Commodities and Supply Chains

Global economy, local impact

The massive market for wood products and agricultural commodities impacts forest areas through complex, globalized trade systems. Trees from the Amazon, the Congo Basin, and the Russian Far East transform into flooring, furniture, and plywood in markets half a world away, faster than ever before. Connecting end products, and their buyers, to the practices on the ground in forested countries provides an opening to incentivize good forest governance by shifting legal and market incentives at the demand side of supply chains.

Supply chains are the stages, including harvest, processing, and sale, through which raw materials like logs and oil palm fruit are modified into final products, such as cardboard boxes and snack foods. Wood products supply chains begin deep in the world’s forests, 15.5% of which are owned by or legally designated for indigenous peoples and local communities, only a fraction of the area claimed under customary rights.

At the end of the supply chain, the wood products sector accounts for US $255 billion in exports annually (FAO), and palm oil and its kernels account for almost US $35 billion in exports each year (UN COMTRADE). The increasing global demand for these products puts pressure on the forests of the world and the land they occupy, and challenges the ability of local communities, and even national governments, to manage resources according to sustainable practices and the rule of law.

Exposing bad actors who drive damaging, illegal trade

EIA’s investigative reports provide information about complex corporate structures and supply chains with the aim of empowering consumer markets and financial institutions to take responsibility for avoiding purchasing or financing trade in products which violate laws and local rights in their country of origin.

In forested countries, illegal logging robs governments of revenues that should be directed towards development of sustainable economic activity, or invested into social programs. Highly profitable illegal timber trade also facilitates a cycle of corruption and legal impunity, which is acknowledged as a major barrier to sustainable development and deprives local communities of their livelihoods. In reducing illegal logging and associated trade, EIA’s work contributes to poverty reduction. Preventing high-risk, black market wood products from undercutting fairly and legally produced timber not only supports timber producing communities, but also ensures that revenue from the timber trade can be appropriately accounted for and taxed by the State.

By fighting for transparency in the global timber and oil palm sectors, EIA exposes bad actors who facilitate illegal, damaging trade in wood products and agricultural commodities grown on deforested land. Then, EIA makes specific recommendations for policy and enforcement reforms, from the local to the international level, based on evidence of systematic failures to sustainably govern forest resources.

Climate Contribution

Globally, deforestation and land use change contributes to approximately 13% of global greenhouse gas emissions, with deforestation representing the large majority of emission within that category. Cracking down on the illegal timber trade and illegal conversion of forests for large-scale agribusiness helps to mitigate climate change by reducing CO₂ emissions from land use change. The effort to address the trade in illegally produced and traded wood fiber and wood products is credited with avoiding a minimum of 1 billion tonnes of CO₂ emissions from the forestry sector by 2010.

Impacts and Results

• In Liquidating the Forests (2013), EIA completed and published the first ever public interest timber supply chain investigation through China, showing how retailers in the United States drove the last temperate old growth forests in Russia to destruction.
• In Deforestation by Definition (2015), EIA first linked finance from the timber and palm oil industries in South East Asia to massive illegal deforestation in Latin America.