Opportunities for the smallholder sandalwood industry in ... - ACIAR

Policy issues for the development of the
sandalwood industry in Vanuatu
Before the late 1990s, the sandalwood industry in
Vanuatu was largely unregulated, with little control
over volumes harvested or prices paid to resource
owners (Gillieson et al. 2008). The industry was
characterised by periods of high extraction and
exploitation of resource owners. The introduction
of the Management and Control of Sandalwood
Trade and Exports Order (No. 3 of 1997) enabled
greater regulation through licensing of sandalwood
merchants and collection of government royalties.
This initiative brought relative stability to the industry
and improved prices for resource owners. The
Sandalwood Policy (2002) included requirements for
licensees to secure export permits before any sandalwood
purchased under the licence can be exported.
The policy restricted the export of unprocessed logs
and only allowed a licensee to export oil, powder,
spent biomass, and carving wood or carvings. From
2001, the industry has had two licensed buyers, each
with an annual 40 tonne licence. In 2007–08, an
additional 10 tonne annual licence restricted to Tanna
was in operation, but the enterprise has since ceased.
Sandalwood is the only species to be named in
the objectives of the National Forest Policy (1997),
which recognises the importance of its value to the
local and national economy. Achieving the objective
to ‘improve the management of sandalwood and
encourage the development of sandalwood industries’
in this policy is supported by the regulation of cutting
seasons and encouragement of local processing.
Some policies have been introduced in the past
10 years to improve the management of sandalwood
and promote the growth of the industry in Vanuatu.
These policies relate largely to the wild harvest
industry in terms of setting annual harvest quotas and
managing purchase licences. The industry has also
benefited from the active promotion of planting of
sandalwood by both government and private organisations.
Attracting further investment into this planted
sandalwood sector, however, requires new policies
relating to security of tenure over plantations and
rights of producers to market their own sandalwood.
Land tenure and
sandalwood plantings
Land in Vanuatu is owned collectively or individually,
through custom, giving owners the right to develop
and cultivate their land. Policy development regarding
the planting of sandalwood will need to recognise
custom land-ownership rights. Any change in policy
should not be retrospective and should only apply to
those plantings established after any new legislation
or policy initiative. With high population growth
(2.8%) (VNSO 2009), land available for planted
forestry in some highly populated areas (i.e. Tanna
and Paama) is decreasing as the number of users
increase. Increasing planted forestry in areas of high
population density may negatively impact on food
production in these areas, and, although sandalwood
can provide additional income, food security is of
higher priority in Vanuatu. The high value and relatively
small size of sandalwood trees, however, puts it
at a distinct advantage to other forestry species, since
it can be economically viable to plant small numbers
of trees within boundary plantings, as ornamental
trees in the village and as enrichment plantings in
areas marginal for agriculture.
No legal framework currently exists to secure
freehold land in Vanuatu; only leasehold land with
50–75-year periods is available. Investors wanting
to plant sandalwood would need to buy an existing
agricultural lease or negotiate a suitable lease with a
custom owner. The Forestry Rights Registration and
Timber Harvest Guarantee Act 2000 allows provision
for registering a forestry right (Part 2) or the accreditation
of a timber plantation (Part 3, Division 3). Both
investment and joint-venture sandalwood plantings
undertaken individually or in partnership with a custom
landowner can be registered as a forestry right
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