A Forest Clearance Authority license is a type of logging licence issued by Papua New Guinea Forest Authority, based on the recommendation of the PNG Forest Management Committee with the consent of the National Forest Board that allows individuals or companies for large scale conversion of a specific areas of forest to agriculture or other land use activities.

This license is typically required for projects such as agriculture, mining, infrastructure development, or other activities that involve the clearance of trees and vegetation.

To obtain a Forest Clearance Authority license, applicants must typically submit a detailed proposal outlining the purpose of the forest clearance, the area of land to be cleared, and the proposed activities to be undertaken. The application process usually involves an assessment of the potential environmental and social impacts of the proposed clearance, as well as consultation with local communities and stakeholders who may be affected by the project.

Once the license is granted, the holder is required to comply with the conditions and guidelines outlined in the permit, including measures to minimize environmental impacts, reforestation and rehabilitation of cleared areas, and payment of any applicable fees or royalties.

Failure to comply with the conditions of a Forest Clearance Authority license can result in penalties, fines, or the revocation of the license. It is important for individuals and companies conducting forest clearance activities to adhere to the regulations and guidelines set out by the relevant authorities to ensure sustainable and responsible use of forest resources.

FCAs are meant to be tied to a specific underlying project, usually agriculture, while a more stringent licence type the Forest Management Agreement is used for selective logging operations. However, FCAs appear to have become a back door to allow companies to bypass, in whole or in part, consultation and sustainability requirements in the Forestry Act 1991.

ACT NOW! has a series of research case studies looking at Forest Clearing Authority concessions in order to highlight concerns with the way these concessions now responsible for the majority of PNG’s round log exports are being granted and managed.

The three research case studies are:

1. Wammy Rural Development Project: Case Study 1

The "Ten Years Without a Crop: The Wammy Rural Development Project"  is a first  case study  in a series of investigative studies documented by ACT NOW PNG into the use of Forest Clearence Authority Licence.

Covering 105,200 hectares of mostly forested land in the West Sepik (Sandaun) Province of Papua New Guinea (PNG), a local company in league with Malaysian logging company Global Elite Limited (Global Elite) was granted an agricultural lease for a palm oil and rubber project in 2010. On the basis of this lease, Global Elite was granted a Forest Clearing Authority to clear-fell forests for agricultural planting.

The project, known as the Wammy Rural Development Project, was initiated by Melanesian logging company Global Elite Limited in collaboration with the government and promised to bring economic opportunities and improved livelihoods to the community through agriculture. However, the project failed to deliver on its promises has left the local population without viable crops for over a decade, leading to severe economic hardship.

Ten years later, there is no palm oil and no rubber, but selective logging has removed over 400,000 cubic metres of round logs from the area, more than enough to fill 6,000 shipping containers, netting Global Elite more than US$31 million (115 million kina) done under an FCA without a single crop being harvested and despite opposition from a significant number of landowners.

This case study sheds light on the impact of a failed agricultural project where local communities have been left without viable crops for over a decade. False promises about planting oil palm and rubber in order to obtain a Forest Clearing Authority (FCA). Instead, the FCA has been used as a disguise for a significant selective logging operation in the area.

The social and environmental consequences of failed development projects, including loss of traditional land rights, destruction of forests and ecosystems, and disempowerment of local communities is highlighted in the report. It underscores the importance of community consultation, transparency, and accountability in the planning and implementation of development projects to ensure sustainable and equitable outcomes.

2. Mengen Integrated Agriculture Project: Case Study 2.

"A New Forest Grab: The Mengen Integrated Agriculture Project"

This is the second part of a series of reports that investigate the abuse of Forest Clearing Authorities, which are being used as a front for large-scale selective logging. This particular report focuses on the Mengen Integrated Agriculture Project, a recently approved FCA in East New Britain Province.

This study documented by ACT NOW PNG, sheds light on the issue of land grabbing and environmental degradation in Papua New Guinea. It focuses on the Mengen Integrated Agriculture Project, which involves the allocation of a large tract of forested land for agricultural development by a Malaysian logging company, Westenders Limited who is part of the KK Connection Group, the second largest logging company in PNG.

The project, similar to other land deals in the country, has raised concerns about the lack of transparency, consultation, and consent from local communities whose traditional land rights are affected. The allocation of forested land for large-scale agriculture has led to deforestation, loss of biodiversity, and displacement of communities who rely on the land for their livelihoods.

Covering 52,500 hectares of community-owned forest in the Inland Pomio area, the project has a 14-year licence allowing it to clearfell discrete areas of forests for agriculture planting.

This case study reveals several serious concerns about the project:

• While the project’s logging licence is tied to a proposed agriculture development, analysis shows that in reality the Mengen Project is a large-scale logging project – with its primary purpose to make money from selective logging of high value primary rainforest. It is very questionable whether any of the proposed timber plantation or agriculture parts of the proposal are genuine and would in fact even be viable.
• There is little evidence of land clearing in the project area so far, but clear evidence of selective logging (which is not permitted under an FCA) taking place across large parts of the project area.
• While some landowners appear to have provided signed consent, there has been sustained and well-documented opposition to the project from numerous landowner groups in the area.
• The Mengen FCA covers several areas of international environmental significance, including the Nakanai Karst area, which has received Tentative World Heritage Listing.
• There are credible and concerning reports of police working on behalf of companies in the area to pressure landowners and stifle any dissent.

The Mengen Project is just one of 24 currently operating FCAs in PNG. The kinds of issues present in this case study have been reported in numerous FCA areas, including in the reports of the SABL Commission of Inquiry.

3. The Wasu Cattle Farm Project

Where's the Beef? The Wasu Cattle Farm Project

This is the third report in a series investigating the abuse of Forest Clearing Authority permit. This report focuses on the Wasu Cattle Farm project in Morobe Province and raises concerns about the legality of the project.

The Wasu Cattle Farm Project in Morobe Province has been the subject of investigation due to concerns about its legality. This project, also known as the Wasu Integrated Agriculture Project, received a Forest Clearing Authority (FCA) in 2019. It was ostensibly granted for a cattle farming project, but there have been no signs of either cattle or agriculture.

Instead, the project has been exporting logs since 2021, generating over US$4.5 million (15.6 million kina) in log export revenue for the Malaysian-owned company Wasu Resource Limited. This group includes Malaysian-owned companies Lucky Logging and Limited and Lucky 99 (PNG) Limited.

Landowner representatives from the project area have reported that they haven’t observed any evidence of agricultural or cattle-related activities within the Wasu FCA.  The case study raises serious questions about the project’s legitimacy and highlights concerns with the way FCAs are granted and managed in Papua New Guinea.

For decades, Papua New Guinea has been in the grip of a forest resource grab by primarily Malaysian-owned logging companies. There is a high risk that most of this logging can be classified as illegal, despite being authorized by the PNG Forest Authority (PNGFA).

Recommendations

1. Wammy FCA

• Global Elite should cease all logging operations in the Wammy FCA area
• Surrender its sublease as recommended by the SABL Commission of Inquiry
• Rehabilitate the degraded areas due to its illegal logging operations
• Provide compensation for any illegal logging activities and related environmental damages

2. Mengen FCA

• Westenders Limited, KK Connections Limited and related companies should immediately cease all logging activities in the Mengen Project area and compensate landowners for logging undertaken to date.
• Rehabilitate the degraded areas due to its illegal logging operations
• Provide compensation for any illegal logging activities and related environmental damages

3. Wasu Cattle FCA Project

• Wasu Resource Limited should immediately cease all logging operations in the Wasu Project area until an investigation of the projects legality is done
• Rehabilitate the degraded areas due to its illegal logging operations
• Provide compensation for any illegal logging activities and related environmental damages

4. PNG Forest Board and PNG Forest Authority

• Must cancel all FCAs throughout the countries an independent and comprehensive audit be done and report be made and provide redress to landowners;
• Stop logging operations under FCA in Wammy, Mengen and Wasu and stop the log exports
• PNGFA must suspend log exports from all existing FCAs until this review is complete and commit to extending the current moratorium on new FCAs until all recommendations and findings from the reviews have been fully implemented to prevent future abuse.
• Immediately establish a public register as required under the Forestry Act.

5. Lands Department

• Cancel the Wammy Rural Development Project SABL as recommended by the SABL COI and provide notice to Wammy Limited and Global Elite to vacate the land

6.  PNG Royal Constabulary

• Open criminal investigations into the possible theft of forest recources and conspiracy to defraud landowners

7. Banks

• Commercial banks and institutions providing financial services to FCA logging companies should review their risk exposure and discontinue any financial arranagments with them.

Conclusion

Malaysian logging companies are using FCAs as front for logging as shown in the three case studies published by ACT NOW!. There is no promised agriculture, its all logging.

Land owner consent is never gauged in the three FCA case studies.