Falsification of Timber Export Documents

"Kevazingogate" Scandal in Gabon

The tropical timber industry has a long supply chain, with a high risk of fraud throughout. From illegal logging to the sale of furniture labeled as “sustainably produced,” misrepresentation allows illegally procured wood to move from the forest into the global economy. An important juncture where misrepresentation can occur is at the ports where ships laden with timber leaves the docks.

Goods generally must be labeled by producing countries as eligible for export. Species of wood protected by national or international laws shouldn’t be harvested, let alone exported. Intentionally mislabeling timber shipments via fake labels or collusion with authorities allows criminals to get around such laws, however, and frauds such as bribery and tax evasion are often concurrent.

Several powerful U.S. laws guard against these types of fraud, including  the Lacey Act and Foreign Corrupt Practices Act. Both have strong whistleblower provisions that can protect and reward individuals who come forward with knowledge of illicit activity. Critically, they also have transnational applications.

A recent case concerning disappearing containers of rare wood from Gabon demonstrates the role that whistleblowers can play in combatting fraud in the timber industry.

Kevazingogate

In early 2019, Interpol and the International Customs Organization found more than 350 containers of Kevazingo wood at Owendo, a major port in Gabon and one of the largest on the Central African coast. The containers were found in depots belonging to a Chinese businessman and marked for export to China, Gabon’s largest trading partner.

Gabon is one of six countries comprising the Congo Basin, a resource-rich area that contains the world’s second-largest rainforest after the Amazon. Deforestation resulting from exploitation of those resources—including timber, wildlife and palm oil—has ravaged the basin for centuries. This exploitation is often enabled by corruption at the highest levels of government and industry, as documented by international NGOs.

As 80% of Gabon’s land is covered by forest, the country is a major exporter of highly sought-after tropical woods such as Kevazingo, an amber wood prized in Asia for its use in furniture and musical instruments. Gabonese President Ali Bongo banned the export of Kevazingo, along with all raw timber, in 2018 as part of his push toward environmentalism. He also pledged to obtain Forest Stewardship Council certification for timber exports by 2022.

The containers of Kevazingo found at the port bore a Gabonese forest ministry label authorizing them for export. Documents posted online by anonymous whistleblowers contained the signature of Forest Minister Guy Bertrand Mapangou, suggesting government officials were complicit in the mislabeling. Mapangou denied any involvement, claiming the documents were forged.

Two months after the containers were discovered, more than half of them suddenly disappeared. About half the missing containers were later found in depots belonging to private companies. Some of the recovered wood was sold in an auction to benefit the government, but several containers were reportedly shipped to China successfully.

The scandal, dubbed “Kevazingogate” by the African press, prompted President Bongo to dismiss Mapangou, along with his foreign minister and more than a dozen other officials. Bongo arrested several Chinese and Gabonese nationals, appointed a British environmentalist as the new forest minister, and suspended the export license of a Chinese export company named in an investigation by the nonprofit Environmental Investigation Agency.

Key Takeaways

Misrepresenting shipments of illegally harvested timber as eligible for export often violates U.S. anti-corruption and wildlife protection laws, as well as the laws of the countries in which the violations are occurring. These laws have strong whistleblower protections that can both apply to and be used by individuals in countries outside the U.S.

One of these laws is the Lacey Act, which holds U.S. importers accountable for ensuring that imported timber or plant products are legally sourced. Under the Act, importers are responsible for verifying the legality of their products at every point of the supply chain. Additionally, securities laws such as the Dodd-Frank Act prohibit companies from misleading investors about deforestation risks, and apply to any company that trades on U.S. stock exchanges.

The Foreign Corrupt Practices Act also could provide a powerful tool in combatting the illicit timber trade. It prevents companies from using bribes to facilitate their business, such as paying government officials to issue export licenses – a common practice in the illegal trafficking of timber. The FCPA extends to a company’s employees, officers, stockholders, and agents such as third-party actors, distributors, and consultants.

Though the individuals who circulated the export documents bearing Mapangou’s signature never identified themselves publicly, they likely would have been eligible for protection and rewards under U.S. law given they had information crucial to successful enforcement. As efforts to combat the illegal timber trade continue, educating potential whistleblowers around the world about their rights under these powerful U.S. laws will be a crucial tool.

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