Source: Post Courier

THE forest industry in PNG remains a "loggers" industry without much down stream processing, Forest Minister Douglas Tomuriesa told Parliament on Friday. Mr Tomuriesa, in a ministerial statement entitled "Status of forest industry in PNG", said only about 15 percent of exports is in the form of timber while the rest are exported as unprocessed logs.

He said apart from PNG Forest Products, of which the Government owns 25 percent, producing plywood and kitset homes, there is no real forest industry as PNG remains largely a log exporting country.

"As a nation we have permitted the logging industry to harvest our natural forests since the 1960’s. Since then, we have allowed the industry to reap 11 million hectares of the 15 million hectares of commercially exploitable natural forests." "By comparison the total area planted for commercial species of trees covers a mere 60,000 hectares in only a handful of locations."

Mr Tomuriesa called on all members of parliament to support initiatives to strengthen the Forestry Act and also to support government intentions to give resource owners a greater share of the proceeds of their forest resource. The Minister also said the government is working on a time frame of 5-10 years to completely ban the export of round logs and encourage downstream processing.

He said there will not be any new export license issued to the current holders when their license expires to encourage the industry to go downstream. "It is a shame to admit that we do not have much control of our forest resource. The industry remains very secretive.

"They cannot reveal to us the average cost of production and profitability so we cannot accurately determine a fairer distribution of benefits stream derived from the exploitation of our natural forest.

"As a country we do not know whether we are getting our rightful share from the commercial exploitation of our natural forest resource," said Mr Tomuriesa. "I am not even sure the Government is getting its rightful share from the forest industry in the form of taxes."

"All we know is that the investors declare loss after loss, year after year, yet they never seem to go out of business. In fact some of them have grown and have even diversified into other industries outside forest industry." Minister Tomuriesa said despite various concessions to encourage downstream processing, the forest industry remains a loggers industry