About 80 percent of Peru's total timber exports are illegal, bringing in profits of up to $72 million a year, according to the World Bank. As watchdog group the Environmental Investigation Agency (EIA) points out in a new report, traffickers can earn $1,700 for every high-quality mahogany tree sold in the Peruvian black market, and about $1,000 for a cedar tree.
The report, titled "The Laundering Machine: How Fraud and Corruption in Peru's Concession System are Destroying its Forests," says that Peru's logging industry is controlled by a small group of "timber barons." These businessmen rely on a wide network of collaborators, from the local bosses who hire loggers, often under cruel conditions close to forced labor, to the traders who submit false export permits to government authorities, to the truckers and boatmen who move the wood out of the Amazon.
The sheer number of actors involved in the business of illegally exporting wood is just one of its similarities with the drug trade.·Both businesses involve buying the complicity of public officials, and designing elaborate schemes for shipping the product undetected out of the source country.·And, as the EIA observes, both illicit industries are driven by powerful economic incentives. Because protected wood like mahogany and cedar fetches such high prices on the international market, and because violators of the law are rarely prosecuted, traffickers see the illicit wood trade as a good bet.
There is evidence of deepening connections between the trade in illicit wood and the trade in drugs. According to a 2006 US State Department cable released by whistleblower site WikiLeaks, Andean drug traffickers who move coca paste and opium are increasingly interested in timber, since they can use the same networks to transport both products. Timber is also useful for disguising drug shipments. Such seizures are common in Peru, with police reporting seizures of hundreds of kilos of coca base and cocaine hidden in wood shipments. As the cable notes:
The transported mahogany trunks, or stacked loads of sawn lumber, are so huge, and the number of shipments so massive that police catch only a tiny fraction of the coca that they estimate is transported from the Andes downriver to Brazil. DEA's Lima Country Office -- which actively assists [Peruvian] law enforcement in eliminating the concealment of illicit drugs in wood shipments, believes that suspected shipments are large.
The most prominent case illustrating the nexus between the drug and timber trades came with the 2008 arrest of Luis Valdez Villacorta, mayor of Pucalipa, to the east of the country. At the time, Peruvian law enforcement described him as their most important capture since airline kingpin and alleged cocaine trafficker Fernando Zevallos was detained in 2005.
Pucalipa is one of the most strategically important cities for Peru's timber trade, where lumber is bought, sold, and moved via truck over the Andes. Peruvian law enforcement discovered 523 kilos of cocaine hidden in a plywood shipment in 2003, and traced the drug back to one of Valdez's businesses. When he was arrested five years later, investigators seized 34 properties, 44 boats, and 200 vehicles. Police said he had a total of $71 million in assets, whose origin could not be properly accounted for -- a measure of just how lucrative his timber-drug network was. According to a 2008 US State Department cable, Valdez controlled the major drug trafficking routes from Peru into Brazil, and used the logistical and commercial networks in his timber business to move cocaine.
Peru's illegal logging trade causes massive environmental damage, is driven by forced labor, and feeds corruption and violence. The costs are already high, and the fact that traffickers are also taking advantage of the illicit timber network to move narcotics is one more incentive for importers to be wary of Peruvian-sourced wood. But as with illicit drugs, the appetite for high-value wood like mahogany is large, and the number one customer is the US.