15 March 2019
In early September last year, local media in Myanmar’s Kayah State reported on a shadowy agreement to allow the trade of 5,000 tons of valuable hardwood timber, including 3,000 tons of teak. The 5,000 tons extracted will be in addition to the country’s Annual Allowable Cut and will come from a state where there is on-going conflict between the Myanmar military and the Karenni National Progressive Party (KNPP) armed ethnic organisation, with reports of specific clashes and abuses linked to logging and timber transport.
London based Environmental Investigation Agency alleges that there is widespread corruption in teak trade. EIA said a two-year undercover investigation found that Cheng Pui Chee aka Chetta Apipatana in Thailand, who died in April last year, had conspired with senior military and government officials and had established a secret off-the-books system for fraudulent trade in the best quality teak.
Four companies established by Cheng are currently operating. These are Cheung Hing Corp Ltd, Northwood Co, Thai Sawat Industry Ltd and Pacific Timber Enterprise Co Ltd. Of these, only Pacific Timber Enterprise extracts timber. Cheng’s companies are currently authorised to buy 5,602 tons of wood, all teak. They have been authorised to buy since 2012. Piles of logs have been stored at the logging yards at Dagon Myothit (South), Nwe Gway and Wartayer. They have already paid for 1,500 tons, and MTE has already issued delivery orders for the teak.
MTE deputy general manager U Khin Maung Kyi said that this happened 30 years ago when General Chavalit Yongchaiyudh was commander-in-chief of the Thai army. At the time the Myanmar military government was experiencing difficulties due to international sanctions and it needed the revenue and it had to resort to timber trade to get much needed funds, he said. He added, “under the military government we had to do what it asked and we had to extract a lot more than the AAC [Annual Allowable Cut]. We had to extract however much the government wanted”.
Burmese teak is highly prized for its unique properties. Much of the illicit timber goes into neighbouring China, India and Thailand, substantial volumes have been trafficked via Italy into Europe and the US for the luxury yachting sector. German Navy used illegitimate Myanmar teak in the controversial refit of a prestigious training vessel, Gorch Fock.
In Myanmar there are armed organisations controlled by the ethnic groups. For example, Karenni National People’s Liberation Front (KNPLF), an ethnic armed organisation which signed a ceasefire with Myanmar’s military Government in 1989 and was subsequently converted into a pro-Government border guard force in 2009. This organisation controls timber in the Karenni region.
Myanmar is a complex state where there are different strong ethnic groups with diverse interests, often resulting in ethnic conflicts. Rakhine State riots is a recent example.
