The United States’ Lacey Act
The United States has become the first country in the world to place an outright, criminally enforceable ban on the import of illegally harvested timber, addressing this issue both nationally and internationally from the demand side. Illegal logging and the international trade in illegal timber has been recognised as a major global problem in environmental, social and economic terms particularly for timber-producing countries of the developing world. It causes environmental damage, costs governments billions of dollars in lost revenue, promotes corruption, undermines the rule of law and good governance and funds armed conflict. Consumer countries contribute to these problems by importing timber and wood products without ensuring that they are legally sourced. A study by the Union of Concerned Scientists, in October 2015 confirmed that US imports of illegal wood have declined significantly since the Lacey Act was amended in 2008.
- The Lacey Act amendment requires that importers of wood products and subsequent handlers in the supply chain exercise due care to ensure that the wood is of legal origin.
- It appears to have already had some positive results in reducing illegal logging and increasing due diligence assessments and demand for certified wood products.
- The target audience is anyone who imports, exports, transports, sells, receives, acquires, or purchases any wildlife or plant in the United States as well as all operators along the supply chain.
- The amendment of 2008 specifically targets individuals and companies who are involved in the trade of timber or products made thereof.
- The implementation of the Lacey Act Amendments contributes to Sustainable Development Goal 15 on the protection of terrestrial ecosystems and sustainable management of forests. The policy is also connected to Sustainable Development Goal 12, on sustainable production and consumption. At least for consumers in the US, imported wood will contain smaller percentages of illegally produced wood fibre.
The Lacey Act (Chapter 53 of Title 16, United States Code § 3371 – § 3378) with its amendment of 2008 under the Farm Bill (the Food, Conservation, and Energy Act).
Food, Conservation, and Energy Act of 2008. [English]
The European Timber Regulation 995 was motivated and partially modelled on the 2008 Lacey Act amendments.
Additionally, the 2013 Australian Illegal Logging law was modelled after the Lacey Act amendments.
More recently, Japan has passed legislation designed to crack down on imports of illegal timber.
The US continues to participate in multi-country dialogue on illegal logging and associated trade under the Asian Pacific Economic Forum (APEC) in support of these common global objectives.
The law scored highly on the Future Justice Law and Policy Standard with the informers agreeing that it does particularly well in the areas of public participation and the precautionary principle. Its flexibility and the fact that it is a ‘fact-based’ rather than ‘document-based’ law are also seen as key features. However, while it has been welcomed by some wood producing countries like Indonesia, others have accused the US of protectionism and imposing unnecessary bureaucratic burdens on developing countries and importers without offering adequate support.
Our “Best Policies” are those that meet the Future Just Lawmaking Principles and recognise the interconnected challenges we face today. The goal of principled policy work is to ensure that important universal standards of sustainability and equity, human rights and freedoms, and respect for the environment are taken into account. It also helps to increase policy coherence between different sectors.
- The Lacey Act amendments attempt to put a halt to the trade in illegally sourced wood and plant products from the world’s forests thereby addressing the protection of biodiversity, the protection of forest resources and the mitigation of climate change.
- Chapter 53, Title 16, subsection 3372 (a)3(B) of the Lacey Act makes it illegal to possess or sell any plant product that violates “any limitation under any law or regulation of any State, or under any foreign law.” This means that communities in any part of the world can pass the necessary laws to protect the natural areas and artefacts that are valuable to them and the Lacey Act will uphold those laws if they are violated and the illegal product ends up in the US. It also has specific provisions respecting Indian tribal law.
- The social and human rights costs of illegal logging can be brutal and severe (including violence, intimidation, loss of land and livelihoods and forced labour). The Lacey amendments rectify power imbalances by withdrawing the huge rewards received by illegal loggers from the international market. This does not only strip loggers of their power but at the same time strengthens the land tenure rights of indigenous peoples.
- In terms of poverty reduction, illegal logging costs developing countries nearly $10 billion annually, so reducing it is a key factor in reducing poverty.
- By reducing rewards for those who violate laws in producer countries and penalising those who tolerate that violation in the largest consumer country (US), the Lacey Act supports disadvantaged or disempowered groups (e.g. indigenous peoples whose forests are being cut down) against the powerful groups who are carrying out these violations, providing the legal mechanism for them to be punished.
- One of the fundamental aspects of the law (subsection 3373 (a)1) is the requirement for ‘due care’ to be exercised in relation to the origins and legality of all wood imports. The Lacey Act enshrines the precautionary approach into international trade by ensuring importers get the safest wood they can in the lack of certainty.
- The burden of proof is on importers or traders of wood products who need to demonstrate that their wood products are from ‘low risk’ or sustainably managed sources and are not illegal. Those most affected by illegal logging are those whose forests are being cut down. Because a violation of the Lacey Act is triggered by an imported product that has broken “any foreign law”, it allows producer governments to decide what kind of local laws fit the particular needs or dynamics of their country, while the Lacey Act supports these laws by holding violators in the supply chain to account.
- There was an extensive and transparent process of public consultation including federal register notices and public meetings. In terms of post implementation (under subsection 3372 (f) 4) there are specific public notice, review and comments provisions which oblige the US agriculture department APHIS (Animal and Plant Health Inspection Service) to collect suggestions and feedback on the law.
- Three comment periods on the law have now been held with widespread feedback gathered from the public, industry/trade groups, NGOs and foreign governments.
- As well as the three domestic public comment periods, outreach meetings for industries and governments in other countries were held by US Agency for International Development (USAID) to ensure that foreign wood exporters and industries knew how to comply. USAID also produced a forest web portal for information exchange. The US Freedom of Information Act also provides for this transparency and access to information within the general US administrative procedures.
- Appeal procedures are primarily provided for within the general US legal system but under the Lacey amendments Members of the Executive branch under an inter-agency group (including Fisheries and Wildlife Service, Department of Agriculture, APHIS, Department of Justice etc.) are collectively obliged to implement public comments and concerns.
- There are several levels of institutions that are active in implementing this law. On the government side APHIS is in charge of customs declarations while the Department of Justice brings forward cases under the Act.
- On the industry and NGO side a strong coalition formed into an informal institution over two years of negotiations to try to find points of agreement on the law. NGOs like the Environmental Investigations Agency (EIA) have been instrumental in gathering evidence to prosecute violators of the law.
- A lot of social conflict globally is associated with illegal logging (mafia and triad gangs) and corrupt regimes are often funded by the trade (Khmer Rouge in Cambodia, the Liberian regimes “war timber” and the coup in Madagascar are examples). The Lacey amendments intend to drain the money and benefits from this illegal trade and with it the violence and abuses of human rights.
- The Lacey Act is ‘fact based’ rather than ‘document based’ as document forgery is relatively easy and widespread. This law now puts pressure on suppliers to obtain the ‘facts’ regarding the origin of wood products by asking questions of their supply chain and rooting out unethical conduct, or the suppliers themselves could be held liable. Section 3372 of the Act deals with the penalties and sanctions of noncompliance.
- The Act forces the integration of environmental protection and economic development by promoting sustainably sourced wood products, and outlawing illegal products that have had high negative effects on social justice and the environment in producer countries. It is trying to ensure that national laws protecting the environment and society are enforced.
- Reducing illegal logging has immense benefits for the environment and society by reducing for example biodiversity loss, corruption, landslides etc. Producer countries like Indonesia are losing US$3 billion a year in lost taxes and revenue from illegal logging that could have been used to benefit society (building schools/hospitals).
- The Lacey Act strongly enhances the sovereignty of producer countries by enforcing their national laws if violations occur and the wood harvested through these violations enters the US market.
- For the first time this law creates a mechanism for prosecuting those who are creating the most damage to the world’s forests, big companies who are complicit in large-scale deforestation by not asking questions, rather than the $2 a day logger who has gone to jail before now.
- Because the law is applying itself to so many situations and national contexts it is uniquely constructed to do that. Section 3372(a)3(B) makes clear that wood entering the US is only illegal if it has broken a local or national law, which is likely to be specifically appropriate to that countries cultural values, scientific knowledge and level of technology.
- The Lacey Act’s ‘due care’ requirements are flexible which means that the same levels of supply chain scrutiny are not expected from small companies (SMEs) as they are of large-scale importers like IKEA or Walmart. The burdens are overwhelmingly placed on those most equipped to bear them.
Iowa Congressman John Lacey first introduced the law in 1900 to improve the preservation of native species, especially birds. He aimed to prevent the transport of illegally captured wildlife and to halt the import of exotic species. The Lacey Act has since been amended several times, for example to extend its coverage to include fish and plants.
Until 2008 the Lacey Act only protected those trees listed under CITES (Convention on International Trade in Endangered Species) but a strong coalition of conservation, industry and labour groups lobbied for an amendment to widen its scope. Senator Ron Wyden and Congressman Earl Blumenauer championed the amendment which was passed on 22nd May 2008 under section 8204 of the Farm Bill (the Food, Conservation, and Energy Act of 2008) to cover a broader range of plants, including timber and timber products, in order to thwart illegal logging and prevent illegally harvested or protected plants and trees entering the US. This made the US the first country to legislate against the handling and import of timber which violates the laws of the country the timber originated from.
The objective of the Lacey Act is the prohibition and prevention of wildlife trafficking as well as the illegal trade of plants. With its newest amendment the Lacey Act specifically targets the illegal timber trade and the illegal harvesting of protected plants and trees
The amended Lacey Act prohibits all trade in plants and plant products which are illegally sourced from any US state or any foreign country.
Banned goods also include processed products such as lumber, furniture or paper and even products only containing a small wood component. Importers are legally obliged to declare the country of origin of harvest, the scientific names of all plants contained in their products as well as the quantity and value of the import. If the species of plant is not known, all names of possible species of plants have to be listed; if the country of origin is not known, all possible countries have to be listed.
A violation of the Lacey Act takes place if two basic actions occur:
- A violation of any law or regulation that protects plants or regulates their management (including any law, treaty or regulation of the United States, any Indian tribal law, any foreign law, or any law or regulation of any state).
- This illegal product then has to be traded in the US, i.e. exported, transported, sold, received, acquired, or purchased. It is this second act which triggers a violation of the Lacey Act.
Not only the person in possession of the illegal good is held to be liable, but also anyone involved in the chain of custody.
As the Lacey Act is a fact-based, rather than a document-based statute, documents do not guarantee proof of legality, as they can also be forged. If imported products turn out to be of illegal origin, this fact will override any statement or document to the contrary. Importers are therefore expected to exercise due care that a product is of legal origin, i.e. they have to show the degree of care which a reasonable person would exercise under the same or similar circumstances. Thus an importer can be charged under the Lacey Act even when he did not know about the illegal origins of a product, if he might have found out by exercising due care. Sentences range from the confiscation of products to fines up to $500,000 and up to 5 years in prison.
There are a range of positive impacts that can be attributed to the Lacey Act amendments. The first enforcement actions have already taken place with instrument-company Gibson prosecuted for illegally importing Madagascan rosewood for use in their guitars. As importers are forced to take responsibility for their wood products, due diligence assessments have dramatically increased and the demand for certified wood products has also grown substantially. There are estimates that the amount of illegal wood products on the market has been reduced by up to 25%, although it is difficult to untangle the impacts of the Lacey Act.
Surveys from producer and processing countries like China show that manufacturers are changing their buying and sourcing habits as a result. However, the full effects of the changes are only just being felt. The US imports 20% of global ‘forest products’ (including furniture) with estimates that 10% of that (or roughly 30 million cubic metres) could be of illegal origin. If the US strongly pursues the enforcement of the law, it could have a significant effect on reducing the demand for illegally logged timber with countries whose wood is at high risk of being illegal effectively being blacklisted by US importers.
A similar law could be applied in any other wood importing country where sufficient enforcement is provided. Aspects of the EU’s FLEGT (Forest Law Enforcement, Governance and Trade) Action Plan like the ‘Timber Regulation’ are based on the Lacey Act, while Australia, New Zealand and Japan are designing their own timber trade legislation based on the Lacey Act and the EU’s FLEGT regulation.