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‘Old’ forestry law best bet for forest
April 29th, 2006
PAPUA New Guinea would
need to amend the Forestry Act 1991 and revert largely to previous
legislation if the government wants to exploit the full potential
of forestry resources, an Australian economist suggests.
Mr Tim Curtin said “the
Forestry Act was largely a response to what in retrospect seems
the half-baked Barnett Report, with its exhaustive exposure of alleged
‘depredations’ through the claimed transfer pricing
of foreign logging companies”.
Mr Curtin said that on
closer inspection much of the report’s evidence of transfer
pricing was false, mainly because Barnett had failed to allow for
freight costs when comparing cost insurance and freight log import
prices in Japan with free on-board prices in Papua New Guinea.
“Malaysian and Papua
New Guinea log export prices tracked each other very closely in
the 1980s and showed the same difference from Japan’s import
prices,” he said.
Mr Curtin said that instead
of seeking to strengthen the capacity of customary owners of PNG’s
forests to negotiate directly with logging companies to secure an
equitable share of logging revenues, the Forestry Act “in
effect nationalised the country’s forests”.
He said the role of the
supposed owners was reduced to being no more than spectators of
the exploitation of their large single source of wealth.
“The 1991 Act would
have made a real contribution to improved management of PNG’s
forestry resources if it had put in place mechanisms to allow for
ownership of designated areas to be vested in landowner companies
rather than the incorporated land groups, because the Act governing
the latter makes no effort to define the land to which the ILGs
“In addition, the
ILG Act has vastly inferior governance and accountability provisions
compared with those in the Companies Act 1997.”
Australian National University
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