Which 10 bilateral product flows have most salience

to future international effort against “Illegal Timber”?

Statistics abstracted from http://www.globaltimber.org.uk/IllegalTimberPercentages.doc (@ 17/07/2006)

Presented by James Hewitt (Independent business consultant)

Illegal Logging Update & Stakeholder Consultation, Chatham House, 21/07/2006

jehewitt24@msn.com

Who knows how much Illegal Timber is traded?

Failure of G8 under its 2005 President Blair to act on Civil Society request to measure and monitor trade in Illegal Timber

World Bank’s US$10-15bi pa - now out of date; not subdivided by country

FAO and UNECE - considering how to report on Illegal Timber

Baltic 21 - focusing on transparent timber trade flows

Estimated RWE volume and import value of trade in Illegal Timber during 2005: 70 million m3 (c5-10% greater than 2004) and US$13 billion

Producer countries - are those who have power a major part of the problem?

Why estimate how much Illegal Timber is traded?

1) to identify which bilateral~product flows warrant international scrutiny

2) to optimise effort, devote 20% of scrutiny to the leading 80% of trade flows

4) to lobby for support

3) to design targets and appraise progress

Fundamental to multi-national strategy against trade in Illegal Timber

5) to assess impact on legitimate trade (e.g. AF&PA)

But risk of:denigrating timber vis à vis alternative materials for boats, building, furnishing, etc.However, those materials might be associated with illegality (and conflict)

Major concessions: visibility, management resources, export earning

Failure to publish - implies illegality (corruption)

State secrets? X Stewardship? √

Maintain a public register devoted to major concessions, giving details of: 1) location (GIS), ownership, duration, management plans, etc 2) annual log production Vs volume authorised 3) major court cases, judgements and any penalties actually paid

Compile separately for conversion forest, permanent forest or plantation

Transparency - a tool to inhibit illegality

Maintain a public register devoted to persistent large mismatches between export and import declarations. Include notes on action taken, the shipping company, consignee/consignor, product, port etc - Indonesia/Malaysia/China

Repackage the data, with annotations, to maximise its usefulness

Major Concessions

Allocation/ Re-

Allocation

ForestManage-

mentPlans

IllegalLogging

Economiccrime

OtherPermits

andElsewhere

Others

Brazil (Amazonia) 40% 40% 20% 30% 30% -Burma ? ? ? ? 90% -Cameroon 20% 30% 10% 10% 30% -

China 10% ? 20% ? 10% 20%Congo (Brazzaville) 30% 60% 40% 30% 0 -Equatorial Guinea 80% 80% 80% 90% 0 -

Gabon 10% 60% 10% 50% 10% -Ghana 30% ? 20% 30% 30% -Indonesia – Timber 30% 20% 20% 30% 50% -

Indonesia – Pulp ? 0% 30% 30% 50% 70%Ivory Coast ? ? ? ? ? 70%Malaysia 10% 5% 0 10% ? 5%

Papua New Guinea 90% 90% 20% 20% 0 -Russia (East) ? ? 10% 20% 40% -Russia (West) 5% ? 10% 15% 5% -

Solomon Islands 50% ? 50% 70% 10%

Why not measure legality against specific parameters?Estimates of the percentage of timber exports that is suspect under the given heading

In order to improve these “first iteration” estimates, please contact info@globaltimber.org.uk

Modify these to reflect the range of likely sources supplying each bilateral flow

Top Ten bilateral flows of Illegal Timber products

Top Ten = 35% (RWE volume basis) of trade in Illegal Timber (25mi m3 RWE & US$4.5bi cif)

2005 Estimated trade (2005)Illegal Timber

Illegal + Legal trade (2005)(RWE volume basis)

Supplyingcountry

Importingcountry

ProductRWE

volume(million m3)

Import value(US$ billion

cif)

For the givenproduct:

Importingcountry’s importsas a proportion

of supplyingcountry’s exports

Given productas a proportion

of importingcountry’s

timber importsfrom supplying

country

China USA Furniture 1.8 1.6 56% 48%

China USA Plywood 2.0 0.3 34% 32%

Indonesia Japan Plywood 3.4 0.7 40% 88%

Malaysia Japan Plywood 1.3 0.2 43% 76%

Russia EU Sawnwood

1.9 0.2 43% 33%

Cameroon EU Sawnwood

0.5 0.2 96% 81%

Russia China Logs 12 0.9 43% 94%

PNG China Logs 1.7 0.2 75% 99%

Congo(Brazza.)

China Logs 0.4 0.1 69% 98%

Gabon China Logs 0.5 0.1 53% 83%

Notes

The estimates relate only to those imports which do not have credible chain of custody certification to forest stump (low cost Vs high benefit)

The percentages should not be applied to trade from concessions which are - credibly - progressing towards FSC or equivalent certification

One enterprise logs the great majority of China’s Illegal Timber from Congo (Bz), Equatorial Guinea, Gabon, PNG, & the Solomon Islands - whose Illegal Timber exports derive primarily from links to those in power

The two flows shown for each of the USA and Japan probably account forhalf of those two countries’ Illegal Timber imports

Economic crime (which is neither confined to the wood-based products sector nor to producer countries) accounts for much of the illegality

FLEGT VPA’s would be appropriate for the EU trade flows shown - if established (or scrapped) by, say, 2008

Which single action would achieve most impact on these flows?

Imports from China (especially by the USA):

cease importing wood products made in China unless these are accompanied by a credible chain of custody back to forest stump for both:a) the species which accounts for most of the product’s volume and b) the species which dictates how the product is marketed (e.g. its surface veneer)

Imports from South Western region of Congo (Brazzaville):

urge prospective importers (in the EU and the USA) to not procure veneer and plywood from the mills being established by that region’s leading logging group – until independent public audits credibly confirm that that group’s concessions have been properly awarded, that it has (and adheres) to plans for the sustainable management of its concessions, and that it has paid all its arrears of applicable taxes and fines (e.g. relating to log exports) to the correct part of government

Examples:

China

EU

Japan

USA

Logs

Plywood

Lumber

Lumber

PlywoodOthers

Lumber

Plywood

Others

Lumber

Plywood

Others

Logs

Others

Logs

Logs

Plywood

Lumber

Others

Illegal Timber imports during 2005 - importing country by product

Total roundwood equivalent volume: c70 million m3

30%

20%

15%

10%

25%

Japan and USA would each import only 5% of world trade in Illegal Timber if their imports of plywood from Indonesia and Malaysia (Japan) and from China (USA) and wooden furniture from China (USA) were credibly certified back to forest stump

>?50% of China’s imports are used by its export-oriented industries

Should consumer countries offer to help China minimise its illegal imports?

If China can, so can India? Nip India’s Illegal Timber (& Paper) trade in the bud

Bilateral Trade in "Illegal Logs" - 2005

0

1

2

3

4

5

6

China Japan EU India Other EastAsia

Other

Importing Country

Ro

un

dw

oo

d E

qu

iva

len

t V

olu

me

(m

illio

n c

ub

ic m

etr

es)

Other

Solomon Islands

Papua New Guinea

Burma

Malaysia

Indonesia

Gabon

Equatorial Guinea

Congo (Brazzaville)

Cameroon

Note: excludes imports from Russia

Arrow width directly proportionalto roundwood equivalent volume:

2 million cubic metres RWE

0.5 million cubic metres RWE

Bilateral trade flows - “Illegal Sawn Wood” (2005)

Showing flows greater than c100,000m3 RWE

To be read in conjunction withhttp://www.globaltimber:org.uk/IllegalTimberPercentages.doc

Indonesia: export ban (but, gross import~export mismatch in prior years)

Russia: address EU trade and apply the new norm to West Asia~North Africa

Demons in Central Asia cutting a tree - Muhammad Siyah Qalam c.1300-1500 AD - Topkapi Saray Museum, Istanbul