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Billions of Dollars Lost Each Year to Illegal Logging

The joint¹ report, called Green Carbon / Black Trade, says between 30 and 100 billion dollars are lost each year to the illegal timber trade. Much of the loss is centered in key logging countries in Central Africa, the Amazon Basin and South East Asia.

Besides the diversion of revenues away from development, the trade also harms efforts to mitigate² climate change and also leads to political instability. UNEP says deforestation, much of it from logging in tropical rainforests, is responsible for nearly 20 percent of all carbon emissions³, 50% more than the amount from shipping⁴, aviation and land transport combined. 

Revenues from illegal logging have been used by various rebels and terrorist groups, from the Khmer Rouge⁵ in Cambodia to the Lord’s Resistance Army in Uganda.

Some groups, like militias⁶ in the North Kivu region of the Democratic Republic of the Congo, engage in a number of illegal activities with international ramifications⁷. They include the poaching of rhino⁸, elephants, and other wildlife, as well as illegal logging.

Christian⁹ Nellemann, a senior officer with UNEP’s rapid response unit and editor of the report, said in northeastern Congo, militias often make peace agreements with the government that include the removal of vehicle check points, making it easier to transport timber. The militias also clear the forests for their burgeoning¹⁰ trade in charcoal¹¹ – estimated by the UN to be worth over $28 million per year.

"[During an offensive], the militias drive hundreds of thousands of people [into] camps," he explained. "These refugees – in order to cook their meals -- need charcoal. So the militias, after having driven people into these camps, cut down the forest, have kilns¹² and produce charcoal which they then sell to the refugee camps."

"What we also see in these regions," he continued, "is that the different militias, including the military in the region, are taxing the charcoal on its way to the refugee camps."

Nellemann said organized crime has become more sophisticated over the past decade.

Criminals often hack¹³ government websites to extract logging permits and have created falsified certificates declaring that the timber they are selling is legally produced. He says in some places, such as Brazil, cartels know the contents of bi-lateral agreements between governments before the documents are signed.

"One of the big scams now are vast large-scale laundering¹⁴ operations where the illegal logging cartels are basically laundering timber by selling it through plantations¹⁵, really fronts, that exist only on paper," he said.

"So, in Brazil and in Southeast Asia," said Nelleman, "there are hundreds and thousands of permits [for palm oil, agriculture and wood plantations] that only exist on paper but nevertheless are producing vast amounts of timber that basically reflects a laundering operation."

The report by UNEP and INTERPOL says in Indonesia, the amount of logs thought to be produced on these plantations increased from nearly four million cubic meters to over 22 cubic meters in 2008.

Nellemann said greater international cooperation is needed to fight illegal logging and other transnational crimes. He said UNEP is working with the international police organization INTERPOL on a pilot project called LEAF, or Law Enforcement Assistance to Forests). The effort is funded by the Norwegian government and the Norwegian Agency for Development Cooperation.

The program works with national police forces to crack down on the groups, and to gather information on the crime syndicates and their trading partners, many based in North America, Europe and China. 

In some cases, he said, military force has been needed.

"We have seen in Indonesia naval¹⁶ and army forces intervening directly due to the scale and armaments of some of these illegal cartels," said Nelleman. "In Brazil, the federal police have been effective in direct SWAT operations. We know that to combat transnational organized crime we need the full range of law enforcement efforts."

Nellemann said under the LEAF program, national authorities can restrict timber exports in areas with high concentrations of illegal activity. INTERPOL would identify companies operating or buying from regions with illegal logging and discourage further investment.

Other ideas recommended by the new program include centralizing all land-clearing permits with one national register.

INTERPOL and its partners would also encourage investigations¹⁷ of the mills and plantations for tax fraud.

"We know that [besides murder and violence] what these people are conducting is tax fraud [on a vast scale]," he said. "We know that the amounts of timber passing through these plantations are many times what are reported to authorities. It's by working with tax authorities in these countries that we can finally procure¹⁸ the evidence and get these criminals convicted in court."

Nellemann said past experience with drug cartels serve as an indicator¹⁹ of what could happen if the illegal trade in timber is not stopped: the cartels could branch out into other forms of criminal activity, including human trafficking, the international drug trade, and illegal mining with revenues used to fuel civil wars.