In a research paper for The Australia Institute, CAROLINE HOISINGTON reveals illegal logging in PNG is more extensive than generally understood and a serious impediment to achieving the goals of Australian aid.

THE AUSTRALIAN Government is not doing enough to ensure that Australian imports of forestry products are consistent with the goals of Australian aid programs and stated commitments to reduce greenhouse gases.

Illegal logging is a major cause of deforestation and environmental destruction; it undermines nations’ efforts to manage forest resources for a sustainable industry, destroys the livelihood of forest-dwellers and costs governments large sums in lost revenue.

It fosters corruption and is associated with organised crime and violence. It undercuts the international and Australian domestic markets for wood products from legally managed forestry by being cheaper.

Ultimately, illegal logging is market-driven and a significant part of the demand is international. Australia inadvertently contributes to these problems by importing timber and wood products without adequate controls in place to ensure that the wood is legally sourced.

Papua New Guinea, during the 1980s, experienced such catastrophic forest loss that it commissioned independent auditors to assess why it was happening; they determined that logging companies were ‘roaming the countryside with the self-assurance of robber barons; bribing politicians and leaders, creating social disharmony and ignoring laws in order to gain access to, rip out, and export the last remnants of the province’s valuable timber’. [Khatchadourian, ‘The Stolen Forests’]

PNG contains the largest intact tropical rainforest wilderness in the Asia-Pacific Region and the third largest in the world and it has developed extensive laws to protect its forest resources.

PNG, however, is large and remote and its government agencies are no match for the financial pressure of illegal logging. Much of the logging is illegal, and PNG is experiencing the same kind of corruption problems as Indonesia.

Even logging interests admit that “corruption remains a major problem, at both the National and Provincial Government levels. Up to 40 percent of the National budget may be stolen. Efforts by donors to improve governance have yet to lead to better socio-economic outcomes”. [ITS Global, 2008]

Nevertheless, the same logging interests also make a case for the amount of income and employment brought to PNG from logging activities:

The commercial forestry industry generates between 5 and 8 percent of GDP and around 5 percent of merchandise exports. Taxes on log exports amounted to around 6 percent of all tax receipts and around 5 percent of all revenue collected by the PNG Government between 1998 and 2004. Those taxes fund around 30 percent of development expenditure.

The industry generates around 10,000 jobs, primarily in remote areas where there is little or no other paid employment. It provides and maintains health and education services and transport infrastructure in remote areas where National and Provincial Governments are either unable or unwilling to do so…. [ITS Global, 2008]

ITS Global works on behalf of the PNG Forest Industries Association, the largest member of which is the Malaysian logging company Rimbunan Hijau [which] was fined by the PNG Supreme Court for illegal logging in 2008. The logging industry is widely criticised by environmental and socially-concerned NGOs, which claim that logging practices in PNG are destructive and exploitative.

It is an industry that is synonymous with political corruption, police racketeering and the brutal repression of workers, women and those who question its ways. Its operations routinely destroy the food sources, water supplies and cultural property of those same communities. They provide a breeding ground for arms smuggling, corruption and violence across the country.

In return, the industry generates no lasting economic benefit to forest communities, considerable long-term cost and a modest 5 percent contribution to the national budget. These claims are contested by PNGFIA….

The PNG government has sanctioned numerous reviews in the past, including those of the World Bank and the UK Overseas Development Institute. These reviews have been conducted using internal and external experts in forestry and law including government agencies….

The recent finding of the ITTC mission only confirms what has already been found in these past reviews, the recommendations of which remain unimplemented.

The PNG Eco-Forestry Forum, a PNG non-governmental organisation, which has actively engaged in the campaign against illegal logging and the promotion of sustainable forest management practices, has welcomed the report by reinforcing its call for the government to immediately place a moratorium on new timber permits or permit extensions; establish a Commission of Inquiry into current logging operations and move to establish and Independent Commission against Corruption.

The ITTC findings also acknowledged “PNG civil society, particularly NGOs, provide an important contribution in the forest sector” and the “PNG government should seek more effective involvement of landowners and NGOs on the National Forest Board”.

PNGEFF was the only NGO representative on the National Forest Board and was removed by recent amendments to the Forestry Act.

Source: The Australia Institute, Rough trade: How Australia's trade policies contribute to illegal logging in the Pacific Region by Caroline Hoisington, Institute Paper No 5, October 2010. Read the full paper here: Download Rough Trade