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Evaluation of Social and Environmental Risks Accompanying the Procurement of Timber from Papua New Guinea

Background and Objectives:
The background to this study is concerns that have been raised over the years of the social and environmental impacts of timber operations in Papua New Guinea (PNG). The aims of this report are to examine social and environmental risks inherent in the procurement of timber from PNG and to review current initiatives and trends towards legal verification and sustainability certification in PNG from the perspective of whether these reduce the social and environmental risks of timber procurement.

Methodology:
The report is based on the review of existing written materials and information gathered through interviews with key informants in PNG during the visits by the authors to PNG in 2009 and 2010.

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Table of Contents

ABBREVIATIONS
EXECUTIVE SUMMARY

1. Introduction
   1.1. Background and Objectives
    1.2 Structure of the Report
    1.3 Methodology

2. Forest Management Framework in PNG
   2.1. History and Background of the Current Management System
   2.2. Laws Relating to Forestry
   2.3. Forest Management Administrations
   2.4. The Management System
      2.4.1 The Permit Process for Logging Operations
      2.4.2 The Implementation and Monitoring System of Forestry-Related Laws

3. Risk Assessment Regarding the Political System and Governance
   3.1. The General Political Situation
   3.2. The Legal System
   3.3. The Enforcement Systems of Supervising Administrations
      3.3.1. The PNG Forest Authority: PNGFA
      3.3.2. Department of Environment and Conservation
    3.4. Issues Relating to the Permit Process
      3.4.1. Conditions Under Which the FMA System is Applied
      3.4.2. Projects for Which Permits Were Issued Under the Former Forestry Act
   3.5. The Issue of Unauthorized Logging
   3.6. The Issue of Transfer Pricing
   3.7. Fraud and Corruption
   3.8. Stakeholders that Complement the Government and Administrative Institutions
      3.8.1. International Aid Agencies
      3.8.2. Civil Society
   3.9. Conclusions

4. Risk Assessment in the Area of the Environment and Ecosystems
   4.1. Geographical Features
   4.2. Summary of Forest Conditions
   4.3. Biological Diversity
   4.4. Decrease and Degradation of Forest Resources
      4.4.1. Most Recent Studies on Forest Decrease and Degradation
      4.4.2 The Principle of Sustainable Yield Management and Annual Allowable Cut
      4.4.3. Logging Method
      4.4.4. Environmental Pollution, etc.
   4.5. Environmental Administration related to the Forest
   4.6. Conclusions

5. Risk Assessment of People’s Lives and Rights

   5.1. Transfer of Timber Rights and Forest Management Rights
   5.2. The Problem of Consent from Landowners
   5.3. Payment of Financial Compensation
   5.4. Provision of Additional Benefits
   5.5. Impacts on Local Communities
      5.5.1. Financial Impacts
      5.5.2. Other Impacts
   5.6. Reports on Conflicts and Violence
   5.7. Conclusions

6. Recent Changes in PNG’s Forest Management

   6.1. The Failure of Forestry and Conservation Projects and the Withdrawal of the World Bank
   6.2. Recent Movement in Government Sector
      6.2.1. Policies and Laws
      6.2.2. The law enforcement capabilities
      6.2.3. Reducing Emissions from Deforestation and Forest Degradation
   6.3. Emerging threats to the forest
   6.4. Voluntary Legality Verification and Sustainability Certification
      6.4.1. FSC Certification
      6.4.2. SGS Timber Legality and Traceability Verification - An Industry Effort
      6.4.3. NGO’s Effort for FSC Certification of Large-Scale Logging Operation
      6.4.4. Raw Log Export from PNG
      6.4.5. Conclusions

7. Conclusions


References



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