Transnational Crime and the Developing World

illion in revenues and taxes annually. 324 In addition to tax evasion, illegal logging is connected to white
collar crimes, including fraud related to carbon trading and “eco-certified schemes.” 325 Russia, like
many countries, allows for deferred payment of export duties. Illicit enterprises in Russia will register
a temporary anonymous shell company and bank account with tax authorities and establish export
contracts. After the timber shipments, legally or illegally sourced, are exported, the company either
closes or goes bankrupt, leaving outstanding taxes and duties unpaid. 326
Local communities may or may not receive income from illegal logging. Even if compensation is
received, since the logging is not sustainable, neither are the revenues. Indigenous groups generally
receive a fraction of the revenues for allowing illegal logging on their land compared to what they
could earn from equitable, legal logging operations. Many illegal loggers provide no compensation to
indigenous communities, illegally logging tribal lands without permission. In Brazil, the destruction of
land is further compounded when illegal loggers set wildfires to the area they have cleared in order to
cover up their theft. 327
Some illicit operators expel local communities from their land instead of paying concessions in order
to more easily access and exploit the natural resources. 328 Displacement is more common in remote
areas where populations have less protection or recourse. Forests and forest products are an extremely
important source of income for many people around the world. Of those individuals who survive on less
than a dollar a day, over 90 percent rely on forest products to earn a living. 329
Illegal logging has serious consequences on human security, from trafficking in human beings to its use
as a source for financing conflict. There are direct links between illegal logging and labor exploitation.
The International Labor Organization estimates that illegal logging in the Peruvian Amazon engages
approximately 33,000 people, primarily from indigenous groups, in forced labor. 330 This is due in part to
the country’s habilitación system of granting logging concessions that places loggers in situations similar
to debt peonage, which can trap them in debt. 331
Like drug trafficking, militias, armed groups, and terrorist organizations are actively and passively
involved in illegal logging. Illegal logging in conflict zones often contributes to financing arms purchases.
Militia and terrorist groups in African countries with ongoing conflicts earn an estimated US$111 million
to $289 million each year in passive and active income from the illegal and unregulated charcoal trade. 332
E. Recent Developments
Illegal logging operators are honing and developing new methods involving “plantations” to avoid
scrutiny. In particular, individuals and companies are using anonymous shell companies to invest in
timber and agricultural plantations, often palm oil, as a cover to evade logging moratoriums and other
laws. These “plantations” never progress to actual agricultural production, because clearing the land
(i.e., logging) is the ultimate goal rather than a necessary pre-production step. 333
In Indonesia, these fictitious plantations are sometimes established with the assistance of government
subsidies, compounding the amount of fraud perpetrated against the government. 334 It is estimated that
324
Nellemann and INTERPOL Environmental Crime Programme, Green Carbon, Black Trade, 13.
325
Nellemann et al., Rise of Environmental Crime, 65.
326
Wyatt, “The Russian Far East’s Illegal Timber Trade,” 25.
327
Scott Wallace, “Illegal Loggers Wage War on Indigenous People in Brazil,” National Geographic News, January 21, 2016, http://news.nationalgeographic.com/2016/01/160120-brazil-illegal-logging-indigenous-people-Amazon-Basin-Awa-ibama/.
328
Nellemann and INTERPOL Environmental Crime Programme, Green Carbon, Black Trade, 29; Jeff Abbott, “Indigenous Community Wins Land
Rights Victory in Guatemala After 200 Years of Struggle,” Upside Down World, August 6, 2015, http://upsidedownworld.org/archives/guatemala/
indigenous-community-wins-land-rights-victory-in-guatemala-after-200-years-of-struggle/; Bonnie Jo Mount, “Amazon Residents Resort to Militias to
Keep out Illegal Loggers,” Washington Post, October 6, 2015, http://www.washingtonpost.com/sf/world/2015/10/06/loggers/.
329
Global Witness, Forest Carbon, Cash & Crime, 3.
330
Fellipe Abreu, “Inside Peru’s Illegal Logging Industry,” InSight Crime, July 31, 2014, http://www.insightcrime.org/news-analysis/inside-perus-illegallogging-industry.
331
Urrunaga et al., Laundering Machine, 13.
332
Nellemann et al., Environmental Crimes Crisis, 8.
333
Ibid., 63.
334
Nellemann and INTERPOL Environmental Crime Programme, Green Carbon, Black Trade, 48.
Transnational Crime and the Developing World 73