Rubber company scam revealed

National, Normal


CHINESE companies have reportedly been offering lucrative deals to locals in return for the purchase and sale of rubber in Abau district, Central province.
According to a rubber dealer from the district, the companies  have been buying raw rubber from locals at higher fees and then exporting unprocessed rubber overseas, violating Government directives.
“These  Chinese companies are operating on a ‘come-and-go’ basis depending on the price of rubber on the international market,” the local buyer said.
“They have no established facilities where they can properly process rubber before exporting it.
“They are here one day to pay and collect, and pack up the next day and leave. These operations have been going on for two years now and despite having made several attempts in reporting the matter to the responsible authorities, nothing has been done about it,” the buyer said.
The buyer, who did not want to be named, said the operations had affected genuine registered local buyers like himself.
Employees from two main buyers, processors and exporters of rubber in the district, Galley Ridge Holdings and HR Global have also confirmed the allegations.
“Production from rubber here in Cape Rodney was good until 2009. Then, we started to see decline.
“We have seen low production for the month of January and February this year. Production rate was 120 tonnes for 2009 and has dropped to 75 tonnes this year,” Simon Maru, an employee of Galley Reach Holdings, said.
“This is because other Chinese companies are coming in and buying rubber there and forcing  established companies like GRH and NR Global to increase our rubber buying price to match what they were offering,” he said.
He said that his company had to lay off some its workers in the last two months because of low rubber production.
“It is unfair to our companies that run factories and incur extra costs because the exported raw rubber is processed overseas and sold as that country’s rubber or sometimes exported back into PNG as a finished product,” a staff member from NR Global said.
He added that the exported raw material did not earn premium price, thus PNG lost out in export revenue.
Officials from PNG Custom Services were unable to confirm if the reports were true, however, the department of Agriculture and Livestock Deputy Secretary and caretaker team leader for rubber, Vele Kagena, said the department had received complaints from rubber companies and were aware of the situation. They said they would deal with it as soon as the board situation had been resolved.
“We have received complaints from local buyers and will wait for the formation of the new board who will then look into the matter,” Mr Kagena said.