Top US plywood importer in league with one of the world's dirtiest timber companies

19.10.2017

A US firm is buying products made from the rainforests of Sarawak in Malaysian Borneo, supplied by a company known to have bulldozed intact forests, abused indigenous people and propped up the regime of a billionaire kleptocrat. It's industry PR representatives, meanwhile, claim that buying such products helps save baby orangutans

In January 2017, the giant bulk cargo vessel ‘Ingrid C’ offloaded more than 600 cubic metres of tropical hardwood plywood at terminals in New Jersey and New Orleans. At consumer market rates, the timber was worth more than half a million dollars. 

The plywood had been manufactured by Sarawakian logging and plantation giant Shin Yang. It was destined for Liberty Woods International, the US’s largest importer of hardwood plywood. It was not the first such shipment, nor is it likely to have been the last.

Shin Yang is one of the ‘big six’ giant Sarawak logging companies which for decades fuelled the kleptocratic regime of Sarawak’s Chief Minister, Abdul Taib Mahmud. During his 32-year tenure, Sarawak’s precious forests were plundered by these companies for their timber, with a large chunk of the profits creamed off into the hands of Taib and his family and cronies through various schemes.

Taib finally stepped down in 2014, having amassed an estimated net worth of some $20 billion. By that time, almost all of Sarawak’s forests had been stripped of their largest trees, and much of the remnants had been bulldozed to make way for palm oil plantations. Around the same time, it was revealed that Malaysia had the world’s worst deforestation rate.

Shin Yang rules an area five times the size of Greater London in the hilly uplands of central Sarawak, including a mountainous stretch of the border with Indonesia, which forms part of the ‘Heart of Borneo’ tri-national conservation initiative. The company controls all access to the area through a network of logging road checkpoints.

Informants have told Earthsight that these checkpoints are commonly manned by armed local gangsters. Villagers allege that the same gangsters are used to intimidate local communities and suppress dissent against the company’s operations.

The giant cargo vessel ‘Ingrid C’, which delivered Shin Yang plywood to Liberty in January 2017.

The company has good reason to be secretive. Safe from prying eyes, behind these barriers it has been engaged in an orgy of forest destruction.

In 2011, Earthsight investigators were among the first to pierce this veil of secrecy and personally witness the destruction wrought by Shin Yang in the Heart of Borneo. We tramped through the charred remains of intact forest and witnessed the bulldozed graves of the ancestors of local indigenous communities.

More recently, the ‘eye in the sky’ has provided further dramatic revelations. By 2014, only 5 per cent of Sarawak’s forest remained in a pristine state. 

The logging companies, which had gradually worked inland from the coast, had reached the last vestiges of Sarawak’s virgin jungles, along Borneo’s mountainous spine.

One of the largest such remnants was inside a Shin Yang logging license, but officially proposed as a National Park. That same year, satellite images showed that the company’s chainsaws had arrived in force, decimating the proposed Park at a rate of 42 football pitches per day

Though this was supposed to be ‘sustainable’ selective logging, high resolution imagery revealed a scene of almost total devastation, and an apparent disregard for logging regulations.

In a neighbouring license area being logged for a second time by the company, the destruction was even worse. The majority of the forest canopy was utterly destroyed (see picture below). The company had even logged to within yards of the Indonesian border, within a restricted ‘buffer zone’.

Documents seen by Earthsight clearly prove that one of the Shin Yang mills from which Liberty sources its plywood is in turn supplied with tropical logs from these same two areas in the Heart of Borneo. 

They also confirm that the re-entry logging in the second of those areas began without a legally required Environmental Impact Assessment.

Supposedly ‘selective’ and ‘sustainable’ logging by Shin Yang in the Heart of Borneo, inside the protected buffer zone along the Indonesian border. Photo: Earthsight

Shin Yang also has a well-documented history of conflict with indigenous people in Sarawak. 

When the Malaysian Human Rights Commission investigated the situation of an indigenous Penan community inside one of Shin Yang’s other license areas, it found “pollution resulting from logging and oil palm plantation activities [had] affected the rivers from which the Penans obtain fish and water for drinking, washing and bathing.” 

In 2013 the community launched a lawsuit against the company for violating their customary rights by invading their land. But while the lawsuit drags out, Shin Yang is continuing to log. 

Just last month, in a last attempt to save their remaining forests, the leader of the community appealed to Shin Yang's Japanese buyers, and even asked the Japanese government to intervene. ''Dear Prime Minister of Japan,'' he wrote, ''please make sure Japan does not accept wood that Shin Yang has stolen from us.''

''Please do not accept wood that Shin Yang has stolen from us.'' - Appeal by indigenous community leader in Sarawak, October 2017

Liberty has had a close partnership with Shin Yang for many years, going back at least as far as 2010. Once or twice a year, a large bulk cargo vessel like the Ingrid C makes the journey from Shin Yang’s mills in Bintulu to the US, loaded with hundreds of large bundles of plywood. 

The meranti plywood Liberty buys from Shin Yang is distributed to housebuilders, cabinet and furniture makers across the US.

Liberty’s President is quoted in an almost comically misleading article about US imports of meranti plywood from Sarawak published on the website of the IWPA, an industry association of which Liberty is a member. 

The article claims that orangutans are big “fans” of US wood purchases from the Malaysian state, on the basis that some of the revenues find their way to a government-run wildlife rehabilitation centre.

In reality this tiny centre likely owes its very existence to the supply of homeless orangutans stemming from the destruction the logging and plantation industry has wrought across the State. Far from helping save orangutans, purchases of Sarawakian plywood are more likely to be helping drive them to extinction.

IWPA: “The next time you stop in a large bigbox retail store to purchase some meranti plywood, know a baby orangutan somewhere is saying thank you” 

Liberty is one of a handful of large US importers of tropical hardwood whose names crop up again and again during Earthsight's investigations into high-risk US wood supply chains. 

These same companies source lumber, plywood and other high-risk wood products from a who’s who of the countries and regions most badly affected by illegal logging: Brazil, Peru, the Congo Basin, Russia. 

Their members form the backbone of the IWPA, which has lobbied for the watering down of the Lacey Act, which since 2008 has banned the import of wood which was sourced illegally overseas.

Companies like Liberty hide behind the fact that the products they buy from Sarawak are supported by government paperwork declaring them to be legal. The reality is that such paperwork is almost worthless. It says nothing about sustainability, and cannot even guarantee the wood is compliant with Lacey. 

The systems involved are incapable of preventing wood associated with the kinds of violations Shin Yang stands accused of from entering supply chains, and the Sarawak authorities have a well documented history of turning a blind eye to systematic breaches of logging regulations by major companies.

This is perhaps unsurprising given the role these companies are alleged to have played in the past in propping up a kleptocratic regime. In 2011, multiple sources alleged that Shin Yang supervisors routinely bribed and intimidated local communities so that they would vote for the re-election of the state’s billionaire ruler. 

Satellite images showing the progression of destructive logging by Shin Yang into an area of Intact Forest Landscape, in a proposed National Park in the Heart of Borneo Credit: Earthsight

Under pressure from buyers in Japan - where NGO's have highlighted its products being used in Olympic construction - Shin Yang has recently sought to improve its image. 

One of its logging concessions is now independently certified as legal and sustainable under the internationally-recognised PEFC system. 

But the Shin Yang products Liberty is selling are not the certified ones. In February 2016 and July 2017, Shin Yang even managed to get its logging concessions in the Heart of Borneo 'verified legal' against a local government standard by a third-party assessor. 

But the assessors only visited a tiny part of each concession, escorted by the company, and didn't investigate past transgressions at all. 

Their own reports also reveal that the Shin Yang mills which supply Liberty are flooded with 'high-risk' wood from elsewhere in Sarawak. It is doubtful whether Liberty are even aware of the verifications. 

When Earthsight contacted Liberty's CEO to ask how he could justify buying from Shin Yang, he didn't even reply. His firm was certainly happy to continue buying from Shin Yang for many years before these verifications existed.

Having trashed the forests under its control in Sarawak, Shin Yang is now building a giant sawmill bang in the middle of one of Asia’s largest remaining tracts of pristine forest, on the Indonesian part of the island of New Guinea. 

The mill is expected to be fed with timber from the clearance of the surrounding forests for what is mooted to be the largest palm oil plantation the world has ever seen. 

The joint venture partners bulldozing these forests have already broken numerous laws in the process.

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