Questions and answers about Holzindustrie Schweighofer
How does Holzindustrie Schweighofer advocate sustainable forestry in Romania?
It is our objective to do everything we can to fight illegal logging. We have implemented a comprehensive action plan to eradicate the risk of receiving illegally harvested wood in our supply chain. Our precautionary timber purchasing measures exceed all legal requirements and are among the most extensive in Romania. The core measure is the publicly accessible Timflow GPS system, which all our suppliers are equipped with and which monitors the transport route of every truck from place of loading to our mill gate. In addition, every individual delivery is of course thoroughly screened at our gates in accordance with all legal requirements. We strictly reject all deliveries of unclear origin. Even supplies where "merely" administrative errors are suspected, are not brought into the production lines until the matter is entirely cleared. These loads are put aside in marked areas in our warehouses and the situation is investigated. Where irregularities are found, we immediately notify the authorities and hand over the load. This security system is already delivering results. Between March 2015 and March 2017 Holzindustrie Schweighofer's Romanian mills were checked eight times for compliance with the European Timber Regulation (EUTR), the legal framework which ensures that only legally harvested timber enters the European Union’s market. All eight EUTR checks took place without objections.
According to media reports, however, Holzindustrie Schweighofer has received large quantities of illegal wood. How does that add up?
The majority of media reports refer to legally harvested wood, which due to bureaucratic errors during the progression through the supply chain has become illegally traded wood. Such bureaucratic errors also include mistakes in copying down freight document numbers or incorrectly typed licence plates. We are working to minimize such errors.
We take input, including critical reports from NGOs seriously. All allegations are analysed and appropriate measures are taken where necessary. Holzindustrie Schweighofer makes its investigations of such allegations public.
Holzindustrie Schweighofer has a zero tolerance policy as far as forest destruction, illegal deforestation and primeval wood are concerned. To ensure a sustainable and transparent supply chain, we have implemented the most comprehensive supply chain controls in Romania and have launched the GPS-based system Timflow to monitor saw log deliveries. In addition, we exclude all suppliers who do not respect our supply chain rules. Moreover, we support sustainability initiatives, like the afforestation of deforested areas.
Which measures does Holzindustrie Schweighofer take specifically to fight illegal logging?
Fighting illegal logging is basically the task of the government and the corresponding executive bodies. Romania has already established a very strict system here. A private company is not supposed to and not allowed to undertake any governmental tasks. But: as a conscientious company in the timber industry, we actively support the fight against illegal logging on several levels, despite the fact that Holzindustrie Schweighofer does not harvest any trees itself. Sustainable forestry is of great concern to our company.
We require our suppliers to adhere to all legal requirements contractually and to prove the legal origin of the wood they supply to us.
For each new supplier, we also check the correctness of the information for each new supplier directly on site.
We provide transparent information so that all timber delivered to our company can be traced Deliveries to our plants can be viewed by everyone at www.timflow.com.
We refuse to accept suspicious deliveries where, complete and correct official documents are missing and also notify the competent authorities in these cases so that they can investigate the irregularities and penalise them. In 2016, Holzindustrie Schweighofer refused acceptance of more than 60 wood supplies with incomplete documents and notified the authorities.
How do you deal with criticism from NGOs?
We are committed to open dialogue with environmental protection organisations. We want to maintain closer contact with those who criticise the wood processing industry, clear up misunderstandings and work together on improvements where required. We invite independent environmental protection organisations committed to preserving forests and sustainable forestry to participate in an active dialogue. We are convinced that the NGOs' expertise can help us to further improve our systems. Modern and sustainable forestry is without question in the interest of the NGOs, our company's and the general public.
FSC® has dissociated itsself from Holzindustrie Schweighofer – is this not proof of forest destruction?
On the contrary, FSC® has not found any evidence during its one-year investigation that Holzindustrie Schweighofer participated in the destruction of virgin forests. There were however reports about "irregularities" in the supply chain. As a result, FSC® first decided at the end of 2016 to put Holzindustrie Schweighofer on probation. We acknowledged some short comings, especially that we were relying too much on documentation control and that we had neglected appropriate communication with our stakeholders.
Only a few months later, in February 2017, FSC® then dissociated itsself from Holzindustrie Schweighofer. The trigger for this was a complaint regarding possible violations of log measurement standards. The result of this investigation is currently (end of November 2017) still outstanding.
A roadmap process to end the disassociation was already started with FSC®. The previously mentioned action plan is one of the pre-conditions which must be implemented by Holzindustrie Schweighofer.
Has Holzindustrie Schweighofer made mistakes in the past?
We have acknowledged publically that there were irregularities and reported illegalities in the Romanian supply chain beyond our knowledge as well as logging operations infringing FSC policy by our Romanian forest land enterprise, which had acquired forest in good faith that was reported to be illegally retroceded.
Although Holzindustrie Schweighofer had applied due care, we must be clear about the fact that we are operating in a high-risk environment, which is why a significantly more robust Due Diligence System is required to prevent the excessive dependence on formal checks of suppliers. In addition, we failed to actively involve and inform stakeholders.
However, we have recognised these weaknesses and reacted upon them. With our modern GPS-tracking system Timflow we are amongst the pioneers of a strict wood supply chain. And some NGOs, who had criticised Holzindustrie Schweighofer loudly in the past, are now working with us to protect Romanian virgin forests.
What is Holzindustrie Schweighofer’s opinion on harvesting in national parks?
We are the only company in the Romanian wood-processing industry which does not accept any wood from national parks. In principle, logging in certain areas (buffer zones) of national parks is legally allowed when adhering to special guidelines. Holzindustrie Schweighofer has however voluntarily committed to refuse acceptance of wood from national parks. We are of the opinion that these areas are of important value for the preservation of thousands of species.
Does Holzindustrie Schweighofer process wood form virgin forests?
Romania protects both virgin and quasi-virgin forests with strict laws, and rightly so. Romania's untouched forests are a natural treasure. Holzindustrie Schweighofer is committed to protecting them unconditionally. Romanian authorities do not issue any harvesting permits for virgin and quasi-virgin forests in any case. But only in combination with our Timflow-monitored supply chain can we guarantee that no trucks with wood from virgin forests actually deliver logs to us. Apart from Holzindustrie Schweighofer, no other timber company in Romania provides this level of transparency.
In addition, our own forest areas are being monitored by NGOs to ensure that all valuable forests are identified and protected accordingly.
What happens to the wood waste in the sawmills?
Our raw material is too precious to be wasted. The latest technology allows us to use 100% of every log. Our residual wood from sawmilling (wood chips, shavings and sawdust) is used for the production of pellets and briquettes. We therefore s guarantee responsible wood processing and sustainable production of biomass products. Thanks to our positive energy balance, we are a net supplier of renewable energy.
What is Holzindustrie Schweighofer’s connection with the furniture industry?
Some of our high-quality products are occasionally also sold to furniture factories.
That apart, there are no overlaps, since we mainly use coniferous wood and the furniture industry predominantly processes hardwood.
What is Holzindustrie Schweighofer's ranking in the Romanian wood market?
We purchase about 7% of the wood available in the Romanian market. Holzindustrie Schweighofer directly employs about 3,100 people in its Romanian plants and offices. In addition, our activities in Romania have created more than 10,000 jobs in related industries. These are primarily located in economically disadvantaged areas like Comănești, Siret or Reci.
Romania's wood processing industry is currently undergoing modernisation and restructuring, as has already happenede in other European countries. This is a reaction to technological and economic development. There are numerous competitors in the Romanian market and there is active competition, which is advantageous both for suppliers and end customers. The developmentof companies in the sector adds value which is reflected in jobs, professional opportunities, taxes and levies, as well as support for the economy and society as a whole.
What is Holzindustrie Schweighofer's stand on the new forestry legislation (purchase limit of 30% of one wood species), and what effect will this regulation have on the company? It is our company policy that we do not comment on political decisions. As a company, we respect all laws and regulations applicable to us. We are convinced that restricting the free movement of goods goes against the principles promoted by the European Union and consumer interests, and puts jobs at risk. Even the Romanian competition authority shares this view.
Holzindustrie Schweighofer is one of the largest wood processing companies in Romania. What role do you play in the afforestation of forests?
Holzindustrie Schweighofer manages a comparatively small area of about 14,000 ha in different regions and areas of Romania. Forestry based on the natural regeneration of the forest is already our paradigm - a properly managed forest does not need afforestation
Excessive deforestation and forest destruction nonetheless occurred in Romania in the past, which destroyed the forest's ability to regenerate and also caused soil erosion. Holzindustrie Schweighofer is therefore supporting the multi-year afforestation project “Tomorrow’s Forest”, which was launched in September 2017, with €1 million. Until the year 2024, around 1 million trees will be planted on degraded forest land.
Why are you active in Romania and not in Austria?
We are active in Romania, Germany and Austria. We have been present in Romania since 2002, where now operate three modern sawmills and two panel factories, securing about 3,100 high-quality jobs. Since 2015, we have also had a sawmill in Kodersdorf, Germany, which enabled us to extend our production capacity into the border triangle of Germany, Poland and the Czech Republic. Our headquarters are based in Vienna, Austria.
Is corruption not a big problem in Romania?
Transparency is the best measure against corruption, and as far as forest transparency is concerned, Romania is leading the way. The country has the most extensive and intricate forest legislation in Europe. Every harvesting license and consignment note can be accessed on an online map (www.inspectorulpadurii.ro). Every individual wood consignment must be registered on a government server, and this registration is checked at the time of receipt by Holzindustrie Schweighofer. We are the only company in Romania that also checks the quantity of wood on the truck by means of calibrated laser scanners and checks whether the result matches the quantity declared. This control is important since Holzindustrie Schweighofer does not harvest the wood itself, but nonetheless needs assurance about its legal origin.
The Romanian state-owned forests (which cover at least half of the forest) offer documents of all planned harvesting measures for download. About half of the Romanian forest is FSC® certified – significantly more than in Germany (9%).
What happens to the profits earned in Romania?
For more than ten years, all company profits from Romania have been directly invested in our Romanian plants and workplaces on site. Several very modern company locations and about 3,100 jobs were created, many of them in economically diadvantaged regions. Moreover, we continue to invest in training and education on site. We have shown social commitment for many years with different activities and we support numerous social and charitable projects in education, social services and health care. Since 2002, the company has paid taxes in Romania in the amount of €100 million.
Which wood types does Holzindustrie Schweighofer process in Romania?
We exclusively buy coniferous wood from controlled sources. In this regard, all our suppliers must be able to prove the legal origin of the wood.
How much wood does Holzindustrie Schweighofer process annually in Romania?
We process about 2.6 million cubic metres of wood. Romania has an overall capacity of 80 million cubic metres of wood, of which we use 1.2 million. According to Eurostat, every year about 50% of the annual growth is officially harvested in Romania's forests. This means that the stock of wood is increasing continuously.
If you have any other questions, please contact:
Michael Proschek-Hauptmann Head of Compliance and Sustainability