International Drivers of Illegal Logging

 

Global and domestic demand exceeds supply

Figure 11: Loss of critical orangutan forest in the Leuser Ecosystem, Sumatra from satellite (Landsat 1989 and ASTER 2006)
The present reality is that domestic demand for timber from Indonesian industries exceeds the supply that can be met from the legal and licensed harvest. This domestic timber shortage is exacerbated by the fact that trading logs on the international market is more profitable than trading logs within Indonesia. As many pulp, saw and paper mills in Indonesia are largely owned or controlled through multinational parent companies (Schroeder-Wildberg and Carius 2003), the products of illegal logging easily find their way to the international market.

The combined annual raw demand of wood by the approximately 1 600 mills in Indonesia is at least 70–80 million m3, which far exceeds the legal cut by a factor of two to five (Schroeder-Wildberg and Carius 2003).

Indonesian timber mills have excess capacity

Figure 12: Loss of critical orangutan forest in the Leuser Ecosystem, Sumatra from satellite (Landsat 1989 and ASTER 2006).
A related problem is the fact that many of the mills are designed to process much larger volumes of timber than what can possibly be sustainably harvested from Indonesia’s forests. In order to operate at a profit, timber companies are forced to seek out cheap and readily available sources of wood. This means that illegal logging has, in recent years, spread to protected areas, as they are among the few places left with valuable timber in commercial volumes (Wardojo et al. 2001, Curran et al. 2004). These areas are protected for their high biodiversity value, so enforcement is critical but generally lacking to a large extent.

Timber processing company debt completes the circle

Figure 13: Loss of critical orangutan forest in the Leuser Ecosystem, Sumatra from satellite (Landsat 1989 and ASTER 2006).
There is a serious debt problem associated with investments in the Indonesian industrial forestry sector. Unless the financial problems linked to the timber industry are somehow resolved, the need to get returns on these investments will remain a driving factor in the unsustainable use of forests.

One consequence of this burgeoning international trade is that Indonesia cannot address the growing problem of illegal logging alone. It requires the full assistance and co-operation of timber importing countries, including other countries in the region.




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