Some assembly required
By Charlie Pye-Smith, New Scientist, 12 August 2006
To China, these forests represent a lucrative expanse of flat-packs and building materials, but at what cost? Charlie Pye-Smith follows the illegal timber trail devastating Russia’s far east.
They say one man’s meat is another man’s poison, and it couldn’t be more true of Yuri Kostin and Baokui Yang.
In a dimly lit log cabin near Dalnerechensk, a timber town in the Russian far east, farmer Kostin serves me a wild boar stew, pickled mushrooms and pungent liquor made from Korean pine nuts. Meals like this, gathered from his small holding, will soon be a thing of the past, he says. “If you’d come to this district 10 years ago, you’d have seen ash trees a metre in diameter and plenty of mature Korean pine. But all the big trees have gone.”
A huge, bear-like man with piercing blue eyes, Kostin spreads the blame for this among a range of authorities: the district’s Forest Service for not clamping down on illegal logging; local politicians for colluding with the illegal loggers; and the Chinese for fuelling the trade in timber. In 1996, Russia exported 529,000 cubic metres of timber to China. By last year, exports had risen to over 20 million cubic metres. “This whole area will soon be a desert,” he says.
A week later I’m taken to lunch by Yang, a timber importer who lives in the bustling Chinese border town of Suifenhe, 250 kilometres south-west of Dalnerechensk. As we walk to the restaurant, he waves a hand at the scene. “When I was young, this was a very poor place, and my family were very poor,” Yang recalls. Back then, Suifenhe was a dirtroad farming settlement with a few thousand inhabitants. Now over 130,000 live here.
The army of migrant labourers who came here to make a living may occupy depressing shanties, but the heart of the town tells a different story. Great swathes of high-rise buildings glitter in the winter sunshine, while in fancy restaurants like the one we are going to, the nouveaux riches dine on a bewildering array of crustaceans, fish and poultry. It’s a far cry from the simple fare of Yang’s youth.
Kostin and Yang are just two people from different ends of a single Russian logging trail. There are countless more like them, and many such trails. Almost all the trails are awash with bribery, corruption, poverty and profiteering, but what the world most urgently needs to wake up to is the vast scale of their environmental destruction, and the resulting hardship for locals.
The runaway plunder of the Russian far east and neighbouring Siberia owes much to the floods that devastated the middle reaches of the Yangtze river in 1998, killing several thousand and making many millions homeless. Deforestation took much of the blame, and the Chinese government introduced a ban on logging natural forests. China’s wood-based industries were forced to look elsewhere for supplies, and Russia, with its vast expanses of natural forest – it has over half the world’s coniferous forests – rapidly became their major source.
Timber imports to Suifenhe, the key gateway between the Russian far east and China’s Heilongjiang province, have risen eightfold since the Chinese logging ban: 600 wagons of Russian logs roll into its sprawling station each day. Yang and his fellow citizens – including the 200,000 Chinese whose livelihoods depend on processing Russian softwood – have every reason to celebrate. Over the border, however, there are many more losers than winners.
Chinese demand for timber is rapidly deforesting Russia. According to Anatoly Lebedev, who runs the Vladivostok-based Bureau for Regional Outreach Campaigns (BROC), an organisation that has shed light on the complex and often criminal world of timber dealing, the Chinese have exploited Russia’s fragile democracy to ransack the country’s forests. In the Krasnoarmeiski district of the Primorsky Krai region, for example, over 400 Chinese are active in the local logging industry. That’s out of a population of 23,000. “Some are operating legally, but many are involved in the illegal trade of timber,” Lebedev says. Getting illegal logs – from trees cut down inside protected areas or from over-exploited licensed areas – means paying bribes to a host of officials, and many Chinese have ensured they are well-placed to do this. “The influence of the Chinese penetrates all municipal institutions, including the administration and the militia,” Lebedev says.
To give me an insight into how the logging business operates, Lebedev takes me to a cafe on the outskirts of Dalnerechensk to meet Gennady Baikov, a handsome man with shaven head and roughly tattooed forearms. Baikov used to have his own logging concession – an area of forest where he had exclusive logging rights – but he tired of paying bribes to local officials to ensure his timber reached the border and decided to change tack. Now he contracts out his band of loggers to medium-scale concessionaires.
Timber trail
Small concessions are much more likely to be involved in illegal logging than the larger operators, he says, although the latter frequently launder illegal logs. When Baikov was still running his concession, there were 60 other leasers in the district. “The largest paid US$25 per cubic metre in taxes. I paid around $15 in taxes. The rest paid $3, and that wasn’t in taxes to the government, it was in bribes to officials,” he says.
There is a lot of money made through the illegal logging business, and getting in the way can mean risking your life. According to one BROC report, attempts to crack down on illegal logging, which is often carried out using specially silenced chainsaws to avoid detection, have resulted in death threats to environmental inspectors. Baikov and Lebedev have calculated who gains what at each stage of the illegal timber trail, following a cubic metre of hardwood from the forests of Primorskiy Krai in the Russian far east to the border, where it’ll fetch $140. Approximately half goes to the Chinese middleman. Of the rest, a significant chunk goes on bribes. Local criminal gangs take $5 as protection money. A customs official and a member of the militia get $5 each. Forestry officials take $3 to turn a blind eye and the environmental inspector gets $5 to do the same. Another $9 goes on bribes to regional and municipal administrators.
So, while China might look like the villain at first glance, plenty of Russians – the ones with the big houses and four-wheel drives – are making a killing from unsustainable and sometimes illegal logging. None of this could happen without the complicity of politicians and bureaucrats.
The rot set in in 2001, when Russian president Vladimir Putin’s government reformed the way Russia’s forests were managed. The Federal Forest Service was abolished, and the local forestry offices called leskhozes were taken over by the Ministry of Natural Resources. “Before the reforms, every leskhoz had a large team of inspectors to enforce forestry law,” explains Artur Chernovol, a former chief state inspector for the Forest Service. “We were proud of what we did, and we were respected, but the whole system has collapsed.”
In Primorskiy Krai, the result has been many fewer inspectors, a dramatic increase in illegal logging, and an increase in corruption within the leskhozes. Nobody knows quite what proportion of the timber harvest in the Russian far east is illegal. WWF suggests it is somewhere between 20 to 50 per cent. Lebedev reckons it might be higher.
Lebedev, Baikov and Chernovol all argue that there needs to be profound political change if the forests are to provide a sustainable livelihood for large numbers of rural Russians, rather than short-term riches for relatively few. Besides clamping down on illegal logging and poor logging practices, they believe the authorities need to get better value from their timber by increasing the number of logs processed locally.
During Soviet times, approximately 40 per cent of the timber from the Russian far east was processed locally. However, the economic crisis of the 1990s ruined much of the processing industry, and now over 90 per cent of exported timber – excluding pulp and paper products – leaves Russia as raw logs, with the value-adding processing taking place in China, Japan and South Korea. What processing remains is often Chinese-run, set up by buyers to process logs before transporting them out of Russia. One sawmill we visit in the remote village of Ismailikha is entirely staffed by migrant Chinese workers. “All the timber goes to China now,” says Nikifor Kovera, a pensioner scouring the shabby market for cheap goods. “They don’t even leave us enough to mend our garden fences.”
Terneylesstroy, a company based in the town of Lesozavodsk on the Trans-Siberian railway to the south of Dalnerechensk, is trying to stem the tide of raw logs leaving Russia. “In 2000, we realised we only had low-quality timber left in our concessions, and we had to think of an alternative to exporting raw logs,” explains managing director Leonid Ivlev. The company now employs 250 people, who process some 40,000 cubic metres of timber per year for the home market. It has also entered into a joint venture with a Chinese company to manufacture plywood.
However, tax hikes means the odds are stacked against companies like Terneylesstroy. “Two years ago our production costs were $30 per cubic metre,” Ivlev says. “Now they’re $58, and that’s almost entirely because of taxes.” He talks contemptuously about the authorities in Moscow and their punitive tax system, and enviously about the business environment in China, where the government has obligingly oiled the wheels of commerce with dramatic cuts in import taxes on timber. What’s more, in border towns like Suifenhe quotas restricting the volume of goods that can be exported no longer apply to processed timber. So business booms while Russia’s forests – and those who live in them – suffer.
The extent of this suffering is abundantly clear thanks to a five-year research project coordinated by Forest Trends, a US policy group. It showed that China’s demand for forest products is exacerbating deforestation and illegal logging in Russia and many other countries. Not only do forest dwelling communities stand to lose their forests and their livelihoods, Chinese demand for timber has also been linked to human rights abuses.
The findings have provoked a mixed reaction in China. The State Forestry Administration denies the existence of illegal imports, but the Ministry of Foreign Affairs, sensitive to accusations that China is behaving irresponsibly, has said that it wants the country to clamp down on such imports.
“Until recently I was sceptical about whether our research was having any effect on the Chinese government,” explains project coordinator Andy White, now president of the Washington DC-based Rights and Resources Group. “But I sense that some parts of government now realise there is a serious problem which needs tackling.”
As well as denying the existence of illegal logging, the State Forestry Administration claims that China will be self-sufficient in timber by 2015, so any problem will be short-lived. However, China’s National Development Reform Commission denies this: it reckons the country will need to import 150 million cubic metres of timber a year by 2015.
Less bark, more bite
Assuming the commission is right – and Forest Trends thinks it is – what can the government do? “Chinese customs could be much more aggressive in determining precisely where imported timber actually comes from, and prevent timber which can’t be verified as legal from entering,” White says. “There’s little coordination with the customs offices of exporting countries – that’s something that’s urgently needed.”
Jintao Xu, deputy-director of the Center for Chinese Agricultural Policy, believes there are other measures the government could take. Most obvious, he says, is reform of the forestry sector. It could also educate Chinese nationals working in foreign timber markets. Xu also suggests introducing anti-bribery legislation to prosecute nationals engaged in illegal activities abroad.
It may be some time before China implements measures such as these, and only an incorrigible optimist would expect the Russian authorities to halt illegal logging in the immediate future. However, there is one link in the chain where real progress could be swiftly made: the sale of the processed products that make their way to the west.
Driven by demand in the US and Europe, China has rapidly become the world’s largest wood workshop, exporting 70 per cent, by volume, of the wood it imports. Since 1997, China’s exports of processed forest products such as furniture and plywood to the US and EU have increased eightfold. All the indications are that exports, and therefore imports, will continue to rise, and that will continue to ravage forests in the countries that supply China. “Cheap prices in the west are directly linked to the exploitation of some of the world’s poorest people and the destruction of their forests,” says White.
In the past, consumers in the US and Europe may have been ignorant about the impact of their buying habits on the forests of the Far East, but a spate of recent reports has changed that. So far though, most of the publicity has focused on China’s hardwood imports from countries like Papua New Guinea, where up to 90 per cent of the logging is illegal and most is for export. Compared with that, Russia’s forestry travails don’t make such dramatic headlines, not least because some 80 per cent of its exports to China stay in China, and most is not tropical hardwood, but boreal softwood used as concrete shuttering for China’s booming construction industry. Nevertheless, a fifth is processed for export, much of it for the US and Europe, and there is scope for serious scrutiny of the trade.
Some retailers, eager not to risk green boycotts, are already taking action. IKEA has established partnerships with WWF in China and Russia, while Kingfisher, whose subsidiaries include B&Q Castorama and Brico Depot, is talking to Greenpeace. The retailers are hoping this will help them to find legal and traceable sources of timber.
They will have to wait a while as far as Russia is concerned, suggests Josh Newell, the Vladivostok-based editor of The Russian Far East: A reference guide to conservation and development. “Russian companies do an abysmal job of marking their timber,” he says.
“This makes it almost impossible to identify where the wood is coming from. The only realistic way to ensure a transparent chain of custody would be to open a purchasing office in Russia, close to where the timber is harvested.”
As yet, the Chinese hunger for timber has not hit the Russian far east as hard as it has some of China’s other neighbours. For example, if current cutting rates continue, the economically accessible mature natural forests in Papua New Guinea will be gone in 16 years or less. The equivalent figure for Indonesia is 10 years. In Russia, there are still vast areas of pristine forest, but the rapid destruction of Primorskiy Krai’s accessible forests suggests that may not be true for long.
That’s not to say the devastation is inevitable, Lebedev is keen to point out. “It’s not too late to change what’s happening,” he says. “There is no reason why the forests in Russia shouldn’t provide a good living for tens of thousands of people, not just now but in the future.” If that’s to happen, it will require not just dramatic reform of Russia’s forest industry, but major changes right along the commodity chain from east to west.
Charlie Pye-Smith is a writer based in London
Linked from 14/8/2006 Journal