Previously blogged about it over here.
Who is being held in account?
Nashville base Gibson
Gibson admitted violating the Lacey Act, which requires firm to know the timber use is legally obtained.
How much it is being fine?
USD 300,000 fine and USD 50,000 for community payment
Also includes confiscation of ebony and rosewood worths USD 500,000 from India and Madagascar.
What is the community payment for Gibson Guitar?
Gibson Guitar shall further provide a community service payment of USD 50,000 to the FWS to be used to promote conservation, identification and propagation of protected tree species used in the musical instrument industry and the forest where those species are found.
What are the others responsible to be carried by Gibson Guitar?
Gibson shall also implement a compliance program designed to strengthen its compliance controls and procedures.
In related civil forfeiture actions, Gibson shall withdraw its claims to the wood seized in the course of the criminal investigation, including Madagascar ebony shipment with a total invoice value of USD 261, 844.
How did it started?
Back in 2010 and 2011, Gibson's premises were raided by the US Fish And Wildlife (FWS) services, with agents impounding ebony and rosewood imported from Madagascar and India.
What was the evidence?
The FWS found evidence that an employee had told Gibson two years previously that its Madagascar imports might be illegal, but that the company had nevertheless ordered further stocks.
Further information can be read in the article release by the US Department of Justice , and a quote of the overall scenario here,
Madagascar Ebony is a slow-growing tree species and supplies are considered threatened in its native environment due to over-exploitation. Both legal and illegal logging of Madagascar Ebony and other tree species have significantly reduced Madagascar’s forest cover. Madagascar’s forests are home to many rare endemic species of plants and animals . The harvest of ebony in and export of unfinished ebony from, Madagascar has been banned since 2006.
Gibson purchased “fingerboard blanks,” consisting of sawn boards of Madagascar ebony, for use in manufacturing guitars. The Madagascar ebony fingerboard blanks were ordered from a supplier who obtained them from an exporter in Madagascar. Gibson’s supplier continued to receive Madagascar ebony fingerboard blanks from its Madagascar exporter after the 2006 ban. The Madagascar exporter did not have authority to export ebony fingerboard blanks after the law issued in Madagascar in 2006.
In 2008, an employee of Gibson participated in a trip to Madagascar, sponsored by a non-profit organization. Participants on the trip, including the Gibson employee, were told that a law passed in 2006 in Madagascar banned the harvest of ebony and the export of any ebony products that were not in finished form. They were further told by trip organizers that instrument parts, such as fingerboard blanks, would be considered unfinished and therefore illegal to export under the 2006 law. Participants also visited the facility of the exporter in Madagascar, from which Gibson’s supplier sourced its Madagascar ebony, and were informed that the wood at the facility was under seizure at that time and could not be moved.
After the Gibson employee returned from Madagascar with this information, he conveyed the information to superiors and others at Gibson. The information received by the Gibson employee during the June 2008 trip, and sent to company management by the employee and others following the June 2008 trip, was not further investigated or acted upon prior to Gibson continuing to place orders with its supplier. Gibson received four shipments of Madagascar ebony fingerboard blanks from its supplier between October 2008 and September 2009.
As a result of this investigation and criminal enforcement agreement, Gibson has acknowledged that it failed to act on information that purchasing Madagascar ebony may have violated laws intended to limit over harvesting and conserve valuable wood species from Madagascar, a country which has been severely impacted by deforestation.
What are the rationale and related to EU Timber Regulation, that will come in force in March 2013?
The Environmental Investigation Agency (EIA) welcomes the resolution of this landmark case as both vindication (clear of blame / suspicion) of the amended Lacey Act itself, but also a clear precedent for E.U. government to implement the EU Timber Regulation
Faith Doherty, Head of Forests Campaigns at EIA’s UK office – which has spearheaded the development of the EU Timber Regulation – agreed.
“This landmark case sets a clear benchmark for European governments in their enforcement of the EU Timber Regulation from March 2013”, said Doherty, adding that “despite significant corporate and political resistance to justice, the U.S. government has this week demonstrated that principled enforcement of historic laws prohibiting illegal timber trade is both possible, and much needed, and we expect Europe to ensure EU law has the same effect.”
Both the Lacey Act and the EU Timber Regulation explicitly prohibit trade in illegal timber in the U.S. and EU markets respectively, and both laws mandate timber companies to exercise “due care” or “due diligence” when purchasing and placing timber on the market.
While the Lacey Act came into force in May 2008, the EU Timber Regulation comes into force in March 2013.
In the EU, EIA is working to ensure member states are prepared for the implementation of the Timber Regulation, and that adequate political and financial resources are being deployed to ensure effective yet efficient enforcement is prioritized. EIA is also working to ensure member states adopt adequate and harmonized penalties for breaches of the law – and are highlighting the penalties faced by Gibson as a step in the right direction.
Doherty said: “We hope EU governments and traders have taken note of the Gibson case. Only through the forfeiture of hundreds of thousands of dollars of illegal wood, and similarly high fines, will unscrupulous actors in the timber trade be dissuaded from disregarding both the environment and the law. This is also a very clear message to suppliers of wood worldwide. There is no room for illegally sourced timber or wood products in the market. We now have the law to help us. “
What would had happen if Gibson did not settle?
While the agreement suggests that Gibson Guitars knowingly imported illegal wood from Madagascar. It is a crime punishable by up to five years in prison and hefty fines and perhaps deserved a bigger penalty, Gibson has for now avoided all criminal charges for its conduct. Companies should take note of the facts in this case and the significant penalties incurred, as well as the due care specifications outlined in the agreement. The US is taking the Lacey Act seriously and future prosecutions may not be so generous.
A more detail article of overall prosecution upon Gibson Guitar case is available in EIA website reported by Lisa Handy, Senior Policy Advisor USA.
My thoughts about this
US Lacey Act amended in 2008 was introduced without any sort of preparation for the importers and importing countries. It is a single window method, and there is no get-out-of-jail free card. Do the due care and correct declaration to identify the source and species type is part of the process to ensure you are "not knowingly" an irresponsible purchaser.
EU Timber Regulation is slightly complex. The Voluntary Partnership Agreement (VPA) between EU and the partnering countries is to minimize the risk of the woods coming from illegal source, where raw wood materials are from various sources or exploiting tree species listed in CITES (Centre for International Trade of Endanger Species). And, this case does not enable us to visualise what would happen if the timbers sourcing from various timber are not traceable. What happen if the wood is not traceable back to the origin? And if the wood is found to be illegally traded (for it is source of illegal, controversial or endanger species) are from the partnering countries, what would the scenario be like?
What is CITES?
CITES (the
Convention on International Trade in Endangered Species of Wild Fauna and
Flora) is an international agreement between governments. Its aim is to ensure
that international trade in specimens of wild animals and plants does not
threaten their survival.
~Thank you for
reading~
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