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Migration through the Darien Gap — a remote area along the Colombia-Panama that sat largely untouched until it became the epicenter of 2021’s crush of migration — has virtually vanished, but families in the small community of Villa Caleta still fear bathing in the winding river. Fish, their main food source, reek of fuel from boats that carried people down the Turquesa. And deeper in the jungle, criminal groups that pushed into the region to profit off the migratory route are part of illegal gold mining and deforestation operations.
According to Global Canopy, US$6.1 trillion in funding was provided to the 350 companies with the greatest risk exposures to tropical deforestation by some 150 financial institutions in 2023.
Through this exposure, land conversion presents numerous supply-chain risks to firms, namely:
- The reputational risks posed by adverse media (exacerbated further if linked to any human-rights abuses in the context of land conversion).
- The legal risks represented by increasing regulatory and legislative pressures on companies and financial institutions to prevent deforestation.
- The physical risks present, given that most bank-financed businesses and commercial services ultimately depend on natural capital and resources directly or through their supply chains. Aggressive consumption of resources reduces their availability in the long term, undermining sustainable development and creating economic instability. Indeed, the World Economic Forum (WEF) has estimated that at least 50 percent of global GDP is reliant on nature and warned that the impacts of climate change would significantly destabilise global trade.
With help from U.S. organizations, Panama’s Indigenous people are using satellite images and other technologies to identify illegal logging and incursions by ranchers on their territory. But spotting the violations is the easy part — getting the government to act is far harder.
Recent seizures of illegally sourced wood in Panama have highlighted the important role the country plays the international timber trade, due to both its strategic geographical position and valuable species of trees on its territory. On March 28 and 31, Panamanian police seized two containers at ports in the northern city of Colón, carrying a species of local wood, known as cocobolo, on their way to China. Jointly, the two containers held around 850 pieces of cocobolo wood, also named Dalbergia retusa.
Key Resources
Methodology
Data Tools
Click here to access the Global Illegal Logging and Associated Trade (ILAT) Risk assessment tool and to download the Forest Trends User Guide describing the functionality of the ILAT Risk Data Tool.
Click here to access the Cattle Data Tool.
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