in Denmark, Liberia

How did DLH, a company trading illegal timber from Liberia, get Forest Stewardship Council certification?

Last week, the Forest Stewardship Council announced that it was kicking out Danish timber giant Dalhoff Larsen and Horneman (DLH). FSC did so after investigations by Global Witness revealed that DLH had traded illegal timber from Liberia.

But how did a company trading illegal timber get FSC certification in the first place? Patrick Alley, co-Director of Global Witness, says in a statement:

“Right now, consumers can’t be sure the wood they buy is legal and sustainable. FSC has done the right thing by expelling DLH, but it shows that you can’t even be sure that certified companies are trading legally.”

Global Witness found that in 2012, DLH bought 1,281 cubic metres of timber, worth US$304,870, from two Liberian companies. The timber was cut under illegal logging contracts and exported to Bangladesh, China and France. In February 2013, Global Witness found the logs in front of DLH’s warehouse in the port of Nantes in France.

As well as raising questions about the FSC system, this case also raises serious questions about the Danish and European regulators of the EU’s illegal timber ban that came into force in March 2013.

DLH got a “clean bill of health” from the Danish Nature Agency

In late 2013, Global Witness submitted evidence to the Danish Nature Agency, the authority responsible for enforcing the EU’s illegal timber ban in Denmark, where DLH has its global headquarters.

On 5 December 2013, the Danish Nature Agency visited the company and two days later gave DLH’s global business a “clean bill of health”. DLH maintains that it complies with EU law.

Global Witness’ Patrick Alley notes that,

“Danish authorities now need to explain why they found DLH legally compliant just months after Global Witness found illegal timber in front of its warehouse in France.”

FSC checks Global Witness’ investigations

Global Witness made a formal complaint to FSC in February 2014. FSC sprang into action. After two weeks, FSC accepted the complaint. Then nothing. For four months.

In July 2014, FSC established a Complaints Panel consisting of three FSC members: Berty van Hensbergen, Anna Jenkins and Hubert Kwisthout.

The Complaints Panel carried out its investigation and in November 2014 produced a Complaints Panel Evaluation Report and a public summary. The Complaints Panel recommends that “FSC shall disassociate from Dahlhoff Larsen & Horneman A/S and all its subsidiaries”.

In the public summary, the Complaints Panel writes,

DLH does not deny that it bought and sold illegal timber. It states it did so unknowingly and that the evidence that proved there was a problem was not available until December 2012.
The Panel believes that DLH did not intend to trade in illegally harvested timber. However the Panel considers that the company was negligent by failing to carry out an adequate due diligence

“Legally exported and audited” by SGS

In a press release DLH makes the following claim:

It is important to point out that all timber that DLH purchased was legally exported and audited by the certification company, SGS.

Société Générale de Surveillance (SGS) was hired in October 2007 to built and implement a chain of custody system in Liberia called LiberFor. The chain of custody system uses barcodes to track logs from the stump to the port.

SGS describes LiberFor as a verification of “Legal Origin”, thus allowing DLH to make its claim about “legally exported” timber. But FSC’s Complaints Panel notes that LiberFor is “only at best a verification of origin and tax payment”.

Has DLH really been kicked out of FSC?

Once DLH had been caught trading illegal timber, FSC had no choice other than to kick DLH out. Clearly any system that certifies timber operations cannot allow illegal timber into its certification system. Kim Carstensen, the Director General of FSC, says in a statement:

“The purchase of illegal timber has serious impacts on rights and livelihoods of land-holding communities, and our continued association with the DLH Group would clearly put the credibility of the FSC system at risk.”

FSC has disassociated itself from DLH. But what does this mean in practice? FSC explains:

Disassociation implies the immediate termination of DLH’s FSC membership as well as the suspension of all FSC certificates held by DLH, taking effect three months from today.

FSC has set three conditions for DLH to fulfil before FSC can re-associate:

  • DLH has to develop an action plan to compensate communities in Liberia for losses and lost income, and to restore forests destroyed by the logging from which DLH was sourcing its timber.
  • A “thorough third party verification” has to be carried out, confirming that DLH’s due diligence systems meet best practice standards, “to make sure that events like the ones in Liberia are not repeated”.
  • DLH has to pay FSC for the “establishment and work of the complaints panel”

So, when DLH writes an action plan, dusts off its due diligence system, and writes a cheque to FSC, it will have its FSC membership back. If it does so within three months, its FSC certificates will continue uninterrupted.

Last week, DLH stated that it is already “in discussions with FSC with regard to meeting the conditions for retaining certification.”

DLH’s “horrific” record

It’s not as if this is the first time that DLH has run into controversy. “DLH has a horrific record of financing conflict through the trade in timber during Liberia’s civil war,” says Alley

Here’s Global Witness on DLH’s operations during the brutal regime of Charles Taylor:

From 2001-2003, leading international timber wholesaler Dalhoff, Larsen and Horneman (DLH) bought timber from Liberian companies that were operating illegally and providing support to Charles Taylor’s regime during the civil war. DLH ignored repeated warnings from campaign groups over its handling of illegally obtained timber, and only acted when UN sanctions on Liberian timber came into force in 2003.

In 2010, Global Witness published a report titled, “Bankrolling Brutality: Why European timber company DLH should be held to account for profiting from Liberian conflict timber”.

DLH has neither been brought to justice nor compensated Liberia for its operations during the civil war.

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