MTIB-MTCC’s response to Greenpeace International’s report ”Missing Links”

Following the report entitled ‘Missing Links’ by Greenpeace International, a team from the Enforcement Unit of the Malaysian Timber Industry Board (MTIB) conducted investigations on 3 and 6 June 2005, as well as on 19 and 25 July 2005, on the allegation of import of Indonesian timber at Sritama Jetty and the delivery of this imported timber to Victory Enterprise Sdn. Bhd. (VESB).

Sritama Jetty

The investigation team visited Sritama Jetty on 6 June and 19 July 2005, during which interviews were held with Sritama Industries (M) Sdn. Bhd. (Sritama), which manages Sritama Jetty, as well as with contract workers at Sritama Jetty. The team also met the Royal Customs Department as well as traders and importers in Port Klang.

The key findings of the investigations on Sritama are as follows:

1) There was no importation of timber at Sritama Jetty on 6, 7 and 10 December 2004, the dates mentioned in the Greenpeace report;

2) Sritama has not handled any imported timber since July 2004. The last consignment of timber which was handled by Sritama Jetty was in June 2004, comprising a consignment of Large Scantlings and Squares (sawn timber of cross sectional area exceeding 60 square inches) which was subsequently found to be illegally imported and was confiscated by the Royal Customs Department, following an investigation by MTIB. The timber was auctioned in January 2005;

3) From 1 to 31 December 2004, no vessels bearing the names KM Samudra or KM Kurniaw called at Sritama Jetty;

4) Records at the Royal Customs Department also confirmed that there was no import of timber at Sritama Jetty for the period from 1 to 20 December 2004;

5) The traders and importers in Port Klang interviewed by MTIB also confirmed that there was no import of timber at Sritama Jetty from July 2004 until June 2005; and
Examination on the photograph of timber described in the report as ‘Unmarked timber
flitches at the Sritama Jetty No. 2’ has shown similarity with the Large Scantlings and
Squares confiscated by the Royal Customs Department in June 2004.

VESB

The investigation team visited VESB on 3 June 2005 and made another visit on 25 July 2005.

The key findings of the investigations on VESB are as follows:

1) Prior to 12 December 2004, VESB did not export any MTCC-certified products. From 12 December 2004 to 3 June 2005, VESB exported a total of 393 m3 of MTCC-certified sawn timber;

2) Neither VESB nor Minho Berhad, the parent company of VESB, has a business
relationship with Sritama;

3) VESB confirmed that it had purchased about 566 m3 of sawn timber from a local trader in October 2004. The sawn timber measures 4” to 6” by 7” to 10” by 12’ and was used for making stackers and pallets. Further enquiry with the local trader indicated that the sawn
timber may have been from Indonesia;

4) An inspection conducted on this sawn timber on 25 July 2005 found that it comprised the following species: Nyatoh (40%), Durian (29%), Kedondong (9%), Red Meranti (6%),
Balau (6%), Bintangor (3%) and others (Mempisang, Kekatong, Yellow Meranti, Kempas, Keruing, Simpoh, Terap, Pulai and Mata Ulat); and

5) The quality of this sawn timber is very low and they contain defects such as surface checks, splits, bowing, boxed-heart, stain and fungi.

B. Results of Surveillance Visit on VESB

In its earlier Press Release dated 20 May 2005 regarding the above matter, the Malaysian Timber Certification Council (MTCC) informed that it would arrange for a surveillance visit to be conducted on VESB in which the independent assessor would also take into account the contents of the Greenpeace report related to VESB.The surveillance visit on VESB was conducted by two auditors from the independent assessor, Global Forestry Services (Malaysia) Sdn. Bhd. [GFS], on 8 June 2005.

The key findings of the surveillance visit on VESB are as follows:

1) The surveillance visit showed that VESB has adequately implemented and maintained the system for purchasing, receiving, processing of MTCC-certified raw materials and the selling of MTCC-certified products as per the Requirements and Assessment Procedures for Chain-of-Custody Certification (RAP/COC) under the MTCC scheme. Hence GFS has recommended that the Certificate for Chain-of-Custody issued to VESB should be maintained;

2) The investigations showed that from 21 October 2004 until 8 June 2005, VESB exported about 592 m3 of MTCC-certified sawn timber which can be accounted for by purchases which VESB made from three MTCC-certified sawmills and the existing stocks found in the premises of VESB. The certified sawn timber purchased and exported was of Dark Red Meranti species [Seraya, Nemesu and Dark Uniform Colour (DUC)]; and

3) As stated in the above-mentioned MTIB report, VESB did purchase some sawn timber from local trader in October 2004 comprising species such as Nyatoh, Durian, Kedondong, Red Meranti, Balau, Bintangor and others (Mempisang, Kekatong, Yellow Meranti, Kempas, Keruing, Simpoh, Terap, Pulai and Mata Ulat). It should be noted that only 6% of the sawn timber is of Red Meranti species and the quality of these timbers was not similar to the MTCC-certified timber sold by VESB. In addition, they were of different lengths and cross-sectional areas and were purchased by VESB to make stackers and pallets.To address the concerns raised by Greenpeace International, GFS in its surveillance visit to VESB has checked the relevant records and procedures for receipt, kiln-drying and re-bundling, as well as the quality of the timber sold, and concluded that there was no possibility for the sawn timber to be mixed with the MTCC-certified timber sold by VESB.