|AN INDUSTRY PERSPECTIVE OF NATIONAL FOREST PLANS
The requirement for a National Forest Plan was prescribed in the National Forest Policy approved by Parliament in 1990. Two and a half to three years ground work went into the policy statement from a fairly exhaustive process of discussion and back ground work by a wide spectrum of interests,(but mostly governmental).
Background and requirements of National Forest Plan
Having thrashed out an approved National Forest Policy, the development of a National Forest Plan, as prescribed under the Forestry Act 1991 (as amend ed) had no life breathed into it for five years This occurred while the NEGAP programmes focussed on many other issues of transitional administration, and covered a period most important from the Government side, of dramatic increase n revenue collections from the forest resource base.
For example, the rate per m3 of Government export lax collections between 1990 and 1995 increased by about 350 per cent, with the total collections increase moving from about K14 million to about K150 million over that period.
Government has recognized the value, to its economic profile, for regulating the sector to bolster revenue collections, but it must be recognized that PNG needs viable operations to maintain and expand this revenue base. This is where there have been many moments of discomfort on both sides.
Since under the Forestry Act new operations could not be commenced without a National Forest Plan it seems that effort was then expended towards creating an opportunity for resource mobilization.
The strategic potential of the resource base can/will be unlocked by the quality of long term management of the forest, and the opportunity for good results is dictated by the quality of planning and its successful implementation.
Industry is on the user end of Government policy plans and direction, and often can demonstrate legitimate reservations in some areas of proposed ‘industrial development” of the sector.
In PNG, the ink is still drying on the first National Forest Plan, and we can already see there is a long way to go to build an industry structure, and a resource structure into the future.
As a result, we now see the advertisement of a number of new areas, to be handled under the working arrangement of the new Forestry Act, and intended under sustainable management criteria.
Forestry is second only to Mining and Petroleum as an export earner
Here I would caution that conditions conducive to new investment in the forestry sector are hard to find and at the end of the day the activity achieved on the ground under current conditions could be a shadow of the substantial potential for development on offer if better conditions were available for investors.
But the National Forest Plan is pre scribed as, and should be, more than just the turning of the ignition key for resource mobilization. It should in a sense, provide the road map, and sign posts for an initial journey of 40 years into the future, and should nominate Ihe intended destination at the outset.
Components of the National Forest Plan
a)National Forest Development Guidelines
The way ahead needs good signposting to show the investor where he should be heading. These signposts under Policy, are the National Forest Development Guidelines, a fundamental in the prescription for the National Forest Plan. According to Policy:- The Guidelines will set out the broad objectives and predictions for the long term (le. the next 40 years) and address the medium term (ie. the next 10 years) in greater detail”.
Do we have that in the Guidelines initially established in 1993, now the subject for review under the Act?
The investors in the sector say no, and note that progress in the sector desperately needs appropriate guidelines to direct its confident development into the future As practical industry people we believe that the guidelines should be kept simple, probably a number of clear objectives set explanatory or elaborative notes.
We certainly don’t have that now, and I have no doubt that the working level is confused. This confusion will detract from desired long term results if not rectified. From experience, when you’ve got a confused worker at the rock face, the results are going to be less than best.
b) National Forest Development Programme
There are many who consider that this is the level to which PNG’s first National Forest Plan has been developed. If this is the case, this is understandable, as the N.F.P. is a document which should evolve with time as understanding and capacity improve.
I am sure nobody, and least of all industry, would suggest that this first National Forest Plan is perfect. But it is something to build on, and be guided by, provided that a clear enunciation of National Forest Development Guidelines is set out as indicated earlier.
So, in summary, the current programme fits the bill initially as basically it is the conglomerate of all the Provincial Plans, set out, scheduled and costed for the current tasks, but needs an underlying clear and simple set of strategic objectives to guide its evolution.
c) Statement of Allowable Cut Volumes
These should also be set out on a Provincial basis, and form the guideline for a ceiling for actual maximum cut within each province. Clearly there will be a difficulty under current permits in one or two Provinces, but beyond that, there appear to be few problems there.
I would comment; however, that it is recognized that the current calculations used to set the allowable cut are extremely conservative - using an actual yield of 1 2m3/ha, I understand - but are intended for review as better information is available.
On a National basis, the rate of cut is safely below the annual allowable cut of 49 million cubic metres, the best performance to date being about 3.75 million m3 in 1994.
Transition and matters affecting the industry
There has been many cross currents and pressures affecting the forest industry in the last few years. Economic analysts argue that it has been the absence of consistent, structured policies, irrespective who has been in government, which has seen erosion of business confidence and shortening of investment horizons in the timber industry.
Whatever the cause, the simple result is that the investment climate is one which investors have been apprehensive of making long term commitment Government needs to demonstrate that resource security and operating conditions are adequately intact and sound before moves to industrialization become the focus of investment in the timber industry.
Tracing the development of today’s condition of the industry we should give cognizance, again, to the fact that we in PNG are not market leaders, but market followers. We need to be alert to changing market conditions in order to protect our long term interest.
The question facing all of us, Government included, is where are we headed from here ? Some commentators have observed that if we don’t know where we are going, any road will take us there.
This may be all very well if you don’t care where you are going, but that approach is not entertained by any committed investor in the sector Investors need to be given a fair sight of an achievable target, and reasonable conditions which will enable them to get thereon their own merit.
Forest resources and the economy
The last 20 years have seen growth in the sector of about an eight fold in increase the annual log harvest figure, a major increase in log exporting, growth in the domestic processed timber market and a falling off of processed exports.
The overall impact of forest industry in PNG has dramatically increased, with the entire sector worth about K550 mil lion annually, and second only to the Mining and Petroleum sector as an export earner.
As a major employer and located strategically in rural areas, the timber industry is well placed to contribute to national development, given appropriate conditions to ensure its security and viability.
Papua New Guinea is the second largest tropical log exporter
Maintaining our existing markets
Suppliers in the region provide about 25 per cent of the imports of logs and sawn lumber into Japan. North America supplies 48 per cent of Japan’s imported quantities of these commodities. Other significant suppliers are Siberia, New Zealand and Chile. Papua New Guinea supplies only nine per cent of these commodities to Japan (1993 statistics).
Papua New Guinea is a country of relatively small population and extensive resources. While it is understandable that Papua New Guinean’s don’t want to relinquish their heritage and control over resources, successive governments have followed policies to attract foreign investment into resource sectors and some prerequisites apply.
If PNG wants ideal returns, ideal conditions must apply. However, sadly, it is not an ideal world, and astute compromises must be taken on board by all parties.
There is an immense amount of work to do yet in this regard, and there is no magic wand.
It is most disturbing to see the deterioration of some of our traditional markets. Japanese industry’s drawdown on South Sea Logs is easing by availability of less troublesome supplies of conifers and temperate forest timbers from North America, Chile, N.Z. and Siberia.
Supplies of tropical logs from Africa are increasing and all of this does not auger well for the security of industry in PNG.
If our markets fall away it will most likely be lost to a competitor from out side the region, and will be virtually impossible to recover. The designated production forest areas must be utilized and managed or we risk missing an opportunity to develop their potential to benefit the country: In sense, use it or lose it.
We would strongly advocate that the forest resources of the country are codified and managed under a long term plan of resource security and coordination.
Targets for the Resource Base
Firstly, where are we now? A chart of the currently identified/classified land in the National Forest Plan is below.
Figure. 2: Forest Land Classification of P.N.G.
You can see that currently, only eight per cent of PNG is under some form of resource acquisition, and this is hardly adequate in terms of mobilizing resources in the nation’s interest What we believe should be enunciated as a target, is that all contiguous areas with a forest resource potential greater than a certain level (in area) be targeted and classified as production forest in the long term.
Indeed, it is a significant shortcoming that while the classification of forests as a technical evaluation - figures significantly in the National Forest Policy statement, but does not carry over to the Forestry Act.
The FIA as the industry representative body will be calling on Government to address this as a technical exercise in order to preserve the sense of sustainable management of the nation’s timber producing potential.
If one looks at the combined areas of forest currently under acquisition, and those planned or with potential in the current National Forest Plan, we have the inferred target currently existing of 33 per cent of PNG land area with commercial forest potential.
Only eight per cent is currently under acquisition, and only about two per cent to three per cent is currently under operation
The resource potential exists The National Forest Plan should target the security and management of these designated areas in the National interest.
Mobilization, consolidation and security are the targets which industry would emphasize. A clear focus of the sector’s development in a well formed, practical National Forest Plan would be a sound base on which to generate monitoring skills: Capacity to mobilize and monitor should be developed hand in hand.
Given that areas of commercial forest potential cover only about one third of PNG, there is a certain balance inherent in dedication of strategic resource areas as priority long term forest management areas in the national interest
Forest legislation needs to target the benefits of long term land management programmes for forestry purposes and to develop means for customary owners to confidently participate in forest management practices which will form the basis of PNG’s future dedicated forest resources
These next few years are quite critical to the long term: with a sound and practical National Forest Plan, active open dialogue, competent regulation, resource owner support and a fair go for the private sector, the basis can be set for the strategic potential of the country’s forest resources to be realized.
This won’t just happen, however, it must be made to happen and the recipe contained in the National Forest Plan will dictate just how satisfying the results will be.
It is industry’s view that forest resource base planning consistent with an empirical set of objectives is desirable if the nation truly desires a structured, sound and viable forest industry sector.
Our experience, however, has been one of ad hoc changes to the rules of the game, and the shifting of goal posts for the last few years.
This does not auger well for the future if these past performances continue to be repeated.
Since the sectoral development plan, whatever it ends up being, will of essence be a long term plan, the strong will be in the best position to advance the development of the industry here. We in the industry want the ‘entrepreneurs” and fly by night operators”, probably even less than a committed Government would. Secure long term planning and objectives would go some way to minimizing their kind of adverse casual influence
In the industry we are all for appropriate, and progressive National Forest Plans which will stabilize our collective journey into the future.
We would like PNG’s National Forest Plan to be a useful road map for the future and are prepared to take our part in the potential for achievements which would be possible under practical guide lines and reasonable regulation. The industry believes that a clear statement of broad strategic objectives in the form of appropriate National Forest Development Guidelines is necessary to develop National Forest Plans as a framework for the future of the timber industry.
The way ahead, in the industry’s perspective, must be sign posted clearly with a consistent policy approach, resource security and long term dedication of land use for timber and other forest values, if we do not want to see the strategic potential of the Nation’s forest get lost on the way.
This article by Jim Belford of the Forest Industries Association.
Reprinted from PNG RESOURCES Magazine