Agarwood takes center stage at Ho’s trial. Why?

Ho Chio Meng

Pieces of agarwood have been taking center stage in the trial of former Public Prosecutor General Ho Chio Meng.

The wood, originating from a seizure by the Macau Customs Service in mid-May 2013, has always been involved in the controversy since it arrived in Macau and caught the interest of Ho. The agarwood was then transferred from the Customs Service to the Public Prosecutions Office’s possession and, allegedly, as the prosecutor tried to prove in court, was then misappropriated by Ho as he had used it as decorative items in his office, home and other venues.

But why is this wood so important? In May 14, 2013, the Customs Service held a press conference announcing the seizure of over 1,800kg of agarwood worth between MOP71 million and MOP218 million.

At the time it was said that the imports were legal and had the proper licensing from the Macau Economic Services (DSE), which is a requirement since the wood is part of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The Customs Service had been keeping tabs on the cargo that arrived from Indonesia via air in five different shipments and had been kept in a warehouse on Pier 23 in the Inner Harbor for over a month.

The same spokesperson explained, at the time, that they found the importing of such large amount of the precious wood suspicious, having considered that the local market could not possibly absorb such a quantity.

The authorities then decided to intervene when three people, including the warehouse manager, were loading 274kg of agarwood onto the sampan, with Customs officials claiming that these boats would most likely next head to the mainland. The precious wood was about to enter China illegally since, “agarwood is listed in mainland China’s second level of protected goods. It’s not easy to import [it] and needs to be taxed.  It’s one reason why they were smuggling it [through Macau],” the Customs Service’s spokesman explained.

Agarwood is often named “the wood of gods” or “liquid gold” (in relation to the essential oil that can be extracted from it and that it has a market value higher than gold). About one year ago the news outlet Al Jazeera focused on the topic, taking the happenings in the neighboring territory of Hong Kong as an example.
In the report, the media outlet notes the efforts of the conservationists to save the tree species from becoming extinct.

The wood and the tree’s oud oil or resin are highly valued not only for its uses as traditional herbal medicine, but also for its aromatic fragrance, which is used in incense and perfume.

The report shows that the “surging prices are driving new demand, with the oil fetching higher prices than gold,” and Hong Kong and other regions in Southeast Asia being targeted by loggers since the “tree is now all but wiped out in China.”
“A piece [is] on sale at a shop very close to here […] valued at USD1 million for an agarwood bracelet. You can buy loose chips here in Hong Kong,” said Gerard McGuirk of Asia Plantation Capital, a company that is striving to farm the tree for commerce in order to save the ones in the wild, especially in the rainforest regions of Indonesia, Malaysia and Borneo.

“They can be anything from HKD100,000 per kilo upwards depending on the quality. So the demand and expense is great,” he added, stating that Asia Plantation Capital hopes [with their farms and efforts] to replace the illegal trade by feeding the market and the related industry with similar quality products but without huge damage to nature.

According to the Singapore-based company, it is estimated that the market is worth up to the equivalent of MOP96 billion a year.

The same company says that the agarwood market, whether for oil, woodchips or medicinal use, is growing rapidly.

The latest records from CITES indicate that the recorded global trade in oud oil in 2012 was 4,870 litres, a 1,512 percent increase in volume from 2004.

Key importers of such goods include countries such as Saudi Arabia, the United Arab Emirates, Malaysia and Bahrain.

At the same time, the latest records from trade statistics for international business development (TradeMap) indicate that recorded global trade in agarwood chips and powder in 2013 was 4.7 million kilograms, an 878 percent increase in volume from 1995 (the year that “Aquilaria malaccensis” was included on CITES list of the endangered species). In this particular year, the key importers include countries and territories such as Singapore, China, Taiwan, Saudi Arabia and the United Arab Emirates.

Another related company “Sustainable Asset Management” (SAM) estimates the same value for world trade (MOP96 billion per year) with much of the trade being made “undocumented and without required CITES certification.”

The company that records oud oil retail prices on a quarterly basis, tries to provide a complete picture of prices, both regional and country-specific, by collating current market retail prices from as many sources as possible.”

According to the latest surveys, the current price for this wood’s oud oil is set around MOP304,000 per liter.

The same source also notes prestigious brands that use this oud oil in some of their perfumes and cosmetics products such as Gucci, Dolce & Gabbana, Tom Ford and Christian Dior.

Its value is also highly increased by its new medical applications not only on traditional Chinese medicine but also as a highly in-demand product for respiratory treatment and in the research for cancer treatments.

This form of wood is also widely used as gifts and in ceremonial practices (both religious and secular) all over the world. It is also carved into sculptures, beads and boxes.

‘Missing’ wood kicked-off Ho’s case

During several testimonies of witnesses during the trial sessions at the Final Appeal Court (TUI), the agarwood was mentioned and widely questioned but in at least two of these sessions, it became clear that the pieces of this valuable wood that disappeared from the MP’s storage room were then found or seen by witnesses in several venues used by Ho Chio Meng for his personal life. That was, in fact, one of the main reasons which led to the presentation of the first complaint to the Commission Against Corruption (CCAC).

It was also mentioned in court that only after Ho’s first hearings at the CCAC,  some of the wood pieces were returned to the MP storage, an episode in which the court heard different versions of the same story from the prosecutor and  Ho.

For the prosecutor, the wood was “left at the door of the MP storage room with no record of who left it there,” while the former Public Prosecutor General addressed the court on at least two occasions to remark that it was he who had personally returned the wood pieces in his possession and they were delivered properly to MP staff who had signed a note stating the return of the goods.

In mid-February, judge Song Man Lei, one of the three judges judging the case, informed all the parties that, after a further investigation regarding this case, the court had decided to add additional facts.

In particular, it was noted that one agarwood case was completely handled by prosecutor Wu Hio, while another was jointly handled by Wu and a second prosecutor Lao Ian Chi, clarifying also that Ho did not interfere in either of those cases and that no written records could be found regarding the MP which indicated otherwise.

In court, the prosecutor also wanted to know where  the “other missing pieces” of the agarwood were since not all of it has been returned.

In trial, Ho replied to the question stating, “we threw it away. It was full of bugs.”

Also in a previous session of Ho’s trial, it was said that the MP would have ordered the burning of at least a piece of this wood that would allegedly be contaminated by insects and/or mould.