Romania’s forests, Europe’s last remaining virgin forests and some of the continent’s largest populations of bears, wolves, and lynx, are under serious threat due to rampant illegal logging.
According to the latest EIA’s (U.S. Environmental Investigation Agency) report – Stealing the Last Forest: Austria’s Largest Timber Company, Land Rights, and Corruption in Romania – released in Wednesday, provides new evidence to the business practices by the Austrian company Holzindustrie Schweighofer in Romania.
The report documents how Schweighofer processes large amounts of illegally harvested timber from Romanian forests into semi-finished wood products and biomass, selling the products throughout the European Union.
“Schweighofer is one of the largest timber companies in Europe and unfortunately a major driver of illegal logging in Romania,” said Alexander von Bismarck, Executive Director of EIA.
Also on Wednesday, WWF filed a complaint at the Federal Forest Office in Vienna for violations of the European Union Timber Regulation (EUTR) and calls for a full investigation of the allegations against Schweighofer.
According to the report, over 50 percent of logging in Romania is illegal. This includes illegal cutting in national parks, clear-cutting, overharvesting, use of false permits, and logging on stolen land. According to the Romanian government itself, 20 percent of public forest land has been restituted illegally after the fall of Communism, instead of being returned to the rightful owners.
In its investigation, EIA identifies and documents actual cases of each type of illegal logging in the forest and found that in nearly every case the wood was on its way to, or ended up at, Schweighofer’s mills. And Gabriel Paun, director of the Romanian NGO Agent Green, believes the trade is deeply penetratred by criminal organisations
EIA’s report also finds that Schweighofer has caused massive damage to the furniture industry in Romania by pushing up prices and buying out timber stocks. According to former Romanian Minister of Environment, Doina Pana, this practice has cost the Romanian economy 50,000 jobs since Schweighofer settled in the country. Schweighofer extracts the profits from its Romanian businesses through a complex network of companies. At the head of this structure sits a private foundation (“Schweighofer Privatstiftung”) registered in Austria, through which the company enjoys significant tax benefits.
Magor Csibi from WWF Romania added that it should be economic common sense to further process wood in Romania in order to create jobs, economic growth for the local communities and more relevant income for the state budget. “Unfortunately, the market became dominated by major actors who took advantage of the legislative gaps and created an economic model which concentrates only on the maximisation of profits, ignoring the sustainability of the forest ecosystems.”
In order to protect their business model, Schweighofer actively tried to prevent a new forest law in Romania that limits the share one single company can have in the national timber market. In a letter to the Romanian Prime Minister, CEO Gerald Schweighofer threatened to sue Romania in international courts and to lay off all of the company’s Romanian employees should the new law not be retracted.
Schweighofer: ‘Biased and inaccurate information’
In turn, Schweighofer officials said in a press release that EIU report includes “biased and inaccurate information” about their activity. Moreover, Austria-based company said that had never accepted illegal wood, being an adept of responsible wood processing.
Schweighofer denied the unmarked logs that had entered its collection points or sawmills.
The company has said it is committed to sustainably harvesting forests for timber, and that its forests are certified by the independent Forest Stewardship Council and the Programme for the Enforcement of Forest Certification.
“Holzindustrie Schweighofer makes already all efforts pertaining to a company in the industry of woodworking to help stop the phenomenon of illegal logging: providing transparently data for the traceability of timber which we buy, rejecting and reporting suspicious suspected timber deliveries, compliance with the entire legislation in force and enforcing compliance of all legal requirements of our suppliers,” the press release reads.