Encumbered Lumber: Europe Seeks Hard Line on Illegal Logging

By Jürgen Dahlkamp and Jörg Schmitt

Photo Gallery: Logging Around the World Photos
DPA/ WWF

Until recently, European companies could import illegally felled lumber with no fear of prosecution. New EU regulations are meant to take a tougher stance, but individual member states still write most of their own rules. Critics say Germany is falling short.

On January 11, a perfect blue sky framed the Safmarine Akwaba in the port of Bayonne, in the south of France. Between the blue sky and the white cranes, the 140-meter (460-foot) freighter, not yet even five years old, made for a postcard-perfect image of the shipping trade -- if only it weren't for the cargo.

That same cargo landed this ship on the blacklist of a British environmental organization called Global Witness on this particular January day. In its hold, the Safmarine Akwaba held 929 cubic meters (32,800 cubic feet) of tropical wood from Liberia. According to Global Witness, the buyer for this freight was Treemex, a lumber importer in the German town of Nordenham.

Tropical wood remains a lucrative business, in demand in Europe for dining-room tables and hardwood floors, or to lend an air of cold power to the wood-paneled offices of corporate CEOs. If the lumber is certified to have been cultivated legally, the buyer obtains not only a visually pleasing construction material, but also a halfway clear conscience.

That wasn't true in this case, though. And importer Treemex must have known as much.

In early 2012, Liberia's forestry authorities suspended logging permits on a wide scale. It's believed that international lumber companies had fraudulently obtained many of the permits and were using them to harvest wood indiscriminately. The cargo on the Safmarine Akwaba was obtained using one of those permits.

International companies have flourished in these gray areas. There was nothing in German or European law that made importing this wood illegal. And if it really came down to it, the companies could simply insist they had trusted their suppliers when they said everything was aboveboard.

Market Saturated with Illegal Lumber

But as of this week, the rules of the game have changed. According to a new European Union regulation that came into effect on Sunday, lumber dealers are obligated to import only legally felled lumber, and they must be able to provide complete documentation of their lumber's origins.

A recent Interpol study shows just how large a market exists for illegally felled lumber. Fifteen to 30 percent of all lumber sold on the global market was either felled without a permit, or the relevant permit was forged, stolen or obtained in exchange for a bribe. In the tropical wood-producing regions of Africa, Asia and South America, it may be as much as 90 percent.

The revenue created through such illegal logging may be in the hundreds of billions of dollars a year, with the kind of profit margins otherwise seen only in the drug trade. In Liberia, for example, lumber exporters pay just $2 to $3 (€1.50 to €2.30) per cubic meter of lumber for their dubiously obtained permits -- sometimes as little as 50 cents. They can then sell the same amount of wood for $200. Even in cases where the loggers do keep their promises to build a school here or a few roads there -- roads they themselves need to transport their logs -- ultimately the lion's share of the profit remains with the companies. According to Interpol, this amount can be up to 10 times what it would be if the lumber were harvested legally.

Yet neither the loggers nor their buyers need to expend much energy worrying about getting caught. In particular, the practice of mixing legally and illegally harvested lumber together makes it more difficult to investigate these businesses.

Two weeks ago, Interpol scored a blow against the logging mafia. After months of investigations, police in 12 Latin American countries confiscated 5,000 cubic meters of lumber and arrested some 200 suspects. Still, compared to the profits this rainforest chainsaw massacre brings in, that amounts to only a small setback for the loggers.

Liberia provides a clear example of how this business works. Lumber exporters active there have certainly obtained logging permits from the government in Monrovia. Far more often, though, they took advantage of a loophole that allows private owners of forested land to engage in a small amount of logging under less strict environmental regulations. Protected by corrupt forestry officials, these corporations were able to secure the logging rights to 40 percent of Liberia's rainforest land -- a quarter of the area of the entire country -- in just three years, according to Global Witness's estimates.

European Companies Deny Wrongdoing

In August 2012, Liberian President Ellen Johnson Sirleaf enacted a moratorium that suspended all such permits. At the same time, she established a fact-finding commission and halted the export of lumber obtained through these contracts. But none of this seems to have impressed the lumber industry -- certainly not Treemex in Nordenham, even though the company must have known about the export ban.

On December 30, the Safmarine Akwaba's cargo of lumber obtained through a contract with a village in southern Liberia set out for France, despite the ban. In the port city of Bayonne, a sawmill converted the logs into railroad ties. Treemex doesn't consider itself to have done anything wrong. "To our knowledge, this lumber was felled legally," reads a company statement. The accusations, the statement continues, are completely unfounded, and the company insists it is "meticulously careful to purchase only legally felled lumber."

Meanwhile a second German company has come to Global Witness's attention: B&T Wood in the northern town of Meerbeck. The company admits to having imported tropical wood from Liberia in September for use as railroad ties, but says it did so legally. Although the lumber was felled after the Liberian government implemented its export ban, the company says Liberia's supreme court examined the moratorium on October 22, and did not declare logging licenses invalid until that day.

Global Witness believes the trees in question still should never have been felled because the permits used to do so violated Liberian forestry laws. The organization says the same is true in the Treemex case.

Germany 's Watered-Down Penalties

With its new regulations on imported lumber, the EU is looking to emulate the hard-line policies of the United States, which since 2008 has required complete documentation of where imported lumber comes from. More crucial than the EU regulations, though, will be what each of the individual EU countries chooses to put on the books in their own laws.

In January, Germany was on the forefront of this environmental battle. A proposed law would have brought criminal prosecution against anyone found to be importing, or even attempting to import, illegally felled lumber.

But when the Bundestag, Germany's parliament, passed a law on the lumber trade last Thursday, with a majority of the governing Christian Democratic Union and its junior coalition partner, the Free Democratic Party, the formerly hard line had suddenly softened. Now only those who have made particularly large profits off of illegal imports, or those who are repeat offenders, have to fear criminal prosecution and a potential one-year prison sentence. All other cases of illegal logging count as a misdemeanor and can be resolved with a monetary penalty.

The opposition Social Democrats say the German government has "given in to lobbyists" and "gambled away Germany's trailblazing role." A legal opinion issued by Greenpeace concludes that the law in fact trivializes the illegal lumber trade. "Forests won't be protected this way," the organization writes.

Still, a financial penalty, even a small one, can hit hard if it also causes serious damage to a company's image. In the US, for example, guitar manufacturer Gibson bought its way out of legal action over dubious tropical wood imports for use in its fretboards by paying a penalty of $300,000. But far worse than the monetary cost was the disgrace the case caused to a company whose instruments have been used by stars such as Woody Guthrie, Bob Dylan and U2's The Edge when they play songs about the world's injustices. Those songs don't sound as authentic when played on illegally cut tropical wood.

Translated from the German by Ella Ornstein

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Graphic: Potentially illegal tropical wood exports from Liberia.



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