Environmental Investigation Agency report outlines illegalities by major European wood processor in Romania | WWF

Environmental Investigation Agency report outlines illegalities by major European wood processor in Romania

Posted on 21 October 2015
Forest loss in Romania 2000-2014
© Greenpeace
Vienna/Austria, Washington D.C./USA, Bucarest/Romania –  One of Europe's largest timber companies is facing allegations of widespread illegal activities in its core Romanian operations, following the release of a report by the US-based NGO  Environmental Investigation Agency (EIA).  

Stealing the last forest: Austria's largest timber company, land rights and corruption in Romania, jointly released today in Vienna by EIA, Agent Green and WWF, documents how Holzindustrie Schweighofer (Schweighofer) processes large amounts of illegally harvested timber from Romanian forests into semi-finished wood products and biomass, selling the products throughout the European Union.

WWF today filed a complaint at the Federal Forest Office in Vienna for violations of the European Timber Regulation (EUTR) and called for a full investigation of the allegations against Schweighofer.

"Schweighofer is one of the largest timber companies in Europe and unfortunately the single biggest driver of illegal logging in Romania”, says Alexander von Bismarck, director of the EIA.
New Evidence

Earlier this year, two videos showing Schweighofer purchasing managers accepting illegal wood were released. A logging truck from a Romanian national park was filmed with a hidden camera as it transported undocumented logs to Schweighofer, despite the company’s claim that it rejects timber from National Parks. Over the past year, AGENT GREEN has investigated and exposed a series of cases of illegal or unsustainable logging in national parks and other protected areas.
In the spring of 2015, EIA released an undercover video, in which two of Schweighofer’s senior managers agreed to purchase illegally cut wood and offered boni for it. Today’s report follows two years of investigations and details, for the first time, the extent of the destruction caused by the high volumes of illegal wood reaching Schweighofer’s Romanian mills.

EIA found that over 50 per cent of logging in Romania is illegal, which includes illegal cutting in national parks, clear-cutting, overharvesting, use of false permits, and logging on stolen land. According to government reports, 20 per cent of public forest land was handed to interests other than the rightful owners following the fall of Communism. In its investigation, EIA identifies and documents actual cases of each type of illegal logging in the forest and found that in nearly every case, the wood was on its way to or ended up at Schweighofer’s mills.
AGENT GREEN Director Gabriel Paun said, “In my opinion, organized crime structures facilitate the flow of illegal wood from Romania to the European and global markets. So until now the EU and national legislation was not able to stop illegal activities, therefore remains a high risk to buy wood products from many Romanian regions. Europe’s last intact Forest Landscape is at stake, and two thirds of its virgin forests that are home to the largest populations of brown bears, grey wolves and lynx living in the wild.”
Economic loss for Romania

EIA’s report also finds that Schweighofer has caused massive damage to the furniture industry in Romania by pushing up prices and buying out timber stocks. According to former Romanian Minister of Environment, Doina Pana, this practice has cost the Romanian economy 50,000 jobs since Schweighofer settled in the country. Schweighofer extracts the profits from its Romanian businesses through a complex network of companies. At the head of this structure sits a private foundation (“Schweighofer Privatstiftung”) registered in Austria, through which the company enjoys significant tax benefits.

Magor Csibi from WWF Romania adds that it should be economic common sense the superior processing of the wood in order to create jobs, economic growth for the local communities and more relevant income for the state budget. “Unfortunately the market became dominated by major actors who took advantage of the legislative gaps and created an economic model which concentrates only on the maximisation of profits, ignoring the sustainability of the forest ecosystems.”
In order to protect their rapacious business model, Schweighofer actively tried to prevent a new forest law in Romania that limits the share one single company can have in the national timber market. In a letter to the Romanian Prime Minister, CEO Gerald Schweighofer threatened to sue Romania in international courts and to lay off all its Romanian employees, should the new law not be retracted.
Romania’s forests need EU protection
WWF has, based on available report and information, now filed a complaint according to the European Timber Regulation (EUTR) in Austria. WWF has made continuous efforts to save the last remaining virgin forests in the Carpathian region and managed to create a legislation for that purpose and proposed 25,000 hectares of virgin forest to become a UNESCO World Heritage Site.

“But today we are calling for a full investigation of all allegations raised in the report. If this fails, then the last Southeast European virgin forests will be turned into wood pellets and burning stoves for the benefit of multinational companies”, warns WWF CEO Andrea Johanides.

The complaint is addressed to the Federal Forest Office (Bundesamt für Wald) who is the responsible EUTR authority in Austria. This Regulation came into force in 2013 and it prohibits putting illegally logged timber and timber products onto the EU market. A study by WWF revealed that, unfortunately, this regulation has not been adequately translated in national laws throughout the EU and it furthermore still contains loopholes and exemptions and sees penalties for violations too weak to serve as deterrent, such as in Austria,
Schweighofer - between tradition and corruption

The timber company Schweighofer has existed in Austria for 400 years. Having sold its Austrian sawmills to Stora Enso in the late 1990s, Schweighofer has been active in Romania since 2002, where the company now owns three sawmills and two factories. The company’s main export products are sawn lumber and biomass, in addition to other semi-finished products. 60 per cent of Schweighofer’s exports within the European Union are biomass in the form of pellets, briquettes and wood chips. Within 13 years, the company became one of the largest wood processors in Europe, with an annual turnover of 465 million Euros.
A criminal system threatens conservation efforts

Romania still has an estimated 218.000 hectares of old growth forests. A recent Romanian government study estimated that 80 million cubic meters of timber have been cut illegally in the past 20 years, representing a loss to the Romanian economy of over five billion Euros.
“The company Holzindustrie Schweighofer is not the only but by far the biggest player on the market, and must therefore not only oblige legal regulations but also has a moral responsibility” said the NGOs.
Further inquiries:
Franko Petri, head of campaigns and media communications WWF Austria, Tel. 01-48817-231 or 0676-83488-231; E-Mail: franko.petri@wwf.at, Web: www.wwf.at.

Johannes Zahnen, forest expert WWF Germany, Tel. +49-151-18854952, E-Mail: johannes.zahnen@wwf.de. Web: www.wwf.de.

Alexander von Bismarck, Executive Director, Environmental Investigation Agency (EIA), Washington D.C., Tel. +1 202 483 6621, E-Mail: bismarck@eia-global.org. Web: www.eia-global.org.

Gabriel Paun, Agent Green/Romania, Tel. 0664-4325575, E-Mail: gabriel.paun@agentgreen.ro, Web. www.agentgreen.ro.

Link to the video of EIA: https://www.youtube.com/watch?v=tp3WGqZJLY4
Link to the video of AGENT GREEN: https://www.youtube.com/watch?v=drQSSOK2MxM
Forest loss in Romania 2000-2014
© Greenpeace Enlarge
Illegalities of Holzindustrie Schweighofer's timber supply chain
© EIA Enlarge
Schweighofer's major customers across Europe
© EIA Enlarge
Schweighofer Romania’s 2014 sales to top 25 EU customers
© EIA Enlarge