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Tristezas Tropicais:

More Sad Stories from the Forests of Zambézia

Catherine Mackenzie with Daniel Ribeiro

May 2009

Amigos de Floresta and Justica Ambiental

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Table of Contents 1. Introduction 2. Annual allowable cut and volumes licensed 3. Decrease in the number of simple licence operators 4. Increase in the number of concessions

4.1 Status of the concessions 4.2 Ownership of the concessions 4.3 Quality of concession management plans 4.4 Quality of concession management 4.5 Reforestation 4.6 The Permanent Forest Estate 4.7 Community Concessions

5. Forest Law Enforcement 5.1 Checkpoints 5.2 Cooperation with local communities 5.3 SPFFBZ computerised data base 5.4 Infractions: Official accounts 5.5 Auction of illegal timber 5.6 Infractions: unofficial accounts and local opinion

6. “The 20%” 6.1 Problems 6.2 Irregularities

7. In-country processing, industrial capacity and employment 7.1 Sawn wood production, sawmills and industrial capacity 7.2 Markets for sawn timber in China 7.3 Employment in the Forest Sector 7.4 Government Support for industry: China vs Mozambique

8. Control of Timber Export 8.1 Port Management 8.2 Customs 8.3 Official statistics 8.4 Cases of illegal export

9. Remaining stocks of commercial timber 10. Conclusions and Recommendations

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Table 1: Actual licensing and harvesting in Zambézia; 2000 – 2007 Table 2: Number of simple licences and concessions issued, and volumes licensed in Zambézia, 2003-2007 Table 3: National origin of concession holders (with approved management plans) Table 4: Government reforestation efforts: nurseries, seedlings and areas forested, 2000-2007. Table 5: Forest law enforcement in Zambézia: Staff numbers, infractions, products seized and total fines, 2001-2007 Table 6: Progress on Distribution of the 20% to communities in Zambézia, 2005-2008 Table 7: Production of sawn timber in Zambézia, 2001-2007 Table 8: Export prices from Quelimane for sawn Umbila (fob) Table 9: Official statistics on export of timber and sawnwood: SPFFB, Customs and Cornelder, 2002-2007 Table 10: Pau preto licensees, licensing and legal entitlement Table 11: Customs records of export of pau preto Table 12: Under-reporting of pau preto exports Figure 1: Export of logs and sawn timber from Quelimane in four quarters of 2007 Figure 2: Export of logs and sawn timber from Quelimane 2004 – April 2009 Photo 1: Spatial control of timber cutting by SPFFBZ Photo 2: Public auction of seized timber: starting price of around $100/m3, about 1/3 of the local market value of the timber. Photo 3: Truck loaded with chanfuta timber, leaving the illegal trade point in Licuari Photo 4: “Sawn timber” of pau ferro en route to Quelimane port Photo 5: Cheap quality sawmill of an Asian timber buyer in Quelimane. Photo 6: Mozambican and other African logs in a wholesale logyard near Zhang Jia Gang Port, near Shanghai Photo 7: Mondzo used to make ornate furniture, near Shanghai Photo 8: Jambire used to make cheap footstool for tourists, Nanxun, near Shanghai Photo 9: Antique Chinese table showing matching of grain Photo 10: High quality Chinese carving, incorporating character of raw material Photo 11: Semi-processed furniture components originating from Viet Nam, in a factory near Shanghai Photo 12: Chinese sawmills operations and their products are not all high-tech Photo 13: Pau Preto from Zambézia in a warehouse at the Furen Market, Shanghai, China Photo 14: Pau preto log end, with sigla of Zambézian simple licence logger Photo 15: Villagers in Mocuba district, sitting on one of many logs abandoned by a simple licence operator who cut timber in their forest in 2007.

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Box 1: Story of a Simple Licence Logger Box 2: On managing a concession Box 3: Comments on Law Enforcement by Acting Head of SPFFBZ, Eng Chibite Box 4: Story of a “Furtivo” Box 5: Story of a community: Bive/Makwia Box 6: An exporter – TTT Timber Box 7: Setting up a forest industry in Zambézia Acknowledgements The research for this study was a collaboration between Justica Ambiental, ORAM and Amigos de Floresta. Eduardo Nhabanga of Justica Ambiental and Gil Jaime of ORAM Zambézia collaborated in the field work in Zambézia. Daniel Ribeiro also participated in the field work in China, where Shao Yang and Zhang Xue Mei provided invaluable technical advice, logistic support, translation and great companionship for the 2 week field work. Toby Dewar, of Christian Aid in Mozambique provided logistic support during the study. The final document was translated into Portuguese by BESTEX. Many others, who wish to remain nameless, gave generously of their time and information, for which we are grateful. Like the original study, this work was generously funded by Christian Aid, and thanks are due to Salomao Maxeiai for his support. Oxfam Novib kindly supported the field work in China. Abbreviations AAC – Annual Allowable Cut DDA – Director Distrital de Agricultura/District Director of Agriculture DNFFB – Direccao Nacional de Florestas e Fauna Bravia/National Directorate for Forests and Wildlife (became DNTF in 2006) DNTF – Direccao Nacional de Terras e Florestas/National Directorate of Lands and Forests DPA - Director Provincial de Agricultura/Provincial Director of Agriculture MTN – Meticais Novo (April 2008 $US 1 = 24 MTN) OIIL - Orcamento de Investimento de Initiativos Local/Local Initiative Investment Fund ORAM – Associacao Rural de Ajuda Mutua/Rural Self-Help Association (local NGO) PROAGRI – Sector-wide donor support programme for agriculture. SPFFBZ – Servicos Provincias de Florestas e Fauna Bravia da Zambézia/Provincial Forest and Wildlife Services

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Tristezas Tropicais:

More Sad Stories from the Forests of Zambézia

1. Introduction: An End to Forestry or a new beginning? “Nao ha mais madeira!” (There’s no more timber!) One industrial concessionaire we spoke to was adamant that this was the way we should begin our update on “Chinese takeaway!”1, the 2004 study of forestry in Zambézia province in Mozambique. “It’s not even worth the trouble you doing this research now,” he continued, “it’s all too late. The valuable timber is all in China already; only the small and poor quality trees are left. There’s no future to the processing industry here now”. Other industrial operators agreed with him, adding “The forest sector is much worse than four years ago.” and “Everything is out of control. The situation is already “post-crisis””. “Things have improved greatly since 2004.” This is how the Governor of Zambézia,,Carvalho Muaria began his reply to our introductory question about the performance and developments in the forestry sector in the province over the last 4 years. He and the Provincial Director of Agriculture (DPA), Mohamad Vala. went on to explain how 3 new forestry check-points had been established at strategic places in province and more were planned, an international company had rehabilitated and taken over management of the port, so timber export was much better controlled, communities had started receiving the 20% of the licence fees as required by the 1999 Law, the number of annual simple licences was being brought down and the number of 50-year concessions was increasing in

their stead2. Licensing is now well within the annual allowable cut established by

the Zambézia inventory, and all of the 7 main commercial species now have to be processed in-country before export, resulting in much greater industrial

1 It would be fairer to say “takeaway to China” – emphasising the destination rather than the actors.

Not all the traders are actually Chinese, there are also Indians, Malaysian, Singaporeans,Taiwanese,

European and some multinationals are involved – such as OLAM. As with other parts of the economy, the

wood processing industry in China includes many foreign investors who are manufacturing in China to

supply a foreign market.

2 Under Mozambican law, there are two “regimes” for forest harvesting, simple licences, and

concessions. Simple licences are valid for one year, for a maximum of 500 m3 in a specific area of around

5000 ha and only Mozambican nationals are eligible. Applications must be made by January of any year,

and the approval process includes demonstration of an operator’s technical capacity. Concessions are valid

for 50 years and should be large enough to support an industry. International individuals and companies

are eligible. Applications can be initiated any time. The approval process should take about 9 months, and

involves various steps, which include preliminary approval at the provincial level, preparation of a forest

inventory and management plan which establish the annual harvesting quota and its approval by DNTF,

and culminates in an official contract between the operator and SPFFB and the establishment of an

industry. Government policy is to phase out simple licences.

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capacity and employment generation. Nurseries for native species were operational and the Provincial Forests and Wildlife Services (SPFFBZ) and DPA had good working relations with civil society. He hoped that our report would be positive. On the face of it, these were encouraging words. Indeed, the points raised responded to some of the main concerns and recommendations in the “Chinese Takeaway” report, and seemed to go some way to explaining why many government officials had dismissed the report, as “out-of-date”, at its launch in Mozambique in early 2007. How to make sense of such dramatically opposing viewpoints? This paper sets out to explore the facts behind both sets of answers, and other developments in the forestry sector between 2004 and 2008. Like ”Chinese Takeaway!”, this report is kept as objective as possible: there is no advantage in criticism for its own sake, and great disadvantages if it leads to the abandonment of positive initiatives. We also want to be practical and realistic about what can be achieved in Zambézia, and not let “the best become the enemy of the good”. To keep this report brief, we simply take each of the 8 main assertions made by the Governor and the DPA regarding progress in the forest sector governance, review the situation in 2004, and examine the facts behind the situation found in 2008. We finish off with a few conclusions and recommendations3. Methods The field work in Zambézia took place from 28 April to 27 May 2008. Some additional information obtained in April 2009 is also included, and a separate report is available on the impact of the global financial crisis on the forestry sector in Zambézia (Mackenzie 2009). As in 2004, the main methods employed were analysis of secondary data, mostly from government sources, key informant interviews, field visits to forest communities and direct observation. Although in 2004 some people were caught unaware and were quite candid with us, this time many key informants were much more guarded, and numerous people refused or avoided meeting with us. As described below, we received poor cooperation from the DPA and SPFFB Zambézia, but Customs and Cornelder (the private company managing the port) were quite open and helpful. For this update report, we had the fascinating opportunity to follow Mozambican timber into the forest product markets and factories of China, to see some of the realities of the incredibly successful forest industry there and to explore the feasibility of processing by community concessions in Zambézia. Findings from that visit will be incorporated in this report where relevant, and a full report will be available separately.

3 For those interested, a fuller 60 page version of this report is available, but only in English.

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2 Annual allowable cut and volumes licensed In 2004, the annual allowable cut (AAC) for Zambézia was a contentious issue and was discussed in detail in “Chinese Takeaway”. The inventory then in official use was the 1994 national inventory of Saket which prescribed an AAC for Zambézia of 17,600 m3 for the seven most important commercial species. Despite this, as Table 1 indicates, from 2000-2004, SPFFBZ routinely licensed by 65-239% above that limit. Some industrial operators objected that this was already overharvesting. A new provincial inventory, conducted in 2002-044, concluded that Saket had been a massive under-estimate, and recommended quadrupling the AAC for those species to 72,533 m3 5. Although National Directorate for Forests and Wildlife (DNFFB) admitted there were technical problems with the results, and delayed officially releasing it until 2005, SPFFBZ started using the figures in 2004 to justify its high levels of licensing. We argued then that the new AAC was not sustainable, and that given the methodological problems it should be subject to independent technical review. By 2008, the new AAC was firmly established, as further illustrated in Table 1. Against these extraordinarily high estimates of sustainable harvest, the assertion of the Governor and DPA that licensing remained within the AAC is thus ostensibly correct. Moreover, official licensing reported by SPFFBZ is actually substantially less than the new AAC – typically around 35,000 m3/yr - which SPFFBZ uses to claim its approach to management is positively conservative. Furthermore, according to SPFFBZ annual reports, in most years only 70-80% of the volume licensed is actually harvested.

4 The inventory was part of the Finnish-supported Projeto Maneio Sustentavel de Recursos

Florestais/ 5 Details of the AAC are provided in Appendix 1, breaking down the quota by species and district.

What is not immediately apparent from the AAC figures is that it covers all forest types and the entire

provincial forest area of 12 million ha. Only the L1 and L2 forest types are dense enough to be

commercially exploitable, and only 44% of the commercial volume is found here.

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Table 1: Actual licensing and harvesting in Zambézia; 2000 – 2007 Year Licensed ** m

3/yr Harvested*

m3/yr

Harvested as % of licensed

2000 28,043 n/a

2001 32,822 26,622 81

2002 42,175 33,200 78

2003 31,744 25,395 79

2004 35,870 23,932 66

2005 35,900 25,084 69

2006 31,259 24,765 79

2007 36,693 14,533 40

Source: SPFFB annual reports * Felled and removed from forest ** For the seven main commercial species Conclusion: The government’s figures do indeed support their assertions that the forests of Zambézia are being managed sustainably, using the criteria of licensing as a proportion of AAC. SPFFBZ consistently licenses less that the annual allowable cut volume established by the latest inventory. The question is, should we trust the inventory and thus the AAC, and believe SPFFBZ’s figures? Data presented in the next sections suggest that we should not.

3 Number of Simple Licence Operators In 2004, one of the most serious criticisms made of forest governance in Zambézia was that far too many operators were being licensed, and that despite official government policy to promote the concession regime and phase out simple licences, the numbers of simple licence operators increased every year from 2000-20046. In the 2003 harvesting campaign, there were 138 simple licence operators officially logging in Zambézia, and a further 12 industrial operators harvesting under simple licences while awaiting approval of their concessions. This was far more than the SPFFB had capacity to supervise, and in part accounted for the chaotic situation in the province. Cutting areas were not properly inspected prior to licensing to ensure timber was actually available, there was no permanent record of their location and in fact little effort was made to ensure operators only cut in the areas where they were actually licensed. Many operators were approved without having consulted local communities properly. Operators were licensed for 200-300 m3, when they had the capacity to harvest 3000 m3 , Controls were so lax that most did so.

6 It has to be admitted that part of the apparent increase in simple licence loggers from 2001

onwards was due to a crack down on the completely unlicensed logging that had taken place in the late

1990s.

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In 2008, according to the Governor and DPA, one of the most significant changes that had occurred since 2004, was a decrease in the number of simple licence operators, and a concomitant increase in the number of concessions. This shift in the balance between the two licensing regimes, they asserted, demonstrates not only that government policy is being implemented, but also that forest management is moving onto a more rational and sustainable basis. The DPA and SPFFBZ denied us access to the data on licensing (by operator, species and district) that we needed to accurately assess their assertions, and so we have had to rely on the information available in SPFFBZ annual reports. As in 2004, these reports are incomplete and the information in them inconsistent from year to year. The summary in Table 2 shows that the number of simple licence operators dropped from a maximum of 138 in 2003 to 91 in 2006, but then increased again to 99 in 2007. SPFFBZ could only estimate that there would be around 100 in 2008. This represents a total reduction of 28%. The proportion of the timber licensed to simple licence holders as opposed to concessions has also decreased from 92% to 61%. But does this demonstrate a move towards more sustainable forest management, and fulfilment of government policy? Table 2: Number of simple licences and concessions issued, and volumes licensed in Zambézia, 2003-2007

2001 2002 20031

2004 2005 20063

2007

Number of licences issued 276 336 706 863 115 101 113

Number of LS operators licensed 57 124 138 128 104 91 99

Number of concession applicants using LS licenses

20 16 n/a n/a n/a

Number of concessions licensed 2 2 11 10 14

Total Number of Operators 160 146 112 101 113

Volume licensed LS 32,682 42,175 29,4772

n/a 20,983 23,1514

22,203

Average Volume per LS 186 215 254 224

% total volume to LS 92 65 74 61

Volume licensed CF 2,267

11,340 8,1084

14,490

% total volume to CF 8 38 26 39

Average volume per CF 1,134 1,030 811 1,035

Total Volume licensed 32,682 42,175 31,744 35,870 32,323 31,259 36,693

Source: SPFFB Annual Reports; 1 some figures from Mackenzie (2006). 2 includes 3721 m3 to concession applicants using simple licences; 3 From 2006, the practice of issuing multiple licences to an individual operator ended. 4 data from DNTF annual report 2006.

The first thing to note, as mentioned above, is that while a reduction in simple licences did take place between 2003 and 2006, it increased again in the subsequent two campaigns. Similarly, while the proportion of timber harvested by simple licence loggers dropped from 93% to 65% between 2003 and 2006, it

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has remained persistently high, at over 60% since then, despite the increasing number of concessions7. So, implementation of government policy has at least stalled, and perhaps even reversed. The key question, however, is whether official licensing represents all the loggers active in Zambézia. According to most informants we spoke to, there has been an explosion in illegal licensing and completely unlicensed logging. In 2004, the Asian buyers secured their logs by providing simple licence operators with credit to pay for their licences and operational costs. But giving credit became too risky. Too many operators were side-selling, or defaulting entirely and, as described in more detail below, in 2005, the Asian buyers began to acquire their own concessions, and obtain licences of their own. So, many of the old simple licence loggers have had to start acquiring licences in other ways (See Box 1).

Box 1: Story of a Simple Licence Logger Sr A has been in the logging business since 2005, working in Zambézia and neighbouring Nampula, using his own simple licences, licences of others and buying/selling of wood from simple license holders. Before starting in logging, he was in the hotel business where he trained staff on how to serve guests, specially for the restaurant. After that he worked as a warehouse stock controller and he became a trader. He first started with buying meat from Malawi and selling it to Mozambican butchers and buying Mozambican maize and selling it to Malawi. In 2005 he got involved with wood. He started working with Pau ferro, Mondzo and Muaga and then added Jambire, Chanfuta and Umbila, which he sells into the local market in Beira. This year he is going to buy a simple license from someone else. He will either agree to organize and do all the work and then share the profit with license holder or he will pay double on the licence fees. He prefers the second option. Profits are going down. In 2005 transport cost was around 15,000 MTN, labour was around 5000 MTN and profits per truck load could reach around 10,000 MTN. In 2006, the costs were similar, but the better prices allowed for higher profits reach around 15,000 MTN per truck load. In 2007, the costs when up a lot, especially for transport. Tractors rent increased by 500mt per day, and because the timber is so sparsely distributed, they are indispensible. Trucks prices increased from 25,000 MTN to 35,000 MTN. Timber prices, however, stayed similar or decreased, so profits really went down and now its rare to get 10,000 MTN per truck load Many operators didn’t make profits, but he did, because he loaded the truck well… getting 35-45 logs. He has his own chainsaw and cut some of his wood, but got most of his logs from communities. He paid 100 MTN for each log and only took good ones (on average 6 -7 logs out of 10). Only good logs make good profit because the Chinese discount a lot in the measurement. Also truck space is expensive, and it’s a waste to take bad logs. It is becoming very difficult to find good quality pau ferro, and mondzo has become rare …. He’s now looking into other species and the national market. He cut pau ferro last year when demand was high. In total he cut one truck load of 11 tons and

got $300/ton from Olam. He made 20,000 MTN ($833) profit with that one truck load.

7 On average, a concession holder still only harvests around 1000 m

3 per year – this is just double the

maximum legal entitlement of simple licence loggers, and four times the volume they are reported to cut.

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One popular way to get a licence is to buy it illegally from SPFFBZ staff in Quelimane or from the field inspectors. Apparently, this kind of corruption is now common, with many more unauthorised staff issuing licences illegally, forging the signature of the head of SPFFBZ. One observer quipped that you are much more likely to see forestry staff out on the street cutting deals with loggers, than in the office doing their real jobs. Buying transport permits (guias de transito) or whole licences from another logger is another option, which seemed to be more prevalent in 2008. Part of the phenomenon appears that many simple licences are awarded year after year to people who are not actually loggers. They are typically closely connected with government and FRELIMO, and simply sell their licences on at a profit, effectively, getting money for nothing. This calls into question another assertion of SPFFBZ made in 2004 to demonstrate their sound management practices, that they award licences according to a logger’s years of experience, giving more experienced loggers bigger quotas. There has also been an increase in “furtivos”, the completely unlicensed loggers. Some furtivos cut and sell wood themselves, but many communities are also involved in this. Furtivos go around buying logs straight from villages, and sell them at various collection points, or to licensed operators. Sometimes communities cut on order from furtivos, and sometimes communities cut first and then go looking for a market. One concession holder reported being offered 100 m3 of pau preto from a community logger in the recent boom (see below). The regulation of simple licence logging was designed to ensure some level of sustainable harvest, operator competence and community consent. The illegal licensing described above bypasses all these checks and balances and brings chaos to Zambézia’s forests. In 2004, another major problem with simple licence loggers was overharvesting, and this is still happening, probably to a greater degree. The issues are basically the same. No operator gets the full entitlement of 500 m3 and most get only 200-300 m3. This quota can be exhausted in a couple of weeks, but the season lasts 9 months, and the logging teams (if they exist) just keep cutting. Sometimes, the unlicensed timber remains abandoned in the forest, because there’s no transport permit (or cash) to get it through the checkpoint and into town. Conclusion: According to the official figures, it is certainly true that the number of simple licence operators has declined by 28% since 2003, but it appears that this has been accompanied by an explosion in the number of illegal licences and “furtivos”. Overcutting by licensed operators still continues. The intended impact of the measure, to bring the sector under greater control, is still a very distant goal.

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4 Increase in the number of concessions In 2004, there were only 2 concessions operating in Zambézia, Madal and Sociedade Moveis Licungo, and a third management plan, that of Timberworld in Pebane had been approved. “Chinese Takeaway” demonstrated that two of the approved plans were technically unsound and would not ensure sustainable management. At that time, there were another 34 concession applications by 20 companies, in the approval process. Many had been in process for several years and some were simply ruses, never seriously pursued, but which enabled operators to obtain exclusive harvesting rights over a large area for a few years. Some serious operators complained their applications were delayed because the cost of preparing management plans - made prohibitively high by the government’s limiting of the number of consultants authorised to prepare them. At this time, the majority of Asians in Quelimane were only buying timber. Although some 15 companies with Asian connections had concession applications, they were not entitled to simple licences, so instead, to obtain timber, they financed local people to get their simple licences and equipment, and bought the timber from them. In 2008, the Governor and DPA told us the number of concessions has now increased. Although the official data on concessions is inconsistent and based on unclear definitions 8 according to our review of it and concession applications, there were 32 approved and contracted concessions, covering over 1.2 million hectares. According to the Acting Head of SPFFBZ, 21 of these concessions (with a total area of 908,288 ha) have established the required industry and are officially in operation. This is around 10 times more than in 2004, and a 70% increase over 2007. Information about these concessions, abstracted from management plans and SPFFBZ files, is summarised in Appendix 2. Another 16 concessions, covering a 611,545 ha are in the approval process. Applicants include 2 community concessions (see below), one Mozambican national and 3 local Zambézian industrial operators, 2 long established simple licence operators, 1 Malawian, 2 Libyans and 5 Chinese. One reason for this increase in concessions, is undoubtedly because the government finally had to enforce the deadline for completing application processes, in order to fulfil performance indicators set by donors for PROAGRI II. By 2004, operators had already been allowed to drag out what is supposed to be a 9 month application process, for up to 3 years. Following various protests from donors and promises from the government, 13 plans were produced and

8 A disturbing feature of the official statistics on concessions is how inconsistent they are between years

and between agencies. The annual reports of both DNTF and SPFFBZ more obfuscate than clarify the

situation. The terms used are “approved concession”, “approved management plans”, but not “contracted”

and “operating concessions". Neither agency actually states how many concessions are actively operating,

nor reports the species and volumes licensed to each one.

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approved in a single batch in early 2005 and a further 10 in late 2006. The Finnish-funded forestry project in Zambézia also provided a technical adviser to assist reviewing the plans at the provincial level, which helped push the process along. Another reason is that the price of preparing management plans dropped from about $1/ha to about $0.30/ha. Surprisingly, this happened without the government significantly increasing the number of consultants authorised to prepare plans. So, the number of concessions has indeed increased, as reported by the Governor and DPA. But, as with the decrease in simple licences, the important question to ask is whether these licensing changes have brought the claimed improvements to management and governance of the forests, and the intended industrial development. For evidence, the next section examines the status of the concessions, the status of the whole forest estate in Zambézia, the quality of the concession management plans and their implementation, including the issue of replanting after harvest. 4.1 Status of the concessions Of the 32 approved and contracted concession, 11 have not yet established industries required to start operations. These include three influential companies, Green Crown, Timber World and Olam, some of which appear to have started cutting in their concessions anyway. The Green Crown group comprises 7 of these non-operational concessions, and all are joint-ventures between the Singaporean Chinese businessman, Cheng Kee Meng, and people closely connected to the Government and FRELIMO. Together they cover some of the best remaining forest in the province (see Mackenzie 2006: ). The original concept for Green Crown was prepared and the concession applications made back in 2002. The management plans for these concessions were approved between August 2003 and October 2006, and the contracts signed between March 2005 and December 2006. The process has been drawn out over 6 years to ensure the partners kept control of these valuable forests, while they lobbied government and waited for the repair and re-opening of a strategic bridge near Mocuba, which would make the forests easily (and cheaply) accessible. Cheng Kee Meng also controls two concessions under the company Timberworld. Timberworld has not yet established its industry (SPFFBZ annual report 2007), yet SPFFBZ admitted that Timberworld was cutting in its concession in 2007 (Chibite, pers com.). OLAM Mozambique, part of the Singaporean multinational agricultural commodity company9, has two concessions covering 65,000 ha, the positions of

9 OLAM works in 56 countries round the world and has offices in Shanghai and Guangzhou to

distribute its timber to the Chinese markets. OLAM also has well-developed Corporate Social and

Environmental Respsonsibility statements: see: http://www.olamonline.com/home/home.asp

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which are also unclear. The management plans for both were approved in 2004 and the contracts signed in 2005, but they are still not officially operational, 3 years later. However, the Director of OLAM Zambézia told us that they operated both as concessionaires and timber traders in the province, selling into the Chinese market. It is well know that OLAM does not have a processing facility - so any concession operation would be illegal. SPFFBZ however told us that their concessions were not operational, and refused to tell us whether they have been cutting in their concession, or the size of their quota. Since OLAM is an international company, they would not be entitled to a simple licence quota ( Law 10/99 , 7 July ). In May 2008, their log yard in Quelimane was full to the brim with an estimated 10,000 m3 of timber, 90% of which is rumoured to be illegal. As mentioned above, the Provincial Director of OLAM Mozambique also told us that they were doubtful that the timber in Zambézia would last another five years, and felt that the investment in a sawmill was probably not worthwhile. 4.2 Ownership of the concessions Simple licence operators still complain that “all the concessions are given to the Asians, and local people are not able to participate”, and that “All we can do is apply for concessions, and log an area for a few years, we can’t afford to prepare management plans and get our applications approved”, but our data suggest another story. The 32 concessions with approved plans are owned by 25 different operators. As Table 3 shows, Mozambicans constitute the largest group, with 9 operators controlling 11 concessions and the largest total area (474,731 ha) – plus 176,800 ha more in 7 joint-ventures with Asians. Asians have exclusive control of 8 concessions, covering nearly 300,000 ha, and if the 7 joint-ventures are included, the area totals 471,134 ha. A single person, the Singaporean Chinese businessman Cheng Kee Meng has interests in 10 of the concessions, covering a total of 258,000 ha and including most of the best forest in the province Table 3: National origin of concession holders (with approved management plans) in Zambézia Mozambican Asian Asian-

Mozambican Joint-Venture

American European TOTAL

Operators 9 5 7 1 3 25

Concessions 11 8 7 1 5 32

Area (ha) 474,731 294,334 176,80010

21,278 235,432 1,202,575

Avg concession area (ha)

43,157 36,791 25,257 21,278 47,086 37,580

10

Official figures previously reported these concessions to total 188,938 ha.

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4.3 Quality of Concession Management Plans In 2004, the management plans of Timberworld and Madal were analysed in some detail, and heavily criticised for their failure both to follow the law and to promote sound management. Particularly, the plans proposed to strip out the valuable commercial timbers within the first 5 – 10 years. Despite this, the plans were approved. In 2008, over 20 concession management plans were examined. Despite the publication of a new concession management manual in 2005, and SPFFB’s significantly greater institutional experience, no improvement was found. The majority of the plans (62%) have been prepared by Dr J Bunster of TraForest, a Chilean forester who has worked in Mozambique for several decades and who prepared the Timberworld management plan in 2002. His plans now follow a very standardised format, and while this standardisation in itself is not a problem and could even simplify the approval and monitoring of concessions, unfortunately, the technical management prescriptions are all standardised too. So, although forest scientists are agreed that the cutting cycle in Zambézia should be at least 30 years, all the management plans are based on a 20-year rotation, and many propose to take all the presently valuable timber in the first 5-10 years. When asked about this, Dr Bunster admitted that the cutting cycle was too short. He explained that if the proper rotation were used, the profit would be too low for the businesses concerned. Furthermore he said that the previous head of DNTF, Arlito Cuco, had agreed with this shorter rotation. Once this precedent was set, all other concessions followed. When asked why the concessions were not simply made larger he replied that large concessions were expensive to establish (especially the cost of management plans), difficult to control, and investors didn’t want them. So, in short, the forest sustainability is being sacrificed to commercial convenience and profit.

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Photo 1: Spatial control of cutting by SPFFBZ in 2008. Section of map showing the official record of concessions and simple licence loggers in the area east of Mocuba.

4.4 Quality of Concession Management In 2004, the main concession under management was the 94,000 ha operation of Madal. Although there were problems, it was at least a centralised operation, with Madal organising labour and equipment. In 2008, the majority of the concessions in Zambézia are themselves in chaos. Many Asians, who in 2004 were timber buyers and obliged to work through simple licence operators to get their timber, have now become concession holders, and have rights to thousands of cubic metres worth of timber licences a year. But it appears most of them do not oversee operations in their concessions. They simply provide licences to loggers they trust, or sell off the licences (for around $10 more than the official fee) and then they buy back the timber. No one knows how many operators are out there, who is entitled to cut how much or from where. As described above, “furtivos” work many of the concessions. Villagers also cut for furtivos, making 100 MTN per log, regardless of whether the species sells for $120 or $450. Really, the concessions are

17

turning into a way of informally sub-contracting to simple licence holders, and there has been a complete loss of transparency and accountability in the process. There are too many actors and no control. What in 2004 was the malaise of the simple licence areas has now spread to the concessions.

Box 2: On managing a concession My concession is difficult to protect. There’s agricultural encroachment on one hand, and poaching of timber on the other. One poacher is one of my own workers! Local villagers cut trees, and break down the logs into boards. Once there’s a truck load, someone comes. The wood probably goes to local markets. Chinese only take logs. And they take everything, any quality. Spoils the market. In Pemba, the South African traders only take good stuff. Payments (bribes) are common place. At the Nicoadala checkpoint you have to pay something to get through. It creates goodwill, and is part of living together. At Alfandega, you might want to pay 500 MTN ($20) to speed up the process. The Chinese pay no taxes or social security – it’s impossible to compete with them. We get taxed on everything – we cannot even discount our legitimate business expenses against our gross profit, because out in the bush, half the services come from the informal sector.

There appear to be only 4 concessions that are operating according to the intended regime, that is cutting timber with their own workforce, processing it in a proper sawmill, and exporting sawn timber or manufactured products – creating jobs and value addition. These are the long-standing companies in Zambézia: Madal, MAZA, DANMO TTC and Sociedade Moveis Licungo, In addition a few concessions and their associated sawmills are supplying processed timber and simple furniture exclusively into the local market. Even in these “managed” concessions, the basics of good management are still not followed. SPFFZ does not demand and operators do not work on planned annual cutting coupes. Even the best seem to rely on experienced tree spotters to tell them where to cut each year. So just as in 2004, there is no spatial control of timber harvest. The result, as mentioned above, is that while there may be timber remaining in Zambézia, but no one really knows where it is. Some operators believe it is increasingly likely to be too dispersed to exploit economically. What measures does the government take to address problems and promote sound concession management? The only action we heard of was a joint task force preparing to visit all concessions during June 2008 – to ensure they had installed their identification signboards. Instead, as Box 2 demonstrates, the government makes things more and more difficult for the few legitimate operators (see Box 2). When asked about concession management, the Director of DNTF, Raimundo Cossa admitted to us that there were a lot of problems with the concession system, particularly those contracted to the Asian operators. He said that

18

through a new Finnish project, they would establish an auction system for any concession over 30,000 ha, through new detailed inventory in each province to identify natural forest clusters appropriate for management. 4.5 Reforestation Reforestation is a big issue in the sector, but largely for the wrong reason. Operators pay an additional 15% of royalties for this purpose, but SPFFBZ does almost no replanting and certainly none in the actual concessions. In 2008, the Governor and DPA cited operational nurseries of native species as an indicator of improvement in forest management. Table 4 presents data on seedling production and reforestation for the last 8 years. This shows how attention to reforestation has see-sawed over the years – with the best performance in 2000, when the Italian NGO Nuovo Mundo was running community-based nursery projects. Furthermore, most of the reforestation has been casuarina along the beach in Zalala. The number of seedlings of native species produced was just 110 in 2006 and 400 in 2007. This is insignificant. At 4m x 4m spacing, it takes 650 seedlings to plant up a single hectare! The concessions are still not being replanted (or managed to promote natural regeneration), so the actual commercial forest estate remains unmanaged in any significant way. Concession operators are asking that the 15% be waived, and they should use the money saved to do their own replanting. For simple licence areas, the money could be used to fund communities to establish nurseries and do the planting. Table 4: Government reforestation efforts: nurseries, seedlings and areas forested, 2000-2007. Year No. Nurseries No. seedlings Area reforested (ha)

2000 2 + 31 450,000 190

2001 2 35,000 30

2002 2 64,000 20

2003 3 55,000 Not reported

2004 6 325,000 Not reported

2005 4 130,800 9

2006 4 33,400 6

2007 4 319,200 58

Source: SPFFB annual reports 4.6 The Permanent Forest Estate “Now all of Zambézia is concessions!” Map 2 shows why people think this. Yet, a permanent forest estate for Zambézia, based on sound participatory land use planning, still has not been thought about, let alone formally delimited. There are still only perfunctory efforts to control shifting cultivation and charcoal production. The only spatial control of concessions is provided by hand-drawn boundaries on

19

a topographic map in SPFFBZ (see figure 2), despite the availability of geographic information systems (GIS) facilities in the offices of the Provincial Services for Geography and Cadastre. There is still no cumulative, geographically referenced record of the species and volumes cut. No one knows how much timber remains, or where it is. 4.7 Community Concessions Since 2004, we have been arguing for communities’ rights to manage their own forests, as a basis for promoting rural development and the generation of real jobs. Since the Land Law does not give communities direct rights to the timber on their own lands, they need support to acquire their own commercial concessions through official channels. ORAM has been working with two communities Muzo (in Maganja da Costa) and Nipiodes (in Mocuba) since 2005. Their applications have been awaiting approval since early 2008. The Muzo application is being blocked at District level by a technicality, and the Nipiodes application, although supposedly supported by the Governor, has still not gone through. Conclusion: There are ten times more concessions than before, but forest management has actually only got worse. Meanwhile, short rotations and over-cutting are now institutionalised through the approval of 32 technically unsound management plans. Concessions were supposed to bring a degree of control of harvesting operations not possible under simple licence regime, but the concessions are now over-run by small operators, working the concessionaires’ licences, or other licences, or with no licences at all. SPFFBZ makes only ineffectual token gestures to controlling the concessions. Concessionaires are allowed to cut before establishing their industries. The only concessions that approach the intention on linking forest management with industrialisation and job creation, are the old Mozambican companies that have been operating for over a decade. None of the new much-vaunted international investment has resulted in anything of value! Neither the concessionaires nor the government do any replanting. In their efforts to develop themselves through forest management, communities continue to be thwarted and betrayed by their own government.

5 Forest Law Enforcement (Fiscalizacao) In 2004, forest law enforcement was ineffective and easily corruptible, but had admittedly improved considerably since the totally lawless days of the late 1990s. Computerised systems were in place to enable monitoring and control of licensing and harvesting and enforcement of the law, if the political and professional will existed. Here lay the problems. Many civil servants, politicians, party supporters and even military were illegally involved logging, and together with the Asian buyers and the forest services, constituted a timber mafia, that

20

was bypassing the control system and local industry, stripping the valuable timber from the forest and exporting raw logs to the hungry markets of China. In 2008, the Governor and DPA asserted that enforcement had improved greatly, citing particularly the increase in the number of checkpoints and improved relationship between communities and forest officers. The Acting Director of SPFFBZ also reported that he was not aware of any corruption amongst his staff – although in theory, he accepted that it might exist. We look first at the points raised by the Governor and DPA, and then some other key aspects of forest law enforcement, which they did not mention. 5.1 Checkpoints It is true that the number of checkpoints has increased. In 2004 there were three: Nicoadala, Port of Quelimane and Chimuara-Mopeia at the Zambezi River crossing. In 2008, two more inspection posts have been established at Lua Lua in Mopeia, and at Namacurra. In addition, the Nicoadala checkpoint has been fully refurbished. Mobile phones have greatly facilitated communication between field inspectors and headquarters, and amongst the forest officers themselves. However, what was not mentioned, was that one of most important checkpoints, the one in the Port of Quelimane, has been seriously downgraded. When the port was refurbished in 2005, SPFFB’s checkpoint there was demolished and has yet to be rebuilt. Where previously, facilities comprised a couple of air-conditioned rooms and computer terminals, their checkpoint now consists of a table beneath a tree beside the main gate. Rebuilding the checkpoint is the responsibility of the DPA, and “it is going to be done” (Chibite, pers comm.)11. While the number of checkpoints has increased, the number of staff appears to have decreased. Table 5 presents available data for 2001-2007. After the scandals of the late 1990s, staff numbers were built up from 6 to 31, and during the period of the Finnish funded MSRN project (2001-04), numbers were increased to a maximum of 34, because funds were available to employ staff on short contract. The number was increasing, donors were interested, and so this was reported. But since 2004, reporting on staff numbers has stopped. According to the Acting Head, there are now 28 staff in SPFFBZ12.

11

According to Cornelder, it is was actually their responsibility (Cornelder’s) to provide this

accommodation and in June 2008, a room was made available to SPFFBZ. It contains one desk and two

chairs, but no computers. A most rent is charged, but it includes all utilities. 12

In early 2009, the DPA proposed to increase the number to 106. Industrial operators complained

that it was not so much the number of inspectors, but their training, professionalism and honesty that was

important!

21

At any rate, the number of checkpoints does not equate with law enforcement, and based on previous performance, new checkpoints simply result in new rent-seeking. For instance, despite the new inspection posts and improved communication, a lot of illegal umbila, chanfuta and jambire is still leaving the province southwards, over the Zambezi River to the local markets in Beira. The regulations have even been loosened to accommodate this. In the past, to move timber between provinces, the local transport permit had to be submitted, and a special transit permit obtained. Now, the local permit is sufficient. 5.2 Cooperation with local communities SPFFBZ and the DPA reported good cooperation between communities and the forest officers; communities inform the authorities about infractions, and the forest officers respond quickly. Both officers and communities should share in proceeds from the fine. However, when pressed, SPFFBZ could only cite one case where this had happened, in Muzo. The lack of cases, they said, was an indication of how good law enforcement was. The community in Muzo has an interesting account of this case. They are particularly focused on forest law enforcement because they have an application for a community concession and thus an economic asset to protect. Community members found 2 Asian loggers with a truck load of pau ferro in their forest. They called the local forestry office and someone came and took the documents of the truck. The officer told them later that the offenders had paid a fine. When the community asked for their 20% of the value of the fine, they were told that it had gone to government. In a second case, they found chain sawyers at work in their proposed concession. They seized the saw, but it turned out to belong to the District Director of Agriculture (DDA) of Mocuba. Forestry officer came and took it, and they heard nothing more. The same DDA was also caught hunting kudu. The community wrote asking about the outcome of these three cases. The only reply was from the DDA, about the hunting, explaining that they were “controlling the population”. 5.3 SPFFBZ computerised data base Data handling is key to effective regulation and law enforcement, In 2003 and 2004 a computerised database was maintained of each operator’s quota, all their cutting licences, transport permits and the volumes brought into town through the Nicoadala checkpoint13. Another database was kept on infractions. The Acting Head of SPFFBZ told us that the system developed problems in 2005 and has not been used since. In 2008, SPFFBZ staff were experimenting with a new computerised system, but for the time being, we were told, only paper records are kept and we were denied

13

At that time licences were issued for each species, and operators could pay for cutting licences in

stages until they had reached their entire quota.

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access to them. The new system was indeed impressive14, enabling profiles of individual operators to be produced, as well as summaries of quotas and licences15. Although computerised systems are open to abuse, and in 2004 there was clear evidence of this abuse, they at least offer the possibility of good control. Control could be strengthened by linking the database to a system for printing out the licences, so the data from each licence issued is automatically entered into the database. 5.4 Infractions: Official accounts We were not allowed access to SPFFBZ records on infractions – the only information available was from the annual reports, summarised in Table 5, and an interview with the Acting Head of SPFFBZ, Eng Chibite, summarise in Box 3. Table 5: Forest law enforcement in Zambézia: Staff numbers, infractions, products seized and total fines, 2001-2007 Year No. staff No. Infractions Products seized Total fines (MTN)

2000 6 37 Logs 88,177

2001 31 96 Not reported 315,451

2002 31 220 Not reported 1,807,041

2003 34 Not reported Not reported 795.828

2004 Not reported 267 1,116,842

2005 Not reported 300 1182 m3 logs

8 m3 sawn timber

3,955,352

2006 Not reported 169 1.898.471

2007 Not reported (28)

177 143 m3 logs

63 m3 sawn timber

1.245.081

Source: SPFFBZ annual reports

The year 2000 represented a turning point. Although total fines were relatively low, only 88,177 MTN, they represented a 96% increase on 1999 – the height of the chaos. In 2005, detected transgressions rose to a maximum of 300, consisting of: 1% cutting during the rainy season, 9% cutting outside the designated area, 15% incorrectly completed transport permit, 5% cutting without a licence and 70% cutting and transporting more than 10% in excess of authorised volume. The latter infraction is consistently reported as the most frequent, but no special analysis is made and no particular strategy is ever proposed for addressing it. In 2003 and 2004, SPFFBZ reported that in response to an “avalanche of transgressions” the DPA had joined forces with the provincial police and the

14

Interestingly, the demonstration given used the data of one of the industrial operators. Although

these companies are the ones actually making the greatest investment in the sector and the greatest

contribution to provincial employment and economy, they are the ones most closely policed by SPFFB. 15

According to SPFFBZ, it is now ready to be used in the 2009 campaign, but with the economic

crisis, no one is buying licences.

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professional associations to form a Timber Commission and created joint mobile enforcement teams constituted of forest officers and police (SPFFBZ annual report 2004). No details were ever given of this team’s activities, and it is not mentioned again in subsequent reports16. Interestingly, there are no reports of arrests, trials and convictions. It appears that in most cases people are simply fined, to transgress again. But one informant commented:

“there are always a few cases each year, of people being arrested and punished. If you are well connected and someone acts illegally to hurt your interests, the authorities will act. It’s a win-win situation: good for the statistics and good for relationships. If you’re not well connected, don’t expect results. You might get a response from SPFFB, but typically, it’s too little and too late. Since one has to pay the expenses for their field inspection, it is in the interests of officers to go, but by turning up late enough to ensure evidence has disappeared, it need not disrupt the system. It’s also win-win. Good for statistics and not damaging to key relationships.”

Data on infractions are actually a poor indicator of the quality of law enforcement, quite apart from frequent inaccuracies. When the number of infractions increases, the government explains it as improved detection; if the number decreases, they explain it as improved governance in the sector. “Win-win” reporting.

16

Experience in Cabo Delgado shows that multi-sectoral enforcement teams can be effective. In

2007, officers from customs, DPA, police and labour with NGO observers carried out a day of raids on

sawmills, logyards and exporting companies, finding a lot of illegal logs and illegal Chinese workers.

Unfortunately, under political pressure from Maputo, the team was disbanded and the fines were annulled.

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Box 3: Comments on Law Enforcement by Acting Head of SPFFBZ, Eng Chibite Illegal operators “furtivos” do exist. Cutting in the wrong area also takes place – but some of this – say 20 -25% - is just accidental crossing over into a neighbouring area. SPFFBZ hasn’t licensed any new operators in since 2003. What’s happening, is that some of these experienced operators sell on to cowboys. This is illegal, but it’s a fine line between this, and sub-contracting, which isn’t necessarily illegal. Overcutting is difficult to control. An operator might get 200 m3 for a year, but his team just keeps cutting. Often, the unlicensed timber remains abandoned in the forest, because there’s no licence to get it through the checkpoint and into town. SPFFB is controlling the situation as best it can. Corruption is debatable. Sad to say, but it is real. That said, he admits no direct personal knowledge of corruption. Officers should not be suspected just because they appear to have lots of expensive things. Most are obtained honestly, from savings for instance. It is important that get the facts and analyse them first, and not jump to conclusions. Regarding the 30 containers seized in Quelimane: Well, “stealing is stealing” it happens. Timber gets sold in public autions, overseen by GIP (Gabinete de investimento da provincial; Provincial Investment Office) Illegal export is happening, just like before (2004). At the moment, no proper SPFFB post exists in the port. Officers just have a desk under a tree by the main gate. DPA is going to provide a proper checkpoint building soon. Forest law enforcement is not just about giving fines – in fact, if its going well, then the number of fines should decrease! And that’s what we are seeing. Coordination is much better, and since the advent of the 20%, communities are sensitized for conservation and good management.

5.5 Auction of illegal timber In 2005 and 2007, SPFFBZ reported on its seizure of illegal products. One has to conclude that this is primarily for cosmetic purposes – as it has little effect on illegal activity. The logs are eventually auctioned off, with great publicity, but usually the previous owner is allowed to buy them back at a knock-down price and then can export them as usual. It’s an unspoken agreement amongst operators - like “honour amongst thieves”. So, the seizure just an inconvenience and additional expense.

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Photo 2: Notice of public auction of seized timber: starting price of around $100/m3, about 1/3 of the local market value of the timber.

5.6 Infractions: unofficial accounts and local opinion on forest law enforcement and corruption Operators, communities and NGOs we spoke with were almost unanimous that law enforcement and corruption had got much worse in the last four years, not just in Zambézia, but across the country. An illegal logger told us about his operations (Box 4).

In Gile, a northern district bordering Nampula, one foreign-owned company, Green Timber, was found to have actually constructed a bridge across the Ligonha River into the neighbouring province of Nampula, to enable them to take their timber out through Nacala. The port here is famous amongst the Chinese, for being the most relaxed in Mozambique, where Customs and the DPA are most interested in taking bribes.

Licuari (between the SPFFBZ check points of Nicoadala and Chimuru) is a well known collection point for illegal timber in Zambézia. Small trucks collect timber from communities and furtivos, and move it at night. We found it easily, and a large truck piled with logs drove out as we drove in (Photo 3). The man running the site buys and sells species for local market, primarily chanfuta and umbila. He buys for around 2000 MTN/ m3delivered, from unlicensed operators and sells on at 4000MTN/ m3 and 8000/m3 in Maputo. He sells mostly to truckers who have brought goods from Maputo and want to avoid returning south empty. He estimated that 50% of timber harvested in Zambézia is illegal.

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Photo 3: Truck loaded with chanfuta timber, leaving the illegal trade point in Licuari

“Corruption in all sectors is now much worse”, an industrial operator told us. “There is a chain of corruption. At Ministerial level, you get money by approving big concessions. At DNFFB, you get money by changing regulations. At the provincial level you get money from simple licences, and the Asian operators.”

“In Zambézia any improvement in forest management is going to be difficult, because senior provincial officers are not interested. In fact the day things improve, they and the people they protects are going to lose the opportunity to do their business. There’s a lot of political protection; that’s why they are so arrogant.”

“Corruption in Zambézia’s timber business runs from selling a simple log to money laundering, including trafficking and marketing of hard drugs.”

“Everyone knows the previous Head of Law Enforcement (Nemane) in SPFFBZ was on the take. And his brother is one of the biggest illegal loggers in the province!”

Most sobering, we were told: “FRELIMO has a big responsibility in all this, and we “sinned” a lot in this regard. We advised the party not to get involved in this scenario, but unfortunately, the interest in easy accumulation of wealth and greed drove us into it. Now, its going to be

27

very difficult to reverse the scenario, because foreigners, mostly the Chinese, already dominate in our country, including the borders, with economic power growing every day, which enables them anytime and place, to bribe any miserably paid government officer, to facilitate the documentation they need to export timber in any form from any place, without any problem.”

Box 4: Story of a “Furtivo” Lots of communities cut timber. A regulo (traditional village leader) might demand up to 1500 MTNfor access to his community. Then, he buys mondzo for about 250 MTN($10) per log, and arranges the collection and loading. Tractors cost 500 MT/day, for 3 days; loading costs 250 MT/person for 12 people, or 3000 MTN per truck holding 15 m

3. A “fuso” truck takes 2 days and

52,000 MTN to get to Quelimane (from a point 350 km away). He has to acquire a licence. This is often done by taking over someone else’s licence and splitting the profits with them. This way, he might earn 5000 MTN($200) per load, but also might lose everything. You can also work without a licence and transport permit, but sometimes you have to pay half the value of the load to get through Nicoadala. You have to call ahead and arrange it. Only well known people can pass without licences. Chinese then discount $10/ m

3 for

buying illegal wood. Usually, the licence holder goes to the Chinese to sell – so he can lie about how much he was paid. Sometimes trucks with illegal load travel in convoy with trucks with legal loads. Those with all the proper documentation lead the way, but report to trucks behind. If the inspection is serious, the following trucks may leave the road and wait until after dark to continue their transit.

Conclusion: It is simplistic in the extreme to equate an increase in the number of checkpoints or forest guards with improved forest law enforcement. The reality is that corruption, arrogance and mismanagement continue and are seriously undermining the rule of law, accountability of government and future of the forest sector.

6 “The 20%” In 2004, there was a lot of discussion about “the 20%” of timber licence fees that the communities were entitled to receive under the Forestry and Wildlife Law of 199917. The government had been criticised for delays in passing the necessary regulations to enable implementation, and for failure to reserve the funds for communities from the years before regulation was passed. In May 2005, Diploma Ministerial No. 93/05, establishing mechanisms to channel these revenues to communities in logging areas, was passed, and

17

Other community entitlements under the law included: subsistence level use of the resources;

participation in co-management; community consultation and approval prior to awarding licenses to

operators; development benefits derived from exploitation under a concession regime; and 50% of the

value of fines awarded to persons contributing to law enforcement.

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SPFFBZ began implementation. With funding from various donors, they eventually appointed a local NGO, RADEZA (Network of Organisations for the Environment and Sustainable Community Development of Zambézia) to do most the work with the communities18, and dissemination of the law started in late 2005. By 2008, there had been three rounds of delivery of the 20% to communities. Table 6 summarises the progress. In 2005, most provinces had not been yet able to deliver the money, mostly because of the failure to establish required Village Management Committees (Comites de Gestao) and open bank accounts. In Zambézia, this amounted to 7,380,317 MTN (US$307,000), intended for 166 communities in 12 districts. The money went into general budget of districts instead, and it’s unclear what happened to it. Table 6: Progress on Distribution of the 20% to communities in Zambézia, 2005-2008 Year Districts Communities Committees Total MTN

2005 - - - 7,830,317

2006 5 ? 1,561.929

2007 ? 91 37 5,799,964

2008 8 168 40 ??

In 2006, a faltering start was made, with 1,561,929 MTN delivered to an unrecorded number of communities in 5 districts (Mocuba, Namarroi, Maganja da Costa, Mopeia and Ile). Momentum picked up in 2007, when 5,799,964 MTN from the 2006 campaign channelled to 91 communities in 37 committees.

In 2008, money from the 2007 campaign was being prepared for delivery to 168 communities in 8 districts. Of these, 98 communities are in simple licence areas and 70 in concessions. Individual communities are set to receive between 11,500 (US$540) and 450,000 MTN(US$18,750). This implementation does represent a vast improvement over the situation in 2004. However, there have been problems, policy disputes and irregularities in implementation which need to be resolved, and from which lessons can be learned for future implementation.

18

This involved: i) dissemination of the regulation and coordination with partners (NGO, private

sector and government offices); ii) calculation of the value of the 20% for 2005; iii) inventory of

beneficiary districts and communities; iv) opening Community Funds to receive the 20% ; v) instructing

the Agrarian Promotion Fund (Fundo de Fomento Agraria) to transfer the money; vi) support for the

formation of local committees to manage the funds and opening bank accounts; and vii) official opening

ceremonies for the first delivery of the 20%

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6.1 Problems Identification of communities When implementation began, the chaotic state of the sector immediately became apparent. With simple licences, it should be easy to identify communities entitled to get 20% under the simple licence regime, because the licence covers a relatively small area (5000 ha). But the fact is that SPFFBZ licensing and supervision have been so irresponsible, that a licence is issued for one place, but cutting often, perhaps usually, takes place somewhere else. So, some communities get the 20% when none of their timber has been removed, and some communities see their forests logged, but get no share of the royalties (see Box 5). Concessions are much larger and more problematic. They often include numerous communities, and the only practical approach is to share equally amongst all of them, reducing the sums received by each even further. If concessionaires operated annual felling coupes, as they are supposed to, individual communities would be more easily defined. Receiving organisation for the 20% In Zambézia, the 20% funds have been delivered not to Village Management Committees, but to the administrative level higher up – the Administrative Post (Posto Administrativo– local government level below the district), and its Community Council (Conselho Comunitario). Furthermore, 11 of the 37 Administrative Posts have had their bank accounts opened in Quelimane, making them expensive and time consuming to access. These have caused a lot of complaints to the NGO implementing the community support programme, RADEZA. One community complained about the practice promoted by RADEZA of forming committees at the level of the Administrative Posts. There were lots of problems with transport to get to committee meetings, and with communication between the five communities involved, and with the Administrator. Each community was supposed to plan its activities. There was only one training from RADEZA, and no follow up until the centralised “evaluation”. The DDA helped them form their committee. RADEZA defend their approach, with the fallacious argument that banks do not like to open lots of little accounts for individual communities. They also argued that it would enable other communities in the area to benefit. After all why should 20% only go to the communities close to the forest, and not to the whole Administrative Post, especially, if loggers have cleaned out some local forests before the 20% was implemented? Director DNTF admitted that it had been “uma confusao” (“a confusion”) that the money had gone to Administrative Posts, rather than directly to the communities. He assured us that the law will be changed to clarify this.

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Meanwhile, the NGO ORAM Zambézia has an alternative vision: the 20% should be used as an incentive for rational use, so it needs to be delivered as close to forest as possible – ie to the communities. They argue that committees at the level of the administrative posts will only required if the community level committees want to form one. Banks are in the business of opening accounts so there should be no problem with multiple accounts19. ORAM’s work in supporting 3 communities to manage their 20% is described below. 6.2 Irregularities Transparency The manner in which the 20% entitlement is determined is not transparent. SPFFBZ has simply announced who gets what, without showing how the figures were reached. At the beginning of the logging campaign, SPFFBZ know which operators have been licensed for what species and volumes. All this information and the final calculation should be told to the communities before cutting begins. Communities are beginning to realise that illegal logging deprives them of their 20%, and so knowledge about licensing can be an effective tool for empowering communities to monitor timber extraction in their area. ORAM has been doing community training on timber identification and measurement, so the communities can control operations. Some communities said by SPFFB to have received the 20% never receiving anything: need for greater transparency and accountability. One community was told their 20% was coming in the form of a maize mill. They never saw an invoice showing the value, and the thing came in pieces – never was assembled properly. Use of the 20% Communities receive very little support in deciding how to use their 20% and manage the funds and projects. Apparently, most communities buy maize processing mills or rehabilitate small infrastructure – bridges, etc. In some places, however, communities are being encouraged to propose building schools and health posts, and this has caused some disagreement. The government has introduced a local investment fund (Orcamento de Initiativos de Investimento Local (OIIL)) through which 7 million MTN is given annually to every district in the country, to build schools, roads, etc. The use of the 20% in this way is said to cover up the mismanagement and political abuse of the fund. Conclusion: While delivery of the 20% is definitely an improvement over 2004, there is still a long way to go with its implementation and the use of the funds by communities. There is an excellent opportunity to use the 20% to leverage better forest governance, and better community development, as ORAM is promoting. SPFFBZ must now improve its licensing and supervision. It must ensure the areas licensed actually have sufficient forest resources, that the

19

In Manica and Sofala (perhaps everywhere) a bigger problem is the charges the banks make on

community accounts. Concessional rates need to be negotiated.

31

person licensed does the logging, that logging is done in the correct place, the correct volumes are taken, and that communities get the full value of their 20%. The 20% is in danger of becoming more of a distraction than a benefit! Its value is actually quite low (less than 5% of the total value of the timber) but it has consumed nearly 100% of the forestry debate, to the neglect of many other important issues notably communities’ land and other rights, and the continued chaos in the forest sector. Attention should also focus on using the 20% to leverage better forest governance.

Box 5: A Community’s experience of logging and the 20%: Bive/Makwia Five different loggers have been operating here over the last 6 years. An operator called Pinto was in here late last year cutting pau preto. Only the loggers Dominga and Nelson consulted with our community. They brought us food, some beer, and gave 300 MTN to the regulo (chief). We didn’t ask for anything – we didn’t realise we could. Most labourers were brought in from outside. Only 3 or 4 people from here got jobs. Nelson gave us a maize mill in 2007, because he’d been working here for 4 years. We’ve never heard about the 20% and certainly haven’t received it. We have heard about the Local Initiative Investment Fund, and a meeting was called by the chief to form an association to receive and manage the funds. We have a committee of 10 men and women. We opened a bank account. We were asked if we wanted money or goats. But nothing has happened. We also cut timber. In 2005-07 maybe we cut 120 logs a year. A team of 8 men cut around 6 trees a day, using hand saws. We should get 100 MTN ($4)/tree, but sometimes we didn’t get paid. The furtivos (illegal loggers) said the Chinese hadn’t paid them. Some of our people also work loading trucks. A team of twelve used to get paid 25 MTN per person per truck load. Now its 50 MTN. Often, we cut trees and look for the market afterwards. Concessions are no guarantee of fair employment for locals. One concessionaire gave part of his concession to another operator, who cuts one month in a place and then moves on, without paying anyone.

7 In-country processing, industrial capacity and employment In 2004, despite the 1999 legislation to the contrary, nearly all Zambézia’s timber was being exported as logs. This was justified, on the grounds that Zambézia lacked industrial capacity, particularly to process hard tropical timbers. We argued strongly Zambézia does have the necessary capacity, and called for full implementation of the laws requiring prior in-country processing, as an essential step towards fulfilling government policy to harness the forest sector and the skills and energies of the people to promote inward industrialisation and create jobs. At that time, regulations were being manipulated to avoid fully implementing the law and to allow the export of logs (and effectively jobs) to the Chinese market to continue. Because the law permits the export of logs of species classified as

32

“precious”, the Ministry issued various decrees reclassifying most of the main commercial species as such. In 2005, the regulation enabling the export of logs of umbila, jambire and chanfuta expired, and from April that year in-country processing was supposed to be enforced. However, manipulation of the regulations began again. First, export of logs continued to be allowed on the grounds that they had been felled under licences from 2003 and 2004. Sawing began in July 2005, but operators did not respect the industrial norms for thickness and proper squaring up (“4x4 finishing”) so, processing standards had to be officially established through Ministerial Diploma (185/2005), to prevent the export of rough sawn timber. The export of these species then fell substantially, but has continued. In January 2007 a Ministerial Diploma, reversed the 2003 reclassification of the two most sought-after species, pau ferro and mondzo, into precious class, which had enabled their export as logs, and these species were returned to Class 120. This resulted in a 75% reduction in their royalties, but required that they be processed before export. However, SPFFBZ allowed export to continue until 31 March, as before, on the basis that these were logs from 2006. And then they extended deadline until 31 May and then extended it again to 31 June. The influential firms, OLAM and Green Crown, continued to export logs in August, September and October 2007, amounting to an officially declared volume of over 3,000 m3. When asked, DPA claimed these were old logs and authorised their export, but when Green Crown’s shipment was inspected, a lot of fresh logs were found mixed in with relatively few old ones. Since Green Crown is well-connected, political pressure was applied through Bonifacio Grueveta, and it was allowed out. Then, because the Chinese market supposedly would not accept fully processed timber, (and certain operators’ sawmills were not capable of sawing to specification), the Asian lobby put pressure on the government in Maputo and in September 2007, got another Diploma published, which changed the sawing requirements to permit the export of slabs of rough cut timber, known as “pranchas” (rough sawn planks) (see Photo 4), instead of fully squared (4x4 finished) . In 2007, 1980 m3 (28%) of total exports were in the form of such planks, 780 m3 (11% of all exports) of this pau ferro.

20

In the same regulation, muaga and chanato, previously Class 3 and 4 respectively, were elevated

to Class 1, raising their royalties and also introducing the processing requirement.

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Photo 4: “Sawn timber” of pau ferro en route to Quelimane port

From mid-June 2007, most exporters were obliged to export sawn timber. Figure 1 provides customs data for the four quarters of 2007, demonstrating the impact of this. In anticipation of the crack-down, a record 40,000 m3 of logs left Quelimane in the first half of the year. In the second half of the year, almost none were exported. Many exporters, rather than sawing and exporting, simply stored their logs in their log-yards, figuring that the government would soon be persuaded to allow log exports to start again. Log-yards of companies like Madeiras Alman and OLAM filled to overflowing.

34

Figure 1: Export of logs and sawn timber from Quelimane in four quarters of 2007

Source: Raw data from Customs register of exports This tallies with local recollections: “|In February 2007, Quelimane was just recovering from its last major flood, and the city was awash with mud and water. Nevertheless, the Asian traders were busy all hours of the days and night moving their logs with tractors and trucks – further damaging the roads, and spraying mud all over people and buildings. Not just the log-yards, but the whole city was overflowing with logs. Any piece of vacant land was filled, even some peoples’ gardens. The port was crazy with activity. All the money – the value of the timber – which could have been used to rehabilitate the city, was being exported!” The log exports from Quelimane have certainly declined precipitously, as further illustrated in Figure 2. Even taking into account that some of the sawn wood has actually been smuggled logs (see below) and that some of Zambézia’s logs are now leaving through the port of Nacala21, this is significant and one of the most positive things that has happened since 2004.

21

In Nacala, bulk carriers still come in, and container stuffing outside the port is permitted. These are two

conditions promoting illegal log export.

35

Figure 2: Export of logs and sawn timber from Quelimane 2004- April 2009

Source: Raw data from Customs register of exports It is then true that the export of logs has almost stopped, and that sawn wood production has doubled. However, most people we interviewed, operator and traders alike, agreed that allowing rough sawn timber to be exported is a counterproductive “lose-lose” proposition. The processing costs money, but the timber sells for less than logs. In China, importers considered rough sawn planks a crude and wasteful way to treat fine wood. A group of industrial investors in Zambézia felt so strongly that things had gone too far that they took action, and called for end to corruption, a log export ban, and in February 2008 lobbied for a return to proper sawing. On 18th March there was supposed to be a meeting of a commercial chapter of the national Forest Forum, but it was cancelled. Two of the industrial operators are so frustrated that they are trying to sell up and leave. In May 2008, the Head of DNTF, Raimundo Cosa, told us he thought the policy of permitting export of “pranchas” was unsound, and assured us he would soon get the regulations governing processing changed, reverting from “pranchas” to properly squared planks. 22

22

In November 2008, we heard that the decision had been taken in July, when, it was said, the new

regulations would come into effect in two weeks. But in November, it appeared authorities were still

working on the issue. In May 2009, pranchas are still being exported.

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7.1 Sawn wood production, sawmills and industrial capacity The effect of the new requirements to export sawn wood on output of processed wood is shown in Table 7. In 2007, production reached nearly 7000 m3, up 140% from 2006, and up 40% from the previous highest level in 2004. Table 7: Production of sawn timber in Zambézia, 2001-2007 Year Total Production

Largest producer

Year Volume (m3) No. producers Name Volume (m3)

2000 2468 6 Madal 1369

2001 2336 6 Madal 1280

2002 3215 11 MAZA 915

2003 4205 10 Madal 1491

2004 4941 >12 MAZA 1550

2005 3458 >10 Madal 923

2006 2933 16 n/a n/a

2007 6999 > 19 MAZA 1292

Source: SPFFBZ annual reports

Table 7 also shows how the number of sawn timber producers has increased by nearly 60% from around 12 in 2004, to more than 19 in 2007. The list however, is not definitive, and the status of these producers, and their ultimate impact on industrial capacity in the province is not clear. SPFFBZ has not reported the industrial capacity in the province since 2001, when it recorded 8 installations, with a total processing capacity of 51,000 m3 roundwood per year. Probably realising this damaged their justification for permitting log exports, since then, only “status” or actual production has been reported, and this despite at least two studies on provincial industrial capacity in the last 5 years (Chitara 2001, Rural Consult 2006).

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Photo 5: Cheap sawmill of an Asian timber buyer in Quelimane

Many of the new sawmills are cheap $10-15,000 installations not capable of sawing planks accurately to specific dimensions. These makeshift mills employ about 5 labourers and are just used for rough sawing pranchas, to meet the minimum requirement for export. This compares with 16 workers and 30-40 logs a day for real processing. Furthermore often, Chinese operators are brought into Zambézia to run the mills and maintain the saws. Because of their low investment cost, some small sawmills make some money and they have effectively flooded the processing marketing and undercut the proper sawmills. Local informants were emphatic that this is not the kind of industrial development that the forest sector and Mozambique needs.

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Box 6: An exporter – TTT Timber TTT Timber is the company whose 30 containers of illegal timber were seized. They were trying to smuggle out pau ferro logs, by declaring them to be an exportable species, mucarala. TTT Timber’s manager told us that the new sawing requirement was a big headache. They could buy logs, but if they wanted to export, they had to process. They lose money on it – a round log of pau ferro will can sell for $400/m

3 – but sawn log, only $200.

Problems working in Zambézia. Export licensing takes a very long time, compared to Myanmar, where only 3 days. Here you need a long time and extra money. Investment is needed too – say $100,000 up front, including land purchase. The port is becoming a problem. Big vessels don’t come, so have to use containers ships. This is expensive and time consuming. Nacala and Beira are better. They have set up a sawmill – but only a small band saw, only suitable for rough sawing pau ferro. It can’t process mondzo, for instance. TTT Timber’s plan for the near future is to wait, and hope that round log export will start again. If there’s no choice, he will saw, or export pau preto, chacate or some other species you can send as logs. They are particularly waiting for the export of pau preto to start again, since they have over 100 m

3 ready to despatch

23.

7.2 Markets for sawn timber in China In 2004 and even 2008, many forestry officials and loggers insisted that there was no market in China for sawn timber - they just wanted logs. We visited China in July 2008, and investigated this rationale for exporting Mozambican logs. Mozambican timbers are used for four main purposes in China: i) reproduction Ming and Ching dynasty furniture, for which African species (pau ferro24, mondzo, pau preto and jambire) are substitutes for more expensive “rosewood” species, traditionally used (See Photos 7 & 8); ii) solid wood flooring (jambire and chanfuta); iii) veneers, for laminated flooring; iv) carvings (See Photo 10). Most of these products are sold on the domestic market, although some flooring is exported.

23

Although the DPA assured us there would be a ban on further pau preto exports for at least 2 years, TTT

Timber exported 155 m3

of pau preto in April 2009.

24

Pau ferro is particularly favoured, and Zambezia is the main source of this species.

39

Photo 6: Mozambican and other African logs in a wholesale logyard near Zhang Jia Gang Port, near Shanghai

At the very top end of the furniture and carving markets, the craftspeople do require logs. They make exquisite items for which the grain of the wood is very important, and in large carvings, the shape of the raw log can provide inspiration for the piece (see Photos 9 & 10). However, for most other uses, the first thing a Chinese buyer does on receiving Mozambican logs, is take them to an independent sawmill for primary processing. We learnt that Chinese log buyers often do not even trust their local sawmills, because the millers keep back a proportion of the sawn wood to sell themselves. If a wood user could import ready sawn timber, to a sufficiently high specification, this problem would be avoided. However, at the moment, they trust Mozambican sawmills even less. The important thing dealing with China is to establish trust, but there is so much cheating going on in the Mozambican trade, that no one in China wants to deal directly with an African. This is apparently one of the main reasons that Asian traders have got such control of the market – many of them are direct agents for log importers. If Mozambique has a good product, and business people are

40

demonstrably trustworthy, there will be a market in China. In these days of cellphones and the internet, it is no more difficult for Chinese wood users to communicate their sawn wood requirement to Mozambique than it is to their local sawmill down the road. It should even be possible for Mozambique to enter the market to supply Chinese furniture factories with semi-processed components (see Photo 11). The prices will be good, because of the value addition of processing and importantly the approximately 30% mark up currently taken by Asian traders on log exports will be captured locally – and Mozambicans will get much needed jobs. Photo 7: Mondzo used to make ornate table, in a factory near Shanghai

Photo 8: Jambire used to make cheap foot-stool for tourists, Nanxun, near Shanghai

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Photo 9: Antique Chinese tables showing matching of grain

Photo 10: High quality Chinese carving, incorporating character of raw material

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Another factor in the Chinese demand for logs is that state-owned enterprises are responsible for 40-60% of timber imports from Mozambique (China Customs Database 2007, 2008), and the Chinese government pursues a policy to support its own local industry. The sawmills that we visited near Shanghai were not the high technology installations we were led to believe. The bandsaws are no more sophisticated than those in use in the larger industrial operations in Zambézia. Similarly, the technology for drying timber is not particularly advanced, and is generally only used on semi-finished products – such as flooring blanks. The product they send on to factories is nothing special (See Photo 12). At the Chinese end, production capacity of an average band saw with mechanised log feed is estimated at 50 m3 per day. Although this is probably higher productivity than obtained in Mozambique, costs of production are probably still higher in China. Photo 11: Semi-processed furniture components originating in Viet Nam, in a factory near Shanghai

43

Contrary to reports (TCT Dalman 2003), Mozambique has a considerable comparative advantage over China in labour costs, with a minimum wage of around $50/month. China’s labour laws now demand a minimum wage in addition to many other worker benefits – so a typical semi-skilled worker costs $400/month to employ, and even an unskilled labourer costs $150 month. Some processing is now going to Vietnam for this reason. Obviously, there are currently productivity issues in Mozambique, but with investment in plant and particularly worker training, and government support for business development (including lobbying to the Chinese government for preferential treatment), this processing could be done in Mozambique. Photo 12: Chinese sawmills operations and their products are not all high-tech

Another assertion used to justify log exports has been that rates of timber utilisation in China are much higher than in Mozambique. This is said to be largely because waste wood is used in secondary production lines. This also proved to be not generally the case. The Chinese government provides tax incentives for industries using waste wood, and admittedly, some operations we saw, like the production of hardwood flooring blanks, do sell on off-cuts to manufacturers of blockboard. The bark of some species can also be sold. We also saw some offcuts of precious species being sold on to make fans. But in the furniture factories we visited the off-cuts were just sold for firewood. In

44

Mozambique, companies like TCT Dalman have also developed a series of profitable secondary products such as shingles, composite panels and turned items, and others Mozambican companies could follow suit. Zambézia’s established industries continue their processing and find good export markets. Madal for instance, sells regularly to South Africa, Spain, Italy and Belgium, at rates similar to those given in Table 8. With a little effort and investment, profitable markets could be developed in China. Table 8: Export prices from Quelimane for sawn Umbila (free-on-board), 2008

Species Grade Dimension Price $/ m3 Destination

Umbila Super Grade 25 mm Long 820 South Africa

Super Grade 25 mm Short 660 South Africa

Grade 2 25 mm Long 650 South Africa

Grade 2 25 mm Short 520 South Africa Source: Export Documents

7.3 Employment in the Forest Sector Although the DPA and Governor were keen to point out the increase in employment produced by the in-country processing requirement, SPFFBZ has never actually reported on employment in the forest sector, so these claimed increases still need to be demonstrated. Since 2004, there has been increasing concern over the arrival of Chinese technicians and labourers to work in the offices, forests and sawmills of Zambézia. Department of Immigration reported 35 Chinese nationals legally resident in Quelimane in May 2008, 21 of whom were employed as mechanics, foresters and accountants in the forestry sector, by companies such as Green Crown, Green Timber, Pacific International, Goodyear and Boleyn International. Labourers are also employed, but these people did not appear in the statistics. Madeiras Alman uses a lot of Chinese labour, and there are stories of Chinese managers and labourers beating up Mozambican workers. The workers complained to the Governorand Chinese disappeared for some days, but then came back again. The Director of Immigration confirmed that there has been almost no control on the entry of Chinese into Zambézia, and an estimated 75% of foreigners in Zambézia are there illegally. They come in on a conventional one month entry visa, and then don’t leave. The government needs to take coercive action to get them to leave and then insist their status is regularised before they can return. As individuals, these illegal Chinese immigrants aren’t much problem, tending to be relatively shy, disciplined and respectful. The Department of Immigration has done a census of districts, but it is not broken down by economic sector or

45

nationality. In the case of illegal immigration by the company Madeiras Alman, the manager and 6 Chinese workers were expelled. However, they returned. Zambézia is also an entry point and corridor for illegal immigration into Malawi, and a committee is being formed between the province and its neighbour, similar to an existing committee between Maputo, Gaza, South Africa and Swaziland.

Meanwhile, it has to be admitted that domestic labour problems remain. Most forest labourers have received no formal training and lack skills and are said to be lazy and lacking any work ethic. There is an industrial training school in Quelimane that produces 500 graduates per year, in mechanics, electronics, accountancy, etc – but apparently, few are ever available for forest industry and certainly there is no specific focus on forestry related skills. The provincial government provides no support in this key area, despite its importance in the local economy. 7.4 Government Support for industry: China vs Mozambique China supports its industry. They create industrial zones, with excellent infrastructure, utilities and tax concessions. They provide business assistance, credit and training opportunities for workers. They protect their industries. In Mozambique, however, many government agencies are predators on industry, and obstruct rather than facilitate economic development (see Box 7). Anyone with money to invest is open target for extortion.

Box 7: Setting up a forest industry in Zambézia One industrial operator we met had suffered what epitomised the government’s approach to industrial development. He has a successful industry in Maputo, and as timber is becoming scarcer, wanted to secure high quality raw material for his parquet and flooring production lines by getting his own concession. Like TCT Dalman in Sofala, he is trying innovative ways of using off-cuts from his main production line, such as in low-cost prefabricated housing panels, to establish manufacturing lines in Zambézia. Since the province offers no assistance with investment, he applied for a loan through the government approved Nordic Assistance scheme with which he established a primary processing facility with some of the best equipment in the province. The facility has capacity of 5000 m3 and already employs 9 people full-time. All his workers are Mozambican, most from Zambézia. Three years ago, he applied for a concession – one of the conditions of the Nordic loan – but was rejected. It has been rejected four times on technicalities, even after moving up to Zambézia 18 months ago. Each application is fraught with difficulties. He also experienced enormous difficulty getting electricity: having paid for the line, he waited over a year for installation before giving up and renting a generator at 12,000/month. Rural water services (FIPAC), were only prepared to provide a 120 m well at 145,000 MTN, when all that was needed was 9.5 m well, costing 15000 MTN. Says because he’s foreign and legitimate, and liable to bribe, officials pick on him for fines. Business environment continues appalling. Government has no interest in economic development. There’s no investment in training workers for the sector. There’s nowhere to get assistance on investment. The balcao unico (one-stop shop for business registration) is hopeless. Government offices are corrupt. To register his company here, he was forced to take out a second national social security number. If he’s importing, he’ll do it and pay in Maputo, because in Zambézia’s the money likely to go straight into someone’s pocket and not be registered, making him vulnerable to fines.

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Conclusions: The Governor and DPA are correct in saying that all the main commercial species require in-country processing before export. This is the most positive thing to happen in the sector since 2004. However, it has taken 8 years to implement this simple policy and full implementation is currently being undermined by regulations permitting the export rough sawn timber. The purpose of the processing requirement is to stimulate high quality inward industrialisation of the forestry sector, create jobs and harness the creativity and energy of the people. Instead, there is a proliferation of cheap sawmills, employing foreign workers and capable only of producing rough sawn planks. The Industrial policy for forestry remains poorly developed and the implementation of the few simple existing prescriptions is undermining rather than strengthening the sector and the provincial economy. Marketing sawn timber in China presents no problems, if Mozambique businesses can become transparent, reliable and maintain high quality standards. In fact, Mozambique could learn a lot of lessons from the Chinese approach to forest industries.

8 Control of Timber Export In 2004 we documented the illegal export of timber, pointing out irregularities with export licensing, port handling and customs clearance. By comparing export statistics from different agencies, we estimated that at least 40-50% of the timber leaving Zambézia was illegal. In 2008, the DPA and Governor cited improvements to the port as an indicator that export of timber was now under much better control. 8.1 Port Management In 2005 the private company Cornelder took over management of the port from the Mozambique Railway Company (Companias de Ferrocaril de Mozambique). Cornelder has made a lot of improvements to the infrastructure and operation of the port. The whole area has been paved and the warehouses have been renovated, new secure fences have been erected, with a new secure gate and guard post. Since late 2007, Cornelder has stopped allowing containers to be stuffed outside the port, and insists all timber be brought into the port first, and then stuffed on site, by Cornelder employees. This has apparently brought reductions in illegal activity. Previously, exporters routinely stuffed containers in their own log yards. Although Customs and SPFFBZ officials were supposed to be on hand to supervise the operations, this became the main way to get out illegal species and undeclared volumes of logs. 8.2 Customs

47

Customs procedures are apparently also much improved. The UK provided technical assistance until 2005, and all the provincial offices are now computerised and linked to a central computer in Maputo. There is an investigations department. We were given full access to their documents. Corruption still exists though. In addition to the petty corruption for “speeding up” the processing of documents, apparently it is not uncommon for exporters to pay Customs to “lose” their documents after export has taken place. And a high profile case discussed below demonstrates how easy it is for bribery to paye the way for exports to leave the country. While there have clearly been some important improvements in these two aspects of the timber export process, examination of official statistics and two recent high profile cases of illegal export suggest that this has not had much impact. 8.3 Official statistics SPFFBZ controls the most important step in timber export – issuing the timber export permit. Customs and Cornelder simply process the export permits. Table 9 presents the timber export statistics from these three agencies. As in 2004, there are there are enormous discrepancies between the figures reported by SPFFBZ and the data supplied by the other agencies. This is clear evidence of the problems that persist, and point to the role of SPFFBZ in facilitating illegal export.

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Table 9: Official statistics on export of timber and sawnwood compared: SPFFB, Customs and Cornelder, 2002-2007 Agency/item 2002 2003 2004 2005 2006 2007

SPFFBZ

Logs 28,461 20,684 11,432 12,093 10,576* 15,529

Sawn 948 1,494 962 577 1,795 3,926

TOTAL 29,409 22,178 12,394 12,670 12,371 18,487

Customs

Logs 29,699 32,642 27,308 42,658

Sawn 2,156 1,839 2,420 4,599

TOTAL 31,855 34,481 29,728 47,257

% diff with SPFFBZ +257 +272 +240 +255

Cornelder

Logs 34311 26,735 31,167 18,779.4 30,448 37,241

Sawn missing 136 missing 2,963.6 1,179 4,164

TOTAL 34,311 26,871 31,167 21,743 31,627 41,405

% diff with SPFFBZ (+251) +171 +255 +223

Sources: SPFFBZ annual reports; Customs: register of exports; Cornelder: monthly handling * only 3 species reported: pau ferro, mondzo, muaga. The official statistics in Table 9 are only part of the story. Close examination of shipping documents themselves reveals more irregularities. Most timber leaves Quelimane in 20 foot containers. These have a maximum capacity of 33 m3 or 28,200 kg, and typically take 15-20 m3 of logs. Shipping is charged at a flat rate per container, depending on distance (China $2000), so exporters should try to maximise the volume of timber they stuff in. Yet the official documents suggest the containers going out with a fraction of this volume. Table 12 below provides examples related to export of pau preto. Green Crown’s declaration of 3 m3 per container is equivalent to at least 80% illegal export. 8.4 Cases of illegal export i) Pau preto Late 2007 and early 2008, saw a big scandal involving the cutting and export of pau preto – African Blackwood (Dalbergia melanoxylon). As a precious species, the annual quota available to simple licence holders is set by the Minister. In 2007, that quota was 100 m3, but according to the regulations, licences must be requested in January. Because early in the year, there was no demand for pau preto, no licences were actually requested or issued. Concession holders are entitled to harvest whatever is stated in their management contract. In Zambézia, 12 concession contracts include pau preto, to a total of 720 m3.

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In around September, demand started to grow. It is not clear whether this is because traders identified pau preto as a species they could export as logs, or because Chinese manufacturers realised it could substitute for much more expensive Asian timbers in furniture and veneer. Traders started offering $190-$350/ m3, simple licence operators began requesting licences (even though the deadline for licensing had passed), as did some concessions. Word went out, and an illegal cutting boom began all over the province. Photo 13: Pau Preto from Zambézia in a warehouse at the Furen Market, Shanghai, China

Photo 14: Pau preto log end, showing sigla of Zambézian simple licence logger,

Furen Market, Shanghai The DPA claimed SPFFBZ licensed at total of 494m3, of which 249 m3 went to 3 concession holders and 245 m3 to simple licence operators. Details are provided in Table 10. Of the three concessions given licenses, only Calibu timber, a company specialising in pau preto, was actually entitled to have a licence. Metalwood did have 180 m3 included in its management plan but, importantly, none in its actual concession contract. Ali Ossene was licenced 50 m3, but only had 5 m3 in his management plan, and his according to SPFFBZ, his concession had already been annulled.

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Table 10: Pau preto licensees, licensing and legal entitlement (from approved management plans)

Operator Licensed (m

3)

Actual entitlement (m

3)

Concession

Metalwood 180 0

Calibu Timber 19 50

Ali Ossene 50 5

SUBTOTAL 249 55

Simple Licence theoretical 100

Santos Munene 25 0

Inacio Davane 25 0

Amiro Brahim Hussene 40 0

Moh Iqbal 20 0

N. Samamad 20 0

Carlos Ditiane 30 0

Aires Baronet 25 0

Adriano J Maria 15 0

Rafael C Mubaniane 10 0

Rui Silva Borges 20 0

Candida Alves 15 0

SUBTOTAL 245 100

TOTAL 494 155

This is already 339 m3 more than was strictly legal. However, observers estimate that over 3500 m3 was brought into Quelimane before the end of the year. One operator reported that at one point, around 30 trucks a day were coming into town loaded with pau preto, and little log yards were springing up everywhere. When demand began, prices of $700/ton were being quoted. Within a couple of months, as loggers undercut each other, the price had dropped to $400/ton , and by the end, they were getting only $150 for a cubic metre, and Asian buyers were again cheating on the measurements. So many people in Zambézia complained that the government had to act. A special inquiry was launched from Maputo, and the Ministry insisted that loads be weighed prior to export. This was carried out by the industrial operators’ association ADIMAZ, at the weighing scales of Madal SARL. Over 900 m3 was weighed, twice the licensed amount. Export began, and according to official reports, 615 m3 was allowed to be exported (more than SPFFBZ admitted licensing). However, review of custom’s register of despatches (Table 11), reveals that at least 899 m3 was exported.

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Table 11: Customs records of export of pau preto Company Ship/voyage m

3

TTT Songo 163 30.3

TTT Songo 164 29.78

Gordon Kenny Songo 164 76.85

Calibu Optima 408 7.5

Flaminga Optima 408 84.4

Alman Optima 408 43.73

Green Crown Optima 408 51.84

Good Year Optima 408 51.4

OLAM Chopol 254.23

Weida UAFL 54.73

TTT Timber UAFL 63.59

MJB Filhos Optima 62.7

Weida Songo 167 88.37

TOTAL 899.42

Source: Customs: register of despatches Closer examination of customs data suggests that even this figure is a serious under-reporting. Most of the pau preto went out in 20 foot containers. As mentioned above, these containers typically hold 15-20 m3 of timber. Table 12 shows how shipments were under-reported. It appears that the legal (documented) logs are declared, and then illegal logs are added to fill up the containers. In March 2008, OLAM declared the export of 256 m3 pau preto on the ship Chopol 2. It was part of a mixed shipment of around 1450 m3, including over 800 m3 of pau ferro planks and about 300 m3 of mucarala. As we will see below, mucarala – a relatively low value Class 3 timber that can be exported as logs – is being used as a cover for exporting logs of other species. Similarly, shipments supposedly of pau ferro planks are used as covers to export pau ferro logs. The total volume is also rather low for a ship like the Chopol. There is no direct evidence that anything irregular took place. But in May 2008, OLAM had a stock of an estimated 10,000 m3 of timber. So illegal was it that they were already exporting to China on the basis of 2008 cutting licences –before the cutting season had even got underway. In all, OLAM Mozambique admitted (to us) purchasing at least 600 m3 of pau preto. They also told us that all the pau preto then in their log yard was legal, but they were unable to export it, because of the massive illegal cut by other operators. They portrayed themselves as unfortunate victims other peoples’ dishonesty and were petitioning at Ministerial level. They expected that the export ban would be lifted soon.

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Table 12: Under-reporting of pau preto exports Exporter Date/ship No.

containers Declared

(m3)

equivalent m

3/container

illegal m

3*

TTT Timber 12/07: Songo 163 10 30 3 120

TTT Timber 01/08: Songo 164 10 62 6 88

Gordon Kenny 01/08: Songo 164 10 124.2 12.4 26

Madeiras Alman 02/08: Optima 4 43.7 10.92 17

Green Crown 03/08:Optima 409 16 51.8 3.23 188.2

Weida 04/08: UAFL exp 12 54 4.5 126

Weida 04/08: Songo 167 13 88 6.8 107

Source: Customs documents; * assuming 15 m3 in 33 m3 container SPFFBZ’s explanation for this fiasco is that they had never before handled trunks as irregularly shaped as pau preto, and so lacked the capacity to assess the volumes being presented for export. Weighing was brought in, which, they say, helped, and when it was realised that they had exported 30 times the annual quota for pau preto, they clamped down on it and took appropriate policy measures. Now they say, no more export of pau preto will be permitted for two years. This may be so: in China we learnt that the market for pau preto is now completely saturated, with approximately 30,000 m3 left unsold in logyards. We have subsequently learned of a further development. In late 2008, 16,000 logs of pau preto were confiscated from the log yards of the main Asian traders by SPFFBZ/DPA. These were put up for auction, but no one bid to buy them. Then, under pressure from the traders, the government signed a memo, returning the logs to the respective traders for the price of the licence fee. So, the scandal has been resolved: the perpetrators have not been fined or otherwise punished; indeed – they have had their illegal timber restored to them, and been authorized to profit from it! There has been no investigation as to how the logs managed to get into the yards in the first place, or how the situation was allowed to develop, but the authorities can be seen to have tried to do the right thing.

The latest news (March 2009) is that 12 trucks laden with pau preto left Quelimane for the port of Nacala, from where illegal export is now relatively easier.

ii) 30 containers of pau ferro logs In September 2007, there was a tip off about an illegal export of logs from Quelimane on the container ship MV Songo. Initially, the Governor and DPA strongly resisted any action or investigation, but complaints went to Customs in Maputo, who ordered that the 30 containers to be unloaded from the ship, and sent in a team from Beira to investigate. The containers were supposed to hold logs of mucarala, but on inspection, lots of pau ferro logs were found mixed in with them. The logs belonged to the company TT Timber, one of four companies operating in Quelimane, owned by Ken Ho, a Taiwanese businessman. The

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manager of TT Timber admitted paying 300,000 MTN to named SPFFBZ staff to issue false export licences, and 150,000 MTN to customs to facilitate clearance. . The staff were not arrested, or even suspended, and instead of being expelled from Mozambique, TT Timber was allowed to keep operating. On inquiry, the DPA said that the case was “under investigation”, The Acting Head of SPFFBZ said that “theft is theft, it happens and provincial authorities are taking the appropriate action”. It was not until August 2008, that the case was finally resolved, and the Head of SPFFBZ Enforcement Unit Humberto Filipe and Ana Pinheiro have been arrested, and will be charged under anti-corruption legislation. The Customs officer was not identified. Despite what has happened, TTT Timber was in May 2008, still not sawing its logs. The manager told us, “it’s a big headache”, and he is simply storing them in the log yard, waiting for the government to permit export of round logs again. “If we have no choice, then we will saw, or just deal in the species that can be exported as logs – pau preto and chacate”. TTT Timber has at least 100 m3 of pau preto waiting for export. Meanwhile, the illegal logs have been sold at public auction for $160,000, but the “legal logs” from the shipment, worth $30,000, were returned to TT Timber and exported (TV news story). In the last 12 months, there have been at least two other seizures of illegal containers – 47 in Pemba, belonging to the Chinese owned company MOFID, and spectacular 531 in Nacala25, belonging to 8 Chinese companies, including some which also operate in Zambézia. iii) Other cases In addition to these big cases, some new smaller scale scams have been perpetrated in the last 4 years. One company, Flying Dragon, a Chinese buyer, has been exporting through Malawi. They established 2 log yards in Milanje, then exported into Malawi, and from there re-exported to China via by train to South Africa, and ship from Durban. China’s timber trade statistics now show Malawi as a trading partner. 8.5 Official Investigations In October 2008, Customs from Maputo launched an official investigation into timber export from Quelimane. They found widespread cases of the export of sawn wood outside the dimensions permitted by Ministerial Diploma 142/07. This was reported to DPA for action. He decided to fine operators rather than disallow export and confiscate timber, but these fines have never been enforced. More importantly (and confirming the evidence produced in “Chinese Takeaway”) they found very widespread under-reporting of volumes exported, by an estimated 50%. Collusion is evident, because the official documentation from traders and DPA all do appear to match up. They also found widespread under-

25

See: http://www.integridadepublica.org.mz/index_en.asp?sub=actual&doc=6, and

http://www.citizen.co.za/index/article.aspx?pDesc=50465,1,22

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invoicing of values of the exported timber to avoid local and Chinese taxes26, by an estimated 75%. They concluded gross negligence on the part of Customs and the DPA. Since timber is the primary export from Quelimane, staff cannot plead ignorance of regulations or methods. Although the primary responsibility for ensuring legal timber export lies with DPA, Customs has to play a role, checking documents against the actual merchandise. They recommended disciplinary action and replacement of staff, followed by regular transfers to other posts and provinces, citing length of service in one post as leading to complacency, arrogance and corruption. Their report was submitted to DPA in Quelimane, but its publication has been suppressed, and no action has been taken. 8.6 What the operators say: “Illegal export is not getting much more difficult, but it is getting more expensive for the operator”. OLAM Mozambique told us that in the 2006/07, illegal wood (without any kind of documentation) was bought by Chinese for $10-$15 less per m3 – but now the discount is more like $40-$60.” “There’s been a change in the climate. Officially, export has stabilised. The big ships are now Korean, with freight pre-paid at destination. They declare 1000 m3, but the real papers with the company say 10,000 m3. Containers are harder to cheat on – but it still happens, with the connivance of the forestry and customs authorities. Anyway – the big quantities still go out in bulk”27. “There are two sets of documents, one for the officials, and one for the shipping company that has to state the actual volume and charge the proper rate.” In Mozambique, simple licence operators are still complaining about the way the Asian buyers measure logs. Often only the heartwood diameter is measured, or, if the log has an irregular shape, the shortest distance across the centre of the log. Typically, any defect is subtracted from the total volume. Demands of the Chinese market are cited to justify these practices. However, in China we learned that at point of sale, the volume measurement is based on the full circumference of the log at its mid-point. So, Chinese practices in Quelimane are flagrant cheating of the Zambézian producer and of the Zambézian forests.” Conclusion: The port might have been rehabilitated, but official statistics, customs documents, documented, high profile cases and informants’ accounts still prove illegal export is continuing apace. Things might have become a bit more difficult for illegal exporters, but much more timber is now leaving Zambézia via Nacala and Malawi.

26

In China 13% VAT is charged on log imports and 17% on processed wood. This also helps

account for the stated preference for logs. 27

This was true until late 2007, when the last bulk carrier came to Quelimane.

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9 Remaining stocks of commercial timber We return to our starting statement – “nao ha mais madeira” (there’s no more timber!)! The statement may be an exaggeration, but in many ways, remaining stocks of timber is the key issue for any study of the forestry sector and the bottom line for its future. In 2004, the purpose of the Chinese Takeaway study was not to demand a halt to forestry in Zambézia, but to call for the sustainable management of the forests and for harnessing them forests to help alleviate poverty. One of the main conclusions was that timber harvesting in Zambézia was out of control, threatening the long-term availability of the main commercial species, and undermining their role in provincial economic development. In 2008, perhaps the starkest difference of opinion in Zambézia forestry was over the remaining stocks of timber: the government declaring that sustainable management had been established and plenty of timber remained, and the operators lamenting that the valuable timber was nearly finished, and that industry has no future. Unfortunately, we cannot finish with a categorical verdict. An inventory would be required to determine the actual situation. There have been two recent inventories in Zambézia, but as discussed above, both were conducted by companies linked to DNFFB, and probably represent serious over-estimates of timber stocks, in order to justify maintaining harvesting levels. To end this study, we are left with opinion and circumstantial evidence: Only government officers believe that a lot of good timber remains. The ,Acting Head of SPFFBZ said he did not know why people are saying that there’s no more timber. He cited the 2002 inventory for Zambézia, and added that some areas, like Lugela, have never ever been exploited. He admitted that in Morrumbala District, mondzo (Combretum imberbe) has been cleaned out, but said that elsewhere stocks of mondzo are still good. Mondzo is an interesting and instructive case. It is a very slow growing heavy hardwood, found mostly on floodplains. The Zambézia inventory published in 2005 established an annual allowable cut (AAC) of 899 m3, 89% of which was in Morrumbala. Only four other districts had any mondzo at all, so stocks certainly are not good elsewhere. Serious concern about the overexploitation of mondzo started in 2005, when the previous DPA Jone, banned cutting in Morrumbala, Mocuba and Mopeia districts, because of the terrible overharvesting that had taken place. Nevertheless, in 2005, the last time SPFFBZ reported log export by species, 3484 m3 were exported – nearly four times the AAC! The new DPA reinstated the logging in 2006.

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Most of our other informants were worried about the remaining timber, and the comments and behaviour of operators are particularly telling: “The inventory was completely wrong – there’s nothing left. The new National inventory is also wrong – 80% of commercial species are gone, and the ones that are left are so spread out you can’t harvest them commercially. It says Zambézia has 92,000 m3 of mondzo – but that was lost years ago”. The Director of OLAM Mozambique in Zambézia, one of the biggest timber exporters in the province, told us that with the current rate and intensity of cutting the company doubted whether industrial quantities of wood would exist in the near future. Already the costs of finding, cutting, extracting and transporting the timber is reducing their profits to an unsustainable level. He cited “operators in general” as believing that stocks of commercial timber would only last 5 more years. This is probably the reason that OLAM has not yet established its own sawmill. One “furtivo” we met in Morrumbala told us that it was now getting difficult to find pau ferro (Swartzia madagascarensis) of reasonable quality and mondzo was pretty much wiped out. In 2008, many people, including the Governor and DPA, were already talking about the need to start trying to market the 38-40 under-utilised species. Consultants are as cavalier as the operators and as unconcerned as the donors. Eduardo Mansur, long time FAO consultant in Mozambique28, dismissed concerns about forest governance in Zambézia pointing out how unimportant the forests were compared to other countries in central Africa, and how the corrupt practices were just typical of Africa. Yes, all the good timber had probably been taken – what Mozambique has to do now, is start marketing its other species. The unfortunate fact is that forest management in Mozambique was probably only economically viable based on the high value species. Now that these have gone few investors will be interested, and being heavy hardwoods, these species won’t be back any time soon. It is worrying possibility that forest management in Mozambique might only have been economically viable based on the high value species that filled a particular niche substituting for very precious and rare timbers in reproduction traditional furniture market in China. Even these few species suffer considerable competition with species from humid tropical Africa and Asia with similar properties, but with larger logs of better form. Zambézia’s under-utilised species are likely to experience similar competition. Once the main commercial species have gone, few industrial investors will be interested in Zambézia, and being heavy hardwoods, these species won’t be back any time soon.

28

Mansur’s wife Carla Pereira wrote the management plan for Madal,

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Photo 15: Tristezas Tropicais: Villagers in Mocuba district, sitting on one of many logs abandoned by a simple licence operator who cut timber in their forest in 2007.

10 Conclusions and Recommendations: Strictly speaking, most of the statements made by the DPA and Governor were indeed true – annual licensing has been kept below 50,000 m3, the number of simple license loggers has decreased, the number of concessions has increased, there are more inspection posts, some communities do assist with enforcement, the port is better controlled, log exports have declined dramatically, there are more sawmills and greater in-country processing of timber and probably more forestry jobs. However, we cannot provide the positive report the Governor was seeking.

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The conclusion of this study is that the fundamental problems found in 2004, of a “predatory elite” extracting so much from the forestry sector for their personal benefit as to actually impede its sustainable development29 have not been resolved. As a result, the implementation of national policies for poverty alleviation, sustainable management of natural resources, industrial development, good governance and fighting corruption in the forest sector in Zambezia is almost a complete failure. Indeed, the situation has worsened significantly since 2004 and with a national election in a few months time,is likely to worsen still. The Chinese Takeaway continues through the port of Nacala, and the stories from Zambezia’s forests remain very sad. The cover photo of the report shows villagers in Mocuba district, sitting on one of many logs abandoned by a simple licence operator who cut timber in their forest in 2007. Some of these men worked for the operator the whole season, but he left without having paid anyone. Another operator did the same thing in 2008. This community’s forest has been virtually stripped of its valuable timbers, and they have been left even poorer than before. Legitimate industries, most of which invested in new equipment early in the decade in anticipation of the implementation of the sawing requirement, also continue to suffer. Undermined by national policy and the lack of law enforcement, under-supported by local government and over-inspected by forestry and other authorities, they are now struggling with the proliferation of cheap sawmills, capturing the business that should be theirs. Donors continue to look the other way, believing their broader policies are creating a development model for Africa in Mozambique and designing forestry programmes as if the problems did not exist30. More than sad, these stories are a disgraceful reflection on the progress of “development” in Mozambique and a betrayal of the poor by their government and the donors. To summarise, the main points of concern are:

The forest resource continues to be plundered, while the forestry sector is still playing almost no role in poverty alleviation in rural areas and the sustainable economic development of the province.

The continued export of rough sawn planks and illegally of raw logs through the neighbouring port of Nacala is undermining the log export ban, and the development of forest industry and real job creation. Serious local industries remain unsupported by Government, and low quality sawmills have been allowed to proliferate.

29

See Hanlon 2008 for detailed analysis and discussion. 30

One of the most disturbing findings of this study is just how easy it is to subvert the simplistic

criteria and indicators used by donors and government to monitor policy implementation. PROAGRI

supporters would probably have taken the information and data of the Governor and DPA at face value,

concluded that things had improved, applauded and renewed support for the sector.

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Corruption and illegal activities have paralysed the development of the sector and this province. Efforts are not applied to law enforcement but to creative bypassing of regulations.

The lack of control we saw in the simple licence sector in 2004 has spread to the now much larger concession sector. Harvesting is still out of control.

Unsustainable management of the forests has been enshrined in 32 management plans, approved despite their flaunting of the recommended 30 year cutting cycle.

Access to information, transparency of reporting and government accountability to its citizens have deteriorated significantly. Reporting by SPFFBZ has deteriorated. A private company would never be permitted to present such incomplete accounts– and SPFFBZ’s annual report is effectively an account to the nation.

The priority given by Government to community land rights has been reduced to a “level playing field”, on which communities must compete on the same terms as more powerful investors. Community applications for concessions are not being approved.

Recommendations:

As recommended in 2006, implement a moratorium on simple licenses and new concessions; subject all existing concessions to independent assessment, and any approved operators, continue subject to routine independent forest monitoring31.

Stop the illegal export of logs through the port of Nacala.

Revise concession policy to ensure fewer, larger concessions that have AACs based on at least a 30 year rotation that are sufficient to support a viable industry.

Reinstitute the requirement for full processing; end rough sawing and export of planks.

Some high quality processing is happening locally in Zambézia – more can happen. Invest in it. Support local industries for sustainable economic development. Facilitate affordable credit. Provide technical training for forest industry workers.

Conduct independent reviews of the two existing forest inventories and develop a realistic assessment of remaining forest resources.

As part of the reactivated computerised forest licensing and infractions databases, get licences and transport permits printed off directly from the computer, with unique reference numbers linking back to the database.

31

The global economic downturn and processing requirements have depressed the timber markets in

Quelimane since 2008, presenting an excellent opportunity to implement a full or partial moratorium. A

separate document will discuss the impacts of the global economic crisis on the forest sector in Zambezia

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Publish the details of all licences issued each year and inform concerned communities of the volumes and species that will be extracted and the value of the 20% of royalties they can expect to receive.

Strengthen enforcement at the checkpoint at Nicoadala – since it is on the only road route to the Quelimane port, it is the key point for any forest law enforcement.

As a matter of urgency, the fully computerised SPFFBZ checkpoint in the Quelimane port should be re-established

Establish full computer links between the Nicoadala and port checkpoints and the provincial headquarters.

Link licensing and infractions databases to an internet site, with open public access.

Devise a national standardised annual reporting format for forestry that is meaningful, and ensure accurate completion every year.

Support community-based concessions as an alternative strategy for establishing sustainable pro-poor forest management.

Develop a scheme to use the 15% replanting fund to pay communities to establish nurseries and carry out the replanting work.

Invest in research and development for processed timber and manufactured wood products markets in China and elsewhere.

Lobby the Chinese government to promote the import of processed timber from Mozambique by their state-owned enterprises.

As recommended in 2006, get the politicians, military and civil servants out of the forest. Stop companies like OLAM and Green Crown operating illegally and with impunity.

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5. References (2007) The Legal Framework for Recognising and Acquiring Rights to Rural Land in Mozambique Centro de Integridade Pública (2007) [http://www.integridadepublica.org.mz] Moçambique

CHITARA, S (2003) Instrumentos para a Promocao do Investimento Privado na Industria Florestal Mocambicana. MADER, DNFFB, DFID. HANLON J and T SMART (2008). Do Bicycles Equal Development in Mozambique? James Curry, London. MACKENZIE Catherine (2006), Governancao da Floresta na Zambézia - Um Take Away Chinês, Moçambique. MACKENZIE Catherine (in prep) Forestry in a time of Recession Ministério da Agricultura - DNTF (2005-2006), Relatório Estatístico Anual, Moçambique. Ministério da Agricultura, SPFFBZ (2004-2007) Relatorio Anual, Moçambique. Rural Consult 2006 SAKET, M. (1994), Report on the Updating of the Exploratory National Forest Inventory. Department of Forestry Inventory, Forest Inventory Unit. Ministério da Agricultura e Pescas. Maputo, Mozambique. SERRA, Carlos (2007), Colectânea de Legistação sobre Terra, Centro de Formação Jurídica, Maputo The Citizen (2007), [ http://www.citizen.co.za ] South Africa USAID (2005) Corruption Assessment: Mozambique.

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Appendix 1. Annual Allowable Cut by Species and District

(Cutting Cycle 40 years, confidence factor 0,8)

Scientific Name Commerical Name

Zambezia

Alto Molocu

e

Gile Gurue

Ile Lugela Mag. Costa

Milange

Mocuba Mopeia Morrumbala

Namacurra

Namarroi

Nicoadala

Pebane

Pterocarpus angolensis

Umbila 24,752 855 3,881 323 724 1,169 2,993 735 4,738 1,408 4,793 137 448 525 2,022

Pericopsis angolensis

Muaga 20,176 267 2,733 78 311 4,735 2,214 342 2,211 1,736 1,763 150 1,647 618 1,372

Burkea africana

Mucarala 18,410 189 859 61 299 4,146 765 454 3,750 1,069 4,358 85 1,530 362 483

Swartzia madagascariensis

Pau-ferro 11,713 32 1,810 10 43 345 1,959 62 3,730 458 1,937 55 109 192 972

Millettia stuhlmannii

Jambire 9,855 0 3,965 0 0 0 389 0 319 882 1,572 80 0 317 2,331

Khaya nyasica

Umbaua 4,831 345 0 149 214 570 248 433 1,558 0 1,175 0 138 0 0

Afzelia quanzensis

Chanfuta 3,780 0 297 0 0 0 487 0 353 1,311 525 133 0 507 167

Combretum imberbe

Mondzo 899 0 0 0 0 0 0 0 68 18 809 1 0 3 0

Dalbergia melanoxylon

Pau-preto 1,358 24 309 8 26 33 121 40 169 70 351 5 25 23 156

Sub total 1 95,774 1,712 13,854

629 1,617 10,998

9,176 2,066 16,896 6,952 17,283 646 3,897 2,547 7,503

Brachystegia spiciformis

Messassa 282,898 3,415 37,414

1,009 3,869 17,664

32,664

4,119 53,735 47,605

32,695 4,215 7,605 17,131 19,758

Brachystegia boehmii

Mafuti 104,419 2,363 15,758

799 2,875 3,509 13,763

3,645 21,380 5,436 22,730 561 985 2,120 8,495

Julbernardia globiflora

Muroto 61,307 4,183 10,341

1,871 3,229 4,979 4,568 2,573 8,953 3,143 271 1,882 1,132 5,469

Sub total 2 448,624 9,961 63,513

3,679 9,973 26,152

50,995

10,337 84,068 56,184

55,425 5,047 10,472 20,383 33,722

Grande total 544,398 11,673 77,367

4,308 11,590

37,150

60,171

12,403 100,964

63,136

72,708 5,693 14,369 22,930 41,225

species referred to in 1994 inventory (= 72,533 m3)

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