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23. Papua New Guinea


Country data


Land area 1966 (thousand ha)

45,286

Total forests 1995 (thousand ha)/% of total land

36,939/81.6

Natural forest 1995 (thousand ha)

36,909

Annual Change in Forest Cover 1990-95 (thousand ha)/annual rate (%)

-133/-0.4

Population 1997 (millions)/Annual Rate 1995-2000

4.5/2.2

Rural population 1997 (%)

83.4

GNP per person 1995 (US$)

1.160

Source of data: FAO- State of the World’s Forest 1999

General information

Agriculture is the dominant sector in the Papua New Guinea economy, accounting for 35% of the GDP, 40% of exports, and providing the main source of livelihood for 85% of the population. Approximately 55% of agricultural production comes from cash crop production. Three main tree crops (coffee, palm oil, and copra) account for 90% of agricultural exports. Two-thirds of the tree crop production comes from small-holder farms.

Minerals are also important commodities, particularly copper and gold. However, mining in PNG is an enclave activity. Most investment expenditure goes to imported capital goods. Forward linkages to the rest of the economy are weak, particularly in employment generation. The country must, therefore, look to other major non-mineral resources for development.

Some key constraints, which have to be taken into account by the Government when launching development programmes, include:

· The rugged topography and spread of islands;

· The cultural and language diversity (some 700 different languages and dialects are spoken);

· Shortage of skilled labour and limited labour capacity of public institutions;

· Lack of infrastructure (especially for internal transport); and

· The fact that 97% of the land is held by clans and tribes under a customary tenure system.

The ecological value of biodiversity is enormous, with a rich diversity of Malay and Gondwanaland flora and fauna. The flora comprises more than 11,000 species, including 2,000 ferns. The lowland forests feature 2,000 timber species.

The forestry sector plays an important role in the subsistence economy of the rural population. It is a major source of food, provides fuel wood for rural energy needs, and meets other domestic consumption requirements. Population pressure on the highland areas has created local shortages of fuel wood and other forest products. The sector employed about 7,500 people, representing about 4% of the total formal employment. In many cases logging companies are responsible for providing roads, infrastructure and welfare services to the landowners. In general, most companies have a poor record of meeting these obligations.

Forest resources

The current estimate of total potential sustainable production from forest projects is approximately 3.13 million m3 per year. It is estimated that 4.4 million ha of forestland will be converted to agriculture over the next 50 years, or an average of 2.6 million m3 per year over those 50 years. Thus, the annual log harvest (from forestry and conversion projects) will be approximately 5.73 million m3 per year.

The plantation resources are only of minor importance. There are, at present, three main private plantations, all operated by Japanese companies. A chip mill is operating at the Gogol Plantation. In 1995, 705,000 BDUs of wood chips were exported. As of 1999, the total reforested areas amounted to 58,000 ha, of which 35,200 ha were developed by the private sector. It was reported that some plantations were unsuccessfully developed due to the following problems: land tenure, resources ownership, poor management, and a lack of financial commitment to the project. To avoid duplication of mistakes, these problems should be overcome in order to develop successful projects in the future.

It was also reported that there are large amounts of available information from the past plantation research works; however, these need to be collected and documented. In addition, there is no specific revenue system or taxation regime in place, which would be suitable to encourage investment from the private sector. To make the plantations competitive and commercially sound, a major policy review is needed concerning the place, format, and nature of plantations within the forestry sector, including employment creation and improvement of deforested grassland.

Policy and planning

The National Forest Plan was approved by the National Forest Board on 8 May 1996 and subsequently ratified by Parliament in July 1996. The Plan is now official and all future Forestry Projects shall be developed under this Plan as required under Section 34 of the Forestry Act.

The National Forest Policy was approved in 1990. The two main objectives of the policy are:

· Management and protection of the nation’s forest resources as a renewable natural asset;

· Utilisation of the nation’s forest resources to achieve economic growth, employment creation, greater Papua New Guinean participation in industry, and increased viable onshore processing.

As indicated in the PNG Forest Authority (1998), Corporate Plan of 1998-2001, the corporate objectives of the Forest Authority is based on the principles of Sustainable Forest Management (SFM) as defined by ITTO. To give weight to its policy of sustainable forest management and to achieve sustainable development in the forest sector, the following objectives are being pursued:

· to formulate and maintain the National Forest Plan and the National Forest Development Programme as defined under the Forestry Act;

· to maintain sustained yield management of the country’s commercial forest resources through acquisition of timber and management rights under Forest Management Agreements and management of the Permanent Forest Estate;

· to effectively control and monitor harvesting and export operations to ensure compliance with the Forestry Act and associated Government policies, guidelines and procedures;

· to promote resource owner participation in the management and utilisation of their forest resources;

· to provide advice to the Government and potential investors on forest resource utilisation options;

· undertake research programmes and data collection aimed at improving the knowledge base for sustainable forest management and reforestation;

· to promote a fair and equitable forest revenue system that provides for fair returns to landowners, industry and government and a self funding mechanism for the Forest Authority, which will ensure efficient operations;

· to promote and facilitate forest plantation development;

· to promote through extension, public understanding of the multiple value of trees and forests for income generation and livelihood; and

· to invest in sound organisational development so as to maximise the Forest Authority’s resource utilisation to meet the above corporate objectives.

The major problems that the Forest Authority faces when implementing these policy objectives are inadequate funding and lack of competent manpower. Lack of suitable legislation and regulations, including those relating to commercial development and biodiversity protection on customary owned lands, is another problem faced by the Forest Authority.

To respond to the international initiatives on sustainable forest development and to arrest deforestation, a National Forests and Conservation Action Plan (NFCAP) exercise was prepared in 1988-1989. The NFCAP identified six major programme areas and priorities for actions:

· Resource assessment with rapid resource appraisal and re-inventory of resources;

· A new resource management structure, including a National Forestry Board, Standing Committees, four National Forestry Boards, a new Forest Service and a new financial framework;

· Maximising returns from logging with a comprehensive review of royalties, export taxes, and other revenues from log exports, and by inviting marketing firms to raise their level of activity;

· Industrial development prospects with a review of the log export ban and the conducting of feasibility studies for sawmill/board plants, wood chipping and pulp mills;

· Conservation and land-use including a World Heritage proposal, a national conservation strategy, rehabilitation of the existing national parks, an improved ecological and monitoring programme, training of local people, support to NGO activities, and a feasibility study for the establishment of a land-use research council;

· Institutional and human resource development.

Through external assistance, notably under the auspices of the NFCAP, the Forest Authority has moved forward in implementing its guiding policy of sustainable forest management. Some positive results have been achieved, including the following:

· Sustainable forest development

As of 1993 onward, all new forestry operations have a cutting cycle of 35 years. Two approaches have been adopted as follows: as existing projects come out for review, they are being renegotiated to allow for a permitted annual harvest volume based on a 35-year sustainable logging cycle; and new projects are only being granted with an annual sustainable harvest volume.

· Acquisition of timber rights

Land ownership in PNG is vested with customary owners. The acquisition or purchase of forest management rights from the customary owners is a prerequisite for a forestry development to take place. The acquisition consists of the following steps: a) conduct a forest inventory of timber areas; b) conduct land awareness and incorporation of land groups under the Incorporation of Land Group Act; and c) compilation and execution of a Forest Management Agreement. Major constraints and problems include: a) the procedures are lengthy; b) due to a capacity problem, land group documents may not be adequately assessed for compliance; and c) defining land boundaries is an extremely difficult task due to lack of proper documentation.

· Landowner Companies

The Landowner Company (LOC) concept was developed in order to increase national participation in the forestry sector under the 1979 National Forest Policy. It is good in theory. However, most of the LOC’s have been plagued by mismanagement, corruption, and in fighting between different landowner factions. The main problems are the lack of education and business knowledge by the majority of the landowners, difficulties in successfully structuring the LOC’s due to the complex land tenure system, and the proliferation of landowner’s groups.

· Improving the level of monitoring and surveillance of log harvesting and export operations

The standard of monitoring of forestry operations in the field has been set. This includes the engagement of a private surveillance company - SGS (PNG) Ltd to monitor all log export operations.

· Domestic processing policy

A study to review the domestic processing policy options and to recommend the most efficient package of measures to encourage its development was completed in July 1998. The Government is yet to evaluate the recommendations of the study. It is realised that as a matter of urgency the Government must establish a clear domestic processing policy for the forestry sector which is achievable and sustainable. Currently, the official Government policy is for a log export ban by the year 2000. Clearly this will not be achieved. The reality is that with the country’s current financial difficulties, the Government is eager to retain the financial benefits from log exports.

· Plantation sector

There is huge potential for rural employment generation through plantation development, particularly on the large areas of deforested grasslands.

· Code of Logging Practise

The PNG Logging Code of Practise was finalised in February 1996. As of July 1997, it becomes mandatory. There were some problems faced for the full implementation of the Code. The AusAid project on human resource development that commenced in 1995 has had a positive impact on the effectiveness of field staff. It is expected that all the forestry training in PNG will be overhauled, including the training of industry field staff.

The NFCAP exercise was reviewed by a team in September 1994. The team assessed the effectiveness, issues and constraints, impact, and relevance of NFCAP, as well as NGOs and donor agencies participation. The review team made the following assessments and recommendations:

· NFCAP has been partially successful in achieving its objectives;

· NFCAP should be continued, but requires strong and explicit commitment to sustainable conservation and a transparent administrative and legal process, backed by adequate financial and human resources;

· Enhancing landowner awareness, local capacity in management, non-wood forest products development and strengthening the NFCAP Steering Committee;

· Strengthening the consultation process;

· Improvement of the data-base, training, and capacity building;

· Decentralisation of planning;

· Promote the utilisation aspect to include small scale investment, phase out log exports, and review the revenue system;

· Develop a code of harvesting and its aspects.

Legislation

Some important legislation related to sustainable forest management have been executed, including the following:

· PNG Logging Code of Practice. The Code was finalised in February 1996 and approved by the Parliament in July 1996. Activities which have been undertaken to ensure full implementation of the Code include: a) Development of the key standard for selection logging; b) Development of a new set of field planning, monitoring, and control procedures which set out required pre-logging planning, monitoring, and control during logging operations, and post logging activities; c) Advertising the Code in all major newspapers; and d) Training courses for all field staff regarding the planning, monitoring, and control procedures of the Code.

· Forest Protection Policy. The Policy was passed by the National Executive Council (NEC) in July 1996, and the Guidelines for Conversion of Forest was passed in January 1997.

Collaboration with partners

Several donors have been providing support to the forestry sector development in the country including: the Japanese Government (JICA), ITTO, the New Zealand Government, Australia (AusAid), bilateral NGOs from the USA (Mc. Arthur Foundation), WB, UNDP, GEF, and FAO.

On 28 April 1995, the Government announced that it had agreed to adhere to a structural adjustment programme in association with the World Bank, IMF, and other major donors and lending agencies in return for budgetary support to overcome the nation’s financial problems. The programme includes the following specific forestry measures: a) refrain from introducing amendments to the Forestry Act of 1991; b) ensure that areas of natural forests which are used for log production are managed on a sustainable basis; c) introduce a new forest revenue system incorporating a marginal progressive output tax scale; d) provide the authority with an operating budget equal in real terms to that allocated in 1995; e) ensure that the Forest Authority formally adopts a forestry and operational code of conduct of the PNG’s Code of Logging Practice.

PNG is a signatory of several international agreements and conventions, including: a) International Tropical Timber Agreement; b) Convention on Biodiversity Conservation; and c) Convention on Framework of Climate Change. PNG is actively involved in several international initiatives dealing with forest and forestry, including participating in the deliberations in various sessions of IPF/IFF, CITES and other international initiatives on forests and forestry.

Focal point
Thomas Nen
Managing Director
PNG Forest Authority
National Forest Service
P.O. Box 5055
Boroko NCD, Papua New Guinea
Phone: 675-3277841/887
Fax: 675-3254433
E-mail: PNGFA@Datec.Com.Pg

*****

The only way you will never be criticised is if you do nothing,
say nothing or have nothing.
You will end up being a big nothing.
(Shiv Khera - You can win)


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