China and the rosewood carve-up

Thamarong Somsak had a job in a printing business but he always felt the pull of the outdoors. He’d grown up around the forests of his native province southeast of Bangkok and the lure of the wild never went away. One day, unhappy in his factory work, he visited the Thap Lan National Park close to the Cambodian border. He asked for a job as a ranger there, even though it meant halving his $500 monthly salary. “Nature has always been a part of me since I was a little boy,” says Thamarong, a 35-year-old who wears a Buddhist amulet and is nicknamed Chate. “I have always dreamed that one day I would be here.”

It would be a charming tale were it not for the darker reality that surrounds Chate and his colleagues. He’s standing amid the sawdust and plastic oil containers of an abandoned sawmill set up by illegal loggers. The poachers have left behind a tree stump and offcuts. Nondescript brown on the outside, the timber’s rich red interior reveals it as rosewood, a luxury product for which men will kill to satisfy the hunger of newly wealthy Chinese consumers. Chate counts the growth lines on the stump and laments: “This one is at least a hundred years old.”

Chate is part of a team that treks deep into the forest to try to stop an illicit multinational trade that thrives in Cambodia and its hinterland. This corner of the Thap Lan protected area is far removed from the beaches and temples of tourist Thailand — there are probably more tigers than holidaymakers here. The rangers (and poachers) have cut a few paths through the trees but mostly the place is knotty with creepers and thick with humidity and insect life.

The rangers bivouac at night, drink whisky by the fire and demonstrate the usual Thai flair for conjuring tasty food from basic ingredients. There is plenty of teasing but the camaraderie can’t hide the danger and difficulty of the work. Vichaichin Sakorn, the 43-year-old team leader, says each man covers an area equivalent in size to hundreds of football pitches, offering their enemy vast spaces in which to hide and escape. The Thap Lan rangers didn’t suffer any casualties during the 200 arrests of poachers that they made last year but seven rangers were killed in similar incidents elsewhere in Thailand.

The rangers are a proud if motley crew. Some, like Chate, have taken unconventional routes to becoming keepers of the forest. Chair at Pakhot, an impish 24-year-old, was a mechanic who was recruited because he used to fix the park director’s car. But they share a sense of duty — and anger. As the embers die, Karimkarn Punlalay, 46, describes what he sees as a multinational rape of the forest. “When I go to work in the park, I see the people cutting down the trees are Cambodians,” he says. “But they are just the hired hands. The people who hire them, the financiers, are Thai. The lumber is sent to Cambodia, then Vietnam, then ultimately to China.”

Rosewood and other luxury timbers have become a metaphor for a rapacious age in Southeast Asia. From gems to water, Mekong countries are seeing resources sucked up by their giant neighbour to the north. The Siamese rosewood is now so threatened that in 2013 it was placed on the endangered list by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (Cites).

A report published last year by the Environmental Investigation Agency, a UK-based non-governmental group, said Chinese demand for prized red timbers, known as hongmu, which include Siamese rosewood, began to rise in the run-up to the 2008 Beijing Olympics and has exploded since. In 2011, EIA investigators found a rosewood bed selling in Shanghai for $1m. By March 2014, demand and stockpiling had forced up prices by more than a third in a year, to in excess of $17,000 per tonne. Market spikes can push the price as high as $80,000. “Over the past 10 years, demand in China for luxury reproduction wood furniture and cultural artworks rooted in Ming and Qing dynasty aesthetics has soared,” the report said. “The increasing rarity of the timbers involved has led to dramatic price rises, exacerbated by a flow of hot investment money.”

While some of this wood comes from turbulent states outside Asia, notably Madagascar, the bulk of Chinese hongmu imports are thought to come from Myanmar, Thailand, Laos, Vietnam and Cambodia. The trade has flourished in an area of porous borders and conflict zones. In the Myanmar border state of Kachin more than 100 suspected Chinese loggers were detained in January. In the same month the Thai authorities announced they had seized 30 shipping containers that contained logs cut in Thailand, sent to Laos for false labelling and then returned to Thailand for onward shipment to China. (The Laos state media claimed that only seven small pieces of rosewood were found.) The business also reaches deep into officialdom: on February 12, a Thai court sentenced Pongpat Chayapan, a former head of the country’s Central Investigation Bureau, to nine months in jail for possessing illegal rosewood.

“The timber mafia is winning this nasty war,” says Tim Redford, a programme director at Freeland, a Bangkok-based environmental NGO. “More attention must be paid to this crisis, because these gangs are going to destroy these forests, one species at a time.”

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Such stories may seem inevitable in a world being stripped of its natural resources at an alarming rate. They may also prompt an uncomfortable shrug in western countries that chopped down their own forests decades or centuries ago in the name of development. The Mekong luxury timber trade is problematic because it is wild and sometimes criminal, lining the pockets of a few. Even more strikingly, it is flourishing despite longstanding government restrictions on logging and timber exports. And the prime example of that is the country at the other end of the Thap Lan border: Cambodia, which is estimated to have lost more than a third of its forests in just 40 years.

The Cardamom Mountains are a long drive northwest from Phnom Penh, Cambodia’s capital. The paved highway to the provincial capital of Pursat gives way to a dirt road bisecting miles of thinly populated countryside. A sign describing a demining project is a reminder that this used to be the territory of the Khmer Rouge, the fanatical group that took over the country in 1975, launching genocide in the killing fields and forced labour camps.

The next town of Pramoay, in the Veal Veng district, shows the sway that China holds in modern Cambodia, through its alliance with Hun Sen, the former Khmer Rouge commander who has been prime minister for the past 30 years. The hotel on the main drag has no vacancies because it has been hired out to house Chinese workers employed on a giant dam project in the area. A corner of the courtyard is littered with empty baijiu spirit bottles and the corpse of a cat.

From Pramoay, it’s a two-hour motorbike ride to one of the logging areas, up a muddy hillside track in the driving rain. It was in this remote region that Chut Wutty, a well-known forest protection campaigner, was shot dead in 2012. The rain and the climb eventually relent to reveal a part-flooded plateau surrounded by a community of shacks. Towering from the shallows is a single rosewood, next to a waterlogged hut. Villagers say the tree has been spared because it’s the last one left.

Many of the Cambodian villagers are immigrants who came because of the opportunities offered by logging and agriculture. One woman, whose husband logs in the forest, shows off a handful of rosewood chopsticks she has finished carving and cleaned. She says she makes seven and a half US cents per pair but rosewood is so scarce now that she may soon be forced to return to her hometown. “We have to go further and further in the forest to get it,” she says. “In the future, I’m sure that we cannot find it any more.”

On our way back to Pramoay, we stop at a ranger station whose mountain-top view is all the more magical in the damp, misty twilight. Sin Song, the 52-year-old official in charge, has seen it all before. His job is to make sure that no one is logging in this nominally protected area. But he has only 15 men to patrol 33,000 hectares. Mostly they are too late to stop the loggers, who just throw away the leftovers, leaving locals to forage for the scraps.

There doesn’t seem to be a great deal of room for hope. Stuck for something to say, I ask if he feels sad about the situation. The question sounds even more asinine as he considers it. “Feel sad?” he replies. “What can we do except feel sad?”

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What is happening in the Cardamoms and other areas like it is all the more troubling because in 2002 the Cambodian government announced a moratorium on logging. In 2013 the government also issued a specific ban on the cutting, processing or export of Siamese rosewood. Yet figures cited by the Environmental Investigation Agency suggest Chinese imports of Siamese rosewood and other hongmu timber from Cambodia rose sharply in 2013.

This apparent contradiction is explained partly by official finesses of Cambodian law that campaigners say undermine any attempt to curb the luxury timber trade. The government has sidestepped the logging ban by offering permissions to clear specially granted land for agriculture — which also gives a green light for cutting down and selling wood. This system of designated areas, known as economic land concessions, now accounts for much of the country’s timber supply.

A second government strategy exploits a law that splits state land into public and private. State public property can’t be sold off but state private property can. Most forests have historically been state public property but some have been converted to state private property and allocated for development. “[The government is] doing it throughout the country,” says Mu Sochua, a top official in the opposition Cambodia National Rescue Party. “It goes under the radar. And if it’s investigated, by law they are correct.”

These changes are widely seen as benefiting one man above all. Try Pheap, a local tycoon, was dubbed the “king of rosewood” in a report published in February by Global Witness, the London-based campaign group. Global Witness alleges that Try Pheap and his companies have made a fortune as a result of preferential treatment by the government and involvement in illegal logging, with the connivance of officials and the security forces. Global Witness says its report is based on eight months of covert investigation and interviews with dozens of witnesses. It also says it is part of a bigger story in which the country’s forests are serving as “personal piggy banks for Cambodia’s corrupt elite”.

These gangs are going to destroy these forests, one species at a time

Try Pheap didn’t reply directly to questions submitted to officials at his companies by the FT. But Ouk Kimsan, a company executive, passed on statements from his employer denying any involvement in wrongdoing. Try Pheap said that his companies obeyed the law and — unlike some other local businesses — paid millions in taxes. Criticisms by Global Witness and other non-governmental groups took no account, he claimed, of his businesses’ role in helping develop the country. If other companies had been less successful in forestry, it was perhaps because they “do not have skills and knowledge”.

The story of Try Pheap’s rise is something of an enigma, even to those who have closely examined it. His staff seem to want to keep his profile low. When I visited the warehouse of one of his companies outside Phnom Penh, I noticed two pictures of him on the wall, flanking a throne-like wooden chair intricately carved with snake motifs. In the photos he is a squat and slightly plump figure in a blue suit, smiling next to prime minister Hun Sen, apparently having just received the medal hung round his neck. But when I pointed my camera towards one of the photos, two company officials engaged in a quick, whispered discussion and asked me not to proceed, because it is “personal”.

“Sometimes we make a joke that there is no Try Pheap — it’s just a name,” says one local journalist. “You can talk to the prime minister — but you cannot talk to Try Pheap.”

One undisputed fact is that Try Pheap is part of an exalted class of Cambodian tycoons known by the honorific oknha. This royally conferred title is bestowed at the government’s request on “any generous person” who gives $100,000 to the state, in cash or materials, according to a 2007 report by the UN special human rights representative for Cambodia. Local media reports describe Try Pheap as being close to Hun Sen and his wife, Bun Rany. They say Try Pheap has donated $30,000 to build a local office of the ruling Cambodian People’s Party, $100,000 towards a wildlife sanctuary headquarters and $100,000 to the Cambodian Red Cross, of which Bun Rany is the president (the Red Cross couldn’t confirm the donation). Try Pheap’s spokesman says he is an adviser to Hun Sen on Cambodian People’s Party affairs. He did not deny giving the money, saying that there was “nothing wrong in building relationships and providing donations and support to . . . society”.

But Global Witness alleges government favouritism to Try Pheap is clear in the award of economic land concessions. The campaign group’s calculations from official documents show his companies have been given concessions several times greater than the 10,000 hectare limit allowed under land law. Try Pheap confirmed through his spokesman that his companies had received more than 34,000 hectares but suggested that this was legitimate as they were distributed among five separate businesses. He added that the Try Pheap Group had returned almost 20,000 hectares to the authorities last year, while the remaining land was developed with rubber trees and other cash crops.

While Try Pheap insists his business empire is transparent, aspects of it remain mysterious. One is the role in its export business of a Hong Kong-based company named on Try Pheap Import Export Co timber shipment documents obtained by Global Witness and reviewed by the FT. The trail to Kin Chung Transportation Co ends at the company’s registered office on the 38th floor of a high-rise block in Hong Kong’s new territories. It’s the better part of an hour’s train journey from the business district to this suburban residential estate, where children are pouring home from school. When the FT visited, there was no corporate signage or indication that the premises were anything other than a private apartment. A woman who identified herself as Lam Sau Wan, one of the directors, answered the door. She called a woman she identified as her daughter, an English speaker. The first part of the conversation was conducted surreally via the grille, with the phone being passed back and forth between the bars.

The daughter, who declined to give her name, said in a later phone call that, although she was not a director of the company, she had discussed the FT’s questions with her mother. Her mother said she had no knowledge of either the Try Pheap Import Export Co timber export dockets or of other Try Pheap businesses. The daughter said she could offer no explanation as to why Kin Chung’s name should be on the documents, adding that it was possible someone had been using the business’s name without its knowledge. “If you find out the answer, please let me know,” she said. Asked about Kin Chung, Try Pheap said through the spokesman that he had no knowledge of the logistics companies his businesses used to export timber to China.

The Cambodian government defends giving Try Pheap’s companies such sway in the timber industry, arguing that it is better than the alternatives. In his office at the heart of the imposing Chinese-built prime ministerial complex in Phnom Penh, Phay Siphan, a government spokesman, said that Try Pheap companies were, like other big businesses, carefully monitored by anti-corruption authorities. He added that both the domestic logging and the overseas sale of timber were “hard to control” if more than one or two companies were involved. “That’s why we don’t let everyone enjoy exporting logs,” he said, explaining that government monitoring and taxation were easier in a monopoly industry. “One company takes full responsibility.”

Phay Siphan admitted Cambodia has a serious problem with corruption. He also acknowledged that forestry officials, police and military police had all been involved in illegal logging; some had even been jailed. But a clean-up was under way, he insisted, adding that the present situation couldn’t be blamed on the Cambodian People’s Party. “Corruption does not belong to any political party,” he said. “It belongs to everyone.”

Others aren’t inclined to be so generous. A draft report due to be published in March by the UN Office on Drugs and Crime urges the Cambodian authorities to work with it to address a string of concerns about how they are responding to the smuggling of animals and plants. The document, seen by the FT, notes that “transnational organised crime groups are continuing to target high value timber species in Cambodia and adjoining countries, particularly Thailand”. It says that, despite some progress, no high-profile investigation has been completed, while the successful prosecutions to date have only targeted small-scale offenders. The report concludes that there is a “need to examine what role major corporations are playing in the illegal timber trade, and what support — if any — these organisations receive from corrupt officials”.

Back in Thap Lan, the Thai rangers are honest enough to admit that there are corruption problems within their own ranks, including tipping off poachers. They are also at the mercy of policy disagreements over how the luxury timber trade should be controlled. At a regional meeting on rosewood in December, Mekong countries called for China to do more to dampen demand while Chinese officials said the answer was better law enforcement in timber source countries. But the deeper debate is whether the magnificent forests are there to be cashed in or preserved. Ranger Chate, the man who took a 50 per cent pay cut to become a guardian of the trees, is in no doubt what the answer should be. “I left my job to do something that I love,” he says. “Money is not important.”

Michael Peel is the FT’s Bangkok regional correspondent

Photographs: Global Witness; Ben Marino