Illegal timber in Peru is sourced and sold across the country. But most of the money laundering happens in between these destinations. Our team traveled to Pucallpa, the hub of this illicit activity.
Lashed together in great long rafts or piled high on river barges, logs float in from the wildest reaches of the Amazon to converge on one part of eastern Peru: Pucallpa, the city where the destruction of the rainforest becomes legal.
Hacked out of the jungle on the banks of the Ucayali river and linked to Lima by highway, Pucallpa connects the wilderness of central and northern Peru to its biggest domestic timber market and its principal international port. This makes it a key transit hub for an industry that moves around 2.6 million cubic meters of wood every year. Anywhere between 40 to 80 percent of this wood is illegal, according to estimates by government bodies and independent experts.
The center of activity is Pucallpa's port district of Manantay, where winches await to pluck the logs out of the river and pile them high on the muddy banks. The air is permeated by the smell of sawdust and the whine of timber saws from illegal mills where loggers or buyers take their black market wood and receive their first cut. On the outskirts, informal loggers from jungle communities unload timber cut in forest camps directly onto the river banks, where waiting stevedores load it onto rickety trucks.
*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).
Once the loads reach Manatay, the timber traffickers step in. Their role is to launder the dirty wood with fraudulent paperwork then dispatch it to clients who demand cheap wood and plausible deniability. Their work contaminates almost the entire timber supply chain coming from Pucallpa.
“In Pucallpa, everyone handles illegal wood, absolutely everyone,” Julio Reátegui, a prosecutor from the Pucallpa organized crime unit, told InSight Crime on a recent visit. “And the bigger they are, the more they are protected, this is the reality.”
Black Market Loggers
The lower rungs of the timber trafficking trade are populated by dispatchers, who oversee the comings and goings at the port. They use their position to match local sellers with buyers, working their deals from little wooden shacks dotting the riverbanks. A notch above are individual timber traders known as “comisionistas,” who act as agents for clients in Lima. The comisionistas take orders and cash advances, then find, buy and dispatch timber shipments in return for a percentage cut of every deal.
However, timber traffickers move the real volume and make the real money in Pucallpa, hiding behind the facades of legal companies.
Many of these are ghost companies. Their legal representatives are the poor and unemployed, while their registered addresses are rundown houses or neighborhood shops. They flicker into existence, move large quantities of wood, then disappear within one or two years.
“Most businesses in Pucallpa are front companies for criminals. On paper, they are legal, but it’s a façade,” said Reátegui.
However, some of the biggest traffickers operate differently, blending the legal and the illegal.
Among the most significant of these operations are the sawmills. There are 25 major sawmills located around the Manantay port district. In an anti-logging operation in 2015, authorities identified 12 of these as highly likely to be involved in criminal activity.
“They launder a lot in the sawmills,” 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. “They come by river, arriving with the illegal wood, unload, and then from that point on it just needs a transport permit.”
While the primary role of timber traffickers is as intermediaries between illegal loggers and buyers, many also take on a more direct role in extraction by financing logging operations. In this system, known in the Peruvian Amazon as “habilitación,” the traffickers recruit loggers, then hand them cash advances, equipment and orders to cut down certain species.
According to Rolando Navarro, the former president of OSINFOR, traffickers such as those running the sawmills may do this independently or as agents for the biggest players in the Peruvian timber trade -- export companies that sell laundered Peruvian wood abroad.
“The exporter tells these guys, I need so many cubic meters of wood, can you deliver? Take your money. And [the traffickers] go around distributing this money to everyone, they are financers.” he said. “Their guys cut down the wood wherever they find it. They come to Pucallpa, they process it and then the sawmills hand over the processed timber to the exporter.”
Laundering Illegal Wood
The middlemen of Peru’s timber trafficking trade are not the only actors laundering illegal wood. However, the role they play has grown in importance as regulation of the timber trade has evolved.
“The law changed and the rules of the game changed for the mafias,” said one forestry agent, who did not want to be identified for fear of repercussions.
Many of the biggest players in the illegal wood trade are logging companies and timber conglomerates that launder illegal wood through their own legal forest concessions. These companies once operated with virtual impunity. But life has become more complicated thanks to a new forestry law that came into force in 2015, increased international pressure, and the efforts of OSINFOR.
But OSINFOR’s jurisdiction only covers inspections carried out in sections of forest legally allocated for logging, so their agents can only walk past illegal operations on their way to inspect legal companies.
“Many times, a businessman is working and he sees illegal [loggers] working at his side. But illegal workers don't worry about anything while the businessman has all the institutions coming to supervise him,” said forestry consultant Guiomar Seijas.
If illegal loggers can get their shipments through the ill-equipped, undermanned and rampantly corrupt riverside checkpoints to arrive in Pucallpa, then the traffickers and their document dealers can handle the rest.
“There is this big vacuum here,” said Seijas.
This lopsided law enforcement is a source of frustration for both the logging companies, who feel victimized and for OSINFOR, who feel their hands are tied. However, for the mafia in the middle of the illegal timber trade, this vacuum is leaving an ever-bigger and more lucrative space to operate.
*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).
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