Gabon

Gabon: engaging Chinese timber operators in sustainable forest management

The reckless management of scarce natural resources has been an issue for many years. The depletion of hardwood stocks is usually associated with South America but Kingsley Ughe shows that this is also a problem in parts of West Africa. His research in the area also sheds some interesting light on China's relations with emerging economies.

China is the leading timber importer at the world level, due to the enormous needs of its construction, infrastructure and furniture industries. The US and the EU are the main export markets of Chinese wood products, and these exports have grown by nearly 1000 per cent since 1997.1 Despite its rapid expansion, the Chinese timber industry is still less advanced compared to northern counterparts and it therefore demands large diameter logs from (sub?) tropical natural forests of first or second growth. In fact, African timber exports to China, which represents only about 4 per cent of Chinese timber imports, are largely dominated by logs (85 per cent in 20062). Gabon is by far the major African timber supplier to China.3

China began to import significant volumes of Gabon's total log output in 1995/6. Export volumes to China grew very rapidly from a very small base of around 12,300 cubic meters in 1991 to almost 2,000,000 cubic meters at its peak in the year 2000. The increase in the trade volume from 1991 to its average volume in the following years (1997-2013) amounts to a staggering 19,568 per cent.

Gabon’s forestry resources
Gabon, with a total landmass of 268,000 square km is a densely forested country. Forests cover an estimated 220,000 square km, or about 85 per cent of the country. This is the second largest forest potential in Africa.4 The Gabon forests have been the primary supplier of many of the necessities of life, especially fuel and shelter. The forests contain over 400 species of trees, with about 100 species suitable for industrial use.5 Commercial exploitation began as early as 1892, but only in 1913 was okoumé, Gabon's most valuable wood, introduced to the international market. Gabon supplies 90 per cent of the world's okoumé, which makes excellent plywood. It also produces hardwoods, such as mahogany, Iroko, kevazingo, and ebony. Other woods are dibetou (tigerwood or African walnut), movingiu (Nigerian satinwood), and zingana (zebrano or zebrawood).

The forest sector constituted the country’s economic mainstay before it was replaced by the oil industry. Forestry’s contribution to GDP was less than five percent in 2012. However, in contrast to the oil industry, the labour-intensive timber industry is a very large employer, providing work for an estimated 28-30 per cent of the active labour force.6

For most of the twentieth century, Gabon’s timber industry received little political attention and remained largely unregulated. It was dominated largely by the demands of French industry, since Gabon retained strong economic ties to France after independence in 1960. In fact, because of its historically privileged access to Gabon's resources, in particular okoumé wood, France itself became a specialized supplier of plywood. Gabon’s forestry sector in turn applied the so-called méthode Okoumé system of silviculture, characterised by highly selective logging activities and by a reliance on natural regeneration to secure future timber supplies. 75 per cent of France's total imports of tropical logs were provided by Gabon up till the late eighties. In turn, Gabon's annual log production moved more or less in line with France's annual log imports until the late-1990s.

China replaces France as forestry partner
Since the late 1990s, China's power has waxed considerably and its appeal to many developing countries has increased correspondingly. It offers a model of development, rather different from that of the Western world, whereby explosive economic growth is combined with a strong central government and an indifference to democratic rule. China also seems to promise developing countries the opportunity for a mutually beneficial, peaceful and equalitarian cooperation. It is exactly this double Chinese identity — a great economic power and as well as being a developing country itself — which makes its model appealing for the Third World. Total exports to China (now up to 85 per cent of Gabon’s total exports7) chiefly represent an additional demand for Gabon forestry products. These levels (and rates of growth) of increment could never have been matched by its traditional key partner France.

An immediate consequence of the new situation of increased demand for Gabon forestry products, a declining log demand from France more than matched by high volume and increasing requirements from China, was intensification of extractive activities in Gabon. Log production increased above 6.3 million cubic meters in 2012 for the first time in history. Moreover, the range of extracted tree species has increased markedly as a result of less discriminating preferences of Chinese buyers. When France was the dominant driver of logging activities the number of species exported in volumes of 20,000 cubic metres and above was five (and tilted towards Okoumé). The number has now increased to twenty eight as measured in 2012 by Gabonese customs. Overall, it is Chinese importers of tropical timber have played a crucial role in determining the volume and the species mixture of tropical logs in the export-orientated tropical timber industry of Gabon.

The international increase in demand for logs and the attendant intensification of extractive activities in Gabon has come with a huge environmental cost for the country. Deforestation and illegal logging, particularly in rain forest regions, threatens to produce large scale loss of biodiversity loss. Illegal logging also causes serious financial hardship both to local people and to the economy of Gabon. The World Bank estimates at least 10 per cent of the world timber trade is illegal, resulting in a loss of USD15bn to developing countries each year and a colossal loss of revenue to Gabon in particular. Funds raised from illegal logging have also been used to fuel national and regional conflicts — in the Democratic Republic of Congo, Liberia and Cambodia. These are serious challenges.

China may be the largest importer of the Gabon timbers and logs, but is not lobbying for specific logging standards. China shows low interest in exporting its regulatory framework to third countries, even when its own domestic regulatory framework is quite advanced. The Chinese government does not miss a single occasion to underline its belief in the centrality of national sovereignty. China unrelentingly affirms the principles of non-interventionism, common but differentiated responsibilities on climate change (which should be reflected in Nationally Appropriate Mitigation Actions or NAMAs). China advocates the right of every country to pursue its own development pattern, balancing economic growth and environmental protection. These are clearly self-regarding principles which prioritize national interests rather than universal norms and standards.

Estimates of illegal logging in Gabon go from 20 per cent to over 70 per cent of all Gabonese timber exported to China. Without going as far as talking of 'China's Predatory Timber Trade' there is a widespread perception among local and international stakeholders that the environmental performance of Chinese companies is poor. It is generally accepted that the attitude of Chinese firms toward voluntary certification mechanisms of wood legality is skeptical, half-hearted and averse to confrontation, since they simply do not want to commit themselves to sustainable forest exploitation. Chinese operators, on the other hand, feel victim of excessive and biased scrutiny, due to their competing interests with European firms. They are keen to point the finger at past examples of substandard environmental practices by Western companies as evidence of the West's hypocrisy in now lobbying for protective action on environmental issues. That said, Chinese companies operating in Gabon, when speaking publicly about their operations, always do so positively and express a willingness to comply with rules when required. However, they also perceive the Gabonese regulatory framework as flexible and negotiable thus susceptible to manipulations. The possibilities for corruption are obvious.

For its part, the Chinese government and its embassies claim to require Chinese operators abroad to comply with local laws and regulations. Furthermore, they can point to a number of home-grown initiatives designed to raise the environmental standards to which operators are subject. For example, the Export Import Bank (Exim Bank) environmental policy, adopted in November 2004 (publicly available since April 2007 and upgraded with more specific guidelines in December 2012), states that environmental impacts have to be studied for a project to receive funding and that ‘once any unacceptable negative environmental impacts result during the project implementation, China Exim Bank will require the implementation unit to take immediate remedial or preventive measures, otherwise, it will discontinue financial support.’ In august 2007 China’s State Environmental Protection Administration (SEPA), the People’s Bank of China and the China Banking Regulatory Commission passed similar regulations. In June 2007, the Exim Bank also signed a memorandum of understanding with the International Financial Corporation on advisory services on environmental issues. Since April 2007 new regulations issued by the Minister of Commerce (MOFCOM) and State Forest Administration (SFA) requires all imported timber to be accompanied by ‘legal documents’ certifying its legal origin.

EU initiatives and global responsibility
The EU regularly asks China to shift from a self-centered attitude which ‘…strongly reflects well-perceived domestic interests and priorities..’ to ‘…an acceptance of a wider global environmental responsibility.’ It is widely-believed that Chinese actors can be more flexible than Western operators and that, if they wished to, they could show an unexpected capacity to adapt rapidly to new standards and practices. With regard to sustainable forest management, the introduction of high standards and strict regulations on the EU market could exert considerable market pressure on Chinese operators, providing a strong incentive to comply with Western standards.

EU initiatives at the international level (such as Forest Law Enforcement, Governance and Trade; FLEGT) can be useful entry points for legislative and governance reforms in timber rich countries such as Gabon. However, external effects of the EU domestic regulations and norms should not be underestimated and they are probably major sources of leverage for the EU. Imposing high standards and strict requirements on the EU market for hardwoods could demonstrate the actual commitment of the EU and its member states to the protection of the environment and in turn spur China to act more aggressively in the protection of the Gabon environment where it operates. It could also increase the legitimacy of the EU as normative power, showing that the EU and its member states do not limit themselves to advocacy actions but that they are willing to get engaged even at a cost to themselves. This could engender healthy competition if China sought to match these standards.

European member states declare themselves committed to environmental protection. Nevertheless, most of them delay concrete actions to tackle these issues and, instead, try to limit the impact of EU Commission initiatives. EU domestic regulations coupled with the size of the EU domestic market could be real drivers for a clean-up of China’s act and a reminder that the market is yet for all comers. Delays in implementing the EU initiatives undermine the potential leverage effect of the EU on third countries’ operators. The image of a two‐ or multiple‐speed environmental Europe (as in the case of Green Public Procurements - GPPs) and the gap between advocacy efforts and domestic commitment (as in the “Due Diligence” case), adversely affect the credibility of the EU as a setter of standards, as well as the willingness of other actors such as China to adhere to EU normative proposals.

Managing Gabon’s valuable forests
With global demand for wood and other forest resources on the rise - particularly from Asian markets – the Gabon forests have become a central economic resource. There is therefore an urgent need for China together with the EU to collaborate with key Gabonese institutions to strengthen management of Gabon forest resources and better address the access rights of its citizens in key areas, including:

  • sustainable forest management of production forests – including the necessary informational management infrastructure;
  • a multi-use approach to forest resources – away from a purely extractive focus;
  • decentralization of forest resource management through community forestry; and
  • Explicit conservation and ecosystem protection objective
  • Strengthening the technical expertise and capacity of the Gabonese government, ultimately allowing it to more effectively monitor and manage the nation’s forests.

A new vista of opportunities
As international attention turns towards the twin challenges of deforestation and climate change, Gabon—along with its Central African neighbors—faces a novel suite of opportunities related to the future of forest resource use and management. Through the right set of government policies, vibrant institutions and incentives especially from key industry players such as China, Gabon may be able to move from the choice between economic development versus environmental conservation and towards a future where these two objectives – whose convergence is mutually beneficial.

Notes:

1. Canby K, Hewitt J, Bailey L Katsigris E and Xiufang S ‘Forest Products Trade Between China & Africa, An Analysis Of Imports & Export’ Forest Trends, February 2008, p.2

2. ibid.

3. Other major Africa suppliers are Cameroon, Republic of Congo and Equatorial Guinea

4. Centre for international Forestry research

5. Wikipedia; The forest of Gabon

6. The employment distribution per sector in numbers of workers is as follows: state (60,000), forestry (32,000), oil (15,000), and other extractive industries (10,000) (The employment distribution per sector in numbers of workers is as follows: state (60,000), forestry (32,000), oil (15,000), and other extractive industries (10,000).

7. Calculated from ForesSTAT and Forestry Trade Flows (http://www.fao.org) accessed January 2013.

From issue no. 161, April 2013, pp.18-19

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