Global Policy Forum

The Role of Liberia's Logging Industry

January 24, 2001

Briefing to the UN Security Council by Global Witness January 2001

1. Recommendations

The UN Security Council should:

Immediately impose a total embargo on the exportation and transport of Liberian timber, and its importation into other countries.

Such an embargo should remain in place until it can be demonstrated that the trade does not contribute to the Revolutionary United Front (RUF) in Sierra Leone, and is carried out in a transparent manner (as referred to in para 49 of the Report of the Panel of Experts appointed Pursuant to UN Security Council Resolution 1306 (2000), Paragraph 19 in Relation to Sierra Leone.

In addition it is recommended that a detailed investigation is carried out into the Liberian timber industry, particularly of the Oriental Timber Company (OTC), to enable the UNSC and other members of the international community to gain a comprehensive understanding of the role of this industry in Charles Taylor's presidency and the conflict in Sierra Leone.

2. Introduction

The Sierra Leone Expert Panel Report draws attention to Liberia's role in the trade of diamonds and weapons with Sierra Leone's Revolutionary United Front (RUF). It also refers to the important role timber revenue plays in the fortunes of President Charles Taylor and his rule in Liberia.

However, according to sources, it is likely that the timber trade is more financially valuable to him and his security forces than is the trade in diamonds and that a significant portion of this revenue is also used by President Charles Taylor to train, arm and supply the RUF.

This illicit trade is virtually monopolised by one company, the Oriental Timber Company (OTC), that also holds a virtual monopoly on all shipping entering Liberia and much of the country's internal transportation which enables the transhipment of arms. As The Sierra Leone Expert Panel Report has already noted, the chairman of OTC "Gus Van Kouwenhoven is responsible for the logistical aspects of many of the arms deals.

Through his interests in a Malaysian timber project in Liberia, he organises the transfer of weaponry from Monrovia into Sierra Leone.

Roads built and maintained for timber extraction are also conveniently used for weapons movement within Liberia, and for the onward shipment of weapons to Sierra Leone."

OTC has been implicated in transporting weapons to the RUF in Sierra Leone, managing the whole process from disembarkation at Buchanan port to the use of its own trucks along the logging roads it has constructed.

According to sources, OTC's massive and unsustainable logging operations fund weapons purchases for the RUF and President Charles Taylor's personal security forces, while enriching himself.

Furthermore the scale of this completely unsustainable timber trade is such that Liberia's forests are likely to be commercially logged out in as little as thirteen years. One Lebanese company told Global Witness that they expected to operate in the country for another 20 years before they had removed all merchantable timber , but OTC's operations are escalating this timescale. What is sure is that there is virtually no forest management and no known cases of replanting.

The social, economic and ecological impacts of this trade have severe long term implications for the future of Liberia and its people.

Global Witness believes that it is essential that the UN Security Council imposes an embargo on the exportation and transport of Liberian timber, and its importation into other countries.

Such an embargo should remain in place until it can be demonstrated to the UN that the trade does not contribute to regional conflict, and is carried out with transparency. Paragraph 49 of the Report of the Panel of Experts appointed Pursuant to UN Security Council Resolution 1306 (2000), Paragraph 19 in Relation to Sierra Leone provides the opportunity to take this necessary step .

3. President Charles Taylor's use of Timber Revenue to fund conflict in Sierra Leone and Regional Destabilization.

Currently there is no reliable data or estimate as to the amount of revenue that President Charles Taylor is gaining as a result of the Liberian timber industry because to date very limited research has been carried out on the subject. For this reason it is not possible to give figures and it is clear that there is an urgent need for reliable research to be carried out.

However, a wide number of observers have noted that the forestry sector provides the bulk of President Charles Taylor's funds. According to sources, he uses this income to provide the RUF with funding, arms, training and logistical support. He utilises extra-budgetary payments from logging companies who in turn receive special on and off-record privileges while aiding President Charles Taylor with illicit smuggling of arms to Sierra Leone.

Such activity ensures the continuation of Sierra Leone's conflict and undermines UN and other efforts to bring peace to the country.

Revenue from this industry is also the main source of funds for President Charles Taylor's security forces; some of which have reportedly been helping the RUF in Sierra Leone and in Guinea.

Further involvement of President Charles Taylor's military support to the RUF was provided by the UK's UN Ambassador Jeremy Greenstock on 1 August 2000 at the UN Sierra Leone arms/diamonds hearing in which he stated that President Charles Taylor "is giving direct military support encouraging attacks against UNAMSIL and Sierra Leone government forces, providing strategic direction, influencing decisions on leadership and on command and on control."

President Charles Taylor's has a number of security forces which include:

Liberia National Police (LNP): has primary responsibility for internal security Antiterrorist Unit (ATU): an elite presidential guard Special Security Service (SSS): strongly armed, executive protective force

Sam Bockarie, a former RUF field commander, openly stated that RUF troops were also being trained in Liberia by forces closely linked with the Anti-Terrorist Unit (ATU) . The above mentioned forces have also been involved in: extra-judicial killings; torture; intimidation; random arrest and detention; abuse and humiliation of population; harassment of human rights observers. Timber revenue, as well as prolonging the conflict in Sierra Leone, is also helping to fund the above abuses. This situation is unlikely to change until an effective timber embargo is put in place.

President Charles Taylor is seeking to formalize control of revenue from natural resources by designating them "strategic resources" as defined by the Strategic Commodities Act (see ANNEX I - Strategic Commodities Act) which has yet to be passed into Liberian law.

The Act states "The President of the Republic of Liberia is hereby granted the sole power to execute, negotiate and conclude all commercial contracts or agreements with any foreign or domestic investor for the exploitation of the strategic commodities of the Republic of Liberia." The commodities listed, including diamonds and timber, make up nearly 100% of Liberia's exports. This will undoubtedly provide President Charles Taylor with more income with which to provide the RUF with support.

Because President Charles Taylor uses the revenue from the timber industry to maintain and develop the RUF and local security forces, long term solutions to Sierra Leone's violent conflict must clearly address this misappropriation and misuse of state revenue.

4. Timber Revenue in 1999

There is a limited amount of data available on Liberian timber export figures which shows that connection between the logging industry and President Charles Taylor makes it almost impossible to access records that reflect actual logging activity and revenue despite the existence of a Liberian regulatory body.

According to the Liberian Forestry Development Authority (FDA), which is a government body assigned to monitor and document forest practices and exports, the export value in 1999 was valued at USD 21 million. This is unlikely to be the genuine export figure. In contrast the known import value for Liberian timber gives an approximate value of USD 29 million - a difference of some USD 8 million. However this differential can be partially accounted for in the costs of transportation and is therefore not an indicator of missing revenue.

The following estimates of the OTC's actual production and revenue have been calculated comparing Global Witness research and FDA figures for 1999. They reflect the possibilities that other concessionaires may be producing and exporting more than stated in the FDA report: In the 12 weeks that the OTC operated in 1999,(October to December) they managed to log over 100,000 m3 of forest more than the amount reported by the FDA, tax and port authorities. Aside from this unreported logging, it is fair to assume that OTC is now avoiding tax of USD 15-20 million and making profits between USD 50-70 million split between itself, the parent company and President Charles Taylor.

It is highly likely that the OTC, and therefore President Charles Taylor, received significantly more revenue from the timber industry in 2000. According to sources, export of timber in 2000 was twice that used in the calculations in ANNEX I providing far greater opportunity for illegal profits.

5. Liberia's Logging Industry

There are four ports in Liberia: Monrovia, Buchanan, Greenville and Cape Palmas also commonly known as Harper port. These are used to export timber and other commodities. According to several sources, extensive illegal activity is conducted from these ports, particularly Buchanan port. However, a source in the Liberian timber industry has also stated that a new method of loading cargo from beaches exists without the need for port facilities.

In their 1999 report, the FDA listed 35 logging companies operating in Liberia. According to sources , several of these companies are operating illegally under current Liberian law and the terms of their contract. Research indicates that the UN should focus on the following companies: OTC (see Oriental Timber Company (OTC) Case Study - page 5) Forum Liberia and Exotic Tropical Timber Enterprise (ETTE).

ETTE is run by Ukrainian businessman Leonid Minin who is trading diamonds and arms to both President Charles Taylor and the RUF through his timber company, using a number of countries to tranship the arms. This is documented in detail in The Sierra Leone Expert Panel Report.

The Sierra Leone Expert Panel Report also notes, in paragraph 216, that "roads built and maintained for timber extraction are also conveniently used for weapons movement within Liberia, and for the onward shipment of weapons to Sierra Leone." This is also confirmed by Global Witness research.

In an apparent attempt to address growing concerns of the international community over timber revenue President Charles Taylor in October 2000 announced the possibility of banning timber exports in 2001. However, it seems highly unlikely that he will voluntarily lose a key source of income and his statements may have more to do with contract negotiations with timber companies rather than concern over the misuse of the state revenue. In fact, according to Global Witness research, President Charles Taylor is seeking to develop larger timber concessions with a smaller number of companies. Oriental Timber Company (OTC) Case Study.

In 1998-1999 Gus van Kouwenhoven acquired the concessions that made up most of the south-eastern Liberian forest. He subsequently acquired concessions just north of Buchanan port stretching to the River Cess county and the Sinoe county. Maps of his concession allocation are extremely difficult to obtain. Sources estimate that the land area under his control is between 2,500,000 and 4,000,000 m2.

In 1999 OTC (that presents itself as a Malaysian company but is in fact owned by Indonesian company Djan Djanti) made a deal between Mr. Kouwenhoven, and President Charles Taylor. As part of this deal, Mr. Kouwenhoven became OTC Chairman. OTC would conduct field extraction, control of the port of Buchanan and the construction of roads of benefit to the Liberian people. According to sources OTC paid President Charles Taylor USD 5 million up-front, it is likely that this was in exchange for tax-exemption and exclusion from controls and regulations.

Operations: An indication of the scale of OTC's operational capability is reflected in that they operate seven days a week with 140 or more machines and 74 trucks that make two trips to Buchanan port every day.

According to the FDA, OTC exported 20,972 m3 with a value of USD 1,917,835. This was 9% of the total logs shipped by any company operating during 1999 even though OTC was only operating for 12 weeks. Global Witness research revealed that OTC has committed serious infringements of contract and law: Clear-felling, extracting all species, and leaving little or nothing behind. This renders forest renewal practically impossible and is in most cases illegal. The practice of clear-felling has nevertheless been confirmed by OTC's Public Relations Consultant, G Backus Mathews .

Sources say that between 50-80% of logs going to Buchanan port are undersized.

OTC is not fulfilling any reporting requirements as prescribed in the contract.

FDA regulations state that a concessionaire is not permitted to log more than 4% of their concession area. Sources found that OTC is logging far over this limit.

Part of OTC's responsibility was to build roads that would benefit the people of Liberia. The roads built by OTC are of very low standard and only of use as logging roads. Global Witness research found that OTC bulldozes through villages, homes and plantations with little warning and no compensation.

OTC has bulldozed areas of forest that are of religious importance to local communities.

Commitments to invest in a plywood factory and reforestation have not been realised.

OTC has planned to replace some forest areas with plantations - these include areas designated as protected forest. None of these plans have so far been enacted.

The OTC concession map is not publicly available in Liberia. However Global Witness has managed to obtain a photograph of the map. A comparison between this and a map of Liberia show the vast scale of the concession awarded to the OTC (see ANNEX II: Map1 - Liberia page 12 and ANNEX III: Map2 - OTC Forest Concession page 13).

6. Liberian Timber Markets

According to the FDA, The total timber export for 1999 was 189,939.959 m3. However as previously stated, these figures cannot be relied upon and are likely to be an underestimate. Of direct importers of Liberian timber, the five largest ones (see appendix etc for list of other countries) were:

France at 37.07% of total export Italy at 19.17% of total export Turkey at 15.07% of total export China at 7.77% of total export Indonesia at 6.31% of total export.

According to the FDA, 17,532 m3 of round logs with a value of US$1, 973,219 were transhipped through the Ivory Coast - this amount is not included in official figures. The Ivory Coast is reportedly looking to the Liberian timber industry because it is itself facing a timber shortage . Despite the instability of the region, 2000 saw a significant increase in timber imported from Liberia. France increased imports of Liberian timber by 11% in the first six months of 2000.

According to Greenpeace International, there has been a sharp increase in timber imports into Europe over the past two years - this could be due to increased trade and / or production. This would confirm other reports of the escalation of logging in Liberia, particularly by the OTC.

7. Liberia's Forests in Deepening Crisis

In West Africa, Liberia is the only country that has a considerable amount of its original rainforest cover . It harbours large amounts of endemic flora and fauna such as the Pygmy Hippopotamus and houses some 2000 flowering plants, 125 mammals, 590 birds, 74 reptiles and amphibians and over 1000 insect species. Yet these numbers are based on a limited amount of observation and examination.

The Upper Guinea Rain Forest includes forested areas in Sierra Leone, Guinea, Liberia, Ghana, Togo and the Ivory Coast. Greenpeace have noted that Liberia's rainforest are the most seriously threatened in the region; with already 50% destroyed. This has had, and will continue to have, negative implications for the region as a whole.

In early April, 2000, Liberia's Minister of Agriculture, Roland Massaquoi, stated that "it is evident that most of the country's natural rainforests has been depleted without reforestation...if Liberians are not careful about the effective utilization of the forest reserves, the nation would face drought in the next 15 years," and criticised the way in which logging companies were operating.

According to sources, there are plans for two new major concession areas of enormous proportions to be granted to two companies: North-West Liberian Timber Company and Liberian Eastern Timber Company. Together with OTC, they will cover two thirds or more of Liberia's forests. It is highly likely that, in order for President Charles Taylor to continue to finance the RUF and Liberian security forces, he will concentrate his efforts on the logging industry in order to ensure income. Deforestation would increase to a level that could mean that Liberia's forests would be commercially logged out in 10-20 years.

8. Conclusion

It is undeniable that the timber industry in Liberia has funded and continues to fund regional and national insecurity. For the peace agreement in Sierra Leone to have a realistic chance of succeeding, the international efforts currently under way to deny the RUF military supplies and logistical support need to be comprehensive. As is the case with Liberia's diamond trade there is increasing information to suggest that President Charles Taylor draws a considerable amount of revenue from the sale and export of timber which he is utilises to support the RUF. Therefore, Global Witness recommends a comprehensive embargo on Liberian timber and timber products and that further research on the connection between the Liberian timber trade and regional insecurity.


ANNEX I:Strategic Commodities Act


WHEREAS, consistent with Article7 of the Constitution of the Republic of Liberia, the Government is obliged to manage the economic and natural resources of Liberia in such manner as shall ensure the maximum feasible participation of Liberian citizens under conditions of equality so as to advance the general welfare of the Liberian people and the economic development of Liberia; and

WHEREAS, Article22 of the Constitution guarantees the individual the right to own real property and limits said right only to that which is above the surface and therefore the Constitution provides that private property rights however shall not extend to any mineral resources on or beneath any land or to any lands under the seas and waterways shall belong to the Republic and used by and for the entire Republic; and

WHEREAS, Certain unscrupulous individuals and entity persistently and consistently, extracts, mine, exploited, sell and exports the strategic Commodities, Natural Resources and Minerals of Liberia without just compensations or benefit to the Republic of Liberia by evading custom, taxes and revenue collectors to the Economic, Political and social detriment of the nation.

Wherefore and in view of the above:


Section 1. Title.

This Act may be cited as the strategic Commodities Act.

Section 2. Definition:

Immediately upon passage of this Act, strategic Commodities as used herein this Act, hereby defined and referred to as Natural Resources, Minerals, Cultural and Historical items which are of vital importance to the Nations' Economic, Social, Political and Cultural values and well-being of Liberia. Accordingly, the Strategic Commodities of Liberia include among others, the following:

(a) All mineral resources particularly, GOLD, DIAMOND, HYDROCARBON and any other finite Natural Resources Deposit such as, Natural Gas, precious mineral, metals and stones, now discovered or to be discovered in the future, which have economic and commercial value; and may be marketable domestically and internationally.

(b) All Natural Forest Resources particularly forest products such as Logs and Timbers and other unique and rare species of vegetation and tree common and indigenous to Liberia.

(c) All unique and rare sculpture, Arts and Artifact, Handiwork and Hand Crafts of historical, cultural, social, spiritual and economic value to the Republic of Liberia.

(d) All food and agriculture products, such as rice, coffee, cocoa, rubber and sugar, marine life as well as rare and unique species of wildlife and fishery such as fish, animal and birds indigenous to Liberia.

(e) The appropriate and applicable statutes, regulations, special agreements or guidelines now in effect or which may hereafter be promulgated shall govern the exploitation, sale or export of any strategic commodity. In all instances, whether by special agreements, statutes, regulations or guidelines, the exploitation, sale or export of any strategic Commodity must confirm to Section 4 of this Act.

Section 3. Empowerment:

The president of Liberia is hereby empowered to declare and designate from time to time, when deemed fit and necessary, any Natural Resources of Liberia, in addition to the forestalled resources herein declared, by this Act, as Strategic Commodities. When a commodity is declared by the president as Strategic Commodity, such declaration shall conform to and be consistent with, domestic laws and regulations; and shall not otherwise impair or adversely affect existing agreements or rights granted by an Act of the Legislature up to the date of expiration of said rights or agreement.

The president of the Republic of Liberia is hereby granted the sole power to execute, negotiate and conclude all commercial contracts or agreements with any Foreign or Domestic Investor for the exploitation of any of the Strategic Commodities of the Republic of Liberia. Such commercial agreement shall become effectively binding upon the Republic as would any treaty to which the Republic is a party, upon the sole signature and approval of the president of the Republic of Liberia.

Section 4 Declaration:

Immediately upon passage of this bill, strategic commodities as defined and referred to above, such as Gold, Diamond, Forest Products and other Natural Resources which provide substantive Economic, Social, Political, Spiritual and Historical benefits to the Nation and people of Liberia, are hereby declared, Strategic Commodities and property of the Nation and people of Liberia and are protected as such by this Act and other applicable statutes.

Section 5 Classification:

Strategic commodities are hereby divided and classified into four categories:

(i) Natural mineral Resources: (Metal, Stones, Gas and Hydrocarbon)

(ii) Forest Products (Logs, Timbers, Scientific plants and Wildlife)

(iii) Agriculture and fishery products(Coffee, Cocoa Rice, Rubber ,Palm oil, Shrimps, fish and piassawa)

(iv) Arts and craft including scruptures, paintings and traditional handcrafts

Section 6 Exploitation, Scale or Export of Strategic Commodities handcraft:

The appropriate applicable statutes, regulations, agreements or other guidelines now in effect or which may hereafter be promulgated shall govern the exploitation, sale or export of any strategic commodity.

Anything to the contrary not withstanding, in order to meet and encourage domestic industrialization and industrial and personal demands for raw material, development and growth, as the case made be, export and or exploitation shall be allowed only after the domestic demands and or quota have been met or fulfill.

In any and all instance, permit to export and or exploit any and all strategic commodities shall be granted only if the industrial requirement for manufacturing, refinement and processing the raw products into finish or value added products and personal domestic consumption are met or fulfill. In the instance there is domestic industrial demand and or domestic consumption demand, all domestic demands shall have first preference and the right of first refusal or choice to buy at competitive world or domestic market price, whichever is lower; prior to export or the granting of any export or exploitation permit.

The Republic of Liberia shall have the right to require all persons or companies engaged in the exploitation of the Natural Resources of Liberia hereto declare declared and called strategic commodities, to construct such factory or industry to process the raw material of the strategic commodities, into finish or semi- finish or value added products.

Section 7 Penalty:

A person or entity who violates any provisions of this Act, or violate any of the applicable rules and regulations governing or appertaining to said commodity has committed Economic Sabotage, a first degree felony, if he/she or it illegally conduct any business dealing in any of the Natural Resources designated and declare as Strategic commodities of the Republic of Liberia. A Violation of this act or any applicable rules or regulations governing the strategic commodities of the Republic of Liberia is punishable under Chapter 15, Sub-Chapter F Economic Sabotage, as provided in the Panel Law of Liberia.

For the purpose of prosecution under this Act or the panel Code of Liberia, illegal business dealing in any of the strategic Commodity shall mean and include among other:

(a) The prospecting, Mining, Exploitation, Selling and buying Natural Mineral such as Gold, Diamond, Copper, Petroleum and Stones or Hydrocarbon without proper license and clearance from the authorized agency of government.

(b) The unauthorized Cutting, Sawing, and Selling of Timbers, Logs and other forest products; as well as Buying, Hunting Exporting and selling protected birds and wildlife of Liberia.

(c) The marketing including the Exportation and importation of Agriculture commodities such as Coffee, Cocoa, Rice, Rubber and vegetable oil without proper license and permit from the authorizing agency of government;

(d) Trading and exporting out of Liberia, the Historical Arts and Handicrafts of Liberia.

Section 8 Effective Date:

This act shall come immediately into effect upon passage by the Legislature and subsequent publication into Handbills.

ANNEX II:Map1 - Liberia

ANNEX III: Map2 - OTC Forest Concession



France 37.07% Italy 19.17% Turkey 15.07% Portugal 3.15% Spain 3.30% Germany 2.71% China 7.77% Thailand 1.62% Libya 1.55% Greece 0.75% Netherlands 0.68% Ivory Coast 0.58% Gambia 0.27% Indonesia 6.31% Source: FDA Annual Report


Niangon Tetra Abura Ekki Framire Iroko Limbali Kusia Didelotia Aningre Samba/Wawa Makore Naga Lovoa Tiama Sipo Canarium/Aiele Faro Tali Khaya Sapele Movinqui Etimoe Akatio Apome Ceiba Dahoma Bosse Danta/Kotibe Kossipo Other Source: FDA Annual Report



FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.