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CROSSROADS the Illicit Timber Trade Between Laos and Vietnam ACKNOWLEDGEMENTS CONTENTS This Document Was Produced with the Financial Assistance of the European Union

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CROSSROADS the Illicit Timber Trade Between Laos and Vietnam ACKNOWLEDGEMENTS CONTENTS This Document Was Produced with the Financial Assistance of the European Union CROSSROADS The Illicit Timber Trade Between Laos and Vietnam ACKNOWLEDGEMENTS CONTENTS This document was produced with the financial assistance of the European Union. The contents are the sole responsibility of EIA and can under no circumstances be regarded as reflecting the position of the European Union. 1 INTRODUCTION 2 THE THREATENED FORESTS OF LAOS EIA thanks the Adessium Foundation for its support 6 VIETNAM'S BURGEONING TIMBER INDUSTRY of our work on environmental crime. This report was written and edited by the Environmental Investigation Agency 8 INSIDE THE ILLICIT CROSS-BORDER LOG TRADE Report design by: www.designsolutions.me.uk 16 ONWARD DESTINATIONS Many thanks to Emmerson Press for the printing of this report (Emmerson Press: +44 (0)1926 854400) July 2011 18 INTERNATIONAL FOREST GOVERNANCE POLICIES 20 RECOMMENDATIONS CHINA VIETNAM Hanoi LAOS Vientiane THAILAND Sekong town Attapeu town Qui Nhon CAMBODIA ENVIRONMENTAL INVESTIGATION AGENCY (EIA) 62/63 Upper Street, London N1 0NY, UK Tel: +44 (0) 20 7354 7960 Ho Chi Minh City Fax: +44 (0) 20 7354 7961 email: [email protected] www.eia-international.org DOUBLE MEANING: FRONT COVER: dong: Vietnam - unit of currency, money Trucks carrying Laos logs, Pleikan, Vietnam, 2010 dong: Laos - forest © EIA INTRODUCTION © EIA Dusk is gathering at a remote forest Phonesack Vilaysack, who sells logs to ABOVE: inspection checkpoint in Attapeu, deepest Vietnamese buyers for hard cash while his Lao logs cut by a Vietnamese southern Laos, in February 2011. The own wooden flooring factory in Laos cannot military company, Vinh, Vietnam border lies a few kilometres supply orders due to a lack of raw material. Vietnam, 2011 . away, and the area is strangely quiet as the host of Vietnamese workers employed The main beneficiaries of this illicit trade in dam construction, plantations, and are Vietnamese-based logging companies logging have returned home for the Lunar and furniture factories obtaining cheap New Year. Two motorbikes are leaning supplies of logs. EIA investigations reveal against the office wall, confiscated from that one of the biggest loggers in Laos is people attempting to smuggle a few planks a company owned by the Vietnamese of valuable rosewood across the border. military; in April 2011 EIA observed a A few months earlier investigators from huge pile of logs in Attapeu owned by this the Environmental Investigation Agency firm, awaiting transportation to Vietnam. witnessed 34 trucks carrying logs along Through investment in logging, plantations the same road bound for Vietnam. Despite and hydropower projects, Vietnamese Laos banning the export of logs, the firms have appropriated large swathes of trucks are allowed to pass unhindered. forests in Laos, stretching from Xieng Khouang province in the middle of the Flagrant violation of Lao law is the norm country to Attapeu in the south. here, due to the powerful vested interests profiting from the illicit trade in logs from The vast majority of logs smuggled Laos to Vietnam. During field investigations across the border are processed into in 2010 and 2011, EIA met with three wooden products in Vietnam and exported firms engaged in logging operations in to the main markets of the US and Laos; between them they ship around European Union. Both have introduced 250,000 cubic metres of logs to Vietnam policies to exclude illegally logged timber every year. The total volume of the log from their markets, yet the flow of logs trade between the two countries is likely continues unabated. to be at least double this. EIA first exposed the illicit log trade These logs come from some of the last between Laos and Vietnam in 2008. Recent intact tropical forests in the Mekong investigations reveal that nothing has region, and are feeding Vietnam’s booming changed. It is now time for the governments wood processing industry. Meanwhile, of the two countries to work together to Laos’ own wood factories complain of a stem the flow of logs and curb the lack of raw material. Within Laos the only over-exploitation of Laos’ precious forests. people profiting from this log trade are corrupt government officials and EIA well-connected businessmen such as July 2011 1 THE THREATENED FORESTS OF LAOS © EIA ABOVE: The land-locked country of Laos of deforestation in Laos today is Log storage area, Attapeu, (officially the Lao People’s Democratic alarmingly high. Forest cover has fallen Laos, 2011. Republic) lies at the heart of the from an estimated 70 per cent in the Mekong region and has some of the 1940s to just 41 per cent by 2002. largest tracts of primary rainforest left The annual rate of forest loss in the in mainland Southeast Asia. Home to past two decades is more than 90,000 large mammals such as the tiger and hectares.2 Much of the remainder is Asian elephant, and many ancient, composed of seriously degraded forest endemic and endangered species, with little biodiversity value.3 these forests retain a treasure trove of biodiversity. The implications of forest loss for Laos’ wealth of biodiversity are Laos’ forests also support the livelihoods severe. Large mammal species are of millions of rural and indigenous under pressure from the wildlife people. In 2008, 70 per cent of the trade and now face a fragmentation country’s population was rural, equivalent 1 and loss of habitat. Already, to 4.2 million people. These communities conservationists expect that Laos’ rely on forests for a host of services and biodiversity might not be as abundant livelihoods, such as food, fuel, building as commonly stated.4 materials and medicine. Yet Laos’ forests are seriously threatened The communities which rely on Laos’ by over-exploitation causing serious forests are being increasingly deforestation. One of the main threats marginalised by development policies is logging to feed the timber processing which pay scant regard to their industries of neighbouring countries traditional livelihoods. According to Vietnam, China and Thailand. As these the United Nations Development countries have implemented strict Programme, non-timber forest products provide 90 per cent of the income for controls of logging inside their own 5 borders, exploitation of Laos’ forests the poorest families in Laos. has increased. Forests also play a vital role in supplying Laos’ forest landscape is also clean water supplies and in water increasingly denuded by infrastructure resource management generally. Water, development, hydropower projects, in turn, is particularly important for mines and plantations, leading to both hydropower, a key element of the further unsustainable and illegal logging. Lao Government’s development strategy, and in irrigation systems, a While forest cover statistics vary in key Government objective to guarantee accuracy, what is certain is that the rate food security for rural households. 2 As logging and infrastructure projects The ongoing deforestation in Laos is a increasingly deprive these communities direct consequence of weak governance. of their livelihoods, laws enacted to Over the past two decades laws, ensure they are compensated for forest Government decrees and policy exploitation are routinely ignored. announcements have created an Far from improving the plight of its extensive regulatory framework rural people, Government policies on governing everything from land tenure management of natural resources are to timber exports, but in reality these making survival harder. regulations are widely subverted or simply ignored. Meaningful enforcement is virtually absent as powerful interest WEAK REGULATION groups including the military, businessmen and corrupt officials On paper, Laos has a raft of laws plunder the country’s natural resources controlling logging and timber trade, with impunity. As one forest inspector but on the ground the situation is told a journalist: “We catch many chaotic and prone to corruption. Under people. We ask them who they are the country’s Forest Law, logging is working for and they give us the names only allowed inside demarcated of some very important people. We then Production Forest Areas (PFAs) in line phone to ask them about the activities with approved sustainable management and they deny it. What can we do? plans. The only exception is in special They are big-bellied people.”7 cases, where the land is to be cleared for infrastructure projects. In reality, however, this is rarely observed. Under such an ineffective system, the Lao Government’s stated aim of Logging in protection and conservation returning forest cover to 70 per cent areas, as well as PFAs without of the country’s territory by 2020 management plans, is rife and has appears an impossible ambition. To been identified as the most important achieve its goal the Government driver of forest degradation by the Lao intends to naturally regenerate up to Government, along with shifting six million hectares of forest and to agriculture. Border areas and National plant a 500,000 hectares of trees. Conservation Forests, which hold the Yet with an annual deforestation rate largest remaining stocks of commercially of 0.6 per cent a year, it is more BELOW: valuable timber, are a particular focus likely that forest cover will decline Rural communities in Laos rely of illegal logging.6 further to just 30 per cent by 2020.8 on forests for their livelihoods. © EIA 3 Ironically, one of the principal reasons Corruption is widespread in Laos’ advanced by the Lao Government to forestry sector, explaining why national increase its forest coverage is to laws are widely flouted. In 2010, a BELOW: protect the country’s water resources, Government prosecutor admitted that essential for the growth of hydroelectric the number of forestry officials charged Forest landscape, Attapeu, Laos. power which has become a major with taking bribes was increasing, with source of export earnings.9 Yet it is payments being made to inspectors to BOTTOM: rapid expansion of hydropower allow cutting in excess of quotas.10 In Forest area cleared for schemes across Laos which is fuelling 2010, Laos was ranked the 154th most plantation, Attapeu, Laos.
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