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The Rimbunan Hijau Group in the
Forests of Papua New Guinea
Jennifer Gabriel & Michael Wood
Published online: 09 Jul 2015.
To cite this article: Jennifer Gabriel & Michael Wood (2015): The Rimbunan Hijau Group in the
Forests of Papua New Guinea, The Journal of Pacific History, DOI: 10.1080/00223344.2015.1060925
To link to this article: http://dx.doi.org/10.1080/00223344.2015.1060925
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PACIFIC CURRENTS
The Rimbunan Hijau Group in the Forests of Papua New Guinea
JENNIFER GABRIEL AND MICHAEL WOOD
ABSTRACT
Adding to the existing literature on the history of forestry policy and reform in Papua New
Guinea (PNG), this paper focuses on the Malaysian Rimbunan Hijau Group (RH) –the
largest actor in PNG’s forest industry. Rimbunan Hijau’s dominant presence since the
1980s has been accompanied by allegations of illegality, corruption and human rights
abuses. This paper outlines RH’s initial involvement in PNG’s forestry sector and
discusses some of the more controversial aspects of its engagement with concession
acquisition processes and public policy, as well as its responses.
Key words: Rimbunan Hijau, Papua New Guinea, forestry, timber, policy, governance
The Rimbunan Hijau Group (RH) is one of the largest fully integrated timber groups
in Southeast Asia and one of PNG’s largest log harvesting and export companies.
Rimbunan Hijau was established in 1976 in Sibu, a town in Sarawak (Malaysia). It
quickly expanded its control of timber concessions in Sarawak and, by the 1980s,
began diversifying and expanding overseas.
© 2015 The Journal of Pacific History, Inc.
Jennifer Gabriel –College of Arts, Society and Education, Division of Tropical Environments
and Societies, James Cook University. jennifer.gabriel@jcu.edu.au
Michael Wood –College of Arts, Society and Education, Division of Tropical Environments and
Societies, James Cook University. michael.wood@jcu.edu.au
Acknowledgements: The authors wish to thank Colin Filer for sharing his extensive knowledge of
PNG’s forestry sector with them while he was a visiting scholar at the Cairns Institute in 2013.
Gabriel wishes to thank the Cairns Institute and James Cook University for their support of her
ongoing PhD research on the Rimbunan Hijau Group. Wood wants to acknowledge the Australian
Research Council’s grants that have funded his work in the Western Province and James Cook Uni-
versity’s financial support and provision of teaching relief. The authors have benefited from some
excellent comments from reviewers, a number of which appear, only partially transformed, in this
paper.
The Journal of Pacific History, 2015
http://dx.doi.org/10.1080/00223344.2015.1060925
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This paper builds on the existing literature regarding the history of forestry
policy and reform in PNG by examining the activities of RH.
1
After outlining some
of the processes that have contributed to RH’s poor reputation as a corporate
citizen in PNG, we describe the company’s attempts to counter the negative represen-
tations through a reliance on orthodox economic understandings of ‘development’,
‘growth’and ‘global equity’. We examine the responsiveness of RH’s tactics and con-
sider its use of media and public relations campaigns. We highlight the strategies used
by the company to neutralise criticisms about the degree to which its presence causes
harm to people and environments.
2
We also explore RH’s far less controversial diver-
sification into other sectors of the PNG economy. We highlight that by the 2000s, RH
had moved to supplement its often problematic capital accumulation in the forestry
sector with additional forms of investment in PNG’s print media, supermarkets,
tourism and property development. The company’s diversification has not dampened
its role in the ongoing ‘social drama’of PNG’s forest policy.
3
In PNG, and elsewhere, RH has become less reliant on logging and
thereby has partially redefined itself as a productive, as opposed to an exploitative,
part of PNG’s future. These changes are encapsulated in RH’s creation in Port
Moresby of ‘Vision City’, which is its most recent material statement of what it
considers to constitute ‘development’in PNG. But we also highlight how, in the
2000s, RH continued aggressively to pursue its interests in the natural resource
sector by acquiring controversial leases over land and by strongly supporting
amendments to the Forestry Act 1991, which reflected its approach to forestry
regulation in PNG. These strategies, while often very successful, have not resulted
in a ‘politics of resignation’
4
because the company’s attempts to legitimise its cor-
porate power within PNG have largely failed, with the term ‘RH’now being popu-
larly synonymous with the problems of the logging sector, corruption and anti-
Chinese sentiments.
5
Yet despite the contestations of various actors, NGOs and
social movements, the RH Group is still the biggest investor and largest employer
in PNG’sforestrysector.
1
Colin Filer with Nikhil Sekhran, Loggers, Donors and Resource Owners, Policy that Works for Forests
and People 2: Papua New Guinea (Port Moresby and London 1998); Colin Filer with Navroz
K. Dubash and Kilyali Kalit, The Thin Green Line: World Bank leverage and forest policy reform in Papua
New Guinea (Canberra 2000); Colin Hunt (ed.), Production, Privatisation and Preservation in Papua New
Guinea Forestry, Instruments for Sustainable Private Sector Forestry (London 2002).
2
Peter Benson and Stuart Kirsch, ‘Corporate oxymorons’,Dialect Anthropology, 34 (2010), 45–48.
3
Filer and Sekhran, Loggers, Donors and Resource Owners, iii.
4
Peter Benson and Stuart Kirsch, ‘Capitalism and the politics of resignation’,Current Anthropology,
51:4 (2010), 459–86.
5
For a discussion of how, in the 1990s, Chinese were regarded by people directly engaged with
RH’s logging operations, see Michael Wood, ‘“White skins”,“real people”and “Chinese”in
some spatial transformations of the Western Province, PNG’,Oceania, 66:1 (1995), 23–50. For
more recent accounts, see various articles in sections 1 and 2 in Paul D’Arcy, Patrick Matbob
and Linda Crowl (eds), Pacific–Asia Partnerships in Resource Development (Madang 2014).
2JOURNAL OF PACIFIC HISTORY
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The material we cover answers the following questions:
.How has RH been able to dominate and partially transform PNG’s challenging
forestry sector over the last three decades? What strategies did RH pursue?
.Is diversification a long-term strategy to reduce RH’s reliance on logging? Is
diversification a key to the success of the company in PNG?
.Or does evidence exist that RH has sufficient power and influence to continue to
operate in the timber industry despite the political, legal and bureaucratic
obstacles? Is this owing to weak regulatory controls, or has the PNG government
actively supported the company?
RIMBUNAN HIJAU ENTERS PNG: ANOVERVIEW
The decision of the RH Group to invest in PNG was driven by the need to find new
sources of timber to meet the growing demands of the company’sglobalmarkets,
owing to a dwindling supply of harvestable logs from its home state of Sarawak (Malay-
sia). The overseas expansion of the RH Group was fuelled by the Malaysian govern-
ment’s decision to gradually phase out log exports from Peninsular Malaysia as well
as to introduce strict quotas on the export of logs from Sarawak in 1992. Malaysian poli-
ticians, including the prime minister, vigorously promoted the overseas expansion of
Malaysian timber groups during this phase. Malaysia’s primary industries minister
told the Malaysian Timber Market Convention that forest participants were being
encouraged to relocate closer to areas with abundant resources.
6
By 1989, Rimbunan Hijau (PNG) had acquired numerous logging companies
and a number of logging concessions, such as the Wawoi Guavi Timber Company.
7
Rim-
bunan Hijau’s investment in PNG forestry corresponded to a time when Justice Thomas
Barnett was formulating critical reforms of the sector. The forestry sector, dominated by
Southeast Asian logging companies, seemed to be operating beyond effective regulation.
The facts outlining government mismanagement of the forestry sector were recorded in
the 1989 Barnett Inquiry. The inquiry, while not dealing with RH’s investment, outlined
extensive abuses in the forest industry and heavily criticised government administration
and foreign-based timber companies. Summarising his findings, Barnett stated:
It would be fair to say, of some [of the companies], that they are now
roaming the countryside with the self-assurance of robber barons;
bribing politicians and leaders, creating social disharmony and ignor-
ing laws and policy in order to gain access to, rip out, and export the
last remnants of the province’s valuable timber.
8
6
‘Log export ban from Peninsular Malaysia to stay’,New Straits Times, 1 Oct. 1999.
7
Forestry and Conservation Project Independent Review Team, ‘Review of Wawoi Guavi blocks 1,
2 & 3 (consolidated), Western Province’, 2003, http://www.forest-trends.org/documents/files/
doc_1374.pdf (accessed 19 Mar. 2015); Forestry and Conservation Project Independent Review
Team, ‘Review of Vailala TRP blocks 2 & 3, Gulf Province’, 2003, http://www.forest-trends.
org/documents/files/doc_1375.pdf (accessed 19 Mar. 2015).
8
T.E. Barnett, ‘Commission of inquiry into aspects of the forestry industry, interim report no. 4,
timber exploitation in New Ireland Province’, vol. I, Mar. 1989, 85.
THE RIMBUNAN HIJAU GROUP 3
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The Barnett Inquiry found that some logging companies bribed or influenced
customary landowners, provincial premiers, national and provincial ministers and
public servants, in order to gain access to the timber resources. Some landowner com-
panies were abusing the Forestry (Private Dealings) Act 1971 and using timber rights
purchases (TRPs)
9
and local forest areas (LFAs)
10
without safeguarding the interests of
customary landowners. Barnett argued that foreign logging companies were seen to be
controlling vast resources with few benefits for the landowners.
11
The report called for
a reduction in timber harvesting, the reformulation of national forest policy, the
establishment of a nationally integrated forest service, the development of consultation
procedures in the allocation of permits and the formalisation of detailed requirements
for sustained-yield forestry.
The inquiry led to significant changes to the Forestry Act in 1991. The For-
estry (Private Dealings) Act was repealed, and the new Forestry Act 1991 applied. The
state was now required to be an intermediary between resource owners and resource
developers. This was done through the acquisition of rights to the forest resource
through a forest management agreement (FMA) that gives the state the exclusive
right to harvest, grow and manage timber in the area covered by the agreement.
The National Forest Board, not the landowners, selects the company that will
implement the agreement and recommends to the minister that a timber permit be
granted. The state could only secure harvesting rights to forests from customary land-
owners who were members of incorporated land groups (ILGs). While landowner
companies had no specified role in the 1991 Forestry Act, such companies with
timber concessions granted prior to the reforms coming into effect continued to
operate in the industry.
12
The Barnett Inquiry also led to the development of
PNG’s National Forest Policy, which was approved in 1991. The new forestry
policy was directed towards management of the nation’s forest resources as a renew-
able resource –to achieve economic growth, employment and greater Papua New
Guinean participation in industry and increased, viable in-country downstream pro-
cessing of timber products. At the same time, World Bank structural adjustment loans,
provided to the PNG government to cope with the financial difficulties created by the
loss of revenues from the closure of the Bougainville mine, helped make the bank a key
player in both the forest policy reform process and the broader process of economic
policy reform. This influence of the bank on PNG’s forestry sector continued through
the 1990s, owing to the need for additional structural adjustment loans in 1995 and
9
The timber rights purchase (TRP) was introduced by the colonial administration as a mechanism
for the state to gain access to timber within areas of customary ownership.
10
The Forestry (Private Dealings) Act 1971 granted customary owners the right to apply to have
their forests declared a local forest area (LFA) and to sell their timber directly to outsiders,
subject to the approval of the forestry minister. This act bypassed the procedures that had pre-
viously governed the exploitation of timber, where the state acted as the intermediary in timber
sales.
11
Barnett, ‘Commission of inquiry’, 85.
12
Colin Filer, ‘Asian investment in the rural industries of Papua New Guinea: what’s new and
what’s not?’,Pacific Affairs, 86:2 (2013), 310.
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2000, which came with forest policy reform conditions attached. The World Bank’s
engagement during the Chan government (1994–97) and the Morauta government
(1999–2002) appeared to be motivated by ‘the assumption that RH was the principal
enemy of good governance in PNG’.
13
As Rimbunan Hijau gained a foothold over PNG’s forest industry, the
company and its connections to the political elite soon became the subject of constant
criticism. Allegations of corruption involving Malaysian companies in the PNG forestry
sector created a controversy during the 14th Commonwealth Forestry Conference in
Kuala Lumpur in October 1993. The deputy director of PNG’s forestry service,
Chavi Konabe, openly accused two Malaysian timber companies of bribing
members of parliament with cash so they would support an amendment to the Forestry
Act that would allow them to acquire more logging concessions. Konabe said the com-
panies appointed senior government officials and politicians to the boards of directors of
subsidiary companies as a reward for their cooperation. On another occasion, Rimbu-
nan Hijau was said to have chartered planes, paid for hotels and arranged for land-
owners from the Pomio area in East New Britain to lobby the government against
the 1991 Forestry Act.
14
Tim Neville, forest minister from 1992 to 1994, conducted
an investigation into the group’s level of ownership in the country’s forestry conces-
sions.
15
His view of RH as an impediment to good governance was supported by a
Department of Environment and Conservation investigation of complaints that
came up with 22 cases of breaking conditions under RH’s permits, some of which
Neville described as ‘very serious’.
16
RH EXPANSION FROM THE 1990S
After laying down its roots in the PNG forestry sector, the RH Group rapidly diver-
sified, becoming one of the largest private-sector employers in the country.
17
By 1990,
just four years after incorporation in Papua New Guinea, RH’s owners had sharehold-
ing in at least 15 companies in PNG, ranging from logging contracting and sawmilling
to shipping, retail parts and service, and real estate.
18
The National newspaper was
established by the RH Group in the 1990s, becoming the region’s first online
13
Ibid., 307.
14
Forests Monitor, ‘High stakes: the need to control transnational logging companies: a Malaysian
case study’, Aug. 1998, part II, politics, law and the logging industry: Papua New Guinea, http://
www.forestsmonitor.org/en/reports/550066/550073#png (accessed 2 July 2015); part IV,
company profiles: Rimbunan Hijau Group, http://www.forestsmonitor.org/en/reports/
550066/550085 (accessed 3 June 2015).
15
Filer, ‘Asian investment in the rural industries’, 309.
16
Quoted in Helen Vatsikopoulos, ‘PNG: under the spell’,Pacific Journalism Review, 2:1 (1995), 32.
17
ITS Global, ‘The economic contribution of Rimbunan Hijau’s forestry operations in Papua New
Guinea’, report for Rimbunan Hijau (PNG) Group, Sep. 2007, 6.
18
RH PNG,Straits Marine, Niugini International, Sovereign Hill, Seal Manus, Seal, RH Parts
and Services, Central Logging, Central Sawmill, Evergreen Plantation, Frontier Holding, Rivergoi
No. 6, Wawoi Guavi Timber Company, Dynasty Estates, Island Forest Resources, Pacific Logging.
THE RIMBUNAN HIJAU GROUP 5
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paper. According to a full-page newspaper advertorial in the China Daily, Tiong Hiew
King, chairman of the RH Group
established the ‘National’, a neutral, English-language newspaper not
controlled by the Western media, at the invitation of the government
of Papua New Guinea. That venture put him in direct competition
with the established ‘Post Courier’under media tycoon Rupert
Murdoch. The Papuan Government invited Tiong to set up a news-
paper there with an objective to check the influence of powerful
Western media while providing an alternative media channel to
defend and expound the government’s views.
19
In the second quarter of 2007, the audited circulation for the National news-
paper was 29,706 compared with the Post-Courier’s 25,549.
20
The National is now the
leading source of daily news, outstripping its competitor the Post-Courier with an
average of 66,000 against their 30,000.
21
Although popularly referred to as the
Daily Logger for its defence of RH’s logging and forestry operations, some media
critics regard the National as ‘independent and unbiased on other issues’.
22
It has
been a mechanism for the RH Group to defend itself against the NGO community,
resulting in a number of litigation cases filed against its opposition the Post-Courier.
23
In 2010, RH (PNG) was found to be using the courts to threaten, intimidate and
harass the Post-Courier and force it into unnecessary expenses. A defamation suit
filed by RH Group against the Post-Courier in 2006 after it reprinted an article
from the Australian newspaper entitled ‘The rape of PNG forests’was followed by
several other motions, but the judge dismissed them and charged RH with using
the court to ‘prevent and distract’the Post-Courier from reporting on RH’s conduct
in the forest industry.
24
By 2010, RH had expanded into newspaper publishing, aviation, shipping,
printing, trading, office equipment supplies, forest management services, computer
services, restaurants, retail and shopping, and oil palm development. Rimbunan
Hijau owns and operates Tropicair aviation, which operates in both Gulf and
Western provinces. One-third of passengers carried by Tropicair to RH forestry
operations in the Western Province are company employees.
25
Recently
RH has acquired land for the construction of wharves in Lae and Port
19
‘Tan Sri Datuk Tiong Hiew King: the world of Rimbunan Hijau’,China Daily, 17 May 2005.
20
Andy Ng (general manager of the National), pers. comm., 6 May 2015.
21
Ibid.
22
‘Papua New Guinea’, Press Reference, http://www.pressreference.com/No-Sa/Papua-New-
Guinea.html#ixzz2bi2KUKAz (accessed 4 June 2015).
23
For example see ‘PNG: logging company sues newspaper for defamation’, Pacific Media Centre –
Te Amokura, http://www.pmc.aut.ac.nz/pacific-media-watch/png-logging-company-sues-
newspaper-defamation-7724 (accessed 7 Apr. 2015).
24
‘Judge finds logging company threatened newspaper’, ABC News, http://www.abc.net.au/news/
2010-07-13/judge-finds-logging-company-threatened-newspaper/903060 (accessed 17 Apr. 2015).
25
ITS Global, ‘The economic contribution of Rimbunan Hijau’s forestry operations’, 35.
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Moresby.
26
In Port Moresby, RH has completed the construction of the largest shop-
ping centre in the Pacific. Vision City Mega Mall includes 22,500 square metres of
retail space over three storeys. An 18-storey international hotel, executive apartments
and office space are planned for construction next to the shopping mall. The five-star
Raintree Hotel project represents an investment of K380 million and, when com-
plete, will contain 438 rooms, including 66 apartments and a 1,200-capacity ball-
room. The hotel will also offer a gymnasium, lagoon-style swimming pool and
lavish private lounge. The RH chairman said that Raintree Hotel and Suites by
Vision City will set a new standard for accommodation in PNG. Construction
should be completed in 2015. At the ground-breaking ceremony in March 2013,
PNG’s prime minister reassured the group that RH’s investments in PNG ‘are
most welcome and are appreciated by the Government’.
27
The RH Group has recently invested in PNG’s agroforestry and mining
industries and has a small but growing interest in the energy sector.
28
On 31 May
2006, Tiong announced intentions to acquire land in PNG to increase the plantation
land-bank of Rimbunan Sawit Snd Bhd, a publicly listed company majority owned by
the RH Group. ‘We have over RM100 mil cash, not including RM18 mil generated
from the listing exercise, for expansion’, the representative said when asked how the
company would finance its expansion.
29
Since then, it has acquired at least 186,150
hectares of customary land in PNG to develop oil palm plantations (discussed
further below).
30
In November 2011, RH Mining Resources Ltd purchased
10 million shares in Siburan Resources (SBU) to become a substantial shareholder
of a mining company from Western Australia, registered on the Australian Stock
Exchange. RH Mining then entered into a 70/30 joint venture with Siburan
Resources to seek and acquire mineral exploration and mining tenements licences
in PNG.
31
The joint venture company is registered in PNG as Viva No. 39 Ltd.
RH Mining has applied for three large exploration licences targeting gold and
copper opportunities in Morobe, Milne Bay and Central provinces.
32
26
RH subsidiary Dynasty Estates Ltd has a sublease for 94 years over 25 hectares of land in the
National Capital District to develop a wharf and storage facility as part of a multi-purpose
marine facility. John Numapo, ‘Commission of inquiry into the special agriculture and business
lease (SABL): final report’, 24 June 2013, 52.
27
‘8th March 2013: ground breaking ceremony for Raintree Hotel and Suites by Vision City’, Rim-
bunan Hijau (PHG), http://www.rhpng.com.pg/raintree_hotel.html (accessed 17 Apr. 2015).
28
‘Interview: James Lau, managing director, Rimbunan Hijau (PNG) Group’, Business Advantage
PNG, http://www.businessadvantagepng.com/interview-james-lau-managing-director-rimbunan-
hijau-png-group/ (accessed 17 Apr. 2015).
29
‘Rimbunan Sawit aims to raise yield by 15%’, Star Online, http://www.thestar.com.my/Story/?
file=%2F2006%2F6%2F29%2Fbusiness%2F14684942&sec=business (accessed 17 Apr. 2015).
30
Additional special agriculture business leases (SABLs) have been linked to RH.
31
‘Rimbunan Hijau granted two exploration licences’, Papua New Guinea Mine Watch, https://
ramumine.wordpress.com/tag/rimbunan-hijau/page/2/ (accessed 28 May 2015).
32
‘RHG to start with three mining projects’, PNGIndustryNews, http://www.pngindustrynews.
net/storyView.asp?storyID=3202001§ion=Mining§ionsource=s193&aspdsc=yes
THE RIMBUNAN HIJAU GROUP 7
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RESPONSES FROM DONORS,STATE AGENCIES AND NGOS
While developments named above were sometimes controversial, the main source of
contention about RH in PNG concerned its involvement in the forestry sector. A criti-
cal feature of forestry reform in the early 1990s was the encouragement by the World
Bank of environmental non-government organisations (NGOs).
33
During the 1990s
the World Bank sided with the National Alliance of Non-government Organisations
(NANGO),
34
primarily environmental NGOs, in opposing Asian (particularly Malay-
sian) investment in the PNG forest industry. World Bank influence declined during the
Somare government era (2002–11), when revenues from expanding mining and gas
sectors replaced the need for structural loans.
35
During the 1990s, concession rights
to 5.8 million hectares of PNG’s forests were issued to timber companies.
36
By
1998 approximately 10.622 million hectares of forest were under some form of con-
cession as TRP, LFA and FMA areas.
37
As a result of the mounting evidence of attempts by RH and other logging
companies to subvert the new Forestry Act introduced in 1991, the World Bank intro-
duced new financing conditions into its US$90 million governance promotion and
adjustment loan with the government of PNG. These included a moratorium on
new logging projects and a review of some emerging concessions and existing oper-
ations.
38
The bank also provided a loan of US$17 million to fund a forest conservation
project focused on strengthening enforcement capacities of the National Forest
Service and the Department of Conservation.
39
In 1999 the bank expressed concerns
about governance and transparency in the forestry sector, warning the government
that it could have serious implications for further funding.
40
The government,
(accessed 17 Apr. 2015); see also Jennifer Gabriel, The Rise of a Mining Conglomerate from Southeast Asia
(Cairns forthcoming).
33
The Forestry Act 1991 required that NGOs be represented on the National Forest Board and on
the provincial forest management committees in all 19 provinces.
34
ITS Global, ‘Uncivil society: a review of activist NGOs in PNG’, report for Rimbunan Hijau
(PNG) Group, Apr. 2013, 14–15.
35
Ibid.
36
Food and Agriculture Organization of the United Nations, Regional Office for Asia and the
Pacific, ‘Pacific forests and forestry to 2020: subregional report of the second Asia-Pacific forestry
sector outlook study’, 2011, 24, http://www.fao.org/docrep/013/i2007e/i2007e00.pdf (accessed
20 Apr. 2015).
37
PNG Forest Authority, ‘Draft national forest plan’, 2012, 9.
38
F.J. Seymour, N.K. Dubash, J. Brunner, F. Ekoko, C. Filer, H. Kartodihardjo and J. Mugabe, The
Right Conditions: the World Bank, structural adjustment, and forest policy reform (Washington, DC 2000), 48.
39
Friends of the Earth Japan and Global Environmental Forum, ‘Evaluation of social and environ-
mental risks accompanying the procurement of timber from Papua New Guinea’, June 2011, 6,
http://www.fairwood.jp/eng/res/report/report2011_PNG_FoEGEF.pdf (accessed 20 Apr. 2015).
40
Neville Choi, ‘World Bank funded projects in danger …if govt ignores letters’,Independent (PNG),
14 May 1999.
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however, was determined to ‘solve’its fiscal crisis by issuing new timber permits
despite World Bank attempts to prevent it from doing so.
41
Between 2000 and 2004, in compliance with the terms of the World Bank
funding, the government commissioned a series of reviews of the forest industry.
42
The reviews found ‘incompetence at almost every level of the Papua New Guinea
Forest Authority’,
43
with the review team’s confidential report famously declaring:
The overwhelming conclusion …is that the robber barons are now as
active as they ever were. They are not only free to roam, but are in
fact encouraged to do so by persons whose proper role is to exercise
control over them.
44
It added that ‘only a Commission of Inquiry could hope to unearth the entire
picture and unravel the web of deceit’.
45
But the PNG government did not table the
reports in parliament, and the government did not order any remedial action. The
reviews found that proper procedures were not followed in concession allocations
and permit extensions. Those granted to RH sometimes lacked any formal application
or board approval. The Independent Review of Disputed Timber Permits and Permit
Extensions determined that permits granted before the Forestry Act 1991were never
meant to be granted extensions and hence had ‘no legal basis’.
46
These reviews resulted in increasing demands by the World Bank for forestry
reform, interpreted by supporters of the PNG forest industry as part of a long-term plan
to rid the industry of RH. Mr Stanis Bai, then president of Papua New Guinea Forest
Industries Association (PNGFIA), said he was convinced the World Bank was on a ven-
detta against Asian companies and recalled that the head of the forestry unit of the
World Bank in Washington, Jim Douglas, told industry members six years previously
that the bank would oust RH from PNG.
47
The PNGFIA president announced that
the World Bank, acting through the National Forest Service and the office of the
chief secretary, had demanded the immediate suspension of logging at RH’s Vailala
concession in the Gulf Province. He complained that the closure of the operations
would have been the death knell of RH’s K30 million integrated timber processing
project in the Gulf. The PNGFIA claimed the bank’s changes to the timber permit
41
Filer and Sekharan, Loggers, Donors and Resource Owners, 50.
42
The reports of the reviews can be accessed at ‘Forestry reviews’, Papua New Guinea’s Forest
Reports, http://pngforests.com/forestry-review/ (accessed 5 May 2015).
43
Greenpeace International, ‘Partners in crime: Malaysian loggers, timber markets and the politics
of self-interest in Papua New Guinea’, Mar. 2002, 10, http://www.greenpeace.org/australia/
PageFiles/320427/partners-in-crime-malaysian-l.pdf (accessed 27 May 2015).
44
Forestry and Conservation Project Review Team, ‘Report on confidential matters’, Independent
Review of Disputed Timber Permits and Permit Extensions, 2003, 1.
45
Ibid.
46
2003/2004 Review Team on behalf of the government of Papua New Guinea, ‘Observations
regarding the extension of the term of timber permit 1-7 Wavoi [sic] Guavi and the proposed
alterations to the permit terms and conditions’, 6 Apr. 2004, attachment 3, 1.
47
‘Shut down PNG timber industry’,National (PNG), 13 Aug. 2003.
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conditions for Wawoi Guavi would effectively result in the closure of RH’s Panakawa
veneer mill and Kamusie sawmill in the Western Province, comprising the largest
timber processing operations in the country. It was estimated that the closure would
result in the loss of 2,100 jobs, K25 million in government revenue, US$30 million
in export earnings and K10.5 million annually to landowners.
48
While the Asian financial crisis of 1997 dampened demand for logs on a
regional scale, nonetheless, between 1998 and 2005, PNG log exports recovered
to more than double in volume and increased by nearly 80 per cent in US dollar
terms.
49
This occurred mainly as a result of new investment activities by the RH
Group. By 2007, RH and its subsidiary companies had control of 17 forestry con-
cessions with a total area of 1,755,408 hectares out of an estimated 4.9 million hec-
tares of forests under active timber extraction licences.
50
RH had 12 operating
subsidiaries in the forestry sector; ten were licensed to harvest forest concessions,
and two were solely processors.
51
Partly in response to the 1996 National Forest
Plan, which called for downstream processing services, RH established five down-
stream processing operations, all of which are export orientated.
52
Rimbunan
Hijau’s commissioning of PNG’s largest sawmill at Kamusie in Western Province
in 1991 led to sawn timber becoming the fastest-growing timber export from
PNG. Volumes rose from 23,000 cubic metres in 1999 to 42,348 cubic metres in
2002.
53
CRITIQUES AND RH RESPONSES
International media scrutiny of RH intensified in 2001 after an SBS TV Dateline
program ran a sensational documentary alleging human rights abuses by police
48
A study by ITS Global found that spending by RH in Western Province on health, education and
road infrastructure outstripped spending by local-level and provincial governments. ITS Global,
‘The economic importance of the forestry industry to Papua New Guinea’, report for Rimbunan
Hijau (PNG) Group, July 2009, 20–22.
49
ITS Global, ‘The economic contribution of Rimbunan Hijau’s forestry operations’, 11, 13.
50
Ibid., 18. In 2007, RH or its affiliated companies had logging concessions amounting to 2.55
million hectares. International Tropical Timber Organization, ‘Status of tropical forest manage-
ment’, ITTO Technical Series 38 (2011), 223.
51
ITS Global, ‘The economic contribution of Rimbunan Hijau’s forestry operations’, 18. Rimbu-
nan Hijau sells veneer mainly to South Korea; round logs to China, Japan, South Korea and
Taiwan; and sawn timber to Australia, New Zealand, China, Japan and Taiwan.
52
‘Rimbunan Hijau has also established five downstream processing operations. Sawmills are located
in Teredau (Gulf Province), Kamusie (Western Province), Edevu (Central Province) and Sagarai-
Gadaisu (Milne Bay Province). These downstream processing plants are export-orientated and
represent significant investments; the sawmill at Teredau alone represents a 20 million Kina (K)
outlay’. ITS Global, ‘Rimbunan Hijau –about the company’,1,http://forestryanddevelopment.
com/site/wp-content/uploads/fd-RHBackground-3.pdf (accessed 3 June 2015).
53
Greenpeace International, ‘The untouchables’, 17.
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who were said to be acting on behalf of RH.
54
Rimbunan Hijau’s public relations con-
sultant, ITS Global, claimed that the allegations were subsequently investigated but
could not be substantiated.
55
In 2004, SBS broadcast another documentary, featuring
Annie Kajir, then CEO of the Environmental Law Centre in Port Moresby. The
documentary alleged widespread corruption and violence, as well as a lack of land-
owner consent in RH concessions.
56
Rimbunan Hijau has described allegations
levelled at the company by Greenpeace and other NGOs as an ‘“insult”to the integ-
rity and independence of PNG’.
57
The election of Michael Somare as prime minister of PNG in August 2002
resulted in export-driven policies and intensified existing tensions with the World
Bank. During a two-day visit in 2003 by the Malaysian prime minister, Somare
said he hoped Malaysian companies would play a growing role in the forestry
sector, adding that he would not allow Australia and other foreign donors to use
aid to impose further restrictions on foreign logging.
58
Following a breakdown in
talks between the government and the World Bank in 2003, the PNGFA resumed
its efforts to get new forest projects on stream, with ten projects identified as having
a relatively favourable assessment by the independent reviews. Prior to these
reviews, the board of the PNGFA required new log export projects to produce at
least 70,000 cubic metres per annum. Additional conditions stipulated (a) that
fragile forests were to be excluded from the FMA, (b) that ten per cent of the area
was to be set aside for conservation, and (c) that a 40-year cutting cycle was to be
implemented. Of the ten projects chosen, four had the potential of becoming log
export projects that could meet the stipulated conditions, and the other six projects
could only be viable if one or more of the above conditions was relaxed.
59
Growing
indications suggested that the PNGFA was prioritising ten new projects that consti-
tuted the last remaining key high-volume forest resources under state control.
60
In the lead-up to the seventh ordinary meeting of the parties to the Conven-
tion for Biological Diversity in Malaysia (7–9 February 2004), Greenpeace released its
report ‘Chains of destruction leading from the world’s remaining ancient forests to
the Japanese market’.
61
Papua New Guinea’s forestry minister took out full-page
advertisements in both the Post-Courier and the National newspapers, denouncing
54
‘Papua New Guinea: wilderness laid waste by corruption’,Dateline, television program, SBS TV
(Australia), 2 May 2001.
55
ITS Global, ‘Masalai i Tokaut and Rimbunan Hijau Watch: a political and deceptive campaign
against Rimbunan Hijau’, report for Rimbunan Hijau (PNG) Group, July 2006, 11.
56
‘PNG: jungle justice’,Dateline, television program, SBS TV (Australia), 3 Nov. 2004.
57
Alex Rheeney, ‘RH slams allegations’,Post-Courier (PNG), 9 Feb. 2004.
58
‘They’re our forests, says PNG’,Sydney Morning Herald, 27 Oct. 2003.
59
Overseas Development Institute, ‘Issues and opportunities for the forest sector in Papua New
Guinea’, Papua New Guinea Forest Studies 3 (2007), 8.
60
Ibid.
61
Greenpeace International, ‘Chains of destruction leading from the world’s remaining ancient
forests to the Japanese market’, Apr. 2002, http://www.greenpeace.org/international/Global/
international/planet-2/report/2002/3/chains-of-destruction-leading.pdf (accessed 20 Apr. 2015).
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Greenpeace’s claims that RH was logging without permits and declaring that ‘all
logging operations in the country are legal’.
62
The forestry minister called the
claims ‘libellous and malicious’and defended the RH Group as ‘one of the most com-
mitted logging companies in PNG’.
63
Greenpeace continued to claim in 2004 that RH was operating illegally, was
protected by political patronage and was destroying the environment.
64
In 2005,
Greenpeace declared that most logging in PNG was illegal and labelled RH as the
leading illegal logger.
65
In 2006, RH began a counterattack on the NGO and commis-
sioned a number of reports by ITS Global to challenge the allegations.
66
In its defence
of the company, the public relations firm described the attacks against RH as part of a
global campaign against logging and complained that the company was being made a
proxy for the timber industry. It insisted that most of the allegations against RH were
found to be ‘false, unsubstantiated, severely exaggerated or misrepresented’.
67
ITS
Global staunchly promoted forestry exploitation in PNG:
There is every reason for PNG to fully exploit the sustainable use of
its forestry endowment. This will provide forestry companies, such as
Rimbunan Hijau, with the strongest incentives to increase economic
activity and formal employment in the remote regions of the country.
And in doing so, the forestry companies will also provide such areas
with much needed infrastructure and social services.
68
Despite its slick counter-campaign, RH has been unable to shed its ‘untouch-
able’reputation and has remained the subject of public criticism and legal disputes. In
defence of its client, ITS Global has stated that
many of the allegations of improper or corrupt conduct by RH in fact
relate to governance or regulatory problems in PNG, rather than
62
‘PNG minister defends Malaysian logging firm’, ABC News, http://www.abc.net.au/news/
2004-02-23/png-minister-defends-malaysian-logging-firm/140352 (accessed 27 Apr. 2015).
63
Ibid.
64
Greenpeace International, ‘The untouchables’,2.
65
Greenpeace UK, ‘Partners in crime: the UK timber trade, Chinese sweatshops and Malaysian
robber barons in Papua New Guinea’s rainforests’, Oct. 2005, 2, http://www.greenpeace.org.
uk/MultimediaFiles/Live/FullReport/7251.pdf (accessed 27 Apr. 2015).
66
ITS Global stated that Greenpeace was not using the term ‘legal’in an ordinary sense: ‘It has
expanded it to mean that no transaction is legal unless, at the time of the transaction, all laws
and regulations and international treaties have been properly implemented by government, includ-
ing labour rights, indigenous peoples’rights, and business’payment of all taxes and fees. By this test,
a large amount of activity at any one time in the industrialized world would be “illegal”.In
developing countries where governance is notoriously fickle, most economic activity would by
this definition be “illegal”’. ITS Global, ‘Whatever it takes: Greenpeace’s anti-forestry campaign
in Papua New Guinea’, report for Rimbunan Hijau (PNG) Group, July 2006, 8.
67
Ibid., 7.
68
ITS Global, ‘The economic contribution of Rimbunan Hijau’s forestry operations’,7.
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actions by the company. Many of the governance problems are
beyond the control, let alone the scope of accountability, of the
company.
69
Greenpeace called on the PNG government to stop RH’s logging operations
in the Gulf Province and began a targeted campaign against Rimbunan Hijau in
2004.
70
In 2008, Greenpeace deployed its largest ship, the Esperanza, to blockade a
shipment of logs from the Gulf Province bound for China. Rimbunan Hijau
accused Greenpeace of a campaign blunder, pointing out that the ship and the
logging operation belonged to Turama Forest Industries: ‘The concession and
vessel have no relationship with the company’.
71
Greenpeace asserted that the inde-
pendent export monitor SGS –a multinational company that provides inspection,
verification, testing and certification services –had listed Turama Forest Industries
as a Rimbunan Hijau company.
72
In 2006, Greenpeace amplified its campaign against RH, distributing a
volley of reports to the international community.
73
The report ‘Sharing the
blame’alleged that around 90 per cent of logging was in violation of PNG’s con-
stitution and forestry law, with most of the illegal logs being shipped by RH, and
others, to China. Greenpeace accompanied the report launch with a high-level
campaign in China to oppose the importation of tropical timber based on claims
of illegality. Greenpeace also demanded that the Australian government introduce
laws to stop the importation of ‘illegal timber’from PNG. The Australian
69
ITS Global, ‘Masalai i Tokaut and Rimbunan Hijau Watch’, 13.
70
‘Campaign history in PNG’, Greenpeace Australia Pacific, http://www.greenpeace.org/
australia/en/what-we-do/forests/Forest-destruction/Papua-New-Guinea/Campaign-history-in-
PNG/ (accessed 27 May 2015).
71
‘Greenpeace attempts to halt logging ship’, IOL, http://www.iol.co.za/scitech/technology/
greenpeace-attempts-to-halt-logging-ship-1.415079#.VT3R_8lZXms (accessed 27 May 2015).
72
‘Logging giant denies Greenpeace’s illegal harvest claims’, ABC News, http://www.abc.net.au/
news/2008-09-04/logging-giant-denies-greenpeaces-illegal-harvest/499308 (accessed 27 Apr.
2015). In 2011, SGS first recorded log exports from the Turama concession as being exports by
the RH subsidiary Niugini International Corporation (NIC). Colin Filer, pers. comm., Feb.
2015. It may be that NIC was operating as a subcontractor in Turama prior to 2011.
73
Greenpeace International, ‘Chains of destruction’; C.M. Roberts, L. Mason, J.P. Hawkins,
E. Masden, G. Rowlands, J. Storey and A. Swift on behalf of Greenpeace International,
‘Roadmap to recovery: a global network of marine reserves’, 1 June 2006, http://www.
greenpeace.org/international/Global/international/planet-2/report/2008/5/roadmap-to-
recovery.pdf (accessed 28 Apr. 2015); Greenpeace International and Greenpeace China, ‘Sharing
the blame: global consumption and China’s role in ancient forest destruction’, 28 Mar. 2006,
http://www.greenpeace.org/international/Global/international/planet-2/report/2006/3/
sharing-the-blame.pdf (accessed 28 Apr. 2015); Greenpeace International, ‘Rimbunan Hijau
Group: thirty years of forest plunder’, May 2006, http://www.greenpeace.org/international/
Global/international/planet-2/report/2006/6/RH-30years-forest-plunder.pdf (accessed 28 Apr.
2015).
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Conservation Foundation (ACF) joined the campaign against RH in 2006,
74
uniting with the Human Rights Council of Australia and three PNG groups –
Environmental Law Centre, PNG Eco-Forestry Forum and the Center for
Environmental Law and Community Rights (CELCOR) –to lobby the ANZ
Bank to stop funding RH in PNG.
75
The 2006 ACF and CELCOR report entitled
‘Bulldozing progress’linked RH to arms and drugs smuggling, drunkenness and
domestic violence –and the spread of AIDS. The PNGFA complained that the
NGO campaigns gave the general perception that all forest products entering over-
seas markets from PNG come from illegal sources. Dike Karin, acting managing
director, insisted that the PNGFA ensured compliance of the conditions set out
in the permits, timber authority and licences: ‘We are of the view that there is
no illegal logging in PNG. We have one of the toughest legal framework and
sound policies to sustainably manage the nations’forest resources’.
76
Rimbunan Hijau criticised the ‘Bulldozing progress’report as ‘almost
breathtaking in its elitism and misinformation and its disregard for the people of
PNG …there is no exploitation and to suggest there is, is offensive to the
company and all our employees’.
77
In 2006 the International Tropical Timber
Organization (ITTO) refuted the ongoing claims of illegal logging in PNG’s
timber industry, citing the report of the independent auditor SGS, which concluded
that a 12-year log-tracking system proved that all logs exported from PNG were
legal and easily traced to the harvest area. The Australian government subsequently
rejected calls by Greenpeace and the World Wide Fund for Nature to ban PNG
forest products on the grounds they involved illegal logging.
78
Yet on 28 November
2012, the Australian Illegal Logging Prohibition Act 2012 was passed through par-
liament (and came into effect in November 2014).
79
To address concerns over the
illegality of its timber, RH subsidiary Saban Enterprises
80
became the first forestry
company in Papua New Guinea to receive independent certification (by SGS).
74
Australian Conservation Foundation and the Center for Environmental Law and Community
Rights, ‘Bulldozing progress: human rights abuses and corruption in Papua New Guinea’s large
scale logging industry’, 2006, https://www.acfonline.org.au/sites/default/files/resources/
bulldozing_progress_full_report.pdf (accessed 28 Apr. 2015).
75
‘Action alert: stop ANZ Bank funding of illegal logging in Papua New Guinea’, Rainforest Portal,
http://www.rainforestportal.org/shared/alerts/send.aspx?id=png_anz_illegal_logging (accessed
27 May 2015).
76
‘Forest industry big money earner’,National, 11 Oct. 2006.
77
Michael Casey, ‘Papua New Guinea: environmentalists say logging companies in Papua New
Guinea committing rights abuses’, CorpWatch, http://www.corpwatch.org/article.php?id=
13991 (accessed 28 Apr. 2015).
78
‘Australia rejects call to ban PNG forest products’,National, 3 Nov. 2006.
79
The due diligence requirements stipulate that an importer must record information relating to the
product and its area of harvest, including any legality frameworks that apply, a copy of the harvest-
ing licence and evidence that any necessary payments or taxes have been made at the point of
harvest. Illegal Logging Prohibition Act 2012 (Australia), sec. 14.
80
Saban Enterprises Limited is a timber-processing business in the PNG province of Milne Bay.
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‘RH initiated development of this standard’, said James Lau, managing director of
Rimbunan Hijau (PNG). Lau said the forest industry had been unfairly attacked
by those who opposed commercial forestry in PNG. ‘The claims that most forestry
in PNG and most of RH’s activity are illegal are false’, he said. ‘RH can easily
demonstrate that its logging is legal. We look forward to applying the SGS
TLTV
81
to our other forestry operations’. Lau added: ‘Australia and New
Zealand have expressed interest in developing requirements that imported timber
products be verified as legal. RH will apply these systems to its exports as they
are developed’.
82
Rimbunan Hijau continued to maintain that all its timber permits were
legally issued and extended, and insisted that all allegations of illegality were frivolous,
vexatious and baseless. The company claimed that such a large timber industry, which
contributed close to five per cent of the GDP, could not be deemed illegal owing to
some legislative oversight (if any occurred, which was denied).
83
In June 2009,
causing outrage among environmental groups in Asia Pacific, RH’s founding chair-
man, Tiong Hiew King, was awarded an honorary knighthood ‘for services to com-
merce, the community and charitable organisations in Papua New Guinea’.
84
The
award signified the strength of the relationship between the PNG government and
RH, with a spokesperson for Buckingham Palace confirming that the recommen-
dation came from the highest levels of government: ‘The prime minister of Papua
New Guinea, supported by the governor general, would have made the recommen-
dation to the queen. It would then have been cleared by the Foreign Office and
the Malaysian government’.
85
STATE–CORPORATE COOPERATION WINDS BACK REFORM
Reinforcing the ongoing indications of forest policy failure, the government, with the
support of the forest industry, introduced a series of amendments to the Forestry Act
1991 that raised further concerns for those interested in the legitimacy of the PNG
forest sector. These amendments in 2005 removed the requirement for consultations
with landowners before the National Forest Board could make its recommendation to
grant the timber permit to the developer.
86
The Forestry (Amendment) Act 2005 was
81
Timber legality and traceability verification. See ‘Timber traceability and legality’, SGS, http://
www.sgs.com/Public-Sector/Monitoring-Services/Timber-Traceability-and-Legality.aspx
(accessed 28 Apr. 2015).
82
‘Legality certification a first for PNG business’, Timberbiz, http://www.timberbiz.com.au/
legality-certification-a-first-for-png-business/ (accessed 28 Apr. 2015).
83
‘RH refutes illegal logging claims’,Post-Courier, 5 May 2006.
84
‘Forest campaigners deplore knighthood for Asian logging magnate’, The Guardian, http://
www.theguardian.com/environment/2009/jul/01/knighthood-protest-tiong-hiew-king (accessed
27 May 2015).
85
Ibid.
86
Forestry (Amendment) Act 2005 (Papua New Guinea), sec. 15.
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described as a form of ‘institutional corruption’by Ombudsmen Commission counsel
Nemo Yal, who criticised PNG leaders for using the parliament, and other democratic
constitutional institutions, to protect themselves. With serious allegations against
foreign developers, he said ‘the public is left to wonder whose interest their govern-
ment and parliament are servicing’.
87
A further part of the 2005 amendment dealt with the matter of permits issued
prior to the 1991 Forestry Act –an issue that was particularly crucial to the World
Bank and other reformers, especially as it related to the Wawoi Guavi case. While
the act was unclear whether these saved permits could be extended in their pre-
1991 form, the review team had argued that such renewals were illegal.
88
Many of
these older permits involved RH’s concessions –most notably in Wawoi Guavi
(Western Province) and Vailala (Gulf Province). The 2005 amendment stated that
such timber permits could be extended, subject to written indications of the permit
holders’‘social acceptability’among customary owners in the project, and other con-
ditions such as lodging a performance bond.
89
Another 2005 amendment indicated
that any timber permits saved under previous versions of the 1991 Forestry Act
‘were deemed to be extended’.
90
This was an attempt to fully and retrospectively lega-
lise any extension of any saved permit.
91
In RH’s view, these amendments should have
ended all concerns about legality issues.
92
Yet further amendments to the Forestry Act 1991 in the form of the Forestry
(Timber Permits Validation) Act 2007 were necessary to further legalise decisions
made in PNG’s forestry sector. The 2007 amendments meant that no timber permit
granted under the 1991 Forestry Act could be invalidated owing to the absence, expira-
tion or defect in a national forest plan or a national forest inventory. At the time of these
amendments, two cases before the PNG courts were challenging the allocation of the
East Awin and Kamula Doso concessions to RH on the grounds that neither proposed
concession existed in the National Forest Plan, and hence their development and allo-
cation were illegal. The environmental group Eco-Forestry Forum described these
amendments as a deliberate attempt to circumvent the law
93
and heightened suspicions
that political leaders were using the parliament to benefit foreign investors. Transpar-
ency International (PNG) viewed the amendments as enabling the logging industry to
87
‘Graft legalised’,Post-Courier, 18 June 2007.
88
2003/2004 Review Team, ‘Observations regarding the extension of the term of timber permit
1-7’, attachment 3.
89
Forestry (Amendment) Act 2005, sec. 31.
90
Ibid.
91
The complexities of permit extensions in the Wawoi Guavi case are further discussed in Michael
Wood ‘Time and transitional relief in negotiating permits in a PNG logging concession, 1992–
2012’,Pacific Studies, 37:1 (2014), 1–28.
92
‘RH refutes illegal logging claims’,Post-Courier, 5 May 2006.
93
‘Speaker urged to not certify timber law’, Illegal Logging Portal, http://www.illegal-logging.info/
content/speaker-urged-not-certify-timber-law (accessed 28 May 2015).
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pursue lucrative logging for export unabated.
94
Yet in the case of the Kamula Doso
concession, no logging took place. Despite RH’s arguments that this concession was
fully legal,
95
by July 2010, RH’s subsidiary, the Wawoi Guavi Timber Company,
and the PNGFA agreed to a consent order that the Kamula Doso FMA was not
valid. This meant that the state, and hence RH, had never acquired a legally enforce-
able interest in the timber of Kamula Doso.
96
SPECIAL AGRICULTURAL BUSINESS LEASES
While RH’s attempts to legalise prior decisions concerning resource acquisitions were
not always successful, they also developed an interest in other forms of resource acqui-
sition facilitated by PNG laws. The first attempt by the RH Group to engage in agri-
culture in PNG occurred in 1988, when Goodwood, a subsidiary of RH, proposed a
clear-fell and coconut-sap project in Collinwood Bay, securing government approval
without resource owner consent. The resource owners successfully petitioned forests
minister Tim Neville, who shelved the project until ‘proper processes’were followed.
97
Clear-felling forests for agricultural projects became widespread after the PNG govern-
ment, through national forestry guidelines in 2009, argued for 100 per cent processing
of logs prior to export. The issuing of licences to clear-fell was enabled through the
special agricultural business lease (SABL) mechanism, which resulted in a land grab
that alienated between 5.5 and 5.6 million hectares of PNG’s land (nearly 12 per
cent) by 2011, sparking a commission of inquiry (COI).
98
The COI found that most
of the subleases underpinning the development of SABLs, which covered around 16
94
Michael Avosa and Alfred Rungol on behalf of Transparency International Papua New Guinea,
‘Forest governance integrity baseline report: Papua New Guinea’, 2011, 7, http://archives.
pireport.org/archive/2011/August/FGI_report_PNG.pdf (accessed 29 Apr. 2015).
95
‘Rimbunan Hijau Group is good for PNG’, PNGscape Komuniti Board, http://www.network54.
com/Forum/186328/thread/1151906304/last-1151906601/Rimbunan+Hijau+Group+is
+good+for+PNG (accessed 29 Apr. 2015).
96
These details are further discussed in Mike Wood, ‘Signatures, group definition and an invalid
contract in legal responses to an extension of a logging concession in the Western Province,
PNG’, paper presented at the workshop Legal Ground: Land and Law in Contemporary
Taiwan and the Pacific, Taipei, Institute of Ethnology, Academia Sinica, 12 Sep. 2013. Forestry
concession acquisition politics in PNG involves strategies of accumulation by what appears to be
legal (or extra-legal) dispossession, but as the Kamula Doso case indicates, it is sometimes difficult
to harmonise asserted legality and state-regulated dispossession by FMAs into a productive unity.
97
Adelbert Gangai (on behalf of the Oro Community Environmental Action Network and Colling-
wood Bay Conservation and Development Association) to RSPO Secretariat, 19 Apr. 2013, annex-
ure 3, Forest Peoples Programme, http://www.forestpeoples.org/sites/fpp/files/news/2013/04/
OCEAN%20Grievance%20to%20RSPO%20-%20KLK_v031April2013.pdf (accessed 29 Apr.
2015).
98
Colin Filer, ‘Why green grabs don’t work in Papua New Guinea’,Journal of Peasant Studies, 39:2
(2012), 599–617.
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per cent of PNG’s commercially accessible forests, were used by logging companies to
gain access to new sources of timber.
99
The legislative and bureaucratic mechanisms underpinning the increased
ease in acquiring SABLs (otherwise known as a lease-leaseback scheme)
100
enabled
logging and other companies to undertake both logging and agricultural oper-
ations.
101
After forest clearance authorities (FCAs) became easier to obtain, log
exports surged to record highs.
102
According to analysis by Paul Barker, director of
the Institute of National Affairs, over one-third of Papua New Guinea’s logging
exports in 2012 came from SABLs.
103
A total of more than 1.5 million cubic
metres of raw logs, with a combined value of roughly US$150 million, was exported
from areas covered by FCAs in the five years from 2007 to 2011.
104
During December
2012, the Rimbunan Hijau (PNG) Ltd group of companies dominated log exports
with 20.2 per cent of total volume; in contrast, no other logging company exceeded
more than 8.9 per cent of log exports.
105
A recent study found that out of 26 oil palm plantation projects covering almost
a million hectares, based on land suitability, developer experience, and capacity and
socio-legal constraints,
106
only five of these projects (covering 20 per cent of the total
99
Sam Lawson, ‘Illegal logging in Papua New Guinea’, Chatham House, Energy, Environment and
Resources Programme Paper 4 (2014), 24.
100
The mechanism that enabled the abuse of the SABL policy is the forest clearance authority. In
2007, sections 90a and 90b of the Forestry Act were amended to do away with the requirement of
calling for public tenders from registered logging companies to salvage logs from an area to be
cleared for agriculture projects. This allowed logging companies to both apply for an FCA and
undertake the logging and agricultural operation. Paul Winn on behalf of Greenpeace Australia
Pacific, ‘Up for grabs: millions of hectares of customary land in PNG stolen for logging’, Aug.
2012, 4, http://www.greenpeace.org/australia/PageFiles/441577/Up_For_Grabs.pdf (accessed
30 Apr. 2015). After FCAs became easier to obtain, log exports surged.
101
Ibid., 3.
102
Colin Filer, ‘The commission of inquiry into special agricultural and business leases in Papua
New Guinea: fresh details for the portrait of a process of expropriation’, paper presented at the
International Conference on Global Land Grabbing II, Cornell University, 18 Oct. 2012, 19.
103
‘Up to one-third of Papua New Guinea log exports may not be authorised by landowners, says
INA’, Business Advantage PNG, http://www.businessadvantagepng.com/up-to-one-third-of-
papua-new-guinea-log-exports-may-not-be-authorised-by-landowners-says-ina/ (accessed 28 May
2015).
104
Filer, ‘The commission of inquiry’,4.
105
SGS, ‘Log export statistics and export monitoring highlights’, Dec. 2012, exec. summ., 1. Total
exports of other logging companies: Brilliant Investment Ltd with 6.2%, Viva Success Ltd with 6%,
Vanimo Jaya Ltd with 8.9%, Westenders Ltd with 6.6%.
106
Of 42 SABLs examined by the COI, only four were found to have proper landowner consent
and viable agricultural projects, whereas the remainder (more than 90%) were obtained through
fraudulent or corrupt means. Henry Scheyvens and Federico Lopez-Casero on behalf of Institute
for Global Environmental Strategies, ‘Managing forests as a renewable asset for present and future
generations: verifying legal compliance in forestry in Papua New Guinea’, IEGS Policy Report 1
(2013), 45.
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area studied) were actually likely to proceed in the short term.
107
Rimbunan Hijau sub-
sidiaries involved in SABLs for oil palm development include Sovereign Hill Ltd, with a
sublease for 70 years over 126,570 hectares in Western Province, and Gilford Ltd, with
a sublease of 55,400 hectares in East New Britain and 41,230 hectares in West New
Britain. Rimbunan Hijau also has a sublease over 11,800 hectares in the Gulf Province
for 99 years. The most controversial of these SABLS is the Sigite Mukus Integrated
Rural Development Project in Pomio, East New Britain. In October 2011, the
Pomio SABL became the centre of international public outrage and condemnation fol-
lowing allegations of police brutality and corporate complicity.
108
Registered as an
agro-forestry project, the two components of the project involve (1) construction of a
178-kilometre road connecting the Mukus River to Sigite (central/inland Pomio)
and (2) land clearance for an oil palm plantation under an FCA.
109
According to the
proposal, selective logging is to be followed by land clearance for oil palm cultivation.
Revenue from log exports set aside as an infrastructure fund (K2 per cubic metre) will be
used in funding the completion of the road.
110
Approximately 5,008,150 cubic metres
of timber extracted from a gross area of 286,000 hectares of forests (over 20 years) is
required to recover costs for the road. Sales from round logs and finished timber pro-
ducts in the first five years will be used to fund the establishment of the oil palm projects
and fund the completion of the road.
While this is just one example of RH’s use of SABLs, evidence suggests that
they were significant beneficiaries of the SABL process. In his final report tabled in
parliament, John Numapo, chief commissioner of the COI into SABLS, stated
(without indicating the relevant SABLs): ‘Our investigations reveal that over
50%
111
of the so-called developers’[sic] currently holding subleases on SABLs are
connected in one way or another to Rimbunan Hijau (RH) Limited, which by far
is the biggest logging operator in PNG’.
112
The chief commissioner said that ‘with
corrupt government officials from implementing agencies riding shotgun for them,
opportunistic loggers masquerading as agro-forestry developers are prowling our
107
P.N. Nelson, J. Gabriel, C. Filer, M. Banabas, J.A. Sayer, G.N. Curry, G. Koczberski and
O. Venter, ‘Oil palm and deforestation in Papua New Guinea’,Conservation Letters, 7:3 (2013), 188.
108
For further details see Jennifer Gabriel, ‘Evergreen and REDD+ in the forests of Oceania’,in
Joshua A. Bell, Paige West and Colin Filer (eds), Tropical Forests of Oceania: anthropological perspectives
(Canberra forthcoming). Also see ‘Andrew Lattas reports on Pomio’, Nineteen Years and Counting
in Papua New Guinea, http://nancysullivan.typepad.com/my_weblog/2012/04/andrew-lattas-
reports-on-pomio.html (accessed 30 Apr. 2015); ‘Loggers linked to protest crackdown’,The World
Today, radio program, ABC Radio (Australia), 11 Oct. 2011. News reports also appear in the
Post-Courier throughout the period 2–23 Oct. 2011.
109
Memalo Holdings Ltd and Sumas Timber and Development International, ‘An environment
inception report for Sigite-Mukus Rural Development Project’, 21 July 2006, 2.
110
Ibid.
111
We have identified only 16 SABLs with subleases directly linked to RH companies. These 16
SABLs comprise four projects, but at the time of writing, only one (Sigite Mukus) appears to be
a priority for RH.
112
Numapo, ‘Commission of inquiry’, 242.
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countryside, scoping opportunities to take advantage of gullible landowners and des-
perate for cash clan leaders’.
113
This echoes Justice Barnett’s claim (cited above) that
in the late 1980s some logging companies were ‘roaming the countryside with the self-
assurance of robber barons’.
114
Some of the strategies of RH that we have outlined
here reinforce Commissioner Numapo’s emphasis on the continuity, rather than sig-
nificant reform, of practices linked to securing control of timber resources.
CONCLUSION
After 30 years of industrial logging in PNG by RH, the company is increasingly diver-
sifying into other sectors. The RH Group’s strategy in PNG’s forestry sector has
involved increasing investment in downstream processing facilities. This has been
crucial to the reputation and influence of the company within the government. The
government has increasingly promoted downstream processing by providing exemp-
tion from export taxes to downstream processors. The revised National Forestry
Development Guidelines (2010) contain the requirement that all new concessions
will be for 100 per cent downstream processing, with the ‘Draft national forest
plan’(NFP) forecasting an 80 per cent increase in downstream processing by
2030.
115
Another government diversification strategy within the forest industry
emphasises plantations. A related strand of government thinking, reflected in the
draft NFP (2013), asserts that PNG’s timber is running out: ‘Much of the accessible
forests areas have been logged out or cleared for agriculture projects and other
land uses. Only minimal accessible forest areas are remaining while much of it is in
the hinterland where there is limited access’.
116
In response to this threat, the PNG ‘Medium term development plan 2011–
2015’seeks to establish 150,000 hectares of forest plantations by 2030 (up from
62,000), an increase in processed exports and a sustainable forest industry.
117
Little
evidence exists that logging companies have invested in standalone timber plantations.
More interest has been expressed in developing oil palm plantations. From RH’s per-
spective, timber is not in short supply, as the vast forest reserves of the Western
Province are still available as potential concessions.
Rimbunan Hijau has significantly diversified its activities beyond the forestry
sector to include supermarkets, media, aviation, tourism, hotels, travel, construction
and manufacturing. Supporting this diversification is the parent company’s(RHMalay-
sia’s) access to diversified global markets, integrated downstream industry capacities,
and plantation experience in Malaysia and New Zealand. Rimbunan Hijau (PNG)’s
diversification provides a long-term basis for investment beyond forestry, but it also
113
Ibid.
114
Barnett, ‘Commission of inquiry’, 84.
115
PNG Forest Authority, ‘Draft national forest plan’, 16.
116
Ibid., 1.
117
Department of National Planning and Monitoring, ‘Papua New Guinea medium term
development plan 2011–2015’, Oct. 2010, 73.
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increases its diffuse bargaining power with the state to secure future timber resources
and maintain its dominant position in PNG’s forestry sector. Our evidence concerning
a number of forestry-related court cases mentioned in this paper indicates that RH has
quite effectively used ambiguities and gaps in the law, regulations and policy frameworks
to secure forest resources.
118
This paper presents some evidence, concerning RH’soil
palm projects, that this same strategy of exploiting weak regulatory frameworks has
been adopted in the sectors in which it has recently diversified.
Since the 1980s, critics of PNG’s forestry sector have held the state, the pol-
itical elite and the public sector accountable for not reducing the influence of foreign
corporations, particularly the main actor, RH (PNG). PNG’s educated middle class
and increasingly also some of the rural landowners have often articulated political
grievances concerning PNG’s forestry administration through the campaigns of inter-
national environmental groups and local NGOs. As we have shown, RH uses litiga-
tion as a strategy to overcome opponents, but not always successfully (as indicated
by the Kamula Doso case). Rimbunan Hijau has launched international public
relation campaigns via consultants, such as ITS Global, to respond to allegations
made by NGOs such as Greenpeace. It has also used national media to shape its repu-
tation and structure debates over forestry issues. In these counter-narratives, logging is
framed as development and as a form of poverty alleviation. Forestry industry advo-
cates want environmental groups to align their objectives towards a specific under-
standing of national and local aspirations rather than global environmentalism.
119
Another feature of RH’s power and influence is its ability to maintain long-
term relationships with landowners primarily through money, services and infrastruc-
ture that would not otherwise be available in many rural areas of PNG. Rimbunan
Hijau is often successful in mobilising relevant landowners in support of its projects.
120
118
While not covered in this paper, the police, especially paramilitary units known as the ‘task
force’, have sometimes played a crucial role in violently ‘securing’legal, and extra-legal, conditions
within logging concessions. Such security often involves forms of power derived from the state, the
logging company, land owners and existing markets for police security. See Andrew Lattas,
‘Logging, violence and pleasure: neoliberalism, civil society and corporate governance in West
New Britain’,Oceania, 81:1 (2011), 88–107. For recent coverage of events in Pomio, see entries
tagged ‘Pomio’on the PNGexposed Blog, including ‘Logging in Pomio: violence, wages, land
and the environment’, PNGexposed Blog, https://pngexposed.wordpress.com/2014/09/22/
logging-in-pomio-violence-wages-land-and-the-environment/ (accessed 4 May 2015); ‘RH has
become the government of PNG’, PNGexposed Blog, https://pngexposed.wordpress.com/
2014/07/07/rh-has-become-the-government-of-png/ (accessed 4 May 2015).
119
ITS Global, ‘Uncivil society’,6.
120
Landowner ideas and activities in reference to logging are discussed in numerous other papers.
Here we highlight some accounts linked to RH projects in PNG: Lattas, ‘Logging, violence and
pleasure’; Colin Filer and Michael Wood, ‘The creation and dissolution of private property in
forest carbon: a case study from Papua New Guinea’,Human Ecology, 40:5 (2012), 665–77;
Michael Wood, ‘The Makapa timber rights purchase: a study in project failure in the post-
Barnett era’, in Colin Filer (ed.), The Political Economy of Forest Management in Papua New Guinea,
NRI Monograph 32 (Boroko 1997), 84–108; Michael Wood, ‘Kamula accounts of Rambo and
the state of Papua New Guinea’,Oceania, 76:1 (2006), 61–82.
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This has been particularly important when contesting other developers and dissenting
landowner groups. In summary, RH’s power and influence in the forestry sector
involves an ability to lobby the state, exploit regulatory weaknesses, shape national
debates and promote a developmental culture, as well as maintain degrees of land-
owner support. The broader structure of these interactions is defined by conjunctures
of elements of the state and the corporation, primarily involving shared understand-
ings and practices concerning ‘development’and forestry.
121
James Lau, managing
director of RH (PNG), recently pointed to this feature when he noted that the political
elite continue to support economic growth and development via foreign investment:
Domestically, the current O’Neill government is taking concrete
action to improve the business climate and attract direct foreign
investment. Most operators who have been in PNG for a long
time, such as RH, understand that the occasional bout of political
instability, as was seen before the last general election, is simply
part of doing business here.
122
The ongoing challenge for RH, even if it has the support of the political elite, will be to
demonstrate more equitable and just negotiations in its business ventures in PNG.
Such demonstrations will be difficult to implement since the activities of RH, and
the state, that routinely help intensify popular demands for greater justice and
equity in PNG’s forestry sector are often those that productively maintain and
extend RH’s power over forests and other resources.
121
Kapferer uses the term ‘corporate states’to describe state assemblages that are increasingly
subject to corporate power. Bruce Kapferer, ‘New formations of power, the oligarchic-corporate
state, and anthropological ideological discourse’,Anthropological Theory, 5:3 (2005), 285–99.
122
‘Interview: James Lau, managing director, Rimbunan Hijau (PNG) Group’.
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