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PAPUA NEW GUINEA RAINFOREST CAMPAIGN NEWS

Greenpeace September Forest Update

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Forest Networking a Project of Ecological Enterprises

http://forests.org/

9/19/98

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RELAYED TEXT STARTS HERE:

Title: forest update

Source: Greenpeace Pacific

Status: Distribute freely, with credit to source

Date: September, 1998

Byline: Brian Brunton

world economy and its effect in Papua New Guinea

The depressed world economy caused a major downturn in the log market in Papua

New Guinea in 1998. Log exports dropped from US$191 million to US$57 million in

the first half of 1998. At least 41 operators stopped production. 11 others

shifted to production for sawmilling. From a conservationist perspective these

are positive trends. But they should not be mistaken for a fundamental change in

the industry. The loggers are biding their time until the market recovers. Many

are hibernating.

The future trend is likely to be for Papua New Guinea to supply raw logs at much

cheaper prices to overseas mills, with China as an important destination for raw

logs. The local milling now being undertaken is most likely a short-term

response to the depressed market. Rimbunan Hijau have built a veneer mill at

Emeti in the Western Province, and Landwell Resources is said to be building a

plywood mill in the Central Province.

Japan

Japanese buyers still account for in excess of 70% of Papua New Guinea's log

exports. Japanese manufacturers have moved away from tropical logs to temperate

soft woods, for a variety of reasons, including determined campaigning by

Japanese NGOs. It is unlikely that Japanese buyers will allow themselves to be

caught short of stocks of hardwoods as they were in 1993. They will keep

stockpiles, and buy judiciously, looking for bargains.

PRC (China)

The devestating flooding in China has destroyed millions of houses. China will

seek to rebuild as soon as the floods recede. The flooding has been attributed

to deforestation in China, which announced earlier this year, as a national

forest conservation measure, that it would stop logging its own forests and seek

to import 10 million cubic metres of logs between 1998 and 2002. Whether or not

it can pursue this goal in the light of the Asian economic downturn remains to

be seen. The question will be how would China find the US dollars to pay for the

exports?

In July this year Thomas Nen, Managing Director of the PNG Forest Authority, and

Chris Marlowe, General Counsel to the PNGFA, and President of the PNG-China

Business Council visited China. An MOU was signed between the PNGFA and the

China Huayi Group from the Hebei Province. China Huayi wants to import hardwoods

for manufacturing. Discussions were also held with the Jaingsu Overseas Group

Corporation.

campaign to end export logging by the year 2000

Greenpeace and WWF South Pacific have completed an analysis of the PNG National

Forest Plan. The report concludes that the Plan falls short of its mandate. It

recommends that the Plan be withdrawn, that existing maps be redrawn to show

areas off-limits to logging, that a moratorium on new projects and extensions to

existing projects be imposed until timber resources are brought under effective

management, and that a process of bottom-up, community-based land-use planning

be implemented. All the major national and international NGOs operating in PNG,

with the exception of The Nature Conservancy, have indicated a willingness to

support the recommendations.

campaign to stop the lowering of the log tax

Despite extensive lobbying and an advertising campaign by NGOs, the government

caved in to the logging lobby and lowered the log tax in July. All green NGOs,

national and international in PNG wanted no alteration to be made to the tax,

because the tax in effect puts up the cost of logs, and has a conservation

effect.

It is believed that the architect of the misguided compromise was the ex-World

Bank, now Gov of PNG consultant, Hamidian Rad. In essence, the export tax on

logs valued at less than K130 per cubic meter was abolished. Most high-value

species bring in more than K130 m3, so are unaffected by the reduction. But the

effect of this reduction has been to allow some loggers to go back into

production, and has raised the hopes of others that more concessions can be

negotiated. Politically the reduction is an indication of the lack of influence

the loggers can bring to bear on the current Government. Most key players in PNG

politics since the last elections in 1997 are not allied with logging interests.

They are not dependent upon the loggers for bribes. They depend instead upon

gambling industry sources for their slush-funds. Nevertheless the Skate

coalition is very fragile. Rumour has it that Skate will have to step aside to

hold the coalition together. The loggers prefer a PPP/Pangu government, although

a recent reshuffle would have been much to their liking.

New Minister for Forests

The Minister for Forests Dr. Fabian Pok was replaced by Mao Zeming, former

Minister for Housing, in July. But by August Mr. Zemming had fallen from grace

and was sacked. He was replaced by Mr. Peter Arul, former Minister of Corrective

Institutions, and member for Kandrian Gloucester in West New Britain. Peter Arul

has very strong links with the export logging industry. He is from Amgen

village, Gasmata, WNB. A company search conducted after he was appointed

Minister for Forests shows he is a director of Gasmata Holdings Pty Ltd. Other

directors of Gasmata Holdings are Steven Kalabrek, Julius Usimsit, Isidore Teli

( Managing Director) Francis Vango all from Amgen village, Andrew Posai (former

Minister of Forest in the Chan government but sacked for corruption), and Chris

Fong from Kimbe. Gasmata Holdings has a nominal capital of K1 million x K1

shares, of which seven shares are paid up and all held by people living in Angen

Village. The PNG Banking Corporation has a charge over all the assets of Gasmata

Holdings. Gasmata Holdings holds a timber authority in respect of the Asirim-

Gasmata roadline project, and is thought to be the operator in the Mukus Tolu

FMA. Both these projects look to be uneconomic or at best marginal,

economically.

IIED/NRI conference & books

The PNG National Research Institute, and the International Institute for

Environment and Development held a conference in Port Moresby in August 1998 on

forest policy. It was part of a long-term cooperative effort that produced NRI

Monograph 32 in 1997 entitled " The Political Economy of Forest Management in

Papua New Guinea (edited by C Filer). This year IIED/NRI published "Loggers,

donors and resource owners" (C Filer and N Sekhran). These books contain a

wealth of information on the struggle for the forests in PNG. Two things were

noticeable about this conference. Although the loggers were invited, they did

not participate. One or two of their representatives could be seen from time to

time. But they did not speak. Logging is an industry that cannot expose itself

to informed criticism, and is an industry which is not transparent. Secondly,

the PNGFA was under continuous pressure to justify its practices. The Minister

and Managing Director fled the scene, and left General Manager Kanawi Pouru to

defend the institution as best he could.

Forest Regulations

The Forest regulations were approved by the Minister in June 1998, seven years

after the Forest Act was passed by Parliament. We were told that the price of

the regulations is K1000.

new logging fields

The National Gazette shows that the PNGFA has prepared Incorporated Land Groups

in:

*East Pangia Timber area, Southern Highlands Province *Gimi Rautu Community

Government Area, West New Britain *Higaturu Local government Council Area, Oro

province *Ugu Village Wawoi Guavi Block IB TRP, Western Province *Kikori Block 2

Timber Area, Gulf Province *Turama Block 1, Gulf Province

*Vailala Block 1, Gulf Province

*Nuku timber area, Sandaun Province

need to renovate the Forest Authority

A serious debate took place at the IIED/NRI conference over the need to change

the direction of the PNGFA from export logging to medium and small-scale forest

production. There was a general view that the PNGFA should be commercialized.

The effect of the log tax reductions now mean that it is likely that log tax

revenue will be less that the cost of running the PNGFA. The cost of the PNGFA

is borne by taxpayers, who subsidize the running of an environmentally

destructive industry.

World Bank

The World Bank is isolated with an out dated policy of supporting the export log

industry. All NGOs except TNC support a moratorium on new operations. The World

Bank seeks to keep this environmentally destructive, subsidized and inefficient

industry going by promising NGOs more money for conservation. Bank policy,

propounded by Jim Douglas is to promote conservation while continuing export

logging. Jim Douglas was in Port Moresby at the time of the IIED/NRI conference

but did not attend. He went to Australia to seek substantial Australian aid for

his misconceived projects. Glen Barry was left to defend the World Bank

position.

TNC, World Bank, and UNDP

The Nature Conservancy is involved in a logging project in the Madang Province

at the Josephestal FMA. This is meant to be a demonstration that sustainable

logging can be made to work in Papua New Guinea. However The Nature Conservancy

is reported to be planning to export log in its first years of operations. The

effect of this decision, if indeed it has been taken, is very serious. Export

logging is the main threat to forest loss in Papua New Guinea. TNC membership

should be concerned over these operations. First, the proposal runs against

conservationist principles, or at least those principles now adopted by other

green NGOs in Papua New Guinea. Second, a decision to export log in a project

that is meant to be sustainable suggests that the project has fundamental

problems in its conception. Prices for logs are much lower than prices for

processed timber. Fundamentally, the problem here is the management of the costs

of production. TNC does not seem to be able to manage these costs. Third, one

explanation for the mismanagement of the costs of production could be that the

project is undercapitalized. It is understood that TNC originally sought loan

capital from UNDP, but has since turned to the World Bank's International

Finance Corporation. This has caused some distress to UNDP.

But however that may be, what is clear is that if a project is properly planned

and adequately capitalized, then it does not need to export its logs. The raw

material can be processed in country and sold into North America. It is said

that Wep Kanawi, who coordinates TNC in PNG has visited Canberra seeking support

for the World Bank in its quest for funding for the conservation trust facility

proposed by the World Bank. The TNC/World bank alliance is founded upon a

fundamental contradiction: conservation principles can be sustained at the same

time as the forest is degraded.

WWF terminate Rex Naug

WWF US summarily terminated Rex Naug at the end of August 1998, who was until

the beginning of this year their manager in the Kikori Valley, and then became

their manager for external affairs. Rex was a solid, experienced, influential

and respected forest campaigner, an agriculturist who worked in this country

since 1968. His termination does not make sense, and at this stage of the

proceedings reflects adversely on WWF US.

The New Logging Frontier

For the past two years it has been clear that the PNGFA and the loggers were

positioning themselves to log one of the largest areas of untouched tropical

rainforests in the Southern Hemisphere, along the PNG/Irian Jayan border, in the

Western and Sandaun Provinces. In 1994, the PNGFA let the dubious Kiunga Aeanbak

Road timber authority proceed. This had the effect of cutting into a great

stretch of forest in the mid Fly River area: a road that runs from nowhere to

nowhere. The PNGFA has put in FMAs in East Awin, and Kamula Doso Blocks 1,2,3.

The PNGFA is also pushing ahead and incorporating Land Groups in Nuku in the

Sandaun Province. A number of things make these events very worrying. The PNGFA

has a track record of not being able to regulate its concessions, and the

returns to landholders in isolated areas are poor. The World Bank, which manages

the Global Environmental Facility, and the UNDP have been aware of these trends,

but have taken no positive action to stop or deflect the stupidity and

rapaciousness of the PNGFA, or the loggers. This shows an ineptness that is

totally irresponsible, because these events have been a long time in the making,

and were clear to all. The European Union chose to open its smallscale

operations in logged out West New Britain, taking over from the rather pathetic

Ausaid Kandian-Gloucester Integrated Rural Development Project. The major

developmental NGOs WWF, Conservation International, The Nature Conservancy have

all avoided commitments in these strategic areas. Only the under-funded national

NGO, Conservation Melanesia, has made an attempt to operate in the Lake Murray

wetlands of the Western Province. BHP/Ok Tedi Mining Company have begun small-

scale activity along the lower Ok Tedi River, but Placer has chosen to sit on

its hands and watch loggers move in along the Strickland River. The scale of the

lack of planning and foresight by the multilateral agencies, the big

environmental NGOS, and Placer, in dealing with the threat has been breath-

taking.

Western Province

Plans are now well advanced to begin logging over vast areas of the Western

Province. The dangers are that these projects will export cheap logs to overseas

processors, and not be processed in this country.

Administratively the Western Province is virtually ungovernable because of its

huge size and the monumental incompetency of its bureaucracy. To this mixture

can be added an unhealthy dose of unprincipled local leaders aggressively

seeking the quick-buck. One ray of light is with the provincial Forest

Management Committee, which seems to have been struggling over getting some

regulation into the Aeanbak-Kiunga Road project.

Such government as there is, is provided by BHP, the Catholic Church and to a

much lesser extent Placer. Importantly, there is no real landuse planning in the

Western Province, no environmental planning and no commitment to

environmentalism. In this context the decisions to log large areas of this

province are irresponsible.

Rimbunan Hijau have built a veneer mill at Emeti to the South of Wawoi Guavi

Block 1. They extracted major tax concessions from the Skate Government for this

facility. It is said to involve an investment to be about K10 million. The

market for the veneer is not clear. The local market is too small, and the

export market is very competitive.

Wawoi Guavi

Wawoi Guavi Block 1 108,700ha

Wawoi Guavi Block 2 172,400ha

Wawoi Guavi Block 3 207,200ha

Wawoi Guavi Block 1Extension 1 60,730ha

Wawoi Guavi Block 1Extension 2 21,140ha

These concessions, operated by Nuigini Lumber, a Rimbunan Hijau subsidiary, are

nearing completion.

Landholders in Block 3 complain about damage to their land, and the PNGFA in

1995 considered issuing a show cause letter, but withheld the letter because of

the revenue implications of the project.

There are a number of reports which indicate that the environment has been

damaged. The PNGFA has granted two recent extensions. It has used a provision of

the Act which allows it to geographically extend an existing concession without

advertising the project. In this case there should have been a full, public

assessment of the performance of the operator before any decision was made to

extend the permit.

There is no better example of the lack of government control over forest

management, and the domination of forest policy by unaccountable elements. After

the government gave substantial tax relief, RH have built a veneer mill at

Emeti, said to be worth K10 million. The markets for this veneer are not clear,

and there is some prospect that the mill may not operate at capacity.

Kamula-Doso/Strickland Fly

800,000 ha

Kamula Doso Block 1 268,4000ha

Kamula Doso Block 2 265,200ha

Kamula Doso Block 3 267,500ha

The PNGFA have obtained FMAs over Kamula Doso. The project has not been

advertised. There is said to be an NEC decision to give this concession to RH,

but such a decision would be unlawful. It is said that the concession is being

considered by the Provincial Forest Management Committee.

Makapa

255,600ha

There have been reports that Innovision, a company owned by the Sabah

Foundation, that has held the timber permit for this concession for the past

four years without doing anything to develop the area, has asked the European

Union to start a smallscale sawmill project in order to keep the concession out

of the hands of Rimbunan Hijau. Makapa is sandwiched between Wawoi Guavi and

Kamula Doso. RH have long coveted this concession, but it was passed to

Innovision in a dubious NEC decision, without any advertising in 1995.

Aiambak-Kiunga Road

A timber authority was issued to cover this logging project in April 1994. The

nature of the deal was for Concorde Pacific to build the road, but to be allowed

to take logs from an a corridor of 1 km either side of the road. The road is not

all-weather, and needs to be surfaced. Work has stopped on this project due to

the downturn in the log market. The contractor says it has no money to go any

further. There is a controversy over tax concessions sought by the project. The

road is incomplete. There has been no PNGFA or Department of Environment and

Conservation supervision of this project. BHP estimated in 1997 that it would

require K9.6 million to complete the road and surface it. It is said that 100 ha

of rubber trees have been planted as part of the project. Concorde Pacific, the

logging company involved, bought into the Weyborne Hotel in Daru. But the Hotel

burnt down. The Provincial Forest Management Committee have been concerned about

this project. They sent their local forest officers to inspect it on a number of

occasions in the last year. The PFMC reports that the road is not built to Dept

of Works specifications. That issue was muffled by the chairman of the

committee. But it appears that this project is getting protection from senior

officers in the PNGFA, because local forest officers reports are not\being acted

on.

East Awin FMA

203,900ha

The PNGFA has called for tenders for this concession. Sine Darby is said to be

the favorite contender.

At first East Awin was said to have a component of 60,000 ha rubber plantation,

to be built in an area occupied by Irian Jayan refugees. New reports have it

that rubber is no longer in favour, and now oil palm is preferred. Other reports

say that the soils are unsuitable for oil palm. No one seems to want to address

the issue of the large numbers of labour required for oil palm, whether the

refugees will want to work to low rural wages, or will the developer seek to

import labour, and from where? These are difficult political questions that need

to be answered as the social and environmental consequences of oil palm are

well-known.

Sandaun Province

In a way the forests in the Sandaun Province can be thought of together with

those in the Western Province, separated only by the central mountain ranges.

These forests together are the new, and the last, logging frontier in Papua New

Guinea.

Aitape Sissano

Little has been heard of the Pai/Damansera oil palm project in 1998. There is a

report that about 1000 ha have been planted with oil palm, but the report is

unconfirmed. The Timber authority authorized the clear-felling of 5000 ha. It is

now controlled through Kulim Bhd, and ultimately owned by the Johore

Corporation. What has always been clear is that the project was

undercapitalised, and the intent of the investors was to use the profits from

the log sales to build up the oil palm project. Now log prices are down and

there is a financial crisis in Malaysia. The project looks like it is doomed.

The Lou Oil Plam project was planned for the catchment area of Sissano Lagoon, a

marine area of high biodiversity priority. The Tsunami at Sissano may have

disrupted these plans. It is too early to say. On the otherhand, there are

proposals to relocate the Sissano population in-land. That could have the effect

of clearing the way for oil palm. But an number of things mitigate against

resettlement including problems of land tenure, and the rich biodiversity of the

lagoon as a source of food. The world economic situation does not look well for

encouraging Malaysian or other Asian investors.

Nuku

140,000ha

The PNGFA has completed the incorporation of land groups in the Nuku timber

area. The next step will be the signing of the Forest Management Agreement.

Bewani LFA

We have a report that says that logging recommenced in Bewani, once the lowering

of the log tax was announced.

Gulf Province

The Kikori Valley

There is a dispute involving a company capitalised by WWF US, Kikori Pacific

that purchased 800m3 of logs from Turama Forest Industries, a logging company.

Kikori Pacific was established to promote ecoforestry in the Kikori Valley. The

logs from TFI were from an unsustainable logging operation in competition with

WWF's efforts to promote FSC sustainablility in the Kikori Valley, and should

not have been purchased by KP for that reason. Kikori Pacific maintains that the

purchases did not cause any concern to landholders. But other sources say there

were a number of protests over the purchase.

Landholders, it is said, protested because it deprived them of a market for

their logs. Mara Akaro, Chair of Iviri Timbers, Joel Kaware, Chair of Hope

Forest, and Jack Kawari President of the Kikori Local Level Government are all

said to have protested. Meg Taylor, a board member of WWF US and Chair of

Conservation Melanesia protested. Rex Naug protested, although we believe that

WWF US is denying that his sacking had anything to do with his protest.

Turama

It is difficult to judge what is going on in the new Turama concession. TFI

moved its machinery out of the Kikori catchment over to the Omati river in

August. The company appears to be in mothballs.

Hekiko

195,727ha (net operable area 63,197ha)

We have been told that no timber permit has been issued in respect of the Hekiko

concession.

East Kikori

Rimbunan Hijau packed up its machinery and put them on ship and sent them to

Siberia. As far as we can tell, the project had not been operating for some

time, and this was, in part used as a publicity stunt.

Vailala Block 1

88,680ha

No export logging is going on. A little bit of sawmilling is being done. The

project appears to be in hibernation. The permit holder is Long Kong. It took

over from Shisei, after the PNGFA threatened to close Shisei down for

inactivity. The Chinese Government intervened and somehow the permit was

trasferred to Long Kong. Another example of PNGFA incompetence. The project

should have been shut down, the ILG process followed, and if the landholders

agreed, only then put out to tender.

GTZ have pulled out of Papua New Guinea, leaving debts to NGOs, and projects

without supervision. The smallscale demonstration project outside Ihu is without

supervision.

Vailala Blocks 2&3

267,820ha

In July it was reported that Rimbunan Hijau had gathered a huge amount of very

new machinery together in a compound. Log production had ceased. The project was

in hibernation.

Southern Highlands

Oil and gas industry and WWF

The Southern Highlands Provincial Government has signed a K17 million loan

agreement with the National Provident Fund to construct 4 roads. One of the

roads will connect the Southern Highlands with Chevron's pipeline access road.

Previously Chevron has maintained the private nature of this road along its oil

pipeline to the south coast. The road is designed for light vehicle access only.

The former premier Dick Mune has published a newspaper advertisement saying that

he has advised the NPF that if he is returned to office he will not honour the

loan. In any case he argues that the SHPG does not have the revenues to pay off

the loan. Obviously, the road would cost a lot more than K17 million.

The main environmental problem with this proposal, is that neither the Southern

Highlands or the Gulf rovincial Governments have an environmental or land-use

plan, nor do they have any obvious commitment to environmentalism. It would not

stretch anything to say that these governments had a angerous, narrow, money-

grabbing, attitude to their land and resources. In particular the worry is that

he road would open up country to logging.

Chevron and WWF (US) have maintained a public silence on these important

matters.

Mount Bosavi

No FMA has been signed in this area. ICRAF, EDO, Greenpeace held an eleven day

workshop in July at Fogomaiyu. WWF US ran womens' workshops around Mt.Bosavi in

late August and early September.

WWF US are planning Wild Life Management Area status for Mt Bosavi. Mount Bosavi

landholders say they will hold a cultural festival at the end of November 1998.

Oro Province

oil palm

There is evidence to suggest that the World Bank, in contravention of its own

rules that prohibit loans for projects in tropical rainforests, funded part of a

clear-fell oil palm scheme in the Oro Province. The irony f this is that Austaid

and other donors, including the World Bank also funded the protection of the

Queen lexander Bird-Wing Butterfly, which is now threatened by oil palm and

logging activity. In a way this emonstrates the ambiguity of World Bank and

Austaid policies. To support logging, and conservation at he same time.

Managlas Plateau,

Landholders seem to be organising themselves well here to resist logging. A

boundary exercise has been completed with assistance from Partners With

Melanesia and the Education Development Centre.

Landholders have a thriving betal-nut trade going with Port Moresby. Coffee

exports are hindered from Managlas because of high freight costs and regulations

which create monopolies over who can buy and sell coffee.

Collingwood Bay

There were runours that the PNGFA was beginning to put in Incorporated land

Groups in Collingwood Bay. Greenpeace visited in August. There had been no ILG

activity up to that point in time.

Milne Bay Province

East Collingwood Bay FMA

121,500ha

ICRAF and the Melanesian Environment Foundation did a joint patrol with

landholders in July from Agaun to Biniguni.. Two thirds of this FMA is either

mountainous, grasslands, or in areas where the landholders do not want a logging

project. This is an impoverished area, in a rainshadow, with difficult access to

any markets. The area was hit badly by Cyclone Justin in 1996. The estimated

loss was 400,000 cubic metres of timber. The fallen logs were allowed to rot, at

a conservatively estimated loss of K20 million. There is an area near the coast

where the landholders favour logging, but it is too small to satisfy the PNGFAs

own criteria for "sustainability". Part of the problem lies in a conflict of

interest between a senior public servant in the Milne Bay Provincial Government

who is also a director in the "landowners company". The FMA was rammed through

the Provincial Forest Management Committee, which incorrectly certified the

consent of the landholders to the FMA.

CDC and the Sagarai Gedaisu TRP

118,951 ha expires 2002

The operating company Ulabo Timbers went into receivership in 1992. The

receiver, Stinton Spence, whose office is next door to Warner Shand lawyers

(Rimbunan Hijau's lawyers) contracted the logging to Saban Enterprises ( the

contractor in the adjoining Gara Modewa TRP.), a subsidiary of the Rimbunan

Hijau group. Since then there has been an arrangement whereby the debts of Ulabo

Timbers are paid off by logging. With the timber permit coming to a close in

2002, there has been an attempt to set up a "landowners company" to take over

the timber permit. But it is being resisted. One landowner group has taken its

land out of the TRP. Another is group trying to do the same.

In the meantime we know more about the burning of logs associated with the

Commonwealth Development Corporation clearfelling in late 1997. It is said that

CDC needs 20,000 ha of new oil palm to compensate for trees that are growing old

and nearing the end of their prodictive life. The Sagarai Gedaisu Timber Permit

allows 10,000ha of forest to be cleared for agriculture. 300 ha have so far been

cleared at Borowai and Mariawata. Landowners at Wegulani and Nigo Nigo are said

to be leasing their land to CDC. 4000ha has been prepared and clear-felling will

start soon. Another 7000 ha is in the pipeline for clearfelling. The clearing

and harvesting of the timber is being carried out by Milne Bay Industries, a sub

contractor to Saban Enterprises. It is not clear whether MBI is selling the logs

it clears.

MBI is a "landowner company" set up by Saban, and had the manager of Saban as

its manager.

The catch in all this is that under existing regulations, CDC cannot harvest the

logs from the TRP area.

They are meant to leave them to rot. Logs we saw at the clear-fell in December

1997 and January 1998 were tagged for export. This was the practice of CDC in

the past, when it first opened up its operations in the Sagarai Valley.

Madang Province

Josephstaal FMA

98,685 ha

The Nature Conservancy appear to have won the timber permit in this concession,

although there has been no formal announcement. TNC can anticipate considerable

landholder resistance because of the strong lobbying on behalf of a Korean

logging company. The other two contenders for the permit ( one Malaysian ) are

unlikely to be in a position to develop the concession owing to currency

problems in those countries. TNC also seems to have capitalisation problems

seeking assistance first from UNDP, and now, so it is said, from the World Banks

IFC.

East Sepik Province

Hunstein Ranges and the April Salumei FMA

521,500ha

The PNGFA finally handed over the FMA, in September 1998, signed in December

1996, to landholders. Landholders who wish to withdraw from the FMA may do so.

WWF are now in a position to implement development proposals linked to the

declared Wild Life Management area. The worst logging threats to this beautiful

area seem to be under control.

East New Britain

Warongoi

The Supreme Court appeals lodged by loggers, the State and the PNGFA against a

judgement of the National Court, which awarded K2.3 million damages in favour of

landholders, are still proceedings. A hearing date for the appeal is yet to be

set.

Mukus Tolu FMA

65,000ha.

Less than half of this concession has millable timber. It is too small to be

sustainable. The timber permit is held by Gasmata Holdings ( company search

reveals that the current Minister for Forests, Peter Arul is a director). In

June Gasmata was in trouble because it had not formally signed the project

agreement.

Recent reports indicate that some logging is taking place along a road-line, but

it is unclear if this is part of the FMA or an adjoining project. The project is

a good example of the irresponsible administration of PNG forests by the PNGFA.

West New Britain

Asirim-Gasmata roadline project

This is another road-line timber authority, with Gasmata Holdings (Peter Arul,

Min for Forests a director) as the contractor. The conditions on the timber

authority allow clear-felling 40 meters eitherside of the base-line. This is not

enough to make the road construction economical. If this project is to proceed

it will need a subsidy ( Austaid was in mind ), or the regulations maybe lifted

and the contractor given permission to log up to 1 km either side of the base-

line. With you know who as the Minister...watch this space...

Manus

GTZ have pulled out of Papua New Guinea, and withdrawn technical support from

the landholder milling operations on Manus.

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