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Illegal Logging

Illegal logging represents a serious problem in some parts of the world, depressing the value of legally produced timber products in international trade, causing environmental degradation, and denying governments revenue.

Although the scale of these impacts is uncertain, some estimates (UNECE/FAO 200627) suggest that illegal logging accounts for approximately 10 percent of harvests, and other studies conclude that this number could be as high as 20 percent (Wood Resources International LLC and Seneca Creek Associates 2004). In 2006, the World Bank estimated that the annual global loss was approximately $15 billion, taking into account losses to governments and legal competitors. In 2004, other estimates suggested that worldwide, illegally logged roundwood plus lumber and plywood produced from illegally harvested wood had a market value of $22.5 billion. About 22 percent, roughly $5 billion, entered world trade and represented 7 percent of the $69 billion in world trade of primary wood products (Wood Resources International LLC and Seneca Creek Associates 200428).

The impact of illegal logging on the US wood products market is significant. Illegal logging represents an opportunity cost of $460 million per year for US exporters. Elimination of illegally harvested roundwood, also called “suspicious” roundwood, in the global market would raise US prices by 2 to 4 percent, thus increasing the value of domestic wood products shipments by perhaps as much as $500 million to $700 million annually; it would also affect the pulp and paper sector (Wood Resources International LLC and Seneca Creek Associates 2004).

Governments and industry have joined forces to combat illegal logging and stop imports of suspicious wood products. In November 2005, 43 counties accepted by acclamation the St. Petersburg Declaration at the Ministerial Conference on Forest Law Enforcement and Governance, which represents one of the major efforts.

The harmonization of national procurement policies and regulations that affect timber trade worldwide could create the necessary rules for ensuring legal and sustainable timber production. This will also discourage artificial trade barriers. The European Union’s plan for Forest Law Enforcement, Governance and Trade seeks to link good governance in developing countries with the legal instruments and leverage offered by the internal EU market. The European Union is encouraging governments to remain neutral regarding competing schemes when developing their public procurement policies and to focus on the promotion of sustainable forest management, using certification as the tool for achieving this objective (UNECE/FAO 2006).

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