European Commission gives boost to Vietnamese timber launderers

Files obtained by New Internationalist show that the European Commission knowingly legitimized a Vietnamese government agency that facilitated the theft of roughly half a billion dollars of endangered species. Jack Davies reports.

Illegal logging in the Cardamom Mountains, Koh Kong Province, Cambodia. Paul Mason USAID/Cambodia/OGD/Public Domain

A Vietnamese government agency that facilitated the theft of roughly half a billion dollars of endangered species was legitimized by a treaty signed by the European Commission last October. Files obtained by New Internationalist show the Commission decided to proceed with the treaty despite having been given evidence of the agency's actions at least two years earlier.

The agency in question is Vietnam’s management authority for the UN Convention on the International Trade in Endangered Species (CITES). The job of every CITES management authority is to ensure the movement of any endangered species across their country’s borders is in accordance with CITES regulations – which in general means that they were legally and sustainably sourced.

This is ensured through a two-step process. Anyone wishing to move an endangered species across international borders must first seek approval from the local CITES management authority. The management authority will then perform an assessment of whether the export is convention compliant before issuing an export permit. The trader next presents the export permit to the management authority of the receiving country, who will make their own assessment of convention compliance, as well as emailing a copy of the export permit to the issuing management authority to verify its authenticity before themselves issuing an import permit.

Between 2013 and 2015, the Vietnamese management authority issued import permits for 8,533 cubic metres of Siamese rosewood – with an estimated market value of between $425-850 million – from neighbouring Cambodia that it indisputably had no legitimate cause to authorize. Not only is the dark hardwood all but extinct in Cambodia, its export was banned by a Cambodian government decree in 2013.

Markus Hardtke, a German lawyer and long-time environmental activist in Cambodia, described the Vietnamese management authority’s actions as the legalization of theft.

‘If I smuggled 500 luxury cars from Germany to Ukraine and in Ukraine the border guards legalized them… there would be outrage,’ Hardtke said. ‘We’re talking about a multi-billion dollar cross-border trade. It doesn’t matter if it’s trees, cars, diamonds or oil, this is an international crime, not a technical forestry issue.’

The European Commission, however, does not appear to share Hardtke’s outrage.

In 2010, the Commission began negotiations with the Vietnamese government for a forestry treaty known as a voluntary partnership agreement (VPA). VPAs are designed to bring non-EU countries’ forestry and timber regulations and practices in line with Brussels’ policy, known as the Forest Law Enforcement, Governance and Trade (FLEGT) action plan.

The incentive for countries to complete this process is that, once compliant, it becomes much easier for EU companies to import their timber products. Any company wishing to bring timber products into the EU from countries that do not have a VPA must first conduct due diligence to ensure the legality and sustainability of its sourcing. Once a country achieves compliance, that due diligence is then entrusted to a ‘FLEGT licensing authority’ designated in the text of the VPA.

The licensing authority designated in the VPA signed between the European Commission and Vietnam was the latter’s CITES management authority, the same one that rubber-stamped the import of half a billion dollars’ worth of endangered and illegally traded timber.

The Vietnamese management authority insists it only issued the import permits because it had been presented with export permits issued by its Cambodian counterparts – which it then sent for verification to a Gmail address used by the Cambodian management authority.

PDFs purporting to be copies of those emails were shared with me by the Vietnamese management authority in 2016. The Cambodian management authority in turn denied their authenticity, describing them as the product of either forgery or hacking by ‘Vietnamese illegal persons’, or even employees of the Vietnamese management authority itself.

The Vietnamese have strenuously denied any such dirty tricks. However, regardless of whether they truly believed the emails allegedly originating from their Cambodian counterparts’ Gmail account were genuine, the Vietnamese half of the correspondence suggests a severe lack of diligence on their part.

The Vietnamese management authority was one of several that proposed Siamese rosewood for listing as an endangered species under CITES in March 2013. In the listing proposal that their office co-authored, it is noted that Cambodia outlawed the harvesting of Siamese rosewood in 2002 and that ‘all the trade timbers [of Siamese rosewood] are from illegal logging of wild populations’.

Yet those concerns are not evident in the emails they shared in 2016.

In one example, in September 2014 (almost one year after Cambodia had publicly announced a total moratorium on the export of Siamese rosewood) they received export permits for 550 cubic metres (market value at the time $27-55 million) of the endangered hardwood marked as being harvested from the wild. In their alleged follow-up communications with the Cambodian management authority they did not question how the export of the timber could be either legal under Cambodian national legislation or convention compliant in terms of sustainable sourcing.

This pattern repeated itself across multiple pairs of emails and permits shared by both the Cambodian and Vietnamese management authorities.

In one particularly egregious example, the veracity of which is not disputed by either authority, in December 2014 the Vietnamese accepted a CITES export permit bearing the signature of the former head of the Cambodian management authority, who had retired 14 months earlier. In an email flagging the issue to the Vietnamese, a representative of the Cambodian authority encourages them to “check the person’s name and contact email on the CITES Dicrectory’s [sic] website” when verifying export permits going forward.

In an emailed remark, Vietnamese management authority representative Phan Nguyet told me it wasn’t until three months later, in March 2015, that his office stopped accepting permits bearing the signature of the departed management authority head.

Whether the Vietnamese management authority was merely grossly negligent or criminally complicit in its decision to issue the import permits is impossible to know. In 2016, Interpol volunteered to assist investigations into the matter in both Cambodia and Vietnam. However, such an investigation would require an invitation from the local authorities, something a spokesperson for Interpol said in an email last month has not been forthcoming.

Regardless, the Vietnamese management authority has a documented history of legitimizing illegal timber. This begs the question as to why the European Commission has signed a treaty giving them an even greater remit. Files obtained by New Internationalist through an Access to Documents request show the Commission cannot plead ignorance of their new partner’s chequered past.

In October 2016, shortly after the permits scandal broke, the head of the Commission’s Directorate General for Environment, Astrid Schomaker, sent an email to Ambassador Vuong Thua Phong, head of Vietnam’s permanent mission to the EU. Attached to the email was a letter from British NGO the Environmental Investigation Agency (EIA).

The letter was not released in response to New Internationalist’s Access to Documents request. However, a spokesperson for EIA confirmed that the letter raised concerns about the designation of the CITES management authority as the FLEGT licensor, given that it had been documented repeatedly accepting fraudulent CITES export permits for Siamese rosewood from Cambodia.

The following month, European Commissioner for Environment Karmenu Vella made an official visit to Vietnam. Included in his briefing pack for the trip was a set of ‘defensive points’ laid out in question-and-answer format.

One such question asked, since the CITES management authority had ‘failed to do its job properly’ how it was the Commission could ‘expect it to live up to its tasks as FLEGT licensing authority?’

‘We are aware of the concerns expressed by some NGOs and we take them seriously,’ the response acknowledged, before going on to point out that the CITES management authority will have to pass an independent evaluation before it is able to issue FLEGT licenses.

In emailed remarks to New Internationalist, a European Commission spokesperson said that while ‘the Commission is aware of the concerns in relation to the Vietnamese CITES Management Authority’ that the appointment of the FLEGT licensing authority ‘is for the Voluntary Partnership Agreement partner country to choose.’

‘How can the EU in good faith sign away all leverage and leave it to these crooks to come up with some kind of a solution?’

However, he added, ‘The Commission had already raised the importance of reliability of the authority to administer the agreement with Vietnam and will continue to address it throughout the Voluntary Partnership Agreement process.’

He went on to stress that before the CITES management authority could start work as the licensing authority for timber exports to the EU, it would first have to satisfy a raft of regulatory and decisions and pass an evaluation.

Not everyone with first-hand experience of the reality of the illegal timber trade in southeast Asia are optimistic about the ability of the VPA to bring Vietnam’s official timber launderers into line.

Hardtke, the German lawyer, is particularly sceptical: ‘It’s like somebody is robbing a bank all the time and you sign an agreement with him where he says “I will try to only rob the bank once every three months.”’

EIA, the British environmental NGO, is slightly less pessimistic. In emailed remarks, a spokesperson for the organization framed the VPA process as a least-bad option. ‘EIA knows of no other political or commercial mechanism that provided the incentives for Vietnam to make these critical reforms,’ they wrote.

However, it remains cautious with regards to the promotion of the CITES management authority to FLEGT licensor.

‘EIA expects to see measures and mechanism put in place by both the EC and Vietnam to ensure the CITES [management authority] of Vietnam can be trusted and relied upon,’ they wrote. ‘This should include a transparent probe into failings by the Vietnam [management authority] for Siamese rosewood… and the imposition of corrective measures in lieu of its findings.’

For its part, the Vietnamese management authority seems to have no appetite for such a probe. It declined to comment for this article, but instead forwarded a letter it had sent in response to a briefing by the EIA last September. The letter chastised the report as ‘one-sided’ and claimed to ‘strictly comply’ with CITES regulations.

The European Parliament is expected to vote on ratifying the VPA in this month. Hardtke is urging MEPs to vote it down: ‘How can the EU in good faith sign away all leverage and leave it to these crooks to come up with some kind of a solution?’ he asked. ‘It’s an embarrassment to every EU citizen.’