Rooting Out the Rot in PNG’s Forest Industry

Papua New Guinea’s oldest daily newspaper is leading the calls for the government to ban foreign logging companies who have no respect for the law.

Time to Root out the Rot in PNG Logging’ was the headline for a recent Editorial applauding the efforts of a joint-agency task force, ‘Operesen Rausim Alien’. ‘Operesen Rausim Alien’ has uncovered illegal workers and unregistered equipment at logging sites across Northern Province.

It is time for the government ’to deal decisively with foreigners who do not respect our laws’, says the newspaper.

Last month the joint task force, comprising officials from Immigration and the police Fraud and Anti-Corruption division, raided four logging camps in Oro Province, according to media reports.

The local governor Gary Juffa has also welcomed the team’s operation. Juffa says such investigations are ‘essential’ and that companies which habitually breach PNG laws should be banned and persons who breach migration and labour laws should be blacklisted and deported.

However, although the media reporting of ‘Operesen Rausim Alien’ has been extensive, with numerous reports on EMTV , in the Post Courier and National newspapers and on radio, and online, the names of the logging companies and the businessmen behind them have not been mentioned.

So who are the logging companies operating in Northern province and who are the people behind them?

PNGi has been investigating.

What the media says

Firstly, lets look in a bit more detail at what exactly has been reported in the media.

One of the first media reports appeared on EMTV news on 19 August. EMTV revealed that at the first site visited, at Sambora in the Sohe District, the investigation team found 30 foreigners of Asian origin in possession of fraudulent visas and work permits.

The same story was also covered in the Post Courier newspaper and the Asia-Pacific report on 20th August.

According to the media, the workers were employed by two different companies operating in the same area and neither company had proper registration documentation. The team also evidently found the logging machines and vehicles were not registered.

On August 22, EMTV revealed 16 foreigners had already fled the second site to be visited, in the Musa Foru logging area, before the investigation team arrived. Locals told officials the Asian workers had left by helicopter the previous day. The daring escape was confirmed by video footage and other evidence according to a FM 100 news report and the Post Courier. The investigation team again found logging machinery and vehicles were not registered and had been operated illegally.

In total, 21 Asians found at Musa-Foru and Sambogo-Ifane, were arrested and changed with immigration offences according to EMTV. Police are also searching for the 16 who fled by helicopter and are believed to be in Port Moresby. 

On 28 August FM100 and PNG Facts reported on a further raid carried out by the joint task-force, this time at the Wanigela logging camp in the Collingwood Bay area. Here a further 27 Malaysians were arrested when it was found they had no visas or work permits. According to media there were no company or forestry documents produced to justify the logging operation.

On 31 August The National reported the comments of Border Security and Immigration Minister Westly Nukundj. Nukungj who confirmed a total of 48 foreigners had been arrested at the four logging sites in Oro province visited by the joint agency team. The Minister said some public servants were colluding with foreign businessmen to issue fraudulent work visas. 

The National also repeated the call from Oro governor, Gary Juffa, for the directors of the companies involved in the visa scams to be deported.

Logging in Oro

Foreign owned companies have been felling trees and exporting logs from Oro province for decades. Although we cannot assume this has been done illegally.

According to data from the Swiss firm SGS, which is employed by the PNG government to monitor all log exports, log export volumes from Oro reached a peak of 157,000 cubic metres in 2011.

Graph shows the volume of logs exported from Oro each year from 1993 to 2019 and the 10 exporting companies.

The level of log exports from Oro has not been as high as in some other Provinces, due in part to the vagaries of geography and organised resistance from local forest owners. Yet, between 1993 and 2019, almost 1.5 million cubic metres of logs were exported.

Graph shows the volume of log exports from Oro compared to the largest exporting Provinces.

In the last five years, three companies have been recorded as exporting logs from Oro; Viva Success Limited, Northern Forest Products and Oro Wood Industry Limited. In 2019, Oro Wood Industry was the only exporter.

Just three companies have been responsible for all log exports from Oro in the last 5 years.

In the three years from 2017-19, Oro Wood Industry Limited exported logs from three different forest areas, Ifane Block 1, Ifane Block 2 and Kumusi and Saiho Extension.

Oro Wood Industry has exported logs from three different forest areas.

In total, from 2017-19, Oro Wood Industry exported 108,576 cubic metres of logs from Northern province, with a declared value of around US$10 million.

The log export volumes from concession areas where Oro Wood Industry Limited has been operating.

The latest data from log monitoring company SGS shows that Oro Wood Industry Limited continues to be the only company exporting logs from Oro.

From Jan-June 2020 a total of 23,948 cubic metres of logs were exported from Oro

All the 23,948 cubic metres of declared log exports from Oro Province this year have been recorded as made by Oro Wood Products Limited from the Ifane project.

Oro Wood Industry is the only company recorded as making log exports from Oro in 2020

Oro Wood Industry Limited is the only company recorded in official SGS records as making log exports from Oro Province in 2019 or 2020.

This prompts a number of questions. Are the companies that were found to be operating at the four logging sites recently visited by ‘Operesen Rausim Alien’ part of Oro Wood Industry? Or, are they sub-contractors engaged by Oro Wood Industry to harvest timber on its behalf? Or are they somehow illegally exporting timber using the Oro Wood Industry name?

Or are these logging operations completely separate from and independent of Oro Wood Industry, and if so how are they able to export their logs without any government knowledge and with no SGS inspection?

While we wait the answers to these questions from the relevant authorities, let us look a little more closely at Oro Wood Industry Limited. Remember, this is the only company, according to official records, that since the beginning of 2019 has been harvesting timber and exporting logs from Oro Province.

Oro Wood Industry Limited

Oro Wood Industry Limited was first registered in Papua New Guinea in 2006, as a manufacturing company. It was then 90% owned by the Malaysian businessman, Yih Siang Hwong, also know as Roger Hwong.

After just two years, business was booming. According to official company records, at the end of 2008, the company had 168 staff involved in manufacturing veneer sheets and plywood. The company had assets of almost K7 million and an asset to debt ratio of 50%.

By the end of 2012 though, the company was not doing so well. Staff numbers had increased to 215, but the assets had decreased by over K1.5 million and the debt ratio was up – to over 99%.

The downturn continued. By the end of 2014, staff numbers had been slashed to just 73 and the asset value had declined by a further K700,000. Despite the cutbacks the asset to debt ratio had only marginally improved to 95%.

The down-sizing and job losses continued, and, by the end of 2016, there were only 10 staff members still on the payroll. The company seemed doomed, but an angel investor had been found.

In December 2016, Oro Wood Industry Limited took on a new shareholder. Yih Wei Hwong was issued with 9,000 shares, giving him joint ownership of the company alongside Yih Siang (Roger) Hwong.

The company’s assets immediately jumped by more than K6 million, but so to did the liabilities, suggesting the injection of a large loan.

By the end of 2017, staff numbers were back up to 195; though the company assets had fallen dramatically, to their lowest for almost a decade, just K1,297,553, and were now exceeded by the liabilities of K1,395,977.

A year later, at the end of December 2018, employee numbers had risen yet further, to 259. This number, according the company’s annual return, included just 6 non-nationals.

According to the company’s official records, its declared business is still the manufacturing of veneer sheets and plywood. There is no mention that it has been exporting raw logs since 2018.

Other Hwong logging connections

In addition to their ownership of Oro Wood Industry, Yih Siang (Roger) Hwong and Yih Wei Hwong are heavily connected to a number of other logging companies.

Yih Siang Hwong owns 95% of the shares in Ambogo Sawmill Limited. Both Yih Siang Hwong and Yih Wei Hwong are company directors. The other 5% of the shares in the company are owned by the Oro Provincial Government.

Both Yih Siang Hwong and Oro Provincial Government are shareholders in Ambogo Sawmill.

Ambogo Sawmill exported over 350,000 cubic metres of logs from six different logging concession areas in Oro between 1993 and 2010.

Ambogo Sawmill Limited annual log exports 1993-2010

Yih Siang Hwong was also the sole owner of Aitape Forest Products Limited from its registration in 2005 until it was deregistered in January 2020.

From 2002-14, Yih Wei Hwong was the owner of another logging company, PLW Limited (previously known as Hercules Bay Resources Limited). Between 2005 and 2008 PLW Limited exported 363,767 cubic metres of logs from East and West New Britain.

Yih Siang Hwong and Yih Wei Hwong have also both previously been a director of the logging company SSG Services (PNG) Limited (Yih Siang from 1996-2003 and Yih Wei from 2003-2004).

Between 2000 and 2006, SSG Services exported logs from a total of six logging concessions in both Central Province and East New Britain.

Yih Siang Hwong was also a director of Amana 56 Timber Investments Ltd from 2005-2009. Amanab 56 operates in the Amanab Blocks 5-6 logging concession in West Sepik from where it has exported over 800,000 cubic metres of logs since 2008.

Other Hwong businesses

Yih Siang Hwong and Yih Wei Hwong, the owners of Oro Wood Industries Limited, are not just involved in the logging industry.

PNGi’s investigation has revealed that the two men also jointly own several other companies and each has their own more extensive business networks.

Together they own Kumu Saiho Plantations Limited (with You Soon Hwang); Echelon Engineering Limited; Galaxy Resources Limited and Pinnacle Trading.

Three of these four companies have never filed an Annual Return. The exception is Echelon Engineering, its Annual Return for 2017 reveals no staff and assets of just K2.

Yih Wei Hwong also owns Pavillion Construction & Logistic Limited. According to its latest annual return the company employs 85 people of whom 7 are non-nationals.

Meanwhile, Yih Siang Hwong also owns Seribu Daya (PNG) Limited. The company was purchased from Yih Wei Hwong and You Hu Hwong in 2013. According to its annual returns the company has never employed any staff but at end of 2017 had assets of K1.6 million

Yih Siang Hwong also owns:

  • Wood Well Limited, registered in 2005. The company has not filed an annual return since 2007. 
  • Timber Well Limited, an investment company registered in 2005. No annual return since 2006.
  • Phoenix No.4 Limited; no annual return since 2010.
  • Papan Diwai Limited; no annual return since 2011.
  • DC Supermarket Limited; no annual return since 2007.
  • Two-thirds of Zoom Power Limited; no annual return ever filed.
  • 70% of Iwang Jaya Limited; no annual return ever filed.
  • 70% of Yema Investments Limited; no annual return ever filed.
  • 50% of Good Harvest Plantation Limited; no annual return since 2011.
  • 50% of H & K Investments Limited.
  • 50% Kumu Saiho Investments Limited, no annual return ever filed.
  • 30% of Tanah Mas Limited and Tanah Berjaya Limited; neither has never filed an AR

Yih Siang Hwong is also a minority shareholder in the building, real estate and property investment companies Dreamland Limited and Finglass Limited.

Deja vu

Illegal logging, immigration scams and Gary Juffa leading raids on remote logging sites by joint-agency task-forces; for anyone who has been paying attention these are all familiar headlines.

In 2015, Oro governor Gary Juffa publicly called on the government to do more to stop the influx of illegal foreign workers into the country and highlighted their role in illgal logging as well as other businesses. A few months later he commended the government for shutting down two logging companies illegally logging in the Province, but warned such activities were rife in PNG. “We ought to kick them all out”, said the vocal governor.

Fast forward two years to March 2018, and it was all happening again. Gary Juffa escorted a team of police to an illegal logging operation in Collingwood Bay where they seized heavy equipment and arrested thirteen asian workers, none of whom had work permit.

A photograph posted on Facebook by Gary Juffa in 2018 showing the police involved in the raid

Gary Juffa claimed the logging company had been aided by a number of corrupt officials who had provided fraudulent logging permits and that machinery was unregistered and the foreign workers lacked proper visas.

Too many of our resources have been stolen and, as this is a crime, the principals of these companies can be charged and prosecuted when you lay the complaint. You can also seize property as proceeds of crime.

We can engage the army and the police to shut down all such operations and seize and auction all machinery. If they sue us, so what? They are running illegal operations of a transnational criminal nature and they will lose in court.

A PNGi investigation, published in March 2018, pointed up the apparent willingness of government departments to facilitate illegal logging and other criminal activities associated with the fraudulent operations. It also decried the ability of the foreign business people behind the operations to avoid any interruption to their profits.

Now, two-and-a-half-years later, we are seeing exactly the same media headlines once again.

Seemingly, despite the occasional rhetoric from government Ministers, nothing ever changes; even Gary Juffa, with his admirable efforts to mobilize and empower law enforcement officers, is unable to ensure effective and lasting action to Take Back Our Forests.