Report: Logging Firm Not Paying Royalties

Forestry officials are investigating charges that a Chinese-owned firm has logged a Kom­pong Speu castor-oil plantation without paying royalties on the logs to the government.

Meanwhile, a report by a respected think tank found that agriculture concessions like the one in Kompong Speu could become “a ‘loophole’ for forest exploitation” even as a government-imposed suspension of logging in forest concessions continues.

The investigation follows a July 8 visit to the plantation by Global Witness, in which the independent forestry monitor found that at least 5,000 logs had been cut and a large sawmill was operating on the site, said Eva Galabru, Global Witness country director. The logging is being done by Pheapimex, which Global Witness labels one of the industry’s worst offenders, Galabru said.

Forestry officials had received reports that the concession holder, Cambodia Haining Group, intended to burn the logs, said Dennis Cengel, an adviser to the Department of Forestry and Wildlife in the Ministry of Agri­culture, Forestry and Fish­eries. In­stead, Haining was asked by the government to harvest and sell them so that royalties could be paid, he said.

The company was also ordered to stop logging while a team of forestry officials investigated, he said.

The 23,000-hectare concession in Phnom Sruoch and Oral districts was granted by the government in 1998 and originally intended for cassava and palm oil, according to Ministry of Agri­culture records. Instead, Global Witness found a small trial plantation of castor oil plants, Galabru said. The plants’ beans are poisonous and require safeguards to prevent injury to workers and villagers, she said. Castor oil is an ingredient in laxatives, lubricants and other products.

Kompong Speu Second Dep­uty Governor Phauk Sam En said the Haining Group was not al­lowed to run a lumber mill and pledged to “crack down” on the com­pany if wrongdoing was found.

In January, the government sus­pended all logging in forest concessions while ordering concession owners to create plans for sustainable forest management. But logging is permitted in agricultural concessions like the one in Kompong Speu, Cengel said.

Forty agricultural concessions have been granted by the Council of Ministers containing more than 800,000 hectares of land. The land is “mainly located in fo­rested areas,” according to the Cam­­­bo­dia Development Re­source Insti­tute.

Relying mostly on government statistics, the CDRI found that 14 are larger than the 10,000 hectare limit set by this year’s land law, which says existing plantations over that size must be split up.

The study found that most concessions are poorly defined and underdeveloped. Fifteen do not have required contracts with the Ministry of Agriculture.

Of the 25 that remain, only eight have paid mandatory de­posits to the government. Only 10 have demarcated their boundaries. And 16 are plagued by land conflicts with local villagers.

Land concessions apparently do not have to submit to the same bidding processes and management requirements as forest concessions, the report says. “This may be a ‘loophole’ for forest implementation,” states the study, which was released last week.

The Kompong Speu plantation is also located on disputed land, and there has been no required environmental impact assessment study, Galabru said. The watch­dog agency has also war­ned of logging in the Tumring Rub­ber Plantation in Kompong Thom.

“Ever since the logging moratorium was passed, we were warning that the land concessions would be a loophole,” she said.

Haining office supervisor Xiao Wen Hui did not return a phone call for comment. A woman who took a message for him said the company would prefer not to talk to the media because it wants to keep its business “secret.”