Govt wants log export ended

The National Business

By PETER ESILA
THE Government aims to phase out the export of unprocessed round logs starting next year and to expand domestic processing of logs to get more revenue, says Forest Minister Douglas Tomuriesa.
He said 90 per cent of the forest harvested was exported as unprocessed round logs while just 10 per cent went through downstream processing domestically.
According to the Bank of PNG Quarterly Economic Bulletin June 2016, from 2008 to 2015, the total export value of unprocessed round logs was K5654 million while for timber products (downstream processing) was K5895 million.
In 2015, export value of logs was K1040 million while timber products was K1050 million.
“If I doubled that from 10 per cent up to 20 per cent, we will be making billions easily,” Tomuriesa said.
“If we gave the industries instructions to raise them up to 20 per cent, 30 per cent, we will be making more than K2 billion in this country, so the industry has been ill-advising us.
“They have been telling us that if you push us through downstream processing, the country won’t make money, and we listen to them.”
A bill to amend the Forestry Act was passed in Parliament last
month to enable National Forestry Authority to become a self-financing agency.
“We have come up with a management levy that will support us come into 2019,” Tomuriesa said.
“It is envisaged that the management levy in a new forestry regulation will initially be set at K20 per cubic metre, based on the harvest of all logs from trees with at least 10cm diameter at breast height.
“Why I say phasing out and not total ban of round log exports is because in the past, ministers and boards have given licensces that are 10 to 15 years licences.
“If we go ahead and totally ban round log exports, they will take us to court because we have given them licences that are current.
“So what we will do is we will phase out round log exports gradually.
“As the licences expire, we will not renew them.
“We tell them that if you want to renew them, process logs into sawn timber, plywood and veneer.
“We have investors who have come in who are now prepared to go into downstream processing.
“They have already approached us. So far, two have already come to us. In the country already, we have very good downstream processing already.”
Tomuriesa said these included:

  • KK Connections in East New Britain;
  • Saban Enterprices in Milne Bay, Port Moresby and Magarida in Central;
  • Turama Forestry, which is RH in Kikori;
  • PNG Forest Products in Bulolo; and
  • Amanab Forest Products in West Sepik and Madang.