The EUTR in Germany and the fear of green washing

A recent German government guidance document for supporting investigations into EUTR compliance is light on information, but demonstrates that the competent authorities are getting ready to engage with the market (there is also some supporting documentation here). The first critical area being addressed is ‘who is active in the industry?’ because, certainly in Germany, the authorities are not yet entirely sure.

In the first instance the authorities are asking companies to register with the government if they are involved in the international timber trade. The government agency will then begin to execute the oversight processes, probably starting with a risk-based approach – for example targeting product and timber importers bringing in goods from high risk areas. Registrations have to be completed by November 2013.

The “competent authorities” have not dealt in this area before, so a further challenge is to train staff so they can ask the right questions of the traders. This is important because for non-compliant organisations the German authorities have put in place a series of fines – these have been reduced somewhat from the initial harsh penalties proposed, and are now in the €5,000-€20,000 range. However, the real significant threat will be the confiscation of goods that are non-compliant. In the first year 10% of first placers will be investigated (although the competent authorities are yet to identify how many organisations that 10% represents).

Der Spiegel recently carried an article on the illegal timber trade (German original; English translation), and highlighted how illegal product is still coming into the European market. It highlights a case where product from the Republic of Congo, which is a high risk market when it comes to the international timber trade. Der Spiegel estimates that the illegal timber trade is worth around $100 billion per annum, and 30% of the timber traded worldwide is associated with fake identities and licenses.

What is particularly interesting about Der Spiegel’s article is that it highlights the continued threat of green washing, giving the example of the Bois Bakri Corporation. Once the timber is inside the EU border, it can move with impunity. In particular this creates risk with the eastern EU border, where the import of illegal timber is perhaps a lower priority issue for the member states than other challenges– and so illegal timber may be directed through those borders by unscrupulous traders. This is of major concern to those operators who are fully compliant because the price advantage provided by illegally logged timber is so commercially significant – and is likely to encourage cross-border cooperation into the future.