It was almost seven o’clock on the night of Friday, November 29th, 2019, when agents at the Rancho forestry checkpoint in the Peruvian region of Huánuco conducted a routine inspection of a truck loaded with a full container. Along with 35,518 cubic meters of duly documented timber, they found cut boards that did not appear in the official transport manifest.
The goods came from a private concession of the logging company Inversiones La Oroza located in Indiana, in the Loreto region, deep in the Amazon rainforest. They were being transported to Callao, Peru’s main seaport, which dispatches a large part of the country’s timber exports. The agents followed protocol: they immobilized the vehicle, seized the timber and notified the regional authority in order to verify their findings.
After verifying the seizure, the forestry authority found that the truck was carrying 34 pieces with a volume of 0.913 cubic meters of the species andiroba (Carapa guianensis) without the “official documents for its commerce, possession and transport, which constitutes a VERY SERIOUS forestry infraction”.
In other words, ten trees had been logged in compliance with the concession’s Annual Operating Plan, and one more tree was logged without any kind of permit.
After a lot of paperwork, the 0.913 cubic meters were seized, “destined to rot in a warehouse.” This is how a former employee at the Huánuco Wildlife Forestry Authority who preferred not to reveal their name for fear of reprisals characterized what happens to wood after it is seized. The owner of the cargo, the company P&O Exportaciones y Comercialización S.A.C., apologized for the mistake and paid a fine of US$135.
According to a person in charge of this checkpoint for a while, similar episodes, with varying load sizes, used to take place between eighty and a hundred times a year before the pandemic.
By the end of that November, P&O Exportaciones y Comercialización was bringing much more timber than usual to the port, according to the Forest Transport Permits (GTF in Spanish) leaving Pucallpa, Ucayali, obtained by OjoPúblico, a partner in this collaboration. This Amazonian port on the Ucayali River is known as Peru’s timber capital because it receives timber from concessions with multiple types of logging permits from the Amazonian regions of Ucayali and neighboring Loreto.
With 87 sawmills — compared to only 35 in Iquitos, Loreto, the largest city in the region — Pucallpa also processes the largest amount of wood in the Amazon.
Between November and April, with heavy rains and rising rivers and streams, large ferries or rafts can flow down with ease moving huge loads.
On December 17th, after the setback in Huánuco, P&O shipped its timber to the Dominican Republic, where the importer Mafilo bought it for an FOB value of US$15,239, which includes port, labeling, packaging and customs expenses, among others. Upon entry, however, Dominican customs registered the import as “cachimbo” wood and did not register the andiroba, which constituted the largest proportion of the cargo.
This episode of common occurrence reflects the fact that the product of possibly illegal logging in the Peruvian Amazon is constantly flowing into markets, and that international trade is often inconsistent.
The achievements made in the past by the Peruvian state to trace the origin of timber from the Amazon to the ports and prevent the degradation of its rainforests have been receding in recent years under pressure from the powerful logging lobby, as stated by different actors in our interviews with them.
The Covid pandemic has made controls even more difficult: due to mobility restrictions there has been no supervision in the forest, and interested parties are pushing to replace the certificate of origin for commercialization issued in the forest with the one issued by the sawmills, where efforts to launder illegally-sourced wood abound. In addition, sector supervisors agree that the efforts of the Peruvian government to work with the United States in improving the traceability of timber exports to that country are moving very slowly.
Moreover, the exemplary sanctions that the United States imposed in 2017 and 2019 on two Peruvian logging companies, Inversiones La Oroza and Inversiones WCA, respectively, for having brought in loads of sawn timber supported by false documentation, did not lead the government to exert any pressure on them to implement transparent extraction processes. As far as public documentation allows us to see, neither these companies nor the government have proved to U.S. authorities that they can trace the timber they export all the way from the source, or guarantee its compliance with national environmental and forestry regulations.
Instead, Inversiones La Oroza was given new concessions and benefits behind closed doors, despite its record of infractions of Peruvian Forestry Law up until 2018. Furthermore, La Oroza and WCA Investments have reinvented themselves to continue exporting Amazonian timber (from Brazil or Peru) to some of the same customers in Mexico to whom they had sold illegally-sourced wood in the past.
The main partner of Inversiones WCA, William Castro Amaringo, suspended timber exports with this company after being sanctioned in the United States, but continued exports in 2020 with another of his companies dedicated to sawing and planing wood, Miremi S.A.C.
The Huánuco episode stars all the new allies through which Luis Ascencio Jurado, main partner at Inversiones La Oroza, has managed to diversify his international operations. P&O Exportaciones e Importaciones is an allied company created by an uncle-in-law of Ascencio in 2016, just after the United States opened an investigation into Inversiones La Oroza for exporting illegally-sourced timber to that country. P&O not only buys timber from Inversiones La Oroza, but has been exporting this product to Mafilo, another logging company created by Ascencio himself in the Dominican Republic and of which he is majority shareholder, according to the public registry of that country.
These are some of the findings of this cross-border journalistic investigation carried out by Columbia Journalism Investigations (CJI), the Latin American Center for Investigative Journalism (CLIP), OjoPúblico in Peru, El Informe with Alicia Ortega of Grupo SIN (Dominican Republic), Mongabay Latam in Mexico and Peru and Agência Pública in Brazil.
The results of this investigation are presented in five chapters: this one deals with the evolution of wood traceability from the Peruvian Amazon, and the antics of companies in Peru blocked from exporting to the United States in recent years; chapter two follows the international operations of Inversiones La Oroza and its allies; chapter three reveals the operations of companies buying Peruvian timber in Mexico; and chapter four analyzes 1,301 forest management plans in Peru, over the last 15 years, in which authorities found false information.
Chapter five is an interview this news team conducted with Ascencio Jurado to get his version of the facts. The majority partner of Inversiones La Oroza assured that neither his new businesses nor his allies in Peru and the Dominican Republic are incurring in any irregularities, that they are simply legitimate businesses and small ones at that. He also said that today he takes all precautions to ensure that the timber he sells is of legal origin. “I love the Amazon”, he declares emphatically, “I would never mistreat it, I tell you that from my heart”.
Lesson not learned
According to Interpol estimates, up to 60% of timber coming from Peru is illegally extracted. Illegal trafficking is very costly to the timber industry worldwide because, according to this international law enforcement agency, it devalues the price of legally-extracted timber by 7 to 16%.
In a data analysis project, the results of which will be made public next July, Proética, Transparency International’s chapter in Peru, systematized information from 1,301 forest management plans (FMPs) in which the Forestry and Wildlife Resources Oversight Agency (Osinfor) — the entity in charge of overseeing timber production — had found false information. This news team had access to the pilot of this platform, maderalegal.pe, which reveals that 749 actors — including legal representatives, supervisors, forestry consultants and professionals — are involved in approving plans that include inexistent trees. In this way, loggers have been practicing indiscriminate logging without any consideration for forest sustainability. Of the nearly 758,000 trees that the approved FMPs allowed to be cut between 2005 and 2019, Osinfor has monitored 162,000 since 2010, and has not been able to find 82% of them. This amounts to approximately 132,000 trees extracted in areas without permits.
Forest management plans with false information accompanied the timber arriving to Houston from Iquitos in 2015 and owned mainly by Inversiones La Oroza, Corporación Industrial Forestal and Inversiones WCA. At its peak, between 2012 and 2015, Inversiones La Oroza exported more sawn timber from Peru than any other exporter. In 2015 alone it extracted 14,000 tons of timber, more than twice as much as any other competitor. However, the investigation following the discovery of the Yacu Kallpa established, according to information provided by the Peruvian government to the environmental civilian organization Environmental Investigation Agency (EIA), that 82.6% of the timber shipped by La Oroza to Houston was illegal, 16.8% had not been verified, and just 0.57% was legal. La Oroza’s timber had certificates of origin from eight different concessions, two permits from native communities and two from local forests, but none of the annual operating plans (AOPs) for the timber were legitimate.
The buyer of 85% of the cargo that came on the Yacu Kallpa was the U.S. company Global Plywood & Lumber, which belongs to a conglomerate of Mexican companies owned by several generations of the Ceballos family. As verified by Mongabay Latam, a partner in this collaboration, other companies of the same family clan were also business allies of Inversiones La Oroza.
On the last trip of the Yacu Kallpa, before leaving Iquitos in November 2015, Peru’s specialized environmental prosecutor’s office (FEMA), which had been seizing illegal timber, had already warned that at least 15% of the cargo it was carrying was illegal. For various reasons, they did not stop the export, but while the cargo was traveling, the Peruvian customs authority (Sunat) and Osinfor continued to cross-check information. By the time it arrived at the Mexican port of Tampico in February 2016, they had already verified that a large part of this second cargo was illegal. As far as they were able to verify, it was established that 96% of the cargo belonging to Inversiones La Oroza was illegal.
Mexican authorities immobilized the timber for a few months, but due to the efforts of the timber lobby in both countries, as documented in a journalistic investigation by OjoPúblico, W Radio and Connectas, the load was finally released and delivered to local buyers, ignoring the Peruvian court order asking their Mexican counterparts to seize it.
Among the main importers were the Mexican companies CG Grupo Forestal and CG Universal Wood, which belong to the Ceballos Gallardo brothers. One of them, Jose Ernesto, also controlled Global Plywood & Lumber in the United States. And like in the best of marriages, the Ceballos remain loyal to their Peruvian partners to this day, despite their controversial record. (See other text in this investigation: La Oroza’s loyal Mexican customers).
Following these blows, after 2016, the Peruvian loggers saw their business crumble.
One U.S. importer, whose cargo was also on the Yacu Kallpa, told Associated Press: “I’m done with Peru.”
The reputation of their companies took a hit after the Yacu Kallpa case, which closed the doors of international markets for their wood. And yet, Peruvian justice has not sanctioned those responsible, nor have governments started to move faster in ensuring that their exporters comply with their Forestry Law. La Oroza, the main company involved in the case, continued to commit infractions until 2018.
Meanwhile, according to the latest public data provided by the relevant supervisory body in the field, up until the start of the pandemic, illegal timber continued to flow from the Peruvian rainforest. Out of the 58 early warnings issued by Osinfor regarding cases where “100% of the timber does not come from the authorized area,” between March 2019 and March 2020, 35 referred to private properties and 18 to native and farming communities. These findings took place before the pandemic made it necessary to impose mobility restrictions, and since then, Osinfor’s field visits have been practically suspended. The area covered by these illegal extractions amounted to a little over 74,000 cubic meters.
Supporting the decision that ended up banning Inversiones La Oroza in 2017 and Inversiones WCA in 2019 from exporting timber to the United States was the “forestry annex” of the bilateral trade agreement that Peru had signed with the United States in 2009. This allowed the US to require audits of any timber producer or exporter suspected of selling illegal wood.
In 2016, the Obama administration’s United States Trade Representative (USTR), Michael Froman, appealing to a clause in the treaty, called on Peru to step up protection of its forests. The following year, his successor Robert Lighthizer in the Trump administration enforced the treaty’s forestry annex for the first time. He instructed Customs and Border Protection (CBP) to bar Inversiones La Oroza from marketing timber in the country for three years, or until the company “complies with all regulations that apply to it,” the USTR said at the time. In 2019, the same official applied it for the second time, when it imposed the ban on Inversiones WCA.
In both cases, it was the Peruvian authorities who gave them the information to make the decision, as reported by Lighthizer. In 2014, Osinfor and Sunat started tracking the origin of timber being exported and that is when they found that customs declarations and internal transport permits made claims of origin that, when verified in the field, did not check out. As a result of that collaboration, it was possible to establish the illegal origin of the timber transported on the trips of the Yacu Kallpa in 2015. Later, in 2018, another U.S. request to the government of Peru to verify the origin of three suspicious shipments found that one of them, owned by Inversiones WCA, had not been extracted legally. In 2019, a three-year ban was also imposed on this company.
As this journalistic collaboration was able to verify, U.S. authorities continue to investigate those involved in violating the Lacey Act, a century-old federal regulation created to protect wildlife. They did not share details on the progress, as it could put the integrity of the process at risk.
It has been rare, however, for Lacey Act violations to result in convictions. Since the law was updated in 2008, including special controls on the importation of endangered wood species, only a handful of people have been convicted.
Independently, and without exchanging information with its counterparts in the United States, the Peruvian environmental prosecutor’s office (FEMA) has continued its investigations into the Yacu Kallpa shipments. Six years later, however, no one has been charged.
The environmental prosecutor of Loreto, Alberto Yusen Caraza Atoche, explained to OjoPúblico that the pandemic has made it difficult for them to go out into the field, and that the delay has also been due to the high turnover of prosecutors. However, he assures that in the last two years there has been more stability and, at least in Maynas (Loreto), he is already close to subpoenaing the accused.
“Of the 35 cases in Loreto, half of them have been completed and we are ready to present the corresponding requirements,” said prosecutor Caraza Atoche in March to OjoPúblico , a partner of this journalistic collaboration. Of the 35 casefiles, he explained, some 12 have to do with Inversiones La Oroza. He also informed that the regional FEMA in Nauta has 15 other casefiles and the one in Alto Amazonas has another two. Local authorities, intermediaries, foresters and communities are being investigated, totaling 125 people.
For prosecutor Caraza, “this case is extremely important and emblematic because of the amount of illegal wood that they tried to take abroad and because 95% of all the wood on the Yacu Kallpa has already determined to be of illegal origin, according to the investigations carried out by the Public Prosecutor’s Office and based on Osinfor reports”.
When Nauta FEMA prosecutor Félix Castro took office in May 2019, he found that of the 15 casefiles he was investigating, ten had already been formally presented before a court in 2018 and five were still under preliminary investigations, as prosecutor Castro himself told Mongabay Latam in an interview.
“We started looking for information everywhere with the aim of fully identifying the criminal act, that is, what each company did,” Castro explained. ¨Between October and November 2019, we started to correct everything that was wrong. At the end of 2019 we gathered information and took statements, and in 2020 the process was frozen due to the pandemic”.
On the other hand, it took FEMA in Nauta a whole year to present formal charges, until October 2018. Because of the delay, Inversiones La Oroza filed an appeal to control the deadline, which led to a judge, in late 2019, putting an end to the preliminary investigations for those ten cases documenting illegal trafficking of forest products.
After taking office, prosecutor Castro realized that they had not considered a different crime, that of presenting “false information in reports”, reports which include the Forest Transport Permits. Declaring a false origin for the wood, for example, also constitutes a crime.
“For this mega-case, which includes 45 individuals and legal entities, we raided companies in November and December 2020, we collected accounting information and we were able to verify that there are no procedures in place to account for the transformation of the wood,” says Castro, explaining that administrative authorities issue the Forest Transport Permits for export as if the origin and transformation of the wood had been accredited, when in all these cases it had not. This is why they brought in regional government officials involved in these controls and companies involved in the Yacu Kallpa trips into the judicial process.
“In the initial cases only the exporting companies were included, among them Inversiones La Oroza, Inversiones WCA, Madex and Triplay Iquitos, but in the new case we included all intermediaries,” says prosecutor Félix Castro. “We found, for example, a case in which wood was sold in a single day to three different people and at exorbitant prices, ranging from the wood being supposedly bought at 1500 soles in the extraction and, in a single day, the wood reaches a value of 125,000 soles. And only by looking at receipts.”
Since the raids, FEMA requested a lift on the tax and banking secrecy of these companies, but this was authorized by a judge only last March and so now they are waiting for the Superintendence of Banking and Insurance of Peru to hand them the information. In the tax case, they have corrected process errors in order to request the information to Sunat, the Peruvian tax and customs authority.
Other agencies have also continued to investigate. The Ministry of Culture, for example, supported the application for cancellation of 78 forestry concessions granted by the regional government of Loreto, since they overlap with territories already earmarked for creating a reservation for protecting several indigenous peoples in isolation and initial contact (called ‘PIACI’ in Peruvian law).
The holder of two of these concessions, granted in 2004 and 2016, is Inversiones La Oroza.
The Ministry’s resolution says that the cancellation is in the hands of the regional government of Loreto, but Loreto assures that it must “compensate those lands that were granted” before the indigenous reservations can be made official, as it fears that the owners of the concessions will sue and request compensation. It is a fragile argument in light of the decision of the Peruvian Constitutional Court on the rights of concession holders, which states that the rights of affected citizens hold priority over those given by the State to a private party for their sole benefit. (TC Exp 006-2000-AI/TC)
As EIA analyzed in its report Moment of Truth, effective control maneuvers between 2014 to 2017, forest surveillance, increased verification of transport permits and systematic cross-checking with customs information led to effective sanctions against those circumventing the norms. They also demonstrated that “Peru … does have the appropriate institutions with sufficient jurisdiction and the minimum resources necessary to begin to have an impact.”
However, the shock caused by the seizures and sanctions in the timber sector and its operations did not push the country to tighten the screws and ensure that no more illegally-sourced timber continued to leave. On the contrary, the private sector pressured the government even more intently to loosen controls.
Following the Yacu Kallpa turmoil, in order to honor its trade agreement with the United States, Peru had committed to modifying the customs form in order to force loggers to declare the origin of the wood more explicitly.
The idea was to learn from the effective collaboration between the forestry and customs authorities, Osinfor and Sunat, which had led to stopping the flow of illegal timber from Iquitos to Houston, and use this method to monitor all species, not only those listed as endangered in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
Yet the draft of the form made by then director of the National Forestry and Wildlife Service (Serfor), Fabiola Muñoz Dodero, according to Sunat, did not meet the commitment made by the Peruvian government. For this reason, the customs authority made another draft, endorsed by the Ministry of Economy and Finance (MEF), and submitted it to public opinion. Unlike Osinfor, which supervises and verifies the origin of extracted timber in the forest, Serfor’s job is to draw guidelines for the sustainable management of the forest, and to manage permits and other matters related to forest exploitation in regions where local authorities lack the body to do so.
In reaction to this, the Exporters Association (ADEX) — whose board includes Inversiones La Oroza — and the National Society of Industries (SNI) claimed that the requirements proposed by Sunat were “technically impossible to follow because it is not feasible to associate a timber export lot to one or more Forestry Transport Permits (GTF)”. The two associations also argued that the project included timber for “secondary processing and therefore there was no obligation to issue Forest Transport Permits”.
However, in a recent study of irregularities in the international timber trade, Camilo Pardo-Herrera, a researcher at the Center on Terrorism, Transnational Crime and Corruption at George Mason University in the United States, found a growing presence of Peruvian timber exports including “secondary processing.” This study was based on official data volunteered by countries to the United Nations and gathered in the UN Comtrade platform. But as Pardo-Herrera was able to confirm with industry experts, there has been no investment in processing machinery in the sector to explain this trend. He concluded that one explanation is that barely dried timber (kiln-dried) or cut into flooring slats is being declared as processed, given that processed timber tends to undergo fewer controls.
This agrees with the analysis of trade data carried out by this journalistic investigation: after 2016, exports of pre-processed wood cargoes for flooring soared, while that of sawn timber had a sharp fall.
Serfor backs down
The reaction of the private sector led Serfor to back down. In a March 2017 technical report, the forestry authority described as “practically null” its ability to determine the specific enabling title (the concession, community or local forest) for the location of the point of extraction. According to the forestry agency, the origin of the products was determined at “primary processing centers,” such as sawmills. Despite Sunat’s initiative supported by the MEF, this Serfor document stalled an initiative that would have made establishing the origin of Peruvian timber more transparent.
From 900 inspection reports verifying the origin of shipments leaving the port of Callao made in 2015, Serfor went to making only 23 in 2016, according to EIA. In 2017, it made none.
When asked if checks and seizures had slacked over the last 3 years, Serfor told this journalistic alliance that export activities had not been restricted by regulations as a result of the pandemic and that, therefore, “Serfor was authorized to continue with such activities, having carried out some controls”.
In any case, it specified, controls of CITES-listed species “are carried out 100% and always at the request of the administered, after obtaining the CITES Permit, granted by Serfor in its capacity as CITES Management Authority”. According to the public entity, between 2018 and 2021, it carried out 35 controls on two species of cedar (Cedrela odorata and Cedrela montana) and one of mahogany (Swietenia macrophylla), a third of which after the onset of the pandemic. During this period, they explained, “no seizures have been made as a result of controls of CITES (timber) forest species”.
Public prosecutor of the Peruvian Ministry of Environment Julio César Guzmán said in an interview with Mongabay Latam, a partner in this news team, that he was aware of a communication sent by Serfor to regional governments in response to a question from one of them, according to which timber transport permits would not include the origin of the enabling title. In other words, they would not include the concession, the native community or the private property in which the resource was extracted, but would mention instead the processing center. Guzmán pointed out that this would undoubtedly have broken the traceability of the timber and its impact on the criminal activities of illegal timber traffickers.
This, nevertheless, is the reiterated argument of business conglomerates: it is impossible to certify the origin from the forest and controls should begin at the processing site.
“Every day they are weaving ways to weaken control systems,” prosecutor Julio César Guzmán said, insisting on the fact that the punitive system cannot work if traceability mechanisms are inefficient. “When you destroy the traceability model, there is no way to criminally prosecute anyone.”
The last known communication aimed at honoring Peru’s commitments to the United States related to preventing the export of illegally-sourced timber is from 2018, when the Ministry of Economy and Finance (MEF) informed Serfor that the inclusion of forestry transport permits and their respective enabling titles in the customs declaration were essential for control and risk management in foreign trade operations. However, this warning was ignored and to this date exporters are not required to document the origin of the forest products they extract from the Amazon.
Concurrently with the discussions on reforms aimed at knowing the origin of the wood, Serfor presented the National Forestry and Wildlife Information System (SNIFFS), a platform created to access “reliable information for the verification of legal origin.” This can provide data in real time to “track the traceability of the products, through the unique code of each species”.
Using the transparency law, OjoPúblico consulted how much progress had been made in the implementation of the SNIFFS digital platform. It also wanted to know details regarding the registration and inspection of forest transport permits, which contain information on the origin of the merchandise in the forest. Last February, Serfor answered that the project was in “the process of being produced and implemented” and did not provide further information. The forestry authority said that it will present the progress made on the platform through a virtual press conference.
One of the biggest obstacles to curbing uncontrolled logging in the Amazon, which degrades the forest and its capacity to act as a carbon sink, is the lack of coordination between the various state agencies.
“National agencies sometimes don’t cooperate with each other,” says Salvador Ortega, criminal intelligence officer for Interpol’s Environmental Security Program, which coordinates global action against environmental crime. Interpol’s role in the fight against illegal logging is primarily one of logistical support and strengthening the capacities of national police departments through technology, data mining and analysis that will lead them to track down wrongdoers in the timber industry.
Monitoring logging: costly and difficult
Beyond the pandemic and the long periods of restricted mobility, another complicating factor has been the costs of verifying if loggers are complying with their obligations and if the wood they extract or declare at the sawmill in fact matches the one they take from plots with authorized cutting plans. This is due to the remoteness of the plots and the difficult access.
“Let’s not forget that in the Peruvian Amazon timber is illegally taken down late at night,” explains environmental prosecutor Alberto Caraza of Loreto. “So, in quite remote places in our Amazon, where there is little presence of authorities, we must implement adequate controls. That is why I think it is important that there are suitable, trustworthy, responsible people who are not committing acts of corruption.”
Ortega, from Interpol, agrees: it is very costly to monitor timber producers. All the more so when the resources of official or police entities are often lower than those of the producers. “Timber trade is not something that can be done by anyone, be it legal or illegal,” he says. “Some of these companies have enough economic power to be in a better (financial) position than the police. Those who want to run the business illegally have better lawyers and more opportunities to cover up their illegal activities. This is why it is so difficult to take on illegal logging”.
According to several sources, sawmills are where timber fortunes are being made, and trees cut disregarding sustainability plans are often hidden in them.
“Why aren’t sawmills supervised? Why are they getting the best deal?” asks a person with extensive experience in the forestry sector who prefers to keep his name confidential. “Because, for every 100 cubic meters of timber in logs that reaches the industry, authorities allow them to dispatch 80 cubic meters of transformed wood. However, according to studies I and others have done, the average for slats and logs is between 40 and 45% at best. So what are they doing? They are supplementing their yields with illegal timber, timber that has no documents.”
According to this specialist, Serfor has not updated harvesting rates by species, sector and product, as required by the Forestry Law passed in 2015. And the 80% yield standard that stands today is based only on a memorandum.
Nor have they been able to implement their books properly: they are still trying to make them digital and available online. Initially, there was great resistance to this change. However, little by little the project is progressing, as reported by prosecutor Guzmán. This change, he explained, would have long since prevented sawmills working outside the law from altering the books or claiming that they were lost when there are inspection visits.
Part of the problem with ensuring that sawmills do not benefit from illegal timber is that they are monitored by regional governments and there is ample opportunity to bribe the officials tasked with monitoring them.
“What commonly happens in sawmills?” asks Guzmán. “Wood enters from places that are far away and that have not been supervised by Osinfor.” He explains that timber can be processed without supervision in the field, as there is no regulation that prohibits it, and this is because Osinfor only supervises a percentage of enabling titles.
Supervising the activities of sawmills is the task of regional governments, but they are not doing a good job. As prosecutors have found, the amount of money involved makes corruption all too easy.
Guzmán also explained that there are plans to fix “the missing link” in the timber traceability system, which is the processing plants, by putting them under the purview of Osinfor. This would improve the level of control. However, today, with the pandemic, controls and inspections from all entities involved have diminished.
“Bear in mind that last year Osinfor reduced its supervision of enabling titles considerably, because of the pandemic,” said Guzmán. “They are supervising them through satellite imaging, and personally I think this is not entirely effective because a lot of illegally-extracted timber comes from areas outside those enabling titles and borrow transport permits from those titles to give the appearance of legality, allowing the timber to enter the market without the possibility of checking it against the enabling title.”
The setback in surveillance and control is not only due to the pandemic. Officials who tried to make progress in improving traceability have been dismissed without completing their terms on the job. Today, almost a year after leaving, Luis Alberto González-Zuñiga, former director of Serfor, maintains that “in the case of Serfor, there has been a succession of incompetent people in my replacement, not only incompetent but people who know practically nothing about the sector and who I believe have once again shown how little importance the forestry sector has in the country’s public policies”.
González-Zuñiga also points out that he is increasingly convinced that he and his team were removed for political reasons, victims of an “alliance with certain clearly corrupt regional governments, so that the fight against these corrupt practices does not continue”. For the former director of Serfor, “there is no political will and there are interests that oppose this”.
Data collected by platform Proética reveals the close ties between the surveilled and the infringers. For example, forestry official Marcial Pezo Armas, author of 59 forest management plans (FMP) with false information, is now manager of the Ucayali forestry authority. Similarly, as forestry manager of Loreto, Kenjy Terán approved nine FMPs with non-existent trees in remote areas that house the last mahogany and cedar trees, listed in CITES as endangered species.
Former executive president of Osinfor Rolando Navarro, who had a key role in the operation that stopped the constant flow of tons of illegally-sourced timber from the forest to ports in Mexico and the United States on the ships of Naviera Maynas, owner of the Yacu Kallpa, maintains that officials close to logging interests are now in control of Osinfor.
“Looking at it from the outside, to me what happened with Osinfor was an assault plan,” he said. They are doing “the Trojan Horse strategy, right? Getting their own people from the sector inside.” He explained that in the top management of Osinfor there are officials who, for example, “have wanted to discredit the results of Operation Amazonas 2015 and of that last shipment of the Yacu Kallpa”.
Despite a weakening forestry sector, neither of the two second-round candidates in the Peruvian presidential election of June 6, Pedro Castillo and Keiko Fujimori, have made any proposals regarding the timber sector. They have not even considered it in their government plans.
Despite ongoing investigations in the United States and Peru and a history of forestry law violations including getting caught with tons of timber that did not come from sustainable plans on the Yacu Kallpa, Inversiones La Oroza has been rewarded by local authorities.
As documented by OjoPúblico and Mongabay Latam, five new forestry concessions have been approved for this company. Between 2016 and 2019, the government of Loreto awarded it another 177,285 hectares in the districts of Mazán, Las Amazonas and Indiana, in the province of Maynas, Loreto, that it will be able to exploit over the next 40 years.
These concessions are in addition to the 17,014 hectares that it has held since 2004 and that had been granted by the former Technical Forestry and Wildlife Administration (ATFF) of Loreto. But it was precisely for the way Inversiones La Oroza managed this concession in Indiana (Las Amazonas) that it was sanctioned multiple times.
Two of these concessions, which were granted by the government of Loreto in Maynas in 2019, are located south of the one already in its control. According to what prosecutor Caraza told Mongabay, regional authorities did not follow the proper legal procedure in granting these concessions and, for this reason, the environmental prosecutor’s office opened an investigation.
In an interview with this investigative team, the owner of Inversiones La Oroza explained that he could not continue working in the original concession in Indiana not because of sanctions, which he did not mention, but because it was very deep in the forest and drug traffickers had taken over the region. That is why he asked for new concessions closer to Iquitos, where he would have more security.
“In the more remote areas it is no longer possible to work, closer to the border it is no longer possible to work,” says Ascencio. “Because we have activity in parts closer to Iquitos, we can keep them in force because it has not yet arrived, but there are indications that they are also entering through here. We have returned several concessions due to insecurity.”
The regional manager of Forestry and Wildlife Development, Kenjy Teran Piña, the same who approved nine forest management plans with false information, told OjoPúblico at the end of last year that the company met all the financial and technical requirements to be granted the concession and could only have been denied it if they had a firm judicial sentence against them. Teran Piña is being investigated by FEMA in Loreto as a suspect of illegal timber trafficking and illegal granting of rights.
That same regional forestry management of Loreto enlisted 169 forestry concessions in November 2020, including two of La Oroza, in an economic reactivation project to counteract the effects of the pandemic. Last year, the company also accessed a loan of 1.3 million soles (about US$390,000) as part of Reactiva Perú, a government program created for banks to channel credit to companies and ensure that they can pay their suppliers and workers.
Between 2001 and 2020, Loreto lost 440 hectares of primary rainforest, according to the most recent analysis by Global Forest Watch. Of course it is not only illegal logging destroying the forest. There are other causes, such as clearing forest to plant coca crops or setting up cocaine labs, which have also put native communities at risk, as Mongabay told Tierra de Resistentes. Moreover, as Colombian ecologist Ángela Parrado Rosselli said in an interview with reporters from this team and as corroborated by other studies, even legal and orderly logging degrades the forest in the long term and affects its capacity to clean the atmosphere. Especially when the logging does not allow for regeneration because it doesn’t follow extraction plans that contemplate it.
Ascencio remains convinced that the big deforesters are drug traffickers. He, on the other hand, is only strengthening the forest’s capacity to sink carbon by removing trees. “Every tree is a human being, it is born, grows, develops and dies, so we have to take advantage of those that are a little mature. Biomass increases, that has been proven, and much more in these soils, where the vetch, for example, which grows rapidly, we can cut it again in 15 years because it grows in 12”.
In the long term, as Julia Urrunaga, director of EIA in Peru, has argued, businessmen who resist making timber traceability more transparent end up hurting not only the forest, but the timber export sector in general. If the process for verifying timber remains opaque and timber cannot be clearly traced from its origin, there will always be doubts as to whether the product leaving the country is contributing to the deterioration of the Amazon, the world’s largest continuous rainforest the conservation of which is the greatest contribution of South American countries to mitigating the climate crisis.
“We fight to give sanctions or penalties to whoever commits these abuses against our land,” Loreto environmental prosecutor Caraza told this news team. “We defend our land, our pacha mama where we live, it is the future of the whole world. Look at what we are experiencing with the pandemic. Look at what we are suffering, a lack of oxygen and illegally cutting down trees makes this oxygen scarcer on the planet.”
Ascencio of Inversiones La Oroza says he is driven by the same sentiment. “I am a forestry engineer, and I like it, I am passionate about this issue and I love this country and this region”.
William Amaringo of Inversiones WCA, the other sanctioned company, assures that it is the government putting them at risk by not doing its job well.
“We verify the concession where the timber is being extracted. We are practically doing the work of the State. Now, what we do is we verify … from the moment of extraction we send a forestry engineer from the company to verify that the wood corresponds to the place from where it is being extracted … I am tired of saying that the problem is in the field, the moment the tree is cut down,” explained Amaringo to reporters from this team.
If the government and companies were able to guarantee that they are extracting timber truly allowing for the regeneration of the most strategic tropical forest for the survival of the planet, the timber sector would benefit from a trade that no country would put under suspicion.
This is valid not only for them but also for Peru. If the sector continues the way it is going, it will not be the last time that the United States closes its market to a logging company, especially under the new Biden administration, which has made the preservation of the Amazon a priority. Nor will this be the only market to close its doors because they can’t prove the origin of the imported timber to be legal.
Also collaborated in this crossborder investigation :
Reporting: Sarena Snider, Ian James Hodgson
Production: Luisa Fernanda López Arias
Audience: José Luis Peñarredonda
Administration: Emiliana García
Data analysis: Rigoberto Carvajal
Webmaster: Diego Arce
Ilustrations: Miguel Méndez
Video edition: Luis Gabriel Morales