Logs are stacked near an informal gold mine along a section of the Interoceanic Highway in Peru’s department of Madre de Dios. (Mariana Bazo/Reuters)

WASHINGTON, D.C., U.S.A. – Andean narco-traffickers are smuggling illicit timber, often using the same transport networks to move wood and drugs and threatening the environment with unsustainable logging.

An estimated 80% of Peru’s timber exports are illegal, according to the World Bank, which estimated those exports generate US$72 million in annual profits for timber smugglers. Last year, illegal logging cost the Peruvian government more than $250 million in lost tax revenue, unpaid fees and environmental damage.

The Environmental Investigation Agency (EIA), which specializes in environmental crimes, said in an April report traffickers can earn US$1,700 for a high-quality mahogany tree sold on the Peruvian black market, and about US$1,000 for a cedar tree. Both tree species are protected under Peruvian law and international conventions aimed at ensuring sustainable logging and reducing the threat of global warming.

In the U.S. lumber market, a Peruvian mahogany tree sells for US$11,000, while a cedar tree fetches US$9,000, according to the EIA. The report, “The Laundering Machine,” states a small group of “timber barons” dominates the illegal logging business and has put together an elaborate logistics network involving loggers, traders, truckers and boatmen to secure the product and ship it out of Peru. Since timber and drug smuggling involve the same systems, the two illicit trades have started to overlap.

Smugglers of drugs, timber have much in common

The initial connection between the two is believed to have come when drug smugglers saw potential in utilizing timber shipments to hide drugs.

Billy Hammer, former head of the Central Amazon Loggers’ Association, said organized crime is heavily involved in the illicit timber business and narcotics and illegal logging are interconnected.

“They use logging to traffic cocaine,” he said. “They hide the cocaine in the wood, and they launder the money through the logging industry.”

The EIA said the case of Luís Valdez Villacorta, former mayor of Pucalipa – a key Peruvian logging and timber town – highlights the nexus between drug smuggling and timber smuggling. In 2003, Peruvian police found 523 kilograms (1,153 pounds) of cocaine concealed in plywood owned by Valdez Villacorta that was being prepared to be shipped to Mexico.

In 2008, when Peruvian police officers arrested Valdez Villacorta, they described him as a major cocaine trafficker. Drug smuggling and money laundering charges were filed against the ex-mayor, and authorities seized 34 properties, 44 boats and 200 vehicles.

On May 10 of this year, an appeals court absolved Valdez Villacorta of involvement in the 2004 murder of journalist Alberto Rivera Fernández, who had been investigating the drug and logging trades in Pucalipa.

The court said there was not enough evidence to prove the Valdez Villacorta had ordered the journalist’s slaying – a ruling Rivera Fernández’s family is appealing to the Supreme Court. The family’s lead lawyer, Carlos Rivera said the court has failed to solve “the greatest crime committed against the Peruvian press” in recent memory.

World Bank: Illegal timber trade wreaks havoc on environment

In its study of the illegal timber trade in Peru, the EIA chronicles a number of detrimental spinoff activities:

• The swindling by traffickers of indigenous communities through the removal of valuable timber from their lands;
• The exploitation of poor migrants hired to work at remote camps and kept as virtual hostages for months at a time;
• The alleged sexual abuse of female workers on plantations.

In March, the World Bank issued its report on the dangers of illegal logging, noting that in some countries, illegally harvested logs account for as much as 90% of the timber trade. It added that illegal logging causes “enormous environmental and societal costs” by threatening biodiversity, increasing carbon emissions, eroding soil, prompting flooding, causing landslides and undermining the resource-based livelihoods of rural people.

“The overall message of this paper is that law enforcement [investigation, prosecution, imprisonment, and the confiscation of illegal proceeds] can no longer be shunted into a corner,” the 56-page report stated. “Rather, it needs to form part of an integrated and sustainable solution to the problem of illegal logging.”

The bank noted illegal loggers are clearing the equivalent of a football field of the world’s most valuable forests every two seconds. It said governments must work harder to introduce preventive measures, including educating consumers about the problem, promoting legal reforms governing forest tenure and timber rights, and using certification and related methods to make it easier to differentiate between legal and illegally logged timber.

But while “preventive actions against illegal logging are critical,” said Magda Lovei, the bank’s sector manager, “we also know that they are insufficient.”

Local and international law enforcement should target the criminal operations that profit most from the trade, she added.

Groups urge swift action against smugglers

Criminal justice personnel should deploy the same tools they use to fight narco-trafficking and money laundering to investigate, prosecute and punish the kingpins behind large-scale illegal logging, according to the report.

Bank officials and environmental activists argue that enforcement needs to “follow the money” and track the proceeds from illegal logging as they move through the banking system to help identify kingpins and seize ill-gotten profits. The report states law enforcement should focus less on low-level criminals and more on the “criminal organizations or intermediaries ultimately responsible.”

“All too often, investigations – in the rare event they do take place – are amateurish and inconclusive, and the few cases taken to court tend to be of trivial significance,” according to the report.

National Geographic has reported that isolated Peruvian Amazon tribes have been fleeing Peru to escape the encroachment of illegal loggers.

Last August, the Upper Amazon Conservancy – a watchdog nonprofit that works with the Peruvian Park Service and indigenous tribes to protect the biodiversity of the upper Amazon River – warned that illegal mahogany loggers had penetrated the Murunahua River tribal reserve in southeastern Peru and built an extensive clandestine network of forest roads

“Loggers now access remote territory inside the reserve, where they cut highly valuable mahogany trees and sneak the slabs out the ‘back door’ to waterways less frequented by local tribesmen,” the NGO said.