Cambodian logging syndicate tied to main U.S. wooden flooring provide chains

That is the second a part of a Mongabay sequence investigating Cambodia’s illicit timber commerce. Learn Half One.

A number of Cambodian journalists helped to report this investigation, however have requested to not be named as a result of delicate nature of the story.

SIHANOUKVILLE, Cambodia — On a rain-sodden day in September 2023, reporters entered the Sihanoukville Particular Financial Zone on the southwest coast of Cambodia, within the nation’s largest port metropolis. Established in 2008 by a partnership between Chinese language and Cambodian non-public corporations, the Sihanoukville SEZ hosts a spread of Cambodian and Chinese language ventures exporting merchandise worldwide.

Amongst them is Nature Flooring (Cambodia), a Chinese language-owned firm established within the Sihanoukville SEZ in Could 2019. Nature Flooring is simply one of many many subsidiaries of China’s Nature Residence Group, targeted on wooden floors and doorways. The agency’s web site states that the group is valued at 87.6 billion yuan (about $12 billion) and boasts a number of partnerships with U.S. corporations.

Over the course of a 12 months, Mongabay has collected proof that implies a lot of the plywood used to craft the merchandise offered by Nature Flooring and different corporations inside the Sihanoukville SEZ could have been illegally logged from protected Cambodian rainforests.

The investigation discovered that U.S. customers danger furnishing their houses with flooring merchandise comprised of wooden logged illegally from the Cambodian rainforest whereas believing the merchandise to be sustainably sourced.

Cambodia’s forests have been devastated by logging operations which have undermined conservation efforts nationwide and exacerbated dangers in a rustic already susceptible to the worldwide local weather disaster.

Mongabay’s investigation started inside a small workplace in one of many 4 factories that Nature Flooring had bought within the Sihanoukville SEZ. Right here, reporters met with Jin Tian Liao, a translator for Nature Flooring’s administration.

He defined that in 2019 the corporate acquired two plywood factories within the SEZ — ProWood (Cambodia) Flooring and Woodin Wooden (previously Paladin Lake) — to make engineered hardwood flooring merchandise.

“Woodin produce the wooden floors, which incorporates the plywood, it’s all engineered hardwood flooring,” he mentioned. “It’s this type of flooring you’ll discover in homes throughout the U.S.”

In line with one Cambodian timber business insider, anybody shopping for picket merchandise by Nature Flooring in Cambodia has seemingly acquired contaminated merchandise, however minimal testing is completed on flooring to find out the species or origin of the wooden.

“They themselves don’t know what it’s that they’re promoting,” the insider mentioned, talking anonymously on account of their ongoing enterprise operations in Cambodia. “But when the purchasers within the U.S. who truly desire a inexperienced residence powered by inexperienced vitality understand they’re truly strolling on a jungle that they helped to chop down, individuals will get upset.”

Nature Flooring Cambodia’s manufacturing facility ground was abuzz with employees sorting plywood sheets that type the core layer of the corporate’s engineered wooden floors merchandise.

Skinny veneers of oak and hickory, largely sourced from Vietnam and China, make up the seen floor of the merchandise, however in accordance with Jin, the plywood cores are sourced from a single firm: Angkor Plywood.

From Cambodian jungles to U.S. floorboards

Angkor Plywood is a Cambodian firm on the helm of a infamous logging syndicate that has been labeled “an existential risk” to the nation’s forests.

Jin confirmed Mongabay a contract between Nature Flooring and Angkor Plywood, however wouldn’t disclose how a lot the contract was price.

“We purchase from Angkor Plywood in Kandal province, the corporate offers eucalyptus and acacia, they’ve their very own plantation in Kandal province,” he mentioned. “They develop it, we purchase it, we produce flooring and promote that to the U.S.”

Jin conceded that Nature Flooring workers had by no means truly visited Angkor Plywood’s plantation in Kandal province.

However doing so would have been unimaginable: Angkor Plywood doesn’t have a plantation in Kandal, solely a manufacturing facility the place timber is delivered from varied sources after which offered on, typically for export.

Established in 2011, Angkor Plywood is headed by Chea Pov, a former logger who labored his manner up by the ranks of Pheapimex, a Cambodian conglomerate owned by Choeung Sopheap, herself a robust determine related to timber trafficking and one of many homeowners of the Sihanoukville SEZ.

Pov’s enterprise accomplice in Angkor Plywood, Lu Chu Chang, is a Taiwanese nationwide who’s been concerned in logging in Cambodia for the reason that ’90s by his former firm Cherndar Plywood, which at its top managed huge swaths of Cambodian forests and illegally focused resin bushes. Chang additionally heads Suppose Biotech, an organization that, on paper, is creating a 34,000-hectare (84,000-acre) “sustainable” timber plantation on the border of Prey Lang Wildlife Sanctuary in Kratie province. In December 2023, Suppose Biotech rebranded, formally altering its identify to Holy Plantation in accordance with Cambodian commerce data.

It’s this plantation from which Jin presumed Nature Flooring was buying acacia and eucalyptus. However in 2023, Mongabay added to the substantial physique of proof that implies Holy Plantation (previously Suppose Biotech) depends extra closely on the logging and laundering of pure forest in neighboring Prey Lang than it does processing plantation-grown timber.

At 489,662 hectares (1.2 million acres), Prey Lang Wildlife Sanctuary is certainly one of Cambodia’s largest protected areas and is wealthy in each pure assets and biodiversity. As soon as thought-about the biggest lowland rainforest in mainland Southeast Asia, Prey Lang has been badly degraded over the past decade, and regardless of its protected standing, the sanctuary is now besieged by loggers and mining corporations.

It’s additionally the place the allegations towards Holy Plantation (previously Suppose Biotech) and Angkor Plywood stem from.

The central location and comparatively flat topography of Prey Lang has put its forests and the Indigenous communities who rely upon it within the crosshairs of economic gold miners, iron ore miners and loggers — the latter of which have been persistently tied to Suppose Biotech (now Holy Plantation). Between 2001 and 2023, Prey Lang misplaced some 102,000 hectares (252,000 acres) of tree cowl — roughly 64,500 hectares (159,400 acres) of which was major forest — with International Forest Watch knowledge exhibiting a spike in major forest loss since Chang took over Suppose Biotech in December 2018.

Within the years that adopted, Suppose Biotech has been repeatedly accused of illegally logging Prey Lang’s protected forests, laundering the timber and promoting it to sister firm Angkor Plywood as plantation-grown wooden, particularly acacia and eucalyptus.

“We solely know what we see after they ship the deliveries, we’ve not seen the place,” Jin mentioned, including that, on the time, Nature Flooring didn’t have traceability procedures to ensure the origins of the wooden bought.

This seems to be a recurring subject for the corporate. In August 2017, Nature Flooring Inc., the U.S. subsidiary of Nature Residence group, was compelled to halt imports of illegally harvested taun (Pometia pinnata) wooden from Papua New Guinea and the Solomon Islands after investigations by environmental watchdog International Witness discovered that a lot of the timber bought by Nature Flooring Inc. and different U.S. wooden floors corporations had been harvested illegally.

Flaunting “inexperienced” credentials on its web site, Nature Residence claims to take part in company environmental and sustainability applications run by WWF and the Forest Stewardship Council (FSC). Till as lately as 2018 it was a member of WWF’s International Forest & Commerce Community (GFTN), a program geared toward encouraging non-public sector actors dealing in forest merchandise to take action responsibly, however one which has confronted vital criticism.

WWF confirmed that its GFTN program had ended and that Nature Residence was not a part of its successor program, Forests Ahead, with a WWF consultant saying in an e mail to Mongabay that “WWF doesn’t have any lively partnership agreements with Nature Residence Co. or its subsidiaries.”

The FSC certifies picket merchandise as environmentally sustainable, however certificates for each Nature Residence’s U.S. subsidiary and Cambodian subsidiary had been terminated in 2023. No motive for the termination was supplied by the FSC, however neither subsidiary was listed as having an FSC-certified due diligence system in place.

“We may have a coverage and process for inside traceability as everyone knows this drawback is turning into increasingly more severe and requires a response,” Jin mentioned. “We’ve already seen that some prospects within the U.S. are asking for these paperwork, not all of them, however a few of them need it.”

‘An existential risk to Prey Lang Wildlife Sanctuary’

However the lack of transparency or traceability is a function, not a bug, in accordance with the timber business insider who requested anonymity as a result of nature of their work in Cambodia.

Over quite a few interviews in late 2023 and 2024, the insider advised Mongabay that “It’s positively not acacia that’s being despatched [by Angkor Plywood] — it’s jungle wooden on the core of it.”

The business insider, who demonstrated a deep understanding of the Cambodian timber business, mentioned Angkor Plywood is greater than able to bribery, obfuscating provide chains, and mislabeling wooden merchandise as legally logged species by their political connections, including that these are widespread ways for buying and selling illicit merchandise.

“All people is aware of. Angkor Plywood’s story is understood by each toddler in Cambodia that offers with wooden, in order that they know precisely what they’re doing they usually’re mainly defrauding the U.S. they usually’re hurting the Cambodian individuals,” the insider mentioned.

There are minimal checks on the core of flooring merchandise manufactured by corporations within the Sihanoukville SEZ, they added, whereas Angkor Plywood was greater than able to mislabeling its plywood merchandise as acacia or eucalyptus. The business insider additionally alleged that Angkor Plywood was paying bribes to retain sole rights to ship timber and plywood into the SEZ’s factories and that customs officers had been paid to not doc vans delivering its merchandise to the SEZ, often at night time.

Chea Vuthy, a senior official on the Council for the Growth of Cambodia, an govt authorities company, who’s answerable for the administration of SEZs and international investments on this position, advised Mongabay that worldwide patrons sourcing wooden merchandise from the Sihanoukville SEZ will solely settle for merchandise comprised of farmed wooden.

“All wooden corporations situated inside [the] SEZ in [Sihanoukville] produce furnishings and engineered flooring for U.S. and EU markets. The merchandise have to be produced from farmed wooden solely. They don’t settle for in any respect any firm utilizing our pure wooden from pure forest as a [raw material] for his or her merchandise,” he mentioned.

Vuthy additionally occurs to be the brother of Angkor Plywood chairman Chea Pov. Vuthy wouldn’t reply questions in regards to the firm, its position in unlawful deforestation, the allegations that Angkor Plywood was the one firm licensed to promote timber and plywood into the SEZ, or how the potential for contaminated merchandise offered overseas might impression Cambodia’s commerce relations or the allegations it faces.

Vuthy beforehand referred to as for extra funding within the timber sector to gas furnishings exports, with out disclosing that his brother runs certainly one of Cambodia’s largest timber-processing corporations.

Veteran forest activist Marcus Hardtke, who has greater than 20 years of expertise working in Cambodia’s forests, mentioned Angkor Plywood has risen from being a just about unknown entity within the ’90s to turning into “probably the most highly effective timber cartel within the nation.”

“Satellite tv for pc photos present it, each villager is aware of it, each official is aware of it, however it continues as a result of everybody is aware of who’s behind that firm,” he mentioned.

Hardtke mentioned Angkor Plywood primarily targets tall Dipterocarp species with column-like trunks which can be straightforward to course of into plywood. These species “are the bread and butter” of Angkor Plywood, he added.

These allegations have lengthy been supported by the USA Company for Worldwide Growth (USAID), which has documented abuses dedicated by Suppose Biotech (now Holy Plantation) and Angkor Plywood by its conservation venture in Prey Lang Wildlife Sanctuary.

An unpublished 2021 report produced by Tetra Tech for USAID, obtained by Mongabay by a freedom of data request, dubbed Angkor Plywood “an existential risk to Prey Lang Wildlife Sanctuary.”

The report detailed “a community of forestry crime that leads again to” Angkor Plywood, with “substantial proof of unlawful logging and timber laundering” by Suppose Biotech, in addition to corruption amongst provincial authorities.

It paperwork quite a few situations between 2018 and 2021 tying Suppose Biotech and Angkor Plywood to unlawful logging in Prey Lang, together with the systematic concentrating on of resin bushes which have been tapped sustainably for many years by the Indigenous Kuy group.

The Kuy individuals can’t legally personal the resin bushes, that are Dipterocarp species and embrace Dipterocarpus alatus, Dipterocarpus costatus and Shorea guiso — all of that are categorized as threatened species with declining populations on the IUCN Crimson Listing. As an alternative, communities have the suitable to faucet the resin, however to not promote or fell the bushes.

Regardless of this, accounts have been documented of communities, beneath intense financial stress, collaborating with Suppose Biotech to unload resin bushes.

AHF and the silent subsidiary

Angkor Plywood’s Pov declined to be interviewed when Mongabay reached out in June 2023, leaving the duty to his enterprise accomplice Chang, the Taiwanese nationwide who additionally heads Suppose Biotech. Throughout this interview, Chang rejected allegations of illegally slicing a logging route straight from Suppose Biotech’s concession into the Stung Treng province part of Prey Lang.

Chang and his enterprise associates subsequently stopped replying to questions despatched by Mongabay.

Throughout an unaired section of the June 2023 interview, writing in a reporter’s notepad, Chang gave the Chinese language names of two corporations within the Sihanoukville SEZ that Angkor Plywood provides with plywood: 飛羽公司 and 大自然公司.

The primary firm that Chang claimed to promote to within the SEZ, which interprets to Flying Feather, was recognized as Flying Feather (Cambodia) Wooden-Business, which started operations within the Sihanoukville SEZ in October 2020.

When reporters visited Flying Feather, firm director Yang Jianxiong mentioned she had met with Chang in 2021 however deemed the plywood he supplied to be low high quality, too costly, and denied having ever purchased from Chang.

“We all know this man,” Yang’s assistant advised Mongabay, however declined to elaborate on the connection.

The second firm was recognized as Nature Flooring (Cambodia), whose workers not solely confirmed that Angkor Plywood was its sole supply of plywood in Cambodia, but in addition detailed how its merchandise had been reaching U.S. customers by gross sales to different corporations inside the Sihanoukville SEZ.

Jin, Nature Flooring’s translator, advised Mongabay that plywood bought from Angkor Plywood is then offered on to High quality Flooring, which additionally runs a flooring manufacturing facility within the SEZ and is an entirely owned subsidiary of AHF Merchandise, headquartered in Mountville, Pennsylvania, and which claims to be the biggest U.S. wooden flooring producer.

“We promote to High quality Flooring they usually end the merchandise, then they take orders from AHF,” mentioned Jin from Nature Flooring. “They [AHF Products] purchase each the [Stone Polymer Composite flooring] and the ultimate [engineered hardwood] flooring product from High quality Flooring.”

Export data from Panjiva, a world commerce transparency monitor, present that AHF is certainly one of Nature Flooring’s largest prospects. However because the business insider famous, monitoring the gross sales of plywood from Angkor Plywood to Nature Flooring to different factories inside the SEZ, akin to High quality Flooring, is difficult as a result of home gross sales don’t seem in commerce knowledge.

Devin Barta, director of High quality Flooring and former president of the American Chamber of Commerce in Cambodia, didn’t reply to a number of requests for remark. Reporters had been denied entry when arriving on the firm’s manufacturing facility within the Sihanoukville SEZ to request an interview.

AHF claims to have some 150 years of expertise within the enterprise, eight services throughout the U.S. and one in Cambodia. The corporate was acquired in 2018 by American Industrial Companions, a New York-based non-public fairness agency, after which offered once more to Paceline Fairness Companions, one other non-public fairness agency from Texas in 2022.

In 2023, Paceline Fairness Companions grew to become a signatory to the U.N.-supported Ideas for Accountable Funding, a dedication to advertise environmentally and socially accountable governance, which seems to be at odds with the obvious inclusion of Angkor Plywood in AHF’s provide chain.

“AHF doesn’t use any illegally harvested wooden merchandise,” AHF wrote in an emailed response to Mongabay’s questions in March 2024. “We solely use wooden veneers comprised of plantation-harvested eucalyptus and acacia in Cambodia and never from the sanctuaries referenced. We have now a rigorous provider vetting and compliance program to confirm all wooden merchandise are legally sourced. Any inferences on the contrary are merely not true.”

The corporate didn’t reply to questions relating to the sourcing of plywood from Angkor Plywood.

AHF claimed it “do[es] not know of any flooring producers who would use illegally harvested veneers within the SEZ, nor are we conscious of any protected species within the area used to fabricate flooring,” including that “species aside from eucalyptus and acacia wouldn’t work within the extremely engineered means of wooden flooring manufacturing and would trigger these processes to fail.”

AHF, whose executives have beforehand described transparency as their “secret sauce,” wouldn’t affirm or deny whether or not Angkor Plywood was straight or not directly supplying plywood or different wooden merchandise to AHF.

When despatched follow-up questions by Mongabay, AHF mentioned it had “nothing so as to add and no extra follow-up presently.”

The corporate additionally declined to reply questions relating to its vetting and compliance program, why its manufacturing course of would fail utilizing different species, or the way it didn’t find out about Angkor Plywood’s fame for unlawful logging.

Hardtke, the forest activist, expressed disbelief that corporations like Nature Flooring, High quality Flooring or AHF wouldn’t find out about Angkor Plywood’s fame or the allegations of the corporate’s involvement within the logging of protected forests.

“I believe that’s just about unimaginable,” Hardtke mentioned. “If that’s the case, they’d be the one individuals within the Cambodian forest sector who will not be conscious of Angkor Plywood’s fame.”

Angkor Plywood and Suppose Biotech had been cited as a case research in a 2021 Forest Traits report warning that plywood and flooring had been the 2 riskiest wooden merchandise corporations might buy from Cambodia.

However in accordance with Hardtke, Cambodian corporations incessantly conceal the origins of their picket merchandise and U.S. corporations hardly ever conduct thorough due diligence; doing so, he mentioned, would make doing enterprise in Cambodia virtually unimaginable for international buyers.

“Angkor Plywood is sourcing timber from pure forest, that means largely from protected areas,” he mentioned. “Tree plantations are nonetheless very small companies in Cambodia, other than rubber bushes. They put no matter on transport, tax permits, export permits — getting handy paperwork is a well-oiled enterprise.”

Banner picture: A employee dealing with plywood sheets at Nature Flooring’s manufacturing facility within the Sihanoukville Particular Financial Zone. Picture by Gerald Flynn / Mongabay.