BBS Timbers at Port Whangarei has been revealed to have imported 24 tons of Teak from a Myanmar oligarch sanctioned for his ties to the military junta. Photo / Michael Cunningham
A Northland timber firm imported 24 tons of endangered teak – the preferred wood for superyacht construction – from a company owned by a Myanmar oligarch who is under United States and United Kingdom sanctions
over his close ties with, and arms-dealing for, the current military junta.
The revelation comes from Herald reporting as part of the International Consortium of Investigative Journalists (ICIJ) project Deforestation Inc, a collaboration involving 40 media outlets in 27 countries looking into greenwashing in the global timber industry.
Documents shared with the Herald and ICIJ by human rights group Justice with Myanmar and data transparency activists Distributed Denial of Secrets, showed in October 2021 – six months after a coup saw Myanmar backslide from budding democracy to civil-war-stricken military dictatorship – 23.9 tonnes of teak boards and scantling worth US$105,569 was shipped from Yangon to Auckland.
The documents show the recipient of the timber was Whangārei importer BBS timbers, while the ultimate seller was the Htoo Trading Company, a key component of the Htoo conglomerate owned by Myanmar’s richest man U Tay Za.
The shipment has raised questions over the lack of New Zealand sanctions targeting Myanmar, as well as the sustainability and accountability of the global trade in tropical hardwoods.
Paul Wickham, managing director of BBS Timber, confirmed the shipment occurred as the document described, but denied knowing who he had ultimately bought the teak from. Informed of details of his transaction and the controversy over Htoo and U Tay Za, Wickham said: “It’s not ideal. It doesn’t look good, no.”
Tentative steps in Myanmar toward democracy, including seeing Nobel peace prize laureate Aung San Suu Kyi freed from military house arrest and her subsequent victory in general elections in 2015 and 2020, backslid in 2021 when the country’s military reasserted power through a coup. Subsequent protests against the newly reinstalled junta were violently put down and have since spiralled into a still-ongoing civil war that has seen thousands killed.
Both Htoo and U Tay Za spent nearly a decade on various sanctions lists until these were relaxed in 2016 after the long-suppressed general elections. But by early October 2021, following a fresh coup earlier that year, the United States and United Kingdom had reimposed asset freezes and trade sanctions.
A September 2021 statement from Dominic Raab, then British foreign secretary, said assets associated with the oligarch and his companies would be frozen and added: “U Tay Za is associated with the military through his extensive links with the former and current junta regimes and has provided support for serious human rights violations in his role in assisting the military to procure arms.”
Questions sent over the past month by ICIJ to U Tay Za and Htoo have gone unanswered.
The documents show the BBS Timbers teak shipment used a Singaporean Htoo subsidiary – KDG Capital – to handle the consignment, but Wickham said he had been dealing with a long-standing contact in Myanmar who he described as “a little French guy” who operated a sawmill there.
“We might have sent the money to them [KDG], but I don’t know who they are,” he said.
Wickham said he was aware of human rights and environmental issues in Myanmar and the October 2021 shipment was, and would be, his last.
“If you were to go and buy [Myanmar] teak now, you would know absolutely, 100 per cent, it’s not right,” he said.
BBS Timbers still advertises “Burmese Teak” for sale on its website, with the product description noting “sustainability questionable”.
Wickham said the description was “just an absolutely honest assessment: I can’t say whether it’s absolutely sustainable, so it’s questionable.”
Teak, due to its strength and weather resistance, has for centuries been the preferred timber for boatbuilding. Despite the emergence of better-performing artificial metal and carbon-fibre alternatives, and its soaring price as demand led to the species becoming endangered, teak remains the most popular decking and interior option in superyacht construction.
Christchurch-based Grant Rosoman, a senior forestry adviser for Greenpeace International, says long-held concerns over sustainability and human rights have prompted most New Zealand importers to shun any timber from Myanmar.
“It’s basically blood timber that comes out of there,” he said.
Rosoman said while the New Zealand industry had cleaned itself up over the past decade, the shipment to BBS Timbers was typical of a grey market that still persisted.
“Singapore is a hub for [non-certified] wood, so it’s not surprising to see it’s being channeled through there,” he said.
Malcolm Scott, chairman of the New Zealand Imported Timber Trade Group (NZITTG) – which counts BBS Timbers as a member – was aghast at the teak shipment and said deciding to source wood from Myanmar was “like walking towards a volcano and not feeling the heat”.
“It’s an extremely disappointing action by the member: It’s a lapse of due diligence and judgment.”
He called the BBS shipment a “renegade import” that ran counter to recent moves to clean up the industry.
“We’re aware of the high risk of illegal conflict timber and our members generally have in the last five to 10 years moved away from teak of any sort,” he said.
The Germany-based Forestry Stewardship Council, a transnational industry certification body promoting and verifying sustainable forestry, told the Herald this week no forests in Myanmar were subject to its oversight and its risk assessment of the country for members had raised red flags since at least 2018.
The FSC said BBS Timbers held a valid certificate, but this did not cover teak and stressed any such lumber could not be described as “FSC Certified”.
Since the 2021 coup, New Zealand has not imposed sanctions on trade with Mynamar, and a ban on travel by junta leaders only covers five senior military figures and not U Tay Za.
A spokesperson for the Ministry of Foreign Affairs and Trade said the list of those facing a travel ban “remains under regular review”.
“New Zealand supports robust multilateral action in response to the coup in Myanmar and continues to advocate for this. The New Zealand Government can impose sanctions only when authorised through the UN Security Council,” the spokesperson said.
Attempts at the United Nations to impose sanctions against Myanmar’s military government have foundered over support for the junta by China and Russia who have veto powers as permanent security council members.