Illegal Logging Valued At US $30-100 Billion
By Marianne de Nazareth
28 September, 2012
Living in India , we are faced with reading about scams being uncovered on a daily basis. Massive scams like ‘Coalgate' to scams involving crores, even with just re-asphalting our roads in the city of Bangalore . Crime and corruption seems to have pervaded the very fabric of our society and administration in India and shame faced Indians settled across the globe share stories which horrify them beyond belief, like http://www.stuff.co.nz/business/industries/7734069/Go-faster-money-key-to-trade-with-India appearing in their press.
Inspite of reading about these scams,with climate change staring in the worlds face, the latest ‘scam' revealed by UNEP, that there is organized crime trade worth over US$30 Billion which is responsible for up to 90% of tropical deforestation, still has the power to shock. From Illegal logging to timber laundering, the UNEP report spotlights almost 30 methods of procuring and laundering illegal timber compromising climate mitigation and sustainable development efforts
The official value of the global wood trade has been estimated at around US $327 billion dollars (FAO, 2007; UNEP 2009). If illegal logging consists of as much as 10-30 per cent of the total logging worldwide, with some estimates as high as 20-50 per cent when the laundering of illegal wood is included, then the value of it is at least US $30-100 billion (NCB-Rome 2008; INTERPOL/World Bank 2009).
Between 50 to 90 per cent of logging in key tropical countries of the Amazon basin, Central Africa and South East Asia is being carried out by organized groups, threatening efforts to combat climate change, deforestation, conserve wildlife and eradicate poverty. Globally, illegal logging now accounts for between 15 and 30 per cent of the overall trade, according to a new report from the UN Environment Programme (UNEP) and INTERPOL.
To understand why the issue is such a huge problem,we must understand that forests worldwide bind carbon dioxide proiduced by humans and stores it. This Green Carbon helps to mitigate climate change. However deforestation, largely of tropical rainforests, is responsible for an estimated 17 per cent of all man-made emissions – 50 per cent more than that from ships, aviation and land transport combined.
The rapid response report entitled “Green Carbon: Black Trade” by UNEP, says that the illegal trade, worth between US$30-100 billion annually. This hampers the reducing emissions from deforestation and forest degradation (REDD) initiative, one of the principal tools for catalyzing positive environmental change, sustainable development, job creation and reducing emissions.
With the increase in organized criminal activity, INTERPOL has also noted associated crimes such as murder, violence and atrocities against indigenous forest dwellers and I would like to add - journalists who report it. The report concludes that without an internationally coordinated enforcement effort, illegal loggers and cartels will continue to shift operations from one haven to another to pursue their profitable trade at the expense of the environment, local economies and even the lives of indigenous peoples.
The report was released at the World Forest conference in Rome at an event with UN REDD, a coalition of UNEP, the UN Development Programme (UNDP) and the Food and Agriculture Organization (FAO). REDD and the expanded REDD+ initiative provide national and international legal frameworks, including agreements, conventions and certification schemes, to reduce illegal logging and support sustainable practices. The report said that if REDD+ is to be sustainable over the long term, payments to communities for their conservation efforts need to be higher than the returns from activities that lead to environmental degradation.
“Funding to better manage forests represents an enormous opportunity to not only address climate change but to reduce rates of deforestation, improve water supplies, cut soil erosion and generate decent green jobs in natural resource management,” said Achim Steiner, UN Under-Secretary General and UNEP Executive Director. “Illegal logging can however undermine this effort, robbing countries and communities of a sustainable future, if the unlawful activities are more profitable than the lawful ones under REDD+,” he added.
According to the report, criminal groups are combining old-fashioned tactics such as bribes with high-tech methods such as hacking government websites. Illegal operations are also becoming more sophisticated as loggers and dealers shift activities between regions and countries to avoid local and international policing efforts.
“The threat posed to the environment by transnational organized crime requires a strong, effective and innovative international law enforcement response to protect these natural resources and combat the corruption and violence tied to this type of crime, which can also affect a country's stability and security,” said Ronald K. Noble, Secretary General of INTERPOL.
Estimates in the report that show the scale of the problem is much wider than previously thought come from improved knowledge of methods employed to launder illegal timber. The report describes 30 ingenious ways of procuring and laundering illegal timber. Primary methods include falsification of logging permits, bribes to obtain permits (up to US$50,000 for a single permit in some countries), logging beyond concessions and hacking government websites to obtain or change electronic permits.
One new way to launder millions of cubic metres of wood is to mix it with legally cut timber and process it and launder it through saw, paper, pulp and board mills. Another big scam involves selling timber and wood originating from wild forests as plantation timber – often with government subsidies for plantations.
Specific examples of illegal activity include the following:
• Brazilian authorities in 2008 said that hackers working for illegal logging cartels in the Brazilian state of Pará gained access to transport and logging permits, allowing the theft of an estimated 1.7 million cubic metres of forest. A Brazilian federal prosecutor accused 107 companies, 30 ring leaders and some 200 individuals of involvement, and sued these companies for almost US$1.1 billion.
• In 2009 another Brazilian federal prosecutor investigated a scam allegedly involving some 3,000 companies in the timber sector, which illegal timber “eco-certified” and exported to the US, EU and Asia.
• In Indonesia , the amount of logs allegedly produced through plantations increased from 3.7 million cubic metres in 2000 to over 22 million in 2008. UN Office on Drugs and Crime (UNODC) estimates suggested that less than half of the plantations actually existed, reflecting a massive organized laundering operation.
• In Kalimantan , Indonesia , a bribe for a logging permit of around 20 km2 costs US$ 25-30,000. Import-export discrepancies suggest as much as a threefold difference in claims between officially exported and actually imported timber between Kalimantan and Malaysia – suggesting massive tax fraud.
• In the Democratic Republic of Congo (DRC), over 200 rangers in the Virunga National Park , famous for its gorillas, have been killed over the last decade defending the park boundaries against militias operating a charcoal trade estimated at over US$28 million annually.
• In Uganda , the report describes incidences of military personnel escorting loggers through border check points from the DRC to bring high-value illegal timber onto local markets for sale.
A much-heralded apparent decline in illegal logging in the 2000s was in fact a shift from obvious activity to more advanced laundering operations by organized criminals, the report adds. In many cases, a five–fold increase in timber sold as “plantation wood” occurred in the years following law enforcement crack-downs. In several instances, illegal timber transported through border crossings and harbours accounted for up to 30 times the official volumes. However, this laundering and smuggling of timber will enable law enforcement to act more firmly, as tax fraud is more strictly enforced than environmental laws that are often weak.
Much of the laundering is made possible by large flows of investment funds based in the EU, US and Asia into companies involved in the crime, including in establishing plantation operations with the sole purpose of laundering illegally cut timber. In many cases, corrupt officials, local military and police emerge with revenues up to ten times that available through available legal pursuits. This seriously undermines much needed investments in sustainable forest operations and alternative livelihood incentives.
INTERPOL and UNEP, through its GRID Arendal centre in Norway, have established a pilot-project called LEAF (Law Enforcement Assistance to Forests) funded by the Norwegian Government agency NORAD to develop an international system to combat organized crime in close collaboration with key partners.
To complement and expand on such efforts, the UNEP report makes the following key recommendations:
• Strengthen and consider funding opportunities for a fully fledged LEAF programme under INTERPOL and UNEP, in close collaboration with REDD+, the International Consortium on Combating Wildlife Crime (ICCWC) and all relevant partners.
• Increase national investigative and operational capacities through training on transnational environmental crime.
• Centralize all land-clearing permits to one national register, which will greatly facilitate transparency and investigation.
• Classify geographic regions based on suspected degree of illegality and restrict flows of timber and wood products from such areas including shipping.
• Encourage tax fraud investigations with a particular focus on plantations and mills.
• Reduce investment attractiveness in forests enterprises active in regions identified as areas of illegal logging by implementing an international INTERPOL-based rating system of companies extracting, operating in or buying from regions with a high degree of illegal activity.
Marianne de Nazareth is a freelance environment journalist and adjunct faculty in St. Joseph 's PG College, Bangalore
Comments are moderated