Myanmar's Pending Ceasefire Jeopardized by Skirmishes Over Illegal Logging

This year timber trafficking from Myanmar to China is believed to be at an all-time high.

Myanmar's forests are the final frontier for the logging of tropical hardwoods in mainland Southeast Asia.

Until a few weeks ago as many as a hundred timber trucks a day rolled through Marip Brang Mai's village in Kachin State, northeastern Myanmar, a couple of hours' walk from the country's border with China.

The Kachin Independence Army (KIA), the military branch of the Kachin Independence Organization (KIO), has been fighting a slow-burn civil war for autonomy, on and off, for more than 50 years.

Before April 2014 the group controlled a strip of borderland that has served as a major timber-smuggling route between Myanmar's dwindling lowland forests and China, Asia's emergent superpower.

Then, at 10:30 a.m. on April 11, after two days of heavy clashes with Myanmar's army, the KIA started to withdraw from its outpost controlling both Marip Brang Mai's village and the coveted Nongdao border crossing.

Later that afternoon, as explosions got closer to their farm, Marip Brang Mai gathered his wife, three children, and some other relatives. Terrified, they fled into the jungle, but too late.

The jagged shards of a Myanmar army mortar shell ripped through Marip Brang Mai's right arm, neck, and abdomen.

"I couldn't walk, so my brother-in-law carried me," he said, recovering in a Chinese hospital.

In a communiqué, Myanmar's army, known as the Tatmadaw, said the offensive was aimed at halting the black market logging trade, which accounts for almost three-quarters of the country's wood exports, according to the London-based Environmental Investigation Agency (EIA).

Indeed, in the past year the KIO said it earned around 50 million Chinese yuan ($8 million U.S.) from tolls on the 18-ton timber trucks traversing KIO territory, some 80 percent of which passed into China via Nongdao.

Marip Brang Mai doubts the sincerity of the Tatmadaw's green ambitions. "I can't believe the Myanmar army," he said, wincing as he adjusted his elbow, which is held together with a dozen metal pins.

Conservationists and the KIO say the Tatmadaw has long been in cahoots with the smugglers. They describe the army's communiqué as a flimsy pretext for controlling a lucrative border crossing while denying the KIO a major revenue stream at a pivotal time in peace negotiations.

For the most part, tolls on gold and jade have kept the KIO's operations going. But this year, KIO coffers have been furnished by the tolls collected from the China-bound illegal timber traffic, according to conservationists and KIO officials.

Strife in the Borderlands

A patchwork of 17 rebel ethnic armies hemming the country's borders have long reacted to the thuggish hegemony of the majority ethnic Bamar, who dominate Myanmar's central government, by taking up arms.

With an estimated 8,000 troops, the KIO is Myanmar's second largest rebel group, after the United Wa State Army. The KIO is also the last major group to resist signing a nationwide ceasefire that would bring one of the world's longest-running civil wars closer to an end.

Formed in 1961, the KIO originally sought independence for the Kachin ethnic minority. But it's now fighting for autonomy within a federalized state and is demanding fundamental changes to Myanmar's military-drafted constitution of 2008. "The revolution won't stop till we get equal rights in the country," said Zau Tawng, head of the KIO's strategic command.

"Disciplined Democracy"

Three years ago Myanmar's ruling junta traded in their fatigues and started a westward shift in geopolitical alliance, seen as an attempt to balance China's expanding orbit by increasing diplomatic and economic ties with Europe and the United States.

The path to "disciplined democracy" heralded the gradual denouement of decades of ruinous misrule.

But to complete the country's political and economic transformation, President Thein Sein and his coterie of reformers, who came to power after winning a deeply flawed election in late 2010, need to make peace with the Kachin and other armed rebel groups in the borderlands.

While parts of the country play backdrop to hundreds of thousands of selfie-snapping tourists, it's easy to forget the ongoing civil war that has gripped large portions of those borderlands for more than half a century.

Stability would open up Myanmar's markets to regional transport routes, draw investment, allow development in long-neglected areas, and earn legitimacy from Western embassies.

But mistrust lingers, not least because two months after assuming power in March 2011, Thein Sein's reformers began fresh offensives against the KIO.

That campaign ended 17 years of uneasy truce in Kachin State, in which the absence of war fell well short of peace or a resolution to the KIO's grievances.

"Thein Sein's government does not really have the political will to bring peace in the country. They just want to win favor among the international community," said Sumlut Gam, leader of the KIO's negotiation team.

Don't Break a Leaf

Britain began to annex Burma (renamed Myanmar in 1989) in the 1850s, in part to secure the abundant teak resources it was consuming to build ships and railway ties across the British Empire.

Strict forestry laws were imposed—it became an offense even to break a leaf from a teak tree—and a sustainable timber industry flourished.

After independence in 1948, the government of Burma implemented a series of disastrous, sometimes bizarre, reforms that threw the economy into a tailspin. (In one instance in the late 1980s, the government demonetized the 75, 35, and 25 kyat banknotes, among others, wiping out people's savings.)

Facing bankruptcy, the military junta fired up the chain saws. "After independence we had to overcut ... because we needed to, for the interests of the country," said Shwe Kyaw, chairman of the Myanmar Forest Certification Committee.

The best available figures indicate that Myanmar lost almost 20 percent of its forest cover between 1990 and 2011, according to the United Nations Food and Agriculture Organization.

Surprisingly, well-meaning activists from Europe and the U.S. share some of the blame, Shwe Kyaw claims.

The junta refused to step down after it lost the 1990 elections by a landslide. Goaded by activists and campaign groups, Western countries then imposed biting economic sanctions, further isolating the hermitic regime.

In response, the military government flogged timber concessions to Chinese-backed crony businessmen to help prop up its rule, legalizing the plunder of the forests.

"Due to the sanctions ... we had to try to get hard currency," Shwe Kyaw said at his office in the commercial capital, Yangon, monsoon rain lashing down outside. "In that case teak is one of the important resources; there was a lot of pressure."

Official hardwood exports grew more than eightfold, from less than 150,000 cubic meters in the 1994-95 felling season to 1,200,000 cubic meters in 2009-10, according to government figures.

Official exports are the tip of the iceberg. A trade analysis by the EIA shows that there were 16.5 million cubic meters of unauthorized log exports between 2000 and 2013, worth some $5.7 billion.

According to Shwe Kyaw, smuggling timber is a cinch: The complicity of local officials, combined with the remoteness of some forests, makes it difficult for the central government to control logging. "Local authorities will negotiate. There's a bribery and corruption racket."

KIO Proto-State

The six-hole course at the Laiza Golf Club, built by the KIO in 2007, is sandwiched between a steep hillside and a river that marks the Chinese border. Stray balls frequently land in another time zone, an hour and a half in the future.

On most days a handful of KIO top brass drive, pitch, and putt their way around the course, just three miles from the hilltop occupied by the Tatmadaw front line, the site of heavy fighting in January 2013.

Backed by helicopter gunships and fighter jets, the army captured several positions but stopped just short of seizing Laiza, the KIO headquarters.

The sophistication of the KIO's administration (and its leaders' choice of hobbies) suggests that this is far more than a ragtag band of militiamen running around the jungle. The KIO operates a small but well-organized proto-state.

There's a centralized toll taxation system, hydropower plants supplying 24-hour electricity, hospitals, schools, a police force, a drug rehab center, and an arms factory making knockoff Kalashnikov assault rifles, Type 81s.

KIO bosses resent being labeled as rebels, preferring "revolutionary armed group." At the golf clubhouse, La Nan, spokesman for the KIO's political wing, advised how those seemingly innocuous semantics explain why peace has been so elusive: Rebels, he said, are mercantile while revolutionaries are political.

"The government says that if our economic situation improves, we will lay down our weapons," La Nan said. "That's not right. What the KIO is trying to achieve is political rights."

By that he meant the KIO wants to govern Kachin State autonomously within the federal union. It wants the right to administrate the Kachin people and what it considers their natural resources.

Timber Trafficways

Under the terms of the last ceasefire with the junta, in 1994, the KIO signed away control of the prized Hpakant jade mining area in eastern Kachin State.

So the KIO turned to timber. Deforestation in their territory soared, according to Global Witness, a resource watchdog. The bald and blackened hillsides south of Laiza bear the scars.

In 1997 a Chinese logging firm, the Jinxin Company, was contracted by the KIO to build two hydropower dams in exchange for logging concessions. In a strange quirk of the conflict, the KIO continues to sell the hydroelectricity to government-controlled towns.

In 2002, the KIO banned commercial logging in its territory and began to depend on the "taxes" levied from gold, jade smuggling, and to a lesser extent timber trafficking, he said.

Nevertheless, conservationists say that this year timber trafficking to China is at an all-time high.

"These days the illegal timber trade is happening because the Chinese businessmen log in [lowland] Burma and transport through our territory," explained Yaw Ding, assistant director of the KIO's economic department in Laiza. "So we just get tax."

The KIO imposes a 10 yuan ($1.60) toll per metric ton of lowland teak and 20 yuan ($3.20) for the equivalent amount of rosewood, an endangered trophy hardwood.

Research by National Geographic during a ten-day trip to the area in late April 2014 supports the KIA's claim that the timber now entering China wasn't logged in its upland enclave. Rather, the golden teak, rosewood, and other hardwoods are felled in the Sagaing Region in northwestern Myanmar, home to some of Southeast Asia's last remaining forests.

"This year there's the highest volumes of timber people have ever seen, and it's coming from Sagaing," said Tony Neil, forest governance adviser for EcoDev. "None of the timber is coming from Kachin."

Most logs are pulled up the Irrawaddy River to Shwegu, where they're loaded onto trucks and driven east. Some pass through Bhamo or Sinbo and, after crossing the front line into KIO territory, slip into China via Laiza.

Since October 2013, said Yaw Ding, some 80 percent of the timber traffic passed through the town of Man Si, then along small dirt roads through villages like Marip Brang Mai's and finally, via the Nongdao border crossing, into China.

En route, the timber must pass through numerous checkpoints controlled by the Tatmadaw.

"The smugglers have to pay bribes to lower ranks of the military—private right up to general," said Zau Tawng from KIO's strategic command. "They have to pay at every step. Soldiers from all ranks make a lot of money."

Zau Tawng added, "As long as the political unrest exists in the country, the illegal trade will continue because they don't have any rule of law."

Policy Backfire

On April 1 the reformist central government introduced a new ban on all unprocessed log exports out of the port of Yangon. Overland log exports to China had already been banned since 2006. The aim was to lower pressure on forest resources, free up lumber for local consumption, and cash in on the added value of processed wood.

Despite the sensible intentions, that strategy has already started to backfire.

Teak prices plummeted at Myanmar's April 28 log auction in Yangon because timber-processing facilities don't exist yet, creating a surplus of supply.

Furthermore, conservationists fear that the measure will increase illegal log exports to China. "It could create a perverse incentive for increased pressure on overland log exports, since this will now be the only logistical way to get logs out of the country," said Kevin Woods, an analyst with Forest Trends.

Under the guise of stopping illegal logging, the Tatmadaw seized the Nongdao border crossing 11 days after the new ban was put in place.

Each side admits that eight Tatmadaw and three KIA soldiers were killed, while 5,000 people fled their homes, some for the second or third time.

From the KIO's point of view, the Tatmadaw's April offensive was less about polishing its green credentials than depriving the rebels of a lucrative revenue stream from illicit logging tolls.

The battle also severed communication lines between the KIA's third and fourth brigades, weeks before the hotly anticipated ceasefire signing. "They just want to impose some pressure on us to sign the ceasefire agreement quickly," the KIO's Zau Tawng said.

That strategy has also backfired by further eroding trust at the negotiating table. Several other armed groups have now decided to reconsider signing the nationwide ceasefire.

With prospects for meeting the army's August ceasefire-signing deadline slimmer than ever, Myanmar's forests will remain beleaguered.

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