Home > Corruption, Human rights, Land, Logging, Papua New Guinea > Forest Minister fails to discredit critical analysis

Forest Minister fails to discredit critical analysis

timber heistBy ACT NOW!

The Forest Minister has taken out full page adverts in the media this month [see below] trying to refute allegations of illegal logging and financial misreporting by the logging industry. But his lengthy explanations fail to answer the central allegations and many of his admissions actually add weight to the arguments he is trying to dispute!

The Minister complains that ‘despite the assurances of the PNGFA that all logging is conducted within the law, various interest groups continue to use the issue of illegal logging for their own purposes’. What he fails to mention is that those ‘interest groups’ include bodies like the International Tropical Timber Organisation and the World Bank who were invited to do their studies by the PNG government and concluded the logging was unsustainabe and illegal. What possible motive could such organisations have for publishing false analysis?

The Minister claims ‘since 1994 the Government has engaged SGS to monitor the export of logs to prevent under-valuing and transfer-pricing’, which is completely untrue. SGS counts the logs and checks the export duty paid, it does not check or authenticate the declared log prices – as the Minister later implicitly admits!

The Minister says ‘SGS also confirms all the logs are sourced from legally approved and valid timber concessions‘ – which is completely misleading. SGS merely checks there is a logging permit or licence, it carries out no checks to see if that permit or licence was validly issued or is legal.

The Minister claims Oakland Institute ‘have deliberately used the ITTO composite price for tropical logs to distort the facts’ but then he admits PNGFA does not have any direct comparison figures to challenge the OI analysis, accepts such figures “would indeed be very useful” and then tries to rely on international export prices for plantation teak logs to disprove the OI analysis when such log exports “from PNG are of very insignificant volumes” and “constitutes a very minuscule proportion of PNG’s total log export volume”.  The Minister says the OI log price comparison is ‘rather simplistic’ but admits the  PNGFA does not have any data to allow it to do a better job!

The Minister further claims the OI report “is inept and inaccurate” but:

  1. Admits, since 2014 PNG is the biggest exporter of unprocessed tropical logs in the world
  2. Admits, the Forest Authority has approved logging in 785,000 hectares of land acquired under SABL
  3. Admits, cumulatively, some 11 million hectares of land have been industrially logged and a further 5 million hectares of forest is currently under active logging.
  4. Does not deny almost all logging operations and all log exports are driven by foreign owned companies.
  5. Does not deny the logging industry declares no profits year after and year and does not pay any corporate taxes.
  6. Does not deny the total land area leased under SABL is over 5 million hectares.
  7. Does not deny PNG Forest Products (a plantation based timber company) is the only forestry company paying corporate taxes
  8. Does not deny PNGFA struggles to monitor and verify log export prices and, admits, if given more resources, it would more closely monitor international prices.
  9. Implicitly admits transfer pricing is going on and says the log export tax was specifically imposed to counter transfer pricing!

PNGFA statement 5 April 2016 1

PNGFA statement 5 April 2016 2

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