Organised crime drives illegal logging in Amazon: EUDR’s big test

Up to 70% of the timber traded in the Amazon could be illegal. New research reports that 15% of all (so-called legal) forest management plans include irregular logging credits, which contribute to illegal logging.

In April, the book Characterization of Technical and Legal Irregularities in Management Plans in the Brazilian Amazon was published. Researchers analyzed 184 forest management plans in the Amazon, most of which were located in the states of Pará (88) and Rondônia (37).

“I have always worked on inspecting forest management plans and I have seen many blatant irregularities,” said lead author Vinicius Otavio Benoit Costa, an analyst at Brazil’s federal environmental agency IBAMA, who spoke to Mongabay. “There are some very serious cases of fraud, up to and including the formation of gangs and criminal organizations dedicated to forest management.”

According to Costa, the plans come from the eight states that are connected to the Brazilian part of the Amazon. It concerns 746,000 hectares of forest management and more than 4.1 million cubic meters of roundwood.

And when it comes to the most common irregularities, Mr. Costa found that 72.8% of forest management plans (which have timber credits, or about 20% of total plans) showed a fraudulent movement of timber credits. He said this is closely linked to timber laundering, now the third most lucrative business for organized crime.

In Brazil, he said, all timber harvested must be supported by documentation of forest origin (DOF), which provides a timber credit. Once authorities approve a forest management plan, the owner can issue a certain number of DOFs corresponding to the volume of trees harvested from that area.

“Without credit, the timber cannot reach the consumer centers,” Edevar Sovete, an environmental analyst at IBAMA, told Mongabay. He said that given the importance of the DOF, criminal gangs are now specializing in obtaining approval for forest management plans in areas where they do not necessarily plan to log.

“They then sell the newly generated timber credits to loggers targeting areas where logging is prohibited,” Costa’s research said, adding that “by linking the real credits to the illegal timber, they can launder the timber into the legal supply chain.”

Wood Central understands that a significant portion of this illegal timber ends up in Europe – particularly as ipe used in hardwood decking and stairs – and also in the United States, where the FACT Coalition published a report last year “Dirty Money and the Destruction of the Amazon: Exposing the US Role in Illicit Financial Flows of Environmental Crime in Peru and Colombia”“, which analyzes the links between financial secrecy and crimes in the Amazon.

“That tree listed in the inventory as ipê was in fact a chestnut tree that generated 30 m³ (1,060 ft³) of credits from a species with high economic value,” Mr Costa’s investigation found, adding that fraud also occurred during the transportation of the timber. Mr Costa analyzed IBAMA inspection reports that described heavy logs being transported by motorcycles or trucks traveling at unrealistically high speeds — a sign that something was amiss.

In one case, he calculated that a loaded truck would have to travel an average of 120 miles per hour to cover the distance between the logging site and the sawmill.

Why Brazil’s illegal timber flow is a headache for the EUDR

Last year, Wood Central revealed that, in addition to being the most vocal critics of the current EUDR enforcement deadlines, the Netherlands has emerged as one of the European countries most affected by the push to adopt the European Union Deforestation Regulation.

That’s because the Netherlands is the largest importer of products related to deforestation, with an increase in wood and wood products from China and… Brazil.

According to the Central Bureau of Statistics (CBS) The country’s ports are the busiest in Europe for timber from areas at risk of deforestation. The largest share came from Brazil, where large timber and soy imports alone amounted to €3.2 billion in 2022. It also shows that the Dutch are the largest importer of soy, palm oil and cocoa and, most importantly, the second largest importer of wood products in the region.

As a popular trading route for European and global markets, “95% of the most lucrative markets in Europe are within 24 hours of Amsterdam or Rotterdam. Add to that the supporting legal and fiscal structures and the logistical and technological infrastructure, and it is no wonder that the country is among the best locations for business according to the World Competitiveness Ranking of the Institute for Management Development.

Since 2002, Dutch trade in timber from countries outside the EU has grown explosively. Imports have doubled in the past 20 years (125%), followed by cocoa (67%), beef (+53%) and palm oil (+19%).