“We will somehow respond to the sanction very soon. It [Denmark’s sanction] will have a bad reputation on Myanmar teak but we can handle that, I believe.

“MTE and the forest department will respond under the direction of the Ministry of Natural Resources and Environmental Conservation [MONREC],” he said.

Myanma Timber Enterprise is a state-owned company responsible for the cutting and export of timber in Myanmar.

The Environmental Investigation Agency (EIA) released a press statement on March 15 which welcomed the injunctions imposed on all Danish operators placing Myanmar teak on Denmark’s market.

The decision follows the EIA’s submission of evidence that Danish timber company Keflico violated the European Union Timber Regulation (EUTR) and sets a clear precedent that other EUTR-competent authorities must follow, the statement said.

EIA is a UK and Washington DC-based non-governmental organisation that investigates, and campaigns against,

environmental-based crimes including illegal wildlife trade and illegal logging.

Denmark’s actions follow a November 2016 decision in Sweden where enforcement officials successfully prosecuted Almtra Nordic for breaching the EUTR.

“Denmark’s leadership in EUTR enforcement underpins similar rulings already made in Sweden and leaves no doubt that anyone placing Myanmar teak on the EU market under current conditions is in breach of European law,” said EIA forests campaigner Peter Cooper in the press statement.

“With Denmark setting a clear precedent on a case submitted by EIA, we now expect authorities in Italy, the Netherlands, Belgium, Spain and the UK to rapidly resolve the remaining 12 cases submitted by EIA.” 

EIA’s cases focused on the due diligence requirements of the EUTR, which oblige companies placing timber on the EU market to identify and mitigate any risks of illegality within their supply chains, the release said.

U Khin Maung Kyi explained that MTE is a state-owned enterprise and, according to the 1992 Forestry Law, the teak or any other hard wood extracted by MTE is legal.

“The teak going to the EU is small in terms of amount. We had a meeting earlier this month with the ministry and forestry  department on how we are going to handle the problems related to the EUTR due diligence [requirements] which have started since the financial year [2016-2017],” he said.

The MONREC is preparing to strictly handle the due diligence issue by setting up a database system for extraction in the year 2017-18, he added.

“We stopped extracting wood in the fiscal year [2016-17], so we … can guarantee that we can provide the necessary documents for timber legality for timber extracted in 2015-16 if asked by the exporter or importer,” he said.

With the harvesting permission from the forest department, MTE is extracting wood as well as being in the process to secure a Forest Law Enforcement, Governance and Trade (FLEGT) plan and is committed to becoming transparent, U Khin Maung Kyi said.

“We really want to know based on what facts that they are [accusing MTE of] using illegal teak. Tons of timbers are going to the EU even under the military government. And the cases about the due diligence issues are about teak from … four or five years ago,” he said.

The ministry is planning to organise a third independent party to get involved in the timber legality process starting from the upcoming fiscal year (2017-18), said U Khin Maung Kyi.

“We won’t let our reputation become affected by Denmark’s sanctions ... It will be a big strike to our reputation but not much in timber export volumes,” he said.

MTE has extracted 14,000 tons of teak and 200,000 tons of hardwood on hand and, after a year of the halt in operations, MTE will extract 15,000 tons of teak and 350,000 tons of hardwood in this fiscal year, according to the MTE extraction department statistics.

Due to the high-risk of illegality and a fundamental lack of transparency by the MTE, it is not currently possible for any company to successfully apply due diligence to Myanmar teak.

“The Myanma Timber Enterprise needs to urgently address illegality within its own operations and provide access to independent monitoring of its operations – or risk permanently losing access to Europe’s lucrative teak market,” Mr Cooper added.