The Kumil logging project: A history of illegality, conflict and abuse
The Kumil logging project in Madang Province is a classic example of the conflict, mismanagement and illegality that clouds the national forestry sector.
The rights to harvest logs from the forests of Bogia district of Madang were first acquired by the State from landowners in 1984 under a colonial era Timber Rights Purchase agreement.
The first recorded logging though did not start until 1996. This was five years after the Timber Rights Purchase concept was abolished in the 1991 Forestry Act, but there was no attempt made to bring the project into line with the new law.
That logging operation was short-lived though. After just two years the logging company, Bismarck Industries Ltd, abandoned the project and the forest fell silent.
Five-years on, in 2002, another Malaysian logging company, Madang Timbers, tried to revive the project. But again, the efforts were short lived. Only 9,910 cubic metres of logs were exported before the project was again abandoned.
Another 15 years passed before the chainsaws returned. In 2018, an ostensibly new logging company, Woodbank Pacific Limited, set up operations.
It was now 34 years since the original Timber Rights Purchase agreement with local landowners had been signed and 14 years since that agreement had expired. It was also 17 years since the TRP mechanism had been replaced in the 1991 Forestry Act. Nevertheless, the PNG Forest Authority did not attempt to acquire the consent of the current day landowners or sign a new agreement with them.
Instead the PNG Forest Authority relied on the obsolete 1984 Timber Rights Purchase Agreement as evidence of the informed consent of the local landowners when it issued a Timber Permit to Woodbank Pacific.
Free prior informed consent from local landowners is a basic legal prerequisite for any activity on customary land according to the Constitution.
The PNG Forest Authority’s failure to properly obtain landowner consent before issuing the new Timber Permit means the subsequent logging has been both illegal and highly divisive for local communities.
Under this illicitly conceived arrangement Woodbank Pacific has exported 125,000 cubic metres of logs since 2018, valued at over K40 million. Meanwhile the landowners have been involved in numerous expensive legal battles that reveal the deep community divisions.
Rival logging companies divide landowners
Since setting up its operation in the Kumil Timber Rights Purchase area (Kumul TRP), Woodbank Pacific has not been having things all it own way.
A rival logging company, Innovest Limited, has been battling for the hearts and minds of local landowners and engaging in some expensive court battles. It is through those court proceedings that the recent history of the Kumil TRP has been laid bare.
According to court documents, it was Woodbank Pacific who first revived the idea of logging in the Kumul area. In October 2017, the company entered into an ‘Assistance Agreement’ with local landowners. Under the agreement, Woodbank would help the landowners to acquire a Timber Permit and, in return, they would enter into a Logging and Marketing Agreement with Woodbank.
Three weeks after the agreement was signed, with help from Woodbank, the landowners registered their own company, Papir Holdings Limited. The new company’s board of directors then approved Woodbank Pacific as their chosen logging company and the parties signed a Logging and Marketing Agreement.
Only seven of the ten appointed directors of Papir Holdings attended the signing of the Logging and Marketing Agreement. The three that did not attend had formed an alternative faction that aligned itself with a second logging company, Innovest Limited.
The supporters of Innovest then sought to obtain their own logging rights through an extension to a previous Timber Permit which had been granted to a separate company, Papir Development Corporation Limited. This Timber Permit had expired in 2005.
Despite the efforts of the rival consortium, Innovest and Papir Development Corporation, it was Papir Holdings that was granted a Timber Permit, No.12-22, for Kumil TRP on 5th Dec 2017.
How the PNG Forest Authority could have been satisfied, in circumstances where it had received two alternative applications for a Timber Permit, that Papir Holdings and Woodbank enjoyed the support and consent of all the landowners is unclear.
Five days later, on 10th December 2017, the majority of Papir Holdings’ directors agreed to sign a Logging and Marketing Agreement with Woodbank. The next day the agreement was executed.
On 15th December 2017, the National Forest Board granted Woodbank a Timber Licence to operate in the Kumil TRP. Giving the timing, it is likely that Woodbank must have submitted its licence application before it had signed the Logging and Marketing Agreement with Papir Holdings.
This though was far from the end of the matter.
Just five days later, on the 20th of December 2017, a purported meeting was held of shareholders at Papir Holdings. This meeting terminated and replaced six of the directors who had supported Woodbank.
By March 2018, the records of the Registrar of Companies showed Papir Holdings had 11 directors, 4 from the original 10 and 7 new appointees.
The new board then filed court proceedings to have the Logging and Marketing Agreement with Woodbank declared null and void. A court order was duly granted on 25th May 2018, but four months later it was set aside and the proceedings dismissed.
Despite the dismissal, in the period between May and September the National Forest Board acted on the initial court order and cancelled Woodbank’s Timber Licence and the board of Papir Holdings signed a new Logging and Marketing Agreement with Innovest.
Yet another meeting of the shareholders Papir Holdings was held on 24th August 2018. At this meeting the six original board members were reinstated and the directors aligned with Innovest were removed. The changes were duly registered seven days later.
Two sets of National court proceedings then ensued to determine who were the lawfully appointed directors and which Logging and Marketing Agreement was valid. The two cases were joined before trial.
At trial, forty-two uncontested affidavits were filed as evidence. After hearing submissions from the lawyers, the judge delivered an oral decision. He declared in favour of the original directors as the proper officers of Papir Holdings. All subsequent changes to the board were declared to be invalid. However, the judge also decided that the original Logging and Marketing Agreement with Woodbank was void, while the Logging and Marketing Agreement with Innovest was deemed valid and lawful.
Unsatisfied with this verdict, three appeals were then filed by Woodbank and the Chair of Papir Holdings challenging the declaration in favour of the Innovest Logging and Marketing Agreement.
The matter then proceeded to the Supreme Court where, in November 2021, the Logging and Marketing Agreement position was reversed.
The Supreme Court found that the trial judge did not give adequate and sufficient reasons to explain his decision on which Logging and Marketing Agreement was valid. As this was in breach of the rules of natural justice, both decisions of the trial judge, validating the Innovest Logging and Marketing Agreement and voiding the Woodbank Logging and Marketing Agreement, were invalid.
The Supreme Court then went one step further and imposed its own decision. It declared the Logging and Marketing Agreement with Woodbank to be valid and lawful and the Logging and Marketing Agreement with Innovest to be void and of no effect.
In the interim though, while the court cases wound their way through the judicial process, Innovest had been busy on the ground in Madang. From the middle of 2021 until mid 2022, Innovest was logging on the Western plains of the Kumil river, inland from Ulingan Bay. As PNGi reported at the time, many locals were not in favour of the logging but this did not stop the company.
The Supreme Court decision did though bring an end to the logging. Innovest packed up their equipment and left the area. Mysteriously though, the logs they felled have also gone – but no log exports from the area by Innovest have ever been recorded by the PNG Forest Authority.
While Innovest has now departed the scene this has not resolved the conflict between different landowner factions. While the two factions fighting for control of Papir Holdings were both in favour of logging, there is another group of landowners who oppose any logging at all.
Logging v no logging
The infighting over control of Papir Holdings and which logging company should hold the harvesting rights over the Kumil TRP area tells only part of the story of the deep divisions between the customary landowners of the region.
There is third contingent of landowners who are deeply opposed to any commercial logging.
In 2021, PNGi reported on the the incursion by Woodbank Pacific into a conservation area set up by local landowners. This was despite landowner warnings to the company, since 2018, not to enter the area.
Since then, Woodbank Pacific has continued to push its logging into forests where it is not welcomed by local people.
In October 2022, journalist Jo Chandler published a story in The Guardian titled Fighting off the Bulldozers.
The story reveals how villagers are still pushing back against logging by Woodbank Pacific, which they say has now encroached into further designated conservation areas and destroyed sacred trees.
One such community is the village of Suburam, which lies between the mountains of the Adelbert Range and the Bismarck Sea.
Locals say that in May 2022, Woodbank Pacific began clearing a road in the forests close to their village. Towering kwila trees were among those felled by the company. The villagers consider these trees to be their ancestors and they are never normally cut down.
The locals also say the company bulldozers levelled a sacred burial site where five-generations of chiefs from three different clans lay in rest.
“When one of the local chiefs heard what had occurred, he says he lay down in his hut grief-stricken, and stayed there for days.”
The forests where Woodbank were operating also form the external boundary of a designated conservation area.
Rather than retaliating with violence, the local Landowners Association delivered a letter to the company advising them to withdraw from the area, which the loggers did shortly afterwards.
But the logging’s impacts have stayed, with local people suffering both mental and physical health problems following the desecration.
According to Chandler, ‘there are questions around what rights Woodbank Pacific has to be operating in the area at all’.
“It appears from log export data that Woodbank’s activities in this region of Madang province rely on colonial era logging concessions called timber rights purchases, or TRPs, that expired decades ago. Created in 1951, these provided a mechanism to purchase timber rights from customary owners and control the harvesting.
The Yikmol landowners delegation is adamant that the company had not been given consent to be working near or within the conservation area or the matmat. “The logging company didn’t ask us landowners,” Lavate says. “We not have an agreement with the logging company that they could come on our land but they came in anyway.”
According to Professor Colin Filer of the Australian National University, who is cited in Chandler’s story, outdated TRPs are still producing more than two-thirds of PNG total log exports, yet these operations ‘are all illegal’.
The Catholic archdiocese in Madang has also been documenting landowner complaints about the negative social and environmental impacts of logging in Kumil TRP. A representative acknowledges though the difficulty of dealing with or addressing the issues due to the fact certain clan leaders and local landowner company executives are strongly supportive of the industry.
More court cases
In 2020, another group of landowners, the Amjah clan of Pepaur Village also took legal action to try and stop Woodbank Pacific from logging on their customary land.
Landowners allege the logging was conducted without their approval or consent. They sought an injunction against the logging company and damages for the illegally harvested timber.
The judge rejected the landowners claim. He found they had failed to specify accurately enough where the actual logging was occurring and that their consent was necessary.
The judge stated that the burden on the landowners to be specific and accurate was particularly high as there were ‘competing claims amongst various factions of landowners and different developers [sic] contesting each other’s right to harvest the logs’.
Woodbank Pacific is also the logging company that was at the centre of a defamation action in 2017.
The case was brought by an officer of the National Forest Service who was aggrieved at the actions of a group of landowners in the Sogeram TRP area. It is claimed that these landowners wrote a letter accusing him and officials from Woodbank Pacific of trying to bribe them.
The landowners state they were offered K1,000 by Woodbank Pacific staff and the National Forest Service officer in return for agreeing to the construction of a bridge over the Sogeram river to give access into their customary land.
The judge found that while the landowners claims were at face value defamatory, as they implied the officer was colluding with the Woodbank officials, was not objective in his managing of the logging project and was engaged in bribery, the allegations were ‘fair comment’ on the conduct of a public official.
The action for defamation was dismissed and the plaintiff ordered to pay the landowners court costs.
Who owns Woodbank Pacific?
Woodbank Pacific Limited appears at first glance to be an independent logging company owned by the Malaysian businessman Tiong Sii Huang. Recent research though by the community advocacy organisation ACT NOW and Jubilee Australia, suggests the company is part of the much larger WTK group.
ACT NOW and Jubilee state that over the past three-years the WTK group has emerged as the biggest logging conglomerate operating in Papua New Guinea, responsible for 14% of all log exports between 2019-2021.
The WTK group of logging companies, according to ACT NOW and Jubilee, also includes Madang Timbers, the company that had a short-lived logging operation in the Kumil TRP back in 2002.