IKEA’s Romanian wood sourcing woes highlight the need for national transparent timber traceability systems across Europe

IKEA’s sourcing practices in Romanian forests have come under renewed scrutiny in recent months after three separate investigative reports raised concerns about the company’s supply chains. The Swedish furniture giant relies on an extensive web of suppliers in Romania to produce some of its most iconic chairs, tables, baby cribs and other products. The investigators found that many of the factories contracted to make furniture for IKEA draw on wood from questionable sources, including clearcuts in protected areas. All three investigations were made possible in part by the existence of Romania’s official transparent timber traceability system, SUMAL, highlighting the need for the creation of similar national digital traceability systems elsewhere in Europe.

The European investigative journalist cooperative OCCRP, in collaboration with its Romanian partner RISE, uncovered systematic fraud in wood transports delivered to Kronospan, one of the world’s largest fiberboard manufacturers and a supplier to some of IKEA’s Romanian furniture factories. Over an 18 month period, the OCCRP investigators found that over 100 trucks with falsified transport permits had delivered wood to Kronospan. In Romania, all timber transporters must use the SUMAL Android mobile application to record the details of the timber being transported, and take three photos of the cargo, to verify the authenticity of their declaration (See What is SUMAL? below for more details). OCCRP used the Forest Inspector, an open online geoportal maintained by the Romanian government that visualizes the SUMAL transport reports, to identify hundreds of shipments in which a transport company owned by Kronospan had submitted fake photos of their cargo, in violation of Romanian law and raising serious questions about the legal origins of the wood they transported.

IKEA’s claims to responsible wood sourcing continue to be challenged by evidence from across Eastern Europe.

Greenpeace Central and Eastern Europe published a report detailing hundreds of direct and indirect transports of logs from Romanian old growth forests to seven IKEA supplier factories, making products such as SNIGLAR cribs, PROPPMÄTT cutting boards, and BEKVÄM step stools. The nonprofit Environmental Investigation Agency (EIA) conducted extensive data analysis to support Greenpeace’s investigation, using GPS tracks from SUMAL to identify truck transports from harvest plots in old growth forests to IKEA sub-suppliers, and to link these with IKEA factories. Greenpeace carried out field investigations in dozens of harvest sites, timber depots, sawmills and factories, documenting destructive clearing of old growth forests.

The third report, released in April by the Romanian NGO Agent Green and the Swiss NGO Bruno Manser Fonds, revealed destructive forestry practices in seven IKEA-managed forests and in two public forest sites linked to sub-suppliers of IKEA factories. These findings raise questions both about IKEA’s management of its own Romanian forest harvest operations, and also about the sourcing practices of its Romanian contract factories. This is not the first time that IKEA’s Romanian forests have been under the spotlight – various media sources have previously reported that many of the Romanian forests now owned by IKEA had been privatized in the early 2000s under one of the largest land restitution scandals in Romania’s history, then sold between various investors including the Harvard pension fund, before being bought by IKEA’s forest management arm in 2015.

In addition, the AG/BMF report highlights IKEA’s suppliers’ sourcing of oak from the potentially illegal clearcutting of valuable oak forests. Under Romanian law, clearcutting is only allowed in very limited circumstances in plantation-grown evergreen forests. These suppliers manufactured oak cutting boards, kitchen countertops, and tables sold at IKEA stores around the world.

A comparison of two wood tables in an IKEA showroom. One is set like a dinner table, while the other is a kitchen counter.

Both of these IKEA oak tables were made by Aviva, which was linked to destructive forest clearing in the recent investigations.

What is SUMAL? SUMAL is Romania’s national transparent timber traceability system. In continuous operation since 2014, it is used to record thousands of transports of logs, planks, wood chips and scraps every day across the country. Before starting a journey, an individual or company carrying wood must use the SUMAL Android mobile application to register detailed information about the shipment, including the driver’s name, the truck’s license plate number, the sender and recipient of the wood, and the type, amount, quality and species of the timber they are transporting. The user then takes three photos of the front, back, and side of the vehicle, and then registers the start of the journey. All of these operations can be carried out offline. When the driver reaches cell phone connectivity, the data is automatically uploaded to SUMAL’s central database. As the vehicle drives, the SUMAL app records the GPS track of the journey, and once the journey is complete, this information is uploaded to the SUMAL database as well.

In 2016, the Romanian government released the Forest Inspector, a transparent window into SUMAL data. The Forest Inspector is an open, online geoportal, in which users can access nearly all of the data from all registered SUMAL transports from the past 72 hours, with the exception of the driver’s name. The Forest Inspector also has a mobile app, with which users can type in the license plate number of a truck carrying timber. The user receives an immediate answer whether the transport is legal or illegal – if illegal, the user is prompted to call the police to report the violation. Within three months of the release of the Forest Inspector mobile app in June 2016, the number of transports being officially registered in SUMAL jumped by 60%, a clear sign of the power of public transparency in rooting out fraud.

A screenshot of a map of Romania in the Forest Inspector app

Romania’s Forest Inspector makes public real-time data about all timber transports in the country.

The costs of IKEA’s reliance on cheap Eastern European timber

IKEA has long counted on Eastern Europe for the majority of its timber sourcing. While timber quality and low labor costs no doubt play a part, the weak rule of law and high levels of corruption in these countries has helped maintain steady access to low-cost wood for companies like IKEA.

Over the past five years, investigations by the British NGO Earthsight have linked IKEA suppliers to illegal logging in Ukraine, illegal destruction of protected forests in Siberia, and forced prison labor in Belarus. Other reports and articles have flagged concerns in IKEA’s Romanian sourcing.

It is quite possible that similar illegal and/or destructive practices are happening in IKEA supply chains in other Eastern European countries, given that illegal logging is a noted problem across the region. However, the lack of public data about harvesting authorizations and internal wood flows limits public knowledge and curtails the ability of watchdog NGOs and the media to investigate.

It is important to note that most of the timber transports highlighted in all three Romanian investigations, as well as much of the timber in Earthsight’s investigations, consisted of timber certified by the Forest Stewardship Council (FSC). The FSC is often considered to be the leading independent certifier of sustainable timber, and IKEA has promoted its use of FSC-certified timber as a key indicator of its sustainable timber sourcing policy. However, the prevalence of destructive, and sometimes illegal, logging and trade practices certified by FSC but identified by these investigations once again highlights the failure of FSC as a guarantor of legal and sustainable timber sourcing.

An aerial view of a cleared forest crossed by tracks

“Progressive” logging in a protected Natura2000 area where an IKEA sub-supplier cleared 26 hectares of oak forest.

SUMAL: Romania’s supply chain transparency is essential to revealing fraud and bad practices

All three of the new investigations were based in large part on analysis of data from Romania’s transparent timber traceability system, SUMAL (See side bar above). SUMAL’s Forest Inspector website makes harvest and transport permit information available to the public, along with the GPS tracks of legal shipments from harvest sites, log yards, and sawmills to their destinations.

EIA supported two of these three recent Romanian investigations with significant analysis of SUMAL data to link IKEA factories to suppliers, and these to sub-suppliers, and back to forests. All of these analyses were conducted with publicly accessible data available on the government’s Forest Inspector website. In 2022, EIA supported a New York Times investigation that revealed how high-quality logs from protected Romanian forests were being chipped up for pellet production and sold to European customers.

Romanian investigators rely on the SUMAL system to identify shipments of timber from protected forests – including national parks – and to expose the companies that drive the deforestation of some of the continent’s last old-growth forests. Any Romanian citizen can use the system to find out if a passing timber shipment has a legal transport permit.

Romania’s SUMAL system, for all its innovations, has suffered from resistance against full implementation from the beginning because it poses such a threat to illegal logging. The fraud identified by OCCRP and previous investigations are an indication of the need for improved law enforcement, stricter penalties for violators, and full public transparency as outlined under Romanian law, but not present in practice. However, because the Romanian public has significant access to individual transactions, even the inertia from the entrenched interests couldn’t hide this fraud, and investigators had enough access to the truth to expose it. Given the high degree of violence faced by forest defenders in Romania, where at least six murders and over 600 cases of serious threats and/or assaults have occurred in recent years, it is essential that fraud can be revealed by analyzing public data rather than risking physical violence in the forest.

Despite its weaknesses, SUMAL remains the best national timber tracking system in the world, due in a large part to the real-time transparency of the data. This transparency has generated public support for SUMAL, and has driven a cycle of improvements to the system since its release in 2014. The Romanian government unveiled SUMAL 2.0 in 2021, extending coverage to harvest and inventory operations, and expanding public transparency of the data – although unfortunately, the Romanian government only makes public a portion of what is required by law (Monitorul Oficial, Partea I nr. 570 din 30 iunie 2020, Art 5 (8)).

Worldwide, the illegal trade in wood products nets criminals over $100 billion every year. Criminals will always push the boundaries and challenge any national system, no matter how technologically advanced it is. Transparency will always be necessary to ensure that these systems are effective and to protect forest police and defenders.

An aerial view of a dead trees lying along a road

Oak logs harvested from a protected forest by an IKEA sub-supplier under the guise of so-called “progressive” logging.

Digital transparent traceability systems like SUMAL are needed across Europe

It is nearly impossible for European citizens and regulators to know whether the wood going into the products they purchase comes from legal and sustainable sources, due to the lack of traceability and transparency in global timber supply chains. The EU recently passed the EU Deforestation-Free Regulation (EUDR), which will come into full effect on December 30, 2024. The EUDR requires importers and producers of timber and other deforestation-driving commodities (palm oil, soy, rubber, beef, coffee, and cacao) to maintain and report full traceability back to the forest or farm origin of their products. Doing this with confidence will require the development of transparent traceability systems like SUMAL across the continent.

EIA encourages other European countries to follow Romania’s lead in implementing systems that create and maintain digital traceability data, and that make this data available to the public. In the region, only Bulgaria operates a similar system. As in Romania, corruption-fighting Bulgarian groups have used this data to reveal destructive logging in protected areas, and to demonstrate links between Bulgaria’s largest timber companies and its most powerful politicians. By contrast, most countries in Europe, and nearly every other country around the world, still use paper permits to register timber movements, despite the fraud risk presented by paper-based tracking systems.

This lack of reliable timber production data became starkly apparent in a recent study by the European Commission’s own research body, the Joint Research Commission (JRC). In a 2021 report, JRC experts tallied all recorded figures of timber harvesting and imports vs. manufacturing, energy production and exports, and found that every year, European wood processors use nearly 120 million cubic meters of wood of unknown origin, meaning in excess of what’s officially harvested and imported into the EU. This gap, representing 20% of all the timber used annually inside the EU, is nearly equivalent to the entire annual timber harvest production of Germany and Poland combined.

In addition to this unregistered logging, numerous reports indicate that a large percentage of the timber officially imported into the EU or harvested within the EU was illegally harvested. This recognition helped lead to the passage of the EUDR. In order to meet the EUDR’s “traceability to origin” requirement and to ensure legality in an efficient and cost-effective manner, national transparent traceability systems like SUMAL need to be created across Europe, and in supplier countries to the EU, for timber and other commodities.

The creation of SUMAL-like transparent traceability systems in other countries, and the improvement of the SUMAL system in Romania, will ensure the availability of public supply chain data across Eastern Europe and around the world. Only in this way can IKEA and other companies confidently source from countries like Romania, and only in this way can IKEA and other companies regain the confidence of their consumers around the world.

Recommendations:

  1. IKEA should adopt new policies to demand traceability and transparency from their suppliers, taking the lead in demonstrating full compliance with the EUDR;
  2. IKEA and other companies should implement improved due diligence policies to halt destructive timber sourcing from old growth and protected forests;
  3. Romania should improve SUMAL and the Forest Code to require full traceability through log yards;
  4. Romania should improve law enforcement, in particular using SUMAL data, to continue leading the way in 21st century timber sector management;
  5. European Union should take measures to support EU member states to implement transparent traceability systems for timber sourcing, including strong implementation of the draft Forest Monitoring Act
A closeup of two cut trees

Digital transparent traceability systems help consumers trace wood products all the way back to their forest origins.