• Papua New Guinea is now one of only two tropical timber-producing countries to employ an independent monitoring service for log exports at arms’ length from the government, as Jim Bowden reported on June 23, 2008
The Australian Institute of Criminology (AIC) has been engaged by the Papua New Guinea forest industry to examine ‘unsubstantiated claims’ by Greenpeace and other environmentalist non-government organisations (ENGOs) that timber traders are operating illegally.
This dramatic turn in the heated forest debate surrounds reports to a high-powered delegation of Australian government ministers and parliamentary secretaries attending the recent PNG-Australia Ministerial Forum that the forestry sector is riddled with corruption.
The PNG Forest Industries Association (PNGFIA) has complained to the AIC, an Australian government legal research agency, that a report on imports of “illegal timber” fails the institute’s charter obligation to produce impartial and high-standard research.
The report repeats Greenpeace claims that an Australian subsidiary forest company Rimbunan Hijau imports and sells illegal timber in Australia and that illegal logging is prevalent in PNG. The association says that this is untrue and that the report defames the Australian company.
“The report is full of errors; it underestimates plywood production in PNG by two-thirds and draws mostly on reports by Greenpeace and the Australian Conservation Foundation,” PNGFIA chief executive Bob Tate said. “These are political documents, which are heavily slanted to push anti-forestry positions, are notorious for sensationalist claims about illegal logging and forestry which cannot be substantiated.”
“There is ample material on the record from industry and government sources that illustrates this, but virtually none has been drawn on in the report. As well as being full of errors and slanted, it is outdated.”
“Rimbunan Hijau and the PNG forest industry have taken the lead in adopting independently verifiable systems to demonstrate the legality of timber production. This is on the public record and the PNG industry was commended by the Australian government for taking this action.”
“The industry has also offered to work with the Australian government to develop pro-climate change forestry strategies.”
Mr Tate says there is also new evidence that there have been no large-scale log smuggling operations over the past 12 years and that appropriate taxes and royalties have been paid on all tracked export logs.
In a major step towards legality verification, the PNGFIA has engaged Swiss firm SGS (Societe Generale du Surveillance), one of the world’s most credible inspection and certification bodies, to audit timber trading.
“PNG is now one of only two tropical timber-producing countries to employ an independent monitoring service for log exports at arms’ length from government,” PNGFIA president Tony Honey said.
Implementation of the program – supported by the Australian Timber Importers Federation – means the industry will be able to constructively engage with key stakeholders, including civil society, commercial business organisations and NGOs, on the future of PNG’s forest industry.
“There have been many major changes,” Mr Honey said. “A new Environment Act and a modern code of practice make it a very rigid process to get a timber permit nowadays.”
“The PNG forestry industry has had its problems,” says Terry Warra, acting managing director of the Papua New Guinea Forest Authority (PNGFA), which is charged with managing the development of forest resources as a renewable resource.”
He said unsustainable practices and corruption were identified as far back as the1 980s and more recently PNG had addressed accusations of illegal logging, “accusations that both industry and the government argue are no longer applicable.”
He says the situation is not so much about illegal logging in PNG, but that legal logging is still carried out under old permits that allow unsustainable practices.
As Mr Warra explains: “The introduction in 1996 of a new Code of Practice for logging and changes to the National Forest Policy and the Forestry Act means that a lot of the problems that existed in the 1980s have been done away with. With the new Act, there is a strong requirement that we go out and carry out a development options study.”
“We also get the landowners [97% of PNG’s forests are owned by traditional landowners] to set out what they want the investor to do within the area. Most of those operating on old permits are under review and we’re trying to bring them round to operating on a sustainable basis.”
The PNG Forest Authority intends to phase out logging of natural forests in the medium term. “We want the plantations to take over and start to replace natural forest logging,” Terry Warra said.
“We have a lot of degraded areas – areas covered in grass and areas that are not being put to good economic use. We want to replant those areas and we want to encourage private investment in them.”
The move to increase plantation development in PNG will not only focus on high-yield timbers, it will also allow the industry to focus on more high-value tree species.
Tony Honey said the PNGFA was encouraging timber companies to achieve sustainability certification, which would assist exports and encourage landowners to develop their own agro-forestry businesses.
“While the export figures don’t yet reflect the move to adding value, significantly, 50% of new logging permits now being issued have a downstream processing component,” Mr Honey said.
“Many timber companies are looking beyond woodchips and logs to treated timber, engineered plywood and veneers, and even furniture and prefabricated houses, as a way of developing more value from the raw material.”
Mr Honey said ensuring forest products met Australian building standards was crucial to export success. Australia is the leading buyer of PNG sawn timber, taking more than 35% of annual exports. Other markets include Japan, New Zealand, Malaysia, Denmark, the Netherlands and French Polynesia.
According to Mr Honey, the high costs of maintaining infrastructure and the ongoing burden of rule changes and taxation are a challenge. That said, the industry is also the beneficiary of a 40% import tariff on forest products, which is expected to be phased out in coming years.
“Increasing environmental awareness and attention to community concerns are now a fact of life in the forest industry here,” he added.
Tim Curtin, a former PNG Treasury official and now an associate on the Asia-Pacific program at the Australian National University, Canberra, said comprehensive audits of the PNG timber industry sponsored by the World Bank in 2000-2004 found full compliance with the country’s Forestry Act.
“These were disappointing findings for the environmental NGOs who have been establishing their own definitions of illegality, whereby even legally sanctioned logging operations are nonetheless illegal if they are not being conducted ‘sustainably’.”
“Their arbitrary definition of sustainability is a logging cycle of not less than 40 years or even as long as 75 years, even though it was the World Bank that imposed the 35-year cycle in both Indonesia and PNG,” Mr Curtin said. “None of the NGOs provide independent authority for determining that tropical forests require at least 40 years to regenerate. Tropical timber specialists working in PNG and the Solomon Islands have demonstrated that shorter logging cycles are perfectly sustainable.
International environmentalist Forest Trends endorses claims that a resource volume of 44 cub m/ha is “unrealistically” high – and this for a tropical forest, while in drought-prone Australia, volumes for eucalyptus that never reach 50 dbh – the minimum acceptable level for PNG’s log exports to China – reach 180 m3/ha.
PNG’s only plywood operation in 2006 achieved an average yield of 5.6 m3/ ha from its plantation resource of 9000 ha. (130 m3 from the clear-felled 35-year-old coupe of 277 ha. and 36 m3 from thinnings from coupes of 292 ha) – but that is “unsustainable” even after 50 years of continuous harvesting, according to the ENGOs.
The facts on sustainability of logging in PNG are much less dramatic. The largest log timber exporters from PNG are Vanimo Forest Products, Stettin Bay Lumber Co, Open Bay, Jant, Rimbunan Hijau, and PNG Forest Products (PNGFP). All of them are fully compliant with all relevant PNG legislation, and all have been in operation for at least 20 years – more than 50 years in the case of PNGFP.
Mr Curtin questions that if their harvesting was ‘unsustainable’ and therefore, according to the World Bank and its NGO associates such as the World Wildlife Fund, ‘illegal’, how have they managed to maintain production for on average 30 years or more?
The NGOs that unite in claiming that PNG’s forestry industry is ‘unsustainable” and thus ‘illegal’ base themselves on unsubstantiated allegations that any timber harvesting that exceeds 0.7 m3 a year is illegal.
That amounts to about two wheelbarrows of wood per hectare a year!
Mr Curtin asks: “Why were PNG’s timber exporters castigated at the Eco-Forestry Forum for exceeding this absurdly low level when, for example, the Tasmanian Labor government’s state-owned forests routinely harvest more than 100 cubic metres per hectare over a 17-year cycle or six cub m per hectare per year?”
Meanwhile, the latest anti-PNG forests report prepared by the School of Botany and Zoology at the ANU claims that forest clearing in PNG releases 270 million tonnes of carbon dioxide a year.
“That is a gross exaggeration, if only because it depends on the erroneous assumption that neither agricultural activity by PNG farmers nor regrowth of forests that are sustainably logged take up any carbon dioxide,” Mr Curtin responded. “It may be a surprise to the report’s authors, but growing trees and food crops really do absorb carbon dioxide – and even palm oil trees take up more CO2 per hectare each year than old-growth forests.
“More generally, the proposal for PNG to earn carbon payouts by stopping all agricultural and forestry activity reminds one of the great ‘successes” of the sit-down money system for Aboriginal Australians in the Northern Territory.”
“Papua New Guineans may actually enjoy working for a living in their food gardens, oil palm smallholdings, and earning good money as skilled artisans in the country’s plywood and veneer plants that employ some 2000 workers.”
Alan Oxley, a principal of Melbourne-based ITS Global and an international trade strategist, questions the validity of Greenpeace’s assessment of legality verification systems.
“Greenpeace has advanced a set of criteria which requires a ‘time-bound commitment’ to adopting FSC-certified forestry management,” he said. “The report criticises many other verification systems for lack of transparency but fails to mention it has a proprietary interest in FSC as a founding member and is a member of one of FSC’s governing bodies.”
Mr Oxley said Greenpeace had an established record of targeting businesses that did not adopt its preferred forestry and timber sourcing policies.
“It usually promotes the FSC system set up by the World Wildlife Fund (WWF), which companies must pay to join. FSC faces increasing competition from legality verification schemes, which offer verification without onerous procedures and costs that can be prohibitive for developing countries.”
