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Consumer Goods and Deforestation: an Analysis of the Extent and Nature of Illegality in Forest Conversion for Agriculture and Timber Plantations

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Consumer Goods and Deforestation: an Analysis of the Extent and Nature of Illegality in Forest Conversion for Agriculture and Timber Plantations Forest Trends Report Series Forest Trade and Finance September 2014 Consumer Goods and Deforestation: An Analysis of the Extent and Nature of Illegality in Forest Conversion for Agriculture and Timber Plantations With support from Cover photo: Global Witness. Forest conversion for oil palm plantations in Sarawak, Malaysia. Consumer Goods and Deforestation: An Analysis of the Extent and Nature of Illegality in Forest Conversion for Agriculture and Timber Plantations Lead author: Sam Lawson With contributions from Art Blundell, Bruce Cabarle, Naomi Basik, Michael Jenkins, and Kerstin Canby September 2014 With support from Consumer Goods and Deforestation ACKNOWLEDGMENTS This report is the result of a comprehensive analysis led by Sam Lawson for Forest Trends. Sam Lawson was the lead author, with contributions from Art Blundell, Bruce Cabarle, Naomi Basik, Michael Jenkins, and Kerstin Canby. The lead author would like thank all those who supported the project and made this research possible. Special thanks go to Art Blundell and Sten Nilsson for their contributions to the development of the methodology for estimating the scale of the problem. Forest Trends would also like to thank the external reviewers who generously gave of their time to enrich this report (in alphabetical order): Andrea Azevedo, Fernanda Bortolotto, Doug Boucher, Ken Chomitz, Kevin Currey, Penny Davies, Chris Elliott, Julia Falconer, Nazir Foead, Carl Hausmann, Toby McGrath, Steve Rhee, Jade Saunders, Neil Scotland, Francis Seymour, Claudia Stickler, Nathalie Walker, and Eric Wakker. The lead author is also grateful to James Hewitt for the collection and processing of relevant trade data, Alastair Sarre for his invaluable editorial assistance, Eve Richer, Lina Scott, and Anne Thiel for copy-editing, and Melissa Tatge and Laura Golben for completing the design and layout. This study was funded by the UK Department for International Development (DFID). Note: The views expressed in this publication reflect those of the author and do not necessarily reflect the views of DFID or the external reviewers. Dedication This report is dedicated to Edwin Chota Valera, Leoncio Quincima Meléndez, Jorge Rios Perez, and Francisco Pinedo — four indigenous Ashaninka leaders from Peru assassinated in September 2014 in a suspected revenge killing by illegal loggers — and to the many activists who have lost their lives in the fight against illegal deforestation. ii PREFACE PREFACE As global populations increase and more people around the world rise out of poverty, the demand for agricultural products such as meat, rice, and palm oil will continue to rise. Increases in the efficiencies and productivity of food production around the world have helped to reduce the prevalence of hunger and improve the nutrition status of millions in recent decades. These successes, however, could be undermined by illegal practices that cause negative environmental or social impacts—impacts which could ultimately threaten long- term food security. In recent years, it has become apparent that the most significant threat to the world’s remaining forests is conversion for commercial agriculture and other non-forest use. Agriculture alone accounts for over 70 percent of all deforestation across tropical and sub-tropical countries, along with other smaller drivers, such as mining, infrastructure, urban expansion, and remaining activities (Hosonuma et al. 2012)—all in response to unprecedented demands from a growing population on forestlands for food, fuel, and fiber. In August 2014, for example, the Government of Indonesia announced plans to clear 14 Mha of forests by 2020 to provide more space for infrastructure, energy, and food supply despite ambitious emissions reduction targets (Jakarta Post 2014). While economic development and food security is a clear priority for many of the countries with the world’s remaining tropical forests, inclusive and sustainable growth needs to be nested within strong social and environmental safeguards, a strong sense of rule of law, and clarity on the land rights of indigenous and local communities who have lived in, cultivated, and held customary rights to these forests for generations. As the world seeks affordable solutions to enhancing development and prosperity for billions, land for agriculture must be acquired legally, sensibly, and sustainably. Instead, we are operating with a flawed model. It is increasingly clear that much of the land conversion for large-scale agricultural projects is currently being undertaken in violation of some of the producer countries’ most basic laws and regulations and incurring high social and environmental costs: non-compliance with processes related to the issuance of rights to convert forests, within permitting processes, during the clearing of forestland, and/or in the implementation of social safeguards. This study has sought to estimate for the first time the proportion of recent tropical deforestation that is the result of illegal clearing for commercial agriculture and how much of this was driven by overseas demand. In addition, the study estimates for the first time the scale of primary tropical wood products now being traded globally and originating from forest conversion, as opposed to selective logging. Forest Trends has been involved in national and international policy initiatives aiming to combat the trade in illegally sourced wood products for close to 15 years, witnessing firsthand the exciting and dramatic changes that have taken place in both producer and consumer nations. Producer countries—particularly those engaging in Forest Law Enforcement, Governance and Trade Voluntary Partnership Agreements (FLEGT VPAs)—are clarifying regulatory frameworks that improve their ability to demonstrate the legality of wood products to their public and discerning buyers. Demand-side measures in consumer nations have been shown to support the enforcement of producer countries’ own laws and regulations. The results of this report suggest that there are tremendous opportunities to draw lessons from the significant initiatives that have been developed to combat the trade in illegally sourced timber while promoting the trade in legally sourced timber. These include the development of standards, importing trade legislation (such as the EU Timber Regulation or the 2008 amendments to the US Lacey Act), public procurement policies, and iii Consumer Goods and Deforestation voluntary private sector purchasing policies and investment standards. However, there has been limited analysis to date of how similar mechanisms could leverage credible legal compliance for land conversion, support for more rational and sustainable land use policies and laws, and how they could increase transparency in the implementation of laws and regulations benefiting both public and private interests. It is our hope that this report can initiate an ongoing process that will improve the understanding as well as a more nuanced view of the nature of deforestation, and a differentiation of the tools that can be used when this deforestation is rationally planned and legally implemented versus when it is unplanned and illegal. More research will catalyze a more thorough audit of existing information and result in more and clearer data on this phenomenon in the coming years. We also hope this will catalyze improved legal compliance and enforcement with laws and regulations that govern the conversion of forestland to other uses. Michael Jenkins President and CEO Forest Trends iv TABLE OF CONTENTS ACRONYMS ........................................................................................................................ xi GLOSSARY ........................................................................................................................ xiii EXECUTIVE SUMMARY ....................................................................................................... 1 Background ....................................................................................................................... 1 Key Findings ..................................................................................................................... 2 Recommendations ............................................................................................................. 4 1. BACKGROUND ................................................................................................................ 7 1.1 Introduction: Why are Illegality and Associated Trade Important? ...................................... 7 1.2 Context: Commercial Agriculture and International Demand as Drivers of Deforestation ................................................................................ 8 2. METHODOLOGY ............................................................................................................ 11 2.1 Introduction: Evidence of Illegalities ............................................................................ 11 2.2 Measuring the Problem ............................................................................................... 13 3. SUMMARY RESULTS .................................................................................................... 17 3.1 Illegal Agro-Conversion and Associated Exports as a Proportion of Tropical Deforestation ....................................................................... 17 3.2 Trade in Commodities Associated with Illegal Agro-Conversion ........................................ 21 3.3 Trade in Tropical Conversion Timber
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