The Lacey Act

Wood products can be sourced illegally in many ways. Trees can be cut illegally by logging without a valid permit, logging within protected areas, removing more trees than allowed by a logging permit, logging beyond the boundaries of a permit, or logging protected species.6 In many cases, illegal logging is organized by criminal enterprises and involves bribing local officials, ignoring laws, and using violence to access trees that would otherwise be off-limits.

Around the world, illegally harvested timber reaches international markets by being laundered, using an array of tactics. Often times, documents are falsified and illegally harvested timber is matched with legal logging permits. In some instances illegally harvested wood makes it to market by bribing officials and avoiding taxes and fees.

More than half of Peru is covered by the Amazon rainforest. For decades, illegal loggers have traveled deep into the Amazon, cutting valuable hardwoods for sale on the international market. In an in-depth report, The Laundering Machine,7 the Environmental Investigation Agency detailed the well-oiled machine that takes trees from the Peruvian Amazon to markets in the United States.

Inside the country, it is widely known that illegal logging is rampant. A small number of companies and individuals use networks of contacts throughout the country to log protected areas, exploit forced labor, and pass illegal wood off as legal for export. In remote areas of forest, local bosses coordinate teams of loggers, often underpaying them or not paying them at all for the tough task of cutting and transporting massive trees. Logs are then transported to sawmills, where they are converted into planks for export. In many cases, official logging permits are then matched with illegally harvested timber, effectively laundering the wood before export.

Illegal logging in Peru threatens more than the environment, it harms people. EIA’s report chronicled unsafe working conditions, forced labor and threats of violence to workers that disobeyed orders. In other instances, female employees promised good pay to work as cooks were expected to perform sexual services in addition to cooking three meals a day.

Located in West Africa, Liberia contains some of the largest remaining swaths of the Upper Guinean rainforest. Liberia’s forests support a wide range of biodiversity; however, they have also supported war. Revenues from illegal logging fueled the dictatorship of Charles Taylor, who ruled the country through a bloody civil war that ended in 2003. By some estimates, illegal logging brought in more than $100 million annually, much of which was funneled into private bank accounts used to fund the conflict.

In the aftermath of the civil war, illegal logging continued to expand. By 2012, Liberian president Ellen Johnson Sirleaf had granted logging permits covering more than half of all primary rainforests.8 The vast majority of these permits were granted illegally, allowing a few companies to snap up vast tracts of forest to log. Many of these logging concessions were used to expand palm oil plantations, threatening local communities that have long depended on forests.

Thankfully, in 2013, President Sirleaf placed a moratorium on logging under these permits and pledged to reform Liberia’s forestry sector. In 2014, Norway pledged $150 million to Liberia in an effort to strengthen forest governance and end deforestation in the country by 2020.9 While these reforms do provide hope for Liberia’s forests and communities, it is critical that they be fully implemented.

Stretching from Europe to the Pacific Ocean, Russia’s forests cover more than half of the country and account for roughly 20 percent of all forestland worldwide.10 These vast forests support communities and a wide range of flora and fauna. They also serve as one of the world’s largest carbon sinks, or storage areas.

Although Russian forestry accounts for less than 4 percent of the international wood products market, there is money to be made in illegal logging, particularly in the Russian Far East, where illegal timber is smuggled to China for export. The forests in the Russian Far East are home to the last 450 Siberian tigers in the wild, as well as stands of oak, ash, and elm. Unfortunately, rampant corruption and lax enforcement has led to widespread illegal logging. According to analysis by the World Wildlife Fund, in 2010 at least half of all oak imported from Russia to China was illegal.11

In 2013, the Environmental Investigation Agency released a report after years of undercover investigations, tracking illegally logged wood from Russia to China. 12EIA’s investigation found that Lumber Liquidators, the top hardwood flooring retailer in the United States, allegedly sourced oak flooring from timber illegally logged in the Russian Far East, some of the last remaining Siberian tiger habitat. The United States Department of Justice has since launched an investigation into Lumber Liquidators and possible violations of the Lacey Act.

Made up of nearly 18,000 islands in the Pacific and Indian Oceans, Indonesia is home to the third-largest area of tropical rainforest in the world. Home to many rare species of plants and animals, including Sumatran tigers, orangutans, and the Javan rhinoceros, much of this ecologically rich rainforest is found on the islands of Borneo and Sumatra.

Over recent decades, demand for pulp, paper, and palm oil have mixed with corruption to create one of the world’s highest rates of deforestation. A recent study found that between 2000 and 2012, Indonesia lost 6.02 million hectares of forest -- an area nearly the size of West Virginia.13

In recent years, the expansion of palm oil plantations in Indonesia has been the leading driver of deforestation. From corruption in permitting new palm oil plantations to lack of enforcement of permit boundaries and logging practices, palm oil development has led to widespread illegal logging.14 The expansion of palm oil plantations must be reined in to stop illegal logging and protect Indonesian rainforests.

Threat

Illegal logging not only harms plants and animals but also threatens communities by destroying the forests on which they depend and protect, depriving local governments of revenues, and fueling organized crime. Throughout the world, illegal logging operations encroach on communities, often using the threat of violence, with workers facing dangerous working conditions and human rights abuses.

Throughout the past year, we have seen tragic reminders of the threats some communities face. In a remote region near Peru’s border with Brazil, a prominent activist, Edwin Chota, was shot and killed along with three community leaders. Illegal loggers who have long tried to extract tropical hardwoods in nearby forests are the suspected killers. Unfortunately, these slayings are not an isolated occurrence. According to a recent report by Global Witness, more than 900 people were killed from 2002 to 2013 while trying to protect the environment and land rights. While this violence has spread around the globe, Latin America has been particularly affected, with Brazil accounting for nearly 450 of these cases.

Benefit

By stemming the import of illegally sourced wood products into a major market, the Lacey Act reduces demand for illegally logged timber. Further, the Lacey Act provides companies with a strong incentive to examine their supply chains and engage with timber-producing countries to ensure the legality of their wood products. Improving forest governance can provide communities with more input into land management decisions, protect community property rights, drive more sustainable harvests, and create safer working conditions.

Threat

Around the world, our forests store vast amounts of carbon. In fact, forests store 650 billion metric tons of carbon dioxide, more than is found in the entire atmosphere.15 Deforestation, driven in many areas by illegal logging, is responsible for 17 percent of worldwide greenhouse gas emissions.16 Put another way, that’s more than one and a half times the emissions from all road, rail, air, and ship travel worldwide.17

Benefit

Illegal logging is down, but not out. Since peaking in the mid-2000s, illegal logging has decreased by 50-75% in key timber producing countries.18 Thanks to strong action by countries that consume timber, such as the enactment of the US Lacey Act and the European Union Timber Regulation, imports of illegal timber dropped 30% between 2004 and 2010.19

Reducing deforestation keeps climate-disrupting pollution out of the atmosphere and protects important ecosystems. According to a 2010 Chatham House report, efforts by producer and consumer countries protected 17 million hectares of forest - roughly the size of Florida - from degradation over the previous decade, keeping 1.2 billion tons of carbon pollution out of the atmosphere.20 In the United States, preliminary analysis by the Union of Concerned Scientists found that full enforcement of the Lacey Act could keep 27 million metric tons of carbon pollution out of the atmosphere each year.

Threat

There is a lot of money to be made in illegal logging. The United Nations Environment Programme estimates that illegal logging is worth somewhere between $30-100 billion annually. By circumventing legal processes, illegal logging deprives communities of tax revenue. According to the World Bank, countries lose some $10 million in revenues from illegally harvested timber and an additional $5 million on evaded taxes on legal logging.21

In the United States, imports of cheaper, illegally sourced wood products undercut American workers that play by the rules by depressing prices of wood products and decreasing the value of U.S. exports. Including the effects of cheaper products sold domestically and less valuable exports, it is estimated that illegal logging costs American companies $1 billion annually.22

Benefit

The Lacey Act not only reduces deforestation and carbon pollution but also protects jobs. From logging to product assembly and manufacturing, the United States wood products industry is a major employer. According to the U.S. Bureau of Labor Statistics, roughly 36,530 people are employed by the forestry and logging sector.23 Additionally, more than 370,000 people work in the wood products manufacturing sector.24

If no illegally sourced timber were traded on the world market, the value of U.S. wood product exports would increase $460 million annually.25 According to analysis by the Union of Concerned Scientists, ending U.S. imports of illegal timber and replacing half of them with domestic production would create roughly 200,000 jobs.