LOGS ROLLING THROUGH LAOS

Three routes will be used to haul 120,000 cubic meters of

logs from Stung Treng province to Thailand, most of it on

a new road indirectly funded by th ADB.

POONSAAT, Laos - Reports of plans to ship up to 120,000 cubic meters of Cambodian

logs - worth as much as $54 million -through Laos to Thailand have been confirmed

by local timber company officials.

A forester with Development Agriculture Forestry Industry (DAFI), a state-owned monopoly

controlling the timber trade in southern Laos, confirmed his company's plans to ship

the logs within the next 12 months.

And the loggers are building a new all-weather road linking Stung Treng's northern

forests with Route 13 in Southern Laos to provide an unimpeded route for the logs

- with an unofficial border crossing that has no customs inspectors to slow the delivery.

"As far as we are concerned, everything is legal from our point of view,"

the DAFI forester said, on the condition of anonymity. "We have approval from

the highest levels of the Cambodian government to bring the wood out," he claimed.

In December 1996, the Cambodian government approved a complete ban on round-wood

exports. Until now, Laos had been Cambodia's only neighbor to respect its legislation.

Details of the deal released by London-based Global Witness in mid-June were met

with denials by Cambodian officials. Agriculture Minister Tao Seng Huor claimed he

was unaware of the deal and First Prime Minister Ung Huot asked him to investigate

the charges.

Global Witness accused Taiwanese-Cambodian timber company Pheapimex-Fuchan of being

the main player on the Cambodian side of the operation. Company officials were unavailable

for comment.

"I have asked the Forestry Department and they say that they have not given

their authorization," Seng Huor said. "I also called Pheapimex and asked

them why they were exporting 100,000 cubic meters to Laos. They acted surprised also

and said that they didn't authorize the deal."

A Thai firm, Pipat Forestry, appeared to be the first company to take an interest

in buying the logs. In May it approached the Laotian government, through an intermediary,

for permission to build two fuel depots in Laos for its trucks. The request, for

up to 4,000 liters of fuel per month, would allow the company to run 20 trucks, each

carrying 20 tonnes of logs for 1,500km.

What attracted such interest was not so much the volume, but the value of the timber.

According to a forestry official in Stung Treng, the crescent-shaped swathe under

the saw in northern Siempang district contains some of the most valuable trees in

the country.

The DAFI forester said his company would buy the logs from Cambodia at up to $280

per cubic meter, a potential total of $33.6 million, and sell them to its Thai buyers

for $450 per cubic meter, a total of as much as $54 million if the full 120,000 cubic

meters are harvested.

However, Global Witness said Cambodia was willing to sell the logs for as little

as $50 per cubic meter, a total of $6 million.

Like many of his unarmed counterparts, the Stung Treng forestry official complained

that Military Region 1 rules the area by fiat.

"If I go there, the soldiers will kill me," he said. "They do not

respect the rule of law."

Civilian control of the district lapsed when Stung Treng governor Li Seng, a Funcinpec

member who sources say was no stranger to the logging business, fled last July.

A DAFI official recalled how relations broke down between his bosses and the governor

in 1995, leaving thousands of cubic meters of logs languishing on the Cambodian side

of the border.

Late last year, an agreement was reached and 15 trucks were exchanged for 8,500 cubic

meters of "old logs". However, most of the stockpile had been caught up

in brush fires and was worthless. Instead, fresh logs were cut to fulfill the agreement,

the DAFI official admitted.

It is not clear what role the Laotian central government plays and there has been

no official response from Vientiane. Theoretically, every log leaving the country

has to be approved and provinces are issued annual quotas.

Re-exports, however, may now fall under a different category according to a Western

diplomat in Vientiane. "It has always been a gray area," he said. "But

it is even more obscure now since the government decided to omit wood re-exports

from official statistics last year."

Logistical preparations are nearly complete as repaving of Route 13 is under way.

And a Yunnanese construction company contracted by the Asian Development Bank (ADB)

to improve 14km of Route 13 has taken on a side job of building the new 10km logging

road running between Route 13 at the town of Poonsaat and the unofficial border crossing

at Stung Treng.