APPETITE FOR DESTRUCTION - EIA - Environmental Investigation Agency

32 Pages·2012·1.52 MB·English

APPETITE FOR
DESTRUCTION
China’s trade in
illegal timber
ACKNOWLEDGEMENTS CONTENTS
This report was written and edited by the
Environmental Investigation Agency (EIA).
EIA thanks the following organisations for
supporting our work on combating illegal logging; 1 INTRODUCTION
UK Department for International Development,
Anthony Rae Foundation, and JMG Foundation.
2 THE GLOBAL ILLEGAL TIMBER TRADE
This material has been funded by UKaid from the
Department for International Development.
However the views expressed do not necessarily
reflect the department’s official policies. 4 CHINA – THE WORLD’S BIGGEST TIMBER TRADER
Designed by: 9 ASIA PACIFIC REGION
www.designsolutions.me.uk
Printed on recycled paper 10 INDONESIA CASE STUDY
November 2012
12 MYANMAR CASE STUDY
16 RUSSIAN FAR EAST
17 AFRICA
18 MOZAMBIQUE CASE STUDY
22 ROSEWOOD ROBBERY
25 LOOTING MADAGASCAR’S UNIQUE FORESTS
26 TACKLING CHINA’S ILLEGAL TIMBER TRADE
28 RECOMMENDATIONS
ENVIRONMENTAL INVESTIGATION AGENCY (EIA)
62/63 Upper Street, London N1 0NY, UK
Tel: [phone]
Fax: [phone]
email: [email protected]
www.eia-international.org
EXPLANATORY NOTE:
In calculating timber flows into China used in this report,
EIA has analysed official trade data obtained from the
following sources: United Nations Commodity Trade
COVER PHOTO:
Statistics Database (UNCOMTRADE), China Trade
Logs smuggled across the land border
from Myanmar into Yunnan province, Information and Global Timber.
China, April 2012. © EIA
INTRODUCTION
© EIA
In November 2011 China hosted the imports for most of its raw materials supply. ABOVE:
annual Asia-Pacific Forestry Week It is in effect exporting deforestation. Shanghai’s futuristic riverfront
meeting conference at an impressive and
skyline reflects the country’s
vast centre near the Olympic Stadium in Although much of the wood processing
position as a leading global
Beijing. During the week-long event sector is export-oriented, the vast
economic and political power.
participants from around Asia and construction effort in China, coupled with
beyond discussed a range of issues, increasing wealth, is creating a surge
encompassing China’s impressive in domestic demand for timber products.
reforestation programme to the links A vivid example is the fashion for
between deforestation and climate change. reproduction furniture made from rare
rosewoods, which has created an upsurge
The meeting coincided with the tenth in illegal logging from the Mekong region
anniversary of the landmark Bali to Madagascar.
Declaration agreed at the East Asia
ministerial meeting on Forest Law The Environmental Investigation Agency
Enforcement and Governance in 2001. has been conducting field investigations
This event marked the first time into flows of illicit timber since 2004,
governments from the region, including covering a host of producer countries
China, had come together to address the such as Indonesia, Myanmar, Russia,
threat posed by widespread illegal logging. Laos, Mozambique and Madagascar and,
of course, China itself. The findings from
Yet meaningful discussions on illegal these investigations, laid out in this
logging were strangely absent from the report, show the impact of illegal logging
Beijing conference. This was probably out to feed China’s market; destruction of
of deference to the hosts, as over the past vital forest ecosystems, loss of revenue for
decade China has emerged as the world’s developing countries, increased corruption
leading trader in illegally logged timber. and conflict.
During the last decade, the major timber This report also includes analysis of trade
consumers of the United States, European data showing flows of illicit timber into
Union and Australia have taken action to China worth billions of dollars a year, and
exclude illicit timber from their markets. highlights imports from countries known
Timber producing countries such as to have high rates of illegal logging and
Indonesia have improved enforcement instances where national regulations such
against illegal logging. Meanwhile, China as log export bands are disregarded.
has largely stood on the sidelines.
The evidence makes a clear case for action
The astounding economic growth of China by China. It needs to take measures to
attracts a host of superlatives; its position exclude illegally logged timber from its
as the largest importer of stolen wood is market. The fate of many of the world’s
one of the more undesirable ones. Since natural forests depends on this.
the late 1990s the country has taken
strong measures to protect and grow its
own forests. At the same time it has built Environmental Investigation Agency
a vast wood processing industry, reliant on November 2012
1
THE GLOBAL ILLEGAL TIMBER TRADE
© EIA
ABOVE: Illegal logging and the trade in stolen logging causes developing countries to
Tropical logs landed at one of timber are among the most destructive lose an estimated $15 billion a year in
environmental crimes occurring today revenue and taxes.3
China’s numerous timber ports.
and directly threaten the world’s vital
forest and peatland ecosystems. Environmental impacts are equally if not
more significant than financial losses;
Illegal logging underpins a multi-billion the World Bank calculates that an area
dollar global trade in millions of cubic the size of a football field is cleared by
metres of illicit timber. A study by illegal loggers every two seconds.
INTERPOL and the United Nations Another study found that illegal logging
Environment Programme reports that contributed to the destruction of five
up to 30 per cent of annual timber million hectares of forest in 2008, and
production, and a massive 50-90 per that a 22 per cent reduction in illegal
cent of timber harvested in tropical logging over the past decade prevented
countries, is illegal, creating a $30-100 over one billion tonnes of carbon
billion global trade in illegal timber.1 dioxide emissions.4
A 2010 study estimated more than 100
million cubic metres of illegal timber is Illegal logging is often a precursor to
cut annually.2 forest clearance as pristine forests are
degraded by illegal loggers and full
Illegal logging thrives in areas with poor conversion for plantations follows. The
forest governance, where transparency huge financial flows generated by illegal
and law enforcement are weak, and logging have also exacerbated armed
fosters corruption. With such problems conflicts in numerous countries, including
common in developing countries with Sierra Leone, Liberia, Cambodia and
natural resource-focused economies, Myanmar. Violence and murder are often
these states experience the worst associated with the illegal timber trade,
impacts of illegal logging, further with loggers, journalists and local
undermining development. Illegal activists being targeted.5
2
PROGRESS IN TACKLING dollars worth of illegally exported timber
from that country.7
ILLEGAL LOGGING
A major barrier to the effectiveness of
The sheer scale and threat posed by
China’s anti-illegal logging response is
illegal logging has prompted concerted
the country’s stated unwillingness to
actions in many parts of the world
explicitly prohibit illegal timber trade.
during the past decade. Such measures
Although China’s State Forestry
are having an impact; a 2010 analysis
Administration (SFA) has engaged with
found that global illegal timber production
the international community on illegal
had reduced by 22 per cent since 2002.6
logging in recent years, it has explicitly
The reduction was largely credited to
resisted calls for legislation prohibiting BELOW:
improved law enforcement in key
illegal trade into and within the country. Merbau planks on sale in
producer countries, along with the
Yuzhu timber market,
development of legislation and market
A tentative proposal for a China Timber
Guangzhou Province, 2005.
reforms in consumer countries, principally
Legality Verification Scheme focuses on
the European Union and United States,
government-to-government bilateral
prohibiting trade in illegal timber and BOTTOM:
agreements with timber supplying
promoting legal timber trade. Merbau logs from Papua New
countries and trade association-led
procurement codes of conduct for Guinea in a log yard in Panyu,
The EU’s 2003 Forest Law Enforcement Chinese businesses abroad.8Both are Guangzhou Province, in 2005.
Governance and Trade Action Plan valid initiatives, but the proposal rules China’s imports from PNG
includes two key components; Voluntary
out any legally binding prohibition on rocketed following law
Partnership Agreements establishing
illegal timber trade, a feature essential enforcement in Indonesia.
licensing systems for verified legal
for credible implementation.
timber imported into the EU from
partner countries, and the EU Timber
Further, the SFA’s remit covers
Regulation, which from March 2013
domestic forestry rather than
bans the imports of illegal timber.
international trade policy, meaning it
alone cannot implement the measures
The 2008 Amendment to the Lacey Act,
required to align Chinese policy with
which prohibited trade in illegal timber
emerging global timber trade reforms.
in the US, established the concept of due
Instead, the active involvement of the
care as a core mitigation incentive and
ministries of commerce and foreign
required importers to file declarations on
affairs is needed. China is now the
the nature and origins of timber imports.
world’s biggest trader in illicit timber.
Further progress to remedy the
Australia followed suit on November
damage caused by illegal logging
19, 2012 and similar measures are also
depends on the country taking the
under discussion in other markets, such
necessary regulatory measures to
as Japan. close its market to illegal supplies. © EIA
CHINA’S LACK OF ACTION
China’s role as the world’s biggest timber
trader means that further progress
against illegal logging depends on the
nation taking measures to exclude illicit
timber from its market. Yet while other
major consumer markets have acted,
China remains firmly on the sidelines.
To date, China’s response has been
to conclude a series of bilateral
agreements with both producer and
consumer countries, including a 2002
Memorandum of Understanding (MoU)
with Indonesia, a 2006 MoU with
Myanmar, a 2008 MoU with the US,
and a 2009 EU-China Bilateral
Coordination Mechanism on Forest
Law Enforcement & Governance.
While these agreements have resulted
in some limited progress, such as a
drop in cross-border timber trade with
Myanmar, generally they provide a
mechanism for discussion rather than
action and have failed to regulate
China’s rising imports of illegal timber.
Since signing its MoU with Indonesia,
China has imported about one billion © EIA
3
CHINA – THE WORLD’S
BIGGEST TIMBER TRADER
© EIA
ABOVE: CHINA’S TIMBER DEFICIT In 2006, China’s National Development
Illegal merbau logs from Indonesia and Reform Commission warned of the
wood deficit reaching 150 million cubic
and Papua New Guinea, in Demand for timber and wood products
metres and called for policies such as
Zhangjiagang port, China, 2004. in China for domestic consumption or
boosting domestic production to close
Up to 300,000 cubic meters of such re-export as processed wood and paper
the gap. And yet it continues to grow;
products has soared during the past 15
logs were smuggled to China from
in 2009, domestic supplies accounted
years. The country is now the world’s
Indonesia every month until law for only 38 per cent of consumption.
biggest importer, consumer and exporter
enforcement reduced supply.
of timber and wood products. China’s
To bridge the gap, China has become
rise as a vast manufacturing hub has
the world’s biggest importer of wood
included rapid expansion of its wood
products. In 1997, it imported 35 million
processing industry. A six-fold increase
cubic metres of wood products; by
in gross domestic product since 2002
2009, it reached 113 million cubic
has generated huge wealth, prompting
metres. Demand in China is now being
a rising demand for wood and paper
felt around the world as the number
products within the country. By 2007,
of countries from which it sources
China’s consumption of wood products
wood increases.
had reached 371 million cubic metres
a year; at current rates of growth, it
will rise to 477 million cubic metres
CHINA’S WOOD PRODUCTS
by 2020.9
IMPORTS
In 1998, the unparalleled growth of
China’s wood manufacturing sector
EIA’s analysis of 2011 trade data shows
began, even as the Government imposed
that China imported around 180 million
strict logging controls following floods.
cubic metres (Round Wood Equivalent,
With domestic forests incapable of
or RWE) of wood products, worth
meeting such phenomenal growth in
$9.3 billion. This represents a 28 per
demand, a gaping timber deficit has
cent increase on 2010 volumes and a
emerged which poses a direct threat to
three-fold increase since 2000.
global forests.
Composition of the imports demonstrates
China’s role as a processing centre,
Despite commendable efforts at
reforestation which have led to an with the bulk comprising round logs,
increase in the country’s forest cover, sawn timber wood chips and pulp for
domestic supply can at best meet only paper manufacture.
50 per cent of the wood and paper
industry’s required raw materials. China has registered a dramatic increase
With demand expected to continue in combined paper, pulp and wood chips
growing at around eight per cent a imports, from 37 million cubic metres (RWE)
year, the deficit between demand and in 2000 to nearly 98 million cubicmetres
domestic production had risen to 150 (RWE) in 2011, accounting for 53 per
million cubic metres per year by 2010.10 cent of total wood productimports.
4
Imports of timber products (logs, sawn due to a sharp overall rise in imports,
timber, furniture, plywood and other supplies from high risk sources actually
products) have also risen rapidly during increased by 4.1 million cubic metres
the past decade, with China’s trade (RWE) to 15.4 million cubic metres
policies promoting increased raw material in 2011.
imports such as logs and sawn timber as
opposed to higher-value finished and Overall, 37.4 million cubic metres
semi-finished products such as plywood. (RWE) of the 70.4 million cubic metres
(RWE) of logs and sawn timber imports
China relies heavily on timber imports from China’s 10 biggest suppliers came
for both hardwood and softwood logs from high risk countries in 2011, a
and lumber, in both tropical and 6.5 per cent increase from 2010. More
temperate species. than half of China’s current supplies of
raw timber material are sourced from
Log Imports countries with a high risk of illegal
China’s huge and growing demand for logging and poor forest governance.
raw logs has dominated the country’s
timber imports throughout the past
decade, with an average 33 per cent of CHINA’S WOOD PRODUCT
its log consumption met by imports
EXPORTS
between 2000-09.11From log imports in
2000 of 13.6 million cubic metres valued
at $1.6 billion, China’s imports by 2011 China’s total wood products exports
had more than trebled by volume to 42 have increased nearly sevenfold in the
million cubic metres worth $8.2 billion. past decade, from $5 billion worth in
China imported around 30 per cent of all 2000 to $34.2 billion in 2010, a volume
logs traded worldwide in 2011. of 71 million cubic metres (RWE) of
timber products, pulp and paper.
Russia was by far China’s top log Excluding paper, its 2010 wood product
supplier in 2011, with exports of exports amounted to 48.4 million cubic
14 million cubic metres; this despite a metres (RWE) valued at $24.7 billion.
major drop in log shipments to China
since 2007, partly as a consequence of In terms of wood products, wood
a Russian log export tax. furniture is by far China’s biggest export
category by value, with 2010 sales of
The United States has increased log $15.8 billion, using 19 million cubic
supplies to China since 2009, reaching metres (RWE) of timber. The second
second place in 2011 with exports of largest category is paper, with exports
4.8 million cubic metres; Papua New of $9.57 billion, using 23 million cubic
Guinea was China’s third biggest log metres (RWE) of timber, followed by
supplier in 2011, shipping 2.7 million plywood and wood panel shipments
BELOW:
cubic metres. worth $3.26 billion and a volume of 16.5
million cubic metres (RWE). Remaining Illegal merbau logs feeding one
Among China’s top 10 log suppliers, exports comprise a wide array of wood of hundreds of wood flooring
import volumes from countries with products, including flooring, mouldings factories in Nanxun, Zhejiang
a low risk of illegal logging, such as and joinery.12 province, China, 2004.
the US, have increased by 65 per cent
from 2010 levels. However, due to the
massive overall rise in imports the
volume of supplies from countries
considered to be high risk have not
fallen. Approximately two-thirds of the
32.8 million cubic metres of logs
imported by China from its 10 largest
suppliers in 2011 came from high risk
sources. Of total log supplies to China,
52 per cent came from high risk countries.
Sawn Timber
From a relatively low baseline, sawn
wood imports have risen significantly in
recent years, reaching 38.8 million cubic
metres (RWE) in 2011. Two countries
dominated 2011 lumber imports; Canada
supplied 12.3 million cubic metres
(RWE) and Russia 10.2 million cubic
metres (RWE), followed by the US,
Thailand and the European Union.
As the share of lumber imports from low
risk countries in China’s top 10 suppliers
has risen to 59 per cent in the past year,
the share from high risk suppliers in the
top 10 decreased to 41 per cent. But © EIA
5
“China is now a The major markets for these exports The construction sector is the key driver
include the US, EU, Japan and the of increased domestic wood product
significant end Middle East. In 2010, the US remained consumption in China, with 36 million
China's biggest market, importing 11.9 new affordable homes to be built by 2016
market in its
million cubic metres (RWE) of wood under the Government’s five-year plan.13
own right.” products valued at US$7.7 billion, and a The increase in construction and home
further 2.99 million cubic metres of ownership is spurring a rising demand
paper sector products worth US$1.5 for a range of timber products such as
billion. The US was followed by the EU, flooring, furniture, panels and plywood.
which imported 8.48 million cubic
metres of wood products valued at Domestic wooden furniture sales grew
US$5 billion, and a further 2.4 million from about $10 billion in 2006 to around
cubic metres of paper sector products $29 billion in 2011 – a nearly threefold
worth over US$1.3 billion. Japan was increase in four years and equivalent to
China's third biggest export market in 84 per cent of the value of China’s total
2010, importing four million cubic wood product exports worldwide in all
metres of wood products valued at product types. This includes high-end
US$2.1 billion, and a further 2.1 million products made from rare and precious
cubic metres of paper sector imports hardwoods. In 2010, Chinese wood
valued at US$920 million. flooring sales reached 398 million
square metres, a 26 per cent increase
in one year.14
CHINA’S DOMESTIC TIMBER
In 2007, Deutsche Bank estimated
CONSUMPTION
that only 16 per cent of the country’s
wood products output was destined
Despite a lack of robust data on China’s for export, with the remainder consumed
domestic consumption of wood products, domestically.15 Other sources have
a range of anecdotal information and estimated domestic consumption
snapshots of specific sectors of the at similar proportions of between
economy show that as the country 75-85 per cent of overall production.
becomes wealthier its demand for wood
BELOW: is rapidly rising. When previously
A luxury table set made with confronted with concerns about imports CHINA’S ILLEGAL TIMBER
of illegally logged timber, Chinese officials
Himalayan Yew from Myanmar, IMPORTS
responded by claiming most of the wood
on sale for $6,000 in Tengchong,
was re-exported as finished products
Yunnan, China, April 2012. and that China was merely a processor, As China has risen to become the
Himalayan Yew is listed on with most of the value accruing in end world’s biggest importer of timber
Appendix II of the Convention markets such as the US. This is clearly products, it has also emerged as the
on International Trade in no longer the case and China is now a leading destination for illegally logged
Endangered Species (CITES). significant end market in its own right. t imber, especially logs and lumber. As
illegal logging and wood smuggling are
by nature clandestine and criminal
activities, an exact quantification of the
volume of illicit wood entering China is
challenging. Yet by combining material
flows with rates of illegal logging in
source countries, credible estimates
can be made.
A 2009 study found China had the highest
total supply and use of illegally harvested
timber worldwide, consuming between
39-69 million cubic metres (RWE) of
illegal timber in 2008.16With these
estimates representing 37-66 per cent
of China’s 2008 imports of 104 million
cubic metres (RWE), applying these
percentages to China’s 2011 imports
of 180 million cubic metres (RWE)
implies that between 68-120 million
cubic metres of imports may have
been illegal.
Another 2010 study calculated that
20 per cent of China’s wood imports in
2008 were of illegal origin.17Applying
this percentage to 2011 imports
suggests China might have imported
around 36 million cubic metres (RWE)
of illegal wood products last year,
© EIA worth $6.9 billion.
6
© EIA
ILLEGAL LOGS AND LUMBER made up 54 per cent of the volume ABOVE:
and 58 per cent of the value of all
IN 2011 Tropical logs stored at Nanwei
log imports from the 36 countries
Port, near Nansha, Guangdong,
in question.
November 2005.
EIA has sought to update estimates of
China’s imports of illicit timber by Major flows of illegal logs include 5.6
scrutinising trade data for logs and million cubic metres from Russia, 2.5
sawn timber for 2011 and assessing the million cubic metres from Papua New
flows based on illegal logging rates for Guinea, 1.5 million cubic metres from
36 high risk supplier countries. These the Solomon Islands, 500,000 cubic
rates have been derived by taking metres from each of Myanmar and Congo
lower-end estimates from previous Brazzaville, 270,000 cubic metres from
studies, with a weighting given to more Equatorial Guinea and 183,000 cubic
recent assessments. metres from Mozambique.
From this analysis, EIA estimates China The assessment also shows that China’s
imported at least 18.5 million cubic 2011 imports of illegal sawn timber
metres (RWE) of illegal logs and sawn reached 6.7 million cubic metres (RWE),
timber in 2011, worth $3.7 billion. worth $1.05 billion and equivalent to 39
These constituted 10 per cent of China’s per cent of the volume and value of total
total wood products imports in 2011. imports from the countries concerned.
The volume of illicit timber would be Major flows of illegal sawn timber
enough to fill Beijing’s Olympic Stadium include 4.3 million cubic metres (RWE)
more than six times, or around 900,000 from Russia, 1.3 million cubic metres “China imported at
standard 20ft shipping containers. (RWE) from Indonesia, 141,000 cubic
least 18.5 million
metres (RWE) from Myanmar and about
While these volumes are lower than 85,000 cubic metres (RWE) from Peru, cubic metres (RWE)
other overall estimates, EIA has only Thailand and Malaysia.
of illegal logs and
analysed logs and sawn timber imports
which constitute just 45 per cent of
sawn timber in 2011,
total wood product imports by China. DELIVERING THE GOODS
The focus on raw timber material is worth $3.7 billion –
deliberate, as EIA’s field investigations While China’s emergence as the
into flows of illicit wood into China world’s biggest importer of illegal enough to fill
focus on these commodities. timber is due to its emergence as a Beijing’s Olympic
major wood processing hub and its
EIA’s analysis indicates that illegal log burgeoning domestic market, it is Stadium more than
imports alone reached 11.8 million cubic also a consequence of Government
six times”
metres, worth $2.7 billion. Illegal logs policies.
7
“Chinese state-owned In response to severe flooding in 1998, 2007, China introduced a 10 per cent tax
China adopted a Natural Forest on exports of solid wood flooring, yet a
companies imported Conservation Programme which instituted full rebate is given to companies using
a logging ban across 41.8 million imported raw materials.
46 per cent of all
hectares of natural forests. It also
tropical logs shipped embarked on a massive programme of In addition, China’s state-owned
reforestation, which has seen its forest companies play a strategic role in
to the country in cover increase to 20.36 per cent by securing supplies of forest resources
2008, compared with 18.5 per cent four from overseas. EIA’s analysis of
2007, including
years earlier. The Government spent China’s trade data for 2007 reveals that
45 per cent of all $31 billion on tree planting between state-owned companies imported 4.7
1999 and 2009.18 million cubic metres of tropical logs,
log imports from equivalent to 46 per cent of the total
While the domestic forest conservation volume.19Overall, state enterprises
Papua New Guinea
policies of the Chinese Government are imported 12 per cent of all logs entering
and Mozambique.” admirable, the tree planting has focused China in 2007, including significant
on relatively low grade plantation flows from countries with weak forest
forests of fir, poplar and pine and is governance. For example, 45 per cent of
insufficient to meet the ever-rising raw all logs from Papua New Guinea were
material demands of the country’s wood shipped to state enterprises and 44 per
processing industry, especially for cent from Mozambique.
slow-growing hardwoods.
Many of the companies are owned by
The gap between domestic timber provincial governments, often
supplies and the volume of timber used established to drive economic growth
by the industry has in effect led to China within their jurisdictions. The biggest
exporting deforestation to a host of state-owned importer of tropical logs in
countries around the world. 2007 was SIIC Shanghai International
Trade Group, which alone imported a
China’s preference for raw timber to massive 847,000 cubic metres of
feed its factories has also created an tropical logs – eight per cent of China’s
unprecedented situation where long total and more than double the biggest
supply chains from South America, private sector importer.
Africa and Asia have emerged to funnel
logs into the country for processing. It is EIA research also shows that
BELOW:
undoubtedly the policy of the Chinese state-owned firms have imported logs
Flooring blanks in a Nanxun
Government to promote imports of raw from countries where such exports
factory, June 2009. Chinese tax materials and exports of finished wood are banned, such as Indonesia and
policies enable exporters to products. For example, by 2001 import Mozambique and are directly involved
recoup a 10 per cent export tax tariffs levied on logs and sawn timber in logging operations in countries
on solid wood flooring if they had been eliminated. Taxation rates also where illegal logging is rife, such
import raw materials themselves. play a role in reinforcing this policy. In as Myanmar.
© EIA
8