August 7, 2008

Commission Recommends Congo Cancel Majority of Logging Contracts

A government sponsored World Bank review of timber contracts in the Democratic Republic of Congo reported Wednesday that the nation should withdraw more than 75 percent of its logging deals for not meeting standards.

The review was an attempt to recover millions of dollars in lost tax revenue and set the corruption-prone business straight.

The working group is reviewing the legal and technical aspects of 156 logging contracts, most of which were enacted during the 1998-2003 war or in its aftermath under the corruption-plagued interim government.

Only 29 of the deals met the minimum required standards, according to a list published Wednesday in local media reports.

"These are the opinions of the technical working group," Abel Leon Kalambayi, who leads the commission that will make the final contract decisions, said during an interview with Reuters.

"They do not bind the commission. We must wait for the end of the process and the commission's recommendations."

Among the contracts recommended for withdrawal are 10 of 16 belonging to Portuguese-owned Sodefor, a unit of NST.  Three of nine contracts belonging to Siforco, a subsidiary of Germany's Danzer Group, were selected for cancellation, while both deals with Safbois made the cancellation list.   Researchers say these three firms together account for more than 66 percent of Congo's exported timber.

Congo is home to the world's second largest tropical forest, and represents more than a quarter of the world's tropical forest.  Land clearance and logging for farming are chipping away the Congo Basin at a rate of more than 800,000 hectares annually.

In 2002, with Congo under the partial control of rebels, the country issued a five-year moratorium on new logging contracts to try to stem deforestation.  But the measure was largely ignored as companies continued signing new contracts.

The conservation group Greenpeace said Wednesday's findings did not go far enough, and accused the working group of not heeding its own published criteria for contract evaluation, which require compliance with the moratorium.

"The fact that 16 titles out of the 29 that have received a favorable opinion have been obtained in clear violation of the 2002 moratorium is completely incomprehensible," said Judith Verweijen, Africa Policy Advisor for Greenpeace, during an interview with Reuters.

The review commission plans to publish its preliminary findings in mid-September.