***********************************************
PAPUA
NEW GUINEA RAINFOREST CAMPAIGN NEWS
Prime
Minister Accused of Disastrous Forestry Policy
as Controversy Over New Timber Revenue
System Flares
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Forest
Networking a Project of Ecological Enterprises
4/24/96
OVERVIEW
& SOURCE by EE
Following
are two very interesting newspaper accounts of the major
drama
playing itself out in Papua New Guinea concerning
implementation
of new forest timber revenue structures and rates.
Despite
intense local and international NGO pressure, World Bank
and
other investor concern, and increased political condemnation;
Prime
Minister Chan apparently has indicated he will "lift the new
revenue
system for the forestry sector."
There
has been quite alot of PNG timber industry activity
recently,
with the general trend of foreign owned industrial
forest
clearing strengthening; in effect, insuring that the
significant
PNG rainforest ecosystem will not survive unfragmented
into
the 21st century. Numerous rainforest
clearcuts proceed
under
the guise of oil palm development.
Besides the Sandaun
project
we reported on recently, the Normanby project in Milne Bay
is a
proposed K200 million "agro-forestry" project. Too bad most
of the
forestry part involves clearcutting incredibly old and
diverse
tropical moist rainforest.
A
ferocious battle has been being waged between the PNG foreign
timber
multinationals and local environmental and peoples
organizations. The issue being a new timber revenue
structure
which
increases royalty rates paid to landholders (on a per unit
basis)
when timber prices are high (many current concession pay
K4-8
for a cubic metre, the new rate would be K23 at current log
prices). Additionally; new tariff rates were to
increase
government
revenue. While the government has
implemented the new
tariff
rates, the landowner component remains unimplemented. The
Individual
and Community Rights Advocacy Forum has been running
full
page advertisements weekly for several months questioning
delays
in implementation of the new landowner royalty system.
Item #1
contains the full text.
Joining
the very vocal local criticism of failure to revamp the
timber
industries revenue structures has been the World Bank,
which
has made follow through on forestry reform issues a
condition
for aid. I will be sending the recent
front page
article
entitled "World Bank recommends new forest revenue system"
shortly
which concluded that "returns to logging companies were
adequate"
and that the new level of taxation and royalty rates
were
appropriate. The fact is that prior to
Prime Minister Chan's
recent
statements that the new revenue policy would _not_ be
implemented;
we had a PNG government saying they were for this new
revenue
policy. Virtually all civic and peoples
organizations in
PNG are
on record as saying that a new timber revenue policy is
needed. Major donors like the World Bank are deeply
concerned
about
the clearly unsustainable and uncontrolled rainforest
cutting
in PNG. And a large and diverse
international audience is
concerned
ecologically and sociologically with what is happening
in PNG.
One
group does not want to see this legislation go through. The
hugely
profitable multinational timber liquidators don't want to
share
their billions. The fact that this new
timber revenue
system
is not yet in place is a testimony to the extent to which
the
mostly Malaysian, but including other timber multinationals,
have
penetrated and control policy in Papua New Guinea. What is
occurring
is shocking, and immediate attention to the out of
control
timber mining and political intervention occurring in the
South
Pacific is necessary. If not, people
will suffer and the
natural
environment will be much reduced for the conceivable
future.
ITEM #2
relates parliamentary opposition to Prime Minister Chan's
forest
policy, based upon the above and additional issues. This
item, though
clearly politically partisan in nature, illustrates
many
interesting facts. For example, it is
claimed that not a
single
major downstream processing plant has been built though
many
have been promised. It is seriously
alleged that current
government
policy threatens PNG sovereignty.
Furthermore, the
completely
dominating and litigatious Rimbunan Hijau of Malaysia
is
taken to task by name: "Who is Rimbunan Hijau to come in and
dictate
to us as an independent nation that the policies we adopt
for the
interest and the benefit of this country are not competent
and
conducive to their business activities."
IN my
opinion, in Malaysian timber interests control of PNG forest
policy,
we have a new clear indication of how political and
economic
control will be exercised in an era of increasingly
scarce
resources. If the US can send troops to
defend its oil in
Kuwait,
who is to condemn Malaysian bribery and corruption to
guarantee
their continued forest resource use (largely selling to
Japan).
Both
items are from _The Independent, a wonderful PNG English
newspaper. Have been a bit behind with PNG Rainforest
News as
getting
the 800 PNG articles from the past 6 years archived at <
http://forests.lic.wisc.edu/pngforest.html >.
If anyone has any
ideas
on how this PNG Rainforest Campaign should proceed, it would
be
appreciated. It is difficult to see a
winning endgame, as
PNG's
forest resources continue their precipitous decline.
g.b.
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RELAYED
TEXT STARTS HERE:
ITEM#1
Paid
Advertisement by Individual and Community Rights Advocacy
Forum Inc, a PNG NGO
Source: _The Independent_
Date: March 29, 1996
Page 22
ICRAF
ALL
FOREST LANDOWNERS!
YOU ARE
LOSING MILLIONS OF KINA
In his
budget speech on 22nd November 1995, the Honourable Chris
Haiveta
said,
"I
AM INTRODUCING A NEW TAX AND LANDOWNER ROYALTY SYSTEM, WHICH
WILL GO
INTO EFFECT IMMEDIATELY"
"The
export tariff is amended to introduce the new revenue system
which
is a progressive rate of tax on log export based on FOB
prices. Previously, different rates applied
according to species.
_There
will also be a concurrent regulatory change by the National
Forest
Authority to increase royalty payments to landowners._ The
new
export tariffs and royalties will be structured progressively
according
to log prices as follows:
F.O.B.
LOG PRICE MARGINAL ROYALTY
KINA/m3 TAX RATE K/m3
0-90 15% K10
91-110 30% K12
111-130 50% K15
131-150 55% K18
151-200 60% K23
Above
200 70% K23 plus 7.5%
In
volume 1 "Economic and Development Policies" presented by
Honourable
Chris Haiveta on the occasion of the 1996 Budget page
150;
emphasis added.
The
Government has already started imposing the new export tariff
taxes. This is earning millions of kina for
government.
The
graduated royalty for Landowners on the other hand _is being
delayed_
by the government under pressure from logging companies,
resulting
in huge losses to the Landholders.
This
new royalty rate would mean that Landholders will be
receiving
between K10 per cubic metre, to K23 per cubic metre plus
7.5%,
as royalty for all export logs.
The
average price for logs is about K160 per cubic metre so for
this
price you should be paid K23 per cubic metre.
Only
the Minister for Forest has the power to impose the new
royalty
rates. He has so far not done so. _YOU ARE LOSING
MILLIONS
OF KINA!_
REMEMBER
LANDHOLDERS!
The
government now proposes to set up a committee to look at the
royalty
issues. _This is a delay tactic._
The
government is earning millions of kina under the graduated
export
tax whilst you Landholders are losing millions of kina.
Individual
and Community Rights Advocacy Forum Inc.
PO Box 155,
UNIVERSITY
NCD.
*******************************
ITEM#2
Headline: "Chan's Malaysia trip smells disaster
for forestry
resources: Yaki"
Source: _The Independent_
Date: 4/12/96
Page 5
THE
Opposition strongly condemned the Prime Minister's intentions
to lift
the new revenue system for the forestry sector.
Opposition
Leader said, "The new revenue system put in place
during
the Wingti regime is the best recipe for the people of
Papua
New Guinea. I cannot imagine this
system being removed
because
it was designed and put in place to bring adequate and
quality
infrastructure developments into logging areas.
"It
is also adopted to boost our revenue base from this billion
kina
resource which we have not realised since logging began in
the
country.
"The
people of Papua New Guinea cannot and must not be fooled by
the
Chairman of the Timber giant, Rimbunan Hijau, Datuk Tiong Hiew
King
and the Prime Minister, Sir Julius Chan.
It was the very
same
company who made a similar commitment to build a K30 million
wood
processing plant down in the Gulf province when we were in
government.
"To
date this country has not realised a single downstream
processing
plant. Not even the one announced and
promised by
Rimbunan
Hijau. When were in government, we had
ten major
proposals
for down stream processing plants before us.
This is
what
this country needs.
"The
Government must make it absolutely clear to all timber
companies
that they must demonstrate their commitment to the
country
and the industry by building plants for down-stream
processing. They cannot equate their commitment with the
supply
of
logs.
"What
is the Prime Minister trying to achieve for the people of
this
country by going out of his way to compromise the country's
national
interest for his personal and sectoral interests. The
move by
the Prime Minister to allow himself to be used by foreign
investors
amounts to selling the country to foreigners".
He
stressed that the people of this country will not sit back and
accept
this to happen. The new revenue system
must stay, we must
not
allow the wholesale of our logs for just one toea.
What
Papua New Guinea needs is a forestry policy to develop a
financially
viable and internationally competitive log processing
industry,
not increased raw log exports.
"Chan
cannot subject our forestry resources to the desire of
foreign
companies to exploit at will. Even to
the point of
selling
the very sovereignty of this country by allowing them to
dictate
to use the terms of conditions of how they will reward us
for
exploiting our resources. Why should
Papua New Guinea
compromise
its sovereign right to scrupulous companies who's only
motive
is to make fast money and disappear?
"Who
is Rimbunan Hijau to come in and dictate to us as an
independent
nation that the policies we adopt for the interest and
the
benefit of this country are not competent and conducive to
their
business activities and must be changed?, questioned Mr
Yaki.
"The
attack on Papua New Guinea and the World Bank's new revenue
measures
on log exports by the Malaysian logging companies
indicates
sinister motives. The country's revenue
base is
limited,
and the forestry sector must play its part in meeting our
revenue
needs. It has not done so anywhere near
adequately
enough. Chan must be not diverted from achieving
this goal", he
added.
"What
this country will want to see is for its extensive forestry
resources
to be managed responsibly, and for the whole nation,
including
landowners and local groups to gain maximum benefits.
That
requires the on-shore processing of forestry products to
maximise
the value-added benefits and job creation which this
country
has been missing out for years".
###RELAYED
TEXT ENDS###
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