Gibson Guitar Raids Show Need for Lacey Act Reform

Gibson Guitar Raids Show Need for Lacey Act ReformHere are the highlights (or lowlights) of the government's August 24, 2011, Lacey enforcement raid, according to Gibson Guitars:

  • Armed SWAT Teams seized $1M in wood, guitars, corporate records, hard drives, emails and shut down Gibson's facilities.
  • Government told Gibson that all guitars that it sells are subject to criminal prosecution including its customers.
  • Gibson's CEO accepted all potential criminal responsibility to shield Gibson employees and maintain productivity.
  • No charges / case have been filed after two years from first raid and JDepartment of Justice has missed court deadlines.
  • India wood seized in most recent raid is not a protected species on the CITES list according to World Wildlife Fund and is FSC Certified.  
  • Seizure was based on potential India technical export law violation even though India approved the export, and not clearly on a Lacey statutory purpose. 
  • Through the strict liability (liability without fault) seizures of valuable products and records, and brand destruction and business interruptions, Gibson has been effectively tried and convicted without due process or any charges to defend.

The Lacey Act makes it a crime to sell illegally logged wood. The purpose of the law is to prevent illegal logging and deforestation which are having substantial adverse global impacts on forest habitat, environment, and accelerating dangerous climate change.

The result of this most recent raid at Gibson Guitar has been an outpouring of objections, scheduling of a Republican Congressional Oversight hearing, and a subsequent meeting that Justice scheduled with Gibson. Environmental groups have been walking a tightrope to ensure that further enforcement is forthcoming while sympathizing with Gibson's forest certification achievements and commitments.

The recent raid also resulted in much greater support for the National Consensus Lacey Defense to Liability Standard. Not only does a due care voluntary consensus standard provide the needed certainty for all sellers of wood globally in the supply chain, but it is also expected to greatly increase Lacey compliance. Right now there is nothing but confusion over what to do regarding Lacey.

Voluntary consensus standards have played a key role in regulating commerce since the 1850s and are given great weight with federal agencies based on the Technology Transfer Act and government guidance.

Recent examples of highly successful consensus standards are the LEED global green building standard, and the Phase 1 Environmental Site Assessment Standard defining due care for environmental investigation and cleanup as part of real estate transactions that achieved 95% compliance in the commercial real estate market in five years through real estate securities, and was subsequently codified by EPA. 

Key parts of the Lacey National Defense Standard are the use of FSC Certified Wood Standard, SMaRT Sustainable Product Standard requiring FSC, and the step-wise approaches to FSC. These standards provide substantial value to society, with the Leadership Standards Campaign Public Draft Framework Appendix recognizing FSC as the leadership wood standard and SMaRT as the leadership sustainable product standard, due to their leadership prerequisites and pollution reduction and prevention actions. The Campaign is a coalition of leading environmental groups, manufacturers, purchasers and professional societies.

Moreover, these leadership standards were uniquely determined to be more profitable, less risky and preferred by investors in peer-reviewed due diligence released at the NYSE by leading investors, investment banks and credit rating agencies. This added financial value for these standards can be measured for manufacturers and retailers with at least three product lines certified to FSC and SMaRT, by the consensus national Sustainable Manufacturing Underwriting Standard.  

Importantly, according to the Wall Street Journal and Sierra Club, Berkshire Hathaway recently conducted a Lacey legality assessment for leading Asian countries and concluded it was not feasible due to government corruption. As a result, it is relying on FSC Certification and substantially reduced its wood imports.

"Chaos often breeds life." Does this confusing Lacey state of affairs provide fertile ground for Henry Adams' 1907 premise?  The leading retailers, environmental groups and manufacturers developing the Lacey Defense Standard certainly believe so.  

Mike Italiano is chief executive officer of Capital Market Partnerships (CMP) of Washington, DC. CMP is a nonprofit, nonpartisan coalition of investment banks, investors, governments, countries and NGOs created by Market Transformation to Sustainability (MTS). Italiano is also founder of the U.S. Green Building Council and director of the Sustainable Furnishings Council.  For further information, contact 202-338-3131 or [email protected].

Read related articles:

Congressman responds to Lacey Act controversy (Posted 9-21-11)

Wood industry groups rally support for Lacey Act (Posted 9-02-11)

Gibson Guitar Raid: The Lacey Act Runs Amok (Posted 9-16-11)

FSC says wood seized at Gibson Guitar not certified (Posted 9-2-11)

Gibson Guitar says Fed raid unfounded (Posted 8-25-11)

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