VZCZCXRO7682
RR RUEHAG RUEHAST RUEHCHI RUEHDA RUEHDF RUEHDT RUEHFL RUEHHM RUEHIK
RUEHKW RUEHLA RUEHLN RUEHLZ RUEHNH RUEHNP RUEHPOD RUEHROV RUEHSK
RUEHSR RUEHYG
DE RUEHVK #0005/01 0290834
ZNR UUUUU ZZH
R 290834Z JAN 09
FM AMCONSUL VLADIVOSTOK
TO RUEHC/SECSTATE WASHDC 1066
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 1165

UNCLAS SECTION 01 OF 03 VLADIVOSTOK 000005 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD PREL ECON EAGR RS
SUBJECT: FOREST MAFIA ADAPTS TO THE ECONOMIC CRISIS 
 
VLADIVOSTO 00000005  001.2 OF 003 
 
 
Introduction 
------------ 
 
¶1.  Despite lower demand for wood products due to the global 
economic crisis and implementation of the Lacey Act Amendment, 
illegal logging in Russia continues at critical levels. 
Approximately 70 percent of Russia's forests are concentrated in 
the Russian Far East and Siberia in close proximity to China and 
other main timber markets in the Asia Pacific Region.  Logging 
activity and exports increased significantly in 1990s due to the 
high demand for timber in those countries.  According to the 
World Wildlife Fund, official customs documents show that the 
volume of timber officially declared and exported from Russia to 
China and Japan is at least 20 percent lower than the volume 
officially imported by those countries.  That difference 
accounts for just some of the illegal timber leaving Russia. 
Enormous illegal harvests of cedar and other valuable or rare 
species have been occurring throughout the region, including 
within supposedly protected nature preserves with far reaching 
ecological and social impacts. 
 
Increased Tariffs Lead to Greater Illegal Exports 
--------------------------------------------- ---- 
 
¶2.  Legal exports remained high until 2007, when, in order to 
encourage domestic reprocessing of Russian timber, the Kremlin 
increased export tariffs for round wood to 20 per cent of its 
delivery price.  The tariff was again increased by 25 per cent 
in April 2008.  China and Japan remained the main consumers of 
wood, though volumes of timber export decreased slightly.  As a 
result, wood export via Grodekovo, the main railroad customs 
point in Primorye, decreased from 7.3 million tons in 2007 to 
6.2 million tons of timber in 2008.  Moscow had planned to 
further increase the tariff to 80 per cent in January 2009 -- a 
level that in effect serves as a timber export ban -- but has 
postponed its implementation for a year.  An environmental 
contact of the Consulate stated that though the current 
financial crisis has lowered overall demand for wood products, 
the proportion of illegally-harvested wood will increase because 
of increased export tariffs and declining profitability for 
larger, legal logging firms.  Demand for hard wood is down, but 
demand for soft wood, like pine, is up.  Pine nuts are a source 
of sustenance for wild boar, which are in turn a food source for 
predators like leopards and tigers. 
 
Poaching Occurs Throughout the Russian Far East 
--------------------------------------------- -- 
 
¶3.  Illegal logging is generally concentrated in border areas, 
where it is less expensive to ship wood to processing facilities 
in China.  The largest illegal cutting operations in Russia are 
located in the areas of the Russian Far East and Siberia 
neighboring China.  Primorye is a leading area for illicit 
cutting, but numerous illegal operations have been discovered in 
Khabarovsk Krai, and Amur and Jewish Autonomous Oblasts in 2008. 
 In summer 2008 authorities discovered a poaching operation in 
the Dalnerechensk district north of Vladivostok that had 
illegally clear cut over 2,300 cubic meters of timber including 
1,500 cubic meters of Korean Cedar.  That endangered species is 
very popular in China for furniture and the pine nuts provide 
important sustenance for regional fauna. 
 
¶4.  In 2008, Oleg Mitvol, former Director of Rosprirodnadzor 
(Russia's Federal Service for Supervision of Natural Resources) 
reported numerous timber industry violations in Amur Oblast. 
Investigators found documentation stating that 6,000 cubic 
meters of timber was officially harvested in the oblast's 
Shimanovsk district, but railroad documents recorded 56,000 
cubic meters of timber shipped from the district over the same 
period. 
 
How It's Done 
------------- 
 
¶5.  Smugglers use various ways to illicitly export illegal 
timber, most of which are able to pass through customs 
inspections and established border crossings using fake 
documents and fraudulent declarations.  Often companies mix 
illegally harvested wood into shipments of legally procured 
product.  They also make customs declarations passing off 
valuable and prohibited species as low-value, legal timber. 
Smugglers of course also resort to clandestine export without 
documents and through unguarded areas of the border.  In early 
January, authorities caught a Chinese company attempting to 
export 4,000 cubic meters of oak and ash valued at 2 million 
dollars from Primorye using fake export documents. 
 
¶6.  Illegal export often involves corruption and complicity by 
the authorities.  Two officers from the Khabarovsk Regional 
Service for Economic Crimes who were detained in spring 2007 
were eventually found guilty of abuse of office while aiding 
Chinese and Russian logging companies in illegally harvesting 
 
VLADIVOSTO 00000005  002.2 OF 003 
 
 
and exporting Russian timber.  Though it is a positive sign that 
officials were found guilty of corruption, their penalty was 
light -- in early 2008, their  sentences were suspended and they 
were released, though guidelines allowed for prison terms of up 
to ten years. 
 
Rangers and Citizens Demand Help to Fight Poachers 
--------------------------------------------- ----- 
 
¶7.  Last year, a group of 38 Primorye park rangers and 
environmentalists sent a petition to Prime Minister Vladimir 
Putin asking him to transfer management the region's forests 
from Primorye authorities to the Federal Forestry Agency.   The 
signatories asserted that the regional government is 
consistently failing to fulfill its responsibility to prevent 
illegal logging.  Although a new Federal Forest Code came into 
effect in January 2007 requiring regional authorities to protect 
woodlands, Primorye officials have yet to create and adequately 
fund an effective forest management system.  Residents 
frustrated by inaction have staged protests to attract attention 
to illegal logging and have even tried to take forest protection 
into their own hands. The World Wildlife Fund's (WWF) Russian 
Far East branch and other environmental organizations often lend 
support. 
 
¶8.  In summer 2008, residents of a village north of Vladivostok 
staged a protest against officially-approved "sanitary cutting," 
when logging companies harvest dead trees and clean woodlands 
after wildfires.  According to villagers, loggers instead clear 
cut everything, including healthy trees and left behind 
wastelands in place of viable forests.  Loggers have taken 
advantage of the fact that forest rangers, suffering from a lack 
of regional funding, have drastically reduced staff and 
curtailed patrols. 
 
¶9.  Loggers are reportedly now setting their sights on 22,000 
hectares of premium restricted forest in Pozharskiy Rayon. 
Setting a dangerous precedent, authorities issued three permits 
in 2007 to cut 5,600 cubic meters of timber after a seasonal 
wildfire had occurred.  In the wake of this year's spring 
wildfires authorities increased the quota to 20,000 cubic meters 
in order to "clean up" the area.  Local villagers suspect that 
most of that quota will come from perfectly healthy trees 
unaffected by fire.  Denis Smirnov, coordinator of the World 
Wildlife Fund's forestry program in Primorye, told the Consulate 
Econ section that he suspected loggers may set fire to woodlands 
in order to obtain permission to log the areas afterward.  He 
affirmed that environmentalists are ready to support villagers 
in protecting the forests. 
 
Retribution Against Environmentalists 
------------------------------------- 
 
¶10.  This past winter, unknown perpetrators set ablaze the house 
of Yuriy Bersenev, a WWF project coordinator who works to 
safeguard protected nature reserves.  Two earlier attempts to 
threaten or endanger WWF staff, including another case of arson, 
occurred last month in the village of Novaya Moskva in 
southeastern Primorye.  According to WWF and nature preserve 
workers, the local "Forest Mafia" -- a band of people engaged in 
illegal timber cutting -- has openly declared war on those 
working to preserve forests and enforce environmental laws. 
Bersenev said the escalation is a result of the weakness of 
national forest legislation and rampant corruption in the 
Russian Far East.  The perpetrators of both cases remain 
unknown. 
 
Villagers Suffer in More Ways than One 
-------------------------------------- 
 
¶11.  Along with dealing with the effects of illegal logging, 
honest villagers also face trouble following local laws 
themselves.  For example, when large logging companies own the 
rights to forests nearby, villagers are often forced to travel 
twenty kilometers or more to legally gather firewood for their 
own subsistence.  Such a story was confirmed by the Consul 
General during his visit to the remote town of Krasny Yar, an 
eleven hour drive from Vladivostok.  The town is surrounded by 
birch, cedar, and pine forest, but residents are prohibited from 
gathering wood nearby. 
 
Lack of Jobs Leads to Poaching 
------------------------------ 
 
¶12.  Many villages throughout the region were originally 
established as logging towns during the Soviet era.  Legitimate 
job opportunities have dwindled since then, and the current 
global financial crisis has made life there even more difficult. 
 Many of the jobless former-loggers have resorted to 
smaller-scale, ad-hoc -- and illegal -- harvesting of wood. 
Providing their services to the "Forest Mafia" is often their 
only source of income.  With the drop in industrial production 
 
VLADIVOSTO 00000005  003.2 OF 003 
 
 
over the border in China, the price of a cubic meter of spruce 
has dropped from 120 USD to 60.  Established companies are often 
finding it more profitable to use the services of these 
out-of-work villagers cutting down trees in unauthorized areas 
than to use legal, established channels. 
 
Conclusion 
---------- 
 
¶13.  According to WWF expert Smirnov, 50 percent of soft wood 
and 90 percent of hardwood harvested in the Russian Far East and 
Siberia eventually ends up in the US as finished goods after 
being processed in China.  The Lacey Act Amendment, which 
requires documentation that wood products sold in the U.S. were 
obtained legally and sustainably, may help stem the flow of 
illegal timber coming from the Russian Far East.  Post would 
welcome and be happy to assist NGO's or USG experts who could 
provide timber companies with briefings on the Lacey Act 
Amendment and the implications for wood products originating in 
Russia. 
Armbruster