High stakes timber battle

Extracted from Associated Free Press, 18/04/00

The mahogany forest worth billions of US dollars in revenue has matured, attracting intense international bidding as Fiji negotiates a partnership to harvest and process the timber.

It has also become an intense political issue in Fiji prompting angry anti-government outbursts from several native landowners. Afraid that they are being left out of the multi-million dollar venture, the natives are threatening to stop the harvesting of trees unless they are included in the consultations.

Opposition parliamentarian and landowner Ratu Kinijioji Maivalili issued a blunt warning last month: "Do not invade our land and forest."

The forest planted 30 years ago is spread over several locations on the two main islands of Viti Levu and Vanua Levu and covers a total area of 33.5ha. The government is willing to allow 100,000cu m of the timber to be processed in the first 10 years and 175,000cu m over the next 20 years.

After protracted negotiations which began with the government of former prime minister Sitiveni Rabuka, the Commonwealth Development Corporation (CDC) has been identified as the potential partner out of seven international companies which had shown interest.

Only one other bidder, American consortium Trans Resource Management, was shortlisted but a government statement said the company proposed to raise all its funding from bonds which were to be issued overseas and was not prepared to put any money upfront. The Fijian government found such a proposal unacceptable.

CDC, on the other hand, is offering US$68mil (RM258mil) for logging rights to the mahogany, based on an evaluation by an international forestry valuation group, Fortech. This is apart from the revenue that would accrue from the processing and downstreaming of the timber.

The Fijian government has been accused of selling out the lucrative timber resource to CDC at an under-valued price.

But the government says all sorts of unsubstantiated figures are now being floated by people with vested interests and who have little or no capital to put into the venture. CDC, it says, has a proven track record as an international forester with assets worth US$4bil (over RM15bil). 

While CDC has been identified as the joint venture partner, an agreement has not been signed and negotiations are still continuing.

The mahogany plantations are located on leased native land and state land and the government has given an assurance that landowners will be consulted and their interests protected.--AFP

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