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Laos’ forests still falling to ‘connected’ businesses

LONDON: More than a year after being exposed as major players in the smuggling of timber from Laos, a new report reveals the Vietnamese timber industry, the military and well-connected Lao actors are still profiting from the flow of logs into Vietnam.

As well as the role played by a commercial operation of the Vietnam People’s Army, the report details how Laos’ attempts to protect its forests are being corroded by the circumvention of Lao law by companies with key political contacts.

Checkpoints: How Powerful Interest Groups Continue to Undermine Forest Governance in Laos is released today by the London-based Environmental Investigation Agency (EIA).

Based on months of detailed investigations, its findings update the July 2011 EIA report Crossroads: The Illicit Timber Trade Between Laos and Vietnam which revealed how Laos’ export ban on raw timber was being routinely flouted on a huge scale to feed the timber processing industries of Vietnam, China and Thailand.

The earlier report revealed that one of the biggest loggers in Laos is a company owned by the Vietnamese military – the Vietnamese Company of Economic Cooperation (COECCO).

In March this year, the Government of Laos stated it would implement “serious action” to curb the export of its unprocessed natural resources, including timber, but EIA’s findings show it is business as usual along the country’s border with Vietnam.

Several powerful companies – Phonesack, Nicewood and COECCO – continue to ship thousands of cubic metres of logs from Laos to Vietnam, aided by murky exemptions to Laos’ log export ban and timber export controls which are apparently granted by senior players in the Lao Government.

As well as having a thriving furniture industry feeding markets in Europe, the US and China, Vietnam has also become the principle exporter to China of threatened and protected rosewood – and with no legal domestic rosewood sources in Vietnam, EIA believes most, if not all, of these exports are either illegal or involve illegality at some stage in the supply chain.

“Laos has instituted laws and policies which quite rightly seek to promote development within its borders and relieve the pressures on its forests,” said EIA Forests Campaigner Tom Johnson. “The circumvention of stated controls on timber exports completely subverts this agenda and only benefits a handful of wealthy and connected individuals.

“There’s no justification for the Government of Laos to continue chanelling resources into the hands of these individuals at the expense of its people. Equally, the Vietnamese Government, as a professed ‘special friend’ of Laos, must stop the unsustainable pillage of Laos’ forests by its industry – not least by its Army.”

The report also explores the inequitable deals struck between the Government of Laos and the business elite in Laos and Vietnam to finance infrastructure and plantation development.

Both Laos and Vietnam are currently engaged in discussions under the European Union’s Forest Law Enforcement, Governance and Trade (FLEGT) initiative, a core aspect of which is signing a Voluntary Partnership Agreement (VPA) which seeks to guarantee legal timber supplies from producer countries into EU markets – a requirement under the EU Timber Regulation which comes into effect in March 2013.

Faith Doherty, EIA Head of Forests Campaign, added: “It is essential that the current VPA negotiations between the Government of Vietnam and the European Union bring complete transparency and legal certainty to the log trade with Laos. As things stand, European buyers could not conduct credible due diligence on the legality of the cross-border trade from Laos to Vietnam.”

Among EIA’s recommendations in Checkpoints is for the Government of Laos to properly enforce its log export ban, for the Government of Vietnam to investigate the activities of the companies named in the report as well as the multi-million dollar rosewood trade, and for both governments to work with each other and EU to bring full transparency and traceability to the log and wood products trade.


Copies of the report and interviews are available on request: contact EIA Forests Campaigner Tom Johnson, at [email protected] or telephone 020 7354 7960.



1. The Environmental Investigation Agency (EIA) investigates and campaigns against environmental crime and abuses.

2. Read and download Checkpoints here.

3. Read and download EIA’s July 2011 report Crossroads here.


Environmental Investigation Agency
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Tel: +44 207 354 7960