Contribution of Forestry to Poverty Alleviation - APFNet

markets to earn extra income. Firewood is a major source of income for urban settlement
communities and helps alleviate poverty in these communities.
Ramu Agri-Industries Limited (a sugar company) recently ventured into large plantations of afforestated
grassland areas using Eucalyptus species for wood as an alternative energy source for its boiler system.
Under its afforestation program, people from surrounding rural communities were employed as laborers
in the plantations. Communities were also engaged to sell wood to the company through community
forestry. The company provided seedlings free of charge to communities to encourage the afforestation
program for fuel energy.
Production Forestry
GoPNG views industrial forestry as the major means to develop infrastructure and generate revenues
in rural areas, as majority of the forests are located in rural areas, some of which are very remote.
However, the Barnett Inquiry in 1987 revealed widespread corruption and abuses in industrial forestry
that deprived customary forest owners of their rights and benefits. Consequently, the situation did not
contribute much to the plight of the rural communities in terms of cash incomes, health, education and
other services.
Since the Barnett Inquiry and the major policy reforms in the 1990s, various reports (ODI 2006; Filer
2000; Filer and Sekhran 1998) have cited poor implementation of the reform measures to reverse the
situations discovered by the Barnett Inquiry. ODI (2006) generally concluded that the most recent piece
of legislation, the 1991 Forestry Act, re-asserted the State’s monopoly over timber sales, yet conflicts
continue to characterize the forest sector, suggesting that an equitable balance has yet to be found and
secured under the law. The evolution of the legal framework is still caught between the State’s desire
to control timber harvesting and the landowners’ desire to be involved in the sale of customary-owned
assets.
Forest projects provide very tangible benefits in terms of rural service provision in many areas, filling a
gap caused by the non-provision of such services by the State. Governance failure has been a noticeable
characteristic of the PNG forest sector for the last 20 years. More recently, a succession of Independent
Forestry Reviews commissioned by the government continued to question the way timber licenses are
issued and subsequently operated (ODI 2006). The 2003-04 review found that logging has little longterm
beneficial impact on landowners, although they bear the environmental costs. For many observers,
the reforms initiated in the early to mid-1990s are incomplete. The situation thus continuously denies
customary forest owners their rights and benefits from the development of their forest resources.
Industrial forestry in PNG is categorized into large-scale industry and small-scale industry. Large-scale
industry involves log exports and sawmilling while small-scale industry involves portable sawmilling
at community level. Large-scale industries are mainly foreign-dominated and contribute around 9% of
the total GDP, employing between 5-7% of the total formal employment. Small-scale industry, on the
other hand, is mostly community-based but records regarding their activities are not readily available.
This is an important sector that government currently does not pay much attention to.
Large forest industry companies are affiliated with PNG Forest Industries Association (PNGFIA),
an incorporated association of companies in all levels of operation in the timber industry. Under the
Forestry Act 1991, PNGFIA is a legally recognized body representing the interest of the industry and
has a place in the PNG Forestry Board. The PNGFIA has a current membership of 45 companies and is
intent on maintaining active representation of its members’ concerns in view of the many public issues
related to forestry industry in the country.
PNG’s large industrial forestry is focused on the harvesting of the natural forest areas for round log
exports. Raw logs provide most of the export volume and value, although sawn timber and veneer
have become increasingly important in the last three years. Privately-owned companies control all
commercial timber production from natural forest areas. The role of the State is limited to monitoring
and control, and it does not play an active role in forest management.
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