Around the world, as much as 23% to 30% of hardwood lumber and plywood traded globally could be from illegal logging activities. The high rate of illegal logging is driven by several factors that create a high risk of fraud, bribery, and other forms of corruption in the global timber trade.
Substantial profits from illegal logging provide a strong motivation to engage in timber fraud, while loopholes, lax enforcement, and corruption provide extensive opportunities for fraud to go undetected. Cases against major timber importers show that the ability to rationalize fraud is not an isolated phenomenon, but one that is present throughout the supply chain.
Whistleblowers can play a powerful role in detecting and prosecuting timber fraud under powerful U.S. reward laws, including the False Claims Act (FCA), Dodd-Frank Act, and the Foreign Corrupt Practices Act (FCPA). Using these laws, whistleblowers can report confidentially, and whistleblowers whose original information leads to a successful prosecution can qualify for a financial reward.
However, whistleblower laws are complex, and it is recommended that whistleblowers consult with a qualified attorney before acting on any information about potential wrongdoing. Through its Legal Assistance Program, the National Whistleblower Center helps connect would-be whistleblowers to attorneys specializing in whistleblower law.
NWC works with an independent public interest law firm, the National Whistleblower Legal Defense and Education Fund (“Fund”), which provides a secure intake form that allows whistleblowers to submit basic information about their case on a confidential basis.
Potential whistleblowers looking for a whistleblower attorney are encouraged to submit their concerns to the Fund’s intake site. Once submitted, the intake form will be reviewed by a highly qualified whistleblower attorney, who may make one of several recommendations.
Potential whistleblowers have more rights than they may think. In recent years, a powerful suite of whistleblower laws has been enacted in the United States to enable whistleblowers to report wrongdoing confidentially and to receive financial rewards for contributing to successful prosecutions.
Many U.S. laws applicable to fraud within the timber industry have transnational applications. A whistleblower does not need to be a U.S. citizen in order to receive assurances of confidentiality and monetary rewards, and the company engaged in wrongdoing does not need to be U.S.-based in order to be held accountable.
The False Claims Act is one of the most powerful whistleblower laws. Using the False Claims Act, whistleblowers can report “reverse false claims” violations, instances in which a wrongdoer has prevented the government from collecting what it is owed, such as customs violations. Under the False Claims Act, whistleblowers are eligible for 15% to 30% of the monetary sanctions. These rewards are often substantial, since under the False Claims Act, the criminal is liable for a civil penalty as well as treble damages.
Whistleblowers can also confidentially report bribery through the Foreign Corrupt Practices Act, one of the most powerful and effective transnational anticorruption laws in the world. The FCPA is extremely broad in scope and applicable worldwide. It applies to all U.S. or foreign companies required to file periodic reports with the U.S. Securities and Exchange Commission, and it extends to a company’s employees, officers, stockholders, and agents such as third-party actors, distributors, and consultants.
Additionally, whistleblowers can rely use environmental laws with whistleblower provisions such as the Lacey Act or the Endangered Species Act. The Lacey Act has long been one of the most powerful U.S. laws for fighting wildlife trafficking, and a 2008 amendment to the Lacey Act banned the importing, exporting, buying, and selling of illegally sourced plants. The amendment also requires companies trading in most wood products to submit formal declarations of the species and origin of harvest. Whistleblowers who disclose original information that results in successful Lacey Act enforcement actions are eligible for a monetary reward.
With substantial challenges for law enforcement around the world, whistleblowers are needed to protect forests by helping to detect and prosecute companies and individuals that engage in forest fraud and corruption. Thanks to these powerful U.S. whistleblower laws, whistleblowers around the world have a powerful avenue for helping to detect and prosecute timber fraud, while protecting their identity and qualifying for a reward.