VZCZCXYZ0011
RR RUEHWEB

DE RUEHSO #0102/01 0411255
ZNR UUUUU ZZH
R 101254Z FEB 10
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 0353
INFO RUEHAC/AMEMBASSY ASUNCION
RUEHBR/AMEMBASSY BRASILIA
RUEHBU/AMEMBASSY BUENOS AIRES
RUEHLP/AMEMBASSY LA PAZ
RUEHMN/AMEMBASSY MONTEVIDEO
RUEHRG/AMCONSUL RECIFE
RUEHRI/AMCONSUL RIO DE JANEIRO
RUEHSG/AMEMBASSY SANTIAGO
RUEHSO/AMCONSUL SAO PAULO

UNCLAS SAO PAULO 000102 
 
SENSITIVE 
SIPDIS 
OES /PCI FOR LSPERLING 
OES/ENRC FOR CKARR-COLQUE 
 
E.O. 12958: N/A 
TAGS: SENV ECON ETRD KCRM KJUS BR
SUBJECT: SAO PAULO LEGAL TIMBER PROGRAM TAKES OFF 
 
REF: SAO PAULO 32 
 
1.(SBU) SUMMARY:  To combat the use of illegal timber in civil and 
private construction the State of Sao Paulo--the largest consumer 
of wood products in Brazil--has implemented a lumber certification 
pilot program known as "Cadmadeira."  The program, which works 
closely with NGO partners to help train enforcement officials, uses 
the incentive of massive civil construction projects to recruit 
lumber suppliers and drive demand for sustainable timber in Sao 
Paulo.  As a pilot program, Cadmadeira has the potential to 
significantly reduce illicit lumber consumption by forming 
public-private partnerships.  Nevertheless, redundant coordination 
systems, fraud, corruption and a lack of trained staff remain as 
challenges.  As the program gains momentum, other states are 
approaching the Sao Paulo government to establish similar programs 
in their own jurisdictions. END SUMMARY. 
 
 
 
Background 
 
---------- 
 
 
 
¶2. (U) Sao Paulo state consumes one-third of all Brazilian domestic 
lumber production and, according to Greenpeace statistics, more 
than 60 percent of Brazilian lumber is of illegal origin.  To stem 
the flow of illegal lumber in Sao Paulo, the State Secretary of the 
Environment created the Cadmadeira program to regulate lumber in 
the civil construction industry-the single largest consumer of 
lumber in the state.  The Cadmadeira program requires all companies 
seeking civil tenders to certify the origin, storage and use of 
legal lumber via the federal Document of Forest Origin (DOF) 
established in 2006 to trace the source of lumber products entering 
the state and differentiate legal from illegal product.  Adriana 
Imparato of the NGO Amigos da Amazonia highlighted the program's 
certification requirement as a major step in reducing use of 
illegal lumber since Sao Paulo state government has traditionally 
outsourced entire construction projects to private companies, not 
accustomed to stringent regulation of construction materials. 
Imparato credits the program's initial success to private sector 
buy-in. Companies can support sustainable projects without 
additional cost and regulation: they allow the state government to 
ascertain the sustainability of material. 
 
 
 
NGO Collaboration 
 
------------------ 
 
 
 
¶3. (U) Key to the success of implementing the certification 
standards has been the collaboration between the State Secretary of 
Environment and NGOS such as the Amigos da Amazonia network to 
educate regulators and industry about Cadmadeira requirements. 
Likewise, international groups such as WWF and Green Peace are 
partnering with the Sao Paulo Environmental Police (reftel) and the 
Instituto Florestal to monitor and enforce the program in the 
field.  Imparato told Econoff that "educating all involved about 
the laws, starting from the lumber source" is essential to the 
program's effectiveness.  There is great potential for the 
Instituto Florestal to be a repository of all wood samples from the 
Amazon, while providing analysis for both public and private sector 
needs. 
 
 
 
Economic Implications 
 
--------------------- 
 
 
 
¶4. (U) While Cadmadeira is achieving success in the public 
construction sector, there are no current federal laws in Brazil 
that oblige the private end consumers to buy legal, sustainable 
 
lumber.  Therefore the program has had to rely on regulating the 
use of lumber in public construction as a means of combating 
illegal lumber traffic.  Carlos Beduschi of the State Secretary of 
Environment admitted that regulating the sheer volume of lumber 
consumed or transported through Sao Paulo State was "overwhelming" 
given limited enforcement resources.  As a result, he said the 
initial goal was to target the material at the warehouses and 
lumberyards that seek to supply the extensive public construction 
sector.  Registration of all stock in the warehouses is voluntary, 
with the economic incentive for the lumberyards of becoming a 
preferred supplier for civil construction or furniture projects in 
the state of Sao Paulo.  Beduschi noted that the government is a 
constant and reliable purchaser of lumber, much sought after by 
suppliers, thus creating a powerful incentive to register in 
Cadmaderia. 
 
 
 
Challenges Persist 
 
------------------ 
 
 
 
¶5. (U) Although successful in reducing illicit lumber consumption 
in Sao Paulo, the Cadmadeira program faces continuing challenges. 
For example, separate electronic systems within Brazil aiming to 
control the regulation of legal timber complicate the tracking of 
lumber between states.  In Sao Paulo, the DOF, emitted by the 
federal environment ministry, IBAMA, is required to transport wood 
products.  However, other states, such as Mato Grosso, emit their 
own documents to electronically regulate the flow of forest 
materials.  Imparato criticized this duplication and told Econoff 
that a mechanism must be established to read the DOF via all state 
systems in order to effectively track lumber nationwide. 
 
 
 
¶6. (U) The Cadmadeira system is also subject to fraud, particularly 
in source areas.  Imparato cited document falsification, omission 
of information and corruption as a few examples.  In certain source 
areas there is simply a lack of funding and awareness.  Imparato 
noted that there are only eight officials that regulate 
environmental control for the entire state of Rondonia, a major 
supplier for Sao Paulo State.  Sandra Florsheim of the Instituto 
Florestal expressed similar concern about corruption in the 
northern Amazonian state of Para, which she alleged is pervasive. 
She attributed, fear, bribery and the sheer power of the main 
logging companies in that state as the source.  Florsheim expressed 
skepticism that awareness, training and education on consumption 
can be effective if there is not greater enforcement at the source. 
 
 
 
Comment: Cadmadeira as a Model 
 
------------------------------ 
 
 
 
¶7. (SBU) While still in its infancy, the Cadmadeira program has had 
a positive impact in reducing illicit lumber traffic by 
demonstrating a commitment to sustainable development and creating 
a market incentive for legal timber. In 2007, 2000 companies were 
operating with the DOF system.  The number has since grown to 6000 
in 2009. A pilot program incorporating over 400 municipalities in 
the state of Sao Paulo will soon transfer monitoring activities 
from the state level to these selected cities. The program has also 
gained recognition throughout Brazil and other states. Minas 
Gerais, Bahia and Acre have expressed the desire to work in 
conjunction with Cadmadeira. To replicate Sao Paulo's program 
nationally, however, adoption of a single electronic regulatory 
mechanism is necessary.  Parallel systems presently hamper the 
interstate communication required to track illegal logging back to 
its source.  Meanwhile, replicating the Cadmadeira in major source 
states of the Amazon region with the support and enforcement of the 
federal government, would increase the effectiveness of programs in 
major consumption states such as Sao Paulo and Rio de Janeiro. 
Beyond Brazil, the Cadmadeira program with its positive market 
 
incentive for suppliers and collaborative roots with environmental 
NGOs, offers a potential model for other national or sub-national 
authorities around the world seeking to reduce illegal logging. 
White