Russia’s Far East under the Ax
Posted: October 10, 2013 at 3:53 pm, Last Updated: October 10, 2013 at 4:06 pm
By Aaron Beitman
Russia is home to nearly 25% of the world’s forests, while forested ecosystems constitute about 47% of the country’s territory. Estimates of export revenue from Russian forest products, excluding furniture, exceeded $6 billion dollars in 2011. In light of Russia’s enduring corruption and organized crime problems, it may be unsurprising that the domestic timber industry is highly criminalized. In a recent analytical article, Vitaly Nomokonov, head of the Vladivostok Center for Research on Organized Crime, provides an excellent overview of reasons behind the intensification of criminal activity in Russia’s timber industry, with special attention to the country’s Far East region.
SCOPE OF THE PROBLEM
It has been estimated that no less than one third of Russian harvested wood is exported illegally, most of which goes to China. Nomokonov asserts that 80% of the wood in warehouses in the Far East has been harvested illegally, representing $200 million in export profits. This figure can be compared to the annual budget of the Far East regional government, which is roughly $300 million. In Nomokonov’s view, illegal logging in the Far East is a particularly noteworthy phenomenon, given its large scale industrial nature and exacerbation by high levels of official corruption and a heavy, but latent organized crime presence.
Strong demand for Russian wood from China has significantly contributed to the growth of the illegal timber industry in the Far East. In warehouses storing wood earmarked for Chinese markets, detailed sourcing checks are rarely implemented, stolen wood is often overlooked, and accompanying documents are often falsified. Chinese businesspeople are known to purchase illegal wood from Russian sources with cash, making transactions difficult to monitor. Moreover, Chinese citizens either directly control a number of timber companies and timber exchanges or control them through front companies. According to Nomokonov, Chinese expansion into the Russian market has taken place almost unchecked.
Organized crime, according to the Russian Interior Ministry, wields significant influence over timber, fishing, and gold mining sectors in the Far East. Previously, Nomokonov and his associates conducted research aimed at learning more about criminal markets in the Far East. Survey responses from local officials and experts yielded a strong consensus that the timber sector was the most profitable and, therefore, most attractive for criminals.
Broadly speaking, it is thought that six major criminal societies are operating in the Far East at the moment. Three of these groups have general criminal goals, while the other three are more economic-goal oriented. In total, Nomokonov estimates that about 100 organized crime groups are active in the Russian Far East. When perpetrating illegal logging activities, groups of small, armed criminals use high tech logging equipment, maintaining sentries to guard against unwanted visitors, and make use of the latest high tech communications equipment.
OFFICIAL INVOLVEMENT AND RESPONSE
Russian officials responsible for oversight over the timber industry acknowledge that they lack the power to prevent well-organized and effectively financed criminal groups from engaging in illegal logging. In the rare instance that an individual is arrested for illegal logging, investigators and judges are invariably pressured to “do the right thing.” Moreover, the ability of state officials to address illegal logging is hampered further by a number of legal loopholes.
While some Russian officials chafe with frustration at limited capacity and deficient legal mechanisms for protecting forests, other bureaucrats are likely complicit in illegal logging activities. In May 2010, the head of the Far East regional forestry management agency, Piotr Diuk, was temporarily relieved of his duties, under provisions of the Russian federal law “On combating corruption.” Authorities initiated an investigation into Diuk after the official was recorded on a hidden camera talking openly about illegal logging activities in the region. While the investigation ultimately absolved Diuk of any wrongdoing, many questions remain unanswered.
In response to declining numbers of registered crimes in timber industry, but increasing economic damage caused by illegal logging, officials in the Far East have begun blaming the region’s depleted forestry services. In addition to a call by the regional prosecutor to punish the forestry services, the former Far East regional governor also commented on the situation. According to notes from a 2010 meeting, the then-governor, Sergei Darkin, encouraged speedy investigations into possible failures by forestry officials to exercise their oversight obligations. The governor also suggested that “guilty” parties be brought to justice and potentially fired from their jobs.
Aleksander von Bismarck, a representative of the Ecological Information Agency, an environmental nonprofit, asserts that profits from illegal logging in Russia’s Far East mostly end up in the hands of Chinese businesspeople and organized crime figures. If von Bismarck is correct, then we should expect that the current situation is unlikely to change, especially in light of the feeble state response.
Of course, Russia’s environment takes the biggest hit from illegal logging. As suggested by the World Wildlife Fund, illegal logging in the Russian Far East is threatening the long-term survival of the endangered Amur tiger. One hopes that something will be done about the serious problem of illegal logging in Russia as soon as possible.
*For additional information on environmental crime in Russia, please visit the TraCCC research publications database.
Write to traccc at email@example.com
- Dark Commerce forthcoming November 2018 May 7, 2018
- Dr. Shelley discusses sanctions and beneficial ownership on BBC Newsnight April 11, 2018
- BBC Newsnight on Russian oligarch Oleg Deripaska features Dr. Shelley April 11, 2018
- TraCCC alumna article on Water Scarcity published at Wilson Center April 4, 2018
- Organized Crime and Terrorist Financing (German) April 2, 2018
- Kleptocratic Regimes and National Security: A Pervasive Threat and How It Can be Neutralized April 2, 2018
- Dr. Shelley to speak at Helsinki Commission on March 28th, 2018 March 27, 2018
- House Financial Services “Exploring the Financial Nexus of Terrorism, Drug Trafficking, and Organized Crime” March 21, 2018
- Opioid Epidemic Conference Report March 21, 2018
- World Bank and International Monetary Fund Host Talk on Illicit Financial Flows October 24, 2014