An example from a developing country - Congo

Otto Schlumbohm
SOCOBOIS, Hannover

Introduction

Dolisie, a town of 60 000 inhabitants

Development of Dolisie between 1974 and 1996

The town of Dolisie is the administrative centre of the Niari region. It is situated about 200 km by road (poor driving conditions) to the north-east of the port of Pointe Noire.

Until 1972/73, Dolisie was the most important logging town in the Congo. It was an eldorado for forest enterprises and wood buyers at that time. The best year was 1971 when more than 500 000 m³ of logs were loaded at Dolisie's small railway station. Many companies were represented there and the town and the 25 000 inhabitants at that time enjoyed a real boom.

From 1974 onward, forestry activities began to stagnate. Little by little, one company after another closed its gates. The agents, the representatives of Caterpillar and Mercedez-Benz and a large number of forestry enterprises and carriers left the town.

Since then the town has been dying economically but experiencing an increase in the population which has now reached more than 60 000 inhabitants, being 2.6 times higher than in 1974.

Four of the five sawmills are closed, only one is working.

SOCOBOIS, situated at 6 km from Dolisie, is the only company that developed in this area.

The socio-economic problems that exist in Dolisie can also be found in the rest of the country, as well as in most parts of the neighbouring countries.

From a maximum of about 4 400 regular employment contracts 10 to 15 years ago, there are now only about 2 600 to 2 700.

In 1983, for example, a new 250-bed hospital was opened, equipped with the most up-to-date technology at a cost of US$ 25 million. Unfortunately, no plans had been made for a revolving fund or to train the technical and medical staff. The present state of the hospital can be imagined.

It should be noted that the town of Dolisie or the Niari region have no regular income since all taxes, dues and duties go to the capital, Brazzaville. Only with difficulty a small share returns to Dolisie. As a result, the people and the town live on the workers' wages and it is hardly surprising that a SOCOBOIS employee may be financially responsible for more than 20 people.

Except from SOCOBOIS, there are no major industrial or other activities and opportunities for employment.

Dolisie is the third largest town in the Congo with 60 000 inhabitants, after the capital Brazzaville with 950 000, and the economic and port town Pointe Noire with 500 000 inhabitants, all three together have 60 percent of the national population which is 2.5 million people. Considering the other small towns, the Congolese urbanisation, with more than 70 percent, is the highest in Africa reflecting the very poor rural development.

Some figures may give a better understanding of the national situation:

Congo area:	342 000 km2, of which 62 percent is covered by forests, mostly dense.
Population:	2.52 million in 1994 which is 2.6 times more than 20 years ago, and certainly 4.0 million in 2014.
GDP:	Approximately US$ 580 against a global dept of US$ 2 100 per capita.
Employment:	105 000 productive jobs and 22 000 officials in 1974, but 78 000 productive jobs and 80 000 officials in 1994.

In 1974 there were 111 productive job contracts for every 1 000 inhabitants but only 31 jobs in 1994.

Other problems related to the socio-economic situation of the country, and also of Dolisie, are: poverty; malnutrition; hygiene; drinking water; health service; pharmaceutics; basic education and vocational schools; degradation of all kinds of infrastructures like water, electricity, telephone, roads (only 560 km of the existing 12 000 km are tarred); railway; and the Congo river waterways including harbours.

Eighty percent of the food is imported at a cost of US$ 130 million per year, whereas during the 1960s Congo was a food exporter.

Presentation of SOCOBOIS

The Société Congolaise des Bois SARL, Dolisie, Republic of the Congo, was created in 1964.

Wood processing factory

· over 800 workers (650 in the factory, 180 on the forest site);

· processing of 70 000 m³ logs/year, of which 30 000 m³ is bought from more than 20 other forest enterprises in the region, into sliced and peeled veneers, plywood and sawnwood.

SOCOBOIS does not export logs, it processes all the logs produced by the company in its forest concessions and purchased from others in the region.

SOCOBOIS investments

1964	Creation of the Company, Shareholder: Gerhard Wonnemann, a German company in Westphalia
1965	Installation of the first peeling line
1968	Installation of the second peeling line
1972	Logging
1977	Installation of a sawmill
1981	Installation of the first slicing line
1984	Large expansion of the veneer jointing section
1986	Panel wood drying shed
1989	Installation of the second slicing line
1991	Installation of the plywood production line
1994	Large-scale modernization of the peeling lines
1995	Replacement of forest material

All investments were realised step-by-step when the previous problems had been solved, such as staff training, product quality and quantity improvement, productivity and cost coverage. Not to mention the many problems related to local administration and transportation on road and railway which have delayed and hampered enormously our ambitious investment programme.

Activities

SOCOBOIS output, 1995

	Export	Output
Logs (m3)	0	42 500
Sawn timber (m3)	3 077	11 440
Peeled veneer (m3)	22 514	22 700
Sliced veneer (m2)	7 360 000	7 450 000
Plywood (m3)	2 307	3 500
Total log processing (m3)		70 200

One socio-economic activity with high relevance to environment protection is the production of charcoal from wood processing residues and firewood from bark. The wood residues are given free of charge to the workers and the population of the town. The annual amount of firewood and charcoal used in households is estimated at 4 000 m³ what is the equivalent of 50 000 savannah trees which would normally be cut every year by the population for their energy needs.

SOCOBOIS brings know-how, technology and money to the country and the region.

Staff, training, qualified workers/technicians

It took a long time for SOCOBOIS to have well trained technical staff and qualified workers as there are no vocational training schools for the woodworking sector. As a result, SOCOBOIS has to employ a large number of expatriates working as foremen and section chiefs in the production and as trainers at the factory, in the workshops and at the forest sites.

The ratio between expatriates and nationals has fallen from 1 : 23 in 1965 to 1 : 60 in 1996.

Increase in staff numbers

	1965	1970	1975	1980	1985	1990	1995	2000
SOCOBOIS workers	150	210	300	545	575	700	830	850
Services	10	20	30	60	145	175	190	200
Total	160	230	330	605	720	875	1 020	1 050

SOCOBOIS-related services are charcoal burners, guards, artisans, school teachers, health services, etc.

In Africa, the family still plays a very important role in social life. Anyone with a regular salary, for reasons of tradition and customary solidarity, is obliged to share it with family members.

And in Africa, the family is very “elastic” and numerous especially when poverty calls for support from more wealthy family members.

I am not a sociologist, but I have always carried out and commissioned surveys amongst the workers on their problems and their daily priorities. Given the financial and salary situation in the country in general, it is not surprising to see that each of our employees is, on average, supporting 21 people, taking care of medical costs, children's school expenses, etc.

The increase in this burden reflects the country's population and poverty growth.

	1965	1970	1975	1980	1985	1990	1995	2000
SOCOBOIS workers	160	230	330	605	720	875	1 020	1 050
Dependants per worker	6	8	11	12	14	16	21	?
Dependent on SOCOBOIS	960	1 840	3 630	7 260	10 080	14 000	21 420	??

The increasingly high dependency rate of people from one earner in the family is typical of poverty in Africa and of course in the Dolisie region.

In conclusion: at least a third of the population of Dolisie depends on SOCOBOIS' industrial activity.

Income-generation in Dolisie

The following table shows the high share of income generated by SOCOBOIS workers which is more than 64 percent compared to the total income of all those employed in the town of Dolisie.

	Employment contracts	US$/year/ worker	Total US$/year
SOCOBOIS	830	5 060	4 199 000
SOCOBOIS-related services	190	3 000	570 000
Administration, State and Town	1 000	2 400	2 400 000
Other services	655	2 700	1 768 500
Total	2 645	13 380	8 938 300

Contribution to public finances in US dollars

Year	Industry	Forest	Total
	SOCOBOIS	SOCOBOIS	SOCOBOIS
1991	2 054 161	880 355	2 934 516
1992	2 203 600	944 400	3 148 000
1993	2 259 600	968 400	3 228 000
1994	2 592 800	1 111 200	3 704 000
1995	2 549 400	1 092 600	3 642 000

Assessment of the impact of wood processing

A brief summary of the important socio-economic role of forest industry in Dolisie, the region and the country as a whole, allows us to appreciate the general impact of log processing in the country.

But, more than 50 percent of the 600 000 m³ of logs produced annually are still exported in the rough form. Their processing in the country would provide more employment and general income as demonstrated by the following example.

Employment

To each forest worker, 1.5 to 3.5 factory workers must be added, depending on the type of processing. In the case of SOCOBOIS, the factor is 3.6 in the factory (180 on the forest site, 650 in the factory).

Logging in the Congo: 600 000 m3 / year divided by 150 m3 / year / man	= 4 000 jobs
100 percent processing in the Congo: 4 000 x 2.5 men per logging worker	= 10 000 jobs

If all processing were to be done in the country, instead of the present 8 000 jobs, the Congo would immediately have 14 000 jobs without counting any jobs which are secondary to industrial activity, this means 6 000 more jobs.

Added-value contribution to the country

Year	Percent	Added-value US$
1991	54.1	9 736 000
1992	41.7	7 272 000
1993	49.5	7 916 000
1994	62.4	11 374 000
1995	62.8	11 400 000

Financial results by m³ of logs

These results depend on the level of processing, yield, wood quality and also staff quality, species and market.

The value-added by processing, per m³ logs equivalent, is higher than that earned by simply exporting the logs.

In the case of SOCOBOIS, we can demonstrate that 1 m³ of processed logs earns, on average, US$ 100 per m³ more.

Processing = greater added-value. Higher currency earnings

Direct and indirect taxes, dues, customs duties, etc.

The tax department profits directly and indirectly from industrial activity. In the case of SOCOBOIS, only as regards industry, it takes over 20 percent of the turnover.

What would Dolisie's socio-economic situation be like without SOCOBOIS?

If, for reasons beyond SOCOBOIS' control, the factory had to close, what would happen in Dolisie?

The list below answers this question:

· About 1 000 more unemployed people;
· people in Dolisie without financial assistance;
· About US$ 10 million = CFA 6 000 000 per year less in the region;
· Felling of a greater number of trees for firewood around Dolisie;
· Trade, the hospital, pharmacies, artisans, etc., would see their turnover halved;
· Taxes on turnover would fall proportionately.

In short, the closure of the company would be a disaster for the region and for the whole national economy.

On the other hand, the example of SOCOBOIS should encourage other companies to abandon log export in favour of local processing.

It seems to me that these facts are convincing evidence of the positive and important socio-economic role of a forest industry.

Forest activities

Our principle is rational management and sustainable use of the forest, respecting the laws in force and the regulations for Forest Code implementation. The case study carried out by FAO two years ago on environmentally friendly logging practices provided us with some useful recommendations on how to improve our forest operations.

SOCOBOIS has signed a contract with the government to establish a Pilot Development, Reforestation and Agroforestry Programme. But sustainability in forestry can only be achieved if we have the full long-term rights on the forest area. This is why we have requested a lease on the land for 99 years or the length of the company's life. Without land rights there can never be sustainable development.

Certification and sustainable development

In principle, we are interested in a strict certification system as long as this does not imply costly formalities and bureaucracy and it improves our sales (prices) on the world market.

How can we certify the products when the logs which are purchased from other companies are not coming from certified forests?

Is certification a mode?

Is certification a must, and with what result?

Is certification a means of creating jobs for the “experts”?

Certification is chancy in that it will force forestry enterprises and forest administrations to accept the rules of sustainable development.

But let us not forget that it took Europe and the other continents a very long time to reach today's standard, a standard which is still being questioned by some experts.

On the basis of my experience in Africa, everything takes twice as long and, in practice, it will be a long, hard job to train and convince people in the field.

Therefore, the principles, criteria and indicators to be established and applied must take into account the people who work in the field. It is them who must be convinced to work better today so as to pave the way for the future of their grandchildren.

Recommendations

A world inventory of tropical forest resources with the assistance of the World Bank, using modern systems.

Coordination and monitoring of all activities at world level to achieve sustainable forest management.

Coordination of criteria, practicable in Africa, for the certification of forest products at world level.

Incentivation of industrialization and privatization which, in the long term, mean:

Employment - added-value - development

On the occasion of the Conference on the Ecosystems of Central African Dense Rain Forests, I proposed that, while taking into account the regional differences, not only minimum diameters but also maximum diameters should be respected. We must protect trees of large diameter and list them as “national monuments”.

Summary

Forest industry creates jobs through processing and this confirms its socio-economic role. Industrialization, above all in the rural areas of developing countries, is an indispensable support to the infrastructure and counters poverty and malnutrition.

Industrialists are making long-term plans and investments for 20 to 50 years. In many cases, an industrialist may be a better partner for a developing country than a good number of bilateral cooperation projects, which are very often short-term projects.

We are an industrial company and we must realise that we cannot perform miracles, nor reduce poverty in general.

Our work must be coordinated with the efforts of governments, international institutions such as the World Bank, international cooperation, GTZ, potential investors, university researchers, etc.

It would be desirable that there were many more contacts in the future between the above-mentioned institutions, because it is only through joint efforts that the developing countries can hope to see a substantial improvement in their socio-economic, employment and infrastructure situation.