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EU sanctions no ‘silver bullet’ against Myanmar’s illegal timber trade, experts say

  • The European Union has imposed sanctions on Myanma Timber Enterprise, a state-owned entity that regulates all harvesting and sales of Myanmar timber.
  • The new sanctions mean it is now illegal for businesses in the EU to directly import any timber from Myanmar.
  • While the sanctions send a strong political signal to the junta, experts say their actual impact on Myanmar’s illegal timber trade could be limited.
  • Local activists are urging the international community to do more as globally significant tracts of forests in the country come under threat, with illicit logging financing the military’s repressive rule.

The European Union has imposed new sanctions on a state-owned timber enterprise in Myanmar following the coup in February, as part of an international effort targeting businesses whose profits are funding the country’s military leadership.

EU officials last month sanctioned Myanma Timber Enterprise (MTE), an entity under the Ministry of Natural Resources and Environmental Conservation (MONREC). Since MTE regulates all harvesting and sales of Myanmar timber, including exports to international markets, the sanctions mean it is now illegal for businesses in the EU to directly import any timber from Myanmar.

The move, which came after the U.S. announced similar sanctions on MTE in April, is part of a wider campaign against military-linked businesses in Myanmar’s lucrative natural resources sector. More than a dozen companies, including those in the jade, gemstone, and copper mining industries, have been blacklisted by governments in Europe, the U.S., the U.K. and Canada in the past few months.

But while NGOs have lauded the MTE sanctions for sending a strong political signal against Myanmar’s timber trade as a source of funding for its armed forces, experts say their impact could be limited.

For one, the forestry industry in Myanmar has waned in financial importance in the past few years. After the quasi-democratic government banned the export of raw timber logs in 2014 to save natural forests, the proportion of the sector’s contribution to government revenues fell from 10% to less than 2.5% in 2017, according to the Myanmar Extractive Industries Transparency Initiative.

Illegal log trucks, Myanmar. Image courtesy of EIA.

More recently, the pandemic and coup have hit sales. Even before the EU imposed sanctions, the junta had announced a one-year logging ban from 2021 to 2022 in April due to a buildup of log stockpiles in the country.

“The EU is targeting a very small market, which has been in turmoil for the last few years,” said Thomas Enters, an Asia-Pacific forestry consultant who previously worked in Myanmar for the United Nations. “The new sanctions are not going to have a dramatic impact.”

‘A stronger tool to address existing crime’

The EU prohibits the sale of illegal timber products in its markets under the EU Timber Regulation (EUTR) implemented in 2013. In the years since, member states such as Sweden, the Netherlands and Germany have agreed this ought to include Myanmar timber due to the impossibility of conducting adequate due diligence on the wood, with the industry’s history of poor governance, lack of documentation and corruption.

Despite this common position, which makes any imports of Myanmar timber into the EU against the law, shipments of Myanmar teak (Tectona grandis) into the EU have been rising, with much of it leaking into the region through member states where enforcement is weaker. In December 2019, Dutch authorities seized Myanmar teak in the Netherlands; the wood had been channeled through the Czech Republic.

“The main driver [of demand] is the marine sector, where teak is used for decking in superyachts that billionaires buy,” said Faith Doherty, head of the forests campaign at the U.K.-based Environmental Investigation Agency (EIA). “It’s the best wood on earth for that kind of stuff.”

Powered by this appetite for teak, the EU is today the third largest market for Myanmar timber, accounting for 19% of imports by value. India and China, the two biggest markets, together account for 53%, based on data from the EIA.

Teak decking on a luxury yacht at the London Boat Show, January 2018. Photo by Sophie Cohen/Mongabay.
Teak decking on a luxury yacht at the London Boat Show, January 2018. Photo by Sophie Cohen/Mongabay.

Johannes Zahnen, forestry officer at WWF-Germany, said the EU should impose sanctions on all Myanmar timber instead, calling sanctions against a company like MTE “easier to circumvent.” “Only when the EUTR and sanctions are consistently implemented on [a] country level can things change. Until now, unscrupulous companies can still circumvent sanctions by buying timber indirectly — for example, by buying timber from Myanmar through [a third country],” he said. The European Commission did not respond to a request for comment.

“The sanctions are not a silver bullet [against the illegal timber trade],” Doherty said. “But they provide a stronger tool to address existing crime … by giving enforcement authorities the means to investigate the finances of companies who insist on breaking sanctions and importing timber from Myanmar.”

After the U.S. placed sanctions in April, MTE’s timber auctions in May saw limited bidding and lower prices, The Irrawaddy reported. “It is too soon to see the impact of sanctions as they have only been in place a few months [but] many traders do not want to break sanctions,” Doherty said.

She added that since the sanctions, yacht builders have been looking at alternatives to Myanmar teak, commonly marketed as Burmese teak, but “there is a reluctance to use it especially by owners of yachts, as they want the best.”

“Those who … still want to purchase teak … will most likely go to other countries where Burmese teak has been stockpiled,” she said, citing places such as Taiwan, China and Malaysia.

‘We stand to lose everything’

Between 2001 and 2020, Myanmar lost tree cover roughly the size of Switzerland, according to data from Global Forest Watch. Logging of teak and other valuable hardwoods helped drive this degradation, with the forestry sector providing critical funding to the country’s military rulers for decades.

Myanmar tree cover loss from 2001 to 2018. Data from Global Forest Watch.

In 2011, the military ceded some power to a quasi-civilian government that began ramping up efforts to save Myanmar’s forests. Beyond the ban on the export of raw timber logs in 2014, there was a logging ban from 2016 to 2017 that roiled the milling industry, and significant reductions in annual logging limits set by the state.

With the junta back in power, the last decade’s worth of progress could be lost overnight, said Esther Wah, an Indigenous Karen activist who has been fighting for customary land rights since the time of the previous government.

“One can tally wins and losses under the [previous] government, but now we stand to lose everything,” Wah said. “Myanmar’s valuable timber exists mainly in areas where Indigenous forests and lands have been under threat for decades … if history is any indicator, forests will be logged as the military turns to resource extraction to finance its repressive rule … if we try to resist the plunder, we will be jailed.”

In the months since the coup, ethnic Rawang youths have been arrested for fighting to protect their land and forests in Kachin state. While they have since been released, many environmental and land rights activists, including Wah, have fled the country or gone into hiding, fearing persecution. Meanwhile, the Indigenous communities that remain are gearing up to fight the militia, putting an end to long-running, grassroots-led conservation programs in their forests.

Children standing in a log yard in Myanmar. Image courtesy of EIA.

Though analysts such as Enters have qualified that much of Myanmar’s primary forest is already gone, the country still has globally significant tracts of forests left in the Tanintharyi region in the south, in Kachin and Shan states, and in Sagiang division in the north — all of which are now at risk.

Even with the MTE’s auctions seeing limited demand, illegal logging will likely continue, with the junta profiting from illicit overland sales to China, said Kevin Woods, a senior policy analyst for U.S.-based nonprofit Forest Trends.

“That’s how it worked previously when the military was in power … so I wouldn’t be surprised if they increasingly revert to that, especially if they’re having a hard time selling through more formal channels,” Woods said.

Pianma town the main entry point for logs from Myanmar into Nujiang Prefecture Yunnan. Photo courtesy of Environmental Investigation Agency
Pianma town the main entry point for logs from Myanmar into Nujiang Prefecture Yunnan. Image courtesy of EIA.

“It’s not like it was clean and tidy with the previous government. There was a ton of illegal logging going on,” Woods added. “But with the military, the rule-makers are also the enforcers, and there’s zero accountability and transparency. There’s no rule of law.”

Wah said that over the past decade, Myanmar’s Indigenous communities have been working hard to secure customary land rights, implement forest conservation initiatives, and prove to the government and international community that Indigenous people not only have sustainable livelihoods, but are the best guardians of their forests.

“In Myanmar, we still have a lot of forest under Indigenous territory. Our people have a lot to contribute in mitigating climate change internationally,” Wah said. “But under this regime, how can we contribute? This coup doesn’t just affect our country, but the whole world.”

Banner image of children standing in a log yard in Myanmar. Image courtesy of EIA.

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