MYANMAR TEAK

1. Context

• Teak from Myanmar's deciduous and evergreen forests is considered the most tensile and durable hardwood, resistant to water and termites.
• This prized wood is in demand for high-end furniture, veneer, and ship decking much sought after by the luxury yacht industry.
• Adding to its value, ironically, is Myanmar's shrinking forest cover and depleting teak reserves.
• Global Forest Watch says the country, over the last two decades, has lost forest cover roughly the size of Switzerland.

3. Why is teak imported from Myanmar described as “conflict wood”?

• Since the February 2021 coup in Myanmar when the democratically elected government was overthrown, the military junta has also taken control of Myanma Timber Enterprises (MTE), the state-owned company which has exclusive rights over the country’s precious timber and teak trade.
• The MTE has held an estimated dozen timber auctions since the coup and sales of this “conflict” wood, pro-democracy supporters allege, are a key revenue stream for the military regime.

4. Steps were taken to check the illegal harvesting of timber and teak from Myanmar

• In 2013, the European Union introduced the EU Timber Regulation (EUTR), which put the onus on timber merchants to do sufficient due diligence to disallow illegal timber from entering their markets.
• A year later, Myanmar itself banned the export of whole logs-the same year international NGO Environmental Investigation Agency (EIA) released data that showed that over 70% of the logs exported from Myanmar between 2000-2013 were illegally harvested.

5. Impact of the sanctions

• The EU consensus has been that since due diligence is not possible for all Myanmar timber and teak, any imports from Myanmar are a violation of the law.
• Also, as Forest trends have analyzed in its March 2022 report, since all MTE auctions are held in US currency, regardless of the nationality of the traders and imports from Myanmar should again be considered a violation.
• Despite this, the flow of teak originating from Myanmar continues into the US and several EU countries, as borne out by global trade data.
• Ans although direct trade into countries like Germany, Belgium, and Netherlands has come down to negligible quantities, imports into countries like Italy, Croatia, and Greece have increased.
• Plus, there have been numerous seizures of smuggled teak along Myanmar's borders of China and India, traditionally the largest importers of its teak.

6. What are the loopholes to be plugged to ensure that India is not looked upon as a leakage country?

• On the question of continuing exports (as evident from trade data) from Myanmar to countries where sanctions are in place, timber traders said their buyers were free to do DNA testing on the hardwood for traceability of origins.
• However, this science is a nascent one even in the developed world and has not been introduced in India either by timber traders or by police forces, for instance, as evidence against smugglers who are frequently caught along the Indo-Myanmar border with stolen truck consignments.
• The Indian Express noticed clear loopholes in regulations while teak was being exported to EU countries, which the trader's claim was paid for before the 2021 coup.
• Trade data reveals some Indian companies simply put "Asia" in the column for the origin of the wood, without specifying which country.
• Also, forest officials in Nagpur said that in transit passes they signed, traders wrote"imported" in the space for declaring where the teak was purchased from. These are loopholes that can be plugged in.

7. About Forest Steward Council (SFC)

• The Forest Stewardship Council (FSC) is an international, non-governmental organization dedicated to promoting the responsible management of wood forests.
• Since its foundation in 1994, FSC has grown to become the world's most respected and widespread forest certification system.
• FSC's pioneering certification system, which now covers more than 200 million hectares of forest, enables businesses and consumers to choose wood, paper, and other forest products made with materials that support responsible forestry.