Europe Following Lacey Path?

While we participated with Members of Congress, environmental groups and other industry this past week in a reception that formally recognized the two-year anniversary of the passage of the Lacey Act for plant imports, the European Union took its first steps in codifying similar legislation.


Compared to the U.S. Lacey Act, the EU’s proposed regulation is loosey-goosey. It does not encompass the entire supply chain with liability, but focuses on the first operators that place timber and timber products on the market for the first time. It also excludes recycled material, and printed products for the time being. The penalties for violation are predicated on the amount and severity of environmental damage, value of the timber and tax loss among other factors.

Operators will be required to put in place a due diligence system to address three elements: access to information, risk assessment and mitigation of the risk identified. Like the U.S. law, the EU is not offering a prescriptive solution on what constitutes due diligence but identifies certain basic information that must be sought and recorded such as country of harvest, quantity, overseas supplier information etc.

The regulation further calls for the establishment of monitoring organizations to manage due diligence systems. We’ve leaned that the UK Timber Trade Federation intends to apply to the EU for official status as a monitor. The monitors will be under government scrutiny as the regulation calls for regular checks to verify the verifiers (we kind of like that provision).

The EU is expected to approve the regulation in early July, and will become law in 2012.

It will be interesting to see how well the EU process unfolds. Their approach of drafting stand-alone legislation seems to have absolved the many problems with amending an existing wildlife law (the Lacey Act). Two years into Lacey and although primary importers are doing just fine with implementation, those further down the supply chain with more highly processed products are struggling to meet the declaration requirements.