Prime Minister Hon. James Marape has announced that the forestry sector has enacted two new laws to ensure the country gets maximum value from its forestry resources.
The laws, relating to the State Marketing Agency (SMA) and Purchase Option (PO), are among a number of initiatives that the PNG National Forestry Authority has undertaken during the last five years under the Marape Government.
These laws aim to ensure that the resource owners – the people who own the land on which the trees are being harvested for export – receive greater benefits from their resources while contributing more to the country’s revenue, particularly through downstream processing.
Prime Minister Marape highlighted these laws in a five-year anniversary report of his government presented to Parliament last week.
“In forestry, we have enacted laws that will establish the State Marketing Agency (SMA) and Purchase Option (PO) to buy logs from permitted operators. This cuts down on other unfair trade
practices, especially transfer pricing and tax evasion. Downstream processing is the end game out of all of this,” he said in the report.
Despite the forestry industry making an important contribution to PNG’s economy for many years, it has faced numerous criticisms, prompting the industry to take significant steps to improve its image for the benefit of the country.
Currently, the vast majority of timber produced in the country and exported is in the form of raw logs – a trend the Marape Government seeks to change by promoting downstream processing, thereby exporting finished products that fetch higher prices than raw materials, ultimately contributing to the country's overall economic improvement.
The Prime Minister acknowledged the economic challenges facing the people and assured them that his government is making every effort to turn the tide, including enacting laws in the forestry sector to ensure progress and positive changes in the economy, though major improvements will take time.
“What we have done is foundational. Its impact will come given time. We’re dealing with issues in totality, not haphazardly, so as to achieve one outcome,” Prime Minister Marape said.
“We’re laying down strong building blocks under difficult circumstances. We inherited an economy that was managed poorly.”
