Exploiting 'Red Gold'

Exploiting 'Red Gold'

Page last updated: May 14 2008

By Dan Collyns, BBC News, Peru

With its reddish brown colour which darkens with age, it's straight grain and durability, mahogany is one of the most valuable woods in the world.

It's prized for use in boat-building, furniture-making and Gibson Les Paul electric guitars.

Its value has made it an endangered species in many of the Amazon countries where it grows.

Brazil has banned its export, it's practically extinct in Bolivia and very scarce in Ecuador.

Peru is the only South American country where the trees are still found in commercial quantities which can be used for export.

The wood is supposed to come from legal concessions but in Peru's vast Amazon east, it is almost impossible to stop loggers from hunting for the "red gold" in restricted areas.

"It's one of the greatest threats to communities living in voluntary isolation and it's very probable that in various circumstances it's a source of spreading disease", says WWF country representative for Peru, Frederik Prins.

These indigenous tribes have chosen to limit contact with the outside world.

The common cold or flu can be fatal to them as, without previous exposure to the illnesses, they haven't developed the appropriate immune defences.

Peru's indigenous Amazonian organisation, AIDESEP, says there are still around 15 isolated groups which are threatened as loggers venture further into their territory.

In 2001, the Peruvian government tried to regulate logging by auctioning off 40-year concessions in mapped areas, with the right to log 5% of the area each year.

However, a forestry report has said that the majority of concessions deliberately overestimate their yearly allowance - ofetn felling trees from outside their regualted area.


For years, criminal networks in Peru have been involved in "mahogany laundering", giving illegally logged hardwoods an official stamp, so they can be exported legitimately.

A cubic metre of mahogany is worth around $424 at source in Peru.

By the time it reaches the US, its value is more than $2,000, according to Peru's Exporters Association, ADEX.

"Major exporters have been able to operate for years and years in a very informal sector, paying derisory prices for very valuable timber species and exporting them abroad for a huge profit margin, they've enriched themselves enormously", said Mr Prins.

"They've been able to influence people at different levels through what I would say are acts of corruption", he said.

Ignacio Lombardi, Peru's scientific authority for the Convention on International Trade in Endangered Species, CITES, says that illegal logging is hard to control because it has always been more lucrative than doing it legitimately.

CITES has pressured Peru into drastically reducing its mahogany exportation and can only export 715 trees of the hardwood this year, according to Mr Lombardi.

However, the real pressure to shake up Peru's logging has come from a unlikely source - the US Congress - whose Democrat majority insisted on inserting a forestry amendment to a free trade agreement which was signed by the two countries at the end of last year.

It stipulates that Peru must set up a more effective forestry regulator, hire more forestry inspectors and toughen penalties for illegal logging.

US officials can also halt suspicious shipments at the border.

The WWF's Frederik Prins says this is a turning point in protecting mahogany and other tropical hardwoods and it also creates a more formalised and modernised forestry sector which could be a source of economic growth for Peru's Amazon.

"It puts a lot of institutional, legal pressure on the government to ensure reform of the forest sector", he said.

Peru's aggressive drive to attract foreign investors, is also having a positive influence on the logging sector as there is greater market pressure to ensure that mahogany is properly certified.

Good business practice

It's the kind of talk which makes environmentalists nervous but wood exporter, Elisa Maturana insists that a legitimate logging industry is the only thing which will save Peru's Amazon.

"One thing is for sure, conservation alone won't work", she said.

"Economic and population pressures will make sure of that, the migration of peasants from the Andes to the jungle is already the biggest cause of deforestation.

"But with selective logging there is no risk of deforestation and it will actually improve the health of the forest by encouraging younger trees to grow, which in turn generates more oxygen", she explained.

For this to happen the state must invest in concessioned areas and help legitimate logging companies, there shold also be a government ministry in charge of forestry, she suggested.

However, that could be some way off, as despite possessing the second largest area of Amazon in the world, Peru is one of the few countries which still doesn't have an environment ministry.

Also, Peru's logging sector is still small.

President Alan Garcia recently pointed out that neighbouring Chile - a country with no Amazon rainforest - exported $3 billion of timber last year, but in Peru - no more than $200 million.

Scientists like Ignacio Lombardi, warn against Mr Garcia's plans to privatise and rapidly develop large swathes of the Amazon, which occupies 60% of Peru's territory.

"We must give our Amazon time and not rush in to develop it, if we do that and protect its greatest value - its biodiversity - it will be a limitless renewable resource", he says.