From grbarry@students.wisc.edu Thu Nov 30 22:09:15 2000
Date: Sun, 26 Nov 2000 21:20:20 -0600
From: Glen Barry
Subject: BIOD & PNG: NGOs Call for Forest Industry Reform
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WORLDWIDE FOREST/BIODIVERSITY CAMPAIGN NEWS
Papua New Guinea NGOs Call for Forest Industry Reform
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Forest Networking a Project of Forests.org, Inc.
http://forests.org/ -- Forest Conservation Portal
http://forests.org/web/ -- Discuss Forest Conservation
11/26/00
OVERVIEW & COMMENTARY
A major rainforest policy crisis is once again brewing in Papua New
Guinea (PNG), home to the World's third largest remaining rainforest
expanses. The Government of PNG and the World Bank are backtracking
on commitments to maintain a moratorium on new logging concessions.
This despite continued predatory logging practices that are
decimating forests at the expense of local peoples.
The moratorium was put into the conditionality of the Structural
Adjustment Loan in 1999, and the Government of PNG and World Bank had
agreed that it would remain in place until a full review of logging
concessions had been carried out. That review has not taken place,
and yet the Bank is preparing to make a disbursement of the second
tranche of the Structural Adjustment Loan, as well as preparing a new
Forest Sector loan. This new forestry project seeks to yet again
reform the timber industry - putting its faith in reforming
industrial log export rather than opening up forest management to
other more appropriate and sustainable types of community based and
certified production. Shockingly, this major new investment by the
Bank does not mention or include conditionality to support the
moratorium. The moratorium is vital for preventing harm to PNG's
communities and forests, and to achieving meaningful forest reform
and improved governance in the country.
And make no mistake, the PNG forest sector is in shambles, as the PNG
Eco-Forestry Forum, a coalition of PNG and international NGOs,
reports below:
"The Forest Industry in Papua New Guinea is frankly in a mess. It
appears that the logging companies are still being allowed to
destructively harvest the forests with no concern for basic
environmental standards, infrastructure and other obligations are
being ignored, taxes are not being paid, transfer pricing is rampant
and the Forest Authority is unable to intervene. Bribery and
corruption still seem to be the accepted norm... ... It is our firm
belief that until these changes have been made and the structures and
capacity for their full implementation put in place there should be
no further allocation of forest resources or new operations allowed
to begin."
Later they conclude:
"The forest industry appears to be almost beyond reform. What is
needed is complete renovation... ... NGOs have been advocating for
the past 5 years that the policy emphasis needs to move away from
export logging to small and medium scale community based or
controlled downstream processing and other socially and
environmentally appropriate land uses. NGOs and representatives of
government bodies and the private sector have been working hard for
the past 3 years on national standards and criteria for Forest
Stewardship Council certification which have now been completed.
These set standards for socially, economically and environmentally
sustainable operations that are internationally respected and
independently audited. These National Standards should set the mark
to which all future forest operations should have to comply and by
which they should be judged."
Failure of the Government and World Bank to honor the commitment to a
moratorium, implement the review, and take corrective actions to
reign in the problematic industrial log export industry, represents
yet another failure to reform an industry that is irredeemable and
unable to change. For almost a decade and a half, there have been
repeated failed attempts by the Government of PNG, supported by the
World Bank, to reform the timber industry. All to no avail, as
business as usual - out of control log exports with little benefit
and substantial costs to the country - continues unabated. If the
moratorium lapses, some 25 new timber operations will continue to be
fast-tracked. This essentially dooms one of the last rainforest
wildernesses to industrial liquidation-rather than using these
resources for perpetuity to benefit PNG's peoples.
In order to prevent this backtracking and weakening of the
moratorium, the PNG Eco-Forestry Forum is renewing its call for
reform of the forest industry. They are calling for the continuation
of the current Moratorium on new logging concessions until reforms
are in place to deal with the many problems in the sector. In their
documents below, they do a wonderful job of reviewing the situation,
and laying out the necessary policy reforms required for a truly
sustainable PNG forest sector.
Forests.org fully supports these calls and will be working to
mobilize international support for local PNG calls for rainforest
reform and conservation. The attached press release and longer
background item from the PNG Eco-Forestry Forum are of excellent
quality, and are a must read for all PNG rainforest enthusiasts and
advocates. Expect to hear more on this surging and exciting PNG
rainforest conservation campaign. The Papua New Guinea Eco-Forestry
Forum can be contacted at: P.O. Box 590, Kimbe, West New Britain
Province. Tel: 983 5464 Fax: 983 5852 Email: teff@global.net.pg
g.b.
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RELAYED TEXT STARTS HERE:
ITEM #1
Title: NGOs Call for Reform of the Forest Industry
Source: Papua New Guinea Eco-Forestry Forum
Date: November 27, 2000
PRESS RELEASE
A coalition of non-government organisations is calling on the
Government to make some fundamental changes in the Forest Industry.
They are calling for the continuation of the current Moratorium on
new logging concessions until reforms are in place to deal with the
many problems in the sector.
Speaking as Chairperson of the Eco-Forestry Forum, Mr Sasa Zibe
Kokino said, "the Prime Minister has already admitted that the forest
industry is in a mess with poor practice, corruption and
unsustainable logging operations. We are now calling on the
Government to ensure that the necessary reforms are made before the
current Moratorium is lifted."
The NGO recommendations are included in their 'Submission on the
Forest Industry Moratorium and Reviews'; a document that was
presented to the Prime Minister today. The Submission contains an
assessment of the reasons behind the current appalling state of the
forest industry and sets out the changes that are needed.
The NGOs are asking for the Government to honour their promise of a
review of current forest operations and for the completion of the
current review of proposed new concessions. They also want to see the
recommendations from these reviews fully implemented together with
systems to prevent the same problems being repeated in the future.
The NGOs are also calling for a new and effective method of enforcing
the logging code of practice which, they say, is currently being
ignored. They also want to see a new National Forest Plan that
properly considers all land use options and reflects the wishes of
resource owners. The NGOs are also calling for an independent system
to ensure that forest management is truly sustainable and a change in
the focus of he Forest Authority from one of assisting loggers to
access resources to one of monitoring and controlling forest
operations.
The NGO Submission is the result of collaboration between eighteen
different national and international organisations and their local
partners. It has been developed over a number of months and has
included patrols to many remote areas of the country to gather the
views of resource owners and to assess current practice in the forest
industry.
As Mr Kokino explained, "We see the current Moratorium as a last
chance for our forests. The Moratorium must be maintained and
fundamental reforms implemented before it is lifted".
The Papua New Guinea Eco-Forestry Forum supports integrated rural
community development and sustainable resource use through a viable
and sustainable eco-forestry industry
ITEM #2
Title: The Moratorium on New Timber Permits, Extensions and Timber
Authorities; PNG Eco-Forestry Forum Submission to the
Government
Source: Papua New Guinea Eco-Forestry Forum
Date: November 20, 2000
Executive summary
This submission is presented to the Government of Papua New Guinea by
a broad coalition of organisations that work for rural community
development and sustainable resource use at the grassroots level.
This submission sets out a development of the ideas that were
outlined in a Preliminary Submission made in April 2000.
The Forest Industry in Papua New Guinea is frankly in a mess. It
appears that the logging companies are still being allowed to
destructively harvest the forests with no concern for basic
environmental standards, infrastructure and other obligations are
being ignored, taxes are not being paid, transfer pricing is rampant
and the Forest Authority is unable to intervene. Bribery and
corruption still seem to be the accepted norm.
Against this background the procedures for new resource acquisitions
are being largely ignored with the logging companies seemingly moving
at will into new forest areas. Where there has been an attempt to
follow the new Forest Management Agreement (FMA) procedures, the
Incorporated Land Groups have not been properly formulated, the
resource owners have not given their informed consent, Development
Options Studies are not being done and the need for full
Environmental Assessments seems to be being ignored. Often an
identified logging company is funding or supporting a process that is
meant to end in an open and fair tendering procedure.
It is against this background that non-government organisations and
the rural communities that they work with are calling for fundamental
change.
Change in the way that land use planning is approached, change in the
way that forest resources are allocated, change in the way that the
forests are harvested, change in the way that codes and regulations
are policed and enforced, change in the way that the Forest Authority
operates and an end to corruption.
It is our firm belief that until these changes have been made and the
structures and capacity for their full implementation put in place
there should be no further allocation of forest resources or new
operations allowed to begin.
In this document we set out our views on the problems that the forest
industry is facing, comment on the malpractice and poor management
that has gone into the development of many of the currently proposed
new forest concessions and set out what we see to be necessary to
halt the continued destruction of valuable resources.
In particular we urge that the current Moratorium on new timber
permits, extensions and timber authorities must stay in place until:
1. The recommendations from the Review of currently proposed forest
concessions have been fully implemented and systems put in place to
ensure that the same errors and omissions do not occur in the future,
2. There has been a Review of the legal instruments, financial
arrangements, company performance and harvesting practice in all
existing forest concessions and legally binding proposals and a time
frame for remediation agreed between the parties,
3. There is in place an effective method for implementation of
monitoring systems and of policing and enforcing the logging code of
practice,
4. There is in place an effective and independent system for
ensuring that forest management is socially appropriate and
economically and environmentally sustainable,
5. There is in place a funded and defined new National Forest
Planning Process that incorporates the views of all stakeholders,
provides a range of management options and which is transparent and
comprehensive,
6. The focus of the Forest Authority has been changed from one of
assisting loggers to access timber resources, to one of monitoring
and control of forest operations in line with truly sustainable
forest management practices
The current Moratorium, Review of Proposed Concessions and the Review
of Current Forest Operations may be the last chance for our forests.
We urge the Government and the Review Teams to honesty confront the
totality of the problem and not to be content to recommend sticking
plasters where major surgery is needed.
Sasa Zibe Kokino,
Chairperson, PNG Eco-Forestry Forum.
Contents
1. Introduction
2. Overview of the forest industry
3. Identified problems
* Government
* National Forest Board
* Provincial Forest Management Committees
* PNG Forest Authority
* Office of Environment and Conservation
* Logging companies
* Landowner companies
* Forest Management Agreement procedures
* Planning process
* FMA process
* Conclusion
4. Proposed new concession areas
5. Conclusions and recommendations
6. Appendices
* One: Report on the workshop for PFMC NGO Representatives
Prepared by the PNG Eco-Forestry Forum, August 2000
* Two: Lessons learned through tendering for the Josephstaal FMA
S. Brown and E. Mayer, The Nature Conservancy, July 2000
* Three: Environmental impact of logging operations in Wawoi
Guavi Peter Erskine. 1998
* Four: Vanimo - Kilimeri Interdisciplinary Research Report
Christen Kocher Schmid, April1999
* Five: List of proposed new forest concession areas
PNG Forest Authority, 2000
1. Introduction
This submission is made by the Papua New Guinea Eco-Forestry Forum on
behalf of its Members and Board of Directors.
The Forum has already congratulated the Government of Papua New
Guinea on the declaration of the Moratorium and the instigation of
the Review processes. We see the Moratorium and Reviews as an
excellent and timely opportunity to address the difficulties of a
troubled forest industry by undertaking a process of identifying the
problems, analysing their causes and implementing the necessary
changes to overcome them.
The forest industry in Papua New Guinea faces many serious problems
which are having major and long-term impacts on a whole range of
different factors, not least the quality of life of the current and
future generations of rural people.
The problems that have been identified include, but are not limited
to (and in no particular order):
* Lack of information given to landowners before they agree to
logging (a lack of informed consent)
* Unsustainable logging practices (almost complete failure to
implement or police the logging code of practice)
* Failure to properly identify resource owners through the
Incorporated Land Group process
* Failure of logging companies to fulfil permit obligations
* Lack of a national land use planning process and plan for PNG
* Lack of financial or other benefits from logging to local people
and their unfair distribution
* Lack of sustainable resource use (inappropriate rotation
lengths, failure to identify and protect representative conservation
areas)
* Failure to follow even the currently inadequate project
development guidelines
* Lack of proper processes in development of the National Forest
Plan and a failure to adhere to the Plan
* Overemphasis on log exports
* Corruption and a general lack of transparency and accountability
* Failure to follow resource allocation procedures
* Bad business practice by logging companies
* Failure to implement conservation legislation
* Total lack of capacity in the PNG Forest Authority (PNGFA) and
an inappropriate focus on resource allocation
It is our view that many of these problems stem from nothing more
than a failure to implement, police and enforce existing legislation
and legal instruments. We also believe though that some of the
problems have arisen from a limited perspective on the value of the
forest resource and the range of available management options and a
limited human capacity.
The Papua New Guinea Eco-Forestry Forum is an Incorporated
Association that represents a broad spectrum or organisations and
individuals concerned with rural community development and
sustainable forest management.
In this document we seek to put forward in simple and plain language
what our members see as the crucial issues that must be addressed as
part of the Review processes.
We set out our analysis of the Current Situation in the Forest
Industry, what we see us the Underlying Problems, what we are aware
of in relation to the Currently Proposed Concession Areas, and our
Conclusions and Recommendations.
This is a summary document that we offer to the Government in a
spirit of positive co-operation. We hope that we will have the
opportunity to discuss our submissions with you and to meet with the
Review Teams. We also hope that our ideas can be developed with you
into a programme of positive future action that will bring genuine
stakeholders together with a goal of improved forest management and
rural community development.
2. Overview of the forest industry
The forest industry in Papua New Guinea has a long history of poor
management, bad practice and dispute. Many of the appalling misuses
and abuses that were identified in the Commission of Inquiry chaired
by Judge Barnett are still rampant. This was frankly admitted by the
Prime Minister in his Budget speech to Parliament in November 1999
when he said,
"Governance has been particularly poor in the area of forestry, with
the side effect of promoting corrupt practices and undermining
environmental sustainability in logging activities. The Government is
committed to introducing a moratorium on all new forest licences,
extensions and conversions and to proceed with a review of all
existing licenses, to ensure that proper procedures are followed,
that logging practices are not carried out in an unsustainable way,
and that landowners get their share of fair benefits from resource
use."
Major changes were made in the legislative system for the management
of PNG's forest resource at the beginning of the last decade but
these changes have not proved to be effective.
The legislative system is rarely, if ever, properly implemented,
forest management and practice do not conform to the set standards
and there is little enforcement of the legislative and contractual
requirements that govern forest management. This situation has been
exacerbated by the importation and imposition of forest management
systems and practices from overseas.
As a consequence, the forests are been unnecessarily destroyed, the
rural population is not receiving the development that they have been
promised and potential government revenues are not being realised.
Over the past decade a range of new forest management approaches that
we believe are more appropriate to PNG's unique circumstances have
been tried in different areas in the country. This experience has
increased the knowledge and the capability to manage the forest
resource for the economic, social and environmental benefit of the
nation. It provides several new options for forest management that,
when combined with existing approaches, offer a means not only of
addressing many of the problems experienced to date, but a way to
broaden and diversify how forests are managed so that resource owners
have more options and so that the sector is more resilient and
sustainable.
We believe that the Moratorium and Reviews provide a unique
opportunity both to make the necessary improvements to the management
of the existing licenses and permits, and to apply this recent
experience with new approaches through investing the necessary time,
energy and resources and providing a wider range of options to
resource owners in the areas yet to be allocated.
Our challenge is to ensure that the necessary will and the necessary
capacity is there to make this happen. By taking advantage of the
international assistance being offered by donors, institutions and
new investors, and by working together, we think we can achieve this.
3. Identified problems
The problems in forest resource management are numerous and permeate
all levels of the management structure. This story, from a visit in
1998 to the proposed Kolmal FMA area in East New Britain Province,
illustrates some of the problems and is typical.
"We visited the villages of Wawas, Taintop, Sampun, Kalampun and Guma
in the proposed Kolmal FMA area. In each community the stories we
heard were the same. A Forest Authority officer from Pomio had
recently visited the villages together with representatives from the
Balakoma landowner company and Niugini lumber from the adjoining Cape
Orford TRP. The villagers had been urged to allow the company to come
and log on their land under an extension to the Cape Orford TRP. The
proposal was that 30% of royalties would be paid to Balakoma as the
permit holder. In Taintop maps had been shown to the communities
indicating that their land was already within the TRP boundary. All
the communities had been told that they had to make a quick decision
as the law would change in 2000 and the opportunity would be lost."
Of course what was happening here is totally illegal under the
Forestry Act, there was no reference to proper statutory procedures
and the inducements that were being offered were untrue (the land is
NOT within the TRP boundary and there were no imminent changes to the
Forestry Act).
In 2000, on a return visit to the area it was found that logging had
taken place in some of the forest areas outside the Cape Orford TRP
boundary - without any formal procedures under the Forestry Act
having been complied with, without the knowledge of the Provincial
Forest Management Committee and with the full complicity of local
forestry officers.
Below we try to identify what are some of the major problems that are
causing the current appalling state of practice in the forest
industry.
Government
It is an inescapable conclusion that corruption is still rife in the
forest industry and it is frightening to realise that some of the
major figures who were seriously implicated in the Barnett inquiry
(and in one instance, dismissed from office by a subsequent Ombudsman
investigation) are still heavily involved in national politics. One
need only look at the sagas surrounding the Kiunga Aiambak Timber
Authority and the Kamula Dosa concession for confirmation that there
is no good governance or transparency in the forest industry.
National Forest Board
Conflicts of interest appear to be rife within the National Forest
Board. Board members have shareholdings and consultancy agreements
and receive other benefits that seem never to be disclosed and which
appear not to restrict their involvement in decision making. (Refer
Appendix Two)
The ability and capacity of the Board, both as a unit and individual
members, to carry out its functions and follow procedures, must be
seriously questioned.
For example, the Board is known to have recommended that the NEC
ignore the log moratorium, and grant exemptions for 25 new logging
concessions; this seems to suggest a total inability to understand
the concept of the Moratorium or to appreciate any of the reasons for
it's inception. If these recommendations had been approved by the
NEC, not only would the opportunity to address the serious problems
in the forest industry have been lost, Papua New Guinea would have
been in breach of World Bank conditionality and World Bank and IMF
support would have ceased, and Papua New Guinea would have fallen
back again into the sort of economic crisis experienced during the
previous government.
The proposed changes to the composition of the Board announced in May
2000 by the National Executive Council (NEC) do not seem to properly
address this problem and in would, indeed, appear to make the
situation even more degenerate by placing the Managing Director of
the PNGFA as the Board Chairman.
Provincial Forest Management Committees
It is apparent that the system of Provincial Forest Management
Committees (PFMC) is failing to function properly or at all. Again
there is a gross lack of knowledge and capacity at a committee level
and it appears that support from the National Forest Board or the
Forest Authority is negligible; indeed the relationship is often one
of distrust and animosity.
At a recent workshop, a group of NGO representatives on the
Provincial Forest Management Committees identified what they see as
some of the problems that the PFMCs face. These included:
* General lack of capacity, knowledge and training and support for
Committee members
* Lack of democracy in PFMC decision making
* Poor reporting by logging companies to the PFMCs
* No compliance reports provided to PFMCs by the Forest Authority
* Poor access to information such as documentation, contracts,
revenues and payments and company identities
* PFMCs not funded to make site visits
* Lack of notice about meeting times and dates
* No prior distribution of agendas
* General lack of information from Forest Authority
* Poor standard of reporting by Forest Authority officers
* Decisions made by PFMCs without the NGO Rep present
* Permit holders not being the resource owners
* Payments of 'gris moni'
* Logging companies moving into new areas without following proper
resource allocation procedures
A full summary of the outputs from the workshop is attached as
Appendix One.
PNG Forest Authority
The PNG Forest Authority appears to be incapable or unwilling to
perform its statutory duties or comply with Government policies.
For example the PNGFA has persisted with the advertising of some FMAs
in apparent breach of the current Moratorium and the spirit of the
Review of proposed concessions. Further, in October the Forest
Authority failed to draft amendments to the Forestry Act that
complied with NEC directions and instead followed its own agenda to
come up with amendments that the National Forest Board had
subsequently to reject.
Other examples include a failure to implement fully the Forestry Act
1991. The Act says in Section 137 that all previously issued permits
must be brought into line with the rules and regulations of the Act.
That has not happened. Ten years after Parliament declared its
intention, the Forest Authority has not implemented the law.
Section 54 of the Forestry Act clearly states that Forest Resource
Development should only take place in accordance with the National
Forest Plan, yet many current and proposed forest operations do not
appear in the Plan.
The inability of the Authority to implement the law or to follow
lawful instructions in themselves show that the industry and the
regulating agencies are in crisis and sometimes out of control.
In addition the entire focus of the Forest Authority is concentrated
on resource allocation with no regard to its other statutory
functions including compliance monitoring. Despite numerous instances
of poor and sometimes illegal forest practices, the PNGFA has no
record of enforcing or implementing the Logging Code of Practice or
Permit conditions.
Office of Environment and Conservation
The Office of Environment and Conservation appears to be a non-entity
when it comes to the forest industry, failing to carry out
environmental assessments of proposed operations or to monitor the
environmental performance of existing operations.
The 1998 Environmental Assessment of the proposed April Salumei FMA
was, apparently, the first (and the last) environmental assessment
carried out on a proposed new logging concession.
The Office appears to be taking no action to support the
recommendation of it's own Assessment that the April Salumei FMA
"..should not be logged" and ".is probably unviable."
Although the Office of Environment and Conservation has a forest
operations monitoring unit they do not have sufficient funding to
leave their office in Port Moresby and are reported not to have not
carried out a site visit in more than two years.
Logging companies
In practice the logging industry is a bad corporate citizen that
fails to comply with business regulations, generally pays very little
tax and has been found to use bribes to avoid taxation and other
laws. See, for example, the front page of The Independent June 29
2000 and page 2 of The Post Courier November 10 2000.
The industry has had an up-front log tax imposed on it because it has
very poor levels of compliance with the Income Tax Act. There are
very low levels of lawful compliance generally, with regulating
agencies not enforcing the law. The regulating agencies perform so
poorly, that the work of checking the integrity of log exports has to
be contracted out to a Swiss company, SGS.
The Australian consultants Fortech, contracted to the World Bank, in
1997 established that the logging industry was grossly inefficient,
and that inefficiency cost about $US15 per cubic metre on average, or
per annum grossly US$30 million, or about K76 million.
The issue of transfer pricing in the logging industry has not
addressed at all. There is a long history of transfer pricing in the
logging industry. The Barnett Report revealed this a decade ago.
Several logging companies had extra ordinary assessments placed on
them by the Commissioner of Taxes in the mid nineties. Currently
there is a substantial discrepancy between SGS recorded fob prices
for PNG logs and the fob prices reported by the Japan Lumber Journal.
In essence Japanese prices for taun and calaphilim in January 2000
were about US$130 per cubic metre. The FOB prices for Japan quoted by
SGS for December 1999 was US$82 per cubic metre. To appreciate the
size of this discrepancy we can extrapolate thus:
logs to be exported in 2000 x discrepancy in price x Kina/US$
conversion = 2 million x 48 x .39 = K246 million lost in export
earnings and un-stated for tax purposes.
Landowner companies
Landowner companies have been proven to be incapable of properly
managing the activities of logging companies and fairly distributing
royalties. At the community level logging operations consistently
result in disillusionment, dispute, the breakdown of traditional
values and provide no lasting benefit. See, for example, Appendix
Four.
In general, Landowner companies fail to pay dividends, do not comply
with the requirements of the Companies Act, do not have a
shareholding that represents resource ownership, do not represent or
even communicate with resource owners and lack any business
experience.
Forest Management Agreement procedures
The Forest Management Agreement (FMA) procedures under the Forestry
Act do not appear to have been properly implemented. The identified
problems include improperly and hurriedly constituted Incorporated
Land Groups, unrepresentative Landowner Companies, forced, coerced or
no consent to lands being included within FMA boundaries, no proper
Development Options Studies, no, or no proper, Environmental and
Social Impacts studies, processes being funded by individual logging
companies, and PFMCs being by-passed or misinformed.
Landowners are frequently denied access to legal advice during the
FMA process and are not given copies of the documents that they sign.
The PNGFA has shown itself unwilling to hand over these documents
even in the face of legal action through the courts.
These problems have been compounded by the refusal of the Forest
Authority to take any remedial action or to review the implementation
of procedures in many instances where problems have been identified
and brought to their attention.
Further there appears to be no proper procedure for resource
identification and mensuration and no analysis of the physical
constraints to logging. In consequence many proposed FMAs are totally
unsuitable for logging or contain accessible resources that are too
small for a sustainable commercial operation. See for example the
Environmental Impact Assessment for April-Salume and Appendix Two.
Planning process
The statutory forest planning process under the Forestry Act appears
to be being totally disregarded. It appears that the Forest Authority
is intent on parcelling up all the remaining forest resources in PNG
and selling them off in total disregard of landowner wishes, physical
constraints to logging, conservation needs and statutory procedures.
This is the inescapable conclusion from the 'PNG map showing current
and proposed timber concession areas', see Appendix Five. This map
identifies a further 10.5 million hectares of forest for industrial
logging with no regard for statutory planning processes or landowner
wishes.
Further, the concept of "sustainable forestry", on which forest
planning decisions are built, in Papua New Guinea is a meaningless
phrase. The "35-year rotation", is meant to induce "sustainable
forestry" under Forest Management Agreements. The reality is that
export logging targets the slow-growing high-value tropical
hardwoods. Some species take longer than 35 years, or even 50 years
to regenerate. Studies have shown that between 60-75% of these
species do not survive the first-cut, and that ancient forests, left
untended after the first-cut degenerate in secondary bush.
The 35-year cycle is highly controversial. The term "sustainable
forestry has to be seen in that context. The term "sustainable
forestry" needs to be treated with considerable suspicion when one
looks at industrial level operations. It can be argued that globally,
with the exception of one concession near Manaus in Brazil, there is
no such thing as "sustainable industrial forestry" in mixed species
tropical rainforests. Certainly, there is no "sustainable forestry"
in the Papua New Guinea logging industry.
Conclusion
The forest industry appears to be almost beyond reform. What is
needed is complete renovation. Such a renovation would imply major
institutional restructuring, legislative change, change in the tax
structure, and a general cleaning up. The industry is a bad corporate
citizen that does not pay its income tax, and has had an upfront log
export tax imposed on it to stop it cheating. There is no evidence
that the industry is improving its compliance with Income Tax laws,
or other laws. What is known, indicates the opposite. There are a
host of other regulatory matters which show poor compliance, or no
compliance. The industry openly interferes in mainstream politics.
What is needed is complete renovation of the industry and the two
main regulating agencies the PNG Forest Authority, and the Office of
Environment and Conservation. NGOs have been advocating for the past
5 years that the policy emphasis needs to move away from export
logging to small and medium scale community based or controlled
downstream processing and other socially and environmentally
appropriate land uses.
NGOs and representatives of government bodies and the private sector
have been working hard for the past 3 years on national standards and
criteria for Forest Stewardship Council certification which have now
been completed. These set standards for socially, economically and
environmentally sustainable operations which are internationally
respected and independently audited. These National Standards should
set the mark to which all future forest operations should have to
comply and by which they should be judged.
Clearly the current industry Moratorium represents one of the last
opportunities to secure the sustainable management of the nations
forests and to rid the industry of corruption and other bad practice.
It is therefore essential that the Moratorium continues in place
until:
1. The recommendations of the Review of currently proposed forest
concessions have been fully implemented and systems put in place to
ensure that the same errors and omissions do not occur in the future,
2. There has been a Review of the legal instruments, financial
arrangements, company performance and harvesting practice in all
existing forest concessions and legally binding proposals and a time
frame for remediation agreed between the parties,
3. There is in place an effective method for implementation of
monitoring systems and of policing and enforcing the logging code of
practice,
4. There is in place an effective and independent system for
ensuring that forest management is socially appropriate and
economically and environmentally sustainable
5. There is in place a funded and defined new National Forest
Planning Process that incorporates the views of all stakeholders,
provides a range of management options and which is transparent and
comprehensive.
6. The focus of the Forest Authority has been changed from one of
assisting loggers to access timber resources, to one of monitoring
and control of forest operations in line with truly sustainable
forest management practices.
3. Proposed new concession areas
We present here an initial outline of some of the problems that have
already been identified in relation to some of the currently proposed
new forest concession areas. A number of organisations are currently
engaged in re-visiting specific areas around the country to collect
further information and this will be presented to the relevant
authorities in due course.
Amanab Block 1-4
Sandaun Province. There are questions about whether large areas of
this concession are suitable for industrial activity due to flooding.
It is reported that the Provincial Forest Management Committee wants
to give a concession in this area by extension to WTK.
There is an independent report that can be seen at
http://www.gn.apc.org/fmonitor/reports/vanimo/summ.htm showing that
WTK have a record of poor forest and environmental management.
Amanab Blocks 5 & 6
There are questions about whether large areas of this concession are
suitable for industrial activity due to flooding. It is reported that
the PFMC want to give a concession in this area by extension to WTK.
Again see http://www.gn.apc.org/fmonitor/reports/vanimo/summ.htm
April Salumei
This FMA appears to have been put together without proper
consultation and with severe irregularities in the way in which it
was signed - as an enforceable contract it is probably ineffective.
The resource is probably not sufficient to support a commercial
large-scale operation that intends to abide by the permit conditions
and logging regulations. There is gross inundation and severe slopes.
Any large-scale operation could have catastrophic impacts on
communities lower down the Sepik River system.
A joint Department of Environment and Conservation and PNG Forest
Authority Environmental Assessment of the project in 1998 concluded
that the April Salumei FMA "..should not be logged" and ".is probably
unviable." Despite these recommendations it appears that the FMA is
still being pursued.
There is a Wildlife Management Area over the Hunstein Ranges and
there are numerous important habitats and ecologically sensitive
areas. The Ambunti Local Level Government have reportedly said they
do not want industrial logging in their area. WWF now have a large
conservation project operating in the area.
Asengseng
This concession appears not to be sustainable under any definition
used by the PNGFA. Much of the area is polygonal karst with slopes
over 30 degrees and therefore much of it is excluded under the rules
of the Logging Code of Practice.
Cloudy Bay
This is a new concession that appears to have been re invented by the
PNGFA. It is to the east of Abau and incorporates the old Robinson
River LFA. It has very little accessible timber in it, and appears
too small to be sustainable.
East Awin
A large concession in Western Province, with the Project Agreement
signed by General Lumber. However it appears that the PNGFA signed
the FMA on top of a prior existing lease-lease back arrangement,
which the PNGFA did not know anything about. Concorde Pacific (Mr.
Lee) and Paiso the local landowner company have got injunctions from
the court against the PNGFA and General Lumber.
To put an FMA into an area when there is an existing lease-leaseback,
and not know about the lease-leaseback, appears to shows an absence
of due diligence. This is probably of great embarrassment to General
Lumber who appear to have taken the concession in good faith.
East Collingwood
It appears that the PNGFA put the FMA in without first doing a
project options study, or indeed any serious study of the area. Much
of the area is of high relief and slopes in excess of 25 degrees.
There are very large areas of grassland in the acquired FMA.
Consequently the area of accessible forest appears to be about 60,000
ha and too small to be a stand-alone sustainable industrial forest.
East Pangia
Not much is known about this proposed concession. On its face this
should be a downstream processing project servicing the strong demand
for sawn timber in the Highlands markets.
Hekiko
This appears not to be a sustainable project as the allocated
resource is too small and there are large areas of limestone karst.
Josephstaal
The allocated resource is not of sufficient size to support a
commercial large-scale operation that intends to abide by the permit
conditions and logging regulations.
There appears to have been numerous instances where proper rules and
procedures have not been followed in the formulation and allocation
of the FMA and the Incorporated Land Group process was very poorly
implemented. The Review Team must investigate who has been acting
improperly and for what reasons.
Particular problems that have been identified include the poor timber
quality, the scattered nature of the stands of commercial timbers and
the soil structure which is too sensitive for large-scale operations.
For further information, please refer to Appendix 2.
Kamula Doso
The PNGFA Board in February 1999 purported to allocate this 800,000
ha concession to Rimbunan Hijau as an extension of the Wawoi Guavi
TRP, without advertising.
In addition, the Project Option Study appears to have been poorly
executed and drew only one conclusion: this has to be a large logging
project. With an Ombudsman Commission inquiry report pending, the
PNGFA was forced to re do the ILGs and the FMAs.
There is intense lobbying going on to give this concession to RH.
There is also an independent study showing that RH in Wawoi Guavi
infringed the Logging Code of Practice (See Appendix Three). RH's
performance in Wawoi Guavi is also disputed by some landowners; in
particular roading is very poor.
Any Review Teams must receive and consider a copy of the Ombudsman
Commission Preliminary Report which has been completed and is now
awaiting comment from the individuals and organisations implicated.
Kerevat Plantation
This appears to be a complete mess. The declared output from the
plantation is grossly in excess of the available resource and would
therefore seem to be a cover for other, possibly illegal, logging
operations.
Middle Ramu
The Landowners appear to be very strongly against industrial logging.
Morobe South Coast
This appears to be a fundamentally flawed FMA process: The
Incorporated Land Group Process for the FMA does not appear to have
been properly administered or completed. We also understand that the
developer funded the entire ILG process. Further we are not aware of
any developed options study being undertaken.
We are also concerned that the proper procedures may not have been
followed in the process of PFMC approval of the project before
submission to the National Forest Board.
PNG Forest Products, according to the PFMC, have as yet not honoured
their obligations and contractual duties in their other existing
concessions and therefore do not seem to be a suitable developer for
this project.
Mukus Tolo
It appears that here the landowners did the ILGs but did not do them
very well; many rightful landowners were not included and some non-
landowners were included.
The landowners were "pestered and bribed" at the FMA stage and so the
FMA was improperly acquired. There are allegations that K 10,000 was
paid to a 'steering committee' when the FMA was signed.
These problems have been drawn to the Forest Authorities attention on
many occassions but they have been unwilling to intervene. Some
landowners have clearly stated that they do not want their areas
logged.
There is also the whole issue of the great scenic beauty of the area
and the compatibility of the FMA with the Tavolo Wildlife Management
Area.
Further, the concession appears to be too small to be sustainable
either economically or ecologically. About one third is limestone
karst and there are substantial areas of logged-over secondary forest
and gardens.
Musa Pongani
Large areas subject to inundation (flooding) and therefore unsuitable
for commercial logging.
The landowners (some Maisin) appear divided on the issue of logging
or conservation. Many genuine landowners appear not to have been
consulted or identified in the ILG process.
Some 10,000ha appear to have been tied up in a lease leaseback
agricultural clearance. The PNGFA, again appear not to know about
this.
Conservation Melanesia have drawn the conservation needs of the
people to the attention of the PNGFA, but have received unhelpful and
dismissive letters in response.
Rottock Bay
This appears to be an example of improper resource acquisition by the
PNGFA. The landowners have disputed the way in which the FMA was
signed, and in particular it appears that areas have been included
within the boundaries without landowner agreement.
In addition it appears that the resource is too small to be
commercially viable or sustainable and the general forest condition
does not warrant a large-scale operation.
South West Wapie
Sandaun Province. There are complaints about the way that this FMA
was put together. WTK seem to be pushing for an extension - again see
http://www.gn.apc.org/fmonitor/reports/vanimo/summ.htm
Tapila Wapim
This is located in area of fragile forest (savannah). The PNGFA
appear to have used an extension to give this concession to Forest
Management Services (Jim Belford). Reports from the area include this
forest was badly damaged by fire in 1997, the environmental impact of
logging has been severe; there are real environmental problems due
poor forest management and fragile forests. There is an overlap of
these concessions into the Tonda Wildlife Management Area.
Vailala Block 1 extension
This is completely new. China Long Kong took over this concession
after alleged pressure from the Chinese Government, because the PNGFA
were about to issue a show cause notice to Shiesi. It has been
reported that Sheisi was restructured and the new permit holder
became China Long Kong. There have been many recent visits by top
PNGFA officials to China.
5. Conclusions and recommendations
Four Priorities for Change
ONE: IN ALL EXISTING FOREST OPERATIONS
There must be a critical review of the legal documents, the financial
arrangements, company performance and harvesting practice in all
existing forest operations.
This must be followed by appropriate action to remedy problems where
they are found to occur including the cancelling of existing
agreements where they are found to be substantially insufficient or
illegal.
The forest resources in PNG belong to the people. There is a process
in place for a fair and proper bargain to be struck between the
people and forest developer. That process has never been properly
implemented. The reality in most concessions is that the incorporated
land groups do not properly identify the resource owners. This
problem is compounded because people have signed agreements that they
do not understand and they are not aware of the alternative
development options that may be available. As a result the contracts
are often bad commercial deals. The resource owners have not been
properly identified, they have not given their informed consent and
they have signed unfavourable contracts.
These problems are compounded by financial arrangements that are
unfair or not enforced, companies that are poor corporate citizens
and unsustainable and destructive logging practices.
TWO: IN ALL AREAS PROPOSED FOR FOREST OPERATIONS
A new National Forest Planning Process that incorporates the views of
all stakeholders, which considers the range of forest values and
management options, and which is transparent and comprehensive must
be defined and funded and implemented.
There are many problems with the current National Forest Plan which
is due to expire in 2002. A new land use planning and decision making
process is urgently needed which properly recognises the rights of
the people, ensures the sustainable management of forest resources,
includes provision for all forms and scales of forest operation and
properly incorporates due regard for economic returns, environment
conservation and protection of bio-diversity.
THREE: ALL FOREST OPERATIONS
All forest operations must comply with the requirements of the
logging code of practice and an effective method of policing and
enforcement must be instituted.
The current Logging Code of Practice is disregarded in most forest
operations. There is no effective policing or enforcement of the
Code.
FOUR: THE FOREST INDUSTRY MORATORIUM
The Moratorium is an opportunity for change by assessing and
improving the problems in existing forest operations and by engaging
in a process of re-evaluation in the remaining forest estate to find
solutions that have less damaging social, economic and environmental
impacts.
We urge that the Moratorium should not be lifted or altered or any
exemptions granted until the priorities for change that are
identified above have been brought to a satisfactory conclusion.
It is our recommendation therefore that:
There should be no new timber permits, extensions or timber
authorities granted until
1. The recommendations of the review of currently proposed forest
concessions have been fully implemented and systems put in place to
ensure that the same errors and omissions do not occur in the future
2. There has been a review of the legal instruments, financial
arrangements, company performance and harvesting practice in all
existing forest concessions and legally binding proposals and a time
frame for remediation agreed between the parties,
3. There is in place an effective method for implementation of
monitoring systems and of policing and enforcing the logging code of
practice,
4. There is in place an effective and independent system for
ensuring that forest management is socially appropriate and
economically and environmentally sustainable
5. There is in place a funded and defined new National Forest
Planning Process that incorporates the views of all stakeholders,
provides a range of management options and which is transparent and
comprehensive.
6. The focus of the Forest Authority has been changed from one of
assisting loggers to access timber resources, to one of monitoring
and control of forest operations in line with truly sustainable
forest management practices
###RELAYED TEXT ENDS###
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