Posted on 15-3-2004

Storm Over Asian-Pacific Timber Trade
By Yoon Szu-Mae, CorpWatch.org,

Kuala Lumpur, Malaysia -- Evidence by international environmental groups
of illegal practices by multinational timber trade in South-East Asia and
the Pacific have stirred up a storm of controversy among regional
governments. Two separate investigations were released in February, ahead
of the seventh meeting of parties to the United Nations Convention on
Biological Diversity held in Kuala Lumpur.

Southeast Asia contains one of the most diverse rainforests in the world,
including most of the highest-prized species of tropical wood destined for
export to European and North American markets. As a result, these forests
and protected areas have become unwitting targets of illegal loggers, who
often work under the blind eye of local governments. Deregulating the
timber trade under the WTO and other agreements has become a hot button
issue for logging corporations and free trade critics alike.

Greenpeace Takes on a Malaysian Timber Giant

"The Untouchables - Rimbunan Hijau's World of Forest Crime and Political
Patronage," a searing report issued by Greenpeace International, profiles
Malaysian timber giant Rimbunan Hijau ("Green Forest"). A billion-dollar
business owned by Sarawak tycoon Tiong Hiew King and his family, Rimbunan
Hijau "appears to be protected by an extensive and well- established
network of political patronage and media control," according to the
Greenpeace report.

Tiong's ties with the "political elite" and his former position as a
Malaysian senator representing the Chinese-dominated Sarawak United
People's Party have blurred the distinction between government and logging
interests, Greenpeace charges. This, the report added, has led "to changes
in legislation that favor corporate activities and which result in the
disregard and repression of many actors within civil society."

Tiong has since made forays into the media business, and is the owner of
three newspapers: Malaysia's Sin Chew Jit Poh, Hong Kong's Ming Pao and
Papua New Guinea's National newspaper, among others. Interest groups have
in the past charged that his control of National, in particular, helps the
tycoon influence public opinion over his Papuan businesses.

Rimbunan not only dominates Papua New Guinea's logging industry, the
company also has interests in Gabon, Equatorial Guinea, Malaysia, Vanuatu,
Indonesia, New Zealand and Russia. The Greenpeace report focuses
particularly on Rimbunan's logging activities in Papua -- where its
activities have long been the target of criticism by local communities and
environmentalists. Papua's annual $100 million timber exports are largely
destined for China, Japan and South Korea. Although a number of its
logging permits have been declared unlawful by government investigators,
no action has been taken against its 60-plus companies doing business in
Papua. Some of these logging subsidiaries have also managed to avoid open
bidding on logging licenses, possibly due to its "close connections to
Papua New Guinea's political elite," according to Greenpeace.

Meanwhile, the environmental organization reports that Papua's prime
minister has been "directly involved in the logging industry and his
deputy has been criticized in an Ombudsman Commission report for
'arbitrary and irresponsible' interference in directing the unlawful
allocation of logging concession to Rimbunan Hijau." Despite these
revelations, enforcement is almost non-existent and the same commission
found that the head of the Environment and Conservation Department
supported the timber conglomerate, Greenpeace charges.

Two weeks after Greenpeace issued its report, Papua New Guinea's forestry
minister, Patrick Pruaitch took out advertisements in the country's two
main daily newspapers to deny Greenpeace claims that Rimbunan Hijau had
been logging without legal permits. "All logging operations in the country
are legal," Pruaitch said in the advertisements. Pruaitch said suggestions
that illegally felled timber was being exported were "libellous and
malicious" and defended the Rimbunan Hijau Group as "one of the most
committed logging companies in PNG".

The Greenpeace report also points out that Rimbunan's influence extends
even further. In November 2003, a Papua airline was ordered by the company
to only fly Rimbunan-approved passengers to its logging concession area
and to deny travel to any non-government organization.

Military Links

Elsewhere, Rimbunan's Indonesian subsidiary PT Rimbunan Hijau Jaya, has
been accused by Greenpeace of using its ties with the Indonesian military
to threaten locals opposed to its logging plans.

Rimbunan's negligent logging practices appear to be widespread and not
just limited to Indonesia and Papua New Guinea. In the Solomon Islands,
Rimbunan has also faced criticism from residents and interest groups for
environmentally destructive practices, illegal logging and other
irregularities such as under reporting of log receipts, and payments made
to parliamentary members.

In Malaysia, Rimbunan owns a 20 to 25 percent share of the timber
industry. Its activities there are well known for infringing onto native
customary land rights, according to Greenpeace. Similar to the situation
in Papua, Malaysian government officials and police work in the interest
of logging companies, according to Greenpeace. Faced with inaction by
authorities, native communities have blockaded logging roads, denying
access to timber companies. "Police and forest department officials have
arbitrarily arrested and detained those indigenous people who put up any
form of protest, even though such protests are undertaken within the
confines of their own lands and they have legitimate rights under the law
to such forms of protest," it Greenpeace said.

Profiting from Plunder

A second study, "Profiting from Plunder," is a two-year investigation by
the London-based, independent Environmental Investigation Agency (EIA)and
its Indonesian partner Telapak. The groups released the report together
with an undercover video recording, which shows Malaysian businessmen
laundering illegal timber from Indonesia in local ports right under the
noses of the authorities.

Last year, a port official took the two groups to Malaysia's Johor port
where stacks of ramin wood had been reportedly seen in three warehouses
within the free trade zone. The shipments arrive daily from Sumatra,
Indonesia, and were awaiting trans-shipment to Hong Kong, Taiwan and
China, according to the environmental investigators.

Ramin, a blond colored tropical hardwood, has been listed by Indonesia
authorities as a threatened species under the Convention on International
Trade on Endangered Species (CITES). Since April 2001, all legal
Indonesian ramin shipments require CITES export permits, but most of this
contraband wood continues to be laundered into international markets, EIA
has claimed.

A shipping agent at the Johor port provided investigators with an export
flowchart on how the Indonesian ramin gets re-declared as a different
species of white tropical wood and stamped with a Malaysian label when
they arrive in Malaysia.

EIA and Telapak say that throughout their two-year investigation into the
matter, they had sent letters to the government on five separate occasions
between August 2001 and the end of last year.

As a result the governments agreed to institute two bans: the first in
June 2002 on Indonesian log imports, and the second on squared Indonesian
logs in June 2003. But doubts continue to fester over whether authorities
were really intent on ending the illegal trade. Visits to Malaysian ports
following the ban on whole logs found boats continuing to unload their
illegal Indonesian logs in full open view, said EIA investigator Sam
Lawson.

And after the ban on squared logs came into force, illegal squared logs
from Indonesia were filmed arriving at Tawau's Barter Trade Jetty, which
is controlled by customs. In February the organization found that an
entire 'mountain' of what appeared to be illegal Indonesian ramin, still
sitting at another port located in the free trade zone of Johor,
Malaysia's southern-most state.

EIA senior investigator Alexander von Bismarck told this reporter that
while they did not enter the port grounds, the piles of sawn timber
sitting in open air was clearly visible from across the fence. "There is
so much of it that they have to keep it outside," he noted. EIA-Telapak
investigators claim that they have evidence of a supplier admitting that
part of the stockpile of ramin in a client's warehouse was laundered
Indonesian timber. The supplier also alleged that the smuggling is done
with the knowledge of government officials through the port of Tanjung
Manis in Sarawak state, once customs is paid to allow the shipment
through.

The Sarawak Timber Development Corporation, the government issuing
authority for CITES permits, visits mills along the Rejang river and
issues certificates identifying the ramin as Malaysian, investigators
charged. "The idea of port officials sitting back and allowing free trade
to happen is wrong. They are deliberately facilitating that trade, and the
government, through the Johor port, are making money from that trade,"
Lawson said.

According to EIA and Telapak at least 70,000 cubic metres of illegal ramin
go through the Johor alone -- almost twice the amount of legal sawed ramin
produced in the country.

Denials, Finger-Pointing

The charges by the environmental groups have provoked strong reactions
from regional governments ranging from denial to finger-pointing at each
other.

Malaysian primary industries minister Dr Lim Keng Yaik first claimed that
the Environmental Investigation Agency (EIA) and its Indonesian partner
Telapak had "taken things out of context and at times falsified
information to make themselves heroes at our expense." Two days later the
minister changed his tune and told the environmental groups to take the
problem to the Indonesian authorities, rather than blame Malaysia for the
illegal trade. "If we have to change the law, it may take six months just
to go through parliament. But for the time being, we will cooperate with
the EIA to try and find a solution," he told reporters.

Indonesian authorities apparently took the minister at his word because
the following week national police chief General Da'I Bachtiar announced
told a parliamentary commission hearing that "a case of illegal logging
has been found in Papua and we have arrested 15 Malaysians allegedly
involved in the unlawful activity."

In a related development, Greenpeace said it assisted the Indonesian
navy's expulsion of an illegal log vessel in Central Kalimantan, on the
same day the hearing was announced.

The Indonesian government has appealed for Malaysia's help in combating
the trade in illegal timber from its forests, saying that Indonesia was
making its best effort despite limited resources and administrative
weaknesses. "It's our forests. Do you think we are sleeping? We do what we
can do, but it's not enough," Indonesian environment minister Nabiel
Makarim was quoted saying at a press conference. "The fight has become
harder because the demand side is not responding. That's why we would like
to have Malaysia on our side, it will make our fight easier."

Yet, at the same time, the minister warned that if the movement towards
eradicating remains thwarted, Indonesia would propose that the European
Union ban all timber originating from illegal sources. "But please keep in
mind that we are only proposing this as a last resort," Nabiel cautioned.

Yoon Szu-Mae is a journalist with Malaysiakini, a Malaysian independent
online news outlet.