Tracing the safeguards against illegal logging in Vietnam

An agreement on legally sourced timber imports from Vietnam to the European Union that was finally signed in October is now being held up against the reality on the ground in the Southeast Asian country.

The EU’s Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan with Vietnam comes at a time when the timber industry there remains blighted by corruption, theft, and illegal logging. An estimated 30,000 to 50,000 forest violations are reported every year, according to global certification non-profit organization Nepcon.

Official certification rules and procedures have long been on the books for every level of the trade. Despite that, from logging in the central highlands to one of Southeast Asia’s largest wood-processing factories and a timber market town known colloquially as “billionaire’s village,” safeguards do exist, but are flouted.

In the remote mountain town of Muong Xen in Nghe An province, only 20 kilometers from the Laos border, forest farmer Kha Hai Thanh has been working with wood for nearly 30 years. Though aged 79, Thanh and his wife Vu Thi Lan continue to manage a farm of 4.8 hectares, most of which is used to grow timber. They grow more than 2,000 trees, with species ranging from Chittagong wood to clove and chinaberry.

Thanh claims that his clove trees are regularly threatened by illegal loggers and drug addicts from a nearby commune. Attempts to visit his farm were refused by local authorities.

Thanh once managed a specialist wood company, to which he also sold the timber he farms, but he shut down the business eight years ago following a government ban on buying conifer species from Laos, a practice that made up a core part of his business. Now he sells to traders; they tend to harvest an entire species in bulk, although just one of his chinaberry trees can sell for more than US$2,000.

The timber is transported down from the mountains before being processed in factories or sold to markets.

“Now I sell the trees to anyone who wants to buy them,” Thanh said. “The traders knock on my door asking for wood all the time. When the trees are ready for harvesting, I just tell the traders when they pass by. The buyers are Vietnamese – there have been no Chinese buyers.”

It’s not just traders who pay his farm a visit, though. Drug addiction,  especially to crystal meth, afflicts many of the poorer ethnic-minority communities in mountainous areas of Vietnam according to domestic media reports. Thanh claims it has also affected his business.

“Thieves often try to cut down clove trees,” Thanh said, “and drug addicts come in to steal the wood too.”

When legitimate traders visit, though, Thanh and his wife say that they follow due process.

“After we sell the timber to traders, we give them a written confirmation that the timber comes from our farm,” Vu Thi Lan said. “Then the traders deliver the timber to a forest ranger who knows all the timber farmers. The ranger verifies that the timber comes from the area and issues them a certificate of origin.”

Many small-scale timber farmers, much like Lan and Thanh, also provide timber to large-scale operations such as Nghe An Wood Processing Plant. Around six hours east of Muong Xen, the plant is surrounded by a sea of acacia tree plantations and, according to the company’s website, is the largest plant in Southeast Asia manufacturing the plywood panels known as medium-density fiberboard, or MDF.

Around 20 local suppliers cultivate acacia trees, on a seven-year growth cycle, as opposed to cutting down native forest, and seemingly endless piles of their trunks can be seen upon entering the factory grounds.

Hardwood logs imported to Vietnam from Africa. Photo: Chris Humphrey

The plant has only been operating for two years and, despite accusations of dumping environmentally damaging wastewater into local canals and reservoirs — an issue it says has long been fixed — the setup represents a genuine attempt a creating a sustainable model of farming timber. Even the company’s chief executive officer, Atanu Dey, says that if other wood-processing factories move to the area there may be an increased threat to native forest.

“There is a risk of illegal logging,” Dey said. “If too many production companies come in, and pay a higher price to farmers, they will be incentivizing logging, and native trees would then be more likely to be cut down.”

Some 70% of the plant’s processed wood is sold in the domestic market. The rest, according to Dey, is “sent to India, Malaysia, and some to China.” Domestically, the company sells mainly to furniture companies in large cities like Hanoi and Ho Chi Minh City. It issues certificates of origin for all the wood sold. But a visit to a town full of the kind of companies the plant sells to reveals that such protections are a futile attempt to prevent illegal logging.

In Dong Ky, a traditional wood-carving village 45 minutes outside Hanoi, hundreds of stores sell ornately crafted furniture – some for as much as $12,000. An immense market of storefronts offers a variety of species, including vulnerable species of rosewood from Laos and Cambodia, along with timber from Cameroon, South Africa and South America.

The bustling trade in Dong Ky is part of a significant nationwide industry: Vietnam’s overall timber and wood furniture exports were worth $7.3 billion in 2016, according to the Forestry General Directorate. That figure reflects the high value placed on some species being sold.

Siamese rosewood, for example, is one of the most valuable species of tree in the world. A single, ornately carved bedpost has been known to sell for as much as $1 million in Shanghai. Such tantalizing opportunities for profit have also led to the devastation of rosewood forests in Southeast Asia, resulted in a vulnerable rating on the IUCN’s Red List of threatened species.

Ornately carved table-and-chair sets at a furniture shop in Dong Ky, Vietnam. Photo: Chris Humphrey

At one point the industry brought vast wealth to the traders of Dong Ky. In recent years, what was once known as “billionaire’s village” has suffered. Some local sellers recently faced bankruptcy after stocking up on valuable timber shortly before an unprecedented price drop on Chinese markets, where 80% of the timber sold here ends up.

One alternative that has been proposed to keep the traders in business would be for them to cater to the more regulated European market. Such a move would require abiding by all the regulations of the FLEGT Action Plan, though, and in Dong Ky there’s little talk of the importance of following the rules.

“Most of the timber sold here has no certificate of origin when it arrives,” said Duong Van Thanh, who manages his family’s eponymous furniture business. “Some do have papers showing the log’s origin in Laos or Cambodia, but only a few. You’ve got to understand that as soon as the logs make it here, you have nothing to worry about. The forest wardens only check logs when they are being transported here.”

Yet even if the industry saw a significant increase in the number of traders arriving with the correct paperwork, the effectiveness of this process is almost entirely diminished once the timber reaches the processing floor of furniture shops.

“How can you tell where it [a log] originates from?” Thanh said. “If a document says a truck has 40 logs with such and such measurements – they’ll count the logs and measure their size to see if they match the papers. Once it reaches the village, there’s no way to verify it. Once I’ve processed the wood, there’s no way to check.”

To bring timber across the border into Vietnam, importers must have a log list showing which species they are transporting. Import companies also need a photocopy of the contract they signed with their counterparts in Laos or Cambodia. Each morning, huge trucks deliver timber to the market stalls of Dong Ky after traveling through the night.

Traveling under cover of darkness makes it easier for illegal traders to avoid detection from police, although this may not always be entirely necessary. Those who deliver the logs, Thanh says, “have their way with papers for logs from Laos.” The issue of illegal loggers forging documents in Vietnam is a serious problem, but it isn’t something new.

Cambodia recently accused Vietnam of knowingly accepting fraudulent permits for illegally logged rosewood timber for transport across their shared border. Ha Thi Tuyet Nga, director of Vietnam’s Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES), responded that such reports “undermine Vietnam’s efforts in combatting transnational timber trade crimes.” But she did not deny any of the claims levied against Vietnam.

With the signing of the EU’s FLEGT Action Plan, opportunities exist to clean up Vietnamese logging and sell to more regulated markets. Yet while there are signs of progress, the industry remains dogged by repeated violations at every level, and so a real change in direction seems a long way off.

A complete shift of mindset within the industry and tougher enforcement, including with sellers, would be essential. Furniture-maker Thanh freely admits that most of the timber he sees comes from Laos and Cambodia and is “logged illegally.”

His customers purchase his furniture based on reputation, so they don’t ask questions about the wood’s origin. “These are private sales with no documents that guarantee anything,” he said. “They trust Dong Ky as a craft village so they just come here and buy.”