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16 December 2009

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Madagascar

Major international banks, shipping companies, and consumers play key role in Madagascar's logging crisis

In the midst of cyclone season, a 'dead' period for tourism to Madagascar's east coast, Vohémar, a sleepy town dominated by the vanilla trade, is abuzz. Vanilla prices have scarcely been lower, but the hotels are full and the port is busy. "This afternoon, it was like a 4 wheel drive show in front of the Direction Regionale des Eaux & Forets," one source wrote in an email on November 29th: "Many new 4x4, latest model, new plane at the airport, Chinese everywhere."

Loggers in Madagascar are daily plundering up to $460,000 of precious woods from national parks in the country's northeast, according to a joint report of EIA and Global Witness published two weeks ago. While some illegal logging has taken place in the SAVA region almost continuously for more than a decade, the activity has sharply escalated in 2009. Low vanilla prices have gutted the local economy and timber traders have seized upon the combination of weak government and high demand abroad to extract large quantities of rosewood from protected areas in the region: Masoala and Marojejy National Parks as well as the Mananara Biosphere Reserve.

The operations are initiated by a small group of exporters known in Madagascar as the "Timber Barons" and financed with advance payments from Chinese buyers and by loans from several international banks with branches in Antananarivo. The exporters rely on regional networks of collectors and and sub-collectors who are responsible for obtaining the wood and overseeing its transport from the forest to major port. The actual logging and transport is done by local farmers who work for about five dollars a day cutting and dragging logs from remote areas in the forest with only hand axes and rope--backbreaking work that brings them no more than 2% of the export value of the wood they cut. The value of one three-meter rosewood log, for instance, can easily surpass Madagascar's per-capita GDP. Even so, EIA/GW investigators spoke to a village head near Masoala who estimated that roughly half of the people involved in actual logging there--between 500 and 1000 workers--had not been paid.

The trade is dominated by some of Madagascar's wealthiest citizens, who have strong influence on regional politics--Jeannot Ranjanoro, president of the National Group of Vanilla Exporters; Roger Thunam, another major exporter; Eugene Sam Som Miock, Madagascar's largest leechee exporter; Jean Paul Rakoto, who has ties to former President Didier Ratsiraka; and Martin Bematana, a former member of parliament. The EIA/GW report estimates that up to 200 rosewood trees are now being felled each day by these traders who will sell most of the wood to buyers in China. Rosewood currently fetches upwards of $3000 per cubic meter, roughly ten times the value of oak or maple. To date, according to a separate paper just published in the journal, Madagascar Conservation & Development, some 620 containers of rosewood with a total value of over $130 million have left Madagascar this year.

"Most of these people have been in the business for a long time--at least, 10, 20 years," said Adam Khedouri of the EIA, who participated in the investigation. But "rosewood is relatively new," he added, pointing to the rising Chinese middle class and their taste for "faux-imperial style" furniture. Of the various economic activities in SAVA, timber trading is by far the most lucrative. "One way it was described to me is that the people who are involved in exporting vanilla are really wood traders," Khedouri explained. Vanilla is the more reliable market, timber is kind of hit or miss, so you need to have some financing available to send people into the forest, pay for the equipment, and buy fuel. They're complimentary businesses."

Though Malagasy law clearly prohibits the extraction of precious woods from protected areas, a web of contradictory 'ministerial orders' woven over the past decade has obscured the issue. Timber traders in SAVA have grown used to the ebb and flow of enforcement and feasibility of logging there, and have even used the shifting political tides to justify their activities. In an interview with one of Madagascar's biggest dailies last March, trader Jean Pierre Laisoa blamed the government for 'confusion' that resulted in the seizure of illegal rosewood in Antalaha: "The problem is that the state's policies on precious woods are not all that clear."

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Assessing illegal logging

Chatham House is assessing the scale and effectiveness of the response to illegal logging and the related trade around the world. Full details of this work, including analysis and data, will be available online soon.