Press Release / Feb. 10, 2005

World Bank facilitates transport of illegally cut logs in Cambodia

The World Bank is continuing its support for rogue logging companies in Cambodia, even as Bank President James Wolfensohn visits Phnom Penh to promote best practices in global trade. Bank officials have recently brokered the lifting of Cambodia’s three year ban on log transportation, with the result that illegally cut timber is on the move once again.

“The World Bank has repeatedly revealed its blinkered determination to help the logging concessionaires resume operations” said Jon Buckrell of Global Witness, “The fact that many of these logs are resin trees that the companies stole from Cambodian villagers seems to be of no consequence to the Bank, despite its professed focus on poverty reduction and good governance.”

The Bank’s prevailing bias towards the interests of the logging companies has produced a range of damaging outcomes during the implementation of its Forest Concession Management and Control Pilot Project. Mounting concern at the project’s impacts prompted community representatives and NGOs to lodge an official complaint with the World Bank’s Inspection Panel earlier this month.

The World Bank has made clear its desire to overturn the transport ban since 2002. Bank officials finally persuaded the international donor community to endorse ministers’ demands that it be lifted at a meeting in December. Other donor agencies, notably FAO, Danida and DFID, previously told the Cambodian government that “the proposed log transportation cannot be separated from the origin of the logs” and that “even with the clarifications provided, we cannot endorse the movement of these logs”. These donors have given no explanation for their retreat from this position, raising questions as to their commitment to moving forest sector reform forward.

Logging companies have now begun transporting at least 3,500 old logs stockpiled across Cambodia. A high proportion of these were clearly cut in violation of the law and the legality of the others is dubious at best. World Bank-funded forest sector monitor SGS is validating log volumes but taking no steps to investigate the legal origin of the wood, nor whether royalties have actually been paid. The transport process is poorly supervised, with ample opportunity for companies to move illegally harvested fresh logs into the supply chain.

“The World Bank president should use his visit to get a grip on project activities that are rewarding forest crime” said Jon Buckrell “In the absence of corrective measures from the Bank’s senior management, its Cambodia debacle is shaping up as the classic example of how not to reform forest management in a post-conflict country.”

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Notes for editors:

· The Cambodian government introduced a definitive ban on log transportation at the behest of international donors in May 2002, as a means of compelling logging concessionaires to produce sustainable forest management plans. This followed on from a ban on logging in forest concessions introduced in January 2002. None of the companies has yet completed the forest management planning process.
· The logs now being moved were either felled in forest concessions prior to the introduction of the January 2002 cutting ban, or harvested under the guise of plantation development in the months that followed. A high proportion comprise trees that local people were tapping for resin. In many cases the holes in the trunks cut by the resin tappers are clearly visible.
· Resin tapped from various species of dipterocarp tree is an economically valuable commodity both within Cambodia and abroad. Cutting of trees being tapped for resin was prohibited under Cambodia’s 1988 Decree on Forest Practice Rules. The 2002 Forestry Law extends this protection to all resin-producing trees.
· The beneficiaries of the renewed log transports include some of the most infamous figures in Cambodia’s timber mafia. Foremost among these is Seng Keang, the wife of Prime Minister Hun Sen’s cousin, Dy Chouch. Seng Keang’s business partner Khun Thong is the father-in-law of Forest Administration Director-General Ty Sokhun and also the brother-in-law of Minister for Agriculture, Forestry and Fisheries Chan Sarun. Seng Keang company was the first to receive permission to resume log shipments following the lifting of the transport ban.
· In 2002, Seng Keang and other logging companies were involved in a major corruption scandal involving misappropriation of millions of dollars worth of royalties due on the same logs they now want to transport. The parties responsible were never held accountable and the Cambodian government has published no evidence to indicate whether the diverted royalties were ever repaid.
· The World Bank advocated overturning the log transport ban in a letter to the Cambodian Forest Administration in October 2002. Statements and actions by Bank staff since have consistently revealed the resumption of log transports to be a key part of its policy agenda for Cambodia’s forest sector.
· The international donor Working Group on Natural Resource Management, comprising FAO, Danida and DFID amongst others, wrote letters to Minister of Agriculture, Forestry and Fisheries Chan Sarun in June 2003 and October 2003 arguing against lifting the log transport ban.