The Ministry of Agriculture has signed a deal with Try Pheap Import Export to give the firm the right to purchase all timber felled in economic land concessions (ELCs) in Ratanakkiri province, according to a letter sent from the Agriculture Ministry to the Forestry Administration in February.
Signed by Lor Raksmey, secretary-general at the Ministry of Agriculture, and sent to Forestry Administration chief Chheng Kim Sun, the letter says that the firm owned by well-connected casino, mining and agriculture mogul Try Pheap has been granted purchasing rights over timber in Ratanakkiri in order “to meet local demand and for export” and “generate royalties and dividends for the state’s budget.”
“The Forestry Administration will allow Try Pheap Import Export to buy wood from every economic land concession located in Ratanakkiri province,” the letter, dated February 26, reads.
Though a senior official in the province said the agreement will help improve the regulation of Ratanakkiri’s timber trade by directing felled trees through only one company, a provincial land rights monitor said the deal would create a market that encourages illegal logging and accelerate the rate at which the forest is being deforested.
“Giving the rights to Try Pheap company to buy trees cut down within the concession zones is very useful to curb illegal transportation and improve good management of felled timber from concession areas that is transported to other areas,” said Ratanakkiri provincial governor Pav Horm Phan.
Although concessionaires are required under law to log only within their ELCs and pay royalties on any timber they extract, community activists and environmental monitors have complained that many companies regularly cut down trees outside of their concession and systematically smuggle logs across the border to be sold in Vietnam.
Mr. Horm Phan said, however, that the agreement with Try Pheap would allow companies operating ELCs to more easily transport timber through legal channels and allow them to focus on stimulating the economy by planting crops on their cleared land.
“Now there is an existing legal buyer to buy wood,” said Mr. Horm Phan.
“The economic concession companies no longer need to worry about finding a market to sell their wood to.”
However, Pen Bonnar, senior investigator for land rights and natural resources with the local rights group Adhoc, said that the deal would have the opposite effect, encouraging companies to log outside of their ELCs and hastening the decimation of Ratanakkiri’s pristine forests and protected natural parks.
“Previously, there was no [automatic] market or buyers [for this timber in Cambodia], so the companies needed to find the buyer themselves and transport all of the wood,” said Mr. Bonnar. “Now there is a market here, so the forest will be gone,” he said.
Cambodia’s government has granted ELCs in Ratanakkiri to 27 companies covering a total of 222,933 hectares, according to figures compiled by Adhoc.
Almost half of these concessions—108,513 hectares—are located inside the protected Virachey National Park, a 330,000 hectare Asean Heritage-listed forest that is considered a key regional conservation area.
Though ELCs were created by the government to boost Cambodia’s agricultural output and create jobs in rural areas, they have been derided by rights groups and forestry activists, who say they are being used as a means to circumvent a 2002 moratorium on commercial logging.
In February 2011, Prime Minister Hun Sen granted Try Pheap two 70-year leases covering 18,855 hectares within the park in Cambodia’s remote northeast.
In May of that year, Mr. Pheap’s company was awarded another 9,916-hectare concession for a rubber plantation in Boeng Per Wildlife Sanctuary in Preah Vihear province.
Following the granting of the concession in Boeng Per, Mr. Pheap donated $130,000 to the sanctuary’s environment management and the local branch of the CPP party to build new office buildings, along with buying new motorbikes and digital cameras for officials working in the sanctuary.
In January 2011, Try Pheap Import Export, along with a number of other companies, had concessions in Mondolkiri province canceled due to what the government said was a lack of investment and development of its ELCs.
Contacted Tuesday, Bi Chivoandara, a representative of Try Pheap Import Export in Ratanakkiri province, confirmed that the company has received the rights to buy felled logs from all ELCs in Ratanakkiri, but declined to elaborate on details of the company’s timber-purchasing plan.
The letter from the Ministry of Agriculture says that Try Pheap Import Export “shall directly contact every economic land concession company” but did not specify how companies would be compelled to cooperate with Try Pheap Import Export or whether there would be any punishment if concessionaires sold timber to other buyers.
Tim Sipha, chief of the Forestry Administration’s legislation and law enforcement department, said that he was not familiar with the decision and referred questions to Mr. Kim Sun, his boss, who could not be reached for comment.
Agriculture Minister Chan Sarun and his secretary-general, Mr. Raksmey, who signed the agreement with Try Pheap, also could not be reached.