The interventionist powers of the PNG judiciary
Namah challenges Marape: 'Where’s the miracle cure’

Log tax increase must be defended

Unsustainable logging
The PNG Forest Authority has failed in its mandate to ensure the sustainable management of PNG’s forests and is pushing back against government reforms 

EDDIE TANAGO
| Act Now!

PORT MORESBY – The increase in duty on round log exports introduced in Papua New Guinea’s 2020 budget is already having a positive effect.

Analysis by community advocacy group Act Now! shows that the higher export duty has increased government revenue and driven down log exports in line with government policy.

The increase in duty from 35% to 45% was a government response to revelations that foreign logging companies were evading corporate income tax by manipulating their financial reporting.

The companies claimed they continuously made losses on their operations, never disclosing any profits.

It was a claim that defied logic and common sense. No company would continue a commercial activity that incurred only losses.

As well as trying to recoup public money lost through the tax evasion, the government is committed to reducing round log exports and promoting more value adding processing in PNG.

Our analysis shows that, over the first 11-months of 2020, the increased export duty delivered on both its intended impacts.

Government revenues from round logs exports were more than K9 million higher than in the corresponding period of 2019 even though the volume of logs exported dropped by almost 20%.

If log exports continue to decline at the same rate, the government is on course to achieve its target of a 50% drop in export volumes of the logs by 2025.

But the picture is not all positive.

Only 16% of logs exported in 2020 were from sustainably managed forestry operations.

The 1991 Forestry Act mandated the PNG Forest Authority to ensure all forest operations are sustainably managed under a National Forest Plan.

Colonial era logging permits were to be replaced with new Forest Management Agreements (FMA).

Yet in 2020, only 16% of log exports came from FMA areas.

Most of the rest were from concessions that pre-date the 1991 Act or from areas logged under Forest Clearance Authorities that allow the total clear-felling of the forest.

The PNG Forest Authority has failed in its mandate to ensure the sustainable management of PNG’s forest.

Recent statements by managing director Tunou Sabuin, urging the new Minister to reverse the increase in log export duty, serves to emphasise how the PNGFA has been captured by foreign logging companies.

For the managing director to argue for the reversal of export duty increases while saying his department needs 300 new staff shows the PNGFA is a rogue organisation working against the interests of PNG and the rural communities it is meant to serve.

The 1991 Forestry Act should be repealed and the PNGFA disbanded.

Rather than an agency dedicated to servicing the demands of foreign logging companies we need a new organisation dedicated to serving the people of PNG.

We need to ensure the sustainable and ethical management of our forests.

This is the only way we can hope to take back our forests.

Comments

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Michael Dom

Papua Niuginians, particularly men, are cheap and can be bought and paid for quite readily by any foreigner or wealthy business person.

This is well known in expatriate circles.

The fact is accepted by most Papua Niuginians.

Foreigners scoff and laugh about our so called cultural practices and traditional beliefs, our expressed desire to maintain our heritage.

They know that this is only for showing. We just want money.

Those national expatriates who do care do what little they can to help communities where they can with self help programs.

Some go along but others prefer the free handouts from humanitarian aid and donor agencies.

But there's less cash from those sources and they'd actually have to put in work, which is a damned nuisance that can take up valuable kandis taim.

All this is such a famous joke that tourists are no longer coming to PNG to see a living culture but rather a dying one alongside the 800 plus languages fading in the logged out fields.

Bring audiovisual gear, cameras, cash, condoms and condiments.

Someday some foreign correspondent will write a Pulitzer on all this mess.

Then we'll really be in the big leagues with Congo, Afghanistan and Cambodia, those other war torn countries.

PNG has good forestry policy and logging regulations etc but they have never been seriously adhered to.

This behaviour of aping the white mans laws but behaving like cash transaction whores, this is the great PNG joke.

Ha. Ha. Ha.

There's no racism in it: it's cultural.

Arthur Williams

Banned - not banned -banned by 2020, 2030, 2050.

Loggers of the illegal type must be hoping Megawati Sukarnoputri does not win in the presidential elections later this year in Indonesia.

She was quoted the other day as wanting the death penalty for illegal loggers, so great has been the destruction in their wilderness areas of Sumatra and other large islands.

We wonder if our lawmakers have any stomach for such tough measures? [Post Courier]

090820 LOG SALES OUT

'NFA report calls for changes to promote downstream deals' by Harlyne Joku (Post Courier)

By New Year’s Day, all new allocations of natural forest permits issued will be for 100 per cent downstream processing.

091123 'Sir Mek: Corruption in logging worse’ by Harlyne Joku [Post Courier]

Corruption in logging and the forest industry in general is a hundred times worse than it was 20 years ago, Opposition Leader Sir Mekere Morauta told the Eco Forestry Forum dinner held last Thursday to mark its 10th anniversary.

Sir Mekere, who was guest speaker at the dinner, said what the Tos Barnett Inquiry report revealed 20 years ago was PNG’s first big cases of corruption.

100107 'Govt bans round log exports' by Eric Tapakau [Post Courier]

THE Government through the National Forest Authority has started the process of banning the export of round logs to promote downstream processing of all timber in the country.

Managing director Kanawi Pouru said in a public notice yesterday that effective as of January 1, the National Government will ensure that all new allocations of timber projects are 100 per cent processing.

130711 'NFA pushes for higher log levies' by Paeope Ovasuru [Post Courier]

In response, Minister Pruaitch pointed out that by the year 2020, the logging industry should go into full downstream processing.

140702 'Export of round logs concerns Peter Barter' (10 years after ban!) [Post Courier]

140905 'Downstream work for loggers (by 2030)' [The National]

150629 'Log exports reach 3.8 million cu metres a new peak despite government promises' [PNG Exposed blog]

150807 'Tough laws see logs to China – claim of 70% illegally exported refuted by industry man' by Leonnie Wayang [Post Courier]

Tough legislations adopted by some countries to curb illegal logging activities have compelled Papua New Guinea to export to China.

Forest Stewardship Council (FSC) Asia Pacific regional director Alastair Monument said since the United States, European Union and Australia had established laws to tackle illegally logged timbers, most of PNG’s exported wood are going to China.

Examples of legislations that are aimed at tackling illegal logging are the USA Lacey Act, EU Timber Regulation and Australia’s Illegal Logging Prohibition Bill.

"Papua New Guinea wood exports to those countries have declined while exports to China, where currently no legislations exist, have increased," Mr Monument said during the national forest seminar held on Monday.

150820 Another Forest Minister Douglas Tomuriesa - 'Government to phase out logging again' [The National]

180219 'Govt plans to stop round log export again as illegal clear felling of SABL continues' by Jimmy Kalebe [The National]

180731 'Round log exports to stop by 2020 says PM' [The National]

181212 'Govt to Ban Round Log Exports discussed again' by Ramcy Wama [Post Courier]

190211 'Govt wants log export ended' by Peter Esila [The National]

190722 'Forest Minister Solan Mirisim says industry set for shift of banning round log export, onshore processing and forestry plantations' [The National]

191010 'Forest protection eyed as ‘No round log permits would be issued as off next year!’ says PM' [The National]

And so the trees fall and transfer pricing is surely diminishing PNG statistics of export values.

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