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Politics, Law and the Logging Industry

Politics, Law and the Logging Industry The influence of the logging industry on the politics and laws of host countries should not be underestimated, particularly with regard to obtaining licences to log and to forest policy more generally. There is often a mutually beneficial relationship between logging companies and political elites, involving the acquisition of large private wealth for both parties through bribery, corruption and transfer pricing, at the expense of public benefit through lost revenues and royalty payments and at the expense of social, environmental and indigenous communities' rights. At the very least, these relationships equate to a conflict of interest; at worst, they suggest an institutionalisation of cronyism and corruption. In most cases, there is a fundamental imbalance of power between economic interests, the State and civil society over the control, use and exploitation of forests. The long-term consequences of this are logging at unsustainable rates for quick profit; illegal felling and illegal trade; disruption of successful local economies; social instability; environmental degradation; and social, cultural and political oppression.

Awarding of Concessions and Licences to Log

The awarding of concessions and other licences to log as a result of political patronage, rather than open competitive tender, has been the norm rather than the exception in many countries. All too often, the identity of concession holders is surrounded in secrecy, as is the actual location of concessions. Occasionally, this information has been leaked from forestry departments or made available through unofficial channels. Sometimes, the only information available is a list of the local concession holders rather than the identity of the ultimate owners and/or the sub-contractors who usually reap the rewards. In the case of Sarawak, for instance, the publication of a concession map became a political tool in 1987, when the present Chief Minister succeeded his uncle after an election campaign full of accusations of cronyism and corruption on both sides (see below).

Transnational logging companies, including Malaysian-based ones, often operate abroad through numerous private, locally-registered companies or as subcontractors to national concession holders. In this way, not only are each company's financial details difficult to track, but the actual links between operations (both nationally and internationally) are also obscured. On paper, for example, the licence holders may appear to be separate entities. These practices have enabled companies to dominate the forestry sector of a country, for instance Papua New Guinea, or to circumvent maximum concession holding limits, such as those in Cameroon.39 In countries which are now opening up their forests to timber exploitation (Guyana and Suriname, for instance), huge concession areas are sought by Malaysian and other transnationals. They put pressure on governments to issue logging licences over these areas despite the inadequacies of forestry departments to monitor operations effectively or to enforce legislation, despite indigenous and other local peoples' titles or claims to land and despite the lack of enough state forest to cover their requests. In Cambodia, the anarchic issuing of local permits to log has become an easy way to obtain licences to cut trees, avoiding the more lengthy process associated with forest concessions allocated at the national level.40

Companies are not the only beneficiaries of patronage systems which facilitate the obtaining of concessions and other licences to log. Political elites—at both the national and local levels—also benefit through the receipt of funds and the support of wealthy patrons. Whilst these are inevitably difficult to prove, especially in a secretive licensing system, allegations of bribery and attempted bribery of government and community representatives have been made in Papua New Guinea and the Solomon Islands on several occasions. Political patronage has also played a significant part in awarding concessions to transnationals in Guyana, Suriname and the Congo Basin.41

Logging Operations

Most logging companies operating in tropical rainforest countries either have poor forestry management plans, which are rarely followed, or no plans at all. There are minimal, if any, on-site inspections by forestry departments or other government officials. The regulatory vacuum within which companies tend to operate at the site level is often a result of poor legislation and is always a result of serious funding shortages and a lack of trained, adequately paid personnel to monitor operations and enforce legislation. In addition to these institutional weaknesses, there is often a lack of political will. Instead, there are relationships of patronage between companies and political elites at local or national levels, resulting in unofficial payments at the local level rather than judicial proceedings for misdemeanours, or resulting in changes to policy and legislation to the benefit of companies (as has happened in Guyana, Papua New Guinea and the Solomon Islands). Companies also offer strong resistance to changes which might introduce tighter controls on the logging industry or more stringent fiscal policies (Papua New Guinea and the Solomon Islands, for instance). They have even been accused of installing governments to suit their interests.

The extent of Malaysian logging companies' influence

The world's largest transnational logging companies are headquartered in a number of home countries, including: USA, Japan, Germany, France, Finland, Sweden, Indonesia and Malaysia. Many have poor environmental and social records in their host countries.42 Malaysian-based companies have expanded both in size and in geographical spread over the last five years, and now represent a significant presence in the forestry sectors of a number of countries.

Countries where Malaysian logging interests are likely to be the major presence
(Malaysian-based companies control 50% or more of a country's total concession area as licence holders or contractors):
Malaysia
Papua New Guinea
Solomon Islands
Guyana
Vanuatu
Countries where Malaysian logging interests are likely to be a significant presence
(Malaysian-based companies control 20 to 50% of a country's total concession area as licence holders or contractors):
Cambodia
Gabon
Suriname
Countries where Malaysian logging interests are likely to be a small presence
(Malaysian-based companies control less than 20% of a country's total concession area as licence holders or contractors):
Brazil
Countries where Malaysian logging interests are believed to be present but the extent is not known:
Belize
Bolivia
Cameroon
Congo (Congo-Brazzaville)
Democratic Republic of Congo (Congo-Kinshasa)
Equatorial Guinea
Indonesia (including West Papua/Irian Jaya)
Laos
Myanmar (Burma)
Russian Far East

South-East Asia

Sarawak, Malaysia

A national forest policy was promulgated in Malaysia in 1978, but forestry is managed by the separate state governments.43 Most tax revenue is collected by the national government, but state governments are allowed to collect land-related revenue, including timber export duties. These policies have encouraged state governments to maximise these revenues,44 in some cases to the detriment of sustainable forest management.

The development of export-oriented forestry industries in Sarawak first began in the 1950s, with the export of round logs and, to this day, log exports still dominate the state's timber interests.45 Log production has increased dramatically from 4.7 million cu m in 1970 to a peak in 1991 of 19.5 million cu m. In 1996 it was 16 million cu m, still double the rate recommended by an ITTO mission of 1990. Logging activities have continued at high rates and are widespread all over the state. About 70% of Sarawak's land area has been licensed to logging companies (see map).

The rapid expansion of the logging industry in Sarawak, including the rise of a few dominant players (some of which are included in the company profiles), is the result of co-operation between corporate leaders and politicians who have control over access to the forest resource.

The top politicians in Sarawak have long been awarding logging concessions to themselves, their families and their supporters. In the 1987 state election, the present Chief Minister, Datuk Patinggi Abdul Taib Mahmud (pictured right), accused his predecessor of awarding 1.25 million has of logging concessions worth RM22.5 billion (US$9 billion) to himself and his relatives. In retaliation, the previous Chief Minister, Taib's uncle, accused the incumbent of awarding 1.6 million has to his own friends and family.46 Sarawak's Minister of Environment and Public Health, Datuk James Wong, holds at least 180,000 ha in logging concessions himself.47

A Malaysian academic institute published a detailed study of the relationship between loggers and Sarawak politicians and their families in 1992.48 A case study of Belaga district identified successive forestry ministers from 1966 to 1992, all of whom held shares in companies that had been awarded logging licences. The Lembahan Mewah timber licence, for instance, was 70% owned by the daughters of Rahman Yaakub, Chief Minister from 1970-81. The remaining 30% shares were held by the wife of Tajang Laing, state assemblyman for Belaga district.49 Where politicians and their families hold concessions, they take no risk; they invest nothing in the logging operations and pay nothing for the logging licence itself. Some of the licence holders who subcontract logging simply collect a percentage of the income from logging operations as set out in the agreement made with the logging subcontractor.

Such connections between the political elite and logging companies persist to this day. Besides the fact that licensing decisions are made by the Chief Minister in his additional function as state Minister of Resource Planning,50 new legislation has been introduced that grants the Chief Minister alone the power to revoke timber concessions. No legal challenge to the revocation of licences is now possible and no reasons need be given. This ensures that anyone with a logging interest remains loyal to the Chief Minister or risks losing their licence. Such close connections between politics and timber exploitation means that there is little incentive to protect forests or to protect and enforce native people's rights.


Millions of dollars worth of logs go down river in Sarawak.

"Some huge fortunes have been made by the concessionaires in Sarawak. It seems very doubtful whether the split is equitable, since (village) people appear to be on roughly the same standard of living as 20 years ago," —1988 ITTO study, quoted in The Asian Wall Street Journal, 7 Feb 1990.

Cambodia

A large foreign-controlled forestry industry has developed in Cambodia over the last five years, with over seven million ha (39% of total land cover, representing most of the country's remaining forest) currently under timber concessions (see map). Both the installed and operating capacities of log processing industries exceed the capability of the forests to sustain log supply. Although estimates of the amount of remaining forest cover vary from around 35% to 58% of the country (from over 70% originally), most international observers agree that, at current levels of production, the forest resource will be severely depleted within five years. The rate of deforestation has accelerated to over 180,000 ha a year, primarily as a result of the unsustainable levels of harvesting and rampant illegality in the forestry industry.51

A recently completed review of forest policy for the Cambodian government has identified several fundamental flaws in the country's institutional and legal framework covering the management of Cambodia's forest resources. Current legislation and regulations are described as "complex, inconsistent and unenforceable". Forestry law "is difficult to obtain and analyse, provides no objective standards for forest protection and provides no integrated guidelines or standards for forest management."52

Although a concession contract system, incorporating forest management requirements, does exist, it has significant loopholes concerning concessionaire responsibility and enforcement. Alongside this system there is also a logging permit system which enables logging to occur outside the formal concession management system. These permits are easy to obtain from a number of sources and serve "a number of patronage needs". The forest policy review concludes: "As a result, log production is now primarily conducted under the permit systems, with virtually no monitoring or enforcement of laws, policy and procedures. In fact, a significant proportion of log production is actually stolen from forest concession lands or from protected areas and national parks."53

Military forces are still the most powerful authority in most Cambodian rural areas. They obtain significant revenues from forestry and actively protect and promote illegal activities. Given this reality, together with the policy failings described above and limited institutional capacity, it is not surprising that the monitoring and enforcement of legislation and regulations are weak or non-existent. Even identifying what is legal and illegal is not always clear:

"In the absence of effective law enforcement, an authorisation signed by a senior RGC or military official generally proves more effective than a truly legitimate authorisation from an unknown grantor in Phnom Penh. In spite of claims blaming "anarchic" logging on "poachers" and "insecurity", a close examination of commercial forestry process reveals a pattern of authorisations provides direct or indirect support to various forestry operations (e.g. harvesting, transport, processing, export), which enables actors to circumvent the forest concession management system."54 (emphasis in original)

The main illegal activities in the Cambodian forestry sector are:

§ logging in protected areas;

§ unauthorised logging in concessions by concessionaires;

§ unauthorised logging in concessions by poachers;

§ illegal transportation to avoid tax;

§ illegal exports of up to one million cu m of logs, primarily to Thailand and Vietnam, in violation of the December 1996 log export ban;

§ illegal log scaling, species declaration, grading and prices (transfer pricing) to reduce tax;

§ illegal processing by unauthorised sawmills.55

From 1995 to 1997, forest exploitation formally contributed an average of US$15 million per year to Cambodian government revenue—6% of national treasury budget revenue—whereas "informal" payments from logging were estimated at US$200 million in 1997 alone.56 The US$12.4 million forest revenue collected by the Government in 1997 came from a mere 450,000 cu m of authorised log production from legitimate concessionaires—roughly 10% of the country's total log production in 1997 of 4.3 million cu m.


Illegally cut logs from Bokor National Park in Cambodia adjacent to the Pich Nil jungle training school; late 1997.

Laos

In 1994, the Lao government revoked all foreign logging licenses. In an attempt to regulate the industry, foreign companies retained the right to process timber, but not to extract logs and all logging operations were to be controlled by, and carried out in partnership with, three state-owned army-controlled companies. As one Malaysian newspaper reported in 1997, "Logging in Laos is a sensitive issue and the players always choose to remain opaque". Local sources talked about one Sabah and two Sarawak companies partnering the three army companies in logging but their identities have never been officially disclosed. For example, the list of Malaysian investors in Laos provided by the Malaysian embassy does not have names identified as loggers apart from United Plymill & Sawmills (Laos), which is well known in the country as underwater logging contractor in Nam Ngum Lake.57


Congo Basin

The relatively recent arrival of Malaysian and other Asian operators in the Congo Basin looked set (prior to the Asian economic crisis) to displace European operators as the major timber producers in the region. To access timber resources, Asian operators have either acquired European companies or have subcontracted from concessions awarded to nationals of the country concerned.58 The modus operandi of these companies in Africa appears to mirror their operations elsewhere: "everything leads to believe that relationships with national administrations (grant of felling or concession permits) are based more on so-called 'clientele' relationships than on the respect of legal procedures which we hope are more akin to the general interest".59 In this kind of operating climate, rumours of bribery and illegal activities abound. One Asian company is said to have arrived in Gabon "with a massive array of lorries and tractors and 'suitcases of money', and seemingly with carte blanche to fell".60

Cameroon

Up until 1996, forest exploitation in Cameroon was largely carried out by European companies, which were responsible for over 70% of the country's wood production and over 90% of the wood processing capacity.61 Since then, Asian operators have established themselves, either through the acquisition of European interests or through acting as contractors for national interests.62

Illegal practices in the country's logging industry, including felling and trade in timber, have long been widespread. "In Cameroon, illegal logging has always been the rule, respect of laws the exception",63 causing a number of environmental, social and economic problems. The two major types of illegal practices have been:

§ illegal felling, including undersized logs and outside the limits of the exploitation permit;

§ false declaration, including undeclared wood, which is one of the most rampant illegal practices, with undeclared wood volumes estimated at about one-third of the total production for the Eastern Province in 1992-3.64 This represented considerable lost revenue to the State.

There seems to have been a lack of political will to deal with these illegal practices. Few cases were brought to court, being settled financially instead—a system which allowed informal payments from rich companies to poor civil servants to become the norm. Individuals without access to money to pay 'fines' were more likely to be sent to court, however.65

The World Bank has recently had a significant influence on the development of forest policy in Cameroon, reflected in new legislation which came into effect in 1994 and 1995. The transition period, however, has led to uncertainty with regard to the renewal and issuing of concession licences, which had been granted for five years.66 Under the new legislation, concessions are now awarded after a tendering process for 15 years; renewable for 15 years, with three-yearly inspections. The maximum area which can be granted is the same as before—200,000 ha (see map). In addition, there are provisions for forest exploitation which in theory are available only to Cameroon nationals but in practice are often contracted by Cameroon nationals to foreign loggers.67 In an effort to combat illegalities in the trade, the government of Cameroon has contracted the Swiss company SGS to implement a log inspection system and monitor all exports.68 But because this inspection system does not monitor exports from private jetties, "something of a haemorrhage of log exports flowing out to Asia" are rumoured to leave from purpose-built facilities,69 avoiding monitoring by the international inspection agency70 and undermining government attempts to improve forest management.

Despite the introduction of the new forest laws in 1994, the government's commitment to sustainable forest management and the preservation of the multiple functions of forests in the longer term has been called into question.71

Gabon

In Gabon, "people" pressure on forests is low.72 The country still faces forestry management problems, however, not least an under-resourced forest control body and no reliable forest inventory.73 In Gabon, several Asian operators act as contractors in areas reserved for nationals.74 Malaysian groups are likely to control nearly 3 million ha of forests, representing about 40% of licences, having bought around 10 European companies.75 Log exports to Asia increased ten-fold in five years, from 70,000 cu m in 1990 to over 700,000 cu m in 1995.76 Such a large increase indicates logging at an unsustainable rate with no proper Gabonese capacity to monitor or control logging nor to implement sound forest management (see map).77


Melanesia

An independent report on the Melanesian Forestry Sector, published in 1994, highlighted the fact that the returns from logging for the governments and landowners of Melanesia (Papua New Guinea, the Solomon Islands and Vanuatu) were nowhere near their potential because of the dominant influence of foreign logging companies in negotiations, contracts and forestry policy, as well as the widespread illegal practice of transfer pricing, which has permitted foreign companies to export windfall profits out of the countries.78

In 1996, during a visit to the South Pacific, the Malaysian Primary Industries Minister, Datuk Seri Dr Lim Kheng Yaik, actively lobbied the governments of Papua New Guinea, the Solomon Islands and Vanuatu to reduce timber taxes on Malaysian logging companies operating in those countries.79

Solomon Islands

The forestry industry in the Solomon Islands is dominated by Malaysian companies. In the 1990s, log production—the vast majority of which is exported unprocessed—increased to nearly three times the estimated sustainable level. In 1995, the national forest resource inventory calculated that the annual sustainable harvest was 325,000 cu m; production for that year was, however, nearly triple that at 850,000 cu m.80

Customary land tenure in the Solomon Islands means that logging companies not only have to obtain permission from the national governments to log, they are also required to negotiate directly with all the relevant landholders in the particular area. In practice, politicians at national and local levels have often assisted companies by facilitating or circumventing approval procedures.

Illegalities, environmental damage and social disruption have been widespread for a number of years, with companies operating virtually unchecked by government. In late 1994, the then government, under the Prime Ministership of Billy Hilly, which had been trying to introduce sustainable forest management measures, was overthrown and a pro-logging government installed, allegedly assisted by cash inducements from logging companies operating in the country.81 Considerable amounts of bilateral assistance for sustainable forestry projects were withdrawn because the new government of Solomon Mamaloni refused to countenance any moves to rein in the activities of loggers.82

At the 1997 elections in the Solomon Islands, after three years of the pro-logging government which did not have a popular mandate, the people elected a new government willing to introduce sustainable resource management. The new Prime Minister has personally been involved with a national organisation which supports community forest management initiatives. The current Forestry Minister, Hilda Kari, announced in April 1998 that the forestry industry in the Solomon Islands would be nationalised, with the aim of allowing Solomon Island landholders to develop the resources themselves. She said that the mainly Malaysian companies operating in the country had failed to improve the living conditions of local people and had caused major environmental damage.83 The Forestry Minister also accused the Solomon Islands Forest Industries Association, which is dominated by foreign logging companies, of failing to work with resource owners at village level. She said that they needed to recognise the industry belonged to the people of the Solomon Islands.84


To generations of Solomon Islanders, the forests and the sea have provided all their subsistence needs. Now, large-scale commercial logging has caused widespread damage to both forest and marine resources.

Papua New Guinea

Papua New Guinea (PNG) has become one of the world's largest exporters of tropical logs, allocating huge areas of forest for logging (see map). Like its neighbour, the Solomon Islands, its forestry industry is dominated by Malaysian companies.

During the 14th Commonwealth Forestry Conference held in Kuala Lumpur in September 1993, Chavi Konabe, then Deputy Director of PNG's Forestry Department, said that logging companies were causing massive environmental destruction in the country and were manipulating PNG politicians and landowners in order to extract maximum profit and to secure large-scale concessions. He openly accused two Malaysian companies of bribing 109 Members of the PNG Parliament with cash, so that they would support an amendment to a new Forestry Act which would allow the companies to acquire more logging concessions. Konabe considered these actions to be interference in PNG's political affairs and a move to 'purchase' the nation's legal sovereignty. He alleged that the companies concerned had appointed senior government officials and politicians on the Board of Directors of their subsidiary companies as a reward for their co-operation.85

At the same conference, Yati Bun, Executive Director of Foundation of the People of the South Pacific and a former PNG forestry official, warned that, as a result of the dominance of foreign loggers and the vast areas of forest under their control, PNG's natural resources would be depleted in a few years with consequent suffering for the people. He said that the companies were making huge profits whilst local resource owners saw little benefit. In addition, the PNG government and people were missing out on taxes, royalties and other benefits such as employment, because of the massive corruption involved with the issueing of timber permits, the failure to monitor exports.86

In June 1994, PNG's then Forest Minister Tim Neville said: "Some of the richest and most prized rainforests in the world are being secretly shipped out of the country by logging companies, mostly Malaysians, despite government attempts to control the industry. Monitoring logging companies is almost impossible and the loggers are very organised; even though things have been tightened up I would estimate about a million dollars worth of logs per day is still disappearing (illegal log export)".87

Illegal exports of huge profits have not been confined to the latest influx of foreign investors in PNG. In the 1980s, rampant illegalities in the timber industry were uncovered as a result of exhaustive investigations by an official enquiry under Justice Thomas Barnett:

"It would be fair to say of some of these companies, that they are now roaming the countryside with the self-assurance of robber barons; bribing politicians and leaders, creating social disharmony, and ignoring the laws in order to rip out and export the last remnants of the Province's timber. These companies are fooling the landowners and making use of corrupt, gullible and unthinking politicians. It downgrades Papua New Guinea's sovereign status that such a rapacious foreign exploitation has been allowed to continue with such devastating effects to the social and physical environment, and with so few positive benefits."88

Attempts to introduce tighter controls on the timber industry have met with strong resistance from industry members and vested interests. In addition, Forest Minister Tim Neville reportedly received death threats as a result of his attempts to clean up the industry. In 1994, a fire devastated the Forestry Authority's records, destroying thousands of crucial files. The New York Times reported that this had almost certainly been arson.89 The industry rarely complies with environmental standards: of 316 logging projects established in the country since 1975, only 22 had submitted an environmental plan.90





Papua New Guinea: a silt-laden river meets the ocean. Logging companies have not only caused environmental degradation, they have also manipulated politicians and landowners in their efforts to extract maximum profits from logging.








Latin America

Guyana

In 1986, annual timber exports from Guyana were limited to 94,000 cu m and only 2.4 million ha of the 9.1 million ha legally classified as State Forests were being logged. This changed radically under the economic liberalisation policies adopted by the Hoyte government in 1987, under pressure from the World Bank and IMF structural adjustment programme. Despite the conclusion of a Canadian International Development Agency (CIDA) study that even the limited amount exported in 1986 was unsustainable because of poor forestry practices and the weak capacity of the Guyana Forestry Commission to regulate the industry, plans were approved to increase the logging area to 3.6 million ha.91 This was the first step towards large-scale privatisation and sale of Guyanese forests (see map).

By adopting the World Bank's and IMF's prescription of offering fiscal incentives to attract foreign investment, foreign companies were able to secure extraordinarily beneficial contracts, which included tax holidays, minimal royalties payments and the right to export unprocessed timber.92 As a World Resources Institute report highlights, all of the taxes, fees and royalties that the Malaysian-controlled company Barama pays to the Guyanese government amount to less than 1% of the value of timber products exported (see later).93 A 1995 World Bank study confirmed that loggers were getting their timber in Guyana very cheaply and revealed that royalties, taxes and forest fees were some of the lowest in the tropics, less than one-tenth of those paid in most African and Asian countries. With Guyana liquidating its forest assets for little national gain, the World Bank report warned that such forest mining entails a boom-and-bust pattern of development that can be highly disruptive to employment levels, trade balances and other factors of macro-economic stability.94

By early 1993, unofficial data suggested that the area of State Forest leased out to concessionaires had increased to some 7.1 million has, about 80% of the State Forests. It was impossible for the few people of the Guyana Forestry Commission to monitor all the concessionaires and thus illegal logging increased.95 As in several other countries, the beneficiaries of logging concessions were, to a large extent, determined by political patronage. During the early 1990s, logging concession deals were regarded as confidential and were not made publicly available.96 The World Bank concluded that the Guyana Forestry Commission was a perfect example of the 'capture theory of regulation', whereby the regulatory body is controlled by the industry it is supposed to regulate.97

Due to national and international pressure against the sell-off of the Guyanese forests, the Government put a freeze on handing out new logging concessions from October 1995 until the Guyana Forestry Commission was strengthened and was able to monitor logging activities throughout the country.

In 1997, despite the fact that the Guyana Forestry Commission was still weak and that some of the remaining large blocks of forests in the South of the country were also proposed to become protected areas with Global Environment Facility assistance98, the area classified as State Forests was extended by 4.6 million ha in the southern region of the country to allow Exploratory Leases to be handed out. Exploratory Leases do not technically allow logging, but they clearly pave the way for logging in the near future. They allow for a forest inventory to be made in the first three years and for the application of harvesting permits in subsequent phases. To legalise these deals, the government passed the 'Forest Exploratory Permits Bill, 1997' and another law extending the State forests to the southern part of the country. The legislation authorising Exploratory Leases was passed in July 1997, over the objections of opposition parties, indigenous peoples and environmentalists. The opposition parties accused the Government of moving with undue haste and of not consulting with indigenous peoples. They said that the law "reeked of collusion, conflict of interest and corruption".99

Three Memoranda of Understanding for the granting of Exploratory Leases, each covering 760,000 ha, were signed between the Guyanese government and three Malaysian logging companies in April 1997 (Kwitaro Investments Limited and Berjaya) and May 1997 (Solid Timbers). Another of 345,000 ha was signed with UNAMCO at the beginning of 1998. One of 202,500 ha is scheduled to be signed with Case Timbers.100

A Guyanese newspaper recently reported that a revised Forest Act, under which the Exploratory Leases will be dealt with, is expected to be put before the parliament soon.101 The draft of the revised Forest Act has been severely criticised by the Amerindian Peoples Association for representing a step backward in terms of indigenous forest peoples' rights and welfare.

The government cites Exploratory Leases as an example of its commitment to sustainable development and management of its tropical forests. As the UNAMCO case illustrates, however, the opposition of indigenous peoples and environmentalists was justified as the companies involved cannot be trusted to follow the law and the government seems incapable, if not unwilling, to monitor the companies' operations and enforce the law in any meaningful way. Illegal activity in the UNAMCO concession was discovered only by accident while the paltry fine levied indicates that the government hardly seems intent on deterring further violations.

The government of Guyana estimates that present (reported) logging rates of 240,000 cu m per annum is expected to increase to 1 million cu m within the next 3-5 years. The Guyanese Amerindian Lands Commission is concerned that much of the new logging will take place on indigenous lands.102

Suriname

Deforestation has not historically been a serious issue in Suriname because forest exploitation has, until recently, been restricted to the approximately 2.4 million ha 'forestry belt' in the northern, coastal part of the country, leaving about 11 million ha of interior, partly inaccessible, forest intact (see map).103 But although forest exploitation has been carried out by local companies, mostly in small concessions varying from 2,500 to 30,000 ha (apart from the para-statal company, Bruynzel, which has a 460,000 ha concession), the Forestry Service did not enforce strict compliance with regulation. Issues of forest mismanagement began to surface in the late 1980s.

A refined Forest Act was promulgated in September 1992, which placed ceilings on forest concessions and required inventories and management plans for each concession. The Forest Act provided a framework for control and regulation of the timber industry, but, unfortunately, has not been effectively implemented. In late 1992, Malaysian and Indonesian companies which were invited to invest in neighbouring Guyana, started to scout for investment opportunities in Suriname and, against the guidelines of the Forest Act, applied for huge concessions covering nearly all of the country's interior. Berjaya, for example, applied for a 1.1 million ha concession, having chosen Subhas Mungra, the brother of the Minister for Foreign Affairs, as their country representative. Two Indonesian companies, MUSA and Suri Atlantic, also applied for 1.1 million ha each, after MUSA was refused an application for 5 million ha.104

The overtures from these companies that the Suriname government open up the whole interior of the country attracted massive criticism from indigenous communities, national environmental groups and international support groups. The criticism highlighted the fact that, given the weak capacities of the Forestry Service and that several local communities were living in the proposed concessions, approving the applications would have lead to uncontrolled logging and social conflicts.

The large-scale concessions were not approved and, in June 1998, the Surinamese government announced the establishment of a protected area, the Central Suriname Wilderness Nature Reserve, covering 1,592,000 ha. Conservation International has offered U$1million to pay for management costs of the project.105

Smaller concessions of up to 150,000 ha have been given to MUSA and Berjaya, and pressure is still on to open up large forest areas to foreign companies. Enforcement of the Forest Act in current concessions, meanwhile, is far from satisfactory. A forest biologist has been reported as saying that "it is the task of the government to supervise production, but there are so many bribes passing over and under the table that they can do what they please", referring to foreign logging companies in Suriname.106 As to who benefits and who loses, a member of the Forestry Department remarks:

"While a few individuals are getting very rich from these concessions, there is hardly anything flowing into the state's treasury. Companies are enjoying a tax-break of 5 years. And the tax laws themselves are from 1947. Completely outdated, certainly when you look at recent hyperinflation. Per log the average 'retribution' still is 5 Surinamese guilders, which is 1 cent today. The National Forestry Department touched 2.7 million Surinamese guilders last year. You can't even keep a car on the road for that. There was a proposal to augment retribution to 3 dollars per log, but a high government official (who had a side job in the lumber trade) put this proposal in his desk drawer". 107

With a National Forestry Department that has three landrovers and a few foresters and secondary-level forest rangers, and which is unable to monitor even the present logging operations, larger scale logging operations would also be uncontrolled .

Brazil

Illegalities are widespread in the Amazon logging industry, although prior to 1996 there was little recognition by government that this was a national problem.108 The illegal trade in mahogany had been uncovered by a number of investigations, the destination being the USA and UK markets, as well as the domestic one.109 A Danish company, along with national interests, were the subject of a TV investigation into the illegal mahogany trade.110 "Not only is timber extraction not managed on the basis of sustained yield, thus causing excessive damage to the forest, but the timber sector as a whole (logging and commercialisation) is operating outside or against the law".111

Publicity about the rapidly increasing levels of deforestation in the Amazon, including the massive extent of fires raging out of control, the increasing revelations about the extent of illegal logging by national and international companies and fears about the impacts of the new Asian arrivals have prompted much debate. In late 1996, a specially constituted Federal commission was established to specifically investigate the presence of Asian companies in Brazil. The commission published its report in early 1998. In January 1998, new figures released by the Brazilian government showed that 11,000 square miles were burned in 1995 alone, with destruction of the Amazon rainforest nearly tripling between 1991 and 1995.112 Also in January 1998, the governor of Amazonas announced the blocking of around $250 million by foreign logging companies.113 In February 1998, new environmental legislation came into effect which, although considerably watered down in key areas, sets a more rigorous and punitive framework for those (both corporations and individuals) found guilty of environmental crimes.114 Inspection and monitoring capacity is weak, however, so there is a reliance on voluntary measures and good faith of the economic agents involved in the trade.115 Such reliance would appear to be seriously undermined, given the extent of illegalities in the industry, both by national and international operations.

All companies bought or incorporated by Asian groups have acquired or created environmental liabilities represented by: irregular management plans; successive official statements of infraction for buying or transporting wood of unknown origin and some for extraction or buying of wood from indigenous territories. Among 13 transnational companies investigated, 12 had environmental transgressions in forest management; irregular buying of wood or wood from indigenous lands; 10 had irregular or sub-standard management plans; 5 had penalties as a result of monitoring and enforcement; 4 had been accused of not respecting the rights of indigenous peoples.116

According to the Congress report, the strategy of the Asian loggers in the Amazon, principally from Malaysia, has been to buy established companies or form joint ventures with business people and to form coalitions with regional interests who defend them, such as governors; prefects; deputies; business groups.117 The amount of land bought by these TNCs is relatively small, about 1.5 million ha, excluding the 900,000 ha bought by WTK and which are said to have been returned to the owner. The significant fact according to the Congress report is that they have installed themselves in the two principal timber centres in the country: Belem and Manaus, with the intention of dominating the industry in the medium term. The state of Amazonas is one of the more remote areas of the Amazon and has not been heavily exploited to date but the influence of TNCs is significant, accounting for 93.7% of total exports from the country in 1997. Para has traditionally been a more central player in the timber markets, being the main exporter of mahogany, but the participation of companies identified as being foreign owned in total exports is small, around 1.6% in 1997.118

Human rights vs. logging

HUMAN RIGHTS restrictions are a function of the wider political environment and forestry sector companies appear to exercise considerable influence in this arena, resulting in the subjugation of civil society to their own economic interests. The following are just some of the Malaysian citizens who have had their freedom of movement restricted, either within Malaysia itself or when leaving the country. In each case there is a direct and sometimes explicit link, by the government's own admission, between the individuals concerned and their opposition to the logging industry in Sarawak. In addition, a number of international NGO representatives have been barred from entering Sarawak.

THOMAS JALONG, an indigenous NGOactivist from Sarawak, was on his way to attend the International Tropical Timber Organisation (ITTO) meeting in Tokyo in 1992 when he was stopped at the Kuala Lumpur airport. Officials said that he had been stopped because he was involved in an anti-logging campaign outside of the country. Thomas filed a case at the high court on the 20/01/93 challenging the power of the Director of Immigration to withdraw a passport. On the 6/4/96 the Judge presiding over the case asked the defence (the Federal Counsel) to respond to the challenge that the Director of Immigration in Sarawak did not have the power to withdraw the passport, or they would lose the case. The court has apparently reached a decision but has yet to deliver it. It has been six years since Thomas' passport was taken.

WONG MENG CHUO, an NGOactivist working with forest peoples and forest issues, was first detained in 1992 on his way to the United Nations Conference on Environment and Development in Brazil, which he was eventually allowed to attend. However, Meng Chuo's passport expired in June 1995 and he has been trying to get it renewed ever since. After letters to the Home Affairs Minister from the UN Human Rights Commission and Meng Chuo himself requesting the passport to be issued, the government's line is that the case has 'yet to be decided'. Three years later, Meng Chuo is still waiting for his new passport.

JOK JAU EVONG, an indigenous NGOactivist from Sarawak, had his passport taken from him at the airport in Kuching, Sarawak on 22/8/93 when he was going to attend a conference of the International Alliance of the Indigenous Tribal Peoples of the Tropical Forests in Peru. He was told that he could not leave the country as he had been involved in anti-logging campaigns. Again the Sarawak Immigration department was challenged to produce the directive giving the department powers to withdraw the passport. The defence admitted the fact that there was no specific directive giving power of withdrawal. To date this case has not been resolved.

GARA JALONG, an indigenous NGOactivist from Sarawak, was stopped at the airport in Kuala Lumpur while on his way to Thailand for the Asian Indigenous Peoples' Pact meeting in 1994. His passport has since expired and his application to renew it has been refused for reasons not given. It is also not known which authorities are imposing the block on the passport.

MEENAKSHI RAMAN, a legal advisor to the Consumers Association of Penang, a Malaysian-based NGO, as well as being one of the lawyers to the indigenous people affected by the Bakun Dam project in Sarawak, was refused entry into the state in April 1995 when on her way to consult with her clients. She has not been told why she has been barred from entering Sarawak.

RAYMOND ABIN, an indigenous NGOactivist from Sarawak, had his passport taken from him at Kuala Lumpur international airport on 2/3/97. He was told that he could not leave the country due to orders from an unnamed 'higher authority' whose identity was not made clear. Raymond was on his way to attend a conference of the International Alliance of the Indigenous Tribal Peoples of the Tropical Forests in India. Attending NGO meetings made him a 'dangerous' person, according to Malaysian immigration. During informal discussions with the immigration officers it was revealed that the order to prevent him leaving the country had come from the Chief Minister of Sarawak, Taib Mahmud.