Global financial centres must clean up their act to help preserve the world’s precious forests

EIA has worked for more than 25 years to expose the corruption and criminality driving illegal deforestation.

Fortunately, and not before time, the world is paying more attention to this problem than has previously been the case.

Forests are vital in the battle against the climate crisis; left in a pristine state or managed properly, they are important ‘carbon sinks’ which absorb and store carbon from the atmosphere and generate oxygen as a by-product.

(c) EIAimage

They are, quite literally, the lungs of our planet.

Forests are also the place where many indigenous communities and people who rely on subsistence make their homes. These people rely on forests and their methods in managing forests are inherently sustainable – they have a vested interest in nature producing and reproducing its bounty for generations.

So, what does all this have to do with money laundering and the Financial Action Task Force (FATF)? The latter is the global standard-setter for anti-money laundering, setting and then policing the rules designed to reduce and limit the opportunities to launder ill-gotten gains. This includes the huge volumes of revenues from the illegal destruction of the planet’s forests– in the hundreds of billions of US dollars, by World Bank estimates.

Today (10 December), I spoke at an online event convened by the Royal United Services Institute with Dr Marcus Pleyer, President of FATF for the next two years, as Germany holds this tenure. The German Government initiated FATF to look into what more could be done to use anti-money laundering tools to stop illegal logging and land clearance, alongside other specific environmental crimes such as the illegal waste trade and illegal mining.

I impressed on Dr Pleyer the findings from many years of work by EIA, which have shown that illegal logging and land clearance is rampant in many parts of the world, although it has accelerated hugely in Africa, driven in part by demand for rosewood from Asia – China in particular and, latterly, Vietnam.

Illegal logging sawmill, Cambodia (c) EIAimage

Companies from all over the world have been engaged in this plunder, using global financial centres to launder funds through complex reinvestment schemes with the aid – wittingly or unwittingly – of financial service providers.

If FATF is able to do anything, it can use its clout to compel these global financial centres to take the risks posed to the world’s forests far more seriously than they have done to date.

FATF has taken a really positive step in looking into this issue – now it will need to make sure that, alongside discussion, it also pushes for action by those countries where illegal logging is carried out, where this wood ends up as furniture and building materials and the financial centres used to facilitate this trade.