New EIA Report Details Trade Deal Failure to Support the Environment

06/09/2015 03:43 pm ET | Updated Jun 09, 2016

On June 4, the Environmental Investigation Agency (EIA) published a new briefing paper that demonstrates how free trade agreements fail to lift up environmental standards. Their report, focused on the failure to enforce environmental obligations in the U.S.-Peru trade pact, is particularly timely given that proponents of the Trans-Pacific Partnership (TPP) trade deal have claimed that its still-secret environment chapter will lift up environmental safeguards in countries like Vietnam and Malaysia.

As EIA's report demonstrates, however, simply including environmental obligations in trade pacts provides no guarantee that environmental protections will improve in reality.

And if enforcement has been this difficult in a free trade agreement with only one other country -- a trade agreement containing the most detailed conservation rules in history, no less -- it is impossible to imagine that implementation and enforcement will look any better in the 12 country TPP, especially since we expect the TPP will include broad and often-vague conservation rules.

So here's a bit of background and some highlights from EIA's new report.

In 2007, in response to the illegal logging crisis in Peru that was fueling climate disruption, destroying communities and ecosystems and threatening U.S. jobs, the U.S.-Peru trade pact included a detailed set of binding obligations to curb illegal logging and associated trade. Years later, however, the obligations still haven't changed the reality on the ground, and the illegal logging crisis continues unabated.

In 2012, EIA released an investigative report that documented the systemic fraud and corruption that plagued the Peruvian forest sectors. The report uncovered at least 112 illegal shipments of cedar and mahogany -- high value, precious hardwoods -- coming into the U.S. EIA and the Center for International Environmental Law (CIEL) formally petitioned the United States Trade Representative (USTR) to take action under the U.S.-Peru trade deal to stop the illegal timber trade and hold those responsible to account.

More specifically, the organizations called on the USTR to verify the legality of these and any future shipments from two companies EIA found to have a well-documented history of exporting significant volumes of illegal timber to the U.S. But USTR did nothing,and the two companies continued to export large volumes of high-value cedar species into the U.S., thereby allowing U.S. consumers who purchased this timber to become the unwitting financiers of the black market trade that is decimating the Peruvian Amazon. As EIA noted in its report, "Not only has no one been held accountable for past violations, but the U.S. is turning a blind eye to ongoing trade in timber that should be considered at high risk of illegality...."

In the petition, EIA and CIEL also called for an audit of 29 concessions -- or state owned forested areas that are given to a person or firm to selectively harvest timber under certain conditions. In 2012, EIA found that in many cases, the owners of concessions falsified documents with information about trees that didn't actually exist on their concession so they could obtain permits that they used to illegally harvest timber from outside their concession. In some instances, the concession owners attempted to crudely cover up their crime, including by literally staging cut down stumps on their concessions when authorities came to visit.

The USTR, however, once again declined to take any enforcement action or use any tools in the free trade pact to try to address these egregious violations of Peruvian law and of the trade pact. It justified this decision by reporting that 22 of the 29 concessions highlighted in the petition (just a subset of those highlighted in its report) had been suspended or cancelled, meaning that the right to harvest timber from these forested area had been removed.

EIA's report, however, uncovered that the majority of the concessions that were listed as suspended or cancelled have actually been under appeal to a non-existent tribunal -- meaning that the concessions could still be in operation. USTR told EIA back in December 2012 that the tribunal, which is supposed to be in charge of solving appeals, was close to being established. But EIA's report revealed that the establishment of the tribunal has been delayed for the past 2.5 years, and has just now begun recruiting the personnel needed to operate. As a result, the report notes, "the appeals have not been heard and many of those concessions may well not have stopped operations."

Furthermore, in USTR's recent report which boasted the environmental benefits of free trade agreements, the USTR noted that Peru is developing a "state-of-the-art electronic timber tracking system that will trace logs from stump to port in order to better detect illegal exports." Sounds impressive, right? Well, it would be, if it weren't for the fact that EIA found that "the entire system is based on fraudulent inventories that are used by concessionaires to launder timber, resulting in a 'garbage-in, garbage-out' tracking system." While the USTR has been made aware of these weaknesses, the problem has still not been addressed.

And finally, it's worth noting that EIA also found that no exporters or importers have been held accountable for the clear violations of Peruvian law and the free trade pact. No investigations, no prosecutions.

So given the complete lack of environmental enforcement with the U.S.-Peru trade deal, it seems completely reasonable -- and in fact necessary -- to question the assertions that having rules in an environment chapter of a trade pact -- a trade pact like the TPP -- will lead to any meaningful change on the ground. Getting the rules right is important, but change requires political will -- political will that is clearly lacking today.