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### Viewing cable 09VLADIVOSTOK5, FOREST MAFIA ADAPTS TO THE ECONOMIC CRISIS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09VLADIVOSTOK5 | 2009-01-29 08:08 | 2010-12-01 21:09 | UNCLASSIFIED | Consulate Vladivostok
Appears in these articles: http://www.spiegel.de

`

    VZCZCXRO7682
    RR RUEHAG RUEHAST RUEHCHI RUEHDA RUEHDF RUEHDT RUEHFL RUEHHM RUEHIK
    RUEHKW RUEHLA RUEHLN RUEHLZ RUEHNH RUEHNP RUEHPOD RUEHROV RUEHSK
    RUEHSR RUEHYG
    DE RUEHVK #0005/01 0290834
    ZNR UUUUU ZZH
    R 290834Z JAN 09
    FM AMCONSUL VLADIVOSTOK
    TO RUEHC/SECSTATE WASHDC 1066
    INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
    RUCNASE/ASEAN MEMBER COLLECTIVE
    RUEHVK/AMCONSUL VLADIVOSTOK 1165

` `

    UNCLAS SECTION 01 OF 03 VLADIVOSTOK 000005

    SIPDIS

    E.O. 12958: N/A
    TAGS: ETRD PREL ECON EAGR RS
    SUBJECT: FOREST MAFIA ADAPTS TO THE ECONOMIC CRISIS

    VLADIVOSTO 00000005 001.2 OF 003

    Introduction
    ------------

    ¶1. Despite lower demand for wood products due to the global
    economic crisis and implementation of the Lacey Act Amendment,
    illegal logging in Russia continues at critical levels.
    Approximately 70 percent of Russia's forests are concentrated in
    the Russian Far East and Siberia in close proximity to China and
    other main timber markets in the Asia Pacific Region. Logging
    activity and exports increased significantly in 1990s due to the
    high demand for timber in those countries. According to the
    World Wildlife Fund, official customs documents show that the
    volume of timber officially declared and exported from Russia to
    China and Japan is at least 20 percent lower than the volume
    officially imported by those countries. That difference
    accounts for just some of the illegal timber leaving Russia.
    Enormous illegal harvests of cedar and other valuable or rare
    species have been occurring throughout the region, including
    within supposedly protected nature preserves with far reaching
    ecological and social impacts.

    Increased Tariffs Lead to Greater Illegal Exports
    --------------------------------------------- ----

    ¶2. Legal exports remained high until 2007, when, in order to
    encourage domestic reprocessing of Russian timber, the Kremlin
    increased export tariffs for round wood to 20 per cent of its
    delivery price. The tariff was again increased by 25 per cent
    in April 2008. China and Japan remained the main consumers of
    wood, though volumes of timber export decreased slightly. As a
    result, wood export via Grodekovo, the main railroad customs
    point in Primorye, decreased from 7.3 million tons in 2007 to
    6.2 million tons of timber in 2008. Moscow had planned to
    further increase the tariff to 80 per cent in January 2009 -- a
    level that in effect serves as a timber export ban -- but has
    postponed its implementation for a year. An environmental
    contact of the Consulate stated that though the current
    financial crisis has lowered overall demand for wood products,
    the proportion of illegally-harvested wood will increase because
    of increased export tariffs and declining profitability for
    larger, legal logging firms. Demand for hard wood is down, but
    demand for soft wood, like pine, is up. Pine nuts are a source
    of sustenance for wild boar, which are in turn a food source for
    predators like leopards and tigers.

    Poaching Occurs Throughout the Russian Far East
    --------------------------------------------- --

    ¶3. Illegal logging is generally concentrated in border areas,
    where it is less expensive to ship wood to processing facilities
    in China. The largest illegal cutting operations in Russia are
    located in the areas of the Russian Far East and Siberia
    neighboring China. Primorye is a leading area for illicit
    cutting, but numerous illegal operations have been discovered in
    Khabarovsk Krai, and Amur and Jewish Autonomous Oblasts in 2008.
    In summer 2008 authorities discovered a poaching operation in
    the Dalnerechensk district north of Vladivostok that had
    illegally clear cut over 2,300 cubic meters of timber including
    1,500 cubic meters of Korean Cedar. That endangered species is
    very popular in China for furniture and the pine nuts provide
    important sustenance for regional fauna.

    ¶4. In 2008, Oleg Mitvol, former Director of Rosprirodnadzor
    (Russia's Federal Service for Supervision of Natural Resources)
    reported numerous timber industry violations in Amur Oblast.
    Investigators found documentation stating that 6,000 cubic
    meters of timber was officially harvested in the oblast's
    Shimanovsk district, but railroad documents recorded 56,000
    cubic meters of timber shipped from the district over the same
    period.

    How It's Done
    -------------

    ¶5. Smugglers use various ways to illicitly export illegal
    timber, most of which are able to pass through customs
    inspections and established border crossings using fake
    documents and fraudulent declarations. Often companies mix
    illegally harvested wood into shipments of legally procured
    product. They also make customs declarations passing off
    valuable and prohibited species as low-value, legal timber.
    Smugglers of course also resort to clandestine export without
    documents and through unguarded areas of the border. In early
    January, authorities caught a Chinese company attempting to
    export 4,000 cubic meters of oak and ash valued at 2 million
    dollars from Primorye using fake export documents.

    ¶6. Illegal export often involves corruption and complicity by
    the authorities. Two officers from the Khabarovsk Regional
    Service for Economic Crimes who were detained in spring 2007
    were eventually found guilty of abuse of office while aiding
    Chinese and Russian logging companies in illegally harvesting

    Vladivosto 00000005 002.2 of 003

    and exporting Russian timber. Though it is a positive sign that
    officials were found guilty of corruption, their penalty was
    light -- in early 2008, their sentences were suspended and they
    were released, though guidelines allowed for prison terms of up
    to ten years.

    Rangers and Citizens Demand Help to Fight Poachers
    --------------------------------------------- -----

    ¶7. Last year, a group of 38 Primorye park rangers and
    environmentalists sent a petition to Prime Minister Vladimir
    Putin asking him to transfer management the region's forests
    from Primorye authorities to the Federal Forestry Agency. The
    signatories asserted that the regional government is
    consistently failing to fulfill its responsibility to prevent
    illegal logging. Although a new Federal Forest Code came into
    effect in January 2007 requiring regional authorities to protect
    woodlands, Primorye officials have yet to create and adequately
    fund an effective forest management system. Residents
    frustrated by inaction have staged protests to attract attention
    to illegal logging and have even tried to take forest protection
    into their own hands. The World Wildlife Fund's (WWF) Russian
    Far East branch and other environmental organizations often lend
    support.

    ¶8. In summer 2008, residents of a village north of Vladivostok
    staged a protest against officially-approved "sanitary cutting,"
    when logging companies harvest dead trees and clean woodlands
    after wildfires. According to villagers, loggers instead clear
    cut everything, including healthy trees and left behind
    wastelands in place of viable forests. Loggers have taken
    advantage of the fact that forest rangers, suffering from a lack
    of regional funding, have drastically reduced staff and
    curtailed patrols.

    ¶9. Loggers are reportedly now setting their sights on 22,000
    hectares of premium restricted forest in Pozharskiy Rayon.
    Setting a dangerous precedent, authorities issued three permits
    in 2007 to cut 5,600 cubic meters of timber after a seasonal
    wildfire had occurred. In the wake of this year's spring
    wildfires authorities increased the quota to 20,000 cubic meters
    in order to "clean up" the area. Local villagers suspect that
    most of that quota will come from perfectly healthy trees
    unaffected by fire. xxxxx, told the Consulate
    Econ section that he suspected loggers may set fire to woodlands
    in order to obtain permission to log the areas afterward. He
    affirmed that environmentalists are ready to support villagers
    in protecting the forests.

    Retribution Against Environmentalists
    -------------------------------------

    ¶10. This past winter, unknown perpetrators set ablaze the house
    of Yuriy Bersenev, a WWF project coordinator who works to
    safeguard protected nature reserves. Two earlier attempts to
    threaten or endanger WWF staff, including another case of arson,
    occurred last month in the village of Novaya Moskva in
    southeastern Primorye. According to WWF and nature preserve
    workers, the local "Forest Mafia" -- a band of people engaged in
    illegal timber cutting -- has openly declared war on those
    working to preserve forests and enforce environmental laws.
    Bersenev said the escalation is a result of the weakness of
    national forest legislation and rampant corruption in the
    Russian Far East. The perpetrators of both cases remain
    unknown.

    Villagers Suffer in More Ways than One
    --------------------------------------

    ¶11. Along with dealing with the effects of illegal logging,
    honest villagers also face trouble following local laws
    themselves. For example, when large logging companies own the
    rights to forests nearby, villagers are often forced to travel
    twenty kilometers or more to legally gather firewood for their
    own subsistence. Such a story was confirmed by the Consul
    General during his visit to the remote town of Krasny Yar, an
    eleven hour drive from Vladivostok. The town is surrounded by
    birch, cedar, and pine forest, but residents are prohibited from
    gathering wood nearby.

    Lack of Jobs Leads to Poaching
    ------------------------------

    ¶12. Many villages throughout the region were originally
    established as logging towns during the Soviet era. Legitimate
    job opportunities have dwindled since then, and the current
    global financial crisis has made life there even more difficult.
    Many of the jobless former-loggers have resorted to
    smaller-scale, ad-hoc -- and illegal -- harvesting of wood.
    Providing their services to the "Forest Mafia" is often their
    only source of income. With the drop in industrial production

    Vladivosto 00000005 003.2 of 003

    over the border in China, the price of a cubic meter of spruce
    has dropped from 120 USD to 60. Established companies are often
    finding it more profitable to use the services of these
    out-of-work villagers cutting down trees in unauthorized areas
    than to use legal, established channels.

    Conclusion
    ----------

    ¶13. According to xxxxx expert xxxxx 50 percent of soft wood
    and 90 percent of hardwood harvested in the Russian Far East and
    Siberia eventually ends up in the US as finished goods after
    being processed in China. The Lacey Act Amendment, which
    requires documentation that wood products sold in the U.S. were
    obtained legally and sustainably, may help stem the flow of
    illegal timber coming from the Russian Far East. Post would
    welcome and be happy to assist NGO's or USG experts who could
    provide timber companies with briefings on the Lacey Act
    Amendment and the implications for wood products originating in
    Russia.
    Armbruster

`