VEERAPPAN, the legendary sandalwood smuggler, may be nabbed shortly, but putting an end to rampant sandalwood smuggling in Karnataka and Tamil Nadu may prove considerably more difficult. The ban on sandalwood export, in conjunction with anti-people conservation measures, have seen more and more people turn to sandalwood smuggling, with the result that Veerappan is now only part of a larger social disease.

Veerappan's activities over the years have attracted stringent policing. On the flip side, authorities have also come up with economic censures such as a total ban on sandalwood exports. But the ban, imposed about a year ago by the ministry of environment and forests (MEF), has had negligible results, apart from making sandalwood prices crash and causing revenue losses running into crores of rupees for Karnataka and Tamil Nadu -- the two principal sandalwood producing states in the country. Recently, under pressure from the two states to lift the ban, MEF recommended that, "after local needs are met, export may be permitted, only through government corporations, to curb smuggling."

Ineffective bans
There's nothing new in government efforts to curb smuggling through trade measures. A similar ban was imposed on ivory trade to check elephant poaching in which, too, Veerappan was a major player. But says S N S Murthy, director general of police, Karnataka, "With the discovery of poached elephant heads from various hideouts of Veerappan, we do not believe Veerappan ever stopped poaching elephants."

Quite a few people argue it is the country's conservation strategy for sandalwood that has created men such as Veerappan. "They (the authorities) must realise that bans are forcing crime to other areas and products and in the long run, over-regulation does not help," says Madhav Gadgil, an ecologist at the Indian Institute of Science in Bangalore.

Some forest officials contend Veerappan is distracting public attention from more serious and organised smuggling of sandalwood. Also, the subtle transition from a single, all-powerful anti-hero to a collective enterprise, involving entire villages, has gone almost unnoticed. In the sandalwood-rich Western Ghats in the two states, the names of villages such as Vachati (See box) now evoke greater terror for the authorities than Veerappan.

Foresters also realise that something is amiss. Says S Parameswarappa, principal chief conservator of forests in Karnataka, "Veerappan will be nabbed shortly, but more Veerappans will certainly emerge. What worries me is the involvement of a large number of villagers who have strong links with the underworld." So what is the solution? "Deregulate the sandal-tree and its trade. People will then take care of it," he suggests.

Smuggling not only cuts into the legitimate profits of the sandalwood and state revenue, it also threatens a valuable natural resource and threatens the communities living around the forests.

The state governments are in a quandary, finding it impossible to check sandalwood smuggling despite the ban and a host of restrictive measures such as state ownership of the tree on both forest and private lands, state monopoly over its disposal and use. One tonne of sandalwood can fetch more than Rs 2 lakh today, "a carrot for any wood-cutter in the forests", says P Pandey, Bangalore conservator of forests.

Today, villagers in Karnataka and Tamil Nadu stand totally alienated from the sandal-tree and either participate in its open loot or shun it to the extent that they uproot sandalwood saplings from their private land, fearing encroachment by smugglers or dictates from the forest department. Ironically, in sandal-rich Kollegal forest division where Veerappan rules the roost, only 80 residents have declared their sandal-trees. Small wonder then that despite its religious uses, the tree now evokes reactions such as this one from a Soliga tribal in a village near Rampura in Kollegal: "Worship the sandal-tree? Impossible. It is a government tree."

Conservative official estimates of the Karnataka forest department show a dramatic rise in the number of sandalwood offences from 302 in 1982-83 to 2,338 in 1990-91. In Tamil Nadu, the number has gone up from 677 in 1988-89 to 2,107 in 1991-92. Officials admit most cases come to light as a result of tip-offs from disgruntled gang members. Otherwise, it is very difficult to detect the crime though every year, officials confiscate sandalwood worth crores. According to A K Varma, conservator of forests, vigilance, "Almost half of the sandalwood in our sandal depots has been intercepted from smugglers."

Huge reserves
Karnataka and Tamil Nadu together account for about 90 per cent of India's sandal stock. The sandal forests -- about 50,000 ha in Karnataka and 30,4000 ha in Tamil Nadu -- are located mainly along the Western Ghats. Average annual sandalwood production is 700 tonnes in Karnataka and 807.50 tonnes in Tamil Nadu and the total accumulated stock in the two states is 6,000 tonnes. Until the ban on export of sandalwood billets and chips came into force, the entire sandalwood business revolved around exports.

Karnataka alone has a stockpile of 4,000 tonnes -- total legitimate demand within the state amounts to only 1,525 tonnes per annum. Out of this, the registered carvers require 125 tonnes and the two sandalwood oil factories, if working at full capacity, require 700 tonnes each. While the carvers are not getting the full amount owing to shortage of good quality wood, the sandal oil factories fail to reach full capacity for technological and managerial reasons and also because their main consumer of oil in the state -- the Karnataka Soap and Detergent Ltd (KSDL) -- is in the red.

Apart from the two state-owned sandal oil units in Karnataka and officially registered sandalwood carvers in both the states, the major buyers of sandalwood are the numerous private sandal oil units, mostly illegal, in north Kerala, Hyderabad, Kanauj and around Lucknow.

The only legal source of sandalwood in the south is the public auction held in Tamil Nadu and Karnataka. Auctions started only two years ago in Karnataka, and mainly to get rid of the stocks piling up in its depots. "Otherwise supply, even end-uses such as carving and distilling, are controlled by the state. This has been so from the times of the maharajas," says Bangalore conservator Pandey.

The export market, which grew by leaps and bounds in the mid-1980s, used to take care of more than 80 per cent of the sandalwood that is auctioned today. The price of sandalwood auctioned in Tamil Nadu has risen from Rs 40,000 per tonne in 1978, to Rs 64,000 in 1985 and Rs 2.27 lakh in 1991. With the export ban coming into effect, however, prices have crashed to Rs 1.9 lakh per tonne and Tamil Nadu has lost Rs 40 crore in revenue because exporters are no longer lifting sandalwood from the depots.

Trader's wisdom
A Tamil Nadu forest official says the auction prices would have crashed further if traders hadn't perceived the wisdom in buying some quantity of sandalwood from auctions, which also obtained for them a certificate of origin verifying the legality of the wood and enabled them to pass off illegal wood alongside. Otherwise, as a rule, not many sandal oil distillers come to the auction for the stranglehold of the exporters usually push up prices much beyond what they can afford. The bidders list in the Karnataka auction of February 1992 shows that out of 12 successful bidders, only three were oil distillers -- from Kanpur, Hyderabad and Kerala -- and their bids accounted for about 10 per cent of the total auctioned wood. Most of the sandalwood used by distillers and illegal exports comes from smugglers.

There are two major routes by which smuggled sandalwood is normally taken. One goes to sandal oil distillery units in Kerala and the other to Uttar Pradesh, which also has sandal oil units, and to Delhi, from where it is smuggled out to other parts of the subcontinent. The smuggled wood is sometimes taken to Bombay and Madras as well.

Within Karnataka and Tamil Nadu, zigzag routes have emerged, linking the sandal-bearing zones with the national highways. According to Rajiv Shrivastava, divisional forest officer in Coimbatore, "The major crossover route to Palakkad in Kerala lies in this division. Smugglers have discovered at least three combinations of routes. So, if there is a thorough search at any checkpost, the entire trade gets diverted with remarkable flexibility."

Tamil Nadu principal chief conservator of forests (PCCF) M Harikrishna blames the export ban on sandalwood for "increased international smuggling". Sandalwood is being smuggled even in log form to southeast Asia and the Middle-East and to perfumeries in Europe. The enormity of the problem came to light a few months ago when 80 tonnes of sandalwood were seized from a container by custom officials in Madras. Says Harikrishna, "It is possible that quite a large quantity of sandalwood is being smuggled out of the country because of the ban."

The demand for sandalwood has created dangerous backward linkages down to the grassroots level, encouraging crime and smuggling in forest products in the villages near the sandalwood forests. It has also resulted in the distortion of the relationship between forest-dwellers and forests. Veerappan and men like Veerappan epitomise this distortion.

Curiously enough, the nature and scale of smuggling operations vary across the sandal-rich districts of Mysore, Shimoga and Chikmagalur in Karnataka and Salem and Dharmapuri in Tamil Nadu. The spectrum moves from an all-powerful, anti-hero such as Veerappan to group smuggling by villagers as in Vachati in Salem, with a large number of peddlers in villages and towns linked with the wider market through a chain of middlemen.

The system works in a top-down fashion. According to the vigilance record, the smugglers have nodal agents in Bangalore, Mysore, Madras and a few other towns in the two states. The bigger kingpins have agents at all levels. The vigilance record of Karnataka, for instance, notes two major gangs, the "Khuddus gang and Shameer gang operating from Bangalore, establishing contact through telephone with their agents in different places for organising transportation of the wood."

Says K S Suresh Babu, Mysore superintendent of police, "Involving the local villagers in the operations is very crucial to the whole scheme of things. Only the locals have a thorough knowledge of the forests and distribution of sandalwood."

Sandalwood smuggling has become a way of life in some villages. Take, for instance, Dharmapuri district in Tamil Nadu, where about 73 tonnes of sandalwood were seized and more than 400 people prosecuted between 1985 and 1987. The gravity of the problem came to light in June last year when within a space of three days, 63 tonnes of sandalwood worth Rs 1.25 crore were seized and more than 100 people arrested, from just two tribal villages -- Vachati and Salur divisions of Tamil Nadu. (See box).

Residents of Channali village in Shimoga division report that armed outsiders from Shimoga town and nearby villages, camp in their forests to collect sandalwood. Says Manjari Koppa of Channali, "They are usually well-armed and when we enter the forest they scare us away." The villagers admit that some of their own people are also involved in these operations.

Illegal income is better
And, reveals a Channali resident, "Income goes up to Rs 500 per day if sandalwood collection can be carried out unhindered." Coorg MLA A K Subbiah endorses this: "The illegal income definitely compares very well with the measly bonus a private owner will get from the forest department."

The state machinery is gearing up with stronger legislation and armed policing to combat smuggling. For instance, the Karnataka Forest Act was amended in 1976 to empower forest officials to confiscate vehicles used for smuggling. Sandalwood smuggling has been made a non-bailable and cognisable offence. Forest mobile squads are being provided with wireless sets and arms. In 1991, forest officials were empowered to shoot in reserve forests. It has also been suggested that sandalwood smuggling be brought under the Terrorist And Disruptive Activities (Prevention) Act.

However, on top on the agenda for curbing smuggling is the removal of legal loopholes that exist due to the absence of uniform laws across the country. In both Karnataka and Tamil Nadu, storage, sale, transportation and processing of sandalwood requires a licence, but there is no such restriction in the other states. Therefore, once the wood crosses the borders of the two states, it becomes impossible to check smuggling. Says Harikrishna, "Proliferation of sandal oil units across our borders is like a slap in the face." Both state governments have urged the MEF to amend its Forest Act and bring about uniform laws on sandalwood transportation and distillation.

Impending battle
If the battle against the ban is won, a fight will commence over export rights. MEF and the state governments want to canalise the exports in order to weed out smugglers. But K N Jayprakash of the All India Sandalwood Exporters Association says, "The government cannot do business and it should keep out of it. The dismal performance of KSDL and its sandal oil factories, despite being pampered with subsidised sandalwood, is good enough indication. Beaten, they now want to privatise KSDL. If the ban is removed, I am ready to bid at more than Rs 3 lakh per tonne."

A Hamid, a smuggler, revealed, "Clandestine supply of products has gone up manifold after the ban was imposed. State monopoly will push the trade further underground." Forest officials say because of under-invoicing (showing a lower price than the actual selling price) by private exporters who want to stack away their money in foreign banks, the government of India is losing precious foreign exchange.

While the exporters and the state governments denounce the ban, sandal oil distillers have welcomed it because it keeps prices depressed and within their reach. According to Jayprakash, "Auction prices crashed immediately after the ban from more than Rs 2 lakh per tonne to less than Rs 1.9 lakh. It suits the distillers as oil prices are lower than the export prices of the wood." According to him, distillers from Kanauj have been pressing the MEF for a ban on exports for the last 10 years.

But the state governments and the exporters are trying to impress upon MEF the fact that the country will earn more if sandalwood is allowed to be exported in billets and in chip form, rather than as oil.

Ironically, in this mad rush for revenue and profits, the only legitimate consumers with an export licence -- the sandalwood carvers -- are starved of raw material and face virtual extinction

Half-hearted measure
"The export ban, as an instrument of conservation, is a halfhearted measure by the government of India," says Viswanath, a handicraft trader in Bangalore. "Earlier the government allowed export of only handicrafts and its waste in the form of chips and powder to check smuggling and conserve the sandal-tree. Later, this, too, was banned. But the Karnataka State Handicraft Board, which controls supply of raw material to the carvers, has never been able to supply more than 30 to 35 tonnes against the total demand of 125 tonnes a year. Yet all exporters send out at least 500 tonnes of chips at a time. It surely cannot be just waste material from handicrafts."

Some people feel the debate can be resolved if policy-makers reach a consensus on the ecological status of the sandal-tree and the usefulness of the ban as an instrument of conservation (See box).