***********************************************
WORLDWIDE
FOREST/BIODIVERSITY CAMPAIGN NEWS
Japanese
Logging in Bolivia
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Forest
Networking a Project of Ecological Enterprises
April
26, 1995
OVERVIEW
& SOURCE
Following
is a very comprehensive assessment of the forest
industry
in Bolivia, and in particular Japanese logging interest
involvement. Industrial logging operations have
caused
significant
social and environmental changes in the region. The
report
was compiled by Japan-Brazil Network (JBN) in April 1995
based
on study contracted by Rainforest Action Network (RAN) in
San
Francisco, USA. It was posted in
econet's rainfor.general
conference. For further information on EcoNet
membership, a
nonprofit
online system, send any message to <econet-
info@igc.apc.org>.
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RELAYED
TEXT STARTS HERE:
Topic
165 JAPANESE LOGGING IN BOLIVIA
ax:yuta General Rainforest Issues 1:10 PM
Apr 26, 1995
JAPANESE
LOGGING IN BOLIVIA - AN ANALYTICAL REVIEW OF THE
OPERATIONS
OF INDUSTRIA MADERERA SUTO LTDA. AND ITS SOCIAL AND
ENVIRONMENTAL
IMPACTS
Summary
Industria
Maderera Suto Ltda. - a joint venture with Hokusan
Hokusan
veneer manufacturer and Mitsubishi Corporation - has been
logging
in lowland semi-humid forests in Santa Cruz, Bolivia since
1975.
Only
Japanese direct investment in timber sector in the country,
it is
currently producing 2,000-3,000 m3 of sliced veneers morado,
tarara,
picana negra and roble, consuming some 6,000 trees
harvested
through timber agents mainly outside its given
concession
area of 265,000 ha in the eastern part of Santa Cruz.
The
logging operation has posed significant social and
environmental
implications in the region.
Introduction
Bolivia,
a total area of 1,098,581 km2, has a forest coverage of
51 % -
558,423 km2. The country's forests are concentrated in
Santa
Cruz, Beni, Pando, La Paz, Cochabamba and Tarija. Among this
Santa
Cruz, with 70.3 % forest coverage, owns 47.7 % of Bolivia's
forest,
possessing 65 % of the country's concession areas, and
from
1980 to 1991 accounted for over 60 % of registered log
production.
The
major forest formations include lowland evergreen forest in
the
humid tropics, humid subtropical forest, lowland semi-humid
forest,
semi-humid mountain forest and lowland semi-dry forest, in
which
lowland evergreen forest constitutes the largest ecoregion
in
Bolivian territory and accounts for 80 % of total registered
log
production.
Industria
Maderera Suto Ltda. which will be analyzed here in this
text
operates in lowland semi-humid forest, which is located in
Velasco
and Nuflo Chavez provinces of Santa Cruz. A large part of
this
formation is within Chiquitana region and is
dominated by
transitional
forest occupying 16,578,000 hectares of plains with
hills
in the central part. Annual precipitation is between 900-
1,200
mm and an average temperature is 24 C.
In this
type of forest are found some 50 commercial tree species,
including
morado (Machaerium sp.), picana (Cordia sp.), soto
(Schinopsis
sp.), in addition to mara (mahogany: Swietenia
macrophylla)
and roble (oak: Amburana cearensis).
Suto
Industria Maderera
Industria
Maderera Suto Ltda. was established in 1975 in Santa
Cruz
city, Bolivia. It is one of the 115 timber companies in Santa
Cruz
and among the 163 registered nation-wide in Camara Nacional
Forestal
- the country's national organization of the timber
industry
created in 1970.
The
establishment of the company was a response to Bolivia's log
export
ban effected in 1974 when General Forestry Law was
promulgated.
Hokusan Co. - Suto's parent company - decided a
direct
investment to Bolivia by installing a local timber
processing
plant with a joint venture with Mitsubishi Corporation,
which
had been involved with trading arrangements for Hokusan's
log
purchase from the country.
Hokusan
is a Japanese medium-sized veneer making company based in
Tokyo
employing 350 workers, and a leading sliced veneer
manufacturer
in Japan. It owns another subsidiary in Brazil called
Nortores
operating in Taubate of San Paulo state. Nortores is
manufacturing
sliced veneers mainly of mahogany and cerejeira
(Torresea
cearensis) obtained in the state of Para and Rondonia in
the
Brazilian Amazon.
Initially
the company was held equally by Hokusan Co. and
Mitsubishi
Corporation. After a series of restructuring
arrangements,
Hokusan increasingly became a dominant owner. The
company
is now owned by Hokusan by 83 %, while Mitsubishi's
current
share gets reduced to 8 % with no intervention on
management
and administration.
Aside
from Suto, another Japanese timber concern - Tonan Sangyo -
was also operating in Santa Cruz region, which
however withdrew
in
1991, remaining Suto the only Japanese venture operating in
Bolivia.
Outputs
Reduction and Restructuring
Suto is
currently employing fifty workers, a decrease from 120 a
decade
ago after a restructuring arrangement which decided to
reduce
the overall outputs level.
The
outputs reduction attributed to the alienation of the Japanese
timber
market from those timber qualities Suto had been offering.
Sliced
veneer products - principal product of
the company - are
susceptible
greatly to end users' taste. The company's main
species
- Morado, a rosewood species, - has a dark purple or red-
purple
grain, while another main species, Tarara (Centrolobium
spp.
inc.), has light yellowish color. They are used for outward
parts
of furniture, Japanese-style chairs, Buddhist altars,
interior
panels and wooden walls of houses, hotel and theater
lobbies.
In the
current Japanese timber market however, such colored
textures
are less favored, as timbers of plain white texture are
widely
accepted dominating the market as they can be coated any
manner
by advanced painting technologies. Suto also processes mara
(mahogany),
palo maria (Calophyllum brasiliense) and roble
(Amburana
cearensis) for sliced veneers.
The
increasing harvesting costs due to distanced locations of
desirable
quality logs also triggered incentives for the company's
restructuring,
when the number of employees was reduced by 20.
The
production of sliced veneer is quite exigent of quality of
timber
and requires stable standards in processing. For Japanese
market
in addition to the above two species, the small amount of
mahogany
was also shipped by the company as sliced veneers used
for
interior parts of architecture.
Mahogany
extinction
Mahogany
is rarely found and becoming commercially extinct in
Santa
Cruz as there are no longer sufficient volumes in recent
years
except for within protected areas such as national parks.
While
some loggers and timber mills are now harvesting mahogany of
very
small diameter returning to the logged over forests to find
whatever
they may have left behind, others have left for the
resources
frontiers such as northern La Paz, Beni and Pando in
northern
Bolivia bordering Acre and Rondonia in the Brazilian
Amazon.
Accessibility
is gradually increasing in these areas, and long
term
timber harvesting contracts have covered almost all the
remaining
uncontracted areas. Once these areas will be entered,
there
will no new areas to exploit. According to Vincente Peso,
President
of CIDOB - confederation of various indigenous
communities
in eastern Bolivia -, commercially available morado is
also on
the verge of extinction in Santa Cruz.
Ramon
Paz Montero, president of the Executive Coordination
Committee
of Chiquitano people (Comite Ejecutivo de Coordination
del
Pueblo Chiquitano) claims that commercial timbers were
abundant
within all community areas in the Chiquitano region up
until
1980, but were exploited and sold at any price. Although the
local
populations are now better organized capable of selling
directly
to timber mills, the resources in the region have almost
depleted
without any forest management.
Material
acquisitions
There
are two ways Suto employs for material acquisitions;
harvesting
within their concession areas; and log purchase from
contracted
timber agents. Suto holds an 265,000 ha concession area
approved
in 1978 located in the eastern part of the state of Santa
Cruz.
Initially
the company was involved in harvesting in their
concession
area using their own heavy machinery, equipments and
operational
workers. But this turned out to be economically
unfeasible
causing a great financial loss.
In
addition, the company had faced local resistance opposing the
operation.
Conflicts and disputes between the company and the
local
populations involving resource-use rights and subsequent
demands
for compensations in various forms of social services in
return
for timber harvesting by the company had urged Suto to
withdraw
from operation within the area in December 1984.
Yet,
Ramon Montero knows of no instances in which social services,
such as
construction of school or medical clinic, were provided in
exchange
for timber exploitation, which has "left with us no
social
benefit and made us poorer". "No prior promise was realized
with
total abuse".
Outside
the concession area, Suto started buying timber in
Chiquitano
and Velasco provinces through intermediary agents.
Rather
than negotiating a local community, the intermediaries used
to
approach a community member individually so that they could pay
for
cheap prices.
Forestry
Policy in Bolivia: legislations and reality
In
Bolivia all forests are State-owned. Therefore in case of
private
holdings ownership to land and property rights to trees
are
separated: While the land is privately owned, the trees belong
to the
State which grants harvesting concessions to timber
companies
during 20 years on a renewable basis.
This
situation may change however, when the new Forestry Law will
be
adopted pending approval of the both houses of the Bolivian
Congress.
The new law will admit property rights to trees to land
owners,
privatizing the forests. Major features also include the
abolition
of current CDF (Centro de Desarrollo Forestal) and its
regional
offices - unanimously acknowledged of rampant corruption
- in
exchange for the creation of new Servicio Forestal, which
will
undertake centralized administrations concerning forestry and
taxation,
depriving decentralized CDF regional units of such
powers.
So far
in March of 1995, however, the draft Law is not likely to
pass
the senate. According to the results of
a meeting in early
March
with all the interested parties in a last attempt to reach
consensus,
the timber industry has given up for the moment to
privatize
the forests.
The law
will be sent back to the lower house for review and to
include
technical changes, such as the final rate of stumpage, and
decentralization
etc. Nevertheless the government is at least
anxious
to get a revised Forestry Law approved at earliest
possible
date.
Of the
56 million hectares of forest (51 million are situated
within
the tropics), 20 million hectares have been granted to
timber
companies for concessions which represents 37 % of the
forest
coverage. However, fewer than 7 million hectares,
equivalent
to 35 % of the total concession areas, are located
within permanent
production forests. This means that it has been a
common
practice for CDF - Bolivia's forest service - to grant
excessive
cutting rights over large expanses of land in private
holdings
and in territories claimed by indigenous groups.
Under
such circumstance, a virtual land owner is obliged to allow
the
concessionaire to harvest timbers within his land once a
concession
is approved. Land owners do not legally possess
property
rights to trees within their holdings. Yet it is further
a
common practice for land owners to trade the trees as if they
are of
their own. In addition, land owners often wish to sell
timbers
to another party other than the concession holder, in
which
case negotiations take place between land owners and
concessionaires.
Conflicts
over logging and resource use
Suto
claims prevalent cases occur in which timbers are sold to
others
by land owners without concessionaires' authorizations. It
had
once been agreed among timber companies in the region that
only
sliced veneer producers like Suto were able to harvest
morado,
to which sawnwood processors agreed.
However,
in southern Velasco region in the state of Santa Cruz,
the
'Comite Civico de Grand Chiquitania' - the local native
populations'
association - demanded a few years ago that any
timber
company be allowed to harvest the species as a great number
of
secondary graded morado is left intact.
Specifically
the local populations demanded that those timbers
unsuitable
for Suto's needs be sold to other parties on the ground
that
the company's choice of logs was too selective and their
offering
price too low, which virtually legalized such
unauthorized
practices, according to Suto.
The
congress organized by the Comite further approved a decision
that
timbers within their land of hegemony be sold to any timber
agents
when they can sell at higher price than those offered by
concession
holders.
Since
then the company has been acquiring raw materials mainly
through
timber agents. It is only a decade after in 1994 when the
company
began to tap its concession area again. Still in 1994 logs
were
almost entirely supplied outside the concession. This year
the
company intends to supply 40 % of their needs from their own
concession
area, which will expire in 1998 and require renewal.
The
company claims that there are almost no indigenous peoples
within
the area but exist local farmers (campesino) practicing
swidden
agriculture and pastures, who supposedly migrated after
the
concession was assigned.
Currently
Suto is logging via contracted timber agents in a region
to the
northwest out of the concession area. In legal documents,
the
company is leasing land-title documents from tenure holders.
Then it
acquires one-time timber concessions (Aprovechamiento
Unico)
approved for title holders when forests are cleared for
agriculture
and pasture establishments.
Logging
and stumpage costs
A Morado
log costs US$ 520-530/m3 at mill gate, attaining higher
price
than mahogany (US$ 300-350/m3). Nearly a third of this value
(US$
120-130/m3) attributes to the high transportation costs. A
cubic
meter of felled log is US$ 100-200 and the rest comprises
logging
operation costs.
A
stumpage price of tree is normally quite low when it is bought
from
local farmers (campesinos). According to Esteban Cardona
Montenegro,
Forester and Director of National Park Noel Kempff
Mercado
of Regional Nature Conservation Center (CERCONA), small
and
medium logging companies are paying merely B$ 20-50 (US$ 4.28-
10.71 US$ = B$ 4.68) when they buy from
campesinos. They offer a
cheap
price for an entire plot if it is not very accessible.
Suto
employs a few reliable contracted agents (contradistas) who
operate
representing Suto itself, using the company's name. In the
region
a number of timber agents are operating in search of morado
contracted
by foreign concerns based in Brazil.
Smuggling
to Brazil
A
significant number of timber agents are involved with log
smuggling
to Brazil. A cubic meter of morado
worth US$ 350/m3 at
mill
gate can be traded at US$ 700/m3 up to US$ 2,000/m3 at
Brazilian
border. However, only 5 % of smuggled logs attain those
prices,
while the bulk of others transferred to the border are
traded
at much lower price.
According
to Suto, those smuggling agents - mainly operating in
San
Ignacio de Berasco, San Miguel and San Rafael provinces - are
practically
major competitors posing a great threat to their
operations
as they can bid attractively offering better log price
to
sellers to the extent they are saving taxation costs. CIDOB
admits
that Suto is not involved with smuggling as timber
exporters
are generally under more rigid administration control by
the
government.
The
local populations have been exerting quite powerful lobbying
pressures
to the central government in asserting their land rights
and rights
to natural resources such as timber - a major source of
revenues
for their livelihood -.
According
to Suto, this accounts for the prevailing practices of
log
smuggling involving local government and military officials,
constituting
"timber Mafia" benefiting from bribes and commissions
in
exchange for permitting such transactions.
The
local communities affected by logging
For the
local populations as well timber agents are not accepted
favorably.
It is their common practice to harvest outside
concession
areas. Several efforts by local CDF to stop their
operations
have been interdicted by corrupt administration of top
CDF
officials.
It is
also common for them to cheat measuring logs as well as
grading
trees. According to CIDOB, a number of sawmills have been
secretly
established in areas the indigenous populations are
claiming
land titles, affecting adversely to ecological
equilibrium
as well as in socioeconomic terms. Such mills are
using
the local populations as unstable logging workers under
exploited
payments.
The
indigenous communities in the region have been granted various
reserves
each extending 2,000-5,000 hectares. However, such
reserves
are accompanied by practical shortcomings for the
communities.
Since lands were allocated under the
agrarian reform
category,
communities are not allowed hunting. Further widespread
logging
is taking place within the areas disrupting ecological
equilibrium
and depriving their traditional livelihood means.
The
local communities have been quite concerned and critical of
logging
so far been practiced with no management. Uncontrolled
logging
is accompanied by disruption of useful forest products
such as
Brazil nut, edible oils and fruits as well as by
disorderly
hunting of animals - a principal diet for the
communities.
Hunting is conducted for selling and sometimes just
for
leisure as well as for consumption.
Since
timber mills dispose wasted logs and debris into the river
water,
they are blocking the rivers - their communication means -,
while
resins and rotting bark from the trees poisoning their
waters.
Loggers also induce colonists following the logging roads
cutting
through their territories.
All
this process severely undermines the integrity of the local
communities,
making themselves very apprehensive of their future.
Current
efforts to regulate the situation under their control
demonstrates
a desperate effort out of their recognition that "to
stop
logging would be impossible".
Under
such circumstances, the indigenous communities are less
against
controlled logging, unlike other situations like in
Sarawak,
provided it was conducted by their own initiatives and
their
rights to the resources guaranteed. Vincente Peso, president
of
CIDOB, proposes control mechanisms of development, stressing
that
the communities are not "anti-development" but rather seek
for
planned and organized development taking into account the
needs
for their next generations.
Communal
forest management initiatives and Donors' support
There
have been a number of initiatives by the local indigenous
communities
to input forest management systems within their lands.
The
noteworthy example includes the forest management project in
Concepcion
of Santa Cruz state, conducted by CICC since 1991.
CICC -
Central Intercomunal Campesina de Concepcion - is an
indigenous
organization comprised of 29 local communities in
Concepcion
region of Santa Cruz state, and is working with APCOB,
a local
NGO, obtaining financial support from Dutch development
agency
(SNV).
The
project area encompasses typical semideciduous forest areas
where
Chiquitano indigenous communities occupy extending 86,000
hectares.
The region includes the area under agrarian reform
proceedings
granted collectively to the communities' association
and
another 35,000 hectares of agricultural land.
The
project also aims at managing the forest the Chiquitanos have
been
claiming rights to intercommunal use, located to the north of
their
territory, bordering Rio Blanco wildlife reserve to the
north
and partially a biological reserve of more than 200,000
hectares
to the south. Altogether, the project will benefit 5,000
local
inhabitants.
The
project has been conducting studies on vegetation types and
soils
as well as socioeconomic aspects. The communities have
established
tree nurseries and started producing seedlings while
conducting
forest inventory survey for intercommunal forest
management.
In
addition to the above project, Dutch development agency (SNV)
has
been pushing forward a Green Seal (Selo Verde) project through
supporting
CIDOB (Confederacion Indigena del Oriente Chaco y
Amazonia
de Bolivia), a confederation of various indigenous
associations
including CICC in the eastern Bolivian Amazon. CIDOB
was
created in 1982 originally among Ayoreo and Guarani indigenous
communities.
The
Dutch support clearly considers ITTO's year 2000 target in
which
producer countries are mandated to export only those timbers
harvested
from sustainably managed forests by year 2000.
Internally
Bolivia's Ecological Pause Decree of 1990 also demands
that
timber companies implement forest management plan as from
1995 in
order to gain better access to international markets.
Since
1994 U.S.AID also started an ambitious natural forest
management
project called BOLFOR in Santa Cruz state. The 7-year
project
of US$ 20 million aims at introducing sustainable natural
forest
management, exercising it in two distinct areas of
characteristics:
a commercial concession area held by Moira local
timber
concern extending 150,000 hectares within Bajo Paraqua
Forest
Reserve in northern Santa Cruz; and a 30,000-hectare
Chiquitano
indigenous reserve in Lomerio of Concepcion.
U.S.AID
is stressing a biodiversity component of the project,
monitoring
impacts on flora and fauna by comparing those areas
under
commercial logging, indigenous forest management and intact
natural
forest. The Agency's decision to support indigenous forest
management,
although not directly, was a result of the preceding
experience
by Dutch development assistance.
BOLFOR's
main target areas include: research on natural forest
management;
policy analysis and institutional strengthening; and
development
of timber and non-timber forest products. Like SNV
support,
BOLFOR also explicitly bears in mind the ITTO's year 2000
target,
seeking for making the test case in Bolivia which is
considered
showing a cutting edge due to its demographically and
socioeconomically
favorable climate.
Production
Suto's
annual output of sliced veneers is 2,000-3,000 m3,
consuming
some 6,000-9,000 trees. Four main processing species
include
morado, tarara, picana negra and roble, in which morado
output
accounts for 1,000 m3.
Bolivia's
overall timber production is quite small for its
geographical
size and the resources potential. Official timber
output
was 300,923 m3 in 1992, a yield of scarcely 0.022 m3 per
hectare,
in which fourteen species made up 84 % of the total
extracted
volumes. 70 % of production is exported, mostly in the
form of
mahogany sawnwood (Firewood consumption was estimated at
400,000
m3 and charcoal 128,000 m3 in 1987, according to FAO).
Several
estimates suggest that under-declaration to avoid taxation
and the
existence of a large formal industry will exceed
registered
production by 30 % - 50 %. Nevertheless, Bolivia
produces
half the log production of Costa Rica or Honduras, while
having
between 10 and 20 times the area of natural forests of
those
countries.
The
forestry sector generated US$ 50 million in 1990 and 1991, and
US$ 62
million in 1992 by export earnings of primary and secondary
forest
products, growing rapidly since 1986. This is equivalent to
17 % of
the value of non-traditional exports in 1990 and 1991. Yet
by 1990
the sector's share on GDP was a modest 2 % to 2.5 %,
although
it has been growing rapidly. During 1993 and 1994 the
value
of forest exports has doubled to $108 million a year.
At the
regional level, timber industry's importance is
significant.
In Santa Cruz, forest-based production accounted for
25 % of
industrial employment, 20 % of exports, 16 % of the
capital
stack and 6 % of regional GDP.
Suto's
registers the capital of US$ 1.2 millions. It spends an
annual
working capital of US$ 3 million, including US$ 0.7
millions
disbursed for log acquisition costs. During initial years
since
the company obtained a concession in 1978, the outputs used
to
reach three times higher when the mill was running in a three-
operation
cycle a day.
No
management
Prior
to acquiring a given timber concession area, the forest
inventory
is conducted and Management Plan formed and renewed
periodically.
In practice no management takes place throughout the
country.
Suto claims they can not make use of even the abundant
timber
stock in a given forest plot unless timbers meet the
required
standard for slice veneering.
Although
up to 20-30 trees of commercial species can be found in a
hectare
of very dense forest plot, much fewer number of trees are
actually
exploited as most of them offer curved or bifurcated
trunks,
or present defects with worm damage.
Therefore,
the quantitative volume of species found in a
concession
area matters less than the quality of logs, which
crucially
determines the company's performances in manufacturing
sliced
veneers.
Suto
compares its business characteristics to those involved in
manufacturing
sawnwoods, which can make profit by processing a
greater
amount of logs without too much attention to the quality.
Suto
claims a cubic meter of morado qualified for sliced veneer is
barely
found within a hectare of forest. This justifies the
company's
continuous behavior of searching for desirable trees
outside
their concession area through timber agents.
Ecological
impacts to the forests
Suto's
management strategy has been to supply a sizable amount of
highly
value-added products using small volumes of raw materials
with
minimum intervention on forests. Therefore, Suto considers
itself
a 'resource conserving company' and 'friendly to the global
environment'.
It is
true that Bolivia is known to be the country where the
logging
is most selective. Its export channels - a) road through
Tambo
Quemado to the Chilean port of Arica; b) railway through
Puerto
Suarez to Brazil and the ports of Santos and Paranagua; and
c)
railway to Argentina through Yakuiba - all require that
transport
costs represent a significant portion of the FOB value
of
sawnwood exports. This means that only very few high-valued
species
can be competitive in international markets, making
Bolivia's
logging among the most selective in the world.
Extraction
from primary forests in Bolivian Lowlands averages a
maximum
of 5 trees/ha (average 1-2 trees in the country as a
whole),
comparing 8 trees/ha in Paragominas (eastern Amazon in
Para
state) of Brazil, 5-10 trees/ha in Costa Rica and 18 trees/ha
(or 10
% of the forest plot) in Malaysia, which are causing,
respectively, 26 %, 24-50 % and 51 % (55 %) damages to
residual
stands.
The
company claims it is not employing heavy machinery such as
bulldozers
in their logging operations, which is unnecessary in
the
open semi-humid forests where morado occurs. According to the
company
they establish logging trails avoiding large-diameter
trees,
hauling a felled timber by skidder along the trails. They
especially
search for species occurring in dryer forests where
trees
are more immune from worm damage, which is detrimental to
sliced
veneer processing.
However,
it is known that the ecosystem of dryer forests where
Suto
operates is less capable of recuperation than humid forests
when
logging intervention occurs. Biologists have tended to
overlook
the region's dry forest, regarding it as a transitional
forest
that separates Amazonia from the Gran Chaco region.
However,
recent studies suggest that this is a distinctive
vegetation
type, and has been recognized as such in the new IUCN
classification
of world plant communities.
The
tropical dry and semideciduous forests to the east of Santa
Cruz
city have been threatened with immediate destruction due to
the
rapid eastward expansion of the agricultural frontier, coupled
with
logging and pasture development. Studies conducted by
Conservation
International highly recommends the protection of
representative
examples of the original vegetation types of the
region
on which to form biological inventories.
Although
the annual deforestation rate of 0.2 % (80,000 ha) is one
of the
lowest in the world and the lowest in Latin America and the
Caribbean,
about 30 % of the deforestation is occurring
in the
Department
of Santa Cruz where extensive areas have been logged
and
converted to agricultural development.
The
effects of Bolivia's selective logging on biodiversity is not
well
understood. The harvesting produces changes in the relative
abundance
of tree species as economically valuable trees become
much
scarce. Timber harvesting is associated with changes in fauna
as
well. Timber harvesting crews are routinely expected to supply
a part
of their own food by hunting.
The
roads constructed for harvesting also provide access to other
kinds
of hunters, such as agricultural colonizers and black market
exporters.
The principal species hunted include a type of peccary,
deer,
monkeys and tapir. Hunting monkeys is of particular concern
because
of their relatively low rates of reproduction.
Markets
and Prices
Suto
continues to prefer involving itself with slice veneering due
to its
added value. It attains FOB price of US$2,500/m3 (US$1.80-
2.00/m2)
at port of Arica in Chile, compared to US$760/m3 in case
of
sawnwood. In Japanese ports, sliced veneers of morado varies
US$3,000-10,000
per cubic meter with mean quality costing
US$6,000.
The product of favorable grain without defects can
attain
better price.
Almost
100 % of the company's sliced veneers are shipped to Japan,
while
part of their products go to other markets such as Peru,
Brazil
and Argentine. Overall 60 % of the company's production are
shipped
to Japan.
Suto is
also involved in manufacturing a small volume of sawnwood
- 1,000
m3 annually -, processing mahogany,
mara, picana (Cordia
alliodora),
roble (Amburana cearensis) and residues of algarrobo
(Prosopis
sp.) and tarara, in addition to manufacturing mahogany
craft
as finished product. 50 % of the company's sawnwoods go to
Japan,
while the other half is marketed in the US, Canada and
Germany.
The
annual turn over is a little over US$ 3 million, ranking a
medium-sized
mill among veneer and plywood producers in the
country.
The net profit margin is 10 %, which is considered
'excellent'
by Suto, although it may be lower than the average
mills.
The
company recognizes the decreasing trend of material supply as
the
resources get scarce. They have to search for quality trees in
longer
distance. Suto reiterated the need for banning current
smuggling
practices, which has been undermining their operations.
Forest
Taxation
CDF's
regional offices collect stumpage value tax (derecho de
monte),
classifying tree species into several categories. Morado
is
among the first grade category subject taxation of B$ 90 (US$
19.27 @
4.67) per cubic meter.
Nominal
11 % tax (regalias madereras) is further levied on
processed
wood based on the value of sales of the product net of
administration,
marketing and transport costs. For Suto US$ 33 per
thousand
board feet (US $14/m3) is collected by CORDECRUZ
(Regional
Development Corporation in Santa Cruz) for high value
woods
such as morado and mahogany.
Finally,
the value equivalent to 50 % of stumpage value is
voluntarily
collected by Camara Nacional Forestal (CNF) to promote
replanting
since funding from the regalias madereras did not serve
its
purpose of financing reforestation.
According
to the 1974 law, the industry must ensure regeneration
at a
rate equivalent to the depletion of forests to ensure
sustainability.
The timber industry is obliged to replant, either
as enrichment
in the natural forests, or as single species
artificial
plantation, which has not been observed given the
abundance
of natural forest timber. In response to the criticism
that
the industry was not replanting, it opted for a compensatory
payment
of this tax and has been financing the Forest Plantations
Program.
Altogether
Suto estimates nearly US$50/m3 set aside for the above
taxation.
Because Suto is involved in highly selective material
use in
their operations, it does not intend to nurture their own
resources
by reforestation, which does not guarantee a future
resource
supply of qualified logs suitable for sliced veneer
making.
It is
estimated that trees suitable for Suto's slice veneering may
require
80 - 100 years if replanted, as they need to reach 70 - 80
cm in
diameter. Lesser diameter trees would only serve for
sawnwood.
For
future prospect, Suto considers nurturing artificial
plantation
of paulownia ('kiri' in Japanese), a celebrated species
used
for traditional chest drawer making in Japan. Plantations of
this
exotic species have already been established by Japanese
colonists
in Paraguay and its export to Japan is on the rise. The
CIF
price in Japan is US$960/m3. It has an advantage that Bolivia
allows
log export of trees from artificial plantations and waves
reforestation
tax in harvesting.
References:
1
CICC/APCOB. 1994. Proyecto Forestal Comunal - Concepcion.
2
Conservation International, Fundacion Amigos de la Naturaleza.
1993.
The Lowland Dry Forests of Santa Cruz, Bolivia: A Global
Conservation
Priority.
3 World
Bank. 1993. Bolivia: Forestry Subsector Review.
4
Camara Nacional Forestal. 1994. Directorio Forestal de Bolivia
1994.
5 Javier
Lopez Soria. 1993. Recursos Forestales de Bolivia y su
Aprovechamiento.
La Paz, Bolivia.
6
CORDECRUZ-CONSORCIO IP/CES/KWC, Cooperacion Financiera del
Gobierno
Aleman. 1994. Plan de Uso del Suelo (PLUS) - Proyecto de
Proteccion
de los Recursos Naturales del Departamento de Santa
Cruz.
7
A.I.D. PROJECT GRANT AGREEMENT No. 511-0621. Sustainable
Forestry
Management (BOLFOR) Project.
8
Camara Nacional Forestal. 1992. Estadisticas de Aprovechamiento,
Exportacion
y Comercializacion Nacional de Produtos Forestales.
Santa
Cruz, Bolivia.
9 FAO.
1993. Natural Resources Management and Environmental
Protection
Report - Project Brief.
10
CORDECRUZ-KFW-CONSORCIO IP/CES/KWC. 1994. Proyecto de
Proteccion
de los Recursos Naturales en el Departamento de Santa
Cruz
(Componente Proyecto Tierras Bajas). Santa Cruz, Bolivia.
[The
report was compiled by Japan-Brazil Network (JBN) in April
1995
based on study contracted by Rainforest Action Network (RAN)
in San
Francisco, USA.]
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