Cash programme will hurt industry

Focus, Normal

The National, Wednesday July 1st, 2012

DURING the last few months in the administrative vacuum created by the constitutional crisis and then the national election, the European Union (EU) has ridden roughshod over standard protocols for introducing aid programmes in PNG.
It has pushed into the PNG bureaucracy programmes which will damage the country’s forestry industry, offering around US$20 million as inducement.
These programmes are unwarranted – the incidence of illegal logging in PNG is low.
They will harm the industry by increasing the costs.  Already profits are falling.
The kina is high because of the investment boom in minerals. This will not change in the short term.
One programme will introduce an EU model of regulation (FLEGT) to demonstrate logging by producers is legal and charge the cost to producers through a levy. 
Its budget is around US$12 million. 
While purporting just to improve the PNG Logging Code of Practice, it will rewrite forestry law and impose an elaborate and costly system to verify compliance by operators with forest laws.  
Prior consultation has been scant.
Protocols to avoid conflict of interests are also being ignored. 
A complex and costly system of physical compliance has already been designed by a company which has business links with the consultant selected by the EU to design the programme.
In other areas, the EU champions proper procedures and avoidance of conflict of interest. 
Apparently not though when its forestry programmes are involved.
The second programme is proposed by the Global Climate Change Alliance. 
This body is directed and funded by EC to alter forest practices in developing countries to reduce emissions of greenhouse gases.  
It has a budget of €8 million. 
The US$5 million-odd spent by the Climate Change office (mostly on McKinsey consultants – who recommended sea walls and mangrove swamps to manage global warming) did not demonstrate that carbon emissions from PNG were significant, because they are not.
Analysis by the PNG Forest Industry Association (PNGFIA) shows that assumptions that saving trees in PNG to store carbon instead of logging will be as profitable are wrong. 
One would expect this when deforestation rates are low and regrowth is strong.
Nevertheless, the aim of this project is to identify tree species which release fewer greenhouse gas emissions when harvested, or absorb more carbon dioxide than other species, then re-direct forest policy to favour those activities over conventional logging.
This programme will be used to justify reductions in logging concessions. 
The European Commission states it will also be used to fund anti-forestry NGOs.                  
The last time donors threw money at the forest industry in an effort to impose donor preferred sustainability policies was the ill-fated World Bank programme a decade ago which offered US$20 million, matchable to US$40 million, to overhaul PNG forestry management. 
That too was handed to anti-forestry Green groups to drive, leading the PNG government to direct the World Bank to cancel the programme.
Internal review by the World Bank rated this programme as a development failure. 
It appears EU officials do not think history precedes them or that the experience of others is worth reviewing. 
The real tragedy here is that action is needed to improve sustainable forestry in PNG.
Plenty of proposals have been put to donors to achieve this, but donors are blind to them – they do not fit pre-conceived climate change policies or the pictures painted by anti-forestry activists.
Meanwhile, the United Nations Development Programme (UNDP) and Food and Agriculture Programme (FAO) have endorsed wrong and distorted accounts of the rates of deforestation in PNG under the UN Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD) process which, endorsed by donors, serves as a channel for funding to mitigate emissions of greenhouse gases.
Under UNDP supervision, as assessment of the state forestry in PNG was prepared when funding under the so called “REDD” programme was made available. 
That assessment carried claims by NGOs that deforestation rates in PNG were high when FAO data showed they were not.
Notwithstanding this, the FAO endorsed the project document to advance a carbon mitigation scheme which had been prepared in the PNG REDD project office, despite the disregard for more reliable FAO assessments of deforestation rates which showed them as low and little cause for concern.
An official UNDP document which has been adopted as a key working tool for the UN-REDD project has now come to light with claims that deforestation rates are high in PNG.
It rests entirely on extreme
assessments produced by a group at the University of PNG, led by Remote Sensing Centre director Phil Shearman, which have been demonstrated as severely distorting the situation.
The Shearman assessment was critically assessed and its conclusions found as significantly overstating deforestation rates in PNG. – ITS Global