Holzindustrie Schweighofer fined RON 100,000 per year for volume overruns it reported to authorities

Holzindustrie Schweighofer received RON 100,000 in fines in the past year for volume overruns it reported to the Romanian authorities, company representatives said during a visit to the company’s factory in Radauti, northern Romania. The company is currently seeking to regain its FSC certification, and to this end has implemented a worth wood tracking system valued at EUR 1 million.

Holzindustrie Schweighofer, part of the Austrian timber giant Schweighofer Group, which in Romania operates three timber factories in Radauti, Sebes and Reci, and two factories that produce timber panels, was hit with fines totaling RON 100,000 in the past year for volume overruns. This occurred although it was the company itself that reported the situation to the Forest Guard, Holzindustrie Schweighofer general director Dan Banacu said. The quantity, 1,840 cubic meters of wood, representing 0.5 percent of the total volume of wood purchased by the company’s Radauti factory during the same period, was seized by the authorities, Banacu explained. According to company representatives, the legislation regulating the Romanian forestry and wood processing industry does not cover this type of situations, so the company was fined, as the overruns exceeded the 2-4 percent difference allowed by current legislation.

The company has in place its own high precision measurement system that often detects volume overruns. “Measurements made on site, in the forest, carried out in difficult weather conditions, in places that are difficult to access, are compared with measurements made by metrologically verified equipment, which functions in a protected environment. Given that, after reception, we find that the volume of the transport exceeds the provisions on the accompanying approval and the differences allowed, we set aside the volume difference, outside of our warehouse, and immediately notify the Forest Guard,” Holzindustrie Schweighofer purchase manager Vasile Varvaroi explains. The Forest Guard and representatives of the Ministry of Environment visit the premises of the Holzindustrie Schweighofer factories every six months, company representatives said.

The company is currently in talks with the Forest Stewardship Council (FSC) to regain its FSC certificate, which the organization withdrew at beginning of the year. Its measuring system is part of the set of measures the company designed and implemented in order to increase the transparency of timber sourcing in Romania, company representatives said. In February 2017, after a year-long investigation, the FSC withdrew the Schweighofer Group its certificate, and accused the company of sourcing illegal timber in Romania. After the FSC decision was announced, local DIY chains Hornbach, Brico Depot and Leroy Merlin either stopped or reduced the volume of purchases from Holzindustrie Schweighofer. Hornbach announced that, unless the company is able to obtain its FSC certificate, it will cut ties in 2018.

In response, the Holzindustrie Schweighofer implemented a series of measures, including its flagship wood tracking system, Timflow, after an EUR 1 million investment, in a bid to regain the FSC certificate. The company, which does not cut the timber but buys it from around Romanian and foreign providers, implemented its own tracking system and made it a rule for all its providers to install the GPS tracking system on their trucks by April 3. According to company representatives, the system allows for anyone who creates an account to gain access to information showing the exact route of any delivery, from the place the timber was loaded until the factory premises. Timflow is currently installed on 600 trucks.

According to its representatives, Holzindustrie Schweighofer removed 80 providers that did not follow the sustainability guidelines and the due diligence system of the company.

Moreover, the company introduced an EUR 2 bonus (RON 10) for every cubic meter of FSC certified timber it purchases from providers and made it its policy not to purchase timber from national parks, although according to current legislation, this is allowed in certain conditions.

A share of 60 percent of the timber processed by the company in Romania is sourced from EU countries, such as Austria, the Czech Republic and Slovakia as well as other European countries, namely Russia, Ukraine, Serbia and Bosnia-Herzegovina. Despite being the biggest wood processing company in Romania, it purchases only 9 percent of the total volume it processes locally.

Holzindustrie Schweighofer posted an EUR 500 million turnover in 2016. Since 2002, the company invested EUR 800 million in its Romanian operations and contributed EUR 115 million to the state budget.