Alex Lacerda and Paulo Maués drive a silver pickup to an outdoor sawmill near the edge of the Amazon rainforest. Carrying 12-gauge shotguns, they step out and approach a shack, knock and enter cautiously. They are agents for Brazil's environmental police.
A stocky man identifies himself as João Pereira, owner. The agents ask him for two documents: an operating license for the sawmill and a certificate of origin for the lumber stacked outside. "I have the license," Pereira says. "My accountant has the other."
Wrong answer. The logs outside lack identification tags required on legally cut wood. And Pereira, like all sawmill owners, is required by law to keep permits on site.
"He's stalling," says Lacerda. "There's no reason not to have the paperwork - you're either operating legally or not."
Pereira's sawmill is one of hundreds like it on the contracting fringe of the world's largest rainforest. Unlicensed mills are part of a gray economy that has come to define development in the Amazon. The activity spans everything from precious hardwoods to illegally extracted minerals to the bare land left behind, itself a commodity for ranchers and squatters who speculate on its future value.