Illegal wood trafficking allows other crimes to flourish, including deforestation, labor exploitation, land invasions, tax evasion, document forgery and state corruption.
Illegal wood trafficking is the most profitable crime against natural resources and the world’s third most important crime, according to a report titled “Transnational crime and the developing world,” published in March 2017 by Global Financial Integrity, a US-based organization that investigates illicit financial flows.
The report estimates that, globally, this transnational crime generates US$52 billion to US$157 billion a year. The United Nations Environment Program (UNEP) estimates that 30 percent of the wood sold in the world has been illegally obtained.
According to Insight Crime, a research center on organized crime, most illegal timber logging occurs in the Amazon rainforest. Illegal timber logging, illegal mining and drug trafficking are the most investigated crimes in Latin America.
Latin American forests are the second most vulnerable in the world to illegal timber logging, after Asian forests, says UNEP. In 2014 alone, illegal timber exports from South America — for both raw wood and sawn timber — totaled an average of US$387 million, according to the International Union of Forest Research Organizations (IUFRO).
Rolando Navarro, a researcher at the Center for International Environmental Law (CIEL), who has closely studied the illegal timber trade in South America, told Latinamerica Press that “over 75 percent of the wood sold in South America both domestically and for export, is illegally obtained.”
A massive amount of wood is illegally traded in Latin America. In late 2012, INTERPOL confiscated over 50,000 m³ of illegally obtained timber with an estimated value of US$8 million as a result of an operation named Project LEAF (Law Enforcement Assistance for Forests), in which law enforcement agencies from 12 Latin American countries worked together to crack down on illegal timber logging.
Illegal wood trafficking is a complex type of organized crime and it leads to a long spiral of inter-related crimes like a tree’s annual growth rings.
Alicia Abanto, Peruvian Human Rights Ombudsman’s Office representative for the Environment, Public Services and Indigenous People, told Latinamerica Press that wood trafficking is linked to a series of crimes such as deforestation, labor exploitation, land invasions, tax evasion, document forgery, state corruption and even the murder of community leaders who are fighting to preserve forests.
“These crimes also occur in other Latin American countries and the Caribbean. However, they are more common in the Amazon rainforest, because it’s a much larger rainforest,” says Abanto. “The illegal timber trade often begins with indigenous or peasant communities that are hired by a timber logging company. Very often they are unaware of the fact that what they’re doing is illegal and companies take advantage of that.”
A multi-million dollar business
Cost-benefit is the key reason why timber logging and the illegal timber trade is so profitable. Let’s take a look at the economic aspect of this illegal activity, beginning with the timber production cycle and ending with the export of timber products: a lumberjack earns an average of US$70 per cubic meter of Peruvian mahogany. An exporter, however, earns US$1,804 per cubic foot (0.028 m³) and importers earn up to US$3,170 per cubic meter, according to Insight Crime.
“The illegal timber trade involves tax evasion,” says Abanto.
Navarro adds that the timber species most widely sold in Peru are usually the most sought after species by the illegal timber trade in South America. The absence of information on the circuit of illegal timber trade is one of the main obstacles to tackling this crime.
The most widely sold species include the following: cumala (Virola sp.), tornillo (Cedrelinga catenaeformis), capinuri or chimicua (Clarisia biflora), lupuna (Chorisia integrifolia), capirona (Calycophyllum spruceanum), shihuahuaco (Coumarouna odorata), cachimbo (Cariniana domesticata), copaiba (Copaifera reticulata); cumala (Virola sebifera) and catahua (Hura crepitans).
The illegal timber trade also has a huge impact on Central American and Caribbean countries.
A report titled “A spatio-temporal analysis of forest loss related to cocaine trafficking in Central America,” published in May 2017 by scientific journal IOPscience, refers about the impact of cocaine trafficking on deforestation in Central America. According to the report, as a result of the cocaine trade, Guatemala, Honduras and Nicaragua have lost annually between 15 percent and 30 percent of their forestland over the past decade. Forests in Costa Rica, El Salvador, Jamaica, Panama and the Dominican Republic are also under threat from the cocaine trade.
The Environmental Investigation Agency (EIA), a US-based organization that monitors the illegal timber trade, shared information with Latinamerica Press about the scale of the illegal timber trade in Latin America.
According to Julia Urrunaga, director of the EIA’s Peru Programs, Mexico is one of the countries that purchase the greatest volume of wood “that has a high risk of being illegally obtained as part of the value chain.” Almost all of the wood imported by Mexico comes from Brazil and Peru.
Figures published by the IUFRO based on World Bank data for 2006, show that percentage of wood sold in each Latin American country is illegally obtained: Bolivia (80 percent), the Brazilian Amazon rainforest (20 percent-47 percent), Colombia (42 percent), and Ecuador (70 percent).
Navarro points out that the 80 percent figure for Peru has increased since 2006. “I would dare to say that more than 90 percent of the timber sold in Peru has been illegally obtained,” said the CIEL researcher.
Illegal “timber laundering”
The EIA’s latest report titled “Moment of Truth: Promise or Peril for the Amazon as Peru Confronts its Illegal Timber Trade,” published in January 2018, sheds light on the practice known as “timber washing,” meaning the sale of illegally obtained timber with fake permits.
The report solely focuses on Peruvian timber exports that left the country in 2015 from Callao, the country’s main port, and concludes that 17 percent of the points where timber is logged are illegal; 16 percent are legal and it is unclear whether the remaining 67 percent are legal or illegal, although evidence suggests they are most likely illegal.
The investigation also established that Peruvian timber — including timber that has been legally obtained — is exported to China, the Dominican Republic, the United States, Mexico, France, Cuba, South Korea, Belgium, Puerto Rico, Australia, Taiwan, Spain, Chile, Ecuador, Uruguay, Canada, Israel and Japan.
Timber washing in Peru and other Latinamerican countries occurs when criminal organizations provide the authorities with lists of trees to be logged that don’t actually exist. Thus, the authorities grant permits to log specimens that only exist on paper, explains a 2012 investigation published by the EIA, “The Laundering Machine. How Fraud and Corruption in Peru’s Concession System are Destroying the Future of Its Forests,” which explains how the illegal origin of much of Peru’s timber is covered up.
“Backed by these volumes of imaginary trees, the corresponding official documents are sold in the black market and used to launder wood extracted illegally from elsewhere — national parks, indigenous territories, other public lands,” reads the report.
The policies Latin American states ought to take in order to crack down on illegal timber logging, according to Abanto, should include “the promotion of collective land titles for indigenous lands in order to stop land trafficking, a practice that is often linked to illegal timber logging.”
In the case of Peru, one of the countries in Latin America where the problem is most serious, “the state should abide by the forestry agreement included in the Free Trade Agreement with the United States to ensure that all the timber exported to the United States has been legally obtained,” says Abanto.
The US government even sent a letter on Feb. 26 to Peruvian Minister for Trade and Tourism, Eduardo Ferreyros, to verify the origin of a timber cargo sent by three companies that exported wood to the United States in 2017.
It’s not the first time this has happened, says Abanto. Official letters sent by the US authorities were prompted by the dubious track record of Peruvian timber companies that have been linked to illegal timber exports. The most widely publicized case was the search warrant issued for the Yacu Kallpa ship in 2015, as part of Operación Amazonas (Operation Amazon). After the raid, the police established that over 91 percent of the ship’s cargo was illegal.
According to Navarro, the countries with the least stringent regulations on the origin of timber imports are China, Mexico and the Dominican Republic, the three countries that Peru exports most of its timber to.
“We require regional coordination between countries in order to effectively tackle timber trafficking. This can’t be achieved if there is governmental weakness and no action is taken to stop the mafias,” said Abanto.