Hong Kong-listed logging company continues global rape

CleanBiz.Asia

Malaysian logging group Samling, has been accused of using illegal logging permits to give it access to pristine forests in Liberia. The case of Liberia is simply the latest in a long list of allegations of corruption, tax avoidance and evasion and ecological terrorism against the company, which hides behind shady subsidiaries and an intricate web of cross-holdings.

At the top is the private conglomerate Yaw Holdings, led by Yaw Chee Ming, eldest son of the company’s founder and one of Malaysia’s richest men.

And to make his activities even more opaque three linked companies –  Hong Kong-listed Samling Global, and Malaysian-listed Glenealy Plantations and Lingui Developments – have all announced plans to delist from the exchanges, removing many of the arduous reporting requirements they currently have to fulfill and making the work of investigative NGOs all the more difficult.

A just-released report by several international NGOs has labeled Samling as “notorious” and it has been accused of illegal logging activities in Cambodia, Papua New Guinea and Guyana. Global Witness, Save My Future Foundation and the Sustainable Development Institute allege that over 40 percent of the Liberia’s forest has been granted to logging companies over the past two years and that the expected devastation will have a heavy impact on the local population.

The report, ‘Signing their Lives away: Liberia’s Private Use Permits and the Destruction of Community-Owned Rainforest‘, names Samling Global as being the beneficiary of dubious logging licenses. The company describes itself as an integrated forest resource and wood products company that produces timber, plywood, veneer, furniture and palm oil with its operational headquarters in Sarawak. It has operations in New Zealand, Malaysia, Liberia and Guyana with product sales outlets all over China.

License to steal

The new logging contracts – termed Private Use Permits – contain no sustainability requirements and, therefore, would essentially allow companies to clear 40 percent of Liberia’s forests, including almost half of Liberia’s primary intact forests. They provide less revenue to the Liberian Government than other types of logging licenses.

“Frequently allocated on land owned collectively by the local communities, the permits provide little benefit to these communities and violate Liberia’s new laws designed to ensure that communities can control their forests,” says the report.

Liberia suffered a series on conflicts between 1998 and 2003, with the UN banning timber from the country in 2003 because it financed the conflict. Following the bans lifting in 2006, the US granted USD30 million for community projects to enable them to manage their forest and the EU signed a timber trade agreement that defined ‘legal’ logging.

This work looks set to be undermined. The report says the NGO group has proof of fraudulent land ownership documents and that communities were given less than a day to consider the deals and misled on the implications.

The NGOs point to Liberian-registered Atlantic Resources and Alpha Logging as having links to Samling. Atlantic holds a total of 8,400 km2 in Private Use Permits, or almost eight percent of the entire country, while Alpha Logging also holds permits. Additionally both Alpha and Atlantic also hold government Forest Management Contracts amounting to 2,400 km2.

“In total, Samling-linked companies thus control some 10 percent of Liberia’s land area,” says the report.

Labyrinth

Samling specializes in creating a labyrinthine number of cross-holdings with subsidiaries registered in Bermuda and the British Virgin Islands, making a full investigation of its operations difficult, but ultimately it comes under the dominant shareholders of the Yaw Group, who have announced plans to remove it from the Hong Kong bourse.

Atlantic Resources, for example, is 60 percent owned by Perkapalan Damai Timar (PDT) which has ownership cross-overs with Samling Global. Just how linked PDT and Samling are is difficult to sort out. For example, PDT owns over five percent of Glenealy Plantations and nearly seven percent of Lingui Development. It also holds a ‘substantial’ amount of Yaw Holdings through some of its subsidiaries – Limbang Trading Bintulu (indirect interest of 25 percent), Samling Dorfohom (indirect interest of 30 percent), Samling Manufacturing Plantation (through Samling Dorfohom) (indirect interest of 21 percent) and Sorvino (indirect interest of 51 percent).

At the same time Samling also holds over 30 percent of Lingui and 15 percent of Glenealy, while being listed as a subsidiary of Yaw Holdings, founded by Yaw Teck Seng in 1963.

The business is still in the family with the current CEO of Samling being Yaw Chee Ming, the founder’s eldest son.

What adds insult to injury for Liberia is that neither Atlantic nor Alpha have paid their taxes, with the report saying Atlantic owed the Liberian Government over USD2.7 million, while Alpha Logging owed an additional USD2.9 million.

Track record

The skullduggery should come as no surprise.

In 2007 Bharrat Jagdeo, President of Guyana, publicly condemned Samling for illegal logging, saying that investigations showed fraudulent activities between forestry officials and Samling’s Guyanese subsidiary Baram which exploited 408,000 hectares of tropical rainforest in addition to its legally held 1.61 million hectares of forest concessions.

So serious have been the allegations against Samling Global, that in 2010 the Norwegian Ministry of Finance announced that the Norwegian Government Pension Fund had divested itself of 16 million shares of Samling Global, then worth USD1.2 million.

At the time the Norwegian minister of finance Sigbjorn Johnsen said: “The Council on Ethics has assessed Samling Global, and concluded that the company’s forest operations in the rainforests of Sarawak and Guyana contribute to illegal logging and severe environmental damage. I have, therefore, chosen to follow the recommendation of the Council on Ethics and exclude the company from the GPFG’s investment portfolio.”

Further investigations of these logging operations are under-way.

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