ESG Enforcement Tracker

Key facts:

In February 2019, the Netherlands Food and Consumer Product Safety Authority (NVWA) received a report about a Czech company, managed by a Dutch national, allegedly importing high-quality teak wood from Myanmar into the Czech Republic, without complying with the due diligence requirements of Articles 4(2) and 6(1) of the EUTR.

The Netherlands Public Prosecution Service (OM), therefore investigated and ultimately prosecuted three directors of DMPT, Mercura, and Fairwind, as well as the companies DMPT and Mercura for alleged failures to comply with the EUTR’s due diligence requirements during the period January 2018 to 3 December 2019.

Previous Warning

In 2018, the NVWA had issued a warning to one of the Dutch companies involved which had been importing Myanmar teak into the Netherlands. The NVWA determined that, as the economic operator, its due diligence system for its imports of Myanmar teak failed to meet the due diligence obligations of the EUTR.
Due to the political situation in Myanmar, it is virtually impossible for operators to comply with the due diligence requirements when importing teakwood from that country.

OM Investigation
The OM’s investigation found that, between January 2018 and December 2019, the companies had imported 178 cubic metres of teakwood from Myanmar worth over €2.5 million. The OM alleged that DMPT travelled to Myanmar to choose the teakwood planks that had to be transported to Europe, and Mercura took care of shipping. It was alleged that the third company involved, Fairwind, served as an administrative front to circumvent any monitoring by the NVWA.

Criminal Case
In December 2022, the District Court of Amsterdam deemed that two individuals and one of the companies involved had jointly committed the offence of marketing teak from Myanmar in the EU in breach of the requirements of Articles 4 and 6 of the EUTR – namely that while marketing these shipments, insufficient measures were taken to mitigate the risks of marketing illegally cut timber.

This was the first instance of an EU member state handing down criminal convictions for EUTR breaches since the law came into effect in 2013. The two individuals convicted were sentenced to community service. Neither received financial penalties. The convicted company was ordered to pay a fine of €100,000, €50,000 of which was suspended. However, appeals are pending in respect of these three cases.

The other company and its director prosecuted by the OM were acquitted by the District Court of Amsterdam.