Ikea official criticizes U.S. Lacey Act

Declaration requirements said "unrealistic"

Heath Combs -- Furniture Today, December 11, 2008

HIGH POINT — A compliance officer at a U.S. distribution facility for Swedish retailer Ikea said the requirements for import declarations in the Lacey Act, passed last year to combat illegal logging, are unrealistic.

Amendments to the act require importers to declare the origin and species of wood used in their products.

Enforcement for some products affected by the amendments was to have begun on Dec. 15 but was postponed until April 1. Enforcement for wood furniture will begin on July 1.

A comment period for federal rulemaking on the amendments ended this week.

Christopher Smith, a compliance specialist with Ikea Wholesale Inc. in Westhampton, N.J., said in comments posted on a federal Web site that record-keeping requirements in the revised Lacey Act will overwhelm supply chains and cause the cost of wooden goods to skyrocket, unless the regulation is narrowed.

Smith outlined suggestions and challenges to the supply chain for vertically integrated retailers in an 11-page letter.

He said the law would require Ikea to transmit 33.6 billion lines of data over the course of a year if the company were to track wood species from the its network of 1,380 suppliers of components and finished goods in 54 countries.

"Trying to trace this information to certify compliance all the way through the supply chain to the harvesting of each and every tree is unrealistic," Smith said.

Adding to the complexity, he said, is that each manufacturer might source components and raw materials from a variety of suppliers.

"Without narrowly drawn regulations, the administrative costs and record keeping requirements would be so overwhelming and burdensome throughout the supply chain that the cost of almost any finished wooden consumer good would skyrocket," he said.

Smith suggested that the rules be amended to only require reporting if a species exceeds a certain percentage of the wood content of a certain product. Wood representing only a small percentage of a product or component would be exempt from reporting.

Click here to read Smith's letter.

The U.S. Customs and Border Protection is developing a system to collect the wood species data. Once the system is ready, enforcement will be phased in. Penalties for violating the act can include fines, jail or forfeiture of products.

The Lacey Act, enacted in 1900 and significantly amended in 1981, is the United States' oldest wildlife protection statute.

The Environmental Investigation Agency, a non-profit group and one of the main sponsors of the amendments, told Furniture/Today earlier this year that the strengthened regulations were intended mainly to stem illegally harvested wood coming from several regions, including Russia and Indonesia.

Indonesia's ambassador, Sudjadnan Parnohadiningrat, submitted a letter to the rulemaking saying that the regulation "will create enormous problems to our country as one of the biggest suppliers of wood and wood products in the world."