Corruption Stains Timber Trade

"For local people, it just gets more difficult," said a community leader in Kachin state, in Northeastern Burma, bordering China, where Chinese logging has stripped mountains bare. He spoke on condition that he be identified only by his given name, Shaung, citing threats to his safety. "The commanders sell our natural resources and our local people get nothing."

'Take-and-Run System'

The buzzing sawmills and clattering furniture plants in China explain why the pace of logging in Papua New Guinea is four times faster than legally permitted, according to Forest Trends. It explains why ships ferry logs to China from the African nation of Gabon, where 70 percent of logging is illegal, according to the World Bank. It explains why Chinese traders armed with cash line the Russian border, overwhelming the regulators charged with preserving trees.

"There is no strategy for forest resources," said Alexei Lankin, a researcher at the Pacific Geographical Institute in Vladivostok, Russia. "What you have is a take-and-run system."

Chinese authorities acknowledge they rarely challenge imports. As long as shipments are accompanied by harvest permits issued by authorities in the country of origin, customs officers allow the wood in, making no effort to authenticate the paperwork.

"China can only ensure that the logging companies and traders obey Chinese law," said a researcher in Beijing affiliated with the State Forestry Administration. "What they do in other countries is not something the Chinese government can control."

Each year, illegal logging costs Indonesia at least $600 million in lost royalties and export taxes, more than double what the government spent to subsidize food for the poor in 2001, according to the World Bank. Five years ago, China pledged to help Indonesia halt shipments of merbau, a threatened tree species. Shippers have evaded an Indonesian ban on exports of merbau logs by transporting them through Malaysia, forging documents saying that the trees were harvested there, Chinese traders said.

But China has done nothing to follow through.

"They said they have no authority to implement this kind of agreement," complained Tachir Fatmoni of the Indonesian Forestry Ministry. "Merbau is still getting to China."

North of Shanghai, the Zhangjiagang port has become perhaps the largest trading place on Earth for tropical logs. According to state figures, $500 million worth of wood passed through the port in 2004.

One morning a year ago, tens of thousands of logs laid stacked on the muddy banks. A four-story hotel next to the port had become a trading house where buyers from furniture and flooring factories haggled over cups of green tea. A bulletin board in the lobby was jammed with offers for logs from South America and Africa, and one trader whispered to a visitor that for the right price, he could get his hands on merbau.

Bribery at the Border

In the rugged mountains of southwestern China, automobiles worth more than many villagers earn in a lifetime traverse dirt roads, a testament to the riches that Chinese timber merchants are extracting from next-door Burma. The trade amounts to a joint venture between China's frontier capitalists and corrupt Burmese generals leading one of the world's most repressive regimes.

For more than four decades, Burma's military dictatorship has plundered the country's natural resources. In the northeast, ethnic Kachin minority communities resisted the regime's rule with a long-running guerrilla war, until they signed cease-fire deals with the Burmese government in the 1990s. The Kachin had been sustained by jade mining, but as those rights went to the government, they shifted aggressively into logging, leaning on Chinese partners for capital, laborers and transport.