SGS's Statement, Unpacked
Based on the SGS statement, dated 2 March 2021, the inspection giant’s report appears to have overlooked undisputed evidence of crimes connected to Pudovkin and BM Group.
It said the Khabarovsk firms had the proper papers for their
forest leases and logging activities, which was not in dispute. The point was the
means through which they obtained them.
Yet when the court dismissed the bribery case against
Pudovkin, citing his “active repentance”, SGS claimed, bizarrely: “no
conclusion is possible regarding alleged past illegal activities and whether
they retrospectively affect the legality of the harvested timber sold by [BM
Group] or the compliance with the PEFC [forest management] standards.”
SGS said “no further information” was available for the court’s
decision. But context was not hard to find.
A simple internet search would have turned up, for example,
the earlier statement
from prosecutors spelling out what Pudovkin’s “active repentance” meant: he had
admitted guilt and helped investigators identify and prosecute his two accomplices
in a kickback scheme centred on a state-backed sawmill complex that was never completed.
SGS, the statement continued, “was not in a position to
comment” on whether the conglomerate and its affiliates breached PEFC standards
while the case against Pudovkin was ongoing. This skirted over the earlier conviction
of Khabarovsk official Vasily Shikhalev and the federal audit published months
before the arrests, whose findings BM Group did not dispute.
The inspection outfit said it “was aware” of the situation
regarding Asia Les and Logistic Les’ places on the priority projects list, yet,
in the next sentence, called the decision by Russian authorities to blacklist
both companies “unclear and not predictable”.
PEFC certificates for Asia Les and Logistic Les became
“obsolete” and were withdrawn after both firms lost their forest rights when
booted from the list, SGS said, adding that the sister subsidiaries and their leased
lands had accordingly been removed from the scope of BM Group’s forest
management certificate. BM Group would retain PEFC’s seal of approval until
January of this year, when the conglomerate handed back its coveted
accreditation after being contacted for comment for this article.
The SGS statement also addressed an apparent conflict of
interest Earthsight had spotted on a public
summary of a PEFC audit, whereby BM Group’s certification manager appeared
on the same document as his friend and business partner, who was listed as an
SGS representative who inspected the conglomerate’s forest leases. SGS called
this an “administrative oversight” where certification documents had been updated
without anyone bothering to change the auditor’s name.
It mentioned, as had Taiga King, that PEFC
rules allow logging in large areas of undisturbed woodland scientists call
“intact forest landscapes”, or IFLs, activities Earthsight reported BM Group
and its companies as doing. Again, this missed the report’s point about the
environmental damage this causes.
Concluding, SGS made an important admission. After
highlighting that PEFC sets standards for sustainable forest management –
standards which had in effect condoned fraud and corruption – it said: “forest
certification is not a tool designed to confirm the legal compliance of all
traded timber at any time.”
