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EIA's report : "The Laundering Machine"

Thursday April 26, 2012

Illegal wood from Peruvian Amazon is entering the USA

Systemic corruption and human rights abuses in Peru documented, as well as over 100 illegal import shipments into the United States


LIMA: A multi-year investigative report released by the Environmental Investigation Agency (EIA) reveals evidence that since 2008 over 20 US companies have imported millions of dollars in illegal wood from the Peruvian Amazon.  This trade appears to be in violation of US and international endangered species laws, as well as the US-Peru free trade agreement.

EIA’s report The Laundering Machine analysed official documents which demonstrate that at least 112 illegal shipments of cedar or mahogany wood – laundered with fabricated papers and signed-off by Peruvian Government officials – arrived in the US between 2008 and 2010. These shipments account for over 35 per cent of all trade in these protected species between the US and Peru.

Twenty-two US companies were found to have imported at least one shipment of this illegal wood.  At least 45 per cent of the shipments exported by Peru’s largest timber trader, Maderera Bozovich, most of which were received by Alabama-based affiliate Bozovich Timber Products, Inc, appear to have contained laundered wood. EIA believes that these figures are conservative and would increase with access to more complete data from field verifications.

“Pervasive laundering and corruption have been an open secret in Peru’s wood trade for years,” said Andrea Johnson of EIA. “Any exporter or importer still relying only on paper permits to claim legality should know better by now.”

Illegal timber in the Peruvian Amazon is cut by crews of loggers, often under abysmal and abusive conditions, and stolen from protected areas including national parks, indigenous territories and other Government lands. Migrant workers find themselves trapped in camps located deep in the jungle and indigenous communities are left with massive debts after intermediaries swindle them out of their valuable trees. These practices are financed by powerful timber barons, some connected to organised crime, who turn a blind eye to the human rights abuses and crimes committed.

This timber is then laundered with documents based on false information. The typical scheme involves forest owners submitting an annual harvest plan with lists of trees that do not actually exist in their logging concessions for approval to cut. Complicit authorities then approve the extraction and sale of this non-existent wood.

Backed by these “volumes” of fictitious trees, the corresponding official permits are sold on the black market and used to launder wood extracted illegally from elsewhere. EIA’s report includes first-hand testimony and documents from one such concession owner, who says: “…it is impossible to harvest wood from [my forest] … practically speaking, the concession has been useful only for selling ‘volume’.”

EIA recorded testimonies from men and women who experienced forced labor and sexual abuse in logging camps, and teenagers with horrific injuries sent away without wages to find their own way to a clinic.

“Peru’s current logging industry is a model that has nothing to do with meaningful economic development,” said Julia Urrunaga of EIA. “The real human toll of these illegal practices is demeaning and ugly.”  Illegal logging is also ransacking the rainforest, harming endangered wildlife, and contributing to climate change. It creates unfair competition, resulting in job cuts and economic losses for law-abiding forest products businesses in Peru, the United States and other countries around the world.”

While the corrupt practices highlighted in EIA’s report remain pervasive, analysis of the special permits required for trade in cedar and mahogany (both protected by international agreements) shows that many of the US companies appear to have reduced or ended imports of these species from Peru since 2009. Johnson noted that it was unclear whether this was a result of more careful due diligence or other business decisions.

The trade revealed by EIA appears to be in violation of US laws, including the Lacey Act which prohibits commercial transactions in illegally sourced wood and the Endangered Species Act.  The shipments also strongly indicate violations of the Free Trade Agreement (FTA) between the US and Peru, which contains unique provisions to prevent illegal timber trade and support forest sector reform. EIA plans to submit the information collected to US authorities and call for official investigation. If the US Government takes action under the FTA or the Lacey Act, future shipments could be stopped and companies could receive fines or even face criminal charges.

“Additional oversight by Peruvian agencies is beginning to demonstrate the extent of fraud in the sector – but hopefully to change it as well,” said Johnson, noting that EIA’s analysis relied on data generated by a government agency whose reform and strengthening were a key aspect of the FTA provisions. “We urge Peru to continue down the path of transparency and reform on which it’s headed, and call upon governments and buyers to support these efforts wholeheartedly. The future of the world’s most magnificent forests depends on it.”

 

EIA’s report is available at www.eia-global.org. Images and video from EIA’s journey to document timber laundering first hand are available at www.shootunit.com/eia

Digital version with additional information and official documents, links and responses from exporters and importers regarding due care practices is available at www.peruforests-bosquesperuanos.com

 

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