The illegal logging and smuggling of merbau timber from Papua involves a complex web of international middlemen, timber barons and financial backers, who cooperate with senior Indonesian government officials, environmental activists say.
"China and India are the main destinations for illegal Merbau logs. But before the logs get there, they have to travel to several other countries to be 'laundered' – to have their ports of origin changed," Telapak forest researcher and campaigner Yayat Afianto told The Jakarta Post.
A recent Telapak/Environmental Investigation Agency report shows that the smuggling of Merbau logs involves international syndicates working in Papua, Jakarta and Surabaya and in the neighboring countries of Malaysia, Singapore, Hong Kong, and Vietnam. These networks often collaborate to ship the timber to China and India where it is processed and sold across North America and Europe.
And not all of the wood is illegally felled – although an estimated 70 to 90 percent of it is. Corrupt officials in Papua have persuaded and sometimes forced Papuan loggers to sell the wood in legal forest concessions for around US$10 per cubic meter, when the logs can fetch more than 20 times that on international markets, the report says. And this legal logging then serves as a front for the much larger illegal industry.
Papua's legal forestry concessions date from 1999, when the government issued a decree permitting the allocation of small-scale local concessions of 100 hectare community plots as part of special autonomy for the region. According to Forest Watch Indonesia, about 300 community units now hold almost 240,000 hectares of forest concessions in the province.
Representatives of timber barons then went to the concession areas, promising to help villagers develop their resources, with developers sometimes building roads and churches for the residents in exchange for the valuable timber on their land. More often than not, the value of the wood taken from these areas far exceeded the value of the projects, the report says.
Several Jakarta and Surabaya middlemen then found buyers for the merbau wood and guaranteed delivery of the timber to the agreed destinations, Telapak report said.
These brokers, who have close ties with high ranking government and security officials here, work with several Malaysian companies, which are already logging in Papua, using their heavy equipment transported from neighboring Papua New Guinea and Sarawak, Malaysia.
With the involvement of the Malaysians, only a fraction of the wood was sourced legally from the community programs.
"The problem is that the authorities in Sarawak and on the Malaysian peninsular seem to have different policies on logging. While environmentalists have successfully persuaded the Malaysian government to help Indonesia combat illegal logging, the Sarawak administration seems to have no obligation to follow this commitment," Yayat said.
Telapak coordinator Arbi Valentinus said logs were often taken to Papua New Guinea to have their papers faked, with officials there "certifying" them with them false documents and changing their places of origin.
Often timber illegally cut in PNG is also given false documentation stating it is Indonesian, Arbi said. In one example, the documents said the ship was carrying a timber subspecies that could only grow in Indonesian Papua, he said.
Illegally cut merbau wood was also being increasingly transported to Vietnam and given forged documents of origin there, Yayat said. Vietnam had become a popular destination for the illegal wood since 2002, when after international pressure the Malaysian government slapped an import ban on all logs from Indonesia, he said. Vietnam still allows timber imports from Indonesia.
"In recent years, Papuan timber has been sent to Vietnam before it is shipped to China. We have evidence to believe that these new Vietnamese companies are owned by Malaysians," he said.
The wood was also taken to Hong Kong and Singapore, Yayat added. The report says brokers in Hong Kong act as a vital bridge to the Chinese mainland, establishing connections with buyers there. Meanwhile, Singaporeans brokered deals with Indian buyers, chartering cargo vessels and barges to transport the contraband timber to destinations on the subcontinent.
"Many of the financial transactions for the merbau logs flow through Singapore's banks, including the opening of letters of credit between buyers and suppliers," the group report said.
As for the routes to India, Yayat believed the smuggling took place through the Philippines. "We think that they may also adding to their loads there, by picking up Philippines timber," he said.
The Greenpeace's Philippine office, however, doubted illegal loggers took more wood from the country. "The Philippines has no more forests. I believe the smugglers just use our country as a transfer point," the group's campaign director, Von Hernandez, told the Post.
After being processed in China, the timber products are then sold in North America and Europe. "Meanwhile, merbau that manufactured in India is sold to Japan," Arbi said.
The Telapak report notes the wood products are sold through international home improvement chain stores, such as the Home Depot and Lowe's that have thousands of stores in the US and Europe.
The report says more wood flooring was sold in 2004 than ever before, with Europe and the US consuming an estimated 189.5 million square meters – enough to floor all of Washington DC.