The escalating cost of the illicit wood trade
Illegal logging is the third biggest global crime by value – after counterfeiting and the drug trade. And recent changes in the timber market have placed Australia in the middle of the crisis.
According to US-based non-profit Global Financial Integrity (GFI), illegal logging has an estimated annual value of US$52 billion to US$157 billion – giving the illicit business the dubious title of ‘the most profitable natural resource crime’.
In its comprehensive 2017 report Transnational Crime and the Developing World, GFI says illegally-procured timber accounts for up to 30 percent of the total global trade in timber products.
It adds that 50 to 90 percent of illegal logging occurs in Southeast Asia, Central Africa, and South America. “Illegal logging in conflict zones often contributes to … violence. Groups that engage in illegal logging continue to use trade mis-invoicing and anonymous shell companies to evade logging restrictions and avoid scrutiny. China is the primary destination for the majority of illegally sourced timber,” the report says.
As a result, many countries now impose tough ‘proof of sustainability’ regulations on timber importers – with varying degrees of success. (Confirming the bona fides of logs or a consignment of tropical timber is difficult enough but verifying the origins of the wood elements of manufactured products like kitchen joinery, lounge suites and paper products is something else.)
Australia imports around A$8.1 billion worth of wood-related products a year. And according to the Department of Agriculture and Water Resources, about A$800 million worth comes from sources with ‘some risk of being illegally logged’.
In 2012, the Australian Government introduced wood products importers to the new future: The Illegal Logging Prohibition Act (ILPA) – a ‘soft’ version of what was to come.
In 2017 an amendment to the ILPA decreed that from 1 January 2018, importers of regulated timber products into Australia, and processors of domestically grown raw logs, faced tough penalties for failing to comply with the Act.
It is a criminal offence in Australia to ‘knowingly, recklessly or intentionally’ import illegally logged timber and timber products, or to process domestically grown raw logs that have been illegally logged.
(The Act does not apply to personal and non-commercial importers and processors.)
Doing it hard
All of which means that hardwood as a traditional component of the design-and-build scene in Australia (and in an increasing number of other countries) is doing it tough.
Tropical timber sales to Europe have been in significant decline since the economic crisis, and the same is true in Australia. Timber Importers Federation chief executive John Halkett says there is “a clear downward trend in demand, due partly to changing product preferences and structural product substitution”.
He also noted in a recent report for the International Tropical Timber Organisation’s Update newsletter that continuing (harvest) reductions from domestic native forests in Australia were “causing disquiet in timber supply chains”.
Halkett says the combination of tougher legality requirements, reduced domestic building activity and more re-engineered wood (e.g. plywood and laminated wood) are behind declining imports of tropical hardwood lumber.
He expects the decline in the amount of hardwood harvested from Australia’s domestic forests to continue, which creates an interesting twist in the tail of the country’s timber supply situation.
Any shortfall in hardwood supply created by locking up Australia’s native forests will presumably be made up by importing more hardwood lumber from other countries – a moral and ethical challenge, you would think.
While Australia preserves its hardwood forests for posterity, the gap will likely be filled from the rainforests of countries like Papua New Guinea (where a log export ban from 2020 and new sawmill investment could release huge quantities of rainforest lumber), Indonesia and Malaysia.
Peninsula Malaysia has a robust timber certification scheme, and Indonesia has made recent progress in shutting down some of its illicit wood exports. But PNG is the largest supplier of hardwood logs to China, where there are no restrictions on where wood is sourced. And the illegal proportion of that trade is widely accepted as ‘rampant’.
Having worked in and written about the wood industry over many years, I suddenly find myself thinking twice before buying hardwood products. I accept the story about carbon storage and wood being ‘the most natural building material of them all’. But to me at least, timber still has a lot of work to do to close the credibility gap – particularly the tropical kind; the really good stuff!
For a long time, consumers have been guaranteed timber legality and sustainability via the likes of FSC, PEFC and various other certification schemes. But I venture to suggest those brands and the ‘promises’ that go with them remain largely unknown, and even less understood, by consumers in this part of the world.
©Tony Neilson, Natural Images, 2018