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Undercover investigation links Indonesian timber traders to trafficking

Investigators pretending to be customers have covertly filmed Indonesian timber traders allegedly talking about how they exported a protected hardwood to China, where environmentalists say it is turned into furniture and building products for use worldwide, including Europe and the U.S. The names and video have been made public.

The Environmental Investigation Agency (EIA) and Telapak today released a report about the investigation: Rogue Traders: The Murky Business of Merbau Timber Smuggling in Indonesia (pdf). In it they identify two businessmen they accuse of being ”two of the major players in smuggling illicit merbau timber.”

The Environmental Investigation Agency is a UK-based charity that investigates and campaigns against a wide range of environmental crimes, including illegal logging. Telapak is an independent environmental organization based in Bogor, Indonesia.

EIA and Telepak made a video about their investigation, which includes footage filmed covertly by undercover agents posing as buyers talking to dealers. The traders are clearly identified as they talk about how they sent timber to China.

“The report is the result of the groups’ 2009-10 investigations and calls on the Indonesian government to launch criminal investigations into the pair and to protect merbau under the Convention on International Trade in Endangered Species (CITES),” EIA and Telapak said in a statement released with the report. CITES regulates global trade in threatened flora and fauna. Indonesia is a signatory of the international treaty.

Merbau is a valuable dark hardwood used to make flooring, decking, outdoor furniture, doors and window frames. Merbau logs in Papua are sold for between U.S.$250 and $300 per cubic meter. Merbau is heavily targeted by illegal loggers and timber smugglers due to heavy demand for raw timber in China and India, and for merbau products in Australia, the European Union and the U.S., according to EIA.

The EIA/Telepak statement continues:

“In 2005 the EIA/Telapak report The Last Frontier exposed massive smuggling of merbau to China on a scale so breathtaking that the Indonesian government responded with an unprecedented crackdown on illegal logging.

“However, despite significant progress being made against illegal logging in the past five years, enforcement action against the main players has stalled. The threat to Indonesia’s precious forests remains.

“In April this year the extent of ongoing illegal logging spurred President Susilo Bambang Yudhoyono to voice his frustration at the lack of progress in prosecuting illegal logging cases through the courts and to order his government’s taskforce on eradication of judicial corruption to investigate.

“Undercover investigations by EIA/Telapak in the past year followed the illicit merbau trade in China and Singapore, as well as Surabaya, Makassar and Papua in Indonesia.

“Merbau is a valuable hardwood used to make flooring, furniture and doors. Within Indonesia, almost all merbau trees are found in Papua in the east of the country. Papua’s forests form part of the last significant tract of intact tropical forests in the Asia-Pacific region. About a quarter of Papua’s forests have gone in the past 12 years.”

The undercover investigation

Following the October 2009 seizure in Jakarta of 23 containers of merbau logs destined for China, India and South Korea, EIA/Telapak investigators posing as timber buyers uncovered an operation which allegedly employed bribery and exploited failings in the monitoring system to acquire documentation for the shipment.

“The seizure exposes serious flaws in Indonesia’s system for checking the legality of timber systems,” EIA and Telapak said.

While unwittingly speaking with investigators, a trader is alleged to have ”admitted smuggling up to 50 containers a month of merbau square logs (called flitches) to China, in contravention of Indonesia’s log and sawn timber export bans. He also claimed to bribe customs officers to ensure safe passage out of Indonesia,” EIA and Telapak said.

The invetigators also probed the activities of a trader in the city of Surabaya, in East Java. EIA/Telapak have submitted several reports on the activities of the trader since 2007 to Indonesian authorities, “but he has yet to be investigated,” the EIA/Telapak statement said.

The Surabaya trader is accused of using a variety of methods to circumvent the authorities, and it is also alleged that he is protected by contacts in the government and local parliament.

In a statement about the report released today, EIA Campaigns Director Julian Newman said: “While the huge quantity of illegal timber flowing from Indonesia during the first half of the decade has declined, effective law enforcement against those responsible–the financiers, company bosses and corrupt officials–has been woefully inadequate.”

“It is time for Indonesia to redouble its efforts to combat illegal logging and timber smuggling by going after the main culprits,” Telapak’s Hapsoro added.