Production and processing
Information about levels and capacities of wood production and processing in Cambodia is limited. Timber production in Cambodia has decreased significantly since the mid-1990s due to new policy changes and depletion of forest resources (see chapter ‘Sources of illegal timber’). From 2000, the Cambodian Government gradually introduced a logging moratorium that subsequently led to declining wood production and processing. In 2007,
Cambodia produced only 103,000 cubic metres of logs in addition to small quantities of sawn timber (55,000 cubic metres), veneer (55,000 cubic metres) and plywood (20,000 cubic metres) (ITTO 2007: 74).
Exports
Cambodia’s declining timber production is also reflected in declining export figures. Over the past decade, total wood exports from Cambodia have fallen from 259,200 cubic metres in 1996 to 12,700 cubic metres in 2002. Historically, most of the timber exports involved roundwood until a ban on log exports was introduced in 1997; only about 1,000 cubic metres of logs were exported in 2007 (ITTO 2007: 75). Simultaneously, Cambodia had a growth in domestic milling and wood processing, which resulted in increasing exports of sawn timber, plywood and veneer production and exports. Sawn timber exports peaked in 1997 when Cambodia exported 72,600 cubic metres of sawn timber. Plywood and veneer exports reached 197,000 cubic metres in 1998. At that time, the trade in timber and timber products, valued at US$60m, constituted about 43 percent of Cambodia’s foreign trade (Peters 1999: 105). But the logging moratorium resulted in a decline of wood exports over the past 10 years. In 2007, for example, Cambodia exported only 50,000 cubic metres (over 90% of the domestic production) of sawn timber in addition to 5,000 cubic metres of plywood (ITTO 2007: 75). Most of the timber exports from Cambodia have been, and continue to be, destined for China, Taiwan, Japan, and neighbouring Thailand and Vietnam (Amariei 2004: 6–7).
There are currently no reports about illegal wood production and illegal timber exports from Cambodia, although there have been some allegations about non-registered mills, many of them mobile, operating in the country. There have also been rumours about members of the military exporting wood illegally (Amariei 2004: 6, 11; Global Witness 2004: 13–14).
Russia
Production and processing
Processing of timber in Russia has been historically limited. The Russian Far East in particular has small wood processing facilities and capacities have declined since the disintegration of the Soviet Union, which resulted in a loss of subsidies to mills and other wood-based industries. Over the past 15–20 years, the central government in Moscow has failed to make any significant investments in mills and wood manufacturing in the region.
There has also been an absence of foreign investment into wood processing facilities in Russia while processing capacities in neighbouring countries, especially in China, have grown rapidly (Crowley 2005: 429–431; Pye-Smith 2006: 7).
Exports
It has been estimated that the total value of timber and timber product exports from Russia in 2006 was US$5.7b, an increase of 26 percent compared with 2005 (Hansen & Muran 2006: 4). Most of the timber exports from Russia involve raw logs, which means that Russia’s timber industry misses out on the value adding involved in processing. Over 95 percent of timber exports from Russia to China are in the form of raw roundwood, usually involving red pine (40.4% of log exports to China) and larch (41.8%) (Pye-Smith 2006: 5, 7).
Processing facilities in Russia, especially in the Russian Far East, are limited and
consequently exports of lumber, plywood and other timber products are comparatively small (Crowley 2005: 434). Table 20 shows that most exports involve softwood and that levels of hardwood exports from Russia are considerably smaller.
In recent years Russia has become the greatest foreign supplier of wood for China. China accounts for approximately 44 percent of softwood exports from Russia. Finland (19%) and Japan (17%) are other major destinations for Russian wood, as is the Republic of Korea.
Hardwood exports, in contrast, are destined for the most part for Finland (66%) and, in smaller quantities, China (19%) (Crowley 2005: 435; Seneca Creek 2004: 13).
Table 20: Suspicious wood exports by type of wood, Russia, 2002 Total exports
(’000m3)
Suspicious volume, total
(’000m3)
Suspicious volume, % of
exports
Suspicious volume, % of
production Softwood
Roundwood 37,750 9,438 25.0 9.0
Lumber 8,580 1,287 15.0 7.6
Plywood 194 29 15.0 9.7
Hardwood
Roundwood 8,946 2,237 25.0 5.5
Lumber 440 132 30.0 5.7
Plywood 963 193 20.0 12.8
Source: Seneca Creek (2004: 15–16)
It is estimated that approximately 15–30 percent of wood exports from Russia come from suspicious sources. Seneca Creek estimates that about 25 percent of raw log exports from Russia are suspicious. This is unsurprising given the widespread allegations of illegal logging in the country (see section ‘Russia: Illegal logging’, p. 66). About 15 percent of processed softwood exports are said to be suspicious. Processed hardwood appears to involve relatively greater levels of suspicious wood exports (20–30%). NGOs estimate the levels of suspicious exports to be greater; with Greenpeace citing sources suggesting that 75 percent of Russian timber exported to Finland was produced illegally (Greenpeace 2006: 5).
The main reasons for the high levels of illegal timber exports from Russia are the porous border with China, limited or complete lack of border controls and law enforcement, lack of reliable documentation and other processes, and corruption (Seneca Creek 2004: 107).
Many timber exports from Russia are illegal because the timber involved comes from illicit sources. Exports of timber from Russia may also be illegal because they are carried out clandestinely, are falsely declared or mislabelled, or are exported by use of forged export and transport documentation or bribery (Ottitsch, Moiseyev & Kazusa 2005: 12; Pye-Smith 2006:
10–11; Vandergert & Newell 2003: 303, 305). Observers estimate that a total of US$32 is paid in bribes for every cubic metre of hardwood sold for US$140 at the Chinese border.
The bribes include payments to government forestry officials, environment inspectors and customs officials, and also to militias and local gangs for protection (Pye-Smith 2006: 5).
Clandestine exportation involves, for example, ‘high value hardwood logs that are placed on the bottom of the [train] car and [covered] with lower value spruce or larch logs’ (Seneca Creek 2004: 111). Alternatively, timber is brought into China through small, more remote border crossings or across unpatrolled rivers (Vandergert & Newell 2003: 304). Another pattern of illegal exportation, especially from the Russian Far East, involves exports in excess of authorised volumes by use of temporary export declarations. These are used for individual shipments that are part of bigger and ongoing exports and do not require exact specification of the quantities involved. Only at the end of each month are exporters required to provide accurate figures. By that time, the authorities cannot, however, verify the declaration and it has become common practice to under-report actual volumes exported (Pye-Smith 2006:
10–11; Seneca Creek 2004: 111).