Professional Documents
Culture Documents
Consumer Goods and Deforestation:: September 2014
Consumer Goods and Deforestation:: September 2014
September 2014
Cover photo: Global Witness. Forest conversion for oil palm plantations in Sarawak, Malaysia.
September 2014
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 Melndez, 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 impactsimpacts which could ultimately threaten longterm food security.
In recent years, it has become apparent that the most significant threat to the worlds 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
worlds 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 countriesparticularly 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
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 C
ontext: 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.............................................................................. 23
5. DISCUSSION................................................................................................................. 88
5.1 How Should Illegality Be Addressed?............................................................................ 88
5.2 C
hallenges Posed by Illegality for Existing
Strategies to Address Deforestation............................................................................... 89
5.3 Conclusion................................................................................................................. 97
6. RECOMMENDATIONS..................................................................................................... 98
6.1 The Private Sector....................................................................................................... 98
6.2 Producer Countries.................................................................................................... 100
6.3 Consumer Countries.................................................................................................. 102
REFERENCES.................................................................................................................. 104
ANNEX A........................................................................................................................ 119
ANNEX B........................................................................................................................ 127
ANNEX C........................................................................................................................ 134
ANNEX D........................................................................................................................ 140
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TABLE OF CONTENTS
LIST OF BOXES
Box 1
Box 2
Box 3
Box 4
Box 5
Box 6
Box 7
Box 8
Box 9
LIST OF FIGURES
Figure 1 Formula Used to Calculate Area of Tropical Forest Lost due to Illegal
Conversion for Commercial Agriculture during 2000 to 2012............................................... 14
Figure 2 Formula Used to Calculate Area of Tropical Forest Lost due to Illegal
Conversion for Commercial Agriculture during 2000 to 2012 which
Was Embodied in Exports................................................................................................. 14
Figure 3 Formula Used to Calculate Quantities of Specific Forest-Risk
Commodity Exports Likely Linked to Illegal Deforestation..................................................... 15
Figure 4 Estimates of Proportion of Tropical Deforestation due to Agro-Conversion,
Illegal Agro-Conversion and Exported Illegal Agro-conversion
(including Sensitivity Analysis)........................................................................................... 18
Figure 5 Estimates of Proportion of Tropical Deforestation due to Agro-Conversion,
Illegal Agro-Conversion and Exported Illegal Agro-Conversion, Using
Different Deforestation Datasets (All Figures are Mid-Points)................................................ 19
Figure 6 Proportions of Estimated Area of Illegal Agro-Conversion 2000 to 2012
by Continent (Mid-Point, > 51% Canopy Gross Loss)............................................................ 21
Figure 7 Proportion of Global Exports of Different Agro-Commodities
Estimated to Originate from Illegal Conversion of Forests..................................................... 22
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LIST OF TABLES
Table 1 Amount of Tropical Forest Estimated to Have Been Lost
due to Illegal Agro-Conversion and Associated Exports
(Total and Selected Countries)........................................................................................... 20
Table 2 Estimated Value of International Trade in Commodities Linked
to Illegal Tropical Deforestation, 2012................................................................................ 22
Table 3 Estimates of Tropical Conversion Timber Exports for
Largest Exporters, and Global Estimate.............................................................................. 23
Table 4 Illegal Deforestation in Mato Grosso State due to
Commercial Agriculture, Brazil, 1997 to 2009................................................................... 29
Table 5 Deforestation and Commodity AnalysisBrazil................................................................... 35
Table 6 Deforestation and Commodity AnalysisIndonesia.............................................................. 47
Table 7 Estimates of Conversion Timber Production in Sarawak, Malaysia.......................................... 50
Table 8 Summary of Published Case Studies of Illegalities and
Irregularities in Agro-Conversion in Malaysia........................................................................ 52
Table 9 Deforestation and Commodity AnalysisMalaysia................................................................ 54
Table 10 Deforestation and Commodity AnalysisPapua New Guinea................................................. 59
Table 11 Soy Production in and Exports from Argentina and Paraguay, 2012....................................... 60
Table 12 Commodity AnalysisArgentina........................................................................................ 61
Table 13 Deforestation and Commodity AnalysisParaguay............................................................... 62
Table 14 Deforestation AnalysisPeru............................................................................................. 65
viii
TABLE OF CONTENTS
ix
ACRONYMS
ACRONYMS
AMDAL
APP
APRIL
DRC
EIA
ELC
EU
European Union
EUTR
FAO
FCA
FLEGT
FPIC
FSC
GAM
ha
Hectares
HAGL
HCS
HCV
IBAMA
IFC
IPK
IT&S
ITTO
IUP
KPK
m3
Cubic Meters
Mha
Million Hectares
NCR
xi
xii
OI-FLEG
PNG
REDD+
RSPO
SABL
(S)EIA
SGSOC
UN
United Nations
UN-DRIP
US
VPA
WTO
WWF
GLOSSARY
GLOSSARY
Agribusiness: Business expansion in the agriculture and rural sector and its supply chains, mainly carried out on
a large scale by the private sector. It may involve various exogenous agents and agro-industrial chains, or other
partnerships linked together by contracting structures.
Agro-commodities: Commercially produced agricultural commodities, including crops and livestock products.
Agro-conversion: Used in this report to refer to conversion of tropical forests for commercial agriculture and
timber plantations.
Commercial agriculture: This study considers deforestation for commercial agriculture to include both cattleranching and monoculture timber plantations, as well as commercially grown crop plantations. This study also
includes both small- and large-scale commercial agriculture, but excludes subsistence agriculture since this is
non-commercial. For most of the countries examined, the majority of the commercial agriculture displacing
forests are medium- to large-scale and industrial. In addition, in a number of countries the products of smallscale commercial agriculture is nevertheless processed, traded, or exported by large corporations.
Community forestry: Forest operations where the local community plays a significant role in forest management
and land use decision-making. Communities may, depending on national legislation, possess a bundle of rights
(usually management, use, or full ownership) to land under community forestry.
Concession: A grant of land or property by a government or some other controlling authority to another legal
entity (usually a large company) in return for payment, services, or for a particular use, a right to undertake and
profit from a specified activity, or a lease for a particular purpose. Sometimes concessions are allocated based
upon a permitting and/or a competitive process such as auctions.
Conversion timber/wood: Timber generated during the conversion of natural forest areas to non-forest or
plantation use, such as the clearance of a forest for commercial agriculture.
Corruption: The abuse of entrusted power for private gain.
Degraded land/forest: Land that has experienced long-term loss of ecosystem productivity, caused by
disturbances from which it will have difficulty recovering.
Environmental Impact Assessment: Formal process used to predict the environmental consequences of a
plan, policy, program, or project, and develop a time-bound plan with specific objectives to mitigate these
consequences.
Fraud: The act of intentionally deceiving someone in order to gain an unfair or illegal advantage (financial,
political, or otherwise). Countries usually consider such offenses to be criminal or a violation of civil law.
Illegal: This report considers forest conversion to be illegal when it takes place in contravention of the written
laws, policies, and regulations in the concerned country. This does not include breaches of international law or
customary law unless those are reflected in national statutory or case law. In attempting to quantify illegality,
this report considers deforestation and associated commodities as being associated with the illegality regardless
of whether illegalities concerned have been identified or prosecuted by the relevant government authorities or
have since been formally forgiven. This definition encompasses two general categories: illegalities in licensing
and illegalities in forest clearance.
xiii
Land grabs: Large-scale land acquisitions that are one or more of the following: in violation of human rights,
particularly the equal rights of women; not based on Free, Prior and Informed Consent (FPIC) of the affected land
users; not based on a thorough assessment, or in disregard of, social, economic, and environmental impacts;
not based on transparent contracts that specify clear and binding commitments about activities, employment,
and benefit sharing, and; not based on effective democratic planning, independent oversight, and meaningful
participation (as defined by Taylor 2012).
Legal reserve: Brazils requirement of property owners to keep a certain percentage of their land in forest cover
or its native vegetation, historically in the Amazon 80 percent and in the cerrado 35 percent.
Plantation timber/wood: Timber that is established by planting and/or artificially seeding, as opposed to that
originating from natural/primary forests. For the purposes of this report, this refers to timber/wood harvested
for commercial purposes.
Timber products: All solid wood products, including processed products such as furniture; this definition
excludes pulp and paper. Often referred to as primary tropical timber products, or originating from natural
(non-plantation) forests in the tropics.
Tropical deforestation: The conversion of forests to other land uses that results in the loss of tree cover to
below 51 percent. This includes the loss of natural forests from countries either entirely within the tropics or
in which the majority of its deforestation takes place in the tropics, often to produce agricultural commodities.
Tropical timber: Unless specifically noted, all references to tropical timber in this report refer only to timber
of tropical wood species harvested from natural forests. Tropical wood species grown on plantations are not
included.
Voluntary partnership agreement (VPA): A legally binding trade agreement between the European Union (EU)
and a timber-producing country outside the EU, which is entered into voluntarily. The purpose of a VPA is to
ensure that timber and timber products exported to the EU come from legal sources. These agreements also
help timber-exporting countries stop illegal logging by improving regulation and governance of the forest sector.
xiv
EXECUTIVE SUMMARY
Background
Tropical forests continue to disappear at an alarming rate despite growing international recognition of their
crucial role in mitigating climate change. Their loss generates nearly 50 percent more greenhouse gases than
the global transportation sector (IPCC 2014). Yet the rate of forest loss is accelerating (Hansen et al. 2013). In
this report we examine one central question: what is driving this loss?
Recent studies suggest that at least half of global deforestation in the last decade has been for commercial
agriculture to meet the rapidly surging global demand for food, fuel, and fiber. This is likely an underestimate,
given the increasing area of forestlands being converted for agricultural commoditiesmainly beef, soy, and
palm oilas well as tropical timber, pulp and paper, and plantation wood. The growth of commercial agriculture
is cited as an important driver of deforestation by nearly every tropical country in official national strategies to
reduce emissions from deforestation and forest degradation (REDD+).
Much of this conversion is taking place in the context of complex, contradictory, and poorly implemented
regulations governing forested areas. This confusing regulatory environment makes legal deforestation difficult
for both large and small forest enterprises to achieve, while enterprises that blatantly break the law often do so
with impunity and may even be rewarded after the fact with acts of amnesty or retroactive changes in the law.
This report presents the first-ever assessment of the extent of illegal deforestation and forest conversion for the
production of commercial, export-driven agriculture. This study is significant in adding new data to the global
dialogue on tropical deforestation and trade in forest-risk commodities because it:
introduces the concept of illegal forest conversion and the subsequent illegality of associated
commodities produced on this converted land;
uses best available data to quantify illegally sourced commodities in global trade, and concludes that
a significant portion of global trade in relevant commodities is sourced from illegal forest conversion;
describes what is illegal and introduces concerns not reflected in current international initiatives
designed to reduce deforestation or to make commodity supply chains sustainable;
argues that unless effective forest governance (including legality as a key indicator of governance) is
established, broader efforts by governments, companies, and donors to tackle tropical deforestation
and associated trade will continue to face tremendous challenges. Current initiatives need to better
understand and capture the legal requirements linked to forest conversion and resulting commodities
if they are to be effective in reducing tropical deforestation.
1
Key Findings
While existing studies estimated that at least half of global deforestation in the past decade was for commercial
agriculture, the proportion for tropical deforestation is higher. This report finds that nearly three-quarters
(71 percent)1 of all tropical deforestation between 2000 and 2012 was caused by commercial agriculture. In
addition, almost half (49 percent) of total tropical deforestation between 2000 and 2012 was due to illegal
conversion for commercial agriculture. Nearly one-quarter (24 percent) was the direct result of illegal agroconversion for export markets. Nearly half (49 percent) of all agricultural commodity products produced on
illegally deforested lands were destined for export markets. Nearly three-quarters (70 percent) of all soy in
international trade, one-third (32 percent) of the beef, and all of the palm oil, originate in tropical forested
countries. Consumer demand in overseas markets resulted in the illegal clearance of more than 200,000 square
kilometers of tropical forest during the first 12 years of the new millennium: an average of five football fields
every minute. In addition:
In terms of climate change, the emissions caused by illegal conversion of tropical forest for large-scale
commercial agriculture during 2000-2012 was an average of 1.47 gigatonnes of CO2 per yearthe
equivalent of one-quarter of the annual fossil fuel-based emissions of the EU (Global Carbon Project
2012). Of this, 0.72 gigatonnes was associated with commodity exports. If the international trade in
agro-commodities from illegal deforestation were a country, it would be the sixth largest contributor
to climate change in the world.
In terms of trade, the value of agro-commodities (beef, leather, soy, palm oil, tropical timber, pulp
and paper, and plantation wood products) produced on land illegally converted from tropical forests
is estimated at $61 billion per year. The EU, China, India, Russia, and the US are among the largest
buyers of these commodities, and their consumer demand could also be leveraged as a force for
positive change given the right mix of policy, trade, and investment incentives.
Brazil and Indonesia together account for 75 percent of the global area of tropical forest estimated to
have been illegally converted for commercial agriculture during 2000-2012. In Brazil, where cattle and
soy have been the main drivers, at least 90 percent of Amazon deforestation for agriculture is illegal.
In Indonesia, at least 80 percent of deforestation for commercial agriculture and timber plantations is
illegal. While domestic consumption is growing as both economies expand, a considerable percentage
of agricultural commodities is bound for export markets. Brazil exports most of its leather and soy and
almost a fifth of its beef. Indonesia exports around 75 percent of both its palm oil and plantation timber
(mostly as pulp and paper).
Regional differences can be noted, but widespread and high-level corruption with the issuance of
licenses for converting forests for commercial agriculture is common across the countries studied.
Illegalities in operations are also widespread. These include the failure to maintain mandated areas of
forest reserves, the illegal use of fire to clear forests, the clearance of forest outside legal concession
boundaries, lack of consultation based upon the principle of Free, Prior and Informed Consent (FPIC),
unfair compensation to Indigenous Peoples and other local communities in concession areas, and
disregard of regulations meant to minimize negative impacts of conversion on local people and the
environment. In Southeast Asia, many licenses for millions of hectares of forests slated for conversion
The figures cited in this Executive Summary are the mid-point results of sensitivity analyses conducted on data obtained for this
report, given the varying levels of uncertainty of the data available for the variables surveyed. See Section 2.2.3 for a detailed
description of the sensitivity analyses and Chapter 3 for the full results, including the ranges produced from the sensitivity
analyses.
EXECUTIVE SUMMARY
in the Mekong Basin and Papua New Guinea (PNG) were illegally issued. In PNG, a Parliamentary
Inquiry found that 90 percent of the agro-conversion licenses issued in recent years were obtained by
corrupt or fraudulent means. In Malaysia, recent court judgments suggest that many palm oil licenses
may have been issued illegally in contravention of indigenous land rights. Similar concerns have been
raised about rubber plantations in Cambodia.
Even in tropical forest countries where export-driven commercial agriculture has not been a major
driver of deforestation, the situation is rapidly changing, and the same illegalities seen elsewhere
are being repeated. For example, government inspections have found two out of the three largest and
newest oil palm plantations under development in the Congo Basin to be operating illegally. Coupled
with projections of massive increases in global commodity demand, this analysis suggests that the
importance of export-driven commercial agro-conversion is likely to increase even further in the very
near future. While countries like Brazil and Indonesia have been battling illegal agro-conversion for
many years, the problem is expanding to new countries and regions of the world. Many of these
countries lack robust governance capacity or the legal and regulatory frameworks necessary to ensure
conversion is carried out legally so that the remaining forests are protected. In almost all of these new
cases, the majority of commodity production is bound for export markets.
In summary, the evidence presented in this report indicates that the phenomenon of illegal forest clearing for
commercial agriculture and associated exports has continued at an alarming rate since at least the start of the
21st century. Indeed, this problem is worse than previously thoughtand is likely occurring to a greater extent
than the conservative estimates in this analysis show. While rising global incomes and demand for agricultural
products will continue, we are currently responding with a flawed development model. It is increasingly clear
that much of the forest land conversion for large-scale agricultural projects is in violation of some of the
producer countries most basic laws and regulations and incurring high social and environmental costs.
These illegalities will become more pronounced as producer countries encourage agricultural investments as a
way to catalyze growth. Deforestation will increase in regions such as the Congo Basin where little commercial
agriculture previously existed, unless we ensure that forestland converted for production is acquired legally
and sustainably. Faced with the scale, breadth, and diversity of these illegalities, and the weak governance
underlying them, it would be easy to despair of ever tackling these issues and to focus on other actions to
address deforestation. This would be a mistake, as it is unlikely that those other actions will work in isolation
and because these illegalities are not insurmountable.
Recommendations
The private sector
Companies producing or trading relevant commodities should:
comply with all national laws when developing new commercial agricultural and timber plantation
projects in forested countries and when purchasing products;
refrain from engaging in such projects in countries where it is not possible to ensure legality;
purchase and trade only commodities that are legally produced and traceable back to their source;
verify that relevant policies such as zero deforestation commitments are properly implemented via
independent third-party monitoring and by publishing relevant information;
improve existing certification schemes to ensure that these more effectively preclude commodities
from illegal conversion;
conduct comprehensive assessments of past illegalities by existing concessions (i.e., that examine the
processes by which licenses were issued and that use archived satellite imagery to examine whether
clearance began in advance of permitting);
promote and support actions by producer country governments to tackle the problem (see
recommendations for producer countries), including the resolution of legal uncertainties, conflicting
regulations, and unclear tenure;
promote actions by consumer-country governments to tackle the problem, including through demandside regulation; and
adopt policies that extend beyond national laws, such as avoiding embedded deforestation entirely
and requiring the Free, Prior and Informed Consent (FPIC) of Indigenous Peoples and other local
communities (as per established international standards).
Banks, investors, and financial service providers should:
ensure that financing is only provided to relevant companies, shipments, and projects where legality
can be demonstrated.
Certification bodies and associated roundtables should:
develop or strengthen standards and assessment, monitoring, and compliance mechanisms to ensure
that they can meaningfully guarantee that no certified products are associated with any of the types of
illegalities described in this report;
strengthen monitoring and enforcement of standards, including through independent monitoring,
transparency of information, and appropriate procedures for handling third-party complaints. These
mechanisms should have the capacity to conduct a clear assessment of members compliance with
national laws; and
lobby for regulatory action by consumer country governments to ensure that only legally produced
products can be imported or sold, thereby creating a level playing field on which companies can
compete on broader issues of sustainability.
EXECUTIVE SUMMARY
require pension funds, sovereign wealth funds, and other nationally-governed financial instruments to
carry out necessary due diligence and refuse to do business with companies found to have a high risk
of being associated with illegal forest clearance;
provide technical and financial support to civil society groups tackling these issues; and
support further research to better understand the nature and extent of relevant illegalities.
Create new demand-side measures to curb illegal agro-conversion:
ensure that existing demand-side measures on timber (including procurement policies, regulations
governing all imports, and bilateral agreements such as VPAs) are revised to ensure that they encompass
conversion timber to the maximum possible extent;
in countries where no such timber-related demand-side measures exist, enact these as a matter of
urgency; and
ensure that these demand-side measures are fully implemented and enforced, with an appropriate
proportion of attention and resources being paid to cases related to conversion and sufficiently
dissuasive penalties. Implement policies requiring that all government purchases of relevant
commodities are proven to have been legally and sustainably sourced and ensure that new or existing
procurement policies include standards that are high enough to ensure that products associated with
the kinds of illegalities documented in this report are excluded;
consider passing legislation making it an offense to import or sell agricultural commodities produced
on land illegally cleared of forests and/or requiring that importers carry out due diligence in order to
minimize the risk of purchasing such products;
establish bilateral trade agreements with important supplier countries, following the model of the EUs
Voluntary Partnership Agreements; and
ensure that penalties are sufficiently high and monitoring and enforcement sufficiently robust to
guarantee compliance with these regulations.
1. BACKGROUND
Only laws and regulations related to licensing and forest clearance were consideredinfractions with the potential for significant
negative impact. Infractions of less significant laws and regulations (such as the oft-cited truck driver with expired drivers
license) were not considered. See Glossary for complete definition.
all have mutual interests in clarifying and streamlining laws and regulations as a fundamental first step in
addressing poor land use governance. Increased clarity and consistency in the application of the law is not only
fundamental to the creation of a conducive business climate necessary to attract more responsible investment,
but also for the efficient and fair identification and prosecution of those who violate the law. Small- and mediumsized enterprises often stand the most to benefit from overall improvements in their business environment
due to governance reforms (World Bank 2005). In many developing countries, it is the small enterprises that
are disproportionally affected by irregular transaction fees at every stage of operating their business, often
representing a significant portion of their sales. A process that instigates governance reform has the potential
to address regulatory complexities that so often create opportunities for corruption.
This has been the approach used in the EU Forest Law, Enforcement, Governance and Trade (FLEGT) process
of developing bilateral Voluntary Partnership Agreements (VPAs) with producer countries to define legality in
the timber sector. In Indonesia, for example, the VPA development brought together multiple stakeholders
to clarify relevant laws for inclusion in the countrys timber legality verification systems and recommend the
elimination of many regulations that no longer served important functions and caused significant regulatory
barriers for both industry and enforcement agencies.
Why focus on international trade in commodities? A focus on the international trade in commodities associated
with illegal deforestation is important for similar reasons: its scale and potential for impact. Demand-side
actions by consumer country governments on timber and wood products taken during the last 10-15 years, for
instance, have helped to reduce illegal logging in producer countries (see Chapter 6). And again, illegality hinders
broader efforts, undermining voluntary efforts by international companies to source sustainable commodities.
Likewise, undiscerning overseas demand that disregards the legality of sourcing holds back efforts by producer
countries to make the production of these commodities both legal and sustainable. The responsibility for
tropical deforestation does not lie with tropical forest countries alone.
It took the international community more than 20 years to learn the importance of addressing legality and good
governance in relation to the impact of the production and trade in tropical timber on forests and the people
dependent upon them. The fundamental lesson was that a focus on broader sustainability and an onus on
voluntary action by international consumers would not be effective unless legality and governance was addressed
first. There are many parallels between the timber and agriculture industries, and it is essential that efforts to
tackle deforestation caused by commercial agriculture and associated trade integrate these lessons more quickly.
1. BACKGROUND
Before going on to examine the issue of legality, this chapter examines these three broad trends from a global
perspective. Additional country-specific information is included in Chapter 4.
in demand (Olam 2010)as much oil palm as has been planted so far in Malaysia.5 Exports of beef from Latin
America are expected to increase by 30 percent between 2013 and 20226 while Chinese imports of soybeans
are expected to double between 2010 and 2020 (Thiesse 2013). The FAO projects that a further 7 Mha of land
in Latin America will be turned into soy plantations by 2022.7
10
2. METHODOLOGY
4. Finally, the analysis only considers illegalities in forest conversion that took place in the last 20-30 years and
where commercial agriculture or timber plantations were the direct or indirect cause of that conversion.
BOX 1
Typology of Illegalities in Conversion of Forests for Agriculture and Timber Plantations
License Issuance
Corruption
Proper procedures for issuance/auction of license ignored in exchange for bribes and/or other favors
Licenses issued for below true value to family or in exchange for bribes and/or other favors
Clearance
12
2. METHODOLOGY
2.2.2 Methodology
Illegal Agro-Conversion
To estimate the area of tropical forest lost due to illegal commercial agriculture (including timber plantations) in
a given country, this study first multiplied the total area of measured forest loss by an estimate of the proportion
of that deforestation during the reference period (2000 to 2012) that was due to commercial agriculture. The
resulting figure was then multiplied by an estimate of the proportion of deforestation for commercial agriculture
that was illegal in some way (see Figure 1); an explanation and justification for how the rate of illegality was
calculated for each country is provided in Chapter 4. Such estimates have been produced for the 17 countries
that comprised 77 percent of tropical forest loss from 2000 to 2012. A global estimate was generated based
on the sum of these 17 countries, plus an estimate for the remaining rest of the world, which was composed
of a conservative average for the countries in Asia, Africa, and Latin America. Estimates of illegality are based
on the evidence presented in Chapters 3 and 4; the individual country and global data are presented in Annex B.
The principal deforestation dataset used was the data for gross loss of forest of greater than 51 percent
canopy cover as measured by the University of Maryland through high-resolution satellite mapping
(Hansen et al. 2013). (All the analyses in this report were also run using FAO data for net loss from 2000
to 2010, but the results did not differ substantially (see Chapter 3). Further discussion of the different
deforestation datasets is included in Annex A.)
13
FIGURE 1
Formula Used to Calculate Area of Tropical Forest Lost due to
Illegal Conversion for Commercial Agriculture 2000-2012
% of gross forest
loss 2000-2012
due to commercial
agriculture (B)
% of commercial
deforestation that
was likely illegal (C)
Area of forest
loss due to illegal
commercial
agriculture (Mha)
FIGURE 2
Formula Used to Calculate Area of Tropical Forest Lost due to Illegal Conversion
for Commercial Agriculture 2000-2012 which Was Embodied in Exports
Gross forest
loss 20002012 (Mha)
(A)
% due to
commercial
agriculture
(B)
% of
commercial
deforestation
that was likely
illegal (C)
% of products
from illegal
deforestation
exported (D)
Area of
forest loss
due to illegal
commercial
agriculture
embodied
in exports
(Mha)
14
2. METHODOLOGY
This analysis was carried out for soy, beef, leather, palm oil, tropical timber, pulp and paper, and plantationgrown solid wood products. For all commodities except pulp and paper and plantation-grown solid wood
products, the analysis extended to all global exports. For pulp and paper, separate estimates were produced
for those products made from wood originating through conversion, as well as those made from plantationgrown timber that displaced tropical forest; to produce these, estimates of the proportion of pulp and paper
production coming from each source were produced for the two relevant countries (Indonesia and Malaysia).
These figures for the value of relevant trade are based on primary commodities at the point of export. No
attempt has been made to calculate the value of these commodities after processing at their point of sale, but
it can be expected that such a figure would be many multiples higher.
FIGURE 3
Formula Used to Calculate Quantities of Specific Forest-Risk
Commodity Exports Likely Linked to Illegal Deforestation
Total weight,
volume, or value
of exports (E)
% of production
coming from land
for which forest was
displaced for that
purpose (F)
% of deforestation
for production of
that commodity
that was illegal (G)
Weight, volume,
or value of exports
linked to illegal
deforestation
15
16
3. SUMMARY RESULTS
The results of this analysis suggest that between 29 and 42 percent of overall total tropical deforestation from
2000 to 2012 was due to commercial agriculture and timber products for export8 (see Annex A for full data).
These figures are not directly comparable with those of Cuypers et al. (2013) (since the latter was measuring all
agriculture-related deforestation, rather than only commercial agriculture), but nevertheless appear to show
that exports are more important than suggested. The difference stems from variations in the methodology
used, especially in relation to how deforestation was attributed to agriculture (see Section 1.2).
Figures obtained by dividing the total in Column labelled area of agro-deforestation exported with the total in Column labelled
A (total deforestation) in the low-end and high-end tables (using Hansen 2013 > 51% canopy cover forest loss data) in Annex B.
17
FIGURE 4
75%
71%
Commercial
Agriculture
63%
65%
Illegal
Agro-conversion
49%
36%
36%
Illegal
Agro-conversion
for Export
24%
17%
High
Medium
%
80
%
70
%
60
%
50
%
40
%
30
%
20
10
0
0%
Estimates of Proportion of Tropical Deforestation due to Agro-Conversion, Illegal AgroConversion and Exported Illegal Agro-conversion (including Sensitivity Analysis)
Low
The additional sensitivity analysis using alternative global deforestation datasets shows that the choice of
dataset makes relatively little difference to the overall results (see Figure 5). The lowest figures are produced
when the FAO dataset is used, but these still suggest illegal agro-conversion makes up 39 percent of tropical
deforestation, while associated exports are 17 percent. (Full data-tables for calculations with these alternative
deforestation datasets are available from the author separately as supporting information.)
18
3. SUMMARY RESULTS
FIGURE 5
Estimates of Proportion of Tropical Deforestation due to Agro-Conversion, Illegal AgroConversion and Exported Illegal Agro-Conversion, Using Different Deforestation
Datasets (All Figures are Mid-Points)
71%
49%
24%
68%
46%
22%
60%
39%
17%
%
80
%
70
%
60
%
50
%
40
%
30
%
20
%
10
0%
0
% of tropical deforestation due to commercial agriculture
% of deforestation due to illegal agro-conversion
% of deforestation due to illegal agro-conversion
The analysis suggests that almost 21 Mha of tropical forest were illegally cleared in the first 12 years of the
millennium in order to supply agro-commodities for exportor an average of over 17,000 square kilometers
per year: around five football fields every minute.
Based on consensus figures for the carbon dioxide emissions from tropical deforestation (Harris et al. 2012),9
the emissions caused by illegal conversion of tropical forest for large-scale commercial agriculture during 2000
to 2012 was an average of 1.47 gigatonnes of CO2 per year10the equivalent of one-quarter of the annual fossil
fuel-based emissions of the EU (Global Carbon Project 2012). Of this, 0.72 gigatonnes was associated with
commodities that are exported.11 If the international trade in agro-commodities from illegal deforestation were
a country, it would be the sixth largest contributor to climate change in the world.12
There is consensus that average annual CO2 emissions from tropical deforestation from 2000 to 2005 were 3.0 1.1 Gt CO2 per
year (Harris et al. 2012.).
10
The consensus figure cited above (3.0 Gt) multiplied by 49 percent (the estimate of the proportion of tropical deforestation due
to illegal commercial agro-conversion using gross forest loss canopy > 51%).
11
The consensus figure cited above (3.0 Gt) multiplied by 24 percent (mid-point estimate of the proportion of tropical deforestation
due to exports of commodities resulting from illegal commercial agro-conversion using gross forest loss canopy > 51%).
12
Comparison with estimates of fossil fuel and cement emissions by all countries in 2012 (Global Carbon Project 2012). The five
countries with emissions greater than 0.72 Gt are China, the US, India, Russia, and Japan.
9
19
Two-thirds of the illegal agro-conversion estimated to have occurred during the first 12 years of this century
took place in Latin America, and most of the rest in Asia (based on mid-point estimates; see Figure 6). Between
them, just two countriesBrazil and Indonesiaare responsible for between 61 and 92 percent of the estimated
illegal agro-conversion and between 48 and 91 percent of associated exports. Very little forest is estimated to
have been lost in recent years to illegal conversion for commercial agriculture in Africa, but as Section 4.10
makes clear this is set to change in the near future for the Congo Basin.
TABLE 1
Amount of Tropical Forest Estimated to Have Been Lost due to Illegal Agro-Conversion and
Associated Exports (Total and Selected Countries)
Country
Proportion of total
gross forest loss
(> 51% canopy cover)
in the tropics
2000 to 2012
% of deforestation
due to illegal agroconversion
LOW
points
MED
points
HIGH
points
LOW
points
MED
points
HIGH
points
Estimated area of
forest converted
illegally for exported
agro-production,
2000 to 2012 (Mha)
(mid-point only)
Brazil
35%
61%
71%
81%
18%
21%
24%
6.5
Indonesia
18%
64%
64%
64%
48%
48%
48%
7.4
Malaysia
5%
0%
38%
75%
0%
32%
65%
1.5
Paraguay
3%
0%
33%
67%
0%
27%
53%
0.7
Bolivia
3%
68%
68%
68%
38%
44%
51%
1.2
Colombia
3%
0%
32%
63%
0%
6%
13%
0.2
Cambodia
1%
36%
54%
69%
0%
39%
72%
0.4
RoW
32%
TOTAL
2.7
SEE APPENDIX
36%
49%
65%
% of total tropical
forest loss
Total gross forest loss figures for 2000-2012 sourced from Hansen et al. 2013.
20
% of deforestation
due to illegal agroconversion for export
17%
24%
36%
20.6%
24%
3. SUMMARY RESULTS
FIGURE 6
Proportions of Estimated Area of Illegal Agro-Conversion 2000 to 2012 by Continent
(Mid-Point, > 51% Canopy Gross Loss)
32%
Asia
Africa
65%
Latin America
3%
21
TABLE 2
Estimated Value of International Trade in Commodities Linked to Illegal Tropical Deforestation, 2012
Country
Proportion of total gross forest loss (> 51% canopy cover) in the tropics
2000 to 2012
Soy
Palm oil
TOTAL
The analysis also provides estimates of the proportion of total trade in soy, beef, leather, palm oil, and tropical
timber exports that originate from illegal forest conversion. Based on the mid-point analysis, one-fifth of the
soy, two-fifths of the palm oil, and nearly one-third of the tropical timber traded internationally are likely linked
to illegal tropical deforestation, as is around 14 percent of the beef and 7 percent of the leather. Even under the
most optimistic assumptions used in the sensitivity analysis, the results are still dramatic (see Figure 7).
FIGURE 7
Proportion of Global Exports of Different Agro-Commodities Estimated to
Originate from Illegal Conversion of Forests
60
52%
49%
50
39%
40
27%
30
20
20%
19%
16%
14%
11%
11%
31%
27%
10
5%
7% 9%
Tro
Tim pica
be l
r
Oi
l
lm
Pa
r
he
Le
at
ef
Be
y
So
22
Mid
High
Low
3. SUMMARY RESULTS
TABLE 3
Estimates of Tropical Conversion Timber Exports for Largest Exporters and Global Estimate
Country
Total RWE*
primary tropical
product exports
2012, million m3
% of exports
from forest
conversion
(main estimate)
Implied
conversion
exports RWE
2012, million m3
% of exports from
forest conversion
(low-end sensitivity
analysis)
Implied
conversion
exports RWE
2012, million m3
Malaysia
15.6
65%
10.1
65%
10.1
Indonesia
10.4
75%
7.8
75%
7.8
3.2
30%
1.0
30%
1.0
Burma
2.6
50%
1.3
0%
0.0
Solomon Islands
2.1
15%
0.3
0%
0.0
Cameroon
1.8
5%
0.1
0%
0.0
Laos
1.6
55%
0.9
0%
0.0
Brazil
0.5
20%
0.1
0%
0.0
Gabon
1.1
10%
0.1
0%
0.0
Congo
0.9
2%
0.0
0%
0.0
Ivory Coast
0.7
4%
0.0
0%
0.0
Ghana
0.5
1%
0.0
0%
0.0
Others
3.4
14%
0.5
0%
0.0
TOTAL
44.4
% Conversion
22.2
18.9
50%
43%
23
This chapter summarizes evidence relating to the illegal conversion of tropical forests for commercial
agriculture and timber plantations, and associated exports. The evidence contained in this chapter was used
in the construction of the national and global estimates outlined in the previous chapter, and in the summary
discussion regarding the nature of illegalities in Section 2.1.
The evidence is divided into sub-chapters for each of the most important individual countries and regions. For each
country or region, the first or second sub-chapter provides detail on the importance of commercial agriculture as a
driver of deforestation and the importance of export markets for the production of relevant commodities. Where
such information is available, this sub-chapter also includes information on the production and export of tropical
conversion timber. The final sub-chapter summarizes available evidence and information on the nature and scale
of illegalities in conversion of forests for commercial agriculture and timber plantations. Percentages applied in
the analysis in Chapter 3, along with justifications, are provided for those countries profiled.
This chapter contains information relating to illegalities in the conversion of tropical forests for commercial
agriculture in 10 of the top 15, and 20 of the top 40 countries in the world for tropical deforestation during
2000 to 2012. These 20 countries (chosen based on the availability of relevant evidence) were responsible for
77 percent of total tropical deforestation during that period.13 The most extensive evidence of illegalities relates
to Brazil and Indonesia, which between them are responsible for half of all tropical deforestation. The chapter
also includes evidence of relevant illegalities relating to suppliers of 68 percent of total global soy exports, 90
percent of palm oil exports, 23 percent of beef exports, and 85 percent of tropical timber exports.
When considering the evidence of illegalities presented in this chapter, it is important to bear in mind the
provisos outlined in Section 2.1 above.
4.1 Brazil
4.1.1 Background
Forest loss in Brazil was responsible for a quarter of all the forests lost worldwide between 1990 and 2010 (FAO
2010),14 and a third of all tropical forests lost between 2000 and 2012 (Hansen et al. 2013). Historically, this
deforestation occurred along the Arc of Deforestation in Brazils Amazon frontier across the three states of
Par, Mato Grosso, and Rondnia (INPE 2002). Here, infrastructure development spurred the construction of new
roads, opening up frontier forests to unplanned land conversion and increased human migration and settlement.
Calculated from data in Hansen et al. 2013, using data for gross forest loss in canopy cover > 51%.
Calculated from forest area data for 1990 and 2010 in FAO 2010.
13
14
24
Since 2004, Brazil has achieved a dramatic reduction in the deforestation rate, which had declined by 70
percent by 2013 compared with the 1996 to 2005 average (Nepstad et al. 2014). Most of this decline has been
attributed to government actions, including the creation of large new areas of protected areas and indigenous
reserves, and a range of innovative policy measures designed to address illegal deforestation (Arima et al. 2014;
Nepstad et al. 2014). Voluntary moratoria on deforestation by soy and beef producersprompted by NGO
campaigns, international markets, national slaughterhouses, supermarkets, and public prosecutorshave also
played a part (see Sections 4.1.2 and 4.1.3 regarding soy and beef). However, despite this decrease, the areas
lost each year still represent a large proportion of the global figure, and in recent years the rate of progress has
slowed and possibly reversed. In the cerrado (now the principal location of Brazils forest loss), deforestation
has been climbing steadily since 2009, while deforestation in the Amazon also rose again in 2013 (Soares-Filho
et al. 2014)although well below the historic highs experienced between 1996 and 2008.15
15
25
BOX 2
Summaries of Studies Estimating Forest Loss due to Cattle and Agricultural Production
1. Based on a review of available evidence, Grieg-Gran et al. (2007) estimate that 17.1 of the 22.4
Mha of forest lost (76 percent) in the Brazilian Amazon were lost for cattle pasture between
1995 and 2005. A further 3.9 Mha (17 percent) were initially converted for soy production. In the
Brazilian cerrado, at least 3.9 Mha had been lost for cattle farming and a further 3.3 Mha to soy
production. In total, the authors estimate that 98 percent of deforestation in Brazil has been driven
by ranching and soy plantations (Grieg-Gran et al. 2007; Figure 10, p99).
2. Morton et al. (2006) used field surveys and satellite imagery to assess the fate of large (> 25ha)
plots of deforested land in Mato Grosso state (the most important in Brazil for deforestation) during
2001-2004, and found that in 2002, 78 percent of the deforested area was converted to cattle
pasture and 13 percent to cropland (a combined total of 91 percent), while in 2003 the figures were
66 percent and 23 percent (a combined total of 89 percent).
3. The National Institute for Space Research (INPE) (2011), using satellite imagery, found that of the
cumulative area deforested in the Brazilian Legal Amazon to 2007, 63 percent was being used
as cattle pasture in 2008 and 5 percent for crops. A further 10 percent was classified as mosaic of
occupation or no data and could also have been pasture or crops, while most of the remainder
(21 percent) was classed as secondary vegetation and may have originally been cleared for
pasture or crops (INPE 2011a).16
4. Karstensen et al. (2013) state that the share of land use in the year of deforestation in most
Brazilian states is 34.7 percent for cropland and 65.3 percent for pastures (i.e., that 100 percent of
initial deforestation is for agriculture), but that in subsequent years much of the cropland reverts to
secondary forest.
While soy and beef are by far the most important commercial agricultural products driving deforestation in
Brazil, Brazil is also the worlds largest producer of sugarcane and has the third largest area of monoculture
timber plantations in the world, with 6.5 Mha planted by 2012 (Indufor 2012). While most of these plantations
were established on non-forested land, some directly replaced forest, while others may follow cattle production
that initially led to the forest clearance (de S et al. 2013; Lang 2008). Most timber plantations for pulp occur in
the southwest region of Brazil and there are very few in the Amazon region.16
Unlike many other tropical countries, the majority of the commodities associated with deforestation in Brazil are
consumed locally. Exports are still important, however. Karstensen et al. (2013) found that 15 percent of carbon
emissions associated with beef deforestation and 50 percent associated with soy deforestation resulted from
products that were exported. In total, the study found that around 30 percent of total carbon emissions from
deforestation in the Brazilian Amazon in the decade to 2010 were related to exports. The authors concluded
that in recent years, there is a positive correlation between high deforestation emissions and high proportions
of production exported; giving additional support to the hypothesis that deforestation is increasingly connected
to international trade. The authors note that because global drivers contribute to Brazils deforestation, they
should also be seen as part of the solution, and suggest that unless global agro-commodity demand is tackled
P
ercentages calculated to exclude the area of deforestation in 2008 which was not classified. The pasture figure is calculated
from the total area recorded as clean pasture, regenerating pasture, pasture with bare shrubs, and pasture with bare soil.
16
26
through regulation at various points in the supply chain, it is likely that deforestation rates in Brazil will begin to
climb, as was indeed the case in 2013.
As recently as the 1990s, Brazil was a net importer of beef (MercoPress 2013). By 2004, it had become the
worlds largest exporter.17 A few years ago, Brazil was exporting more than a quarter of its beef production,
but exports have declined steadily since 2007 as a proportion of production (Bonsall 2012), and in 2012, only
17 percent was exported.18 In contrast to beef, however, most of Brazils bovine leather is exported.19 Major
markets include the EU and China.20 In the past, the EU was the largest importer of Brazilian beef, but this
changed in the mid-2000s and by 2013, Russia, China, and the Middle East were the biggest export markets.21
Though Brazil only exports a minority of the beef it produces, it exports 75 percent of its soy production.22 In
2012, the largest market for Brazilian soy exports was China, taking 48 percent of total exports; the second
largest market was the EU, with 31 percent. One-third of Brazils timber plantation area is used for pulp
production, and around two-thirds of this pulp is exported. In 2012, 46 percent of this pulp was exported to
Europe, 26 percent to China, and 19 percent to North America (BRACELPA 2014).
There is no official data on the proportion of Brazils tropical timber production and exports being sourced
from conversion of forests. Grieg-Gran et al. (2007) estimate volumes of tropical forest conversion timber in
Brazil at between 4.7 million m3 and 14.7 million m3 in 2004, compared with total production that year of 24.5
million m3, suggesting that it represents between 19 and 60 percent of production. However, their analysis also
concludes that much forest clearance for agriculture involves little commercial harvesting. For this study, the
lowest end of the implied range (19 percent) is therefore assumed for tropical wood exports.
27
considered because of a lack of quantitative data. The estimate used in the analysis also does not capture the
extent to which deforestation that was in compliance with legal reserve limits may nevertheless have occurred
on properties where ownership rights were obtained illegally.
On the other hand, the general proviso that the measure of illegality used in the analysis does not consider
any post-hoc process of legalization (see Section 2.1) is of particular importance to Brazil, given the recent
amnesty covering large areas of illegal deforestation that occurred prior to 2008 (see Box 4). In addition, the
illegality percentage for the Brazilian Amazon applied in the analysis in this report is based on evidence that
only extends to 2009, and it is likely that a lower proportion of deforestation since that date has been illegal.
However, given that the years to 2009 account for 90 percent of Amazon deforestation during the reference
period (2000 to 2012), any variation in the illegality rate since will make little difference to the overall total.
Similarly, with regard to the commodity analysis (Section 3.2), it is especially important to bear in mind that this
analysis considers all production and trade of relevant commodities to be associated with illegality regardless
of when the deforestation took place, or whether it has since been legalized. Though most relevant Brazilian
commodities may still be coming from land which was illegally deforested, the proportion of new production
(from land cleared only recently) that is illegal will almost certainly be lower.
BOX 3
Two Common Types of Illegalities Associated with Forest Clearing for Agriculture and Livestock
1. Ownership rights: Organized land grabbers and squatters have cleared forest areas with impunity,
and then taken advantage of various government programs granting land titles after the fact to
validate illegal seizures of public lands. This land-grabbing has been a key part of the process
of forest conversion to cattle pasture. The World Bank reports that the high profits to be
obtained from cattle ranching are often due to the originally illegal appropriation of land which
is camouflaged in subsequent financial returns (Margulis 2004). Fraudulent title deeds and
corruption are common tools in the illegal appropriation of land. The Brazilian government stated in
2009 that clear ownership records existed for less than 4 percent of the land in private hands in the
Brazilian Amazon (Barrioneuvo 2009). The Brazilian authorities continue to encourage illegal landgrabbing by allowing such land to be regularized through payments that are below market rates.
Efforts by the Brazilian government to address past illegalities in land titling and prevent future
land-grabbing have been much less successful than those relating to other types of illegalities
related to forest conversion (Barreto and da Silva 2013).
2. Legal reserves: All properties are legally required to maintain a minimum of natural vegetation within
each property (the legal reserve). This minimum has varied over time and is higher in the Brazilian
Amazon than elsewhere in Brazil. Since 1997, the legal reserve in the Amazon has been 80 percent;
prior to that it was 50 percent. In the cerrado, it is 35 percent. It has been estimated that 90 percent
of forest clearance in Mato Grosso state between 2001 and 2009 was in excess of the legal reserve
(Stickler et al. 2013; see main text for additional details).
28
TABLE 4
Illegal Deforestation in Mato Grosso State due to Commercial Agriculture,
Brazil, 1997 to 2009
Period
% of deforestation illegal
1997 to 2001
18,782 km2
88%
2001 to 2005
27,062 km2
90%
2005 to 2009
6,681 km
90%
Additional evidence from Greenpeace (2009a), based on a comparison of satellite imagery with permits for
deforestation obtained from government agencies, suggests that these findings are typical for the broader
Brazilian Amazon, estimating that 90 percent of the deforestation from July 2006 to July 2007 was illegal. This
represented a substantial increase compared to 2004, when a similar analysis found that only 70 percent of
conversion was illegal (Greenpeace 2009a). 23
The analysis excluded the states of Tocantins and Maranho, but these encompass less than two percent of the Brazilian Amazon
forest.
23
29
24
30
BOX 4
Actions to Address Illegal Deforestation Taken by the Brazilian Government
Since 2004, the Brazilian government has taken a number of steps to to reduce deforestation. These
actions have been credited as the key drivers behind the dramatic 70 percent decline in deforestation
seen in the country in the years 2004-2012 (Nepstad et al. 2014). While the most effective government
action during 2004-2006 was a massive increase in the area of protected forest (including indigenous
reserves) (Soares-Filho et al. 2010), command and control actions specifically targeted at illegal
deforestation have been found to have been particularly important from 2008 onwards, when the most
substantial declines in deforestation were seen (Arima et al. 2014). Steps taken by the government that
were specifically targeted at illegal deforestation include:
2004Plan for the Protection and Control of Deforestation in the Amazon (PPCDAm) improved
coordination between relevant enforcement agencies.
2008The Critical Counties Program prohibited government agencies from providing loans to
properties on Brazils environmental agency (IBAMA)s list of embargoed properties found to
have cleared forest illegally, while an associated resolution of the Brazilian Central Bank required
documentation proving compliance with environmental regulations by farms in the Amazon biome
as a condition for financing.
2008The federal prosecutors office (MPF) in Par took civil action against 20 ranchers and 11
major meat packers, and recommended to major supermarkets and other buyers to halt purchases
from them; the MPF then used the case as leverage to obtain important commitments from the
meatpackers concerned.
2009The Rural Environmental Registry (Cadastro Ambiental Rural (CAR)) went into effect in the
states of Mato Grosso and Par. By requiring landholders to submit their property boundaries
to the state environmental regulatory agency (SM), it increased capacity to enforce legal reserve
requirements (though it did not assess legality of land tenure).
2012The new Forest Code required every state to establish a CAR and required individual properties to
report their level of compliance with the legal reserve and plans for achieving compliance.
Arima et al. (2014) examined the indirect drivers that led the government to enact relevant policies and
increase its efforts at enforcement. The authors consider that an accumulation of detailed evidence
(including annual data series from satellite monitoring programs) of widespread and growing deforestation
(much of it illegal) was an important factor, as was the increased support of the Brazilian public for action,
and reforms in the Brazilian judiciary that created the Federal Prosecutors Office (MPF), which is able
to act as an independent watchdog over other relevant agencies. The authors also concluded that a
relatively well-crafted legal framework helped in tackling illegalities.
Though the actions taken thus far have been effective, there remains much that needs to be done.
Implementation of the crucial CAR requirements remains at an early stage in much of the country. Barreto
and da Silva (2013) highlighted three factors that continue to stimulate deforestation in Brazil: the failure
to prevent illegal land-grabbing; as well as the failure to address fraud and money-laundering related to
the taxes on rural properties (ITR) and rural incomes (IRR). All three factors relate to illegalities involved
in commercial agro-conversion.
31
been repaired, and that they were now in full legal compliance. The buyers also committed to refusing cattle from
ranches accused by relevant government agencies of land-grabbing, until such accusations were dropped. In the
longer term, the companies agreed that they would ensure all suppliers had the necessary environmental permits
within two years, and would only accept suppliers who could prove they were in possession of legal land titles
within five years. All of this was to be ensured through the establishment of supply chain tracking systems.25
Though it was an impressive achievement, the G4 Agreement stopped well short of preventing all purchasing
of cattle from land which was illegally deforested prior to 2009. First, though it encompassed the largest four
companies in the industry, the voluntary deal only covered one-third of the total cattle slaughtering in the
Amazon (Walker et al. 2013) and allowed purchases to continue if the farm was legalized through payment of
fines or other measures. Such purchases could only be prevented where the illegal deforestation was detected
by government agencies (and the relevant areas thereby embargoed). The agreement also did not apply to
deforestation outside the Amazon biome, such as in Brazils cerrado forests.
Even for those illegalities that were captured, there is evidence of problems with implementation of the
agreement. In June 2012, Greenpeace published a review of the effectiveness of the G4 Agreement in which it
claimed to have evidence showing that the largest of the companies involved (JBS) was continuing to buy from
farms deforesting illegally and occupying indigenous lands (Greenpeace 2012a). Greenpeace claimed that two
farms that supplied JBS up to November 2011 were embargoed by IBAMA for illegal deforestation as late as
December 2011, and that this demonstrated that
the companys supply chain system was failing
to determine whether or not suppliers were
engaged in illegal deforestation. Greenpeace
also claims that JBS failed to properly monitor
its indirect suppliers (Greenpeace 2012b).
JBS has challenged Greenpeaces assertions
(Mongabay 2012b).
Meanwhile, illegal deforestation for beef
production has continued. In April 2013, federal
and state authorities sued 26 slaughterhouses
in the states of Amazonas, Mato Grosso, and
Rondnia for buying cattle from farms involved in
illegal deforestation. The fines issued total $280
million. One of Brazils largest slaughterhouse
firms, BR Foods (not among those which signed
the G4 Agreement), was among those cited.
According to the Federal Public Ministry, it had
bought cattle from six farms in areas embargoed
by IBAMA (Greenpeace 2013c).
Minimum Criteria for Industrial Scale Cattle Operations in the Brazilian Amazon Biome (also known as the G4 Cattle Agreement),
October 4, 2009. Note that the agreement was known as the G4 Agreement as it initially involved four companies, but two
subsequently merged.
25
32
CASE STUDY 1
Cattle Ranching in Marab, Par, Brazil
In March 2007, the World Banks International Finance Corporation (IFC) approved a loan to Brazilian
company Bertn for the expansion of a slaughterhouse in Marab, Par.
Prior to the investment, the IFCs own summary of the proposed investment admitted that numerous
farmers in Bertns supply chain have no legal title to land or have fraudulent documentation (IFC
2006). For this reason, the loan included conditions meant to minimize the impact of the new facility on
surrounding forests and to ensure it did not take cattle from illegally deforested land.
However, Greenpeace researched six ranches supplying cattle to the slaughterhouse after the loan was
approved, and found all had deforested far more than the legal reserve maximum of 20 percent of
the land under their control. All had deforested at least 60 percent, and two had cleared more than 90
percent. The slaughterhouse also sourced cattle indirectly from ranches that had been raided by IBAMA
and found to be involved in illegal deforestation. The deforestation rate within the surrounding area was
estimated to have increased by 40 percent since the loan was agreed. Greenpeace has also documented
cattle from an illegal ranch inside an indigenous Indian forest reserve being supplied to a separate Bertn
slaughterhouse in Tucuma (Greenpeace 2009a).
FIGURE 8
Deforestation in Excess of the Legal Reserve 20 Percent Limit inside Itacainas Ranch,
which was Supplying Cattle to Bertns Slaughterhouse in Marab in 2008.
33
Veracels website (http://www.veracel.com.br/default.aspx?tabid=147) states that the company produces 1 million metric tons
(mt) per year; industry association BRACELPA gives total Brazilian production as 14 million mt per year (BRACELPA, Brazilian Pulp
and Paper Industry, October 2013, http://www.bracelpa.org.br/bra2/sites/default/files/estatisticas/booklet_eng.pdf).
26
34
Council (FSC) auditors to be in breach of health and safety regulations in its treatment of workers (SGS Qaulifor
2012). Veracel exports nearly all of its pulp (Lang 2008).
Two other large Brazilian pulp producers have also been involved in converting natural forests for timber
plantations, Aracruz (now part of Fibria) and Suzano, and are alleged to have planted on lands which were
previously the subject of illegal land grabs (Krger 2012).
TABLE 5
Deforestation and Commodity AnalysisBrazil
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000-2012
deforestation due to
commercial agriculture
% of 2000-2012
deforestation for
commercial agriculture
which was illegal
% of illegal commercial
agricultural deforestation
2000-2012 embodied
in exports
90% Morton et al. (2006) found that 91% of newly deforested land in Mato Grosso (the Brazilian
state responsible for approximately 40% of national deforestation) became cattle pasture
or cropland in 2002 and 89% in 2003. Grieg-Gran et al. (2007) estimate that 98% of
Brazilian deforestation from1996 to 2005 could be attributed to soy and cattle. Karstensen
et al. (2013) state that the share of land use in the year of deforestation in most Brazilian
states is 34.7% for soy and 65.3% for pastures (i.e. that 100% of initial deforestation is for
agriculture). While there has been a dramatic rise in the proportion of Amazon deforestation
taking place in small lots (< 25 ha) since 2007, it is unclear whether such deforestation can
nevertheless be classified as commercial agriculture according to the definition used in this
report (i.e. if smallholders form enterprises or participate in outgrower schemes) (Rawling
2014). In addition, even if the percentage of annual deforestation caused by subsistence
had increased (which has not been shown) in recent years, this would make little difference
to the proportion of cumulative deforestation from 2000 to 2012, which was due to
commercial agriculture, given that most of that deforestation occurred in the early part of
that period.
68%90% Stickler et al. (2013) found that 90% of agro-conversion in the Brazilian Amazon from
2001 to 2009 was illegal due to clearance in excess of forest reserve limits. Though it is
possible that the proportion of illegal agro-conversion for the study period 2000 to 2012 was
lower, another study posits that a relatively small proportion of the deforestation that took
place from 2000 to 2012 occurred during those years (INPE 2014), so a slight change in
the illegal percentage for those years would not make much difference to the overall figure.
The 90% figure matched that from a separate study published in 2009, which examined
the period July 2006 to July 2007 (Greenpeace 2009a). Three-quarters of Brazilian
deforestation over the period 2001 to 2012 was in the Brazilian Amazon (deforestation
data sets from INPE (Amazon); UFG-LAPIG (cerrado)). There are no quantitative measures
of the proportion of illegality in deforestation in the cerrado; for the mid-range estimate it is
assumed that this biome had the same proportion of illegal clearing as the Amazon (based
on WWF's assertion that "few producers comply" with laws in the cerrado too); if illegality in
the cerrado were instead assumed to be zero, the overall proportion would decrease to 68%.
It is assumed that the proportion of illegality prior to 2001 was the same as that during
2001 to 2009.
30% Karstensen et al. (2013) found that 30% of Brazilian deforestation during 2000 to 2010
was embodied in exports of soy and beef. It is assumed that soy and beef from illegally
deforested land are no more or less likely to be exported than the average.
35
Factor
Estimate
Justification
COMMODITY ANALYSIS
Soy
% of area of soy in
2012 which displaced
forest
% of soy deforestation up
to 2012 which was illegal
59%61% In total, soy was found to have led to 7.2 Mha of deforestation in Brazil in the 10 years to
2005 (Grieg-Gran et al. 2007), during which time the total area planted with soy increased
by 11.1 Mha (FAOSTAT/USDA FAS). This suggests that at least 65 percent of new soy
production during that period occurred at the direct expense of forest. Since 2005, a further
2 Mha of soy have been planted in Brazil (FAOSTAT 2014). Given the widespread evidence
of the success of the soy deforestation moratorium in reducing the amount of deforestation
due to soy in the Amazon after 2006 (GTS Soy Task Force, 2012), it is assumed that the
proportion of post-2005 planting that displaced forest has been substantially lower (between
0% and 20%almost all in cerrado rather than Amazon forests). For the period prior to
1995 (during which 11.7 Mha were planted), it is assumed that the proportion displacing
forest was the same as for the subsequent 10 years (65%). So in total the figure is (11.7
Mha x 65%) + 7.2 Mha + (2 Mha x 0% - 20%)/25 Mha = 59% - 61%.
49%69%90% It is assumed that the proportion of illegality in conversion of forest for soy prior to 2001 was
the same as that during 2001 to 2009. Of a total of 7.2 Mha of soy-related deforestation
estimated to have occurred during 1996 to 2005, 3.3 Mha (46%) was in the cerrado and
the balance in the Amazon (Grieg-Gran et al. 2007). The low range overall estimate assumes
zero illegality in soy-related deforestation in the cerrado, while the mid-range estimate
assumes this to be 45% (thus, for example, the total mid-range percentage is calculated as
(54% x 90%) + (46% x 45%) = 69.3%).
COMMODITY ANALYSIS
Tropical Timber
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest clearance
illegal
19% Grieg-Gran et al. (2007) estimate volumes of tropical forest conversion timber at between
4.7 million m3 and 14.7 million m3 in 2004, compared with total production that year
of 24.5 million m3, suggesting that it represents between 19% and 60% of production.
However, their analysis also concludes that much forest clearance for agriculture involves
little commercial harvesting. For this study, the lowest end of the implied range is therefore
assumed for tropical wood exports. The same percentage found in 2004 has been assumed
to persist over the entire reference period.
90% 90% of Brazil's naturally grown tropical timber originates in the Amazon forests (Viana et al. 2002),
where 90% of forest conversion during 2001-2009 was found to be illegal (Stickler et al. 2013).
% of cattle deforestation
up to 2012 which
was illegal
36
79% According to official government data, 45 Mha of cattle displaced forests in the Brazilian
Amazon to 2007 (INPE 2011) to which can be added 3.9 Mha displacement in the cerrado
between 1995 and 2005 (Grieg-Gran et al. 2007). Meanwhile, official data show a total of
62 Mha of land in Brazil occupied by cattle up to 2010 (INPE, Projeto PRODES, 2011).
Combined, these figures suggest that a minimum of 79% ((45 Mha + 3.9 Mha) / 62 Mha) of
cattle pasture in Brazil displaced forest.
73%82%90% Of a total of 21 Mha of cattle-related deforestation estimated to have occurred during 1996-2005,
3.9 Mha (19%) was in the cerrado and the balance in the Amazon (Grieg-Gran et al. 2007). The
low range overall estimate assumes zero illegality in cattle-related deforestation in the cerrado,
while the mid-range estimate assumes this to be 45% (thus, for example, the total mid-range
percentage is calculated as (81% x 90%) + (19% x 45%) = 81.5%).
4.2 Indonesia
4.2.1 Background
Indonesia is one of the three largest tropical forest countries in the world, with 131 Mha of forests, or
approximately 68 percent of the countrys land area as of 2011 (Ministry of Forestry 2011). Emissions due to
land use change have made Indonesia among the worlds top three greenhouse gas emitters, with 37 percent
of emissions due to deforestation and 27 percent due to peat fires (National Council on Climate Change 2010).
Recent analyses of high-resolution satellite data show that Indonesia lost more than 6 Mha of natural forest
between 2000 and 2012, with an increase in annual forest loss over this period (Margono et al. 2014).
Deforestation was highest in 2012, the last year of the study. In that year, for the first time, a higher percentage
of forest was lost in Indonesia than in Brazil, making Indonesia the new number one country in the world for
tropical deforestation (though Brazil still maintains a higher rate of deforestation in all forest categories). The
new figures contrast with the Indonesian governments claims that deforestation has been declining; part of
the reason for the discrepancy is that the government only measures loss in areas designated as part of the
forest estate (Mongabay 2014b).
Over the last 20 years, deforestation has been driven predominantly by the expansion of commercial agriculture,
especially of monoculture oil palm and forest plantations. Other drivers of deforestation include logging (both
legal and illegal), infrastructure development (including roads), aquaculture, small-scale and subsistence
agriculture, forest fires, and, increasingly, mining (Indrarto et al. 2012).
37
BOX 5
Studies Estimating Forest Loss in Indonesia due to Oil Palm and Timber Plantations
Between 1982 and 2007, 36 percent of the forest in Riau Province on the island of Sumatrathe
province with by far the greatest area of recent deforestation in Indonesia (MOF 2011)had been
cleared for oil palm, and 24 percent had been cleared for timber plantations (Uryu et al. 2008). A
further 5 percent had been cleared relatively recently (and thus not yet planted with crops), but
may also been cleared for oil palm or timber plantations. Additional forest (less than 16 percent,
approximately) had been cleared for other industrial agriculture, such as rubber and coconut
plantations. Thus, 81 percent of all forest loss may potentially have been the result of clearing for
commercial agriculture. A more detailed examination by the same study of deforestation within the
Tesso Nilo-Bukit Tigapuluh-Kampar landscape (representing 55 percent of Riau) found that between
1990 and 2007 timber plantations contributed 46.5 percent of forest loss and oil palm plantations a
further 34.2 percenta combined total of 80.7 percent.
Based on areas planted at the time of measurement, oil palm plantations were responsible
for approximately 57 percent of deforestation between 2000 and 2010 in Indonesian Borneo
(Kalimantan) (Carlson et al. 2013). The indirect effects are likely to have been much more extensive,
however. An earlier study, covering just one of the four provinces of Kalimantan, found that 93
percent of deforestation between 1989 and 2009 was due to forest fires (Carlson et al. 2012). While
only a small proportion of this land had been planted with oil palm at the time of the study, other
evidence suggests that up to 80 percent of fire-related deforestation in Indonesia can be attributed to
plantation development (FWI/GFW 2002), leading to a backlog of unused land (Boucher et al. 2011).
Examining deforestation over nearly the whole of Indonesia during 2000 to 2010, Abood et al. (2014)
found that 30.1 percent had occurred within mapped oil palm and timber plantation concessions. The
total included 12.8 percent in areas solely licensed for timber plantations, 11 percent in areas solely
licensed for oil palm plantations and 6.3 percent in mixed concessions (usually areas licensed for oil
palm that overlap with areas also licensed for logging or mining). The study did not seek to estimate
the drivers of forest lost outside the boundaries of concessions; for example, as a result of illegal
encroachment or fires started within concessions that then burn, uncontrolled, outside the concession;
nor did the study seek to estimate the proportion of forest outside such areas lost as a result of other
commercial agriculture. A separate study by Greenpeace (2013f), using a similar methodology, found
that 24 percent of deforestation between 2009 and 2011 took place within oil palm concessions.
Most of the conversion timber from natural forests, as well as the palm oil and plantation-grown wood produced at
the expense of natural forests in Indonesia, are destined for export. In 2011, Indonesia exported between 70 and 80
percent of the palm oil the country produced.27 Most of the plantation-grown wood produced in Indonesia is used
in the production of pulp and paper. This study has calculated that in 2011, Indonesia exported around half of all the
pulp it produced and also exported around half of the paper made from the pulp that was consumed domestically.
Combined, these figures suggest that 75 percent of plantation wood used in the manufacture of pulp is exported.28
Low-end figure calculated from figures for palm oil production and exports for 2012/13 in USDA Foreign Agricultural Service,
Oilseeds: World Markets and Trade, November 2013, Table 11: Palm Oil: World Supply and Distribution; high-end figure
calculated from FAO data for production and exports in 2010 (FAOSTAT). A World Bank study from 2010 found that half of palm
oil production is exported unprocessed, while around half of processed oil is exported as well, implying total exports represent
at least 75 percent of production (World Bank 2010).
28
Ministry of Forestry figures show 6.2 million metric tons (mt) of wood pulp production and 2.9 million mt of pulp exports
(Ministry of Forestry 2011); Indonesia produced around 10 million mt of paper the same year (APKI, forthcoming), and exported
4.3 million mt (UN COMTRADE data).
27
38
According to official statistics, Indonesia exports the majority of the timber it produces. In 2010, for instance,
the Ministry of Forestry reported total timber production of 42 million m3,29 while total wood product exports
reported the same year (in roundwood equivalent terms) were more than 40 million m3.30 In reality, there
is a large volume of illegal wood production that goes unreported (Blundell 2014). Indonesia consumes an
estimated 10 million m3 of timber domestically (Klassen 2010), which (when considered alongside imports
of 9 million m3 in 2010)31 implies that the real proportion of total wood supply (including natural forest and
plantation wood) exported is around 80 percent.32 The proportion of natural forest conversion timber exported
from natural forests is assumed by this study to be the same as the overall figure.
The importance of conversion timber in the legal supply is also increasing. Official figures from 2010 state that
almost three-quarters of wood harvested that year from natural forests was from conversion (mostly from
forests cleared for new timber plantations), up from just 6 percent eight years earlier (see Figure 9). The actual
volume and proportion of conversion timber is almost certainly much higher, because a great deal of forest
conversion is illegal (see Section 4.2.3) and the timber harvested is likely unrecorded in official figures (Blundell
2014). Estimates of real (recorded and unrecorded) conversion wood production (based on the area of new
planting of timber and oil palm and assuming a conservative average volume of salvage production per hectare)
suggest the true figure for conversion timber may be as much as 85 percent of the timber produced from
natural forests. These estimates also suggest that the proportion of timber coming from conversion increased
a lot earlier than the official figures suggest. As described in Section 4.2.3, recent analysis indicates that at least
75 percent of forest conversion in Indonesia is likely illegal; combining this with the estimate of real conversion
production implies that at least 60 percent of all tropical wood produced in Indonesia is from illegal conversion.
FIGURE 9
Indonesian Natural Tropical Timber Production, 2002-2010 (Official Figures)
100
80
60
40
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
20
02
0
Forest Conversion
Source: Indonesian Ministry of Forestry production statistics (excluding plantation-grown wood), analyzed by the author.
This volume is the equivalent volume in round wood of the volume of processed products reportedly produced by mills that use
more than 6,000 m3 per year (Ministry of Forestry 2011).
30
RWE export figures for all wood products (including furniture and pulp and paper) calculated by James Hewitt, based on
Indonesian government data, available at http://www.globaltimber.org.uk/indonesia.htm.
31
RWE import figures for all wood products (including furniture and pulp and paper) calculated by James Hewitt for Forest Trends,
based on Indonesian government data.
32
Calculated by comparing domestic consumption with total wood supply (production and imports). Total supply is 42 million m3 of domestic
production plus 9 million m3 of imports (total of 51 million m3). Domestic consumption is 10 million m3, implying that the rest of the total
supply must be 41 million m3 (51 minus 10) for export, which means that the proportion of total wood supply exported is 41 million/51
million, or 80 percent. It is assumed that products manufactured from domestic production and imports are equally likely to be exported.
29
39
33
40
and plantation developers. In 2012, Indonesia President Yudhoyonos office received reports of 8,495 agrarian
conflicts, of which 2,002 were likely to erupt into violence (Human Rights Watch 2013).
BOX 6
Illegal Use of Fire to Clear Land for Oil Palm and Timber Plantations34
It is illegal in Indonesia to use fire to clear forests, and yet every year, satellite data pinpoint hundreds of
fire hotspots within areas of forest licensed for the development of oil palm and timber plantations.
Examining fire hotspots that were detected in Riau between 1997 and 2007, 80 percent of the fires were
associated with oil palm or timber plantations (Carlson et al. 2013). More than 60 percent of the land
associated with fire in 2006 had been planted with oil palm or acacia a year later (Uryu et al. 2008). Global
Forest Watch (2002) estimated that 80 percent of forests lost to fires nationwide during the peak period in
1997 to 1998 could be attributed to plantation development (FWI/GFW 2002). More recently, the World
Resources Institute (WRI) reported that the fire events in Sumatra in June 2013 were mostly occurring
within areas licensed for conversion (Sizer 2013).
Examination of all relevant published reports of allegations of illegalities in oil palm development
in Indonesia shows that fire hotspots have been identified within almost every Indonesian oil palm
concession. Though locating hotspots within concessions is easy, it is very hard to prove that these fires
were started deliberately by the company to clear forest. Indeed, a study of a sample area in Riau that
burned in the spring of 2014 showed that most fires that occurred within concessions either started
outside those concessions or on land occupied by local or migrant communities within the concessions
(Gaveau 2014). In the majority of published cases, however, most hotspots were found to occur at the
same time that forest was being cleared, with planting ensuing shortly thereafter. In a small number of
cases, more concrete evidence has been uncovered by authorities and prosecutions brought.
Even if fires were not started by concessionaires, this does not absolve them of legal responsibility.
Aside from prohibiting the deliberate lighting of fires, Indonesian legislation also requires oil palm
concessionaires to prevent fires on land under their control, and to have plans and equipment in place
to tackle fires that do start. Proving a lack of compliance with these rules is easier, and few plantations in
which this issue has been independently assessed have been found to comply.
34
Sources for published NGO allegations regarding fire hotspots in oil palm plantations in Indonesia: Aidenvironment 2009; Atus
2009; BSI-CUC 2010; EIA/Telepak 2012b; Friends of the Earth Europe 2010a; Greenpeace 2007; Greenpeace 2008; Greenpeace
2009b; Greenpeace 2010; Greenpeace 2013b; Greenpeace 2013g; Milieudefensie 2007; Rainforest Action Network 2010a;
Wakker et al. 2004; Gaveau 2014.
34
41
BOX 7
Corruption Relating to Conversion of Forests for Oil Palm and Timber Plantations
A number of major cases have exposed the extent of corruption in the issuance of licenses for conversion
of forests to oil palm and timber plantations in Indonesia. Indeed, most of the $100 million in assets
recovered by the Indonesian Corruption Eradication Commission (Komisi Pemberantasan Korupsi, or KPK,
a government agency established to fight corruption) has come from the forest sector, and most of this
has come from illegal conversion cases (U4 2011).
Riau (Sumatra): In March 2014, the former governor of Riau was jailed for 14 years for the illegal
issuance of permits to nine companies, all of them suppliers to Asia Pulp & Paper (APP 2014;
Mongabay 2014a). The head of Riaus Pelalawan district had previously been jailed for issuing
timber plantation licenses illegally between 2001 and 2006, including to companies owned by
members of his family (Dermawan et al. 2011). The head of Riaus Siak District has also been jailed
for timber plantation-related corruption (Tempo 2012). Ten of twelve wood suppliers for one of
the largest pulp mills (Asia Pacific Resources International Limited (APRIL)) operating in the Kampar
Peninsula obtained their licenses from the heads of these two districts (Eyes on the Forest 2012).
APRIL suppliers received annual cutting licenses from three Riau Forestry Agency chiefs who have
since been jailed for corruption (ibid.). The Provincial Forestry Department Head was also jailed in
connection to the case, which is estimated to have caused losses to the state of $131 million (U4
2011).
East Kalimantan: In 2007, a company was found to have illegally obtained through bribery 11 oil
palm plantation licenses covering 147,000 ha between 1999 and 2006, then clear-felled the forest
for timber but never planted oil palm. The company was fined $36 million, and the Governor of East
Kalimantan and a senior provincial forestry official were jailed, along with the companys director
(Tempo 2008).
Central Sulawesi: In 2013 a prominent businesswoman was jailed for two years for paying a
$300,000 bribe to a district chief in Central Sulawesi in exchange for an oil palm license issued in
contravention of national legislation (Antara News 2013). The district chief was in turn jailed for
seven and a half years (Jakarta Globe 2013).
In addition to the corrupt issuance of licenses, there has been a long history of misuse of the Indonesian
Reforestation Fund, a subsidy program intended to support development of timber plantations, from
which US$5.2 billion was embezzled in the mid-1990s (Barr et al. 2010). Among those convicted since is
(former President) Suhartos half-brother, who was found to have fraudulently claimed that his company
had planted almost twice the area of forest that it had (Jurgens et al. 2005). Corruption and misuse of the
Reforestation Fund remained a problem in the post-Suharto era (Barr et al. 2010).
In 2012, the KPK established an Action Plan to address the widespread corruption in the forest sector,
and obtained a commitment from 16 government ministries/agencies to implement the Plan through the
signing of a Memorandum of Understanding (Government of Indonesia 2013).
42
35
43
and local communities customary rights (APP 2013). APPs fiber supply should now be reliant on plantation
wood grown on land it previously deforested, or on non-forested land. In contrast, APRIL continues to source
around two-thirds of its wood fiber from logging of natural forests.36
44
cases) (Figure 10). Oil palm companies were found to have begun converting forests without having an approved
Environmental Impact Assessment (AMDAL) in 26 cases, which would render irregular all subsequent licenses
issued because these other permits are not supposed to be issued before the AMDAL is approved. It is commonly
reported that officials sign off on permits without or in advance of the previous permit having been issued.
FIGURE 10
Summary Data on Specific Named Cases of Alleged Illegalities and
Irregularities in Oil Palm Conversion in Indonesia, 1999-2013
20
40
60
Note: Summary analysis of published cases, based on NGO reports, independent verification missions, and press reporting of cases
prosecuted by government.30
Sources consulted include AFP 2003; Aidenvironment 2008; Aidenvironment 2009; Antara News 2013; Atus 2009; BBC 2010;
BSI-CUC 2010; Center for Orangutan Protection 2010; EIA/Telapak 2009; EIA/Telapak 2011a; EIA/Telapak 2011b; EIA/Telapak
2012a; EIA/Telepak 2012b; Equator Online 2007; Friends of the Earth et al. 2008; Friends of the Earth Europe 2010a; Friends
of the Earth Europe 2010b; Greenpeace 2007; Greenpeace 2008; Greenpeace 2009b; Greenpeace 2010; Greenpeace 2013b;
Greenpeace 2013g; Milieudefensie 2007; Mongabay 2013b; News 24 2000; NGO Coalition 2011; Rainforest Action Network
2010a; TV Rheinland 2011; Wakker 2014; Wakker et al. 2004.
40
45
CASE STUDY 2
PT Suryamas Cipta Perkasa (PT SCP; a Subsidiary of PT BEST Group) Oil Palm Plantation
In 2012, the Environmental Investigation Agency (EIA) and Telapak (a national civil society organization)
published the findings of their extensive investigations into one oil palm concession in Pulang Pisau district
of Central Kalimantan, Indonesian Borneo (EIA/Telapak 2012b). Analysis of permits and satellite images,
field investigations and interviews with members of the local community provided evidence of a series
of illegalities related to the concession. The investigation showed that the plantation business permit
(IUP) for the concession had been illegally issued without the required Environmental Impact Assessment
(AMDAL) having been approved. The investigation also showed how the company breached numerous
regulations while clear-felling the forest between 2007 and 2010. For example, the company had cleared
the forest within its concession without it having been formally released by the Ministry of Forestry, and
without a legally issued timber exploitation permit. It had also begun clearing forest and planting oil palm
before its AMDAL had been approved. The company had cleared thousands of hectares of forest on peat
soils deeper than the maximum allowable by law, and had even cleared forest and planted oil palm up to
2 km outside the boundaries of its concession.
Numerous fire hotspots that were found within the concession during the period when the forest was
being converted also suggest thatat a minimumthe company failed to mitigate the risk of fire during
land clearing and failed to deploy firefighting to extinguish any fires, as required by law. Members of the
local community (which is in conflict with the company after promises of compensation were repeatedly
broken) also alleged that the company had cut protected ramin (Gonystylus spp.) trees and even paid
people to hunt and kill orangutans within the concession. Another company within the PT BEST group
operating elsewhere in Central Kalimantan had previously been found to have illegally cleared 2,500 ha
of forest within Tanjung Puting National Park.
EIA and Telapak provided a dossier of evidence to the authorities, but there was little or no meaningful
action taken. Thus, the case also raised major concerns over both the ability and the willingness of
relevant branches of the Indonesian government to enforce laws related to oil palm development.
46
TABLE 6
Deforestation and Commodity AnalysisIndonesia
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
80% Uryu et al. (2008) examined Riau (the province with the greatest area of deforestation in
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
80% Four separate sources suggest a figure between 80% and 90%. Firstly, a government audit
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
the country) and found that between 1982 and 2007, 81% of deforestation appears to have
been related to commercial agriculture. That is, 36% of forest had been cleared for oil palm
(including smallholder commercial plantations) and 24% for timber plantations. A further
5% had been cleared relatively recently and may also have been due to be planted for oil
palm and/or timber plantations. Additional forest (less than 16%) had been cleared for other
industrial agriculture, such as rubber and coconut plantations. Though other studies have
attributed smaller proportions of total deforestation to oil palm and timber plantations, such
studies do not assess other commercial crops and they suffer from other methodological issues
that likely significantly understate the true proportion of deforestation attributable to oil palm
and timber plantations (see Section 4.2.2 and Box 5 for further explanation and analysis).
found that 81% of oil palm plantations in Central Kalimantan (the province with the second
largest area of such plantations in IndonesiaPwC Indonesia 2012) were non-compliant
(BPK 2009, cited in Greenomics Indonesia, 2011). Secondly, a recent analysis by Forest
Trends comparing officially reported use of conversion wood with estimates of actual
production found that from 2000 to 2010, 82 percent of conversion wood consumption may
not have been officially reported and would, therefore, be illegal (Blundell 2014). Thirdly, an
analysis of compliance by oil palm plantations in one sample district in Central Kalimantan
found 89% were associated with one or more illegalities (Aidenvironment, forthcomingsee
report text for additional details). Finally, as of 2012, only 11% of Indonesia's 131 Mha
Forest Zone had been formally gazetted as required by law (Wells et al. 2012). This
calls into question the Ministry of Forestry's authority over the majority of the country's
forests, and thus the legality of licenses issued for the development of oil palm and timber
plantations in areas of ungazetted state forest (Colchester et al. 2003).
75% Indonesian government data show roughly similar areas planted with oil palm and timber
plantations during the reference period (Ministry of Forestry 2011), while the evidence
for illegality proportions for each is also similar (e.g., BPK 2009, cited in Greenomics
Indonesia 2011, Eyes on the Forest 2013asee Section 4.2.3). Therefore the overall export
percentage assumes that half of the total illegal agro-conversion during the reference period
was for oil palm and the other half for timber plantations. Proportions of palm oil production
assumed to be exported (75%) is the mid-range of three available figures cited in Section
1.2.3 (USDA 201370%; FAO 201080%; World Bank 201075%). It is assumed that
75% of timber plantation production is also exported. This is based on evidence from pulp
and paper (which is likely the destination of most of the conversion wood, as well as the
plantation-grown acacia that replaces it). Analyses of official data suggest half of all pulp
production is exported directly, while another quarter is exported after being processed into
paper (details of the calculation are provided in the reference in Section 1.2.4 of the report).
Thus, the final overall export percentage is calculated from the above as follows: (50% x
75%) + (50% x 75%) = 75%.
COMMODITY ANALYSIS
Oil Palm
% of area of oil palm in
2012 which displaced
forest
69% 69% of land in Indonesian Borneo (Kalimantan) converted to oil palm during 1990 to
2010 was forested (Carlson et al. 2013). The analyses herein assume that the same
proportion applies to oil palm plantations developed before and since, as well as elsewhere
in Indonesia. This is considered reasonable given that around a third of Indonesia's oil
palm plantations in 2010 were found in Kalimantan (PwC Indonesia 2012), and most of
Indonesia's oil palm planting has taken place since 1990 (Rainforest Foundation UK 2013).
47
Factor
% of oil palm
deforestation up to 2012
which was illegal
Estimate
Justification
80%
COMMODITY ANALYSIS
Tropical Timber
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
75% Official data from the Ministry of Forestry suggest that 73% of wood sourced from natural
% of forest clearance
illegal
80% Comparison of official conversion wood production volumes with conservative estimates of
forests (i.e., excluding plantation-grown wood) in 2010 came from conversion. The real
proportion originating from conversion is likely considerably higher, given that independent
estimates suggest that a great deal of conversion wood is not captured in official statistics
(Blundell 2014).
volumes actually harvested (based on areas converted and typical yields) suggest that over
the period 2000-2010, if used by commercial mills (using > 6000 m3/yr), 82% of timber
production from conversion of forests for oil palm and timber plantations went unreported
and was therefore illegal (see report textcalculated from data presented in Blundell 2014).
37% Two large companies, APP and APRIL, produce 80% of Indonesia's paper production (Barr
2007). The two companies are similar in size (ibid.), and for the purposes of this study they
are assumed to be equal (each producing 40% of total exports). The overall estimate of
the proportion of pulp and paper exports sourced from conversion wood in 2012 assumes
than none of APP's production is from conversion wood (based on the company's zero
deforestation commitment), while two-thirds of APRILs is from conversion (Greenpeace
2013g). For the remaining production (20%), the analysis assumes that half is from
conversion wood and the remainder produced from plantation-grown wood. Thus, (40% x
0%) + (40% x 66%) + (20% x 50%) = 37%.
% displacing forest
50%
Grieg-Gran et al. 2007, citing FWI/GFW 2002, estimate that 50% of all pulp plantations in
Indonesia have directly displaced natural forest.
% illegal
80%
75% of natural forest conversion for timber plantations in Riau during 1985 to 2012 was
legally questionable (Eyes on the Forest 2013a). Their study did not assess compliance
with a number of regulations known to be commonly breached (see report text), so for the
analyses herein, the overall rate of illegality is assumed to be slightly higher, i.e., 80%.
4.3 Malaysia
4.3.1 Forest Conversion for Commercial Agriculture and Associated Exports
In Malaysia, most conversion of natural forests for timber plantations in the last ten years has occurred
in Malaysian Borneo (Sabah and Sarawak). The majority of recent deforestation in Malaysia has been in the
large state of Sarawak in Malaysian Borneo. A study published in 2011 found that Sarawak was losing its forests
at a rate of more than 2 percent per year in the late 2000s, a rate faster than any major tropical forest nation
during the same period.41 Analysis by the author for this report suggests that of the roughly 900,000 ha of forest
lost in Sarawak between 2006 and 2010, 43 percent was converted to oil palm and 21 percent was converted
to timber plantations.42
Calculated from forest area data for 2005 and 2010 in FAO Global Forest Resources Assessment 2010.
Satellite image analysis by SarVision (2011) found that 865,836 ha of forest were lost in Sarawak in the five years to 2010.
Analysis of official data from the Malaysian Palm Oil Board and the Sarawak Forest Department shows that 376,000 ha of new
oil palm plantations and 184,500 ha of new timber plantations were planted during the same period.
41
42
48
Oil palm plantations have been the main driver of forest conversion in Malaysia in recent decades. Initially,
much of the expansion of oil palm took place at the expense of rubber and coconut plantations rather than
natural forest. By the early 2000s, however, most such areas had been repurposed, and most new oil palm
developments since have been on newly deforested land. Grieg-Gran et al. (2007) concluded that of about
1.1 Mha deforested in Malaysia between 1995 and 2005, 70 percent was cleared to make way for oil palm
plantations. Malaysia exports 90 percent of the palm oil it produces.43
Since 2000, conversion of forests to industrial timber plantations has been another important driver of
deforestation. In Sarawak, timber plantation development did not begin in earnest until 2004 (Sarawak Forest
Department 2011), so few plantations are mature and production remains low. In Sabah, most plantation
wood is used for pulp and paper production, the vast majority of which is exported.44 Available data suggest
that Malaysia as a whole exports at least 70 percent of the timber it produces.45 Comparison of export and
production figures for Sarawak in Malaysian Borneo suggests that it exports nearly 100 percent of the timber it
produces.46 As in Indonesia, the proportion of conversion wood exported is most probably similar to the total.
There are no official published figures for the volume of conversion timber produced in Malaysia (the worlds
largest tropical wood exporter) or how much this represents of total tropical wood production in the country.
However, analysis for this study (see Box 8) suggests that two-thirds of timber production in Sarawak (the
state responsible for the majority of Malaysian production) in 2010 may have originated from conversion, an
increase from a little over half compared to four years earlier.
Forest being cleared for oil palm within a proposed National Park, Sarawak, Malaysia Sam Lawson / Earthsight / Global Witness
Calculated from figures for palm oil production and exports for 2012/13 in USDA Foreign Agricultural Service, Oilseeds: World
Markets and Trade, November 2013, Table 11: Palm Oil: World Supply and Distribution.
44
There is one large pulp and paper producer in Sabah, Sabah Forest Industries (SFI). Between 90 and 100 percent of its production
is exported (http://sabahforest.en.gongchang.com/about).
45
Calculated from figures for exports and domestic consumption in 2007 in Lawson and MacFaul (2010).
46
Sarawak Forest Department (2011) gives log production as 9.6 million m3; official export figures for the same year from Sarawak
Timber Industry Development Corporation (STIDC), converted into round wood equivalent (RWE) using typical factors, show
exports of 9.5 million m3.
43
49
BOX 8
Estimating Conversion Wood Production in Malaysia
New research has been carried out for this report in order to inform an estimate of the proportion of
tropical timber produced and exported from Malaysia that originates from conversion of forests for
agriculture and timber plantations, as opposed to selective logging.
The first piece of new analysis examines the Malaysian state of Sarawak in Borneo, which is responsible
for 60 percent of Malaysias production of logs from natural forests.47 The estimate of conversion wood
production is based on satellite measurements of the area deforested, and a conservative assumption of
an average of 38 m3 of salvage wood production per hectare from heavily degraded forest (Blundell 2014)
(as opposed to a typical standing stock of as much as 300-400 m3/ha in virgin tropical forest). The results
(Table 7) suggest that two-thirds of timber production in 2010 may have originated from conversion, an
increase from a little over half compared to four years earlier.
TABLE 7
Estimates of Conversion Timber Production in Sarawak, Malaysia48
Year
Area deforested
(ha)
Area planted
with oil palm
& timber
plantations (ha)
Estimated timber
production from
conversion
(assuming 38m3/
ha) (m3)*
Implied
proportion of
log production
originating from
conversion
2006
169,649
84,000
6,446,662
11,864,495
54%
2007
169,649
143,500
6,446,662
11,890,244
54%
2008
174,503
120,000
6,631,114
11,335,577
58%
2009
174,503
110,500
6,631,114
10,367,392
64%
2010
177,532
102,500
6,746,216
10,151,766
66%
* The estimate of timber production from conversion is calculated from the area measured as deforested in a given
year, rather than the area recorded as having been planted with oil palm and timber plantations; salvage timber is
produced at the time the forest is destroyed, while planting may occur some time later.
This estimate is supported by analysis of detailed Indian customs data for shipments of logs from Malaysia
over a one-month period in 2013 (India is the destination for about two-thirds of reported Malaysian log
exports, 93 percent of which come from Sarawak).49 About two-thirds of the shipment records include
information on the diameter and species of the logs concerned, and 58 percent of those records describe
the logs as small or super small. Based on the standard minimum cutting diameters in selective
logging of the different species involved, it can be shown that of the logs for which diameter information
Calculated from data from 2012 Annual Reports for Sabah Forestry Department, Peninsular Malaysia Forestry Department, and
Sarawak Forestry Department.
48
Sources: Area Deforested: SarVision 2011. (Note that figures for 2006/2007 and 2008/2009 are identical as they are averages from
measurements covering a two-year period.); Area converted to oil palm plantations: based on annual figures for planted area
published by Malaysian Palm Oil Board; Area converted to timber plantations, and total official log production: Sarawak Forest
Department website (www.forestry.sarawak.gov.my) ; Log production per hectare in degraded forest: Blundell 2014.
49
Calculated from figures in MTIB 2012.
47
50
BOX 8, cont.
Estimating Conversion Wood Production in Malaysia
is available, just over half were below the legal cutting diameter for selective logging, and therefore most
likely, came from forest conversion (see Figure 11). Though it is possible that a small proportion of these
logs were illegally harvested within selective logging concessions (and did not, therefore, originate from
forest conversion), this is unlikely to be true for the vast majority of such logs.50 Including those logs for
which diameter information was not available, the data shows that at least 32 percent, and possibly as
much as 69 percent (if all unspecified logs were small), of the logs being imported by India from Malaysia
originated from conversion.
FIGURE 11
Conversion Timber in Indian Imports of Malaysian Tropical Logs, July 21 to August 20, 2013
5%
34%
46%
16%
Detailed shipment records for all imports of logs (HS4403) into India from Malaysia between July 21 and August 20, 2013, sourced
from www.zauba.com and collated and analyzed by the author. Records for 60 percent of the volume involved note whether the logs
are regular, small, or super small; these terms refer, respectively, to logs which have diameters greater than 60 cm, between 45
and 60 cm, and below 45 cm. In Sarawak, the minimum cutting diameter is 60 cm for dipterocarps and 45 cm for non-dipterocarps.
Other sources: Blundell 2014; SarVision 2011.
Based on the authors experience carrying out field research on logging compliance in Sarawak.
50
51
TABLE 8
Summary of Published Case Studies of Illegalities and Irregularities in
Agro-Conversion in Malaysia
Region
No. of Cases
Alleged Illegalities
Peninsular Malaysia
13
Sabah
Sarawak
Plantation Types
federal and state governments that insist that all of the leases are legal, communities have turned to the courts
to seek redress. There are presently around 200 NCR land cases pending in the Sarawak courts alone (SACCESS
2012), and new cases are being filed every year at a faster rate than old cases are resolved. Some unresolved
cases are more than a decade old. Though a number of cases also relate to selective logging concessions and
construction of roads and dams, most cases relate to plantation development. Of 139 relevant NCR cases in
Sarawak filed between 1995 and 2009, at least half involve plantations, and most of these involve oil palm
plantations.51
Of the four NCR cases involving oil palm and timber plantations that had been concluded by the end of 2009, all
had ruled in favor of the plaintiffs.52 Since then, a number of additional court decisions have been made in favor
of local communities in NCR cases involving logging and plantation companies (Yong 2010). For example, in one
recent case involving an oil palm plantation development controlled by Ta Ann, one of Sarawaks largest logging
and plantation companies, the Sarawak Court of Appeal ruled that a large part of the oil palm plantation was
NCR land and that the lease over it was illegal (Maliasikini 2013; Tawie 2013). One particularly high-profile oil
palm-related case that ruled in favor of the community in 2010 was later overturned by a higher court, however
(Borneo Post 2013).
Corruption
Three-quarters of the cases of alleged illegalities in agro-conversion in Malaysia documented by the author
include allegations of corruption. Almost all of these cases relate to political patronage, cronyism, and nepotism
in the issuance of licenses, usually at a very high level. The most serious evidence of corruption comes from
the states of Sabah and Sarawak in Malaysian Borneo (which together account for two-thirds of Malaysias
remaining forests). The Chief Ministers of both states have been the subject of investigations by the Malaysian
Anti-Corruption Commission for alleged corruption related to the issuance of logging and plantation licenses
(Malaysiakini 2012).
In 2011, NGOs released official documents that showed 200,000 ha of land in the Sarawak had been leased for
oil palm development to companies with family connections to the Chief Minister, in exchange for payments
which appeared to be far below the real value (Sarawak Report 2011). The following year, an investigation by
the NGO Global Witness supported these allegations. An undercover investigator posing as an investor seeking
land in Sarawak for a plantation approached the relevant government authority and was offered four plots
of land. Members of the Chief Ministers family were direct shareholders in or beneficial owners of three of
these land leases, while the fourth deal was, according to an intermediary, proposed on [sic] the understanding
that Taib would receive a multimillion dollar kickback from the selling party. Global Witness was also told by a
senior government official and a timber industry executive that companies seeking plantation licenses needed
to make unofficial payments to the Chief Minister. The Chief Minister and other individuals investigated have
vigorously denied the allegations made by Global Witness (Global Witness 2013a).
51
52
53
(Wakker 2010). A joint government and donor study found that the procedures followed for de-gazetting
protected areas for conversion were clearly not according to legal principles (ibid.).
In addition to problems related to license issuance, the Auditor General also found many cases where conversion
for plantation development had taken place without required Environmental Impact Assessments; either the
requirement had simply not been followed, or it had been circumvented in a legally questionable manner. Field
investigations also uncovered a number of cases where illegal clearance had taken place in river buffers and on
steep slopes, and where clearance had extended beyond licensed boundaries (ibid.).
The relative paucity of information on compliance with environmental and other regulations during forest
conversion in Sarawak and Sabah is due to a lack of interest in documenting such matters amongst NGOs
and local communities, and cannot be taken to imply that compliance is good. NGOs, local communities,
and activists in Sarawak and Sabah are focused on the overarching legality of the concessions themselves, in
terms of customary rights and corruption, and view compliance issues during conversion as being secondary
if (as they allege) the concession was illegally issued and therefore its entire operations are illegal. The state
governments, on the other hand, do not provide any information on their own monitoring and assessments of
compliance. On the few occasions where such issues have been investigated, apparent illegalities have been
documented. Illegal clearance on steep slopes was recorded in one industrial timber plantation in Sarawak
in 2009 (Norwegian Council on Ethics 2010), while illegal clearance of steep slopes and along river banks
was documented in an oil palm concession in the same state in 2011 (Global Witness 2012). Given the welldocumented close and allegedly corrupt relationships between the major oil palm and timber plantation
companies in Sarawak and senior officials in government, it is unlikely that there is significant enforcement of
regulations. This interpretation is supported by the much more extensive independent information available
related to compliance by some of the same companies with regulations governing selective logging (Norwegian
Council on Ethics 2012a; 2012b).
Estimate
Justification
DEFORESTATION ANALYSIS
54
% of 2000-2012
deforestation due to
commercial agriculture
87% Grieg-Gran et al. (2007) found that 70% of Malaysian forest loss 1995-2005 was due to oil
% of 2000-2012
deforestation for
commercial agriculture
which was illegal
0%43.4%86.7% No suitable quantitative data exist on which to base estimates, though plentiful qualitative
palm and an additional approximately 17% due to pulp plantations, making a total of 87%. It
is assumed that the proportion of deforestation attributable to these two drivers was the same
in 2000-2012. Deforestation for other commercial plantation crops is not considered, as oil
palm has largely displaced rubber, cacao, and other formerly cultivated plantation crops.
data demonstrate that problem is widespread, especially in Sarawak (Lim 2013), which
was the location of 57% of oil palm planting in 2000 to 2012 (Malaysian Palm Oil Board
2013). The mid-point of the range assumes the problem is 50% of the measured average
of Indonesia, Cambodia, and PNG; high-end analysis assumes it is equal to the average for
these three countries.
Factor
% of illegal commercial
agricultural deforestation
2000-2012 embodied
in exports
Estimate
Justification
86% Assume 78% of illegal agro-deforestation is for oil palm. This is based on proportion of total
deforestation attributed to oil palm for 1995 to 2005 by Grieg-Gran et al. (2007) (70%),
which concluded that pulp plantations, infrastructure, and urban development represented
the other drivers; assuming that the latter two represented 10% of remaining deforestation,
then this suggests that oil palm was 78% of agro-deforestation (70% x 90%). Ninety
percent of Malaysian palm oil production in 2012 was exported (USDA FAS 2013) and
this is assumed to have remained the same over the reference period. Remainder of agroconversion is for timber and other plantations, with 70% exported (rough estimate, based on
the fact that the sole pulp producer in Sabah exports 90%-100% of production (see Section
4.3.2), and conservatively assuming slightly lower percentages for other plantation wood and
other agro-conversion crops). The final overall export percentage is calculated from the above
as follows: (78% x 90%) + (12% x 70%) = 86%.
COMMODITY ANALYSIS
Oil Palm
% of area of oil palm
in 2012 which
displaced forest
55% Grieg-Gran et al. (2007) estimated the total new oil palm planting during 1995-2005 was
% of oil palm
deforestation up to
2012 which was illegal
0%-43.4%86.7% No suitable quantitative data exist on which to base estimates, though plentiful qualitative
1.46 Mha, of which 0.76 Mha (52%) was at the expense of forest, with the remainder due
to conversion of rubber, cocoa, coconut, and other agricultural plantations. It is assumed
that the same proportion applied to planting prior to 1995 (2.54 Mha). From 2006 to
2012, a further 1.03 Mha of oil palm was planted (calculated from Malaysian Palm Oil
Board data). During that latter period, the reduction in area planted with other crops
(rubber, cocoa, coconut) slowed (FAOSTAT), such that a lower proportion of new oil palm
planting can be attributed to conversion of these plantations as during the previous ten years
(during 1995-2005, FAOSTAT data show 36% of oil palm expansion could be attributed
to reductions in these three crops; in the 2006-2012 period the FAOSTAT data show that
the proportion was only 14%). It is assumed that the proportion of oil palm planting during
2006-2012 that occurred at the expense of forest was therefore higher, at 70%. Overall
therefore, the percentage is ((2.54 Mha x 52%) + 0.76 Mha + (1.03 Mha x 70%)) / 5.08
Mha = 55%.
data demonstrate that problem is widespread, especially in Sarawak (Lim 2013), which
was the location of 57% of oil palm planting in 2000-2012 (Malaysian Palm Oil Board
2013). The mid-point of the range assumes the problem is 50% of the measured average of
Indonesia, Cambodia, and PNG; the high-end analysis assumes it is equal to the average of
the three countries.
Tropical Timber
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest
clearance illegal
65% The area of forest cleared and typical salvage volumes in heavily degraded forest suggest
that 66% of log production in the Malaysian state of Sarawak in 2010 was likely from
conversion (see text). Sarawak is reponsible for 59% of Malaysia's total natural forest
tropical log production (calculated from production data in 2012 Annual Reports from forest
departments of Sarawak, Sabah, and Peninsular Malaysia).
COMMODITY ANALYSIS
Pulp & Paper
% from conversion wood
30%90% Malaysia's largest, and only integrated, pulp and paper producer is Sabah Forest Industries
(Roda and Rathi 2005; Avantha Group, undated). As of 2005, 90% of its log input was of
tropical hardwoods, and only 10% of plantation-grown acacia (Roda and Rathi 2005). As an
overall net importer of paper, some of the country's exports may be produced from imported
paper (although the largest supplier is Indonesia, another high risk country) (UN COMTRADE
2013). Thus the proportion assumed here is estimated to range from a possible low of 30%
to a high of 90%.
% displacing forest
0%55%82.5%
% illegal
0%43.4%86.7%
No suitable quantitative data on which to base estimates. Mid-point estimate assumes that
the same proportion applies as applies to oil palm plantations (55%see above). High end
assumes 150% of that percentage (i.e., 82.5%).
See justification for deforestation analysis, above.
55
FIGURE 12
Papua New Guinea Log Exports from Selective Harvesting and Conversion, 2005 to 2012
100%
80%
60%
40%
20%
12
20
11
20
10
20
09
20
08
20
07
20
06
20
20
05
0%
Forest Conversion
Source: SGS log export monitoring annual reports, analyzed by the author. The SGS log monitoring reports break down annual
exports based on the concession or license of harvest. Exports classified as conversion above originated from SABL-licensed areas
issued Forest Clearance Authorities by the PNG Forest Authority.
53
56
L ogs from land conversion for palm oil being loaded on a ship bound for China,
Pomio, Papua New Guinea Paul Hilton / Greenpeace
57
CASE STUDY 3
Independent Timber & Stevedoring (PNG) Ltd, Papua New Guinea
By far the largest controversial Special Agricultural Business Lease (SABL) issued over forestland in PNG
was in relation to a project implemented by Independent Timber & Stevedoring (PNG) Ltd (IT&S). It is
also one of the most egregious in terms of documented illegalities and irregularities. Initially a project
to build a road, encompassing just 2,400 ha of forest, the project ballooned in size to cover more than 2
Mha (Mousseau 2013). Had it gone ahead in full, the project would have been the largest tropical logging
project in the world, and could potentially have doubled global tropical timber production and exports.54
The Parliamentary Commission of Inquiry uncovered numerous irregularities relating to the issuance of the
IT&S SABLs. The legally required consultation with local landowners was found to have been inadequate,
and the leases based on counterfeit land registration. One landowner representative told the Inquiry that
the signature under his name on one of the official documents was not his. The land investigation and
Environmental Impact Assessment were not performed as required by law. The company also did not hold
the Forest Industry Participant Certificate needed to apply for a Timber Permit or Forest Clearance Authority.
The Inquiry heard how IT&S had hijacked the approval process, including preparing official documents that
should have been prepared by the government. The Provisional Lands Officer who approved the leases
claimed that he had been misled by IT&S about what he was signing (Mousseau 2013; Mirou 2013).
The Inquiry concluded that the company had conducted unlawful and unethical actions, while there
was also evidence of malpractice by various officials (ibid.). In July 2014, three SABL licenses covering
1.25 Mha of the IT&S project were among those that were ordered to be cancelled, following the
recommendations of the Commission of Inquiry (The National (PNG) 2014).
Estimated by the author. Assuming a very conservative estimate of 100 m3 of merchantable timber per hectare, the project
could potentially produce 200 million m3 of logs. Current global tropical timber exports (primary products) are approximately 44
million m3 in roundwood equivalent (trade data as analyzed by James Hewitt for Forest Trends).
54
58
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
10% Shearman et al. (2008), examining the period 1972 to 2002, found that commercial
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
90% A 2013 Parliamentary Inquiry found that 90% of the leases issued for clearing forest for
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
100% All commercial agro-conversion is export-oriented. 100% of palm oil production is exported
agriculture was only a minor driver of deforestation. Given the massive expansion of
agricultural conversion licenses (see text), it is likely this may have changed, especially since
2007. For this study, a conservative overall average of 10% is assumed for the 2000 to 2012
reference period.
agriculture during the previous decade were illegally issued (Pacific News Agency 2013;
Numapo 2013; Mirou 2013).
COMMODITY ANALYSIS
Tropical Timber
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest clearance
illegal
30% Log export monitoring reports (SGS PNG 2012) analyzed by the author (see text).
59
Almost all of the soy produced in Argentina and Paraguay is exported, and the European Union is the largest
destination for exports from both countries (see Table 11). Argentina typically exports between 10 and 20
percent of beef production, though in 2006 only 6 percent was exported due to trade restrictions stemming
from an outbreak of foot and mouth disease.55 The EU was the largest destination for Argentine beef exports in
2012, followed by Chile, China, and Israel.56 Paraguay exported 60 percent of its beef production in 2012,57 with
70 percent of exports destined for Russia and the rest mostly to other Latin American countries.58 There is no
information available on the proportion of the timber that is produced during conversion of forests for agriculture
in either country, nor how much is exported, nor the proportion this represents of overall timber production.
TABLE 11
Soy Production in and Exports from Argentina and Paraguay, 2012
Country
Soy production
(tonnes, million)
% of soy exported
Main destinations
Argentina
48.5
92%
Paraguay
8.4
94%
Calculated from figures (in carcass weight equivalent) from USDA Foreign Agricultural Service, Livestock & Products Annuals for
Argentina for 2006 to 2013.
56
Based on weight, calculated from customs data for 2012 reported to UN COMTRADE. Hong Kong is included as part of China.
57
Calculated from figures (in carcass weight equivalent) from USDA Foreign Agricultural Service, Livestock & Products Annual 2013
Paraguay.
58
Based on weight, calculated from customs data for 2012 reported to UN COMTRADE. Hong Kong is included as part of China.
55
60
Illegal deforestation for soy is common in Paraguay, where soy production is by far the largest recent driver of
deforestation (Dros 2004). A 2004 total ban on forest conversion in the eastern part of the country (where only
5 percent of the original forest remains) has been regularly violated, especially in districts along the border with
Brazil, with land being converted for pasture or agriculture (Portal Paraguayo de Noticias (PPN) 2009). WWF
Paraguay (2013) recently published satellite images showing more than 12,000 ha were illegally deforested
between 2010 and 2013 for a single ranch in the Department of San Pedro. In Teixeira, illegal deforestation is
now occurring in protected areas, nature reserves, and parks in both the Upper Parana Atlantic Forest (on the
Brazilian border) and the Chaco biosphere reserve in the north of the country (America Economia 2013).
Soy expansion elsewhere has displaced livestock producers into the forests of the Chaco, where illegal conversion
is widespread (ibid.). In 2012, Paraguayan authorities confirmed that a cattle-ranch owned by a major Spanish
conglomerate had been found to have illegally cleared forest. NGOs claim the forest concerned is inhabited
by a group of un-contacted Ayoreos Indigenous Peoples (Survival International 2012). In 2013, NGOs alleged
that satellite images showed another company illegally clearing for cattle pasture in the area, and called for a
boycott of Paraguayan beef exports (Lainformacion.com 2013). According to local WWF officials, compliance
with environmental laws in Paraguay is poor or non-existent (America Economia 2013).
Estimate
Justification
COMMODITY ANALYSIS
Soy
% of area of soy in 2012
which displaced forest
% of soy deforestation up
to 2012 which was illegal
9% Between 1995 and 2005, one-fifth of all soy expansion of Argentina took place in the northern,
forested states, of which 40% (1,135,595 ha) was at the expense of forests (Grieg-Gran et al.
2007; Table 4, p.77). Thus, at least 8% of all new soy planted in Argentina during this period
was on plantations that caused deforestation. (The study also found that the proportion of
planting in the forested north was increasing (to 30% between 2000 and 2005), suggesting that
more than 12% of new soy planned across the entire country may be at the expense of forests).
30%75% The only quantitative data is from Salta province (the province with the greatest area of
(mid 52.5%) deforestation, where soy is the principal driver (Seghezzo et al. 2011)). In that province,
official data show that from July 2009 to June 2011, 30% of all deforestation occurred
in areas zoned as protected in the legally approved forest zoning map (calculated in
Greenpeace 2013d, pages 7-8). This figure only assesses one form of illegality and
one small time period, however. In addition, between December 2007 and July 2009,
all deforestation in Salta was illegal, because federal law in December 2007 placed a
moratorium on conversion until an approved forest land use plan had been produced, and
Salta did not produce one until July 2009 (see text). Nine provinces had still not produced
such a plan by March 2013 (SAyDS 2013), making all deforestation in those provinces
since 2008 illegal. Salta's governor has admitted that up to the end of 2007, there was a
"festival" of illegal forest clearance authorizations in the province.
17% As of 2002, 62% of Argentina's cattle stock was in the Pampas, 14% in semi-arid regions, 2% in
Patagonia and 22% in the Chaco region (Grieg-Gran et al. 2007). Of these regions, only the Chaco
was originally forested. For this study, it is assumed that 75% of the cattle from the Chaco are
being reared on land that displaced forest (given that the whole region was originally forested).
61
TABLE 13
Deforestation and Commodity AnalysisParaguay
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
79% Of the 2.5 Mha of deforestation, 58% was in East Paraguay (where 40% was driven by
livestock and 60% by soy) and 42% in the Chaco (where cattle ranching is the most important
driver of deforestation, fire the third, and advance of agriculture the sixth) (Republic of
Paraguay 2008). Assigning percentages to the first, third, and sixth most important drivers
following Hosonuma et al. (2012) suggests that 50% of Chaco deforestation was due to one
of these three, giving an overall estimate that (100% x 58%) + (50% x 42%) = 79% due to
commercial agriculture. On the other hand, Grieg-Gran et al. (2007) found that during 20002005, 11% of deforestation was due to cattle-ranching, and also concluded that of an average
of 179,000 ha of deforestation per year during that time, 124,000 ha was due to soy (69%).
0%42.3%84.5% Mid-point assumes the problem is 50% of the measured average of Brazil and Bolivia;
high-end assumes it is equal to their average. The mid-point is supported by the fact that
according to local WWF officials, compliance with environmental laws in Paraguay is "poor or
non-existent" (America Economia, 2013), and also by plentiful anecdotal data on illegalities
in conversion of forests (see text).
80% 60% of beef and 94% of soy were exported in 2012 (USDA FAS 2013); it is assumed that
these proportions have remained static over the course of the reference period. A 60/40 split
in illegal agro-deforestation is assumed between soy and beef, based on the proportions of
total deforestation attributed to each by the Paraguayan government (Republic of Paraguay
2008), and in the absence of evidence suggesting that deforestation for each commodity
is more or less likely to be illegal. The final overall export percentage is calculated from the
above as follows: (60% x 40%) + (94% x 60%) = 80%.
COMMODITY ANALYSIS
Soy
% of area of soy
in 2012 which
displaced forest
% of soy deforestation up
to 2012 which was illegal
71% Grieg-Gran et al. (2007) concluded that 100% of soy expansion between 1996 and 2000
involved direct or indirect forest clearance, while 80% of soy expansion during 2001-2005
involved such clearance (based on a very substantial reduction in 2005, as a result of the
zero deforestation law implemented for the east of the country the previous year). In total,
the authors estimate that 736,000 ha of soy planting from1996 to 2005 involved forest
clearance. 960,000 ha of soy were already planted prior to 1996, and for this analysis it
is assumed that the same proportion of this involved deforestation as in the subsequent
four years (i.e., 100%). From 2006 to 2012, a further 1.03 Mha of soy expansion occurred
(FAOSTAT). It is conservatively assumed that a lower proportion (40% of this new planting
occurred at the expense of forest (the mid-point between the previous rate of 80% and zero);
while the existence of the zero deforestation law does imply a substantially lower proportion
than previously recorded, the high deforestation figures for Paraguay (Hansen et al. 2013)
post-2005 and the evidence of poor compliance with the ban (see text) argue against a
higher proportion than that assumed. In total, these assumptions give a figure of (960,000
ha x 100%) + 760,000 ha + (1.03 Mha x 40%) / 3 Mha = 71%.
62
0%48%79% Mid-point is average of those countries from the same region (Brazil and Argentina) for
which point estimates were possible. High-end is the highest estimated figure for a country
from the same region.
63
30 percent forest coverage provided by the Law and had constructed roads and a private airport without the
authorization of the competent authorities and without an adequately approved environmental impact study.
He also claimed that the owner of a second Grupo Romero estate, Palmas del Oriente, had failed to comply
with the terms of its Environmental Impact Assessment, and logged the forest in less than five months instead
of doing it gradually over three years (CEPES 2010).
Governance has been described as virtually non-existent in the Bolivian Amazon, where deforestation and
agro-conversion are concentrated; corruption is also said to be rampant (Mongabay 2013a). This has led to
widespread illegal conversion, even within National Parks (Bolivian Thoughts 2011).62 Bolivias environmental
police lack the advanced tools for detecting illegal deforestation available in neighboring Brazil, and are also
severely understaffed and underfunded (ibid.). According to the Regulatory Agency for the Social Control of
Forests and Lands, 3.3 Mha of forest were illegally deforested in Bolivia between 1996 and 2009 (Urioste 2013),
or an average of 0.25 Mha/year. Recently published satellite image analysis, on the other hand, shows that
Bolivias total average annual forest loss between 2000 and 2012 was around the same figure.63 This suggests
that almost all deforestation in Bolivia in the last 10 to 15 years has been illegal. Given that soy and cattle
ranching are considered to have been responsible for the vast majority of deforestation in the country during
this period, this also implies that almost all deforestation for these purposes during the last decade has been
illegal. In light of this, the Bolivian governmentunder pressure from the agribusiness lobbyrecently passed
a land use law that will enable landowners who illegally deforested land prior to 2011 to pay nominal fines in
order to legalize their farms (Mongabay 2013a).
There is little information on the nature and extent of illegality in conversion of tropical forests for commercial
agriculture in Colombia. However, given the poor general forest governance situation (it has been estimated
that 42 percent of Colombian timber production is illegal) (World Bank 2006), it is likely that the country suffers
similar problems as those documented elsewhere in Latin America. All of the deforestation for coca production
is illegal.
Analysis for this study of recent global high-resolution deforestation maps appears to confirm large scale illegal conversion in this
protected area.
63
Calculated from total deforestation in square kilometres over the 12 year period given in Hansen et al. 2013, Table S2.
62
64
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
66% Small-scale agriculture and cattle ranching are responsible for 75% of deforestation,
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
0%42.3%84.5% Mid-point assumes the problem is 50% of the measured average of Brazil and Bolivia; high-
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
0%49%74% Mid-point is average of the four other countries in Latin America for which specific estimates
65
TABLE 15
Deforestation and Commodity AnalysisBolivia
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
75% Agriculture (mainly large-scale for soy and other industrial crops) is responsible for 75% of
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
90% According to the Regulatory Agency for the Social Control of Forests and Lands, 3.3 Mha
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
of forest were illegally deforested in Bolivia between 1996 and 2009 (Urioste 2013), or an
average of 0.25 Mha/year. Recently published satellite image analysis shows that Bolivia's
total average annual forest loss between 2000 and 2012 was around the same figure
(Hansen et al. 2013). Together, these suggest that almost all deforestation in Bolivia in the
last 10 to 15 years has been illegal. Given that soy and cattle ranching are considered to
have been responsible for the vast majority of deforestation in the country during this period,
this would also imply that almost all deforestation for these purposes during the last decade
has been illegal.
56%75% R-PIN (Plurinational State of Bolivia 2008) states that 75% of deforestation is for soy
and other industrial crops; Hecht (2005) reports wheat and sunflower as the other main
industrial plantation crops; FAOSTAT (2012) data for areas planted with these three crops
show 75% of the total area is soy. Seventy-five percent of soy is exported (USDA FAS
2013). Low-end assumes 0% of wheat and sunflower is exported, giving overall total export
percentage of 75% x 75% = 56%. High-end assumes the proportion of these other crops
exported is the same as for soy, resulting in an overall estimate of 75%.
COMMODITY ANALYSIS
Soy
% of area of soy in
2012 which displaced
forest
% of soy deforestation up
to 2012 which was illegal
66
45%100% FAOSTAT data show that soy represented 34% of the total area of crops in Bolivia in 2012,
while Urioste (2013) shows that almost all of this is in Santa Cruz. R-PIN (Plurinational
State of Bolivia 2008) states that 75% of total deforestation is said to be attributed to
crops. Analysis of Hansen et al. (2013) data gives 1.97 Mha loss in Sta Cruz from 2001
to 2012. This results in an estimate of 1.97 Mha x 75% x 34% = 0.5 Mha of soy having
displaced forests. This compares with the total planted area of soy of 1.1 Mha in 2012
(FAOSTAT), and total growth of the planted area of soy of 0.47 Mha between 2000 and
2012 (ibid.). If it is assumed that the same percentage of soy planted prior to 2000
displaced forest, then this implies that 100% of soy displaces forest (as 0.5 Mha > 0.47
Mha), whereas if it is assumed that none of the soy planted prior to 2000 displaced forest, it
implies that 45% (0.5/1.1 Mha) displaced forest.
TABLE 16
Deforestation and Commodity AnalysisColumbia
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
75% In Colombia, 75% of deforestation is due to expansion of the agricultural frontier; more
% of 2000 to 2012
deforestation due to
commercial agriculture
than a third of forest cleared between 2000 and 2005 was converted to cattle pasture alone
(Government of Colombia 2011).
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
0%42.3%84.5% Mid-point assumes the problem is 50% of the measured average of Brazil & Bolivia; high-
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
20% Assume 70% of illegal agro-deforestation is for beef (based on proportions of overall agro-
deforestation during 2000-2010 attributed to cattle (Nepstad et al. 2013, Table 3.4)), with
an average of 15% exported (USDA FAS reports 2000 to 2013), and the remainder for palm
oil and sugar, with 30% exported (rough average between 25% of palm oil exported and
37% of sugar; proportions calculated from production and export data ( FAOSTAT 2013)). So
the overall figure is (70% x 15%) + (30% x 30%) = 20%.
COMMODITY ANALYSIS
Leather
% of area of cattle
in 2012 which
displaced forest
% of cattle deforestation
up to 2012 which
was illegal
0%48%79% Mid-point is average of those countries from the same region (Brazil and Argentina) for
which point estimates were possible. High-end is the highest estimated figure for a country
from the same region.
reported that leases covering 1.4 Mha had been issued since March 2012 (Woods 2013).64 The main hotspots for
new agricultural plantation developments are also two of the most heavily forested parts of the country: Kachin
State (a target for biofuel crop and rubber plantations) and Tanintharyi Region (mostly palm oil and rubber
investments) (ibid.). The conversion of forest to agriculture is also considered the major cause of deforestation
in Thailand (Department of National Parks, Wildlife and Plant Conservation 2013), though there has been little
detailed analysis of the extent to which this is due to large-scale commercial agriculture or associated with
exports.
64
65
68
CASE STUDY 4
Hoang Anh Gai Lai (HAGL) Rubber Plantation, Cambodia
An investigation by the Global Witness, published in May 2013 (Global Witness 2013b), provides evidence
of a range of illegalities relating to ELCs issued to the Vietnamese company Hoang Anh Gai Lai (HAGL)
in Cambodia. The report notes that the company has been issued with ELCs covering almost 50,000
ha, five times the maximum allowed under Cambodian law to be issued to one company. In addition,
official documents show that 28,000 ha of these concessions were issued for areas of forest inside a
Wildlife Sanctuary and National Park, in contravention of legislation. Global Witness was also unable
to find any evidence of the company having conducted Environmental Impact Assessments (EIAs) for
any of its ELCs, as required. It also found that the company had illegally cleared intact forest (in breach
of its concession contract), and harvested rosewood and other protected timber species. The company
had also overlooked legal requirements for consultations with local people affected by its concessions.
Incredibly, the company admitted to operating illegally in an official public filing relating to a market
listing. Its submission stated that certain of our existing projects are being developed without necessary
government approvals [sic] and that operation of certain projects are not fully in compliance with
applicable laws and regulations. Villagers protesting the activities of the company on their land had been
fired on with live rounds by military police, according to eyewitnesses. HAGL denied the Global Witness
allegations and claimed that the public admission of illegality was due to a translation error.
In June 2013, shortly after the Global Witness report was published, HAGL committed to implement a fourmonth freeze on all clearing and planting on its concessions, and to discuss with and address the issues
faced by local people. However, subsequent investigations in July and August 2013 by Global Witness
showed that HAGL had failed to abide by its promises (Global Witness 2013c). In April 2014 HAGL again
declared that it had suspended forest clearing at three of its seven rubber plantations in Cambodia, this
time following a request from the IFC (Peter and Pheap 2014). The IFC, which has been helping fund the
developments, took action in response to a formal complaint filed by local communities alleging that HAGL
had breached IFC lending safeguards, including (among other things) by breaking Cambodian laws. IFC has
since begun a dispute resolution process between the company and the local community (Compliance
Advisor Ombudsman 2014).
69
TABLE 17
Deforestation AnalysisCambodia
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
40%80% The "main" driver of deforestation is large-scale agricultural plantations under controversial
ELCs (Government of Cambodia 2011). For the purposes of this study, it is assumed that a
single "main" driver represents 40%-80% of the total.
90% Of 117 concessions listed on a government website in 2012, only three were recorded
as having had impact assessments completed, and all of these were carried out after the
concession was issued (Subedi 2012).
0%72%100% Mid-point is the average of the ten other countries for which specific estimates were
produced. High-end is 150% of that figure.
Neighboring Laos has also seen a vast area of forested land licensed for agricultural plantations in recent years,
and these leases have also allegedly involved numerous breaches of regulations. At least 1.1 Mha have been
licensed, with rubber plantations estimated to account for around one-third of this area. Local laws state that
only degraded forests may be allocated, yet many plantation licenses have been issued for areas of intact forest.
As in Cambodia, some concessions have even been issued that overlap with National Parks. Most concessions
have been issued in contravention of a 2007 ban on individual concessions greater than 100 ha. Meanwhile,
regulations requiring prior consultations with affected communities and actions to minimize environmental risk
are also being ignored (Global Witness 2013b).
Many of the companies involved in developing new rubber plantations of dubious legality in Cambodia and
Laos are registered in Vietnam, where illegalities in rubber plantation development are also reported to be
common. To and Tran (2014) documented many instances of abuse and concluded that conversion of forest to
rubber plantations takes place on a massive scale with little control or even without control at all. There is little
information available related to illegalities in the conversion of forests elsewhere in the Mekong Basin, though
there are known to be substantial problems with broader forest governance. In Myanmar, for instance, a recent
study found that 72 percent of log exports between 2000 and 2013 had been illegal (EIA 2014).
70
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
73% For 2012 to 2020, approximately 51% of deforestation is projected to be driven by large
concessions (including timber and rubber) and a further 22% by smallholder cash crop
production (Lao PDR Department of Forestry 2010). This study assumes that these projections
reflect trends from the previous 12 years.
0%43.4%86.7% Mid-point assumes the problem is 50% of the measured average of Indonesia, Cambodia
and PNG; high-end assumes it is equal to their average.
0%72%100% Mid-point is the average of the ten other countries for which specific estimates were
produced. High-end is 150% of that figure.
COMMODITY ANALYSIS
Tropical Timber
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest clearance
illegal
0%55%75% Mid-point is based on the average of five equivalent countries in the region for which point
estimates exist; high point is calculated as 150% of the mid-point.
TABLE 19
Deforestation and Commodity AnalysisMyanmar
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
33% There are no published quantifications, but agro-conversion is considered to be one of three
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
0%43.4%86.7% Mid-point assumes the problem is 50% of the measured average of Indonesia, Cambodia
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
10% Most agro-conversion areas are not yet planted or not yet mature, but UN COMTRADE
data suggest that exports are estimated to be a maximum of 10% of total illegal agrodeforestation.
COMMODITY ANALYSIS
Tropical Timber
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest clearance
illegal
72
50% It has been estimated that as much as half of all commercial timber production may be
coming from such conversion (Woods and Canby 2011).
0%43.4%86.7% See justification in deforestation analysis, above. For tropical timber, the mid-point estimate
is further supported by the poor general governance situation within the country, the fact
that most forest land conversion for commercial agriculture is taking place in areas of ethnic
conflict (Woods 2013), and recent evidence of widespread corruption and criminality in the
logging sector, with 72% of log exports during 2000 to 2013 likely illegal (EIA 2014).
TABLE 20
Deforestation AnalysisVietnam
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
% of illegal commercial
agricultural deforestation
2000 to 2012 embodied
in exports
40%80% Industrial export crops such as coffee, rubber, and cashew are the "principal" drivers of
0%43.4%86.7% Mid-point assumes the problem is 50% of the measured average of Indonesia, Cambodia,
and PNG; high-end assumes it is equal to their average.
90% The two most important commercial crops driving deforestation are rubber and coffee
(Socialist Republic of Vietnam 2011). Ninety percent of natural rubber production is
exported (Vietrade 2011); ninety-four percent of coffee is exported (IPSOS 2013).
ITTO 2005, p. 87 states that 90% of production as of 2005 was selective high-grading of forests in the domaine rural.
66
73
TABLE 21
Commodity AnalysisGhana
Factor
Estimate
Justification
COMMODITY ANALYSIS
TROPICAL TIMBER
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest
clearance illegal
74
0%2% Salvage permits were issued for a total of 38,000 trees in Ghana in 2012 (Global Witness
2013d); assuming an average of 2 m3 per tree, this would represent 76,000 m3 of timber
volume, compared with Ghana's total round wood equivalent exports of 0.5 million m3 and
domestic demand of 4 million m3 (in 2006). This suggests conversion timber represents only a
very small proportion of exports (less than 2%).
0%42.9%85.8% Mid-point assumes 50% of the measured average of Brazil, Bolivia, Indonesia, Cambodia,
and PNG; high-end assumes it is equal to their average. Mid-point is supported by previous
studies that have estimated that 59-65% of all timber production in Ghana is illegal
(Lawson and MacFaul 2010).
TABLE 22
Commodity AnalysisCte dIvoire
Factor
Estimate
Justification
COMMODITY ANALYSIS
TROPICAL TIMBER
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest
clearance illegal
0%42.9%85.8% Mid-point assumes 50% of the measured average of Brazil, Bolivia, Indonesia, Cambodia,
and PNG; high-end assumes it is equal to their average.
Only includes concluded agreements which have not since been cancelled or abandoned.
67
75
76
CASE STUDY 5
Bioshape Jatropha Plantation, Tanzania
One of the largest planned agricultural plantation projects in Tanzania in recent years was a 34,000 to
80,000 ha jatropha plantation to be developed by Dutch company Bioshape in an area of East African
Coastal Forest near the town of Kilwa on the coast of southern Tanzania. In 2009, the NGO Resource
Extraction Monitoring (REM) worked with the Tanzanian authorities to examine the legality of the
development. By that time, Bioshape had cleared and planted a 70 ha trial plot. Government officials
confirmed to REM that Bioshape had cleared the area before all required procedures had been completed
and payments made. Local officials also told REM that Bioshape were already cutting timber outside the
trial plot, which central government officials claimed was illegal because the full forest inventory for the
plantation had not yet been produced. In its official report, REM also highlighted concerns raised by NGOs
regarding the legality of the Environmental Impact Assessment (EIA) for the project. Two of the three
persons listed as authors on the EIA did not in fact contribute text, see a copy prior to publication, or
agree to be listed as authors. The inclusion of these well-respected scientists names on the report may
have influenced the decision to allow the project to go ahead. REM noted that Tanzanian law makes it
an offense to misrepresent the authorship of EIAs. REM noted that Bioshape had the largest and busiest
sawmill in Southern Tanzania at the time and calculated that, if the entire plantation area was developed,
the company was likely to become the largest logging company in the country (REM/HTSPE 2009).
Allegations were also made that regulations had been breached in the manner in which the rights to
the land were obtained from local villagers by the local government and handed over to the company.
Though villagers signed relevant documentation, later research showed that they did not fully understand
the implications of what was being signed. One villager claimed that when they eventually obtained a
copy of the agreement they had signed, they found some of the key terms did not match what had been
agreed (Oxfam 2013).
As with many other biofuel projects of the period, the Bioshape plantation never came to fruition. After
its energy-company backers pulled out, Bioshape went bankrupt in June 2010 (Massay 2012). The villages
affected remain barred from the land, yet never saw the benefits they were promised. With help from
NGOs, they have brought formal complaints to the local and national authorities, demanding that the lease
is cancelled and their land returned (Oxfam 2013).
77
TABLE 23
Deforestation AnalysisMozambique
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
% of illegal commercial
agricultural
deforestation 2000 to
2012 embodied
in exports
78
0%35%53% Mid-point is average for Africa from Hosonuma et al. 2012; high-end is 150% of that average.
0%42.9%85.8% Mid-point assumes the problem is 50% of the measured average of Brazil, Bolivia,
Indonesia, Cambodia, and PNG; high-end assumes it is equal to their average.
0%51%77% Mid-point is average of the ten other countries for which specific estimates were produced.
High-end is 150% of that figure.
TABLE 24
Deforestation AnalysisTanzania
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
% of illegal commercial
agricultural
deforestation 2000 to
2012 embodied
in exports
0%35%53% Mid-point is average for Africa from Hosonuma et al. 2012; high-end is 150% of that average.
0%42.9%85.8% Mid-point assumes the problem is 50% of the measured average of Brazil, Bolivia,
Indonesia, Cambodia, and PNG; high-end assumes it is equal to their average.
0%51%77% Mid-point is average of the ten other countries for which specific estimates were produced.
High-end is 150% of that figure.
Recently released data show that Latin America lost 4.3 percent of its tropical rainforests between 2000 and 2012, while Asia
lost 11 percent. During the same period, Africa lost just 2.8 percent (see Hansen et al. 2013; supporting material, Table S2).
68
79
FIGURE 13
Estimated Impact of Three New Oil Palm Plantations (already broken ground) on Annual
Deforestation in the Congo Basin, from 201575
50,000
40,000
30,000
20,000
10,000
Re
Co p. o
ng f
o
n
bo
Ga
Ca
me
ro
on
Recent average annual deforestation calculated from figures for total deforestation in each country 2000 to 2012, measured
by Hansen et al. 2013. Projected annual deforestation assumes baseline average from 2000 to 2012, plus projected annual
deforestation from the specified oil palm development. The projected annual deforestation for each oil palm development is
the total area of planned planting (Rainforest Foundation UK 2013a; Herakles corrected to reflect reduction in license area (see
Section 2.6)), divided by the period over which the company concerned is expected to complete development. Herakles has
stated its intention to complete its development in Cameroon over a period of four years, while Olam has stated it expects to
clear and plant its plantation in Gabon over six years (Rainforest Foundation UK 2013a). It is assumed that Atama will be aiming
for a similar rate of development (six years) for its plantation in Republic of Congo.
69
80
In Gabon, international agro-commodity giant Olam also broke ground on a 300,000 ha oil palm and rubber
development in 2012. In the first phase of the project, Olam is planning to plant 50,000 ha of oil palm over a
period of four to five years (Olam 2013), plus 28,000 ha of rubber over six years (Olam 2012). Though Olam
has committed to not convert high conservation value (HCV) forests, the areas chosen for development so
far are almost entirely forested and, though not classified as HCV, nevertheless contain significant timber and
carbon value (Rainforest Foundation UK 2013a). Olam cleared and planted around 3,000 ha for oil palm in
2012;70 at an estimated rate of 45-90 m3/ha of saleable timber, this may have yielded 130,000-260,000 m3 of
logs, representing 6 to 13 percent of total national production in the formal sector of 1.7 million m3 that year.71
If clearance and planting accelerates to planned target rates, Olam could be producing as much as 0.75-1.5
million m3 of logs per year in 2014 and 2015.72
In Republic of Congo, clearance also began in 2012 on a 180,000 ha oil palm plantation being developed in
an area of pristine primary forest. When an official inspection team visited the first area of conversion in
October 2012, it found the company had cleared around 120 ha and produced more than 15,000 m3 of logs
(125 m3/ha) (DDEFS 2012). At that rate, the plantation could produce a total of more than 22 million m3 of
tropical conversion timberalmost 15 times the countrys current annual harvest from selective logging. If
the concession is developed on as rapid a time frame as those in Gabon and Cameroon, three-quarters of the
countrys tropical timber production could soon be coming from conversion, as a result of just this one project.
Recent maps of Republic of Congo from the World Resources Institutes Global Forest Watch show additional
new oil palm plantation licenses in forest areas, which if realized will increase conversion timber production
even further.
Olam recorded planting 1,370 ha from July 2011 to June 2012, and a further 4,448 ha from July 2012 to June 2013. Assuming an
even rate of planting, this suggests a total planting of 2,909 ha during calendar year (drawn from data in Olams 2012 and 2013
annual reports, available at http://olamgroup.com/investor-relations/financial-information/annual-reports).
71
DGEF data on OFAC database, accessed July 11, 2014.
72
Combined planned planting rates for oil palm and rubber are 17,166 ha/year (50,000 ha/4 years + 28,000 ha/6 years). Multiplying
by 45-90 m3 of timber per hectare gives 772,470 m31,544,940 m3.
70
81
FIGURE 14
Projected Growth in the Proportion of Tropical Timber Production in Republic of Congo,
Gabon, and Cameroon Originating from Forest Conversion, 2011 to 2014
Republic
of Congo
Gabon
Cameroon
100%
100%
100%
2011
2014
(projected)
30%
35%
70%
Conversion Timber
40%
65%
60%
Selective Logging
Exports
Nearly all of the industrial tropical timber production in the Congo Basin is destined for export, and the same is
likely to be true of conversion timber produced from large-scale land conversion for agriculture (de Wasseige et
al. 2010). None of the large new oil palm developments in the region have yet begun production, so it is unclear
what proportion may be destined for export. One of the largest developments has stated that it expects most
production to be exported to the EU, however (Rainforest Foundation UK 2013a).
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82
The largest forest conversion project in the Congo Basin is the oil palm concession issued to Malaysian company
Atama Plantation in the Republic of Congo. The agreement covers an area of 470,000 ha, of which at least
180,000 ha is expected to be planted. The area is almost entirely made up of primary rainforest, home to
numerous endangered species, including chimpanzees, gorillas, and forest elephants (ibid.).
In October 2012, an inspection by the provincial forestry office of forest clearance in the first 5,000 ha zone
of the concession uncovered numerous breaches of regulations. More than 350 trees had been cut but not
recorded in official felling reports. Records had been illegally altered, and there was evidence that illegal logs
are possibly being laundered into supply chains by repeated use of the same log numbers. The inspection team
concluded that Atama was in breach of its forest clearance license and issued an official infraction notice (DDEFS
2012). Two months later, a joint investigation by the forest service and the official Independent Observer of
Forest Law Enforcement and Governance (OI-FLEG) uncovered further illegalities. The Observer found that
Atama had illegally cleared forests for roads for a distance of more than 2 km outside the boundaries of the
licensed area, and had also sub-contracted a company to carry out timber harvesting that did not have the
proper registration. The Observer could also find no evidence of any Environmental Impact Assessment having
been completed for the Atama oil palm plantation project, as required by law. The Observer recommended that
the operations should be suspended and that the government should prosecute the company for breach of its
license (ibid.).
Though it will be some years before Atamas plantation reaches maturity and begins production and export of
palm oil, it will represent almost 100 percent of the countrys exports. All of those exports will be from land
cleared illegally of natural forest. Long before that, the project will result in a large percentage of log exports
from the Republic of Congo being associated with illegal agro-conversion (see Section 1.3.2).
No large new agro-conversion projects have yet broken ground in the Democratic Republic of Congo. However,
questions have already been raised regarding the issuance of one new oil palm concession in Bas-Congo
province, which has yet to begin operations. A study by the Forest Peoples Programme of the 10,000 ha
concession contract issued to Congo Oil & Derivatives SARL in Muanda territory concluded that it is in blatant
violation of the Forest Code. Among other things, the concession is located within two Forest Reserves, which
are only supposed to be used for non-commercial purposes; it was issued for 40 years, while the law only allows
for terms of 25 years; there is no management plan or agreement with local communities; and the researchers
could also find no evidence of any EIA having been conducted (Forest Peoples Programme 2013).
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CASE STUDY 6
Herakles Oil Palm Plantation, Cameroon
In 2009, the Cameroonian government issued a lease for an oil palm plantation covering 73,000 ha in
the southwest of the country. The lease was issued to Sustainable Oils Cameroon (SGSOC), now owned
by US company Herakles Farms. Almost the entire site is forested, and it is surrounded by a number of
important protected areas, including globally significant Korup National Park. Surveys have confirmed
that the area is home to populations of chimpanzees and forest elephants, among many other threatened
species (Waltert 2013). Herakles plans to plant 60,000 ha of oil palm over a period of four years, and broke
ground in 2011. Evidence of a whole range of breaches of regulations in the licensing and operation of the
Herakles plantation has come to light in the years since.
In February 2012, a local court found that the company began clear-felling forest before receiving its
environmental permit. A forestry department inspection in April 2012 found that the company had
breached regulations, and this was confirmed in a follow-up visit alongside the official Independent
Observer of Forest Law Enforcement and Governance in May 2012, which found that the company
had cleared forest which had not yet been excised from the Permanent Forest Estate, and resulted in
the issuance of a notification primitive to pay $48,000 in fines and damages. In addition, local nongovernmental organization Centre pour lEnvironnement et le Dveloppement (CED) claims that the
lease agreement itself is in breach of the law, since it did not obtain the required Presidential approval
and exceeds the maximum of five years allowed (Rainforest Foundation UK 2013a). Herakles operations
were briefly suspended by the Cameroonian government in May 2013, yet Greenpeace has documented
log markings which suggest that operations continued illegally during the suspension (Greenpeace
2013e). Greenpeace also claims to have evidence which suggests that Herakles employees may have
used bribery to win support for its project (Greenpeace/Oakland Institute 2013a). In November 2013, the
Cameroonian government issued a provisional land lease to Herakles for a reduced area of 20,000 ha;
NGOs alleged that this confirmed that the plantation had previously been operating without all necessary
permits (Greenpeace/Oakland Institute 2013b). In January 2014, Cameroons Minister of Forests issued a
logging permit to a company called Uniprovince (controlled by Herakles via SGSOC) for 2,500 ha of land
within the Herakles concession.
Greenpeace has alleged that the issuance of the permit was in flagrant violation of Cameroons forestry
legislation, becuase it was not awarded by competitive public auction as required. During early 2014,
Uniprovince is alleged to have used this license as a cover to transport large volumes of timber that
were felled illegally between 2010 and 2013 by SGSOC, prior to the companys land lease being finalized.
Greenpeace field investigations showed that these old logs were being laundered, with log markings
being changed. (Greenpeace 2014).
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Oil Palm Nursery, Herakles Farms Plantation, Cameroon Alex Yallop / Greenpeace
TABLE 25
Deforestation AnalysisDemocratic Republic of Congo
Factor
Estimate
Justification
DEFORESTATION ANALYSIS
% of 2000 to 2012
deforestation due to
commercial agriculture
% of 2000 to 2012
deforestation for
commercial agriculture
which was illegal
% of illegal commercial
agricultural
deforestation 2000 to
2012 embodied
in exports
0%42.9%85.8% Mid-point assumes the problem is 50% of the measured average of Brazil, Bolivia,
Indonesia, Cambodia, and PNG; high-end assumes it is equal to their average.
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TABLE 26
Commodity AnalysisCameroon
Factor
Estimate
Justification
COMMODITY ANALYSIS
TROPICAL TIMBER
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
5% Though this is projected to rise in the near future, only a small proportion of Cameroon's
% of forest
clearance illegal
90%100% The only oil palm development currently known to be converting forest in Cameroon is
current tropical timber exports are assumed to originate from forest conversion, based on the
estimated clearance and timber production at the Herakles oil palm plantation in 2012
the Herakles plantation. It is alleged that all of the timber produced by this project is of
questionable legality, since there are overarching legal issues with the license. Official
government and independent monitor inspections have confirmed illegalities in the
conversion of forest for the oil palm plantation and subsequent timber production (see Case
Study 6).
TABLE 27
Commodity AnalysisGabon
Factor
Estimate
Justification
COMMODITY ANALYSIS
TROPICAL TIMBER
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest
clearance illegal
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6%13% Gabon's formal logging sector produced a total of 1.7 million m3 of logs in 2012 (OFAC
(mid-point 10%) 2014). Olam, which is developing a large new oil palm plantation in forested land in Gabon
(Rainforest Foundation 2013), cleared and planted a total of 4,448 ha in the year to June
2013 (Olam 2013), and a further 1,370 ha the previous year (Olam 2012). This suggests a
possible planting of 2,909 ha during 2012. Based on a conservative estimate of 45-90 m3
of salvageable commercial timber per hectare, this rate of clearance could potentially have
produced 130,000-260,000 m3 from that area, representing between 6% and 13% of total
national log production.
0% All of the conversion timber production and exports estimated in this analysis originate from
the Olam oil palm plantation development. There is no evidence of illegalities in relation to
this development, and thus it is assumed that all such production is legal.
TABLE 28
Commodity AnalysisRepublic of Congo
Factor
Estimate
Justification
COMMODITY ANALYSIS
TROPICAL TIMBER
% of primary
tropical timber
product production
from conversion for
commercial agriculture /
timber plantations
% of forest
clearance illegal
2% The only major known source of conversion timber for export is the Atama oil palm plantation.
Up to October 2012 it had produced 15,000 m3 of logs (DDEFS 2012); assuming the rate of
production continued at the same rate for the rest of the year would suggest an annual total of
20,000 m3. This represents approximately 2% of total roundwood equivalent exports in 2012.
80%100% The only major known source of conversion timber for export is the Atama oil palm
plantation. This has been found to be operating illegally by the official independent monitor
of forest governance (REM/CAGDF 2013; see text).
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5. DISCUSSION
The scale of illegality in the conversion of tropical forests for commercial agriculture and associated exports
including conversion timber has important implications for global efforts to reduce deforestation and
carbon emissions. At present, however, the scale of the problem is not sufficiently well understood or even
acknowledged, and the implications rarely taken on board in relevant national and international initiatives.
The following discussion examines the implications of this studys findings for existing initiatives designed to
address the broader problem of tropical deforestation, and identifies actions that producer countries, consumer
countries, and companies involved in relevant commodity product chains might take to tackle the problem of
illegal agro-conversion and associated trade.
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5. DISCUSSION
achieve this. This is one area where the experience in Brazil should not be used as a template (see Section 4.1.3
regarding recently enacted and wide-ranging amnesty).
Similarly, how current and future illegalities are dealt with will also vary across and within countries. Some
illegalities should be of higher priority than others. Not all of them should necessarily be addressed through
greater enforcement. In some cases, the solution may be to amend the relevant laws. In deciding these matters,
lessons can be learned from processes under the EUs bilateral Voluntary Partnership Agreements, where these
choices were made through a multi-stakeholder process, and helped identify which laws required amendment
or clarification. Companies that have made zero deforestation commitments have an important role to play in
encouraging and assisting in this process. They must also be willing to demand higher standards of legality from
their suppliers, and exercise greater due diligence, if they believe this is justified. Although the clarification and
improvement of the regulatory framework is essential, producer countries should not weaken environmental
and social safeguards in the name of economic development. In many countries, the legal frameworks should
in fact be strengthened to include statutory recognition of Indigenous Peoples and other local communities
customary tenure, in line with international commitments such as the UN Declaration on the Rights of
Indigenous Peoples (UN-DRIP).
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on sustainability, defined as avoiding the clearance of High Conservation Value (HCV) or High Carbon Stock (HCS)
forests, or eliminating deforestation altogether, and often encompass commitments related to land and human
rights. Many of the companies that have made such commitments are members of the Consumer Goods Forum
(CGF), a large network of consumer goods manufacturers and retailers, which has sought to drive further change
through strategic partnerships with governments, civil society, and banks, through initiatives such as the Tropical
Forest Alliance (see Box 9 for more information on existing private sector initiatives).
These voluntary efforts have made significant progress in recent years, especially in relation to palm oil with
16 percent of global production now being certified (RSPO 2014) and more than half of the commodity trade
being controlled by companies that have made zero deforestation pledges (Shankleman 2014). However, issues
of legality pose a number of major challenges.
Firstly, there are serious concerns over whether these policies and standards can effectively prevent trade
in products from illegal agro-conversion. There are issues with both the standards themselves and their
implementation. The legality criteria in these voluntary policies and certification schemes do not capture all of
the different types of common illegalities documented in this report, such as whether relevant licenses were
legally issued. Most do not sufficiently address past illegalities. Many voluntary policies and schemes also do
not include sufficiently well-designed and implemented systems for monitoring compliance with the aspects of
legality. The weakness of these monitoring systems has been regularly exposed by individual cases by certified
suppliers uncovered by third parties (Greenpeace 2013f; RSPO 2013a).
With regard to beef, the G4 Cattle Agreement in the Brazilian Amazon does not preclude purchases of
cattle from areas illegally deforested prior to 2009, except where that illegal deforestation has been
detected by the authorities. Even where detected, purchases are still permitted once fines are paid.
There is also evidence that one of the largest parties to the agreement has failed to become compliant
(see Section 4.1.3).
With regard to palm oil, almost all of the area certified by the RSPO to date is made up of plantations
that were established long before the certification process was started. RSPO certification rules
do not require any rigorous assessment of the legality or sustainability of the forest conversion
that took place in the past. Though more meaningful legality criteria do apply to new plantations
established by RSPO members, the available evidence calls into question how meaningfully these may
be applied. A comparison of RSPO data with the collation of published allegations of illegalities in
oil palm development in Indonesia (see Section 4.2.3) indicates that of the 15 plantations that filed
new planting assessment notifications by RSPO members in 2013, eight were subject to past or
current allegations of illegality. This includes two plantations in Indonesia previously confirmed by an
independent study to have cleared forest illegally (Wakker 2009),75 and two more plantations about
which complaints have been filed with RSPO alleging illegal clearance outside concession boundaries
(RSPO 2013a).76 The voluntary commitment by Wilmar, the worlds largest palm oil trader (see Box 9),
encompasses a larger proportion of global trade than the RSPO, but only applies to oil palm plantations
developed after the policy was implemented in December 2013 (Wilmar 2014)77it does not require
any checks on the legality of oil palm plantations supplying Wilmar that were planted prior to that date.
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5. DISCUSSION
With regard to pulp and paper, the zero deforestation policy of Indonesias largest producer, Asia Pulp
and Paper (APP), also only applies to future activities (APP 2013) and does not address the companys
past transgressions, which the evidence suggests are substantial (see Section 4.2.3). Though the
company claims it will no longer produce pulp made from tropical wood fiber, the plantation-grown
acacia it now uses instead is grown on land that is likely to have been illegally cleared.
In theory, standards and criteria could be improved, as could monitoring and enforcement. But even if these
were to occur for every broad initiative and individual policy, the potential of these voluntary efforts would still
be limited by their voluntary nature which will never encompass all relevant production and trade. Most of them
currently only capture a small minority of the commodity trade of concern. There will always be companies who
will not sign up. And there will always be the challenge with new entrants. The largest new oil palm plantation
in the Congo Basin, for instance, is being developed by a firm with no previous experience in the sector (see
Section 4.10). So long as some companies are able to continue producing and trading products from illegal
deforestation, they will be able to undercut the price on their more conscientious competitors, holding back
both the expansion and improvement of voluntary commitments. One of the many lessons from successful
previous efforts to tackle illegal and unsustainable timber production (see Box 10) is that voluntary certification
struggled to achieve critical mass while having to compete on price with products that were illegally sourced.
The final challenge posed by legality for voluntary private sector actions is the weak governance in many
producer countries. A lack of access to official government documents and unclear, and sometimes conflicting,
laws and regulations often make it hard for companies and their employees to establish with confidence
whether a product was produced legally or not. Ultimately, illegalities relating to commercial agriculture and
timber plantations can only be fully addressed by governments, and voluntary efforts will be held back by having
to compete with products that were illegally sourced. Recognizing this, companies involved in relevant sectors
must actively promote and support the actions by both producer and consumer governments recommended
in Chapter 6 below.
BOX 9
Private Sector Initiatives to Address Tropical Deforestation Driven by Commercial Agriculture
Certification schemes: Several multi-stakeholder roundtables have emerged at the national and
international level to coordinate efforts to ensure minimum levels of sustainability in the production
and trade of specific commodities including soy, beef, leather, and palm oil. These roundtables typically
establish standards and criteria for certifying that production is sustainable and for tracking products
through supply chains. The standards normally include a requirement for compliance with national laws,
and also preclude clearance of High Conservation Value (HCV) forests, but many continue to allow for
legal conversion of other forests. The Roundtable for Sustainable Palm Oil (RSPO) is the earliest and most
developed of these commodity-specific roundtables. RSPO certifications for sustainable palm oil now
encompass 16 percent of the worlds palm oil production (RSPO 2014). Other commodity roundtables have
made less rapid progress: the Roundtable on Responsible Soy certified 0.5 percent of global production in
2012 (Brack 2013). The Roundtable on Sustainable Beef is not seeking to establish any certification system.
Aside from those established by commodity roundtables, a number of other sustainability certification
systems have been established for relevant commodities (including soy, cocoa, and coffee). All require
compliance with national laws, though this is not their principal focus.
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BOX 9, CONT.
Private Sector Initiatives to Address Tropical Deforestation Driven by Commercial Agriculture
Individual company commitments: Many large multinational companies have decided to make their
own individual commitments to address concerns over deforestation in their supply chains. This includes
producers, traders, and buyers of relevant commodities (including soy, beef, leather, palm oil, and pulp
and paper). Some such commitments simply aim to source certain percentages of relevant goods via the
established certification schemes by certain dates. However, in recent years a number of major companies
have declared policies that extend beyond the standards set out by relevant certification schemes, and
normally seek to entirely preclude all deforestation. Among the earliest such commitments were the
soy moratorium (2006) and the G4 Cattle Agreement (2009) in Brazil (see Section 4.1). More recently,
a number of the largest producers, traders, and buyers of palm oil and tropical wood pulp have also
made zero deforestation pledges. In addition to the standards typically encompassed by certification
schemes, these pledges also preclude conversion of High Carbon Stock (HCS) forests and forests on peat
soils; in some cases they also include stronger human rights requirements. One of the most impactful
of such commitments came in December 2013, when Wilmar, the worlds largest trader of palm oil,
announced a zero deforestation policy, which would apply to both its own production and that of its
third-party suppliers. Coming in the wake of similar commitments by a number of large international palm
oil buyers (including Nestl and Unilever) and by Golden Agri Resources (one of the worlds largest palm
oil producers) during 2010 to 2012, the Wilmar commitment means that more than half of global palm
oil in trade now falls under such a policy (Shankleman 2014). In 2013, Indonesias largest pulp plantation
developer, Asia Pulp and Paper (APP) also announced a zero deforestation commitment (APP 2013). Many
large buyers of leather and paper products have also made zero deforestation commitments in recent
years. How strong these zero deforestation commitments will turn out to be depends in part on the
definition of forest. The definition of High Carbon Stock (HCS) forest remains especially open to different
interpretations. Under the strictest interpretation, only scrubland would be excluded, but individual
companies may choose to take a less broad approach. Another potential drawback is that not all of the
policies require transparency and third-party monitoring.
Other partnerships: Companies are not only scrutinizing their own operations, but also teaming up with
new partners to implement wide standards and certification at scale. In 2010, for example, the Board of
the Consumer Goods Forum (CGF), a network of consumer goods manufacturers and retailers that counts
many of the worlds largest buyers of forest-risk commodities among its members, announced a pledge to
achieve zero net deforestation by 2020, by both individual company initiatives and by working collectively
in partnership with governments and NGOs (Consumer Goods Forum 2010). In 2012, the CGF partnered
with the US government to launch the Tropical Forest Alliance (TFA), a public-private partnership in which
business, government, and civil society partners take voluntary actions to reduce the tropical deforestation
associated with the sourcing of commodities. The TFA now counts a number of other governments and
many international forest NGOs (including Forest Trends) among its members (TFA 2014). In 2014, the
CGF also reached an agreement with eight major international banks to work together to leverage the
financial sector to help achieve the goal of zero net deforestation through addressing production and
trade of relevant commodities (Banking Environment Initiative 2014).
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5. DISCUSSION
Degraded lands policies: Significant funds have been spent to promote policies to direct new commercial
agriculture onto degraded land rather than expanding into natural forests. Efforts have included mapping
and measuring degraded land, encouraging producer governments to pass laws limiting development on forest
lands, and persuading companies with concessions to voluntarily swap natural forests for degraded lands.
The potential effectiveness of this strategy is questionable given the widespread illegalities documented in
this report. Companies that ignore legal requirements will likely also ignore voluntary commitments, and are
likely to favor forested over non-forested land especially when conversion timber revenues can help offset
their development costs of establishing commodity plantations. The most effective way to drive agricultural
development away from forests is by limiting new land concessions to land that is already degraded. This would
require new government regulations, which cannot be expected to work if governments are already shown to
be unable to implement and enforce existing laws.
Financing illegal conversion through imports and development aid: The developed nations that are bankrolling
REDD+ are also undermining their own efforts by continuing to buy billions of dollars worth of beef, soy, palm oil,
and timber grown on illegally deforested land. In some cases, they are directly or indirectly financing the companies
responsible. The Norwegian Governments sovereign wealth fund, for example, had investments in a range of logging
and oil palm plantation companies, many of which which were the subject of evidence or allegations of illegal agroconversion, until it recently blacklisted them and divested (Rainforest Foundation Norway 2013). Governments and
multilateral institutions such as the World Banks International Finance Corporation also commonly provide loans
and free services to large companies involved in relevant commodity supply chains. The World Banks lending to a
93
large meat-processing company in Brazil (see Case Study 1), for example, demonstrates how weak safeguards can
result in the financing of companies processing products from illegal forest conversion.
5. DISCUSSION
already established throughout the entire supply chain (to allow product recalls to protect human health, for
example), less secondary processing and re-export, and a much larger proportion of production handled by a
small number of major companies. While regulatory arrangements in many producer countries are unclear or
conflicting, the same is true for timber and this is being gradually addressed, partly under the auspices of VPAs
and other bilateral agreements.
One unique challenge for agro-commodities is the delay between the illegal conversion and the commodity
production and export. It takes time to grow the commodities that are produced at the expense of forests, from
6 to 12 months for soy to up to 20 years for plantation wood. Assessing the legality of conversion that took place
some years before is challenging, but not impossible. Many academics and NGOs have successfully compared
archived satellite imagery with official concession maps in order to identify past illegalities in forest conversion.
Though no one expects legality of conversion that took place 100 years ago to be assessed, a cut-off date of
around 10 years is eminently feasible for all of the relevant commodities.
Though making best use of existing measures on conversion timber is an essential first step, not all tropical forests
converted for agriculture contain much valuable timber. Indeed, most conversion takes place in forests that are already
degraded to some extent. Where there has been extensive illegal selective logging, and most trees of valuable timber
species have already been extracted, it is common for conversion wood to simply be burned, buried, or piled up and
left to rot. Even where profits from conversion timber sales are helping to underwrite plantation development, the
removal of these profits alone may be insufficient to prevent the forest conversion from taking place. Ultimately
action is needed to address the demand for commodities produced at the expense of forests that were cleared
illegally. If these commodities cannot be sold, the economic rationale for the illegal conversion disappears entirely.78
BOX 10
Lessons from Efforts to Tackle Illegal Logging and Associated Trade in Timber
In addressing agro-conversion and associated commodity trade, there are many useful lessons that can be
learned from decades of experience of trying to reduce illegal and unsustainable logging and the associated
timber trade. Though it has been a long road, there is increasing evidence that these efforts are paying off,
with illegal logging falling substantially in three key producer countries, and the amount of illegal wood in
international trade also falling dramatically. This is estimated to have resulted in the saving of billions of metric
tons of carbon dioxide emissions and a substantial increase in tax revenues for producer countries (Lawson and
MacFaul 2010). Previously, illegal logging had likely depressed world timber prices by more than 15 percent
due to an uneven playing field caused by companies bypassing the law (Seneca Creek Associates 2004).
The experience from timber includes lessons on both what does and what does not work, and on both
the supply-side, by producers and producer country governments, and the demand-side, by sourcing and
purchasing companies and government agencies. Adopting lessons from these successful efforts could
jump-start solutions to tackling illegal agro-conversion. Specific and transferrable lessons include:
For further background and detail on the potential applicability of consumer-country measures used to exclude illegal timber to
illegal or unsustainable agricultural products associated with deforestation, please see Brack and Bailey. 2013. Ending Global
Deforestation: Policy Options for Consumer Countries. Chatham House and Forest Trends, London and Washington. http://
www.chathamhouse.org/publications/papers/view/194247
78
95
Private Sector:
Voluntary private sector measures will not be able to address illegality unless they are accompanied by action
by governments, both in producer and consumer countries. On the one hand, voluntary efforts to improve
sustainability on timber were held back by having to compete with products sourced illegally. On the other,
a lack of clarity in laws and regulations and poor transparency of relevant government documents made it
difficult for certification systems to effectively check for compliance.
Producer Countries:
Laws and regulations must be made clear, consistent, and coherent if they are to be enforceable.
Where laws are unclear or incomplete, it is difficult to prosecute offenders and may preclude
responsible companies from investing in a particular country.
Consumer Countries:
96
Policies requiring the use of only legal and sustainable timber in government purchases can prove
to be an important catalyst. Such policies have helped expand the market for and raise standards in
voluntary verification and certification of legality and sustainability, and forced many companies to
explore legal supply chains for the first time (from forest floor to point of purchase). In doing so
these policies have (among other things) helped pave the way for broader legislation governing all
imports and sales of wood products (see next point).
Regulations governing all imports are needed if the whole market is to be captured, and there are
advantages to having these regulations focus on legality. Laws that make it an offence to import
illegally sourced timber and wood products have now been enacted in the US, Australia, and
the EU, which also requires companies to practice due diligence. These laws are starting to drive
the broadest changes yet in purchasing, with major effects in producer countries. By focusing
on legality (as opposed to sustainability) these laws have respected sovereignty and the right of
producer countries to pursue economic development, while also avoiding WTO compliance issues.
Bilateral engagement between producer and consumer countries is essential, both to enable
implementation of demand-side regulations and to support parallel supply-side action. This has been
most notably demonstrated by the EUs Voluntary Partnership Agreements (VPAs). These agreements,
though ostensibly demand-side measures with the purpose of excluding illegal wood through the
establishment of licensing schemes, are actually having much broader impacts, including on the
supply side (FERN 2013). In effect, these are government to government trade agreements voluntarily
entered into by both parties, but once signed are legally binding at the highest level of international
law. They provide and guarantee consumer market access in exchange for improved forest and land use
governance, combined with mutually created institutions that monitor partnership or treaty compliance.
They are distinct from voluntary company-specific or roundtable commitments, which are not legally
binding. Impacts include clarifications of relevant laws and regulations, improvements in stakeholder
engagement, increased transparency and the introduction of independent third party monitoring.
5. DISCUSSION
5.3 Conclusion
In summary, the evidence presented in this report indicates that the phenomenon of illegal forest clearing for
commercial agriculture and associated exports has continued at an alarming rate since at least the start of the
21st century. Indeed, this problem is worse than previously thoughtand is likely occurring to a greater extent
than the conservative estimates in this analysis show. While rising global incomes and demand for agricultural
products will continue, we are currently responding with a flawed development model. It is increasingly clear
that much of the forest land conversion for large-scale agricultural projects is in violation of some of the
producer countries most basic laws and regulations and incurring high social and environmental costs. These
illegalities will become more pronounced as producer countries encourage agricultural investments as a way
to catalyze growth. Deforestation will increase in regions such as the Congo Basin where little commercial
agriculture previously existed, unless we ensure that forest land converted for production is acquired legally
and sustainably. The following chapter looks forward to how this can be achieved.
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6. RECOMMENDATIONS
98
6. RECOMMENDATIONS
RECOMMENDATIONS
Companies producing or trading relevant commodities should
comply with all national laws when developing new commercial agricultural and timber plantation
projects in forested countries and when purchasing products;
refrain from engaging in such projects in countries where it is not possible to ensure legality;
purchase and trade only commodities that are legally produced and traceable back to their source;
verify that relevant policies such as zero deforestation commitments are properly implemented via
independent third-party monitoring and by publishing relevant information;
improve existing certification schemes to ensure that these more effectively preclude commodities
from illegal conversion;
conduct comprehensive assessments of past illegalities by existing concessions (i.e., that examine
the processes by which licenses were issued and that use archived satellite imagery to examine
whether clearance began in advance of permitting);
promote and support actions by producer country governments to tackle the problem (see
Recommendations for producer countries), including the resolution of legal uncertainties,
conflicting regulations, and unclear tenure;
adopt policies that extend beyond national laws, such as avoiding embedded deforestation entirely
and requiring the Free, Prior and Informed Consent of Indigenous Peoples and local communities
(as per established international standards).
ensure that financing is only provided to relevant companies, shipments, and projects where
legality can be demonstrated.
lobby for regulatory action by consumer country governments to ensure that only legally produced
products can be imported or sold, thereby creating a level playing field on which companies can
compete on broader issues of sustainability.
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6. RECOMMENDATIONS
Where illegality is widespread and it is likely to take a long time to address legal and institutional failings and
resolve past illegalities, countries may consider instituting broader measures, such as a complete moratorium
on forest conversion, at least until the governance situation has been substantially improvedas Indonesia has
done for new licenses. In more comprehensive or extreme cases, such moratoria could be applied retroactively
to areas already licensed but not yet developed.
Producer countries must also ensure that international commitments regarding the rights of local communities
and Indigenous Peoples, including customary land ownership, are reflected in national laws that are fully
implemented and enforced. Aside from directly ensuring legality in this regard, such a step may serve to help
reduce other forms of illegality, given the mounting evidence that granting local and indigenous communities
rights to forestland protects forests while simultaneously improving livelihoods (Seymour et al. 2014; Stevens
et al. 2014).
RECOMMENDATIONS
Producer country governments should
ensure that the legal and regulatory framework governing the licensing and implementation of
relevant developments on forest lands is clear, consistent, and non-conflicting;
consider commissioning a full review of the legality of all relevant licenses, to be carried out by an
independent body;
resolve past illegalities in a manner that is practical but which ensures transgressors do not stand to
gain and that those affected are properly compensated. Resolve any conflicting land rights claims
arising from regulatory conflicts or inconsistencies through clear legal frameworks;
collate and publish all relevant information (including licenses and permits, associated maps, and
land use planning and land ownership maps) and make such publication a legal requirement;
request the assistance of donor and consumer countries, supported by bilateral arrangements such
as the EU FLEGT VPAs (see Box 10);
draft or revise national REDD+ policies that acknowledge the importance of illegal agro-conversion
as a driver of deforestation and outline specific steps to reduce illegalities; and
ensure that international commitments regarding rights of local communities and Indigenous
Peoples are fully reflected in national laws and properly implemented and enforced.
101
Creating New Demand-side Measures to Curb Illegal Agro-Conversion: Most of the measures used to block
market access to illegally-sourced timber (see Box 10) also hold potential for agro-commodities. The UK
has already implemented a policy requiring that all government purchases of palm oil are legal and sustainable,
though it is built around the RSPO certification system and needs to be strengthened by requiring higher
standards over time. Such public procurement policies can be replicated for other forest-risk commodities and
in other important consumer countries. In doing so, lessons from timber can be applied: good guidance is
essential for purchasers, systems need to be established to monitor implementation, and alignment of policies
across countries has greater impact and efficiencies for marketplace actors. However, although these policies
do have some broader impacts, government purchasing only represents around 12 percent of all trade (OECD
2011). To address the entire market, consumer countries should consider regulations that govern all imports.
Such laws, already passed in relation to timber in the US, EU, and Australia, could make it an offense to import
or sell agricultural commodities that were produced on land illegally cleared of forest, or require that importers
carry out due diligence in order to minimize the risk of purchasing such products.
ANNEX A
Detailed Sources And Parameters Used In Analysis
102
6. RECOMMENDATIONS
RECOMMENDATIONS
Consumer country governments should
Refocus REDD+ and donor financing:
provide technical and financial assistance for the necessary actions to be taken by producer
countries to eradicate illegal forest clearing and resolve outstanding issues of illegality (see
recommendations for producer countries above), including (among other things) reforms to land
tenure regimes to protect the legal rights of forest communities;
ensure that donor assistance on forests makes legality and improvements to forest governance a
priority and precondition for further assistance;
advocate for producer country REDD+ policies and programs that directly address legality and forest
governance;
advocate for relevant multilateral institutions such as the World Bank and UNEP to better address
this issue in their work on and assistance to producer countries under REDD+ and otherwise;
advocate for REDD+ monitoring, reporting, and verification (MRV) standards in international climate
policy forums such as the UNFCCC that will provide oversight to further prevent illegal clearing of
natural forests;
require pension funds, sovereign wealth funds, and other nationally-governed financial instruments
to carry out necessary due diligence and refuse to do business with companies found to have a high
risk of being associated with illegal forest clearance;
provide technical and financial support to civil society groups tackling these issues; and
support further research to better understand the nature and extent of relevant illegalities, and
measures effective at reducing their occurrence;
ensure that existing demand-side measures on timber (including procurement policies, regulations
governing all imports and bilateral agreements such as VPAs) are revised to ensure that they
encompass conversion timber to the maximum possible extent;
in countries where no such timber-related demand-side measures exist, enact these as a matter of
urgency;
ensure that these demand-side measures are fully implemented and enforced, with an appropriate
proportion of attention and resources paid to cases related to conversion and sufficiently dissuasive
penalties. Implement policies requiring that all government purchases of relevant commodities are
proven to have been legally and sustainably sourced and ensure that new or existing procurement
policies include standards that are high enough to ensure that products associated with the kinds of
illegalities documented in this report are excluded;
establish bilateral trade agreements with important supplier countries, following the model of the
EUs Voluntary Partnership Agreements; and
ensure that penalties are sufficiently high and monitoring and enforcement sufficiently robust to
guarantee compliance with these regulations.
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118
ANNEX A
Independent assessments of deforestation in individual countries based on satellite imagery have recently demonstrated that
the official FAO deforestation figures for many countries are extremely inaccurate. The area deforested in Indonesia, Malaysia,
and Paraguay, for instance, is more than double the official FAO figure for each country, while the area deforested in Nigeria is
less than one quarter the amount reported (Hansen et al. 2013).
79
119
TABLE A1
Calculations for Mid-Point and High-Point Estimates
of Illegality for Countries without Specific Data
Region
Latin America
Asia
Africa
120
84.5%
42.3%
86.7%
43.4%
85.8%
42.9%
ANNEX A
All of the final low-end, mid-point, and high-end percentages used for the proportion of deforestation for
commercial agriculture that was illegal are provided in Table A2. Full justifications for individual countries are
provided in the country sections in Chapter 4.
Proportion of Products of Commercial Agriculture Exported (D)
Data related to exports were obtained from various sources. For Brazil, the proportion of agro-conversion
exported was drawn directly from the published literature (Karstensen et al. 2013). For other countries, the
figure was estimated based on a comparison of production and export data for the most relevant commodities.
Production and export data were obtained from USDA Foreign Agricultural Service (FAS) reports and the UN
COMTRADE database. Where the data allowed, the analysis weighted individual commodities according to the
proportion of total estimated agro-conversion attributable to each. The equation (in the example case, assumes
two key commodities involved) is as follows (Figure A1):
FIGURE A1
Proportion of
deforestation driven
by commercial
agriculture for
export
It was generally assumed that the proportion of illegal agro-conversion commodities exported in each country
was the same as the proportion of overall agro-conversion commodities exportedi.e. that commodities grown
on illegally deforested land are not disproportionally likely to be consumed domestically. This is considered
to be a reasonable assumption given that nearly all commodities associated with illegal deforestation are
nevertheless considered legal by the authorities in the country of origin, and given the small proportion of total
production and exports of relevant commodities that are independently certified or verified.
For those countries where insufficient data were available, and for the rest of the world, averages were used,
i.e. for Asia and Latin America the mid-point estimates used the average figures for countries in the same
region for which estimates had been produced, whereas for Africa, the global average was applied. High-end
percentages were calculated as 1.5 times the mid-points. The low-end of the sensitivity analysis used zero
percent in all such instances.
All of the final low-end, mid-point, and high-end percentages used for the proportion of products of commercial
agriculture exported are provided in Table A2. Full justifications for individual countries are provided in the
country sections in Chapter 4.
121
TABLE A2
Percentages Used in Tropical Deforestation Analysis (Parameters B, C, and D)
% Due to Comm. Agriculture
Low
Mid
High
% Illegal
Low
Mid
% Exported
High
Low
Mid
High
Brazil
90%
90%
90%
68%
79%
90%
30%
30%
30%
Indonesia
80%
80%
80%
80%
80%
80%
75%
75%
75%
DR Congo
0%
0%
0%
0%
43%
86%
0%
0%
0%
Malaysia
87%
87%
87%
0%
43%
87%
86%
86%
86%
Paraguay
79%
79%
79%
0%
42%
85%
80%
80%
80%
Bolivia
75%
75%
75%
90%
90%
90%
56%
66%
75%
Colombia
75%
75%
75%
0%
42%
85%
20%
20%
20%
Mexico
60%
60%
60%
0%
42%
85%
0%
49%
74%
Mozambique
0%
35%
53%
0%
43%
86%
0%
51%
77%
Tanzania
0%
35%
53%
0%
43%
86%
0%
51%
77%
Angola
0%
35%
53%
0%
43%
86%
0%
0%
0%
Peru
66%
66%
66%
0%
42%
85%
0%
49%
74%
Myanmar
33%
33%
33%
0%
43%
87%
10%
10%
10%
Cambodia
40%
60%
80%
90%
90%
90%
0%
72%
100%
Vietnam
40%
60%
80%
0%
43%
87%
90%
90%
90%
Laos
73%
73%
73%
0%
43%
87%
0%
72%
100%
50%
50%
50%
90%
90%
90%
100%
100%
100%
OtherAfrica
0%
35%
53%
0%
43%
86%
0%
51%
77%
OtherAsia
0%
35%
53%
0%
43%
87%
0%
72%
100%
OtherLatin Amer.
0%
68%
100%
0%
42%
85%
0%
49%
74%
Notes: Figures colored green are estimates for which sufficiently good data was available for a range not to be used. For figures
colored yellow, data for the relevant country was only sufficient to produce a range. For figures colored orange, no quantitative data
were available and a full range of estimates were included in the sensitivity analysis, with the mid and high estimates drawn from
regional or global averages, according to the methodology described in the text.
122
ANNEX A
The countries specifically assessed for each commodity are listed in Table A3. These countries were selected as
being both important exporters of the relevant commodity and high-risk countries for illegal agro-conversion.
TABLE A3
List of Individual Countries Assessed in Commodity Export Analysis
Soy
Brazil
Argentina
Paraguay
Bolivia
Uruguay
Beef
Brazil
Argentina
Uruguay
Paraguay
Mexico
Leather
Brazil
Argentina
Uruguay
Paraguay
Mexico
Colombia
Palm Oil
Indonesia
Malaysia
Tropical Timber
Malaysia
Indonesia
Papua New Guinea
Cameroon
Myanmar
Laos
Solomon Islands
Brazil
Gabon
Cte dIvoire
Republic of Congo
Ghana
Plantation-Grown
Solid wood
Indonesia
123
All of the final low-end, mid-point, and high-end percentages used for the proportion of production of relevant
commodities that displaced forests are provided in Table A5. Full justifications for individual countries are
provided in the country sections in Chapter 4.
TABLE A4
Estimates Used for Rest of the World for the Proportion of Exports of Each Relevant
Commodity Displacing Tropical Forest
Soy
0%
Beef
0%
Leather
0%
Palm Oil
60%
Tropical Timber
5%
Notes: For pulp & paper and for plantation-wood, no global estimate was produced and so no rest of the world
estimate was required
Proportion of Forest Displaced for Each Commodity that Was Illegally Cleared (G)
In most cases, the proportions of forest clearance for specific commodities in specific countries estimated to be
associated with illegalities were the same as the overall figures for agro-conversion illegality (see Proportion
of deforestation for commercial agriculture that was illegal, above). In the case of Brazil, and were adjusted
to account for differences in illegality relating to conversion for soy (lower than the average) and for beef and
tropical timber (higher than the average), these differences relating to the proportion of production of each
originating in the Amazon as opposed to the cerrado.
For most of those countries not specifically included in the earlier analysis (Uruguay, for soy, beef and leather;
Cameroon, Solomon Islands, Cte dIvoire, and Ghana for tropical timber) the same methodology of using
regional (or global, for Africa) averages to calculate mid- (50 percent of regional average) and high-point estimates
(100 percent of regional average) was applied (with zero used for the low-end). This same methodology (with
global averages) was also used in the production of figures for the rest of the world for palm oil and tropical
timber. For tropical timber from Cameroon, Gabon, and Republic of Congo, specific estimates of illegalities in
conversion were produced based on evidence from the sole or main sources of conversion wood.
No illegality estimates were required for the rest of the world for soy, beef or leather (because it had already
been assumed that no exports displaced forest), or for pulp and paper and plantation wood (becasue no global
analysis was being conducted for those commodities).
All of the final low-end, mid-point, and high-end percentages used for the proportion of forest displaced for
each commodity that was illegally cleared are provided in Table A5. Full justifications for individual countries
are provided in the country sections in Chapter 4.
124
ANNEX A
TABLE A5
Percentages Used in Commodity Analysis (Parameters F & G)
% Displacing Forest
Low
Mid
% Illegal
High
Low
Mid
High
Soy
Brazil
59%
60%
61%
49%
69%
90%
Argentina
9%
9%
9%
30%
53%
75%
Paraguay
71%
71%
71%
0%
42%
85%
Bolivia
45%
73%
100%
90%
90%
90%
Uruguay
0%
53%
100%
0%
42%
85%
RoW
0%
0%
0%
0%
0%
0%
Brazil
79%
79%
79%
73%
82%
90%
Argentina
17%
17%
17%
30%
53%
75%
Uruguay
0%
48%
79%
0%
42%
85%
Paraguay
0%
48%
79%
0%
42%
85%
Mexico
0%
48%
79%
0%
42%
85%
Colombia
0%
48%
79%
0%
42%
85%
RoW
0%
0%
0%
0%
0%
0%
Indonesia
69%
69%
69%
80%
80%
80%
Malaysia
55%
55%
55%
0%
43%
87%
RoW
0%
61%
66%
0%
43%
86%
Malaysia
65%
65%
65%
0%
43%
87%
Indonesia
75%
75%
75%
80%
80%
80%
PNG
30%
30%
30%
90%
90%
90%
Cameroon
5%
5%
5%
90%
95%
100%
Myanmar
50%
50%
50%
0%
43%
87%
Laos
0%
55%
75%
0%
43%
87%
Solomon Islands
0%
55%
75%
0%
43%
87%
Brazil
19%
19%
19%
90%
90%
90%
Gabon
6%
10%
13%
0%
0%
0%
Cte dIvoire
0%
4%
13%
0%
43%
86%
Congo
2%
2%
2%
80%
90%
100%
Ghana
0%
1%
2%
0%
43%
86%
RoW
0%
29%
75%
0%
43%
86%
Beef/Leather*
Palm Oil
Tropical Timber
125
% Displacing Forest
% Illegal
50%
50%
50%
80%
80%
80%
Malaysia
0%
55%
83%
0%
43%
87%
50%
50%
50%
80%
80%
80%
Plantation Wood
Indonesia
% Conversion Wood
Low
Mid
High
Low
Mid
High
Pulp and Paper (% displacing forest made from conversion vs plantation wood)
Indonesia
37%
37%
37%
63%
63%
63%
Notes: Figures colored green are estimates for which sufficiently good data was available for a range not to be used. For figures
colored yellow, data for the relevant country was only sufficient to produce a range. For figures colored orange, no quantitative
data were available and a full range of estimates were included in the sensitivity analysis, with the mid and high estimates drawn
from regional or global averages, according to the methodology described in the text.
Note: RoW= Rest of the world
* Colombia was only assessed individually for leather exports, and was included in RoW for beef
126
ANNEX B
Data Tables for Results of Analysis in Section 3.1
(Using principal deforestation dataset (Hansen et al. 2013 > 51% canopy gross forest loss, 2000 to 2012)
Note: Data tables using alternative deforestation datasets published separately as supporting information
127
TABLE B1
Mid-Point Calculations for Deforestation Analysis
Total Gross
Forest (> 51%
Canopy) Loss in
the Tropics 2000
to 2012 (mha) (A)
MID-POINT
% Of
Area of Forest
% Of AgroDeforestation due
Lost For
Conversion Illegal
to Commercial
Commercial
(est) (D)
Agriculture (est) Agriculture (mha)
(B)
-AxB (C)
Area of Illegal
Deforestation
for Commercial
Agriculture (mha)
-CxD (E)
Brazil
30.6
35%
90%
27.5
79%
21.7
Indonesia
15.5
18%
80%
12.4
80%
9.9
DR Congo
5.3
6%
0%
43%
Malaysia
4.7
5%
87%
4.1
43%
1.8
Paraguay
2.4
3%
79%
1.9
42%
0.8
Bolivia
2.8
3%
75%
2.1
90%
1.9
Colombia
2.4
3%
75%
1.8
42%
0.8
Mexico
2.0
2%
60%
1.2
42%
0.5
Mozambique
0.8
1%
35%
0.3
43%
0.1
Tanzania
0.7
1%
35%
0.2
43%
0.1
Angola
0.8
1%
35%
0.3
43%
0.1
Peru
1.5
2%
66%
1.0
42%
0.4
Myanmar
1.4
2%
33%
0.4
43%
0.2
Cambodia
1.1
1%
60%
0.7
90%
0.6
Vietnam
1.1
1%
60%
0.7
43%
0.3
Laos
1.1
1%
73%
0.8
43%
0.4
0.6
1%
50%
0.3
90%
0.3
OtherAfrica
5.5
6%
35%
1.9
43%
0.8
OtherAsia
1.8
2%
35%
0.6
43%
0.3
OtherLatin America
4.9
6%
68%
3.3
42%
1.4
TOTAL
87.0
% of total tropical
deforestation
128
% Of All Forest
(> 51% Canopy)
Loss in the
Tropics
61.6
42.4
71%
49%
ANNEX B
% of Illegal
Commercial
Agro-Conversion
Products
Exported (F)
Area of Illegal
Deforestation for
Agro-exports (mha)
ExF (G)
Illegal AgroConversion as % of
Total Deforestation
E/A (H)
% Of Total
Deforestation due
to Illegal AgroConversion for Export
G/A (I)
30%
8.3
6.52
71%
20%
21%
75%
9.3
7.42
64%
9%
48%
0%
0%
0%
0%
86%
3.5
1.52
38%
2%
32%
80%
1.5
0.65
33%
1%
27%
66%
1.4
1.24
68%
2%
44%
20%
0.4
0.15
32%
1%
6%
49%
0.6
0.25
25%
0%
12%
51%
0.1
0.06
15%
0%
8%
51%
0.1
0.05
15%
0%
8%
0%
15%
0%
0%
49%
0.5
0.21
28%
0%
14%
10%
0.02
14%
0%
1%
72%
0.5
0.44
54%
1%
39%
90%
0.6
0.26
26%
0%
23%
72%
0.6
0.26
32%
0%
23%
100%
0.3
0.28
45%
0%
45%
51%
0.42
15%
1%
8%
72%
0.4
0.19
15%
0%
11%
49%
1.6
0.69
29%
1%
14%
49%
30.7
20.6
49%
39%
24%
35%
24%
129
TABLE B2
Low-End Calculations for Deforestation Analysis
Total Gross
Forest (> 51%
Canopy) Loss in
the Tropics 2000
to 2012 (mha) (A)
LOW-END
% Of
Area of Forest
% Of AgroArea of Illegal
Deforestation due
Lost For
Conversion Illegal
Deforestation for
to Commercial
Commercial
(est) (D)
Commercial Agriculture
Agriculture (est) Agriculture (mha)
(mha) -CxD (E)
(B)
-AxB (C)
Brazil
30.6
35%
90%
27.5
68%
18.7
Indonesia
15.5
18%
80%
12.4
80%
9.9
DR Congo
5.3
6%
0%
0%
Malaysia
4.7
5%
87%
4.1
0%
Paraguay
2.4
3%
79%
1.9
0%
Bolivia
2.8
3%
75%
2.1
90%
1.9
Colombia
2.4
3%
75%
1.8
0%
Mexico
2.0
2%
60%
1.2
0%
Mozambique
0.8
1%
0%
0%
Tanzania
0.7
1%
0%
0%
Angola
0.8
1%
0%
0%
Peru
1.5
2%
66%
1.0
0%
Myanmar
1.4
2%
33%
0.4
0%
Cambodia
1.1
1%
40%
0.5
90%
0.4
Vietnam
1.1
1%
40%
0.4
0%
Laos
1.1
1%
73%
0.8
0%
0.6
1%
50%
0.3
90%
0.3
OtherAfrica
5.5
6%
0%
0%
OtherAsia
1.8
2%
0%
0%
OtherLatin
America
4.9
6%
0%
0%
TOTAL
87
% of total tropical
deforestation
130
% Of All Forest
(> 51% Canopy)
Loss in the
Tropics
54.5
31.2
63%
36%
ANNEX B
% of Illegal
Commercial
AgroConversion
Products
Exported (F)
Area of Illegal
Deforestation for
Agro-exports (mha)
ExF (G)
Illegal AgroConversion as % of
Total Deforestation
E/A (H)
% Of Total
Deforestation due
to Illegal AgroConversion for Export
G/A (I)
30%
8.3
5.61
61%
17%
18%
75%
9.3
7.42
64%
9%
48%
0%
0%
0%
0%
86%
3.5
0%
0%
0%
80%
1.5
0%
0%
0%
56%
1.2
1.06
68%
2%
38%
20%
0.4
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
10%
0%
0%
0%
0%
36%
0%
0%
90%
0.4
0%
0%
0%
0%
0%
0%
0%
100%
0.3
0.28
45%
0%
45%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
46%
24.9
14.4
36%
28%
17%
29%
17%
131
TABLE B3
High-End Calculations for Deforestation Analysis
Total Gross
Forest (> 51%
Canopy) Loss in
the Tropics 2000
to 2012 (mha) (A)
HIGH-END
% Of
Area of Forest
% Of AgroArea of Illegal
Deforestation due
Lost For
Conversion Illegal
Deforestation for
to Commercial
Commercial
(est) (D)
Commercial Agriculture
Agriculture (est) Agriculture (mha)
(mha) -CxD (E)
(B)
-AxB (C)
Brazil
30.6
35%
90%
27.5
90%
24.8
Indonesia
15.5
18%
80%
12.4
80%
9.9
DR Congo
5.3
6%
0%
86%
Malaysia
4.7
5%
87%
4.1
87%
3.5
Paraguay
2.4
3%
79%
1.9
85%
1.6
Bolivia
2.8
3%
75%
2.1
90%
1.9
Colombia
2.4
3%
75%
1.8
85%
1.5
Mexico
2.0
2%
60%
1.2
85%
1.0
Mozambique
0.8
1%
53%
0.4
86%
0.4
Tanzania
0.7
1%
53%
0.4
86%
0.3
Angola
0.8
1%
53%
0.4
86%
0.4
Peru
1.5
2%
66%
1.0
85%
0.8
Myanmar
1.4
2%
33%
0.4
87%
0.4
Cambodia
1.1
1%
80%
0.9
90%
0.8
Vietnam
1.1
1%
80%
0.9
87%
0.8
Laos
1.1
1%
73%
0.8
87%
0.7
0.6
1%
50%
0.3
90%
0.3
OtherAfrica
5.5
6%
53%
2.9
86%
2.5
OtherAsia
1.8
2%
53%
0.9
87%
0.8
OtherLatin
America
4.9
6%
100%
4.9
85%
4.2
TOTAL
87.0
% of total tropical
deforestation
132
% Of All Forest
(> 51% Canopy)
Loss in the
Tropics
65.4
56.6
75%
65%
ANNEX B
% of Illegal
Commercial
AgroConversion
Products
Exported (F)
Area of Illegal
Deforestation for
Agro-exports (mha)
ExF (G)
Illegal AgroConversion as % of
Total Deforestation
E/A (H)
% Of Total
Deforestation due
to Illegal AgroConversion for Export
G/A (I)
30%
8.3
7.43
81%
23%
24%
75%
9.3
7.42
64%
9%
48%
0%
0%
0%
0%
86%
3.5
3.03
75%
3%
65%
80%
1.5
1.29
67%
1%
53%
75%
1.6
1.42
68%
2%
51%
20%
0.4
0.31
63%
1%
13%
74%
0.9
0.75
51%
1%
38%
77%
0.3
0.29
45%
0%
35%
77%
0.3
0.24
45%
0%
35%
0%
45%
0%
0%
74%
0.7
0.62
56%
1%
41%
10%
0.04
29%
0%
3%
100%
0.9
0.82
72%
1%
72%
90%
0.8
0.69
69%
1%
62%
100%
0.8
0.71
63%
1%
63%
100%
0.3
0.28
45%
0%
45%
77%
2.2
1.91
45%
2%
35%
100%
0.9
0.82
46%
1%
46%
74%
3.6
3.07
85%
4%
63%
55%
36.4
31.1
65%
52%
36%
42%
36%
133
ANNEX C
Data Tables for Results of Analysis in Section 3.2
Note: Data tables for low-end and high-end estimates for individual commodities published separately as supporting information
TABLE C1
Soy 2012/13 (million metric tons)
Country
134
Exports
(mt) (A)
%
Displacing
Forest
(est) (B)
Exports
Displacing
Forest (mt)
-AxB (C)
% Of
Deforestation
Illegal (est)
(D)
Exports
From illegal
Deforestation
(mt) CxD (E)
Exports
From Illegal
Deforestation
as % of Total
ExportsE/A
(F)
Value of
Exports From
Deforestation
($ mill)*
Value of
Exports
From Illegal
Deforestation
($ mill)*
Brazil
59.2
60%
35.5
69%
24.5
41%
25,574
17,646
Argentina
44.4
9%
4.0
53%
2.1
5%
2,130
1,118
Paraguay
7.9
71%
5.6
42%
2.4
30%
2,833
1,198
Bolivia
1.7
73%
1.2
90%
1.1
65%
667
600
Uruguay
2.9
53%
1.5
42%
0.7
22%
825
349
RoW
50
0%
0%
0%
TOTAL
166.1
30.7
19%
32,029
20,912
47.9
ANNEX C
TABLE C2
Palm Oil 2012/13 (million metric tons)
Country
Exports
(mt) (A)
%
Displacing
Forest
(est) (B)
Exports
Displacing
Forest (mt)
-AxB (C)
% Of
Deforestation
Illegal (est)
(D)
Exports
From illegal
Deforestation
(mt) CxD (E)
Exports
From Illegal
Deforestation
as % of Total
ExportsE/A
(F)
Value of
Exports From
Deforestation
($ mill)*
Value of
Exports
From Illegal
Deforestation
($ mill)*
Indonesia
20.3
66%
13.4
80%
10.7
53%
12,541
10
Malaysia
17.2
55%
9.5
43%
4.1
24%
9,280
4,028
RoW
4.2
61%
2.6
43%
1.1
26%
2,434
1,044
TOTAL
41.7
15.9
38%
24,255
15,104
Exports
From illegal
Deforestation
(mt) CxD (E)
Exports
From Illegal
Deforestation
as % of Total
ExportsE/A
(F)
Value of
Exports From
Deforestation
($ mill)*
Value of
Exports
From Illegal
Deforestation
($ mill)*
25.4
TABLE C3
Beef 2012 (million metric tons)
Country
Exports
(mt) (A)
%
Displacing
Forest
(est) (B)
Exports
Displacing
Forest (mt)
-AxB (C)
% Of
Deforestation
Illegal (est)
(D)
Brazil
1.5
79%
1.2
82%
1.0
65%
5,899
4,838
Argentina
0.2
17%
53%
9%
217
114
Uruguay
0.4
48%
0.2
42%
0.1
20%
985
417
Paraguay
0.3
48%
0.1
42%
0.1
20%
506
214
Mexico
0.2
48%
0.1
42%
20%
509
215
RoW
5.6
0%
0%
0%
TOTAL
8.1
1.2
14%
8,117
5,798
1.6
135
TABLE C4
Leather 2011 (million US$)
Country
136
Exports ($ Mill)
(A)
% Displacing
Forest (est) (B)
Exports
Displacing
Forest ($ mill)
-Axb (C)
% Of
Deforestation
Illegal (est) (D)
Exports
From Illegal
Deforestation ($
mill) CxD (E)
Exports
From Illegal
Deforestation
as % of Total
Exports -E/A (F)
Brazil
2,021
79%
1,597
82%
1,309
65%
Argentina
914
17%
155
53%
82
9%
Uruguay
165
48%
79
42%
33
20%
Paraguay
99
48%
48
42%
20
20%
Mexico
310
48%
149
42%
63
20%
Colombia
122
48%
59
42%
25
20%
RoW
19,466
0%
0%
0%
TOTAL
23,096
1,532
7%
2,086
ANNEX C
TABLE C5
Tropical Timber 2012 (million m3 RWE)
Country
Exports
(mt) (A)
%
Displacing
Forest
(est) (B)
Exports
Displacing
Forest (mt)
-AxB (C)
% Of
Deforestation
Illegal (est)
(D)
Exports
From illegal
Deforestation
(mt) CxD (E)
Exports
From Illegal
Deforestation
as % of Total
ExportsE/A
(F)
Value of
Exports From
Deforestation
($ mill)*
Value of
Exports
From Illegal
Deforestation
($ mill)*
Malaysia
15.6
65%
10.1
43%
4.4
28%
2,174
943
Indonesia
10.4
75%
7.8
80%
6.2
60%
2,181
1,745
PNG
3.2
30%
1.0
90%
0.9
27%
85
76
Cameroon
1.8
5%
0.1
95%
0.1
5%
21
20
Myanmar
2.6
50%
1.3
43%
0.6
22%
620
269
Laos
1.6
55%
0.9
43%
0.4
24%
338
147
Solomon
Islands
2.1
55%
1.2
43%
0.5
24%
238
103
Brazil
0.5
19%
0.1
90%
0.1
17%
68
61
Gabon
1.1
10%
0.1
0%
0%
36
Cte
dIvoire
0.7
4%
43%
2%
Congo
0.9
2%
90%
2%
Ghana
0.5
1%
43%
RoW
3.4
29%
1.0
43%
0.4
12%
420
180
TOTAL
44.4
53%
23.6
13.6
31%
6,195
3,555
TABLE C6
Pulp & Paper (Splitting Exports into Salvage and Plantation Wood Sources)
Country
% Conv Timber
% Plant Wood
Exp (Conv)
Exp (Plant)
Indonesia
20.3
37%
63%
7.5
12.8
Malaysia
17.2
60%
40%
10.3
6.9
TOTAL
37.5
17.8
19.7
137
TABLE C7
Pulp & Paper (from Conversion Wood)
Country
Exports
(mt) (A)
%
Displacing
Forest
(est) (B)
Exports
Displacing
Forest (mt)
-AxB (C)
% Of
Deforestation
Illegal (est)
(D)
Exports
From illegal
Deforestation
(mt) CxD (E)
Exports
From Illegal
Deforestation
as % of Total
ExportsE/A
(F)
Value of
Exports From
Deforestation
($ mill)*
Value of
Exports
From Illegal
Deforestation
($ mill)*
Indonesia
7.5
50%
3.8
80%
3.0
40%
2,779
2,223
Malaysia
10.3
55%
5.7
43%
2.4
24%
9,144
3,932
TOTAL
17.8
5.4
31%
11,923
6,155
Exports
From illegal
Deforestation
(mt) CxD (E)
Exports
From Illegal
Deforestation
as % of Total
ExportsE/A
(F)
Value of
Exports From
Deforestation
($ mill)*
Value of
Exports
From Illegal
Deforestation
($ mill)*
1.4
40%
784
627
1.4
40%
784
627
9.4
TABLE C8
Plantation-Grown Timber and Other Wood Products (m3 RWE)
Country
138
Exports
(mt) (A)
Indonesia
3.4
TOTAL
3.4
%
Displacing
Forest
(est) (B)
Exports
Displacing
Forest (mt)
-AxB (C)
50%
1.7
1.7
% Of
Deforestation
Illegal (est)
(D)
80%
ANNEX C
TABLE C9
Summary
Commodity
Scenario
Low
Mid
High
Low
Mid
High
Low
Mid
High
Soy
11%
19%
27%
30,524
32,029
33,440
13,334
20,912
29,535
Beef
11%
14%
20%
6,117
8,117
9,408
4,372
5,798
8,254
Leather
5%
7%
9%
1,752
2,086
2,302
1,212
1,532
2,018
Palm Oil
27%
39%
52%
22,391
24,825
25,024
10,488
15,560
20,794
Tropical Timber
16%
31%
49%
5,178
6,195
7,100
1,907
3,555
5,966
2,779
11,923
23,353
2,223
6,155
20,123
4,732
10,828
7,018
3,786
6,407
5,774
784
784
784
627
627
627
Brazil
17,646
Beef
4,838
Leather
Palm Oil
1,309
Trop
Timber
Pulp &
Paper
(Tropical)
Pulp &
Paper
(Plant)
Plantation
Wood
61
Indonesia
10,488
1,745
2,223
3,786
Malaysia
4,028
943
3,932
2,621
627
Total
% Of
Global
Total
23,854
40.2%
18,869
31.8%
11,524
19.4%
Paraguay
1,198
214
20
1,432
2.4%
Argentina
1,118
114
82
1,314
2.2%
Uruguay
349
417
33
799
1.3%
Bolivia
600
600
1.0%
278
0.5%
Mexico
215
63
Myanmar
269
269
0.5%
Laos
147
147
0.2%
Solomon
Islands
103
103
0.2%
PNG
76
76
0.1%
25
0.0%
20
0.0%
Colombia
25
Cameroon
TOTAL
20
20,912
5,798
1,532
14,516
3,364
6,155
6,407
627
59,311
139
ANNEX D
Previous Global Estimates of the Proportion of
Tropical Deforestation due to Agriculture
This annex highlights the methodological issues in two major global studies estimating the proportion of recent
global tropical deforestation due to agriculture that may have led to underestimates of the importance of
agriculture to tropical deforestation.
Hosonuma et al. (2012)
Finding: 73 percent of tropical/sub-tropical deforestation during the decade to 2010 was caused by
agriculture, including 40 percent due to commercial agriculture and the rest to local or subsistence
agriculture
Why it is likely an underestimate of the current proportion: Firstly, there is strong reason to believe
that commercial agriculture has grown as a driver over the 10-year period of the study (DeFries et al.
2013, Cuypers et al. 2013), which would mean it represented somewhat more than 40 percent at the
end of the period and less at the start. Secondly, the estimate was based on FAO deforestation data selfreported by countries, which for a number of important countries have been shown to be inaccurate
(Hansen et al. 2013).80 Thirdly, the reference documents used to attribute proportions of deforestation
to different drivers in individual countries were often of poor quality and in some cases out of date.
One key reference document used to establish the importance of different drivers in many countries,
for instance, claims 20 percent of deforestation in Indonesia is caused by shifting agriculture, but cites
a study published in 1991, ten years before the study reference period and prior to the massive boom
in conversion for timber and oil palm plantations.81
Finding: 65 percent of deforestation in the tropics and sub-tropics between 2000 and 2008 was due to
agricultural expansion.
The FAO data are based on self-reporting by individual countries. Independent assessments of deforestation in individual
countries based on satellite imagery (Hansen et al. 2013) have recently demonstrated that the official FAO deforestation figures
for many countries are extremely inaccurate. The area deforested in Indonesia, Malaysia, and Paraguay, for instance, is more than
double the official FAO figure, while the area deforested in Nigeria is less than one quarter the amount reported (according to
FAO (2010), Nigeria lost 4 Mha of forests from 2000 to 2010more than any other tropical country except Brazil and Indonesia,
but recent satellite measurements suggest that deforestation in Nigeria during this period was actually 0.9 Mhaless than
one quarter of the reported amount (Hansen et al. 2013). Though some of the difference might be explained by variations in
methodology (including that the recent independent data includes felling of non-natural forest), it is unlikely that this can explain
more than a minority of the difference.
81
The study cites Matthews R B et al. 2010 Development and application of methodologies for reduced emissions from deforestation
and forest degradation (REDD+)phase I Final Report for Project CEOSA 0803, Department of Energy and Climate Change
(DECC) as one of the sources for ratio data on drivers of deforestation in Indonesia. The relevant section of that report in turn
references Dick, J. (1991). Forest land use, forest use zonation and deforestation in Indonesia: A Summary and interpretation of
existing information. Background paper to United Nations Conference on Environment and Development (UNCED) for the State
Ministry for Population and Environment (KLH) and the Environmental Impact Management Agency (BAPEDAL).
80
140
ANNEX D
Why it is likely an underestimate of the current proportion: This study also understates the present
importance of agriculture, for the first two reasons as for Hosonuma et al. (see above), but also
because it is likely that a large proportion of the deforestation classified by the study as due to natural
hazards (mostly fire) (17 percent of global deforestation during 2000 to 2008) or unexplained (19
percent) were actually due to agriculture. This is because the study only attributed deforestation to
land currently used for agriculture, as recorded in official FAO statistics. Firstly (as the authors admit),
it is possible that those FAO statistics understate the actual area currently being used for agriculture,
particularly for subsistence agriculture. A second and likely more important flaw is that this method
fails to account for areas of forest which were cleared for or as a result of agriculture, but which are
not currently used for that purpose. Evidence from Brazil and Indonesia (the two countries responsible
for most of total worldwide tropical deforestation) shows that the proportion this represents of global
deforestation is substantial. Most forest fires in Indonesia are associated with commercial oil palm and
timber plantation development (FWI/GFW 2002); fires started for the purpose of clearing land for this
purpose likely extend far beyond the areas intended. Within concessions, fire may also be one reason
that the speed with which forests are cleared for oil palm has outstripped actual planting, creating a
backlog of under-utilized land (Boucher et al. 2011). In Brazil, much of the land deforested for cattle
pasture in the Amazon has since been abandoned (INPE 2011a), while large areas of steep slopes in
the Atlantic forest biome are also now under secondary vegetation, having been abandoned due to
increasing mechanization of agricultural production (Lapola et al. 2013). In all these cases, such land
would not be attributed to commercial agriculture using the Cuypers et al. 2013 study methodology.
There are also reasons to believe the study may have understated the proportion of deforestation
exported. For instance, the study attributed a great deal of deforestation to crops such as rice, maize,
and cassava which are much less likely to be exported than beef, soy, and palm oil. However, for some
key countries (such as Nigeria) where large areas of deforestation were attributed to these crops, recent
evidence suggests that the real level of deforestation during the relevant period was dramatically lower
than the figures reported by the country concerned and used in the study.82
The new maps of deforestation also show real deforestation to have been much less extensive than previously thought in a
number of other countries where the increased areas of rice, maize or cassava were attributed to deforestation by Cuypers et
al. 2013 and which have few agricultural exports, such as Tanzania and Myanmar.
82
141
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