From 2005 to last year, Cambodia’s National Institute for Statistics reported about $338 million worth of exports in wood—including rough wood, fuel wood, wood chips, charcoal as well as articles of wood such as kitchenware—to the U.N. Commodity Trade Statistics Database (Comtrade).
During the same period, other countries reported importing almost $1.3 billion of the same goods, suggesting that almost three-quarters of the global trade value in Cambodian wood was not captured by the government’s figures. Vietnam accounted for over half of the import value, while China captured about a third.
“With a glance, I could see similar difference as you have mentioned,” said Commerce Ministry spokeswoman Soeng Sophary, adding that the trade differences were “beyond the control” of the ministry.
“The Ministry of Agriculture, Forestry and Fishery is in charge of granting authorization for this area of products, while the [Finance Ministry’s] general department of customs and excise deals with the physical flow of such products at the export/border gates,” she said.
“Effective control over this export flow would require mechanism and policy measures, which are not yet in place. And it requires assessment expertise, time and resources,” she said, referring further questions to the other ministries, where officials could not be reached.
Economists and the U.N. cautioned that significant differences in import and export numbers are a normal occurrence in world trade statistics and do not necessarily suggest foul play, although a larger difference makes it more likely.
This argument was reiterated by the Ministry of Mines and Energy last week after civil society organizations demanded an investigation into a more than $400 million difference in sand export figures, though the ministry still promised to investigate the numbers.
“Countries measure trade flows in different ways,” said Hal Hill, a professor of Southeast Asian economies at Australian National University, in an email on Friday. “Often the trade goes through third countries. And there’s a large amount of informal trade that doesn’t get measured at all.”
Mr. Hill cautioned observers to be “very careful” about inferences based on trade data “unless the differences are very large.”
Other countries register much smaller differences in wood exports over the same period. Vietnam recorded about 33 percent less in wood exports than the rest of the world reported receiving from it. Thailand’s gap was under 5 percent, while Sweden’s was just 0.2 percent, compared to the almost 74 percent difference in Cambodia.
Economists agree that import data is more likely to be reliable than export data because it is more likely to result in state revenue, and that benchmarking export data against import data from a third country whose statistics are trustworthy is a more reliable test.
“This is suggestive evidence that the gap is unusual,” Li Bingjing, an assistant professor at the National University of Singapore who specializes in international trade, said in an email on Tuesday. “But don’t make your conclusion too assertive.”
Marigold Norman, senior adviser at the U.S.-based NGO Forest Trends, said the group often saw large disparities in trade volumes using U.N. data. “It often is most pronounced when looking at trade value, as each country will have varying exchange rates to the dollar which dramatically impacts everyone’s reporting,” she wrote in an email on Tuesday.
Using a smaller subset of data that includes figures on volume to mitigate currency fluctuations, Ms. Norman found a 64 percent difference between Cambodia’s volume data and those submitted by the rest of the world over the past decade.
“While we really can’t say for sure and don’t have anyone on the ground, the bigger difference or underreporting on value seems to be an issue and could be for tax avoidance purposes,” she said, adding that making further determinations would require “considerable further research and investigation.”
Preap Kol, executive director of Transparency International Cambodia, said the difference “could be cause for grave concern” and called for such an investigation.
“The government must take immediate action to find out the reasons behind and explain [to] the public as soon as possible,” he wrote in an email. “Without acceptable and timely explanation, people will suspect that there might be some huge tax evasion or corruption involved in this trade amounting to significant loss of state revenues.”
It is not the first time that the Cambodian timber statistics haven’t added up.
In June, an analysis by London-based Environmental Investigation Agency (EIA) of a U.N.-managed database showed that Cambodia undercounted its endangered rosewood exports by almost a third, or roughly 4,000 cubic meters, compared to the imports from Cambodia reported by Vietnam and China from 2013 to 2014.
Cambodian authorities denied issuing a single permit for rosewood exports.
EIA senior forest campaigner Jago Wadley said he was “not surprised” by the U.N. Comtrade figures. “Where they are as large as this they are at least indications of some level of foul play by someone,” he wrote in an email.
Mr. Wadley cited a variety of possible reasons for the discrepancy: smuggling, differing state classification systems, underreporting by exporters, and paperwork fraud to offset re-export taxes or hide the sale of threatened species of wood.
“If the discrepancy is significantly greater by proportion for value than it is for volume/quantity then it might suggest that this is more about dodging taxes then it is about physically smuggling goods without registering trade with Cambodian customs,” he said.
Not all Cambodian exports register such large trade differences. U.N. Comtrade figures for both apparel and rice show a difference of about 14 percent between the global import and export value from 2011 to last year.
Countries across the world reported importing more than 75 million metric tons of Cambodian sand from 2005 to 2015, or roughly 46.8 million cubic meters. Cambodia’s Finance Ministry, on the other hand, measured 14.3 million tons leaving the country.
Both datasets agree that the vast majority of Cambodian sand goes to Singapore. And the numbers that the city-state reported to the U.N. suggests that Cambodia is hardly alone in underreporting to the country, with global sand exports to Singapore tallying just 4 percent of the sand that the country reported receiving.
The Ministry of Mines and Energy has responded to criticism on the sand trade gap by issuing a letter last week vowing to involve civil society in its investigation and saying that it had suspended all sand exports and the issuance of new sand mining licenses.
In an open letter to concerned NGOs posted to its Facebook page on Tuesday, the ministry invited groups to a Friday meeting to discuss the issue.
Alex Gonzalez-Davidson, the director of Mother Nature, an environmental NGO that has campaigned against what it says is illegal dredging, said the activity continued unabated.
“The Ministry is utterly unable to regulate the mining and export of sand, proven by the fact that 95% of shipments of sand to Singapore in the last 9 years have been illegally smuggled out of Cambodia,” he wrote in an online message.
“Therefore, I very much doubt that these so-called reforms will achieve anything other than cheap PR.”
Ministry spokesman Dith Tina did not respond to requests for comment.
paviour@cambodiadaily.com
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