In a highly integrated country like the United States, one would be hard-pressed to find an industry that faced no form of government regulation. Businesses must therefore make every effort to stay informed and up to date about the rules and regulations that affect their profits and business decisions, and the lumber industry is no exception. In fact, lumber importers, wholesale lumber dealers, and exotic hardwood dealers are currently facing heightened requirements as a result of the U.S. government’s efforts to reduce illegal logging practices.
Before 2008, the U.S. was somewhat behind the times in terms of its efforts to reduce instances of illegal logging, but in 2008 the government decided to revamp its position on the issue. Where once the U.S. gave an impression of little concern, the revisions they made to the Lacey Act, an approximately 100 year old law, represented their new, tougher stance. Essentially, where once the Lacey Act excluded the logging industry, now the logging industry is included. The change was described by many as an enormous step forward, one that set the U.S. apart from other nations in terms of its commitment to addressing the problem of illegal logging.
The additions to the Lacey Act do not only affect those individuals directly responsible for illegal lumber harvesting, but it also includes provisions for the prosecution of any and all individuals and organizations involved in the upper levels of the supply chain. If the government determines that a company has purchased lumber that was associated with unlawful logging practices, the Lacey Act allows the government to seize that lumber. Furthermore, the U.S. government also has permission to seize even products that have already been made from that lumber.
It should come as no surprise that of all the types of wood affected by illegal logging, exotic hardwoods are the most heavily affected. These woods are imported from all over the world, often from regions whose logging standards vary greatly. If a company does not choose its supplier carefully and does not choose a reputable lumber dealer like McIlvain Company, they could find themselves in quite a bit of trouble.
An example of a company whose choice of lumber suppliers caused them problems is Gibson Guitars. This company has been investigated repeatedly for suspicion of using wood obtained using illegal logging practices, and in August of 2011, federal agents seized pallets containing wood, guitars, and electronic files.
The company was suspected of unlawfully importing Indian sawn ebony logs, and this incident represents the second time in two years that Gibson Guitars has been implicated in such a case. The issues Gibson Guitars is facing stem not from questions of whether or not the wood was harvested legally; rather, what is in question is whether or not it was legal for the Indian-sourced lumber to have been finished outside of India, as it was.
Although the Indian government issued Gibson Guitars written permission to act as they did (which will likely result in no serious penalties for Gibson Guitars), the Lacey Act and its interpretation by Gibson Guitars has caused the company a world of inconvenience, at the very least. This scenario illustrates the fact that the Lacey Act could cause problems for American companies in the event that one country’s interpretation of logging rules differ from those of the United States.
As the Gibson case continues to unfold, an important precedent will likely be set for how the Lacey Act will be applied to future cases. Industry leaders like J. Gibson McIlvain will have to continue to work hard to comply, even as the laws themselves continue to develop.
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