Tag Archives: illegal logging

Supply Chains Live: combating deforestation

366 companies, worth $2.9 trillion, have committed to eliminating deforestation from their supply chains, according to the organization Supply Change. Groups such as the Tropical Forest Alliance 2020, the Consumer Goods Forum and Banking Environment Initiative aim to help them achieve these goals.  Around 70 percent of the world’s deforestation still occurs as a result of production of palm oil, soy, beef, cocoa and other agricultural commodities. These are complex supply chains.  A global company like Cargill, for example, sources tropical palm, soy and cocoa from almost 2,000 mills and silos, relying on hundreds of thousands of farmers. Also, many products are traded on spot markets, so supply chains can change on a daily basis. Such scale and complexity make it difficult for global corporations to trace individual suppliers and root out bad actors from supply chains.

Global Forest Watch (GFW), a WRI-convened partnership that uses satellites and algorithms to track tree cover loss in near-real time, is one example. Any individual with a cell phone and internet connection can now check if an area of forest as small as a soccer penalty box was cleared anywhere in the world since 2001. GFW is already working with companies like Mars, Unilever, Cargill and Mondelēz in order to assess deforestation risks in an area of land the size of Mexico.

Other companies are also employing technological advances to track and reduce deforestation. Walmart, Carrefour and McDonalds have been working together with their main beef suppliers to map forests around farms in the Amazon in order to identify risks and implement and monitor changes. Banco do Brasil and Rabobank are mapping the locations of their clients with a mobile-based application in order to comply with local legal requirements and corporate commitments. And Trase, a web tool, publicizes companies’ soy-sourcing areas by analyzing enormous amounts of available datasets, exposing the deforestation risks in those supply chains…

[C]ompanies need to incorporate the issue into their core business strategies by monitoring deforestation consistently – the same way they would track stock markets.

With those challenges in mind, WRI and a partnership of major traders, retailers, food processors, financial institutions and NGOs are building the go-to global decision-support system for monitoring and managing land-related sustainability performance, with a focus on deforestation commitments. Early partners include Bunge, Cargill, Walmart, Carrefour, Mars, Mondelēz, the Inter-American Investment Corporation, the Nature Conservancy, Rainforest Alliance and more.  Using the platform, a company will be able to plot the location of thousands of mills, farms or municipalities; access alerts and dashboards to track issues such as tree cover loss and fires occurring in those areas; and then take action. Similarly, a bank will be able to map the evolution of deforestation risk across its whole portfolio. This is information that investors are increasingly demanding.

Excerpt from Save the Forests? There’s Now an App for That, World Resources Institute, Jan. 18, 2017

How to Discover an Illegal Logger

Image from http://blog.globalforestwatch.org/2016/02/how-did-the-worlds-forests-change-last-week-new-alerts-show-us/?utm_campaign=glad%20alerts&utm_source=blog&utm_medium=caption&utm_content=gif

Tropical forests nearly the size of India are set to be destroyed by 2050 if current trends continue causing species loss, displacement and a major increase in climate-changing greenhouse gas emissions.  Prior to the launch of the Global Land Analysis and Discovery (GLAD) alerts, researchers would have to manually track images of logging in specific areas.

The new process, developed by scientists at the University of Maryland and Google, uses an algorithm to analyze weekly updates of satellite images and sends automatic notifications about new logging activity.”This is a game changer,” said Matt Finer from the Amazon Conservation Association, an environmental group.

His organization tracks illegal logging in Peru, sending images of deforestation to policymakers, environmentalists and government officials to try and protect the Amazon rainforest.  In the past, he would rely on tips from local people about encroachment by loggers, then look at older satellite images to try and corroborate the claims.

“With this new data we can focus on getting actionable information to policy makers,” Finer told the Thomson Reuters Foundation.  “We have seen how powerful these images can be,” he said, citing a case where his group brought pictures of illegal gold miners cutting down trees to the Peruvian government, who then removed the miners.

Excerpt from  CHRIS ARSENAULT, New satellite program aims to cut down illegal logging in real time, Reuters, Mar. 2, 2016

How Not to Stop Illegal Logging

Knock-knock and nobody there. image from http://ec.europa.eu/environment/eutr2013/index_en.htm

The European Union (EU) adopted in 2010 Regulation (EU) No 995/2010 laying down the obligations of operators who place timber and timber products on the market (the Timber Regulation,, as part of the implementation of the Action Plan on Forest Law Enforcement, Governance and Trade……[The EU adopted the Regulation because] llegal logging is a pervasive problem of major international concern. It has a devastating impact on some of the world’s most valuable remaining forests as well as on the people who live in them and who rely on the resources that forests provide. It contributes to tropical deforestation and forest degradation, which may be responsible for 7 to 14%3 of total CO2 emissions from human activities; it threatens biodiversity and undermines sustainable forest management and has a negative impact on poverty reduction…..

The following major challenges to the effective application of the Timber Regulation have been identified in the evaluation process: insufficient human and financial resources allocated to the [authorities dealing with implementation], varying types and level of sanctions across EU states and a lack of uniform understanding and application of the Regulation throughout the EU. Those challenges have translated into uneven enforcement, which creates a non-level playing field for economic operators….

In order to address the shortcomings identified, EU states should significantly step up their implementation and enforcement efforts. The current level of technical capacity and resources (both human and financial) allocated to the [authorities dealing with implementation] does not match with the needs and must be reinforced in most of the Member States with the aim to increase the number and quality of compliance checks.

Excerpts from REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Regulation EU/995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market (the EU Timber Regulation, Feb. 18, 2016,  COM(2016) 74 final

 

Deforestation in Cambodia: rubber barons and their bankers

cambodia illegal logging--Illegal logging in the Cardamom Mountain, Koh Kong Province, Cambodia, 2007 Image from wikipedia

Along Route 7 in Cambodia’s remote north, dozens of small tractors known as “iron buffaloes” are plying a dilapidated piece of highway. Under cover of darkness, they transport freshly cut timber into nearby sawmills. The drivers wear masks, their tractors fitted with just one dim lamp at the front. Each carries between three and six logs which locals say were felled illegally on or near the Dong Nai rubber plantation, owned by Vietnam Rubber Group (VRG).

Illegal logging and land-grabbing have long been problems in Cambodia. A new report entitled “Rubber Barons” by Global Witness, a London-based environmental watchdog, has highlighted the issue once again. Dong Nai features prominently in the report, which claims that luxury timbers like rosewood, much in demand for furniture in China and guitars in the West, were culled as a 3,000-hectare (7,400-acre) section of forest was illegally cleared.

Global Witness says that local and foreign companies have amassed more than 3.7m hectares of land in Cambodia and Laos since 2000, as governments have handed out huge land concessions, many in opaque circumstances. Two-fifths of this was for rubber plantations, dominated by state companies from Vietnam, the world’s third-largest rubber producer.

The report claims that VRG and another Vietnamese company, HAGL, are among the biggest land-grabbers, and have been logging illegally in both Cambodia and Laos. It says that, through Vietnam-based funds, the two companies have received money from Deutsche Bank, while HAGL also has investment from the IFC, the private-sector arm of the World Bank. The two Vietnamese companies have denied any wrongdoing. Deutsche Bank and the IFC say they are studying the findings.

The report says that the two companies have failed to consult local communities or pay them compensation for land they formerly used. The companies routinely use armed security forces to guard plantations. Large areas of supposedly protected intact forest have been cleared, in violation of forest-protection laws and “apparently in collusion with Cambodia’s corrupt elite”.

Global Witness is urging authorities in Cambodia and Laos to revoke the two companies’ land concessions, which cover 200,000 hectares and are held through a network of subsidiaries. It thinks both companies should be prosecuted.

Logging in South-East Asia: Rubber barons, Economist, May 18, 2013

See also Bankers with Chainsaws

 

Bankers with Chainsaws; how logging corporations cheat through the HSBC

Some big banks do little more than pay lip service to environmental issues. HSBC likes to think of itself as different. It has signed up to many initiatives, including the Equator Principles, a set of social and environmental standards launched in 2003 for project financiers….

Sarawak (Malaysia) has lost more than 90% of its “primary” forests to logging and has the fastest rate of deforestation in Asia. Sarawak has only 0.5% of the world’s tropical forest but accounted for 25% of tropical-log exports in 2010. As timber stocks have become depleted, the loggers have moved into the palm-oil business, clearing peat-swamp forests to make way for plantations. The deforestation has been accompanied by abuses against indigenous groups, including harassment and illegal evictions. Allegations of corruption and abuse of public office dog Abdul Taib Mahmud, Sarawak’s chief minister, finance minister and planning-and-resources minister, who is believed to have firm control over the granting of logging licences. Mr Taib has long denied being corrupt.

Global Witness, a campaigning group, has analysed the publicly available financial records of seven of Sarawak’s largest logging and plantation companies.  [Report in PDF] It identified loans and other financial services from HSBC that it estimates have generated at least $116m in interest payments and $13.6m in fees for the bank since 1977. Although lending has declined over the past decade, HSBC continues to list Sarawak loggers among its clients, in apparent violation of its own Forest Land and Forest Products Sector Policy.

On paper HSBC’s forest policy gets high marks, including from BankTrack, a network of NGOs that monitors lenders. When it was drawn up in 2004, the policy required clients to have 70% of their activities certified by the Forest Stewardship Council (FSC), or equivalent, by 2009, with evidence that the remainder was legal. (The FSC is a global non-profit body that sets standards and does independent certification for logging and forest products.)

Not only did the seven firms analysed fail to meet that deadline, but none has any FSC-certified operations today. Ta Ann Holdings, for example, listed HSBC as a “principal banker” in its 2011 annual report. Ta Ann does not have FSC certification, and has failed to obtain full verification of the legality of its Sarawak concession under the independent “Verified Legal Origin” scheme. The firm has been accused of clear-felling rainforest that is home to endangered orangutan and of cutting down conservation forest for plantations. Ta Ann told Global Witness it is “collaborating closely with HSBC towards achieving full compliance” with its forest policy.

Another forestry conglomerate that is still banking with HSBC, according to its annual report, is WTK Holdings, whose intensive logging is widely believed by pressure groups to have caused landslides that ended up blocking a 50km (31-mile) stretch of river in 2010. None of WTK’s operations is FSC-certified.

In all, Global Witness identified six loans, totalling $25m, made by HSBC to non-compliant Sarawak loggers since the bank introduced its forest policy. HSBC said in 2004 that it would stop doing business with clients that failed to make a reasonable effort to comply by 2009.  The Economist asked HSBC to comment. The bank declined to discuss its clients because of confidentiality, but said it is “not accurate” to state that its clients are in violation of its forestland and forest-products policy. It said current data show that 99% of its forest-sector clients worldwide (by size of lending) are “compliant” or “near-compliant” with its policy. What precisely it means by “near-compliant” is unclear…..HSBC’s  continued involvement, however modest, allows logging firms to claim credentials they don’t deserve. Ta Ann, for instance, has run adverts saying it holds forest-policy certification from HSBC. That looks like a figleaf.

Deforestation in Sarawak: Log tale, Economist, Nov. 3, 2012, at 75

Black Wood: 100 ways to finance the criminal cartels who decimate tropical forests

The report – Green Carbon, Black Trade (2012) – by UNEP and INTERPOL focuses on illegal logging and its impacts on the lives and livelihoods of often some of the poorest people in the world set aside the environmental damage. It underlines how criminals are combining old fashioned methods such as bribes with high tech methods such as computer hacking of government web sites to obtain transportation and other permits. The report spotlights the increasingly sophisticated tactics being deployed to launder illegal logs through a web of palm oil plantations, road networks and saw mills. Indeed it clearly spells out that illegal logging is not on the decline, rather it is becoming more advanced as cartels become better organized including shifting their illegal activities in order to avoid national or local police efforts. By some estimates, 15 per cent to 30 per cent of the volume of wood traded globally has been obtained illegally…

The much heralded decline of illegal logging in the mid- 2000s in some tropical regions was widely attributed to a short-term law enforcement effort. However, long-term trends in illegal logging and trade have shown that this was temporary, and illegal logging continues. More importantly, an apparent decline in illegal logging is due to more advanced laundering operations masking criminal activities, and notnecessarily due to an overall decline in illegal logging. In many cases a tripling in the volumes of timber “originating” from plantations in the five years following the law enforcement crack-down on illegal logging has come partly from cover operations by criminals to legalize and launder illegal logging operations….

Much of the laundering of illegal timber is only possible due to large flows of funding from investors based in Asia, the EU and the US, including investments through pension funds. As funds are made available to establish plantations operations to launder illegal timber and obtain permits illegally or pass bribes, investments, collusive corruption and tax fraud combined with low risk and high demand, make it a highly profitable illegal business, with revenues up to 5–10 fold higher than legal practices for all parties involved. This also undermines subsidized alternative livelihood incentives available in several countries.

[It is important to discourage] the use of timber from these regions and introducing a rating og companies based on the likelihood of their involvement in illegal practices to discourage investors and stock markets from funding them.

Excerpts from Nellemann, C., INTERPOL Environmental Crime Programme (eds). 2012.Green Carbon, Black Trade Illegal Logging, Tax Fraud and Laundering in the Worlds Tropical Forests. A Rapid Response Assessment United Nations Environment Programme

To Kill an Environmentalist

The killing of Chhut Vuthy has shaken Cambodia. A well-known environmentalist and founder of the Natural Resource Protection Group, he had travelled to Koh Kong province in the west of the country to try to film illegal loggers. He was in a heavily forested area near the construction of a 338-megawatt hydropower dam being built by China Huadian, one of China’s five biggest power generators. The project is one of four dams which have drawn widespread criticism because of adjacent logging, and the impact the dams could have on wildlife and the livelihoods of local villagers.

How Mr Chhut Vuthy was killed is not clear, but the official explanation has raised eyebrows. The Cambodian army claims that he was taking photographs without permission. He was confronted by a military police officer who demanded he hand over his camera. An argument followed, says the army. Guns went off, and when the officer realised he had killed the environmentalist, it says, he turned his AK-47 on himself, managing to pull the trigger twice to shoot himself in the stomach and chest.  Mr Chhut Vuthy’s family insists a third person was involved, and after his funeral on April 28th hundreds of family, friends and human-rights activists demanded a full inquiry along with assurances from the government that their safety would be guaranteed.  Two journalists were with Mr Chhut Vuthy when he was killed. A Canadian reporter and her Cambodian colleague say they did not see who pulled the trigger after their car was confronted by a group of soldiers. They ran into the bush and sought shelter with locals, but say they heard one of the soldiers say loudly in Khmer, “Just kill them both.”

Mr Chhut Vuthy’s death is the highest-profile killing in Cambodia since a trade union leader, Chea Vichea, was shot dead in 2004. Three women were also shot in February as they campaigned for better working conditions at a factory supplying Puma, a German sportswear company.All three survived, but the alleged gunman, Chhouk Bandith, a district governor, was arrested only after local media reported that he was being hidden by politically connected friends. He was charged with causing “unintentional injuries”.

Cambodia: Blood trail, Economist, May 5, 2012, at 43

Illegal Logging and Organized Crime

Every two seconds, across the world, an area of forest the size of a football field is clear-cut by illegal loggers.1 In some countries, up to 90 percent of all the logging taking place is illegal.2 Estimates suggest that this criminal activity generates approximatel US$10–15 billion annually worldwide—funds that are unregulated, untaxed, and often remain in the hands of organized criminal gangs. Thus far, domestic and international efforts to curb forest crimes have focused on preventative actions, but they have hadlittle or no significant impact. While prevention is an essential part of enforcement efforts to tackle illegal logging, it has not halted the rapid disappearance of the world’s old-growth trees. New ideas and strategies are needed to preserve what is left of forests.

This paper suggests that current practice be combined with a more targeted, punitive approach, through more effective use of the criminal justice system. It argues that the criminal justice system should form an integral part of any balanced and organized nstrategy for fighting forest crime. This strategy should include initiatives to enhance the efficiency of criminal justice in combating illegal logging—that is, the investigation, prosecution, and conviction of cases, as well as the confiscation of the proceeds of criminal activity. These initiatives should be deployed in parallel with preventive programs, and the two approaches should complement and reinforce each other.

The criminal justice system has been used in the fight against illegal logging, but only in very sporadic instances and in limited and ineffective ways. Moreover, in those few cases, it has tended to target low-level criminals whose involvement in illegal logging is due to poverty. As such, it has created no real deterrent and has encouraged skeptics to further discount the relevance of criminal justice methods. Large-scale illegal operations are carried out by sophisticated criminal networks, and law enforcement actions need to be focused on the “masterminds” behind these networks—and the high level corrupt officials who enable and protect them. Pursuing these important targets through the criminal justice system will require creativity and a clear focus on those criminal justice rules and procedures that prove most effective…..

Because the role of the criminal system in fighting illegal logging has thus far been minimal, there are few documented successes, and little data to explain why the criminal justice system has not been more widely used in this context. To find new ideas as to how the criminal justice system can be used against illegal loggers, this paper therefore draws on experience gained from dealing with other types of crime (money laundering, corruption, and so forth).

The policy and operational recommendations made in this paper are based on legal and operational frameworks that are already in place in almost every country in the world. By making good use of these existing frameworks, we can take an important step towards ensuring the preservation and the sustainable management of the world’s forests.

Policy recommendations:

■ Develop an integrated criminal justice strategy for illegal logging that adopts and implements clear and comprehensive policies. To be effective, the strategy must target high-level corruption and the companies that pay bribes. It must aim for successful investigations, prosecutions, and the confiscation of the proceeds of crime. The strategy should include clear objectives and an assessment process for tracking progress….

■ Improve domestic cooperation. Domestic cooperation between agencies involved at different stages of the fight against illegal logging should be strengthened….

■ Enlist the private sector. When looking into the financial dimension of forest crimes, financial institutions and other entities obligated to report suspicious transactions to financial intelligence units need to be fully mobilized. This can be done through implementing due diligence measures and by monitoring transactions made by politically exposed persons (PEPs) and actors in the forestry sector…  Enhanced due diligence applies to PEPs in recognition that by virtue of their position, there is an increased risk of money laundering.

■ Engage civil society actors. . .

■ Include criminal justice as part of development assistance programs to combat illegal logging. …The implementation of anti-money laundering measures, as well as other steps suggested in this paper, should be included as part of country assistance strategies.

Operational recommendations….

■ Follow the money. Illegal loggers can be convicted of money laundering related to many different predicate crimes. This can result in additional jail time and/or fines above those imposed for the underlying forest crime. Furthermore, asset confiscation deprives criminals of the fruits of their crimes and makes it more costly for them to continue their operation.

■ Enforce anti-money laundering and due diligence requirements. Regulators should strictly enforce know your customer and due diligence requirements— particularly those for enhanced due diligence in the case of transactions of PEPs and suspicious transactions within the forestry sector. Regulators should also enforce compliance with the Financial Action Task Force (FATF)

Excerpts from Executive Summary, “Justice for Forests Improving Criminal Justice Efforts to Combat Illegal Logging” by Marilyne Pereira Goncalves et al., (Wolrd Bank, 2012)

Food vs Trees: Brazil and the Amazon Rainforest

Brazil would lose about $100 billion in agricultural output if the senate rejects legislation that forgives farmers for illegally clearing protected rainforest, said Senator Katia Abreu.  Failure to approve the bill would force farmers to reforest about 70 million hectares (173 million acres) of land currently under coffee, oranges and other commodities, said Abreu, 49, who is president of the Brazilian Confederation of Agriculture and Livestock.  “We would have a brutal reduction in the country’s food production,” she said in an interview at Bloomberg’s headquarters in New York on Nov. 1. “The legal uncertainty we are living in is deeply worrying.”

The Senate vote, scheduled for this month, comes as deforestation increases in the world’s biggest rain forest amid surging demand for agricultural and wood exports, according to the National Institute for Space Research. Environmental campaigners say the amnesty may encourage formers to flout regulations that limit deforestation.  The bill will update the 1965 Forest Code, which requires farmers to keep a certain percentage of their land as forest. That percentage varies from 80 percent in parts of the Amazon to 20 percent in the swampy Pantanal region in western Brazil.  The new legislation would make the current percentages law, eliminating the risk that they may be changed by presidential decree.

Since the 1960s, farmers have helped transform Brazil from a food importer to one of the world’s largest exporters of soft commodities, and they should be allowed to remain competitive, Abreu said.  Brazil is now the world’s top producer and exporter of coffee and sugar cane, the biggest beef exporter, the largest producer of oranges and the second-largest producer of soy after the U.S.  Much of that expansion has been made possible by cutting down the rain forest, not always legally.

The proposed bill would grant farmers amnesty and exempt them from being required to replant areas illegally deforested before 2009. That is fair because many farmers complied with the limits on deforestation, only to see those restrictions then tightened by decree, making them outlaws, Abreu said.  The legislation was approved by the lower house in a 410-63 vote on May 24. Since then, the bill has been altered to address concerns expressed by President Dilma Rousseff, said Abreu, a member of the Social Democratic Party who represents the state of Tocantins. She expects a vote by Nov. 23.

Opponents of the bill say it doesn’t take the opportunity to adapt 1965 rules to current global environmental standards.  “It is a lost opportunity,” said Roberto Smeraldi, founder and director of Amigos da Terra – Amazonia Brasileira, a Sao Paulo-based public interest group that focuses on the Amazon region. “After so many years discussing the Forest Code reform, this proposal doesn’t look to the future.”  Smeraldi, 51, said the focus on forgiving landowners will lead to further logging.  “One thing is to regularize, another totally different thing is to give amnesty,” he said in a phone interview from Sao Paulo. “When the citizen sees there is no difference between who acted in one way or another, he loses interest in the rule.”

Deforestation doubled to 267.9 square kilometers in May from 109.6 square kilometers a year earlier, led by destruction in the central state of Mato Grosso, the National Institute for Space Research said. While environmental protection is a concern for farmers, the burden shouldn’t lay only with them, Abreu said.  “In Brazil, the environment is a collective good with an individual burden to the landowners,” said Abreu. When the environmental discussions started, in the 80s, “we went to sleep as heroes and woke up as villains,” she said.

Brazil Faces $100 Billion Hit If Forest Bill Fails,Bloomberg, Senator Says, November 4, 2011,

They Can Kill You, Illegal Logging in Peru

Illegal deforestation of habitats is threatening many species of birds living in Peru between the Andes Mountains and the Amazon rainforest, scientists say.   One of the threatened habitats is home to the world’s smallest and rarest owls, a species unique to Peru, Inter Press Service reported Friday.”…Some people wondered ‘Does the owlet really exist?'” Jose Altamarino, manager of the park wardens in Abra Patricia, told IPS.

More than 400 bird species sharing the reserve, located between 5,900 and 8,200 feet above sea level, are threatened by illegal activities such as logging that have destroyed more than 7800 acres of the reserve, Altamarino said.  Efforts to combat the illegal logging are not only difficult but can be dangerous, a park ranger said.  “It’s dangerous to fight the illegal loggers: they could kill you,” Ramiro Galo said, adding it is always the lowliest workers who pay the penalty for illegal activities perpetrated by their employers.  “They never catch the lumber owners,” he said.

Illegal logging hits Peru bird habitat, UPI, May 13, 2011