Illegal Logging, Corruption
and Business
Presented by
Ken Rosenbaum
Sylvan Environmental Consultants
On behalf of the Forest Integrity
Network
What is the Forest Integrity
Network?
FIN is an informal network of
professionals concerned about corruption.
 FIN emerged from a 2000 conference on
forest sector corruption at Harvard.
 FIN’s focus is unique.
 FIN is now a project of Transparency
International.

Recent FIN Activities




FIN produced a paper on tools for civil society
to fight forest-sector corruption.
FIN reviewed a pilot project to source wood
fiber responsibly from Russia.
FIN is turning its attention to approaches for
responsible businesses.
FIN will be hosting a panel on business issues
at the IACC in Guatemala in November
Why are we talking about
corruption?
Corruption is the Enabler and
Accomplice of Illegal Logging
Corruption has been the
Inconvenient Elephant
that no one wants to mention:
A Miniature Case Study:
with apologies to …
The Home Depot has a strong
environmental policy
In particular …
The Home Depot has traced the origin of
every wood product on its shelves.
 The Home Depot will not accept imports
of rare species such as Intsia bijua
(Merbau) unless the supplier provides the
export permit.

So how did this happen?
It’s really no surprise.
The forest sector has a poor reputation for
honest operation in much of the
developing world.
 The good people in Indonesia are working
hard to build honest governance, but they
may not have succeeded yet.
 In these conditions you can trust the
paperwork.

What’s at risk for your
business?
Shame: Bad Press
 Fines and Jail (Foreign Corrupt Practices
Act, Lacey Act in US)
 Unequal Competition and Closed
Markets: When your adversaries play a
dirty game

Forest Businesses are coming
to recognize the problem
Weinberg’s Pickle Principle
When you add a
cucumber to brine,
the cucumber
generally gets more
pickled than the brine
gets cucumbered.
A small system that tries to
change a big system through
long and continued contact …
… is more
likely to get changed
itself
This holds true for:
The small CSR office trying to change a
large business organization
 The arm of a business functioning in the
economic and social milieu of a different
culture
 The small certification system exposed to
business practices in a large society

Not everything in brine gets
pickled
There are ways to counter the pickle
principle
 They require organization and
management
 Enter the Business Principles

The Business Principles for
Countering Bribery
Started 2000
 International steering committee
 Broad based membership
 Consultation and three field tests
 Released late 2002; rollout from 2003

Business Members

BP plc


General Electric


HSBC



ISIS Assets Management

Norsk Hydro ASA


Organización Corona


Pfizer

PricewaterhouseCoopers
Rio Tinto plc
SAP
SGS Société Générale de
Surveillance S.A.
Shell International
Sika AG
Tata Sons ltd
What are the
Business Principles?

Anti-bribery framework for business
promoting:
Good business practices
 Risk management


For use by companies of all sizes
Basic Elements Parallel
Environmental Management
Adopt high-level policy against corruption
 Make resisting corruption everyone’s
responsibility
 Communicate this to employees
 Set up internal controls & audits
 Etc.

Six step implementation plan
Step
1
2
3
4
5
6
Action
Develop
ABP
tailored
to the
business
Decide to
adopt an
ABP
Plan
implementation
Implement
Monitor
Evaluate
Primary
responsi
bility
Owner of
company/
Board/
CEO
Appointed
senior
manager/
Project
Team
Appointed
senior
manager/
HR dept
Appointed
senior
manager
/line
managers/
HR depts/
business
partners
Time span
One month
Three to six
months
Three to six
months
One year
Ethics
officer/
Internal
and
external
auditors
Continuous
Owner of
company/
Board/
CEO/
Audit
Committee
At least
annually
Contact Information
FIN:
Andrea Figari
 fin@transparency.org
Programme Manager, FIN Transparency
International
Alt Moabit 96
10556 Berlin, Germany
 +49-30-3438 20655 +49-30-34703912
 www.transparency.org/fin
Business
Principles:
At TI-UK: Peter
Wilkinson
At TI-USA: Susan
Côté-Freeman