ACT NOW! Spotlights Illegal Logging at Asia Pacific Global Dialogue, Malaysia

ACT NOW! recently attended and presented on illegal logging and forest crime in Papua New Guinea at the Asia- Pacific Regional Private Sector Dialogue meeting held in Malaysia.

The Dialogue meetings bring together government authorities including financial intelligence units, law enforcement and Customs and the private sector, commercial banks and anti- money laundering experts, and civil society.

The aim is to strengthen collaboration and improve the detection and response to financial crimes and illicit transport linked to environmental crimes.

Below is an extract of the presentation made by ACT NOW!

Forest crime and illegal logging in PNG

The logging industry in Papua New Guinea is beset with corruption and political interference with widespread illegal practices and human rights abuses across the sector.

Some of the most commonly reported illegal practices include logging licences issued or extended in breach of regulations, failure to obtain proper consent from traditional landowners, substantial breaches of harvesting regulations by logging operators and the abuse of forest clearing permits for commercial agricultural projects. 

The industry is also assessed as being a high-risk sector for money laundering by the Bank of PNG, with illegal logging considered to be the second highest proceeds-generating offence in PNG after corruption. This is reported to have been a significant factor in PNG’s current grey listing by the international financial community.

The Bank of Papua New Guinea estimates that US$2 billion was lost through transfer pricing between 2014- 2019 alone.

The high level of corruption in PNG’s logging sector has been highlighted in numerous official reports. These include:

1. Barnett Commission of Inquiry - 1989

The inquiry described the logging industry as operating like medieval “Robber barons” with widespread bribery, corruption, transfer pricing, tax evasion and money laundering.

45 years later, these issues are just as prevalent

2. SABL Commission of Inquiry - 2011

More than 90% of customary land leases were found to be illegal due to corruption, mismanagement and lack of informed consent. The logging industry was identified as the main driver behind the leases.

3. Bank of Papua New Guinea - 2017

Described the logging industry as ‘high risk’ for money laundering

4. UN Office on Drugs and Crime - 2022

PNG is poorly equipped to deal with forest crime and the responsible authorities have 'demonstrated little willingness to investigate and prosecute the criminality that allegedly plagues the sector'.

5. Internal Revenue Commission - 2023

PNG's tax collector, the Internal Revenue Commission, has described the logging industry is “one of the most delinquent sectors insofar as tax compliance is concerned“. The IRC says logging companies are guilty of “egregious” transfer pricing, “entrenched” tax evasion and “deceptive behaviour”.

6. Special Parliamentary Committee - March 2026.

“Weak legislative enforcement, possible systemic corruption, and a fundamental lack of will to prosecute offenders have effectively turned a vital natural resource into an illicit revenue stream for foreign interests”

Despite all this criticism from official agencies including a Commission of Inquiry, the Bank of PNG, the Internal Revenue Commission, the UNODC and even Parliament, nothing ever changes. 

For the logging companies and those who enable their operations its has been business as usual for the last fifty years and the same issues still persist:

- Tax evasion and transfer pricing,   

- Money laundering 

- Human rights abuses

- Breach of licence conditions/ laws by logging operators

- Environmental destruction and unsustainable logging

ACT NOW! role

ACT NOW! plays a role in the investigation and reporting of suspicious behaviour in the forestry sector through the publication of Risk Alerts, Reports, Case Studies and Information Papers.

All these publications can be accessed on the ACT NOW website - www.actnowpng.org https://actnowpng.org/publications

Recommendations

Forest crime in PNG is not only an issue only for PNG, it is an international issue that requires an international responses, from governments, regulators and the private sector. This must include:

• Action by banks and other financial institutions to stop the flow of money from the trade in illegal timber;

• Action by governments to stop the importation of illegally harvested timber;

• Criminal prosecutions against officials who facilitate illegal logging;

• Seizure of assets from logging companies and those who assist them;

• Action by shipping companies to stop the transportation of illegal timber;

• Action by accountants and lawyers to stop facilitating the logging companies operations;

• Timber buyers to stop buying PNG timber