Cambodia's foremost logging syndicate has flouted domestic and international laws by creating a clandestine smuggling network to facilitate the “large-scale industrial take-over” of protected areas and national parks, according to a report to be released this morning by Global Witness.

The eight-month covert investigation by the UK-based corruption monitor into the empire of logging magnate Try Pheap reveals a complex illegal logging network dependent on the complicity of government officials, the military, police and customs officials, to traffic protected logs across the country and onto boats bound for Hong Kong, where the cargo is thought to be transferred to the mainland through the Shenzhen Special Economic Zone.

From Sihanoukville, allegedly the major port of origin for the company’s illegal timber exports, the Try Pheap Group ships at least 900 cubic metres of timber overseas every day, according to the Global Witness report titled The Cost of Luxury.

Documents obtained at the port included export licences for $5.6 million worth of timber headed for Kin Chung Transportation, a firm listed as having a capital shareholding of only HK$2 ($0.25) and an address registered to a residential building in Hong Kong.

Kin Chung Transportation’s directors claimed to have no knowledge of the Try Pheap Group when contacted by Global Witness, which “only further raises suspicions about the legality of Oknha Try Pheap’s timber trading business”.

Reached yesterday, Lou Kim Chhun, director of Sihanoukville Autonomous Port, said he could not speak to the amount of Try Pheap Group wood said to pass through the harbour.

In one set of documents obtained by investigators, the Forestry Administration is listed as an exporter working on behalf of Pheap. The agency explained this as standard procedure for timber exports, for which it takes a 1-per-cent charge.

Thun Sarath, a director at the Forestry Administration, said that the department welcomed the recommendations from Global Witness, which include an investigation into Pheap’s network and a moratorium on new licences for his companies, public auctions for the remaining stocks of timber held by the government, and the establishment of a fund from the proceeds dedicated to protecting Cambodia’s rare tree species.

“All their recommendations are in accordance with the law, so we welcome them,” he said.

In a written response to the recommendations, the administration maintained that the collection of luxury timber was restricted to reservoirs and land concessions, and that anyone permitted to sell it paid taxes to the government.

It also defended its record of cracking down on illegal timber smugglers, and said that it already had a policy on auctioning seized timber.

In October, the Post revealed how more than $227 million of illegally logged rosewood was allegedly exported from the Cardamom Mountains by Pheap’s MDS Import Export company using a licence to clear the Tatai hydropower dam reservoir as a cover.

Much of the timber observed by the investigators at Pheap’s depots in Ratanakkiri province, where they were being prepared for export by land to the Vietnamese port of Qui Nhon en route to China, was Siamese and Burmese rosewood, and Burmese padauk, known locally as thnong.

All three species are supposedly protected under Cambodian law, and the collection, processing and export of Siamese rosewood was explicitly banned by Hun Sen in December 2013. Siamese rosewood is also internationally protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

After clearing Lumphat Wildlife Sanctuary of its luxury species, Pheap’s brokers moved on to Virachey National Park and other forests in Cambodia’s remote northeast, the report continues. An analysis of satellite images showed extensive logging outside of permitted concessions.

Through several companies, Pheap owns nearly 20,000 hectares of economic land concessions even after two large concessions in Virachey National Park were cancelled for lack of development by Hun Sen late last year. The tycoon also has interests in mines, hotels, casinos and other real estate.

Based on testimony provided to Global Witness by government officials, industry insiders and representatives of Pheap’s companies, the group concludes that “complex systems of cronyism and complicity” enable the illegal trade, pointing to the role played by members of the prime minister’s bodyguard unit, Brigade 70, and recruits from the Kraing Chek military school.

“Buyers of lavish four-poster beds and vanity tables in China may be unwittingly lining the pockets of what can only be described as timber gangsters,” Megan MacInnes of Global Witness said in a statement. “Try Pheap and his network are destroying Cambodia’s last forests and robbing indigenous communities of their livelihoods. Meanwhile, the very officials in Cambodia who should be stopping them are conspiring to ensure that contraband wood enjoys safe passage, and is exported as seemingly legitimate lumber.”

An official list of sponsors of Cambodia’s military units from 2010 shows the Try Pheap Group backed at least four army battalions, the report noted. Offices of the Military Police have been found virtually abandoned after the loggers move on, with new temporary offices established nearer to the lucrative logging camps.

“The office of the Military police runs after the timber,” one commune chief said to Global Witness.

Through interviews with dozens of villagers and loggers in Ratanakkiri, Global Witness identified at least 89 members of Pheap’s network, including three police officers, a former court prosecutor, two Vietnamese nationals, a soldier and two employees of an international conservation organisation.

The soldier is identified as a two-star general and member of Hun Sen’s bodyguard reserve unit Brigade 70 called Hom Hoy, who allegedly offers hollow promises of development projects in exchange for villagers signing off on Pheap’s logging in the area. If the promises are not enough, cash payments and offers to pay for traditional ceremonies may be followed with threats and intimidation, the report notes.

Hoy could not be reached and other military spokespeople declined to comment.

Prak Vuthy, general manager of Pheap’s MDS Import Export, declined to respond to the Global Witness report.

“I cannot answer [questions] because it has nothing to do with my work. They make their accusations; all the NGOs make accusations,” he said.

Global Witness’s MacInnes, meanwhile, said that the illegal timber trade was a human rights issue.

“This is yet another example from Cambodia of political power and business interests trumping citizens’ rights, and the wholesale capture of the country’s natural resources by its corrupt ruling elite.”