During the Asia-Europe Meeting in Helsinki last month, President Arroyo approved the revival of the government’s co-production agreement with Shannalyne Inc. and the governments of Finland and New Zealand.
Mrs. Arroyo is eyeing the launch of the project this December, in time for the scheduled Manila visit of New Zealand Prime Minister Helen Clark.
The revival of the Shannalyne project is said to be among Mrs. Arroyo’s accomplishments in the Asia-Europe Meeting, together with the controversial Japan-Philippines Economic Partnership Agreement (JPEPA), which she signed with former Japanese Prime Minister Junichiro Koizumi.
Former Environment and Natural Resources Secretary Heherson Alvarez said the Shannalyne project slept for around five years for "unknown reasons."
It was Alvarez who signed the co-production agreement with Shannalyne on behalf of the government on Dec. 8, 2001.
New Zealand Ambassador Terry Baker and Finnish Ambassador Raimo Anttola signed the agreement on behalf of their respective governments, while Cheow Teck Tan signed for Shannalyne.
"The Shannalyne project is legal and is already consummated and only needs to be implemented," Alvarez told The STAR.
He said the industrial timber plantation will be put up in public forest lands within the Caraga Forest Plantation Corridor, which was established under DENR Administrative Order No. 99-13.
Specifically, the project area will be in the municipalities of Loreto and San Luis in Agusan del Sur.
Wood-processing facilities will subsequently be put up within the special economic zone to be known as the Shannalyne Technological and Environmental Park, which was created and declared as such under Proclamation No. 17 issued by Mrs. Arroyo on March 12, 2001.
The project, according to Alvarez, initially seeks to reforest denuded lands in Mindanao, allow the country to be self-sufficient in wood/timber needs, establish the Philippines as a leading timber-exporting country, and create jobs.
Through nurseries using cloning technology, the project will also rehabilitate much of the country’s denuded forests and critical watersheds, increase the carbon absorption capacity of forests, and enhance the protection of the country’s rich biodiversity.
Alvarez said timber plantation scientists from Finland, who are considered experts in sustainable forest management, are coming over to join their Philippine counterparts to package the program.
Alvarez, presidential adviser on agrarian reform, said the project will involve at least $1 billion in investments to the Philippines.
This, Alvarez said, will include the dredging of the Nasipit port in Carmen, Agusan del Norte, the project’s "export site," where ocean-going vessels will be allowed. A railroad system linking the port to the project site will also be constructed.
"The co-production agreement will launch a sustainable agro-forest program designed by Finland’s world-famous consulting firm, Yakko Poyry, which has already undertaken millions of hectares of agro-forestry in Brazil and even in Finland," Alvarez said.
He said the government entered into the project due to the scarcity of wood raw materials resulting from the rapid depletion of the country’s forest resources.
This scarcity has forced the country to import wood and wood products to augment local production, he said.
When the co-production agreement was signed, wood imports accounted for more than 50 percent of domestic requirements, he said.
"The forest-based industry is a major contributor to the national economy, thus the development or utilization of the country’s forest lands and/or forest resources is necessary to accelerate," Alvarez said, quoting a provision of the co-production agreement.
Alvarez cited the Philippine Master Plan for Forest Development, which estimates that 1.9 million hectares of industrial forest plantations have to be developed by 2015 and that to meet the country’s wood requirements up to 2015, some 544,000 hectares of industrial timber plantations have to be established.
The Philippine Master Plan for Forest Development was designed by the Asian Development Bank and approved for implementation in 1990.
It aims to establish and develop high-yield forest plantations as stable sources of raw materials for wood-based industries.
It also aims to provide a base for downstream industries for both domestic and export markets, and establish industrial plantation zones that will be potential areas for local and foreign investments.
The master plan also serves as an environmental protection measure against forest degradation and natural calamities.
Under the terms and conditions of the project, Shannalyne could plant only in open and denuded lands, brushlands, and in all areas with a basal area per hectare of five square meters or less, in accordance with its approved Comprehensive Development and Management Plan (CDMP) covering the project area.
Shannalyne is also limited to planting principally timber-producing species compatible with the ecological and biophysical characteristics of the project area, but not excluding rubber, durian, and non-wood species like rattan and bamboo.
In addition, the company is supposed to follow an annual planting schedule, as prescribed in its CDMP, and should plant its total "plantable area" in not more than 12 years.
Under the terms and conditions, the Shannalyne project should also have at least 80 percent survival rate of the required stocking density per species.
Shannalyne is said to have an established track record recognized by the governments of New Zealand and Finland.
Previous DENR secretaries have reportedly visited and verified Shannalyne’s vast industrial tree plantations in New Zealand.
Alvarez recalled that when negotiations for the project began in 1997, the Finnish and New Zealand governments requested that all transactions to be above-board to ensure the project’s transparency.
"The presence of these governments — both intolerant of any graft — guarantees the integrity of the contract and ensures the success of the reforestation program which will bring in much-needed investments," he said.
"If they see any indication of irregularity or graft along the way, they will pull out," he added.