PNG Forest Industries Association sounds warning on investment

Bob Tate, Executive Officer of the PNG Forest Industries Association (PNGFIA), addressed a meeting of the International Tropical Timber Organisation in Peru last week, highlighting falling investment in the forestry sector caused by policy confusion and the agendas of foreign donor organisations.

According to Mr Tate, the development of forest plantations has ground to a halt since the 1990s, with the government walking away from State-managed plantations due to land tenure disputes.

A longer article based on Mr Tate’s speech will be sent out as a special edition of Forestry and Development in the coming days.

A key issue identified by Mr Tate is policy conflict. ┬áThe World Bank and United Nations Development Programme (UNDP) are making significant efforts to influence the PNG government, constrain commercial forestry and reduce land conversion for agriculture. “Legislative and regulatory power over forests has been taken away from the PNG Forest Authority and given to a new Climate Change Development Authority,” explains Mr Tate. The new Authority is funded by donor money, and motivated by an anti-forestry agenda.

Other policies that are adding to the confusion include the Small Medium Enterprise Policy, which aims to end foreign ownership of tree cropping, plantations, small-scale saw-milling and some aspects of logging operations. According to Mr Tate:

“How this nationalization is to be financed and how or if existing investors are to be compensated is not explained. The impact of this policy on our existing processing sector, particularly for vertically integrated operations and our very successful balsa industry – itself established with the assistance of ITTO – will be devastating.”

PNG’s forest and agriculture industries are an essential part of the economy, providing food, fibre and livelihoods to millions of Papua New Guineans. Investment in PNG’s forest industries has dried up, due to risks and policy confusion driven by donor money. Allowing the World Bank and UNDP to control how PNG manages these activities is causing serious economic harm to poor communities throughout the country.

Authority over PNG’s forests should be moved back to where it belongs: the PNG Forest Authority.

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