Wood Cuts - December 2011

By Michael Martin

Anyone working in the flooring industry who thinks their voice has no impact in Washington, D.C. needs to think again. Through numerous national organizations, the interests of flooring professionals are being addressed with our nation’s policy makers to make sure that the industry is well represented when new laws and policies are being introduced and enacted. Two of the most important legislative acts affecting the flooring industry at present are the Lacey Act and the International Trade Commission’s (ITC) ruling on hardwood dumping. The goal of the Lacey Act is to promote responsible procurement of hardwoods and to eliminate illegal logging of exotic species, while the ITC rules seek to level the playing field for domestically made flooring by imposing tariffs on imports that are sold at “dumping” price levels. These rulings, and others, have a significant impact on the flooring industry.

The Hardwood Federation is the largest Washington, D.C.-based hardwood industry trade association, representing thousands of hardwood businesses in every state. It is an umbrella organization representing the majority of trade associations engaged in manufacturing, wholesaling, or distributing North American hardwood lumber, veneer, plywood, flooring and related products.

Just this past October, as a member of the Hardwood Federation, the National Wood Flooring Association (NWFA) participated in The Hardwood Federation’s annual Fly-In to Washington, D.C. The group met with more than 40 members of Congress to discuss issues affecting the hardwood industry, including economic recovery and taxation, trade issues, hardwood product advocacy, green building, the Environmental Protection Agency (EPA) Boiler MACT and biomass energy policy, federal forest management, renewable energy, illegal logging, the Farm Bill, and the NWFA’s Responsible Procurement Program.

Economic recovery and taxation issues are of immediate concern to the industry as it continues to struggle in the sluggish economy. With housing starts still at record lows, the group is seeking Congressional action on economic recovery initiatives aimed at restarting the housing industry and on the unique challenges facing United States hardwood small businesses.

Responsibly managing federal forests is a major legislative initiative. Engaging Congress and the Administration in focusing United States Forest Service resources on policies that will restore federal forests to exemplary levels of health and productivity is a priority in our industry. To accomplish this, the Hardwood Federation helped to provide testimony before the House Agriculture Forestry Committee and helped highlight the lack of sound management and access to federal timber resources.

LACEY ACT UPDATE
Illegal logging continues to be a hot industry issue that has received national attention in recent months with the raids by armed federal agents on the Gibson Guitar Corporation. For many decades, Gibson has imported ebony, rosewood and other rare wood species to make its famed guitars for heavy-hitters in the music industry. But this past August, a second search warrant was executed at two Gibson plants, resulting in the closure of the plants and the seizure of several pallets of wood. Gibson officials say that they have provided documentation indicating the wood in question was purchased from a Forest Stewardship Council certified supplier, which by all accounts is the industry standard for conducting due diligence with regard to Lacey Act legislation. However, the wood has not been returned, and Gibson remains under investigation.

The Hardwood Federation fully supports the existing Lacey Act and is working to educate members about the protection it provides the wood products industry. Currently, three members of Congress are proposing changes to Lacey that would effectively gut the act. The bill, introduced by Tennessee Representatives Jim Cooper and Marsha Blackburn and California Representative Mary Bono Mack, would completely exempt pulp and paper from the Lacey Act requirements. Pulp and paper represents a majority of forest product imports, and employs almost 400,000 people in 42 states. The legislation would also minimize the fines for first infractions to just $250.

CHINESE HARDWOOD RULINGS
After a long investigation, the International Trade Commission recently ruled in favor of the multilayered engineered wood flooring antidumping and countervailing duty brought to its attention by the Coalition for American Hardwood Parity (CAHP). This group made allegations of illegal dumping by Chinese manufacturers and asked the ITC to investigate, stating that the process created unfair trade practices that undermined United States manufacturers, and threatened United States jobs. The ITC ruled in favor of the CAHP group and now requires cash deposits for estimated antidumping and countervailing duties, which vary by Chinese manufacturer. The exact amount of such fines will not be determined until the United States Department of Commerce conducts its review.

The Hardwood Federation also worked to educate Congressional leaders about the benefits of using renewable domestic wood in government building projects. This stemmed from the specification of bamboo flooring in a gymnasium to be constructed at Camp Lejeune in an effort to use renewable building materials. The group showed that not only is bamboo an imported product and thus uses more energy to transport to the building site, but the material that was later specified—domestic maple—is completely renewable, creates jobs for Americans, and costs $30,000 less to use. To that end, the group has requested a meeting regarding Navy LEED policy. The group also is working with the United States Green Building Council to amend LEED standards to recognize wood in green building projects.

PENDING LEGISLATION
Boiler MACT legislation, designed to regulate the emissions of hazardous air pollutants, has the potential to shut down many mills, at least temporarily, as they reconfigure their operations to meet the new requirements. This would cause production delays and lead to price increases, as well as lack of supply, in an already struggling industry. The group is actively working with forestry coalitions to gain strength in Congress to encourage the EPA to recognize the needs of the hardwood industry on this issue.

The 2012 Farm Bill will have a significant impact on our industry as well. The Hardwood Federation is working to ensure that hardwood forestry and conservation issues are included in the upcoming Farm Bill reauthorization, encouraging further development of a sustainable, dependable hardwood supply. The group is also urging the Administration and Congress to maintain funding for the Market Access Program, which supports the American Hardwood Export Council’s promotion of United States hardwood exports. Congress is attempting to act on an expedited Farm Bill this year, and the group is working with the House and Senate Agriculture Committees to have hardwood positions included in such legislation.

The Hardwood Federation also supports increases in allowable truck weights through federal legislation to enhance productivity and savings in goods movement. Legislation regarding this issue has been introduced and has gained supporters. The group will work with broad inter-industry coalitions to advance the initiative.

NWFA PROGRAMS
The National Wood Flooring Association’s Responsible Procurement Program (RPP) was presented during the Fly-In as well. One of the major priorities of the NWFA’s RPP is to help increase the amount of available Forest Stewardship Council certified wood. Currently, it is estimated that about 90% of the world’s forests are not FSC-certified, which makes it difficult to practice due care under Lacey. The NWFA recently helped bridge this gap through an initiative with the White Wood Timber Group to certify 12,000 acres of forestland through the Forest Stewardship Council. The acreage includes 24 landowners in South Carolina, and represents the start of a much larger certification project that is expected to grow to 80,000 acres in just five years, combining the resources of landowners in South Carolina, Georgia, and Florida. The group plans to pursue similar ventures in other areas of the country as well.

FSC certification is recognized throughout the world as the pinnacle of forest certification programs, and yet many privately held forests are unable to achieve FSC certification for a variety of reasons. The NWFA’s RPP program helps to bridge that gap by providing measurable, achievable, recognizable goals for companies that are working toward FSC certification. To help accomplish this goal, the NWFA made entry into the program more streamlined and user friendly.

The NWFA also has recently begun work with the National Center for Sustainability Standards to develop a product category rule for wood, tile, carpet, resilient and laminate floorcoverings.

As you can see, there are numerous legislative issues that will have a big impact on the hardwood flooring industry and the industry as a whole. A lot has been accomplished already, but there’s more work to be done. It is important that flooring professionals unify as a group and use their collective voice to mobilize the industry to positively impact their livelihoods. These are issues the entire industry can support, whether on Capitol Hill, in forests, or in individual businesses.