Illegal operations in the forest sector take place when wood is harvested, transported, processed, bought or sold in violation of national laws. While illegal logging and trade of illegal wood products have received international attention, many other illegal operations may occur in the forest sector. A non-exhaustive list is provided in Box 1.
While illegal activities are not confined to developing countries, the problems there are usually worse as resources are limited, forest land tenure is often unclear and/or discriminatory against local, forest-dependent communities and civil society is weaker. Therefore, the best practices presented in this report are mostly based on case studies carried out in developing countries.
As in other sectors, the clandestine nature of illegal forest activities makes their scale and value difficult to estimate. In many countries where illegal logging occurs, the volumes of illegally harvested wood may exceed the official annual wood harvest. For example, illegal harvests in Indonesia were estimated to have reached up to double the officially sanctioned harvest level of 25-30 million m 3 during the 1990s (Richards, 2004). Furthermore, illegal logging and illegal timber trade are usually associated with other illegalities, such as money laundering, drug trafficking, corruption of government officials and tax evasion. Thus, illegal logging and illegal timber trade can lead to huge tax losses for governments as well as negative long-term economic impacts caused by environmental degradation and increased poverty. Illegal logging also jeopardizes the livelihoods of rural communities engaged in small-scale forestry by exposing them to unfair competition and depleting the resources on which they depend. Unless these problems are addressed, investments to promote sustainable forest management will remain ineffective.
Case studies in the eleven countries examined for this report indicate that there are five general factors contributing to the occurrence of illegal activities in the forest sector (Box 2):
A number of illegalities in the forest sector can be traced back to inadequate policy and legislation (Box 3). Laws may be technically unrealistic if they prescribe activities, procedures and institutional arrangements which are not matched by adequate financial and human resources in government and civil society. Laws might also be perceived as unfair and be socially unacceptable, for instance when they neglect or even penalize local practices and norms. In many cases, laws are inconsistent or conflicting with other bodies of legislation and the consequences of their implementation are badly assessed. Combined with lack of public participation in law design and forest-related decision-making processes, this can lead to long-term adverse social, economic and environmental impacts, including increased levels of illegal forest operations (Box 4). Forest land tenure is also often unclear or discriminatory. It is therefore of utmost importance to reform the policy and legal framework in order to ensure that such flaws are eliminated and compliance facilitated. Examples of best practices to develop a sound policy and legal framework are presented in Chapter 4.
Many forest laws are not utilized or under-utilized due to lack of political will, weak institutional capacity, corruption, overall disregard for the rule of law and so on. While improving law implementation requires attention to external economic, social and institutional factors, law enforcement can also be significantly influenced by the way legislation is drafted in the first place (see previous section). There is therefore a danger in making too much of a distinction between legislation, on the one hand, and its implementation on the other (Lindsay, Mekouar and Christy, 2002). None the less, case studies carried out for this report show that many governments lack the necessary human, financial and managerial capacity to effectively ensure forest law compliance. When government institutions are weak, there is a greater inclination to engage in illegal activities, as the probability of being detected and punished is low. Best practices to build institutional capacity for law enforcement and use available resources in the most efficient way, along with examples of partnerships that improve compliance are given in Chapter 5.
Successful strategies to improve law enforcement rely on a solid knowledge of the resource base and its utilization, which governments and the general public in many countries do not possess. Forest inventories and forest management plans are either inadequate or non-existent. Many forests are located in remote and inaccessible areas, making monitoring difficult. Governments often make uninformed decisions, such as establishing allowable annual cut limits without adequate knowledge of the forest resource's sustainable yield. Without information on industrial capacities and/or utilization efficiencies, it is difficult to judge the extent to which illegal wood is being utilized. Lack of accurate information also makes it difficult to identify and monitor the occurrence and evolution of illegal acts. Forest inspectors have little knowledge of how to gather and preserve evidence against illegal operators and judges are seldom familiar with the nature of illegal forest activities. Even when information is available, it is often not used efficiently and/or shared among the relevant government agencies and stakeholders. Improving law compliance therefore requires improved knowledge of the forest resource and improved means to monitor changes over time. Examples of best practices are presented in Chapter 6.
Many illegal activities in the forest sector are associated with corruption. Corruption is a complex social, political and economic phenomenon. It involves the use of one's position for illegitimate private gains (Box 5). Although perceived differently from country to country, corruption tends to include the following types of behaviour: conflict of interest, embezzlement, fraud, bribery, political corruption, nepotism and extortion. In this publication corruption refers to deeds which engage public officials and private interests, involve public and sometimes private property and power, are perpetuated for private gain and are intentional and surreptitious.
Corruption in the forest sector involves:
The reasons for which corruption develops vary from one country to another. Among the contributing factors are: faulty government policies; programmes that are poorly conceived and managed; failing institutions; inadequate checks and balances; lack of strong and organized civil society groups; a weak and/or corrupt criminal justice system; inadequate civil servants remuneration; and a lack of accountability and transparency (UNODC, 2005).
Because forests represent a high-value natural resource often under government control or regulation, they offer an important potential source of political power, and a correspondingly high risk of abuse of that power. In some cases, corruption in the forest sector might be an intrinsic part of the patronage systems that sustain the power of a country's ruling elite (Global Witness, 2004a). State forestry institutions might be subject to regulatory capture, becoming the clients of the ruling elite's concession-holding industrial interests. A mutually beneficial relationship between selected private interests and corrupt government officials is created and sustained at the expense of the public good.
Lack of transparency in the public forest administration and other agencies such as the police and the military, unclear accountability structures, complex administrative procedures and lack of public disclosure of key documentation are all elements which should be addressed when building a strategy to increase law compliance in the forest sector. Examples of best practices are given in Chapter 4.
The strong correlation that exists between perceived corruption levels and the extent of suspected illegal log supply is shown in Figure 1.
Several international initiatives have been developed over the last few years to tackle the problem of corruption (Box 7). However, a serious impediment to the success of any anti-corruption strategy is a corrupt judiciary. If the judiciary is corrupt, the legal and institutional mechanisms designed to curb corruption, however well-targeted, efficient or honest, remain crippled. Unfortunately, evidence is steadily surfacing of widespread judicial corruption in many parts of the world (UNODC, 2005). Chapter 4 gives examples of best practices which can be applied by national governments to limit corruption in the forest sector and promote the independence of the judiciary.
In some countries the growing timber market often contributes to overcapacity of the forest industry or excessive log exports from the exporting countries, which can in turn lead to illegal forest operations. Although this publication does not address the issue directly, focusing instead on the actions which can be taken at the domestic level by timber producing countries, Annex 3 provides an overview of various multilateral and bilateral initiatives aiming to promote responsible timber trade between producing and importing countries. Reducing demand for illegal timber, at least until more exporting countries are on a sustainable footing, should be a key component of future international cooperation.
Source: Seneca Creek Associates and Wood Resources International 2004
Practices specifically aimed at reducing payment of taxes and other fees
Illegal timber processing
Source: Callister, 1999
Flawed policy and legal framework
Insufficient data and information about illegal acts
Corruption and lack of transparency
Source: Lindsay, Mekouar and Christy, 2002
Illegal harvesting is a common concern, both prior to and following the imposition of logging bans. For instance, in Viet Nam, due to the 1997 logging ban and timber shortages, the volume of illegal logging increased to at least 100 000 m 3 annually.
Logging bans might also have disruptive effects on neighbouring countries through legal and illegal trade, timber smuggling, and market disruptions. There have been allegations that Thailand's 1989 logging ban resulted in both illegal logging and greater imports along the borders with Laos, Cambodia and Myanmar. Protection of natural forests in China has led to greater imports from Myanmar and the Russian Federation, potentially contributing to unsustainable harvesting in northern Myanmar, the Russian Far East and East Siberia.
Adverse economic and social impacts have also occurred, further undermining the incentives for sustainable forest management. Lack of public participation in designing and implementing logging bans or in recognizing local dependency on forests frequently results in local resistance and continued illegal activities for day-to-day survival, especially in the absence of safety-net policies that address adverse social and economic impacts.
Only where logging bans have been accompanied by transitional adjustment policies for alternative timber supplies, social and economic safety nets to minimize local burdens, and sustained and effective conservation management, have they proven effective as a conservation strategy. This is the case in New Zealand where natural forests have been placed under the separate administration of a Department of Conservation with supporting policies, operational support and professional staffing, and where a strategy for ensuring industrial timber supplies from plantations was developed decades before the 1987 transfer of all state owned natural forests to conservation status.
Source: FAO, 2001b
Etymologically the word "corruption" comes from the Latin verb "corruptus" (to break); it literally means a broken object. Conceptually, corruption is a form of behaviour, which departs from ethics, morality, tradition, law and civic virtue.
The classic definition, followed by the World Bank and Transparency International, views corruption as the use of one's public position for illegitimate private gains. Abuse of power and personal gain, however, can occur in both the public and private domains and often in collusion with individuals from both sectors. Information International in Lebanon therefore adopted the following definition: "Corruption is the behaviour of private individuals or public officials who deviate from set responsibilities and use their position of power in order to serve private ends and secure private gains".
The United Nations Global Programme Against Corruption (GPAC) defines corruption as the "abuse of power for private gain" and includes thereby both the public and private sector.
Source: United Nations office on Drugs and Crime (UNODC), 2005
Source: Based on Wesberry, 2001; D. Young, Global Witness, personal communication, 2005
The plethora of legal anti-corruption instruments that have come into being since the mid 1990s is indicative of the increased seriousness with which corruption is now being taken. Most notably, these instruments include:
Source: Transparency International, 2004b