The Guidebook Investigating Illegal Timber provides clear instructions on how anyone can play a part in investigating illegal timber supply chains. It includes detailed guidance on the sources of information and tools that can be used to find out if timber is being illegal harvested, traded and sold to sensitive markets.
This guidebook is principally intended to be used by civil society, including non-governmental organisations (NGOs), local community and youth groups, and individual activists. It should also be of interest to investigative journalists. You might be an indigenous community wanting to find out who is logging your land and whether what they are doing is legal. You may be a local NGO or individual activist wanting to examine the legality of the clearance of a forest for a palm oil plantation, and track where the resulting wood is going. You could be an investigative journalist in an EU country looking for a story about illegal wood being used in garden furniture.
Lawson, S. 2015. The Lacey Act’s Effectiveness in Reducing Illegal Wood Imports. Union of Concerned Scientists
TEREA/S-for-S/Topperspective. 2016. Evaluation of the EU FLEGT Action Plan (Forest Law Enforcement Governance and Trade) 2004-2014. Commissioned by the European Commission through the European Forest Institute
2. Illegal Logging & the Global Response
3. How civil society can help
4. Understanding the Supply Chain
5. Illegal Harvesting
6. Investigating Harvesting: Desk-Based
Reference to legal analysis can be useful in determining some subtle, but serious, forms of illegalityIn some cases, the permit data may even provide concrete evidence that companies have violated the law by beginning operations before the permits were obtained. This is particularly the case with Environmental Impact Assessments which, where done properly, should provide some analysis of current conditions in the concession or targeted area. In Indonesia, landcover analyses within assessment documents have shown that deforestation for plantation development began before the assessment process. In Sarawak, Environmental Impact Assessments have shown that logging companies began re-entry logging before they were legally entitled to do so (see Case Study 2). At this stage the research process should seek to identify data that may not immediately be useful, but will become so as the investigation progresses. Critically important datasets that will be found in the permit data include:
7. Investigating Harvesting: Fieldwork
Proper planning and preparation is essential prior to fieldwork
‘Involving communities in fieldwork can present considerable risks to them’Ideally, contact should be made with local communities or other contacts prior to the trip. This is best done through a fixer with local affiliations, who can also act as an intermediary in the course of the fieldwork. Fixers can provide knowledge of the landscape, local stakeholders, risks and other logistical issues that can improve planning. If such a fixer cannot be identified, fieldwork should proceed using a stepwise approach, by speaking to communities and other sources in increasing proximity to the area of interest, thereby building up knowledge of local conditions in areas of lower risk. In the ideal scenario, communities can be relied on extensively for both information and to facilitate access throughout the area. They provide an incomparable source of information on the local context and operation of companies, and are keenly attuned to risk. They are often able to facilitate access into concessions or act as guides in forests. However, involving communities in fieldwork in any way can present considerable risks to them. While field investigators will leave the area of interest, communities will stay and can be subject to reprisals. Indigenous activists have been murdered by individuals protecting logging interests, so the seriousness of this risk must not be underestimated. Any approach to communities must take this into consideration. It should also be considered that some community members will be in the employ of logging or other companies, and may have a close affiliation to police or local government. The fieldwork itinerary should identify times at which villages can be accessed, and by what route. Potential entry points into the concession of interest can also be identified. Developing a sense of the time fieldwork will take, leaving sufficient room for contingencies, helps to establish a risk mitigation plan. Logging companies usually construct and effectively own logging roads. They may have checkpoints and can control access to and from the area of interest. They will, however, often allow local people to use the roads and pass checkpoints, reinforcing the importance of using local fixers. Companies also have connections with – and may even exercise corrupt control over – local police and military. In many cases they have used these state agencies as de facto private forces to intimidate, assault, and arrest local community members and others seeking to investigate or protest against their activities. These factors must be considered when planning both the investigation, and the risk mitigation plan (see Mitigating risks in fieldwork).
Connecting the dots and next steps
The cycle of gathering permit data, analysing maps and carrying out fieldwork can be carried out more than once, and it may be necessary to do so to complete a set of information that reaches evidentiary thresholds. Where clear or prima facie evidence of illegality has been established, the next step will be to determine where the timber is going from the point of harvest. In some cases, the evidence will remain unclear irrespective of the extent of investigations at the point of harvest. This is particularly the case where the perpetrators are a large number of seemingly unorganised individuals, acting independently, or where timber is being laundered. It may also be the case where levels of transparency make it impossible to get permits and maps, or where security risks or logistical challenges prohibit thorough field investigations.
In all of these instances, moving downstream and identifying the destination of timber – whether through physical observation or tracking, or following the paper trail – presents a new and different opportunity to investigate the illegal timber trade. Timber can be harvested legally but subsequently become illegal, downstream, due to violations of other regulations governing its transport, processing and trade.
8. Illegal Transport, Processing & Trade
‘Successful prosecutions under the Lacey Act have been predicated on illegalities committed at this stage of the supply chain’
‘It is common for companies to breach export controls, often with the collusion of officials’Export prohibition violations In an effort to suppress over-exploitation and support domestic processing industries, many states have imposed bans or restrictions on the export of unprocessed logs and some cases also rough sawn timber. Some, including Brazil and Indonesia, have an outright ban on raw log exports. In others the picture is more complicated, in ways that facilitate circumvention of the restrictions. In Laos, for example, there is a ban on log exports, but the government reserves the right to exempt specific shipments. In reality log exports are the norm, with a lack of clarity over the decisions behind, or legal basis for, the exemptions. Rules in the Republic of the Congo limit the proportion of its harvest each timber company may export as unprocessed logs, but special approval can be obtained to expand this limit. In practice, the proportion of logs exported exceeds the standard limits on a routine basis. In some states, such as Mozambique, log export bans are restricted to specific (commonly high-value) species. It is common for companies to breach such export controls, often with the collusion of officials. Timber may be exported inside shipping containers and mis-declared. Logs may be smuggled out in small vessels and then transferred to larger vessels at sea or in neighbouring countries. On arrival in destination countries, the illegal logs may be falsely declared as originating elsewhere, complete with entire sets of forged documents. Tax evasion The same practices that enable companies to obscure the illegal origin of timber can be employed to minimise tax liability. Harvesting taxes may be evaded by under-declaring total volumes extracted from a forest or falsifying species. Export duties and tariffs (both general and timber-specific) can be evaded by the same methods. In just one month in 2012, for example, authorities in the Republic of the Congo estimated that 12 companies had failed to declare almost 4,500m3 of logs, with a commercial value of 2.5 million euros.15 Even more pervasive than under-declaration of volumes at point of export, and harder to detect, is under- declaration of prices paid. Harder still is transfer mispricing, where actual prices charged and paid by related companies are lower than true values. In 2008, for example, Greenpeace published leaked internal documents from a Swiss-based logging multinational indicating systematic mispricing during the early 2000s regarding log exports from the DRC and Republic of the Congo. Greenpeace estimated that the activities exposed may have denied the governments of the two countries nearly $10 million in revenues.16 CITES violations The UN Convention on the International Trade in Endangered Species (CITES) imposes controls on international trade in certain species. Species that are threatened with extinction if international trade continues unregulated can be added to one of three Appendices to the Convention, affording varying restrictions on trans-border shipments. The advantage of CITES to states struggling to enforce domestic laws is that, as an international agreement, it is enforceable in destination or market countries, not only the country of source. By definition, CITES regulates species that are increasingly rare and, by extension, usually high value. This includes various Dalbergia species targeted as precious rosewoods, and Bigleaf Mahogany. To enable export of certain specified products of CITES-listed species, companies must first obtain a permit from the CITES Management Authority of the source country. For Appendix III species exported from countries other than the listing country, a CITES Certificate of Origin is required. In all other instances, a CITES Export Permit is needed. Export permits can only be issued providing the timber has been sourced legally and (for Appendix II) if the export will not be “detrimental to the survival of the species”.17 This adds another layer of protection and oversight to these species, but one that is frequently violated. Timber subject to CITES controls but without the required paperwork may be smuggled by false declaration as other species, by false declaration as product categories not captured by a listing, or by shipping more than a given permit allows. Even where shipments are covered by a CITES permit, illegalities are frequent. Permits can be obtained through fraud, issued through corruption, or simply forged. Examples of these practices for CITES-listed timber have been documented in recent years in both Peru and the DRC (see CaseStudy 6). Shipments with valid CITES permits are exempt from the EUTR.
‘CITES permits can be obtained through fraud, issued through corruption, or simply forged’
9. Investigating Transport, Processing & Trade
‘Observational fieldwork can be particularly effective where supply chains are consolidated, with the same companies engaged in logging also selling directly to export markets’
10. Tracking Timber to End Market
11. Assessing the Evidence
‘Companies in the EU and US are conscious of the risks to their business if they are associated with human rights abuses or loss of biodiversity’Exposing supply chains to unregulated markets Though the EU and US account for a significant proportion of global trade in timber, several other countries import significant volumes. These states, particularly Japan, China and India, account for a growing proportion of the trade in illegal timber, and do not have laws like the EUTR and Lacey Act. If investigations lead to these countries – as many will – the Lacey Act and EUTR may be brought to bear if the timber is later re-exported to the EU or US, but making these connections is notoriously difficult. Nonetheless, the Lacey Act and EUTR were enacted as a consequence of public pressure – and, critically, evidence – of the scale of the illegal timber trade. Pressure is growing on China and Japan to introduce similar legislation. Exposing illegal supply chains to these countries can support these efforts. In such instances it is worthwhile exposing the case publicly, but also seeking to provide the evidence formally to government agencies in both source and market country. Deeper or broader investigation There may come a point in an investigation where it is determined to be impossible to prove a case against a particular target, or there is insufficient evidence to support a hypothesis. It is important to be meticulous and not abandon a line of inquiry altogether prematurely. Either drilling down into more detail on a tighter, more refined target (whether an area or company), or broadening the inquiry to a larger area or supply chain, can lead to new breakthroughs. The process may lead to new insights that allow the investigator to return to the original target with fresh ideas.
‘Drilling down into more detail on a tighter target or broadening the inquiry can lead to new breakthroughs in an investigation’The Dead End Not every investigation will result in actionable evidence or information that can have a ‘chilling effect’ on a supply chain. But all investigations will guide further investigations, improve the investigators’ understanding of the actors involved, and improve their campaigning. If the decision is taken to end an investigation without taking further action, some simple principles should be implemented to ensure the work is not wasted. All evidence gathered during the investigation, whether hard or digital data, should be filed or stored in such a way that it can easily be recovered. A single document should be drafted summarising the investigation aims, progress and conclusions. The document should reference the evidence and note how it can be found. It should be considered that what may seem like a dead end can become a live lead within weeks, if new information becomes available. At that point – whether weeks or years later – the ability to re-access and understand an investigation will prove invaluable.
12. Sharing the Evidence
‘Publishing evidence may lead to companies taking action voluntarily, increase political will, or promote amendments to laws’There are no hard-and-fast rules for exposés, and no guaranteed way to ensure a given case will capture attention above the wealth of other information released every day. But there are a few key principles that should be considered.
13. Staying Motivated and Staying Safe
Next: Case Studies