At a meeting in Sochi, Russia, earlier this month, CITES’s standing committee rejected Madagascar’s latest plan to sell off its stockpiles of illegally harvested rosewood, largely because the plan called for local timber barons to be paid for their troves of wood.

Environmental groups argued that operators who logged illegally should not be rewarded for it, and delegations from several African countries reportedly opposed the plan because they feared their own timber barons would learn the wrong lesson from the deal.

Madagascar’s environment ministry released a statement after the meeting indicating that it would take the recommendations made by the CITES committee into account in revising the plan for submission again in 2019.

A single log of rosewood from Madagascar can sell for thousands of dollars in China, and a bed made from the wood can cost as much as $1 million. But an embargo on international rosewood sales under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) makes the sale of Madagascar rosewood illegal. This has left people in Madagascar with the task of figuring out what to do with all of the rosewood that’s already been logged, but remains in country — a huge supply of logs and planks collectively worth tens of millions of dollars.

At a meeting in Sochi, Russia, earlier this month, CITES’s Standing Committee rejected Madagascar’s latest business plan to sell off its rosewood stockpiles, largely because the plan called for local timber barons to be paid for their wood.

Environmental groups argued that operators who logged illegally should not be rewarded for it. “We found several shortcomings in the plan but the main issue was potential benefits for people who’ve been involved in illegal activity,” Susanne Breitkopf, who attended the meeting in Sochi, told Mongabay. Breitkopf is a forest policy manager at the Environmental Investigation Agency (EIA), a Washington, D.C.-based advocacy group. “This would set a very worrying precedent,” she said.

At the CITES meeting, delegations from several African countries also opposed Madagascar’s plan because they feared their own timber barons would learn the wrong lesson from the deal, Breitkopf said.

Porous stockpiles

It’s unclear how much logged rosewood (Dalbergia spp.) and ebony (Diospyros spp.) is currently stockpiled in Madagascar. Though the EIA calls it “likely the largest and most valuable timber stockpile on earth,” the reality is messier. The rosewood sits in various depots all over Madagascar, some better preserved and protected than others.

Moreover, there are three types of rosewood stockpiles: those seized and stored by the government; those declared to the government but still controlled by timber barons; and those hidden illegally in undeclared places, mostly in northeast Madagascar. The number of hidden logs in the country could be 2 million, according to a 2016 CITES document.

Since 2010, Madagascar’s government has made at least five attempts to audit the stockpiles. The World Bank loaned the country about $3 million for these efforts, but a complete audit is nearly impossible, given the large numbers of hidden logs and the lack of cooperation on the part of many timber barons. Government corruption in Madagascar, which has been the subject of investigations by Global Witness, EIA, TRAFFIC, and most recently the Organized Crime and Corruption Reporting Project, further complicates efforts to manage the stockpiles.

Even the declared wood is not well controlled. Madagascar’s government began asking rosewood operators to report the quantity of their stocks in 2011, following a two-year period of intensive logging unleashed by a 2009 coup d’état. The idea was to account for and ultimately dispose of the rosewood that had already been logged in order to reach “stock zero.” That way, any undeclared or newly cut rosewood could then be identified and seized.

But the counts of declared rosewood have changed over the years. Some operators declared more than they actually had, so that they could continue adding freshly cut logs. Effectively, the stockpiles serve as laundering mechanisms, observers say, contributing to the urgency to dispose of them, whether by selling them or burning them, as some have proposed.

Madagascar estimates that the declared and seized rosewood is worth between $25 million and $300 million, according to Rick Hearne, a U.S. timber dealer who attended the June workshop as a consultant for the Madagascar government. Hearne, who inspected two of Madagascar’s official rosewood depots, expects that actual revenues would be at the bottom of that range. The wood’s value goes down by roughly 10 percent per year, and some of it has been sitting around for 10 years, he told Mongabay.

Business plans

Last year, Madagascar released its first plan to sell the rosewood stockpiles. It included a provision to compensate timber barons who hold the wood. The idea was to motivate them to hand it over to the government rather than sell it overseas illegally themselves, as well as to avoid the potential for violence. (The barons aren’t technically “owners” of the wood; even the government’s plan acknowledges that “individual possession of stockpiles is illegal.”)

In December, the CITES Standing Committee summarily rejected that plan, which the government had drafted without consulting civil society groups. In June, officials in Madagascar met these and other stakeholders at a three-day workshop meant to help improve the plan, and in August, Madagascar submitted a revised plan to CITES. Even critics agreed that it was an improvement on the 2017 version, with, for example, more details about how the revenues of a sale would be distributed.

However, the changes were not sufficient to satisfy the parties at this month’s CITES meeting. The main sticking point was that the plan still included an “indemnification” for timber barons: $7 million of its $8.4 million budget for auditing the stockpiles would have gone to the private holders of the wood. (The plan called for the barons to use $1.7 million of that money to transport the wood to government depots.)

The CITES committee encouraged Madagascar to give an independent observer the mandate to report on forest and stockpile management, an approach that has had positive results in West and Central Africa. That recommendation was part of an effort to address underlying governance issues and avoid dwelling too much on the stockpiles, which dominated the Madagascar discussion in Sochi.

“It’s crucially important that matters of enforcement and governance are not sidelined or weakened while everyone is now focused on managing and potentially selling some of the stockpiles,” said the EIA’s Breitkopf. “Any stockpile management system can only be as effective as the enabling system of governance it is placed in.” She said Madagascar had still not followed CITES recommendations from last year, such as prosecuting high-level timber barons and developing a plan to take control of undeclared and hidden stocks.

Despite the ineffectiveness of some past CITES recommendations, many civil society groups are relieved by the body’s latest decision regarding the stockpiles. “This was extremely important to us [because] providing financial benefits to traffickers would have sent the worst signal that the Malagasy State is so weak that it has to accept impunity and extortion from traffickers to get effective control of their stocks,” Frédéric Lesné, head of advocacy for Transparency International – Initiative Madagascar, told Mongabay in an email.

Madagascar’s Ministry of the Environment, Ecology and Forests, which was among the Malagasy ministries represented in Sochi, released a statement after the meeting indicating that it would take the new CITES recommendations into account in revising the plan for resubmission in 2019. The lead forestry official at the ministry did not respond to a request for comment for this article.

Banner image: Ankarana sportive lemur (Lepilemur ankaranensis). Image by Rhett A. Butler.

Correction 10/25/18: The original version of this story gave Frédéric Lesné’s title inaccurately. He is head of advocacy for Transparency International – Initiative Madagascar, not the director. We regret the error.

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