Update on Lacey Act and Gibson Guitar : Confiscation of Ebony & Rosewood from India and Madagascar

Previously blogged about it over here.  

In 07 August 2012,  BBC reported : Gibson settles discord for timber 

Who is being held in account?

Nashville base Gibson

How was it settle? 
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~

Review of Old Post: How Lacey Act Influence the Way you do Business

I was doing some housekeeping on my emails today and saw this post, which is quite an interesting way to understand how Lacey Act influence any timber related business, which includes guitars.

What is Lacey Act?

The Lacey Act of 1900, or simply the Lacey Act (16 U.S.C. §§ 3371–3378) is a conservation law in the United States. Introduced into Congress by Representative John F. Lacey of Iowa, the act was signed into law by President William McKinley on May 25, 1900.

The Lacey Act protects both plants and wildlife by creating civil and criminal penalties^[1] for a wide array of violations, and most notably prohibits trade in wildlife, fish, and plants that have been illegally taken, transported or sold. The law is still in effect, although it has been amended several times.

And when Lacey Act was related to timber or rather illegal logging? 

When they update the Lacey Act. Updated Lacey Act becomes worlds first ban on illegal logging. Washington DC, USA 'Importers of wood products may want to keep an eye on newly passed regulations in last months farm bill. New amendments added to the Lacey Act aim to cut down on illegal logging.  Depending on how strongly the new provisions are enforced, the law could have implications for the furniture industries supply chain. The legislation creates a requirement for importers to declare the species and country of origin of any plant or plant product, including wood.

Penalties range from $250 to in excess of $500,000 with a possibility of jail sentence for knowingly sourcing, or failing to exercise due care when sourcing, products that contain illegal timber or plants.

The amendments added by this years farm bill to the Lacey Act are intended to protect forests worldwide from deforestation and illegal wood products from entering the United States.

With the passing of the law, the U.S. became the first country in the world to prohibit the import, sale or trade of illegally harvested wood and wood products. The new law is more stringent that the European Unions voluntary Action Plan for Forest Law Enforcement Governance and Trade, which targets countries that contain nearly 60% of the worlds forests, namely Central Africa, Russia, Tropical South America and Southeast Asia.

Tho, there are several of loopholes in Lacey Act, but the most obvious one are

1. There are no regulation of tracing wood material that maybe listed as endanger species (current or in the future), for whether it has been used or preserved over a hundred years that may enter or re-enter in US. Some good wood material can be reuse and it do falls under the endanger species list as it can sustain for a long time. 
2. The limit of Lacey is to wood, or the first sale of a product. As it is, a guitar will have to pass Lacey for the rest of its existence. That means 40, 50, or 100 years from now if a guitar re-enters the US borders, the ‘importer,’ whether an individual or a business, will have to attest to its materials, (genus, species, and country of origin) which is impossible to do, and causes the buyer to break the law by not being able to do it. Yet, by requiring that of the buyer, the Lacey Act does not do a thing toward the goal of Lacey, but it does work to stop commerce of used and vintage musical instruments.

When we in forestry, timber and legality talks about Lacey Act, the first thing that comes in mind is the Gibson guitar raided and imposed with Lacey Act. However, this topic has been debated several times and actually I see it as a stepping stone to get other guitar makers to be responsible on knowing where they get their wood supply. As such, the article  (or Bob Taylor) explained

That said, here’s how Lacey has affected the way we do business at Taylor Guitars. It’s very simple. We now investigate the sources of our wood, and we ensure to the best of our ability that the wood was taken legally. We fill out the paperwork required and we present our business, as an open book. The cost isn’t so much for us. It’s not an unbearable added burden, and we’re happy to do the extra administrative work.  

In BBC news last October 2011 posted a value of USD 500,000 of rosewood was seized from Gibsons Guitar; the shipment from India to Dallas in June 2011. Last 2 years ago,  Gibsons Guitar has their shipment for Magadascar ebony wood confiscated under Lacey Act amendment.The shipment from India was also rosewood from plantation (as claimed), however it was made illegal to export out from India, hence has violated Lacey Act.

And, why  are rosewood and ebony important in guitar making?

"The wood that goes into guitars is crucial to the tone of the instrument," says Laurence Juber, an acoustic guitarist who lined up with Sir Paul McCartney in Wings.
"I can show you the difference in sound between Indian rosewood and Brazilian rosewood and ebony and maple."
 

Woods are not like electronic items, it can be kept, become better, depending on the type of wood, density and species. And for guitar making, with good quality wood such as rosewood, ebony and/ mahogany,  if it is well kept, the sound would be more "beautiful" as years goes by. 

Malaysia  often host the rain forest music events, where all environmentalists, foresters, music and nature lovers gathers to enjoy and feast beautiful musics, certainly do not want to find out that their musical instruments (guitars are the most favorites among all to carry around the globe) are made from illegal source!

Martin & Co, Mahogany Solid

*Picture for illustration purposes, not related to the post*