From Illegal Logging to Timber Laundering: Organized Crime Trade Worth over US$30 Billion Responsible for up to 90% of Tropical Deforestation
Between 50 to 90 per cent of logging in key tropical countries of theAmazon basin, Central Africa and South East Asia is being carried out byorganized crime threatening efforts to combat climate change, deforestation,conserve wildlife and eradicate poverty.
Globally, illegal logging now accountsfor between 15 and 30 per cent of the overall trade, according to a newreport from the UN Environment Programme (UNEP) and INTERPOL.
Forests worldwide bind Carbon Dioxideand store it – known as Green Carbon – and help mitigate climatechange. However deforestation, largely of tropical rainforests, is responsiblefor an estimated 17 per cent of all man-made emissions – 50 per cent morethan that from ships, aviation and land transport combined.
The Rapid Response Report entitled“Green Carbon: Black Trade” says that the illegal trade, worth betweenUS$30-100 billion annually, hampers the Reducing Emissions from Deforestationand forest Degradation (REDD) initiative – one of the principal toolsfor catalyzing positive environmental change, sustainable development,job creation and reducing emissions.
With the increase in organizedcriminal activity, INTERPOL has also noted associated crimes such as murder,violence and atrocities against indigenous forest dwellers.
The report concludes that withoutan internationally coordinated enforcement effort, illegal loggers andcartels will continue to shift operations from one haven to another topursue their profitable trade at the expense of the environment, localeconomies and even the lives of indigenous peoples.
The report was released at the World Forest conference in Rome at an eventwith UN REDD, a coalition of UNEP, the UN Development Programme (UNDP)and the Food and Agriculture Organization (FAO).
REDD and the expanded REDD+ initiativeprovide national and international legal frameworks, including agreements,conventions and certification schemes, to reduce illegal logging and supportsustainable practices. The report said that if REDD+ is to be sustainableover the long term, payments to communities for their conservation effortsneed to be higher than the returns from activities that lead to environmentaldegradation.
“Funding to better manage forestsrepresents an enormous opportunity to not only address climate change butto reduce rates of deforestation, improve water supplies, cut soil erosionand generate decent green jobs in natural resource management,” said AchimSteiner, UN Under-Secretary General and UNEP Executive Director.
“Illegal logging can however underminethis effort, robbing countries and communities of a sustainable future,if the unlawful activities are more profitable than the lawful ones underREDD+,” he added.
According to the report, criminalgroups are combining old-fashioned tactics such as bribes with high-techmethods such as hacking government websites. Illegal operations are alsobecoming more sophisticated as loggers and dealers shift activities betweenregions and countries to avoid local and international policing efforts.
While significant progress hasbeen made through programmes such as REDD+, most efforts are targeted atencouraging and creating incentives for legal trade – not combatting crime.Unfortunately, current economic incentives are rarely effective in reducingcollusive corruption and illegal logging activities as there is littlerisk of being apprehended.
“The threat posed to the environmentby transnational organized crime requires a strong, effective and innovativeinternational law enforcement response to protect these natural resourcesand combat the corruption and violence tied to this type of crime, whichcan also affect a country’s stability and security,” said Ronald K. Noble,Secretary General of INTERPOL.
Estimates in the report that showthe scale of the problem is much wider than previously thought come fromimproved knowledge of methods employed to launder illegal timber.
The report describes 30 ingeniousways of procuring and laundering illegal timber. Primary methods includefalsification of logging permits, bribes to obtain permits (up to US$50,000for a single permit in some countries), logging beyond concessions andhacking government websites to obtain or change electronic permits.
One new way to launder millionsof cubic metres of wood is to mix it with legally cut timber and processit and launder it through saw, paper, pulp and board mills. Another bigscam involves selling timber and wood originating from wild forests asplantation timber – often with government subsidies for plantations.
Specific examples of illegal activityinclude the following:
· Brazilianauthorities in 2008 said that hackers working for illegal logging cartelsin 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 andsome 200 individuals of involvement, and sued these companies for almostUS$1.1 billion.
· In2009 another Brazilian federal prosecutor investigated a scam allegedlyinvolving some 3,000 companies in the timber sector, which illegal timber“eco-certified” and exported to the US, EU and Asia.
· InIndonesia, the amount of logs allegedly produced through plantations increasedfrom 3.7 million cubic metres in 2000 to over 22 million in 2008. UN Officeon Drugs and Crime (UNODC) estimates suggested that less than half of theplantations actually existed, reflecting a massive organized launderingoperation.
· InKalimantan, Indonesia, a bribe for a logging permit of around 20 km2costs US$ 25-30,000. Import-export discrepancies suggest as much as a threefolddifference in claims between officially exported and actually importedtimber between Kalimantan and Malaysia – suggesting massive tax fraud.
· Inthe Democratic Republic of Congo (DRC), over 200 rangers in the VirungaNational Park, famous for its gorillas, have been killed over the lastdecade defending the park boundaries against militias operating a charcoaltrade estimated at over US$28 million annually.
· InUganda, the report describes incidences of military personnel escortingloggers through border check points from the DRC to bring high-value illegaltimber onto local markets for sale.
A much-heralded apparent declinein illegal logging in the 2000s was in fact a shift from obvious activityto more advanced laundering operations by organized criminals, the reportadds. In many cases, a five–fold increase in timber sold as “plantationwood” occurred in the years following law enforcement crack-downs.
In several instances, illegal timbertransported through border crossings and harbours accounted for up to 30times the official volumes. However, this laundering and smuggling of timberwill enable law enforcement to act more firmly, as tax fraud is more strictlyenforced than environmental laws that are often weak.
Much of the laundering is madepossible by large flows of investment funds based in the EU, US and Asiainto companies involved in the crime, including in establishing plantationoperations 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 availablethrough available legal pursuits. This seriously undermines much neededinvestments in sustainable forest operations and alternative livelihoodincentives.
INTERPOL and UNEP, through itsGRID Arendal centre in Norway, have established a pilot-project calledLEAF (Law Enforcement Assistance to Forests) funded by the Norwegian Governmentagency NORAD to develop an international system to combat organized crimein close collaboration with key partners.
To complement and expand on suchefforts, the report makes the following key recommendations:
· Strengthenand consider funding opportunities for a fully fledged LEAF programme underINTERPOL and UNEP, in close collaboration with REDD+, the InternationalConsortium on Combating Wildlife Crime (ICCWC) and all relevant partners.
· Increasenational investigative and operational capacities through training on transnationalenvironmental crime.
· Centralizeall land-clearing permits to one national register, which will greatlyfacilitate transparency and investigation.
· Classifygeographic regions based on suspected degree of illegality and restrictflows of timber and wood products from such areas including shipping.
· Encouragetax fraud investigations with a particular focus on plantations and mills.
· Reduceinvestment attractiveness in forests enterprises active in regions identifiedas areas of illegal logging by implementing an international INTERPOL-basedrating system of companies extracting, operating in or buying from regionswith a high degree of illegal activity.
The report “Green carbon: Blacktrade“ by UNEP and INTERPOL is available at: www.grida.no and www.unep.org
High resolution graphics from thereport for free public use in media are also available for download at: www.grida.no