1. Cambodia’s Family Trees
My name is Eleanor Nichol, and I’m here to present to you the findings of Global Witness’ latest report on illegal logging and corruption in Cambodia: ‘Cambodia’s Family Trees’.
The result of several years of research, the report exposes how a syndicate comprising relatives of Prime Minister Hun Sen and other senior officials has looted the country’s forests over a period of years.
Global Witness, June 2007

2. The Seng Keang Company
The report details the careers of a group of timber barons who together constitute Cambodia’s most powerful logging syndicate.
Just to say a bit more about who the individuals are….
With familial links to some of the country’s most powerful political players, their careers illustrate how the country’s political elite has successfully subverted forest management reforms and continued looting a valuable public asset.
There is substantial evidence that this group’s activities extend beyond illegal logging to encompass kidnapping and attempted murder. Moreover, there are strong indications that corruption and nepotism at the highest levels explain the impunity with which its members have operated for almost a decade.
While this syndicate has operated under various labels, most recently ‘Seng Keang Import Export Company Ltd.’

3. Kingwood
Members of the Seng Keang Company first came to Global Witness’ attention as subcontractors for some of the leading logging concessionaire companies which were operating in Cambodia in the 1990’s. One of the companies that they provided logging services to was called Kingwood.
Despite large profits generated by illegal logging at the time, the Kingwood company borrowed money from a number of Banks and individuals, including Seng Keang and Khun Thong. By late 2001, Kingwood owed US$1.9 million.
Unfortunately for Kingwood, the Cambodian government imposed a moratorium on harvesting in logging concessions with effect from January This destroyed their chances of keeping up with the debt repayment.
A source close to the Kingwood operation informed Global Witness that, in August 2002, Kingwood’s Managing Director Lia Chun Hua attempted to cut his mounting losses and leave Cambodia for good. According to this source, he was prevented from doing so by Seng Keang, whose entourage abducted Lia, confiscated his passport and held him hostage in the factory compound. At this point, the Seng Keang syndicate took control of the Kingwood factory and all of its processing equipment.

4. Tumring Rubber Plantation
With the imposition of logging moratorium, the Seng Keang Company needed to look for other opportunities to continue their logging activities.
And they found this in the shape of the government-mandated rubber plantation in Tumring, Kompong Thom Province.
The area is in the heart of Prey Long Forest – mainland Southeast Asia’s largest lowland evergreen forest and an important part of Cambodia’s natural heritage.
In October 2002 Chan Sarun’s Ministry of Agriculture, Forestry and Fisheries issued to Seng Keang company to collect wood within the rubber plantation’s boundaries However, the syndicate soon proved themselves uninhibited by the plantation’s perimeters, and began logging in the neighbouring Prey Long Forest. Its targeting of resin trees has damaged the livelihoods of hundreds, if not thousands of families living in the area.  The Tumring formula – officially-sanctioned clear-felling within a valuable forest – provided almost unlimited scope for laundering illegally-logged timber between 2002 and 2006.

5. The Benefit of Conversion
As yet, the rubber plantation in Tumring has not yielded any rubber. But it has produced a huge timber haul for the Seng Keang Company.
Due to the illegal nature of the company’s activities, it is difficult to as. Nonetheless it is clear that the returns on its logging and timber processing operation have been considerable. Calculated at the 2006 Phnom Penh price for sawn grade II wood of US$235 per cubic metre, Seng Keang Company’s yearly output of processed timber from Tumring would be worth over US$13 million.[i]
According to Chan Sarun, between the point at which it officially commenced operations in Tumring and the end of 2005, the Seng Keang Company paid just short of US$600,000. In a sense questions regarding the amount Seng Keang Company paid in taxes are academic, given that the vast numbers of trees it cut illegally should not have been felled in the first place. Nevertheless, it is indicative of the overall loss to Cambodia, if only in financial terms, when one considers that taxing the syndicate’s 100,000 m3 annual round log consumption at the royalty levels applied to grade II wood – US$54 per cubic metre – would have netted the treasury US$5.4 million per year.

6. What next for Seng Keang and co.?
In March 2006 MAFF Minister Chan Sarun issued a prakas revoking his earlier authorisations for Seng Keang Company operations, and by September 2006 practically all traces of the Seng Keang Company operation were gone. The precise rationale behind the decision to close the company’s operations is unclear. However, it seems likely that the attempted shooting of two community forest activists in 2005, and the international attention this generated, played a role.
It appears however, that the company has now resumed logging operations in the area again from March this year. Whilst the scale of the operations is unclear at this point in time, it does suggest that the closure of the company’s factory in Khaos village was a temporary hiatus, rather than a permanent end to their activities.
It has also applied for further land concessions.

7. Institutional Corruption
Forest Administration
Military Police
Royal Cambodian Armed Forces
Police
Local Government
One of the reasons why the Seng Keang Company was able to operate for so long with impunity in its Tumring -operation was the way in which is co-opted those arms of state responsible for protecting the forest and upholding the rule of law.
Our investigations found evidence of officials from the Forest Administration, military police, RCAF, and police were all accepting bribes from the Seng Keang Company in return for turning a blind eye to their activities.
Global Witness has also recorded strong evidence to suggest that in 2003 the Minister for Agriculture, Forestry and Fisheries, Chan Sarun, along with the Director of the Forest Administration, Ty Sokhun, auctioned off most of the jobs in the Department for Forestry and Wildlife to the highest bidder during a departmental restructure.
Estimates Chan Sarun US$2.5 million.
The cost of buying their jobs has left many FA staff heavily in debt, and has created an incentive for them to use their positions to extort money.
In other words, this job sale has been a driving factor for corruption within the Forest Administration>

8. The Brigade 70 connection
Elite military unit loyal to Hun Sen
Smuggles timber for Seng Keang company and other illegal timber traders.
$US1.2 million per annum.
In transporting illegally-logged timber out of Prey Long, the Seng Keang Company has worked closely with RCAF Brigade 70. Brigade 70 is a special unit of 2,000 soldiers which acts as a reserve force for Prime Minister Hun Sen’s Bodyguard Unit. It also runs a massive timber transporation and smuggling enterprise across Cambodia.
Over the past three years Global Witness has uncovered evidence of Brigade 70 transporting illegally-logged wood for many of Cambodia’s major timber traders.
In the second half of 2006, Brigade 70 was transporting an average of 1,260 m3 illegally-logged timber per week. Through these timber trafficking operations, Hak Mao makes approximately US$1.2 million per year.
Brigade 70 operates a parallel service transporting smuggled goods through ports on Cambodia’s south coast, notably Oknha Mong Port
The profits are used to pay for the operations of Brigade 70 itself. In addition, a large cut is handed over to Hun Sen Bodyguard Unit commander Lieutenant General Hing Bun Heang.

9. Reaction to the Report
“If they [Global Witness staff] come to Cambodia, I will hit them until their heads are broken.”
Quote from Hun Neng, the governor of Kompong Cham province and brother of Prime Minister Hun Sen, drawn from an article by Douglas Gillison and Yun Samean, published in the Cambodia Daily on June
The Cambodian authorities have responded by banning the report, confiscating copies and harassing journalists who have reported on its findings. The Prime Minister’s brother has threatened Global Witness staff with violence if they visit Cambodai.
While a government spokesman has talked of an investigation, there appears to have been no follow-up.

10. What we called for Accountability Forest Management Reform
Transparency
Senior officials’ vested interests in the status quo mean that change can only be driven by strong pressure from outside the government.  Ideally this would be led by ordinary Cambodians citizens and civil society organisations.  However, in the current political climate, in which those who speak out against abuses are threatened or attacked, civil society in Cambodia is not robust enough to play this role on its own.  Those with the greatest leverage over the government remain the international donor community. 
In the past, donor support has failed to produce reforms that would make the government more accountable to its citizens. Instead, the government is successfully exploiting international aid as a source of political legitimacy.
Accountability - Investigate and prosecute all those responsible for the cases of illegal logging, corruption, smuggling, attempted murder and kidnapping detailed in this report.
Forest Management Reform
Develop a new forest management regime based on the recommendations of the IFSR. This should centre on expanded community forestry, partnership forestry and landscape-based conservation programmes.
Transparency
Called on donors to increase pressure on the government to take immediate steps to increase transparency in the management of public assets
Ensure full and continued disclosure of information concerning the management of public assets such as forests, land, oil and gas, mineral deposits, fisheries, heritage sites and state-owned buildings.

11. What Next? Media Lobbying
In the event, the donor’s public response to the evidence outlined in the report has been disappointing. At the annual donor-government meeting in Phnom Penh this year, donors pledged a total of 689 million U.S. dollars – a rise of 15% on previous years.
As yet, we have seen no move towards a credible investigation of the allegations detailed in the report and talks on forest management reform appear to be in deadlock.
In the future, we plan to continue to lobby donor governments and media to expose the problem of corruption in the mismanagement of natural resources in Cambodia, and work to encourage them to insist on measures to combat it.