Timber Trade and Poverty Alleviation in the

The Timber Trade and Poverty Alleviation
Upper Great Lakes Region
June 2007
List of Acronyms
ACCO
ADARWA
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AEFOSKI
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AFABKA
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AMEKI
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ANR
APENB
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APJ
ASBL
BCC
BCDC
BIC
Bureau II
CDC
CENADEP
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CENEM
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CIAT
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CIF
COMESA
COMIFAC
COODES
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COVEB
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CPA
CPGL
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CREF Network
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DEMIAP
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DFID
DFO
DGC
DGI
DGM
DGRAD
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DRC
EAC
EAD / DAE
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ECCAS
ECNEF
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ENRA
EPB
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Association des Chauffeurs du Congo / Congo Drivers Association
Association des exploitants de bois du Rwanda /
Association of Logging Companies in Rwanda
Association des Exploitants et Etudes Forestières au Sud-Kivu / South Kivu
Association of Forestry Research and Logging Companies (DRC)
Association de Fabricants de Braise à Kasindi /
Kasindi Charcoal Manufacturers Association (DRC)
Association des Menuiseries de Kihumba / Kihumba Carpentry Association
(DRC)
Agence Nationale des Renseignements / National Information Office
Association Professionnelle des Exploitants et Négociants de Bois /
Professional Association of Timber Operators and Traders (DRC)
Agent de police judiciaire / Junior Criminal Investigation Officer
Association Sans But Lucratif / Not-for-Profit Association
Banque Centrale du Congo / Central Bank of the Congo
Banque Commerciale du Congo / Congo Commercial Bank
Banque Internationale du Congo / Congo International Bank
Bureau Militaire / Military Office (DRC)
Commonwealth Development Corporation
Centre National d’Appui au Développement et à l’Education Populaire /
The People’s National Education and Development Support Centre
Comité des Exploitants et Négociants du Bois en territoire de Mangina /
The Mangina Territory Committee of Wood Traders and Logging Companies
(DRC)
Comité International d’Aide à la Transition /
International Committee to Support Transition (DRC)
Cost, Insurance, and Freight
Common Market For Eastern and Southern Africa
Central African Forest Commission
Coopérative pour le Développement Economique et Social /
Economic and Social Development Cooperative (DRC)
Comptoir d’achat et de Vente du Bois à l’Exportation /
Export Timber Purchasing and Sale Office (DRC)
Comprehensive Peace Agreement
Communauté des Pays des Grands Lacs /
Community of the Great Lakes Countries
Network for the Conservation et la Réhabilitation des Ecosystèmes Forestiers
/ Conservation and Rehabilitation of Forest Ecosystems
Direction Militaire des Anti-Patrie /
Military Detection of Antipatriotic Activities (DRC)
Department for International Development
District Forestry Office (Uganda)
Direction Générale des Contributions / The Congo Inland Revenue
Direction Générale des Impôts / The Tax Office
Direction Générale des Migration / The Congo Migration Office (DRC)
Direction Générale des Recettes Administratives et Douanières /
General Directorate of Administrative and State Revenues (DRC)
Democratic Republic of Congo
East African Community
Entité Administrative Décentralisée / Decentralised Administrative Entity
(DRC)
Economic Community for Central African States
Environnement, Conservation de la Nature, Eaux et Forêts /
Conservation of Nature, Water, Forests and the Environment (DRC)
The Enzymes & Raffineries Company
Exploitation du port de Bujumbura / Bujumbura Port Authority
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FAO
FARDC
FDLR
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FEC
FID
FLEG
FM
FMP
FNI
FNL
FOB
FOPRADI
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FRCF
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FRPI
GA
GLHRP
GNU
GoSS
ICCN
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ICCO
IDEC
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IECCC
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INICA
IPMEA
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ITTO
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LRA
MARP
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MINITERE
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MLC
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MONUC
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NFA
NGO
NRM
OCC
OCHA
OFIDA
OGEFREM
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OGP
OIBT
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OPJ
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PIR
PSR
RDC
Food & Agriculture Organisation
Forces armées de la RDC / The DRC Armed Forces
Front démocratique pour la libération de Rwanda /
Democratic Front for the Liberation of Rwanda
Fédération des Entreprises du Congo / Federation of Congo Businesses
Forestry Inspection Division (Uganda)
Forest Law Enforcement and Governance
Forests Monitor
Forest Management Plan
Front for National Integration
Forces Nationales de Libération / National Liberation Forces, Burundi
Free On Board
Foyer pour la Promotion Paysanne et la Redynamisation des Actions pour le
Développement Intégral / Club for the Promotion of Farming and the
Restimulation of Integral Development Actions (DRC)
[Service] Fonds de reconstitution du capital forestier /
Fund for the Reconstitution of Forestry Capital (DRG)
Front des Résistances Patriotiques
Garantie d’Approvisionnement / Guarantee of Supply
Great Lakes Human Rights Program
Government of National Unity (Sudan)
Government of South Sudan
Institut Congolais de la Conservation de la Nature /
The Congolese Institute for Nature Conservation
Interchurch Organisation for Development Co-operation
Institut de développement économique /
Institute for Economic Development (Burundi)
Information, Education et Communication environnementale pour le
Changement de Comportement des communautés /
Environmental Information, Education and Communication to Instigate
Change in Community Behaviour
Initiative for Central Africa
Industrie, Petites et Moyennes Entreprises Artisanales / Ministry of Industry
and Artisanal, Small and Medium Sized Enterprises (DRC)
International Timber Trade Organisation /
Organisation Internationale des Bois Tropicaux
Lord’s Resistance Army
Méthode Accélérée de Recherche Participative /
Accelerated Participatory Research Method
Ministry of Lands, Environment, Forestry, Water, and Natural Resources
(Rwanda)
Mouvement de Libération du Congo / Movement for the Liberation of Congo
(DRC)
Mission des Nations Unies au Congo / United Nations Organisation Mission
in the Democratic Republic of Congo (DRC)
National Forest Authority (Uganda)
Non-Governmental Organisation
National Resistance Movement
Office Congolais de Contrôle / Congo Office of Law Enforcement
United Nations Office for the Coordination of Humanitarian Affairs
Office des Douanes et Accises / DRC Customs & Excise
Office de Gestion et Fret Maritime /
Office for the Management of Maritime Freight
Office of Global Programs
Organisation Internationale des Bois Tropicaux /
International Timber Trade Organisation
Officier de police judiciaire / Senior Criminal Investigation Detective
Police d’intervention rapide / Rapid Intervention Police or Force (DRC)
Police speciale de roulage / Special Haulage Police
Resident District Commissioner
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RCD-ML
RRA
RRN
RWE
SADC
SNEL
SOOCODEFI
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SPLA
SPLM
SPLM/A
SPRL
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TCB
TRANSCOM
TVA
UCD
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UNDP
UNESCO
UPDF
URA
VAT
VPA
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WCS
WNBF
WWF
WWF-PEVi
Congolese Rally for Democracy – Liberation Movement
Rwanda Revenue Authority
Réseau Ressources Naturelles / Natural Resources Network
Round Wood Equivalent
Southern Africa Development Community
Société Nationale d’Eléctricité / National Electricity Board (DRC)
Société des Coopératives pour le Développement de Fizi /
Society of Cooperatives for the Development of Fizi (DRC)
Sudan People’s Liberation Army
Sudan People’s Liberation Movement
Sudan People’s Liberation Movement/Army
Société Privée à Responsabilité Limitée, equivalent to a private limited
liability company
Terminal Container of Beni (DRC)
Transport & Communication (DRC)
Total Value Added taxes and duties
Union des Commissionaires en Douane /
Union of Customs Clearing Agents and Brokers
United Nations Development Programme
United Nations Educational, Scientific and Cultural Organisation
Uganda People’s Defense Force
Uganda Revenue Authority
Value Added Tax
Voluntary Partnership Agreements
Wildlife Conservation Society
West Nile Bank Front
World Wide Fund for Nature / World Wildlife Fund
World Wide Fund for Nature - Programme Education Virunga
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Contents
List of Acronyms ..................................................................................................................... 2 Contents .................................................................................................................................... 5 Figures ...................................................................................................................................... 6 1 Executive summary ........................................................................................................ 7 2 Introduction................................................................................................................... 10 3 Context of the study ...................................................................................................... 11 3.1 Poverty Alleviation and Natural Resources Trade ..................................................... 11 3.2 Forests and Conflict in the Great Lakes Region ......................................................... 11 3.3 Regional Political Relations ....................................................................................... 12 4 Methodology .................................................................................................................. 15 4.1 General Approach....................................................................................................... 15 4.2 Limitations.................................................................................................................. 16 5 Country Overviews ....................................................................................................... 17 5.1 Eastern Democratic Republic of Congo ..................................................................... 17 5.2 South Sudan................................................................................................................ 28 5.3 Uganda........................................................................................................................ 31 5.4 Kenya.......................................................................................................................... 36 5.5 Rwanda ....................................................................................................................... 40 5.6 Burundi ....................................................................................................................... 44 6 Trade .............................................................................................................................. 47 6.1 General View .............................................................................................................. 47 6.2 Detailed Trade Routes ................................................................................................ 47 6.3 And beyond the Bordering Countries? ....................................................................... 54 7 The Impacts of the Timber Trade on Poverty in East DRC ..................................... 57 7.1 Map of Key Players .................................................................................................... 57 7.2 Assessing the Economic Contribution of Timber Production and Trade ................... 61 7.3 Implications of the Timber Trade for Local Communities......................................... 64 8 Conclusions and Recommendations ............................................................................ 68 References .............................................................................................................................. 75 Front cover photo: With thanks to Madira Davidson, Green Solutions FIS Ltd, 2007
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Tables
Table 1: Number of logging companies, wood volumes extracted, and area of forest logged
per district in the Ituri forests, eastern DRC (2004-2006). ............................................. 18 Table 2 Number of logging companies and traders, destination of timber (in volumes), legal
status, and production volume of timber extracted in the Ituri Forests, eastern DRC,
between 2004 and 2006. ................................................................................................. 22 Table 3: Export value and timber volume per production type (2004, 2005, and first quarter of
2006). .............................................................................................................................. 22 Table 4 Concession area allocated, wood extraction volume, and export destination for
ENRA, in 2005 and 2006................................................................................................ 24 Table 5 Main taxes and taxable entities – DRC logging operations........................................ 25 Table 6 Main taxes and taxable entities – DRC transportation and local sale......................... 26 Table 7 Main taxes and taxable entities – DRC exports.......................................................... 27 Table 8 Value of timber imports from Sudan by destination, for 2005. .................................. 30 Table 9 Value of Ugandan imports of timber from DRC and Sudan (2002-2005). ................ 33 Table 10 Undervaluation of 12”× 2” Mahogany Timber at URA and DFO. .......................... 34 Table 11 Taxes and Taxing Entities – Uganda Imports (US$). ............................................... 35 Table 12 Kenya’s imports of sawn timber and regional exports of timber in various forms for
2005. ............................................................................................................................... 37 Table 13 Taxes and taxable entities – Kenya imports. ............................................................ 39 Table 14 Rwandan customs taxes and duties in 2007. ............................................................ 41 Table 15 Rwandan vehicle entry taxes in 2007. ...................................................................... 41 Table 16 Registered imports of wood products (in m3) into Rwanda. .................................... 42 Table 17 Annual imports of sawn wood into Rwanda from DRC . ........................................ 43 Table 18 Prices and cost for timber imported from Goma to Kigali in 2007. ......................... 44 Table 19 Prices and cost for timber imported from DRC to Bujumbura (Burundi) versus
timber sourced in Burundi, in 2007. ............................................................................... 46 Table 20: Timber exports from DRC to Upper Great Lakes region in 2006. .......................... 47 Table 21 Exports of African Mahogany sawn timber by selected African countries (2004). . 55 Table 22 Main international markets and prices of African Mahogany (March 2007). .......... 55 Table 23 India’s imports of timber from the Great Lakes region, 2005. ................................. 55 Table 24 United Arab Emirates’ imports of timber from the Great Lakes region, 2004......... 56 Table 25 Map of players involved in the timber supply chain, Great Lakes region,
CentralAfrica……………………………………………………………………………59
Table 26 The Steps in value added to timber .......................................................................... 62 Table 27 (a) Total Value Added (TVA) and Other Value Added (OVA) along various steps of
the timber supply chain, by country; (b) TVA and OVA along the timber supply chain,
by country: steps 1,2,3 relate to DRC, and step 4 to the importer country. ................... 63 Figures
Figure 1 Recorded imports of sawn timber (HS4407) from DRC by Kenya, 2001-2005. ...... 37 Figure 2: Timber production and trade routes in the Upper Great Lakes Region, Central
Africa. ............................................................................................................................. 48 Figure 3: Regional timber production and trade routes ........................................................... 49 Figure 4: Regional timber production and trade routes ........................................................... 53 Page | 6
1 Executive summary
This report focuses on the trade in timber produced in the eastern DRC and Southern Sudan 1
and traded with neighbouring countries, examining the trade patterns and players involved.
The objective of the study is to identify what actions can be taken in order to improve the
contribution of trade to the stability and economic development of the region. This study
should be considered against the backdrop of weak governance and very low levels of
capacity within the DRC itself and neighbouring countries to licence and monitor production
of timber, monitor trade, collect data on trade volumes, timber species and value for both
forest management and revenue collection purposes.
An overview of the timber trade volumes and routes was compiled through field work, which
involved discussions with traders, transporters, forestry officials and local communities that
depend on the forest, together with the collection of data at border crossings and at five main
markets in DRC and Uganda.
It was concluded that almost all commercial timber exploitation in eastern DRC is nonindustrial logging using artisanal techniques such as pit sawing. Transport of the planks
produced is by head load to the roadside and subsequently by truck to the local markets or to
the border. Commercial cutting and trade in eastern DRC forests is heavily focused on a few
particular high-value species, notably African mahogany (Entandrophragma sp., known as
Sapele, or Libuyu) and African teak (Milicia excelsa, formerly Chlorophora excelsa, also
known as Iroko). A large proportion of the high-value commercially harvested timber is
exported in the form of rough-sawn un-dried planks (around 95%), with little or no value
added. Most of the timber is exported from eastern DRC to Kenya and Uganda in
approximately equal share, and is consumed in the cities of Kampala and Nairobi.
This research revealed that approximately 50,000 m3 of timber are exported each year from
eastern DRC, and that almost all of it is consumed in Uganda and Kenya. It was estimated
that in order to generate this volume, approximately 250,000 m3 of standing volume 2 must be
being cut each year in eastern DRC forests. Most of the timber is sourced from three main
areas:
1) The Ituri forests around Mambasa,
2) Riverine forests further to the north-east of the country, and
3) Closed forests around Walikale (Goma) and Itombwe (Bukavu).
The lack of equipment is currently restricting the scale of cutting in closed forests in eastern
DRC to within a limited distance of established roads. Where equipment is available it
continues to be provided or pre-financed by predominantly Ugandan negociants, or
merchants. Supplies of easily accessible major commercial species are increasingly scarce and
farther away from the border, leading to price increases. Logistics for producers and traders
are also difficult.
While harvesting fees and official export taxes in eastern DRC are relatively low, other
official and unofficial taxes to cut, transport, and export or import timber are considerable.
1
Timber production in Southern Sudan however is minimal and consequently this area does not figure greatly in
the results of the study.
2
A typical conversion rate used internationally for tropical sawn timber to round wood equivalent is × 1.8
(equivalent of 56% recovery rate). This means 90,000 m3 of standing volume yields 45-50,000 m3 of sawn timber.
In fact, the 1.8 conversion rate is based on use of industrial harvesting and cutting techniques; while we were told
by local sources that recovery rate for timber being cut in eastern DRC using artisanal methods could be as low as
20%. If this rate is used, it gives the much higher cutting estimate of around 250,000 m3.
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Almost all of the value which remains in Congo is retained by military and government
officials. Better regulation and tax collection on trade could enhance revenues to the State, but
in themselves could, if unduly high, actually reduce the net ‘margins’ on the trade and leave
even less revenue for communities engaged in the supply chain.
The trade does generate some employment for different groups, almost exclusively men on
the production side while some women are involved in the sale and marketing side of the
trade, though no statistics are available. Outside of the employment income it is clear that
there are little or no returns to local communities. The anarchic exploitation of forest
resources leads to a qualitative and quantitative deterioration of forest resources. Considering
the value and nature of the resource, as well as perceived rights of ownership, the continued
supply to the trade under current practices is eliminating alternative future development
options. There is some evidence that unofficial taxes on timber continue to fund armed groups
in eastern DRC.
In conclusion, it is clear that trade in the DRC’s natural resources has a role to play in poverty
alleviation. However, presently those players with personal interests and a strong influence on
policies and institutions ensure that the current systems are kept in place. The current situation
is thus responsible for numerous conflicts, and all the while the local communities are pushed
to one side. It would appear that the poverty suffered by communities which still depend
largely on the forest resources will not be alleviated to any significant degree, if at all, by the
timber trade.
It remains essential that timber sector and trade reforms take place urgently given the
currently unsustainable rates and inequitable nature of exploitation of the forest resource base
and distribution of the ensuing benefits.
Handled properly, trade in timber could become a pillar for peace and stability. On the other
hand, attempts to expand the trade before adequate measures to control it have been put in
place may instead serve to compound existing problems of illegality, unsustainability and
inequity. In this context, any and all caution exercised now will benefit the country, the region
and the global environment as a whole.
It is critical that the levers for reform are used in the correct order. If the basis for the current
trade in timber or any other resource is inequitable there seems little point in improving
conditions for that trade, such as better transport routes, and quicker border crossing times.
These initiatives will simply entrench current inequalities, corrupt or failing systems and may
not contribute to poverty alleviation.
A suite of measures therefore needs to be applied in order to increase the forest sector’s
contribution to local development:
• Detailed analysis of the legal framework for both forest resource allocation in relevant
provinces of DRC and trade, taxation and regulation, to identify areas where
improvements and clarification are required to provide the right incentives for sustainable
and equitable resource use.
• Action based on the research above to clarify and complete the legal framework for
timber production and trade, including:
o A clear legally based, and equitable allocation of rights to control, and
harvest forest resources at the community level;
o Clearly defined land use planning and forest management objectives at the
provincial and district level;
o Procedures for regulating and verifying production to supply the trade.
o Simplification of the taxation and trade regime;
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•
•
•
Dissemination of information on established (improved) procedures governing production
and trade among:
o Traders, processors and exporters;
o Relevant departmental officials, especially tax authorities and criminal
investigators concerned with forest and timber trade, customs authorities;
o Communities and other resource owners.
Increased cross-border cooperation between DRC and Uganda and other border countries
as well as Uganda and Southern Sudan through:
o Engaging the relevant government bodies to develop mutually recognised
legality standards for timber export/import;
o Cooperation in the design and processing of customs forms and paperwork –
drawing on other international models from COMESA countries;
o Promotion of basic procurement and chain of custody standards, which
commit the major buyers of timber (both state and private) to procure timber
only from ‘non-controversial’ 3 sources, and in turn oblige their suppliers to
demonstrate that such standards have been met;
Improving application and respect for existing legal and procedural mechanisms by:
o Increasing the role of MONUC in maintaining border security;
o Implementing external monitoring and support programmes for major border
crossings within a security envelope where necessary.
It is unquestionable that the State machinery needs to be improved and that taxes and other
fees have to be collected more systematically, but there is also a need to ‘regularise’ the
situation of the millions of people currently living in the areas of timber production,
especially in the case of forests. Without secure tenure over forest resources, and in absence
of the right incentives, local people are not going to invest in sustainable forest management.
Without a functioning State apparatus to develop and enforce the currently weak forest
legislation, local people are not going to be motivated to defend these resources for long term
development. This situation results in the trade being supplied with timber from unsustainably
managed sources and delivers poor returns to both the State and local people.
3
‘Non-controversial’ here is used in reference to the FSC non-certified controlled wood standard.
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2 Introduction
The current study was undertaken within the context of the UK Department for International
Development’s (DFID) programme on the trade in natural resources from the DRC. The
programme is based on the premise that the country cannot derive value from natural
resources until they are sold on international markets in a regulated and transparent way.
As part of a consortium of NGOs, Forests Monitor evaluated the timber trade in the Upper
Great Lakes region 4 , and assessed how it can be influenced to improve governance over
timber resources. Other members of the consortium are the POLE Institute, INICA and
PACT, who are dealing with mining in the region.
This study focuses on trade between eastern DRC and nearby countries: South Sudan,
Rwanda, Burundi, Uganda and Kenya. It attempts to assess official timber production – that
which is catalogued in official documents 5 – as well as informal production and trade figures,
and the level of ‘artisanal’ timber production in eastern DRC 6 .
The study further distinguishes between ‘informal’ and ‘illegal’ logging, based on the fact that
certain government services record not just the volumes of timber crossing the borders legally
but also the volumes of timber intercepted while trying to cross borders illegally. Thus the
figures presented include both legal and illegal volumes. The volume of illegal timber is
sometimes twice that for legal timber 7 (FRCF Beni in 2004).
This report is made up of 6 parts. Chapter 3 describes how natural resources are used in a
conflict zone and the political associations between countries in the Great Lakes region,
Chapter 4 describes the methodology used, Chapter 5 outlines the timber trade country-bycountry, including the production zones, volumes, taxation and export procedures. Chapter 6
summarises the various routes for exporting timber out of eastern DRC to bordering countries
(South Sudan, Uganda, Rwanda and Burundi) and the international connections. How poverty
and conflict impact of DRC’s timber trade is summarised in Chapter 7, which includes a
presentation of the key players and the economic, social and environmental gains for each of
these. Recommendations and conclusions are provided at the end of the document.
4
Including eastern DRC, Uganda, South Sudan, Kenya, Rwanda and Burundi.
Several government departments keep statistics on illegal trade!
6
In fact several research studies have looked at DRC timber production linked to concession systems, but to our
knowledge none cover the much more ‘informal’ – or artisanal – pitsaw production method.
7
In this case, financial losses amount to US$36,180 for 1,836 m3 intercepted during illegal transportation. For its
part, the NFA intercepts around 2,500 m3 annually, or 5% of officially recorded timber movements.
5
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3 Context of the study
3.1 Poverty Alleviation and Natural Resources Trade
Africa is the only continent to have grown poorer in the last 25 years (Commission for Africa,
2004) and is plagued with more conflicts than any continent 8 , many of which are tied to the
trade in natural resources 9 . Corruption costs the continent US$ 148 billion dollars per year
(African Union) and poor accountability for natural resources is a symptom of poor
governance (Africa Commission). Every year, US$ 10-15 billion are lost globally through
illegal logging (World Bank). In DRC, industrial logging has contributed little to poverty
alleviation (World Bank, 2006). Furthermore, illegal logging has fed into regional conflict
and played a detrimental role in DRC and the region’s social and economic development 10 .
Weak governance and conflict render the sustainable management of DRC’s forests a distant
goal. The Government of DRC recognises that forestry activities develop mainly through
unofficial channels (Ministry of Planning, 2000).
The principal logging areas in DRC are Orientale, Equateur and Bandundu provinces, from
which companies are exporting timber westwards via the river systems, the Central African
Republic (CAR), and Cameroon (FERN, 2006). Timber movement in the eastern DRC
however - North and South Kivu, the east of Orientale - differs from the rest of the DRC 11
because it is eastwards, to and through the countries of East Africa.
The majority of the timber in eastern DRC is exported over land to Burundi, Rwanda, Uganda
Sudan, and Kenya, for use in the construction and furniture sectors. In turn, eastern DRC
imports machinery, fuel and other inputs from its eastern neighbours.
3.2 Forests and Conflict in the Great Lakes Region
The African Great Lakes is a region where conflict, instability and structural violence have
long been interlinked with the natural resource sector. This relationship is set against a
landscape beset by corruption, porous borders and weak government, which serve to undercut
legitimate trade and undermine peace and sustainable economic development.
Forests and conflict are often entwined 12 , forests represent a strategic and economic incentive
for war, and forest dwellers are not protected or included in development initiatives (FAO,
2005, 2007). In the forestry sector, this is compounded by flawed policies and a government
infrastructure that serves to facilitate illegal logging, fraud and conflict.
8
The Heidelberg Institute for International Conflict Research estimates that in 2006, sub-Saharan Africa witnessed
seventy-four political conflicts of which two were wars, thirteen were severe crises and fifteen were on a high level
of violence (HIIK, 2006).
9
Some examples include Angola; Liberia; Sierra Leone; the Nigerian Delta; Sudan; the Democratic Republic of
the Congo and Congo Brazzaville.
10
Various reports including those issued by Rainforest Foundation et al. (2005) and Greenpeace (2007).
11
A general description of the DRC’s timber sector is provided on the forests Monitor website. See
http://www.forestsmonitor.org/en/Timber_in_E_DRC_and_S_Sudan
12
FAO cites the following countries as having conflict and forests in common: Angola, Bangladesh, Bosnia and
Herzegovina, Cambodia, Central African Republic, Colombia, the Congo, Côte d’Ivoire, the Democratic Republic
of the Congo, Guatemala, India, Indonesia, Liberia, Mexico, Mozambique, Myanmar, Nepal, Nicaragua, Pakistan,
Peru, the Philippines, Rwanda, Senegal, Sierra Leone, Solomon Islands, Sri Lanka, the Sudan, Suriname and
Uganda.
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In eastern DRC timber extraction decreased during the conflict, mainly due to poor transport
networks. Nevertheless, rebel groups managed to extract timber near transport systems and to
export most of the timber to neighbouring countries and to Europe or South-East Asia,
through Kenya’s Mombasa port (ARD, 2003).
Timber from the Ituri district has recently been traded with Uganda in exchange for arms and
ammunition (UN, July 2006). In 2005, the International Court of Justice found that Uganda,
which imported the greatest amount of eastern DRC’s timber, was responsible for plundering
DRC’s natural resources, including timber, and for committing human rights abuses against
the Congolese during the war. Numerous other reports have highlighted the role of natural
resources in conflict and instability (UN, July 2006).
Today, eastern DRC’s lack of transport networks makes it easy for national, Ugandan and
Rwandan armed groups to enter the forested areas with relative impunity: the majority of
Uganda’s Lord’s Resistance Army (LRA) are now in South Sudan and eastern DRC, which
also currently has between 8,000 and 9,000 Ugandan and Rwandan rebels within its borders
together with 5,000 to 8,000 Congolese militia (International Crisis Group, 2007).
The trade in conflict products, including timber, is therefore able to exist because there is a
demand for the products and no adequate controls to hinder their import. In order to curb the
destructive correlation between poverty, conflict and resources, the sources of regional and
international demand must ensure that goods imported are not contributing to poverty and
conflict. However, importing countries’ trade policies often work against producer countries
and in order to change this negative relationship, importing countries must commit to
breaking this trend and changing their own trade policies.
Given the endemic ties between resources, corruption and conflict in the upper Great Lakes
region, comprehensive steps must first be taken to ensure that forests will not be exploited or
mismanaged to the detriment of local communities and the environment, before increasing the
economic activity in the area. This means looking at the overall development situation and
applying the levers for reform in the right order.
Generally there are governance problems that impact on forestry rather than forest governance
problems. This means weight should be thrown not only behind efforts to achieve wider
accountability and equity in decisions that affect those concerned, but also behind efforts that
recognise the key advantages and “levers” that the forest sector has in contributing to that
wider reform.
From the perspective of forests and forestry one could argue that getting the right sequence in
governance improvements is vital, and that for example work must be done to secure land
tenure to ensure land-users are encouraged to collaborate with each other or the State. Equally
it is clear that the land and resource allocation process is as important as any of the resulting
allocation arrangements (Forest Governance Learning Group, IIED, Dec 2004).
3.3 Regional Political Relations
Until very recently, political relations in the Great Lakes region have been poor, particularly
between the DRC and Rwanda and Uganda 13 . There have been long-standing allegations of
Congolese support for Rwandan and Ugandan rebel groups based in eastern DRC, while
Rwanda and Uganda have mounted military interventions into the DRC in both 1996,
primarily to oust President Mobutu Sese Seko, and 1998, during Africa’s ‘first world war’.
13
An overview of sub-regional conflicts is provided on the Forests Monitor website, see
http://www.forestsmonitor.org/en/Timber_in_E_DRC_and_S_Sudan.
Page | 12
Many of the actors in the war in DRC in the late 1990s were motivated by a desire to control
the country’s natural resources. In a series of reports between 2000 and October 2003, the
UNSC Experts Panel for DRC concluded that mineral exploitation was funding the warring
factions. Rwandan, Ugandan, and Zimbabwean army officers as well as the Congolese elite
grew rich from the war (Van Woudenberg, 2006). LRA activities in South Sudan and eastern
DRC have also heightened tensions with Uganda.
Relations in the region have improved in recent years, but remain fragile. For example,
Rwanda has offered to assist the DRC in facilitating negotiations with Laurent Nkunda in
North Kivu, which is believed to be a sign of Rwanda’s commitment to the Pact on Security,
Stability and Development in the Great Lakes Region (PSSDGLR), signed in Nairobi in
December 2006 14 . However, there are concerns that instability in the DRC, as witnessed by
the clash between government military forces and opposition militias in Kinshasa in midMarch 2007, could undermine its regional commitments established at the 2nd International
Conference on the Great Lakes and the Tripartite Plus One Joint Commission. The risk
includes a failure to implement security commitments in eastern DRC, or to fulfil regional
economic and infrastructure integration planning (GLCSS, 2007).
It has been recommended that engagement with the UN’s new Peace Building Commission
(PBC)15 may not only consolidate the political, economic and security processes in post-electoral
Congo, but also assist and co-ordinate international support for DRC. Furthermore, it has been
suggested that the UNSC should mandate MONUC to consult with key members of the
international community engaged in the region – notably its five permanent members, as well as
Belgium, South Africa, Angola, the EU and the AU, and the new Congolese institutions – in order
to establish and implement an international mechanism that would foster stability and consolidate
democracy in Congo. At the same time MONUC has been encouraged to promote dialogue and
support implementation of joint policies and regional agreements between the governments of
DRC, Uganda and Rwanda, notably in relation to the disarmament, demobilisation and
reintegration (DDR) of foreign-armed groups in the region (GLCSS, 2007).
Trade between Southern Sudan and Uganda is expected to double in 2007 when, following
the signing of a trade co-operation agreement, Uganda opens a trade centre in Juba to assist
trade co-ordination with Sudan. At present there is no formal trade agreement between the
two countries. However, a sizeable Ugandan workforce of approximately 5,000 is present in
Southern Sudan (Nakkazzi, 2007). On 09 February 2007, Rwanda and the Government of
South Sudan signed a co-operation agreement aimed at strengthening bilateral relations. GoSS
Minister of Regional Cooperation, Benjamin Barnaba Marial, said that South Sudan, a
growing economy, still relied on petty trade to boost its economy and that GoSS intended to
construct an oil refinery in Southern Sudan (Kazooba, 2007).
Uganda is expected to benefit greatly from the enlargement of the East African Community.
Exports to regional neighbours are primarily agricultural products. Trade between Uganda
and COMESA States has doubled in the last five years and is expected to improve. Uganda’s
biggest export markets are Kenya and the DRC, where trade has grown from US$ 9 m to
US$ 60 m per annum. Since January 2005 and the signing of the peace agreement between
the Khartoum Government and the SPLA/M, exports to Southern Sudan have increased. This
was also assisted in part by the withdrawal of the LRA rebels from South Sudan (GLCSS,
2007).
14
Commentators at the time said that the December 2006 Nairobi conference was the result of a growing
awareness of the need for regional approaches towards sustainable peace in the region (People’s Daily Online,
December 2006).
15
Created in December 2005, the PBC is a joint commission comprising current and potential donors, including the
World Bank, the EU, the AU, UN specialised agencies, bilateral donors and civil society.
Page | 13
Approximately 34% of Rwanda’s imports originate in Africa, 90% of which are from
COMESA countries. Exports continue to lag far behind imports. Rwanda’s landlocked
location necessitates heavy highway infrastructure maintenance, and good transport linkages
to neighbouring countries, especially Uganda and Tanzania, are critical, though transportation
costs remain high and, therefore, burden import and export costs.
Page | 14
4 Methodology
4.1 General Approach
The aim of this study is to better understand how the timber trade is organised in the Great
Lakes region, by investigating:
1. The production and sale of timber in eastern DRC, together with their impacts on
poverty reduction at the local level. Impacts can be positive, such as the economic
spin-offs for local communities and the development of producer and trader networks
such as APENB and the Confédération du Monde des Artisans. Impacts can also be
negative, for example the use of timber revenues to finance conflict, and the nonapplication of forestry policies.
2.
The contribution that timber production and sale make to the regional economy.
More specifically, this study provides:
•
•
•
An analysis of the nature and vitality of the timber markets and commercial
transactions at the regional and international levels, as well as the impacts on local
development;
A ‘knowledge base’ of the stakeholders in timber production and trade, including
how they are organised and their relational strategies;
A general understanding of the timber trade in relation to its economic and political
context, as well as on current laws and existing institutional mechanisms, in order to
suggest ways of improving them.
The principal aim of this study is to recommend a set of integrated policies to increase
the contribution of the timber trade to regional sustainable development.
This study uses a multidisciplinary approach - comprising socio-economics and politics - to
analyse the linkages between local, regional and international scales of intervention. Partners
based in the Great Lakes Region, together with international consultants were mobilised to
carry out desk reviews, field observations, and hold semi-structured meetings with various
stakeholders (government and administrative representatives; local and customary authorities;
companies associated with timber extraction, processing and commercialisation; and member
of the civil society), as well as collect and analyse data on forests and taxes.
With the agreement of the DFID in December 2006, Forests Monitor (FM) proceeded as
follows:
- January: First Ugandan and DRC field trip; launch workshop with local CREF Network
partner; commence field investigations in DRC;
- February: Second field visit to Uganda and launch of field investigations by local partner,
Green Solutions;
- March:
Third field visit to DRC and finalisation of analysis by the CREF Network;
- April:
Return of all partner reports and analysis by FM.
Page | 15
4.2 Limitations
Given the limited time available to conduct the study, focus was centred on:
- Natural forests: timber demand is currently met from natural forests, not plantations;
- Wood in its commercial context: this study did not look at non-timber forest products, fuel
wood or charcoal, although the latter constitutes the greatest proportion of woody biomass
consumption.
The size and production volume of the fuel wood and charcoal sector in eastern DRC is not
well known, but they are probably larger than those for the timber sector (formal and
informal), as this is the pattern observed for the country as a whole. It is also likely that the
wood and charcoal sub sector employs many more people than the timber sector. There is no
direct competition between the timber, fuel wood and charcoal sectors, as the latter
concentrates on different wood species, namely Tuna, Albiziya and Nyarwire (CREF, 2007).
Nevertheless the enormous demand for fuel wood and charcoal probably exerts a strong
pressure on the resource base shared with the timber sector. The wood and charcoal
sub-sector merits its own study, but we present some general data on the Forests monitor
Website (http://www.forestsmonitor.org).
In addition, the trade transactions recorded by government officials only give a partial
overview of the timber trade, because:
1. There is much local trade in timber that is never subject to official documentation;
2. In some Districts, traders are not sending their duplicate copies of declarations/figures
to the headquarters at the Provincial level 16 ;
3. There is a considerable amount of illegal harvesting and trade that has no official
documents;
4. Even when there are official figures on trade transactions, timber volumes are often
under-stated;
5. The most recent figures seem to be better kept and/or administrations find it easier to
locate them.
For this reason, all the statistics and estimates listed in this document should be treated with
caution; the degree of variation between the various official and unofficial sources is such that
the cross-checking of sources always proves difficult.
16
This laxity of reporting indicates many problems that need to be addressed in the future.
Page | 16
5 Country Overviews
5.1 Eastern Democratic Republic of Congo
5.1.1
History of Forestry Legislation and Timber Trade
When war broke out in 1996, timber concessions in central and western DRC were producing
large amounts of valuable Afromosia and African mahogany wood, which was exported via
the Congo River to the west. Only a few thousand cubic metres of commercial timber was
sourced from eastern DRC and exported via the Great Lakes, mainly by a Belgian company
called ENRA.
During the war most companies in central and western DRC closed their operations.
Meanwhile, rebel groups and occupying armies began extracting timber from eastern DRC,
and exporting it through the Great Lakes. Since the transition to peace, timber export to the
west has risen again. Occupying armies have withdrawn from eastern DRC, but rebel groups
may still fund their operations through the sale of timber.
In 2002, the DRC government developed the Forest Code and introduced a moratorium on
issuing new concessions, or granting extensions and renewals, until a legal review of existing
concessions was completed. Nevertheless, one quarter of the country’s rainforest is still
locked in concession agreements 17 .
The Forest Code makes reference to local populations, but stakeholders, particularly local
communities and civil society organisations, have had a minimal role in further development
of these forest policies.
Forests and Forestry in Eastern DRC
The forests in eastern DRC are located in the provinces of North and South Kivu and the
north-eastern part of Orientale province, and they have been heavily exploited over the past
ten years. Now almost all of the area either side of the Beni-Mambasa road as far as Teturi,
70 km to the north, has already been logged at least three times over. Many small-scale
logging companies have been forced to migrate north to Mambasa and Irumu districts in
Orientale.
The most important forest resources, accounting for 80% of timber exports from eastern
DRC, are now in Ituri close to Mambasa, and further north.
•
•
Mambasa (Orientale) is heavily exploited already: most of the production comes from
Biakato, Lwemba, Teturi and km 26 18 . The centres of production are based along the
Beni-Mambasa road, timber is transported to Beni.
Beni’s (North Kivu) most extraction is situated around Mabalako forest (50%), Mamove
forest near Oicha (40%) and Erengeti (10%) 19 . Some forests remain in the Lubero and
17
Recent Greenpeace investigations have revealed that permits covering 294,000 ha of forest were awarded in
contravention of the moratorium. Illustrating comparable setbacks is the fact that the operating company, Industrie
de Transformation de Bois (ITB) is operating without a forest management plan and without the oversight of
forestry officials designated to monitor logging operations. The fact that the timber has been exported to France,
Belgium and Italy further indicates that the lack of supervision reaches across the chain of custody
(Greenpeace, 2007).
18
Km 26 is a logging junction along the Beni Mambasa road.
Page | 17
•
Beni areas. Timber extraction also occurs in the Watalinga forest on the Ugandan side of
the border 20 .
Irumu (Orientale) is exploited less although this is likely to increase due to the recent
restoration of the Beni-Mambasa road 21 . Eighty per cent of the timber extracted in Irumu
is transported to Beni and 20% to Bunia.
Table 1 Number of logging companies, wood volumes extracted, and area of forest logged
per district in the Ituri forests, eastern DRC (2004-2006).
Year
2004
District
2005
2006
Logging
Wood Area (ha) Logging
Wood
companies volume
companies volume
(m3)
(m3)
Area
(ha)
Logging
Wood
companies volume
(m3)
Mambasa
70a
4,311 a
14,055 a
75 a
667
9,050
15 b
Beni
50 a
2,849
6,335 a
50 a
570 a
6,800
51
a
a
a
a
a
5,080
Irumu
25
800
a
3,300
53
2,070
Area
(ha)
6,000
2,865
b
Sources: ECNEF Beni, FOPRADI, ECNEF Mambasa.
There are only 15 forest logging companies registered with ECNEF in Mambasa, despite the
fact this is the zone with the highest levels of timber extraction in eastern DRC. In addition, of
these 15 companies, five have documents which are fully in order, six have documents that
are ‘partly in order’, and four have local cutting rights (documents issued by local leaders and
village chiefs). The Great Lakes Human Rights Program (GLHRP, 2006) estimates the level
of undeclared timber cutting at 25%. The number of logging companies recorded today has
dropped significantly since 1998.
The regions below provide the remaining 20% of timber exports from eastern DRC:
•
Walikale - Kahuzi Biega forest area:
Includes the forests along the road Walikale – Bukavu, plus the forests of Kabale and
Kahuzi-Biega National Park west of Bukavu (Fig. 4). The main source of timber within
this broad area has traditionally been the Walikale road zone. Logging began in this area
close to the where the road joins the main Bukavu-Goma route, but the accessible, highvalue species are now found only to the north of the town of Hombo.
Walikale still has a significant reserve of timber. Logging is at present constrained in the
east by armed bands and by logistical difficulties, though the latter will soon be
greatly reduced by the forthcoming opening of the Masisi-Walikale road. Cutting and
trade in timber from this area may increase dramatically in the future when the road
opens, particularly if the security situation further stabilises.
19
Some forests occupying the Lubero territory were cleared to establish grazing areas, farms and field-sourced
wood (Ministry of Planning, 2000).
20
Before February 2007, no transport route existed towards Beni, but now a bridge has been rebuilt and the road
restored. It is apparent that with the improved road infrastructure there has been a significant increase in the
exploitation and subsequent trade in timber with Uganda.
21
The next zone likely to be exploited is the Bafwasende region in the Orientale Province.
Page | 18
•
Itombwe forest area:
Is located in South Kivu (Figure 4), and exploitation is the highest in the Mwenga
District, Fizi, and Uvira. It is 3,680 km2, and was made a Nature Reserve under
Ministerial Decree 038/CAB/MIN/ECN-EF/2006 22 . Itwombe is occupied by armed
bands, and logging is carried out with manual felling and pitsawing methods.
Eastern DRC is experiencing strong pressure from small-scale forest sector activities, and
there is currently just one industrial concession, to a company called ENRA. The network of
national parks and forest reserves 23 suffers from illegal encroachment, poaching, timber
harvesting, and firewood collection.
Further sources of human pressure include the influx of Rwandan refugees, population growth
(FAO, OGP, 2006), population displacement (Ministry of Planning, 2006), and the demand
for timber for construction.
Local populations practice a subsistence economy, their average annual revenue being less
than US$ 400 per inhabitant (Igumba Mussa, 2004). The forest peoples hunt game for meat,
as trophies, and to sell live at markets; they farm, practicing slash-and-burn agriculture and
agropastoralism; carry out small-scale mineral extraction, which prior to 2000 comprised gold
at low altitude, coltan at higher altitudes, cassiterite; and extract wood for house building, sale
to urban populations, for charcoal production and for fuel. They also gather various nontimber forest products such as honey, medicinal plants, and mushrooms. In 2004, research
carried out by Igumba Mussa showed that 43% of the population admitted accessing the
Kahuzi-Biega Park fraudulently.
Eastern DRC’s network of national parks and forest reserves has suffered considerably from
illegal encroachment, poaching and timber harvesting and firewood collection in recent years.
A survey of national parks in North and South Kivu conducted in 1994 concluded that
Virunga National Park had suffered massive deforestation and timber removal, mostly for
charcoal and firewood. In 2004, research carried out by Igumba Mussa found that 43 of the
local populations admitted to illegally entering Kahuzi-Biega national park.
Local Authorities readily acknowledge the frequent violations that occur in protected areas,
including the harvesting of wood for cooking and construction, and clearance of forests for
agriculture. According to the Government, “massive deforestation and tree clearance [is
happening] in the Virunga National Park, with all the associated ecological and tourismrelated consequences one would expect” (Ministry of Planning, 2006).
Since 1994, this high level of human pressure was heightened further by the influx of
Rwandan refugees and the ravages of various wars. This has been compounded by high rates
of population growth (FAO; OGP, 2006.) and high level of population displacement (Ministry
of Planning, 2006). The demand for construction timber is very high from urban centres such
as Bukavu, Goma and Beni. Southern Kivu is supplied by Rwanda and Burundi while North
Kivu would appear to receive more localised supplies from plantations in the Masisi, Lubero
and Rutshuru territories.
22
The Decree would appear to have been signed by the Minister, and not by the President, rendering it null and
void.
23
In Southern Kivu, the Virunga National Park covers a surface area of 17,000 ha, with 13,000 ha of hunting
grounds and 100,000 ha of game reserve. In the Northern Kivu province, the Virunga National Park covers a
surface area of 741,000 ha, the Kahuzi-Biega National Park in the Walikale territory covers 148,000 ha, and the
Maiko National Park covers 108,000 ha in the Lubero territory (ICCN; Ministry of Planning, 2000).
Page | 19
5.1.2
Timber Extraction and Processing
ENRA - Beni is the only company in eastern DRC exploiting an official forestry concession.
The majority of cutting for export is artisanal, and there are three major classes of operators:
- The independents, who have their own forestry tools that they rent during the agricultural
season;
- The contractors (including religious institutions) who hire pitsawyers and/or ‘chainsaw
operators’;
- The pitsawyer cooperatives and associations, which work together to buy production tools
and/or to remove logs more easily.
Forest exploitation should not proceed without a permit from the customary chief, notables
and other eligible parties (land chiefs), usually given in exchange for money and a gift in
kind.
Selective cutting is the norm, with the largest diameter trees of the most valued species
targeted first. Only three species are exported in significant volumes: 1) African mahogany
(Entandrophragma sp.) known in DRC as Libuya and in international trade as Sapele, Punga
or African Mahogany, 2) Muvule (Milicia excelsa) formerly Chlorophora excelsa, known in
international trade as Iroko or African Teak, and 3) Linzo (Khaya anthotheca) known
internationally as Acajou.
The trees are cut into balks and timber boards in the forest itself, using modified chainsaws,
which results in losses of 15-20% of the harvested wood volume. The chainsaw operators are
usually Ugandan, while the manual labourers are local Congolese. Timber boards are and
transported by foot or bicycle to the nearest road by young men called ‘bombeurs’. Apart
from these bombeurs, the local communities are hardly involved in the timber sector at all
(GLHR, 2006).
The operator can subsequently rent a vehicle and transport the timber himself to sell it, or he
sells the timber at the roadside to an intermediary.
Local traders provide chainsaws and fuel, and each trader may control one or two teams. Until
recently, many Ugandan traders would travel to the source areas and manage the cutting and
transport to the border themselves. Now increasingly the Ugandan traders are instead
allowing local Congolese entrepreneurs to handle this side of things, though the Ugandan
traders continue to provide financing and equipment, including chainsaws, fuel and jacks.
Rwandan traders bringing timber in through Goma conduct a similar system of pre-financing.
Though much of the timber is pre-purchased by the traders who provide the financing, there
are also a number of independent operators who bring timber to the border and sell it there
speculatively.
Two types of trade flows out of eastern DRC are thus possible: the timber is exported
eastwards via Bunia in Kasindi, or via Rutshuru in Goma; or is used locally by small timber
processing companies to produce furniture and other products. These furniture companies do
not produce for the export market. Depending on the quality of the wood, the timber may be
sold as sticks, timber boards, panels, beams, balks, planks or rafters; timber boards and panels
are sold mainly in Goma’s markets (there is an increase in demand due to housing
construction and furniture manufacture).
Most timber traded across the border from DRC is in the form of un-dried, rough-sawn
hardwood boards or planks (OFIDA; ECNEF; FRCF), due to the lack of processing facilities
Page | 20
in eastern DRC, and higher Customs duties. OFIDA’s statistics for 2006 show that 67% of all
exported timber was as rough timber, whereas ECNEF Mambasa reports this as 71% and the
FRCF 83%. However, it should be emphasised that Customs duties are higher for finished
products than for rough wood.
Current processing methods to convert wood to make boards and planks results in wood
recovery rates as low as 15-20%.
The rough hardwood boards and planks traded across the border come in standard 14 foot
lengths; most are 12 by 2 inches in cross section. They are sawn in the forest at the point of
harvesting, dragged or carried by bicycle to the nearest road, and then trucked to the border. A
small percentage of larger squared beams of up to 12” by 12” are also traded; buying the
timber this way results in less wastage during subsequent processing, but include the
additional logistical problems for transport out of the forest. Special equipment such as
Tanganyika jacks are required. When the trees are processed in the forest, any timbers of less
than 14 feet in length are discarded, as are pieces of less than 4 inches in width; chainsawing
or pitsawing the timber further wastes up to 10% more wood than cutting it in properly
equipped sawmills. As a result, recovery rates can be as low as 15-20%.
5.1.3
Current Exports of Timber from DRC
Trade is focused on west and north-west Uganda. Detailed trade routes are provided in section
6.2.
Most of the timber entering Uganda in the west comes through Mpondwe, and is sourced in
the closed forests to the north of Beni near Mambasa. The timber entering Uganda in the
north-west is mostly sourced from the riverine forests in far North East Congo, and the main
entry points are Lia and Paidha. There is very little local demand in the Ugandan border areas
for the high value timbers brought in from DRC (most locally used wood is cheaper
plantation grown softwood, or lower quality hardwoods), and almost all of the timber is
trucked to Kampala for processing or onward trade (CREF, 2007).
According to various sources 24 75% of the timber logged in eastern DRC forests is exported
to Kampala (Uganda), Kenya, Kigali (Rwanda) and to a lesser extent to Bujumbura
(Burundi). Based on Forests Monitor’s and Reseau CREF’s field research, it is estimated that
41% of the timber entering Uganda is from Kasindi, 33% from the Arua region, 18% from
Paidha-Mahagi, 4% from Bunia and 4% from Rutshuru 25 . The main export route passes
through Kasindi on the DRC side to Mpondwe on the Ugandan side of the border, while a
smaller border crossing on the northern slope of Mount Stanley passes through Watalinga on
the DRC site to Bundibugyo on the Ugandan site of the border. Both border crossings link to
the road to the Ugandan capital Kampala and from there to the Kenyan capital Nairobi.
There are eight formal timber exporters active in Kasindi, and the most important are ENRA,
Mrs. Kambale Khithamuliko and Mr. Mbumba. There are approximately 50 informal
exporters transporting balks and planks into Uganda.
A large proportion of the timber (between 75 and 85% according to different sources)
exported through Kasindi is destined for Kenya. Much of the timber passing through Goma
will be used for construction work in Gisenyi (ECNEF Goma).
24
Sources include traders, loggers, Forests Monitor, partner NGOs, consultants’ field work carried out during this
project, and governmental agencies. See http://www.forestsmonitor.org/en/Timber_in_E_DRC_and_S_Sudan for
specific details on this point.
25
It would seem that Goma exporters are generally not Congolese, unlike those of Beni (ECNEF Goma).
Page | 21
Table 2 Number of logging companies and traders, destination of timber (in volumes), legal
status, and production volume of timber extracted in the Ituri Forests, eastern DRC, between
2004 and 2006.
Logging
companies/traders
45
2007 (estimated)a
31
2006b
Destination of timber
(in % of total volume)
64.3% to Kasindi
25.6% to Goma
8%
to Beni
2.1%
other
83.5% to Uganda and
Kenya
4.5 % to Goma
11.9% to Beni
0.1 % other
Possession of official
documents
93% without timber
permits
82% with trading
licences
65% without timber
permits
45% with trading
licences
20% with no official
documents
Wood production (m3)
2006c
2005d
2004
Estimate of sawn timber produced in Mambasa territories and
arriving in Beni
656.7 over 1½ months
(extrapolated)
Total 5,253 m3
2,584 m3 legal
2,226 m3 illegal
Total 4,810 m3
6,526
4,094
5,221
Around 20,000
Sources: a ECNEF LunaEtat 08/01 and 15/02/2007; b ECNEF Bella 2006; c APENB taken over 7½ months (1 April
to 15 November) & extrapolated for whole year; d OFIDA, FOPRADI.
The volume of timber exported has marginally increased on averge since 2004 (Table 2), and
there is evidence that the volumes above are significantly underestimated (APENB). Officials
acknowledge that “they have not been able to account for all the timber”, confirming the
under-estimation of volumes produced and exported. In addition, huge variations between the
various official sources exist. For example, in 2006, ECNEF Beni declared 3,090 m3 while for
the same period FRCF declared 3,680 m3, the OFIDA declared 5,869 m3 and APENB
6,526 m3.
The balance of trade for timber in the whole of DRC increased by 19.6% between June 2005
and June 2006 (Central Bank of the Congo; Table 3).
Table 3 Export value and timber volume per production type (2004, 2005, and first quarter of
2006).
Volume (m3)
2004
2005
1st quarter 2006
Logs
92,829
108,461
52,391
Sawn wood
34,616
30,062
11,857
Veneers
5,004
7,764
Total
132,449
146,287
64,248
Export value
US$ 29.3 million
US$ 45.4 million
Source: Central Bank of the Congo.
The Problem Surrounding the Kasindi/Mpondwe Market
Before and during the war (1996-2002), timber passing into Uganda at the main KasindiMpondwe entry point was traded at the timber market in Lubiriha/Kasindi on the DRC side of
the border. In 2006 this market was transferred to Mpondwe on the Ugandan side and has
remained there ever since.
The Congolese officials and citizens feel this has led to an increase in fraud, unemployment
and theft. The Mpondwe market is enclosed within a barbed wire fence and the police
maintain a constant presence. GLHRP state that this commerce is officially classified as
Page | 22
‘cross-border trading’ meaning that export tax is not payable, which in turn favours trade in
wood, coffee and a whole range of foodstuffs (GLHRP, 2006). It is not clear what this special
status of “cross border trading” means or what the benefits may be to different players.
Timber traders would like to see the market return to the DRC, as they now have to deal with
paying taxes to transport their timber to the market. In March 2007, a “timber conflict
resolution meeting” was called in Kasese, Uganda by the Congolese Governor at the request
of the Ugandan Resident District Commissioner of the Kasese district. Many key players in
the business attended, including Kenyan and Congolese traders, a representative of the
Governor of the Equateur Province and a Ugandan member of parliament, for Kasese the
Honourable Kiyonga Crispus, who also doubles as Uganda’s Minister for Defence. In 2001,
Mr Kiyonga was called as a witness at the Ugandan government’s judicial commission into
the UN allegations of state-sponsored looting of natural resources from DRC.
The subject matter was to reconcile differences of opinion on the location of the timber
market. The Congolese wanted it re-located to their side of the border, arguing that despite the
timber being harvested from their own forests, the Ugandan government and people were
taking most of the benefits. However, Ugandan officials, businesses as well as local people
urged the political and technical leaders to negotiate with their counterparts in Congo for the
timber yard to remain in Uganda because moving the market would lead to job losses and loss
of revenue. Ugandans claimed that there is too much red tape and corruption on the DRC side,
so it was agreed that the timber yard would remain in Uganda until DRC stabilises.
In summary:
• The Ugandan investors provide capital to the Congolese in the form of cash and power
saws so the latter can harvest the timber on behalf of the former.
• The Congolese harvest the timber and process the transit documents from the DRC in
their own names. They then deliver the timber to their Ugandan counterparts at the
Uganda Revenue Authority’s Mpondwe border crossing point where they are paid their
dues in cash.
• The Ugandans sell the timber to the Kenyans and Indians at the border crossing point for
cash. The latter continue using the transit documents of the Congolese for clearance with
the Uganda Revenue Authority (URA).
• In practice the Ugandans, Kenyans and Indians no longer directly get involved in
harvesting the timber from DRC forests.
• The types of charges levied by the URA for timber include VAT at 18%, a withholding
tax of 6%, import duty of 10%, and a road tax of UGS 70,000 per truck.
• For the case of timber remaining in the Ugandan market, these dues are paid in cash at the
URA post, while goods in transit not paid in cash are bonded.
5.1.4
Industrial Timber Companies
ENRA-Beni
Only one company in eastern DRC, ENRA, is exploiting an official forestry concession.
ENRA is the Belgian company which was originally awarded a logging concession near Beni
in North Kivu during the Mobutu era. ENRA was able to operate through the war, and rarely
has any trouble with government or rebel forces due to its political connections.
The company has the only kiln-drying facility in eastern DRC. It also has a large sawmill and
processing factory in Beni, where they make furniture. ENRA’s main export destinations and
production volumes are presented in Table 4.
Page | 23
Table 4 Concession area allocated, wood extraction volume, and export destination for
ENRA, in 2005 and 2006.
Year
Concession
area (ha)
Wood
volume
produced
(m3)
Wood volume
exported (m3)
2005
52,192
3,838
1,363.316
2006
28,800
4,398
Export
volume (m3) per destination
Uganda
1,065
1,621
Cyprus
73
3
Of which 1,239.025 m was sawn
South Africa 96
timber = 25 containers
Ukraine
4
Greece
320
Of which 382 m3 of parquet
Belgium
25
flooring = 14 containers
Ukraine
36
Source: ENRA office.
Daraforest
The Ugandan-Thai company Daraforest has had a sawmill at Mangina, in the Ituri forest,
since 1999. The company was granted a 100,000 ha concession licence by the RCD-ML rebel
group in May 2000, and according to the UN Panel (2001) it worked closely with Ugandan
forces to export significant quantities of wood via Uganda to Europe, China and the US,
through the companies DARA Great Lakes Industries, DARA Europe Gmbh. (Germany),
DARA Tropical Hardwood Inc. (USA), Shanton President Wood Supply Co. Ltd. (China),
and President Wood Supply Co. Ltd. (Thailand). Dara forests’s exports are thought to have
completely ceased, although a core of 4- 5 Thai staff remain at Mangina, where they continue
to saw timber for third parties.
Taxes and Procedures for Cutting and Export
The forestry sector in the DRC is characterised by several ‘taxes’ levied on logging, transport,
and export, for example a trader bringing timber from Aba near the Sudanese border to the
Ugandan border post at Lia reports having to make 14 different payments, costing US$ 55/m³
of timber.
Felling taxes
The DRC’s 2002 Forest Code focuses on industrial-scale logging concessions, and the
acquisition of logging permits by small-scale or artisanal logging operators is not clearly
legislated under this law. As a result, the procedures and ‘taxes’ paid vary according to
location, and are usually not redistributed to the Treasury, nor to the different local or national
authorities 26 .
The main regular tax for artisanal loggers is the Timber Permit – delivered by the ECNEF and
calculated in proportion to the concession’s area (Table 5). In some cases, it is possible to buy
a Timber Permit from ECNEF (around US$ 800) to extract an unlimited amount of timber,
26
According to Article 122 of the Forest Code the proceeds of these forestry taxes are transferred to the Treasury,
which divides them as follows: (1) Surface tax: 40% to the local authorities from the regions were the timber is
coming from and 60% to the Treasury; (2) Harvest tax: 50% to the National Forestry Fund and 50% to the
Treasury; (3) Export tax: 100% to the Treasury; (4) Deforestation tax: 50% to the Treasury and 50% to the
National Forestry Fund; (5) Reforestation tax: 100% to the National Forestry Fund. Here we refer to the formal
and informal taxes.
Page | 24
and valid for one year. The legal basis for this is not clear. A timber permit from the
customary chief of the area is sometimes required in addition to the Timber Permit, but its
price is low compared to the taxes mentioned below.
Timber felling taxes (official or otherwise) were found in this study to range from US$ 8 to
12 per m³. Most taxes raise the operating costs for logging companies to the extent of
modifying their harvesting behaviour, e.g. as taxes increase, timber from very remote areas
are left untouched and only the most accessible and profitable timber species are cut.
Table 5 Main taxes and taxable entities – DRC logging operations.
Type of taxes and taxing entity
Timber Permit (ECNEF, provincial level)
Delimitation of the logging area
Logging tax
Other taxes that can
be levied by
ECNEF
Cutting licence fee per timber
class
Official amounts
Amounts paid (US$)
10 to 40/ha
1/ha
20/yr
1.25% of the value of
the species per m3
0.50 to 1/m3
Area tax
Plank sawing tax
Reforestation tax
10/ha
5/m³
4% of the value per
m3
Tax on logging tools
Timber permit (customary chief)
Logging tax (local and/or territorial DAE)
Logging licence (IPMEA)
Timber purchase and sale licence (LAVB) - (DAE)
25/yr
5/yr and/or in kind
50/yr
100/yr
150 to 600/yr
"Chancellery " Duty (cluster and local and territorial
chiefs)
0.50 to 5/ha
Other miscellaneous costs (DAE, local and territorial
chiefs)
Variable
Total (US$ per m³)
8 to 12
Source: This list was compiled based on surveys conducted with loggers and ECNEF officers in the North Kivu,
South Kivu and Oriental provinces, from January to March 2007.
Local Transport Taxes
Timber transport taxes include clearance taxes paid to ECNEF plus those paid to the various
customs posts, road blocks and mobile patrols found along the roads. The total tax paid
depends therefore on the length the journey and road section taken.
For example, the total ‘tax’ payable for moving timber between Masisi and Goma may be as
low as US$ 4.50/m3, whereas between Walikale and Goma US$ 18-25/m3, between Faradje
and Lia (Arua) US$ 14/m3; or as much as US$ 50/m3 between Mambasa and Goma. Most
payments are made on a ‘per truck’ basis. The amount of timber a truck can carry has a
significant impact on the taxes paid; trucks used locally carry 8 to 10 tonnes, corresponding to
around 10 to 16 cubic meters of wood.
Page | 25
Table 6 Main taxes and taxable entities – DRC transportation and local sale.
Type of tax and taxing entity
Transport
Sale
Amounts paid
(US$)
Loading and removal taxes
(ECNEF, collective and/or territory)
3- 20 per truck each
Other taxes that can be levied (DAE, ANR)
Up to US$ 20 per
truck each
Road tolls and/or official/unofficial posts (e.g.
DEMIAP, military road blocks, national
police)
Affiliation to plank vendors committee (Goma
only)
Trading licence (ANR)
DGI tax
Communal trading licence
DAE (province and/or territory and/or
collective)
Total
( US$/m³)
2 to 50
5 - 25 per truck and
per post
105/yr
150 - 600/yr
Up to US$ 300/yr
50 - 150/yr
2 - 4.50/m3 or 20 40 per truck
5 to 20
Source: This list was compiled based on surveys conducted with loggers and traders in the North Kivu, South Kivu
and Oriental provinces, between January and March 2007.
Export taxes
Traders state that only one payment is made at DRC customs. This payment is made to a
private clearing agent or déclarant 27 who acts as a mediator between the traders and the
different ‘official’ entities at the border crossing point.
Four governmental departments are involved in export: The OFIDA, the OCC, the DGM and
the Department of Hygiene. Theoretically, official taxes are expressed as a percentage of the
FOB or CIF value of the exported goods. Additionally, other governmental departments such
as OGEFREM, TRANSCOM or even the DGI also become involved in export depending on
which particular border is being crossed. Finally, the ANR, the DAE, the police and certain
military factions also demand payments. A clearing agent at the Bukavu border stated that
during the war there were up to 19 different ‘services’ were implicated in export/import
authorisations, whereas today only 8 of these remain.
The sum of duties paid on timber exports is highly variable. OFIDA documents show that
truckloads of wood handled by forestry officials in recent months paid from US$ 27 to 180.
Not all players pay equal amounts of taxes (OGP, 2006); ‘negotiations’ between the parties
can result in a tax reduction of up to 80% of what is due by law. Customs taxes and duties
usually amount to US$ 10 - 35 per m3; although some importers say that they have had to pay
as much as US$ 65 - 70 per m3.
27
Each déclarant or “commissionaire des douanes” (customs broker) has to belong to the “Union des
Commissionaires en Douane” (or Union of Customs Clearing Agents and Brokers, UCD), a body recognised by
the “Division du Contentieux” (Litigation Division) of the OFIDA in Kinshasa.
Page | 26
Table 7 Main taxes and taxable entities – DRC exports.
Type of tax and taxing entity
Export Authorisation
(ECNEF - FRCF)
Main
Phytosanitary Certificate
departments
(Department of Hygiene)
Export Duty (OCC)
Others
Customs Duty Bills/Declarations
(OFIDA)
DGC (BIC)
ANR
Provincial and Territorial
DAE
Others (e.g. DGI, Foreign
Trade, OGEFREM,
DEMIAP)
Total ( US$/ m³)
Official amounts
4% of the FOB value
Amounts paid (US$)
80 - 115/truck
100 - 150/truck
0.6% of the FOB value or
5% of the CIF value
2% of the FOB value for
sawn wood or 5% of the
CIF value
1% of the FOB value
30 - 100/truck
50 - 150/truck
65/truck
10 - 30/truck
18 - 80/truck
Variable
10 to 35
Source: This list was compiled based on surveys conducted with traders in DRC and neighbouring countries, as
well as with OFIDA officers, between January and March 2007.
The Customs system in the DRC seems corrupt. An estimated 60 to 80% of customs revenue
was misappropriated during the transition period (UN Group, 2006) and part of this used to
finance militias associated with conflict in eastern DRC (International Crisis Group, 2006).
Trade between countries in the region is thus carried out with little or no legitimate control.
Furthermore, the forestry sector is burdened with an onerous taxation system that is
susceptible to fraud and corruption. For example, 40% of forestry taxes should go to local
communities, but there is no evidence that this is implemented. It is estimated that there are 155
fees and taxes from the forest sector which have been used by various criminal actors (FERN,
2006).
In South Kivu province, 50% of the forestry sector operates informally, according to the
Director of South Kivu Province’s Central Bank . This means that timber export tax recovery
in south Kivu is less than 10% of what it should be. In 2006 the export tax revenue which the
Orientale Province Territory DAE received over 5 discontinuous months amounted to
US$ 2,456 for sawn wood; between 20th August and 17th December 2006, ECNEF Bela
collected US$ 546 for sawn wood and US$ 1,475 for its timber exports; also in 2006, the
FRCF collected US$ 11,853 for lawful exports and US$ 5,318 for illegal exports (i.e. timber
that people were attempting to smuggle across the border) or 45% of the total amount
collected. These figures do not include the ‘informal’ trade which is completely outside of the
taxation system and assessed to be 4 times greater than the total taxed volume (declared
volume and the volume caught in anti-smuggling operations). The informal trade is comprised
of mainly two parts; 1) under declared volumes for loads on lorries – according to traders,
only 50% of the load may be declared for export from DRC; 2) Direct smuggling out of DRC
accounts for a further significant volume of timber.
In an attempt to solve its tax and tax recovery problems the DRC government has approved
the increase in taxes on the land surface area allocated for logging and the decrease or
omission of additional levies imposed by state-owned companies. However, the logging
industry and the State Transport Agency (ONATRA) oppose this reform, and steps taken to
change the tax system have hardly been enforced (World Bank, 2006).
Page | 27
5.2 South Sudan
5.2.1
Forests and Forestry in South Sudan
South Sudan has 40 million ha of forest (FAO), mainly in the south. There is little information
on logging in these forests, but given their difficult access it is probably concentrated along
roads. Timber trade between DRC and Sudan is low due to poor roads and the presence of
LRA and FARDC troops.
The extraction of Mahogany in South Sudan is similar to that in DRC. Traders based in
Uganda provide the financing, fuel and equipment to small teams of loggers controlled via
local traders. The loggers are often recent Sudanese repatriates who have lived in Uganda for
many years and have close contacts there.
South Sudan also has large areas of mature Teak plantations in the southern districts of Yei,
Maridi, Tambura and Yambio, 8,200 ha of which were established by the British before
Sudanese independence. Concession rights over 8,000 ha of Teak have recently been sold to
the Commonwealth Development Corporation (CDC) by the provincial West Equatoria
government. CDC has yet to begin extraction and export operations, however. Like the Teak,
much of the easily accessed timber in this area has already been exploited, and traders are
now beginning to look farther afield, to scattered stands of Mahogany further north and as far
as Jambo to the north of Juba. Though there are also large areas of riverine forest, containing
Mahogany just across the border in DRC, it appears that there is little or no trade between
Sudan and DRC due to poor roads and the security issues resulting from the presence of LRA
and FARDC troops in the area.
According to official figures 8,000 m3 of Teak was extracted in South Sudan between 2000
and 2004. However, transport companies in Kampala indicate that 1000-2000 m3 of Teak logs
and beams are exported through Uganda every month by three large companies, in 2005.
5.2.2
Political Background and Relations to Timber Trade
Civil war raged in South Sudan for almost fifty years - apart from a hiatus in the late 1970s until a ceasefire was agreed in late 2003. During these years up to 2 million land mines were
planted in South Sudan, many of them on or near unpaved roads. While the Khartoum
government forces held the South Sudanese capital of Juba, rebel forces of the Sudan
People’s Liberation Movement (SPLM/A) held much of the territory outside, including the
areas around the borders with DRC and Uganda. Commercial timber extraction and export
during this period practically ceased.
During the transition to peace, South Sudanese authorities began looking for ways to exploit
natural resources, and signed a deal with the Ugandan company Erimu Limited, allowing
them to extract 2,000 m3 of Teak and 1,190 m3 of Mahogany in Yei, Maridi, and Yambio. The
chaos of the transition period, together with internal divisions within armed groups and South
Sudanese authorities, caused problems for logging companies, such as the cancellation of
contracts and the theft of timber by SPLA officers.
In early 2007, the South Sudanese government signed a bilateral deal with Uganda.
Page | 28
The Teak Trade Boom, 2005-2006
In 2004 the World Food Programme contracted Kenyan construction company Civicon to
begin the re-building of roads from Kenya and Uganda into South Sudan. Civicon contractors
were thus the first on the scene as new trade opportunities were developing in the move to
peace, and the company soon expanded into trucking relief supplies, while also setting up an
expensive tented camp in Juba for foreign workers. With a fleet of specialised trucks bringing
essential supplies into South Sudan for the WFP and returning empty, entrepreneurs at
Civicon soon hit upon the idea of using the trucks to transport Teak out of the country. By
mid 2005 the company had brought in its own sawmilling equipment and set up a dedicated
yard in the Ugandan border town of Koboko for transferring Teak logs from truck to truck.
From early 2005 to March 2006, Teak log exports rose dramatically, at one point reaching as
much as 2,000 m3 per month (equivalent of 24,000 m3 per year). All the timber was transiting
through Uganda, being transferred under customs bond into containers or on to trains in
Kampala for onward shipment to Mombasa and thence to India and Pakistan. The business
became a major source of revenue for the major freight handling companies in Kampala.
In early 2006 South Sudan appointed a new Minister of Agriculture and Forestry, and in
March 2006 the new Minister issued a decree banning the harvesting and export of Teak.
Within two months, the Teak trade had decreased dramatically. In February 2007, the new
Minister announced the ministerial order in 2006, coupled with the deployment of 200 forest
guards in the western Equatoria state, had halted the illegal export of Teak and Mahogany
from South Sudan. He also stated that illegal harvesting had been reduced by 60 per cent, and
that the ministry had instituted new controls requiring farmers to obtain logging registration
certificates from the central government before they could sell any timber they cut on their
land.
5.2.3
Import and Export of Timber
The regulations in South Sudan regarding the harvesting, transport and export of both natural
forest timber and Teak are unclear.
Under the CPA, Customs duties should be collected at the South Sudan - Uganda border, by
officials under the control of the Government of National Unity (GNU) in Khartoum, and the
revenues shared with the new government of South Sudan (GoSS). However, the border posts
have remained under the control of GoSS and the SPLM instead of GNU.
Teak leaving South Sudan has been observed to carry out-of-date stamps and forms, however
it is not clear whether this is due to fraud, corruption or simple bureaucratic confusion (URA,
2006). This problem is exacerbated by the lack of printing facilities, difficult communication,
and the fact that five different currencies are currently in circulation. Teak shipments
discovered by this study to be entering Uganda through Koboko are probably illegal, given
the ministerial decree that halts all cutting and export of Teak. The Teak logs that still arrived
at Koboko were all coming in to Sudan via Moyo to the east, rather than from Oraba where
most of the logs passed when the trade was at its height.
According to a Ugandan trader with experience of exporting from South Sudan, payments
made for cutting and exporting Mahogany include forest royalties of US$ 100/m3,
afforestation fees of 3% of the current timber price (US$ 3/m3), and district development
charges (local authority taxes) of 15% of the timber price (US$ 15/m3). Export taxes payable
to customs at the border were said to be US$ 50/m3, and the purchase of a one-off export
licence is also required (URA, 2006).
Page | 29
5.2.4
Recent and Current Trade
Official Trade Statistics
South Sudan does not produce separate figures for external trade, thus the only figures
available are those published for the whole country by the national government in Khartoum.
The only wood exports recorded were US$ 10,000 of sawn timber, to Saudi Arabia. Similar
figures have been reported for previous years. Although the 2005 Comprehensive Peace
Agreement provided for Customs officials under the control of Khartoum to take over control
of the border, it was not until late 2006 that the first attempts were made to implement this
part of the deal.
Records of countries importing timber from Sudan also show very low levels of trade.
Table 8 Value of timber imports from Sudan by destination, for 2005.
Uganda
US$ 7,025
Imports of timber from Sudan in 2005
Kenya
India
US$ 6,783
US$ 0
UAE
US$ 712
Source: COMSTAT database, COMESA.
Two kinds of timber are traded from South Sudan into and through Uganda: large Teak logs
from plantations, and rough-sawn thick Mahogany timber boards from forests. The Teak logs
are generally of between 20 and 40 cm diameter, and come in lengths of up to 4 metres. The
Mahogany timber boards are of the same standard sizes as are brought into Uganda from
DRC (e.g. 12” × 2” × 14 feet).
Before 2006, 2,000 to 4,000 m3 of Teak transited through Uganda per year, bound for India
and Pakistan. However, trade volumes of both Teak and Mahogany and have decreased
dramatically since early 2006, today Teak trade is less than 400 m3 per year, whilst Mahogany
(import and transit combined) is 800 to 1000 m3 per year.
Trade Routes, Processing and End Uses
Teak logs from South Sudan cross the border with Uganda via Koboko in transit trucks. They
are transferred to trains or into containers in customs bonded depots in Kampala, then pass by
the Kenyan port of Mombasa to India and Pakistan. There is little information on the end use
of Teak in these countries. The Mahogany timber brought into Uganda has the same
destinations and end uses as that which comes from DRC.
5.2.5
Major Companies and Traders
Companies involved in the timber trade from South Sudan include Ugandan companies Erimu
and Amaply, the mega-conglomerate Madhevani Group, and the Sudanese company Rhino
Timber.
The main Indian importer of Teak from South Sudan is Salma International; they have a
subsidiary in Kampala called SWT. Their suppliers include Luck Friends Timber Company
based in the Kaju Keji area of Sudan. Furthermore, a media report from October 2005 stated
that a Nairobi-based Indian timber trader who had established a company called South Sudan
Investments Ltd., was sourcing Teak, Mahogany, Muvule and ebony in South Sudan, and was
trying to find large scale importers in India. The same report stated that a second firm called
Page | 30
PLY Investments Ltd. and based in Nairobi, was exporting hardwoods from both DRC and
South Sudan.
Most of the Mahogany imported into Uganda from Sudan is handled by a Kampala trader
called Levi Tumukurative. Furthermore, a South African expatriate in Kampala is buying
Sudanese Mahogany for shipment to South Africa.
Sudan People’s Liberation Army (SPLA)
The SPLA and its proxies trade timber sourced from areas under their control. In 2005, the
SPLA seized Teak harvested by Erimu and sold it to an Indian trader. Sources in South Sudan
state that the SPLA is no longer significantly involved in the Sudanese timber trade, but
media reports suggest that SPLA soldiers are trading timber from Ariwawa and from the far
north-east DRC, near Garamba national park. This information has not yet been verified.
5.2.6
Sudan’s Role as an Importer of Timber from DRC and Uganda
Since the CPA was agreed, a huge reconstruction effort has increased timber demand. Most of
this timber is sourced from DRC and Uganda. Ugandan timber is illegal, given that exports of
unprocessed Ugandan wood are banned. Direct trade between DRC and Sudan is impossible
given the presence of LRA and other forces near the border therefore, timber enters via the
West Nile region of Uganda.
Traders at the Juba timber market indicated that two to three Fuso-style trucks of timber –
mostly pine and cypress – arrive from DRC per week, equivalent to 4000 - 5000 m3 per year.
The volume of timber passing through the Juba market had doubled in the last six months
from January 07.
One expatriate trader in Kampala has recently begun shipping timber from DRC through
Uganda to Sudan. Documents from Lia URA near Arua reveal that Civicon are also back in
the timber business, bringing truckloads of Mahogany timber from DRC into Uganda for
transit to Juba in South Sudan.
5.3 Uganda
5.3.1
Forests and Forestry in Uganda
State of Forests in Uganda
Uganda has one of the highest deforestation rates in the world and its remaining forest cover
is estimated at 18.4% (FAO). In 1996 primary forests accounted for only 2.7% (700,000 ha),
and today most primary forest is in protected areas, with logging activity completely banned.
Most of the ‘production’ forest is already logged, and only 50,000 ha were considered
commercially ‘exploitable’ in 2000 (FAO, 2001). Around 800,000 m3 of sawn logs were
estimated to have been harvested in Uganda in 2000, from plantations, natural forest, and
those illegally cut.
Wood demand in Uganda is 26 million m3, mostly for charcoal and fuel. This is expected to
rise to 60 million m3 by 2025, therefore Uganda’s imports of timber are expected to continue
increasing dramatically.
Page | 31
Commercial Exploitation of Ugandan Forests
Commercial logging in closed forests in Uganda has continued on a very small scale, and is
concentrated on the Kalinzu Forest in the south-west, as well as on Budongo and Bugoma
forests in the far west of the country. In 2000, the total official annual allowable cut in these
forests amounted to 9,500 m3, with only 5,500 m3 actually produced.
Timber extraction in Uganda is carried out partly by a few large companies, such as Nileply,
Amaply, Budongo Sawmills, Techna Sawmills and Kapkwata Sawmills; and also by
numerous independent traders and wood product manufacturers.
Regulatory reforms of the forestry sector in Uganda have reduced legal cutting of the
remaining forest reserves and the State has taken direct control of extraction. Most companies
have thus closed their sawing facilities and refocused on the purchase of timber from third
parties for trading and processing at their yards in Kampala. Much of this timber is sourced
(illegally) in Uganda, DRC and South Sudan.
Forestry Regulation in Uganda
In 2003, the Ugandan forestry administration was re-organised into three main branches:
- The National Forest Authority (NFA), responsible for national forest reserves;
- The District Forest Authorities, sub-national and responsible for other forests (privately
owned and community forests) within each area as well as for transport of timber through
their areas;
- The Forestry Inspection Division (FID), with a national mandate for law enforcement.
Since 2004, the NFA has regulated timber extraction from national forests through open and
competitive bidding processes, and from plantation forests by selling harvest rights. In natural
forests, NFA oversees the cutting by small scale pitsawyers who then sell on the open market.
The District Forestry Offices (DFOs) control the transport and sale of legally obtained,
domestically harvested and imported wood, using a system of hammer-stamps and permits.
The NFA and FID carry out regular inspections of timber markets in Kampala and elsewhere,
and on unbonded trucks moving around the country. Any wood found without the proper
stamps and/or documents is seized and auctioned. Since April 2004, NFA enforcement staff
and Special Revenue Police have conducted monthly auctions of this timber in Kampala.
These auctions bring in an average of USh 20 - 30 million per month, equivalent to
US$ 140,000 -200,000 in annual revenue in 2004/05 and 2005/06 respectively, which is
retained by NFA as income. This timber includes illegally cut timber from domestic forests
and illegally traded timber imported from DRC and South Sudan – though figures are not
available on the proportion that imports represent in the overall volumes seized. Some accuse
NFA of misusing their powers of seizure and auction to raise revenue for themselves, and
question the rights of NFA to retain all revenues rather than returning some of it to the
Districts from which the illegally harvested timber originated.
Senior politicians have recently proposed the allocation of large tracts of forest in national
reserves to the private sector, for oil palm and sugar production. This pushed most of the NFA
senior management to resign in 2006. Ugandan media suggests that the proposed allocations
are partly motivated by the value of the timber to be extracted.
Indeed, a general problem in Uganda and DRC is the fact that timber is a by-product of forest
clearance for agricultural use, and is sold below the price required for sustainable forest
management. The Bidco project – an internationally financed oil palm plantation complex,
Page | 32
has already cleared 4,000 ha of non-protected forest on Bugala Island, and is flooding the
market with cheap timber, thus undermining NFA’s sale prices of plantation-grown timber.
Uganda’s Official Imports and Re-exports
Uganda reported total imports of timber worth US$ 4 million in 2005, an increase from the
US$ 3.8 million reported in 2004 and US$ 3.3 million in 2003 (COMESA Trade Statistics).
A quarter of total timber imports consisted of logs, mostly from Tanzania (US$ 900,000);
more than half consisted of plywood, particleboard and MDF from Kenya (US$ 700,000),
South Africa (US$ 600,000) and China (US$ 200,000).
Uganda’s official imports of timber from Sudan and DRC (as recorded by COMESA and
UNCOMTRADE) are very small (Table 9).
Table 9 Value of Ugandan Imports of Timber from DRC and Sudan (2002-2005).
2001
DRC
Sudan
8,106
0
2002
0
822
2003
In US$
2004
0
0
4,800
18,031
2005
7,003
7,025
Source: COMSTAT database, COMESA.
5.3.2
History of Uganda’s Role in Trading Timber from DRC
UN Panel of Experts / The Porter Commission
Throughout DRC’s civil war, Uganda imported most of its timber from the eastern part of
DRC. Most of this timber was for domestic use, with some transit to Kenya, for sale in
Kenyan markets and export to Europe and SE Asia (ARD, 2004).
In 2001 and 2002, a UN Panel of Experts concluded that a network of high-ranking UPDF
officers, private businessmen and selected rebel leaders in Uganda was involved in the
exploitation of natural resources from DRC.
The only other data provided by the UN Panel for Ugandan imports of DRC timber were
figures for a single (unspecified) customs post on the Uganda-DRC border. These figures
showed imports of 1,900 m3 in 1998, 3,782 m3 and 46,299 pieces in 1999, and 3,272 m3 and
3,722 pieces in 2000. Based on standard cut timber sizes, the total figure for the peak year of
1999 through this post would have been around 6,820 m3 – though it is unclear what
proportion of overall exports this may have represented.
In response to the Panel’s conclusions, the Ugandan government launched an internal
investigation led by Justice David Porter. The investigations were hampered by a series of
factors, and also fell out with its counterparts in the UN Panel. In its final report in November
2002, the Porter Commission exonerated the Ugandan government and UPDF of deliberate
official involvement in the exploitation of resources from DRC. The commission did support
the Panel’s findings against some senior UPDF officers, but no official judicial action was
taken against them (HRW, 2005).
5.3.3
Taxes and Procedures for Import Timber
The Ugandan Revenue Authority (URA) charges import duty of 10%, a ‘withholding tax’ of
6%, and VAT of 18% on the value of imported timber. However, URA systematically
Page | 33
underestimates the value of timber by 60 to 70 per cent and this is costing URA US$ 900,000
in potential revenue.
Table 10 Undervaluation of 12”× 2” Mahogany Timber at URA and DFO.
At Border
US$/ m3
At DFO
URA
Valuation
Actual
Value
%
Undervalued
DFO
Valuation
Actual
Value
%
Undervalued
US$ 98
US$ 225
56%
US$ 178
US$ 250
29%
Source: Interviews with Kampala traders, URA and DFO officials. Actual values are low-end estimates for
NW Uganda based on information from traders (Uganda, 2007).
There appear to be no standard official legal paperwork requirements for timber shipments
arriving at URA border posts from DRC or Sudan, such as phytosanitary certificates and
certificates of origin, though traders are required to fill in a URA import or transit declaration
form, which includes the consignor and consignee and origin and destination as well as a
description of the cargo. The reality as explained by a number of URA border officials is that
paperwork from Congo and Sudan varies a lot in nature and quality. Copies of a number of
different Congolese documents seen by URA officials have been reviewd by the field
researchers for this report. The most common is an OFIDA (DRC Customs) receipt for export
duties.
In addition to charging import duties and VAT, the URA border posts also collect a ‘road user
charge’ (US$ 40-70) for each foreign-registered lorry which enters or passes through Uganda.
After passing URA, import shipments (but not bonded transit shipments, procedures for
which are detailed under Kenya, Section 5.4.) must travel to the relevant DFO. After checking
the content of the truck against the importer’s declaration, the DFO charges a 1% forestry
royalty, hammer-stamps each piece of wood, and issues a ‘movement permit’.
Each DFO has two hammers, one for domestically produced wood and one for imported
wood. Each hammer has two ends and gives two different marks. One end gives a 2 digit code
number related to the district carrying out the marking, while the other gives an additional two
letter code which in the case of domestic timber indicates the origin (e.g. AR for Arua) or
otherwise indicates that the timber was imported, with the initials ‘IM’. In addition to the
declaration form, DDFOs also require documentation from URA confirming that duties have
been paid, and documentation from the source country.
The ‘movement permits’ issued by the DFOs are specific to each truck, and contain
information on the quantity and species being carried and the buyer. Their validity for use
normally expires after three days. Forestry officials in the major towns regularly check timber
on trucks and at markets and yards. Timber found without adequate DFO hammer-stamps or
without in-date movement permits is seized.
Royalties on domestically harvested timber are much higher than on imported timber,
typically 25 per cent. Like URA, the DFO’s systematically undervalue timber and are thus
charging less tax that they should.
The recent establishment of new districts means that hammers for stamping wood are not
always available, and importers are required to travel to the districts where the hammers are.
This, together with changes in the nature of the trade, have caused complications for the
hammer stamping and permits system. In north-west Uganda, the new district of Koboko does
not have its own hammer and has to send timber down to Arua for stamping. Moyo district on
the border with Sudan does not have its own hammer for imports, as there were no imports
Page | 34
from Sudan back when the system was established. For this reason and for URA purposes,
imports of Sudanese timber entering Uganda at Moyo are required to travel west to Koboko
and Arua before heading south to Kampala. This adds to the cost of transport, and provides an
incentive to bypass the system.
According to some sources, Ugandan law requires that all companies involved in importing or
exporting timber obtain a licence to do so, but the authority meant to issue the licences has
never been established. The EAC Customs Management Act of 2005 does have restrictions on
the export of timber that originates in its partner states (Uganda, Kenya and Tanzania). The
export of processed wood products is permitted, and so is the export of logs and sawn timber
harvested in non-EAC countries such as DRC or South Sudan.
Table 11 Taxes and taxing entities – Uganda imports (US$).
Type of tax and taxing entity –
Uganda Import
Official tax amounts
Import duty (URA)
10% of imported timber price
Withholding tax (URA)
6% of imported timber price
TVA (URA)
18% of imported timber price (of the timber
value after deduction of previous two
taxes)
Road user charge (URA)
US$ 70-140 per truck
Movement permit (DFO)
1% of imported timber value (25% if timber
produced locally) or around US$ 2/m3
Total US$ per m3
75 - 100
Tax amounts paid
30 - 40
Sources: URA and DFO.
5.3.4
Current Scale of Ugandan Timber Imports and Transit Trade from DRC
There is no collated URA data for timber traded into and through Uganda. We provide
estimates based on field research and the analysis of raw URA data. A good indication of the
volumes traded from DRC has nevertheless been obtained through field visits to the main
entry points. In some cases, full URA records for given time periods have been accessed and
the data collected and analysed, while in other cases rough extrapolations have been made
based on the average number of trucks said to move through each point.
Including our estimate for illegal timber shipments, annual imports into Uganda are
20,000 m3, and annual timber in transit to third countries (principally Kenya) represent a
further 20,000 m3. Based on real prices at the point of import (FOB), the overall timber trade
is worth US$ 10 million per year, of which half is transit cargo. Values at points of sale
amount to US$ 8 million in Kampala, and US$ 13 million in Nairobi.
Trends Over Time
Between 1997 and 2000 the volume of timber trade was very low. Trade volumes peaked in
2000-2003 under UPDF control of source areas, and subsequently declined with the onset of
the Lendu-Hema conflict in NE Congo. Trade has gradually increased since 2004 as the
security situation improves.
Page | 35
5.3.5
Major Companies and Traders
Most of the timber imported to Uganda from DRC for domestic consumption is handled by
individual Kampala-based traders, although Ugandan companies also import timber,
including Kapkwata (1,600 m3 estimated annual imports from DRC), Hwansung (500 m3), HiStar (370 m3) and Erimu (1,080 m3). Most transit shipments are handled by Nairobi-based
companies and dealers.
The Kenyan and Ugandan traders used to arrange the cutting and transport within DRC, but
most no longer do this. Most claimed that this was because the risks were too high, but it was
also reported in late 2005 that Congolese authorities had banned Ugandans from trading
timber in DRC, and though this declaration may never have been enforced it nevertheless had
an influence. Traders still provide financing, fuel and equipment to independent middlemen in
DRC, who arrange the cutting and transportation to the border; the traders then buy the timber
at storage yards in no-man’s land at the border posts.
Only a handful of companies in Kampala have kiln-drying facilities. Small scale traders and
processors in Kampala have started using their own ‘solar kilns’ to cure hardwoods.
Evidence suggests that the UPDF have not been systematically involved in trading timber
from DRC since the withdrawal of Ugandan forces in 2003. However, at least one Ugandan
army colonel is thought to remain involved, and may be involved in trading timber with the
rebel FNI militia in the Djugu area of the Ituri.
5.4 Kenya
5.4.1
Forestry in Kenya
Kenya has become an important consumer of timber from other countries in the Great Lakes
region since a ban on domestic logging was enacted in March 2000. The country has 1.7
million hectares of closed forest, 160-170,000 ha of which are plantations. Total forest cover
is less than 2% of Kenya’s land area. Large scale illegal felling of the national forest estate
and rapid deforestation were the main driving forces behind the ban on cutting. Since the
cutting ban was enacted, traders in Kenya have been pushing hard to have it withdrawn. In
August 2006 it was claimed that timber factories worth almost US$ 60 million had been
forced to close through lack of raw materials in the years since the ban took effect.
Trade Statistics
Kenyan news media reported in 2005 that the country was importing US$ 13 million worth of
timber each year, mostly from Tanzania, DRC and Uganda, to meet the deficit in supply
caused by the logging ban.
Official trade statistics reported to COMESA and UNCOMTRADE by Kenya show imports
growing from US$ 3.1 million in 2001 to a peak of US$ 12.1 million in 2004. Imports
dropped slightly in 2005, to US$ 8.6 million, largely due to much-reduced log imports from
South Africa. Imports of logs and sawn timber, which had been almost non-existent before,
grew particularly dramatically following the harvesting ban.
In 2005, 50% of Kenya’s wood imports by value were MDF and plywood, 20% were
processed timber products, 20% were logs, and 10% was sawn timber. The largest source of
sawn timber to Kenya is the DRC, followed by Tanzania. Recorded imports from Uganda,
Rwanda and Sudan are negligible or non-existent.
Page | 36
Kenya’s recorded imports of sawn timber from DRC increased ten-fold between 2001 and
2005 (Fig. 1).
Millions
Figure 1 Recorded imports of sawn timber (HS4407) from DRC by Kenya, 2001-2005, in
million US$ CIF.
0.6
0.5
US$ CIF
0.4
0.3
0.2
0.1
0
2001
2002
2003
2004
2005
Source: Raw data from COMESA.
Official figures show that the value of wood Kenya exports to DRC and Sudan is greater than
the value it imports from them (Table 12). Indeed, In 2005, Kenya exported MDF and
plywood worth over US$ 1 million to DRC; in the same year it recorded imports of sawn
timber from DRC worth just over half a million. Kenya also exports large volumes of MDF
and ply to other regional countries, including Tanzania and Uganda. Kenya exported a total of
just under half a million dollars’ worth of timber to Sudan – including more than
US$ 150,000 of sawn timber. Whether the wood Kenya exports is tropical hardwood or from
plantation sources, and what proportion originates outside of the country, cannot be
ascertained from the figures, but given the total logging ban in place in Kenya it seems likely
that a significant percentage of exported wood products are made using imported timber.
Table 12 Kenya’s imports of sawn timber and regional exports of timber in various forms for
2005.
Kenya's imports of sawn timber
US $
Kenya's timber exports
% of Total
Sawn
MDF/Ply
Processed
Total
DRC
531,645
65
Tanzania
146,446
18
Uganda
5,631
1,396,020
218,987
1,620,638
47,524
6
Tanzania
2,052
1,405,737
159,22
1,567,009
28,4
3
DRC
759
1,063,441
23,655
1,087,855
Uganda
27,043
3
Sudan
150,639
139,041
198,839
488,519
Malaysia
24,95
3
Burundi
0
352,465
30,858
383,323
Thailand
8,343
1
Rwanda
12,04
117,437
35,555
165,032
Sudan
6,783
1
Ethiopia
0
135,203
11,183
146,386
Others
S. Korea
TOTAL
US $
821,134
Source: COMESA Trade Statistics.
However, official trade figures may not be very accurate because they do not include statistics
for imports of timber into Kenya and should be treated with a great deal of caution.
Information collected during fieldwork conducted for this study in Uganda indicates that at
Page | 37
least 18,000 m3 of sawn Mahogany and other hardwoods transits to Kenya from DRC each
year, which at a conservative estimate should be worth US$ 4.5 million at point of import –
eight times the value recorded in official statistics. The discrepancy could be the result of
illegal timber trade volumes and they are subject to errors in reporting.
A significant proportion of timber imports into Kenya are processed for export. The total
value of these exports was US$ 10.6 million in 2005, half of which were to the United States
and the European Union, and the other half to Tanzania and Uganda. Sawn planks imported
into Kenya from the DRC are probably used to produce furniture for Kenya’s domestic
market, not for plywood as this requires peeler logs.
Remarkably, the DRC ranks third with a 22% share of the Kenyan plywood and board export
market. These Kenyan exports to the DRC are worth US$ 1.1 million, while the official value
of DRC timber exports to Kenya is only US$ 530,000. This means that, despite the large
social and environmental costs of timber production in the DRC, the DRC does not have a
positive trade balance for timber products with Kenya - its main export market for timber.
The real value of DRC timber exports to Kenya might be ten times higher, US$ 5 million, but
this extra value is not realised due to the lack of a DRC plywood and board industry. With
such an industry the DRC would be able to fulfil its own domestic need for plywood and
board, as well as supplying these products to neighbouring countries such as Tanzania and
Uganda. Given the advantage of avoiding the high costs of transporting timber from the DRC
to Kenya and plywood and board back from Kenya to the DRC, the domestic processing of
DRC timber into plywood and board would seem to be potentially very profitable.
Taxes and Procedures for Timber Imports to Kenya
Transit shipments do not need to pay taxes at the Kenya-Uganda border, although a customs
bond is required, repayable when the shipment departs.
As a member of the East African Community (EAC), since January 2005 Kenya uses the
same import duty rates as Uganda and Tanzania – raw materials (e.g. logs) enter for free;
semi-processed goods (e.g. sawn timber) attract a duty of 10%, and finished goods (e.g.
plywood) a duty of 25%. Kenya also charges 16% VAT on imported wood. The three EAC
countries have agreed to drop all internal tariff barriers, so the above duties do not apply to
imports to Kenya of wood which originates in Tanzania and Uganda, but Kenyan exports to
Uganda and Tanzania are still subject to duties until 2010). Certificates of Origin are
compulsory for trade between EAC countries, this encourages timber smuggling from the
DRC (not an EAC member) into Uganda, where the timber can be labelled as being of
Ugandan origin.
Kenya is also one of the 11 member countries of the Common Market for Eastern and
Southern Africa (COMESA) which have removed all tariffs to form a free trade area. As
such, imports of timber from Sudan, Burundi and Rwanda are duty-free. For imports from
other countries – including DRC – companies which re-export manufactured products can
reclaim any duties and VAT paid for importing the necessary raw materials.
Two main factors influence the amount of tax paid for timber imports into Kenya via Uganda.
One of them is related to the different customs valuation systems currently used in Kenya vs.
Uganda, because the amount of duty paid depends on the customs valuation. Timber arriving
at the Kenyan border at Busia or Malaba should presumably be valued slightly higher than
when it arrived at the DRC-Uganda border, to account for transport costs. But as explained
above, the valuation system used by Ugandan customs woefully underestimates the timber
Page | 38
prices, meaning that the differential in taxes paid at the two borders could be much higher.
Though the EAC customs union is supposed to harmonise procedures, it is unlikely that
systems for valuation are standardised. Further work is needed to establish the procedures
used by Kenya Customs for valuing timber imports from DRC. The difference between the
valuation systems in use in the two countries could have a very important influence on trade
flows.The second factor is the systematic under-declaration of transit shipments to Ugandan
customs, in order to facilitate under-declaration upon arrival in Kenya.
Because imports are duty exempt in Kenya but not in Uganda, South Sudanese hardwood is
transited through Kenya, despite the added transport costs.
Table 13 Taxes and taxable entities – Kenya imports.
Type of tax and taxable entities – Kenya
I
Weighing ticket (border)
Truck and trailer weight (Malaba)
Truck and trailer weight (Eldoreti)
Truck and trailer weight (Nakubu)
Total per m3 of wood
Amounts paid (US $/truck)
1200
100
100
150
30 - 38
The large discrepancy between the official Kenyan figures for timber from DRC and our trade
figures collected in Uganda could be informal trade. The high level of taxes imposed on
timber imported from DRC is certainly enough to encourage it. One possible means would be
to bypass customs altogether, though it is unclear how easy this would be given the limited
road network. An alternative method would be to falsify the origin of the timber as from a
COMESA or EAC partner country with which Kenya has a free trade agreement.
Requirements for proof of origin from such countries are quite strict, however, and there is no
evidence from trade statistics that falsification of origin is occurring on a significant scale (i.e.
there are no reverse discrepancies in the trade figures for timber from Sudan or Uganda).
5.4.2
Major Companies and Traders
There are three large timber companies operating in Kenya – Pan African Paper Mills, Raiply
Timber, and Timsales Ltd. All are said to have been granted exemptions from the logging ban
enacted in 2000. The media claimed in 2001 that these firms were using their fleets of trucks
to haul timber from DRC to Kenya, but this study has not been able to verify this claim.
Page | 39
5.5 Rwanda
5.5.1
Forests and Forestry in Rwanda
State of Forests and Demand for Wood
Between 1990 – 2000 Rwanda lost 80% of its forest cover. Today, 12% of Rwanda’s surface
area is covered by forests 28 , most of which are in national parks (approx. 225,000 ha) and
protected from logging. Private and State plantations together constitute 306,450 ha. More
than 96% of the population uses plant biomass for fuel, and the national forest product deficit
is 6,719,000 m3 (29). The Government thus aims to increase Rwanda’s forest cover to at least
30% by 2020, and have 85% of family farms practicing agroforestry.
Forestry Regulation in Rwanda
Rwanda’s forests are managed by the Forest Protection Service of the Ministry of Lands,
Environment, Forestry, Water and Natural Resources (MINITERE), following its Forest Code
of 1930. In Rwanda only trees from plantations are exploitable. Logging any area greater than
2 hectares is subject to a tax – called a ‘felling permit’ - equal to 1% of the cut product value,
regardless of whether the plantation is State or privately owned, and trees can only be cut with
a valid concession. The sale certificate and transport permit are supplied freely by the
administration. The Forest code is in the process of being reformed, 30 for example production
and export taxes will rise, forested areas will be subject to a land and a cutting tax, and
deforestation and export taxes will be introduced. In the medium term, this change is likely to
increase (cheaper) timber imports from neighbouring countries such as the DRC.
5.5.2
Taxes and procedures for importing timber
The import of timber from the DRC requires a MINITERE transport permit which costs
US$ 3.50, and is valid for three months. The permit can only be granted, however, if the
haulier already has all the necessary authorisations issued by the competent authorities of the
DRC together with those of the district in which the timber enters Rwanda (for example, the
Kisenyi district for timber exported from Goma). These requirements represent a certain
degree of mutual recognition by Rwanda for regulations governing timber production in
DRC. The nature of the documentation and the legal process of timber production in the
region needs to be clarified between the parties however, especially given the ongoing
development of the forest related legislation in DRC.
The various customs’ charges payable at the time of import are managed by the Rwanda
Revenue Authority (RRA).
Up until 18 December 2006, Rwanda levied Cost, Insurance and Freight (CIF) charges at 4%
on all imports and exports for handling and warehousing services through Magerwa
(Magasins Généraux du Rwanda, or Rwandan Bonded Warehouses). However the
government decided to decrease this charge because it was placing manufacturing firms in
Rwanda in a less competitive position relative to other manufacturers in the Region who have
liberalized and adopted a flat fee for the handling services.
28
World Resources Institute (2000).
http://earthtrends.wri.org/text/forests-grasslands-drylands/country-profile-153.html
29
MUGEMANA, 2007.
30
A new bill to be adopted in 2007 or 2008.
Page | 40
Import duties are paid on imported goods, but there are currently no equivalent fees for
exports and transit shipments. The import duty rate is currently 15% of the CIF value for
sawn wood. Since 2004, imports from COMESA countries that meet conditions as specified
by the COMESA rules of origin are exempted of duties. The Customs value of imported
goods (CIF) should normally correspond to the transactional value, i.e. the price effectively
paid for the goods. However, in order to favour imports, the CIF value is not currently applied
as such. In the particular case of timber, customs duties are calculated on the basis of a fixed
timber price that is much lower than the actual purchase price (Table 14).
Table 14 Rwandan customs taxes and duties in 2007.
a
Timber species
Item
Goma (DRC) purchase
price (US$)
RRAa Customs CIFb Price
(US$)
Libuyu
Redwood
Musave, Licheche, Sirita
Beam
Board
Board
25
7–8
3–4
12.5
3–5
2
Rwandan Revenue Authority; b Customs value of imported goods.
A withholding tax (WHT) of 5% of the CIF value is also imposed on all imports.
Nevertheless, an importer holding a Tax Clearing Certificate is exempted from paying the
withholding tax. This certificate is available from the RRA for US$ 18. The Value Added Tax
(VAT) was introduced in 2001 replacing an old-style sales tax (ICHA). A rate of 18 % (of
CIF + Import duties + Magerwa fees) is the standard for taxable goods.
At the time of writing this report, the sum of Customs fees, taxes and duties was:
- 2867 FRW per item for Libuyu (Entandrophragma sp.), or US$ 62 ± 7 per m3 (31).
- 468 FRW per item for Musave (Markhamia lutea), or US$ 38 ± 4 per m3.
To these figures should be added entry taxes for vehicles, normally paid by the haulier and
included in the transport costs:
Table 15 Rwandan vehicle entry taxes in 2007.
Vehicle type
Truck/ trailer
Lorry/ truck
Other
5.5.3
Fees for foreign registered
vehicles (US$)
152
72
9
Fees for national registered
vehicles (US$)
54
27
9
Trade of Imports and Transit from DRC into Rwanda
General Overview of International Trade
According to RRA figures, the total value of timber imports into Rwanda 32 from all countries
reached US$ 2,643,474 in 2006 (generating a tax revenue of US$ 657,461 33 ) and
US$ 657,909 for the first quarter of 2007 (with the tax revenue equalling US$ 160,124).
These values could however be slightly understated given the partiality of the data 34 . In any
31
Margin due to the wide variation in timber sizes (e.g. 0.075 to 0.095 m3 for Libuyu beams and 0.020 to 0.025 m3
for Musave boards).
32
“Wood, charcoal and woodworkings”, classified n° 44 in the RRA Customs Code.
33
Considering only the imports duties, VAT and withholding tax (excluded Magerwa fees and costs and others).
34
Information taken from the RRA Custom Department’s ASCUDA computer database. Only the main border
posts are included in the database, this system was only brought on line during the course of 2006.
Page | 41
case they appear to be well above those recorded by Burundi for the same period, despite the
fact that the two countries are of a roughly equal size and have similarly low domestic
supplies. In 2006, fibreboard, particleboard and plywood made up 79.3% of the total value of
the recorded imports, as opposed to 16.2% for processed timber and other derived products,
3.6% for sawn timber, 0.5% for sheets for veneering and plywood, and 0.2% for fuel wood,
charcoal and rough wood. It would also appear that rough sawn wood, charcoal and fuel wood
are in the main imported products from the DRC.
Table 16 Registered imports of wood products (in m3) into Rwanda 35 .
Wood
charcoal
(tonnes)
Sawn wood
(m3)
2006
2007
DRC
-
Kenya
-
25.3a 229 ±
33
-
Uganda
29.6
-
60 ± 8 c
575
± 75
1.6
± 0.2
-
1.6
-
-
-
Tanzania 2.2
2007
2006
Sheets for
veneering
and plywood
(m3)
2007
2006
2007
13 ± 3
19 ± 3
19 ± 3
21 ± 3
-
453 ± 90
320 ± 53 -
-
503 ± 84 10 ± 1.5
37 ± 5
-
2745 ±
539
-
-
-
0.02
± 0.01
1.09
± 0.15
-
-
-
-
-
0.35
± 0.05
123 ± 20 0.47
± 0.04
102 ± 17 0.3
± 0.04
-
2006
2007
3.5
± 0.5
6.6
± 0.9
-
0.1
± 0.01
23.5
China
340 ± 68
± 3.4
1.2
0.8
UAE
136 ± 27
± 0.2
± 0.1
0.5
0.88
26.2
Others
138 ± 28
± 0.1
± 0.12
± 3.7d
a
3
b
Sources: RRA-ASCUDA; An additional 22.2 m of fuel wood was imported in 2007; Mainly eucalyptus;
c
70% tropical woods; d From Egypt.
Burundi
2.9
2006
Particle and fibre
Wood in the
board, plywood and rough, Pickets and
similar
similar
(m3)
(m3) b
-
Rwanda also acts as a transit corridor for timber from Mombasa, Nairobi and Kampala
destined for the DRC and Burundi. Most of these transit imports are fibreboard, particleboard
and plywood and amounted to 1,483 tonnes in 2006, and 550 tonnes between January and
March 2007. While the national statistics reveal virtually no timber being transited from the
DRC to neighbouring countries, through Rwanda Kisenyi Customs officials estimate that over
the past 10 months almost 170 m3 of timber has passed through the country on the way to
Tanzania, Burundi and Uganda.
Imports and Trade of Sawn Wood from DRC
During the war between the DRC and the Movement for the Liberation of Congo (MLC), rare
and expensive species such as Afromosia (Afromosia elate) and Doucier (Afzelia africana)
were brought into Kigali by plane from the Orientale province, but the trade has now moved
on to other species.
Timber imports in Rwanda from DRC fell dramatically in 2002-2003 36 , due to the reduction
of easily accessible trees in the relevant source areas and increased attention by the UN.
35
The variations observed are due to the margin of error that can exist when converting data in kg to cubic metres
(cf. wet and dry wood densities according to species, and densities of some processed products). It should also be
noted that imports of “woodworkings and derived products” (4414 to 4421) have not been taken into account.
These total 189 tonnes in 2006 and 43 tonnes in 2007, and come mainly from China, the UAE, Kenya and Uganda.
36
According to a report by ARD consultants for USAID, in 2003.
Page | 42
More recent research conducted for this study indicates that in mid 2006, timber imports into
Rwanda decreased by 20% in response to rising timber prices in Goma 37 (from US$ 3 to
US$ 5 for a Libuyu beam). Trade picked up again since the beginning of 2007 largely as a
result of changes in the security situation around Goma, but also in response to the Magerwa
depots in Rwanda lowering their charges.
At present, Rwandan demand for Libuyu (Entandrophragma sp.) and Musave (Markhamia
lutea) remains very high, together they account for almost 95% of timber imports. The
remaining 5% consists of Muvula (Milicia excelsa), Licheche (Acotea lisambromis) and to a
lesser extent Sirita (Ekebergia capensis) as well as plantation species like Eucalyptus. Though
the forests of Walikale/Masisi are nearest to Goma, traders there told investigators in January
2007 that 90% of the hardwoods arriving in Goma currently are actually being sourced far to
the north around Mambasa. Security and logistical problems, combined with dwindling
accessible supplies of the targeted trees, had reduced supplies from Walikale. About twothirds of the hardwood timber arriving in Goma is destined for Rwanda.
The main port of entry for timber from the DRC is the Kisenyi region close to Goma which
has two border Customs posts that together handle more than 90% of all imports. The timber
volumes recorded by the RRA and by Magerwa agree, and suggest a mean annual volume of
5,400 m3 (±10%) since trade resumed in the last few years. However, it is likely that these
volumes are much higher (40% or more), based on reports by OCC-Goma and traders in
Goma.
Table 17 Annual imports of sawn wood into Rwanda from DRC 38 .
Timber species
Libuyu
(Entandrophragma sp.)
Musave
(Markhamia lutea)
Other wood
Total
Annually (converted)
National imports (m3)
January to December 2006
(Source: RRA, compiled by the
POLE Institute)
Imports (m3) via Kisenyi border
posts November 2006 to April
2007 (Source: Magerwa – Kisenyi
registers)
1566 / 1983
1295 /1683
2030 / 2538
1041 / 1156
35 / 44
3631 / 4565
3961 / 4980
113 / 138
2449 / 2978
4898 / 5956
Most timber imported into Rwanda from DRC is shipped to Kigali for processing 39 . Most of
the suppliers place themselves between the point where the timber is bought in Goma and
sold in Kigali, where they supply either private timber processing companies or wholesalers
with large timber yards (such as at Gacinjiro) – the latter in the main then sell to associations
made up of small businesses and craftsmen. For the supplier, the added value is generally
37
This phenomenon seems to be the result of several factors working simultaneously: the increase in demand from
Kenyan traders for at the border crossing at Kasindi-Mpondwe for timber from the same sources as that supplying
Goma, plus the insecurity which is prevalent in some areas such as Rutshuru and Masisi during the period of the
presidential elections.
38
The variations observed are due to the margin of error that can exist when converting data in kg (in the case of
Magerwa) or pieces (RRA) to cubic metres. In fact, the volume of Libuyu beams varies from 0.075 to 0.095 m3
while Musave boards and other types of timber boards vary between 0.020 and 0.025 m3. In addition, timber
density varies according to whether the timber is dry or wet; for Libuyu the variation is from 500 kg/m3 (dry) to
650 kg/m3 (wet), for Musave it varies between 450 (dry) and 500 (wet) and for other wood species from 450 (dry)
to 550 kg/m3 (wet).
39
The remainder supply the Ruhengeri market and to a lesser extent the Butare market.
Page | 43
high but at the same time highly variable, as account needs to be taken of how frequently
supplies arrive plus the indirect costs of running their businesses.
According to traders at the Goma timber market, around 10 main Rwandan traders regularly
visit the market to buy timber. As is the case with Ugandan traders at Mpondwe and Arua,
these buyers also often act as financiers, paying in advance to cover the up-front costs
incurred by the seller in sourcing the timber and transporting it to the market. Rwandan trucks
come across the border and pick up the pre-ordered timber on a pre-arranged date.
Table 18 Prices and cost for timber imported from Goma to Kigali in 2007.
Libuyu
Muvula
Musave
In US US$/m3
Price of Timber in Goma
300 ± 50
320 ± 50
185 ± 30
Export Taxes Payable in DRC (incl. clearing agent)
25 ± 5
25 ± 5
25 ± 5
Import Taxes Payable in Rwanda (incl. clearing
agent)
62 ± 7
60 ± 2.5
38 ± 4
Cost of transport
25 ± 5
25 ± 5
25 ± 5
Other costs (transport permit, profit tax,
handling, communal tax in Kigali)
30 ± 5
30 ± 5
30 ± 5
Price of timber in Kigali – Direct sale
500 ± 75
525 ± 75
320 ± 55
Price of timber in Kigali – Re-sale on local market
550 ± 75
550 ± 75
320 ± 55
Estimated Value Added
63
70
17
5.6 Burundi
5.6.1
Forests and Forestry in Burundi
State of Forests and Demand for Wood
The war in 1993 decreased forest cover from 8% in 1992 to 5%. Natural forests cover ca.
55,000 ha and are mostly found in National Parks or Natural Reserves 40 . Plantations total
50,000 ha and contain most of the exploitable timber. Communal afforested areas were 7,000
ha in 1997. Finally, there are many small, privately owned plantations consisting mainly of
eucalyptus and other agroforestry species (e.g. Calliandra sp., Grevillea robusta, Cedrela sp.)
mainly used to meet domestic requirements.
Energy wood demand in Burundi is high, representing around 6,115,000 m3 or 97% of the
total annual volume consumed, with the rural populations alone accounting for 90% of this
consumption 41 . Burundi imports timber to meet its domestic demands, mainly from Tanzania
and the DRC.
Forestry Regulation in Burundi
The management of forests and forest products is the responsibility of the Forestry
Department of the Ministry of Land Management, Tourism and Environment. Following
40
41
Ndabirorere, 2005.
Besse and Guizol, 1991.
Page | 44
Rwanda’s example, Burundi’s Forest Code of 1985 does not charge fees or taxes on cut areas
(a reforestation tax), nor does it charge a felling tax. The only taxes are a felling permit (per
tree cut) and a forest products transport permit. The transport permit is issued by the Forestry
Department and its cost depends on the species concerned and the number of items. Tax
income from transport has increased over the past few years, partly due to the growing
demand for construction timber. The Forest Code is undergoing reform, this is intended to
favour competition within the timber trade, to put in place more strict measures to control
legal and illegal logging, and to increase timber revenues.
5.6.2
Trade of Imports from DRC and other Countries
Taxes, Procedures and General Overview on International Trade
Import taxes from forest products represent 98% of all tax receipts from forest product
marketing 42 . Import costs comprise Customs duties (10% of the CIF value for sawn wood),
VAT (17%), a computerisation fee (US$ 9.50), an administration fee (5% of the product
value), and an entry tax per vehicle entering Bujumbura (US$ 14.50).
According to the Customs Department, the value of timber and wood products has increased
strongly since 2005, and amounted to US$ 2,224,517 for the period from June 2005 to March
2007 43 . Fibreboard, particleboard and plywood make up 69% of the total value of the imports,
with processed wood and other derived products amounting to 22%, sawn wood 5.5%, and
sheets for veneering and plywood 3.5%.
Imports of Sawn Wood from DRC
The amount of forest products imported to Burundi from the DRC and Tanzania has
increased 44 , due to an increase in timber demand and the ban on the exploitation of Burundi’s
natural forests. COMESA data shows that in 2005, 93% of Burundi imports came from
Uganda, and in 2006, 64% came from the DRC and 36% from Kenya. According to the
Customs Department 45 , the annual average timber imports 46 are 510 - 620 m3, and 70% of
this comes from DRC, 20% from Kenya, 7% from Tanzania and 1% from Uganda. However,
these figures are only a fraction of national volumes 47 . Imported timber is mainly used for the
manufacture of furniture for domestic use.
42
Ndabirorere, 2005.
A value not too dissimilar from the figures recorded by COMESA and BRB of between US$1,200,000 and
US$1,800,000 per annum over 2005-2006. However, these data come from Burundi’s Customs and Excise
Department’s computer database and include only goods cleared through Customs at Bujumbura port and airport
(covering imports via these posts + imports via other border posts that exceed a CIF value of US$500).
44
Source: Ministry of Land Management, Tourism and Environment.
45
For goods cleared through Customs at Bujumbura port and airport only.
46
Calculated from figures for the past 20 months.
47
Observations over the past 12 months at the Kamvimvira-Gatumba border crossing point have yielded estimates
of 2900 - 4950 m3 of timber entering Burundi from the DRC per year.
43
Page | 45
Table 19 Prices and cost for timber imported from DRC to Bujumbura (Burundi) versus
timber sourced in Burundi, in 2007.
Licheche
Grevillea
3
(US$/m )
165 ± 15 (Fizi)
45 ± 10 (Makwa)
-
25 ± 5
Tax of export (incl. clearing agent)
30 ± 10
-
Tax of import and cost of transport
Other costs (transport permit, profit tax,
handling, communal tax in Bujumbura)
Price of timber in Bujumbura – Direct sale
35 ± 15
5 ± 2.5
5 ± 2.5
250 ± 15
85 ± 10
Price of timber in Bujua - Re-sale on local market
350 ± 25
135 ± 10
15
10
Price of Timber at the production zone
Cost of transport in Burundi
Estimated Value Added
Most of Bujumbura’s tradesmen are supplied with ‘redwood’ - such as Licheche, Muvula or
Libuyu - from Fizi or Bukavu in the DRC; the volume of timber bought directly at Uvira
remains low because of its much higher price, and mainly concerns small one-off supplies.
From Fizi, it is cheaper to haul the timber overland as this keeps both Customs and transport
costs down to below the costs of shipment via Lake Tanganyika. Finally, informal trade exists
outside of the main trading routes, passing via the Lake and the Ruzizi Plains.
Page | 46
6 Trade
6.1 General View
The majority of the timber produced in and exported from eastern DRC originates in the Ituri
Province. Other important sources are the forests north of the Ituri, and in Walikale and
Itombwe to the south (Fig. 2).
Most of the timber cut in Ituri passes through Beni and crosses into Uganda at Mpondwe – the
largest single trading point in the region for east DRC wood. Timber from Ituri also transits
southwards to Goma, passes into Rwanda, and enters Uganda via several minor routes.
Timber from the riverine forests in the far north-east of DRC enters Uganda near the town of
Arua. The Walikale and Itombwe forest zones supply timber to both Rwanda and Burundi,
timber destined for Burundi transits through Uvira on its way to Bujumbura.
Almost all of the timber extracted from east DRC remains in east Africa, and the main buyers
are Uganda and Kenya. The timber that enters Uganda at Mpondwe is mostly in transit to
Kenya, whereas that entering Uganda at Arua is for domestic consumption or re-export to
South Sudan. Timber entering Rwanda and Burundi through Goma, Bukavu and Uvira is only
rarely re-exported.
6.2 Detailed Trade Routes
A summary of the data collected on the main trade routes is presented in Table 20
(below) and discussed in the following sections.
Table 20 Timber exports from DRC to Upper Great Lakes region in 2006.
DRC exports by origin and destination
DRC timber exports to Uganda
Volume
(m3)
6,071
18,810
Source
OFIDA, Mpondwe
URA, 7 border crossing points (from
Mpondwe northwards)
22,804
URA, 7 border crossing points (from
Mpondwe northwards)
+ Kitoboko/Bunagana border crossing point
DRC timber exports to Rwanda
DRC timber exports to Kenya
9,040
15,755
18,660
OCC Goma, May-Dec 2006
COMSTAT database, COMESA
URA, 7 border crossing points (from
Mpondwe northwards)
Total exports to Uganda, Rwanda, Kenya
50,504
Source: Aggregate figure from different government statistics and departments.
6.2.1
Orientale and Ituri Provinces (DRC) – North-West Uganda
Half of the timber entering Uganda from DRC each year arrives via northern routes. During
the years of the occupation and until the end of 2005, most of this timber originated from the
Ituri forest, near Nioka south of Mahagi, (then under the control of the rebel FNI), and entered
Uganda via Paidha in the Nebbi district. Nowadays, most timber imported to Uganda is
sourced in forests near the border with Sudan, and enters Uganda via Lia in the Arua district.
Timber from Orientale province enters Uganda mainly through land border crossings and by
boat across Lake Albert (Fig.3). Most of the timber traded in this area is not sourced from
closed forest, but from a very accessible area of mixed forest close to the Ugandan and
Sudanese borders.
Page | 47
Figure 2: Timber production and trade routes in the Upper Great Lakes Region, Central Africa.
Page | 48
Figure 3: DRC, Uganda, and Southern Sudan regional timber production and trade routes.
Page 49
Ariwara – Lia – Arua
Based on the analysis of URA customs documents, 10,500 m3 of timber enters Uganda
through Lia each year (Figure 3), of which most (8,200m3) is destined for Kampala, and the
rest is in transit to Kenya. The vast majority of the timber passing through Lia is Mahogany.
Ninety-five percent of the transit shipments passing through Lia are destined for Kenya; the
remainder go to UAE, South Sudan and occasionally also India. Timber arriving at Lia and
the smaller entry point of Vurra to the south is mostly passing through the towns of Ariwara
and Aru in DRC, and being sourced from forests in Aru and Faradje districts, close to the
border with Sudan.
Mahagi – Paidha – Nebbi
The town of Paidha, located between Mahagi and Nebbi in the southern part of NW Uganda,
was identified by the UN Panel of Experts in 2001 as a main entry point for illegal timber
from DRC into Uganda. A Ugandan UPDF colonel, based in Paidha, seems to still be
involved in trading timber from DRC, through his connections with a FARDC officer in
Mahagi. Trade through Paidha has diminished considerably over the last year or two,
however, and URA documents show that only 100-150 m3 of timber is imported through this
town each month. Almost all of this timber is Nkalati and cypress, probably sourced from
Lendu forests just across the border.
Zeu – Arua – Koboko – Sudan
Zeu is a remote town to the north of Paidha, and is also an entry point for timber from DRC.
Most of the timber entering Zeu is cheaper softwood, light hardwood and plantation species.
Given that this timber is mostly destined for export to South Sudan, trucks tend to head north
and pass via the DFO in Arua. URA records show that about 400 m3 of wood are passing
through Zeu each month. The area around Zeu on the Uganda side of the border, known as the
‘Lendu forest’ contains large plantations of eucalyptus and cypress. The Ugandan sawmill
company Nileply are said to be extracting large diameter eucalyptus logs from this area.
Mahagi Port – Butiaba
The current volume of timber entering Uganda across Lake Albert is thought to be small
compared with that arriving by land border crossings.
Any timber that comes from the Mahagi port in DRC, crosses the lake, and arrives at (or near)
the small lakeside town of Butiaba. The timber is imported in small consignments in
Ugandan-owned wooden vessels, often hidden under other cargo. The timber is unloaded at
landing sites along the beach and away from the official URA customs post, stockpiled in
sites around Butiaba until there is enough to fill a truck, and then transported to Kampala.
Recent field investigations indicate that the trade in timber across Lake Albert has ceased in
the short term.
Page 50
North Kivu Province (DRC) - West Uganda
Kasindi – Mpondwe
The largest single exit point for timber from eastern DRC is located between the towns of
Kasindi and Mpondwe (Fig. 3). This route is on an almost direct line between the main source
of DRC timber (Ituri forest) and the main markets of Kampala and Nairobi.
A large field between Congo customs and the URA checkpoint is currently used for timber
trading. Around 300-500 m3 of rough-sawn hardwood boards are stored at this site at any one
time. Most of the timber is pre-purchased, and some is bought on the spot.
Analysis of URA customs documentation at Mpondwe show that 1,250 m3 of Mahogany and
Muvule timber pass through each month, 90% of which is in transit mostly for Kenya. The
timber is customs-sealed by the URA. According to a number of sources, timber shipments at
Mpondwe are usually under-declared by 20 %, in order to provide a consistent paper trail that
allows similar under-declaration at the Kenyan border.
Boga – Bundibugyo
Though the vast majority of timber entering Uganda between Lakes Albert and Edward
passes through Kasindi in the south; a second, smaller route also exists further north between
Boga in DRC and Bundibugyo in Uganda. Timber passing through this route is often sourced
from nearby forests in the Ruwenzori range. The area in the Semiliki Plains between the two
towns has seen sporadic fighting in recent months on both sides of the border. The Fronts des
Resistances Patriotiques en Ituri (FRPI) remain active near Boga, while Ugandan government
forces have been fighting rebel groups the ADF and NALU. Ongoing fighting prevented field
visits on either side of the border for the purpose of the study, and the central Ugandan
authorities had received no data from officials there for some years. Based on rough guesses
from knowledgeable traders interviewed elsewhere, it can be estimated that at most around
1,500 m3 of timber enter Uganda through Bundibugyo each year, with about two-thirds in
transit to Kenya.
Rutshuru – Bunagana - Kabale
Based on the ECNEF figures from Rutshuru, in 2006, 3,994 m3 were exported to Uganda,
mainly through the Bunagana border post (the rest through Ishasha, further North). Unlike
wood entering Uganda elsewhere, this timber is apparently mostly consumed outside
Kampala, and is instead sold in towns in the south-west of the country where it enters,
including Kabale and Mbarara. However, because of recent high levels of insecurity in this
area, it is currently difficult to draw a more detailed picture of the trade. During such periods
of heightened conflict, there is some indication that timber from Rutshuru is re-directed
southwards into Rwanda.
6.2.2
Through DRC to Rwanda and Burundi
More than 90% of all timber imports into Rwanda from the DRC come through Goma and
enter Rwanda at Kisenyi (Fig. 4), most wood comes from Ituri. The second most important
crossing point is Shangugu in the south, and timber crossing here originates from Bukavu.
Page 51
Only a very small amount of timber (from plantation-grown, low value tree species) comes
into Rwanda through border crossings other than Kisenyi and Shangugu, and it is mostly used
by workshops close to the border.
Burundi also imports timber from east DRC. Traditionally, the main entry points have
been Uvira, Bugarama, Minago, Rumonge, Nyanza, and the lakeside towns near
Bujumbura (ARD, 2003; Fig. 4). Nowadays, most Bujumbura traders receive timber via
the Kavivira-Gatumba Customs post. Timber arrives at Kavivira from Bukavu and Fizi. The
timber from Bukavu comes from Walikale, whilst that from Fizi is sourced in Itombwe.
Limited amounts of timber are also shipped across the lake: because of the high handling and
Customs costs at the Bujumbura port, most that follows is traded from the port of Baraka near
Fizi in DRC to Rumonge on the eastern shore, with onward travel to Bujumbura via truck.
Other minor timber routes exist, in particular across the Ruzizi plain to Bugarama (the border
post between the DRC, Rwanda and Burundi) or via Kiliba (a small border crossing point
about 20 km north of Uvira). The latter route connects up to Gatumba and then Bujumbura,
bypassing the Kavivira Customs post.
Timber imports to Burundi from Tanzania arrive either by boat from the ports of Kigoma and
Rumonge and then by truck to Bujumbura 48 , or by road via Mabanda. It also appears that a
relatively large amount of timber leaves the DRC from Fizi destined for Tanzania, via
Baraka, Kalemie, and Kigoma.
Burundi’s local government and rebel groups have in the past logged protected areas in DRC
to finance their operations (ARD, 2003).
48
It is more restrictive to use Bujumbura port as it is more expensive due to the high transport and handling costs.
Page 52
Figure 4: DRC, South Uganda, Rwanda, and Burundi regional timber production and trade routes.
Page 53
6.3 And beyond the Bordering Countries?
What is the destination of timber leaving DRC and South Sudan to Uganda? Most of the
Sudanese plantation Teak transits onwards to India and Pakistan; 50% of the natural forest
timber is consumed in Uganda and most of the remaining 50% is consumed in Kenya.
Only a minority – between 5 to 10% – of the timber exported from eastern DRC is for the
international market outside of the region. However, DRC national timber exports in 2005
amounted to 235,970 m3 of logs and 15,250 m3 of sawn wood (FAOStats). The total value of
EU timber imports from the DRC amounted to € 67 million in 2005. France, Belgium, and
Portugal together accounted for € 51 million 49 .
The Example of African mahogany (Sapele)
This study uses African mahogany to illustrate the last stages of the timber export from
eastern DRC. African mahogany is a typical example as it is one of the two most common
commercial timber species exported from Africa. Research carried out for this study indicates
that most of the timber being exported from eastern DRC is undried African mahogany. In
Uganda, African mahogany is classed as an endangered tree species, and its harvesting in
forest reserves has been banned by a Ministerial order since the 1990s.
African mahogany is primarily used for wood flooring, doors, windows and furniture
construction. In foreign markets, Sapele is normally only used for luxury high-end purposes,
but in Uganda it is used for more mundane products.
Sapele sawn timber and log represent a significant proportion of timber exports by most West
African producer states. Most Sapele sawn timber in trade originates in Cameroon. Official
trade figures for volumes of DRC Sapele sawn timber exports are not available, but they are
likely to represent a majority.
49
Refer to http://www.forestsmonitor.org/en/Timber_in_E_DRC_and_S_Sudan for more information. These
figures –as all statistics related to timber export from DRC- need to be taken carefully because data are very often
partial and inconsistent.
Page 54
Table 21 Exports of African Mahogany sawn timber by selected African countries (2004).
Export
volume (m3)
218,891
% of total sawn timber
exports
21%
Central African Republic
34,879
80%
Congo-Brazzaville
80,962
67%
Ghana
11,000
5%
Cameroon
Quantity figures from UN COMTRADE for imports of sawn timber from DRC are available
in kilograms. Using approximate specific weights for undried timber of the most common
species, these can be used to give a rough valuation of US$ 900 to US$ 1000 per cubic
metres. Sapele prices have shown a general increase over the last year or so. A particularly
dramatic increase of around 9% has been seen for prices of logs at source and for sawn timber
in China in the first few months of 2007.
Chinese, Indian and United Arab Emirates Markets
The main markets for this timber are China and India. In 2005 India registered imports of just
under US$1 billion of timber. The largest sources were Malaysia and Burma, followed by
West Africa. India recorded no imports of timber from Kenya, Sudan, Rwanda or Burundi
during the year, and only a tiny amount from DRC - US$ 12,600 of logs and sawn timber.
India did record significant volumes of imports of logs from Tanzania ($ 10.6 million) and
Uganda ($ 400,000), however.
Table 22 Main international markets and prices of African mahogany (March 2007).
Location
Shanghai, China
Shanghai, China
Tianjin, China
UK
Ghana
Ghana
West Africa
Form
Foreign Markets (CIF)
50 mm FAS (Congo) AD
50 mm FAS (Congo) KD
2.2-2.6 m, 5 cm thick
25 mm FAS
Source Countries (FOB)
FAS 25-100 mm x 150 mm+ x 2.4 m+ AD
FAS 25-100 mm x 150 mm+ x 2.4 m+ KD
FOB price for Spanish scantlings
Date
Price (US$/m3)
Mar 07
Mar 07
Mar 07
Mar 07
810 - 850
920 - 945
810
780 –810
Mar 07
Mar 07
Mar 07
660
750
725
Source: ITTO MIS.
Table 23 India’s imports of timber from the Great Lakes region, 2005.
Logs
Tanzania
Uganda
DRC
10,577,662
374,608
6,020
Sawn
Other
US $ CIF
57,605
197,699
0
0
6,553
0
Total
10,832,966
374,608
12,573
Source: UN COMTRADE.
Though timber in transit through Uganda or Tanzania to India from other countries should be
registered at import as having come from the true country of origin, it is nevertheless possible
that a proportion of the logs India registered as imported from the two countries actually
Page 55
originated in Sudan or DRC. Since domestically harvested logs are banned from export from
Uganda, while almost no logs are traded out of eastern DRC, it seems likely that the
US$ 375,000 of logs recorded as imported from Uganda in 2005 were in fact Teak logs
imported from South Sudan.
The United Arab Emirates (UAE) reported importing US$ 500,000 of logs and US$ 300,000
of sawn timber from DRC in 2004, the first year in which the UAE recorded imports of wood
from the country. It is impossible to say with any confidence what proportion of this timber
may have arrived via the Great Lakes, though it is likely to be very small. Imports of sawn
timber from Tanzania grew three-fold from 2003 to 2004; while 2004 was the first year that
UAE imported logs from the country.
Table 24 United Arab Emirates’ imports of timber from the Great Lakes region, 2004.
Logs
Tanzania
DRC
Kenya
Uganda
Sudan
122,345
493,460
3,309
32,533
0
Sawn
Other
US $ CIF
916,900
19,402
294,484
145
0
104,807
0
0
0
712
Total
1,058,647
788,089
108,116
32,533
712
Source: UN COMTRADE (2005 data not yet available).
Page 56
7 The Impacts of the Timber Trade on Poverty in East
DRC
This chapter attempts to shed light on the impacts of timber production and trade on poverty
and conflict in eastern DRC through the various parts of the supply chain, from production to
export.
- Section 7.1 evaluates the contribution of the forestry sector to economic development and
analyses the key players and their respective roles in the various stages of the supply chain
(production, transport, local markets, and export).
- Section 7.2 in turn evaluates the contribution that each of these stages makes to the price of
timber as it is exported to Kenya, Uganda, Rwanda and Burundi.
- Section 7.3 investigates how the forest sector contributes to conflict, and draws conclusions
on why local communities derive little benefit from timber trade.
7.1 Map of Key Players
Various interest groups (players) within the timber sector interact with each other in complex
ways, depending on the particular situation. An analysis of the timber supply chain reveals
thirteen general categories of player:
1. Land chiefs, nobles and customary chiefs;
2. Small-scale artisanal loggers and logging companies;
3. Agents, operators and workers at the cutting areas: machine operators, pit-sawyers,
bombeurs and loaders and logistics managers;
4. Private timber hauliers: ACCO, FEC;
5. Timber dealers;
6. Carpentry shop owners and other wood craftsmen;
7. State technical and other services specialised in the timber and taxation sectors:
ECNEF, OCC, OFIDA, DAE, External Trade, DGRAD, ANR, DEMIAP, PIR, PSR,
Fraud Squad, ICCN;
8. Merchants, traders, agents, brokers (buyers/sellers);
9. Timber sector NGOs (ASBL): AEFOSKI, COODES, AMEKI, COVEB, APENB;
10. Local NGOs and other Civil Society structures working in the environment sector:
CREF network (members), local churches;
11. International NGOs working on natural resources e.g. WWF, WCS;
12. The Military and Armed Bands;
13. Local communities: e.g. agents, workers, towns, villages, communes.
The supply chain itself can be broken down into three main stages:
• Stage 1: Production zone;
• Stage 2: Market and local sale;
• Stage 3: Marketing for export.
The following table summarises the roles of the various players, with stage 1 having been
sub-divided into two parts, timber production in the forests and the transportation of timber to
timber yards.
Page 57
Table 25: Map of players involved in the timber supply chain, Great Lakes Region, Central Africa.
Player category
Category Description
Production
1.
Local chiefs, land
chiefs, nobles and
customary chiefs
Local authority figures
who rule the land by
virtue of local customs,
laws and traditions
2.
Forest operators:
Small-scale
tradesmen and
logging
companies
Agents, operators
and workers
(under temporary
or permanent
contracts)
Operators awarded
permits to log the
forests on a small or
industrial scale
3.
4.
Private timber
hauliers
- Organised into
teams of cutters
(pitsawyers,
slashers, chainsaw
operators);
- include machine
operators,
bombeurs,handlers,
and logistics
managers.
- ACCO (Congo
Drivers Association)
haul 80% of all the
country’s timber;
- FEC (Federation of
Congo Businesses)
owns the vehicles
- Receive requests for
forest concessions and
permits;
- Decide in the name of
their peoples to grant and
sign permits;
- Decide the species, trees,
and areas to exploit
- Cut, dress and transport
the timber
Roles and responsibilities
Delivery/Transport
Markets/towns/timber
yards
Export
Possible
interventions
Better awareness of
principles of
sustainable
management
- Often transport the
timber themselves to
point of sale;
- Sometimes work with
other hauliers
Some have their own sales
yards in town or at their
sawmills (e.g. ENRA)
Some have sales
licences (e.g. ENRA)
Institution of
exploitation methods
that are fully legal and
observe standards
Improve their living
conditions (health and
safety)
Extract timber
ACCO has vehicle hire
agreements with timber
traders; the vehicle
owners are more in
contact with their
drivers this way;
The poor and
dangerous state of
roads increase the bid
prices of the
agreements
The haulier delivers the
goods to the agreed
destinations, usually the
timber yards
The haulier takes the
goods to the export
port
- Increase the safety
of the roads into the
forest;
- Undertake road
improvement works
Page 58
Table 25 Map of Players (Continued)
Player category
Category Description
5.
Timber retailers
and wholesalers
Shop owners, timber storage
yard operators and owners
either in towns or in rural
areas where timber is stocked
or gathered for onward sale
6.
Carpentry shop
owners and
other wood
craftsmen
State technical
and other
services
specialised in
the timber and
taxation sectors
Mainly privately-owned
businesses managing the
workshops
7.
8.
9.
Merchants,
traders, agents,
brokers (buyers/
sellers) and
exporters
Timber sector
NGOs (ASBL)
- Forests and environment
sector: ECNEF, ICCN, FRCF;
- Taxation services: OCC,
OFIDA, DAE, External Trade,
DGRAD, Anti Fraud;
- Security services: DGM,
ANR, DEMIAP, PIR, PSR
- Buyers acting alone or
through merchants, brokers or
agents;
- Private customs facilitation
agencies, particularly for
export;
- Exporters who are not
producers/operators
Local timber production and
marketing associations:
AEFOKI, COODES, AMEKI,
COVEB, APENB
Production
The forest operators store
their produce as they see
fit
Tax collection
- Negotiate the quality and
quotas of timber with
producers/operators
according to market
conditions (domestic and
external)
- Provide financing to cover
up-front costs of timber
extraction and transport;
sometimes also provide
equipment
Production of timber
according to the
associations’ objectives
Roles and responsibilities
Delivery/Transport Markets/towns/timber yards
- The haulier and the agents
follow management
policies and procedures,
and work with the State’s
Finance and Economy
services.
- Sometimes theft occurs
Very active in the wood trade,
especially furniture
manufacture and woodworking
- Tax collection
- The collection of taxes
- Inspection of
- The fight against
packages and
underdeclarations of timber
goods transported
volumes
against transport
documents
Major issues
Exports are rare
- Work with ACCO
hauliers to source
vehicles for least
cost transport.
Make all necessary contacts
to have stocks according to
sales orders.
Negotiate with
various services
to pay as little as
possible to export.
Collaboration with agents
Some export
directly where
needed.
Export
- improve security to prevent
theft or confiscation by armed
groups and government
agencies
- The collection of
taxes
- The fight
against fraud and
fraudulent
declarations
Secure energy source
(instability of SNEL) for
decreasing machining costs
(e.g. electricity generators),
- Maximisation of tax income
- Observance of the Law
- Management of timber and
tax information with
concerned parties
- Management of mediators in
fraud cases
Reduction in the number of
buyer/seller middlemen to
stabilise prices.
-Tariffs are
negotiable when the
customer is trusted
to pay
Contact with haulier
and driver
associations
- Support the network of
organisations
- Training for associations
representatives
Page 59
Table 25 Map of players (Continued)
Player category
Category
Description
10. Local NGOs and
other civil society
groups working in
the environment
sector
CREF network and
members, local
churches, other
NGOs
11. International
NGOs working in
the natural
resource sector
Donors: WWF,
WCS, Forests
Monitor and others
12. The Military and
Armed Bands
- Military officers
intervene in the
timber trade
- Local and foreign
militia use local
populations for
timber trading
13. Local
communities
- Pygmy populations
- Villagers
- Young people
- Women
Production
- IECCC works for the
sustainable and equitable
management of forest
resources
- Requests to the
operators/producers to
maintain rural roads
- Lobbying and requesting
monitoring timber/charcoal
production;
- Lobbying for good natural
resource management
- Influence peddling to access
rare timber species;
- Negotiate the purchase of
timber with
producers/operators
- Often taken as workers or
agents (i.e. local labour);
- Many children work in the
timber sector as labourers;
- Women recover timber
waste for use in the kitchen
Roles and responsibilities
Delivery/Transport
Markets/towns/
timer yards
- Forcing unpaid labour to
move timber from forests to
roads;
- Sometimes intimidation and
influence peddling to rent
lower-cost vehicles from
owners/ACCO;
- Intimidation of other law
enforcement forces
- Use roadblocks to collect
informal taxes on timber in
transit
- Children in particular are
made to work as bombeurs and
handlers
- Sometimes
purchase of reserve
stocks at a price that
is too low;
- High level of
surveillance of their
warehoused timber;
- Purchase without a
licence.
- Bombeurs and
handlers;
- Buyers of timber for
furniture and other
domestic uses
Major issues
Export
Fight for the
observance of timber
export standards
Promote the IECCC in
the management of
forest sector activities
and stakeholders
Lobbying and calling
for legality and
equitable international
trade
Promote conservation;
fair, equitable and
sustainable trade.
- Export often illegal,
intimidation
- Influence peddling at
border crossings;
- Between May and
December 2005 at
Kasindi, 75% of illicit
exports (188.84 m3
out of 254 m3) were
carried out by high
ranking military
officials
-Limit influence
peddling in illegal
timber trade and fraud;
- Improve the security
of forest logging areas
Consider the interests
of local communities in
Forest Management
Page 60
7.2 Assessing the Economic Contribution of Timber Production and
Trade
7.2.1
Definition and method
To assess the contribution of timber production and trade to the economy of eastern DRC, the
first step is to establish the distribution of rent income from the forestry sector:
The amount of value added generated by timber production in the eastern DRC or in the
DRC as a whole. Value is added to a basic product (in this case wood) by felling, processing,
transporting and marketing it. The value added generated by timber production can be
compared with the GDP of the DRC as a whole, or of the eastern DRC, to assess the relative
contribution of timber production to the (national or regional) economy. When products are
exported, the export value and the export volume determine the market value generated by the
sector. This market value consists of the market value of inputs plus the value added
generated.
The distribution of value added among the participants in the (national or regional)
economy. There are various mechanisms for the distribution of value added to different
participants in the economy, the payment of wages to people employed in the timber
production, processing, and trading sector is very important. Other mechanisms are the
payment of interest and dividends to providers of capital, collection of taxes in combination
with public spending by public authorities, and payment for services to companies and
individuals outside the timber sector (e.g. transport companies, fuel suppliers, machinery
suppliers).
Whilst the amount of value added determines the contribution of timber production to
economic growth, the distribution of value added to the national or regional population
determines the direct contribution of the timber sector to poverty alleviation and indirectly – to economic stabilization.
The first determinant of the evenness of distribution of value added is the percentage of added
value which is paid out as wages by companies in the forestry sector and their suppliers. The
key factor is the number of people earning a basic wage in this sector relative to the
population. Additionally, it is very important to assess what percentage of the added value
generated is remitted as taxes, and what percentage of these taxes is invested in social and
economic development such as schools, healthcare, and infrastructure.
In summary, to assess the direct contribution of the forestry sector to poverty alleviation, two
values are calculated:
- The Total Value added (TVA) to compare the profits (governmental and private) with
inputs (goods, labour etc.)
- The Other Value Added (OVA) to compare the governmental profit with private profit.
7.2.2
Value added along the different steps of the timber supply chain
The distribution of value added was calculated in four different market places (DRC, Uganda,
Rwanda, and Burundi) along the four main steps of the timber supply chain:
- Step 1: Production zone in east DRC
- Step 2: Market and local sale in east DRC
- Step 3: Border point sale (export) in east DRC with neighbouring countries
Page 61
- Step 4: Sale abroad (export) in Burundi, Rwanda, Uganda and Kenya
This method allows the comparison of the economic gain in DRC versus that in
neighbouring countries, and also establishes which steps are the most/least profitable and to
whom it may be so.
Table 256 Steps in Value Added to Timber
Step 1
Production
Zone
Step 2
Market and
local sale
Step 3
Border
point sale
Step 4
Sale
abroad
50
DRC to Burundi
DRC to Rwanda
DRC to Uganda
DRC to Kenya
Walikale
(felling and sale)
Mambasa
(felling and sale)
Mambasa
(felling and sale)
Mambasa
(felling and sale)
Walikale – Uvira
(transport and sale)
Mambasa – Goma
(transport and sale)
Mambasa – Beni
(transport and sale)
Mambasa – Beni
(transport and sale)
Uvira – Bujumbura
via Kamvimvira
(export, import,
transport and sale)
Goma – Kigali
via Gisenyi
(export, import,
transport and sale)
Beni – Mpondwe
via Kasindi
(transport,(export, and
sale)
Beni – Mpondwe
via Kasindi
(transport, export and
sale)
Mpondwe – Nairobi
(transit through Uganda,
import Kenya, transport,
sale)
Mpondwe – Kampala
(import, transport, sale)
The Total Value Added (TVA) is determined by the following formula:
(1) Total Value Added = Market Value – Value of Inputs
Where,
Market value = the market value of timber sales recorded in the different market places.
Value of inputs = the costs of machinery, fuel and other inputs needed to produce and/or
transport timber products.
During production (Step 1), inputs include workers’ salaries, transport and material
costs (fuel, maintenance); whereas for the rest of the supply chain (Steps 2, 3 and 4),
inputs take into account only transport costs 51 .
The Total Value Added (TVA) can also be distributed between the direct profit (Other
Value Added, OVA) and the “government profit” (Taxes).
The TVA includes wages and taxes, legal and illegal profits of companies (loggers and traders
among others) and non-tax payments to officials, armed groups, and others (i.e. corruption,
distortion). The amount of ‘tax’ payable along the different steps of the supply chain is
therefore calculated according to the amounts actually paid, knowing that these amounts will
vary according to the particular arrangements between the parties concerned. This can be
resumed by this final formula:
(2) Other Value Added (OVA) = Total Value Added (TVA) -Taxes
We assessed the TVA (expressed in US$/m3 of wood) by extrapolating the sums of money
due per truck, per hectare, or per year 52 ., we propose the table below. The TVA is in part the
result of the To assess value, the main class 1 tree species exported is used: the African
mahogany (Linzo or Khaya anthotheca), Sipo and Sapele (Liboyo or Entandrophragma sp.),
and Iroko (Punga, Muvule or Milicia excelsa).
50
This table addresses the main trade routes; not all trades routes could be covered (e.g. through north-west
Uganda). Selected production zones and markets are used for this case study.
51
This implies that inputs could be slightly underestimated and the OVA overestimated.
52
For more detail see section 5.1.6 (DRC), 5.2. (Kenya), 5.3.3. (Uganda), 5.5 (Rwanda), 5.6. (Burundi).
Page 62
Table 27 (a) Total Value Added (TVA) and Other Value Added (OVA) along various steps
of the timber supply chain, by country; (b) TVA and OVA along the timber supply chain, by
country: steps 1,2,3 relate to DRC, and step 4 to the importer country.
Value added (US $/m3)
(a)
Step 1: Felling, sawing and transport to road side in DRC
forest area
Market value
Inputs = machinery, fuel, transport, employment
Rwanda
via Goma
Burundi
via Uvira
Uganda
via Kasindi
Kenya
via Kasindi
137
125
125
125
88
88
88
88
Total Value Added (TVA)
49
37
37
37
Taxes = for logging and sawing
Other Value Added (OVA) = TVA - taxes = profit, others costs
10
39
10
27
10
27
10
27
286
300
226
226
75
211
42
258
30
196
30
196
Taxes = for transport and sale
31
70
50
50
Other Value Added (OVA) = TVA - taxes = profit,
employment, other costs
Step 3: Purchase and export (+ Re-sale at the frontier for
Uganda and Kenya)
Market Value
Inputs (transport)
Total Value Added (TVA)
43
63
21
21
276
15
261
276
15
261
Taxes (export)
Other Value Added (OVA) = TVA - taxes = profit,
employment
Step 4: (Purchase) import and re-sale in the importer country
Market value
Inputs = transport
Total Value Added (TVA)
30
15
30
5
30
5
537
15
522
533
20
513
569
35
534
550
90
460
Taxes = import taxes
85
85
47
Other Value Added (OVA) = TVA - taxes = employment,
121
113
211
profit, other costs
Source: Aggregate figures from communication with traders at different levels in the trading chain.
45
139
Step 2: Purchase, transport and sale at the local market
Market Value
Inputs = transport
Total Value Added (TVA)
(b)
Value added (US $/m3)
Value of input DRC (steps 1,2,3)
Taxes (steps 1,2,3)
Other Value Added (steps 1,2,3)
Total Value Added TVA DRC (steps 1,2,3)
Burundi
163
71
82
153
Rwanda
130
95
90
185
Value of input (step 4)
Taxes (step 4)
Other Value Added (step 4)
Total Value Added TVA Neighboring countries
15
85
121
206
TVA Whole chain= TVA DRC+TVA Neighboring
countries
TVA DRC/TVA Whole Chain (in %)
Taxes DRC/TVA DRC (in %)
(Taxes/TVA) Neighboring countries (in %)
Uganda
Kenya
133
90
53
143
133
90
53
143
20
85
113
198
35
47
211
258
90
45
139
184
359
383
401
327
43
46
41
48
51
43
36
63
18
44
63
24
Page 63
The TVA amounts to US$ 143 - 185 per m3 of wood in the DRC, as opposed to US$ 184 258 per m3 for importer countries. TVA in the DRC amounts to just 36 to 48% of the TVA
along the complete supply chain.
It is important to note that all taxes represent between 46 and 63% of the TVA in the DRC –
depending on which timber export routes are taken – as opposed to 41 to 43% for Rwanda
and Burundi, 18 % for Uganda and 24% for Kenya.
In conclusion, the profits generated by the forestry sector benefit the importer countries more
than they do the DRC 53 . Most of the TVA generated in the DRC is levied in the form of
taxes. Given that there is no redistribution of tax revenues at the local level (territory,
province), it is likely that only a small proportion of DRC’s TVA is invested in the economic
and social development of the region.
The TVA of the forestry sector in eastern DRC is estimated at US$ 6.5 million per year,
taking into account official figures of sawn timber export volumes 54 . It is impossible to
provide an accurate assessment of the importance of the forestry sector to eastern DRC’s
economy, due to a lack of good regional data on GDP. However, it is probably very important
in terms of TVA generation, especially after timber for local consumption (for fuel wood and
charcoal) is considered. The contribution of the forestry sector to TVA could be even higher if
the timber was processed; at the moment timber is exported predominantly in unprocessed
form. The contribution of the timber sector to local development would increase considerably
if taxes levied were locally redistributed and spent on items such as schooling and sanitation.
7.3 Implications of the Timber Trade for Local Communities
The benefits of the timber trade for local communities remain very limited despite all the
economic spin-offs that could arise from the exploitation, transformation and sale of timber.
The arrival of logging companies raises expectations in terms of employment opportunities
and improved healthcare and education, roads and commerce, but all too often these
expectations are not met.
•
Very little direct employment is generated; work is often carried out under difficult
conditions.
ENRA is the only industrial enterprise in the study area and has 23 employees associated with
felling operations and a further 51 involved in timber processing. Other enterprises are smallscale pitsaw operators (250+ individuals in the Mambasa-Beni area and another 250+ in
Walikale-Itombwe) and cross cutters (100+ in Mambasa-Beni) 55 . Salaries are low, for
example a Bukavu pitsawyer earns US$ 1 per timber board. Virtually no employment is
generated within forest areas and communities. In the Mambasa-Beni area, less than 10% of
workers come from local communities, even the bombeurs, the least qualified of employees,
come from outside logging areas.
53
For more information see http://www.forestsmonitor.org/en/Timber_in_E_DRC_and_S_Sudan.
Only the lowest of the official volumes figures have been taken into account here (3,000 m3 for Burundi,
9,040 m3 for Rwanda, 22,800 m3 for Uganda and 18,700 m3 for Kenya). Considering the volume that appears to
actually be exported, these figures can easily be doubled or more.
55
The harvesting and sale of fuel wood most certainly employs a good few thousand additional individuals, with
tens of thousands of individuals employed nationally in this way (FAO, 2007).
54
Page 64
In addition, working conditions are often difficult with very little social protection. An
analysis of the observance of the social responsibilities of a company (CREF Network, 2005)
revealed that:
- Few operators draw up written employment contracts;
- Even where a contract exists, it is not always executed in accordance with current social
legislation, especially with regards to the conditions surrounding termination of employment;
- Health and safety at work is precarious, especially for those living in the forest.
Various workers associations linked to the forest sector, such as the Mambasa Region
Bombeurs Association and the Bukavu Association of Operators, have emerged to protect the
rights of those employed in the timber sector and to limit unjust informal personal
taxation/racketeering practices.
Indirect employment is more abundant: thirty or so small carpentry workshops depend on
ENRA as a wood supplier. For example, the Confédération du Monde des Artisans de Bukavu
(or Bukavu World League of Craftsmen) has a membership of 400 carpenters. The League
enables the collective purchase of timber from logging companies and the possibility of
taking on large orders, such as for school furniture in the case of a Belgian cooperation
programme, or healthcare furniture for an order placed by the UNDP. However, the purchase
of a wood drying kiln has not been possible as this requires a large capital investment.
Further research should be conducted into the current state of regional and national trade
unions (i.e. bombeurs, scieurs de long) to inform plans to develop coordination and
involvement in supporting increased income at the lower levels of the employment chain.
They could play an important role in providing training to increase efficiency and quality and
decrease wastage of timber in the forest, as well as supplying information on the
standardisation of timber lengths and on legal procedures and requirements.
The 2005/2006 report of the International Confederation of Free Trade Unions – Africa
Regional Organization (ICFTU-AFRO) identifies 13 national DRC trade unions but outlines
that due to insecurity, the influence of unions had dwindled to the point where they are unable
to defend labour rights. Sudan has only one trade union, the Sudan Workers Trade Union
Federation (SWTUF), which is largely government controlled. Other unions are banned, and
violations against the Sudan’s Labour Code are severely punished. In Uganda, the National
Organization of Trade Unions (NOTU) is affiliated with the International Trade Union
Confederation.
• Meagre economic spin-offs
The presence of logging teams in the forests does not automatically result in business for local
communities, given that purchases of local supplies are limited to perishable foods, with the
rest usually being bought in the nearest towns (Beni, Bukavu) by the logging site manager.
Interim financing is widespread in the production areas, but places logging companies under
pressure and gives the merchants the opportunity to force prices down. However it also gives
the logging company the cash it needs to carry out logging operations and transfers the risk of
failure to the merchant. This interdependency between the producer and the merchant is
therefore very strong; however, unfortunately the balance of power is often tilted one way.
Customary chiefs who – by virtue of their chieftainship – grant “timber permits” in the name
of the whole of their community, find it difficult to obtain financial returns. In the MambasaBeni area a timber permit granted to a logging company by a customary chief is US$ 5 per
hectare plus a cow (US$150 -250).
Page 65
• A qualitative and quantitative deterioration of forest resources
Local communities see the impact of logging practices, which do not allow the forest to
regenerate naturally or the nutrient cycle to be maintained. “Everything is in the process of
disappearing, beginning with the animals, the caterpillars, the mushrooms, even the honey.
These things will never return” (RAPY community leader, 2005). Industrial logging is often
perceived by local people as a cause of impoverishment.
Selective cutting of a few very high value trees per hectare for export results in the waste of a
huge amount of exploitable timber. Research by the GLHRP (2006) has shown that in a forest
of 200 hectares, about 395 m3 are harvested (around 3% of the potential exploitable). The rest
(10,955 m3) is simply left abandoned on site 56 . These first cuts generally result in the cutting
area being subsequently burnt for conversion to agricultural use, often by migrant or displaced
people, which causes conflict with local communities.
There is an attempt to set up networks to monitor the proper use of natural resources. For
example, the Natural Resource Network (or RRN) which is coordinated from Kinshasa by
CENADEP (the People’s National Education and Development Support Centre), has ‘focal
points’ in each province and territory in North and South Kivu. These ‘focal points’ are
responsible for disseminating and collecting environmental and social impacts of natural
resource extraction.
A soaring population growth combined with the influx of refugees and displaced persons
accentuates the pressure on forest ecosystems. For example, in March 2007 the OCHA
recorded 94,000 displaced persons and returnees in the Kalehe territory of the Walikale forest
region, more than 100,000 in the Rutshuru territory and almost 150,000 in the Irumu territory.
In just these three territories, the level of fuel wood consumption is 257,000 m3 per annum 57 .
This study uses mainly witness statements and document searches for its analyses, and we
acknowledge the need for a more in-depth study of the aspects mentioned above, in particular
the impact of fuel wood consumption on local forests.
• Harmful effects on human health
The relationship between the incidence of malaria and deforestation has long been
established. The United Nations notes that ‘Trends ranging from forest clearance to climateinduced habitat changes also appear to have impacted certain populations of mosquitoes, ticks
and midges, altering transmission patterns for diseases like malaria and lyme disease’ (UN,
2005 58 ). Moreover, high concentrations of male workers, often with low levels of education,
and enjoying regular cash income in places where the income of female population is very
low, increase the rate of HIV transmission in the local communities (Counsell, 2007).
Implementing a long term project to increase the contribution of the timber trade to local
communities should:
- Capacity-build stakeholders from local communities;
- Explore ways to develop community-based forestry;
- Measure the impacts of logging practices on the health of individuals and their local
communities.
56
The logistical difficulties and the cost of transport as a proportion of the total price of the timber increases the
pressure to fell very high value timber species.
57
Delvingt (1994, in Ministry of Planning, 2000) estimates the annual consumption of fuel wood for a population
of 750,000 refugees to be 560,000 m3 (Ministry of Planning, 2000).
58
Despite net gains, humans’ treatment of nature significantly threatens health, UN News Centre, consulted April
2007,
http://www.un.org/apps/news/storyAr.asp?NewsID=16874&Cr=health&Cr1=&Kw1=health&Kw2=malaria&Kw3
=forests
Page 66
• Land and related legislation issues:
The creation of national parks and reserves has forced people to leave their customary lands
and reduced the amount of land available for local communities to live on, whilst generating
new territorial conflicts. For example, Ninja’s local communities are in conflict with the
Kahuzi-Biega National Park authorities due to the extension of the buffer zone which
increased from 60,000 to 600,000 ha between 1966 and 1975.
In both North and South Kivu, major stretches of land will be bought up for agricultural use,
which will then lead to serious tension between livestock farmers, crop farmers and foresters.
Timber merchants accuse farmers of destabilising the market by selling cut timber from their
clearing operations at prices below those achievable by the logging companies (Department of
the Environment staff member personal communication, Bunyakiri-Hombo, 2007).
There are also many inconsistencies between local and customary land rights versus existing
laws and institutions. The lack of clarity between traditional land ownership rights and current
legislation does not benefit the majority of the population, rather it favours a few. “In Ituri,
there isn’t a hectare of land left which isn’t subject to some customary right of ownership or
other, despite the fact most of the forest is described by local decision-makers as being
effectively unoccupied” (Long, 2007).
Page 67
8 Conclusions and Recommendations
The timber trade in eastern DRC supplies the construction industry in the region and provides
employment. Due to poor governance, however, the revenue generated by the timber sector is
only a fraction of what it should be, and its distribution and use are often questionable.
Timber extraction contributes little to the economic development of rural and forest
dependent communities in eastern DRC, and does not follow any form of forest management
strategy. Therefore, the long term potential of the timber trade to support economic
development both in the DRC and the region is unclear.
The major conclusions of this study and associated recommendation for action are presented
below.
1. Conclusion: There is little social justice in forest exploitation in eastern DRC. This
situation is contributed to by the lack of clarity regarding legal rights of access to
standing timber (trees) and a lack of adequate mechanisms for the allocation of logging
permits. It is essential that rights of access and permit allocation mechanisms are
clarified, and that legal instruments can be developed to support them. Until then, the
timber cut and traded will continue to be acquired outside established legal procedures
and will provide limited returns to forest communities.
Action: Organise meetings and workshops with relevant government, private sector and civil
society stakeholders in DRC to:
1) Present the current forest policy – as per the shared vision of the central government and
the donor and NGO community
2) Inform them of the current legal procedure for the allocation of forest concessions and tree
cutting permits at the national and provincial level
3) Consult on forest policy direction and development, particularly on the participatory
development of the forest zoning plan to ensure that local people’s forest use/ownership rights
(including indigenous peoples) are recognized, and the interface between macro and micro
level land use planning is clear.
In preparation for these meetings we recommend the production of briefing documents on the
different subject areas to be discussed. These documents should be recognised and accepted
by the government at the national and provincial level, and be drafted by a small working
group which includes representatives of the main stakeholder groups mentioned.
A website should be created for the civil servants, traders and civil society, to increase the
transparency, of the process. Once the procedures on registration and cutting permits have
been clarified, transparency could be further increased by including in the website details on
the logging concessions, authorised traders, laws, registered forestry companies and
shareholders and other required information (e.g. market flow volumes and prices published
by Central Bank in each Province). Local press communications should also document the
above.
Page 68
2. Conclusion: The procedural requirements of the trade regime in DRC need to be
clarified, including the identification of the authorities that the legal responsibility to
control trade in timber 59 .
The under-declaration of DRC timber by traders and the under-valuation by officials upon the
arrival of timber at the main markets of Uganda and Kenya, is resulting in substantial loss of
tax revenues. Since the losses are small as a percentage of overall revenue collection, these
countries may be reluctant to make recovery a priority, but efforts should be made to
overcome this reticence.
There is also confusion among traders and among different parts of government in Uganda
about the exact regulations governing imports, transit shipments, domestic harvesting and
export. 60
Action: With relevant support, the DRC government should produce an official communiqué
detailing all institutional responsibilities, taxes, and identifying the laws on which they are
based for the trade to be legal i.e. a vulgarization of texts by the Governmental services and
the FEC. Seminars should be organized for the dissemination of information to traders,
customs officers and other enforcement agencies in both exporting and importing countries to
build awareness and enhance enforcement.
This work should be undertaken in parallel with action proposed with conclusion 1 which is
targeted at policy development on forest rights and considered separate.
The Ugandan and Kenyan governments should be informed of the process and results and
should undertake its own capacity building and monitoring programme to ensure that a
greater proportion of the revenue on timber arriving from DRC is captured.
The Ugandan authorities should urgently clarify the appropriate regulations governing
harvesting and trade of timber in Uganda, and publicise them to DFOs, URA officials, and
traders.
3. Conclusion: Armed groups continue to be involved in the timber industry, including
timber trade and transport, although the role of the timber industry in funding and
perpetuating conflict in east DRC has declined in recent years. Disputes over the rights to
forest resources continue, and are perpetuated by the lack of legal clarity mentioned
above.
Action: Provide training and ‘outreach programs’ to national armies on aspects related to
natural resources, such as rights of local communities, information on legislation related to
the natural resource sector and road ‘taxation’. This should include a ‘training of trainers’
programme to ensure the sustainability of such an initiative. The possibility to include this
material systematically in military induction and training programmes should be investigated.
Arrange briefings to higher level military personnel. Investigate the potential for audits of the
use of military equipment such as trucks, to raise and address governance issues within the
DRC army.
59
Trade here is taken to mean felling and processing timber, sale, transport and export. It therefore encompasses
the taxation regime.
60
For example, can Mahogany and Muvule be legally harvested in Uganda? What timber products can be
exported, and does it make a difference if the source material was imported? Do transit shipments need to obtain
movement permits from DFOs?
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4. Conclusion: There is no evidence that revenue collected from the forestry sector is
delivering significant benefits to local populations. The tax system involves many official
and informal taxes levied by different bodies. The system is non-transparent and
burdensome for companies active in the timber sector.
Action: Following on from the results of the actions above, review the structure of the tax
regime with a particular focus on impending decentralisation. Examine revenue collection at
the provincial level and redistribution mechanisms, and identify revenue authority toolkits
that are most applicable in the region. This should be undertaken in coordination with other
donor programs in the region, to ensure that the options identified are consistent with or
inform the overarching direction of national fiscal reform. Increasing revenue transparency
should be a key objective of the research and solutions proposed.
In DRC, identify the mandate and skills of each of the civil services involved and reduce
overlap. Simplify the tax system. Support collaboration between the various services in
charge of tax collection and of control of technical aspects of forest management. Manage tax
revenues at the local level to facilitate local development, notably short-term taxes EAD vs.
the local communities of the exploitation areas.
Increase transparency in forest revenue receipts at the national, provincial and local levels,
especially the 40% area fee at the Provincial and Territory level, through regular
publication/public notice mechanisms.
In Uganda, improve the calculation and collection of taxes due on timber by training and
raising awareness within URA. Each sector must make its own effort to collect taxes if there
is to be an impact on tax collection targets at the national level.
Following clarification of the procedures, sanctions for non-compliance should be identified
together with those responsible for their enforcement.
5. Conclusion: In the current post-conflict situation, considerable quantities of timber
are able to pass through DRC’s and South Sudan’s borders without authorisation
and documentation; furthermore the rules applied on the ground vary between border
posts. Similarly, it is not clear if customs officers at the South Sudan border at Kajo Keji
are aware of the moratorium on harvesting and export of Teak and mahogany.
Action: Importing and exporting countries should introduce a limited number of official exit
and entry points for legal timber, and ensure that wood passing via other routes is
intercepted 61 . This should be coupled with precise requirements for legal documentation to
accompany timber passing through the legal entry points.
Provide MONUC with the mandate to support customs officers in the DRC.
Importing countries should ensure that specific export prohibitions in source countries are
mirrored in their import regulations, for example if the export of logs is banned in DRC, then
Uganda should ban the import of DRC logs.
The customs officers at Kajo Keji in South Sudan should be officially informed of the
regulations on the trade in teak and mahogany.
The initiation and following through of the points above may require a more detailed study of
certain aspects of the timber trade, such as the difference between formal, informal and illegal
trade, as well as the trade in other forest resources such as fuel wood, charcoal, and artisanal
timber use.
61
This is a step taken with some success elsewhere, such as between Indonesia and Malaysia.
Page 70
6. Conclusion: There is no adequate documentation, reliable data collection, or
independent monitoring of the trade in timber and timber products, nor a chain of
custody system. This makes it difficult or impossible to verify the origin or volumes of
timber trade.
Action: Review chain of custody (CoC) systems operating elsewhere, and implement a CoC
system suitable to eastern DRC. Implementation of the CoC will increase the quantity and
quality of data for cross checking against the revenue receipts from the forestry sector and
provide a statistical base to guide law enforcement and inform the formation of future
policies. The evaluation of possible future CoC systems should include a capacity and needs
assessment of the monitoring institutions in the DRC government that will be charged with
oversight and implementation.
In the short term, increase the capacity of local NGOs to monitor forest exploitation, and
explore NGO-government partnerships to support governance and generate more data on the
forest sector. Representatives of civil society could, for example, be registered as “honorary
forest officers” so that they have a right to independently monitor and report illegalities in the
timber trade. Lessons from other countries can be drawn from successful examples of this
kind of approach.
To increase respect for existing official procedures and documentation systems, provide
information to traders on the legal procedures required to purchase, trade and export timber
(e.g. necessary licenses, documentation required by the producer to assure the legality of the
product; taxes to be paid). Disseminate amongst producers and traders information on the
sanctions for non-compliance of these procedures.
7. Conclusion: The relocation of the timber market of Kasindi to Uganda, and the
ensuing loss of jobs and revenue for DRC has created tension in the area and is a cause
for concern.
Action: Continue the negotiations started with the “timber conflict resolution meeting” in
Kasese, Uganda in March 2007. Identify specific conditions for the return of the market to
DRC and introduce an action plan to ensure that these conditions are met.
8. Conclusion: There is currently little knowledge at the village level of forest resource
based development options available, or of the true market value of timber at the
lowest supply levels. This leads to undervaluation of the resource by resource owners
(local communities represented by village leaders), high levels of waste in processing,
and over-exploitation. The availability of this short-term and low (cash or barter) income
to communities or village elites may also be hampering the adoption of other potential
development options.
Action: Mount a public education program to raise awareness of the value of forests and the
social and environmental functions they serve. Content could be guided through existing or
commissioned research.
Identify and discuss development options for communities living in forest areas. Identify
forms of communication to reach out to local communities in eastern DRC.
Research alternative sources of income for local populations, such agriculture and
agroforestry development, and non timber forest products, develop markets for environmental
services.
Support the establishment of cooperatives and micro-credit facilities.
Page 71
9. Conclusion: There is no protection for, or formal training of, employees working in
the timber sector in the areas of production in DRC.
Action: Research trade unions (e.g. bombeurs, scieurs de long) at national and regional levels
to examine the potential formation of sector unions, and the role that sector unions may play
in the protection of worker’s rights and the provision of training to increase efficiency and
reduce waste.
10. Conclusion: There is insufficient forest inventory data to support an evaluation of the
ability of forest resources to meet the demands of the trade.
Action: Undertake a forest inventory to assess the current state of the natural forests in
eastern DRC and South Sudan, and relate the results to the current rates of timber and fuel
wood extraction. If the rates of extraction are thought to be unsustainable, governments must
act to reduce them, while also examining how to improve the supply of timber from
alternative sources, such agroforestry schemes. A work plan with benchmarks and targets
should be set.
11. Conclusion: Most timber traded in the Upper Great Lakes region comes from ‘natural’
(non-plantation) forests. The large demand for timber has increased the pressure on
natural forests to the point where regional demand for timber exceeds maximum
sustainable yield in most countries, except perhaps in DRC.
Action: Kenya and Uganda should continue to improve their capacity to meet their own
wood needs domestically, in order to reduce their demand for DRC timber.
Where best practice in plantation/agroforestry projects can be guaranteed, provide grants to,
for example, the Sawlog Production Grant Scheme in Uganda 62 . Any grant support should be
conditional on best practices for plantation establishment.
Conduct additional research on the supply and demand of charcoal/fuel wood, and on options
to mitigate against negative impacts and gain better understanding of harvesting practices in
artisanal logging and the informal trade.
12. Conclusion: The vast majority of the timber leaving DRC is undried rough sawn planks.
Very little downstream processing occurs. The current systems of cutting, processing
and trade result in considerable wood waste and reduce the potential value to the local
economy.
Action: Research solutions to increase the investment in downstream processing. These
solution should consider i) current initiatives to move towards non-extractive forest
management and ii) processing installations that are compatible with the anticipated small
scale forest rights allocation models, rather than industrial scale operations.
Undertake a feasibility study to assess whether it is possible to support registered community
groups to:
i) Access capital to buy sawing equipment
ii) Install kiln drying facilities to increase the value added of timber within DRC.
Such support could encourage local communities to demarcate and protect parts of their
forests (as part of the forest zoning plan), and to develop longer term forest management
62
http://www.sawlog.ug/
Page 72
plans. Communities that develop and implement management plans should then be eligible
to sell their timber in premium markets, such as those which only require minimum FSC
standards.
Seek investment in technologies and training to reduce waste.
13. Conclusion: Cutting of natural forest timber in East DRC is focused on African
mahogany (Entandophragma sp.), which is becoming increasingly rare.
Action: Producer countries should list African mahogany on Appendix III of the Convention
on International Trade in Endangered Species (CITES) 63 .
14. Conclusion: industrialisation of the forestry sector is inappropriate at this stage,
given the weak governance framework in which the timber trade operates.
Action: The donor community should support the government in its efforts to maintain the
moratorium on the allocation of large scale logging concessions until all of the conditions set
for its lifting are met.
15. Conclusion: Donor coordination is crucial to tackle the complex problems
surrounding resource extraction and trade in the region. Stronger coordination is
required to capitalise on the current peace.
Action: Identify relevant governmental representatives in DRC, Uganda and Southern Sudan,
and help them agree on a joint action plan for cooperation on forest exploitation and trade.
The relevant governments should engage with one another through a suitable regional body
(such as COMESA) and link the trade issues identified in this report to international
commitments such as those made under the 2003 Africa FLEG declaration. They should
agree on a detailed action plan, to include: measures to improve cooperation at border posts,
thereby increasing rates of revenue capture and improving governance; the establishment of a
principle of mutual recognition of timber production and trade rules; and support for anticorruption activities, such as auditing mechanisms and judicial reform.
Failing this, the international community must independently ensure that priority areas for
action are consistent across their programmes and strongly advocated for. Priorities for such
any initiatives should include a particular focus on good governance, legal reform, including
the development of forest zoning plans consistent with the principals of FPIC. A futher
priority is capacity-building of relevant ministries and civil society organisations to advocate
on, and monitor, forest trade.
Help establish a network of relevant civil society groups and local community representatives
in DRC, Uganda and Southern Sudan, and assist them to produce a joint plan of action plan.
Guarantee the involvement of civil society and local representation through financial and
non-financial support, and select national NGOs to disseminate information on policy and law
reform.
63
Such a listing is not a ban on trade, but gives importing countries the power to intercept shipments of wood
sourced illegally in the country of origin and provides a useful tool for monitoring legal volumes in trade. It can
also lead to increased international attention & support (from both NGOs and donors) for ensuring legal &
sustainable trade.
Page 73
16. Conclusion: There are no requirements on the legal status or sustainability of timber
procurement (public or otherwise) in the region. Such a standard is required to create a
niche for legally and sustainably produced timber.
The lack of the requirements mentioned above means that timber demand from
developed countries can yield little incentive to improve the sustainability of the timber
trade, and that drivers must be created at a regional level. However, regional
Governments procure large volumes of timber as part of development investments,
often funded by donors. Governments and donors therefore have a special responsibility
to make such timber procurements responsibly.
Action: Pursue the introduction of timber procurement standards in both Government and
donor institutions and private sector (trade) associations. Initially, the standards demanded
from suppliers should be modest - such as the FSC Non-Certified Controlled Wood Standard
that requires timber to be sourced from a “non-controversial source” and supplied with proof
of Chain of Custody (as outlined in Recommendation 6 above) - and be improved over time.
In addition, a commitment should be made by all governments in the region to procure timber
for public programmes more responsibly. Adapting internationally defined procurement and
trade certification standards would kick-start market-led initiatives for responsible timber
trade. In this regard the donors, through budget support and other development programmes,
could work with regional governments to set an example for the private sector.
Revise the functioning of the FRCF in DRC. Identify best practices for the restoration of
degraded forest in private, communal, and concessions land, and also on wood production
systems based on agroforestry. Introduce working plans with benchmarks and targets for
establishing these best practices.
Page 74
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