The illegal logging and smuggling of merbau timber from Papua involves a complex web of international middlemen, timber barons and financial backers in several countries, according to an Indonesian foundation involved in environmental matters.

Telapak, a foundation concerned with natural resources management issues, says that amongst this complex international web involved in smuggling timber are financial institutions in Singapore that open letters of credit (L/Cs) to facilitate the illegal trades.

Laundered timber

"China and India are the main destinations for illegal merbau logs. But before the logs get there, they have to travel to several other countries to be laundered to have their ports of origin changed," Telapak forest researcher and campaigner Yayat Afianto told The Jakarta Post.

A recent report by Telapak and Indonesia's Environmental Investigation Agency says that the smuggling of merbau logs involves international syndicates working in several countries, including Papua, Jakarta , Surabaya, Malaysia, Singapore, Hong Kong, and Vietnam.

L/Cs involved

The report says brokers in Hong Kong establish connections with buyers on the Chinese mainland, while Singaporeans broker deals with Indian buyers, chartering cargo vessels and barges to transport the contraband timber to destinations on the subcontinent.

"Many of the financial transactions for the merbau logs flow through Singapore's banks, including the opening of L/Cs between buyers and suppliers," the report says.

Demand for merbau

Merbau timber is commonly used to make the hardwood wooden flooring that has become very popular in Europe and North America over recent years.

The report concludes that the size of these markets is massive. In 2004, the US and Europe consumed an estimated 189.5 million square metres of merbau timber, which is apparently enough to floor all of Washington D.C.

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