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Timber Trade in Cameroon Controlled by Asian Companies

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Timber Trade in Cameroon Controlled by Asian Companies TIMBER TRADE IN CAMEROON CONTROLLED BY ASIAN COMPANIES Study conducted for WWF-Cameroon By Armand ZONGANG Forestry Expert August 2019 This document was funded by DFID (Department for International Development). DFID does not necessarily share the views expressed in this document. The responsibility for its content rests entirely with the author. TABLE OF CONTENTS ............................................................................................................... 1 LIST OF TABLES ....................................................................................................................... 4 LIST OF FIGURES ..................................................................................................................... 5 LIST OF BOXES ......................................................................................................................... 5 EXECUTIVE SUMMARY ........................................................................................................... 7 1. Introduction ........................................................................................................................ 7 1.1 General information .......................................................................................................... 7 1.2- Objectives of the study ..................................................................................................... 8 1.3 Methodology ..................................................................................................................... 9 2. Observed changes in the world market and the rules of the timber trade in Cameroon ....... 9 2.1 The global timber markets ................................................................................................ 9 2.1.1 Two major uncertainties relating to tropical timber markets in Africa: legality and quality ............................................................................................................................... 10 2.1.1.1 The legality of African tropical timber: the levels of requirements differ from one market to the other ................................................................................................. 10 2.1.1.2 Quality requirements of the markets .................................................................. 11 2.1.2 Evolution of forest products flows around the world................................................ 12 2.2 The stakeholders of the timber market ........................................................................... 13 2.2.1 Timber trade regulations in Cameroon ..................................................................... 13 2.2.1.1 General rules of the trade .................................................................................... 13 2.2.1.2 Types of private enterprises ............................................................................... 15 2.3 Trade between China and Cameroon .............................................................................. 17 2.4 Actors in the Cameroon timber market .......................................................................... 18 2.4.1 Operators working under the supervisory authority of the Ministry of Forestry and Wildlife .............................................................................................................................. 18 2.4.1.1 Logging companies ............................................................................................ 18 2.4.1.2 Wood processing companies .............................................................................. 19 2.4.1.3 Approval of relationships ....................................................................................... 19 2.4.2 Operators outside the control of MINFOF .............................................................. 20 2.4.2.1 Agents - Merchants - Middlemen ...................................................................... 20 2.4.2.2 Freight forwarders ............................................................................................. 21 2.4.2.3 National middlemen .......................................................................................... 21 3. Asian actors and areas of intervention ................................................................................. 22 3.1 The acquisition of logs by investors ................................................................................ 22 3.1.1 Short-term strategies ................................................................................................ 22 3.1.1.1 Signature of a partnership agreement for the exploitation of a logging title ..... 22 3.1.1.2 Purchase of logs.................................................................................................. 22 3.1.2 Long-term strategy ................................................................................................... 23 3.1.2.1 Obtaining a logging approval ............................................................................. 23 3.1.2.2 Buyback of an approved company by Asian investors ...................................... 23 3.1.2.3 Buying shares in the capital of an approved logging company or buying back a business in activity ........................................................................................................ 24 3.1.3 Acquisition of timber by Sino-Asian companies ...................................................... 24 TIMBER TRADE IN CAMEROON CONTROLLED BY ASIAN COMPANIES : Page 1 3.1.3.1 Acquisition of logs from the logging titles ......................................................... 24 3.1.3.2 Sales of sawn timber by processing units .......................................................... 29 4. The supply chain of the Asian market ................................................................................... 31 5. Analysis of the trends of Chinese / Asian businesses and investments in the forestry sector in Cameroon ............................................................................................................................. 34 5.1 Acquisition of more forest titles / resources to scale up the concessions owned ........... 34 5.2 The multiplicity of partnerships for the exploitation of a title ....................................... 34 5.3 The establishment of WPUs ........................................................................................... 35 5.4 An increasing physical presence of the Chinese as employees ....................................... 35 5.5 Regular trading with smugglers...................................................................................... 35 5.6 Beach trading on the rise ................................................................................................ 36 5.7 Strong involvement of Asians in export monitoring ...................................................... 36 5.8 Limited international trade ............................................................................................ 36 5.9 Cash payment that prevents the payment of taxes ......................................................... 36 6. Identification of professional organizations and networks (networking) to which Chinese companies belong and development of a database .................................................................. 36 7. Quantity of timber exported to Sino-Asian countries .......................................................... 37 7.1 Evolution of the volumes of timber exported to major destinations, and by product type .............................................................................................................................................. 37 7.2 Evolution of wood exports to Asian countries, by type of product ................................. 39 7.3 Quantities of tree species sold in Asian countries, by product type ............................... 40 7.4 Ranking of enterprises by the quantities of wood they export to Asia by type of product ............................................................................................................................................... 41 7.5 Special products exported to Asian countries ................................................................ 42 CONCLUSION AND RECOMMENDATIONS ......................................................................... 43 REFERENCES ...................................................................................................................... 46 APPENDIX ............................................................................................................................... 47 List of people met and their contact details ......................................................................... 47 Page 2: TIMBER TRADE IN CAMEROON CONTROLLED BY ASIAN COMPANIES VPA: Voluntary Partnership Agreement COMCAM: Cameroon Timber Marketing Database COMIFAC: Central African Forest Commission FAO : Food and Agriculture Organisation of the United Nations FLEGT: : Forest Law Enforcement Governance and Trade FOB: Free On Board NIS : National Institute of Statistics MINCOMMERCE: Ministry of Trade FLEGT: : Ministry of the Economy, Planning and Regional Planning MINFOF: Ministry of Forestry and Wildlife CAFO : Central African Forest Observatory OHADA : Organization for the Harmonization in Africa of Business Law ITTO: International Tropical Timber organization AFR: Annual Forest Royalties LLC: : Public Limited Liability Company SARL : Private Limited Company LP : Limited
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