This is one of 16 locations (three sawmills and 13 cutting sites) over a 16 square kilometer area inside the Pheapimex-Fuchan concession in Kampong Thom, where commercial and luxury grade trees have been illegally logged and sawn by military personnel in defiance of the 2002 logging ban. The operators try to conceal what they are doing by setting up military checkpoints on key access tracks, blocking roads with logs, burning stumps of felled trees, and concealing logs under dense forest cover. The report and photographic evidence were submitted to the Cambodian Forest Administration on June 3.
he publication last month of the first quarterly report by the new official independent
monitor of Cambodia's forest sector, SGS (Société Générale
de Surveillance SA), offers the first insight into the Swiss company's activities
since it commenced operations last December.
Given that this is SGS's first report, it is perhaps premature to reach a final conclusion
on the effectiveness of the new independent monitoring framework and its implementation.
Nevertheless, the report exposes serious shortcomings which the Government, donors
and SGS themselves should urgently address.
The impression that the SGS report leaves is of a flawed and restrictive independent
monitoring mandate that is being very narrowly interpreted. This unfortunate combination
manifests itself in a range of significant omissions and errors of interpretation.
These are exemplified by SGS's conclusion that forest crime is perpetrated only by
poor people - a suggestion that would be no more than comic were it not for the damage
it stands to cause if taken seriously. Thankfully, it appears to have cut little
ice with Prime Minister Hun Sen, who clearly identified the role of high-ranking
officials in commissioning forest crimes in his speech at the Forest Administration
(FA) on May 31.
Independent forest-crime monitoring was first introduced to Cambodia in 1999, following
mounting international concern at illegal loggers decimating the country's forests.
The system was designed to provide international donors, the Cambodian Government
and the general public with an independent assessment of the incidence of forest
crime and the measures that Government agencies were taking to combat it. As such,
independent monitoring represented an innovative attempt to strengthen governance
in a sector plagued by corruption and the absence of accountability. As an institutional
framework, it is still unique within Cambodia and should play a key role in efforts
to combat forest crime and establish the rule of law.
Following the Government's announcement in January 2003 that it would no longer work
with Global Witness, an NGO which had been appointed as the official Independent
Monitor in 1999, the Government and the World Bank sought both a new monitor and
a new working framework within which it would operate. The particular interest of
the World Bank stemmed from conditions it had attached to its $15 million Structural
Adjustment Credit to Cambodia, one of which was a requirement for an independent
monitor of the forest sector.
In April 2003, the Forest Administration released terms of reference (ToR) for a
new Independent Monitor. These removed those established features of the role designed
to safeguard the independence of the executing agency, notably the right to release
uncensored findings publicly. The FA also excised aspects of the mandate which enabled
effective monitoring to take place, guaranteed access to official records, and the
right to undertake unannounced field visits. The World Bank loan Task Manager, Bill
Magrath, who had helped the FA make the changes, told me over the phone: "I
was shocked at how good they [the new ToR] were." He was praising revisions
to the ToR which robbed the independent monitoring role of any meaning.
Of ten organisations invited to bid, only one - SGS - submitted a completed application.
SGS's involvement in forest sector projects around the world usually entails inventorying
legal round-log exports for government agencies, in cooperation with logging companies
- a rather different undertaking from tracking efforts to fight forest crime. The
company's interest in playing such a role in Cambodia in fact represented something
of an about-face. As early as 1997, pressure from the IMF had prompted the Cambodian
Government to seek an independent agency to monitor illegal logging and the effectiveness
of its log export ban. Despite advanced negotiations with the Government, SGS ultimately
withdrew its bid, citing security concerns. "The company was not confident it
could do the job," said Richard Hines, then Chief Executive of SGS in Cambodia
(Phnom Penh Post, January 24, 1997}.
Subsequent to what the World Bank termed "international competitive bidding",
the uncontested appointment of SGS was confirmed in December 2003. This followed
several months of negotiations between the company and the Government, as well as
amendments to the proposed terms of reference, which had met with public derision
on their publication the previous April. Under the terms of the deal, SGS was hired
by the Forest Administration at a cost of $425,000 per year, with the funds drawn
from a $5 million World Bank loan to Cambodia.
The World Bank used the appointment of SGS as justification for its release of the
final $15 million tranche of its Structural Adjustment Credit loan in December 2003.
Several of the forest-sector-related conditions attached to this loan had not been
met, however the WB found it expedient to claim, falsely, that the appointment of
SGS was the only condition left outstanding. The WB also asserted that the international
donor Working Group on Natural Resource Management (WGNRM) had approved the revised
terms of reference. Members of the WGNRM denied having even seen these, much less
given their endorsement.
While the revised terms of reference that SGS were eventually issued in December
2003 are an improvement on those published the previous April, they nonetheless constitute
a far more restrictive mandate than that exercised by Global Witness between 1999
and 2003. The terms of reference which Global Witness worked to stated that "Independent
monitoring should be organised so as not to be under the direction, control or influence
of any Ministry that will be audited or reviewed." Funding for monitoring activities
was therefore provided directly by international donors, with no involvement from,
or contribution by, Government agencies. By contrast, SGS is hired and paid by the
Forest Administration, whose performance they are charged with scrutinising. Corruption
within the FA runs deep and senior FA officials enjoy close links with prominent
players in Cambodia's logging mafia. It is extremely naïve to think that SGS
would not come under pressure from their employers to turn a blind eye to these underlying
causes of forest crime.
Provisions of the new ToR regarding information disclosure further compromise the
independence of SGS. It is largely denied the right to disclose information without
interference or constraint - the company may release reports, but only on a quarterly
basis, and then only after the Government has had six weeks to review their initial
draft. This means that the results of an investigation by SGS at the start of a calendar
quarter will not see the light of day for as long as four-and-a-half months. The
nature of forest crime is such that after four-and-a-half months there can be little
scope for verification of SGS's findings by members of the public or third party
As for monitoring in the field, the scope for SGS to fulfil the independent monitoring
role is also severely constrained. Field visits must be "facilitated" by
the Cambodian Government (ie the Forest Administration). This gives the FA effective
control of SGS's field monitoring operations. Given that a high proportion of forest
crimes in Cambodia are carried out with the collusion of FA staff, field inspections
following these ToR are likely to consist more of theater than actual monitoring.
SGS's contract also precludes it from "random checking of reported illegal actions
that have not already been passed on to the relevant agency". Without unaccompanied
field visits, it is all but impossible for SGS to establish the baseline understanding
of the situation on the ground essential to an informed appraisal of Government agencies'
performance. Furthermore, the ToR's token allocation of field visits (a set series
of visits once a quarter) and aerial surveys (four flights a year), is derisory and
appears to offer no scope for SGS to respond quickly to new developments.
SGS's first report, covering the period from December 2003 to the end of March this
year, does little to dispel fears that the new monitor would be hamstrung by the
limitations of its mandate. Time spent verifying Government agencies' performance
outside Phnom Penh, for example, appears to have been confined to one aerial survey
and one on-the-ground inspection. Moreover, SGS has adopted an exceedingly narrow
interpretation of its role. The Independent Monitor reports on only five cases of
reported forest crime that it has examined between December and March, and in each
of these SGS appears content merely to cross-check selected data reported by the
FA. The company betrays scant interest in establishing the nature of the crime or
the identity of the perpetrator. It is therefore poorly placed to offer insight into
the way the authorities responded.
The lack of information or analysis does not prevent SGS from drawing a series of
favourable, but unsupported, conclusions about the presumed actions of its employers,
the Forest Administration. Upon inspecting a site in Battambang "for approximately
five minutes", one month after a reported case of illegal logging, SGS was unable
to see any ongoing illegal activity. The company therefore concludes that "in
this specific area illegal logging had been suppressed as reported by the FA".
There is no serious attempt to verify the FA's claim of suppression. Nor is there
any consideration of alternative and more mundane explanations, such as the possibility
that the loggers might simply have completed their operation and moved on.
SGS draws a similar conclusion in the case of a sawmill on Route 5, on the outskirts
of Phnom Penh, where illegal activities were reported in December 2003. On the basis
of a visit to the site in February, during which "there was no sign of ongoing
saw-milling activity", SGS determines that "any illegal sawmilling had
been suppressed". Once again, no evidence is produced to support this assumption,
which is undermined two pages further into the report, where the FA is cited as saying,
that they "had no record of any operation being carried out to suppress the
(Route 5) illegal sawmill activities". A more obvious conclusion - that the
sawmill had simply finished processing its stock of illegally-sourced logs - is not
Elsewhere, SGS asserts that "in some areas the Forestry Administration's efforts
in the suppression of the illegal logging have resulted in a shift from large-scale
land-clearing to selective logging as a side-effect". SGS offers no evidence
for this conclusion beyond cursory observations made from an airplane as the team
travelled to the site of the Battambang case.
The lack of investigative rigor, or even curiosity as to the reality on the ground,
is most apparent in SGS's inspection of Tumring rubber plantation in Kampong Thom.
Since its inception in August 2001, Tumring has exemplified the logging mafia's shift
from acquisition of timber through the forest concession system - which has been
in suspension since January 2002 - to use of plantation development or economic concessions
as the preferred means of accessing the resource. Under this system, senior officials
grant authorization to companies to develop plantations which, not coincidentally,
happen to be situated in forests. The forests thus have to be clear-cut to make way
for the "development" and proceeds of the resultant timber sales are pocketed
by the companies and brokers of the deal. The system is, in essence, a forest concession
by another name. A key difference is that the destruction of areas of forest is terminal
- with the forest completely cleared there is no scope for regeneration.
Tumring remains a stand-out case among the industrial logging operations masquerading
as plantation developments, not least in its initiation by the highest levels of
Government. It also has the distinction of involving the most powerful of Cambodia's
timber syndicates. Cutting and transportation of logs from Tumring has been organised
by a company owned by Seng Keang, the wife of Dy Chouch, a cousin of Prime Minister
Hun Sen. Seng Keang and Dy Chouch operate as logging subcontractors for several timber
concession companies, as does Seng Keang's business partner, Khun Thong, who also
owns a sawmill. The well-connected Khun Thong is the father-in-law of Forest Administration
Director Ty Sokhun and the brother-in-law of the Minister for Agriculture, Forestry
and Fisheries, Chan Sarun.
Seng Keang has organised the extraction of logs from Tumring, in defiance of the
ban on log transportation, for processing into plywood at a factory near Phnom Penh,
which she and Khun Thong have surreptitiously taken over from former timber concessionaire
Kingwood company. The illegal transports are expedited by permits issued to Seng
Keang by Kampong Thom foresters, which describe the two-to-three-metre-long log sections
as "firewood". Firewood incurs a royalty tax of $1 per cubic metre, as
opposed to the $54 per cubic metre due on logs. Courtesy of the firewood permits,
the Cambodian treasury has been deprived of at least one million dollars over the
past two years.
The clear-cutting of Tumring has destroyed a community forest area claimed by the
local population, who in return are promised a share in the profits of a rubber plantation
which will not produce yields for 5-to-10 years. The logging has also involved the
illegal felling of vast numbers of trees that local people tapped for resin and which
were therefore protected under the 2002 Forestry Law. Tree resin collection sustained
the livelihoods of many of the households in Tumring, as did the gathering of other
non-timber forest products that have also now disappeared. In essence, Tumring offers
a classic example of social injustice, Cambodia-style: members of the elite illegally
reaping vast profits at the expense of some of the country's poorest citizens.
SGS's failure to understand or address the forces at work in the Tumring debacle
lies behind its contention that illegal logging "is closely related to poverty
alleviation", and that "illegal activities [are] in most cases being carried
out by people in desperate need for income and /or land on which to live". SGS
does not question the foresters' claim that only firewood is being moved out of Tumring,
in the face of abundant evidence that this is a lie. Moreover, despite visiting Tumring
- now thousands of hectares of denuded soil where once was forest - SGS concludes
"that the FA staff has successfully prevented the transport of logs from this
area". SGS likewise fail to question the foresters' claim that the perpetrators
of forest crimes in Tumring are villagers, who are going to be "re-educated".
The methodology SGS is following appears to consist only of seeking to verify data
recorded by the foresters. No account is taken of any omissions in these records.
Put another way, if the foresters fail to record an illegal activity, because they
lack information or because it is they who have commissioned or facilitated it, SGS
will not examine the case. SGS is not verifying the performance of the FA, as SGS
is paid to do, but rather verifying what the foresters choose to include in the reports
they share with SGS - two quite different things. SGS therefore takes no account
of the fact that these reports on forest crimes might contain serious omissions resulting
from either corruption or incompetence by the FA, or that many crimes may not be
reported by the FA at all for the same reasons.
SGS fails even to mention several significant cases of forest crime which have occurred
and received widespread media coverage between December and March 2004. No mention
is made, for example, of the FA's much-publicized crackdown on illegal timber businesses
in Siem Reap and Oddar Meanchey between November and January. This operation resulted
in the confiscation of around half a million dollars worth of luxury timber, which
has since disappeared from the Siem Reap Forest Administration office and appears
to have been stolen. Other high-profile cases, such as the efforts of Phnom Penh
Governor Kep Chuktema's entourage to shoot their way through an FA checkpoint, and
the role of the Minister of Commerce and the Deputy Director of the FA in facilitating
illegal luxury timber exports, likewise fail to register.
Whether as a result of institutional constraints or its own timidity, SGS's first
published findings provide little insight into the performance of the FA and other
Government agencies in tackling forest crime. Unless the underlying reasons for these
shortcomings are addressed now, it is unrealistic to expect any substantial improvement
in subsequent reports.
The significance of Independent Monitoring goes beyond performance assessment of
the FA, however. The Government does not hesitate to portray its existence to international
donors as evidence of commitment to addressing governance problems in Cambodia. An
independent monitor that is no more than a paper tiger is therefore not only a waste
of $425,000 per year in loan money which Cambodia will be repaying the World Bank,
it also stands to be used by officials as a political prop, conveying an impression
of political commitment that in reality lacks substance.
In this regard, a toothless independent monitor is in fact counter-productive. The
Government, the World Bank, and SGS itself, must act now to rectify the current flaws
in the independent monitoring mandate and its execution, if the institution is to
retain any degree of credibility in Cambodia.