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Chinese capital driving deforestation in Cameroon

Note: This feature was produced by Nfor Kingsley Monde, a journalist from Cameroon who received a reporting grant from the Wits China-Africa Reporting Project. The feature was published on October 21 in The Standard-Tribune, a newspaper published in Yaoundé.

As China becomes Cameroon’s main investment partner with over US$400 million annual investment, the growing quest for China’s capital in the country is suggested to be increasing oversights on Chinese-linked activities and fuelling incentives to illegal exploitation of forest in Cameroon to satisfy a huge Asian market.

Chinese investment in Cameroon is worth two and half times more than all other sources of foreign investment. About 80% of these investments are in infrastructure such as roads, water, electricity, seaports, agribusiness and forestry. With Chinese investment ranging from very large to small investments, funding sources are also diverse, coming from Chinese private as well as public banks.

For several years, China has been the leading export market for Cameroonian logs that remain unregulated by the partial log-export ban.

For several years, China has been the leading export market for Cameroonian logs that remain unregulated by the partial log export ban.

“The increasing environmental footprint of China in natural resources in Cameroon is due to both direct and indirect investments. Most Chinese activities are as a result of government’s applied funding from China into public projects, others are due to private direct investment from China,” according to Samule Nguifo, Executive Secretary of Center for Environmental Development Cameroon (CED).

Experts see the dependence on China as a major threat to the country’s willpower and that the ‘business as usual’ practice is fueling corruption and unsustainability in the forest and natural resource sector.

“Cameroon debt to China is fast growing and it is a major cause for concern because the state doesn’t really have the power to decide on the outcomes of Sino-Cameroon cooperation,” Nguifo adds.

These investments such as the deep-water port and mining investment worth over US$567 million and US$458 million respectively have provided access to most natural resources and both Chinese and Cameroonian firms are induced into legal and illegal exploitation of natural resources to quickly satisfy a high Asian demand.

For several years now, China has been the leading export market for Cameroonian logs. Exports to China increased from about 29% to 65% of Cameroon’s total log exports between 2003 and 2009. From 2009 to 2014 more Chinese firms have entered into the timber sector and the quantity of exports has more than doubled from less than 1 million to 2.5 million cubic meter of forest products.

About 85% timber are unprocessed log wood of various sizes that remain unregulated by the partial log-export ban. Their sizes are less important to the Chinese market, unlike the European market that strictly import sawn wood of a particular age and size. Wood from Africa is in high demand by the Asian market and any quality of wood from the forest easily penetrates these markets.

The forestry sector alone has more than half of the 12,000 jobs created by Chinese-linked investments in Cameroon. This therefore highlights the value of the forest sector to Chinese investments.

In the East region of Cameroon where Chinese firms are involved in timber exploitation and mining, and where the HydroChina international firm is also building a US$650 million hydroelectric dam with funding from the Export-Import Bank of China, the rush for forest resources in this region has particularly increased during recent years. On the pathways of these projects, timber of doubtful origin and quality is harvested.

This has raised concerns on the future of efforts to sustainably manage forests in Cameroon and in the Congo Basin. Cameroon has signed the Voluntary Partnership Accord with the EU, committing to fight illegal logging and illicit commerce of timber, but China’s continued import of illegal wood from Cameroon might jeopardise these goals.

Asian countries, particularly China and Vietnam, which are the most important markets for Cameroon’s logs, have not yet developed specific procurement policies for their log imports. Equally, there is yet to be an organized market for logs within Cameroon and the market for sawn wood remains the most important source of revenue for the local economy. Europe alone imports 80% of processed wood.

This situation favours exports to Asian markets. For example, in 2008, export of logs to China amounted to 147,180 m³, representing 57.1% of the total volume of unprocessed wood exported per year; Vietnam was second with 53,052 m³ and Italy third with only 18,859 m³.

“Asia is a quick and easy destination for illegal timber from Cameroon,” says Brendan Schwartz of Greenpeace Cameroon. There has been a high amount of timber from these illegal sources at Douala seaport destined for China, he added.

During the recently ended 14th edition of the World Forestry Congress in Durban, South Africa on September 8, Greenpeace highlighted how inaction over trade in illegal timber by Congo Basin countries, China, the European Union, and the United States is devastating the world’s second largest rainforest.

“A significant amount of the timber exported from the Congo Basin is illegally logged, 65% in Cameroon, 90% in the Democratic Republic of Congo and 90% in the Republic of Congo” says Michael O’Brien Onyeka, Greenpeace Africa’s Executive Director.

“The majority of this wood is imported by China, 70% of Africa’s log exports to China are from the Congo Basin. While legislation adopted by the EU and the US continues to be evaded by criminal timber traders and poorly enforced by the respective governments.” Onyeka added.

Likewise, Nguifo says “China does not require the same standards of timber quality as more demanding markets such as the EU. This has a direct environmental and commercial impact on Cameroonian forests.”

About 20 to 30 Chinese timber trading firms are present in Cameroon presently and more than 19 exploitation permits have been granted to some of these firms now occupying about 650,000 hectares or 10% of the forestry permit areas in Cameroon, whereas all the European firms occupy 28.4% of concessions.

A report on China-Africa governance conducted by Cameroon-based NGOs (Center for Environmental Development Cameroon,CED; and the International Institute for Environment and Development, IIED) with funding from UK AID, highlights that “Weak implementation of national and international regulations apply to Chinese-linked investments and lack of dialogue amongst Chinese and Cameroonian actors.” The report further explains that China is a key destination for some special forest products from Cameroon.

China is a key destination for ebony, a local wood species and other wood types such as Bubinga, which are all now threatened species due to over exploitation. The export of ebony increased from 30,000 kg to 350,000 kg from 2009 to 2014. This situation has implications on the sustainability of these species in the Congo Basin forest.

According to Patrice Kamkuimo-Piam of the CED Cameroon, “Chinese-led trade and investments have major implications for the forest and community livelihoods coupled with questions of unsustainability of investment, illegal logging, violation of laws and poverty amongst rural population.”

Despite the jobs created by the booming wood sector, questions remain as to the implementation and respect of environmental norms. In most cases there appear to be fewer opportunities for locals and value from processing timber locally, as the bulk of exports are unprocessed logs.

China meets easy grounds

The interests of local and foreign economic operators in timber and the extractive industry sector are deeply rooted and their objectives are to maximize their financial benefits, which so far has been easily achieved in a context of corruption in the country.

Corruption and mismanagement have been on the increase with Cameroon receiving first place for most corrupt nation in the world in 1998 and 1999, and the country is still in the red zone according to Transparency International standards. How this situation has facilitated Chinese engagement is not clear and it may have no effect, as Chinese assistance to Cameroon was rather boosted by China’s general win-win intervention strategy in Africa.

Locals and stakeholders suggest that illegal practices are worsening in Cameroon, resulting from increasing investments and capital pouring in from China. “Private companies and individuals have a ready market to sell their product. Chinese businessmen are readily available to buy what you can get from the forest,” explains Nguifor.

Most of the Chinese projects such as roads, dams, plantations and mines are found along the paths of virgin forests in Cameroon, and these forests are given out for exploitation by the government before work commences. However, in most cases this has resulted in illegality with firms exploiting beyond the limit of the project. The Independent Observer revealed in 2007 that more than 80% of wood exploited from these sites resulted from illegal procedures.

In other situations allocations of concessions have been in violation of the public auction system as recommended by the 1994 law on forestry management in Cameroon, which states that exploitation rights are given to the highest qualified bidder capable of making more returns for the government in the form of taxes. But in most cases, concessions are awarded to bidders with low technical ranking and low bids. Global Forest Watch (a global network of environmental NGOs of the World Resources Institute) in 2000 estimated that Cameroon loses about 4 million euros per year as a result of these corrupt practices.

A recent study by Greenpeace Cameroon highlighted how Herakles Farms, a multinational in Cameroon, used a front company called Uniprovince in order to export illegally collected timber to China. The company has been clearing off part of 70,000 hectares of forest land in the South Western part of Cameroon obtained through what many call a controversial presidential decree in 2009. Part of the land is in the Korup national park which is considered Africa’s oldest rain forest and a UNESCO world heritage site, rich in rare African great apes and plants.

Herakles Farms has cut more than 10,000 m3 of commercially valuable wood, most of whom was destined for the Chinese port of Zhangjiagang from the port of Douala.

A customs official at the Douala sea port disclosed that “most of the consignments to China are 81% raw materials which have not gone through any form of processing. They include timber logs, precious stones and other minerals”.

Equally, Brendan Schwartz of Greenpeace International says, “China is a quick and easy destination for illegal timber from Cameroon. There is a high amount of timber from these illegal sources at Douala seaport destined for China.”

The fact that Chinese assistance is not attached with strings of policy reform is considered to be detrimental to the Cameroonian population, because it undermines efforts to strengthen transparency, good governance and maintenance of social and environmental standards.

Paving the way

About 300km separates the Douala sea port from the main forest sites in the eastern and southern part of Cameroon where most of Cameroon’s timber is harvested. But just about 10% of this timber is sawn wood transported along the dilapidated and highly stretched roads that lead to the littoral port side of Douala. The rest are log wood which is largely responsible for Cameroon’s broken roads and highway accidents.

But with more funding from China, major transport infrastructure is being developed which will pave access to raw materials from Cameroon’s hinterlands and other countries of the sub region.

According to Cameroon’s growth and employment strategy document, this infrastructure will ease access to land resources and boost economic activities in the country, regionally and also internationally.

The Lop Pangar Dam in eastern Cameroon is one of the biggest footprints of Chinese passage in Cameroon

The Lop Pangar Dam in eastern Cameroon is one of the biggest footprints of Chinese passage in Cameroon.

On the southern coast of Cameroon in the gulf of Guinea, China Harbour Engineering Company (CHECH) has built and is now putting finishing touches to a new mega deepwater port that will be a big hub for most of the Central African nations’ export and import of heavy materials such as iron ore, aluminum, liquefied natural gas and timber. This port covers around 26,000 hectares of land.

Meanwhile, China First Highway Engineering Company Limited (CFHEC) is also building the new Yaounde-Douala highway for US$568 million, with 80% funding from the Export-Import Bank of China and 15% from the State of Cameroon.

China has funded most major infrastructure projects in the country, such as the deep sea port at Kribi ($567 million), Memve’ele dam in the south region ($483 million), the Yaounde-Douala highway ($568 million), the installation of optical fiber ($124 million), and the e-post project to connect post offices in the country ($56 million), and many other projects in the agriculture and health sector.

Mega infrastructure means jobs for locals

The Deepwater seaport financed by the Export-Import Bank of China is expected to make Cameroon a major economic hub for all of Central African states, especially the landlocked Chad and Central African Republic. But locals, particularly engineers, scientists and technicians, have not been benefiting much from this development.

The first phase of the port, which comprises of 25-metre deep harbor with the capacity to receive big vessels of close to 100,000 tones, currently employs 1,125 people, about half of them Cameroonians, mostly as menial laborers.

Chinese investments are believed to have created 12,000 jobs but Chinese-led projects in are notorious for importing most of the needed workforce and other resources needed in the projects from China.

Chinese investments are believed to have created 12,000 jobs but Chinese-led projects are notorious for importing most of the needed workforce and other required resources from China.

While many Cameroonians living around the Chinese-linked project complain of not being absorbed into these projects, those who managed to get jobs are working under very poor working conditions and taking unskilled responsibilities. At the mining sites of the Eastern region, a series of clashes between the local artisanal miners and Chinese employees working for a local mining firm has been recorded since 2013.

A police inspector working in the mining community of Betare Oya revealed that, “the locals have accused Chinese firms of using Chinese laborers instead of locals. This situation has been the reasons behind several attacks on Chinese workers and robbery on Chinese installations and lodges.”

The World Bank estimates that the country has an unemployment rate of 30%, many of whom are unemployed youth with either degrees or diplomas from higher education institutions.

Chinese-led projects in Cameroon are notorious for importing most of the needed workforce and other resources needed in the projects from China.

Michel Betongue, a 29-year-old man, has worked in two Chinese owned projects as a truck driver and thinks that the government is not doing enough to protect the interests of locals working in these projects. “If not for the fact that Chinese workers don’t master the roads around Cameroon, I couldn’t be given this job. In my company’s project site, I feel lost because Chinese workers do work that I thought foreigners would not do. They occupy unskilled positions that could be given to locals, and like myself who manage to work there are forced to work restlessly into the nights and even on Sundays.”

Betare Oya inhabitants like Peirre Ndongo, a mine worker says “some of these workers are prisoners from China sent to make money for their country.”

This is however a popular conception held by most people in this community. They don’t believe that people can leave China to come work under such conditions and in hostile and appalling environments of the forest.

According to Mthuli Ncube, chief economist and vice president of the African Development Bank (AfDB), the agreements between African nations and China have in effect created “a barrier to employment creation” as China imports its own labour.

Cameroonian employment law prescribes a policy where firms must hire at least 70% Cameroonians and at most 30% foreigners on any project. But these firms do not respect this recommendation, nor the desire for transfer of technology and skills to the local population.

However, Chinese engineers like Li Meng at the deep-water port construction, explains that Cameroonians lack the necessary professional training and that cultural differences make it more difficult them. “Firstly, we have language differences so we prefer to bring Chinese who can better understand us; secondly it is very difficult to find qualified workers in Cameroon,” Li says.

Although there may be some grumbling within the Cameroonian population about the Chinese invading Cameroon, this does not really constitute a political issue as yet. In fact, part of the jobless youth blame the Chinese for invading some areas where locals tried their small businesses before that invasion, because cheap goods from China sold in Chinese shops for instance have led to tough competition in the second hand market, particularly with regard to clothing and footwear.

China is building all kinds of infrastructure, including multipurpose stadia, across Cameroon.

China is building all kinds of infrastructure, including multipurpose stadia, across Cameroon.

China tightening grip and shaping ties with Cameroon

China is the biggest bilateral investor in Cameroon and is targeting important sectors such as infrastructure, energy, water, transport and telecommunications. China is supporting the country in the realisation of its vision to become an emerging country by 2035 and there have been discussions with the Cameroon ministry of finance about the Export-Import Bank of China establishing a base in Cameroon.

Cameroon will be hosting the African Cup of Nations soccer championship in 2019 and more infrastructure plans are in place. China is a key partner to accompany the country in the construction of stadia, sporting villages and roads.

While the new Chinese built deepwater port terminal has recently been given to a consortium of French and Chinese companies (Bollore/China Harbour Engineering Company CHECH) to jointly exploit, there are also discussions about financing a second container terminal at Kribi port which would span 700 meters, compared with 350 meters for the first one.

Trade between Cameroon and China has recorded a 900% increased since 2000, up from US$144 million to over US$2,211 million in 2014. While China continues to deepen investment in the country, a new law has been introduced in Cameroon that seeks to mutually protect and foster private investments between the two countries.

“The cooperation with China has become very important and we need to open up a level playing field not only for public investment but also to promote private sector investments, trade and any and all exchanges with China,” Pascal Hervé Essissima, Director of Regional Cooperation in the Ministry Economy, Planning and Regional Development (MINEPAT) said.

This law which was drafted as early as 1997 was sent to both countries’ parliaments that same year but only came into force in 2014 after being signed by the Cameroonian counterpart more than a decade after the Chinese parliament signed in 2000.

The law on mutual protection and promotion of investment between Cameroon and China opens up a business environment where the same investment law applies for Cameroonian and Chinese individuals and firms on both counties’ territories. Investment by any person of either nationality can benefit from the same protection, obligations, tax regime and investment opportunities as citizens of the other country.

This law obliges both countries to facilitate legal investment procedures and the delivery of work permits, while also making sure that both parties are treated fairly and without any form of discrimination in cases of expropriation, indemnification and capital transfer.

“This law will usher in a new momentum for private sector investment between the two countries and Cameroon might see a stream of Chinese investment in every sector in a near future,” Essissima revealed.

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