Transnational Crime and the Developing World

X. Illegal Logging
A. Overview
Illegal logging is a lucrative and destructive crime, yet authorities have allowed it to flourish relatively
unchecked due to its perceived innocuous nature. It causes harm not just to the environment but to
human security and economic development as well. The revenues provide very little long-term benefit
to loggers and indigenous communities but serve as valuable financing for violent groups. With the
livelihoods of 1.6 billion people around the world dependent on forests, illegal logging is not a victimless
crime. 300
The tropical forests of Southeast Asia, the Amazon basin, and Central Africa are at the heart of the illegal
timber trade. Illegal logging, like illegal fishing and illegal mining, divests developing countries of muchneeded
revenues and jeopardizes sustainable development initiatives. Groups that engage in illegal
logging have developed new schemes involving anonymous shell companies and fraudulent agricultural
plantations to evade logging restrictions and avoid scrutiny.
B. Value
Illegal logging is the most profitable natural resource crime, outpacing wildlife trafficking, illegal fishing,
illegal mining, and crude oil theft. Illegally-procured timber accounts for 10 to 30 percent of the total
global trade in timber products, 301 and this figure jumps to 50 to 90 percent for some tropical wood
countries. 302 The global forestry products trade was worth US$522 billion in 2014, thus illegal logging is
estimated to be valued at US$52 billion to $157 billion dollars per year. 303
Little of the profit from illegal logging accrues to those engaged in harvesting the timber, while the largest
sums are earned by those who finance the operation. In Table V on Peruvian mahogany, the loggers
or the indigenous community that agrees to the logging earn US$70 per cubic meter (m 3 ), whereas the
headman or patrón sees the greatest return, earning US$626 for the same piece of timber that they
purchased for US$155, an increase of more than 300 percent. 304 By the time the wood reaches the
importer, the price has increased by 5,200 percent from what was paid to the loggers and/or indigenous
community.
Table V. Value Chain for Peruvian Mahogany, per cubic meter (US$)
Participant
Amount Receives
% Increase from
Original Purcase
Price
Loggers/Indigenous Community $70 .
Merchant/Lender/Habilitador $155 121%
Headman/Patrón $626 794%
Sawmill $1,251 1,687%
Exporter $1,804 2,477%
Importer $3,710 5,200%
Source: Julia M. Urrunaga et al.
300
Global Witness, On Dangerous Ground: The Killing and Criminalization of Land and Environmental Defenders Worldwide (London: Global Witness,
2016), 18, http://www.illegal-logging.info/sites/files/chlogging/On_Dangerous_Ground_GlobalWitness.pdf.
301
Christian Nellemann and INTERPOL Environmental Crime Programme, eds., Green Carbon, Black Trade: Illegal Logging, Tax Fraud and Laundering
in the World’s Tropical Forests, A Rapid Response Assessment (Arendal, Norway: United Nations Environment Programme; GRID-Arendal, 2012), 6,
http://www.unep.org/pdf/RRAlogging_english_scr.pdf.
302
Christian Nellemann et al., eds., The Environmental Crime Crisis, A Rapid Response Assessment (Oslo: United Nations Environment Programme,
2014), 8, http://www.unep.org/unea/docs/RRAcrimecrisis.pdf.
303
Food and Agriculture Organization of the United Nations, FAO Yearbook of Forest Products 2014, FAO Forestry Series No. 49 (Rome: Food and
Agriculture Organization of the United Nations, 2016), 226.
304
Julia M. Urrunaga et al., The Laundering Machine: How Fraud and Corruption in Peru’s Concession System Are Destroying the Future of Its Forests
(Washington, DC: Environmental Investigation Agency, 2012), 19, http://www.eia-international.org/wp-content/uploads/The-Laundering-Machine.pdf.
Transnational Crime and the Developing World 69