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Guardian Weekly 19-1-97

Asian Loggers Strip the Amazon's Assets - Jan Rocha In Sao Paulo

AS THEIR own forests near exahaustion, Asian logging companies are moving into South America: Guyana, Surinam, and now the big prize, the Amazon rainforest. Large parts of still intact forest in remote areas where government agencies are weak and ummotivated add up to a dangerous cocktail, says Nigel Sizer, of the Washington based World Resources Institute. 'There aren't places where you can acquire logging nghts to several million hectares at attractive prices.'

Africa is out of the question because of political instability, so the solution is Brazil's Amazon rainforest, an area of 700,000sq km, with one-third of the world's existing timber supplies. The forest contains 60 billion cubic metres of timber, said to be worth $4 trillion. By 2006, Brazil's share of the world market is expected to leap to 20 per cent. In Guyana, Malaysian companies obtained government concessions to vast forest areas, and timber production multiplied fivefold between 1991 and 1996, forcing the government to decree a three-year moratorium on new concessions until environmental laws can be tightened. In Brazil, the Asians are more discrete. They have begun , buying up small scale often bankrupt local timber companies, often keeping their own names. WTK of Malaysia paid $7 million for Amaplac in january, and also bought 300,000 hectares of forest near the Jurua river, an Amazon tributary, for around $2.4 million. Total WTK investment in timber is reported to be $18 million. Officially bankrupt, the Amaplac sawmill now produces 3,200 metres of plywood a month. Samling, another Malaysian giant, is negotiating to buy Amacol. Compensa, a local timber firm, now belongs to China's Tianjin Fortune Timber Company.

Malaysian and Chinese businessmen have been visiting the offices of the government's environmental agency, Ibama, to find out about environmental legislation. 'The advantage of buying Brazilian companies is that they already have forest management plans (PMFS) approved by Ibama. Under such a plan, the area to be logged is divided into 25 parts. Each year, one part should be rationally exploited and then left for the next 25 years to allow natural reforestation. In practice, says Paulo Lira, of the World Wildlife Fund, most PMFs are a fiction. A recent audit done by Ibama found irregularities in two out of every three plans. The companies also buy timber from clandestine loggers. Armed groups of up to 100 men invade ranches and extract timber, which they then sell on to those with a PMF. All Ibama can do is fine companies when they are caught. Amaplac/WTK has already been fined $160,000 for exporting illegal timber. And Sifec, now Chinese owned, was fined $140,000 in June for a similar offence. According to an Ibama superintendent, Hamilton Casar, WFK have the tractors to log all the timber they can get their hands on. Foreign companies bave been exporting mahogany and other hardwoods from Brazil for years, but what concerns Brazilian environmentalists and authorities is the voracity of the new Asian arrivals - and their record of devastation. In July, a two-year moratorium on new concessions for mahogany and virola was announced. But it has had no effect on existing concessions, and at the present rate of extraction Brazil's mahogany resources will only last 30 years. Malaysian ministers visiting Brazil have protested at being cast in the role of villain, but companies from their country control 80 per cent of the world trade in tropical timber. Without the Amazon rainforest, it is difficult to see where they are going to turn for supplies.

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