Europe awash with wood from billion-dollar Russian illegal logging scandal

16.12.2020

  • More than 100,000 tonnes of lumber linked to one of Russia’s largest illegal logging scandals has entered Europe, a new report reveals
  • Earthsight’s report, Taiga King, traces how timber giant BM Group plundered precious taiga forests home to brown bears, wolves and lynx
  • Boss Alexander Pudovkin now faces criminal charges of using bribes and corrupt deals to serve his business empire
  • Prosecutors say his sawmill firm illegally logged 600,000 cubic metres of wood – that would fill London’s Royal Albert Hall nearly seven times
  • Processed into finished products, this wood has a street value exceeding €870 million ($1 billion)
  • Imports continued after the scandal broke, thanks to poor enforcement of EU law and alarming failings of green label PEFC
  • Findings come as lawmakers debate tougher rules to tackle Europe’s role in driving global deforestation

London, 16 December 2020 – More than 100,000 tonnes of lumber linked to one of Russia’s largest illegal logging scandals has entered Europe despite strict import laws and mounting evidence of wrongdoing, an Earthsight investigation can reveal.

The report, Taiga King, exposes how timber giant BM Group and boss Alexander Pudovkin plundered precious taiga forests home to bears, wolves and lynx, through bribes and corrupt deals.

Pudovkin’s leadership earned him friends in high places and an honorary title from the Russian president. Now, disgraced but still in business, he faces court after admitting one count of bribery to tap funds for his botched sawmill venture.

Set in the sprawling far eastern region of Khabarovsk Krai, the Asia Les project promised hundreds of jobs and proceeds exceeding €1 billion within its first five years. It collapsed within a decade.

Customs records show Asia Les and BM Group affiliates have exported nearly €190 million of suspect wood since 2015.

Products include sought-after Russian larch used in cladding homes and promoted on TV property programs such as Grand Designs.

Of this, €30 million worth of lumber arrived in Europe despite an EU law banning imports of stolen wood and forcing importers to carry out checks into their supplies.

German firms accounted for two-thirds (69 per cent) of EU imports. France and Estonia were also important markets.

Buyers include suppliers of leading European DIY chains like Leroy Merlin, Mr Bricolage and Castorama.

Earthsight’s report details how Pudovkin sent bribes through a middleman to a Moscow official in exchange for state subsidies, and received cut-price access to forest concessions against the law from his friend, the region’s former deputy prime minister. The politician, whose son works for BM Group, also hid evidence of rulebreaking.

Handed huge forests and funds through murky deals, his Asia Les sawmill firm illegally logged an estimated 600,000 cubic metres of taiga forest. Processed into finished products such as cladding, this wood had a street value exceeding €870 million ($1 billion).

Earthsight calculated that BM Group logged and degraded an area of virgin forest the size of London during the last decade.

Many importers continued to purchase wood after the scandal broke – even after Pudovkin’s arrest last year following a raid on BM Group by Russia’s FSB security service. Some even increased their orders.

Aerial view of the Asia Les sawmill project in Khabarovsk Krai, Russia. Credit: Google Earth

The timber entering Europe and linked to illegal logging was certified as legal and sustainable by a global body that vets wood suppliers, Programme for the Endorsement of Forest Certification (PEFC). The green label’s flawed audits helped BM Group goods to evade EU controls, even though some customers claim to have conducted further checks.

Shipments persisted into this year despite the flagship EU Timber Regulation (EUTR) being in place to halt suspect imports.

The report comes hot on the heels of an earlier Earthsight exposé which revealed illegal wood from Ukraine on sale in IKEA branches in Europe. The Taiga King report shows again how the authorities responsible for enforcing the law in member states have failed in their duties.

The findings come as EU and UK lawmakers debate tougher rules to tackle Europe’s role in driving global deforestation through its consumption of wood and other “forest risk commodities” such as beef and soy. 

Earthsight director Sam Lawson said: “Yet again, European consumers have been revealed to be aiding and abetting the destruction of the world’s precious forests.

“Governments must act urgently to prevent this, both by passing new laws and better enforcing existing ones. They must stop hiding behind these flawed green labels.”

Notes to editors

  • Earthsight is a UK-based non-profit organisation that uses in-depth investigations to expose environmental and social crime, injustice and the links to global consumption.
  • The full report, Taiga King: How European firms fed a Russian tycoon’s billion-dollar illegal logging scam, can be read here.
  • The EU Timber Regulation, which took effect in 2013, prohibits the import of wood sourced illegally overseas (including as a result of corruption), and requires firms to conduct ‘due diligence’ to ensure the risk of importing such wood is minimised. On leaving the EU, the UK has kept similar legislation in place.
  • A large coalition of environment groups and companies is calling for additional laws to tackle consumption of other commodities driving deforestation, including beef, palm oil and soy. The UK government has proposed legislation but green groups say it does not go far enough. The EU is currently consulting on its own proposals, while MEPs recently backed tough new laws.
  • BM Group management told Earthsight all products exported were harvested in accordance with all relevant laws and regulations. They claim the wood had nothing to do with the activities and criminal case against “individuals” like company chief Alexander Pudovkin.
  • Alexander Pudovkin did not respond to a detailed list of findings in Earthsight’s report.
  • Presented with the findings in advance of publication, the European importers deny wrongdoing, though a number did nevertheless commit to investigate. PEFC has also launched an investigation into the accreditation given to BM Group.
  • Responses from all parties concerned can be found in the report.

For more information please contact press@earthsight.org.uk.

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