- A recent report examining land-conversion permits issued by the Papua New Guinea government found that 65 of 67 such licenses are controlled by Malaysian-linked companies.
- The stated purpose of these permits — Forest Clearing Authorities (FCAs) — is for creation of sustainable jobs via agribusiness and other development projects, but critics contend the licenses have been used to facilitate large-scale logging and timber exports.
- After repeated allegations of misuse of the permits, PNG’s government imposed a moratorium on new FCAs in 2023, but exports continue from existing projects.
- The 65 licenses examined by the report cover 1.68 million hectares (4.1 million acres) of rainforests, about 88% of which are categorized as ‘undisturbed forest.’
Papua New Guinea’s rainforests, which span 28.2 million hectares (69.6 million acres), are among the most biodiverse in the world, hosting an estimated 5-8% of all species. The country also has one of the world’s highest rates of communal land ownership, with around 97% of land legally recognized as being customary tenure.
Despite the ecological significance of the country’s forests, and the existence of laws to ensure customary landowners retain control of what happens on their traditional lands, Papua New Guinea also hosts a major timber trade — frequently topping global lists of tropical log exporters — with the profits concentrated in the hands of foreign corporations.
A recent report from RimbaWatch, a Kuala Lumpur-based research and advocacy organization, examined in detail how land-conversion permits facilitate the clearance of PNG’s forests, and what role the companies linked to Malaysia play in the ongoing timber trade.
The report focused on Forest Clearing Authorities (FCAs), which are permits issued by the Papua New Guinea Forest Authority (PNGFA) that allow large-scale conversions — exceeding 50 hectares (123 acres) — of natural forests for agricultural or other land-use development projects.
The stated purpose of these licenses is to create sustainable jobs and income for the country’s people via development projects, but critics say that, in practice, these licenses have been used to facilitate large-scale logging. As of 2024, one-third of the timber exported from the country came from companies operating on an FCA permit. RimbaWatch found that 65 out of 67 active FCAs are controlled by companies that are either registered in Malaysia or have Malaysian majority shareholders or directors, says Adam Farhan, director of RimbaWatch and one of the report’s authors. “This is concerning, because why does Malaysia have such a disproportionate influence over Papua New Guinea’s timber industry?”
Collectively, these 65 FCAs cover 1.68 million hectares (4.1 million acres) of rainforest, about 88% of which are categorized as “undisturbed forest,” the report says.
The control over the forests, the report contends, has fueled unsustainable logging under these FCA permits, often without delivering long-term agricultural operations.
“FCAs are ways of taking away and grabbing customary land from the owners under the guise of agribusinesses,” Samuel Kime, a landowner and activist from Sandaun province, tells Mongabay.
Kime says that companies with FCAs continue to clear-cut forests and plant oil palms in the province without prior consent and consultation with community landowners. “Without explaining the content clause by clause, the landowners, who are mostly illiterate, are made to sign off on the project agreement that consists of legal terms in English.”
PNGFA did not respond to Mongabay’s request for comment.
According to the report, 79 out of 190 individuals associated with the logging companies holding FCA licenses are Malaysian, including multiple individuals with links to politically influential families or who have previously faced allegations of illegal logging and fraud.
(A previous civil-society report, in 2022, found that 10 groups of Malaysian-linked companies were responsible for 70% of round logs exports from PNG.)
In response to repeated allegations of regulatory breaches and abuses connected to FCAs, the forest authority imposed a moratorium on new FCAs in 2023.
However, some activists dismissed the moratorium as an “empty gesture” since it did not affect existing operations. In 2024, Papua New Guinea exported 2.5 million cubic meters (88.3 million cubic feet) of roundwood, which represented 25% of the world’s tropical round log exports.
Impacts of logging
While the logging has impacted a diverse range of tree species, sources say hardwoods from the quinine tree (Petalostigma pubescens) and kwila tree (Intsia bijuga) are prime targets for logging and export, as are taun (Pometia pinnata) and Calophyllum species.
The report notes that 90% of Papua New Guinea’s timber is exported to China.
“One of the main reasons for exports to China is that there are not so many other markets for the products unless they are legally sourced,” says Johanna Michel, report co-author and deputy director of conservation organization Bruno Manser Fonds. “But it’s still quite possible that the products enter the European market from China, because they are labelled as Chinese products afterwards.”
Recently, Prime Minister James Marape reaffirmed a plan to end the export of round logs by not issuing new round log export licenses after 2025.
Pamela Avusi, report co-author and coordinator of the PNG Environmental Alliance (PNGEA), notes that species for which export is already banned, such as rosewood (Pterocarpus indicus), are still logged, and that the 2023 moratorium on new FCAs has had little effect on the timber trade. “Even after the moratorium, the volume of logs exported under FCA still escalated,” she says.
To combat illegal logging, the report authors emphasized improved transparency, accountability and monitoring from both the PNG government and the companies that already have proven records of fraud. “I think the PNGFA should be more transparent,” Farhan says. “Of the 67 FCA licenses noted in the report, we only had access to spatial data for 37, so we’re unable to dig deeper on the findings.
Michel says there should be regulations for these companies to implement their corporate social responsibility and comply with human rights with due diligence. “We also think financial institutions like banks should implement the zero-deforestation policy.”
For landowners and their communities, Kime says logging has resulted in polluted rivers and fishing grounds in communities like his. “The loggers with FCA permits have polluted rivers that the villagers depend on. They now have trouble using the water as it’s shallow due to sedimentation.”
Kime says a group of landowners and clan members from his province took a Malaysian logging company to court in October.
“For now, we are all patiently awaiting the court’s decision.” he says. “We want to win the case because if we win, it will be a victory, not only for us but for all the other landowners in Papua New Guinea.”
Banner image: A tree kangaroo photographed in Port Moresby, Papua New Guinea. Ten of twelve tree kangaroo species are found only on New Guinea Island. Image by Valerie Hukalo via Flickr (CC BY-NC-SA 2.0).
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