Gibson Guitars and Lumber Liquidators were once charged with hefty fines after being found guilty of using illegal wood. The wood brought in the U.S. went through Forensic testing, and it was found the timber (illegally logged) is often mislabeled, and that has been a persistent problem for industries dealing in sports goods, musical instruments, flooring, and furniture. In fact, a recent study from the US Forest Service, WWF, and World resources institute claimed that the ratio of mislabeled wooden products in the U.S. is 62%.
Researchers examined wood samples against specimens from Forest Service, using forensics to find any evidence of illegally logged wood that has been mislabeled, said Alex Wiedenhoeft, a research director at the U.S. Department of Forestry Services. Seventy-three commercial wooden products that major US retailers sold were examined in the labs by the advocacy groups, and it was found that these products had no identification in the report.
Moreover, Wiedenhoeft stated that out of 73 products that were tested, 40 of them were labeled incorrectly as long as tree species are concerned. Also, 20 products were not made of solid wood as labeled. He also claimed that we are not sure that what quantity of wood in the United States is mislabeled.
Mislabeling is an indication of deforestation and illegal logging, and it is a hindrance to the promotion of sustainable wood. Moreover, there are other implications to this illegal activity. For example, the government misses out tax on wood that is logged illegally. Moreover, it deteriorates the fair competition in the market. Apart from that, the inhabitants living near the harvested areas may face a compromise on clean water and clean air.
Loggers harvest the wood from prohibited or vital forests, and then this wood is mixed with other species so that the illegal harvesting can be covered. Furthermore, this thing keeps running in the supply chain, and misidentification of wood continues from manufacturing units to retail franchises or showrooms.
Statistically, the U.S. stands at the top of the list when it comes to importing the wood. As a matter of fact, 22% of global imports are associated with the United States, while China stands second in the list. In 2017, the United States imported wood, having a net worth of %51.5 billion.
Mislabeling is considered as a breach of the US Lacey Act, which deals with illegal importation or trafficking of wildlife. In 2008, plant products and plants (including timber) were also added as an amendment in the Act, and that is why Gibson Guitars was handed a hefty fine because of violation of the Lacy Act. Wood trade professionals get assistance from the International Wood Products Association in setting operation protocols as per the guidelines of the Lacy Act.
After the test reports released by Forest Service forensics and WWF, Floor and Decor had to explain their stance on labeling and accountability of their vendors. The senior manager of investor relations, Matthew McConnell, did not respond to the questions asked in the report. However, he highlighted the code of conduct for vendors, in which it is clearly mentioned that it is mandatory for the vendors to follow global responsibility pledge and all international, national, and local laws.
Lumber Liquidators were also found guilty of violating the laws. In 2015, an investigation report was issued by the Justice Department of U.S. and U.S. Fish and Wildlife service. According to the report, Lumber Liquidators were held guilty of smuggling illegal wood as it is against the regulations in the Lacy Act. The company was charged with a fine of $13.5 million. Apart from that, the company was also exposed to another felony in 2015. This time, the company faced accusations of sale of flooring in which carcinogenic formaldehyde levels were unsafe. After facing hefty penalties, Lumber Liquidators are finally expecting their first annual profit after 2014.