Illegal Logging in Chile: Structure of the Forestry Sector, Emerging Threats, and Governance Responses
Author(s): Roberto F. Salazar-Córdova and Laurence Hewick
PAX Research Center of the Americas – Policy Research Paper
JEL Classification: Q23 (Forestry), Q56 (Environment and Development), K42 (Illegal Behavior and Enforcement), F18 (Trade and Environment)
Abstract
Chile hosts one of the most productive forestry sectors in the Southern Hemisphere while simultaneously confronting increasing pressure on its native forest ecosystems. Forestry exports reached approximately USD 6.37 billion in 2024, representing roughly 5.5–6 percent of Chile’s exports and about 1.9 percent of national GDP. At the same time, Chile experiences estimated annual forest losses near 80,000 hectares due to fires, land conversion, drought, and illegal logging. This article examines the structure of the Chilean forestry sector, analyzes the territorial intensity of its export model, and discusses illegal logging as one of the most controllable drivers of forest degradation. The paper concludes by proposing governance mechanisms based on cross‑sector institutional coordination and the Hexagonal Dialogue framework.
- Structure of the Chilean Forestry Sector
Chile’s forestry sector is among the most developed in Latin America and plays a significant role in the country’s export economy. According to statistics from the Central Bank of Chile and the Chilean Forestry Institute (INFOR), forestry exports reached approximately USD 6.37 billion in 2024. Chile’s GDP during the same year was approximately USD 330 billion, meaning forestry exports represent roughly 1.9 percent of national GDP and between 5.5 and 6 percent of total exports.
The sector is largely based on plantation forestry. Chile maintains approximately 3.1 million hectares of plantation forests dominated by Pinus radiata and Eucalyptus globulus (INFOR, 2023). These plantations are concentrated mainly in the regions of Biobío, La Araucanía, Ñuble, and Los Ríos.
In parallel, Chile still possesses approximately 14.7 million hectares of native forests according to the National Forest Inventory conducted by CONAF. These ecosystems provide biodiversity protection, watershed regulation, and carbon storage. - Territorial Intensity of Forestry Production
When forestry exports are analyzed relative to territory and population, Chile stands out within the broader Andean economic space. Dividing forestry exports by national territory produces approximately USD 8,420 of forestry export value per square kilometer annually.
When normalized by population and time, Chile generates approximately USD 35.8 per month per square kilometer per million inhabitants. This measure highlights the unusually high territorial intensity of forestry production. - Drivers of Forest Loss
Chile experiences estimated forest loss near 80,000 hectares annually according to Global Forest Watch. Several structural drivers contribute to this pattern, including forest fires, plantation expansion, agricultural land conversion, infrastructure growth, and prolonged drought.
The mega-fires of 2017 burned approximately 570,000 hectares across central and southern Chile (CONAF, 2018). Climate change and the prolonged Chilean megadrought have increased wildfire frequency and severity. - Illegal Logging in Chile
Illegal logging in Chile is increasingly associated with organized criminal activity. Timber theft operations are concentrated primarily in the regions of La Araucanía and Biobío. Police and judicial estimates suggest that timber theft generates economic losses exceeding USD 100 million annually. - Financial Mechanisms
Illegal timber markets frequently rely on financial manipulation mechanisms. One common method is trade mis‑invoicing, which involves falsifying price, quantity, origin, or quality in trade documentation in order to integrate illegal timber into legitimate supply chains. - Institutional Response
Reducing illegal logging requires coordinated action between environmental agencies, law enforcement, customs authorities, financial regulators, and the private forestry sector. Improved timber traceability systems and stronger transport monitoring can significantly reduce the ability of criminal networks to integrate illegal timber into legal markets. - Governance and the Hexagonal Dialogue Framework
The Hexagonal Dialogue framework integrates six actors simultaneously: public institutions, private enterprises, civil society organizations, academic institutions, media, and local communities. The model emphasizes that territorial development and environmental governance become viable when these actors collectively negotiate investment roadmaps linked to concrete projects.
This governance approach has been developed in Latin America through cross‑sector initiatives described in ADN+ publications (Salazar‑Córdova, 2021). The framework aims to align environmental monitoring, financial accountability, and community participation. - Conclusion
Chile’s forestry sector remains one of the most productive export industries in Latin America. However, protecting native forests requires stronger governance mechanisms capable of controlling illegal timber extraction. Because Chile’s forestry sector exhibits unusually high territorial intensity, failures in forest governance generate disproportionately large environmental and economic consequences.
References
Banco Central de Chile. (2024). Estadísticas de comercio exterior de Chile.
CONAF. (2018). Informe de incendios forestales 2017.
CONAF. (2022). Inventario forestal nacional de Chile.
Garreaud, R. et al. (2020). The Central Chile mega-drought. Journal of Climate.
Global Financial Integrity. (2022). Trade mis‑invoicing and illicit financial flows.
Global Forest Watch. (2023). Forest loss data for Chile.
INFOR. (2023). Anuario forestal de Chile.
Salazar‑Córdova, R. F. (2021). Diálogo hexagonal y gobernanza territorial. ADN+.