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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
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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