USD 22.5 billion⁷
1.1% of the GDP in 2011⁷
9^th highest ranking exporter of EUTR products in
2015 by weight and value⁸

4.37 million hectares of tree cover loss in natural forest in 2017⁹
3.2 million hectares from 2013-2017⁹
694.7 thousand hectares deforested in the Legal Amazon region in 2017¹⁰
Largest net loss of forest area globally, 2010-2015²

FSC certification: 6.7 million hectares (2018)¹¹
PEFC certification: 3.1 million hectares (2017)¹²
FSC & PEFC certification: 2.5 million hectares (2016)¹³

FSC certification: 1 031 CoC certificates (2018)¹⁰
PEFC certification: 50 CoC certificates (2017)¹¹

Natural forests: Garapa (Apuleia leiocarpa), sande (Brosimum utile), Spanish cedar (Cedrela odorata), freijo (Cordia goeldiana), garupa (Dinizia excelsa), tonka bean (Dipteryx odorata), cambara (Erisma uncinatum), cupiuba (Goupia glabra), Brazilian cherry (Hymenaea courbaril), macarunduba (Manilkara huberi), itauba (Mezilaurus itauba), Parkia spp., Ipe (Handroanthus serratifolia), pink ipe ( Handroanthus impetiginosa)¹⁴
Plantation: Acacia spp., Eucalyptus spp., rubberwood (Hevea brasiliensis), Pinus spp., Brazilian fern tree (Schizolobium amazonicum), teak (Tectona spp.)¹⁴

46 species: Dalbergia nigra (Appendix I), Aniba rosaeodora, Bulnesia sarmientoi, Caesalpinia echinata, Dalbergia acuta, D. amazonica, D. brasiliensis, D. catingicola, D. cearensis, D. cuiabensis, D. decipularis, D. densiflora, D. ecastaphyllum, D. elegans, D. ernest-ulei, D. foliolosa, D. foliosa, D. frutescens, D. glandulosa, D. glaucescens, D. glaziovii, D. gracilis, D. grandistipula, D. guttembergii, D. hiemalis, D. hortensis, D. hygrophilia, D. intermedia, D.  inundata, D. iquitosensis, D. lateriflora, D. miscolobium, D. monetaria, D. monophylla, D. negrensis, D. revoluta, D. riedelii, D. riparia,  D. sampaioana, D. spruceana, D. subcymosa, D. villosa, Swietenia macrophylla (all Appendix II), Cedrela fissilis, C. lilloi, C. odorata (all Appendix III)¹⁵

In 2015, Brazil exported EUTR-regulated products (timber and timber products to which the EUTR applies) to 168 countries and territories, totalling 10.3 thousand million USD, of which 26% was exported to the EU-28 (Figure 1a); the EU-28 also imported 33% by weight. Exports mainly consisted of wood pulp products (HS47*) by both weight and value, accounting for over 50% of exports by each measure (Figures 1b and 1c). Paper products (HS48) also represented a high proportion of exports. Brazil imported relatively little timber; the majority of its roundwood and sawn wood production was consumed domestically (Table 1). The majority of EUTR products imported into the EU from Brazil in 2015 were imported by Italy and Germany, followed by the Netherlands and the United Kingdom (Figures 2 and 3).

Figure 1: a) Main global markets for EUTR products from Brazil in 2015 in USD; b) main EUTR products by HS code exported from Brazil according to value in USD in 2015; and c) main EUTR products by HS code exported from Brazil by weight (kg) in 2015⁸.

Table 1: Production and trade flows of wood products in Brazil in 2014¹⁴.

Figure 2: Value of EU imports of EUTR products from Brazil to the EU in 2015 by HS code. Produced using data from EUROSTAT²⁰.

Figure 3: Quantity of EU imports of EUTR products from Brazil to the EU in 2015 by HS code. Produced using data from EUROSTAT²⁰.

*Key to HS codes: 4401 = fuel wood; 4407 = sawn wood; 4409 = continuously shaped wood; 4412 = plywood and veneered panels; 47 = wood pulp; 48 = paper and paper products

Brazil has a series of legislative acts concerning the exportation of timber (see below), but the enforcement of this legislation at state level has been inconsistent²¹.

11.7% of firms experiencing at least one bribe payment request in 2009²².

Based on data collected on behalf of the World Bank across a range of sectors.

Ipe (Handroanthus spp.)²³, especially pink ipe (H. impetiginosus) and yellow ipe (H. serratifolius) [reported as Tabebuia impetiginosa, Tabebuia serratifolia²⁴], big-leaf mahogany (Swietenia macrophylla)²⁵.

Pará State and Mato Grosso State were reported to have a 54-78% rate of illegal logging 2007-2012²⁶.

Brazil banned export of logs in 1969 (with the exception of logs from plantations) and has a moratorium on Swietenia macrophylla exports²⁷; logging of S. macrophylla is only permitted as part of sustainable forest management²⁸. Logging of brazil nut trees (Bertholletia excelsa) and Hevea spp. is prohibited in natural, primary or regenerated forests²⁹. Management of species listed a “Vulnerable” in Brazil’s “List of plant species threatened with extinction” should consider criteria laid out in Regulatory Instruction 1 of 12 Feb. 2013³⁰.
No EU³¹ or UN³² sanctions on timber exports or imports.

There are two source types of timber from Brazil – natural forests and plantations – the rules for the management of natural forests are more stringent, and the risks to legality of native wood are greater³³

Plantation forest sourced timber make up the majority of Brazil’s exports³⁴; 90% of plantations are owned by corporations³⁵.

 Brazil may act as a conduit for timber illegally harvested elsewhere, e.g. timber from West Africa exported to the EU via Brazil, where minor processing occurs to allow re-export as product originating in Brazil. This trade also occurs in reverse³⁶.

Illegal trade

Brazil has a recent history of global media attention and conservation concern over the high rate of forest loss, with 18% of the Brazilian Amazon lost since a peak in deforestation in the 1980s and 1990s²¹. While in the late 20^th century this was mainly attributed to illegal logging²¹, more effective enforcement brought a reduction in illegal logging in the period 2000-2010. Since 2010, illegal logging in natural forest has seen a resurgence, whilst on plantations it has remained low²¹. Despite this increase in illegal logging, in 2013 the main driver of forest loss was considered to be land conversion for pasture and agriculture^21,37. The legal timber trade is reported to be insufficient to meet demands, meaning harvest is supplemented by the illegal trade²¹.

During 2000-2010, Brazil made progress on regulating the illegal trade in timber through a strong legislative framework and increased efforts to combat the illegal trade through enforcement²¹; both of these have been attributed to the effective implementation of the Forest Code between 2004 and 2012. In combination, legislation and enforcement were reported to have brought a significant reduction in illegal logging practices²¹. For example, between 2001 and 2004, the Brazilian Institute of the Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis, IBAMA) increased the number of fines issued annually by 180%³⁸.

Pará state is the greatest exporter of timber in the Brazilian Amazon, with 78% of the area logged over an 11 month period between 2011 and 2012 done so illegally²⁶; a subsequent study of logging in Pará 2015-2016 found that 31% of management plans audited had inconsistencies, such as overestimation of species of high commercial value³⁹. Since 2010, poor coordination, insufficient resources for enforcement, and susceptibility to fraud and laundering have all been emphasised as indicative of a downturn in the outlook for Brazilian timber^23,21. This decline has in part been attributed to a change in government, which reduced the priority of policing the illegal timber trade and struggled to foster coordination between departments and agencies²¹. In particular, shortcomings in implementing the Action Plan for the Prevention and Control of Deforestation in the Amazon (PPCDAm), a plan drawn up in 2004 following a comprehensive review of the illegal timber trade, have been highlighted as symptomatic of the difficulties faced in inter-ministerial coordination²¹. The ability to regulate and monitor illegal trade has also been weakened through limited capacity and an apparent reluctance to develop bilateral agreements with consumers of illegal timber at the international level²¹.

A number of other issues have been highlighted as problematic in the context of the illegal timber trade and harvest in Brazil. There have been failures in payment of fines for environmental crime, with only 5% of fines imposed by the relevant authorities paid⁴⁰; failures to act on evidence from satellite analyses of forest degradation; problems implementing a management system for administrative information in relation to the timber trade; and a lack of clarity on appropriate tax arrangements⁴¹. It has also been alleged that some timber plantations have been sited on illegally obtained land³⁷.

In a 2017 risk assessment of timber legality in Brazil, NEPCon identified key risks relating to the legal rights to harvest, including: illegitimate property allocation; disputes over land inhabited by traditional communities; lack of, or low adherence to, approved management plans; and risk that forestry licenses are obtained illegally due to corruption and lack of law enforcement³³. Other key risks related to tax evasion, illegal logging in protected areas, and incorrect specification of species, quantity and quality of wood products from natural forests (e.g. changing species, type of material or volume) due to a dysfunctional DOF system (see management section below) and corruption³³.

Since 2014, Greenpeace has launched a series of investigations into illegal logging in the Brazilian Amazon (states of Pará, Mato Grosso and Rondonia), highlighting the inadequacy of official documentation as a guarantee of the legal origin of Amazon timber, its sustainability or that harvesting has respected the legal rights of third parties^23,42,43,44. Violent conflicts over land have been reported to be a frequent occurrence in rural communities of the Brazilian Amazon, driven by illegal loggers and land grabbers⁴³. Greenpeace noted the spatial congruence between deforestation and the location of violent crimes in the Amazon region 2007-2016⁴³, based on data from the Pastoral Land Commission (Comissão Pastoral da Terra – CPT) on murders related to land conflicts⁴⁵. Illegal timber is reported to be laundered through various misuses of permits and the chain of custody (CoC) credit system (for further information on this, see below), including: issuance of logging permits for areas already logged, overestimation of the number of valuable tree species in an area to be harvested and issuance of credits for the CoC system in excess of those allowed based on the forest management plan for the area to be logged²³. In 2018, researchers published evidence of a strong overestimation bias of high-value timber species’ volumes in logging permits across Pará state, compared with estimated volumes from the national forest inventory, indicating deliberate overestimation of timber volumes in logging permits across Pará state⁴⁶. This ‘surplus’ of licensed timber was reported to facilitate the extraction and sale of illegal timber, and was found to be significantly greater for the most valuable timber species, such as ipê (Handroanthus spp.)^44,46. The lack of field inspections was considered a key weakness in the state-level licensing process for Sustainable Forest Management Plans, facilitating illegal logging by allowing forest engineers to overestimate volumes or fraudulently add trees of high commercial value^44,46. State environment departments may then issue credits for the harvesting and movement of this ‘non-existent timber’, which may be used by sawmills to process illegally logged trees from elsewhere, including indigenous lands, protected areas or public lands^44,46.

Brazil has also been implicated in the laundering of illegal timber through complex trade routes. For instance, illegal teak from Peru⁴⁷ and West Africa³⁶ may be imported into the EU via Brazil, giving the impression of alternate origin. It has also been suggested that this particular trade route operates in reverse, with illegal timber harvested in Brazil sent via Africa³⁶.

Brazil’s forestry management and legislation

The Forest Code forms the legislative basis for the enforcement of illegal timber trade activities in Brazil²¹. Although suggested as partly responsible for progress in the early 2000s⁴⁸, more recently enforcement of the Forest Code has been described as “weak” in part due to inconsistencies at the federal and state levels²¹. IBAMA was responsible for enforcing the Forest Code until 2006, when authority was devolved to state environmental agencies⁴⁹; however, the agreements which implemented this devolution have been described as inconsistent with regards to procedures, transparency and institutional capacity, causing inconsistencies in implementation between states⁴⁹.

A system of checks and balances is implemented in Brazil, providing government accountability in the context of timber trade and its associated legislation²¹. The Public Prosecution Office, individuals and public groups, and civil-society organisations can all challenge the government on its record of upholding timber trade legislation²¹. Whilst there is no independent organisation for monitoring the forestry industry in Brazil, civil-society has been described as “active”, with numerous NGOs playing a role in monitoring the sector²¹. Despite these legal technicalities and efforts, mounting a legal challenge in practice has been described as “difficult”²¹, owing to problems in accessing the legal system for members of the public. Moreover, in cases where challenges are mounted, the public reportedly has little trust in the effectiveness of these mechanisms²¹.

In 2006, IBAMA introduced an electronic traceability system for timber, introducing the “Declarations of Forest Origin” (DOF) document, which contains information about timber origin, species, type of product, quantity, value and transportation route⁴⁸. Implementation was subsequently devolved to state level, with different systems used in different states²¹; Pará and Mato Grosso currently use SISFLORA, modelled on the DOF system²¹. All systems are intended to allow consignments in transit to be checked against declarations made by forest producers and sawmills; however, capacity limitations mean inspections often do not occur during transit²³. Combined with computer hacking, falsifications, and tampering²¹, there has been a “loss of confidence” in the DOF system. IBAMA recently reduced the maximum utilisation limit for log conversions in the DOF, in an effort to prevent the generation of false wood credits in the system⁵⁰.

Some attempts to assess traceability and risks exist, for example Timber Flow, an online platform to allow tracing of wood production and transport through Brazilian organisations involved in the timber sector, using DOF information⁵¹.

Brazilian national law (Article 35 of law 12.651, May 2012) requires the establishment of a system to control the origin of wood, charcoal and other forestry products and by-products in order to improve traceability from harvesting to transport, storage, processing and export. As part of the implementation of this law, Brazil launched SINAFLOR⁵² (National System for Controlling the Origin of Forest Products) in March 2017⁵³; national states are required to integrate SINAFLOR with their current systems by January 2018. Under this provision, DOF will also be fully merged with SINAFLOR. IBAMA also makes lists of environmental infractions and embargoed areas available online⁵⁴ for public access.

[1] The following list may not be exhaustive and is intended as a guide only on relevant legislation.

[2] The following list may not be exhaustive and is intended as a guide only on required documents.

References

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