RECOMMENDATION
As this report focused on the activities of Asian logging companies, Greenpeace has limited its
recommendations to dealing with the expansion of these foreign logging companies into the Amazon
region. However, due to large-scale illegal logging activity already present in Brazil, it is important to
emphasise the urgent need to prioritise the overall enhancement capacity of IBAMA to monitor and
enforce its existing logging regulations. Greenpeace believes the Brazilian Government will need to
make considerable investments in staff, programme and legislative development before it is able to
adequately monitor and enforce logging in order to stop environmental and social damage. Such steps,
which are above and beyond the scope of this report, will be essential if forest destruction by an
expanded logging industry within the Brazilian Amazon are to be avoided.
COMPANY AUDITS Greenpeace recommends the immediate establishment of audits of logging companies to prevent the
worst players in the forestry sector having access to Brazil's forest resources. While establishing such
audits the Government should freeze approving any new requests for management plans by large
foreign companies.
The audit process outlined here could be incorporated so as to be prior to the existing system of forest
management plan approval in Brazil and/or incorporated in any new concession agreement system to
be developed by the government.
In relation to the company scrutiny system, Greenpeace recommends: Assessment of a company's
fitness to manage forestry resources should take the form of a pre-qualification review for all
companies wishing to take over logging licenses or operate in the forestry/timber forest product sector.
Companies wishing to move into these sectors should cooperate fully with independently appointed
scrutineers, who should consult with a widerange of sources including the company concerned,
governments, local communities affected by existing company operations, and humanitarian and
environmental NGOs to determine, inter alia:
The local company ownership and group corporate structure including cross shareholdings and voting
structures; the location of main decision-making power and those who control it should be identified.
Further determined should be: credit worthiness, accounting practices and auditing standards, group
forestry sector operations/activities including locations of logging and wood processing facilities,
histories, investments promised and implemented, whether concessions were obtained by open/closed
bidding, compliance with legislation and regulations, payment of taxes, records of financial or other
defaults, protests, complaints, court cases and their results, evidence produced of policies and
procedures in favour of sustainable forest management and their implementation, evidence produced of
no involvement in transfer pricing, contractual commitments made in relation to cultural and
environmental protection, environmental impact assessment (report preparation and implementation of
recommendations/ requirements), consultation processes with stockholders, health and social
provisions, labour relations, wage scales, training programmes. Details of other group activities should
also be presented including shipping, trading, marketing, other land projects.
A summary of the final report should be made available for public scrutiny and comment prior to the
acceptance of the report.
Conditionality should be attached to the concession/logging agreements and permits should be under
the ultimate control of the company which owns any such agreement or permit change. The
purchasers, while adopting the same management plan, must undergo the process of scrutiny before the
concession agreement is revalidated. All logging activity should be suspended during the scrutiny
process. The original owners of the company and those taking over the company should be made
responsible for informing the relevant government department of the proposed change of ownership of
any company holding a concession agreement.
Where existing operations are in contravention of forestry or other regulations the retraction of permits
should be undertaken and operations on the ground should be suspended. Resumption of operations
should not be undertaken prior to the settlement of any dispute and where such a decision finds against
the company logging/forestry permits if not permanently withdrawn should not be reissued until
independent scrutiny of the company concerned has been undertaken. This would make the scrutiny
process apply to companies already in possession of logging licenses with poor operating records.
Should scrutiny be seen to be desirable across the board and brought to all forestry activities, it could
be introduced as a conditionality on the issuing of permits for the upcoming annual production quota
for given areas outlined in the management plan.
The strategy behind the recommendation recognises that, for a number of reasons, implementation of
the existing forestry regulations and policy on the ground in remote areas of Brazil and many other
timber producing countries is ineffective at best and at worst non-existent. The idea therefore is to
restrict access to the forest resources to those companies which can demonstrate their commitment to
and practice of relatively more sustainable forestry methods at an administrative level. The strategy
should at least eliminate the worst players from the field of competition.
GOVERNMENT IMPACT ASSESSMENTS Greenpeace recommends that the Brazilian Federal government carries out its own environmental,
social and economic impact assessment of proposed logging concessions or management plans, in
which it reviews the opportunity costs of allowing logging, including environmental damage, potential
damage to extractive industries, water values, soil values, tourist and wildlife values etc.
These recommendations should not be considered in isolation. The straightening and implementation
of policy in other areas, such as property rights, environmental protection and forestry itself must also
be considered.
Outside the scrutiny process the control of existing illegal logging and the potentially massive increase
in the rate of deforestation by local companies, now operating under new management regimes, will
place a huge burden on the government departments responsible. Building the capacity of these
departments to implement forest policy and environmental, social and land rights legislation, and to
ensure the collection of rent from forestry activities, should be made a priority.