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Vietnamese Army Named As Timber Smuggler

BANGKOK - A new report released today (July 28, 2011) exposes the pivotal role played by the Vietnamese military in a multi-million dollar operation which is smuggling threatened timber over the border from the shrinking forests of neighbouring Laos.

Laos has some of the Mekong region’s last intact tropical forests, but the London-based Environmental Investigation Agency (EIA) report Crossroads: The Illicit Timber Trade Between Laos and Vietnam reveals its export ban on raw timber is routinely flouted on a massive scale to feed the ravenous timber processing industries of Vietnam, China and Thailand.

During undercover operations in 2010 and 2011, EIA agents posing as timber buyers tracked a trail of corruption and inadequate enforcement back from the busy furniture factories and ports of Vietnam to its border with Laos and beyond.

The forests of Laos support the livelihoods of millions of rural and indigenous people but are seriously threatened by over-exploitation; such is the volume of illegal timber flowing through Laos’ porous borders that its furniture manufacturing industry is finding it cannot supply orders due to a lack of raw materials.

Through investment in logging, plantations and hydropower projects, Vietnamese firms have appropriated large swathes of Lao forests, yet the only winners in Laos are corrupt Government officials and well-connected businessmen. Meanwhile, Vietnamese logging companies and furniture factories are booming on the back of the illegal trade, exporting billions of dollars worth of finished wood products to the major markets of the USA and European Union.

And EIA’s investigations revealed that one of the biggest loggers in Laos is a company owned by the Vietnamese military.

Investigators first encountered the Vietnamese Company of Economic Cooperation (COECCO) in October 2010 during a visit to Qui Nhon port, documenting huge piles of logs bearing green paint marks and tagged with yellow labels bearing a Vietnamese name which translated into Company of Economic Cooperation – Ministry of Defence (or COECCO). A port worker said 95 per cent of the logs had come from Laos and most were owned by the Vietnamese military; specifically Military Zone 4.

Similarly marked logs were observed in a huge storage area between the two formal checkpoints at the Bo Y border crossing and EIA was eventually able to confirm that most of them had come from logging operations linked to the construction of a nearby hydropower dam.

To uncover more details of the company’s operations, EIA investigators travelled to COECCO’s headquarters in Vinh City, Vietnam, in May 2011 and learnt COECCO has been in the timber trade and logging business in Laos for more than 20 years, that it sources most of its logs from Lao dam clearance sites and that it is one of a handful of companies permitted to carry out logging in these areas.

A well-connected Lao company is also making a fortune trading logs to Vietnam; the Phonesack Group, the boss of which is connected with the Lao Government, prefers to send logs across the border while its own wood processing struggles to get supplies of raw material.

EIA Head of Forest Campaign Faith Doherty said: “EIA first exposed the illicit log trade between Laos and Vietnam in 2008, and our latest investigations reveal that sadly nothing has changed.

“The governments of Vietnam and Laos urgently need to work together to stem the flow of logs and curb the over-exploitation of Laos’ precious forests before it’s too late, and the Vietnamese military must be excluded from logging operations in Laos.

“With a new Timber Regulation coming into force within European markets in 2013, both Vietnam and Laos have a lot at stake and urgently need to work with the European Union.”

URGENT CALL TO ACTION – FROM EIA

1.THE GOVERNMENT OF LAOS SHOULD:
• Enforce its log export ban
• Publish details of all logging quotas and the selection process
• Clarify rules for converting forest land for plantations

2.THE GOVERNMENT OF VIETNAM SHOULD:
• Respect the policies of the Lao Government by blocking log imports from the country
• Hold bilateral talks with the Government of Laos over illicit wood trade between the two countries
• Work with Vietnamese wood industry associations to exclude Lao logs from its supply chain
• Exclude military businesses from carrying out logging operations in Laos

3.THE EUROPEAN UNION SHOULD:
• Ensure that any VPA discussions with Vietnam and Laos address the issue of log trade between the two countries
• Ensure that VPA talks include the full range of stakeholders
• Promote forest governance lessons from FLEGT into the development of REDD+, specifically in terms of displaced deforestation

4.COMPANIES AND CONSUMERS SHOULD:
• Obtain proof that wood products sourced from Vietnam are not derived from logs imported from Laos

Interviews are available on request: please contact Julian Newman at juliannewman@eia-international.org or telephone +44 (0)7966 171191 / 020 7354 7960, or Faith Doherty at faithdoherty@eia-international.org .

Copies of the full Crossroads report, stills and footage are available on request from EIA Press Officer Paul Newman at paulnewman@eia-international.org or phone 020 7354 7960.

EDITORS’ NOTES

1.The Environmental Investigation Agency (EIA) is a UK-based Non Governmental Organisation and charitable trust (registered charity number 1040615) that investigates and campaigns against a wide range of environmental crimes, including illegal wildlife trade, illegal logging, hazardous waste, and trade in climate and ozone-altering chemicals.

2.Read more about EIA’s 2008 Vietnam investigation and download the resulting report Borderlines: Vietnam’s Booming Furniture Industry and Timber Smuggling in the Mekong Region here http://www.eia-international.org/cgi/reports/reports.cgi?t=template&a=160

Environmental Investigation Agency
PO Box 53343, Washington, DC 20009 www.eia-global.org
Tel: +1 202 483 6621/ Fax: +1 202 986 8626

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