Harvard, IKEA, and the Battle For Romania's Forests - Atlas Obscura
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Harvard, IKEA, and the Battle For Romania’s Forests

Bribery, toxic assets, and thousands of acres of timberland.

(Photo: two_p_since1986/CC BY-SA 2.0)

When IKEA bought thousands of acres of forest land in Romania in 2015 from investment vehicles controlled by Harvard University, the company said the purchase was made with an eye toward developing a renewable source of timber for its products.

The land, however, had long been a source of controversy for Harvard, after bribery allegations against one of its former contractors there. And some of the forest plots might not be in IKEA’s hands for long: the Romanian government has challenged whether some of them are actually government property, illegally reclassified during political upheaval in the 1990s.

At least one property deed has already been invalidated by a Romanian judge, while several more are being scrutinized, according to a long investigation into the forests by the Organized Crime and Corruption Reporting Project.

The investigation details a complicated history for Harvard and IKEA in the country, involving toxic assets, thousands of acres of forests, and at least one corrupt former Harvard employee. Investment vehicles for Harvard, which has a $37 billion endowment, began buying up forests in the country in 1997, eventually acquiring at least 33,600 acres.

The land was put up for sale in 2013, shortly before a former contractor at a Harvard-owned management company in Romania was convicted of bribery. Romanian prosecutors said the contractor had secured around $1.3 million in bribes relating to the sale of timberland for artificially high prices.

“I’m not an angel, but I know the law and what I can do and how much I can bend it,” the contractor, Dragos Lipan Secu, told Bloomberg last year.

In 2015, Harvard finally sold most of their forest holdings to IKEA for around $62 million, a loss of tens of millions of dollars compared to their original investment of over $100 million, according to OCCRP. The initial 2013 price tag on the land was $116 million.

At the time of the purchase, IKEA said it hoped the Romanian forests would become a model of sorts for the company. The path forward for IKEA, which uses one percent of the world’s commercially available wood supply, will be long, according to OCCRP, with disputes in Romanian courts likely to drag on for years.

“Through this acquisition Romania becomes the first country where the Ikea Group will manage its own forest operations and we aim to set an example for sustainable forest management,” Frederik de Jong, Chairman of Ikea Resource Independence Investments SRL, said in a statement then.