Major Players Eludes Government 's Anti-logging Drive in Aurora

31 JANUARY - 1 FEBRUARY 2005
Major Players Eludes Government 's Anti-logging Drive in Aurora
by LUZ RIMBAN

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As the debate on logging heats up, the PCIJ is releasing a two-part article that shows how difficult it is for the government to cut down on "illegal loggers." This report tells the story of two big-time loggers in Aurora and Quezon, provinces recently devastated by floods and mudslides linked to deforestation.
The first part of the report reveals that DENR Secretary Michael Defensor recently stood as ninong to a member of a wealthy family with logging operations in Aurora. The DENR, during Secretary Gozun's time, suspended the logging operations of that family. But Defensor ordered their resumption when he came into office.

The report reveals how legal loggers have violated the terms of their licenses and agreements with the government and are cutting into huge swathes of forests beyond their concession areas; they are therefore logging illegally. But they have not been included in the government's anti-illegal logging campaign. Instead, the campaign is directed at medium-sized local culprits who should have been identified, stopped and penalized long ago. As a result, the campaign is turning out to be a quick fix largely made for media mileage, than an actual long-term solution to a festering problem.
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AT A wedding of a wealthy Filipino-Chinese family late last year, the bride and the groom became the privileged godchildren of a high government official who was one of their many sponsors. The event would have passed unnoticed, except that the padrino was Environment Secretary Michael Defensor and the family involved owned a company that had its tree-harvesting operations suspended by Defensor's immediate predecessor at the Department of Environment and Natural Resources (DENR).

The suspension was imposed on Toplite Lumber Corporation, owned by the Chua family, in 2003, after an investigation revealed that it had been cutting trees beyond its designated area. Earlier, Toplite had been granted an Integrated Forestry Management Agreement (IFMA), with a permit to cut trees on 8,000 hectares of land in Aurora province.

No action had been taken on Toplite's appeal for a lifting of the suspension order until the time of Defensor who, after he became DENR chief last September, had agreed to stand godfather at the wedding. Sometime after the Chua nuptial, a disaster that was later linked to logging hit Aurora and its neighboring provinces, leaving towns buried in mud, hundreds of thousands of people homeless, and some 1,500 people either dead or missing.

Toplite is one of only five firms holding timber and forestry permits in Aurora. It has appeared in environmental groups' lists of alleged violators of forestry laws. Yet it has so far escaped investigation for its complicity in the recent tragedy, which many people, including government officials, have blamed on "illegal logging."

DENR veterans say the lack of official interest in Toplite does not surprise them. Wood is big business, after all, and lumber and logging families have for decades tried to establish more than just formal ties with politicians and bureaucrats who can open the gates to the country's vast forest land. The perception, at least within the DENR, is that such ties come in handy whenever the department decides to implement rules by the book, or when government decides to crack down on errant loggers-something that seems to happen seasonally and selectively, but usually after a disaster and a significant loss of lives.

In the current anti-illegal logging campaign, for example, Defensor has so far zeroed in mostly on those found in possession of "hot logs" or illegally cut trees, mostly medium-sized local perpetrators who lack the permits required for logging. In reality, however, the violators include big well-connected companies with government-approved operations covering thousands of hectares of forestland or wealthy families who use valid permits to cut trees to log in areas they are not supposed to touch.

By definition of the Forestry Management Bureau, an illegal logger is anyone who cuts and harvests trees in violation of forestry laws, rules and regulations. This then includes those who may hold legal concessions to cut trees but violate the terms and conditions of their tree-cutting permits.

DENR bureaucrats say this was exactly why Toplite's harvesting activities were suspended almost two years ago. A team of foresters from Manila and the regional office had found the company to have committed various violations, including the cutting of trees beyond its borders in Dipaculao town, Aurora, encroaching on land that was already part of neighboring Quirino province.

The team even recommended that the DENR consider the "eventual cancellation of the Industrial Forest Management Agreement (IFMA) of Toplite" which had been issued just months earlier by then Secretary Elisea Gozun's own predecessor at the DENR, Heherson Alvarez. The IFMA is an agreement between the government and private entities allowed to exclusively "develop, manage, protect and utilize" a specific piece of "forest land of the public domain" for a period of 25 years (renewable for another 25). Under it, the government and the private company or individuals agree to share the fruits of the land.

DENR insiders say that although the foresters' report put Toplite in an unflattering light, the company later found support higher up in the bureaucracy. In August 2004, a memorandum to Gozun signed by one DENR undersecretary, one assistant secretary and two directors disputed the foresters' findings, and even reproached them for commenting on matters that were supposedly outside their area of concern. The four officials were soft on Toplite, and yet played safe. "We find no serious ground that would warrant the cancellation of IFMA 2002-02...In the same vein, we find no reason to lift outright the order suspending the harvesting operations of Toplite," they said.

The officials said Toplite's suspension could be lifted after a review of its Comprehensive Development and Management Plan or CDMP. Any IFMA should be based on such a plan, which is drawn for the area approved by the DENR.

A DENR insider, though, says Gozun sat on the officials' memo and decided to leave the matter for her successor, which turned out to be Defensor, to resolve.

All this time, the company had continued cutting trees since only its harvesting operations had been suspended. Toplite owner Belen Chua, however, says the firm decided to move away from the area near Quirino province, which she describes as a complicated boundary dispute. Chua adds that they complied with the requirements for a lifting of the suspension, including revising the company's CDMP.

"Before Gozun left, we fulfilled all the requirements," says Chua. "She just didn't want to sign it because it would appear to be a midnight deal."

She denies that her company is logging illegally. Although Toplite has been in the wood-processing business for the past 18 years, Chua says that it was only three years ago that her family decided to cut and harvest logs themselves in Dipaculao town in Aurora.

Chua notes that Toplite has provided employment to some 100 local residents since it started operations in 2002. "Kailangan ng mga probinsya 'yan (Those provinces need the jobs)," she says, pointing out that provinces like Aurora are among the poorest in the country. Otherwise, Chua says, local residents resort to theft and crime, including illegal logging.

Chua says Toplite is being dragged unjustly into the issue of illegal logging, and that the crackdown has adversely affected the wood-and-lumber business. Because of the nationwide suspension of cutting permits ordered recently by President Gloria Macapagal-Arroyo, wood has been harder to come by. Chua reveals that lumber is now 30 percent more expensive, and the illegal loggers who defy the president's orders have been selling their produce for as much as P32 per board feet when it used to be just P26. Prior to the suspension on cutting, lumber cost P18 per board feet. According to Chua, foreign firms from countries like Malaysia and Indonesia are the ones now reaping the benefits of a dearth of local wood, and are stepping up lumber exports to the Philippines to fill the vacuum.

Chua denies reaping benefits from any ties with any official; she says that Defensor was not present at the wedding that had taken place before the most recent tragedy traced to logging. But the environment secretary himself admits it, and even explains that he stood as ninong there because one of the Chua sisters, Pauline, is his neighbor at an exclusive village in Quezon City.

He says, however, that there was no wedding gift from the DENR. "Toplite was never allowed to operate," Defensor says.

Still, the situation has improved for Toplite under his watch. His subordinates argued for the full resumption of Toplite's activities. Regional officials recommended, as a prerequisite to the lifting of the suspension, approval of Toplite's Comprehensive Development and Management Plan for its IFMA area.

Defensor admits having signed the CDMP but says he withheld approval on the number of trees — called allowable cut — the company is authorized. As far as he is concerned, though, the issue is "moot and academic," since the president has imposed a suspension on the permits to cut trees all over the country.

Chua, for her part, says that Toplite was able to secure a lifting of the suspension on harvesting activities, but that such operations are now at a standstill. She also says her company has stopped cutting trees as well, in compliance with the president's order.

In theory, holders of timber and forestry permits who violate the terms of their permits are supposed to be the easiest to catch. This is because, Defensor says, "they have clear agreements with the government, and definite areas of operations." Besides, they are supposed to follow definite procedures when obtaining such permits.

But DENR officials are not always alert for such violations, and some even help logging companies commit these.

In early 2003, the same team of foresters who discovered the violations on Toplite's boundaries had also recommended the filing of formal charges against the regional, provincial and community environment officers who oversaw Toplite's IFMA application. The foresters said that for failing to fulfill their duties, these officials became responsible for "rampant illegal logging."

Apparently, these local and regional environment officers had either missed or turned a blind eye on Toplite's failure to hold consultations with the community as required by law. A public meeting on the Toplite IFMA was held in Barangay Dinadiawan, Dipaculao town only on April 29, 2003, several months after IFMA had already been approved by Secretary Alvarez.

The minutes of that meeting show local leaders asking environment officials why the application of Toplite was approved without public consultation. The provincial environment officer's response: "There were resolutions passed by barangay officials… and the municipal government of Dipaculao showing support to the application (of Toplite). As duly elected officials they have the right to decide regarding the issue and this was the basis used by the DENR in approving the IFMA application of Toplite."

The foresters, however, discovered that the resolutions from the three barangay councils concerned appeared to be identical in number and the wording. "The team concluded that DENR employees together with Toplite Lumber prepared them," the foresters said in their report. "They had with them the prepared resolutions when they went around and consulted the barangay council members and got the respective signatures regarding the endorsement of the LGUs (local government units) for the application of Toplite for IFMA, which should not be the case."

Toplite's Belen Chua insists, "We have complied with the conditions of our IFMA." This includes reforesting some parts of her company's logging area. With cutting activities suspended, she says her company is keeping itself busy planting gemelina trees, whose wood is popular among furniture makers.


Part Two
This Developer Burns Money and Cut Trees
by LUZ RIMBAN

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As the debate on logging heats up, the PCIJ is releasing a two-part article that shows how difficult it is for the government to cut down on "illegal loggers." This report tells the story of two big-time loggers in Aurora and Quezon, provinces recently devastated by floods and mudslides linked to deforestation.
The second part of the report tells the story of another politically well-connected logger in Aurora, Romeo Roxas, a banker who parlayed his connections to obtain a logging permit in the areas most severely affected by last year's flooding.
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OF ALL the companies cutting trees in the Quezon and Aurora provinces, Green Circle Properties and Resources Inc. (GCPRI) stands out. For one, GCPRI is not a wood-based company. For another, its president Romeo Roxas burns money literally.

At public meetings, Roxas shocks crowds of peasants, environment activists, community leaders and local government officials each time he sets fire to crisp cash, sometimes a P50 bill, other times bigger denominations. It's just to make a point, and the point is, according to those who've heard him say it, is this: "It's easy to make money, and easy to find funding for development projects. Money is not a problem."

Considering that Roxas is also a director of the Philippine Veterans Bank, it's obvious where he's coming from. Indeed, he does not seem to run out of funds for a variety of enterprises that range from real estate and construction to banking. He could very well have a green thumb when it comes to business, because his companies are all lushly named: Green Circle, Green Square, Green Dreams and Green Earth.

Perhaps the biggest of all his businesses is Green Circle, which has a Special Private Land Timber License (SPLTL) covering 28,000 hectares in Aurora and Quezon, an area much bigger than Quezon City and bigger even than Batanes. It is the biggest privately owned land in what Roxas has called the country's "wild, wild east." Green Circle's timber area is spread out over the towns of Dingalan, Aurora and General Nakar, Quezon, and is one of only five timber license holders in Aurora province.

An SPLTL is just like a timber license agreement but involves private land, alienable or forest land, or disposable land covering a huge area. Among the privileges or conditions given to SPLTL holders is that they are allowed to harvest hardwood trees.

Green Circle has become the object of ire of lawmakers and environment groups for what they say is its role in the denudation of the forests of Dingalan and General Nakar, which they believe is partly to blame for the massive flooding and loss of lives in the aftermath of four killer typhoons that hit Eastern Luzon last December. To them, Roxas's activities in his Green land are yet another proof that the current anti-logging campaign is nothing more than a quick fix largely made for media mileage, rather than an actual long-term solution to a festering problem. Critics of the Department of Environment and Natural Resources (DENR) and its head Michael Defensor have also noted that the department's much-publicized raids have managed to nab not big-time players, but only medium-sized local illegal loggers.

Judging it by its owner alone, it is understandable why many see Green Circle as one of the big-time players. Roxas is a well-connected lawyer and entrepreneur, who has brokered deals and done business with various agencies of government since the 1970s. His latest venture is the deal he made with the pre-need cash-strapped company College Assurance Plan, where he is putting in 3,000 hectares of Green Circle land in exchange for CAP shares of stock.

But Roxas has repeatedly said, "I am not a logger. I am just clearing my land!" He says he cannot understand why he and his company have become the subject of public wrath when in fact his endeavors were all endorsed at the highest levels of government. "My project has been declared a national flagship project by two presidents: Fidel Ramos and Joseph Estrada," he says. "I don't know why I am being branded an illegal logger. Government knows what I am doing. They know that I am cutting trees. How can they not know when they approved it themselves?"

The project he is referring to is a gargantuan infrastructure venture called "New Pacific Coast Cities," which is being sold as an alternative to Metro Manila. It will include an industrial city, a government center, housing and tourism sites, as well as a university town, all of which will rise on 20,000 hectares of Roxas's land. In January 2000, Estrada himself also signed a proclamation declaring a Special Economic and Tourism Zone in the very areas where Green Circle land is-the Umiray area, both in Dingalan, Aurora, and in General Nakar, Quezon. This whole swath is to be known as the "Pacific Coast City Ecozone."

How Roxas managed to wangle approval from high places may not be so surprising if one looks at his background. A member of the University of the Philippines College of Law Class of 1961, Roxas counts among his classmates the banker Manuel Zamora, one of Estrada's key supporters, as well as Magdangal Elma, who has been part of government since the time of Ferdinand Marcos, continuing on to the administrations of Corazon Aquino, Ramos, Estrada and even Gloria Macapagal-Arroyo. Another former classmate is Andres Gatmaitan of the top-drawer Sycip Salazar law firm. Elma and Gatmaitan, along with John C. B. Go of Equitable Bank, are in fact listed as stockholders of Green Square Properties and Resources Inc., which owns part of Green Circle.

Roxas is also a member of the influential Sigma Rho Fraternity of the UP College of Law, whose members are spread out over various branches and levels of government and the private sector. They include Senate President Franklin Drilon, Senator Juan Ponce Enrile, Senator Edgardo Angara (whose family is the new political force in Aurora), Ombudsman Simeon Marcelo, and Supreme Court Justice Antonio Carpio, to name just a few.

It was Estrada's Environment Secretary, Antonio Cerilles, who granted Green Circle SPLTL No. 5, a permit to cut and transport trees. The document granting the permit was undated, but released sometime in late 1999. Green Circle had waited three years for that SPLTL. Cerilles's predecessor Victor Ramos had hesitated approving the application, since the company did not just plan to cut and harvest trees. It wanted to clear some parts, develop it, even build a theme park.

Residents in and around Umiray in Dingalan and General Nakar, however, fear that Roxas's project will destroy their environment, and are asking the DENR to revoke Green Circle's SPLTL, because of, among others, "its grave threat and effect to the livelihood and culture of the indigenous people." A 2001 study done by the NGO Integrated Rural Development Foundation (IRDF), says Green Circle's area is Dumagat land, and its operations encroach on ancestral domain. The study adds, "Soil erosion and siltation are also evident as shown by the brownish color of the river. This condition proves that there are ongoing activities in surrounding mountains and hills which caused landslides and movement of the top soil that rainwater carries to the Umiray River."

Green Circle is only the latest in a line of companies that have been logging in Aurora province. Green Circle's land used to be owned by Don Andres Soriano, before it fell into the hands of Roberto Gopuansuy, owner of the South Eastern Timber Corporation, from whom Roxas eventually bought the property. After nearly 40 years of commercial logging, the big hardwood trees are gone and what remains is mostly residual forest. Says the IRDF study of Green Circle's area of operations: "The actual site investigation revealed that there are not enough forest trees of allowable size within the Operational Plan sites. There is no basis for the approval of SPLTL No. 5 by former DENR Sec. Antonio H. Cerilles because most of the forest trees in the area did not reach the minimum 60 centimeters dbh tree size as required under DENR Administrative Order No. 12 issued on April 1, 1992."

But Roxas believes that all these laws and regulations do not apply to Green Circle, since he is turning the land into real estate development, and not cutting trees for wood. "They are applying forest laws on me, but I am not within the framework of any of these laws," he says. "I am not covered by any existing forestry law."

As Roxas sees it, he is only being used as a scapegoat for the government's anti-illegal logging crusade, because the DENR has been unable to make much headway in its campaign. In fairness to the DENR, though, running after loggers is a difficult and often dangerous task. Since the martial law years, when logging-legal and illegal-was at its peak, logging magnates have been roaming the corridors of the department, seeking and giving out favors. Out on field, foresters could find themselves facing armed goons who stand guard along dark and desolate logging roads, protecting logging areas against intrusive outsiders, especially earnest agents of government.

It is also an open secret that some of the country's richest families built their fortunes on logging. The family of Senator Jamby Madrigal, current nemesis of Defensor, was among these, as were the Moratos, Plazas, Antoninos, Alcantaras and Consunjis.

All over the country, those who dream of similar wealth go into logging. Illegal loggers encountered by DENR foresters include politicians and military officials in far away places like Mindanao, while in other parts of the country, businessmen act as financiers encouraging impoverished local residents to cut trees and buying whatever they harvest. Apart from the wanton deforestation, such practices also result in government losses because forest fees are not levied on these loggers.

Yet pinning illegal logging charges on Green Circle and making those charges stick may be a huge challenge, since Roxas and Defensor are looking at the problem from different points of view, and largely because Green Circle had been given the green light by various administrations, including the present one.

Even his entry into the Philippine Veterans Bank (PVB) had government support, Roxas says. During the Ramos administration, Roxas was tapped to revive the bank that went bankrupt in 1985. "I financed the opening of the bank," Roxas points out. He even cites the P4,000 monthly pension World War II Veterans now receive, which was a paltry P500 when he first got on board. "We lobbied, we worked for that," Roxas states.

But a group of veterans who have organized themselves into the Crusade to Reform Veterans' Organization (CREVO) believes Roxas used the bank to expand his businesses. CREVO members have charged Roxas and other bank officials with plunder and violation of the Anti-Graft and Corrupt Practices Act. They said in their complaint filed before the Ombudsman: "Board member Romeo Roxas established two companies, the Green Square Properties of which he is a director, and the Green Circle Properties of which he is president as well as director. The total paid-up capital of these corporations amounted to P600,000. Yet these undercapitalized corporations were granted loans by PVB as approved by (its president Emmanuel) de Ocampo to the tune of a staggering P66.8 million."

CREVO also cited another Roxas company, Green Dreams Holdings, where both Roxas and de Ocampo are directors, as having secured another P35 million for a real estate project in Cavite "whose collateral has likewise been bloated."

In addition, the group says, Roxas is not really a dependent of a veteran, his father being a former education superintendent. Therefore, the veterans argue, Roxas has no legal right to sit in the Veterans board. Roxas, however, says his father was indeed a veteran, and that he is doing his father's fellow soldiers a service by his work at the bank.

Included in the case against Roxas is Pilarica Ejercito, sister of former President Joseph Estrada, who was appointed Veterans Bank director sometime in 1999. It was during that time that the Central Bank was conducting an examination of the PVB's practices. The Central Bank's report made note of certain unauthorized expenses and questionable practices but on the whole gave the Veterans Bank a clean bill of health.

CREVO says its case is gathering dust at the Ombudsman since it was submitted there in 2002.

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