Woodlark Island Logging Scam Part 2: DAL Approval
A foreign owned company, Kulawood Limited, has applied for a permit to clear 30,000 hectares of forest on Woodlark (Muyua) Island under the guise of an agriculture and tree planting project.
PNGi has conducted an investigation into the project documentation, approval process and the companies involved and found the logging permit application to be riddled with errors, inconsistencies and falsehoods.
Part 1 of our report looked in detail at Kulawood’s local project partner, Ebony Woods Investment Limited, and revealed:
- this supposed ‘landowner company’ is owned and controlled by a single individual;
- the company did not exist at the time it was given Department of Agriculture (DAL) approval;
- the company is wrongly named throughout the documentation; and,
- it is a ‘paper company’ with no declared assets or staff.
We now turn attention onto the Department of Agriculture (DAL) and its assessment of the proposed agro-forestry project, the rather flimsy justifications given for its approval and exactly what was recommended.
Before any large-scale conversion of forest to agriculture can be approved by the PNG Forest Authority the project proposal must be vigorously assessed by the Department of Agriculture.
This is supposed to prevent the guise of agriculture being fraudulently used as a cover for the clear-felling of economically, socially and ecologically valuable forests, something that the SABL Commission of Inquiry found was common. The DAL assessment is also meant to protect landowners and rural communities from being deceived by false promises of benefits from long-term agriculture developments that never materialise or which quickly fail.
In the case of the proposed Woodlark Island agro-forestry project, the DAL assessment was conducted at the request of Ebony Woods Investment Limited. The DAL report, comprising 18 pages plus two appendices, was written following a 72-hour visit to Woodlark island by DAL officers in August 2017.
It is a sad reflection on the funding and independence of government departments that the officers’ trip had to be organised and paid for by Ebony Woods Investment’s owner.
The report records, Samson Siguyaru, ‘the investor’, funded “accommodation, meals, transportation (air and land) and all entire arrangement done.”
This does not promote independence or objectivity – as is patently reflected in the report itself. The DAL officers describe the ultimate purpose of their assessment visit as being “to conduct public hearing and to confirm and make official for the issuance of forest clearance authority”. [p4]
The report begins by outlining the remoteness and inaccessibility of Woodlark Island:
The access to the island from Port Moresby is through third level airline (Tropicair) which takes about 1 hour 30 minutes. The flights to and fro is only chattered [sic] as there is no commercial flights. From Alotau to the Woodlark is by boat (dinghy) or ship which takes around two days for ships and a day for the boats. [page 2]
This remoteness and inaccessibility should frame any assessment of the commercial viability of large-scale agriculture on the island, but it is not ultimately seen as detrimental in the report.
The report also makes clear the primary interest is in logging:
The forest is blessed with ebonies and some other trees that can fetch good money if logged and sold out. The only way to do this is for the investor to clear the log [sic] in the name of agriculture. [page 4]
So the ‘investor’ wants to log the forests but to do so must use agriculture as a justification. However, as the report reveals, but ultimately dismisses, there are some major hindrances to agriculture that should make it unviable as a premise for logging.
Soil and climate
The DAL report references an earlier land use survey that evaluated the potential of five cash crops (cocoa, pepper, coconut, rubber and oil palm) against the eight different soil and climatic characteristics of the island. Only one of the 40 possible combinations was found to be highly suitable – but growing coconuts on the beach is unfortunately not a goodjustification for logging the forests!
Of the other thirty-nine assessed combinations thirty-two were found to be definitively not suitable. A further four combinations were found to be only marginally suitable.
The only combinations to come close to a pass mark were growing pepper and coconuts on the limestone plains, assessed as moderately to marginally suitable, and growing rubber on the igneous hills, assessed as moderately suitable.
The report further notes that although pepper could be a suitable crop, “more information is needed on market potential and economics before it can be consider [sic] for large scale production”. [page 8]
Similarly, coconut was moderately to marginally suitable for large scale production on the limestone plains “however a detailed survey is needed to map out the amount of land available”.
So, to summarise. The beaches of Woodlark Island are the only area identified as highly suitable for a cash crop. The limestone plains are ‘moderately to marginally suitable’ for coconuts and pepper and the igneous hills with moderate slopes are deemed ‘moderately suitable’ for rubber, but more information and detailed surveys would be needed to confirm the viability.
Hardly a stunning endorsement of the viability of these cash crops!
Available arable land
The pretext of clearing forests to provide land for agriculture is also thrown into doubt by the admission that “unlike some other parts of PNG, there is abundant arable farm land” [page 4].
This finding is reinforced in the report’s Strengths Weakness Opportunities and Threats analysis [page 9] where “large arable land for commercial farming yet to be developed” is identified as a major strength and opportunity.
The report does not make clear what this arable land could be used for – presumably it is subject to the same soil and climatic constraints that make the rest of the island mainly unsuitable for cash crops, as already discussed?
In any event, the most important question is, if there is already abundant arable land available for agriculture why is there a need to clear the forests to make more land available?
Currently the only salaried employment opportunities on the island come from the mining exploration work being carried out by Geopacific Resources Limited. The company employs around 70 workers.
The DAL report says that currently the mining company spends K30,000 every six months on buying pork and chicken to feed the workers.
If it [the mine] comes to the production phase, more workers will be needed and consumption of these livestock and other fresh produce will be more. This is just a scenario that gives a picture of the opportunity that lies ahead [for agriculture]. To harness and make this scenario come true, proposed agroforestry project is a way forward.
No credible evidence is presented that would justify this highly optimistic conclusion.
There are certainly no facts and figures presented that could possibly support the assertion that logging 30,000 hectares of forest is justified by the prospect of a mine being built on the island.
There is no information on when a mine might be built or its employment numbers if it does go ahead. The exploration company only released a resource and reserve estimate in March 2018 and is still working on a definitive feasibility study. Until that is completed there can be no certainty about the timeline for mining and until funds are raised there is no guarantee a mine will ever be built.
Even if it does go ahead, presumably locals are expecting they will make up the bulk of the workforce and they, of course, are already being fed by the existing agriculture on the island.
It is also problematic to assume there is a correlation between mining and expansion in agriculture. The inflationary effect of mining, in fact has been shown to diminish agriculture.
Finally the report fails to model alternative scenarios where a mine is not operational, to see whether large-scale agriculture is viable.
DAL's market access solution
The remoteness of Woodlark island has already been noted above. There is no commercial air service. It is two days travel by ship to the Provincial centre, Alotau, or 90 minutes flight time on a chartered aircraft to Port Moresby.
The report notes previous attempts to grow cocoa failed, “Cocoa was once grown successfully but due to hinderance to the market excess [sic] resulted in abandonment” [page 4]
Not the most promising location then for large-scale agriculture! Indeed the DAL report lists isolation from the mainland at the top of the weaknesses and threats:
Market has been the major constraint for local farmers in most PNG farming community [sic] and Woodlark is no exception. This problem has been compounded with the isolation of this island community. No efficient and reliable transport services to transport agricultural produce therefore there is slim to nil commercial agriculture activities.
Most cash crops are clearly not suitable to the islands soils and climate and at best three may be ‘marginally to moderately’ suitable; added to this, the island is isolated geographically and there is no reliable or efficient transport services. Even the prospect of a future mine surely doesn’t justify clearing 30,000 hectares of forests, especially when there is already ‘abundant arable farm land’ available?
But no, DAL has the solution – a cooperative society!
According to DAL, a well run and well equipped cooperative can be formed from investors, locals and qualified personnel to provide the necessary ‘logistical support, extension services, value adding, packaging, branding and negotiating’ [page 11).
According to DAL, quantity, quality and consistency will give this cooperative a competitive advantage to source ‘premium markets’ locally, nationally and abroad.
Hans Christen Anderson could not write a better fairy story.
To cap it all off ‘the financiers are from overseas therefore can be easily [sic] source market outside with the help of this connection’.
Apparently having the co-op in place will ‘easily attract’ ‘developing partners’ to provide support and assistance; National Agriculture Institute, DAL, Care International, Oxfam, World Vision are all listed along with ‘satisfying [sic] agents’ like Fairtrade.
On page 12 of the report DAL presents its recommendations; major cash crops should be limited to coconut and pepper, food crops and livestock are recommended and planting acacia for wood chip is ‘an option worth considering’ (although this is the first time it is mentioned in the whole report!).
On the next page, page 13, DAL presents its conclusions. Woodlark we are told ‘has enormous potential for agriculture development’ and ‘out of 130,000ha, 87,000 ha is available for farming but proper agriculture assessment is needed’.
Hang on! 130,000ha, 87,000ha, where have these figures been plucked from? Most reference sources seem to think the total area of the island is about 79,000 hectares.
And, a proper agriculture assessment is needed? Isn’t that what this report was meant to be, an ‘assessment of proposed agro-forest project’? Apparently not, as the author then reiterates a ‘detail agriculture assessment’ is needed.
The report gets even weirder.
Forest Clearance Authority (FCA) was already granted to investor by NDAL and our visit was to make formalise (sic) the issuance of the permit and process. [page 13]
The FCA application was submitted to the PNG Forest Authority in February 2018, the DAL report was written in August 2017, surely it must be a mistake to suggest the FCA had already been granted?
Certificate of Compliance
As well as it assessment report and approval letter DAL has also issued a signed ‘Certificate of Compliance for a Forest Clearance Authority for Large Scale Conversation [sic] of Forest’. Like the other documents, this certificate appears to be flawed.
The Certificate is dated 24 March 2017 and refers to ‘Ebony Woods Limited Integrated Tree Farming and Agriculture Project’. As we have already established, at the date the certificate was signed no company existed with the name Ebony Woods Limited or Ebony Woods Investment Limited.
The errors in the certificate do not end there:
- The name of the logging company involved in the project, Kulawood Limited is incorrectly entered as ‘Kulawood Wood Limited’;
- Kulawood is incorrectly described as a registered forest industry participant (it was not registered until four months later in July 2017);
- The certificate states the project documentation includes a state lease or other land tenure document for the whole area when no such documents can be found;
- It falsely states there is an implementation schedule ‘for the complete agriculture and land use project showing the precise areas and proposed rate of harvesting and successive land use development’ (emphasis added);
- It states the project documentation includes a bank certificate showing the full funding costs are available when no such document has been sighted;
- It falsely states the map shows areas unsuitable for agriculture and all areas important for conservation;
- It falsely states an Environmental Permit has been sighted – the Permit was only issued in November 2017, eight months after the certificate was signed.
With so many errors and false statements the entire validity of the certificate, just like the approval letter and report must be in serious doubt.
The FCA application
Although this PNGi assessment of the DAL report has been critical of the quality of some of the information it contains, the analysis and the conclusion that Woodlark has ‘enormous potential for agriculture development’ it must be emphasised what DAL has actually recommended – food crops, livestock, and cash crops limited to coconut and pepper, while ‘acacia is worth considering’. And all of this is subject to a further ‘proper’ and ‘detailed’ assessment.
So DAL has given its provisional seal of approval to an agriculture project based on food crops, livestock, coconut and pepper as cash crops and, maybe, acacia.
But this is not what is being proposed by Kulawood Limited in its application for an FCA.
What is proposed in the FCA application is completely different – 30,000 hectares of rubber, cocoa, and tree plantations comprising kamarere, labula, terminalia and acacia.
Bizarrely though, in the FCA application, Kulawood says its proposal is supported by DAL and the DAL assessment report is referred to in and is attached to the application.
It must be asked, is Kulawood presuming that the PNG Forest Authority will not bother to read the DAL assessment report or that it won’t be concerned that what the logging company is proposing and what PNGFA is being asked to approve is not what DAL recommended?