"Asian logging giants extend reach: Rainforests are major targets"


CNN News

August 18, 1996
Web posted at: 3:24 p.m. EDT (1924 GMT)

KUCHING, Malaysia (AP) -- Flush with expertise and profits from felling local rainforests, Asian logging companies have begun stripping millions of acres of timberland around the world.

Their reach extends from South Pacific islands to pristine forests in Latin America and Africa. According to an Associated Press survey, their operations are accelerating -- as is the opposition they face from indigenous people and environmentalists.

With Malaysians and Indonesians at the forefront, Asian companies started moving out in the mid-1980s. They now dominate rainforest logging worldwide.

Some of their concessions are already the size of small countries, and their sights are set on such riches as Brazil's Amazon forests.

"What we are witnessing today is a relatively new trend of 'South-South colonialism,' whereby southern transnational companies are making heavy investments in other 'more backward' Third World countries," said Marcus Colchester of the Britain-based World Rainforest Movement.

Along with investments, the companies transfer the political patronage systems, corruption and poor environmental practices of their own societies, he said.

Companies contacted insist they are practicing sustainable logging that will not destroy forests. They project themselves as entrepreneurs from dynamic economies that less developed nations should emulate.

But in a clash that appears to leave little middle ground, conservationists charge that many loggers operate like "robber barons," depleting an ecologically important resource at unconscionable rates and violating native rights.

"That's not to say there aren't bad European and American companies, but Asians are the worst," said Jean-Paul Jeanreneaud of the Switzerland-based World Wide Fund for Nature. "They are more cavalier, less concerned about environmental and social issues. And they're all over the place."

A study financed by the World Bank and the United Nations warned in early August that logging is endangering half of the world's remaining 5 billion acres of tropical forest. It said the rest is threatened by slash-and-burn farming techniques used by primitive peoples.

Among recent findings by Associated Press reporters in Latin America, Asia and Africa:

-- The next major targets for Asian loggers are the Amazon, probably the world's top timber source in the coming decade, and Africa, where European logging companies have tended to dominate.

Major players are WTK Group, Samling, Ribunan Hijau and Mingo of Malaysia and Fortune Timber of Taiwan. On the doorstep are several companies from China.

Asian companies have bought 8.6 million acres in the Brazilian Amazon. Purchases over the next two years could reach 22.2 million acres, or about 15 percent of the harvestable forest.

"By the end of next year, the Amazon lumber industry will have a new face -- an Asian one," said Francisco Coelho, president of the Amazonas State Sawyers Syndicate.

Coelho very much favors the Asian invasion, as do most Amazon loggers, who are competing to sell land and sawmills to the newcomers. Regional demand for lumber has sagged, and the Asians represent money and jobs.

Brazil's president, Fernando Henrique Cardoso, is trying to put the brakes on. In late July, he decreed a two-year suspension for awarding new logging concessions for mahogany and other rare hardwoods. He also said current concessions would be revoked for any companies that do practice sustainable logging.

-- In Guyana, a Malaysian-South Korean venture, Barama Co., has been granted a concession half the size of Belgium. Neighboring Suriname says it hopes to hand out a similar parcel to Berjaya Group of Malaysia.

'Easy victims'

The World Wide Fund for Nature says the two economically struggling South American countries have become "easy victims" of loggers moving into some of the world's most unspoiled forests.

The Berjaya concession is bound by stringent rules restricting cutting to 55 percent of trees and forbidding logging within 4 1/2 miles of tribal villages. But Suriname officials admit they have been unable to police a 150,000- acre concession where they say Indonesia's MUSA company is violating its agreement by clear cutting vast stands and felling more trees than allowed.

Flying over the MUSA concession, an AP reporter saw acres of scarred, red earth hewn out of a jungle thick with towering trees draped with lianas and orchids. On the ground, tribesmen said the squawk of parrots has been replaced by the whine of saws.

-- In the Solomon Islands of the South Pacific, which are predicted to be denuded within a decade, public outrage was ignited last year by the revelation that bribes were paid to seven government ministers by Malaysian logging firms.

On one of the islands, Pavuvu, disputes between landowners and a pro-logging government led to the murder last year of a community leader and the burning of bulldozers owned by Maving Brothers, a Malaysian company that has already logged half of Pavuvu.

-- Closer to home, Cambodia has sold off virtually all its forests, outside of reserves. Indonesia's Macro-Panin acquired a 3.4 million-acre concession and Samling snapped up 1.9 million acres. Companies from Thailand, which has ravaged its own forests, also are big players -- legal and illegal -- in Cambodia as well in Burma and Laos.

'Accountable to nobody'

Lafcadio Cortesi, a researcher for the environmental group Greenpeace, said Malaysian firms -- mainly subsidiaries of Rimbunan Hijau -- are wreaking havoc on Papua New Guinea, which has the largest rainforest cover in the Asia-Pacific region.

He said they violate established conservation practices by cutting on slopes of more than 30 degrees, which causes soil erosion, and within 50 yards of streams, which pollutes the waterways. They also have illegally exported timber and bulldozed sacred sites, he charged.

"The companies are accountable to nobody. They are basically breaking every law in the book and the government is turning a blind eye," Cortesi said.

A Rimbunan Hijau executive, Francis Tiong, called the allegations "typical of the misinformation and exaggeration that people of their kind have been using for years." Tiong said his company obeys local laws and its operations are monitored by the authorities.

"After paying our taxes, levies and royalty to the state, forestry companies like ours also contribute to the local land owner community by building roads, air strips, bridges and providing health care," he said.

In Malaysia's Sarawak state, where the major Malaysian loggers are based, Minister of Environment James Wong Kim Min said in an interview: "So far we have not heard anything bad (about Malaysian loggers abroad). Of course they are businessmen, so if they can make a quick buck they will do it. But they have to preserve good relations and follow laws of the host government."

Malaysia's official news agency, Bernama, has complained that Malaysian companies are often lured to other nations with attractive incentives only to find agreements not honored, sudden taxes imposed and their reputations tarnished by non- governmental organizations.

"One can imagine the complications the loggers have to encounter when they have to deal with no less than 800 different tribes in Papua New Guinea," it wrote earlier this year.

But environmental groups describe a far different scenario: Many Asian companies gain foot-holds through hostile takeovers or by buying concessions from locals. Often cemented by bribes, they form alliances with the elites that enable them to skirt laws, win virtually every legal case brought against them and sometimes affect national legislation.

Dire consequences

The investment that outsiders bring is at least initially welcomed by host governments and local business partners. But the consequences for rainforest inhabitants can be dire.

The tribal peoples of Papua New Guinea's East Sepik Province protest the befouling of their streams by uncontrolled logging. The Indians of Guyana say loggers have bulldozed their crops. Melanesians in the South Pacific charge that their traditional land has been swindled from them and turned into "logging fields." Asian companies are involved in every case.

The expansion of Asian loggers occurred as world prices for tropical hardwoods like mahogany and teak as much as tripled. Traditional suppliers, including Nigeria and Ghana, had logged themselves out of the market, creating shortages.

Seeing the day their own forests would be exhausted and faced by growing restrictions at home, Asian logging companies moved farther afield in search of less stringent regulations. These companies are now working in about 20 countries, and the expansion is far from over.

Some of the biggest are run from Kuching, capital of Sarawak state, a onetime backwater on the island of Borneo now studded with high-rise hotels and gleaming government buildings erected largely from timber profits.

Companies like Samling and Rimbunan Hijau were able to take off via lucrative and extensive concessions on their homeground, site of one of the world's oldest rainforests.

Much criticized by conservationists, the powerful, government-backed loggers came into conflict with Penans, Ibans and other Sarawak ethnic groups and in almost every case won out.

"They're practicing the same system in other countries now," said Harrison Ngau, a leading environmental activist in Sarawak and former member of Parliament. "If they do what they have done to us, then we feel very sorry."

Copyright 1996 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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