In 2011, PNG exported 3.5 million cubic metres of logs - making PNG the 2nd largest exporter of tropical hardwood logs in the world.
The Swiss testing and verification company SGS says it was logging on Special Agricultural and Business leases that pushed exports into record territory.
Australia's Chief Climate Commissioner, Professor Tim Flannery, warned this kind of logging has great dangers for the people and the environment in PNG.
Presenter: Pacific Business and Economic reporter, Jemima Garrett
Speaker: Australia's Chief Climate Commissioner, Professor Tim Flannery
GARRETT: PNG has just had a record year for log exports and it is now the second biggest exporter of tropical hardwood logs in the world - what is your reaction to that?
FLANNERY: Well, PNG has a problem because it is a very high emitting nation. Its in population terms, it is about a quarter the size of Australia and in land area about one tenth the size or less but it has emissions about one third as great as Australia and that is largely because of deforestation. So this is increasingly an issue for PNG and countries like it.
GARRETT: It was logging on controversial Special Agricultural and Business Leases that allow clear felling rather than selective logging that's pushed PNG into record territory. How much of a concern is that?
FLANNERY: Well, I think logging as a whole in PNG is a concern at many levels. One of the most significant, which leads to social conflict, is the nature of land tenure in Papua New Guinea. Ninety seven per cent of the country is owned by the traditional clans so they are the ones who really ultimate should have the say but of course there is a push from the government to open sources of revenue and so sometimes people are led, if you want, into signing documents and leases they may not entirely understand that lead to pretty dramatic consequences for them.
GARRETT: Much of PNG's biodiversity is still being catalogued and you yourself brought new species of tree kangaroo to the attention of the scientific world, for the first time. How likely is it that species will be lost before science has had a chance to find them?
FLANNERY: Look I am sure it is happening right now. It is an exceptionally biodiverse country. Many species have very small distributional areas, very small home ranges and I am sure they are being lost now. But, even if you don't care about that, there is a good reason for being concerned about logging in Papua New Guinea and that is that the forests give people and communities there many important assets, from building materials through to their food, bush medicines and clean water and so forth, lots of amenity. And, of course, disease! Disease incidence, is very much reflected by disturbance so if you have areas of forest that are cut down and water pooling you'll find various mosquito species get in there that will transmit diseases so the delicate ecological balance of the region is upset by logging, as much as outright biodiversity extinction.
GARRETT: Papua New Guinea has been leading a group of developing nations seeking to protect their rainforest by using carbon credits. What impact will forest clearance on this scale, have on PNG's credibility as the leader of that group?
FLANNERY: Well, look, that is yet to be seen. I think that there are genuine concerns and there are many countries now that are doing things the right way. We've seen in Brazil, for example, a real turnaround in terms of the rate of deforestation. Forests are still being lost there but at a fraction of the rate of just a few years ago so there are good models out there to help and in PNG itself there has been some really significant initiatives in times past, where people have developed these walkabout saw mills, for example, where a local community can fell a tree in the forest, process the planks there and then sell the planks for whatever money they need, which is much more profitable and sustainable for them than selling the entire forest. So, there are good models out there but you are quite right that there are concerns when you see these wholesale logging concessions being given out.
GARRETT: The Forest Industries Association in PNG argues that it creates thousands of jobs in the here and now and millions of dollars in government revenue. Companies working on these Special Agricultural and business leases say they are going to add to that by investing in new agricultural businesses such as palm oil. Isn't that of benefit to Papua New Guinea? It is not a wealthy country!
FLANNERY: I am sorry to say it, but whenever anyone mentions jobs to me, I sense a bogus argument whether it is in Australia or Papua New Guinea because very rarely is the entire accounting done. In Papua New Guinea you've got to include, for example, hours lost to illness, you'd have to include community health, women being able to make their gardens, men going out to hunt, all of that is part of the traditional economy and a very important part of the lives of many people in Papua New Guinea. So I see this jobs argument ..it is paper thin. I wouldn't put much credence on it.
GARRETT: Does Australia need to be worried about the record log exports we are seeing from Papua New Guinea?
We do need to be concerned for a number of reasons. We, of course, are part of the same biodiversity region as Papua New Guinea ,so there are kangaroos in New Guinea, they just happen to be up in the tree tops and much of our biodiversity or a similar species also occurs there. So, I guess, that is a cause of concern for biologists but also just in terms of outright emissions. We are all now trying to come to terms with living in a carbon constrained world and every nation needs to shoulder its bit of that and that includes Papua New guinea. And there are great opportunities for Australia to invest in terms of carbon credits in the region but that can only happen where there is a good legal framework. You know, a firm and clear legislative framework that you can operate within. So there are concerns and I am far from giving up hope on this but I do think there is a big job ahead of us, making sure that we get that clear regulatory framework in place, that respects local land rights and can operate within that.
GARRETT: Australia is spending $273 million on its International Forest Carbon Initiative, which helping countries get ready for using these sort of carbon credits to avoid forest destruction. PNG is one of Australia's main partners through the PNG Australia Forest Carbon Partnership. Are these record log exports undermining Australia's efforts?
FLANNERY: Look I am certain about that. I don't know what the government is thinking about that but I could just comment that there are plenty of players out there that want preserve their forests and there are a number of countries, an increasing number, that are getting on top of the problem, who would make very good trading partners. Now, my hope would be that Papua New Guinea would be right up there with the rest and would be benefitting from this but, as I say, that really is a matter for PNG and the PNG government. They need to develop very clear, very strong guidelines and a strong legislative framework in which the market can operate.
GARRETT: In the long run is PNG likely to be able to make more money from carbon credits than it is from this clear felling and raw log export?
FLANNERY: Oh, look, in the long run the most profitable way of using PNG's forests is to do it sustainably. As I said, I've seen some of these walkabout sawmills operate where local commuities can access individual highly valuable timber trees, process them on site so there is a bit of value adding there, and then sell the planks without unduly disturbing the forests. That sort of thing for timber extraction seems to me a really good model. Beyond that, of course, local communities occasionally need to clear bush for new gardens and for other purposes but there is a tremendous amount of replanting going on too on deforested lands in PNG. So, look it's a complex situation but in the longer term, sustainable use sure, is going to be infinitely more profitable than the one-off use of the forests.
GARRETT: Many organisations in PNG are working on sustainable logging accreditation - is that something that is important in the future?
FLANNERY: I really think it is. I think that is a key plank in a platform which will allow us to start using those forests sustainably but, you know, another thing I think needs to happen is really proper and full stakeholder consultation. In my experience in Papua New Guinea, villagers do understand the value of their forests, they know what comes from them. Sure, they need money for school fees and other things but once they are given the opportunity to engage with the whole process they will make the right decision, I think. So I do believe that is important as well.
GARRETT: When you see clear-felling like this going on, is there action needed immediately from the PNG government?
FLANNERY: Well, you know, it is long overdue. I have watched communities struggle with unjust provincial and national government logging related issues. I've got some very dear friends in the South East of Papua New Guinea who have been fighting an ongoing battle to preserve their forests so yeah! Action is really needed. We need that clear framework, we need people to agree on what the law actually is and then stick by it and make sure they do it properly. But we also have to remember that PNG is a young country, it is younger than I am. It will take time to get things right but I do have great faith in the people of Papua New Guinea. I think even the legislators and so forth, there are some very, very bright people up there and I hope that given half a chance that they will be able to pull this together.