UK luxury yacht firm exposed by EIA the first to be sentenced for importing Myanmar ‘blood’ teak
In a landmark case in the UK courts, a luxury yacht firm has been handed stiff penalties for using ‘blood’ teak imported from Myanmar on some of the vessels it builds.
Sunseeker International Ltd – self-styled as “the world’s leading brand for luxury motor yachts” – is based in Poole, Dorset.
Sitting at Bournemouth Crown Court on Friday, Judge Jonathan Fuller KC imposed fines and costs totalling £358,759.64 for 11 specific imports.
Following the hearing, the London-based Environmental Investigation Agency (EIA), which first exposed Sunseeker’s use of illegitimate Myanmar teak in 2018, welcomed the outcome as a landmark moment in the fight against trade in illicit trade in Burmese teak.
Teak logs stockpiled in Myanmar (c) EIA
EIA Forests Campaigner Leader Faith Doherty said: “These sentences send a clear and unequivocal message to other luxury yacht manufacturers, both in the UK and around the world, that using blood teak from conflict-torn Myanmar is totally unacceptable and will cost them dearly in the end.
“As well as actually implementing the UK Timber Regulation, the amount of process and legal time within the judiciary reflects the importance of environmental crime and the impact this criminality has.“
Sunseeker had previously pleaded guilty to three charges under the UK Timber Regulation, understood to be the first prosecution under the legislation which replaced the EU Timber Regulation following Brexit:
- failed to exercise due diligence as an operator when placing timber products on the market
- operator failed to maintain and evaluate due diligence system when placing timber or timber products on the market
- failed to comply with article 5(1) of the Commission Implementing Regulation (EU) No 607/201 relating to record keeping by operator.
The court heard that Sunseeker’s timber imports involved teak from Myanmar, wenge from Africa and European oak with a combined value of just over £60,000.
Although the firm was sentenced based on 11 specific imports, the court was told there is evidence of many more.
Transporting logs in Myanmar (c) EIA
Judge Fuller said Sunseeker was aware of impending rule changes to timber imports after Brexit which changed its status from ‘trader’ to ‘operator’ and left it in breach of regulations, calling it a “systemic failure”. He pointed out that EIA had flagged the risk of illegal teak in Sunseeker’s supply chain to the company as early as 2018.
After hearing mitigation and taking into account the firm’s early guilty pleas to the charges, the judge fined Sunseeker £240k, made a confiscation order for just under £67,000 as well as prosecution costs of £51k and a victim surcharge £190.
The firm employs 2,000 people, making it one of the largest employers in Dorset. It builds about 150 vessels a year, the most expensive being the Sunseeker 90 Ocean at £8m, and its yachts featured in the 2008 James Bond film Quantum of Solace.
Since 2020, the common position among EU member state enforcement authorities has been that it is not possible to conduct adequate due diligence on the legal original of Myanmar timber – meaning that any imports of timber from Myanmar have been in violation of the EU Timber Regulation (EUTR).
In 2018, EIA formally reported Sunseeker’s US distributors to the US Department of Justice following investigations which revealed that teak which had been traded in breach of the EUTR had entered the company’s supply chains. The US Lacey Act bans imports of goods in violation of any foreign law protecting or regulating plant species.
On 1 February 2021, the military in Myanmar seized power in a coup and the brutal ruling junta has since been seeking to help support itself financially through lucrative exports of the country’s precious teak, highly sought-after by luxury boatbuilders around the world for its water-resistant properties.
Myanmar teak seized in the Netherlands for being in breach of EU law
The regime and it cronies, including the State-controlled Myanmar Timber Enterprise which oversees all sales and exports of teak, has since been on the receiving end of sanctions from the EU, UK and US, effectively making all imports of teak from Myanmar illegal.
Sunseeker International was previously 92 per cent owned by the Chinese Dalian Wanda Group, a property and entertainment conglomerate which paid more than £320m for it in 2013. In October this year, it was announced Sunseeker had been acquired by Orienta Capital Partners and Miami investment firm Lionheart Capital.
Doherty added: “From 2014, EIA ‘s field investigations in Myanmar and subsequent complaints to the relevant enforcement authorities within the EU are highlighting how timber traders continue to break the law with no consequences.
“This case changes that and should be used as the landmark it is for actually using these laws, with the appropriate penalties this crime deserves.”
