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Corruption in logging licenses & concessions
Transparency international
Transparency international
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"Corrupt practices in the forest sector have far reaching impacts. Corrupt logging companies and a few ‘bought’ officials stand to gain, while local forest communities, the economy and the nation as a whole lose out on revenue, services and forest resources that future generations are entitled to. According to the World Bank, developing countries forfeit roughly US$ 15 billion in revenue each year due to trading in illegal logging.8 In Indonesia alone, it has been estimated that more than US$ 2 billion in revenues has been lost in one year (2006) due to taxes foregone on illegal logging, artificially low forest royalties and illicit transfer pricing.9 Where corruption exists, contracts extended to timber companies — either through a license or concession — rarely reflect world market prices. Forest concession rights are often owned and regulated by government institutions, who distribute them to companies at fixed rates rather than specifically assessing the value of the land. Even if national or regional forest governance programmes are well-designed, international timber concessionaires may impede implementing the strategy as a result of their undue influence in political circles and asymmetrical bargaining power with governments. Through corrupt practices such as bribery and cronyism, companies and those in authority can easily turn a blind eye to local peoples’ complaints about how the forests are being treated. Systematic bribes paid by companies to forestry officials for the issuance of logging permits have been reported all over the Asia Pacific region, including Malaysia,10 Laos11 and Indonesia.12 When complaints have been raised against the illegal buying of licenses and other corrupt company practices, governments have at times ruled against their own citizens and in favour of companies. 2. Drivers of corruption: reasons and symptoms The use of corrupt means to secure illegal licenses and concessions to exploit a country’s forests do not stop once the contract has been issued. Opaque licensing, government’s insufficient enforcement capacity and timber companies’ undue influence over political decision-makers create broader corruption challenges for the sector and nations that rely on their forests as a key part of their economy. The spillage of corruption from licensing into other areas of forest management can lead to large-scale deforestation and degradation.13 Addressing corruption in licensing and concessions begins by understanding some of the key sources and manifestations of it: Lack of proper public procurement practices: These problems may be symptoms of more generally dysfunctional and ineffective procurement rules and regulations in a country. The significant areas for corruption in logging licences and concessions include bribery of government officials, collusion and lack of transparency surrounding the award of contracts."
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2010-11-03
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With permission of the license/copyright holder