Total Systems Failure

10-07-2018 2 articles 3 min #143482

Our two-year investigation reveals that European company Norsudtimber - the biggest single owner of logging concessions covering over 40,000 km2 of rainforest in the Democratic Republic of Congo (DRC) - is operating illegally on 90% of its sites.

At the same time, Norway and France are planning to fund an US$18 million programme, which includes backing the expansion of industrial logging in DRC and support to Norsudtimber - which is headquartered in the Alpine tax haven of Liechtenstein. This directly contradicts both countries' climate and forest protection goals.

Expanding industrial logging in DRC's rainforest could generate 35 million tonnes of extra CO2 emissions per year, thereby accelerating climate change.

China, Vietnam, France and Portugal are also all failing to stop Norsudtimber's illegal timber trading: 78% of its timber exports went to Vietnam and China between 2013 and 2017, 11% went to Europe, with the majority going to Portugal and France. Almost 60% of the timber exported comes from endangered or vulnerable tree species.

The report "Total Systems Failure" shows how a global web of secrecy - made up of tax havens and shell companies listed in Liechtenstein, Dubai and Hong Kong - is facilitating this illegal international trade whilst protecting three Portuguese brothers at the head of the company from scrutiny. Norsudtimber's detailed response to the allegations is included in Global Witness' report.

Download the full investigation here (PDF)

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newsnet 18/07/10 16:36
nearly 50% of the tree species Norsudtimber planned to fell in the first four years of operations of its logging concessions are listed as "endangered" or "vulnerable", by the IUCN.
DRC has one of the richest biological diversities in the world and is home to over a thousand species of birds, 430 species of mammals, and hundreds of species of reptiles and amphibians.

This heritage, however, is under threat. There are currently 34 mammal species in DRC listed by the IUCN as “vulnerable”, “endangered” or “critically endangered” due to various threats. These include poaching, habitat loss, climate change, diseases, and other factors. Six of these species are threatened by an “unintentional” side-effect of “large-scale” logging and wood harvesting – including two of the species most closely related to humans, chimpanzees and bonobos. According to the IUCN assessment on chimpanzees, some trees of “high importance to chimpanzees for food” are being logged. The assessment on bonobos adds that although “logging and mining do not yet occur on a large scale in bonobo habitat, industrial extraction could become a serious threat in future”. A 2017 study found that 60% of primates worldwide are threatened by habitat loss from logging and wood harvesting.

Despite the social and environmental impacts of industrial logging and the shaky theory on which it is based, the French, German and Norwegian governments have or are preparing to make available €28.3 million between 2011 and 2022 to promote and expand logging under SFM principles in DRC.
"Caterpillars bring me food and money. But the quantity has much diminished, because they cut down the trees where caterpillars live"
The amount of funding available for the forest sector in DRC is US$29.6m.360 The 2018 milestones in CAFI’s letter of intent with DRC’s government include reforms associated with the lifting of the moratorium on the allocation of new industrial logging concessions. Other objectives for its work in the forest sector include:

- Revising the Forest Code, by “addressing challenges linked to sustainable industrial, artisanal and community forest management”.

- Stabilising illegal logging by 2020.

- Applying the Forest Code to “industrial forest concessions”, including cancelling those without management plans by 1 January 2019, at the latest

Sustainable forest management’ is a convenient theory that allows donors to support an industry that will supposedly bring development income and protect the environment
It is time for donors to accept the lack of scientific backing and realities on the ground that have laid to waste the ideals of SFM in DRC and the wider region. Donors should instead use their funds and influence to demand political commitment and concrete progress towards tackling the drivers of forest loss, including: a ban on industrial exploitation in IFLs and increased geographical limits on industrial logging, improving governance, ending impunity and corruption and guaranteeing transparency.

This should also involve the recognition of the rights of local communities and the pursuit of alternative development pathways that contribute to local welfare and maintain environmental integrity, such as community-based forest management.

Under no circumstances should international donors support logging companies, nor any industry with a significant negative environmental impact. Nor should they support an expansion of logging or the lifting of the moratorium on the allocation of new industrial logging concessions. Opening up DRC’s forests to loggers would have disastrous consequences for this vast and beautiful rainforest, the endangered species it contains and the communities and global climate that it supports.


The governments of countries providing financial support to DRC or trading with it play an important role in this system
The DRC government also has a key role to play, by not allowing the moratorium on the allocation of new industrial logging concessions to be repeatedly breached.
All three of these crucial cogs are broken, and allowing destruction to seep through the system and wreak havoc on the forest. Norsudtimber has been able to exploit the weaknesses in the system: by paying lip service to the tenets (of the albeit flawed model) of Sustainable Forest Management but without actually following them; a fragile political climate, and a state of impunity for corporate actors.



-- Take enforcement action against Norsudtimber and its subsidiaries in DRC: -- Immediately cancel Norsudtimber’s concessions that have no 25-year management plan in the required period, as set out in the Forest Code.

-- Audit Norsudtimber subsidiaries in their compliance with social agreements and outstanding obligations to local communities as a basis for enforcement.

-- Investigate the compliance of Norsudtimber subsidiaries with the Forest Code and impose sanctions for breaches, including revoking concessions.

-- Investigate the possibility of transfer pricing, tax avoidance, tax evasion and other illegal activities, arising from Norsudtimber’s corporate structure.

-- Demonstrate commitment to upholding DRC law and to protecting forests, by enforcing DRC law against offenders in the industrial logging sector and in the administration (including its own present and former ministers), cancelling illegally allocated logging concessions, and maintaining the moratorium on the allocation of new industrial logging concessions. It should also cancel all oil blocks that overlap or are adjacent to protected areas and national parks.

-- Establish full forest sector transparency, including: -- Publish the 25-year management plans of logging companies, as well as all of the concession contracts, four-year management plans, social agreements, annual contributions to local development funds, taxes, logging permits and quarterly production reports.

-- Publish the status of infrastructure projects the logging companies are contractually obliged to provide.

-- Publish information on the beneficial owners of companies operating concessions.

-- As part of the revision of the country’s forest policy and Forest Code: -- Introduce a ban on industrial-scale activities and exploitation in intact forest landscapes.

-- Prioritise the creation of legal, institutional and financial architecture for community-based forest management systems.

-- Develop a national plan for the provision of essential infrastructure services such as health and education to forest and other communities.

-- Ensure meaningful, prior and public consultation with civil society, including representatives of local communities, in the revision process.


-- Do not provide direct or indirect subsidies, financial or other support to logging companies or the government that promotes or perpetuates the system of industrial logging in DRC.

-- Oppose the direct or indirect lifting of the current moratorium on the allocation of logging concessions.

-- Support the development of a national plan for the provision of essential infrastructure services such as health and education to forest and other communities.

-- Commission a new study on current and future drivers of deforestation and forest degradation in DRC, and design new or adapt existing programmes in accordance with the findings.

-- Support the introduction of a ban in DRC on industrial scale activities in intact forest landscapes and increased geographical limits on industrial logging.

-- Call on the DRC government to ensure strict enforcement of DRC’s Forest Code, tackle impunity and corruption in the forest sector.

-- Support the recognition of land tenure rights of local communities, including in concessions given back to the state, and the promotion of community-based forest management that takes a sustainable approach to forests.

-- Introduce full transparency with respect to current and past donor programmes, which have supported the logging sector, including: -- Publish the terms of reference, evaluation reports, including total cost, of projects which support logging companies in DRC and the Congo Basin as a whole, and disclose beneficial owners of the companies they subsidise.

-- Publish, on a project by project basis, key indicators measuring the success or failure of the SFM model in the tropics, including tax revenues, provision of effective infrastructure, human development indicators, employment figures and the ecological condition of the forests before these projects, and currently.

-- Commission and publish reviews into the science behind sustainable forest management theory including an examination of the viability of rotational periods against tree growth rates.

newsnet 18/07/10 18:52

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