13 Sep 2011

GIBSON AND THE LACEY ACT – A GAME CHANGER IN THE MUSIC INDUSTRY

Musical instrument manufacturers generally do not ask detailed questions about the conditions under which the wood they buy has been harvested, processed and transported.

In the absence of any legislation forcing such thinking, voluntary ethics have been conspicuous by their absence.

The Lacey Act, quite simply, is a game changer.

Now US manufacturers that operate opaque, third-party brokered supply chains risk seeing armed Federal agents seizing wood from their manufacturing plants.

Similar legislation will be introduced in EU countries in 2013, although it’s hard to envisage armed European agents enforcing the new ‘due diligence’ regulations.

The solution for manufacturers is simple: invest in and understand the supply chain for the product that is fundamental to your business.

The only way to ensure legality is to demand full traceability and transparency at all levels of the supply chain, a process that engenders faith that what you’re buying is what is claims to be.

FSC-certification is the first step: not FSC Controlled Wood which is merely a risk assessment in the country of origin, but fully transparent FSC-certification with its third-party verified assurances of environmental, social and economic sustainability.

However, FSC-certification on its own is not enough. Like any system, FSC-certification can be abused and as the Gibson case has shown there are legal nuances in countries of origin that may not be picked up under FSC.

So whilst demanding FSC-certified wood as standard, manufacturers need to develop close relationships with their wood suppliers, working together to develop faith that everyone is playing by the new rules.

Of course all this means more time and money, but the fact is that the cost of wood is a tiny proportion of the overall cost of an instrument such as Gibson guitar. The value is added in the workshop as the instrument takes shape.

A small price premium to guarantee legal and ethical wood is surely a small price for manufacturers to pay for peace of mind that the Feds won’t be knocking on their door?

Background on Gibson guitars and the Lacey Act

1. On 24 August 2011, Gibson guitars’ US premises were raided by the US Fish and Wildlife Service as part of an investigation into alleged breaches of the Lacey Act, a law requiring that all wood products imported into the USA come from legal sources.

2. The raid concerned Indian ebony and rosewood supplied under an FSC Controlled Wood certificate held by an Indian wood supplier, Atheena, Whilst the export of such wood from India is legal under certain circumstances, mistakes seem to have been made with the paperwork prepared by brokers, meaning that the wood was incorrectly labelled and this led to the seizure of wood from Gibson’s premises.

3. In a statement following the raid, Gibson said: “The wood the Government seized on August 24 is from a Forest Stewardship Council certified supplier and is FSC Controlled, meaning that the wood complies with the standards of the Forest Stewardship Council”. Gibson’s statement was misleading as the wood itself was not actually FSC-certified. The result was widespread misinterpretation by the press with numerous articles falsely claiming that the wood in question was FSC-certified.

4. FSC Controlled Wood entails a risk assessment of the source of supply without any independent verification or tracking to ensure compliance. In contrast, FSC-certified wood provides a fully transparent chain of custody, tracing wood back to its forest source with the added assurance of independent, third party verification to ensure compliance.

5. Following widespread misreporting, FSC-US subsequently issued its own statement: “While Gibson has shown important sector leadership by stimulating demand for FSC-certified wood, the federal investigation addresses the wood they use that is not FSC certified.  FSC-certification is a component of due care that companies can use, but unless 100% of the wood used is FSC certified, other mechanisms are required too. In this instance, it is the non-certified wood that is being questioned.”

6. Sound & Fair recognises Gibson’s genuine efforts to introduce sustainable practises in its supply chain. The company was after all one of the first music companies to become FSC-certified and the Gibson CEO was until recently a Board member of then Rainforest Alliance, a founding FSC partners. However, this case highlights the value for musical instrument manufacturers in aiming to source 100% pure, FSC-certified wood wherever possible from fully transparent supply chains.

7. In addition to originating from a traceable chain of custody, FSC-certified wood is independently verified as complying with the Forest Stewardship Council’s internationally recognised set of principles. These criteria provide buyers with an assurance of socially beneficial, environmentally appropriate and economically viable forestry management and manufacturers can promote their products with the FSC Logo.

8. FSC Controlled Wood offers no such assurances and wood sold in this way should never be misinterpreted as being in compliance with the strict ethical and legal standards required by FSC-certification.

9. Gibson is already under investigation in a separate Lacey Act case concerning the purchase of Madagascan rosewood. Wood was seized from Gibson’s USA premises in November 2009 and a prosecution under the Lacey Act is pending.

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