Source: Legend FM News FB page

Sir Julius Chan, Governor of New Ireland Province, has challenged recent statements by the Forest Minister, Douglas Tomuriesa, concerning a recent report from the Oakland Institute that was critical of the way the forestry industry is run in PNG.

“The Minister makes much of the fact that we are making K300 million per year from taxes on the logging industry” Sir J said.  “But the truth is that these operators have destroyed the environment, roads, and bridges resulting in billions of kina in damages. They don’t adhere to conditions of logging permits – cutting trees hundreds of years old, clear felling areas- blatantly ruining rivers and creeks. They leave rotting destruction in their greedy path to secure prime timber, they are wreaking havoc on our environment and social traditions”

Governor Sir Julius Chan said, “what the Minister does not comment on is the fact that in Papua New Guinea the average price claimed by the logging companies at export is $US210 per cubic meter at export, while the average price worldwide is $US388 per cubic meter, almost twice what loggers claim in PNG.  And our timber is as high, if not higher, in quality than any other timber in the world. We are being cheated out of hundreds of millions in tax revenue every year?”

“The simple truth is that the Forestry Department has allowed transfer pricing to go on for years, and this has cheated us out of money that is rightfully ours.  The logging companies undervalue what they are exporting so they don’t have to pay high taxes, but they ship the logs on shipping lines they own, and they then sell them at high prices at the point of sale, usually China.  So they make all the profit and pay very little tax.  Surely the Minister knows this is happening.”

The majority of the logging companies operating in Papua New Guinea declare losses almost every year.  They declare losses in three times as many years as they declare profits.   Now I ask you, how can a company stay in business if it is making a loss nearly every year?  The answer is simple.  Transfer pricing.”

Sir J continued, “we should be ashamed of the rate at which we are depleting our forests.  The Congo, which has a rainforest five times the size of ours, exports less cubic meters of logs per year than we do.  We now export more cubic meters than any other country in the world. We are practicing the rape of our forests, that is what we are practicing.” 

“I also note”, Sir J, said, “that the Minister is very vocal in saying that there is no illegal logging occurring in PNG.  This is completely UNTRUE in New Ireland!  The Commission of Inquiry into SABLs found that nearly 90% of al SABLs were illegally granted.  The law requires a Certificate of Alienability before a lease can be granted for customary land.  No such certificates were issued.  That is a violation of the law.  A project being carried out in violation of the law is illegal.  Em tasol.”

“In New Ireland there were seven SABLs granted, with no real consultation with the people.  Six of these, according to the Commission of Inquiry, were granted illegally – without a Certificate of Alienability.  Yet to this day logging continues.  My Government has declared that all logging must halt until proper compensation is made and permits investigated.  I call on the National Ministry and Department to support us, the people, rather than the logging companies. They must cease issuing further logging permits unless meaningful consultation with Provinces, as required under sec 115 of the Organic Law, is carried out.

Sir J concluded by saying “the entire world knows what is happening in Papua New Guinea forestry industry.  A World Bank report had basically the same findings as this report.  This report is only the latest of many that have found serious problems in the way logging is carried out in PNG.  The Forestry Ministry is supposed to be protecting the people of PNG.  It would be a refreshing change if Forestry would admit that we have problems.  We cannot fix the problems unless we admit they exist.”

“I admit this is a problem and as the Governor of New Ireland I intend to put a stop to it, there will be no more logging in New Ireland. We have had enough. NIPG intends to sue logging operators for damages to infrastructure and the environment, but above all we demand a say in the extraction of our Natural Resources”