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How To Do Lacey Act Due Diligence

Last updated on October 22, 2014 by Sozo Staff Leave a Comment

logger cutting tree with chainsawFrom its inception, we’ve known that The Lacey Act holds “everyone in the supply chain accountable for legal logging practices; from the lumberjack to the carpenter.” In the August 2011 situation with Gibson Guitars, the lumber industry received some clarification about exactly what “due care” or “due diligence” means. In March 2013, legislation by the European Union’s Timber Regulation (EUTR) provides a parallel for comparison, including an outline of a Due Diligence System, or DDS. As we go forward, we believe that the guidelines laid out in the EUTR can assist those of us attempting to comply with Lacey Act guidelines.

Access of Information

The first element required of a DDS (Due Diligence System) relates to the kind of information that both Lumber Importers and Lumber Distributors should be able to produce regarding their supply chain. The basic information includes a description of the product (both botanical and trade names), country of harvest (along with any regional details and specific concessions), quantity, and name and address of supplier.

logs stacked in forestRisk Assessment

Considering the source information, Importers and Distributors should try to determine whether the lumber product has been produced in a way that complies with the laws of the harvesting country. Some questions to aid in that evaluation include these:

1. Is illegal harvesting an issue in the country of origin? Is there armed conflict there?
2. Does the country of origin impose any economic sanctions?
3. Is the supply chain complicated?
4. Are the products certified or verified by a third party scheme — and, if so, can I trust the scheme?
5. How do I determine whether the suppliers in question comply with legislation?

While those questions can help in assessing the risk of non-compliance, it is still an open-ended process.

claw crane moving logsRisk Mitigation

Based on what’s revealed by the risk assessment, risk mitigation begins with exploration of any potential problems. Further investigation may mean securing verification documents, attaining certification, or sourcing the lumber products from a more reliable supplier. Of course, if your risk assessment process revealed that the risk is negligible, then no risk mitigation would be required.

While the steps above may seem rudimentary, they represent the first recommended course of action in complying with Lacey-Act-type legislation. Another benefit to these specifics from the EUTR is that U.S. suppliers will no longer be the only ones requesting documentation. Sawmills will no longer have other potential buyers that allow them to avoid the “red tape” — or a way to continue selling illegally or irresponsibly harvested or traded lumber.

For lumber importers, getting documentation will become easier, since suppliers will become more diligent about providing it. Finally, since the Lacey Act lacks language to clarify exactly what qualifies as “due diligence,” we’re hopeful that taking the DDS steps laid out by the EUTR will ensure Lacey Act compliance.

Dried lumber grading at J Gibson McIlvain Lumber Company
Dried lumber grading at J Gibson McIlvain Lumber Company

J. Gibson McIlvain Company

Since 1798, when Hugh McIlvain established a lumber business near Philadelphia, the McIlvain family has been immersed in the premium import and domestic lumber industry. With its headquarters located just outside of Baltimore, the J. Gibson McIlvain Company (www.mcilvain.com) is one of the largest U.S. importers of exotic woods.

As an active supporter of sustainable lumber practices, the J. Gibson McIlvain Company has provided fine lumber for notable projects throughout the world, including the White House, Capitol building, Supreme Court, and the Smithsonian museums.

Contact a representative at J. Gibson McIlvain today by calling (800) 638-9100.

Filed Under: Lumber

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