How to Steal an African Forest

A how to do it guide for the illegal logger.

Basic Methods

• Falsification of documents.• Under and Overreporting.• Perversion of the system.

– Transfer Pricing.– Taking over the regulatory function.– Exceeding the AAC (Annual Allowable Cut).– Road network design.

• Substitution. • Corruption

– Petty Corruption– Grand Corruption

Falsification of Documents

• All types of documents can be falsified.– Harvesting Permits.– Transport Permits.

• Change the volumes after transport to underreport amount of timber transported.

– Export Permits.• Cites documents.

• Volumes exported changed on shipping.

Under & Overreporting

• Overreport the stand volumes during the stock survey.– No of Trees.– Volume of individual trees.– Use the data to take more than the legal allocation.

• Underreport the diameters of trees taken.– Decreasing the diameter by 10% reduces the

volume reported by 20%.– Can be used to decrease the royalty payment.

Perversion of the system Transfer Pricing

• Own a logging company in Africa, a transport/timber broking company registered in a tax haven and a timber company in Europe/USA.

• Sell timber from the logging company to the timber broker very cheaply and make no profit in Africa.– Pay no Tax in Africa.– If Royalty is % of selling price then royalty stays very low.

• Sell timber from the timber broker to the timber company in Europe at very high price.– Timber company in Europe makes no profit.– Timber company pays no tax.

• 100% of the Value of the timber ends up in a Tax Haven.• It is completely illegal by international law but almost

impossible to prove.

Taking over the regulatory functon.

• Government capacity is often limited by funds and competence.

• Leads to unreasonable delays in regulatory permissions.

• Companies complain about delays and offer to carry out certain key aspects of regulatory function on behalf of the government.

• Favourite one to take over is the stand inventory. – Once you have control of this you can do what you like.

Exceeding the AAC Annual Allowable Cut.

• Take a permit for 20 years.

• This gives a yield (AAC) based on 20 years.

• Harvest the entire forest in five years.

• Abandon the forest and look for another to cut down.

Road Network Design

• It is usually necessary to cut trees to build forest roads and landings.

• Design the road network to pass through the most valuable trees.– Protected tree species.– Expensive timbers.– Take these trees for sale.

• Stump burial– Use a D8 to bury the stumps of trees taken from the skid trails.

Many log tracking control systems are based on stump and log tagging. Allocate the derived logs by number to other legal trees but report only the legal tree volume.

Substitution.

• Few people can identify live trees.

• Fewer people can identify dead timber.

• Substitute the log from a low price species with a log from a high value species.

Corruption.

• Petty Corruption.– Paying the tally man to look the other way.– Cost US$100/month

• Grand Corruption.– Paying a high government official(s) to approve

or ignore an illegal action.– Cost US$200000/month.