LONDON - Lumber Liquidators Chinese wood suppliers may have mixed illegally harvested Siberian lumber into its supply chain says a new report, a violation of the U.S. Lacey Act, which has banned logging in protected forests beginning in 2008.
The 64-page report issued this month by the London-based Environmental Investigation Agency (EIA), a non-governmental watchdog group, details the extent and nature of illegal logging in the Siberian forests of Russia's Far East.
While the report does not offer direct evidence Lumber Liquidators knowingly purchased illegally harvested lumber, it offers anecdotal evidence that the practice by Chinese-owned sawmills in Russia of mixing illegally harvested wood with legal lumber is widespread.
The report may have prompted the September 26 raid of Lumber Liquidators Toano, VA headquarters and a retail outlet in Richmond, VA, according to Shelly Banjo, a reporter at the Wall St. Journal. Immigration and Customs Enforcement and Homeland Security Investigations executed a search warrant at the flooring manufacturers company headquarters in Toano, VA and a nearby retail store. Lumber Liquidators said at that time the search related to the importation of certain of its wood flooring products.
"Lumber Liquidators, the largest specialty retailer of hardwood flooring in the United States, emerged as the strongest example of a U.S. company whose indiscriminate sourcing practices link U.S. consumers to the destruction of critically endangered tiger habitat and forests in the RFE [Russian Far East]," says the EIA in a release about its report. "While making record profits in recent years, Lumber Liquidators has turned a blind eye as its purchases have fueled rampant illegal logging in the region."
Lumber Liquidators faces business challenges in contending with the investigation. A New York law firm known for initiating shareholder action, Faruqi & Faruqi, says it is investigating potential claims against the board of Lumber Liquidators.
Lumber Liquidators says it takes compliance with the Federal very seriously, issuing a statement following the raid:
"Lumber Liquidators sources its products directly from approximately 110 domestic and international mills around the world. As a result of the normal course of business, the Company is subject to a range of international and domestic regulations. Due to the scale of its international and domestic operations, Lumber Liquidators has policies and procedures in place for the sourcing, harvesting and manufacturing of its products designed to comply with federal and other regulations related to the importation of wood flooring products. The Company has more than 60 professionals around the world who perform and monitor those processes."