03/15/00 -- Malaysian Government Pressures Cambodia to Reduce Timber Royalty Rate

***********************************************

WORLDWIDE FOREST/BIODIVERSITY CAMPAIGN NEWS

Malaysian Government Pressures Cambodia to Reduce Timber Royalty Rate

***********************************************

Forest Networking a Project of Forests.org

http://forests.org/ -- Forest Conservation Archives

http://forests.org/web/ -- Discuss Forest Conservation

3/15/00

OVERVIEW & COMMENTARY

When it comes to industrially logging the World's remaining ancient

forests, Malaysian logging companies and their government apologists

play hardball. After years of cut and run timber operations yielding

little benefit for the country, Cambodia's government has taken moves

to remedy the situation with higher royalty rates. When a Malaysian

logging company shut down rather than comply, the Malaysian

government's representatives have turned up the pressure. South-

South colonialism is alive and well.

g.b.

*******************************

RELAYED TEXT STARTS HERE:

Title: Malaysians pressurise the Royal Government of Cambodia to

reduce the timber royalty rate for Samling International.

Source: Global Witness

Tel: + 44 (0) 20 7272 6731

Fax: + 44 (0) 20 7272 9425;

Email:mail@globalwitness.demon.co.uk

Internet: http://www.oneworld.org/globalwitness/

Date: March 3, 2000

In late 1998 the Royal Government of Cambodia increased the timber

royalty rate from US$14 to US$54 per cubic metre, payable by the 21

companies who control the bulk of Cambodia's forests as timber

concessions.

In protest The Cambodia Timber Industry Association's (CTIA) most

outspoken member against the new rate, the logging giant Samling

International, ceased operations on the 27th January 1999 and refused

to pay the US$4,320,000 due on its 80,000m3 stockpile. In late

February 2000 the Malaysian Primary Industries Minister, Datuk Seri

Dr Lim Yaik, visited Cambodia to lobby the RGC and get the royalty

rates reduced. News that the Malaysian government is weighing in on

behalf of Samling could prove decisive in the long-running dispute.

"It is astonishing that Malaysia, as an ASEAN member state, feels it

has the right to tell Cambodia how much it should sell its natural

resources for, and CTIA references to low royalty rates in Malaysia

ignore the fact that this factor, amongst others, has led to

devastating forest destruction throughout Malaysia" said Patrick

Alley of Global Witness

Most of the concessionaires make "unofficial payments" of between

US$40 and US$80 per cubic metre. "Rather than fighting the increase

in the official royalty rate the concessionaires should be seeking a

reduction in all the unofficial payments that they are obliged to

make" said Alley.

Samling is one of only two companies in Cambodia that have extensive

experience in forestry but despite this it has been warned by the RGC

in the past for illegal logging. The other concession companies have

consistently breached the terms of their concession agreements taking

advantage of the lawlessness in Cambodia over recent years.

"It is ironic that the concessionaires, which have presided over a

period of such unprecedented forest destruction, complain the minute

that the RGC attempts to put forestry in order. If the royalty rate

slips back to US$14 per cubic meter it will generate only US$

7,000,000 for the RGC year, the maximum annual sustainable yield for

Cambodia is 500,000m3; which begs the question "why have the

concessionaires at all?"

###RELAYED TEXT ENDS###

This document is a PHOTOCOPY for educational, personal and non-

commercial use only. Recipients should seek permission from the

source for reprinting. All efforts are made to provide accurate,

timely pieces; though ultimate responsibility for verifying all

information rests with the reader. Check out our Gaia's Forest

Conservation Archives & Portal at URL= http://forests.org/

Networked by Forests.org, Inc., gbarry@forests.org