Global corruption in forestry sector costs US$29 billion per annum
A new INTERPOL report estimates that the annual global cost of corruption in the forestry sector is some US$29 billion. Furthermore, illegal logging costs the forest industry between at least US$19-47 billion per annum in lost company profits. An international, coordinated response is essential to turn corruption and forest crime into a high risk, low profit activity.
A new report auspiciously released on December 9 International Anti-Corruption Day by International Criminal Police Organisation (INTERPOL), the world’s largest international police organisation, estimates that the annual global cost of corruption in the forestry sector to be some US$ 29 billion.
Entitled “Uncovering the Risks of Corruption in the Forestry Sector” the report underlines the global scale of criminal activity tied to the forestry sector and the importance of coordinating anti-corruption efforts to protect forests. The report is a result of an INTERPOL study conducted into corruption in the forestry sector, including a review of reported corruption cases held in INTERPOL’s databases and surveys conducted with law enforcement officials across INTERPOL’s 190 member countries.
Corruption and forest crime facilitates other crime
Among its key findings, bribery is reported as the most common form of corruption in the forestry sector followed by fraud, abuse of office, extortion, cronyism and nepotism and that these and other forms of corruption can occur at every stage of the global timber supply chain. The report points out that criminal networks use corruption and bribe officials to establish ‘safe passage’ for the illegal movement of timber. Criminal groups also exploit these routes to transport other illicit goods such as drugs and firearms.
It also found that the persons most likely to be involved in corruption in the forestry sector are government officials from Forestry Agencies. Government officials from other agencies, law enforcement officers and logging company officials are also found to be extensively involved.
Deforestation and corruption closely linked
The report highlights that forest crime has become more prominent, increasingly organised, sophisticated and transnational, due to the increased profitability of wood and its by-products. Furthermore, that corruption in the forestry sector is of particular importance due to the close links between corruption and deforestation rates, and the resulting impact on biodiversity loss, climate change, local community livelihoods and sustainable economic development.
Facilitated by corruption illegal logging keeps global timber prices down by an estimated 7-16 percent. Illegal timber can be sold at a lower price than legally sourced timber due to the evasion of costs along the supply chain, such as taxes and license fees. This results in lower market prices and significant losses to timber companies that otherwise attempt to source their timber legally and operate within the law.
INTERPOL estimates that illegal logging costs the forest industry between at least US$19-47 billion per annum in lost company profits. Tackling corruption will benefit the law-abiding members of the timber industry by allowing them to obtain appropriate market prices for their timber.
Policy, legislative and institutional reform needed
The report also recommends a number of measures that countries can implement to address corruption risks in the forestry sector. These recommendations concern:
- Policy and legislative reform including resolving land tenure issues and consolidating legal title or property access information to a single database for all government agencies
- Clarification and harmonisation of forest laws
- Capacity building across the entire law enforcement chain
- Enhanced financial investigation techniques
- Adoption of INTERPOL’s global secure communication network for anti-corruption investigators
- Institutional reform
– By raising awareness and documenting current corruption practices as well as potential solutions, we empower law enforcement officers in the field. This increases the chances of criminals getting caught and is one of the greatest deterrents to corruption. An international, coordinated response is an essential part of the solution to combat the organised transnational criminal groups involved in forestry crime. Our collective goal must be to turn corruption into a high risk, low profit activity, said Jürgen Stock, Secretary General of INTERPOL.
The report is an outcome of Project LEAF (Law Enforcement Assistance for Forests), an initiative launched by INTERPOL in 2012 that aims to counter various aspects of forestry crime, including illegal logging and timber trafficking, and related crimes, such as corruption. With financial support from the Norwegian Agency for Development Cooperation (NORAD), the project involves collaboration between INTERPOL and the United Nations Environment Programme (UNEP) and provides a coordinated global response to organised and transnational crime related to the forestry sector.