Despite Ban, Hong Kong Firm Eyes Kratie Timber

Company Says Land Concession Allows Commercial Logging

Despite a standing moratorium on logging concessions across the country, a Hong Kong logging firm has announced plans to start clearing more than 11,000 hectares of forest in Kratie province by early next year.

China Asean Resources Ltd posted its $42.5 million plan to take over and log 11,500 hectares in the province’s Chet Borei district, the former Kratie district, on the Hong Kong stock exchange’s Growth Enterprise Market late last month.

In its statement, the company called forestland and timber reserves the “lifeblood” of its business and said it had already started clearing 19,500 hectares in the district with an estimated 5 million cubic meters of timber.

Under pressure from conservation groups to stem the rapid loss of Cambodia’s forests to commercial loggers, the government imposed a moratorium on logging concessions in 2002. Forestry Administration spokesman Thun Sarath said this week that the moratorium remained in place.

Alan Leung, China Resource’s executive director, defended the firm’s logging as part of an economic land concession that it plans to turn into a rubber plantation.

“We log in preparation of planting of rubber seedlings,” he said this week by e-mail. “Once the deal is completed, we should start land clearing in first half 2011.”

Rubber harvesting would start by 2016, he added.

NGOs and conservation groups, however, have blamed the economic land concession system for allowing the commercial logging of broad tracts to continue under legal cover.

In the run-up to an aid-pledging meeting between the government and its foreign donors in June, some local NGOs urged donors to press the government for a moratorium on not only logging concessions but economic land concessions as well.

“In most cases, investors simply cut down the forests and left the land idle or held onto the concessions waiting for the land to increase in value,” their letter read, citing a 2009 report by German development agency GTZ.

In 2007, the UN human rights envoy to Cambodia said economic land concessions were being granted “over forested areas and former forest concessions, contrary to the Forestry Law and forestry regulations.”

Thun Saray, president of rights group Adhoc, said the practice persists.

“The problem is when [they] cut the big trees and do the plantation later on,” he said. “We still see a lot of that.”

The government does occasionally cancel dormant concessions. But if they have already cleared the area of its forest, he said, “it’s too late.”

Ith Nody, an undersecretary of state at the Agriculture Ministry who oversees economic land concessions, rejected claims that the concessions give cover to outright logging.

“The government provides the economic land concessions in degraded forests only,” he said, in the system’s defense.

Under its Cambodian subsidiary, Tong Min, China Asean has already cleared 450 hectares on its current concessions in Chet Borei district to make way for rubber trees, access roads and a timber factory, Mr Leung said. The firm’s website lists its Chet Borei district concessions as its only business venture.

In its stock exchange statement, the firm said its on-site sawn timber factory “is far from sufficient to utilize the abundant natural resources owned by the group at a meaningful pace.” It laid out plans for a second factory to produce wood flooring material with an eye toward unmet demand for wood products in China.

The statement also highlights the proximity of its new acquisition to its current concessions as a chance to improve the efficiency of its logging operations over a combined 31,000 hectares.

Koy Huot, director of the provincial agriculture department, confirmed Tong Min’s current activities in the district but said that the firm had also started clearing for a rubber plantation in Sambor district, which neither the firm’s website nor its stock exchange statement mentioned.

According to the Danish International Development Agency, which has helped the government map the country’s tree cover, Chet Borei district is home to mostly dry forests with a prevalence of second and third-grade tree species popular with construction material suppliers.

Mr Nody said he had not heard of China Asean’s plans in Kratie and said the transfer of any concession rights must be cleared by the government.

According to its stock exchange statement, China Asean agreed to buy the rights to the concession with $42.5 million worth of shares and bonds on July 22, with ownership transferred from United Sky Investments and Jethero International, companies incorporated in British Virgin Islands.


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