For the first time since the inception of the Papua New Guinea Forest Authority PNGFA) 33 years ago, the forestry sector is in the process of issuing a timber permit to its business arm, PNG Diwai Holdings Limited (PNGDHL).
The PNGDHL will be the developer for the Amau Ganai Riwari FMA Project in the Cloudy Bay area of Central Province with the company to free carry equity for the resource owners, which will be another first in the forestry sector.
The project is a pilot with plans to replicate this method of project delivery in other areas if proven successful.
PNGFA Managing Director John Mosoro, who is also PNGDHL’s Interim Executive Chairman, opened the project negotiations between PNGFA, PNGDHL and the resource owners, on Friday, 15th August, 2025.
He described the occasion as historic saying: “As the PNGFA Managing Director, it gives me great pleasure to stand before you all to officially open negotiations for the Amau Ganai Riwari FMA, which will be the first project to be funded by the government through PNGDHL.
“This idea for the government to manage its own projects started while I was the Director for Policy at the Prime Minister’s Department and we moved it to PNGFA.
“Through the wisdom of Prime Minister James Marape, who is reforming other sectors such as oil, gas and mining, he thought it important that forestry as an economic sector should create an entity to look after the resource owners as well, so PNGDHL was created. PNGDHL is now a fully fledged company established under the business law of the country.
“PNGFA is a regulator of the forestry sector which I am the Managing Director of. However, since the PNGDHL is in its initial stages, I am its Interim Executive Chairman so I am wearing two hats. I am only a caretaker until the PNGDHL is fully established,” Mr. Mosoro explained.
“PNGDHL will drive the business of PNGFA in the country. In the past, landowners have not benefitted fully from their resources. They got royalties and levies which was insufficient.
Addressing the resource owners, he said: “For the first time in any PNG forestry project, you will sign with the State.” Previously, the State signed with developers, while the resource owners were mere spectators, but in this instance, State will sign with the resource owners.”
PNGDHL chief operating officer Verolyn Daugil said: “This is the first time for a state company in the forestry sector to take up a project and history in the making for the sector that it will free carry the resource owners’ equity in the project, which will see majority of the benefits go to the resource owners,”.
She acknowledged the leadership of Mr Mosoro, saying: “This is a monumental project for us in the forestry sector and I acknowledge MD Mosoro for the leadership he has shown. A lot of reforms happened in the last three years under his management, with great support from the Minister for Forests Hon. Salio Waipo in taking the necessary submissions to the National Executive Council where they were approved, enabling the progress made to date.”
The project negotiations took place after four weeks of consultation between PNGFA and the resource owners. Prior to this, the Authority through its Forest Acquisition and Allocations Directorate had been working with the resource owners for over two years, leading up to Friday’s negotiations.
Mr. Mosoro said: “Today, we will go into negotiations between the landowners and the State, which is very unique. This is a first for the forestry sector since the 1992 Forestry Act.
“PNGDHL will now go into equity participation for landowners. You will get your royalties and levies but PNGDHL will free carry your equity, so you will have shares in PNGDHL, as added benefits.
“We started with a project in Central Province because it is easy to go back and forth to sort out issues that may arise. I hope that when other resource owners throughout the country see the success of this project, they will want to participate also.
“Today is a very important occasion for the government, PNG and the landowners now that we will involve landowners meaningfully in the development of their forest resources. This is how we will take back PNG in the forest sector by ensuring meaningful participation by landowners as the government implements its policies down to ground level.
“I thank the National Forest Board and Minister Waipo for agreeing for this project to be the first for resource owners to sign with the state. This is a historical moment.
“I want this project to be unique and different from the rest that have been signed with other developers in the past. The negotiations must ensure resource owners get maximum benefit,” MD Mosoro told the meeting.
Chairman for Amau Ganai and landowner representative Miller Bonou said: “Life in our area is very difficult. We are still living like our forefathers. I have been talking with PNGFA about this project for the last five years and I am happy for the negotiations today. We need basic services.”
Abau Deputy District Administrator Trevor Tararau said: “Our people need development in the districts. It’s 50 years since our country’s independence and we need positive changes in the way our people live.”
Speaking about the engagement of PNGDHL in the project, Mr Tararau said: “It is often difficult to negotiate for the betterment of our people when permit holders are foreign owned. Logging agreements in Abau have been partly fulfilled to a certain degree. I am therefore happy that the government through PNGDHL is driving a new course of forestry in PNG. I know they will understand us better and ensure our people in the operation areas have basic services.”