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Company Profiles
Part IV

The following corporate profiles are based on news reports, financial
sources and other secondary references. Publicly listed companies are
presented in the first part of the corporate section and other
companies or interests in the second. In addition to location of
operations, information on political connections, size of concessions,
contract details and environmental and social impacts are described
when such information is available. Because of the secrecy surrounding
logging operations, it is often difficult to obtain information about
companies' activities and, when such information is available, to
verify its accuracy. Every effort has been made to double-check
references but, in a number of instances, conflicting stories are
reported in the press or it is not reported whether negotiations were
subsequently concluded.

Listed companies

Aokam Perdana Bhd
Associated Kaolin Industries Bhd
Austral Amalgamated Bhd
Berjaya Group Bhd
Best World Land Bhd
Damansara Realty Bhd
General Lumber Fabricators & Builders Bhd
Idris Hydraulic Bhd
Innovest Bhd
Kumpulan Emas Bhd
Land And General Bhd
Lien Hoe Corporation Bhd
Long Huat Group Bhd
Rimbunan Hijau Group
Samling Group
Timbermaster Industries Bhd
WTK Group

Other companies / interests

Atlantic Industries Ltd
Chew Piau Bhd. / Eastern Era Bhd.
Hasedat / Zimmal Holdings
KTS
Mafira Group
Nila Wood Sdn Bhd / Maving Brothers Ltd
Parklane
Primegroup Holdings Ltd
Solid Timber Sdn. Bhd
Syuen Corporation
Tenaga Khemas Sdn. Bhd

AOKAM PERDANA BHD (FORMERLY AOKAM TIN BHD)
Teh Soon Seng

Aokam Perdana, a tin mining company, was launched into the timber
business in August 1990, when Managing Director Teh Soon Seng (right)
undertook a reverse take-over of the company by injecting timber
processor Pembangunan Papan Lapis (Sabah) Sdn Bhd (PPL) into Aokam.183
In exchange, Teh gained control of the listed company. By the end of
1994, Aokam was a stock market favourite, with shares worth US$1.6
billion and profits of 40-60% a year, one of the highest rates in the
world for a timber company.184 The former company chairman, Tunku
Abdullah, who retired in September 1997,185 is a close associate of
Prime Minister Mahathir.186 The current chairman, Samshuri Bin Hj
Arshad,187 is a former deputy speaker in the lower house and former MP
of Balik Pulau (Penang).

A major advantage for the company has been its deal with Idris
Hydraulic, through which Aokam obtained access to a cheap wood
supply—RM170 (US$68)/tonne compared to normal price at RM400-540
(US$160-216)/tonne—from Idris Hydraulics' Sagisan concessions in
Sabah, covering 256,000 ha.188 Aokam Perdana also has a 40-year joint
venture for plywood manufacturing between wholly-owned subsidiary
Aokam Resources Sdn Bhd (55%) and Changchun Plywood Plant (45%) in the
Chinese province of Jilin and was reported to be seeking logging
concessions in China,189 although this was later refuted by the
company.190 Aokam has sought joint ventures with Idris Hydraulic in
Myanmar and Laos.191 The company was reportedly offered concessions in
the Solomon Islands and Papua New Guinea, but turned them down due to
a lack of manpower.192

The former rising star of the Kuala Lumpur Stock Exchange has been in
rapid decline, showing a net loss of RM144.73 million (US$57million)
for the year ending June 1996.193 According to analysts, Aokam's
timber complex became severely under-used, with a number of problems
including inadequate supply of logs.194 In November 1997, Teh Soon
Seng, who ceased being a director in March 1997,195 was wanted by the
Malaysian police in connection with RM45 million (US$11.25 million) of
missing funds. The police were investigating claims of
misappropriation of funds in Aokam Perdana or the transfer of money
into another company's account in which Teh also had an interest. The
police were also looking for another Aokam company executive, Low
Thian Hoe.196

The forestry subsidiaries of Aokam Perdana are likely to be involved
in current efforts to restructure the company in the face of severe
financial difficulties. As part of the restructuring plan, it has been
proposed that Aokam Perdana buys timber harvesting rights from Idris
Hydraulic.197 At the end of May 1998, it was reported that Aokam's
subsidiary PPL was being sued by a creditor for non-payment of bills
and the parent company had obtained a restraining order against PPL's
winding-up until restructuring has been completed.198
ASSOCIATED KAOLIN INDUSTRIES BHD

In October 1996, Associated Kaolin Industries Bhd was reported to be
acquiring a total of 104,758 ha of timber concessions in Gabon through
the purchase of Winnerpac Sdn Bhd from Landzen Developments Sdn Bhd,
which in turn had secured the rights to the concessions from a
Gabonese company, Societe Forestiere de Makokou (SFM). The deal
includes three areas in all: 80,000 ha under a 20-year concession,
15,000 ha under a 10 year concession and 9,758 ha under a 7 year
concession. The total marketable timber was estimated to be around 6
million cu m.199

AKI stated that this acquisition would complement the activities of
another subsidiary company, Caton Wood Industries Sdn Bhd in Malaysia,
which manufactures plywood and veneer products, the Gabonese
concessions ensuring a supply of logs for Caton's downstream
processing operations in Malaysia. The deal would give the Gabonese
company, SFM, 10% of pre-tax profits whilst the Malaysian company
would get the remainder. AKI expected its subsidiary Winnerpac to be
able to repatriate profits for the financial year to June 30 1998,
subject to authorisation from the Gabonese finance minister.200

In April 1997, Caton Wood Industries was put into the hands of
receivers due to the default on loans and banking facilities totalling
RM22.5 million (US$9 million).201 In June 1998, a Memorandum of
Understanding was entered into between AKI and Landzen for the
acquistion of SFM to be completed within six months, taking account of
the Sale and Purchase Agreement signed in October 1996 and an
independent valuation of the timber concession. 202
AUSTRAL AMALGAMATED TIN BHD

In December 1997, property-based Austral Amalgamated Tin Bhd was
reported to have secured a 10 year timber concession in Cameroon,
covering 60,000 ha. According to Mohd Karim, executive chairman of the
company, the investment was seen as a cushion in times of slowdown and
was expected to help boost group profits in 1998. It is not clear
whether this deal went ahead or not. The group was also reported to be
exploring opportunities in other African countries.203 Austral has a
subsidiary called Million Quest Sdn Bhd, registered as a trader in
logs, and another called Million Quest (Myanmar) Sdn Bhd, also
registered in Malaysia.204
BERJAYA GROUP BHD

The Berjaya Group is a large, diversified conglomerate, including
seven public and about 200 private companies, involved in gambling,
textiles, tourism, hotels, financial services, industrial products,
real estate and consumer marketing.205 It is based in Kuala Lumpur,
and is controlled by Vincent Tan Chee Yioun. The company has gained a
reputation at home for planning to build tourist resorts in
ecologically sensitive environments, which have prompted environmental
and public interest groups to launch two campaigns since 1990 against
projects on Penang Hill (the project was cancelled) and on Redang
Island (the project was reduced in size after ecological damage
occurred).206

Tan Sri Vincent Tan Tan Sri Vincent Tan has access to a number of
significant political figures through some of his many companies. He
took over the failed Tropical Veneer Company Bhd, which was in
receivership at the time, and renamed the company Intiplus Bhd,
bringing it under Berjaya's control. Datuk Haji Mohd Fatmi bin Haji
Che Salleh was appointed as deputy chairman of Intiplus in March 1995,
after the take-over. Salleh was a member of the Central Committee
(EXCO) of UMNO Youth Malaysia,207 as well as having held various other
official positions. Ramli bin Zahari, appointed as a director of
Intiplus in 1995, was at the time head of UMNO Kuala Kangsar
division.208 Danny Tan Chee Sing, Berjaya managing director, is one of
the small group of new Chinese capitalists who are closely associated
with leading Malay politicians209 and Jaffar Bin Abdul, appointed as a
director in August 1997,210 is the former Inspector General of Police.
In November 1994, Berjaya Textiles Bhd was taken over by Rimbunan
Hijau.

The Group attempted to move into logging in several countries in 1994.
In May of that year, Berjaya's wholly owned subsidiary, Berjaya Group
(Cayman) Ltd, acquired a timber company in Solomon Islands, Star
Harbour Timber Company Ltd. In September 1994, Berjaya Group Bhd
bought 60% stake of the Canadian timber company Taiga Forest Products
Ltd and aimed at expanding Taiga's operations into the US. Taiga's
main activity is as distributor of building products like lumber,
roofing, moulding and insulation; the deal valued the company at about
C$50 million.211 Also in 1994, the group started negotiations in
Guyana and Suriname for access to vast timber concessions.
Solomon Islands

Berjaya Group Cayman bought Star Harbour Timber Company Ltd for US$1
million cash, giving Berjaya access to 45,000 ha concession at the
price of only US$ 22.22 (RM 58.43) per ha, inclusive of the sawmill,
compared to an average of US$1,000 (RM2,500) per ha in Malaysia
(without sawmill).212

Just a few months after the deal, the Managing Director of Berjaya
Group (Cayman), Mr Tony Yeong resigned over allegations of an attempt
to bribe the country's Commerce, Employment and Trade Minister, Mr
Joses Tuhanuku. The Minister alleged that Mr Yeong attempted to bribe
him with RM8,000 (US$3,200). The Minister refused the money and
immediately informed Prime Minister Billy Hilly. Mr Yeong was asked to
leave the country and resigned from the company. Mr Tuhanuku also said
that Yeong insisted it was an accepted practice in the South Pacific,
and indeed around the world, for a large company such as Berjaya to
show its appreciation to those in government who assisted the company.
Berjaya Group protested against the allegations.213

Berjaya had proposed to invest US$60 million (RM157.8 million) in the
country, in exchange for which the provincial governments of
Guadalcanal and Makira agreed to grant an aggregate minimum of 600,000
ha of forest concession. The US$60 million investment was to be for
building an integrated timber processing complex in the Solomon
Islands.214 It was later reported in Hong Kong that the company failed
to raise the capital needed for the deal215 and eventually withdrew
from the Solomon Islands altogether, following disputes with local
landholders. One landowner described their withdrawal in the Solomon's
press, "Thank God Berjaya pulls out... this news brings relief to our
souls".216
Guyana

The Berjaya Group has sought to invest in Guyana since 1994. The
company requested a 700,000 ha concession in the New River-Upper
Berbice area with a proposed investment of US$112 million. The company
also sought exemption from withholding tax on dividends paid to
non-resident shareholders and on interest payments paid to offshore
lenders, exemption from export duties on all processed wood products,
exemption from import duties on all materials used by the company, a
fixed ceiling on corporate tax rates, fixed royalty rates for the
entire life of the contract, deductibility of all interest payments,
an accelerated depreciation allowance, unlimited use of foreign labour
when needed, and investment protection guarantees.217

No contract could be signed because the forest area in question was
outside the State Forests and because the government—due to national
and international pressure against the sell-off of the Guyanese
forests—put a freeze on handing out of new logging concessions from
October 1995. The moratorium is still in place.

However, in 1997, despite the fact that the Guyana Forestry Commission
was still weak, the State Forests were extended by 4.6 million ha in
the Southern part of the country and large tracts of forests were
selected to be leased out as Exploratory Leases. Berjaya signed a
memorandum of understanding with the Guyanese government for an
exploratory lease in April 1997 for access to 760,000 ha of allegedly
pristine virgin forest,218 which are also claimed by the Macusi and
Wapisiana indigenous peoples.

Significantly, Berjaya has been operating through another Malaysian
company, Tenaga Khemas Sdn Bhd, which owns 87,850 ha concession in the
Berbice River area. Tenaga Khemas also controls two other companies,
UNAMCO and Case Timbers, and Mr Villupillai Kanagalingam (Tenaga
Khemas' representative) confirmed that he is associated to Berjaya.219
Berjaya therefore may hold, either in its own name or through its
interests in Tenaga Khemas, Case Timber and UNAMCO somewhere around
1.5 million ha of forestry concessions in Guyana.
Suriname

As soon as Vincent Tan put his feet in Suriname in 1994, he made Mr
Surinder Mungra, the brother of Suriname's Minister of Foreign
Affairs, the director of his Suriname company. Immediately afterwards,
Berjaya applied for a huge concession of 1.1 million ha which was
prevented from being awarded only due to massive national and
international outcry. A considerable part of the area requested by
Berjaya is inhabited by Amerindian and Maroon peoples, who felt
severely threatened by the concession. This sparked great opposition
by indigenous peoples, environmental and human rights organisations.

In February 1997, after the government announced that the 1 million ha
deal was probably going to be cancelled, Berjaya requested a different
logging concession of 150,000 ha. It now appears that Berjaya has been
awarded three exploratory permits, whereby the company can conduct an
inventory of forest resources and produce a management plan but is not
allowed to log, totalling 300,000 ha.

According to a newspaper report, Berjaya was already busily chopping
down trees in 1996, despite not officially owning concessions. This
was made possible through Berjaya's director Surinder Mungra, who
arranged for Berjaya's equipment to be employed on concessions that
had been worked for dozens of years by small-scale Surinamese
companies. When journalists visited a couple of these concessions,
armed men overseeing the logging operations said that they were there
to protect Berjaya's property. The names of Mungra and Berjaya were
repeatedly heard despite the fact that the concession belonged to
someone else on paper and that under Surinamese law it is forbidden to
transfer timber cutting permits to third parties, with the risk of a
punishment of immediate withdrawal of the concession.220
BEST WORLD LAND BHD (FORMERLY BENTA PLANTATIONS BHD)

Kenneth Eswaran, a newcomer to the corporate scene, bought into Benta
Plantations Bhd via a reverse-takeover, acquiring 31% of this company
and 28.1% of Mun Loong Bhd. Eswaran's partner, who owned a further 30%
of Benta, is Haji Ishak Ismail, of Idris Hydraulic221. Benta changed
its name to Best World Land Bhd and, in 1994, Eswaran was reportedly
interested in a 250,000 ha timber concession in Southern Laos and was
expected to sign a deal with the Laotian authorities at the beginning
of 1995 and to undertake logging activities during that year.222 The
concession would allow logging for 6 or 7 years. Eswaran was reported
to be setting up a new company, with both the listed vehicles in which
he was involved (Benta—now Best World Land—and Mun Loong) investing
55% and 45% repectively in the new company. Total investment in the
new concession was to be about RM60 million (US$24 million). Because
the timber business was new to these companies, Eswaran was believed
to be scouting around to hire timber experts.223 Best World Land Bhd
sold its equity in Mun Loong Bhd at the end of 1995 for a loss,
reportedly in order to concentrate on its core business of property
development.224 It is not clear whether the Laos deal was successfully
concluded or not.
DAMANSARA REALTY BHD (FORMERLY KESANG CORPORATION)

Damansara Realty's main business interests are in steel mills,
property development, timber and oil palm plantations. In 1993, KUB
acquired a 15% stake in Damansara Realty (then called Kesang
Corporation).225 KUB is an UMNO members' co-operative which functions
as an avenue for party members to pool their resources for investment
purposes. The Johor Corporation, the Johor state government's
development agency, currently owns 42% of Damansara Realty and the
State-controlled Employees Provident Fund is also a shareholder.226
Damansara Realty owns 32% of the Long Huat Group.227

Damansara has incorporated in Papua New Guinea as Damansara Forest
Products (PNG) Pty Ltd. In 1995, the company successfully completed a
deal which granted it access to 121,000 ha of lush coastal forests in
Aitape, West Sepik Province: 30,000 ha were slated for clearfelling
for the establishment of oil palm plantations and the rest were to be
managed for selective logging. The export of logs began in July
1996.228 The company had no plans to establish any
downstream-processing facilities in Papua New Guinea and logs were to
enable Damansara's complex to increase its production.229

The Papua New Guinea deal was controversial even before it was
approved, with the then Forest Minister, Tim Neville, warning the
Government against the project, officially called Aitape Agro-Forest
Pty Ltd. The Catholic Women's Association in Aitape also condemned the
deal230 and there were claims that the genuine landowners were never
involved in any negotiations, and that the deal was being hurried
through.231 The deal went through after Tim Neville lost his post, but
local communities have been voicing opposition to the project on the
grounds that they were not consulted and they were not ready to let a
foreign company take over the forest. However, clearfelling started at
the end of 1995 and logs were exported from Aitape in 1996.232 In
July, 1998, the Papua New Guinea logging operations were halted due to
"adverse market conditions", and the company plans to terminate all
logging-related agreements and hopes to recover RM4.5 million (US$1.2
million) through arbitration proceedings.233
GENERAL LUMBER FABRICATORS AND BUILDERS BHD

General Lumber Fabricators and Builders Bhd (GLFB) announced in early
1998 that a company within the group, Rimyasa Development (PNG) Pty
Ltd, had received approval from the Papua New Guinea National Forest
Authority regarding a logging and marketing agreement with Basoma
Holdings Pty Ltd. Under this agreement, Rimyasa was appointed to
manage and undertake logging operations and marketing activities in
respect of 9,800 ha of forest in Papua New Guinea. The timber permit
area was extended for a further 10 years, commencing December 16th
1997, and Rimyasa's annual harvest quota is 120,000 cu m per year
through the term of the timber permit. GLFB proposes to venture into
sawmilling and other downstream processing activities in PNG.234 GLFB
has substantial processing capacity in Malaysia through a number of
its subsidiaries.
IDRIS HYDRAULIC (MALAYSIA) BHD

Idris Hydraulic and its subsidiaries are involved in a number of
sectors, including property development, forestry operations and
downstream processing. Idris owns various concessions in Keningau,
Sabah, collectively known as the Sagisan Concession, totalling 256,000
ha. The concessions last for various periods, up to the year 2011. In
order to efficiently exploit the concession, Idris entered into a
joint venture agreement with Aokam Perdana Bhd in 1992 and there have
been recent reports that these concessions will be transferred to
Aokam as part of a rescue package for the latter company.235 In
January 1997, 50% of the logs from the Sagisan concession were sold to
Aokam and the remainder exported.236

Idris Hydraulic is managed by Ishak Ismail, who has been secretary for
UMNO's Permatang Pauh division, under Anwar Ibrahim, deputy Prime
Minister and Finance Minister. Ismail was also a director of KUB, an
UMNO members' co-operative set up as an avenue for party members to
pool their resources for investment purposes.237 KUB controlled Idris
Hydraulic at one stage.238 Idris' Chairman, Tengku Ahmad Rithauddeen,
is a former Minister of Foreign Affairs239 and former Defence
Minister.

In December 1993, the company announced, after months of speculation
in the financial world, that it was taking over a Myanmar plywood mill
and forest concession of 3.4 million ha, in a joint venture with
state-owned Myanmar Timber Enterprise. The mill was located in Monywa,
in the Sagaing forest division. Forest studies by the Myanmar
authorities indicated that the Sagaing concession had a good
concentration of trees similar to meranti and had teak. 240 It was
believed that Aokam Perdana would enter the deal on a 50:50 split with
Idris. The deal appeared to be put on hold in 1994, as a result of a
shake-up in the Myanmar Timber Authority.241 The deal was reportedly
progressing once more in January, 1995.242

In January, 1996, the company was reported to be considering timber
concessions totalling 1.25 million ha in the Democratic Republic of
Congo and Gabon.243 In June 1996, it was announced that Idris
purchased a 51% stake in Societe Forestiere de Tchibanga for US$19.12
million. The Gabonese company has two forest concessions in Gabon,
totalling 246,500 ha. The company's chairman, Rithauddeen, was quoted
as saying that the group expected to produce about 6 million cu m over
20 years.244 Recent information puts Idris' holding in Societe
Forestiere de Tchibanga at 48%.245 There is uncertainty surrounding
the company's interest in the Democratic Republic of Congo.

Anscan International Ltd, a subsidiary of Idris, has signed two
concession agreements with the government of Laos. Pursuant to these
concession agreements, it was reported that Anscan was to develop a
468MW hydroelectric power plant, Xekaman 1, and a 500 kv transmission
line, in the southern Attapeu province. Power generated would be sold
to Thailand.246 The construction of the dam would flood 15,800 ha of
relatively pristine forests, including the north-west boundary of the
Dong Ampham protected area and also penetrates into it.247 The Xekeman
river feeds into the Se Kong river, which is a major tributary of the
Mekong. The dam is expected to have severe ecological impacts on these
three rivers' fisheries. Among the social impacts, the dam
necessitates the relocation of more than 1,100 ethnic minority people.
According to an Asian Development Bank report, people of the Kaseng
ethnic group claim to have been moved out during surveying of the site
in 1994, long before any need for clearance. "If this is confirmed it
seems probable that the absence of indigenous people in the area will
be used to press for support for future development at the site, under
the spurious grounds that there is no resettlement problem."248. It is
unclear whether the company is still committed to this project or not.
INNOVEST BHD

Innovest is a real estate company which has ventured into logging in
the last two years, with the acquisition of substantial forest
concessions in Africa. The company has recently proposed a name change
to Inter-Pacific Ventures Bhd, for which approval has been given, but
the change has not yet been effected.249

In 1996, it was announced that Innovest had acquired a 95% share in a
joint venture with a local government in Congo (Brazzaville) to
exploit forest concessions covering 336,000 ha under a 25-year
agreement. Under the terms of the agreement, the company is allowed to
export logs in the first two years, after which it is expected to
build a plywood mill and sawmill.250 A subsidiary has been established
to operate the concession: Innovest Industries Congo S.A., 92% owned
by Innovest Bhd, 5% by the state government of Mossendjo and 3% by an
overseas investment holding company.251

Logging was due to start in September 1997, with Malaysian staff being
sent to start work in July and August 1997. The total number of staff
was 189 in August 1997, expecting to rise to 290 by the end of 1997
and to 500 by the middle of 1998, according to the executive director,
Tan Sri Mohd Shariff Ahmad. He said that the company would also
recruit some Congolese staff, but did not say how many. He said
production was expected to reach 100,000 cu m by the end of 1997,
rising to 500,000 cu m by end of 1998. By the middle of 1998, all logs
would be processed to sawn timber and exported to the US, Europe and
Asia.252

In November 1997, the company announced that it also proposed
acquiring Tremendous Portfolio Sdn Bhd, which owns a substantial
timber concession of 1.14 million ha in the Democratic Republic of
Congo. Innovest proposed acquiring the company (which had an
indicative price of not less than RM75 million (US$18.75 million))
through a combination of equity and cash.253 In December 1997,
Innovest announced that it was buying two timber concessions totalling
707,000 ha in the Democratic Republic of Congo for US$3.5 million. It
is not known if the two deals are related nor if they were concluded
or not. Through the latter deal the company would gain the right to
harvest timber in the concession for the next 25 years, with an option
to extend for another 25 years. Innovest Executive Director Datin Loo
Chooi Ting stated that 50% of the purchase price would be payable to
La Societa Cofoa SARL on the transfer of the concessions to Innovest
and the balance when logging began. Under the sale agreement, the
company would transfer to Innovest all the concession rights for the
commercial operation, management and extraction of all species of
timber and other downstream activities.254

The larger concession, covering 500,000 ha, is located in the central
Democratic Republic of Congo region of Lusambo in Kasai province, the
smaller 207,000 ha concession is in the Western region of Idiofa in
Bandunu province. Loo said logging was expected to start in 1998. The
initial extraction rate would be 350,000 cu m per year and the timber
would be exported to USA, Europe and Japan. It was also reported that
the company intended to expand into downstream activities and would
build a 300 km tolled highway between Kinshasa and Matudi for "not
less than $40million". It was reported that the company would collect
tolls for 30 years, with the contract renewable for another 30
years.255

Innovest has downstream processing capacity in Malaysia through its
subsidiary, IB Timber Industries Sdn Bhd (formerly Wemberly Holdings
Sdn Bhd). It also owns Innovest International Ltd, which is a
timber-related business registered in the British Virgin Islands.256
KUMPULAN EMAS BHD

Kumpulan Emas Bhd's principal business prior to 1993 was engineering,
plantation and oil palm consultancy and advisory services. In October
1993, the company acquired four Solomon Island forestry concessions
via a British Virgin Island registered company (renamed Emas Pacific
after the purchase). The four concessions are: Integrated Forest
Industries Ltd. (holding a 158,174 ha concession in Makira Island),
Rural Industries Ltd. (holding a 63,670 ha concession in Makira
Island), Isabel Timber Co. Ltd. (holding a 234,000 ha concession in
Santa Isabel Island) and Silvania Products Ltd. (holding a 10,299 ha
concession in Vagunu island). Kumpulan Emas paid RM335 million (US$134
million) to buy the four companies. Rural Industries is dormant and
Integrated Forest Industries ceased operating in 1996.257

At the time of the purchase, much was made about the potential of the
concessions to contribute to group profits, despite Kumpulan Emas'
lack of experience in the forestry sector: "Even companies with no
experience in the timber industry have leapt onto the South Pacific
logging bandwagon. Malaysia's Kumpulan Emas Bhd... has transformed
itself within two years from an engineering group into a ruler of the
rain forest".258

The prospective "injection of potentially lucrative timber assets into
Kumpulan Emas will lift it from the doldrums and vastly enhance its
earning profile".259 These predictions have proved correct and,
according to company annual reports, the forestry operations in the
Solomon Islands have been the primary source of profits for the group,
including a profit guarantee.260 However, in the Solomon Islands, the
company's operations are surrounded by controversy, becoming known for
the environmental and social problems they have caused.

Between 1993 and 1995, Silvania Products Ltd (the most active of the
concessionaires) had its operations suspended by the government on
four separate occasions.261 Several site reports have highlighted the
severity of problems associated with Silvania's and Isabel Timber
Company's operations:

In February 1994, government representatives visited a Silvania site
and found extensive damage to tambu sites (protected sites of
spiritual and cultural significance). These sites had been clearly
marked by the company, as required by the Standard Logging Agreement
and provincial ordinance, and therefore were easily identifiable to
workers. However, as the report states, "it appears that the damage
caused by the logging operation is the result of a lack of
understanding of what the tambu site markers represent or else there
is total disregard for these sites by those involved in the logging
process".262 The report made several recommendations, including better
communication between Company management and other employees.263

In March 1994, a visit by representatives of the Ministry of Forests,
Environment and Conservation, accompanied by Silvania staff, took
place to Silvania operations where road-building and tree-felling
operations were taking place. Again, significant criticisms of the
operation were noted. The visitors were "appalled at the level of
environmental disturbance taking place due to inexperienced and
unplanned logging operations" and 11 contraventions of the Standard
Logging Agreement were observed. The report states: "The poor state of
Silvania's logging operations was attributed to a recent change of
ownership resulting in inexperienced and unprofessional staff
conducting an environmentally destructive operation" and recommended
the immediate cessation of tree felling and new road building. The
report stated that all staff needed training and roads should be
upgraded, provided with drains and gravelled. "In summary, the
environmental impacts of Silvania's logging operation on Vangunu are
among the most serious observed to date in Western Province....An
immediate consequence of the logging operation is deposit of silt in
Marovo Lagoon from rivers flowing down from the eastern slopes of
Vangunu Island. "264

On 11 August 1994, Silvania Products Ltd. received a letter from the
country's Commissioner of Forests temporarily suspending its logging
operations.265 According to an Australian press report, Silvania
Products was alleged to be resorting to "illegal and highly damaging
practices" in carrying out its logging activities. The company was
reported to have exceeded the export quota, failed to protect
waterways and coral reefs from soil erosion and failed to build a
local sawmill. Solomon Islands' Forest, Environment and Conservation
Minister, Joses Tuhanuku said that this was not the first time that
Silvania's licence was revoked, its licence having been revoked twice
by the previous Minister.266

In November 1995, Silvania's logging operations were suspended again
by the Commissioner of Forests, along with those of Isabel Timber
Company, for failing to construct adequate roads prior to felling
operations.267

An Environmental and Social Impact Assessment carried out on behalf of
local landholders in April 1997 detailed the severity of impacts of
Isabel Timber Company's logging operations on a number of plots on
Isabel Island. The report detailed numerous contraventions of both the
Standard Logging Agreement (the official agreement setting out
operating requirements) and the Code of Logging Practice (introduced
by the government in 1996, with the assistance of the Solomon Islands
Forest Industries Association). The report concludes: "The description
in this assessment of a litany of poor forest management practices
points to little prospect for commercially viable stands of timber
trees being available for harvest on realistic scales within time
frames relevant to human development regimes. The post harvest forest
condition is such that long term degradation of flora, fauna and
substrate have occurred and will continue to occur both within the
logged-over forest areas and adjacent affected sites e.g. rivers,
estuarine and marine areas including fringing reefs."268

In addition to severe ecological damage, social impacts have been
caused by Isabel Timber Company's operations. The difficulties in
identifying all relevant landholders to take part in negotiations
caused division amongst communities and there were allegations that
landholders were tricked into signing documents they did not
understand. Verbal commitments by the company to provide clinics and
schools were not fulfilled. There was also distress at the level of
water resource degradation caused by the logging activities.269

Isabel Timber Company is 30% owned by a customary landowners' trust,
making it the only subsidiary not 100% owned by Kumpulan Emas. In
theory, this should ensure that, as a shareholder, the trust is paid a
proportion of the profits from logging equivalent to 30% of the
dividend declared by the Solomon Island company. No dividends were
paid to the trust until 1996, after protest from the community.270
LAND AND GENERAL BHD

In the early 1990s, under the chairmanship of Wan Azmi Wan Hamzah,
this timber company, formerly known as General Lumber Bhd, began a
rapid and successful strategy of diversification into areas such as
property development, shipping and financial services. However, the
company still holds a number of forestry related interests, and
reportedly expanded to overseas operations in recognition of west
Malaysia's limited forest resources.271

Wan Azmi is reportedly a close associate of Daim Zainuddin272
(economic advisor to the government, former Finance Minister and
treasurer of UMNO), and has been linked to Aokam Perdana Bhd through
the joint ownership of other companies.273 Lim Thian Kiat, a director
of Land and General,274 is also understood to be one of a set of new
Chinese capitalists said to be closely associated with leading Malay
politicians.275
Irian Jaya/West Papua

By acquiring the British Virgin Island-registered investment holdings
company Kinley Trading Ltd in 1995, Land and General gained control of
an Indonesian timber complex and a log supply contract through
Kinley's subsidiary, PT Wapoga Mutiara Industries. The complex has
downstream timber processing and is in import and export trading. The
log supply agreement amounts to 800,000 ha of forest at the Gulf of
Candrawasih, Manokwari and Jayapura in Irian Jaya/West Papua. Part of
the agreement included a profit guarantee for the first three years of
US$13.5 million per year. The concessions are for a period of 20
years. 276
Cameroon

Conflicting reports have appeared concerning Land and General's
investment holding company Overseas & General Ltd (OGL), and its
proposed deals in Cameroon. The Star newspaper of Malaysia reported in
July 1997 that OGL had acquired a 55% stake in Cameroon's Societe
Forestiere et Agricole des Ruraux Africains SA.277 Financial analysts,
GOH, reported in August 1997 that OGL had recently acquired rights to
a 206,120 ha concession at minimal cost and would be setting up a
100,000 cu m capacity mill in Cameroon.278 It is not clear if these
deals went ahead. According to the KLSE, in August 1998, the group
owns 52.3% of Overseas and General SARL, which is registered in
Cameroon, but this company's interests are listed as being "management
and marketing".279
Papua New Guinea

In 1991, Land and General acquired the forestry operation Cakara Alam
in West New Britain, Papua New Guinea. It has access to 193,281 ha of
timber permits.280 The company's operations saw a pre-tax profit of
RM1 million (US$400,000) for the first half of 1997.281 Cakara Alam
has been dogged by controversy and is associated with poor
environmental and social practices.

A report written by a former forester with Cakara Alam identified a
number of breaches of the management plan for operations in the West
Arawe timber area.282 Breaches included undersized trees being marked
for felling; roads constructed along the top of ridges resulting in
soil erosion; failure to carry out post-logging site rehabilitation;
logging on slopes above 30 degrees; snigging and hauling across rivers
and creeks; failure to demarcate or establish buffer zones. "In
rivers, silts and debris resulting from timber exploitation is
evidenced on stones and river banks in all major rivers and
streams".283

In February 1995, angry landholders closed off a logging area in
protest at a breach of contract by Cakara Alam to build
infrastructure, including an airstrip and wharf, in the West Arawe
timber area, five years after logging started.284

Land and General has recently acquired a majority stake in the
Fenning's Timber group, which specialises in sawmilling and kiln
drying, with operations in Fiji and Australia.285
LIEN HOE CORPORATION BHD

Lien Hoe started out as a building and construction materials
manufacturer in 1969 but enjoyed only modest success. In early 1994,
the company started to diversify via the acquisition of North Sumatera
Timber Sdn Bhd, a small timber moulding plant complete with long-term
log supply contracts covering 180,000 ha of forest in North Sumatra,
Indonesia.286 Lien Hoe also owns 70% of Indonesian company PT Budi Tri
Sakti, which manufactures timber mouldings.287

In 1997, it was reported that Lien Hoe owned 51% of Carlton Resources,
a logging company with a 25 year logging concession covering 152,000
ha in Liberia. The company made the deal in 1995, paying US$2.50 per
ha, but production was disrupted due to political unrest in the
country. Logging resumed in November 1996 and the company was
forecasting that profits would start coming in by March 1997.288
LONG HUAT GROUP BHD

Long Huat Group Bhd has recently been trying to expand its core
business of manufacturing timber products to include logging, housing
and shoe manufacturing. After recent restructuring of the Long Huat
Group, the single largest shareholder is Damansara Realty Bhd.289 In
early 1996, it was due to start operations on its 4,860 ha concession
in Sabah, providing the group with 200,000 cu m of timber over the
coming three years. Although the concession was for five years, the
chairman Datuk Lew Sip Hon, said that logging would be completed in
three or four years' time.290

In addition to the Sabah concession, Long Huat announced in 1997 that
it was in the process of acquiring a logging concession in Papua New
Guinea through the purchase of Landwell Resources Pte Ltd.291 Long
Huat Group Bhd proposed to buy Unicorn Timber Industries Berhad (UTIB)
and a 41% equity interest in Landwell (a 51% owned subsidiary of UTIB)
as well as a 30% equity interest in C-Dragon (70% owned subsidiary of
UTIB). Landwell was incorporated in Papua New Guinea in 1989, and its
principal business is logging and sawmilling. C-Dragon was
incorporated in Malaysia in 1993, and is a timber processing company.
The major shareholders of UTIB, Landwell and C-Dragon were to enter
into a profit guarantee agreement with Long Huat, providing a profit
guarantee in each of the 3 financial years 31/8/99-2001. The
application for this scheme was to be submitted to the Securities
Commission at the end of December 1997.292 Business Times of Malaysia
commented on December 31st 1997 that the company was looking at ways
to finance the acquisition of Landwell with its merchant bankers. The
company was said to be looking at the pricing of the new issue and the
rights issue proposed earlier. According to the Managing Director,
Wong Chong Leong, the company still hoped to proceed with its plans,
despite the current constraint on credit facilities, as it is an
export-based company.293 It is not clear whether this deal is still
pending or has been aborted. ">
RIMBUNAN HIJAU GROUP

Datuk Tiong Hiew King Rimbunan Hijau (RH) is headed by Datuk Tiong
Hiew King (left), one of Asia's largest timber tycoons.294 Forbes
Magazine estimated the Tiong family worth to be US$2.5 billion.295 The
group controls both listed and unlisted companies. In order to gain
access to the Kuala Lumpur Stock Exchange, Rimbunan Hijau undertook a
reverse take-over of Berjaya Textile Bhd in November 1994, renaming
the company Jaya Tiasa Holdings Bhd. The Tiong family retains control
of approximately 30% of Jaya Tiasa.296 The other listed vehicle is
Subur Tiasa Holdings Bhd.

The group has a number of high level political connections: Mohamad
Arip bin Mahmud, the brother of Sarawak's Chief Minister (who controls
the allocation of logging concessions), was appointed as a director of
Jaya Tiasa on 13/4/95;297 a sister of the Chief Minister is also one
of Tiong's business partners.298 Other directors of Jaya Tiasa include
Tiong Thai King (Tiong's brother), who is a member of the Malaysian
Parliament,299 and Abu Talib bin Othman, former Attorney General.

Tiong is said to control an estimated 800,000 ha of logging
concessions in Sarawak and his family dominates the logging industry
in Papua New Guinea.300 The company has also acquired forestry
operations in Brazil; Cameroon; Equatorial Guinea; Gabon; Vanuatu, New
Zealand and the Russian Far East. Other subsidiary company operations
include a US$58.5 million soft-wood plantation development in New
Zealand, a sawmill in Shanghai, a cattle ranch in Australia, property
in Singapore, as well as interests in banking, newspapers and oil-palm
plantations. Rimbunan Hijau also owns a 40% share in Limbang Trading
Sdn Bhd, which has a 310,000 ha concession in Sarawak until 2009 (55%
of Limbang is owned by Sarawak's Minister for Environment and Public
Health, James Wong Kim Min).301 Recent rumours suggest that Rimbunan
Hijau owns, or is in the process of acquiring, Primegroup Holdings, a
company registered in British Virgin Islands with logging concessions
in Guyana and Papua New Guinea.
Sarawak

Rimbunan Hijau's operations in Sarawak have brought the company into
direct conflict with indigenous people over land rights issues. For
example, in 1987, Kayan villagers in Uma Bawang erected a blockade in
protest at the activities of Marabong Lumber Sdn Bhd, one of the Tiong
family concerns, which was polluting the waterways and threatening
their livelihoods. 42 farmers were arrested, but later released after
prosecutors dropped all charges against them;302 In 1993, complaints
were made to Sarawak officials regarding damage to fruit trees and
farm lands caused by Rimbunan Hijau Sdn Bhd.303
Papua New Guinea

Rimbunan Hijau has become the largest timber operator in Papua New
Guinea and, through a complex and opaque network of companies, is
estimated to control between 50 and 80% of Papua New Guinea's timber
production,304 with concessions estimated at nearly 2 million ha.305
In 1992, the annual turnover of Rimbunan Hijau companies in Papua New
Guinea was estimated at K700 million (US$722 million) out of the
country's K800 million timber industry.306 Rimbunan Hijau set up a
newspaper to strengthen its position in the country, providing itself
and the industry with favourable media coverage.307

Many claims of environmental degradation have been levelled against
Rimbunan Hijau and its subsidiary companies in PNG. For example:

§ After a site visit to RH subsidiary Niugini Lumber's operation in
LAK TRP, Dr Franz Arentz, a forestry specialist, remarked that this
was the worst example of tropical forest logging he had seen anywhere
in the world;308

§ An official report documented that staff operating in some sites
were not aware of the company's commitments in its own Environmental
Plan nor that they had a copy of the Plan available on site. The
report by the Department of Environment and Conservation recommended
that subsidiary, Nuigini Lumber, be prosecuted for breaches of its
environmental plan.309 Virtual clearfelling of some sites on steep
slopes over 25 degrees led to sheet soil erosion and there were also
cases of fuel-oil widely contaminating logging camp sites and washing
into nearby marine environments;310

§ Complaints have also been made about employee welfare. In a report
from a follow-up sanitary health inspection of camps 1 and 2 in their
Aria Vanu operation, the health inspector stated that RH had "totally
neglected the recommendations specified in the [previous] inspection
report of 8/12/93". The letter covered recommendations concerning
sanitory facilities, water supply, overcrowded and poor housing, a
lack of safety equipment and a number of other matters.311

Allegations of illegal activities against RH include:

§ RH subsidiary Pacific Logging's illegal logging within the
no-logging zone around Port Moresby;312

§ Pacific Logging's operation in Vanapa was found to meet only 3 of
the 26 conditions of its own environmental plan, a plan that itself
had not met any of the preliminary conditions of PNG government
approval in the first place;313

§ RH subsidiary New Guinea Lumber excavated live reef for use as road
and log pond surfacing. The same company was fined US$30,000 for
harvesting in a concession for 18 months without being registered. It
was estimated that the company had exported US$48 million worth of
logs;314

§ In March 1997, the Governor of Milne Bay (and former Forest
Minister), Tim Neville, confirmed that Saban, a contractor of Rimbunan
Hijau, was caught exporting rosewood logs, which are a prohibited
export in log-form in Papua New Guinea.315

In March 1994, Forest Minister Tim Neville and a film crew from the
Australian documentary programme 'Four Corners' who were making a
documentary on Rimbunan Hijau caught the company 'red handed' with
piles of undersized log on the dock awaiting export.316

As illustrated in the political section (see above), the timber
industry has had, and continues to have, great influence on the
political processes in the country, including the development of
forest legislation. It has been alleged that RH has chartered planes,
paid hotel bills and arranged for selected landowners to lobby against
the First Forestry Act in East New Britain.317 The company has
publicly lobbied against the raising of taxes, stating that companies
would have to look to Africa and Latin America if higher operating
costs were incurred in PNG.318

At the beginning of 1997, Francis Tiong, head of the Rimbunan Hijau
operations in Papua New Guinea, was appointed to the board of the
National Forest Authority, the agency charged with monitoring forest
management in the country, due to its position as president of the
Forest Industries Association. Due to the clear conflict of interests
of Mr Tiong, the Papua New Guinea Forest Owners Association threatened
to stop all logging operations in the country if landowners were not
represented on the National Forest Authority Board.319

In June 1998, Rimbunan Hijau was reported to be shipping K6 million
(US$2.4 million) of equipment to Russia, due to poor market conditions
and lack of government support (see below).320
Cameroon

In Cameroon, Rimbunan Hijau's subsidiary, Shimmer International, is
the contractor for the MPL (since 1995) and CAFECO (since 1996)
concessions, of 114,650 ha and 26,200 ha respectively. Both
concessions are part of the Korup Project area, which is intended to
conserve the Korup National Park. All of the timber was reported to be
exported as logs to Asian and European markets.321 MPL is currently
not operational. Rimbunan Hijau has other interests in Cameroon, and
Shimmer itself is divided into many subsidiaries within the country, a
structure which "is by its nature susceptible to evade the Cameroonian
law which limits the concession size to 200,000 ha by company".322

The suitability of these two areas for timber exploitation was called
into question by an Environmental Impact Assessment (EIA) of the
concessions undertaken in February 1997, which states that these two
concession areas "cannot be considered appropriate for timber
exploitation". The report found that "the actual timber exploitation
is not sustainable at all" in these two concessions, and that the
concessionaires had no management plan in place.323 A number of
environmental impacts were identified in the report, including:

§ construction of roads on steep slopes, resulting in considerable
erosion; high density of large roads and skidding trails leading to
opening of the forest canopy;

§ road construction of a poor quality thus liable to require major
reconstruction at a later stage;324

§ poor felling techniques; enormous waste of valuable timber;

§ a lack of limitations on timber harvesting, either in terms of
number of trees or volume of cu m to be extracted per ha.325

Neighbouring trees were felled and the canopy was opened up or even
completely destroyed over large areas326 leading to soil erosion,
particularly during periods of heavy rainfall.327

Although the two concessions provided unskilled jobs for locals, who
were initially happy to have roads, there are negative social impacts
associated with the logging. The MPL and CAFECO forest concessions are
inhabited by 7-10,000 local people belonging to four tribes, and
nearly all villages have a mixed subsistence and cash economy, with
hunting being part of the regular routine. Fishing is also an
important part of life, mainly for the women, and impacts on streams
through erosion threaten this traditional food source. Forests and
fallows are needed by all villagers to provide subsistence and income,
a source of potential conflict with logging operations. Non timber
forest products were reported to be under threat, and highly economic
trees used by the villagers were disappearing. Safety measures for
workers were deemed inadequate by the survey team.328 The team also
anticipated social unrest as infrastructure development was seen to be
unsatisfactory or inadequate to the local people's needs.329
Equatorial Guinea

Shimmer is also operating in Equatorial Guinea. In 1996, it produced
115,000 cu m of logs out of a total for the country of 471,000 cu m
and forecasts for 1997 were that it could produce 400,000 cu m.330
Gabon

Rimbunan Hijau are reported to be operating in Gabon.331
Vanuatu

Santo Veneers and Timbers Limited and Pacific Veneers were acquired by
Rimbunan Hijau in 1994. Santo Veneers is the main operator in the
country, logging on Santo Island. Vanuatu has a log export ban and
Santo Veneers has invested in a massive sawmill in Luganville. The
sawmill has a processing capacity of 50,000 cu m per year.332

The Santo Veneers operation has been a source of conflict with local
landholders since it started operating. In 1995, locals burned a Santo
Veneers bulldozer in protest at the company logging in an area for
which they had no contract. The supreme court acquitted the local
family concerned "after hearing evidence that Santo Veneers and
Timbers Limited were logging in an area where they had no contract and
continued to log the area even after the burning of their bulldozer
and a court injunction not to log there".333

Recent unconfirmed reports indicate that the company's activities on
the island of Santo remain controversial:

§ An official inspection visit on one occasion in 1997 identified
trees which had been cut illegally;

§ the company is believed to be entering into contracts after having
identified only a few of the legitimate landholders, rather than all
of them as required by law;

§ there are also believed to be other contractual irregularities and
reports of logging in protected areas.
Brazil

According to the 1998 report of the Brazilian congressional hearing on
the activities of TNCs in the Amazon, Jaya Tiasa Holdings Bhd created
a Brazilian subsidiary Verde Vivo Ltda, a holding company under the
presidentship of George Fan Yin Yon, which in turn set up Verde
Compensados S.A. to handle its timber operations. Verde Vivo Ltda is
also interested in establishing oil palm ventures in Brazil. Verde
Compensados S.A. took control of two Brazilian companies, Maginco
Compensados S.A. and Selvaplac Industria Madeira do Para Ltda, and
created 2 further enterprises, in partnership with Brazilian
interests, Maginco Verde S.A.(constituted on the 1st April 1997) and
Selvaplac Verde S.A (constituted on the 4th April 1997). The total
area under the control of the group is 53,997 ha, situated in the
state of Para. The Brazilian companies acquired by the group all had
records of infractions, suspensions of operations or land tenure
conflicts.334
Russian Far East

Rimbunan Hijau have been awarded a 48 year lease agreement in the
Russian Far East for harvesting over a 305,000 ha area. The annual
allowable cut is 550,000 cu m. The company has said it will invest in
downstream processing facilities in the region but the initial focus
will be on the export of logs. The concession is located in the Sukpai
watershed in the northern part of the Sikhote-Alin mountain range in
the Khabarovsk region. This project is expected to be controversial
because the forests are habitat for the Siberian tiger and are part of
a "Territory for Traditional Natural Resource Use" for local
indigenous peoples.335 In June 1998, the Rimbunan Hijau owned
'National' newspaper in Papua New Guinea reported that the company was
sending some K6 million (US$2.4 million) worth of plant and equipment
to Russia, including construction, road building and logging
equipment, because of the low log prices on the regional log market
for tropical hardwood and lack of Papua New Guinea Government support
for the industry.336
SAMLING GROUP

The Sarawak-based Samling Group of companies was founded by Datuk Yaw
Teck Seng in the early 1960s. Operating from the town of Miri, the
group started with three concessions from which it expanded to the
point where it controls 1.5 million ha of forest concessions in
Sarawak, another 1.69 million ha in Guyana and almost 800,000 ha in
Cambodia. In November 1993, the group succeeded in taking control of
Lingui Developments Bhd, which became its main listed vehicle. Some
securities analysts view the Samling Group as the country's largest
and most aggressive fully integrated timber group. The group's other
overseas business stretches to Japan, Taiwan, South Korea, the US and
Canada.337 The Samling group of companies are still controlled by
Datuk Yaw Teck Seng and Yaw Chee Ming, father and son (left)
respectively.338
Sarawak, Malaysia

Samling's logging operations in Sarawak have been highlighted by
forest peoples' communities as having been destructive and
disrespectful of their livelihoods in many instances. The most recent
occasion was in March 1997, when about 70 Penan, a nomadic hunting and
gathering people whose traditional livelihoods almost totally depend
on forest products, went to the Samling Plywood (Baramas) Sdn Bhd and
Samling Timber Sdn Bhd companies to protest about the destruction of
their forests and to hand over a letter petitioning the companies to
cease operations on their ancestral land. Instead of meeting with
company representatives, the Penan were met by a group of the Police
Field Force, armed with machine guns, tear gas and knives, who
verbally abused the Penan and then assaulted and beat them with
machine gun butts, boots and knives. Four of the Penan were then
arrested by the police for allegedly damaging company machinery. The
four were seriously ill-treated in jail and then charged on a
technicality of 'illegal assembly' before being released to await
trial. The case is still pending.
Guyana

In a joint venture with the Korean Sung Kyong group, Samling Strategic
Corporation Sdn Bhd set up a locally-incorporated consortium, the
Barama Company Ltd (BCL), in Guyana. Samling controls 80% of the
company. In October 1991, Barama was granted a 1.69 million ha forest
concession in the North-West of Guyana that by itself is larger than
all the indigenous peoples' titled land in the country.339

The agreement between Barama and the Guyanese government grants the
company a 25 year licence (automatically extendible for another 25
years) to log the concession for export of raw logs, sawn lumber,
veneer and processed plywood. The company enjoys a ten-year exemption
from income tax, corporation tax, withholding tax, consumption tax,
property tax, most import duties and timber export taxes. The
royalties have been fixed in Guyanese dollars over the first 20-year
period with no provision for adjustment as inflation devalues the
currency.340 Estimates based on data provided by the company itself
and the Guyana Forestry Commission show that Barama pays the
equivalent of less than 1% of the value of the goods exported in
taxes,341 resulting in very little gain for the country.

Barama is alleged to have set up an extensive patronage network in
Guyana. The late President Jagan's Asian fund-raising tour in 1993 was
financed by the company; Barama also paid for fencing the President's
residence in the capital Georgetown; it took on the ex-head of
Guyana's Natural Resources Agency as a consultant. He had previously
negotiated the original Timber Sales Agreement with Barama on behalf
of the government, .342

An environmental assessment of the concession by the Edinburgh Centre
for Tropical Forests (ECTF), contracted as a consultant by the
company, concluded that 'timber harvesting may not be biologically
sustainable at planned extraction levels'343 and that this was a major
risk that "could potentially jeopardise the objective of the entire
BCL programme".344

Although it is recognised that Barama addressed environmental problems
through the ECTF study, complaints have been filed stating that
pollution of river downstream of one of Barama's log ponds is
responsible for health problems among local residents.345

Those who are set to suffer most as a result of the Barama concession
are the indigenous forest people. The concession overlaps the lands of
an estimated 1,200 Amerindians, including four communities with titles
and land proposed as a reserve for the Carib people by the Lands
Commission in 1969. The concession also encloses a large number of
Amerindian homesteads without land titles, scattered along the main
rivers. ECTF, which visited the area in 1993, reported some
potentially serious negative impacts of BCL's operations, including
the reduction or elimination of traditional food, shelter and other
forest resources of local communities; increased hunting; wildlife
trade; illegal timber felling; social conflicts over jobs; split
communities; culture shock for remote communities; pollution from
chemical spills; and introduced diseases.346

The Amerindian Peoples Association (APA) has strongly criticised the
way in which the concession was awarded: no consultation with the
indigenous communities and no respect for the Amerindians' land
rights. Since 1993, the organisation repeatedly called on the Minister
for Amerindian Affairs to review the contract and subsequently called
for an international boycott of Guyanese timber. At that point, the
Minister promised to institute a Commission of Enquiry to review the
Amerindians' claim and the Barama contract, but up to now the promise
has not been honoured. Meanwhile, Amerindians near the logging camps
have also complained to the Ministry about illnesses caused by the
pollution of their waters, forced resettlement, the bulldozing of
crops, low wages, delayed payments and lack of injury benefits.347

In November 1994, a field survey conducted by the World Rainforest
Movement in co-operation with the APA in the concession area, revealed
that dozens of communities of Amerindians, both Caribs and others of
mixed descent, living in scattered groups throughout the concession,
were hearing for the first time about the Barama contract. They were
obviously upset and unhappy to learn that they now lived within a
logging concession belonging to a foreign company. Most of them did
not have land titles despite having claimed land ownership over the
land they inhabited for generations. A small Amerindian community of
Oronoque, which established a co-operative and planted fruit trees on
a 40 ha piece of land allocated to them in 1966, was relocated in 1991
to make way for Barama's log pond and office complex. Those affected
claim that they have not yet received compensation for the fruit trees
and the land promised to them. They now live in tiny lots of untitled
land in poorly constructed wooden houses mostly without water pipes.
They also allege that their graveyard was desecrated, some of the
graveyard bodies were accidentally bulldozed up by a BCL worker and
clumsily reburied in a single grave.348

In December 1994, the APA called on the Government to establish a
small Amerindian Land Commission to survey the Barama concession more
completely, to assess the Amerindian land claims and to legalise their
land ownership and to require the logging operations to stop
activities in the vicinity of the communities.

In June 1997, the Carib people of Port Kaituma lodged a petition
against the exploitation of their people by Barama to the country's
president.
Cambodia

In August 1994, SL International Ltd, a Samling Group company, signed
an agreement with the Cambodian Government giving the company two
timber concessions totalling 787,000 ha to log and manufacture
downstream wood products such as plywood. One of the concessions,
covering 464,000 ha, is located in Kratie, Mondul Kiri and Kompong
Cham Provinces, while the other, of 323,000 ha, is in Koh Kong and
Kompong Speu Provinces. Construction of Samling's huge sawmill (the
site covers about 2 square km), located close to Highway 1 to Vietnam,
12km from the Neak Loeung ferry crossing, started in early 1995 and is
now operational.349 Samling have also recently acquired the former
54,784 ha concession area of the Cambodia Timber Company in Kampot.
This concession area is close to Bokor National Park, with the
possibility that 15,000 ha overlaps the park boundaries.350

As with the allocation of other concessions in the country, there was
controversy surrounding the awarding of the Samling concessions. The
terms of the contract are extremely favourable, granting the company
an eight year tax holiday and a 60 year concession. Furthermore,
charges payable to Cambodia by the company do not reflect the true
value of the timber and no effective reforestation strategy is
included. A draft management plan was submitted to the Forestry
Department but was not approved because, among other things, it did
not satisfy sustainability requirements of the 1988 Forest Management
Law.351

After completing the access road for logging in one of their
concessions, Samling refused to allow locals to travel along it,
destroying one of the central positive claims put forward on behalf of
Samling's operation, namely, that the road would open up the province
to the local populace, and bring development. Locals have only been
able to use the road following pressure from the Provincial Governor.
Locals are also prevented from collecting timber, both for firewood
and for building. Promised levels of employment have not been
realised, with many Vietnamese being hired in place of Khmers.352

The pressure group Global Witness have received reports that Samling
were buying illegal timber (nearly exclusively deluxe quality) from
army units in Military Region No.2, and from local people, much of it
cut in the Snoul Wildlife Sanctuary. In addition, Samling were alleged
at one stage to be paying the Khmer Rouge US$350 per truck per month
in order to remove logs from the concession.353

Minister of Agriculture Tao Seng Huor wrote to Mr Han Chen Kong, the
Director of SL (Samling) International in April 1997354 stating that
Samling were guilty of:

§ Starting to cut before receiving a permit.

§ Cutting in areas not permitted by Forestry Department officials.

§ Cutting undersized logs.

§ Continuing exploitation despite the logging ban which came into
effect on 31st December 1996.
Brazil

There are a number of unconfirmed reports of negotiations between
Samling and forestry ventures in Brazil. These include a possible
joint venture with the Chinese company Tianjin Fortune Timber and the
government of China (16,850 ha), the acquisition from North American
interests of AMACOL, covering ownership of 76,844 ha and access to a
further 400,000 ha belonging to third parties (negotiations suspended
or not concluded). There are also unconfirmed reports that the company
was trying to buy 500,000 ha of land.355 (Brazilian congressional
report, 1997).
New Zealand

Samling-controlled Glenealy Plantations (Malaya) Berhad owns 100 % of
the following companies: Hikurangi Forest Farms Limited, Tasman
Foresrty (Gisborne) Limited and TreeOne (NZ) Limited.356
TIMBERMASTER INDUSTRIES BHD

The principal activities of TimberMaster are provision of management
services and investment holding. It is involved in manufacturing,
trading and exporting doors, frames and timber-related products. In
1995, it diversified into manufacturing plywood, veneer, sawn timber
and acquired a timber concession of 12,100 ha.357 TimberMaster's
Keningau (Sabah) complex has a production capacity of 12,000 cu m per
month, but in early 1997 was running at only 10,000 cu m per month.
TimberMaster was reported to be expanding into African countries due
to restricted availability of logs in Malaysia and Asia Pacific as a
result of tightening government controls.358

In 1996, TimberMaster's British Virgin Islands subsidiary,
TimberMaster Group International Ltd, signed a joint venture agreement
with the Madagascar Development Corporation for an 80% stake in a
joint venture to secure up to 500,000 ha of forest resources359
through the setting up of a subsidiary, TimberMaster Industries
(Madagascar) Limited.360 The Madagascar government are reported to
offer numerous incentives to draw foreign investment. The TimberMaster
joint venture comes with a 7 year tax free status and the purchase
price of RM20 million (US$8 million)was considered low by analysts,
who therefore anticipated a good contribution to the company's profits
from this deal.361

A Memorandum of Understanding has been signed with the Malawi
government for a 60% stake in a joint venture which includes 120,000
ha of pine plantation and plywood and furniture manufacturing
facilities.362

In early 1997, the company acquired a 220,000 ha timber concession in
Gabon through the purchase of Bois et Scierie du Gabon for US$17.6
million (an estimated RM 50 million i.e. RM40(US$14)/ha) from Dushan
Holdings Ltd. This was considered a very good deal for TimberMaster
since the assets of machinery etc. were valued at US$11 million. Bois
et Scierie du Gabon is involved in forestry exploitation, sawmilling
and trading of wood, including log exports. The timber can be
harvested over a 17 year period.363

In addition to the above deal, it was reported in April 1997 that
TimberMaster was believed to have secured the rights to log a further
1 million ha in Gabon, next to the existing 220,000 ha site, about
150km from Libreville. This new agreement was estimated to provide
300,000 cu m per year and the company secured the rights via
arrangements made with over 100 local residents who hold timber
concessions, or 'family cut' concessions in the Njolie area. The Star
newspaper in Malaysia quoted a source close to the company, who
claimed the site comprises virgin forest and can be logged over a five
year period. Extraction rates were expected to be 25,000 cu m per
month, rising to 50,000 cu m per month in 1998. In April 1997, the
company had a staff of 270 in Njolie and 62 units of heavy
machinery.364

The 1million ha Gabon deal was expected to contribute around US$9
million (RM22.5 million) net profit. It was reported that a nominal
tribute would be paid to the concession holders per cubic metre of
timber logged on their land. The company apparently committed to
investing US$30 million (RM75 million) to set up an integrated timber
complex at Port Gentil, Gabon's second largest port.365

The current status of the various African ventures is unclear, with a
recent search showing no African-based subsidiaries listed to
TimberMaster and the British Virgin Islands-registered subsidiary,
TimberMaster Group International Ltd, being dormant.366 A recent
announcement to the Kuala Lumpur Stock Exchange suggests that a Gabon
deal has been aborted.367
WTK GROUP

The WTK Group is the oldest of the big five Sarawak timber giants. It
is owned by Datuk Wong Tuong Kwang, the maternal uncle and logging
tutor of Datuk Tiong.368 The group is managed by two sons of Wong
Tuong Kwong: Wong Kie Yik and former Senator Wong Kie Nai. They are
both prominent financiers of James Wong's Sarawak National Party
(SNAP), Wong being the Minister of Environment. WTK holds huge logging
concessions in Sarawak totalling about 400,000 ha.369

WTK Holdings Bhd, the KLSE-listed wing of the group, requested a 6
month extension from the Securities Commission for the purchase of 11
timber companies at the end of last year but did not indicate why.370
The deal included a pre-tax profit guarantee of RM126.6 million
(US$31.6 million) per year for 3 years. The companies concerned, and
now listed as subsidiaries of WTK Holdings, were: Cairnfield Sdn Bhd;
Gopoint Sdn Bhd; Sarawak Moulding Industries Bhd; Woodbanks Industries
(M) Sdn Bhd; Kuching Plywood Bhd; Sanitama Sdn Bhd; Limpah Mewah Sdn
Bhd; First Count Sdn Bhd; Song Logging Co. Sdn Bhd; Ninjas Development
Sdn Bhd; Sut Sawmill Sdn Bhd. The list includes concession holders in
Sarawak and downstream processing and marketing companies371. More
recently, on 22/6/98, the Board announced that the High Court of
Malaya had granted it a 60 day restraining order to stop creditors and
others from taking court action including winding-up proceedings.372

WTK's main activities overseas have been in Papua New Guinea, where
WTK Realty has been operating a 287,000 ha concession in Vanimo,
Sandaun Province (West Sepik) and elsewhere in the country.
Sarawak, Malaysia

WTK logging operations in Sarawak have encountered resistance by
indigenous people since 1986. The Penan of the Magoh-River region were
threatened and intimidated when they started refusing small gifts from
the company in exchange for permission to log in their area. Penan and
Kelabit people were arrested in 1986-87 for blockading logging roads
serving WTK logging operations. Local people have also complained that
WTK is responsible for the destruction of a number of significant
cultural and spiritual sites such as graves and for the decimation of
important tree species used for making dart poison and many important
fruit trees which form part of the staple diet for the people of the
region.373
Papua New Guinea

Local reports in 1995 highlighted severe environmental and social
problems caused by WTK's activities. During the same year, the Vanimo
Landowners Association urged the Minister of Forests to undertake an
urgent review of the Project Agreement signed between the State
government and WTK, "before PNG's forests and natural environment is
completely destroyed under the dictatorship of the foreign contractor
company WTK Realty". The Vanimo Landowners Association highlighted the
fact that the company had breached the Project Agreement on several
grounds, including forest destruction, soil erosion and water
pollution, total disrespect of indigenous people. Even the legality of
the deal between WTK and the company which previously owned the
concession was questioned. The Landowners' Association called for the
termination of the contract as WTK had clearly failed to comply with
the Agreement and the conditions in the timber permit.374

In April 1997, WTK was reported to be pressing for a new concession in
the Whitemen ranges, an area of high biodiversity priority in West New
Britain Province. Andrew Baing, the pro-logging Forest Minister let
the Forest Board know that he wanted WTK to get the timber permit in
the Asengseng Forest Management Area. Originally, the Government had
said that there was to be no logging in that area because of
ecological priority and the morphology of the area, which has slopes
steeper than 30 degrees. Any logging in that area would breach the
Logging Code.375
Brazil

WTK Group has aimed to establish itself in the state of Amazonas
through two operations, the acquisition of the company Amaplac, which
has downstream processing facilities near Manaus, and through buying a
large area of forested land in Carauari municipality of 313,719 ha. In
March 1996, both Amaplac and the company WTK Brasil Florestal
(established in December 1995) were taken over by Datuk Wong Kie Nai,
Wong Kie Chie, Wong Kie Yik and Wong How Yeong.376

In fact the purchase of land by WTK has been the subject of some
confusion, with reports stating that the company was buying 1.2
million ha of forested land but discovered that 900,000 ha of that was
indigenous land and had to be returned.

According to the Malaysian Ambassador to Brazil, WTK has purchased a
sawmill and about 300,000 ha of timber concession in a remote area of
Amazonas State. The area was said to be situated between the Jurna and
Purus River, not far from the borders with Peru and Bolivia. However,
a WTK official refused to confirm the deal and said the company had
not yet started any timber activities in Brazil.377

Other companies / interests
ATLANTIC INDUSTRIES LTD

Atlantic Industries has been granted a logging concession covering
80,000 ha in traditional Maya land in Belize. Atlantic is reported to
be a subsidiary of a Malaysian company but the actual owners have not
been identified. The concession is located in the Columbia River
Forest Reserve and was bought for the reported sum of US$1.50 per ha.
The concession overlaps the lands of 10 Maya villages, who have
strongly protested the hand-out of concessions on their lands and are
actively fighting to get the concession withdrawn. However, Atlantic
has already built one of Central America's largest sawmills on Maya
land—over the protest of the Maya and without the Environmental Impact
Assessment required under Belize law.378 The company is also reported
to have cut forest outside the concession area and taken out trees
during the rainy season, accelerating soil erosion.379
CHEW PIAU / EASTERN ERA

In May 1995, it was reported that Chew Piau signed a Memorandum of
Understanding with Eastern Era to work three concession areas
totalling 507,300 ha for a period of 90 years in Papua New Guinea. 30%
of the area was to be developed into oil palm plantations and the
proposed venture included setting up an integrated industrial complex
for the down-stream processing of logs from the concession areas. Chew
Piau would hold 51% stake in each of the joint venture companies
established to operate in the concession areas.380
HASEDAT / ZIMMAL HOLDINGS

ZimMal Holdings is a joint venture between Development Trust of
Zimbabwe and a Malaysian company, chaired by Dr Hassan Ali, called
Hasedat. Sources told the Zimbabwe Independent that in return for
putting up 12,000 houses in the Matabeleland, the Malaysian investors
were given logging rights covering 50,000 ha of both Forestry
Commission and indigenous communal land under forest. The newspaper
also reported that Malaysian businessmen visited the northern part of
Matabeleland, which is rich in teak, mukwa and mahogany.381
KTS GROUP

KTS, headed by Datuk Lau Hui Kang,387 has bought the company Carolina
Industria and Comercio de Madeiras Tropicais Ltda, based in
Itacoatiara, Amazonas state, Brazil, from interests in the Cayman
Islands. Carolina has forest management plans covering 15,400 ha, but
these are currently suspended for being in the Abufari biological
reserve. There are also unconfirmed reports that KTS has bought around
400,000 ha of forest in the Vale do Rio Madeira.388
MAFIRA GROUP

In 1997, Mafira entered into a joint venture with Kwitaro Investments,
the first company to have signed a Memorandum of Understanding with
the Guyanese government for an Exploratory Lease to 760,000 ha of
forests in Southern Guyana. The deal was signed on 3 April 1997
between the then Guyanese President, Sam Hinds, Kwitaro's Director,
Rudy James and Kwitaro's parent company in Guyana (Kurupukari
Development Inc.), whose Executive Director is Lockman Sirin. The
Exploratory Lease is in Region Nine between the Essequibo, Kuyuwini
and Rewa Rivers. Kwitaro will pay US$0.50 per ha annually under the
exploratory lease.389

Rudy James, in a letter to the press on 16 April 1997, described his
foreign partner, the Mafira Group of Malaysia in the following terms:
"We have researched to find a joint venture partner with vast
experience in the industry and a good track record. They have earned
excellent environmental audit rating." The Guyana Human Rights
Association conducted a company search of Mafira and the only details
they received indicated that Mafira Techniques Sdn Bhd, managed by Lt.
Gen. Dato' Jaffa Mohammed, was established in 1990 and deals in
helicopters, warship lifeboats, missile and rocket launchers,
revolvers and pistols. In a press release of 17th April, 1997, the
Guyana Human Rights Association urged both the Government and Dr.
James to provide more specific information of the claimed "excellent
environmental audit ratings" of Mafira.390
NILA WOOD INDUSTRIES SDN BHD / MAVING BROTHERS LTD

Maving Brothers Ltd is a wholly-owned subsidiary of Nila Wood
Industries Sdn Bhd and one of the two main shareholders in the company
is also a member of the Board of Directors of New Zealand Wood
Products, a company linked through shareholding to IB Holdings
Limited, which is owned by Primegroup Holdings.391

Maving Brothers became one of the most controversial companies
operating in the Solomon Islands when the Solomon Islands' Government
gave it the right to log 895,000 cu m (worth US$130 million) in
Pavuvu, the largest island in the Russell group. The island is
inhabited by 2,000 local people, who were due to be resettled on
another island to make way for logging.392 The islanders refused to
move and threatened to burn any logging equipment brought onto the
island. Later in the month of April, soldiers with semi-automatic
rifles detained 56 islanders, armed with knifes and axes, who tried to
stop logging.393 In May, even the Catholic Church publicly condemned
the logging of Pavuvu. In July of the same year, the media reported
that 12 policemen were deployed to protect the timber workers and to
prevent protesters from disturbing the first ship-loading (bound to
Japan). On 3rd July, three bulldozers were burnt by angry local
people.394

Local reports claim illegal logging on customary land, logging of
undersized and protected nut trees, pollution of a freshwater stream
and logging close to watercourses.395 On 30 October, Martin Apa,
Russell Island's anti-logging leader, was found dead on Yandina wharf.
This was viewed by many as a suspiscious death, possibly a murder by
pro-logging locals, but no government investigation was carried
out.396
PARKLANE

Very little is known about this company apart from its logging
interests in Vanuatu, a cluster of 80 islands in the South Pacific. In
1994, Parklane had cut about 8,000 cu m of logs in less than two
months of operation on the island of Erromango. On 20 June, 1994, the
Vanuatu government announced a ban on round log export in order to
safeguard Vanuatu's forest resources. The ban led to Parklane's logs
being left on the island. The government intended to introduce
legislation that would put a gradual ban on export of undressed, sawn
timber and white wood and ask foreign companies to venture into
downstream processing.397 On a visit to Malaysia in November 1994,
Vanuatu's Prime Minister Maxime Carlot Korman said that the ban would
be forever and that the republic's authorities were going to meet soon
with five Malaysian companies affected by the ban to re-negotiate
their contracts. In May 1995, new deals were made, through which
timber cutting quotas were reduced. Parklane's yearly maximum on
Erromango was slashed from 78,000 cu m to 30,000 cu m and the company
was asked to build sawmills.398 Parklane did not cut logs in 1995 or
1996.
PRIMEGROUP HOLDINGS LTD

Primegroup Holdings Limited is registered in the British Virgin
Islands. It acquired several companies from the UK-based Inchcape Plc
in 1993, including SK Timber Corporation of Malaysia, BP Batu Ampar
Wood Industries of Indonesia, Turama Forest Industries of Papua New
Guinea and Forest Management Service of Singapore. The group has so
far been operating in Guyana and Papua New Guinea, but it seems to be
linked to other large timber companies. Recent rumours suggest that
Primegroup is owned by, or is in the process of being taken over by,
Rimbunan Hijau.
Guyana

The group incorporated in Guyana as Mazaruni Forest Industries Limited
and allegedly gained a Wood Cutting Lease to 600,000 ha on the Middle
Mazaruni area in 1994. The same group, calling itself Primegroup,
relinquished the Middle Mazaruni area in favour of being allowed to
take over Demerara Timbers Ltd (DTL) from United Dutch, with its
800,000 ha concession. The DTL concession overlaps unresolved
Amerindian land claims.399

Primegroup, through DTL, is planning to construct a US$20 million
plywood plant at Dallawalla, inluding a sawmill capable of producing
2,000 cu m of timber per month and has expressed interest in palm oil
cultivation along the lines of its palm oil operations in Malaysia.400

Papua New Guinea

Primegroup is also active in Papua New Guinea . It controls PNG Forest
Product South Coast Pty Ltd, which started logging in Morobe South
Coast in 1996, and Turama Forest Industries, operating in the Gulf
Province since the early 1990s. An official inspection of Turama
logging operations in the Gulf Province in May 1991 revealed a number
of breaches of the terms of their concession licence, non-compliance
with forestry regulations and environmental degradation. Following
this inspection, the activities of Turama were suspended by the
Department of Forests. Considering the substantial losses declared by
the company, suspicions were also raised of downgrading of logs and
transfer pricing, whereby profits were transferred to offshore
companies to avoid the payment of taxes to the Papua New Guinea
government. At the time of these operations, Turama Forest Industries
was owned by the UK based Inchcape Plc and was being bought by
Primegroup in February 1993. All staff, including the chief executive
officer continued with the new owners. Since 1993, Turama / Primegroup
operations continue to attract criticism. A permit to log a new large
concession area in the Gulf Province was issued to Primegroup without
tender in 1995, contravening the Forestry Act. A preliminary report by
the Ombudsman Commission is allegedly critical of the allocation
process.401
SOLID TIMBER SDN BHD

Solid Timber is a Sarawak-based company incorporated in 1980 in Sibu
(Sarawak), and active in purchase and sales of timber logs and hire of
logging equipment.402 It is directed by Dato Ding Lian Cheon, who has
been connected with Magnum Resources Pte Ltd and Solid Timbers (PNG)
Pte Ltd.403 Both of these companies are active in Papua New Guinea,
but Solid Timber's main operation will be in Guyana. Solid Timber is
also reported to have a 500,000 ha concession in Malaysia.404

At the beginning of 1996, the company applied for a 728,000 ha
concession in Guyana. The Guyanese Government did not approve that
application but signed a Memorandum of Understanding for an
Exploratory Lease of 760,000 ha with Solid Timber in May 1997. The
lease is in the Southern part of the country, between the Corentyne
River and the King Edward River, on the left bank of the New River.
The company plans to carry out an inventory in the area during the
first two years, after which it plans to set up plywood and furniture
industries. A representative of the company thanked the Government and
said that Guyana was conducive for promoting investment and bringing
benefits to the people, especially the disadvantaged groups.405
However, Amerindian organisations and environmental groups strongly
criticised the deal.
SYUEN CORPORATION

Syuen Corporation, based in Ipoh, Penninsular Malaysia and managed by
Yan Kok Yuen, has been mainly involved in property development. In
1996, the company entered into a joint venture with the Laos Defence
Ministry and set up the Lao Syuen Development Corporation. In 1997,
the company started to develop Laos' biggest resort project to date on
more than 18,000 ha of National Park land at Nam Ngum lake. The plans
for the US$211 million "Phou Khao Khouai—Nam Ngum Eco-tourism Resort"
include a number of hotels, golf courses, casinos, and many other
facilities such as a "lover's paradise center".

The project is also expected to create spin-off industries such as
furniture industries. Syuen has already cleared 20 ha of land to
operate a sawmill to process the timber logged from the development
area. "Our sawmill will buy logs locally, process them and use some
for making furniture. We need lots of timber products, and lots of
plants and flowers, for the Nam Ngum resort and entertainment project"
said Lao-Syuen Development executive director Yan Gah Weng.406

The project involves the resettlement of four Yao villages with some
1,200 people.407 The Yao, also known as Lao Sung (one of the
hilltribes found in Laos) have already voiced concern and about the
resettlement project. Many say that they have not been consulted at
all about the status of the project. According to one disgruntled
farmer, while they had a verbal agreement with Lao-Syuen to be
compensated for their fruit orchards, the construction workers
destroyed the fruit trees before there was any written agreement.
"They said that they would provide all of us with new housing,
cultivable land for planting, financial compensation and employment
opportunities. But so far we have not received anything from the
operators of this project" adds another farmer.408 The project has
been described as an "ecotourism" project within what is supposed to
be a "National Park".
TENAGA KHEMAS SDN BHD

Tenaga Khemas is chaired by Dato' Kanagalingam Veluppillai and it is
recorded as a dormant company in Malaysia.409 Towards the end of 1995,
the company secured a 87,854 ha. concession in the Berbice river
region of Guyana. Tenaga Khemas owns 85% and 80% of two other
companies operating in Guyana, UNAMCO and Case Timbers
respectively.410

UNAMCO has been logging a 96,000 ha concession since 1991, and has
recently signed a Memorandum of Understanding for an Exploratory Lease
(see above) of 345,000 ha.411

Case Timbers has owned a 62,000 ha concession since 1993, and is
scheduled to obtain an Exploratory Lease of 202,500 ha contiguous with
its existing concession and the concession held by UNAMCO. On July 21,
1997, Case Timbers signed a Memorandum of Understanding with the
government for the construction of a US$40 million plywood plant. The
plant, which is estimated to produce 7,000 cu m of plywood per month
is expected to be operational by the end of 1998.412

Villupillai Kanagalingan, the head of Tenaga Khemas, has openly
admitted that he holds an interest in both Case Timbers and UNAMCO for
Berjaya Sdn Bhd. Both Case and UNAMCO are working jointly with Berjaya
in existing concessions in Guyana.413

While inspecting a logging road in November 1997, an officer of the
Guyana Forestry Commission (GFC) discovered that UNAMCO had been
logging its concession without permission. Less than a week after the
discovery of this illegal logging, the President of Guyana held a
ceremony to open the main logging road in the concession, despite the
fact that the EIA on the road had been rejected as inadequate by the
Environmental Protection Agency. The EIA for the road still had not
been approved in April 1998.414 It was later confirmed that UNAMCO had
cut at least 15,000 trees illegally and was operating without approval
for its Environmental Impact Assessment for the logging concession,
Forest Management Plan and Operations Plan. This is also illegal in
Guyana. The company was fined a paltry US$7,142 by a special
government committee established to investigate the situation. The
estimated value of the illegally felled trees is US$6.75 million.
UNAMCO owes the government US$37,142 in outstanding acreage fees on
other concessions since the beginning of 1997. UNAMCO claims that it
has not made a Guyana cent from its operations in Guyana for the past
three years. The illegal logging activity took place either in
UNAMCO's Timber Sales Agreement concession or in the controversial
Exploratory Lease issued recently to the company by the Government.
There are conflicting reports in both the media and from the
Government concerning exactly where the illegal activity took
place.415 Since the fine was announced, UNAMCO has aggressively tried
to have the Guyana Forestry Commission removed from any further
dealings with the matter. In a letter to the President of Guyana,
UNAMCO's director described relations between his company and the GFC
as "critical." He urged the president to intervene directly and
"decisively" to resolve the dispute. As a result, the UNAMCO files
were taken out of the GFC's hands.416

As stated in an editorial in the Guyanese newspaper, the Starbroek
News in February 1998, "The intervention by President Janet Jagan
effectively took the issue out of the ambit of the GFC and the
Minister responsible for forestry. It sent a signal that big forestry
operators could bypass essential requirements set out by the GFC by
appealing directly to the head of government. It thereby undermines
the authority of the GFC which has sweeping and onerous obligations in
acting as conservator of forests and ensuring that operators abide by
the tenants of good forestry practice." The GFC is weak and
understaffed as it is, if it has to constantly worry about logging
companies undermining its authority by running to the President, it
will never have the credibility or authority needed to ensure that
logging operations are conducted sustainably.417

According to the Amerindian Peoples Association, Guyana's primary
indigenous organisation, "The recent case of the UNAMCO highlights the
inadequacy of the GFC to monitor logging operations. If this situation
has been taking place with UNAMCO and has only now been found out, how
many other irregular activities are taking place in other concessions
throughout Guyana? These concessions were granted without Amerindian
participation, without regard for Amerindian land and other rights and
as illustrated by this case, these companies are abusing the forest on
which many Amerindians depend for their basic livelihood. The
Wapisiana people in Region 9 have previously expressed concerns about
an Exploratory Lease allocated to Malaysian company, Kwitaro, that
includes their ancestral lands. In light of these events, the APA once
again calls upon the Government to halt logging operations, until the
rights of Amerindians to own and control their ancestral territories
and forest resources are fully recognized in accordance with
international law."418

Report index

* Preface
* Introduction
* Executive Summary
* The Need to Control Transnational Logging Companies
* Economic, Political and Legal Framework
* Politics, Law and the Logging Industry
* Land, Rights and Policy
* Map 1: Sarawak, Malaysia
* Map 2: Cambodia
* Map 3: Papua New Guinea
* Map 4: Cameroon
* Map 5: Gabon
* Map 6: Suriname
* Map 7: Guyana
* Social Impacts of Logging
* Environmental Impacts of Logging
* Company Profiles
* Conclusions
* References

Forests Monitor. © 2006.