Gateway to international timbertrade

Papua New Guinea

Forest resources

According to the FAO (2015) Papua New Guinea (PNG) has around 33.6 million hectares of forested land, which constitutes to 72.5% of the total land area. Almost the full extent of the forested area is defined as primary or otherwise naturally regenerated forest, and PNG has about 62 000 hectares of forest plantations. Despite the high forest cover, PNG's forests are facing significant threats leading to deforestation and forest degradation. Deforestation rates are somewhat contentious, but usually range between 0.5 and 2.5 percent over the previous years. The major drivers of forest change in PNG are identified as illegal logging and conversion to other land uses, particularly agriculture.

Approximately 1.45 million hectares are allocated for protection, although there is no clear legal national definition of protected areas and consequently the extent of protected areas is much disputed. The biodiversity of PNG is extremely rich, containing over 5% of the world’s known biodiversity on a relatively small area. The country falls within the world's moist tropical rainforest zone. With its rugged terrain with the forested area stretching from sea level to an altitude of over 4 000 m, the forest types vary from mangrove forest, swamp forest and lowland rainforest to lower montane forest, upper montane forest, and dry evergreen forest.

It is estimated that only 3% of the country's land area is publicly owned, most of which are towns and cities, and the remaining 97% is owned by local communities or indigenous groups. The customary rights include rights to almost all natural resources, including forests, and landowner groups are consequently legally entitled to be involved in decisions concerning the management of their forest land.

Production and export

According to ITTO (2015) the industry of Papua New Guinea produced in 2014 about 5 million m3 of logs, of which 74% was exported as roundwood.

The country's forest industry is predominantly based on the export of logs from natural forests. As can be seen from the graph below China is by far the most important destination for PNG's timber, notably round wood. The other destination markets remain important for the exports of processed wood products, such as sawn wood.

There are many species harvested from PNG's forests. The top-10 of most important species for export from Papua New Guinea include Taun (Pometia pinnata), Merbau, locally known as Kwila (Intsia spp.), Malas (Homalium foetidum), Calophyllum (Calophyllum spp.), Terminalia (Terminalia spp.), Kamarere (Eucalyptus deglupta) from plantations, Dillenea (Dillenea spp., mainly D. papuana), Red Canarium (Canarium spp.), Pencil Cedar (Palaquium spp), and PNG Mersawa, also known as Palosapis (Anisoptera thurifera).

 

Cities and ports in PNG are poorly connected. Construction of new roads is hampered by rugged mountainous and a lack of government funding to create or improve more roads. Presently, only 3.5% of PNGs roads are paved. The principal ports for export in PNG are: Vanimo, Kimbe (West New Britain), Alotau, Port Moresby, Lae, Madang, Wewak, Rabaul (in East New Britain), Kavieng (New Ireland) and Lorengau (Manus Island). As there are relatively few roads, river transport is also important for both freight and passengers in the Western provinces and in the Gulf province.

 

Legality framework

The Papua New Guinea Forest Authority (PNGFA) is responsible to monitor and ensure compliance with the rules and regulations within the country's forestry sector, and is as such among others responsible for the allocation of timber harvesting rights. Timber harvesting in PNG's forests can take place under a variety of authorizations. Since the country's forests are almost exclusively owned by local communities, big concession timber rights can be acquired from customary owners through a Forest Management Agreement (FMA). A FMA is negotiated by the PNGFA and concessions under FMAs are acquired for 50 years. The land owners sell the cutting rights to the PNGFA in exchange for timber royalties, and the Forest Authority may then grant a Timber Permit to registered third parties within the private sector. Timber Permit holders are required to submit a project statement, a 5-year forest working plan and an annual logging plan to the authorities for approval. Operations under a timber permit need to follow the Code of Practice and Key Standards for selective logging in PNG.

Another form of timber harvesting rights are covered by various forms of Timber Authorities, which can only be issued for small-scale operations of up to 5,000 m3 where the area is located outside an existing FMA. Timber harvested under a Timber Authority cannot be exported in log form, except timber harvested for road line clearance (TA-02) or land clearing of a maximum of 50 hectares of trees for other land use (TA-03), and timber harvested from plantations (TA-05). Issuance of a Timber Authority does not require the requisites as set out for FMAs.

Holders of a Timber Permit or Timber Authority may obtain a Timber License to conduct a forestry activity that is outside the scope of the Timber Permit or Timber Authority. A Timber License has a maximum validity of 12 months.

Unlike Timber Permits, which are issued for selective logging, Forest Clearance Authorities (FCA's) are issued for the clear-felling of natural forest with the purpose of agriculture or other land use development for an area greater than 50 hectares. Applicants for FCA's need to meet a significant set of requirements before an FCA can be issued. The current legislation has the possibility of FCA's being issued for Special Agriculture Business Leases (SABL's), which are source of much controversy due to the problems associated with the granting of these leases from the landowners. SABL's allow the lease holder to remove the logs, instead of an independent contractor appointed by the PNGFA as is the case for normal FCA's. For a SABL to be issued over customary land, the customary landowners must first lease their land to the state, which then leases the land to a lessee for development purposes. If forest clearance is planned under a SABL, developers must acquire a FCA from the PNGFA.

Natural forest logging operation shall comply with Papua New Guinea Logging Code of Practice 1996, and the authorized 5-year working plan and annual logging plan shall be respected. All harvested logs must be classified correctly according to species, quality and quantity, and logs can only be removed from the log landing once they are tagged with official PNGFA log tags and the tree information has been entered into the official PNGFA Log Scaling Record Sheet. The log tag represents the site where the logs have been harvested and a log number. A three letter code for genera and species name for each log exported out of the country are also written on the logs. The tags are provided by Société Générale de Surveillance (SGS), which implements the PNG's export log monitoring system. Each tag has two tear-off sheets which are removed at the time of shipment (one for the SGS inspector and the other for the exporter). Negotiated prices for sales of logs need to be endorsed by the marketing branch of the PNGFA before finalization of the sales contract. After endorsement the sales contract must be submitted to the PNGFA together with an application for a Log Export License. At the same time SGS must be notified of all impending log shipments using an official information sheet. The exporter is required to ensure that royalty payments have been made on all logs included in the Statement Of Logs To Be Exported. SGS checks the details of the permitted shipment as shown on the Log Export License with the summary of the Statement Of Logs To Be Exported, and does a physical check on the logs for correct scaling and species identification. Once ship loading has been completed SGS produces a Log Inspection Report presenting the official verification of which type of timber species and which volume is being shipped/exported. This report is used by both the PNG Forest Authority and Customs Boarding Officers to clear shipments at time of export.  The exporter is then required to send copies of all commercial documents (Bill of Lading, Invoice, and Export Entry) to the SGS Head Office.

Key documents

The below listed key documents are based on the applicable legislation and are considered to play a key role in demonstrating legal origin.  The full list of applicable legislation is accessible here.

Harvesting

Business or Company Certificate
Investment Promotion Authority (IPA)
Proof of registration as a legal business with the Investment Promotion Authority.
Certificate of FIP
PNGFA
Proof of registration as a Forest Industry Participant
Landowner Consent
Consent of the communal land owners for harvesting on their lands
Timber Permit
PNGFA
Permit for concessionaires to harvest logs in the concession.
Annual logging plan approval
PNGFA
Demonstrates that the annual logging plan was submitted and approved by the authorities.
Log tag
SGS
Official log tag attached to the logs from the log landing until its final destination, allowing to trace the log bag to the corresponding block of harvest.

Trade and export

Certificate of FIP
PNGFA
Proof of registration as a Forest Industry Participant, also applicable for processing facilities
Log Inspection Report
SGS
Report on the inspection by SGS of the shipment of the specific batch of logs, which includes verification of log scaling, species identification and verification of the Statement of Logs to Be Exported against the Log Export License
Log Export License
Department of Trade and Industry
A license related to a specific batch where the sales contract has been endorsed by the forest authorities.

Bans and quota

The following species are banned from export in log form:

  • Kauri Pine (Agathis spp.)
  • Hoop Pine (Auracaria cunninghamii)
  • Klinkii Pine (Auracaria hunsteinii)
  • Celery-Top Pine (Phyllocladus hypophyllus)
  • Cordia (Cordia dichotoma)
  • Dacrydium (Dacrydium nidulum)
  • Ebony (Diospyros ferrea)
  • Kerosene wood (Cordia subcordata)
  • Libocedrus (Libocedrus pauanus)
  • Podocarp (Podocarpus spp.)
  • Brown Podocarp (Decussocarpus wallichianus)
  • Highland Podocarp (Dacrycarpus imbricatus)
  • Rosewood (Pterocarpus indicus)
  • Balsa (Ochroma lagopus)
  • Blackbean (Castanospermum australe)

Cites and protected spieces

There are some tree species listed on CITES Appendix II from PNG:

  • Ramin (Gonystylus spp.). The CITES listing applies to all parts and derivatives of the tree, except seeds; seedling or tissue cultures obtained in vitro, in solid or liquid media, transported in sterile containers; and cut flowers of artificially propagated plants.
  • Agarwood (Aquilaria spp.). The CITES listing applies to all parts and derivatives except: seeds and pollen; seedling or tissue cultures obtained in vitro, in solid or liquid media, transported in sterile containers; fruits; leaves; exhausted agarwood powder, including compressed powder in all shapes; and finished products packaged and ready for retail trade; this exemption does not apply to beads, prayer beads and carvings.

National action on timber legality

PNG has a Timber Export Monitoring system (TEMS), which is implemented by SGS. Under the TEMS, SGS ensures at the time of export that all logs exported have a legal Export Permit and Licence, are properly declared, that the cargoes are correctly valued (based on PNGFA approved prices and volumes as per the SGS Inspection Report) and that relevant taxes have been paid. The SGS system only enables tracing of logs back to logging blocks, not to individual stumps. In addition, the system does not involve any checks on the legality of license issuance, harvesting practices or most other forest-related regulations.

PNG is currently not negotiating a VPA with the EU.

Third party certification

As per January 2016 PNG has 39,633 hectares of forest, currently only plantation forest, which are covered by FSC Forest Management certificates. This is currently the only third party certification scheme with valid certificates in the country. In the past there were some valid SGS TLTV forest statements, but these statements have expired and will not be renewed as SGS no longer offers the TLTV service anywhere in the world.

Contacts

Papua New Guinea Forest Authority (PNGFA)
P O Box 5055
National Capital District
Boroko, Papua New Guinea
Tel: +675 3277841
The Forest Authority is responsible for the regulation, monitoring and enforcement of the rules and regulations within the country's forestry sector
Forest Research Institute of Papua New Guinea (PNGFRI)
Prof Simon Saulei
Papua New Guinea
PNGFRI is the scientific research division of the Papua New Guinea Forest Authority
SGS PNG Ltd.
PNG Forest authority HQ
Frangipani St. Hohola
P.O. Box 1260
Port Moresby, Papua New Guinea
Tel: +675 323 1433
Certification body, in PNG responsible for the implementation of the country’s Timber Export Monitoring system (TEMS)
Papua New Guinea Forest Industries Association
P.O. Box 229
Waigani, National Capital District
Port Moresby, Papua New Guinea
The PNG Forest Industries Association (inc.) is an incorporated association of companies involved in all levels of operation in the timber industry in Papua New Guinea.
WWF Pacific - Papua New Guinea
PO Box 158
Diwai
Madang, Papua New Guinea
Tel: +675 422133
WWF has a large program based in PNG, dating back to 1990 when the South Pacific Program was established. It focuses on forests and freshwater issues.
Foundation For People and Community Development Inc. (FPCD)
PO Box 1119 Boroko,
National Capital District
Port Moresby, Papua New Guinea
Tel: +675 325 8470
FPCD's Ecoforestry Programme activities include awareness, forest management trainings, sawmill trainings, start your timber business trainings, good governance trainings, forest survey and inventory, forest replenishement, milling, local marketing and export of milled sawn timber under the Ecotimber label.
Papua New Guinea Eco-Forestry Forum
P.O. Box 3217
Boroko, National Capital District
Port Moresby, Papua New Guinea
The PNGEEF is a NGO dedicated to promoting integrated rural community development and sustainable resource use through a viable and sustainable eco-forestry industry.
CELCOR (Center for Environmental Law and Community Rights Inc)
Section 225, Allotment 05
Kunai Street Hohola
Port Moresby, Papua New Guinea
Tel: +675 3234509
CELCOR/Friends of the Earth Papua New Guinea. Environmental NGO lobbying on natural resource management, education and awareness raising.

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