Constitutional and Law Reform Commission of Papua New Guinea

CRITIQUE OF THE WORLD BANK'S

TROPICAL FORESTRY ACTION PLAN

PAPUA NEW GUINEA

BRIAN D. BRUNTON

Chairman of the Law Reform Commission of Papua New Guinea

WORKING PAPER N0.26
MARCH 1990

The views expressed in this paper do not represent the final views of the Commission. This paper is intended to stimulate awareness in the area of resource conservation generally, and specifically to promote public debate on the pressing problem of the future of Papua New Guinea's rain forests.









l. Introduction: Setting the Basic Values.

The basic values in this critique are:

* the tropical rainforests in Papua New Guinea are part of a global eco-system which sustains life on this planet.

* they are unique, and support unique life-systems: flora, fauna, and
Melanesian social formations.

* as an essential component of the Papua New Guinea environment the rainforests are to be conserved and used for the collective benefit of all Papua New Guineans, in trust for future generations.

* the rainforests are not a commodity to be exchanged or transformed into capital. Their value is not exchange value, but properly characterized as use value, as a strategic component in maintaining global, national and local eco-systems.

* any exploitation of the rainforests, transformation of their social utility from use value to exchange value, must be subordinate to the strategic ecological role of the rainforests.

* any exploitation must take place by the use of skills and resources available in the country and primarily through the use of Papua New Guinean forms of social organisation. All laws and forms of exploitation should recognise the priority of customary tenures and the customs of the People.

* the priority of customary tenures creates special conditions, which have to be met first, if the primacy of the rainforest's strategic role is to be maintained. The special measures have a priority over any commercial exploitation.

* provincial governments are an important link between the State and customary land-owning groups and part of the political reality of Papua New Guinea. In the long run, attempts to subvert them are likely to isolate and alienate customary landowners which could well contribute to rebellion and bloodshed. This is particularly so when foreign investors are able to buy off landowners, at the expense of other groups, or wider provincial interests.

* there should be a strict control of foreign investment, and the State should actively participate in any forest industry.

* any use made of the rainforests should be seen as part of a complex of relationships, in which the environment, land-use, resources, and social formations are an integrated part of a single system, which should be administered as such.

These values are consistent with the National Goals and Directive Principles in the Constitution, and should form the basis of future rainforest policy.

2. Overview.

There are two broad and major criticisms of the World Bank's Tropical Forestry Action Plan Review for Papua New Guinea (TFAPR).

The first criticism concerns the general status and political disposition of the World Bank itself. The World Bank is committed to capitalist economics and the profit motive. There is a fundamental contradiction between profit and conservation as they relate to rainforests, and the choice has to be made for conservation. This contradiction is apparent throughout the TFAPR.

The second criticism is the statist orientation of the TFAPR, and its relative neglect of the community.

The TFAPR contains some ideas that with re-working could be credible, but it is at best a potpourri that does not withstand any substantial scrutiny. The Review is deeply flawed by its failure to confront the fundamental contradiction between a money-based profit-orientated economic system and its values on the one hand, and wider national, global, environmental, ecological, customary, political and social needs on the other hand.

Private capital is formally decentralised, that is the ownership is capable of being shared amongst many people, however in practice the control of capital is highly centralised within a grouping of entrepreneurs and managers. The prime motivation of private capital is profit-growth, although in the short-term capital may be prepared to forgo a higher rate of profit, if that would result in the long-term gain. The consequences of the concentration of power, and the crudeness of its basic motivation, are of major importance in the conservation and management of rainforests. Put simply, profits and conservation are contradictions, although much energy is expended to show that this is not so.

It follows that in accordance with the prime goals set by the Constitution, capital and the profit motive cannot be allowed to become the major influence in the formation of any code to regulate the rainforests. Certainly, the interests of capital cannot be allowed to predominate, either directly or indirectly as they do through the TFAPR. Those interests may be allowed to participate after policy has been formulated and then only under limited conditions. The conditions are that private venture capital has a minority influence, and that there is strong community control over the rainforests. Neither of these conditions exists in Papua New Guinea at present.

The Review fails to properly identify and specify the forces that pose a threat to the rainforests in Papua New Guinea. In part this is due to the status of those who carried out the initial research, but it may also be attributed to a more fundamental political orientation of the World Bank itself, which inhibits accurate analysis because of its own position in global politics.

The forces that threaten the rainforests in Papua New Guinea, which were not specified or examined, are those of:

* capital based in the First World countries seeking access to Papua New Guinea's rainforests, most notably from Japan, but to a lesser extent from the United Kingdom, Western Europe, Australia and New Zealand.

* capital based in South East Asia seeking access to Papua New Guinea's rainforests for the purpose of buying logs, which are exported to the First World, or to Newly Industrialised Nations within the region for processing.

* national capital, or national capital in the process of primitive accumulation, seeking to export logs to be processed elsewhere.

* customary land-owners, and peasant-farmers seeking to clear land for subsistence farming due to population growth, or to plant cash crops, or to acquire a capital sum to finance some commercial venture; or to acquire a short-term income flow to meet immediate needs, such as taxes or school fees.

The TFAPR has a superficial attractiveness. Its very title "Tropical Forest Action" co-opts buzz-words that placate the environmentally conscious electorates in the West, and mass movements arising in the wake of the implosion of Stalinism in Eastern-bloc countries.

It has other superficially attractive ingredients such as "sustained yield management", the "Land Use Research Council", the "National Forestry Board", "specialised standing committees" with their "funding base determined boards". A "new Forest Service" with a "new financial framework, "World Heritage Proposals", conservation training for local leaders, support for NGO's engaged in forestry and conservation activities, and the strengthening of forest management capacity.

But it also contains much of the sort of medicine we have come to expect from the World Bank, the IMF and the other US dominated multilateral agencies: a neo-classical underpinning of essentially economistic structures that do not disclose the major premises on which they rest, an emphasis on exploitation, and the sort of cobbled-together ad-hockey that is easily concealed behind the rolling phrases of modern management, statistical tables, and a lengthy bibliography. The essence of the multilateral agency philosophy is that Third World nations should remain suppliers of raw materials and should not attempt to compete with the First World in processing and manufacturing.

The TFAPR has a more cobbled nature than most reports of this nature because it was written by a group of consultants, none of them Papua New Guinean, and the tensions between their disciplines can be readily detected. The main tension is between the economists, and the environmentalists and conservationists.

3. Analysis Without Synthesis.

The TFAPR is a sectoral study which attempts to deal with a subject-matter that is holistic and integrated broadly into physical and social existence. It avoids a synthesis of the whole, preferring an analysis of selected topics. It follows essentially a bureaucratic-statist model, with an emphasis on "managing" six defined "problems".

These are the "problems" (in the order of priority given in the TFAPR) of "resource assessment", "managing the resource", "maximising returns from logging", "industrial development prospects", "conservation and land use", and "institutional and human resource development".

The reason behind the preference for analysis, rather than synthesis, lies in the political economy of the World Bank. The World Bank is a tool of the Western capitalists. A synthesis of the relationships between the tropical rainforests, Third World needs, and Western capital would reveal the real basis of the values of the World Bank and those who control it. World Bank reports are therefore by their very nature only a partial truth, as they cannot be otherwise.

4. The Commoditisation of Tropical Rainforests

The emphasis and direction of the TFAPR is immediately apparent. It treats tropical rainforests as a "resource", to be "assessed", "managed", the profits from which are to be "maximised", through some limited form of industrial development. Conservation and human resources are thrown in at the end almost as an after-thought. Is this an exaggeration? Yes it is, but it illuminates the preoccupation of the TFAPR in treating tropical rainforests as a commodity, or as the TFAPR refers to them "a resource", and also the unsophisticated nature of the sectoral approach.

The concept of "rainforests as a resource" forms the otherwise undisclosed fundamental premise of the TFAPR. It is a premise that has to be deduced by a close reading of the TFAPR, because the World Bank does not readily disclose the true nature of its ultimate political agenda.

In essence the premise follows the basic notion of rainforests as a commodity, which have to be conserved because one should not kill the goose that lays the golden egg, and because it is recognised that there are other long-term difficulties with uncontrolled exploitation. The TFAPR treats tropical rainforests as a resource on which to base an export industry.

Support for these assertions is found in the lack of policy analysis in the TFAPR, and its failure to deal with fundamental issues in anything like arealistic or credible manner.

5. Sustained Yield Management: concept without content.

The issue of the practical implementation of the sustained yield management of tropical rainforests is treated superficially. That it is not possible to reproduce the eco-systems within the tropical rainforests is not faced squarely. There is no discussion of how it is possible to have an export timber industry based on logging when the sustained yield management of Papua New Guinea's rainforests is no more than platitude, although the TFAPR acknowledges, with Leslie (1977), that tropical rainforests cannot be reproduced. But it does not deal with this issue, which is at the heart of the dilemma faced by the people of Papua New Guinea.

Even if the idea of sustainability is used to refer only to silviculture, we are still left with the fact that there is no sustained yield management of forest resources in Papua New Guinea. The effort to plant logged-over ground has been poor. Tree plantations have failed with some 35,896 ha (an optimistic figure; Table 13) said to be planted in 1988, while total logging concessions in the same year were 1,590,00 ha (Table 7).

6. World Bank Recipe: Lift Export Ban on Logs.

The Government's current policy of phasing out logging is deprecated by the TFAPR in a thinly disguised de-bunking of Papua New Guinea's attempts to protect its resources:

"(The Government) has already imposed a ban on the export of logs of some premium species, and has announced new measures to protect the domestic market. The Government is also considering introducing a complete ban on log exports for all new concessions and, in time, for the whole sector. Given the real constraints on successful industrial development, the report contends that such a ban would not achieve its objectives and could lead to a serious misallocation of resources. The report cautions against the adoption of further trade protection measures to favour domestic processing" (Executive Summary v-vi).

In short, Papua New Guinea should not have grandiose ideas about local manufacturing, when its role in the global economy is that of a supplier of raw materials: that is standard World Bank medicine for Third World Countries.

But to become too closely involved in the political economy of Papua New Guinea as a supplier of raw materials may mislead (although it is not entirely irrelevant) because it distracts from the main argument against the World Bank case.

The attack by the TFAPR on present government policy which sought to ban the export of logging, is really an attack on the promotion of wood-based industrialisation. The attack takes the form of a neo-classical critique of the costs of processing as against exporting logs. This type of economistic analysis is both beguiling and misleading.

The reason why Papua New Guinea needs to stop exporting logs is not because it could earn more money by selling processed timber. Papua New Guinea must stop exporting logs because logging is out of control, because the environment is in jeopardy, because there is no sustained yield management, because we cannot trust the logging companies, because we cannot control traditional landowners, because the present forest bureaucracy is institutionally weak and there are very few controls in effect over timber companies.

Papua New Guinea simply does not have the capacity to control and monitor logging activity, whether it is being carried out by large foreign companies under a Timber Rights Purchase, or whether it is being done by customary groups under a declared Local Forest Area.

The reason why Papua New Guinea needs to process its raw materials is to provide employment for its growing population of unemployed youth; to create small artisan-type industries in rural areas; to retain some of the value-added profit in the country not only for macro-economic reasons, but for microeconomic, and socio-political reasons.

The argument that under current market conditions it is more cost-efficient to sell logs than it is to sell processed timber and therefore the export of logs should continue, is irrelevant, misleading, intellectually bankrupt, and coming from an organisation like the World Bank, whose recommendations are taken seriously by policy-makers in Papua New Guinea, very dangerous.

The policy which was in place before the TFAPR, of gradually implementing a ban on the export of logs, was correct in the light of the critique of Commissioner Barnett. If anything has altered since Judge Barnett made his Report, things have got worse: the export tax on logs has been lifted, the instruction by the' Prime Minister to stop the declaration of Local Forest Areas has been withdrawn, and the Medium Term Strategy of issuing more Timber Rights Purchases (more logging) is being implemented with gusto.

The effect of the World Bank's recommendation has been to strengthen the hand of the logging industry, and to weaken the Papua New Guinea Government's resolve to conserve the rainforests.

7. Political Idealism.

The TFAPR recommends establishing a National Forestry Board and four Regional Forestry Boards. The idea of a two-tiered arrangement for the control of the rainforests is sound, but the rejection of provincial control over rainforests in favour of the creation of regional boards is idealistic. It is idealist because it ignores the political reality of provincial government in Papua New Guinea. At best it underestimates the amount of political support that exists for the provincial system. At worst it turns a blind eye to the civil war that has been fought over the past eighteen months in the North Solomons. The TFAPR prefers to forget that the constitutional framework of centre and provinces is firmly established, and is based upon a geographic and political materiality which has been hammered out in the experience of Papua New Guinean political history. The World Bank proposals on regional control are not only foolish, in the context of the depth of political feeling in some provinces about their rainforests, they are suicidal.

Provincial Governments were formed at Independence on existing colonial boundaries for two reasons. One, they were the political units that had been found during the colonial period to maximise efficient public administration. Secondly, after Independence the People showed that they identified politically with their Provinces. This identification is now firm, and cannot be undone without resistance. Recent events in the North Solomons Province confirm this.

Further, the legislative model developed since Independence has begun to take account of the constitutional reality of Provincial Government. This model, first used in the Education Act, has more recently been used in the Physical Planning Act. The model sets up at national level a representative cross-sectoral board to advise the National Minister. Such a model reduces the risks from patronage and cronyism, and will make bribery and corruption more difficult. A similar model is used at provincial level, and the relationships between the National and Provincial boards are provided for in the legislation. Separate from these executive and administrative structures is a system of tribunals for conflict resolution. There is no mention in the TFAPR of the new Physical Planning Act, or the trends that the Act has set in motion.

The argument that provincial governments have set up some regional structures misses the point that these were initiatives by the provinces themselves, they are limited in function and in choice of action by their confederate nature. They are bottom-up rather than top-down structures.

The main criticism of Provincial Governments comes from persons and bodies that represent foreign capital, comprador elements that are closely associated with foreign capital, right-wing think-tanks, their carefully selected conservative academics, and the big-business lobby. It would appear that these were the sources of the World Bank's commitment to regionalism. Foreign capital sees Provincial Government as a political and economic handicap. Provincial governments are viewed as another level of government that has to be bought (in terms of influence). and paid for, through taxes. The proposals for regional government are proposals for larger units which approximate the markets created by foreign importers and exporters, and they further the interests of those committed to the export enclave in Papua New Guinea. They weaken local controls, such as those that have been put in place by the Manus Provincial Government over the local exploitation of forests to protect its fragile rainforest eco-systems, and to prevent bloodshed.

8. The Primacy of Customary Land-Tenures.

There is so little in the TFAPR about customary land tenures that one can wonder if the consultants were in the right country. The problem created by the TFAPR is of its own making. The strictly sectoral approach allowed the consultants to dismiss "larger landholding and land use issues" as "beyond the scope of this review". As has been pointed out, the primacy of customary tenures forms one of the foundations on which forest policy must rest. But of course, customary tenures are the antithesis of capitalist notions of land as a commodity, individual ownership and alienation. It is not surprising that a review whose major concern is the treatment of forests as a commodity, was unwilling to spend too much effort on considering how customary tenures could be adapted to conserve rainforests, and allow appropriate harvesting.

It is now known that the World Bank has funded a major project called the "Land Mobilisation Scheme". Some seventeen million kina is involved in these loans. A report has been circulated amongst some government departments, and the Law Reform Commission is evaluating that document. Whether the Land Mobilisation Scheme is an effort to help conserve customary tenures, or an attempt to commoditize customary land so as to allow capitalist development unhindered by the costs of the customary system, remains to be seen. However even at this stage it is possible to lay down some basic principles about the relationship between customary tenures and rainforests.

The essence of the nature of customary tenure is in its local application. Customary tenures are important because they are part of the way of life of a particular people, in a particular locality. They are best dealt with at district or provincial level by persons from that locality and from those levels of government. It is idealistic to think that they can be administered from above, that is from a regional or national level of government. It follows therefore that the basic rainforest administrative institutions and the conflict resolution mechanisms must be located at least at provincial level, but with some capability at district level.

That there needs to be district and provincial administrative and conflict resolution institutions becomes apparent from the reality of the impact of an essentially open capitalist economy on rainforest landowners who have virtually no other way of forming capital, apart from cutting down their trees. Further, there is a number of incentives that ensure that the trees are felled. Perhaps there is no greater incentive to cut down trees than the need to pay for school fees, and other taxes. The user-pays principle, a favourite with the Chicago School, the World Bank and the IMF, has been consciously used to force peasants deeper into the cash economy. Other incentives come from the market economy itself and the need for consumer goods. These are powerful forces, and if there is to be any control at all over peasant harvesting of the rainforests, then the institutional structures at district and provincial level need to be strong.

The nature of these institutional structures will be two-fold. First there will need to be an ideological commitment by the people to the conservation of their rainforests. This would involve a political education campaign, and positive reinforcement, by way of economic rewards. Mere green rhetoric will have little effect on landowners who are driven by economic imperatives. The incentives for conservation could take the form of "eco-tourism"; small-scale wood-based artisan workshop production; housing construction lease-back arrangements for allowing areas to remain unexploited; and employment and training of foresters, rangers and inspectors from land-owning groups.

There will need to be a physical control mechanism to ensure that rainforest policy is followed at local level. This will need to be located below the provincial level of government, perhaps at district level, but also to manage specific geographic areas of forest; for want of another name I call these Rainforest Councils. The Rainforest Councils would be voluntary organizations comprising representatives of the land-owning clans, and government foresters within a specific area. They would have the job of administering provincial policy in their area, policing the local regulations, acting as an agent for provincial authorities, and initial conflict resolution.

Much more work is required in developing the legal form of customary groups. The Land Groups Act provides the basis of a legal form, but little work has gone into the institutional strengthening of this form. Instead much work has gone into forming so-called "land-owning companies" under the Companies Act.

While a Land Group is entirely regulated by custom, and accessible to local people in terms of the customary rules which govern the group's land and the customary procedures in the Land Disputes Settlement Act, Land-owning Companies are creatures of modern law, and alien to customary values. Invariably the Land-owning Companies have been put together by lawyers, accountants and shady businessmen in the cities for the purpose of making quick profits at the expense of the land-owners. There is a need to put a stop to the incorporation of Land-owning Companies, to insist that those that have already formed are either deregistered, or converted into Land Groups, or become wholely-owned by Land Groups.

In future the basic land-owning entity for all rural development should be the Land Group. Land Groups, as the basic land-owning entity, may own companies, or businesses which have other legal forms. But the land must be ultimately controlled by the People, through the People, for the People, using concepts that are familiar to the People.
Land-use decisions that are made without local participation are unlikely to be effective. There is then a need to integrate rainforest management with physical planning and land-use decision-making at least at provincial level. The enactment of the Physical Planning Act goes some of the way towards this objective, but that legislation is still new and the Law Reform Commission is still evaluating its likely impact into conservation and resources. What appears to be important is that there is now a model, an opportunity, to allow customary land-owners to have an imput into planning at a local level.

9. Institutional Strengthening.

There can be little serious quarrel with the TFAPR's recommendations to strengthen the institutions which research, educate and administer on behalf of the rainforests. As a matter of emphasis more attention could have been paid to building the "new Forest Service" around customary land-owners, so that landowners have access to the jobs that arise from conservation and husbandry of the trees. This would also be important so as to build a cadre of rangers/foresters based upon families and clans from the protected areas. There is a need to build up not only technical expertise, but a tradition of tree conservers, that can be passed from one generation to another.

The main problem which needed to be faced in the TFAPR is the continual erosion of public institutions in Papua New Guinea because of the effects of conservative macro-economic policy. There is a contradiction between those multilateral institutions which urge institution building and strengthening on the one hand (The World Bank), with those that are continually urging the curtailment of public expenditure, and the holding down of public sector wages and conditions of service (the IMF). The public service of Papua New Guinea has been subjected to continual budget cuts for the past twelve years; the real purchasing power of wages has been halved; many parts of the public sector are run-down and demoralised. This is particularly so with lower and middle level extension and inspectorial staff in rural areas. The Department of Forests is a classic example. It has been a minor department with no bureaucratic clout, and little bargaining power in the division of scarce resources.

There was a need to confront this contradiction and address the wider issues, or else the recommendations for institutional improvement are likely to last just as long as the loans are in currency.

10. Secrecy.

The TFAF'R on its cover carries the inscription "CONFIDENTIAL, FOR OFFICIAL USE ONLY, This document has a restricted distribution and may be used by recipients only in the performance of their official duties. It contents may not otherwise be disclosed without World Bank authorisation".

The TFAPR has not been made available to the public of Papua New Guinea, although parts of it have been leaked to one of the national newspapers. The issues discussed in the TFAPR are of vital concern to all Papua New Guineans, yet the People have been kept uninformed. To some extent this is due to bureaucratic habits within Papua New Guinea, which tend to rely overly on secrecy, and keep the People in the dark. But the secrecy of the World Bank legitimises the predilections of our own bureaucracy.

Events are moving fast. In April 1990 a meeting will be convened in Port Moresby of the prospective donors from the governments of other countries. The fate of Papua New Guinea's rainforests is likely to be decided by a small group of largely foreign technocrats with little or no debate in the country at all.

This is objectionable on several grounds, not the least for its impertinence, and is fundamentally undemocratic.

The veil of secrecy around the TFAPR is unnecessary. It does not contain facts which were not known before. The function of the veil is to conceal a mediocre and one-side discussion of policy issues, that in a democracy should be exposed to criticism. The Government of Papua New Guinea should insist, as a condition of all future World Bank Reports, that interim and final reports are laid before Parliament.

10. Conclusion.

It is difficult to escape from the conclusion that the purpose of the TFAPR was to throw K75 million at the rainforests in Papua New Guinea, in the hope of placating the environmentalists, or of salving consciences. Certainly large amounts of money will be required if appropriate heritage programmes, institutional building and other useful developments are to go ahead.

But the rainforests present the People of Papua New Guinea with no choice. At present the nation does not have the capacity to safeguard the rainforests. It needs time to reorganise existing institutions, and to develop new ones. The export of logs has now been stopped in Thailand, Malaysia, Indonesia, and the Philippines. The proposals of the World Bank TFAPR to continue the exporting of logs from Papua New Guinea are irresponsible, and should be rejected by the Government of Papua New Guinea, and by prospective donors. The TFAPR should not be accepted in its present form.