Illegal logging has consequences for governments, consumers and the whole forestry industry.
Governments are faced with the loss of revenue from taxes, the cost of systems to track and manage wood supplies and deal with corruption and criminal activity. With many indigenous communities living deep within the forest the effects of deforestation on community way of life and wildlife can be devistating. In addition there is an environmental cost with a direct link between the level of deforestation and climate change.
In Brazil, the Brazilian government is fighting illegal logging to protect Amazon natives.
The forestry industry is also affected in many ways. With governments implementing legislation to track timber back to the original logging site, legal companies have the additional cost of managing log tracking and security to protect plantations. This impacts on profitability and can also effect the supply chain for industries that are dependent on the wood as a raw material.
What is illegal logging?
“Illegal logging is the harvest, transportation, purchase or sale of timber in violation of laws. The harvesting procedure itself may be illegal, including using corrupt means to gain access to forests; extraction without permission or from a protected area; the cutting of protected species; or the extraction of timber in excess of agreed limits. Illegalities may also occur during transport, such as illegal processing and export; fraudulent declaration to customs; and the avoidance of taxes and other charges.”
Why is illegal logging being banned?
“Illegal logging is being banned due to its devastating impact on the world’s forests. Its effects include deforestation, the loss of biodiversity and fuelling climate change. This creates social conflict with indigenous and local populations and leads to violence, crime and human rights abuses.”
Why laws on illegal logging may increase the price of plantation grown teak.
There are many laws being implemented throughout the world to ensure that teak is sourced from cultivated plantations. Laws along with international boycotts on harvesting natural teak and increasing global population places more demand for teak grown on cultivated plantations.
The effect of increased demand and reduced supply of teak in the commodity market is higher teak prices.