In Analyzing Organized Crime, Environmental crime

Report credit: Global Witness  – Blog credit: InsightCrime

Report Exposes Inner Workings of Timber Trafficking in Peru

A new report into an emblematic case of timber trafficking in Peru highlights the corruption and fraud that continue to sabotage attempts to crack down on a trade that is devastating the Amazon region.

The report, released on November 9 by investigative watchdog group Global Witness, tells the story of the most high-profile anti-timber trafficking operation in Peruvian history: the November 2015 attempted seizure of illegal timber from the ship Yacu Kallpa as it was anchored in the Amazon River near the city of Iquitos.

On the morning the Yacu Kallpa was set to depart on a journey that would have eventually taken it to Houston, Texas, a public prosecutor boarded the ship and attempted to seize 15 percent of its cargo — 1,200 square meters of wood that investigators had proven was of illegal origin.

The boat eventually departed after a day of murky interventions and legal wrangling that ended with the ship’s captain promising the prosecutor to return with the 15 percent after dropping off the rest of the cargo, according to an account of events in an investigation by Wired.

However, investigators continued their work, visiting the locations cited in the wood’s certificates of origin to verify its extraction. The Yacu Kallpa was eventually detained in Mexico and its cargo seized. By the time they had finished their verification, investigators had established that 96 percent of the cargo — more than 9,500 square meters — was “not of legal origin.”

(Credit: Global Witness)

The companies exporting the wood denied all wrongdoing. They pointed to the legal documents their shipments possessed, and claimed that if the wood was illegal then they were merely good-faith buyers that had been duped by fraudulent paperwork. If this were true, it would mean that the firms would not meet the criteria for prosecution: that they either knew or “could presume” the wood was illegal.

The companies’ claims received top-level political backing, with then Trade and Tourism Minister Magalí Silva and regional Governor Fernando Meléndez both intervening on their behalf. However, Global Witness has amassed evidence that at least some — and likely all — of these operators were well aware their wood was illegal.

Investigators from the watchdog group secretly recorded meetings with executives from the export companies involved. In one such recording, Dante Zevallos from timber company Sico Maderas explains that companies assume their wood is illegal but feel protected by their ability to obtain fraudulent official documents.

“If you sell me timber that has been approved by the government, the law says I have nothing to do with it,” Zevallos said. “I can clearly know the timber is not coming from a good source, because if we all bought what we should then nobody would buy a plank.”

Zevallos added that this rule applied to the Yacu Kallpa shipment, saying, “Even though I knew the wood probably had this origin, I wasn’t worried because I had [the paperwork] that showed I was a good-faith buyer.”

Through the secret camera footage and other investigations, Global Witness also lays out the workings of how such wood is laundered into the legal supply — practices it describes as an open secret in the timber industry.

One of the methods exposed involves purchasing timber from areas where logging is not permitted with false certificates of origin identifying it as being from a legal concession. The legal concessions are often poor quality logging areas that are difficult to access and do not contain the species and quantities desired by exporters.

Although the loggers have harvesting plans that should identify which trees are in which concessions and when they can be cut, in reality, tree locations in the plans are often faked by corrupt forestry consultants who draw up the harvesting plans for companies.

Another method is the abuse of designated “bosques local,” or local forests. The purpose of this category is to allow local rural communities to log meet their self-subsistence and infrastructure needs with only “small-scale” quantities allowed to be commercialized. However, investigators discovered most of the logging taking place in many of these areas was large-scale and for commercial purposes.

These and other methods, Global Witness adds, would not be possible without the participation of corrupt regional government officials, who have to approve all plans and permits. In the words of another of their secretly recorded subjects, “the stamp of the governments here has no guarantee.”

InSight Crime Analysis

In recent years, Peru has faced major international pressure, in particular from the United States, to crack down on its illegal timber trade, which results in an estimated 155,000 hectares of deforestation in the Amazon rainforest every year.

In some respects, the Yacu Kallpa operation was a major milestone for Peru in this campaign. It was the product of what Global Witness describes as a “trailblazing” joint operation involving multiple national and international entities. It represented the first major case utilizing new powers granted by prosecutors in a law introduced just two months before, and led to more than 50 cases being opened and more than 100 people being investigated. It effectively severed the only direct trafficking route connecting the United States to the Peruvian Amazon, a route run exclusively by the Yacu Kallpa.

Nevertheless, beyond these success stories, the case also illustrates just how far Peru remains from bringing illegal logging under control.

It demonstrates the slow, painstaking and highly specialized work required to prove illegality, which, two years later, has yet to yield prosecutions. The case also shows how the difficulty of combating forest crime stands in stark contrast to the quick and easy fraud and corruption that hides it.

The Global Witness investigation also illustrates the powerful forces Peru will have to confront as it moves forward with tackling the trade. The operation sparked a major backlash in logging areas; Iquitos and the city of Pucallpa were rocked by protests that saw the office of the government’s forest and wildlife inspection agency fire-bombed.

It also prodded into action some of the shadowy, wealthy and influential powers that facilitate illegal logging in Peru. Aside from the interventions by the local governor and government minister, the wake of the operation saw the inspection agency’s crusading president Rolando Navarro fired. He later fled the country in fear for his life after receiving multiple death threats. The new powers granted to prosecutors in such cases, meanwhile, were rolled back under heavy pressure from the timber industry shortly thereafter, according to Global Witness.

To address these issues and confront these powers will take time, resources and a strong commitment to tackling corruption that runs from top to bottom. The Yacu Kallpa operation may now be an emblematic case, but it is still just a small, tentative step along this path.

Download the Report