A criminal organization allegedly operating within SEDAM in Rondonia, Brazil was reportedly “dismantled” by Civil Police. Six warrants were issued, and 10 public servants were removed from public service. Government officials within SEDAM are suspected of money laundering and crimes against environmental administration.
What is SEDAM?
SEDAM is a government institution in the state of Rondonia with the mission of safeguarding the “sustainability of environmental resources”. Its main functions include supervising and regulating activities related to natural resources and promoting the management of conservation units in the state. Timber companies domiciled in Rondonia are required to obtain an operating license issued by SEDAM (in addition to municipal and federal permits).
How did the alleged crime scheme work?
While investigations are still underway, and future operations may still be carried out, contents of the Operation “Pau Oco” reportedly show that a criminal organization acted within SEDAM and favored a group of timber companies involved in illegal logging.
The timber companies allegedly sent requests to SEDAM officials who would authorize logging in areas without management plans. If timber was harvested illegally, authorities in SEDAM would fraudulently allocate credits (a form of permit that justifies the existence of inventory). Other non-fictitious authorizations were used as a replacement without concern that this would create duplicate information in the system. Eventually, this was discovered by public servants within SEDAM.
The following is a list of other alleged irregularities:
- The issuance of an uncertified license at Gleba Corumbiara in the municipality of Pimenta Bueno;
- The issuance of a license, without an inspection, to a timber company whose operating license had already been revoked after being involved in the virtual wood credit trade;
- The issuance of a concession illegally to a company that did not present the sustainable procurement plan – a prerequisite for renewal;
- Attempts at fraud in accessing the document of forest origin (DOF) system.
Analysis of documentation in timber due diligence
Demand-side laws like The Lacey Act, European Union Timber Regulation (EUTR), and others emphasize documentation as a means for timber companies to comply with these regulations. The problem with emphasizing documentation, however, is that documentation can be manipulated. Companies need to make sure that there is an analysis of the documentation they collect to verify whether the data declared within matches realities on the ground.
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