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Bank facilitates illegal logging in Cambodia

10 April 2005

Bank officials have recently brokered the lifting of Cambodia’s three year ban on log transportation, with the result that illegally cut timber is now back in circulation. Since then, a request has been submitted to the World Bank inspection panel by Cambodian NGOs outlining numerous violations of World Bank operational policies in relation to the implementation of its Forest Concession Management and Control Pilot Project (FCMCPP).

At a meeting in December 2004, Bank officials persuaded the donor community to endorse Cambodian ministers’ demands that the transport ban be lifted. The ban on was introduced in May 2002 following pressure from international donors as a means of compelling logging concessionaires to produce sustainable forest management plans. Statements and actions by the Bank have consistently revealed the resumption of log transports to be a key part of its policy for Cambodia’s forest sector. The lifting of the ban sees an alarming backtracking of donors such as the FAO, Danida and DfID who had previously told the Cambodian government that “the proposed log transportation can not be separated from the origin of the logs” and that “even with these clarifications provided we cannot endorse the movement of these logs”.

Logging companies have subsequently begun transporting logs stockpiled across Cambodia. A high proportion of these were clearly cut in violation of the law and the legality of the others is questionable. World Bank-funded forest sector monitor SGS is recording the quantity of logs but has taken no steps to investigate the legal origin of the wood, nor whether royalties have actually been paid. The transport process is poorly supervised, with ample opportunity for companies to move illegally harvested fresh logs into the supply chain. Such developments fly in the face of recent statements by out-going Bank president James Wolfensohn of the need for Cambodia to “promote good governance and fight corruption in order to promote broad-based growth and poverty reduction” during a visit to the country.

the Bank has violated a number of its operational policies

The inspection panel request relating to the Bank’s FCMCPP, submitted in February 2005 by the NGO Forum on Cambodia on its own behalf and on behalf of affected communities, states that “…the Bank has violated a number of its operational policies leading to harm or potential future harm to people living in the project-affected areas”. The operational policies and procedures listed include: environmental assessment (OP/BP 4.01), natural habitats (OP/BP 4.04); indigenous people (OP/BP 4.20); and forestry (OP/BP 4.36).The request includes two signed letters from representatives of affected communities and a report prepared by UK-based NGO Global Witness for the affected communities.

The request also questions the Bank’s classification of the project as environment risk ‘category B’, given that its environmental assessment policy mandates a ‘category A’ for controversial projects and those threatening indigenous peoples and critical natural habitats. The severe impacts that will result from the project include immediate environmental degradation caused by industrial-scale logging, damage to watersheds and related adverse affects on the Kuoy people who live in the forests in the north and northeast of Cambodia.

A reply to the request has not yet been made public.