Study shows connection between economic and environmental crimes in the production of wood, gold and cattle in the Amazon | Policy

Illegal logging and land grabbing are the main causes of deforestation in the Amazon, says NGO

A study that analyzed 131 Federal Police operations in the Amazon, launched from 2016 to 2022 to combat environmental crimes, highlights how economic illicit activities, such as money laundering, support the deforestation of the forest and make illegal production chains of wood, gold and livestock — the three that cause the most damage to the environment.

The study was carried out by the Igarapé Institute, an entity that produces data on topics relevant to the development of public policies.

“Environmental crime today is operated by criminal organizations. There is still an idea that it is a subsistence activity, but what we have been showing is that it is a highly profitable activity, carried out by criminal organizations in the broadest sense — with hierarchy, division of tasks and large investments to set up operations”, says Melina Risso, research director at the Igarapé Institute.

The entity created a new typology, “economic illicit”, to understand the practices that enable profit in illegal production chains. Economic illicit activities include:

• money laundry: refers to the act of disguising or hiding the origin of the illegally obtained resource;
• heating (or washing) of environmental assets: occurs when it is declared that an asset, such as gold, was extracted from a regularized location, when in fact it comes from an area of ​​prohibited exploration, such as conservation units and indigenous lands;
• fraud: consists of acts carried out to mask illegalities. It may be documentary, procedural or fiscal in nature;
• corruption and malfeasance: these are illegal acts carried out with the participation of public agents, who receive some advantage in return.

Igarapé identified that these four types of economic illicit acts, alone or in combination, were present in all 131 PF investigations analyzed in the study. See the graph below:

Prevalence of economic illicit activities in PF operations against environmental crimes in the Amazon (2016-2022)

Study identified patterns that indicate how related crimes support environmental crimes, at all stages of the production chain.

Source: Igarapé Institute. The sum (268) exceeds the total number of PF operations because each one can involve more than one type of economic offense.

The investigation data was obtained by the institute through the Access to Information Law and through disclosures made by the PF itself.

By analyzing 44 PF operations focused on combating illegal logging, the study identified patterns that indicate how these related crimes sustain environmental crime, at all stages of the production chain.

• Facilitated approval of forest management plans through payments, resulting in the issuance of environmental licenses that do not comply with the law — corruption;
• Fraudulent property title or registered in the name of “laranjas” in the logging area — document fraud.

• Transport carried out with licenses that do not correspond to reality regarding the species extracted, volume and/or origin — document fraud, corruption and asset overheating;
• Inspectors “turn a blind eye” to irregularities found during inspection of merchandise — corruption.

3. Sawmills and lumber mills:

• Issuance of “cold” invoices or with descriptions of plant species that differ from environmental control documents — document fraud, tax fraud and asset overheating;
• Payment of bribes to public servants to authorize the operation of logging companies embargoed by Ibama — corruption.

• Concealment of profits obtained illegally by companies in the sector — document fraud and money laundering;
• Movement of resources incompatible with the financial capacity of companies — document and tax fraud, money laundering and corruption.

5. International trade:

• Clandestine export (without documentation) — document and tax fraud;
• Export with expired or false documents — document and tax fraud and asset overheating.

Operation Carranca investigates illegal logging in Pará

One of the examples of a complex scheme, cited in the study, was that discovered by Operation Carranca, launched by the PF in Pará, in 2020 (see the video above). The investigations showed that the criminals operated in four distinct groups:

• Loggers with lower economic powerresponsible for the front line of illegal logging in municipalities;
• Loggers with great economic powerfinanciers of extensive chains of extraction, sawing and distribution of illegal wood, involving manipulation of forestry credits and falsification of documents;
• People linked to public bodiessuch as the Municipal Environment Secretariats, lawyers and forestry engineers, who use their public functions to encourage and cover up environmental crimes;
• Police officers responsible for monitoring the Transamazônica highwaywhich demanded undue advantages from truck drivers as a condition for allowing passage or provided confidential information about roadside inspection operations.

The illegal gold and cattle production chains present criminal schemes very similar to those of timber, according to the study, with economic illicit activities supporting environmental crimes.

“We need institutional capacity to tackle the issue with the same level of sophistication”, says Melina Risso.

She suggests an increasing alignment between agents from Ibama, Revenue, the Central Bank and the Financial Activities Control Council (Coaf), the body responsible for identifying signs of money laundering, so that there is a more effective fight against deforestation.

According to the researcher, repressive actions alone, such as PF operations, are not enough. It is necessary to attack the financial crimes that accompany environmental crime to achieve the objective of preserving the Amazon.

In this sense, the study makes a series of recommendations, such as developing “a specific risk assessment for money laundering and corruption related to environmental crimes in the Amazon Basin” and “expanding the dissemination and knowledge about the interconnection between environmental crimes and economic illicit activities , promoting specific studies and research in control institutions”.