Timber - Cambodia | Preferred by Nature

The Timber Legality Risk Assessment contains an evaluation of the risk of illegality in Cambodia for five categories and 21 sub-categories of law

Nearly half of Cambodia is forested. Forest cover decreased from 60% in the 2010 (FA, 2010) to 45% (8.1 million ha) in 2016 (REDD Secretariat of Cambodia, 2016). The forest cover consists of Production Forests and Protected Areas. 26% of land in Cambodia is designated as a protected area, in which development is prohibited or limited for ecological or cultural conservation.

Data shows that between 2001 and 2018, Cambodia’s protected areas lost 557,000 hectares of tree cover, about 11.7% of the total protected area in Cambodia. Protected areas provide habitat for hundreds of species that are iconic to the region— some of which are threatened with extinction (Global Forest Watch, 2019). There are several reports and news articles reporting the illegal export of timber from Cambodia, specifically going to Vietnam and China.

The legal framework of the environment and natural resources sector has recently been under various reforms such as the jurisdictional transfer to the Ministry of Environment, redefinition of Forestry Administration and decentralization process across the country. Significant changes should be anticipated in the next 1-3 years. Since 2002 there has been a moratorium in place for timber from forest concessions in natural forest. The moratorium was put in place due to lack of control of the timber harvesting.

Several legality risks are present in Cambodia timber supply chains. The risks are wide ranging and relate to legal rights to harvest, taxes and fees timber harvesting activities, third parties’ rights, and trade and transport. If you are sourcing timber from Cambodia you should take care to ensure the extensive risks identified are not present in your supply chains or have been sufficiently mitigated

Corruption Perceptions Index

Score: 23 / 100 in 2021

Rank: 157 out of 180 countries in 2021

Bans and restrictions

Export ban for logs, rough sawn timber, squared logs with a thickness or width of more than 25cm, and firewood and charcoal from natural forests.

Logging concessions within the Permanent Forest Estate have been suspended since 2002.

Export ban for all timber exports to Vietnam was reported in 2016. An official decree on this decision is not available.

Armed conflict

The Uppsala Conflict Data Program records that there were 5,082 deaths from 2014-2017. Since 1946, conflict in Cambodia has included extra-state, interstate, intrastate conflicts and one-sided violence.

CITES species

Appendix II
Dalbergia spp. (Rosewood)
Diospyros ferrea (Black ebony), Aquilaria spp

Certification

FSC Certified Forest Area: 7,896 hectares (4 December 2019)

Information Gathering

Timber sources

Timber source	Description of Source Type
Conversion timber from infrastructure development	State Private Land that is allocated to private companies for development (e.g. hydro-power dams, national and provincial road areas). Harvest Permits are required to clear the land to prepare for the development. Like forest conversion for Economic Land Concession (ELC), timber harvest and forest clearance are made by separate entities. Timber from infrastructure development can be used for domestic use or export.
Economic Land Concession (ELCs)	State Private Land that is classified as production forest or within the protected areas system. ELC contracts are allocated to private companies to develop forest areas for other uses. Since 2014, ELCs can be awarded for agro-industrial purposes (including forest plantations) for maximum 50 years of lease duration and for areas no greater than 10,000 ha. ELC contracts can be revoked or cancelled by the government when legal and contractual requirements are not complied. State Private Land that is classified as production forest or within the protected areas system. ELC contracts are allocated to private companies to develop forest areas for other uses. Since 2014, ELCs can be awarded for agro-industrial purposes (including forest plantations) for maximum 50 years of lease duration and for areas no greater than 10,000 ha. ELC contracts can be revoked or cancelled by the government when legal and contractual requirements are not complied. Harvesting is supervised by Ministry of Agriculture, Forestry and Fisheries (MAFF) with technical recommendations by the Forestry Administration (an MAFF department). Harvest Permits are required. The actual timber harvest is required by the national regulations, to be carried out by an entity separate to ELC companies. The ELC companies only have rights to develop the ELC areas after forest areas have been converted. Prior to the jurisdictional transfer of 2016, both the Ministry of Agriculture, Forests and Fisheries (MAFF) and the Ministry of Environment (MoE) shared jurisdiction over ELCs, depending upon the location of each specific ELC (located within MAFF versus MoE holdings, as the case may be). However, since 2016, all ELCs are under MAFF supervision, even those ELCs previously approved by MoE and located within the MoE-supervised protected areas system.
Timber / NTFP from Community forestry areas	Community forests (CF) may only be located on state public property. A Community Forest Agreement with Management Plan (CFMP) is required (Forest law, article 43). Timber from community forestry areas can also be exported as long as the timber is purchased by Timber Export Companies. However, to date, there is no timber available from community forestry areas because almost all the community forestry sites have been established after 2004 and timber has not yet reached DBH ready for harvesting. Furthermore, almost all CF sites were created on degraded forestlands and a range of bureaucratic requirements (5 year waiting period, complications in management plan approval process, transportation permit requirements, etc.) have had the effect that there are no known instances of CFs being a source of legal timber. It is worth noting that there is another community-based natural resource management scheme: community protected areas (CPAs). However, commercial activity within the CPA is limited to sale of NTFP, fishing and eco-tourism activities, and is therefore not a source of timber.
Confiscated illegal timber	Transport Permits are required. Any drifted, stranded, sunk, unmarked logs, and any unclaimed timber shall be seized as state property and publicly auctioned. A transport permit (PC-2) is given to the auction winner, normally a Cambodian entity, to transport the seized timbers to their target processing sites. Illegal timbers that are confiscated within the protected areas are handled by Ministry of Environment (MoE). It is noted that the MoE officials are restricted to patrol illegal timber harvest only within the territories of protected areas, land outside protected areas are handled by MAFF.
Tree plantations	Private land: Privately owned land, that is managed by private companies. Land must be registered as forest land, and a Registration Certificate is issued. State land: State Forest Land that is managed privately, either by Communities, individuals, households or the Forest Administration. Agreements for granting rights to plant trees must be obtained.
NTFP and Timber from Social Land Concessions.	State Private Land that is allocated for residential use and/or family farming as social land concessions. Timber derived from SLCs can enter the commercial timber chain including export. After five (5) years of tenure of State Private Land, the Social Land Concessions can be converted to private land; and forest plantations, if any, become private forest plantation. A land certificate and land tenure title are required.

Documents to indicate legality

Legal rights to harvest	Economic Land Concessions (ELCs) Cadastral Maps Land Register Land use plan adopted including harvesting plan by the Provincial-Municipal State Land Management Committee Environmental and Social impact assessment Detailed Solicited Proposal or Unsolicited Proposal Economic land concession contract Commercial registration Conversion timber from infrastructure development Memorandum of Understanding with Ministry of Mines and Energy (MME) Feasibility study Approval by the Council for the Development of Cambodia (CDC) Water use license from Ministry of Water Resources and Meteorology Environmental and social impact assessment Build-operate-transfer (BOT) contracts Community Forest Community Forest Agreement
Taxes and fees	Detail List of forest inventories and timber volume called Book "A" Certified documents issued: by Forestry Administration (for domestic transportation); by Ministry of Economy and Finance (for export timber, if any). Payment Receipts Different official letters from related ministries and ministerial line departments
Timber harvesting activities	Permit of timber harvest; Permits of sawn and round timber transport; License of sawmill of timber processing. Environmental and Social Impact Assessment Employment card Employment contract Payroll ledger
Trade and transport	Book A Transport permits PC-1 (Permit de Condure-1): Transport of logs from the stock pile to a defined processing mill; PC-2 (Permit de Condure-2): Transport timber products for the domestic markets PC/B (also referred to as PC-IMEX): Transport permit to allow timber and NTFP exported or imported. Invoices, must be kept for ten years Companies must disclose related-party transactions when filing their annual Corporate Income Tax return (CIT) and provide relevant transfer pricing documents; Export license issued by the Ministry of Commerce with visa issued by the head of the Forestry Administration (sub-decree no. 131, article 7). The visa allows for export of timber Export license is issued for international trade (tax, royalties, premiums) Mills that produce timber product must obtain a PC-IMEX for the import or export of wood products. CITES import/export permit

Risk Assessment

Risk assessment summary

Legal rights to harvest

Legal rights to harvest

Risk of conflict in relation to land concessions, arising from land grabs, forced evictions, and natural resource exploitation.
Risk of unclear land tenure due to confusion about property rights are unclear.
Risk if illegal forest clearance taking place prior to the proper legal process for granting Economic Land Concessions being completed.
Risk that the legal maximum allocation limit of 10,000 ha for ELCs is exceeded because many ELCs parcels of 10,000 ha are owned by the same investors, and are adjacent to each other.
Risk of conflict between local and higher-level decision-makers around land use, frequently resulting in intimidation, threats or dismissal of the local authorities.
Risk that ELCs are illegally allocated within protected areas and Natural forest areas.
Risk that ELCs do not meet their productive use objectives.
Risk that the requirement to have management plans in place is not complied with.
Risk of timber theft through harvesting without a permit.
Risk of illegal harvesting beyond allocation boundaries.
Risk of laundering illegally harvested timber through ELC or conversion projects.
Risk of misue of conversion permits to harvest profitable forest areas.

Taxes and fees

Taxes and fees

Risk of non-payment of taxes and fees

Timber harvesting activities

Risk that harvesting above the annual allowable cut take place
Risk that the regulations specified in ELC contract are violated
Risk that guidelines and regulations are not complied with during the conversion of forests
Risk that protected areas are illegally harvested due to inconsistent zoning of protected areas
Risk that ELCs/SLCs are allocated within protected areas
Risk that illegal logging of protected species (i.e. luxury timber/resin trees) takes place
Risk that poaching occurs in connection to illegal logging activities
Risk that Environmental Impact Assessments and Environmental and Social Impact Assessments are not in place prior to operations of ELCs
Risk that there is fertilizer run-off from ELCs
Risk that environmental requirements, including respecting buffer zones are not complied with
Risk that logging is approved despite EIA/ESIA showing negative social and environmental consequences
Risk that health and safety is ignored during logging operations
Risk that legal requirements relating to employment are not complied with

Third parties' rights

Risk that logging companies do not provide development to villagers in accordance with the law
Risk that conflict between villagers and logging companies occur
Risk that villagers are not allowed to enter the forest by logging companies in violation of the law

Trade and transport

Trade and transport

Risk that transport documents are falsified or incorrect due to a lack of identification of logs and associated volumes
Risk that of incorrect information on quality and volumes
Risk of off shore trading and transfer pricing taking place in timber transactions
Risk that illegally logged timber are exported illegally
Risk that export documents are falsely prepared
Risk that timber is illegally exported though unofficial border crossings
Risk that illegal export of restricted timber (luxury timber, timber bigger that 25cm width limit) is taking place
Risk that illegal harvest and export of CITES species is taking place
Risk that CITES permits are illegally issued

Specified risk species

Common/trade name	Scientific name	Notable information	CITES* Appendix
Rosewood Krah Nuong	Dalbergia spp.	"Luxury" grade timber Dalbergia cambodiana is listed as endangered on the IUCN Red List. Dalbergia cochinchinensis (Siamese Rosewood) is listed as vulnerable on the IUCN Red List	II
Black ebony	Diospyros ferrea		II
Pyinkado or Sokram សុក្រម (Căm xe in Vietnam)	Xylia xylocarpa	Common in the illegal trade with Vietnam (EIA 2018)
Sramo/Sa mao tchet	Terminalia chebula	High value timber. Common in the illegal trade with Vietnam (EIA 2018)
Padauk Thnong	Pterocarpus macrocarpus	"Luxury" grade timber. Prohibited from harvest and export in Cambodia in any form
Beng បេង (Gõ đỏ in Vietnamese)	Afzelia xylocarpa	"Luxury" grade timber.
Dai Khla	Gardenia ankorensis Pit	"Luxury" grade timber. The wood of this species is similar to ivory, it is very expensive and sold by the kilogramme.

Risk Mitigation

Mitigate the risks in your supply chain

Learn which actions we recommended to mitigate the risks associated with the timber sources from Cambodia.

Source Certified Materials

NEPCon believes that third party certification (for example FSC) can provide strong assurances of the legality of the products they cover. Companies seeking to mitigate the risks of sourcing illegal timber should seek to purchase third party certified materials wherever possible.

While the European Timber Regulation does not include an automatic “green lane” for certified products, it does recognise the value of certification as a tool for risk assessment and mitigation. The European Commission says that companies “may rate credibly certified products as having negligible risk of being illegal, i.e. suitable for placing on the market with no further risk mitigation measures, provided that the rest of the information gathered and the replies to the risk assessment questions do not contradict such a conclusion.”

For more information on using certified materials in your due diligence, including how to assess whether a certification system meets EUTR requirements, see the page on Certification and Due Diligence.

Mitigation recommendations for non-certified materials

1. Fully map your supply chain

Our supply chain mapping tool can help you do this.

2. Obtain and verify documents

Forest level documents
- Conversion timber from Economic Land Concessions (ELCs)
  - Forest Inventory: lists of timber species and volumes
  - Cadastral Maps
  - Land Register
  - Land use plan adopted by the Provincial-Municipal State Land Management Committee
  - Environmental and Social impact assessment
  - Detailed Solicited Proposal or Unsolicited Proposal
  - Economic land concession contract
  - Commercial registration
- Conversion timber from infrastructure development (hydropower dams)
  - Memorandum of Understanding with Ministry of Mines and Energy (MME)
  - Feasibility study
  - Approval by the Council for the Development of Cambodia (CDC)
  - Water use license from Ministry of Water Resources and Meteorology
  - Environmental and social impact assessment
  - Build-operate-transfer (BOT) contracts
- Community Forest
  - Community Forest Agreement
Taxes and fees
- Detail List of forest inventories and timber volume called Book "A"
- Certified documents issued: by Forestry Administration (for domestic transportation); by Ministry of Economy and Finance (for export timber, if any).
Trade and transport
- Book A
- Transport permits
- PC-1 (Permit de Condure-1): Transport of logs from the stock pile to a defined processing mill;
- PC-2 (Permit de Condure-2): Transport timber products for the domestic markets
- PC/B (also referred to as PC-IMEX): Transport permit to allow timber and NTFP exported or imported.
Export and custom
- Export licence issued by the Ministry of Commerce with visa issued by the head of the Forest Administration (Sub-Decree #131, article 7).
- Mills that produce timber product must obtain a PC-IMEX for the import or export of wood products.

3. Consult with stakeholders

4. Carry out on-site verification

5. Conduct targeted timber testing

Conduct timber testing on samples of purchased material to verify the species or origin of timber, where appropriate. Read our Thematic Article on timber testing, a guide to laboratory techniques to determine species and origin of timber products, to find out more.

6. Avoid / do not buy

Avoid products that include materials bought at spot- and/or open-markets

Profile Publication Date

2020-11-24

Cambodia Timber Risk Profile

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