Ikea using illegally sourced wood from Ukraine, campaigners say

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  • The report provides evidence that some of the beech wood used in Ikea’s flagship Terje chair and other products came from a state-run forestry enterprise in Ukraine that was violating the law.
  • Ikea’s suppliers in Ukraine harvested logs from the Velkyy Bychkiv state forestry enterprise during a “silence period” when the type of logging they were carrying out was legally prohibited.
  • Campaigners say the Forest Stewardship Council, one of the world’s largest and most influential timber certification organizations, failed to note or take action on the illegalities.

The global furniture giant Ikea used illegal timber from Ukraine in its supply chain and one of the world’s preeminent forestry certification organizations failed to stop it from happening, a new report says.

The report, published last week by the U.K.-based environmental watchdog Earthsight, accuses Ikea of sourcing manufactured products — including its flagship Terje folding chair — from suppliers that have used logs that were felled illegally in Ukraine.

“In this case, VGSM, the company that was supplying these chairs and chair parts to Ikea is cutting some of the trees itself, but it’s doing so under illegally issued licenses issued by the State Forestry Enterprise that controls the forest,” said Sam Lawson, director of Earthsight.

Like in other former Soviet bloc countries, forest regions marked for logging in Ukraine are managed by state-run enterprises. Most of these “state forestry enterprises” are controlled by Ukraine’s State Agency of Forestry Resources, including one in Velkyy Bychkiv, a remote region in western Ukraine near the Romanian border.

It’s in this region where campaigners say that state authorities allowed a company called VGSM, one of Ikea’s suppliers, to cut down beech trees during a “silence period” between April and mid-June, when Ukrainian law mandates a halt on certain forms of logging during the critical breeding period for lynx and other species.

According to the report, those logs were also felled under a “sanitary felling” permit, a widely abused loophole in Ukranian forestry that allows large numbers of trees to be cut down and sold provided they were already damaged by disease or insect infestation. These permits have become a loophole for industrial logging and are often issued even when the felled trees show little or no sign of degradation.

Some of the logs harvested in Velkyy Bychkiv were processed into furniture for Ikea right on-site at VGSM’s nearby lumber yard. Others were sent across the border to Romania, where another of Ikea’s partners, a Romanian company called Plimob, turned them into the Terje as well as other chairs.

In an email to Mongabay, Ikea responded to Earthsight’s report by saying that it “does not accept illegally logged wood in our products.”

“When we encounter any information that suggests wood which does not meet our requirements has entered, or is at risk of entering our supply chain, we take immediate action. This includes the termination of suppliers’ contracts,” the statement added.

Well-worn terrain for Ukraine

The allegations against Ikea are far from the first time that campaigners have taken aim at Ukraine’s management of its forests. In 2018, Earthsight released a report that accused the Ukranian government of widespread corruption by officials responsible for overseeing logging, with the subsequent release of an investigation by the European Union backing up many of the group’s claims.

The report caused a scandal in Ukraine, with then-Prime Minister Volodymyr Groysman saying, “the facts are terrible,” and ordering a crackdown on illegal activities by forestry officials. While that crackdown initially led to a sharp drop in the volume of illegal timber exports leaving Ukraine, since then reform efforts have stalled.

Local environmental activists say that a key reason why has to do with the way Ukraine’s forests are managed. The government agency tasked with overseeing forestry — the State Agency of Forestry Resources, or SAFR — simultaneously collects profits from forests it controls while also being responsible for preventing illegal logging in those forests.

According to Yehor Hrynyk, a campaigner with the Ukranian Nature Conservation Group, an environmental organization that contributed to Earthsight’s report, this setup breeds corruption.

“The state forestry enterprises are a direct structure within the state forestry agency. They do monitoring as well as have control, and herein lies the big conflict of interest because they’re interested mostly in profit-making and therefore all the corruption and illegalities appear,” he said.

In 2018, inspectors from Ukraine’s State Environmental Inspectorate visited the Velkyy Bychkiv state forestry enterprise and noted that it was illegally granting logging permits during the spring silence period. But there was no notable follow-up by authorities, and in 2019 and 2020 the practice continued.

“All they could do is fine them with a penalty of $20,” Hrynyk said. “They actually didn’t do that, but even if they did, come on. Twenty dollars, it’s nonsense.”

Since the release of Earthsight’s report, Ukranian authorities say they’ve opened criminal proceedings against the Velkyy Bychkiv state forestry enterprise.

The fox guarding the forest

In response to the report, Ikea said it would be asking the Forest Stewardship Council (FSC) to carry out an audit of its supply chain to locate any further illegalities.

But Lawson says that a big part of the reason why Ikea was profiting from illegal timber from Ukraine is because FSC had failed to catch the problem and act on it in the first place.

“We’re concerned that their investigation will not be broad enough in scope and it won’t be truly independent,” he said.

Created in 1993 as a mechanism for environmental activists to work with the logging and wood manufacturing industries to cut down on unsustainable and illegal logging, FSC has since become one of the world’s largest timber certification organizations. The FSC logo appears on wood products and corporate websites across the globe, indicating that FSC has given its stamp of approval to a company’s operations or its ability to sort through whether the timber in its supply chain comes from legal or illegal sources. FSC charges companies for this certification, which allows those companies to slap a large markup on the timber products they sell to consumers.

FSC has repeatedly come under fire by environmental activists, who say the organization is acting as a de facto arm of industry and “greenwashing” timber on the global market. These critics say that FSC’s fee structure creates an inherent conflict of interest, with most of its financing coming from corporations and foresters who pay to have their supply chains certified.

“FSC certifying bodies are profit-making companies that compete for business from logging companies to audit them,” Lawson said. “And there is a natural tendency towards a race to the bottom. Whoever is the least strict is more likely to get business.”

In 2018, Greenpeace, one of FSC’s founding members, announced that it was ending its membership, citing frustration with FSC’s lack of transparency and the influence of a bloc of industry players in preventing tighter regulations on logging practices.

According to the Earthsight report, VGSM and Plimob both hold FSC “chain of custody” certificates, and the logs that were illegally felled in Velkyy Bychkiv during the silence period were stamped with FSC’s seal of approval. After Ukrainian officials noted the illegalities in 2018, a subsequent visit by FSC-contracted auditors to the Velkyy Bychkiv state forestry enterprise did not include any follow-up investigation of those findings or a withdrawal of certification for any of the companies implicated in them.

In an email to Mongabay, FSC said it had terminated 29 certificates in Ukraine between 2019 and 2020, and that its interpretation of the laws related to sanitary felling and the silence period differed from Earthsight’s.

“The logging carried out by Velyky Bychkiw was performed outside of the area designated for the silence period. Therefore, according to FSC standards, the company was not violating the law and was in compliance with FSC standards,” wrote Kim Carstensen, the FSC director-general.

But Hrynyk says FSC’s credibility is waning in Ukraine, and if it doesn’t disentangle itself from the influence of logging industry interests it risks becoming irrelevant.

“If we don’t put pressure on FSC now I think it’s doomed,” he said. “Because all the problems I know from the global perspective as well as inside Ukraine say that FSC is not working at all.”

For Lawson, the illegalities uncovered at Velkyy Bychkiv imply a bigger and broader problem for both Ikea as well as FSC.

“As we make clear in the report, there is high risk wood throughout Ikea’s supply chain including from elsewhere in the Ukraine and Russia as well,” he said.

“And all that wood’s legality and sustainability is being guaranteed by the same flawed FSC and Ikea systems. So they need to go far beyond just an investigation that looks at the particular suppliers of these chairs.”

This story first appeared on Mongabay

South Africa Today – Environment


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