Timber Trade Policy and Illegality: A study of data discrepancies in Indonesia’s top trade relationships.

Abstract

Illegal timber trade is tied to forest loss and degradation, and contributes to negativeimpacts on social, economic, ecological, and climate systems. Despite growing international awareness and policies designed to prevent illegal timber from entering markets, the problem is persistent and difficult to detect. This study expands on previous efforts to identify signs of illegality in national trade discrepancies through analysis of imbalances between import and export data reported by Indonesia and its largest national timber trade partners. The goals of this research are to 1) Measure the effectiveness of national policies incurbing trade of illegal timber products from Indonesia, 2) Identify Indonesia’s national timber trade partners and products that exhibit a high risk of illegality, and 3) Evaluate the efficacy and appropriateness of discrepancy analysis as a means to estimate and pinpoint illegal timber trade. We analyzed trade data for logs, lumber and plywood, as well as relevant policies in Indonesia and eleven of its most important timber trade partners from the years 2000 - 2019. Through data visualization and statistical analysis, we identify that Indonesian lumber exports are at the highest risk of illegality; that China is Indonesia’s highest-risk trade partner; that specific national policies do contribute to discrepancy reduction between specific nations; and that single-nation trade import policies may drive leakage of illegal timber from regulated to less regulated markets. Further work to more precisely quantify the extent and sources of “normality” indiscrepancies would enable a clearer parsing of illegal or risky discrepancies. Understanding this data to be non-normally distributed, future application of nonparametric statistical testing would be a valuable contribution. Additional research on the presence and magnitude of leakage resulting from specific policies will be vital to ongoing efforts to reduce tropical forest loss resulting from illegal trade.