In Wasior, Papua New Guinea, flash floods have killed well over 100 people. Conservation groups blame illegal logging activities in the Wasior area for exacerbating the flooding, and the Indonesian government is investigating this possibility.
While this case is still uncertain, it is clear that deforestation leads to increased flood risk. CJA Bradshaw and colleagues published an article in Global Change Biology showing that at 10% increase in deforestation leads to a 4%-28% increase in flood frequencies in developing countries. (See his own blog for more details on the science.)
My question is: How far does liability for the flood damage extend? If logging can be shown to bear the blame for this or other disasters, can those who benefit from the logging be sued? They have, in essence, stolen locals' ecosystem services.
This isn't a theoretical question. The legal infrastructure tying manufacturers of wood products to forest damages is being assembled. In the U.S., 2008 amendments to the Lacey Act banned commerce in illegally harvested the U.S. Last year, Gibson Guitar's Nashville factory was raided by federal agents for using wood from illegal sources. (WRI has a write-up for supply chain managers the Lacey Act.)
With law enforcement pursuing cases like this, evidence will be assembled tying manufacturers all the way back to forests. When science links forests to ecosystem services such as carbon storage and flood control, and markets put explicit values on these ecosystem functions, companies may find themselves responsible for a whole new set of damages.