THE Ministry of Agriculture, Forestry and Fisheries (MAFF) has recommended that Prime

Minister Hun Sen approve the transfer of the Government's share of the logging concessionaire

Colexim to GAT - a company that the Government now has in court for illegal logging

in the Cardamom Mountains.

Just last month the environmental monitoring organization Global Witness (GW) called

on the Cambodian Government to cancel GAT's concessions in the Cardamoms because

of repeated breaches of contract, illegal cutting, and blatant disregard of directives

issued by the Department of Forestry and Wildlife's (DFW) Director General, Ty Sokhun.

The Post obtained a copy of a letter dated September 6, 2000 to the Minister of Agriculture,

Forestry, and Fisheries, Chhea Song, in which the Chairman of GAT, Robert Ngu Tung

Sieng, asked to "take over" the Government's share in Colexim - a joint

venture between the Government of Cambodia, represented by the DFW, and a Japanese

company, OKADA.

GAT's Chairman wrote: "GAT International Ltd has been consistently facing with

raw material supply problem to our factory in Kampong Thom. We, therefore, would

like to request Your Excellency's approval to let our company to take over the 60

per cent shares in Colexim Enterprise held by Department of Forestry and Wildlife

(DFW). The takeover will also increase Government's annual royalty collection."

GAT has a concession adjoining Colexim's. The letter did not mention the price GAT

was offering for the purchase of the Government's share in Colexim.

On September 14 MAFF's Minister, Chhea Song, wrote a letter to Prime Minister Hun

Sen recommending the sale of DFW's share in Colexim to GAT.

"The enterprise owns a total capital of US$5,500,000 of which the State of Cambodia

possesses a 60 per cent share in the form of fixed assets such as already installed

machinery, worth US$3,000,000," Song wrote.

GAT says its processing plant in Kampong Thom is already underutilized, which raises

the question whether GAT desires the processing machinery that would come from this

transfer, or the standing timber in the Colexim concession.

Song wrote that during operations from 1992 till 1999 Colexim had harvested 322,630

cubic meters of logs, but managed to lose $2,000,000 in the process.

"Colexim has faced subsequent annual losses and its production machinery has

depreciated due to their old age and use, but its concession forest situation has

remained better than other concessionaires because of clear management and because

of the location of the concession area," Song wrote.

In his letter to the Prime Minister, Chhea Song also made no mention of the price

GAT was willing to pay the Government for its share in Colexim.

Song told the Post he had no comments on this matter and directed questions to the

DFW's Director, Ty Sokhun.

Sokhun said said he was too busy to talk to the Post.

According to the Asian Development Bank's Forest Concession Review report, Colexim

has failed to substantiate its claims to having made capital investments of $5,500,000

for processing plants and infrastructure.

The report says Colexim has not paid $40,000 royalties for all salable timber felled

in 1996 and 1997, and the company's harvesting practices are not sustainable.

"Based on the current system of annual coupes it is estimated that only 10 to

15 years cutting remain, half the 25 years required for Sustained Yield Management."

Colexim has used environmentally damaging harvesting techniques and has allegedly

engaged in illegal logging activity in the Boeung Per Wildlife Sanctuary, says the

ADB report.

Global Witness says if the Colexim concession is not commercially viable, as the

letter from Chhea Song suggests, then it should be canceled, not reallocated.

There are also questions why the Donor Forestry Subgroup members were not informed

about the possible transfer of the Government's Colexim share to GAT.

"If genuine, the document shows that the Minister recommended the transfer of

Colexim's concession to GAT on the same day as the recent Donor Subgroup meeting

on Forestry," says Global Witness.

"This is despite the fact that GAT is currently the subject of a court action,

brought by the Department of Forestry, for logging illegally in the Cardamoms.

"The Colexim concession is at the core of the largest, intact, dry evergreen

forest in Southeast Asia. This is the last place companies like GAT should be let

loose."