State of Corruption the Top-Level Conspiracy Behind the Global Trade in Myanmar’S Stolen Teak February 2019

State of Corruption The top-level conspiracy behind the global trade in Myanmar’s stolen teak February 2019 ©EIAimage Forests ©EIAimage WeACKNOWLEDGEMENTS would like to thank ABOUT EIA EIA UK 62-63 Upper Street, Ximporae.This report Ut was aut written fugitis restiand editedut atia We investigate and campaign against London N1 0NY UK nobitby the ium Environmental alici bla cone Investigation consequam environmental crime and abuse. T: +44 (0) 20 7354 7960 cusAgency. aci oditaquates This document dolorem has volla Our undercover investigations E: [email protected] vendam,been produced consequo with molor the financial sin net expose transnational wildlife crime, eia-international.org fugitatur,assistance qui of int UKaid, que nihicthe Norwegian tem with a focus on elephants,elephants andpangolins aspedAgency quei for oditaquatesDevelopment dolorem tigers,and tigers, and forestand forest crimes crimes such such as vollaCooperation vendam, (NORAD) conseqci and oditaquates the EIA US JMG Foundation. The contents illegalas illegal logging logging and and deforestation deforestation for dolorem volla vendam, consequo PO Box 53343 of this publication are the sole cashfor cash crops crops like like palm palm oil. oil.We Wework to molor sin net fugitatur, qui int que Washington DC 20009 USA responsibility of EIA. safeguardwork to safeguard global marine global ecosystemsmarine nihic tem asped quei oditaquates T: +1 202 483 6621 byecosystems addressing by the addressing threats posed the dolorem volla vendam, consuo molor E: [email protected] EIA expresses its gratitude to the bythreats plastic posed pollution, by plastic bycatch pollution, sin net fugitatur, qui int que nihic eia-global.org individuals who have contributed andbycatch commercial and commercial exploitation of tem asped que n nes ape verrovid to this report and who for many whales,exploitation dolphins of whales, and porpoises. dolphins maximolorera doles magni tet ea Environmental Investigation Agency reasons must remain anonymous. Finally,and porpoises. we reduce Finally, the impactwe reduce of voluptas enis as de evel ipsam (UK) Ltd. Company Number: 7752350 climatethe impact change of climate by campaigning change by dolendit, voluptam endusci psunto VAT Number: 440569842. Registered tocampaigning eliminate powerful to eliminate refrigerant powerful quibusandit, sitaque enture Environmentalin England and InvestigationWales Agency greenhouserefrigerant greenhouse gases, exposing gases, related UK. Company Number: 7752350 VAT illicitexposing trade related and improving illicit trade energy and Number: 440569842. Registered in efficiencyimproving energyin the cooling efficiency sector. in the England and Wales cooling sector. 2 Environmental Investigation Agency ©EIAimage Above: Forests in Myanmar CONTENTS Front cover: Logs rotting in an MTE logyard in East Dagon, Introduction 4 Yangon, March 2013 Myanmar’s Forests 5 Myanmar’s Forest Governance Failures 8 Case Study: The Shadow President – King of Burma Teak 14 Ongoing Smuggling into China 30 Stemming the Tide 37 Recommendations 42 State of corruption 3 ©EIAimage Above: Teak log being sawn at Kui Jay Corporation, Taiwan, Introduction September 2017 The forests of Myanmar are defined by their As the depletion of the forest continues, monetary value and have been part of the timber traders are pushing deeper into military and economic elites’ profits and, Myanmar to secure supplies, undermining in some cases, survival for decades. The the rule of law with high-level complicity. entire legal state forestry and timber trade Our attention to the international markets sectors have been systematically riddled for teak in both the European Union and with fraud, bribery, corruption and other the United States shows that even with forms of illegality for at least two decades, regulations in place to prevent illegally undermining any governance reform. sourced timber from entering those markets, traders continue to find ways to Current laws seem to seek the get Myanmar teak to multi-millionaire criminalisation of local people and owners of yachts whose manufacturers through all its policies on resource display an almost ideological obsession extraction, including timber, the with Myanmar teak. Government is undermining communities’ reliance on resources while at the same The Government still promotes as legal time introducing a centralised system MTE-authorised trade in timber which of management they are unable to is part of a large stockpile that has been implement, creating even more conflict. held prior to the logging ban, ignoring the decades of corruption and overharvesting From 1989 to the present day, Myanmar’s that produced it. past military regimes and its current Government have presented the teak trade In light of this, and with corruption still regulated by the forestry department and greasing the wheel of the illegal border implemented by the state-run Myanmar trade into China, Myanmar’s people remain Timber Enterprise (MTE) as being wholly reliant on the goodwill of international legal and sustainable, conducted in trade partners in helping enforce forestry compliance with the rule of law. This is and timber trade provisions. simply not the case. Of all the irregularities encountered A two-year undercover investigation by in Myanmar’s formal teak sector, EIA’s the Environmental Investigation Agency findings illustrate how Myanmar teak sold (EIA) into a near-mythic ‘Burmese teak through formal channels is as corrupt and kingpin’ who conspired with and bribed illegal as any blatantly smuggled across the most senior military and Government the border into China. officials in Myanmar has revealed how he was able to establish a secret off-the- Myanmar cannot reform this multi- books system of fraudulent trade in the layered, complex but highly organised cream of the country’s teak logs. This was international timber trade by itself and run in parallel to, and within, the official it is crucial that the past years of gross legal trade administered by MTE. corruption and deceit are acknowledged and addressed. Our investigations also took us to the Myanmar-China border where, other than For a natural resource so beloved and the state of Myanmar itself, China has culturally important to Myanmar and played the biggest role of any nation in the its people as teak, allowing its near- illegal expropriation of Myanmar teak and extinction would be the biggest crime of other hardwoods. all. 4 Environmental Investigation Agency Myanmar’s Forests GLOBALLY SIGNIFICANT UNDER THREAT Diverse and extensive, Myanmar’s forests In recent decades Myanmar has suffered a form part of the ‘Indo-Burma Hotspot’, one deforestation crisis. of the world’s most important biodiversity areas, featuring a huge range of endemic In the 1990s, the country lost 4.3 million flora and fauna.1 More than 200 globally hectares of forest5 and a further two threatened species live in Myanmar’s million hectares between 2002-14.6 The forests, including elephants, tigers, sun country reported 546,000 hectares of forest bears2 and the Myanmar snub-nosed loss between 2010-15, the third highest monkey.3 rate worldwide.7 Combined, since 1990 Myanmar has lost about 20 per cent of its Large forests stretch across the forests,8 reducing forest cover to around northern states of Sagaing, Kachin and 290,000 sq km, or 45 per cent of its land Shan, through the southern region of mass.9 Tanintharyi. These forests range from coastal mangroves near the Bay of Bengal Although the northern states of Sagaing, to subtropical hardwood forests in the Kachin and Shan have hosted Myanmar’s mountain regions bordering China and largest forests, they have also experienced Thailand. the most serious forest loss, with Shan state estimated to have lost more than These forests are an important source 600,000 ha from 2002-14.10 of food and fuel for Myanmar’s people, 70 per cent of whom live in rural areas Deforestation has been accompanied by where forests underpin basic livelihoods.4 widespread forest degradation, with just Forests remain important to the cultural a third of Myanmar’s forests remaining identity of Myanmar’s many ethnic intact. groups, whose ancestral beliefs sustain indigenous systems that have prevailed Timber extraction is considered the for centuries. main driver of forest degradation inside the country’s forest reserve areas. Overharvesting has been “long term and systematic, persisting until forests are exhausted”.25 Nominally legal forestry operations by MTE and its subcontractors – which prioritised revenue generation – have not allowed forests to recover between cycles of harvesting.11 Illegal logging is also a major contributor to forest loss in Myanmar, with EIA investigations in 2014/15 revealing how Myanmar’s military and ethnic armed organisations both profit from the massive illegal timber 12 trade. Left: Snub-nosed monkey 1. International Union for the Conservation of Nature, On the verge of extinction: A look at endangered species in the Indo-Burma Hotspot, 2015. 2. BBC, Viewpoint: Why Burma’s forests must be preserved, 2013. 3. https://www.fauna-flora.org/species/myanmar-snub-nosed-monkey 4. Khin Htun, Myanmar Forestry Outlook Study, UNFAO Working Paper No. APFSOS II/WP/2009/07, 2009. 5. United Nations Office on Drugs and Crime, Criminal justice response to wildlife and forest crime in Myanmar: A Rapid Assessment, 2015. 6. Bhagwat et al, Losing a Jewel – Rapid Declines in Myanmar’s intact forests from 2002-2014, 2017. 7. Food and Agriculture

Load more