Risk Tool

COUNTRY PRODUCTION STATUS The majority of timber harvested in Panama by industrial companies is exported. The domestic market is largely supplied by artisanal producers. Read more about timber production in Panama. To find out more, click here

LAWS Panama has a number of laws and regulations pertaining to forest management, wood harvesting, processing and trade. To find out more, click here.

TRANSPARENCY Information on transparency and governance indicators can be found here.

CITES Panama acceded to CITES in 1977.

CONTACTS Panama Contacts for industry associations, civil society, and government agencies working on forest related issues in Panama.

Note: In 2015 the National Environmental Authority (ANAM) was renamed the Ministry of Environment. According to Law no. 8 (2015) any laws that are still being implemented should continue to refer to/use ANAM and not Ministry of Environment. Therefore, throughout this profile both of these names may be used. For more information, please refer to the legality section of this profile.

Last updated: October 2016

Forest Resources

Resources Overview

According to the FAO (2015), of Panama’s 7.4 million hectares (ha) of land area, 4.6 million ha are covered with forests1,2 (about 62%).3 Panama’s primary4 and secondary forests are among the biologically richest tropical forests worldwide due to the country’s topographic and climatic diversity. These forests form part of the Mesoamerican Biological Corridor and are particularly important for migrating bird species between North and South America5. Panama’s Darien region, which borders with Colombia, contains over 41% of the country’s mature natural forests6. This area is not only one of the most biologically diverse regions on Earth, but also home to several indigenous groups7. The majority of Panama’s timber production originates east of Panama City in the Darien region.8

Plantations are mainly made up of introduced tree species: teak (Tectona grandis), pine (Pinus caribaea), Cedro Espino (Bombacopis quinata), Amarillo (Terminalia amazonia), Almendro (Dipteryx panamensis) and laurel (Cordia Alliodora) which is planted to shade cacao.9

Deforestation is caused by urbanization, cattle ranching and agro-industrial development, but also by unregulated shifting cultivation and, in already degraded forest areas, by poor logging practices.10 In the most recent FAO Global Forest Resources Assessment it was decided to not include some statistics for Panama, including deforestation as there was a lack of consistent data over the time period requested (according to Panama’s country profile, work is ongoing to produce this data for future reports).11 Estimates from the ITTO report indicate that on average, Panama lost an estimated 42 000 hectares of forest per year in the 1990s (1.18% per year). In 2008, La Autoridad Nacional del Ambiente de Panamá (ANAM Panama’s national environmental authority)12 estimated the deforestation rate of natural forests between 2000 and 2008 at about 27 800 hectares (0.96%) annually, significantly less than in the previous decade.13 Deforestation rates post 2008 are not available.

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FAO (2015) Forest Resources Assessment, Terms and Definitions. The FAO define forest cover as “land spanning more than 0.5 hectares with trees higher than 5 meters and a canopy cover of more than 10 percent, or trees able to reach these thresholds in situ. It does not include land that is predominantly under agricultural or urban land use.” http://www.fao.org/docrep/017/ap862e/ap862e00.pdf 

The amount of forest area referenced here relies on the UN FAO definition of forests, since the FAO definition is one of the world’s most widely used standards for measuring and reporting forest area at the country level. The FAO forest definition, however, has been criticized because it captures monoculture plantations and includes areas designated as forest land-use, even when those areas are un-stocked with trees at the time of measuring forest area. It should also be noted that the FAO definition counts areas with 10% or more canopy cover as forests (in addition to other criteria). By comparison, for example, Global Forest Watch sets its default tree cover canopy analysis tool at 30 % canopy cover. For more information on this issue, see the FAO’s Global Forest Resources Assessment website, in addition to this open letter signed by civil society organizations from around the world, as well as these articles by Vidal et. al.Mather and Mathews and Grainger.

3 FAO (2015), Global Forest Resources Assessment http://www.fao.org/3/a-i4808e.pdf

4 Primary forests are naturally regenerated forest of native species, where there are no clearly visible indications of human activities and the ecological processes are not significantly disturbed. http://www.fao.org/docrep/017/ap862e/ap862e00.pdf

WWF (2015), http://assets.worldwildlife.org/publications/677/files/original/March_2015_Country_Risk_Profile_NA_Booklet.pdf?1429535765

6 WWF (2015), http://assets.worldwildlife.org/publications/677/files/original/March_2015_Country_Risk_Profile_NA_Booklet.pdf?1429535765

Foundation for the Promotion of Indigenous Knowledge in Panama (2003), http://www.binal.ac.pa/panal/downloads/fipdoc.pdf

FAO (2000) http://www.fao.org/docrep/006/ad395s/AD395s10.htm

ITTO (2011), http://www.itto.int/news_releases/id=2663

10 Anywhere Panama (accessed 2016),  https://www.anywherepanama.com/travel-guide/environmental-issues

11 FAO (2015), (in Spanish).  Country Report for Panama, http://www.fao.org/3/a-az302s.pdf

12 National Environmental Authority, also known as the Ministry of Environment (please see the legality section for more information)

13 ITTO (2011), http://www.itto.int/news_releases/id=2663


Forest Resources

About Forest Resources

This section provides an overview of the country's forest cover and a list of species found naturally and on plantations.

Forest Management

Management Overview

Forests are divided into three major categories:1

  1. Forests for Production: Natural or man-made forests in which it is possible to intensively exploit a sustained yield of forest products for economic gain.
  2. Protected Forests: Those that are considered of national or regional interest to regulate the water cycle; protect watersheds, reservoirs, populations, crops and infrastructure in the public interest; prevent and control erosion and the harmful effects of the winds; house and protect wildlife species; or contribute to national security.
  3. Special Forests: Those dedicated to preserving areas of scientific, historical, cultural, educational, tourist and recreational sites and other public utility and social interest.

Panama has three main forest use processes:

1. Use of natural forest under state concession

These can be directly awarded if comprised of less than 5,000 ha or through public tender if they are larger.2,3

2. Harvesting of forest plantations

The Forestry Law4 defines reforestation as the action of planting tree species on land that is void of tree vegetation whether for commercial, landscape, environmental, tourism, agroforestry, silvo-pastoral, energy or other purpose in order to generate a forest plantation5. In Panama, there are two types of forest plantations : a) Production - Commercial purposes that have direct benefits of planting trees for timber production; and b) Protective purposes which provide indirect benefits through the restoration of forest cover and natural processes known as ecosystem services. 

3. Individual permits (subsistence)

Individual permit rights for subsistence are granted in rural areas where the resource exists and there are no problems with the ownership of these trees, or ownership of the land, whether private or public.6 However, it is difficult to keep proper control of timber harvesting provided by these permits, especially identifying the origin of each tree, and a single buyer could fill out several of these permits and collect larger amounts of wood. These higher amounts circumvent national legislation, greatly contributing to illegal logging and timber trade.7

According to the FAO, the forestry sector of Panama was worth $67 million in 2011, or 0.4% of the annual GDP.8 Panama has 22,008 ha of FSC certified area (over 8 certificates)9. There are no certified forests affiliated to PEFC (data checked September 2016).10

Forest Governance

The Ministry of Environment (Ministerio de Ambiente), previously known as the National Environmental Authority, (La Autoridad Nacional del Ambiente de Panamá, ANAM)11 is the government institution responsible for the management and sustainable use of forest resources. Its mission is to ensure the healthy and rational use of Panama’s natural resources, the environment, and the transformation of Panamanian environmental culture to improve their quality of life.

According to some NGOs, Panama’s forestry policy suffers from ambiguity and lack of implementation.12 Due to the multiple loopholes exploited in several of the forest use permit processes, the ability to have a sustainable sector is constantly undermined. Law No. 8 (2015) amended the 1994 Forestry Law (no. 1). It created the Ministry of Environment, as the governing body of the State in the protection, conservation and restoration of the environment and sustainable use of natural resources to ensure compliance and enforcement of laws, regulations and the National Environment Policy. The Ministry is responsible for public consultations and developing mechanisms for coordination and implementation of policy. Technical and administration actions are carried out at the local level by regional directors.13

Limited budgets and lack of political will has impeded authorities in implementing basic elements laid out in laws and in subsequent amendments.14 The new administration (post 2014 elections) has however committed to bolstering staff and access to technology in order to improve their ability to monitor plantations, oversee harvest processes, and produce consistent data for the sector.15

In 2015, Panama’s Environment Minister stated that “almost all the timber taken from the jungle province of Darien on the border with Colombia is cut illegally without a proper permit and sold outside Panama.16 On a national level, almost 40% of all wood is cut illegally. Most of the timber comes from high-value trees like Tolu balsam, almond, mahogany and cocobolo, and the main destinations are the United States, Europe and Asia”.17

In 2015, almost 300 logging permits were pending a review, and the Ministry announced their intention to reform the Forestry Act to intensify efforts against illegal exploitation of forests and introduce tax incentives for legal logging.18

Common types of forest-level illegalities in Panama19

  • Subsistence permits and transport guides granted on a discretionary basis (without required inspections) that authorize overestimated volumes and species not found in the permit’s harvest area
  • Accumulation of subsistence permits by local wood traders results in large-scale “legalization” of illegally harvested species and volumes
  • Logging outside of licensed areas and in prohibited areas, including illegal logging in protected areas within licensed areas
  • Illegal land clearing of natural forest for cattle ranches, with the cleared wood being sold
  • Logging by unlicensed/unregistered individuals (e.g. informal logging by indigenous or Afro-Darienite communities)
  • Logging and smuggling of endangered species due to lack of enforcement of export regulations (export permits given for rough sawn/green timber where only finished products are permitted)
  • Issuing of CITES export permits based on false declarations of origin (“dead tree” permits for previously felled trees)

Transparency

Transparency in Panama's forest sector remains a challenge. Civil society's ability to hold forest authorities and the private sector accountable or to fully participate in the management of forest resources is hampered by several constraints20, including voids and inconsistency in official data, limited public access to information, legal inconsistencies and absence of clarity, lack of enforcement and implementation of laws, reign of impunity, and weak institutional capacity.21

The Transparency International’s (TI) Corruption Perceptions Index (CPI) measures perceived levels of public-sector corruption, on a scale of 0-100 (0 = 100% corruption and 100 = no corruption). For 2015 Panama scored 39/100 on the corruption perception index22, which indicates a high level of corruption in the country. It ranked 72 out of 167 countries assessed in 2015. This was an improvement from 2014, when Panama ranked 94 out of 175 countries.

The results of the CPI are supported by the World Bank’s set of Worldwide Governance Indicators (WGI) for all world economies. These indicators are important barometer in terms of risk assessment. The WGI country reports are based on six aggregate governance indicators: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. Countries are ranked (percentile rank model) for each of the six governance indicators on a scale from 0 to 100 where 0 corresponds to lowest rank and 100 corresponds to highest rank (better governance).

In 2014, Panama scored 63 in Voice and Accountability; 51 in Political Stability and Absence of Violence; 63 in Government Effectiveness; 65 in Regulatory Quality; 55 in Rule of Law; and 46 in Control of Corruption23. These figures are all indications that governance in Panama still needs improvement.

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FAO (2000), http://www.fao.org/docrep/006/ad395s/AD395s10.htm

Foundation for the Promotion of Indigenous Knowledge in Panama (2003), http://www.binal.ac.pa/panal/downloads/fipdoc.pdf

3 ITTO, 2005, State of Tropical Forest Management, Panama country profile. http://www.itto.int/sfm_detail/id=12550000

4 Forestry Law https://panama.eregulations.org/media/Ley%20N%C2%B0%201%20del%203%20de%20febrero%20de%201994.pdf

National Forestry Development Plan (2008), http://www.miambiente.gob.pa/images/stories/BibliotecaVirtualImg/DesarrolloForestal/modelo_forestal_sostenible.pdf

6 ITTO (2005), http://www.itto.int/sfm_detail/id=12550000

FAO http://www.fao.org/docrep/006/ad395s/AD395s10.htm  

FAO (2011), http://www.fao.org/docrep/013/i2000e/i2000e.pdf

FSC (accessed September 2016), https://ic.fsc.org/en/facts-figures

10 PEFC (2016), http://www.pefc.org/about-pefc/who-we-are/facts-a-figures

11ANAM was renamed the Ministry of Environment in 2015. According to Law no. 8, any existing laws should continue to refer to ANAM as opposed to the Ministry of Environment. Therefore, both names are used throughout the profile. For more information, please see the legality section.

12 Foundation for the Promotion of Indigenous Knowledge in Panama (2003), http://www.binal.ac.pa/panal/downloads/fipdoc.pdf

13 UNEP (2015), http://www.uncclearn.org/sites/default/files/inventory/panama_brochure_english_150708_highres.pdf

14 Centro de la Mujer Panameña (2012), http://www.socialwatch.org/sites/default/files/panama2012_eng.pdf

15 Ministry of Environment (2016), http://www.miambiente.gob.pa/index.php/2013-02-20-08-59-23/noticias/644-ministerio-de-ambiente-realiza-taller-sobre-inventarios-forestales-nacionales

16 EFE (2015), http://www.efe.com/efe/english/business/illegal-logging-rampant-in-panama-gov-t-says/50000265-2635725

17 EFE (2015), http://www.efe.com/efe/english/business/illegal-logging-rampant-in-panama-gov-t-says/50000265-2635725

18 Fox News (2016), http://latino.foxnews.com/latino/news/2015/06/10/illegal-logging-rampant-in-panama-govt-says/

19 WWF (2015), http://assets.worldwildlife.org/publications/677/files/original/March_2015_Country_Risk_Profile_NA_Booklet.pdf?1429535765

20 Forest Peoples Programme (2009), http://www.forestpeoples.org/sites/fpp/files/publication/2010/08/fcpfbriefingoct09eng.pdf

21 The International Centre for non-profit law [accessed October 2016] http://www.icnl.org/research/monitor/panama.html

22 Corruption Perception Index (2015), https://www.transparency.org/cpi2015/#results-table

23 World Bank (2014), http://info.worldbank.org/governance/wgi/index.aspx#home (copy and paste link rather than click to open)


Forest Management

About Forest Management

This section provides an overview of the country's forest management, transparency indicators, CITES Agreement information as it applies to the country, and relevant laws and regulations (i.e. forestry laws, processing/manufacturing laws, trade laws, tax laws, and transport laws).

Forest Products

Products Overview

Commercially important species1

Most commonly harvested species in Panama are: Carapa guianensis (tangare), Prioria copaifera (cativo), Tabebuia rosea (oak), Calophyllum brasiliense (maria), Copaifera aromatica (cabimo), Dalbergia retusa (cocobolo), Ocotea spp (bambito) and Swietenia macrophylla (caoba). Other species that have grown popular also include Miroxylon balsamum (bálsamo), Platymiscium pinnatum (quira), Hieronyma alchorneoides (zapatero), Puteria spp (platano), Gyranthera darinensis (cucharo) and Astronium graveolens (zorro).2

The main exported timber is a planted species, Tectona grandis (teak), but a significant quantity of Pinus caribaea (Pino caribe) is also exported. These two species account for 82% of the planted area.3

Primary forest products include 5 to 10-year-old plantation teak logs/ blocks (from thinnings), sawn timber from coniferous plantations (mainly Pinus caribaea), tropical wood flooring and decking (balsam, ipe), and pulp and paper (mainly eucalyptus).4


Production Status

According to the ITTO Status of Tropical Forest Management report (2011)5, forest management in natural forests is carried out by way of various types of timber-cutting licenses. These include logging permits for domestic use (e.g. for housing and boat–building), special permits for subsistence (granted to poor individuals for cutting a small number of trees for personal use or for sale to commercial enterprises), 5-year forest concessions for areas 1000–5000 ha in size, and 20-year concessions for areas larger than 5000 ha.6

However, due partially to lack of proper government oversight, management, and support of the sector, smaller-scale logging is being carried out with little oversight and without detailed management plans. The timber industry has outdated equipment and an under-supply of legally produced timber. Large areas of forest are classified as protected areas; nevertheless, they are generally not managed or controlled effectively. Forest plantations are being developed, mainly on private properties. Forest management appears strongest in the watershed of the Panama Canal.7,8

According to Knoema, total industrial roundwood (NC) production in 2013 was estimated at 191,000 m3, of which only 84,000 m3 was exported. Potentially, there is also considerable production that is not officially registered.9

Total installed sawmill capacity is unknown, although it has been estimated at 200,000 m3.10 The primary processing industry is very small. There are about 250 small secondary processing units using old equipment located in the periphery of Panama City and in the central provinces.

In Panama, a cross-sector project called the "Alliance for One Million"11 aims to plant one million hectares of native forest species in 20 years from 2014 in order to increase reforestation or afforestation, strengthening Panama's forest sector, helping the country meet its CO2 emission goals, and helping to meet the goals laid out in Panama's National Forestry plan.

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FITTO (2011), http://www.itto.int/sfm/

FAO (2010), http://www.fao.org/docrep/013/al595S/al595s.pdf

3 ITTO (2011), http://www.itto.int/sfm/

4 WWF (2015) http://assets.worldwildlife.org/publications/677/files/original/March_2015_Country_Risk_Profile_NA_Booklet.pdf?1429535765

ITTO (2011), http://www.itto.int/sfm/

6 ITTO (2011), http://www.itto.int/sfm/

ITTO (2005), www.itto.int/direct/topics/topics_pdf_download/topics_id=16320000&no=1

Simonitt and Perrings (2013), http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3677501/

Knoema, July 2014.  Accessed Feb 2015. http://knoema.com/FAOFS2014Jul/forestry-statistics-july-2014

10 Blaser. J., Sarre, A., Poore D. & Johnson, S. 2011. Status of Tropical Forest Management 2011 ITTO Technical Series no 38. ITTO, Yokohama, Japan.

11 Alianza por el Millon de Hectareas Reforestadas en 20 Años - 17 de Junio 2014

Forest Products

About Forest Products

This section provides an overview of the country's forest production and product trade.

Contacts

Contacts Overview

Several industry associations, NGOs, civil society, and government agencies profiles work on forest related issues in Panama. Their profile and contacts are found here.


Industry Associations

The Panamanian National Reforestation Association (ANARAP) is a nonprofit apolitical group, formed with the aim of promoting reforestation programs in the country to ensure a sustained supply of forest products.

The Union of Industrialists of Panama (Sindicato Industriales Panama, SIP), founded in 1945, is the umbrella institution that represents and defends the interests of the domestic industry. It serves as an agency of communication, information and education among its members by facilitating the orientation of the Panamanian industry in the changing world of today and improves their competitive advantages.


Civil Society Organizations

The National Association for the Conservation of Nature (ANCON) is a private, nonprofit organization, whose mission is to conserve the biodiversity and natural resources of Panama for the benefit of present and future generations. It was founded in 1985 by a group of prominent businessmen, scientists and community leaders. Since its inception, ANCON has worked closely with national and international agencies, academic, commercial entities and as well as local communities.

The Mission of the Young Wounan and Embera of Panama Organization (Organización de Jovenes Embera y Wounan de Panamá, OJEWP) is to promote, strengthen and reinforce the cultural identity of indigenous peoples, improving their economic, social, political and spiritual quality of life from the perspective of their worldview and wisdom.

The main goal of the Darien Fund is to facilitate the conservation, protection, restoration and sustainable use and management of tropical forests of Darien National Park and its buffer zone, including up to 5 kilometers in in areas adjacent to the park boundaries. This fund is managed by the Natura Foundation.

Relevant International Organizations

WWF is currently working in collaboration with its strategic partners ANAM and the ITTO, to strengthen governance and traceability in Panama’s forestry sector. A pilot program aims to test and refine a new traceability system, as well as promote sustainable forest management and responsible trade through an outreach campaign.

The USAID Regional Climate Change Program (PRCC), funded by the U.S. Agency for International Development (USAID), works to reduce the vulnerability of human populations to climate change in Central America and the Dominican Republic and integrate into development decisions geospatial technologies for earth observation and monitoring. It is implemented by six organizations: CATIE (Tropical Agricultural Research and Higher Education Center), International Union for Conservation of Nature (IUCN), The Nature Conservancy (TNC), Co-operative for Assistance and Relief Everywhere (CARE), Terra Global Capital LLC. (Terra Global) and Development Alternatives, Inc., Latin America and the Caribbean (DAI LAC). It also aims to reduce emissions, establishing and applying incentives to reduce deforestation, degradation of forests and other land uses that cause emissions and to support implementation of REDD+ mechanisms. To achieve these impacts, the PRCC will focus on sustainable landscapes and adaptation, carrying out actions in places such as the Darien in Panama, La Mosquitia in Honduras, the North Atlantic Autonomous Region (RAAN) in Nicaragua and the Selva Maya area in Guatemala, Belize and Mexico.


About Contacts

This section provides a list of local contacts who can serve as sources of further information, including industry associations, civil society organizations and government ministries.

Tools & Resources





Tools and Resources

About Tools & Resources

This section directs you to useful and relevant tools and resources, developed by WRI, our partners or other organizations, that provide more information about the country.

Laws & Regulations

Forestry Laws

Panama has a number of laws and regulations pertaining to forest management, wood harvesting, processing and trade.

Some laws are only available in full through the Ministerio De Ambiente website, where a search tool can be used to select the appropriate legislation to be downloaded as a PDF. To find the legislation you’re interested in, go to ‘Normativas’, ‘Normas Ambientales’, select the type ‘Tipo’ of legislation (for example ‘Decreto Ejecutivo’ for an Executive Decree or ‘Ley’ for law) and fill in the date information e.g. July 2004. Click search ‘Buscar’ and a list of the appropriate legislation will be provided.

The National Forestry Development Plan (2008) is a sustainable forest model that is due to come to an end in 2033. The plan is divided into three lines of work: An ecosystem restoration program; forest stewardship program and training, research and dissemination program. The program promotes agroforestry and silvo-pastoral systems for food production, but also promotes closer coordination between responsible institutions in order to prevent the undermining of forest resources.

The Forestry Act - Law 1 of 1994 - Panama’s first specific forest law (Law 1/94) was passed in 1994, replacing Law 39/1966, with the aim of conserving and managing forest resources sustainably. It emphasized logging and reforestation and established the National Fund for Forest Development and Protection (Fondo de Protección y Desarrollo Forestal – FONDEFOR) to assist in forest promotion, protection, management, supervision, control and research, and extension. By mid-2010, however, the fund was still not functioning, and all forest-related taxes were going to general revenue.

Law No. 8 (2015) amends part of Forestry Law No 1. It created the Ministry of Environment as the governing body of the State in the protection, conservation and restoration of the environment and sustainable use of natural resources to ensure compliance and enforcement of laws, regulations and the National Environment Policy. The Ministry is responsible for public consultations and developing mechanisms for coordination and implementation of policy. Technical and administration actions will be carried out at the local level by regional directors.

Article 4 of Law No. 8 sets out that as part of the budget of the Ministry of Environment, income will be created for environmental funds, most notably the Fund for Forest Protection and Development (Fondo de Protección y Desarrollo Forestal – FONDEFOR) which was established by Law No. 1, Article 68 (1994). Article 71 of Law No. 8 states the funds for FONDEFOR will be obtained through the form of permits; inspection fees for technical service; forest transport and processing; revenue from fines; revenue resulting from the sale of seeds, plants, wood and other forest products.

Article 77 of Law No. 8 clarifies that the Ministry of Environment used to be known as the National Environmental Authority (ANAM) and any earlier laws that are still being implemented many not refer to the Ministry by name but rather the previous title of National Environmental Authority or ANAM. This also applies to general manager/deputy manager and the Minister of Environment/Deputy Minister of Environment. Article 78 confirms that the spirit and letter of administrative acts is recognized, therefore if people began proceedings before Law No. 8, they continued following the application they started with based on the laws and regulations before Law No. 8 came into force.

Law No. 8 makes revision to several other laws with a view to incorporate, among other things, forest management planning, forest certification, forest auditing (building on Resolution No. 769 (2008) which mandated the environment authorities to execute random checks to verify compliance), direct and indirect incentives for natural and planted forests, the demarcation of the public forested lands and the participation of stakeholders.

Article 68 of Law 41 (1998), the General Law on the Environment (Ley General del Ambiente, 41/98) stated that the creation of private nature reserves (particularly those acting as part of a ‘buffer’ zone) will be encouraged through incentives and market mechanisms, although there are no details regarding these incentives. Article 70 of Law No. 8 confirms the Ministry’s plans to draw up concession services and management plans for protected areas, and aims to have procedures in place by March 2016 (12 months after the law was published).

In the event of illegal logging, i.e. without authorization of ANAM, a company or individual shall be punished in accordance with Articles 95 and 100 of the 1994 Forest Law No. 1 as follows:

  • Confiscation of wood, tools, machinery, equipment and materials used directly in the commission of the offense
  • Penalty up to fifty thousand dollars ($ 50,000.00 US).
  • Imprisonment of six (6) months to five (5) years, depending on the extent of damage caused.

Law 24/1992 - Created incentives for reforestation and Article 43 of Law 1/94 further states that all private forest land covered by forests, either natural or planted, is exempt from national taxes, provided that the landowner is registered in the Forest Registry (Registro Forestal) and a certificate of ownership has been issued. According to some commentators, although these incentives are primarily aimed at enterprises, associations, community organizations and cooperatives, only commercial enterprises have benefited from the incentives so far. Problems relate to tax evasion, the over-stating of costs, and a failure to maintain plantations over time.

The General Law on the Environment (Ley General de Ambiente, 41/98) establishes the basic principles and norms for the protection, conservation and restoration of the environment and promotes the sustainable use of natural resources. It governs the administration of the environment and integrated social and economic objectives, and recognizes the right of Indigenous communities to manage forests in the reservations, known as comarcas (Article 98). It has been updated since, in 2004 and 2010. The most significant change for forestry was in 2010 with the decision that projects, works and activities which will not cause significant impact to humans may use Environmental Practices guides (Guía de Buenas Prácticas Ambientales1) instead of an Environmental Impact Study (EIA). These types of projects previously completed a ‘Category one’ EIA, which demonstrated there was no significant impact to humans. Categories two and three suggest there would be significant impact and there would be significant impact and additional management plans required respectively.2 The guides are produced by the developer of a project and explain the prevention, mitigation, correction and/or compensation actions that the project will implement to promote protection of the environment and they must go through a public consultation process before being approved by ANAM (now the Ministry of Environment).3

Executive Decree No. 37 (2009) - Approves the principles and guidelines of Panama’s forest policy. It states that it is the duty of the State to incorporate the tools and mechanisms to strengthen the technical and administrative capacity necessary for forest management and promote forest protection. Likewise, among its strategic objectives, it promotes sustainable forestry management.

Executive Decree 43 of July 7, 2004 - search using date information for PDF link - regulates commercial procedures pertaining to CITES species. The National Environment Council is the highest administrative body in charge of promoting and approving environmental policy, plans and environmental programs. Through the Department of National Management Service Protected Areas and Wildlife, it must define the requirements, grant authorizations and monitor compliance with concessions and management services, in addition to research permits, export and collection related to wild flora and fauna. The administrator of the National Environmental Authority (ANAM) has the authority to impose fines up to the amount of 10,000.00 Panamanian Balboa (approximately $10,000 USD).

Law 5 of 2005 (search using date information for PDF link) - Crime against the Environment (Ley sobre Delito contra el Medio Ambiente) sets out penalties for environmental crimes, such as illegal logging.

Resolution No. AG.0051-2008 of January 22, 2008 - Regulates the management of endangered species of fauna and flora.

Executive Decree No. 83 of July 10, 2008 - Regulates the export of timber from natural forest or timber extracted from flooded valleys that are now reservoirs. This decree prohibits the export of timber logs, industrial round wood, or sawn wood, or planed timber of any species from natural forests. Wood from water reservoirs should be subjected to a drying process and a degree of transformation of at least four sides or faces, whose dimensions do not exceed 50 inches on its sides.

The Collective Lands Law (Ley 72 sobre Tierras Colectivas, 2008) - Establishes a procedure for the awarding of collective ownership of lands traditionally occupied by Indigenous people and communities that are not within the comarcas.

Resolution No. 244 (2011) Allows for wood from natural forests to be registered with one marquilla (label) in the presence of ANAM for legal mobilization within the country.


Processing/Manufacturing Laws

All exported timber or wood products are considered by the Ministry of Commerce and Industry as a "Special Process" and therefore require certain specific processing procedures.

A special process contains three distinctions4:

  • Wood from Natural Forests - prohibited to export round wood, logs, stumps or blocks. Wood should undergo a process of transformation in order for the product to become suitable for exportation from the country.
  • Wood from Plantations - does not require a process of transformation and can be exported in roll or block form.
  • CITES Species - if it is a species that is on the CITES list, it must have the approval of the National Directorate of Wildlife and Protected Areas of ANAM for exportation.

Resolution No. 204 - Measures regulating logging on to national levels (June, 2015) provisionally suspended the granting of special logging permits nationwide for a term not exceeding one year, and calls all key forest stakeholders to a dialogue to determine the processes to achieve a legal logging and forest governance.


Trade Laws

In Panama the exporter must prepare the following documents:5

1. Basic Business Documents: 

a) Sworn Commercial invoice

b) Packing List 

2. Transport documents

a) Transportation Permit

b) Waybill (terrestrial), Air Waybill (air), Bill of Lading (marine)

3. Specific Certificates

a) Phytosanitary certificate

- Certificate of Fumigation or

- Evidence of heat treatment (HT)

b). CITES Permit (for listed species)

c). Other (quality certificate)

4 Export Documents

a) Export Declaration (Customs Form)

b) Certificate of Origin

c) Animal Health Phyto License

d) Export Permit

Panama is a member of various international and regional trade related organizations such as: International Tropical Timber Organization (ITTO) and the World Trade Organization (WTO). Panama has also developed a set of bilateral trade agreements with some countries including Canada, the United States, China (Taiwan) and Singapore. Panama has signed several international conventions such as CITES (1977), International Tropical Timber Agreement (ITTA, 1994), Convention on Biological Diversity (CBD, 1995) and Convention for the Conservations of Biodiversity and Protection of Wildlife and Priority Protected Areas in Central America (1995).


Transport Laws

According to the Forestry Act - Law 1 of 1994, Articles 52, 53 and 54, the Ministry of Commerce and Industry and / or municipal authorities, together with the ANAM, will authorize the establishment of new forest product and byproduct processing plants. Industries or companies processing forest products and byproducts are required to submit annually requested statistics and information to the State. ANAM officials may verify this information. The owners of establishments may only purchase and receive forest products and sub-products that have extraction and transport guides authorized by ANAM. Otherwise if such goods are seized by ANAM they shall incur criminal liability.

Resolution No 02 – 98 of January 22 of 1998 (search using date information for PDF link) states that the transportation permit is a service provided by the ANAM to those natural or legal persons that move forest products either by land or by sea. This permit authorizes a certain amount of wood or wood products to be transported within the country to the point of its final destination for exports. The Transportation Permit is one of the tools used by the authorities to combat the trade in illegal timber, as it should cover all products being transported. The authorities at the checkpoints are allowed to retain any products being transported that are not identified in the permit. In addition, each load of timber or timber products being transported within the territory must specify the harvesting permit number. The Transport Permit must be processed in person in the ANAM regional office closest to where the wood was derived or transformed. The Permit procedure takes between 1-2 days to process and is valid for 2 days if it is land transport (5 days if waterborne transport). In the case of a CITES species, a special permit is required from the ANAM headquarters in Panama City.

One of the main problems identified with the transport permit process is that they are granted on a discretionary basis (without required inspections) and could authorize overestimated volumes and species not found in the permit's harvest area.6

In 2014, Panama's National Environmental Authority passed Resolution AG-0602, creating a special process for the issuing of harvesting and transport permits for Dalbergia rotusa and Dalbergia darienensis.7 Permits will no longer be issued by regional offices; a special committee will oversee the permitting process, and no new permits will be issued 30 days after the implementation of this resolution. Only plantations that are formally enrolled in ANAM will be issued new permits.


Tax Laws

The National Environmental Authority (ANAM) and the municipalities set the fees and taxes charged by the State for forest use. These taxes and fees were set in Resolution 01-98 (1998)8 as:

  • Fee for the verification of the forestry inventory: US$ 0.15 per hectare
  • Fee for technical service: US$ 10.00 to US$ 15.00 per cubic meter
  • Fee for transport permit: US$ 1.00 per cubic meter ($2.00 for renewal)
  • Fee for use of land: US$ 2.00 per hectare
  • Fee for annual verification of the Management Plan: US$ 300.00 per concession
  • Municipal Tax: US$ 2.50 to US$ 6.00 per tree (depends on species)
  • Export Tax: 1% of FOB

In 1992 the government created the Reforestation Law Incentives (Law No. 24) in order to encourage private sector investment in reforestation and promote the development of production and forestry reforestation exempting companies from paying taxes. Due to certain weaknesses in the implementation of this law, it was amended in 2005 (Reforestation Law Incentives (Law No.6 / 2005) and some of those tax incentives were eliminated. The main tax incentives under Law No. 6 are:

  • Total exemption from the payment of income tax on earnings derived from the commercialization of products extracted from forest plantations up to their final cut, which are established within a period of 13 years starting on the day Law No. 6 was enacted (February 2nd 2005), as long as the owners of these plantations are registered in the Forest Registry of the National Environmental Authority;
  • Total exemption from import duties, taxes, levies, or any other charges on the importation of machinery and agricultural equipment, spare parts, tools, agrochemicals, seeds and any other element necessary for the exclusive use of reforestation activities;
  • Total exemption from the payment of property tax and property transfer tax, as long as the real estates under reforestation use more than 75% of their land for this purpose or have a minimum of 200 hectares under reforestation.

Law No. 6 also states that if tax-fees due have not been paid, either for extraction or processing of wood, the company or individual shall receive a fine equal to twice the value of the unreported timber, or payment of omitted taxes.

Tax-Fee related regulations (in Spanish) (search using date information for PDF link)


Documents / Legal Texts
Decree No. 83, 2008 - Regulates the export of timber from natural forests or extracted from water reservoirs.pdf Resolution No. 466, 2003 - Application Formats special logging permits for subsistence or domestic nature..pdf Resolution No. 907, 2008 Delegates responsibility of the land titling review of forested state owned land to regional authorities.pdf Resolution No. 221, 2009 - National Plan for Forestry Development Sustainable Forestry Model.pdf Resolution No. 281, 2005 - measures for conservation and sustainable use of forest resources.pdf Resolution 244, 2011 - Registering the marking of timber from natural forests.pdf Resolution 5, 2013 - Forestry Law Regulations.pdf Resolution 613, 2009 - Guide for Management Plans and Annual Operative Plans.pdf Resolution AG 0354 2009 - Modifies Forestry Law Regulations.pdf Forestry Law - Law 1 of February 3, 1994.pdf
CITES Agreement Information

The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is an international agreement among governments whose purpose is to ensure that international trade in wild animal and plant species does not threaten the survival of these species. As of November 2015, a total of 181 countries have agreed to the CITES regulations, which is a legally binding agreement. It is up to each Party of CITES to draft its own domestic legislation in order to comply with its CITES obligations.9

Panama signed the CITES Convention in 1977.10 As of February 2016, there are seven CITES timber species listed in Panama, of which six are listed on Appendix II and one on Appendix III. There are no Appendix I species. Caryocar costaricense, an Appendix II species (commonly known as Ajillo or Plomillo) that struggles to regenerate, is found in Darien and San Blas. While the exploitation of the species is considered to be high, opinions differ on if the timber trade is threatening the species or whether it is due to the lack of habitat.

Dalbergia retusa (known as Nicaraguan Rosewood or cocobolo) is listed on Appendix II. Dalbergia darienensis was listed on Appendix III, however at the COP17 in October 2016, a decision was made to list all timber species under the genus Dalbergia in Appendix II.11

Swietenia humilis and Swietenia macrophylla are both ‘genuine’ Mahogany species that are listed on Appendix II. Mahogany is considered commercially important for its beauty and durability, and is often used as furniture.

Two species that are listed as Appendix II are Guaiacum officinale and Guaiacum sanctum which are sources of the timber Lignum Vitae which is also known as Guayacan or ‘Pockholz’ in Europe. The timber is required for its strength, toughness and density. Due to the rise in modern materials such as polymers that can replace Lignum Vitae timber, the demand for these species is declining.

At the COP15, two species were added to the CITES Appendix III, Cedrela odorata (by Brazil / Bolivia / Guatemala / Colombia / Peru) and Cedrela fissilis (by Brazil and Bolivia). As a result these species must be accompanied by a CITES certificate stating the original source of the timber.

The Global Forest & Trade Network (GFTN) project in Panama also mentions three other species that they consider high risk either because they are listed in CITES or in the IUCN red list: Peltogyne purpureaPrioria copaifera, and Vitex cooperi.12

Panama's National Environmental Authority passed Resolution AG-0602 in 2014, which created a specific process for the issuing of harvesting and transport permits for Dalbergia retusa and Dalbergia darienensis. Permits are no longer issued by regional offices; a special committee will oversee the permitting process, and no new permits were to be issued 30 days after the implementation of this resolution. Only plantations that are formally enrolled in ANAM will be issued new permits.13

CITES Links

A contact list of Panama CITES officials, including Management and Scientific Authorities can be found here.

____________________________

Central America Data (2010) [accessed 21st September 2016], http://www.centralamericadata.com/en/article/home/Panama_Less_requisites_for_low_impact_constructions

International Finance Corporation [World Bank funded] (2006),  http://www.centralamericadata.com/en/article/home/Panama_Less_requisites_for_low_impact_constructions

3 Lex Mundi (2015), www.lexmundi.com/Document.asp?DocID=8665

4 WWF (2014) http://awsassets.panda.org/downloads/guia_para_la_exportacion_y_comercio_responsable.pdf

WWF (2014) http://awsassets.panda.org/downloads/guia_para_la_exportacion_y_comercio_responsable.pdf

6 ITTO (2011), http://www.mofa.go.jp/mofaj/files/000023477.pdf

Go to page 9 of link for Resolution AG-0602-2014

When opening hyperlink, search using date information for PDF link to law text

CITES (2016), https://cites.org/

10 CITES (2016), https://cites.org/eng/cms/index.php/component/cp/country/PA

11 CITES (2016), https://cites.org/sites/default/files/eng/cop/17/CITES_CoP17_DECISIONS.pdf

12 WWF (2015), http://assets.worldwildlife.org/publications/677/files/original/March_2015_Country_Risk_Profile_NA_Booklet.pdf?1429535765

13 Ministerio De Ambiente website http://www.miambiente.gob.pa/

Laws & Regulations

This section provides a list of local contacts who can serve as sources of further information, including industry associations, civil society organizations and government ministries.