Should Lumber Liquidators be responsible for its Chinese supplier’s wood sources

Posted on September 28, 2013 by aviyer2010

An article in the Wall Street Journal titled “Lumber Liquidators’ Offices Raided) (Sept 28, 2013 http://online.wsj.com/article/SB10001424052702303342104579101042712448428.html) describes a Federal government raid on Lumber Liquidators’ offices to find evidence of use of Mongolian oak and Korean pine logged illegally in Russia. The trees are in the habitat of the Siberian tiger and their logging reduces the acorns and pine nuts that feed the deer and boars that are the tiger’s food source. The claim is that Chinese floor manufacturers are using this wood, thus providing an illegal source of supply that violates the Lacey Act – a US law that makes it illegal to import plants that violate foreign laws. Should Lumber Liquidators’ be held responsible for the wood supply chain beyond assurances provided by its suppliers ? Should US authorities hold US retailers liable if foreign laws are violated, even if both Russia and China take no action against these suppliers ? How should we expect US retailers and manufacturers to ensure that the entire global supply chain’s actions are legal ?

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This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged China, Consumers, Cost, Global, Imports, Legal, lumber, Russia, Siberian tiger, Suppliers, Supply Chain. Bookmark the permalink.

4 Responses to Should Lumber Liquidators be responsible for its Chinese supplier’s wood sources

Rodrigo Espinosa says:

September 30, 2013 at 11:43 am

While I do not think Lumber Liquidators should carry all of the blame for the illegal practices of its suppliers, I do believe the US authorities should hold the US retailers liable for foreign law violations. Ignorance is never a viable excuse, especially when dealing with practices that affect an endangered species as iconic as the Siberian tiger. Moreover, Lumber Liquidators had to know there was some sort of quality difference in their products or spike in the amount supply received, and by not investigating they are accountable for profiting from the illegally attained supply. Lumber Liquidators needed to communicate from the inception of the contract that they would not accept any product manufactured illegally, and the fact they did not or chose not to mention it makes them liable. The point of whether the US authorities should reconsider if Russia and China take no action against the suppliers is a mute one because if you are selling the product in the US, those are the rules that matter. From an ethical perspective, the fact other parties do not uphold a certain value should be irrelevant and sends a message to the rest of the industry that you cannot form ethical decisions independently. US retailers and manufacturers should do some research and risk assessments on potential suppliers, illegal practices in the nations that those suppliers are located, and communicate very clearly to its suppliers that those actions will not be tolerated and result in rejection of product and eventual termination of the contract. Again, ignorance does not remove culpability and by enforcing these laws the US can send a message to the rest of the world that they are wrong in turning a blind eye to practices that exploit nature and its survival.

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Irina Benedyk says:

October 2, 2013 at 12:33 pm

This is not a question for US and US retailers. This is world wide problem and it should be regulated by international convention. And later countries that ratifies a Convention can issue own regulation related to this problem.
The same situation, for example, with statuettes from the tusks of an elephant – you can not legally buy them in most developed countries.
The main problem with wood – how to find illegal wood after handling on US territory. Only to move responsibility to retailers and make some regular expertise before custom clearness. Unfortunately it is very difficult for retailers (especially small) to check every pease of furniture. Only the biggest importers can do some sort of inspection throuth the supplier’s factory. So, I thing that it will not be efficient.
We are in a beginning again. It should be some international organizations which will guide the forest. And they are exist, and working hard. And we can help them by donation…

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Abhishek Sengupta says:

October 3, 2013 at 3:00 am

The illegal import of logged trees has been causing a major problem to the world economy. This issue is a never ending problem. In the past, there had been several attempts by the Government to impose restriction on the cutting of trees but successful results are yet to arrive. The Government must impose huge fines on the suppliers if they export the logged trees illegally. In the long run, if the problem persists, we would soon see the wild animals of the forest to be extinct. It’s the duty of the general mass to come forward and urge the Government to take some necessary actions so that a greener supply chain can be maintained.

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John says:

October 5, 2013 at 5:14 pm

Lumber Liquidators is a major company that deals with hardwood flooring and therefore should be well aware of the Lacey Act. I think they should be held responsible for the wood supply chain beyond assurances provided by its suppliers because they are making profits based off some supplier breaking the law and the excuse of not knowing is not a valid excuse, instead it makes Lumber Liquidators look negligent. I think that US authorities should only hold US retailers liable for foreign law violations if their violation also breaks US law. It is impossible for the US to hold accountable US retailers for all foreign laws and that is why we have world organizations to handle those type of cases. Since, Lumber Liquidators sold products that broke foreign and US law I think the US authorities should hold Lumber Liquidators accountable. Obviously, it is hard for US retailers and manufactures to inspect every little detail of the global supply chain. However, it is their responsibility to ensure that the products their selling are a hundred percent legal because they are selling the product under their name. US retailers and manufactures need to look into and assess all their suppliers and try to grasp a good understanding of the suppliers background, which includes quality and reputation. There is a risk for every supplier a US retailer and manufacture chooses to have in their global supply chain and the only way for them to create an efficient supply chain is through intensive inspections and research and trial and error.

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