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Insight: DNA tests tell trees from the wood; curb illegal logging

By David Fogarty

SINGAPORE (Reuters) - Call it CSI: Singapore.

Unlike the Crime Scene Investigators from the popular TV series, these detectives are hired to look for evidence of rogue wood from stores increasingly worried about being duped by a global trade in illegal timber now worth billions.

They take wood samples into their lab and put them through DNA tests that can pinpoint the species and origin of a piece of timber. They also track timber and timber products from forest to shop to ensure clients' shipments are legal.

"This is like CSI meets save the planet," says Jonathan Geach, executive director of Double Helix Tracking Technologies, the Singapore company that has developed and commercialized DNA testing for wood, the only firm in the world to do so.

Every two seconds, an area of forest the size of a football field is clear-cut by illegal loggers, the World Bank said in a recent study. Annually, such illegally cleared land is equivalent to the size of Ireland.

The money earned from a trade that Interpol estimates at up to $30 billion annually is untaxed and often run by organized gangs to fund crime and conflict. The logging increases global warming with heightened carbon emissions, and landslides through loss of watersheds. It causes loss of livelihoods in forest communities and dents global timber prices.

Until now, the battle against trade in illegal timber has been waged with regulations and preventive measures, and has not met with much success. Now it is increasingly focused on using the criminal justice system and law enforcement techniques.

New laws threatening jail time and fines are inducing companies around the world to take a harder look at where they get their timber -- or pay the price of neglect.

Gibson Guitar Corp, which makes some of the world's most prized guitars, agreed on August 6 to pay a $300,000 penalty after it admitted to possible illegal purchases of ebony from Madagascar.

Mislabeling, lying about origin or substituting one type of wood for another have become common practices in the timber trade.

Industry officials say rapid advances and plunging costs for DNA testing of timber now make it commercially viable for companies trying to meet new regulations in the United States and Europe against such practices.

Retailers such as Kingfisher, Marks & Spencer and Australian timber wholesaler Simmonds Lumber are either already using the technology or looking to add it to their existing timber sourcing practices.

WAY FORWARD

"We see this as the way forward," said Jamie Lawrence, sustainable forest and timber adviser for Kingfisher, Europe's largest home improvement retailer. Kingfisher has been using the services of DoubleHelix, as it is known, on an ad-hoc basis to unmask cases of possible timber fraud in their supply chains, he said.

With the miniaturization of genetic testing equipment, desktop-sized prototypes are already on trial. Laboratories around the globe could be carrying out cheap DNA timber tests for companies, customs agents and the police within two years.

A laboratory run by Andrew Lowe, the chief scientific officer at DoubleHelix and one of the world's top plant geneticists, is the frontline in the global fight against illegal logging.

It was at his laboratory at the University of Adelaide in South Australia that the method of extracting DNA taken from a log, a table or even flooring was refined -- the breakthrough needed to commercialize testing for timber importers, home improvement stores and law enforcement agencies.

Trees, like people, have unique DNA, said Lowe.

"The DNA is in every cell in a wood product and you can't falsify that DNA," he told Reuters in an interview.

By early 2011, Lowe was able to extract degraded DNA from decades-old wood and get accurate results. That led to an increase in business and DoubleHelix has 14 clients directly using their services, with most testing done in Adelaide.

In 2004, Lowe and colleagues extracted DNA from the oak timbers of King Henry VIII's flagship the Mary Rose, which sank in 1545 and was salvaged in 1982.

When DoubleHelix opened shop in 2008, the DNA story was a hard sell. But as new U.S. laws started to bite over the past two years, and with tougher laws set for Europe in 2013, the number of clients is growing, says Kevin Hill, DoubleHelix's founder.

Within two years, the aim is to license Lowe's DNA extraction technique to accredited laboratories globally, as the $150 billion timber industry comes under increasing pressure to stamp out illegal wood.

BUILDING DATABASES

While DNA testing per se is extremely accurate due to the unique DNA signature each species has, it has a major limitation to overcome -- an incomplete global map of tree genetics.

Constructing such a map is crucial because DNA for each species changes subtly from one area to another, acting like a postcode that can be used to determine a sample's origin.

Going into a forest to take DNA samples across a species' entire range is costly and time consuming. Building a database for teak, for instance, would cost about $1 million.

At present, databases exist for 20 tree species, mostly valuable tropical timbers, and is growing annually.

On the other hand, Kingfisher's B&Q home improvement stores carry 16,000 timber related products. For consumers, it is a bewildering choice of goods. For the illegal timber gangs, it is an opportunity for wood laundering.

Kingfisher has progressively put in place tougher checks of its timber sources to ensure all wood comes from sustainably managed forests. They use chain of custody certification schemes to follow the timber from forest to shop, but these are not fool-proof and illegal timber occasionally slips in.

"We're getting better at figuring out what's in our products and where it's coming from. So it's more difficult for rogue traders to pull the wool over our eyes," said Lawrence of Kingfisher, which has nearly 1,000 stores in eight countries.

The weakest link in timber supplies is between the forest and the sawmill, where stolen timber can be added to legitimate wood. In sawmill yards, too, logs from illegally cleared forests can be mixed with legal timber. DNA testing can overcome this, say DoubleHelix and their oldest customer, Simmonds Lumber, one of Australia's largest timber importers.

Simmonds imports merbau, a much-sought-after hardwood, from Indonesia, where illegal logging accounts for nearly half the timber cut in Indonesia, according to the World Bank study.

Using DoubleHelix's system, each shipment of merbau logs is tracked from forest to sawmill by taking DNA samples to ensure no other timber has been added. These DNA samples are then matched up with pallets of finished timber decking from the sawmill to Simmonds' warehouse in Australia.

THE CURSE OF STOLEN TIMBER

Simmonds, however, has been unable to charge a premium for its DNA-tested products because of intense competition in the timber trade.

"DNA is about marketing and gaining share rather than gaining extra margin," current chief executive John Simon said.

As a forklift loads pallets of decking into a container at a sawmill near Surabaya, Indonesia, Paul Elsmore, Simmonds' former chief executive and now a consultant to the Australian firm, explains that each container-load is worth around $45,000.

The cost of DNA testing and verification services was $250 for a container, equal to about 0.5 percent of the wood's value.

DoubleHelix says the ultimate goal is to make DNA testing so cheap all companies will do it.

Doing so would help tackle one of the perversities of the illegal timber trade: An abundance of stolen timber depresses prices, slashes margins and can deter investing in better due diligence of their wood supplies.

Arguably the biggest push for DNA testing are new laws in the United States, Europe and possibly Australia, which will make it easier to prosecute timber criminals.

"One of the real values of this genetic marking is its ability to gather better quality evidence and therefore aid prosecutions," said Davyth Stewart, criminal intelligence officer at Interpol.

DNA testing was already having an impact in prosecutions, said Shelley Gardner, illegal logging program coordinator for the United States Department of Agriculture Forest Service.

"Any time we've gone to the point where we got to court, they plea-bargained because the DNA was already such a deterrent. And these are just small cases, so when you start talking about real trade, I think that could have a big impact," she said.

Right now, nobody really knows the amount of illegal timber products in the market. So the detectives are going undercover.

Working with an international non-governmental organization, they plan to conduct spot tests in stores in Australia within a few weeks and then Europe and the United States, said Geach at DoubleHelix. The NGO did not want to be identified.

Lawrence at Kingfisher said better wood forensics just makes sense.

"Any retailer worth their salt should not just be thinking about risk, brand protection or even legality. They should be thinking this is a damn good idea."

(Editing by Bill Tarrant and Raju Gopalakrishnan)

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