Logo of Phnom Penh Post newspaper Phnom Penh Post - Comment: Donors must heed the "inconsistencies" in logging

Comment: Donors must heed the "inconsistencies" in logging

Comment: Donors must heed the "inconsistencies" in logging

British-based environmental lobbyists Global Witness take issue with the

Government over its logging policies, and with international donors over their "solutions."

DESPITE his letter to the Post, "Timber trade to be strictly controlled: Tao

Seng Huor" (Phnom Penh Post April 19-May 2, 1996), Agriculture Minister Tao

Seng Huor's comments are inconsistent with statements made by First Prime Minister

Prince Norodom Ranariddh, and with reality.

Following Prince Ranariddh's reaction to news of the "million meter" deal,

where he in effect said that the Thais would allow timber from Khmer Rouge-controlled

zones to enter Thailand, can Tao Seng Huor explain why he is now so confident that

negotiations held with General Chavalit will lead to control over illegal exports

to Thailand? Prince Ranariddh, however, said that there will be control, presumably

as defined by Tao Seng Huor in his letter, to prevent "new" logs from being

exported. If there is sufficient control to do this, then there must also be sufficient

control to have not allowed any exports from Khmer Rouge areas in the first place.

His letter goes on to say that the deal was only a deal "in principle".

If this is the case, why has the Thai Interior Ministry contacted Thai customs offices

with copies of the agreements signed by the two Prime Ministers, to tell them to

expect the volumes of logs as described in the documents? As far as Thai Customs

are concerned, they expect volumes of log imports to Thailand to be as detailed in

the new "million meter" deal, signed by the two Prime Ministers.

The Royal Government of Cambodia (RGC) has also made a serious error in negotiating

with the companies listed on the "permits". Not one of the companies involved

in the "million meter" deal (with the exception of the BLP Company - which

will be discussed later) has a "legitimate" concession, as defined by the

Ministry of Agriculture "Concession list", released to the press in December

1995. How could these companies have legitimate stockpiles of already felled timber,

when they never had legitimate concessions in the first place? After several investigations

along the Thai/Cambodian border, these companies are very familiar to Global Witness

and we know that they have been receiving RGC Certificates of Origin (COs) from someone

in Phnom Penh. Even if, by a stretch of the imagination, the provision of these COs

was legitimate in the past, there are inconsistencies between the volumes of logs

these companies have requested in the exports provided for under the new "million

meter" deal, and the original amounts provided for under the COs they received

- to give but one of many examples: Under the provision of their CO, the American-owned

company, Display Tech, was permitted to import into Thailand 20,000 cubic meters

of logs. They actually imported 12,330 cubic meters before April 30, 1995, and a

further 1,299 cubic meters during May (in direct violation of the RGC May 1 timber

export ban), leaving them 6,371 cubic meters remaining. Why have they now been given

a permit to export 25,000 cubic meters under the "million meter" deal -

5,000 cubic meters more than their original "entitlement"?

The BLP Company which operates across An Mah (An Seh) checkpoint, is the company

whose 22 Thai workers were killed in November 1994. As already stated, this is the

only company on the "million meter" deal which also features on the Ministry

of Agriculture Concession list. That original concession provided BLP with 200,000

cubic meters, of which the company cut approximately 100,000 cubic meters, and managed

to move 50,000 cubic meters into Thailand by the time their workers were killed.

The remainder was left in Cambodia. Since the murders, BLP has had no workers in

Cambodia, and yet the "million meter" deal provides them with 225,000 cubic

meters - more than their original concession. This company does not operate in a

Khmer Rouge controlled area.

Having recently returned from the Thai/Cambodian border, we can confirm that the

Thai timber companies, many of whom in late November 1995 were having some difficulty

in obtaining COs from Phnom Penh, are now thriving. Companies like Larry Bridges'

Display Tech, who had abandoned their rest area in November, now sport newly painted

gate and flag poles; others have had their rest areas bulldozed and are already to

receive logs. The "million meter" deal has even provided the means for

new companies, which did not exist in November 1995 to open up new rest areas - some

of them figure on the deal permit; others don't even do that. All of the companies

we talked to deal directly with the Khmer Rouge and are currently cutting fresh timber

- many within so-called protected areas.

The "Control" as envisaged by Agriculture Minister Tao Seng Huor has the

following problems:

  • How does the provision of a "dossier" (described in point one) from

    the companies, enable the Forestry Department to determine that the wood in question

    is "old" - or for that matter, its quality?

  • If Prince Ranariddh is correct in his statement that it is not possible for RGC

    officials to have reliable data concerning stockpiles of timber in Khmer Rouge held

    areas, how will it be possible to verify the declarations from each company, as defined

    under point two? Furthermore, how will it be possible for the "double control"

    to be put in place on the border, as described in point four?

It is interesting that the Minister refutes the figure of 331,000 cubic meters

of already cut timber, when this is the figure given by the Forestry Department's

own inventory, carried out to determine the volume of timber as of April 30, 1995

for the very purpose of conducting the auction to deal with the problem of already

felled timber. It is also interesting to note that only 50,000 cubic meters of the

logs on the inventory are in a location which would allow for them to be exported

to Thailand.

Global Witness estimates of potential timber trade revenue is based on a figure of

US$35 per cubic meter. We have used this figure because it is the figure that numerous

timber company managers have told us that they pay to the RGC - this does not include

further payments for the "greasing of palms" which come on top of this

basic payment. However, using the World Bank estimate of $14 per cubic meter, and

estimates of volumes of timber exported to Thailand in 1995 (based on Global Witness

direct observations and Thai import statistics), the Finance Ministry of the RGC

should have received $12,513,970 in 1995. If in fact $35 per meter was paid, the

Finance Ministry should have received $31,284,925 from those same exports. If the

latter is correct, where has all the money gone? It should not be forgotten that

both of these payment levels are ludicrously low for timber with a world market value

from $350 up to $1,000, depending on the species.

The "million meter" deal is yet another example of extreme short sightedness

by the RGC. By signing these "permits" the two Prime Ministers have, in

effect, authorized a breach of Cambodia's cutting and export bans and are acting

as proxy fund-raisers for the Khmer Rouge. Rather than putting in place "administrative

procedures", which "are the guarantees for the high respect of the law

and of the environment" as stressed by Tao Seng Huor, the RGC have conveniently

forgotten their much vaunted December 1995 "logging rethink" and continued

their sell-off of Cambodia's forests - a process conducted in complete secrecy and

at the expense of Cambodia's people and environment.

The signing of the "million meter" deal has implications for the RGC at

the up-coming Consultative Group (CG) meeting in Tokyo. The RGC failed to provide

full information about timber concessions to the World Bank/FAO/UNDP team which visited

Phnom Penh in November/December 1995 - their report had been finalized and was already

at the press when news of the "million meter" deal broke.

The World Bank/FAO/UNDP report Executive Summary, "Text of report damning the

RGC's logging policies," (Phnom Penh Post, April 19 - May 2, 1996) is fatally

flawed, not least because of recent events, in several areas:

  • Estimates of 11 million hectares of forest remaining in Cambodia, presumably

    relate to figures given in the UNDP/FAO Land Cover Atlas 1985/87 - 1992/93. This

    document, while useful, should not be considered the definitive arbiter of Cambodia's

    remaining forests - there are numerous errors and inconsistencies which have not

    been ironed out through a thorough on-the-ground survey. In addition, the use of

    data from 1992/93 as a baseline in 1996, when it is well known that large scale deforestation

    has occurred since then, is simply irresponsible.

  • The document appears to continue to advocate an export based timber industry

    in Cambodia, at the current time. Such a policy is ill-advised, given the circumstances

    under which the trade is currently managed. Given that RGC forest policy lacks transparency

    and open discussion, that large tracts of forest are controlled by armed groups and

    that the illegal timber trade continues unabated, it is unwise to expect to be able

    to control "controlled" exports, especially as it has already proven impossible

    to enforce a total ban. Illegal exports will continue to be laundered through any

    such new "legal" exports, with little or no benefit to the Ministry of


Instead of putting time, effort and finances into studying the potential of a

log export-driven economy in Cambodia, which as already discussed will prove disastrous

for Cambodia's people, environment and future development (not to mention further

financing the civil war), members of the CG including the World Bank and the IMF,

should constructively consider the merits of "positive conditionality."

This should be managed such that the RGC and the CG members agree to mutually acceptable

targets relating to specific areas of forest policy and management. Once agreed,

future aid disbursements to Cambodia should be "benchmarked" to the satisfactory

achievement of these targets.

Global Witness do not believe that the Donor Community should impose unrealistic

conditions upon the RGC, but should work in partnership with them to preserve the

country's valuable natural resources. Global Witness unreservedly supports the continuation

of financial assistance to Cambodia, but believes that it should be linked to conditions

which encourage responsible government by the RGC. In the past, members of ICORC,

and now the CG, appear to be salving their conscience by pledging large amounts of

aid to Cambodia, without facing up to the problems of corruption and lack of transparency.

Until the RGC uphold the basic precepts of the country's Constitution, members of

the CG must take their responsibilities seriously, or become accessories to Cambodia's

current democratic, economic and environmental decline. The RGC and members of the

CG owe that much to those who ultimately foot the bill - the taxpayers around the

world who expect the money they give for Cambodia's reconstruction not be undermined

by Government policy - but most of all, they owe that to Cambodia's population, who

expect better after 26 years of conflict and all the promises of the massive international

investment that was UNTAC.


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