Press Release / Oct. 22, 2003

World Bank-funded forestry project prepares to endorse illegal loggers in Cambodia

Immediate release: 22nd October 2003


World Bank-funded forestry project prepares to endorse illegal loggers in

A World Bank-funded forest concession management project is poised to recommend that the Cambodian Government approve forest management plans submitted by Colexim
Enterprise and Everbright CIG Wood: two companies with proven track records of illegal

Colexim and Everbright are politically well-connected companies which have logged
illegally in Cambodia over several years. Global Witness1 has documented many
instances of illegal activity by Colexim, a 51% share of which is owned by the
Cambodian Government. Since 1995, the company has logged in contravention of a
cutting ban, organised or sanctioned the destruction of forest land and illegally felled
resin trees tapped by local people. 2 The Chinese state-owned Everbright company
logged illegally in 2000 and 2001. In January 2001 it carried out an illegal logging
operation which may have cost Cambodia as much as $250,000 in lost timber royalties.
Despite the abundant evidence of their illegal activities, the two companies have
consistently escaped any penalties.

“Given these companies' history of illegal activities, the idea that they should continue to
hold custody of Cambodia's most valuable natural resources is indefensible," said Mike
Davis of Global Witness. "In the consultants' home countries such companies would have
been shown the door years ago, yet this World Bank project’s review team seems intent
on inflicting them on Cambodia for a further quarter of a century. The consultants’
professed belief that Colexim and Everbright are willing and able to change is, at best,
extraordinarily naive."

Both Colexim and Everbright failed to meet the original September 2001 deadline for
submission of Strategic Forest Management Plans management plans to the Government
Department of Forestry and Wildlife (DFW). The companies finally produced plans only
after the Cambodian Government imposed a moratorium on logging in timber
concessions in January 2002.

The $5 million World Bank project’s ‘Technical Review’, which is based in DFW, fails
to consider the track records of Colexim and Everbright, both in terms of compliance
with the law and past management practices. Another fundamental flaw is the weight
which it accords the concessions’ remaining timber resources, to the exclusion of social
and environmental considerations. So far, the Technical Review team has only
recommended cancellation of concessions without commercially viable timber resources.
“The bottom line is – if you’ve got trees left to cut, go and cut them,” said Mike Davis.
Despite the emphasis on concessions’ commercial viability, the World Bank project’s
Technical Review has overlooked Cambodia’s 2002 Forestry Law, which prohibits
cutting trees of species which local people tap for resin.

“Colexim and Everbright’s claims to commercial viability are based on the premise that
they can cut resin-producing trees in their concessions, despite the fact that this is illegal”
said Mike Davis. “The failure of the Technical Review team to consider this is a fairly
astonishing oversight.”

The lack of credibility of the World Bank project’s review has prompted the international
donor Working Group on Natural Resource Management to commission an independent
panel of experts to examine those plans which the Technical Review team marks for
approval. This independent assessment forms part of an overall Forest Sector Review,
funded by donors and implemented with the support of the Cambodian Government.
The Department of Forestry and Wildlife (DFW) has so far given no indication that it
will allow the Forest Sector Review access to timber concessionaires’ re-drafted
management plans, nor that it will take account of its findings. This raises the prospect of
management plans being approved by DFW and the Ministry of Agriculture, Forestry and
Fisheries (MAFF) before the Forest Sector Review’s independent assessment has even

"Given that the Forest Sector Review may conclude that the Colexim and Everbright
plans are inadequate, it would be folly for DFW and MAFF to give them the green light
before the independent assessment is completed,” said Mike Davis. "DFW and MAFF
must, as a matter of urgency, clarify how and when they intend to disclose the revised
management plans submitted by Colexim, Everbright and other companies. They should
also give an assurance that the findings of the Forest Sector Review's independent panel
will be fully factored into final decisions on the fate of all Cambodia’s timber

Briefing notes on Colexim and Everbright companies are attached.

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 successfully cutting off 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.

2. Resin tapped from various species of dipterocarp tree is an economically valuable commodity
both in Cambodia and abroad. Within Cambodia resin is used primarily for sealing boats.
Cambodian resin is also exported to neighbouring countries where it is used to make varnishes
and other products. Recent studies have shown that resin tapping is a significant source of
income for people living in forested areas of Cambodia.