Illegal logging is a pervasive problem throughout the world, affecting countries that produce, export, and import wood and wood products. Illegal logging is generally defined as the harvest, transport, purchase, or sale of timber in violation of national laws. In some timber-producing countries in the developing world, illegal logging represents over half of timber production and exports. The World Bank estimates that illegal logging costs governments approximately $15 billion annually in lost royalties. Illegal logging may stimulate corruption, collusion, and other crimes within governments, and has been linked to the purchase of weapons in regional conflicts in Africa. Illegal logging, however, benefits perpetrators by reducing the cost of legal and regulatory compliance of timber harvesting, sometimes resulting in higher profits. Illegal logging in protected areas can lead to degraded forest ecosystems, loss of biodiversity, and indirectly to deforestation and the spread of agrarian activity in some developing countries.
Several relevant multilateral and international agreements address illegal logging and illegal timber trade. These range from voluntary agreements that, for example, allow consumer countries to exchange data with producing countries, to legally binding multilateral agreements that enable signatory governments to seize illegal products and exercise financial and criminal penalties on those who possess or transport illegally produced timber.
The United States is the world’s largest wood products consumer and one of the top importers of tropical hardwoods. Some are concerned that U.S. demand for tropical timber from countries in Latin America and Southeast Asia may be a driver of illegal logging. Others assert that if there were no illegally logged wood in the global market, the value of U.S. exports of timber could increase substantially. The United States has no specific domestic laws that address all aspects of illegal logging. Logging within the United States is addressed by several laws and regulations — some federal, but many state — that depend on what species is logged, and where and how it is done.
In 2003, the United States developed an initiative to help developing countries stop illegal logging. This initiative aims to remove legal and institutional barriers to combating illegal logging; promote technology to improve monitoring the legal trade in logging; and create incentives to abolish illegal logging practices in rural communities. The United States also addressed illegal logging in a free trade agreement (FTA) with Peru. The agreement requires that the Peruvian government enforce its international treaty obligations and increase monitoring and enforcement of illegal logging in its country.
Illegal logging is addressed by Congress in the 2008 farm bill (P.L. 110-234). A provision in the law amends the Lacey Act to include plants traded in violation of foreign laws. This was primarily intended to deter imports of illegally obtained timber from foreign countries. Contents
Table 1. Estimates of Illegal Logging in Foreign Countries . . . . . . . . . . . . . . . . . 31 “Hardwoods” is a term commonly used for trees in the phylum Anthophyta (angiosperms, or flowering plants), because the dominant hardwood tree species of temperate climates (oaks and maples) are harder (more dense) than the major “softwood” species (pines, firs, and spruces), trees of the order Coniferales (conifers). However, some “hardwood” species (e.g., aspen and poplar) are much softer (less dense) than many “softwoods.” In this report, “hardwood” is used to indicate angiosperms, while “softwood” (or conifer) is used for coniferous species.
Seneca Creek Associates, LLC, and Wood Resources International, LLC, “Illegal” Logging and Global Wood Markets:The Competitive Impacts on the U.S. Wood Products Industry, prepared for American Forest & Paper Association (November 2004), 154 pp. Hereafter referred to as Illegal Logging and Global Markets.
World Bank, A Revised Forest Strategy for the World Bank Group (Washington, DC: October 31, 2002).
For example, logging illegally within designated park boundaries could lead to environmental impacts such as habitat alteration and loss of timber species; also the illegal acquisition of permits and evasion of royalties could promote corruption.
Natural Resources Defense Council, Trade in Bigleaf Mahogany: The Need for Strict Implementation of CITES (September 2006), available at [http://docs.nrdc.org/international/ int_06090001A.pdf].
Illegal Logging and Global Markets.
Illegal Logging: Background and Issues
Illegal logging is a pervasive problem affecting countries that produce, export, and import wood and wood products. Some have estimated that between 2% and 4% of softwood lumber and plywood traded globally, and as much as 23% to 30% of hardwood lumber and plywood traded globally, could be from illegal logging activities.
The World Bank estimates that illegal logging costs governments approximately $15 billion annually in lost royalties.
Illegal logging is a concern to many because of its economic implications as well as its environmental, social, and political impacts.
Some are concerned that U.S. demand for tropical timber from countries in Latin America and Southeast Asia may be a driver of illegal logging. The United States is the world’s largest wood products consumer and one of the top importers of tropical hardwoods. For example, the United States is the largest importer of Peruvian mahogany, which some estimate to be 80% illegally logged.
contend that illegal logging activities devalue U.S. exports of timber. According to one study, illegal logging of roundwood and its wood products depresses world wood prices on average by 7%-16% annually. If there were no illegally logged wood in the global market, it has been projected that the value of U.S. exports of roundwood, sawnwood, and panels could increase by an average of approximately $460 million each year.
(This estimate is provided by a U.S. industry trade association opposed to low-cost imports.) CRS-2
Illegal Logging and Global Markets.
M. R. Auer, D. Ingram, and C. Farley, Towards an Improved Understanding of Illegal Logging and Associated Trade, U.S. Forest Service, International Programs (Washington, DC, May 30, 2003).
A. Contreras-Hermosilla, Forest Law Enforcement: An Overview, World Bank Discussion Paper (Washington, DC: June 19, 2003).
Scope and Scale of Illegal Logging
No internationally accepted definition of illegal logging exists, and there is considerable debate over definitions that have been presented. For example, logging without a government-approved management plan may be legal in parts of the United States, but illegal in Brazil.
Definitions of illegal logging can be specific or broad.
Illegal logging can be broadly defined as “large scale, destructive forest harvesting that transgresses the laws of the nation where said harvesting occurs.”
An example of a specific definition is provided by Conteras-Hermosilla, where 12 activities are defined as illegal logging, including the following:
! Logging protected species;
! Duplication of felling licenses;
! Girdling or ring-barking, to kill trees so that they can be legally logged;
! Contracting with local entrepreneurs to buy logs from protected areas;
! Logging in protected areas;
! Logging outside concession boundaries;
! Logging in prohibited areas such as steep slopes, riverbanks, and water catchments;
! Removing under/oversized trees from public forests;
! Extracting more timber than authorized;
! Reporting high volumes of timber extracted in forest concessions to mask the volume taken from areas outside concession boundaries; ! Logging without authorization; and
! Obtaining logging concessions through bribes.
Due to the often clandestine nature of illegal logging, the variability in defining illegal logging, and the difficulty of obtaining large-scale data on illegal logging practices in many countries, estimates on the extent of illegal logging are difficult to quantify. A variety of techniques are used to determine where illegal logging is most prevalent. Examples include government records, court cases, witness accounts, interviews, and satellite imagery. Using these data and other sources, some estimate that the three countries where illegal logging is greatest (in terms of volume in 2003) are Russia, Indonesia, and Brazil. Other estimates of illegal logging activities that are derived from a variety of measures are presented from a sample of countries in Table 1.
Ecological Impacts of Illegal Logging
Several ecological impacts can be associated with illegal logging practices. These impacts depend on how illegal logging practices are defined and where they occur. If illegal logging is characterized as large-scale destructive logging, it can potentially lead to the conversion of forests to grassland, depletion of plant species (e.g., tree species such as mahogany), and in some cases depletion of animal populations that depend on the habitats being logged. If logging illegally occurs in protected areas, important biological resources (e.g., rare plant and animal species) may become threatened. If logging is not done according to mandated management plans, it can potentially lead to collateral damage, whereby other tree species and younger trees are damaged, risk of fire is increased, and potential for sustainable harvesting of timber is lowered.
In some instances in the tropics, logging has been characterized as the initial stimulus for road-building, which leads to greater access to primary forests. If illegal logging occurs in protected areas, improved access to these areas through logging roads may lead to further activities such as clear-cutting, ranching, and agricultural development in the area.
Socioeconomic Impacts of Illegal Logging
Illegal logging can have economic impacts in the countries where it occurs. In several countries where illegal logging takes place, the volume of timber extracted illegally is greater than the official harvested total. Further, illegal logging and trade are connected to other illegal activities such as corruption, tax evasion, and money laundering, among other things.
If illegal logging is prevalent in a country, there may be a low propensity to invest. For example, illegal logging may signal that law enforcement is lax and that corruption is prevalent. These factors may deter longterm investment in these countries and may increase costs for investors already involved in the country. One definition of illegal logging is extracting timber without reporting it to government officials. Without reporting, governments cannot assess taxes on the wood being extracted, which results in a loss of revenue for the country. For example, Indonesia estimated that its losses from illegal logging are $3 billion annually, which is equivalent to more than 45% of the total value of its legitimate exports of wood and wood products, valued at $6.5 billion annually.
Illegal logging can arguably have a positive economic impact. Illegal logging can create jobs in impoverished areas, provide short-term low-cost timber, and satisfy governments and citizens perceive that illegal logging is beneficial to the community, some will not seek the enforcement of laws or will attempt to legalize illegal timber to preserve revenues.
Illegal logging can affect local communities in the countries where it is occurring. Local communities may depend on forests for non-timber forest products (e.g., fruits and medicines) as well as for habitat and cover for wild game and fish. Illegal logging in these areas may convert forest ecosystems to less useful ecosystems such as grasslands or savannahs. In some parts of the world, illegal logging has been termed “conflict logging,” similar in meaning to conflict diamonds. For example, money earned from the illegal trade in wood has been traced to the purchase of weapons used in conflicts such as the one between Liberia and Sierra Leone.