Sir J Slams Forest Authority

Sir Julius Chan, Governor of New Ireland Province, has challenged recent statements by the Forest Minister, Douglas Tomuriesa, concerning a recent report from the Oakland Institute that was critical of the way the forestry industry is run in PNG.

“The Minister makes much of the fact that we are making K300 million per year from taxes on the logging industry” Sir J said. “But the truth is that these operators have destroyed the environment, roads, and bridges resulting in billions of kina in damages. They don’t adhere to conditions of logging permits – cutting trees hundreds of years old, clear felling areas- blatantly ruining rivers and creeks. They leave rotting destruction in their greedy path to secure prime timber, they are wreaking havoc on our environment and social traditions”

Governor Sir Julius Chan said, “what the Minister does not comment on is the fact that in Papua New Guinea the average price claimed by the logging companies at export is $US210 per cubic meter at export, while the average price worldwide is $US388 per cubic meter, almost twice what loggers claim in PNG. And our timber is as high, if not higher, in quality than any other timber in the world. We are being cheated out of hundreds of millions in tax revenue every year?”

“The simple truth is that the Forestry Department has allowed transfer pricing to go on for years, and this has cheated us out of money that is rightfully ours. The logging companies undervalue what they are exporting so they don’t have to pay high taxes, but they ship the logs on shipping lines they own, and they then sell them at high prices at the point of sale, usually China. So they make all the profit and pay very little tax. Surely the Minister knows this is happening.”