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Major international banks, shipping companies, and consumers play key role in Madagascar's logging crisis Rowan Moore Gerety, special to wildmadagascar.org December 16, 2009 Illegal Logging and Impotent Government in Madagascar's Northeast
Loggers in Madagascar daily plunder up to $460,000 of precious woods from national parks in the country's northeast, according to a jointreport of EIA and Global Witness published two weeks ago. While some illegal logging has taken place in the SAVA region almost continuously for more than a decade, the activity has sharply escalated in 2009. Low vanilla prices have gutted the local economy and timber traders have seized upon the combination of weak government and high demand abroad to extract large quantities of rosewood from protected areas in the region: Masoala and Marojejy National Parks as well as the Mananara Biosphere Reserve.
"Most of these people have been in the business for a long time--at least, 10, 20 years," said Adam Khedouri of the EIA, who participated in the investigation. But "rosewood is relatively new," he added, pointing to the rising Chinese middle class and their taste for "faux-imperial style" furniture. Of the various economic activities in SAVA, timber trading is by far the most lucrative. "One way it was described to me is that the people who are involved in exporting vanilla are really wood traders," Khedouri explained. Vanilla is the more reliable market, timber is kind of hit or miss, so you need to have some financing available to send people into the forest, pay for the equipment, and buy fuel. They're complementary businesses." In 2000, the government stopped issuing new logging permits in the northeast and banned the export of raw timber. Four years later, in an episode that demonstrates timber traders' ability to control the political and economic context in which they operate, an exception was made for trees that had fallen during the passage of Cyclone Gafilo. Foresters like Sylvain Velomera, former director of Marojejy National Park, are skeptical that cyclones damage rosewood and ebony trees at all: "it's only a justification to allow cutting of rosewood, since cyclones do not blow over rosewood, only papaya and coconut and other small vulnerable trees." Furthermore, when the government lifted the export ban after the cyclone, it did so without prior assessment of cyclone-damaged trees or of existing lumber inventories. As a result, the orders restricting logging to fallen trees were more or less meaningless. In fact, they provided good cover for extensive logging inside national parks.
The logistical obstacles to controlling or even tracking the flow of illicit timber from the forest to the road are tremendous. SAVA is a region with "no infrastructure to speak of," as Khedouri put it, and logging operations there are both primitive and concentrated in increasingly remote areas. Recent surveys around the perimeter of Marojejy National Park found next to no trees of the genus Dalbergia, which includes those rosewoods and palissanders targeted by loggers. In 2007, rangers in Masoala found that more than two thirds of locally logged rosewood came from inside the Park. "The reason they're going into the park at all is that all the low-hanging fruit has been picked," Khedouri explained. "So much of those rare species--and they're a lot rarer now than they were 10 years ago--most of the big trees are in hard-to-reach places. These guys are going two or three days' walk into the forest to find logs." From there, logs are dragged through the forest to the nearest waterway and transported by raft to villages accessible by road. From here on, enforcement should be much simpler: most of the wood travels along one stretch of highway connecting Vohémar to Antalaha. But when EIA/GW investigators encountered trucks transporting rosewood logs to port in August, not a single driver could produce relevant authorizations to transport lumber. Along this road, Khedouri wrote in an email, "there is a regular police and gendarme presence, with numerous checkpoints and patrols; the issue is one of easily corrupted local law enforcement agents."
"That text marks the point where the problems began," one former forestry official told EIA/GW's investigators. It opened the door to false "inventories of wood stock, inventories that were changed on a daily basis," said the official, one-time Directeur Général des Forêts Monique Andriamananoro-Radiharisoa. Export authorizations were also issued after cyclones in 2006 and 2007, enabling timber traders to stockpile vast quantities of lumber both in legal depots and in undisclosed locations around the ports of Vohémar and Antalaha. With so much wood in depots, "there is big pressure on the Ministry [Ministère de l'Environnement et des Forêts] to authorize the export of timber," said Reiner Tegtmeyer of Global Witness. "And they do," he said, but always for limited periods of time. Thus, the timber trade takes the shape of large waves of export separated by periods of stricter control. Demand builds while the export ban is enforced, until, during periods of slack enforcement, traders are able to unload massive quantities of wood quickly and at a high price. "In the current situation," Khedouri explained, "there's a big gap between when the wood is cut and when it's allowed to be exported." The illicit nature of the trade creates some obstacles for the Timber Barons--the difficulty of financing further logging with large stocks being held at port, for instance, or the uncertainty of the legal repercussions they may face. But this cycle of instability also brings them certain benefits: a desperate workforce, government officials susceptible to bribes, the disappearance of logging quotas and requirements for documentation, and, for a time, incredibly high prices on the international market. Twice so far this year, the government has granted exceptional authorizations to export, in the form of "ministerial orders," to traders willing to pay a 'fine' of 72 million Ariary ($35,500 USD) per container of illegal lumber. But according to Johnson, Director of Forest Campaigns for the EIA, Malagasy law calls for more than simply levying a fine. In fact it calls for confiscating illicitly harvested wood altogether. This provision, as well as those that prohibit logging in national parks and the export of raw precious woods, take clear legal precedence over ministerial orders. With the signatures of high-ranking government officials, however, these "exceptional authorizations" lend a pretext of legality to an arrangement that appears to be nothing more than a standardized bribery scheme.
"The big issue is that the present government is unable to exercise control of that part of the country," Khedouri said of the logging crisis. Current President Andry Rajoelina came to power in March by means of a coup that prompted foreign donors to suspend nearly all aid to Madagascar. Until this year, foreign aid comprised 70% of the government's operating budget. Now, having ousted his predecessor, Rajoelina presides over a government that is essentially without funding. The Ministère de L'Environnement et des Forêts, for instance, is restricted to 10% its usual size. Still, loggers have met nominal resistance from Rajoelina's government. On April 18th, authorities closed the port of Vohémar to international trade in response to the global outcry about the logging crisis. But on the 19th, "Three [timber traders] hired a plane, went to the capital, and went to see the prime minister," said Tegtmeyer. "The next day the port was open." Even if the political will to put an end to illegal logging existed at the highest levels of government--and it does not ("The Prime Minister, at least, seems to be bought," Tegtmeyer told me)--the effort would be hampered by the twin problems of decentralization and insolvency, particularly when they intersect in the person of provincial bureaucrats.
Park rangers in Marojejy who attempted to resist loggers more directly this past April were threatened with violence and ultimately forced to abandon their posts: the lawlessness eventually resulted in the closure of the Park for more than a month. Politicians who have tried to fight illegal logging have faced a similar fate. Dominique Chan, mayor of Mananara Nord (near the Mananara Biosphere Preserve), explained the situation there in a September 25th newspaper article: "Illicit logs circulate in plain view of everyone, and no one dares to stop it-- not the local, district, or regional authorities, nor even the police...I myself and my family have been targeted with death threats and there was a kidnapping attempt on my children. I tried to educate the population through radio shows with the goal of creating a surveillance committee--that didn't please the illegal loggers one bit." The EIA/GW team initially came to Madagascar at the behest of the Director of Madagascar National Parks, an agency that Khedouri described as being "insulated from the workings of the government," largely because they are funded and operated in partnership with institutions in the US and Germany. Through the intervention of then-Minister of Environment and Forests Mariot Rakatovao, Khedouri and Tegtmeyer were granted free access to relevant legal documents and high-level government personnel, and supported throughout their field investigation by staff from government forestry agencies. Overall, they benefited from a startling degree of cooperation from a government that, by all accounts, is strongly implicated in the activities they hoped to investigate. How could this be? According to Tegtmeyer, the internal divisions apparent in the government's treatment of illegal logging stem from the competing influences of 1) the timber traders themselves and 2) western governments and donor institutions, both of whom could potentially improve the financial sorts of Rajoelina's "Haute Autorité de Transition," now rendered impotent by lack of funds.
"They are desperate to get funds," Tegtmeyer explained of Madagascar's central government in a recent email. "They are starved for international financial assistance in the wake of the political crisis." "At the same time," he said, "there's pressure from the timber barons--they might even be being bought...and pressure from the international community." Of then-Minister Rakatovao's cooperation with the investigation, Tegtmeyer explained, "I think he just gave in because they have to prove to the international community that they are doing everything to improve governance." At the same time, vulnerability to pressure from the Timber Barons may have been one reason Rakatovao was asked to step down prematurely, and that a Colonel from the army--someone more insulated from the timber trade--was chosen as his successor. Some high-ranking officials have been genuinely dismayed by the logging crisis, But it is clear that the MEF depends on more than the good will of the Minister to curb illegal logging. Effective enforcement would require the dedication and cooperation of officials locally and in the capital. "MEF is decentralized in the region," Khedouri said, "even though they technically report to the central authority in Tana. So there's a 'chef de region' in SAVA who gives day-to-day orders, and his objectives might be in conflict with what the central authority wants." According to Tegtmeyer, "the low-level [officials] are probably more interested in letting stuff go the way it is because they make the money [from bribes]." But this split is not uniform: "there are a number of people at higher levels who are involved in the timber trade," Khedouri said. In many instances, he explained, "Civil servants have stayed in place, but they've been hamstrung by political appointments at higher levels --the park service more than anything."
Since the coup last March, the government may be broken, but it is also broke. Insufficient funding is one of the main barriers to addressing illegal logging in SAVA--to properly staff national parks, deploy additional security, and adequately compensate bureaucrats so as to stave off corruption and enforce forestry laws. Absent legitimate sources of income for government personnel and for the whole, illegal logging is also one of the only industries--criminal or not--that has generated a significant amount of revenue since Rajoelina came to power. As a result, his administration has adopted the understandable but oxymoronic practice of using revenue from illegal logging to fund policing and reforestation efforts: The $35,500 USD per container which gave traders the green light to export illegal lumber will now be redirected to fund the Task Force responsible for fighting illegal logging. Here, then, is the Catch 22 of the logging crisis in Madagascar: how can we fund proper enforcement when the failure to enforce pays so well? The loggers and timber traders suffer from none of the contradictions or the lack of coordination that so plague the Malagasy government. "Our impression is that this group of traders in Antalaha," Khedouri said, referring to the Timber Barons, "is relatively autonomous and apolitical--in the sense that they're fine with anyone will allow the trading to continue."
Importers generate capital by selling household and electronic goods from China; rather than repatriating the proceeds, they divert a share of the cash to finance the timber purchases of their compatriots in the northeast. In October, the Madagascar Tribune reported that many importers use the cover of artificial customs declarations to downplay the value of goods they import as well as under-reporting their actual sales revenue, thereby allowing them to funnel money into the illicit timber trade unnoticed. In October and November, some 170 containers of rosewood remained blocked at Vohémar for weeks on end, awaiting payment of the $35,500 'fine' for each container. On November 28th, according to a source in Sambava, "small planes landed in Sambava. They unloaded several heavy boxes: cash, only cash...This money comes from Tana... Cash from the new Chinese community," he called it, "having their own bank-like system." Khedouri was unsurprised by this account, citing the need for timber traders to cover the ongoing costs of logging operations while so much valuable wood was blocked at port. "There's just not that much liquidity in that part of the country," he said. Exporting illegal lumber depends not just on a 'bank-like system' but on actual banks--some of the largest in the world. Timber traders typically receive down payments amounting to as much as half of the total sale from buyers abroad, with the remainder financed by Malagasy branches of international banks. Of this, according to documents obtained by EIA/GW investigators, Bank of Africa and Société Générale (#43 on Forbes Fortune 500 List) each financed roughly half of declared exports from SAVA in 2009, while recent reports from local sources suggest that Crédit Lyonnais has been a player as well. All three of these banks are at least partially owned by the French government. Bank of Africa is a group of banks clustered thirteen African countries whose shareholders include the governments of several African countries as well as FMO, the Dutch government-controlled development bank.
Customs and shipping documents are similarly lax. Containers on their way from Madagascar to China are likely to stop in at least two countries on the way. The ports at Vohémar and Antalaha, where most precious wood is shipped, cannot accommodate the large container ships that make the trip to Asia. Though shipments of lumber may change hands in the Comoros, Mauritius or Malaysia, cargo manifests routinely leave out these intermediary stops and list only the shipment's final destination in China. As a result, it is nearly impossible for customs officials to know which shipping company will deliver the cargo to its final destination, or to recall illegally exported timber once it has left port. This has happened only once recently, when The Lea, docked in Mauritius was required to return to Madagascar to pay applicable export fines on 12 containers of rosewood. This accomplished, The Lea was allowed to leave again, cargo untouched.
The vast majority of precious woods that leave Madagascar are bound for a few cities in Southern China: Hong Kong, Dalian, Shanghai, Ganzhou. Between 1998 and 2008, Chinese imports of tropical wood nearly quadrupled, to 45 million cubic meters annually, making it by far the world's largest consumer of tropical timber. Dr. William Laurance, a researcher at the Smithsonian, wrote in a letter to the journal Science last year that he believes over half of these imports are sourced illegally. In the U.S., a century of amendments have gradually strengthened the Lacey Act, introduced in 1900 to fight poaching and interstate trafficking of wildlife. It is now a federal crime to illegally purchase, transport, sell, or possess endangered animals and plants from anywhere in the world. The legislation is some of the world's most stringent, and the Lacey Act is viewed as a model for due diligence legislation that may soon take hold in the EU. Even so, enforcement around illegal wood products is still in its infancy. (Only last month, there was a sting against Gibson guitars involving rosewood from Madagascar.) There are "not presently any laws in China" that require importers to ascertain the origin and legality of their source materials, Khedouri said. In 2007, the US and China concluded a Memorandum of Understanding on illegal logging and the timber trade. It called for the two countries to share information on imports and exports and pursue joint enforcement strategies but little has been done as a result. It's at the "point of import," Khedouri said, that "there's got to to be some due diligence to determine the origin. If you know that you're importing a particular species of rosewood, then you've got to do due diligence and find out your risk [of trafficking in illegal wood]." Currently, however, "I can say explicitly that there are importers in China who have sent people to Madagascar who are sitting in rosewood logging camps in national parks negotiating prices, so there's not even a pretense of that."
But tropical woods of all sorts--and rosewood in particular--are also in vogue in Europe and North America. Gilmer Wood is a lumber supplier based in Portland, Oregon that illustrates the difficulties of tracking lumber through the world supply chain. They specialize in tropical timber and have a broad stock of rare hardwoods from all over the world. They catalogue each piece of lumber they receive by number and by species along with photos on their website. But Gilmer draws on stock that they have had, in some cases, for as long as 25 years. In the case rosewood from Madagascar Gilmer bought some Dalbergia maritima logs nearly twenty years ago, and they are still milling it into planks now. With such a long shelf life, even accurately identified lumber can be almost totally removed from the controversies of the day it was logged, and laundered and reinvented in perpetuity. But Gilmer's knowledge is something of an anomaly in the business. Recently, I spoke to a number of rosewood furniture importer/manufacturers based in Los Angeles with factories in China; not one could tell me with certainty what species of rosewood they used in production, and several could not even cite the country of origin of the wood they used. "That's something you'll find generally across the sector," Khedouri said of suppliers' trend to ignorance of wood products. Even "true rosewoods," a dozen members of the genus Dalbergia, are found on three continents. But rosewoods have other doppelgangers in the natural world--Pterocarpus indicus and Machaerium scleroxylon are two--that it hard to identify the precise origins of lumber--and even less so of finished goods--sold as rosewood. "To really know what species and tree is very difficult," said Jerry, who runs the House of Rosewood in San Gabriel, CA as well as a factory in Guangdong, China. "Even ourselves, when we purchase the raw material, it's very hard to tell." He thought, at least, that his wood came from Burma and Indonesia. A salesman at KY Pool Tables in Monterey Park, CA told me they used "basic rosewood." Their products are made in a factory in Guangzhou, but "the material i heard is from Africa."
The solution, Khedouri said, "depends on controlling demand and demonstrating that what we're looking at in not the isolated removing of several trees here and there but the generalized looting of protected areas...Rosewood," he stressed, "is only part of the story."This is a particularly egregious case that can push China to set up similar [laws] to what we have in the US." There is a greater need, though, for us as consumers to educate ourselves not only about the products we are buying but on the other sources of revenue that drive the companies we support, even indirectly--What else is Delmas shipping? Who else is Société Générale banking with? What else is Walmart buying? Even if most of the illegally logged timber that goes to China remains in China, US consumers purchased $337 billion in Chinese-made goods last year. How much more do we know about the minerals that dye the plastic in our toys or speed up the processor in our cell phones? What do we know about the companies that unload container upon container of textiles, food, and electronics at our ports? How much do we demand to know? The recent trend towards green marketing marks the beginning of a demand for real knowledge about the products we consume and what their manufacture has done to the planet. Most of us stand in ignorant complicity with the illegal loggers of the world unless we strive to learn more about the business to business marketplace that forms the global supply chain for the goods we consume. History has shown us that political instability is terrible for the environment, but we are a long way from peace and democracy in most regions of the world. In the mean time, we must do what we can to stem the demand that makes this sort of enterprise so lucrative. Globalization has created a consumer culture of ignorance that we cannot afford to continue. We must seek out companies and products that offer their consumers full transparency, and buy, or not, accordingly. In Malagasy, the language of Madagascar REFERENCES RELATED ARTICLES Authorities in Madagascar conduct raids to uncover illegal rosewood (11/24/2009) Authorities in Madagascar over the weekend launched a series of raids to uncover rosewood and other precious hardwoods illegally logged from the country's national parks in the aftermath of a March military coup. Gibson Guitar under federal investigation for alleged use of illegal rainforest timber from Madagascar (11/19/2009) Federal agents from the U.S. Fish and Wildlife Service raided Gibson Guitar's factory Tuesday afternoon, due to concerns that the company had been using illegally harvested wood from Madagascar, reports the Nashville Post. House resolution condemns plunder of natural resources in Madagascar (11/04/2009) A House of Representatives resolution introduced by Earl Blumenauer (D-Oregon) condemns the illegal plundering of natural resources in Madagascar, reports the Wildlife Conservation Society (WCS). Mining and biodiversity offsets in Madagascar: Conservation or 'Conservation Opportunities?' 
(08/30/2009) Rio Tinto's ilmenite mine in southeastern Madagascar is among the largest on the planet. At peak capacity, its owners say, it could produce as much as 2 million tons of the stuff—worth roughly $100 a ton—each year, to be shipped off and smelted abroad. What's left of it after refining—some 60 percent of the ore that arrives from Madagascar—will be sold for $2000 a ton as titanium dioxide, a pigment used in everything from white paint and tennis court lines to sunscreen and toothpaste. At current levels of demand, the Fort Dauphin mine will provide 9 percent of the world supply over the next 40 years, amounting to more than $60 billion of titanium dioxide. Even that is a conservative estimate: demand for ilmenite has been growing at 3-5 percent annually, with major mines slated to close in coming years and few untapped sources known worldwide.
Destruction worsens in Madagascar (08/20/2009) Armed bands are decimating rainforest reserves in northeastern Madagascar, killing lemurs and intimidating conservation workers, despite widespread condemnation by international environmental groups. Appalling photos reveal lemur carnage in Madagascar [warning: graphic images] 
(08/20/2009) New pictures released by Conservation International depict a troubling development in Madagascar: the emergence of a commercial bushmeat market for lemurs. In the aftermath of a March coup that saw Madagascar's president replaced at gunpoint by the capital city's mayor, Madagascar's reserves — especially in the northern part of the country — were ravaged by illegal loggers. Armed bands, financed by foreign timber traders, went into Marojejy and Masoala national parks, harvesting valuable hardwoods including rosewood and ebonies. Without support from the central government — or international agencies that pulled aid following the coup — there was no one to stop the carnage. But now it emerges that timber wasn't the only target.
Lessons from the crisis in Madagascar, an interview with Erik Patel 
(08/11/2009) On March 17th of this year the President of Madagascar, Marc Ravalomanana, resigned his post. This made way for Andry Rajoelina, mayor of Madagascar’s capital, to install himself as president with help from the military. The unrest and confusion that usually accompanies such a coup brought disaster on many of Madagascar's biological treasures. Within days of Ravalomanana's resignation, armed gangs, allegedly funded by Chinese traders, entered two of Madagascar’s world-renowned national parks, Marojejy and Masoala parks, and began to log rosewood, ebonies, and other valuable hardwoods. The pillaging lasted months but the situation began to calm down over the summer. Now that the crisis in Madagascar has abated—at least for the time being—it’s time to take stock. In order to do so, Mongabay spoke to Erik Patel, an expert on the Critically Endangered Silky Sifaka and frequent visitor to Madagascar, to find out what the damage looks like firsthand and to see what lessons might be learned.
Conservation success in Madagascar proves illusory in crisis 
(06/12/2009) Despite the popularity he enjoyed abroad, domestic support for ousted president Marc Ravalomanana eroded rather quickly last February when he went head to head with Andry Rajoelina, the rookie mayor of Madagascar's capital. Rajoelina rallied disparate opposition groups to the cause and soon toppled the incumbent to become, at his own proclamation, President of the "High Authority of Transition." For the country as a whole, the results have not been encouraging. The tourism industry has shriveled to a shadow of itself, important donors have suspended non-humanitarian aid, and a power vacuum has set in in remote regions of the island, wreaking havoc on some of its most fragile and prized ecosystems.
International community calls for action against gangs’ illegal logging in Madagascar (06/08/2009) Six nations and three conservation organizations have issued a statement calling for action against illegal logging in Madagascar’s protected areas. Conservation groups condemn 'open and organized plundering' of Madagascar's natural resources 
(03/30/2009) Eleven conservation organizations—including WWF, CI, and WCS—have banded together to condemn logging in Madagascar's world renowned parks during a time of political crisis. Taking advantage of the turmoil after interim president Andry Rajoelina took control of the country in a bloodless coup from former president Marc Ravalomanana on March 17th, pristine forests have been plundered for valuable wood, wildlife trafficking has increased, and illegal mining operations have begun say the conservation organizations.
Political turmoil in Madagascar threatens lemurs, parks 
(03/19/2009) Political turmoil in Madagascar has wrecked the country's emerging ecotourism industry and is now threatening to undo decades of conservation work. Conservation in Madagascar is highly dependent on income from tourism. Half of park entrance fees are returned to communities living in and around protected areas. Without this source of income, locals in some areas may turn to conservation areas for timber, fuelwood, agricultural land, and wildlife as food and for export.
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Rosewood logs
Temporary camp set up by wood cutters in Masoala National Park.
Precious hardwood logs are tied together with lianas and floated down rivers on rafts made from lighter species as trees. 5-6 lighter logs are needed to float each rosewood log, exacerbating the impact of rosewood extraction.
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