Ten Years Without A Crop - The Wammy Rural Development Project
Case study on the Wammy Forest Clearing Authority
Logging companies mentioned in this document:
Concessions mentioned in this document:
FOREST CLEARING AUTHORITY CASE STUDY 1
TEN YEARS WITHOUT A CROP
THE WAMMY RURAL DEVELOPMENT PROJECT
ACT NOW!
JUBILEE AUSTRALIA RESEARCH CENTRE
ABOUT THIS REPORT
This is a publication of ACT NOW! and Jubilee Australia Research
Centre.
Author: Fyfe Strachan
Editors and contributors: Eddie Tanago and Professor Kristian
Lasslett
Published: September 2023
Cover image: Satellite image showing the boundaries of the Wammy FCA
and areas of forest
loss. Global forest change data: Hansen/UMD/Google/USGS/NASA;
Satellite image:
Copernicus Sentinel data, 2023.
ACT NOW!
ACT NOW! is a community advocacy organisation based in Papua New
Guinea. Its vision is for
a `gutpela sindaun blong olgeta' (a just and equitable society) that
embraces PNG's rich and
diverse cultural and biological heritage and is based on the
principles of sharing, communal
land ownership and environmental stewardship.
Contact us Follow us
info@actnowpng.org Facebook: @ActNowPNG1
+675 7715 9197 Twitter: @actnowpng
Website: www.actnowpng.org
Jubilee Australia Research Centre
Jubilee Australia Research Centre partners with and amplifies the
voices of local communities
in the fight against an extractive and unequal economic system,
produces quality investigative
research and advocates for just solutions that centre communities.
We are an independent and
not-for-profit organisation and donations are tax deductible.
Contact us ❑ Follow us
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Website: www.jubileeaustralia.org Twitter: @Jubileeaus
Linkedin: @Jubileeaus
TikTok: @Jubileeaus This work is licensed under a Creative Commons Attribution-Non Commercial 4.0 International License. El FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 1 CONTENTS TABLE OF ABBREVIATIONS 2 INTRODUCTION 3 THE WAMMY PROJECT 4 FOREST CLEARING AUTHORITIES 6 HOW THE WAMMY PROJECT MISUSED OR IGNORED PNG'S LEGAL FRAMEWORKS 8 LACK OF LANDOWNER CONSENT 8 LACK OF AN AGRICULTURAL PROJECT 10 SELECTIVE LOGGING RATHER THAN LAND CLEARING 12 UNDERLYING LAND LEASE IN QUESTION 14 VIOLENCE AGAINST LANDOWNERS 14 COMPANIES INVOLVED 16 FCAS NATIONALLY 17 CONCLUSION AND RECOMMENDATIONS 18 THE WAMMY PROJECT 18 FOREST CLEARING AUTHORITIES 19 ANNEX: WAMMY FCA TIMELINE 20 TABLE OF ABBREVIATIONS
ABC Australian Broadcasting Commission DAL Department of Agriculture and Livestock DEC Department of Environment and Conservation DLPP Department of Lands and Physical Planning FCA Forest Clearing Authority FMA Forest Management Agreement ILG Incorporated Land Group LFA Local Forest Area LIP Land Investigation Process LIR Land Investigation Report LLG Local Level Government PNG Papua New Guinea PNGFA Papua New Guinea Forest Authority SABL Special Agricultural and Business Lease SGS Societe Generale de Surveillance SA TA Timber Authority TRP Timber Rights Purchase US United States FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 2 INTRODUCTION The Sepik River snakes for more than 1,000 kilometres through rainforests and wetlands of staggering ecological and cultural diversity. The Upper Sepik River Basin is home to multiple endangered bird species, the greatest marsupial diversity on the planet, and 430,00o people who depend almost entirely on the rivers and forests for their livelihoods. The area's ecological and cultural value has been recognised with its placement on the tentative list for World Heritage status.i The banks of the Upper Sepik River also mark the southernmost boundary of a vast logging concession and purported agricultural project area - the Wammy Project.2 Covering 105,200 hectares of mostly forested land in the West Sepik (Sandaun) Province of Papua New Guinea (PNG), a local company in league with Malaysian logging company Global Elite Limited (Global Elite) was granted an agricultural lease for a palm oil and rubber project in 2010. On the basis of this lease, Global Elite was granted a Forest Clearing Authority to clear-fell forests for agricultural planting. Ten years later, there is no palm oil and no rubber, but selective logging has removed over 400,00o cubic metres of round logs from the area, more than enough
to fill 6,000 shipping containers, netting Global Elite more than US$31 million (u5 million kina) .3 This report looks in detail at the Wammy Project and how the laws intended to protect PNG's forests from unsustainable timber harvesting appear to have been subverted to facilitate large- scale logging. The report focuses on the documented evidence pointing to illegality in the project, in particular: • The lack of landowner consent • The failure to deliver a genuine agricultural project • The use of the land to harvest high value timber rather than clear for agriculture, and • Reported instances of violence against landowners. The Wammy Project has been selected not because it is unusual, but because it highlights how Forest Clearing Authorities, a type of logging licence intended to facilitate land clearance for agriculture or other land use change, are being systematically abused to allow large-scale logging of huge tracts of forest; one of the various ways in which local communities' natural resources are being stolen across PNG. This report was written by ACT NOW! and Jubilee Australia based on desk research conducted June - August 2023. The report draws its evidence from transcripts and a report of a PNG government-backed Commission of Inquiry, media reports, satellite data, log export monitoring reports and evidence collected by civil society organisations, in particular the information shared on open-source website pngiforests.org. ACT NOW! wrote to Global Elite Limited, Giant Kingdom Group, Wammy Limited, the PNG Forest Authority and the Department of Lands and Physical Planning between June and August 2023 with questions relating to the content of this report, but did not receive a response by the date of publication. FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 3
THE WAMMY PROJECT
The Wammy Project is an agricultural lease and logging concession
covering an area of around
105,000 hectares in West Sepik (Sandaun) province, including the
town of Edwaki and the
Yellow River area.4
Figure 1: Location of the Wammy Project
Logging in the Wammy concession is being carried out under a Forest
Clearing Authority
licence held by Malaysian-owned company Global Elite Limited.
In October 2010, a PNG landowner group, Wammy Limited, obtained a
Special Agricultural and
Business Lease (SABL) for 99 years over an area of 105,200 hectares
in West Sepik.5 This was
one of only 16 SABLs granted with a land area over 100,000 hectares.
Wammy Limited had
been incorporated six months earlier.6
Before the SABL was granted, the entire area was under customary
land ownership. The vast
majority of PNG's total land area is under customary control, which
is recognised and
protected under PNG's Constitution. Customary land can only be
leased by the Government
under specific circumstances and with agreement of the landowners.?
The Wammy SABL was granted based on the signed consent of seven
individuals, with three
individuals from neighbouring villages attesting that there were no
boundary disputes. The
SABL did not reserve any traditional rights to the landowners over
the entire 99-year lease
period.8 Later reports strongly suggest that several landowner
groups in the area did not
consent to the granting of the SABL.9
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 4
Within a few days of the SABL being granted, Wammy Limited issued a 6o-year sublease over the entire area to Malaysian-owned logging company Global Elite Limited. At the time the lease was granted, Global Elite had a permit to carry out forestry, construction and retail, but not agricultural activities in PNG.10 In 201143, a government-appointed Commission of Inquiry reviewed the Wammy SABL as part of a broader investigation into misuses of the SABL regime (see Box 1). The Chief Commissioner's final report, issued in June 2013 (Numapo Report) recommended that the Wammy SABL be surrendered and renegotiated, pointing out lack of consent by key landowners and the government's failure to undertake several legally-required processes before granting the lease.ii Despite this official recommendation, Global Elite was granted a Forest Clearing Authority in July 2013 (FCA 10-07), covering 105,000 hectares, almost the entire area covered by the SABL lease. It is unclear on what basis such a large area of land was included in the FCA, when the agriculture project that Global Elite had proposed only covered 40% of the land. Logs have been exported from the Wammy concession every year since 2015. Over that time, 414,762 cubic metres of logs have been exported.12 The logs exported from Wammy have netted Global Elite more than US$31 million (or 115 million kina).13 Logs exported include a range of high value tropical species, including kwila and taun.ut According to ABC Foreign Correspondent, logs from the area covered by the Wammy Project are sent to Elimoli (sometimes spelled Elamuli), a Global Elite-run logging port on the Sepik River. Logging appears to be currently occurring, with logs exported from the concession as recently as March 2023.15 Wammy FCA - Log Exports by Year Figure 2: Log exports from Wammy FCA by year. Source: pngiforests.org FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 5 FOREST CLEARING AUTHORITIES Logging in PNG is governed by the Forestry Act 1991 and managed by
the PNG Forest Authority
(PNGFA), which is responsible for granting logging licences under a
range of different
concession types.
There are three logging concession types defined in the Act:
• Forest Management Agreement (FMA): an agreement between
customary landowners
and the PNGFA for the sustainable management of large areas
of forest and selective
timber harvesting. Under the contract the PNGFA acquires the
long-term rights to
manage the forest. The PNGFA is then able to select a
logging company to sustainably
harvest timber and issue them with a timber permit.
• Forest Clearing Authority (FCA): in contrast to a Forest
Management Agreement, an
FCA is intended to facilitate large-scale conversion of
forested land to agriculture or
other land uses. The FCA is granted "for the purpose of
clearance of natural forest on
areas designated for agriculture or other land use
development".
• Timber Authority (TA): this is used to authorise small-scale
harvesting activities. This is
defined as the cutting of less than 5,000 cubic metres of
timber for domestic
processing, the removal of up to 5o hectares of forest for
agriculture or other land use
change, the clearing of a roadline not exceeding 12.5km in
length, or harvesting non-
timber forest products or a timber plantation.
On top of this, over a million cubic metres of logs are still
exported each year under the
historical, pre-1991, licence types, the Timber Rights Purchase
Agreement (TRP) and the Local
Forest Area (LFA).16
PNG Log Exports 2023 by Licence Type (m3)
Figure 3: PNG log exports by licence type, 2022.
Source: pngiforests.org
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP
6
FCAs were introduced into the Forestry Act in 2000,17 and were initially granted to holders of Special Agricultural and Business Leases, theoretically to allow land clearing for agriculture or other land use projects (see Box, below). The requirements in the Forestry Act that need to be met before an FCA can be granted make it clear that considering the underlying agricultural (or other land use) project is an important component of the approval process. Before the National Forest Board (the body that oversees the PNGFA) can grant an FCA, it needs to consider a detailed development plan, implementation schedule for the agricultural (or other land use) project, a map showing any areas that are important for conservation or unsuitable for agricultural or other land use development and other information about the project. The Board also needs to see evidence of landowner consent, in the form of a document that verifies the consent of each resource owning clan, via their Incorporated Land Group or agent. There also needs to be a government report showing that a public hearing was held about the project, close to the project site, and a signed agreement between the landowners and the developers.18 The Forestry Act also stipulates that any forest clearing operation should take place in four phases. Each phase is to be subdivided into blocks for clearing of a maximum of 50o hectares. Permission for logging under a second or any subsequent phase may only be granted where "all conditions relating to the development plan and implementation schedule have been satisfied". There is no mention of permission for selective logging under an FCA. Rights under an FCA may be suspended "where the planned land use for which a forest clearance authority is granted is not progressing according to the development plan or implementation schedule" or any condition of the FCA is breached. SPECIAL AGRICULTURAL AND BUSINESS LEASES PNG's Special Agricultural and Business Lease (SABL) scheme was
designed to facilitate large-scale agricultural development on customary land. The scheme allowed customary landowners to lease their land to the State, who would then lease it back to a nominated person or group of their choosing. This, in theory, would give customary landowners a legal title they could use to enter into agricultural projects. In practice, more than two thirds of SABLs were subleased directly to private companies for 99 years leaving no residual rights for landowners.' 9 Companies were then able to obtain an FCA to clear forest land on the promise of planting palm oil or other crops. Following widespread reports of abuses of the SABL scheme, in 2011, the Government of PNG appointed a Commission of Inquiry to investigate it. Two of the three Commissioners issued final reports in 2013, covering 42 SABLs (the third Commissioner never submitted a report). The Commissioners found that 38 of the 42 SABLs demonstrated a lack of landowner consent. They found numerous instances of landowner consent being fraudulently obtained through misrepresentation, and documented a system captured by logging companies, who paid for almost every stage of the process, resulting in leases with no genuine consent, incorrect land boundaries and benefit-sharing agreements that left landowners out in the cold.' HOW THE WAMMY PROJECT MISUSED OR IGNORED PNG'S LEGAL FRAMEWORKS There is well documented evidence that suggests that the Wammy Project, including the Wammy logging concession, was not established in accordance with the law. Specifically, available evidence suggests that many landowners - potentially the majority - did not consent to the project, the project was not a genuine agricultural project, and the forest in the project area has been subject to selective logging rather than the land conversion activities authorised under the FCA. In addition to this, news reports have detailed abuse of police powers linked to the project. LACK OF LANDOWNER CONSENT Agreement of customary landowners was an important prerequisite for the grant of an SABL under the Lands Act 1996, which requires a lease to be granted to the person or body "to whom the customary landowners have agreed that such a lease should be granted".21 It is also an important prerequisite for granting an FCA, which requires "a verification of ownership and
the consent of each resource owning clan agent (or incorporated Land
Groups if they have
been formed) within the project area", a report on a public hearing,
and "an agreement or
agreements between the landowners and the proposed development of
the agriculture or other
land use project."22
The PNG Supreme Court has also articulated the requirement for
project proponents to obtain
landowners' "free and informed consent and approval and ultimately,
their social license to
operate."23 The Court has made it clear that:
foreign investors or developers who wish to enter any land in
PNG and more so
customary land [must] enter into meaningful discussions and
negotiations with them
[customary landowners] and get their free and informed consent
or approval before
entering, occupying, and using their land.24
Available information suggests the Wammy Project land lease and FCA
were granted without
the consent of a significant portion of customary landowners - if
not the majority.
During the Commission of Inquiry hearings, a landowner representing
an alternative group -
Nakap Agro Forestry JV Development Limited - said that his people's
land had been broken up
and split across three concessions, including the Wammy concession,
without their consent.25
He stated that the landowner company, Wammy Limited, was formed by
only five villages (out
of 22) from the Western part of the Namea LLG in the Telefomin
District. He asserted that the
name "Wammy" is an acronym made up of the names of those five
villages.26
The representative of Nakap Agro Forestry argued that 355,900
hectares of land was under the
customary ownership of landowners who were part of that group, but
had instead been
included in four SABLs without their consent - three in Sandaun
Province and one in East
Sepik Province.27
At the Commission of Inquiry hearings, the Provincial Lands Officer
also testified that about 6-
12 Incorporated Land Groups (ILGs) "withheld their consent for Wammy
Limited and Global
Elite Limited to be the vehicles of development". As Commissioner
Numapo noted, this
"confirms that there was conscious dissent and opposition during the
Land Investigation
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 8
process" and "what happened thereafter was not on the basis of
popular landowner wish to
lease their land". A representative of Wammy Limited, on the other
hand, testified that he
"thinks" there was informed consent from all landowners.28
Other key steps in the SABL process essential to establishing
landowner consent were missed.
For example, only seven landowner representatives signed to attest
to their participation in the
boundary walk/inspection as well as to indicate their consent (as
landowner agents) for a lease
to be issued.
The Chief Commissioner concluded that "the Land Investigation
Process (LIP) was not properly
executed and the Land Investigation Report (LIR) was badly done.
Even though some
landowners appear to have been consulted and their signatures
collected, the genuineness of
the LIR is in doubt in the light of the allegations of fraud raised
by the opposing group."29 In
particular, he found that the boundary walk did not happen and would
not have been practical
given the size of the land. Despite this, the Provincial Lands
Officer and Provincial Lands
Administrator both approved the LIR.
The Provincial Administrator also executed a crucial project
document, a Certificate of
Alienability, in circumstances in which it alienated the land
without reserving any land use
rights for customary landowners (for example, to continue to live on
and use the land to grow
food, hunt or engage in traditional practices). The Commissioner
called this "a reckless
failure", noting the large land area covered by the SABL and that
most was not needed for
agriculture.3° He commented "The failure of the Provincial
Administrator and the
Lands Officers {sic} who advised him possibly borders on criminal
negligence."31
On top of this, the Department of Agriculture and Livestock (DAL)
approved the Wammy
Integrated Agriculture Project four months before the public
consultation hearing on the
project was held.32 The Commissioner commented that "DAL and DEC
[Department of
Environment and Conservation] approvals and permits appear to have
been granted without
any independent assessment on the impact of ongoing, visible
substantial landowner
disagreements and opposition to both Wammy Limited and Global Elite
Limited."33
Some landowners in the Wammy Project area continue to assert their
lack of consent for the
project. A 2023 investigation by ABC's Foreign Correspondent
recorded a community meeting
with customary landowners in the Yellow River area, which is covered
by the Wammy
concession. One man, describing himself as the chairman of a land
group, stated that he never
signed an agreement for the logging and that someone signed it on
his behalf. Another
community leader interviewed stated he also did not consent to the
logging. Other landowners
at the meeting spoke with anger and frustration about the logging
project and the involvement
of PNG police (see below). The program reported that some landowners
have sought legal
advice to regain their title over the land.34
The Foreign Correspondent team also spoke to another landowner who
said the company was
seeking consent for logging "block by block": "the landowner signs
the consent and they go
into their block and cut the trees". That landowner confirmed that
he had consented to the
logging operation.35 Even if Global Elite is seeking piecemeal
consent from individual
landowners living in the area of land proposed for logging, this
falls short of the consent
required for development under PNG's Constitution and the Forestry
Act In PNG, the majority
of land is customarily owned and development requires the consent of
the whole community.
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 9
LACK OF AN AGRICULTURAL PROJECT
The SABL was granted to Wammy Limited on the basis of a
proposal for an oil palm and rubber
project to be carried out by Global Elite. The FCA that allows
logging in the project area is also
based on the need to clear land for the oil palm and rubber
project.
At the time the SABL was granted Global Elite's company
registration did not include any
permission to carry out agricultural activities. When asked
about this at the Commission of
Inquiry hearing, Global Elite's representative claimed the
company would secure certification
to carry out agricultural activities once it had made enough
money from logging to recoup its
costs and fund the agricultural component. As the Chief
Commissioner pointed out:
This indicates that the developer is not bringing into the
country its own resources and
capital to invest in the country and instead is trying to
raise money in-country through
logging activities before it ventures out into agriculture
and other business activities.
This is contrary to the National Government's policy on
foreign investment to boost the
local economy by bringing in foreign exchange.36
The agricultural project that Global Elite proposed at the time
of applying for the SABL also
only covered 40% of the land covered by the lease.37 It is
unclear why the remaining 60% of the
land was included in the SABL and ensuing FCA if it was never
needed for agriculture.
The vast size of the Wammy logging concession, at 105,20o
hectares, is also at odds with a
proposal for a palm oil and rubber project. At the time the
concession was granted, only
around 130,000 hectares of land in the whole of PNG was planted
with palm oil, with less than
20,000 hectares of land planted with rubber.38
A 2014 analysis of multiple SABLs, based on a review of
documents including the projects'
Environmental Inception Reports and Environmental Impact
Statements, assessed that the
Wammy concession had insufficient suitable land to sustain an
economically viable palm oil
production project. The report estimated that a successful
project would have required 5,000-
10,000 hectares of usable land.39
The Certificate of Alienability ... was executed without
careful assessment and
regard to the lack of popular support for the project and
visible opposition to
both Wammy Limited and Global Elite Limited as preferred
entities. No
traditional land use rights were noted or preserved. That is a
reckless failure.
Excess rights, both for survival or pleasure should have been
reserved for the
customary landowners. The land mass is vast and not all of it
is needed for the
proposed Agro Forestry project.
CHIEF COMMISSIONER JOHN NUMAPO
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 10
This assessment appears to be borne out by the project's failure
to establish an agricultural
project. Although the FCA has been in place for a decade, the
recent ABC Foreign
Correspondent report found there are no currently operating oil
palm or rubber projects. In
response, Global Elite claimed it has "begun all the processes"
but "multiple nurseries" were
burned down by landowners.4°
The above factors strongly suggest that the true purpose of the
Wammy project was logging,
not agriculture. The SABL land area - which is largely forested
- appears to be largely
unsuitable for oil palm and covered thousands of hectares more
land than was required under
Global Elite's agricultural project proposal. Global Elite was
then and remains primarily a
logging company. All this suggests that the project did not meet
the requirements of the Land
Act or Forestry Act, as it was not a genuine agricultural
project. Beyond this, it suggests that
Global Elite acted in bad faith by securing permission from
landowners and the government for
a project it may not have ever intended to carry out.
Unique marsupials, such as tree kangaroos, exist across the
rainforests of PNG, including in West Sepik province.
Photo: Shutterstock
SELECTIVE LOGGING RATHER THAN LAND CLEARING
As set out above, the Forestry Act requires that FCAs be
granted for land clearing and that land
should be cleared in 50o hectare block phases.
However, satellite analysis of the Wammy concession,
commissioned by ACT NOW! and
conducted in April 2023, shows that while selective logging has
occurred over a wide area, only
240 hectares of forest has been cleared for possible
agriculture planting (see images below).
Under the Forestry Act, there is no provision for selective
logging to be done under an FCA. The
Act provides the Forest Management Agreement as the only
process to allow selective logging
operations and ensure they are managed sustainably.41 The FCA
process is explicitly intended
to facilitate conversion of forest for agriculture or another
land use.42
Close up showing the 240 hectare area of land clearance within the
Wammy FCA.
Global forest change data: Hansen/UMD/Google/USGS/NASA; Satellite
image: Copernicus Sentinel data, 2023
CA CASE STUDY 1: TEN YEARS WITHOUT A CROP 12
Satellite image showing the boundaries of the Wammy FCA and areas
of forest loss.
Global forest change data: Hansen/UMD/Google/USGS/NASA; Satellite
image: Copernicus Sentinel data 2023
UNDERLYING LAND LEASE IN QUESTION
The results of the Commission of Inquiry into SABLs and the
government's subsequent
pronouncements about the future of SABLs have created uncertainty
about whether the
Wammy SABL is still current (and therefore whether there is a
valid agreement with
landowners that would allow Global Elite to operate on the land).
As noted above, in 2013 Chief Commissioner Numapo recommended
that the Wammy SABL be
surrendered and renegotiated. In June 2014, PNG's National
Executive Council approved
revoking all SABLs that had been recommended for revocation by
the two Commission of
Inquiry reports.43 It is unclear whether this covered Wammy
lease.
In July 2014, the Department of Lands and Physical Planning
(DLPP) published a list of 29
SABLs in The National, directing the leaseholders to return the
original copies of their leases
"for the purposes of deregistration/cancellation" in compliance
with this cabinet decision. The
Wammy SABL was not on this list.
Again, in 2022, then Lands Minister John Rosso told Parliament
that 20 SABLs had been
cancelled, with a further 20 to be investigated once court
proceedings had ended. However, he
did not issue a list of those SABLs.44
The available information suggests that the Wammy lease has not
been revoked, despite the
recommendation of the Chief Commissioner. However, without a
current list showing which
SABLs have been revoked, and whether those not revoked have been
reviewed and found to be
valid or are awaiting review, the ongoing legal status of the
Wammy SABL remains unclear.
ACT NOW! sought this information from DLPP but did not receive a
response as at the time of
publication.
VIOLENCE AGAINST LANDOWNERS
There have also been reports of violence against landowners in
the area in which the Wammy
logging concession is located. An ABC news investigation quoted
landowners who indicated
that they faced police intimidation if they opposed logging
companies in the area and that
landowners who resisted logging were threatened with guns and
locked in shipping
containers.45 The report cited evidence that police in the area
used a shipping container as a
jail cell, and that one landowner had been badly beaten by police
and locked in a shipping
container for a week.
They broke my jaw, my teeth, my mouth. They beat me badly. My
life was on the line.
They pointed a gun at me. They tried to throw me out of a moving
truck, but I held on. I
told them, I'm not a criminal. They locked me in a shipping
container for a week.
LUKE AMIAL, LANDOWNER
Speaking to ABC Foreign Correspondent
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 14
There have been other reports of violent clashes between police
and community members in
West Sepik. In January 2022, one police officer and two
community members were reportedly
killed in the Edwaki area, with reports that the police had
been working to protect the interests
of a logging company in the area.46 There is no suggestion that
the logging company directed
or caused the deaths of the community members or police.
However, the incident highlights
the risks and heightened tensions that can arise when police
become embroiled in logging
fights.
The ABC in its report confirmed that Global Elite has been
bringing officers in and paying for
their food and accommodation. Global Elite had noted that "it
has a security arrangement with
PNG Police because of law-and-order issues in the area. It pays
for the officers' food and
accommodation but said it's 'appalling that one could suggest
that police are tools of the
company.'"47 Global Elite also said it's "doing its best" for
people in the area by providing
ventilated shipping containers because there are no police
cells in the area.48
The ABC report quoted the PNG police commissioner, who said he
had banned police
deployments that support logging operations and that the
officer involved in the shooting
should never have been here. The ABC also cited a confidential
report from PNG defence that
"backs up claims of police using a shipping container as a jail
cell, and that warns logging
companies are, quote, 'using police to bulldoze over the rights
of landowners'".49
Forest along the banks of the Sepik river. Photo: Shutterstock
COMPANIES INVOLVED
The Wammy Integrated Agro-Forestry Project involves two main
companies:
Wammy Limited, a Papua New Guinean company, was granted the Special
Agricultural and Business Lease for the Wammy Integrated Agro-Forestry Project. Wammy Limited has eleven directors, all Papua New Guinean men from villages in West Sepik, and four shareholders, also men from West Sepik. Its principal activities are listed as "Forestry" and "Agriculture, Hunting and Forestry". It was first incorporated in April 2010.50 Global Elite Limited holds the FCA for the Wammy project and also holds a 6o-year sublease from Wammy Limited, giving it effective control over the full 105,20o hectares. Registered as a foreign enterprise on 2 March 2010, Global Elite's business activities are listed as agriculture, hunting and forestry; manufacturing; construction; and wholesale and retail trade, sale and repair of motor vehicles and personal goods.51 Global Elite appears to be part of a larger Malaysian family of corporate entities, the Giant Kingdom group. At the apex of the Giant Kingdom group is Giant Kingdom Holdings Sdn Bhd. The Giant Kingdom group includes 18 companies in PNG, covering logging, shipping, timber processing, palm oil, hospitality and other business interests.52 Since its establishment, Global Elite has exported logs from 12 logging concessions in East and West Sepik.53 Nearly 80% of Global Elite's log exports since 2010 have come from the Wammy concession. Another Giant Kingdom company, Summit Agriculture Limited, has exported logs from ten concessions in the same provinces.54
Figure 4: Companies involved in the Wammy FCA and SABL
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 16
FCAS NATIONALLY
The Wammy Project is just one of 24 active logging concessions
across nine Provinces where
logging is authorised under FCA. FCAs are currently responsible for
just under a third of PNG's
total round log exports and, in 2022, almost 1 million cubic metres
of logs (949,603 m3) were
exported from FCAs.55 Together, these actively exporting FCAs
covered an average area of
61,849 hectares, the equivalent of more than ii,000 football fields.
While FCAs are intended to be granted only in situations where
forested land needs to be
cleared for an agricultural or other land use project, there are
numerous reports of FCAs being
misused for large-scale selective logging operations. For example,
in 2018 Global Witness
detailed evidence from field investigations that showed some FCAs
were not being used to
convert forest to agriculture projects but for extensive logging.56
Global Witness also raised
concerns about illegality in the granting of new FCAs, after the end
of the SABL scheme. Forest
Trends' 2021 Timber Legality Database also reports: 57
Forest clearance permits intended for agricultural
development,
often used as a pretext for gaining access to timber,
have become
a major source of logs exported from PNG over the last
decade.
These permits are frequently issued illegally and
without
transparency or due process, in particular violating
laws around
customary land rights.
These concerns have been endorsed by the PNG Forest Authority's own
officers. In a 2017
planning retreat, PNG Forest Authority staff identified managing
FCAs and agriculture
clearance as a key priority area. It was noted that "existing
procedures are not being fully
implemented due to developers bypassing elements of the process and
political pressure for
developments to go ahead." The workshop made a number of key
recommendations for the
future management of FCAs including, "develop only 500ha blocks at a
time" and cancellation
of "non-compliant" FCAs.58
In December 2022 the National Forest Board responded to the concerns
of abuse in the use of
FCAs by imposing a 12-month moratorium on the issuing of new FCA
permits and ordered an
audit of existing FCA operations.59
This moratorium has not impacted the existing and ongoing FCA
operations and the PNG
Forest Authority has not responded to calls to conduct the auditing
of these operations through
an open and transparent process.
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 17
CONCLUSION AND RECOMMENDATIONS
THE WAMMY PROJECT
There is compelling evidence suggesting that the Wammy Project was
established illegally in
the first instance, and has seen further illegality throughout the
period of its operations, which
are still ongoing. This includes:
• Lack of demonstrated informed consent from a significant portion
of customary
landowners, with documented objections from several landowner
groups at the time
the lease and FCA were issued;
• Compelling evidence of non-compliance with key processes
required to be undertaken
before an SABL or FCA can be granted;
• Strong evidence suggesting the majority of the land under the
SABL was neither
required for an agriculture project nor suitable for palm oil
planting; and
• Strong evidence that logging has been allowed to continue over
at least eight years and
is still ongoing despite no agriculture project having been
established.
This evidence suggests that the logging activity taking place in the
Wammy Project area should
be considered illegal logging, and that the hundreds of thousands of
cubic metres of logs that
have been sold from this concession should be classified as illegal
timber. On this basis, ACT
NOW! and Jubilee Australia make the following recommendations:
1. Global Elite Limited should:
a. Immediately cease all logging activities in the Wammy FCA
area;
b. Surrender its sublease, if that lease is currently in
operation, as recommended by
the SABL Commission of Inquiry;
c. Rehabilitate areas that have been degraded due to illegal
selective logging;
d. Provide compensation for any illegal logging activities and
associated
environmental impacts to the customary landowners.
2. The PNG Forest Authority should:
a. Immediately stop any further logging in the Wammy concession,
stop any further
log exports and seize any logs already harvested;
b. Cancel the Forest Clearing Authority granted to Global Elite
Limited (FCA 10-07);
c. Investigate whether Global Elite Limited has committed any of
the offences in
section 122 of the Forestry Act 1991 and, if so, impose the
relevant penalty;
d. Provide compensation for any illegal logging activities and
associated
environmental impacts to the customary landowners.
3. The Department of Lands and Physical Planning should:
a. Cancel the Wammy Rural Development Project SABL, if it has
not already been
cancelled, and provide notice to Wammy Limited and Global Elite
Limited to vacate
the land.
4. The Royal PNG Constabulary should:
a. Open a criminal investigation into the possible theft of
forest resources and
conspiracy to defraud landowners.
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 18
5. Banks and all institutions with anti-money laundering obligations
providing services to
companies in the Giant Kingdom group should:
a. Review their risk exposure and discontinue any arrangements
that could be
connected to funds generated from the Wammy Project.
FOREST CLEARING AUTHORITIES
The Wammy Project is just one of 24 currently exporting FCAs in PNG.
The kinds of issues
present in the Wammy Project have been reported in numerous FCA
areas, including via the
SABL Commission of Inquiry.
These concerns may have prompted the PNG Forest Authority's December
2022, 12-month
moratorium on issuing new FCAs. This moratorium is very welcome in
light of the well
documented legal and human rights concerns in relation to FCAs, but
does not go far enough.
ACT NOW! and Jubilee Australia therefore recommend that:
The PNG Forest Authority should:
b. Publicly release information on its ongoing review of FCAs,
including a schedule of
the FCAs being reviewed and the findings of each review;
c. Undertake public consultation, including and especially with
affected landowners
and civil society organisations, as part of the review of each
FCA;
d. Suspend log exports from all existing FCAs until this review
is complete;
e. Commit to extending the current moratorium on new FCAs until
all
recommendations and findings from the reviews have been fully
implemented to
prevent future abuse;
f. Immediately establish a public register as required under the
Forestry Act.
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 19
ANNEX: WAMMY FCA TIMELINE
DATE EVENT
7 April 2010 Wammy Limited incorporated
11 April 2010 Project Development Agreement was executed between
Wammy Limited and Global Elite Limited for
"logging, log marketing
and commercial agriculture".
27 September 2010DAL advised Global Elite Limited that its
Agriculture and Rural
Development Project Proposal had been approved
8 October 2010 SABL over Portion 27C granted to Wammy Limited by
DLPP
15 October 2010 SABL to Wammy gazetted through National Gazette
issue No
G243 of 2010
18 October 2010 Wammy Limited granted a sublease over the entire
SABL (Portion
27C) to Global Elite Limited for 60 years
29 October 2010 Sublease registered with DLPP
5 February 2011 Public hearing held at Worikori Village in
Telefomin
3 October 2011 Commission of Inquiry hearings on Wammy
26 June 2013 Final Commission of Inquiry reports submitted to
the Government,
including recommendation that Wammy SABL be
surrendered and
renegotiated
10 July 2013 FCA Granted to Global Elite
18 September 2013Commission of Inquiry reports presented to
Parliament
June 2014 Cabinet decision that all SABLs recommended for
revocation be
revoked
FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 20
ENDNOTES 1 UNESCO, "Upper Sepik River Basin", https://whc.unesco.org/en/ tentativelists/5065/ (accessed 5 July 2023). 2 Note: this report uses the term "Wammy Project" to refer interchangeably to the Wammy Integrated Agro-Forestry Project, for which a Special Agricultural and Business Lease was granted, and the Wammy logging concession covered by a Forest Clearing Authority (FCA). The Wammy Special Agricultural and Business Lease covers 105,200 hectares while the FCA only covers 105,00o hectares. 3 Data from monthly log export monitoring reports produced by Societe Generale du Surveillance (SGS). 4 PNGi Forests, "Wammy", https://pngiforests.org/licence/wammy (accessed 25 May 2023); Final Report of the Commission of Inquiry into the Special Agricultural & Business Leases dated 24 June 2013 (Numapo Report), p, 103. 5 Numapo Report, p. 104. 6 Numapo Report, p. 104 7 See: Constitution of the Independent State of Papua New Guinea 1975, s 53 and 54; Lands Act 1996, s io and 11. 8 Numapo Report, p. 104 9 Numapo Report, p 107-108. 1° Numapo Report, p. 105. 11 Numapo Report, pp. 103-111. 12 Data taken from PNGi Forests, based on SGS Log Export Monitoring Reports, 2015-2023. 13 on on log values declared to SGS, 2015-2023. Previous research has found that declared export prices for PNG's logging sector are substantially lower than other major exporters, and there is a high number of related party transactions in the sector. In 2023, PNG's Internal Revenue Commission imposed a K14o million tax assessment against a "prominent logging operator" for "engaging in illicit tax evasion, specifically through transfer pricing". There is no suggestion that Global Elite is this operator, or evidence to suggest Global Elite has engaged in transfer pricing. See: Internal Revenue Commission (2023) "Major Logging Operator Charged K14oM For Tax Evasion", Media Release, 26 June, available at: https://irc.gov.pg/news/media-releases/major-logging-operator- charged-k14om-for-tax-evasion and Frederic Mousseau and Peiley Lau (2016) The Great Timber Heist: The Logging Industry in Papua New Guinea, Oakland: Oakland Institute. 14 SGS reports, 2015-2022. 15 SGS Monthly Log Export Monitoring Report April 2023 and Natalie Whiting, Alex Barry and Thekla Gunga, "How the `second Amazon' became a battleground", ABC Foreign Correspondent, 9 March 2023, https://www.abc.net.au/news/2023- 03-09/how-the-second-amazone-became-battleground-sepik-png/102062130 (accessed 27 June 2023). 16 PNGi Forests, https://pngiforests.org/ (accessed 6 July 2023). 17 Forestry (Amendment) Act zoo°. Available at:
http://www.paclii.org/cgi-bin/sinodisp/pg/legis/num_act/fa2000219/ indexhtml?stem=&synonyms=&query=forestry%2oamendment (accessed 4 July 2023). 18 Forestry Act 1991 (as amended), s 9oA and 9oB 19 Numapo Report, p. 241. 2° See Commissioner Nicholas Mirou (2013) Commission of Inquiry into the Special Agricultural and Business Lease (SABL)1 Report p. 181. 21 LandSACt1996, S 102. 22 Forestry Act 1991 (as amended in 2007), s 9oA. 23 Rimbunan Hijau (PNG) Ltd vEnei [2017] PGSC 36, [3o]. 24 Rimbunan Hijau (PNG) Ltd vEnei [2017] PGSC 36, [27, 57]. 25 Numapo Report, p 103. 26 Numapo Report, p. 107. The five villages were: Wagou, Aiendami, Mandopai, Mokedami, and Yuwari. Company records for Wammy Limited show that its directors (the same now as in 2010) have registered addresses in eight villages in the Telefomin area, also spelling WAMMY: Wakou, Abrau, Mokwedami, Magleri, Mantubai, Yaru, Yakeltim and Yuwari. 27 Numapo Report, p 107. 28 Numapo Report, p. 108 29 Numapo Report p. no. 3° Numapo Report, p. no. 31 Numapo Report, p. 112. 32 Numapo Report, p. 106. 33 Numapo Report, p. no. FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 21 34 ABC Foreign Correspondent, "The Second Amazon: The Hidden Natural Wonder Under Threat in PNG", TV segment, available at: https://www.youtube.com/watch?v=URckE1PnHzA 35 ABC Foreign Correspondent, "The Second Amazon". 36 Numapo Report, p 105. 37 Numapo Report, p. no and 112. 38 Australian Centre for International Agricultural Research (ACIAR) (2010) Environmental sustainabllity of oil palm cultivation in Papua New Guinea, Canberra: ACIAR, at p. 3), available at: https://www.aciar.gov.au/sites/default/files/legacy/node/12951/ trom_environmental_sustainability_of oil_palm_cul_181 16.pdf; PNG Ministry of Agriculture and Livestock (undated), National Agriculture Development Plan (2007 - 2016), Volume 1, Government of PNG, available at: https://png- data.sprep.org/dataset/national-agriculture-development-plan- 2007-2016 atP.117. 39 Paul Nelson, Jennifer Gabriel, Colin Filer, Murom Banabas, Jeffrey A Sayer, George N Curry, Gina Koczberski, Oscar Venter (2014) "Oil palm and deforestation in Papua New Guinea", Conservation Letters, 7 (3). pp. 188-195 4° Natalie Whiting, Alex Barry and Thekla Gunga, "How the 'second Amazon' became a battleground".
41 Forestry Act 1991, sections 56-6o. 42 See for example, Forestry Act 1991, subsection 90B(9): "Where the Provincial Forest Management Committee, after having considered and evaluated an application, is of the opinion that it is satisfactory, it shall recommend to the Board to approve the application for a conversion of the forest to agriculture or other land use". 43 Government of Papua New Guinea, National Executive Council Decision 184/2014, available at: https://pngexposedisssing.com/chan-9358371/all_p16.html 44 The National (2022) "20 SABLS cancelled, more may go", The National, 20 January, https://www.thenational.com.pg/2o-sabls-cancelled-more-may-go/ (accessed 13 July 2023). 45 Natalie Whiting, Alex Barry and Thekla Gunga, "How the 'second Amazon' became a battleground" 46 Miriam Zarriga (2022) "Three held over cop's death", The National, 21 January, https://www.thenational.com.pg/three- held-over-cops-death/ (accessed 4 July 2023); Donald Nangoi (2022) "Engagement of police at logging sites questioned", Post Courier, 19 January, https://www.postcourier.com.pg/engagement- of-police-in-logging-sites-questioned/ (accessed 4 July 2023). 47 Natalie Whiting, Alex Barry and Thekla Gunga, "How the 'second Amazon' became a battleground" 48 Natalie Whiting, Alex Barry and Thekla Gunga, "How the 'second Amazon' became a battleground" 49 ABC Foreign Correspondent, "The Second Amazon: The Hidden Natural Wonder Under Threat in PNG". 5° Certificate of Good Standing - Long Form, Wammy Limited (1-72853), available from https://ipa.gov.pg (accessed 29 June 2023). 51 Entity Profile, Global Elite Limited, available at: https:// ipa.gov.pg (accessed 29 June 2023) 52 Ackland Alliance Limited, Continental Venture Limited, Elite Marine Limited, GE Development Limited, Foyston Development Limited, Global Elite Limited, Global Splendid Investment Limited, Global Star Corporation Limited, Grand Agriculture Limited, Greenlands Development Limited, Kukusang Plywood Limited Limited, Mapac Industrial Limited, Pacific Agro Capital Limited, Pacific Elite Investment Limited, Sepik Oil Palm Plantation Limited, Sepik Palm Oil Limited, Summit Agriculture Limited, and Wewak Agriculture Development Limited. For more information on these corporate connections see: Act Now! and Jubilee Australia Research Centre (2022) The New Timber Barons: the Companies Logging the Forests of PNG, Port Moresby and Sydney. 53 Global Elite Limited, Forests Database, PNGi. Available at: https://pngiforests.org/company/global-elite (accessed 4 July 2023) 54 Summit Agriculture Limited, Forests Database, PNGi. Available at: https://pngiforests.org/company/summit-agriculture (accessed 4 July 2023) ,Forests Database, PNGi, Log Exports by Licence Type, available at:
https://pngiforests.org/ (accessed 4 July 2023). 56 Global Witness (2018) A Major Liability: Illegal logging in Papua New Guinea threatens China's timber sector and global reputation, London and DC: Global Witness, at p. 13-14. 57 Forest Trends (2021) Timber Legality Risk Dashboard: PNG, https://www.forest-trends.org/wp- content/uploads/2022/01/Papua-New-Guinea-Timber-Legality-Risk- Dashboard-IDAT-Risk-i.pdf 58 PNGFA (2017) "Summary Report Papua New Guinea Forest Authority Retreat." Port Moresby: PNGFA at p. 26, 32. 59 Public Notice dated 22 February 2023. FCA CASE STUDY 1: TEN YEARS WITHOUT A CROP 22 actnowpng.org jubileeaustralia.org
