page_title: Illegal logging in Madagascar
section_title: Role of the international market
hierarchical_section_title: Illegal logging in Madagascar / Effects of the 2009 political crisis / Role of the international market
caption_attribution_description: English: Processing of illegal rosewood near Antalaha, Madagascar
context_page_description: Illegal logging has been a problem in Madagascar for decades and is perpetuated by extreme poverty and government corruption. Often taking the form of selective logging, the trade has been driven by high international demand for expensive, fine-grained lumber such as rosewood and ebony. Historically, logging and exporting in Madagascar have been regulated by the Malagasy government, although the logging of rare hardwoods was explicitly banned from protected areas in 2000. Since then, government orders and memos have intermittently alternated between permitting and banning exports of precious woods. The most commonly cited reason for permitting exports is to salvage valuable wood from cyclone damage, although this reasoning has come under heavy scrutiny. This oscillating availability of Malagasy rosewood and other precious woods has created a market of rising and falling prices, allowing traders or "timber barons" to stockpile illegally sourced logs during periodic bans and then flood the market when the trade windows open and prices are high. Over 350,000 trees were illegally felled in Madagascar between 2010 and 2015, according to TRAFFIC.
context_section_description: Although timber barons orchestrate the illicit operations, including export, their operations are financed by international sources. This financing comes in the form of down payments of up to half the total sale from foreign buyers and loans from international banks that have branches in Antananarivo. The loans are critical, even in such a profitable industry, because without full payment, most of the capital gets tied up in the stockpiles of logs waiting to be exported.
  More than two-thirds (11 out of 15) of the major timber barons have received loans from the Bank of Africa Madagascar while the two most important timber barons have received loans from BFV Société Générale, according to cargo manifests from ports in the SAVA Region. In all, 55% of the loans were made by the Bank of Madagascar, while 45% were made by Société Générale. Local reports have also indicated that Crédit Lyonnais was also involved in giving loans.
  Over the course of the political crisis, six nations (in conjunction with the World Bank and three conservation organizations) have called for a stop to this illegal logging in the national parks and other protected areas. Ironically, many of these same governments have either directly or indirectly helped finance these illicit acts through their investments. France, the Netherlands, and Morocco, as well as the World Bank, have been identified as having directly funded these activities. The Bank of Africa is partly owned by France (through the Agence Française du Développement), the World Bank's International Finance Corporation (IFC), Netherlands Development Finance Company (FMO), and Banque Marocaine du Commerce Extérieur (BMCE Bank) in Morocco. Also, Société Générale and Crédit Lyonnais are both partly owned by the French government. Most other western governments are significant shareholders in these banks, thus helping channel foreign investment money into this informal economy. Despite this, these governments and banks have not faced the same level of scrutiny from the public as the shipping companies have.  However, as of February 2010, the organized trafficking of illegal wood is being investigated by SAMIFIN (the Malagasy Financial Intelligence Services), which is starting to make these international financial organizations reluctant to participate.
  Several international shipping companies have also previously been implicated in the export of illegally harvested wood from Madagascar, although most of them immediately and unequivocally ceased such operations when confronted with the issue. Between January and April 2009, United Africa Feeder Line (UAFL), based in Mauritius, shipped 80% of the exports out of Vohémar and Delmas Shipping, based in France and a subsidiary of CMA CGM, shipped the remaining 20%. According to local sources, Spanfreight and Safmarine Container Lines N.V. have also been involved in the exports, although the EIA and Global Witness report could not substantiate the claim at the time. Other companies, such as Pacific International Lines (PIL), may also be involved or may become involved, but it is difficult to track since containers are transshipped, and effectively laundered, through nearby Réunion or Mauritius.  By the end of 2009, only Delmas continued to ship rosewood and other precious woods out of Madagascar, although it was beginning to come under public pressure to stop.
  Ultimately demand fuels the market for these precious woods. Most of the blame rests with the Chinese and Westerners, who unknowingly prop up this high-priced market through their demand for high-class furniture and musical instruments made from rosewood or ebony. Therefore, the solution lies in public education to help control demand and teach people how their money can indirectly support these illegal activities by providing revenue to companies that directly support them through investment.
caption: Near the port city of Antalaha, workers process illegally cut rosewood by turning it into planks, which is considered "semi-finished form"
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