DIY shops across Europe are selling wood taken illegally from Russia’s far-east taiga region, where corruption is contributing to the rapid destruction of virgin forests, a report has claimed.
More than 100,000 tonnes of lumber have entered Germany, France and other EU countries as part of one of Russia’s biggest illegal timber scandals, it is alleged. The business is in turn linked to two companies registered in the UK.
The report, by the environmental group Earthsight, suggests trees in Siberia are being plundered at an alarming rate. The remote region is home to bears, wolves, lynxes and endangered tigers. Its peat and frozen soils store vast amounts of carbon.
There have been unprecedented wildfires in Russia in 2019 and 2020 as a result of global heating. According to Greenpeace, 13.5m hectares of natural areas have been destroyed so far this year, an area bigger than Greece.
A timber conglomerate in the Khabarovsk Krai region is allegedly behind much of this illegal timber trade. The firm, the BM Group, denies wrongdoing. Its president, Alexander Pudovkin, was arrested last year and is under investigation together with two government officials, accused of abuse of office.
According to Russian prosecutors, Pudovkin has admitted paying kickbacks in return for lavish state subsidies and forest concessions. He is due to stand trial.
Contracts were given to Pudovkin without tender, prosecutors allege, with state funds handed over for a sawmill that was never built.
In March 2019, Russia’s domestic FSB spy agency raided the Khabarovsk offices of the BM group, seizing computer hard drives and a safe. The prosecutor’s office initiated a criminal investigation. As a result, the firm was removed from a federal list of priority investment projects.
Prosecutors claim its affiliate Asia Les logged 600,000 cubic metres of wood illegally. They allege licences for logging were obtained through bribery and fraud. The project was fraudulently misrepresented as being compliant with the requirements for state aid, they add.
The BM group says the legality of this timber has yet to be settled in court. Most of the Asia Les wood went to neighbouring China. But larch also found its way to Europe, where it was sold for home cladding and to build yachts.
The wood was allegedly shipped from St Petersburg to the German port of Kiel and from there to DIY stores across the continent. Destinations included Germany, Estonia and France. The trade, which the report says is illegal, took place despite an EU ban on the import of suspicious timber. Rules oblige importers to carry out checks.
The BM group said it had “valid forest leases” for its logging activities. It added that it complied with Russian legislation, logged a smaller area of forest than claimed and helped the local indigenous population. It dismissed Earthsight’s report as “biased” and “incorrect”. Pudovkin and Asia Les did not comment.
Two UK-registered companies are BM Group customers, according to customs records. One, Goka, shares an address with a Covent Garden massage parlour. Its Russian co-director, Ekaterina Burnistova, said the firm had “no role” with the BM Group. The other, Miramex, is a letterbox firm in Scotland. Its opaque corporate owners are based in the tax haven of St Kitts and Nevis. They could not be reached.
The BM Group has chopped down and degraded an area of virgin forest the size of London, UK, the report alleges, citing recent satellite images. It is a profitable business. Asia Les has felled taiga forest worth a staggering €870m, Earthsight estimates.
After the scandal broke in 2019, the report says many European importers continued to purchase suspect wood. Some even increased their orders. The larch found its way into French high street DIY stores, and a large German chain, it is alleged. It may also have ended up in the UK.
Over the past five months, Khabarovsk there has been large-scale anti-government street protests. They follow the arrest by Moscow authorities of the region’s popular governor, Sergei Furgal. It was Furgal who removed Asia Les from a list of federal investment projects, after one of his former officials was accused of taking bribes.
The Earthsight findings follow a previous investigation that revealed illegal wood from Ukraine was on sale in Ikea branches in Europe. The group’s latest report, titled Taiga King, suggests the authorities responsible for enforcing EU law have not got to grips with the problem.
EU and UK lawmakers are debating tougher rules to tackle Europe’s role in driving global deforestation through its consumption of wood and other “forest risk commodities” such as beef and soy.
“Yet again, European consumers have been revealed to be aiding and abetting the destruction of the world’s precious forest,” Earthsight’s director, Sam Lawson, said on Wednesday.
“Governments must act urgently to prevent this, both by passing new laws and better enforcing existing ones. They must stop hiding behind these flawed green labels.”