With all the intrigue of a Hollywood plot, the stir created over the recent raid involving Gibson Guitar reminds me of why many people don’t feel that they can trust the federal government. In late August, federal authorities confiscated several pallets of wood, electronic files and guitars from Gibson facilities in Memphis and Nashville. It appears that the federal government is getting ready to make a case that Gibson, an iconic American guitar manufacturer, has violated the Lacey Act, which seeks to protect endangered species and prohibits the trade of goods that are illegally obtained.
It is interesting how news reports and public outcry on the Internet has blown certain aspects of the case way out of proportion. It seems that the Lacey Act, which was amended in 2008 to include logs and wood products, may be the new poster child for excessive government interference in private business.
Blog posts, including a section of Gibson’s website, played up the fact that armed federal authorities swept in and took Gibson property. They made it seem like SWAT teams stormed the Gibson factory and rescued hostages or something. The fact is that federal officers take their guns with them to lots of places. This includes restaurants, gas stations, public buildings, etc.
A number of news reports missed the fact that the wood in question is not an endangered species. It seems that one of the primary problems in this case may be the paperwork involved in exporting the wood and the adherence to laws that may not be actively enforced in the country of origin.
What the whole Gibson incident reveals is how complicated the entire illegal timber issue has become. When most people hear about illegal timber, they think of stolen trees cut down from rare rain forests or other protected areas. But in reality, illegal timber can mean a wide variety of things. This includes both endangered and common species, clerical and paperwork errors, and complex local laws that are on the books yet rarely followed. Sure, some of the material may be endangered species or stolen timber. But what is clear from the latest development is that not all “illegal timber” is created equal.
Henry Juszkiewicz, chairman and CEO of Gibson Guitar Corp., responded to the recent raids, “Gibson is innocent and will fight to protect its rights. Gibson has complied with foreign laws and believes it is innocent of wrong doing. We will fight aggressively to prove our innocence.”
The guitar maker insists that the wood in question was controlled under the Forest Stewardship Council standards. Explaining their interpretation of the allegations, Juszkiewicz said that the federal authorities have “suggested that the use of wood from India that is not finished by Indian workers is illegal, not because of U.S. law, but because it is the Justice Department’s interpretation of a law in India. (If the same wood from the same tree was finished by Indian workers, the material would be legal.) This action was taken without the support and consent of the government in India.”
The enforcement of foreign laws that could even be used to protect the interests of foreign workers at the expense of U.S. industry has raised the anger of some in the business community. This fact has allowed some to try to label the Lacey Act as just another example of government intrusion that will cost American jobs.
While it is true that the Gibson case may be an example of overly aggressive enforcement, the government may also merely be following the letter of the law. And until the case is tried in court, nobody knows for sure if Gibson is guilty or not.
It can be hard to even get a firm decision within the forest products industry on this case and the need to reform the Lacey Act. Some involved in export oppose the strict application of the law and believe it needs to be reformed to primarily protect endangered species. Others believe the law helps American sawmills and lumber companies compete against foreign competition that skirts local laws in the country of origin.
The Hardwood Federation and the National Hardwood Lumber Association are two industry voices that have supported the amendment to the law a few years ago to include wood and wood products. They also have defended the Lacey Act’s recent use and said that the cries to repeal or significantly alter the law would hurt American hardwood sawmills.
One timber industry lobbyist said, “The world is watching this debate.” A number of countries have adopted timber provisions similar to the Lacey Act. Some in the U.S. hardwood industry fear that major changes to Lacey could have a ripple effect in other parts of the world.
The Gibson case also raises again the issue of certification and environmental protection. If the material in question follows FSC standards, what does this say about the most popular certification standard in the world? How can an importer know the material that is being obtained is legal if even the most recognized standard in the world is not good enough to satisfy some government scrutiny?
While some in the industry believe the Gibson case is a problem that they just wish would go away, others see it as a case study that can drive improvements with the enforcement of the Lacey Act. The Gibson case had raised some issues that may need to be addressed given the wide variety of rules governing international trade. Wood products can be declared illegal just because of regulatory interpretation differences from one country to another. This can make it very difficult for importers to know how to comply. Some critics call for an independent arbitration process to be setup to deal with disputes, such as the Gibson case.
If you want to read a detailed analysis of some of the major problems that have arisen due to the Gibson raids, see the article on page 50. This article captures some of the key issues and encourages all sides to work for a reasoned solution all the while recognizing the benefit of the Lacey Act.
The Lacey Act may indeed protect some U.S. jobs as well as endangered species. But if improperly administered or enforced, it could also hurt American industry, including the U.S. export of wood and wood products as foreign governments seek retaliatory action.
None of these issues are easy. And we must get beyond soundbytes to the core issues. Or else we face the risk that the laws intended to protect forests and properly produced wood products could end up putting them on the endangered species list.
