A WORLD Bank study into logging in Cambodia has revealed that the industry is in

a greater crisis than anecdotal evidence has so far suggested.

A preliminary report from Development Alternatives International (DAI), which is

funded by the Bank and tasked with logging control and verification, stated that

only a small fraction of wood was felled legally in the past 12 months.

"Total timber production is estimated to be at least 4.7 million cubic meters,"

the document states. "Assuming that only officially reported concession production

is legal (230,000 cubic meters), illegal timber production accounts for 95%."

The authors surmised that the government lost about $60 million at a tax rate of

$14 per cubic meter. The figure, understated as it is, does not include other uncollected

fees and taxes.

The document also stated that 21% of protected forests were subject to intensive

harvesting.

While not identifying culprits, it pointed out that concessionaires without approved

management plans were being issued permits to harvest "virtually anywhere".

It also said that demobilized soldiers were being granted special rights to forests

"in certain areas where there are no controls whatsoever".

It was not made known how DAI researched its information. It has been suggested that

DAI took dry-season felling figures and extrapolated them into a 12-month block,

which would not take into account wet-season lulls.

After he was briefed by the technical assistants on Wednesday, Agriculture Minister

Tao Seng Huor spoke to the Post.

"The results were very interesting for the World Bank and the Royal Government

of Cambodia," he said.

He did not comment on the veracity of the information, but said that he and director

of the World Bank's Southeast Asia and Mongolia unit, Ngozi Okonjo-Iweala, had met

and agreed to recommend a freeze on new concessions until the final results of the

studies are complete.

He said that he would recommend to stop issuing collection permits for felled timber,

take steps to review the Forestry Codes and study the structure of the Forestry Department.

He also said that he would push to cooperate with Vietnam, Thailand and Laos to stop

illegal cutting and exports.

Once the final results are in, Seng Huor said he supports forming a task force to

enforce the national forestry law.

"I hope the two Prime Ministers will agree to these points," he said.

The World Bank technical assistance projects were born out of pressure from donors

to reform the forestry sector. As part of the government's 1997 Economic and Financial

Policy Plan, four independent international firms were contracted to study and report

on various aspects of the trade.

Associates for Rural Development (ARD), tasked with forest policy reform, recommended

developing a "master map" of the country and establishing formal procedures

for land allocation. The briefing document stated that land was being allocated by

the central government with little local or provincial input.

It also pointed out that with the currency crisis in the region, market prices had

collapsed to 50-60% of levels six months ago.

ARD recommended a complete audit to pave the way for voluntary re-negotiation of

the 1994-97 concession agreements and called for the military to cease protection

and transportation activities.

The researchers estimated that large sawmills were capable of handling 1.2 million

cubic meters per year and that mills were under construction to take in 0.5 million

more.

Combined with an estimated 1.0-1.5 million cubic meter capacity of smaller mills,

they wrote that the total is more than Cambodia's forests can bear: "RGC current

policy encourages overcapacity of forest industry and unsustainable levels of cut

of forests."

After signing an agreement for $31 million for urban water projects last week, Mrs

Ngozi told reporters that she was concerned by the findings. "Forest resources

are being depleted at an alarming rate with very little benefit to government coffers,"

she said. At current rates of exploitation she predicted that it would "only

take three to five years before Cambodia's forest resources are depleted".