Environment: manufacturers cannot be too careful

A US Department of Justice case against Gibson Guitar Corp. illustrates how easy it is for companies to get into trouble if they do not take environmental issues seriously.

Last year, Gibson’s facility was raided by federal agents and a batch of ebony wood that had been illegally imported from Madagascar was seized. The wood was seized under the US Lacey Act that banned importation of woods declared endangered by the government of the exporting country. Typically, the CEO of Gibson claimed that the Company had been totally abused and would fight vigorously to prove its innocence.

The Department of Justice presented evidence that an employee of the Company knew that importation of the wood in question was prohibited but that senior management had not acted on the information. With the out of court settlement the evidence has not been tested in court.

This week the Company agreed to a major series of penalties to settle the case:  a fine of $300,000, a payment of $50,000 to the National Fish and Wildlife Federation to support protection of at-risk tree species used in the musical instrument industry, and surrender of wood for which the Company had paid more than $260,000. In return the Department of Justice has agreed to stay the criminal charges. However the CEO is still not totally contrite, stating in a published statement that “Gibson was inappropriately targeted” and that “the Government used violent and hostile means with the full force of the US Government and several armed law enforcement agencies costing the tax payer millions of dollars and putting a job creating US manufacturer at risk and at a competitive disadvantage.”

Gibson manufactures guitars, pianos, jukeboxes, acoustic instruments and other music-related products under a variety of brand names.

Details of the settlement are available at http://www2.gibson.com/News-Lifestyle/Features/en-us/Gibson-Comments-on-Department-of-Justice-Settlemen.aspx

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