41242 Timber eft Prevention: Introduction to Security for Forest Managers William B. Magrath Richard L. Grandalski Gerald L. Stuckey Garry B. Vikanes Graham R. Wilkinson August 2007 Timber eft Prevention: Introduction to Security for Forest Managers William B. Magrath Richard L. Grandalski Gerald L. Stuckey Garry B. Vikanes Graham R. Wilkinson © August 2007 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, NW Washington, DC 20433 USA All rights reserved. This study was prepared by the Operations and Policy Unit of the East Asia and Pacific Region (EASOP). The World Bank's environ- ment and social development strategy for the Region provides the conceptual framework for setting priorities, strengthening the policy and institutional frameworks for sustainable development, and addressing key environmental and social development challenges through projects, programs, policy dialogue, nonlending services, and partnerships. The East Asia and Pacific Region Sustainable Development Discussion Paper series provides a forum for discussion on good practices and policy issues within the development community and with client countries. Suggested citation: William B. Magrath, Richard L. Grandalski, Gerald L. Stuckey, Garry B. Vikanes, and Graham R. Wilkinson. "Timber Theft Prevention: Introduction to Security for Forest Managers." East Asia and Pacific Region Sustainable Development Discussion Paper. East Asia and Pacific Region Sustainable Development Department, World Bank, Washington, DC. Cover photographs by: (counterclockwise from upper left) Richard A. Grandalski, William B. Magrath, Graham R. Wilkinson, William B. Magrath, and Forest Practices Authority, Tasmania. Cover design: James Cantrell and William B. Magrath. Prevention Theft Timber ii This volume is a product of the staff of The International Bank for Reconstruction and Development/The World Bank. 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Contents A C K N O W L E D G M E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi F O R E W O R D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii A B O U T T H E A U T H O R S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix A C R O N Y M S A N D A B B R E V I A T I O N S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x C H A P T E R S 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 William B. Magrath 2 Basic Concepts of Crime Prevention and Asset Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 William B. Magrath Models of Crime and Crime Prevention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Risks to Forest Assets: What Can Happen and How . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Security Planning Vocabulary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3 Forest Management Planning: Basis for Operations and Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Graham R. Wilkinson Forest Management Planning and Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Security Dimensions of Key Elements of Forest Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Consultation with Stakeholders and the Public. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Review and Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 4 Securing Forest Land and Resources: Technologies and Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Garry B. Vikanes Trespass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Controlling Trespass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Surveillance and Deterrence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 5 Securing Timber Transactions: Technologies and Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Gerald L. Stuckey and William B. Magrath Fraud in Timber Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 "Hardening" Timber Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Basic Elements of Timber Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Institutionalizing Administrative and Accounting Loss Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Annex 5.1 Sample Red Flags for Timber Fraud Detection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 6 Planning Timber Theft Prevention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Richard L. Grandalski Components of Security Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Contents of Timber Theft Prevention Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Case Studies of Timber Theft Prevention and Forest Security Planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Annex 6.1 Security Planning Issues by Forest Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Annex 6.2 Revenue Administration and Control Matrix: Stumpage Revenue . . . . . . . . . . . . . . . . . . . . . . . . . 83 7 Conclusions: Policies and Strategies to Promote Timber Theft Prevention . . . . . . . . . . . . . . . . . . . . . . . . . . 87 William B. Magrath Prevention Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Theft Public Policies to Support Forest Security Awareness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Forest and Wood-based Industry's Role in Timber Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Timber Policy and Operational Research for Timber Theft Prevention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Development Assistance to Support Timber Theft Prevention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 iv A P P E N D I X E S 1 Timber and Timberland Security Checklist. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 2 Recommended Readings and Websites by Topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 3 Participants List. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Boxes 3.1 Forest management terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 3.2 Land ownership and boundaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 4.1 Layers of protection: Onion skin theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 4.2 Signage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 4.3 Firearms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 4.4 Examples of checkpoints. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 5.1 Documentation and reconciliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 5.2 Security implications of types of purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 5.3 Kiting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Figures 2.1 Three elements of crime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2 Crime triangle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.3 Risk exposure pyramid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.4 Intelligence Cycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.1 Simple model of forest management planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.2 Five components of a forest management system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 3.3 Landscape mosaic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.1 Improper felling due to poor surveying skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 4.2 Paint-marked boundary trees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 4.3 Chain gate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.4 Locked gate with stop sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 4.5 Vehicle barriers of forest byproducts as gate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 4.6 Vehicle barriers of forest byproducts at each end of gate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 4.7 Satellite images of forests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 4.8 Railway track trespass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 4.9 Port facility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 4.10 Airport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 4.11 Social fencing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 5.1 Fraud triangle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 5.2 Low-cost covert camera system with lens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 5.3 Commercial log labels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 5.4 Log truck hauling logs to mill, Laos. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 5.5 Log yard with scaler. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Contents 5.6 Scale house equipped with cameras. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 v 5.7 Checkpoint gate, Laos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 5.8 Hammer brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 5.9 Loader sheet to record time, date, and other identifying data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 5.10 Log trailer with ID number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 5.11 Three-part load tag ticket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 5.12 Scaling unusual log length using rule tape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 5.13 Scale house with weigh scale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 5.14 Concurrent video recording from four scale-house cameras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 5.15 Cant of logs numbered and stamped. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 5.16 Highly fluorescent orange paint on load. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 5.17 Highly visible tag stapled to load . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 5.18 Example of settlement or payment sheet with tag attached. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 6.1 Improper conduct to avoid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 6.2 Virachey National Park, Cambodia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 6.3 Identification of timber theft threats and risks in Dragon's Tail, Virachey National Park, Cambodia . . . . . . 77 Tables 2.1 Examples of situational crime prevention techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2 Causes of selected loss-inducing events in forestry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.1 Summary of the key links between the elements of forest management planning and forest security . . . . . . 28 Acknowledgments his report grew out of the experiences of the T table at the end of chapter 3. Merly M. Khouw carefully authors and their collective opportunities to reviewed an early draft of chapter 5, and Casey Canonge work on forest law enforcement problems in over was very helpful in the design of the same chapter. 15 developed and developing countries. In preparing the The authors are very grateful to Edmund McGarrell, report, the authors benefited from three days of inten- Ph.D., Michigan State University School of Criminal sive discussions with a group of forest and protected Justice; Dennis Dykstra, Ph.D., P.E. of the Pacific areas managers and advisers from Australia, Cambodia, Northwest Research Station, United States Forest Ser- India, Indonesia, Malaysia, Mexico, and the Philippines. vice; and Idah Z. Pswarayi-Riddihough, Rural Develop- The workshop was held in Cebu City, the Philippines, ment, Natural Resources, and Environment (EASRE), in November 2005. The participants are listed in appen- World Bank, who carefully reviewed the final draft of dix 3. Their strong support, instant collegiality, and will- the report, adding to its value. ingness to share their hard-won lessons of experience Alicia Hetzner documented the workshop and contributed immeasurably to this work. edited the report, going through countless drafts and The work was financed by a generous grant from revisions with good humor and grace. Evelyn Laguidao, the World Bank-Netherlands Partnership Program Teri Nachazel, and Ethel Yu were of great help in organ- (BNPP). izing the Cebu Workshop and provided other support The authors would like to thank particularly Klaus along the way. Under the supervision of Ed Scott of Schmitt, Michael Dyson, and Pramod Krishnan as well Circle Graphics, Christopher Phillips prepared the as Arvind Jha for especially thought-provoking sugges- manuscript for publication. tions and contributions from which we have drawn Any errors, omissions, or misinterpretations are liberally. Jay Blakeney contributed to the summary those of the authors. Foreword his volume is part of a series of discussion papers T almost any of the internationally accepted forest man- intended to foster debate on public policy issues agement certification systems. regarding sustainable development. The views The report, prepared by a multidisciplinary team of expressed herein are those of the authors and do not foresters, economists, and criminal justice and security represent the World Bank. specialists, advocates a deliberate and analytic effort by Illegal logging costs the developing world an esti- forest managers to identify and target the most serious mated $5 billion per year in lost public revenues. It also threats and to address the most vulnerable parts of significantly contributes to the deforestation and degra- forest supply chains. It urges forest agencies and enter- dation of some 10 million hectares annually. Surpris- prises to build ethical organizations and to address the ingly, little attention has been paid to the need to sources of corrupt and fraudulent behavior internally. mobilize those most closely involved in forest resource This report highlights the need for commercially management--foresters and forest enterprises--to sound, transparent, and predictable land and timber actively prevent timber theft. There is a pressing need allocation and sales; and for audits, oversight, and for action by everyone involved in forestry and the accountability at all levels. Most of all, it puts the obli- wood industry to be part of a unified solution to illegal gation for diligent efforts by responsible resource managers logging. The World Bank has joined other agencies and at the forefront of the forest law enforcement and gov- groups in calling for commercial banks, wood traders, ernance challenge. customs organizations, consumers, and others outside The report provides examples of many specific mea- the forestry sector in both developed and developing sures and general planning approaches that are directly countries to join in efforts to strengthen forest law applicable to developing country forestry. Not all ideas enforcement and governance. discussed here will be applicable to every forestry oper- As this report makes clear, the susceptibility of forests ation. However, the concepts and motivation are rele- to illegal logging is a predictable consequence of the vant to any forest manager or policy-maker responsible poor quality of forest management planning and prac- for resources threatened by crime. tice around the world. The report's discussion of the Of special interest to the World Bank are the public links between good forest management and security policy and investment implications of the proactive pro- against illegal logging highlights the need for attention tection approach advocated by the authors. Some parts of and effort to focus on the basics of forest planning, a theft prevention approach can be implemented with- resource assessment, and consultation. Focusing on out adding to the costs of sustainable forest manage- these three practices is essential­­whether the man- ment. However, several of the proposed measures will agement objective for a particular forest is commercial involve new costs and require additional sources of timber production, biodiversity conservation, forest finance. In addition, widespread adoption of the inno- recreation, or watershed management. Therefore, the vations urged by the authors will require political will, approach to security that the authors advocate is entirely supportive public forest policies, public and private consistent with the kinds of measures demanded by capacity building, and technical assistance. Developing country governments are encouraged to look for devel- Bank--and private investment to strengthen the pro- opment assistance--including assistance by the World tection of their forests and natural wealth. C. Delvoie, Director Sustainable Development Department East Asia and Pacific Prevention Theft Timber viii About the Authors William B. Magrath is a lead natural resource economist olina, a licensed certified fraud examiner, and a South in the East Asia and the Pacific Sustainable Develop- Carolina state constable. ment Department. He has managed World Bank lend- ing and analytic work on forestry in Belarus, Cambodia, Garry B. Vikanes is director of Strategic Development at and Lao PDR, and coordinates the World Bank's work 3Si Risk Strategies, Inc., Vancouver, British Columbia, in forestry and forest law enforcement and governance Canada. A licensed security consultant, he is also a vet- in the East Asia and Pacific Region. eran staff sergeant of the Technical Security Directorate of the Royal Canadian Mounted Police and has over Richard L. Grandalski is a consulting forest law enforce- 35 years of security-related expertise. Possessing ex- ment specialist. He concluded a career of over 30 years tensive expertise in security consulting, he provides with the United States Forest Service in which he served security management services throughout British in positions from forest fire smoke jumper to forest law Columbia, the Yukon, and internationally on threat enforcement; special agent, with international assign- risk assessments and security planning for many indus- ments to Brazil and Greece; and assistant director of the tries, including forestry and major international athletic Service's Law Enforcement Division. His recent work competitions. with the World Bank and the United Nations Food and Agriculture Organization (FAO) has included assign- Graham R. Wilkinson is chief forest practices officer, ments in Albania, Armenia, Cambodia, Indonesia, Lao Tasmania, Australia with responsibility for administer- PDR, Thailand, and Vietnam. ing the State's forest practices system. He is a specialist in forest practices with extensive national and interna- Gerald L. Stuckey is forestry security consultant and a tional experience and has over 30 years of experience principal in TimberWatch LLC. He has over 40 years of covering forest operations, research, policy, and reg- government, private, and industry experience as a pro- ulation. He advises the United Nations Food and curement forester and timber sales manager. He also Agriculture Organization, many national governments, was timber security manager for Meadwestvaco Corp., and the World Bank on reduced-impact logging, the one of the world's largest integrated forest products implementation and monitoring of codes of harvesting companies. He is a registered forester in South Car- practice, and other forestry concerns. Acronyms and Abbreviations AAC Annual allowable cut FMU Forest management unit ALPR Automatic license plate recognition FMV Fair market value APRIL Asia Pacific Resources International FRA Forest Resources Association, Inc. Holdings Ltd. FTN Forest and trade network BMP Best management practices ft Foot, feet CCTV Closed circuit television GFTN Global Forest and Trade Network CEPI Confederation of European Paper GIS Geographic information system Industries GPS Geographic positioning system CFE Certified Fraud Examiners HPN Humanitarian Practice Network CFI Continuous Forestry Inventory ICDP Integrated Conservation and CCG Conservation International Center Development Project for Conservation and Government IFM Independent forest monitoring cm Centimeter in Inch, inches CoC Chain of custody IPM Integrated pest management DFID Department for International ITTO International Tropical Timber Development Organization EDP Eco-Development Project (India) IVS Intelligent video surveillance ETM Enhanced Thematic Mapper LAN Local area network FAO United Nations Food and m Meter(s) Agriculture Organization M&E Monitoring and evaluation FIN Forest Integrity Network mbf Thousand board feet FIU Financial intelligence unit MINEF Ministère des Eaux et Forêts de Côte FLEG Forest Law Enforcement and d'Ivoire Governance (regional) MIS Management information system FLEGT Forest Law Enforcement, Governance and Trade n.d. No date (European Union process) NTFP Nontimber forest products FMP Forest management plan ODA Official development assistance OH&S Occupational health and safety SBFEP Small Business Forest Enterprise PA Protected area Program (British Columbia, Canada) PDA Personal digital assistant sq Square PDR People's Democratic Republic (Lao) TFT Tropical Forest Trust PFE Permanent forest estate UNODC` United Nations Office on Drugs PIDS Perimeter intrusion-detection and Crime systems VRM Vehicle registration mark POA Protection of Assets WAN Wide area network PROFOR/FIN Program on Forestry/Forest Integrity Network WOC Wood origin control PTZ Pan tilt zoom camera Abbreviations and Acronyms xi 61 Introduction William B. Magrath llegal logging is widely recognized as a serious threat I experience in many settings shows that proactive crime to the sustainability and successful management of prevention and asset protection efforts have demon- forest resources worldwide.1 The problem has many strated value and that practical and accessible options layers and dimensions, and multiple responses from exist relevant to almost all forestry settings. many stakeholders are needed. Discussions of forest law The widespread adoption of asset security approaches enforcement and governance have given attention to a in both the private and public sectors attests to their value wide variety of approaches and interventions. These as perceived by boards of directors, senior executives, range from efforts to reduce incentives for illegal log- managers, investors, and policymakers. These approaches ging by limiting the marketability of illegal material in are appreciated by commercial entities due to their im- international timber markets,2 to pursuit of diverse legal pacts on profits. Increased emphasis on crime prevention and prosecutorial strategies such as anti-money launder- is justified on other grounds as well. ing against people engaged and profiting from illegal logging (Setiano and Husein 2005), to clarification of 1. There are important complementarities between definitions of "legality" and many other possible and forest law enforcement and sustainable forest potentially valuable avenues of assault. management agendas. As made clear in this report, However, relatively little attention has been given to the kinds of management planning and practices the scope for action by field-level resource managers to called for by virtually every analysis of the require- reduce opportunities for illegal logging and to proactively ments of sustainable forest management are con- prevent timber theft before it occurs. This lack of at- sistent with a timber theft prevention approach.3 tention is not completely surprising in view of the 2. Even if they do not directly reduce crime, many poor quality of most forest resource management and prevention measures can generate information, the well known institutional capacity and human re- intelligence, and evidence that can support crim- source limitations in developing countries. Nevertheless, inal prosecutions and other accountability mech- anisms. These can become part of a sustainable, long-term, and integrated approach to forest law 1For general discussions of the global illegal logging problem, see enforcement. World Bank 2006 or Tacconi and others 2002. Seneca Creek Associ- 3. The attention paid to asset protection provides a ates and Wood Resources International 2004 offer the most author- good indication of policy-makers and managers' itative examination of the economic impact of illegal logging. FAO commitment to due diligence. While everyone in- 2005 discusses a range of approaches to promote compliance with volved in forestry should take some measure of forest laws. Colchester and others 2005 critique forest law enforce- ment from a social justice perspective. responsibility, managers in particular should be 2 For example, the European Union Forest Law Enforcement, Governance and Trade (FLEGT) Initiative. See http://www.illegal- logging.info/ 3For example, ITTO 1998 and 2006; FAO 2007. accountable to plan and implement practical and (2) ensuring the integrity of timber transactions. Control- realistic risk mitigation measures. ling trespass addresses the overall problem of prevent- 4. Pursuit of even the most basic crime prevention ing unplanned, uncontrolled, and illegal activities in the measures sends a message. It tells potential thieves, management area. Controlling trespass encompasses employees considering fraud and embezzlement, the problems of securing the area from undesired access and local communities that managers are alert to and illicit felling of trees. It also includes preventing the risks of crime and are committed to protect the fellings in excess of planned volumes and outside the resources for which they are responsible. Con- defined cutting limits and procedures set by the man- versely, indifference and inaction amount to an agement and silvicultural plan. invitation to criminals. Controlling trespass is a security function that cuts across all forest types and forest management systems. For all their attractiveness, asset protection and secu- It includes not only commercial timber production rity approaches are not panaceas. Perfect security is but also parks and protected areas in which logging impossible, and protection against crime can be a costly is prohibited or strictly limited. Controlling trespass activity that must compete with other resource uses. is oriented primarily toward preventing activities by Moreover, criminals adapt, evade, and avoid. Obstacles persons not properly associated with approved oper- raised in one forest can divert criminals to other areas, or ations. It also covers activities that may be undertaken can lead them to intensify their effort and resort to new by management staff outside their official mandates criminal methods or even to greater reliance on violence and responsibilities. Controlling trespass and associated and intimidation. These limitations do not mean that illegal logging involves measures that address access Prevention crime prevention can be ignored. Instead, they reinforce to and monitor activities in the forest to ensure com- Theft the necessity for ongoing vigilance and creativity. pliance with the management plan. Hence, timberland This report explores the prevention of illegal log- security essentially is an extension and application of Timber ging from the perspective of the forest management the management plan. However, attention to asset 2 unit (FMU) manager and planner. It introduces con- security will emphasize the identification and ongoing cepts, tools, and practices that are widely used in many mitigation of threats and vulnerabilities and the need diverse industries and settings to prevent losses of valu- to respond to the detection of deviations from planned able assets from crime, accident, negligence, and other activities. causes. The report puts timber and timberland security Protecting the integrity of timber transactions is of in the context of routine overall forest management special concern for areas managed for commercial pro- operational planning and control. duction. In controlling the corruption of timber trans- The report also introduces specific security tools and actions, two challenges face forest managers. The first is procedures commonly used in public and industrial to build and maintain honest and ethical workplaces forest management. Of particular concern to forestry and operations. The second is to establish and maintain are its special social and institutional dimensions. In robust procedures for the conduct of timber transac- almost all countries, even on "private" lands, forestry is tions. These challenges call for efforts across all aspects a "public" undertaking. Public and social expectations of ensuring that timber harvested according to a pre- concerning access to forest areas; the reality of human scribed plan contributes its full value to the timber occupancy of forest lands (often by some of the poorest business. "Hardening" transactions encompasses the and most vulnerable people); the layering of timber, prevention and deterrence of fraud in timber scaling wildlife, environmental, and other values in forests; and and grading, under-invoicing, timber smuggling, and the diverse roles of public and private agencies and other fraudulent schemes. Securing timber transactions actors in forestry result in far greater complexity in for- involves well-thought-out and rigorously maintained est security than in security in many other venues. inventory controls, documentation, and record-keeping The first two chapters explore general security concepts systems; supervision of operations; contract provisions; and key aspects of forest management planning, respec- and other controls and audits. Securing transactions tively. The report then focuses on two major subsets of can include timber tracking and chain of custody (CoC) security concern: (1) preventing forest land trespass and systems with sophisticated technologies, such as optical bar coding, or simpler traditional methods. Many of The main points of this report are: these systems also contribute directly to efficiency and profitability. 1. Theft is, to a point, predictable and therefore, to a The final chapters of the report discuss forest secu- point, preventable. rity plans and planning. These chapters provide recom- 2. Responsibility for timber theft prevention begins mendations for forest managers, forest policy-makers with the FMU organization and carries manage- and international forestry development planners on ment, operational, and training implications. general and specific ways to advance forest security plan- 3. Effort and realism are needed to link anticipated ning and practice. risks with mitigation measures. This report does not aim to make concrete recom- 4. Management decisions to bear certain risks should mendations that would be directly applicable to all forest be recognized and documented. management situations. It does not intend to suggest that 5. Resource security should be integral throughout preventive measures at the disposal of forest managers planning and operations. can eliminate illegal logging and other forest crimes. 6. Timber theft is a concern not only for production Rather, this report argues that theft prevention needs areas but also for parks and protected areas. Tim- must be given greater prominence in discussions of ber theft overlaps with other forest protection con- forest law enforcement and governance. cerns, including arson, wildlife, and encroachment. Introduction 3 2 Basic Concepts of Crime Prevention and Asset Security William B. Magrath aluable assets are subject to many risks, includ- V As mentioned above, one of the main currents of ing exposure to theft. Illegal logging and timber thought in asset protection is the need to integrate secu- theft share many basic similarities with crimes rity considerations in overall business planning and that affect other industries and economic activities. The operations. This necessity is pursued in the next chapter, specialized fields of asset protection and industrial secu- which explores specific linkages between forest manage- rity have developed in response to these problems. These ment planning and timber security. Later (chapter 6), the fields provide useful and powerful ideas and tools that report returns to the asset protection approach. can help respond to many different risks and hazards. Their concepts are used widely in manufacturing, retail- Models of Crime and Crime Prevention ing, transportation, and government but only recently have begun to be adapted for use in forestry.1 Forest law enforcement programs are made up of meas- Asset protection and industrial security have their ures to prevent, detect, and suppress crime.2 Criminolo- origins in law, criminology, economics, sociology, and gists define crime prevention simply: it is the disruption engineering. Their unifying theme is that risks to assets of the mechanisms that cause crime. Among the three are predictable and therefore, at least to a point, pre- most important groups of theories of crime and associ- ventable. From this starting point, in various ways and ated methods of prevention are: with different emphases, security professionals encour- age owners and managers to anticipate and mitigate 1. Structural views risks and to explicitly plan and document security sys- 2. Psychological views tems as integral parts their routine business. 3. Circumstance or situational views. This chapter introduces the key theft prevention concepts most relevant to the forest unit manager. It Structural theories of crime revolve around issues begins with theories of the causes of crime and their related to the structure of society and the functioning implications for crime prevention. It then presents of social relationships. These theories emphasize issues a classification of loss-inducing events that ranks crime, such as class conflict, inequities in wealth and oppor- specifically theft, among other potential sources of tunity, racial and ethnic tensions, and poverty as con- damage. The chapter concludes with a review of some tributors to crime. Since these theories view crime as of the specific vocabulary of asset protection and indus- arising from society, they generally lead to suggestions trial security. that social change is needed to prevent crime. On the other hand, psychological approaches focus on the behavior of the individual criminal. These 1 For an excellent discussion of asset security issues in agriculture and farming, see National Community Crime Prevention Pro- gramme 2004. For detailed treatments of risk in forest administra- 2This discussion draws heavily on Pease 1997. See also Hughes tions, see Forest Service of British Colombia 1998 and 1999. 1998 and National Crime Prevention Institute 2001. Crime prevention is the disruption of the mechanisms that cause crime approaches emphasize deficiencies and defects in indi- Table 2.1 Examples of situational crime vidual personalities, mental capacities, and weaknesses prevention techniques in moral and ethical judgment as among the causes of Increasing Reducing crime. Psychological theories of crime tend to suggest effort Increasing risks reward changing the individual to prevent crime. This approach can involve training, counseling, "reform," punishment, Target hardening Entry/exit screening Target removal and continuing incarceration to keep criminals away Access control Formal surveillance Property identification from crime. Deflecting Employee Removing While structural and psychological theories of crime offenders surveillance inducements may explain some crimes, neither can explain nor help Controlling means Natural surveillance Rule-setting prevent all crimes. In any case, neither provides much Based on Pease 1997. guidance or advice to the forest manager. In contrast, circumstantial or situational theories of Security crime generally posit that crime is opportunistic and Specialists distinguish deterrence from prevention based on whether the crime disruption mechanism oper- can occur when the environment permits. Much of the Asset ates through the prospective criminal's perception of standard economic analysis of crime is an extension of and risks and reward or effort. Effectively, deterrence can a situational perspective on crime, sometimes referred be seen as one form of prevention. This distinction is to as the "rational choice theory."3 It assumes that many, explored in somewhat greater detail in chapter 5 regard- Prevention if not most, people will commit crimes based on the ing fraud in timber transactions. incentives that they encounter. It then develops the Crime Increasing risks includes measures that affect the more specific notion that crime arises when the expected of potential criminal's perception of the probability of benefits of criminal activity exceed the costs. The eco- being detected, apprehended, and punished. Percep- nomic analysis includes the value of profits and penalties Concepts tions are the critical dimension; risk-increasing meas- adjusted by the probabilities of detection, conviction, ures involve important psychological and information Basic and punishment. considerations. For example, perceptions can be affected Situational crime prevention has been defined as: 5 directly to immediately discourage crime by employ- "a pre-emptive approach that relies not on improving ing conspicuous security patrols. Perceptions also can society or its institutions, but simply on reducing be shaped to create a belief that, over a longer period, opportunities for crime" (Clarke 1992). While situa- criminal activity will be pursued and effectively pun- tional theories of crime and crime prevention also are ished. Deployment of cameras and other surveillance limited and incomplete, they are of particular interest systems, and their use as sources of evidence in court because they propose proactive measures (table 2.1). and other proceedings, can create recognition that a As discussed later, many of the generic crime preven- business or property is a risky target. Cameras also can tion techniques listed in table 2.1 can be concretely help to prevent crime or deflect criminal activity to other applied in forestry, and many are within the scope of targets. Boundary marks, signs, and notices are other control of forest managers. Measures to increase effort, potentially risk-increasing measures, provided that the which include target hardening and access control, perception is created and maintained that restrictions directly raise the costs of crime by making it physically are meaningful and will be pursued (chapter 4). more difficult. Examples include stronger gates and Reducing the reward of forest crime can be more dif- locks and higher fences. These measures could include ficult, at least by managers at the FMU level. Recent pol- even more exacting and demanding processes that make icy debates promote consumer actions that would reduce crime more costly and difficult. the marketability of stolen or illegal wood. However, an individual FMU manager can do relatively little to reduce the potential benefit of timber theft. Some forms of log 3The classic reference is Becker 1968, 169­217. See also Felson marking may have potential (chapter 5). and Clarke 1998; Cornish and Clarke 1986; and Welsh 1986 in Cor- nish and Clarke, eds. 1986. Some of these theories have been applied Means, Motive, and Opportunity to forest law enforcement issues and lead to suggestions of greater emphasis on law enforcement and punitive sanctions. See, for exam- A related and complementary formulation of the sit- ple, Akella and Cannon 2004. uational view of the causes of crime is that of "means, Criminals motivated by greed, need, aggression, or other desires employ the tools (means) available to them to exploit the vulnerabilities (opportunities) of their prospective victims motive, and opportunity" as forming the elements of in the forestry sector (Gillis and Repetto 1988; Barr a crime: 2001). These authors identify the unintended role of policies such as subsidies to industry, trade protection, Criminals motivated by greed, need, aggression, or and deficiencies in the lending practices of banks and other desires employ the tools (means) available to other financial institutions to excessive (often illegal) them to exploit the vulnerabilities (opportunities) of logging and land development. In other words, it already their prospective victims. is widely recognized that legitimate investors, encour- aged by public policies, distribute the instruments of Figure 2.1 shows crime as the result of the simultaneous criminal behavior! occurrence of means, motive, and opportunity. Applied Forest crime is not conducted merely with chain to policy formulation to prevent crime, the task can be saws. Moving up the criminal food chain reveals increas- thought of as identifying and implementing measures ingly sophisticated and much less accessible means of that reduce the "size" of each element and "pull" them criminal activity. At the acme of criminal enterprises apart, thereby reducing the area of overlap. involved in large-scale illegal logging are techniques of For each factor contributing to the emergence of money laundering to conceal the illicit origins of income, crime, this model leads to recognition of both forestry- tax evasion, and other forms of "white collar" crime. specific and more general social, cultural, and economic These techniques are largely beyond the scope of this factors: review but can have important connections to defi- Means. Forest crime is perpetrated by a wide range ciencies in the management of timber transactions of criminals using an equally wide variety of tools. For (chapter 5). example, the mechanisms and tools of timber theft Motive. People pursue many different interests under Prevention and illegal land clearance are exactly the same as those the influence of many incentives and objectives. Crim- employed in legal logging and land clearance opera- Theft inal behavior in forestry is motivated primarily by nar- tions. The chain saws, trucks, barges, ships, sawmills, row economic objectives. It also can be motivated by Timber and other equipment employed illegally are intrinsically politics, envy, or other causes that are generally beyond indistinguishable from legitimate forestry tools. This 6 the scope of this review.4 equipment is widely used and frequently is owned and Need and greed probably are the economic drivers of used by relatively small businesses and even poor indi- crime of most interest in controlling illegal logging. viduals who are not priority targets for law enforcement. Ethically, it is important to distinguish crimes based on It is worth noting that the problem of excess effort poverty from those perpetrated by the rich and power- in logging is linked to thinking on perverse incentives ful. Clearly, poverty contributes to forest crimes, espe- cially in developing countries. Under the legal systems of many countries, certain instances of traditional slash and burn agriculture are considered arson. Much of the labor used directly in illegal logging is supplied by poor people. Poor people have few, and sometimes no, alter- Means natives to such crimes. In fact, they may be unaware that their activities are considered crimes under the law. Moreover, they often are being exploited for their sub- sistence by rich and powerful patrons. The relationship of poverty to illegal logging raises many considerations linked to the structural theories of the causes of crime mentioned above. It suggests many questions regarding the formulation of public policies Motive Opportunity in forestry and the conduct of forest law enforcement, especially crime suppression operations. In particular, 4In Canada and the United States, ecoterrorism is one of the pri- mary forest law enforcement problems but certainly is not econom- Figure 2.1 Three elements of crime. ically motivated in the usual sense. the formal criminalization of poor people's pursuit of a meager livelihood should call for a reconsideration of the nature and intent of the laws they may be breaking. The idea that the costs of stricter law enforcement would fall disproportionately on the poor surely would be objectionable to most people. Furthermore, in this case, stricter enforcement probably would prove unsuccessful Handler Manager (Colchester 2005). Greed as a cause of crime does not raise the same Offender Place ethical dilemmas. Economically speaking, crime pays when the combined expected benefits exceed the expected costs. In forestry crime, an extraordinarily high benefit-cost ratio is common. In four case studies, Target/victim Akella and Cannon (2004) show conservatively esti- Security mated benefit-cost ratios for illegal activity that ranged Asset Guardian from 11.6:1 to 14,214:1! They argue that the nearly and infinitesimal probabilities of penalty are a compelling Figure 2.2 Crime triangle. Source: http://www. case for greater enforcement. This reality clearly pro- popcenter.org/default.cfm vides the greedy with a strong motivation to engage in Prevention illegal logging. (1) likely offenders and (2) suitable targets come together Crime Opportunity. Forest resources in developing coun- in (3) time and space, in the absence of, respectively, of tries are at enormous risk for crime in two ways: (1) capable guardians, (2) handlers, and (3) managers 1. These countries' generally higher levels of crime, (figure 2.2). Offenders sometimes can be controlled Concepts corruption, and disregard for the rule of law put by other people, known as handlers. Targets and vic- Basic people and their assets generally at greater risk tims sometimes can be protected by others known as 7 (UNODC 2005). guardians. Places usually are controlled by someone: 2. Many developing countries' level of technical such individuals are known as managers. Thus, crime practice in forestry generally is very weak. Lack prevention requires understanding (1) how offenders of oversight, control, and other routine practices and their targets/victims come together in places; and of standard forest management create specific (2) how these offenders, targets/victims, and places are vulnerabilities. or are not effectively controlled. Less than 4 percent of the world's tropical forests Risks to Forest Assets: What Can are covered by reasonable forest management plans. Happen and How Less than 1 percent of forest management in the trop- ics is independently certified as sustainable. In prac- Damage to forests from human activities arises from tice, the lack of inventory, planning, mapping, harvest three sources: negligence, accident, or crime. The pyramid determination, formal setting of silvicultural prescrip- in figure 2.3 illustrates how resource managers could tions, and other classic forest management discipline consider these three causes in planning protection and leaves forest resources baldly exposed to criminal activ- integrating security measures in routine operations. ity. These weaknesses present criminals with nearly Negligence, however, is probably a more serious con- unrestricted opportunities. The problem of opportunity tributor to a lack of security in forestry. In contrast to posed by weak management is the core of this report and other industrial sectors, forestry operations, especially is taken up in detail in the next three chapters. in developing countries, pay very limited attention to The crime triangle provides an analogous way of protecting resources from crime (chapter 1). In the thinking about crime.5 Crime or disorder results when face of today's globally high level of forest crime, pru- dence requires forest policy-makers and managers to 5 This section follows the discussion available at http://www. take special and explicit steps to protect the assets for popcenter.org/default.cfm which they are responsible. As discussed in later chapters, criminal. It poses a situation in which the aims of the criminal conflict directly with the legitimate aims of the owner and manager and in which the criminal takes the initiative to exploit the vulnerabilities and Crime exposure of the asset. Table 2.2 illustrates how selected damaging events common in forestry can result from accident, negligence, or crime. Harvesting outside of sanctioned boundaries Accident is one frequent example of damage to forests com- monly labeled as illegal logging. Apart from any legal considerations, logging outside approved areas can cause damage for a number of reasons. Boundaries Negligence may have been set as yield regulation devices to pro- tect a fragile landscape feature (stream, mineral lick, Figure 2.3 Risk exposure pyramid. archaeological resource). It also may be that revenue collection cannot be guaranteed for harvests outside the approved block, or that the block boundaries may these measures should be selected and coordinated be part of an entirely different property. In remote, according to a written plan that is integrated in the rugged forest terrain, it is easy to understand how acci- overall forest management program. dental errors in map reading, surveying, or boundary- Prevention In the context of figure 2.3, the examples of the contri- marker interpretation can take harvesting crews outside bution of negligence to forest asset insecurity can include approved perimeters. These kinds of errors are all the Theft the failure of staff to follow proce- dures for decommissioning roads, Table 2.2 Causes of selected loss-inducing events in forestry Timber locking gates, or reporting unau- Damaging event Cause 8 thorized access. Negligence also can include inadequately funding Cutting outside authorized area Accident: Survey error, equipment basic protection activities or fail- malfunction Negligence: Acceptance of incorrect maps, ing to prepare a protection plan lack of supervision in the first place. At the level of Crime: Intentional trespass forest policy, not establishing rea- Cutting in excess of approved amount Accident: Scaling error, collateral damage sonable requirements for protec- (prohibited species, under/over Negligence: Lack of supervision, incomplete/ diameter limit, beyond retention incorrect specifications tion planning by concessionaires standards) Crime: Intentional theft and contractors and not requir- Noncompliance with Code of Logging Accident: Human error ing that such requirements be Practice leading to erosion, stream Negligence: Lack of training or supervision, satisfied, is simply negligent. sedimentation, and damage to inappropriate machinery Accidents happen in even the forest values Crime: Intentional neglect of code best-managed operations. None- Nonpayment of royalties, fees, taxes Accident: Loss of documents, misdirection of funds theless, a large part of standard Negligence: Lax supervision and record- training, supervision, and plan- keeping ning at the FMU level is, or should Crime: Intentional fraud be, directed at reducing hazards to Wildlife reduction Accident: Unilateral disturbance of habitat worker safety and physical losses Negligence: Failure to designate protected areas of resources. Crime: Intentional hunting Crime is at the apex of the risk- Fire Accident: Fuel spills, recklessness exposure pyramid. Crime is the Negligence: Failure to control land clearance most difficult contributor to asset fires insecurity to fight. Crime involves Crime: Intentional arson deliberate effort and choice by the Source: Authors. The quality of the authorized logging program determines the ease with which potential criminals can operate more plausible in developing country forestry, for which between actual and estimated inventories. Thus, these maps may not be available, let alone in more sophisti- reports can be indicators of theft or other problems. For cated surveying tools. example, computerized log tracking and chain of cus- However, negligence of various sorts, such as know- tody (CoC) systems can identify multiple uses of what ingly allowing logging to proceed on the basis of in- are intended to be unique or single-use log identifiers adequate or incorrect maps and surveys, or neglectful or and can signal the need for follow-up investigation of lax supervision, also contributes to damaging logging. possible abuse (chapter 5). Specialized systems for gen- Finally, cutting outside approved boundaries may erating red flags also include employee or public hotlines be a deliberate criminal act. It may be done by agents or complaint mechanisms made available for reporting of the authorized logging contractor with or without complaints and suspicions. his/her knowledge and consent. It also may be done by Red flags are indicators that are best formulated based unrelated parties enabled by access or by the opportu- on intimate knowledge of an enterprise's normal prac- nity to conceal their activities among those of legiti- tices. To be routinely useful, a system of red flags needs Security mate loggers. to be established around clear definition and under- As subsequent chapters suggest, the overall quality standing of the kinds of transactions and events that Asset of the authorized logging program, including its plan- characterize proper and legitimate business activity. and ning, supervision, and execution, will go a long way to Identification of risks and irregularities is difficult or determine the ease with which potential criminals can impossible when business transactions are not stan- Prevention operate. dardized and are not recorded through standardized Similar distinctions can be made in the causes of other processes, forms, and systems that are subject to routine Crime loss-producing events such as excessive harvesting, rev- review and special audits. Appendix 1 provides a sam- of enue losses, fire, and harm to wildlife populations. A pling of red flag indicators that can be used as a basis for theme advanced by this report is that FMU managers developing enterprise specific indicators. Concepts ought to be expected to anticipate, avoid, and mitigate Basic loss-incurring or damaging events from all three sources: Intelligence Cycle accident, negligence, and crime. Red flags need to be acted on immediately and fol- 9 lowed up rigorously. Not all red flags will signal gen- uine security problems or risks, and some may not be Security Planning Vocabulary immediately actionable but could provide informa- The specialized vocabulary of asset protection and indus- tion that will be valuable in the future. In employing a trial security is quite accessible and nontechnical. Its system of red flags or other indicators, the concept of comprehensibility is potentially one of its most impor- the intelligence cycle can be useful. To be useful in pro- tant contributions to the problems of illegal logging and tecting resources from theft or other attacks, data and forest law enforcement. information on potential and actual threats must be purposely collected, analyzed, and applied. Figure 2.4 Red Flags illustrates the intelligence cycle, an iterative process A red flag is an indicator or warning sign that should that integrates surveillance results in resource protec- raise concern about the risk or possibility of theft or tion programs. fraud. A red flag does not definitively indicate theft, only that there is a significant possibility of a problem 1. Direction. Potential threats and vulnerabilities iden- that merits investigation and follow-up. Red flags need tified during FMU planning and from ongoing to be developed in connection with overall business and experience during implementation of the manage- management systems to provide managers and stake- ment program should be targeted for monitoring holders with confidence that security risks can be iden- and surveillance. tified and acted on as soon as possible after they arise. 2. Collection. Surveillance results from monitoring Some business procedures lend themselves easily to devices, guards, patrols, other staff, and other the generation of exception reports, which can serve as sources should be assembled and collected. red flags. Exception reports identify discrepancies, such 3. Evaluation. Collected information should be as differences between planned and actual deliveries or assessed to determine significance and validity. Threats are the groups and individuals who have the potential to commit crimes More serious internal threats are corrupt senior forestry officials Direction and staff involved in large financial transactions and reporting who can individually or with relatively few co- conspirators perpetrate large frauds and embezzlements. Chapter 5 pres- ents the fraud triangle to understand the factors that can contribute to Monitoring of activities within an FMU employees and others emerging as Dissemination should be deliberate and driven by Collection internal security threats. the management program and by External threats. Most of the con- accumulated experience that focuses effort on priority targets cern related to timberland security is directed at individuals and groups not formally connected with forest management. External threats can include local residents, neighboring property owners and land managers (who may or may not be legitimately Analysis Evaluation in the forestry business on their Prevention own properties), and individuals or businesses based in relatively distant Theft Figure 2.4 Intelligence Cycle places. Any of these individuals or businesses may have powerful (and Timber 4. Analysis. Information should be analyzed and illicit) connections to government authorities, including 10 reports prepared (for example, to law enforcement the police or military; or to other criminal, and sometimes agencies) recommending responses such as filing potentially violent, groups and enterprises. Transnational charges or "target hardening." criminal organizations increasingly are being recognized 5. Dissemination. Information ought to be delivered for their involvement in illegal logging. in usable form to decision-makers such as owners, Local residents individually may constitute a small managers, law enforcement, or others who can risk. However, as a group, local residents often have direct actions or responses, including redirection traditional customary rights, sometimes formalized in of intelligence collection. modern laws, to access forest areas for subsistence or other uses of timber and nontimber forest products Threats (NTFPs). Dealings with local communities in relation Threats to asset security can be defined as the groups and to timber theft involve many complexities and oppor- individuals who have the potential to commit crimes. The tunities, making advance recognition of their potential specific persons or groups posing threats may be known impact on the forest especially important (chapter 6). or unknown, but generally can be categorized to be use- Exploitation of local residents as laborers and promises ful in developing protective measures and strategies. of false economic stability for depressed communities Internal threats. Personnel from within an organi- by the more powerful and wealthy illegal loggers create zation can pose serious risks to asset security through additional complexities that must be considered. These fraud, corruption, abuse, and neglect. In forestry, inter- local issues pose difficult challenges when developing a nal threats are probably of most concern in relation to theft prevention strategy and highlight the critical impor- timber transactions. These threats include underpaid tance of community involvement in the process. timber scalers who can be bribed to mis-record volumes, species, and grades; truck drivers who can divert loads; Vulnerabilities and others involved in movements of material through Vulnerabilities are aspects of an operation that are partic- the supply chain. ularly subject to crime or are at special risk or exposure. The ability of managers to explicitly identify vulnerabilities is absolutely critical to the development of prevention strategies and programs They can be physical areas that by virtue of remoteness This assessment usually involves a loss prevention or or other geographic circumstance are difficult to moni- security survey that brings together historical infor- tor and control. They also can be phases in the transport mation on previous security problems and issues and or manufacturing process, such as log yards, landings, evaluation of known threats and vulnerabilities. Sample or rivers, in which material can be diverted and stolen security survey questionnaires and formats are available without detection. from a number of sources.6 One model is provided in The ability of managers to explicitly identify vul- appendix 1 of this report. nerabilities is absolutely critical to the development The primary security objectives of any integrated of prevention strategies and programs. Vulnerabili- security system fall in five categories: ties can be identified on the basis of experience with past losses; knowledge of experiences in other prop- 1. Deter (intruder attacks an easier target) erties; and intelligence, such as data analysis from 2. Detect (intruder detected immediately when s/he computerized case tracking and crime-monitoring breaches perimeter of the property) Security systems. Security surveys can be designed and con- 3. Delay (intruder encounters many barriers while ducted by either managers or consultants to enumer- attempting to reach the target) Asset ate vulnerabilities. and 4. Assess (monitoring personnel determine whether intrusion is real or a nuisance alarm) Risk 5. Respond (monitoring personnel initiate a response Prevention In the security context, risk is usually defined as the force for apprehension and asset recovery). potential for damage or loss of an asset. According to Crime of the British Columbia Forest Service (1998): Conclusion Concepts "Risk is the potential for loss or damage resulting from The discussion in this chapter is intended to provide a particular action or decision. Risk assessment is the forest managers and policy-makers with a basic intro- Basic process of determining the likelihood and magnitude duction to the tools and thinking behind modern 11 of the loss or damage. Risk management is the `art' of industrial asset security practice and their applicabil- weighing the assessed risks against the expected benefits ity to forestry. To a large extent, asset security prac- to make the `best' decision." tice applies a technical and engineering orientation Risk is the point of intersection of the three variables: to the problems of identifying and mitigating risks, assets, threats, and vulnerabilities. The reduction of any threats, and vulnerabilities. However, asset protection of the three categories reduces the overall risk. In another as applied to timber theft is more than merely a tech- formulation: nological issue. As should be clear from the discussion of the causes Risk = Opportunity + Target of crime and the current thinking on models of crime prevention, crime--illegal logging in particular--is a social phenomenon. Efforts by forest managers at the which, if target and asset are synonymous, implies that level of specific properties cannot possibly be expected opportunity is a combination of vulnerability and threat. to prevent all crimes or to address all the risks faced. Many of the causes of illegal logging and timber theft, Integrated Security Planning such as poverty, conflict, inequality, and excess demand, Although the specific approaches and labels used by extend beyond the forest manager's areas of influence professionals vary slightly, most modern approaches to forest manager. asset security and protection involve, first, some degree The scope for effective timber theft prevention at of systems orientation. Second, they are aimed at a the FMU level is further limited because theft, crime, holistic integration of security in the overall manage- and criminals are dynamic. Actions by managers to ment and operational processes of the business or gov- ernment agency. Integrated security planning builds on an explicit risk assessment or analysis (chapter 6). 6See Fennelly 2004 in Fennelly ed. 2004. Actions to prevent crime will induce avoidance and evasion prevent crime will induce responses, avoidance, and pursue management that produces valuable commodi- evasion. Protection efforts in one forest may displace ties, there will be an incentive for theft. timber theft to other areas, or may cause thieves to Nevertheless, ultimately, the most basic security policy adopt more sophisticated methods. Some protective question for policy-makers and the public is whether measures, including some that will be discussed in the forest managers should be expected to proactively address chapters that follow, may have only temporary impact timber theft risks. The answer suggested in this chapter or turn out to be primarily symbolic. As long as foresters and throughout the report is a simple yes. Prevention Theft Timber 12 3 Forest Management Planning: Basis for Operations and Control Graham R.Wilkinson haotic, disorganized, and undisciplined forest C and poorly trained, equipped, and paid staff. Among management invites illegal logging. The indus- those concerned with sustainable economic develop- trial security approaches discussed in the previ- ment, social protection, and biodiversity conservation, ous chapter have found wide application in many fields developing forest management systems already is an of agriculture, manufacturing, warehousing, transporta- established priority. Establishing these systems also tion, and retailing. They generally have been adopted needs to be recognized as a precondition to better pro- and had greater impact in operations in which three tect forests from illegal logging and timber theft. conditions are present: Forest management justifiably can be defined, described, and measured in a variety of ways (ITTO 1. Management systems are well developed. 2006). The approach of this chapter is not to introduce 2. Accountability systems hold managers and new fundamentally new standards or views on the decision-makers responsible for results. nature of sustainable forest management. Rather, this 3. Fundamental issues of ownership, rights, and chapter builds on a reasonably mainstream characteri- obligations are well defined. zation of sustainable forest management. The chapter extends the standard discussion to highlight the close Many examples of excellence in forest management connection between the quality and content of forest exist throughout the world. The common ingredients management and the security of forest assets. The plan- of excellence include forest management plans with ning and operational choices made by the forest man- clear objectives, well defined and socially accepted agement unit manager range from boundary definition tenure arrangements, effective institutional frameworks, and demarcation to choice of silvicultural system to good systems of silviculture, public participation, and monitoring and evaluation (M&E) to community con- benefit sharing with forest dependent peoples (Durst and sultation and conflict resolution. The chapter suggests others 2005). However these features are lacking in a sig- that virtually every one of these choices can have signif- nificant proportion of the world's forests (ITTO 2006). icant timber security implications. A recent International Tropical Timber Organization In other words, the analysis in this chapter largely (ITTO) review estimated that only 27 percent of the suggests an extension of thinking that is already well tropical permanent forest estates of 33 ITTO producer accepted in the more established forest protection spe- member countries is covered by written forest manage- cializations. These include forest fire management and ment plans. Furthermore, in reality, sustainable forest integrated pest management (IPM). management is practiced on less than 7 percent of the This chapter offers immediate and obvious practi- area. Problems to be overcome include absence of basic cal operational recommendations for FMU managers. survey and inventory data, widespread poor quality of However, its primary objectives are awareness-raising engineering work, unsafe worker conditions, dilapi- and sensitization. The following three chapters are gen- dated equipment, unstandardized business practices, eral and oriented to motivate managers to pursue their Chaotic, disorganized, and undisciplined forest management invites illegal logging own security solutions. These chapters provide more concrete examples of security options and approaches. Box 3.1 Forest management terms Beyond FMU managers, chapter 3 aims to motivate Forest management plan (FMP) policy-makers, forest planners, and development spe- cialists to consider the important complementarities Document that translates forest policies into a coor- and interdependencies of forest management develop- dinated program for a forest management unit. The ment and forest law enforcement and governance. plan regulates production and environmental and social activities for a set period through prescrip- tions that specify targets, action, and control arrange- Forest Management Planning ments (FAO 1998). FMPs generally are in operation and Implementation for 5­20 years. Forest management involves human intervention to achieve specific objectives from forested landscapes, Forest management unit (FMU) including the production of socially and commercially Area of forest--or any subdivision of it, such as valuable goods and services. The earliest known forms a block (a specified location) or a felling series-- of forest management arose 2,000 years ago to regulate for which an approved forest management plan is forest use and curb illegal activity (Osmaston 1968). By in operation (FAO 1998). the early twentieth century, five basic components of forest management planning had been developed: 1. Techniques to measure the volume of trees and for- 3. Processes for public participation and engagement Prevention est stands (inventory) and their growth increment of stakeholder and community groups Theft 2. Methods to regulate yield and determine sustained 4. Measures to achieve acceptable levels of public yield transparency and accountability in forest manage- Timber 3. Design and application of silvicultural systems to ment planning, monitoring, and reporting. 14 achieve specific management objectives 5. Provisions to assess and manage the risks asso- 4. Plans for road construction and harvesting systems ciated with each management objective. 5. Working plans or forest management plans (FMPs) to specify the objectives of management and the A simplified summary of the main processes involved measures to achieve and document the prescribed in forest management planning is shown in figure 3.1 outcomes for a forest area over a set period. and summarized in table 3.1. In essence, the manage- ment objectives should be clearly linked to the prescribed The forest management plan is the primary tool for management activities and processes to determine delivering management objectives on the FMU scale. and define: FMUs can vary in size and complexity from large con- cessions and protected areas (PAs) to small, privately Who has the responsibility to take action owned woodlots and community forests. The five key Why an activity or procedure will be undertaken components of forest management planning are: Where the activities will occur When the activities will take place and be completed 1. Prescriptions to set the allowable cut within wood What type and scale of activities will occur production zones, generally based on a sustained How the activity will be undertaken yield derived from inventory and growth data1 How the outcomes will be measured and reported. 2. Information and prescriptions for other manage- ment objectives, such as the protection of soils, Ideally, planning follows a hierarchy from broad water, biodiversity, and cultural values (Davis and assessments and classifications at the national or provin- others 2001) cial level down to increasingly more detailed and spe- cific assessments at the FMU and compartmental levels. Imperfect knowledge at the national or provincial level 1Obviously, cutting may be prohibited within specific subunits, or completely, as in the case of FMUs managed for protection and does not preclude sensible planning and decision-making conservation. at the FMU level. When the legitimate activities and processes for implementing and monitoring the objectives of management are clear, then any illegitimate activities and processes also should be clear Institutional and governance ar- National Forest Inventory rangements level Availability of skills and resources within government and private sector Classification into forest types and land-use classes Economics of forest management and availability of finances to implement provincial an effective forest regulation system Forest allocated for other or Pemanent forest estate land use Sociopolitical attitudes toward forest regulation. Designation of forest Wood production forest Protection forest Forest planning sometimes is dis- National management units (FMUs) missed as irrelevant because plans are not effectively or consistently put into prac- Detailed assessment and Sustained inventory of resources tice. The tendency for FMPs to become yield and values merely well-intentioned objectives that "sit on the shelf" in the forestry office Managemnet objectives prescribed in forest is due to a number of causes. These management plan (FMP) include arcane and irrelevant regula- tory requirements, lack of forestry staff level and managers' awareness and under- Management zoning Planning standing, misdirected cost conscious- FMU ness, and many other rationalizations and excuses. Management Wood production zones Protection zones Irrespectively, the professional con- sensus is that quality FMPs are essential. Forest Strategic Harvest Plan of Allowable Strategic Plans to manage They need to be used as active docu- 15 compartments, silvicultural cut nontimber forest values systems, and cutting schedule ments that are continuously applied and revised (figure 3.2). While good plans Tactical (compartment-level) are no guarantee of good management, Harvesting Plans prepared good management is unlikely without under Codes of Practice deliberate and well-considered plan- Silvicultural prescriptions, ning. Forest management plans provide tree-marking, and Protection zones and buffers a systematic basis for managing the level pre-logging surveys risks associated with illegal activities, whether they are done with deliberate Approval and implementation of plans and serious disregard for the law, or in ignorance of it. When the legitimate activities and processes for implement- Post-logging assessment Monitoring and Compartment ing and monitoring the objectives of and inventory review of plans management are patently clear, then Figure 3.1 Simple model of forest management planning. any illegitimate activities and processes also should be patently clear. Once an FMP has been prepared, it needs to be imple- mented through an appropriate regulatory framework. Security Dimensions of This framework often is defined in detail by many fac- Key Elements of tors. Examples of such factors are: Forest Management Mix of public and private tenures Traditionally, forest management has focused on risks Type and intensity of forest operations and asso- such as fire, pests, diseases, climatic extremes, erosion, ciated degree of environmental risk and landslides. specifying the rights of key stakeholder groups such as traditional communities (box 3.2) 2. Prescribe the scope for choice of objectives of for- Review and Legal and improvement est management and associated documents such policy framework as codes of practice, that is, set the boundaries on choices by FMU managers with respect to man- agement objectives and practices 3. Clarify all legislation relevant to forest manage- ment, including legislation relating to conserva- Monitoring tion, biodiversity, and water management. and Planning enforcement Implications for forest security. If security threats are to be anticipated and managed, an unambiguous legal Implementation Figure 3.2 Five components of a forest Box 3.2 Land ownership and boundaries management system. In many countries, uncertainty or disagreement over land ownership is a major impediment to forest man- Surprisingly, standard references on forest man- agement planning and forest security. The forest man- agement planning are almost silent on the risks of the agement plan (FMP) should clearly identify land tenure Prevention illegal removal of forest products, a practice that has and boundaries. The FMP also should define the pro- Theft plagued forest managers for over two millennia. Sim- cedures and standards for determining ownership ilarly, most forest management plans barely mention and boundaries in the forest. Wherever possible, the Timber this risk. They usually dispense with it by prescribing that process should avoid unduly legalistic or bureaucratic 16 some roads may be subject to restricted access by locked requirements that will incur unsustainably high com- gates (Forestry Tasmania 1996; Department of Natural pliance costs. For example, arrangements to facilitate Resources and Environment 1998). the agreement of boundaries between neighbors This section examines the basic components of a for- can avoid the expense of more formal surveys and est management planning and implementation process. legal disputes. It highlights the components that may relate to risks of The objective of the FMP should be to adopt forest products theft. This review cannot be exhaustive. appropriate and efficient processes and standards Additional examples of the links between manage- that meet reasonable standards of due diligence for ment and risk will be apparent to experienced forestry observers. However, this section is intended to illus- the range of lands and boundaries within the FMU. trate the general proposition that management choices Of most importance are that the outcomes (1) are can have unexpected and unintentional consequences agreed by the key stakeholders and (2) can be used of exposure to security risks. as a reliable basis for identifying illegal activities. When setting management objectives, such as allow- Legal and Policy Framework able cut, the FMP should identify and take into account Establishment of legislation and policies that govern all doubts or disputes over land ownership or bound- forest management is well beyond the job of forest aries. Ideally, uncertainty about land status should be unit managers. Nevertheless, ground-level management resolved through the legal and policy framework. If starts with the legislative and policy base. It is therefore not, the FMP's review and reporting phase should critical that these should be clear and unambiguous. In particular, the legal and policy framework should: identify and quantify the implications for forest man- agement so that this information is clearly available to 1. Clearly delineate the forest estate in terms of land senior decision-makers and the broader community. tenures, land ownership, and land use, including The difference between "legal" and "illegal" activities should be readily apparent to workers, managers, community, and judicial system framework is essential. The difference between "legal" The forests classified for wood production within a and "illegal" activities should be readily apparent to PFE may be refined to reflect forest management pri- forest workers, forest managers, the community, and orities at the FMU level by a zoning system. For exam- the judicial system. A sound legal and policy frame- ple, state forests in Tasmania are classified into three work will not be effective unless it is clearly understood primary zones: protection, production, and conditional. by the regulators (forestry officers and police), forest Within these 3, there are 18 special management zones managers, industry personnel, and community. FMU for values such as flora or fauna conservation, sensitive planners and managers seldom will be able to directly water catchments, landscape protection, and recre- and immediately bring about changes in legislation and ation (Orr and Gerrand 1998). Zoning forests into land- policy. However, they often will need to educate use classes should be an integrated, iterative process. It and train FMU staff and other stakeholders to an involves assessing both the forest resources and values appropriate level of awareness and understanding and the associated threats and constraints. Decisions of the requirements of legislation and penalties for about where to locate conservation reserves or high- noncompliance. Consultation and education are par- value plantations are influenced by information relat- ticularly important when changes to forest laws and ing to how these forests will be protected from potential policies impose new restrictions on the traditional use damage from factors such as fire and human activities. of forests. The need for these consultations and their Coupled with the PFE should be a national forest budgetary, technical assistance, and other resource inventory. It usually is based on the following sources implications are among the considerations that should of information: Planning be addressed in the planning process and incorporated Spatial data from topographic and cadastral maps, in the FMP. aerial photographs, satellite imagery, and geo- graphic information systems (GIS) Management Planning Stratified samples of temporary field plots to Forest management planning takes place at various lev- Forest collect information such as timber volumes and els, all of which will have ramifications and implications forest type, together with a Continuous Forestry 17 at the FMU level. Forest planning on the national or Inventory (CFI) program to obtain data on growth provincial scale requires and employs broad informa- increment tion about the nature of the forest resource to form. Surveys or databases documenting forest values This information forms part of a land-use framework such as soils, flora and fauna, infrastructure, and that identifies the categories of land tenure and owner- social data. ship and the nature of land use. A national or provincial inventory can be used to 1. Defining the forest estate: Assessment and inventory determine forest productivity and sustained yield. of resources and values. An important part of this Information at these levels also is used in planning and framework is the identification of a permanent decision-making about the location and nature of pro- forest estate (PFE). It should define: cessing industries and the development of physical and a. Extent of forest area social infrastructure. b. Classification of the forests by forest type or Assessments and inventories at the FMU level are ecological community more detailed. They are the bases for prescribed FMP c. Land-use category or zoning for the forest activities such as setting allowable cut and protecting estate within broad categories such as: environmental and social values. Pre-logging surveys 1) Reserved for conservation or protection record the location and nature of the resources. Yield 2) Natural (indigenous) forest designated for records and post-logging surveys of retained growing wood production or multiple use stock, residues, and damage enable review and update of 3) Plantation forest the estimates of allowable cut and sustained yield. Post- 4) Excluded forest (available for development) logging monitoring verifies the accuracy of pre-logging d. Area targets or thresholds to maintain the PFE assessments and evaluates whether management pre- within each land-use category. scriptions have been achieved. Implications for forest security. Tenure and land-use demarcation, or deficiencies in the regulation of pre- zoning are major determinants of the risk of illegal scribed harvesting activities. activities. Forest asset security depends critically on establishing who has ownership rights to the resource, Setting Management Objectives ensuring that the assignment of rights is widely recog- The forest management plan must identify the FMU's nized as fair and legitimate, and ensuring that informa- goals and objectives in accordance with policy priorities; tion is readily available and clearly demarcated on maps resource potential; and ecological, social, and economic and on the ground. The FMP should clearly identify constraints. For many FMUs, goal- and objective-setting the nature of intended land use, for example, whether are determined virtually automatically by commercial for production or protection zones. This information considerations, or by legislative or regulatory decree. should be widely disseminated through public educa- For examples, parks and protected areas, for example, tion and targeted information programs. Disputes over largely will have management objectives established by boundaries and conflicts among stakeholders can be the initial legislation under which they were defined. In heightened or reduced at this stage of the forest man- most circumstances, however, managers have some dis- agement cycle. Arbitrary or unjustified resource alloca- cretion over the specific objectives to be pursued and tions, impractical zoning decisions, and definition of how conflicts and choices among options will be recon- indefensible boundaries are examples of security prob- ciled. Typical options could be: lems that can be avoided or minimized with careful attention to the risk and vulnerability concepts dis- Supply a range of wood products as part of a sus- cussed in chapter 2. tainable yield Prevention Field boundaries should be agreed by the relevant Increase plantation area parties and linked to secure survey or boundary mark- Protect the forest from threats such as fire, dis- Theft ers (chapter 4). It is important that local communities eases, and illegal removal of forest products have knowledge and understanding of the tenure and Protect rare or threatened species Timber zoning of forest land and that they are aware of the Maintain water quality and riparian values 18 restrictions and regulations that are attached to different Provide opportunities for traditional forest use, classes of forest. Community knowledge is important including garden sites, grazing, hunting, and for two reasons: recreation Conserve culturally significant sites. 1. To ensure that local communities do not unin- tentionally carry out or cause illegal activities. The plan should prescribe how the objectives are 2. To motivate local people to assist regulatory to be achieved and how performance is to be meas- authorities by reporting potentially illegal activities. ured and reported. FMP objectives need to be tailored to the resources and skills that potentially are avail- Beyond providing data to support routine planning able to the forest manager. Thus, active training and and decision-making, forest inventory results provide education programs are essential to enhance the forest critical support to forest security. Without reliable data managers' capacity to deliver multiple management on the extent, distribution, composition, and value of objectives. Today, most forest management planning the resource base, it is impossible to plan protection or processes take note of the necessity for public input in even to ascertain whether theft is occurring. For exam- preparing the plans. Given the diverse views and expec- ple, pre-logging and post-logging surveys are important tations within many communities, productive engage- tools for monitoring illegal activity. The detection of ille- ment is not always easy to achieve. However, public gal activity in pre-logging surveys allows this informa- participation needs to move away from the top-down tion to be taken into account when planning operations. model in which an agency prepares a draft management Similarly, information gained from post-logging sur- plan, then provides it to the public to critique. In the veys will enable forest managers to review management new model, the public gets involved early in the process and security arrangements. The post-logging review is and helps craft the outcomes (Davis and others 2001). particularly necessary if the illegal activity is directly Implications for forest security. Forest management associated with factors such as road access, boundary objectives are not merely statements of noble intent. It is important to design codes of practice and enforcement systems around realistic expectations of the performance capacities of implementing entities They should be practical and achievable. For this rea- main impact of codes of practice is at the operational son, the management of risks should be one of the or compartmental level. At these levels, the principles major over-riding objectives of FMPs and factored into and provisions of the code must be translated into site- the setting of other forest management objectives. For specific operational plans, such as timber harvesting example, objectives for the production of forest prod- plans or forest practices plans. These plans are the bases ucts must take account of the measures that are neces- to control operations. They should be concise, prescrip- sary to protect the forest from illegal harvest. Similarly, tive, and legally enforceable. objectives to conserve important biodiversity values Codes of practice and associated operational-level must be determined on the basis of the degree of risk plans provide a prescriptive basis for legitimate forest posed to the values by unwanted or illegal activities such practices against which standards of compliance can be as poaching, forest clearing, grazing, or burning. measured and reported. Operational plans should form FMPs should strike a balance on management objec- an integral part of any timber transaction. In the first tives that has the broad support of the community. At the instance, timber products should not be harvested unless least, all stakeholders involved in a specific FMU need to the operations are covered by an approved plan. Second, understand, and to the greatest extent possible be moti- operational plans should be monitored to ensure that vated to comply with, the objectives and activities pre- the harvesting operations comply with the plan provi- scribed in a FMP. Any activity that contravenes the plan sions, such as those regarding harvesting boundaries, will be a consequence of one or more of the following: buffers, and tree-marking. Different planning and regulatory systems impose dif- 1. Activity not foreseen within the forest manage- ferent technical standards, permit greater or lesser flexi- Planning ment plan due to inadequate planning or major bility, and require different levels and methods of control changes in policy or market forces, in which case and documentation. Field conditions vary widely, even the FMP should be formally revised within relatively small areas, and engineering and other Management 2. Noncompliance due to a lack of knowledge, human challenges can be very complex. Thus, it is unrealistic Forest error, or deficiencies in process for a code of practice to provide specific rules for all 3. Deliberately illegal acts. sites. Consequently, to a greater or lesser extent, codes 19 of practice are advisory documents that need to be A FMP prescribes the activities that are to be con- translated through professional judgment and regula- ducted inside all of the forests within one FMU, includ- tory approval processes into more definitive prescrip- ing protection forests and reserves. Active management tions by way of site-specific plans. is fundamental to good forest security. It means that Implications for forest security. Both the technical pro- people on the ground are observing and reporting sus- visions of forest practice requirements and their legal pect activities. In some reserves, more passive manage- and contractual bases have implications for forest secu- ment may be appropriate. However, a policy of benign rity, and in some circumstances and for some issues, neglect can degrade forest values through uncontrolled define what is legal and illegal. Unrealistically demand- pests, weeds, fires, and illegal harvesting. ing or inappropriately rigid codes of practice can exac- erbate security concerns in several ways. Prescribing a Code of Practice Standards that are widely recognized by implementers Codes of forest practice are sets of regulations or guide- and regulatory officials as unrealistic can diminish the lines developed to help forest managers achieve desired perceived value of compliance and control measures outcomes (Dykstra and Heinrich 1996). The funda- generally. Similarly, excessive regulatory demands can mental purpose of most codes is to regulate forest use help to drive problems "underground" and promote to protect the natural and cultural values of the forest cultures of concealment and denial. Therefore, it is (Wilkinson 1999). Forest management plans should pre- important to design codes of practice and enforcement scribe the codes of forest practice to be applied within systems around realistic expectations of the perform- the FMU. Codes of practice determine the broad con- ance capacities of implementing entities and to limit straints that are likely to apply to potential harvesting requirements to genuinely important measures related units, buffers, stream management zones, and protected to sustainability, commercial or community aspects, or areas (PAs) at the strategic planning level. However, the other socially significant parameters. The choice of silvicultural system is the determination of which trees to leave after harvesting to enable the stand to regenerate, it is also the determination of which trees to leave at risk of theft Choice of Silvicultural System growing stock also may attract illegal harvesting, because Silviculture is the manipulation of the composition and the forest is more accessible via roads, skid tracks, and structure of a forest through activities such as harvest- landing sites. In some cases, illegal harvesting may be ing and regeneration to achieve prescribed management associated with the removal of valuable growing stock. objectives. A number of factors contribute to the formu- In others, illegal harvesting may be associated with the lation of a silvicultural system at the compartmental removal of low-quality wood for firewood or other uses. level in a FMU. They include: In both cases, the illegal operations may damage advanced growth and regeneration. They also may damage soils, Forest type. Ecological characteristics of the for- streams, roads, and areas protected for biodiversity or est, including species composition, structure, and other values. Irrespective of the damage to the forest, condition illegal logging has an impact on the allowable cut. As far Site factors. Environmental factors, which deter- as possible, this impact should be factored into the FMP. mine the availability of moisture, nutrients, and tem- The management of these risks requires good docu- peratures for forest growth; physical attributes of the mentation and processes. As a general rule, silvicultural forest, such as topography and soils, which determine regimes in the FMP need to be translated into site-specific the location of roads and the selection of harvesting prescriptions in timber harvesting plans. In addition, equipment consideration must be given to how the prescriptions will be applied in the forest, who will select and mark Fire management. History of fire, use of fire for trees for harvesting, and how the residual stand will be fuel management or regeneration, requirements to monitored. These activities must be clearly defined so protect forests from wildfire that forest officers can readily detect any tree removals Prevention Markets. Potential markets for commercial use that do not comply with the harvesting plan. of various forest products, including low-quality Theft Specific measures may be necessary to respond to the wood; requirements to meet wood supply contract security risks associated with various forms of silvicul- specifications Timber ture. In some cases, potentially high-value growing Nontimber values. Measures necessary to protect 20 stock has been silviculturally retained to enhance future other forest values such as biodiversity, soils, water growth and regeneration. Preventive measures at the resources, and cultural sites compartmental level may include the physical closure of Social attitudes. Measures necessary to achieve roads and skid tracks once legal harvesting operations outcomes acceptable to the community to meet the are completed. members' expectations for other forest uses such as Silvicultural systems may be manipulated to improve collecting nontimber forest products and main- the delineation of boundaries and to buffer important taining aesthetic, cultural, and recreational values. forest values. In the APRIL Logging Concession Area in (Wilkinson 1994) Indonesia, strips of plantation have been established along major public roads to provide a visual and phys- Silvicultural systems in tropical countries generally ical buffer. Proximity to the roads reduces the incidence are based on polycyclic, selective logging, which retains of illegal harvesting from the residual natural forest. In an uneven-aged forest structure (FAO 1998). Mono- India, plantation buffers have been used to protect the cyclic systems create even-aged strata through the har- boundaries of natural forest from the edge effects of vesting and regeneration of forests by clearfelling and grazing by domestic animals on adjoining land. shelterwood techniques. Native forests and plantations form part of a land- In its simplest terms, the choice of silvicultural sys- scape mosaic in many FMUs. Strategically locating the tem is the determination of which trees to leave after different management units within the mosaic optimizes harvesting to enable the stand to regenerate for subse- the protection of important natural and economic assets. quent harvests. In respect of timber security, it is also The protection of plantation forests can be improved the determination of which trees to leave at risk of theft. by locating them close to major road infrastructure and Implications for forest security. The choice of silvicul- security/labor resources. In contrast, high conservation tural regime dictates the nature of the retained growing forests can be protected through buffers that control stock and its vulnerability to damage through logging, access and reduce the encroachment of damaging activ- windthrow, and fire. A silvicultural system that retains ities (figure 3.3). Australia. Tasmania, to collect timber and nontimber forest products. The FMP should address this custom and provide Authority, appropriate opportunities for tra- ditional forest use. Practices Incentives also can be offered Forest to landowners to protect and manage their forests for regen- eration after logging. In some Photograph: Figure 3.3 Landscape mosaic. Plantation forest (middle) adjoins the land used jurisdictions, private landown- for agriculture and settlement (bottom). The plantations are a buffer between the inten- ers receive a higher royalty rate sive land management of the agricultural/settlement zones and the extensive manage- for their harvested timber if they ment of high-conservation-value native forests (upper). However, from a security point agree to protect the regenerating of view, this arrangement also concentrates the risk of theft on the old-growth buffers. forest from fire, grazing animals, and additional timber removals. Private owners also can be given Illegal activities may degrade the forest through the improved security of their future harvest rights within unauthorized salvage of low-value products after the long-term management plans or through legislation. scheduled harvesting operation. If so, preventive meas- ures may involve a more integrated approach to the Planning Road Access Planning provision of these products. Logged areas often are tar- Road and infrastructure development is usually a major geted by firewood collectors because of easy access to element of the total cost to develop and operate a forest felled and standing timber. In some cases, the ground- management unit and a critical contributor to the over- Management wood and standing trees have been retained specifically all success and sustainability of management. The effec- Forest to provide habitat for threatened invertebrates, birds, tiveness of road access planning is determined by such and mammals. factors as: 21 In Tasmania, illegal removal has been managed by modifying the silvicultural and regulatory system in Cost of construction and maintenance two ways. In some areas, low-grade logs are extracted Topographic and edaphic considerations and stockpiled during the conventional harvesting Harvest method; for example, ridge-top road- operation to meet local requirements for firewood. In ing for cable systems, mid-slope for conventional other areas, "free firewood compartments" are set systems aside to provide an incentive by which collectors can Safety obtain free wood provided that they comply with the Access requirements for nontimber uses of the rules that protect green standing trees and buffers. forest and other management activities, including The incentive is backed up by enforcement and fines fire protection for people who are apprehended cutting in unautho- Visual impacts. rized areas. These two approaches may be modified depending The location, density, and type of forest roads have on whether the illegal activity is associated with local interrelated and often conflicting impacts on environ- people or external parties. For local people, education mental, economic, and social factors. The economic and communication programs will improve their under- impacts of roads are related directly to the mean dis- standing of silviculture and appreciation of the longer tance to transport and skid logs, hence to the cost of term benefits that could accrue from implement- extracting timber. Environmentally, roads are potential ing appropriate harvesting and regeneration regimes. long-term sources of erosion and stream sedimentation. Their greater awareness and appreciation may lead to Poorly designed roads and bridges may fail during high better surveillance and reporting of illegal activities. rainfall or floods, resulting in massive sedimentation It is also important to recognize that, in many areas, and repair costs. Inappropriate stream crossings also can local people traditionally have had use of the forest seriously affect the natural movement of aquatic fauna. For communities, roads can provide positive social ben- designed to restrict trucks' access to protection forests. efits, including access to nontimber forest uses such as Similarly, road drainage structures such as cross-drains recreation, hunting, and fishing. On the other hand, (ditches) and water bars can be used to restrict access to uncontrolled access opens up the forest to illegal activity. vehicles. All-weather pavements can ensure good access Implications for forest security. Controlling access is for surveillance and monitoring by responsible agencies a major forest security consideration. Road and infra- and communities. Conversely, unpaved roads can be structure design and layout is probably the single most used to restrict access to unauthorized persons during important concern. Access can be controlled in two periods of low forestry activity such as wet seasons. ways: the location of roads and restrictions on their use Roads that are temporary or required only for peri- (chapter 4). odic harvesting may be decommissioned by removing Location of roads. Roads must satisfy often opposing stream crossings or installing physical barriers such as requirements. Wherever possible, to minimize the risk cross ditches or rock mounds. of theft or damage, roads should be located away from The location and status of forest roads need to be sensitive areas, such as cultural sites, rare plants, or well documented and regularly reviewed by patrol and important habitats. In areas that have a history of illegal inspection. This information should enable forest man- activity, roads should be located to limit the number of agers to monitor the condition of their roads, plan main- uncontrolled access points into the forest. Conversely, tenance programs, and detect any signs of illegal road where local communities and neighbors are committed construction or use. to good forest management, road access may be used to facilitate better surveillance and stewardship. Protection When new roads or changes in width or alignment are Chapters 4 and 5 focus on security measures directed at Prevention being planned, sensitive natural environments should controlling forest trespass and reducing risks in timber Theft be identified early in the planning process so that alter- transactions. Thus, the discussion addresses at the more nate routes and designs may be considered. Wherever general relationships among the fire, pest, and disease Timber possible, road developments should be located away activities that frequently are part of forest management programs. In recent years, thinking and practice on insect 22 from sensitive areas to avoid severe impacts. Water cross- ings should be minimized, and buffer zones of undis- and fire damage have evolved toward concepts such as turbed vegetation should be left between roads and integrated pest management (IPM)4 and protective watercourses. Groundwater recharge areas should be silviculture (Velez 1990b, 10­12). These approaches avoided, and major roads should not be constructed have in common a reliance on knowledge and under- through national parks or other protected areas. Oppor- standing of natural systems and judicious recourse to tunities should be sought to twin new road corridors human intervention. The approaches have developed with previously established transport rights-of-way, such in reaction to the limits and high costs of chemicals, as railway or electric transmission lines.2 and the unexpected consequences of fuel accumulation Restrictions on the use of roads. Road access is com- and other problems related to pest management and monly controlled through devices such as gates, other fire management, respectively. physical barriers, load limits, and road design. Access Forest protection actions that would be considered barriers are discussed elsewhere in this volume.3 Road part of the management program include: design factors, such as topographic location, alignment, width, and pavement material, also may be used to Surveillance and monitoring programs, which restrict access. For example, gates and barriers are more may be conducted through remote sensing, aerial effective if located on sections in which off-road access photographs, aerial patrols, and ground surveys is limited, such as near streams or areas of major side- and patrols cut or fill. Roadside ditches and/or berms of heavy rock Physical works and forest operations (firebreaks, also can be used to prevent off-road access into adjoin- access roads, watch towers, emergency response ing forest. Horizontal and vertical alignment can be facilities) Salvage and regeneration works to accelerate reha- 2Based on chapter 10, "Impacts on Flora and Fauna" in Hoban bilitation following losses that do occur. and Tsunokawa 1997. 3Chapter 4. 4 For a survey, see Speight and Wylie 2001. Modern forest management is an interactive process involving forest owners, government, forest users, and the broader community In addition to contingency plans for salvage and Local communities and others who have historical rehabilitation works, managing events such as cyclones rights or privileges in a forest are important stake- involves risk management strategies such as modified holders and must be involved in forest management harvest and silvicultural regimes. Activities associated planning (FAO 1998). Community engagement should with fire management and pest control require com- extend beyond consultation to recognize and enhance prehensive management plans and procedures, backed the members' opportunities to share in the benefits that up by well trained personnel, adequate resources, and accrue from good forest management. Benefits include infrastructure. employment, royalties, improved fire protection, access Implications for forest security. Surveillance and to timber and nontimber forest products, garden sites, monitoring programs for forest protection should be and recreation. integrated with security programs. Staff involved in Implications for forest security. The community is more monitoring and operational programs should be vig- likely to protect forest assets when it sees a direct benefit. ilant for signs of illegal activity and should pass any Local communities that receive short-term gain from evidence from ground or aerial patrols to the appro- illegal operations need to be convinced of the longer term priate officer. To deter potential illegal operators, forestry economic, social, and environmental benefits that will organizations should publicize their surveillance pro- accrue to them from sustainable forest management. grams and maintain a high degree of physical presence All stakeholders, particularly landowners and com- in the forest. munity groups, can increase forest security through Protection activities require adequate levels of sur- participating in education programs, changing their veillance and access to the forest. In other words, for- own behavior, and monitoring and reporting any sus- Planning est managers must find a practical way to provide picious activities. Many "illegal" activities are carried efficient access for persons engaged in important pro- out by persons in ignorance of the law or in pursuit of tection works, while restricting access to unauthorized traditional rights or past-times. Such activities are best Management persons. It would be counter-productive to have forests addressed through educating, developing management burned by wildfire because forestry officers were unable strategies, and designating areas to respect, and respond Forest to gain timely access. Even worse would be forest work- to, traditional rights, such as garden sites, grazing, 23 ers or members of the public put at risk because their hunting, and harvesting domestic timber and nontim- escape route was blocked by a locked gate. ber forest products. Community groups can be effective "watch-dogs" Consultation with Stakeholders over the forest estate, detecting, and reporting any and the Public suspicious activity. An alert, informed, and motivated community is a strong deterrent to persons contem- Modern forest management is an interactive process plating illegal activity.5 involving forest owners, government, forest users, and For example, in Central Java, illegal logging is reported the broader community. Consultation and collabora- to be rampant on state forest land but relatively uncom- tion can foster a partnership approach to forest man- mon in community-based forest management areas agement. They can provide a framework to: (Tacconi and others 2004). In Tasmania, rural commu- nity groups comprising landowners, forest workers, Recognize and clarify the rights, roles, and respon- and recreational and hunting clubs have formed "Bush sibilities of each party Watch" associations. These associations detect and report Optimize the use and development of skills and suspect activity in a similar way to the urban-based resources within both governmental and private "Neighborhood Watch" program. sectors Establish mutually agreed outcomes and standards, Types Timber Sales and Management Contracts and minimize ongoing disputes Timber sales may be made with respect to an agreed vol- Develop efficient processes and avoid unnecessary ume of timber or as rights to an agreed area of forest.6 duplication and bureaucracy Provide motivation and incentives to encourage best practice through continuing improvement. 5See also social fencing in chapter 5. (Wilkinson 2001) 6For an expanded discussion, see chapter 5. Arrangements for the conduct and supervision of log- streamlined approval processes can be used as ging operations generally are specified in statutory incentives to counter the costs and inefficiencies of regulations, contracts, and licensing rules. Regulatory excessive governmental bureaucracy and interven- frameworks vary in the degree of control exercised tion by enabling private operators to become more by government and the degree to which some reliance efficient and responsible. Savings that accrue from is placed on responsible self-regulation by the forest reduced governmental regulation of responsible owners and logging contractors. Lack of clarity can parties can be redirected to increase the regulation lead to unnecessary duplication and over-regulation on of problem operators, including illegal operators. the one hand, or regulatory deficiencies on the other. Landowners and forest companies can encourage Ambiguity of roles and responsibilities can be exploited good practice by preferentially awarding contracts by those who wish to abuse the system. to operators with good compliance systems. The regulatory framework should clearly specify 4. Penalties provide a strong deterrent to those who the roles of the parties involved in logging. These roles carry out illegal operations, either deliberately or should be articulated in the documentation for licenses as a consequence of inadequate self-regulatory or operational plans. For example, who will be respon- systems. sible for marking boundaries and tree selection? Who will be responsible for log scaling and for checking log An effective regulatory framework enables forest dockets? operators to know the rules and motivates them to meet Implications for forest security. Timber sales that are or exceed the required standards. As a result, the oper- based on the allocation of a forest area, such as conces- ators will be interested in the broader picture of sound sion systems, leasing, or other property rights, usually forest management and will not support or tolerate Prevention result in the holder of the right assuming the primary illegal activity. Because they work both within the forest Theft responsibility for the management and security of the and in the industry, collectively they are important addi- timber assets. The commitment to asset security may be tional sets of eyes and ears for forest surveillance and Timber less for those who are allocated a certain volume that is reporting. 24 not restricted to any particular area of forest. In both cases, there is a possibility that only one party--the Implementation landowner or holder of the timber rights--is directly The forest management plan should take into account threatened by illegal operations. As a result, other par- the skills and resources that are available to the forest ties may be ambivalent or unsupportive about con- manager to implement the prescribed management tributing to security arrangements. activities. Failure to properly implement plans may occur Ideally, all parties should regard forest security as for a number of reasons, most of which are predictable. a necessary overhead to protect the rights of those Two are: who are engaged in authorized logging operations. A balanced approach to forest security requires a com- 1. The forest manager does not have the capacity to bination of good procedures, education, incentives, and undertake the prescribed activities. penalties. 2. Planned activities are changed to levels that are not consistent with the prescribed objectives of 1. Effective procedures for log marking and for track- the plan, such as changes to allowable cut or sil- ing the movement of timber are fundamental to vicultural regimes. any compliance regime. Advances in log mark- ing and chain of custody (CoC) are detailed in In either case, the result is the same: the forest man- Dykstra and others (2003). agement plan falls into disuse, and forest management 2. Education enables all parties to see the benefits that outcomes do not reconcile with the planned objectives. accrue under a system of responsible forest man- Implications for forest security. Forest management agement, including improved security of resource plans must be implemented by persons who have the supply and a fairer market that is not distorted by appropriate skills, attitudes, and resources (equipment, cheaper, illegal timber. vehicles, and planning tools) to undertake the prescribed 3. Incentives encourage a high degree of responsi- tasks. The plan should clarify the respective roles, respon- ble self-regulation. Training, accreditation, and sibilities, and rights of all parties, with the given that Compliance programs should not be viewed as the sole responsibility of a "regulator" or specialist each party must have the capacity to fulfill his or her pre- 1. Compliance monitoring measures and report on scribed activities. These range from boundary marking, the performance standards being achieved (out- inventorying, tree marking, and felling to monitoring comes) with respect to the prescribed objectives and enforcement. The plan should identify all deficien- and requirements of relevant laws, management cies in resources and capacity and describe the requi- plans, and codes of forest practice. Compliance site compensatory actions, such as providing training monitoring typically includes these processes: and other measures to develop and build resources and a. Regular inspections and patrols capacities. b. Formal checks, often on a sample, for exam- All departures from planned activities should be ple, checks of log measurements and dockets clearly documented. The reasons for the changes and the c. Formal audit implications for forest management should be reviewed d. Investigations of suspected illegal activity that and reported as part of the regular review and update of has been reported through routine activities or the FMP (Review and Improvement section below). information from other parties. Monitoring programs must be transparent and Monitoring and Enforcement credible. In other words, they must be well docu- Monitoring and enforcement are essential components mented, engage well-trained and competent staff, of any compliance or regulatory regime. Transparent and produce publicly available reports. The reports monitoring and reporting systems are key components contain the results of the monitoring program and of forest certification systems. They also are increasingly the actions taken to correct any deficiencies and to important for securing access to markets that demand effect improved forest management outcomes. Planning evidence of legal and sustainable forest management 2. Efficacy monitoring means evaluating how well the practices. management practices or actions have achieved the Most regimes comprise a combination of three types desired outcome. For example, how well do the pre- Management of regulation, which can be complementary: scribed buffers protect streams or wildlife habitat? Monitoring compliance should be carried out rou- Forest 1. Self-management by landowners and operators tinely across all operations. However, monitoring 25 2. Monitoring and enforcement by government efficacy generally is done through a more targeted 3. Independent verification by third parties, such or strategic approach that involves research or as that provided under formal environmental long-term monitoring projects. The results of management systems and certification schemes. these studies are used to refine the practices pre- scribed by management plans and codes of practice. Public scrutiny also can significantly foster improved Monitoring programs are an essential feed- environmental performance and accountability. Non- back mechanism for forest management. Mon- governmental organizations (NGOs) and the media can itoring compliance and efficacy enables forest greatly help forest managers to garner social and politi- managers to: cal support for improvements to forest management and a. Translate the information into improved pre- security at all levels. scriptions and practices Poorly managed processes can become very inter- b. Provide transparent and credible reports on the ventionist and adversarial. Public trust in forest man- standard of forest management being achieved agement can be enhanced by credible monitoring and within a FMU. By its nature, monitoring invari- transparent reporting of operational performance by ably highlights illegal activities and other man- forest managers. Performance includes providing oppor- agement deficiencies. However, recognizing good tunities for the community to be involved in monitor- performance is equally important, because it ing forest activities in a cooperative and participatory promotes and helps to strengthen the attitudes, manner. (Wilkinson 2003) skills, and systems that underpin good forest management. Monitoring. There are two important types of monitoring within any regulatory regime: (1) com- Enforcement. Enforcement generally refers to pliance monitoring and (2) efficacy (effectiveness) the exercise of statutory power by authorized officers. monitoring. However, many others will contribute to enforcement by providing information obtained through the mon- warnings, notices to take corrective action, stop-work itoring activities described above. orders, cancellation of licenses or contracts, fines, and Modern enforcement regimes emphasize the preven- prosecutions. tion of crime rather than control and punishment. Most All instances of noncompliance indicate deficiencies regulators regard prosecution as indicative of their own in either attitude, skills, resources, or procedures. Hence, failure to achieve good performance by other means the long-term key to achieving good compliance lies in (Farrier 1992). However, the power to resort to legal effecting continuous improvement through education, enforcement often is necessary to put "teeth" in regula- training, and the development and implementation of tory regimes. Penalties can strongly deter illegal activity, sound forest management practices and procedures. particularly by persons who are less receptive to other Implications for forest security. Monitoring and dissuasions. enforcement regimes are essential to determine whether Two factors determine the effectiveness of using the objectives of forest management plans are being penalties as a deterrent: (1) risk of being caught and achieved. Compliance programs must be conducted (2) magnitude of the penalty. The first is a function of properly by competent persons. For routine monitor- the resources and systems in place to detect illegal ing and enforcement, forest officers must be adequately activity. The second is a function of the law and of the trained and competent in investigation techniques, nego- regulatory authority and judiciary's capacity to imple- ment the penalty provisions. tiation, and conflict resolution. Highly confrontational A responsive and effective enforcement regime has or dangerous investigations should be undertaken only a range of enforcement options. They are implemented by enforcement officers who are appropriately trained through: and equipped. Prevention However, compliance programs should not be viewed Theft Designated officers who are well trained in inves- as the sole responsibility of a designated "regulator" or tigation techniques, negotiation, and conflict team of specialist officers. A security program will not Timber resolution succeed unless it has the support and involvement of 26 Adequate resources, including transportation and all staff. Security awareness needs to be integrated in effective information and communication systems normal management programs and activities such as Properly documented procedures for investiga- monitoring inventory plots; maintaining roads; and tions and enforcement action carrying out patrols for fire, pest, or storm damage. Transparent reporting on investigations and action Organizations should establish effective communi- taken. cation systems to ensure that all officers who detect suspect activities during their normal work pass the Enforcement decisions should take into account a information to responsible investigative officers. Like- number of factors: wise, officers involved in enforcement should liaise with operational managers to review how compliance levels Degree of environmental or economic loss can best be improved though changes to forest manage- Cost of corrective action ment activities. Time required for rehabilitation or natural recov- As mentioned, the planning and implementation of ery of the forest forest management should involve all key stakeholders, Intent of the offender (whether the act was delib- erate, accidental, or in ignorance of the law) including forest owners, forest workers, and govern- Offender's past history mental staff. All parties have a role in fostering improved Level of cooperation shown by the offender in compliance through training, education, reporting, and reporting the noncompliance and in undertak- the development of better systems and procedures. Ulti- ing any relevant remedial measures or improved mately, forest security will be enhanced when: practices. 1. All parties--landowners, forest workers, the com- These factors can be put into a matrix to determine munity, and government--understand and sup- the seriousness of illegal activity and the most suitable port the objectives of forest management and the enforcement options. Enforcement options include necessity for high compliance standards. Solutions to illegal activity cannot be developed in isolation from other management activities 2. Forest managers implement effective internal man- Forest management plans should be reviewed regu- agement systems to monitor and report on compli- larly in a participatory, transparent, and credible man- ance and to enforce standards through corrective ner. Ideally, progress in implementing the plan should actions or punishments. be assessed and reported annually. The plan also should 3. Governments ensure that credible and transpar- provide for more formal reviews every 5 to 10 years. ent processes are in place to enforce and report on The accompanying report should contain: standards achieved. 4. Third parties verify internal management systems. a. Information on the outcomes and an explana- tion of variances from planned outcomes, not- Review and Improvement ing the impact of any changes in the operating environment Good planning systems are based on the four principles b. Highlights (successful outcomes) of adaptive management: c. Reasons for poor outcomes and the adaptive responses proposed to improve future outcomes 1. Prescribe d. Other initiatives to foster continuing improve- 2. Monitor ment, such as programs for training, research, 3. Review and development 4. Revise. e. Revisions to the management objectives and activ- ities prescribed by the forest management plan. Forest management planning should be a dynamic Planning process that responds to changes in the operating envi- Implications for forest security. When the objectives of ronment. Such changes span: forest management are defined clearly and the outcomes are monitored, reviewed, and reported properly, then Management 1. Management objectives and priorities, which any departures from the prescribed outcomes should be Forest naturally will change over time in response to patently clear. Recognizing the nature and causes of changes in economic, social, and environmen- noncompliance is the first step toward an effective, 27 tal factors adaptive management response. 2. Improvements to the processes and tools to imple- As mentioned earlier, solutions to illegal activity can- ment plans in response to changes in technology, not be developed in isolation from other management knowledge, governance arrangements, and insti- activities. Forest management planning provides the tutional capacity framework within which all of the threads of forest man- 3. Feedback from monitoring programs, which agement can be integrated and coordinated to optimize enables forest managers to evaluate whether the resource use and produce the desired outcomes. management objectives are being achieved and Ongoing review allows forest managers to progres- to assess the relative success or failure of man- sively improve the forest management elements that agement processes and activities. affect forest security (table 3.1). Table 3.1 Summary of the key links between the elements of forest management planning and forest security Forest management element Implications for forest security 1. Legal and policy framework Remove ambiguity or doubts about legal activities, especially in relation to land tenure and ownership. 2. Planning Carry out comprehensive inventories and surveys from which to determine allowable cuts, identify values that require protection, and monitor any illegal removals or damage. a. Define forest estate Demarcate boundaries on maps and in the field using secure markers or easily identifiable fea- tures (roads, streams, ridge tops) to facilitate accurate monitoring of boundary security. b. Set management objectives Define forest management objectives so that any departures from planned outcomes, such as harvesting volumes, are patently clear. Clarify the roles, rights, and responsibilities of all parties, including consultation with key stake- holders such as the local community and forest industry. c. Prescribe code of practice Translate management objectives into site-specific operational plans and standards, such as timber harvesting plans, as the bases from which to control activities. d. Prescribe silvicultural system Prescribe specific security measures to protect important silvicultural areas such as high-value growing stock to enhance future growth and regeneration. For example, to keep out illegal loggers, close roads after logging. Prevent public from retrieving firewood or other NTFP by extracting low-grade logs at points outside the forest. This arrangement will ensure that local firewood demand is met. Alter- natively, set aside "firewood- and NTFP-gathering compartments" with rules to protect green standing trees and buffer zones. Prevention e. Plan road access Control access through road location and restrictions. Locate roads to avoid sensitive areas and to facilitate surveillance, monitoring, and control. Locate barriers, gates, and transport check- Theft points at "choke points," for example, bridge crossings or steep side cuts. f. Protect forest resources Integrate surveillance/monitoring for forest protection with timber/timberland security pro- Timber grams. Train all staff to detect and report any illegal activities. 28 g. Consult stakeholders Involve stakeholders--landowners, community groups--as forest security "watch dogs." Pro- and public vide educational programs and incentives to change their attitudes and behavior, and encourage them to report illegal activity. h. Contract timber sales Prescribe tree and log marking and tracking in sales procedures. Contract should include incentives for good practices and penalties for bad ones. Curbing fraud and theft will reduce competition from cheap illegal logs and deliver higher returns to forest owners. 3. Implementation of FMP FMU manager must have the capacity to implement the FMP in terms of skilled labor and appropriate management systems and resources. Manager should conduct training to improve skills in critical areas. 4. Monitoring and enforcement Manager should: Integrate monitoring by forest owner/managers, contractors, workers, and government agency staff. Manager should not rely only on company security officers. Use audits and checks to identify potential security problems ("red flags"), for example, tim- ber volumes, areas, tree or log numbers that do not match. Develop effective communication systems to ensure that those who detect suspicious activity during their normal work pass information to security officer to investigate. Provide a range of enforcement options: warnings, notices of corrective action, stop-work order, cancellation of license or contract, fines, and prosecutions. Enforcement options should be "built into contracts" and balanced with degree of loss/damage. Provide transparent reports on monitoring and enforcement activities to garner the support of the community, including NGOs and media. 5. Review and improvement Manager should regularly report and review outcomes, and explain variances from management objectives. This information should be used to improve management systems and/or high- light deficiencies that require higher level action. 4 Securing Forest Land and Resources: Technologies and Systems Garry B.Vikanes imber theft can occur only when criminals have T parcel of land. More often, it is limited to a subset, leaving access to the forest. Trespass thus is a fundamen- to others the rights to passage, wildlife, water, and other tal component of illegal logging. Trespass spans resources and services. Tenures may take the form of per- behaviors from using established roads and transport manent ownership that can be sold or transferred to heirs infrastructure to clandestine crossings of borders and or others. Tenures also may be granted or acquired for boundaries to surreptitiously using an FMU's own equip- different lengths of time, and the rights and obligations ment and resources. Securing forest land against trespass being transferred can be attenuated or restricted. is one of the most important components of timber theft For example, forest concessions are forest tenures prevention. that convey rights to develop and exploit a forest, sub- This chapter examines the protection of forest land. It ject to various constraints and obligations. The latter begins by defining and analyzing trespass. It deconstructs may include paying royalties and other fees and adher- the protection problem into two parts: (1) controlling ing to standards of forest practice and other regulatory entry into and exit from the FMU and (2) preventing requirements. Concessions do not involve a transfer of illegal activities within the FMU. The discussion high- ownership and usually do not abrogate or nullify the lights the special security issues and limitations inherent existing rights and privileges of others, such as the cus- in protecting large, remote areas. It also puts in per- tomary privileges of indigenous communities. Commu- spective the importance of carefully assessing transport nity forestry represents a range of tenure arrangements routes and natural features in designing and implement- that variously involve benefit-sharing, management ing protection measures. and protection responsibilities, and other privileges and The chapter reviews well-established methods of obligations. controlling access, including fences, gates, boundary "Trespass" is the violation of the tenure rights of an markers, and checkpoints on roads and rivers. It next owner by entering onto the owner's lands without per- considers the role of guards and security forces and mission. Two legal approaches can be taken to deal with issues in their deployment and effectiveness. The chapter trespass and timber theft: civil and criminal. Criminal then moves to advanced technologies, such as closed and civil trespass laws vary by jurisdiction and by coun- circuit television and the innovative and low-cost tech- try. Criminal trespass is the act of going onto another nology of "social fencing." person's land or property without permission of the owner or lessee and is an offense or misdemeanor cov- Trespass ered by a jurisdiction's criminal code. Under civil law, trespass is a tort, or wrongful act, that may be a valid Tenure is the right, manner, or form of holding an asset. cause for a lawsuit to seek judicial relief, and possibly Forest tenure systems vary widely among and within damages. countries. Forest tenure sometimes takes the form of Understanding and dealing with the trespass can be ownership of all of the features and resources on a a challenge, so it is important that the interpretation of As a first step in a protection program, landowners and managers concerned with trespass need to obtain authoritative legal advice on the rights and limitations that accompany their particular tenures the statutes defining the term in a particular jurisdiction Timber trespass can occur when a contractor or is clear. Without proper clarification and widespread licensee targets and removes valuable trees without public understanding of tenure rights, conflicts can authorization while cutting and removing trees under develop when protection actions that limit or restrict the terms of a contract or license. In this case, the tar- access are introduced. It can be argued that trespass can geted high-value trees also could be located and cut out- occur even with the permission of the landowner to be side the boundary of the contract but still on public on the land. The reason is that trespass can include land, in which case the contractor/licensee is culpable elements other than simply entering onto the land of of criminal timber trespass and theft. Timber trespass another without permission, especially regarding tim- also can occur if public land is open to public access, but ber trespass. For instance, in some jurisdictions, timber certain activities are prohibited. An example would be trespass may include unlawfully cutting, damaging, or a protected area in which the law prohibits entry to cut removing timber without the consent of the landowner. and remove forest products that is accessed by someone As a first step in a protection program, landowners who cuts and removes or damages timber. and managers concerned with trespass need to obtain Even more difficult areas for limiting access are com- authoritative legal advice on the rights and limitations mercial forest zones on which authorized timber harvest- that accompany their particular tenures. Anti-trespass ing is allowed by contract or license. In this situation, measures can be exerted only within the scope of the others may legally enter onto public land. However, rights conferred by law or a specific tenure instrument depending on whether the ownership of the timber (deed, lease, contract). Thus, for example, an industrial has been transferred, if they illegally cut timber, tim- forest concessionaire may not be entitled to prevent ber trespass and theft have occurred against either the Prevention access to hunters or other traditional users. contractor/licensee or against the government. Control of trespass can be complicated by a number Theft of factors. Due to uncertain boundary lines, police often have difficulty in determining whether someone has Controlling Trespass Timber trespassed. In some jurisdictions, trespass is not consid- The practical control of forest trespass involves two key 30 ered a criminal or penal issue. Not all persons seeking challenges: (1) controlling entrance to and exit from the or gaining access to property are trespassers. Laws often forest area, that is, controlling forest boundaries; and recognize the rights of persons given express permis- (2) controlling activities inside the boundaries. These sion to be on the property. Examples are licensees, game are met by identifying and locating key vulnerabilities wardens, police officers, government-licensed foresters, and by developing systems to exclude and control those or members of groups, such as indigenous local com- posing threats to the property. These goals are accom- munities, who may have specific legal access rights. plished by a combination of (1) minimizing exposure Such individuals and any others with legal right to be on of particularly vulnerable assets with physical barriers1; the property are not trespassing and cannot be prose- (2) zoning the property to minimize the presence of cuted on this basis alone. those posing threats; and (3) developing surveillance Property owners may allow some trespassers while excluding others. For example, a sign saying only "No practices to detect and deter threats. Hunting" conceivably could allow hiking, all-terrain Vulnerabilities vehicles, or bird-watching, but would give notice to hunters that they would be trespassing if they entered Vulnerabilities are points particularly subject to, or onto the property. Unless there are specific laws that at risk of, crime (see chapter 2). This chapter addresses enable restriction of access, the public can demand its right to access public forests. When restrictions are 1 Conventional asset protection and industrial security practice is allowed and imposed, they must be based on criteria concerned with prevention of trespass to buildings and relatively defined by a law, regulation, or order; and generally will small sites. These practices emphasize physical barriers such as gates, be based on public safety or protection of the resource. locks, and related systems such as lighting and alarms, which are rele- vant to limited forestry applications. Useful references include Fennelly, Using a blanket control mechanism to limit access can "Security Surveys" in Fennelly 2004 and National Crime Prevention be challenged by the public, especially by those who Institute 2001. For specific design guidelines on fences, a useful refer- depend on the forest. ence is U.S. Army Corps of Engineers 2001. While total boundary length is a component of timber theft risk, specific vulnerabilities along the boundary are likely to be more significant vulnerabilities in space, while chapter 5 considers vul- Careless surveys lead to mapping problems, as noted nerabilities in the component processes of timber in Cameroon: sales. The areas in forests that typically are at the greatest risk are boundaries, infrastructure, rivers, "The failure to identify incursions detected on Landsat and areas with particular concentrations of valuable 7 ETM3 images might be, in part entirely, due to `map- resources. ping problems' by the logging companies operating in Boundaries. Identification of the forest estate is an the area, and true mapping problems within MINEF essential element of FMU planning and management departments.4 It has been observed that for a given title and is needed for yield regulation, harvest planning, several descriptions of boundaries existed, and some- times the FMU's shape was unclear due to bearing and other basic work (chapter 3). Analysis of bound- errors or errors in the legal description that accompany aries from a security perspective is another basic com- the map of the concession" (Auzel and others 2004). ponent of timber theft prevention. The boundaries of an FMU are a major element in its vulnerability to tim- Other vulnerabilities within a forest. Vulnerabilities ber theft. Nevertheless, these boundaries usually are to timber theft within an FMU will be related to some established based on administrative or natural consid- of the same factors that are of boundary concerns. erations, not on security concerns. Thieves access the Vulnerable locations inside the FMU include roads, property by crossing its boundaries and transporting trails, streams and rivers, and human settlements. stolen material across them. Because of their length, While pilferage of small volumes (although sometimes Resources remoteness, and inaccessibility, forest properties seldom of significant value) from remote areas can occur, and can be completely controlled and secured. Nonetheless, large-scale commercial illegal logging almost always Land border control measures, boundary demarcation, and involves significant networks of trails, roads, and land- detection of trespass are critical to theft prevention. Forest ings infrastructure. Proactive boundary control measures as simple as On the basis of information that should be available demarcation and posting signs have a second benefit: Securing from resource assessments and inventories, maps, and they can improve the odds for successful prosecution in other planning data, FMU managers should be able to 31 the event of trespass. identify specific areas within the management unit that FMU boundaries may be contiguous with the natu- need to be prioritized for protection. These may include ral limits of a forest canopy2; may coincide with natural recently logged areas, particularly in the case of selective features, such as rivers or ridge lines; may abut roads; logging systems, because of the presence of roads and and may align with national and subnational bound- trails in good condition. Errors in cutting back delin- aries. The total length of the FMU boundary, its com- eation can result in improper logging or theft (figure 4.1). plexity, and the nature of neighboring properties and In the case of clear-felling, areas adjacent to recent log- land users all are factors that can expose the FMU to ging may be prioritized. Settled areas within the FMU greater or lesser trespass risk. may be considered vulnerable, as would areas within While total boundary length is a component of tim- the economic radius of mills outside the FMU. ber theft risk, specific vulnerabilities along the bound- Among potentially vulnerable sites within the FMU, ary are likely to be more significant. Typically, these a ranking can be assigned according to the serious- will include points at which roads and trails enter ness of the risk and nature of the anticipated threat. and exit the property, outlets of rivers and streams, These sites should be located on maps and classified and human settlements near or adjacent to the FMU by some simple scheme (see "Controlling Access and boundary. Identifying these vulnerabilities requires Egress" below). good maps and knowledge of neighboring communi- ties and properties. 3The Landsat Enhanced Thematic Mapper (ETM) was introduced with Landsat 7. ETM data cover the visible, near-infrared, shortwave, and thermal infrared spectral bands of the electromagnetic spectrum. 2 Although some FMU areas encompass large nonforested http://earth.esa.int/LANDSAT/ inclusions. 4MINEF is the Ministry of Environment and Forests of Cameroon. whether and what level of threat s/he poses. Because tracking movement includes both authorized and unauthorized activity, it can serve as both a staff management and a security tool. Detection includes perimeter detection systems used on fences or placed in the ground to detect intruders. Intrusion detection should occur before damage can occur and thus should be designed considering the time required for damage to occur and the time required for a management response (box 4.1). Magrath. Surveillance is the ability to monitor a specified area W.B. and is a key source of intelligence collection. Surveil- lance can be done through an on-site security staff and Photograph: by mobile patrols covering the property by land, water, Figure 4.1 Improper felling due to poor surveying and air. Remote-sensing technologies include aerial skills. These logs were felled in error because the timber over-flights, aerial photographs, wireless/video sur- cruiser was unaware that he was marking trees within a pro- veillance systems, and satellite imagery. "In Cambodia, tected community forestry area. Lao, PDR. remote sensing has also been used extensively as part of the new independent forest monitoring system to detect changes in land cover, new roads, stockpiles of Prevention Threat logs and recent illegal logging activity." (Ouen and Vulnerability assessment based on a survey of physical others 2001) Theft features and infrastructure should be supplemented by historical information on any patterns of trespass and Timber knowledge of the distribution of resources within the 32 FMU. The mere presence of human beings in an FMU Box 4.1 Layers of protection: does not constitute a crime nor even necessarily a threat. Onion skin theory Especially in developing countries, forests are exten- sively used and occupied by many people who pose no The onion skin theory was developed by criminolo- danger to the management program. However, depend- gists to protect the most critical assets of an organi- ing on many considerations, community use of fire, zation. The concept is that the most critical asset is wildlife, and timber as well as other activities can con- found in the core of the onion and that each layer of stitute risks. The needs and rights of local communities skin around the core becomes another layer of pro- and traditional resource users should be respected. tection called "target hardening." When an asset is However, efforts will be needed to monitor the activi- target hardened correctly, appropriate security bar- ties of others within the FMU and to ensure consistency riers make up each layer. with the planned program. The outer barrier of the protection system must be In assessing the potential of different groups or indi- designed to trigger an alarm or announce that a per- viduals as threats, the means, motive, and opportunity petrator is attempting to penetrate the barrier. The model (chapter 2) can be a valuable tool. For example, "alarm" goes to a monitoring point that activates local people seldom will pose a significant risk unless the response force. For the protection system to be there is a ready market able to absorb large volumes of material. Knowledge of criminal businesses, military effective, the response force must reach the asset authorities, or others actively involved in controlling (onion core) before the perpetrator does. To ensure mobile sawmills or in managing log transport outside that the response force arrives first, each barrier (layer the FMU will aid in identifying serious threats. of protection) must have a penetration time assigned Intrusion detection is the ability to know when a per- to it. The more time required for the response force son has entered a secured area. It may include the abil- to arrive, the more barriers that must be installed. ity to determine the identity of that person and assess When developing an access control plan, forest managers must identify their assets and areas of their property/facilities that must be controlled Access Control using tractors and other equipment to place boulders The purpose of forest access control is to manage and and other natural materials on the road surface, return- limit access. Because of their large size, strict control of ing it to its more natural state. Use of a gate must be forest boundaries is almost impossible. In addition, based on a legal right by law or regulation that restricts such control very often would be undesirable or even public vehicular access into forest areas after logging illegal because of the needs and rights of local commu- operations, or restricts being on a road closed by order nities and others. Access control is a set of policies, plans, or regulation. Without continual monitoring and patrol procedures, personnel, and physical components that of areas closed by gates, the effectiveness of the gate and provide control and awareness of assets and activities intended restriction will dissipate over time. Thieves on a forest company's property, including facilities and will find routes around the gate or tear it down. restricted areas. Access controls regulate the flow of Boundary demarcation. Field boundaries should be people, vehicles, and materials into, out of, and within agreed by the relevant parties and linked to secure a protected zone. Controls segregate property or build- survey or boundary markers (chapter 3). Boundaries ings into distinct zones, sometimes referred to as pub- also should be linked to geographic positioning sys- lic, operational, and restricted areas. tems (GPS), particularly if the former cannot be Different levels of access are assigned to different related to obvious physical features such as roads, individuals depending on their duties and responsibil- fences, rivers, or other topographic features. In addi- ities. Access control regulates who should be permitted tion, boundary markers such as tracks, cut-lines, and Resources access to forestry land, forestry buildings, and restricted painted or branded trees should be used to minimize the risk of boundaries being inadvertently missed or and areas; what they can access (wood lots, heavy equip- deliberately moved (figure 4.2). ment storage, fuel supplies, forestry buildings); and Land Few trees will be exactly on the boundary line. For when they can access these areas (certain days of the those that are, the owner must place two marks on Forest week or shifts). Access control also includes the ability opposite sides of the tree so that the line passes through to observe and track movement in and out of controlled the marks. When there are not enough trees on the line Securing areas. The forest manager can grant access to employ- ees, contractors, and government officials and assets, 33 depending on the needs and restrictions established by the company. Access encompasses not only people but also vehicles, heavy equipment, and materials. When developing an access control plan, forest managers must identify their assets and areas of their property/facilities that must be controlled. They then can make decisions about who will be given access to the various areas of the property and the assets. This access may be from roads, (main roads, trails, cut lines), water (rivers or lakes using water taxis, log barges, tugboats, cutout log canoes, rafts), or air (fixed wing or helicopter).5 Magrath. A contact clause that requires the contractor/licensee to close roads after logging activity can limit vehicular W.B. access to the area after logging. For example, placing a gate on the road may not limit access as effectively as Photograph: Figure 4.2 Paint-marked boundary trees. Paint marks on trees are the most common way to mark forest boundaries today. Forestry supply houses and some hard- 5In addition, because many access management tools have mul- ware or farm supply stores sell long-lasting paint made tiple security roles, access management efforts can be tightly woven especially for this purpose. Each mark should be 4­6 in into an overall security strategy. Access management should be a critical component of a forest management plan. However, to ensure (10 cm × 15 cm) on a side and approximately 6 ft (2 m) compatibility with other, nonsecurity goals, these strategies must be above the ground. Only trees that are vigorous and not less integrated into company-wide planning efforts. than 4 inches in diameter should be marked. Box 4.2 Signage A significant number of "no trespass" signs should be erected on a property to ensure that potential intruders are aware that they are entering private property. "No trespass" signs should be installed along the boundary lines and at each entry point. An individual must be able to easily see the signs when approaching the perimeter. In multilingual areas, signs must be in the local language(s) as well as in English. "No trespass" signs should be posted at all principal Magrath. entrances, in the lines of sight, and at all corners. Signs W.B. should be legible under normal conditions at not less than 50 ft from the entry point. Signs should inform the entrant of the requirements (search of the person, vehi- Photograph: Boundary markers can be simple signs placed along the cle, packages) or prohibitions (no smoking, matches, perimeter of protected areas. Example is a U.S. National lighters) prescribed by the forest manager. Park Service boundary marker, Washington, DC. Prevention Theft Timber itself, marks that face the line must be made on trees A byproduct of these two methods is good fireguards. 34 within a prescribed distance of the line (1­1.5 m or Fireguards themselves can be used to mark boundaries. approximately 5 ft). The owner must be in sight of the Road boundaries serve multiple purposes: they are previous mark when making the next one. The goal is highly visible landmarks, easy to patrol, easily recog- that, once marking is finished, the owner can stand at nized, and make it hard for the criminal to deny having any point on the line and see at least two boundary seen them when trespassing. marks. Boundary-marking trees should not be har- Along both external boundaries and internal compart- vested. If approval has been given to remove a bound- ment and other boundaries, the design and placement of ary tree, a replacement tree should be marked. signs themselves are important security considera- If not enough trees grow on or near the line, or they tions (box 4.2). all are too small to mark, stone mounds, monuments, Physical barriers. Perimeter fences define the physi- other markers, or fencing can be used. Special attention cal limits of a piece of property, facility, or controlled should be given to marking corners. To make the cor- area; provide a physical and psychological deterrent to ners more evident, 2 or 3 "witness" trees can be selected unauthorized entry; channel and control the flow of and painted with 3 marks each, at 3-in intervals, 1 above personnel and vehicles through designated portals; the other. All the marks should directly face the corner. facilitate effective use of the security force; and enhance To deter trespass, property lines must be regularly detection and apprehension of intruders.6 Fencing can refurbished. They must be patrolled often and repaired be used as a barrier in various locations: as needed. Property lines also can include natural protective Perimeter of property barriers such as mountains, deserts, cliffs, ditches, water Forest buildings and critical infrastructure such as obstacles, or other terrain features that are difficult to fuel and power facilities traverse. Human-made barriers include roads, railways, berms, irrigation systems, and pipelines. Wide cut-lines 6 For detailed technical design information on physical barriers can be made through the forest by removing the foliage, including fences and gates, see American Society of Civil Engineers/ and bulldozers can make boundaries by clearing land. American Water Works Association 2006. Perimeter fencing seldom is realistic or appropriate for large forest areas Parking lots and structures sent by the deployment of defensive measures can jus- Log yards, heavy equipment lots, and maintenance tify the attempt (figure 4.3). depots. Although fences commonly are used to protect forests from animal browsing or grazing, fences are not very In appropriate settings, a fence7: practical for excluding human beings. Perimeter fencing seldom is realistic or appropriate for large forest areas. Gives notice of legal boundary of the outermost Small plantations, nurseries, equipment landings, and limits of a facility other facilities are more likely candidates for protection Assists in controlling and screening authorized by fences. As discussed elsewhere in this report, gates are entries into a secured area by deterring entry else- more amenable than fences to be being made theft- and where along the boundary vandal-proof, particularly if strategically placed on ter- Supports surveillance, detection, assessment, and rain on which off-road access is restricted. other security functions by providing a zone for Perimeter gates. Gates can be integral to perimeter installing intrusion detection equipment fences or can be positioned across roads, trails, and Deters casual intruders from penetrating a secured other sites in which their circumvention is difficult area by presenting a barrier that requires an overt (figure 4.4). Forest companies should consider the fol- action to enter lowing requirements for perimeter gate integrity: Demonstrates the intent of intruders by their Resources overt action to gain entry The number of perimeter gates designated for and Delays obtaining access to a facility, thereby increas- active use should be kept to the absolute mini- mum required for operations. Forest companies ing the possibility of detection Land should construct sufficient entrances to accom- Creates a psychological deterrent modate the operational requirements and ensure Forest Reduces the number of security guards required adequate lighting at egress and ingress points. and frequency of use for each post Gates should be of a material, and installed to Securing Optimizes the use of security personnel while provide protection, equivalent to the perimeter enhancing the capabilities for detection and appre- 35 barriers of which they are a part. hension of unauthorized individuals The space between the bottom edge of the gate and Demonstrates corporate concern for facility the pavement or firm ground should not exceed security 2 in (5.08 cm). Provides a cost-effective method of protecting facilities.8 Both gates and fences attract thieves and vandals. Replacing stolen gates, fence posts, and netting is a headache for forest managers. Nevertheless, damage to physical barriers should be anticipated and budgeted in the security plan. The possibility or even likelihood that barriers may be damaged does not mean that they should Tasmania. not be tried. The psychological and symbolic messages Authority, 7 Based on Chain Link Fence Manufacturers Institute Security Practices Fencing Recommendations, http://www.associationsites.com/page. cfm?usr=clfma&pageid=887 Forest 8 Fencing can range from high-security grill to cost-effective chain-link. The term to describe the materials used to construct Photograph: fences is "fabric." The most common type of physical barrier for perimeter control is chain-link fencing, often installed with barbed- Figure 4.3 Chain gate. A mere chain across a forest wire outriggers. It is flexible, relatively inexpensive, and easy to road indicates the owner's concern and can help deter install around any size and shape of structure/security zone. casual theft. Tasmania. Tasmania. Authority, Authority, Practices Practices Forest Forest Photograph: Photograph: Figure 4.4 Locked gate with stop sign. For a more Figure 4.5 Vehicle barriers of forest byproducts as heavily trafficked road or for more vulnerable areas, a more gate. Many forestry byproducts can be used to create vehi- substantial gate and lock is justified. cle barriers. Stumps, logs, and/or large rocks can be placed strategically near entrance gates. Byproducts also can be used to protect assets within the forest by creating peri- All entry gates should be locked and secured or meter barriers around them. guarded at all times, or should have an effective Prevention entry detection alert system. Theft Gates over 6 ft (1.83 m) in height should have Unstaffed gates should be securely locked at all locks at the top and bottom to ensure that the gate times. Hardened chains and padlocks with key Timber cannot be pried open a sufficient distance to retention features should be used to secure the 36 enable unauthorized entry. gates.9 Security lighting should be provided to Vehicular gates should be set well back from the deter tampering during darkness. public highway or access road so that temporary Perimeter intrusion-detection systems (PIDS) delays caused by identification control checks at and CCTV are appropriate to meet identified the gate will not unduly impede traffic. risk control requirements when the gate is not Sufficient space should be provided at the gate to under the direct visual observation and control of allow for spot checks, inspections, searches, and a security officer. temporary parking of vehicles without impeding A decommissioned road should be dug up or traffic. bermed on the inside of the gate to prevent vehic- At least one vehicle gate should be provided per ular access. enclosure to permit entry of emergency vehicles and heavy equipment. This gate should be at least Vehicle barriers. Barriers capable of stopping moving 14 ft (4.3 m) wide. vehicles include chain-link fences reinforced with cable, Forest companies employing a security force can reinforced concrete, pipe bollards, planters, ditches, provide a security guard house at the site perime- and berms (figures 4.5, 4.6). To stop moving vehicles, ter for permanently staffed gates. Jersey barriers and planters must be anchored in the Fenced facilities that employ electronic card access ground. The cables in the reinforced fence also must be systems should consider configuring the main anchored in the ground or partially buried. entrance gate with an automated entry control Clear zones. Clear zones are areas set aside so that an system with closed circuit television (CCTV) to unobstructed area is maintained on both sides to make permit visual assessment and record vehicle license concealing a potential intruder more difficult. Clear zones numbers. For unattended/inactive gates, forest companies 9Key retention means that the key cannot be retracted from the should consider the following requirements: padlock when the shackle is open. Ensuring presence in the forest is another fundamental connection between the general quality of resource management and protection that cannot be overemphasized are programmed for high-risk areas that have a history or Tasmania. increased likelihood of illegal activity. The objective of sur- Authority, veillance is to detect emerging threats before crimes can take Practices place. Ideally, threat monitoring Forest is designed to provide sufficient Large logs Boulders warning and notification to responsible authorities in time Photographs:Figure 4.6 Vehicle barriers of forest byproducts at each end of gate. to enable meaningful deterrent Installing barriers on the sides of gates restricts traffic from going around gates. response. The desired result is layers of protection and poten- can be particularly useful in connection with surveillance tial warning designed to provide opportunity to operations around selected potential targets and high- react (box 4.1). value resources. Fences should be constructed so that, whenever practical, they provide exterior and interior The routine presence and activity of forest manage- clear zones of 20 ft (6 m) or more. The clear zone should ment staff in the forest is the most basic and probably Resources be free of any object or feature that would offer conceal- most reliable form of protection against timber theft. and ment, such as a physical structure or parking area; or that The activity of forestry staff conducting inventories, could facilitate unauthorized access, such as an overhang- maintaining infrastructure, observing operations, and Land ing tree limb. When a clear zone is not practical, other conducting research, and all of their other myriad rou- Forest compensatory measures may be necessary to control tine tasks not specifically connected to security sends the access to secured areas. Appropriate supplemental protec- message that a forest is owned, controlled, and managed Securing tive measures include increasing the height of portions of and is not freely available to criminal intrusion. the fence, providing increased lighting, CCTV surveil- Unfortunately, the common standard is for forestry 37 lance cameras monitored from a remote location, instal- staff to be office-bound and inadequately equipped lation of intrusion-detection sensors, and security patrols. with transport, communications, and other basic field equipment. Ensuring presence in the forest is another fundamental connection between the general quality of Surveillance and Deterrence resource management and protection that cannot be Forest managers must decide how the range of security overemphasized. In many countries, "forest guards" management tools--guard forces, intrusion detection, used to be synonymous with "forest rangers." They and surveillance--can function as an integrated security were the stewards of the forest who managed and pro- system. These components are referred to as counter- tected their ranges. However, in an increasing number measures. They encompass physical, electronic, opera- of jurisdictions, the concept of all-encompassing "stew- ardship" is being lost or weakened as a result of a move tional, and procedural interventions that reduce away from the "territorial" model of forest manage- identified vulnerabilities of assets to an acceptable or ment to the "functional" model. At the operational manageable level as dictated by senior managers and level, increasing functional specialization causes forest often the risk manager. The two basic approaches to officers to concentrate solely on their specific responsi- countermeasures are: bilities and priorities and ignore other issues.10 1. Reactive. This is the predominant mode of response to illegal logging. Action is prompted by immedi- 10This shift is occurring at two levels. At the institutional level, ate issues in which illegal operations have occurred responsibility for forest management is changing from the one- or are occurring and the suspects, if present, are agency model (forestry department) to a multiagency model in which different agencies have separate (or overlapping and compet- potentially threatening. ing) responsibilities for different aspects of forest management 2. Proactive. Preferably, systems are in place to (inventory, sustained yield, contracts, biodiversity, timber sales, anticipate problems. Surveillance and patrols planning, and monitoring). As a consequence, agencies and officers often see Untrained, unqualified, and poorly supervised guard poaching and illegal logging as "someone else's" respon- forces in forestry have been associated with serious sibility. The single-agency control and territorial mod- abuses of local communities and with complicity in els of forest management are not necessarily appropriate criminal activity.11 Specialized expertise is needed to for all circumstances. Nevertheless, it is necessary for properly contract and manage these kinds of security roles and responsibilities to be clearly defined at both operations and to ensure compliance with local laws the institutional and work unit (FMU) levels. No forest and requirements and international standards. Such officer or staff should ignore any signs of illegal activity. expertise is especially necessary if security contractors At a minimum, every forest officer should be motivated or staff are to be armed (box 4.3). and able to at least report such signs to the responsible Some duties of a private security guard and a forest authority. The public should be able to see all forest guard, such as monitoring and detecting violations, officers as defenders of good (legitimate) forest man- may overlap. However, with meticulous planning and agement, not as being unconcerned about, or complicit communication, this duplication can strengthen efforts in, illegal activity. to deter or prevent theft of timber and other forest Forest officers often are the first line of information products and protect the assets of each entity. Required and defense against illegal logging, so it is imperative skills may include performing routine forest sector or that they clearly understand their roles and are properly timber harvesting inspection and patrol procedures; trained and equipped. To confront potential or actual investigation techniques; detecting, recording, and illegal operators, they need to have certain skills and reporting illegal activities; collecting and preserving evi- preparation. These include the capacity to collect evi- dence; monitoring forest crime to develop trends and Prevention dence, so that subsequent legal procedures do not col- identify problem areas; sharing intelligence; and safely lapse due to faulty evidence. Most importantly, forest contacting a forest visitor or violator. Where employed, Theft officers need skills in negotiation and dispute resolution security forces can provide the enforcement element in and in dealing with potentially threatening people. In the physical-security program consisting of personnel Timber many jurisdictions, forest officers do not carry arms specifically trained, organized, and equipped to protect 38 and have no arrest powers. They must be trained in the forest. knowing when they must call armed police or security Security should be deployed to provide coverage to with arrest powers. Higher level training is required for the most vulnerable areas and assets of the forest com- jurisdictions in which forest officers do have arms and pany. Patrols can be set up to check boundary lines, powers of arrest. especially in isolated areas and remote facilities. Due to In many jurisdictions, forest officers are not ade- the areas that must be covered, aerial patrols from hel- quately paid or resourced to carry out their duties, or icopter or fixed-wing airplanes may be justified. If the are paid so poorly that they feel forced or entitled to protected area includes large bodies of water, rivers, or supplement their incomes through participating in ille- coastline, boat patrols can be used. gal operations. Forest guards--whether forest officers Security patrols will: or security contractors--must be paid enough to resist the temptation of illicit activities. Serious action and Detect, report, and respond to trespass and theft heavy penalties must be applied to any officers who do Monitor critical parts of the forest property on a become involved in illegal operations. routine but random basis Security forces. In many countries, concessionaires and logging contractors may employ private security guards. Whether on a contracted or in-house basis, spe- 11For a discussion of related issues, see Colchester and others cialized security can be a major expense. It also can 2006. See also UN Basic Principles on the Use of Force and introduce many new risks and a need for continuous Firearms by Law Enforcement Officials 1990, http://www.coe.int/ management attention and oversight. Where the need T/E/human_rights/Police/5._Reference_Documents/s._Basic_ for specialized security cannot be avoided, it may be nec- Principles_Use_Force_Firearms_by_Law_Enforce_Officials.asp), and UN Code of Conduct for Law Enforcement Officials; http:// essary to re-evaluate the entire feasibility of sustainable www.coe.int/T/E/human_rights/Police/5._Reference_Documents/ forest management, so that recourse to armed guards p._Code_of_Conduct_for_Law_Enforcement_Officials.asp. See also can be seen as a protection measure of last resort. Koenraad Van Brabant 2000. It is necessary for roles and responsibilities to be clearly defined at both the institutional and work unit (FMU) levels Investigate illegal activities by conducting field Box 4.3 Firearms investigations and gathering evidence Conduct undercover operations for intelligence Risk is inherent in protecting public land assets and and prosecution private assets, employees, and the public in remote Monitor staff, contractors, and visitors by using areas, in which criminal activity may include violence. intrusion-detection devices and satellite imagery Therefore, it is important to consider whether for- to identify and detect threats and breaches in the est and private security guards should be equipped integrated security plan. with firearms. Country laws may allow or restrict pri- vate security companies, or even forest guards, from Satellite imagery. "Satellite imagery can detect indi- carrying firearms. However, if firearms are allowed, rect evidence of illegal logging activities, such as roads or it is extremely important that the use-of-force laws are illegal log-yards; or direct evidence, such as clear cuts or clearly understood. Carrying a firearm is not intended intensive selective logging in prohibited or unallocated to force compliance with a law but rather to protect areas [figure 4.7]. Analysis of time-sequenced satellite the security guard or enforcement office when his imagery can provide clear indications of the level of or her life or the life of another is threatened. It is activity in specific places." (World Bank 2000) Satel- essential for FMU managers to define in writing poli- lite imagery is used as a security tool in the forest cies toward the carrying and use of firearms by those industry to: Resources involved in forest protection and timber harvesting and operations on public lands.a Most important, collect data remotely Land Enable visual overview of forest companies' Poor training and lack of understanding of the pur- properties Forest pose and legal use of force associated with a firearm Identify boundary lines if marked appropriately or any other defensive protection equipment can Identify roads, access points, buildings, and Securing result in misuse, such as displaying a firearm to get equipment a violator to obey the law, or further violence and 39 Show where logging, legal and illegal, is taking place injury. Arming security forces also can lead to serious Document infractions abuses, such as protecting those engaged in timber Record objective evidence suitable for court theft or prohibiting public access to public lands. Once Prioritize and monitor operations any such abuse is suspected or reported, immediate Identify start-up fires response is required to stop the unwanted activity. Contract clauses for private security guards should provide for immediate suspension of contract activity until the breach of contract is resolved or, if the mis- use of a firearm was serious, the contract is cancelled. Situations involving reported misuse of firearms by a public land management agency or police agency charged with enforcing forestry laws should be han- dled through an investigation conducted by an inde- pendent source such as another police agency. The forest officer(s) or police officer(s) charged with mis- use of firearms should be removed temporarily from enforcement duties until the matter is thoroughly Landsat. investigated. Note: Photograph: a. For references to research the use of force in law enforcement, Figure 4.7 Satellite images of forests. Roads, log see Adams 1999. landings, and skid trails can be readily seen on satellite images. Cambodia. Readily communicate findings to all relevant the incident can be shared in real time with first respon- parties ders. This technology can monitor the route of logging Accurately dispatch response forces to remote areas equipment or trucks, specific logs, and people in and using GPS coordinates. around the logging site. For example, a person may be loitering in an area Satellite imagery seldom is available on a frequency or or a truck may stop at a log sort during odd hours. cost basis that permits real-time dispatching of responses This software will issue alerts via onscreen audio/ to ongoing illegal activity, even if it can be identified. visual notifications and text messages, thus enhanc- However, there have been cases of large-scale illegal ing response time, as well as record a video of the inci- logging involving road construction, log landings, and dent for future review. mills that have been identified from remote imagery IVS allows a logging site to improve situational aware- (chapter 6) Most often, use of satellite imagery in tim- ness by providing proactive security for the exterior ber theft prevention will be restricted to planning and perimeter and interior operational areas without imped- risk assessment. ing normal business operations. The technology sets Other technologies. Wireless/video surveillance sys- rules that monitor the movement of vehicles, objects, tems are designed for remote applications and can be and people into and around the logging site. It identifies, either covert or overt. They operate using batteries and classifies, and tracks vehicles, objects and people, and solar power and transmit video over single or multi- then automatically detects activities that violate the channel formats. The systems provide rapid deployment rules. It also enables tripwires to be set at openings in the to target areas, scalability, and secure data transmission. perimeter fence or around assets that require additional Prevention Closed-circuit television (CCTV) assists in deter- protection. If there is no fence, the software can create a rence, surveillance, apprehension, and prosecution. virtual fence. The end result is more efficient security at Theft Industry "best practices" add CCTV applications to reduced expense and enhanced protection against un- corporate integrated security systems. The latest digital authorized entry of people and vehicles. Timber video recorder software delivers an intelligent surveil- 40 lance solution. This new technology can be integrated with a company's legacy CCTV equipment or can take full advantage of communications technologies to deliver software-based camera switching and control as well as digital recording. Automatic cameras, such as those used in wildlife surveys, also can be deployed. While these systems do not directly prevent theft, by possibly heightening the risk of detection, arrest, and punishment, they may be deterrents. To maximize deterrence, the FMU may want to publicize the pres- ence of cameras and surveillance equipment.12 Video analytics, also known as IVS (intelligent video surveillance), is an emerging market for security that enables its users to easily monitor and secure areas with Inc. security cameras. With this new state-of-the-art tech- nology, logging operations easily can monitor high-risk Systems, areas with sophisticated software that makes detecting Nice threats and trespassers simple and effective. Using IVS, a logging operation can protect its phys- ical boundaries by layering in virtual barriers based on Photograph: its safety and security policies. When a breach occurs, Figure 4.8 Railway track trespass. Monitor shows trespass into a restricted area. The pan tilt zoom (PTZ) cameras will track the individual's movement and location 12See also British Security Industry Association 2006. until a response force arrives. In many forest areas, conventional layers of protection are impractical and prohibitively expensive the surrounding agricultural fringes are poor and vul- nerable. Rural communities dependent on forests for environmental services and for income can play a key role in sustainable forestry and discouraging conflict timber incidents. Because rural individuals live in prox- imity to forests, they likely will have high-quality infor- mation about activities occurring in them (Thompson and Kanaan 2003, 31). One extension of the Integrated Conservation and Development Project (ICDP) approach (discussed later in this chapter) is called "social fencing," an innovative VistaScape. and highly effective form of perimeter security and activity control. Social fencing makes local people the eyes and ears of forest owners (figure 4.11). In social Photograph: Figure 4.9 Port facility. Corporate Security builds vir- fencing, local peoples voluntarily protect forests with tual barriers (orange outline) using software that automati- no enforcement. This system greatly enhances the secu- cally detects potential security breaches (boat in green), and rity of a forest management district and prevents the then shows the location and close-up of the boat with PTZ entry of wildlife poachers and illegal logging. Resources cameras. Social fencing can transform indigenous forest prac- tices. For example, villagers have been transformed and from timber thieves into forest protectors. Social fenc- Land IVS can be integrated with Automatic License Plate ing can be either active or passive: Recognition. ALPR is an image-processing technology Forest used to identify vehicles by their license plates, drivers Active. Village-based teams go into the forest through facial recognition, and loads on the vehicles by actively looking for wildlife poachers and illegal Securing load tags (chapter 5). loggers. This approach involves planning patrols, 41 Social fencing. Due to the topography and lack of selecting and training villagers, establishing pro- roads in many forest areas, conventional layers of pro- tocols for intervention and response, and setting tection such as perimeter security including fences and up reporting and record-keeping systems. Partic- gates often are impractical and prohibitively expensive. ipation in patrols could be based on individual The majority of the people who occupy forest areas or wages, on benefits provided in cash or kind to the community at large, or both. VistaScape. Photograph: Krishnan. Figure 4.10 Airport. Corporate Security also can build P.G. virtual barriers based on characteristics such as height, speed, direction, and time. When a security violation occurs (vehicle stopped by fence for too long, and the boat travel- Photograph: ing toward the airport foreshore), the PTZ cameras automat- Figure 4.11 Social fencing. Local women are mobilized ically track the violations and send alerts to the guard force. to guard the Periyar Tiger Reserve, India. Theft is predictable based on careful analysis, and analysis can identify meaningful responses and mitigation measures Passive. Passive social fencing involves generation 3. Reaching agreements on land-use zoning of understanding and a high level of acceptance 4. Developing alternative livelihood options. and commitment by local people to a set of secu- rity goals and objectives. Based on their awareness These approaches can be relevant to both protection of these, community members are expected to be and production management. They ought to be docu- alert to security risks and violations that they mented in management planning and recognized as might observe during their everyday activities. components of a protection strategy. A passive social fencing system would provide Checkpoints. Once theft has occurred, checkpoints awareness training broadly throughout the com- along transport routes are a fallback to attempt to capture munity, establish reporting mechanisms and illegal loggers. Checkpoints do not require advanced and response protocols, and provide incentives for costly technology. Case studies have demonstrated that participation. For example, a villager notes a checkpoints can be effective in detecting wood that has truckload of logs going by the village in the wrong been logged, or is being transported, illegally (box 4.4). direction. The villager does not necessarily per- Both stationary and mobile checks can be consid- sonally intervene but quickly passes the intelli- ered. The checkpoints can be set up on an owner's or gence to forestry officials to follow up. lessee's property, or on local government- or state- owned roads. Similar checkpoints can be established for Enabling indigenous people to share in the benefits logs transported by water. Some checkpoints are estab- as well as the management of forest development and lished at highway scales. On private or leased land, the commercialization alleviates poverty and diversifies checkpoints usually are staffed by either contract or Prevention sources of income. In practice, one of the most com- proprietary security. pelling reasons for using social fencing to manage for- Theft For checkpoints to be effective, they must be operated est resources has been governments' inability to police 24 hours a day, have laws that prohibit the movement of forest areas effectively and enforce their own rules of Timber timber at night, or physically block the access of a vehi- access and use without local public support. When local 42 cle through the checkpoint when it is not operating. communities and private companies share in the design, benefits, costs, and management responsibilities of forestry projects, they have incentives to cooperate in Conclusion enforcing rules to which they themselves have agreed. A great deal of experience and thinking has gone into While completely controlling trespass in large and exploring the problems and possibilities of combin- remote forest areas may not be possible, it is central to ing attention to local community development with prevent timber theft and secure the forest asset. The key forestry conservation, particularly in regard to parks points in this chapter are that, rather than ignoring and protected areas management. Integrated Conserva- threats and vulnerabilities, forest managers can turn to tion and Development Projects (ICDPs) build on the a number of useful concepts, practices, and technolo- basic idea of employing local communities to protect gies to bar criminal trespass. These range from posting resources. ICDPs emphasize attending to the subsis- low-cost signs and notices to decommissioning roads tence needs and economic opportunities of the com- and trails, and from developing social fencing arrange- munity that do not interfere with protecting natural ments to installing the most modern surveillance tech- resources. The ICDP approach, which is well docu- nologies. As introduced in preceding chapters, a central mented elsewhere,13 relies on: theme is that theft is predictable based on careful analy- sis, and analysis can identify meaningful responses and 1. Participatory approaches mitigation measures. After discussion in the next chap- 2. Working collaboratively with communities to ter of analogous issues in the management of timber identify nondamaging uses of forest resources transactions, chapter 6 discusses security planning approaches that can lead to integrated security plans 13See, for example, Chape 2001; Wells and others 1999. and programs. Box 4.4 Examples of checkpoints However, in remote areas, due to lack of equipment and human resources, road checkpoints are staffed only during the day. Plans are being made to have all checkpoints work- ing 24 hours and, in the absence of forest law enforcers on the checkpoints, to delegate forest law enforcement authority to any official agent (customs or police officer). Ecuador Jakarta. Vigilancia Verde (Green Surveillance) was created in Group, Ecuador in 2000 by a coalition of the National Police, APRIL National Defense Ministry, Ministry of Environment, and five NGOs. Vigilancia Verde is a supervisory body responsible for controlling the transport of timber Photograph: between the forest and processing and marketing loca- Weigh stations function as checkpoints. APRIL weigh tions. Thirteen fixed road checkpoints and 7 mobile station. Resources control points are being established. Each is formed by and 1 representative from the forest authority, 1 from civil Land Mozambique society, and 2 from the police. These teams operate One of the most important elements of the forest con- 24 hours. Their members periodically are reassigned to Forest trol system in Mozambique is the roadside checkpoints other control points. The system is funded by a trust that between the logging sites and the major ports and cities. receives 50 percent of the sale value of the timber that Securing At the checkpoints, government controllers check tim- is detected, confiscated, and auctioned. 43 ber volumes by category and track licensing compliance This scheme has already demonstrated its effective- (registered volumes also are used for tax collection pur- ness. In its first year, the volume of timber seized was poses). When possible, the work of these fixed check- nearly 600 percent more than that seized by the gov- points is complemented by mobile patrols. ernment during the previous year (Contreras-Hermosilla A new law forbids the circulation of large trucks at night. and Vargas Rios 2002). When a computerized link was The major checkpoints coincide with police posts so created for the whole chain, the possibility to track operate 24 hours. Persons transporting forest products license compliance online resulted in twice the volume during the night are halted by the police, are fined imme- of illegal timber being retained. diately, and undergo additional controls/investigation. Source: FAO 2005. 65 Securing Timber Transactions: Technologies and Systems Gerald L. Stuckey and William B. Magrath his chapter considers methods and systems to T to establish and maintain robust procedures for the ensure the integrity of timber transactions in conduct of timber transactions. To provide an overview which commercial sales are part of the planned of these issues, this chapter begins by describing fraud management program. Fraud and corruption in timber and corruption as general concepts and as they occur transactions are serious problems that can threaten the specifically in timber-based operations. The discus- viability of timber enterprises and entire forestry sec- sion describes the fraud triangle, a modification of the tors. Harvests and sales are the bases of the silvicultural means, motive, and opportunity model (chapter 2) used sustainability of commercial management. Theft or specifically to understand the occurrence of fraud. corrupt manipulation can endanger the forest, reduce Many of the general preventive measures available to economic returns to the landowner (private or public), respond to risks of fraud are similar to those recom- reduce public confidence in the value and integrity of mended to reduce corruption. Together these are the forest management, and introduce criminal behavior next subjects of this chapter. The discussion then turns into wood-based industries and stolen material into the to four main classes of abuse and crime that frequently wood supply chain. pervert timber sales: (1) collusion and deception in tim- Timber transactions can be corrupted in at least as ber sale contracting; (2) misrepresentation and decep- many ways as there are systems for land and timber tion in pricing, valuation, measurement, and other sales allocation, harvesting, and log sales. Wood volumes, provisions; (3) physical theft or diversion of material unit values, species, grades, and qualities can be misrep- during transport; and (4) fraudulent sales (misrepre- resented. Illicitly harvested wood can be commingled in sentation and sale of stolen logs and wood). For each of supply chains. Costs can be inflated, bids manipulated, these potential forms of timber theft, the chapter and taxes evaded. Timber theft includes underpayment reviews prevention techniques used in the private and based on un- or under-reported volume, underpay- public sectors to address risks of fraud and corruption ment based on misgrading or species misidentification, in typical timber sales systems. and manipulation of bids. Timber transactions subject Forest unit managers may find the security checklist to abuse and manipulation range from small sales (annex 5.1) valuable. By reviewing operations on a yes of firewood and building materials to local users to or no basis, managers can quickly see the areas that may the award of long-term concession rights by public be vulnerable. Managers may need to pay closer atten- agencies. All involve risks of some form of misrepre- tion to these flags or indicators. The security checklist sentation or deception with the intent of depriving also covers other nontimber-harvesting security issues. the resource owner of some of the value of the timber harvest. Fraud in Timber Transactions To control the corruption of timber transactions, two challenges face forest managers: to build and main- Timber theft can occur in various forms, but the result tain honest and ethical workplaces and operations, and is always the same: loss of timber or money properly belonging to the landowner or timber enterprise. There are two types of theft: robbery and fraud. Robbery is Rationalization taking another's possessions by force. Its prevention is generally a matter of controlling access (chapter 4). Fraud is theft by trick, deception, or misrepresentation; or crimes of opportunity, false statements, or confi- dence. Employee embezzlement, employee kickbacks, vendor fraud, and customer fraud are kinds of fraud.1 Fraud is a process of deception and opportunity; its most important ingredient is confidence. Unless one person has confidence in another person, fraud cannot happen. In most legal systems, "fraud" per se is not a crime. Pressure Opportunity Although not a crime of violence in itself, fraud can be an integral aspect of a number of crimes and can be Figure 5.1 Fraud triangle. thought of as a class of methods by which other crimes, including theft, are committed.2 Essentially, fraud is trickery. Two basic categories of fraud exist. Internal salaries by diverting public resources to personal use. fraud is committed by employees and officers of organ- Financial pressures that lead to fraud may not be izations. External fraud is committed by organizations entirely personal in their origin. Forestry agencies in Transactions against individuals, by individuals against organiza- some countries are severely deprived of official and tions, by organizations against organizations, and by legitimate budget sources. Consequently, managers Timber individuals against individuals. Fraud can range from may resort to developing parallel budget systems based minor employee theft and unproductive behavior to on diversion of revenues to support reasonable, but Securing misappropriation of assets and fraudulent financial unofficial and otherwise unsupported, agency expenses. reporting.3 These diversions, which themselves frequently are ille- 45 gal, are executed surreptitiously. Without transparency Fraud Triangle and disclosure, they can become subject to deepening The fraud triangle consists of opportunity, pressure, and abuse and distortion. rationalization (figure 5.1). This triangle is useful to The second leg of the fraud triangle is rationalization. understand the origins of fraud and to develop strate- Fraud typically evolves from routine activities that gies to identify specific threats and vulnerabilities as become distorted and misused. As participants tran- part of a prevention and deterrence program. sition from pursuing their formal, expected, and A variety of pressures or motivations can lead to legitimate roles and responsibilities to fraudulent fraudulent behavior. Financial pressures can include exploitation, they justify and rationalize their changing personal debt, medical bills, living beyond one's means, behavior. Some of the most common rationalizations greed, drug addiction, extramarital affairs, or gambling. are "I'll pay the money back," "I'm only borrowing it," Nonfinancial pressures include job dissatisfaction, "They owe me," "I need it more than the company," "It feeling overlooked for promotion, fear of job loss, or is a fringe benefit," "Who am I hurting?" and "It didn't wanting to challenge the system. In many developing seem dishonest." Because organizations are faceless, countries, the compensation systems for public forestry they often are the targets of fraud. Potential fraudsters agencies traditionally have been designed around the can rationalize that corporations and government expectation that staff will supplement their official agencies are not being victimized by theft, or at least can see them as not being important or morally relevant 1 Silverstone and Sheetz 2004. victims. 2 Opportunity is the final leg of the fraud triangle. Specific fraud crimes can include mail fraud, and conspiracy to defraud, computer fraud, bank fraud, and wire fraud. For a detailed Opportunity for fraud requires individuals in the legal analysis, see Podgor 1999, 729­69. organization to have access to assets, authority, and 3 American Institute of Certified Public Accountants and others. ability to conduct transactions on behalf of the Genuine commitment and serious attention of senior management and leadership are essential ingredients of fraud prevention organization, as well as freedom from close supervision. managers get complacent in their duties; some are In forestry organizations, it is common for individuals to afraid of finding problems. Other managers are afraid operate with great autonomy and independence. Forest that fraud prevention measures will offend staff and areas are large and remote, making close and frequent clients. supervision impossible or impractical. 4 Logging opera- To be both credible and effective, management com- tions involve movement of large volumes of material mitment must be demonstrated in concrete actions that long distances, with substantial scope for physical diver- influence the organization's operations. These actions sion, alteration of load documents, and other mischief. can include preparation and implementation of Many measurement systems widely used in forestry explicit, written security policies and plans (chapter 6), involve statistical methods, rough approximations, and assignment of security functions to specific qualified complex formula. The potential for legitimate error built staff, provision of adequate resources and mandates, into these practices can conceal deceit and abuse. and an ongoing and serious interest in the security program. Fraud Prevention and Deterrence Development of an ethical organizational culture Fraud risks can be reduced through prevention, deter- also depends on recruiting and hiring honest employees. rence, and detection measures.5 Fraud can be difficult Background checks, checking references, and following to detect because it involves concealment through fal- up on why a potential employee left previous employ- sification of documents or collusion among man- ment are basic steps that are often ignored. Employees agement, employees, or third parties. Therefore, it is should be made aware at the beginning of their employ- important to focus on prevention, reducing oppor- ment that honesty is expected and that, in the event of Prevention tunities for fraud to take place, and deterrence by per- dishonesty, sanctions will be applied. Staff training on suading individuals that there is a high probability of ethics and security awareness is another device to deter Theft detection and punishment.6 Fraud prevention and fraud and corruption. Training also should emphasize deterrence usually involve variations on three funda- red flags, security awareness, and how to report fraud- Timber mental elements: (1) creating and maintaining an ulent activities. Employees sometimes get complacent 46 organizational culture that values honesty and ethics; and think that fraud cannot happen around them. (2) evaluating the risks of fraud and implementation of Security should be a frequent discussion topic to keep risk mitigation processes, procedures, and controls; and it on the minds of everyone. (3) continuing vigilance from oversight processes and Organizational arrangements and structuring of job designated accountability mechanisms. responsibilities are other important components of Organizational culture. A consistent theme of virtu- organizational culture. Separation of responsibilities is ally all asset protection and security advice is that gen- an important organizational principle. Functions such uine commitment and serious attention of senior as financial recordkeeping and reporting should be seg- management and leadership are essential ingredients of regated from physical custody and protection of assets. fraud prevention. Managers must send clear signals that Separating production and financial responsibilities integrity is valued. They can do this by setting good reduces the opportunity for collusion among employ- examples. Short cuts, exceptions to the rules, not asking ees. It also enables greater reliance on comparison of tough questions, and closed-door policies that avoid financial and production data and reports as indica- the awareness of problems encourage fraud. Some tions of asset losses and theft. Job rotation is another management device to reduce fraud. Employees should physically move to different job sites and functions, and 4For an interesting discussion of how the bureaucratic culture of supervisory personnel should rotate to avoid opportu- the U.S. Forest Service helps to overcome these risks, see Kaufman nities for collusion, such as might develop between 1960. scalers and truck drivers or loggers. 5This section draws especially on American Institute of Certified The difficulties and challenges of developing ethical Public Accountants and others. organizational cultures in forestry organizations can 6Although the terms are related, specialists in fraud distinguish not be trivialized or dismissed. The recognized extent of between "prevention" and "deterrence." Prevention implies remov- ing the root cause of a problem. Deterrence is the modification of the illegal logging problem is a clear indication of behavior through the threat of sanctions. See Wells 2002. deeply entrenched and longstanding moral and ethical The weaknesses in many security systems are the lack of reconciliation of documents along the forest man- agement, timber harvest, transport, and delivery chain weaknesses in forestry. Some of the problems of illegal logging arise outside of natural resource management Box 5.1 Documentation and reconciliation organizations, but significant problems exist within Documents easily can be forged to fabricate an ille- them. To deter fraud, punishment of offenders is nec- gal load. If data is not recorded or is recorded incor- essary but demanding and difficult in organizations rectly at one point in the chain, the entire paper trail without traditions of discipline and accountability. However, not prosecuting and punishing perpetrators is compromised. Without strict adherence to these sends a very clear and destructive message to others. controls, illegal timber very easily can be introduced The need for self-aware leadership prepared to confront in the supply chain and become indistinguishable internal challenges and risks can not be overstated. from legitimate timber. Risk evaluation. Managers should be proactive in To tighten documentation and reconciliation, timber reducing fraud opportunities by identifying fraud risks theft prevention planners should ask: and vulnerabilities in their organizations. Experienced and observant managers usually will be aware of secu- 1. Is the system commercially robust? Has all crit- rity and fraud problems, and may have detailed knowl- ical information been collected? Is data collec- edge and information. In some cases, special audits, tion well engineered? Well monitored? possibly conducted with outside advisors or consult- 2. Are the data or information reconciled? Are ants, will be needed. In any case, managers have the exception reports being generated? responsibility to establish and monitor their organiza- 3. Are the data/exception report data easily tions' fraud risk-assessment and prevention activities. accessible to all involved? Transactions Managers should consider the organizational, indus- 4. Is the report easily readable? Does it highlight trial, and country-specific characteristics that influence critical information? Timber the risk of fraud. Risk assessment efforts should be 5. What actions are taken on red flags generated appropriate to the size and complexity of the organiza- from the reports? Who undertakes the initial Securing tion, but must recognize that fraud can occur in organi- investigations? How do stakeholders know zations of any size or type.7 whether red flags are being investigated? 47 Fraud detection relies heavily on the capacity to identify deviations from what is normal. "Exception reports" or "red flags" (chapter 2) are the standard tools used to identify possible fraudulent activity. Their use The weaknesses in many security systems are the lack of is dependent on the forest management units' (FMUs) reconciliation of documents along the forest manage- establishing and maintaining standard operating ment, timber harvest, transport, and delivery chain. procedures for routine transactions. Defining proper Data is collected at various points­­tree marking, scal- systems for bidding, timber sales, transport documen- ing in forest, scaling and grading at second landing tation, and other elements of the harvest and sales (stamping point), transport documents, and eventually process should enable the FMU to detect discrepancies, delivery documents at the wood processing plant. How- deviations, or exceptions that could reveal fraud. In ever, seldom is this documentation reconciled, and tim- many developing country forestry operations, proce- ber thieves and smugglers are free to commit fraud dures are consistently ad hoc. Documentation and crime with little chance of discovery or apprehension. reporting systems and practices are not standardized, Owners and employers must provide an easy and rights and authorities are so vague and overlapping method to report timber theft and other fraudulent that determining whether a transaction has proceeded activities. Ethics hotlines for staff and the public to properly is virtually impossible (box 5.1). report unethical or suspicious behavior should be Proper physical controls and audits are essential established, publicized, and monitored. Internal audi- throughout the timber sale process and supply chain. tors uncover only a small percentage of fraud, but tips from the concerned public and jealous individuals often uncover deceptive activities. Mechanisms for the 7For details, see American Institute of Certified Public Accoun- confidential submission of allegations and information tants and others. need to be designed to fit local circumstance. Means can range from advertisement of special telephone numbers or addresses for mailed submissions to designation of ombudsman or other officials. Input must remain confidential and the informant's identity kept secret until the calls are completely investigated. Oversight. To effectively pre- vent or deter fraud on an on- going basis, an appropriate oversight function must be in Stuckey. place. Oversight can be per- G.L. formed by many within and outside the entity. Oversight ar- rangements for public agencies Photograph: typically will be established by Figure 5.2 Low-cost covert camera system with lens. Cameras come in law and can include inspectors- a wide variety of types and cost. From digital to night vision to time lapse to tele- general, anticorruption and scopic lens, an FMU manager has a complete selection from which to choose. The Prevention audit agencies, and legislative one controlling factor is power supply. bodies. In private firms, over- Theft sight mechanisms can include the audit committee or framework. Most cases of corruption subject to preven- board of directors, management, internal auditors, tion at the FMU level will be in the petty corruption cat- Timber external independent auditors, and certified fraud ex- egory. Grand corruption in forestry, such as the wholesale 48 aminers. Cameras and video systems, which can be granting of industrial logging concessions to specially overt or covert, can be part of an integrated oversight favored interests, may be more significant in terms of system (figure 5.2). aggregate damage to the sector, and involves remedies and controls beyond the control of forest managers per se Corruption Prevention and Deterrence and beyond the scope of this review. Corruption is related to fraud in that both involve a Corruption prevention measures can be classified as degree of deception and abuse of trust. Corruption can either social or situational, as in the typology of preven- usefully be considered abuse of office for personal gain.8 tion measures discussed in chapter 2 (table 2.1).9 Social Unlike fraud, it is a general class of crime that is explicitly anticorruption prevention is directed at general social criminalized by law. It covers many activities and abuses, or economic factors. Its goal is to create conditions that including bribery, embezzlement, extortion, abuse of dis- are less likely to produce or support corrupt practices. cretion, and nepotism. Corruption is most often asso- Most social prevention measures are concerned with ciated with public officials but can involve private raising awareness of corruption, mobilizing people to individuals. It sometimes is classified as grand or petty refrain from corrupt practices, and setting the standard corruption. Grand corruption is corruption at the high- that integrity that is expected from those providing est levels of government. Petty corruption can involve the public services. Many of the social elements of anti- exchange of large or very small amounts of money, minor corruption programs are forms of empowerment that favors, or the employment of friends and relatives. Grand provide the public with opportunity and incentives for distorts the basic functions of government, while petty action against corrupt officials. corruption is part of the "normal" governance and social Most of what is discussed in this section falls into the category of situational corruption prevention. It 8 This section draws heavily from UN Office on Drugs and Crime 2004. 9See UNODC 2004. Where corrupt values and practices are institutional- ized, officials and staff resist reforms concerns reducing the scope for corrupt behavior and information be disclosed and accessible but also introducing internal processes and controls that in- that the information be gathered and produced in crease risks of detection and sanction. These comprise a clear and easily understood format. Internally, five main thrusts: regulating official discretion, reduc- transparency requires effective budgeting and ing procedural complexity, increasing transparency, auditing systems with access to information that changing employee culture and motivation and elimi- is accurate and sufficiently independent. nating conflicts of interest and disclosing assets. 4. Changing employee culture and motivation, and creating positive incentives. The culture and mo- 1. Regulating official discretion. In any organization, tivation of officials matter for corruption pr- to provide enough discretion for officials to be evention programs. Where corrupt values and effective while ensuring that abuse is avoided, a practices are institutionalized, officials and staff balance is needed between efficiency and ac- resist reforms, greater transparency, and other countability. Typically, as discretion increases, accountability mechanisms. Officials with low accountability falls and corruption becomes eas- standards of living are more easily tempted by ier and more widespread. Conversely, corruption bribes or other benefits of corruption. Low can be deterred or prevented with clear, con- salaries and living standards also are commonly sistent, and coherent decision-making criteria. associated with low morale and low self-esteem, These criteria reduce opportunities for abuse and both of which can supply rationalizations for cor- increase the likelihood that corrupt officials can ruption. Officials who enjoy high status and be held accountable. To control corruption, better remuneration have more to lose if they are Transactions accountability structures must operate continu- disciplined or prosecuted. ously and consistently. Internal accountability of officials also can be Timber 2. Reducing procedural complexity. Overly complex strengthened by management styles. Results- or procedures raise the potential for corruption. fact-based performance management systems Securing Bureaucracies with too many layers, overly com- tend to provide better accountability. Employees plex rules, and unclear lines for reporting and should be encouraged to provide information of 49 accountability make it difficult to distinguish wrongdoing by management, and mechanisms appropriate and corrupt conduct. Complex pro- established to handle such allegations. cedures can hide corruption and decrease the 5. Eliminating conflicts of interest and disclosing assets. effectiveness of controls by making it difficult to A personal interest that conflicts with official hold individuals accountable. Complexity often is responsibilities is not necessarily corrupt or im- exacerbated by other factors, such as the lack of proper. However, it can be if the interest is not dis- training and resources. This point is especially rel- closed or if it influences the exercise of public evant in forestry, in which staff frequently are functions. Many governments require officials to poorly trained and under-equipped and in which identify and disclose personal interests to try to technical, social, and biological complexities are reduce or eliminate conflicts of interest. When a inherent. In such circumstances, losses, dis- conflict arises or as a condition of employment, crepancies, and other signs of theft or corruption officials can be required to either dispose or divest. easily can be blamed on legitimate errors and mis- Requiring officials to disclose their assets, either takes, making it even more difficult to hold offi- publicly or to internal government agencies, pre- cials accountable. vents corruption in two major ways. Disclosure of 3. Increasing transparency. Transparency helps pre- assets and interests assists in determining whether vent corruption by reducing opportunities for conflicting interests exist. Requiring officials to corrupt transactions to go undetected. Public disclose their wealth and assets also provides a scrutiny based on transparency can lead to crim- baseline and means for comparison to identify inal, civil, and disciplinary actions and loss of subsequent illegal enrichment. Disclosure systems political support. Transparency may be inter- may be based on self-reporting but usually need to nal, such as internal audit systems, or external. be supported by provisions for sanctions of offi- Transparency requires not only that the relevant cials who misreport or misrepresent. "Hardening" Timber Transactions The security and asset protection task in timber sales administra- tion and planning promotes adherence to the management plan prescriptions and supports realization of the full value of sales to the timber business. Advanced technologies can play an important role in controlling illegal logging. Log labeling and tracking devices and surveillance BHD. systems can supplement sound SDN business practices (figure 5.3) and receive prominent attention Systems in discussions of the control of illegal logging.10 However, they Number are not substitutes for well- designed and well-implemented Photograph: Prevention timber sale administration. It is Figure 5.3 Commercial log labels. A commercial log labeling system tracks Theft more appropriate to think of a logs from stump to mill. A plastic tag indicating tree and log number is attached to mix of strategies aimed at miti- each log harvested. Another tag is placed on the stump, thus linking this tree stump Timber gating the particular vulnerabili- to these logs and completing the chain of custody. This system is very easy to rec- 50 ties and exposures of a specific oncile with cruise accuracy and harvesting separation. operation. This section describes four forms of timber theft and some of the most important From what location will it be sold? The specifica- prevention options. The discussion follows the process tion of the timber to be sold also determines the by which timber transactions typically are conducted: trees to be retained and provides the setting for from the definition and planning of the harvest and such specific sales administration and execution sale, through harvest, scaling, and delivery. Prevention activities as tree and boundary marking. The pre- of theft in timber transactions is largely an extension cise nature of the transfer of ownership­­before of an orderly and methodical approach to the timber felling, after felling, at a landing, or upon delivery business. to a site outside the forest­­are additional parts of the sale design. Basic Elements of Timber Sales Who are the parties involved? Successful sales rest on the legitimacy of the ownership claim of the While they are conducted in many ways, timber sales seller, the selection and awarding of tracts of land always involve determining: or timber assortments to specific purchasers, and a clear designation of the purchaser's agent(s) or What is to be sold? Any forested tract will consist representative. of a mix of resources. A specific timber sale typi- What are the prices, rates, and other terms? Timber cally will target only a portion of the entire man- is sold on various terms including by volume, by agement unit that can be defined by species, weight, and by area to be harvested. Charges can location, size, age, or other characteristic(s). be levied at the stump, roadside, mill, port, or other location. Taxes and fees also can be assessed 10Dykstra and others 2003. by species, grade, girth, and other qualitative dimensions. Sale terms should dictate the dura- management, and they drive many strategic and plan- tion of the cutting and transport period, security ning decisions. A variety of accessible and useful refer- deposits, payment arrangements, other terms of ences on timber sales administration and contracting access to the forest, and arrangements in cases of are available to the interested reader, including various default or dispute. The sale basis determines government operational and policy manuals.11 The measurement systems and allocates responsibili- focus here is to build fraud and theft prevention into ties for scaling and other aspects of the conduct of and on top of basically sound sales practices. the sale between seller and buyer (box 5.2). These and related choices are extensions of the 11See for example U.S. Forest Service and British Columbia man- basic forest management planning issues (chapter 3). uals at http://www.fs.fed.us/im/directives/ and http://www.for.gov. These choices are needed to meet the objectives of bc.ca/tasb/manuals/policy/resmngmt/rm-toc.htm, respectively. Box 5.2 Security implications of types of purchases Lump sum and per-unit (sometimes called volumetric extremely beneficial for both parties, but the landowner sales) are two common ways of structuring payment in takes a greater risk due to the critical nature of timber timber transactions. If timber volumes, values, and logging separation. Trees can be marked for felling by the seller, costs are known with certainty by buyer and seller, both or the harvester can select which trees to fell and which Transactions methods will yield equivalent returns to both parties. to leave behind. Normally, a cruise will be conducted Information is limited, and timber cruises are costly and before the sale is contracted so that the landowner and Timber uncertain. Thus, the choice of sale basis involves different purchaser both have an expectation about the potential distributions of risk for buyers and sellers and exposes timber volume and sale revenue. The sale may not Securing transactions to different risks of fraud and corruption. require as intense a cruise as that for a lump-sum sale, 51 Lump-sum sales sell the timber volume of an entire tract but the volume harvested will need to be scaled (meas- for a set price. The buyer assumes all risks and liabilities ured) to determine the amount due to the seller. for any shortfall from expected wood volume. Lump- The need for timber scaling introduces special risks for sum sales warrant a higher intensity cruise before buyer per-unit sales. There are a variety of recognized and gen- and seller close on price. The buyer also stands to gain if erally accepted scaling methods and standards prone to the volume harvested from the sale is larger than antici- different and known statistical measurement errors and pated. Thus, there is a motivation to maximize the use of biases. More importantly, the need for scaling introduces timber harvested, rather than leaving lower-quality logs specific risks of fraud and corruption. Scalers are subject lying in the forest. For the seller, a lump-sum sale requires to bribery, especially in developing countries in which pay relatively limited oversight and supervision. The seller scales are low and supervision is lax. Even automated knows whether the full amount has been paid or not and scales can be manipulated or circumvented. does not need to scale the volume of wood harvested. Despite their risks, volumetric sales can be necessary and The seller may need to monitor compliance with forest appropriate, especially in locations in which presales practices and ensure that the harvesting remains within inventories are expensive or uncertain (as is the case in the established cutting boundaries. These are relatively many mixed tropical forests) and in which the application easily and objectively assessed with few opportunities for of selective logging systems makes it difficult to predict manipulation. harvest volume. In these cases, it is possible to combine In per-unit sales, the prices for product and species are volumetric and area-based charges to better balance the negotiated or set by bidding before the contract and paid risks and benefits involved in the two sales methods. when the timber is harvested. This arrangement can be Every timber sale transaction needs to be documented by a written and recorded contract Every timber sale transaction needs to be docu- organized illegal logging organizations can mis- mented by a written and recorded contract. The contract represent timber and semiprocessed material to protects both landowner and buyer and addresses the either unscrupulous or unaware buyers as having basic questions listed above. It should define all obliga- been legitimately sourced. tions and rights related to the transaction. A contract offers more protection than a verbal agreement and is Preventing Collusive Practices in Timber legally binding. A contract should describe the sale area Sale Contracting and reference a map of the sale area. A complete de- "Collusion" is the making of an agreement by two or scription of the timber and species to be sold is essen- more persons to perpetrate fraud, or engaging in illegal tial. Buyers must verify that the seller or seller's agent activity, or in legal activity with an illegal intent. For has clear title to or ownership of the property to be sold. example, the British Columbia Ministry of Forestry def- Terms must be clear and easily understood. "Per-unit" inition of collusion covers: sales should include specifications for each species and product. The contract must establish the method Offer of an inducement to another bidder in an and terms of payment­­lump sum, per unit, or cash attempt to have the other bidder bid in a particu- advance­­before the sale begins. The seller must watch lar manner out for the unscrupulous buyer who might change the Threats made in an attempt to make another bid- prices and/or the units of measure. The payment for der bid in a particular manner wood is another area in which a thief may deceive the Agreements made not to bid in an attempt to innocent. Payments need to be made on a timely basis ensure that there will be no bids Prearranged bids.12 Prevention throughout the sale as the timber is cut. Theft If timber sales are contracted under collusive circum- Sources of Loss and Loss Controls stances, the seller likely is being deprived of the some of There are four primary ways in which timber trans- Timber the fair market value of the transaction. No sale admin- actions go wrong due to fraud and corruption: 52 istration or surveillance measures applied at later stages in the sale process can compensate for the effect of cor- 1. Collusion and deception in bidding, negotiations, rupt practices at the initial stages of bidding and award. and other phases of preharvest sale contracting. To protect against the risks of selling into collusive These frauds can be committed during the earliest markets, managers need to be aware of market condi- stages of the establishment of a logging operation. tions. They should be familiar with prices and terms The frauds can be committed by buyers acting of comparable timber sales in the area, know the range of alone, or can involve staff and officials from within potential buyers, and be able to identify indicators of the timber organization cooperating with buyers. possible collusion or manipulation. A timber sale must 2. Diversion of wood or timber at harvesting or during be based on a realistic assessment of the fair market value log transport (figure 5.4). Loggers and truck driv- of the planned transaction. This rule applies to sales of ers, with or without the connivance of super- timber from specific tracts as well as to the disposal of visors, have many opportunities to steal wood, long-term concession rights to large areas by public deliver it to unauthorized locations and mills, agencies. In large commercial operations, procurement engage in under- and over-invoicing, and commit and sales will be handled by specialized units and staff. other frauds. However, in all operations, local forest managers should 3. Outright theft or mismeasurement at the time of be aware of general market conditions in their areas. delivery and scaling, or in inventory. Staff and man- Other helpful measures can include: agers responsible for measuring, recording, and accepting deliveries are in a position to manipulate Making deliberate efforts to attract bids from a records, participate in many different kinds of large number of bidders through advertisements fraud, and abet and conceal fraud by others. and public notifications 4. Fraudulent sale of material (timber purchasers often refer to this as procurement fraud). Log- 12For details see British Columbia Ministry of Forestry at http:// gers, truck drivers, other shippers, and agents of www.for.gov.bc.ca/tasb/manuals/policy/resmngmt/rm16-25.htm Fraud victims often do not know their estimated timber volume or their timber's value Requiring written bids that include statements that bids are made independently Incorporating floor prices in tenders and offers Developing bid monitoring systems to identify patterns suggestive of collusion Holding public pre-bid conferences and bid openings Specifying in the sales prospectus penalties for collusion, including debarment from future sales. Specifying bidder qualifications at the time of Stuckey. advertisement to exclude operators with records G.L. of poor performance and questionable business conduct. Photograph: Contractors who are in financial trouble also may be Figure 5.4 Log truck hauling logs to mill, Laos. security risks. Qualifications should require technical During transport of logs, visual chain of custody must be capacity on the part of bidders to execute the contract maintained to protect against load diversion. Load tags, in compliance with the terms of the offer. The seller paint, stamps, and GPS locators are methods to ensure should clearly define the sale area on the map and on proper load transport. the ground. Delineating sale areas should deter cutting over sale boundaries. In the bidding transaction, the Transactions accessible format and be represented on maps showing seller must ensure that any prospective bidder, auditor, the harvest area and key transport infrastructure and or interested party can locate the timber on the ground. Timber routes. Cruise data can be compared with actual harvest data throughout the sale process to determine the various Harvesting and Timber Movement Risks and Controls Securing stages of sale completion. Accurate cruises may show Once sales contract terms are finalized, actual logging, problems such as receiving mills' under-scaling or mis- 53 transport, and delivery operations need to be mon- representing species mixes (figure 5.5). itored for compliance (figure 5.4). This monitoring An unscrupulous timber cruiser may over- or under- is sometimes referred to as sale administration. It cruise the sale to split the excess proceeds with either the typically involves scaling, supervising cutting areas, logger or the seller. If the estimated and actual volumes monitoring timber transport and deliveries, and and dollars are not within a given percentage, which is record-keeping. Supervision of sales will address termed "cutting out," the sale should be audited. In areas numerous issues not directly related to theft and fraud in which trees are cruised, numbered, and recorded, every prevention, such as compliance with forest practice standards, worker safety, and traffic management. Con- log should be accounted for in this process. Establishing trol of timber theft by misrepresentation during opera- an audit is a subtle way of putting the responsibility on the tions depends on the landowners having detailed cruiser and letting him know that someone is looking. information on the material that is being sold and The seller must make sure that bid prices are paid as installing and maintaining systems to identify devia- specified in the contract. When the sale is completed, the tions from the planned and authorized amounts. seller should compare the data. Discrepancies could be The seller should know what is being sold. Fraud victims red flags. Have all payments due been received, and often do not know their estimated timber volume or their does the rate of payment correspond to the rate of timber's value. If the timber is sold on a per-unit basis, the harvest? For example, if 25 percent of the area has been seller should make a comparison between the initial harvested, then 25 percent of the funds should have cruise and harvested volumes. Prior to the sale of forest been received. This aspect of compliance supervision products, the seller needs to conduct a timber cruise to requires coordinating financial and accounting staff obtain a detailed projection of the quantity of timber, with field supervisory staff. In public timber sales, com- species mix, grade, and other qualities. This information pliance supervision can involve different government will be the basis for comparison with actual removals and agencies. High-quality presales planning should enable revenue results. Information should be summarized in an the forestry agency to predict sales and revenues with time to time, managers should rotate foresters from one area to another. Foresters should not inform loggers of their vacations and holidays. Independent, nonprofit scaling bureaus have been formed in some places, such as the Western United States, to serve as arbiters between log sellers and log buyers. Although there have been instances of fraud involving scalers employed by these bureaus, disagree- ments between log sellers and log buyers are much less frequent with this type of system than when logs are scaled by the log buyers. Another possibility is for the Lancaster. J. log seller to do the scaling, the method normally used by the US Forest Service when it sells timber. Under the terms of the purchase contract, buyers are required to Photograph: accept the USFS scale. Of course, provisions are made Figure 5.5 Log yard with scaler. Logs are sold to a for settling disputes. delivery point and scaled to determine volume and amount to be paid. Scaling provides an opportunity for a log owner to be defrauded. Logs can be under-scaled by just an inch or Box 5.3 Kiting cm, their length under-measured, the number of logs mis- counted, or the wrong species recorded. Sometimes these Kiting ("robbing Peter to pay Paul") is a scheme famil- Prevention are mistakes. Log scaling genuinely is an art as well as a sci- iar to many foresters. The term describes covering Theft ence. Aside from measurement errors, legitimate differences shortages in one account or tract by taking funds or in assessing log quality and/or allowances for defects such as assets from another. Kiting is a simple method to "pro- Timber insect damage and stains can lead to large differences in val- vide" timber for a timber theft. This practice can be 54 uation. For managers to maintain control and quality, scalers used to perpetrate theft when a logging enterprise need to know that they are being monitored. For a manager keeps records of the amount of timber harvested by to simply put a crayon mark on the end of the log could areas or by accounts, but a thief can substitute or com- make the scaler realize that the logs have been scaled prior mingle wood from other sources, or of other qualities to the landing and the proper scale recorded. or species. Shortfalls are concealed, and harvests from another tract are substituted. This practice may be confidence. Finance authorities then can be in a posi- used to harvest low-value timber in exchange for tion to identify discrepancies (box 5.3). wood of a more highly valued species that is then sold A visible presence deters theft. One of the most impor- elsewhere by the thief, or resold to the original owner. tant functions of the entire timber sale process is inspec- Another scheme is to cut company stumpage and tion of the harvested area. It is the first line of defense credit it to an outside purchased timber tract. This against timber theft and a function that often is the most practice may be used to hide poor cruising habits, overlooked. Contractors can and will distract inspectors cover up a theft, or receive unearned sale incentives. to cover up theft. During their visits, foresters should look for unusual occurrences, such as contractors lead- Such practices hide fraud for a time or until an audit ing them away from specific areas. An effort to distract of the remaining timber is made. Sometimes, pro- can be a sign that the forester should come back later to curement foresters are paid incentives if purchased inspect. Foresters should avoid visiting harvest areas at tracts cut out the volume originally cruised and a the same time each day. They need to time their inspec- profit is realized. By kiting or crediting timber from tions at unscheduled hours and days, including days another tract to the original volume, foresters can when no one is there. Foresters and vendors see one look good on paper and collect incentives that are another every week, and friendships develop. Never- not deserved. Managers should be alert to buyer theless, inspectors need to stay at arm's length from incentives to manipulate harvest numbers. contractors. To avoid inappropriate relationships, from Many scale house frauds go on for years A vendor can alter a marked timber sale by marking additional trees. This increases the volume and covers theft. The owner should register paint with a manufac- turer or mix paint with special dye or material to make it unique. Doing so will help law enforcement to iden- tify that owner's paint. Special tracers and microtag- gants can be added to paint. These approaches cost more but, for high-value species, could be worth the added cost. Another tool is a transponder read by a hand-held device. Transponders can be embedded in trees in proposed harvest units to determine whether the right tree has been harvested, or in logs to determine Stuckey. whether the logs have gone to the proper mill. Another G.L. approach is to put in surveillance plots, in which trees are measured and located through a reference such as GPS but the coordinates are unrecognizable on the Photograph: Figure 5.6 Scale house equipped with cameras. ground. These plots can be revisited to make sure that This is a good example of a scale house equipped with cam- unauthorized trees are not being cut.13 eras that can record the front of the load as it arrives and Supervision of log transport. Cameras similar to those the rear as it leaves. Note that the camera captures the in common use to monitor wildlife can be installed names on the door of the cab and the driver's face. It also Transactions either covertly or overtly to record all material passing can see the chain of custody tag or paint on the front of the through the checkpoint (figure 5.6). Smugglers and Timber load. This scale house has two cameras located on the thieves will be reluctant to pass through a station with outbound scales as well. stolen logs if they perceive the possibility of being Securing caught. Enforcement officers also should be assigned to additional volume being credited for special pricing or 55 patrol secondary roads that thieves may use to avoid zone jumping. To compensate for longer hauling dis- checkpoints (figure 5.7). tances to the mill, foresters should establish different Branding hammers, bar-coded log labels attached to prices by zone based on the haul distances. Some mills the log end, and nail-based labels are available (fig- have found that 10 percent­20 percent of the received ure 5.8). Newer systems have a reader that can compare original cruise data by stem with harvested logs and material data sold to the processing facility. Geo fencing can assist in determining when trucks arrive or leave specific areas and locations.14 Real travel time and location information can be transmitted to laptop computers for tracking, along with maps and aerial photographs of the location. Mon- itoring the time it takes to complete wood deliveries Stuckey. versus the time normally required is one way to detect G.L. theft. The forester should know how much volume the contractors can haul during a given period. A reduction from the norm may be a red flag indicating theft. Photograph: Increased volume could indicate the creation of false Figure 5.7 Checkpoint gate, Laos. These check- tickets at scales and crediting to a special tract for pay- points are staffed by government officers to check for a ment. An increase in production also could indicate variety of products. The checkpoint is an ideal spot to check and record logs being transported to mills. In addition, the officer can count the number of logs on load. If a checkpoint 13Dykstra and others 2003. becomes too congested, an overt camera can record 14Dykstra and others 2003. events for reviewing later. Any labeling process has many flaws volume was paid at a higher price because of zone- jumping infractions. Loader sheets are another way to track what has been loaded and shipped to the mill (figure 5.9). Foresters should designate one person to record the trucks that are loaded, the product, departure time, destination, num- ber of logs or stems, and truck or trailer ID. This data can be reconciled later with tickets or covert camera sur- veillance. Another form of load identification is to use one-inch plastic or metal bands around the load and to secure the load with a load tag. Another approach is to strap loads with nylon straps that have a seal that can be broken only after the load has been properly identified. Stuckey. Thus, a loaded truck can travel a great distance from the G.L. harvest area to a mill site with increased security. Truck or trailer identification. By requiring contrac- Photograph: tors to label both sides of their trucks and log trailers Figure 5.8 Hammer brand. The clear impression with unique number, the forester can capture load ID made by this hammer is easily recognized. One drawback is throughout the harvesting process (figure 5.10). Scale the worn hammers used. Smaller hammers can be used to tickets at mills should capture these numbers for com- Prevention clandestinely mark logs that may be subject to theft for parison. A forester can make a "destination check" future identification. by recording the ID of the vehicle and trailer, time, Theft Timber 56 Mead Woodlands--Loader Sheet Company Name: Loading Operator: Tract Number: Authorization #: Date Time Wood Type Destination Trucker Name Trailer ID# 1 2 3 4 5 6 7 8 9 10 11 12 Stuckey. 13 G.L. 14 15 16 Photograph: Figure 5.9 Loader sheet to record time, date, and other identifying data. Sheets are filled in by a loader operator or crew foreman. Management should ensure that the sheets are being kept and the accuracy of the information is maintained. Foresters inspecting the harvesting need to verify loader sheets whenever they visit the job site. When the sale area is complete, reconciliation is done by comparing the loader sheet with the number of loads hauled. Verification of license plate and/or vehicle regis- tration mark, and/or facial recognition against database. ALPR can: Raise audible and visual alarm, if match Stuckey. Produce local log file to include plate patch, G.L. VRM, date and time, confidence level, and loca- tion ID. Photograph: The ALPR server will check all VRMs and license Figure 5.10 Log trailer with ID number. The large plates against multiple databases. Facial recognition numbers make it easy to recognize the trailer ID when pass- ing on the road or when video recording. ID numbers also software will check vehicle occupancy images against should be included on scale tickets for further auditing. databases. In the event of a match, the system will raise an audible and visual alarm on the user monitor installed in a secure location. Using other communica- location, direction, and product. The following day, tion technologies, both the alarm and the images can be they can check to see whether this truck arrived and transmitted to a response force. Transactions compare it with the findings. Without an identification Extreme CCTV uses infrared light and a camera to system, trailers lose their identity as soon as they leave take the image of the front or rear of the vehicle. An Timber the woods; the forester would have to follow the truck image-processing software then analyzes the images to the scale house or observe the staged trailer until it and extracts the plate information. This data is used for Securing was recoupled and pulled to the mill. The trailer identi- enforcement and data collection. When integrated with fication number enables the forester to radio the mill, an access-control system, the data can open a gate if the 57 request a routine destination check, and continue vehicle is authorized. It also can keep a video of the log working. The trailer ID system is an easy and efficient load, its load tag, and log stamps. way to track trailer loads of timber from the woods to In addition, forest products companies should con- the mill. sider implementing a load tag security system. Prenum- Automatic License Plate Recognition (ALPR) was bered load tags are affixed to a load of wood and listed developed in the 1990s. It has since undergone many consecutively in a contractor's shipment logbook (fig- upgrades. Its latest enhancements enable it to monitor ure 5.11). When the trailer is pulled from the tract, the movement of logs on logging trucks. The ALPR sys- there is no doubt in a contract compliance forester's tem can be installed at main entrances to logging oper- mind about the status of a particular load. If the load tag ations and designated checkpoints. The system can be number is not evident on a loaded trailer, it could be a designed to provide the following data: diverted load. If the tag is visible, the forester can trace Front license plate capture the load tag's number back to the contractor's shipment License plate patch records. These records should indicate the time and Vehicle registration mark (VRM) date of shipment, product, truck/trailer number, Front overview image driver's name, destination, delivery time for the load, Rear number (and/or log stamp/load tags) plate and scale ticket number used to weigh the load. The capture logging contractor should periodically submit these License plate patch shipment records to the stumpage owner and retain a Log stamp copy for himself. Load tag The combination of truck and trailer identification Overhead view of load image numbers and load tags give individual loads of wood a Vehicle occupancy image distinctive identity. Systems using a GPS unit, either available satellite system identifies the load, product, and destination of the material at the log deck.15 When selling "per unit," the seller must clearly state the specifications of the products to be separated, and the penalty for poor separation and damage. A seller also must insist that scale tickets accompany all settle- ments. A scale ticket stating where the wood was deliv- ered, time, date, scaler, volume, and product should accompany every load. In some locales, branding is used to identify logs' origin. Branding is one way to ensure that logs do not get "lost" in transit. Delivery, Scale, and Inventory Risks and Controls Chain of custody (CoC) is "the custodial sequence that occurs as ownership or control of the wood supply is transferred from one custodian to another along the supply chain."16 It is the method by which logs are tracked from the stump or deck to the processing facil- ity. Many innovative methods have been implemented to accomplish CoC. Forest check stations should vali- Prevention date the products being hauled, and inspect the bills of lading, transport documents, and number of stems on Theft the load. This process establishes a record for reconcil- iation to follow the chain of custody of legal logs and Timber deter illegal loads. Loads can be checked for fraudulent 58 transportation documents and other data. Stuckey. 1. Scaling is the measurement of wood volume and G.L. the process by which wood is turned into money (figure 5.5). It is the activity during which the greatest financial loss can occur during the short- Photograph: est time and is the most difficult to detect. Log Figure 5.11 Three-part load tag ticket. scaling is an art and a science. There are no hard One part of the ticket is stapled on the load; the second part is turned in to the scale house; and the third part is kept and turned in to the inspecting forester. Scale-house operators are 15Aldata Software, based in Edmonton, Alberta, Canada, offers a responsible to verify that the tag numbers are product called Custody Manager. It combines the power of a com- puter, connectivity of the internet, accuracy of GPS data, and relia- the same and that the number is part of the bility of satellite communications to provide accurate and timely ticket information. Compliance with this information on each load leaving the forest. The computer mounted requirement is stated in the contract. Tags are in the loader collects data on each load, including the GPS position placed on the load in a location that the forester of the load, and transmits that data back to the office before the load has designated. even leaves the tract. In addition, Custody Manager utilizes 3D motion data to build a loading profile while the loader works in the field. This profile can be utilized day and night to review each loader's activities and identify covert or overt, can track trucks and their loads from any unauthorized activity. Applying Custody Manager to an opera- deck to destination and all stops in between. The tion is a powerful tool to combat illegal logging, track chain of cus- forester should count the logs that are loaded on the tody for any certification programs, and deter the theft of logs from truck at the landing and compare them to the number the field. http://www.aldatasoftware.com/cm-overview.htm of logs received at the mill. One new commercially 16Dykstra and others 2003. and fast rules for assessing defects and making deduc- tions for large limbs, crooked stems, stains, in- sect holes, and many other conditions that influence the net volume and grades of logs. In some areas, the same load of logs scaled by 2 different scalers is almost certain to have net volumes Stuckey. that differ by as much as G.L. 20 percent simply because of legitimate differences in allowances for defects. For Photograph: example, one scaler may see Figure 5.12 Scaling unusual log length using rule tape. This particular theft indicators of internal de- case was of cherry blocks measuring 42" and sawn for banister balusters. Typical logs fects that the other missed. are measured from 8 feet up. This is especially true if the logs are scaled on the truck rather than in the mill unscrupulous contractor or individual. Many scale house Transactions yard. A policy on check scaling can be that unless frauds go on for years. the check scaler's tally agrees with, or is within a Other forms of fraud are caught very easily through Timber certain percentage of, the original, a red flag is exception reports. Many scalers are long-time employ- raised to trigger further investigation. ees and have assisted in changing and installing new Securing 2. Scaling methods and formulae vary with product equipment. They may be experts in knowing how the and use. In pulp production, scale weight is the system works and how to get around it if something 59 most common standard, and loaded and un- breaks. Scaling is an area in which "theft by default" is loaded trucks are weighed to determine wood true. The first time that a fraudulent ticket is created, it volumes delivered. The old method of scaling probably is an error. False or bogus tickets after that are pulpwood measured the height, width, and length more likely to have been created intentionally. to determine the cubic feet. Because of the higher Cameras, either video or still, are a necessity at any value, saw and veneer logs' volume is determined modern commercial scale house and serve as the main by applying mathematical conversions and for- deterrent to scale house fraud. Cameras record every mulas based on measurements of log length and transaction that takes place in chronological order. diameter, supplemented with deductions and Camera placement depends on which information is adjustments for defects (figure 5.12). needed (figure 5.13). Some cameras record the ticket number with a pho- Many scaling log rules are used. Some cater to the log tograph of the driver, truck, and product being hauled buyer; others that favor the sizes of the log both large (figure 5.14). Some scale houses have up to four cam- and small. The latter method is particularly subject to eras looking at the loads. Another scale house deterrent error or fraud because it is based on the judgment and may be new scales. Both a zero balance device and a guesswork by an individual. Weight measurements that single print device should be installed. Additional convert pounds per board foot have been calculated for deterrents are electric eyes around scales and account- various species. "Scale house" normally refers to the ing systems that do not allow manual ticket creations. weight scales themselves, but "scale house fraud" often All of the above inhibit fraud, but many unscrupulous is used to refer to any fraud related to log measurement, scalers have found ways around them. whether scaling by weight or stick scaling. Scalers have Any labeling process has many flaws. Nevertheless, it the opportunity to take millions of dollars by fabricat- is essential for industry and government to demand ing fictitious tickets and splitting the proceeds with an that logs and loads be identified during the harvesting, Hammer or branding. This is the most used method in the woods. Drawbacks are that the hammer's raised metal wears out and leaves only a small indentation in the wood (fig- Stuckey. ure 5.8). These marks are easily G.L. counterfeited and give no pos- sibility of identifying individ- ual logs in transport unless the Photograph: Figure 5.13 Scale house with weigh scale. When employing weight scales, viewer is up close. it is always necessary that the scale operator has a clear view of the front and rear Conventional paint. The for- of the scales to ensure that trucks are completely on the scales. Note that the oper- ester paints the ends of the logs ator can see the load, name of the logging contractor or hauling contractor, and with a particular color, putting condition of the material. An overt camera is installed on this scale house to capture a spot either on each log or on the front and rear of the load. only one log of each load. This method is used only to identify a log or group of logs, because merchandizing/separation, transport, and scaling proc- paint affords no way to record specific volume or esses. Forest certification requires that industry main- track tree identity. Paint is not recommended as a Prevention tain a chain of custody. Auditors now insist that logs stand-alone CoC method because, over a long and loads be identified and tracked throughout the har- period and with abuse, the paint will fade or chip off Theft vesting process. Commonly used marking methods are: (figure 5.15). Timber Highly fluorescent colors of 60 paint on log ends are easily rec- ognizable when the load passes on the highway (figure 5.16). Load tags made of paper or plastic are considered by some to be the best CoC method. Im- provements have been made to the various systems by adding barcodes that can be easily read and analyzed. However, a tag can be switched or removed and reapplied to another load. Paper tags often get wet, are not readable, and will not last a long time under certain conditions. Stuckey. Nail-based tags are imprinted G.L. with a machine-readable bar- code. These tags hold up better Photograph: in transport and weather, but Figure 5.14 Concurrent video recording from four scale-house cam- removing nails or not remov- eras. Cameras are focused to capture both inbound and outbound vehicles on the ing nails can be a severe prob- scales, and to capture the rear of trailers as they depart from the scales. The video lem (figure 5.17). easily can be reviewed for audit purposes and stored for further review of potential Magnetic strip cards ("smart" frauds. cards) may be suitable in the considered for log tracking but are too expensive to consider today. Multiple methods may be necessary to trace a truck- load of logs. Paint on the end of one log might indicate that the logs or load is coming from a particular desti- nation or supplier. A numbered, colored, or barcoded load tag can be attached to accompany the load to the processing facility. However, if tags are not collected Stuckey. and reconciled, this method is futile. A loader sheet de- G.L. scribing the species, destination, time, and truck/trailer ID can be maintained on the loader or deck (figure 5.9). To complete the process, these loader sheets must be Photograph: reconciled with the collected tag numbers. Using cam- Figure 5.15 Cant of logs numbered and stamped. eras to audit the loads transported from the sale is Log has been sawn, branded, and numbered accounting for another method to verify that loads leaving the tract the log and number of sawn cants. were delivered to the specified destination. Many areas have set up checkpoints at various loca- future, but cannot hold up under certain weather tions to inspect the logs being transported. Some of conditions and are very costly. these points are too overwhelmed by the number of Transactions Chemical, genetic fingerprinting, and radio frequency trucks to inspect the loads. However, by using detach- ID are among the more advanced technologies able, two-part tags or tickets attached to bills of lad- Timber ing, reconciliation of these loads can stop the hauling of illegal Securing logs (figure 5.18). Checkpoints always should be equipped with 61 cameras. Forest companies can use GPS systems to track transport vehicles suspected of moving illegal logs from their properties. Such sys- tems also can be used to protect high-end forest equipment. A GPS system enables a target vehi- cle to be tracked or monitored on a map, or to be protected by alarms. It also can be set to oper- ate in a "passive" mode for routine Stuckey. or periodic monitoring. The sys- G.L. tem uses cellular telephone for communication and a satellite- based navigation system to deter- Photograph: Figure 5.16 Highly fluorescent orange paint on load. Highly fluorescent mine vehicle location. The system orange is highly visible when approaching a log trailer on the highway. Specific col- includes equipment mounted in ors can be used to identify specific ownerships. The rule of thumb is that when the the vehicle being protected (or first stem is loaded on the trailer, the paint is applied. In this way, whenever anyone monitored) as well as equipment comes up on a log deck and the loader is loading, the log has been marked. Where and software on a personal com- the paint is applied is up to the load supervisor. Contrasting colors can be used to puter (PC) or laptop at a monitor- denote top size, product, subcontractor, and other characteristics. ing center. The vehicle segment of the usage developed by the Amer- ican Paper Institute (1991), the purchase of timber from contrac- tors or shippers without knowl- edge of the wood's specific source is termed a gatewood purchase. The sale occurs at the gate to a mill, rather than on the property of the timber seller. Although a long- standing and accepted practice in many areas, "gatewood" is a law enforcement security professional and auditor's nightmare. Wood traders and manufacturers that purchase wood from areas experi- encing high levels of illegal logging or that sell products to environ- mentally sensitive markets are paying increased attention to the possible sale/purchase of illegally Stuckey. harvested wood. G.L. Prevention The general strategy for re- Theft sponsible wood procurement in- Photograph: volves diligent efforts to ensure Timber Figure 5.17 Highly visible tag stapled to load. On this particular load, the that a wood seller can provide tag is located in the back so that anyone can see it after passing the truck or coming 62 satisfactory documentation of from behind. ownership of the specified tim- ber. High-quality forest manage- ment practices that embody the the system is a small device containing a GPS receiver/ kinds of security planning and awareness discussed transmitter and a cellular phone (satellite phone). throughout this report can offer a strong degree of con- Microdot technologies are being used to covertly iden- fidence in the legitimacy of timber origin. For example, tify more and more assets throughout the world. The lat- all tickets should include the landowner's name and est large application for this technology is on high-end location either by general location, such as county, vehicles. The system consists of thousands of microdots range, or township, or by GPS coordinates. Especially sprayed onto an asset. Each microdot contains a unique in areas in which the risk of illegal logging is high, gate- identification number. On vehicles, the dots are sprayed wood deliveries should not be accepted by mills because on noncosmetic surfaces throughout, including the drive they show the lax attitude and nonsecurity mind-set of line and suspension components. The same technique the scalers and their companies. couldbeusedonforestvehicles,heavyequipment,andcut Timber purchasers need to be alert to the risk of logs. When the dots are exposed to ultraviolet light, they being presented with, and their staff accepting, fraudu- glow "blue." Once located, the identification numbers can lent documentation. Receipts, certificates of origins, bereadwithasimplemagnifier.Thesheercoverageofdots bills of lading, and other documents are easily forged sprayed across an asset makes them too expensive to and altered. Staff should be familiar with local docu- remove, and it is virtually impossible to remove them all. mentation practices and standards; documents must be reviewed in the local language; and internal policies Procurement or Fraudulent Timber Sales should clearly specify that suspect documents should Risks and Controls not be accepted and should be reported. Procurement is the purchasing of raw material, logs, or A number of references have been developed and are semiprocessed wood for further processing or resale. In available to guide the introduction of defensible wood 3. Chain of custody (CoC) system that orig- inates in the forest and is in place through- out the supply chain 4. Wood Origin Control (WOC) procedures that control the wood that enters the sup- ply chain 5. Internal audit system 6. Independent third-party audit to verify the integrity of the system 7. Reporting system that informs stakehold- ers (customers and others). The TFT report also provides detailed guid- ance on adoption and development of Wood Control Systems for specific applications. Institutionalizing Administrative and Accounting Loss Controls Stuckey. G.L. Every timber enterprise must develop its own Transactions procedures and safeguards to protect the integrity of its business processes. The mix of Timber Photograph: Figure 5.18 Example of settlement or payment sheet with internal and external controls, specific red flags tag attached. Ticket shows contractor, landowner, date, species, for which it will monitor, and assignment of Securing and number of logs by species, trailer or truck ID, ticket number, and responsibilities within the organization will vary 63 scaler ID. with the nature of the timber business, its size and value to the organization, and its past expe- rience with fraud and theft. Annex 5.1 to this chapter procurement systems. The World Wildlife Fund Global contains a sampling of red flags. Appendix 1 presents a Forest Trade Network recommendations advise that detailed sample Security Checklist. Both can be adapted wood purchasers move toward procurement from to the needs of specific operations. management that is independently certified as sustain- Internal and external auditors should continually able (Miller, Taylor and White 2006; White and Sarshar inspect financial data for inaccuracies. An auditor who 2006).17 Tropical Forest Trust18 (TFT), an organization is familiar with forestry terminology or who has a that promotes forest certification and good forest man- forestry background is extremely helpful on an audit- agement to wood-using industries, has developed a ing team. Even the mere presence of an auditor may seven-part "Wood Control System" to guarantee use deter a thief. To cover up a fraud, documents must be only of what it calls "Good Wood": altered or misplaced. A good audit process will easily detect any manipulations or false entries in the records. 1. Wood Policy that identifies the kinds, qualities, Internal auditors complement a good security depart- and origins of wood that are and are not acceptable ment. They cause the perpetrators to wonder whether 2. Procurement program that ensures that the wood they will be caught and punished. used reflects the Wood Policy Key loss controls to restrain theft include: Establish a good audit trail to follow costs. 17http://assets.panda.org/downloads/keep_it_legal_final_no_ fsc.pdf and http://assets.panda.org/downloads/rpg_nopapercredit Keep detailed cost records of all transactions. 12sept2006.pdf Maintain and compare as many items as possible, 18Tropical Forest Trust n.d. from costs to harvest to scale weights. Orderly, documented, and well-executed business practices supplemented by a range of technical devices can be developed into an integrated security plan Look for unusual trends, unusual costs, and dou- forestry operations may be subject to review by agencies ble entries; they may be early red flags. representing other sectors or government functions Continuously look for identical entries to com- (finance or planning ministries), audit and accounta- pare with accounting numbers. Example: High- bility bodies, legislative oversight authorities, or other way departments' weights compared to mill scale accountability provision. Independent forest monitoring weights. (IFM) arrangements are relatively new accountability Have internal and external auditors periodically approaches in which, by agreement with state authori- review accounting functions. Security controls ties, a third party provides an assessment of legal com- will work only with scrutiny and continuous pliance, and observation of and guidance on official improvement. forest law enforcement systems. Monitors are expected Periodically retest programs and controls to to work in the public's interests independently of the ensure that they are accurate and have not been host organization.19 bypassed. In preventing fraud and abuse, external audits are a last resort. With sufficient mandate and adequate dili- Exception reports. The computer has simplified data gence and effort, external auditors may be able to iden- analysis. Reports that compare several sets of given tify fraud and abuse perpetrated by senior management parameters are called "exception reports." Exception or by lower level staff and contractors. Awareness of the reports are a major tool to detect fraud and can be presence and mandate of external auditors can be a scanned quickly for errors in the system. They function deterrent but also can motivate recourse to greater as red flags that require auditors' and managers' atten- sophistication and concealment. Ultimately, the pre- Prevention tion. However, exception reports are only indicators. vention of fraud and abuse remains an ongoing chal- An example might be a report that shows a log truck's lenge for senior management and enterprise leadership. Theft time weighing out before it was weighed in. Immedi- ately, a manager might think that a crime has been Timber Conclusion committed, but it may not have been. There may be two 64 sets of scales, one for the inbound trucks and one for the Timber transactions are susceptible to fraud and abuse outbound. The clocks may not be synchronized so that in the same ways as any other set of commercial trans- the outbound scale clock time was ahead of the actions. Orderly, documented, and well-executed bus- inbound. Other exception reports might include loaded iness practices­­from the hiring of staff and use of trucks that are weighed back-to-back weighing the standardized forms to the conduct of audits to the same or within several hundred pounds of each other. establishment of "hot lines" and ethics training­­are This situation often happens, but it needs to be representative of the wide range of practices that can reviewed. Has a duplicate or false ticket been created? help the timber business reduce theft. These can be sup- Another example might be that the same scaler always plemented by a range of technical devices, such as weighs the same logger. Is it just a coincidence, or a scales, cameras, and video surveillance as needed and as phantom logger? justified by the value and extent of a theft risk. These, External audits. Depending on legal and regulatory together with the trespass controls discussed in chapter circumstances, a forestry enterprise may be obligated to 4, can be developed into an integrated security plan, as submit to some form of external audit or review. Oper- discussed in the next chapter. ations owned by publicly traded corporations may be subject to independent audit. Government-managed 19 Global Witness 2005; Brown and Tucker 2006. Annex 5.1 Sample Red Flags for Timber Fraud Detection "A red flag is an indicator or warning sign that should Contractors who have poor merchandising prac- raise concern about the risk or possibility of theft or tices. This loss very easily could exceed all other fraud. A red flag does not definitively indicate theft, timber theft losses. Companies and individuals only that there is a significant possibility of a problem lose more money by poor separation than any that merits investigation and follow-up." (chapter 2, 7) other form of theft. Foresters should inspect what Examples of red flags indicating possible timber theft or is being hauled to the mills, especially the last load fraud follow. of the day. Sale administrators must make sure that the logging rates do not hamper or restrict Logs left or stored in the woods. A logger may be good merchandising. trying to get a quick load and haul it undetected, Products not listed on the contract being sepa- or it could be a crowded log deck. rated on the log deck. Although it may be only a Contractors who work on weekends, holidays, or small volume, higher value timber can be sepa- unusual hours. These are times at which very few rated to some markets for an extremely high price. inspections are conducted, so contractors have It may have been a small patch of timber that the unlimited opportunities to steal. cruiser missed, but it should be investigated. Contractors who do not comply with procedures. Complaints about a contractor. All such com- Red flags for scale house fraud: plaints should be investigated. Transactions Contractors who do not know the name or loca- Out-of-date scales that lack single print devices or tion of the tract that they are cutting. They could zero balances. Timber be a sign of kiting by the forester or manipulation Missing scale tickets and load tags. of tracts by the logger. Trucks spending too much time on scales and in Securing Wood deliveries on contracts that have not yet the mill. Scales open at unusual hours and on been opened or have expired or closed. Are they holidays. Holidays and late nights are good times 65 kiting or early signs of fraudulent activities? for deceitful scalers to avoid supervision. Trucks Sporadic deliveries from one tract that interrupt the other than log trucks enter and leave the mill at all regular flow of wood from another. Has the logger times of the day and night. Many of them have to moved, or is s/he delivering stolen logs? The truck cross the scale for accounting purposes; nights are driver may have erred by using the wrong delivery an excellent time to capture their weight to create ID card. Foresters should remove all truck cards fraudulent tickets. that are not pertinent to the current operation. Scales down for an unusually long time and man- Contractors who have multiple names, multiple ual tickets created. From time to time, scales are crews, and multiple tracts. Normally, these same down due to lightning, electrical problems, or contractors also have multiple trucking contrac- periodic maintenance. Unscrupulous scalers could tors. This distracting array is nothing more than create downtime to generate counterfeit tickets. If a license to steal. At any time, any load or truck ID downtime continues, managers must correct the cards can be switched. problem instead of allowing manual scaling. Contract truckers who haul from many suppliers, Changing products or species. to many mills, and at all times of the day and night. Pulpwood that is weighed in and paid as sawlogs, Firewood being harvested during normal sale poles, or high-value species easily can be being operations. Firewood harvesting for personal or scaled as lower-value species. commercial value should not be allowed during Two sequential loads that weigh the same. Loads the harvest of the sale. The easiest wood to gather weighing the same or within several hundred may be on the deck, and the easiest wood to split pounds of each other are common, but they need is sawlog material with very few knots. Firewood to be reviewed. cutters also may harvest commercially valuable Permitting courtesy weighing of products other timber and disguise it as firewood. than wood. Contractor's production abruptly changes. Em- this weight with what was scaled and resolve the ployers should know their logging contractors' difference. The number of logs on a load should production capabilities. be recorded by species to enable quick compari- Volume suddenly increases or decreases for no son with the mill scale. apparent reason. Such sudden changes need to be Unusual or incorrect mixing or segregation of scrutinized. logs at the mill or concentration yard. Managers Supervision of family members. Family ties run should notice sawlogs piled on a pulpwood con- deeper than company loyalty. centration yard. Is the separation of products Trucks working together. Truck drivers some- authorized, or could it be the new coffee fund? times increase their payloads by colluding. When Finding a separate pile is a good time for man- one truck is weighing in, the trucker behind it agers to check for discrepancies between book puts his front axle on the scale. The scaler weighs and actual inventories. the trucks, overstating the weights. On the out- Deductions for one logger are higher or lower bound side, the first trucker leaves the rear axle off compared to others. A good comparison is the the scales to decrease the tare weight, thus average deduction for all loggers. All loggers have increasing the net weight of the load. Placing an deductions from time to time. If a logger does electric eye across each end of the scales will not, managers should make sure that the logger is not allow the truck to be weighed if the beam is a real person and not a false name used to create broken. The scale edge should be painted to fraudulent tickets. increase visibility. Timber harvesting accounting controls: Prevention Yields below company or industry averages. Many publications and organizations publish the Establish the approval process on all sales, and set Theft average yield for a mill with a given head rig and the authorization for expenditure of funds or dis- certain other equipment in line. The employer Timber posal of assets at the highest level. should compare these numbers with what the When feasible, separate timber purchasing, cruis- 66 company's mill is doing. If the numbers are not ing, harvesting, scaling, and accounting. close, the employer should review all aspects of Send money received from harvesting operations the process to determine the cause, starting with directly to a banking institution for disbursement. the scales. Individuals should never be given the responsibil- Employees living above their income levels. Is the ity of collecting settlements from purchasers. scaler purchasing lavish gifts? What kind of vehi- Establish that accounting operations pay for tick- cle does the scaler drive? Is he buying large blocks ets as they are presented for payment by record- of land? Can he afford these on his income level? ing ticket numbers and comparing sale tickets Does the scaler have an additional business ven- when payment is requested. Numerous incidents ture? Is it related to the forest product industry? have been reported in which duplicate or false Is it a business that deals primarily with logging tickets have been turned in for collection. contractors? Create easily understandable accounting ledgers Several scalers using the same password to access and exception reports. Send them to various the computer. A different password must be managers within the organization for their re- assigned to each scaler who uses the computer. view. Document all entries and make sure that all Each employee must take individual responsibil- managers can understand them. Complicated ity for what s/he scales. documents, ledgers, and programs often are not Log scale differing from check scale. When selling reviewed, creating opportunity for fraud. logs by measured scale, scalers must keep a record Document all transactions for a particular sale in of what was shipped and the estimated volume one ledger. Doing so reveals the true costs of delivered. From time to time, supervisors should doing business. scale logs before they leave for the mill. Someone Separate other accounting functions, such as else should periodically scale the loads at either accounts receivable and accounts payable, as is the deck or in transit. Managers should compare standard in any accounting operation. Above all, never send checks or disbursements to sources of the wood being harvested. Such a tract the requester. Attach the proper supporting may have been completed, but because of a deliv- documents to requests for checks and accounts ered price associated with it, wood is being payable before they are paid. diverted from another location to capture the Verify vendors by independently checking physical increased price of the special tract. addresses and telephone and ID numbers. Many Data in the tract folder is incomplete or missing. audit programs are available to compare vendors' Maps, cruise information, tally sheets, and deeds information with employees' information. need to be in every purchased tract folder so that, The accounting department should control with no inside assistance, an independent auditor depletion of assets. Shrinkage factors are very can reconstruct everything that has taken place on common in the wood products industry. This the tract. factor is the loss­or may be the gain­from the Forester frequently needing extensions on con- original volume. Breakage, cull, and moisture tracts. The forester may be kiting by harvesting often are attributed to losses. Gains can be associ- company stumpage and charging it to another ated with fiber that is stored under water or a tract to cover up poor cruising techniques, theft, sprinkler system. These percentages need to be or another problem such as a loss on the tract. compared with industry averages, time of year, Name on the deed is different from the seller's. mill location, and specific mills. All discrepancies Does s/he have the power of attorney? Is this indi- should be investigated. vidual the landowner's representative? Tract names on scale tickets change constantly. Transactions Red flags for the accounting department: This is a good sign of zone jumping, a fraudulent special-price tract, wood that is being stolen from Timber Specially priced tracts that continually need one tract and credited to another, or a driver not extensions. Such tracts may or may not be the knowing where s/he is cutting. Securing 67 6 PlanningTimberTheft Prevention Richard L. Grandalski P rotection against the many threats and risks that global severity of illegal logging. responding after the can arise against forest resources and forest busi- fact is a clear failing in forest law enforcement. Despite nesses requires careful planning and deliberate growing recognition of the significance of the problem, choices that interact with the full range of resource few forest managers take proactive measures to mitigate management planning and operations. Earlier chapters their risks and exposure. Concerted planning is an essen- have introduced the logic and terminology of industrial tial first step. Planning should: asset protection, developed the idea that forest manage- ment decisions can be linked to timber theft risk, and 1. During the earliest stages, involve interaction explored in somewhat greater detail approaches to con- between the enforcement specialist and resource trolling timber trespass and hardening timber trans- managers and planners actions. This chapter discusses security planning as a 2. Install a monitoring system that generates the specific component of the general management plan- violation statistics and investigative data that will ning process. be thoroughly analyzed to develop the prevention Security planning at the forest management unit measures. (FMU) level should bring together the concepts dis- cussed in earlier chapters together into a sequenced and Additional groups and individuals who should be budgeted security program that addresses the FMU's involved are prosecutors; judges; other relevant govern- particular risks and threats. As discussed earlier, serious ment entities such as customs or border police and local security planning can build only on the kind of organi- and national police agencies; and local communities, zational culture that is sensitive to the risks of timber who can assist in vigilance to prevent theft. Incorporat- theft and fraud. There is no single standard or template, ing these groups as parts of a resource protection pro- and there are limits to what planning and action at the gram enables the development of a matrix of strategies FMU level can achieve. Notwithstanding, this chapter in the form of the timber theft prevention plan that describes what can be considered the essential elements should help close the gaps that allow illegal activities. of timber theft prevention planning. The chapter con- cludes with brief case studies that illustrate the use of Components of Security Planning the kinds of concepts and approaches discussed in this report to develop protection programs in three very dif- A timber theft prevention plan has three main pur- ferent circumstances. poses.1 The first is to ensure that forest management Given the need for deliberate and explicit security practices and authorized user activities comply with planning, planning is broken out as a specific topic. laws and regulations that promote sustainable forest Plan documentation is one of the most neglected and under-appreciated dimensions of timber theft preven- tion and forest law enforcement. As evidenced by the 1 This section draws on Dyson 2006. management and use. The second purpose is to ensure Applied across an entire forest management unit that commercial timber and nontimber forest product (FMU), the risk assessment will prioritize the physical exploitation occurs only in forests authorized for such locations and points along the timber sale process that use. The third and ultimate purpose is that of all preven- require attention in further security planning. In rank- tion strategies and actions: to prevent or mitigate illegal ing risks, the analyst (with input from the risk manager logging and other forest violations before they can occur. and/or FMU) will need to make explicit judgments about The foundation of a security planning process com- the value of the various assets at risk, probabilities of prises four components: risk assessment, security survey, damage and loss, and volume of material at risk due to analysis, and a written plan. The first three are summa- the possible different loss events. rized below. The next section details the fourth compo- nent: the typical contents of a written security plan. Security Survey A security survey is an on-site assessment of a property Risk Assessment to determine the security situation, identify shortcom- A security risk assessment is a methodical process of ings in protection measures, determine the needed level identifying the security issues and contributing factors of asset protection, and recommend improvements.2 that an organization needs to address: A security survey should be designed to anticipate the crimes that can threaten a property; recognize the oppor- What needs to be protected (assets, tangible and tunities, vulnerabilities, and threats that leave the prop- intangible)? erty susceptible to crime; appraise the significance of the Prevention From whom are we trying to protect them survey results; and begin the process of using the results Theft (threats)? to propose mitigation measures. What might make it likely that thieves will suc- As preparation for a security survey, the analyst should Timber ceed (vulnerabilities)? review: What happens if they do (consequences)? Planning What needs to be done to ensure that they do not Legislation and public policy considerations (countermeasures)? 69 Cultural issues Risk is the intersection of the three variables: assets, Police actions and specialized training in forest threats, and vulnerabilities (chapter 2). The basis for for- crimes recognition and actions mulating a concrete security program is a risk assess- Geography and topography ment. The risk assessment determines how and in what Security devices and systems ways these three variables present themselves in a partic- Physical security features. ular forest. To assess risk, the analyst must consider the full range of physical, biological, social, and commercial From site visits, planners would: aspects of the forest. This task includes reviewing relevant material and sources that might provide information on Obtain an appreciation of the topography and timber theft and forest asset security. Sources include: general forest and community environment Evaluate factors relevant to risk and vulnerability Previous surveys/studies (remoteness, road layout, places of concealment, Crime statistics accessibility, law enforcement resources and meas- Interviews with officials, nongovernmental orga- ures, conditions) nizations, and others Interview those with knowledge of forest crimes Law enforcement authorities and/or the forests/surrounding area Investigations and case reports Identify mills and potential consumers and mar- Reports of forest crimes in the country and sur- kets for stolen material, estimate mill capacity rounding area Other forest crime history information 2 See Fennelly 2004, chap. 3, "Security Surveys," in Fennelly, ed. Security best practices 2004. This citation includes sample survey instruments for a variety Media. of circumstances. The security planner's goals are to predict crime and to use the predictions as the bases to propose prevention measures and market size, and assess demand for different bases to propose prevention measures. Unfortunately, species, grades in moving from historical data and the observation of Assess resource management practices and wood current circumstances to the development of scenarios supply patterns from adjacent properties and other for possible future events, the security planner has few forest lands within the timbershed. standard templates or recipes on which to rely. To effec- tively assess risks and vulnerabilities, experienced secu- Planners also would assess the characteristics of the rity professionals voice the need to have a "suspicious forest area and would analyze past incidents based on, mind" or to think "like a thief." to the extent that they are available: While this advice may be accurate and helpful, con- verting it into specific formulae or models is difficult. Police reports Plausible starting points for the development of scenar- Incident reports ios include such assumptions as a continuation of histor- Media information ical patterns of violations or projecting a continuation of Previous surveys and studies. recent trends in violations (to the extent that either can be estimated). These or other planning assumptions can Security practices, program, and security personnel be justified or modified on the basis of changes in the also would be considered: drivers of illegal activity, as indicated by the risk assess- ment and security survey. Growing timber demand due Security-related policies and procedures to investments in new processing capacity in the area, Both local public law enforcement and contract new roads, changes in border-crossing controls, armed Prevention or proprietary guard force capacities (staffing levels, conflict or civil unrest, or political changes are among post orders, duty hours, response times, equipment the factors that can increase timber theft risks and call Theft provided) for intensified theft prevention measures.3 Even though Job descriptions, evaluations, training, hiring pro- these kinds of external developments may be beyond the Timber cedures, and supervision FMU's control, they need to be recognized by the secu- 70 Roles and actions of nonsecurity personnel related rity planner and factored into the analysis. to security personnel Changes in resource management or business prac- Security equipment and measures (road design tices by the forest enterprise are subject to the discre- and site plans, security devices use, environmental tion of the FMU. However, these changes also can have security features). security consequences. Employment of new staff, changes in logging and transport contractors, opening new log- Appendix 1 provides a template of a security check- ging compartments or coupes, road construction and list. This example, together with the list of red flags in the transport route changes, positioning of firebreaks, and annex to chapter 5, can be adapted to the specific secu- other management choices are examples. Security plan- rity concerns and operational practices of almost any ners need to be aware of these and other management forest management setting. The examples are intended intentions and need to be creative and imaginative in as tools to help the motivated manager and policy- considering their possible impact on timber theft risks. maker collect and organize information about histori- Security conditions also can be analyzed by decon- cal security problems and to systematically identify the structing the protection problem into its components. risks, vulnerabilities, and threats that confront a specific Annex 6.1 differentiates among forest management FMU. By simply checking off the items with yes or no, systems--national forest lands, industrial concessions, or making a brief comment, a manager can quickly for- protected areas, and community lands--showing how mulate a view of the areas that may be vulnerable and crime is expected to be prevented, detected, and sup- the threats and risks present. pressed. Annex 6.1 helps identify protection strategies that are geared to the needs, stakeholder incentives, and Analysis opportunities of the different systems. In analyzing information obtained in the risk assess- ment and security survey, the security planner's goals 3 See Associates in Rural Development (ARD), http://www. are to predict crime and to use the predictions as the ardinc.com/projects/detail_region.php?id=34 The most important measure of any plan is that it is implemented An example of a detailed analysis of fraud risk and publications circumscribe officials' scope for discretion its use in developing appropriate control mechanisms and facilitate supervision and audit. is the "Revenue Administration and Control Matrix" developed by the British Columbia (Canada) Ministry Contents of Timber Theft Prevention Plans of Forestry (reproduced here as annex 6.2).4 Ministry policy establishes that "The Ministry will assert the finan- The appropriate level and detail of formal written plan- cial interest of the Crown in its forest and range resources ning for a forest management unit depends on the size, in a systematic and equitable manner by establishing sophistication, value, and risks involved (chapter 3). A clear revenue administration and control standards and small woodlot or plantation managed directly by mem- responsibilities." (Policy 12.4, Revenue Administration bers of the local community normally would require only and Control) The ministry also will specify controls in the most basic planning and documentation. The docu- matrix form and direct the preparation of Revenue Risk mentation would need to address, in language and a for- Management Plans. mat accessible to community members, issues related to The matrix identifies the range of major forest man- operations, benefit-sharing, and participation. A simple agement functions and summarizes the related ministry sketch map could be adequate to describe the location policy and procedures. As the matrix summarizes, dif- of resources and the zoning of activities. ferent management functions are associated primarily On the other hand, large-scale, long-term industrial with different revenue-related activities and objectives, concessions will merit much greater planning effort. involve different controls, and require oversight from Planning would have to address the possibilities of signif- Prevention different individuals in the organization. For example, at icant environmental impact and risks to local commu- Theft the "pre-award" stage, tenure and cutting permit appli- nity interests and also would be justified by the potential cations are reviewed. Timber cruises and stumpage rates risks associated with what might be large industrial Timber determination contribute to the determination of the investments. The level of inventory precision, detail of revenue that is expected from the parcel. Revenue objec- mapping, intensity of consultation, and rigor of plan Planning tives related to other management functions include col- assessment and review would be expected to be of the lecting revenue, identifying and claiming revenue, and highest quality. Obviously, however, the most impor- 71 recording revenue. The matrix specifies the control meas- tant measure of any plan is that it is implemented. ures that ministry staff will exert, such as checking cruis- The same general principles should apply to timber ers and scalers, inspecting boundaries, and comparing theft prevention planning. Historically, some FMUs cruise and scale results. The matrix also specifies the stan- have experienced low levels of crime, are stocked with dards, or the basis of the standards, against which con- timber of limited commercial interest, and have low- trols will be exerted; and designates the assignment of intensity management activities or high levels of partic- responsibility for each subject. ipation from supportive local communities. Such FMUs The British Columbia system is designed around may not warrant heavy investment in security planning. what is essentially a concession system similar to that In these circumstances, integration of attention to secu- employed in many developing countries. A comparable rity concerns into the general provisions of the manage- matrix designed around short-term sales of standing ment plan could be sufficient. timber is used by the U.S. Forest Service. Both matrices If the primary objective of management is protec- summarize more detailed guidance contained in official tion from illegal threats, parks' and protected areas' operational policy manuals and handbooks. By defining plans might, in their totality, be tantamount to crime standardized routines for regular and recurrent transac- prevention plans. Concessions and publicly managed tions, policy and operational manuals and handbooks production forest lands in countries facing serious and are fundamental underpinnings to maintain order and well-established illegal logging problems could require control in widely dispersed operations. They provide an free-standing theft prevention plans, or at least specific easily accessible source of guidance to staff and clients. chapters in the overall management plans devoted to By defining procedures and accountabilities, these security. Based on risk assessment work in Cambodia, annex 6.1 suggests the kinds of issues that theft preven- 4 Also available at http://www.for.gov.bc.ca/tasb/manuals/policy/ tion planning could need to address across different for- resmngmt/rm12-4a1.htm est types and classifications. Subject to this general perspective, the specific con- management practices tailored to timber harvest prepa- tents of timber theft prevention plans typically will be ration, timber harvest administration, contact viola- drawn from, and include, the topics and contents dis- tions, and law enforcement activities. cussed below. 3. Basic Timber Theft Prevention Principles 1. Introduction and Background The plan should describe the fundamental philosophy The introduction of the plan needs to include a concise or principles that will be pursued in the security pro- statement of the land management agency's policy requir- gram. Principles should be specified in the most basic ing the development of a timber theft prevention plan. terms and can be formulated as if they would be used To have merit and meaning, the policy needs to be sup- as the headings in a staff training manual or program. ported and approved by the highest levels of the organ- Figure 6.1 shows an excerpt from a Cambodian Code of ization. Equally important, all levels of management Conduct for Eco-Tourism Rangers, which simply and must demonstrate commitment to this policy by issu- clearly states: "Ecotourism Rangers must not behave dis- honestly and corruptly," a message that could be con- ing directives that can be referenced in the plan's intro- veyed directly in a security plan. Principles also should ductory statement. take into account the vulnerabilities unique to the enter- In either its introduction or background section, a prise. The number and specific elements of each should plan would describe the overall resource management be tailored to the resource management agency's struc- context and plan (chapter 3). Included would be a basic ture, operational procedures, and risks. Other princi- description of the resource, activities, harvests, and works ples can include: that are planned and expected. The introduction also Prevention would discuss the results of the risk assessment, security Timber theft prevention will be the responsibility survey, and analysis; and would enumerate the main of every employee. Theft threats and key vulnerabilities that need to be addressed. No timber will be cut without an executed con- The introduction also should point out the impor- Timber tract, permit, or other legal transmittal document. tance of cooperation between the land management 72 agency and timber harvest contractors. The plan will enhance consistency in harvest preparation and admin- istration, and uniformity in the steps to reduce theft or unwanted activity. A plan will minimize misinterpreta- tions that can result when the management or enforce- ment program has no such uniformity and consistency. Collaboration between land management agencies and companies using private security can create a uni- fied effort to prevent timber theft and to protect assets. Close collaboration can be achieved by developing responsibilities and operational protocols in a timber theft prevention plan that will lead to a partnership approach to eliminate or reduce timber theft. 2. Objectives Objectives are the foundation on which to build a strat- egy that will lessen opportunities for violations and theft. Objectives should be measurable so that performance and outputs can be evaluated to determine compliance in meeting the desired results. During planning, objec- Figure 6.1 "Improper Conduct to Avoid. Eco- tives should be defined that will improve the agency's tourism Rangers must not behave dishonestly and ability to monitor and deter violators; and detect, corruptly." Source: Code of Conduct for Ecotourism apprehend, and prosecute them when theft occurs. In Rangers," BPAMP, Ministry of Environment, Cambo- addition, objectives would include practice of specific dia, n.d., 15. The plan should specify steps to guide managers and foresters during the timber sale preparation phase All timber sold, including additional cut, will have 5. Timber Transaction Security supporting recorded measurements and cruise Where commercial harvesting is planned, the plan should reports. identify the harvesting system or systems approved for All timber harvest contracts will require that tim- the FMU and apply the kinds of considerations discussed ber authorized for removal be marked or tagged in chapter 5 to the proposed operations. Regardless of with an approved tracking system. the harvest sale system used, the plan should specify steps No timber will be cut without prior designation by to guide managers and foresters during the timber sale authorized land management agency personnel. preparation phase. Steps include: The timber will be designated by approved mark- ing paint or tracking tags. Timber cruising standards. All timber harvest contracts will contain an area Timber designation standards. These criteria map showing the location of designated timber. should include security and accountability meas- All timber harvest contracts will contain approved ures to prevent counterfeiting or misuse of mark- transportation maps showing the approved haul ing materials to steal timber (tracer element paints, routes, log rest areas, scaling locations, and mill or tree identification tags, bar code tags). processing sites. Standards for boundary marking, cutting unit A cutting unit closure audit will be conducted for boundaries, transportation routes along with all harvest contracts. requirements, and mapping. Forest management and forest law enforcement Timber appraisal standards. Prevention will coordinate in accordance with established Bid-opening procedures. Theft protocols. The community will be involved in protection. In relation to sale administration, plan provisions might Timber address: 4. Access Control, Surveillance, and Deterrence Planning This section would describe actions, physical barriers, Use of independently certified personnel. and other measures to control entry, exit, and activi- Conduct of pre-operations meeting with managers 73 ties within the forest (chapter 4). Measures would be or contractors. selected and designed based on the security survey and Provisions to inspect sale-related activities and risk assessment. Physical barriers and gates, as well as documentation. areas to be prioritized for patrols and surveillance, Procedures to handle undesignated cut or dam- would be located on maps. Protocols for patrols and aged timber. incident reporting would be described, as would plans Standards to follow, including procedures to notify for use of staff, contracted security firms, social fenc- law enforcement if unauthorized cutting is discov- ing, or other approaches to surveillance. Specifics might ered, or theft indicators are found. include: Operation inspections, audits, and reviews by for- est managers and law enforcement specialists. Recommendations for road alignment changes, Preparation of harvest/timber sale closure checklist. road and trail decommissioning standards, and Post-logging inspections of all cutting units. Inspec- tree removals tions should include inventory and exploratory Use of gates, locks (disposition of keys), fences, harvest activities associated with road construc- and other physical barriers tion for future cutting units. Signage Definition of red flags and meeting data collection Definition of security zones and analysis requirements for exception reports. Specification of incident reporting and notifica- Security and accountability of tree-designation tion arrangements (names and positions of offi- material. cials to be contacted in case of various events) Community involvement and motivation ap- 6. Provisions to Ensure Industry Cooperation proaches An Industry Cooperation section will guide establish- Checkpoint locations. ment of communication links between the land owner and the private entities authorized to remove timber. Timber Theft for Managers (2 hours). Should be This section would prescribe specific ways in which provided to all forest managers with timber man- industry and land managers can interact to ensure that agement and/or other forest product management theft prevention becomes integral to harvest prepara- responsibilities. tion and administrative practices. For example, 9. Law Enforcement Protocol Timber theft prevention should be included as Procedures for cooperation between forest management an agenda topic at industry group or association and law enforcement personnel should be formulated in meetings. the security plan and before unauthorized activities are Antitheft material and advice can be jointly devel- detected. In the event of problems, joint protocols agreed oped and published. in advance with law enforcement agencies will enhance Forest law enforcement specialists should be invited cooperation, and public knowledge of such cooperation to attend pre-operations (pre-entry) meetings to can help provide a deterrent effect. Protocols also should discuss timber theft prevention measures. Their specify which personnel are responsible to do what, and attendance can facilitate cooperation. It also can identify actions to stop losses and to protect evidence help break down the negative perception that law critical in identifying the violator. The plan should doc- enforcement exists only to arrest violators. ument policies on the use of weapons and force, and on instructions to staff, contractors, and others on inter- 7. Program Monitoring Inspections, Audits, and Reviews vening in ongoing crimes. The plan should specify review of its own implementa- Prevention tion and effectiveness. Specific evaluation criteria and 10. Staffing and Resources data acquisition provisions can include: Implementation of a successful prevention plan depends Theft on adequate staffing to meet the land management Procedures for recording dates, times, and indi- objectives. The plan must realistically address mini- Timber viduals and firms involved in observed contract mum staffing levels and the funding necessary to meet 74 noncompliance issues and corrective actions; and the stated objectives and activities of the plan. At a min- for notifying management. imum, the plan should identify what specialties are Records of sanctions. needed; the required certification standards; and the Inspection routines. salary, travel, and equipment costs needed to support Joint inspections conducted with forest law the organization. enforcement specialists. In the discussion of cost implications, it is espe- Plans for adjustments in response to infractions cially important for the planner to identify the meas- (for example, increase inspection schedule when ures that can be undertaken at little or no cost, and to indicators of theft surface). distinguish them from actions that may have signif- icant costs or even be prohibitively expensive. For 8. Timber Theft Prevention Training for Forest example, a recommendation to avoid a road align- Management and Law Enforcement Personnel ment that could provide access to illegal loggers might An important ingredient in a meaningful timber theft not involve any additional costs. In contrast, a pro- prevention plan is to make explicit which specialized posal to install locked gates would need to recognize the training is required for personnel. Courses should be costs of the materials, management of keys, replace- designed and provided on a recurring basis. Suggested ment of lost and stolen keys, and replacement of dam- courses might include: aged and vandalized locks. Some security costs may not involve direct expen- Timber Theft Prevention (6 hours). Should be diture. Leaving areas unharvested or unroaded as provided to all land management field personnel. buffer zones will reduce the volume of wood available Basic Timber Theft Investigation (8 hours). Should for harvest. Installation of access controls on roadways be geared for and provided to forest law enforce- may slow or impede wood deliveries, and changes in ment personnel responsible for conducting timber inventory tracking procedures or methods could entail theft investigations. additional costs. A formal cost-benefit calculation might Timber theft prevention plans should be reviewed and updated regularly be appropriate in advising on some security options. The audit process should be built around specific However, risks and the effectiveness of risk mitigation criteria, such as to: measures always will be uncertain. In evaluating the justification of security costs, managers and policy- Define who is responsible for ensuring that audits makers inevitably will need to rely on judgment and are conducted and that appropriate authoriza- experience. tions have been delegated to carry out this activity. Select the audit team from another unit. To reduce Program Reviews potential conflict of interest, or the appearance of Once in place, timber theft prevention plans should be it, team members should come from an adminis- reviewed and updated regularly. This should be done trative unit other than the one being audited. annually for large areas that face serious theft problems Select team members to form a mix of special- and have great economic value. It can be done less fre- ists. They might include personnel from forest quently in the case of smaller, less valuable, or less production, forest protection, forest administra- problematic areas. Generally, a program review is fairly tion, forest law enforcement, and finance/fiscal broad. Nevertheless, it is helpful in demonstrating man- and accounting, agement's commitment to take action to prevent theft. Establish the frequency of the audits: preferably The make-up of a review team could include corporate annually; minimally, once every two years. security; mid- to upper-level forest managers, including Specify audit standards along with responsibilities forest law enforcement personnel (national/central, for each team member in the prevention plan. Prevention provincial, district); and a manager from the concession/ Responsibilities should include to (a) review har- Theft timber sale contractor. The timber theft prevention vest preparation methods; and check compliance plan should include criteria that will assist the review with (b) marking standards; (c) tree designation Timber team to determine whether timber theft prevention systems being used; (d) established harvest admin- measures are being implemented and used in both the istration procedures; (e) check volume-sold vs. Planning harvest planning and administrative/harvesting phase volume-cut documents, and finance/fiscal and of the timber management program. accounting procedures; and (f ) regarding prevent- 75 Depending on the number of active concession/timber ing, detecting, and reporting timber theft. sale contracts, the theft prevention plan should identify Distribute the audit report to the appropriate the minimum number of program reviews that should be levels of forest managers including forest law conducted each year. Sites selected for reviews should enforcement; include a description of findings and be scheduled in rotation so that all areas under contract recommendations for all deficiencies discovered. have periodic program reviews, including sites in which logging has not occurred but sale layout is being done. Case Studies of Timber Theft Prevention A report with findings and recommendations should be and Forest Security Planning completed within 30 days of a review. Units inspected should be required to submit follow-up reports identi- There are relatively few available examples of well- fying actions taken to correct any deficiencies reported documented timber theft prevention plans. While more in their reviews. is available on park or protected areas management, A program review may not detect all instances or indi- much of that work addresses primarily threats from cators of theft. Therefore, it is important that the theft encroachment on forest resources of alternative land prevention plan require that a timber-accountability audit uses, hunting, and subsistence demands from local be conducted on all active concession/timber sale con- communities. The documented examples of responses to tract areas. This audit will become the tool to more industrial- or commercial-scale illegal logging in parks closely monitor timber theft prevention efforts. and protected areas are cases of emergency reactions to The audit should be structured to validate that tim- problems rather than of proactive prevention planning. ber is being cut, removed, and paid for under the terms In many cases, timber theft prevention plans prepared of the contract. Terms include the harvest preparation by industrial forestry firms are held as confidential doc- and administration phases of the timber management uments that are not publicly disclosed for security rea- program. sons. The three case studies summarized in the next Planners were able to locate or identify additional threats section are based on presentations made at a meeting held to discuss an early draft of this report.5 They illus- trate actual applications of some of the principles and concepts discussed in this report. CAMBODIA Responding to Illegal Logging in the Virachey National Park's "Dragon's Tail" Virachey National Park is one of the top-priority areas for conservation in Southeast Asia (figure 6.2).6 It cov- ers 3,325 km2 and protects flora and fauna of inter- national conservation priority. A high percentage of Cambodia's ethnic minorities live around the park. Its vegetation, dominated by evergreen forest, is more or less undisturbed. Since March 2000, with World Bank Figure 6.2 Virachey National Park, Cambodia. Mainland Southeast Asia showing the location of Virachey and Global Environment Facility (GEF) support, Cam- National Park. Source: K. Schmitt, BPAMP. bodia's Ministry of Environment has implemented a Biodiversity and Protected Areas Management Pro- ject (BPAMP). Its overall development objective is to assist the government to sustainably manage its national Prevention protected area system, specifically Virachey National The Dragon's Tail is extremely vulnerable to threats Theft Park (VNP). due to these two reasons and to its easy transboundary In 2003, following a one-year participatory process, access from Laos and Vietnam. There are no access Timber BPAMP developed a management plan for VNP. Exten- roads to the Dragon's Tail north of the Sesan River. 76 sive reconnaissance flights provided up-to-date plan- Depending on the season, ranger foot patrols require ning information such as the status of the vegetation, at least six days to reach the Dragon's Tail from the encroachment, and illegal activities. Flights also iden- nearest station within Cambodia. In contrast, access tified potential areas in which to develop tourism and from Laos and Vietnam is easy. A road through the obtain baseline data for a comprehensive monitoring Dragon's Tail connects these two countries, and their program. The 2003 inspection flights over the park border police and military units are stationed in and observed no logging. However, flights in 2004 revealed around the reserve. large-scale logging and an extensive network of logging In analyzing the problem, planners were able to locate roads in an area of the park called the Dragon's Tail. or identify additional threats (figure 6.3): The Dragon's Tail is a roughly triangular 120 km2 area in the far northeast of the park along Cambodia's borders Internal threats. It later became evident that corrupt with Laos and Vietnam (outlined in red in figure 6.3). senior park staff had been supporting the illegal The area is mainly low bamboo forest on undulating logging operation, gained financial benefits from it, terrain with remnants of evergreen forest along ridges and ensured that the logging was not reported. and on hills. The illegal logging must have started dur- External threats. Powerful individuals in the three ing the 2003­04 dry season. Yet, it went unnoticed for countries, including high-ranking provincial several months because of the Dragon's Tail's remote- and border police officials from Cambodia, were ness and difficult access from Cambodia. involved in the illegal logging. After the discovery of the illegal logging in the 5See Acknowledgments and appendix 3. Dragon's Tail, the government initiated criminal investigations that have resulted in convictions of 6This section is based on a presentation by Klaus Schmitt. The Biodiversity and Protected Areas Management Project (BPAMP) is high-ranking officials and the removal from office documented at http://www.bpamp.org.kh/Main/bpamp_pub.htm of several provincial officials and staff. The Ministry Vulnerable through: · Location (remote transboundary access) · Border dispute · Internal threats (corrupt staff) · Lao military occupying approx. 20,000 · External threats (powerful individuals) ha of VNP since 2002 Prevention Selective logging of eaglewood trees Theft for incense Timber Planning Figure 6.3 Identification of timber theft threats and risks in Dragon's Tail, Virachey National Park, Cambodia. Source: K. Schmitt, BPAMP. 77 of Environment also initiated a planning process to 1. Operational. Patrol deployment and staff rotation institute long-term measures to prevent the reoccur- modified; two ranger outposts constructed in the rence of illegal logging. Development of the plan began Dragon's Tail area; communication with park with a threat analysis that surveyed 166 kilometers of headquarters upgraded through the installation roads in the Dragon's Tail and located 1,683 cubic of high frequency (HF) radios at the outposts; meters of logs left behind by loggers and stumps indi- aerial monitoring increased. cating additional illegal activity. In addition to the 2. Staff motivation. Training, adequate patrol equip- above threats to the Dragon's Tail area, the risk assess- ment and infrastructure, and performance-based ment identified these two threats (figure 6.3): nonmonetary incentives provided; salaries scaled to encourage good performance. 1. Border dispute involving Lao armed groups who 3. Cooperation (local, regional-transboundary). On- had occupied approximately 20,000 ha of VNP going cooperation between the park and stake- since 2002, preventing access by ranger patrols holders intensified: from the local level through (outlined in blue) provincial, military, and policy authorities to trans- 2. Selective logging of eaglewood trees (Aquilaria boundary cooperation with adjacent protected crassna) for incense (the three areas outlined in areas in Laos and Vietnam. In addition, BPAMP black). and the Ministry of Environment collaborate with the Ministries of Interior, Defense, and Justice to Building on the risk assessment, four sets of meas- ensure prosecution of those involved in illegal log- ures to prevent timber theft in the Dragon's Tail have ging, including high-ranking officials. The Office been instituted: of the Prime Minister supports these efforts. Successful criminal prosecutions are positive indicators, but it is too early to know whether the efforts in the Vi- rachey National Park will be successful in the long term 4. Disincentives. With support from BPAMP, the PERIYAR TIGER RESERVE, INDIA Ministry of Environment prepared the court case Converting Timber Thieves to Park Protectors to prosecute the high-ranking officials involved in through Ecotourism the Dragon's Tail illegal logging. This court case Periyar Tiger Reserve lies in the Western Ghats in the has attracted substantial public and media atten- Indian state of Kerala.7 The reserve lies along the water- tion and, if successful, will create a real disincen- shed of the Periyar and Pamba Rivers. Wildlife is plenti- tive for timber theft. ful: 62 species of mammals, 381 species of birds, 44 species of reptiles, 16 species of amphibians, 38 species of fish, To address threats to eaglewood resources, the pro- and 119 species of butterflies have been formally iden- posed measures included: tified. The Western Ghats is one of the oldest tropical mountain systems. Spanning 1400 km and spreading Patrols in known areas of eaglewood over 0.14 million sq km, it is home to over 40 million Development of informant networks people (including 5 million indigenous persons). Surprise attacks on eaglewood poachers The region originally was a natural habitat for tigers. Stop and arrest encountered offenders However, due to the extraction of timber, extensive More aggressive transfer of cases to court, and agricultural expansion in the region during the nine- follow-up teenth and twentieth centuries, manipulation of the Conservation education about eaglewood for hydrologic regime for irrigation and power generation, and mass tourism, the tiger population has dwindled. specific and general audiences In 1973 the Government of India introduced Project Support to community information networks. Prevention Tiger to ensure a viable population of tigers in India. In 1978, when Periyar was declared a Tiger Reserve Theft To address the problems along the Lao border, the under Project Tiger, only 5 tigers were known to inhabit plan proposed to: the forest. Project Tiger consolidated boundaries, relo- Timber cated human dwellings out of the interior to minimize 78 Carry out patrols without engaging Lao P.D.R. disturbances to wildlife, fenced or dug trenches to exclude soldiers cattle, prevented wildfires, maintained swamps and Carry out aerial monitoring waterholes, encouraged the growth of fodder species, Lobby the Government of Cambodia to resolve and eliminated commercial exploitation of forest prod- border dispute. ucts. By 2000, 22 years after the project was begun, 36 tigers were living in the reserve. The successful criminal prosecutions are positive In addition to its natural features, the area has enor- indicators, but it is too early to know whether the efforts mous cultural and religious significance. Over 5 million in the Virachey National Park will be successful in the tourists and Hindu pilgrims visit the area each year, long term. It does appear that, in addition to obvious many within a 2-month peak Hindu pilgrimage period. political commitment at the highest levels of govern- Despite the relocation program and other control efforts, ment, having a park protection strategy located within shops and hotels were opened along jungle routes to a sound overall park planning and development pro- accommodate the annual pilgrimage. Nearby trees were gram provides a framework for adaptive management. cut for construction and fuel. The increased traffic mar- In it, simplicity and flexibility are achieved by including ginally raised living standards of the local impoverished only the basic framework of the proposed management people through menial jobs. Nevertheless, overall, wide- in the Management Plan. Details are addressed in more spread poverty persisted, and animosity to the Reserve flexible supporting documents, such as Detailed Zon- and public authority deepened. Many local people ing Plans, Operating Guidelines, Visitor and Business resorted to illicitly collecting fuelwood and logging to Plans, Memoranda of Agreement, and Strategy Docu- supply makeshift hotels, shops, and accommodations. ments. Thus, the project has been able to combine skills, experience, and creativity with a disciplined analytic 7This section is based on a presentation by Pramod Krishnan and process to put in place a credible timber theft preven- Kutty and Nair, "Periyar Tiger Reserve: Poachers Turned Game- tion strategy. keepers," in Durst and others 2005, 125­34. Periyar Tiger Reserve is a valuable demonstration of the use of social techniques to prevent forest crimes Simultaneously, development of transportation infra- the overall target population of 58,000 people living structure facilitated access by poachers, smugglers, within a 2-km radius of the reserve. The results have and illicit grazers. They sought a range of products been unmistakable: from the forest, including the vayana bark; prized sandalwood, teak, and rosewood; and elephant tusks. 1. Illegal tree felling has been completely stopped Some--including encroachers from adjoining Tamil (equivalent to saving 100,000 trees/year). Nadu State--cultivated narcotic plants such as Cannabis 2. Park management has been strengthened. sativa inside the Tiger Reserve. 3. Community relations have dramatically improved. By the mid-1990s, the gravity and extent of the 4. Poverty has been reduced. encroachments forced the realization that policing 5. The social stigma that had been associated with alone could not control them. With the Reserve facing indigenous communities has been removed. illegal felling of cinnamon and sandalwood trees and poaching, hard-core criminals, and constant conflict The recognized success of the Periyar Tiger Reserve is with park staff, a handful of enthusiastic forest officers a valuable demonstration of the use of social techniques at the Reserve realized that the participation of local to prevent forest crimes. On the basis of experience people in management, decision-making, and the day- and observations that played the role of a security to-day running of the park was the only hope for its assessment, Reserve management identified the failure conservation. of physical access barriers (fences and trenches), forced In 1996 the Kerala Forest and Wildlife Department resettlement, and unneeded suppression of nontimber Prevention launched the India Eco-Development Project (EDP) forest product commercialization. The identified failure Theft for the Periyar Tiger Reserve with financial assistance of physical barriers recast the problem to turn poachers from the World Bank and Global Environment Facility into wardens. Timber (GEF). EDP's important components are village eco- development programs, improved protected area man- UNITED STATES FOREST SERVICE Planning agement, and environmental education and awareness Thefts Lead to Change to Tree Measurement Timber campaigns. 79 Sale System and Theft Prevention Planning The basis is the preparation of microplans for income During the 1980s and 1990s, the United States Forest generation and conservation measures for each village Service (USFS) experienced increased levels of illegal fringing the reserve. The project tries to minimize biotic logging. Investigations disclosed thefts conservatively pressures resulting from grazing, fuelwood collection, estimated to amount to US$10 million­100 million.8 As nontimber-forest-product collection, fishing, and fire the manager of vast forest resources, the Forest Service by providing alternative income-generating activities had believed unquestioningly that its management and improving the efficiency of natural resource use. practices could prevent large-scale theft. However, its Eco-Development Committees (EDCs) are formed to investigation revealed that it had been mistaken. An contribute to the protection and management of the analysis was conducted on each known timber theft Tiger Reserve in return for opportunities to earn legal case. The analyses found that (1) 80 percent of the tim- livelihoods. These opportunities are based on people's ber theft cases had been discovered by sources other using their knowledge of the jungle to protect it, sustain- than the Forest Service; (2) theft had been going on for able use of nontimber forest products, and protection- some time before being detected; (3) theft indicators had oriented ecotourism. Some EDCs are comprised of been misinterpreted by forest managers; and (4) the former smugglers and poachers who, after intensive investigations were complex and costly.9 training in the basics of forest protection and manage- Numerous weaknesses and threats were identified ment, are deployed as social fences (chapter 4). Because that had allowed large-scale theft. For example, the agency they know the reserve so well, this group helps staff had primarily used a scaled timber sale program. Inves- protect the forest and wildlife by forming patrol squads. tigations into the theft revealed significant weaknesses Others guide tourists on wildlife-spotting excursions in packages developed by their EDCs. As of 2006, 72 committees had been established in 8McLean 1994. which approximately 5,540 families participate--from 9USDA Forest Service Law Enforcement and Investigations 1991. Timber theft is not exclusively a developing country problem in this program. It was determined that opportunities for Significantly, the change also marked the agency's theft increased the farther trees had to be transported incorporation of timber theft prevention planning as an before being scaled and the ownership switched. Among essential component of its timber management program. the threats identified were corrupt third-party scalers. In The internal, but independent, USFS Office of Inspector one case, a single log scaler underreported actual tim- General conducted a nation-wide audit of timber theft ber volumes amounting to US$50,000 every month for controls. Its report found that the Forest Service did have 25 years to the benefit of the lumber mill. This single policies in place to minimize losses from theft. However, fraud cost the United States government $15 million.10 the management program lacked a mechanism to ensure As a direct result of the weaknesses and threats discov- compliance. As a result of the audit and an analysis of ered in the old system, management changed direction the timber theft investigations, the agency emphasized to move toward a tree measurement timber sale system. implementing policies that required development of In a tree measurement system, ownership of the trees timber theft prevention plans at the national, regional, changes before they are cut (through pre-harvesting and local levels of the agency. cruising to determine species and volume, the purchaser The USFS case illustrates clearly that timber theft is pays for the timber prior to cutting and transporting the not exclusively a developing country problem. It also logs). This system reduces the opportunity to defraud or shows the necessity for the senior management of an steal timber through scaling schemes. institution to be ready to recognize and confront prob- lems in long-established systems. The important role of an independent internal control authority in assessing 10McLean 1994. systems performance also is clear. Prevention Theft Timber 80 blicup for in near ni-u forest to and to order practices villages and rceu forests to forest allow- domestic nityu zones forest comm and and villagers, of reso program seu for lands programs or programs compliance access obtain law theft land- to ctsu stomaryuc rewards reporting cooperation forest within environmental conflicts blicup protection comm nitiesu ctsu government nities,u with to Community Provide lands prod rposesup cationu Restore Allow on Foster forest Initiate protection general comm Establish incentive report prod damage Establish process ties concession Provide ed comm schools Prevent Define ances idelinesug 1. 2. 3. 4. 1. 2. 3. 1. 2. 3. pancyu for- its parks cationu damage logging monitor- schools, of trends activity occ order illegal in satellite ed and air incentive theft rceu areas and track illegal and illegal illegal law blicup and reso patrols government areas to from of ndu showing MIS/GIS, niversities,u report or from collection of of gro activity to to maps ranger environmental rewards ctsu Protected ctu singu protected rveillanceus nitiesu illegal prod Prevention Charcoal Encroachment Protection Protection Restoration Protection property Protection employees Expand and Cond ing and Develop activity Provide programs comm Establish programs est Theft 1. 2. 3. 4. 5. 1. 2. 3. 1. 2. by Timber r-u r-us theft ens damage moni- illegal protec- rityu ndaryu Planning protect and air track satellite timber meetings govern- sec trans- bo and by incentive lands rnsu to operations to 81 and activity forest designation timber concessions compliance and tesu peu and ret yield eu ctionu plans: and ndu showing co MIS/GIS, prepare illegal nityu in to bcontractorsus identify identify rolu on report monitoring gro maps post-harvest ha damage destr plans singu (govt. to Concessions concession concession management harvest reven practice program: ctu rveillanceus and comm and rewards stainableus reu ireu ireu of programs ctu and concessionaire, rceu prevention tree-marking Cond toring trends Develop activity Pre- with ment, Concessions idelinesug idelinesu reso Concessions portation G and Manage ing Ens Eliminate Req area Req approved code Implement veillance Initiate tion Cond inspections concessionaire) Concessions theft Establish programs or Type 1. 2. 3. 4. 5. 1. 2. 3. 1. 2. Forest and by protec- its of cationu (tele- activity ctsu trends resu rcesu forest and order rceu monitor- schools, illegal incentive satellite ed and air prod reso and forest theft reso media Issues forest track illegal treas nitiesu and ralu law blicup general or and government nityu to in showing of report MIS/GIS, niversities,u information ghu newspapers, from forest nat of of comm ctsu ndu activity thro of national of rewards to gro to maps programs National comm environmental blicup Planning of near prod program ctu singu radio, rveillanceus nitiesu illegal cationu Protection Removal Theft Damage Restoration Protection property Protection employees Initiate tion zones villages Establish programs forest damage Cond ing and Develop activity Provide programs comm Provide ed vision, posters) 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 1. 2. Security 6.1 Area/issue Strategy Detection Prevention Annex on in: awareness. provide idelinesug violations rsesu recognition and theft co Violation Safety Timber Establish reporting Develop training 1. 2. analy- vol- forms timber protec- nitu for on risk of and criminal training law harvest violations: and tracking investigations of investigations, safe a rceu reports case collection contact awareness a actions, provide allegations hazard descriptions investigation permits, enforcement reso interministerial investigation-rating report data make job and theft and rangers violations, tionsu in: to law and from Create tion Generate sis matrix Standardize Implement system Prepare rsesu Investigate theft Develop patrol Centralize concession mes,u How enforcement Basic Investigation Timber enforcement prosec Develop co Prevention 1. 2. 3. 4. Theft log deter nta-u analy- vol- per- forms Timber and to protec- on policies hammers nitu for law risk acco and law 82 ditsua theft theft criminal training and micro-trace idelinesug harvest log implement investigate and investigations safe controls government of investigations, specific and for collection enforcement timber govt. timber reports case-tracking actions, descriptions tiesud a contact awareness provide idelinesug hazard permits, enforcement log-branding scaling theft of investigation data compliance investigation-rating report make theft coding system; concession violations: interministerial that job and in: of assigned personnel to law and additives Concessions and violations, tionsu seu du bar ctsu reporting ireu rceu from Create tion Generate sis matrix Standardize Implement system Prepare Develop on Develop fra Use paint bility. tracking cond Establish for Req allegations reso Centralize concession mes,u enforcement prosec Develop sonnel tiesud rsesu How enforcement Basic Investigation Timber Assign enforcement Develop co 3. 4. 5. 1. 2. 3. 4. 5. 6. vol- per- forms timber protec- on nitu risk for law of and and criminal training law violations: investigations harvest of investigations, specific safe rceu investigation- collection enforcement hazard reports case-tracking actions, descriptions tiesud a contact provide allegations investigation permits, enforcement reso interministerial from report data make matrix job and and violations, tionsu in: assigned personnel to law and Create tion Determine analysis rating Standardize Implement system Prepare Investigate theft Centralize concession mes,u enforcement prosec Develop sonnel tiesud rsesu How enforcement Basic Investigation Assign enforcement Develop co 1. 2. 3. 4. 5. ppressionuS Annex 6.2 Revenue Administration and Control Matrix: Stumpage Revenue Forest Revenue Revenue management management management function activity objective Primary control Pre-Award: Cruise timber Determine revenue Check licensee's timber cruise in field Tenure/cutting per- mit; Application, review, approval Check licensee's compilation in the office Check cruise compilation computer programs Determine stumpage Determine revenue Check licensee's appraisal worksheet rate in field Check licensee's appraisal worksheet in office Check calculations Prevention Award tenure Collect revenue Check to ensure successful applicant does not Theft owe money Timber Logging plan submis- Monitor timber Identify and claim revenue Assess revenue risk and determine inspection sion, review, approval harvesting frequency Planning Mark timber Identify and claim revenue Set timber-marking requirements 83 Scale timber Identify and claim revenue Designate scale site for scaling Post-Award: Adjust stumpage rates Determine revenue Check calculations Ongoing Reappraise timber Determine revenue Check calculations Forest tenures: Mark timber Identify and claim revenue Inspect marking of timber in field Harvesting inspections Inspect boundaries Identify and claim revenue Inspect boundaries in field Final inspection Inspect boundaries Identify and claim revenue Inspect boundaries in field Compare cut to cruise Identify and claim revenue Compare scale and cruise; investigate signifi- cant differences Residue and waste Assess residue and Identify and claim revenue Check licensee's survey in field waste Check licensee's data in office Private land Inspect boundaries Identify and claim revenue Inspect boundaries in field Source: Ministry of Forestry, British Columbia, Canada, http://www.for.gov.bc.ca/tasb/manuals/policy/resmngmt/rm12-4a1.htm Control standard Control standard reference Responsibility 100% of cruise-based cutting authorities; Cruising Policy (draft) District manager 75% of scale-based cutting authorities Cruise-based Sales Policy Cruising Manual All compilations Cruising Policy Compilation Manual District manager As required Cruising Policy Compilation Manual Director, Revenue Branch; Regional manager Under review Appraisal Manuals District manager All worksheets Appraisal Manuals District manager; Regional manager All rates No reference Regional manager All timber tenures Section 63.1, Forest Act; Small Business District manager; Regional manager Prevention Forest Enterprise Regulation; Collection Policy Theft All timber tenures Timber Harvesting Monitoring Plan Policy District manager Timber 84 All logging plans Timber Marking and Transportation Policy District manager All logging plans Section 73, Forest Act; Scaling Regulation District manager All adjustable rates Coast and Interior Appraisal Manuals Director, Revenue Branch All adjustable rates Coast and Interior Appraisal Manuals District manager; Regional manager Inspection frequency as determined by Timber Marking and Transportation Policy; District manager Timber Harvesting Monitoring Plans Timber Harvesting Monitoring Plan Inspection frequency as determined by Timber Harvesting Monitoring Plan Policy District manager Timber Harvesting Monitoring Plans All cutting authorities Timber Harvesting Monitoring Plan Policy District manager All scaled-based cutting authorities SBFEP Commitment Control Policy District manager 25% of cut blocks; 10% of aggregated Provincial Logging Residue and Waste District manager cut blocks Measurement Manual All surveys Provincial Logging Residue and Waste District manager; Regional manager Measurement Manual As required, or in conjunction with an No reference District manager; Regional manager investigation (continued) Annex 6.2 Revenue Administration and Control Matrix: Stumpage Revenue (continued) Forest Revenue Revenue management management management function activity objective Primary control Timber transport Inspect timber in transit Identify and claim revenue Check timber in transit and at scale sites to (unscaled timber) (cut block to scale site) ensure it is delivered to designated scale site Scaling License scalers Determine, identify, claim, Examine and issue licenses to scalers and record revenue Endorse scalers Authorize scalers Authorize scale sites Identify and claim revenue Designate where timber must be scaled Prevention Approve scale sites Theft Check compliance Timber Inspect scale sites Identify and claim revenue Planning Check accuracy of licensee's scale Check scaling Identify and claim revenue 85 Check scaler's compliance with authority/ endorsement Scale data submission Identify, claim, and record Reconcile scaler diary with scale tally sheets revenue submitted to ministry Check licensee's compilation in office Check compilation computer programs Timber transport Inspect timber in transit Identify, claim, and record Transport requirements (scaled timber) (scale site to scale site) revenue Billing Invoicing Claim revenue Check to ensure all scale data received is invoiced Statements of account Record revenue Check to ensure all invoices are on statements Collection Collection Collect revenue Monitor accounts and collect vigorously Control standard Control standard reference Responsibility All timber Timber Marking, Branding and Transporta- District manager; Regional manager tion Regulation; Timber Marking and Transportation Policy All scalers Sec. 78, Forest Act; Licensing and Chief forester; Director, Revenue Administration of Scaling Policy Branch; Regional manager All scalers Sec. 79, Forest Act; Licensing and Adminis- Regional manager tration of Scales Policy All scalers Sec. 73, Forest Act; Licensing and Adminis- Chief forester; Director, Revenue tration of Scales Policy Branch; Regional manager; District manager All timber Sec. 73, Forest Act; Administration of Scale District manager Sites Policy; Timber Marking and Trans- portation Policy All scale sites Sec. 73.1, Forest Act; Licensing and Admin- District manager; Regional manager Prevention istration of Scaling Policy Theft As required on a risk basis Monitoring, Inspecting, and Auditing Scale District manager Sites Policy Timber 1 check every 2 months per scaler; Monitoring, Inspecting, and Auditing Scale District manager 86 accurate within 3% Sites Policy 1 check every 2 months Monitoring, Inspecting, and Auditing Scale District manager Sites Policy Ongoing, based on random samples Monitoring, Inspecting, and Auditing Scale District manager; Regional manager Sites Policy As required Monitoring, Inspecting, and Auditing Scale District manager; Regional manager; Sites Policy Director, Revenue Branch No standard Scaling Requirements Policy Regional manager; Director, Revenue Branch All timber Timber Marking, Branding, and Transporta- District manager; Regional manager tion Regulation; Timber Marking and Transport Policy All scale data and all invoices Timber Invoicing Policy District or regional manager; or director, Revenue Branch (dependent on where scale data was received) All account statements and invoices Forest Act; Financial Administration Act Director, Revenue Branch All accounts Collection Policy Regional manager; Director, Revenue Branch 7 Conclusions: Policies and Strategies to Promote Timber Theft Prevention William B. Magrath The extremely limited application of the industrial transaction can depend on the results of analysis by an security and asset protection thinking and practice in organization's staff or an expert. Due diligence implies a developing country forestry contrasts markedly with level of effort and attention that would prevent unnec- both the widespread problem of illegal logging and essary harm or undue risk.2 parallels in other industries and forestry practice in Expectations as to what constitutes due diligence or developed countries. To an extent, the lack of security an adequate standard of care will vary, but this report awareness in forestry simply reflects forestry's generally suggests that in countries that face recognized illegal low level of professional and technical sophistication. logging problems, forest resource managers should be There is no reason to think that forest protection effort expected to proactively anticipate the risk of timber would run ahead of general management performance. theft and to pursue explicit and documented mitigation However, policy, institutional, and other constraints efforts. also stand in the way. Positive public policies, forest- The widespread failure of forest managers to practice industry-based initiatives, and international donor poli- due diligence in regard to timber theft prevention seems cies and practices could ease these constraints and to come from at least five factors: misconceptions; lack of motivate greater security effort. To conclude this report, awareness; weak incentives; absence of consequences, and this chapter explores some reasons for limited proac- complicity. tivity in timber theft prevention, and considers what selected stakeholder groups can do to raise the level of Misconceptions attention and effort. People unfamiliar with the crime prevention and asset security concepts discussed in this report often mis- interpret the suggestion that forest management unit Due Diligence operations should be proactive in preventing timber Effort on the part of forest resource managers to prevent theft. For example, it is suggested that timber theft pre- theft should be considered a part of due diligence in the vention will amount to draconian measures that will conduct of their responsibilities. Due diligence describes limit the rights and access of poor local communities, a number of concepts that involve either the perform- impractical efforts to surround forests with fences, or ance of an investigation of a business or person, or the outlandish high technology schemes to electronically performance of an act, with a certain standard of care. monitor remote areas. It also is said that matters of for- It can be a legal obligation, but the term more com- est policy and economic incentives are the important monly applies to voluntary efforts.1 For example, of- drivers of illegal logging and that narrow technical fers to purchase an asset or to engage in some other "fixes" are doomed to failure. It often is said that forest 1See http://en.wikipedia.org/wiki/Due_diligence 2See http://www.investopedia.com/terms/d/duediligence.asp Asset security and theft prevention stem from careful thinking and serious analysis conditions and institutional and social circumstances in developed countries, seem reluctant to share their own developing countries prohibit serious and significant experiences or to openly discuss the effort they expend security effort. In particular, it sometimes is said that on security and asset protection. Many senior employees without such basic preconditions as acceptance of the and managers of these firms are themselves, it seems, rule of law and a commitment to socially sound and unaware of the sophistication and extent of the internal inclusive forest resource management, illegal logging risk controls that are deployed in their own companies. and other forest crimes cannot be prevented. It also is Therefore, it is not surprising that there is such under- said that so long as consumer demand for wood and appreciation of security practice in developing country wood products is indifferent to their legality or illegal- forestry. ity, illegal logging will uncontrollable. This report is intended to raise awareness and to be There is much in these critiques. It would be easy illustrative of possibilities. It is not meant as a "user's for specific technologies or systems to be inappropri- guide" or "how-to manual." In view of the magnitude ately deployed in settings for which they are completely of the illegal logging problem and the likelihood that it unsuited. The resulting failures would be equally easy will remain a major issue in many countries, the long- to anticipate. The sources of many of the problems of term development of theft prevention as a new subspe- illegal logging do lie in deeply rooted social and polit- cialty with the field of forest protection should be priority ical problems far beyond the influence or control of for the forestry profession. This will be a long-term forest managers. However, similar statements could process. It will require technical assistance, professional be made regarding many other criminal and social and in-service training, building extensive networks problems. Nevertheless, few would suggest ignoring linked to expertise outside of forestry, and leadership Prevention the risks of burglary by leaving doors and windows and commitment from inside the profession. Theft unlocked or of car theft by leaving keys in ignitions; or other risks of victimization by not taking any of the Weak Incentives Timber many routine precautions that individuals, families, Stemming from the lack of information about the pos- 88 and business take every day to protect themselves and sibility and value of theft-prevention measures at the their valuables. forest management unit, few incentives at either the Nothing in this report should be taken to suggest individual or organizational level would promote their that timber theft prevention by forest managers is easy adoption. Public service employment compensation sys- or would be a complete and sufficient response to the tems generally do not reward initiative and are unlikely problem. Nor is the emphasis in asset protection sim- to support risk-taking and innovation in an unfamiliar ply on physical technologies or hardware, although they area such as timber and forest security. may play a part. The report has tried to make clear that A private landowner or a corporation managing its asset security and theft prevention stem from careful own land does have an incentive to protect its forest thinking and serious analysis. Theft prevention and assets and could be expected to take measures in accor- asset protection are simply tools and concepts that, if dance with a profit and loss calculation. Normally, a wisely applied, should be part of an integrated response private operator would not seek to protect against all to illegal logging. risks at all costs. A rational manager would aim to allo- cate resources to protection up to the point at which the Lack of Awareness marginal cost of protection equals the marginal value of This report was prepared in recognition that information theft prevented. In stark contrast, the very same indi- on the potential application of industrial security and vidual or company operating on public land under the asset protection to developing country forestry is very terms of concession contracts or licenses typical of limited and difficult to access. Until only recently, illegal those in force in developing countries would act with logging was a problem that was denied and ignored and total disregard to the risks of illegal logging. The costs received little serious or prolonged attention. Crime pre- of security planning may not be recognized in royalty vention is not a specific subject in forestry education any- calculations; there are few examples of specific regula- where in the developed or developing world. Some of the tory requirements for concessionaires to address tim- large forest industrial firms, operating primarily in the ber theft risks; and there are still fewer examples of fiscal Individuals complicit in illegal activity can be expected to actively oppose institution of crime prevention policies and programs incentives or royalty rebates or reductions that would complicit in theft, due diligence is a logical and practi- encourage security planning.3 cal impossibility. In fact, individuals complicit in illegal activity can be expected to actively oppose institution of Absence of Consequences crime prevention policies and programs. As with a lack An extreme version of the weak incentives for theft of commitment to other measures to promote good prevention innovation is the near total lack, in most forest law enforcement and governance, disinterest in countries, of serious consequences for poor security timber theft prevention may be rooted in complicity performance. Not only do few cases of illegal logging and institutional compromise, which are fundamental result in meaningful prosecution and penalty, but also sources of an illegal problem. Overcoming complicity resource managers typically experiences no conse- in crime requires broader and deeper reforms than can Prevention quences if the resources under their charge are damaged come from a veneer of prevention planning. Theft by theft or other crime. Concessionaires and licensees are very rarely penalized on account of illegal logging Public Policies to Support Forest Timber occurring on their areas. For example, damages done by Security Awareness illegal loggers to closed harvest compartments result Promote in essentially no impact or consequences to most con- Public policies that promote good governance generally, to cessionaires and often will go entirely unnoticed, let and good forestry more particularly, should be the start- alone unprevented. This lack of accountability extends ing point for reforms to promote a proactive approach Strategies to public agencies themselves and even to senior man- to timber and timber land security. The analysis dis- and agers and policymakers in Ministries of Forestry and cussed in chapters 3 and 4 makes it clear that timber similar agencies, who seldom are held liable or respon- theft prevention needs to build on a fundamentally Policies sible for damage to publicly owned resources. sound approach to resource management. Similarly, the issues related to fraud prevention in timber transac- Complicity tions are best approached on the basis of fundamentally Conclusions: Most difficult of all the constraints limiting adoption of sound commercial practices in the conduct of timber proactive approaches to timber theft prevention is the sales. Building on these general frameworks, there are 89 actual involvement of foresters, industry, local commu- many possibilities, including options discussed below, to nities, and government agency staff in illegal activity. shape public policies to support asset security in forestry Long-established and accepted ways of doing business by shifting the incentives that drive resource allocation in forestry, general acceptance and anticipation of cor- and behavior by managers and resource users. ruption, and perceptions that crime is inevitable and reform impossible all are deep seated obstacles to a Incorporate Security in Design of Tenures and Licenses proactive security mentality. The occurrence of corrup- Much of the world's forest land, especially areas with tion at the highest levels of public forestry agencies can commercial timber potential, are owned and managed by government agencies. However, one of the most sig- make it impossible to expect probity at the field level. nificant trends underway in forestry globally is the Some government forestry agencies are so systematically restructuring of forest and forest land tenure arrange- starved of official sources of revenue that they become ments.4 Increasingly, control of forest resources is being dependent on parallel and illicit sources of income. devolved to local communities, decentralized to subna- Wood procurement practices that turn a blind eye to tional authorities, and allocated under various arrange- the legality of wood origin are additional forms of com- ments to private interests. plicity in illegal activity that restrain serious adoption of One rationale behind the modification of resource theft prevention approaches. ownership is the possibility of achieving better man- Where the officials and employees involved in for- agement through tenure reform. In many countries, est management and timber transactions are actively industrial forest concession systems have been designed and justified on the notion that, by linking wood indus- 3 An exception is the requirement, not yet realized in practice, tries investment with access to natural resources, the under Cambodian forest concession regulation for concessionaires to prepare and submit for government review a specific Timber Theft Prevention Plan. 4 See White and Martin 2002. Forest resources should not be placed under the control of those unable to provide for their security and protection private sector can be mobilized to provide better man- arcane. However, when timber theft is pervasive and agement and protection than the public sector can pro- persistent, governments should require concessionaires vide. For instance, in much of South Asia, recognition and licensees to prepare and submit for approval timber that local communities can have strong interest in theft prevention or comparable security plans. Intro- resource protection and can be better positioned than duction of this kind of requirement could be on the government agencies to control illegal grazing and fire- same basis as are the plans required for infrastructure, wood collection has been an important driver behind harvesting, environmental impact, or other more con- the expansion of social and community forestry. In ventional topics. This introduction would be within contrast, in Indonesia, decentralization of control over the existing jurisdiction and discretion of virtually any forest resources was done with no attention to security Minister of Forestry. implications--with disastrous consequences.5 As a practical matter, to accompany a planning While resource protection implications have been requirement, governments would need to provide tech- implicit in some forest tenure reform discussions, they nical guidance and standards for security planning have not received the attention they deserve. Simply and plan appraisal and assessment. As discussed in this put, forest resources should not be placed under the report, security planning requirements can and should control of those unable to provide for their security and be tailored to the risks and threats facing specific forests protection. This principle should be applied to public and forest operations. Plan requirements should not, agencies as well as to private and community entities. In and need not, be excessively costly or indiscriminately a broad range of circumstances, putting a premium on demanding of technical expertise. This report indicates forest protection could be expected to favor decentral- the kinds of issues that timber theft prevention plan ized and community-oriented tenures. Nevertheless, Prevention standards would need to address, but they would need the specifics of individual cases need to be considered to be refined for specific applications. A consultative Theft and weighed on their individual merits. process involving industry, community interests, and other public law enforcement agencies could ensure the Timber Consider Security Performance relevance and practicality of guidelines and standards. 90 in License Award and Renewal Consultation also could ensure compatibility with An extension of the principle of integrating considera- national and local legal principles and with specific reg- tion of security in the design of tenure systems should be ulatory features. to incorporate security in the determination of individ- ual award and renewal decisions. Corporate histories or Deduct Illegal Harvest from AAC and Include "track records" in relation to protection performance in Royalty and Fee Assessments should be explicit criteria in the evaluation of bids and Governments should not indemnify concessionaires and applications for forest concessions and logging licenses. licensees from the results of poor security performance. International firms should be required to provide doc- Especially in the case of long-term forest management umentation of their security performance in other juris- dictions in which they operate, and their claims should concessions arrangements, in which resource protec- be verified with the relevant authorities. Concession- tion is or ought to be a specific obligation, resources aires and licensees also should be evaluated regularly lost due to illegal activities, whether caused by the con- on their resource protection performance and on the cessionaire or by others, should be deducted from the quality of their prevention planning. Furthermore, sat- concessionaire's authorized harvest volume. Where con- isfactory performance should be a condition for exten- tracts permit, in certain circumstances, concessionaires sion or renewal. also should be held liable for royalties, fees, and other charges on resources lost due to illegal activity. Require Standards and Security Planning The planning and operational control obligations that Refund Concessionaire Security Planning Costs governments place on private forestry operations vary and Offer Partial Indemnification and often could be criticized as excessively onerous and Governments should not indiscriminately absorb the costs of illegal logging. However, when concessionaires demonstrate serious good faith protection efforts, or 5See Barr and others 2006. crime is clearly due to social and political issues beyond Governments should not indemnify the results of poor security performance their influence, there may be justification for the public that ranges from among small independent and family- to absorb some private protection costs. Especially where based logging companies to the world's largest integrated security planning is a new approach with undemon- pulp and paper companies. FRA aims to represent the strated value, governments may partially subsidize interests of this diverse membership and to enhance security planning and be justified in doing so. Subsi- its members' ability to compete in the global market- dization could be based on royalty and fee discount, or place.6 It has been active in developing a network of rebates based on submission of theft prevention plans forest industry security specialists. FRA also promotes and security policies or other demonstrated efforts to cooperation between industry and state and local law protect assets. In recognition of security effort, and on enforcement authorities in the prevention and control the basis of prior government review and approval of of a wide range of forest crimes, including illegal log- Prevention theft prevention plans, governments could be justified ging, arson, narcotics, and ecoterrorism. It supports Theft in waiving some penalties and royalty assessments on six regional Forest Security Working Groups that reg- resources lost to crime. ularly bring together security specialists and others for Timber training, awareness-raising, and exchange of informa- Forest and Wood-based Industry's Role tion on threats, security practices, and other issues. Promote in Timber Security Another form of industry-based initiative is the to Forest and Trade Networks (FTNs), which involve Forest and wood-based industry in many countries face over 300 firms in more than 25 countries. The Global Strategies ambiguous incentives in regard to the control of illegal Forest & Trade Network (GFTN) is WWF Inter- and logging and timber theft. Enterprises managing timber- national's initiative to eliminate illegal logging and land and investing in silviculture can be the victims of improve the management of valuable and threatened Policies these crimes. They will have incentives to prevent them forests. GFTN is an affiliation of national and regional and to cooperate with government, other firms, and FTNs, each consisting primarily of companies com- communities on prevention and other enforcement mitted to practicing responsible forestry, or support- Conclusions: actions. Wood-based enterprises may have long-term ing responsible forestry through purchasing policies. interests in controlling illegal logging that are grounded 91 GFTN participants generate annual forest products in security of timber supplies and raw material prices. sales exceeding $48 billion, are engaged in 128 trad- Managers of many wood-based manufacturing firms are ing deals with other GFTN participants, manage over aware of an increasing sensitivity in the marketplace to 19.8 million ha of forests committed to certification, the legality and sustainability of wood origin. Neverthe- buy or sell in excess of 295 million cubic meters of less, wood purchasers can benefit in the short term from forest products per year, and employ over 1.5 million stolen material in terms of both price and ease of access. people globally. GFTN disseminates information on Whether a country's forest industry will choose to ethical and sustainable forestry practices and publishes develop a strong ethical culture and be a positive force and disseminates resources such as the "Responsible for change in forestry will depend on many consider- Purchasing of Forest Products Guide" and "Keep It ations. However, where the leadership and interest Legal" manual.7 are present, the forest industry can do a great deal to Similar groups, associations, and networks, such as advance compliance with forestry laws and to promote the Tropical Forest Trust,8 facilitate development and proactive prevention of illegal logging and timber theft. expansion of sustainable forest management certifica- Industry and trade associations in many countries bring tion systems, some of which are closely aligned with for- together firms for commercial, political, and other pur- est security issues. Forest Certification Watch is a useful poses. They can address forest security issues in these reference.9 fora. Industry associations can help establish and police "codes of corporate conduct," provide platforms for discussion of forest law enforcement policy, and pro- vide leadership in demanding curtailment of forest- 6http://www.forestresources.org/ based corruption. 7Miller and others 2006; White and Sarshar 2006. In the United States, the Forest Resources Associa- 8http://www.tropicalforesttrust.com/ tion (FRA) is an industry association with membership 9http://www.certificationwatch.org/ Development assistance should be targeting those prepared to take proactive steps Policy and Operational Research nition of the global illegal logging problem and to the for Timber Theft Prevention growing legitimacy of discussion of the problem and the search for solutions. Most forest law enforcement innovation and policymak- Development assistance to forest law enforcement as ing is uninformed by relevant research. This lack of cur- a specifically labeled focus is relatively new and quite rent knowledge extends to almost all aspects of forest law limited.12 In forestry, law enforcement often is treated enforcement and puts the burden on practitioners to as a very limited subject, largely isolated from the more learn by doing and to adapt models and examples from general theme of sustainable forest management. This other sectors. This process is slow and costly. It stalls inno- vation and becomes an excuse for inaction. To strengthen and other problems, such as lack of awareness and the prevention of forest crime, research is needed to: misconceptions (discussed above) have restricted the growth of support to forest crime prevention. Some 1. Better document and disseminate security prac- components of timber theft prevention practice, such as tices employed in developed country industrial log tracking and chain of custody systems, have received forestry attention from the development community. Never- 2. Document and describe resource protection strate- theless, these devices generally are treated in isolation gies employed by community groups with tradi- from a holistic theft prevention approach; or on the tional or recently awarded tenure rights basis of objectives, such as inventory management or 3. Explore the emergence of professionalism and the appealing to consumer market sensitivities, that are role of ethics and morality in forestry agencies. only indirectly related to the situational crime preven- tion approach developed in this report.13 Research on security approaches in other areas, espe- Prevention Probably more important than the specific projects cially plantation agriculture, animal husbandry, min- and technologies that do or do not receive assistance is Theft ing, and border control would seem to be particularly ODA work's general neglect of an emphasis on, or expec- promising places to start. tation of, due diligence with good faith effort in forest law Timber enforcement. Capacities, risks, and threats vary from 92 Development Assistance to Support country to country. Nonetheless, development assis- Timber Theft Prevention tance should be targeting governments, resource man- Official development assistance (ODA) and resources agers, and others prepared to take proactive steps to provided through and by nongovernmental organiza- prevent crime and illegal logging before they occur. The tions help set the development and policy debate in low costs and high returns of basic prevention plan- the forestry sector. Donor support to regional Forest ning, and the largely unexploited potential of the asset Law Enforcement and Governance (FLEG)10 processes protection and security approaches described in this and to activities linked to the European Union Forest report, should make them high priorities for develop- Law Enforcement, Governance and Trade (FLEGT)11 ment assistance. initiative are closely linked to the emergence of recog- 12See World Bank (2006) for a classification scheme for assis- tance to forest law enforcement and a discussion of Bank support 10http://go.worldbank.org/84WOFA2600 broken down by prevention, detection, and suppression. 11http://ec.europa.eu/agriculture/fore/various/index_en.htm 13See Dykstra and others 2003. A P P E N D I X 1 Timber andTimberland Security Checklist forest manager needs to consider all of these elements and measure them against Forest Management Unit A (FMU) operations to identify the "weakest elements." This "checklist" should be used to assess each specific operation. The forest manager should then prioritize strengthening the weak elements in the unit's forest monitoring and enforcement plan. 1. Introduction Red Yes No flags Comments A. Timber provides a large cash flow from diverse operations. _________ B. Timber sales have unique, inherent contract problems. _________ C. Timber and forest products are very valuable and easily accessible assets. _________ D. Security is essential to prevent and/or detect the theft of assets, and recover assets if stolen. _________ E. The recognizable risks in timberland operations are: 1. All volumes of timber are estimates until scaled. 2. There are no locks or fences. Because timberland is a large, open geographical area to protect, foresters have time to do very few inspections. 3. Once timber is harvested, thieves have many markets to which to sell the stolen material. 4. Timber can be transported long distances in a short time. 5. Numerous contracts are used in timber sales and harvesting, and vendors are readily available. 6. Once a tree is cut and loaded, it becomes indistinguishable from other trees on the load. 7. Managers and staff often become complacent toward theft ("We don't have a problem"). F. Fraud triangle 1. Opportunity. What opportunities exist for a person to steal? 2. Rationalization. Would any relationships with the public, employees, or vendors rationalize or excuse theft? 3. Pressure. What are the pressures on the thieves? Social, family, gambling, drug addictions? 2. Management Responsibilities Red Yes No flags Comments A. Do you hire honest employees? 1. Have background checks been performed on prospective employees? 2. Have prospective employees' references been checked? B. Has everyone in your organization been informed that the security of assets is part of his/her responsibilities? C. Does the organization stand behind a zero tolerance for theft? D. Does the organization have an ethics hotline (tip line)? 1. Who is responsible for following up on the calls? 2. Are calls kept completely confidential? 3. Are all complaints and tips investigated? E. Do managers have an open door policy so that employees feel comfortable to come in and talk? F. Has every employee taken timber security training and awareness training? Prevention G. Is a timber theft prevention plan in place? Theft 1. Notification. Does every employee know whom to notify? 2. Investigation. Who does the theft investigation? Timber 3. Internal controls. Are internal controls in place to detect theft? 94 H. Is an incident-tracking system in place? I. Do unintended incentives encourage theft or fraud? 1. Do buyers receive additional compensation for overcuts profits? 2. Do buyers receive extra compensation for low-priced wood? J. Are all state and federal laws being obeyed? 1. Local weight laws? 2. Best management practices (BMPs)? 3. Codes of practice? K. Are all incidents of suspicious activity or crimes reported? To whom? 3. Personnel A. Are all employees told of their responsibilities for timber security? B. How often do you offer timber theft awareness training? C. Are you and your employees sensitive to risk factors and warning signs (red flags)? D. Do you stress the separation of job duties? 1. Is timber harvesting is separated from timber purchasing? 2. Are accounts payable separated from accounts receivable? Red Yes No flags Comments 3. Is timber harvesting separated from timber cruising? 4. Do harvesting and procurement personnel report to different supervisors? 5. Are procurement, accounting, and scaling all performed and supervised by different employees? E. Do you rotate jobs among employees? F. Do you have in place more than one level of supervisory approval? G. Is any employee competing with company or state goals (conflicts of interest)? 1. Is s/he a timberland owner? 2. Do any of his/her family members work for the vendors, or work for your organization? 3. Is s/he the owner or employee of another forest-related business? Checklist Security 4. Legal Ownership of Property, Company Lands, or Concession A. Are all required records (deeds, titles) on file? Timberland B. Who is paying the taxes or royalties? and C. Are there adequate plats and maps? D. Is area recorded as GIS/GPS data? Timber E. Are the inventory and cruise data on file? 95 F. Is the property optimally protected? 1. Signage a. Are signs posted around boundaries? b. Are signs highly visible? c. Are signs unmovable? d. Are boundaries and markers refurbished regularly? 2. Other boundary identification methods a. Do you plow lines around the property? b. Are lines marked? c. Are ditches used to identify property boundaries? d. Are rivers or streams used as boundaries? e. Are roads used to identify boundaries? f. Is property fenced? G. Property access restrictions or limits 1. Are gates installed? a. Are they locked? b. How often are the locks changed? c. What is the condition of the gates? Red Yes No flags Comments d. Are gates hinged properly? e. Are locks attached to posts or gate? 2. Are there physical barriers? 3. Do public or private roads cross the property? H. Are there neighbors near the property? I. Is the property inspected? 1. How often is property inspected for trespass? 2. Who does the inspection? 3. How are the inspections done? 4. Are aerial inspections needed? 5. Timber Procurement A. Procurement 1. Timber sale contract Prevention a. Is it signed? Theft b. Is there clear and legal title? c. Are location, sale area, and property boundary maps in file? Timber d. Is the deed recorded? 96 e. Other specific information needed on file: (1) Rate and time of payment? (2) Termination date? (3) Specific products to be harvested? (4) Equipment to be used? (5) Notification of beginning, interruptions? 2. Cruise data file a. Cruise report summary on file? b. Percent cruise calculations? c. What cruise method was used? d. How was acreage determination made? e. Who is the cruiser? 3. Was the sale bid or negotiated? a. List of all bidders? b. Bid prospectus on file? c. What are the bid results? d. Reviewed by proper level of authority? 4. Sale correspondence on file? Red Yes No flags Comments a. E-mails pertaining to sale? _________ b. Copy of checks remitted? _________ c. Other associated sale correspondence? _________ B. Vendors or contractors 1. Reference Information Sheet (on file)? _________ a. List physical address _________ b. List all telephone numbers _________ c. List references from other companies _________ d. Type of equipment used _________ e. Insurance coverage _________ 2. What is vendor's financial status? _________ 3. What logging certifications are on file? _________ Checklist 4. Does vendor have more than one crew? _________ Security 5. Does s/he use contract haulers? _________ 6. Does the vendor have conflicts of interest? _________ Timberland a. Are relatives employed by the government or concession? _________ and b. Does vendor have other financial holdings in other companies? _________ 7. Is there a list of vendor's employees? _________ Timber 97 6. Timber Harvesting A. Timber sale contract 1. What are the harvest rates? _________ 2. What is the termination date? _________ 3. Any specific terms of contract? _________ a. Equipment to be used? _________ b. Special products and markets? _________ c. Special record-keeping requirement? _________ B. Is chain of custody being followed? _________ 1. What method is used? _________ 2. Special record-keeping requirements? _________ C. Tract inspection 1. How often are sale inspections done? _________ 2. Are they announced or unannounced? _________ 3. Is there a separation of duties? _________ 4. Are sale area boundaries clearly marked? _________ 5. Does inspector walk completed sale area? _________ Red Yes No flags Comments 6. Are destination checks performed? _________ 7. Is there an on-the-ground location map of high-value species? _________ 8. Is there a third-party inspection? _________ 9. Are inspection reports made? _________ D. Inspection reports 1. Who was the inspector? _________ 2. What were time and date of inspection? _________ 3. What was condition of sale at inspection? _________ 4. What corrective actions were taken? _________ 5. Was a map drawn indicating areas harvested? _________ 6. What was the volume on deck at time of inspection? _________ 7. Was any conversation with contractor recorded? _________ 8. Was loader sheet information kept? _________ 9. Were load ID numbers being recorded? _________ 10. Is vendor merchandizing properly? _________ Prevention E. What records are being kept? _________ Theft 1. Inspection reports? _________ 2. Comparison of cruise vs. harvest report? _________ Timber 3. Analysis report by cruiser, by vendor, and by area? _________ 98 4. Completion report on file? _________ 5. Are out-dated contracts deleted from system? _________ F. Other harvesting issues 1. Pricing a. Is mileage or distance pricing being checked and observed? _________ b. Are special or premium price tracts checked often? _________ 2. Where are premium price tracts located? _________ 3. Does data match reality? _________ 4. Does buyer purchase from third parties? _________ 5. Is the contractor hostile and evasive? _________ 6. Are all documents completed on time? _________ 7. Are there inconsistencies in data? _________ 8. Have harvesting or stumpage rates changed during contract? _________ 9. Was confirmation reached with seller on issues or questions? _________ 10. Has a paper trail been established? _________ 11. Does pricing encourage the separation of high-value products? _________ 12. Is the shrinkage or recovery factor in line? _________ G. Post-harvesting 1. Are data fully reconciled? _________ Red Yes No flags Comments 2. Is there formal close-out process? _________ 3. Was cruise-vs.-harvest report generated? _________ 4. Was cruise-vs.-harvest report analyzed? _________ 7. Scaling A. Scales 1. Are sales fully automated? _________ 2. What method was used to identify material? Truck ID, bar code, swipe cards? _________ a. Is landowner information recorded? _________ b. What is the true point of origin? _________ c. Is data collected, including trailer ID, logger, driver's signature? _________ Checklist 3. Are scales zero-balance devices activated? _________ Security 4. Is single-print device activated? _________ 5. Are scales equipped with electric eye? _________ 6. Are CCTV cameras installed? _________ Timberland and 7. Are exception reports being generated? _________ 8. Is access to scales and yard limited? _________ Timber 9. Are scales certified? _________ 99 10. When are manual tickets generated? _________ 11. What happens to manual tickets? _________ 12. Who approves manual tickets? _________ B. Log scaling 1. Is ticket generated for each load? _________ 2. Are loads checked against scale loads before reaching mill yard? _________ 3. Are logs on load counted for comparison with scale tickets? _________ 4. Are all logs marked on each load? _________ 5. Are comparisons made for each scaler? _________ 6. Is a comparison of product mix made during and after each sale? _________ C. Are scalers periodically rotated? _________ 8. Other Timberland Security A. Site preparation operation 1. Is contract on file? _________ 2. Is a vendor reference sheet on file? _________ 3. Has accurate acreage been determined? _________ 4. Is a time or shake clock being used? _________ 5. Has area been GPS'd? _________ Red Yes No flags Comments 6. Is there a conflict of interest? _________ 7. Does vendor have insurance coverage? _________ 8. Is proper equipment being used? _________ 9. What method is being used? _________ B. Road construction and maintenance operation 1. Is contract on file? _________ 2. Is vendor reference sheet on file? _________ 3. What are method and rate of payment? _________ 4. Are inspections being made during contract life? _________ 5. Are there conflicts of Interest? _________ 6. Is proper equipment being used? _________ C. Tract inspections 1. What is frequency of inspections? _________ 2. Is there recent activity on adjacent landowner's property? _________ 3. What is method of inspections? By air, on foot? _________ Prevention a. Who does inspections? _________ Theft b. Is there third-party inspection? _________ Timber D. Land and mineral sales operation 100 1. Are sales bid or negotiated? _________ 2. Who has approval authority? _________ 3. Is sale recorded? _________ 4. Is contract executed with proper signatures? _________ E. Special areas leases 1. Are special areas leases bid or negotiated? _________ 2. Who has approval authority? _________ 3. Is contract executed? _________ 4. Do eases include multiple-species lease? _________ 5. What are rates? _________ 6. Does leasee have insurance coverage? _________ 7. Is members' list on file? _________ F. Trash dumping 1. Is tracking system in place to track dumping? _________ 2. Is surveillance being done on dumping areas? _________ 3. Has access been restricted? _________ 4. Do we prosecute offenders? _________ G. Illegal substances 1. Does our organization report any and all illegal substances found? _________ Red Yes No flags Comments 2. Do employees know what to do if illegal substances are found? _________ H. Nontimber-related products 1. Have all valuable nontimber products been identified? _________ 2. What are their locations? _________ 3. What is their value? _________ 4. What are chances of product theft? _________ 5. Are preventive measures in place to prevent theft? _________ I. Arson 1. Do we report all arsons? _________ 2. Do we investigate wildfires? _________ 3. Are we knowledgeable in collecting evidence? _________ Checklist J. Trespass Security 1. Is it intentional? _________ 2. Is it unintentional? _________ K. Do we record and report all vandalism? _________ Timberland and L. Do we have endangered species to protect? _________ 1. What are they? _________ Timber 2. Where are they located? _________ 101 M. Are there terrorist threats? _________ 9. Security Training A. Do we have security awareness programs? _________ B. Do we have a security organization? _________ C. Do I or does our organization participate in security? interface with other companies on security? _________ 10. Auditing A. Are audits conducted on tract inspections? _________ B. Are the following exception reports generated and easily readable? _________ 1. Scale and scalers report? _________ 2. Cruise-vs.-harvest comparison? _________ 3. Are risk matrices created for various processes of the operation? _________ C. Are controls in place to test security measures? _________ 1. When are these tests conducted? _________ 2. Who conducts these tests? _________ Red Yes No flags Comments D. Are red flag matrices being used? _________ E. Surveillance of various operations 1. Personnel surveillance? 2. Is camera surveillance used? _________ 3. Is third-party surveillance used? _________ F. Are outside auditors invited to audit process? _________ 1. Are auditors timber-security auditors? _________ 2. Are auditors from national firms? _________ Prevention Theft Timber 102 A P P E N D I X 2 Recommended Readings and Websites byTopic T here is a large, but scattered, literature on the http://www.cifor.cgiar.org/publications/pdf_files/ various topics of forest protection and indus- Books/BColchester0601.pdf trial security, and a rapidly growing body of Problem-oriented policing is discussed at http:// relevant material is accessible through the internet. www.popcenter.org/default.cfm The footnotes and references given in the main text of this report point the way for the interested reader to Forest Protection some of the essential sources and most useful sources. This guide lists by topic both many of the readings ref- Traditionally, as a specialty within forestry, forest erenced in the text and other relevant sources. protection has centered on fire, insect pests, and dis- eases as threats to forests. These are rapidly changing areas. New insights and practices are emerging from Illegal Logging and Forest research on, and better understanding of, for exam- Law Enforcement ple, the natural roles of fire and other disturbances in the dynamics of forest ecologies. Literature on these The Royal Institute of International Affairs subjects may be relevant to the possibilities suggested maintains a website with probably the best and in chapter 3 of minimizing exposure to risk by widest connections to current literature and pol- adapting management approaches. icy and advocacy sources: http://www.illegal-logging.info/ Durst, P. B., C. Brown, H. D. Tacio, and M. Ishikawa, Seneca Creek Associates LLC and Wood Resources eds. 2005. In Search of Excellence: Exemplary Forest International LLC. 2004. "`Illegal' Logging and Management in Asia and the Pacific. Bangkok: FAO Global Wood Markets: The Competitive Impacts Regional Office for Asia and the Pacific. on the U.S. Wood Products Industry." Prepared for the American Forest and Paper Association. Useful sites on fire include: http://www.afandpa.org http://www.fao.org/forestry/site/firemanagement/en/ The UN FAO supports a variety of work related http://www.cifor.cgiar.org/fire/Index.htm to forest law enforcement, including support to http://www.fs.fed.us/fire/science/index.html regional institutions and publications. http://www.fire.uni-freiburg.de/ http://www.fao.org/forestry/site/law/en/ Colchester, M., with others. 2006. "Justice in the Sites on integrated pest management (IPM) in forestry Forest: Rural Livelihoods and Forest Law include: Enforcement." CIFOR Forest Perspectives 3. http://www.fs.fed.us/foresthealth/pesticide/index. Center for International Forestry Research, shtml Bogor, Indonesia. March. http://www.fao.org/ag/AGP/AGPP/IPM/Default.htm Asset Protection and Industrial Security Industrial Security. http://www.asisonline.org Much of the readily available literature on asset protection and industrial security is oriented toward developed- Abundant websites address security issues, including country retailing and manufacturing applications. This those of many commercial security providers. ASIS literature strongly emphasizes awareness-raising and International, formerly the American Society for motivating senior and middle managers to take an Industrial Security, provides professional security active interest in security matters. Technical guidance training and maintains an extensive website: and standards on locks, gates, and fences are available http://www.asisonline.org/ in many of the most accessible sources. However, much of this technical guidance is of limited relevance ASIS also publishes the Protection of Assets Manual to developing-country forestry. (ASIS International 2004): Particularly useful general introductions and refer- http://www.protectionofassets.com/index. ences include: cfm?fuseaction=Content.About Fennelly, L. J., ed. 2004. Handbook of Loss Preven- Other sites of interest include: tion and Crime Prevention. 4th ed. Burlington, MA: Elsevier Butterworth-Heinemann. International Centre for Prevention of Crime Hughes, G. 1998. Understanding Crime Preven- http://www.crime-prevention-intl.org/ tion: Social Control, Risk and Late Modernity. National Crime Prevention Center (USA) UK: Buckingham, Open University Press. Prevention http://www.ncpc.org/ Maguire, M., R. Morgan, and R. Reiner, eds. Theft 2007. The Oxford Handbook of Criminology. 3d ed. Oxford University Press. Anticorruption and Governance Timber Nalla, M., and G. Newman. 1990. A Primer in Pri- 104 vate Security. Albany, NY: Harrow and Heston. Bardhan, P. 1997. "Corruption and Develop- National Community Crime Prevention Pro- ment: A Review of Issues." Journal of Economic gramme. 2004. Crime Prevention for Farms: A Literature XXXV (September): 1320­46. Guide for Rural Communities. Canberra: Attorney- Hill, I. 2000. "Corruption in the Forest Sector in General's Department, Commonwealth of India: Impacts and Implications for Develop- Australia. ment Assistance." International Forestry Review http://www.ag.gov.au/agd/www/rwpattach.nsf/ 2 (3): 200­07. VAP/(03995EABC73F94816C2AF4AA2645824B) Rose-Ackerman, S. 1999. Corruption in Gov- ~XNEWFarm+BOOKLET.pdf/$file/XNEW ernment: Causes, Consequences, and Reform. Farm+BOOKLET.pdf Cambridge University Press. National Crime Prevention Institute, Department Rosenbaum, K.L. 2005. Tools for Civil Society of Justice Administration, University of Louisville. ActiontoReduceForestCorruption:DrawingLessons 2001. "Planning the Community Program." In from Transparency International. PROFOR at the Understanding Crime Prevention. 2d ed. Woburn, World Bank/FIN. January. http://www.profor.info; MA: Butterworth-Heinemann. http://www.forestintegrity.org/TI_Tools.pdf Purpura, P. P. 2002. "Foundations of Security Mookherjee, D., and I. P. L. Png. 1995. "Corrupt- and Loss Prevention." In Security and Loss Pre- ible Law Enforcers: How Should They Be Com- vention. Woburn, MA: Butterworth-Heinemann. pensated?" The Economic Journal 105: 149­59. _____. 1998. Security and Loss Prevention: www.worldbank.org/wbi/governance An Introduction. Woburn, MA: Butterworth- The United Nations Office on Drugs and Heinemann. Crime (UNODC) has prepared an Anti- Tyska, L. A., and L. J. Fennelly. 2001. Cargo Corruption Toolkit: Theft Prevention: A Handbook for Logistics http://www.unodc.org/unodc/corruption_ Security. Alexandria, VA: American Society for toolkit.html Fraud ing economic inefficiencies (Magrath 1988). Analysis of extensions into geographic aspects have recognized that Schott, P. A. 2004. Reference Guide to Anti-Money distance and transport costs matter for both criminals Laundering and Combating the Financing of and enforcers, and relate to the access and trespass Terrorism. World Bank. issues discussed in chapter 4. Interesting applications of The Association of Certified Fraud Examiners, a formal economic analysis to natural resources include: membership organization, works to reduce the incidence of fraud and white-collar crime and to Akella, A. S., and J. B. Cannon. 2004. Strengthen- assist in their detection and deterrence. It quali- ing the Weakest Links: Strategies for Improving the fies Certified Fraud Examiners through the CFE Enforcement of Environmental Laws Globally. CCG Examination and provides public and continuing Report. Washington, DC: Conservation Inter- education services, publications, and training: national, Center for Conservation and http://www.acfe.com/home.asp Government. Albers, H. J., and E. Grinspoon. 1997. "A Com- Topic Economics of Crime and Law Enforcement parison of the Enforcement of Access Restrictions between Xishuangbanna Nature Reserve (China) by The formal economic analysis of crime and law enforce- and Khao Yai National Park (Thailand)." Environ- ment is extensive and often highly mathematical. mental Conservation 24 (4): 351­62. Websites Enforcement is often described in very general and Albers, H. J. 1999. Spatial Modeling of Extraction and abstract terms. Nevertheless, the literature can be and Enforcement in LDC Protected Areas. Wash- helpful in formulating a general policy approach to ington, DC.: Resources for the Future. Readings crime prevention. The primary reference is: Bulte, E. H., and G. Cornelis van Kooten. 1999. "Economics of Antipoaching Enforcement and Becker, G. 1968. "Crime and Punishment: An Eco- the Ivory Trade Ban." American Journal of Agri- Recommended nomic Approach." The Journal of Political Economy cultural Economics 81 (May 1999): 453­66. 76 (2) (March/April): 169­217. Clarke, H. R., W. J. Reed, and R. M. Shrestha. 1993. 105 "Optimal Enforcement of Property Rights on Another interesting references is: Developing Country Forests Subject to Illegal Log- ging." Resource and Energy Economics 15: 271­93. Polinski, A. M., and S. Shavell. 2000. "The Eco- Magrath, W. B. 1988. "The Challenge of the nomic Theory of Public Enforcement of Law." Commons." Environment Department Working Journal of Economic Literature 38: 45­76. Paper 14. World Bank. Milliman, S. R. "Optimal Fishery Management in Comparative analysis of crime across countries is an inter- the Presence of Illegal Activity." Journal of Environ- esting area suggesting the general risks of victimization of mental Economics and Management 13: 363­81. the poor in developing countries and the dynamics of Milner-Gulland, E. J., and N. Leader-Williams. crime as economies grow and develop. See, for example: 1992. "A Model of Incentives for the Illegal Exploitation of Black Rhinos and Elephants: Soares, R. R. 2004. "Development, Crime and Poaching Pays in Luangwa Valley, Zambia." Punishment: Accounting for the International Journal of Applied Ecology 29: 388­401. Differences in Crime Rates." Journal of Develop- Robinson, E. J. Z. 1996. Dynamic Enforcement: ment Economics 73 (2004): 155­84. Protecting the Common Lands of Southern India United Nations Office on Drugs and Crime. 2005. against Encroachment. Palo Alto: Stanford Uni- Crime and Development in Africa. New York. versity Food Research Institute. Skonjoft, A., and J. T. Solstad. 1996. "Wildlife Much of the economic analysis of enforcement issues Management, Illegal Hunting and Conflicts. A related to natural resources emerges from discussions Bioeconomic Analysis." Environment and Devel- of common property or open access externalities. These opment Economics 1 (1996): 165­81. discussions examine problems that arise due to incom- United Nations Interregional Crime and Justice plete or costly-to-defend property rights and the result- Research Institute http://www.unicri.it/index. php United Nations Office on Drugs and Crime the needs of the wood fiber supply chain (UNODC) through private enterprise. The association is http://www.unodc.org/unodc/index.html comprised of many working committees and (provides access to the UN Conventions subcommittees. Of these, six regional security against Transnational Organized Crime and groups have been established within the United against Corruption) States. The association publishes quarterly "Security Alerts" apprising members of scams, Of particular interest is the Anti-Corruption red flags, and methods of theft prevention Tool-Kit: related to the forest product industry. http://www.unodc.org/unodc/corruption_ http://www.forestresources.org/ toolkit.html Food and Agriculture Organisation of the United Nations (FAO). 2005. "Best Practices for Improving Law Compliance in the Forest Sec- Forest Security and Law Enforcement tor." FAO Forestry Paper 145. Rome. American Paper Institute. 1991. Timber Security Lober, D. J. 1992. "Using Forest Guards to Pro- Guidelines. tect a Biological Reserve in Costa Rica: One Step Albrecht, W. S., G. W. Wernz, and T. L. Williams. towards Linking Parks to People." Journal of Envi- 1995. Fraud: Bringing Light to the Dark Side of ronmental Planning and Management 35 (1): 17­41. Business (business guide to prevent, detect, and investigate fraud). New York: McGraw-Hill. Many public forest and land management agencies Prevention Bonpin, T. T., A. G. Perez and Associates. 2000. publish operational and policy manuals containing "Primer on Administrative Procedures for risk assessment, fraud prevention, and law enforce- Theft Violations in Protected Areas." Philippines: ment guidelines and examples on public websites: National Integrated Areas Protected Areas Pro- Timber gramme. Protected Areas and Wildlife Bureau, United States Forest Service 106 Department of Environment and Natural http://www.fs.fed.us/im/directives/ Resources, Quezon City. British Columbia Ministry of Forests and Range http://www.denr.gov.ph/ http://www.for.gov.bc.ca/tasb/manuals/policy/ Confederation of European Paper Industries poltoc.htm (CEPI). 2005. Illegal Logging: Codes of Conduct Sarawak (Malaysia) for the Paper Industry. Brussels. http://www.forestry.sarawak.gov.my/forweb/ www.cepi.org homepage.htm Dykstra, D. P., G. Kuru, R. Taylor, R. Nussbaum, Sabah (Malaysia) W. B. Magrath, and J. Story. 2003. "Technolo- http://www.forest.sabah.gov.my/english/Home/ gies for Wood Tracking: Verifying and Monitor- tabid/36/Default.aspx ing the Chain of Custody and Legal Compliance in the Timber Industry." Environment and Legal Studies Social Development East Asia and Pacific Region Discussion Paper. World Bank. Hirakuri, S. R. 2003. Can Law Save the Forest? Lessons Eddins, K. M., and W. A. Flick. 1997. "Criminal from Finland and Brazil. Bogor: Center for Inter- Aspects of Environmental Law: An Evolving national Forestry Research. Forest Policy." Journal of Forestry. Fox, J., ed. 1993. "Legal Frameworks for Forest Man- The Forest Resources Association (FRA) agement in Asia: Case Studies of Community/State The mission of the Forest Resources Association Relations." Occasional Papers of the Program on is to promote the interests of forest products Environment 16. East-West Center, Honolulu. industry members in the economical, efficient, Lundmark, T. 1995. "Methods of Forest Law-Making." and sustainable use of forest resources to meet Environmental Affairs 22 (4): 783­805. A P P E N D I X 3 Participants List Timber Theft Prevention Experts Meeting Mactan Island Cebu City, Philippines November 21­25, 2005 Jay Blakeney Richard L. Grandalski Consultant Forest Law Enforcement Advisor Kuching, Sarawak 21111 81st St. East Malaysia Bonney Lake, WA 98391-8328 Email: juneau@pc.jaring.my USA Tel: +1 253 205 1004 Nazarudin bin Bohari Fax: +1 253 862 0567 Manager Email: rich_grandalski@msn.com Number System Sdn. Bhd. rich_grandalski@hotmail.com 52, Jalan Sg. Antu 3 Sg. Antu Industrial Estate Alicia J. Hetzner PO Box 1257, 96008 Sibu Senior Editor Sarawak, Malaysia East Asia and Pacific Rural and Environment (EASRE) Tel: 084 320117, 328939, 336788 (days) World Bank Fax: 084 335624 1818 H St., NW, MSN MC9-915; MC9-322 Email: numsyskl@streamyx.com Washington, DC 20433 USA Michael C. Dyson Tel: 202 473-3379 (Security) Risk Management Fax: 202 477-2733 Dyson Corporate Security Email: ahetzner@worldbank.org Level 1, 123 Collins St. Hobart, Tasmania 7000 Arvind Kumar Jha Australia Chief Conservator of Forests (Wildlife) Tel: 61 3 6231 4407 Social Forestry, Central Bldg. Fax: 61 3 6231 4408 Pune Camp Cell: 0407 826 736 Pune-411001 Email: mdyson@dysoncorp.com.au India Web: www.dysoncorp.com.au Tels: 91-0253-2599632 91-020-26056006 Cell: 9822601595 Email: dr_arvindjha@yahoo.com Pramod G. Krishnan Peter Jay Negara Deputy Director APRIL Group Periyar Tiger Reserve Environmental and Community Affairs Indian Forest Service Riaupulp Thekkady 685 536 PT Riau Andalan Pulp and Paper, member of the Kerala APRIL Group India Jalan Teluk Betung No. 31­32 Tel: 91 4869 222027, 222413 Jakarta 10230 Fax: 91 4869 223750 Indonesia Email: edo@periyartigerreserve.org mail@pramodkrishnan.com Pablito M. Ofrecia Web: www.periyartigerreserve.org Senior Forest Management Specialist www.pramodkrishnan.com Forest Management Bureau Department of Environment and Natural Resources Jose Campoverde Leon Quezon City President del Comisariado de Bienes Comunales Philippines Comunidad Indígena de Nuevo San Juan Parangaricutiro, Michoacán Daniel Aguilar Saldana Av. Cerro Prieto S/N Fracc. Félix Ireta Director del Paia C.P. 60490 Fundación Rigoberta Menchu Tum Prevention San Juan Nuevo, Mich Heriberto Frias 339, Col. Narvarte Mexico. C.P. 03020 Theft Tels: 01 452 594 00 51; 594 06 04; 594 00 56; 594 01 88 México, D.F. Email: afcinsaafcinsjp@comunidadindigena.com Tels: 5639 3091; 5639 1492 Timber Web: www.comunidadindigena.com.mx Fax: 5639 3976 108 Email: frmtmexico@rigobertamenchu.org William B. Magrath danielaguilar@rigobertamenchu.org Lead Natural Resource Economist East Asia and Pacific Operations and Policy (EASOP) Klaus Schmitt World Bank Senior Project Advisor 1818 H St., NW, MSN MC9-915; MC9-321 Ministry of Environment Washington, DC 20433 Biodiversity and Protected Areas Management Project USA (BPAMP) Tel: 202 458-1679 #48, Samdech Preah Sihanouk Fax: 202 477-2733 Tonle Bassac, Chamkarmon Email: wmagrath@worldbank.org Phnom Penh Cambodia Canesio P. Munoz Tel/Fax: +855 (0) 23 213900 General Manager Cell: +855 (0)12 719024 Environmental and Community Affairs Email: Klaus@bpamp.org.kh Riaupulp PT Riau Andalan Pulp and Paper, member of the Bernardo C. Sinues APRIL Group Forestry and Planning Manager Jalan Teluk Betung No. 31­32 Surigao Development Corporation Jakarta 10230 4th floor, ENZO Bldg. Indonesia 399 Sen. Gil J. Puyat Ave. Tel: +62 (0) 21 3193 0134 Makati City Fax: +62 (0) 21 392 3420 Philippines Cell: +62 (0) 812 101 5748 Tel: 63 (2) 897-1307; 63 (2) 890-9697 Email: Munoz_cp@april.com.sg Fax: 63 (2) 897-630 Meas Sophal H.E. Thuk Kroeun Vutha Park Manager Undersecretary of State Biodiversity and Protected Areas Management Project Ministry of Environment #48, Samdech Preah Sihanouk Phnom Penh Tonle Bassac, Chamkarmon Cambodia Phnom Penh Cambodia Haji Saidi Bin Wahie Tel/Fax: +855 (0) 12 719024 Chairman Email: bpamp@online.com.kh Number System Sdn. Bhd. 52, Jalan Sg. Antu 3 Gerald L. Stuckey Sg. Antu Industrial Estate TimberWatch, LLC PO Box 1257, 96008 Sibu PO Box 11 Sarawak Pinopolis, SC 29469 Malaysia USA Tel: 084 320117, 328939, (days) 336788 Tel: 843 899 4477 Fax: 084 335624 Cell: 843 509 9528 H/P: 013 808 0133 Email: Smokeybear@homexpressway.net Sibu email: numsys@pd.jaring.my numsys@tm.net.my Agus SB Sutito Park Manager Graham R. Wilkinson List Betung Kerihun National Park Chief Forest Practices Officer JL Kpt. Piere Tendean Forest Practices Authority Putussibau 78711 30 Patrick St. Participants West Kalimantan Hobart, Tasmania Indonesia Australia 7000 109 Tel/Fax: 62 567 21935 Tel: +61 3 6233 7451 Cell: 081 345 707 346 Cell: 0403 341 632 081 522 721 142 Fax: 03 6233 7954 Email: asbsutito@yahoo.com Email: graham.wilkinson@fpa.tas.gov.au Web: www.fpa.tas.gov.au Garry B. Vikanes Director of Strategic Development 3Si Risk Strategies, Inc. Suite 392, 5158 ­ 48th Ave. Delta, BC V4K 5B6 Canada Tel: 604 541 6577 Cell: 604 916 1953 Toll-free: 1 866 374 3434 Pager: 604 891 1904 Email: gvikanes@3si.ca References Adams, K. 1999. "A Research Agenda on the Police Use of Livelihoods." Center for International Forestry Research Force." In "Use of Force by Police: Overview of National and (CIFOR), Bogor, Indonesia. Local Data." Office of Justice Programs/National Institute of Becker, G. 1968. 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