Illegal logging activities in PNG

Background
The legal framework under which the forest sector operates is enshrined in the PNG constitution, the Forest Act 1991(as amended in 1996/2000/2005) and a number of relevant acts of parliament as they relate to the development, management and utilization of PNG’s forest resources. All harvesting operations must operate under procedures as laid down under the PNG logging Code of Practice 1996 and the Environment Act 2000.

The National Forest Board is the legitimate body that is tasked with advising the Minister for Forests and the government on forest policy and legislative issues; and is tasked with the implementation of government policy over a resource, which is privately owned.

The national goals and directive principles as set out in the constitution provide the basis for forest policy, and forest policy formulation in particular is guided by and draws strength from the fourth goal of the constitution. The fourth goal of the constitution forms the cornerstone for forestry policies, which is to ensure that the forest resources of the country are used and replenished for the collective benefit of all Papua New Guineans now and for future generations. I.e. sustainably managed forests in PNG

Under the PNG Forest Act and amendments of 2005 to ensure the legal requirements for resource acquisition and allocation are better understood and followed in a simplified form, the PNG Forest Authority has translated the law into a sequence of thirty four (34) step by step procedures. The 34 step process is used to explain the complexity of legal requirements of resource acquisition and allocations to stakeholders such as landowners, provincial authoritities, investors and other interested parties involved in the forestry sector.

Sections 90A, 90 B, 90C, 90 D and 90 E of the PNG Forest Act deal with

• (90A) large scale conversion of forest to agriculture or other land use;
• (90B) dealing with applications for agriculture or other land use
• (90C) large scale conversion of forest to road
• (90D) dealing with applications for conversion of forest to road
• (90E) cancellation etc of authoritities

Illegal logging activities in PNG fall under the ruse of “so called agricultural development projects” where application is made to establish large scale agricultural projects on traditional lands through devious means. By illicit activities with authorities and others the parties involved attempt to bypass the legal requirements required to nationally assess the proposed project for its applicability, commercial viability, environmental acceptability and whether it is a genuine agricultural development.

In practice the agricultural project never happens but the forest resource is taken and exported without meeting:

• all the statutory requirements nor payment of forest charges as specified under the Forest Act of PNG
• any environmental conditions re large scale harvesting or agricultural activities as prescribed under the Forest Act and the Environment Act of PNG
• any infrastructure development for the traditional owners

Definition of illegal logging in PNG
The PNG Forest Industries Association and its members support the development and implementation of responsible and constructive logging laws and forest management regulations in all timber producing regions of PNG. PNGFIA promotes compliance by all parties with national, provincial and local laws and regulations pertaining to logging and forest management.

PNGFIA and its members believe forest law enforcement is a sovereign right and responsibility of governments through laws, regulations, enforcement and sanctions. PNGFIA define illegal logging to be any activity in contravention to the laws and/or regulations of the nation. PNGFIA condemn illegal logging.

PNGFIA members pledge to conduct trade in wood products in compliance with all applicable laws and regulations, not only of the timber producing countries but also those of the countries of destination. In addition all shipments of wood products are accompanied by the requisite documentation issued by the proper government authorities.

PNGFIA and its members hold the position that legal export certificates signify legal trade. (In fact negotiations are underway to strengthen that legal compliance with the PNG Department of Trade and PNG National Forest Service). Therefore the responsibility for proving legality – legal harvesting – occurs prior to shipment. It is up to the exporting country to enforce and declare legality through its domestic forestry, customs and other regulatory bodies.

In the case study given, the PNGFIA and its members rule the case study illegal because the authorities have failed to enforce the National Forest Board (NFB) directives of July 2005 to stop all activities and investigate the proposed agricultural project. From the 1st of September National Forest Board Meeting again the project was ruled illegal and the NFB directed its authority to stop the project. YET the NFS has not acted using the excuse that no NFB minutes have yet been issued to direct the NFS to stop it (a total lack of governance and administration as the acting MD etc were present in the NFB meeting). Those minutes were finally issued on the 27th of September 2005.

Australian Initiatives re Illegal logging in the tropics
Coincidentally the illegal logging activities in PNG occurred at the exact same time that Australia government, industry and academics promote a new platform of illegal logging through a major international conference on” Forests, wood and livelihoods” hosted by the Crawford fund in Canberra in August 2005, which incidentally had no tropical forest industry participants. Yet PNG NFS has currently six Australian advisers???

David Kalmowitz Director General for the Centre for International Forestry Research raised at the recent international conference on” Forests, wood and livelihoods” hosted by the Crawford fund in Canberra in August 2005 and opened by the Australian Foreign Minister Alexander Downer, advised Australia that it is to the north of Australia where the country’s national; interest and forests must intersect – in the tropical rainforests of the Asia pacific. Kalmowitz pointed out that if forestry no longer provides jobs and income to the needy – whether due to over-harvesting, illegal logging, fires, conflict or simply bad management – regional stability will suffer and dependence on Australian aid may increase.

Much of Australia’s aid focuses on helping governments become more efficient, transparent and accountable – the hallmarks of good governance. And yet for much of the region, forests are synonymous with exact opposite – bribery, tax evasion and human rights abuse. It is no wonder Indonesian President Susilo Bambang Yudhoyono declared fighting illegal logging as one of his Government’s top priorities along with eradicating corruption.

For him it is not just a question of a few billion dollars in unpaid taxes. It is about establishing the rule of law and attracting international investors.

The Australian Foreign Minister the right Honorable Alexander Downer in his opening address to the conference quote “although forestry has been a frequent item on the Australian political agenda, the role of forestry in the Australian aid program has not been subjected to public scrutiny. Our focus is the need to maintain supplies of forest products and forest services for human consumption during the next 20-30 years. The scope extends from the management of natural forests and woodlands to plantation forestry” unquote

Well recognized financial commentator in PNG Simon Fraser at the PNG budget breakfast launch in 2003 reported that if PNG were to rely upon an export led recovery, it is important to establish the viability of such a recovery on an industry by industry basis. Some 75 % of PNG’s exports are derived from non-renewable resource. In looking at the PNG timber industry, Frazer emphasized the point, that although currently PNG is in effect dealing only with a small segment of the market, given that exports on non-renewable resources might run out one day, then the timber exports and development of a long term sustainable industry become increasingly important.

To emphasize how critical is that point, Ok Tedi Mining through its offshoot – the PNG Sustainable Development company is now calling for expressions of interest for forestry developers (12 September 2005) to develop alternate long term sustainable and renewable forest industries in the Western Province surrounding the giant Ok Tedi gold/copper mine because of the mine closure in 12 years time. Quote “as a matter of priority and in anticipation of the closure of the Ok Tedi Mining limited on or about 2012, it is imperative for alternate economic and revenue generating sources such as agriculture, fishery, eco-tourism and forestry be promoted and established as soon as possible in order to sustain and broaden the economic base of the western province beyond the mine’s closure”.

Fraser makes the point that forestry the whole world over is a very emotive topic and it takes a brave person to take on the environmentalists in the pursuit of economic development. Mark Latham former opposition leader in Australia found that out when dealing with the forestry issues in Tasmania. Even the World Bank – as big an organization as it is, found that out in PNG when it tried over several years to enter into this area of significant national concern to find it had to abort its national forest conservation project after 7 years .

Fraser’s parting comments re the forest industry to be legal etc was that real governance and profitability be established through the use of audit procedures, and used that well known saying – “in God we trust, all others we audit” as having much application re the legality issues.

Some of the loudest critics of illegal logging in PNG include WWF, who have been condemned internationally for logging mangroves. Further to that WWF continue to promote the “eco-forestry” concept which avoids all forestry regulations by exploiting the 500 m3 exception, retained specifically for forest harvesting for private, traditional use by the villagers.

CASE STUDY PNG ILLEGAL LOGGING
Purported Oil Pam Development Central Province – Vicinity Galley Reach Holdings

• Baina Agricultural Development Project PO Box 68 Konedobu
• Weekend of 20/21 August 2005, a large barge discharged at the Galley Reach Inlet 17 D7 bulldozers, 1 x 40t Kotmatsu log loader; 2 x 20t excavators; large fuel tanker; 9 log jinkers, 4 x generator sets; 3 x containers and some Toyota utilities
• The equipment came direct from Indonesia to Galley Reach Inlet together with Indonesian operators
• The MD of Galley Reach was informed that the equipment was for an oil palm project being sponsored by the Central Provincial Governor in west Central Province
• NFS had advised that the equipment was allowed to come in duty free because they were given tax exemptions as they were going to an undeveloped area of PNG - hence tax exemptions for 10 years and that PNG IRC have given clearance and memo signed by PM. Subsequently it was revealed that Dept of Treasury and IRC withdrew the exemption as they did not believe that “it was a bona-fide agricultural development”. Import duties paid on the equipment were K347,000 (approx.)
• Also PNG quarantine had examined the oil palm seedlings and given their okay to have them imported. However when Galley Reach inspected the containers delivered on the barge, there were no oil palm seedlings.
• The importer of the equipment, recorded on the import entries, is Elegant Tropical Ltd.
• Galley Reach Holdings were informed that the development shelf company is called NASYL 98 who applied for 124 TA’s (approx.) but only four were issued back in January 2005 by NFS for an agricultural development project for oil palm but where the logging company can export the logs – from within the area reserved for wood processing for Port Moresby. The 4 TAs issued are all 10kms apart but no road construction TAs were issued. The log harvesting currently underway as part of road building to access and join up the 4 TA areas is not licensed in accordance with the Forest Act.
• Company searches of NASYL No 98 Ltd show that the registered address and principal place of business is Kerawara Ltd PO Box 7382 Boroko with shareholders being Tom Aisome (PNG citizen); Marineth Gomale (PNG Citizen); Kung Won GOH (Malaysian); Daniel Koma (PNG citizen); Sylvia Tsikula (PNG citizen) and Geok Moi Yap (Malaysian.) all of PO Box 7382 Boroko.
• Company searches of Baina Agricultural Development Board Limited show that the registered office and principal place of business is Kerawara Ltd with shareholders being Linus Aia (PNG citizen and landowner representative on the Central Province Provincial forest management committee); Joe Bagoro (PNG citizen); Kung Won Goh (Malaysian of Kerawara Ltd); Aihi Ikupu (PNG citizen); Goh Kung Won (Malaysian of Kerawara Ltd) Raphael Yibmaramba (PNG citizen and administrator of Central Province)
• This project is inside the domestic wood processing zone for Port Moresby.
• It is understood the original 4 TA’s approved for so called agricultural development were promoted by Jason Huong of Kerawara.
• NFS advised that the four TA’s are 10 kilometres apart and outside the 100 km domestic wood processing zone for Port Moresby (all log exports excluded from occurring within that zone). NFS have now revised the location of the TAs to within 60 to 90kms from Port Moresby.
• SGS have been approached to provide log tags based on TA # 394 Baina Agro Forestry Area 3 of Woipi Central. This TA signed by Acting MD Terry Warra on 17/1/05. The person who applied for the TA’s was a Linus Aia. He is known to be purporting to be the head of the ILG’s and is on the Central Provincial Forest Management Committee
• Because of the proposed project ignoring Section S90A of the Forest Act together with allowing log export within Port Moresby’s domestic wood processing zone affecting all of the FIA downstream wood processors, PNG Forest Industries Association did a circular paper re this proposed agricultural development, which was circulated to all NFB members on 5th July 2005.
• The National Forest Board at its board meeting of 6th and 12th of July, directed the then acting MD Terry Warra to provide a report as to why were so called agricultural TA’s being approved near Inaina without being reported to the Board for oil palm development when it is known that oil palm will not productively grow there because of the dry season.
• However, no report has been provided to NFB members by August to the NFB members.
• Then on weekend of 20/21 August 2005, an enormous amount of logging equipment arrived directly to Galley Reach holdings inlet.
• At the September NFB meeting, two conflicting reports were presented by the NFS to the Board. The first report deliberately misreporting and understating the illegality of the logging activity. At the insistence of the NFB industry representative a revised report was presented, describing some of the illegalities occurring.

PROGRESS TO DATE
Now a month later this activity has still not stopped.

What process of forest administration and governance does PNG have? The NFS is ignoring its’ Board’s directives at will. Why is it that the NFS cannot work with responsible industry to ensure a sustainable future for PNG’s forests?

This continued failure by the NFS will result in the PNG Forest Industries Association taking the NFS to court to ensure the NFB decisions as made under the Forest Act of PNG are administered.

Australian Involvement
Coincidentally the illegal logging activities in PNG occurred at the exact same time that Australia government, industry and academics promote a new platform of illegal logging through a major international conference on “Forests, wood and livelihoods” hosted by the Crawford fund in Canberra in August 2005, which incidentally had no tropical forest industry participants. Yet PNG NFS has currently six Australian advisers???

The PNG industry wonders whether the National Association of Forest Industries is behind the illegal activity because of the lack of action. This seems to have semblance of truth when one reads NAFI news issue # 75 – 22 August 2005 when NAFI’s chief executive Catherine Murphy reported – quote” Conservationists continue to push for the creation of additional forest reserves, reducing the industry’s ability to meet our domestic timber needs. As a result, Australia has been forced to increase imports of sawn timber and furniture, where those timber resources may have been obtained from illegally logged forests”. Unquote she aid.

Is the Australian/New Zealand forest industry really wishing to create an illusion of total disrepute of the Pacific Islands forest industries in order to take over those markets – it would appear that now there are vested interests working against one another here.

Why is it that such unbalanced activities are being undertaken by Australia? Australia has been ignoring international convention in not seeking advice from the ITTO (International Tropical Timber Organisation) to which they are a signatory under United Nations charter instead of attempting to utilise remnant organisations not directly involved in the growing and production of tropical timber. Specific reference is made to the World summit workshop sponsored by the council (ITTC) of ITTO on illegal logging held on 19/20 July 2004 between the ITTO trade advisory group (TAG) and the Civil Society Advisory group (CSAG) in Switzerland with the purpose to make specific recommendations to the IITC and member states,

ITTO is an intergovernmental organisation promoting the conservation and sustainable management, use and trade of tropical forest resources. Its 59 members represent about 80% of the world’s tropical forests and 90 % of the global timber trade.

Concluding comments
Illegal logging and illegal trade of forest products are major concerns of both the ITTO trade advisory group (TAG) and the Civil Society Advisory group (CSAG). Rightly or wrongly, much of the tropical timber trade is now characterized as illegal. This problem has serious social and environmental impacts, undermines honest industry, discourages investment in responsible forest management and diminishes forestry’s contribution to social and economic development. This is not a new problem, but one that has long plagued the forest sector globally.

From the workshop on illegal logging and trade sponsored by ITTC for the TAG/CSAG Switzerland 19/20 July 2004; both TAG and CSAG recognized that

• All countries – producer and consumer – have a role and responsibility in helping to eliminate illegal logging and illegal trade
• Illegal production and trade is not only an issue of timber nor an issue only for tropical countries. There are numerous problems in other sectors and in countries in the temperate zones.

MEANWHILE

• valuable cabinet woods are being illegally obtained from PNG at the expense of traditional owners rights, downstream processors and the artisans who work within the downstream processing and furniture industries of PNG
• a fictitious agricultural project is being promoted on traditional lands for oil palm production in a climatic zone where technically oil palm will not grow and produce fruit
• A complete lack of forest administration and governance has been demonstrated by the authorities, specifically the PNG National Forest Service who are assisted by six Australian advisers. In terms of technical input into governance and administration what role do the Australian advisers play?