Do Europe’s Oligarchs Tread Decks of Stolen Teak?

Are the bikinied beauties and and robber barons who bestride the decks of some of the world’s most expensive yachts actually treading on exquisite teak stolen from Myanmar?

Just in time for the opening of the London Boat Show, scheduled for Jan.10, the Environmental Investigation Agency (EIA), an organization that monitors environmental crimes, has accused Sunseeker International and Princess Yachts International – the two biggest yacht builders in the United Kingdom – of using illegal Myamar teak for their vessels.

In 2017, the two companies, both of which will be exhibiting at the prestigious show, reportedly had more than US$1 billion in forward order books. Sunseeker has built yachts for such moguls as former Formula 1 owner Eddie Jordan and Wang Jianlin, China’s richest real estate developer. They have been featured in James Bond movies since 1999. Both Sunseeker and Princess now are finding ready markets among Russian oligarchs and Chinese tycoons, almost doubling their order books in 2017.

But if investigators are correct, most of them feature illicit wood spirited out of Myanmar. According to the EIA, NHG Timber and Vandercasteele Hout Import, which are the suppliers of the precious woods to the two enterprises, Moody Decking and D.A. Watts & Sons, tasked with building decks for Sunseeker and Princess – have been found to be trading teak in breach of European Union Timber Regulations. These are norms laid out by European authorities to ensure that timber traded within the Union is not sourced from illegal states.

“UK authorities have confirmed that NHG Timber has been found in breach of the EU timber regulations for the trading of Burmese teak, a decision meaning that all firms known to be placing Burmese teak on the UK market have now been found in breach,” EIA wrote in a statement, adding that Vandercasteele Hout Import faces similar charges in Belgium.

That increasingly rare Burmese timber should end up embellishing the decks of high-end boats in Europe may raise eyebrows, but it is not altogether surprising. Southeast Asia has long been a major supplier of hard woods to anyone willing to buy. According to the United Nations Office on Drugs and Crime (UNODC), the region is endowed with 7 percent of the world's old-growth forests and plenty of rare species, but it is also experiencing the fastest deforestation rate in the world.

Most of what is logged there ends up in foreign markets, with China and Europe absorbing about 25 and 20 percent of illegally felled timber, respectively.

“In 2010, an estimated 10 million cubic meters of illegally logged timber was imported into the European Union and China from South-East Asia, with an import value of roughly $3.5 billion,” estimates the UN drugs and crime agency. Logging is an important part of the environmental crime sector, in its many forms now the fourth largest illegal business worldwide according to a joint report by United Nations and the INTERPOL.

Myanmar has not been spared. The hilly terrain of its border areas and the mountainous north of the country, dominated by the Hkakabo Razi, Southeast Asia's highest peak, are home to sprawling forests, which still cover about half of its surface. The country stands right where the Himalaya lowers toward Southeast Asia's jungles, with remoteness providing sanctuary for plenty of rare species, both plants and animals. Whether you are looking for a tiny leaf deer, a rare Asiatic black bear or prized rosewood, an extremely expensive hard wood, Myanmar has it.

Or at least it used to, for such riches have attracted the attention of traders from all corners, drawn by the availability of precious material and by the lawlessness that allows them to exploit it. The country has thus emerged as major hub for trafficking endangered species, available in places such as Mongla – aptly dubbed “Myanmar's Las Vegas” for the casinos sitting on its outskirts - where visitors can acquire pangolin scales, tiger wine and bear paws at discount rates.

Logging is perhaps an even bigger threat to biodiversity. Data gathered by the UN’s Food and Agriculture Organization show that in 2010 Myanmar had the third-fastest rate of forest reduction worldwide, with roughly 15 million hectares of forest cleared between 1990 and 2015.

“Burmese teak is considered to be the best quality teak available globally, and the demand for it, driven by the luxury yacht industry, has led to huge volumes being cut,” said Faith Doherty, Forest Campaign Leader with the EIA. “Teak is also available from other countries, and both different wood and non-wood alternatives exist for yacht decks, but the prestige surrounding Burmese teak continues to drive demand,” she said, adding that the entire country of Myanmar is game for loggers, with Shan State and Sagaing Division being particularly affected.

Logging works through a complex business chain, with everyone picking a slice of the cake. Private companies, the Burmese army, militias and the ethnic insurgents who have been waging a decades-long war against the central authorities are all involved. Both the eastern border leading to Thailand and the northern one, shared by the People's Republic, are known transit routes.

Referring to the latter, for example, a previous EIA report concluded that one of the major groups involved in importing lumber into China exploited “an intricate network of contacts embracing the KIO [the Kachin Independence Organization, one of the country's largest insurgent groups], Myanmar Government and military as well as local Chinese officials.”

This modus operandi is hardly unique to the logging industry. The jade mining industry in Hpakant, where some of the world's largest and highest-quality deposits of this stone are found, is just as complex. A report by anticorruption watchdog Global Witness found that companies owned by the Burmese military, rebel groups, and retired generals' families – including of former junta supremo Than Shwe – are present in the area, sharing in the profits from a market worth over US$30 billion, or nearly half of Myanmar's GDP.

Whether Myanmar will manage to save its environment from unscrupulous traders remains to be seen. Some action is being taken. In 2014, the semi-civilian government led by former general Thein Sein imposed a ban on the export of raw logs, an effort followed by a more radical decision two years later, when the NLD administration banned all logging for a year.

The policy was lauded by activists and assorted watchers, but given the sheer illegality the industry revels in – according to the EIA, the one between Myanmar and China is “one of the single largest bilateral flows of illegal timber in the world” – loggers may still have something to cheer about.

Michele Penna is a regular contributor to Asia Sentinel