Press Release / July 29, 2004

World Bank Desperate to Justify Industrial Logging in Cambodia

Immediate release: 29th July 2004


World Bank Forestry Project Desperate to Justify Industrial Logging in Cambodia

Forest concession companies, have, over the course of a decade, been a driving force behind illegal logging in Cambodia. The concessionaires have seriously degraded one of the country’s few natural resources, while abusing the rights of forest-dependent communities. Persistent timber theft and tax evasion by the companies, in collusion with corrupt officials, has seen the revenues siphoned off into private bank accounts, rather than funding Cambodia’s development.

A recent independent Forest Sector Review, commissioned by the Cambodian Government and international donors to provide a road map for forest policy in Cambodia, has recommended that the concession system be scrapped. The Forest Sector Review instead proposes the development of management systems at the community level, thus giving forest-dependent Cambodians much greater control over their resource. Its findings present the country’s new Government with an ideal opportunity finally to show the door to a system and operators which have conspicuously failed Cambodia.

Resistance to this necessary change in policy is being led by the World Bank’s flagship forestry project in Cambodia. The Forest Concession Management and Control Pilot Project has set out to maintain and entrench the existing concession regime. It is perpetuating a system that is dedicated to rent capture by corrupt officials and their business associates, and which offers no accountability to forest users and inhabitants. As such, it is undermining the World Bank’s stated objectives of governance reform and poverty reduction in Cambodia.

The World Bank project is currently recommending that the Cambodian Government allow renewed logging by six of the forest concessionaires for a further 25 years. All six companies have breached Cambodian law or the terms of their contracts and have demonstrated an absence of technical capacity. Most are little more than fronts for cronies and relatives of senior Government officials. Despite this, the World Bank project has used loan money to assist them in producing new forest management plans, which it now argues that the Government should approve.

The concessionaires produced their plans more than one year after an agreed deadline and only after the Government imposed a moratorium on their operations in January 2002. Rather than evaluating companies’ initial submissions, however, World Bank project staff repeatedly told them what changes they should make in order to render the plans more presentable. Some of the concessionaires submitted drafts to the World Bank project team as many as three times.

In its eagerness to sustain the concession system, the World Bank project is now endorsing management plans in which companies openly outline their intention to exclude local people from areas of forest and to log trees over which communities have legally recognised user rights. The World Bank project and the Government Forest Administration have refused to publish their evaluation of the plans, thus adding to the secrecy which blights a sector steeped in corruption and lack of transparency.

“The World Bank claims that its over-riding priority for Cambodia is strengthening governance,” said Simon Taylor, Global Witness Director. “With respect to the forest sector, this appears to mean using loan money to provide concessionaires with the necessary paperwork so that they can continue to operate illegally.”

World Bank project staff’s standard response to criticism of their approach is to say that indigenous people’s rights and environmental and social impacts will be addressed in subsequent plans drawn up by the logging companies. This line of argument is disingenuous. As they are well aware, once the companies have secured control over concessions for another 25 years, there will be no incentive for them to respect the rights of forest-dependent communities.

In addition, The World Bank project is advocating logging of Cambodia’s Prey Long forest, the last intact lowland evergreen forest in mainland Southeast Asia. This injunction to log flies in the face of the Independent Forest Sector Review’s recommendation that Prey Long be taken out of production in recognition of its high conservation value.

Despite all the money the World Bank has spent on what amounts to a window-dressing exercise, the quality of the six companies’ plans remains abysmal. Aside from stating the companies’ intention to ignore the law, their plans are shot through with omissions, inaccuracies and whole passages copied from other concessionaires, lending the exercise an element of farce.

The World Bank project’s endorsement of some of these companies defies explanation – not least the concessionaire whose forest was described by a previous study as 90% non-operable. It does fit, however, with the established pattern of nonsensical conclusions from a project that the World Bank itself deemed “unsatisfactory”. Principal among these has been the assessment that Cambodia’s forest cover increased over five years of industrial logging, land conversion and encroachment. This finding was released two months before the 2003 general elections in Cambodia and was promptly adopted as a political prop by the ruling party.

“The new Cambodian Government should follow the recommendations of the Independent Forest Sector Review and ignore the discredited prescriptions of the World Bank project,” said Simon Taylor. “In its desperate efforts to justify the concession system, the Bank is digging itself into an ever deeper hole. More importantly, it is advocating another quarter century of mismanagement which Cambodia’s forests will not survive.”

Notes to editors:

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 successfully disrupting funding to the Khmer Rouge in Cambodia by exposing their multi million dollar illegal trade in 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.

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