South China Morning Post
4 April 2007
Money guardians question the banking giant's standards on
social responsibility
Byline: Cameron Dueck
Money managers in New York and London who invest only in socially
responsible companies say they may sell shares of HSBC Holdings
because the bank appears to have violated its own social and
environmental standards by arranging Samling Global's initial public
offering.
HSBC, along with Macquarie Bank and Credit Suisse, in February
arranged the HK$2.18 billion Hong Kong initial public offering for
Samling, a Malaysian logging firm with a chequered record of
environmental and social responsibility.
The deal irked managers of ethical funds, known in the industry as
socially responsible investment (SRI) funds, who have long been keen
backers of HSBC's record.
"I've been a strong supporter of that work, but it does raise concerns
if the policies that are being published appear not to be implemented
on the ground," said Steve Waygood, the head of SRI engagement at
Morley Fund Management.
"It may mean that they are downgraded sufficiently enough to get them
removed, to mean that they are no longer acceptable for our
sustainable responsible investment funds. That does remain to be
seen."
Global banks are increasingly held accountable for not only their own
actions but also those of the companies and projects that they
finance.
In 2003, a group of international banks, including HSBC and Credit
Suisse, signed the Equator Principles, pledging to only finance
projects that met certain environmental and social standards. The list
has since grown to 46 banks.
While the Equator Principles apply only to project finance, most banks
also have internal rules on corporate social responsibility (CSR) so
they can market to fund managers who make their investment decisions
based on such issues.
Innovest, which researches corporate environmental, social and
governance issues for institutional investors, has found plenty of
complaints against Samling and said working with the company broke
HSBC's own rules.
Innovest claimed Samling was logging primary rainforests without
having obtained formal certification for sustainable forest management
or proper processes in place to deal with its conflicts with
indigenous peoples.
The company had also been accused of illegal logging in Cambodia and
Papua New Guinea and was found non-compliant with Forest
Stewardship
Council standards in Guyana, Innovest said.
"Samling has never been rated by Innovest, but if it were, it would
likely be rated a CCC," said Gregory Larkin, an analyst at Innovest.
"HSBC's underwriting of Samling's IPO seems to be in clear violation
of the bank's own forestry standards."
Although Credit Suisse was the lead underwriter of Samling's initial
public offering, HSBC has attracted the most criticism for its role in
the deal because of its work to promote its image as an environmental
and social champion.
HSBC has won many awards for such activities. It was the first global
bank to go "carbon neutral", meaning it buys credits for its carbon
emissions. The bank also offers to plant trees on behalf of customers
who choose to receive their monthly account statements electronically
rather than on printed paper statements.
Many of the fund managers interviewed for this article said HSBC had
not been forthcoming with information on the Samling case when it was
requested - a departure from the bank's usual proactive relationship
with SRI managers.
HSBC declined repeated requests for comment. Credit Suisse said it
saw
that Samling had cases of damaging social and environmental
behaviour
in its past as well as under current review, but it was satisfied with
the firm's internal policies and overall present behaviour.
"It was after looking at the overall picture that we said yes, we can
go with this, it meets our standards," said Alex Biscaro, a Credit
Suisse spokesman.
"We have had some discussions with SRIs on this question, but it's
certainly not the situation that we have felt, or been put under any,
pressure. On the contrary, the talks have been in a very constructive
manner."
Macquarie declined to comment.
Adam Kanzer, the managing director and general counsel of Domini
Social Investments, said HSBC's involvement in the Samling offering
"appears to violate their own forestry sector policies" and has
written HSBC a letter seeking an explanation.
"If we determine that the bank does not appear to have credible
systems in place to implement its policies, it is possible that they
could be removed from our approved list of stocks at some point in the
future. Right now, it is too early to tell," Mr Kanzer said.
However, he said HSBC had demonstrated strong environmental
policies
in the past and generally a company was not dropped for a single
infringement.
"Like other investment approaches, SRI is not about defining a list of
good guys and bad guys. It is an iterative process based on a variety
of judgment calls that change as new information becomes available
and
as companies change their practices," Mr Kanzer said.
HSBC is a favourite stock with individual investors, and perhaps it is
from ordinary investors familiar with the bank's global image that the
Samling case draws the most criticism.
"It's not right that a bank like HSBC can be collecting awards in
London for its CSR and environmental practices but then, when it
comes
to the backwaters of the world, their actions are very different" said
Dylan Tanner, a US investor with holdings in various SRI funds.
Socially upright
Lipper lists 662 ethical funds with total portfolio exceeding US$95
billion
Amount raised in the IPO by Samling Global in HK$:
2.18b
Caption: Innovest says Samling is logging primary rainforests without
proper certification and compliance with forest stewardship standards.
Publication - Date: 04.04.2007
Page: 03
Thursday, April 5, 2007
Wednesday, April 4, 2007
Churches, human rights groups must speak out against the exploitation of Children
http://www.stabroeknews.com/index.pl/article?id=56517475
Churches, human rights groups must speak out against the exploitation
of children
Stabroek News,
Monday, April 2nd 2007
Dear Editor,
In a recent letter captioned 'Protect the children of Guyana from
predators' (KN 07.01.13) I had written: "The children of any nation are
its most prized possessions/assets. It is therefore every
citizen/parent's responsibility to do everything possible to protect
our children from danger." That letter was written in the hope that
Guyana would take precautions to avoid one of the most undesirable
evils of the tourist traffic, that is, the sexual exploitation of our
children. Little did I realize that my warning was already too late for
some of our most vulnerable children.
Dr Gail Whiteman in Chapter 11 titled: "Forestry, Gold Mining and
Amerindians: The Troubling Example of Samling in Guyana" of her book
"International businesses and the challenges of poverty in the
developing world," wrote:
"Direct impacts of Barama (Samling is the parent Company of Barama).
Interviews indicate that the economic benefits for local Amerindians
from large-scale forestry were not significant…Moreover, despite
community expectations of improved health care, as reported in the
Edinburgh Centre for Tropical Forests (ECTF) study, the health
situation for Amerindians in Region 1 has remained problematic.
Amerindians also continue to lack proper education facilities. While
Port Kaituma did have a school and Amerindian teachers, they were
poorly paid and under-utilized. Social problems related to the alleged
sexual exploitation of young Amerindian girls by Barama employees also
were reported in interviews: 'It happened in this community, not with
mining but with the Barama Company. They take the young girls and stay
over night and bring them back to school.' 'I heard that they take rude
pictures…''It's true. It's the Malaysians [from Barama] that do these
things…The young girls are kicked out of school…These Malaysians
take these young Amerindian girls and leave them pregnant.'"
These actions make a bad situation even worse: Dr. G. Whiteman wrote: -
"Extreme poverty follows ethnic heritage, Amerindians being by far the
poorest; 88 per cent of Guyana's Amerindians live below the poverty
line. In Region 1, the focus of this study, 95 per cent of local
Amerindians live in extreme poverty (IMF, 2000).
In addition, The Guyana Human Rights Association's (GHRA) report called
'Without Conviction,' and its most recent study titled: 'Getting
Serious: Detecting and Protecting Against crimes of sexual violence in
Guyana' revealed that sexual violence against girls is most prevalent
among girls under 16 years, and that young Amerindian girls between
ages 12 and 16 years are the most vulnerable in the country, especially
in Region 1 (with the most reported cases).
In the Western hemisphere, if an employee is sexually harassed at the
work place, the employer can be held legally responsible. How can
Barama not know that children were being exploited by its imported
foreign workers? If the company's executives do not know that their
employees are breaking the laws of Guyana, then is it not fair to ask
what other illegalities they do not know about in their business
operations? If they do know what is going on at their company's
premises, then why were/are these legal, ethical, and internationally
abhorrent and illegal practices not stopped? Why are the Barama Company
and its executives not being held responsible for violations by their
employees of Guyanese law? Why are Barama's employees allowed to
violate the most sacred laws of any modern country - the sexual and
physical abuse of its children?
In addition, these are clear violations of the Forestry Stewardship
Council (FSC) principles: For example - Principle #1: Compliance with
Laws and FSC principles: Forest management shall respect all applicable
laws of the country in which they occur, and international treaties and
agreements to which the country is a signatory, and comply with all FSC
Principles and Criteria. (Guyana is a signatory to the Convention of
the Rights of the Child (CRC), and therefore, Guyana also has an
international obligation to take preventative action in regard to
preventing the abuse and exploitation of its children.)
Secondly, FSC Principle #4: Community relations and workers' rights.
Forest management operations shall maintain or enhance the long-term
social and economic well being of forest workers and local communities.
From the abovementioned research of Dr Gail Whiteman and recent
revelations in the local press, not only does Barama Company Ltd
exploit the forests, but its employees exploit our children for their
gratification and entertainment.
If we cannot find common ground and speak up for vulnerable children,
then we are not worthy of being a nation and deserve the disrespect we
get from our own Caricom community brethren and also from the
international community. I expect all the various groups that speak for
children to take up this challenge and speak out. We can no longer be
silent.
Yours faithfully,
Seelochan Beharry
Churches, human rights groups must speak out against the exploitation
of children
Stabroek News,
Monday, April 2nd 2007
Dear Editor,
In a recent letter captioned 'Protect the children of Guyana from
predators' (KN 07.01.13) I had written: "The children of any nation are
its most prized possessions/assets. It is therefore every
citizen/parent's responsibility to do everything possible to protect
our children from danger." That letter was written in the hope that
Guyana would take precautions to avoid one of the most undesirable
evils of the tourist traffic, that is, the sexual exploitation of our
children. Little did I realize that my warning was already too late for
some of our most vulnerable children.
Dr Gail Whiteman in Chapter 11 titled: "Forestry, Gold Mining and
Amerindians: The Troubling Example of Samling in Guyana" of her book
"International businesses and the challenges of poverty in the
developing world," wrote:
"Direct impacts of Barama (Samling is the parent Company of Barama).
Interviews indicate that the economic benefits for local Amerindians
from large-scale forestry were not significant…Moreover, despite
community expectations of improved health care, as reported in the
Edinburgh Centre for Tropical Forests (ECTF) study, the health
situation for Amerindians in Region 1 has remained problematic.
Amerindians also continue to lack proper education facilities. While
Port Kaituma did have a school and Amerindian teachers, they were
poorly paid and under-utilized. Social problems related to the alleged
sexual exploitation of young Amerindian girls by Barama employees also
were reported in interviews: 'It happened in this community, not with
mining but with the Barama Company. They take the young girls and stay
over night and bring them back to school.' 'I heard that they take rude
pictures…''It's true. It's the Malaysians [from Barama] that do these
things…The young girls are kicked out of school…These Malaysians
take these young Amerindian girls and leave them pregnant.'"
These actions make a bad situation even worse: Dr. G. Whiteman wrote: -
"Extreme poverty follows ethnic heritage, Amerindians being by far the
poorest; 88 per cent of Guyana's Amerindians live below the poverty
line. In Region 1, the focus of this study, 95 per cent of local
Amerindians live in extreme poverty (IMF, 2000).
In addition, The Guyana Human Rights Association's (GHRA) report called
'Without Conviction,' and its most recent study titled: 'Getting
Serious: Detecting and Protecting Against crimes of sexual violence in
Guyana' revealed that sexual violence against girls is most prevalent
among girls under 16 years, and that young Amerindian girls between
ages 12 and 16 years are the most vulnerable in the country, especially
in Region 1 (with the most reported cases).
In the Western hemisphere, if an employee is sexually harassed at the
work place, the employer can be held legally responsible. How can
Barama not know that children were being exploited by its imported
foreign workers? If the company's executives do not know that their
employees are breaking the laws of Guyana, then is it not fair to ask
what other illegalities they do not know about in their business
operations? If they do know what is going on at their company's
premises, then why were/are these legal, ethical, and internationally
abhorrent and illegal practices not stopped? Why are the Barama Company
and its executives not being held responsible for violations by their
employees of Guyanese law? Why are Barama's employees allowed to
violate the most sacred laws of any modern country - the sexual and
physical abuse of its children?
In addition, these are clear violations of the Forestry Stewardship
Council (FSC) principles: For example - Principle #1: Compliance with
Laws and FSC principles: Forest management shall respect all applicable
laws of the country in which they occur, and international treaties and
agreements to which the country is a signatory, and comply with all FSC
Principles and Criteria. (Guyana is a signatory to the Convention of
the Rights of the Child (CRC), and therefore, Guyana also has an
international obligation to take preventative action in regard to
preventing the abuse and exploitation of its children.)
Secondly, FSC Principle #4: Community relations and workers' rights.
Forest management operations shall maintain or enhance the long-term
social and economic well being of forest workers and local communities.
From the abovementioned research of Dr Gail Whiteman and recent
revelations in the local press, not only does Barama Company Ltd
exploit the forests, but its employees exploit our children for their
gratification and entertainment.
If we cannot find common ground and speak up for vulnerable children,
then we are not worthy of being a nation and deserve the disrespect we
get from our own Caricom community brethren and also from the
international community. I expect all the various groups that speak for
children to take up this challenge and speak out. We can no longer be
silent.
Yours faithfully,
Seelochan Beharry
Tuesday, April 3, 2007
Guyana's wood products on show at world convention
http://www.stabroeknews.com/index.pl/article?id=56517507
Stabroek News
Stabroek News
Tuesday, April 3rd 2007
 | Potential investors in Guyana's Forest products recently received a first-hand look at samples of Guyana's hardwood species when a number of local producers attended the International Wood Products Association (IWPA) World of Wood Convention in California USA, recently. Representatives from the Forest Products Marketing Council of Guyana (FPMC), the United States Agency for International Development (USAID)/ Guyana Trade and Investment Support project(GTIS) and a number of local companies including Toolsie Persaud Limited attended the March 28-20 convention, a USAID statement said. The statement said the convention attracted nearly 400 manufacturers, importers, logistics providers and other wood products industry representatives from around the world. The FPMC hosted a booth at the exposition where potential investors were able to learn about Guyana's forestry sector. USAID said attendance at the convention was in support of the Ministry of Agriculture's diversification plan and quoted FPMC Director Luvindra Sukhraj as saying that attending the IWPA was important because it opens the door for Guyana into the international marketplace and allows for market research and influences changes and development in the forestry sector here. Andre Cummings, managing director of Fine Woods Marketing was quoted in the statement and said that from Guyana's standpoint, having market intelligence and information was "the key to our future growth". USAID said this was the second year in a row that Guyana was represented at the IWPA show and as a result of last year's participation, a number of international companies have established offices in Guyana to work with local firms and purchase value-added wood products produced in the country. The statement said too that USAID/GTIS would continue to provide assistance to the forest products sector to help Guyana become more competitive in the international market and develop export market opportunities. | |
Consumer Concerns
http://www.stabroeknews.com/index.pl/article?id=56517433
Stabroek News.
Stabroek News.
Micro-projects take centre stage
Sunday, April 1st 2007
Church bells ought to be ringing and consumers ought to be celebrating the turn in our affairs. No more gloom, no more despair. The Guyana Micro-Project Programme (GMPP), which is funded by the European Union/Government of Guyana is seeking proposals for community-based micro-projects in the following sectors: * Employment/income generation (50% of the total allocation) * Training, Education, Communication and Good Governance (25% of the total allocation) * Other Socio-Economic Sectors (25% of the total allocation). Consumers may not have paid attention to the advertisements seen so often in our newspapers with the Guyana flag in the top left hand corner and the European flag in the right, but they must know that it concerns them. There is no longer need to wait indefinitely for the Poverty Reduction Strategy to reduce poverty. This programme is doing the job. The overall objective of the GMPP is to reduce poverty and social inequality in Guyana. Single micro-projects should focus on the three sectors listed above. The programme began its operations in Guyana in 2006. It is not confined to Georgetown. The widest possible participation of all sectors of society is encouraged in the development process. In regions such as One and Ten it is for leaders to be on the alert to identify needs and to take advantage of this offer. The sum of money provided by the programme is equivalent to G$950 million. The overall amount remaining available for micro-projects is GYD $409,812,480.00. The GMPP seeks to achieve four broad-based results. Two address key issues related to the capacity building of community-based organizations and mirco-project funding/ implementation, and the others are related to project management support and government/civil society dialogue. Each component is summarized below. Result 1: Completion of seventy-five (75) micro-projects Result 2: Strengthening of civil society *Through contracted service providers provide assistance/training to partner organizations/programme, target communities in areas such as participatory needs assessment, project development, implementation and management, etc Result 3: Functioning of an independent micro-projects board (GMPPB) and Result 4: Promotion of dialogue between civil society and government * Facilitate annual workshop/dialogue between civil society and government on key topics of relevance to the programme. In the year 2006 57 proposals under $2.5 million were received and 34 were approved. Sixty-six proposals over $2.5 million were received and 45 were approved. Of the 79 proposals approved, 36 were implemented before January 31, 2007 and the remainder are currently being implemented. The core responsibilities of the GMPP Board are as follows: 1. To promote and disseminate information about the GMPPB 2. To provide overall guidance to the GMPP 3. The clearance of progress reports, programme estimates and budget from the GMPP. These will require the final approval of the NAO (a section in the Ministry of Finance) and the head of the European Commission delegation. 4. To discuss and approve or reject individual micro-projects in keeping with the approved GMPP Guidelines and Operations Manual and to ensure the technical and substantive quality of those projects. 5. To plan, conduct and participate in the dialogue (through annual workshops) between the government and civil society on sector issues relevant to the GMPP. The GMPPB is comprised of six members, two of whom should be women and at least one should be an Amerindian resource person. They are elected by civil society representatives for the duration of two-and-a-half years, changing on a yearly basis. On March 19, 2007, by invitation, civil society representatives gathered to nominate and vote for the three replacement members. The GMPPB now stands as Chairman Ms Yvonne Hinds Members Mr Mohamed Karimullah Mr Colin Beaton Ms Geraldine Mason-Halls Ms Patricia David Mr Peter Persaud | |
 |
Monday, April 2, 2007
Corruption Stains Timber Trade
URL=http://www.washingtonpost.com/wp-dyn/content/article/2007/03/31/
AR2007033101287.html?hpid%253Dtopnews
Corruption Stains Timber Trade
Forests Destroyed in China's Race to Feed Global Wood-Processing
Industry
By Peter S. Goodman and Peter Finn
Washington Post Foreign Service
Sunday, April 1, 2007; A01
MYITKYINA, Burma -- The Chinese logging boss set his sights on a
thickly forested mountain just inside Burma, aiming to harvest one of
the last natural stands of teak on Earth.
He handed a rice sack stuffed with $8,000 worth of Chinese currency to
two agents with connections in the Burmese borderlands, the men said in
interviews. They used that stash to bribe everyone standing between the
teak and China. In came Chinese logging crews. Out went huge logs, over
Chinese-built roads.
About 2,500 miles to the northeast, Chinese and Russian crews hacked
into the virgin forests of the Russian Far East and Siberia, hauling
away 250-year-old Korean pines in often-illegal deals, according to
trading companies and environmentalists. In the highlands of Papua New
Guinea, Indonesia and Africa and in the forests of the Amazon, loggers
working beyond the bounds of the law have sent a ceaseless flow of
timber to China.
Some of the largest swaths of natural forest left on the planet are
being dismantled at an alarming pace to feed a global wood-processing
industry centered in coastal China.
Mountains of logs, many of them harvested in excess of legal limits
aimed at preserving forests, are streaming toward Chinese factories
where workers churn out such products as furniture and floorboards.
These wares are shipped from China to major retailers such as Ikea,
Home Depot, Lowe's and many others. They land in homes and offices in
the United States and Europe, bought by shoppers with little inkling of
the wood's origins or the environmental costs of chopping it down.
"Western consumers are leaving a violent ecological footprint in Burma
and other countries," said an American environmental activist who
frequently travels to Burma and goes by the pen name Zao Noam to
preserve access to the authoritarian country. "Predominantly, the
Burmese timber winds up as patio furniture for Americans. Without their
demand, there wouldn't be a timber trade."
At the current pace of cutting, natural forests in Indonesia and Burma
-- which send more than half their exported logs to China -- will be
exhausted within a decade, according to research by Forest Trends, a
consortium of industry and conservation groups. Forests in Papua New
Guinea will be consumed in as little as 13 years, and those in the
Russian Far East within two decades.
These forests are a bulwark against global warming, capturing carbon
dioxide that would otherwise contribute to heating the planet. They
hold some of the richest flora and fauna anywhere, and they have
supplied generations of people with livelihoods that are now
threatened.
In the world's poorest countries, illegal logging on public lands
annually costs governments $10 billion in lost assets and revenues, a
figure more than six times the aid these nations receive to help
protect forests, a World Bank study found last year.
Environmental activists have prodded some of the largest purveyors of
wood products to adopt conservation policies. Industry leaders and
conservationists have crafted standards meant to give forests time to
regenerate. They certify operations that comply and encourage consumers
to buy certified goods.
But such efforts are in their infancy and are vulnerable to abuse.
Corruption bedevils the timber trade in poor countries.
"What we've done very well so far with certification is to reward the
best players in the marketplace," said Ned Daly, vice president of U.S.
operations for a leading certification body, the Forest Stewardship
Council. "What we haven't done very well is to figure out how to
exclude the worst players. We're having a hard time getting the
criminals to label their products 'illegal.' "
This story is the result of a year-long Washington Post investigation
involving reporting in China, Russia, Indonesia, Burma, Thailand,
Singapore and the United States. The Post interviewed government
officers, diplomats, logging companies, traders, retailers,
environmental scientists and advocates. Given the risks of discussing
illegal activity, The Post sometimes granted anonymity to its
informants -- particularly in Burma, where the agents who brokered a
logging deal with military commanders displayed their bribe ledgers on
the condition they not be named.
From Asian Forests to Ikea Showrooms
The industry that connects forests in Asia with living rooms in the
United States via the sawmills of China is a quintessential product of
globalization. As transportation links expand and technology erodes
distance, multinational manufacturing operations can draw supplies from
almost anywhere and ship goods everywhere.
No company better symbolizes this reality than Ikea, the Swedish
home-furnishings giant. Ikea cultivates a green image, filling its
cavernous stores -- including three in the Baltimore-Washington
corridor -- with signs asserting that its products are made in ways
that minimize environmental harm.
But in Suifenhe, a wood-processing hub in northeastern China, workers
at Yixin Wood Industry Corp. fashion 100,000 pine dining sets a year
for Ikea using timber from the neighboring Russian Far East, where the
World Bank says half of all logging is illegal.
"Ikea will provide some guidance, such as a list of endangered species
we can't use, but they never send people to supervise the purchasing,"
said a factory sales manager who spoke on condition she be identified
by only her family name, Wu. "Basically, they just let us pick what
wood we want."
China is Ikea's largest supplier of solid wood furniture, according to
the company. In 2006, about 100 Chinese factories manufactured about
one-fourth of the company's global stock. Russia is Ikea's largest
source of wood, providing one-fifth of its worldwide supply. Ikea
executives said they are confident this wood is legal, because the
company dispatches auditors and professional foresters to factories and
traces wood to logging sites.
But Ikea has only two foresters in China and three in Russia, the
company said. It annually inspects logging sites that produce about 30
percent of the wood imported by its Chinese factories, more commonly
relying on paperwork produced by logging companies and factories.
"Falsification of documents is rampant," acknowledged Sofie Beckham,
Ikea's forestry coordinator. "There's always somebody who wants to
break the rules."
Sending more people to inspect logging sites would make Ikea's products
more expensive.
"It's about cost," said Ikea's global manager for social and
environmental affairs, Thomas Bergmark. "It would take enormous
resources if we trace back each and every wood supply chain. We can
never guarantee that each and every log is from the right source."
Two years ago, Ikea set a goal that by 2009, at least 30 percent of the
wood for its products will be certified by the Forest Stewardship
Council. But now, the company says, only 4 percent of the wood used to
make its wares in China meets that grade.
The Ecosystem Effect
China's voracious appetite for foreign timber is the direct result of
its campaign to protect its own forests, even as its demand for wood
has exploded.
In 1998, floods along China's Yangtze River killed 3,600 people. The
government, blaming deforestation, imposed logging bans -- particularly
in Yunnan province, bordering Burma. What logging goes on must adhere
to plans for regeneration.
China also unleashed an ambitious replanting effort, expanding its
forest cover by an area the size of Nebraska from 2000 to 2005. A 2005
assessment of the world's forests by the U.N. Food and Agriculture
Organization pointed to China's replanting as the primary reason Asia's
total forest cover grew during that period, even as deforestation
continued worldwide "at an alarmingly high rate."
But in those same years, unprecedented expansion has unfolded at
China's factories, requiring enormous quantities of wood. In 2005,
China exported $8.8 billion worth of wood furniture, an eightfold
increase from 1998, according to Chinese customs data. About 40 percent
landed in the United States. China's exports of all timber products,
including plywood and floorboards, exceeded $17 billion in 2005, nearly
five times the 1997 level.
All that wood had to come from somewhere. In the years since China
enacted its logging bans, it became the world's largest importer of
tropical logs, according to the FAO. Its log imports swelled nearly
ninefold in a decade, reaching $5.6 billion in 2006, according to
China's State Forestry Administration.
China's imports of wood and exports of finished wood products are both
expected to double again over the next decade, according to Forest
Trends.
Whatever environmental benefits have resulted from China's replanting
have been undone by the damage to the tropical regions now supplying so
many of its logs, said Mette Wilkie, the U.N. officer in Rome who
coordinated the FAO report. China is primarily adding tree plantations
with little biological diversity. Much of the logging in Burma, the
Russian Far East, Indonesia and Papua New Guinea is assailing natural
forests that hold creatures and plants found nowhere else.
"You're losing tropical rainforest, and you're gaining areas of
plantation, and that of course is a concern," Wilkie said. "A lot of
the biodiversity is found in the moist forests."
The FAO report found grave environmental risks -- particularly in
Indonesia, home to 10 to 15 percent of all known animal, plant and bird
species. Several species are imperiled, among them the Sumatran tiger,
according to the World Conservation Union in Switzerland. In Burma,
tigers, red pandas and leopards are threatened as logging roads open
forests to a range of exploitation, a dynamic at play across Southeast
Asia.
"The arrival of logging operations has an immediate and devastating
effect," said Jake Brunner, a regional environmental scientist for
Conservation International. "We see a fragmentation of the forest and a
collapse" in wildlife.
More than 1 billion people in poor countries depend on forests for
their livelihoods, according to the World Bank. As forests are
degraded, and as logging proceeds on steep slopes, allowing soil to
wash away, communities are suffering from flooding, forest fires and a
dearth of game.
"Whole ecosystems are being wiped out," said Horst Weyerhaeuser, a
forester with the World Agroforestry Centre research group who advises
the Chinese government.
Meanwhile, the spoils of the timber trade are monopolized by those who
control the trees, typically local authorities acting with military
groups.
"For local people, it just gets more difficult," said a community
leader in Kachin state, in Northeastern Burma, bordering China, where
Chinese logging has stripped mountains bare. He spoke on condition that
he be identified only by his given name, Shaung, citing threats to his
safety. "The commanders sell our natural resources and our local people
get nothing."
'Take-and-Run System'
The buzzing sawmills and clattering furniture plants in China explain
why the pace of logging in Papua New Guinea is four times faster than
legally permitted, according to Forest Trends. It explains why ships
ferry logs to China from the African nation of Gabon, where 70 percent
of logging is illegal, according to the World Bank. It explains why
Chinese traders armed with cash line the Russian border, overwhelming
the regulators charged with preserving trees.
"There is no strategy for forest resources," said Alexei Lankin, a
researcher at the Pacific Geographical Institute in Vladivostok,
Russia. "What you have is a take-and-run system."
Chinese authorities acknowledge they rarely challenge imports. As long
as shipments are accompanied by harvest permits issued by authorities
in the country of origin, customs officers allow the wood in, making no
effort to authenticate the paperwork.
"China can only ensure that the logging companies and traders obey
Chinese law," said a researcher in Beijing affiliated with the State
Forestry Administration. "What they do in other countries is not
something the Chinese government can control."
Each year, illegal logging costs Indonesia at least $600 million in
lost royalties and export taxes, more than double what the government
spent to subsidize food for the poor in 2001, according to the World
Bank. Five years ago, China pledged to help Indonesia halt shipments of
merbau, a threatened tree species. Shippers have evaded an Indonesian
ban on exports of merbau logs by transporting them through Malaysia,
forging documents saying that the trees were harvested there, Chinese
traders said.
But China has done nothing to follow through.
"They said they have no authority to implement this kind of agreement,"
complained Tachir Fatmoni of the Indonesian Forestry Ministry. "Merbau
is still getting to China."
North of Shanghai, the Zhangjiagang port has become perhaps the largest
trading place on Earth for tropical logs. According to state figures,
$500 million worth of wood passed through the port in 2004.
One morning a year ago, tens of thousands of logs laid stacked on the
muddy banks. A four-story hotel next to the port had become a trading
house where buyers from furniture and flooring factories haggled over
cups of green tea. A bulletin board in the lobby was jammed with offers
for logs from South America and Africa, and one trader whispered to a
visitor that for the right price, he could get his hands on merbau.
Bribery at the Border
In the rugged mountains of southwestern China, automobiles worth more
than many villagers earn in a lifetime traverse dirt roads, a testament
to the riches that Chinese timber merchants are extracting from
next-door Burma. The trade amounts to a joint venture between China's
frontier capitalists and corrupt Burmese generals leading one of the
world's most repressive regimes.
For more than four decades, Burma's military dictatorship has plundered
the country's natural resources. In the northeast, ethnic Kachin
minority communities resisted the regime's rule with a long-running
guerrilla war, until they signed cease-fire deals with the Burmese
government in the 1990s. The Kachin had been sustained by jade mining,
but as those rights went to the government, they shifted aggressively
into logging, leaning on Chinese partners for capital, laborers and
transport.
The cross-border log trade swelled by 60 percent between 2001 and 2004,
reaching $350 million in 2005, according to a London environmental
group, Global Witness. With competing Burmese generals involved and
some using force to evict villagers in the way, control over land is in
flux, contributing to forest destruction: Chinese logging crews work
fast, cognizant that new armed forces could show up any minute and shut
them down.
"You bribe one army and you get the right to cut everything," said Li
Tao, a Chinese logger preparing last May to sneak across the border
from the Chinese town of Ruili. "Then another army comes and threatens
to arrest you, and you have to bribe them, too."
Ethnic Kachin agents working for a Chinese logging boss consented to
interviews in Myitkyina, a town in northeastern Burma, on the condition
of anonymity, citing fears they would be imprisoned or killed. They
said they wished to publicize the details of the trade to bring
international pressure on Burma's government to aid local people.
"We know what we are doing is rotten," one agent said. "There is
nothing else for us to do. This is how we are surviving."
They displayed a logbook showing records of the bribes they said they
paid to facilitate teak logging in the Sinpo area beginning in October
2004 through March 2006: $200 per year to the local police, $250 to the
forestry department, $225 to the Burmese military special intelligence
and $950 to the local brigade of the Burmese army, plus $8,000 worth of
gold to battalion-level leaders. The Chinese boss independently
funneled $4,000 each to five officers in the northern regional command,
the Kachin men said.
In January 2005, the agents said, a crew of more than 120 Chinese
workers slipped into Burma and set up camp on a mountaintop near the
town of Bhamo, adding the whine of chainsaws to the screeching of
jungle insects. "They cut the whole mountain," one agent said. "They
cut it all."
Caravans of 10 and 20 trucks, each carrying about 20 logs, ferried the
wood into China. The Kachin agents said they rode ahead on motorbikes,
giving soldiers $40 per truck at eight government checkpoints. Where
the government's control yields to the territory of a separatist group,
the Kachin Independence Organization, they paid $125 per truck to
Burmese soldiers, $83 to the forestry department and $25 to the drug
police. At Laiza, the final stop before the border, the Kachin group
collected a tax from the Chinese truckers, then issued documents
declaring the shipments legitimate.
In the first six months of 2005, this operation hauled 150 truckloads
of teak into China, with each truck carrying about 20 tons, the men
said. On the other side of the border, each ton fetched nearly $1,000,
making the total haul worth about $3 million.
Last May, in one hour, a reporter counted six big trucks loaded with
logs as they made their way down a narrow, winding road from the border
toward the Chinese town of Yingjiang.
'This Keeps My Child in School'
At the opposite edge of China, along the meandering border with Russia,
the logging trade has transformed backwater towns into bustling hives.
Russia has become China's primary wood supplier, with shipments
multiplying 20-fold in less than a decade.
In Vostok, a Russian town of 4,000 with crumbling Soviet-era apartment
blocks, villagers receive about $100 a month to haul logs from the
forest. Chinese workers run sawmills across the region.
South of Vostok, just outside the Russian town of Roshino, eight
Chinese workers sliced oak and ash trees into planks one day last year,
at a small plant where they also live, sleeping on cots in converted
offices. Piles of oak and ash awaited the saw blades. At the railyard
in the city of Dalnerechensk, freight cars bore loads of Korean pine
and linden trees -- both protected species -- with the cargo bound for
furniture factories in China.
Shi Diangang is typical of the entrepreneurs who control the trade. He
once sold clothing to Russian tourists on the border. Now he brings
laborers from China into Russia, paying them $375 per month to work 12-
to 15-hour days, prying wood from the forest. He sells timber to
Chinese traders who supply Chinese factories that he says make
furniture for Ikea. He is shopping for a villa in Macau, the gambling
mecca. He tells time with a gold watch.
"It's been hell to heaven," he said.
Shi operates inside Russia largely free of regulation, with his
business partner's government pedigree rendering everything legal, he
said.
"The Russian company settles all the documents," he said. "Russia has
very loose controls."
Already, logging has laid bare much of the Russian forest bordering
China. Crews are moving farther into the interior, penetrating
officially protected terrain. In the Primorsky region -- an area rich
with wildlife, including 450 Amur tigers, the world's largest cat --
Yappy lumber company struggles to satisfy orders from its Chinese
customers for unprocessed oak and ash logs.
"The forest is exhausted," complained Alexander Sobchenko, the
company's general-director.
The Russian Forest Service issues licenses for cutting in protected
areas under the guise of so-called sanitation logging, to remove sick
or fallen trees. In Primorsky, one-third of exported logs have been cut
under such licenses, according to Josh Newell, a researcher at the
University of Washington.
"Sanitation logging is a cover to get into areas that should be
protected," he said.
Last year, Russia's environmental prosecutor opened a criminal
investigation of Forestry Service officials after 14 firms with such
licenses harvested 1.3 million cubic feet of wood in a protected zone
near Vostok. The logs were exported to China with documentation,
prosecutors said. How much more passed through undetected no one really
knows: About the size of Florida, Primorsky has 12 forest inspectors.
"Barbaric" is one word Russian President Vladimir Putin has used to
assail the "critical problem" of illegal logging. By shipping logs out
of the country, Russia is exporting tens of thousands of jobs that
would go to Russians if the country had more sawmills and furniture
factories. "Our neighbors continue to earn billions of dollars relying
on Russian timber," Putin said.
Across the border, in the Chinese city of Suifenhe, 11 freight trains
were loaded with logs one morning about a year ago, some being
offloaded, others bound for factory towns throughout the country.
Shacks of corrugated tin and discarded tree bark encircled the rail
yard -- homes for migrant workers who have swelled the city's
population to more than 100,000 from 20,000 a decade ago.
On seemingly every lane, sawmills filled the air with black smoke, the
scent of fresh sawdust and the screech of metal blades biting wood.
Some were jury-rigged operations manned by workers lacking safety
goggles and gloves. At Jindi Wood company near the rail yard, four men
strained to haul huge logs to the saws with slats hung over their
shoulders. They earn $250 a week for seven days of work.
"This keeps my child in school," said Xiao Jifeng, 35, whose wife and
son remained in his village, a six-hour bus ride away.
Construction crews were filling the horizon with brick villas for the
bosses, as a modern city took shape on once-empty plains.
"Four years ago, there was nothing here," said Su Guanglin, chairman of
Guofeng Wood Co., a Hong Kong firm that employs 500 workers at a
floorboard plant in Suifenhe. Guofeng ships nearly all its products
overseas, about one-third to the United States, mainly through
Armstrong, a prominent Pennsylvania brand of floor products.
A China-Russia trading office was going up behind the factory. Empty
grassland had been transformed into a public square fringed with
neon-lighted restaurants and nightclubs offering Cognac and hired
female companionship. Oxcarts shared dusty roads with black Audi
sedans.
Moving to Certification
The Forest Stewardship Council, a body created by environmental and
industry groups in 1990, sets standards for the sustainable use of
forests. The movement has gained high-profile members, including Ikea
and Home Depot.
Home Depot conducts top-to-bottom investigations of the products on its
shelves, refusing to buy from vendors who cannot verify the wood's
origin, said Ron Jarvis, the company's merchandising vice president.
Home Depot sold some $400 million in products certified by the FSC in
2005, compared with $15 million in 1999. Still, those recent sales
represented less than 5 percent of the company's total wood-product
sales.
"If we could get 100 percent of our wood certified, we would do it
tomorrow," Jarvis said. "But we have to do it on a commercial basis."
In China, 20 companies per month are gaining certification, said
Alistair Monument, the FSC's country director in Beijing. In the
floorboard and furniture factories of Guangdong province in southern
China, management vernacular now includes forest conservation.
"All the big Chinese companies exporting to the United States are
really paying attention to this issue now," said She Xuebin, president
of one of China's largest flooring companies, Yingbin (Guangdong) Wood
Industry Co.
But many major Western brands have declined to join. Four-fifths of
Yingbin's exports go to the United States, some to Armstrong. Much of
Yingbin's wood comes from a sawmill in Indonesia, where as much as 80
percent of the logging is illegal, according to the World Bank.
Yingbin's president acknowledged "there's a gap between the law and
enforcement," though he said his company plays by the rules.
Armstrong does not require that Yingbin or its four other China
suppliers meet the standards of a certification body such as the FSC.
Armstrong buys Southeast Asian merbau for flooring that it sells as
"exotic," listing only the country of final manufacture -- typically
the United States -- but not the wood's source.
"I just don't think there's a need for it," said Frank J. Ready, chief
executive of Armstrong Floor Products North America.
Ready and his counterpart at Yingbin said they do not trade in wood
from one country that is synonymous with human-rights abuse -- Burma.
Yet as a reporter toured Yingbin's flooring factory in the Chinese city
of Zhongshan last spring, a pile of teak boards sat on the floor.
"It's from Burma," a worker said.
In the southern Chinese city of Guangzhou, merchants at Yuzhu
lumberyard hawked piles of Burmese teak to buyers from surrounding
furniture factories. In Shanghai, marketing representatives for one of
China's largest flooring companies, Anxin, boasted that they had a
large and steady supply of Burmese teak.
They were exporting it to the United States, they said.
Through which channels, they would not say.
Goodman reported from China, Burma, Thailand and Singapore. Finn
reported from Russia. Correspondent Ellen Nakashima in Indonesia,
special correspondent Eva Woo in China, and staff writer Justin Gillis
in Washington contributed to this report.
AR2007033101287.html?hpid%253Dtopnews
Corruption Stains Timber Trade
Forests Destroyed in China's Race to Feed Global Wood-Processing
Industry
By Peter S. Goodman and Peter Finn
Washington Post Foreign Service
Sunday, April 1, 2007; A01
MYITKYINA, Burma -- The Chinese logging boss set his sights on a
thickly forested mountain just inside Burma, aiming to harvest one of
the last natural stands of teak on Earth.
He handed a rice sack stuffed with $8,000 worth of Chinese currency to
two agents with connections in the Burmese borderlands, the men said in
interviews. They used that stash to bribe everyone standing between the
teak and China. In came Chinese logging crews. Out went huge logs, over
Chinese-built roads.
About 2,500 miles to the northeast, Chinese and Russian crews hacked
into the virgin forests of the Russian Far East and Siberia, hauling
away 250-year-old Korean pines in often-illegal deals, according to
trading companies and environmentalists. In the highlands of Papua New
Guinea, Indonesia and Africa and in the forests of the Amazon, loggers
working beyond the bounds of the law have sent a ceaseless flow of
timber to China.
Some of the largest swaths of natural forest left on the planet are
being dismantled at an alarming pace to feed a global wood-processing
industry centered in coastal China.
Mountains of logs, many of them harvested in excess of legal limits
aimed at preserving forests, are streaming toward Chinese factories
where workers churn out such products as furniture and floorboards.
These wares are shipped from China to major retailers such as Ikea,
Home Depot, Lowe's and many others. They land in homes and offices in
the United States and Europe, bought by shoppers with little inkling of
the wood's origins or the environmental costs of chopping it down.
"Western consumers are leaving a violent ecological footprint in Burma
and other countries," said an American environmental activist who
frequently travels to Burma and goes by the pen name Zao Noam to
preserve access to the authoritarian country. "Predominantly, the
Burmese timber winds up as patio furniture for Americans. Without their
demand, there wouldn't be a timber trade."
At the current pace of cutting, natural forests in Indonesia and Burma
-- which send more than half their exported logs to China -- will be
exhausted within a decade, according to research by Forest Trends, a
consortium of industry and conservation groups. Forests in Papua New
Guinea will be consumed in as little as 13 years, and those in the
Russian Far East within two decades.
These forests are a bulwark against global warming, capturing carbon
dioxide that would otherwise contribute to heating the planet. They
hold some of the richest flora and fauna anywhere, and they have
supplied generations of people with livelihoods that are now
threatened.
In the world's poorest countries, illegal logging on public lands
annually costs governments $10 billion in lost assets and revenues, a
figure more than six times the aid these nations receive to help
protect forests, a World Bank study found last year.
Environmental activists have prodded some of the largest purveyors of
wood products to adopt conservation policies. Industry leaders and
conservationists have crafted standards meant to give forests time to
regenerate. They certify operations that comply and encourage consumers
to buy certified goods.
But such efforts are in their infancy and are vulnerable to abuse.
Corruption bedevils the timber trade in poor countries.
"What we've done very well so far with certification is to reward the
best players in the marketplace," said Ned Daly, vice president of U.S.
operations for a leading certification body, the Forest Stewardship
Council. "What we haven't done very well is to figure out how to
exclude the worst players. We're having a hard time getting the
criminals to label their products 'illegal.' "
This story is the result of a year-long Washington Post investigation
involving reporting in China, Russia, Indonesia, Burma, Thailand,
Singapore and the United States. The Post interviewed government
officers, diplomats, logging companies, traders, retailers,
environmental scientists and advocates. Given the risks of discussing
illegal activity, The Post sometimes granted anonymity to its
informants -- particularly in Burma, where the agents who brokered a
logging deal with military commanders displayed their bribe ledgers on
the condition they not be named.
From Asian Forests to Ikea Showrooms
The industry that connects forests in Asia with living rooms in the
United States via the sawmills of China is a quintessential product of
globalization. As transportation links expand and technology erodes
distance, multinational manufacturing operations can draw supplies from
almost anywhere and ship goods everywhere.
No company better symbolizes this reality than Ikea, the Swedish
home-furnishings giant. Ikea cultivates a green image, filling its
cavernous stores -- including three in the Baltimore-Washington
corridor -- with signs asserting that its products are made in ways
that minimize environmental harm.
But in Suifenhe, a wood-processing hub in northeastern China, workers
at Yixin Wood Industry Corp. fashion 100,000 pine dining sets a year
for Ikea using timber from the neighboring Russian Far East, where the
World Bank says half of all logging is illegal.
"Ikea will provide some guidance, such as a list of endangered species
we can't use, but they never send people to supervise the purchasing,"
said a factory sales manager who spoke on condition she be identified
by only her family name, Wu. "Basically, they just let us pick what
wood we want."
China is Ikea's largest supplier of solid wood furniture, according to
the company. In 2006, about 100 Chinese factories manufactured about
one-fourth of the company's global stock. Russia is Ikea's largest
source of wood, providing one-fifth of its worldwide supply. Ikea
executives said they are confident this wood is legal, because the
company dispatches auditors and professional foresters to factories and
traces wood to logging sites.
But Ikea has only two foresters in China and three in Russia, the
company said. It annually inspects logging sites that produce about 30
percent of the wood imported by its Chinese factories, more commonly
relying on paperwork produced by logging companies and factories.
"Falsification of documents is rampant," acknowledged Sofie Beckham,
Ikea's forestry coordinator. "There's always somebody who wants to
break the rules."
Sending more people to inspect logging sites would make Ikea's products
more expensive.
"It's about cost," said Ikea's global manager for social and
environmental affairs, Thomas Bergmark. "It would take enormous
resources if we trace back each and every wood supply chain. We can
never guarantee that each and every log is from the right source."
Two years ago, Ikea set a goal that by 2009, at least 30 percent of the
wood for its products will be certified by the Forest Stewardship
Council. But now, the company says, only 4 percent of the wood used to
make its wares in China meets that grade.
The Ecosystem Effect
China's voracious appetite for foreign timber is the direct result of
its campaign to protect its own forests, even as its demand for wood
has exploded.
In 1998, floods along China's Yangtze River killed 3,600 people. The
government, blaming deforestation, imposed logging bans -- particularly
in Yunnan province, bordering Burma. What logging goes on must adhere
to plans for regeneration.
China also unleashed an ambitious replanting effort, expanding its
forest cover by an area the size of Nebraska from 2000 to 2005. A 2005
assessment of the world's forests by the U.N. Food and Agriculture
Organization pointed to China's replanting as the primary reason Asia's
total forest cover grew during that period, even as deforestation
continued worldwide "at an alarmingly high rate."
But in those same years, unprecedented expansion has unfolded at
China's factories, requiring enormous quantities of wood. In 2005,
China exported $8.8 billion worth of wood furniture, an eightfold
increase from 1998, according to Chinese customs data. About 40 percent
landed in the United States. China's exports of all timber products,
including plywood and floorboards, exceeded $17 billion in 2005, nearly
five times the 1997 level.
All that wood had to come from somewhere. In the years since China
enacted its logging bans, it became the world's largest importer of
tropical logs, according to the FAO. Its log imports swelled nearly
ninefold in a decade, reaching $5.6 billion in 2006, according to
China's State Forestry Administration.
China's imports of wood and exports of finished wood products are both
expected to double again over the next decade, according to Forest
Trends.
Whatever environmental benefits have resulted from China's replanting
have been undone by the damage to the tropical regions now supplying so
many of its logs, said Mette Wilkie, the U.N. officer in Rome who
coordinated the FAO report. China is primarily adding tree plantations
with little biological diversity. Much of the logging in Burma, the
Russian Far East, Indonesia and Papua New Guinea is assailing natural
forests that hold creatures and plants found nowhere else.
"You're losing tropical rainforest, and you're gaining areas of
plantation, and that of course is a concern," Wilkie said. "A lot of
the biodiversity is found in the moist forests."
The FAO report found grave environmental risks -- particularly in
Indonesia, home to 10 to 15 percent of all known animal, plant and bird
species. Several species are imperiled, among them the Sumatran tiger,
according to the World Conservation Union in Switzerland. In Burma,
tigers, red pandas and leopards are threatened as logging roads open
forests to a range of exploitation, a dynamic at play across Southeast
Asia.
"The arrival of logging operations has an immediate and devastating
effect," said Jake Brunner, a regional environmental scientist for
Conservation International. "We see a fragmentation of the forest and a
collapse" in wildlife.
More than 1 billion people in poor countries depend on forests for
their livelihoods, according to the World Bank. As forests are
degraded, and as logging proceeds on steep slopes, allowing soil to
wash away, communities are suffering from flooding, forest fires and a
dearth of game.
"Whole ecosystems are being wiped out," said Horst Weyerhaeuser, a
forester with the World Agroforestry Centre research group who advises
the Chinese government.
Meanwhile, the spoils of the timber trade are monopolized by those who
control the trees, typically local authorities acting with military
groups.
"For local people, it just gets more difficult," said a community
leader in Kachin state, in Northeastern Burma, bordering China, where
Chinese logging has stripped mountains bare. He spoke on condition that
he be identified only by his given name, Shaung, citing threats to his
safety. "The commanders sell our natural resources and our local people
get nothing."
'Take-and-Run System'
The buzzing sawmills and clattering furniture plants in China explain
why the pace of logging in Papua New Guinea is four times faster than
legally permitted, according to Forest Trends. It explains why ships
ferry logs to China from the African nation of Gabon, where 70 percent
of logging is illegal, according to the World Bank. It explains why
Chinese traders armed with cash line the Russian border, overwhelming
the regulators charged with preserving trees.
"There is no strategy for forest resources," said Alexei Lankin, a
researcher at the Pacific Geographical Institute in Vladivostok,
Russia. "What you have is a take-and-run system."
Chinese authorities acknowledge they rarely challenge imports. As long
as shipments are accompanied by harvest permits issued by authorities
in the country of origin, customs officers allow the wood in, making no
effort to authenticate the paperwork.
"China can only ensure that the logging companies and traders obey
Chinese law," said a researcher in Beijing affiliated with the State
Forestry Administration. "What they do in other countries is not
something the Chinese government can control."
Each year, illegal logging costs Indonesia at least $600 million in
lost royalties and export taxes, more than double what the government
spent to subsidize food for the poor in 2001, according to the World
Bank. Five years ago, China pledged to help Indonesia halt shipments of
merbau, a threatened tree species. Shippers have evaded an Indonesian
ban on exports of merbau logs by transporting them through Malaysia,
forging documents saying that the trees were harvested there, Chinese
traders said.
But China has done nothing to follow through.
"They said they have no authority to implement this kind of agreement,"
complained Tachir Fatmoni of the Indonesian Forestry Ministry. "Merbau
is still getting to China."
North of Shanghai, the Zhangjiagang port has become perhaps the largest
trading place on Earth for tropical logs. According to state figures,
$500 million worth of wood passed through the port in 2004.
One morning a year ago, tens of thousands of logs laid stacked on the
muddy banks. A four-story hotel next to the port had become a trading
house where buyers from furniture and flooring factories haggled over
cups of green tea. A bulletin board in the lobby was jammed with offers
for logs from South America and Africa, and one trader whispered to a
visitor that for the right price, he could get his hands on merbau.
Bribery at the Border
In the rugged mountains of southwestern China, automobiles worth more
than many villagers earn in a lifetime traverse dirt roads, a testament
to the riches that Chinese timber merchants are extracting from
next-door Burma. The trade amounts to a joint venture between China's
frontier capitalists and corrupt Burmese generals leading one of the
world's most repressive regimes.
For more than four decades, Burma's military dictatorship has plundered
the country's natural resources. In the northeast, ethnic Kachin
minority communities resisted the regime's rule with a long-running
guerrilla war, until they signed cease-fire deals with the Burmese
government in the 1990s. The Kachin had been sustained by jade mining,
but as those rights went to the government, they shifted aggressively
into logging, leaning on Chinese partners for capital, laborers and
transport.
The cross-border log trade swelled by 60 percent between 2001 and 2004,
reaching $350 million in 2005, according to a London environmental
group, Global Witness. With competing Burmese generals involved and
some using force to evict villagers in the way, control over land is in
flux, contributing to forest destruction: Chinese logging crews work
fast, cognizant that new armed forces could show up any minute and shut
them down.
"You bribe one army and you get the right to cut everything," said Li
Tao, a Chinese logger preparing last May to sneak across the border
from the Chinese town of Ruili. "Then another army comes and threatens
to arrest you, and you have to bribe them, too."
Ethnic Kachin agents working for a Chinese logging boss consented to
interviews in Myitkyina, a town in northeastern Burma, on the condition
of anonymity, citing fears they would be imprisoned or killed. They
said they wished to publicize the details of the trade to bring
international pressure on Burma's government to aid local people.
"We know what we are doing is rotten," one agent said. "There is
nothing else for us to do. This is how we are surviving."
They displayed a logbook showing records of the bribes they said they
paid to facilitate teak logging in the Sinpo area beginning in October
2004 through March 2006: $200 per year to the local police, $250 to the
forestry department, $225 to the Burmese military special intelligence
and $950 to the local brigade of the Burmese army, plus $8,000 worth of
gold to battalion-level leaders. The Chinese boss independently
funneled $4,000 each to five officers in the northern regional command,
the Kachin men said.
In January 2005, the agents said, a crew of more than 120 Chinese
workers slipped into Burma and set up camp on a mountaintop near the
town of Bhamo, adding the whine of chainsaws to the screeching of
jungle insects. "They cut the whole mountain," one agent said. "They
cut it all."
Caravans of 10 and 20 trucks, each carrying about 20 logs, ferried the
wood into China. The Kachin agents said they rode ahead on motorbikes,
giving soldiers $40 per truck at eight government checkpoints. Where
the government's control yields to the territory of a separatist group,
the Kachin Independence Organization, they paid $125 per truck to
Burmese soldiers, $83 to the forestry department and $25 to the drug
police. At Laiza, the final stop before the border, the Kachin group
collected a tax from the Chinese truckers, then issued documents
declaring the shipments legitimate.
In the first six months of 2005, this operation hauled 150 truckloads
of teak into China, with each truck carrying about 20 tons, the men
said. On the other side of the border, each ton fetched nearly $1,000,
making the total haul worth about $3 million.
Last May, in one hour, a reporter counted six big trucks loaded with
logs as they made their way down a narrow, winding road from the border
toward the Chinese town of Yingjiang.
'This Keeps My Child in School'
At the opposite edge of China, along the meandering border with Russia,
the logging trade has transformed backwater towns into bustling hives.
Russia has become China's primary wood supplier, with shipments
multiplying 20-fold in less than a decade.
In Vostok, a Russian town of 4,000 with crumbling Soviet-era apartment
blocks, villagers receive about $100 a month to haul logs from the
forest. Chinese workers run sawmills across the region.
South of Vostok, just outside the Russian town of Roshino, eight
Chinese workers sliced oak and ash trees into planks one day last year,
at a small plant where they also live, sleeping on cots in converted
offices. Piles of oak and ash awaited the saw blades. At the railyard
in the city of Dalnerechensk, freight cars bore loads of Korean pine
and linden trees -- both protected species -- with the cargo bound for
furniture factories in China.
Shi Diangang is typical of the entrepreneurs who control the trade. He
once sold clothing to Russian tourists on the border. Now he brings
laborers from China into Russia, paying them $375 per month to work 12-
to 15-hour days, prying wood from the forest. He sells timber to
Chinese traders who supply Chinese factories that he says make
furniture for Ikea. He is shopping for a villa in Macau, the gambling
mecca. He tells time with a gold watch.
"It's been hell to heaven," he said.
Shi operates inside Russia largely free of regulation, with his
business partner's government pedigree rendering everything legal, he
said.
"The Russian company settles all the documents," he said. "Russia has
very loose controls."
Already, logging has laid bare much of the Russian forest bordering
China. Crews are moving farther into the interior, penetrating
officially protected terrain. In the Primorsky region -- an area rich
with wildlife, including 450 Amur tigers, the world's largest cat --
Yappy lumber company struggles to satisfy orders from its Chinese
customers for unprocessed oak and ash logs.
"The forest is exhausted," complained Alexander Sobchenko, the
company's general-director.
The Russian Forest Service issues licenses for cutting in protected
areas under the guise of so-called sanitation logging, to remove sick
or fallen trees. In Primorsky, one-third of exported logs have been cut
under such licenses, according to Josh Newell, a researcher at the
University of Washington.
"Sanitation logging is a cover to get into areas that should be
protected," he said.
Last year, Russia's environmental prosecutor opened a criminal
investigation of Forestry Service officials after 14 firms with such
licenses harvested 1.3 million cubic feet of wood in a protected zone
near Vostok. The logs were exported to China with documentation,
prosecutors said. How much more passed through undetected no one really
knows: About the size of Florida, Primorsky has 12 forest inspectors.
"Barbaric" is one word Russian President Vladimir Putin has used to
assail the "critical problem" of illegal logging. By shipping logs out
of the country, Russia is exporting tens of thousands of jobs that
would go to Russians if the country had more sawmills and furniture
factories. "Our neighbors continue to earn billions of dollars relying
on Russian timber," Putin said.
Across the border, in the Chinese city of Suifenhe, 11 freight trains
were loaded with logs one morning about a year ago, some being
offloaded, others bound for factory towns throughout the country.
Shacks of corrugated tin and discarded tree bark encircled the rail
yard -- homes for migrant workers who have swelled the city's
population to more than 100,000 from 20,000 a decade ago.
On seemingly every lane, sawmills filled the air with black smoke, the
scent of fresh sawdust and the screech of metal blades biting wood.
Some were jury-rigged operations manned by workers lacking safety
goggles and gloves. At Jindi Wood company near the rail yard, four men
strained to haul huge logs to the saws with slats hung over their
shoulders. They earn $250 a week for seven days of work.
"This keeps my child in school," said Xiao Jifeng, 35, whose wife and
son remained in his village, a six-hour bus ride away.
Construction crews were filling the horizon with brick villas for the
bosses, as a modern city took shape on once-empty plains.
"Four years ago, there was nothing here," said Su Guanglin, chairman of
Guofeng Wood Co., a Hong Kong firm that employs 500 workers at a
floorboard plant in Suifenhe. Guofeng ships nearly all its products
overseas, about one-third to the United States, mainly through
Armstrong, a prominent Pennsylvania brand of floor products.
A China-Russia trading office was going up behind the factory. Empty
grassland had been transformed into a public square fringed with
neon-lighted restaurants and nightclubs offering Cognac and hired
female companionship. Oxcarts shared dusty roads with black Audi
sedans.
Moving to Certification
The Forest Stewardship Council, a body created by environmental and
industry groups in 1990, sets standards for the sustainable use of
forests. The movement has gained high-profile members, including Ikea
and Home Depot.
Home Depot conducts top-to-bottom investigations of the products on its
shelves, refusing to buy from vendors who cannot verify the wood's
origin, said Ron Jarvis, the company's merchandising vice president.
Home Depot sold some $400 million in products certified by the FSC in
2005, compared with $15 million in 1999. Still, those recent sales
represented less than 5 percent of the company's total wood-product
sales.
"If we could get 100 percent of our wood certified, we would do it
tomorrow," Jarvis said. "But we have to do it on a commercial basis."
In China, 20 companies per month are gaining certification, said
Alistair Monument, the FSC's country director in Beijing. In the
floorboard and furniture factories of Guangdong province in southern
China, management vernacular now includes forest conservation.
"All the big Chinese companies exporting to the United States are
really paying attention to this issue now," said She Xuebin, president
of one of China's largest flooring companies, Yingbin (Guangdong) Wood
Industry Co.
But many major Western brands have declined to join. Four-fifths of
Yingbin's exports go to the United States, some to Armstrong. Much of
Yingbin's wood comes from a sawmill in Indonesia, where as much as 80
percent of the logging is illegal, according to the World Bank.
Yingbin's president acknowledged "there's a gap between the law and
enforcement," though he said his company plays by the rules.
Armstrong does not require that Yingbin or its four other China
suppliers meet the standards of a certification body such as the FSC.
Armstrong buys Southeast Asian merbau for flooring that it sells as
"exotic," listing only the country of final manufacture -- typically
the United States -- but not the wood's source.
"I just don't think there's a need for it," said Frank J. Ready, chief
executive of Armstrong Floor Products North America.
Ready and his counterpart at Yingbin said they do not trade in wood
from one country that is synonymous with human-rights abuse -- Burma.
Yet as a reporter toured Yingbin's flooring factory in the Chinese city
of Zhongshan last spring, a pile of teak boards sat on the floor.
"It's from Burma," a worker said.
In the southern Chinese city of Guangzhou, merchants at Yuzhu
lumberyard hawked piles of Burmese teak to buyers from surrounding
furniture factories. In Shanghai, marketing representatives for one of
China's largest flooring companies, Anxin, boasted that they had a
large and steady supply of Burmese teak.
They were exporting it to the United States, they said.
Through which channels, they would not say.
Goodman reported from China, Burma, Thailand and Singapore. Finn
reported from Russia. Correspondent Ellen Nakashima in Indonesia,
special correspondent Eva Woo in China, and staff writer Justin Gillis
in Washington contributed to this report.
April observation to focus on avoiding workplace accidents
http://www.guyanachronicle.com/news.html
April observation to focus on avoiding workplace accidents
Guyana Chronicle
1 April 2007
BEGINNING today, the government will heighten its focus on improving
conditions and safety at the workplace to counter work-related
accidents and diseases.
The Government Information Agency (GINA) said the thrust coincides with
Guyana’s observance of Occupational Safety and Health (OS&H) Month,
under the theme ‘Safe practices, healthy workforce, increased
production’.
GINA said the administration is concerned about the increasing cases of
accidents at workplaces and, to address the issue, has been advising
that OS&H committees be established and advocating that it is
everyone’s responsibility to be actively involved in the monitoring of
the work environment.
OS&H Month will be launched at Linden Hospital Complex in Region Ten
(Upper Demerara/Berbice) and, as part of the activities, the
responsible department in the Ministry of Labour will emphasise the
importance through seminars and lectures countrywide, GINA said.
According to GINA, Labour Minister Manzoor Nadir and staff of the
National Advisory Council on Occupational Safety and Health (NACOSH)
are expected to visit the Aroaima Mining Complex and the Russian
Aluminum Company (RUSAL) to conduct similar exercises with management
personnel and employees.
GINA said Guyana Telephone & Telegraph Company (GT&T), Guyana Power &
Light (GPL) and the Consultative Association of Guyanese Industries
(CAGI) will also be hosting series for their respective staffers on the
importance of practising OS&H.
On April 27, individuals and companies will be honoured for their
exemplary practices at a national awards ceremony and symposium, GINA
announced.
It said workplace hazards and exposures cause more than 160 million
workers to fall ill annually and the global estimate of work-related
deaths is about 1.1 million per year.
GINA said, in 1997, the Guyana Parliament passed the OS&H Act and it
was promulgated in 1999.
The law being a major movement in the transformation of the labour
sector, the government since established a National Occupational Safety
and Health Council, which is helping to formulate regulations to
enforce it.
With the assistance of the International Labour Organisation (ILO),
Guyana is preparing regulations that relate to occupational diseases,
construction safety, personal protective equipment, mining and
chemicals, GINA said.
Other regulations are being prepared for the agriculture, forestry,
mining, and industrial and manufacturing sectors.
Meantime, the Occupational Safety and Health Convention (Number 155)
and Recommendation (Number 164), both of 1981, provide for the adoption
of national occupational safety and health policies.
GINA said Guyana ratified Convention Number 161 of 1985, which provides
for the establishment of enterprise-level, occupational health services
designed to contribute to the implementation of the OS&H policy.
The convenant describes the actions to be taken by governments and
within enterprises, to promote OS&H and improve the work environment,
the agency said.
April observation to focus on avoiding workplace accidents
Guyana Chronicle
1 April 2007
BEGINNING today, the government will heighten its focus on improving
conditions and safety at the workplace to counter work-related
accidents and diseases.
The Government Information Agency (GINA) said the thrust coincides with
Guyana’s observance of Occupational Safety and Health (OS&H) Month,
under the theme ‘Safe practices, healthy workforce, increased
production’.
GINA said the administration is concerned about the increasing cases of
accidents at workplaces and, to address the issue, has been advising
that OS&H committees be established and advocating that it is
everyone’s responsibility to be actively involved in the monitoring of
the work environment.
OS&H Month will be launched at Linden Hospital Complex in Region Ten
(Upper Demerara/Berbice) and, as part of the activities, the
responsible department in the Ministry of Labour will emphasise the
importance through seminars and lectures countrywide, GINA said.
According to GINA, Labour Minister Manzoor Nadir and staff of the
National Advisory Council on Occupational Safety and Health (NACOSH)
are expected to visit the Aroaima Mining Complex and the Russian
Aluminum Company (RUSAL) to conduct similar exercises with management
personnel and employees.
GINA said Guyana Telephone & Telegraph Company (GT&T), Guyana Power &
Light (GPL) and the Consultative Association of Guyanese Industries
(CAGI) will also be hosting series for their respective staffers on the
importance of practising OS&H.
On April 27, individuals and companies will be honoured for their
exemplary practices at a national awards ceremony and symposium, GINA
announced.
It said workplace hazards and exposures cause more than 160 million
workers to fall ill annually and the global estimate of work-related
deaths is about 1.1 million per year.
GINA said, in 1997, the Guyana Parliament passed the OS&H Act and it
was promulgated in 1999.
The law being a major movement in the transformation of the labour
sector, the government since established a National Occupational Safety
and Health Council, which is helping to formulate regulations to
enforce it.
With the assistance of the International Labour Organisation (ILO),
Guyana is preparing regulations that relate to occupational diseases,
construction safety, personal protective equipment, mining and
chemicals, GINA said.
Other regulations are being prepared for the agriculture, forestry,
mining, and industrial and manufacturing sectors.
Meantime, the Occupational Safety and Health Convention (Number 155)
and Recommendation (Number 164), both of 1981, provide for the adoption
of national occupational safety and health policies.
GINA said Guyana ratified Convention Number 161 of 1985, which provides
for the establishment of enterprise-level, occupational health services
designed to contribute to the implementation of the OS&H policy.
The convenant describes the actions to be taken by governments and
within enterprises, to promote OS&H and improve the work environment,
the agency said.
Guyana and the wider world 10
http://www.stabroeknews.com/index.pl/article?id=56517404
Guyana and the wider world
Back at the forest floor - what's going on?
By Janete Bulkan
Stabroek News
Sunday, April 1st 2007
Today's column marks the end of this ten-part series on Guyana's forest
sector. In previous columns I outlined the results of the failure to
put existing forest law and national policies into effect, or to
integrate the sector within the larger economy and society. This final
column highlights the abuse of our fragile and unique Guiana Shield
forests, including the excessive rates of selective cutting of premium
timber hardwoods in the areas controlled legally and illegally by the
Asian timber companies.
ASI - Accreditation Services International GmbH carried out its annual
audit of SGS (the company which first issued, then suspended, a Forest
Stewardship Council (FSC) certificate of good forest management to the
Barama Company), in November 2006. Its report catalogued a number of
failures by the certified company to comply with the FSC's Principles
and Criteria, including the lack of a public summary for the management
plan for the certified compartment 4 (378,596 ha)
(www.accreditation-services. com/ Documents/ ASI-Forest%20
Manage-ment%20Audit-Guyana-SGS-2006-Final.pdf). Incidentally, the
Timber Sales Agreement 04/91, the compartment boundary and logging
block and harvest area maps, the forest management and other
operational plans for Barama are not in the public domain. The Foreign
Direct Investment (FDI) arrangement negotiated by cabinet in February
1991 is only in the public domain because it was leaked in the
mid-1990s and extracts have been published by Marcus Colchester of the
World Rainforest Movement in 1997.
In addition, the Barama Company's own documentation issued for the
Initial Public Offering (IPO) of its parent Company SamLing Global
Limited on the Hong Kong stock exchange shows that the company is
cutting larger areas per year (about 50 per cent more) than is
compatible with the length of the felling cycle, that is, the time is
takes for forest re-growth before a logger can come back to cut
commercial-sized trees again in the same spot. Barama is not following
the precautions concerning felling cycles for individual species
mentioned on page 8 in the GFC Code of Practice for Timber Harvesting
(2nd edition, November 2002). The harvesting practices of the JaLing
company also violate these mandatory guidelines of the GFC.
Let us first consider extraction rates. SGS Qualifor quoted in February
2006 average extraction rates of 8-11 m3/ha by the Barama Company. What
is certain is that the Barama Company can only claim to be maintaining
an extraction rate that is far below the allowable harvest of 20 m3/ha
for a 40-year felling cycle if all timber species are lumped together.
However, the Code of Practice requires precaution against over-cutting
of individual species, and this precaution is not being followed. In
other words, Barama is 'creaming' the forest rapidly for a small number
of high-value timbers, most of which are being exported as unprocessed
logs to Asia, contravening both national policies in Guyana and the
intentions of Barama's foreign direct investment (FDI) arrangements.
These contraventions have been mentioned publicly by the Minister for
Forestry in his press conference on December 8, 2006
(http://www.stabroeknews.com/index.pl/article_general_news ?
id=56509485).
The Barama Company's TSA 04/1991 has a gross area of 1.61 million ha,
of which the net operable area is said to be 1.05 million ha. The
Barama Company determined that there were only 172,000 ha operable out
of 582,000 ha in compartments 1-3 located in the Port Kaituma area.
Barama cut over that 30 per cent of its TSA during 1993-2001. In other
words, the company cut 22,000 ha per year in an 8-year period. GFC's
standard felling cycle is 60 years so Barama should not have been
cutting more than 17,500 ha per year. Barama has argued that its
plywood timbers such as baromalli grow faster and therefore it should
be allowed a 40-year felling cycle. That would mean 26,200 ha per year,
which corresponds to its rate for compartments 1-3 when the Edinburgh
Centre for Tropical Forestry (ECTF) was monitoring on site.
Now consider the cutting rates in Barama's other compartments after
ECTF and DFID technical foresters had departed:
Compartments 4-5: gross area 589,000 ha, net operable area 497,000 ha
or 84 per cent of the gross area (apparently better or easier forest),
scheduled for 2004-2017. The company projects to cut over these two
compartments in 14 years which equals cutting over 36,000 ha per year,
which is twice as fast as the GFC's 60-year cycle (17,500 ha per year)
and almost 40 per cent faster than a possibly negotiable 40-year cycle
(26,200 ha per year).
Compartments 6-7: gross area 440,000 ha, net operable area 379,000 ha
or 86 per cent, scheduled for 2018-2027. The company projects to cut
over these two compartments in 10 years which equals cutting over
38,000 ha per year. This projected rate of extraction is similar to
compartments 4 and 5. It is 45 per cent too fast even for a 40-year
felling cycle.
The Asian logging companies, including the Barama Company, are highly
selective in the timbers they are logging. As this column and many
letter writers over the past year have shown, they are extracting and
shipping out the prime hardwood timbers, primarily greenheart and
purpleheart, and at declared prices which are far below international
CIF prices for technically comparable timbers from other tropical
countries. As last week's column mentioned, the Barama Company supplies
about half of the timber needs of its downstream timber processing
businesses in China; high-value office flooring - which we should be
able to produce in Guyana. Meanwhile, Barama has downsized its own
plywood business while other timber value added businesses are severely
hampered by the scarcity of the same timbers that are exported legally
and illegally ('baptised' under other names).
If this is bad, then page 8 of the Letter from the Board of the
Seapower Company documents a worse disregard for the GFC's Code of
Practice. JaLing grants its W & J Forest Resources Development Limited
(owned 50 per cent by JaLing and 50 per cent by Chu Wenze for Danny
Chan) the right to harvest 200,000 m3 per year. Reckoning on the GFC
harvest limit of 20 m3 per ha, and an overall harvestable volume of 2.8
million m3, this means a net operable area of 140,000 ha and a harvest
cycle of 14 years (15 years in the Letter), followed by 25 years of
fallow. This is not sustainable forest management in the sense of GFC's
Code of Practice on Timber Harvesting. These amount to piratical
cut-and-clear-out single-cut operations in forest areas controlled
legally and illegally by JaLing. Given current intensities of logging,
it is likely that the Chinese contractor Wuchang will extract much less
than 20 m3 per ha, so it will cut over more hectares per year to
achieve its 200,000 m3 target, and so rip through in even less than 15
years.
Guyanese might well ask: who was the bright spark proposing this
pillage? One of the suspects is an ex-Barama manager, also active in
the preparation of similar management plans for Karlam and Timber World
and a host of other carpet-bagging Asian timber companies. This
ex-Barama manager is also a shareholder in some of the companies, and
he acts as a go-between these companies and the state regulatory
agency. The question is: who is monitoring Guyana's interests,
including the pillaged forests, as required by Article 36 of the
National Constitution? - "In the interests of the present and future
generations, the State will protect and make rational use of its land,
mineral and water resources…" And why has the GFC taken its Code of
Practice for Timber Harvesting off its website?
Guyana and the wider world
Back at the forest floor - what's going on?
By Janete Bulkan
Stabroek News
Sunday, April 1st 2007
Today's column marks the end of this ten-part series on Guyana's forest
sector. In previous columns I outlined the results of the failure to
put existing forest law and national policies into effect, or to
integrate the sector within the larger economy and society. This final
column highlights the abuse of our fragile and unique Guiana Shield
forests, including the excessive rates of selective cutting of premium
timber hardwoods in the areas controlled legally and illegally by the
Asian timber companies.
ASI - Accreditation Services International GmbH carried out its annual
audit of SGS (the company which first issued, then suspended, a Forest
Stewardship Council (FSC) certificate of good forest management to the
Barama Company), in November 2006. Its report catalogued a number of
failures by the certified company to comply with the FSC's Principles
and Criteria, including the lack of a public summary for the management
plan for the certified compartment 4 (378,596 ha)
(www.accreditation-services. com/ Documents/ ASI-Forest%20
Manage-ment%20Audit-Guyana-SGS-2006-Final.pdf). Incidentally, the
Timber Sales Agreement 04/91, the compartment boundary and logging
block and harvest area maps, the forest management and other
operational plans for Barama are not in the public domain. The Foreign
Direct Investment (FDI) arrangement negotiated by cabinet in February
1991 is only in the public domain because it was leaked in the
mid-1990s and extracts have been published by Marcus Colchester of the
World Rainforest Movement in 1997.
In addition, the Barama Company's own documentation issued for the
Initial Public Offering (IPO) of its parent Company SamLing Global
Limited on the Hong Kong stock exchange shows that the company is
cutting larger areas per year (about 50 per cent more) than is
compatible with the length of the felling cycle, that is, the time is
takes for forest re-growth before a logger can come back to cut
commercial-sized trees again in the same spot. Barama is not following
the precautions concerning felling cycles for individual species
mentioned on page 8 in the GFC Code of Practice for Timber Harvesting
(2nd edition, November 2002). The harvesting practices of the JaLing
company also violate these mandatory guidelines of the GFC.
Let us first consider extraction rates. SGS Qualifor quoted in February
2006 average extraction rates of 8-11 m3/ha by the Barama Company. What
is certain is that the Barama Company can only claim to be maintaining
an extraction rate that is far below the allowable harvest of 20 m3/ha
for a 40-year felling cycle if all timber species are lumped together.
However, the Code of Practice requires precaution against over-cutting
of individual species, and this precaution is not being followed. In
other words, Barama is 'creaming' the forest rapidly for a small number
of high-value timbers, most of which are being exported as unprocessed
logs to Asia, contravening both national policies in Guyana and the
intentions of Barama's foreign direct investment (FDI) arrangements.
These contraventions have been mentioned publicly by the Minister for
Forestry in his press conference on December 8, 2006
(http://www.stabroeknews.com
id=56509485).
The Barama Company's TSA 04/1991 has a gross area of 1.61 million ha,
of which the net operable area is said to be 1.05 million ha. The
Barama Company determined that there were only 172,000 ha operable out
of 582,000 ha in compartments 1-3 located in the Port Kaituma area.
Barama cut over that 30 per cent of its TSA during 1993-2001. In other
words, the company cut 22,000 ha per year in an 8-year period. GFC's
standard felling cycle is 60 years so Barama should not have been
cutting more than 17,500 ha per year. Barama has argued that its
plywood timbers such as baromalli grow faster and therefore it should
be allowed a 40-year felling cycle. That would mean 26,200 ha per year,
which corresponds to its rate for compartments 1-3 when the Edinburgh
Centre for Tropical Forestry (ECTF) was monitoring on site.
Now consider the cutting rates in Barama's other compartments after
ECTF and DFID technical foresters had departed:
Compartments 4-5: gross area 589,000 ha, net operable area 497,000 ha
or 84 per cent of the gross area (apparently better or easier forest),
scheduled for 2004-2017. The company projects to cut over these two
compartments in 14 years which equals cutting over 36,000 ha per year,
which is twice as fast as the GFC's 60-year cycle (17,500 ha per year)
and almost 40 per cent faster than a possibly negotiable 40-year cycle
(26,200 ha per year).
Compartments 6-7: gross area 440,000 ha, net operable area 379,000 ha
or 86 per cent, scheduled for 2018-2027. The company projects to cut
over these two compartments in 10 years which equals cutting over
38,000 ha per year. This projected rate of extraction is similar to
compartments 4 and 5. It is 45 per cent too fast even for a 40-year
felling cycle.
The Asian logging companies, including the Barama Company, are highly
selective in the timbers they are logging. As this column and many
letter writers over the past year have shown, they are extracting and
shipping out the prime hardwood timbers, primarily greenheart and
purpleheart, and at declared prices which are far below international
CIF prices for technically comparable timbers from other tropical
countries. As last week's column mentioned, the Barama Company supplies
about half of the timber needs of its downstream timber processing
businesses in China; high-value office flooring - which we should be
able to produce in Guyana. Meanwhile, Barama has downsized its own
plywood business while other timber value added businesses are severely
hampered by the scarcity of the same timbers that are exported legally
and illegally ('baptised' under other names).
If this is bad, then page 8 of the Letter from the Board of the
Seapower Company documents a worse disregard for the GFC's Code of
Practice. JaLing grants its W & J Forest Resources Development Limited
(owned 50 per cent by JaLing and 50 per cent by Chu Wenze for Danny
Chan) the right to harvest 200,000 m3 per year. Reckoning on the GFC
harvest limit of 20 m3 per ha, and an overall harvestable volume of 2.8
million m3, this means a net operable area of 140,000 ha and a harvest
cycle of 14 years (15 years in the Letter), followed by 25 years of
fallow. This is not sustainable forest management in the sense of GFC's
Code of Practice on Timber Harvesting. These amount to piratical
cut-and-clear-out single-cut operations in forest areas controlled
legally and illegally by JaLing. Given current intensities of logging,
it is likely that the Chinese contractor Wuchang will extract much less
than 20 m3 per ha, so it will cut over more hectares per year to
achieve its 200,000 m3 target, and so rip through in even less than 15
years.
Guyanese might well ask: who was the bright spark proposing this
pillage? One of the suspects is an ex-Barama manager, also active in
the preparation of similar management plans for Karlam and Timber World
and a host of other carpet-bagging Asian timber companies. This
ex-Barama manager is also a shareholder in some of the companies, and
he acts as a go-between these companies and the state regulatory
agency. The question is: who is monitoring Guyana's interests,
including the pillaged forests, as required by Article 36 of the
National Constitution? - "In the interests of the present and future
generations, the State will protect and make rational use of its land,
mineral and water resources…" And why has the GFC taken its Code of
Practice for Timber Harvesting off its website?
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