PNG’S KEY INDUSTRIAL SECTORS
4.6.5 Governance
4.6.7 Challenges and opportunities
The Papua New Guinea Forest Authority (PNGFA) is responsible for monitoring, controlling and managing PNG’s wood and forest-based industries and resources. The Authority has 19 provincial offices and three key arms:
The Forest Industries Association—an incorporated association of companies involved in all levels of PNG’s timber industry— identifies several challenges for operators in PNG’s forest sector. It says high tax and royalty payments limit the scope to return profits to local areas of production, and could adversely impact investment levels in future.
> The National Forest Board, which advises the government on forest policies and legislation, and provides directions to the National Forest Service. Board members are drawn from provincial governments, landowners, NGOs, Chamber of Commerce and Industries, and the National Council of Women. > Provincial Forest Management Committees, which provide forums for consultation and coordination on forest management between national and provincial governments. > The National Forest Service, which is the operating arm of the Forest Authority.
4.6.6 Sustainability Under the PNG Constitution, a national objective is to ‘ensure the forest resources of the country are used and replenished for the collective benefit of all Papua New Guineans now and for future generations’. About 97% of PNG land is owned and managed by customary landowners. The forest growing on this land is controlled by these landowners. As such, extensive consultation between these resource owners, government agencies and forest companies is necessary before any forest activity can take place. PNG’s government and its implementing authorities understand their obligation to protect the nation’s environmental heritage while developing its forest resources. Each new project is scrutinised on the basis of its environmental impact and the needs of resource holders as well as investors. The PNG Forest Authority has adopted International Tropic Timber Organisation (ITTO) criteria and indicators of sustainable forest management. While PNG’s Department of Environment and Conservation (DEC) is the primary agency charged with the conservation and protection of PNG’s plant and animal species, protection strategies are integrated in several pieces of legislation and policy. The Forest Authority’s forest plans set aside areas for protection, which are excluded from any forestry timber harvesting operation whatsoever.
It also claims government support for the sector—in comparison to the mining industry—is neglible. Limited transport infrastructure also creates high costs for forestry companies. However, the industry body says PNG has a number of competitive advantages over other timber producing countries, including substantive wood and labour resources, and close proximity to world markets, including China and Japan for lowend forestry products and Australia and the United States for high value and value-added forestry products. The PNG Forest Authority identifies non-timber forest products—such as eaglewood and sandalwood, rattan and medicinal plants—as having high potential for investors seeking new opportunities. Another area of potential is carbon trade, under international climate treaties. PNG’s Investment Promotion Authority says: ‘The potential for converting … premium species, such as rosewood, kwila, blackbean and taun, into high-quality furniture and other wood products, is an investment opportunity with a growing market. Stocks of premium wood species will be maintained for wood products manufacturers, so the markets they establish in the near future can be guaranteed of a continued supply.’
4.6.8 Resources Papua New Guinea Forest Authority www.forestry.gov.pg Papua New Guinea Forest Industries Association www.fiapng.com The Papua New Guinea Eco-Forestry Forum www.ecoforestry.org.pg Papua New Guinea Forestry Act www.paclii.org/pg/legis/consol_act/fa1991139/ International Tropical Timber Organisation www.itto.int
PNG also has a robust NGO sector monitoring the industry. The PNG Eco-Forestry Forum was established in 1999 and has become an umbrella for many community groups and NGOs concerned with a sustainable forestry sector.
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THE PNG INVESTORS’ MANUAL - SECOND EDITION