Need for legality in the Brazilian timber sector

amazonian forest

The Brazilian timber sector is responsible for the extraction of more than 13 million m3 of hardwood logs from Amazonian rainforests but its economic importance is decreasing in terms of timber volumes and revenue generated.

The decline of the Amazonian timber industry is due to a number of factors, from its low sophistication to the challenges created by informality, illegality and unsustainability. It is estimated that over 70% of timber products from the Amazon may come from illegal operations. International rankings place Brazil as one the highest risk country in relation to illegality in the timber sector.

The combination of these factors has resulted in a reduction in demand for Amazon timber. And, on the supply side, a reduction in timber production of around 40% was observed over the past 10 years.
For the Amazonian timber industry to recover and resume growth, it needs to undergo a process of renewal and transformation, through the adoption of new trends, market practices and sustainability standards. A pre-requisite for the development of this process is to bring the industry to legality.

In this context, it is worth mentioning the diagnostic study currently conducted by McKinsey for the Brazilian Ministry of Environment that will highlight the main weaknesses of their control systems, the main types of fraud, and their recommendations for the improvement of the system.

As part of this process, BVRio Institute has been developing a Responsible Timber Exchange, and its Risk Assessment and Due Diligence tools are already available and have been used extensively by traders and government officials from both the US and Europe.

Any initiative designed to increase the sector’s legality depends on the transparency of information related to the sector. It is essential that the Federal and state governments provide more transparency to enable better monitoring, greater control, and a reduction of illegality in the timber sector.

The combination of the measures mentioned above would help revitalising the Brazilian timber industry.

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