The Impact of Illegal Logging in Latin America

As the world’s largest, least risky and most lucrative environmental crime, illegal logging has grown at an alarming rate in Latin American countries. Involving a vast criminal landscape and a complex modus operandi, illegal logging has grown relentlessly in the region, threatening the unique biodiversity it supports and thus posing a significant threat to the stability of Latin America, causing deforestation, habitat loss and the extinction of species while fueling conflict and violence.

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Of all the environmental crimes, illegal logging is considered the largest, least risky, and most profitable crime, with an estimated annual value of up to US$157 billion. WWF describes the practice as “the harvesting, transporting, processing, buying or selling of timber in violation of national laws.” it adds that “it also applies to harvesting wood from protected areas, exporting threatened plant and tree species, and falsifying official documents.” As the global timber trade has surged, with the value of forest product exports more than quadrupling over the past four decades, illegal logging has continued unabated, wreaking havoc on the environment.

Illegal logging has devastating environmental, economic, and social impacts. It fuels deforestation, endangering the home of 80% of the world’s remaining land-based biodiversity. As forests have essentially disappeared in 25 countries and lost over 90% of their cover in 29 others, illegal logging puts remaining arable land at risk of irreversible elimination. It also contributes to climate change through forest clearing, which is responsible for about 30% of the greenhouse gas released into the atmosphere. Moreover, it deprives the one in four people worldwide who rely on forest resources for their livelihoods of the ability to sustain their needs. Finally, illegal logging drives conflicts and violence, often being linked to criminal organizations and financing armed groups. 

Illegal logging manifests itself in various forms. It may involve felling trees without permission or in protected areas, cutting down protected plant species, exceeding legally permitted quantities of timber, and using corrupt means to access logging. However, this crime extends beyond harvesting to include the processing, laundering, and trade of illegal timber as well as fraudulent customs declarations and timber tax evasion. 

The Devastating Impacts of Illegal Logging in Latin America

Latin America is especially vulnerable to environmental crimes due to its outstanding biodiversity and wealth of natural resources. Although Latin America accounts for less than 15% of the earth’s land surface, it houses more than 40% of its biodiversity. The region is home to the Amazon rainforest, the world’s largest remaining tropical forest, covering eight million square kilometres. The Amazon Basin is one of the world’s most biodiverse regions. It supports over 40,000 plant species, 1,294 birds, 378 reptiles, 427 mammals, 426 amphibians, and 3,000 fish species. 

Yet, this incommensurable biological diversity is threatened by rampant deforestation. In 2022 alone, 1.98 million hectares of primary forest were lost in the Basin, the second-highest recorded after the 2004 peak. This environmental crisis is partly fueled by proliferating illegal logging plaguing the region, with between 50% and 90% of its timber being illegally harvested.

Illegal logging is particularly damaging to the environment and biodiversity, as criminals purposely target remaining high conservation value forests and protected areas, which contain over-harvested trees elsewhere. Illegal logging catalyzes deforestation, driving land grabbing of once pristine forest areas. This leads to significant biodiversity loss, as many endangered species are threatened with extinction due to overexploitation or habitat destruction. Latin America is the epicenter of the global extinction crisis, where up to 468 species are estimated to have gone extinct over the past centuries. The region has the most significant number of extinct animal species worldwide and has experienced the largest defaunation rate since 1970. Although it is the most biologically diverse region, it also shelters approximately one in five animals facing extinction. Therefore, as illegal logging continues unabated, the region faces creeping risks of widespread species extinction.

More on the topic: 11 Amazon Rainforest Deforestation Facts to Know About

Despite being ecologically significant for carbon storage, Amazon is being plundered at an alarming rate by illegal logging. Deforestation reduces the amount of carbon the forest can store and generates significant greenhouse gas emissions from vegetation degradation and fires used to clear land for exploitation. Indeed, the Amazon is essential in regulating the global atmospheric carbon levels. Its trees absorb considerable amounts of carbon dioxide from the atmosphere, offsetting human-caused greenhouse gas emissions. The Basin is thus a massive carbon reservoir, storing roughly 100 billion tons of carbon, three times the global yearly emissions from fossil fuels. However, when forests are removed, much of the carbon captured by trees is released back into the atmosphere as carbon dioxide, contributing to climate change. Due to rampant deforestation, Amazon has since turned from a carbon sink into a carbon source, releasing more than it stores.

As is usually the case for environmental crimes, illegal logging is endemic in protected areas. Illegal loggers plunder the forests of indigenous territories, national parks and peasant collectives, devastating unique pristine environments. 

Illegal logging causes significant harm to Indigenous peoples who depend on forests for survival and livelihoods. Over the past decade, ostensibly protected Indigenous territories experienced a 129% increase in forest loss, stemming notably from timber trafficking. The Gran Chaco, the second largest forest in South America after the Amazon rainforest, is experiencing one of the highest deforestation rates worldwide. Despite being home to 9 million people and innumerable species, around a fifth of the forest has been razed. This has had a significant impact on the lives of Indigenous people, for whom the loss of the forest is arguably “nothing less than the end of the world.” Indeed, their livelihoods are deeply entwined with the health of the forest, on which they depend for their food, supplies, and cultural survival. Moreover, illegal logging has generated intense conflicts between local communities and criminal loggers who encroach on their protected territories. Indigenous people in the Amazon have seen their territories ceaselessly invaded by loggers, leading to violent encounters. These acts have cost the lives of many indigenous people and destabilized ethnic minority communities in their traditional territories.

Finally, illegal loggers deprive governments of much-needed revenues, unsustainably looting significant expenses of forests and avoiding paying taxes and permit fees. Illegal logging causes a significant drain on economies, diminishing the quality of and access to public services and hampering larger development initiatives. This undermines governments’ financial ability to foster socio-economic benefits for citizens, thereby sustaining a poverty cycle that underpins environmental crimes.

For instance, according to INTERPOL, Peru loses around 1.5 times more to illegal logging than the total value of its legal timber exports, as 60% of logging in the country is conducted illegally. It also faces a concerning rise in poverty as 70% of the population is poor or at risk of falling into poverty, making criminal activities increasingly appealing alternative sources of revenue.

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Illegal Logging’s Modus Operandi, Actors, and Enablers

Timber trafficking involves three stages: harvesting, transportation, and transformation. First, corteros (cutters) illegally fell trees, often outside of concession boundaries and in protected areas. Then, criminal networks organize the shipment and “laundering” through the timber transformation. Illegal logging is orchestrated by patrones (bosses) who plan and facilitate trafficking operations. This procedure is employed across the Amazon Basin to cover up the origin of illegal wood. Therefore, the difficulty in combating illegal logging in Latin America lies in the persistent concealment of illegally sourced timber’s provenance.

Front companies and falsified documents obscure the origin of wood harvested in prohibited areas or quantities exceeding those authorized. These documents, required to certify the legality of the timber, are counterfeited or obtained illegally through corruption, providing a protection mechanism for criminals. Thus, fraudulent forestry permits hide the coveted illegally felled timber and allow its laundering.

As for every environmental crime, corruption is the prevalent enabler of illegal logging. A World Bank study stated that “large-scale illegal logging operations cannot occur without the explicit or implicit consent of those government officials in charge of protecting the forests.” INTERPOL estimates the global cost of forestry corruption at roughly US$29 billion annually. Corruption occurs at every stage of timber trafficking, including issuing logging permits, evading controls, processing timber, falsifying customs documents, and selling. An Environmental Investigation Agency (EIA) report outlined this intricate web of corruption in the Latin American forestry industry, involving politicians, forestry officials, timber companies, sawmills, transporters, loggers, mayors, and police, among other officials.

After being harvested, the wood is sent to sawmills and processing plants, where it is either sawed into boards or carved into a final product to be legally resold. As opposed to drug trafficking, timber is not sold in illegal markets but instead fed into legal sectors where its illegal origin is concealed. Thus, when illegally sourced timber exits these processing facilities, it appears legal, making its way to domestic and international markets. Illegal wood in one country may be legally imported into another, especially when transformed into products. For instance, UNEP and INTERPOL estimate that 86% of illegal tropical timber entering the European Union and 62% entering the United States arrives as paper, pulp, or wood chips instead of roundwood, sawn timber, or furniture products.

Illegal logging is profoundly intertwined with organized crime. A report by the Global Initiative Against Transnational Organized Crime uncovered connections between illegal logging in Mexico and transnational drug traffickers. Illegal logging’s high profitability has attracted criminal groups, offering a unique source of income to fund their operations with minimal risk. Mexican cartels involved in illegal logging have also been linked to land grabs and deforestation, resulting in an interconnected web of illegal operations fueling violence in the country.

Non-state armed groups, mainly financed through illegal activities, also contribute to illegal logging. They collaborate with criminal networks to oversee criminal operations in the Amazon region. These militias and guerrilla groups provide security services to ensure the transit of timber trafficking, charging a fee for transporting timber through territories under their control. In Colombia, deforestation has significantly increased from 2016 onward, explained in part by the demobilization of the Revolutionary Armed Forces of Colombia (FARC) guerrilla group following the peace agreement signed with the government that year. Before 2016, FARC’s presence in the forests as a hiding place discouraged activities that resulted in forest loss. However, FARC’s withdrawal opened up protected territories across the Amazon region for other criminal groups, while dissident members who refused to demobilize turned to illegal logging and land grabbing to supplement criminal proceeds from drug trafficking.

The EU’s Updated Regulatory Framework as a Promising Solution  

The scale, concealment levels, and vast criminal landscape surrounding illegal logging necessitate a comprehensive strategy from national governments to combat timber trafficking. Indeed, as opposed to other criminal products, wood becomes legal once its origin is blurred, enabling it to move freely throughout markets. This fact is reflected by the persistent presence of illegal timber within the European Union’s markets, accounting for roughly one-fifth of Europe’s wood imports.

Around 45% of all timber exported from the Amazon Basin goes to Europe. Brazil is Latin America’s biggest supplier to the EU, which imports one-third of all timber harvested from the Brazilian Amazon. However, this figure clashes with the high proportion of illegal timber in Brazilian exports, as indicated by an estimated 80% of wood logged in Pará being harvested illegally. 

To address this predicament, the EU updated its regulatory framework for timber supply chains as part of its commitment to combating deforestation. It adopted in June 2023 the Regulation on Deforestation-Free Products (EUDR), which enters into application in December 2024, replacing the EU Timber Regulation (EUTR). EUDR is a significant watershed moment in the global fight against forest destruction, given that the EU is the world’s second-largest importer of products causing deforestation. 

EUDR strives to improve the traceability and legality of timber products entering the EU market, focusing on due diligence across the whole supply chain – from extracting raw materials to the final product reaching consumers. The regulation sets more stringent due diligence requirements, prohibiting the sale of products not produced legally, degradation-free, and deforestation-free on the EU market. It applies to a wide range of commodities, including soy, oil palm, rubber, coffee, cacao, cattle, and wood, as well as their derived products. All companies trading the listed commodities in the EU must demonstrate that they are not sourced from deforested areas or have contributed to forest degradation. 

Before products are released to the market, companies will need to verify the geolocation of the forest and land source of the products using remote sensing information or satellite images. Moreover, they will be required to conduct risk assessments on their activities with traceability information and report annually on their due diligence strategy and the actions taken to ensure regulatory compliance. 

EUDR is part of a larger plan to combat deforestation and forest degradation, launched in the 2019 Commission Communication on Stepping up EU Action to Protect and Restore the World’s Forests. This commitment was strengthened by the European Green Deal, the EU Biodiversity Strategy for 2030, and the Farm to Fork Strategy, which provide a comprehensive strategy for the EU to lead and drive environmental protection.

Therefore, this updated regulation presents a unique opportunity to support sustainable forestry exploitation and combat illegal logging and deforestation. By addressing the overarching issue of traceability that underpins timber trafficking, EUDR has the potential to embed good practices into global timber supply chains, thereby preventing the penetration of illegal timber on the legal market. Although this regulation is specific to Europe, it will influence international forestry trade, including from Latin America, shifting sourcing towards exclusively traceable origins. The EUDR will drive the implementation of regulatory compliance measures for the European market, thus setting a precedent for the global timber trade that can be emulated across domestic markets.