Subcommittee Chair: Lacey Act Wood Proposal Would Provide Certainty to Importers
For proponents of the Strengthen Wood Product Supply Chains Act, requiring the federal government to tell importers a specific reason the goods were detained and provide information that "may accelerate the disposition of the detention" would increase transparency and save importers money on demurrage fees. For the bipartisan bill's opponents, the bill's planks, including allowing importers to move the wood to a bonded warehouse after the first 15 days of detention, would undermine law enforcement.
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The House Natural Resources Subcommittee on Water, Wildlife and Fisheries held a hearing Feb. 14, on four bills under consideration, including this one, introduced by Reps. John Duarte, R-Calif., and Jim Costa, D-Calif.
Subcommittee Chairman Cliff Bentz, R-Ore., said the changes to the Lacey Act Amendments would provide greater transparency and certainty for businesses subject to that act, and said they are "not designed to inhibit enforcement." But he said making these changes would make it so shipments 'cannot be detained indefinitely without a legitimate reason."
Witness Alan McIlvain, who's in the seventh generation of his family to run a Philadelphia-area lumber company, said that the changes Duarte and Costa propose "would make [the] Lacey Act more clear for American companies and still allow for the prosecution of bad actors."
McIlvain said he and colleagues who import hardwoods invest time and resources in due diligence in supply chain management, but still have had shipments held due to possible Lacey Act violations. He said officials rarely tell importers why the goods were detained, and are even less likely to say what information could help resolve the issue. "This bill will help me immeasurably," he said.
He said his firm had two detentions, one that lasted a month, that ended once what he called "minor paperwork issues" were fixed. When goods are held at a port, he told the subcommittee, demurrage costs between $500 and $1,000 a day. In one case, he paid $6,000 in demurrage, which was 20% the cost of the goods in the container. He said some firms relinquish without knowing what was wrong in their compliance practice, because demurrage had become so costly. He told Duarte that he knew some firms had wood detained for two years.
Rep. Jared Huffman, D-Calif., the top Democrat on the panel, said, "By no means am I trying to malign Mr. McIlvain. We all want to cut red tape." But, Huffman said, "I’m concerned about the unintended consequences of a sweeping bill like this."
He said that requiring officials to provide justification during an investigation, and allowing an importer to move the wood off-site seems to undermine law enforcement.
Rep. Garrett Graves, R-La., said that while he's supportive of Lacey Act goals, he feels Duarte's bill offers due process to importers. He said the way the Lacey Act detentions go now, it's a "scenario where you are guilty until proven innocent."
Stephen Guertin, deputy director for program management and policy at the Fish and Wildlife Service, defended the efforts to facilitate trade, and mentioned that last year, a mobile tree lab deployed at the Mexican border allowed agents to analyze what species of wood was entering the U.S. within minutes.
In his opening statement, Guertin told the panel that the agency opposes the bill. He said they "believe it would interfere with our ability to facilitate legal and timely movement of commerce, combat the illegal wildlife trade, and prevent the introduction of injurious" species. "The deadlines under the designation would be difficult to meet, and result in shipments being unnecessarily detained or seized while inspectors obtain the information they need to evaluate the shipment." He said a requirement to tell importers specific information about why the shipments were detained would impede or undermine investigations.
While much of the discussion of the bill during the hearing focused on the ability of importers to move wood after 15 days out into bonded warehouses, Guertin, in mentioning unnecessary seizures, was referring to a requirement that the agency seize goods held longer than 30 days if they were not ready to be released from detention at that time.
Rep. Val Hoyle, D-Ore., noted that Guertin said the changes would make it harder for the FWS to do its job of enforcing the Lacey Act. She noted that while the title of the bill mentioned wood, the text didn't limit its scope, so as written, it could affect ivory or other goods.
"My concern is it’s too broadly written, covering all enforcement activities," she said.
She said that the current Lacey Act enforcement approach reduces demand for illegally harvested materials. "Allowing illegally logged materials into our country would be bad for our domestic timber producers," she said.
Duarte, when he had a turn in the hearing, said he would change the body of the bill to clarify that the changes only affect wood imports, not animal products.
He asked Alexander Von Bismarck, from the Environmental Investigation Agency that investigates illegal logging and other environmental crimes, why the deadlines for moving from detention to seizure and for moving to a bonded warehouse aren't workable. "Why don’t these time frames work for these purposes?"
Von Bismarck said that importers could switch wood products once the goods were out of government control. He said making this change would give "great comfort to smugglers."