Fiji Focus
Juggling The Mahogany Issue
A thorn in Qarase's administration
Rumours had it that it was a factor that led to the overthrow of the elected government of Mahendra Chaudhry in May of 2000. Two years later, it is still a thorn in the current administration of Prime Minister Laisenia Qarase. That is mahogany - 40,000 hectares of swietenia macrophylla, an exotic mahogany species, spread out in 14 plantations on Fiji's two main islands of Viti Levu and Vanua Levu.
About 18,000 hectares (almost half of the mahogany forests) are matured and ready for harvest. And that's only part of the problem. With the world's largest supplier of the lucrative timber, Brazil, placing a moratorium on the sale of its mahogany, the time for Fiji to sell its timber, industry experts say, is now. With the world price for mahogany last quoted at US$1320 (F$2640) per cubic metre, the absence of Brazil's sought-after timber is definitely going to take the price much higher.
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There's also a real fear amongst experts that the longer Fiji delays harvesting its mahogany, the greater the competition it will face. With Brazil out of the mahogany market, the search is in earnest for alternatives to mahogany, products that are similar in look but much more cheaper in costs - a development Fiji can ill afford.
Then there's the other problem of how much Fiji's mahogany really costs. One time interested party, the United Kingdom's Commonwealth Development Corporation valued it at F$136 million (US$28 million), whilst its rival, United States-based Timber Resources Management pegged its valuation at F$400 million (US$200 million). If that was not confusing enough, a Fiji government commissioned New Zealand consultant recently came out with its valuation at F$150 million (US$7.5 million).
Fiji Hardwood Corporation Limited, incorporated in 1998 by government to manage its hardwood plantations, puts down the confusion in prices to "commercial sensitivity". "Sensitive in the sense that the figure varies depending on whether they are being quoted by the buyer or seller," the company told Pacific Magazine.
Despite the marked differences in the true value of the mahogany forests, there is no denying that Fiji has a lot of mahogany, poised to bring in a lot of money. And this has been the main cause of conflict to date with all vested interests wanting to claim a share. Foreign companies of various shades and sizes have declared their interest in wanting to harvest the forest. Landowners have also entered the fray, demanding their pound of flesh.
Then there's the Native Land Trust Board, the agency that acts as the trustee for indigenous landowners, and the powerful indigenous Fijian chiefs body, the Great Council of Chiefs. Caught in all of these, of course, is Qarase's government, which while seeing the need to act quickly on what has been recognised as a national asset, concedes that it must win the support of all stakeholders.
In an apparent attempt to avoid the tactics of his predecessor that only served to antagonise mahogany landowners and indigenous Fijian politicians, Qarase has been extremely patient in getting the council of chiefs' views on how to process the country's mahogany. That report didn't come out until more than two years later. Financial gains for landowners the chiefs' report suggested should be in three streams:
- 10% of stumpage,- 50% of profit, and
- 100% in contracts.
Landowners, however, have rejected the report outright, saying it falls far short of their expectations. "It's cheeky for government to keep reminding us that it owns the mahogany forests. But where would those forests be if we didn't lease out our lands?" a disgruntled landowner told one of their meetings in the capital, Suva, in May.
However, the new head of the Native Land Trust Board (NLTB), Kalivati Bakani, a close ally of Qarase, views the chiefs' recommendation as a starting point. "It has been suggested that there ought to be a 50/50 deal in so far as profit sharing is concerned, that's really where negotiations would come in," says Bakani. "I think landowners would be wanting a bigger piece of the cake. But I think the starting point has been started by that paper."
While Qarase may have the NLTB and now the council of chiefs on his side, pacifying the indigenous landowners would be an enviable task. Already, landowners have accused him of reneging on a pre-election promise of consulting them once the chiefs come out with their report. Rumours that his recent visit to China was to explore possible Chinese partnership for mahogany added fuel to fire, even though Qarase himself had denied making any deals with his host.
"Yes, the PM is not popular amongst our clients," mahogany landowners' lawyer, Isireli Fa says. "My clients feel betrayed by the government's actions on mahogany."
Landowners in their May meeting gave Fa the mandate to seek legal action if necessary in order to protect their interests. Fiji Hardwood Corpo-ration had wanted to begin large scale harvesting of mahogany at the beginning of this year. But Qarase is now talking of later in the year as a start date.
How Fiji will reach that start date will be a huge test on Qarase's ability to juggle all the vested interests ‹ from brokering a deal that pacify the agitating landowners, satisfy a willing overseas partner, and take his nation forward.
