Company Profiles

Listed companies

Aokam Perdana Bhd
Associated Kaolin Industries Bhd
Austral Amalgamated Bhd
Berjaya Group Bhd
Best World Land Bhd
Damansara Realty Bhd
General Lumber Fabricators & Builders Bhd
Idris Hydraulic Bhd
Innovest Bhd
Kumpulan Emas Bhd
Land And General Bhd
Lien Hoe Corporation Bhd
Long Huat Group Bhd
Rimbunan Hijau Group
Samling Group
Timbermaster Industries Bhd
WTK Group

Other companies / interests

Atlantic Industries Ltd
Chew Piau Bhd. / Eastern Era Bhd.
Hasedat / Zimmal Holdings
KTS
Mafira Group
Nila Wood Sdn Bhd / Maving Brothers Ltd
Parklane
Primegroup Holdings Ltd
Solid Timber Sdn. Bhd
Syuen Corporation
Tenaga Khemas Sdn. Bhd

Aokam Perdana, a tin mining company, was launched into the timber business in August 1990, when Managing Director Teh Soon Seng (right) undertook a reverse take-over of the company by injecting timber processor Pembangunan Papan Lapis (Sabah) Sdn Bhd (PPL) into Aokam.¹⁸³ In exchange, Teh gained control of the listed company. By the end of 1994, Aokam was a stock market favourite, with shares worth US$1.6 billion and profits of 40-60% a year, one of the highest rates in the world for a timber company.¹⁸⁴ The former company chairman, Tunku Abdullah, who retired in September 1997,¹⁸⁵ is a close associate of Prime Minister Mahathir.¹⁸⁶ The current chairman, Samshuri Bin Hj Arshad,¹⁸⁷ is a former deputy speaker in the lower house and former MP of Balik Pulau (Penang).

A major advantage for the company has been its deal with Idris Hydraulic, through which Aokam obtained access to a cheap wood supply—RM170 (US$68)/tonne compared to normal price at RM400-540 (US$160-216)/tonne—from Idris Hydraulics' Sagisan concessions in Sabah, covering 256,000 ha.¹⁸⁸ Aokam Perdana also has a 40-year joint venture for plywood manufacturing between wholly-owned subsidiary Aokam Resources Sdn Bhd (55%) and Changchun Plywood Plant (45%) in the Chinese province of Jilin and was reported to be seeking logging concessions in China,¹⁸⁹ although this was later refuted by the company.¹⁹⁰ Aokam has sought joint ventures with Idris Hydraulic in Myanmar and Laos.¹⁹¹ The company was reportedly offered concessions in the Solomon Islands and Papua New Guinea, but turned them down due to a lack of manpower.¹⁹²

The former rising star of the Kuala Lumpur Stock Exchange has been in rapid decline, showing a net loss of RM144.73 million (US$57million) for the year ending June 1996.¹⁹³ According to analysts, Aokam's timber complex became severely under-used, with a number of problems including inadequate supply of logs.¹⁹⁴ In November 1997, Teh Soon Seng, who ceased being a director in March 1997,¹⁹⁵ was wanted by the Malaysian police in connection with RM45 million (US$11.25 million) of missing funds. The police were investigating claims of misappropriation of funds in Aokam Perdana or the transfer of money into another company's account in which Teh also had an interest. The police were also looking for another Aokam company executive, Low Thian Hoe.¹⁹⁶

The forestry subsidiaries of Aokam Perdana are likely to be involved in current efforts to restructure the company in the face of severe financial difficulties. As part of the restructuring plan, it has been proposed that Aokam Perdana buys timber harvesting rights from Idris Hydraulic.¹⁹⁷ At the end of May 1998, it was reported that Aokam's subsidiary PPL was being sued by a creditor for non-payment of bills and the parent company had obtained a restraining order against PPL's winding-up until restructuring has been completed.¹⁹⁸

In October 1996, Associated Kaolin Industries Bhd was reported to be acquiring a total of 104,758 ha of timber concessions in Gabon through the purchase of Winnerpac Sdn Bhd from Landzen Developments Sdn Bhd, which in turn had secured the rights to the concessions from a Gabonese company, Societe Forestiere de Makokou (SFM). The deal includes three areas in all: 80,000 ha under a 20-year concession, 15,000 ha under a 10 year concession and 9,758 ha under a 7 year concession. The total marketable timber was estimated to be around 6 million cu m.¹⁹⁹

AKI stated that this acquisition would complement the activities of another subsidiary company, Caton Wood Industries Sdn Bhd in Malaysia, which manufactures plywood and veneer products, the Gabonese concessions ensuring a supply of logs for Caton's downstream processing operations in Malaysia. The deal would give the Gabonese company, SFM, 10% of pre-tax profits whilst the Malaysian company would get the remainder. AKI expected its subsidiary Winnerpac to be able to repatriate profits for the financial year to June 30 1998, subject to authorisation from the Gabonese finance minister.²⁰⁰

In April 1997, Caton Wood Industries was put into the hands of receivers due to the default on loans and banking facilities totalling RM22.5 million (US$9 million).²⁰¹ In June 1998, a Memorandum of Understanding was entered into between AKI and Landzen for the acquistion of SFM to be completed within six months, taking account of the Sale and Purchase Agreement signed in October 1996 and an independent valuation of the timber concession. ²⁰²

In December 1997, property-based Austral Amalgamated Tin Bhd was reported to have secured a 10 year timber concession in Cameroon, covering 60,000 ha. According to Mohd Karim, executive chairman of the company, the investment was seen as a cushion in times of slowdown and was expected to help boost group profits in 1998. It is not clear whether this deal went ahead or not. The group was also reported to be exploring opportunities in other African countries.²⁰³ Austral has a subsidiary called Million Quest Sdn Bhd, registered as a trader in logs, and another called Million Quest (Myanmar) Sdn Bhd, also registered in Malaysia.²⁰⁴

The Berjaya Group is a large, diversified conglomerate, including seven public and about 200 private companies, involved in gambling, textiles, tourism, hotels, financial services, industrial products, real estate and consumer marketing.²⁰⁵ It is based in Kuala Lumpur, and is controlled by Vincent Tan Chee Yioun. The company has gained a reputation at home for planning to build tourist resorts in ecologically sensitive environments, which have prompted environmental and public interest groups to launch two campaigns since 1990 against projects on Penang Hill (the project was cancelled) and on Redang Island (the project was reduced in size after ecological damage occurred).²⁰⁶

Tan Sri Vincent Tan has access to a number of significant political figures through some of his many companies. He took over the failed Tropical Veneer Company Bhd, which was in receivership at the time, and renamed the company Intiplus Bhd, bringing it under Berjaya's control. Datuk Haji Mohd Fatmi bin Haji Che Salleh was appointed as deputy chairman of Intiplus in March 1995, after the take-over. Salleh was a member of the Central Committee (EXCO) of UMNO Youth Malaysia,²⁰⁷ as well as having held various other official positions. Ramli bin Zahari, appointed as a director of Intiplus in 1995, was at the time head of UMNO Kuala Kangsar division.²⁰⁸ Danny Tan Chee Sing, Berjaya managing director, is one of the small group of new Chinese capitalists who are closely associated with leading Malay politicians²⁰⁹ and Jaffar Bin Abdul, appointed as a director in August 1997,²¹⁰ is the former Inspector General of Police. In November 1994, Berjaya Textiles Bhd was taken over by Rimbunan Hijau.

The Group attempted to move into logging in several countries in 1994. In May of that year, Berjaya's wholly owned subsidiary, Berjaya Group (Cayman) Ltd, acquired a timber company in Solomon Islands, Star Harbour Timber Company Ltd. In September 1994, Berjaya Group Bhd bought 60% stake of the Canadian timber company Taiga Forest Products Ltd and aimed at expanding Taiga's operations into the US. Taiga's main activity is as distributor of building products like lumber, roofing, moulding and insulation; the deal valued the company at about C$50 million.²¹¹ Also in 1994, the group started negotiations in Guyana and Suriname for access to vast timber concessions.

Berjaya Group Cayman bought Star Harbour Timber Company Ltd for US$1 million cash, giving Berjaya access to 45,000 ha concession at the price of only US$ 22.22 (RM 58.43) per ha, inclusive of the sawmill, compared to an average of US$1,000 (RM2,500) per ha in Malaysia (without sawmill).²¹²

Just a few months after the deal, the Managing Director of Berjaya Group (Cayman), Mr Tony Yeong resigned over allegations of an attempt to bribe the country's Commerce, Employment and Trade Minister, Mr Joses Tuhanuku. The Minister alleged that Mr Yeong attempted to bribe him with RM8,000 (US$3,200). The Minister refused the money and immediately informed Prime Minister Billy Hilly. Mr Yeong was asked to leave the country and resigned from the company. Mr Tuhanuku also said that Yeong insisted it was an accepted practice in the South Pacific, and indeed around the world, for a large company such as Berjaya to show its appreciation to those in government who assisted the company. Berjaya Group protested against the allegations.²¹³

Berjaya had proposed to invest US$60 million (RM157.8 million) in the country, in exchange for which the provincial governments of Guadalcanal and Makira agreed to grant an aggregate minimum of 600,000 ha of forest concession. The US$60 million investment was to be for building an integrated timber processing complex in the Solomon Islands.²¹⁴ It was later reported in Hong Kong that the company failed to raise the capital needed for the deal²¹⁵ and eventually withdrew from the Solomon Islands altogether, following disputes with local landholders. One landowner described their withdrawal in the Solomon's press, "Thank God Berjaya pulls out... this news brings relief to our souls".²¹⁶

The Berjaya Group has sought to invest in Guyana since 1994. The company requested a 700,000 ha concession in the New River-Upper Berbice area with a proposed investment of US$112 million. The company also sought exemption from withholding tax on dividends paid to non-resident shareholders and on interest payments paid to offshore lenders, exemption from export duties on all processed wood products, exemption from import duties on all materials used by the company, a fixed ceiling on corporate tax rates, fixed royalty rates for the entire life of the contract, deductibility of all interest payments, an accelerated depreciation allowance, unlimited use of foreign labour when needed, and investment protection guarantees.²¹⁷

No contract could be signed because the forest area in question was outside the State Forests and because the government—due to national and international pressure against the sell-off of the Guyanese forests—put a freeze on handing out of new logging concessions from October 1995. The moratorium is still in place.

However, in 1997, despite the fact that the Guyana Forestry Commission was still weak, the State Forests were extended by 4.6 million ha in the Southern part of the country and large tracts of forests were selected to be leased out as Exploratory Leases. Berjaya signed a memorandum of understanding with the Guyanese government for an exploratory lease in April 1997 for access to 760,000 ha of allegedly pristine virgin forest,²¹⁸ which are also claimed by the Macusi and Wapisiana indigenous peoples.

Significantly, Berjaya has been operating through another Malaysian company, Tenaga Khemas Sdn Bhd, which owns 87,850 ha concession in the Berbice River area. Tenaga Khemas also controls two other companies, UNAMCO and Case Timbers, and Mr Villupillai Kanagalingam (Tenaga Khemas' representative) confirmed that he is associated to Berjaya.²¹⁹ Berjaya therefore may hold, either in its own name or through its interests in Tenaga Khemas, Case Timber and UNAMCO somewhere around 1.5 million ha of forestry concessions in Guyana.

As soon as Vincent Tan put his feet in Suriname in 1994, he made Mr Surinder Mungra, the brother of Suriname's Minister of Foreign Affairs, the director of his Suriname company. Immediately afterwards, Berjaya applied for a huge concession of 1.1 million ha which was prevented from being awarded only due to massive national and international outcry. A considerable part of the area requested by Berjaya is inhabited by Amerindian and Maroon peoples, who felt severely threatened by the concession. This sparked great opposition by indigenous peoples, environmental and human rights organisations.

In February 1997, after the government announced that the 1 million ha deal was probably going to be cancelled, Berjaya requested a different logging concession of 150,000 ha. It now appears that Berjaya has been awarded three exploratory permits, whereby the company can conduct an inventory of forest resources and produce a management plan but is not allowed to log, totalling 300,000 ha.

According to a newspaper report, Berjaya was already busily chopping down trees in 1996, despite not officially owning concessions. This was made possible through Berjaya's director Surinder Mungra, who arranged for Berjaya's equipment to be employed on concessions that had been worked for dozens of years by small-scale Surinamese companies. When journalists visited a couple of these concessions, armed men overseeing the logging operations said that they were there to protect Berjaya's property. The names of Mungra and Berjaya were repeatedly heard despite the fact that the concession belonged to someone else on paper and that under Surinamese law it is forbidden to transfer timber cutting permits to third parties, with the risk of a punishment of immediate withdrawal of the concession.²²⁰

Kenneth Eswaran, a newcomer to the corporate scene, bought into Benta Plantations Bhd via a reverse-takeover, acquiring 31% of this company and 28.1% of Mun Loong Bhd. Eswaran's partner, who owned a further 30% of Benta, is Haji Ishak Ismail, of Idris Hydraulic²²¹. Benta changed its name to Best World Land Bhd and, in 1994, Eswaran was reportedly interested in a 250,000 ha timber concession in Southern Laos and was expected to sign a deal with the Laotian authorities at the beginning of 1995 and to undertake logging activities during that year.²²² The concession would allow logging for 6 or 7 years. Eswaran was reported to be setting up a new company, with both the listed vehicles in which he was involved (Benta—now Best World Land—and Mun Loong) investing 55% and 45% repectively in the new company. Total investment in the new concession was to be about RM60 million (US$24 million). Because the timber business was new to these companies, Eswaran was believed to be scouting around to hire timber experts.²²³ Best World Land Bhd sold its equity in Mun Loong Bhd at the end of 1995 for a loss, reportedly in order to concentrate on its core business of property development.²²⁴ It is not clear whether the Laos deal was successfully concluded or not.

Damansara Realty's main business interests are in steel mills, property development, timber and oil palm plantations. In 1993, KUB acquired a 15% stake in Damansara Realty (then called Kesang Corporation).²²⁵ KUB is an UMNO members' co-operative which functions as an avenue for party members to pool their resources for investment purposes. The Johor Corporation, the Johor state government's development agency, currently owns 42% of Damansara Realty and the State-controlled Employees Provident Fund is also a shareholder.²²⁶ Damansara Realty owns 32% of the Long Huat Group.²²⁷

Damansara has incorporated in Papua New Guinea as Damansara Forest Products (PNG) Pty Ltd. In 1995, the company successfully completed a deal which granted it access to 121,000 ha of lush coastal forests in Aitape, West Sepik Province: 30,000 ha were slated for clearfelling for the establishment of oil palm plantations and the rest were to be managed for selective logging. The export of logs began in July 1996.²²⁸ The company had no plans to establish any downstream-processing facilities in Papua New Guinea and logs were to enable Damansara's complex to increase its production.²²⁹

The Papua New Guinea deal was controversial even before it was approved, with the then Forest Minister, Tim Neville, warning the Government against the project, officially called Aitape Agro-Forest Pty Ltd. The Catholic Women's Association in Aitape also condemned the deal²³⁰ and there were claims that the genuine landowners were never involved in any negotiations, and that the deal was being hurried through.²³¹ The deal went through after Tim Neville lost his post, but local communities have been voicing opposition to the project on the grounds that they were not consulted and they were not ready to let a foreign company take over the forest. However, clearfelling started at the end of 1995 and logs were exported from Aitape in 1996.²³² In July, 1998, the Papua New Guinea logging operations were halted due to "adverse market conditions", and the company plans to terminate all logging-related agreements and hopes to recover RM4.5 million (US$1.2 million) through arbitration proceedings.²³³

General Lumber Fabricators and Builders Bhd (GLFB) announced in early 1998 that a company within the group, Rimyasa Development (PNG) Pty Ltd, had received approval from the Papua New Guinea National Forest Authority regarding a logging and marketing agreement with Basoma Holdings Pty Ltd. Under this agreement, Rimyasa was appointed to manage and undertake logging operations and marketing activities in respect of 9,800 ha of forest in Papua New Guinea. The timber permit area was extended for a further 10 years, commencing December 16th 1997, and Rimyasa's annual harvest quota is 120,000 cu m per year through the term of the timber permit. GLFB proposes to venture into sawmilling and other downstream processing activities in PNG.²³⁴ GLFB has substantial processing capacity in Malaysia through a number of its subsidiaries.

Idris Hydraulic and its subsidiaries are involved in a number of sectors, including property development, forestry operations and downstream processing. Idris owns various concessions in Keningau, Sabah, collectively known as the Sagisan Concession, totalling 256,000 ha. The concessions last for various periods, up to the year 2011. In order to efficiently exploit the concession, Idris entered into a joint venture agreement with Aokam Perdana Bhd in 1992 and there have been recent reports that these concessions will be transferred to Aokam as part of a rescue package for the latter company.²³⁵ In January 1997, 50% of the logs from the Sagisan concession were sold to Aokam and the remainder exported.²³⁶

Idris Hydraulic is managed by Ishak Ismail, who has been secretary for UMNO's Permatang Pauh division, under Anwar Ibrahim, deputy Prime Minister and Finance Minister. Ismail was also a director of KUB, an UMNO members' co-operative set up as an avenue for party members to pool their resources for investment purposes.²³⁷ KUB controlled Idris Hydraulic at one stage.²³⁸ Idris' Chairman, Tengku Ahmad Rithauddeen, is a former Minister of Foreign Affairs²³⁹ and former Defence Minister.

In December 1993, the company announced, after months of speculation in the financial world, that it was taking over a Myanmar plywood mill and forest concession of 3.4 million ha, in a joint venture with state-owned Myanmar Timber Enterprise. The mill was located in Monywa, in the Sagaing forest division. Forest studies by the Myanmar authorities indicated that the Sagaing concession had a good concentration of trees similar to meranti and had teak. ²⁴⁰ It was believed that Aokam Perdana would enter the deal on a 50:50 split with Idris. The deal appeared to be put on hold in 1994, as a result of a shake-up in the Myanmar Timber Authority.²⁴¹ The deal was reportedly progressing once more in January, 1995.²⁴²

In January, 1996, the company was reported to be considering timber concessions totalling 1.25 million ha in the Democratic Republic of Congo and Gabon.²⁴³ In June 1996, it was announced that Idris purchased a 51% stake in Societe Forestiere de Tchibanga for US$19.12 million. The Gabonese company has two forest concessions in Gabon, totalling 246,500 ha. The company's chairman, Rithauddeen, was quoted as saying that the group expected to produce about 6 million cu m over 20 years.²⁴⁴ Recent information puts Idris' holding in Societe Forestiere de Tchibanga at 48%.²⁴⁵ There is uncertainty surrounding the company's interest in the Democratic Republic of Congo.

Anscan International Ltd, a subsidiary of Idris, has signed two concession agreements with the government of Laos. Pursuant to these concession agreements, it was reported that Anscan was to develop a 468MW hydroelectric power plant, Xekaman 1, and a 500 kv transmission line, in the southern Attapeu province. Power generated would be sold to Thailand.²⁴⁶ The construction of the dam would flood 15,800 ha of relatively pristine forests, including the north-west boundary of the Dong Ampham protected area and also penetrates into it.²⁴⁷ The Xekeman river feeds into the Se Kong river, which is a major tributary of the Mekong. The dam is expected to have severe ecological impacts on these three rivers' fisheries. Among the social impacts, the dam necessitates the relocation of more than 1,100 ethnic minority people. According to an Asian Development Bank report, people of the Kaseng ethnic group claim to have been moved out during surveying of the site in 1994, long before any need for clearance. "If this is confirmed it seems probable that the absence of indigenous people in the area will be used to press for support for future development at the site, under the spurious grounds that there is no resettlement problem."²⁴⁸. It is unclear whether the company is still committed to this project or not.

Innovest is a real estate company which has ventured into logging in the last two years, with the acquisition of substantial forest concessions in Africa. The company has recently proposed a name change to Inter-Pacific Ventures Bhd, for which approval has been given, but the change has not yet been effected.²⁴⁹

In 1996, it was announced that Innovest had acquired a 95% share in a joint venture with a local government in Congo (Brazzaville) to exploit forest concessions covering 336,000 ha under a 25-year agreement. Under the terms of the agreement, the company is allowed to export logs in the first two years, after which it is expected to build a plywood mill and sawmill.²⁵⁰ A subsidiary has been established to operate the concession: Innovest Industries Congo S.A., 92% owned by Innovest Bhd, 5% by the state government of Mossendjo and 3% by an overseas investment holding company.²⁵¹

Logging was due to start in September 1997, with Malaysian staff being sent to start work in July and August 1997. The total number of staff was 189 in August 1997, expecting to rise to 290 by the end of 1997 and to 500 by the middle of 1998, according to the executive director, Tan Sri Mohd Shariff Ahmad. He said that the company would also recruit some Congolese staff, but did not say how many. He said production was expected to reach 100,000 cu m by the end of 1997, rising to 500,000 cu m by end of 1998. By the middle of 1998, all logs would be processed to sawn timber and exported to the US, Europe and Asia.²⁵²

In November 1997, the company announced that it also proposed acquiring Tremendous Portfolio Sdn Bhd, which owns a substantial timber concession of 1.14 million ha in the Democratic Republic of Congo. Innovest proposed acquiring the company (which had an indicative price of not less than RM75 million (US$18.75 million)) through a combination of equity and cash.²⁵³ In December 1997, Innovest announced that it was buying two timber concessions totalling 707,000 ha in the Democratic Republic of Congo for US$3.5 million. It is not known if the two deals are related nor if they were concluded or not. Through the latter deal the company would gain the right to harvest timber in the concession for the next 25 years, with an option to extend for another 25 years. Innovest Executive Director Datin Loo Chooi Ting stated that 50% of the purchase price would be payable to La Societa Cofoa SARL on the transfer of the concessions to Innovest and the balance when logging began. Under the sale agreement, the company would transfer to Innovest all the concession rights for the commercial operation, management and extraction of all species of timber and other downstream activities.²⁵⁴

The larger concession, covering 500,000 ha, is located in the central Democratic Republic of Congo region of Lusambo in Kasai province, the smaller 207,000 ha concession is in the Western region of Idiofa in Bandunu province. Loo said logging was expected to start in 1998. The initial extraction rate would be 350,000 cu m per year and the timber would be exported to USA, Europe and Japan. It was also reported that the company intended to expand into downstream activities and would build a 300 km tolled highway between Kinshasa and Matudi for "not less than $40million". It was reported that the company would collect tolls for 30 years, with the contract renewable for another 30 years.²⁵⁵

Innovest has downstream processing capacity in Malaysia through its subsidiary, IB Timber Industries Sdn Bhd (formerly Wemberly Holdings Sdn Bhd). It also owns Innovest International Ltd, which is a timber-related business registered in the British Virgin Islands.²⁵⁶

Kumpulan Emas Bhd's principal business prior to 1993 was engineering, plantation and oil palm consultancy and advisory services. In October 1993, the company acquired four Solomon Island forestry concessions via a British Virgin Island registered company (renamed Emas Pacific after the purchase). The four concessions are: Integrated Forest Industries Ltd. (holding a 158,174 ha concession in Makira Island), Rural Industries Ltd. (holding a 63,670 ha concession in Makira Island), Isabel Timber Co. Ltd. (holding a 234,000 ha concession in Santa Isabel Island) and Silvania Products Ltd. (holding a 10,299 ha concession in Vagunu island). Kumpulan Emas paid RM335 million (US$134 million) to buy the four companies. Rural Industries is dormant and Integrated Forest Industries ceased operating in 1996.²⁵⁷

At the time of the purchase, much was made about the potential of the concessions to contribute to group profits, despite Kumpulan Emas' lack of experience in the forestry sector: "Even companies with no experience in the timber industry have leapt onto the South Pacific logging bandwagon. Malaysia's Kumpulan Emas Bhd... has transformed itself within two years from an engineering group into a ruler of the rain forest".²⁵⁸

The prospective "injection of potentially lucrative timber assets into Kumpulan Emas will lift it from the doldrums and vastly enhance its earning profile".²⁵⁹ These predictions have proved correct and, according to company annual reports, the forestry operations in the Solomon Islands have been the primary source of profits for the group, including a profit guarantee.²⁶⁰ However, in the Solomon Islands, the company's operations are surrounded by controversy, becoming known for the environmental and social problems they have caused.

Between 1993 and 1995, Silvania Products Ltd (the most active of the concessionaires) had its operations suspended by the government on four separate occasions.²⁶¹ Several site reports have highlighted the severity of problems associated with Silvania's and Isabel Timber Company's operations:

In February 1994, government representatives visited a Silvania site and found extensive damage to tambu sites (protected sites of spiritual and cultural significance). These sites had been clearly marked by the company, as required by the Standard Logging Agreement and provincial ordinance, and therefore were easily identifiable to workers. However, as the report states, "it appears that the damage caused by the logging operation is the result of a lack of understanding of what the tambu site markers represent or else there is total disregard for these sites by those involved in the logging process".²⁶² The report made several recommendations, including better communication between Company management and other employees.²⁶³

In March 1994, a visit by representatives of the Ministry of Forests, Environment and Conservation, accompanied by Silvania staff, took place to Silvania operations where road-building and tree-felling operations were taking place. Again, significant criticisms of the operation were noted. The visitors were "appalled at the level of environmental disturbance taking place due to inexperienced and unplanned logging operations" and 11 contraventions of the Standard Logging Agreement were observed. The report states: "The poor state of Silvania's logging operations was attributed to a recent change of ownership resulting in inexperienced and unprofessional staff conducting an environmentally destructive operation" and recommended the immediate cessation of tree felling and new road building. The report stated that all staff needed training and roads should be upgraded, provided with drains and gravelled. "In summary, the environmental impacts of Silvania's logging operation on Vangunu are among the most serious observed to date in Western Province....An immediate consequence of the logging operation is deposit of silt in Marovo Lagoon from rivers flowing down from the eastern slopes of Vangunu Island. "²⁶⁴

On 11 August 1994, Silvania Products Ltd. received a letter from the country's Commissioner of Forests temporarily suspending its logging operations.²⁶⁵ According to an Australian press report, Silvania Products was alleged to be resorting to "illegal and highly damaging practices" in carrying out its logging activities. The company was reported to have exceeded the export quota, failed to protect waterways and coral reefs from soil erosion and failed to build a local sawmill. Solomon Islands' Forest, Environment and Conservation Minister, Joses Tuhanuku said that this was not the first time that Silvania's licence was revoked, its licence having been revoked twice by the previous Minister.²⁶⁶

In November 1995, Silvania's logging operations were suspended again by the Commissioner of Forests, along with those of Isabel Timber Company, for failing to construct adequate roads prior to felling operations.²⁶⁷

An Environmental and Social Impact Assessment carried out on behalf of local landholders in April 1997 detailed the severity of impacts of Isabel Timber Company's logging operations on a number of plots on Isabel Island. The report detailed numerous contraventions of both the Standard Logging Agreement (the official agreement setting out operating requirements) and the Code of Logging Practice (introduced by the government in 1996, with the assistance of the Solomon Islands Forest Industries Association). The report concludes: "The description in this assessment of a litany of poor forest management practices points to little prospect for commercially viable stands of timber trees being available for harvest on realistic scales within time frames relevant to human development regimes. The post harvest forest condition is such that long term degradation of flora, fauna and substrate have occurred and will continue to occur both within the logged-over forest areas and adjacent affected sites e.g. rivers, estuarine and marine areas including fringing reefs."²⁶⁸

In addition to severe ecological damage, social impacts have been caused by Isabel Timber Company's operations. The difficulties in identifying all relevant landholders to take part in negotiations caused division amongst communities and there were allegations that landholders were tricked into signing documents they did not understand. Verbal commitments by the company to provide clinics and schools were not fulfilled. There was also distress at the level of water resource degradation caused by the logging activities.²⁶⁹

Isabel Timber Company is 30% owned by a customary landowners' trust, making it the only subsidiary not 100% owned by Kumpulan Emas. In theory, this should ensure that, as a shareholder, the trust is paid a proportion of the profits from logging equivalent to 30% of the dividend declared by the Solomon Island company. No dividends were paid to the trust until 1996, after protest from the community.²⁷⁰

In the early 1990s, under the chairmanship of Wan Azmi Wan Hamzah, this timber company, formerly known as General Lumber Bhd, began a rapid and successful strategy of diversification into areas such as property development, shipping and financial services. However, the company still holds a number of forestry related interests, and reportedly expanded to overseas operations in recognition of west Malaysia's limited forest resources.²⁷¹

Wan Azmi is reportedly a close associate of Daim Zainuddin²⁷² (economic advisor to the government, former Finance Minister and treasurer of UMNO), and has been linked to Aokam Perdana Bhd through the joint ownership of other companies.²⁷³ Lim Thian Kiat, a director of Land and General,²⁷⁴ is also understood to be one of a set of new Chinese capitalists said to be closely associated with leading Malay politicians.²⁷⁵

By acquiring the British Virgin Island-registered investment holdings company Kinley Trading Ltd in 1995, Land and General gained control of an Indonesian timber complex and a log supply contract through Kinley's subsidiary, PT Wapoga Mutiara Industries. The complex has downstream timber processing and is in import and export trading. The log supply agreement amounts to 800,000 ha of forest at the Gulf of Candrawasih, Manokwari and Jayapura in Irian Jaya/West Papua. Part of the agreement included a profit guarantee for the first three years of US$13.5 million per year. The concessions are for a period of 20 years. ²⁷⁶

Conflicting reports have appeared concerning Land and General's investment holding company Overseas & General Ltd (OGL), and its proposed deals in Cameroon. The Star newspaper of Malaysia reported in July 1997 that OGL had acquired a 55% stake in Cameroon's Societe Forestiere et Agricole des Ruraux Africains SA.²⁷⁷ Financial analysts, GOH, reported in August 1997 that OGL had recently acquired rights to a 206,120 ha concession at minimal cost and would be setting up a 100,000 cu m capacity mill in Cameroon.²⁷⁸ It is not clear if these deals went ahead. According to the KLSE, in August 1998, the group owns 52.3% of Overseas and General SARL, which is registered in Cameroon, but this company's interests are listed as being "management and marketing".²⁷⁹

In 1991, Land and General acquired the forestry operation Cakara Alam in West New Britain, Papua New Guinea. It has access to 193,281 ha of timber permits.²⁸⁰ The company's operations saw a pre-tax profit of RM1 million (US$400,000) for the first half of 1997.²⁸¹ Cakara Alam has been dogged by controversy and is associated with poor environmental and social practices.

A report written by a former forester with Cakara Alam identified a number of breaches of the management plan for operations in the West Arawe timber area.²⁸² Breaches included undersized trees being marked for felling; roads constructed along the top of ridges resulting in soil erosion; failure to carry out post-logging site rehabilitation; logging on slopes above 30 degrees; snigging and hauling across rivers and creeks; failure to demarcate or establish buffer zones. "In rivers, silts and debris resulting from timber exploitation is evidenced on stones and river banks in all major rivers and streams".²⁸³

In February 1995, angry landholders closed off a logging area in protest at a breach of contract by Cakara Alam to build infrastructure, including an airstrip and wharf, in the West Arawe timber area, five years after logging started.²⁸⁴

Land and General has recently acquired a majority stake in the Fenning's Timber group, which specialises in sawmilling and kiln drying, with operations in Fiji and Australia.²⁸⁵

Lien Hoe started out as a building and construction materials manufacturer in 1969 but enjoyed only modest success. In early 1994, the company started to diversify via the acquisition of North Sumatera Timber Sdn Bhd, a small timber moulding plant complete with long-term log supply contracts covering 180,000 ha of forest in North Sumatra, Indonesia.²⁸⁶ Lien Hoe also owns 70% of Indonesian company PT Budi Tri Sakti, which manufactures timber mouldings.²⁸⁷

In 1997, it was reported that Lien Hoe owned 51% of Carlton Resources, a logging company with a 25 year logging concession covering 152,000 ha in Liberia. The company made the deal in 1995, paying US$2.50 per ha, but production was disrupted due to political unrest in the country. Logging resumed in November 1996 and the company was forecasting that profits would start coming in by March 1997.²⁸⁸

Long Huat Group Bhd has recently been trying to expand its core business of manufacturing timber products to include logging, housing and shoe manufacturing. After recent restructuring of the Long Huat Group, the single largest shareholder is Damansara Realty Bhd.²⁸⁹ In early 1996, it was due to start operations on its 4,860 ha concession in Sabah, providing the group with 200,000 cu m of timber over the coming three years. Although the concession was for five years, the chairman Datuk Lew Sip Hon, said that logging would be completed in three or four years' time.²⁹⁰

In addition to the Sabah concession, Long Huat announced in 1997 that it was in the process of acquiring a logging concession in Papua New Guinea through the purchase of Landwell Resources Pte Ltd.²⁹¹ Long Huat Group Bhd proposed to buy Unicorn Timber Industries Berhad (UTIB) and a 41% equity interest in Landwell (a 51% owned subsidiary of UTIB) as well as a 30% equity interest in C-Dragon (70% owned subsidiary of UTIB). Landwell was incorporated in Papua New Guinea in 1989, and its principal business is logging and sawmilling. C-Dragon was incorporated in Malaysia in 1993, and is a timber processing company. The major shareholders of UTIB, Landwell and C-Dragon were to enter into a profit guarantee agreement with Long Huat, providing a profit guarantee in each of the 3 financial years 31/8/99-2001. The application for this scheme was to be submitted to the Securities Commission at the end of December 1997.²⁹² Business Times of Malaysia commented on December 31st 1997 that the company was looking at ways to finance the acquisition of Landwell with its merchant bankers. The company was said to be looking at the pricing of the new issue and the rights issue proposed earlier. According to the Managing Director, Wong Chong Leong, the company still hoped to proceed with its plans, despite the current constraint on credit facilities, as it is an export-based company.²⁹³ It is not clear whether this deal is still pending or has been aborted. ">

Rimbunan Hijau (RH) is headed by Datuk Tiong Hiew King (left), one of Asia's largest timber tycoons.²⁹⁴ Forbes Magazine estimated the Tiong family worth to be US$2.5 billion.²⁹⁵ The group controls both listed and unlisted companies. In order to gain access to the Kuala Lumpur Stock Exchange, Rimbunan Hijau undertook a reverse take-over of Berjaya Textile Bhd in November 1994, renaming the company Jaya Tiasa Holdings Bhd. The Tiong family retains control of approximately 30% of Jaya Tiasa.²⁹⁶ The other listed vehicle is Subur Tiasa Holdings Bhd.

The group has a number of high level political connections: Mohamad Arip bin Mahmud, the brother of Sarawak's Chief Minister (who controls the allocation of logging concessions), was appointed as a director of Jaya Tiasa on 13/4/95;²⁹⁷ a sister of the Chief Minister is also one of Tiong's business partners.²⁹⁸ Other directors of Jaya Tiasa include Tiong Thai King (Tiong's brother), who is a member of the Malaysian Parliament,²⁹⁹ and Abu Talib bin Othman, former Attorney General.

Tiong is said to control an estimated 800,000 ha of logging concessions in Sarawak and his family dominates the logging industry in Papua New Guinea.³⁰⁰ The company has also acquired forestry operations in Brazil; Cameroon; Equatorial Guinea; Gabon; Vanuatu, New Zealand and the Russian Far East. Other subsidiary company operations include a US$58.5 million soft-wood plantation development in New Zealand, a sawmill in Shanghai, a cattle ranch in Australia, property in Singapore, as well as interests in banking, newspapers and oil-palm plantations. Rimbunan Hijau also owns a 40% share in Limbang Trading Sdn Bhd, which has a 310,000 ha concession in Sarawak until 2009 (55% of Limbang is owned by Sarawak's Minister for Environment and Public Health, James Wong Kim Min).³⁰¹ Recent rumours suggest that Rimbunan Hijau owns, or is in the process of acquiring, Primegroup Holdings, a company registered in British Virgin Islands with logging concessions in Guyana and Papua New Guinea.

Rimbunan Hijau's operations in Sarawak have brought the company into direct conflict with indigenous people over land rights issues. For example, in 1987, Kayan villagers in Uma Bawang erected a blockade in protest at the activities of Marabong Lumber Sdn Bhd, one of the Tiong family concerns, which was polluting the waterways and threatening their livelihoods. 42 farmers were arrested, but later released after prosecutors dropped all charges against them;³⁰² In 1993, complaints were made to Sarawak officials regarding damage to fruit trees and farm lands caused by Rimbunan Hijau Sdn Bhd.³⁰³

Rimbunan Hijau has become the largest timber operator in Papua New Guinea and, through a complex and opaque network of companies, is estimated to control between 50 and 80% of Papua New Guinea's timber production,³⁰⁴ with concessions estimated at nearly 2 million ha.³⁰⁵ In 1992, the annual turnover of Rimbunan Hijau companies in Papua New Guinea was estimated at K700 million (US$722 million) out of the country's K800 million timber industry.³⁰⁶ Rimbunan Hijau set up a newspaper to strengthen its position in the country, providing itself and the industry with favourable media coverage.³⁰⁷

Many claims of environmental degradation have been levelled against Rimbunan Hijau and its subsidiary companies in PNG. For example:

§ After a site visit to RH subsidiary Niugini Lumber's operation in LAK TRP, Dr Franz Arentz, a forestry specialist, remarked that this was the worst example of tropical forest logging he had seen anywhere in the world;³⁰⁸

§ An official report documented that staff operating in some sites were not aware of the company's commitments in its own Environmental Plan nor that they had a copy of the Plan available on site. The report by the Department of Environment and Conservation recommended that subsidiary, Nuigini Lumber, be prosecuted for breaches of its environmental plan.³⁰⁹ Virtual clearfelling of some sites on steep slopes over 25 degrees led to sheet soil erosion and there were also cases of fuel-oil widely contaminating logging camp sites and washing into nearby marine environments;³¹⁰

§ Complaints have also been made about employee welfare. In a report from a follow-up sanitary health inspection of camps 1 and 2 in their Aria Vanu operation, the health inspector stated that RH had "totally neglected the recommendations specified in the [previous] inspection report of 8/12/93". The letter covered recommendations concerning sanitory facilities, water supply, overcrowded and poor housing, a lack of safety equipment and a number of other matters.³¹¹

Allegations of illegal activities against RH include:

§ RH subsidiary Pacific Logging's illegal logging within the no-logging zone around Port Moresby;³¹²

§ Pacific Logging's operation in Vanapa was found to meet only 3 of the 26 conditions of its own environmental plan, a plan that itself had not met any of the preliminary conditions of PNG government approval in the first place;³¹³

§ RH subsidiary New Guinea Lumber excavated live reef for use as road and log pond surfacing. The same company was fined US$30,000 for harvesting in a concession for 18 months without being registered. It was estimated that the company had exported US$48 million worth of logs;³¹⁴

§ In March 1997, the Governor of Milne Bay (and former Forest Minister), Tim Neville, confirmed that Saban, a contractor of Rimbunan Hijau, was caught exporting rosewood logs, which are a prohibited export in log-form in Papua New Guinea.³¹⁵

In March 1994, Forest Minister Tim Neville and a film crew from the Australian documentary programme 'Four Corners' who were making a documentary on Rimbunan Hijau caught the company 'red handed' with piles of undersized log on the dock awaiting export.³¹⁶

As illustrated in the political section (see above), the timber industry has had, and continues to have, great influence on the political processes in the country, including the development of forest legislation. It has been alleged that RH has chartered planes, paid hotel bills and arranged for selected landowners to lobby against the First Forestry Act in East New Britain.³¹⁷ The company has publicly lobbied against the raising of taxes, stating that companies would have to look to Africa and Latin America if higher operating costs were incurred in PNG.³¹⁸

At the beginning of 1997, Francis Tiong, head of the Rimbunan Hijau operations in Papua New Guinea, was appointed to the board of the National Forest Authority, the agency charged with monitoring forest management in the country, due to its position as president of the Forest Industries Association. Due to the clear conflict of interests of Mr Tiong, the Papua New Guinea Forest Owners Association threatened to stop all logging operations in the country if landowners were not represented on the National Forest Authority Board.³¹⁹

In June 1998, Rimbunan Hijau was reported to be shipping K6 million (US$2.4 million) of equipment to Russia, due to poor market conditions and lack of government support (see below).³²⁰

In Cameroon, Rimbunan Hijau's subsidiary, Shimmer International, is the contractor for the MPL (since 1995) and CAFECO (since 1996) concessions, of 114,650 ha and 26,200 ha respectively. Both concessions are part of the Korup Project area, which is intended to conserve the Korup National Park. All of the timber was reported to be exported as logs to Asian and European markets.³²¹ MPL is currently not operational. Rimbunan Hijau has other interests in Cameroon, and Shimmer itself is divided into many subsidiaries within the country, a structure which "is by its nature susceptible to evade the Cameroonian law which limits the concession size to 200,000 ha by company".³²²

The suitability of these two areas for timber exploitation was called into question by an Environmental Impact Assessment (EIA) of the concessions undertaken in February 1997, which states that these two concession areas "cannot be considered appropriate for timber exploitation". The report found that "the actual timber exploitation is not sustainable at all" in these two concessions, and that the concessionaires had no management plan in place.³²³ A number of environmental impacts were identified in the report, including:

§ construction of roads on steep slopes, resulting in considerable erosion; high density of large roads and skidding trails leading to opening of the forest canopy;

§ road construction of a poor quality thus liable to require major reconstruction at a later stage;³²⁴

§ poor felling techniques; enormous waste of valuable timber;

§ a lack of limitations on timber harvesting, either in terms of number of trees or volume of cu m to be extracted per ha.³²⁵

Neighbouring trees were felled and the canopy was opened up or even completely destroyed over large areas³²⁶ leading to soil erosion, particularly during periods of heavy rainfall.³²⁷

Although the two concessions provided unskilled jobs for locals, who were initially happy to have roads, there are negative social impacts associated with the logging. The MPL and CAFECO forest concessions are inhabited by 7-10,000 local people belonging to four tribes, and nearly all villages have a mixed subsistence and cash economy, with hunting being part of the regular routine. Fishing is also an important part of life, mainly for the women, and impacts on streams through erosion threaten this traditional food source. Forests and fallows are needed by all villagers to provide subsistence and income, a source of potential conflict with logging operations. Non timber forest products were reported to be under threat, and highly economic trees used by the villagers were disappearing. Safety measures for workers were deemed inadequate by the survey team.³²⁸ The team also anticipated social unrest as infrastructure development was seen to be unsatisfactory or inadequate to the local people's needs.³²⁹

Shimmer is also operating in Equatorial Guinea. In 1996, it produced 115,000 cu m of logs out of a total for the country of 471,000 cu m and forecasts for 1997 were that it could produce 400,000 cu m.³³⁰

Rimbunan Hijau are reported to be operating in Gabon.³³¹

Santo Veneers and Timbers Limited and Pacific Veneers were acquired by Rimbunan Hijau in 1994. Santo Veneers is the main operator in the country, logging on Santo Island. Vanuatu has a log export ban and Santo Veneers has invested in a massive sawmill in Luganville. The sawmill has a processing capacity of 50,000 cu m per year.³³²

The Santo Veneers operation has been a source of conflict with local landholders since it started operating. In 1995, locals burned a Santo Veneers bulldozer in protest at the company logging in an area for which they had no contract. The supreme court acquitted the local family concerned "after hearing evidence that Santo Veneers and Timbers Limited were logging in an area where they had no contract and continued to log the area even after the burning of their bulldozer and a court injunction not to log there".³³³

Recent unconfirmed reports indicate that the company's activities on the island of Santo remain controversial:

§ An official inspection visit on one occasion in 1997 identified trees which had been cut illegally;

§ the company is believed to be entering into contracts after having identified only a few of the legitimate landholders, rather than all of them as required by law;

§ there are also believed to be other contractual irregularities and reports of logging in protected areas.

According to the 1998 report of the Brazilian congressional hearing on the activities of TNCs in the Amazon, Jaya Tiasa Holdings Bhd created a Brazilian subsidiary Verde Vivo Ltda, a holding company under the presidentship of George Fan Yin Yon, which in turn set up Verde Compensados S.A. to handle its timber operations. Verde Vivo Ltda is also interested in establishing oil palm ventures in Brazil. Verde Compensados S.A. took control of two Brazilian companies, Maginco Compensados S.A. and Selvaplac Industria Madeira do Para Ltda, and created 2 further enterprises, in partnership with Brazilian interests, Maginco Verde S.A.(constituted on the 1st April 1997) and Selvaplac Verde S.A (constituted on the 4th April 1997). The total area under the control of the group is 53,997 ha, situated in the state of Para. The Brazilian companies acquired by the group all had records of infractions, suspensions of operations or land tenure conflicts.³³⁴

Rimbunan Hijau have been awarded a 48 year lease agreement in the Russian Far East for harvesting over a 305,000 ha area. The annual allowable cut is 550,000 cu m. The company has said it will invest in downstream processing facilities in the region but the initial focus will be on the export of logs. The concession is located in the Sukpai watershed in the northern part of the Sikhote-Alin mountain range in the Khabarovsk region. This project is expected to be controversial because the forests are habitat for the Siberian tiger and are part of a "Territory for Traditional Natural Resource Use" for local indigenous peoples.³³⁵ In June 1998, the Rimbunan Hijau owned 'National' newspaper in Papua New Guinea reported that the company was sending some K6 million (US$2.4 million) worth of plant and equipment to Russia, including construction, road building and logging equipment, because of the low log prices on the regional log market for tropical hardwood and lack of Papua New Guinea Government support for the industry.³³⁶

The Sarawak-based Samling Group of companies was founded by Datuk Yaw Teck Seng in the early 1960s. Operating from the town of Miri, the group started with three concessions from which it expanded to the point where it controls 1.5 million ha of forest concessions in Sarawak, another 1.69 million ha in Guyana and almost 800,000 ha in Cambodia. In November 1993, the group succeeded in taking control of Lingui Developments Bhd, which became its main listed vehicle. Some securities analysts view the Samling Group as the country's largest and most aggressive fully integrated timber group. The group's other overseas business stretches to Japan, Taiwan, South Korea, the US and Canada.³³⁷ The Samling group of companies are still controlled by Datuk Yaw Teck Seng and Yaw Chee Ming, father and son (left) respectively.³³⁸

Samling's logging operations in Sarawak have been highlighted by forest peoples' communities as having been destructive and disrespectful of their livelihoods in many instances. The most recent occasion was in March 1997, when about 70 Penan, a nomadic hunting and gathering people whose traditional livelihoods almost totally depend on forest products, went to the Samling Plywood (Baramas) Sdn Bhd and Samling Timber Sdn Bhd companies to protest about the destruction of their forests and to hand over a letter petitioning the companies to cease operations on their ancestral land. Instead of meeting with company representatives, the Penan were met by a group of the Police Field Force, armed with machine guns, tear gas and knives, who verbally abused the Penan and then assaulted and beat them with machine gun butts, boots and knives. Four of the Penan were then arrested by the police for allegedly damaging company machinery. The four were seriously ill-treated in jail and then charged on a technicality of 'illegal assembly' before being released to await trial. The case is still pending.

In a joint venture with the Korean Sung Kyong group, Samling Strategic Corporation Sdn Bhd set up a locally-incorporated consortium, the Barama Company Ltd (BCL), in Guyana. Samling controls 80% of the company. In October 1991, Barama was granted a 1.69 million ha forest concession in the North-West of Guyana that by itself is larger than all the indigenous peoples' titled land in the country.³³⁹

The agreement between Barama and the Guyanese government grants the company a 25 year licence (automatically extendible for another 25 years) to log the concession for export of raw logs, sawn lumber, veneer and processed plywood. The company enjoys a ten-year exemption from income tax, corporation tax, withholding tax, consumption tax, property tax, most import duties and timber export taxes. The royalties have been fixed in Guyanese dollars over the first 20-year period with no provision for adjustment as inflation devalues the currency.³⁴⁰ Estimates based on data provided by the company itself and the Guyana Forestry Commission show that Barama pays the equivalent of less than 1% of the value of the goods exported in taxes,³⁴¹ resulting in very little gain for the country.

Barama is alleged to have set up an extensive patronage network in Guyana. The late President Jagan's Asian fund-raising tour in 1993 was financed by the company; Barama also paid for fencing the President's residence in the capital Georgetown; it took on the ex-head of Guyana's Natural Resources Agency as a consultant. He had previously negotiated the original Timber Sales Agreement with Barama on behalf of the government, .³⁴²

An environmental assessment of the concession by the Edinburgh Centre for Tropical Forests (ECTF), contracted as a consultant by the company, concluded that 'timber harvesting may not be biologically sustainable at planned extraction levels'³⁴³ and that this was a major risk that "could potentially jeopardise the objective of the entire BCL programme".³⁴⁴

Although it is recognised that Barama addressed environmental problems through the ECTF study, complaints have been filed stating that pollution of river downstream of one of Barama's log ponds is responsible for health problems among local residents.³⁴⁵

Those who are set to suffer most as a result of the Barama concession are the indigenous forest people. The concession overlaps the lands of an estimated 1,200 Amerindians, including four communities with titles and land proposed as a reserve for the Carib people by the Lands Commission in 1969. The concession also encloses a large number of Amerindian homesteads without land titles, scattered along the main rivers. ECTF, which visited the area in 1993, reported some potentially serious negative impacts of BCL's operations, including the reduction or elimination of traditional food, shelter and other forest resources of local communities; increased hunting; wildlife trade; illegal timber felling; social conflicts over jobs; split communities; culture shock for remote communities; pollution from chemical spills; and introduced diseases.³⁴⁶

The Amerindian Peoples Association (APA) has strongly criticised the way in which the concession was awarded: no consultation with the indigenous communities and no respect for the Amerindians' land rights. Since 1993, the organisation repeatedly called on the Minister for Amerindian Affairs to review the contract and subsequently called for an international boycott of Guyanese timber. At that point, the Minister promised to institute a Commission of Enquiry to review the Amerindians' claim and the Barama contract, but up to now the promise has not been honoured. Meanwhile, Amerindians near the logging camps have also complained to the Ministry about illnesses caused by the pollution of their waters, forced resettlement, the bulldozing of crops, low wages, delayed payments and lack of injury benefits.³⁴⁷

In November 1994, a field survey conducted by the World Rainforest Movement in co-operation with the APA in the concession area, revealed that dozens of communities of Amerindians, both Caribs and others of mixed descent, living in scattered groups throughout the concession, were hearing for the first time about the Barama contract. They were obviously upset and unhappy to learn that they now lived within a logging concession belonging to a foreign company. Most of them did not have land titles despite having claimed land ownership over the land they inhabited for generations. A small Amerindian community of Oronoque, which established a co-operative and planted fruit trees on a 40 ha piece of land allocated to them in 1966, was relocated in 1991 to make way for Barama's log pond and office complex. Those affected claim that they have not yet received compensation for the fruit trees and the land promised to them. They now live in tiny lots of untitled land in poorly constructed wooden houses mostly without water pipes. They also allege that their graveyard was desecrated, some of the graveyard bodies were accidentally bulldozed up by a BCL worker and clumsily reburied in a single grave.³⁴⁸

In December 1994, the APA called on the Government to establish a small Amerindian Land Commission to survey the Barama concession more completely, to assess the Amerindian land claims and to legalise their land ownership and to require the logging operations to stop activities in the vicinity of the communities.

In June 1997, the Carib people of Port Kaituma lodged a petition against the exploitation of their people by Barama to the country's president.

In August 1994, SL International Ltd, a Samling Group company, signed an agreement with the Cambodian Government giving the company two timber concessions totalling 787,000 ha to log and manufacture downstream wood products such as plywood. One of the concessions, covering 464,000 ha, is located in Kratie, Mondul Kiri and Kompong Cham Provinces, while the other, of 323,000 ha, is in Koh Kong and Kompong Speu Provinces. Construction of Samling's huge sawmill (the site covers about 2 square km), located close to Highway 1 to Vietnam, 12km from the Neak Loeung ferry crossing, started in early 1995 and is now operational.³⁴⁹ Samling have also recently acquired the former 54,784 ha concession area of the Cambodia Timber Company in Kampot. This concession area is close to Bokor National Park, with the possibility that 15,000 ha overlaps the park boundaries.³⁵⁰

As with the allocation of other concessions in the country, there was controversy surrounding the awarding of the Samling concessions. The terms of the contract are extremely favourable, granting the company an eight year tax holiday and a 60 year concession. Furthermore, charges payable to Cambodia by the company do not reflect the true value of the timber and no effective reforestation strategy is included. A draft management plan was submitted to the Forestry Department but was not approved because, among other things, it did not satisfy sustainability requirements of the 1988 Forest Management Law.³⁵¹

After completing the access road for logging in one of their concessions, Samling refused to allow locals to travel along it, destroying one of the central positive claims put forward on behalf of Samling's operation, namely, that the road would open up the province to the local populace, and bring development. Locals have only been able to use the road following pressure from the Provincial Governor. Locals are also prevented from collecting timber, both for firewood and for building. Promised levels of employment have not been realised, with many Vietnamese being hired in place of Khmers.³⁵²

The pressure group Global Witness have received reports that Samling were buying illegal timber (nearly exclusively deluxe quality) from army units in Military Region No.2, and from local people, much of it cut in the Snoul Wildlife Sanctuary. In addition, Samling were alleged at one stage to be paying the Khmer Rouge US$350 per truck per month in order to remove logs from the concession.³⁵³

Minister of Agriculture Tao Seng Huor wrote to Mr Han Chen Kong, the Director of SL (Samling) International in April 1997³⁵⁴ stating that Samling were guilty of:

§ Starting to cut before receiving a permit.

§ Cutting in areas not permitted by Forestry Department officials.

§ Cutting undersized logs.

§ Continuing exploitation despite the logging ban which came into effect on 31st December 1996.

There are a number of unconfirmed reports of negotiations between Samling and forestry ventures in Brazil. These include a possible joint venture with the Chinese company Tianjin Fortune Timber and the government of China (16,850 ha), the acquisition from North American interests of AMACOL, covering ownership of 76,844 ha and access to a further 400,000 ha belonging to third parties (negotiations suspended or not concluded). There are also unconfirmed reports that the company was trying to buy 500,000 ha of land.³⁵⁵ (Brazilian congressional report, 1997).

Samling-controlled Glenealy Plantations (Malaya) Berhad owns 100 % of the following companies: Hikurangi Forest Farms Limited, Tasman Foresrty (Gisborne) Limited and TreeOne (NZ) Limited.³⁵⁶

The principal activities of TimberMaster are provision of management services and investment holding. It is involved in manufacturing, trading and exporting doors, frames and timber-related products. In 1995, it diversified into manufacturing plywood, veneer, sawn timber and acquired a timber concession of 12,100 ha.³⁵⁷ TimberMaster's Keningau (Sabah) complex has a production capacity of 12,000 cu m per month, but in early 1997 was running at only 10,000 cu m per month. TimberMaster was reported to be expanding into African countries due to restricted availability of logs in Malaysia and Asia Pacific as a result of tightening government controls.³⁵⁸

In 1996, TimberMaster's British Virgin Islands subsidiary, TimberMaster Group International Ltd, signed a joint venture agreement with the Madagascar Development Corporation for an 80% stake in a joint venture to secure up to 500,000 ha of forest resources³⁵⁹ through the setting up of a subsidiary, TimberMaster Industries (Madagascar) Limited.³⁶⁰ The Madagascar government are reported to offer numerous incentives to draw foreign investment. The TimberMaster joint venture comes with a 7 year tax free status and the purchase price of RM20 million (US$8 million)was considered low by analysts, who therefore anticipated a good contribution to the company's profits from this deal.³⁶¹

A Memorandum of Understanding has been signed with the Malawi government for a 60% stake in a joint venture which includes 120,000 ha of pine plantation and plywood and furniture manufacturing facilities.³⁶²

In early 1997, the company acquired a 220,000 ha timber concession in Gabon through the purchase of Bois et Scierie du Gabon for US$17.6 million (an estimated RM 50 million i.e. RM40(US$14)/ha) from Dushan Holdings Ltd. This was considered a very good deal for TimberMaster since the assets of machinery etc. were valued at US$11 million. Bois et Scierie du Gabon is involved in forestry exploitation, sawmilling and trading of wood, including log exports. The timber can be harvested over a 17 year period.³⁶³

In addition to the above deal, it was reported in April 1997 that TimberMaster was believed to have secured the rights to log a further 1 million ha in Gabon, next to the existing 220,000 ha site, about 150km from Libreville. This new agreement was estimated to provide 300,000 cu m per year and the company secured the rights via arrangements made with over 100 local residents who hold timber concessions, or 'family cut' concessions in the Njolie area. The Star newspaper in Malaysia quoted a source close to the company, who claimed the site comprises virgin forest and can be logged over a five year period. Extraction rates were expected to be 25,000 cu m per month, rising to 50,000 cu m per month in 1998. In April 1997, the company had a staff of 270 in Njolie and 62 units of heavy machinery.³⁶⁴

The 1million ha Gabon deal was expected to contribute around US$9 million (RM22.5 million) net profit. It was reported that a nominal tribute would be paid to the concession holders per cubic metre of timber logged on their land. The company apparently committed to investing US$30 million (RM75 million) to set up an integrated timber complex at Port Gentil, Gabon's second largest port.³⁶⁵

The current status of the various African ventures is unclear, with a recent search showing no African-based subsidiaries listed to TimberMaster and the British Virgin Islands-registered subsidiary, TimberMaster Group International Ltd, being dormant.³⁶⁶ A recent announcement to the Kuala Lumpur Stock Exchange suggests that a Gabon deal has been aborted.³⁶⁷

The WTK Group is the oldest of the big five Sarawak timber giants. It is owned by Datuk Wong Tuong Kwang, the maternal uncle and logging tutor of Datuk Tiong.³⁶⁸ The group is managed by two sons of Wong Tuong Kwong: Wong Kie Yik and former Senator Wong Kie Nai. They are both prominent financiers of James Wong's Sarawak National Party (SNAP), Wong being the Minister of Environment. WTK holds huge logging concessions in Sarawak totalling about 400,000 ha.³⁶⁹

WTK Holdings Bhd, the KLSE-listed wing of the group, requested a 6 month extension from the Securities Commission for the purchase of 11 timber companies at the end of last year but did not indicate why.³⁷⁰ The deal included a pre-tax profit guarantee of RM126.6 million (US$31.6 million) per year for 3 years. The companies concerned, and now listed as subsidiaries of WTK Holdings, were: Cairnfield Sdn Bhd; Gopoint Sdn Bhd; Sarawak Moulding Industries Bhd; Woodbanks Industries (M) Sdn Bhd; Kuching Plywood Bhd; Sanitama Sdn Bhd; Limpah Mewah Sdn Bhd; First Count Sdn Bhd; Song Logging Co. Sdn Bhd; Ninjas Development Sdn Bhd; Sut Sawmill Sdn Bhd. The list includes concession holders in Sarawak and downstream processing and marketing companies³⁷¹. More recently, on 22/6/98, the Board announced that the High Court of Malaya had granted it a 60 day restraining order to stop creditors and others from taking court action including winding-up proceedings.³⁷²

WTK's main activities overseas have been in Papua New Guinea, where WTK Realty has been operating a 287,000 ha concession in Vanimo, Sandaun Province (West Sepik) and elsewhere in the country.

WTK logging operations in Sarawak have encountered resistance by indigenous people since 1986. The Penan of the Magoh-River region were threatened and intimidated when they started refusing small gifts from the company in exchange for permission to log in their area. Penan and Kelabit people were arrested in 1986-87 for blockading logging roads serving WTK logging operations. Local people have also complained that WTK is responsible for the destruction of a number of significant cultural and spiritual sites such as graves and for the decimation of important tree species used for making dart poison and many important fruit trees which form part of the staple diet for the people of the region.³⁷³

Local reports in 1995 highlighted severe environmental and social problems caused by WTK's activities. During the same year, the Vanimo Landowners Association urged the Minister of Forests to undertake an urgent review of the Project Agreement signed between the State government and WTK, "before PNG's forests and natural environment is completely destroyed under the dictatorship of the foreign contractor company WTK Realty". The Vanimo Landowners Association highlighted the fact that the company had breached the Project Agreement on several grounds, including forest destruction, soil erosion and water pollution, total disrespect of indigenous people. Even the legality of the deal between WTK and the company which previously owned the concession was questioned. The Landowners' Association called for the termination of the contract as WTK had clearly failed to comply with the Agreement and the conditions in the timber permit.³⁷⁴

In April 1997, WTK was reported to be pressing for a new concession in the Whitemen ranges, an area of high biodiversity priority in West New Britain Province. Andrew Baing, the pro-logging Forest Minister let the Forest Board know that he wanted WTK to get the timber permit in the Asengseng Forest Management Area. Originally, the Government had said that there was to be no logging in that area because of ecological priority and the morphology of the area, which has slopes steeper than 30 degrees. Any logging in that area would breach the Logging Code.³⁷⁵

WTK Group has aimed to establish itself in the state of Amazonas through two operations, the acquisition of the company Amaplac, which has downstream processing facilities near Manaus, and through buying a large area of forested land in Carauari municipality of 313,719 ha. In March 1996, both Amaplac and the company WTK Brasil Florestal (established in December 1995) were taken over by Datuk Wong Kie Nai, Wong Kie Chie, Wong Kie Yik and Wong How Yeong.³⁷⁶

In fact the purchase of land by WTK has been the subject of some confusion, with reports stating that the company was buying 1.2 million ha of forested land but discovered that 900,000 ha of that was indigenous land and had to be returned.

According to the Malaysian Ambassador to Brazil, WTK has purchased a sawmill and about 300,000 ha of timber concession in a remote area of Amazonas State. The area was said to be situated between the Jurna and Purus River, not far from the borders with Peru and Bolivia. However, a WTK official refused to confirm the deal and said the company had not yet started any timber activities in Brazil.³⁷⁷

Atlantic Industries has been granted a logging concession covering 80,000 ha in traditional Maya land in Belize. Atlantic is reported to be a subsidiary of a Malaysian company but the actual owners have not been identified. The concession is located in the Columbia River Forest Reserve and was bought for the reported sum of US$1.50 per ha. The concession overlaps the lands of 10 Maya villages, who have strongly protested the hand-out of concessions on their lands and are actively fighting to get the concession withdrawn. However, Atlantic has already built one of Central America's largest sawmills on Maya land—over the protest of the Maya and without the Environmental Impact Assessment required under Belize law.³⁷⁸ The company is also reported to have cut forest outside the concession area and taken out trees during the rainy season, accelerating soil erosion.³⁷⁹

In May 1995, it was reported that Chew Piau signed a Memorandum of Understanding with Eastern Era to work three concession areas totalling 507,300 ha for a period of 90 years in Papua New Guinea. 30% of the area was to be developed into oil palm plantations and the proposed venture included setting up an integrated industrial complex for the down-stream processing of logs from the concession areas. Chew Piau would hold 51% stake in each of the joint venture companies established to operate in the concession areas.³⁸⁰

ZimMal Holdings is a joint venture between Development Trust of Zimbabwe and a Malaysian company, chaired by Dr Hassan Ali, called Hasedat. Sources told the Zimbabwe Independent that in return for putting up 12,000 houses in the Matabeleland, the Malaysian investors were given logging rights covering 50,000 ha of both Forestry Commission and indigenous communal land under forest. The newspaper also reported that Malaysian businessmen visited the northern part of Matabeleland, which is rich in teak, mukwa and mahogany.³⁸¹

KTS, headed by Datuk Lau Hui Kang,³⁸⁷ has bought the company Carolina Industria and Comercio de Madeiras Tropicais Ltda, based in Itacoatiara, Amazonas state, Brazil, from interests in the Cayman Islands. Carolina has forest management plans covering 15,400 ha, but these are currently suspended for being in the Abufari biological reserve. There are also unconfirmed reports that KTS has bought around 400,000 ha of forest in the Vale do Rio Madeira.³⁸⁸

In 1997, Mafira entered into a joint venture with Kwitaro Investments, the first company to have signed a Memorandum of Understanding with the Guyanese government for an Exploratory Lease to 760,000 ha of forests in Southern Guyana. The deal was signed on 3 April 1997 between the then Guyanese President, Sam Hinds, Kwitaro's Director, Rudy James and Kwitaro's parent company in Guyana (Kurupukari Development Inc.), whose Executive Director is Lockman Sirin. The Exploratory Lease is in Region Nine between the Essequibo, Kuyuwini and Rewa Rivers. Kwitaro will pay US$0.50 per ha annually under the exploratory lease.³⁸⁹

Rudy James, in a letter to the press on 16 April 1997, described his foreign partner, the Mafira Group of Malaysia in the following terms: "We have researched to find a joint venture partner with vast experience in the industry and a good track record. They have earned excellent environmental audit rating." The Guyana Human Rights Association conducted a company search of Mafira and the only details they received indicated that Mafira Techniques Sdn Bhd, managed by Lt. Gen. Dato' Jaffa Mohammed, was established in 1990 and deals in helicopters, warship lifeboats, missile and rocket launchers, revolvers and pistols. In a press release of 17th April, 1997, the Guyana Human Rights Association urged both the Government and Dr. James to provide more specific information of the claimed "excellent environmental audit ratings" of Mafira.³⁹⁰

Maving Brothers Ltd is a wholly-owned subsidiary of Nila Wood Industries Sdn Bhd and one of the two main shareholders in the company is also a member of the Board of Directors of New Zealand Wood Products, a company linked through shareholding to IB Holdings Limited, which is owned by Primegroup Holdings.³⁹¹

Maving Brothers became one of the most controversial companies operating in the Solomon Islands when the Solomon Islands' Government gave it the right to log 895,000 cu m (worth US$130 million) in Pavuvu, the largest island in the Russell group. The island is inhabited by 2,000 local people, who were due to be resettled on another island to make way for logging.³⁹² The islanders refused to move and threatened to burn any logging equipment brought onto the island. Later in the month of April, soldiers with semi-automatic rifles detained 56 islanders, armed with knifes and axes, who tried to stop logging.³⁹³ In May, even the Catholic Church publicly condemned the logging of Pavuvu. In July of the same year, the media reported that 12 policemen were deployed to protect the timber workers and to prevent protesters from disturbing the first ship-loading (bound to Japan). On 3rd July, three bulldozers were burnt by angry local people.³⁹⁴

Local reports claim illegal logging on customary land, logging of undersized and protected nut trees, pollution of a freshwater stream and logging close to watercourses.³⁹⁵ On 30 October, Martin Apa, Russell Island's anti-logging leader, was found dead on Yandina wharf. This was viewed by many as a suspiscious death, possibly a murder by pro-logging locals, but no government investigation was carried out.³⁹⁶

Very little is known about this company apart from its logging interests in Vanuatu, a cluster of 80 islands in the South Pacific. In 1994, Parklane had cut about 8,000 cu m of logs in less than two months of operation on the island of Erromango. On 20 June, 1994, the Vanuatu government announced a ban on round log export in order to safeguard Vanuatu's forest resources. The ban led to Parklane's logs being left on the island. The government intended to introduce legislation that would put a gradual ban on export of undressed, sawn timber and white wood and ask foreign companies to venture into downstream processing.³⁹⁷ On a visit to Malaysia in November 1994, Vanuatu's Prime Minister Maxime Carlot Korman said that the ban would be forever and that the republic's authorities were going to meet soon with five Malaysian companies affected by the ban to re-negotiate their contracts. In May 1995, new deals were made, through which timber cutting quotas were reduced. Parklane's yearly maximum on Erromango was slashed from 78,000 cu m to 30,000 cu m and the company was asked to build sawmills.³⁹⁸ Parklane did not cut logs in 1995 or 1996.

Primegroup Holdings Limited is registered in the British Virgin Islands. It acquired several companies from the UK-based Inchcape Plc in 1993, including SK Timber Corporation of Malaysia, BP Batu Ampar Wood Industries of Indonesia, Turama Forest Industries of Papua New Guinea and Forest Management Service of Singapore. The group has so far been operating in Guyana and Papua New Guinea, but it seems to be linked to other large timber companies. Recent rumours suggest that Primegroup is owned by, or is in the process of being taken over by, Rimbunan Hijau.

The group incorporated in Guyana as Mazaruni Forest Industries Limited and allegedly gained a Wood Cutting Lease to 600,000 ha on the Middle Mazaruni area in 1994. The same group, calling itself Primegroup, relinquished the Middle Mazaruni area in favour of being allowed to take over Demerara Timbers Ltd (DTL) from United Dutch, with its 800,000 ha concession. The DTL concession overlaps unresolved Amerindian land claims.³⁹⁹

Primegroup, through DTL, is planning to construct a US$20 million plywood plant at Dallawalla, inluding a sawmill capable of producing 2,000 cu m of timber per month and has expressed interest in palm oil cultivation along the lines of its palm oil operations in Malaysia.⁴⁰⁰

Papua New Guinea

Primegroup is also active in Papua New Guinea . It controls PNG Forest Product South Coast Pty Ltd, which started logging in Morobe South Coast in 1996, and Turama Forest Industries, operating in the Gulf Province since the early 1990s. An official inspection of Turama logging operations in the Gulf Province in May 1991 revealed a number of breaches of the terms of their concession licence, non-compliance with forestry regulations and environmental degradation. Following this inspection, the activities of Turama were suspended by the Department of Forests. Considering the substantial losses declared by the company, suspicions were also raised of downgrading of logs and transfer pricing, whereby profits were transferred to offshore companies to avoid the payment of taxes to the Papua New Guinea government. At the time of these operations, Turama Forest Industries was owned by the UK based Inchcape Plc and was being bought by Primegroup in February 1993. All staff, including the chief executive officer continued with the new owners. Since 1993, Turama / Primegroup operations continue to attract criticism. A permit to log a new large concession area in the Gulf Province was issued to Primegroup without tender in 1995, contravening the Forestry Act. A preliminary report by the Ombudsman Commission is allegedly critical of the allocation process.⁴⁰¹

Solid Timber is a Sarawak-based company incorporated in 1980 in Sibu (Sarawak), and active in purchase and sales of timber logs and hire of logging equipment.⁴⁰² It is directed by Dato Ding Lian Cheon, who has been connected with Magnum Resources Pte Ltd and Solid Timbers (PNG) Pte Ltd.⁴⁰³ Both of these companies are active in Papua New Guinea, but Solid Timber's main operation will be in Guyana. Solid Timber is also reported to have a 500,000 ha concession in Malaysia.⁴⁰⁴

At the beginning of 1996, the company applied for a 728,000 ha concession in Guyana. The Guyanese Government did not approve that application but signed a Memorandum of Understanding for an Exploratory Lease of 760,000 ha with Solid Timber in May 1997. The lease is in the Southern part of the country, between the Corentyne River and the King Edward River, on the left bank of the New River. The company plans to carry out an inventory in the area during the first two years, after which it plans to set up plywood and furniture industries. A representative of the company thanked the Government and said that Guyana was conducive for promoting investment and bringing benefits to the people, especially the disadvantaged groups.⁴⁰⁵ However, Amerindian organisations and environmental groups strongly criticised the deal.

Syuen Corporation, based in Ipoh, Penninsular Malaysia and managed by Yan Kok Yuen, has been mainly involved in property development. In 1996, the company entered into a joint venture with the Laos Defence Ministry and set up the Lao Syuen Development Corporation. In 1997, the company started to develop Laos' biggest resort project to date on more than 18,000 ha of National Park land at Nam Ngum lake. The plans for the US$211 million "Phou Khao Khouai—Nam Ngum Eco-tourism Resort" include a number of hotels, golf courses, casinos, and many other facilities such as a "lover's paradise center".

The project is also expected to create spin-off industries such as furniture industries. Syuen has already cleared 20 ha of land to operate a sawmill to process the timber logged from the development area. "Our sawmill will buy logs locally, process them and use some for making furniture. We need lots of timber products, and lots of plants and flowers, for the Nam Ngum resort and entertainment project" said Lao-Syuen Development executive director Yan Gah Weng.⁴⁰⁶

The project involves the resettlement of four Yao villages with some 1,200 people.⁴⁰⁷ The Yao, also known as Lao Sung (one of the hilltribes found in Laos) have already voiced concern and about the resettlement project. Many say that they have not been consulted at all about the status of the project. According to one disgruntled farmer, while they had a verbal agreement with Lao-Syuen to be compensated for their fruit orchards, the construction workers destroyed the fruit trees before there was any written agreement. "They said that they would provide all of us with new housing, cultivable land for planting, financial compensation and employment opportunities. But so far we have not received anything from the operators of this project" adds another farmer.⁴⁰⁸ The project has been described as an "ecotourism" project within what is supposed to be a "National Park".

Tenaga Khemas is chaired by Dato' Kanagalingam Veluppillai and it is recorded as a dormant company in Malaysia.⁴⁰⁹ Towards the end of 1995, the company secured a 87,854 ha. concession in the Berbice river region of Guyana. Tenaga Khemas owns 85% and 80% of two other companies operating in Guyana, UNAMCO and Case Timbers respectively.⁴¹⁰

UNAMCO has been logging a 96,000 ha concession since 1991, and has recently signed a Memorandum of Understanding for an Exploratory Lease (see above) of 345,000 ha.⁴¹¹

Case Timbers has owned a 62,000 ha concession since 1993, and is scheduled to obtain an Exploratory Lease of 202,500 ha contiguous with its existing concession and the concession held by UNAMCO. On July 21, 1997, Case Timbers signed a Memorandum of Understanding with the government for the construction of a US$40 million plywood plant. The plant, which is estimated to produce 7,000 cu m of plywood per month is expected to be operational by the end of 1998.⁴¹²

Villupillai Kanagalingan, the head of Tenaga Khemas, has openly admitted that he holds an interest in both Case Timbers and UNAMCO for Berjaya Sdn Bhd. Both Case and UNAMCO are working jointly with Berjaya in existing concessions in Guyana.⁴¹³

While inspecting a logging road in November 1997, an officer of the Guyana Forestry Commission (GFC) discovered that UNAMCO had been logging its concession without permission. Less than a week after the discovery of this illegal logging, the President of Guyana held a ceremony to open the main logging road in the concession, despite the fact that the EIA on the road had been rejected as inadequate by the Environmental Protection Agency. The EIA for the road still had not been approved in April 1998.⁴¹⁴ It was later confirmed that UNAMCO had cut at least 15,000 trees illegally and was operating without approval for its Environmental Impact Assessment for the logging concession, Forest Management Plan and Operations Plan. This is also illegal in Guyana. The company was fined a paltry US$7,142 by a special government committee established to investigate the situation. The estimated value of the illegally felled trees is US$6.75 million. UNAMCO owes the government US$37,142 in outstanding acreage fees on other concessions since the beginning of 1997. UNAMCO claims that it has not made a Guyana cent from its operations in Guyana for the past three years. The illegal logging activity took place either in UNAMCO's Timber Sales Agreement concession or in the controversial Exploratory Lease issued recently to the company by the Government. There are conflicting reports in both the media and from the Government concerning exactly where the illegal activity took place.⁴¹⁵ Since the fine was announced, UNAMCO has aggressively tried to have the Guyana Forestry Commission removed from any further dealings with the matter. In a letter to the President of Guyana, UNAMCO's director described relations between his company and the GFC as "critical." He urged the president to intervene directly and "decisively" to resolve the dispute. As a result, the UNAMCO files were taken out of the GFC's hands.⁴¹⁶

As stated in an editorial in the Guyanese newspaper, the Starbroek News in February 1998, "The intervention by President Janet Jagan effectively took the issue out of the ambit of the GFC and the Minister responsible for forestry. It sent a signal that big forestry operators could bypass essential requirements set out by the GFC by appealing directly to the head of government. It thereby undermines the authority of the GFC which has sweeping and onerous obligations in acting as conservator of forests and ensuring that operators abide by the tenants of good forestry practice." The GFC is weak and understaffed as it is, if it has to constantly worry about logging companies undermining its authority by running to the President, it will never have the credibility or authority needed to ensure that logging operations are conducted sustainably.⁴¹⁷

According to the Amerindian Peoples Association, Guyana's primary indigenous organisation, "The recent case of the UNAMCO highlights the inadequacy of the GFC to monitor logging operations. If this situation has been taking place with UNAMCO and has only now been found out, how many other irregular activities are taking place in other concessions throughout Guyana? These concessions were granted without Amerindian participation, without regard for Amerindian land and other rights and as illustrated by this case, these companies are abusing the forest on which many Amerindians depend for their basic livelihood. The Wapisiana people in Region 9 have previously expressed concerns about an Exploratory Lease allocated to Malaysian company, Kwitaro, that includes their ancestral lands. In light of these events, the APA once again calls upon the Government to halt logging operations, until the rights of Amerindians to own and control their ancestral territories and forest resources are fully recognized in accordance with international law."⁴¹⁸