TED Case Studies

Thailand Log Ban



          CASE NUMBER:          69 
          CASE MNEMONIC:      THAILOG
          CASE NAME:          Thailand's Logging Ban

A.        IDENTIFICATION

1.        The Issue

     On January 10, 1989 Thailand banned harvesting of timber in
the country following the worst flooding there in nearly a century. 
Thailand had long been a traditional exporter of raw logs and in
more recent years had begun to develop a competitive furniture
industry.  Despite the ban on harvesting, Thailand's furniture
industry has continued to climb in terms of total output and export
value.  The country now imports large amounts of raw teak and other
wood from Myanamar and Cambodia.  This trade is not documented nor
is it always even carried out with the permission of the
governments in Yangoon and Phnom Penh, respectively.  In fact,
these two countries are now experiencing some of the highest
deforestation rates in the world.

2.        Description

     Following disastrous floods in November, 1988, Thailand banned
logging in the country in January of 1989.  During the floods, 350
people died and there was $120 million in property losses.  Soil
erosion caused by deforestation exacerbated the floods, thereby
making the damage and loss of lives much worse.  Since a large part
of the logging was actually for the purpose of export, either in
raw or processed form, there was a large international component to
this decision (Thailand has a growing furniture export industry). 
Resourceful Thai businessmen began importing wood from their
unstable neighbors -- Myanamar and Cambodia.  

     When the Myanamar government faced international sanctions due
to its human rights policies, and was short on cash, it awarded 22
logging concessions to Thai firms, raising about $100 million. 
Myanamar used the hard currency to purchase weapons from China to
use in its domestic war against the Karen people.

     Many Thai investors also imported wood from Cambodia by
purchasing concessions from the Khmer Rouge, who controlled
forested tracts adjacent to the Thai border.  It was estimated that
the value of the concessions was worth $100 million to the Khmer
Rouge, again allowing them to purchase arms.  The Supreme National
Council of Cambodia and the United Nations, who ran the country
between 1991 and 1993, adopted a ban on the export of logs in
September, 1992, aimed at depriving the Khmer Rouge access to
funding.  However, Thai firms continued to import logs, in part due
to the lack of a real government in the country and sometimes with
the blessing of Phnom Penh, who also needed hard currency.  These
shipments usually went via Laos or the Gulf of Thailand.  About 7
million of Cambodia's 18 million hectare area remains forested.

     During the 1970s and 1980s, Thailand's forests were cut down
to meet growing foreign demand for tropical hardwoods and wood
furniture; teak was especially prized.  Most deforestation was the
result however of land use changes.  Between 1965 and 1989, Thai
forests and woodlands were reduced at an annual rate of 2.6
percent.  Over the same period, pasture lands and agricultural
plots expanded at 3.5 and 2.4 percent per annum, respectively, and
by 1989, Thailand was left with 28 percent forest coverage, 2
percent pasture land, and 43 agricultural land.  

     Following a massive international and national campaign to
stop forest clearing, coupled with the disastrous floods linked to
the forest loss, the government banned all logging of natural
forests.  The government quickly formulated a series of policies to
reforest the open tracts of land.  One policy chose a economically
profitable tree, eucalyptus, as the preference species for
reforestation.  The tree's pulp is used for paper production and
demand for paper pulp is expected to grow by 10 percent annually in
the near term.  The implementation of reforestation policies,
designed to turn commonly held land into Eucalyptus plantations,
resulted in the enclosure of these lands, the disruption of
tradition land management techniques, the transfer of land
ownership to large corporations, and uprooting millions rural
farmers and their families.

     Because of the reforestation program, many local people will
be displaced and forced to resettle in the few virgin forests that
remain.  One study suggests that a 2000-km2 eucalyptus plantation
proposed by Shell could potentially affect 300,000 families.  
These areas are already densely populated by people already
displaced: some 10 million Thais live in degraded forest areas and
only 15 percent of the original forests remain.  

     The first stage of the project focused on reforestation of
Thailand's impoverished northeast, part of the "Golden Triangle"
for heroin production.  The project forced approximately 1.25
million people from 1.5 million hectares to resettle over a five-
year period beginning in 1991.  These lands were to be converted to
eucalyptus plantations.  In essence, the plan simply transferred
ownership of the land from subsistence farmers and their families
to large agribusiness concerns.

3.        Related Cases

     USWOOD case
     MALAY case
     INDONES case
     TEAK case
     VIETWOOD case
     CHIPKO case


     Keyword Clusters         

     (1): Trade Product            = WOOD
     (2): Bio-geography            = TROPical
     (3): Environmental Problem    = DEFORestation

4.        Draft Authors:  Paul Macek and Kalaya Chareonying

B.        LEGAL Clusters

5.        Discourse and Status:  AGReement and COMPlete

     The Royal Forestry Department has jurisdiction over the public
lands, especially the numerous protected areas and environmental
sanctuaries.  By tradition the people have lived within these
forested zones for decades and millennia in some cases, claiming
them as ancestral lands.  Another factor complicating the legal
context is the presence of huge speculative markets for real estate
that have emerged as a by-product of industrialization.  A sort of
"wild west" mentality is emerging in the northern part of Thailand,
where speculators convince farmers to sell lands that may or may
not belong to them in the first place (see THAIBIRD case).  There
have been reports of some lands being sold three times in a day.

6.        Forum and Scope:  THAIland and UNILATeral

     The decision is similar to other logging bans.  The related
Indonesian ban on raw log exports, stemmed from Indonesia's ban on
the export of raw materials used in making pencils.  Brazil also
bans the export of raw logs but is a large producer of semi-
processed wood and wood-products (see BRAZIL, INDONES, and MALAY
cases).

7.        Decision Breadth:  1 (THAIland)

8.        Legal Standing:  LAW

III.      GEOGRAPHIC Clusters

9.        Geographic Locations

     a.   Geographic Domain : ASIA
     b.   Geographic Site   : Eastern Asia [EASIA]
     c.   Geographic Impact : THAIland

     The domain corresponds to the tropical forests on the mainland
of Asia, bordered on the north by China and the west by India. 
This forest is clearly different, in terms of its dominant species,
from those in Indonesia, Malaysia and the Philippines.  (The latter
are dominated by the family of trees known as Dipterocarpaceae). 
The site of the actual conflict is in Cambodia and Myanamar, where
they have replaced Thailand as the source of the raw log inputs for
Thai furniture exports.

10.       Sub-National Factors:  No.

     Part of the deforestation problem is a domestic problem to
Thailand.  These factors include fuel wood gathering, traditional
shifting agriculture, government resettlement programs, and
development projects.  More recently, plantations aimed at cash
crops have led to widespread deforestation to grow casssava,
intended for export to Europe as a feed for cattle, pigs and
poultry.

11.       Type of Habitat:  TROPical

IV.       TRADE Clusters

12.       Type of Measure:  Regulatory Ban [REGBAN]

13.       Direct vs. Indirect Impacts:  INDirect

     The impact on trade is not "at the border" since the actual
ban on cutting is an "inside-the-border" issue.  There are statutes
that do not allow the export of raw logs, but these laws are
predicated by the ban on harvesting.

14.       Relation of Measure to Environmental Impact

     a.   Directly Related    : YES  WOOD 
     b.   Indirectly Related  : YES  WOOD products 
     c.   Not Related         : NO
     d.   Process Related     : YES  DEFORestation 

15.       Trade Product Identification:  WOOD

     Thailand's export of raw roundwood logs was about $10.4
million in 1977 and has been in decline ever since.  In 1988 this
had fallen to just over $2 million prior to the ban on exports. 
Meanwhile, Thailand's imports of raw logs has climbed from $4
million in 1977 to over $80 million in 1988.

     Thailand's furniture industry had grown largely due to the
teak and rosewood stands that provided cheap raw inputs into making
the product.  As of 1987, the major furniture export markets for
Thailand were the United States, Japan, and France, accounting for
about 60 percent of the total.  Exports to the United States jumped
by 177 percent over 1987/1988, up to $68 million.  Singapore and
Hong Kong were major re-export sites of Thai furniture products.

     One offshoot of the reforestation program was the
establishment of large-scale eucalyptus plantations.  The wood
chips and paper pulp would be exported by transnational
corporations such as Shell and Esso to Taiwan and Japan to earn
hard currency.  The policy has been supported by the Thai Board of
Investment, the Thai Royal  Forestry Department, the U.N. Food and
Agriculture Organization (FAO), and the World Bank.  In addition,
numerous local and foreign businesses, such as Japan's Oji Paper
and Phoenix Pulp and Paper among others, will profit from publicly
subsidized purchase of land and the establishment of commercial
eucalyptus plantations. 

16.       Economic Data

     In order to meet domestic demand, Thailand currently imports
$100 million worth of pulp every year, just to make paper for
export.  Furthermore, paper may be used as an input to other
products like books and newspapers.  In recent years, paper prices
have been rising.  Yet, the establishment of these plantations
would reduce biological diversity, contribute to deforestation and
depletion of the water level, and uproot and destroy rural
communities.  Employment in agriculture accounts for 63.8 percent
of the total economically active population.

17.       Impact of Measure on Trade Competitiveness:  BAN

18.       Industry Sector: WOOD

19.       Exporter and Importer:  THAIland and MANY

     Thailand's wood exports in the past had gone largely to Japan.

V.        ENVIRONMENT Clusters

20.       Environmental Problem Type:  DEFORestation

21.       Name, Type and Diversity of Species

     Name:          Eucalyptus Camludlensis
     Type:          Plant/Angiospermae/Dicot
     Diversity:     3,442 higher plants per 10,000 km/sq
                         (Thailand)

     The forests of this area are not as diverse or have as high a
degree of endemism as New World tropical rain forests.  No specific
estimate of species diversity values are available, but bio-
diversity for seed plant species in peninsular India is perhaps
comparable. 

22.       Resource Impact and Effect:  HIGH and SCALE

23.       Urgency and Lifetime:  MEDium and 100s of years

     Thailand's ban was quick in coming and done only after the
problem had revealed itself.

24.       Substitutes:  LIKE

     Possible alternatives include bamboo and acacia, both of 
which are indigenous to Thailand unlike eucalyptus.  Recycling of
wood products has been suggested, as well as more efficient and
less destructive means of cutting trees.

VI.       OTHER Factors

25.       Culture:  YES

     Culture is increasingly a point of conflict in Thailand.  As
Pra Prajak stated, the forests are viewed in Buddhism as an
essential element of the world and of Thai spiritual life.  "We
don't try to protest all development," explained the Buddhist Abbot
Pra Prajak, "but everything needs to be developed in a good way --
development growth with morality.  They can balance each other. 
You only destroy yourself when you destroy the mountains, the
forests, and the streams.  Do you understand?".  The Thai
government has been under pressure by the activism of Buddhist
monks on the issue.  Buddhism, the almost universal religion in
Thailand, is sacred and monks have a certain amount of freedom from
persecution.  Pra Prajak has been arrested but the courts have
consistently ruled in his favor. 

26.       Trans-Boundary Issues:  YES

     Thailand's ban has increased deforestation in the neighboring
countries of Burma and Kampuchea.

27.       Rights:  YES

     One rights problem is that this act was assisting Myanamar in
evading sanctions that various countries had placed on it as a
result of the regime's non-democratic tendencies.  But it was most
often the case that the actual sellers of the Burmese wood (much of
it teak) were actually the various ethnic groups (such as the
Karen) that live in the remote highlands of Myanamar and are
fighting the government.  In turn for selling wood, these groups
then had funding to buy more military equipment.  Thailand's ban
then set into motion a string of events: Myanamar's forests are now
being cut much more rapidly and the power of the government in
Rangoon vis-a-vis the differing parts of the country is weaker.

     Villagers threatened with the loss of land and livelihood
organized to protest the natural resource policy.  Under the
leadership of Pra Prajak Kuta, a local Buddhist monk, the villagers
successfully staged a number of standoffs with local authorities
and eucalyptus corporations.  Pra Prajak was arrested on several
occasions, but local resistance prompted the government to
reconsider its reforestation programs. 

     Pra Prajak exemplifies this new breed of religious leaders who
actively challenge the RTG's development strategy.  Together with
other monks, he has been instrumental in organizing resistance
among poor villagers.  He has also staged symbolic acts of
resistance by ordaining the souls of trees.  To cut the tree would
be equivalent to the greatest sin in Buddhism -- killing a monk. 
As Pra Prajak explained, "I became a monk so I could study the
dama, Buddha's teachings, teachings about nature.  Our well-being
depends on the four elements -- earth, water, wind, and fire. 
Neither humans nor animals can survive without these resources. 
That's why it's my duty to protect the forests."  The politically
charged battle has resulted in angry villagers cutting down
eucalyptus trees and other acts of defiance.

28.       Relevant Literature

"Forestry in Thailand: The Logging Ban and Its 
     Consequences." Ecologist 19/2 (1989): 76-77.
"Who Defends Biological Diversity? Conservation 
     Strategies and the Case of Thailand." Ecologist 21/1
     (1991): 5-11.
Faichampa, Ketty.  Program Officer for Southeast Asia, World 
     Wildlife Fund, interview with Paul Macek on November 18,
     1993.
FAO Yearbook 1988: Forest Products.  Rome: FAO/United Nations, 
     1990.
FAO, World Bank, World Resources Institute, and United Nations 
     Development Programme.  The Tropical Forestry Action
     Plan.  FAO, Rome, 1987.
Feeny, David.  The Political Economy of Productivity: Thai 
     Agricultural Development, 1880-1975 .  Vancouver:
     University of British Columbia, 1982.
"Forestry in Thailand: The Logging Ban and its Consequences." 
     Ecologist 19 (1989).
Jacobson, Jodi.  Environmental Refugees: A Yardstick of 
     Habitability.  Washington, D.C.: World Watch Institute,
     World Watch Paper #198.
Kelley, Sean.  Country Desk Officer, U.S. Department of Commerce,
     Paul Macek interview on November 12, 1993.
Lohmann, Larry.  "Commercial Tree Plantations in Thailand: 
     Deforestation by Any Other Name."  Ecologist 20/1
     (January/February, 1990): 9-17.
McDonald, Hamish.  "Partners in Plunder.  Thailand's Timber
     Shortage Gives Rangoon its Opening".  Far Eastern
     Economic Review 147 (February 22, 1990): 16-22.
Mardon, Mark.  "Maneuvers in the Teak Wars."  Sierra 76
     (May/June,91): 91+.
Robert Repetto and Malcolm Gillis.  Public Policies and the
     Misuse of Forest Resources.  Cambridge: Cambridge
     University Press, 1988.
Rich, Bruce.  Mortgaging the Earth: The World Bank, Environmental
     Impoverishment, and the Crisis of Development *** need
     full cite.
Royal Thai Government.  Thai Environmental Situation, Thailand 
     National Report to UNED.  Bangkok, Thailand: 1992.
Smith, P.M. and Ma, H.O.  The Global Wooden Furniture Industry:
     An Emphasis on the Pacific Rim.  Seattle: Center for
     International Trade in Forest Products, 1990.
Thailand.  Video recording produced by the Maryland Public 
     Television, NHK (Japan), Film Australia and InCA (UK). 
     One of three part series "Mini Dragons II".
Tuntawiroon, Nart.  "The Environmental Impact of
     Industrialization in Thailand."  Ecologist 15/4 (1985):
     161-164.
"For a Better World Environment."  World Monitor (May, 1993:
     63).
World Resources Institute in collaboration with UNEP and UNDP. 
     World Resources 1992-92.  New York: Oxford University
     Press, 1992.
Wuliger, Robert.  "A World Economy: Paradigms Lost and Found; An
     Analysis of the International Economic Order",  Challenge
     35/1 (January 1992): 4. 

                           References




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