China’s investment and trade in Africa’s natural resource sectors have significant implications for Africa’s forests. Many investments are in forested or woodland areas, some directly engage in logging and others, such as mining, infrastructure and agribusiness, use timber and affect forests. IIED’s China–Africa Forest Governance Project (CAFGoP) aims to develop evidence, capacity and joint action for improved Chinese investment in Africa’s forests. This study aims to contribute by mapping options for incentivising better practice among Chinese forestry companies and timber traders in Mozambique.

In the forestry sector, China has become a major export destination for timber-rich African countries in the...

Concerns over future resource access and stewardship are likely to be a powerful driver for the behaviour of Chinese timber traders, concession holders and their Mozambican partners. Deciding who gets what resource rights is, therefore, a crucial lever to improve forest practice. In Mozambique, as across many African countries, resource rights can be secured through local standards of legal, customary, informal or outright illegal practice (Weng et al., 2014). The way in which resource rights are allocated to Chinese timber traders, concession holders and their Mozambican partners is therefore a key point of engagement that might be used to improve...

Concerns over the future profitability of the timber trade are a second important driver of practice for Chinese timber traders, concession holders and their Mozambican partners. Shaping revenue flows is therefore a second important lever that can be used to improve forestry practice – rewarding companies that improve economic, social and environmental impacts. In remote rural areas, managing natural forest-harvesting operations is a precarious business – with considerable logistical issues and costs associated with operational planning and implementation. Mozambique is no exception.

Within Mozambique, studies of timber-harvesting profitability are few and far between. Fath (2001) studied five small timber companies...

Concerns over conflict-free relationships with local people, other operators and government authorities are a third driver for the practice of Chinese timber traders, concession holders and their Mozambican partners. One of the principal difficulties in dealing with Chinese timber traders, concession holders and their Mozambican partners is that outside of concessionaires, the actors involved are dispersed and unorganised – both on the side of the Chinese timber traders, and on the side of the Mozambican simple licence operators.

One potential set of levers to improve the practice of those operators might be to strengthen the organisation of business associations and...

Concerns over the security of the operating environment for timber extraction within Mozambique are likely to have a profound effect on the behaviour of Chinese timber traders, concession holders and their Mozambican partners.

Since the publication of the Forest and Wildlife Act of 1999 (Republic of Mozambique, 1999) and the subsequent law regulations of 2002 (Republic of Mozambique, 2002) that laid out the requirements for concessions and simple licences and the taxes on different categories of species, there have been several changes in legislation affecting the security of the operating environment. For example, consultant analysis of the tax regime recommended...

Concerns over operating efficiencies are likely to provide a further lever through which to improve the practice of Chinese timber traders, concession holders and their Mozambican partners. Recent reviews of the actual situation of the forest industries of Mozambique (Savcor, 2005b) demonstrate that the vast majority of workers in the Mozambican forest industry have no formal education at all (95 per cent in Sofala, 99 per cent in Zambézia and 91 per cent in Cabo Delgado) and only one operator in Cabo Delgado had a higher (university-level) education. This reality has implications for the sustainability and operational efficiency affecting Chinese...

Concern over reputation with customers (brand identity) is a further area within which to create incentives to improve the practice of Chinese timber traders, concession holders and their Mozambican partners. It is well known that there are multiple dimensions to the information that customers link with a particular brand. These include awareness of the company and its products, awareness of attributes associated with company behaviours and products, personal values that people attribute to those behaviours and products, visual images that they associate with the former, thoughts and responses to those images, feelings that result, and finally, summary judgements about whether...

Improving the practice of Chinese timber traders, concession holders and their Mozambican partners has often been approached through the limited lens of better law enforcement. While better law enforcement is certainly one option for addressing these issues, and indeed one that most Mozambican forest experts support, there are a large range of other options to incentivise better practice. Stimulating a constructive discussion about what these other options might be is the main purpose of this report.

The underlying rationale for this broader discussion is that Chinese and Mozambican timber businesses, like any other businesses, are seeking to achieve particular objectives...