Forest Authority holds regional seminar on FLEG

The PNG Forest Authority (PNGFA) recently held a South Pacific Regional Seminar on Forest Law Enforcement and Governance (FLEG) attended by several stakeholders and international bodies, including ITTO, World Bank, SGS, CIFOR, Australia's Department of Forestry and the EU.

The seminar was to serve as an input to a study on forest law enforcement in PNG being funded by ITTO. The following are some highlights of the discussions.

'Forest sector is PNG's second largest export earner'

Dike Kari, PNGFA Acting Managing Director, explained the contribution of the forest sector to PNG economy. The sector contributed 3-5% to the country's GDP. Over the last six years, annual foreign exchange earnings from forestry had averaged $156 million and reached $173 million in 2005. This made forestry second only to the mining and petroleum sector as an export earner. The sector accounted for around 5% of the exports and, for over a decade, it had contributed an average of 30% to PNG's development expenditure. PNGFA estimated that the sector directly employed 9,000 people (4% of formal national employment), mainly in the rural areas. In addition, the sector was a major contributor to rural infrastructure development, including roads, airfields, air services, health clinics, services and schools.

Timber royalties were paid to landowners at a standard rate of 10 kina ($3.3) per m3 of log harvest whilst premiums were paid on an agreed percentage of the log export value.

'Landowners seek more voice and participation'

Gonene Kurokuro, landowners' representative, acknowledged the contribution of the forest sector to the country's economy but said that landowners had largely been mere spectators in the decision-making process, management and use of their resources. He urged the government to give landowners more voice in decisions and include their representatives in the board for the screening and allocation of forest concessions. Mr. Kurokuro said that illegal activities in PNG occurred due mainly to:
' Politic influence: some logging companies having direct access to politicians sometimes by-passed certain allocation processes. This was due to substantial pressure from politicians on the PNGFA management.
' Weak enforcement and monitoring: Non-existent field officers in project areas due to lack of logistical and financial support, resulting in logging companies furthering its own boundary permits into new areas.
' Laxed enforcement: rules and regulations were not strictly enforced resulting in non-compliance to penalties by logging companies.

He requested the government to assist landowners in taking up forest concessions. The assistance would be in the form of training and relaxed loan policy to allow for landowners to participate actively in the forest industry. While eco-forestry had a place in PNG, the majority of the key local NGOs agreed that commercial timber harvesting was important for the PNG economy and should continue albeit on a sustainable basis.

Some environmental NGOs (ENGOs) withdrew participating in the seminar following PNGFA's request for them not to raise the revised National Forest Plan in their presentations, a plan which had been legally challenged by NGOs before the court. PNGFA explained that taking the issue up would constitute contempt of court.

'SGS refutes claims of rampant illegal logging in PNG'

Bruce Telfer (New Zealand), general manager of Socit Generale de Surveillance (SGS) PNG office, explained the role of SGS in ensuring that all logs exported from PNG were legal. In 1991, the PNG Government developed the new Forestry Act and a new forestry policy to address the shortcomings of the previous forest policy developed in 1979. The PNG Forest Authority (PNGFA) was subsequently created with the mandate to implement the Forestry Act 1991 and the Forest Policy 1991. The government then contracted the monitoring of log exports to an independent third party in May 1994. SGS was engaged to provide independent, arms length monitoring of all log exports from PNG, to ensure that logs exported were sold at the prevailing market prices and that export shipments were correctly declared with respect to log volume and species.

Mr. Telfer said that PNGFA and SGS had developed and implemented a very robust monitoring system for all round logs exported from PNG, which involved the following:
' provision of log tags to be affixed to the end of each log by producers at the time of scaling at the log landing as prescribed by the PNGFA
' pre-shipment log inspection to check species identification and log scaling; and
' monitoring of ship loading to verify the species and volumes actually loaded.

No logs could be legally exported from PNG until all the prescribed procedures involving 22 steps had been followed. According to Mr. Telfer, in the last 12 years, SGS had not uncovered large-scale log smuggling in the log export trade in PNG. SGS provided monthly statistical reports to the relevant PNG government agencies on all log shipments. These statistical reports as well as records available at SGS office in Port Moresby could be verified independently, and indicated that since 1995, SGS had inspected more than 25 million m3 of logs from 80 logging camps with an FOB value of more than 4.45 billion kina ($1.5 billion).

Mr. Telfer added that the efficiency of the log monitoring system was confirmed by statistics from ITTO's Annual Review that indicated that the log trade difference between reports from PNG and China, the largest importer of PNG round logs, was only 2% in 2005. The small difference could be accounted for by insurance and freight charges.

In relation to allegations that logs were being exported illegally from remote PNG islands, Mr. Telfer indicated that this was highly unlikely. He explained that it was logistically impossible to secretly fully load a ship either in the night or during the day without leaving some kind of evidence behind. In addition, it was logistically impossible to load a ship full of logs overnight. SGS had officers stationed on concessions where commercial harvesting of logs for export occurred. He said there were about 42 active log export sites in PNG. SGS was able to verify expeditiously any reports of illegal activities relating to the export of logs. Such checks had been carried out in the past and had not shown illegal activities by log exporters.

According to Mr. Telfer, the unique numbering system of SGS tags affixed to exported logs enabled the origins of individual logs to be traced back to the concession from where they were harvested. UK and other overseas buyers who doubted the legality of the source of PNG logs were therefore able to verify this information from SGS.

'PNG urged to showcase its log monitoring system'

Dr. Kwame Asumadu (Australia) from Asumadu Pty Ltd said the SGS monitoring system in PNG provided a verifiable proof that allegations of rampant log smuggling were highly questionable. He and others urged the
government to publicize the existence of the system in export markets as it was unknown overseas. Attendees said PNG should use it to counter allegations of illegal log trade by environmental NGOs, particularly in Europe and Australia. One of the consequences of the allegations led the UK Timber Trade Federation to warn its members to avoid timber products made of tropical logs from PNG.

Dr. Asumadu noted that only other few tropical timber producer countries had implemented log-tracking systems, including Ghana, Ecuador, DR Congo, Cameroon, Guyana, Brazil and Peninsular Malaysia. The PNG and Cameroon systems appeared to be the only ones implemented and managed by an independently appointed body, at arms length from the government or the forest agency.

A World Bank report claiming that up to 70% of logs harvested in PNG were illegal was challenged by the PNGFA and the industry. The representative of the World Bank informed that it had contacted the authors of the report to support their sources and that the results of the inquiry would be conveyed to PNG.

'Seminar calls for effective implementation of forest law'

Some of the seminar's conclusions were:

' PNG has a framework in place which can assist in achieving sustainable forest management, as well as enhanced forest law enforcement and governance.
' The government should involve landowners in decision making processes.
' PNG should aggressively publicize the SGS log monitoring system in main export markets.
' Although effective in minimising log smuggling, the SGS monitoring system cannot provide a guarantee that all forestry activities in PNG are legal.
' Like many tropical timber producing countries, the major challenge facing PNG is effective implementation of its forest law and policies, as well as monitoring to ensure continuous improvement.
' The fact that PNG can further improve its performance in sustainable forest management cannot be used to justify allegations that all commercial harvesting activities in the country are illegal. There has been a tendency to confuse 'illegality' with 'effective implementation' of the Forest Act and related policies


edited:16/07/2007
uploaded:29/04/2007