Those obtaining timber concessions in tropical countries are almost uniformly politically connected or are contributors to political campaigns or to the politicians themselves. The concessionaires are frequently politicians themselves, desiring large profits. For example, in Indonesia, most of the timber concessionaires are government officials or retired military men. One can readily see that monitoring logging operations or investigating violations is almost impossible under these conditions.

The timber industry generally pays relatively little for the concessions to log forests. Usually the companies pay low taxes, or obtain tax “holidays” from the government. These favors are considered by governments as an inducement to business, but in fact they are often payoffs for friends, relatives or other powerful interests. The terms of the concessions, at best, do nothing to encourage logging companies to log sustainably or non-destructively.

Generally, a particular area should not be logged more often than 25-40 years, but timber concessions are usually granted for less than 20 years; thus, there is no incentive to the timber companies to cut selectively. They take what can be sold, as rapidly as possible, without caring whether or not the forest will be able to maintain its productivity. Additionally, the fees imposed on logging are usually based only on volume, not on timber value or type. Not surprisingly, logging companies engage in “high-grading” – extracting trees of the highest value over large areas, in the process damaging less-valuable trees at will. This results in the loss of or severe damage to as much as 75% of the uncut trees (not to mention other vegetation) (Repetto, 1990). Timber companies also often obtain concessions which are larger than they can manage, often absurdly large. In the Ivory Coast, timber companies, within seven years, obtained concessions for two-thirds of the country’s production forests. In 1990, in Thailand, Indonesia and the Philippines, logging concessions granted covered more than the total area under forest (Repetto, 1990). Few concessionaires log their holdings; they resell the logging rights to other companies, thereby acting as middlemen. This can be highly lucrative.