AN OVERVIEW OF ASIAN COMPANIES: INTRODUCTION
The country and region overviews presented in this document give only a brief summary of some of the key developments affecting some countries which are experiencing an influx of foreign direct investment, particularly from Asia, into the forestry sector. The aim has been to give the Parliamentary Commission a cross section of experience across a broad geographical spread and the report is not intended to be comprehensive in its coverage of either countries or companies.
A section on Malaysia, and in particular the state of Sarawak, has been included in the beginning of this document to give some background to the significant Malaysian companies, their reasons for expanding operations overseas and their close political and familiar connection to governmental officials. Malaysia is not the only country which is home to the new expansionists, but it is one of the key players. This report do not include a section on Brazil, as this will be tackled in a later report.
For most of the countries mentioned, direct foreign investment in the forestry sector on such a scale is a new phenomenon and its effects are yet to be fully felt. The trend so far however is that the search for new supplies of tropical timber by Asian companies seems to be in countries which do not have the institutional capacity to deal with such increased activity and seems inevitably to lead to unsustainable levels of exploitation; "uncontrolled investment is no help for the tropical wood producing countries if they hope to retain in perpetuity the product benefits from their forests" (Tropical Timbers, June 1996a)
Whilst each of the countries featured has unique characteristics, and direct foreign investment is
therefore affecting them in different ways, there are key issues which are common to all of them and
these have been identified in the conclusion. Recommendations on how to tackle some of the most
pressing problems are also included:
ASIAN INFLUX IN LATIN AMERICA The Asian forestry companies influx in Latin America started some years ago and it is clear that they
have great interest in expanding their investment and operations in Latin America. Apart from having
huge wooded areas, lower levels of forest devastation and being extremely rich in biodiversity, the
attraction to Latin America is also due to the serious deficiencies in fiscal and environmental control
and the economic and legal incentives for the logging industry in some countries and states.