Powerful tycoon Kith Meng’s concession to log the reservoir of the controversial Lower Sesan II dam has been temporarily suspended until the area can be properly demarcated.

A commission of inquiry will also be set up to investigate the operations of Ang & Associates Lawyer Ltd – a subsidiary of Meng’s Royal group – which has repeatedly been accused of logging outside of the agreed upon concession area.

Stung Treng Provincial Governor Kol Sam Ol, who attended a meeting yesterday morning with Ty Sokun, a secretary of state for Ministry of Agriculture, and Forestry Administration chief Chheng Kimsun, said the order came into effect on October 16.

“The order is to stop the collection of all types of woods within the reservoir,” Sam Ol said. “So the meeting this morning was to implement the notification from the Council of Ministers.”

The order – which senior officials at the Forestry Administration not permitted to speak to the media confirmed was signed on October 16 – will remain in effect until the company has demarcated the concession area and the government has set up a commission to review the ongoing work at the site, Sam Ol added.

Meach Mean, coordinator for the 3S Rivers Protection Network, a local advocacy group, said he had recently visited the site and had not noticed logging within the reservoir concession.

“I did not notice that there was logging going on in the reservoir concession area. But there was illegal logging in the surrounding areas and in nearby economic land concessions,” he said.

A Cambodian-Australian citizen, Meng has a business empire that stretches from telecoms to casinos, banking to schools and fast food restaurants. He is chairman and CEO of The Royal Group and was described in a US government cable in 2007 as a “young and ruthless gangster”. He also sits on the board of directors of the Cambodia Chamber of Commerce.

Seak Mekong, chief of Srekor commune in Stung Treng province’s Sesan district, said news of the ban had been well received by local people, who rely heavily on the forest for their livelihoods.

“We were very happy when we heard the Ministry of Agriculture, Forestry and Fisheies will stop the transportation of logs and the exploitation at the lower Sesan II hydropower dam site, because clearing the forest to make a reservoir in this area will not provide benefits to the people,” he said.

Hydrolancang International Energy, a subsidiary of the state-owned China Huaneng Group, signed a memorandum of understanding with the Royal Group on November 26, 2012, for an initial two-year cash injection into the dam project.

Earlier this year, Ang & Associates reportedly inked a joint-venture agreement with local businessman Sok Vanna, the brother of Sokimex founder Sok Kong, to clear the 36,000-hectare site in preparation for the $816 million project.

Environmentalists have warned it will be the most destructive of dozens of dams planned on Mekong tributaries.

Kith Meng’s assistant said he was too busy to answer questions yesterday.

Mean said the companies had routinely used their licences as a cover to fell trees outside their concession area.

“The community still does not know what the compensation and concession area will be. They [the companies] have always used the licences to carry out illegal logging in and around the site,” he said, adding that representatives of Hydrolancang were expected to visit the site in the coming weeks.

Logging began at the site in April in preparation for the construction of the 400 MW hydropower dam, with local authorities and environmentalists alleging clearing of the forest has gone unchecked outside the official concession area.

Pha Tey, 30, a villager in Srekor village, said that since the company had begun to clear the site, soldiers hired to guard the area had harassed and intimidated locals and confiscated their logs, which they cut to make houses, furniture and boats.

“We cut the trees in our forest community to make houses or to make boats and furniture to get money to support our daily lives. The company security arrested us and confiscated our logs and forced us to pay from $100 to $500 to bring our logs back,” he said.

Culture and Environment Preservation Association executive director Tep Bunnarith, who visited the Stung Treng dam site, said mapping the area is a top priority.

“The area covers 36,000 hectares, but it’s not mapped clearly,” he said. “The people feel angry that they don’t have freedom to use the forest resources to maintain their livelihoods. They mainly depend on the forest to survive.”