T HE Government is preparing for a massive about-face on the number of logging concessions

held and applications pending by foreign and local companies.

Sources say Phnom Penh was moved by the realization that much - if not all - of the

country's forestry reserves would be under threat by up to 30 timber companies.

The Government has commissioned a country-wide forest inventory from a UNDP, World

Bank and FAO team. The report is due by mid-January.

Till then, it is understood that the moratorium on unprocessed timber exports will

continue. In addition, most of the 30 logging concessions either approved by or currently

under consideration with the Government will be shelved. At least ten of those companies

had dealt with the former State of Cambodia government.

The Government's move is certain to be hailed by environmentalists who have warned

of potential catastrophic results from over-logging.

Agriculture Minister Tao Seng Hour named at least three companies that will be allowed

to retain their concessions: Samling Corp (Malaysia; 787,810 square hectares), Macro

Pannin (Indonesia; 1,432,930 square hectares) and Grand Atlantic (Malaysia; 365,500

square hectares). He also named a fourth company as likely to obtain a new approval:

Shinwa (Japan; 148,000 square hectares).

Others will likely be retained; for example, Cambodia's own joint venture concessions

with Japan's Okada company (Colexim) and Russia (Casotim) are long-standing deals.

Seng Hour, in confirming the cancellation of contracts and applications, said that

the final decision of what companies will remain is still under discussion.

When asked what had prompted the move, he said that the government had no more forests

to give.

Representatives from the UNDP and the FAO refused to comment.

They said that they had agreed, along with the World Bank, not to make any public

utterances till their inventory had been finished in mid-January.

It is unknown whether the World Bank or the UNDP brought any pressure to bear on

the Government to rein in what British environmental researchers Global Witness recently

called "rampant" logging approvals.

Earlier, Global Witness had made public a Forestry Department list of 30 companies

- 11 with approved concessions, and 19 of which were waiting for a Government decision

- whose combined area totalled just under 6.5 million hectares.

Together with about 3.5 million hectares of King's Reserves, the total of ten million

hectares equalled about that of Cambodia's entire forestry reserves.

"I could not have cited another instance in the world where such a vast proportion

of a country's forests, situated in areas with no effective government control, had

been sold in such a short time, and in such great secrecy, to foreign companies,"

Global Witness director Patrick Alley said.

Alley added that Cambodia's estimated forest cover of ten million hectares was certainly

overstated. He said a more realistic figure was around seven million hectares.

The Foresty Department's list of logging companies with applications pending reveals

that there was "no more forest" available to the last two applicant companies

- Hero and Elivud (both from Taiwan).

The latest Government moves appear to be precisely what Global Witness called for

before leaving the country: a reconsideration of logging concessions pending a detailed,

independent environmental analysis.

But loggers, already confused about a lack of a firm government logging policy, are

worried they may lose out financially.

Several firms on the department's list are reported to have spent significant amounts

of capital to set up sawmills and related infrastructure without having received

a final go-ahead from the Government.

According to one logging executive, the Mekong Company, which has applied for a concession

in Siem Reap, has already built a mill on the outskirts of Phnom Penh. Their concession

application is listed as "pending" at the Ministry of Agriculture and they

may be one of the firms cut from the list. Sources say that four other logging companies,

who may have their applications cancelled, have "invested a lot of money".

One Asian diplomat familiar with the situation said that "all loggers are frustrated.

The Russians and the Japanese are the only ones making any money. All the rest are

being taken for suckers."

The Post was told by one source that Samling had already invested $15 million on

"mobilization costs" but that it had yet to cut one tree. The source added

that whatever happens Samling "...was stuck. They are hoping against hope that

the law of the jungle won't prevail."

For those firms that have established operations the government is allowing them

to export certain types of processed timber, including wooden palettes, plywood,

railroad ties, furniture, door frames and moldings.

However, one industry executive said that there were regular disputes over what was

considered "finished or semi-finished wood products".

He cited Japanese importers desire for rough hewn planks used in home construction.

For the Japanese this type of wood product was considered a "finished good",

whereas on the Cambodian side it was still considered a raw product.

The logging issue is further complicated, according to one logger, by the fact that

over 100,000 Cambodians make their living by cutting and selling timber products.

Several concessionaires, such as Samling, have complained that their contract areas

do not contain the expected amount of forest cover as that originally believed to

exist when the awards were granted and that "illegal loggers" are regularly

taking out wood from their concessions.

How to deal with indigenous populations who have relied on the forest for a living

for decades has timber executives wrestling for answers, especially in remote areas

far removed from any central authorities.

Officials from the Forestry Department, the Ministry of Finance and the CDC said

that all logging approvals are made by the Council of Ministers.

Global Witness said however that in practise, approvals were made "at the total

whim of three people" - the two Prime Ministers and Tao Seng Hour. Global Witness

maintained that no reference was made to the National Assembly.

They also aired a video tape recording of the manager of the Khukan Aroonsawat company,

which owns a concession on the Thai side of the border near the Khmer Rouge-held

area of Anglong Veng. He said the split of $200 per cubic meter of wood went to:

the Khmer Rouge ($95); the Cambodian government ($30); $20 to each Prime Minister;

$30 to the Thai Ministers of Interior and Agriculture; and $5 to lower level Cambodian

military.