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US Government Requested To Use Free Trade Agreement To Take Action On Illegal Timber Exports: Peru

WASHINGTON, D.C. - The non-profit Environmental Investigation Agency (EIA) announced today that it has formally petitioned the U.S. Government to take action under the US-Peru Free Trade Agreement to investigate and verify the legal origin of shipments from at least two Peruvian companies and to audit dozens more.

On April 10th, EIA released results from a multi-year investigative report showing that between 2008 and 2010 over 100 shipments containing millions of dollars worth of illegal cedar or mahogany wood from the Peruvian Amazon were exported to the United States. This wood is alleged to have been harvested and traded in contravention of Peruvian and US laws, the Convention on International Trade in Endangered Species (CITES), and, more recently, the US-Peru Free Trade Agreement or FTA.

The US-Peru FTA, which came into force in January 2009, contains provisions in its unique “Annex on Forest Sector Governance” giving the US the authority to request that Peru conduct audits of timber producers or exporters who it has reason to believe are trading in illegal timber, as well as verifications of specific shipments. If evidence of illegality or intentional false statements is found, the US can take serious measures, including the seizure of specific shipments or even disallowing all exports from that company to enter the US until and unless Peru produces eviden

ce that the company is complying with relevant laws and regulations. EIA’s petition, submitted to the U.S. Trade Representative office in a meeting on Tuesday, asks the US to request that Peru verify a series of exports from Maderera Bozovich SAC and Maderera Vulcano SAC because they have a history of exporting the most significant volumes of timber to the US from logging concessions with illegal activity. The petition also requests verifications on any shipments containing timber from concessions currently suspended for likely illegalities under Peruvian regulations. Since January 2009, according to EIA’s data, at least 77 problematic shipments from these two exporters or from suspended concessions have entered the US. EIA’s findings are based on analysis of official Peruvian government documents.

“The US-Peru FTA contains innovative environmental provisions designed to ensure that more liberal trade doesn’t mean more illegal trade,” said Andrea Johnson of EIA. “It is time to put these provisions to work for the good of Peru’s forests – as well as for businesses in both countries trying to do things right, who want to compete on a level playing field.” EIA believes that the shipments included in the petition to USTR are only a subset of the much larger number of shipments containing illegal timber. “The systematic nature of these producers´ and exporters’ actions constitutes a troubling pattern that repeatedly violates national and international laws for both countries involved,” emphasized Johnson.

EIA’s report, “The Laundering Machine”, analyzed official documents which demonstrate a consistent flow of illegal wood – laundered with fabricated papers and signed off on by Peruvian government officials – arriving in the US between 2008 and 2010. These shipments account for over 35% of all trade in CITES protected species between the US and Peru during this period. EIA believes that these figures are conservative, and that the number of illegal shipments would increase with access to complete data.

Illegal timber in the Peruvian Amazon is cut by crews of loggers, often under abysmal and abusive conditions, and stolen from areas including national parks, indigenous territories, and other national lands. Recent government estimates suggested that illegal logging is costing Peru $250 million annually.

“This petition asks for action on a subset of problem concessions and major exporters, however, it would be a mistake to believe that this is anything less than a systemic problem endemic throughout the Peruvian forestry sector,” said Julia Urrunaga, head of EIA’s Peru programs.

“It is the responsibility of the US Government to make sure that the US is not an accomplice in illegal logging activities hiding behind the formal timber trade coming from Peru – activities that not only have a terrible impact on biodiversity but also contribute to human rights violations and corruption,” added Urrunaga.

Two days after the release of EIA´s report, the Presidency of the Cabinet of Ministers (PCM) for the Peruvian government issued a public statement announcing that “it is a goal for the Peruvian government to verify the legal origin of the timber, to reduce illegal logging and to establish consistent sanctions in order to prevent the depredation of our natural forests.” The statement came after a meeting between PCM President Jorge Valdes, Minister of Agriculture Luis Ginocchio, and the President of Peru’s forest oversight body (OSINFOR) Rolando Navarro. Navarro added that “at the moment, there is an inadequate use of forest resources, bad forest practices or deforestation, illegal logging and trade, and excessive and dispersed forest and wildlife legislation.” The PCM will be studying recommendations including an evaluation of the country’s forest concessions and creation of an oversight tribunal.

“Additional oversight and transparency by Peruvian agencies is beginning to demonstrate the extent of fraud in the sector – but hopefully this transparency will change it as well,” said Johnson, noting that EIA’s analysis relied on data generated by a government agency whose reform and strengthening were a key aspect of the FTA provisions. “We urge Peru to continue down the path of transparency and reform on which it’s headed, and call upon governments and buyers to wholeheartedly support these efforts. The future of the world’s most magnificent forests depends on it.”

EIA’s report available at www.eia-global.org. Images and video from EIA’s journey to document timber laundering first hand available at www.shootunit.com/eia Digital version with additional information and official documents available at www.peruforests-bosquesperuanos.com.

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