Timber Investigation Centre — Case Studies

Over the past two decades a number of NGOs have repeatedly exposed illegal logging and linked the trade to market. The case studies below include highlights from some recent examples. To find out more about the methods used in each case, access the Guidebook

1. The Amazon’s Silent Crisis

Based on the scale of harvesting and export, Greenpeace chose to examine the legality of harvesting of the high-value species Ipê in the state of Pará in Brazil. Existing evidence, including previous government enforcement cases, suggested that laundering of timber origin was occurring, abetted by fraudulent documentation.

To investigate this, Greenpeace began by obtaining every Logging Authorisation on record for Pará State. Excluding those that had been suspended or not yet approved helped refine the list of more than 1,300 licenses to just over 1,000. Next, researchers identified those in which the forest inventory included the high-value Ipê species. They then shortlisted any licenses in which a suspiciously large volume of Ipê was recorded, and those in which the volume per hectare appeared excessive when compared to average population densities of the species.

This presented Greenpeace with a longlist of 104 concessions in which there was a reasonable suspicion that the volume of timber was overstated – potentially to enable laundering from other areas. The 104 concessions were further filtered using a range of criteria, including the size covered by the authorisation, the year in which it was validated, those that allegedly contained the most Ipê, and visual information from aerial inspections of selected concessions. Though aerial inspections will be beyond the means of most NGOs, they can be replicated to some degree using satellite analysis.

Greenpeace arrived at a list of 18 Authorisations that they targeted for fieldwork. In 14 out of the 18 cases, they identified sufficient infractions to justify the cancellation of the license.

Click here [PDF] to download the full report.

2. Investigating selective harvesting in Sarawak

In 2009, Norway’s state pension fund commissioned Earthsight to investigate the activities of a large Malaysian logging company in which it owned shares. Earthsight used reference documents, satellite images and fieldwork to expose a range of different types of illegalities by the company in its licensed harvest areas (concessions) in Sarawak:

  • Analysis of reference documents: Environmental Impact Assessments for the logging in a number of the concessions stated that the company had begun re-entry logging before the Assessments had been issued, which is a breach of regulations
  • Comparing reference documents with satellite images: Detailed concession maps were obtained from the annexes of Environmental Impact Assessments. These were compared with recent satellite imagery, which was post-processed so that vegetation damage from recent selective logging could be clearly seen. Comparison of these two datasets exposed evidence of illegal logging outside concession boundaries and in prohibited areas within concessions.
  • Field observations and interviews: Evidence of illegal cutting in river buffers, logging of protected species, pollution of rivers with logging debris and illegal clearance in excess of limits along logging roads was obtained via field observations. Additional evidence of illegal harvesting of protected species, cutting of undersize logs and fraudulent log markings were obtained from interviews with loggers and logging camp employees.
The information obtained led the Norwegian pension fund to blacklist the company, and was repeatedly cited by NGOs campaigning for change in Sarawak.

3. Clearing before permits

In the course of an investigation in Indonesia, NGOs the Environmental Investigation Agency (EIA) and Jaringan Pementau Independen Kehutanan (JPIK) identified large-scale clearing in an area of forest, where government maps that had already been obtained indicated there was no relevant permit. EIA and JPIK were able to discover the name of the company operating in the area, and identified timber being harvested in the concession and moved to nearby sawmills. However, provincial government databases did not include permits for the named concession. After several months, an Environmental Impact Assessment for the concession was obtained, not through government sources but in a village close to the concession. This included maps showing the boundaries of the concession, that were then digitised by a GIS analyst. Overlaying these boundaries with several Landsat images showed the month in which clearing began, and how much forest was cleared over the course of several months. EIA/JPIK obtained confirmation from the Ministry of Environment and Forestry that the company did not yet have legal rights to clear the forest.

The report including these findings can be downloaded here [PDF]

4. Combining Field and Map Data

Greenpeace carried out its analysis of illegal logging in Cameroon using boundaries of logging concessions made available through a collaboration between the World Resources Institute (WRI) and the Cameroon Ministry of Forestry and Wildlife. The data was published as part of an effort to strengthen forest management in the state.

During field investigations in 2014, Greenpeace documented logging roads, logs and stumps using GPS and photos. They subsequently overlaid the location of the logging activities with the concession boundaries, identifying timber harvesting almost two kilometers beyond the concession. The investigation is presented in a 2015 report and the evidence was presented to the Dutch authorities tasked with implementation of the EUTR. As a result, the authority filed a report with the public prosecutor against a company that had imported timber from Cameroon.

5. Timber smuggling in Indonesia

Labora Sitorus, a low-ranking police officer in Indonesia’s West Papua Province, was the owner of a timber processing company named PT Rotua. During fieldwork civil society investigators determined that PT Rotua was receiving logs crudely processed in the forest from communities in two districts. Investigators subsequently determined that PT Rotua was using incorrect or incomplete documents to transport the timber from the point of harvest to its sawmill, and from the sawmill to the processing hub in the city of Surabaya. Sitorus was arrested in May 2013 and 115 containers of precious Merbau timber, estimated to be worth more than US$20 million, were seized. Subsequent investigations by the anti-corruption agencies suggested that nearly US$128 million had been laundered through his personal bank account, the proceeds of both illegal timber and smuggled fuel. In 2014, Sitorus was convicted of illegal logging and money laundering. He was sentenced to a 15 year prison term and instructed to pay a US$400,000 fine.

6. The Peru paper trail

In Peru a state agency, the Supervisory Body for Forest Resources and Wildlife (OSINFOR) carries out regular, random field inspections to forest concessions that have recently been logged. During these inspections, OSINFOR officials assess the extent to which harvesting has taken place in compliance with regulations. They also assess a sample of forest to check it against volumes declared by the concessionaire. These inspections produce Supervisory Reports that identify illegalities such as false inventories, illegal logging and misuse of permits to launder timber.

EIA obtained Supervisory Reports for inspections carried out between 2008 and 2011 using Peru’s Transparency and Access to Public Information Law. More than 200 concessions covered by the reports exhibited some form of serious illegality. EIA cross-referenced these reports with a database of CITES export permits for cedar and mahogany from Peru, which were also obtained under the transparency law. This identified more than 100 permits used to export endangered species to the US, all of which could be directly connected, through the permits themselves, to concessions where OSINFOR had identified evidence of serious illegal activities.

The CITES permits name the concessions of origin, in theory, but in some cases they were linked to concessions where OSINFOR had found no legal logging. In most cases, the concessionaires had falsified inventories to inflate the volume of endangered species legally available to them. The CITES permits also named the importers of timber in the US, so using this process EIA was able to make a clear link between illegal harvest and market.

Click here [PDF] to download the report.

7. Investigating timber exports

In April 2014 Myanmar enacted a log export ban in an effort to stem rampant over-extraction of timber in its dwindling forests. The annual allowable quota in the country has been regularly exceeded due to uncontrolled harvest and exports, with much being transported directly over its northern border with China, in spite of a requirement that all exports are routed via Yangon, in the south.

In June 2015 EIA investigators travelled to border crossings between Myanmar and China to assess the volume of logs exported in violation of the ban. In the town of Nongdao they documented thousands of tonnes of high-value teak, tamalan and padauk logs that had been brought into China from Myanmar. In the key transit town of Ruili, also inside China, investigators observed trucks unloading rosewood flitches on a daily basis. In early 2015 investigators documented long lines of timber trucks waiting to cross the border into China laden with logs.

EIA also employed covert methodologies, posing as timber buyers to obtain information from traders and logistics agents. This enabled them to establish a picture of the methods employed by the trade to gain access to resources, circumvent restrictions, and the complex web of individuals controlling the supply chain.

Click here [PDF] to download the report.

8. Tracking logs from harvest to export

In 2014, following up on its detailed investigation into illegal logging in the Brazilian Amazon, Greenpeace placed GPS locator beacons on logging trucks operating in Pará state. Pará produces and exports more timber than any other state in Brazil, with three quarters of logging estimated to be illegal. The beacons, or trackers, emit signals that can be detected remotely and tracked over time. They revealed that the trucks were travelling to remote public forests during the day and bringing timber to sawmills overnight. Cross-checking the locations with government maps revealed that no logging rights had been issued for the areas from which the trucks were taking logs. Reconnaissance flights by Greenpeace over the same areas enabled them to document a network of logging roads and illegal camps.

Greenpeace then checked the electronic records for the sawmills that were receiving the logs, and checked satellite imagery for evidence of logging in the stated source. They found that in many estates there was no sign of logging at all, and some only little. They concluded that the logging estates were being used as a front to provide the sawmills with paperwork, enabling them to launder illegal timber sourced in the public forests.

Used in this way GPS trackers can clearly be extremely effective, but the investment of time, expertise and level of risk undertaken by Greenpeace should not be underestimated. Placing the trackers on the trucks required building up a degree of trust and familiarity with truck drivers over a period of months. It should also be noted that the evidence was particularly effective because it was combined with other data, including permits, chain-of-custody data, satellite imagery and aerial photography.

Click here [PDF] to download the full report.

9. Investigating trans-continental supply chains

The Environmental Investigation Agency carried out interviews with Russian authorities, non-profits and communities, and determined that systemic illegal logging in the Russian Far East (RFE), and the laundering of the timber using falsified permits, was something of an open secret. EIA analysed Russian, Chinese and US customs records to identify dozens of Chinese companies exporting hardwood flooring to the US, constructed using oak from these forests.

Subsequently, EIA investigators posed as importers to meet the Chinese exporters. Investigators were able to question more than 20 different sawmill operators and flooring manufacturers about the sourcing practices of their US buyers. One such company was Chinese-owned flooring company named Suifenhe Xingjia Economic and Trade Company (Xingjia). In covert meetings with EIA, Xingjia’s president and senior managers described an extensive system of illegal harvesting in Russia’s forests and bribery of Russian officials. Xingjia claimed to overharvest in its own concessions, and launder illegal timber cut outside its concessions using harvesting permits. Ninety percent of its raw materials were apparently sourced from other high-risk suppliers throughout the RFE. Further research by EIA revealed that these suppliers had been the subject of police investigations and even successful prosecutions, for their involvement in illegal logging.

Through trade data, supported by observations during covert meetings in the guise of potential buyers, EIA determined that Xingjia’s largest customer was a US-based company, Lumber Liquidators. Lumber Liquidators is, in turn, the largest specialist retailer of hardwood flooring in the US. The investigation led to a prosecution of Lumber Liquidators under the Lacey Act. In October 2015 the company agreed to plead guilty to several violations under the act. Lumber Liquidators agreed to pay a fine of $13.2 million and submit to a rigorous Environmental Compliance Plan for a period of five years.[1]

Click here [PDF] to download the full report.

[1] http://www.wri.org/blog/2015/10/13-million-fine-lumber-liquidators-shows-us-lacey-acts-clout

10. Covert meetings expose corruption

In 2004, NGOs EIA and Telapak Indonesia uncovered a billion-dollar illegal trade in Merbau logs from Indonesian Papua, including tracing supply chains to China and the USA.[1]

The logs were being harvested illegally and exported in contravention of the country’s log export ban, and processed into high-value wood flooring in China. Complex multinational syndicates involving corrupt Indonesian officials and brokers in Singapore and Hong Kong were being used to smuggle the logs out of the country and disguise their origin on arrival in China.

EIA used fieldwork to document illegalities at source, through field observations and interviews with affected communities. The scale, modus operandi and identity of key individuals involved in the smuggling of the logs from Indonesia to China was mainly exposed through undercover meetings with log traders in Jakarta, Singapore and Hong Kong, identified by trawling internet trading boards. This was supported by comparing Indonesian, Malaysian and Chinese trade data, and in-depth research into seizures of log smuggling vessels by the Indonesian authorities. Supply chain connections to the USA were made through undercover visits to Chinese manufacturers and analysis of US shipment records.

The report led the Indonesian government to launch an unprecedented crackdown on illegal logging in Papua, dispatching a 1,500-person task force and seizing over 400,000 cubic metres of timber. Prices of Merbau in China doubled in a matter of months as illegal supplies dried up.[2]

[1] EIA/Telepak Indonesia, ‘The Last Frontier: Illegal Logging in Papua and China’s Massive Timber Theft’, February 2005, http://www.eia-international.org/wp-content/uploads/The-Last-Frontier.pdf

[2] EIA/Telapak Indonesia, ‘Rogue Traders: The Murky Business of Merbau Timber Smuggling in Indonesia’, August 2010, http://eia-global.org/images/uploads/Rouge_Traders.pdf

11. Covert calls identify suppliers

In 2010, a study [1] by Earthsight for WWF of high-risk wood product imports into the UK used trade data and other information to determine that external solid wood doors made from Meranti and imported from Indonesia were a product of interest. Web searches and undercover phone calls to retailers established a shortlist of five main companies selling or distributing these doors in the UK. Information on the supply chain of one of these companies – LPD Doors – was sought using both open requests by WWF and undercover phone calls in the guise of a concerned buyer by Earthsight. These inquiries led to the identification of the Indonesian manufacturer and exporter of the doors.

Earthsight visited the Indonesian supplier undercover, and was provided with documents showing that the company had recently sourced Meranti from as many as 20 different suppliers. All but one of these suppliers was a secondary trader, and no further information had been sought on the ultimate origin of the wood. The sole supplier with its own licensed logging concessions, PT Kayu Lapis Indonesia, had been the target of a number of NGO allegations of illegal logging and community exploitation. The research was therefore able to demonstrate that the Meranti used in the doors was of untraceable and risky source.

[1] WWF, ‘What Wood You Choose? Tracking forest products on sale in the UK back to their forest source’, February 2011, http://assets.wwf.org.uk/downloads/what_wood_you_choose_feb11.pdf

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