Country profiles
This section outlines the transit points for illegal timber in individual countries. The production and processing and the timber and timber product exports of Indonesia, Malaysia,
Cambodia, Russia, China, Taiwan (Republic of China) and Papua New Guinea are examined, as well as those of the South Pacific Islands and New Zealand, Thailand, Vietnam, Laos, the Philippines, Japan and Australia.
The remarkable discrepancy between actual production and potential production capacity is a result of the massive expansion of the domestic wood processing industry in the 1990s, following bans imposed on exports of raw materials. Table 17 shows that the processing industry in Indonesia now has a major production overcapacity that cannot be met by legal domestic supplies and that subsequently creates pressure on the forestry sector to provide unmet demand (Palmer 2001: 19). This may, in some instances, lead to purchase of illegal logs, especially if they can be obtained cheaply and with little risk of detection (Dudley 2001: 358).
Exports
While the bulk of Indonesia’s timber production is for domestic consumption, timber exports from Indonesia constitute approximately half the global tropical hardwood plywood exports and one-quarter of the world’s tropical hardwood lumber exports (Seneca Creek 2004: 65).
The key destinations for Indonesian timber and timber products are other countries in the region, including in particular Japan (main destination for Indonesian plywood), China, Taiwan and the Republic of Korea. The ITTO estimates that the total value of logs, sawntimber, veneer and plywood from Indonesia in 2003 was US$1.8b compared with US$2.9b in 1999 (ITTO 2006: 151).
To protect its domestic timber resources and ensure that any processing of logs is carried out within Indonesia, the government introduced a log export ban. First steps to prohibit log exports and impose high taxes on them were taken in 1985. This was followed in 1992 by moves to limit rough-sawn timber exports (ITTO 2006: 151). This resulted in much greater plywood, pulp and paper production in Indonesia, and high levels of exports of these products. The export prohibitions also led to a considerable expansion of domestic
processing and production facilities that is reflected in the high production capacities of mills shown in Table 17 (Palmer 2001: 8). These prohibitions were temporarily relaxed in 1998, but a complete ban on log exports was reinstituted in 2001–02, followed in October 2004 by an export ban on all sawntimber, including railway sleepers.
While this ban had some impact on reducing the level of log exports from Indonesia, there are ongoing allegations about considerable volumes of logs being exported from Indonesia in violation of the export ban. United States research estimates that almost 2.9 million cubic metres of raw logs were exported to China, Malaysia, the Philippines and Thailand between 2002 and 2004 (Seneca Creek 2004: 65) (Table 18).
In 2002, about 73 percent of all timber exports from Indonesia had been logged illegally (Brack, Gray & Hayman 2002: 13). Exports of logs are completely prohibited.
Table 18: Suspicious wood exports by type of wood, Indonesia, 2002 Total exports
(’000m3)
Suspicious volume, total
(’000m3)
Suspicious volume, % of
exports
Suspicious volume, % of
production Softwood
Roundwood 2 0 n.a. n.a.
Lumber n.a. n.a. n.a. n.a.
Plywood n.a. n.a. n.a. n.a.
Hardwood
Roundwood 2,900 2,900 100.0 5.5
Lumber 4,500 2,925 65.0 36.6
Plywood 6,752 3,714 55.0 49.5
Note: n.a. = not applicable Source: Seneca Creek (2004: 15–16)
Suspicious exports of hardwood in the form of lumber and plywood are also very high. It is estimated that almost 3 million cubic metres of lumber or 65 percent of all exports are suspicious. Approximately 55 percent or 3.7 million cubic metres of plywood exports are said to be suspicious (Table 18).
A particular pattern that has emerged since the export ban was reintroduced in 2001 is that logs from Indonesia are initially smuggled from Indonesia into Malaysia. The overland route from the Indonesian province of Kalimatan into Sarawak in neighbouring Malaysia, and the sea route from Sumatra to Peninsular Malaysia, have been identified as two of the main smuggling routes (Brack, Gray & Hayman 2002: para 2.8; ICG 2001: 16). Although Malaysia imposed a ban on log imports from Indonesia in June 2002, NGOs have suggested that between 3 and 5 million cubic metres of illegal Indonesian timber enters Malaysia each year (EIA & Telapak 2003: 3, 4). There are also reports that 650,000 cubic metres of sawn timber were exported to Malaysia in the first five months after Indonesia imposed a ban on such imports in 2004 (EIA & Telapak 2005: 5–6). Once in Malaysia, the logs are re-badged as logs of Malaysian origin and documents are forged accordingly. From Malaysia, they are exported to third countries that have no way of establishing the true origin of the logs. There are several reports from China about imports of Indonesian timber that have been falsely declared as Malaysian (EIA & Telapak 2005: 3; ICG 2001: 16).
There are equally reports about illegal shipments of Indonesian logs to Singapore. To disguise the exports, they are concealed in containers beneath legal wood, or false species names are used on relevant documents. From Singapore, the timber is often exported to China or, in some cases, back to Indonesia where it is then considered as imported wood, thus avoiding regulations applicable to domestic timber (EIA & Telapak 2003: 6). A small number of cases are known in which Indonesian timber has been accompanied by false documents from Papua New Guinea (EIA & Telapak 2005: 3).
China emerges as one of the principal destinations for illegal timber exports from Indonesia via Malaysia or directly by sea from West Papua (ICG 2001: 11, 16). For example, in 2004 China Customs registered 90,000 cubic metres of illegal log imports from Indonesia (Stark
& Cheung 2006: 38). There have also been some reports about Indonesian timber being laundered through Singapore and the Philippines, although further details about these avenues are not available (EIA & Telapak 2003:1).