5. Illegal Harvesting

Types of Illegal Harvesting

Timber can be harvested under several different models, from selective logging in community-managed forests, for example, to clear-cutting large areas for plantation development. Under any model, the legality of harvest can be reduced to two simple questions:

1. Is there a full and proper right to extract timber from the given area?
2. Is timber being extracted in accordance with the legal provisions attached to that right?

For the purpose of this section these will be referred to as “the right to harvest” and “operational infractions” respectively.

Within these principles there are a diverse range of typologies of illegality, reflecting the wide range of requirements that underpin harvesting rights. In almost every country, fairly complex permitting processes have evolved to govern various aspects of harvesting. These extend beyond the simple question of whether there are rights to cut down trees. There are regulations intended to ensure that the state does not incur losses, environmental harm is mitigated, communities receive some benefit, and protected species are not harvested. Violation of any aspect of this regime may render the product of a given area illegal.

Though the forests supplying global trade in timber stretch across the globe, the permitting processes and the ways in which they are violated exhibit more similarities than differences. Environmental Impact Assessments, for example, are a common, mandatory requirement for selective logging and clear-cut concessions. Logging concessions practicing ‘sustainable forest management’ invariably require an annual cutting plan, which determines areas within which harvesting can take place in any given year and volumes permitted to be harvested. Companies harvesting timber are always liable to pay taxes.

This section will not provide a catalogue of all legal requirements, but will focus on describing frequently identified illegalities and the means by which they can be detected and documented. These typologies are not exhaustive, but provide an overview of illegal practices identified by civil society across Asia, Africa, Latin America and the Russian Far East.

Illegalities in the Right to Harvest

Logging in areas without permits

The most commonly-recognised form of illegal logging takes place where no rights exist to either the land or the timber. This may be in national parks, protected areas, or in indigenous peoples’ reserves where perpetrated by outsiders. Logging may also take place after permits have expired, or before they have been obtained. A practice documented in Laos, the Democratic Republic of the Congo (DRC), Peru, Brazil and the Russian Far East is to obtain rights to harvest in one place and use the permits as a front to log elsewhere where no rights exist.

Logging in areas without all necessary permits

As described above, the process for acquiring legal rights over an area of forest for selective logging or conversion to other uses commonly requires a range of legal and administrative processes and permits. Where these processes have been expedited or ignored, and permits are consequently missing, the product of those concessions may be illegal.

Environmental Impact Assessments and annual cutting plans are examples of important yet commonly absent licenses. In Brazil, timber has been produced illegally from private estates clear-cut without ‘deforestation authorisation’. In the DRC, contracts for logging concessions are required to include social agreements with local communities, that are commonly missing. In Indonesia it is often the permit that allows the harvesting and sale of commercial timber stands that has not been obtained. In each of these examples some right or permit may exist, but not all necessary rights.

Illegal permit allocation

In cases where all permits have been obtained, it may still be possible to identify illegality in the ways in which the permits were issued. This can be a result of negligence by government agencies, or corruption. This practice is common in Indonesia, particularly in the acquisition of permits that should be predicated on an Environmental Impact Assessment before the assessment process has been completed. In the Republic of Congo, independent monitors have documented concessions being issued without a legally-required tender process, and cutting permits issued to oil palm concessions prior to the completion of an Environmental Impact Assessment. Permits may have been obtained by individuals connected to politicians, or even by companies owned directly by politicians. In some states this is illegal. In any case, whether it is illegal or not, this form of exploitation by politicians is important to document and expose.

Logging protected species

Many of the highest-value timber species targeted by European and US traders are increasingly rare, endangered and have been subject to protection by both domestic and international laws. Species such as Ramin in Indonesia, Wenge and Afrormosia in the Congo Basin, and Big-Leaf Mahogany in the Amazon have been given legal protection that imposes limits on harvest. Ramin, Big-Leaf Mahogany and Afrormosia have also been listed on the Annexes to the Convention on the International Trade in Endangered Species (CITES), which imposes additional regulatory controls on international trade.

Species like these are particularly vulnerable to illegal logging due to their value. Illegal harvesting can take place both outside and inside concessions. In the DRC, for example, Wenge has been harvested without legally-required permission. In Peru, Mahogany is illegally logged and laundered through ostensibly legitimate logging concessions using a web of fraudulent paperwork (see Case Study 6).

Operational Infractions

Violating terms of cutting plans

Operations within both selective logging and clear-cut concessions are commonly governed by forest management plans. These define areas within which harvesting can take place, and over what period. They also provide other important legal limits designed to achieve long-term sustainability, such as maximum quantities and minimum diameters of trees of different species allowed to be harvested. These may be violated in a number of ways. For example, by over-harvesting, extracting excessively small trees, or cutting in areas outside the terms of the plan. Another common illegal practice is harvesting timber from steep slopes or adjacent to rivers, activities often prohibited to mitigate soil erosion or water pollution.

Violating terms of other permits

The right to harvest is commonly underpinned by additional processes or permits, required by law, intended to mitigate the impact of logging on environment and local communities. Often, they may be intended to ensure that communities derive some direct benefit from logging companies, or that their rights (while often not legally recognised in full) are not infringed. An example of such a permit or process is the Environmental Impact Assessment (EIA), which require companies to identify and mitigate the impact of their activities. The EIA process will not be a one-off event, but rather an iterative process that continues throughout the lifetime of a company’s operations. Because they are costly, and may limit the ability of a company to exploit resources, they are often fabricated or violated. In some countries, like Indonesia, violation of EIA laws is a criminal offence that can lead to a prison sentence for offenders. As such, an unsound EIA process will fundamentally undermine the legality of the right to harvest.

Social agreements between companies and communities, where legally required, are another form of right or process that underpins the right to harvest. These are required in DRC, for example, where companies have been routinely found to have breached the terms of social agreements built into contracts. In order to increase the returns to the country of origin, logging contracts often also include obligations on companies to build mills or process a minimum percentage of the logs which they harvest. Such obligations are also commonly ignored.

Logging outside boundaries

Clearing or harvesting beyond concession boundaries is a common practice. In many remote forest areas boundaries are poorly demarcated, if at all, and compliance with boundaries established by permits are poorly scrutinised by authorities.

Tax evasion

Logging companies are usually required to pay forestry-specific taxes. This will commonly take the form of both a tax based on the area leased to or otherwise managed by the company, and a tax based based on the volume of each species harvested. Often the process of determining the tax liability depends on a forest inventory, which may rely on either self-reporting or under-resourced forest officials. This creates loopholes and weaknesses in oversight that enable companies to minimize their liability or avoid paying tax altogether, rendering the harvested timber illegal.

Under-declaration of volumes is a pervasive problem across Latin America, Africa and Asia. Another common practice is false declaration of species, replacing rare, high-grade species in paperwork with lower-value species. Where companies are clearing land without the specific permit that allows commercial sale of timber, as is commonly the case in Indonesia, the product is effectively “off the books” and similarly evades all tax at the point of harvest. The practice can also be more complex; in DRC monitors have alleged that logging companies negotiated an illegal deal with the government that allowed them to avoid paying taxes.