Tracking tree thefts
Natalie Heng The Star 28 Feb 12;
The gaharu trade needs to be controlled if it is to be sustained.
THE TRAIL of dead trees littering our forests are traces of an illegal smuggling ring that has spread from southern Thailand down to Peninsular Malaysia, Sabah and Sarawak, over the past 30 years or so. Today, these poachers are well-entrenched within the forests for one very lucrative reason: gaharu.
Syndicated gangs, often of Thai, Vietnamese or Myanmarese origins, scour the jungle for months in search of Aquilaria malaccensis and the fragrant resin sometimes infused within the heartwood of this tree species. The presence of the resin is, however, unpredictable as it occurs only as an immune response to injury or pathogenic infection.
There are many names for it – gaharu, agarwood or oudh. Its etymology can be traced back to ancient times when gaharu, thought to be derived from the Sanskrit word agaru, was found in and traded from India. It was one of the most sought-after substances in China during the tenth century, and direct exports to the Middle East began sometime in the ninth century.
Rarity makes the commodity highly valuable today. The fragrant resin is generally found only in one out of 10 A. malaccensis trees or karas, as the tree is known locally. Unfortunately, unlike the indigenous communities who have been collecting the wood for centuries, most syndicate-hires lack the skill to distinguish a karas containing gaharu from one that does not. So the poachers hack down every agarwood tree, leaving a trail of unnecessary devastation in their wake.
Decades of relentless harvesting have caused the tree to become increasingly difficult to find. Perhaps, that is why poachers are more brazen now. Earlier this month, a 30m-high karas tree was felled close to the Penang Botanic Gardens. The pillaging of gaharu raises wide-ranging issues: illegal collectors armed with axes and M16 rifles not only endanger wildlife but put unarmed wildlife enforcement officers at risk. The illegal trade also bleeds profit from our gross domestic product – exactly how much is lost from royalties and export tax remains unknown.
Woody scents
Once upon a time, things were very different. Records from the 17th century described “dense groves” of A. malaccensis growing in the hinterlands of Malacca. Spanish reports described agarwood as one of the primary commodities traded by merchants, alongside diamonds, camphor, and wine in Cerava (Sarawak) way back in the 1530s.
Documents dating from the 1900s recounted that gaharu was burned by locals as incense before prayers, or taken to Mecca. Malays used it as medicine, poured it to the ground as libation at grave sides, and prized attractively-shaped pieces as talismans.
The uses were cross-cultural. Just 50 years ago, Malaysia’s Chinese populace used gaharu dust in joss sticks. Today, it is only found in premium products.
Gaharu must have actually been quite affordable for a period of time, but by the mid-1970s, prices shot up as a Middle Eastern oil boom led to newfound wealth and an insatiable appetite for oudh, driving supply down and prices, up.
Scientists, private companies and government agencies have responded by refining inoculation techniques in commercial gaharu plantations. However, the efforts are not yet capable of producing the same types of high-grade gaharu found in the wild. Generally, the darker, denser and more fragrant the wood, the better. A 1kg bag of A-grade wood chips can fetch up to RM20,000. These high-grade wood chips are often used as incense, whist the distilled oil is used as a body fragrance. It takes about 15kg of wood chips to produce one tola (about 11.6g).
According to The Trade and Use of Agarwood (Oudh) In The United Arab Emirates, a 2010 report by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a wealthy Emirati household would not think twice about paying 1,000 Emirati Dirham (RM846) for one tola of good quality oil. That seems to be the going rate for Malaysian gaharu oil, which makes up 50% of the world’s legally-traded gaharu.
Indian gaharu fetches up to RM5,000 a tola as the gaharu trees there are incredibly scarce due to over-harvesting. A. malaccensis is currently classified as “vulnerable to extinction” on the IUCN Red List of Threatened Species, whilst all Aquilaria species (and the related genus Gyrinops) are now listed under CITES Appendix II – which means trade is only permitted with an appropriate export permit and certificate of origin.
No legal mandate
Malaysia is a long way from India’s situation but there is much to be improved in the administration of the gaharu trade. One area of concern is misdeclarations of exports, which might undermine CITES and lead to a loss of taxes due to the under-valuation of the commodity. The first point was raised in a 2010 CITES report Wood For The Trees: A Review Of The Agarwood (Gaharu) Trade In Malaysia. The CITES management authority is the Malaysian Timber Industry Board (MTIB). Part of its duty is to ensure all Appendix II CITES export and import permits are in order, but it currently does not have enforcement powers to cover customs-controlled items such as wood chips for perfumery, medicine, oil and perfume – categories under which gaharu products predominantly fall. The result seems to be a lack of any applicable Malaysian law which allows MTIB to enforce the requirements of CITES.
Even after the International Trade in Endangered Species Act 2008 came into force (it lists any customs officer as a CITES enforcement officer), it is still not clear if this jurisdiction covers what was not specified under the Customs Act 1967 as controlled items.
However, efforts are under way to resolve this, with a plan to include an additional schedule specific to CITES species in regulations governing prohibited import and export items. MTIB director of licensing and enforcement, Norchahaya Hashim, says this means that Aquilaria timber, along with various gaharu-derived plant parts and products (including gaharu oil), will be listed as controlled items, hopefully by the end of next year.
The misdeclarations stems partly from the lack of a standard grading system for exporters. Norchahaya says MTIB is addressing this by drafting a set of visual grading guidelines, expected to be ready by mid-2012. To obtain a CITES export or import permit, the gaharu wood products must be graded to determine that the declared value is consistent with the quality and grade of the product.
These developments, though a step forward, are just one piece of the jigsaw. President of the Association of Bumiputra Gaharu Entrepreneurs, Datuk Dahlan Taha, fears such grading efforts might not take into account buyer subjectivity. As tastes vary across markets, he says the perceived value for a product might be inconsistent with the value on which excise duties are based. The grading system being devised also does not work for non-wood products, such as gaharu oil.
Another issue is that legally and illegally sourced gaharu sometimes get mixed up in the supply chain as unlicensed collectors sell their products to licensed ones. A common trader’s gripe is that legal procedures for harvesting gaharu within different Malaysian states have been somewhat obscure over the years. Aside from Kelantan which has issued the highest number of gaharu collection licences, most states have been slow to adopt the Forestry Department’s directive to streamline licensing procedures.
Dawend Jiwan, a former senior researcher with Sarawak Forestry Corporation specialising in habitat management for endangered species, makes an interesting point: gaharu collectors must be licensed but many live and work far away from the offices of the State Forestry Department. With these logistical challenges, how can we ensure collectors abide by harvesting guidelines?
Dahlan has a suggestion to resolve this: make the collectors sit for and pass an examination on harvesting guidelines before they can be issued licences. “Employers (gaharu traders) could be made responsible for ensuring the logistics are in place for the collectors to learn, take, and pass the test.”
Safeguarding the trade
Natalie Heng The Star 28 Feb 12;
GAHARU poachers are not only chopping down agarwood trees from our forests but wiping out the wildlife too. Accounts of poachers carrying tiger claws, bear paws, porcupines and even rhino horns alongside sacks of gaharu hint at the impact of opportunistic hunting. Locals have also been known to participate in illegal harvesting activities but they are no match for the work of international crime rings.
“Foreigners take everything. They specifically go in for gaharu but set up traps for food and high-value species for the wildlife trade,” says Taman Negara Pahang superintendent, Abdul Kadir Abu Hashim.
“Most of the locals harvest the gaharu in small quantities and sell it to middlemen.”
President of the Association of Bumiputra Gaharu Entrepreneurs (Pengharum) Datuk Dahlan Taha sees the poachers as a hindrance to Malaysia’s efforts to establish itself as an international trading centre. “Illegal gaharu collection eats into the share of licensed gaharu traders and deprives the Malaysian public of a large amount of tax on the commodity.”
Tackling the issue is a challenge, however. The Forestry Department has declined to give the number of arrests related to gaharu poaching. In any case, convictions rates might only reveal a small portion of the theft as most arrests result in immigration charges relating to visa overstays or illegal entry into the country or forest reserve. Illegal removal of produce from permanent reserved forests or stateland forests carries a jail sentence of up to 20 years and a fine not exceeding RM500,000 under Section 15 of the Forestry Act 1984 but it appears that incentives for the crime outweigh the potential costs.
Two Thai poachers arrested in Kelantan in 2005 revealed to researcher Noorainie Awang Anak (who co-authored the CITES report Wood For The Trees: A Review Of The Agarwood (Gaharu) Trade In Malaysia) that they would consider repeating the offence. The men’s families were supported by syndicates which employed them and they said that if caught, life in prison would be less strenuous than spending months searching for gaharu in the jungle. The men, aged 17 and 28, said they would not dare venture the same thing back home as harsher methods were used in dealing with such crimes.
Gaharu estates
With promises of lucrative profits from the “liquid gold”, many are investing in gaharu plantations. Also, there is a scuffle to come up with the best and most cost-effective inoculation technique to induce karas trees to produce gaharu. Worries that smallholders might fall victim to the empty promises of fly-by-night investment schemes prompted the formation of Pengharum.
Dahlan says commercial gaharu plantations are largely still in their infancy but it is important that Malaysia nurtures this growing industry as relying on wild gaharu collections is unsustainable.
The former Forestry Department deputy director-general says inoculation techniques might not produce the same kind of high-grade gaharu found in the forest but they can be used to cater to certain market demands or specification.
He says some Pengharum members are developing the method called SGT3 (Serapan Gubal Teras 3) which allows the harvesting of different types and grades of wood from live trees, a step forward from most current methods which require the felling of the entire tree.
There are three variations of the SGT3 method. The first produces Kayu C gaharu, currently sold to Taiwan and Dubai for US$7 to US$10 (RM21 to RM31) per kg, where it is distilled into oil or used as incense. This method requires an application of a liquid formula over the bark. An outer layer of bark is then harvested after six months, after which the process can be repeated.
Harvesting wood chips after one to three years produces Kaler Gazi which is sold to Vietnam and India for US$7 to US$100 per kg (RM21 to RM310). A slightly modified technique whereby harvesting occurs after three to six years produces Gubal. Sold locally and to India, this type is mainly used as incense and priced between US$800 and US$1,200 (RM2,480 and RM3,720) per kg.
Dahlan thinks that in the future, there will be a market for even lower grade gaharu as the younger generation prefers perfumes that use the oil as a component; the oil can be distilled from lower grades of gaharu.
“It would also be helpful to see a more streamlined policy for gaharu, which falls under both the purview of the Natural Resources and Environment Ministry (karas trees) and the Plantation Industries and Commodities Ministry (gaharu and plantations).”
