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03 tiger report

THE VENEER
How Indonesia's Last Rainforests
are being Felled for Flooring
exclusion zone, white area to be kept clear DO NOT PRINT BOX exclusion zone, white area to be kept clear DO NOT PRINT BOX Theft of Indonesia's
A Fashion for Flooring
Behind the Brand
1. Armstrong/Bruce Executive Summary
Demand-driven illegal logging in EIA/Telapak investigations, this Indonesia is destroying one of report tracks the trade in merbau the world's most important from Papua, via the factories remaining tracts of undisturbed processing merbau for the tropical forest. Despite world's biggest flooring brands, to the shelves of the leading DIY operations by the Indonesian and home improvement retailers government, every day thousands of Europe and North America.
of hectares of Indonesia's forests Providing case studies on some are cut illegally to supply the of the biggest players, the report thousands of factories across contrasts the environmental was not illegally sourced. It also Asia. Much of this timber is claims touted by specific outlines specific examples of destined for the shelves of high European and American illegal activities by Asian street retailers and builder's companies with the reality companies supplying some of merchants in the European investigators found behind the these major brands.
Union and North America.
veneer. It reveals that – though While suppliers and retailers of Merbau, a highly valuable they are not themselves breaking merbau flooring must stop duping hardwood, is being ruthlessly any law – these global flooring their customers and take urgent targeted by illegal logging companies do not know the steps to ensure the legal origin of syndicates in Indonesian Papua precise origin of all the merbau their wood, this briefing to supply the booming demand they are selling, that much of the concludes that it is ultimately the for tropical hardwood flooring.
wood originates in Papua, and responsibility of governments in Outlining the results of recent there is no way of being certain it western consuming countries to ensure that stolen timber is not allowed to reach the shelves. Yet despite repeated promises to act, there are currently no laws in the This document was produced with the financial assistance of the European Union. The contents of this document are the sole responsibility of EIA/Telapak US or Europe which prohibit the and can under no circumstances be regarded as reflecting the position of the import or sale of timber or wood European Union. EIA/Telapak would also like to thank the Sigrid Rausing Trust products which were illegally and other donors for their generous support of our work. sourced. Until such laws are This briefing was written by Jago Wadley, Pallavi Shah and Sam Lawson. It was enacted, western companies will edited by Sam Lawson, Julian Newman and Arbi Valentinus. Additional research continue to profit while by Sascha von Bismarck, David Groves, Vanessa Frey and Timer Manurung.
Indonesia's and Papua's last Picture research by Tom Thistlethwaite.
frontier forests are floored.
Report design by fullstopdesign.co.uk Many thanks to Emmerson Press for the printing of this report. Emmerson Press +44 (0)1926 854400 Top left: Map of Indonesia and Malaysia.
Printed on recycled paper.
Front cover: Papuan merbau logs in the
ISBN: 0-9540768-2-4 yard of Seng Fong, Indonesia, August 2005.
Sam Lawson / EIA / Telapak Theft of Indonesia's Last Rainforests
The Theft of
The global scourge of illegal logging is one of the Bruce Beehle most pressing issues facing the planet today. Oneof the countries most affected is Indonesia, whereup to eighty per cent of logging is illegal.(1) Thisrampant timber theft has led to one of the highestrates of deforestation in the world – every year 2.8 million hectares are lost, an area almost aslarge as Belgium.(2) The social and environmental implications of this criminal destruction are staggering. Everyyear illegal logging robs the Indonesiangovernment of an estimated $4.3 billion in much-needed revenue.(3) The loss of precious forests to 300 000 cubic metres of stolen merbau logs out of timber thieves is leading to devastating floods and the province every month. The logs, accompanied landslides and driving rare plant and animal with false paperwork, were departing aboard species ever closer to extinction.
fleets of giant cargo vessels, in violation of a ban The rampant looting of Indonesia's forests is on log exports enacted in 2001. Most of the directed by millionaire timber barons looking to timber was going to feed China's mammoth wood make easy profits. Hungry for cheap timber and flooring industry. The report also revealed the heedless of its source, the consuming nations of central role of the Indonesian military in the logging of
Europe and North America callously continue to timber theft and the intimidation of Papuan consume stolen wood, spurring the timber barons merbau in
communities trying to protect their lands.(7) on in order to meet their demand.
Having already stripped the once emerald- green islands of Borneo and Sumatra of much oftheir jungle, the focus of the illegal loggers in Indonesia has now turned to the remote Papua province on the island of New Guinea, home tothe largest single remaining tract of tropicalforest in Asia. Seventy per cent of New Guinea Dave Curre (divided between the Indonesian province ofPapua in the west and the country of Papua NewGuinea in the east) is still covered in rich denseforest thriving with unique flora and fauna.(4)Recently a host of new species of plants andanimals were discovered deep in the forests ofPapua province by scientists who dubbed the areaas ‘the closest place to the Garden of Eden as you'regoing to find on Earth'.(5) By far the most valuable timber in the Papuan forests is merbau (Intsia spp.). A dark, luxurious,red wood, merbau is primarily used for themanufacture of ‘exotic' hardwood floors, whichcan command prices of up to $138 per square Above: The Smoky
metre.(6) Though it is also found in nearby Malaysia, most remaining commercial stands of discovered in Papua's
merbau are confined to the island of New Guinea.
‘Garden of Eden'.
In February 2005, EIA/Telapak released a report, ‘The Last Frontier', which exposed Left: Forest resources
rampant illegal logging in Indonesian Papua and are being stolen from
documented the mafia syndicates smuggling Theft of Indonesia's Last Rainforests
The following month, Indonesian President All wood from
Susilo Bambang Yudhoyono responded with a Papua must
crackdown on illegal logging of unprecedented be treated
scale. The enforcement operation in Papua resulted in the seizure of more than 400000 cubic metres of stolen logs and sawntimber, plus a host of trucks, ships and logging equipment.(8) More than 170people were arrested, including police, army andforestry officials. Altogether, timber and equipmentworth almost a quarter of a billion dollars wasconfiscated, and the impacts of the enforcementoperation in Papua were felt in timber marketsaround the world. As supplies of merbau waned,prices rocketed: in February 2005 logs werechanging hands in China for as little as $278 – by October they were selling for up to $732.(9) Yet Papua's forests are still far from safe.
Corruption surrounding the sale at auction of theseized timber has meant the government hasreceived only two per cent of the $216 million inrevenue which was expected.(10) In December 2005the National Police Chief admitted that evidence difficult to export logs, new sawmills are now existed showing that the companies from which springing up to process the stolen wood in order the logs were originally seized had in many cases to ease its passage.(13) The situation in Papua managed to buy them back at artificially deflated remains chaotic, there are no independently prices.(11) Since the special enforcement operation certified forests, and all wood which originates ended in May 2005, the timber barons and their Top right: Illegal
there must still be treated with suspicion.
corrupt cronies in the local bureaucracy and logging in Wasur
The enforcement efforts in Papua have been military have adapted their cutting and smuggling National Park, Papua
critically undermined. The return of illegal operations and are now back in business. In logging has been made almost inevitable by the February 2006 1000 illegal logs were seized from failure of the consuming countries of stolen Below: Illegal merbau
a company in the district of Bintuni, which police merbau in Asia, Europe and North America to halt claimed had been regularly shipping logs illegally imports and control demand. Shockingly, it to Java between September and December of the remains perfectly legal in most instances in Papua, February 2003.
previous year.(12) Though it has become more Europe and North America to import or selltimber which was illegally sourced in the countryof origin. Though the European Union hasrecognised this failing, so far they have onlycommitted to setting up voluntary bilateralschemes to exclude illegal timber from willingpartner countries. Even these will not coverprocessed wood products like flooring.
Independent studies have shown that a broad-based ban on the import and sale of stolen woodis needed, and the call for such a law to beenacted is supported by much of the industry, byall the large NGOs, and by the UK's ParliamentaryEnvironmental Audit Committee.(14) Three yearsago the EU promised to consider such ameasure,(15) yet so far it has failed to face thisurgent issue, clearly preferring a weakervoluntary approach.
In the meantime, as this briefing demonstrates, companies in Europe and the US, their imports unregulated by government,continue – albeit unwillingly – to drive the Dave Curre destruction of Papua's forests, demanding woodat any cost and with few questions asked.
A Fashion for Flooring
A Fashion for Flooring
As carpet and linoleum have dropped out of fashion,over the last decade sales of wood flooring in Europe Richard Hoffkins and North America have grown dramatically. Therecent proliferation of home improvement televisionshows has helped popularise wood flooring asfashionable, modern and practical, while designinnovations and a plentiful supply of cheap rawmaterials have served to bring down prices andbroaden the market. Though much of this growth ismade up of cheap laminate flooring (not generallyincluded in references to wood flooring), sales ofreal wood flooring have also more than doubledsince the mid-nineties.
with timber from Burma, where two-thirds of timber Merbau is
More wood flooring was sold in 2004 than ever exports are illegal.(23) Most of the kempas and balau before, with Europe and the US consuming an in trade originates in Indonesia's Sumatra and estimated 189.5 million square metres – enough to Kalimantan where illegal logging is the norm.
floor the entire area of Washington DC.(16) Brazilian jatoba supplied by companies suspected of Consumption of wood flooring in the US alone rose involvement in illegal activities has recently been timber used
by 40 per cent in the five years to 2004, when sales shown to have been used in a museum in Spain.(24) in flooring.
of $2.4 billion were recorded.(17) The figure for 2005 Lesser-known African species doussie and iroko are is expected to be at least five percent higher likely to have originated in Gabon or Cameroon, again.(18) Germany is the largest market for wooden where at least half of all logging is estimated to be flooring in Europe, followed by Spain, Italy and the illegal.(25) Most of the temperate species used in Nordic countries.(19) Sales in the UK were worth flooring have also suffered from illegal felling, most around $118 million in 2004.(20) notably in the Russian Far East.
In North America and Europe, sales of wood The brochures of the big European and North flooring are dominated by a small coterie of giant American companies supplying merbau flooring are manufacturer-distributors. These companies either replete with references to the supposed manufacture flooring in their own factories or environmental credentials of their products. They contract out the production to facilities in Asia.
provide assurances to concerned consumers that the They distribute the finished flooring in major retail timber used is all ‘carefully selected', or comes from outlets under their own brand names. The top four ‘sustainably managed forests'. They may also state companies had combined worldwide sales of $1.46 that new trees are planted every time old ones are billion in 2004.(21) By far the largest wood flooring cut. Over the past year, EIA/Telapak sought to test flooring sales are at
company in the world is the US company Armstrong these claims. They did not stand up to close scrutiny.
Industries Inc., which recorded turnover in its woodflooring divisions of $832 million in 2004.(22) Thenext biggest company is German-based Tarkett,followed by Swedish outfit Kahrs. Danish company WOOD FLOORING FACTFILE Junckers, the largest supplier of solid wood flooring, There are three different kinds of real wood flooring – solid, completes the top four.
engineered and parquet. Though it is produced with wood Although oak has traditionally been the most fibre, cheap laminate flooring relies on photographic commonly used species for flooring in Europe and reproduction of wood grain for its appearance. References to the US, demand is shifting to darker and more wood flooring in this report do not include laminates.
‘exotic' wood species – code for tropical wood. All Solid wood floor – This is flooring with one piece of wood from
the major floor manufacturers in Europe and the US top to bottom. Solid wood flooring is sold as single planks of have ‘exotic' ranges of flooring made with tropical wood 14 to 22 mm thick.
timber. Merbau is the most common species used, Engineered floor/multilayer floor – This is flooring with
and features in the ranges of all the major brands.
a top-layer veneer of hardwood usually 3-7mm thick. This Flooring is also available in teak, balau and kempas layer is glued on to lower layers of cheaper wood or from SE Asia, jatoba from South America, and in fibreboard. The vast majority of real wood flooring sold worldwide is of the engineered variety.
African woods such as iroko. In every case there are numerous documented Parquet/Mosaic – this refers to small blocks of solid wood
examples of illegal logging of these tropical species which are laid in a pattern formation.
in source countries. Teak flooring is usually made Behind the Brand
Behind the Brand
the supply
EIA/Telapak have explored the supply chains of There is no indication that any of these the major merbau flooring brands from every angle.
companies have broken any law – nor is there chains of the
Investigators visited the high-street retail chains in evidence that they are fully aware of the potential major merbau
Europe and the US where merbau flooring is on origin of the wood they are supplying. But our sale, called the big flooring companies in the guise investigations have shown that far from being of consumers, and visited their suppliers' factories ‘carefully selected' or ‘sustainably cut', these brands from
in Indonesia and Malaysia posing as buyers.
companies have no idea precisely where most of every angle.
EIA/Telapak has also sent open letters to the the merbau wood used in their flooring comes companies requesting information.
from – nor have they made much effort to find EIA/Telapak's investigations covered all the out. Moreover, our research shows that most of largest flooring brand names, including these companies are using merbau which comes Armstrong/Bruce, Kahrs, Junckers, Tarkett, and from Indonesia's Papua province, where the vast many smaller suppliers. The trail of merbau majority of logging is illegal and where certified flooring supplied by these companies led onward timber is unheard of. In the absence of evidence to the doors of leading EU and US retailers, to the contrary, in all probability much of the including three of the world's largest DIY chains.
merbau they are selling was illegally sourced.
Case Study 1: Armstrong/Bruce
US-based Armstrong is the largest
Kreasi admits that merbau trees are
flooring company in the world, with becoming scarce in Papua through a lack worldwide sales of wood flooring in of re-planting.
2004 of $832 million; Armstrong sells Kreasi staff admit that they cannot be
merbau flooring under the Bruce, sure where the company's merbau Hartco and Robbins brands.
comes from or if it is legal.
Armstrong merbau flooring is supplied by
Armstrong merbau flooring is marketed
Indonesian company PT Tanjung Kreasi.
in The Home Depot and Lowe's home Kreasi buys all its merbau as logs from
improvement stores in the US and in Papua, purchased through agents on Jewson and Allied Carpets stores in the the spot market. UK. Leroy Merlin stores across Europe also market merbau flooring by Kreasi's clients do not demand timber
Bruce flooring, on sale
Tangung Kreasi.
to be certified as sustainably harvested.
at The Home Depot,
USA, January 2006.
Armstrong World Industries Inc. is the world'sbiggest flooring company, holding a portfolio offlooring brands including leaders Bruce, Robbins,and Hartco, all of which include merbau flooring intheir ranges.(26) Despite claiming that the company'sflooring is ‘made from select lumber and harvestedresponsibly',(27) Armstrong publish no evidence forthese claims. In a letter to EIA/Telapak, Chairmanand Chief Executive Michael D. Lockhart statedArmstrong's supplier contracts ‘insist ondocumentation on the chain of custody for wood webuy', and that ‘when we have requested it' itssupplier provided such documents.(28) However, Mr Lockhart did not specify how often these documents were actually requested, and notably failed to supply any examples.
Behind the Brand: Armstrong /Bruce
Far left: Ms Titin Siswadi
of Tanjung Kreasi,
supplier of merbau
flooring to Armstrong,
August 2005.
Middle: Bruce merbau
flooring on display in
Lowe's, USA, January
Left: Jewson in the UK
also market Bruce
Data from the US Port Import Export Buyers were far more concerned about prices, and Reporting Service (PIERS) reveals that Armstrong knowing legal and certified timber costs more, buys merbau flooring from Indonesian few if any demanded high environmental manufacturer PT Tanjung Kreasi Parquet Industry standards. Even if its clients asked for certified (Kreasi).(29) Kreasi is one of the world's biggest materials Ms Titin pointed out that no certified admit they
engineered wood flooring manufacturers, and merbau was available to Kreasi.
cannot be
export to 45 countries.(30) Kreasi markets its Ms Titin said the prices Kreasi pay for its flooring under the Teka brand name, though it also Papuan merbau logs had more than doubled in sure where
produces private-label products for brands like recent months, from $110 to $240 per cubic their merbau
Armstrong. In the first ten months of 2005 metre. She cited government enforcement on comes from
Armstrong imported almost three thousand tonnes merbau smuggling from Papua and a scarcity due of flooring from Kreasi into the US.(31) to the lack of replanting as the reasons for this or if it is
EIA/Telapak undercover investigators visited increase. As such, regardless of whether they Kreasi in August 2005 and met marketing executive were knowingly buying illegal timber themselves, Ms Titin Siswadi, who confirmed that around a tenth Kreasi, and in turn customers like Armstrong, of their 5 million square metre annual output was certainly will have enjoyed the artificially merbau, and that the company supplies Armstrong.
suppressed prices that illegal Papuan merbau She stated that all of Kreasi's merbau originates as generated in the market for so long.(39) logs from Papua, which it buys on the spot market Merbau flooring supplied by Armstrong is on Below: Barge loaded
from middlemen for shipment to their factory in sale in branches of the two largest home with merbau logs
Java. EIA/Telapak later documented a barge loaded improvement chains in the US – The Home Depot from Papua owned
with Papuan merbau logs at Semarang port in Java, and Lowe's.(32) It is also sold in branches of Jewson by Tanjung Kreasi,
which dock workers stated were owned by Kreasi.
in the UK. Kreasi's merbau flooring is sold in Semarang port,
Ms Titin explained how Kreasi buy about 3000 cubic Leroy Merlin, Europe's second largest DIY and metres of merbau logs from Papua every 6-8 weeks, home improvement chain, which has stores across equivalent to around 24000 cubic metres per year.
the continent.(33) She admitted on camera that the company could notknow precisely where any of the company's merbauwas harvested, or be sure it was legal – directlycontradicting claims Armstrong's Chief Executivelater made to EIA.
EIA Investigator: ‘So when you buy the merbau onthe spot market, you won't have any knowledge ofwhere it comes from at all?'Ms Titin: ‘No. No.'EIA Investigator: ‘So there is no way of proving itwas sustainable or legal even?'Ms Titin: ‘No, no.' When Ms Titin was asked about timbercertification, she said that though the companycould do it, there was no demand from clients.
Victor Wu / EIA / Telapak Behind the Brand: Junckers
Case Study 2: Junckers
Danish company Junckers are the fourth largest wood flooring company in the world
and the largest distributor of solid merbau flooring.
rough sawn
All Junckers' merbau flooring is manufactured by Malaysian company Kim Teck Lee (KTL).
80-90% is bought on the spot market in Indonesia and cannot be traced to source.
merbau was
KTL supplied no proof of legal origin, other than that the timber is ‘containerised'.
seen being
Illegally exported rough sawn Indonesian merbau was seen in KTL's Malaysian factory.
Junckers resisted a request by KTL to halt sales of merbau due to supply shortages,
and has instead pushed them to ‘take risks‘ to meet demand.
Junckers merbau flooring is marketed in John Lewis, Travis Perkins and Jewson stores
in the UK, in numerous independent retail outlets in the US, and through many Danish company Junckers Industrier A/S is cent of Junckers' merbau originated in Indonesia, Europe's largest manufacturer of solid hardwood rather than in Malaysia as Junckers had claimed flooring, and Denmark's biggest wood processing in response to requests for information from company.(34) The company sold €91 million of wood architects.(38) EIA/Telapak investigations have flooring in 2004, a significant proportion of it since confirmed that Junckers' Malaysian merbau merbau.(35) Junckers' publicity materials state that flooring suppliers actually source up to 90 per the company ‘select wood only from carefully cent of their raw materials in Indonesia, that they managed forests'.(36) In a letter to EIA/Telapak, have no idea of the precise origin, and that they Junckers also said that the company ‘encourage have traded the wood illegally.(39) Indonesian rough
[their] suppliers to deliver environmentally sound In August 2005, EIA/Telapak investigators sawn merbau at the
posing as traders visited Malaysian flooring factory of Junckers'
The truth of such statements was originally manufacturer Kim Teck Lee Timber Flooring called into question in 2004, when environmental Sdn.Bhd.(KTL), which manufactures all of August 2005.
group Greenpeace discovered that up to 30 per Junckers' merbau flooring. KTL's marketingdirector Mr Lee Ah Keat revealed how thecompany supplies about 23 000 square metres ofmerbau flooring a month to Junckers, and thateighty to ninety per cent of the merbau usedoriginates in Indonesia. Lee explained how hesourced the Indonesian wood through agents inthe town of Surabaya who in turn purchase woodon the open spot market. It is practically impossible to know the precise origin of timber purchased in this manner, thoughone of Lee's colleagues stated that the companycertainly buys merbau from the province of Papua.
When Lee was asked whether he could prove thelegality of his Indonesian merbau supplies, he wouldnot say he could strictly prove it, but insteadmentioned that most illegally traded merbau ismoved as logs on barges, whereas ‘… at least whenwe bring in, it is in container loads…', implying thatsince it was not logs, it was legal. In fact Indonesiahad implemented a ban on exports of sawn timber nearly a year before our visit, meaning KTL's imports of sawn merbau were more likely proof of Behind the Brand: Junckers
illegality. Indeed, though Mr Lee had admitted tobeing aware of the Indonesian ban, during a tour of the KTL factory EIA/Telapak saw rough sawn merbau being unloaded from a container which we were told had just arrived from Indonesia. Thistimber must have been illegally exported.
In a letter to EIA/Telapak, Junckers enclosed an Indonesian ‘BRIK' export document for ashipment of ‘merbau ship decking' issued to anIndonesian company called PT Indo FurnitamaRaya (Ifura), claiming this as proof of the legality of its raw material supplies.(40) While the pressures
document only relates to a tiny proportion of the its supplier
merbau used in Junckers flooring, even that whichis covered remains of questionable origin. The UK to take risks
Timber Trade Federation has previously stated that BRIK documents alone are insufficient toguarantee legality(41).
Mr Lee was aware of the enforcement crackdown against illegal merbau cutting inIndonesia, and cited this as a reason he was nowhaving great difficulty in finding enough merbautimber to supply Junckers' demands, furtherimplying that much of his merbau had beenillegally sourced in the past. Junckers wereapparently unimpressed with his recent sourcingdifficulties and resisted his request that thecompany stop marketing merbau for at least amonth. Indeed, Mr Lee revealed that KTL isconsistently pressured into taking risks to meet Sam Lawson / EIA / Telapak orders of uncertified merbau for contracts pre-sold Top: UK Builders'
through Junckers' huge marketing machine. This pressure was reiterated when Lee highlighted Junckers' recent order for 45000 square metres of merbau flooring for just one building project in America. Lee related to EIA/Telapak investigatorshow he told Junckers ‘no, forget about it', again Above: Inside Kim
blaming supply shortages, to which Junckers Teck Lee's factory,
replied ‘…you take the risk…', according to Lee.(42) Junckers' solid merbau flooring is marketed in August 2005.
John Lewis, Travis Perkins and Jewson stores in the Left: Merbau flooring
UK, in hundreds of independent retail outlets in the in Junckers'
US, and through many web-based distributors.(43) shipment at KTL
factory, Malaysia,
August 2005.
Far left: Mr Lee Ah
Keat of Kim Teck Lee,
August 2005.
Sam Lawso Behind the Brand: Tarkett
Case Study 3: Tarkett
Tarkett is the
Headquartered in Germany, Tarkett are the second largest wood flooring company in
largest wood
the world and the largest in Europe, with global sales of $329 million in 2004.
Tarkett staff stated in August 2005 that the company's merbau is legally sourced
company in
from Temenggor Lake, Malaysia.
In fact all logging at Temenggor has been halted since the end of May 2005 after
the companies involved were shown to have been cutting merbau trees illegally in adjacent protected forests.
Tarkett continues to sell merbau flooring though this source of raw materials no
longer exists.
Tarkett staff falsely claimed to currently sell wood flooring certified as legal and
sustainable by the Forest Stewardship Council (FSC).
Tarkett failed to respond to a formal request from EIA/Telapak for information on
their merbau supplies.
Tarkett branded merbau flooring is marketed in branches of The Home Depot in the
US, Allied Carpets in the UK and in numerous other retail outlets across Europe.
Below right: Tarkett
Tarkett is the largest wood flooring company in known and most trusted environmental Europe, and merbau engineered flooring is one of certification system for wood products, and the display at Lowe's,
the company's top five sellers.(44) Tarkett name and logo can earn significant additional advertises on its company website that it buys sales in sensitive markets.
Below: US retail giant
timber independently certified as sustainably In August 2005 undercover EIA/Telapak The Home Depot sells
sourced by the Forest Stewardship Council (FSC), investigators contacted the head office of the Bruce & Tarkett
citing this as proof of the company's company's flooring arm and requested information environmental credentials.(45) FSC are the best about their merbau range. Marketing managerCarsten Bertelsen subsequently emailed a copy ofan FSC chain-of custody certificate verifying thatthe company is qualified to handle FSC wood, andstated that ‘our products – sold under the chain ofcustody certificate – contain minimum 70 % FSCcertified raw material, and the remaining 30% arefrom controlled sources. Our merbau is sourcedfrom Temenggor lake in Malaysia. We can ensure[sic] you it is from controlled sources'. Staff at anAllied Carpets branch in the UK, enquiring aboutFSC certification of Tarkett wood flooring onbehalf of EIA/Telapak investigators, stated that Behind the Brand: Tarkett
Tarkett had also told them that ‘all Tarkett wood The logging
products are FSC certified'.(39) companies at
EIA/Telapak investigators, unable to find Tarkett flooring on sale with FSC labels, later ‘SUSTAINABLE‘ MERBAU telephoned Mr Bertelsen under another guise to are accused
ask about current availability of FSC certified flooring. Though he initially claimed that only of illegally
Two of the largest merbau flooring ‘certain ranges' of their wood flooring were suppliers, Kahrs and Tarkett, have both available with seventy per cent FSC content, claimed to buy much of their merbau merbau trees
Bertelsen eventually conceded that in fact Tarkett raw material from trees which lie do not currently stock or sell any FSC-certified underwater in an artificial lake created in protected
flooring products – though he claimed it had at as part of a hydroelectric project. They give this as evidence that their merbau some point in the past. This directly contradicts is legally sourced. The lake in question the claims made to Allied Carpets and to is at Temenggor in Peninsular Malaysia, EIA/Telapak investigators posing as buyers, and it is true that in the past a small proving that the company are deliberately quantity of old merbau logs were being misleading customers over their environmental cut by divers at the lake each year. But credentials. EIA/Telapak have forwarded the amount of timber involved is far too information regarding the apparent misuse of the little to meet the combined demand of FSC trademark by Tarkett to the relevant these two giant flooring suppliers, while recent revelations have shown that even some of this timber is likely to have Mr Bertelsen's claims in relation to the origin been illegally sourced.
of Tarkett's merbau timber are also in doubt. It is In April 2005 investigations by a true that in the past there has been a small supply Malaysian newspaper exposed how the of merbau logs from underwater cutting of trees two companies licensed to log the submerged when Temenggor lake was created as underwater trees at Temenggor were part of a hydroelectric project in the 1970s.
responsible for rampant illegal logging of However, two months before Tarkett claimed to be merbau trees in the protected forests using merbau from the lake all cutting there was adjacent to the lake.(48) Malaysian forestry suspended indefinitely. The logging companies officials confirmed the claims, and subsequently refused to renew the involved had been accused of illegally cutting licenses of the two companies for logging merbau trees in protected forests adjacent to the at the lake.(49) The last of these licenses lake (see box on right).(46) Ten months on, the expired at the end of May 2005 and company is still selling merbau flooring, yet it Below: Illegally logged
since then no legal merbau has been is unclear where it is getting its ‘controlled' merbau tree,
sourced from the area.
timber supplies.
Both Tarkett and Kahrs continue to sell In January 2006 EIA wrote to Tarkett Malaysia, May 2005.
merbau flooring, though the only source formally asking for information about the current of raw materials they can point to – Below left: FSC Chain
sourcing of its merbau timber. Two months later dubious as it already was – has now of Custody certificate
no reply had been received. Tarkett merbau wood dried up entirely.
issued to Tarkett
flooring is marketed in branches of The Home Depot across the US, in branches of AlliedCarpets in the UK and in numerous other retailoutlets across Europe and North America.(47) , Malaysia The Star Behind the Brand: Kahrs
Case Study 4: Kahrs
After EIA/Telapak's February 2005 report The LastFrontier highlighted Papua's illegal merbau logging Swedish company Kahrs is the third
crisis the second largest wood flooring producer in largest wood flooring company in Europe – Swedish company Kahrs – published a the world, with global sales worth statement in an industry journal in a pre-emptive $256 million in 2004.
bid to clear the company's name.(50) In it the Kahrs admit in writing that it cannot
company claimed to be buying its merbau from a be sure illegal merbau is not sustainable ‘underwater' source. However, in a entering its supply chain.
letter sent to EIA/Telapak in February 2006 Kahrs Malaysian companies cutting some
admitted that only 36 per cent of its merbau was of the merbau Kahrs says it uses in sourced from Temenggor lake in Malaysia in its flooring have lost their licenses 2005.(51) Added to this, all logging had in fact been due to links with illegal logging in halted there nine months earlier following protected forests.
allegations of illegal cutting (see box on page 9).
As for the remaining 64 per cent of the The source of the remainder of Kahrs'
merbau used in Kahrs' flooring, the company's merbau raw materials is unclear.
environmental manager admitted in his letter that Kahrs merbau flooring is on sale in
there were indeed issues in the tropical timber John Lewis stores in the UK and trade, which he called a ‘market full of problems'.
marketed in numerous independent He also conceded the company could not be sure shops and web-based internet its supply was legal, stating ‘we can't give [a] outlets in Europe and the US.
100% guarantee of being free of wood materialfrom illegal logging'. This is in directcontradiction to claims Kahrs makes toconsumers that all the trees used to make its Obviously Kahrs could not buy enough merbau flooring are ‘felled selectively' and that ‘new trees from the company's ‘legal' Lake Temenggor source, Below left and middle:
are planted to replace those felled'.(52) Such and were keen to buy into Kreasi's Papuan supply, Kahrs' merbau flooring
assurances are patently misleading.
despite there being no evidence of legality of the is on display at John
Interestingly, while visiting Indonesian timber. Kreasi turned Kahrs down, presumably due manufacturer Tanjung Kreasi, which to a conflict of interest with Armstrong.
manufactures merbau flooring for Armstrong's Kahrs' engineered merbau flooring is on sale in Below right: Kahrs sold
Bruce brand (see earlier case study), EIA/Telapak John Lewis in the UK, and marketed in numerous $256 million of
learned that Kahrs had approached Kreasi to independent retail outlets and web-based flooring in 2004.
manufacture merbau flooring on their behalf.
distributors across Europe and North America.(53) om Thistlethwait om Thistlethwait Pallavi Sha Behind the Brand: Goodfellow
Case Study 5: Goodfellow
Goodfellow is the largest hardwood flooring distributor in Canada, and currently sources its solid merbau wood flooring from Indonesian company PT Seng Fong.
After being exposed for selling suspicious merbau in February 2005, Goodfellow
committed to ensure its merbau was legally sourced.
Seng Fong's merbau is all from Indonesia's Papua province, is bought through dealers
and cannot be traced to source or guaranteed as legal.
Seng Fong admitted to paying bribes to officials in June 2005 to obtain 10 000 cubic
metres of seized illegal merbau logs at auction.
While the giant brand-name flooring companies recent record being for a shipment of twenty Seng Fong
featured above dominate the market in merbau tonnes which arrived in November 2005.(57) In admitted to
flooring in Europe and North America, there are addition to Goodfellow, Seng Fong also stated that numerous other large companies engaged in the the company supplies merbau flooring for French trade. One such company, Canadian firm flooring brand Soboplac. Soboplac's merbau bribes to
Goodfellow Inc., were previously exposed by flooring is marketed in Point P stores in France.(58) EIA/Telapak for selling merbau flooring from a Chinese supplier which was buying merbau logs of dubious and uncertain origin.(54) The company merbau logs
responded in April 2005, stating that it would seekassurances from its suppliers that the merbau used at auction.
was ‘logged legally and ethically'.(55) Goodfellowalso publicly committed to ‘market products onlywhere there is a complete and documented legalchain of custody'. US import records show that Goodfellow has since moved the sourcing of its merbau flooring toan Indonesian company, PT Seng Fong MouldingsPerkasa.(56) In August 2005 EIA/Telapakundercover investigators visited Seng Fong's largefactory in Java. The owner, Mr Goh, and hiscolleague Ms Lin explained that, far from havinga legal chain of custody, Seng Fong's merbau isbought on the spot market from traders who bringlogs in from Papua province, so the company cannot say for certain where the timber was cut Top: Mr Goh and
or if it was legally sourced. Indeed, Ms Lin Ms Lin of Seng Fong,
admitted that ‘… in Indonesia if you really want sustainable forest or certification it's not possible. It just isn't.' Ms Lin also told investigators that Sam Lawso Above left: Papuan
Seng Fong had recently paid bribes to Indonesian merbau being
navy officials to secure the purchase of 10 000 cubic metres of illegal merbau logs being sold at flooring at Seng
auction. She said such ‘under the table payments' often ‘cost more than the logs'. Nevertheless it was good business, since the bribes had ensured the agreed price of the logs was only $90 per cubic metre – less than half their true value.
Left: Papuan merbau
Since EIA/Telapak's visit to Seng Fong, the logs in the yard of
company has continued to supply shipments of Seng Fong, Indonesia,
solid merbau wood flooring to Goodfellow, the most Sam Lawso August 2005.
Behind the Brand: Summary Tables
Table: Summary of case study findings
Use merbau timber in their wood flooring which comes from Indonesian Papua Do not know the precise forest source of all their merbau and cannot show it was Provide false or misleading assurances to customers regarding the environmental credentials of their flooring Have used merbau sourced from companies in Malaysia which have recently been accused of cutting merbau trees illegally in protected forests Supplier admits paying bribes to buy seized illegal merbau logs at auction Papuan merbau – on sale in a store near you
Papuan merbau flooring of dubious origin is sold in many of the biggest DIY, home improvement, and builders merchant's chains across Europe and North America. Brands like Bruce, Junckers, Kahrs and Tarkett have secured high profile in-store product representation in return for commissions on sales of their products. The examples outlined below include three of the world's four largest DIY retail chains.
THE REALITY
The Home Depot
The Home Depot claims to ‘trace the origin of each The Home Depot market merbau flooring by Bruce (Armstrong).
The world's largest home and every wood product on our shelves' and ‘know Bruce's supplier Kreasi buys all it's merbau from Papua, where improvement chain, with item by item . . where our wood products are illegal logging is rampant. The company admits that merbau trees over 2000 stores. harvested'.(59) The company's wood purchasing policy in Papua are getting scarcer because there is no replanting, and also stated in 1999 that it would ‘eliminate wood confessed that it did not know where in Papua its merbau comes purchases from endangered regions of the world by from or even if it is legal (see case study on page 4).
the end of 2002 . .'(60) Lowe's claims to be ‘concerned ' about the protection Lowe's markets Bruce (Armstrong) merbau flooring in dedicated The world's second largest of endangered forests, and committed to working with in-store displays. Bruce's supplier Kreasi buys all it's merbau from home improvement chain, suppliers to ensure this protection.(61) Papua, where illegal logging is rampant. The company admits that with over 1200 stores in merbau trees in Papua are getting scarcer because there is no replanting, and confessed that it did not know where in Papua itsmerbau comes from or even if it is legal (see case study on page 4).
John Lewis
John Lewis' Responsible Sourcing Code states: John Lewis markets merbau flooring by Junckers. Junckers' 27 branches in the UK, & ‘Suppliers shall seek to make continuous supplier (KTL) buys merbau from Papua, did not know the origin recently voted UK's improvements in their environmental performance of its merbau, cannot prove it is legal, and is pushed by Favorite Retailer. and, as a minimum, comply with the requirements of Junckers to ‘take risks' to meet demand. Illegally exported local and international laws and regulations.'(62) Indonesian sawn merbau was seen in KTL's yards (see case studyon page 6).
Travis Perkins
In 2004 Travis Perkins pledged to ‘eliminate . . timber Travis Perkins markets Junckers merbau flooring. Junckers' With 750 stores, Travis and forest products that originate from illegally supplier (KTL) buys merbau from Papua, did not know the origin Perkins is probably the harvested timber',(63) and to avoid Indonesian timber of its merbau, cannot prove it is legal, and is pushed by UK's largest chain of products until legality could be guaranteed.
Junckers to ‘take risks' to meet demand. Illegally exported timber and builder's Indonesian sawn merbau was seen in KTL's yards (see case study Jewson's Timber Procurement Policy states: ‘We seek Jewson markets Bruce (Armstrong) merbau flooring in dedicated With over 450 stores, to obtain clear evidence of good forest management in-store displays. Bruce's supplier Kreasi buys all it's merbau from Jewson is one of the UK's practice at the original source.'(64) Papua, where illegal logging is rampant. The company admits that leading timber and merbau trees in Papua are getting scarcer because there is no builders merchants. replanting, and confessed that it did not know where in Papua itsmerbau comes from or even if it is legal (see case study on page 4).
Leroy Merlin
Leroy Merlin is a signatory of Club Proforet, the French Leroy Merlin markets merbau flooring produced by Indonesian Europe's second biggest member organization of WWF's Global Forest & Trade company Tanjung Kreasi. All of Kreasi's merbau is from Papua, DIY chain. Focused in Network (GFTN).(65) where illegal logging is rampant. The company was unable to Europe, but with 298 say where in Papua its merbau comes from or if it was legally outlets worldwide. sourced (see case study on page 4).
Conclusions and Recommendations
• List merbau (Intsia spp.) on Appendix III of All consumer
the Convention on International Trade in Rampant illegal logging of merbau trees is driving Endangered Species (CITES), with a limitedexport quota for merbau products.
should enact
the destruction of the largest remaining tract ofvirgin tropical forest in Asia – the jungles of the • Call on consuming countries to halt imports of remote Indonesian province of Papua. This illegally sourced Indonesian timber and wood prohibit the
destruction is being driven by international demand for cheap merbau timber for use in wood flooring. import and
EIA/Telapak investigations into the merbau • Accede to Indonesia's request for the country supplies of five global brand-name flooring to enact reciprocal controls to ban the import timber and
companies, including the four largest in the from Indonesia of sawntimber products world, reveal that: prohibited from export from Indonesia. Other countries such as China and Vietnam should None of these companies knows precisely also take similar steps.
where all their merbau comes from or can which have
prove it is legally sourced – directly The European Union
contradicting environmental assurances given • Include processed wood products in the to consumers.
voluntary legality licensing schemes to be set • The vast majority of the merbau used by at up with producer countries under the planned least three of these companies originates in Forest Law Enforcement Governance and Indonesian Papua.
Trade (FLEGT) partnership agreements.
• Two of the largest flooring brand names have All consumer countries, including the EU
supplied flooring made with merbau cut byMalaysian companies recently accused of • Enact legislation to prohibit the import and illegal logging in protected areas. sale of timber and wood products which have • The Indonesian supplier of one major flooring been illegally sourced.
company admits to paying bribes to obtain seized illegal merbau logs at auction, while theMalaysian supplier of another has imported • Cease manufacturing, distributing or selling illegal merbau sawntimber from Indonesia.
merbau wood flooring until the timber usedhas been verified as legal by an independent • Merbau flooring supplied by these companies assessor and a full chain of custody can be is on sale across Europe and North America, including in the world's largest DIY chainstores.
• Introduce and implement wood purchasing policies requiring that all wood is verified as • The flooring manufacturing companies and the legally sourced by independent assessors, retailers they supply have failed to invest in including a full chain of custody.
auditing their supply chain to ensure illegaltimber is excluded, and are instead content to • Refrain from making environmental claims in take the word of suppliers at face value.
relation to wood products unless these can bebacked up in the manner described above.
• Though importing companies and retailers must take immediate action to clean up their supply chains, new laws are ultimately neededin the EU and US which specifically prohibit • Do not trust the environmental assurances of the import and sale of timber and wood retailers and manufacturers about the legality products which have been illegally sourced.
or sustainability of wood products unlessthese can be backed up by independentverification with a full chain-of-custody.
• Only buy wood products which have been independently verified as legally sourced, with a full chain of custody, such as wood sold under the Forest Stewardship Council (FSC) scheme.
• Improve enforcement against illegal logging • Stop buying merbau flooring until it is and associated trade and prosecute the available with the assurances given above.
powerful syndicate leaders and their backersin the military and police.
• Reform laws and regulations where necessary to ensure that logging is sustainable andbenefits indigenous communities.
1. Seneca Creek Associates, LLC and 17. Floor Covering Weekly, 18/25 July 37. Letter to EIA/Telapak from Junckers, 51. Letter to EIA/Telapak from Kahrs, 15 Wood Resources International, LLC, prepared for AF&PA, Illegal logging 38. Letter from Junckers Industrier A/S to 52. Kahrs Catalogue, p16, & Kahrs and Global Wood Markets: The 19. European Federation of the Parquet Subsidiary website: Competitive Impacts on the US Wood Industry, website, 16 September 2004 & MTIB document Products Industry, Nov 2004 issued by Junckers.
2. Jakarta Post, Wild cancer' takes toll on 20. MSI Report, Domestic Floorcoverings 39. EIA/Telepak Internal Report of Field 53. EIA/Telapak store survey, January forests, minister says, Investigation, August 2005 21. Company annual reports, 2004 40. Letter to EIA/Telapak from Junckers, 54. EIA/Telapak, The Last Frontier, 3. The Jakarta Post, Bad cops undermine 22. Armstrong World Industries Inc, illegal logging raids, Annual Report, 2004 41. Timber Trade Federation, TTF Reports 55. Goodfellow Inc., 23. Global Witness, A Choice for China, Progress Sourcing Legal Timber from Statement on Merbau Flooring, 4. Conservation International, Wilderness Area Facts: New Guinea, 2003 24. Greenpeace, Briefing: Rainforest 30 September 2004 56. PIERS, 2005, op.cit.
5. BBC News Online, Science team finds Destruction at the Queen Sofia 42. EIA/Telepak Internal Report 'lost world', 7 February 2006 Museum, September 2005 of Field Investigation, August 2005 58. Point P Website: 6. The Guardian, Money supplement, 25. Seneca Creek Associates and Wood 43. Junckers websites and EIA/Telapak Resources International, Nov 2004, store survey, January 2006 7. EIA/Telapak, The Last Frontier, 44. Tarkett website 26. Armstrong website, February 2006 45. Tarkett website: 59. The Home Depot Website: 8. Ministry of Forestry Indonesia, Operasi 27. Armstrong environment report on Hutan Lestari II report, Armstrong website. February 2006 28. Letter to EIA/Telapak from Armstrong _policy.shtml, Jan 2006 9. ITTO, Market Information Service World Industries Inc., 9th February 46. The Star, Rampant illegal felling of 60. The Home Depot Corporate Website: Reports, Feb-Oct 2005 timber at Tasik Temenggor, 21 April 10. The Jakarta Post, Bad cops undermine 29. Port Import Export Reporting Service 2005; The Star, Illegal Felling Of portal/Wood_Purchasing, Jan 2006 illegal logging raids, (PIERS) data, 2005 Merbau Trees In Perak, 13 May 2005 30. Pers.comm, PT Tanjung Kreasi Parquet 47. Tarkett website and EIA/Telapak store Industry, August 2005 survey, January 2006 12. The Jakarta Post, 1000 illegal logs 31. PIERS, 2005, op.cit.
48. The Star, Rampant illegal felling of confiscated in Papua, 32. Home Depot & Lowes websites and timber at Tasik Temenggor, 62. John Lewis Website: EIA/Telapak store survey, 21 April 2005; The Star, Illegal Felling 13. EIA/Telapak, Pers. comm, confidential, Of Merbau Trees In Perak, /pdf/rscode2005.pdf, Feb 2006 33. Jewson & Leroy Merlin websites and 63. Travis Perkins Website: 14. House of Commons Environmental EIA/Telapak Jewson store survey, 49. The Star, Perak orders halt to logging Audit Committee, Sustainable Timber, at Tasik Temenggor, 22 April, 2005; Second Report of Session 2004-5, 18 34. Junckers website: Bernama, Perak Bans Logging In Temenggor Reserve Forest, 18th May 64. Jewson Website: 15. European Commission, Forest Law 2005; Bernama, Heli To Be Used To Enforcement, Governance and Trade 35. Kompass, Junckers' financial summary, Check Timber Thefts In Perak, (FLEGT), Proposal for an Action Plan, 36. Junckers website: 50. Contract Flooring Journal, 65. WWF Forest & Trade Asia Website: 16. FEP Statistics 2004; Floor Covering "We Never Take Merbau Logs", Weekly, 25 July 2005 /homepage.swf, February 2006 %20Participant.pdf, Feb 2006 exclusion zone, white area to be kept clear DO NOT PRINT BOX exclusion zone, white area to be kept clear DO NOT PRINT BOX 62-63 Upper S
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