Regional Environmental Technical Assistance 5771
Poverty Reduction & Environmental Management in Remote Greater Mekong Subregion (GMS) Watersheds Project (Phase I)

TIMBER TRADE AND WOOD FLOW STUDY

Cambodia

By

Tuukka Castrén

CONTENTS

List of Tables

List of Figures

Abbreviations used

1. Introduction

1.1 Background

The current study on wood demand and supply, and forest industries in Cambodia is a part of the Poverty Reduction and Environmental Management in Remote Greater Mekong Subregion Watersheds-project and the Timber Trade and Wood Flow-study. This study is one of six country studies – one for each project country – produced during the project. A separate regional report studies the cross-border issues and opportunities in the whole of the subregion.

This report, like all of the national reports deals with three interrelated topics:

1. the general pattern of wood use, demand and supply in the country
2. timber trade to and from the country
3. forest industries and the role of forest industries in national industrial strategies

The study was prepared in October–December 1998. Some additional data was collected and the report written in March 1999. Mr. Tuukka Castrén (Indufor Oy) prepared the study and the work of the Consultant was supervised and assisted by Mr. Stephen Devenish, the Team Leader of the Project. Unlike in other countries covered by the Project, there was no national consultant input in Cambodia.

1.2 Data

Two main information sources were utilised: interviews with stakeholders, and documentation from various forestry and forest industry projects and the Royal Cambodian Government (RCG).

Analysis on the wood trade and logging volume to a large extent depends on documentation from other projects. This is justified by the recent World Bank financed Forest Policy Reform Project and Log Monitoring and Logging Control Project (LMLC-project) both of which have done extensive work on assessing the actual levels of commercial wood utilisation and the politics of forestry in the country, both tasks of extreme complexity.

Another valuable source is Global Witness, a London based NGO that has done extensive and apparently high-quality field work in tracing down the patterns of illegal logging and trade in Cambodia. They have been able to identify much of the volume, direction of trade and major players in the (to a large extent illegal) logging that is carried out in Cambodia.

These three sources have thorough knowledge on the situation in the country and an extensive information collection network in Cambodia. Any analysis aimed at analysing log trade in the country would be futile if it didn’t make use of their data. The official Cambodian information sources are still lacking consistency and coverage, to say the least.

2. Forest Resources

2.1 Natural Forests

Cambodia has not been in a position to carry out a nation level forest inventory for decades. Until recently much of the country has not been under Phnom Penh government control. Hence information on forest resources is mainly based on satellite imaginary with little or no ground observations.

The total forest cover is 10.9 mill. ha (1995 Japan Forest Technical Association analysis) which equals to 58% of the total area of the country, this is the highest in GMS and globally relatively high. It has to be noted that the above estimation was prepared prior to the vast expansion of logging and currently forest cover should be lower (c.f. Chapter 3.2). In addition, there are large areas of wood and shrubland that have recently been subject to shifting cultivation and have some trees. Their total area is 1.0 mill. ha making the total forest and woodland area 12.0 mill. ha (63% of the land area of the country). The MRC/GTZ-implemented Forest Cover Monitoring Project estimated forest cover to be slightly lower in 1997, 9.1 mill. ha or 58.2%. (Figure 2.1)

Figure 2.1: Land Use Pattern 1973 and 1993

Source: Land Use Mapping Statistics quoted in Hong-Narith (1997)

There has been constant deforestation in Cambodia, though the rate has been lower than in some neighbouring countries. This may be thanks to low population pressure. Most of the forestland has been turned either to agriculture – particularly non-paddy fields – or shrubland. The latter conversion takes place by means of shifting cultivation, a production system still commonly practised throughout the country.

Cambodia has declared internationally a very high percentage of its forests as officially protected areas. In total some 3.4 mill. ha have been declared as protected areas out of which 2.8 mill. ha is in productive dry land forests. The total protected area network covers one fifth of the total land area, though the protected areas are under a large variety of threats, such as commercial logging and inadequate management.

2.2 Plantations

Despite facing expanding deforestation, Cambodian plantation activity is inadequate and provided with inadequate financial resources. There has been some initiatives and programmes for plantation; however, plantation wood does not yet have notable role in the Cambodian wood demand/supply scene.

3. Utilisation of Forest Resources

3.1 Legal Framework

The legislative framework and its implementation in Cambodia is inadequate. Theoretically all the production forests are under the custody of the Department of Forestry and Wildlife (DFW) in the Ministry Agriculture, Forestry and Fisheries (MAFF). Protected areas are managed by the Ministry of Environment. The internal instability in the country and low hierarchical strength of the DFW compared to other segments of the civil service and military have hampered the implementation of the tasks and mission of the Department.

Within the DFW there are two offices dealing with forest utilisation issues: Forest Management Office (FMO) and Legislation and Litigation Office (LLO). The former issues authorisation to log in the concession areas and the latter is in charge of monitoring of the log transport and penalising if violations are disclosed. This despite the fact that all logging was banned in January 1995 "pending the implementation of new forest policy". There is no information on whether this ban has been lifted, in fact it is no longer effective.

The actual management of the production forests take place through concession agreements with both national and international investors. Practically all production forests are allocated to concessionaires, and some concessions even overlap, either with other concessions or protected areas. In the north-eastern province of Ratanakiri the combined allocation of protected areas, and forestry and agricultural concessions is approximately 130% of the total land area of the province. In the province national and provincial land use decisions have not been co-ordinated and the exchange of information among the authorities preparing the decisions is non-existent. Even national level allocations cover 102% of the province’s land area. (Figure 3.1)

Figure 3.1: Land Jurisdiction

Concession agreement packages consist of two agreements: Forest License Agreement and Investment Agreement. The Forest License is an agreement where the concessionaire is provided with access to the forest resources and the exclusive right to the forest. Generally no provision is made concerning the people already making their livelihood from the forests. Utilisation of this right requires a) preparation of a management plan, b) demarcation of the annual coups and c) separate permission to commence logging. The Investment Agreement is an agreement between an enterprise and the government where the RGC grants forest license and the enterprise in turn commits itself to invest in wood processing mills to process the logs harvested from the concession area.

The concessionaire has the exclusive right to the logs from the concession which, from the viewpoint of community rights may be seen inequitable. With the introduction of forest concessions the communities and their members have become squatters on their own land with little or no rights to the forest in which they live.

The concession policy also seems to have been unsuccessful even from a government viewpoint. In 1997 only six out of 32 concessions had met all the criteria in the preparation of management plans, and had been issued with exploitation permits, with another five being permitted to collect illegally felled logs "found" in the concession area (see Chapter 3.2 for collection permit system). The remaining 21 concessions were "not active" because they had not processed required documentation. However, the official inactivity does not necessarily reflect the actual state of operations. During the field surveys of the LMLC-project in 1997 the survey teams noticed recent logging activity on practically every concession area. It was not, however, evident if the logging was carried out by the concessionaire himself, concessionaires from other concession areas or outside poachers.

There have been unconfirmed reports of cases where the legal concessionaire has been evicted from his area by competitors and/or various military units. Even if the concessionaires have been able to gain access, the DFW may be denied access on its monitoring missions. The official reason given has often been the lack of security. The security problems have not, however, hindered logging activities.

Despite the unsatisfactory implementation of the concession policy in Cambodia the country has been able to attract investment in wood processing industries. This has been seen as a fast-track approach in increasing value added production. On the other hand, concessions have not been successful in introducing sustainable forest management systems to Cambodian forestry. In both respects the track record of the concession policy is analogous to the experience of other countries having pursued similar forestry development strategies.

3.2 Harvesting

Figure 3.2: Logging Volume 1981-1997

Source: various sources quoted in Carle, J. (1998). Note, the estimates are not always official or universally agreed,
these are, however, deemed the most reliable ones by the author.

3.2.1 Recorded / Legal Logging

Although the concessions are officially meant to be the main stream of forest management and utilisation in the country only a fraction of the wood harvested originates from legal, DFW authorised coups within the concessions. Even with so-called registered logging, about half of the removals are based on originally illegal logs, i.e. collected logs (Table 3.1).

Table 3.1: Official Logging 1997

Categories with asterisk (*) are logs originally cut illegally but "legalised" through royalty payment.
Luxury logs are from species that are generally not allowed to be logged.

Source: DAI (1998).

3.2.2 Illegal Logging

In various thorough analyses based on satellite images, surveillance flights and field observations it has become evident, that the officially recorded felling is only a fraction of the actual logging that took place in Cambodia in the latter half of 1990’s.

Three factors contribute to the past, and to some extent current, diversity in the logging regulatory status:

• military instability in some areas of the country and consequent local military rule, even by RCG troops. (The recent breakdown of the main opposition army, Khmer Rouge, may see the situation improve)
• lack of monitoring resources in the DFW, both physical and administrative; this is combined with the low salaries and morale of the corruption-prone staff
• lack of commitment to sustainable forestry from other sectors of public administration
• current legislation lacks disincentives for illegal logging and even provides riskless fast-tracks for legalising illegal logs

Much of the removals are based on the collection of logs or old log permits (rather than the actual felling). These ad hoc permissions are used for utilising illegally cut logs found stockpiled in the concession areas. Officially, the concessionaire uses, against royalty payment, a license to utilise the wood illegally cut in their areas. In addition, other companies are also allowed to collect timber found "laying around".

A clear distinction needs to be made between the two types of utilising illegally cut logs: sale of confiscated logs and collection permits. Confiscation is an act by the authorities in which they take illegally obtained property into their custody. They may either destroy it or sell it (often by auction). Confiscation usually leads to the people responsible for illegal activities being punished. Hence there is a law enforcement intervention prior to the utilisation of the goods. In the case of Collection permits the process is different. If cut logs are found on someone’s concession area or on public land, the finder simply reports the find to the authorities, is issued a permit and pays a royalty. As a result of the process, the logs have been legalised.

Theoretically the Collection permit process offers an efficient way of collecting revenue from logs that have been illegally cut. The implementation in Cambodia, however, has made it an efficient and financially attractive way for circumventing the concession system and harvesting without the financial burden of sustainable forest management. The system incorporates several loopholes by which all control of logging is made practically impossible and has made Cambodian logging a web of vested interests and non-transparent activities:

1. the existence of the log piles is not confirmed prior to issuing the license
2. no attempt is made to identify the origin of the logs and who cut them
3. no attempt is made to make the loggers face trial
4. collection permits are issued by a large diversity of civilian and military officials and local strongmen with no consultation between themselves and the DFW, often with notable bribes. Even the highest ranking levels in Cambodian society are allegedly involved in these activities
5. most of the royalties paid do not reach DFW or the national Treasury but are used to cover various parallel budgets for military units or local administration, or are pocketed by sinister individuals

The widespread unauthorised logging is five to ten times larger than the reported harvesting. Interestingly enough, the information from the Cambodian officials varies a great deal. ITTO (1998) reports, based on Cambodian sources, put log production at only half of the volume reported by DFW (Table 3.2).

The volume presented by the GW and LMLC-project is observed volume and consequently, by definition, underestimates. No attempt has been made to evaluate the logging volume that is unobserved. However, discussion on the actual volume is like counting how many bullet holes there are in a drive-by-shooting victim. This is unimportant, the basic fact is that the victim is dead.

Table 3.2: Log Production and Wood Product Exports, 1997, various sources

** Total log production

Source: Carle, J. (1998) and ITTO (1998)

Like official logging, illegal logging activities may be divided to a large number of regulatory categories based on the institutional background of the authorising body. This logging can be basically divided into three groups:

1. as mentioned above, other officials, RCAF personnel, etc. issue collection permits after receiving payment to cover their budgets (or personal gain)
2. military units are granted logging and collection permits to provide extra financing
3. logs are harvested with no fee payment or authorisation, either from DFW, other RCG civilian or military authorities, or insurgent groups.

Some of the logs are exported directly to neighbouring countries (or further afield) unprocessed. This has been illegal since 1996. The remainder is processed in-country and exported as rough sawnwood or used locally. Compared to log exports, sawnwood exports is easier because the export of sawnwood is per se legal, it should, however only originate from legal concession coups or DFW issued collection permits. At customs points any sawnwood is easily "converted" into these categories (with payment).

Total logging by trade category, as studied by DAI, is presented in Table 3.3. The share of fully legal harvesting is estimated at 7% of total logging, while officially taxed logs are 12% of the total (this includes logs that originally were cut illegally, i.e. collection logs).

Table 3.3: Commercial Logging in Cambodia by Trade Category in 1997

* Includes domestic commercial sawnwood processing. Rural household fuelwood and other wood consumption is not included here (c.f. Chapter 3.2.3).

Source: DAI (1998) and consultant estimates. Where a range was given, percentage is based on the average. The total volume of untaxed collection wood in not known, it is partly included in the above figures but may be also, e.g. processed by concessionaire sawmills and not be included above.

The widespread lack of the rule of law in Cambodian forests has, not surprisingly, led to negative international attention and also concern within the country itself. Forests are the main natural resource of Cambodia and the government’s inability to a) monitor forestry activities and b) collect revenue was noted among the donor community and, for example, was one of the factors leading to the decision of the IMF to suspend its operations in the country. In January 1999 the new government decided to make an effort to crack down on illegal logging activities. This may have been enabled by the final collapse of the main insurgent army, Khmer Rouge, and the government’s apparently firmer grip on power. The new policy was stated in a government declaration rather than new legislation. This 17-point declaration both requires adherence to the existing regulations and also issues some new policy guidelines. The main points of the "new approach" by the government are:

• collection permits are no longer to be issued
• no more concession areas to be declared
• all concessions not obeying concessionaire rules will be cancelled and these areas will be made protected or classified forests (there was also mention of evaluating the biodiversity conservation values in the areas)
• concessions are accountable for all logging in their areas. Concessions are to be clearly demarcated.
• all deeds and permits for forest ownership are revoked until the forest boundaries are officially approved
• illegal sawmills are to be destroyed.

The outcome of this declaration is still to be seen but if it does in fact lead to real change in the Cambodian logging scene the total set-up in the country and the whole GMS will change. Both Thailand and Viet Nam use large quantities of wood originating from Cambodian forests and will need to find new sources of supply if this source dries.

3.2.3 Household Wood Consumption

As is the case in all developing countries, domestic household use is in volume terms the most important form of wood utilisation. Wood is used for cooking, construction and boat building, etc. Most of this non-fuelwood domestic consumption takes place in rural areas. Wood energy is utilised both in rural and urban areas, though the consumption pattern differs. In rural areas most of the population use fuelwood whereas in urban areas it is only the poorer segments of society that is dependent on wood-energy. (Better off people use other energy sources, such as electricity).

• woodfuel: 6 mill. m³ (75%)
• construction and other: 2 mill. m³ (25%)

The sources of woodfuel are not known but certainly include some logging and wood processing residue. Most of the processing waste is, however used by the mills themselves. Information on other institutional, non-household woodfuel use is not available. As for household wood energy, FAO has estimated that roughly half of the woodfuel demand is met by wood sources other than forests, i.e. garden trees, fruit trees and various scattered trees on non-forest land.

The total wood removal, i.e. wood demand, in 1997 in Cambodia (assuming 50% of logging residue is used as fuelwood) was 12.3 mill. m³, 145% of the theoretical production potential on non-protected lands. Most of the excess demand came in the form of woodfuel. In order to supply the country with adequate woodfuel approximately one million hectares of fast growing plantations need to be established. This should take the form of encouraging private sector, and rural communities and households in particular, to establish woodlots to provide the adjunct households with fuelwood. State assistance could take place, e.g. through land allocation for fuelwood plantations, extension and training.

Figure 3.3: Total Demand 1997

3.3 Pricing of Logs

The system of royalty payments for official logs is utterly complex and involves a myriad of officials and offices, even to collect the official fees. This has led to a common practice among officials of charging "facilitation fees" before they will carry our their legal duties. Also apparent is the total lack of market signals in the official royalty setting. The mechanism of payment for illegal logging rights are unknown but should be more market orientated, and therefore more flexible. In any case, both the official and unofficial logging prices are not based on the financial resources of the buyer; rather is it a question of favours, counterfavours, personal connections, political alliances, bribes and finally, armed power.

There is no official, RCG approved standard list of all the various official payments needed. In total there are nine different types of royalty payments, taxes and other fees. For domestic sales the number is slightly lower. The concession agreements include stipulations about these payments, specific to the concessionaire. Usually the concessionaire is exempt from some type of taxation.

Ruzicka (1998) presents a sample analysis on the profitability of both the legal and illegal wood trade in Cambodia comparing pre-Asian Crises (mid-1997) and February 1998 price levels. The presentation in Table 3.4 and Table 3.5 is based on medium category logs and is based on the residual stumpage value of the logs derived (after harvesting and transport costs) from world market prices. The analysis is based on national averages and thus has more merit in describing the pattern and dynamics rather than exact figures. The actual prices have wide variation based on location of the logging sites in view of the markets and infrastructure, relations to the decision makers and armed groups in the area.

Table 3.4: Profitability of Logging

Source: Based on Ruzicka, I. (1998)

Two main things are striking in the analysis of Table 3.4:

Not only does illegal logging mean the loss of a valuable resource that is technically the exclusive property of the concessionaires, but it is also financially attractive. It may be assumed that production costs are lower than in official coups as the logger has more flexibility in selecting logging sites; also the unofficial fees are lower due to the lack of bribes to DFW staff in Phnom Penh, only local and border people need to be "assisted" (Table 3.5).

Table 3.5: Legal vs. Illegal Logging – Profitability

Source: Ruzicka, I. (1998)

4. Forest Industries

4.1 Industry Structure

Forest industries were seen as one area where the country could have a comparative advantage due to its forest resources. Since 1994, when the current system was introduced; foreign investors were attracted to the country following the large-scale granting of forestry concessions (theoretically providing a secure raw material base). Included in the concession agreements were a prerequisite undertaking to invest in wood processing in Cambodia. The main objective of the policy was to stimulate production, employment and increase the value added to production and exports. Most investors have come from other Asian countries: Taiwan, Malaysia, Thailand and Singapore.

The policy has not been a success story due to a) general instability in the country, b) erratic legislative framework, and in particular c) the inability of the Government to ensure the respect of law and order in the forests, e.g. the concessionaire’s exclusive right to the logs in the area. On the other hand, many concessionaires take advantage of this inability and do not respect good forest management practises (as required in the agreements).

Even if the linking of concessions and processing was needed in order to attract investment to the country, in the medium to long-term its disadvantages outweigh the apparent benefits of such policy. Linking wood production with processing does not allow the formation of an effective (and legal) wood market, and price mechanisms cannot allocate logs to the most efficient user. For the government the stumpage (royalty) remains lower than it would in delinked production because a) the Government does not have information on the applicable log price because the companies have superior information on the market and production costs, and b) production residues from logging production are not utilised, making raw material less valuable.

In addition there is also a large number of non-authorised sawmills in the country producing both for the domestic and export markets. These sawmills are estimated to number about one thousand and are located in all regions. Usually they operate under the protection of a local authority, military unit or other local strongman.

4.2 Production Capacity

5. THE International Wood Trade

5.1 Legal Framework

In order to be able to control rampant illegal logging the RCG banned all log exports in December 1996. The following product categories were included in the ban.

• raw logs
• crude and rough sawnwood
• squared logs (width >16 cm)
• firewood,
• charcoal

Semi-finished and finished products could be exported. For sawnwood the planks needed to be planed, seasoned, kiln-dried or processed into a standard size in order to qualify as semi-processed wood. Additionally, exports have to take place during daytime – 0500 to 1800 hrs – and the only export ports allowed were Phnom Penh and Sihaunoukville in southern Cambodia.

This ban is the latest in a long series of export bans that have been issued and lifted since 1992. The most short-lived export ban was valid for only three months in 1994. (Table 5.1)

Table 5.1: Export Ban Chronology 1992-1999

Source: Carle, J. (1998), RGC (1999)

These exports bans are not the only hindrance to the export market, also complicating matters is the process of obtaining the required documents for export, which is utterly bureaucratic and complex. If all rules and regulations were strictly adhered to, more than 30 signatures are required and approximately ten different government offices or parastatal companies are involved. In order to go through the process somewhat smoothly a myriad of facilitation fees (bribes) and informal influence channels are required. During this excessively bureaucratic process large sums of money are spent to obtain efficiency, as obstacles incur delays and consequent costs. Honest exporters are not competitive and have to gradually find new operational methods.

5.2 Export Volume

As with logging, information on export volume is either scattered or inconsistent. The analysis is hampered by the fact that one of the main destinations of Cambodian logs is Viet Nam, where all foreign trade statistics are classified information. The estimated volume exported to neighbouring countries is presented on Table 5.2.

Table 5.2: Export Volume 1997

The Asian economic Crisis began in 1997 and has led to dramatic falls in production and demand for wood industries in the region, particularly Thailand. However, the crisis has not hit the Vietnamese industry as hard and during 1998 the role of Viet Nam as the main export market intensified even further. Log exports to Thailand have also decreased due to international pressure as buyers are seen to support illegal logging. Apparently, however, a large volume of Cambodian sawnwood is still being exported to Thailand. Another factor to lower the volume exported to Thailand is the fall of the Khmer Rouge with whom Thailand, and the Thai military in particular, has alledgely co-operated in lucrative timber and gem trade. There is no information on how much of the wood destined to Thailand is directly re-exported to third countries, it may be estimated that the figures for this are higher than in Viet Nam.

5.3 Imports

There is no information available on Cambodian forest product imports. It is, however, apparent that the imports consist mainly of value added products like paper and secondary processed wood industry products.

6. Conclusions and Recommendations

6.1 Current Situation

The current logging of forestry resources in Cambodia is estimated to exhaust the commercially attractive forest reserves in only a few years and thus needs to be reduced immediately. DAI (1998) and RGC (1999) have a wide range of recommendations in log monitoring that would increase the efficiency of logging control in the country and enable it to make some operators in illegal log trade face justice.

The role of DFW in the new Cambodian logging set-up needs to be evaluated thoroughly. The current administrative structure has failed in its mission as the supreme guardian of the forestry resources of the country – partly for reasons beyond its control. However, there should be one administrative structure in charge of production forests, managing natural forests, and promoting and controlling plantations.

Wood processing capacity in Cambodia exceeds the sustainable yield from the forests by a wide margin. Much of the processing capacity has been introduced since 1994 when the current policy of concessions and adjunct processing mills was introduced. If the declared implementation of forest policies by the RGC (1999) is fully achieved, the industry will face major deficit and many operators will go out of business. Morally this should not be a problem; as most of the mills have been established to process illegal logs.

6.2 Recommendations

The World Bank has financed two technical assistance projects evaluating the Cambodian forest sector. Global Witness has also made some feasible technical recommendations to increase control and order in Cambodian logging. Basically the recommendations are valid and should be implemented. However, some clarifications and realignments could be made.

Forest Policy

In Cambodia the conflict between the rights of the local, rural population and forest management authority – mainly concession holders – is more striking than in the other GMS countries; the local people have no access to the forests they live in or are adjunct to. The RGC should introduce community forestry and/or joint management concepts to Cambodian forestry. It is as yet unclear as to whether it is advisable to transfer all cancelled concessions into protected areas – as proposed by the RGC (1999) – particularly if no assessment of biodiversity value of the area is made. In the long-run the object should be that all feasible production forests should be transferred to community forestry/joint management. The remaining production forests should be under direct forest authority management. Forest concessions should gradually be phased out.

Forest Administration

Development of the administrative structure within the state forest authority should have two, often opposing objectives: efficiency and cost effectiveness vs. transparency and equability. As part of forest policy evaluations the role and structure of forest administration needs to be studied. The forest sector has a self-financing capacity with a high revenue base even at a sustainable utilisation level.

The establishment of a temporary, DFW-independent logging control body has been proposed. However, temporary, ad hoc institutions often have a tendency to find reason d’être even after fulfilling their mandate, particularly if remuneration of the staff is more generous than in the civil service in general. However, restoring order in forestry requires drastic actions. Therefore it is recommended that a permanent Forest Commission is to be established that would replace the DFW. The Commission would be a quasi-independent body in charge of managing, together with the local communities, the national forest estate. It would not be an integral part of the civil service even if it was still under the supervision of the Ministry of Agriculture, Forestry and Fisheries. There would be a strict division of labour, no MAFF interference in the operational management of the Commission should be allowed.

The corporate culture and administrative structure would need to be rewarding to discourage corruption. The Commission would be self-financing and the Treasury would get the net profits generated. The main income generating function of the Commission would be to act as a service agency to the other stakeholders in forestry; mechanisms need to be developed to ensure that the Commission would not be able to generate short-term profits by excessive logging.

Demand Policy

Illegally established mills should be confiscated and disposed of, either by destroying or selling abroad (though not to neighbouring countries). This would curtail much of the demand. A policy of raw material substitution should be established. This could include:

1. encouraging research in and use of Lesser-Known-Species (LKS) by the industry
2. promoting sustainable wood energy use and household production

Research in LKS could be carried out in co-operation with Viet Nam as its forestry resources will also suffer increasing raw material deficit after the illegal logging in Cambodia is curtailed.

Information Systems and Forest Statistics

There is a need to improve, or rather to introduce systems aimed at the collection and dissemination of forestry resource, forestry operation, forestry industry information and statistical data. Information is a powerful tool in managing and analysing the sector. It is recommended that Cambodia as a part of the forest sector restructuring process initiates a program to collect forestry data and publish it. This process would also include a national forest inventory and active research on growth and classification of forests, as well as the economic and social aspects of forest utilisation. These latter research initiatives in particular need to be started as soon as possible, as obtaining results take a long period of time. For effective and transparent forest management and forest policy implementation it is essential that

1. forestry related statistical data is widely collected and made accessible in a consistent and coherent manner
2. industrial production and input, and foreign trade statistics should be collected and made public.

In both cases the development could go through a two-step process:

1. naming the independent body/ies, e.g. research institutes or national statistical institutes, responsible for such information services. The institute would have a right to collect all relevant market and forestry resource information in Cambodia. They would also have access to the little information already collected in the country.
2. the institute[s] would publish the information in such a way that no information from a single market player would be disclosed.

There is also a need to carry out a large-scale forest inventory in Cambodia and to keep it updated. All the countries in the GMS region need strengthening in forest statistics systems and their development should be harmonised in the region. The initial stage would be to jointly agree upon the nomenclature, methodology of measurements and the units of measure.

It needs to be stressed that the data collection and actual statistical work would be a national responsibility based on the jointly agreed standards. The regional co-operation would have three main benefits compared to an entirely national processes: a) training and training material production could be jointly implemented, b) development costs per country would be lower, this particularly applies to expensive and time consuming computer software development, and c) common nomenclature enables further regional co-operation in analysing and monitoring wood flows.

Literature Consulted

Butterfield, Rebecca (1998): Land Use Allocations in Cambodia and Mechanisms for National and Provincial Level Co-ordination. Forest Policy Reform Project – Technical Paper no. 1. Phnom Penh–Burlington, USA

Carle, Jim (1998): Forest Industries and Trade Policy in Cambodia. Forest Policy Reform Project – Technical Paper no. 4. Phnom Penh–Burlington, USA

Clarke, John (1999): Biodiversity and Protected Areas-study – Country Report: Cambodia. Poverty Reduction and Environmental Management in Remote Greater Mekong Subregion Watersheds (Phase I). Vientiane

DAI (1998) Findings and Recommendations of the Log Monitoring and Logging Control Project. Main Report. Bethesda, USA

Global Witness (1998a): Press Release December 1998. http://www.oneworld.org/globalwitness

Global Witness (1998b): Going Places... Cambodia’s Future On The Move. http://www.oneworld.org/globalwitness

Global Witness (1998c): Viet Nam Legitimises Plunder of Cambodia’s Forests – press release December 1998. http://www.oneworld.org/globalwitness

Global Witness (1998d): High Level Collusion between the Vietnamese Authorities and the RGC to Export Logs to Viet Nam – the evidence. http://www.oneworld.org/globalwitness

Global Witness (1998e): Briefing Document on Vietnamese Imports of Cambodian Logs. http://www.oneworld.org/globalwitness

Global Witness (1999): Made in Viet Nam – Cut in Cambodia: How the garden furniture trade is destroying rainforest. http://www.oneworld.org/globalwitness

Hong-Narith (1997): Country Paper on Some Aspects of Forestry in Cambodia. Asia–Pacific Forestry Sector Outlook Study. Working Paper Series (APFSOS/WP/18). FAO. Rome–Bangkok

ITTO (1998): Annual Review and Assessment of the World Timber Situation 1997. Yokohama, Japan

RGC (1999): Declaration on Management of Forests and Elimination of Forest Illegal Activity. Declaration no. 01 of 25^th January 1999. Phnom Penh

Ruzicka, Ivan (1998): Taxation and Policy Reform in Cambodian Forestry. Forest Policy Reform Project – Technical Paper no. 5. Phnom Penh–Burlington, USA

World Bank (1999): Cambodia. A Vision for Forestry Sector Development – Background note.

ANNEX 1

People met during the mission

Only people specifically interviewed have been listed. Many more people, who go unlisted, also provided their valuable advice and comments.

ANNEX 2

Itinerary of the Consultancy