TNRC Blog Forest Legality Week

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Targeting Natural Resource Corruption

Harnessing knowledge, generating evidence, and supporting innovative policy and practice for more effective anti-corruption programming

Ten anti-corruption take-aways from Forest Legality Week

Corruption under the canopy

It’s becoming increasingly clear that corruption threatens the future of forests, forest-dependent communities and our global response to climate change. A 2016 INTERPOL study on the risks of corruption in the forest sector estimated that the annual cost of corruption in forestry is USD 29 billion. Important progress has been made by the conservation and natural resource management communities to uncover red flags that signal where corruption may facilitate illicit timber trade and undermine wider conservation efforts. But exposing illegal activity and associated corruption isn’t enough—a necessary next step is establishing an anti-corruption agenda. What should this agenda look like? Practitioners in two sessions at Forest Legality Week presented case studies, tools, responses and pathways to consider. This blog outlines ten anti-corruption take-aways.

Why care about corruption?

We know that we can’t stop illegal logging and illicit trade without addressing the corruption that lurks behind it. Different forms of corruption can occur at different stages of illegal forest supply chains—from fraud involving the mis-invoicing of exports, to bribery to get illegal shipments past customs, leakage from government-held timber stockpiles, abuse of special economic zones, and other acts. Addressing this corruption is in all of our best interests—“So by combatting illegal logging, we combat many types of transnational crime, making all of us safer and better off. Safe from criminal organizations and political instability, and better off economically,” said Jonathan Brightbill, Principal Deputy Assistant Attorney General of the United States Department of Justice.

Ten anti-corruption take-aways

1Start with good context analysis

Understanding context and analyzing power dynamics can be vital to identifying drivers of deforestation and effective approaches to address it. A network-mapping approach can allow for analysis of buyers, sellers, brokers, lawyers, and public officials who may serve as facilitators, unwitting accomplices or supporters, or sympathetic bystanders. Dynamics like corruption, institutional capture and socially acceptable behavior emerge as central elements.

2Independence is important for anti-corruption outcomes

Monitoring logging activities should be done by a body that’s fully independent of the forestry administration and protected against intimidation from companies. Prosecutors also need the means to operate independently. In 2012, the United Nations and Indonesia's Corruption Eradication Commission (KPK) convened heads of anti-corruption commissions and regional associations of anti-corruption authorities (ACAs) to discuss what makes ACAs independent and effective. The Jakarta statement on principles for anti-corruption agencies emerged as a reference point for the international community.

3Transparency and traceability are vital—but not enough in and of themselves

Practitioners should push for transparency and traceability in timber supply chains, from production to financial transactions. The Extractive Industries Transparency Initiative (EITI) requires companies and countries to disclose information that can expose discrepancies in payments and receipts and help observers ask questions about where the money has gone. Generally focused on oil, gas and mining, EITI has been extended to forests in two countries—Liberia and Myanmar. Automatic exchange of information on financial accounts for tax purposes also supports transparency. But making records and data public isn’t enough in and of itself—investigations and interventions are needed to make sure that data gets used (see #4).

4Support civil society, freedom of the press and investigative journalism

Environmental Non-Governmental Organizations (NGOs) and investigative journalists have played a vital role in exposing corruption and inaction in government and at the international level. Partnerships like the International Consortium of Investigative Journalists, the group behind the Panama Papers, can enhance the visibility of such investigations, which may help to secure deterrent prosecutions. Civil society also needs to advocate strongly for anti-corruption policies and monitor follow-through, when it’s feasible and safe to do so.

5Follow the money

Access to information on financial transactions helps those who investigate and expose corruption and illegal activity. Enforcement authorities should look beyond the immediate crime—such as an illicit shipment of rosewood—and work back to identify any corruption that allowed those crimes to happen, as well as the financing for these activities. “Following the money” can help to identify the broader networks involved in environmental crimes and corruption.

© Greg Armfield / WWF

6Whistleblowers can help to strengthen corruption cases

Information from inside sources can be vital to ensure that evidence of corrupt activity results in prosecutions. But whistleblowers are unlikely to get involved if they think that their information won’t be used, or if safeguards don’t exist to ensure their safety and prevent retaliation. Civil society, government and businesses who choose to support whistleblowers must be sure that the appropriate systems are in place to protect them, which is not always the case. Guidance exists on whistleblower protection and encouraging reporting that outlines the conditions that may help to make this process possible and safe.

7Private sector companies should take a holistic, risk-based approach to integrity

Compliance is complicated. Since environmental, labor and corruption risks are intertwined, private sector approaches should be integrated. Private sector companies should use existing anti-corruption toolkits that integrate prevention, detection and response in ensuring the legality of their supply chains.

8Put trade agreements to work to combat corruption

Increasingly, Free Trade Agreements have environmental protection provisions that may be used to control the illegal timber trade. Civil society groups can generate cases that lead to the filing of complaints under certain trade agreements. For example, civil society collaboration is encouraged with the United States-Peru Environmental Cooperation Commission, which has a Sub-Committee on Forest Sector Governance (United States-Peru Trade Promotion Agreement). The Trans-Pacific Partnership also has environmental provisions that provide for a dispute settlement process, including a framework for citizen suit provisions. The US Government and the European Union have a major role to play in countering illegal logging, globally. The US Lacey Act and EU Timber Regulations should be triggered more where there is evidence consistent with corruption or other illegality.

9Consider behavior change approaches

Consider behavior change approaches at both ends of the supply chain. On the consumer end, “If no one buys illegal timber, companies can’t sell it and there’s no use in bribing officials,” said Susanne Breitkopf of EIA. Ultimately, “in order to address climate change…we need to protect forests. To do that, we need to focus on three things: governance, markets and finance, and shifting norms,” said Frances Seymour, Distinguished Senior Fellow at WRI.

10Learn from other sectors

Anti-corruption efforts have been underway in many sectors, yielding important learning. Decisions made by conservation and natural resource management practitioners should be informed by that learning. The Targeting Natural Resource Corruption project aims to help bridge this knowledge gap.

This blog captures key learning from two corruption-related sessions at Forest Legality Week 2019. These sessions brought together experts from World Wildlife Fund (WWF), the Terrorism, Transnational Crime and Corruption Center (TraCCC), Yayasan Auriga, Environmental Investigation Agency (EIA), Forest Trends, Center for International Private Enterprise (CIPE), C4ADS, and a legal expert on global trade agreements. Hosted by World Resources Institute on October 8-11, 2019 in Washington, DC, Forest Legality Week convened roughly 200 practitioners from 27 countries to exchange learning and inspire partnerships for more effective implementation and monitoring of timber trade legality and due diligence measures.

© Anton Vorauer / WWF

Image attribution: © / Jen Guyton / WWF; © Brian J. Skerry / National Geographic Stock / WWF; © Georgina Goodwin / Shoot The Earth / WWF-UK; © Hkun Lat / WWF-Aus