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PAPUA NEW GUINEA RAINFOREST CAMPAIGN NEWS

Seven Major Forestry Projects Ruled "Unviable"

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Forest Networking a Project of Ecological Enterprises

http://forests.org/

2/21/97

OVERVIEW, SOURCE & COMMENTARY by EE

In a surprisingly good development, the forestry board has sent seven

large proposed industrial forestry development projects "back to the

drawing board." This was not because they were grossly unsustainable,

ecologically and socially damaging, exploitative with little local

benefit, or because they were just plain bad development. Rather, it

is because they were "unviable," meaning presumably somebody in power

is not making enough money off the deal. Nonetheless, despite my

cynicism, these were bad projects and it is good news they are not

going forward. Following is coverage from _The Independent_ which

provides additional details.

g.b.

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RELAYED TEXT STARTS HERE:

Headline: Major forestry plans ruled unviable

Source: The Independent

Date: 2/14/97

Author: Harlyne Joku

SEVEN major forestry project proposals promising millions of kina in

development benefits to the landowners and investment in the country

have been ruled unviable by the forestry board.

Proponents for the projects have been told to take the proposals back

to the drawing board and return with financially viable and realistic

figures.

The projects include the controversial Hekiko project in the Gulf

province, Josephstall in Madang, Amanab Block 3 and 4 in the West

Sepik province, Asengseng FMA area in the West New Britain province,

Mukus Tolo in the East New Britain province, Rottock Bay (West New

Britain) and Semabo in the Western province.

Concerns have been raised at a recent Forestry board meeting that the

proposal for the Hekiko FMA by Hong Kong based Yeungs Group Enterprise

is financially unrealistic. Profit and loss projections, cash flow

statements and debt servicing has not been provided, nor supportive

documents presented. Concerns were further raised that no Timber

Permit/Authority was attached. Yeungs had also failed to inform the

Provincial Forest Management Committee about their plans.

Hekiko has remained a controversial project area since 1995. On

February 7, 1995, Yeungs Group Enterprise (PNG) Pty Ltd and a

landowner company known as the Hekiko Forests Pty Ltd signed a

Memorandum of Understanding (MOU) stating that the PNG government has

recognised the principles of the landowners and the need to develop

the Hekiko forest resources area.

The Hekiko FMA is customary land located in the remote western part of

Kikori river commencing from Kaiam No 1 village in the Gulf province,

the Omati riverhead to Fogomaiyu village in the Southern Highlands

province.

The MOU allows Yeungs to develop the land through clear felling, the

establishment of facilities to process timber products, the marketing

of logs, construction of infrastructure and the processing of various

timber products. Yeungs have also proposed an agro based industries

such as Oil Palm industries in the project areas.

Forest Minister Andrew Baing was asked during a press conference last

year about the Hehiko proposal to which he responded he was not aware

of.

According to forestry officials, unlike other proposals like

Josephstal and Asengseng that had taken more than years to reach

official recognition, Hekiko was rushed through up to board level in

less than two years.

Proposals for the other FMA's had similar concerns raised.

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