By CHRISTOPHER YANDAWAI
A DAMNING report published by ACT NOW! has put the Papua New Guinea Forestry sector in the spotlight over irregularities in the conduct of logging activities in the country.
The PNG-based community advocacy organisation, in its 2023 Timber Legality Risk Assessment report published on Wednesday (October 11), revealed that there is a high incidence of illegality in most logging activities taking place in natural forest areas in the country.
The assessment was based on a review of available data, including the reports of official government inquiries, court cases, international organisations (Royal Institute of International Affairs, International Tropical Timber Association) and civil society groups.
“The risk assessment analysis shows that although most logging operations are authorised by the PNG Forest Authority, there is an almost universal failure by the authority to follow the law when issuing timber harvesting licences,” Act Now campaign manager Eddie Tanago said.
“This includes a failure to ensure the informed consent of customary landowners and failing to follow set procedures as required in the Forest Act.”
The report also found that there was no monitoring of the harvesting operations to ensure logging companies followed the terms of their licenses.
The NGO said its case study on the Wammy logging operation in West Sepik provided a good example of the types of illegality that can be found across the whole logging sector.
“A foreign-owned logging company was issued a Forest Clearing Authority (FCA) in 2013, allowing it to clear discrete areas of forest in West Sepik for agriculture planting,” the Tanago said.
“The FCA was issued despite the opposition of a large number of local clans.
“Ten years later, although logs worth around US$31 million (K115m) had been exported, no agriculture projects have been established contrary to the PNG Forestry Act.”
He said the Forestry Act states that forest clearing cannot extend beyond the first 500 hectares until there is clear evidence of agriculture planting, yet the PNGFA allowed the logging company to harvest trees over more than 40,000 hectares.
The risk assessment also found that there were no attempts in most logging projects to apply basic sustainable forest management principles to ensure the logging companies followed guidelines in compliance with the Forestry Act.
The research showed the same, well-documented problems in all three different types of large-scale logging authorised by the PNGFA – the colonial-era Timber Rights Purchase (TRP), Forest Management Agreement (FMA) and the FCA.
The report’s findings of widespread illegal logging are consistent with the recently released Anti-Corruption and Money Laundering Strategic Plan published by the Bank of PNG, which identified illegal logging as one of the top five money laundering risks in PNG.
In an anti-money laundering risk assessment published in 2017, BPNG identified the logging sector as ‘high risk’ as ‘strong indicators of large-scale corruption and illegal logging in the forestry sector in PNG are well-known, well-documented and widely-accepted’.
In 2021, the Internal Revenue Commission also announced a crackdown on the logging industry and accused it of being “one of the most delinquent sectors in so far as tax compliance is concerned”, and was guilty of “egregious” transfer pricing, “entrenched” tax evasion and “deceptive behaviour.”
In June 2023, the IRC announced it had completed the first of twenty audits of logging company tax compliance and that an unnamed but ‘prominent’ logging company was being charged K140 million for illicit tax evasion based on transfer pricing.
In 2018, a Global Witness report titled ‘A Major Liability’, graphically illustrated how many logging operations in PNG appeared to be breaking the law.
Using analysis of satellite imagery, the report detailed hundreds of apparent violations of the Forestry Act in major logging operations – all of which hold government permits and all of which export timber.
It is not hard to imagine what motivation and rewards might be for all these, however, these are acts of high level illegal practices in the forestry sector need immediate attention from the responsible authorities.
ACT NOW urged the government to immediately suspend all logging operations across the country until each is independently audited to establish whether it’s legality.
The group said the government cannot rely on the PNGFA to bring the problem of illegal logging under control or implement any reforms as there is strong evidence the authority was operating as a rogue organisation that is endorsing and facilitating widespread illegal activity.
It urged the police fraud squad, Independent Commission Against Corruption and the BPNG financial analysis and supervision unit to scrutinise PNGFA and its staff.
