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Cambodia's Logging Concessionaires: Villians or Victims?

Cambodia's Logging Concessionaires: Villians or Victims?


Road built by Hero-Taiwan blocking a stream which is the only source of drinking water for the residents of Suem village in Ratanakiri. Not all logging issues are 'legal'.

On January 11 Global Witness released "The Untouchables," the environmental

watchdog organization's latest report documenting the "forest crimes" of

Cambodia's logging concession companies. The report was timed in order to prompt

a current ADB-funded review of the kingdom's logging concessionaires to cancel concession

agreements with companies with proven past histories of violating international standards

of good forest management.
The Post's Phelim Kyne spoke with Henry Kong, Chairman of the Cambodia

Timber Industry Association (CTIA), the concessionaires' lobby group, and Patrick

Alley, Director of Global Witness, for a look at the past, present and increasingly

cloudy future of Cambodia's logging companies.

The Post: Why CTIA?

Henry Kong: "CTIA is a vehicle [for concessionaires] to coordinate with

the forest sector. There's too much prejudice [against concessionaires] in Cambodia

... so much so that logging has become a dirty word. We have an open door membership

policy and don't judge who are qualified to be members. We hope in future to evolve

into a self-regulating body where minimum standards are set so membership is limited

only to those who qualify."

Patrick Alley: "I don't object to [concessionaires] having a lobbying

organization, but [CTIA] provides lobbying for logging companies that are so blatantly

bad given the concessionaires' record in this country. 80% - 85% of concessionaires

in [CTIA] have been documented for illegal operations. [Through CTIA] concessionaires

lobby for even more leniency from the Cambodian government and the international

community than they already enjoy."

The Post: What's your view on allegations of concession malfeasance?

HK: "I wouldn't defend the industry as a whole. We recognize that there

are 'bad boys', 'good boys' and 'potential bad boys.' We don't protect or condone

those who commit intentional noncompliance with accepted laws. But there are those

'potential good boys' who can't comply [with their concession agreements and Cambodian

laws] due to circumstances. It doesn't mean they can't and shouldn't be given a second


PA: There are only two logging concessionaires in Cambodia that might deserve

to be classified as "good", but that's mainly due to a lack of any information

whatsoever about their activities.

The Post: What do the concessionaire's see as problems?

HK: The high royalties on timber products imposed by the Cambodian government

in February 1999 are killing the industry. Cambodian timber has as a result been

effectively priced out of regional markets, which has impacted severely on the timber

companies." (According to CTIA figures, the RGC royalties of $54 per cubic meter

of timber compare unfavorably with government royalties of approximately $3 per cubic

meter on Malaysian and Indonesian timber.)

PA: "For years [the concessionaires] have had it good in Cambodia, getting

wood for virtually nothing. Now the economic climate is suffering so they're suffering

too-that's just business. The fact is that cheap royalties contribute directly to

the destruction of resources. Countries such as Indonesia that have low [royalties]

for timber are renowned for corruption and unparalleled destruction of the forests."

The Post: What about illegal logging?

HK: "The way I see it, the crux of the problem [of illegal logging] is

still a lack of strong political will and inadequate revenue allocation to the provinces,

so much so that the provinces must resort to their own means to generate their own

revenue, and obviously the most obvious means of generating revenue is logging."

PA: "I agree that the government has been corrupt, ineffectual and has

actually authorized [illegal] exports of logs, some of which have come out of concessions.

But let's not forget that logging concession companies are around the world recognized

by NGOs as guilty of targeting vulnerable, post-conflict countries where they can

pay to get red-tape cut and thus make a lot of money quickly. What's unique about

Cambodia is that the logging concessions' usual way of doing business has come unstuck


The Post: The ADB Concession Review announced that "100% of concessionaires

are in violation of their concession agreements with the government." Should

concession contracts be canceled as a result?

HK: "I have not been privileged to see that [ADB] document yet, but there's

a degree of violations [of concession agreements]: serious, non-serious, petty or

small technical violations. It would be illogical to penalize a company for non-serious

violations. We're not against the elimination of 'bad boys' who don't practice good

forest stewardship. The fact is that concessionaires want to practice sustainable

forest management (SFM), but it costs money. SFM requires concessionaires to cut

less and cater to the needs of the environment and local communities. It means less

money and more input for the concessionaires, and requires that concessionaires be

safe from policy changes at the whim of government. It there's a total elimination

of all those in violation of their concession agreements ... you come to a situation

of an open vacuum where others will rush in to fill the gap and the government will

be back to square one."

PA: "It's easy for concessionaires to say 'we want to be good', but they

shouldn't be taken at their word. The government should take away the contracts of

those companies found in violation of their concession agreements and allow them

to reapply in open competition based not just on money but their past record. If

they're really 'good', they should be allowed to retain their concessions. But to

date [the concessionaires] have certainly not demonstrated why anyone should keep

them on."

The Post: Why won't CTIA discuss the findings of Global Witness' concessionaire


HK: "There is no concrete evidence to back up Global Witness' accusations."

PA: "If Global Witness' evidence was good enough to prompt the IMF and

the World Bank to close down their Cambodian operations in 1996, good enough for

donors to link aid policy to Cambodia in 1996, 1997 and 1999 and good enough for

the US State Department between 1995-1997, there should be few doubts as to how 'concrete'

our evidence is."


Global Witness' call for the ADB to impose punitive sanctions on logging concessionaires

found in violation of their concession agreements was echoed at a January 13-14 National

Workshop on Forest Crime in Phnom Penh. British Ambassador George Edgar called for

cancellation of contracts of companies "in serious violation" of their

concession agreements. Repeated attempts by the Post to contact Fraser-Thomas, the

company contracted by the ADB to undertake the concession review, have gone unanswered.


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