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Japan accused of failing to block Russia's timber exports

Julian Ryall in Tokyo
March 31, 2023

Japanese construction firms are using loopholes to keep buying wood from Russia, despite the sanctions triggered by the attack on Ukraine, activists say.

A forest outside Yuzhno-Sakhalinsk on Sakhalin Island in Russia's Far East
Japanese firms mostly buy slow-growing Scots pine, Yezo spruce and larch from Siberia and the Russian Far East, according to EarthsightImage: Igor Dudkovskiy/AP Photo/picture alliance

London-based environmental group Earthsight has accused the Japanese government of not acting to halt imports of more than $410 million (€378 million) worth of what they call "conflict timber" from Russia following the attack on Ukraine.

The activists claim that, despite sanctions imposed by Tokyo, Japanese business continue to buy sawn lumber (processed wood) from Russia's Far East.

Sam Lawson, Earthsight director and the report's author, said Japanese consumers are unwittingly helping to fund the war in Ukraine.  

"After international timber certification bodies scaled back or ended operations in [Russia] following Putin's aggression, EU officials declared it impossible for overseas buyers to reliably trace Russian wood to the point of harvest," he was quoted as saying by Earthsight.  

"So it is impossible for these Japanese investors and buyers to be sure their purchases are not helping to fund the murder of innocent Ukrainians, in addition to destroying precious forests," he added.

All forests in Russia are owned by the state, with a significant portion even directly owned by the Russian military.

Ukrainian anti-war and environmental activists have described the profits still being made from Russian wood as "blood money" and have reiterated demands first made in March 2022 for immediate sanctions on all Russian timber and wood products.

Japan bans logs and wood chips, but not sawn lumber 

The EU and the UK were quick to impose complete bans on imports of Russian timber in the early stages of the invasion, while the US responded by sharply increasing tariffs. In April 2022, Japan banned imports of logs, wood chips and veneer from Russia, although, by that time, the move was purely symbolic. Moscow had already outlawed exports of those same products to Japan on the grounds that it was an "unfriendly country."

Roman Abramovich, photographed ahead of a Premier League football match
Abramovich owned the UK football club Chelsea for almost two decades before selling it last yearImage: Clive Mason/Getty Images

The government of Japanese Prime Minister Fumio Kishida insists that it is following international sanctions on Moscow. But Tokyo has decided not to stop importing oil and natural gas from the Russian Far East. Moreover, neither Moscow nor Tokyo acted to halt the sale of sawn lumber, which accounted for 90% of their wood trade before the war.  

One of the largest suppliers of the wood is reportedly the RFP Group, which has long been connected to sanctioned oligarch Roman Abramovich, the billionaire former owner of Chelsea Football Club. Additionally, a sizeable portion of the company is apparently owned by the Russian government. 

Abramovich sold the majority of his holdings in the company in January 2022, although Earthsight says it has paperwork that indicates he still retains a 9% stake. In the same month, Japan's Iida Group purchased a majority stake in the RFP Group. The changes took place one month before Russian forces invaded Ukraine.

'Business situation in Russia is changing from moment to moment'

The Iida Group claims to be the largest builder of houses in Japan. In a statement issued to DW, the company made no comment on whether it intends to halt its operations in Russia.

"We are looking at the situation from various points of view and are making rapid decisions, so as not to undermine the value of the shares held by our existing shareholders," an Iida Group spokesman said. "To that end, we will try to collect the correct information and analyze it as the business situation in Russia is changing from moment to moment every day."

The Earthsight investigation also identified Itochu Kenzai Corp, a subsidiary of the Itochu conglomerate that focuses on interior fittings, as the biggest importer of RFP's Yezo spruce lumber.  

A spokesman for the company denied that it imports any Russian lumber from the RFP Group.

However, Russian customs export documents seen by DW would appear to contradict that claim. The export records show that Amurskaya LK, a subsidiary of the RFP Group, provided "Coniferous timber, rough, unplaned, unshelled, rough dried lumber" with a value of around $10,300 to Itochu Kenzai Corp as recently as February 17 this year. The paperwork shows that the 22,580 kilograms (nearly 5,000 pounds) shipment arrived at Nagoya port in Aichi Prefecture.  

Lumber 'very important' for construction firms

In 2017, Itochu Kenzai was one of several companies identified by a coalition of NGOs complaining about plywood linked to the destruction of rainforests in Malaysian Borneo, as well as human rights abuses linked to the construction of Japan's new national stadium, which formed the focus of the Tokyo Olympic Games in 2020.  

Yet another company identified in the Earthsight investigation is TM Baikal, which is based in Irkutsk and 100% owned by Japanese firms.

An official of the Ministry of Agriculture, Forestry and Fisheries in Tokyo told DW that the situation is "very complicated."

"The government decides the products that are on the list for import bans and it was decided that sawn lumber would not be on the list," said the official, who declined to be identified by name. "This wood is virtually all used by housing companies but we do not know why this policy has been set like this."

The official agreed that the rules might change in the future, although he emphasized that the lumber imports "are very important to the Japanese construction industry."

Edited by: Darko Janjevic