China urged to act on Burma timber

Dramatic decrease in illegal timber trade between Burma and China but smuggling continues; China urged to do more

The illegal cross-border timber trade between Burma and China has decreased significantly since 2005, however, ‘snake business' is widespread and the authorities in China should do more to clamp down, according to a new detailed review by the campaign group Global Witness.

A Disharmonious Trade, the third in a series of reports on illegal logging in Burma, is based on field research carried out between 2005 and 2009 in Kachin State, along the Burma-China border, and on China's eastern seaboard. The field research is supported by an analysis of the latest trade data which shows that imports of logs and sawn wood across the land border from Burma fell by more than 70% between 2005 and 2008. However, 270,000 m3 of logs, and 170,000 m3 of sawn timber, were still imported into Kunming customs district in 2008, more than 90% of which was illegal.

The decline in the illegal cross-border timber trade can be largely attributed to measures put in place by the Chinese authorities following the publication of Global Witness’ report A Choice for China in October 2005. At that time, an average of one truck carrying 15 tonnes of illegally logged timber crossed an official Chinese checkpoint every 7 minutes, 24 hours a day, 365 days a year. In stark contrast, Global Witness saw very few log trucks along the border during 2006-07 and 2009.

However, some illicit trade continues, causing serious damage to the environment in Kachin State as the forest is cleared, often to make way for plantations. Timber is transported at night, official checkpoints avoided and documentation routinely falsified. In some instances, local enforcement agencies have turned a blind eye to smuggling; sources claim that corruption and bribery are rife.

“Clearly action taken by authorities in China and Burma to combat illegal logging in Kachin state has had a significant positive impact. But they should do more to close down the remaining industry, which is almost wholly reliant on the illegal timber supply from Burma,” said Jon Buckrell, Global Witness' Head of Forest Policy. “The Chinese government aspires to achieve a ‘harmonious society’ but the continued destruction of Burma’s northern frontier forests, largely by Chinese companies, provides a striking counterpoint to that vision.”

In late 2006 as part of their research, Global Witness investigators posed as buyers at flooring companies. At the time, thirteen out of 14 companies said that it was still possible for them to obtain timber from Burma across the land border despite import restrictions. These companies export timber throughout the world, including to Europe and America. A number of US-based companies are still advertising Burmese wood flooring on their websites despite the fact that the Lacey Act now bans commerce in illegally obtained timber and wood products.

This is just part of a wider problem. Half of China’s imports from all countries are probably illegal and China accounts for roughly a quarter of all illegal timber being traded internationally. Chinese exports account for 10% of the global trade in illegal timber. This has a knock-on effect for other countries. For example, the UK imports more illegal timber than any other EU country because it buys so much from China.

Main recommendations:

· The Government of the People's Republic of China should make all relevant authorities and businesses in China aware of the 11 May 2006 'Interim Measures to Manage Timber and Mineral Cooperation between Myanmar and Yunnan Province.' The 'Interim Measures' should be enforced;

· The Burmese authorities should continue efforts to stop illegal and unsustainable logging in Kachin state and end the illegal cross-border timber trade with China.

· Timber importing nations, including China, should adopt national legislation to prohibit the importation and sale of timber, which has been harvested, transported, bought or sold in violation of national laws.

/ Ends

Notes:

1. An embargoed copy of the report can be downloaded from https://rcpt.yousendit.com/755955361/9c319276586f73ebfe04b5c8d76ac247. Summary and conclusions from: https://download.yousendit.com/YkxJUGhhbEpBNkZjR0E9PQ
2. Hard copies of the report will be available from the Foreign Correspondents Club of Thailand: The Penthouse, Maneeya Center, 518/5 Ploenchit Road, Pathumwan, Bangkok 10330
3. On 22 May 2008, the U.S. Congress passed a groundbreaking law banning commerce in illegally obtained plants and their products, including timber and wood products. The new law is an amendment to a 100-year-old statute, the Lacey Act. The act includes a broad range of prohibited activities and associated penalties. For example, knowingly engaging in a prohibited activity is a criminal felony. This could result in a fine of up to US$500,000 (for companies), US$250,000 (for individuals), or twice maximum gain from the transaction, forfeiture of the timber in question, and a possible prison sentence of up to five years
4. The U.S. Congress has renewed the 'Burmese Freedom and Democracy Act', which includes a ban on the importation of, "any article that is a product of Burma", each year since 2003, most recently in July 2008.

Global Witness investigates and campaigns to prevent natural resource-related conflict and corruption and associated environmental and human rights abuses

Additional media materials: quotes and company case studies, excerpted from full report

The ‘snake businesses’ of smuggling timber – quotes from those involved

Bribery, false papers, transportation at night and avoiding checkpoints are just some of the ways timber traders are using to get around the import restrictions on the Burma-China border. These quotes are extracted from Global Witness’ report, A Disharmonious Trade: China and the continued destruction of Burma’s northern frontier forests

“The closure does not matter to us. There is always a way to solve a problem naturally.” Employee at leading timber processing company in Ruili, Dehong Prefecture, April 2006 p18

"I am most afraid of getting caught by the Burmese military government army. […] We avoid them by having many scouts working around the military camps. Every big logging company has a walkie-talkie system to pass on information and news between the logging workers and to tell them what to do, to stay or to move out, or to hide somewhere – it all depends on the movements of the military." Logger, Nabang, Dehong Prefecture, May 2006 p12

"Don’t worry about proper procedures. We can arrange it all for you. If you bring money, then business is simple." Timber businessman, Sudien, Dehong Prefecture, Yunnan Province, May 2006 p18

“Everybody knows another pass where there is no official checking point, no checking at all - and timber can be transported over with no problems.” Timber trader, Dian Tan, Baoshan Prefecture, January 2007 p19

"Depending on your actual power you can move timber in as you like by smuggling in the evening." Timber businessman, Yunnan Province, 2007 p 21

“You do not have to care about any procedures. If you bring money, business is simple. When you get the timber to Yingjiang you simply change the SFA certificate for timber transportation, and it can be transported anywhere in China. That’s all” Timber trader, Yunnan Province, 2007 P22

"[…] the situation of timber trade in Pian Ma is very complex and hard to deal with. In some situations we, representatives of the government, can only open one eye and close another." Customs official, Yunnan Province, January 2007 p30

Company Case Studies: Burmese teak still available despite import restrictions

During September and October 2006, Global Witness looked into the availability of timber originating from Burma at flooring companies on China’s east coast. Researchers visited three wholesale outlets, thirteen high street retail stores, and fourteen flooring manufacturers, mostly in or near Shanghai.

We uncovered widespread use of teak from Burma in the manufacture of flooring, along with other high value species such as black walnut. All but one of the fourteen companies visited said that it was still possible for them to obtain timber from Burma across the land border despite the import restrictions. Several companies admitted to an involvement in smuggling timber across the Burma-China border.

These companies all export wood flooring throughout the world, including to the EU and US. Several US-based companies are currently advertising Burmese wood flooring despite the fact that the US Lacey Act now bans commerce in illegally obtained timber and wood products.
Shanghai Detangu Wood Co., Ltd. (p49)

The flooring manufacturer Shanghai Detangu Wood, which is located on the outskirts of Shanghai, has over 100 employees and a monthly output of five containers of which 40% is for the domestic market and 60% for the international market. Teak along with black walnut is sourced from Burma and mainly exported to England, Japan and America.

Its main investor Charles Pan, manager of the Taiwanese company Flooring Yao Enterprise Co., Ltd., explained the following to Global Witness during a visit to Shanghai Detangu Wood when six of its senior staff were present: "Yes, there has been problems with the supply [of wood from Burma] because the Burma government imposed a ban on illegal logging and the Chinese government sealed off the border. But as everything else in China, there’s always a way. Other factories may have problems, but we are fine. […] We purchase teak and black walnut in Kunming – it comes from Burma of course. It can reach Shanghai in five days once the purchase has been made. […] The border with Burma is sealed off for the moment, and we have to play ‘guerrilla war’ with the authorities and smuggle the timber out of Burma. […] I have been to the border, of course. Burma and China are only divided by a thin river so you can see each other clearly across the river. On the bank at the China side, you often see some little timber processing factories popping up from time to time, sawing logs that have been transported secretly across the river. Then they disappear when the government cracks down. […] My company will not have a problem with supply – we have good connections. But we will also try and get teak from official channels. But it takes so much longer to get officially obtained logs and often the good quality ones are bought by companies from Thailand and Malaysia who have good connections with the Burma authorities […] We do need teak. The rich people from America and Israel and other places need teak to decorate their decks. It won’t be a problem for me. I’ve been in the trade for 18 years. I have my little ways.”

Jiangsu Zhangjiagang Yongan Building Materials Co., Ltd. (p50)

The Jiangsu Zhangjiagang Yongan Building Materials Co., Ltd. is located in Jiangsu Province near Shanghai. The company is family-owned and was established ten years ago.

Despite first claiming that all its supplies were imported legally the company representative later admitted to Global Witness that this might not always be the case. "Burma is a dodgy country with so little transparency. It is so hard to tell which method is legal and which is not. For us, it is important to get some supply. If you strictly follow the rule, then you’ll never get anything. Yes, the border is sealed, but golden teak is not that tightly controlled. And some people are specifically engaged in this sort of business. And we get our supply through them. Stable supply.” Error! Bookmark not defined.

Jiashan Longsen Lumbering Co., Ltd. (p51)

During Global Witness' visit to the Jiashan Longsen factory, in Zhejiang Province near Shanghai, a truck with teak from Burma arrived at the company compound. One of the two sales representatives Global Witness researchers were speaking to said, "See, we got this overland. Smuggled in of course. Tell your colleague that we can guarantee the supply. We Chinese are very resourceful. We are the best at finding holes. Otherwise, how can we continue to do the business?"

The company, which had 320 workers and an annual output of about 60,000 m2 of engineered and solid flooring, had been affected by the border restrictions. Supply was now less certain and prices had gone up by 30% during the previous 6 months. However, the company representatives were keen to stress that it could still meet customer demand. If interested, the company could deliver 4,000-5,000 m2 of teak flooring within 40-45 days.

Global Witness investigates and campaigns to prevent natural resource-related conflict and corruption and associated environmental and human rights abuses