State of the Rainforest 2014

Forest crime By Hanne Jørstad, based on the UNEP-INTERPOL report: “The Environmental Crime Crisis”; Editors Christian Nellemann, Rune Henriksen, Patricia Raxter, Neville Ash and Elizabeth Mrema

hacking government websites to obtain permits for higher volumes or transport; or by establishing roads, ranches, palm oil plantations or forest plantations, and mix illegal timber with the legal timber during transport or in mills. 58 Laundering illegal timber and wood products – the process of transforming illegally logged timber into ostensibly legal logs – is the most common way that illegal logs are transported, processed, exported and manufactured. 59 By doing so, timber or wood products avoid certification schemes and other established efforts to fight illegal imports. Some plantations are established simply to cover up for logging, and are declared bankrupt after clearing. This method gives companies access to governmental subsidies, legal permits to sell timber and opportunities for extensive tax fraud. In Indonesia the amount of timber logged through plantations increased from 3.7 to 22.3 million m 3 from 2000 to 2008. The fact that only a fraction of these established plantations are operational indicates large-scale laundering of illegally logged wood. 60 While the focus on illegal tropical wood has primarily been on roundwood, sawn wood and furniture products, findings reveal that that the largest share enters countries as paper, pulp or wood chips. An estimate suggests that between 62–86% of all illegal tropical wood imported to the US and EU comes in these forms. 61 Amongst all wood products, it is hardest to determine origin – and hence detect if it’s from an illegal source – of paper and pulp. While the origin of roundwood is fairly easy to detect, it takes scientific analysis of fiber samples to identify the source of pulp and paper, creating favourable conditions for illegalities with high profits and low risks. 62 A paper from an EU-based producer may very well derive from a conflict zone in Africa. 63 Forest crime in Africa, especially the illegal and unregulated charcoal trade, has close ties to organized crime, militias and terrorist groups. 64 A growing demand for wood charcoal due to a rapidly growing urban population, and the absence of regulation is an open invitation for non-state armed groups to take control of the trade. An estimate suggests that the illegal charcoal trade alone causes a loss of USD 1.9 billion in revenues to African countries annually. 65 Armed groups across Africa create income through controlling and claiming taxes along roads, ports, strategic trade points and border crossings. At a roadblock in the Lower Juba Region, Al Shabaab has been able to make up to USD 8–18 million annually from taxation of charcoal trucks. 66 The illegal trade and export of charcoal from Somalia has an estimated value of between USD 360 and 384 million per year. 67 Militants in DRC are estimated to make USD 14–50 million annually on road taxes. 68 For African countries with ongoing conflict, including Mali, the Central African Republic, DR Congo, Sudan and Somalia,

The illegal trade in natural resources is a growing global concern that threatens the environment, human well-being, security and sustainable development. A recent report by UNEP estimates that the monetary value of all transnational organized environmental crime is between USD 70 and 213 billion annually. 48 The higher figure is nearly double that of the global Official Development Assistance of about USD 135 billion. Environmental crime includes illegal logging, poaching and trafficking of animals, illegal fisheries, illegal mining and illegal dumping of toxic waste. Out of these five key areas within environmental crime, forest crime (including illegal logging and processing) has by far the largest losses in revenue. The annual value of forest crime is an estimated USD 30–100 billion, equivalent to 10–30% of the total value of the global timber trade. 49 Forest crime impacts negatively on the social security, environmental resources and economy of affected countries. The illegal trade in timber per definition operates outside of government regulations andmanagement, thusdepriving thenational economyof significant revenues. 50 Tanzania reportedly lost USD 58 million in 2004–2005 due to unpaid timber royalties. 51 Criminal organisations undermine the rule of law, weaken government enforcement functions and spread corruption within the military and amongst politicians. 52 Deforestation deprives local communities of their resource base, especially indigenous peoples who solely depend on forests for their livelihood. 53 Local communities are further harmed by criminal groups through corruption of officials, fraud, money laundering, extortion, threats of violence and murder. 54 The majority of illegal logging takes place in the tropical forest of the Amazon, Central Africa and Southeast Asia. Recent studies reveal that illegal logging accounts for as much as 50–90%of the total production from some of the key tropical forest countries. 55 The US, EU, China and Japan receive over 80% of all illegally logged wood globally. 56 The four most common forms of illegal trade of forest products are: illegal exploitation of high-valued wood species such as rosewood and mahogany; illegal logging of timber for sawn wood, building materials and furniture; illegal logging and laundering of wood through plantation and agricultural front companies to supply pulp for the paper industry; and utilisation of the unregulated wood- fuel and charcoal trade to conceal illegal logging in and outside protected areas, and conduct tax evasion and fraud. 57 Forest crimes are conducted in numerous ways. Primary methods of illegal logging and timber laundering include the falsi cation of logging permits; bribing forest officials, police and the military in order to obtain logging permits; logging beyond concessions;

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STATE OF THE RAINFOREST 2014