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Superyacht built with illegal timber

April 6, 2017

A German shipyard has used illegally logged teak from Myanmar when constructing a megayacht for a Russian billionaire. The wood was sourced from a government-controlled firm that was sanctioned this year.

Sailing Yacht A
Image: Carl Groll

German shipyard Nobiskrug used illegally-sourced teak in the construction of "Sailing Yacht A," a 143-meter (470-foot) sail-assisted motor yacht, public prosecutor Axel Bieler found on Wednesday.

After its five-year construction a timber expert took samples of wood used in its construction. An analysis of its composition and ring structure found the timber did not come from a legal plantation. Instead it likely came from forests in Myanmar, Bieler told German news agency DPA.

Bieler said it was unclear whether the illegal origin was known to the shipyard.

Allegations that the teak was logged illegally were first raised by the London-based Environmental Investigation Agency in October 2016.

'Willful ignorance'

Deutschland Sailing Yacht A
The 143-meter yacht took five years to complete and was handed over in February 2017Image: picture-alliance/dpa/C. Charisius

After a two-month investigation, the EIA accused the Spanish supplier of the wood, Teak Solutions, along with eight other European suppliers of willful ignorance about the source of their timber.

"EIA identified a shipment of 1,278 pieces of teak costing 174,750 euros (US$186,000) being used aboard the yacht. This was one of many shipments from Myanmar by Teak Solutions, imported in direct violation of the European Union Timber Regulation (EUTR)," EIA wrote at the time.

"All nine companies failed to identify or verify the source of the teak, a clear right to harvest or information that might mitigate the risks of harvesting in violation of relevant forestry provisions," the EIA reported.

Myanmar company sanctioned

Burmese workers measure and record teak logs in a wood yard in Yangon, Myanmar
Teak can be sustainably grown but illegally harvested old-growth logs often make their way into the supply chainImage: picture-alliance/dpa/B. Walton

Teak Solutions bought the timber from Myanmar Timber Enterprise (MTE), a state-run wood trading company that was recently sanctioned by Denmark for supplying teak of dubious origin.

At the time, Teak Solutions CEO Kimble told German news magazine "Der Spiegel" his Burmese imports were legal and met EU regulations, saying dealing with MTE was the "safest" way to source the wood.

Andrej Melnichenko auf St. Barth
The yacht was ordered by Russian billionaire industrialist Andrey Melnichenko - his second megayachtImage: picture-alliance/dpa/Maxppp/Gasp

The shipyard told "Kieler Nachrichten:" "We support the investigations of Kiel's public prosecutor and we are cooperating fully with the authorities. We have a great interest in quickly disproving the allegations, especially since the Federal Agency for Agriculture and Food halted similar investigations in the same case against us last year."

Bieler's criminal investigation was ongoing, as they reportedly pored over email records and paperwork.

In March, MTE released a statement saying it would take steps to address illegal logging and its associated trade.

The tropical hardwood is used by boatbuilders for decking due to its resistance to rot, its strength, its low shrinkage and the ease of working with it.

400 million euro yacht

Germany's wood detectives

The yacht, which by some estimates may have cost 400 million euros, was built for Russian billionaire Andrey Melnichenko. Melnichenko controls companies that deal in fertilizer, coal and energy.

Sailing Yacht A was his second yacht by French designer Philippe Starck. The first was Motor Yacht A, a $300 million yacht built by German shipyard Blohm + Voss in 2008. He also owns a Boeing 737, according to "Forbes Magazine."

A 390ft motor yacht belonging to Russian tycoon Andrey Melnichenko, alongside HMS Belfast (right) on the River Thames in London.
His first motor yacht caused a great stir in London when he moored on the River Thames.Image: picture-alliance/empics/PA Wire/D. Mirzoeff

Sailing Yacht A is 90 meters (295 feet) high and has a sail area of 3,700 square meters (0.9 acres). The German shipbuilder's website described the eight-deck yacht as "the most advanced sail-assisted superyacht ever built." The luxury sea-cruiser features a helipad, onboard swimming pool, and underwater observation pod.

It was briefly impounded in Gibraltar in February after the Kiel-based shipyard alleged that Melnichenko had yet to pay around 15.3 million euros ($16.2 million) for services, subcontractor invoices, interest and other fees. Melnichenko has disputed the claim.

Mega-yachts made in Germany