A major US tropical wood product manufacturer is continuing to purchase wood from a Brazilian timber company, despite its having a public record of illegal logging and its owner being on the run, accused by the authorities of ordering murders of local farmers in order to secure access to valuable timber. In what is beginning to look like a pattern, we’ve also discovered that the US firm is buying wood supplied by another company with a history of illegality and violence, based in Indonesia.
Illustration: Samuel Bono / Repórter Brasil
UPDATE: Soon after the release of this investigation, IPP wrote to Earthsight , in May 2018, to state that it had cancelled all future contracts with Cedroarana.
Just over a year ago, the sounds of the Amazon rainforest were pierced by screams. On 19th April 2017, four hooded men armed with machetes, pistols and rifles went on a violent rampage in Taquaruçu do Norte, a heavily forested district in the Brazilian state of Mato Grosso. The brutal series of attacks along a 10 kilometre stretch of dirt road left nine local people dead. Some of the victims were executed with their hands tied behind their back, and showed signs that they had been tortured before being murdered. The shocking story, which became known as the Colniza massacre, made headlines in Brazil, and also caught the attention of the international media.
This was no random attack. According to a subsequent report by the Justice Department of Mato Grosso state, the massacre was motivated by loggers’ greed for the rich timber resources of the district. There is a long history of violence in the area linked to timber. One of the victims of the massacre had told police three years earlier that hooded men were terrorising the local population and that he ‘feared for his life’. Following their investigation, local Brazilian prosecutors concluded that the murders were the culmination of a campaign of violence intended to ensure that loggers could gain access to the forest where the small farmers lived, and harvest its valuable timber. They allege that the gunmen were hired by Valdelir João de Souza, a wealthy Brazilian sawmill owner and timber exporter. De Souza is currently on the run.
It turns out this isn’t de Souza’s first brush with the law. Two months after the authorities had submitted their indictment in May 2017, Brazilian investigative journalists revealed that de Souza’s two sawmill companies owed hundreds of thousands of dollars in unpaid fines to the Brazilian environment agency (IBAMA). The companies had been repeatedly fined for logging infractions over the previous ten years, most recently in April 2016. Of a total of 900,000 Brazilian Reals (US$265,000) of fines issued, just 2500 (US$750) had been paid.
You’d think companies such as these would immediately be shunned by European and US wood buyers, not least as it seems very hard to square trading with them with ensuring compliance with laws in both jurisdictions (the EU Timber Regulation and Lacey Act, respectively) which make it an offence to import wood sourced illegally abroad. But you would be wrong.
In November 2017, Greenpeace revealed how a number of firms in the US and Europe had continued to source timber from one of de Souza’s two sawmill companies even after the alleged link to the massacre had been made public, and also despite the unpaid fines. The timber had been supplied by de Souza’s company Indústria, Comércio E Exportação De Madeiras Cedroarana Ltda Epp (aka Cedroarana).
One of the buyers named by Greenpeace is South Carolina-based Industrial Pine Products (IPP). Timberleaks has learned that IPP – which describes itself as a leading US manufacturer of tropical hardwood products – has in fact bought more of Cedroarana’s timber since the massacre than any other overseas firm. Our information also shows that while other buyers halted purchases after being called out by Greenpeace, IPP has steadfastly continued.
Photo: Ahmad Jarrah / Repórter Brasil
Cedroarana supplies IPP with planed lumber of Angelim Pedra (Hymenolobium excelsum), a deep-reddish brown, hard wearing wood species known as ‘Angel’s Heart’ or ‘Brazilian Apitong’ which is used for truck trailer flooring and external decking. Since April 2017, IPP has purchased more than 300 tonnes, estimated to be worth over half a million dollars. Its most recent shipment arrived in January 2018 – 9 months after the murders and 2 months after being named as an importer by Greenpeace.
IPP’s parent company likes to play up its family-owned, sustainable credentials, claiming they take “sustainability very seriously”. Their website says they “even have a subsidiary, Andina Floristal, located in Bolivia so we can personally oversee the safe, responsible, and sustainable harvesting of our hardwood imports such as Angelim Pedra, Apitong, Purpleheart, Ipe, Jatoba (Brazilian Cherry), Tigerwood, and Cumaru.’’ The shipment records we have seen, however, indicate that their Angelim is really coming from a very different source.
Cedroarana is far from the only shady firm from which IPP is buying wood. It isn’t even the only one with links to violence. For example, the company recently sourced over 100 tonnes of keruing timber from PT Mendawai Putra, a sawmill in Indonesia. Publicly available reports show that this sawmill is owned by the family of notorious Indonesian timber baron, Abdul Rasyid. In 2000, after they found unmarked and likely illegal wood from nearby Tanjung Puting National Park in PT Mendawai Putra’s sawmill, a team of environmental activists were beaten up and threatened with a gun by Rasyid’s nephew. Other companies owned by the family have more recently been accused of illegally clearing more than 100 square kilometres of tropical rainforest.
In response to our findings, IPP’s President Mike Holm admitted being aware of the indictment of de Souza in May last year, but said that his company would only consider halting purchases from Cedroarana if its owner was found guilty. He did not appear to be aware of the previous fines issued to the company, and claimed not to have seen the Greenpeace report. He told us that Cedroarana has valid logging permits issued by IBAMA and that IPP has also visited the logging sites to confirm that the company is practicing sustainable forestry. He stated that his Indonesian wood supplies are imported by a third party broker. He insisted that all of IPP’s timber supplies are in full compliance with the Lacey Act.
While it might be the obligation of the justice system to consider someone innocent until proven guilty, there is no such obligation on a company purchasing goods. And it is not as if these are spurious reports. Ask Brazil’s most senior judges. While de Souza remains on the run from the authorities, running his businesses from hiding, he has had the gall to have his lawyers apply to the courts to overturn the pre-trial detention order he is refusing to comply with. When this application reached one of Brazil’s highest courts it was unanimously rejected by the justices, citing the strength of the evidence against him.
As for compliance with Lacey, IPP is playing a high-risk game. To avoid the risk of the highest potential penalties under the Lacey Act, US firms must practice ‘due care’ in choosing what they import and from whom. And while Cedroarana may have a valid logging license, that doesn’t guarantee the wood IPP receives from them is legal. It might have come from elsewhere, or be illegal in other ways. US Department of Justice prosecutors have stressed that “no single document or group of documents, whether or not official ones, is absolute proof of legality” under Lacey.
Given the seriousness of the allegations levelled against Mr de Souza, combined with his company’s history of illegal logging, it surprises us that IPP does not think it wise to take a precautionary approach, as we know a number of other buyers have done. We also wonder whether the buyers of IPP’s angelim decking would be so understanding, if they knew the facts as they currently stand. A lovely new garden deck doesn’t look quite so attractive if it brings massacres to mind.
Photo: Ahmad Jarrah / Repórter Brasil
 The description of events in the first two paragraphs of this story is drawn from the Greenpeace report ‘Blood Stained Timber’, which is in turn based on official Brazilian authority records regarding the case (number 1629-12.2017.811.0105, Code 78767) publicly accessible via the website of the Ministério Público do Estado de Mato Grosso, http://servicos.tjmt.jus.br/Processos/Comarcas/dadosProcesso.aspx