Timber

As much as 23% to 30% of hardwood lumber and plywood traded globally could be from illegal logging activities. As the illegal timber trade continues to grow, so does opportunities for fraud in connection with timber harvesting as well as in the wood products supply chain.

Substantial profits from illegal logging provide a strong motivation and rationalization to engage in timber fraud, while loopholes, lax enforcement, and corruption provide extensive opportunities for fraud to go undetected.

Whistleblowers around the world can use the Foreign Corrupt Practices Act to report corruption in the timber trade, while protecting their identity and qualifying for a reward.

If companies fail to address increasing deforestation risks tied to their business, misleading investors in the process, whistleblowers could play a role in revealing these hidden risks.

Whistleblowers can use anti-money laundering laws to reveal how timber trafficking networks launder the proceeds of illegal activity.

NWC has taken a look at several high profile cases in the timber industry to highlight the type of fraudulent activities that can occur.

Under current laws like the Lacey Act and False Claims Act, whistleblowers can be protected and receive rewards when exposing fraud within the illegal timber trade.