Syndicate smuggles millions of dollars of RI wood

Moch. N. Kurniawan, The Jakarta Post, Jakarta

An illegal Malaysian logging syndicate has smuggled millions of dollars of endangered wood from Indonesia onto the international market, an investigation has revealed.

Non-governmental organization Telapak and the Environment Investigation Agency (EIA) said in their joint investigative report that ramin wood was smuggled from Sumatra to Pasir Gudang Port in Johor Baru, Malaysia, to be made into consumer goods like picture frames and cribs for export to Hong Kong and Shanghai before final distribution to Europe and the United States.

The report, Profiting from Plunder, was produced from a recent undercover investigation, which found that around 4,500 cubic meters of ramin wood was smuggled monthly from Sumatra to Johor Baru at a buying price of US$20 per cubic meter.

The smugglers could make huge profits, as they could sell processed ramin wood for $700 per cubic meter, the report says.

"This highly critical, but factual, report was not published to tarnish Malaysia's image, but to point out some real truths and ask Malaysia to face up to them as well. We all know Malaysia is capable of dealing with these issues if there is a genuine interest in doing so, but to date, this interest has only been self-serving.

"As Indonesia faces a critical juncture in its history, some traders and officials in Malaysia are fueling criminality and raiding Indonesia's forest resources like grave robbers at a funeral," Telapak director Hapsoro said during the report's presentation.

Indonesia banned in 2001 the sale of ramin, a blond tropical hardwood, and registered it under the United Nations Convention on International Trade in Endangered Species (CITES) to curb the illegal trade.

Malaysia is also a signatory of CITES, but has taken exception to the clause on ramin.

The investigation found that, during a single period last year, most of the illegal ramin found in Johor had come from the border area of Jambi and Riau provinces in Sumatra, where illegal logging of ramin has been rampant in the protected areas of Berbak National Park and the Kerumatan Wildlife Reserve.

The report said 90 percent of the ramin was smuggled, all of it stamped "CITES-free" and that an Indonesian port authority assisted in creating false paper trails, including the bills of loading, to disguise the origin of the wood.

It also said all the ramin passing through Pasir Gudang Port was purchased from one man in Sumatra, Jambi Lee, alias "Ramin King".

Jambi, touted as the No. 3-man in a Chinese-Indonesian organized crime ring, was a dollar millionaire by the age of 30 and owns mansions in Sumatra, Batam and Singapore.

Pasir Gudang Port, according to the report, belongs to a network of paper companies controlled by one of Malaysia's richest men, who is reportedly close to former prime minister Mahathir Muhammad.

The report said, the businessman was no stranger to controversial business, having recently purchased a controlling stake in the much-criticized Bakun dam project in Sarawak.

Like nearby Tanjung Pelapas Port, Pasir Gudang was designed with the single function of aiding the free movement of goods at the lowest possible cost and with an absolute minimum of interference from authorities, the report says, and that it also had Free Trade Zones where goods could be stored and transshipped outside of customs control.

The Malaysian Timber Industry Board (MTIB) has an office at Pasir Gudang, but it had clearly failed to stop the smuggling of thousands of tons of illicit ramin wood, which had been blatantly passing through the port for over a year, it said.