Illegal logging in Indonesia costing U.S. jobs-report

* Indonesian illegal logging hurting U.S. industry -report

* Trade tools can help clean up the sector

* Illegal logging threat to efforts to fight climate change

By David Fogarty, Climate Change Correspondent, Asia

SINGAPORE, May 5 (Reuters) - Illegal logging in Indonesia, a leading timber exporter, is threatening jobs in the U.S. forest products industry and undermining efforts to use forests to fight climate change, a report by U.S. labour and green groups says.

The report, "Illegal logging in Indonesia, the environmental, economic and social costs", lists numerous steps the country has taken to curb illegal logging but says much more needed to be done to end the corruption and demand that drives the trade.

"Illegal logging undermines the strength and sustainability of the forest products' economy both in Indonesia and the United States," says the report by the BlueGreen Alliance, Sierra Club, United Steelworkers, Rainforest Action Network and the Natural Resources Defense Council.

The practice by Indonesia and other nations distorted global prices of timber, undercut sustainably manufactured products and jeopardised the jobs of U.S. workers, the report says.

"Under current conditions, there is no level playing field. Manufacturers across the U.S. are struggling to compete against imported, illegally harvested low-priced wood and wood products," it says.

Citing U.S. Bureau of Labor Statistics, it says the logging, wood, paper and cabinetry industries had lost 242,000 jobs, or roughly 23 percent of its workforce, since 2006.

U.S. industry losses due to illegal logging-related depressed wood prices and lost exports had been estimated at more than $1 billion, the report added.

The authors called for steps to reform the harvest, trade and purchase of wood and wood products and said it was crucial the United States was not complicit in perpetuating illegal logging by allowing access to U.S. markets.

"Trade and investment agreements should end demand for and trade in wood products that are illegally and or unsustainably sourced," it said.

For example, official recognition that non-enforcement of Indonesian forestry laws was an unfair trade subsidy would also help curb illegal logging, the authors say.

TRANSPARENCY

Indonesia has stepped up efforts to fight illegal logging and to curb deforestation. Steps include banning the exports of round and rough-sawn logs and asking the Corruption Eradication Commission to investigate graft and logging-related crimes.

But the report cites lax enforcement of existing forestry and anti-corruption laws as hindering the fight against illegal logging and calls for much greater transparency in tracking the origin of timber and timber products.

It also says the majority of logging in Indonesia was still illegal. A spokesman for country's forestry department disagreed. "We admit there is still illegal logging but it doesn't mean all logging is illegal," said Masyhud, who goes by one name.

Deforestation is also a major source of greenhouse gas emissions and Indonesia's national climate change council says the country is one of the world's top carbon emitters because of deforestation and forest fires.

The country's tropical forests cover a vast area and rank only behind Brazil and the Democratic Republic of Congo in Africa in area, acting like lungs of the atmosphere.

The government has pledged to cut the growth of its greenhouse gas emissions by curbing deforestation and promoting a U.N.-backed scheme that aims to reward developing nations for saving their forests.

Projects that preserve and rehabilitate large tracts of forest can earn money through the sale of carbon credits to rich nations trying to meet mandatory carbon cuts at home. The money is meant to flow to investors, local communities and government.

But the report warned against a rush of investment into the scheme, called reducing emissions from deforestation and degradation, or REDD, saying poorly designed and managed projects could leave forests vulnerable to further destruction.

The report can be found at here..( PDF, 700kb).

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