Impacts of illegality and barriers to legality: a diagnostic analysis of illegal logging in Honduras and Nicaragua

SUMMARY This paper summarises a diagnostic analysis of the illegal timber trade in Nicaragua and Honduras conducted by a team of local and international researchers during 2002. 1 Evidence of the scale and dynamics of illegal logging in both countries, as well as its economic, social, environment and governance impacts are presented. The paper describes how over-complex regulations and market competition from cheap illegal timber reduce the economic viability of operating legally. This particularly affects small-scale producer groups, leaving them vulnerable to economic capture by illegal timber traders. The paper calls for a combination of measures to reduce regulatory “barriers to legality”, while tackling corruption and organised crime. Incentives for sustainable forest management, and regional coordination of forest law enforcement and governance in Central America, are also required.