A truck transports logs near Kalaw in Shan State. Myanmar has one of the highest rates of forest depletion in the world. Photo: Aurimages/AFP.

The London-based Environmental Investigation Agency (EIA) is sounding the alarm over what it calls a “shadowy agreement” made by the Myanmar government to allow the logging and export of 5,000 tons of hardwood timber, including 3,000 tons of highly prized teak.

In a statement, the EIA says that the timber deal, first reported by local media in Myanmar’s Kayah State, “will further undermine the Myanmar Government’s stated policy of improving forest governance after decades of mismanagement which have led to the country suffering one of the highest rates of forest loss in the world,” if it is allowed to go through.

According to local reports, the timber is to be harvested in areas under the control of the Karenni National People’s Liberation Front (KNPLF), an armed ethnic organization that now acts as a border guard aligned with the government, and sold through auctions conducted by the Myanmar Timber Enterprise (MTE), a government agency.

The EIA cited several reasons why the deal was “troubling,” including the fact the timber will be extracted from Kayah State, where ongoing conflict between the Myanmar military and an armed ethnic group, the Karenni National Progressive Party (KNPP), has been linked specifically to the timber trade.

Meanwhile, the 5,000 tons of timber to be harvested will be on top of Myanmar’s Annual Allowable Cut, meaning the timber deal appears to violate the country’s own forestry regulations.

The Myanmar Timber Enterprise’s involvement is another red flag, as the agency “remains an opaque organization and under its system it is impossible to trace the exact origin of the timber it sells, so the risk of cutting in excess of the stated 5,000 tons is high,” according to the EIA.

Freshly cut teak logs in Nongdao, Myanmar. Photo: EIA.

Faith Doherty, who heads EIA’s forests campaigns, said: “It is impossible to know the exact details of this timber agreement as it is shrouded in secrecy, with only a few knowing the particulars. Any possible certification schemes and, or box-ticking procedures currently in play, fall well below what is required by legislation in the European Union, the United States or Australia.”

The EU Timber Regulation (EUTR), the US Lacey Act and Australia’s Illegal Logging Prohibition Act (ILPA) require companies to perform due diligence to ensure hat the timber they’re buying is of sustainable and legal provenance.

Sweden set a legal precedent in 2016 by prosecuting an importer of teak from Myanmar under the EUTR following an investigation that found the company could not produce documents to verify an adequate chain of custody, including who harvested the timber or where it was cut, after purchasing teak from the MTE.

Decking on luxury yachts

Last year Denmark prohibited all companies from selling teak imported from Myanmar in European markets. An investigation earlier this year by the EIA discovered that teak that is illegally logged and smuggled out of Myanmar often ends up as decking on luxury yachts in the UK.

The EIA called the Kayah logging deal “a significant step backwards” for Myanmar, as the country’s government had taken steps to institute progressive forestry policies over the past few years, such as banning the export of raw logs in 2014 and adopting a one-year ban on domestic logging for private export of timber resources that ended in 2017.

The MTE is now in the process of restructuring under private sector management, essentially planning to become a corporation within the country’s government by 2020. Meanwhile, the illegal timber trade in Myanmar has reportedly continued apace.

While the MTE claimed that both the illegal harvest and export of teak and other wood was “drastically reduced” as a result of the export ban, there were conflicting reports from within the country that claimed the ban was largely ineffective.

Illegal logging rampant

Official data shows that, whatever the impact of the ban, illegal loggers quickly resumed their activities, as there were 1,425 registered cases of illegal logging in Myanmar’s Magway Region alone over the first 15 months following the end of the moratorium on logging.

Doherty warned companies against doing business with Myanmar and the MTE: “We would advise any teak trader to steer well clear of this timber or any timber laundered as a result of this agreement,” she said. “This applies especially to those based in Europe as, unlike Myanmar, active legislation poses a major risk to any party importing timber which is clearly illegal or which does not meet the due diligence criteria of the EU Timber Regulation.”

The EIA also called on the government of Myanmar to revoke the Kayah timber trade deal “and instead resume its path towards meaningful forestry reform, for the collective good of the country’s people and environment.”

A forestry department inspection team in Myanmar checks timber to be exported and monitors container loading at the site before sealing the container. Photo: Ann Wang.

President’s Office spokesman U Zaw Htay told a press conference in Nay Pyi Daw last weekend that the government’s agreement with the Karenni National People’s Liberation Front, which became a Border Guard Force allied with the government in 2009, would be its last logging deal with an ethnic armed group, according to the Irrawaddy.

This report first appeared on Mongabay. The original version can be seen here.

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