HomeNewsAnalysisTimber Laundering in Peru: The Mafia Within
ANALYSIS

Timber Laundering in Peru: The Mafia Within

ENVIRONMENTAL CRIME / 10 MAY 2019 BY JAMES BARGENT EN

The mafia that makes trafficking of illegally-sourced wood possible in Peru is not made up of timber trade outlaws. It is a network of corrupt officials.

In Pucallpa, the hub of the illegal timber trade in Peru, dirty wood is laundered by an array of timber traffickers, who range from individuals armed only with connections and an eye for a deal, to major businesses owned by powerful timber barons. None of them, though, could operate without the regional government body charged with protecting the region’s forests: the Forestry and Wildlife Management Directorate (Dirección de Gestion Forestal y de Fauna Silvestre – DIGEFFS).

These regional forestry directorates are the gatekeepers to an industry worth hundreds of millions of dollars. But they work not to protect the forests and regulate the trade, but instead to profit from the ransacking of the Amazon.

*This article is the result of research on eco-trafficking in the region done in conjunction with American University’s Center for Latin American and Latino Studies (CLALS). 

 “The wood arrives here and it is lost completely,” said a Pucallpa forestry agent, who did not want to be identified for fear of professional repercussions. The reason is simple. “This is where the worst of it all starts -- the high-level corruption.”

Permits to Steal

Regional forestry directorates such as the DIGEFFS were born of a move in 2009 to decentralize oversight of the forestry sector in Peru’s main logging regions, bringing it under the control of regional governments. This devolution of power granted the newly created directorates control of the most important resource of all for the illegal timber trade: the transport permit, known as the “Guia de Transporte Forestal,” or “GTF.” GTFs show wood is from a legal, authorized source and can be moved and sold.

“With these permissions the wood is already laundered,” said Albino Aliaga Campos from the Pucallpa office of the Agency for the Supervision of Forest Resources (Organismo de Supervisión de los Recursos Forestales – OSINFOR), the state body charged with inspecting the logging sector. “When it is being transported you can’t tell if the timber is legal.”

InSight Crime obtained documentary evidence illustrating one of the most common ways GTFs make it into the hands of timber traffickers -- they are cloned by corrupt officials. In the first document there is a GTF filled out for legal timber harvested from an authorized concession. In the next, is the exact same GTF but filled out with presumably illegal timber listing a local sawmill as owners of the wood.

However, the reproduction of documents to launder illegal wood is just one service offered by the forestry directorate corruption networks.

Much of it starts with inspections and verifications. Officials man road and riverside checkpoints all along the timber transit routes and carry out onsite inspections at sawmills and other facilities. These officials turn a blind eye to illegal timber as it passes through; they also forge traceable supply chains by fraudulently verifying the passage of timber from concessions through checkpoints and to sawmills that never see the wood itself.

“They are not control points, but [money] collection points,” Pucallpa forestry agent Antonio Chambergo told InSight Crime.

The directorates’ stamps of approval are also needed for another key laundering process: fraudulent operating plans that secure logging companies permission to harvest fictitious trees. These plans are compiled by forestry agents known as regents, then approved by forestry officials. Once they are approved, then the companies can fill the fraudulent quotas with illegally logged wood.

Between 2009 and late 2018, OSINFOR filed reports of nearly 2,500 suspect plans approved by forestry directorates across Peru, granting permission for the harvest of 114,000 non-existent trees. Those responsible for the concessions are sporadically sanctioned for these violations, but the forestry officials and regents almost never face repercussions, much to the consternation of OSINFOR.

“If it is fraudulent, then there is a chain of responsibility there,” said Aliaga.

The directorates’ services do not end with facilitating the trafficking of timber, they also provide protection. Forestry regents describe officials taking payments to falsify reports and paperwork in order to secure the release of seized shipments, while prosecutors complain about how directorate officials sabotage and undermine their investigations.

For those that work in the directorate, the opportunities are endless, and the work is lucrative.

“You see officials with wage of 2,500 ($750) soles a month walking around with a new motorbike, car, wife and two mistresses – where did this money come from?” said Chambergo.

'Supply Chain Was Created to be Corrupted'

Control of the machinery of the forestry directorates means control of a criminal economy, and regional governors decide who heads the directorates.

“The directorate is completely corrupted, from the doorman right up to the director,” said Julio Reátegui, a prosecutor from the Pucallpa organized crime unit. “This network of corruption starts with the governor -- that is undoubtable. The governor names the head of the directorate, so it is impossible that he ignores what his director is doing.”

Industry insiders and state investigators claim governors grant campaign donors forestry directorate jobs to fill with their own people for a certain period of time. Controlling these jobs is not just about power, it is also about money and a cut of the bribes that flow through each position.

“Those that invest in power do it to profit from it,” said a state anti-corruption investigator, speaking on condition of anonymity. “[The timber barons] put their trusted people in place to take advantage.”

Through the money funnelled through these positions they can expect to easily double their investments, she added.

The first administration to take control of the forestry sector following decentralization in Ucayali, the department of which Pucallpa is the capital, was governor Jorge Velásquez and his vice governor, the timber baron Carlos Henderson. During their time in office, Henderson’s logging company had its license suspended for using its concession to launder illegal wood, a decision controversially overturned after the vice governor filed a lawsuit. Velásquez, meanwhile, would later be sentenced to five years in prison on corruption charges.

The forestry directorate under Velásquez and Henderson was accused by the Ucayali Auditing Commission of forging signatures on timber harvest permits to facilitate illegal logging and labelled a mafia by a prosecutor from the environmental unit, who claimed he was removed from his role because he launched corruption investigations involving high-ranking officials. “They are the owners of the timber trade,” the prosecutor said in a 2014 television interview.

The administration’s first forestry director was Miguel Ronald Dávila Henderson. OSINFOR inspections show that in his two years in the role he personally signed off on 106 plans approving permission to harvest 6,044 fictitious trees. He was later charged with corruption and embezzlement, named in a land trafficking and illegal logging case, and barred from holding public office. Dávila Henderson was succeeded by Marcial Pezo Armas, who personally signed off on 102 plans for 7,798 fictitious trees. Although he has never been charged with any crime, Pezo Armas has been denounced to prosecutors multiple times, including for corruption, timber trafficking, forestry crime and abuse of authority.

In the most recent elections, in late 2018, the toxic influence of the timber trade was again evident. The elections became a runoff between two timber barons, Edwin Vásquez and Francisco Pezo.

Vásquez is the owner of Pucallpa’s largest sawmill, Aserradero Vásquez, which authorities identified as at high risk of criminal activity in a 2015 investigation. He was governor of Ucayali from 2003 to 2006. While in office, he was accused before congress of financing illegal logging and processing protected species in his sawmill. After he left office, he was charged with corruption. He is a political ally of Pucallpa timber baron and alleged drug trafficker Luis Valdez Villacorta, and together the pair have faced accusations of plotting to murder journalists investigating their activities.

Before the campaign, local media reported Vásquez had survived an attempt on his life, which he blamed on his political enemies, and soon after he saw his sawmill raided by the tax and customs authorities.

Pezo, meanwhile, has previously been the registered owner of sawmills and timber traders, and during the campaign it was revealed he owed the tax authorities over $250,000.

In the October vote, Pezo won comfortably. But his administration’s plans for the timber sector immediately fell under suspicion. First, there were social media postings, including by a group claiming to be DIREGFFS workers, denouncing how officials were strong-armed into making political contributions in order to secure jobs. Then, Pezo brought back one of the Velásquez administration’s directorate chiefs, Marcial Pezo Armas, not related to the governor, as his forestry director.

Pezo Armas denies any wrongdoing both related to corruption from his previous time in office and in campaign contributions.

“Officials are always, for various reasons, subject to accusations. Those of us who accept these positions know it before taking on these challenges,” he said.

“[These accusations] have not led to a single sentence that has found me guilty,” he added.

Governor Pezo did not respond to questions about corruption and the timber trade.

A consultant to the national forestry chamber of commerce, who spoke on condition of anonymity, blamed the system.

"This supply chain," the consultant said, "was made to be corrupted."

Top Image: AP photo

*This article is the result of research on eco-trafficking in the region done in conjunction with American University’s Center for Latin American and Latino Studies (CLALS). 

Center For Latin American & Latino Studies

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