Myanmar Looks Towards Logging Teak Forests
8/17/99
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Title: Myanmar Looks Towards Logging Teak Forests
Source: Environment News Service
Status: Copyright 1999, contact source for permission to reprint
Date: August 17, 1999
YANGON, Myanmar, August 17, 1999 (ENS) - Myanmar's vast untapped
forest resources include over 80 percent of the world's remaining
teak trees and a variety of rare hardwoods, according to a new report
issued Monday by James Finch and Saw Soe Phone Myint, who are
associates of the law firm of Russin & Vecchi in Yangon.
Published in East Asian Executive Reports, the detailed report says
the success of the government's forest development policies will
depend in part on "the black letter law, that is, the formal rules"
but more importantly on the administrative skills and resources of
the Forestry Ministry officials and other Myanmar government officials.
Foreigners and foreign companies can participate in competitive
bidding to buy previously harvested teak logs and other hardwoods and
export them, under conditions prescribed by the Myanmar Timber
Enterprise (MTE), which is owned by the Ministry of Forestry.
In theory, Finch and Myint explain, a mechanism exists under the
Forest Law promulgated in 1995 for allowing private enterprises to
extract teak and other hardwoods from forest areas for export.
Permits, competitive bidding, both open and sealed, are theoretically
allowed.
"In practice, however, no such private sector extraction from forest
lands has been allowed since 1993," the authors say. "It was allowed
on a limited basis from 1991 to 1993, but the Ministry of Forestry
was not satisfied with the results, at least in part because of
alleged excesses by middlemen."
Since 1993, MTE has done all harvesting of hardwoods. The hardwoods
are then disposed of in various ways, including through the sale in
lots to private enterprises.
Foreign investors may participate in Myanmar's forest sector in four
ways:
1. through a joint venture with a state-owned economic enterprise
such as MTE
2. through a joint venture with a private company in Myanmar
3. through a 100-percent foreign-owned company
4. by simply bidding on and purchasing tendered lots of previously
harvested forest products for export, without forming a
company in Myanmar.
The advantage of a joint venture with a state enterprise, Finch and
Myint say, is that the Ministry of Forestry controls all extraction
of forest products. A joint venture with a state enterprise such as
MTE is, therefore, assured of receiving enough raw materials for its
operations.