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

or recognised through an accreditation of a timber
plantation. Both these forms of registration protect
the rights of producers and investors to harvest their
crop at maturity.
A forestry right requires the applicant to provide
a land title, surveyed and registered by the Vanuatu
Lands Department and therefore a land tenure recognised
under the Land Leases Act 1988. A forestry
right enables the holder to ‘establish, maintain, and
harvest or maintain and harvest a crop of trees on the
land’. This may therefore include both plantation and
natural timber stands.
An alternative to the forestry right is an accreditation
of a timber plantation with the Vanuatu
Department of Forestry (VDoF). The accreditation
requires identification of the area(s) of land comprising
the current or proposed timber plantation by
way of a map, survey plan or other suitable means.
This must be accompanied by details and supporting
evidence relating to the current or proposed timber
plantation. The simple process for accreditation
secures the rights of smallholders and investors to
harvest their planting(s) at the end of the rotation.
A sandalwood plantation can be accredited by the
VDoF on either registered leasehold land or custom
title. In cases where a land lease is not registered, ownership
of that land can be challenged by others. The
establishment of joint-venture/collaborative plantings
on custom lands may make the land more attractive
for potential challengers or claimants of that land.
Therefore, public announcements of joint-ventures
on customary title land should be made, and allow
the land to be challenged before commencement of
the joint-venture. This should help limit the likelihood
of challenges during the course of the investment.
Provided that public announcements are made before
planting, contracts between investor and landowner are
in place, and the planting is accredited by the VDoF,
any successful land tenure challenges during the sandalwood
rotation are not likely to affect the original
investment contract(s).
The most secure option for investing in sandalwood
plantings in Vanuatu would be to secure a leasehold
property. Structuring an agricultural investment in
this way, however, is often viewed unfavourably by
the government and community for its alienation
of indigenous ni-Vanuatu landowners. The option
of accrediting a plantation is available on land with
registered leasehold or customary title, and ensures
security of ownership of the plantation regardless of
land ownership.
Both a forestry right and accreditation of timber
plantation are exempt from the regulations within the
Forestry Act 2001, which requires the issuing of a
sandalwood licence, and the Physical Planning Act
1988. A general consensus within the industry is that
holders of either a forestry right or an accreditation
of a timber plantation should also be exempt from
the Vanuatu Commodities Marketing Board (VCMB)
Act (CAP 133) or any similar successive legislation.
Under this Act, the VCMB has the authority to ‘prescribe’
any agricultural product and exert monopolistic
control over its import and export. If sandalwood
was ‘prescribed’ by the VCMB, then ‘no person other
than the Board, its agents or persons authorised in
writing by the Board shall export or import (it) out
of or into Vanuatu’ (Republic of Vanuatu 2006).
The potential loss of control in marketing planted
sandalwood, however small that potential may be,
is counterproductive to attracting investment into
sandalwood plantations in Vanuatu.
Marketing of products from
sandalwood plantings
Although the Forestry Rights Registration and Timber
Harvest Guarantee Act 2000 is important to secure
the rights of plantation owners to harvest their trees,
it does not encompass their rights for marketing.
The marketing of plantation sandalwood would
therefore be subject to the conditions outlined in the
Forestry Regulations (Management and Control of
Sandalwood Trade and Exports). These regulations
restrict the purchasing, trading, processing and
exporting of sandalwood, sandalwood oil or any sandalwood
product to those with a sandalwood licence.
Therefore, any owner of a sandalwood plantation
would need to secure a sandalwood licence before
being able to export any product. The licensee would
be subject to the restrictions of harvesting within the
specified sandalwood harvesting season, typically
during the months of May to September of each year.
Such restrictions may not be an issue given that the
harvesting season is during the driest months and
is also likely to be the best time to harvest planted
sandalwood. To guarantee control over the end market
of trees planted today, sandalwood planters need to
secure a purchasing licence and hold that for the
entire rotation. As the Forestry Act 2001 only allows
a licence to be granted for a maximum of 10 years,
planters need to obtain a minimum of two licences
before any trees could be harvested.
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