Home > Corruption, Logging, Papua New Guinea > Forest Minister loves to show off his ignorance

Forest Minister loves to show off his ignorance

The Forest Minister sitting comfortably on his trip home from Paris

The Forest Minister’s half baked comments do PNG reputation great harm

Forest Minister Douglas Tomuriesa has splashed himself all over the media in the last few days trying to refute a report, The Great Timber Heist, that highlights the fact logging companies don’t pay any corporate taxes and deprive PNG of hundreds of millions of Kina in much needed revenues.

Unfortunately for the Minister, all he has done is show off his own ignorance – and invite legitimate questions about why he is so keen to try and defend foreign owned logging companies rather than fight for the rights of his own people…

Below you can read and watch some of the press coverage; but here are some of the startling highlights of what the Minister gets so very wrong:

  • The Minister says the report claims 5 million cubic metres of logs are exported every year. NOT TRUE, the report says 3.8 million – a figure the Minister actually says is correct!
  • The Minister says the report is wrong to claim tax evasion by logging companies as they pay log export duties, but this is a completely different tax to the one referred to in the report! The report says the companies are avoiding paying hundreds of millions of kina in CORPORATE taxes.
  • The Minister says the fact logging companies pay some tax proves there is no tax evasion. This is clearly ludicrous and absurd. As the report lays out in great detail, the logging companies pay some log tax but avoid paying as much as they should through financial misreporting and they completely evade paying some other taxes.
  • The Minister claims the report findings are “mere assumptions’ but the report is based on a meticulous examination of numerous logging companies financial records and IPA declarations. If the Minister actually bothered to read the report he would see clear proof the logging companies declare losses year after year thus avoiding corporate taxes but still stay in business – which defies logic and common sense
  • The Minister says the report authors did not contact the PNG Forest Authority for comments. NOT TRUE, in fact they spent two-days inside the PNGFA talking to senior managers and make mention of those discussions in the report!
  • The Minister makes much of the fact that SGS counts how many logs are exported every year but IGNORES the point made in the report that neither SGS or the PNGFA checks the value of the logs declared by the logging companies – and those values are significantly lower than world market prices, allowing the companies to under pay log taxes and avoid corporate taxes.
  • The Minister claims 96% of logging licences are held by landowner companies but IGNORES the fact almost 100% of timber exports are by foreign owned companies.

The Minister says he is very worried about the public image of the logging industry and the forestry sector in PNG – perhaps he should reflect on the damage his own stupidity and half baked comments are doing to our international reputation!

Png Gov’t Describes Reports On Logging As ‘Half Baked’ And Not True
PNG Today
Papua New Guinea Government has described a recent report on logging in the country as ‘half baked’ and not true.
The report by the US-based think tank, the Oakland Institute titled The Great Timber Heist: The Logging Industry in Papua New Guinea highlighted massive tax evasion and financial misreporting by foreign logging companies, allegedly resulting in nonpayment of hundreds of millions of Kina in taxes.
Forest Minister, Douglas Tomuriesa, said the report paints a bad picture about the good work done by the Forest Authority.
“One of the branding factors that they put as, we have five million cubic metres of logs been exported out of country and that is never true.You know the highest was back in 2014 was 3 point 8 million cubic metres of log.2014 was 3 point 4 million cubic metres So we have reduced by point 4 million cubic metres.400 thousand cubic metres we’ve reduced by then.This year it could be even further down”.
The Forest Authority in addressing the issue of PNG’s logging industry engaging in tax evasions, said that the Log Export Tax is in place to ensure operators pay tax irrespective of whether they make profit or not.

Minister slams report
Source: The National [owned by Rimbunan Hijau]
By HELEN TARAWA 
A REPORT released on the PNG forest industry is painting a negative picture despite the good things that the National Forest Authority has done, Forest Minister Douglas Tomuriesa says.
Responding to the report by Oakland Institute titled The Great Timber Heist, Tomuriesa described it as a really damning report and not good for the country.
“This report colours a bad picture about the good things that we are doing in forests and so I’d like to clear the air on some of the issues that were raised by this report,” he said.
“There must be a response to this report and I feel that today is the right time for us to respond to the report that has been tabled by the Oakland Institute.
“Our people must know that we at this level, Forestry Minister’s Office and the MD’s Office, we are taking full charge to make certain that the goals and vision that we have for forest today and forward must be realised.
“I’ d like to make it clear to Papua New Guinea that what’s been reported here is half-baked.
“Our resource owners, who must be respected, the LLGs, the provincial governments and the Government must be respected,” Tomuriesa said.
He said that significant changes were made in the last two years to make certain that the forest industry was more transparent. 
Such reports tarnish the international reputation of PNG as a sovereign nation and need to be put into proper perspective, he said.
The PNG forest industry has been very focused in its work in the industry, the minister said. “Many leaders in our country have got negative thoughts and perceptions about this authority.
“When we first moved in here almost two years ago, we made certain that there were measures put in place.
“So far, 96 per cent of operational licences have been returned to the landowners. Logging licences are held by landowner companies. 
“It is the landowner company that invites the operator to work closely with the forest industry to make sure that the resources are harvested for the purpose of round log exports and downstream processing,” Tomuriesa said.

Minister refutes logging report
BY LEONNIE WAYANG, Post Courier

FOREST Minister Douglas Tomuriesa has refuted statements made in a report by a think-tank in the United States and described it as “mere assumptions”.
The report from the Oakland Institute is titled “The Great Timber Heist: The Logging Industry in Papua New Guinea”.
Mr Tomuriesa said the report has potential to tarnish the country’s international reputation.
Especially for PNG as a sovereign nation, which is why the report needs to be put into proper perspective.
He said that no one from the institute had contacted the ministry or Papua New Guinea Forest Authority to get comments before writing the report.
“There is so much misunderstanding in the area of logging in this country.
“We have received reports, especially from Oakland Institute, and this report here says the ‘Great Timber Heist.
“It is really a damning report. It is a report that colours a bad picture about the good things that we are doing in forest.
“I’d like to clear the air on some of the issues that were being raised by this report,” Mr Tomuriesa said.
“One of the damning reports they put is that we had five million cubic metres of logs being exported out of the country and that is not true.
“The highest was back in 2014 was 3.8 million cubic metres of logs.”
He said the projected log export volume in 2015 was 3.4 million cubic metres, 400,000 less than the 2014 export volume.
“This year, it will be further down, we’ll go under three (million cubic metres) so I don’t know where they’ve come up with this report from.
Mr Tomuriesa was very disappointed with the report.
“One of the things they mentioned in the report was that most or all of our licenses are with foreigners.
“Ninety-six per cent of licences are with landowner companies.
“We’ve already given everything back to the landowner companies.” he said.

Forestry contributes K300m in taxes
Source: The National [owned by Rimbunan Hijau]
THE forest industry makes more than K300 million in taxes through log export development levies (LEDL) each year, Forest Minister Douglas Tomuriesa says.
Responding to claims by Oakland Institute’s report, The Great Timber Heist, that massive tax invasion and financial misreporting by foreign logging companies resulted in non-payment of taxes, he said every year PNG Forest Authority (PNGFA) contributed more than K300 million to taxes to the internal revenue of the nation.
“I have big questions in this report because they are talking about millions of dollars being lost by logging companies not paying their tax, and yet every year, PNGFA contributed more than K300 million to taxes to the internal revenue of this nation,” Tomuriesa said.
“The companies that operate in this country pay log export development levies to the tune of K50 million to K100 million for obligations for us to get those monies down to the districts so that the classrooms, roads, hospitals and other infrastructure are built.
“Last year alone, we paid out just under K50 million of export development levies to the districts. That was never done in the last 20 years of the operation of LEDL. 
“The trustees and I made certain that we pay out the first lot of LEDL funds to the districts.”
Tomuriesa said that according to the report, millions of kina in tax weren’t being paid by logging companies. “If they are not paying, we wouldn’t be raising the K350 million to K370 million in terms of tax going to the country. 
“Landowners also receive up to more than K100 million in terms of royalties from our operators, the investors in the logging industry, so I don’t’ know where this report is coming from. “The report raised questions about 500 million cubic metres of log leaving PNG shores every year, this report is not true.
“SGS reports give how much logs exported are every year and how much tax is collected. The SGS report is very clear on what the output of the logging industry in the country.”
SGS is one of the biggest and most reputable surveillance organisations involved in inspection, verification, testing and certification in the world to monitor exports of logs from PNG since 1994. 
In 2014, 2.8 million cubic metres of logs were harvested and last year 2.4 million, which is 400,000 cubic metres less and this year it will be lesser,Tomuriesa said.
NFA is a the Government’s statutory agency mandated under the Forest Act 1991 and accompanying Forestry Regulations to be responsible for the sustainable management of PNG Forest resources and the regulations of the forest industry in PNG.

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  1. John Demah
    March 8, 2016 at 4:02 pm

    The report is by Oakland Institute is spot on. The Minister has totally missed the point. Log Export Development Levy is a different tax. Many of these logging companies have evaded tax through transfer pricing and declaring losses for many years. This results in them not paying corporate income taxes to the State.

    Despite the Forest Minister’s arguing that they pay LEDL, most logs shipped out are not recorded. The amount of logs exported out of PNG is much higher than what is recorded by authorities at export points.

    This Forest Minister is a joke! He should be sacked.

  2. Margareth Paria
    March 10, 2016 at 9:33 am

    What happened to investigative journalism?
    Our journalists have a moral obligation to do some in depth investigation before putting pen to paper on all these important issues and write balanced stories.

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