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Mahogany imports from Peru via docks questioned EVERGREEN, Ala. -- In this quiet, small town where a sign at City Hall advises people to wear shirts and shoes, several stacks of sweet-smelling mahogany, nestled in a 10-acre lumberyard, lie at the center of an international controversy. A national environmental group alleges the wood was imported illegally -- cut from protected rain forests in Peru and belonging to the indigenous tribes that live there -- and has threatened to sue. It also claims the Port of Mobile is one of the main places illegal mahogany enters the United States. The owner of the lumberyard says that the New York-based Natural Resources Defense Council is trying to make an example of his small business to further what he says is its agenda of ultimately banning all mahogany imports. The company is one of four that the Defense Council, commonly called NRDC, has said it will take to court. Another is in Gulf Shores, and two more are in Pennsylvania. Together, those companies handle more than half of the mahogany imported from Peru, according to export documents obtained by NRDC. High demand for reddish-brown mahogany, marketed as durable and rich in color, has led to its classification as an endangered species. In the last decade, it has become one of the world's most heavily regulated woods, governed by the same international laws that protect sea turtles and elephants. While trading in mahogany is much more complex than more common woods, such as pine, it comes with high rewards. Mahogany is the diamond of the timber industry -- one log is worth twice the price of cedar, the next most valuable wood in Peru, according to Diego Shoobridge, a researcher in Lima, Peru, who works with Duke University's Center for Tropical Conservation. The United States imports about $56 million worth of mahogany each year, according to estimates provided on a Web site maintained by the World Wildlife Fund, though the wood remains a relatively small portion of the country's timber trade. One tree can produce more than $100,000 worth of furniture, Environmental News Service reported in 2003. The NRDC has crusaded against what it calls illegal imports before, but has only recently decided to take the issue to court. The Evergreen company involved in the battle, Bozovich Timber Products Inc., received a letter dated March 10 stating NRDC's intent to sue. Wood stacks from around the globe -- cumaru, tropical walnut, Spanish cedar -- are scattered at Bozovich's lumberyard. Most piles bear stenciled letters naming the port of entry, usually "Mobile" or "New Orleans." "With New Orleans out of commission, nearly all of it comes through Mobile," said Len Price, Bozovich's president in Evergreen. "We've been trying to diversify away from mahogany because there's such an uproar about it, justified or not." The Port of Mobile is not named as a prospective defendant, though NRDC contends that 40 percent of the illegal mahogany that enters the United States comes through south Alabama. The port handled 446,000 tons of lumber in fiscal 2005, but port officials say they do not track specific wood types. They also say that the lumber is cleared for entry by the federal government. Alabama State Port Authority Chairman Tim Parker said that he is unaware of any illegal goods coming through Mobile's port. "Mobile has been a major part of the import and export of lumber and forest products for a long time," Parker said. "As far as something that's environmentally incompatible, that's news to me." The wood trail The yard in Evergreen is a mid-point in the life cycle of harvested mahogany trees, which start as saplings in the Amazon jungle and 80 years later end up as a guitar or grandma's dining room table. Genuine "bigleaf" mahogany, Swietenia macrophylla, is found only in the tropical Americas. It is logged in the Amazon jungle and floated to sawmills via rivers. Endangered species, including mahogany, are protected by the policies of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, or CITES, a coalition of 169 countries including the United States and Peru. CITES requires permits to trade in mahogany. But, illegal logging is so hard to control that Brazil, once the largest exporter, put a moratorium on its mahogany trade. With formerly dominant Brazil mostly out of the picture, Peru's mahogany exports have soared over the past five years, along with the value of mahogany. Much of the wood ends up in the United States, the world's largest importer, according to CITES. Although the mahogany that enters the United States bears stamps indicating that it has been harvested with the proper permits, NRDC officials allege that a complex network of forged documents and widespread corruption in Peru makes all mahogany from that country suspect. "The biggest problem is that loggers are entering areas where it's illegal to log, and they're coming into confrontation with isolated indigenous people and in many cases, killing them," said Ari Hershowitz, director of NRDC's biogems product for Latin America. The Peruvian government holds open bidding processes in which timber companies seek permits to cut mahogany. The process works in the same way that the U.S. government seeks bids for harvesting timber in national forests, according to John Terborgh, a Harvard-educated professor of environmental science at Duke University. Companies in Peru are given permission to cut mahogany in specified areas, called concessions. The logs are then floated on tributaries that lead to progressively larger rivers, eventually reaching a sawmill, where it is difficult to tell the difference between a legal log and a forbidden one. There, the logs are cut and prepared for export, Terborgh said. "There are documents that accompany these logs from fairly early, but not the source," Terborgh said. "Those documents are then the basis of the approval of an export permit." Some experts say that all too often, the documents that make the mahogany legal for export represent false information. "Wherever I go to visit the protected areas, we make an assessment of what's going on around," Shoobridge said, speaking from Lima. "When I find all of these cases of illegal logging, we take notice of this, and we try to pronounce this to the authorities. They say they care, but the chain of corruption is so strong." The Peruvian government and its enforcement arm, Instituto Nacional de Recursos Naturales, have acknowledged that illegal cutting occurs and say that they are fighting the problem. The CITES secretariat in Switzerland helps countries such as Peru address enforcement issues, according to Marceil Yeater, the chief of the CITES Legal Affairs and Trade Policy Unit. "We are now in the process of talking to the governments involved," she said of the pending lawsuit, speaking from Geneva last week. Documentation requirements are designed to make the trade process more visible and traceable. CITES has found that documents have been forged before, Yeater said, though she could not comment specifically on whether documents were forged in Peru. "There's a lot of global attention being paid to illegal trade in timber generally," Yeater said. "The UN as a whole has been looking at this issue." Back to Alabama In 2000, Peru's largest mahogany exporter, the Bozovich Group, formed a joint venture with family owned South American Lumber Imports Inc. in Evergreen, and in February, Price changed his company's name to Bozovich. Price took over the business from his father and operates it from a one-story home-turned-office in a middle-class neighborhood in Evergreen, about 100 miles north of the city of Mobile. A sandy-colored, retired greyhound named Jennifer Ann follows Price around the property wherever he goes. The company, with 15 employees, imports, kiln dries and grades lumber before shipping it to various customers, including furniture and deck makers. Mahogany makes up about a third of the inventory on his property, he said. "I'm being sued even though no wrongdoing on my part is being mentioned," said Price, an Alabama native who is fluent in Spanish. "The reaction is, 'What have I done?'" Bozovich's Peruvian operations buy lumber from the sawmills and do not hold concessions to log, he said. Illegal logging hurts his company's future, he said. If the legitimate mahogany trade is shut down, the rain forest will be left at "the mercy of the chain saw massacre artists." "There are some illegitimate operators out there," Price said. "We want them out of business more than anybody else." Price's company was peripherally involved in a scandal during the 1990s that cost a University of Mobile president his job. Then-President Michael Magnoli and then-Vice President Roger Gonzalez, who ran the school's Latin American Branch Campus in Nicaragua, formed a venture that was to import mahogany through South American Lumber Imports Inc. But the venture fell through; a contractor in Nicaragua failed to deliver the wood, saying he had not received money promised to him by the UM officials. Gonzalez was ousted as head of the Nicaraguan campus, which was later sold. Magnoli, who was no longer president, pleaded guilty in 1999 to felony federal income tax fraud in connection with other dealings involving Gonzalez and the university's Nicaraguan campus. The second Alabama company named in NRDC's warning letter is Maderera Gutierrez y Hernandez Ltda., meaning Lumber Gutierrez and Hernandez. It has a Gulf Shores post office box address and imports lumber from Peru, according to export documents. The Alabama secretary of state's corporations division has no record of that company, according to public information specialist Tamara Cofield. Nor does the company have a Gulf Shores business license, according to the city's revenue division. It is illegal to do business in the city without a license, but not illegal to use a Gulf Shores mailing address so long as no business is conducted there, according to the city. A representative of another lumber importer that deals in mahogany, Newman Lumber Co., in Gulfport, Miss., said his company is connected to the Gulf Shores importer named by NRDC. But, Doug Newman, vice president of Newman Lumber, wouldn't say if the connection was through business dealings or if the companies are sister entities. "I didn't know anything about this lawsuit until your voice mail," Newman told the Press-Register. "We have a relationship with that company. With the lawsuit pending, I would rather not get into that." Roianne Gutierrez is listed as a director and treasurer of Newman Lumber with the Mississippi secretary of state. A Roana Gutierrez is listed as a buying manager on the Gulf Shores company's export documents. A telephone listing was found for Roianne Gutierrez, but she could not be reached for comment. In 2000, a sawmill affiliated with Newman Lumber was seized and shut down by Peruvian soldiers, according to Associated Press reports. The Peruvian government accused Newman Lumber of illegally extracting mahogany worth up to $40 million. The company denied the charge, saying that it thought the logging was legal. While he would not comment on the pending lawsuit, Newman did have some remarks last week about the lumber industry's dealings with groups such as NRDC. "The environmental movement has repeatedly used misinformation to attack all activity in the tropical forest," Newman said. "They have resources that vastly, vastly outnumber the resources of our industry combined." NRDC maintains that the companies are intentionally befuddling the issue by disguising how the lumber is imported, Hershowitz said. "These companies can't show where their wood is coming from," Hershowitz said. "The native people on the ground are feeling the impact, and we'd like these Alabama companies to go see what destruction is being caused before they say there's no problem. Our view is if you profit from illegal goods and harm indigenous people, that's a problem." The other two companies named in NRDC's notice letter are King of Prussia, Pa.-based T. Baird International Corp., and Hanover, Pa.-based TBM Hardwoods Inc., which is listed by the Pennsylvania Department of State as being affiliated with T. Baird McIlvain Co. Legal or not? Two Peruvian indigenous groups, the Native Federation of Madre de Dios and Racimos de Ungurahui, contend that loggers in their country are cutting at a pace that could make mahogany commercially extinct in less than a decade. "The reason we are bringing the case is because these groups in Peru have asked to sue," Hershowitz said. Under law, the recipients of the NRDC's notice letter have 60 days to "fix the violations that we're alleging," to avoid being sued, he said. But Price said that he cannot change what he is doing because he's not doing anything wrong. "We are given 60 days to comply with the law. We are complying with it now, according to the people who actually administer the law," Price said. Julie Brining, an owner of Mobile-based John M. Brining Co., is a customs broker for Bozovich. "If you bring mahogany into the United States, you can rest assured that it is being very well governed as far as where it's coming from. The paperwork must be letter perfect, because if it's not, it will not enter U.S. commerce, it will be seized or re-exported," she said. "They are very clear on the regulations. You play by their rules or you don't play at all." She said that her client, Bozovich, is following the law. "I've known Len Price for more years than either one of us would care to admit," Brining said. "He's just a Southern gentleman. He would never do anything against the rules under any circumstances." Duke University's Terborgh said that while the process may appear clean cut, "under the surface it stinks to high heaven." "I've been out there on the ground where it's all happening," Terborgh said. "I've seen it." Price said that the system has holes, but "if everybody were honest, it would work perfectly." "You are going to find some operators that are going to find a way around the system, but that doesn't mean that all of the sawmill operators are crooks," he said. NRDC also charges that the U.S. government overlooks the illegal trading, and the organization has announced it intends to sue the Interior Department, the Department of Agriculture and Department of Homeland Security. "No one's being fooled as it comes in, that's why we're suing the U.S. government," Hershowitz said. "We're suing them for their failure to enforce the law." CITES is enforced in the United States via the Endangered Species Act by the U.S. Fish & Wildlife Service, and more recently, the Department of Homeland Security. In addition to the lumber importers, NRDC sent notice letters to Interior Secretary Gale Norton, Agriculture Secretary Mike Johanns and Homeland Security head Michael Chertoff. "It is a strange feeling seeing your name right below Michael Chertoff's," Price said. © 2006 The Mobile Register |