The Myanmar government has announced that they will ban timber exports starting in April of 2014. The official reasons for the ban are due to an increase in deforestation in Myanmar, which has reduced the country’s forested land from 57% in the 1960s to 24% in 2008.
There is some debate as to whether the ban means no more logging or just no log exporting in order to keep the milling on shore. This control of work share is already happening in many countries as a way to retain local jobs, so it is reasonable to expect this outcome.
There are several issues at stake here that greatly affect the Teak trade but also the environmental footprint of the species. No matter what side of the coin you fall on, a complete ban on logging could be the worst solution.
Logging Bans Increase Illegal Logging and Devalue Forests
We have written about the effect of logging bans in the past, and so has IWPA in their “Assuring Legality” report. The reality is that as soon as it is illegal to harvest the forest, its value drops to nothing more than open land. In many cases, this wooded land is then sold as fast as possible for farm land or livestock grazing pasture.
A quick look at South America is all you need to crystallize this. Cattle land is the number 1 cause of deforestation in South American rainforests, while lumber represents only 1% of the total number.
There is no question that logging is the leading cause of forest loss in Myanmar presently, and this is mainly do to illegal activities. Heavy regulation on US and European businesses makes it nearly impossible to import Teak illegally. However, much of Asia is buying up Teak as fast as they can cut it down.
The truth is that this “illegal” activity is only illegal by US standards, and the former Myanmar government didn’t view it that way at all, as many in power were getting very rich from the Teak trade. With so much questionable logging already going on, do you really think that making it officially illegal will stop it from happening? Certainly there is a new government in power in Myanmar, but more than likely, those already taking logs out will only become more desperate to do so.
The rest of the world has created the precedent that banning the export of a species only makes the situation worse. Strict regulation and land concessions that hyper manage who can cut and when cutting can take place, along with multi-generational reforestation and sustainability plans, are the only way to increase the available forests and cut down on illegal activities.
The US Trade Embargo Would Eliminate US Access to Teak
The environmental impact and rebuilding the forest are the primary issues here, but let’s look at the impact on US businesses that use Burmese Teak: specifically the boat builders. The European Union has already lifted the trade embargo against importing Teak directly from Myanmar, while the US has only mentioned “thinking about beginning to talk about lifting the embargo.” In fact, in August of 2012, Congress renewed the sanction for another year.
Currently, Teak importers like J. Gibson McIlvain get our Teak from other countries in Indonesia, which have imported the Teak directly from Myanmar. With the impending export ban, the only way to obtain Teak will be directly from Myanmar, which is illegal in the US as long as the embargo is still in effect.
As usual, there are a lot of politics at play here with powerful lobby organizations involved. We don’t want to ignore the environmental impact, but the more we distance ourselves from it, the more at risk the boat building and marine industries are. If you are a boat builder or marine construction firm, I strongly urge you to contact the Marine Association to let them know how detrimental this will be to your business. The US has demonstrated a strong knowledge of sustainable forestry practices, and this experience could be valuable in helping the new Myanmar government turn around the deforestation and establish some best practices. We can only do this if we have a place at the card table!
No matter how you analyze it, Burmese Teak is going to become increasingly more expensive very quickly. While the trade embargo remains in place, we can still source our Teak the way we have been doing it for years, though a looming ban will drive the price up. Once a ban kicks in, and if the embargo remains, US importers will have to get Teak 3rd and 4th hand, which will significantly increase the price.