Carlton Owen

While the United States and Canada continue their more than four-decade war over softwood lumber imports/exports, a malignant enemy is undercutting the forest sectors in both nations and stealing billions in global economic value every year.  Illegal logging – the harvest, transportation, purchase, or sale of timber in violation of laws – not only takes money from the pockets of landowners, both public and private, but it also destroys irreplaceable ecosystems and drives human-induced climate change as well.

How Big is the Problem?
The American Forest and Paper Association (AF&PA) puts the impact to the U.S. industry at $460 million annually. While not chump change, the number appears to be a rounding error to the problem globally.  Yes, even in first-World nations like Canada and the U.S., illegal logging is still an issue, albeit minor by comparison to other nations.  I’ve known landowners who had just a few walnut or birds-eye maple trees stolen each of which might have been worth several thousands of dollars.  Perhaps even more common is the taking of “just a few trees” across the boundary from a neighbor’s property.  Often these crimes aren’t discovered until months or even years later.

Estimates of the global costs of illegal logging vary widely from a low of US$15 billion to more than US$200 billion annually.

• The United Nations and Interpol estimate that illegal logging costs the global community up to $206 billion each year.
• USAID puts the number at between $51–$152 billion annually. Their website even calls it “the illegal timber industry,” further noting that as much as one-half of tropical timber is illegal.
• WWF guesstimates a loss of $30-100 billion/year.
• The World Bank sets the number at “only” $10 billion annually from illegal logging, with governments losing an additional $5 billion in revenues.

It’s far beyond me to understand how the estimates can range so widely.  Needless, the impact is REAL and VERY LARGE.

What Drives the “illegal timber industry”?
Perhaps it’s too trite to say that where there is so much money to be made there are always those who will try to find a way to profit.  When infamous bank robber Willie Sutton was asked why he robbed banks, he cooling responded, “Because that’s where the money is.”  Sadly, most of the illegal trade seems to be rooted in intransient causes – backbreaking poverty and corruption.  In travels to Brazil and Indonesia I’ve seen up close how perverse both of these drivers are.

What about Solutions?
If the “war on drugs” in the U.S., has taught us anything, the answer isn’t likely to be found just in greater investments in law enforcement.  Too, with poverty so persistent in the developing world and so much money to be made, we can’t expect people to consider the greater good.  As so much of the illegal wood flows from parks and reserves, the “tragedy of the commons” is at play, as well.

We must appeal to the power of first-world markets and technology to cut deeply into the problem.  In my last couple of years at the U.S. Endowment for Forestry and Communities, we hit upon what I believe could be the breakthrough solution – blockchain technology.  The ability to track wood anywhere in the world from its source to the market.

In the “legal timber industry” we’ve all-too-often hidden behind the complexity of our raw material supply chain as cover for why even forest certification was too big of a challenge to trace wood back to its source.  Yes, it’s true that a large sawmill or paper mill obtains its supply from literally thousands of sources.  BUT, with the power and falling cost of blockchain, not only can we no longer hide behind a curtain, we now have the tools to lead and address illegal logging once-and-for-all.

ForesTrust Could be that Answer
The Endowment created ForesTrust, a blockchain ledger-based technology, as the vehicle that if embraced could be the driver of not only greater efficiency and cost savings in everything from modernizing ubiquitous wood tickets for each load delivered to forest certification to driving the nail in the wooden coffin of illegal logging.

Wouldn’t it be worth the investment of a few million dollars to take a band saw to the billions in losses caused by illegal logging – all while driving other efficiencies in more day-to-day needs?  All it will take to make this happen is for a few forward-thinking forest products companies to work with their major customers to work out the kinks in the system.

Over time, if a raw material producers could not prove the provenance of their product via blockchain, then it would have to be assumed to be either illegal or at the very least off limits for purchase. 

It’s past time to stop the flow of illegal wood and wood products.  Landowners and governments need the revenue that is being stolen.  Legally produced wood and wood products producers need the bottom-line value being lost because of illegal products in the market.  AND our precious forests around the world – especially those in parks and reserves – need greater protection for the benefit of current and future generations.

All we need now is the will to adopt the solutions that are at hand

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Carlton Owen has 45 years’ experience in leading change for the greater good of the sector including stints with Potlatch Corporation; policy work with trade organizations in Washington, DC; a decade with Champion International Corporation; owner of his own global consulting practice; and the last 15 years as founding chief executive of the U.S. Endowment for Forestry and Communities. He can be reached at carltonowen1@gmail.com