PLANT VISIT - TIMBER EXPLOITATION IN GUINEA'S FOREST

UNCLAS SECTION 01 OF 02 CONAKRY 000178 DEPT PLEASE PASS TO USTR FOR LAURIE ANN AGAMA COMMERCE FOR SALIHA LOUCIF SIPDIS SENSITIVE E.O. 12598: N/A TAGS: GV EAGR ECON ETRD ELAB SUBJECT: PLANT VISIT - TIMBER EXPLOITATION IN GUINEA'S FOREST REGION ¶1. (U) On April 20, Ambassador Carter visited Foret Forte facilities in the heart of Guinea's forest region, about an hour outside the provincial capital of N'Zerekore. The Taiwanese-owned company has been harshly criticized for its alleged environmentally harmful logging practices as well as its lack of involvement in the local communities. However, the picture presented by the factory's Managing Director, Mr. Jean-Marie Pettit, suggests that the company is actually logging in a sustainable and conservation-minded way. In addition, the company highlighted a number of its ongoing community development projects. However, the site visit suggests that smuggling and unauthorized logging are widespread problems in the region. END SUMMARY. -------------- BACKGROUND -------------- ¶2. (U) Founded in 2002, Foret Forte is owned and operated by Cheng Jiin-Suey (Kim),a Taiwanese national living in GUINEA for more than 20 years. Mr. Kim, who also owns a steel company, claims to be a close friend of President Conte's. Foret Forte operations are located in the heart of Guinea's forest region where the company owns exclusive concessionary rights to 800,000 hectares of forest. It is the only company with a forest management concession in the country. ¶3. (U) According to Mr. Pettit, timber smuggling in the forest region has been a problem for years. Prior to Foret Forte's installation in 2002, companies based in Cote d'Ivoire and Liberia were reportedly smuggling timber out of Guinea. In some cases, the Guinean Government issued short-term permits for limited logging. Between 1995 and 2001, Mr. Pettit told the Ambassador that some French and Italian companies were actively smuggling timber into neighboring countries. In 2005, President Conte issued two decrees canceling all forest exploitation contracts, except that of Foret Forte's. -------------- OPERATIONS -------------- ¶4. (SBU) Foret Forte operates a sawmill and plywood factory six days a week, eleven months a year. The company employs just over 1,500 Guineans, including 300 women. According to Mr. Pettit, the company pays out about $114,000 in monthly salaries (an average of $76 per employee). He estimated the company's total investment at about $30 million. Mr. Pettit pointed out that the fact that Foret Forte is processing wood products in country sets the company apart from smugglers, who are focused on exporting raw timber. -------------- EXPORT BAN -------------- ¶5. (U) Most of Foret Forte's exports, which include raw timber as well as processed plywood and other goods, are destined for Europe. The company owner, Mr. Kim, told the Embassy in previous conversations that Foret Forte continued to export its products even when the Guinean Government instituted an export ban as part of the negotiated tripartite agreement that ended the violent, nationwide labor strike in 2007. Mr. Kim said that Foret Forte was granted an exemption to the export ban, but that the local population was not aware of the exemption, which fueled rumors that the company was smuggling timber illegally. ¶6. (SBU) However, Foret Forte seems to have fallen victim to the government's latest export ban, which was implemented a few weeks ago in an effort to mitigate the spiraling costs of goods. Mr. Pettit told the Ambassador that the company is respecting the ban and gave a tour of Foret Forte's increasing stockpile of goods awaiting export. -------------- RESPONSIBLE LOGGING -------------- ¶7. (U) The company officially has two overarching objectives: - Environment: Ensure sustainable management of existing forest resources while promoting reforestation practices. - Economy: Generate long-term economic benefits for the company, the country, the region, and the local communities through value-added timber processing. ¶8. (SBU) Mr. Pettit explained that Foret Forte employs a rotation program wherein the exploitable timber is divided into land parcels. Once a parcel is logged, the company waits 25 years before CONAKRY 00000178 002 OF 002 harvesting that same parcel again. Each parcel is selectively logged with the company taking only the largest trees and leaving the rest in order to preserve the forest. When the Ambassador asked about accusations against the company for environmentally destructive logging practices, Mr. Pettit told the Ambassador that the company is committed to environmental conservation, but that after finishing with a specific parcel, local villagers and/or smugglers come in behind them and cut down most of what is left. He said that Foret Forte is then accused for the clear cutting. Mr. Pettit mentioned that of the 3,000 containers of timber reported exported by the Guinean Customs Office in 2006, only 300 containers actually belonged to Foret Forte. He attributed the difference to smuggling activities. ¶9. (U) Foret Forte is also trying to implement a reforestation program. Mr. Pettit said that the company plans to plant 250,000 new trees in areas that have already been exploited. However, he told the Ambassador that the company has a difficult time employing villagers to plant the trees with local communities demanding payment from Foret Forte to plant seedlings. Mr. Petit was clearly frustrated by the lack of support offered by local authorities and the firm now limits distribution of seedlings to various environmental NGOs in the region. Mr. Petit confided with the Ambassador that unless something is done to restrict the clear cutting by local villages and illegal timber firms, he feared for the continued commercial viability of Foret Forte. As he told the Ambassador, "you can't have a lumber company when all the trees have been cut down." ¶10. (U) Mr. Pettit noted that the company is authorized to exploit classified forests, but that for the time being, they are leaving the core forest alone and focusing on the secondary forests. He said they are in the process of inventorying various parcels and planning appropriate, environmentally sound plans for exploiting those parcels. -------------- GIVING BACK -------------- ¶11. (U) Responding to questions about corporate responsibility and interaction with the local communities, Mr. Pettit said that Foret Forte is actively involved in a number of different community development projects including construction of bridges, schools, health centers, and roads. He also emphasized that the company routinely pays its taxes. When the Ambassador asked about negative community perceptions of the company, Mr. Pettit said that Foret Forte is actually very involved at the local level, but is not recognized for its contributions, and instead, often unfairly criticized by the media. -------------- PRESIDENTIAL CONNECTION? -------------- ¶12. (SBU) In reference to widespread rumors that President Conte is a company shareholder, Mr. Pettit denied any connections with the president. He said that some newspapers are subject to outside influence and encouraged to publish false information about the company. He said that Mr. Kim was the sole proprietor of the company. -------------- COMMENT -------------- ¶13. (SBU) Conversations with various contacts in the forest region after the Ambassador's April 20 visit indicated a generally negative perception of Foret Forte. There were allegations of smuggling activities, environmentally harmful logging practices, and lack of interest in local communities. However, the site visit suggested at a minimum that Foret Forte is actually implementing an environmentally responsible logging plan. The company is employing 1500 people in a country where the unemployment rate is well above 20% by most estimates. Foret Forte may not be a corporate paragon, but it does not appear to be the devil that others are labeling it. The visit also suggests that timber smuggling and unauthorized harvesting are serious problems. In a separate conversation with DCM and ECONOFF, Mr. Kim expressed an interest in meeting with environmental NGOs to share information on sustainable forestry initiatives. END COMMENT. CARTER