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Clear-Cutting Romania

Logging Threatens One of Europe's Last Virgin Forests

By Nils Klawitter
One of Europe's most beautiful forest areas is disappearing piece by piece in Romania's Carpathian Mountains. Some of the logging is illegal. The wood is then sold to make flooring or heating pellets that are sold in Germany and other countries.
It's not easy to fight for your cause with pepper spray in your mouth and eyes, but Gabriel Paun tried it anyway in front of the gate of a huge sawmill in the Romanian town of Sebes. On that day last winter, Paun had followed a truck loaded with lumber after the vehicle left the Retezat National Park, located in the heart of the Carpathian Mountains -- one of Europe's most beautiful forested regions -- and in the heart of a threatened world.
Paun was wearing a brown vest over a camouflage hoodie. He had a buzzed, military style haircut. Paun, an activist with the Romanian organization Agent Green, followed the truck to the sawmill. He had a suspicion and all he had to do was make one phone call to confirm it.
In Romania there is a hotline to check the origins of lumber transports. The system can use the license plate number to track each truckload of wood. Paun dialed the number and an employee at the Environment Ministry's wood tracking section picked up the phone. Her answer left no doubt: She said the lumber was "illegal." Paun followed the truck to the entrance of the sawmill, which belongs to Austria's Schweighofer Group, and informed security guards working for the company. But instead of taking the wood out of circulation, they put Paun out of commission: first with blows, then with pepper spray, causing Paun to fall to the ground. Everything was captured on shaky video images and uploaded to YouTube.
The film snippet is a hit in Romania, where it has become a symbol for the Romanians' concern for their forests -- and for their powerlessness to stop it from disappearing. At stake here is one of the last virgin forests in Europe. These are regions roamed by brown bears, wolves and lynxes, and many of these areas have remained untouched for centuries.
The Carpathian Arc contains the largest contiguous forested region in Central Europe. Roughly one-third of the area of Romania -- 6.6 million hectares (16.3 million acres) is forest, but Romanians are seeing it hemorrhage on a daily basis. A 2012 study by Greenpeace revealed that the equivalent of three football fields filled with trees is disappearing every hour. The Romanian government estimates that roughly 4 million cubic meters (141 million cubic feet) of lumber is illegally removed by forest workers every year -- enough to fill one and a half Cheops pyramids.
A Dramatic Increase in Deforestation
According to the Greenpeace study, the deforestation dramatically increased between 2000 and 2011. It was the period when Austrian wood processing companies like Egger, Kronospan and Schweighofer moved into Romania and quickly dominated the market. But nobody grew as large as Schweighofer. The company reported sales of €465 million ($519 million) in 2013, generating impressive profits of €96.5 million.
The four sawmills operated by Schweighofer are the gates to the clear-cutting. This is the end of the road for most of the lumber trucks from the Carpathians. Here the logs are peeled, milled and shredded. Much of this lumber ends up as wood pellets, parquet and laminate flooring in German and Austrian DIY stores.
Group CEO Gerald Schweighofer had just sold his family's company to a Finnish corporation when he arrived in Bucharest in 2002 to relaunch the business. He couldn't have picked a better time. One year later, the government under Romanian Prime Minister Adrian Nastase auctioned off a large proportion of the lumber in national forests on the basis of 10-year contracts -- but it was primarily large companies like Schweighofer that succeeded in making purchases. During the auctions in Romania, Schweighofer was always "served first," says Vasile Coman, who heads a medium-sized lumber company in the north of the country. "They always had priority because of their contract and selected the best wood at the lowest price." Then the general auction would begin and Schweighofer would "hit again".
Driving Out the Competition
Coman says the Austrians dominated the industry and the prices. He contends that many local companies could no longer compete. Thousands of Romanian custom furniture makers -- once one of the country's main industries -- have gone bankrupt in recent years. The Schweighofer company speaks of "transparent" processes and prices that are adapted to the market price based on "indexation formulas."
Indexation formulas? Coman had always wondered why the price of wood in Romania consistently rose while it was declining worldwide. A few weeks ago, he had to lay off 160 workers.
Alexander von Bismarck has also had his fair share of experiences with Schweighofer. Bismarck heads the Environmental Investigation Agency (EIA) in Washington, DC, which has specialized in undercover environmental investigations. In 2014, Bismarck contacted Schweighofer under an assumed name. He claimed to be a lumber supplier and filmed the exchange with a hidden camera. This video material has been made available to SPIEGEL, and the Romanian network Antenna 3 broadcast a number of scenes from the film last week.
The video shows Karl Schmid, Schweighofer's manager in Romania. He casually boasts in the film about his company's dominance of the sector. Roughly 7 million cubic meters of coniferous wood is cut every year, he says, adding that, "If we run in full, we need 4.5 million for ourselves." Schmid gently toys with a plastic bottle in his hands and says: "There's no place for others."
Many Romanians feel as though they were being crushed, including residents of the town of Sebes, which is home to the sawmill where activist Gabriel Paun was pepper-sprayed at the gate. Now protests are staged there against Schweighofer and there is talk of illegal logging. According to the Romanian Court of Auditors, some 400,000 hectares, or roughly 6 percent of the entire forested area in the country, has been illegally logged since the collapse of the Eastern Bloc. The agency estimates the resulting damages at over €5 billion. The question is how much of this illegal lumber has been purchased by Schweighofer.
So far, nothing has been proved. The wood tracker hotline number, which was introduced by Social Democrat Doina Pana -- who served as minister for water, forests and fisheries until March this year -- has remained a toothless instrument: It frightens no one because no one conducts investigations. Out of 7,000 calls made during the first six months, roughly 2,000 turned out to be illegal transports. Nevertheless, the authorities only took action in one case.
'Audacious Consumer Deception'
Even the wood from the national park that activist Paun reported turned out later to be officially legal, although the truck trailer was not registered in the system. Paun remains unconvinced. "The papers were not in order here and dubious companies clear-cut trees in the national park, although Schweighofer claims on his website that he accepts no wood from such sources," he says. "This audacious consumer deception has so far been ignored."
Schweighofer is surrounded by an "illegal swamp-culture that apparently only Schweighofer doesn't notice," says Bogdan Tudor, a lawyer who is president of the Nostra Silva ("our forest") environmental organization and has exposed a number of cases of fraud in the lumber industry. In one case, the Rumanian anti-corruption agency DNA is also investigating. In this instance, the authorities are looking into forged documents connected with a community forest in the Carpathian region of Valcea that was nationalized under the communists and transferred back to the original owners after the old regime crumbled -- "a typical example of how people get into this business," says Tudor. It is just one of hundreds of such examples in Romania.
Detectives investigating some of these ownership tricks have even commissioned forensic reports, which indicate that a group of amateur counterfeiters has been at work here. Maps have been brazenly manipulated and, in some cases, pens were used that didn't even exist at the time when the originals were made.
In Valcea it had to do with the planned purchase of the forests on three mountains by the Schweighofer subsidiary Cascade Empire. Schweighofer claims that he has no information on forged documents or forensic reports. Still, the company has no explanation for why one of the Cascade managers spoke with the alleged counterfeiters about the sites and delivery conditions months before the dubious transfer of ownership.
The 'Driving Force' Behind Clear-Cutting?
This particular case involved the then-head of the local office of Romsilva, the country's government forestry agency. This same official later went on to manage a Natura 2000 area, which is part of a network of nature conservation areas in the European Union. Last week, he was arrested on suspicion of bribery. He also served Schweighofer in another case, which reveals just how much pressure the Austrians exerted. The investigation by the public prosecutor's office showed that 22,000 cubic meters of wood were to be delivered to Schweighofer within just six months. It turned out that some of the wood that went to the Austrians was illegal. Schweighofer declines to directly comment on this, but the company insists that it adheres to all existing legislation. What's more, the company says that it has filed charges against the man for "failure to make deliveries."
Tudor, the lawyer, points out that it always takes two to commit corruption. "The Schweighofer lumber slaughters were the catalyst for the illegal deforestation of the past 12 years," he says. Despite diverse investigations into the Austrian's business dealings, the lawyer states, it has still never been proven that Schweighofer broke the law.
But that could soon change. In his film, Bismarck can be seen meeting with managers of the company who repeatedly assured him that it would be "no problem" if he supplied more lumber than his permits allowed. "It quickly became clear that they had no problems with illegal lumber," says Bismarck, who adds that "they even offered bonuses." According to Bismarck, Schweighofer manager Karl Schmid explained the secret of their success as follows: "Don't ask how I managed to do it, but I managed to do it." Bismarck says that Schweighofer is "the driving force behind the clear-cutting."
In response to this allegation, Schweighofer says the prices "are staggered according to quantity," but that this has nothing to do with buying more than what is legally allowed. Furthermore, the company says that the filmed excerpt of the conversation is "taken completely out of context." But given that the context was always clear, this seems like nothing more than a standard line of defense.
As proof of its integrity, the company has forwarded an email from late April. It was written to a certain Ron Wilson, which was Bismarck's cover name, and explains that the "legality" of the wood had to be documented. What Schweighofer doesn't say is that at the time a reporter from Antenna 3 had already confronted the company with the explosive revelations in the film. Schweighofer apparently realized what was in store for the company. "In previous e-mails, in which 'Ron Wilson' repeatedly talked about illegal deliveries, legality wasn't an issue," says Bismarck.
Romanian Politicians Respond
Now, the Austrians' monopolizing power has started to unnerve Romanian politicians. Last year, former minister Doina Pana introduced a lumbering bill that is currently the subject of heated debate. Schweighofer is particularly unhappy with a clause that stipulates that a group of companies is not allowed to process more than 30 percent of the volume from a single species of tree.
The Austrians have used all their lobbying muscle to fight the proposed legislation. In a letter to Prime Minister Victor Ponta, Gerald Schweighofer even threatened with lawsuits and mass layoffs. The company CEO maintains that the legislation would violate EU laws and the free trade of goods. While Ponta's Social Democrats have remained relatively unimpressed, the new Romanian conservative president, Klaus Johannis, is alarmed and has written on his Facebook page that, in his opinion, the planned regulations violate the principles of the country's own constitution.
Former minister Pana finds such notions laughable. She always carries the text of the Romanian Constitution in her handbag and pulls out the dog-eared page with Article 135, which she has evidently looked up many times before. The text says that the state is obliged to protect national resources. It may be that Schweighofer has created 3,150 jobs in Romania, as he claims in the letter to Ponta, "but we have lost 50,000 jobs in small and medium-sized companies in the lumber industry," she says.
'Investor of the Year'
None of this appears to have damaged Schweighofer's reputation -- at least not for the time being. Only a few months ago, the company was honored as "investor of the year" in Romania. The lumber from forests harvested by the dubious subsidiary Cascade even bears the coveted Forest Stewardship Council (FSC) certification of sustainability, although an FSC spokesman says that the organization intends to review this status.
Delivery lists that SPIEGEL has obtained reveal the full extent of the market that is supplied with Schweighofer products. The German company Classen, one of the world's largest manufacturers of laminate flooring and a supplier of DIY stores, features on the list along with Denk GmbH, which provides furnishings for executive offices and company headquarters. Classen denies purchasing wood from Romania and Denk has made no comment.
The supermarket chain Spar Österreich -- which recently received a helping hand from the World Wildlife Fund (WWF) in presenting itself as an environmentally conscious company, even though it sells wood briquettes from Romania -- praised Schweighofer's strict "tracking rules." A spokeswoman for the supermarket said last Tuesday that there was "no substance" to the allegations concerning Romania. One day later, she retracted the statement. "Of course," she said, her company would "immediately look into the matter again."
Schweighofer's largest customers include Austrian manufacturers of wood pellets, who also supply Germany. Their monthly purchases from Schweighofer amount to over €1 million.
Meanwhile, activist Alexander von Bismarck says he simply cannot get it into his head that one of the last European virgin forests is being illegally cut down so it can be sold to heat homes in Austria.



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