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The Network of Institutional Patronage Behind Forest Looting

While the coronavirus pandemic rages on, ravaging Zambia's economy and crippling its citizens' lives, new findings by the Environmental Investigation Agency (EIA) show that illegal exploitation and trade in mukula (Pterocarpus tinctorius) persists unabated, benefitting a small number of well-connected and wealthy individuals. A probing undercover investigation into illegal mukula logging and trade sheds light on the apparent theft of more than 10,000 trees and unveils information connecting the Zambia Agency For Persons With Disabilities (ZAPD), the Ministry of Community and Social Services, the Ministry of Tourism and Arts, and the office of the vice president. Nearly two years after EIA's exposé on the institutional looting of Zambian forests, it appears that the more things have changed with the pandemic, when it comes to mukula, the more they've stayed the same.

Laundering Scheme that Exploited People with Disabilities for Profit

Speaking to independent sources, EIA investigators found that prominent individuals used 28 plots of lands granted to people with disabilities as a means of laundering massive quantities of illegal mukula timber, until June 2021. It all started in 2017, when the Ministry of Lands signed a Memorandum of Understanding (MoU) with ZAPD, to allocate land to people living with disabilities with the alleged purpose of empowering them through farming activities. The same year, and on the basis of the MoU, an individual purporting to be from the office of the vice president met officers from the Ministry of Lands based in Mansa and directed them to issue letters offering plots of land to a list of citizens said to be people living with disabilities. EIA obtained a list of 28 names, all apparently with addresses in Lusaka, and the related plot numbers, located around the Milenge settlement (Luapula Province). It appears that the land applications were done by ZAPD on behalf of the purported beneficiaries, who may not have even been aware of the land offers.

EIA's investigation reveals that once the land title and cutting permit were secured, teams of logging contractors were hired to selectively harvest mukula under the pretext that they were clearing land for agricultural purposes. Over time, the laundering operation further expanded, according to EIA sources, as cutting permits related to the plots allocated to people with disabilities were used again and again to harvest massive amounts of mukula far beyond the plots on the permits. A well-placed source explained to EIA investigators:

"Some people took advantage of that area being more endowed with mukula to arrange for a cutting permit. Within just that same cottage, within that particular area where an inventory was done or an establishment of an assessment made,  but you found that it has been excessively... You know... Utilized. Where they were supposed to get maybe 50 containers, you are talking of people getting as far as 300 or 400 containers, and how they now have to ransack the surrounding areas, with this kind of setting." Click here to listen.

According to this source, a minimum of 250 containers have been illegally harvested from the area around the farms and laundered by using cutting permits linked to the farms. Estimating an average of 140 mukula logs per 40-foot container, a minimum of 35,000 logs have been stolen from the forests, equivalent to more than 10,000 trees felled illegally. These trees came, according to EIA's source, from the looting of 50,000 hectares of forest:

"Basically that handicap association was used... You know what they had was a very small portion of land, which was just about 1,000 hectares but they ended up working on an area over 50,000 hectares. That is basically what happened. [...] When they realized they could not actualize what they really wanted, then they just changed some parts of the document to read 'and any surrounding areas' so when that kind of operation was made it was almost the scramble for Africa." Click here to listen.

EIA's findings indicate that the laundering operation profits have in no way benefited the people that ZAPD is supposed to support; ZAPD has reportedly been failing to function and meet the expectations of persons with disabilities. The ZAPD mukula laundering scheme offers a glimpse into the corrupt institutional arrangements facilitating the ongoing mukula trade. According to EIA's investigation, the Ministry of Community Development, with jurisdiction over ZAPD, was instrumental in furnishing land title and documentation that enabled the laundering scheme. Bafflingly, it appears that the Ministry of Tourism and Arts was also involved in the issuance of cutting permits. As a source explained to EIA investigators: "When one ministry becomes too selfish, another ministry will have their own way."

Institutional Patronage of Forest Looting

The institutional backing of the exploitative and corrupt operation goes even deeper, with the involvement of the Zambia National Service (ZNS). In Mansa, EIA undercover investigators found that ZNS was instrumental in the looting of forest areas located around plots granted to people with disabilities. Once felled, mukula logs were quietly stockpiled at the ZNS's Lwamfumu camp, where the logs were trimmed before being loaded into containers. Part of the logistics are handled by a company well-known for transporting mukula across the country and to the Zambian border with South Africa.

The peculiar institutional arrangements that enabled the ZAPD laundering scheme, coupled with the magnitude of the theft, point toward the involvement of highly-placed, well-connected figures. When asked by EIA investigators who was behind the scheme, a well-placed source explained: "Mukula became a household of the first family in terms of activities."

According to EIA's investigation, one of the Chinese-controlled Zambian companies that exported mukula coming from the ZAPD scheme is Sikale Wood Manufacturers Ltd. ("Sikale Wood"). EIA undercover investigators were told that a high-level individual from the vice president's office is connected to  the company. Sikale Wood also appears to be one of the companies that received special economic incentives, and was promoted by the former vice president Inonge Wina. In December 2020, Mrs. Wina was a key speaker at the opening ceremony of Silkale Wood's new office in Lusaka, urging the company "to continue expanding its investments in Zambia and beyond."

Disturbing Discrepancies

The ZAPD scheme is likely one of many perpetuating the mukula crisis in Zambia. As repeatedly reported, the country itself has not properly benefited from the lucrative rosewood trade. Revenue loss for the national coffers lies at the heart of the problem. Assessing precisely how much the country has failed to collect in taxes and other revenue is challenging. Still, certain numbers point to the magnitude of the problem. Some official sources indicate that 100 percent of the mukula exported by Zambia ends up in China, confirming EIA's 2019 findings reported in "Scheduled Extinction." According to EIA's new analysis, between 2017 and 2020, 83 percent of the timber received by China from Zambia, in value, is unaccounted for. This is a gap of approximately US$214 million, greater than the 2021 allocated national budget for Public Order & Safety. China reports receiving almost 6 times more timber in value than Zambia reports exporting over this period.

This outstanding discrepancy is indicative of extreme opacity of the trade and its confusing legal status. Earlier this year, declarations related to a partial lifting of the national ban on mukula trade were quickly followed by the announcement of a reinforcement of the ban via a Statutory Instrument. While a nationwide ban on cutting and transporting mukula appears to be formally in place, it has been undermined by multiple ad hoc exemptions and loopholes, which appear designed to allow cronies to monopolize and profit from the trade. A well-placed source told EIA investigators in 2021 that mukula trade is in the hands of "a small cartel."

The Zambia Forestry and Forest Industries Corporation (ZAFFICO) stockpile exemption announced a few years ago by ZAFFICO's representative was in effect covering up the transport and export of freshly cut logs, as shown in our previous investigation. More recently (March 2021), a "selective" exemption has reportedly been granted in order to export "mukula logs that have been lying idle in the bush." But in practice, as mukula traders repeatedly explained to EIA investigators during the second and third quarter of 2021, everything happens as if the exploitation and the trade of mukula were open and the ban were lifted. They all said that only freshly cut logs are traded. A mukula producer explained, "Basically there are no old stocks, that is the point." and he also detailed:

"We have had the window... Of course they have kept talking about mukula that was harvested in 2017 and things like that, but it has not been the case. Because how would you keep on collecting mukula that was harvested in 2017 from 2017 to date. [...] They will not openly allow you to go and cut but they will give you a provision where the only option you have to provide them with that commodity, or with mukula, is by cutting. If you get my point. That is the situation that we have."

Instead of old stock, it appears that ZAFFICO is facilitating the trade in freshly cut mukula trees and is in fact arranging all the needed documents for cutting (production license), transporting (conveyor license), and exporting (export permit) mukula out of Zambia. According to EIA's investigation, false auctions of mukula are organized between ZAFFICO and a well-connected Chinese entrepreneur who funds the auction and ends up buying the timber that is then exported under the auspices of ZAFFICO. A well-placed source explained to EIA's investigators:

"If you follow the [mukula] trade in Zambia, individual Chinese companies have gotten export permits... Now, the ones that are responsible for facilitation of these exports permits, it is ZAFFICO. Just some very... Well...  To some extent I must confess, it is just a small cartel.[...]One of the matters is that people in higher offices have had personal interest instead of national interest, and in the process they make certain kind of activities that appear to be formal when they are not formal. That is how ZAFFICO comes in. Actually, that is how by and large, as we described at some point, as just a conduit of crime and I think that before long it will have been brought to a close, brought to an end." Click here to listen.

New President Brings New Promise

Today Zambia is suffering from its mukula trade, instead of benefiting from it. The election of a new President, Mr. Hakainde Hichilema, who is expected to combat corruption and who recently raised the problem of the systemic corruption surrounding the mukula trade represents a unique opportunity to put an end to the current "Mukulagate" and to change the future of the Zambian forests and the people who depend on them. In fact, since November 26, 2019, the international trade in mukula falls under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which gives the new president unique leverage points and collaboration avenues with China to solve the mukula crisis.

In this context EIA recommends:

  1. Immediate temporary suspension of the international trade in mukula, by establishing a zero export quota under CITES, while the contours for a legal and sustainable trade are established.
  2. Engage the country in a fully traceable and transparent timber trade that will benefit the people of Zambia and not just a small number of elite operators and facilitators.
  3. Investigate and punish the cartels that have been benefitting from the illegal and unsustainable trade in mukula.

EIA stands ready to support efforts to address illegal logging and its damaging impact on Zambia's people,wildlife, and forests.

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