Papua New Guinea's rainforests cover about
75 per cent, approximately 340,000 square
kilometres of the country's total land area.
That abundance of high forest area contains
35 million hectares of closed forest.
The Government's recognition of the value
of rare and magnificent natural forest has
resulted in major policy changes aimed at
creating an environment for sustainable
downstream processing activities.
The Papua New Guinea Forest Authority was
formed in 1993, as a statutory corporation,
to lead the forestry reform process and
devise a programme to manage the tropical
The desire to achieve a balance between
the use of forests for both conservation
and industrial wood production, is evidenced
in an initiative in which the Government
invited the World Bank to lead a review
of the sector with the assistance of a number
of other donor countries and organisations.
The review established a number of guidelines
which included the need to ensure that when
the forest is to be used for industrial
wood production, it is managed for sustained
yield and harvested to prescribed environmental
The commercial development of the forest
resource has so far been largely concentrated
on clear felling of virgin forest for logs.
By volume, about 85 per cent of Papua New
Guinea's annual harvest is exported as logs.
This practice will be banned from the Year
2000. Contractors have been encouraged to
conduct feasibility studies into various
processing activities for the export market.
Papua New Guinea has shown the global community
that it is prepared to balance international
requirements for sustainable development
with its own need for the contribution currently
made by the forestry industry.
With this balance in the forefront of policy
making, it is intended to conserve and preserve
the natural forest for future generations.
Furthermore, it will allow for selective
logging on a sustainable basis to meet the
Government's development needs.
There are some prime opportunities for
development of downstream activities which
the Government expects to rival that of
the logging trade.
The potential for converting some of Papua
New Guinea's premium species, such as rosewood,
kwila, blackbean and taun, into high-quality
furniture and other wood products, is an
investment opportunity with a growing market.
Stocks of premium wood species will be maintained
for wood products manufacturers, so the
markets they establish in the near future
can be guaranteed of a continued supply.
International markets are establishing
requirements for all tropical wood products
to come from forest plantations and afforested
sourced areas. With Papua New Guinea reforming
its forestry policy and creating such areas
in already clear felled areas and savanna
grasslands, it will be well-equipped to
provide sound and rewarding investment opportunities.
Products made of tropical hardwood attract
top prices. Although markets do exist, few
are efficiently supplied at present, so
the ability to establish a constant customer
supply will guarantee a permanent and high
The present timber industry in Papua New
Guinea consists of more than 40 sawmills,
a plywood factory, a woodchip mill and more
than 25 furniture-making factories and joinery
shops. Many of the existing mills are small
and out-dated, but if they were all fully-operational
they would have an annual output capacity
of about 210,000 cubic meters of sawn timber.
Currently, downstream processing activities
include furniture making, plywood, flooring
and other building products.
Potential investment opportunities in forestry
can be obtained through the Forestry Sector
Manual and the project profiles being promoted
by the Investment Promotion Authority.