Russian timber getting into Australia by exploiting loopholes, industry says

The timber industry says Russian wood is making it into Australia by exploiting loopholes in the country's sanctions following the Ukraine war.

Tariffs have been in place on Russian and Belarusian timber since April 2022, when Russia launched its invasion of Ukraine.

But the Australian Forest Products Association has found Russian imports are coming to Australia by being rerouted through countries like China and Lithuania first.

"If a product is manufactured in another country or substantially transformed, it avoids that tariff," acting CEO Richard Hyett said.

"Russian timber can go to China, be manufactured into LVL (laminated veneer lumber) and come to Australia and not attract the tariff, and we think that is wrong.

"We don't think Australians want to fund the war in Ukraine and we don't think Australians want Russian timber in their houses."

The association estimates up to 100,000 cubic metres of timber containing Russian wood is entering Australia each year, labelled as exports from other countries.

"Australia is facing a depressed market at the moment," Mr Hyett said.

"Our mill yards are full, ready to supply the Australian market, but they're being out-competed by cheap product coming from Russia through to China [and] into Australia."

A Department of Foreign Affairs and Trade spokesperson said Australia "remains steadfast in its support for Ukraine and its commitment to imposing costs on Russia".

"Australia has imposed a 35 per cent tariff on the import of goods from Russia and Belarus that applies to timber of Russian origin," they said.

"Australia has also imposed more than 1,800 sanctions on Russia and its supporters.

"The Australian government takes tariff compliance seriously and importers are expected to do necessary due diligence on their supply chains."

Long-term questions

Adelaide University has been part of a global project to build a genetic database to track and test the world's timber.

Environment Institute director Professor Andrew Lowe said concerns about the legality of Russia's timber trade predated its invasion of Ukraine, although tariffs and scrutiny grew in its aftermath.

"The sanctions are because of war activity, but for organisations like FSC (the Forest Stewardship Council) and PEFC (the Programme for the Endorsement of Forest Certification), they now no longer certify timber coming out of Russia because of the illegal logging activity.

"So sanctions with the war have certainly added increased pressure, but the illegality of operations within Russia have been widely known and haven't been addressed to date."

AFPA has called for testing at the Australian border to detect Russian timber and bar its entry into the country.

Professor Lowe said faster testing capabilities would need to be developed to allow regular timber exports to enter Australia uninterrupted.

He added that tracking illegal timber has been a global effort.

"Over in eastern Russia and with China, that supply chain is actually very difficult to police.

"The Environmental Investigation Agency a few years ago actually tracked timber coming out of Russia into China, into Chinese processing mills, and then for distribution into global supply chains.

"So we know that is a route of illegal logging."

Smooth timber supply needed

Despite the size of the forestry industry, Australia still requires imported timber to meet demand for building houses.

Housing Industry Australia senior economist Tom Devitt said timber supply chains were vital to meeting Australia's housing targets.

"If these developments play out for their various geopolitical and economic reasons, then the burden really needs to be on government and other policymakers to help reduce the costs of home-building in other areas," he said.

"Otherwise, they'll continue to fall short of the housing targets that they've set for themselves and the housing volumes that Australia actually needs."

Russian timber imports into Australia are allowed, but any trade cannot involve any person or entity listed as a designated person under sanction laws.

Mr Hyett said product-of-origin labelling would promote the use of local timber amid the concern over imports.

"Everybody wants cheaper product, but nobody wants to fund the war in Ukraine, and nobody wants to put Australian jobs and businesses at risk by supporting shady operations out of China.

"So we think if you buy Australian product, you know it meets Australian standards.

"If a product is cheap, there's usually a reason."