Professional Documents
Culture Documents
Introduction
Never before has the international timber
business been under so much scrutiny. This
follows decades of an unregulated and
unscrupulous abuse of forests and trading
mechanisms. Many importers admit to ‘not
wanting to know’ where their supplies came
from or how they were acquired. But in the
last few years the international community
has started to tackle the complex issues of
sustainability and legality of supplies with a
determination that was previously lacking.
The Indonesian Ministry of Forestry
released figures towards the end of 2003 that
put the rate of forest loss in the country at
3.8 million hectares per year – by far the
worst in the world.(1) In an attempt to tackle
an accelerating disaster, governments, civil
society representatives, and some parts of
the timber industry have focussed on the
basic issue of legality of supplies. With
illegal logging rampant throughout the world
there is a strong recognition that the social
1
Introduction
© A.Ruwindrijarto, Environmental Investigation Agnecy/Telapak
Above: Illegal logger Malaysia opposed the CITES listing from itself annually. This is wholesale theft and
in Indonesian National the start. As the only other range state with clearly Malaysian ramin cannot be trusted
Park
commercial supplies of ramin, it took out a on international markets.
reservation under the Convention on any For three years EIA/Telapak have carried
regulation of ramin parts or derivatives out investigations in Malaysia and
other than logs and sawntimber and repeatedly found illegally sourced logs of
continues to oppose the use of CITES on mixed timber from Indonesia lying in front
other timber species. If Malaysia’s ramin of customs or immigration offices -
industry was acting legally there should demonstrating the degree of official
have been nothing to worry about and no complicity in this appalling trade. EIA/
reason to take such a step. But as we know Telapak have always supplied its
now, this was not the case and it appears information to the authorities with varying
that it was setting itself up for wholesale results and responses.
laundering. Malaysia has disappointed the
The shocking results of our recent international community, including its
investigations clearly show that some regional neighbours, by its opposition to
‘origin traders and officials in Malaysia still profit the East Asia Forest Law Enforcement and
Malaysia’ from huge quantities of smuggled Governance (FLEG) process signed in a
Indonesian ramin and fraudulently sell groundbreaking declaration in Bali in
must now them onto the international market as September 2001. Malaysia’s formidable
be viewed as ‘origin Malaysia’. If this was previously powers in diplomacy have been focused
seen as a mark of quality and reliability on more on undermining this initiative than
a cynical the world market, it must now be viewed as promoting regional cooperation. If
a cynical and fake attempt at respectability. Malaysia wished to be left alone to get on
and fake The smuggling uncovered by EIA/Telapak with its own business, this may have been
attempt at may be the tip of the iceberg, but reasonable. But Malaysia is a key hub in
nevertheless it represents more than double the global trade in illegal timber and relies
respectability the amount of ramin Malaysia can produce upon the international community for its
2
Introduction
business. It is therefore vital for Malaysia to Ramin is but one of many tree species Traders and
genuinely cooperate if its claims of suffering at the hands of timber thieves, and
respectability are to begin to be believed. CITES does not represent the only or the officials in
What makes Malaysia so different from ultimate answer to the global problem of Malaysia
Indonesia in the world’s eyes is the illegal logging and the international trade in
knowledge that Malaysia can enforce its illegally sourced timber. But if the are fuelling
laws, clean up its act and support its intransigence of one country is to be
criminality
neighbours if it wants to. Indonesia on the allowed to critically undermine the
other hand is going through a painful effectiveness of this one small step then the and raiding
transition to democracy which since 1998 ability of the world’s governments to even
has created anarchy and lawlessness across begin to tackle these issues is called into Indonesia’s
the archipelago. Nonetheless, routes from question. Meanwhile, the sound of forest
West Kalimantan to Malaysian Sarawak and chainsaws continues to ring through the
from East Kalimantan to Malaysian Sabah trees as time runs out for Indonesia’s resources
could be easily policed if officials from both forests.
countries were not corrupt.
The information gathered through these Dave Currey
recent EIA/Telapak investigations also point Director, EIA
the finger at China and other markets.
China must act on this information and Hapsoro
prevent further abuse of CITES by Director, Telapak
inspecting ramin factories and living up to
its CITES responsibilities. The ramin February 2004
consuming countries and blocks, largely
Japan, the EU and the USA must be more
questioning and pro-active in their
investigations into ramin re-exported on to
their markets by China and Malaysia. At
this moment in time, EIA/Telapak believe
that no ramin on the market can be trusted.
This highly critical but factual report is not
published to blacken Malaysia’s name, but
to point to some real truths and ask
Malaysia to face up to them as well. We all
know Malaysia is capable of dealing with
these issues if there is genuine interest in
doing so, but to date this interest has only
been self-serving. As Indonesia faces a
critical juncture in its history some traders
and officials in Malaysia are fuelling
criminality and raiding Indonesia’s forest
resources like grave robbers at a funeral.
© Dave Currey/Environmental Investigation Agency/Telapak
3
The Illegal Logging Scandal
Right: Illegal
logs in
Tanjung
Puting
National Park,
Indonesia
© Faith Doherty/Environmental Investigation Agency/Telapak
4
Ramin Wood and CITES
Ramin Wood
Ramin (Gonystylus spp.) is a blond coloured tropical
hardwood, native to the fragile peat-swamp forests of
Indonesia and Malaysia. As the most valuable wood
species in these ecosystems, ramin trees are usually the
first target of illegal loggers, and selective logging of
these trees is often the first step leading to forest
clearance, as the tracks and roads built to access and
remove the timber become entryways for further illegal
cutting, while canals built to remove the logs drain the
peat and lead to disastrous fires.
Ramin is prized for its appearance, fine grain and easy
5
An Appetite for Forest Destruction
6
An Appetite for Forest Destruction
Exports 24 949
Domestic Consumption 9 243
TOTAL CONSUMPTION 34 242
Adapted from Dr David W. Brown, September 2002; Figures from USDA Global Agricultural Information Network
7
Malaysia’s Reliance on Illegal Ramin
8
Malaysia’s Reliance on Illegal Ramin
where unmarked Indonesian logs were straits attempting to smuggle ramin to Above:
being measured and labelled by a Malaysia – this time squared logs en route Mounting
evidence of
uniformed official on a later visit.(27) to Port Klang.(31) Malaysia’s
Also in August 2001, EIA/Telapak Despite the information provided by EIA/ trade in stolen
uncovered a thriving trade in illegal logs Telapak, Batu Pahat also remained a hub Indonesian
from Indonesia, including large quantities for the trade in smuggled ramin. A night ramin, June
2001 to
of ramin, in the historic Malaysian port raid by customs officers from Riau in November 2003
town of Melaka, just north of Batu Pahat. Sumatra in late March of 2003 netted a
Conversations with one of the crewmen on vessel carrying more than 500 ramin logs
the timber vessels revealed that those which was heading for Batu Pahat.(32) It
companies involved in trading the ramin quickly became apparent that this was far
were able to make a profit of around from an isolated case when a week later,
US$200 on every cubic metre shipped.(28) EIA/Telapak investigators found ramin
While Malaysian officials acting on logs from Indonesia at two separate landing
information supplied by EIA/Telapak made areas on the shores of the river in the town,
a seizure of illegal Indonesian ramin at locations which can only by reached by
Melaka in August 2001,(29) EIA/Telapak passing police and customs vessels.(33)
are not aware of any action being taken by Investigators posing as timber dealers met
the authorities in Batu Pahat and it was with the boss of one Malaysian timber
obvious that the trade in illicit ramin was company charged with overseeing the
being allowed to continue relatively landing of logs at one of the busiest wharfs
unabated. The import operations for illegal in Batu Pahat. Staff from the company
logs from Indonesia at Melaka moved to a showed investigators fresh ramin logs piled
new, larger but less conspicuous location openly on the wharf in the centre of town
up the coast,(30) and a year later the which the company had recently purchased
Indonesian authorities were continuing to from Indonesia, and gave investigators a
intercept wooden vessels in the Melaka tour of a nearby mill where the ramin was
9
Malaysia’s Reliance on Illegal Ramin
By the end of
2003 it was
clear that By the end of 2003 it was clear that
Malaysia’s ramin export industry was
Malaysia’s continuing to feed on ramin stolen from
ramin export Indonesia’s forests, and that the illegal
Indonesian ramin seen being imported into
industry was Malaysia was being shipped on to the main
consumer markets of China, Japan, Europe
continuing to and the US. Recent investigations by EIA/
feed on Telapak now show the true scale and
sophistication by which illegal Indonesian
ramin stolen ramin is being actively laundered through
from Malaysia and on to unsuspecting CITES
Parties with the collusion of some
Indonesia’s Malaysian authorities. Such fraud is
Above: Seizures in Sumatra of ramin en
making the consumers of ramin products
forests route to Malaysia, June 2001 & August 2002
unwitting accessories to forest crime.
10
Johor Port—A Lesson in Laundering
A Lesson in Laundering
In April 2003 EIA/Telapak exposed a
smuggling operation moving illegal
Indonesian sawn ramin from Jambi in
Sumatra through Singapore to China.
During these investigations one
Singaporean timber dealer was introduced
to undercover investigators as a timber
smuggler and ‘mafia’.(37) Six months later
a major Indonesian timber baron sent a
letter to enforcement authorities and
11
Johor Port—A Lesson in Laundering
Right: An
Indonesian
wooden cargo
vessel moored at
Far right: Mr
Abbas, Director
of the Break Bulk
Department of
the privatised
Johor Port
Authority
EIA/Telapak investigators were given a handling the timber on behalf of the four or
guided tour of Johor Port’s facilities by five local companies which own the ramin.
staff of the privatised Port Authority. The port official, Jack Abbas, confirmed
These facilities include a container that all the sawn timber observed was
terminal visited by numerous shipping ramin from Indonesia. He explained how
Below: Ramin lines mostly serving East Asia, a gigantic wooden vessels, each carrying around 150-
air-drying palm oil terminal, as well as ample 200 cubic metres of ramin, arrive at the
outside a facilities for non-containerised bulk goods. port from Sumatra every day. The
warehouse in
Staff bragged of how little paperwork was unloaded ramin is stored in the warehouses
Johor Port,
November 2003 involved in transshipping goods through for two to four weeks to allow it to air-dry,
the port and described the FTZ as ‘like a and is then packed into containers for
Inset: Email from third world country’.(42) transshipment to Hong Kong, Taiwan and
the shipping During the tour three huge warehouses mainland China.
agent, dated 20th
December 2003, were seen within the FTZ filled with sawn Abbas further revealed that in the spring
explaining the ramin wood. Investigators later met the of 2002 he visited Singapore to persuade
laundering port official in charge of bulk goods and a companies involved in ramin transshipment
process representative from the shipping agents to switch their business to Johor, which
Dear Sam,
I’m so sorry for the late reply because I’m away to Jakarta on business
trip.
(4) Containers arrived in HK / PRC and the agent will prepare another
new set of documents that will also includes a new set of Certificate of
Origin to indicate that this time the cargoes are originated from HK or
PRC. The re-export Cites will also be “Purchased” and issue out for
those mentioned cargoes going to EU or USA.
© Environmental Investigation Agency/Telapak
(5) As for the additional cost to buy the re-export cites, my partner is
now in PRC with the new agent. I will get back to you once he feed me
with the info.
Please feel free to e-mail me for any questions that hit your mind at
anytime. I’ll do my level best to answer it.
Andrew Chew
12
Johor Port—A Lesson in Laundering
INDONESIA (IMPORT)
Ramin wood.
MALAYSIA (EXPORTER)
Declare in the Malaysian Certificate Of Origin as any white
they began doing in September of that year. behind it. He told how “ninety-nine Above: Ramin
He estimated that around 4 500 cubic percent of this ramin is smuggled”, that all laundering flow
chart supplied by
metres of sawn ramin was now passing of it was “CITES-free” and explained how Mr Chew, seen in
though the port each month, mostly to the port authority assists in constructing front of stacks of
Shanghai and Hong Kong. In order to aid false paper trails including Bills of Lading air-drying
the business further he was planning to to disguise the origin of the wood. Indonesian ramin at
Johor Port
invest in a kiln to speed up the drying Although Chew admitted they were not
process and so increase the volume of able to obtain Malaysian CITES permits
timber which could be handled. for the ramin, he claimed he was able to
Abbas and the shipping agent, Andrew supply Certificates of Origin from the
Chew, drove investigators to view the Malaysian Ministry of Agriculture.
ramin timber, and demonstrated how each The Malaysian Timber Industry Board
bundle of timber was dated to show when it (MTIB), the government department
arrived – most of the dates seen being from charged with implementing the ramin
October 2003. The two men stated that CITES listing in Malaysia, have an office
there was no red tape involved in in Johor Port. Yet it was apparent that it
transshipping the timber and no permits had failed to stop thousands of tonnes of
were required, and described how the FTZ illicit ramin wood which had been blatantly
authority issue paperwork which disguises passing through the port for over a year.
the origin of the wood as Malaysian. Indeed, Chew confirmed to investigators
Abbas explained that there were controls that the staff of the office have been well
on the Indonesian side, but indicated that aware all along that Indonesian ramin “Ninety-nine
the exporters were able to bypass these without CITES permits was being
with money. The Indonesian ships have transshipped through the port. The per cent of
false port clearance documents stating their shipping agent also claimed to have been this ramin is
destination as the Indonesian island of told by the timber trade authorities that as
Batam near Singapore, but change course long as the ramin did not pass Customs in smuggled ...
at the last minute for Johor. Malaysia there would be no problem.
all this
Most of the illegal ramin seen at Johor Chew revealed that all the ramin passing
comes from an area around the borders of through the port was purchased from one ramin that
Jambi and Riau provinces in Sumatra, man in Sumatra, whom he called the
where illegal logging of ramin has been “ramin king”. Named by another source as you see is
recorded in the protected areas of Berbak ‘Jambi Lee’, this mysterious figure owns a CITES-free”
National Park and the Kerumatan Wildlife fleet of more than sixty wooden ships used
Andrew Chew,
Reserve.(43) for smuggling ramin and illegal squared Shipping Agent at
In a follow up meeting Chew revealed the logs to Malaysia. Described as the Johor Port,
full details of the operation and those ‘number 3’ in an ethnic-Chinese November 2003
13
Johor Port—A Lesson in Laundering
14
Sarawak—State Sanctioned Smuggling
Sarawak – State-
Sanctioned Smuggling
The Malaysian state of Sarawak is the
birthplace of the ramin industry, but by
1990 a mission by the International
Tropical Timber Organisation (ITTO)
reported that ramin in Sarawak was being
heavily overcut,(49) and by the turn of the
century, vast tracts of Sarawak’s peat
swamp forest had been converted into palm
oil plantations, while most of the remainder
was logged out.(50) Despite the current
scarcity of productive ramin forest
concessions in Sarawak many ramin
dealers in the industry centre of Sibu
continue to do substantial business. EIA/
Telapak investigations have shown that,
just as in Peninsular Malaysia, this is
because Sarawak’s shrinking ramin
reserves are being supplemented by illegal
15
Sarawak—State Sanctioned Smuggling
DEFICIT 1122 m3
*Converted from weight using 680kg/m3
Source: US Port Import Export Reporting Service; CITES permits obtained from US Fish and Wildlife Service
Koh Ying’s shipments (see table above).(56) Koh Ying are supplied with much of their
Indeed, another company supplied with ramin sawn timber by a company called
ramin dowels by Koh Ying, Mohawk Allied Lumber, also based in Sibu.(58) In
Handle of Canada, have already had one October 2003, undercover EIA/Telapak
shipment of illegally sourced ramin wood investigators jointly met with executives
products seized by US authorities.(57) from Allied Lumber and Koh Ying, and
While most of the shipments made by Koh toured Koh Ying’s large factory complex,
Ying to the companies mentioned above which was filled with the sound of ramin
are nevertheless accompanied by the being machined as workers prepared
correct paperwork, EIA/Telapak have now shipments of dowels for the US, Europe
learned how even those shipments with and Japan and artist’s paintbrush handles
Malaysian CITES Certificates of Origin for shipment to France. While Philip Law,
may be of illegal Indonesian origin. the owner of Koh Ying, was quick to
16
Sarawak—State Sanctioned Smuggling
assure us that all of his ramin is Malaysian laundered Indonesian wood to supplement Ha told
and that he can easily obtain Malaysian its local supplies, and obtains CITES
CITES permits, Ha Tung Hoo of Allied permits from STIDC in turn for the investigators
Lumber later explained how much of the mouldings they produce from it. that 30-40
stockpile of 6000 cubic metres of ramin The process described by Ha was
stored in Koh Ying’s warehouses is corroborated in testimony to EIA from an per cent of
laundered Indonesian wood. independent industry source.(59) Ha told
Ha admitted to importing illegal ramin investigators that he believes around 30-40 the ramin
from Indonesia in the past, and explained per cent of the ramin exported from exported
in detail how Indonesian ramin is Sarawak as origin Malaysia is actually
laundered through the Sibu mills. He illegal Indonesian wood laundered in this from
explained how cargo vessels bring the manner. This represents at least 2000 Sarawak as
ramin from Indonesia to the port of cubic metres of sawn timber every month,
Tanjung Manis, a new development plus approximately the same quantity of origin
downstream from Sibu, despite STIDC dowels and mouldings.(60)
rules which state that timber from In 2002 US customs seized a shipment of
Malaysia is
Indonesia may only be brought in by sea at 100 000 ramin dowels worth an estimated laundered
the town of Sematan, 200 kilometres away. US$10 000 which had arrived from
He alleged that Malaysian customs are paid Malaysia without a CITES permit.(61) Yet Indonesian
to allow the illegal shipment through, and it seems this shipment of around 12 cubic wood
the vessels then sail on to unload at mills metres was the tip of the iceberg. If Ha’s
on the Sibu river. Staff from STIDC in figures are correct, the USA alone is
Sibu, which is the local branch of the receiving approximately 150 cubic metres
Malaysian CITES Management Authority, of laundered Indonesian ramin from
then apparently come to the mill and for a Sarawak with bogus Malaysian CITES
payment issue CITES permits certifying permits each and every month, in addition
the ramin as origin Malaysia, despite being to the 500 cubic metres which apparently
well aware of the true origin of the wood. arrives without any documentation at all. Below: Ramin peat
Koh Ying then allegedly buys the already swamp forest
17
Illegal Malaysian Ramin Furniture
Right: Ramin
logs at Twins’
Illegal Malaysian Ramin
sawmill Furniture
Twins Furniture is a Malaysian
manufacturer of wooden baby furniture
based in Kuantan in Peninsular Malaysia.
It is one of the world’s top five producers
of baby furniture and exports products all
over the world. It specialises in the
production of wooden baby cribs or cots,
most of which are made with ramin wood.
18
Illegal Malaysian Ramin Furniture
port of Kuantan. Such shipments must be species of wood these were manufactured
of illegal origin. It also seems that the from. A third company, Williams Sonoma
world of illegal ramin trade is a small one: Inc, have been shipping ramin cribs from
a recent visitor to Twins’ factory as Kuantan in Malaysia where Twins’
recorded in their visitor’s book was a factory is based. Though the source
Roland Ha of Allied Lumber in Sarawak – company name has been withheld, the
the elder brother of the very man who only product code matches that of one of
two weeks earlier had described in detail Twins’ products. Williams Sonoma are
to EIA/Telapak investigators the process the parent company of the major US
by which illegal Indonesian ramin is children’s retailer Pottery Barn Kids.(68)
brought into Malaysia and provided with While Pottery Barn have recently
bogus CITES permits.(66) discontinued one line of ramin cribs,
Twins claim to supply products to a another known as the ‘Sleigh’ crib
number of retailers in the UK either direct continues to be sold in stores. Although
or via UK agents or middlemen, including clearly identified in PIERS import data as
a major UK distributor called Cosatto. manufactured from ramin wood, the bed,
Tiny Kins, a UK mail order supplier, offer which retails for US$700, is advertised as
a Cosatto ramin ‘toddler’ bed for £99.99. being manufactured from maple.(69)
Tiny Kins stated to EIA investigators that While there is no evidence to suggest
Cosatto had informed them the bed came that the UK and US retailers named above
from Malaysia, where Twins is the only have knowingly broken any law, EIA/
supplier of such products.(67) Telapak’s investigations have shown that
US import data supplied by PIERS these products are likely to have been
shows two companies, Dream on Me, Inc. imported without the proper CITES
of New York and GD Products Ltd of permits, and they may also have been
Canada, have recently imported baby cribs manufactured from endangered trees
from Twins, though it is not clear what stolen from Indonesia’s national parks.
19
Recommendations
Importers
and Recommendations
consumers • Importers and consumers of ramin, especially in the major markets of North
of ramin, America, Europe and East Asia must not buy any ramin or ramin products at this
time.
especially
in the • Malaysia must investigate and prosecute those persons, companies and officials
found to have been involved in the smuggling and laundering of illegal ramin.
major Malaysia must withdraw its reservation to the ramin CITES listing and take
urgent steps to halt all imports, transhipments and re-exports of illegal
markets of Indonesian ramin.
North
• The government of Malaysia must formally endorse the East Asia Forest Law
America, Enforcement and Governance (FLEG) Declaration and draw up an action plan to
Europe and pursue the commitments made within it.
East Asia • The government of Indonesia must improve enforcement of the ban on ramin
must not cutting and export, and must investigate, arrest and prosecute ‘Jambi Lee’ and
any other persons including corrupt officials involved in smuggling ramin.
buy any
• The governments of Indonesia and Malaysia should hold a ministerial-level
ramin or meeting to discuss and resolve the illegal trade in timber between the two
ramin countries.
products • Customs and CITES authorities in Singapore, China, and Taiwan must carry out
thorough investigations into their ramin business.
Right: Sawmill
near Tanjung
Puting
National Park
processing
ramin
Opposite:
Ramin tree
20
References
21
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