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| Friday, 13 August 2004 |
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Malaysia: Save-the-trees savvy by Leslie Lopez Kuala Lumpur
Posing as a timber buyer for European furniture makers, Sam Lawson, a researcher for the London-based Environmental Investigation Agency approached several Malaysian traders last year hoping to gain insight into the smuggling of hardwood from Indonesia's fast-depleting forests. Eager to please a potential customer, the traders gave Lawson the lowdown on an estimated $500 million-a-year timber-laundering business that moves smuggled Indonesian hardwood to manufacturers in China. "They were actually proud of how cunning and sly they were in getting around the rules," says Lawson of the Malaysian and Singaporean timber dealers he met. The traders described how they easily exploited loopholes in Malaysian export rules. These middlemen buy logs and sawn timber shipped from Indonesia and then organise the necessary documentation from local Malaysian port authorities before shipping the processed lumber to Chinese buyers. In some circumstances, particularly in trades involving protected hardwoods such as ramin. Lawson was told that the contraband timber would arrive in boats at little-policed barter-trade centres that dot the west coast of Peninsular Malaysia across the Strait of Malacca from Indonesia. To get around an Indonesian ban on ramin exports, the traders said, they arranged for documentation to show that the ramin was harvested in Malaysia. The ramin would then be shipped to China, where the timber is in huge demand because its warp-resistant nature makes it ideal for making pool cues, baby furniture and other products for export to the United States and Europe. China, which imposed a nationwide ban on domestic logging in 1998, is the world's fastest-growing market for tropical timber, with imports soaring 75% last year to $11.2 billion. Now the EIA is trying to curb international log-laundering by pressing retailers and consumers in Europe and the US to boycott wood products from Malaysia. The EIA's campaign highlights how environmental groups, including the US-based Nature Conservancy are becoming increasingly aggressive and innovative in their campaign to promote sustainable forest-management practices in Indonesia, home to about 10% of the world's remaining tropical-forest cover and some of the most diverse ecosystems. Some Indonesian officials have gone so far as to call for the death penalty for illegal logging but enforcing the law hasn't been easy, says Greg Clough, communications specialist with the Centre for International Forestry Research. "One of the main factors underpinning illegal logging" is that the timber-processing capacity is more than 10 times greater than the Ministry of Forestry's allowable cut, which is 5.7 million cubic metres in 2004. The EIA estimates that 5.2 million acres are lost each year to illegal logging in Indonesia alone. Given Jakarta's apparent difficulty in dealing with the problem, the EIA decided to devote its efforts to Malaysia and force it to clamp down on trade in illegally sourced timber. Lim Keng Yaik, a senior Malaysian Cabinet Minister with nearly 20 years' experience managing the country's rich commodity and resource-based economy, says that Malaysia is being "unfairly burdened by all this finger-pointing." Still, Kuala Lumpur is taking the boycott campaign seriously because of the damage it could inflict on Malaysia's $5 billion-a-year legitimate wood-and-furniture export sector. "There is no denying that some of this (smuggling) is going on and we can't afford this small amount of illegal activity to destroy our credibility in the overseas market," Lim says. Since the EIA publicised its timber-laundering investigation's findings in February, Malaysia has stepped up policing its porous border along the Strait of Malacca. Raids have apparently disrupted the timber trade in some places, like Batu Pahat in Johor state, where for years Indonesia traders have arrived in small boats loaded with illegal logs and sawn timber to exchange for rice and electronic goods from their Malaysian counterparts. "The raids have made the supply of ramin and other timber very inconsistent," says Ng Cheng Chai, who operates a private jetty just outside town and has seen a sharp dip in business over the last five months. Cutting off illegal Indonesian imports has raised Malaysian ramin prices almost 30% to 1,700 ringgit ($447) a tonne. "We've been scaling down our ramin use over the years because of price increases," says Stanley Goh, who owns Twins Furniture, which manufacturs and exports baby furniture. Goh says that he has begun using imported timber from Germany and New Zealand as substitutes. At Malaysia's Pasir Gudang port, across the Johor Strait from Singapore, authorities have stopped the trade in timber from Indonesia at the urging of the Malaysian government. Lim Meng Soon, director of operations at the port, concedes that Malaysian and Singaporean traders had been exploiting loopholes in export rules governing so-called free-trade zones such as his port to import and re-export Indonesian wood. "We are not a monitoring authority. We handle transshipment, and if the paperwork is fine, the timber goes through," he says. With the shutdown of timber transshipments at Pasir Gudang, much of the trade has moved to Jurong port in Singapore, according to industry executives. Lau Chan Huat, a Malaysian timber trader who runs a business sourcing wood from Indonesia, Cambodia and Burma for export to China, says he's shifted operations to Jurong from Pasir Gudang. "I don't know why the (Malaysian) government is being so tough. But this is business and I have to ensure a steady supply of timber for my customers," he says. As for ramin, he says, "I don't do ramin any more." Lye Fong Keng, spokeswoman for Singapore's Agri-Food and Veterinary Authority, which regulates the trade of protected timber species at the country's ports, says that her agency has stepped up surveillance. Any ramin for sale, she says, could be coming from Singapore's existing stockpiles bought before it was designated a protected timber species by the Indonesian government in August 2001. (Courtesy - Far Eastern Economic Review) |
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