Z., a Delegate in Congress from Guam ............... 1 

Brown, Hon. Henry E., Jr., a Representative in Congress from the State 

of South Carolina .......................................................................................... 2 

Statement of Witnesses: 

Barringer, Victor Clay, II, President and CEO, Coastal Lumber Company, 

on behalf of the Hardwood Federation ........................................................ 21 

Prepared statement of ............................................................................... 22 

Response to questions submitted for the record ..................................... 26 

Blumenauer, Hon. Earl, a Representative in Congress from the State 

of Oregon ....................................................................................................... 3 

Prepared statement of ............................................................................... 5 

Forester, Craig S., Vice President and General Manager, Rex Lumber 

Company, on behalf of the International Wood Products Association 

and America’s Imported Wood Suppliers, Distributors, and Users .......... 38 

Prepared statement of ............................................................................... 40 

Sobeck, Eileen, Deputy Assistant Attorney General, Environment and 

Natural Resources Division, U.S. Department of Justice .......................... 7 

Prepared statement of ............................................................................... 8 

von Bismarck, Alexander, Executive Director, Environmental Investigation Agency, Inc., ........................................................................................... 27 

Prepared statement of ............................................................................... 28 

Wrobleski, Ann, Vice President, Global Government Relations, 

International Paper Company, on behalf of the American Forest & 

Paper Association .......................................................................................... 14 

Prepared statement of ............................................................................... 16 

Response to questions submitted for the record ..................................... 19 

Additional materials supplied: 

Alley, Patrick, Director, Global Witness, Statement submitted for the 

record ............................................................................................................. 58 

America’s Imported Wood Suppliers, Distributors, and Users, Letter 

submitted for the record ............................................................................... 68 

Gardiner, Barry, MP, The Prime Minister’s Special Envoy for Forestry, 

Statement submitted for the record ............................................................ 69 

Gilman, Brad, Robertson, Monagle & Eastaugh, on behalf of Trinity 

Yachts, Inc., Letter submitted for the record ............................................. 72 

Grogan, Dr. James, Yale University School of Forestry & Environmental 

Studies, New Haven, Connecticut, Statement submitted for the record .. 73 

Hershowitz, Ari, Director, Biogems Project, Latin America, Natural 

Resources Defense Council, Statement submitted for the record ............. 75 

Hogan, Jane, Secretary-Treasurer, Ontario Hardwood Co., Inc., Letter 

submitted for the record ............................................................................... 77 

Hutchins, Lawrence Q., President, Quail’s Nest Industries, Letter 

submitted for the record ............................................................................... 78 

Jenkins, Peter T., Director, International Conservation, Defenders of 

Wildlife, Statement submitted for the record ............................................. 79 

World Wildlife Fund and TRAFFIC, Statement submitted for the record .. 80 

(1) 

LEGISLATIVE HEARING ON H.R. 1497: 

LEGAL TIMBER PROTECTION ACT. 

Tuesday, October 16, 2007 

U.S. House of Representatives 

Subcommittee on Fisheries, Wildlife and Oceans 

Committee on Natural Resources 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:05 a.m. in Room 

1324, Longworth House Office Building, Hon. Madeleine Z. 

Bordallo, [Chairwoman of the Subcommittee] presiding. 

Present: Representatives Bordallo, Brown and Sali. 

Also Present: Representative Blumenauer. 

STATEMENT OF THE HONORABLE MADELEINE Z. BORDALLO, 

A REPRESENTATIVE IN CONGRESS FROM GUAM 

Ms. BORDALLO. Good morning, everyone. The hearing will come 

to order. The Subcommittee is meeting today to hear testimony on 

H.R. 1497, the Legal Timber Protection Act, introduced by our colleague from Oregon, Mr. Blumenauer. 

Pursuant to Committee Rule 4[g], the Chairman and the Ranking Minority Member will make opening statements. If any other 

members have statements they will be included in the hearing 

record. 

H.R. 1497, the Legal Timber Protection Act, would amend the 

Lacey Act to make it unlawful to import any plant taken in violation of any foreign law or any product made from such a plant. 

Such restrictions already apply to fish and wildlife harvested in 

violation of foreign laws and have been used successfully by fish 

and wildlife law enforcement agents for decades to curb the importation of fish and wildlife harvested illegally abroad. 

No such enforcement tool exists today for plants and plant products such as timber, however, unless the species is listed under 

CITES. As a result, a wide range of logs harvested illegally can 

currently be imported to the United States, and this is a problem 

for several reasons. 

First, widespread and unsustainable illegal logging activities in 

developing nations throughout Africa, Southeast Asia and Latin 

America and are undermining governance in economic growth and 

development. The World Bank estimates that those countries lose 

more than $10 billion a year in revenues as a result of illegal 

logging. 

Local communities, social structures and conservation efforts are 

also undermined as the forests that indigenous peoples and many 

species of wildlife rely upon for survival are wiped out by illegal 

2 

logging operations. Second, illegal logging in foreign countries also 

impacts the U.S. timber industry by creating unfair competition 

and lowering prices. 

Our witnesses from the Hardwood Federation and the American 

Forest and Paper Association will speak more about this. Yet, as 

the world’s largest wood products consumer and one of the top importers of tropical hardwoods, the United States may inadvertently 

create more incentive for illegal logging to occur to satisfy our 

demand. 

As the Justice Department will testify, existing U.S. laws do not 

adequately address this particular problem. The Department and 

many others believe that amending the Lacey Act, as H.R. 1497 

proposes to do, is a sensible way to provide the necessary additional legal authority to deter the importation of illegally harvested 

foreign timber, protect domestic forest businesses, reduce the incentive for illegal logging in foreign countries, and reduce the impacts 

that such logging is having on the people, the environment and the 

economy in those countries. 

While I recognize that there are some concerns with the legislation today, I do think it is incumbent upon all of us to work together to resolve our differences and move legislation that will be 

an important tool in protecting the communities that are so devastated by illegal logging as well as our own timber industry. So 

I look forward to hearing from our witnesses today, and to working 

with you in the future to achieve progress on this important issue. 

Now, as Chairwoman of the Subcommittee I recognize Mr. 

Brown, the Ranking Republican Member, for any statement he 

may have. 

STATEMENT OF THE HONORABLE HENRY E. BROWN, JR., A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF 

SOUTH CAROLINA 

Mr. BROWN. Thank you, Madam Chairwoman. As owner of a 

small family tree farm in Cordesville, South Carolina, I have the 

highest respect for the men and women in this country who grow, 

harvest, mill, manufacture and sell timber products. Tree growers 

are some of our greatest conservationists. Nevertheless, there isn’t 

one who can defend the illegal logging that may be taking place in 

some foreign countries. 

While the United States and the government of Indonesia signed 

a bilateral agreement last year to fight this indefensible practice 

the regrettably depressed reports continue to indicate the destruction of additional forest lands. These reports indicate that millions 

of wooded acres are being destroyed each year and that U.S. companies are annually losing almost a half of a billion dollars in export opportunities. 

This is a serious problem that will be extraordinarily difficult to 

solve for there are many experts who believe that we already have 

sufficient legal authority to stop and prosecute those who are involved in illegal logging. The authors of H.R. 1497 suggest an 

amendment to the Lacey Act as an alternative solution. 

At the same time, there are reports that wood and wood products 

are being sold in this country below cost. As a free market economy 

we cannot tolerate the dumping of any goods, and it may be time 

3 

for the U.S. industry to file an antidumping petition with the International Trade Commission. However, the subject of today’s hearing is H.R. 1497, the Legal Timber Protection Act. 

During the course of this hearing I look forward to learning why 

the Lacey Act was chosen, why the U.S. Fish and Wildlife Service 

and Department of Agriculture can effectively use this statute to 

stop this practice, if these governmental entities have the resources 

to undertake this effort and why existing Federal laws are inadequate. 

At the same time I want to ensure that U.S. importers who have 

not broken any laws are not required to hire a private investigative 

firm to carefully examine each chain of sales certificate and they 

do not risk civil and criminal penalties including prison for not intimately knowing the laws of every importing timber nation. We 

must include an innocent owner’s legal defense. 

We are all committed to stopping the spread of illegal logging 

into the United States. The issue is what is the best way or approach to accomplish that goal without making criminals of innocent Americans? I also find it ironic that the strongest proponent 

of this bill are the very same organizations who have consistently 

opposed legal logging in this country. 

Thank you, Madam Chairman. I look forward to hearing testimony this morning. 

Ms. BORDALLO. I thank the Ranking Member from South Carolina, Mr. Brown, for his statement. 

I would now like to recognize our very first witness, Congressman Earl Blumenauer from the State of Oregon, the sponsor of this 

important legislation. Thank you very much, Congressman, for 

being here today and for your leadership on this issue. You may 

go ahead. 

STATEMENT OF THE HONORABLE EARL BLUMENAUER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. BLUMENAUER. Thank you, Madam Chair, Ranking Member 

Brown. I deeply appreciate the Subcommittee making time on your 

crowded schedule to deal with this issue, and I strongly agree with 

the sentiments that were expressed in both your opening statements. I think you understand the problem and the opportunity 

that face us here today. 

You know, I was not a member of a community that was actively 

involved in logging, but I became first involved with this issue 

when my son was writing a Master’s degree thesis at the University of Michigan in business on illegal logging in Indonesia. 

I must say that I was shocked at the detail to which he was able 

to document the abuse of this practice and the far reaching impact 

that it had not just on the environment, which we understand for 

threatening endangered species, these people are often involved 

with reckless timber harvest practices, but it undermined the fabric of a struggling democratic society, it took away resources that 

otherwise would have been available to people in that country and 

it actually harmed people in the United States because the honest 

timber brokers had to deal with people who were cheating. 

The people who took the time to understand where the timber 

came from and paid a premium for having it handled properly were 

4 

undercut. It also drove down the prices in this country because we 

had to compete with things in the marketplace for the cheaters. 

It led me on an odyssey here that ends up today with the legislation that is before you, and in fact the amendment that has been 

suggested because since this was first introduced we have been 

working with a wide variety of stakeholders to have legislation that 

meets the needs and meets the tests that both of you raise. 

I think we ought to put in mind that we are talking about not 

just environmental damage overseas and undercutting indigenous 

societies, but it also is a billion dollar hit on the American economy 

for the people who don’t cheat in the forest product industry. There 

will be testimony in a grander scale that we talk about half of the 

world’s forests that have already disappeared and that the illegal 

removal of high value threatened tree species destined for international trade is often the first step toward widespread clearance. 

We could have spent the entire hearing talking about how deforestation accounts for 20 percent of the annual greenhouse gas 

emissions, more than the entire transportation sector. The trade in 

illegally harvested timber undermines democratic governance, 

threatens, as I mentioned, the indigenous populations because the 

cheaters bribe, they use fraud, and in some cases, and you may 

have testimony about this today, extreme violence are part and 

parcel of the illegal traffic in timber. 

I hope that we will be able in the course of this hearing to assuage your concerns that there are any problems associated with 

the Lacey Act in its implementation. The reason that we have introduced this bipartisan legislation is because the simple extension 

of the Lacey Act where we have had a century of experience shows 

that we have taken the least burdensome mechanism to be able to 

equip the U.S. Government to be able to deal meaningfully. 

I think it is clear that there are mechanisms that can be used 

like in the seafood industry where people don’t pay until it is 

cleared by Customs. You will find testimony here today, the vast 

majority of American industry wants to know where that lumber 

comes from. They are playing by the rules, and that simple extension of the Lacey Act is an opportunity for us to have it both ways. 

We can protect the environment, we can protect American jobs 

and we can have something that protects the actors in American 

industry, both foreign products, and lumber and furniture manufacturing, that are playing by the rules. That is why you have the 

unusual array of people that are supporting it. 

You would expect that there might be some of our environmental 

friends from the Sierra Club or the Defenders of Wildlife. I am 

proud of the fact that we have worked with people in the industry, 

the Sustainable Furniture Council, the Society of Foresters, the 

Hardwood Federation, individual companies that care deeply about 

this. 

You also see that there are unions, Teamster, Carpenters, Steel 

Workers, who understand that cheaters overseas undercut American jobs here at home. As I mentioned, Madam Chair and Mr. 

Ranking Member, the work that we have done since the bill was 

first introduced has produced some changes. 

We have been open to the give and take with the environmental 

community, with the industry, and we have a product that is availVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
5 

able, the amended product, that I think will satisfy the needs that 

you both have raised. I would like to conclude by thanking particularly the American Forest and Paper Association, the Hardwood 

Federation and the Environmental Investigation Agency for helping us lead this process. 

I deeply appreciate your courtesy and your interest. I look forward to working with the Subcommittee on putting forth a piece 

of legislation that can have the broad bipartisan support that it 

merits and that we can protect the environment, American jobs 

and we can reinforce people who are playing by the rules. Thank 

you very much. 

Ms. BORDALLO. I thank my colleague, Mr. Blumenauer, the sponsor of this legislation, and I hope that you will be able to stay and 

join us here on the dais for the remainder of the hearing. We invite 

you to come forward. 

I would like to recognize our panel of expert witnesses, this is 

Panel No. 2, to please come forward and take a seat at the witness 

table. And, also, for those standing in the back, if you would like, 

I am inviting you to come up and sit around the second layer here, 

the dais, right around here, if you would. Don’t be shy. Please come 

forward. You don’t want to stand through this entire hearing. 

Please come forward. 

[Pause.] 

Ms. BORDALLO. I wish to thank the witnesses who are with us 

on Panel No. 2 and to introduce them at this time. 

Ms. Eileen Sobeck, Deputy Assistant Attorney General of the Environment and Natural Resources Division at the Department of 

Justice; Ms. Ann Wrobleski, Vice President of International Paper, 

and testifying on behalf of the American Forest and Paper Association; Mr. Victor Barringer, President and CEO of Coastal Lumber 

Company, testifying on behalf of the Hardwood Federation; Mr. Alexander von Bismarck, Executive Director of the Environmental Investigation Agency; and finally, Mr. Craig Forester, Vice President 

and General Manager of Rex Lumber Company, and testifying on 

behalf of the International Wood Products Association. 

I thank you all for being here today, and as Chairwoman I now 

recognize Ms. Sobeck to testify for five minutes. I would note for 

all witnesses that the timing lights on the table will indicate when 

your time has concluded, and we would appreciate your cooperation 

in complying with the limits that have been set as we have many 

witnesses to hear from today. 

Be assured that your full written statement will be submitted for 

the hearing record. Now, I recognize Ms. Sobeck. 

[The prepared statement of Mr. Blumenauer follows:] 

Statement of The Honorable Earl Blumenauer, a Representative in 

Congress from the State of Oregon 

Chairwoman Bordallo and Ranking Member Brown, 

Thank you for holding this hearing on the Legal Timber Protection Act and for 

the opportunity to testify. 

As the experts you have scheduled will testify in greater depth, illegal logging 

threatens some of the world’s richest and most vulnerable forests and cost the U.S. 

forest products industry over $1 billion every year in lost opportunities and lower 

prices. 

Half of the world’s forests have already disappeared, and the illegal removal of 

high value threatened tree species destined for the international trade is often the 

6 

first step leading to forest clearance. The tracks and roads built to access and remove timber become entryways for further illegal cutting, hunting and burning. 

As illegal logging contributes to deforestation, the local and regional climatic systems are dramatically altered and the water balance and dynamics of this fragile 

ecosystem disrupted. The resulting soil erosion induces floods and landslides. In 

fact, deforestation accounts for 20% of annual global greenhouse gas emissions— 

more than the entire global transportation sector. 

Trade in illegally harvested timber undermines democratic governance and 

threatens indigenous populations as bribery, fraud and, in some cases, extreme violence are all part and parcel of illegal timber trafficking. Moreover, it causes losses 

to up to $15 billion for low-income countries. By avoiding export duties, timber royalties and taxes on their profits, companies operating unlawfully are robbing national governments of millions of dollars every year. 

In our domestic industry, since as much as 30% of hardwood lumber and plywood 

traded globally could be of suspicious origin, responsible U.S. companies lose an estimated $460 million in export opportunities every year because of displacement 

caused by illegally harvested timber. On top of that, the annual value of U.S. exports is between $500-$700 million lower due to downward pressure on prices from 

illegally harvested timber. For my home states of Oregon, that means losses of up 

to $150 million each year. 

The United States has a number of tools at our disposal to address the problems 

of illegal logging from capacity building in source countries to verification through 

trade agreements, the use of which are not mutually exclusive. However, we have 

not done enough when it comes to the demand side of the equation. 

Quite simply, illegal logging is timber theft and yet, unlike other kinds of theft, 

our government lacks the authority to prevent these illegal products from entering 

the United States. 

For this reason I, along with Congressmen Weller and Wexler, have introduced 

H.R.1497, the bi-partisan Legal Timber Protection Act, which is designed to prohibit 

trade in illegally harvested timber in the United States. The mechanism by which 

is does so by extending the protections of the Lacey Act to timber and other plants. 

The Lacey Act, which dates back to 1900, prohibits trade in wildlife, fish, and 

plants that have been illegally taken, possessed, transported or sold. In this way, 

Lacey strengthens and supports other federal, state, and foreign laws protecting 

wildlife by making it a separate offense to take, possess, transport, or sell wildlife 

that has been taken in violation of those laws. 

What our legislation means is that, if wood has been stolen from a forest reserve 

in Brazil or taken without paying the appropriate royalties in Indonesia, the U.S. 

government will now have the authority to prevent its importation into the United 

States and punish those responsible. 

This bill is designed to go after the worst of the worst. It asks companies to take 

very basic responsibility that shouldn’t be a problem to any legitimate importers: 

know your sources and be able to document what species from what countries are 

you importing. Civil and criminal liability is limited only to those who don’t take 

due diligence or those who knowingly import illegal wood. This is a free-market solution, helping companies move to more responsible suppliers, instead of requiring 

burdensome inspections or certifications. 

When I first introduced the ‘‘Legal Timber Protection Act,’’ earlier this year, I 

made clear that I was interested in working with all stakeholders to ensure that 

the bill which eventually emerged from the House of Representatives would be as 

effective as possible and not unintentionally harm legitimate businesses. 

Since then, I am pleased that the work of a broad coalition of environmental and 

industry groups has produced a series of clarifications and changes that strengthened the original legislation. I have circulated this new text to other members of 

the House and it has been introduced in the Senate as S.1930. I am also including 

it at the end of my written statement. The changes include clarifications to the 

types of underlying laws that would trigger a Lacey violation and to the documentation requirements. 

I hope that the Legal Timber Protection Act will be soon be marked up by this 

committee or otherwise pass the House. While I remain open to the continued input 

of involved parties, when the bill moves to mark-up (or should otherwise come to 

a vote) I will support the adoption of a substitute amendment containing the text 

agreed to by the environmental and industry groups. 

I believe that our solution gets at the heart of the illegal logging issue without 

getting legal timber trade caught up in the net or putting over-burdensome regulations on those involved in perfectly legitimate international trade. One of the drivers 

of the illegal timber trade is the cost-differential between legal and illegal timber, 

7 

so we’ve tried our hardest to make sure that we don’t impose compliance costs with 

a perverse impact. 

I am particularly pleased by the broad coalition of industry, environmental and 

labor groups who both support this effort and have put countless hours into a this 

process, in order to ensure that our legislation would be as effective as possible. It 

is indeed a coalition of strange bedfellows, but by including domestic lumber producers, importers, organized labor, and the environmental community, we feel confident that we have a solution that meets the needs of all those who are involved 

in legitimate and legal trade. I would like to specifically thank the American Forest 

& Paper Association, the Hardwood Federation, and the Environmental Investigation Agency for leading this process. 

I look forward to exploring the issues in this bill with you in greater detail during 

the course of this hearing and for your support to move this important bill forward. 

STATEMENT OF EILEEN SOBECK, DEPUTY ASSISTANT 

ATTORNEY GENERAL, ENVIRONMENT AND NATURAL 

RESOURCES DIVISION, U.S. DEPARTMENT OF JUSTICE 

Ms. SOBECK. Thank you, Chairwoman Bordallo, Representative 

Brown, members of the Subcommittee. Thank you for inviting the 

Department of Justice to testify about H.R. 1497, the Legal Timber 

Protection Act, which would amend the Lacey Act to extend its protection to plants including timber illegally harvested outside of the 

United States. 

The administration supports the general approach of this legislation and would be pleased to have this added authority to address 

the problem of importation of illegal timber and timber products so 

as to further implement the President’s initiative on illegal logging. 

I am a Deputy Assistant Attorney General of the Environment 

and Natural Resources Division of the U.S. Department of Justice. 

The Environment Division is responsible for representing the 

United States in litigation involving environmental and natural resources statutes including enforcement cases against individuals or 

entities that violate those statutes. 

Among the statutes that the division is responsible for enforcing 

is the Lacey Act. We work closely with several other Federal agencies in enforcing the Lacey Act including the Department of the Interior’s Fish and Wildlife Service, the Department of Commerce, 

Department of Agriculture and Department of Homeland Security. 

First enacted in 1900, the Lacey Act is the United States’ first 

major national wildlife protection statute. The current version of 

the Lacey Act, which includes significant amendments made in 

1981 and 1988, is an anti-trafficking statute and provides broad 

protection with respect to fish and wildlife. 

A unique feature of the Lacey Act is that it allows us to prosecute persons who import wildlife into the United States that has 

been taken, possessed, transported or sold in violation of a foreign 

law or regulation. The Lacey Act’s assimilation of foreign laws is 

not an effort to police other countries. 

Rather, our assimilation of such laws is designed to reduce demand in the United States for species poached in foreign countries 

and to encourage international cooperation and mutual reciprocal 

enforcement efforts. While the Environment Division has brought 

many successful cases to prosecute violations of the Lacey Act’s 

provisions protecting fish and wildlife, in its current form the Act 

provides only very limited coverage and limited enforcement tools 

with respect to timber or other plants. 

8 

As you have already heard, illegal trafficking in timber and timber products has been demonstrated to be a major problem for both 

domestic and international interests. Illegal logging destroys forest 

ecosystems, deprives national governments and local communities 

of needed revenues, undercuts prices of legally harvested forest 

products on the world market, finances regional conflict and acts 

as a disincentive to sustainable forest management. 

The administration through the President’s initiative against illegal logging has made it a priority for the United States to curb 

trafficking and illegally logged timber. Under President Bush’s direction to reduce illegal logging abroad the administration has been 

evaluating existing domestic laws to determine their adequacy as 

tools to stem this importation of illegally harvested foreign timber 

and timber products made from illegal timber. 

Based on our review, we believe that existing U.S. laws do not 

adequately address the problem. As you have noted, we believe 

that amending the Lacey Act is a sensible way to provide the necessary additional legal authority that would serve to deter the importation of illegally harvested foreign timber, protect domestic 

forest businesses and advance the President’s initiative against illegal logging. 

While we support the general approach of amending the Lacey 

Act, the administration has identified a few concerns with the bill. 

For example, under the proposed legislation the definition of plant 

is very broad. It could indeed encompass items such as wooden 

shipping containers and packing materials made from paper and 

cardboard, and I think the focus of our concerns is on timber and 

timber products. 

But we look forward to continuing to work with the committee 

and with all the others who are testifying here today in what has 

already been a cooperative and collegial effort to come up with a 

solution that will address a problem that we all acknowledge needs 

to be addressed. I welcome the opportunity to be here today. 

Ms. BORDALLO. Thank you very much, Ms. Sobeck. Now, I recognize Ms. Wrobleski to testify for five minutes. 

[The prepared statement of Ms. Sobeck follows:] 

Statement of Eileen Sobeck, Deputy Assistant Attorney General, 

Environment and Natural Resources Division, U.S. Department of Justice 

INTRODUCTION 

Chairwoman Bordallo, Representative Brown, and Members of the Subcommittee, 

thank you for inviting the Department of Justice to testify about H.R. 1497, the 

‘‘Legal Timber Protection Act,’’ a Bill to amend the Lacey Act to extend its protections to plants, including timber illegally harvested outside of the United States. 

I am a Deputy Assistant Attorney General of the Environment and Natural Resources Division (Environment Division), U.S. Department of Justice. The Environment Division is responsible for representing the United States in litigation involving environmental and natural resource statutes, including enforcement cases 

against individuals or entities that violate those statutes. The Environment Division 

has a docket of about 7,000 pending cases or matters, with cases in nearly every 

judicial district in the nation. We litigate cases arising under more than 70 different 

environmental and natural resources statutes. 

Among the environmental statutes that the Environment Division is responsible 

for enforcing is the Lacey Act, discussed in more detail below. While the focus of 

this testimony is the Environment Division’s role in criminal prosecution of Lacey 

Act violations, I should add that a number of other federal agencies are involved 

in the implementation of the Lacey Act, including the Department of the Interior’s 

9 

U.S. Fish and Wildlife Service, the Department of Commerce, the Department of Agriculture, and the Department of Homeland Security. 

While the Environment Division has brought a number of cases to prosecute violations of the Lacey Act’s provisions protecting fish and wildlife, in its current form 

the Act provides limited coverage and limited enforcement tools with respect to timber or other plants. 

As I explain in greater detail herein, illegal trafficking in timber and timber products has been demonstrated to be a major problem for both domestic and international interests. The Administration has made it a priority for the United States 

to do its part to try to curb trafficking in illegally logged timber. Under President 

Bush’s direction to reduce illegal logging, the Administration has been evaluating 

existing domestic laws to determine their adequacy as tools to stem the import of 

illegally harvested foreign timber and timber products. Penalties on illegal imports 

applied by the U.S. would provide additional deterrence and additional protection 

to forest ecosystems overseas and U.S. forest businesses. Based on our review, we 

believe that existing U.S. laws do not adequately address this problem. We believe 

that amending the Lacey Act is a sensible way to provide the necessary additional 

legal authority that deters importation of illegally harvested foreign timber, protects 

domestic forest businesses, and advances the President’s Initiative Against Illegal 

Logging. 

We appreciate and applaud the cooperative and collegial efforts of many of those 

testifying today and others in the timber industry and conservation community regarding this legislative issue. While we support the general approach of amending 

the Lacey Act, the Administration has identified a number of specific concerns with 

the language in H.R. 1497. We believe that those concerns, discussed further below, 

warrant further discussion. 

PRESIDENT’S INITIATIVE AGAINST ILLEGAL LOGGING 

Our support for greater protections and enforcement tools with respect to plants, 

including timber, is fully consistent with the Administration’s efforts to combat illegal logging internationally. In February 2002, President George W. Bush directed 

the Secretary of State to develop an initiative against illegal logging. The following 

year then Secretary of State Colin Powell launched the President’s Initiative 

Against Illegal Logging (the President’s Initiative, or PIAIL) as a framework for action to assist developing countries to combat illegal logging, the sale and export of 

illegally harvested timber, and corruption in the international forest sector. By illegal logging, we are referring to timber that is harvested, transported, processed, or 

sold in contravention of a country’s laws. Illegal logging destroys forest ecosystems, 

deprives national governments and local communities of needed revenues, undercuts 

prices of legally harvested forest products on the world market, finances regional 

conflict, and acts as a disincentive to sustainable forest management. International 

trade in illegally harvested timber creates economic incentives for those who violate 

the law, and thereby increases the magnitude of the problem. 

The World Bank [see ‘‘Strengthening Forest Law Enforcement and Governance, 

Report No. 36638-GLB, August 2006] estimated in 2006 that timber harvested illegally worldwide on public lands alone results in lost assets and revenue in excess 

of $10 billion annually in developing countries. That money represents funds that 

could otherwise be used by governments in developing countries, where much of the 

illegal harvesting occurs, to meet the basic needs of their people, better manage 

their forests and other natural resources, and reduce their international debt. In addition to the ecological damages associated with illegal logging, trade in illegal timber also hurts U.S. wood products companies. 

The President’s Initiative emphasizes identifying and reducing threats to protected areas and other high conservation value forests from illegal logging through 

four key strategies: 

• Good Governance—Building country capacity to establish and strengthen 

legal regimes and enforcement of laws affecting forest management, especially 

those aimed at illegal logging; 

• Community-Based Actions—Enhancing community involvement in forest 

governance and related wildlife issues; 

• Technology Transfer—Developing integrated monitoring systems and building in-country capacity to monitor forest conditions and activities and compliance with laws, including using remote sensing and ground-based technologies 

to monitor changes in forest conditions; and 

• Harnessing Market Forces—Promoting good business practices, transparent 

markets, and legal trade, including in-country capacity to implement obligations 

under the Convention on International Trade in Endangered Species of Wild 

Fauna and Flora (CITES). 

10 

1 16 U.S.C. § 3372 (a) 

2 United States v. Santillan, 243 F.3d 1125 (9th Cir. 2001); United States v. Todd, 735 F.2d 

146 (5th Cir. 1984). 

Several federal departments and agencies, including the Department of Justice, as 

well as U.S.-based international organizations and intergovernmental agencies, have 

been involved in international activities to implement the President’s Initiative 

Against Illegal Logging. The President’s Initiative has included actions in Africa, 

Asia, and Latin America, as well as global activities beyond particular countries’ 

borders. While I will not discuss all of these activities, let me describe some of the 

activities in which the Department of Justice has recently been involved. 

In November 2006, the United States Trade Representative, Susan C. Schwab, 

signed a Memorandum of Understanding with the Minister of Trade for the Government of the Republic of Indonesia on Combating Illegal Logging and Associated 

Trade. The Agreement is designed to promote forest conservation by combating 

trade in illegal timber, and to help ensure that Indonesia’s legally produced timber 

and wood products continue to have access to markets in the United States and 

elsewhere. Attorneys from the Environment Division have actively participated in 

the bilateral working group established under the Agreement to facilitate joint efforts by the United States and Indonesia to combat illegal logging and associated 

trade. In addition, the Environment Division will apply a portion of the $1 million 

that the United States has committed to fund projects under the Agreement to assist in training judges and prosecutors in Indonesia on methods of prosecuting 

crimes involving illegal timber and timber products. The workshops will focus on investigation of illegally harvested timber and related ‘‘forest’’ crimes in Indonesia, 

general crimes like money laundering applicable to illegal logging, gathering evidence, and successful prosecution of such cases. The Environment Division already 

provides training to judges and prosecutors in countries that are participants in the 

Association of Southeast Asian Nations - Wildlife Enforcement Network (ASEANWEN) on methods of prosecuting crimes involving trade in illegally taken wildlife 

and wildlife parts. This training is conducted in conjunction with the ASEAN-WEN 

Support Group, the U.S. Fish and Wildlife Service and several non-governmental organizations. 

THE LACEY ACT—BROAD APPLICABILITY TO FISH AND WILDLIFE 

As I stated previously, the Lacey Act is a key statutory tool relied on by federal 

prosecutors in cases involving illegal trafficking in fish and wildlife. First enacted 

in 1900, the Lacey Act is the United States’ first major national wildlife protection 

statute. The current version of the Lacey Act, which includes significant amendments made in 1981 and 1988, is an anti-trafficking statute that provides broad protections with respect to fish and wildlife. The Lacey Act applies to all ‘‘wild’’ (i.e., 

non-domesticated) animals from mammals to invertebrates, whether alive or dead. 

It also applies to any animal part, product, egg, or offspring, even if bred in captivity. 16 U.S.C. § 3371(a). The Act’s prohibitions have two ‘‘prongs’’: provisions relating to wildlife trafficking, both domestic and transnational; and provisions relating to false labeling, which proscribe making or submitting any false record, account, label for, or false identification of wildlife. 

The first ‘‘prong’’ of the Lacey Act makes it unlawful (1) to import, export, transport, sell, receive, acquire, or purchase any fish or wildlife already taken (i.e., captured, killed or collected), possessed, transported, or sold, (2) in violation of state, 

federal, American Indian tribal, or foreign laws or regulations that are fish or wildlife-related (the so-called ‘‘underlying law’’ or ‘‘predicate offense’’). 1 Together, these 

are referred to as the ‘‘two steps’’ necessary for an offense under the Lacey Act. A 

two-tiered penalty scheme exists, creating both misdemeanor and felony offenses, 

distinguished by the defendant’s knowledge of the underlying law violations. 16 

U.S.C. § 3373(d)(1) and (2). For a Lacey Act violation to be a felony, the defendant 

must ‘‘know’’ about, or be generally aware of, the illegal nature of the wildlife, but 

not necessarily the specific law violated. 2 A misdemeanor requires that the defendant ‘‘in the exercise of due care’’ should have known the facts constituting the underlying law violation. Felony violations, in addition to a ‘‘knowing’’ scienter or mens 

rea requirement, require either proof that the defendant ‘‘knowingly’’ imported or 

exported wildlife, or ‘‘knowingly’’ engaged in conduct during the offense that involved the sale or purchase of, the offer for sale or purchase of, or the intent to sell 

or purchase wildlife with a market value over $350. 

The second ‘‘prong’’ of the Lacey Act prohibits the making or submitting of any 

false record, account, label for, or identification of any wildlife transported or intended to be transported in interstate or foreign commerce, or imported, exported, 

transported, sold, purchased, or received from any foreign country. A violation of 

11 

3 16 U.S.C. § 3371(d). 

4 United States v. Lee, 937 F.2d 1388 (9th Cir. 1991). 

5 United States v.144,774 pounds of Blue King Crab, 410 F.3d 1131 (9th Cir. 2005). 

6S. Rep. No. 91-526, 91st Cong., 1st Sess. 12 (1969), reprinted in 1969 U.S.C.C.A.N. 1425. 

7 16 U.S.C. § 3372(a)(2)(B). However, no similar impediment prevents using the false labeling 

provisions of 16 U.S.C. § 3372(d) for violations involving plants. 

these provisions may be prosecuted as either a misdemeanor or felony, depending 

upon the nature of the offense, paralleling trafficking offenses. 

One unique feature of the Lacey Act is that it allows the incorporation of foreign 

law as an underlying law or predicate offense that ‘‘triggers’’ a Lacey Act violation. 

Not all foreign laws, however, can serve as a trigger to a Lacey Act offense—only 

foreign laws related to fish or wildlife. 3 A person who imports wildlife into the 

United States that has been taken, possessed, transported, or sold in violation of 

a foreign law or regulation can be prosecuted in the United States for a Lacey Act 

offense. The law or regulation must be of general applicability, but may be a local, 

provincial, or national law. The defendant need not be the one who violated the foreign law; the wildlife itself becomes ‘‘tainted’’ even if someone else commits the foreign law violation. However, the defendant must know or, in the exercise of due 

care, should know, about its illegal nature. 

This assimilation of foreign law under the Lacey Act is illustrated by a case involving the prosecution of Taiwanese nationals for attempting to import 500 metric 

tons of salmon that was taken in violation of a Taiwanese law that they themselves 

had not violated, but which they nonetheless knew had been violated when the fish 

were harvested. 4 In another example, over 144,000 pounds of blue king crab was 

seized and forfeited when it was imported after being harvested and transported in 

violation of Russian law. 5

The Lacey’s Act’s assimilation of foreign laws is not an effort to police other countries. Rather, our assimilation of such laws potentially reduces demand in the U.S. 

for species poached in foreign countries. Assimilation of foreign laws also encourages 

international cooperation and mutual reciprocal enforcement efforts. The Senate Report issued in connection with the 1969 Amendments to the Lacey Act described 

what assimilation of foreign law accomplishes: 

On the international level...[b]y prohibiting the sale in the United States 

of wildlife protected by a foreign government, the demand [in the U.S.] for 

poached wildlife from that country will be sharply reduced. In addition, 

however, such a law is also designed to promote reciprocity. If we assist a 

foreign country in enforcing its conservation laws by closing our market to 

wildlife taken illegally in that country, they may in turn help to enforce 

conservation laws of the United States by prohibiting the sale within their 

borders of wildlife taken illegally within the United States. 6

The Lacey Act occupies a central place within the framework of federal wildlife 

laws and is a key enforcement tool for several additional reasons. First, the Lacey 

Act applies to a wider array of wildlife than any other single protection law, including the Endangered Species Act. Second, it has the stiffest potential penalties. 

Third, its prohibitions have a greater reach, including offenses that start out in foreign countries as violations of the laws of another country. 

THE LACEY ACT IS CURRENTLY OF NARROW APPLICABILITY TO 

PLANTS, INCLUDING TIMBER 

Although the Lacey Act provides broad authority and strong enforcement tools to 

combat transnational wildlife trafficking, it does not currently apply to international 

traffickers of plants, including timber or associated wood products derived from illegal logging. The prohibitions of the Lacey Act that assimilate foreign law were not 

written to include foreign laws relating to plants, only fish and wildlife-related 

laws. 7 Plants were added to the Lacey Act enforcement scheme in 1981 to improve 

the effectiveness of existing State laws by providing a federal enforcement tool to 

crack down on those who blatantly violate State laws designed to conserve plants 

threatened with extinction. The 1981 amendments also apply to U.S. native plants 

that are listed under CITES. However, the provisions with respect to plants are 

more limited than those for wildlife. While the Lacey Act prohibits the taking, possession, transport, or sale of any fish or wildlife in violation of any State or foreign 

law, it omits the assimilation of foreign law for such acts with respect to plants. The 

Act prohibits only the taking, possession, transport, or sale of plants in violation of 

State law. 

Just as the Lacey Act’s plant enforcement reach was deliberately limited, the statute’s definition of plant was likewise narrowly circumscribed. The Lacey Act defines 

‘‘plant’’ and ‘‘plants’’ as ‘‘any wild member of the plant kingdom, including roots, 

12 

8 CITES is an international agreement which entered into force in July 1975 and to which 

the United States and 171 other countries are parties. The aim of CITES is to ensure that international trade in specimens of wild animals and plants does not threaten their survival. CITES 

currently accords varying degrees of protection to approximately 30,000 species of animals and 

plants. 9 16 U.S.C. § 3371(f) 

0 0One court ruled that American ginseng, listed in Appendix II of CITES, was a common food 

crop or cultivar and not protected by the Lacey Act. United States v. McCullough, 891 F. Supp. 

422 (N.D. Ohio 1995). 11The laws reviewed included those related to transportation of stolen goods in foreign commerce (18 U.S.C. 2314); false statement crimes (18 U.S.C. 542, 1001); smuggling of goods (18 

U.S.C. 545); and money laundering (18 U.S.C. 1956 and 1957). 12 By international wildlife and plant trade we refer to the import, export and re-export of live 

and dead animals, fish and plants, and their parts and derivatives). 

seeds, and other parts thereof (but excluding common food crops and cultivars) 

which is indigenous to any State and which is either (A) listed on an appendix to 

the Convention on International Trade in Endangered Species of Wild Fauna and 

Flora (CITES), 8 or (B) listed pursuant to any State law that provides for the conservation of species threatened with extinction.’’ 9 (emphasis added). The Lacey Act 

only reaches plants native to the United States which are listed in one of the three 

appendices to CITES or protected by a State law that conserves species threatened 

with extinction. Listing of a plant under CITES does not bring a plant under the 

coverage of the Lacey Act if it is not native to the United States. Native plants listed under CITES can also be excluded from coverage if they are deemed to be food 

crops or cultivars under the definition of ‘‘plant.’’ 0

INTERDICTION EFFORTS AGAINST TRAFFICKING IN ILLEGALLY 

LOGGED TIMBER ARE FRUSTRATED BY THE ABSENCE OF BROADBASED CRIMINAL SANCTIONS 

Absent protection afforded to various tropical timber species under CITES, it appears that no violation of U.S. law occurs upon the importation of stolen or illegally 

harvested logs. In other words, even if both the importer and federal enforcement 

officials know that the logs were taken illegally, so long as the documents submitted 

to the United States upon importation are complete, truthful and not false, no actionable criminal violation has occurred. 

The Department has reviewed the federal criminal code to determine what laws 

might apply to such conduct. The Department reviewed a number of criminal provisions in Title 18 of the United States Code and concluded, based on this review, that 

none of those provisions could be applied to interdict and prosecute our hypothetical 

timber trafficker. 11 The only possible exception to this conclusion is under the unlikely circumstance that a foreign country treats unlawfully harvested timber as stolen goods or property and has the evidence to prove it, allowing prosecutors here 

to prosecute the subsequent transportation of the stolen timber in foreign commerce 

to the U.S. 

One provision of Title 18 of the U.S. Code that is particularly useful in prosecuting wildlife traffickers, the smuggling statute at 18 U.S.C. § 545, has limited 

utility in prosecuting timber traffickers. There are two types of smuggling offenses 

set forth in the statute that are commonly used in cases involving wildlife. But 

those two types of smuggling offenses have limited applicability to plants because 

the offenses require a knowing importation ‘‘contrary to law.’’ That term has in general been determined by the courts to mean contrary to United States law. Therefore, while a case involving wildlife trafficking can be prosecuted as a smuggling offense if the importation is contrary to either CITES or in rare instances the broad 

provisions of the Lacey Act itself applicable to wildlife, the narrow provisions of the 

Lacey Act applicable to plants and the relatively few timber species listed under 

CITES as described below limit its broader use against illegal logging and other illegal plant trade. In the Department’s review of criminal statutes that we could possibly use to prosecute the importer of illegal timber, we also looked at offenses potentially chargeable under other titles of the U.S. Code, including conservation statutes, plant pest statutes, and cultural property provisions. We concluded that only 

if the importer acts in a manner violating CITES, which would enable us to include 

the violation as a component of a smuggling charge, would we have a legal mechanism by which to bring criminal charges. 

CITES seeks to regulate the international wildlife and plant trade 12 by listing 

species in one of three ‘‘Appendices,’’ based on the degree to which a species is at 

threat of extinction and in international trade. CITES regulates trade between countries, imposing the greatest restrictions on species found in Appendix I, and the 

least on those in Appendix III. 

13 

13 Brazilian rosewood, brazilwood, bigleaf mahogany and ramin are some of the timber species 

listed under CITES. A number of other tree species are listed. Not all of the tree species listed 

are traded as timber; some are traded as medicinal or horticultural specimens. See plant listings 

under CITES appendices at www.cites.org. 14For example, an Appendix-II listing requires the CITES Parties to agree that the species, 

although not necessarily currently threatened with extinction, may become so unless international trade is subject to strict regulation in order to avoid utilization incompatible with the 

species’ survival. CITES, Art. II. 15The Act designates the Secretary of the Interior and the United States Fish and Wildlife 

Service to carry out its functions and further the Secretary of Agriculture with respect to enforcement of the CITES provisions pertaining to the importation or exportation of terrestrial 

plants, and prescribes criminal penalties with up to one (1) year imprisonment and $100,000 

fine for an individual, and $200,000 for an organization, for anyone convicted of ‘‘knowingly’’ importing or exporting CITES-listed specimens contrary to CITES, or possessing CITES-listed 

specimens traded in violation of the treaty. 16 U.S.C. §§ 1532(15); 1537a; 1538(c)(1), 1540(b)(1). 

See United States v. Winnie, 97 F.3d 975 (7th Cir. 1996) (possession of cheetah imported in violation of CITES illegal, even if imported outside of the statute of limitations). While the penalties for CITES offenses themselves are low, as noted earlier a CITES violation can support 

a felony smuggling charge. 16S. Rep. No. 97-123, 97st Cong., 1st Sess. 1 (1981), reprinted in 1981 U.S.C.C.A.N. 1748. 17 Id. 

CITES protections are implemented through a system of permits and certificates 

issued by both member and non-member countries that must accompany lawful 

shipments of listed plants or wildlife. The type of permit or certificate required, and 

the restrictions placed on the CITES shipment, depend on the particular appendix 

in which a species is listed: Appendix I, II, or III. CITES, Arts. III, IV, V. Appendix 

I is the most restrictive listing category and bans wildlife trade in listed species between countries for commercial purposes. Appendix II permits commercial trade 

under permit for species not yet considered in danger of extinction, as long as the 

trade is not detrimental to the survival of the species and the species were obtained 

in accordance with national law. Appendix III includes species identified by a Party 

as being subject to regulation within its jurisdiction and needing cooperation of 

other Parties in the control of the trade. CITES Art. V. 

While CITES may provide a basis for pursuing a smuggling prosecution with respect to timber, it provides only a very limited basis for prosecuting cases involving 

the illegal-timber trade due to the fact that only a few of the many species subject 

to illegal logging and trafficking are listed under CITES. 13 Furthermore, the threshold that must be met for listing species under CITES is high and decisions to list 

species are frequently contentious. 14 Moreover, many timber species in international 

trade simply do not meet the criteria for listing under CITES. Consequently, even 

the listing of a species in a CITES appendix is no guarantee of effective international trade regulation by the member countries. In the United States, the Endangered Species Act is the statute by which we implement our CITES obligations. 15 To date there is not one reported successful criminal prosecution in the U.S. 

involving CITES-listed timber. The only reported civil case arising from U.S. efforts 

to apply the CITES restrictions to illegal logging is Castlewood Products, L.L.C. v. 

Norton, 365 F.3d 1076 (D.D.C. 2004), a case in which the court upheld the detention 

by U.S. officials of a number of bigleaf mahogany shipments from Brazil where U.S. 

officials doubted the validity of the accompanying Brazilian CITES export permits. 

Given that CITES currently regulates only a small number of timber species, it is 

not sufficient to cover the broader problem of illegal logging and timber trafficking. 

THE DEPARTMENT OF JUSTICE SUPPORTS LEGISLATION TO STOP ILLEGAL LOGGING AND TIMBER TRAFFICKING 

In 1981, when Congress overhauled the Lacey Act, it was prompted to do so by 

evidence that had been ‘‘uncovered of massive illegal [and highly profitable] trade 

in fish and wildlife...handled by well organized large volume operations run by professional criminals [who] utilize ‘‘white collar’’ crime tactics such as multiple 

invoicing and other fraudulent documentation to carry out and conceal their illicit 

activities.’’ 16 Congress further warned that ‘‘the illegal wildlife trade has grim environmental consequences. It threatens the survival of many species...we value because of their commercial values...and the economic consequences of this trade 

are...severe.’’ 17

Almost identical language could be used today to describe the global problem of 

illegal logging and timber trafficking and the need for stronger enforcement tools 

to address it. Worldwide, illegal logging is estimated to be a multi-billion dollar industry activity. The adverse environmental consequences of illegal logging, including 

destruction of forest ecosystems and critical wildlife habitat, are enormous. Just as 

Congress recognized in 1981 that greater enforcement tools needed to be added to 

14 

the Lacey Act to combat illegal trade in wildlife, stronger enforcement tools should 

now be added to address trade in illegally-obtained timber. 

In general, the Administration supports amending the Lacey Act to provide enforcement agencies with adequate and clearly defined legal tools to address illegal 

logging and trafficking of foreign timber. Addition of such enforcement tools to address trafficking in illegal timber is consistent with the President’s Initiative and 

would enhance our ability to take steps against the multi-billion dollar trade in illegally logged timber. Such an amendment would support international good governance; it would provide a tool for effective enforcement in our domestic markets, 

thereby reducing demand for illegal timber; and it would encourage international 

cooperation and reciprocal enforcement efforts. 

H.R. 1497, THE LEGAL TIMBER PROTECTION ACT 

The Administration has, however, identified a number of concerns with the language in H.R. 1497 and issues that must be addressed. First, under the proposed 

legislation, the definition of ‘‘plant’’ is very broad; it could, for example, encompass 

items such as wooden shipping containers and packing materials such as paper and 

cardboard. We believe the scope should include timber and timber products, because 

there is a clear need for additional enforcement tools to address trade in illegal timber and timber products. However, we believe items like shipping containers and 

packing materials should not be included in the definition of ‘‘plant.’’ We request 

that the Committee continue to work with the Administration on the scope of the 

term ‘‘plant’’ in the Bill. 

In addition, by expanding the current conservation scope of the Lacey Act, 

H.R. 1497 places additional responsibilities on the Federal agencies that share responsibility for policing international plant trade in the United States. While meeting these responsibilities will require agency resources, we note that the President’s 

FY 2008 budget, which was proposed some time ago, does not provide funds to responsible agencies to implement this legislation. 

Furthermore, H.R. 1497 does not currently specify which government agency will 

lead implementation of the legislation’s many operational tasks, such as development of regulations, inspection of shipments and collection of declaration information, reporting, and investigation of significant violations. We also want to ensure 

that deadlines for executive branch agencies to finalize regulations are realistic and 

based on time frames that will allow the agency to conduct the appropriate analyses, develop and propose suitable regulatory language, conduct the appropriate 

analyses required by law for such regulations, provide for adequate public notice 

and comment, and finalize the regulations. We thus recommend that the Committee 

consult with the affected agencies on appropriate deadlines. 

H.R. 1497 also includes provisions that may raise certain complexities in implementation and enforcement. For example, prohibitions based on failure to pay ‘‘royalties, taxes, or stumpage fees’’ could raise complex enforcement issues. We also 

foresee questions surrounding declaration requirements, such as whether declarations will be required for all paper and paper products in international trade; which 

Federal agency will collect and analyze declaration information; and how that information will be processed. 

Notwithstanding these various issues that must be addressed, we are pleased that 

we all share the goal of finding an effective but prudent means of fighting the illegal 

trafficking in foreign timber and timber products. We look forward to working with 

the Committee to ensure the clarity and effectiveness of any potential amendments 

to the Lacey Act. 

CONCLUSION 

Thank you for the opportunity to appear before the Subcommittee today to discuss 

this important topic. I would be happy to answer any questions that you may have 

about my testimony. 

STATEMENT OF ANN WROBLESKI, VICE PRESIDENT, PUBLIC 

AFFAIRS, INTERNATIONAL PAPER COMPANY, ON BEHALF OF 

THE AMERICAN FOREST & PAPER ASSOCIATION 

Ms. WROBLESKI. Thank you, Madam Chairman, Mr. Brown. Good 

morning. I am Ann Wrobleski, Vice President, Global Government 

Relations for International Paper. I served previously as Vice President International at the American Forest and Paper Association. 

15 

I appreciate the opportunity to present the views of the Association 

this morning. 

Let me first tell you about AF&PA. It is the national association 

for the forest, pulp, paper, paper board and wood products industry. The industry accounts for about six percent of total U.S. manufacturing output, employs more than a million workers and ranks 

among the top 10 manufacturing employers in 42 states with an estimated payroll of over $50 billion. Sales of forest and paper products top $230 billion. AF&PA and 

its 200 member companies and associations have long been keenly 

interested in illegal logging. After recent discussions with a wide 

range of stakeholders we believe there is a legislative path forward 

that will be affective in combating global illegal logging. 

I want to discuss three aspects of the problem: economic, social, 

reputational. The economic costs of global illegal logging are hard 

to estimate, and in fact, the only widely accepted credible study 

was published by AF&PA in 2004. The study found that illegal logging likely depresses prices for legally harvested timber between 

seven and 16 percent. 

The study estimated that the value of U.S. wood exports could increase by almost a half a billion dollars, $460 million, annually 

if there were no illegally harvested wood in the global marketplace. 

The social, environmental and political costs of illegal logging are 

less obvious but perhaps more destructive. 

Illegal logging takes place generally in very poor countries or regions. Illegal logging goes hand in hand with corruption among 

government, military, law enforcement and erodes public confidence in what are likely to be already weak institutions. Illegal 

logging is a significant contributing factor to deforestation, to loss 

of biodiversity and to land degradation. 

Finally, the forest products industry sees illegal logging as a 

reputational issue. Every time an acre of land is illegally harvested 

in Indonesia, in Russia, in Brazil, there is the possibility that the 

public will react negatively to our industry. For these reasons, 

AF&PA has cooperated with the U.S. Government and environmental stakeholders in several programs in an effort to combat illegal logging. 

In 2003 we joined with the U.S. Department of State, Conservation International and others to launch the President’s initiative 

against illegal logging. In 2004 we published the landmark report 

on the economic consequences of illegal logging. In 2005 AF&PA 

joined with Conservation International to create the Alliance to 

Combat Illegal Logging, a partnership to help halt timber operations in national parks in Indonesia. 

In 2006 we applauded the announcement that the U.S. had 

signed an MOU with Indonesia to combat illegal logging. We are 

very supportive of the U.S. Government committing $1 million to 

finance on the ground efforts in Indonesia. This year the industry 

commends the administration for including illegal logging as a 

topic of discussion with the Chinese in the strategic economic SED 

dialogue talks. 

Given all of these initiatives and activities we have watched the 

debate over expansion of the Lacey Act with keen interest. We applaud the Congress, particularly Mr. Blumenauer and Senator 

16 

Wyden, for their work in this field. We have endorsed S-1930, the 

Combat Illegal Logging Act of 2007, introduced in July by Senator 

Wyden, and we would endorse a bill in the House using Mr. 

Blumenauer’s substitute language which utilizes the approach 

taken in the Wyden legislation. 

The Wyden-Blumenauer approach is carefully crafted to address 

harvesting that is in clear violation of specific foreign and state 

laws designed to protect forests from criminal activity. While the 

bill does require companies to record specific information it does 

not require a costly chain of custody regime. 

AF&PA and its member companies welcome action that raises 

the risks for the illegal trade without harming the legal trade. This 

is an important step toward leveling a playing field that is currently stacked against U.S. producers that are committed to trading in legal forest products. Ultimately, effective action must be 

taken where the activity takes place. 

But expansion of the Lacey Act to include timber harvested illegally overseas sends a strong signal to governments, forest products producers, importers and exporters around the world that the 

U.S. Government, the forest products industry and the environmental community recognize the problem and are prepared to take 

corrective action. 

Thank you, Madam Chairman. I look forward to your questions. 

Ms. BORDALLO. Thank you, Ms. Wrobleski. Now, I would like to 

recognize Mr. Barringer. 

[The prepared statement of Ms. Wrobleski follows:] 

Statement of Ann Wrobleski, Vice President, Global Government Relations, 

International Paper Company, on Behalf of the American Forest & Paper 

Association 

I appreciate this opportunity to present the views of the American Forest & Paper 

Association and its members regarding H.R. 1497—the Legal Timber Protection 

Act. AF&PA is the national trade association of the forest, pulp, paper, paperboard 

and wood products industry. The industry accounts for approximately 6 percent of 

the total U.S. manufacturing output, employs more than a million people, and ranks 

among the top 10 manufacturing employers in 42 states with an estimated payroll 

exceeding $50 billion. Sales of the paper and forest products industry top $230 billion annually in the U.S. and export markets. The more than 200 companies and 

related associations AF&PA represents have a strong interest in assuring that international trade in forest products is based on compliance with the laws of all countries. We have held extensive discussions with stakeholders on this issue and believe an effective approach can be developed to assist in the world-wide effort to control this environmental and economic threat. 

What is illegal logging? 

First, it is important to define what we are talking about. Illegal logging and illegal trade in forest products is a complex set of interrelated legal, political, social 

and economic issues. The term ‘‘illegal logging’’ clearly signifies legal abuses, but the 

types of activities considered to be ‘‘illegal’’ that are described in various published 

and web-posted reports are wide-ranging. It is important to note that there is no 

international definition of illegal logging. Yet, there are some kinds of abuses that, 

in the context of policy and trade discussions, rise to a level of both domestic and 

international significance. These activities involve organized efforts to outright steal 

trees or otherwise ignore a country’s efforts to control and preserve its nation’s forests, such as harvesting without authority in designated national parks or forest reserves, logging in excess of authorized amounts, failing to pay taxes or royalties on 

harvested logs, and exporting logs in violation of export limitations. 

The concern surrounding illegal logging is a shared one and is a primary example 

of an area where the business and environmental communities are united on the 

need to develop credible and practical solutions to the problem. Illegal logging continues to grow as an important international issue that the forest products commuVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
17 

nity recognizes and is working to address. It undermines the economic viability of 

legally harvested and traded forest products and contributes to deforestation. Illegal 

harvesting can have deleterious impacts on biodiversity and other globally important environmental services. Among the factors driving illegal logging are: unclear 

or poorly enforced forest tenure, weak political institutions, poverty, corruption, inadequate natural resources planning and monitoring, and lax enforcement of sovereign laws and regulations. 

Economic Considerations of Illegal Logging 

Illegal logging, associated illegal border trade, and the use of illegally obtained 

timber in manufacturing distort international trade and reduce market opportunities for U.S. suppliers. The very presence of illegally procured wood fiber in the 

international marketplace affects the competitiveness of U.S. producers who operate 

legitimately in accordance with national and international environmental and trade 

rules. 

In 2004, AF&PA commissioned what is widely considered to be the one of the 

most credible and informative reports on illegal logging and which has been separately submitted for the record. The study measured the economic impact on timber 

production and trade which results from illegally harvested wood products. The report concluded that many of the estimates on the extent of illegal logging are likely 

exaggerated, but the problem is nevertheless significant and depresses world prices 

by between 7 and 16%. The study also estimated that the value of U.S. wood exports 

could increase by over $460 million annually were there no illegally harvested wood 

in the global market. Eliminating suspicious roundwood in the global market would 

have an effect on domestic prices and on the pulp and paper sector which would 

be in addition to the impact on U.S. wood exports. 

Based on the study’s analysis, there is credible evidence to suggest that illegal 

logging of the kind that warrants international concern does, in fact, represent on 

the order of 8%-10% of global wood products production and a roughly similar share 

of global wood products trade. This includes only the impact on production and 

trade of logs, lumber, and wood panels, and does not include the impact on production and trade of secondary wood products, furniture, or pulp and paper. In aggregate, about 8% of the world’s roundwood production is suspicious (likely illegal), 

somewhat less for lumber (6%), somewhat higher for plywood (17%). 

Operators that flout the law are a relatively small segment of the total forest 

products business, but those that choose to engage in illegal forest activity do so 

largely because of the higher profit potential and/or shortages of legal material. 

Typically, higher returns are possible because illegal timber is presumably obtained 

at a lower cost than otherwise would be the case if legal. 

Ultimately, the report concluded that to be effective, solutions to the illegal logging issue must reduce the spread between the costs of operating illegally and the 

costs of operating legitimately. Thus, to lessen the spread, the cost of illegal material needs to rise. This can be accomplished by enhancing enforcement making the 

risk higher and it more difficult (more costly) to operate in illegal timber. 

Programs and Initiatives to Address Illegal Logging 

AF&PA and its members are already recognized as leaders in fighting illegal logging and have worked proactively on the issue for several years. In 2003, AF&PA 

joined with the U.S. Department of State, Conservation International (CI), and others to announce the launch of the President’s Initiative Against Illegal Logging. In 

2004, AF&PA released its illegal logging report, as previously referenced, which for 

the first time analyzed the economic impacts of illegally produced and traded wood 

products. And, in 2005, AF&PA joined with CI to create the Alliance to Combat Illegal Logging, a partnership designed to help put a halt to timber operations in national parks and other protected areas. 

Also in 2005, the Sustainable Forestry Initiative (SFI) standard, adherence to 

which is a condition of AF&PA membership, was revised to incorporate a new Performance Measure. The new measure states that SFI program participants shall 

have procurement programs in place that support the principles of sustainable forestry, including efforts to thwart illegal logging and promote conservation of biodiversity. 

AF&PA and its members have also been and continue to be strongly supportive 

of ongoing efforts of the U.S. Administration to address illegal logging. In November 

2006, AF&PA applauded the announcement that the U.S. Trade Representative’s office and Indonesia’s Ministries of Trade and Forestry had signed a memorandum of 

understanding (MOU) through which the United States and Indonesia pledged to 

combat illegal logging and the trade associated with it. The Administration subsequently backed up this pledge by committing $1 million in financing to support onVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
18 

the-ground efforts in Indonesia. Our industry also commends the Administration for 

its efforts to combat illegal logging through the Strategic Economic Dialogue (SED) 

talks, taking place between the U.S. and China. The recently completed second 

round of SED talks resulted in an agreement to establish a Joint Working Group 

to develop a Bilateral Agreement Addressing Illegal Logging and Associated Trade. 

We welcome and encourage continued discussions on this topic. 

In the coming weeks, AF&PA is set to release a second report, ‘‘Wood for Paper: 

A Statistical Analysis of Sustainable and Suspicious Fiber Sourcing in the Global 

Pulp Industry’’. Preliminary analysis indicates that illegal logging, while an issue 

of concern in the pulp and paper industry, manifests itself much less in this sector 

than in solid wood products manufacturing. On a global basis, credible allegations 

about suspiciously (potentially illegal) procured wood fiber for the pulp industry represent less than 2% of the total fiber consumption by the pulp producing sector. In 

the case of the U.S., practically all roundwood used by the U.S. pulp industry is 

from managed natural forests or plantations of indigenous species. 

At International Paper, we believe our wood procurement philosophy is among the 

most stringent in the industry. As a global leader in the production of paper and 

packaging products, integrity in the system (i.e. preventing illegal logging) is critical 

to our business and our ability to operate in a global market place. Our company, 

for example, has a long-standing policy of using no wood from endangered forests. 

We comply with all applicable laws and regulations in our harvesting and procurement of primary wood (roundwood and chips) and market pulp. We do not procure or accept primary wood or market pulp for our mills from legally designated 

conservation areas or wood that has been harvested in violation of international 

trading rules or agreements, such as export bans or the Convention on Trade in 

International Species (CITES), or wood that is harvested without authorization or 

in excess of concession permit limits. 

We assess risk, for non-North American fiber supply, of attaining illegally logged 

wood and address significant risk accordingly. We do not use wood fiber from tropical rainforests in our products, nor do we use any natural wood attained from areas 

designated by Conservation International to be ‘‘Tropical Wilderness Areas’’ or ‘‘Biodiversity Hotspots.’’ Additionally, because we find it difficult to discern legal and 

sustainable forestry from the illegal and unsustainable, we have also placed a moratorium on any fiber use from Indonesia. 

AF&PA and its members are doing the right thing and believe that any reduction 

in illegal logging will assist our legal products in competing against products manufactured from lower-cost illegal material. And we welcome action that raises the 

risks for illegal trade without harming the legal trade. This is an important step 

toward leveling a playing field that is currently stacked against U.S. forest producers that are committed to trading in legal forest products. 

H.R. 1497—The Legal Timber Protection Act 

We appreciate the increased interest shown by Congress to this important issue. 

AF&PA recognizes that legislation can potentially have a significant impact on the 

world-wide problem of illegal logging. In recent months, AF&PA has discussed legislation on this issue with other stakeholders, including the Environmental Investigation Agency (EIA), to seek a workable U.S. legislative approach to this problem that 

would minimize the impact on legal trade while creating an effective tool to regulate 

illegal trade coming into the United States. 

These stakeholders have focused on the Lacey Act, a federal law designed to control illegal trade in wildlife, as the appropriate vehicle to address trade based on 

illegal logging. We support such an approach provided it specifies the types of foreign law violations that would trigger Lacey Act liability for forest products. Moreover, to be effective, it is critical that any legislation does not inadvertently increase 

the cost of legally-obtained timber and timber products, thereby making illegal logging more cost effective. Thus, any legislation should avoid costly chain-of-custody 

requirements that place undue burdens upon law-abiding businesses. 

We particularly appreciate the leadership on this issue shown by Congressman 

Earl Blumenauer through his introduction earlier this year of H.R. 1497, the Legal 

Timber Protection Act. The introduction of this legislation, which would amend the 

existing Lacey Act to extend its scope to cover plants and plant products taken in 

violation of foreign and state law, has sent a signal that the United States Congress 

is serious about combating illegal logging. In fact, it was the introduction of this legislation that resulted in the completion of the stakeholders’ discussions and a revised approach supported by AF&PA, its member companies, other forestry-related 

groups, labor unions, and the environmental community. 

Rep. Blumenauer has drafted legislative language to substitute for his bill which 

utilizes the approach followed in S. 1930, the Combat Illegal Logging Act of 2007, 

19 

introduced in July by Senator Ron Wyden. We have endorsed Senator Wyden’s bill 

and would endorse a bill in the House that uses Rep. Blumenauer’s substitute language. The bill is carefully crafted to address harvesting that is in clear violation 

of specific foreign and state laws designed to protect forests from criminal activity. 

While the bill requires companies to record specific information about their plantrelated imports, it does not require companies to prove a negative, that is, to prove 

to the U.S. government that their import is not illegal as a condition of clearing customs. AF&PA encourages the Committee to incorporate the bill language from 

S. 1930 as it moves forward on H.R. 1497. 

AF&PA stands ready to continue to work with legislators and other interested 

stakeholders to craft appropriate solutions that do not hinder legitimate business 

transactions. We need to work together to stop this international problem that hurts 

the environment, the economy, and those companies that are doing right by our forests worldwide. 

We believe that the importance of this issue to AF&PA extends well beyond the 

economic value of the trade opportunities lost to the U.S. forest products industry. 

To the extent that the general public associates logging, in any country, with ‘‘illegal 

activity,’’ there is a danger of a negative impact on the image of our industry and 

the products that we produce. 

Ultimately, we recognize that support for an amendment to the Lacey Act will 

have limited impact on combating illegal logging on the ground. But it will send a 

positive signal to governments, and forest product producers and exporters around 

the world that the U.S. government, its forest products industry and environmental 

community recognizes the problem and is prepared to take action. 

On behalf of International Paper, Inc. and the American Forest & Paper Association, I appreciate the opportunity to offer our views on the issue of illegal logging 

and on H.R. 1497—the Legal Timber Protection Act. 

Response to questions submitted for the record by the 

American Forest & Paper Association 

Questions from Ms. Bordallo (D-GU) 

1. It’s not often that the forest products industry comes to Congress hand 

in hand with the environmental community to ask for more regulation. 

Why does the industry think this legislation is so important? Are you not 

concerned that your own companies might inadvertently be caught up 

in the Lacey Act? 

AF&PA Response 

We are committed to maintaining healthy forests in the U.S. and abroad and are 

deeply concerned that under-priced, illegally harvested wood is creating a negative 

economic and environmental impact for both the forest products industry and society as a whole. 

The companies we represent, including domestic, exporting, and importing interests, have been consulted throughout this process. Upon considerable discussion 

they recommended that the Association support this legislation, which represents a 

balanced approach raising the risks for illegal trade without harming legal trade 

and without being overly burdensome on responsible industry actors. It is an important step toward leveling a playing field that is currently stacked against U.S. forest 

producers that are committed to trading in legal forest products. 

2. Can you provide some more details about the negative impacts that imports of illegally harvested timber are having on the domestic forest 

products industry? 

AF&PA Response 

The economic costs of illegal logging are hard to estimate, and in fact the only 

widely accepted, credible study was published by AF&PA in 2004. A complete copy 

of this study was submitted for the hearing record. 

The study found that illegal logging likely depresses prices for legally harvested 

timber by between 7 and 16%. It also estimated that the value of U.S. wood exports 

could increase by almost a half billion dollars annually if there were no illegally harvested wood in the global marketplace. 

In certain important foreign markets illegal material significantly affects the ability of U.S. producers to export. For example, Russia exports hardwood logs to China, 

a substantial portion of which is likely of suspicious origin and which compete directly with U.S. hardwoods in the Chinese furniture industry. This trade represents 

20 

one of the most direct examples of competition between illegal wood supplies and 

U.S. exports of wood products. 

Questions from Mr. Brown (R-SC) 

1. Would your members support the addition of an ‘‘innocent owner’’ provision to H.R. 1497? Why or why not? 

AF&PA Response 

We believe innocent owners are already protected by the Lacey Act, as the government must prove intent or negligence to bring any charges against an individual. 

This bill would authorize the forfeiture of timber products when U.S. authorities can 

prove that these items were taken illegally. To do otherwise would allow goods proven illegal to continue in commerce—a practice that would undermine businesses 

selling legal product and create a perverse incentive to avoid doing due diligence. 

2. How do your members track their logs back to the source of the harvest, 

especially with products like gatewood? 

AF&PA Response 

AF&PA members are committed to implementation of and compliance with the 

principles and objectives of the Sustainable Forestry Initiative—Standard (SFIS). 

Objective 8 of the Standard is focused on broadening the practice of sustainable forestry through procurement programs. For example, Performance Measure 8.3 requires program participants to clearly define and implement policies to ensure that 

mill inventories and procurement activities do not compromise adherence to the 

principles of sustainable forestry. In practice this means that participants shall 

have programs in place that ensure the purchase of raw material from qualified logging professionals, wood producers, and other wood suppliers. In addition, such programs must ensure that harvests of purchased stumpage comply with best management practices. 

Best management practices are defined as: A practice or combination of practices 

that is determined by a federal, provincial, state, or local government or other responsible entity, after problem assessment, examination of alternative practices, and 

appropriate public participation, to be the most effective and practicable (including 

technological, economic, and institutional considerations) means of conducting a 

forest management operation while addressing any environmental considerations. 

3. How do your members prove that the products they buy and sell were 

not harvested, transported, or sold in violation of any law? 

AF&PA Response 

AF&PA members are committed to implementation of and compliance with the 

Sustainable Forestry Initiative—Standard (SFIS). Objective 11 requires all SFI participants to comply with applicable federal, provincial. state, or local laws and regulations. In addition, SFI program participants are committed through their international land management and procurement activities to promote the conservation 

of natural forests in areas identified as biodiversity hotspots and major tropical wilderness areas. Additionally, Performance Measure 8.5 in the SFIS states that ‘‘program participants shall ensure that their procurement programs support the principles of sustainable forestry, including efforts to thwart illegal logging and promote 

conservation of biodiversity.’’ 

4. A recent report by the Seneca Creek Associates for AF&PA found that: 

‘‘Most illegally produced timber is used domestically and does not enter 

international trade.’’ Is this statement correct? What percentage of illegally produced timber is consumed within each country? 

AF&PA Response 

The Seneca Creek report did estimate that most illegally produced timber is used 

domestically and does not enter international trade. In most cases, the majority of 

illegal wood is consumed in the domestic market, where fewer questions may be 

asked on wood origin than in the export markets. In addition, in developing countries where the majority of illegal harvesting is taking place, exporting tends to be 

done by larger companies, and those with relatively larger, better quality processing 

facilities. Since these companies are larger and well-known, it is logical to assume 

that government supervision would be heavier on these groups, rather than the 

smaller mills, and that relatively less of the wood produced and exported by these 

more well-known companies would be illegal. 

The suspicious volume of roundwood (logs) that enter international trade represents on the order of just 1% of global production for both softwood and hardwood. 

21 

However, on a global export basis, the study estimates that 12% of global softwood 

log exports and as much as 17% of global hardwood log exports are of suspicious 

origin. As much as 23% of hardwood lumber exports and 30% of hardwood plywood 

exports might be considered suspicious. This is largely attributable to the Indonesian situation where a high percentage of production, and hence export, is believed to be illegal. 

The percentage of illegally produced timber consumed within different countries/ 

regions varies. The Seneca Creek report, submitted to this hearing’s record, contains 

more detailed information on a targeted list of areas, including Brazil, Indonesia, 

Malaysia, West Africa, China, and Russia. 

STATEMENT OF VICTOR C. BARRINGER II, PRESIDENT AND 

CEO, COASTAL LUMBER COMPANY, ON BEHALF OF THE 

HARDWOOD FEDERATION 

Mr. BARRINGER. Madam Chairman and members of the Subcommittee, thank you very much for holding this hearing. My name 

is Victor Barringer. I am President and CEO of Coastal Lumber 

Company. As a company and as an industry we recognize the critical issues related to illegal logging worldwide and appreciate this 

committee’s willingness to address these issues today. 

Coastal Lumber Company operates in nine states employing 

1,300 employees at 24 hardwood lumber manufacturing plants nationwide. We are proud to be one of the largest employers in Chairman Rahall’s State of West Virginia. Since January 1, 2000, there 

have been 314 furniture plant closures with massive layoffs affecting some 69,190 workers. 

Manufactured household names such as Thomasville, Henredon, 

Broyhill, Century Collect now only have one to two manufacturing 

plants left in the U.S. The hardwood lumber industry which supplies wood to the furniture industry has lost 38 percent of its existing mills since 2000. One of the main reasons the furniture industry went to China is cheap wood to supply these plants. 

Despite this we can compete with legally logged timber from 

around the world no matter where the plant is located. We cannot 

compete with bribes being paid to forestry officials and others along 

the Russian-Chinese border. These people have no regard to what 

this illegal trade is doing to the environment or to manufacturing 

jobs in the U.S. 

The furniture industry aside, there are a lot of jobs at stake here. 

For example, there are 29,000 forest products industry related paychecks being generated annually in the State of West Virginia. 

Pennsylvania has about 95,000. In short, this is an environmental 

and economic catastrophe unfolding before this committee. 

I have traveled throughout Southeast Asia in recent decades and 

I have personally witnessed large blocks of deforested timber land. 

I have been to the log yards around the northern Chinese border 

trading in illegal timber, and I have witnessed this illegal trade 

from Russia. I am here today to inform the Congress that this situation is far worse than any report you may have seen. 

Essentially, there exists no enforcement of local harvesting laws 

due to the ranging system of bribes and criminal conduct. Joining 

us in this concern is the Hardwood Federation, the largest hardwood forest products industry association in the United States, representing 14,000 businesses, 30 trade associations and over one 

million hardwood families in the U.S. and Canada. 

22 

However, the pressing concerns over illegal logging and the need 

to seek legislative solutions was given a unanimous vote of endorsement by the Hardwood Federation board of directors earlier 

this year and it is viewed as the top priority for the association. 

Coastal Lumber Company is obviously not alone having seen firsthand the devastation caused by the corruption in this logging 

trade. 

We do not plan to sit by and watch illegal practices create an unfair playing field. Our intention to sustainable forest practices is a 

costly element in our business, and as CEO I can attest to the fact 

that abiding by these laws which govern private business is costly, 

but we do it. In the case of forestry laws we know that in doing 

so we are investing in the future of our business. 

Earlier this year the Hardwood Federation issued the first public 

statement of support for efforts to end illegal logging including the 

possibility of amending the Lacey Act. Since that time, legislation 

has been developed which we believe will curb illegal wood imports 

and will help protect law abiding forest products industries and 

employees as well as the forest ecosystems around the world. 

We applaud Representative Blumenauer’s leadership in introducing H.R. 1497 and the amendments the Congressman has 

agreed to implement. We urge this committee to continue to focus 

on this issue and pending legislative proposals to reflect diversion 

interest, and we have come together to a call for action. Thank you 

for allowing me to testify before this committee. 

Ms. BORDALLO. Thank you very much, Mr. Barringer. I now recognize Mr. von Bismarck. 

[The prepared statement of Mr. Barringer follows:] 

Statement of Victor Clay Barringer, II, Coastal Lumber Company, 

Charlottesville, Virginia 

Madam Chairman and members of the Subcommittee, thank you very much for 

holding this hearing. My name is Victor Barringer and I am President & CEO of 

Coastal Lumber Company. As a company and as an industry we recognize the critical issues related to illegal logging worldwide and appreciate the Committee’s willingness to address those issues today. 

Coastal Lumber operates in nine states, employing 1300 employees at 24-hardwood lumber manufacturing plants nationwide. We are proud to be one of the largest employers in Chairman Rahall’s state of West Virginia, and collectively with our 

sister companies, we are the 3rd largest taxpayer in the state of West Virginia. 

In addition, we have extensive business relations in Asia. I have traveled throughout Southeast Asia in recent decades, and have personally witnessed the sites of 

large blocks of deforested timberland, and have been to the log yards along the 

Northern Chinese border-trading illegal logs from Russia. I am here today to inform 

the U.S. Congress that the situation is far worse than any report you may have seen 

to date. Essentially there exists no enforcement of local harvesting laws due to the 

reigning systems of bribes and criminal conduct. 

Joining us in this concern is the Hardwood Federation, the largest hardwood 

forest products industry association in the United States, representing over 14,000 

businesses, 30 trade associations and over one million hardwood families in the 

United States and Canada. The Federation represents the majority of organizations 

engaged in the manufacturing, wholesaling, or distribution of North American hardwood lumber, veneer, plywood, flooring, pallets, kitchen cabinets and related products. As you can imagine, the Federation is challenged to maintain consensus on 

a myriad of issues given the breadth and diversity of the association membership. 

However the pressing concerns over illegal logging and the need to seek legislative 

solutions was given a unanimous vote of endorsement by the HF Board of Directors 

earlier this year and is viewed as a top priority issue for the association. Coastal 

Lumber obviously is not alone in having seen first-hand the devastation caused by 

23 

corruption in the logging trade. While we are the largest users of the resource we 

are also among the most fervent guardians of these forests as well. 

Companies in the hardwood industry are predominantly small, family-owned businesses, dependent upon a sustainable supply of healthy timber resources. Many are 

operated by third, fourth or even fifth generation family owners. Given this history 

and legacy, our industry maintains a long-term view of the valuable forest resources, which are the mainstay of our business. In fact hardwoods are by definition 

a long-term raw material given the decades-long growing cycle required for high valued wood species. Imagine depending upon a raw material, which takes almost an 

adult lifetime to grow to maturity! Hardwood timber is renewable and sustainable, 

but not readily replaceable once damage is done. 

We do not plan to watch as illegal practices create an unfair playing field. When 

we cannot compete fairly opportunities for providing jobs to our families in generations to come and in our local communities are lost as well as the wood products 

prized by consumers throughout the world as a universal sign of quality in homes, 

buildings, furniture and de ́cor Our attention to sustainable forest practices is a costly element in our business, and as a CEO I can attest to the fact that abiding by 

the laws which govern private business is costly. But we do it, and, in the case of 

forestry laws we know that in doing so we are investing in the future of our business. 

Since January 1, 2000, there have been 314 furniture plant closures with massive 

layoffs affecting some 69,190 workers. Manufacturers with household names such as 

Thomasville, Henredon, Broyhill and Century collectively now have only two or 

three manufacturing plants left in the U.S. The hardwood lumber industry, which 

supplies wood to the furniture industry, has lost 38% of its existing mills since 2000. 

One of the main reasons the furniture industry went to China is cheap wood to supply these plants. Despite this, we can compete with legally logged timber from 

around the world no matter where the plant is located. We cannot compete with 

bribes being paid to forestry officials and others along the Russian/Chinese boarder. 

These people have no regard for what this illegal trade is doing to the environment 

or to manufacturing jobs in the U.S. The furniture industry, aside, there are a lot 

of jobs at stake here. For example, there are about 29 thousand forest products industry paychecks being generated annually in the state of West Virginia. Pennsylvania has about 95 thousand industry related paychecks in the state and I would 

say that most states have similar numbers. In short this is an environmental and 

economic catastrophe unfolding before this committee. 

Earlier this year, the Hardwood Federation issued the first public statement of 

support for efforts to end illegal logging, including the possibility of amending the 

Lacey Act. Since that time legislation has been developed which we believe will curb 

illegal wood imports and help protect law-abiding forest products industries and employees as well as forest ecosystems throughout the world. We applaud Rep. 

Blumenauer’s leadership in introducing H.R. 1497 and the amendments the Congressman has agreed to implement. We urge the Committee to continue to focus on 

this issue and pending legislative proposals to reflect the divergent interests, which 

have come together to call for action. On behalf of Coastal Lumber and the Hardwood Federation we pledge to continue in our own active role and work to move towards a strong, effective U.S. statute to curb this alarming threat to our industry 

and to hardwood forests throughout the world. 

Thank you for allowing me this opportunity to appear before you today. 


38330.001.eps
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38330.002.eps
25 


38330.003.eps 38330.004.eps
26 

Response to questions submitted for the record by the 

Hardwood Federation 

Questions from Ms. Bordallo (D-GU) 

Do you believe the forestry industry in the United States will respond favorably to a curtailment in illegal logging worldwide? If so, how? 

Yes. Were there no illegally harvested wood in global market value of U.S. wood 

exports could increase by over $460 million each year based on recent report commissioned by AF&PA. 

Can you provide some additional details on the negative impacts that illegal logging overseas has had on the domestic forest products industry? 

Raw materials, such as logs, typically account for 60-80 percent of the cost of production for hardwood products. It is estimated that 8-10% of all wood production 

globally is due to illegal harvesting practices. Illegal trade in these materials allows 

foreign suppliers an additional means to enter the U.S. market in substantial numbers and at extremely low prices. 

Questions from Mr. Brown (R-SC) 

1. In your testimony, you say you have witnessed the sites of large blocks 

of deforested timberland. I recognize how ugly clear-cuts can be as I’ve 

traveled throughout the Western part of the U.S. and have seen this 

practice first-hand as well. Do you know if this was clear-cut legally or 

illegally? And, was it for land conversion to an agricultural use or do 

you know? 

Only what the farmer told me. The local farmer told me that people came in, cut 

this timber and left, and they did not own it. It was not for conversion to agricultural use. 

2. You also mention corruption in the international logging trade. What 

are your first-hand experiences? Which laws were broken? 

I visited a log yard in Northern China—I don’t recall the name of the town. The 

people who operated the log yard were very matter-of-fact regarding the timber that 

was taken from the Russian Government and railed into China. 

3. Do you support adding an ‘‘innocent owner’’ protection for businesses 

like yours? Why or why not? 

Innocent owners are already protected by the Lacey Act, as the government must 

prove intent or negligence to bring any charges against an individual. It is the government that must prove the illegal material’s chain of custody, not the owner. 

4. Do you have documentation that links the loss of jobs to the importation 

of illegal raw material? 

No, there is not formal documentation. However, for example, hardwood plywood 

consumption and wood flooring sales increased by approximately 20 percent between 

2002—2006, but the increase for these products was supplied by imports. U.S. production of these products actually declined which in turn impacts the workforce in 

these areas. 

5. We continue to see more automation in U.S. plants. How does this affect 

loss of jobs? 

Productivity has increased in forestry as well as in wood products manufacturing 

as in almost ever sector in the economy. The use of new technologies and better 

forest management systems has allowed growth and yields to increase significantly 

which should assist U.S. competitiveness. All of which helps to ensure sustainable 

forestry as well as the potential for increased production. Certainly resolving issues 

around illegal countries will level the playing field for our producers and allow our 

industry to take advantage of technology improvements which while automating 

many operations often lead to more and better jobs in our sector. 

6. Would you support certification of chain of custody to ensure that no domestic supply of wood is tainted by illegally obtained wood? 

No. There is already an array of tools, technologies and resources (adopted by numerous industry leaders) that make it possible to work with one’s suppliers on due 

care steps to eliminate illegal wood. Businesses can practice due care, without a 

chain of custody, by asking the right questions of your suppliers and using resources 

available from the government and private sources to become aware of marketplace 

concerns in country of origin. 

27 

STATEMENT OF ALEXANDER VON BISMARCK, EXECUTIVE 

DIRECTOR, ENVIRONMENTAL INVESTIGATION AGENCY 

Mr. VON BISMARCK. Thank you, Madam Chairwoman Bordallo for 

the opportunity to testify before this Subcommittee. We speak 

today of a problem that as the composition of this panel demonstrates unites a diversity of stakeholders in a common concern. 

I am the Executive Director of the Environmental Investigation 

Agency, and EIA is honored to present this testimony as part of a 

broad coalition of environmental, labor and industry organizations 

who all agree that illegal logging and associated trade is bad business for the environment, for poor people worldwide and for companies and that the time has come for the United States government 

to take action to curb our role in driving this problem. 

The Environmental Investigation Agency is a nonprofit organization which has worked 23 years to investigate and expose environmental crimes and advocate for lasting solutions. EIA’s analysis of 

trade in illegal timber and wildlife have been globally recognized, 

and this year we were honored to receive the U.S. Environmental 

Protection Agency’s award for our investigations into the chemical 

trade. 

Since 1999 EIA has used undercover techniques in partnership 

with local organizations to document the impacts of illegal logging 

and the criminal networks that are behind it. Our experience has 

shown us unequivocally that illegal logging, which causes the most 

serious environmental and social harm, is driven by international 

trade and that any solution will therefore require action from consuming nations such as the United States. 

These findings are collected in our report, No Questions Asked, 

which we have prepared for this hearing. In this oral testimony I 

want to touch on examples of the environmental and human cost 

of illegal logging, point out how we are fighting the problem currently with one hand tied behind our backs and how the amendment of the Lacey Act to prohibit the import and sale of illegally 

sourced wood and wood products and the declaration of some basic 

information is critically needed. 

Illegal logging has a devastating impact on our global environment as pointed out earlier by Representative Blumenauer, but 

perhaps some of the most destructive impact of illegal logging is on 

human lives and society. Revenue from illegal logging and export 

trade supports and perpetuates corruption and criminal activities 

and fuels violent conflicts much like the blood diamonds that funded wars in west Africa. 

Honduras is one of many countries where illegal logging is a crisis for the country’s environment and society. For more than a decade the grassroots environmental movement of Olancho has opposed logging on their community lands by companies owned by 

Lamas, Noriega and other barons. Between 1996 and 2007, eight 

members are alleged to have been killed for their activism. 

Last December, Heraldo Zuniga, Roger Ivan Murillo Cartagena 

became the latest victims put up against the town hall wall and 

shot. At least six members of the organization have fled the country over the past year fearing for their lives. The government itself 

estimated that in 2006 one million board feet of mahogany were extracted illegally as this slide points to. 

28 

EIA has found that one of the recipients of suspect mahogany 

was a subcontractor slated to build bullet proof doors for the Capitol Building. In Indonesia, also, the crimes are not only against 

the forest but against people. Among the world’s most infamous 

timber barons EIA has investigated is Abdul Rasyid whose company ordered an attack on investigative journalist Abi Kusno 

Nachran, shown here, after his information led to government seizure of three illegal timber shipments. 

Abi Kusno was hijacked on the road by a gang of hired thugs 

who hacked him with machetes in the back, arms and head and 

left him for dead. All cases against Rasyid, the timber baron, have 

been dropped, and his empire is building. 

Despite the law that makes sawn timber exported from Indonesia 

expressly illegal, U.S. trade data shows that over 1,500 shipments 

declared on Customs forms as Indonesian sawn timber worth some 

$30 million entered U.S. ports between November 2004 and November 2006. That is more than two shipments a day. 

Indonesia’s environment minister has publicly pleaded with consumer nations to stop buying Indonesia’s illegal timber. The trail 

of this timber, Madam Chair, goes through organized crime. This 

is a short excerpt of an undercover meeting with Frankie Chua, a 

member of a major Southeast Asian timber cartel. 

[Videotape] 

Mr. VON BISMARCK. Madam Chair, if the volume could not be 

heard, he was introduced as timber mafia. He said that timber 

smuggling is good, drug smuggling is bad, and he closed with, no 

buyer, no smuggling. Currently, Madam Chair, we are the buyers 

of this timber. We are the unwitting financiers of this crime. This 

is why, Madam Chair, the opportunity of this legislation is so 

great. 

This legislation will send a powerful signal through the international markets that the biggest market for wood products, the 

United States, does not want to support the violence and destruction caused by this logging. Thank you. 

Ms. BORDALLO. Thank you very much, Mr. von Bismarck, for 

that very compelling testimony. Finally, the Chair recognizes Mr. 

Forester. 

[The prepared statement of Mr. von Bismarck follows:] 

Statement of Alexander von Bismarck, 

Environmental Investigation Agency, Inc. 

Introduction 

Thank you, Madame Chairperson and Honorable Members of the Subcommittee, 

for the opportunity to testify before the Subcommittee regarding H.R. 1497, the 

Legal Timber Protection Act, legislation to amend the Lacey Act Amendments of 

1981 to address global illegal logging and associated trade in illegal timber and 

wood products. We speak today of a problem that, as the composition of this panel 

demonstrates, unites a diversity of stakeholders in common concern. I am the Executive Director for the Environmental Investigation Agency. EIA is honored to 

present this testimony as part of a broad coalition of environmental, labor, and industry organizations who all agree that illegal logging and associated trade is bad 

business—for the environment, for poor people worldwide, and for American companies—and that the time has come for the United States government to take action 

to curb our role in driving this problem. 

The Environmental Investigation Agency (EIA) is a non-profit 501(c)(3) organization which has worked for 23 years to investigate and expose environmental crimes, 

29 

and advocate for creative and effective solutions. EIA’s analyses of the trade in illegal timber, wildlife, and ozone-depleting substances have been globally recognized. 

Since 1999, EIA has used undercover methodologies in partnership with local organizations to document the environmental and social impacts of illegal logging, and 

its context of corruption and criminal activity, in countries including Indonesia, Malaysia, China and Honduras. Our experience has shown us unequivocally that the 

illegal logging which causes the most serious environmental and social harm is inextricably linked into international trade, and that any solution will therefore require 

action from both producer and consumer nations. 

In this testimony we discuss: 

(1) The high environmental and human costs of illegal logging and associated 

trade worldwide, and the role played by U.S. market demand in supporting 

these illegal and criminal activities; 

(2) The lack of adequate tools to address this problem from a demand-side perspective; 

(3) The reasons why EIA and our broad coalition believe that amending the Lacey 

Act to prohibit the import and sale of illegally-sourced wood and wood products, and to require the declaration of certain basic information, is an effective 

and elegant way to address the problem. 

For a more complete discussion of these points, please see our full report, ‘‘No 

Questions Asked: The Global Impacts of U.S. Market Demand for Illegal Timber— 

and the Potential for Change,’’ available at www.eia-global.org. 

No Questions Asked 

Illegal logging and associated trade are criminal activities that occur in the context of weak and corrupt governance in timber-rich countries and shipping and manufacturing hubs. These activities are financed and fueled by ever-growing demand 

from international markets that don’t discriminate legal from illegal wood products. 

The profits that lie in exporting valuable hardwoods or softwoods is staggering: according to current field data, merbau stolen from Indonesia’s Papua province is 

worth US$250 per cubic meter in the port, $600 or more upon arrival to China— 

and over US$2200 by the time it winds up as solid wooden flooring in an American 

store.1

The monetary benefits of timber trafficking are high, and the risks of any legal 

or financial penalty are low. Buyers of wood don’t ask questions because they don’t 

have to. No one—neither customers nor governments—is asking them to do so. 

Under current U.S. law, with very few exceptions, wood imports are legal by default—no questions asked. There is no underlying legal framework, within either domestic law or trade agreements, that prohibits the import or sale of illegally sourced 

wood products from any other nation. As a result, the millions of dollars invested 

by the U.S. government, non-governmental organizations and private companies in 

anti-illegal logging programs in supply side nations are being undermined by our 

own market and legal system. 

The one exception to this lack of legal tools, the Convention on International 

Trade in Endangered Species (CITES), is exceedingly limited for addressing the 

larger problem of illegal logging: EIA’s analysis of trade data and CITES permits 

shows that the chief timber species now regulated under CITES—ramin and mahogany lumber (any mahogany products are exempt)—account for less than 0.05% of 

wood imports to the United States.2

This problem is so pervasive that we find it even here in these historic rooms. 

EIA has learned that the U.S. Capitol building itself came close to hanging Honduran mahogany doors at high risk for illegal origin. Had sufficient 2007 appropriations come through for this project, we would be left to wonder whether the doors 

opening onto the U.S. House of Representatives were made using endangered trees 

stolen from the internationally protected Rio Platano Biosphere Reserve in Honduras. 

The Environmental and Human Costs 

‘‘Illegal logging’’ refers to the extraction and removal of timber in contravention 

of applicable laws. Such activities include a spectrum of illegalities ranging from 

cutting within national parks to transporting without permits, from cutting on steep 

slopes and riverbanks to over-harvesting or harvesting protected species. The extent 

of these activities in forests around the world has serious consequences in terms of 

environmental degradation, social conflict and the rule of law. 

Environmental degradation 

Illegal logging activities catalyze a chain reaction with major consequences for climate change and biodiversity loss. Some of the greatest damage results precisely 

30 

from the export-oriented extraction of valuable timber species from ‘‘frontier forests’’—the most pristine and extensive forests left on earth. 

Consumer demand for high-end hardwood products such as flooring, doors, windows or decks drives the economics of frontier logging. The prime specimens of 

large, slow-growing species such as mahogany (Swietenia macrophylla), merbau 

(Intsia spp.), ramin (Gonostylus spp.), Russian oak (Quercus spp.) or okume 

(Aucoumia klaineana), among others, remain only in remote and intact forests in 

Asia, Latin America, and Africa. Such forests are national parks set aside to protect 

habitat for low-density large mammals like jaguars, orangutans or forest elephants, 

or the world’s few remaining vast tracts ofwilderness in the Amazon, the boreal forests of Russia, the islands of New Guinea and Borneo, and the Congo basin. The 

value of these timber species on international markets provides sufficient incentive 

for logging syndicates to finance trespass in parks and indigenous territories, falsify 

harvest and shipping permits, and construct miles of trails or crude roads into the 

wilderness to access high density stands or even individual trees. The extent and 

modus of such activities has by now been well documented by EIA and other watchdog organizations, as well as academic researchers and journalists. 

This uncontrolled activity triggers a cascade of subsequent environmental degradation. Logging trails destroy hundreds of other trees to reach a few commercially 

valuable individuals. The creation of infrastructure and temporary logging camps 

brings an influx of people and economic activity into remote regions. In the short 

term, this leads to over-hunting of bushmeat or commercial wildlife poaching in surrounding forests; in the long term, settlements can become permanent while habitat 

for wildlife shrinks behind the agricultural frontier. This chain of events is even 

more damaging when it occurs in areas occupied by forest-dependent indigenous 

peoples. 

On the other hand, consumer demand for semi-disposable inexpensive wood products encourages manufacturers to cut costs and boost production—driving the largescale illegal over-harvesting of natural coniferous and hardwood forests from eastern 

Russia, Indonesia, Honduras, Brazil and elsewhere. This type of deforestation contributes directly to topsoil exposure and subsequent erosion. Intensive illegal logging 

has been acknowledged as a contributing factor in floods that cost thousands of lives 

in Indonesia, the Philippines, China and elsewhere in the past decade. It also has 

the capacity to disturb hydrological and ecological dynamics enough to cause water 

shortages and higher susceptibility to forest fires. The uncontrolled cutting of 

Honduras’s rich pine forests, for example, has caused what communities document 

to be the loss of approximately half the water sources in populous western Olancho 

district.3

As the committee is well aware, deforestation and forest fires are a major cause 

of global greenhouse gas emissions. The UK’s recent Stern Review on the Economics 

of Climate Change found that deforestation accounts for 18.3% of global carbon 

emissions annually—more than the entire transport or industrial manufacturing 

sectors.4 Illegal logging is an integral part of this picture, contributing to deforestation both through the direct removal of forest cover and through the chain of land 

use change triggered by logging described here. Uncontrolled logging is, in a sense, 

the ‘gateway activity’ that leads to a cycle of harm for the forests and the global 

climate. 

The human consequences are no less devastating. Revenue from illegal logging 

and export trade supports and perpetuates corruption and criminal activities, and 

is reaped in an atmosphere of fear, intimidation and human rights abuses. Illegal 

logging in some countries has been used to finance violent conflicts—much like the 

‘‘blood diamonds’’ that funded wars in West Africa—while in others it is linked with 

wildlife and drug smuggling operations. The following examples from around the 

world hint at the scope of forest crimes both social and environmental in nature. 

Examples: Global illegal logging hotshot, and the links to U.S. demand 

Indonesia 

In perhaps no other country has illegal logging been destructive on such a massive scale—or the focus of so much concern. In June 2006, the U.S. government was 

spending more than $7 million on initiatives to combat illegal logging in Indonesia, 

with the private sector chipping in another $13 million via 30 different projects 

throughout the country.5 And yet a 2007 U.N. Environment Programme (UNEP) report forecasts that 98% of Indonesia’s forests could be lost within 15 years, with lowland forests disappearing even sooner.6

Illegal logging in Indonesia is organized, highly profitable crime that continues to 

operate with almost total impunity for the higher echelons. Despite millions of dollars invested in combating illegal logging by the national and foreign governments, 

despite a series of crackdowns, arrests, policy initiatives and extensive public attenVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
31 

tion to an issue that has cost the country over US$20 billion, a recent survey by 

EIA and our Indonesian partner organization Telapak confirmed that almost no 

high-level financiers, senior military or government officials have even been prosecuted, much less convicted, of logging-related crime.7 The country’s forestry minister himself recently proposed Supreme Court review of several judges involved in 

handing down not-guilty verdicts, openly questioning a judicial system that continues to free criminals in the face of strong police evidence.8

These crimes are not only towards the forest but also towards its defenders. 

Among the world’s most infamous timber barons are Abdul Rasyid and his nephews 

Sugianto, Agustiar and Yadi, whose Tanjung Lingga suite of companies has reaped 

hundreds of millions of dollars from illegal logging or ramin and other species at 

Tanjung Puting National Park. In 2000, Rasyid’s employees assaulted two EIA and 

Telepak investigators with head blows, threatened them with death, and had them 

thrown in jail for three days. In November 2001 Rasyid ordered an attack on investigative journalist Abi Kusno Nachran after his information led to government seizure of three illegal timber shipments. Abi Kusno was hijacked on the road by a 

gang of hired thugs who hacked him with machetes in the back, arms, and head, 

and left him for dead.9 All cases against Rasyid, who until recently was a member 

of the Central Kalimantan Parliament, have been dropped due to ‘‘lack of evidence.’’ 

As part of the effort to staunch the illegal flow of its resources, Indonesia enacted 

a log export ban in September 2001. Following this, many syndicates changed their 

methods by cutting the stolen wood into sawn timber and concealing it in shipping 

containers.10 In response, Indonesia enacted a sawn timber export ban in October 

2004, with further strengthening and elaboration of limited exceptions in 2006. 

Yet despite a law that makes most sawn timber exported from Indonesia expressly illegal, U.S. trade data show that 1,570 shipments declared on customs 

forms as Indonesian sawn timber, worth some $30 million, entered U.S. ports between Nov. 2004 and Nov. 2006: more than 2 shipments per day.11 Eleven U.S. 

ports comprised 89% of these shipments, with only three ports—Los Angeles, Long 

Beach and Tacoma, WA—responsible for 51%. This concentrated flow demonstrates 

how increased enforcement in the U.S. could be both relatively feasible and effective 

to address an obviously illegal trade stream. 

EIA is hopeful that the Memorandum of Understanding signed by the two countries in November 2006 will facilitate such enforcement. As it stands, Indonesia is 

a shining example of the inconsistency of U.S. policy on illegal logging. The country’s environment minister, Rachmat Witoelar, has publicly pleaded with consumer 

nations to stop buying Indonesia’s illegal timber.12

Honduras 

The United States is Honduras’s largest market for wood products, importing over 

$47 million in each of the last two years in pine lumber and secondary products including mop handles and tomato stakes, as well as valuable hardwood products like 

mahogany doors and windows.13

A host of illegal logging and timber trafficking techniques have been documented 

by EIA, from fraudulent permits, phony community ‘‘cooperatives’’, and bribe-fueled 

transport to cutting openly in national parks. The illegal timber trade is used to 

smuggle narcotics and launder drug money. Export tax evasion is also rife; EIA investigations in 2005 found that declarations may represent only around 50% less 

of actual timber exported.14

Illegal logging in Honduras is closely linked with social conflict and human rights 

abuses. For more than a decade, the grassroots Environmental Movement of 

Olancho (MAO) has fought logging on theircommunity lands by companies owned 

by Lamas, Noriega, and other barons. MAO’s struggle has earned the group’s members death threats, intimidation and harassment through the judicial system. Between 1996 and 2007, eight members are alleged to have been killed for their activism; on December 20th, 2006, Heraldo Zuniga and Roger Ivan Murillo Cartagena 

became the latest victims, put up against a town hall wall and shot.15 At least six 

members of the organization have fled the country in the past year, fearing for their 

lives. International outcry over the killings led to the arrest of four local policemen. 

However, there has still been no trial, nor investigation into possible logging interests behind the crime such as the Sansone company, whose employees MAO has repeatedly denounced for death threats.16 Sansone is Honduras’s second-largest exporter, sending broom and mop handles as well as lumber to U.S. retailers as well 

as Caribbean markets. 

Peru 

Peru is the world’s principal exporter of mahogany, particularly since Brazil implemented an export ban in 2001. In 2006, this valuable wood comprised roughly 

32 

20% of the country’s total timber exports by value (a far smaller quantity by volume).17

The extent and impact of illegal mahogany logging in the Peruvian Amazon is 

grave. In the southeastern department of Madre de Dios, home to the world’s highest remaining concentration of old growth mahogany, loggers are penetrating the 

protected territories of several voluntarily isolated, ’uncontacted’ tribes, resulting in 

a rise in violent encounters with casualties on both sides.18 Advocates fear that contact with loggers will end in deadly conflict or transmission of an infectious disease 

such as influenza or pneumonia, which could kill the entire tribe. The risk is so high 

that in March 2007 the Inter-American Court of Human Rights ordered the Peruvian government to implement precautionary measures to protect the uncontacted 

groups of Madre de Dios. 

Local timber barons, increasingly linked with drug traffickers, take brutal advantage of the poverty and isolation of Amazonian communities from Iquitos to Puerto 

Maldonado.19 A study conducted by the International Labor Organization in 2004 

estimated there to be some 30,000 people living at the time under forced labor conditions linked to logging in the departments of Madre de Dios and Ucayali.20 This 

includes men living in a cycle of debt slavery and women working as prostitutes in 

logging camps.21

The Forest Governance Annex to the pending U.S.-Peru trade bilateral contains 

important measures aimed at strengthening Peru’s monitoring and enforcement of 

timber concessions. However, without a broader commitment to excluding illegal 

timber from all its trading partners, the U.S. runs the risk that illegal Peruvian mahogany will be sent to Mexico or China to become our doors and furniture just the 

same. 

China 

China has become the world’s factory for wood products, as with so much else. 

Its booming demand for raw wood material to transform into furniture and plywood 

for Western markets is driving illegal logging around the world. China is the world’s 

largest exporter of wood products, exporting over $17 billion in timber products in 

2005. This represents almost 500% growth in less than a decade22—and the U.S. 

is the biggest customer by far. In the last 10 years, the United States has increased 

its imports of Chinese wood products 1290% by value.23 We imported 40% of China’s 

wooden furniture in 2005 (a trade stream worth $US8.8 billion24), and 21% of China’s plywood exports last year.25

All this production is fueled by imports. One expert estimates that China imports 

over $US one billion annually in illegally-harvested logs alone, largely from Russia, 

trailed by Papua New Guinea, Congo Brazzaville and Gabon.26 EIA and other organizations’ investigations show systemic disregard for the legality of raw materials 

in the Chinese wood imports sector. In 2005, EIA/Telapak undercover investigators 

posing as buyers spoke with various Chinese traders who described their smuggling 

and document falsification techniques to evade the Indonesian log ban.27 In 2004, 

huge discrepancies between Chinese and Malaysian trade data showed that 58% of 

the log imports supposedly arriving from Malaysia were actually smuggled overseas 

from Indonesia—2.7 million m3 of timber, a total of almost 30% of Indonesia’s entire 

legal harvest for the same year.28

As the demand from its wood products industry grows exponentially, Chinese 

traders’ ask-no-questions ethos is cause for alarm. Beyond Indonesia and Papua 

New Guinea, some of the hotspots most affected by exports to China include: 

• Burma [Myanmar]: The world’s final remaining stands of old-growth teak 

(Tectona grandis) are being stripped from Burma’s forests to finance a longstanding war between the repressive military regime and the ethnic Kachin 

rebel army along the country’s northeast border with China.29 The cross-border 

trade in teak and other valuable tropical hardwoods reached as much as $350 

million in 2005, according to Global Witness. It primary ends up in high-end 

furniture. 

• Cambodia: As laid out in devastating detail by Global Witness in their written 

testimony submitted for this hearing, timber barons directly linked to high government officials and military officers are felling in protected State Forests, cutting protected tree species upon which local people depend for income, clearing 

vast areas of primary forest under dubious permits for large-scale plantations, 

establishing illegal factories, and robbing the Cambodian treasury of millions of 

dollars in revenues through blatant fraud, tax evasion, and smuggling.30 Members of this network are also implicated in cases of at least three murders and 

two attempted killings of people working to combat forest crime. 

China is the primary recipient of illegal Cambodian timber. Despite official Cambodian statistics that record no plywood or sawn timber exports in 

33 

recent years (most recent statistics available are from 2003-2004), international trade data show China importing approximately US$50 million in 

plywood and sawn timber between 2003 and early 2007. 

• The Congo Basin: Large Chinese companies’ illegal logging activities in this region include evading taxes on forest concessions in Gabon and Cameroon; cutting five times the allowable harvest in Republic of Congo; and exporting unprocessed logs in violation of government log export bans.31

• Tanzania: The coastal forests and woodlands of Tanzania are disappearing due 

to overharvesting of tropical hardwoods, much of it illegal and destined for export markets. China is the largest and fastest-growing market: in the second 

half of 2005, China imported 100% of the logs exported from Tanzania, and 75% 

of processed hardwoods. Furthermore, trade statistics show that China imported ten times more timber products from Tanzania than what appeared on 

the country’s official export records—in other words, a loss of 90% of the government’s revenue, estimated at $58 million dollars annually. The deforestation is 

having noticeable effects on topsoil erosion and water quality in the main logging districts.32

• Russia: Nowhere has China’s wood manufacturing explosion been felt more 

strongly than in the forests of Russia’s Far East, whose vast expanses of Korean 

pine and temperate hardwoods are home to the world’s largest cat species, the 

Amur tiger. Russia alone supplied approximately 26.4 million m3 in 2005—49% 

of China’s total timber product imports and fully 80% of its logs.33. Companies 

including Wal-Mart, Armstrong and Ikea are supplied by plants located in this 

border region.34 The Russian Natural Resources Minister described the situation in this way on a visit in 2007: 

‘‘The impression you get there is that illegal logging has become an everyday 

economic affair and common practice. Everything is covered with slabs of 

processed timber; there are saws everywhere with Chinese workers, who as 

soon as we approach them forget Russian, and Chinese too. Everybody sees 

it and nobody does anything. ‘‘35

Extent of U.S. impact 

The United States is the world’s single biggest importer and consumer of wood 

products. According to FAO data, in 2005 the U.S. imported 17.2% of global ‘‘forest 

products’’ exports, which include pulp and paper.36 This figure rises to 20% once furniture is included.37 In dollar terms we are speaking of some $56 billion, including 

all logs, timber, furniture, pulp and paper, or $38 billion without pulp and paper.38

These figures have grown dramatically: according to ITC data, from 2000 to 2006, 

U.S. wood product imports overall increased by 58%, with furniture imports increasing by 78%. 

How much of this consumption involves wood material of high-risk origin39? Of 

course, nobody declares his product to be ‘‘illegal’’ on a customs form. But estimates 

converge on approximately 10% of our imports. A recent in-depth analysis of global 

timber trade statistics, done for the OECD Roundtable on Sustainable Development, 

estimates that U.S. imports of high-risk wood in 2006 were approximately 28 million cubic meters of round-wood equivalent (RWE). Almost two-thirds of this came 

from China, followed by Malaysia, Indonesia, and Latin America (primarily Brazilian and Peruvian hardwoods).40 See Table 1 for a breakdown of the top wood 

product import streams and source countries, which shows that a substantial portion of U.S. imports come from high-risk sources. 

The OECD figure indicates that 10% of the U.S.’s imports, or 2% of the entire 

annual global trade in wood-based products, is derived from material at high-risk 

of illegal origin. This 10% figure is corroborated by Seneca Creek Associates’ 2004 

study for the American Forest and Paper Association, as well as the World Bank 

and the Royal Institute for International Affairs.41

While it is inherently difficult to calculate the amount of illegal material entering 

U.S. ports, the impact of our national demand is easy to see on the ground, as has 

been described in the case studies above. Action by American policy makers or 

American consumers should not depend on knowing exactly how many dollars worth 

or board feet of this wood enter our borders each year. For critically endangered species like Sumatran rhinos or African lowland gorillas, a few hundred trees cut in 

the wrong place can mean the difference between survival and population crash. For 

villagers of northern Burma, several hillsides of old-growth teak support the perpetuation of a bloody military occupation. For the voluntarily isolated Mashco-Piro people of Southeastern Peru, loggers’ invasion to steal a few dozen mahogany trees 

from one riverbank can mean contact with disease that wipes out their entire tribe. 

Even where the total board feet are small, the damage can be great. 

34 

Amending the Lacey Act as a Demand-Side Solution 

If we understand illegal logging in the context of corruption, criminal trafficking 

and international trade as laid out here and in our report ‘‘No Questions Asked,’’ 

then it follows that in order to effectively address the problem, we need to change 

the equation of risk and return. We need to lower the incentives for illegal trade— 

through reducing demand and lowering profit margins—while raising the risks. 

Legislative action on illegal logging in consumer countries is not a replacement 

for, but a reinforcement of, domestic enforcement in producer countries. On the demand end, the purpose of an effective law must be judged by how well it can perform the following broad functions: (1) close market access for illegal timber and 

wood products to the most lucrative, hard-currency destinations for these products, 

(2) create the incentive for high standards of due diligence, and (3) level the playing 

field for businesses that want to do the right thing, without unduly burdening 

them.42 An effective law must also be feasible to implement.The legislation in question at this hearing does precisely this. EIA, after extensive analysis based on over 

20 years of field experience, believes that amending the Lacey Act is a powerful and 

elegant way to address illegal logging and worldwide associated trade from the demand side. The Lacey Act, in essence, changes the incentives for wood products companies to ask questions. And in the complex supply chain that characterizes contemporary international trade in timber and wood products, these questions will ripple 

down the chain: from American companies who intend to abide by their domestic 

laws, to the contracts they sign with Chinese manufacturers, to the inquiries these 

manufacturers’ suppliers make with their Indonesian or Cameroonian or Russian 

sources. Moreover, the Lacey Act does this without being a radical departure from existing 

law, or an unduly burdensome trade measure. For one hundred years it has functioned to catch the worst of the worst, the serious offenders, and therefore has high 

burden of proof standards to prove ‘‘intent’’ for any criminal penalties. Further, it 

does not require specific proof of legality for each shipment. Rather, an amendment 

of Lacey sets up a reasonable set of penalties and subsequently relies on American 

companies’ essential integrity, creativity, and desire to comply with the law, to set 

in motion the necessary steps that will transform the market for wood products into 

a place where questions get asked. 

EIA fully supports the intent of the Legal Timber Protection Act introduced by 

Congressman Blumenauer, Weller and Wexler. We recommend the inclusions of several modifications to the language that were agreed upon through intensive consultation with stakeholders among the industry, environmental, and enforcement 

communities, and introduced in the Senate by Senators Ron Wyden and Senator 

Lamar Alexander as S. 1930, the Combat Illegal Logging Act of 2007. 

These modifications include a provision for basic declaration requirements that 

would include the species, country of origin, quantity and measure, and value of the 

plant import. These requirements are modeled after existing regulations for wildlife 

imports currently regulated by the Lacey Act, and resemble declarations for many 

other imported goods. They provide basic transparency for wood shipments. The declaration will have critical value for combating illegal logging by: 1) encouraging importers to ask basic questions regarding the origin of their timber and timber products; 2) providing information at the point of import that will allow U.S. authorities 

with limited resources to do efficient, targeted inspections and enforcement; and 3) 

helping enforcement agents to immediately identify ‘‘low-hanging fruit,’’ such as timber expressly prohibited to be exported. The Act’s declaration requirements will not 

be unduly burdensome to industry, including the manufacturing sector. Factories 

manufacturing wood products, in China or elsewhere, are capable of providing this 

information to buyers. They currently don’t provide it because they have not been 

asked to. 

Passage of this law will bring the United States in line with international efforts 

on this issue. The commitments expressed by G-8 leaders at the 2005 Gleneagles 

summit crystallized a growing awareness that demand-side measures are needed to 

effectively curb the roots causes of illegal logging. Today the consumer markets of 

the European Union, Japan, New Zealand, and Australia are implementing or considering a variety of policies and initiatives to encourage demand for legal timber. 

As long as the U.S. lacks similar policies to prohibit illegally sourced wood, our 

market is an enormous open door for suspicious material, undermining other countries’ attempts to address the problem. Conversely, if the world’s largest wood products market were to signal that it was closing this door, many people believe this 

action could provide the ’tipping point’ necessary to bring rapid change in global logging and tracking practices. 

Please see Table 2 for our comparison of the characteristics that legislation to effectively curb demand for illegally sourced timber and wood products should ideally 

35 

possess, and the characteristics possessed by the amendments to the Lacey Act offered in the current legislation. 

The market signal 

Passage of U.S. legislation to curb imports of illegal timber would have a rapid 

and significant effect on the global market. 

The Chinese wood products industry’s ability to evolve is a key piece of the puzzle. 

By all accounts, the current state of the Chinese industry presents a considerable 

challenge to companies and other stakeholders trying to create supply chains that 

ensure exports of legal or sustainable wood. A recent evaluation by Tropical Forest 

Trust of the potential for guaranteeing legal supply in Chinese wood products pointed to various obstacles, but emphasized that Chinese manufacturers are extremely 

flexible and quick to adapt to new business models if they prove successful. The 

study concludes, ‘‘it only takes a few examples of ’first-movers’ who are seen to be 

gaining an advantage by changing the way they operate for more companies to move 

in that direction.’’43

EIA investigations have shown the untapped potential to improve timber sourcing 

in the private sector. The response of retailers, importers and manufacturers to documented illegalities or penalties under law demonstrates the capacity for rapid 

change in the industry. In 2003, EIA/Telapak documented several firms exporting 

baby cribs made of illegal ramin to the U.S. With this illegal flow brought to U.S. 

authorities’ attention, agents were able to seize several illegal ramin shipments in 

2004. (The U.S. government has authority to take such action for the few timber 

species listed on CITES. Unfortunately, these species in total account for less than 

0.05% of total U.S. wood products imports.) When EIA/Telapak investigators went 

back to China in 2004 and met with a major producer of baby cribs, he had completely switched his wood sourcing for baby cribs from endangered ramin wood to 

legal New Zealand plantation pine. 

Conclusion: the need for Congressional action 

‘‘Expecting or asking one country to combat illegal logging while at the same time 

receiving or importing illegal logs of course does not support efforts to combat these 

forest crimes. In fact ...allowing import and trade [in] illegally cut timber and associated products could also be considered as an act to assist or even to conduct forest 

crime.’’ 

Mohamad Prakosa, Indonesia’s forest minister, 2003 

Some people will try to argue that illegal logging is not a problem of international 

trade, that illegal logging is done by poor people trying to find firewood, that little 

of this wood even enters the export stream, much less the U.S. market. Without denying that deforestation is a complex issue linked with poverty, EIA respectfully 

submits that these arguments miss the point. The illegal logging which concerns us 

today is export-oriented extraction, of a scale that can only be organized by networks of financiers, brokers, and buyers. To take just one example from EIA and 

our partner Telapak’s investigations, in 2005 we documented 300,000 cubic meters 

of logs of a species called merbau (Intsia spp.) being smuggled from Indonesia’s 

Papua province into Hong Kong and China—every month. This is an amount worth 

$600 million at western retail prices. 

A successful response to this sort of illegal activity must come from both ends. 

The international community must support, and demand, on-the-ground efforts by 

governments in producing countries to curb illegal logging and investigate and prosecute the timber barons within their borders. But countries like Indonesia and Peru 

and Papua New Guinea cannot cut off the flow of illegal wood products while the 

United States and its market allies continue to nourish it with billions of dollars 

and a no-questions-asked import policy. We need to harmonize our domestic policies 

with the impacts of our consumption.It is for this reason that legislation to prohibit 

the import and sale of illegal timber is so vital at this juncture. Not only is there 

consensus among environmentalists, governments, businesses and public citizens 

that illegal logging and timber traffic is a serious problem, but there is remarkable 

agreement about what needs to be done. We need an appropriate demand-side legal 

framework that will empower enforcement agencies with new tools and resources, 

and that will level the playing field for companies who want to do things right. We 

need the largest wood products market in the world to own up to its role in the 

illegal logging problem and begin to ask the necessary questions. 

Thank you. 

36 


38330.015.eps
37 


38330.016.eps
38 

STATEMENT OF CRAIG S. FORESTER, VICE PRESIDENT AND 

GENERAL MANAGER, REX LUMBER COMPANY, ON BEHALF 

OF INTERNATIONAL WOOD PRODUCTS ASSOCIATION 

Mr. FORESTER. Thank you, Madam Chairperson, Representative 

Brown and Representative Blumenauer. Good morning. My name 

is Craig Forester, Vice President and General Manager of the Rex 

Lumber Company. My company is headquartered in Massachusetts, and we employ more than 350 people in manufacturing operations in four states. I also serve as Chairman of the International 

Wood Products Association Government Affairs Committee. 

Today, I speak on behalf of a coalition of American wood suppliers, distributors and users of legal imported wood. We are united 


38330.017.eps
39 

in condemning illegal logging. The future of our businesses depends 

on the legal and sustainable supply of imported wood. 

Members of our coalition include the National Association of 

Home Builders, the National Federation of Independent Business, 

National Lumber and Building Material Dealers Association, the 

American Home Furnishings Alliance, the National Marine Manufacturers Association and the International Wood Products Association. As this coalition demonstrates, my company is not alone. 

Together we represent nearly 745,000 businesses. 

Housing, cabinetry, millwork, recreational vehicles, boats and 

furniture industries all use imported wood in their U.S. manufacturing facilities supporting hundreds of thousands of skilled U.S. 

jobs. My family’s small business was started by my grandfather in 

1946. From day one, Rex Lumber Company has been a leading advocate for environmental protection. 

We are certified by the Forest Stewardship Council and share 

their economic, social and environmental concerns. I give you this 

background to let you know that Rex Lumber Company is playing 

by the rules. I am proud of our business and our environmental 

leadership. We source legally, we trade legally. I travel regularly 

to Central and South America to visit our longstanding suppliers 

and to interview possible suppliers. 

My testimony before you today will show you that while we share 

the ideals of H.R. 1497 we are very concerned with the unintended 

consequences of this legislation as written. On behalf of the coalition, I respectfully request the Subcommittee to amend H.R. 1497 

to address three specific concerns. 

First, define any foreign law to address only natural resources 

laws and regulations. Second, modify the proposed new documentation requirement to be consistent with current U.S. Customs regulations. Third, add an innocent owner provision. My written testimony goes into greater detail on all three of our specific concerns. 

I want to focus on adding an innocent owner provision. 

It is important to note that under the provisions of H.R. 1497 

U.S. importers, manufacturers and distributors are all held responsible for illegal acts overseas, violations that they would have no 

reasonable expectation to know about, much less the underlying 

laws that exist in all foreign countries. The problem is this bill provides no protection for innocent owners in the supply chain who 

handle imported wood products. 

Innocent owner is a simple concept but an important one. In essence, it puts the burden of proof on the government. It reinforces 

the key principle of innocent until proven guilty. I specifically 

would like to respond to three comments I have heard related to 

innocent owner. First, Lacey never had protection for innocent 

owner. Innocent owner had been thought available in Lacey until 

a Court case in 2005, the Blue King Crab case. We just want to 

put this protection back. 

Second, I have heard that I don’t have to prove legality to clear 

U.S. Customs. This is true, but how do you disprove a negative 

should the government seize your goods? That is, how do you prove 

no law was violated overseas when you are already in possession 

of legal documents? Third, that including innocent owner would gut 

40 

this bill. False. Innocent owner does not prohibit the government 

from taking goods that violate foreign laws. 

The government can still prosecute with innocent owner provisions. In fact, the Civil Asset Forfeiture Recovery Act, or CAFRA, 

and the Brownfield Revitalization Act both specifically had given 

innocent owner provision and neither has stopped the government 

from prosecuting cases. I want to conclude with a caution. To save 

forests we must face their biggest threat: land conversion. 

The World Bank noted, and I quote, ‘‘that more than 90 percent 

of the 1.2 billion people living in extreme poverty are dependent on 

forests for some part of their livelihoods.’’ Without any other incentives they chose to clear cut and burn their forests for cattle ranching, agricultural purposes and fuel wood, life’s basic necessities. 

Forests need to remain forests, and the best way to do that is 

to provide economic incentives for countries to harvest them wisely 

and sustainably. Let us amend the bill to make sure we do no 

harm to legal businesses in the United States, and we don’t give 

any extra incentive for these developing countries to convert their 

forests to farms. 

Unintended consequences of well-intentioned legislation are consequences nonetheless. In addition to making these changes I urge 

the U.S. Government to provide more financial and technical assistance to developing countries to enforce their laws and to prosecute the offenders. Thank you for this opportunity to testify and 

for your consideration. I look forward to your questions. 

Ms. BORDALLO. Thank you very much, Mr. Forester. 

[The prepared statement of Mr. Forester follows:] 

Statement of Craig S. Forester, Vice President and General Manager, Rex 

Lumber Company, on behalf of the International Wood Products Association and America’s Imported Wood Suppliers, Distributors, and Users 

On behalf of the member companies of the International Wood Products Association (IWPA) and the coalition of America’s Imported Wood Suppliers, Distributors, 

and Users of legal imported wood, we appreciate the opportunity to submit testimony on H.R. 1497 and its proposed mark-up to a House companion to S. 1930. 

Both bills propose amending the Lacey Act to include imported wood products. 

For the record, IWPA and its coalition partners are united in condemning illegal 

logging. Our businesses depend on legal, sustainable trade in wood products in 

order to build homes, furniture, flooring, kitchen cabinets, boats, recreational vehicles, and other wood-based products for American consumers. 

We applaud the many efforts Congress has funded to help developing wood exporting countries that are struggling to enforce their forestry laws. It is with regret 

that we cannot support H.R. 1497 or its probable mark-up companion to S. 1930. 

Nearly 745,000 businesses are represented by this coalition of: 

• National Association of Home Builders 

• National Federation of Independent Business 

• National Lumber and Building Material Dealers Association 

• American Home Furnishings Alliance 

• National Marine Manufacturers Association 

• International Wood Products Association 

These associations have serious concerns about the unintended consequences of 

how H.R. 1497 or a House companion to S.1930 will affect American importers, 

manufacturers, and users of imported wood. 

The coalition respectfully requests the Natural Resources Subcommittee on Fisheries, Wildlife, and Oceans address three concerns in its consideration of this legislation. 

1. Define ‘‘Any Foreign Law’’ 

The lack of specificity in the term ‘‘any foreign law’’ is troublesome. Would this 

allow prosecutions if a sawmill in a foreign country overloads its trucks when transVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
41 

porting wood to the port? How would an importer or supply chain member know 

what is required under ‘‘any’’ foreign law? 

Would there be a scenario where imported wood from Canada was subject to 

Lacey provisions because of a provincial government’s dispute with First Nation citizens over the fishing rights in a concession? 

Courts have interpreted the phrase ‘‘any foreign law’’ extremely broadly in the 

context of fish and wildlife taken in contravention of any foreign law. See e.g., 

United States v. McNab, 331 F. 3d 1228, 1235-39 (11th Cir. 2003), interpreting ‘‘any 

foreign law’’ to include non-statutory provisions such as foreign regulations, resolutions, or decrees; United States v. One Afgan Urial Ovis Orientalis Blanfordi Fully 

Mounted Sheep, 964 F.2d 474,477-78 (5th Cir. 1992), holding that ‘‘any foreign law’’ 

need not have been enacted for the protection of wildlife but need only to relate or 

refer to wildlife and that the Pakistani Constitution falls within the term. 

We need language in this bill that directly relates to natural resources so we are 

not at the mercy of overzealous interpretations of what constitutes the word ‘‘any.’’ 

2. Eliminate Additional Documentation Requirements 

Our product comes to the U.S. clearing Customs on both exit and entrance. Sovereign governments issue documents, permits, and paperwork that allow products 

to be traded legally under international and national laws and regulations. Our government accepts those documents as legal upon entry at our nation’s borders, just 

as we ask other governments to accept our country’s issued documents. 

A requirement to identify the countries where sourcing and processing occurred 

should not be included. This requirement goes beyond the Customs regulations and 

adds significant complexity to Country of Origin classifications. Customs officials at 

the ports are already overtaxed with national security inspections. There is also 

some question as to which government organization is going to collect the data and 

manage it a meaningful manner. 

Most importantly, how will a database hinder illegal logging in foreign countries? 

There are existing tools both in government and in the private sector already 

available to determine trade flows of wood products. 

3. Add ‘‘Innocent Owner’’ Protection 

This legislation provides no protection for ‘‘innocent owners’’ in the supply chain 

who handle imported wood products. ‘‘Innocent owner’’ is a simple concept but an 

important one. This is a widely acceptable standard used in other areas of federal 

and state jurisprudence. Without an ‘‘innocent owner’’ provision, supply chain members are vulnerable to civil forfeiture which could cause the loss of their businesses 

and personal savings. Cleary, such damage is as punitive as incarceration. 

Under Lacey, the entire supply chain handling imported plant material is held responsible for illegal acts of which they would have no reasonable expectation to 

know the violation much less the underlying laws that exist in all foreign countries. 

Courts have expanded the liability and coverage of Lacey to create a situation where 

there is ‘‘culpability with no accountability.’’ Recent case law effectively exempts 

Lacey Act forfeitures from the ‘‘innocent owner’’ defense. In United States v. 144,744 

Pounds of Blue King Crab, 410 F.3d 1131 (9th Cir. 2005), the Ninth Circuit held 

that importers of crab that was transported on a foreign vessel which failed to maintain its vessel monitoring system in violation of Russian law could not assert an ‘‘innocent owner’’ defense in a forfeiture action. 

Adding an ‘‘innocent owner’’ provision will not unduly hinder the United States 

Department of Justice from prosecuting cases. ‘‘Innocent owner’’ does not prohibit 

the government from taking goods that violate foreign laws. The government can 

still prosecute with ‘‘innocent owner’’ provisions. In fact, the Civil Asset Forfeiture 

Reform Act of 2000 (CAFRA) and the Brownfields Revitalization Act both specifically give an ‘‘innocent owner’’ defense, and neither has stopped the government 

from prosecuting cases. 

In essence, ‘‘innocent owner’’ puts the burden of proof on the government. It reinforces the key principle of ‘‘innocent until proven guilty.’’ 

In an effort to restore the ‘‘innocent owner’’ defense in light of the Ninth Circuit’s 

opinion, any proposed amendment to the Lacey Act should include language specifically adopting the ‘‘innocent owner’’ defense set forth in the CAFRA. 

The proponents of this legislation say that legality does not need to be proven to 

clear U.S. Customs and to import goods. This is true. However, how does an importer or a supply chain member disprove a negative should the government seize 

his goods? That is, how does he prove no law was violated overseas when he is already in possession of legal documents? 

42 

In recent weeks, several articles have been published about illegal logging in Canada and in the U.S. If the Lacey Act were amended, how would the domestic timber 

industry prove that no law has been violated anywhere in their supply chain? 

Most of the businesses represented by this coalition are small and family owned. 

We are not ‘‘Big Timber’’ or ‘‘Big Paper’’. We are mom and pop businesses who hope 

to someday pass on our customers to the next generation. 

We implore the members of the committee to amend this anti-small business bill 

to protect ‘‘innocent owners’’ and save U.S. jobs. 

Wood Trade is Unique 

In our consultations with government officials and Congressional staff, we have 

been challenged with the question, ‘‘The Lacey Act works for animals and fish, why 

not wood?’’ 

Wood products go through transformations that have no parallel in animals or 

fish. We represent commercial industries that have many steps in the chain for 

transformation of product, unlike the commercial fishing industry where commercial 

boats catch and process at the site of harvest. Nor can we be compared to the individual hunter or collector who may personally and knowingly pursue a particular 

specimen on the wrong side of the law. Wood products go through many transformations, in many countries. For example, logs are harvested in the U.S. and exported to Vietnam for primary processing. The veneer shipped to China and made 

into furniture for ultimate export back to the U.S. Tracking that U.S. log from point 

of harvest in Pennsylvania and back to the point of import is incredibly complex. 

Illegal Logging Causes and Cures 

The International Wood Products Association and its coalition partners are committed to putting in place comprehensive solutions to the illegal logging problem. 

We believe there are already laws in place to stop the importation of illegal material 

into the United States. 

Solving the illegal logging problem is about stopping the problem at its source— 

in the country of origin before the material can enter into international trade. 

The root causes have nothing to do with importers or U.S. trade. A collaborative 

report by Seneca Creek Associates and Wood Resources International states, ‘‘The 

suspicious volume of round wood that enters international trade represents on the 

order of just 1 percent of global production for both softwood and hardwood.’’ 

Instead of focusing on criminalizing U.S. citizens involved in the importing and 

building trades, policy should address issues causing illegal logging—poverty, forest 

governance, societal problems, and civil conflicts. 

The World Bank noted that ‘‘more than 90 percent of the 1.2 billion people living 

in extreme poverty [are] dependent on forests for some part of their livelihoods.’’ 

Without any other incentives, they choose to clear-cut and burn their forests for cattle ranching, agricultural purposes, and for fuel wood—life’s basic necessities. 

Enacting H.R. 1497 or a House companion to S. 1930 will not end deforestation 

or illegal logging because it does not get to the root of the problem. These approaches may actually make the problem worse as it will add costs to forest management. When impoverished communities see no future in forests, they burn them 

down to make the land available for planting crops and ranching. 

We strongly feel the best way to combat illegality is by enforcing the laws in 

place. By definition, illegal logging is not legal; therefore, let us work with the foreign governments of most interest and concern to make sure there is great compliance with existing laws. 

If the United States is going to position itself as a partner to countries that have 

problems with illegal logging, it must do so as an honest broker seeking good resolutions and not because it is responding to some domestic industries that are seeking 

to exploit illegal logging issues as a push for protectionist measures to limit competition. 

It does no good to create an illegal logging remedy that is in practice a method 

to reduce competition from imported goods. Such a remedy merely becomes an instrument of protectionism that undermines U.S. competitiveness, hurts millions of 

American consumers, and penalizes small businesses. 

This bill, as written, does not move us to where we need to be to end illegal logging around the world. Our coalition believes it is necessary and appropriate to utilize bilateral, regional, and multilateral agreements to strengthen commitments in 

the areas of law enforcement, judicial capacity building, and technology. The U.S. 

should work with foreign governments on the ground through bilateral trade agreements, such as the Peru Free Trade Agreement with its illegal logging annex; Memorandums of Understanding, like the current MOU with Indonesia; the U.S.-China 

Strategic Economic Dialogue Task Force to Create Bilateral Agreement Addressing 

43 

Illegal Logging and Associated Trade; and the President’s Initiative Against Illegal 

Logging (PIAIL). If this legislation is an attempt to influence wood products trade 

with China, then please propose a trade bill to deal with China and do not enact 

legislation that will harm legal businesses while doing nothing to protect the forests 

from being converted to agricultural use. 

Conclusion 

The International Wood Products Association condemns illegal logging. This industry’s long-standing support for sustainable forest management is evidenced by 

IWPA’s Code of Conduct and Board-approved Statement on Illegal Logging developed in 1994 and 2002, respectively—among the first policy statements adopted 

about the issue by any organization. 

Despite a desire to be proactive on the issue, IWPA and its coalition partners oppose H.R. 1497 or a House companion to S. 1930 as currently drafted to criminalize 

the otherwise legal importation of wood products where the imports are found to 

have been taken in violation of ‘‘any foreign law.’’ These measures would extend 

civil and criminal penalties under the Lacey Act to U.S. citizens who are in possession of plants that violate ‘‘any foreign law,’’ even when the U.S. citizen is an ‘‘innocent owner’’ and has relied upon certifications of the exporting country. 

Expansion of the Lacey Act as suggested by H.R. 1497 or a House companion to 

S. 1930 would create substantial uncertainty for various industries lawfully engaged in and reliant on the importation of wood products and other plant materials. 

Such uncertainty would result because of the broad applicability of Lacey Act civil 

and criminal penalties to individuals within the chain of custody of plant materials 

that, unbeknownst to them, may be in violation of ‘‘any foreign law.’’ As discussed 

previously, U.S. federal courts interpret the term ‘‘any foreign law’’ extremely broadly, in contravention of the original intent of the Act. 

During the 1981 Senate hearing on the Lacey Act Amendments, Dr. F. Eugene 

Hester, Acting Director of the U.S. Fish and Wildlife Service, addressed the intent 

of the amendments: 

‘‘We do not wish to hinder legitimate trade in wildlife or wildlife products. 

We believe that healthy, viable, sustaining wildlife populations should be 

harvested and trade promoted. It is the destructive poaching of fish and 

wildlife that must be controlled...’’ 

Thus, the current efforts to amend the Lacey Act, which would hinder legitimate 

trade in wood products run counter to the intent of the statute. 

The National Stolen Property Act, Cultural Property Implementation Act, Convention on International Trade in Endangered Species, Customs laws, and existing 

money-laundering statues are among the tools readily available to the U.S. government to prosecute the ‘‘bad actors’’ or to deal with timber species which are actually 

at risk. In addition, bilateral arrangements can be designed to provide for enforcement by the U.S. of other countries’ illegal logging laws. Two examples are a Memorandum of Understanding signed with Indonesia and the illegal logging annex in 

the Peru-U.S. Free Trade Agreement. 

Forests need to remain forests, and the best way to do that is to provide economic 

incentives to countries that sustainably manage their forests. Using tropical forest 

products is the best tool in our kit to promote forest health, encourage legal trade, 

and promote economic development in poverty stricken nations. 

The benefits will also be seen in the U.S. marketplace and in our employment 

numbers. In 2006, over $23 billion worth of legally traded wood and wood products 

entered the U.S., a 38-percent increase over 2003. Imported wood products are 

value-added in the U.S. by U.S. workers for U.S. consumers. Housing, flooring, 

decks, cabinetry, millwork, recreational vehicles, boats, and furniture industries all 

use imported wood in their U.S. manufacturing facilities. The demand for products 

of a certain look, durability, availability, and price is at the center of our market 

economy. As market demand for imported woods and other goods rises, so do jobs. 

From port to highway, producer to distributor, and retailer to end-user, hundreds 

of thousands of family incomes are made possible by international trade, including 

legally sourced imported woods. 

Forest conservation and legal trade are goals that we all share. Unfair policy 

pushed by alliances seeking political gains and market advantage should not supersede them. 

Thank you for this opportunity to testify and for your consideration. We look forward to working with the Subcommittee as it reviews H.R. 1497. 

Ms. BORDALLO. Now, consistent with Committee Rule 3[c], the 

Chairwoman will now recognize members for any questions they 

44 

may wish to ask the witnesses allowing five minutes each for each 

member. Should the members need more time we will have a second round of questions. I would like to begin first with Ms. Sobeck. 

In your testimony you note that the Justice Department believes 

that existing U.S. laws do not adequately address the problem of 

trafficking in illegally logged timber and that amending the Lacey 

Act is a sensible way to provide the legal authority that is needed. 

Can you give us some examples where the Department was 

aware of illegal timber being imported but you were unable to prevent it from entering the U.S. due to inadequate legal authority? 

How would proposed amendments to the Lacey Act change that? 

Ms. SOBECK. Yes, Madam Chairman. Just I think an easy hypothetical. If there is a shipment of timber that we have found out 

from foreign authorities was harvested illegally in the foreign country, and it is in the process of being imported into the United 

States, if that timber is of a species that is not listed under CITES 

it is our view that there is no provision of U.S. law that would prevent its importation as long as it was truthfully and appropriately 

declared upon entry. 

I mean, obviously if somebody lies on their Customs forms we 

have a means of going after them, but if it is a CITES protected 

species we would not have a Lacey Act enforcement action, but we 

could bring an enforcement action under the Endangered Species 

Act or the smuggling prohibitions. In the absence of CITES listing 

there is no provision of U.S. domestic law that would prevent the 

importation of illegally harvested foreign timber in our view. 

Ms. BORDALLO. Let me just follow-up here. Would the sawn timber imports from Indonesia mentioned by Mr. von Bismarck be an 

example, would you say? 

Ms. SOBECK. If that timber were not a CITES listed species of 

timber that would be an example, yes. 

Ms. BORDALLO. Mr. von Bismarck, would you like to add to that 

question, please, in terms of the problems that you are seeing now? 

Mr. VON BISMARCK. Yes. I think that is what I was referring to 

with one hand tied behind our backs. I think that the efforts by the 

United States government under the President’s initiative against 

illegal logging, the efforts by our various agencies, have been very 

well-received and very important. 

Unfortunately, the monies spent and the efforts spent have been 

undermined by the fact that while we are, for example, training 

prosecutors in Indonesia, for example, we are on this end financing 

unwittingly the crooks that they are supposed to be going after. It 

is only with a comprehensive approach that we can make our hard 

work on the ground effective, and this is what is missing. 

Ms. BORDALLO. Thank you very much. I have a second question 

for you, Ms. Sobeck. Opponents of the bill claim that by amending 

the Lacey Act as proposed it is placing an unfair burden on importers of wood and wood products by requiring them to be accountable 

for foreign logs. You note in your testimony that importers of fish 

and wildlife products have been subject to similar accountability requirements for more than two decades. 

How are these situations similar, and what new requirements 

were placed on fish and wildlife importers in 1981 when the law 

45 

was amended? Did it prove so burdensome that they were unable 

to continue their imports? 

Ms. SOBECK. Well, I can’t speak for industry, but I think that we 

have found with respect to fish and wildlife that Lacey has been 

a good tool and that the burden on the government is quite high 

in proving a criminal case. We do have an obligation to prove 

knowledge generally of the foreign law or that a person or entity 

in the exercise of due care should have known about a foreign law 

and that in the absence of that level of knowledge we would not 

be imposing or seeking to impose any sort of criminal sanction. 

The standard of due care varies by what line of business the person or the entity is in, whether they are regularly engaged in business that relates to importing or commerce in foreign fish and wildlife, and if this were extended to plants or timber products that 

would be the case as well, but the government has quite a burden 

in proving a criminal case. So we from a law enforcement point of 

view have not seen that this has been a big problem for the industry. 

I defer to my colleagues who were testifying here today about 

their views about whether the documentation would be burdensome for them or not. It is interesting to me that they said that 

they did not think that it would be. 

Ms. BORDALLO. Do any of the other witnesses wish to comment 

on that? 

Mr. FORESTER. I would like an opportunity to respond. 

Ms. BORDALLO. Go ahead. 

Mr. FORESTER. Thank you. I appreciate the point of view of Justice. I think the Lacey Act as it applies to fish and wildlife forgets 

the fact that the supply chain in lumber is far longer and more 

complex than the harvesting of fish and the processing of fish and 

wildlife at the point of harvesting. 

The amendments that we are suggesting to this amendment try 

to place culpability on people who knowingly import illegal lumber. 

When you talk about foreign laws, we are all united against illegal 

logging, and we would like to give you the tools to use to combat 

that, but in doing so the burden on business should not be for any 

foreign law. 

If that is the intent, you know, specifics in the law I think are 

very important, and I think the burden of proof should be high on 

a criminal case, and I think the Justice Department would agree. 

When we ask for innocent owner we are merely looking for culpability to be placed upon people who knowingly do so, and for the 

responsibility for illegal acts to be placed upon people who are committing those illegal acts. 

Providing an innocent owner provision similar to one that is in 

CAFRA allows businesses whose business is lumber to not be subject to foreign laws that they would have no way of knowing about. 

I think it is important to understand that there is a long supply 

chain in the harvesting of lumber, and I think with a documentation requirement in place that it is very difficult to audit that trail 

that we expect foreign sovereign governments to audit. 

Ms. BORDALLO. Thank you. Thank you very much, Mr. Forester. 

Mr. FORESTER. Thank you. 

46 

Ms. BORDALLO. Ms. Wrobleski or Mr. Barringer, would you care 

to comment on that? 

Mr. BARRINGER. As far as the regulation is concerned we can appreciate that. I have heard the same thing for years in West Virginia about the regulation on logging. We have a book this thick 

in West Virginia of requirements that are placed on us just to log 

in West Virginia, but we do it, and we get by with it and it is OK. 

This is a dire situation. 

We are talking about 69,000 workers to date that have lost their 

job because the furniture plants are leaving this country to chase 

cheap wood, going after illegally logged timber. Something has got 

to be done. 

Congressman Brown, in your state in South Carolina they estimate there were probably 300 small hardwood saw mills. Unless 

something is done, those guys, half of them are toast in 10 years. 

If there is 300 sawmills that is 29,000 paychecks in the State of 

South Carolina. We don’t know for sure. That is an estimate of the 

number of small sawmills in the state. 

Ms. BORDALLO. All right. Would you care to make a statement? 

Ms. WROBLESKI. I think the point that I would make, Madam 

Chairman, is that the legislation is fairly specific about what foreign laws we are talking about, and I think that has been the critical issue frankly for AF&PA throughout this process is the requirement for specificity. 

Illegal logging is defined as organized efforts to steal trees or otherwise ignore a country’s efforts to control and preserve its nation’s 

forests such as harvesting without authority in designated national 

parks or preserves, logging in excess of authorized amounts, failing 

to pay taxes or royalties on harvested logs and exporting logs in 

violation of export limitations. 

I think the point that the legislation is directed with this specificity at those particular laws is frankly something that AF&PA applauds. 

Ms. BORDALLO. Thank you very much, Ms. Wrobleski. Now, the 

Chair recognizes the Ranking Member, The Honorable Mr. Brown 

from South Carolina. 

Mr. BROWN. Thank you, Madam Chairman, and thank you all. 

What an interesting panel. I hope we can come to some good resolve. It concerns me. Certainly, we don’t want any illegal products 

coming into this country, whether it is fish, or wood, or whatever 

else it might be, but to place the burden of responsibility on the 

end user to determine whether it is legal or not legal I think is a 

difficult task for me. 

With that, let me ask this question to Ms. Sobeck. Ms. Sobeck, 

H.R. 1497 requires that U.S. users of imported wood products comply with all foreign laws, treaties and international agreements. 

How many forest laws are there in Indonesia? 

Ms. SOBECK. I don’t know, sir. 

Mr. BROWN. My notes say 900. 

Mr. BLUMENAUER. Madam Chair, just in aid of, that was the bill 

as it was originally introduced. As I tried to make clear in my testimony, we have been working with many of the people here. The 

version that is introduced by Senator Wyden reflects the consensus 

47 

that we have developed. My testimony was based on using that 

amended version. 

Mr. BROWN. OK. 

Mr. BLUMENAUER. I don’t want us to spend a lot of time on something that isn’t what I am proposing. 

Mr. BROWN. OK, but that was just to get me where I want to go 

next, but thanks, Earl. OK. How do we determine whether the 

product that we are receiving at the port whether it is legal or illegal? How do we make that determination, and who makes the determination? 

Ms. SOBECK. Well, that determination is going to depend on a 

case by case basis. If we, the United States, are going to be making 

a determination that somebody has broken the law the burden is 

going to be on us to show that the person or entity knew or should 

have known in the exercise of due care in order to bring a criminal 

violation. 

Mr. BROWN. And that is my point is that, you know, looked like 

to me the United States government ought to be responsible for determining what products are legal and what is illegal. I know that 

those countries have to comply with their own laws to I guess credit whether it is legal or not legal. 

I would hope that some time or another we could have that in 

a manifest that when the product comes in that we could make 

that determination and not wait until it becomes a chair or whether it becomes some other piece of furniture. That is too far down 

the supply chain I think to bring some criminal activity. 

I mean, I would hate to see somebody come in to one of those 

plants and confiscate some boats, or, you know, some furniture because somebody missed that checkpoint when it came into the 

United States. 

Earl, that is my real concern is we can get some clarification at 

that level. We don’t want it coming in. We don’t want those mills 

to close down, we don’t want all those furniture plants to close either that buy that lumber from those hardwood mills, but how do 

we know when we import something from China whether it is coming from lumber that is legal or illegal? 

Ms. SOBECK. Well, Congressman, I think that it is going to partly 

be the paperwork that is going to be required to accompany the 

products upon their import, and then it will be up to the exercise 

of due care to importers or others farther down the line. If there 

is somebody farther down the consumer line who has no knowledge, the government would not be bringing any kind of criminal 

action under this set of amendments to the Lacey Act if they were 

enacted. 

Mr. BROWN. Then you would support innocent owner provision? 

Ms. SOBECK. Well, with respect to the criminal offenses obviously 

somebody who had absolutely no knowledge and no duty to know 

in the exercise of due care to know that the product was illegal 

would not be subject to criminal sanctions. The forfeiture provisions are not subject to those knowledge requirements under the 

Lacey Act at the moment with respect to the contraband substance 

itself. 

Mr. BROWN. OK. Could I get a comment from the rest of the 

panel on the innocent owner provision? 

48 

Mr. VON BISMARCK. Thank you, Congressman. I think it is helpful to distinguish that for prosecution of individuals it is our understanding that the burden is on the government to prove intent, so 

there under this law will be no prosecution of individuals that did 

not know or did not follow due care. 

The discussion over innocent owner relates to seizure and forfeiture only, and in that case from our point of view from working 

on enforcement and looking at what deterrents would work would 

be very important to consider that the comment made by Mr. 

Barringer as to the impacts on the economy are largely driven by 

the actual shipments of illegal timber making it into the country. 

The problem with the innocent owner and why we say it will gut 

the bill is that if we have the information, if we can prove that a 

shipment is illegal, we should be allowed to seize it. That would be 

so important for the signals that this will send in the market. 

Mr. BROWN. Right, and I agree we ought to be able to seize it, 

but we ought to be able to seize the original shipment, not wait 

until it has been transformed into some other product. That is the 

reason I was thinking about the innocent provision in there. If it 

goes through Customs, you know, like the normal standard process 

and it is all agreed to then why would the next chain of ownership 

not be OK? 

Mr. VON BISMARCK. It is actually a critical point, Congressman, 

and it is very important to not look at only one point in the supply 

chain. It is certainly true that the supply chain gets very complex 

in the case of wood products, and I think that will lead to the fact 

that it will be more difficult for the government to prove that something is illegal if it is highly manufactured, and therefore, somebody dealing in those kinds of products is less likely to be prosecuted. 

If it can be proven it is essential that case can be brought. Otherwise, if we only look at sawn timber or we only look at logs the 

market will simply respond by manufacturing the products in a 

country that does not have similar laws and then shipping all of 

the illegal material in the form of chairs into the United States. 

Mr. BROWN. So you think the proof of legality ought to be with 

the receiver or with the government who is actually doing the inspection as it comes through? I mean, wherever that end product 

comes, how can they be responsible for an act that took place in 

Indonesia? 

Mr. VON BISMARCK. Well, they won’t be responsible, but the good 

can be seized if the government can bring evidence that material 

is illegal. 

Mr. BROWN. But shouldn’t that be done at a port of entry? 

Mr. VON BISMARCK. If it can it certainly should be. That would 

be most efficient, and that is what the on the ground work that the 

U.S. Government is doing now would effectively do, but it needs to 

be buttressed by this legislation that says if something gets 

through you are not going to be able to sell it in the United States 

and therefore have the motivation to try to avoid the efforts in Indonesia to solve the problem there. 

Mr. BROWN. Ms. Sobeck, do you agree with that assumption? 

Ms. SOBECK. I am sorry. I agree with you, Congressman, that we 

should try to get at a violation at the earliest possible time. In fact, 

49 

our preferred enforcement mechanism would be to have the foreign 

country and the country of origin do their policing of their own 

laws to prevent the export of the material to the United States. 

Mr. BROWN. Sure. Sure. Right. 

Ms. SOBECK. Then of course we would like to catch it at the border and have the primary importer. I think that is always our preferred enforcement mode for Lacey Act prosecutions even if the 

predicate offense is a state law. We are always going to go after 

the main importer, the main supplier, the wholesaler, but as Mr. 

von Bismarck noted, sometimes you don’t get there. 

Sometimes the only thing you have is the illegal product itself. 

I agree that if since what we are trying to do is get to not having 

us be the consumer nation of this illegal product, then having an 

action not against the individual, not a criminal action, not something that is going to jeopardize their liberty or result in a criminal 

fine but to forfeit the product itself even in the absence of knowledge of the owner further down the supply chain or ownership 

chain, that occasionally may have to occur. 

Again, that is the structure that is already in place in the Lacey 

Act. We have limited enforcement resources. We are going to try 

to target them in an intelligent, appropriate way. 

Mr. BROWN. Mr. Forester, did you want to respond? 

Mr. FORESTER. Thank you very much. Innocent owner does not 

prevent the government from seizing goods. In fact, CAFRA, the 

Civil Forfeiture Act, has an innocent owner provision. We were 

looking for Lacey to include the innocent owner similar to what 

CAFRA does. Listen, people import illegal lumber knowingly. 

Criminals should be prosecuted. 

You should prosecute them, and I want you to prosecute them. 

That makes better business for the rest of us who are doing it legally. There is no doubt about that. CAFRA, which is a forfeiture 

act, has an innocent owner provision in it. We are looking for Lacey 

to incorporate an innocent owner provision to protect people who 

do not knowingly import illegal timber. 

It is to put culpability on people who knowingly are doing criminal activities from a criminal set. It doesn’t affect forfeiture, and 

illegal timber should be seized. If the government can prove that 

it is illegal timber they should absolutely seize it. 

But from an importer’s standpoint, if you have to prove legality 

currently through import documents, export documents from the 

country of export, import documents, I do my due diligence with 

my suppliers to make sure that they are providing me with legal 

documents, I expect foreign sovereign governments to do their due 

diligence in enforcing their laws because I cannot substitute for the 

U.S. Government or more importantly a foreign sovereign government to audit the trail of legal documents through the long supply 

chain that happens. 

Lumber is cut, it is sawn, logs travel, people sort their logs, and 

this happens in the United States also, and I think it is done legally. It is a long supply chain. If I have legal documents from a 

foreign sovereign country I need to rely on that because as a small 

business I don’t have the resources that the U.S. Government nor 

foreign governments have to police the activities and the laws in 

each individual country that I am dealing with. 

50 

I think if you have a criminal and that criminal is importing 

lumber, prosecute them. Wonderful. That is the best thing that we 

could have. 

Ms. BORDALLO. Thank you very much, Mr. Forester. We are 

going to have a second round of questions here, so I would like to 

tell the Ranking Member he has a second round here. At this time 

I would like to recognize the author of the legislation, Mr. 

Blumenauer of Oregon. 

Mr. BLUMENAUER. Thank you very much, Madam Chair. I really 

appreciate the line of inquiry that we had a moment ago because 

I think it is starting to get to the focus of what we are trying to 

do here. 

Mr. Forester, in your introduction, it is not in your written testimony, but in your introduction, you elaborated that you visited 

overseas. You went over and looked at what is going on, on the 

ground, repeatedly to assure? 

Mr. FORESTER. Yes. 

Mr. BLUMENAUER. Now, why do you do that instead of just relying on what the Chinese, or the Indonesian, or the Thai tell you? 

Mr. FORESTER. Or the Central and South American locations 

that I go to. 

Mr. BLUMENAUER. Right. Why do you do that? 

Mr. FORESTER. We do business domestically and internationally, 

and I choose suppliers the same way internationally as I would domestically. You need to meet your supplier, you need to visit their 

location, you need to walk in and look at their yard. You need to 

look around. Do they have a neat yard or is there things piled up 

everywhere? 

You need to meet the people that you are dealing with and get 

a feeling about them. Then you need to work through documents 

and whatever else to determine whether they are doing something—— 

Mr. BLUMENAUER. Right, but you just don’t rely on representation from foreign brokers or for foreign governments. You do it 

yourself on the ground. 

Mr. FORESTER. As a small business we do directly import out of 

certain Central and South American countries. I do not do any 

business in Asia, so I cannot speak to Asia. We do buy from U.S. 

companies and brokers that have brought product through Customs, and many of the IWPA members do that, and I think they 

are relying and I rely on the documentation. 

Mr. BLUMENAUER. I guess the point I am trying to make is that 

you go to extraordinary lengths to guarantee that those areas that 

you are involved with meet your standards. 

Mr. FORESTER. To the best extent possible. 

Mr. BLUMENAUER. Yes, and I guess this to me is an illustration, 

Madam Chair, of why I think we need this legislation, because 

somebody who chooses not to go to that length, who just gets a 

good price, wants to take it, looks the other way, is on the same 

footing. We wouldn’t have an illegal logging business thriving 

worldwide if we had higher standards in the United States. 

Your mills wouldn’t be at risk, or at least as many of them, in 

South Carolina if everybody did what Mr. Forester does. The notion 

that people just kind of can sort of take what is thrown over the 

51 

transom. It is common knowledge to people in the industry that 

these are illegally harvested lumber, that they are not all done according to the standards that are in place technically but not enforced. 

Mr. BROWN. Would the gentleman yield real quick? 

Mr. BLUMENAUER. Surely. 

Mr. BROWN. Earl, I know that he goes and looks at the yard, and 

it looks clean and all that stuff, but legally who has the stamp to 

say whether that is legal timber harvesting or illegal timber harvesting? Looked like to me if the country would give some kind of 

a stamp to say that this mill is shipping, or that is a legitimate 

mill, or nonlegitimate mill, the country of origin should have some 

legal responsibility to certify it. 

I would think the United States, as we ship products abroad we 

have some certification to say that, you know, these are legal timber products or whatever. 

Mr. BLUMENAUER. I agree, and I think as you go overseas and 

you look at what is happening. For example, there has been a big 

brouhaha about sweat shop provisions, and you understand that 

again in South Carolina, and what has happened is that the industry has created protocols. They have standards for what they purchase. Whether it is Adidas or Nike, they have protocols. They 

have things that their mill, the people they supply from, their suppliers, that they look for, that they agree to a code of conduct. 

Occasionally mistakes will be made, but if a company has in 

place procedures, if these are in fact represented to them, and they 

follow through in a reasonable fashion, and they make reasonable 

effort and they have standards, as I read the bill as we have attempted to understand it, that there would be no criminal penalty 

unless—and the Department of Justice has more than what they 

can do, and I appreciate Ms. Sobeck being here, but correct me if 

I am wrong—the criminal liability would not kick in unless you 

could prove that they knowingly accepted illegal. 

The civil penalties are, people, they either need to know or 

should have known that due care exercised before they are even 

subjected to civil penalty. Under this legislation there would be an 

additional disincentive, which is an illegal log or illegal piece of furniture if it is found out would be forfeited so that there is an incentive up and down the chain to do what responsible manufacturers 

are already doing, what Mr. Forester is already doing. Isn’t that 

correct? Do I have that right? 

Ms. SOBECK. That is correct with respect to criminal culpability. 

There is no innocent owner without any knowledge, or a responsibility, a duty to exercise due care, no innocent owner will be found 

guilty of a criminal offense. They will be subject to forfeiture of the 

product. There has been a little discussion of CAFRA, and I did 

want to note that the case that you have been mentioning, the crab 

case, actually found that the Lacey Act forfeiture provisions were 

consistent, were OK under that statute, and so they are not inconsistent. 

So to the extent that CAFRA has an innocent owner provision 

that is supposed to apply across the board to civil forfeiture statutes Lacey has been found by at least one Court of Appeals to be 

consistent with that standard. 

52 

Mr. FORESTER. And that is wonderful. That is why I am here 

today. I try to do and do the best job possible, but that said, if 

Lacey is not tied to the innocent owner provisions in CAFRA, if 

there is not a specific tie to it, all the good things that I try to do 

to import legal lumber, which I do—I am here not to defend illegal 

lumber—— 

Mr. BLUMENAUER. I am asking the questions. Excuse me, Mr. 

Forester. 

Mr. FORESTER. OK. Yes, sir. 

Mr. BLUMENAUER. I mean, you are debating the Lacey Act. You 

are not debating what we are proposing here. If people want to 

come back and change the Lacey Act to clarify that there is an innocent owner provision, so be it. What we have here in this legislation is simply extending it to the Lacey Act. 

If your segment of the industry wants to take exception to the 

Lacey Act, go do that. What we are doing is trying to, and I really 

appreciate the broad industry support, the broad labor and environmental support, to try and root out of the chain of commerce illegally logged timber which is occurring now, which is widespread, 

which is why, Mr. Forester, I hope that you are looking on the 

ground in Latin America to make sure because you are representing to your customers that they can count on what is going 

on. 

What the other and I appreciate the majority of the people in the 

industry are here arguing is that everybody ought to be able to rely 

on that under the force of law. The Lacey Act is the simplest, most 

direct way I think to accomplish that. If people want to change the 

Lacey Act, that is a separate issue. We are just proposing that the 

Lacey Act protection apply to illegally harvested timber. Thank 

you, Madam Chair. 

Ms. BORDALLO. Thank you very much. I have a couple of questions on the second round for Ms. Wrobleski and Mr. Barringer. 

Both of you, the two of you, you know it is very unusual for the 

Congress to be asked by U.S. businesses for any expansion of U.S. 

laws or regulations which may affect their particular business. Are 

you not concerned that your own companies may be inadvertently 

caught up in the Lacey Act and forced to prove your own innocence? 

I will ask you, Ms. Wrobleski, first to answer that. 

Ms. WROBLESKI. Thank you, Madam Chairman. I think that over 

the course of the last several months of negotiations between the 

many stakeholders who care deeply about the issue of illegal logging, the members of AF&PA and certainly International Paper 

have come to the realization and the understanding that the current proposal which Mr. Blumenauer has proposed is one that we 

think is the most effective. 

At International Paper we have complete confidence in our supply chain. We pay great attention to CITES. We don’t log anyplace 

where Conservation international has declared a hot spot, we are 

very careful about tropical forests. I mean, we have a long legacy 

of good stewardship of the forests, and we protect that legacy and 

frankly it is an important part of who we are as a company. 

53 

As I say, I think that on behalf of the association and the industry the proposal that we have before us we think is workable and 

will be effective. 

Ms. BORDALLO. Mr. Barringer? 

Mr. BARRINGER. Yes. No, I am not concerned. From Coastal Lumber Company’s standpoint we just do the right thing. Just from 

that standpoint, that doesn’t concern me. I have been to hundreds 

of furniture plants in China, and Vietnam, and Southeast Asia and 

so forth, and they all know it is illegally logged. They laugh about 

it. They all know that the wood that is sitting in that furniture 

plant that is going to the United States has been illegally logged 

along the Russian border, and they have paid bribes to get it. 

Now, I am not saying that everybody is, you know, perfect on 

this, but something has got to be done. Something has got to be 

done now. Like I have pointed out, in Congressman Brown’s state 

you have a lot of jobs at stake right now. You can talk to Sumter 

Furniture in South Carolina where my grandfather worked as a 

forester 75, 50 years ago. Well, they are in China now. They are 

in China. 

Ms. BORDALLO. Well, I have been a member of the Small Business Committee here in the U.S. Congress, and I know the tales 

of the small businesses. It is really very sad. 

I have a question for you, Mr. von Bismarck. Some have questioned whether international trade and U.S. demand is really a 

driver of illegal logging in foreign countries arguing that most illegal wood is sold domestically. Given your experience on the ground 

in these countries, how do you respond to that assessment? 

Mr. VON BISMARCK. Thank you. Yes. The current estimates are 

that the illegal portion of international trade is about 10 percent, 

and the estimates that we have pulled together in the report that 

we prepared for this hearing we also found that best estimates are 

that about 10 percent of imports into the United States are from 

high risk material which would go to about 3.8 billion a year. 

Those are obviously difficult statistics to pull together. We are 

talking about smuggling. They are difficult in any smuggling to 

pull together exact statistics. They also in a way miss the point of 

what we are trying to do here. 

What we are absolutely certain about is that from the point of 

view of uncontacted, indigenous peoples in Peru, or from the point 

of view of the last national parks available remaining in the world, 

and from the point of view of those impacted by illegal imports, it 

doesn’t matter what the proportion is relative to legal forests, it 

matters how it is impacting things on the ground. 

So even a small proportion coming into the United States can 

have an enormous impact on a national park that is being entered 

by a criminal elements in Honduras, for example. I think in terms 

of the driver it is clear that often illegal logging is a first step that 

begins a chain of events that includes the other complex issues as 

have been rightfully point out that determine deforestation. 

Often, illegal logging is one of the first gateway activities that occurs in those stories. 

Ms. BORDALLO. I have a further question for you. The IWPA argues that the best way to combat illegal logging is to enforce the 

54 

laws that are in place in foreign countries. What is your response 

to that? 

Mr. VON BISMARCK. It is absolutely correct that enforcing foreign 

laws and working on the ground in foreign countries is extremely 

important. What is just missing from the comment is that it is currently being undermined by the fact that we are in essence unwittingly financing the criminals that we are spending money overseas 

to combat, and it just doesn’t make sense. 

I think that every approach that we have had to try to deal with 

an illegal trade problem understands that there is a demand and 

a supply side to the problem, and it requires a comprehensive approach. This demand side has been missing. 

So specifically, the Lacey Act in its inception 100 years ago interestingly was created to support laws in other states, so it is precisely for that objective that is pointed out, that we need to support 

the efforts in foreign countries to enforce their own laws. That is 

precisely the objective of this legislation. 

Ms. BORDALLO. Thank you very much. Now, the Chair recognizes 

for a second round Mr. Brown, our Ranking Member. 

Mr. BROWN. Thank you, Madam Chair. With that in mind, how 

can we as an end user of a produce enforce the laws in another 

country? 

Mr. VON BISMARCK. This legislation is not requiring any business 

to enforce laws in another country. 

Mr. BROWN. But to comply with them, right? 

Mr. VON BISMARCK. Right, and I think enforcement officials here 

will point out that in any prosecution to date in the Lacey Act 

much of the success of that prosecution depends on communication 

with the source country and support from the source country in 

clarifying those issues. I think your point, Congressman, of clarification of laws is a very important one, and again, is the kind of 

measure that this legislation will instigate and support. 

There are efforts in Indonesia as we speak, very successful ones, 

to condense the 900 laws to a much more compact collection of laws 

that the Indonesian government considers as illegal timber. That 

was precisely driven by initiatives in the consuming markets to ask 

Indonesia, we need clarification. 

This legislation would have the effect of allowing the U.S. market 

to make that same request and result in clearer laws overseas. 

Mr. BROWN. But don’t you agree, and Ms. Sobeck, I guess you 

can chime in on this, that part of the responsibility of the United 

States government is to protect the interests of our small businesses to be absolutely sure that they aren’t being victimized by 

some criminal element in some foreign country? 

Mr. VON BISMARCK. Absolutely, Congressman. I think it is understandable that with these kind of measures there is trepidation on 

the part of small business. I certainly cannot speak for small businesses, but I would say that it is certainly our take that this legislation would be an enormous boon for businesses such as Mr. Forester’s in the United States who are taking those measures as were 

described today. 

Mr. BROWN. I don’t think Mr. Forester is taking any level of precaution that other manufacturers aren’t unless there is some illegal 

intent within some of the other, you know, manufacturers in the 

55 

United States. I don’t think he is going over there looking and see 

if they are legal. I don’t know how you can determine that. 

As far as when you go to these other countries, how can you tell 

whether the product is legal or illegal? 

Mr. FORESTER. When we go to foreign countries we do as much 

investigation as we can, but ultimately, we are still relying on the 

National Forest Service of these foreign countries and the national 

governments of these foreign countries to ultimately certify that 

this lumber is legal. I think I misspoke. If I did, I am sorry. 

I am not looking to amend the Lacey Act or make any changes 

to it. This amendment to the Lacey Act is addressing an industry 

with a very long supply chain, and it is different from the supply 

chains that the Lacey Act currently covers. I think when you make 

such an amendment it is necessary to understand that long supply 

chain and the fact that there are many people along that supply 

chain that are responsible for the lumber as it moves through the 

supply chain. 

Somewhere along the line as a business owner I have to rely on 

somebody to say that this is legal. I can do lots of things. I can 

have documents issued by foreign countries, I can have CITES documentation, I can have other third-party certifiers certify lumber, 

but ultimately, certification is a standard. Laws are a standard. It 

comes down to enforcement of those laws to ensure legality. 

That is true in the United States. When I do business with other 

companies in the United States and they ship me product I expect 

that to be legal. I rely on them to provide me with legal documentation, and I rely on the United States government to address 

any illegality that may happen further down the chain. I expect 

foreign governments to do the same. 

I think the United States government, along with USAID and 

many other free trade agreements that they have, need to help foreign governments enforce their laws because ultimately that is the 

only true barometer of legality. Because how do I prove legality? 

I mean, how far back should a business go in proving legality? 

I cannot audit the entire supply chain, and I cannot audit the entire documentation. Criminal behavior is criminal behavior. All I 

can do is work with the best of my knowledge, and work with the 

export documents from foreign countries and expect the government to do their due diligence. 

Mr. BROWN. Have you ever been subject to illegal products coming in to your operation? 

Mr. FORESTER. No. 

Mr. BROWN. When you make an order, do you pay in advance? 

When does the money transfer? 

Mr. FORESTER. Well, it depends. There are times when we pay 

when lumber hits the docks or at times when we have paid when 

lumber is at a port in a foreign country. In some Central American 

countries we have gone so far as to advance money to developing 

businesses down there to develop—it is within a certification system that we are very happy with, but we have advanced money before trees have even been cut in an attempt to help develop that 

thing. 

56 

Frankly, we were doing something in parallel with basically 

what USAID was doing in the country. As a private business we 

were doing a very similar action. So it runs along the gamut. 

Mr. BROWN. Ms. Sobeck, are you familiar with some cases where 

there has been illegal lumber, illegal logs coming into the United 

States? Have you had any personal cases that you have had to deal 

with? 

Ms. SOBECK. Not that I personally have dealt with. I believe 

there has been one case involving CITES listed timber, but that 

would not have been a Lacey Act case, and other illegal logs in the 

sense that they were harvested illegally in a foreign country. Other 

than CITES species that would not come to the Justice Department’s attention because it would not be a crime under U.S. law. 

Could I just make a couple of points? I want to make clear that 

in a criminal case the burden is never on the defendant to prove 

that imported product was legal. The burden is always on the government to prove that it is illegal. Much of the discussion today 

from various industry representatives about what they do in terms 

of looking at the certification or making site visits and understanding the supply chain would qualify as due diligence and that 

we wouldn’t expect them to go beyond that kind of behavior. 

I am not talking in any specific case, but we would not prosecute 

somebody criminally if they had exercised due care. A lot of what 

we have been hearing is the kind of due care that would benefit 

small business. What we don’t want is when a small business 

owner knows that the certification from a foreign country is false. 

We have heard some discussion of it is well-known that there is 

timber that is illegally logged elsewhere and that perhaps because 

of corrupt practices in foreign governments there is a patently illegal or invalid certification. The burden would be on the government, but if the government could prove that an individual knew 

that the product was illegally logged then we would initiate a 

criminal case. 

Mr. BROWN. Do you know how many cases we have made this 

year? Didn’t you say it is like a billion dollars that is coming in illegal? 

Ms. SOBECK. We aren’t making any cases except in CITES listed 

timber because it is not currently illegal. So in terms of how much 

product is coming in that was taken illegally abroad, the Justice 

Department, we do not deal with that. My colleagues here on the 

panel have some information statistics, but none of that timber is 

illegal under United States law at the moment unless it is listed 

on CITES. 

Just one more thing. I just wanted to let you know that the 

United States, we are training prosecutors abroad and working 

with foreign enforcement officials. That is one of the principal 

things we are doing under the MOU with Indonesia because we do 

want primary enforcement to be in the country of origin. 

Mr. BROWN. Sure. Sure. 

Ms. SOBECK. We don’t want this to be a United States problem. 

Mr. BROWN. Well, when do you think we would be able to get 

some kind of a certification that when that manifest comes into the 

port, if it has a proper certification on it, it is OK? You think we 

will ever get that standard? 

57 

Ms. SOBECK. It is always going to be relevant to the Justice Department in assessing a case what the certification says, and depending on whether or not that is adequate is going to depend on 

the circumstances. 

Ms. BORDALLO. I think, Ms. Wrobleski, you wanted to comment, 

right, or Mr. Barringer? Yes? 

Mr. BARRINGER. To answer that question, just in regards to the 

furniture industry segment the market will take care of a lot of 

that. Let us just say you are importing illegal log wood product. 

You go to the plant in China and you say, you know what, guys, 

you have to make that furniture with legally logged sustainable 

timber. OK, fine. They start buying it from the United States or 

they start buying it from some FSC certified wood somewhere else. 

That will take care of a lot of it. The price isn’t that much different. Again, like I said in my earlier statement, the saw mills in 

the United States can be competitive with any plant in the world 

if we just have a level playing field. It is difficult for us to compete 

against illegally logged timber, but the market will take care of a 

lot of this by forcing it back on the Chinese furniture plant. 

Ms. BORDALLO. Thank you very much. I have one wrap up question here for Mr. Forester. I have been listening, and do we understand you correctly? You are not opposed to amending the Lacey 

Act to preclude the import to allow the seizure of illegal timber at 

the point of entry? Is that correct? 

Mr. FORESTER. Could you read that again? You are asking me a 

very specific question. 

Ms. BORDALLO. You are not opposed to amending the Lacey Act 

to preclude the import and allow the seizure of illegal timber at the 

point of entry? 

Mr. BROWN. Madam Chairman, that is the reason I asked him 

when did he pay. 

Ms. BORDALLO. That is correct. Would you want me to read it 

again? 

Mr. FORESTER. No, no, no, no. I understand. I think it is a little 

bit more than a yes or no question, but yes, if the government 

proves that someone brought illegal timber into the United States 

that timber should be seized. However, if the importer did not 

knowingly import that and is innocent, in this amendment because 

of the supply chain I think there should be protection for the innocent purchaser. 

Ms. BORDALLO. Protection from what? 

Mr. FORESTER. From criminal prosecution and civil prosecution 

for that timber coming in if they did not knowingly do that. That 

is my issue with this bill is that as a legal importer and doing the 

right things, if someone further down the supply chain does something illegal, yes, that timber is illegal, yes, I don’t have a problem 

with that being seized, but I don’t want to be criminally or civilly 

liable as a business—— 

Ms. BORDALLO. I am just rather concerned because wouldn’t everybody say they are innocent? 

Mr. FORESTER. And I think it is the government has the resources to prove that I knowingly imported it? I think that is something the government should do. Absolutely. I find it difficult with 

58 

iThroughout this document, illegally logged timber is defined as any timber which is in violation of provisions of Cambodian law and regulations relating to the acquisition of exploitation 

rights, logging, means of harvesting, sale, purchase, transportation, import or export of timber. iiGlobal Witness is an advocacy organisation which exposes the corrupt exploitation of natural 

resources in order to drive campaigns that end impunity, resource-linked conflict, and human 

rights and environmental abuses. In 2003, it was co-nominated for the Nobel Peace Prize for 

its leading work on ‘‘conflict diamonds’. 

legal documents to determine how I would prove my innocence, but 

I think I can defend my innocence. 

Ms. BORDALLO. Would anyone else like to comment on that? Yes. 

Please go ahead. 

Ms. WROBLESKI. Thank you, Madam Chairman. I don’t want to 

pretend that International Paper is a small business, but I did 

want to pick up on something that Mr. Barringer said and that is 

the pressure of the marketplace. It is not just the pressure of suppliers and our supply chain, but frankly it is the pressure of our 

customers. 

Our customers want to know that what they are buying has been 

sustainably produced and is legal. To the extent that we can work 

with Congress, and the government and the environmental community to get some legislation on the books that helps us reassure our 

customers, and again, Mr. Barringer’s point that the market will 

take us further than that, and so I just wanted to say that I think 

that what we have here is a good compromise. 

Everybody has given up a little bit. Nobody is, you know, perfectly 100 percent. Everybody has given some. I think that the legislation that we have is legislation that needs to go forward. Thank 

you. 

Ms. BORDALLO. I thank you all. I thank all of the witnesses for 

their testimony and their informative answers. Members of the 

Subcommittee may have some additional questions for the witnesses, and we will ask you to respond to these in writing. 

Yes. Go ahead. 

Mr. BROWN. Madam Chair, I hate to interrupt you, but I have 

some letters that support, or do not support this bill, I guess. For 

the record if I could submit them? 

Ms. BORDALLO. No objection. So ordered. The hearing record will 

be open, I would like to remind the witnesses, for 10 days for these 

responses, so if you are questioned you have a 10-day period to answer. If there is no further business before the Subcommittee the 

Chairwoman again thanks the members of the Subcommittee and 

our witnesses. The Subcommittee now stands adjourned. 

[Whereupon, at 11:43 a.m. the Subcommittee was adjourned.] 

[Additional material submitted for the record follows:] 

[A statement submitted for the record by Patrick Alley, Director, 

Global Witness, follows:] 

Statement submitted for the record by Patrick Alley, 

Director, Global Witness 

Chairwoman Bordallo and members of the Subcommittee, thank you for the opportunity to share our experience of illegal logging i in Cambodia and its impact on 

the country and its people. 

Global Witness ii first began exposing illegal logging in Cambodia and its links 

with conflict, corruption and human rights abuses in 1995. Over the past 12 years 

59 

we have documented numerous cases of illegal logging across the country, and the 

resulting social, economic and environmental consequences. 

In the time that we have been working on this issue the modus operandi employed by illegal loggers has changed but the power relationships underlying the 

crime remain the same. Today, as it was twelve years ago, the individuals behind 

the major illegal logging operations in Cambodia are those with business or familial 

links to powerful political figures. In other words, the bulk of illegal logging in Cambodia is not carried out by poor people in desperate search of supplementary income. 

It is an organised criminal activity which enables politically well-connected individuals to generate large amounts of money at the expense of the rural poor. They are 

assisted in doing so by those elements of the state nominally responsible for protecting the forests and upholding the rule of law: politicians, police and military included. 

Whilst our long involvement in Cambodia has given us a detailed insight and 

knowledge of the country’s illegal logging industry, the patterns of abuse observed 

there are not unique. In many countries where Global Witness works, government 

and state agents are predatory and civil society is correspondingly weak. In such 

states, forest resources are particularly vulnerable and illegal logging can become 

embedded and thrive. This in turn contributes to patterns of exploitation that are 

inequitable and geared more towards the profits of individual officials and companies rather than poverty reduction and environmental conservation. 

Global Witness views the Legal Timber Protection Act’s proposed amendment to 

the Lacey Act as an important first step towards combating these practices. Taken 

on its own, the proposed legislation will not completely shut down demand for all 

illegal timber. However, its effect would certainly be felt by those carrying out the 

logging by decreasing demand for their product and, ultimately, reducing their profits. Perhaps more importantly though, the proposed changes to the Lacey Act would 

set a precedent for other countries to follow, and thus help fill the current legal vacuum which provides illegal loggers and their political allies with unfettered access 

to global markets. 

The Loss of Cambodia’s ‘‘Most Developmentally Important Natural 

Resource’’ 

Illegal logging and human rights abuse have a long history of association in Cambodia. Global Witness’ early work revealed how, in the last years of Cambodia’s civil 

war, both the Khmer Rouge and the Phnom Penh government used logging to fund 

military campaigns which resulted in massive loss of life and livelihoods. Our investigations revealed a cross-border timber trade with Thailand worth US$10-20 million per month. Following our expose ́, the Thai border was closed to Cambodian timber—cutting off a critical source of military funding for the civil war. This did not 

spell the end for the illegal logging of Cambodia’s forests, however. 

Since the war ended in 1998 Cambodia’s leaders have found it hard to kick the 

habit of treating the country’s forests as a personal slush fund for political campaigns, personal enrichment and rewarding key clients. The cumulative impact of 

this epic mismanagement is that the country’s forests—termed by the World Bank 

as Cambodia’s ‘‘most developmentally important natural resource’’ 1—have contributed very little towards the post-conflict economy. 2 Instead, funds which should 

have gone towards the development of this damaged state have been siphoned off 

via illegal or exploitative logging practices into the bank accounts of the political 

elite and their cronies. 

The Role of the Concessionaires 

In the mid-1990s, senior government ministers secretly awarded between 30 and 

40 logging concessions to Cambodian and foreign-owned companies. The contracts 

signed away over seven million hectares of forest, i.e. 39% of Cambodia’s land area, 

on terms that greatly favoured the interests of the concessionaires over those of 

Cambodia. 3 All the concessionaires proceeded to break the law or the terms of their 

contracts or both in order to reap a fast profit (see appendix 1 for further details). 

Throughout the late 1990s and up until 2002, they were responsible for most of the 

illegal logging in Cambodia. 

During this time, employees of the concessionaires violated the rights of people 

living inside or adjacent to forest concessions on any number of occasions. Abuses 

committed by company staff included denial of access to forest areas, intimidation, 

rape and, in at least one case, murder. 4

The environmental impacts of widespread illegal logging were felt both locally and 

nationally. At a local level, these typically included obstruction of streams that form 

people’s water supply as a result of poor road and bridge construction. At a national 

level, the overall impacts of the concessionaires’ logging were also apparent. AgriVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00063 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
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iiiThe report can be downloaded from http://www.globalwitness.org/mediallibraryldetail.php/ 

546/en/cambodiaslfamilyltrees ivFor the purposes of this document, members of the Seng Keang Company are understood 

to be Dy Chouch, Seng Keang, Khun Thong and Seng Kok Heang. 

culture and fisheries are the Cambodian population’s main sources of food. Both are 

sustained through natural systems of water management within which the forests 

play an important role. UN agencies cited deforestation as a cause of the severe 

floods in 2000 that cost Cambodia an estimated US$156 million. 5

International donor and NGO pressure did eventually lead the Cambodian government to suspend the concessionaires’ logging operations in early 2002. This was 

followed by a period of donor-government consultations, culminating in a ‘‘road map’’ 

for forest sector reform. 6 However, despite public commitments to these reform processes, Cambodia’s shadow state has continued to illegally generate money from the 

timber sector. The same officials charged with implementing reforms have actively 

subverted them, with the result that illegal logging has continued in a variety of 

forms and is causing severe damage to Cambodia’s remaining forests. The last global forest cover survey by the Food and Agriculture Organization (FAO) found that 

Cambodia had lost 29% of its primary tropical forest over a five year period. 7

The New Face of Illegal Logging in Cambodia 

In June of this year, Global Witness published its latest report on illegal logging 

in Cambodia which exposed some of the scams used by illegal loggers in recent 

times. The report, ‘‘Cambodia’s Family Trees’’, is the result of several years research 

and details the activities of a group of timber barons who together constitute Cambodia’s most powerful logging syndicate. With familial links to some of the country’s 

key political figures, their careers illustrate how the country’s political elite has successfully subverted forest management reforms and continued looting a valuable 

public asset. 

The individuals behind the Seng Keang Company logging syndicate featured in 

our report, although undoubtedly major players in the illegal logging industry, are 

not the only timber barons in Cambodia. However, their activities and the way in 

which the group has conducted its business are illustrative of the deleterious impact 

of illegal logging across Cambodia as a whole. Global Witness investigations into the 

group’s activities over a number of years have charted just how damaging their 

‘‘business’’ has been to local communities, the environment, rule of law and the national economy.Their behaviour has encompassed not only illegal logging but also 

acts more normally associated with a Mafiosi organized-crime mob, including extortion, bribery, kidnapping, forced imprisonment and attempted murder. The findings 

of our investigations are summarized below. Further detail and references for the 

points covered in this document can be found in the main body of ‘‘Cambodia’s Family Trees’’. iii

Introducing the Seng Keang Company: Cambodia’s Premiere Logging Syndicate 

The syndicate is led by Dy Chouch, also known as Hun Chouch, his ex-wife Seng 

Keang, and their business partner Khun Thong. Seng Kok Heang, the brother of 

Seng Keang, also works for the syndicate. Dy Chouch is the first cousin of Prime 

Minister Hun Sen. Seng Keang is a friend of the Prime Minister’s wife, Bun Rany. 

Khun Thong is the brother-in-law of Minister for Agriculture, Forestry and Fisheries, Chan Sarun, and father-in-law of the Director General of the Forest Administration, Ty Sokhun. While this syndicate has operated under various different labels 

over the years, most recently it has been known as the ‘‘Seng Keang Import Export 

Company Ltd.’’ 

Members of the Seng Keang Company iv first came to Global Witness’ attention 

as logging subcontractors for some of the leading concessionaire companies operating in Cambodia in the 1990s. One of their key customers was a logging concessionaire company called Kingwood Industry. 

Despite generating large profits from illegally logging within and outside its concession area, Kingwood underwrote its activities by borrowing money from a number 

of banks and individuals—including from Seng Keang. A source close to the company claimed that it needed to borrow because its directors were laundering sales 

revenue through affiliated companies in Indonesia, Singapore and Taiwan. 8 By late 

2001, Kingwood owed Seng Keang US$1.9 million. The government suspension on 

concession logging in early 2002 effectively shut down Kingwood’s operation and destroyed the company’s chances of keeping up with debt repayments. 

A source close to the Kingwood operation informed Global Witness that, in August 

2002, Kingwood’s Managing Director—a Taiwanese national named Lia Chhun 

Hua—attempted to cut his losses and leave Cambodia for good. According to this 

61 

source, he was prevented from doing so by Seng Keang, whose entourage abducted 

Lia, confiscated his passport and held him hostage in the factory. At this point, the 

Seng Keang syndicate took control of the Kingwood timber processing factory and 

all of its equipment. The last confirmed sighting of Lia Chhun Hua was in 2005. 

Global Witness does not know his current whereabouts. 9

With the imposition of the logging moratorium in concession areas, the Seng 

Keang Company needed to look elsewhere to continue sourcing timber for processing 

at the Kingwood factory. An opportunity presented itself in the shape of the government-mandated rubber plantation in Tumring, Kompong Thom Province. The 

Tumring Rubber Plantation is situated in the heart of Prey Long Forest—mainland 

Southeast Asia’s largest lowland evergreen forest and an important part of Cambodia’s natural heritage. 

In October 2002 Chan Sarun’s Ministry of Agriculture, Forestry and Fisheries 

gave permission to the Seng Keang Company to collect wood within the rubber plantation’s boundaries. 10 The syndicate soon proved itself uninhibited by the plantation’s perimeters, and went on to illegally log in the surrounding Prey Long Forest. 

The trees felled in the forest were then laundered via the rubber plantation. This 

formula—officially-sanctioned clear-felling within a valuable forest—provided almost 

unlimited scope for laundering illegally-logged timber between 2002 and 2006. 

Anatomy of an Illegal Logging Operation 

Damage to the local economy 

With the rubber plantation project enjoying political support from the highest 

level, the syndicate were able to log outside the plantation boundaries with 

impunity. 

Employees concentrated on logging Dipterocarp trees as the most suitable 

throughput for the syndicate’s processing plants. Unfortunately for those people living in and around Prey Long forest, liquid resin collected from the Dipterocarp tree 

is a key source of additional income. 

In recognition of the centrality of resin trees to rural incomes, Cambodia’s 2002 

Forest Law made it illegal to cut ‘‘trees of species that people tap for resin’’. Between 2002 and 2006 the company’s illegal targeting of resin trees seriously damaged the livelihoods of hundreds, if not thousands of families living in the area. 

Interviews with loggers and visits to cutting sites in Prey Long suggest that resinproducing trees accounted for at least 50% of the wood processed in the Seng Keang 

Company factory in its local factory. 11 Resin tappers in Tum Ar village on the edge 

of the plantation told Global Witness in 2006 that in the past all of the 100 families 

living there had owned 200-300 resin trees each. In 2006, only 5-6 families had any 

trees left at all. 12 In Rumchek village in Sokchet Commune villagers reported losing 

800 resin trees to representatives of the Seng Keang Company in mid-2005 alone. 13

According to resin tappers, Seng Keang Company employees would sometimes pay 

them compensation for cutting their trees. The sums involved were derisory however—US$1.25-US$12.5 for a tree whose timber might sell for as much as US$1,000 

in Phnom Penh. 14 These payments were made on a ‘‘take it or leave it’’ basis. 

Intimidation and threats of violence against the local population 

The syndicate was able to maintain their control over the local population through 

a combination of familial connections, bribery and threats of violence. Their representative in Tumring, Seng Kok Heang, used this technique to establish his own 

personal fiefdom in the area. A report on plantations published in November 2004 

by the UN Office of the High Commissioner for Human Rights made a clear link 

between this intimidation and the presence in Tumring of Seng Kok Heang, alias 

Mr 95: 

‘‘A man who goes by the name of ‘‘Kae Pram’’ [meaning 95 in Khmer] (his radio 

call sign is 95) heads the security guards of Mieng Ly Heng Company, and has a 

particularly brutal reputation. He is the brother of Seng Keang, the director of Seng 

Keang Company, the main subcontractor of Mieng Ly Heng. In Roniem village, people reported that they have been frequently threatened with death for their attempts to block illegal logging and illegal transport.’’ 15

Persistent intimidation of this sort gave way to outright violence on 10 July 2005, 

when Seng Kok Heang is reported to have tried to kill two local men who had 

played a leading role in protecting villagers’ resin trees. 

In March 2006 Minister Chan Sarun issued a decree revoking his earlier 

authorisations for Seng Keang Company operations, and by September 2006 practically all traces of the Seng Keang Company operation were gone. 16 The precise 

rationale behind the decision to close the company’s operations is unclear. However, 

it seems likely that the attempted shooting of two community forest activists in 

2005, and the international attention this generated, played a role. 

62 

Loss to the National Economy 

The loss of income and violence suffered by the local population at the hands of 

Seng Kok Heang and his cohorts stands in stark contrast to the profits reaped by 

the company during its reign in Tumring. Because of the illegal nature of Seng 

Keang Company’s activities, there are no credible official statistics on the amount 

of timber the firm has cut in Prey Long. Nonetheless, from interviews and Global 

Witness observations, it is clear that the returns on its logging and timber processing operation have been considerable. Calculated at the 2006 Phnom Penh price 

for sawn grade II wood of US$235 per cubic metre, Global Witness estimates that 

the Seng Keang Company’s minimum yearly output of processed timber from 

Tumring would be worth over US$13 million. 17

According to Minister Chan Sarun, between the point at which it officially commenced operations in Tumring and the end of 2005, the Seng Keang Company paid 

just short of US$600,000. In a sense questions regarding the amount Seng Keang 

Company paid in taxes are academic, given that the vast numbers of trees it cut 

illegally should not have been felled in the first place. Nevertheless, it is indicative 

of the overall loss to Cambodia, if only in financial terms, when one considers that 

taxing the syndicate’s 100,000 m3 annual round log consumption at the royalty lev- els applied to grade II wood—US$54 per cubic metre—would have netted the treasury US$5.4 million per year. 

Whilst Cambodian government timber export figures nosedived after the imposition of a logging moratorium, 18 international trade figures paint a rather different 

picture of the volume of the country’s timber exports. 19 These figures show that, between 2003 and the end of 2006, China imported from Cambodia a total of 28,000 

m3 of plywood worth US$16 million. Both plywood and sawn timber exports from 

Cambodia are taxed at 10% of their value and the total loss to the Cambodian government on untaxed plywood shipments to China between 2003 and 2006 may have 

amounted to US$1.5 million. 20 Losses on un-registered sawn timber appear to be 

double that figure.21 Global Witness is unable to say with certainty what percentage of these exports involved the Seng Keang Company. However, as the only 

known industrial-scale producer of plywood and veneer active in Cambodia at the 

time, it is highly likely that the firm played a significant role in the multi-million 

dollar trade in plywood. As perhaps the largest sawmill operator in the country, 

there is a strong possibility that it accounted for a sizeable share of the sawn wood 

trade as well. 

Impunity in Cambodia’s Forest Sector 

Legal Protection 

The prevalence of widespread illegal logging in Cambodia stands in stark contrast 

to the legal protections offered to the country’s forests and forest-dependent people. 

Over the past seven years, the Cambodian government has passed a plethora of different laws geared towards clarifying the ownership and governance of forested 

land. Legal provisions relating to Cambodia’s forests include a Land Law, Forest 

Law and a Community Forestry Sub-Decree. 

In spite of these laws, prosecutions for illegal logging in Cambodia are rare and 

convictions rarer. The impunity offered to the Seng Keang Company over the years 

offers an insight into how those with high-level political connections have been able 

to bypass the legal protections afforded to the country’s forests and forest-dependent 

people, thus undermining the rule of law. Appendix 2 of this paper provides a table 

documenting issues that Cambodia’s judicial authority should investigate relating to 

the activities of the Seng Keang Company. 

So far, Global Witness’ calls for a credible investigation into evidence of illegal logging presented in ‘‘Cambodia’s Family Trees’’ appear to have been ignored. Instead, 

the Cambodian government has banned the report and confiscated copies, the Prime 

Minister’s brother is reported to have issued a death threat against Global Witness 

staff entering Cambodia, 21 and the Cambodian Embassy in London issued a press 

release demanding a change in Global Witness’ leadership and a call to the 

organisation’s donors to cut funding. 22

How U.S. Legislation to Amend the Lacey Act will Help to Combat Illegal 

Logging and Associated Human Rights Abuse in Cambodia 

Despite the Cambodian government’s reluctance to investigate the evidence of 

widespread and systemic illegal logging and high-level corruption presented in the 

Global Witness report, it seems other governments may be more willing to take action. Global Witness welcomes the leadership that has been demonstrated by the 

U.S. in this regard. 

• The recently passed 2008 U.S. Senate Foreign Operations contains a provision 

that the Secretary of State shall send a list to the appropriate congressional 

63 

committees of Cambodian officials, and their immediate family members, who 

he has credible evidence to believe are involved in corruption relating to the extraction of natural resources. The following restrictions will then apply: 

Æ A ban on visas to enter the US. Æ A ban on ownership of property within the U.S. and confiscation of any existing property. Æ A ban on any U.S. citizen engaging in financial transactions to benefit the 

named officials. • The proposed amendment to the Lacey Act to help combat illegal logging will 

help to take this message one step further in a move which would be felt not 

only by the corrupt officials who enable illegal logging in Cambodia, but also 

by the loggers themselves. 

The Lacey Act currently regulates trade in fish, wildlife and a limited subset of 

plants by making it unlawful to import, export, transport or purchase any that are 

taken, possessed, transported or sold in violation of any U.S. State or, with respect 

to fish and wildlife only, any foreign law. The new Act would expand the Lacey Act 

so that violations of foreign law that apply to plants and plant products (and hence 

trees) fall within its domain. 

If implemented effectively, the proposed amendments would help to address the 

problem of illegal logging in Cambodia in the following ways: 

1. Cutting the Demand from Manufacturers: Addressing Regional Timber Flows 

Cambodia’s illegal loggers are driven by a strong economic incentive to export 

their products to overseas markets. Past Global Witness investigations have revealed that much of the logged Cambodian timber is illegally exported to China, 

Thailand or Vietnam. Statistics suggest that a large proportion of that timber is 

then processed and re-exported to other markets. 23 The U.S. has been the single 

largest importer of Chinese goods since 2000 and its share of total imports of wooden furniture, flooring and plywood reached 43 percent of Chinese exports in 2006. 24

It is also a major importer of timber products from Vietnam and Thailand. In 2006, 

the U.S. imported just short of US$881 million of timber products from Vietnam and 

US$514 million from Thailand. 25 It follows that some of the illegally-sourced timber 

flowing through China, Thailand and Vietnam could well end up on the U.S. market. By making it illegal to import or sell illegally logged timber, the legislation will 

increase pressure on Chinese, Thai and Vietnamese buyers to carefully source their 

products and to avoid the current practice of purchasing illegally logged Cambodian 

timber. With a reduced income stream flowing from these countries, the economic 

incentive for illegal logging in Cambodia could be significantly curtailed. 

2. Cutting the Demand from Consumers: Red Flags for Cambodian Timber Products 

entering the US 

Proposed changes to the Lacey Act would also expose imports of Cambodian timber to greater scrutiny. Cambodia’s laws protecting forested land, combined with a 

government moratorium on industrial logging in concession areas, make legal, largescale export-based logging in Cambodia almost impossible. It is worth noting that 

the only current form of large-scale legal logging in Cambodia—known as the ‘‘annual cutting coupe’’—is explicitly designed to provide for domestic timber demand 

only. 26 The proposed changes to the Lacey Act to include a requirement for basic 

information on the country where the timber was harvested and species of timber 

on all timber products would immediately allow U.S. law enforcement officials to 

identify products manufactured using timber taken from Cambodia as suspect and 

encourage greater caution on the part of U.S. purchasers. 

If the proposed amendments to the Lacey Act had been in place at the time of 

our report’s publication, or indeed a over a decade ago, U.S. law enforcement agencies could have been empowered to seize suspect timber products from Cambodia 

and would have helped to prevent imports such as the special brand of plywood veneer produced by the Seng Keang Company, produced at such a high cost to the 

Cambodian population, from entering the U.S. market. 

3. Setting an international precedent to combat illegal logging 

The global lack of legislation to prevent illegally logged timber from entering consumer markets has inevitably meant that over the years, the US, together with 

every timber importing country, has unwittingly purchased illegally logged timber 

from large-scale organized crime networks, similar to the Seng Keang Company. By 

doing so, U.S. markets will have helped to fund the activities of money launderers, 

corrupt officials and human rights abusers. 

US leadership on this issue would provide impetus for proactive actions in other 

markets such as the EU and other G8 countries. The logical next step for the U.S. 

would be to take leadership in this field one stage further, and encourage other imVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
64 

porters of timber products to adopt similar legislation to put a stop to the unregulated trade in illegal timber. Such leadership is sorely needed. Only when we have 

strong international action of this nature, will we able to crack down on the activities of ruthless, organized crime networks and their political patrons, who have historically been able to exploit the global gaps in legislation to their advantage. 

Thank you. 


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38330.006.eps
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REFERENCES 

llll 

1World Bank, ‘‘Structural Adjustment Credit to Cambodia’’, 2000. 

2Global Witness, ‘‘Deforestation without limits’’, July 2002, p.3. Between 1994 and 2000, the Cambodian government collected US$92 million in timber royalties. 3The World Bank, Cambodia—A Vision for Forestry Sector Development, 1999, p.i; 

Asian Development Bank Sustainable Forest Management Project, Cambodian 

Forest Concession Review Report, 2000, p.20. 4Global Witness interviews with local residents, 2000; UN Cambodia Office of the 

High Commissioner for Human Rights, Land Concessions for Economic Purposes in Cambodia, November 2004. 5 Cited in Global Witness, ‘‘Deforestation without Limits’’, July 2002, p.3. 

6The ‘‘road map’’ for forest sector reform is also known as the Independent Forest 

Sector Review. It can be downloaded from http://www.cambodia-forest-sector.net/. 7FAO, Global Forest Resource Assessment 2005, Annex 3—Global Tables, p. 233, 

ftp://ftp.fao.org/docrep/fao/008/A0400E/A0400E14.pdf. (Last downloaded 18 

March 2007) 8 Interviews with a confidential source, 2003 and 2004. 

9 In February 2007 Global Witness wrote letters to Lia Chun Hua as well as Seng 

Keang, Dy Chouch and Khun Thong and other Kingwood shareholders to ask 

about Lia’s current whereabouts. At the time of publishing, Global Witness has 

not received any responses to these letters. 


38330.007.eps
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10This authorisation is referred to in Ministry of Agriculture, Forestry and Fisheries 

‘‘Permission to Establish a Veneer Factory Granted to Seng Keang Import Export Co. Ltd’’, September 2004. 11 Interviews with loggers 2005; field observations 2005 and 2006. 12 Interviews with resin tappers, 2006. 13 Interviews with local residents, 2005. 14 Interviews with villagers and loggers, 2005. 15 UN Cambodia Office of the High Commissioner for Human Rights, Land Concessions for Economic Purposes in Cambodia, A Human Rights Perspective, Annex 

1, November 2004. 16Global Witness field observations, September 2006. 17 Interviews with timber traders, 2006. 18Forest Administration, ‘‘Cambodia: Forestry Statistics 2004’’, May 2005. 19World Trade Atlas (for 2003 and 2004), http://comtrade.un.org/; China Customs 

Statistics Yearbook (for 2005) and China Customs (for January to November 

2006). 20 UNESCAP, ‘‘Trader’s Manual for Least Developed Countries: Cambodia’’, 2003, 

http://www.unescap.org/tid/publication/ 

t&ipub2320lpart3.pdf. (Last downloaded 10 April 2007); National Bank of 

Cambodia, ‘‘Stock Taking on Restrictions of Capital Flows’’, August 2006, http:// 

www.aseansec.org/carh/Capital%20Account% 

20regime%20files/Cambodia%20Capital%20Account%20Regime.pdf. (Last 

downloaded 10 April 2007). 21 References to this threat are drawn from an article by Douglas Gillison and Yun 

Samean, published in the Cambodia Daily on June 5 2007. In it, the Prime Minister’s brother and Kompong Cham provincial governor Hun Neng is quoted as 

saying: ‘‘If they (Global Witness staff) come to Cambodia, I will hit them until 

their heads are broken.’’ 22The press release can be viewed at http://www.globalwitness.org/mediallibraryl 

detail.php/566/en/globallwitnesslmustlstopl 

activitieslandldefamationltol 

discreditlthelimageloflthelroyall 

governmentloflcambodialfromlnowl•andlforlgood. 23See for example http://assets.panda.org/downloads/G8l 

meetinglJune2002.pdf; http://www.globaltimber.org.uk/china.htm; http:// 

www.globaltimber.org.uk/indochina.htm; Deutsche Press Agency, Vietnam’s furniture exporters running out of wood, June 11, 2007; in its Tropical Timber 

Market Report of 1-15 November 2006, the ITTO states that roughly 70% of 

timber which China imports is subsequently exported. 24Forest Trends, China and the Global Market for Forest Products: Transforming 

Trade to Benefit Forests and Livelihoods, March 2006, p.11; Peter Goodman 

and Peter Finn, ‘‘Corruption Stains Timber Trade—Forests Destroyed in China’s Race to Feed Global Wood-Processing Industry’’, April 2007. 25 United States International Trade Commission, ITC Trade Dataweb, http:// 

dataweb.usitc.gov/. 26Statement on Agriculture Sector Development, Delivered by H.E. Dr. Chan Sarun, 

Minister of Agriculture, Forestry and Fisheries at Cambodia Development Cooperation Forum, June 19-20, 2007, http://www.cdc-crdb.gov.kh/cdc/firstlcdcf/ 

session1/statementlchansarunleng.htm (last downloaded on September 7, 

2007). 

68 

[A letter submitted for the record by America’s Imported Wood 

Suppliers, Distributors, and Users follows:] 


38330.009.eps
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[A statement submitted for the record by Barry Gardiner, MP, 

The Prime Minister’s Special Envoy for Forestry, follows:] 

Statement submitted for the record by The Honorable Barry Gardiner, 

Member of Parliament, The Prime Minister’s Special Envoy for Forestry 

My name is Barry Gardiner. I am a Member of Parliament in the United Kingdom and I welcome the opportunity to give evidence to the committee hearing in 

my capacity as the United Kingdom Prime Minister’s Special Envoy for Forestry 

and also as the Co-Chair of the Illegal Logging Dialogue of the GLOBE Legislators 

Forum. 

In my evidence I wish to suggest to the Committee that the eyes of the world are 

fixed on the leadership role that the United States has taken on the need to combat 

illegal logging. Your recognition that illegally harvested timber imports are underVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00073 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY

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cutting domestic timber producers is one that resonates around the globe. A recent 

study by the American Forest and Paper Association has suggested that such imports depress prices of wood products by between 7 and 16%. This is a substantial 

loss to domestic producers. 

This finds its counterpart in producer countries where losses from illegal logging are estimated to cost governments in the region of $15—20 billion per year in lost 

revenues. These are revenues that could be utilised for education, healthcare and 

other social programmes in some of the poorest regions of the world. This suggests 

that illegal logging not only distorts free and fair trade, but is also a significant contributor to global poverty and the need for aid. 

It is not my purpose in this evidence, however, to reiterate the powerful economic, 

environmental and ethical reasons for taking strong legislative action against the 

illegal logging trade. I am confident that these will be made more appropriately by 

other individuals and organisations from within the United States. Rather, I wish 

to provide information to the Committee about the debate and actions being taken 

elsewhere in the international community that may be seen to complement and anticipate your country’s decision. 

International efforts over the last two decades as part of donor development programmes have largely focussed on supply-side measures by seeking to tackle forest 

governance. Their success has been limited. Private sector forest certification 

schemes which aimed to improve forest management by creating market incentives 

were adopted primarily by producers in temperate regions and even then did not 

always see the premium return on investment they anticipated. 

The result is that there has been little impact on reducing illegal logging. Timber 

from illegal harvests, worth billions of dollars annually, has continued to pour into 

western consumer markets. This has led to the conclusion in certain countries that 

demand side, as well as supply side measures were essential if we were to succeed 

in tackling the problem. 

Government Procurement Programmes are one way in which European and other 

national governments have sought to give a lead to the market. By insisting that 

timber and timber products used in any contract of public works must be legally 

sourced and sustainably managed, governments have sought to encourage major 

contractors to develop supply chains where timber and timber products are both 

legal and sustainable. Whilst such schemes play an important role in providing 

leadership, the fact that government procurement covers only a relatively small percentage of construction projects has meant that they have not proven effective in 

transforming market practice. 

European Union Member States have adopted a Forest Law Enforcement, Governance and Trade (FLEGT) process whereby producer countries receive assistance to 

improve governance under a Voluntary Partnership Agreement (VPA). These VPAs 

enable countries to improve their capacity and due diligence through aid whilst developing credible licensing systems to verify that timber imported to the European 

Union has been legally produced. 

VPAs are presently being negotiated with Malaysia, Indonesia, Ghana and Cameroon. Other African countries have indicated their interest in developing such partnerships under which border agencies in the EU would be able to deny entry to 

shipments of timber from partner countries unless they were covered by a FLEGT 

license. 

Whilst FLEGT voluntary partnership agreements may prove a significant step in 

combating illegal logging it is important to note that the first VPA is not expected 

to become operational before 2009. The GLOBE Legislators dialogue on Illegal Logging, which I co-chair, has examined the potential for a wider licensing scheme at 

a recent conference in Berlin. Here representative legislators from a range of G8, 

as well as producer countries such as Indonesia, Brazil, Malaysia, DRC, Congo 

Brazzaville, Gabon, Cameroon and Ghana, indicated that a global licensing scheme 

might provide a strong measure to combat illegal logging. It is highly likely that 

such a scheme may form part of the recommendations made by the Globe dialogue 

to the G8 summit in Japan in June 2008. 

Were a global licensing scheme to be adopted by the G8, it is important to appreciate the very real limitations that even such a comprehensive measure might suffer. Certain countries might still choose not to enter into the requisite voluntary 

partnership agreements. Furthermore, it is possible for illegally harvested timber 

from a voluntary partner country to circumvent the regime via trade through third 

(non-VPA) countries. 

It is for this reason that the EU is currently examining a range of additional options which would be able to close off such loopholes. Chief amongst these is an option modelled upon the U.S. Lacey Act that effectively mirrors the provisions of the 

Combatting Illegal Logging Act 2007. The European Commission has completed a 

71 

public consultation on these options and is currently undertaking an impact analysis which is expected to report in early 2008. 

The G8 plus 5 dialogue on Illegal Logging that was launched at the Gleneagles 

Summit in 2005 is due to conclude under the Japanese presidency next June. The 

US, therefore could not be considering this legislation at a more important time. It 

is not too strong to suggest that decisive action by the U.S. to combat illegal logging 

through this legislation could set a precedent that would be followed, not only by 

the European Union, but by much of the rest of the world. 

In a telephone conversation with the Japanese forestry Minister earlier this year, 

before his untimely death, Minister Matsuoka stated to me that he considered the 

possibility that the United States might pass the Combatting Illegal Logging Bill 

as ‘‘Epoch Making’’. Minister Matsuoka was a personal friend and long standing 

champion of the battle against illegal logging. I knew him not to be a man of grandiloquent statement. I therefore asked the translator whether she was sure that she 

had translated him correctly in saying this. She spoke with him again and confirmed that these were indeed the words he intended. 

I believe that Minister Matsuoka was right. The United States has the capacity 

to precipitate a global fightback against illegal logging. The legislation proposed is 

elegant and non-bureaucratic. It applies Occam’s razor to the problem by forcing due 

diligence back down the supply chain, rather than by insisting on specific burdensome documentation. It encourages suppliers to take the trouble to do things properly from the very beginning. 

It is my firm view that both supply side and demand side measures must be employed in our determination to end this unfair and illegal trade. It is a trade that 

undercuts legitimate businesses and impoverishes still further some of the poorest 

communities in the world. If we examine the different ways of tackling the problem, 

we find: 

• Governance reform in producer countries through donor assistance. 

• Systems of forest certification. 

• Procurement regimes that favour legally harvested and sustainable timber in 

consumer countries. 

• Licensing schemes. 

All of these have a role to play in the fight against illegal logging. But the Combatting Illegal Logging Act 2007 is far and away the least cumbersome, and most 

elegant weapon in our armoury. It adds no burden to the people who are already 

getting it right and it incentivises those who know they are currently getting it 

wrong, prompting them to do the right thing. That is what good law should be all 

about. 

72 

[A letter submitted for the record by Brad Gilman, Robertson, 

Monagle & Eastaugh, on behalf of Trinity Yachts, Inc., follows: 


38330.011.eps
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[A statement submitted for the record by Dr. James Grogan, Yale 

University School of Forestry & Environmental Studies, New 

Haven, Connecticut, follows:] 

Statement submitted for the record by Dr. James Grogan, Yale University 

School of Forestry & Environmental Studies, New Haven, Connecticut, & 

Instituto do Homem e Meio Ambiente da Amazoˆnia (IMAZON), Bele ́m, 

Para ́, Brazil 

I welcome this opportunity to provide a statement supporting H.R. 1497, Legal 

Timber Protection Act, legislation that would amend the Lacey Act Amendments of 

1981 to prohibit trade in the United States in timber harvested illegally from any 

domestic or international source. 

I received a PhD in Forest Ecology from Yale University’s School of Forestry & 

Environmental Studies in 2001. I have spent a total of 12 years conducting 

fieldwork in the Brazilian Amazon, five of those years researching my doctoral dissertation, ‘‘Bigleaf Mahogany (Swietenia macrophylla King) in Southeast Para ́, Brazil: A Life History Study with Management Guidelines for Sustained Production 

from Natural Forests.’’ I have also participated in the policy debate about mahogany’s commercial and conservation status by providing technical advice to the forest 

products industry, the Brazilian government, and the international community 

through CITES Working Groups on Mahogany. 

In my view, the proposed amendment to the Lacey Act would provide a powerful 

mechanism for preventing illegally sourced supplies of high-value Amazonian timber 

from entering the U.S. market. This would: 1) protect highly vulnerable natural timber populations from commercial extirpation and encourage the transition to susVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00077 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY

38330.012.eps
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tainable forest management systems; 2) reduce pressure on unlogged primary forests, thereby slowing rates of deforestation and associated emissions of greenhouse 

gases; and 3) reduce conflict between loggers and indigenous peoples facing illegal 

incursions into their territories. 

I began my study of mahogany after the unsuccessful 1994 proposal to list mahogany on CITES Appendix II. While relatively little was known at that time about the 

natural history of mahogany or its ecology, there was agreement in the field that 

an accurate assessment of the commercial and conservation status of mahogany 

would require this information. Consequently, I went to Brazil looking for field sites 

to study mahogany. The USDA Forest Service’s International Institute of Tropical 

Forestry was the principal funder for my doctoral research. Since beginning this 

work I have published numerous scientific and technical articles on mahogany and 

related topics. A copy of my curriculum vita is attached to this statement. 

International demand for high-value tropical timbers like mahogany, Spanish 

cedar (Cedrela odorata), ipeˆ (Tabebuia spp.), and ramin (Gonystylus spp.) is the root 

cause of continued illegal exploitation of these species from ever more remote American, African, and Asian tropical forests. But illegal logging contravenes forest laws 

in all producer nations meant to protect renewable natural resources from uncontrolled, unsustainable exploitation. Further, by allowing illegal supplies into our 

markets, we undermine the business model of legal producers by sustaining demand 

for cheaper, destructively harvested supplies. 

The impact of illegal logging on natural populations 

Being highly sedentary creatures, timber trees are especially vulnerable to illegal 

exploitation—there is little hiding a mahogany tree worth thousands or even tens 

of thousands of dollars in finished lumber, no matter how remote its forest habitat. 

Plants are at least as vulnerable to population collapse after illegal harvests as animals and fish, and in my view should be afforded the same protections under the 

Lacey Act. 

Tropical trees typically occur at extremely low densities across large areas. In the 

densest commercial stands of big-leaf mahogany recorded in Brazil, one commercial 

tree occurred in every five acres of forest, while more common densities were one 

commercial tree in 20 acres. Facing no constraints on harvest intensity or methods, 

illegal loggers locate and fell 95% or more of trees that can pay their way out of 

the forest, including trees smaller than legal minimum diameter felling limits. 

While adult and sub-adult populations are removed at extremely high rates, seedlings and saplings are rarely in place in closed forest at the time of logging to replace harvested trees. In combination, this means that population recovery after logging will take a century or more, if it will be possible at all, assuming that logged 

forests can be left to recover without further intervention. 

As timber species become commercially extirpated at local scales, illegal loggers 

shift their activities deeper into unlogged primary forests in search of fresh supplies, 

and local zones of commercial exhaustion coalesce into regional and then national 

zones where future harvests are imperiled. This has been the pattern for big-leaf 

mahogany in Latin America for over two hundred years now, but especially in recent decades in South America. This pattern currently continues in Peru in spite 

of mahogany’s 2002 listing on CITES Appendix II, and is being repeated for other 

high-value species in the Amazon such as Spanish cedar, ipeˆ, and jatoba ́ (Hymenaea 

courbaril). 

The impact of illegal logging on forests 

Illegal logging is driven by market demand creating prices high enough to offset 

risk associated with unlawful activities in remote forest regions. Illegal loggers open 

roads extending hundreds of miles from frontier sawmill processing centers into 

unlogged forests. Researchers at the Instituto do Homem e Meio Ambiente da 

Amazonia (IMAZON), my institutional affiliation in Brazil, estimate that mahogany 

could be profitably—if currently illegally—logged within up to 99% of its natural 

range in Brazil, including some of the most remote southwestern Amazon forests remaining in the states of Amazonas and Acre. As has been well documented, these 

roads open previously inaccessible regions, including Indigenous Lands and protected areas, to agribusiness, cattle ranchers, and small-holder agriculturists, initiating large-scale deforestation and land-use transformation. By occurring rapidly 

and without planning, this process is generally chaotic, destructive, and frequently 

marred by violence. 

The impact of illegal logging on people 

Illegal logging brings with it a host of unavoidable negative consequences for 

forest communities. In the Amazon, indigenous peoples generally have few resources 

to defend against loggers illegally extracting high-value timbers from their terriVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00078 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
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tories. Indigenous Lands were exploited throughout Brazil during the 1980s and 

1990s for mahogany, with or without consent from indigenous communities, often 

by violent means costing indigenous lives. This occurred as well in Bolivia and Ecuador, and continues today in Peru. As logging fronts penetrate deeper into primary 

rainforests, bringing land-use changes and market centers with them, indigenous 

communities must cope with deforested border areas prone to frequent fires, and 

with repeated incursions by loggers, ranchers and settlers into their territories. 

Rather than building a trained labor force capable of planned, best-practices forest 

management in regions with vast potential for long-term sustainable timber production, illegal loggers provide low-wage employment for unskilled workers under extreme and exploitative working conditions. I have seen many of these operations in 

the field; disease, injury, and even fatality from logging accidents are common, in 

sharp contrast with legal logging outfits that comply with forest and labor laws, producing timber under current best-practices management systems. 

How H.R. 1497 would help curtail illegal logging 

Big-leaf mahogany’s eventual listing on CITES Appendix II in 2002 was in large 

measure an international response to widespread illegal logging in Brazil during the 

1990s. But this response came very slowly, after nearly a decade of wrangling 

among nations, and only after the Brazilian timber sector specializing in 

mahogany—and its principally North American clients who underwrote their activities—essentially got what it wanted, which was time enough to exploit Brazil’s remaining high-density stands before the gates closed against illegal supplies. No 

legal mechanism existed in the US, destination for more than 90% of internationally 

traded volumes of mahogany during that period, to address widespread illegality in 

the trade that was acknowledged by industry and government sources alike. This 

problem has persisted with Peruvian mahogany even after the 2002 CITES listing. 

H.R. 1497, the Legal Timber Protection Act, the proposed amendment to the 

Lacey Act, would combat and curtail illegal logging by creating a powerful mechanism to challenge the legal status of timber supplies arriving in the US, the largest 

market in the world for timber products, where demand for high-value timber drives 

illegal and unsustainable logging practices in many tropical regions. Such a mechanism could have been used to halt imports of illegally harvested mahogany from 

Brazil during the 1990s, to the benefit of natural populations that would today be 

available for sustained-yield management, of vast forested regions where deforestation rates would have been much slower (and greenhouse gas emissions from 

burned forests much lower), and of forest communities for having fewer conflicts and 

high-value forest resources preserved for future use. 

The Legal Timber Protection Act could halt the entry of illegal timber supplies 

into the U.S. market. By doing so, it could as well slow the current rapid loss of 

high-value timber populations, reduce rates of deforestation in the tropical world 

with associated greenhouse gas emissions, and prevent conflicts between loggers 

and indigenous peoples. 

I thank the Subcommittee on Fisheries, Wildlife, and Oceans for this opportunity 

to comment on the proposed change in U.S. federal legislation. 

A statement submitted for the record by Ari Hershowitz, 

Director, Biogems Project, Latin America, Natural Resources 

Defense Council, follows:] 

Statement submitted for the record by Ari Hershowitz, Director, 

Biogems Project, Latin America, Natural Resources Defense Council 

I am pleased to submit this statement for the record regarding H.R. 1497, the 

Legal Timber Protection Act on behalf of the Natural Resources Defense Council 

and our more than one million members and activists. We strongly support this bill 

and its simple goal to make it illegal to import and trade in illegal timber. 

As the Subcommittee has heard, the trade in illegal timber supports a worldwide 

network of criminal activities that devastates forests and wildlife, contributes to 

global warming, and causes more than a billion dollars in yearly losses to U.S. industry. NRDC can provide additional information, from our direct experiences in 

Peru, on the impacts of this illegal trade. 

This statement, however, focuses on the forfeiture provisions of the bill, and clarifies some of the misleading information presented by the bill’s opponents. This bill 

would authorize the forfeiture of timber and timber products when U.S. authorities 

can prove that these items were taken illegally. This is consistent with decades of 

76 

U.S. precedent for other stolen or illegal goods, including natural resource products 

such as wildlife and plants. 

ILLEGAL PROPERTY HAS BEEN SUBJECT TO FORFEITURE UNDER 

LONGSTANDING U.S. LAW 

Whether the subject is protected parrots, illegally imported salmon, pilfered Inca 

artifacts, or stolen art, U.S. law has consistently provided for in rem forfeiture, regardless of the knowledge of the person in possession of the items. To do otherwise, 

as opponents of this bill recommend, would allow illegal goods to continue in commerce even after the government had proven that they were illegal. This is a brazen 

proposition. It would be a radical departure from existing law and longstanding 

practice. 

Contrary to the claims of this bill’s opponents, the Lacey Act has consistently and 

repeatedly been interpreted to provide for forfeiture of illegal wildlife regardless of 

the knowledge of the importer. In a case involving the imports of parakeets from 

Peru, the court held that ‘‘the legislative history of the applicable amendments of 

the Lacey Act unequivocally establishes that the defense of ‘‘innocent owner’’ is not 

available in forfeiture actions of wildlife brought pursuant to this Act.’’ U.S. v. 2,507 

Live Canary Winged Parakeets, 689 F. Supp. 1106 (S.D. Fla., 1988) (emphasis 

added). In an even earlier decision, the Ninth Circuit Court of Appeals upheld forfeiture of Indonesian parrots that were imported through Singapore, although the 

importer did not know that the original export from Indonesia was illegal. The court 

held that ‘‘[t]he conservation purpose of the statute could be undermined significantly by permitting such importers to avoid the application of the statute by trading through intermediary countries.’’ 685 F.2d at 1134 (emphasis added). 

This is no less true for timber: allowing anyone to maintain possession and profit 

from illegal property, as opponents of the bill recommend, creates a perverse incentive for foreign timber mafia to pass off their merchandise through unsuspecting 

intermediaries. 

Indeed, the Civil Asset Forfeiture Reform Act (CAFRA), which opponents of 

H.R. 1497 hold up as their model, makes it clear that ‘‘no person may assert an 

ownership interest under [CAFRA] in contraband or other property that it is illegal 

to possess.’’ 18 USC § 983(d)(4). This simply restates the traditional U.S. rule that 

a purchaser of stolen or otherwise illegal property—even a good faith purchaser— 

does not get good title to the property. The courts have consistently applied this rule 

to wildlife trade, both before and after CAFRA. Deep Sea Fisheries, Inc. v. 144,774 

Pounds of Blue King Crab, 410 F.3d 1131 (9th Cir. 2005). (Rejecting an importer’s 

ownership claim to 600,000 pounds of salmon exported from Taiwan without the 

necessary permits and finding that, by violating the Lacey Act, the salmon constitutes ‘‘contraband or other property that it is illegal to possess.’’) 

The Lacey Act’s forfeiture provisions are also consistent with the treatment of 

other kinds of illegally obtained property under U.S. law. For example, imported 

cultural artifacts are subject to forfeiture regardless of the knowledge or culpability 

of the importer. See David N. Chang, Stealing Beauty: Stopping the Madness of Illicit Art Importation, 28 Hous. J. Int’l L. 829, 857 (2006). The Convention on Cultural Property Implementation Act (CPIA) empowers U.S. officials to seize illegally 

imported foreign cultural property and restrict its importation. Under the CPIA 

even a ‘‘good faith purchaser’’—while immune from criminal prosecution—must still 

give up the pieces, usually to be turned over to the country of origin. Some foreign 

jurisdictions, like Switzerland, previously allowed good faith purchasers to keep stolen goods, but ‘‘U.S. courts have generally rejected application of the Swiss rule. See, 

e.g., Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine 

Arts, Inc., 917 F.2d 278 (7th Cir. 1990)(rejecting defendant’s claim to have acquired 

good title to stolen Byzantine mosaics and applying Indiana’s rule that a thief cannot transfer good title even to a good-faith purchaser).’’ Patty Gerstenblith & Bonnie 

Czegledi, International Cultural Property, 40 Int’l Lawyer 441, 445 n.25 (2006). See 

also U.S. v. An Antique Platter of Gold, 184 F.3d 131 (2d Cir. 1999) (Holding that 

there is no ‘‘innocent owner’’ defense to forfeiture of an item of ‘‘classic contraband, 

an item imported into the United States in violation of law.’’) 

Opponents of this bill do not present a single example of illegally sourced 

property that is not subject to forfeiture under U.S. law. Yet they say that 

timber should be treated differently—that the chain-of-custody of timber is too hard 

to trace. This claim simply does not stand up to decades of experience with stolen 

cultural artifacts, World War II era paintings or wildlife. Timber is far more massive than any of these items; in many cases, timber-bearing trucks can be seen from 

satellite imagery. And timber has a single, identifiable geographic source: a tree. If 

any item in commercial trade could be traced, it is timber. The fact that the chainVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00080 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
77 

of-custody of timber generally cannot be traced today points precisely to the need 

for this legislation. 

It is the nature of an illegal trade network that the origins of its products 

are hard to trace, and this makes it harder for honest people to do business. It is the job of governments to create incentives to bring such trade into the 

open. 

H.R. 1497, with the amendments introduced by Congressman Blumenauer, will 

create these necessary incentives. That is why we proudly join a broad coalition of 

industry, labor and environmental groups to support this bill, and we thank the 

Subcommittee again for the opportunity to submit these comments. 

[A letter submitted for the record by Jane Hogan, SecretaryTreasurer, Ontario Hardwood Co., Inc., follows: 


38330.013.eps
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[A letter submitted for the record by Lawrence Q. Hutchins, 

President, Quail’s Nest Industries, follows:] 

A statement submitted for the record by Peter T. Jenkins, 

Director, International Conservation, Defenders of Wildlife, 

follows:] 


38330.014.eps
79 

Statement submitted for the record by Peter T. Jenkins, 

Director of International Conservation, Defenders of Wildlife 

Madam Chairwoman and members of the subcommittee, I am writing on behalf 

of Defenders of Wildlife (‘‘Defenders’’) regarding the legislative hearing on 

H.R. 1497 to amend the Lacey Act Amendments of 1981 to extend its protections 

to plants illegally harvested outside of the United States, and for other purposes 

(‘‘Legal Timber Protection Act’’). Defenders endorses the testimony provided by Alexander von Bismarck of the Environmental Investigation Agency (‘‘EIA’’) on the 

above Act, and would like to present additional background information to support 

this position. 

Defenders of Wildlife was founded in 1947 and is a national non-profit organization with more than 500,000 members and supporters dedicated to the protection 

and restoration of all wild animals and plants in their natural communities. The 

major cause for the current decline in biodiversity is habitat loss and fragmentation. 

Defenders is working to protect important habitats and keystone species, with the 

understanding that the protection of these species is vital to the health and stability 

of the greater ecosystem and other species. 

Global forests represent critical habitats for a variety of species, and are under 

threat worldwide by unsustainable harvesting and illegal logging. Curbing the trade 

in illegally sourced wood and wood products is vital in protecting species that rely 

on intact and unfragmented forest habitat. 

Wildlife are affected by illegal logging primarily through the loss and fragmentation of habitat, but also through a subsequent rise in illegal hunting and trade in 

meat products, through increased human-wildlife conflict, and by the heightened 

risk of emerging diseases transferred between humans and wildlife. On a broader 

level, illegal logging affects people and wildlife worldwide through the loss of ecosystem services such as carbon sequestration and the regulation of climate and rainfall. As documented in the Stern Report in 2006, deforestation causes 24% of global 

carbon dioxide emissions and 18% of global greenhouse gas emissions, amounting 

to more emissions than all transport worldwide. 

The following are examples of species under threat largely because of deforestation. These species would benefit directly from increased protection through the 

passing of H.R. 1497: 

Borneo and Sumatra—Home of the Orangutan: 

Orangutans require a large home range. Bornean forests generally support no 

more than one to three orangutans per square kilometer, and Sumatran forests at 

most six or seven. Indonesia is undergoing some of the most rapid deforestation in 

the world, and is likely to lose all of its primary forest by the year 2012. By 2022, 

Sumatra and Borneo are likely to lose 98% of their remaining forest. A report published by the United Nations Environment Programme (UNEP) in 2007 declared a 

state of emergency for the orangutan, predicting the species to go extinct within the 

next 20 years. Approximately 80% of timber exported from Indonesia is believed to 

be illegally sourced. 

The Congo Basin—Apes, Bushmeat and Emerging Diseases: 

The Congo Basin constitutes the world’s second largest forest, and is home to a 

rich diversity of plants, animals, and indigenous peoples. Due to poor local legislation and law enforcement and often backed by international financial institutions 

and foreign-owned banks, illegal logging remains a large problem. In addition to the 

obvious problems associated with habitat loss and fragmentation, the illegal timber 

trade in this region is also associated with the illegal trade in wild meat, or 

bushmeat, including gorillas and chimpanzees, and other protected species. This 

carries not only risk of extinction for local ape populations, but also poses a serious 

disease risk to the local human population, as documented by repeated outbreaks 

of the Ebola virus and other zoonotic diseases associated with the handling and consumption of bushmeat. 

Russia’s Far East—Habitat of the Amur Leopard and Siberian Tiger: 

Illegal logging does not merely affect tropical species. In the Russian Far East, 

approximately half of all timber harvested is done so illegally, and contributes to 

lasting corruption within state forest management and the timber industry. The 

Amur leopard is the rarest felid species on earth, with only 25-34 individuals currently remaining in the wild. Though also critically endangered, the Siberian tiger 

fares slightly better with up to 520 remaining individuals in the wild. A report by 

the World Wildlife Fund in 2002 linked the future risk of extinction for the Amur 

leopard and the Siberian tiger to illegal logging. 

80 

Amazon Basin—Mahogany: 

Illegal logging of mahogany is not only detrimental to the survival of the species 

and to the ecosystem at large; it also constitutes a grave threat for several indigenous peoples that have been living in chosen isolation in the Peruvian Amazon, 

through forced labor in indentured servitude, exposure of novel diseases, and direct 

violent conflict with representatives of the illegal logging industry. In 2005, 83% of 

all mahogany exporters from Peru were involved in the trade in illegally-sourced 

mahogany, in direct violation of the Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES). Mahogany represents a species 

that is difficult to regenerate. 

CONCLUSION 

For the reasons stated above and in the EIA testimony, we endorse an amendment to the Lacey Act as proposed in H.R. 1497. 

[A statement submitted for the record by the World Wildlife 

Fund and TRAFFIC follows:] 

Statement submitted for the record by the World Wildlife Fund & TRAFFIC 

Thank you for the opportunity to provide written testimony on the Legal Timber 

Protection Act (H.R. 1497). World Wildlife Fund (WWF) is the largest private conservation organization working internationally to protect wildlife and wildlife habitats. We currently sponsor conservation programs in more than 100 countries, 

thanks to the support of 1.2 million members in the United States and more than 

5 million members worldwide. TRAFFIC is the wildlife trade monitoring program 

of WWF and IUCN-World Conservation Union (IUCN), and is a global network, 

with 25 offices around the world. TRAFFIC works to ensure that trade in wild 

plants and animals is not a threat to the conservation of nature. This testimony is 

on behalf of both WWF and TRAFFIC. The testimony discusses the following: (1) 

WWF’s interest in H.R. 1497; (2) background on the illegal timber trade; (3) current 

efforts to address illegal timber trade; (4) the importance of H.R. 1497; (5) WWF’s 

comments on H.R. 1497; and (6) implementation of H.R. 1497; and (7) a conclusion. 

1. WWF Interest in H.R. 1497 

WWF’s interest in H.R. 1497 stems from its work conserving important forest ecoregions across the globe. These include Borneo-Sumatra, the Congo Basin, the Amazon, Russia (the Amur) and China (the Heilong). The illegal timber trade threatens 

our work in each of those eco-regions. For example, in the Russian Far East, we 

have witnessed the widespread use of ‘‘cleansing logging’’ permits—issued to remove 

wind-fallen trees—as tools to remove commercial volumes of timber at an industrial 

scale. We have also witnessed logging in legally designated protected areas. Such 

logging frequently occurs in and has destroyed some of the best available habitat 

for the critically endangered Siberian (Amur) tiger. WWF has documented the extensive and complicated supply chains of this illegally logged oak, ash and birch 

wood from the stump in the Russian Far East to specific Chinese factories and all 

the way to the shelves of specific, well-known American flooring and furniture retailers. In an effort to stem this trade flow, WWF has trained Russian and Chinese 

border guards on how to identify forged or falsified timber documents and has 

worked directly with Russian wood suppliers and Chinese buyers towards phasing 

out illegally logged wood from their supply chains. 

In Indonesia, our Eyes on the Forest ground team (http://www.eyeson 

theforest.or.id/) issues regular eyewitness reports of high-value wood being harvested in legally protected areas, sometimes in collusion with government officials, 

and sent to high volume pulp and paper mills with markets in the U.S., Japan, 

China and Europe. WWF has worked with the government of Indonesia, World 

Bank, USAID and others for several years to develop practical trade and policy-related solutions to the illegal logging problem in that country. 

In the Peruvian Amazon harvest and trade of valuable timber species such as bigleaf mahogany and Spanish cedar, a key national economic development activity, 

has been seriously undermined by illegal logging. WWF is leading a dynamic partnership with selected private forest concessions, enterprises and indigenous communities, in cooperation with Peruvian government agencies and regional and local 

governments and international aid agencies such as USAID and WWF-Netherlands, 

to promote a legal and sustainable forest trade in this region. The partnership vision is that, by 2015, 2 million hectares of forest concessions and 500 thousand hectares under indigenous communities will be certified; an economically viable and soVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00084 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
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cially responsible forest sector, based on competitive and innovative forest enterprises, offering high quality wood products legally will be established and; Peru’s 

forest exports will top U.S. $500 million per annum, from legal and verifiable 

sources and chains of custody, directly benefiting local communities and forest enterprises. 

Given the significant investment that WWF has made in protecting these and 

other forested eco-regions around the world, and our significant investment in supporting the development of legal and sustainable wood products trade globally, we 

take the threat of illegal logging very seriously. It is our belief that H.R. 1497 will 

help drive the demand for legally sourced wood, and as such, will contribute significantly to global forest conservation and sustainable use. 

2. Background on the Illegal Timber Trade 

Illegal logging, defined here as the harvesting, transporting, processing or trading 

of wood in contravention of national and international laws, plagues the global 

forest products industry. The criminal wood trade transpires in a number of ways, 

including: logging in protected areas or national parks; over-harvesting or disobeying cutting permit prescriptions; and avoiding government tax and royalty payments. Roughly one-third of hardwood products traded globally are thought to be 

of suspicious origin and 10% of U.S. wood-based imports are sourced from areas of 

high risk for illegal wood export. While illegitimate forest harvesting is mostly relegated to developing and transitional economies marked by poor national governance and corruption, much of this wood enters the world-wide market. The United 

States is the largest forest products consumer in the world, imports 20% of global 

forest products exported and is a significant importer of ‘‘emerging market’’ wood 

where illegal logging is at its worst. Over the last 6 years, according to ITC data, 

U.S. wood product imports increased by almost 60%. As such, American consumers 

are unwittingly complicit in driving illegal logging overseas. 

From an environmental perspective, illegal logging contributes to uncontrolled deforestation and degradation; each year we permanently lose 50 million square miles 

of forest, roughly the size of Louisiana, to non-forest land uses of lesser environmental value. Forests, in protecting wildlife and fish habitat, biodiversity, soil, 

water and air quality, play an irreplaceable role in ecological and human health. 

Illegal logging jeopardizes these values. Additionally, deforestation contributes up to 

20% of global carbon emissions and thus has a significant impact on climate change. 

Furthermore, illegal logging has been associated with a number of separate but 

indirectly related natural resource crises such as wildlife smuggling, flooding, the 

criminal setting of large-scale forest fires for the purpose of land conversion to 

monoculture commodities such as palm oil, and the building of non-sanctioned and 

poorly designed road systems throughout once pristine tropical ecosystems. These 

serious environmental issues are oftentimes accompanied by even more serious social issues. Over 50 million indigenous people depend on forests for their livelihood 

and cultural identity. Illegal logging can put native customary land rights, whether 

communal or otherwise, for hunting, fishing, and farming and subsistence at risk. 

Competition over resources sometimes results in violence and human rights violations. In many developing economies where gazetting of land and legal establishment of land tenure are incomplete, local communities and indigenous groups are 

especially challenged with defending their land and forest rights. Poor forest governance contributes both to environmental and social degradation. 

For some, even more alarming than these environmental and social impacts are 

the economic repercussions of the illegal timber trade. Illegal timber can be bought 

at half the price of legal timber in certain regions, artificially depressing global wood 

prices by 7-16%. The World Bank estimates that illegal logging costs the forest industry over $10 billion per year and governments an additional $5 billion annually. 

In the United States alone, the domestic forest product industry loses approximately 

$1 billion a year in export opportunity costs and undervalued sales. For the American forest products industry where purchased wood inputs can comprise up to 40% 

of the cost of production, these losses represent a significant hit on margin. 

The myriad impacts of illegal logging are clearly demonstrated in the case of Indonesia, where the forest products industry accounts for 20% of the nation’s non-energy exports. Even the most conservative estimates indicate that over 60% of Indonesia’s natural hardwood production is illegitimate. The country is losing forests at 

an unprecedented level, with nearly 7,800 square miles disappearing annually. Most 

of its tropical lowland forests are expected to be cut over within the next decade, 

jeopardizing the thousands of endemic species which inhabit them, and the longterm survival of some of the most charismatic fauna in the world such as the endangered tiger, Asian elephant, Sumatran rhinoceros, and orangutan. Valuable tropical 

tree stands are cut unsustainably, at times replaced with acacia and palm oil 

82 

monocultures, leading to a decrease in tropical timber wood supply, a simplification 

of the forest products economy and a creation of unfortunate opportunity costs to 

national economic development. Furthermore, the Indonesian government is deprived of over one third of its potential forest industry revenues in unpaid taxes and 

fails to collect on $650 million annually in reforestation fund repayments and royalties alone. Losses of potential revenue translate to lost opportunity for sustainable 

economic development. Clearly Indonesia is suffering on several levels as a result 

of the unlawful timber trade. 

While deforestation is caused by both conversion and illegal logging, it is important to recognize that the ‘‘informal’’ timber industry is typically the gateway to 

other major drivers of deforestation. By its very nature, illegal logging is devoid of 

long-term planning for a sustained timber-based economy, thus facilitating land use 

conversion to other uses. For example, large-scale and illegal forest clearing of both 

low- and high-value hardwoods in Sumatra by the pulp and paper industry has 

made way for the palm oil industry to establish itself. Large-scale and illegal clearing and road building of the Brazilian Amazon jungles for tropical plywood and 

sawn-wood has made way for the soy bean industry to greatly expand its presence. 

Both the initial social, environmental and economic impacts of the ‘‘informal’’ timber 

industry, as well as its gateway effect, should give rise to deep concern on the part 

of the U.S. government. 

3. Current Efforts to Address Illegal Timber Trade 

Given the significant negative impacts of illegal logging on the lawful wood products industry, President George W. Bush created the ‘‘Initiative Against Illegal Logging’’ (PIAIL) in 2002 to support supply-side solutions to illegal logging within developing, producer countries. More than $15 million were contributed to partnership 

projects under the PIAIL, adding to the millions more invested under complementary public-private partnerships supported by non-governmental organizations like 

WWF over the last decade. As a result of these efforts, several useful tools were created, enhanced or adapted to combat the illegal wood trade including legality 

verification, remote-sensing forest monitoring, timber tracking, reduced impact logging, community-based forest management and protection and corporate responsible 

procurement programs. TRAFFIC has even helped to develop legality standards for 

Malaysia, Vietnam, China, Republic of Congo, Democratic Republic of Congo, Gabon, 

and Central African Republic 

Although these supply-side measures are important steps to addressing the problem, illegal logging continues relatively unabated because there is still a market for 

cheap, criminally procured, raw materials. As long as the buying market remains 

neutral on the legality issue, rampant unlawful logging will persist. In the words 

of Indonesian Forest Minister Mohamad Prakosa, ‘‘Expecting or asking one country 

to combat illegal logging while at the same time receiving or importing illegal logs 

of course does not support efforts to combat these forest crimes. In fact ‘‘allowing 

import and trade [in] illegally cut timber and associated products could also be considered as an act to assist or even to conduct forest crime.’’ 

Industry players on the buying side have responded to this challenge in a number 

of different ways including seeking legality verification, certified chain of custody 

and controlled wood, creating wood traceability and supplier audit programs, using 

technology such as Radio Frequency Identification (RFID) tags and genetic testing 

to verify log origin, partnering with environmental groups on stepwise programs to 

identify and eliminate unwanted wood such as the WWF Global Forest & Trade 

Network (GFTN), and even boycotting entire geographic regions in order to minimize their risk of inadvertently procuring illegitimate wood. These actions have 

yielded some positive results. For instance, over 13% of globally traded wood is managed under GFTN’s stepwise program to eliminate unwanted wood from supply 

chains. However, market penetration of these voluntary and sometimes costly efforts is not deep or broad enough to keep up with the rapid pace of illegal logging 

and deforestation. Industry-wide actions are needed to really transform the marketplace. 

Recognizing the need for universal demand-side measures, the EU is developing 

Voluntary Partnership Agreements (VPAs) with several producer countries identified as being at high risk for trading in illegal wood. Under the VPAs, licensing systems are being developed that will help importers distinguish between sanctioned 

and non-sanctioned exports. Timber products originating from partner countries but 

lacking the appropriate license will not be allowed entry into the EU. 

The United States has also recognized the need for demand side measures, stating 

at the 2005 G8 in Gleneagles, ‘‘We agree that tackling illegal logging requires action 

by both timber producing and consuming countries...We will act in our own countries...to halt the import and marketing of illegally logged timber.’’ 

83 

4. The Importance of H.R. 1497 

Despite a desire by the U.S. government to address illegal logging, the U.S. government still lacks a legal mechanism to identify or exclude most categories of illegal wood as it enters the U.S. Unless a tree species happens to be one of the relatively few covered under the Convention on International Trade in Endangered 

Species (CITES) or the Endangered Species Act (ESA), there is no legislative or regulatory remedy available to address the illegal wood import issue. Under the status 

quo, even if the Department of Justice has full knowledge of imports of wood illegally harvested elsewhere but not listed under CITES or the ESA, it can take no 

action against the perpetrators. 

Without a universal requirement to conduct some credible level of due diligence 

when importing wood from risky regions, lawful U.S. industry actors must continue 

to compete with unlawful or less than scrupulous industry actors who enjoy cheaper 

wood prices afforded by illegal production and/or who expend less time and resources in monitoring their supply chain. However, any universal requirement for 

due diligence must not be overly-prescriptive, create unnecessary documentation or 

push costly bureaucratic solutions that would severely disrupt or harm businesses 

that are taking due care in their importing. A balance must be struck between protecting lawful businesses from undue bureaucracy and ensuring careful due diligence that excludes illegal wood from the supply chain. 

WWF’s Global Forest & Trade Network works with wood importers and retailers 

in the United States, as well as wood product manufacturers and forest managers 

in many of the regions where illegal wood trade is an issue such as Southeast Asia, 

West Africa, and Amazonia, to identify and address illegal wood in the supply chain. 

We, and the American companies that we work with, including Wood Flooring International and Lowe’s, ask the U.S. government to support our efforts by passing laws 

that will create disincentives for trading in illegal wood; such an action on the U.S. 

government’s part will even our playing field. 

5. WWF’s comments on H.R. 1497 

Suggested changes for H.R. 1497 

WWF strongly supports H.R. 1497 with amended language that would reflect the 

language in Senator Wyden’s Companion bill S.1930, the ‘‘Combat Illegal Logging 

Act’’. Senator Wyden’s bill language, as mentioned by Ms. Wrobleski of International Paper/AF&PA in her testimony, was the result of significant compromise 

among environmental and industry representatives belonging to a coalition to support H.R. 1497 and S.1930. 

Primary changes between H.R. 1497 as introduced and as WWF would recommend be approved by Committee, consistent with S. 1930, are as follows: 

Creates same regime for interstate and foreign law by amending 16 U.S.C. 

3372(a)(2)(B) instead of adding a new section 3372(a)(2)(C). This measure was taken 

in order to assure compliance with WTO. 

Alters wording of 16 U.S.C. 3372(a)(2)(B)(i). The new clause is tightened in some 

ways (by eliminating verbs ‘‘transported or sold’’) and expanded in others (by referencing ‘‘laws to prevent illegal logging’’). The intent has been to provide greater 

clarity regarding what ‘‘laws’’ are intended. The result is language that, as Ms. 

Wrobleski stated, is ‘‘carefully crafted to protect forests from criminal activity’’. 

Adds ‘‘transport and export’’ to 16 U.S.C. 3372(a)(2)(B)(ii). This captures an important subset of fraud against foreign government that the original wording did not. 

Removes the original ‘‘documentation’’ clause (v) from 16 U.S.C. 3372(a) and creates a new section 16 U.S.C. 3372(f) that specifies information that must be declared. This new section, in essence, mandates transparency in timber shipments. 

It requires specific information and sets a timeframe for compliance, which allays 

industry fears while at the same time precluding the risk inherent in the original 

approach, of an indefinite or nonexistent process to promulgate regulations. It also 

establishes the requirement for a report on implementation success after the first 

two years, at which point recommendations for alterations to declaration requirements can be made. 

Given the careful negotiations between industry and environmental groups and 

their many members in coming to language that these disparate stakeholders could 

agree upon, we support amendments to H.R. 1497 that would make it consistent 

with the language provided in the S. 1930. 

Relationship to Lacey Act 

WWF firmly believes that amending the Lacey Act is the optimal means for meeting the goal of prohibiting illegal timber products into the U.S. This goal is consistent with the history of the Lacey Act, and the operational provisions of the Lacey 

Act. 

84 

1For more information on Lacey case law and history see Robert Anderson, 16 Pub. L.L.R. 

27 ‘‘The Lacey Act: America’s Premier Weapon in the Fight Against Unlawful Wildlife Trafficking, Public Land Law Review and Michele Kuruc ‘‘The Lacey Act: Stemming the Flow of Illegally Commercialized, Fish, Wildlife, and Plants’’, NOAA. 2http://www.uniset.ca/other/cs3/331F3d1228.html 

3http://www.alaskajournal.com/stories/091006/homl20060910060.shtml 

The Lacey Act, first passed in 1900, makes it unlawful to ‘‘import, export, transport, sell, receive, acquire, or purchase’’ fish, wildlife and plants taken in violation 

of domestic law, and domestic and foreign law where applied to wildlife and fish. 

H.R. 1497 would expand the Lacey Act such that plant and plant products, like fish 

and wildlife, would also be subject to relevant foreign laws. 

At its inception, the Lacey Act was designed to conserve native wildlife species, 

particularly those threatened by introduced exotic species and excessive hunting 

and poaching, facilitated by interstate trade. As with other laws, the Lacey Act has 

been amended several times over the years to effectively address the evolving scale 

and scope of the threat to the long-term survival of wildlife, plants and fish. Most 

significantly, Congress amended the Lacey Act in 1981 in specific response to the 

substantial increase in the international criminal trade in fish and wildlife. 

As case law and history demonstrate, the law was thought to be deficient in meeting the threat so Congress expanded its scope, increased civil and criminal penalties, and introduced strict liability forfeitures and seizures of illegal goods even 

if the recipient had no knowledge that they were aiding and abetting a crime 1. 

As the U.S. Court of Appeals for the 11th Circuit on U.S. v. McNab, Blandford 2

stated: 

The legislative history reflects that ‘‘the [main] thrust of Congress’s intention in amending the Act was to expand its scope and enhance its deterrence effect.’’ [FN20] 594,464 Pounds of Salmon, 871 F.2d at 828. Indeed, 

Congress clearly stated that the amendments were meant to strengthen the 

existing wildlife protection laws and to ‘‘provide [the government] the tools 

needed to effectively control the massive illegal trade in fish, wildlife and 

plants.’’ 127 Cong. Rec. 17,327 (remarks of Senator Chafee); see also 127 

Cong. Rec. 26,537 (1981) (remarks of Representative John Breaux). The 

Senate Report provided [*1239] that the amendments ‘‘would allow the Federal Government to provide more adequate support for the full range of 

State, foreign and Federal laws that protect wildlife.’’ S.Rep. No. 97-123, at 

4. The amendments were intended to ‘‘raise both the civil and criminal penalties of the current laws and target commercial violators and international 

traffickers.’’ 127 Cong. Rec. 17,328 (remarks of Senator Chafee). By 

strengthening the penalty provisions of the Lacey Act, Congress intended 

‘‘to give the Federal Government stronger enforcement tools to stop the 

large-scale importation and taking of fish—which enjoy protection under 

other foreign—laws.’’ Id. at 17,329 (remarks of Senator James Strom Thurmond). 

‘‘Innocent Owner’’ Provision 

WWF does not believe that H.R. 1497 should provide for an ‘‘innocent owner’’ defense. I.e., allow wood products that the U.S. government proves to come from illegal 

sources (and by doing so proves such products are contraband) from entering the 

U.S. Some opposed to H.R. 1497 have claimed that the wood supply chain is much 

more complicated than the fish or wildlife product supply chain and thus the Lacey 

Act language should be softened to contain an ‘‘innocent owner’’ defense. WWF and 

TRAFFIC, in their work with fish, wildlife and wood product supply chains, can testify to the fact that, as a function of globalization of commodity markets, all of these 

supply chains are equally complicated. For example, through its Marine Stewardship Council work, WWF is intimately familiar with helping U.S. seafood retailers 

to track their fish supply and assure that it is coming from sustainable sources. The 

seafood industry is highly complex. For processed seafood coming into U.S. it is not 

uncommon for the primary sources originating from various regions around the 

globe to be mixed and processed in a different global region, undergo yet additional 

value-added processing in still another global region and then finally shipped into 

the U.S. The seafood can be passed through a number of hands, distributors, brokers, and manufacturers, before entering the U.S. marketplace. Despite this complexity, the seafood industry has managed to abide by the Lacey Act, with its existing seizure, forfeiture, civil and criminal penalties, for over 25 years and has even 

found it useful in protecting its business from unsustainable offshore harvesting of 

seafood. 3

85 

4http://www.high-seas.org/docs/LaceylActlPaper.pdf 

As has already been mentioned in this testimony, the 1981 Amendment of the 

Lacey Act intentionally added the seizure and forfeiture on strict liability, and increased penalties, in order to make the Lacey Act effective in addressing the issue 

it was designed to address: threat to the conservation of fish, wildlife and plants 

as a result of illegal activity. As is often said with respect to the Lacey Act, one 

of its greatest strengths is its deterrence effect. Any softening of the language, such 

as the inclusion of an ‘‘innocent owner’’ protection of contraband goods, would render 

the law ineffective in this regard. 

In United States v. 144,774 Pounds of Blue King Crab ((410 F.3d 1131, 9th Circuit 2005), the 9th Circuit held that the innocent owner provision in the the Civil 

Asset Forfeiture Reform Act of 2000 (CAFRA) is not inconsistent with, or contrary 

to, the Lacey Act. In that case, the U.S. sought forfeiture under Lacey of frozen blue 

king crab taken in violation of Russian Federation law. Respondents raised the ‘‘innocent owner’’ defense under CAFRA, claiming that because they did not know the 

crab was caught in violation of Russian law they should be exempt from forfeiture. 

Despite the complexity of the king crab supply chain, the 9th Circuit Court, based 

on Lacey Act law, history and congressional intent, deemed the products to be unlawful, though not criminal, and thus subject to forfeiture, a tool deemed by the 

Court to strengthen the effectiveness of the Lacey Act. 

In terms of general enforcement of the Lacey Act, apart from criminal cases, the 

government must have a preponderance of evidence in order to establish a case. The 

investigative procedures to make such cases are exhaustive, as described by Paul 

Ortiz of NOAA. 4 In proving a Lacey violation, U.S. prosecutors will go to great 

lengths to confirm that a foreign law has been violated, and will work closely with 

foreign government officials to determine the relevant laws and to ascertain whether there were any violations. They will often bring in translations of laws, expert 

witnesses from the foreign country, and other evidence to prove a violation. WWF 

expects that the same steps would be taken in enforcement of an alleged Lacey Act 

violation regarding timber products. 

In summary, the fish and wildlife supply chains that the Lacey Act currently governs are just as complicated as the wood supply chains that we would like to include 

under Lacey, so there is no need to redress the Lacey Act in order to make it ‘‘fit’’ 

the wood product situation. The Lacey Act 1981 Amendments strengthened enforcement measures and penalties, including adding a strict liability clause, in order to 

make Lacey more effective in meeting the ever-increasing global threat perpetrated 

by the illegal fish and wildlife trade. Lacey Act case law demonstrates that it is designed to, first and foremost, capture and punish those who are knowingly complicit 

in illegal wildlife and fish trade. Secondarily, Lacey establishes some measure of accountability by exercising an appropriate level of due care. Lacey puts the burden 

of proof on the government to establish culpability and rewards those who are already practicing appropriate due diligence relative to their risk of procuring illegal 

products by evening the playing field in terms of punishing their less scrupulous 

competitors. 

6. Implementation of H.R. 1497 

WWF firmly believes that, through a risk-assessment based approach, it is possible to distinguish wood that has a high probability of coming from illegal sources 

within one’s forest products. Using existing tools, technologies and resources already 

adopted by several industry leaders, it is possible to work with one’s suppliers to 

eliminate illegal wood, even within long and complicated supply chains. WWF, 

through its Global Forest & Trade Network, collaborates with retailers, importers, 

factories, distributors, brokers, suppliers, and forest managers throughout their 

global supply chains to identify and address illegal wood in the system. Given over 

a decade of experience helping companies on this issue, we can attest to the fact 

that it is possible to assess risk for illegal wood within forest products of all product 

category types and it is possible to take appropriate actions with suppliers to minimize and mitigate the risk. 

In our experience, the first step in assessing risk level is to know the species and 

country and forest management unit origin of wood for a given product. Having 

worked with many wood product buyers and retailers, we can safely say that even 

the most well-intentioned companies do not necessarily know the origin of wood for 

their products beyond knowing the physical location of their primary and direct suppliers such as factories in China or brokers in Singapore. Foreign factories and brokers often resist providing their customers with wood origin information because 

they either lack systems to track their wood or they are protecting what they consider to be a competitive trade secret. Unfortunately, without knowing where, geoVerDate Aug 31 2005 15:48 Oct 17, 2008 Jkt 000000 PO 00000 Frm 00089 Fmt 6633 Sfmt 6621 L:\DOCS\38330.TXT Hresour1 PsN: KATHY
86 

graphically, wood originates, it is virtually impossible to assess and address risk of 

illegal wood within one’s supply chain. Those who are committed to knowing the origin of wood to identify risk must often expend excessive time and resources simply 

getting information needed to identify any red flags. Their less diligent competitors 

actually save time and resources by conducting ‘‘business as usual.’’ 

The proposed Lacey Act amendment would require shipments of forest products 

to be accompanied by a declaration stating the species, country of origin for the raw 

material, quantity and measure, and value. The documentation requirement should 

help law enforcement agents and, more importantly, the wood product buyers, to 

identify relative risk of imports for illegal wood, which vary country by country, in 

order to prioritize their efforts. The requirement should also serve to motivate factories, brokers, distributors and others importing into the United States to establish 

wood traceability within their procurement programs. Wood traceability through the 

complicated global supply chain is possible if the foreign factories and their suppliers put systems in place to capture needed information. WWF has in fact worked 

with many factories within China, Southeast Asia and Latin America to put these 

tracking systems in place so we can attest to the fact that it can indeed be done. 

The problem is that without significant demand for this information, the factories 

will not change their current practices. 

Moving from the current voluntary data exchange model to a mandatory documentation model would greatly benefit U.S. companies who are making every effort 

today to procure wood responsibly from the hassle of trying to persuade their suppliers to provide critical supply chain information on which to base their risk assessments. Increasing supply chain transparency in this manner would also help to 

shine a light on the less scrupulous wood buyers and, again, even the playing field. 

Once transparency is established, there are a multiple tools that one may use to 

assess and address risk (see Appendix A for more information). As mentioned previously, chain-of-custody certification, controlled wood certification, legality 

verification, first and 2nd party random supplier audits, Radio Frequency Identification (RFID) tags and genetic testing to verify log origin, remote-sensing, and stepwise programs like Rainforest Alliance’s Smartsource Program and the Tropical 

Forest Trust program are all viable methods of minimizing and mitigating illegal 

wood risk and are all being used effectively within the forest products sector by 

market leaders who have actually integrated legality checks into their routine quality assurance programs. In fact, and as an interesting aside, American Forest & 

Paper Association (AF&PA) members, who support H.R. 1497, voluntarily instituted 

programs to assess and address illegal wood within their supply chains in 2002, as 

part of the Sustainable Forestry Initiative. As AF&PA includes several companies 

who import wood products from high risk regions, this is not a trivial matter. The 

fact that this association has proactively met the illegal logging issue with appropriate due care may in part explain their confidence in and support for H.R. 1497. 

While some forest product companies and associations recognize that their level 

of due care must match the level of risk within their business, others unfortunately 

do not. This is particularly disconcerting when considering that the odds of sourcing 

illegal wood products are 2:5 from China, 4:5 from Indonesia, 1:5 from Malaysia, 3:5 

from Honduras, 2:5 from Vietnam, and 2:5 from Peru, all countries exporting large 

volumes of wood products to the U.S. With such high odds of sourcing illegal wood, 

it is puzzling to us that more companies and associations are not raising their level 

of due care to be commensurate with their level of risk. While several companies 

and associations have codes of conduct and publicize high-level statements against 

illegal logging, they are not taking appropriate measure to implement these policies 

across the board, and unfortunately have a competitive advantage over those companies that are practicing appropriate due care. Indeed, if all market players were 

using the same voluntary and abundant due diligence mechanisms available to exclude illegal wood from their supply chains, then amending the Lacey Act would become unnecessary. 

The current importing of suspicious wood products into the U.S. is not only damaging the U.S. forest products industry and the social, economic and environmental 

situation of many developing countries, but it is also harming the American consumer who is in fact the end user of these products. Consumers have a right to trust 

that the products they buy, if not necessarily sustainable, are at the very least 

sourced legally. Consumers, unlike the forest product industry, have few ways of 

distinguishing between legally and illegally sourced products and they should not 

be put in this position anyway. We believe that the U.S. government, in partnership 

with exporting nations and the global forest products industry, has a responsibility 

to the American consumer to screen out unlawful products from the U.S. retail 

shelf. 

87 

5The tools and resources listed here are in no way exhaustive or comprehensive. We recommend that Department of Justice convene a multi-stakeholder working group to develop a 

comprehensive list of available resources 

7. Conclusion 

Congressional approval and enactment of this legislation, with amendments suggested in this testimony, would place the United States in a strong leadership role 

in addressing the illegal timber trade. Given the serious environmental and social 

impacts of illegal logging to developing and transitional economies, and the economic impacts to the global forest products industry, it is critical that actions be 

taken by both individual companies and governments to address the problem. Although public-private partnerships and multiple supply-side measures have shown 

promising results, we cannot expect these actions to significantly abate illegal logging without being accompanied by strong demand-side signals. Several companies 

have voluntarily undertaken steps to exclude illegal wood from their supply chain. 

However, market penetration of these voluntary and sometimes costly efforts is not 

deep or broad enough to keep up with the rapid pace of illegal logging and deforestation. Industry-wide actions are needed to really transform the marketplace. 

H.R. 1497, amending the Lacey Act to address illegal timber imports, provides an 

effective and business-friendly tool for enabling the U.S. government to punish 

criminal actors, encourage a credible level of due diligence among all U.S. forest 

products industry, and drive foreign suppliers to put systems in place that would 

enable them to trace their wood to forests of origin. Knowing where the wood originates is the first step in assessing and addressing risk of illegal wood within a given 

supply chain. Amending the Lacey Act should help level the playing field for responsible U.S. businesses and remove the perverse incentives that currently exist for 

wood procurement that causes irreparable social, economic and environmental 

harm. 

Finally, along with the passage of H.R. 1497, we ask Congress to provide sufficient appropriations to the agencies tasked with implementing this critical legislation. The key to whether this law succeeds on the ground is whether adequate personnel, training and 6funding are dedicated to enforcement efforts. 

Thank you for the opportunity to provide this testimony to the Subcommittee. 

Some Tools and Resources for Companies to 

Address Illegal Logging in Their Supply Chains 5

• Voluntary legality verification See http://www.rainforest-alliance.org/programs/ 

forestry/smartwood/legallverification.html for an example. 

• Keep It Legal Guidelines— http://assets.panda.org/downloads/keeplitl 

legallfinallnolfsc.pdf. 

• FSC Controlled Wood Certification — http://www.fsc.org/controlledlwood 

• FSC Chain of Custody Certification — http://www.fsc.org/keepout/ en/contentl 

areas/77/134/files/FSClSTDl 40l004lV1l0lENlCoCl forlSuppliersl 

andlManufacturers.pdf 

• Other 3rd Party forest chain of custody certifications 

• First and second party supplier audit systems—for a few real-life examples see: 

Æ http://w3.upm-kymmene.com/for/internet/ upml tracinglrussialwood.nsf/ 

start 

Æ http://search.storaenso.com/mini/woodprocurement/main.html 

• Stepwise Programs to Identify and Eliminate Illegal Wood in Supply Chain: 

Æ WWF-GFTN — http://www.panda.org/aboutlwwf/whatlweldo/forests/ 

ourlsolutions/responsiblelforestry/gftn/index.cfm — includes Risk Assessor 

database tool which cross-references country and species and rates relative 

risk of illegal logging 

Æ Rainforest Alliance—Smartsource and Smartstep — http:// www.rainforestalliance.org/programs/forestry/trees/services/ smartsource.html 

Æ Tropical Forest Trust—Third party verification — http://www.tropical 

foresttrust.com/third-party.php 

• Helveta and TFT Tracelite RFID tracking — http://www.tropicalforesttrust.com/ 

tracelite.php 

• Remote sensing — http://www.illegal- logging.info/itemlsingle.php?item=news 

&itemlid=1819&approachlid=1 

Æ