China demand for luxury furniture ‘decimating rosewood’

China demand for luxury furniture ‘decimating rosewood’

Monday, May 12, 2014 – 21:06

AFP

BANGKOK – Runaway Chinese demand for luxury furniture is spurring illegal logging across Southeast Asia, stripping the region of precious Siamese rosewood and driving a chain of cross-border corruption and violence, environmentalists said Monday.

Increasing wealth in China has seen a surge in sales of consumer status symbols such as reproductions of ornate high-end furniture from the Ming and Qing eras.

The demand for so-called “hongmu” furniture has seen stocks of Siamese rosewood decimated across the Mekong area – Vietnam, Cambodia, Laos, Myanmar and Thailand – according to a report by the Environmental Investigation Agency, an independent campaign group.

Forests have been denuded by rampant illegal logging by gangs keen for a cut of the lucrative Chinese market, which since 2000 has imported an estimated US$2.4 billion (S$3 billion) worth of precious timber from the Mekong area.

Rosewood can fetch thousands of dollars per cubic metre and loggers can earn hundreds of dollars for their efforts, many times greater than the average salary in the poor village areas they are drawn from.

“The soaring value of Siamese rosewood has spurred a dramatic rise in illegal logging in an international criminal trade increasingly characterised by obscene profits, violence, fatal shootings and widespread corruption at every level,” said EIA campaigner Faith Doherty.

“The consequences for Thailand – both environmental and social – are very serious. Unless swift and decisive action is taken to stem this bloody trade, we could well be looking at the extinction of Siamese rosewood in a matter of a very few years.” The EIA called for international rules to be tightened to ban international trade in Siamese rosewood logs, sawn timber and veneers.

Violence and corruption has proliferated along a criminal trail that spans several nations as loggers and agents exploit loopholes in local and international conservation laws meant to protect the rare species.

In Thailand’s forested eastern border area with Cambodia, villagers from across the frontier regularly clash with Thai security forces.

“When loggers are confronted by enforcement officers, violence often ensues,” said an EIA report entitled “Route of Extinction”, adding that since 2009 dozens of Thai forest rangers have been killed.

“The money on offer to impoverished rural communities from traders lures a stream of people willing to undertake potentially lethal work,” it said.

In March Cambodia accused Thai troops of killing 15 villagers in two clashes, after they illegally crossed the border to log valuable timber.

Thai forces allegedly shot dead at least 69 Cambodian loggers in 2013.

The EIA urged China to do more to regulate the industry and curb demand.

“China has made some attempts to counter the appalling excess of the illegal trade in Siamese rosewood, but they are clearly nowhere near enough,” said Doherty.

The report called on nations with remaining natural stocks of the trees to boost enforcement, crack down on official corruption which helps smugglers transport felled logs from forests, and ensure seized inventory is not repackaged and sold on into the legal market.

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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