Forest Monitor Faces Allegations of Corruption

The government’s choice of Swiss firm Societe Generale de Surveillance as its new forest monitor has encountered a multitude of criticisms from NGOs and the Alliance of Democrats since its announcement.

Arguably the most damning is the Alliance’s charge of corruption. A Saturday statement cited a Financial Times story from March 13, 1998, in which, the Alliance alleged, SGS admitted to spending millions of dollars in bribes in 1994 to secure a $150 million contract from the administration of former Pakistani prime minister Benazir Bhutto.

The Alliance compared the choice of SGS as forestry monitor to “allowing Dracula to take charge of the blood bank.”

“To be honest, I don’t know about the situation in Pakistan,” Bruce Telfer, SGS’ Asia Paci­fic manager for natural resources, said Monday.

Telfer said he had just arrived in Cambodia and had not seen the Alliance’s statement. He also said he had not had the opportunity to confer with government officials but would issue a statement Tuesday.

His assistant said Tuesday the statement had not arrived from SGS headquarters in Geneva.

However, Telfer said he had heard of SGS having some troubles in Pakistan, but its office remains open there.

SGS says it has operations in 140 countries.

The Alliance also called on the World Bank, whose loan will finance the hiring of SGS, to freeze the contract, saying that the “caretaker government cannot, in principle, commit the country to any long-term loan arrangement, and the World Bank should know that.”

William Magrath, a World Bank natural resources economist, declined to comment on the legality of the loan.

Article 90 of the Constitution says that all loans to the government must be approved by a simple majority of the National Assembly.

Magrath also said he had no knowledge of an alleged SGS-Pakistan graft scandal.

Complaints from forestry NGOs, echoed by the Alliance, have focused on Cambodia’s disappearing timber resources and the government’s role in their departure.

David Mead, the recently departed former director of Conservation International, on Saturday said, “Part of the problem I have is we’re continuing to put money into an organization, which is the Department of Forestry and Wildlife, that could be part of the solution but is very much part of the problem.”

On Nov 21, the World Bank announced to donors and NGO representatives that it would be spending about $2.3 million, remaining from its Learning and Innovation Loan, on facilities and equipment for the forestry department.

“It’s designed to build systems for the routine management of forests,” Magrath said Monday.

Some members of the forestry department, as well as police, military police and soldiers, have discredited their positions repeatedly with involvement in illegal logging.

Mead recommended the establishment of a new semi-independent authority, one with the power and capability to enforce and prosecute forestry law.

Also included in the Learning and Innovation Loan will be the funding for SGS, Magrath said.

Hiring a new forest monitor is conditional to the disbursement of a second World Bank government loan, the Structural Adjustment Credit, worth $15.8 million.

That money was being withheld until the government made significant forestry reforms. Now, with the contracting of SGS, “the government’s actions are finished,” Magrath said.

Following the World Bank’s Nov 21 meeting with donors, Mead wrote to Homi Kharas, a senior World Bank official based in Washington, criticizing the Bank for putting attendees in the position of “rubber stamping” its prior decision to hire SGS to fulfill a condition of the Structural Adjustment Credit.

Mead castigated the event as another case of no transparency and unprofessionalism.

According to Mead, the World Bank had graded the Learning and Innovation Loan unsatisfactory. Now it is being extended and used to enable the release of another loan.

“Some people might have a problem with that,” Mead said.

Magrath said that “unsatisfactory” is a World Bank internal assessment that does not imply cancellation of a project, only that its intended outcome is at risk.

Magrath said that although donors agreed on the need for a new monitor, no one except the World Bank was willing to spend the money. He dismissed the idea that the World Bank was biased toward SGS, saying it had been prepared to finance the previous monitor, Global Witness, as well.

Prime Minister Hun Sen broke ties with London-based NGO Global Witness in April after accusing it of exaggerating forest degradation.

Magrath said Tuesday that invitations to bid for the position of forest monitor had been disseminated “far and wide” based on a short list of candidates compiled by donors and government.

He declined to say how many candidates submitted proper bids, but said the process was up to World Bank standards.

On Monday Magrath had said that at least three NGOs and several commercial companies had been invited to bid. “Out of that process, SGS emerged the winner,” he said.

Eva Galabru, former Global Witness country director, said Tuesday Magrath had told her only one complete bid had been submitted.

Aside from the hiring of SGS, critics have voiced concern over the government’s revised role of the forest monitor.

According to an SGS statement issued in July, the Ministry of Agriculture had invited it to bid for the job of assessing the “completeness, accuracy and credibility” of government forest crime reports.

Whereas Global Witness went into the forest looking for loggers, SGS said it will send foresters to Cambodia to examine reports that Magrath said Monday were untrustworthy.

Marcus Hardtke, a forest crimes investigator who has worked with Global Witness in Cambodia for almost four years, compared hiring foresters to monitor Cambodia’s rampant illegal logging to using auto mechanics to regulate traffic systems.

“You’re dealing with crime usually,” he said. “A little technician who learned how to cut wood will not be able to do this job.”

Asked about the new monitoring strategy, Magrath said, “SGS can do as much fieldwork as it wants.”

According to SGS’ statement, and its previous negotiations for forest monitor contract, that will be none.

In 1997, the government courted SGS to be its forest monitor—a role that at first only entailed checking timber exports along Cambodia’s borders.

But when the government decided the logging ban needed to be enforced within concession areas, SGS pulled out, largely because hard-line and defected Khmer Rouge soldiers were in the forests, an SGS official said at the time.

“We felt this new proposal was something that SGS normally does not get involved in,” SGS Chief Executive Richard Hines said then. “We are not a paramilitary force—we are a purveyor of information.”

Today’s critics of the forest monitoring job say they don’t see SGS’ paperwork as a deterrent to loggers whose activities are picking up again.

“The anarchic logging that we were seeing in 1999 is coming back,” said Galabru.

She cited the reallocation of logging concessions for other uses, which entail cutting trees, as evidence the government is not concerned.

Magrath agreed the logging is widespread.

“There is illegal logging in Cambodia. We know its a serious problem, and we know its not being controlled in the way we would like it to be controlled,” he said.

“Our main focus is trying to get to routine forest management,” Magrath said, acknowledging that to be a long range aim.

Meanwhile, “it’s essential to understand what is happening in the way of illegal logging and that’s the role of the forest crimes monitor,” he said.


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