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Southeast Asia’s Illegal Timber Market

Vladimir Platov, April 25

6643The worldwide trade in illegal timber and related wood products affects the majority of countries which boast large wooded areas, and brings its merchants over eleven billion dollars in yearly income. Illegal lumbering, which represents close to 50% of all logging according to the World Bank, is doing irreparable harm to forests and forestry.

According to the British conservation NGO the Environmental Investigation Agency (EIA), the illegal logging business, organized by transnational crime syndicates, inflicts damage on developing countries in the amount of 10-15 billion dollars each year. The main reason for the expanding scope of criminal businesses is the ever-increasing demand for furniture and other wood products from the top import countries: the USA, Japan, Great Britain, Germany, France, and China. Other contributing factors which facilitate the ruination of this forest wealth are weak forestry legislation in the host countries of these plundered resources, insufficient supervision of logging practices by those countries, the poverty of their populations, and corruption.

In addition to Central Africa and Brazil (Amazonia), the “flashpoints” of unlawful logging include the tropical forests of Southeast Asia, where Indonesia in particular is suffering from their devastation. In the period 1990–2005 alone it lost 28 million hectares of forest resources, 21.7 million of which consisted of virgin forest areas. In this regard Indonesia is surpassed only by Brazil, and the pace of deforestation is quickening. In the 1960s, 82% of the nation’s territory had canopy cover, while now only 49% remains wooded, and that remnant’s quality is continually decreasing due to intensive logging.
Illegal logging takes place, as a rule, in territories where especially valuable tree species grow, near transport routes and trading areas, including national border areas, during authorized discontinuous logging, when timber procurers tend to overestimate their logging haul. Illicit forestry activity includes both procurement of firewood by impoverished sectors of the population (one in ten out of Indonesia’s population of 245 million depends on the forest in order to live) and large-scale logging operations for sale in domestic and foreign markets. Thousands of hectares of forest are burned down to make room for palm plantations for the purpose of producing palm butter— fuel for the power stations of the new generation all across the European Union.

Indonesia is the greatest exporter of tropical timber in the world, and gets five billion dollars yearly from this activity, but simultaneously loses about one billion in revenue as up to 70% of this export is obtained by illegal logging. More than 48% of forest lands are given in concessions, and logging areas are moving into increasingly remote areas, as companies have an interest in logging the most valuable tree species. Regardless of the authorities’ ban on selling lumber internationally, it is regularly smuggled through Malaysia and Singapore for processing in neighboring countries and from there exported throughout the world. In October 2008 the Ministry of Forestry obligated companies to present timber for inspection in order to ensure that it was logged in sustainably administered forests. Nevertheless, pervasive corruption has hindered every effort to repair the situation from achieving effective results.

A peculiar aspect of the development of the wood processing industry in Southeast Asia has been the emergence of large wood processing enterprises in China and Vietnam, where in both cases the logging of domestic forests has been brought down to a minimum. A report released by the environmental organization Telapak states that furniture production has become one of the most actively developing industries in Vietnam. In 2000 the production of garden furniture increased by a factor of ten, since its relatively low price makes it a much sought-after commodity in Europe. Fixing low prices has become possible in part because of the flow into Vietnam of timber procured illegal on the territory of neighboring Laos. Thus, about 60% of the trade in tropical timber occurs among the countries of Southeast Asia itself: for example, in 2009 the import of finished products from illegal lumber into the European Union from China and Southeast Asia amounted to more than two billion dollars, and from Southeast Asia into China— about 870 million dollars. A considerable amount of this trade is given presumptive legitimacy by authentic documentation received from corrupt officials in Southeast Asia, as a result of which it is extremely difficult to distinguish between legal and illegal activity in the region.

Regardless of the fact that exporting unprocessed timber from Laos is prohibited, 500 thousand cubic meters of such timber are smuggled out yearly to meet the needs of Vietnam’s furniture manufacturing industry. Dozens of trucks line up day after day at border checkpoints on the Laotian side, loaded with timber, their passage facilitated by their intermediaries, who are corrupt officials and soldiers from both sides of the border. Piles of tree trunks illegally cut down and imported from Laos lie ready to be sold in the Vietnamese port of Vinh. As a result, in 2007 alone the export value of Vietnamese furniture amounted to 2.4 billion dollars, of which 970 million came from the USA. All the profits from the illegal timber trade warm the pockets of businessmen and traders from Vietnam, Thailand, and Singapore and corrupt Laotian officials. The losers in this game include the rural population of Laos, who have no means of earning a living without forest resources, and the entire country, whose territory was covered by 70% woodland in the 1970s, now reduced to 40%, and where, because of predatory logging, only 10% of the forests remain usable for commercial purposes.

In Cambodia, the main objective of smugglers is the retrieval and logging of tropical Thailand Rosewood trees from the Krâvanh (Cardamom) Mountains, whose dense timber, known as palisander, is reddish-brown with hints of yellow, and because of its monetary worth is used exclusively for the production of elite furniture and expensive finishing work. A cubic meter of this wood costs about seven thousand dollars in Cambodia, while its value in China is three times greater. The American environmental NGO Wildlife Alliance, with offices in Phnom Penh, has established six forestry stations in the southern zone of that mountain range, but as soon as they succeed in suppressing illegal logging in one region, the violators move to another. They are very quick-moving, use portable saws, work fast, and move the timber by night.
There is a powerful network of dealers and smugglers in Cambodia which, using informants and direct bribes of officials, logs timber illegally in state-owned forests and then transports it unlawfully out of the country.

The unrestrained destruction of forests in Southeast Asia, particularly in the Mekong basin, has placed the whole ecosystem in peril. The natural habitat of tigers, Malaysian bears, Asian elephants, leopards, aquatic creatures, reptiles, birds, insects, and native plants is rapidly deteriorating. The clearcutting of trees along the shores of the largest river in the region has led to erosion of the soil and high-powered floods, and has made life harder for the local population while worsening conditions for agriculture; it has also led to an increase in greenhouse gas emissions into the atmosphere. Around 20% of such emissions are the result of the destruction of the forests, in large measure through illegal lumbering.

The seriousness of the current situation has stirred the countries of Southeast Asia to take collective action with the international community and international organizations to begin actively searching for effective measures that will put an end to the practice of illegal logging and sales of timber. Ecologists, too, have long called for decisive action in this area, demanding that the US, EU, Japan, and China introduce legal restrictions which would fully block imports of illegal timber and would reliably certify for consumers that the wooden goods they buy are of legal provenance and were produced from timber logged in sustainably managed forests.

Vladimir Platov, an expert on the Near East, exclusively for the online magazine “New Eastern Outlook”.