ORGANISED CHAOS The illicit overland timber trade between Myanmar and China

In January 2015, the Myanmar army raided an illegal logging operation in a remote mountainous region in the country’s Kachin State.

The sweep led to the arrest of 155 Chinese nationals who had been recruited from neighbouring Yunnan Province to cross the border to cut trees and transport timber. The case caused diplomatic tensions between Myanmar and China when the Chinese labourers were given life sentences in July. Just a few days later, all were freed under a general presidential pardon.

The saga has shone a light on the murky and clandestine trade in illicit timber occurring across the common border between Myanmar and China. For at least two decades, timber extracted from Myanmar’s precious frontier forests in highly destructive logging operations has been flowing into China unhindered. It is an illicit business worth hundreds of millions of dollars a year, making it one of the single largest bilateral flows of illegal timber in the world.

From the outside looking in, the cross-border trade appears chaotic and complex. Most of the timber entering Yunnan is either cut or transported through Kachin State, a zone of conflict between ethnic political groups and the Myanmar Government and its military. Here, all sides to varying degrees profit from the logging and timber trade, from the award of rights to Chinese businesses to log whole mountains, often paid in gold bars, to levying fees at multiple checkpoints to allow trucks carrying logs to pass. While Kachin and Yunnan lie at the heart of trade,
it reaches far wider. Logs shipped across the border are increasingly sourced from further inside Myanmar, such as Sagaing Division, and end up supplying factories in south and east China.

Yet field research conducted by the Environmental Investigation Agency (EIA) reveals that beneath the

apparent chaos lies an intricate and structured supply chain within which different players have a defined function and collude to ensure the logs keep flowing. Key nodes in the chain involve well-connected intermediaries who secure logging rights for resale, cooperative groups of business people who monopolise the trade at certain crossing points, and logistics companies on the China side of the border which effectively legalise the timber by clearing it through customs and paying tax.

The peak year for the illicit trade was 2005, when one million cubic metres (m3) of logs crossed the border.
A brief hiatus occurred for a few years afterwards when Chinese authorities clamped down on the trade. But it proved to be short-lived and the scale of the business is once again approaching the peak levels. This trade is illegal under Myanmar law, which mandates that all wood should exit the country via Yangon port, and contravenes the country’s log export ban. It also goes against the stated policy of the Chinese Government to respect the forestry laws of other countries and oppose illegal logging.

It is time for both countries to take urgent effective action against the massive illicit timber trade across their joint border. The 155 Chinese loggers have now returned home, but without action to end the trade others will take their place and further conflict, violence and forest destruction will occur.

Environmental Investigation Agency September 2015