Investigation Into the Global Trade in Malagasy Precious Woods: Rosewood, Ebony and Pallisander

October 2010 Conducted By In Cooperation With Global Witness and the Environmental Madagascar National Parks, the Investigation Agency (US) National Environment and Forest Observatory and the Forest Administration of Madagascar Logging camp in Masoala National Park, August 2009. Over a thousand loggers invaded the park in early 2009, setting up hundreds of such camps.

October 2010 Conducted By In Cooperation With Global Witness and the Environmental Madagascar National Parks, the Investigation Agency, Inc. (US) National Environment and Forest Observatory and the Forest Administration of Madagascar

© Environmental Investigation Agency and Global Acknowledgements Witness, 2010. No part of this publication may be reproduced in any form by any means without Global Witness and EIA would like to acknowledge the permission in writing from EIA or Global Witness. support received by the German-Malagasy Cooperation, EIA and Global Witness are solely and entirely as well as the JMG Foundation. responsible for the contents of this report.

Cover photo © Toby Smith/EIA/Global Witness 2 Table of Contents

Executive Summary 4 Introduction 6 Methodology 7 Recent statutory and trade developments 8 New legislation 8 Convention on International Trade in Endangered Species 8 US Lacey Act enforcement action 8 US House of Representatives resolution on illegal logging in Madagascar 9 UNESCO World Heritage “in danger” listing 9 Trade flows I: sourcing, manufacturing and retail sales in China 10 Import-export links with Madagascar 10 Manufacturing 10 Retail markets 11

Trade flows II: US and EU retail trade in Malagasy precious wood 12 Rosewood retail sales in the United States 12 Rosewood retail sales in the European Union 13 International actors involved in precious woods trade 14 Shipping companies 14 Conditions in Madagascar for the control of illegally harvested wood 15 Expected trends in sourcing of precious woods 15 Conclusions of findings 16 Recommendations from the second phase of Global Witness/EIA investigation 17 Recommendations from the first phase of Global Witness/EIA Investigation 18 (November 2009)

ACRONYMS ANNEXES CITES Convention on International Trade 1. Executive Summary of Investigations of Illegal Logging in Sava, Madagascar 21 in Endangered Species (November 2009) FWS US Fish & Wildlife Service 2. The 13 operators officially recognized as dealing in precious wood as listed in 22 ICE US Immigration and Inter-ministerial Order 003/2009 Customs Enforcement 3. Decree 2010-141 23 MEF Ministère de l’Environnement et 4. Letter of Minister of the Environment and Forests to CITES Secretariat 26 des Forêts ; Ministry of the Environment and Forests 5. List of Chinese companies named as recipient (destinataire) of shipments 27 MNP Madagascar National Parks 6. Open Letter to Shipping company Delmas 28 7. Delmas response to EIA and Global Witness 30

Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 3 Executive Summary

In June 2009, Madagascar National Parks cated in our first investigation report to export and timber products into the European Union (MNP) with an official mandate of the Ministry illegal timber. market. Like the US Lacey Act (see below), of the Environment and Forests contracted this is a critical first step in stopping the trade Recent developments suggest progress may be Global Witness and the Environmental Investi- in illegal timber destined for US and European on the horizon. In March 2010, the new Minister gation Agency (EIA) to investigate and monitor markets. for Forests signed Decree No. 2010-141 (see the flow of illegally harvested precious wood Annex 2), once again prohibiting the cutting, from the national parks and surrounding areas extraction and export of rosewood and ebony. of Madagascar’s SAVA Region. This illicit trade in Lacey Act enforcement action Recent enforcement actions may indicate a rare, high-value species such as ebony, rose- more aggressive stance towards the export In November 2009, US enforcement agencies wood and pallisander serves export markets in of illegally harvested timber, which would be used the newly amended 2008 Lacey Act to China, the United States and Europe, where it cautiously welcomed. Global Witness and EIA raid the offices of iconic Nashville-based guitar is used to manufacture furniture and musical will be monitoring this situation closely. manufacturer Gibson, on the back of the Global instruments. The quick profits on offer have Witness/EIA findings. Gibson is suspected fuelled a timber rush which has decimated of importing illegal Malagasy ebony via its Madagascar’s few remaining precious forests. The Convention on International European trading partner Theodor Nagel GmbH Our November 2009 report, Investigation Trade in Endangered Species & Co KG. Nagel sourced its timber from trader into the illegal felling, transport and export of (CITES) Société Thunam Roger, based in Antalaha, 1 northern Madagascar. It is difficult to assess precious wood in SAVA Region Madagascar , Following the recommendations of our first the precise impact of this case, but its profile revealed the inner workings of the trade and report, in June 2010 the Minister for Environ- generated significant media interest in the the extent of the damage. It estimated the ment and Forests submitted a request to United States and Europe. Our data analysis traffic’s value at up to USD460,000 per day the Secretariat of CITES to list all Malagasy shows that those who had imported Malagasy on international markets, with most profits Dalbergia and Diospyros species (to which timber in the US and Europe prior to this raid pocketed by a small group of “timber barons”, ebony, rosewood and pallisander belong) on have since stopped. who typically channel the money into overseas Appendix III of the CITES convention. This would bank accounts and property (See Annex 1 for require the certification of the timber’s legal Executive Summary). harvesting, and allow better tracking and con- Timber flows from Madagascar to This latest report tells what happened next. trol of these species in the international trade. China It traces several important developments Until now, however, a lack of understanding This investigation reveals that between 15 since the November publication, and presents between the CITES Secretariat and Madagascan and 20 major Chinese buyers are actively findings from our follow-up investigations into authorities regarding the details of the request involved in the illegal precious wood trade from the trade flows and consumer markets which appears to have delayed implementation. Madagascar, together accounting for more facilitate and promote demand for Madagas- than 95 per cent of wood purchased from the car’s precious woods. United States and European timber barons of the SAVA Region. One Chinese legislative action company claims to have imported over 1,000 containers of Malagasy rosewood in three New decrees relating to illegal Following publication of our report and years, with plans to ship in 1,000 more in timber in Madagascar extensive input from EIA, in November 2009 the next two years – deals that have come the United States House of Representatives Following our initial investigation and subse- about through what it describes as a “special passed Bill H.R. 839, which strongly condemns quent campaigning, the Malagasy authorities relationship” with high-ranking officials in the “the illegal extraction of Madagascar’s natural issued a series of decrees designed to clean up Malagasy government. the precious woods sector. Unfortunately, these resources and its impact on biodiversity and measures reproduce many of the problems livelihoods of rural communities”. The bill called Many of these imports are destined for small highlighted in our original report. Whilst upon importing countries to “ensure that they wholesalers and furniture factories, feeding a recognising the illegal nature of the timber, do not contribute to the demand for illegally highly lucrative domestic market. Rosewood they nonetheless authorise timber exports from sourced precious woods from Madagascar” furniture prices range from a few thousand specific traders, following payment of a penalty. and upon “consumers of rosewood and ebony US dollars to almost a million US dollars for products to check their origin, and boycott top-end products. Although reliable information This ad hoc authorisation policy simply those made of Malagasy wood”. on the size of the market is not yet available, encourages further logging to replenish the EIA’s enquiries put it in the region of several timber stock, in anticipation of further decrees Furthermore, in July 2010 the European permitting its export. Specifically, the decrees Parliament passed the “Timber Import Regula- have enabled those particular traders impli- tion”, prohibiting the import of illegal timber 1. http://eia-global.org/PDF/Report--Madagascar--Forest--Aug09- -English.pdf

4 hundred million US dollars. The main bulk of instruments, carvings, decorative and luxury rosewood from Madagascar. This followed the products are made for the Chinese domestic office items. Interviews in the United States issuing of Decree 2010-141, which once again market, with small quantities exported to the and European Union countries revealed that banned all export of precious hardwoods. We United States and Europe. most dealers no longer buy Malagasy precious continue to monitor further developments and wood because of recent campaigns and publi- shipping flows. cations exposing the pillaging of Madagascar’s United States and European retail protected areas. trade in Malagasy precious wood

The United States market for furniture made The shipping industry from Malagasy rosewood remains highly specialised, consisting of relatively expensive Following sustained pressure from Global pieces imported from China for the Chinese Witness and EIA, and public campaigns by expatriate community. The investigation found environmental and conservation organisations, only a few European timber dealers stock- the French shipping company Delmas claimed ing Malagasy precious wood due to limited in a letter to the two organisations dated 5 demand. Where stocked it is used for musical August 2010 to have ceased transport of

Containers from Maersk and CMA CGM, the parent company of Delmas, in the port of Vohemar. Both Maersk and Delmas have carried shipments of precious woods from Madagascar since early 2009. Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 5 © Toby Smith/EIA/Global Witness Introduction

Rosewood being transported by bush taxi to Antahala.

© Toby Smith/EIA/Global Witness In June 2009, Madagascar National Parks on international markets, with the majority of (MNP) contracted Global Witness and the profits pocketed by a small group of “timber Environmental Investigation Agency (EIA) to barons”, who typically channel the money into investigate and monitor the flow of illegally overseas property and bank accounts. 2. Ebony is a species of the Diospyros genus, rosewood/bois harvested timber from the national parks de rose and pallisander of the Dalbergia genus. There are 43 Following our initial report and recommenda- species of Dalbergia in Madagascar, all but one of which are and surrounding areas of Madagascar’s SAVA tions, Global Witness and EIA carried out further endemic to this island. Several are particularly valued for the Region. The trade principally involves rare, export trade, including Dalbergia baronii, D. louveli, D. maritima investigations as part of the initial contract high-value species of hardwoods such as and D. madagascariensis. The first three species, whose wood with MNP, to trace the supply chains through is a lustrous deep red, are commonly called bois de rose, ebony, rosewood and pallisander2. These spe- illegal harvesting, trading, manufacture, and which commonly translates into rosewood or Madagascar cies are typically exported as logs or cut timber bois de rose, locally in Malagasy as andramena (“red trunk”). ultimately to consumer markets around the for use in furniture and musical instruments in D. madagascariensis, whose wood lacks the red lustre, is world – the findings of which are in this report. commonly referred to as pallisander, locally palisandre. Other China, the United States and Europe. Dalbergia species may also be cut and exported under these In parallel, our organisations have campaigned Global Witness and EIA undertook initial trade names to a lesser extent. “Bois de rose”, “rosewood”, to expose those responsible for perpetuating “Madagascar rosewood” and “pallisander” must be considered investigations in 2009 and published findings the trade in illegally harvested wood, both somewhat interchangeable as trade names for species within in November of that year. Our initial report find- the Dalbergia genus. (Du Puy, D.J. 2002. The Leguminosae inside Madagascar and abroad, and to pressure ings from Report of an Investigation into the of Madagascar. Royal Botanic Gardens, Kew, UK.; H. G. Richter relevant actors to bring it to a halt. Illegal Felling, Transport and Export of Precious and M. J. Dallwitz, Commercial timbers, http://www.biologie. uni-hamburg.de/b-online/wood/english/) Wood in Sava Region Madagascar3, estimated this trade is worth up to USD460,000 per day 3. http://www.globalwitness.org/media_library_ detail.php/887/ en/field_investigation_into_illegal_logging_in_madaga

6 Methodology

Following initial investigations in 2009, Global • We identified brokers and agents offering • Through covert and official contacts with Witness and EIA undertook both desktop and Malagasy rosewood and ebony through Chinese and Malagasy companies trading field research to identify flows of illegally the Internet. in timber, we traced a full map of the sup- harvested precious woods from Madagascar }} Trade databases analysis ply chain and identified trading practices to manufacturing and consumer nations. It among these companies. • We examined public databases containing identified key actors in the trade, transport, records of trade between the US, Europe }} Enquiries in US, Europe and China distribution and/or sale of ebony, rosewood and China. The databases typically contain • We contacted enforcement officials in and pallisander. records taken from shipping manifests, several countries to determine their The following steps and activities were and do not represent a complete picture of countries’ actions regarding the trade in undertaken: the level of trade, nor do they contain each illegally harvested Malagasy wood. shipment of a particular good. Nonethe- }} Analysis of documents and follow-up from • We contacted companies involved in less, they allow identification of those Phase 1 field investigations shipping rosewood to alert them to the po- companies trading heavily in particular tential risk of transporting illegally logged • Using the shipping manifests, invoices commodities, and give a general impres- wood, and to gain further information and other documents from Madagascar, sion of the relative level of activity. we built a database to track the price and about the trade routes used by Malagasy volume of Malagasy wood and identify }} Field investigation in Madagascar and China exporters of timber. significant players in the trade. • We interviewed relevant actors in the • We contacted retail and wholesale suppli- timber trade in Madagascar, from loggers ers of rosewood and rosewood furniture }} Web research working in camps inside national parks, to learn more about their supply chains • We researched the retail and wholesale to drivers transporting logs, to “collectors” and gauge the level of knowledge in the availability of rosewood and rosewood purchasing the wood on behalf of larger industry regarding the ultimate origin of furniture material in the United States, exporters and financiers. the wood used in their products. Europe and China.

Loggers prepare rafts to float rosewood logs downstream inside Masoala National Park, August 2009. Because rosewood is too dense to float, three to five additional trees of lighter wood must be chopped down for each log. Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 7 © Toby Smith/EIA/Global Witness Recent Statutory and Trade Developments

Since the Global Witness/EIA report was stipulated that the permission was valid request to the CITES Secretariat to list two of issued in November 2009, a number of events for only 60 days, and that all timber must the most threatened genera, Dalbergia ssp. relevant to the flow of illegally logged precious be exported by 30 November 2009. (rosewood/bois de rose and pallisander) and woods have transpired within Madagascar and Exporters were also required to pay a Diospyros ssp. (ebony) , on Appendix III of the its trading partners. For further background fine of 72 million ariary (approximately CITES treaty. Appendix III protections require please refer to the first report. €26,000) per container, as stipulated in that the country in question issues a certificate a previous decree, Inter-ministerial Order of origin attesting to the legality of the timber’s 38244/2009. harvest, and that countries involved in import New legislation • In what appears to be a total contradiction of the listed species verify that all import Several organs of the Malagasy government of Order 38409/2009, the Prime Minister shipments are accompanied by these export have been engaged in issuing a series of issued a note de service on 31 December permits. In addition, other countries with the decrees attempting to further the “assainisse- 2009, which declared that all traders who same or similar species may also be required ment” (cleaning up) of the precious woods sec- had fulfilled the conditions of Inter-minis- to issue certificates of origin to differentiate tor. Unfortunately, these decrees are strikingly terial Order 38244/2009 were permitted to their exports from those of the country which similar in their approach to those described load their merchandise. No conditions or has chosen to place its population on Appendix in our previous report: they confirm the illegal timeline were specified in the note. III. nature of the merchandise awaiting export, and }} On 24 March 2010, the government issued On 10 June 2010, the Minister in charge of the authorise the export of an established quantity Decree 2010-141, which unconditionally Environment and Forests submitted a request of timber from particular traders, typically banned all harvest, transport or export of to the Secretariat of CITES to list all Dalbergia upon payment of some sort of penalty. rosewood or ebony in all of Madagascar (see and Diospyros subspecies on Appendix III of Much like the previous decrees, these new Annex 2). CITES (see Annex 3). It was also reported that authorisations continue to facilitate the extrac- }} On 11 May 2010, the Prime Minister issued that the Malagasy delegation planned to submit 4 tion and commercialisation of timber from a service note permitting the export of a bid for inclusion in Appendix II by 2013. Inclu- vulnerable and protected areas. Despite firm 79 containers approved for export under sion of a species in Appendix II of CITES gives deadlines in the legislation mandating an end Inter-ministerial Order 38409/2009 which a country broad authority to prevent the level to exports after a given date, timber traders had been impounded. of exports from jeopardising the continued survival of a species. inevitably claim that they have been unable to The new legislation introduced since the pub- use their full quota and demand extensions, lication of Global Witness/EIA’s first report has which are provided in the form of new decrees. no effect on the legal status of the harvested US Lacey Act enforcement action These extensions enable the export of yet more wood. These decrees continue to explicitly illegal timber, which is continuously replaced acknowledge the “illicit nature” of the wood. On 6 November 2009, agents of the US Fish by freshly cut stock from the forest. Also, as stated in the previous report, the policy & Wildlife Service (FWS) and Immigration and Customs Enforcement (ICE) raided the Recent enforcement actions by the new permitting the export of illegally logged wood facilities of the Gibson Guitar Company in Minister of the Environment, Water and Forests, by those who financed its extraction is likely Nashville, Tennessee. Gibson, an iconic instru- Gen. Herilanto Raveloharison, suggest that his a violation of Inter-ministerial Order 13892 of ment manufacturer and one of the largest Ministry may now be taking a more aggressive 25 October 1985, which prohibits restitution American producers of musical instruments, stance towards the export of Malagasy illegally of illegal wood to those who have obtained it was suspected of importing Malagasy timber in harvested timber. In July 2010, Gen. Ravelo- illegally. violation of the US Lacey Act, a statute whose harison was reported to have travelled to the amendment in May 2008 made it a federal Comoros to deal with an impounded shipment Convention on International Trade crime to trade in illegally harvested plants and of timber originating from the port of Tamatave. in Endangered Species plant products. (See Box 1 left for text of the Legal actions taken by Malagasy authorities amended Lacey Act statute) since Global Witness/EIA’s first report: Following meetings with officials of the Ministry of Environment and Forests in August According to trade data, in recent years Gibson }} Inter-ministerial Order 38409/2009 2009, Global Witness and EIA worked with the imported tons of high-quality Malagasy ebony • This Order, issued on 5 October 2009, Malagasy governments and the Secretariat from a German company, Theodor Nagel GmbH allowed each of the 13 traders listed previ- of the Convention on International Trade in & Co. KG, for use in high-end guitars such ously in Inter-Ministerial Order 003/2009 Endangered Species (CITES) to explore options as the Gibson J-45, an instrument used by (See Annex 2) “agréments d’exportation” for providing vulnerable Malagasy tree species a non-transferable quota of twenty-five with international trade protections. Our 20-foot containers of precious wood organisations worked with the Ministry of 4. http://wwf.panda.org/?193885/Glimmer-of-hope-for-ravaged- Madagascar--as-precious-woods-nominated-for-trade- for export, valid only once. The decree the Environment and Forests to formulate a restrictions

8 It is unlawful for any person – 1. to import, export, transport, sell, receive, acquire, or purchase any fish or wildlife or plant taken, possessed, transported, or sold in violation of any law, treaty, or regulation of the United States or in violation of any Indian tribal law; 2. to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce— A. any fish or wildlife taken, possessed, transported, or sold in violation of any law or regulation of any State or in violation of any foreign law; B. any plant— i. taken, possessed, transported, or sold in violation of any law or Image 1: Document showing shipment of precious wood from Sté THUNAM to Theodor Nagel in 2009 regulation of any State, or any foreign law, that protects plants or that regulates— – are small compared to those of the Chinese the raid resulted in significant media attention on I. the theft of plants; importers dealing with dozens of containers the new prohibition on trade in illegal timber and II. the taking of plants from a of raw rosewood and ebony. However, Nagel’s raised the profile of the issue of illegal extraction of park, forest reserve, or other long history in the SAVA Region and tight, formal timber in Madagascar. Analysis of trade data and officially protected area; relationship with Société THUNAM make it an interviews with those who had imported Malagasy important player in the region’s industry, having timber prior to the raid indicate that this activity III. the taking of plants from an played an important role in building the capacity has now ceased entirely in the US and Europe. officially designated area; or of Thunam’s factory. IV. the taking of plants without, or contrary to, required The Nashville-based Gibson appears to have US House of Representatives authorization; done a fair amount of work to determine the resolution on illegal logging in ii. taken, possessed, transported, origin of the wood used in the construction of Madagascar or sold without the payment of its guitars, which makes sense from a business On 4 November 2009, the US House of Repre- appropriate royalties, taxes, or perspective given the effect that a wood’s quality sentatives passed H.R. 839, in which the House stumpage fees required for the and consistency can have on an instrument’s plant by any law or regulation of sound. In 2007, procurement officers from three strongly condemned “the illegal extraction of any State or any foreign law; or major American guitar companies – Gibson, Madagascar’s natural resources and its impact on biodiversity and livelihoods of rural communi- iii. taken, possessed, transported, Taylor and Martin – were taken by Tropical Forest ties”. The bill called upon importing countries to or sold in violation of any limita- Trust (TFT) on a fact-finding trip to Madagascar. “ensure that they do not contribute to the de- tion under any law or regulation The object of the trip was to identify sustainable mand for illegally sourced precious woods from of any State, or under any foreign sources of wood suitable for guitar construction law, governing the export or and encourage efforts to build a value-added Madagascar” and upon “consumers of rosewood transshipment of plants; or industry in Madagascar that could reliably and ebony products to check their origin, and boycott those made of Malagasy wood”. C. any prohibited wildlife species supply US industry with suitable high-value (subject to subsection (e) of this wood. The trip found that it could take years to section); create a sustainably managed supply of ebony, UNESCO World Heritage “in and confirmed the dubious legality of wood danger” listing Box 1: Excerpt from Amended Lacey Act 2008 available for purchase at the time. Despite these warning signs, trade data indicates that Gibson The World Heritage Committee of the United continued to purchase wood from Nagel even Nations’ Educational, Scientific and Cultural the likes of Woody Guthrie and Bob Dylan.5 after the Lacey Act protections came into effect Organization (UNESCO) at its 34th Session in July Theodor Nagel, a large international dealer in in May 2008. Gibson CEO Henry Juszkiewicz 2010 “noted that despite a decree outlawing the exotic and tropical wood, has had an exclusive has since stated that Gibson “takes the issue exploitation and export of rosewood and ebony, working relationship with the Malagasy Société of responsible wood sourcing very seriously”, Madagascar continues to provide export permits THUNAM Roger for some twenty years, import- and responded to the raid with a press release, for illegally logged timber.” It therefore put the ing semi-finished ebony, pallisander, faho and stating it only purchases legal timber and is World Heritage Site “Rainforests of the Atsinanana” other woods in significant quantities. “fully cooperating with agents with the U.S. Fish on its “List of World Heritage in Danger”.6 and Wildlife Service in connection with an issue Nagel appears to be the only non-Chinese involving harvested wood”. company currently dealing with Malagasy pre- 5. 5.Paste Magazine, http://www.pastemagazine.com/ cious timber, and the quantity of the company’s While it is too soon to comment on the long-term articles/2010/06/behold-a-dark-horse.html effect of the US investigation into Gibson Guitar, purchases – fewer than ten containers per year 6. http://whc.unesco.org/en/news/639

Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 9 Trade Flows I: Sourcing, Manufacturing and Retail Sales in China

Malagasy rosewood is believed to have first China is financed by at least one Beijing-based Huangpu in Guangzhou and Zhangjiagang been brought to China by Zheng He during his SOE. This company claims to have shipped over in Jiangsu are the major import points of expedition to the West (1403–1433). The logs 1,000 containers of rosewood – the equivalent entry. Hong Kong and Shanghai also bring in he brought back are said to have been made of around 50,000 trees – from Madagascar in the substantial amount of logs each year; the logs into furniture for the emperors, which is still past three years and plans to ship 1,000 more are then distributed to the inland provinces. exhibited in the Forbidden City. It is regarded in the next two years. It claims to have a “special Major consuming provinces in terms of using as high-value material for traditional furniture relationship” with high officials in the Malagasy rosewood as raw materials for production are making, and has recently become a valuable government, stating that all business transac- Jiangsu, Zhejiang, Fujian, Guangdong, Hebei, item among wealthy Chinese businessmen and tions are a result of this relationship. Officials at Tianjin and Beijing. collectors. The China Furniture Association’s this company made particular reference to the “Red Wood Department” promotes rosewood role of the current president of the transitional furniture as well as furniture made of several government in Madagascar, Andry Rajoelina. Manufacturing other species. The price for rosewood products Rajoelina made visits to Guangzhou during Factories that make traditional “red wood” has quadrupled in the past decade, and his time as mayor of Antananarivo, and these Ming- and Qing-style furniture are located in dealers in rosewood logs have correspondingly officials claimed that the president continues to three major areas: prospered. play an active role in facilitating the rosewood trade. Smaller buyers have varied interests in }} Jiangsu/Zhejiang/Shanghai area China: some are government contractors working }} Guangzhou/Shenzhen/Fujian area Import-export links with on African aid projects, while some are from the }} Hebei/Tianjin/Beijing area Madagascar textile industry in Jiangsu Province, the home The total number of factories is estimated at There are about 15–20 major Chinese buyers of “red wood” furniture manufacturers and the around 300–500. A typical factory usually that operate in Madagascar (see Annex 4), wood port of Zhangjiagang. hires about 150–300 workers, supervised by a buying the timber from the well-known group Most of the buyers distribute to furniture handful of highly skilled carvers. Since carving of timber barons operating in the SAVA Region.7 factories and smaller wholesalers in China. skills are passed down only within families, While a handful of state-owned enterprises Furniture factories typically place a down most of the factories have labour shortages, (SOEs) are involved in sourcing rosewood, payment with an importer once wood is loaded and workers are paid well. A chief carver can buyers in Madagascar are predominantly from on a ship in Madagascar and an export licence the private sector, although many are directly from the Malagasy government is obtained. or indirectly financed by SOEs. Upon issuance of a bill of landing, payments 7. Global Witness/EIA 2009. Report of an Investigation into the A company that boasts of importing more than from the factories are made to the importers, Illegal Felling, Transport and Export of Precious Wood in SAVA 60 per cent of the Malagasy rosewood sent to and ownership of wood shifts to the buyers. Region Madagascar; see also list of importers and timber barons in Annexes 4 and 1, respectively.

Image 2: Workers at a sawmill in Antalaha that stocks Image 3: A Chinese buyer weighs rosewood for export Image 4: A rosewood trader in Zhangjiagang displays rosewood logs and produces large quantities of sawn in Madagascar’s SAVA Region recently imported stock from Madagascar. The logs can ebony be identified by the carved handles used by Malagasy loggers to drag the logs through the forest

10 ©EIA ©EIA ©EIA

Image 5: Traditional carving at a furniture factory in Image 6: Rosewood furniture at a trade show in Shang- Image 7: The rosewood cabinet above retails for Shenzhen. Factories such as these turn raw logs from hai. The bed displayed above retails for approximately approximately USD60,000. Shanghai. Madagscar into valuable luxury items. USD800,000 earn up to USD100,000 per year, while more instead sourcing it after receiving orders for industry. Reliable information on the size of the junior employees might earn USD10,000. furniture. The situation is similar in the North, market is not available at present, but based where more and more factories are looking into on enquiries at several shops and factories, EIA Traditionally, “red wood” referred to some 33 species other than Malagasy rosewood. estimates the annual turnover of the industry species from Southern China, India, Burma, at several hundred million US dollars. A piece of Vietnam and other Southeast Asian countries. Factories that still use rosewood as their primary rosewood furniture’s price typically ranges from The most sought-after species are Red materials are mostly located in the Jiangsu/ a few thousand US dollars to close to a million, Sanders (Pterocarpus santalinus) and Hainan Zhejiang/Shanghai area, with a few in Shenzhen/ depending on the size and intricacy of craftsman- Scented Sanders (Dalbergia odorifera), but Guangzhou. Of the two factories EIA visited, one ship of the product. The retail price of rosewood rosewood from Madagascar has become a good makes at least 60 per cent of their products with furniture has tripled over the last 5–7 years. substitute for these increasingly scarce Asian Madagascar rosewood, and the rest with species species. Due to the difficulties in obtaining imported from Laos and Cambodia. Some companies claimed to have sold rose- rosewood from Madagascar, its ever-increasing wood in raw or finished form to international retail price, and the fact that similar species buyers, either foreigners living in China or are more easily accessed from other East Retail markets overseas Chinese. However, none could provide African countries, many of the factories have Nationwide, there are around 1,000 to 1,500 any evidence of the actual sale or shipping recently ceased to use rosewood. EIA esti- retail stores selling rosewood. There are documents. When contacted, several shops in mates that more than 50 per cent of the “red 50–100 retail shops in each of the major cities the US that deal with Asian “red wood” furniture wood” factories do not use Malagasy rosewood (such as Shanghai, Beijing, Guangzhou and stated that they did not regularly carry as their main material due to its high price, but Shenzhen) and 30–50 in second-tier cities like products made with true Malagasy rosewood. rather keep a small inventory of both raw wood Suzhou, Hangzhou and Chongqing. It is possible that occasional shipments of and furniture. Officials at several factories Malagasy rosewood products pass through located around Beijing area said that they Of the 20 retail shops visited in Jiangsu, Shanghai these shops in response to special orders, did not keep a good inventory of rosewood, and Beijing, all sell primarily to the domestic simply because of its popularity in China. market, and appear to be representative of the

Graph 1: The chart shows the indicative price for the rosewood used in the furniture item in image 7, at different points in the supply chain

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

0 Forest Export Wholesale Retail Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 11 Trade Flows II: US and EU Retail Trade in Malagasy Precious Wood

Rosewood retail sales in the The range of rosewood furniture available Malagasy precious woods are also available in United States for retail purchase in the United States is unfinished or semi-finished form from several considerably down-market from that available specialty wood suppliers, although quantities The US market for furniture of the kind made in China. Tables and chairs are advertised for appear to be extremely limited and drawn from Malagasy rosewood remains highly USD1,000–2,000, and bed frames may be sold from old stock imported before the beginning specialised, apparently consisting only of for as much as USD5,000, but craftsmanship of the current political crisis in Madagascar. relatively expensive imported pieces manufac- does not approach the level of the wares sold In contrast to retailers of finished rosewood tured in China. Accordingly, retailers target the in China, in terms of both intricacy and the products, these suppliers tend to have very Chinese immigrant and expatriate community, visible quality of the raw material. Given that specific information on the origin and quality or customers with a particular interest in East the US market appears to be less sophisticated of the wood species that they sell, since Asian art. due to a lower overall level of demand, it is most of the premium on these products is While the United States has imported nearly unsurprising that retailers place less emphasis derived from their scarcity and quality. These USD2.5 million worth of products described as on the quality of the material used. Instead, companies tended to purchase wood through “rosewood” from mainland China since 2008, sales pitches tend to focus on the type of intermediaries such as Theodor Nagel, rather import records do not show any products design, a reflection of the fact that most of than sourcing directly from Madagascar or identified as Malagasy in origin. Importers of these goods’ appeal lies in their exotic nature other countries. and Chinese roots. certain plant products, including sawn timber Through web sites and phone sales, and furniture, are required to identify the EIA carried out telephone interviews and rosewood planks or even log sections can genus, species and country of origin of the site visits with 28 US retail stores and online be purchased in small quantities for prices products they import, but this information dealers in ten states advertising rosewood showing a huge mark-up on the export price is not yet available in publicly accessible furniture. Those interviewed showed a severe of rosewood. For example, one vendor sells databases. The majority of products whose lack of knowledge about the ultimate origin of planks of rosewood measuring about 4 cm x country of origin was declared in shipping the raw materials used in their products. Three 4 cm x 38 cm for USD36.50 each – approxi- manifests are identified as Patagonian (from claimed that their products were manufactured mately USD60,000–65,000 per cubic metre Brazil, Bolivia or Paraguay), Indian or Thai. in Thailand or used rosewood of Thai origin. for a product that is exported for USD2,530 While small quantities of rosewood specifically Other merchants reported that they were not per cubic metre. aware of the origin of the timber used in their identified as Malagasy in origin have reached These companies are clearly aware of the furniture, or that it came from mixed sources. US shores since 2005, these shipments all problematic nature of Malagasy precious When mentioned, all discounted Madagascar as appear to have taken place prior to the current timber, with one web site offering the warning: a possible source for the rosewood. logging crisis. “Current conditions in Madagascar mean that this wood will become unavailable, as all

Image 8: Malagasy “bois de rose” offered for sale by Images 9,10: Rosewood samples in the Timber Shop of a US distributor of semi-finished wood products. The Theodor Nagel, Hamburg (origin not indicated) distributor warns that the wood is no longer easily available

12 exports have apparently stopped permanently. mainly music instruments and interior fittings result of the recent publicity of the Madagascar We have bought more of this wood from old in yacht construction”, and that the volume rosewood trade in illegally logged timber. stocks, but we are now paying higher prices as traded was no greater than “a lorry load per All traders interviewed in these countries the supply tightens.” year”. Those contacted maintained that they no explained that because of the high price of the longer hold Malagasy precious wood in stock. species in question they were solely used for These are mostly small traders specializing interior fittings in luxury yacht construction Rosewood retail sales in the in a wide range of “exotic wood”, who sell to European Union and for musical instruments, which was manufacturers of musical instruments, carv- confirmed by web research. Global Witness contacted timber manufactur- ings and decorative and luxury office items. Similar to the responses from the interviews ing and dealer associations in the United The “Grand Island” was mentioned by two tim- Kingdom, Austria, France, Germany, Italy and in the US market most traders are uninformed ber dealers as a “no-go zone, since all ebony about the real origin of the wood. One inter- Switzerland for information regarding the trade and redwood can only come from national in rosewood, pallisander and ebony in these viewee stated that they had purchased small parks because all other sources were long ago amounts of rosewood in the past from India, countries. We requested information on the depleted”. However, from two of the interviews individual species regarding the type of use but acknowledged that the wood actually came it emerged that Theodor Nagel in Hamburg from another country. (furniture, arts and crafts, musical instru- seems to be the main importer of the three ments, etc.), volumes, countries of origin, and species from Madagascar. Some traders and major traders and processors. However, only several small manufacturers told us that those associations in Switzerland, Germany and the companies still using rosewood originating UK provided responses. from Africa “are not behaving ethically”; some The UK Timber Research and Development manufacturers also confirmed the existence Association’s database provides information of dealers who were contacting them offering about traders in all timber species. We received rosewood and ebony of dubious origin. No responses from two of the four companies list- names were given though. ed as trading in these species. One company Two traders in Switzerland are listed with indicated that they do not deal in hardwoods, the Swiss Timber Trade Federation dealing in contrary to information found in the database, ebony, rosewood and pallisander; however only while the other one claimed to have ceased pallisander is indicated as originating from trade in rosewood “due to the recession”. When Madagascar. Contacted by phone, one company pressed for information about trade prior to the declared that they have not dealt with these recession, the latter company claimed that it species for the last 10–15 years, and would had actually been 10–15 years since they had have almost completely replaced tropical dealt in rosewood. wood with wood grown in European countries From five British traders in rosewood furniture and the US due to changing market demands. contacted by phone, three stated that they This change was attributed to criticism and imported their furniture from China, one from campaigns by Greenpeace and other NGOs a factory in Scandinavia, and one has its own “branding trade in tropical timber as almost factory manufacturing in England. The latter criminal”. Rather than directly answering ques- stated that it imported its rosewood from tions, the owner of the other company referred China, while the others claimed that they didn’t us to Theodor Nagel in Hamburg, Germany. know the origin of the rosewood used in the Rosewood as material for furniture seems to imported furniture. The prices range from £900 play no significant role in these countries. As for a coffee table, to £1,200 for a silverware is the case in the US, traders in Germany and chest, to £7,500 for a dining table and 8 chairs. Switzerland seem to be aware of the risks Because of strict data protection laws, informa- involved with dealing in timber that originates tion in Germany is difficult, if not impossible, to from Madagascar. obtain. Various requests made to the two main Of the six traders in France interviewed by organisations of the forest and timber trade phone, three assured us that they did not have sector in Germany, as well as to Customs and any of the three species in stock, whereas one the Federal Office of Statistics, did not result trader held only “a very little amount of old in the release of names of companies and stock of Makassar ebony”, the origin of which manufacturers dealing in precious wood. Even he claimed not to know. Two companies either the names of importers cannot be released bluntly refused to talk to us or avoided an inter- according to the German Customs Office. We view by delaying talks. The obvious discomfort contacted several timber dealers listed with the of talking to us may be an indicator of the German Timber Trade Federation who informed increased pressure exerted on the timber trade us that only a few traders are stocking these as expressed by the Swiss dealer, but also a species because of their “very limited use for

Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 13 International Actors Involved in Precious Woods Trade

Shipping companies changes in their policies or procedures been ence to the “illicit nature of the products” declared publicly or to Global Witness/EIA. (see image on p.17). This letter received wide Since the publication of Global Witness/ attention in the French-language press, from In October 2009, Delmas dispatched the ship EIA’s first report, at least one international sources such as the French business paper Les M/V Lea to transport some of the 300-plus shipping company, Delmas, has continued to Echos and the Voice of America’s French Africa containers of rosewood awaiting export in the ship large quantities of precious woods from service. Malagasy ports.8 Safmarine (a division of A . P. port of Vohémar. On 3 and 4 October, the ship Moller-Maersk Group), Spanfreight and United loaded 91 containers and departed Vohémar Delmas’s response to this letter was under- African Feeder Lines, three of the companies for Tamatave, some 600 km south of Vohémar, whelming; the company strenuously denied previously involved in shipments from the before sailing to Mauritius. Once in Mauritius, charges of transporting illegally sourced SAVA port of Vohémar to China, appear to have the ship was recalled to Tamatave by Malagasy timber (see Annex 6). Despite openly stating desisted as a result of international pressure authorities, where it was unloaded and its an offer to provide Global Witness/EIA with full on shippers. Global Witness /EIA contacted and cargo seized upon determination that 12 documentation of the legality of the products investigated four other shipping companies to containers lacked the proper permits. A major being shipped, and subsequent requests determine if they played a role in transporting timber trader, Roger Thunam, was reportedly by us for this information, the company has illegally sourced timber from Madagascar, but jailed along with one of his deputies, although not yet done so.9 On 11 May 2010, the office this did not appear to be the case. charges were not filed. of the Prime Minister of Madagascar issued a communiqué approving shipment of the Despite these events and continued caution remaining 79 containers, which Delmas loaded Delmas from the international community, Delmas and shipped the following month. Delmas Shipping, a division of CMA-CGM Group, continued to participate in shipping wood from the world’s third-largest container shipping Madagascar. When letters from our organiza- line, continued to play an active role in tions in September and November 2009 transporting timber from Madagascar to buyers and January 2010 met with no substantive 8. With letter dated 5 August 2010 Delmas informed Global in China. Delmas officials have been repeatedly response from Delmas officials, Global Witness Witness/EIA that they ceased transport of rosewood from pressured by a number of environmental and EIA published an open letter (See Annex 5) Madagascar after issuance of Decree 210-141 of 24 March groups and have received harsh scrutiny from detailing the company’s alleged involvement 2010 (see Annex 5). the international press. The company has with the trade in illegally logged timber in 9. In a response dated 5 August 2010 to a letter informing the company about this report, we were informed that all not been cooperative in engaging in dialogue Madagascar by drawing attention to the decree documents could be seen – at their Headquarters (see Annex with these groups, nor have any substantive granting export authorization (Inter-ministerial 7), whereas the response to our Open Letter did not contain Order 38409/2009) that made explicit refer- this condition. We will continue to seek access to these documents.

The Kiara, a Delmas-operated ship being loaded with rosewood in Vohemar port, March 2009. After repeated calls from NGOs to stop shipping illegal timber, Delmas announced in August 2010 that it would cease transport of rosewood from Madagascar. 14 Conditions in Madagascar for the Control of Illegally Harvested Wood

Since the beginning of Madagascar’s political recommended, there is little reason to expect they will keep importing rosewood, regardless crisis, the Malagasy transitional government enforcement actions to be effective. of the legal circumstances on the ground in (Haute Autorité de la Transition, HAT) has Madagascar. demonstrated conflicting priorities in its The US enforcement action relating to Gibson in management of illegal logging. While repeat- Expected trends in sourcing of November 2009 appears to have had a chilling edly insisting on the continued illegal nature of precious woods effect on demand for Malagasy wood of ques- harvest, transport or export of precious timber, Our investigations found that Chinese buyers tionable origin in the United States and Europe. local and national authorities have issued are well aware of pressure from the interna- Based on conversations with brokers and numerous proclamations providing one-off tional community to end the trade in Malagasy traders in precious timber, many companies permissions for those involved in the trade to precious wood, though most buyers with whom are now wary of exporting Malagasy timber profit through the export of their goods. EIA spoke feel that the pressure is a pretence to the United States, for fear of losing their As indicated in our previous report, these used by the West to address China’s growing merchandise through forfeiture or facing civil authorizations have only served to perpetu- trade surplus. They also believe that even if the and criminal penalties, as in the Gibson case. ate the illegal harvest of precious woods by Malagasy government implements a strict ban It remains to be seen whether these traders creating the expectations that all illegally on export in the near future, it will be tempo- are taking a “wait-and-see” approach pending logged wood will eventually be permitted to rary, as with previous bans. Buyers attracted the resolution of the Gibson case, or if they are leave the country, mostly to the benefit of the by the highly lucrative nature of the rosewood exploring a long-term commitment to examine financiers of this trade. Without aggressive import business quoted the proverb, “He the sustainability and legality of products they measures to remove the profit motive by seiz- who stays till the end laughs at the end.” The import into the United States and Europe. ing and destroying illegal timber, as previously common understanding among traders is that

Ornately carved rosewood furniture is sold for thousands of dollars at luxury malls in Beijing, Shanghai and most major Chinese cities. Rosewood from Madagascar fetches the highest prices of any variety. Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 15 Conclusions of Findings

The Malagasy transitional government require a permit issued by the state authorities ever, they also seem confident that any future continues to demonstrate conflicting priorities declaring that the wood was legally obtained. government ban on exports will, as previously, in its management of illegal logging. Repeated prove temporary. Traders generally anticipate However, without effective measures to remove pronouncements on the illegal nature of being able to continue importing rosewood, the profit motive by seizing and destroying precious timber stocks have been undermined regardless of the legal circumstances on the illegal timber stocks, as recommended in our by numerous one-off permissions for those ground in Madagascar. Global Witness and EIA previous report, enforcement actions are very involved in the trade to profit through the therefore call upon the Chinese government to unlikely to be effective. export of their goods. This has perpetuated the ban the import of all precious wood originating illegal felling of timber and the ransacking of Our market surveys in China, the US and four from Madagascar pending its final listing on Ap- Madagascar’s precious natural habitats. major EU countries have shown that the main pendix III of CITES, and to follow the examples bulk of products are made for the Chinese do- of the US and the EU legislatures to ban the However, recent developments may also mestic market with small quantities exported import of all illegally sourced timber. indicate a new commitment among parts of the to the United States and Europe. Evidence from government to curb the harvesting and export The US Fish & Wildlife Service’s investigation interviews in the United States and European of precious wood. These include the signing into Gibson Guitars’ suspected import of Union countries suggests that most dealers of a further decree prohibiting the cutting, illegally harvested Malagasy ebony seems to no longer buy Malagasy precious wood. This extraction and export of rosewood and ebony, have deeply affected demand for Malagasy can be directly credited to campaign activities coupled with promising new enforcement precious wood in the United States and by NGOs and a dramatic increase in media actions. This trend is further underlined by the Europe. Coupled with legislation on the import reporting of the plunder of Madagascar’s request of the Minister for the Environment of illegally sourced timber in the US and the protected areas. and Forests to the CITES Secretariat to list all EU, it is hoped that these traders will take a precious wood species endemic to Madagascar Chinese buyers appear well aware of pressure proactive approach to ensuring their supply in Appendix III of the CITES convention. This from the international community to end the chains are clean ahead of the resolution of the matters because export of such wood will trade in illegal Malagasy precious wood. How- Gibson case.

Malagasy rosewood bed on sale for US$1 million, made from about three cubic meters of wood. Less than 0.1% of the profits from such a sale remain in the hands of traders or communities in Madagascar. 16 Recommendations From This Report

To the Government of To the Governments of all cious woods are disappearing too quickly to Madagascar: consumer countries: allow for further administrative delay }} Work with Madagascar’s Scientific and }} Act on the recommendations made in Global }} Introduce domestic legislation to prohibit Administrative Authorities to initiate all Witness/EIA’s first report (see pages 20ff). In the import, export or possession of illegally necessary steps to subsequently list these particular, undertake an immediate inventory harvested timber species on Appendix II at the next extraordi- of all existing stocks of precious wood in all nary meeting in 2011 parts of Madagascar. Any wood in excess of To ministries of foreign affairs, the last official inventory of December 2008 trade and commerce of all OECD should be destroyed To law enforcement agencies in countries: }} Cease issuing decrees that temporarily permit the OECD: }} Advise Chinese counterparts about the role the export of illegally harvested timber }} Cooperate on legal investigations into the that the Chinese market plays in the trade }} Confirm and clarify Appendix III listing of origin and legality of precious wood stored of illegally sourced Malagasy timber, and of precious wood species with CITES Secretariat at and traded by major importers in OECD potential consequences under the amended and implement listing as a priority in the next member states that export to the United States year. Work with supportive parties to write US Lacey Act and European regulations and submit a proposal to an extraordinary designed to prevent the import of illegally To NGOs, researchers and the session of the CoP in 2011, to amend Ap- harvested timber media: pendix II by listing all precious wood species endemic to Madagascar, including look-alike To ministries and government }} Highlight the precarious state of the remain- species from other countries departments in charge of ing unique Madagascar forests; expose the transport and maritime affairs: commercial and state actors engaged in promoting the trade and its social impacts; To the Government of the }} Inform all registered shipping companies and advocate for the establishment of bans People’s Republic of China: about the illegality of timber of Malagasy on the import or possession of illegally har- origin and warn them that there may be legal }} Apply a temporary moratorium on imports vested timber in other consumer countries of Malagasy timber in order to support the risks in transporting such timber Malagasy export ban through decreasing the pressure from buyer demand To the CITES Secretariat: }} Introduce domestic legislation to prohibit }} Immediately notify Parties of Madagascar’s the import, export or possession of illegally request to list its endemic precious wood harvested timber species on Appendix III; Madagascar’s pre-

Excerpt from Inter-ministerial Order 38409/2009), issued in fall 2009, clearly demonstrating state-sanctioned laundering of illegal wood. Translation: “Given the illegal nature of the products, the operators who have paid the transactions are admitted on the list of those who are exceptionally authorised to export precious woods. The other operators who have yet to fulfil their obligations against the State are given 15 days to pay the sum that is prescribed in the transaction if they wish to appear on the list of exceptional exporters. After this deadline, products in their possession will simply be confiscated to the advantage of the State, independently of criminal charges.”

Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 17 Recommendations from the First Phase of Global Witness/EIA Investigation (November 2009):

With regard to the results of the first phase of administrations, affected communities and in precious wood, and rural development in the investigation into the illegal exploitation civil society should: areas affected by the illegal trade and trafficking of precious woods in Mada- }} inventory all stocks of precious wood seized gascar, the Global Witness/EIA investigative in towns and the countryside Medium-term measures team gives the following recommendations (November 2009): }} create aerial and maritime surveillance along Generally: Improve good governance in the the coast of the SAVA Region in order to stop forest sector, strengthen the protection of boats transporting precious woods to ships national parks and protected areas, and take Immediate measures in the open sea measures to end the international trade in Generally: To immediately cease the extraction }} strengthen the activities of mixed patrols precious woods originating from Madagascar of precious woods in the entire country and (composed of control agents of MEF, MNP, end the illegal export of precious woods. police, gendarmerie) in order to stop the At the national level ground transport of wood to the country’s The Government should: The Ministry responsible for forests should: ports and points of embarkation along the coast of the SAVA Region }} in order to bring to justice those individuals }} in collaboration with the gendarmerie, the who play a central role in the illegal extrac- national police and customs, seize all stocks }} reinforce the mixed patrols in the national parks and protected areas tion and trade in precious woods from of wood in towns and the countryside and Madagascar, work in close cooperation with place it under guard of a task force composed }} use most suitable means of communication the law enforcement organisations and the of representatives of the relevant ministries (radio, public meetings) to inform local judiciary powers of key consumer countries (Forestry, Finance, Justice, Territorial populations about the government’s efforts in applying the laws that prohibit the import Management), law enforcement forces, in the fight against the illegal trafficking of of wood produced or marketed illegally. This customs, regional administration, affected precious woods, reaffirming the illegality of includes the United States (through the communities and civil society harvesting precious woods Lacey Act) and possibly the European Union }} seize all precious woods in bulk and in The Ministry of Finance, jointly with the (through future legislation) containers which are stored in the country’s Ministry in charge of forests, should on behalf The Parliament should: ports, namely Vohémar, Tamatave, Ma- of the Malagasy government: hajanga }} change the status of ONESF to transform it }} sell the seized wood in a process supervised }} suspend all extraction and export agree- into a public organisation in order to ensure by an independent international auditor, its independence from the Ministry in charge ments, as well as accreditation of forest representatives of the international com- sector operators in the SAVA Region of forests, probably by bringing it under the munity and the civil society authority of parliament }} maintain the export ban on precious woods }} mount a thorough investigation to establish in all forms until a controlled forest exploita- }} change the status of BIANCO to transform it a list of all actors, Malagasy and foreign, who into a public organisation in order to ensure tion management is in place, and promulgate have previously profited from the illicit wood an overriding decree which confirms that all its independence from the Prime Minister’s trade, and to prevent them from participating Office, probably by bringing it under the exceptional export authorisations granted in the sale of seized wood since the export ban came into effect in 2002 authority of parliament }} destroy all stocks of precious wood that were issued in an illegal way (ultra vires) }} ensure that agents of ONESF are free from and are therefore invalid are not contained in the latest inventories, possible repercussions by politically power- and maintain the policy of destruction of all ful people who have committed forest crimes }} initiate the necessary procedures to register seized wood, in order to send a clear signal Dalbergia spp. and Diospyros spp. on CITES that it will be impossible to profit from the }} create a committee to coordinate the Appendix III in order to allow better tracking of illicit trade in the future investigation and litigation of forestry crime these species in international trade cases }} establish a special fund for the proceeds }} designate an agent to liaise with foreign law from the sale of the seized wood, }} pass legislation which punishes and dis- enforcement forces and assist in their efforts supervised by a management commit- suades the purchase, sale, export and import in combating illegal wood imports tee composed of representatives of the of illegally exploited forestry products }} continue to actively support Global Witness/ relevant ministries (Forests, Finance, The Ministry in charge of forests should: EIA in their investigation following the phase Economy, Justice, Territorial Management), completed in Madagascar civil society, donors and an independent }} put into force those texts already developed, in particular the « Projet de textes relatifs A task force composed of representatives international observer; designate the fund’s objectives as to support the management of aux titres de prélèvements des produits of the Ministry in charge of forests, law forestiers » (“Development of texts concern- enforcement forces, customs, regional the national parks, the control of illicit trade

18 ing forest products harvesting titles”) and recruitment and training of forest adminis- support the Malagasy efforts to stop illegal the « Projet de loi relative à la répression tration agents, the material establishment wood trade des infractions à la législation forestière » of a chain-of-custody control system, forest (“Development of a law governing the repres- control agents as well as rural development Other actors sion of violations of forest legislation”) projects in the zones affected by the illegal Countries involved in the traffic (transport, }} revise the legal texts regarding extraction, logging transformation and consumption) of illegal trade and export of precious wood }} determine what happened to the proceeds wood from Madagascar should: }} recruit and train forest control personnel on of the sale of the wood seized in November }} ban the import of illegally sourced wood, national and regional levels 2008 and publish the findings akin to the procedures of the US Lacey Act }} put into place a tracking system as described The ONESF should: amendment, and strengthen requirements in the study on the establishment of a per- for importers to perform due diligence on the mits and forest products traceability system }} increase the organisation’s manpower and origin and legality of their purchases train them in the methodology and tech- undertaken in January - February 2007 }} assist the Malagasy authorities in their ef- niques of independent forest monitoring }} put into place an effective chain-of-custody forts to track and seize illegal wood exports, control system of the sort already developed }} ensure that the names of those responsible and to repatriate the laundered proceeds of in collaboration with the donors supporting for infractions are listed in the agents’ illicit timber trafficking the Malagasy government monitoring and investigation reports Donors and diplomatic missions of partner }} collaborate with other law enforcement and }} install an independent forest monitor in sup- countries to Madagascar should: port of the forest administration aiming to anti-corruption organisations, namely the improve transparency and good governance DCAI, the “Department of Legal Affairs and }} cooperate with the Chinese government Fight against Corruption of Customs” and in the development of a strategy to raise }} establish a task force at the regional BIANCO awareness among Chinese wood importers level to patrol and enforce the law in the and manufacturers about the risks and national parks and protected areas and their At the regional level impacts of the import and trade of Malagasy surroundings, composed of agents of the The Ministry in charge of forests should: precious woods Ministry in charge of forests, the gendarmerie, the national police and representatives of }} affirm the invalidity of all salvage and collec- }} assist the Ministry in charge of forests to put affected communities and civil society tion permits issued by regional authorities into place a tracking and a chain-of-custody system, to train its agents and to improve }} publish a list of legal cases, containing the (DREF, decentralised administration) their technical capacities individuals responsible, the damages done }} involve local communities in the manage- and the fines requested or imposed ment of forests }} organise joint training workshops for forest control agents from Madagascar and donor }} educate and raise awareness among the At the international level countries population and regional and local officials about the negative impact of illegal logging of }} National intelligence services should launch }} support the decentralised public administra- precious woods investigations into the international traffic tion institutions in implementing rural of illegal wood and laundering of money development projects The Ministry of Justice should: stemming from this trade, and collaborate }} assist the Malagasy government to establish }} create a special tribunal in Antananarivo to with investigations launched by foreign and a maritime surveillance and control system international law enforcement services ensure follow-up of litigation cases in the }} restore conservation support funding, forest sector in order to prevent interference }} The Government of Madagascar in col- but only upon the adoption of substantive by influential suspects laboration with the government agencies measures to combat the trade in illegal wood, }} ensure the prompt follow-up of all new and of consumer countries should carry out including those recommended above pending cases concerning precious woods awareness-raising campaigns among buyers and consumers of Malagasy precious woods }} provide the Ministry in charge of forests with in consumer countries a team of high-profile lawyers to prepare cases and to represent the Ministry in courts }} The Government of Madagascar should formally contact relevant countries involved The Ministry of Finance should: in the transportation, transformation and

}} establish an accountancy and transparency consumption of Malagasy precious woods, system for the collection and (re-)distribu- including Mauritius, China, Germany, other tion of royalties and taxes derived from the European Union countries and the US, to forest sector request cooperation to halt the trade in illegally sourced wood }} publish annually a list of revenues, transactions and proceeds from the sale of seized }} The Government of Madagascar should issue wood as well as how the raised funds have specific requests to countries receiving been used, in national newspapers and on its illegal Malagasy woods in raw form or as web site finished products to pass legislation akin to the US Lacey Act amendment, prohibiting }} finance through the special fund (from the import of illegally sourced wood, and to proceeds from the sale of the seized wood)

Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 19 A logger at work in Masoala National Park, August 2009.

In the period since February 2009, a dramatic in- The investigation team also observed a serious rosewood, and possible collusion of Forestry crease in the felling and cutting of rosewood has failure by the Forestry Administration to Administration and law enforcement officials been reported in the SAVA Region of north-east control both harvesting activities in the forests with traffickers of precious wood Madagascar. As a result, several investigative and the transport of logs to the coast and to }} A lack of suitably qualified Forestry Adminis- missions have been sent into the region to gather Antalaha. tration agents at regional level evidence of these activities. These missions The mission found substantial evidence of the }} Widespread abuse of local “small players” in have been organised by the Malagasy Forestry following: the harvest and transport of illegal wood by Administration, the management of the National “collectors” and exporters (traders) Parks of Masoala and Marojejy, and the Malagasy }} Breakdown of the rule of law in the SAVA }} Capture of state authorities by the Antalaha National Environment and Forest Observatory Region with regard to the logging, transport, traders, and manipulation of the population (Observatoire National de l’Environnement et du storage, and export of rosewood to – in effect – blackmail the state into au- Secteur Forestier, or ONESF). }} Ongoing illegal and uncontrolled harvest of thorizing exports of illegal wood and allowing about 100 to 200 trees of rosewood per day In July 2009, two non-governmental organisa- illicit activity in the forests to continue. centred in three locations in the National tions – Global Witness and the Washington- It is the conclusion of this mission that all based Environmental Investigation Agency, Park of Masoala and the Mananara Biosphere Reserve timber awaiting export or already having been Inc. (EIA) – were contacted by the Malagasy exported since 2006 was cut or collected, }} Confusion regarding the legal framework institution, Madagascar National Parks (MNP), transported and stored in violation of the governing the forest sector and trade and to assist their effort in investigating the illegal regulations in force in the Malagasy forest export of precious wood, created by conflict- harvest of precious wood in the SAVA Region, sector. By giving yet another authorisation, as ing ministerial and inter-ministerial orders and the associated international trafficking of per Decree 38244/2009, to export the illegally and decrees illegal timber. restituted wood the State will lose even more }} Lack of adherence to laws and regulations The investigation team observed intensive of the much-needed revenues it has already governing the forest sector and the harvest, logging of rosewood trees in the northeast of lost through this practice, as well as continue transport, and export of precious wood, on Masoala National Park, and transport of logs to to undermine its own rule of law and enforce- the part of the Ministry of Environment and Antalaha. The intensive transport of rosewood ment efforts. The people and landscape of Forests, or MEF in broad daylight, on sections of road policed SAVA deserve a better development model than by Gendarmerie posts, both to the south and to }} Systemic failure to repatriate the proceeds of illegal resource extraction. Realizing this future the north of Antalaha, demonstrates a serious timber exports, depriving Madagascar of any will require the combined investment of the breakdown in the rule of law – if not the active economic benefit from the trade government of Madagascar, the international collusion of law enforcement authorities with }} A serious lack of monitoring and control donor community and the private sector. illegal timber traffickers. of the harvest, transport and storage of

10. Full report available at http://www.globalwitness.org/ media_library_detail.php/887/en/field_investigation_into_ illegal_logging_in_ madaga or http://eia-global.org/PDF/Report- RogueTraders-July10.pdf

Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 21 Annex 2 The 13 operators officially recognized as dealing in precious wood as listed in Inter-ministerial Order 003/2009

22 Annex 3 Decree 2010-141

Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 23 24 Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 25 Annex 4 Letter of Minister of the Environment and Forests to CITES Secretariat

26 Annex 5 List of Chinese companies named as recipient (destinataire) of shipments (compiled through investigation from various sources) Company Location CECIEC Tianjin International Trading Co., Ltd. Tianjin Chang Sha Wei Chu Seed Industry Ltd. Co. Changsha Changshu Jinbianf Craft Furniture Co., Ltd. Changshu China Artex Corporation Fujian Co., Ltd. Fuzhou China Jilin Forest Industry Group Import & Export Co. Ltd. Dalian China National Forest Product Industry Co. Ltd. Beijing China Tushu Shanghai Pudong Imp. & Exp. Corporation Shanghai Dalian Rising International Trading Company Dalian Dalian SK International Freight Forwarding Co., Ltd. Dalian Dalian Yulin Imp & Exp Co. Ltd. Dalian Dougguan Silver Dragon Commercial Co., Ltd. Dongguan Foshan Everlasting Enterprise Co. Ltd. Foshan-Guandong Foshan Nanhai Guicheng Youway Co., Ltd. Foshan Guangzhou Peijia Imp & Export Trading Co., Ltd. Guangzhou, Cina Herowise Engineering, Ltd. Hong Kong HH International Trade Co., Ltd. Tianjin High Hope International Group Jiang Knit Wear & Home Textiles Imp & Exp Corp Ltd. Nanjing Jiang Su Guotai International Group Zhangjiang City Jiangsu Skyrun International Group Co., Ltd. Zhangjiang City Jilin Haitianxia Rosewood Co., Ltd. Chang Chun Key Win International Trading Ltd. Hong Kong Xiamen High-Water Logistic Co. Ltd. Hong Kong Ocean Trading Co. Shanghai Shanghai Hongsheng Industry & Trade Co. Ltd. Shanghai Shanghai King Yird International Trading Co., Ltd. Shanghai Shanghai Silk Group Co. Ltd. Shanghai Shanghai Tan Tan Trade Co Ltd Shanghai Tianjin Winstar International Trading Co., Ltd. Tianjin Uan Long Creates the World Co. Ltd. Zhang Jiangang City, Jiangsu Prov Woodintl Trade Co. Ltd. Jiangsu Wuxi Guangming Group Im. Ex. Co., Ltd. Wuxi Wuxi Shi Zhou Ye Textiles Co., Ltd. Wuxi Zhejiang Willing Foreign Trading Co., Ltd. Hangzhou Shanghai Senhuan Wood Co., Ltd. Shanghai Jiangsu Xiangtang Group Import & Export Co. Ltd. Tai Cang City Foshanketongtra, Ltd. Foshan China Meheco Traditional Medecines & Health Product Import & Export Co Ltd Beijing China National Forest Product Industry Co Ltd. Beijing Citic International Co Ltd. Beijing Yick Po International Investment Trading Co. Hong Kong

Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 27 Annex 6 Open Letter to Shipping company Delmas

28 Investigation Into The Global Trade In Malagasy Precious Woods: Rosewood, Ebony and Pallisander | October 2010 29 Annex 7 Delmas response to EIA and Global Witness

30 Recommendations From This Report

To the Government of To the Governments of all cious woods are disappearing too quickly to Madagascar: consumer countries: allow for further administrative delay }} Work with Madagascar’s Scientific and }} Act on the recommendations made in Global }} Introduce domestic legislation to prohibit Administrative Authorities to initiate all Witness/EIA’s first report (see pages 18-19). the import, export or possession of illegally necessary steps to subsequently list these In particular, undertake an immediate inven- harvested timber species on Appendix II at the next extraordi- tory of all existing stocks of precious wood in nary meeting in 2011 all parts of Madagascar. Any wood in excess To ministries of foreign affairs, of the last official inventory of December trade and commerce of all OECD 2008 should be destroyed To law enforcement agencies in countries: }} Cease issuing decrees that temporarily permit the OECD: }} Advise Chinese counterparts about the role the export of illegally harvested timber }} Cooperate on legal investigations into the that the Chinese market plays in the trade }} Confirm and clarify Appendix III listing of origin and legality of precious wood stored of illegally sourced Malagasy timber, and of precious wood species with CITES Secretariat at and traded by major importers in OECD potential consequences under the amended and implement listing as a priority in the next member states that export to the United States year. Work with supportive parties to write US Lacey Act and European regulations and submit a proposal to an extraordinary designed to prevent the import of illegally To NGOs, researchers and the session of the CoP in 2011, to amend Ap- harvested timber media: pendix II by listing all precious wood species endemic to Madagascar, including look-alike To ministries and government }} Highlight the precarious state of the remain- species from other countries departments in charge of ing unique Madagascar forests; expose the transport and maritime affairs: commercial and state actors engaged in promoting the trade and its social impacts; To the Government of the }} Inform all registered shipping companies and advocate for the establishment of bans People’s Republic of China: about the illegality of timber of Malagasy on the import or possession of illegally har- origin and warn them that there may be legal }} Apply a temporary moratorium on imports vested timber in other consumer countries of Malagasy timber in order to support the risks in transporting such timber Malagasy export ban through decreasing the pressure from buyer demand To the CITES Secretariat: }} Introduce domestic legislation to prohibit }} Immediately notify Parties of Madagascar’s the import, export or possession of illegally request to list its endemic precious wood harvested timber species on Appendix III; Madagascar’s pre- Washington, DC Washington, DC PO Box 53343 529 14th Street NW Washington, DC 20009 Suite 1085 USA Washington, DC 20045 Tel + 1 202 483 6621 USA Fax + 1 202 986 8626 Tel +1 202 621 6665 Email [email protected] Email [email protected] www.eia-global.org www.globalwitness.org

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