FIRST CLASSCONNECTIONS
Log Smuggling, Illegal Logging,
and Corruption in MozambiqueACKNOWLEDGEMENTS
This document was produced with the financial
assistance of the Department for International
Development (DFID) Forest Governance Markets
and Climate programme.
The contents are the sole responsibility of EIA
and can under no circumstances be regarded asreflecting the position of DFID.
Report design by:www.designsolutions.me.uk
February 2013

CONTENTS
1EXECUTIVE SUMMARY2

INTRODUCTION

4DESTRUCTIVE DISCREPANCIES

7CASE STUDIES IN CRIME

12CONCLUSIONS

13

RECOMMENDATIONS

14REFERENCESFRONT COVER:
Logyard in Beira, Mozambique.
© EIA

EXECUTIVE SUMMARY
Detailing the findings of EIA undercover investigations in Mozambique, and outlining timbertrade data discrepancies, this briefing provides compelling evidence of how China’s insatiable
demand for timber is directly driving increased illegal logging and timber smuggling inMozambique, and robbing the impoverished country of significant revenues.
Trade data discrepancies indicate that in 2012
Chinese companies imported between 189,615 and215,654 cubic metres of timber illegally exported
from Mozambique - constituting up to 48 per centof China’s imports from the country.
Further, EIA research shows that China’s 2012
imports from Mozambique dwarf not only licensed
exports, but also exceed the licensed harvest by
154,030 cubic metres– generating an alarming
48 per cent illegal logging rate in the country.
Such crimes are costing Mozambique tens of
millions of dollars a year in lost tax revenues
1– funds desperately needed in what is the world’s
fourth least developed nation.
Expanding on a November 2012 EIA report on China’s
illegal timber imports, this briefing provides detailed
investigative case studies into some of the biggest
companies engineering these crimes in Mozambique
today, exposing the smuggling techniques and thepolitical patronage and corruption that facilitate it.
Finally, the briefing makes clear recommendations to
the Mozambican Government on how to eliminate such
illegal logging and trade and protect its forests fromillegal timber traders.

TRADE RISES WHILE
FORESTS FALL
Having only emerged from a bloody civil
war in 1992, increased trade has seen
Mozambique’s economy boom, achieving
an annual average growth of 7.2% overthe last decade.1 But this boom is also
driving corruption, failing to address
poverty and putting pressure on natural
resources.Transparency Internationalranks Mozambique as the 51st mostcorrupt country in the world.2 Thecountry is also ranked as the fourth
least developed country in the United
Nations 2012 Human Development
Index Report,3 with estimated costsof environmental degradation amounting
to nearly $370 million yearly.4
Agriculture, forestry, fishing and hunting
were the largest contributors to GDP
in 2010, amounting to 30.9% of thetotal, demonstrating the importanceof the forest sector in the country’s
economic growth.5
Mozambique’s forests extend over 51
per cent of the country’s land, with four
northern provinces providing the largest
share.6 Total timber production areas
cover 26.9 million hectares (ha).7
Annual rates of deforestation for 20052010 were estimated at 211,000 ha.8

SINO-MOZAMBICANTIMBER TRADE
Sino-Mozambican relations began during
Mozambique’s independence struggle
with Portugal, with China providing
training and financial assistance to the© EIA

INTRODUCTION
Liberation Front of Mozambique(FRELIMO), which has ruled the country
since the end of the civil war in 1992.9
Building on these close political andmilitary ties, trade between the twocountries has grown rapidly over the
past decade. By 2008 China was
Mozambique’s second largest foreign
investor,10 and by 2012 bilateral trade
had reached $1.1 billion.11

ABOVE:
A lorry carrying logs in Beira.

Timber trade plays a significant role.
China needs raw timber to facilitate thecontinued growth of its wood-processing
industries, underpinned by exports anddomestic consumption of timber products.
With a logging ban covering most of
China’s production forests since 1998,
China’s timber deficit is increasingly
being met by imports from emerging
economies such as Mozambique.
Mozambique’s “first class” logs –particularly the species Pau Ferro,Mondzo, Chanate, Jambire and Umbila
woods, - are highly sought after in China
for processing into reproduction antiquefurniture and flooring, mostly to supply
the burgeoning domestic Chinese
market.12 In 2011 several major
Mozambican timber exporting provinces
reported that more than 90% of all
sawn timber and log exports flowed
to China,13 a trend occurring inprevious years.14
Consequently, such first class timber
species - all of which are banned fromexport - made up a staggering 95% of
total licensed harvests for 2009,15
highlighting the overpowering influenceof Chinese timber firms in both timber
production and trade in Mozambique.

“First class timber
species made up
95% of total
licensed harvests
in 2009”2

© EIA“ ‘1st class’ species
are banned fromexport in log
form, requiring
processing before
they leave thecountry”

FORESTRY AND TIMBER TRADE LAWS
The most important laws regulating the forestry and timber sectors in
Mozambique are the 1999 Forest and Wildlife Law16 and its 2002 Regulation.17
The Ministry of Agriculture (MINAG) implements these laws and policies incoordination with the National Directorate of Lands and Forests (DNTF).
The 1999 Forest and Wildlife Law establishes two types of license for legal timber production:
forest concessions and simple licences. Concessions are granted to national or non-national
operators for areas larger that 20,000 hectares with an approved management plan, while
simple licences offer harvesting quotas of 500 cubic metres or less annually over five years
and exclusively to national operators.18
The abovementioned laws also categorize Mozambique’s 118 commercial timber species
into 1st, 2nd, 3rd, 4th and “precious” classes, reflecting quality, uses, demand intensity,and establishing relevant taxes. Importantly, the 22 “1st class” species are banned
from export in log form, and require processing within Mozambique before they can leave
the country.19
Despite this partial log export ban, the illegal timber trade with China is seriously undermining
Mozambique’s forest governance and enforcement efforts, while stimulating corruption.

3

Analysis of Sino-Mozambican timbertrade data over the past six years showsa clear pattern of illegal logging andtimber smuggling.
In 2012 the Mozambican Government
registered 260,385 cubic metres of log
and sawn timber exports to world
markets, including China,20 while Chinaalone registered 450,000 cubic metresof log and sawn timber imports from
Mozambique.21
The 189,615 cubic metre discrepancy ismade up almost entirely of logs smuggled
out of Mozambique by Chinese companies,
and is likely to consist largely of theso-called “first class” species of timber –all prohibited from export.
In 2012 China registered 323,000 cubic
metres of Mozambican log imports,
while Mozambique’s total registeredglobal log exports over the period amounted
to merely 41,543 cubic metres.
The scale of smuggling is staggering –with the discrepancy alone constituting
a huge 42 per cent of China’s total
registered 2012 imports from Mozambique,and an even bigger 72 per cent ofMozambique’s total registered timber
exports to global markets that year.
While 2012 showed the highest trade
data discrepancy to date the patternof smuggling has been clear for years.
Between 2007 and 2012 more than
707,025 cubic metres of China’s
registered imports of Mozambican
timber were not registered or licensed
for export by Mozambique.
The financial loss caused by this illegal
trade is substantial. In 2010 Mozambican
export figures recorded $49 million worthof timber being shipped to China.
Chinese import figures show $134 millionof timber entering the country from
Mozambique, meaning that $85 million
went missing.22© EIA

DESTRUCTIVE DISCREPANCIESABOVE:
Tropical logs in Beira waiting to
be exported.

Accounting for the fact that China actuallyimports about 90 per cent of Mozambique’stimber (rather than its total global exports),
it appears that a larger 215,654 cubic
metres, or 48 per cent of China’s 2012
imports were not registered or licensed
for export by Mozambican authorities.
Applying this 90 per cent to the past six
years suggests that a massive 804,622
cubic metres of Mozambican timber –principally logs – were smuggled to China
from Mozambique between 2007 and 2012.
FIGURE 1

Chinese imports and Mozambican exports of logs and sawn timber in cubic metersfor 2007-201223
Source: (Information from Annual Reports of the Mozambican Forest and Wildlife Services, and information from theGeneral Administration of Customs of the People's Republic of China)

500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2007

2008

2009

Log and sawn timber imports from
Mozambique registered by China

2010

2011

2012

Log and sawn timber exports to world
markets registered by Mozambique4

“ Chinese timber
imports from
Mozambiqueexceeded licensed
legal harvests by
154,030 cubic
metres in 2012”

except 2009. Over the period, Chinese
firms have imported 401,181 cubic
metres (RWE) more than was licensed
for legal harvest by Mozambique.

ILLEGAL LOGGINGIN MOZAMBIQUE
As Sino-Mozambican timber tradevolumes have grown, it has become
possible to see how smuggling to
supply Chinese demand is directly
driving illegal logging in Mozambique.
Mozambique’s 2012 licensed harvesting
volume of 321,370 cubic metres was thehighest recorded since 2007.24 Using an
80 per cent conversion rate for China’s
sawn timber imports, and accounting for
its log imports, a total of 475,400 cubic
metres of logs would have been felled
to supply China’s registered 2012
Mozambican timber imports.25 This
indicates that Chinese timber imports
from Mozambique exceeded licensed
legal harvests by 154,030 cubic metresin 2012 – generating a massive 48 percent illegal logging rate in the country.
Indeed, between 2007 and 2012 China’s
registered timber imports from
Mozambique exceeded Mozambique’s
licensed legal harvest volume every year

Since 2007, Mozambique’s Annual
Allowable Cut (AAC) has been set at
515,672 cubic metres per annum.26
Licensed harvests must be allocatedfrom the AAC. In 2012, China’s wood
imports from Mozambique rose by astaggering 22 per cent, to a level just
40,000 cubic metres less than the annual
allowable cut for all of Mozambique. Ifsuch growth continues, Chinese imports
will exceed Mozambique’s AAC this year.
None of these figures account forexports to other markets, or growing
domestic timber consumption in
Mozambique, both of which would
dramatically increase the overall
harvesting and trade figures wellbeyond legal or sustainable levels.
Clearly, the bulk of Sino-Mozambican
timber trade is not just illegal, but isalso pushing Mozambique’s forests
beyond their maximum sustainable yield.

FIGURE 2

Comparing China’s imports to Mozambique’s licensed harvests in cubic meters for 2007-2012
Source: (Information from Annual Reports of the Mozambican Forest and Wildlife Services, and information from the General
Administration of Customs of the People's Republic of China)

500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,0000

BELOW:© EIAFirst class logs in a
Beira logyard.

5

2007

2008

Total licensed harvest volumes
for Mozambique

2009

2010

2011

2012

Roundwood equivalent volume of logs required
for registered Chinese imports from Mozambique© EIA© EIATOP:
Log truck stopping by the sideof the road in Beira.

© EIA

ABOVE:TAXING ISSUESEIA has also estimated how much
revenue is lost to Mozambique in
uncollected taxes due to this illegal
trade. Timber VAT Law number 7/2010
requires timber exporters to pay 20 per
cent on the f.o.b. price on log exports,
and 15 per cent on sawn timber.27
Assuming a 50 per cent logs and 50 per
cent sawn timber scenario of unlicensed
exports EIA estimates that around$22,896,011 in avoided tax may havebeen lost to State-revenues from total
2012 unlicensed exports to China worth
around $130,834,350.28
Furthermore, the 2002 Regulation of
Wildlife and Forests29 requires taxes
to be paid on the exploration of thedifferent classes of timber species.30
Assuming a median estimate between
the highest taxes to be paid on precious
class species, and the lowest on 4thclass species, EIA calculates
Mozambique’s potential tax revenue loss
at $6,276,339 for 2012 alone.31
Combined, a total potential tax revenue
loss of $29,172,350 can be ascribedsolely to the export timber trade with
China for 2012.
The estimated financing needs for
Mozambique’s National Forest Program’s
law enforcement system for the periodof 2006 to 2010 was $1,051,470, while
total zoning and detailed inventory costs
for the same period were estimated at$10,716,911.32 These costs would becovered almost three times had theaforementioned taxes been collected,
helping resolve some of the problems
of forest regulation and enforcement.

Mozambique’s Readiness Preparation
Proposal appeals for funds for law
enforcement, stating that the country
only has 1,069 forest law enforcement
officers: one for each 83,000 ha offorest, far lower than the one per 5,000 harecommended to make forest crime
control effective. Concession boundaries
are not demarcated properly and do nothave the required processing industries,
with a lack of forest engineers, poor
record keeping and taxing. Mozambique’s
proposal for $16,675,000 in REDD+
funding aims to resolve these problems.33
The entire program and more could
have been funded had the Government
collected the aforementioned taxes
for 2012.
Other less easily estimated tax losses
are also doubtless occurring inMozambique’s timber trade. These
include: a 32 per cent profit tax onenterprises,34 an annual concession tax
determined by the Ministry of Agriculture,
and an annual exploration tax, which
provides that 20 per cent of the exploration
tax will be provided to local communities,
but decreases in value when overcutting
above licensed volumes takes place.35
Structurally this latter tax incentivises
community forest stewardship that could
work with the private sector and law
enforcement in ways that prevent
overharvesting. Yet in Mozambique’s
corrupt timber trade, such preventive
incentive schemes have little chanceof success.
However it is calculated, multi-million
revenue and development losses fromillegal timber trade are unacceptable, as
is the failure to establish a sustained
domestic timber industry capable ofproviding jobs and incomes.

Precious and 1st class logs
waiting to be processed,
loaded and exported from thePort of Beira.

LEFT:
Fan Shi logyard with loaded
containers of roughly
sawn timber.

“A $29,172,350 tax
revenue loss canbe ascribed solely
to the export
timber trade with
China for 2012”
6

© EIA

CASE STUDIES IN CRIME:

The following case studies detail the key findings of EIA’s September 2012 investigations
in Mozambique, focusing on a series of undercover meetings with key timbercompanies in Mozambique.
“It’s only a question of price”
In September 2012, EIA investigators met with MozambiqueFirst International Development (MOFID),a firm constituted in
Mozambique in December 2000 with the aim of importing,exporting, cutting and processing legal forest products, as wellas other agro-industrial activities. Its partners are listed as the
Chinese citizens Liu Chaoying and Yang Yuanwu Jefe.36
Mofid has been caught on numerous occasions attempting toexport prohibited logs to China.37 Yet MOFID continues towilfully break Mozambican laws, apparently protected byhigh-level political allies.
During the meeting with MOFID’s boss, Liu Chaoying,investigators learned that Mofid was one of the first Chinese
timber companies to become established in Pemba, that it held
rights to around one million hectares of forest concessions in
Cabo Delgado and Niassa provinces, and exported over 200
containers of timber per month.
Liu also confirmed that his company is one of the few still able
to illegally export large volumes of 1st class species of logs to
China. When asked by EIA if he could export a 1st class species
called Chanfuta, Liu replied “Sure. Only a matter of price”
suggesting a clear breach of Mozambican law.38
The meeting also demonstrated the ease with which Mofid
circumvents inspections by government officials. When told by
one of his associates of a looming visit by Ministry ofAgriculture officials to his log yard, Liu said he would just arrange
to go through the motions of loading ebony logs, which areallowed to be exported, into containers on the day of the visit.

7

A phone call by EIA to Mofid’s Chinese affiliate in November
2012 confirmed that the company was stocking prohibited
Mozambican 1st class logs in China.
Liu claimed that his close relationship with the current Ministerof Agriculture - Jose Pacheco - had helped in securing forest
concessions, boasting that “me and him are like brothers.”
The pair had purportedly first met when Pacheco was theGovernor of Cabo Delgado and Liu was setting up in theprovince. Liu went on to say that “when he [the Minister]needs money, he has come looking for me”.
Indeed, EIA learned that Minister Pacheo had visited Liu threetimes recently, because of the Frelimo party conference being
held in Pemba at the time of EIA’s visit. During a tour of their
log yard, Liu revealed that the presence of the President ofMozambique in Pemba for the Frelimo Congress had led to atemporary halt of Mofid’s illegal log exports. He said:“Once the President leaves,there’ll be no problem.
Liu Chaoying,
Besides my friend
boss of Mofid[Pacheco] is here,
so I don’t want to put him
in a difficult situation”.
This close relationshipbetween a major timbersmuggler and the Ministertasked with overseeing
the forest sector in
Mozambique is ofserious concern.
© EIA

MOFID

Senlian“The Minister will sort it out for me”
In Pemba, EIA investigators also met with Mr Xu from Senlian
Corporation, a subsidiary of the Chinese state-owned firm
Shanghai Senlian Timber Industrial Development Co. Ltd.
According to Xu the company has 60,000 hectares of forest
concessions in Cabo Delgado and Niassa, and exports around800 containers of timber to China each year.

© EIA

Senlian also enjoys influential political patronage. During themeeting at Xu’s home EIA investigators were introduced toTomas Mandlate, formerly Minister of Agriculture and current
Member of Parliament,39 who was staying at Xu’s house while
attending the Frelimo congress. Mandlate explained that hisrole is to “help the company solve some problems”; while Xu
later explained that Mandlate “takes care of the liaison work…
such as export quotas, forest concession permits” for which hereceives “a wage every month” and a stake in the company.
One such “problem” Senlian faces occurred in April 2012 when
34 of its containers of illegal logs were seized during export,
following a tip-off froma rival Chinese company. Senlian
incurred hefty fines and financial losses as a result, leading thecompany to halt log shipments for the rest of the year.

Xu, however, said he was working with Mandlate to resume theillegal log shipments: “I was just discussing with the Ministerearlier… he will sort it out for me next year”.
When asked how Mandlate would bypass log export controls forthe company, Xu said “he was the Minister of Agriculture
before… all the Directors in this province are beneath him”,
adding, “for this, it definitely involves issuance of quotas… andmaking contact with people down there, and then it just goesout”. Asked why next year, Xu revealed “because next year,
there’s the elections”, clearly implying that the provision offunds for political campaigns would result in high-level
clearance for timber smuggling.

© EIA

Prior to the seizure the company’s annual turnover inMozambique was around $15 million, mainly derived from theexport of up to 800 containers of 1st class Wenge, Pau Ferroand Mondzo logs to China every year, all directly contravening
Mozambican timber export laws.

TOP:
Parliamentarian Thomas Mandlatewith Mr Xu.

ABOVE:
Senlian’s log yard.

Mandlate is also the Chairman of a company that owns a Special
Export Terminal in the Port of Nacala; a warehouse with capacity
for 8,000 tonnes, offering storage, transport and customs
processing services.40 Mandlate also holds a stake in a company
called Holamale, licensed to explore forest products.41 Thesebusinesses and links with Senlian alleged during EIA’s meetingwith them present a clear conflict of interest with Mandlate’s
current role as a Parliamentarian voted in to represent the
public interest, and a previous Minister of Agriculture.
Mandlate has denied being involved in the illegal timbertrade with Mr Xu.42

8© EIAFan Shi container being loaded withroughly sawn timber without thesupervision of forest officers

Fan ShiPingos Marinha

Payments to “secretly clear customs”“This is our secret”

EIA first encountered Fan Shi Timber in Guangdong, southern
China, in April 2012,meeting with Fan Liyu of Huadian Timber inthe belief that the company dealt in Burmese wood. EIA learned
that the firm was now mainly sourcing timber from Mozambique
to supply reproduction furniture manufacturers in China. Fan
explained how Fan Shi Timber is a group of family-run businesses
owned by three relatives from Fujian; Fan Guoyong, Fan Jinglin,
and Fan Jinghui. None of the three companies have forest
concessions in Mozambique and claimed to rely on logging
quotas for specific species and volumes, negotiated andpurchased from the Ministry of Agriculture.

Another Pemba-based Chinese operation EIA encountered is
Pingos Marinha, headed by brothers Zheng Fei and Zheng
Xudong. The company runs two concessions in Cabo Delgado
and exports nearly 1,000 containers of timber a year to its
Guangdong-based affiliate Dongguan Yetong Trading.

With monthly exports of around 100 containers for each of thethree companies, Fan Shi combines to export between 3,0004,000 containers to China every year, mostly Mondzo, Chanate
and Pau Ferro. According to Fan Liyu bribes are paid as amatter of routine to customs officials in Beira to ease exports
and “secretly clear customs”.

Nonetheless, the company still circumvents export laws byadding simple relief carvings to the sides of oversized woodblocks and reclassifying them as “finished products”. After
explaining this scam Zheng said: “This is our secret. When
you’re outside, don’t tell people about it”.
Zheng Fei also owns a company called Casa Bonita
Internacional,44 the license for which was recently cancelled
for having exported illegal
timber.45 Despite this, in
Zheng Xudong
March 2012 a 20,000 haconcession was issued to
Pingos.46 It seems odd that
authorities should grant
Zheng a new concession,
given that forest laws
stipulate that a concession
applicant has to be verified
as having no prior infractions
against their name.47 It
appears that Mozambican
licensing authorities quickly
forget smugglers’ crimes.
© EIA

In September 2012 in Mozambique, EIA observed huge amountsof logs at Fan Shi’s storage facilities outside Beira. At one of
the sites a foreman told EIA investigators that they were nolonger exporting round logs as authorities were clamping down
on offenders, with stiffer penalties imposed. Instead, EIA
observed containers being loaded with oversized lumber thatexceeded the permitted thickness. Apart from loading illegal
timber, Fan Shi also flouted the rules on this occasion by nothaving forest officers present when loading the containers, as
required by Mozambique’s Export procedures.43

According to Zheng Xudong, the company regularly exported
Wenge and other 1st class logs to China until February 2012,
when authorities began to clamp down on illegal shipments.

9

Verdura lda“you pay extra costs for this”
Verdura has three partners operating out of the ports ofQuelimane, Beira and Nacala, exporting approximately 170
containers of mainly Mondzo, Chanate, Pau Ferro logs eachmonth to Guandong province in China.

© EIA

EIA met with the Beira partner, Abishek Lal, who told us how
Verdura had had 70 containers seized in Nacala in 2011,
containing illegal 1st class logs and that since then it had beendifficult to export 1st class logs because of a Government
crackdown. As a result, Abishek resorted to placing illegal 1stclass species of roughly sawn logs at the back of containers,
behind legal processed sawn timber at the front, so as to hide
the crime. He even showed EIA pictures of how he did this,saying “This is now Jambirre okay, and these are the containers
I offer. In every container on the back, I put 25 big pieces, andthe rest [at the front] are all standard thicknesses. These [thesquare logs] will go at almost $50-60 higher price, than thestandard [legal] thickness ones.”
He also claimed to export more than 40 of these containers
each month. When EIA asked if the containers were notchecked, Abishek replied: “they check – you pay extra costfor this”, clearly demonstrating how timber traders are still
evading the required export procedures by paying bribes.

The Tsou Family Companies
Dodgy Paperwork

One of them, Green Timber, was constituted in January of 2001,
with its registered activities ranging from imports and exports,
to financial services and selling goods,49 owning concessions in
the provinces of Manica50 and Nampula and exporting most of
its timber to China.51 Green Timber has been a frequent targetof the press for over eight alleged crimes it has committed,
including avoidance of checkpoints,52 using contacts in ports tofacilitate the illegal export of logs,53 illegally cutting in a nature
reserve,54 constructing illegal bridges to facilitate the smugglingof illegal logs,55 using clandestine log yards,56 and cutting above
permitted volumes.57 Undercover journalists also exposed theirillegal practices.58© EIA

Ken and Tina Tsou have a variety of companies registered intheir names,48 some of which have been implicated inalleged criminal timber trading.
TOP:
Abishek Lal from Verdura showing
EIA investigators how he illegally
exports first class logs.

ABOVE:
Container of illegal logs from
Mozambique, Shatian port,southern China, January 2011.

Documents obtained by EIA59 demonstrate the methods used by
the Tsous to continue to export illegally through a variety ofcompanies.60 A shipping bill obtained by EIA shows 40 containersof 1st class logs, being shipped in January 2011 from Hong Kongto Shatian in south China, to China Meheco Import & Export
Corporation. The Chinese importer is a subsidiary of the state
owned holdings company China Meheco Corporation, which islisted on the Shanghai stock exchange.61 The shipment
originated in Mozambique and was illegally exported fromthe port of Nacala by a company called Oceanique Lda, owned
by Tina Tsou.62
This case shows how weak lawn enforcement results in Chinesestate run firms securing timber smuggled from Mozambiquethrough fraudulent paperwork and transshipment.

10

LIGHT TOUCH LAW ENFORCEMENTThe Mozambican Government has commendably attempted to respond to the illegal timbertrade, and since 2007 embarked on a series of seizures of illegal timber, primarily from
Chinese traders. Significant seizures have included:
January 2007: Following a tip-off, authorities in the portof Pemba, Cabo Delgado, seized 47 containers with over
1,000 logs banned from export. The logs were owned by
the Chinese company Mofid;63
January 2009: Four companies were fined for attempted
smuggling of 958 cubic metres of logs to China throughPemba port. The companies – Mofid, Pacifico, Kingsway
and Tienhe – are all Chinese-owned;64
December 2011: Authorities in Pemba port detained thevessel Kota Mawar after discovering 161 containers of illegal
logs owned by five Chinese firms – Mofid, Tienhe, Pacifico,Senlian and Alphaben;65

July 2011: 501 containers of illegal timber were seized at
the port of Nacala, Nampula province, en route to China.
Chinese-owned firms involved in the smuggling attempt
include Casa Bonita, Zhen Long, Chanate, Senyu, Tong Fa
and Yihou;66

January 2012: Mozambican customs seized 30 containersof logs in the yard of a Chinese company called Heng Yi
that was attempting to export illegally to China throughthe port of Maputo.67
Yet despite being caught breaking the law, after paying
the appropriate fines some of the companies implicated inthese frauds were allowed to buy their logs back and shipthem to China.68

undermined by unscrupulous and corrupt officials who
facilitate Chinese traders in continued illegal operations.
EIA estimates that the six largest timber traders undercoverinvestigators met with in Mozambique account for an annual
export of 228,000 cubic metres.70 These firms alone
exceeded Mozambique’s total licensed exports for 2011 by
16,805 cubic metres.71
The boasts of such traders about their ability to operateillegally through bribery and fraud flies in the face ofexisting Government efforts to get tough on illegal exports.
Even recent moves to increase fines for flouting the law are
relatively meaningless to the traders.72 With the toughest
fine being merely US$33,783, clearly the financial deterrent
is not sufficient to stop the major traders from exporting
illegally.73
Further, this illegal trade is pushing harvesting beyond
sustainable limits, and into more remote areas. Several
traders EIA met in Mozambique voiced concerns that key
commercial species would likely be exhausted in the next
five to 10 years, and that logging operations wereincreasingly targeting the remote provinces of Niassa andTete as supplies dwindle in provinces like Zambezia.
More robust enforcement options exist, but are rarely
exercised. Article 44 of the 1999 Forest and Wildlife Law,for example, sets penalties that may also be applied tolaw breakers, including: the cancellation of licenses; thepartial or total suspension of activities associated with thecrimes; and a prohibition on any new licenses for a periodof one year”.74

Apart from these seizures, the Government has also creditably
increased the fines payable for breaking the rules, passing
into law by Decree 76/2011, as well as approving the Regulation
None of the companies EIA met with have had these lastof the Value Added Tax (V.A.T.) on forest products in 2011,
sanctions applied to them, and many continue to act
which was designed to discourage the export of logs.69
with impunity despite their involvement in the illegal
timber trade. Current law enforcement efforts, while
However, as EIA’s research and investigations show, while
commendable, are not exploiting all of the tools available
laudable work is being done by progressive elements of
to deter criminals.
Mozambique’s Government to crack down, their work is© EIAPort of Beira: a hub fortimber shipments to China.

11

Mozambique is a signatory to the
Yaounde Ministerial Declaration on
African Forest Law Enforcement andGovernance, committing itself to 42
indicative actions against illegal logging
and associated trade, corruption, andto promote improved forest governance.75
Given the problems outlined in thisbriefing, it is clear these commitments
have not been met.
The discrepancy in official export/importdata in volumes of timber traded
between Mozambique to China
demonstrates the scale of illegal
exports and how they drive illegal
logging in the country.
The tax revenue lost to this trade
harms Mozambique’s capacity to fundimproved forest management and law
enforcement, as well as community
poverty alleviation schemes.

© EIA

CONCLUSIONS
Government efforts to control theillegal timber trade, by increasing thenumber of seizures, legislating for
greater fines and by increasing the
VAT tax on the export of logs, havebeen undermined by the persistenceof the illegal operators protected bypolitical patronage.

ABOVE:
Logyard in Beira containing
precious and first class speciesof timber.

These problems should by now haveraised concerns from the relevant
Mozambican authorities and theirChinese counterparts, leading toan investigation regarding any
illegalities involved.
The fact that these problems continue
to blight the proper management of
the forest sector is a travesty for
Mozambique’s forests and for thosepoor communities who rely on them fortheir survival.
12

RECOMMENDATIONSThe Mozambican Government should:l Extend the log export ban to cover all species assoon as possible;l Initiate a cooperative investigation between

Chinese and Mozambican authorities into theillegalities involved in the timber trade between
the two countries;l Institute a wide-ranging investigation into

corruption in the forest sector, including into theinvolvement of forest officers, police officers andcustoms officials, and to include the roles andrelationships of current Agriculture Minister Jose
Pacheco and parliamentarian Thomas Mandlate;l Investigate the illegal export of unprocessed 1st© EIAclass timber by the companies MOFID, Senlian,Pingos Marinha, Fan Shi, and Verdura;

13l Strengthen penalties for breaches of forest andtimber trade laws and regulations, so as to further
discourage forest and timber trade crime;l Increase forest law enforcement and the proper

application of forest and export regulations.

The Chinese Government should:
l Prohibit the import of illegal timber into China;l Liaise with Mozambique on its timber export laws,

and reciprocate them on imports into China;l Ensure State-owned companies (including Senlian

and Meheco) are not exporting illegal timber from
Mozambique, or importing it into China from
Mozambique.

REFERENCES
Africa Economic Outlook, Mozambique
http://www.africaneconomicoutlook.org/cen/countries/southern-africa/mozambique/
2. Transparency International Corruption Perception Index,
2012 http://cpi.transparency.org/cpi2012/results/
3. United Nations Human Development Index Report, 2011,
http://hdr.undp.org/en/statistics/hdi/
4. Ministériopara Coordenação de AcçãoAmbiental (Ministryof Coordination for Environmental Action – MICOA),
Seminar on Natural Resources, Environment and Growth
hosted by MICOA – February, 24th 2009
5. Ibid
6. Mozambique’s Readiness Preparation Proposal (RPP)
for the Forest Carbon Partnership Facility, March 2012.
7. Direccao Nacional de Terras e Florestas, Departamento
de Inventario de RecursosNaturais, Inventarion
Florestal Nacional, 2007, page 5
8. The context of REDD+ in Mozambique: Drivers, Agentsand Institutions, Centre for International Forestry(CIFOR), 2012.
9. Sino-Mozambican Relations and their Implications for
Forests: A Preliminary Assessment for the case ofMozambique, Center for International Forestry
Research (CIFOR), 2012.
10. Sino-Mozambican Relations and their Implications for
Forests: A Preliminary Assessment for the case ofMozambique, Center for International Forestry
Research (CIFOR), 2012.
11. All Africa, Mozambique-China Trade Continues to Grow,
9/12/12, http://allafrica.com/stories/201212090143.html
12. Testimony from Chinese timber traders to undercover
EIA investigators in both China and Mozambique, 2012
13. Macauhub, Exportação de madeira de Sofalarendeu a
Moçambique 2,6 milhões de dólaresem 2011
http://www.macauhub.com.mo/pt/2012/02/24/
exportacao-de-madeira-de-sofala-rendeu-amocambique-26-milhoes-de-dolares-em-2011/
14. SérgioChichava, Moçambiquena rota da China: Uma
oportunidadepara o desenvolvimento?; page 342, 2009
and the World Widelife Fund; Moçambique e Tanzania
unemesforçosem pro da Conservaçaõ , April 2010, page 2
15. Direcção Nacional de Terras e Florestas, Relatório deBalanço Anual de Terras, Florestas e Fauna Bravia, 2009
16. Boletim da Reublica No 27, I Série – 4o Suplemento, de
12 de Julho de 1999, Lei No. 10/99
17. Boletim da Republica, 1 Serie – Numero 22, 6th of June
2002, Decree No 12/2002, Regulation of the Wildlife
and Forest Law
18. Boletim da Reublica No 31, 1 Serie, Agosto de 2012,
Decreton.o 30/2012
19. Boletim da Republica de Mocambique 6 de Junho de
2002, 1 Serie – Numero 22, Decreto no12/2002,
Regulamento da Lei de Florestas e Fauna Bravia
20. Annual Reports of the Mozambique Forest Authority
21. Global Timber.org.uk
22. Missing Trade Records Signals Threat to Mozambique’s
Miombo Woodlands, CIFOR Forests News, 24 November
2012.
23. Mozambican figures from DirecçãoNacional de Terras e
Florestas, Relatório de BalançoAnual de Terras,
Florestas e Fauna Bravia, 2007, 2008, 2010, 2011, &2012. China figures extrapolated from Global
Timber.com - http://www.globaltimber.org.uk/
mozambique.htm
24. Direcção Nacional de Terras e Florestas, Relatório deBalanço Anual de Terras, Florestas e Fauna Bravia,
2007, 2008, 2010, 2011, & 2012.
25. An 80% conversion rate applied to 127,000 cubic
metres of sawn timber imports registered by China
Customs equals 152,400 cubic metres (RWE), added toregistered log imports of 323,000 cubic metres =445,000 cubic metres of logs RWE.
26. Avaliação Integrada de Florestas Em Moçambique Aifm; Inventário Florestal Nacional, April 2007.
27. Boletim da Republica, 1 Serie – Numero 32, Lei n.°
7/2010: Cria a Taxa de Sobrevalorização da Madeira,abreviadamente designada TSM
28. Interviews with traders indicated an f.o.b. price range
from $500/cubic metre (for sawn Umbila) to$880/cubic metre (for Pau Ferro logs) for 1st classtimber species (which include Pau Ferro, Mondzo,
Jambirre and others – which are most in demand in China).

29. Boletim da Republica, 1 Serie – Numero 22, 6th of June
2002, Decree No 12/2002, Regulation of the Wildlife
and Forest Law
30. Boletim da Republica de Mocambique 6 de Junho de
2002, 1 Serie – Numero 22, Decreto no12/2002,
Regulamento da Lei de Florestas e Fauna Bravia
31. Calculations based on 154,030 cubic metre discrepancy,
and an average tax of $40/cubic metre.
32. Ministry for Foreign Affairs of Finland Unit for Southern
Africa, Forest Sector Support Program in Mozambique,
March 2009, page 9-10 (using a conversion rate of US
Dollars to Euros of 1.3028)
33. Mozambique’s Readiness Preparation Proposal (RPP)
for the Forest Carbon Partnership Facility, March 2012,page 65
34. Código do Impostosobre o Rendimento das Pessoas
Singulares (IRPS)
35. Boletim da Republica, 1 Serie – Numero 22, 6th of June
2002, Decree No 12/2002, Regulation of the Wildlife
and Forest Law
36. Boletim da Republica nº 50, III Série, Supl of 13th
December of 2000
37. Macau.blogs.com, Madeireiros contrariados com
proteccionismo de alguns, Pedro Nacuo, 2011,
http://macua.blogs.com/moambique_para_todos/
2011/01/madeireiros-contrariados-com-proteccionismode-alguns.html?asset_id=6a00d83451e35069e20147
e196573b970b
38. Boletim da Republica, 1 Serie – Numero 22, 6th of June
2002, Decree No 12/2002, Regulation of the Wildlife
and Forest Law (Article 12 para 2+3 states that: 2. The
export of first class species of wood is only permitted
subsequent to it being processed according to theterms set out in this regulation.
39. Thomas Mandlate, registered Parliamentarian andmember of the FRELIMO party:http://www.parlamento.
org.mz/index.php?option=com_content&view=article&id=39:lista-de-deputados-da-bancadaparlamentar-da-frelimo&catid=20&Itemid=258&showall=1&limitstart=
40. Mining Review.com, First Terminal for Nacala,
http://www.miningreview.com/node/20275
41. Boletim da Republica nº 29, III Série, 2º Supl. de 20 deJulho de 2012 - pág. 936-(66) http://www.panbox.co.mz/
cgi-bin/ wxis.exe?IsisScript=hermes/ pesquisaf.xis&
formato=1&contador=&expressao1=Tom%E1s%
20Frederico%20Mandlate&details=1&login= karl&tipo=3
42. Savana, Emidio Beula, Exportacao illegal de madeiracontinua, 07.12.2012
43. O Quadro Legal Para Importacao e Exportacao em
Mocambique, Associacao de Comercio e Industria, 2008
(page 31)
44. Boletim da Republica nº 3, III Série de 17 de Janeiro de2006 - pág. 65, http://www.panbox.co.mz/
cgi-bin/wxis.exe?IsisScript=hermes/pesquisaf.xis&formato=1&contador=&expressao1=Zheng%20
Fei&details=1&login=karl&tipo=3
45. Madeireiras moçambicanas e chinesasperdemlicençasde exploraçãohttp://noticias.sapo.cv/lusa/artigo/
13286794.html
46. Boletim da Republica nº 11, III Série de 19 de Marcode 2012
47. Article 27 para 2 of the 2002 Forest Regulation states"2. It is the responsibility of the Forest and Wildlife
Services to verify the competency of the applicant(concessionaire applicant) based on the existence of
any infractions according to article 41 of the 1999
Forest Law".
48. Bulletin of the Republic of Mozambique No 12, Series IIIof the 21st of March 2001, & Hermes, Data Base of theAnnouncements of registered companies publicized in
the Bulletin’s of the Republic of Mozambique:http://www.panbox.co.mz/cgi-bin/wxis.exe?IsisScript=
hermes/ pesquisaf.xis&formato=1&contador=&
expressao1=Ken%20James%20Tsou&details=
1&login=karl&tipo=3
49. Hermes, Data Base of the Announcements of registeredcompanies publicized in the Bulletin’s of the Republicof Mozambique, http://www.panbox.co.mz/cgibin/wxis.exe?IsisScript=hermes/pesquisaf.xis&forma
to=1&contador=&expressao1=Ken%20James%20
Tsou&details=1&login=karl&tipo=3

50. Boletim da Republica, Suplemento 4, Serie III, Numero
3, Janeiro 2007
51. McKenzie, Catherine, Chinese Takeaway, 2004
52. Centro de Integridade Publica, Relatório Anual deControlo da Corrupção em Moçambique, 2008, page 15
53. Aunicio da Silvia, Mocambique Magazine, Exportação demadeiranã oprocessada é umarealidade, 29 dedezembro de 2008.
54. União Africano, Mozambique: Registadores ilegais
prendidos em Zambezia, 2009,http://www.union-africaine.org/pt/mozambiqueregistadores-ilegais-prendidos-em-zambezia.html
55. McKenzie, Catherine, Tristeza Tropical, 2009, page 25.
56. Fernando Gil, Aprendidos 2500 mil toros de madeiraillegal:http://macua.blogs.com/moambique_para_
todos/2012/05/apreendidos-2500-mil-toros-demadeira-ilegal.html
57. O Pais, Empresachinesa Green timber multadaem 200
mil meticais, 17.07.2012, http://macua.blogs.com/
moambique_ para_ todos/2012/07/empresa-chinesagreen-timber-multada-em-200-mil-meticais.html
58. Valoi, Estacios, Lideres coniventes no saque daMadeira, July 2011, http://valoie.blogspot.co.uk/2011/07/
lideres-coniventes-no-saque-da-madeira.html
59. Available on request – for documentary evidence,
please contact us using our contact details on our
website: http://www.eia-international.org/
60. Carvalho, Nelson, Mocambique paraTodos, Uma vezmais- Generais no tráfico de madeira, 24/07/11,
http://macua.blogs.com/moambique_para_todos/2011/07/uma-vez-mais-.html
61. http://www.meheco.com/
62. Bulletin of the Republic of Mozambique nº 18, III Seriesof 30th April 2003 – page 761, http://www.panbox.co.mz/
cgi-bin/wxis.exe?IsisScript=hermes/pesquisaf.xis&
formato=1&contador=&expressao1=Tina%20%C2ngela%20Tsou&details=1&login=karl&tipo=3
63. Agencia de Informacao de Mocambique, Over a thousand
logs seized in Pemba port, February 2, 2007
64. Agencia de Informacao de Mocambique, Timber companies
fined over illegal exports, January 9, 2009
65. Agencia de Informacao de Mocambique, Illegal exportof timber blocked, 13 January 2011
66. Agencia de Informacao de Mocambique, Revenue
authority formalizes seizure of timber containers,
11 August 2011
67. All Africa, Mozambique: Customs Seize Containers ofIllegal Logs, http://allafrica.com/stories/
201301120039.html
68. Agencia de Informacao de Mocambique, Illegal logs soldback to companies, November 26, 2011 (the companies
referred to are Casa Bonita, Zhen Lomg, Chanate,
Senyu,TongFa and Yihou)
69. Decreto 21/2011, regulamento da taxa desobrevalorização da madeira
70. Combined, Senlian, Fan Shi, Mofid, Pingos, Verdura,
Alman claim to export a total of 11,440 containers oftimber to China each year. EIA has assumed that foreach 20ft container 20 cubic metres of timber are
stored, as per information derived from this link:
http://www.linkedin.com/groups/UMBILA-WOODBOARDS-SALE-Origin-2354777.S.44187616
71. Direcção Nacional de Terras e Florestas, Relatório deBalanço Anual de Terras, Florestas e Fauna Bravia,
January 2011, page 11 (licensed exports were 211,995
cubic metres for that year)
72. Boletim da Republica, 1 Serie – Numero 52, 30 deDezembro de 2011, Decreto No 76/2011, page 3-4
73. Using a current conversion rate of 29.6 Meticais per $:http://coinmill.com/MZN_USD.html#MZN=3130000
74. Boletim da Reublica No 27, I Série – 4o Suplemento, de
12 de Julho de 1999, Lei No. 10/99
75. Africa Forest Law Enforcement And Governance(AFLEG) Ministerial Conference 13 -16 October, 2003,
Ministerial Declaration Yaoundé, Cameroon
October 16, 2003

© EIA

1

14

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