Abandoned logs turn out to be collateral in an illegal deal

Editor’s note: This story was originally published by The DayLight and is republished here as part of a collaboration with the Daily Observer. Varney Kamara, with Daylight

An illegal deal for a company to buy a batch of illegally felled and abandoned logs from a forest in Grand Cape Mount County has stalled after authorities discovered the timbers were security for a lawsuit.

In 2018, Alma Wood Corporation (Liberia) Limited felled the logs under a logging concession that the forestry industry calls Timber sales contract Zone 16 or TSC A16 in Gola Konneh district. The owners of the company reportedly fled the country, leaving the logs there until Forestry Development Authority (FDA) canceled the contract last year.

Sun Yeun, the original contract holder, and the area’s Community Forestry Development Committee (CFDC) attempted to sell the logs to East End Logging Company, owned by former justice minister Benedict Sannoh, earlier this year. But the FDA disapproved of the deal because Alma Wood had used the logs as collateral to secure a US$643,000 loan from Afriland Bank.

The bank sued Alma Wood after the loan period expired. El Zein Hassan, the company’s CEO, was arrested but released on bail as Sky Insurance Company posted bail. Hassan would later flee the country and the court ordered the insurer to seize the logs, according to several people familiar with the matter. (Our own efforts to obtain the court filing on the case did not materialize. We will update the story with the details of the document once we obtain it).

Afriland Bank and Sky Insurance declined to comment on the issue.

The forest where the logs were harvested was flawed from the start. Covering 5,000 hectares, the TSCs are for companies that hold at least 51% Liberian equity. They were meant to empower Liberians after 14 years of civil war in which local businessmen were marginalized by foreign companies that supplied arms to warring factions. But TSC A16 was awarded to Sun Yeun, 98% of whose shares are held by a Chinese businessman named Wei Zhang, according to company legal documents.

Furthermore, the subcontracting agreement between Sun Yeun and Alma Wood was illegal because the latter company’s stakes are shared equally between Hassan, a Lebanese and Radwan Wardwiche, a Senegalese tycoon, according to Alma’s legal documents. Wood.

The contract also exceeded its legal deadline by no more than five years, remaining active for more than a decade after being issued in 2009. The FDA board had illegally extended the contract alongside 10 others in 2017. but recalled this decision last March. year.

Some of the logs Sun Yeun harvested and left behind at his log yard in Mafala, Grand Cape Mount County. Daylight/James Harding Giahyue

Josephus Banks, CEO of Sun Yeun and one of the company’s two Liberian shareholders, says the company is not majority Chinese-owned, but has provided no evidence. He also argued in an interview with The DayLight that his outsourcing deal with Alma Wood was not illegal.

The logs in question are abandoned in accordance with the law. Depending on their location, logs are abandoned if they are “unattended” between 15 and 180 working days, depending on Regulation 116-17 on abandoned logs, lumber and wood products. In this case, the logs are abandoned because they have remained in the forest for more than 60 working days.

The banks blame the abandonment of the logs on the FDA.

“FDA helped bring these logs to present today. When Alma Wood’s contract expired, I wrote to the FDA advising them of the logs on the liner. The FDA delayed and I wanted to sell at the time,” Banks said. Locals also said they informed the FDA of the newspapers in 2019, with Ruth Varney, its western region manager, confirming this to The DayLight in a cellphone interview.

In April of this year, the FDA granted all logging companies operating in the country a one-month grace period to report the trees they felled, although the FDA would have to have the production records and export companies.

“We should be headed to the auction this month (June) [in the eastern region] then the exercise will continue in the northern region, then in the southern and western part,” said Mike Doryen, director general of the FDA, in an interview with The DayLight.

“The court is going to make a decision, and that’s what we will follow,” Doryen added in reference to the Alma Wood case.

It would have been another violation if the FDA had approved East End’s purchase of the abandoned logs. The Abandoned Log Regulations require the FDA to transport the logs to a safe location and re-enter them into the government tracking system known in forestry as the Chain of Custody (CoC). An auction can only take place after a court warrant if no one claims the woods after months of mandatory legal notice. If Sun Yeun wants to redeem the logs, he will have to do so within 14 business days of the seizure by the FDA, provide proof of ownership, and pay an administrative fee for each of the logs. These requirements are not yet fulfilled.

But the deal between Alma Wood and Sky Insurance in Monrovia dashed the hopes of locals, who wanted the logs being sold to get some overdue benefits now that the TSCs no longer exist. Sun Yeun owes villagers here and a nearby concession (TSC A15) a total of US$190,900 for land fees, according to official records. According to Jaycee Farr, general secretary of the community forest development committee, which manages the profits generated by logging, he also owes affected communities $3,000 for scholarships and has not built 10 latrines and a hand pump.

“We are happy that people have come here to buy the logs. If the logs are sold, the communities will be able to get something as a benefit,” Farr said. “If the government says TSCs are cancelled, and companies then owe communities, how will communities benefit from everything they own or everything that has been taken away from them?”

Banks, CEO of Sun Yeun, refutes Farr’s comments as a “blatant lie”.

“Of all the TSCs operating in this country, I was the strongest TSC holder. We (Sun Yeun) brought over $5 million worth of equipment, new, unused,” he said. said, even though company records show otherwise.The $190,874.50 his company owes the two communities is the second-highest debt for land rental fees—after Bulgar and Vincent Timber Company—among former TSC holders, according to official documents.

At an annual meeting of the Liberian government, European Union and civil society in March, the FDA promised to work with the National Union of Community Forestry Development Committees (NUCFDC) to settle the arrears of TSCs. , according event recordings.

Doryen said the FDA was committed to this plan. “Yeah, we haven’t (regarding benefits and other issues) but we will now,” Doryen added.

Editor’s note: This article is part of a series on abandoned logs, which highlights the forestry sector’s failure to prevent the waste of much-needed forestry resources across the country. Funding for the story was provided by the Liberia Media Center (LMC). The DayLight has retained complete editorial independence over its content.