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Direct annual fiscal/financial losses to the governments of Honduras and Nicaragua due to clandestine logging were estimated at $11-18 million and $4-8 million respectively (including both lost revenue and wasted public and aid expenditure on forest management). The annual gross economic value of clandestine timber was estimated at $55-70 million for Honduras and $20-30 million for Nicaragua. In terms of governance impacts, illegal logging contributes to patronage and corruption of the relevant government institutions; weakens the public forestry administration and control mechanisms; and also undermines the social and economic basis of community forestry. Illicit forest extraction erodes the livelihood assets of the poor. In remote rural areas it also contributes to a broad and complex set of criminal activities and increased conflicts and violence. It constitutes an unfair competition and a disincentive for the efforts of forest management, significantly decreasing its economic viability. It also contributes to deteriorating natural resources and the associated loss of environmental services.
Loggers, processors, communities and individuals in the private as well as the public sector confront many barriers to legality, as well as enticements or stimuli to illegality. Various aspects of the legal and policy framework combine to increase confusion, are often inconsistent, and complicate compliance or fulfilment. These effects are compounded by the lack of state capacity to prevent, detect and enforce the law (by the detection and prevention of illegal activities). Funding and staffing of government agencies is inadequate. Forest sector monitoring and enforcement is also difficult due to inadequate knowledge of forest resources (who owns them, and how they change over time). Illegal logging often goes undetected, and the information for successfully prosecuting offenders is often unavailable. The limited capacity for detection and punishment of forestry sector crimes, the meagre anticipated penalties, corruption, and governance weaknesses combine to produce significant incentives to operate outside the legal framework.
There exists a considerable body of evidence, anecdotal as well as documented, on illegal logging in Central America. This is a complex, multifaceted and unexposed phenomenon. However, it is clear that the cross-border movement of illegal timber is a phenomenon which involves the whole Central American region, although varying in scale between areas, and over time. This has important policy implications, for example that unilateral efforts run the risk of having a limited effect.
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