Liberia poised to hand forests to timber pirates

Press Release – 15/07/2009

Two firms linked to Malaysian timber giant Samling, a company notorious for destroying tropical forests and abusing local communities, are being considered for major logging contracts in Liberia because of flaws in the bid evaluation process, Global Witness revealed today.  The NGO is calling on the Liberian government not to sign any new logging deals until thorough background checks are carried out on the companies that have bid.(1)

Global Witness has obtained a leaked copy of a Liberian government-commissioned assessment of firms bidding for a new round of 25 year logging contracts, along with a memo from an official advisor to the government on governance issues.(2) The assessment is intended to protect Liberia from unethical companies, yet it fails to determine whether the bidders or related parties have a history of legal compliance and respect for human rights in their previous operations.  It makes no reference to the track record of Samling, despite its poor reputation in other parts of the world.

"Given the timber industry's previous role in fuelling conflict in Liberia, letting in firms controlled by some of the world's most predatory loggers would be disastrous," said Natalie Ashworth, campaigner at Global Witness.  "Samling is the kind of operator that should not be allowed anywhere near Liberia's forests, much less handed control for decades at a time.  One could hardly think of a worse choice.  The Liberian government and international donors have spent five years and tens of millions of dollars reforming the forest sector and instituting a system of checks and balances. Yet, as this flawed bid assessment shows, when it comes to the crunch, these safeguards are short-circuited, exposing the country to a new wave of unscrupulous companies."

Global Witness found Samling illegally sourcing timber from a Cambodian wildlife sanctuary in the 1990s, and the company has since faced serious allegations of illegal logging in Papua New Guinea and Guyana. Samling is at the centre of a bitter conflict with the Penan minority in Borneo, who claim that the company is abusing their rights and destroying their livelihoods.(3)

Global Witness has discovered that one of the companies bidding for forest management contracts in Liberia, Southeast Resources Limited, is 60% owned by Woodman, a firm in which Samling is reported to have a 50% stake. Another bidder, Atlantic Resources Limited, is linked to Samling via a firm called Perkapalan Damai Timar (PDT).  PDT holds a 60% stake in Atlantic and a 5% stake in Samling.  It has a series of interconnected relationships with other members of the Samling group.(4) 

According to the leaked documents seen by Global Witness, Samling Global is providing the money to support PDT's funding of Atlantic Resources; the CEO of Samling Global is a director of both Woodman and PDT; and Woodman owns 60% of Alpha Logging, a company which won another logging contract in Liberia earlier this year. 

Global Witness wrote to Samling asking about its relationships with Woodman, PDT, Atlantic, Southeast and Alpha.  Samling responded stating that ‘Samling Global Limited is not involved in the bidding or awarding of any forest management contract in Liberia.  We therefore regret that we will not be able to respond to your due diligence questionnaire.'

"There is precious little evidence that industrial logging in the tropics is ever sustainable or reduces poverty.  If the Liberian government insists on once again turning its forests over to the global timber industry, it should, at a minimum, exclude firms that have a documented history of destruction and abuse," said Natalie Ashworth.  "In the same week that the President signed into law a landmark bill aiming to increase accountability in the extractive industries (5), it would be both contradictory and bitterly ironic to see Liberia's forests carved up in such a slipshod and negligent manner."

For more information contact: Natalie Ashworth on +44 207 561 6369 or +44 7968160377; Mike Davis on +44 207 561 6393 or +44 7872 600 860

Go the main Samling page on Global Witness website

Read subsequent press release and rebuttal to joint statement by Alpha, Atlantic and Southeast

Read correspondence between Global Witness and Samling

Notes:

(1) Global Witness has written an open letter on these issues to the Board of Directors of the Liberian government Forestry Development Authority (attached below)

(2) The advisor in question is the Controller of the Liberia Governance and Economic Management Assistance Program (GEMAP).  GEMAP is a partnership between the Government of Liberia (GOL) and the international community that seeks to build a system of economic governance to promote accountability, responsibility and transparency in fiscal management so that Liberia's resources will be used in the interests of its citizens.

(3) References for the points which follow can be found in the background briefing, Background investigations into companies bidding for Liberian forest management contracts, attached below

In 1997, Global Witness revealed that Samling was illegally sourcing timber from a Cambodian wildlife sanctuary.

• In 1997 a letter from the Cambodian government complained that Samling were guilty of:
• o Starting to cut before receiving a permit
• o Cutting outside permitted areas
• o Cutting undersized logs
• o Continued logging after imposition of 31^st December 1996 logging ban.
• A Concession Review by the Asian Development Bank in 2000 said that the Cambodian logging concession management regime was a ‘total system failure' and that all concessionaires - of which Samling was the largest - were violating their contracts with the government.
• Samling is one of the companies logging the last remaining areas of primary forest in the Malaysian province of Sarawak. It is at the centre of a bitter conflict with the Penan minority, who claim that the firm is abusing their rights and destroying their livelihoods.
• In January 2007, Barama, a Samling subsidiary, had its Forest Stewardship Council certification suspended in Guyana after an independent auditor uncovered a range of violations including logging in Amerindian lands without the free and informed consent of local populations and failure to conduct appropriate environmental impact assessments.
• On 7 October 2007, a statement from the Government of Guyana reported that ‘the President speaking briefly on the recent alleged breaches of forestry procedures, said there appears to collusion between Barama Company Limited (Samling subsidiary) and some concessionaires and staffers at the Guyana Forestry Commission (GFC) to defraud the government of revenue. The President warned that there will be consequences for all the parties involved based upon preliminary investigations. "There are some concessionaires who have a joint arrangement with Barama to harvest on their concessions to defraud the government of revenue... They will face consequences... it seems to be a system among these three parties to defraud the government of revenue," President Jagdeo said"'.
• There is substantial evidence that Concord Pacific, controlled by Samling, also violated laws in Papua New Guinea, using a road construction project as the cover for a massive logging operation.

(4) For details of the connections between Atlantic Resources, Southeast Resources, Alpha Logging and Samling, please see the background briefing, Background investigations into companies bidding for Liberian forest management contracts, attached below

(5) See Global Witness press release welcoming the transparency law

Downloads

 Background investigations into...ement contracts
 Global Witness Letter to the FDA
 Memorandum on the due diligenc...ement Contracts