Companies to Reject Logging Moratorium

Six logging companies have rejected the government’s moratorium on logging, alleging the order is a breach of contract.

The companies—Everbright, Kingwood, Pheapimex, Mieng Ly Heng, Cherndar Plywood and Silveroad—say the contracts granting them timber concessions remain valid, said David Cha­niawa, a lawyer representing the companies.

“The government of a country cannot just use its power to issue orders that affect the business partners it has contracts with,” Chaniawa said.

Prime Minister Hun Sen an­nounced the moratorium on Dec 11, saying it was in response to deforestation. Scheduled to take effect Jan 1, the order requires logging concessionaires to conduct assessments of the environmental and socioeconomic im­pact of their activities before they can begin logging under new contracts.

A letter issued by the six companies says the moratorium is a breach of the 30-year contracts the government gave the companies in 1994.

In addition, since some of the concessionaires are Chinese state-owned firms, the letter accuses the government of violating an agreement between China and Cambodia to promote and protect each other’s investments. The agreement was signed in Beijing in 1996.

Chanaiwa said he is sending a proposal for a new contract today to Hun Sen’s Cabinet, the Council of Ministers and the Ministry of Agriculture, Forestry and Fisheries. The companies hope to negotiate with the government, the attorney said.

“Negotiation is the only way to build trust, both with current and future investors,” Chanaiwa said. If this is not done, the government will lose foreign investment, he said.

“I want to protect the forest, too. But let it be done by law, not by power,” Chanaiwa said.

Ty Sokhun, director of the forestry department for the Agriculture Ministry, said the ministry must follow orders from those higher in government. He said the ministry plans tough enforcement of the temporary moratorium, including scrutiny of the impact studies the companies will be required to conduct.

Reviewing the studies may take three to six months, Ty Sokhun said.  “We won’t accept any unclear reports from the logging companies,” he promised.

The companies protesting the moratorium have ceased work since the order was announced, and have allowed government officials to visit and study them, Chanaiwa said.

Logging companies in Kratie province have stopped cutting, but are still preparing to export trees felled before the order, Kratie Governor Loy Sophat said.

At a meeting of international donors in June, the donors recommended a logging moratorium. The next donor meeting is Jan 16 in Phnom Penh.

The moratorium was not intended to placate the donors, but was a good-faith effort to uphold international forestry standards, Ty Sokhun said.

The UK-based environmental watchdog group Global Witness, which has been lobbying since 1995 for a crackdown on logging, applauded the moratorium, but cautioned the government will have to hold its ground against the logging companies—all of whom, Global Witness claims, have abused their contracts in the past.

“Will the government be able to enforce the ban in a meaningful way? Considering the history of this place, that is something we are going to have to wait and see,” said Global Witness country co-director Eva Galabru.

 

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