Forestry makes an important contribution to PNG’s economy. The challenge is to combine development of the industry with sustainable management of a valuable natural resource
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ense tropical forest extends over more than 70 percent of Papua New Guinea, sustained by high levels of rainfall. With some 26 million hectares covered, PNG boasts one of the largest expanses of rainforest in the world.
The forestry sector is expected to play a significant part in the government’s export-driven economic recovery drive. The sector is PNG’s third largest revenue earner and a major contributor to the overall economic and social development of the country in terms of infrastructure development, employment and income to resource owners in the form of royalties, premiums and project development benefits.
The main thrust of the government’s policy is to move the industry towards downstream processing and the creation and export of value added products.
Minister for Forestry Patrick Pruaitch says, “We have natural species that are among the best in the world. We are slowly but surely moving into the area of downstream processing and we want to attract investors to help us.”
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The Minister believes forestry holds enormous potential for generating revenue for the government, landowners and investors. “I am very positive about the sector. We are pursuing a number of new policy initiatives to realise the full potential of the sector, and over the next five years it will bring enormous benefits to our country.”
At present, the industry is predominantly oriented to the export of logs. Twenty-five projects of various sizes are currently in operation, most of them dedicated to log export. Of ten forestry projects announced last year, at least three are expected to come on line by mid 2004 in the East Awin, Rotok Bay and Asengseng timber concession areas. A further 32 projects are at various stages of planning and development.
At the same time, exports of value added products have been increasing. The export of sawn wood rose from 32,000 cubic metres in 1998 to more than 42,000 cubic metres in 2002, and plywood and veneer production will increase with the establishment of Panakawa Mill in the Western Province.
Incentives are being provided to attract investment into the processing of other forest products. Huge potential is seen in developing non-timber products such as rattan, eaglewood, orchids, sandalwood, resins, essential oils, mushrooms and medicinal plants.
The government’s aim is to ensure that the timber industry maintains a log export level of 2 million cubic metres per annum. At present, the chief markets for PNG’s logs are Japan, South Korea, China, the Philippines, Taiwan and India. The Minister says additional customers need to be found.
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“The
industry needs to diversify its export market to remain competitive
and contribute meaningfully to the development of the country. New markets
such as Thailand and the Middle East countries will be sought out, as
they offer alternative destinations for the export of round logs and
processed timber products.”
Terry Warra, Acting Managing Director of the National Forest Service,
says the aim is to gradually shift the emphasis from round logs to finished
products.
“We have been concentrating on the round log export but there is more money involved in finished products. We hope to be able to reduce the ratio from 80 percent round log export to 75 percent or 70 percent, and we are looking at providing incentives to attract investors into downstream processing.”
Foreign aid, particularly from the Australian government through AusAid, has made a significant contribution to the development of the sector and is helping PNG to sustainably manage its forest resources. Other donors are the World Bank, the Japanese International Cooperation Agency (JICA), the EU, including the UK, New Zealand and the United States.
The EU is currently funding a K22.5 million (£3.7 million) five-year eco-forestry project aimed at assisting landowners with small-scale sawing projects and export of certified timber.
PNG is a signatory to the International Tropical Timber Agreement, which emphasises the importance of sustainable development, and has also received assistance from the International Tropical Timber Organisation.
The importance of reforestation is recognised by the government. “Harvesting of natural forest resources must go hand-in-hand with a programme of reforestation by both the timber industry and landowners,” says Mr Pruaitch. “The government will be doing all it can to assist.”
The National Forest Authority has been working on a reforestation policy, spelling out the role of landowners, investors and the government in the development of forest plantations.
Sites are being investigated for the creation of new forest plantations
The government says forest plantations have a huge potential in PNG. According to Mr Pruaitch, wasteland and other available land is being looked at for development of plantations on a large scale.
“The government is looking at promoting forest plantations to complement the natural resource. While we have vast resources still available in terms of natural forest, it is the government’s ultimate aim to ensure that we continue their sustainable management. Forest plantations can make a major contribution.”
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