Approximately 90% of industrial wood worldwide is harvested under concession agreements. Failure to resolve the problems with forest concession operations has encouraged unclear or wrong management decision making, which has resulted in changes to the forest cover. Cambodia was chosen as a case study. The aim of this report was to examine the current problems with forest concession management, which is very important for present and future policy-decision making. Cambodia currently has 10.6 million ha of forest cover; 4.7 million ha of which are managed by forest concessions. Owned by multi-national corporations, forest concessions play a vital role in economic development in Cambodia, whilst at the same time they protect the forests from illegal encroachment. However, illegal logging and over-exploitation of forest resources were regularly reported to have taken place both inside and outside the concession areas. Wood production in Cambodia in 1997 was 3.4 million m^3 (5 times higher than the sustained yield rate), 68% of which came from illegal logging. Various unofficial payments imposed on forest concessionaires and high logging production costs have put logging operations in Cambodia in a position of losing $ 33.43-76.45/m^3 of veneer at the current veneer market price. Additionally, due to the intensive illegal logging, approximately 10%, 50% and 40% of operable forests will be logged out in 10-15 years, 5-10 years, and less than 5 years, respectively. It clearly showed that a forest industry crisis will be likely to occur in the next 15 years from now. The lack of clear land use policy, mapping, boundary demarcation and law enforcement encourage illegal logging and corruption in the Cambodian forestry sector. Therefore, all these aspects must be addressed to bring the remaining forests under sustainable use and management. Since illegal logging activities involve various parties, full cooperation from individual, local, national and international institutions is required. Additionally, a pilot project on forest concession management should be initiated to provide the right direction for future management decision making.
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