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More Evidence of Logging Crime in Forest Sector

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Round logs facing upward

Act Now! PNG has released a third report, highlighting yet again, one of the many logging abuses in Papua New Guinea.

Titled “Where is the Beef? The Wasu Cattle Farm Project”, the report points out the abuse of the Forest Clearing Authority (FCA) concession.

This new report is a case study out OF Wasu in the Tewai-Siassi District of Morobe Province.

The report is a third of a series and focuses on a project that is referred to alternatively as a cattle project or an integrated agriculture project, but to date, there hasn’t been any cattle on ground or any agriculture project.

The Morobe based Wasu Integrated Agriculture Project, received an FCA in 2019 and began exporting logs in 2021.

To date, it has generated over K15.6 (US$4.5 million) in log export revenue for Malaysian owned Wasu Resource Limited.

The new report highlights:
• Allegations by customary landowners that they did not give their legally-required consent to the project;
• The absence of any evidence that the logging company has established a cattle farm in the area, despite exporting logs valued at over K15 million since 2021; and
• Evidence from satellite imagery showing a logging pattern more consistent with commercial selective logging than forest clearance for agriculture.

In a statement released yesterday following the release of the report, Act Now! calls on the Government to act now and address the abuse of the Forest Clearing Authority (FCA).

An FCA is a type of logging license intended to allow forest clearing to promote use of land for the economic development. However, previous reports by ACT NOW! and others have discussed cases in which FCA licenses have been misused to facilitate large-scale selective commercial logging activities.

ACT NOW! is calling on the government to undertake an independent, public and transparent audit of all existing FCAs’.

Act Now! Campaign Manager, Eddie Tanago says, until this is done, log exports from FCAs should be suspended.

He said an urgent review should also be conducted to see if the Wasu Cattle Farm project is operating legally.

The full report can be accessed through the Act Now! website.

The other related reports are “Ten Years Without A Crop- The Wammy Rural Development Project” and “A New Forest Grab – The Mengen Integrated Agriculture Project“.

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ACT NOW Welcomes Moratorium on New FCA

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Community Advocacy group ACT NOW has welcomed the Moratorium on new Forest Clearance Authorities, recently announced by the PNG Forest Authority, but they say the measure does not go far enough.

“We are pleased the National Forest Board has recognized that the FCA system is being widely abused and has ordered a halt on the issuing of new Authorities and an audit of all existing FCA projects”, Campaign Manager Eddie Tanago said in a statement.

FCA is a permit issued by the PNGFA allowing a logging company to clear small area of forest for commercial agriculture or road construction, however the PNG Forest Authority has been issuing FCA permits that cover tens of thousands of hectares of forest, which are used by logging companies for large-scale export logging operations.

According to ACT NOW, evidence shows that 25% of total log exports in 2021 were sourced from FCA permit areas.

ACT NOW further pointed out that there are also widespread abuses associated with other logging permit types, particularly the Timber Right Purchase (TRP), that also warrants a moratorium and review.

In September 2022, ACT NOW! issued a public call to the new Forest Minister to urgently address rampant illegal and unsustainable logging by issuing a moratorium on both new FCA projects and on the extension or renewal of any permits issued under the Timber Rights Purchase Agreements.

They also called for an independent review of all existing logging projects to assess their legality and impacts as well as calling for an extension of the moratorium to cover all new timber permits and licences.

They say it is important that any audit of existing FCAs is conducted independently and transparently and with full community participation.

“It is the PNGFA that has developed and approved the existing FCA permits that are characterized by widespread procedural abuse and lack of community consent. It will clearly be nonsense for the same forestry officers to now audit the permits they issued to assess their legality” Tanago said.

ACT NOW! is also concerned that a National Court Order issued in June 2021 calling for a halt to all logging in TRP areas has been ignored by the Forest Authority and logging is continuing unabated in those areas.

According to research conducted by ACT NOW! the TRP areas covered by the court order are still producing over 40% of PNG’s total log exports.

ACT NOW! says while the moratorium on new FCAs is an important step, the Forest Authority and Board must go further and stop issuing any new logging permits or permit extensions, until all logging projects have been independently reviewed.

ACT NOW! is also calling on the PNG Forest Authority to publicly explain how it is intending to meet the government commitment to end all round log exports by 2025.

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Concerns raised over Log Exports to Malaysia

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Nearly 70% of Papua New Guinea’s round log exports between 2019 and 2021 were concentrated in the hands of just ten groups of companies, all with strong links to Malaysia, according to new research by Act Now! and Jubilee Australia Research Centre.

Over those three years, PNG saw a staggering 9.5 million cubic metres of round logs shipped overseas – enough logs to fill over 124,000 large shipping containers. PNG has been the world’s largest exporter of tropical round logs since 2015.

Although over 80 separately registered companies were involved in the log exports from 2019-21, the research found that many of these companies are linked to each other through complex networks of directors and shareholders, making the export of logs from PNG much more concentrated than it appears.

The research found that each of the top ten log exporting groups has strong links with Malaysia, either through individual shareholders or directors who are Malaysian nationals, or links to a Malaysia-based parent company.

Act Now! Campaign Manager, Eddie Tanago, said: “The Marape government has said it will put an end to round log exports by 2025 at the very latest. Despite this, the PNG Forest Authority has continued to issue new logging licences and the equivalent of 113 shipping containers of logs are leaving PNG each day. It’s time for the government to rein in the Forest Authority and ensure it puts an end to the destructive round log industry.”

The research highlights how complex and murky corporate structures make it difficult to work out who is responsible for logging into a particular concession area. This poses challenges for landowners who want to hold companies to account for their environmental and human rights obligations.

PNG’s Forestry Act 1991 requires the PNG Forest Authority to keep a public register with information about logging concessions and the holders of logging licences. While the Act came into force more than 30 years ago, no such register has ever been put in place.

Jubilee Australia Policy Director, Fyfe Strachan, said: “Mapping the corporate networks behind PNG’s round log exports took months of painstaking research. This information is meant to be publicly available, but communities are left in the dark about who is cutting down their forests.”

The logging sector in PNG has been criticised for its environmental and human rights record. In 2018, PNG’s Internal Revenue Commission announced a partnership with the OECD to crack down on tax evasion in the natural resource sector and, in 2021, revealed it was auditing 20 logging companies for tax non-compliance. Yet, to date, no fines or other enforcement actions have been announced. Meanwhile, the log exports continue at a rapid pace.

Round Logs ready to be exported. Picture by Act NOW PNG.
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