Pressure mounts on US, EU to probe Brazilian timber imports

Pressure is building on environmental agencies and law enforcement bodies in the US and Europe to investigate imports from a large Brazilian exporter implicated in illegal practices and a vast timber seizure.

Earthsight revealed how large volumes of suspect wood from Brazilian flooring giant Indusparquet are entering the US and EU, possibly breaching import regulations, in a report published earlier this month, Untamed Timber.

The findings, sent to enforcement agencies and more than 500 importers, retailers and distributors of tropical wood flooring in these regions, drew widespread criticism of Brazilian President Jair Bolsonaro’s far-right regime’s controversial decision to lift sanctions against the firm.

The case was cited in a live interview with Brazil’s environment minister Ricardo Salles broadcast by the country’s largest radio station, where he fielded difficult questions about the government’s failure to combat illegal deforestation. Earthsight’s report also received prominent coverage in one of Brazil’s largest-circulation newspapers, O Estado de S. Paulo, as well as in international media outlets AFP and Mongabay.

Now, with influential environmental groups in Brazil and elsewhere questioning the unusual clemency Brazil’s environmental agency Ibama granted to Indusparquet, the company’s western customers face uncomfortable questions over their growing demand for its suspect wood.

The report detailed how Indusparquet’s exports to the US and Europe increased despite a raid by Ibama agents on the company’s two main warehouses in 2018, whereby the authorities seized more than 1800 cubic metres of hardwood worth an estimated R$10 million ($2.5 million) at the time.

The operation was the culmination of a joint probe by Ibama and the Federal Police into suspicions that a corrupt Ibama employee might be implicated in fraudulent schemes to launder illegal tropical timber. Indusparquet denies any wrongdoing.

After Bolsonaro came to power in 2019, his administration’s appointee to Ibama’s Sao Paulo office cancelled Indusparquet’s largest fine (R$482,300 / $123,000) under the operation and returned the impounded wood in a move condemned for lacking clear justification.

US and EU importers began an Indusparquet wood buying spree shortly afterwards, importing huge volumes of timber that could breach import laws. The flooring firm’s US clients are exposed to possible probes under the Lacey Act, which bans imports of illegal timber, while European importers may fall foul of the EU Timber Regulation (EUTR).

US retailer LL Flooring, formerly Lumber Liquidators, may have violated the terms of its five-year plea deal with law enforcement agencies for importing illegal wood by continuing to buy Indusparquet products following the seizures.

Untamed Timber also highlighted the difficulties facing those trying to tackle Brazil’s suspect timber trade and the need for stronger oversight of wood buyers worldwide.

The Indusparquet wood seized in the 2018 raid was stored without the corresponding volumes registered in Ibama’s electronic control system, a serious breach of Brazil’s timber rules and a common feature of the country’s illicit timber trade whereby shady traders mix illicit goods with legally-felled ones.

The violation casts serious doubts over the legitimacy of the wood’s origin, yet a Bolsonaro appointee with no prior experience in environmental protection returned it to the firm regardless.

Elisabeth Uema, a senior official at the Ascema association of civil servants specialised in environmental issues, told Earthsight that 21 of Ibama’s 26 state offices are led by Bolsonaro appointees. She labelled the decision to cancel Indusparquet’s fine and release its seized timber “shameful” given the “many signs of irregularities” in the case.

Earthsight continues to monitor suspect exports of tropical timber from Brazil and push for stronger enforcement by authorities in the US and Europe.