World Bank Gets Its Way on Forests, to the Benefit of Papua New Guinea


Following are two items which relate the resolution of the conflict between PNG forest policy and World Bank loan guarantees. PNG forest policy came into compliance with past promises through the introduction by the Prime Minister of a Forestry Amendment bill. Specifically, concerns over the forestry board composition were resolved. This is the third time in four years that PNG NGOs and international NGOs have worked together with other interested parties to defeat timber industry sponsored attempts to weaken PNG forestry legislation. All that wrote letters, lobbied officials and otherwise took a conservation stand deserve congratulations. Following are two items from PNG newspapers posted at the new UPNG Journalism web site (which includes other PNG news) at:

Title -- 248 ECONOMY: World Bank gets its way on forests
Date -- 9 October 1996
Byline --Neville Togarewa
Origin -- Niuswire
Source -- Post-Courier (PNG), 9 October 1996
Copyright -- Post-Courier
Status -- Unabridged


By Neville Togarewa

Parliament yesterday passed the controversial Forestry (Amendment) Bill 1996, paving the way for the World Bank to release the second tranche of US$25 million to fund the Government's economic recovery program (ERP).

The Bill, introduced by Prime Minister Sir Julius Chan, was passed on the voices after the Government defeated proposed amendments by Milne Bay Governor Tim Neville by 38 to 24.

All the Opposition MPs and Governors present - except the Southern Highlands Governor Dick Mune - who occupy the middle benches separating the government side from the Opposition benches, voted against the Bill.

The program included a loan from the World Bank of US$50 million for 1995/96 and a standby facility from the International Monetary Fund for balance of payment support. The loan's first tranche of US$25 million was fully drawn down at the end of 1995 after the Government had met all the bank's conditions.

Sir Julius said there had been "a long, hard tussle" between the Government and the World Bank.

"There has been a considerable strain between us and the bank .... The whole structural adjustment program with the World Bank and the IMF has resolved around the forestry issue," he said.

While the government was determined to protect Parliament's integrity and the nation's sovereignty from being compromised, he said, Cabinet had decided to maintain the structural reform program by passing the amendments to the Forest Act as proposed by the World Bank.

"A number of the bank's requirements impinge on legislative matters and the process of decision-making of this Parliament. At times I have wondered whether our international donors always appreciate the roles we have been elected to fulfill. I have wondered if they fully understand the way our democracy functions," he said.

He said, however, that the release of the second tranche was not the central issue, adding he was convinced that the government's actions had been "impeccably correct".

"I am sure Members will agree that the release and use of the US$25 million - the equivalent of a fornight's wages bill for our public service - could now be easily accommodated within our new revenue measures," the Prime Minister said.

"But it can no longer be a matter of protecting our pride at the risk of continuing aggravation of an influential international donor. We have come to terms with a somewhat unpleasant fact - failure to accede to the bank's demands would place our long-standing credibility and standing at risk. In an independent world where economic reputation and international standing are valuable commodities, it is now time to accept."

Changes to the compositons of the forestry board means there will now be eight members who will elect among themselves a chairman and his deputy. The Act has been further amended to increase the quorum for a board meeting from four members to six.

The board will include the managing director of the Forest Authority, secretaries of Finance and Environment and Conservation, president of the Forest Industry Association, president of the Association of Forests, a provincial administrator representing provincial governments and one representative each for NGOs and landowners. All members will be appointed by the NEC.


Title -- S73 FORESTRY: PNG govt repeals forestry bill
Date -- 9 October 1996
Byline -- Kevin Pamba
Origin -- Niuswire
Source -- The National (PNG), 9 October 1996
Copyright -- The National
Status -- Unabridged

By Kevin Rali Pamba

PORT MORESBY: The Papua New Guinea government yesterday finally succumbed to World Bank pressure by repealing the Forestry (Amendment) Bill after stubbornly standing by it since its passage in July.

The World Bank had told the Government that the release of the second tranche of the economic recovery loan worth US$25 million (K33m) was subject to the repeal of the legislation.

Prime Minister Sir Julius Chan, who presented the new amendment instead of Forest Minister Andrew Baing, said the US$25 million was equivalent to a fortnight's wage of the public service and was not necessarily needed. But it was a case of protecting the image of the country and its standing in the eyes of international lending agencies and the world community.

Although former Forest Minister and Milne Bay Governor Tim Neville suggested changes to certain aspects of the new amendment, the government used its numerical strength to quash that. The formality of the third reading of the amendment will be done today.

Opposition Leader Roy Yaki said the Forest Minister had stubbornly stood by the amendment as if it was "really necessary."

"If the Government swallowed its ego and faced up to realities, we would not have been going around in a vicious circle," he said.

However, he clarified that the opposition supported the right to defend national sovereignty and integrity.

The Prime Minister revealed upon questioning from Mr Yaki that the July bill had not yet been certified as a law because the minister "had not given notification for its gazettal."

Therefore, he said, yesterday's amendment superseded the July bill.

Mr Yaki said the non-notification of the bill in the gazette was done purposely by Mr Baing, knowing that it would be repealed soon.

Manus Governor Stephen Pokawin pleaded to the ministers to "let this be the first and last such incident."

He said it shows that Parliament was not used for its intended purpose where ministers brought legislations only to be thrown out in the next session. This, he said, undermined and questioned the integrity of Parliament.

Papua Niugini Niuswire

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