Timber Trader Try Pheap Linked to Logging Racket

In a new report, U.K. environmental rights group Global Witness places Cambodian timber magnate Try Pheap at the heart of a vast illegal logging operation driving the country’s rarest tree species to the brink of extinction with the collusion of government and military officials.

“The Cost of Luxury: Cambodia’s illegal trade in precious wood with China,” released Thursday, summarizes an eight-month undercover investigation last year by the rights group during which their researchers followed Mr. Pheap’s loggers and trucks across the country, interviewed his employees and middlemen, and tracked his shipments to Hong Kong using leaked customs records.

A man walks past shipping containers holding Siamese rosewood belonging to timber magnate Try Pheap at the international port in Sihanoukville in early 2014. (Global Witness)
A man walks past shipping containers holding Siamese rosewood belonging to timber magnate Try Pheap
at the international port in Sihanoukville in early 2014. (Global Witness)

“Buyers of lavish four-post beds and vanity tables in China may be unwittingly lining the pockets of what can only be described as timber gangsters,” Megan MacInnes, the head of Global Witness’ land team, says in the report.

“Try Pheap and his network are destroying Cambodia’s last forests and robbing indigenous communities of their livelihoods. Meanwhile, the very officials in Cambodia who should be stopping them are conspiring to ensure that contraband wood enjoys safe passage and is exported as seemingly legitimate lumber,” Ms. MacInnes says.

A former adviser to Prime Minister Hun Sen, Mr. Pheap has bought up land and mining concessions across the country while heaping donations on the prime minister’s wife’s charity and the very government ministries charged with keeping his operations in check.

Mr. Pheap has the exclusive rights to purchase every tree logged on land concessions in northeastern Ratanakkiri province and all the illegally logged wood seized by authorities anywhere in Cambodia, contravening the legal requirement that confiscated timber be publicly auctioned off.

The Global Witness report adds to mounting evidence over recent years that Mr. Pheap has leveraged those rights to launder vast volumes of illegally logged wood, flout a raft of local laws and ship it all out of the country using dubious export licenses.

The timber route the group’s researchers map out in the report ends in China, where carefully carved tables and beds fashioned from the rarest trees can fetch up to $1 million a piece. It begins in the remote forests of Cambodia’s Virachey National Park in Ratanakkiri.

There, Global Witness said, its team visited illegal-logging camps and watched loggers pick off the most valuable trees—plotting it all by GPS. They followed trucks hauling the wood to depots under the control of the Try Pheap Group (TPG), the parent company of Mr. Pheap’s various operations, on to his provincial depot in Banlung City, and from there to the Vietnamese border or the international port in Sihanoukville.

Rarely Legal

The country’s 2002 forestry law bans the harvesting of rare trees in natural forests, though the government never followed up with a planned directive listing those trees by name. But a 2000 government list of rare species includes thnong, neang nuon and—the most precious of the lot—kra nhung, or Siamese rosewood.

Global Witness’ researchers saw Mr. Pheap’s network logging, transporting and shipping all of these species.

“While monitoring TPG’s operations on the ground, researchers observed that forest clearance activities and timber stockpiles in TPG’s log depots in the forest, Banlung, the company’s special economic zone in O’Yadaw and main depot in Udong all primarily contained the two rosewood species,” neang nuon and kra nhung, the report says.

“Interviews with those involved in the illegal logging throughout [Virachey park] and the forests in its southern vicinity showed exactly how easy it is for TPG to harvest timber outside [concession] areas and bring it to provincial depots where it is mixed with timber transported from inside the [concessions],” it adds. “Most of the timber in the park and surrounding area is reportedly being harvested either under commission by or for sale to TPG.”

Global Witness says villagers and loggers in the province told them that Mr. Pheap’s middlemen show up with officials from the Environment Ministry about once a month to push the illegal logging a few kilometers deeper into the forest, doling out patches to “subcontractors” with their own saws, trucks and work teams. Even those who don’t want to join in, the report says, are coaxed along with a combination of gifts and threats.

“If we do not log,” one villager reportedly told the researchers, “how can we feed and raise our families? And if we do not cut the trees, the company is doing it anyway. Logging for money is better than losing the forests without anything taken.”

Global Witness says it identified at least 89 of Mr. Pheap’s middlemen by name, the most powerful among them being Hom Hoy, a major general in the army’s Brigade 70, once the personal bodyguard unit of the prime minister. It says villagers, loggers and a source close to the general all confirmed the arrangement.

It says it obtained a contract between Maj. Gen. Hoy and a group of villagers in which the general offers to build them a bridge and community hall, “apparently in return for their consent for his men to log in the area.”

“They agreed to Hom Hoy’s proposal only reluctantly, believing they had no choice. However, after all of the luxury trees had been felled, the middleman’s loggers moved on but the village hall and bridge were not built,” the report says.

Global Witness says it wrote to the general for comment in December but received no reply. Contacted Thursday by a reporter, Brigade 70 deputy commander Duong Ra said there was no one by the name of Hom Hoy in the unit.

Shady Shipping

Besides the harvesting of rare trees, Cambodian law also bans the export of round or roughly squared logs wider than 25 cm of any species.

Global Witness says its researchers watched Mr. Pheap’s depot in Ratanakkiri’s O’Yadaw district, which sits on the Vietnam border, and saw the company load several shipping containers with logs both wider than the legal limit and cut from protected species. Over two weeks, they saw an average of 15 of the containers a day cross into Vietnam. The drivers told them the wood was headed to the Vietnamese port of Qui Nhon and from there on to China.

The researchers also followed some of the containers they watched being loaded with rare wood in Ratanakkiri and elsewhere to the Sihanoukville Autonomous Port.

Over four weeks, they saw at least 30 of Mr. Pheap’s containers being trucked into the port a day.

“This amounts to an estimated 900 cubic meters of TPG-acquired timber stock passing into the port daily, an estimate which was confirmed by information given to the team by a customs officer,” the report says.

That team also obtained records from the port for one TPG shipment of 4,607 cubic meters in March.

Global Witness says the records include an export license listing the Forestry Administration as the exporter—which the group claims government procedure prohibits—and a TPG invoice with a handwritten note from a customs official more than doubling the value of the timber per cubic meter from $510 to $1,200, bringing the single shipment to $5.5 million. An export permit issued to TPG seven days later, however, lists the lower unit value.

A second set of records for another shipment of 105 cubic meters, also in March, cites a customs permit from the previous shipment the researchers had records for, a permit that had already expired. “This means that this second export of timber by Try Pheap may have been done without the correct customs permit, which could constitute fraud,” the report says.

According to the records, both shipments were headed to China via the same Hong Kong firm, the Kin Chung Transportation Company.

In Hong Kong, Global Witness found the firm operating out of an unmarked residential house with a share capital of 2 Hong Kong dollars split evenly between two directors. The company had no listed phone number or website.

None of the people the researchers interviewed at Kin Chung’s other properties had any knowledge of the firm trading timber. The firm’s directors claimed to have no idea what was in the containers they shipped and told the researchers they had never seen the records of the Cambodian shipments from March and had no idea why their company’s name and address was used.

“Such a response only further raises suspicions about…Try Pheap’s timber trading business,” the report says. “Timber harvested, processed and exported by the Try Pheap Group or its affiliates should not be considered legal until proven otherwise.”

The report offers no figures on how much rare timber Mr. Pheap is shipping to China, Cambodia’s biggest market. But Global Witness’ findings, and Chinese customs data, suggest he is shipping most of it.

Chinese customs data obtained by the Environment Investigation Agency, another U.K. environmental rights group, shows that China imported nearly 21,000 cubic meters of hongmu—a category of prized timber species for making furniture that includes Siamese rosewood—from Cambodia in 2013. That was nearly triple what the country imported from Cambodia the year before.

According to Chinese customs data obtained by Global Witness, China’s imports of hongmu from Cambodia shot past 55,000 cubic meters in the first nine months of 2014 alone and accounted for 97 percent of all the wood China imported from Cambodia over that period.

“The Try Pheap Group’s raids on Cambodia’s last forests are tantamount to daylight robbery,” Ms. MacInnes says in the report. “The company is routinely and brazenly flouting laws aimed at protecting Cambodians and the ecosystems they rely on. This is yet another example from Cambodia of political power and business interests trumping citizens’ rights and the wholesale capture of the country’s natural resources by its corrupt ruling elite.”

A map of Ratanakkiri province, including Virachey National Park, showing logging activity, timber depots and sawmills linked to timber magnate Try Pheap. (Global Witness)
A map of Ratanakkiri province, including Virachey National Park, showing logging activity, timber depots and sawmills linked to timber magnate Try Pheap. (Global Witness)

Defend and Deny

Contacted Thursday, government officials and TPG employees either declined to comment, denied the report’s claims or defended their own work.

Chey Sith, who heads a shipping company that has handled Mr. Pheap’s exports, said he no longer worked with the timber tycoon but declined to say when the arrangement ended or discuss their past work together.

A spokesman and an administration chief for Mr. Pheap could not be reached for comment. Neither could Pol Visal, the head of his operations in Ratanakkiri.

Sei La, who manages Mr. Pheap’s operations in Preah Vihear province, however, rejected all of the report’s allegations.

“What Global Witness says in the report is not true because we never log inside or outside of economic land concessions. We only buy confiscated illegally logged wood from the government for export,” he said.

The deputy director of the Commerce Ministry’s customs department, Sem Meng, said he could not comment on exports from the Sihanoukville port because they were under the jurisdiction of the port authority. The port’s director, Lou Kimchhun, could not be reached.

Sao Sopheap, a spokesman for the Environment Ministry, which oversees Virachey National Park, declined to comment because he had yet to read the report.

In a prepared response, the Forestry Administration denied any wrongdoing.

“Until now no licenses have been issued to harvest, transport or export forest products irregularly or contrary to the law. The harvesting of forest products was carried out in compliance with the permit principles of the Cambodian government,” it says.

It says the rare timber the country exports comes only from what authorities take from illegal loggers or forests being cleared for development projects. It boasts of a 1,900-hectare plantation in Siem Reap province just for growing luxury-grade wood.

The Forestry Administration also notes the government’s decision in 2013 to join 176 other countries in signing an international convention giving special protection to Siamese rosewood.

Under the rules, the government has to issue a license for any shipment of Siamese rosewood in unprocessed form out of the country. Despite what Global Witness’ researchers saw and recorded during most of 2014, Cambodia has yet to issue a single such license.

(Additional reporting by Aun Pheap and Van Roeun)

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