Press Release / Feb. 20, 2004

Laundering of illegal timber undermines forestry reform in Cambodia

Immediate release: 20th February 2004


Laundering of illegal timber undermines forestry reform in Cambodia

Cambodian Government officials are continuing to facilitate illegal logging and export of illegally sourced timber, perpetuating the culture of criminality that pervades the country’s forest sector.

The timber trade is increasingly targeting rare luxury tree species which are protected under Cambodian law. To circumvent the logging ban, harvesting operations are being disguised under a variety of illegal permits, to meet the demands of the illicit cross-border wood trade with Thailand, Vietnam and Laos.

In January and February, armed groups operating in Kratie province have been illegally logging luxury tree species and exporting the timber to Vietnam through border passes in the Valoeu region. These activities have been facilitated by documents provided by the Ministry of Commerce and the Forest Administration, which purport to authorise a series of luxury timber exports, including a recent export of more than 1,000m3 of Kranhung wood, worth approximately $700,000. The cutting and transportation of much of this timber has been supervised by former chief of Kratie border police, Thang Riththy: a local strongman with a long history of illegal logging in Kratie and Mondulkiri provinces.

“The fact that senior officials have issued documents authorising these exports does not make them legitimate. It does, however, make those officials complicit in serious forest crimes.” said Jon Buckrell of Global Witness.1 “Facilitating such illegal activities further impoverishes Cambodia and undermines the rule of law. In this case, it also serves to sustain the criminal career of an individual who has abused his police rank over many years.”

Flour Manufacturing Company, listed in Ministry of Commerce documents as the supplier of the timber, has a track record of using dubious official permits as a pretext for logging operations. Over the past year the company has been using a land concession permit as a cover for logging in an area of commercially valuable forest in Stung Treng province adjacent to the Lao border. Although nominally authorised to create a plantation, Flour Manufacturing has focused its energies on illegal cutting and export to Laos of luxury grade trees, using unofficial border crossings to escape detection by the authorities.

These cases follow a well-established pattern of senior officials providing loggers with permits and licences which are then used as a cover for illegal logging and export activities.

In 2000, the Thai company Thitikarn Ltd. obtained a permit authorising it to collect "branches and tree stumps" in Oddar Meanchey province. Instead, it purchases square logs from military-supervised illegal logging operations which focus on stripping out the province’s remaining stands of luxury timber trees. In mid 2003 the company was each month exporting 600 cubic metres of luxury wood, worth approximately $345,000, to Thailand. Thitikarn operates under the protection of Oddar Meanchey Governor Lay Virak and deputy governor Mao Tim, as well as units of the Royal Cambodian Armed Forces, police, military police, border police, customs authorities and Ministry of Environment officials.

Amidst a recent high-profile crackdown on luxury timber dealers in Siem Reap and Oddar Meanchey provinces orchestrated by the Forest Adminstration, Thitikarn continues to operate uninterrupted. As of the end of January, its compound in O’Pouk village, near O’Smach, contained at least 700 cubic metres of illegally-harvested luxury wood, guarded by Battalion 42 soldiers commanded by Colonel Meak Vong.

The impunity which Cambodian officials grant Thitikarn contrasts with the action taken by Thai authorities in August 2003, when Thai Forestry Police raided a Thitikarn warehouse in Bang Na, Thailand, seizing luxury wood from Cambodia and Laos worth around $250,000. Protesting the raid, Thitikarn publicly defended its plunder of Cambodia’s natural resources; claiming that by confining its operations to Cambodia, this would help reduce illegal logging in Thailand.

During the past year, a stump collection concession has also been used as a vehicle for illegal logging by Taiwanese company Northeast Lumber, in Preah Vihear province. The Forest Administration reallocated 43,827 hectares of the defunct Lan Song company concession to North East Lumber in 2002, in direct contravention of the 2000 sub-decree on forest concession management, which prohibits reallocation of cancelled timber concessions. The company then proceeded to use this document as pretext for illegal felling of Beng, Thnong and Sokrom luxury timber species. Earlier this month, the company was continuing to transport luxury timber logs, in violation of the log transportation moratorium. North East Lumber loggers interviewed by Global Witness in May 2003, sought to justify their operations with the argument that the only trees they cut were ones which were already “nearly dead”.

“Senior officials’ persistent issuing of permits and licences which are themselves illegal or are designed to facilitate illegal activities, constitutes arguably the greatest threat to Cambodia’s forests” said Mike Davis of Global Witness. “This practice should have ended with Prime Minister Hun Sen’s injunction on bogus “old log collection” permits in 1999. Instead it has mutated into the authorisation of “plantation development”, “land concessions” and thinly disguised variants on the “collection permit” theme. All these put an official gloss on the further liquidation of Cambodia’s forests and the profit of a corrupt minority.”

Global Witness calls on the Government to prosecute officials who are facilitating forest crimes, in accordance with the provisions of the 2002 Forestry Law. The Government should, moreover, halt the issuing of permits, licences and concessions which are illegal or otherwise contrary to the regulatory framework. Stump and branch collection permits and land concessions situated on forestland should be revoked with immediate effect and prosecutions brought against the companies which have used them as a vehicle for illegal operations.

Notes to editors:

1. Global Witness is a London based non-governmental organisation that focuses on the role that natural resources play in funding conflict and facilitating corruption. It alerted the world to the issue of conflict diamonds in 1998 and has since campaigned for controls to counter the problem. Its other campaigns have included exposing the Khmer Rouge’s multi million dollar illegal trade in Cambodian timber; working to increase fiscal transparency in the oil trade due its negative impact on regional development and campaigning for targeted timber sanctions against the Liberian logging industry for funding regional conflict and instability.