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LILONGWE-(MaraviPost)-The Reformed Timber Millers Union (RTMU) is owing Malawi government MK102 million debt accumulated over the years and only planned to plant trees to about 30 hectare (5 hectares in the last season) but failed against the March 2020 signed a concession agreement.

This is surprisingly considering the planned vigil the union slated for capital hill offices in August this year.

In the signed a concession agreement, RTMU was tasked to plant trees for 4,000 hectares.

This was one of the “conditions precedence” for operationalisation of the agreement was that RTMU will develop and submit a Sustainable Forest Management Agreement Plan within 6 months.

This has not been done to date but instead the union resort for vigil arguing that government is preferentially giving business to foreign-owned companies and traders in the Viphya Plantation by not awarding indigenous Malawians more land, destruction of trees in foreign concession areas, due to the failure by the foreign companies to manage them and preferential treatment towards the foreign companies.

They further denounce authorities at the ministry for alleged unfair conditions in the new Raiply Concession Agreement document, particularly on User Rights, different rates being used for Raiply and RTMU for harvested wood, and being selective when enforcing the rules (example of Mulli Brothers who are operating without a License).

Additionally, RTMU is accusing officials in the government of offering the trees it planted to other operators such as Alliance One Tobacco Malawi Limited and Mulli Brothers for harvesting and not giving additional land with mature and deadwood from the Raiply Concession Area for RTMU to harvest and benefit from.

But addressing the news conference on Wednesday, July 22, 2021 in the capital Lilongwe, Director of Administration in the Ministry of Forestry and Natural Resources, Hilary Namainja, dismissed the accusations as misplaced and representing the true reflection of the situation on the ground.

Namainja counter-accused the union of not committing itself to replant harvested sites, pay upfront for harvested trees and carry out replanting and care of trees in their concession area as it was at the recent meeting RTMU held with the ministry.

He added that government committed to recommend to treasury to consider supporting the Union by writing off some of the long-outstanding debts, upon RTMU adhering to the above commitments.

Namainja said, “Unfortunately, RTMU has not made any commitments, even though this is also a key condition in the operationalisation of the signed Concession Agreement. So far, as RTMU, the union has planned only about 30 hectare (5 hectares in the last season) and has accumulated an outstanding debt of about MK102 million.

“Concerning the allegation that Mulli Brothers Limited are harvesting trees without License, the ministry said license for which the company is using expired in December 2020, and that the company obtained a court Injunction from the Supreme Court to stop the Department of Forestry from taking any action against it in the Viphya Plantation. The office of the Attorney General is handling the matter.

Namainja disclosed that other private operators in the Viphya Plantation include Total Land Care, AKL Timbers, CPI, Pixus and six local small scale concessionaires that have planting trees in areas that are largely bare.

“Currently, there are no trees for harvesting in the government areas in the Viphya plantation. Government is in the process of engaging the private sector to plant trees in the bare areas,” he said.

Namainja therefore appealed to the leadership of RTMU to consider cancelling its planned vigil and give room to dialogue with the ministry.

But RTMU president Paul Nthambazale Nyirenda vowed that they will go ahead with their vigil because the government has not been honest in its dealings on the matter.

“We are going ahead with the vigil and preparations are at an advanced stage,” said Nthambazale Nyirenda.

Background

The Viphya plantations were started in the 1950s.  After independence 1964, there was massive drive to grow more trees for the paper making industry.  The planned was at Chintheche in Nkhatabay. 

However, in the 1990s there was worldwide concern about pollution which led to finances pulling out. VIPLY was given 9,000heactares to manage the industrial components of the Viphya Plantation.

In the late 1990s, the Malawi Government secured funding, to establish a parastatal company, called the Viphya Plywood and Allied Industries Limited (VIPLY).  The government decided to privatise part of the Viphya Plantations.

In due course, Government decided to attract a competent private investor through the privatization process, and VIPLY was sold to Rai Company of Kenya, which renamed it “Raiply Malawi Limited” in November, 1998 after floating an international tender.

In February 1999, Raiply Malawi Limited signed a Forest Logging Concession Agreement with the Malawi Government, to manage 20,000 hectares of the Viphya plantation and was granted exclusive rights to fell, extract and convert wood within the concession area and to replant harvested areas. The agreement gave room for amendment of the conditions, whenever the Parties decided that was necessary to do so.

Raiply has now replanted nearly 10,000 hectares of the bare and harvested sites and employs almost 2300 people (1700 permanent). By the end of the last forest season, only about 730 ha are bare in the concession area.

The remaining 33,000 hectares of the Viphya Plantation was held for licensed Malawian loggers for sustainable harvesting.

The Reformed Timber Millers Union (RTMU) were originally Timber MillersCooperative Union (TMCU), which was and umbrella union of seven cooperatives, thus Chamatete, Chibwaka, Kalungulu, Lusangazi, Luwawa, Viphya, Zikomo, that were licensed to harvest trees in the Viphya plantation.

In 2011, TMCU entered into a Forest Management Agreement (FMA) with Government for the sustainable management of 10,000 hectares of Viphya Plantations for a period of 15 years.

Sadly, the operations of TMCU were marred with problems and irregularities due to overharvesting, failureto replant harvested sites and accumulation of unpaid bills from royalties. As a result, the Department of Forestry decided to terminate the agreement in 2015.

TMCU immediately challenged the decision and obtained a court injunction. The Court ordered an arbitration process. During this period, many TMCU members continued to harvest large parts of the Viphya Plantationwithout replanting, using Court Orders that were issued by the courts in Mzuzu and Mzimba.

In 2016, the then Minister of Natural Resources, Energy and Mining, directed that a fresh agreement be developed with the union, which was renamed the “ReformedTimber Millers Union (RTMU)”, on understanding that this will enable the union to settle outstanding debts and replant harvested sites.

In 2017, RTMU and Government jointly drafted a Forest Management Agreement, with fresh conditions, including reduced area of the concession from 10,000 to 4000 hectares and reduced number of members to 35. RTMU submitted a schedule of debt repayment and a 10-year Forest Management Plan, detailing a sustainable harvesting and replanting schedule.

The Private Public Partnership Commission (PPPC), Government Contracting Unit (GCU) and Treasury reviewed the draft Management Agreement document and expressed some reservations.

The PPPC recommended a thorough scrutiny (including capacity and feasibility analysis), prior to signing of the Agreement). The Department of Forestry rejected applications from RTMU for harvesting rights, before a fresh agreement was signed.

In May 2018, RTMU was registered as a company and signed an agreement with TMCU to take over all responsibilities and obligations.

The then Minister, directed that while vetting of the draft agreement was in process, a special licence be issued to RTMU for harvesting trees in a restricted manner.

A licence was therefore issued for harvesting Eucalyptus trees in compartment Z95A only, for a period of one year in 2018.

Unfortunately, by April 2019, all major conditions of Licencewere violated by RTMU, such as non-payment of royalties, insufficient replanting in harvested sites and non-settlement of debt in accordance with the agreed schedule.

In March, 2020, RTMU signed a concession agreement for 4,000 hectares. One of the “conditions precedence” for operationalisation of the agreement was that RTMU will develop and submit a Sustainable Forest Management Agreement Plan within 6 months which has not been fulfilled update.

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