Bougainville Economic News: What is the future for the Torokina oil palm project ?

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“Even though PNG is considered one of the smaller palm oil producers by world standards, palm oil represents one of the country’s most important cash crops, accounting for around 40% of agricultural export earnings over the last decade.

Furthermore, research by ITS Global Consultants shows that incomes associated with palm oil cultivation and processing have risen steadily over the last 10 years, with smallholder returns from palm oil being almost 10 times those from cocoa.”

While the palm oil industry in Bougainville  has great potential to foster economic growth, environmental and social concerns have come to the fore.

See below a response to this report :An Open Letter about Scientific Credibility and the Conservation of Tropical Forests

Download report here The Economic Benefits of Palm Oil in PNG(2011)

Torokina oil palm disputed by Bougainville landowners

On the 15th of January the Post-Courier reported it is full steam ahead for the controversial Torokina Oil Palm plantation on Bougainville. But now evidence has emerged that the necessary landowner permissions have not been obtained and local people are not happy.

In a letter to the Department of Lands locals people accuse the Bougainville government of fast-tracking the Incorporated Land Group process and not dealing with the their concerns. The letter demands that ILG certificates not be issued.

Is this another case of President Momis pushing through large-scale resource projects to enrich big corporations?

The beneficiary of this project is Hakau Investment Limited owned by Henry Chow and run by his son Fabian. The Chow dynasty have been awarded a range of government grants for projects on Bougainville. To conduct a feasibility study into oil palm at Torokina, they were awarded K10 million in 2010-11.

But landowners remained concerned. Palm Oil has a global reputation for harming the environment, damaging land, and enriching big business interests, at the cost of landowning communities.

 

TOROKINA OIL PALM NOT A FAILED PROJECT
BY JENNIFER NKUI

The Torokina Oil Palm Project according to the chairman of Beko Incorporated Land Group Peter Tsuremai is not a failed project as assumed by some leaders as well as Bougainvilleans.
In an interview with New Dawn Fm yesterday, the chairman pointed out strongly that the first stage of the Torokina Oil palm project which is feasibility studies on the project site is completed by Hakau Investment who won the contract through the tender process.
He said all this talk that the Torokina Oil Palm project is a failed project is not true because the process on the project is still continuing.


He added that the project is now into its second stage and work on the second stage of the project will progress after the presentation of ILG certificates to the remaining 6 ILG’s in Torokina.
Mr. Tsuremai stressed that Torokina is the first district in Bougainville to have this opportunity with the presentation of ILG certificates under the Incorporated Land Group Rights.


He explained that there are a total of 8 clans who are involved in this oil palm project because these 8 clans own the large landmass in Torokina.


He said all these clans want the project to progress and there is no reason to say that there is no support for this project.
According to Mr. Tsuremai, the project is a multi-million kina project and with it sure to come big developments and change to the district.


Therefore, he is of the firm believe that Torokina will be well off and the people in Torokina are happy especially in terms of infrastructure development, wharf, airport and other developments must take place in Torokina District.

Background

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Papua New Guinea may be one of the smaller palm oil producers, however it is unique in that it only has two producing companies, both of which are 100% certified to the RSPO standard

Papua New Guinea occupies the eastern half of the world’s second largest island just 140 kilometers north of Australia. The island is rich in natural resources with 80% of its population living in rural areas and relying on agriculture as its main source of livelihood.

Even though PNG is considered one of the smaller palm oil producers by world standards, palm oil represents one of the country’s most important cash crops, accounting for around 40% of agricultural export earnings over the last decade. Furthermore, research by ITS Global Consultants shows that incomes associated with palm oil cultivation and processing have risen steadily over the last 10 years, with smallholder returns from palm oil being almost 10 times those from cocoa.

The oil palm was first introduced to Papua New Guinea at the end of the 19th century. However, it wasn’t until the 1960’s that oil palm plantations were converted into large commercial developments.

According to the Index Mundi’s 2013 figures, PNG ranks sixth in global palm oil production, after Indonesia, Malaysia, Thailand, Columbia and Nigeria. Its palm oil production is estimated at 630 000 tones for the current year, representing less than 1% of global production. While its entire industry presently rests on 150,000 hectares of land, some 5.1 million ha have been identified for development.

The palm oil industry in Papua New Guinea is structured around a small number of large companies that cultivate and process oil palm fruit on estate developments. Their palm oil industry is unique in that the two major producing companies – New Britain Palm Oil and Hargy Oil Palm- as well as all associated mills, are environmentally accredited through the RSPO.

While the palm oil industry in Papua New Guinea has great potential to foster economic growth, environmental and social concerns have come to the fore.

In recent years some companies – particularly logging firms – have been exploiting a loophole in national law in order to fast track supposed agricultural development as a means to obtain timber. According to a report by Greenpeace, these companies use palm oil licenses as a cover to apply for Special Agricultural Business Leases (SABLs) which would allow them to bypass established laws and restrictions on industrial logging designed to reduce the unsustainable harvest of timber.

As a result, the government has placed a moratorium on such developments whilst a commission of enquiry takes place. In the mean time, Papua New Guinea palm oil producers continue to compete on the global market by competing on quality rather than quantity.

An Open Letter about Scientific Credibility and the Conservation of Tropical Forests

 See link version for all corrections
To whom it may concern:
As professional scientists employed by leading academic and research institutions, we are writing to alert the general public about some of the claims and practices being used by the World Growth Institute (WGI) and International Trade Strategies Global (ITS), and their affiliated leadership. WGI and ITS operate in close association. ITS is owned by Alan Oxley, an Australian industrial lobbyist, former trade representative, and former Ambassador who also heads WGI. According to its website
ITS also has “close associations” with several politically conservative US think tanks, including the American Enterprise Institute, the Competitive Enterprise Institute, and the Heritage Foundation. In our personal view, WGI and ITS—which are frequently involved in promoting industrial logging and oil palm and wood pulp plantations internationally—have at times treaded a thin line between reality and a significant distortion of facts. Specifically, we assert that:
 
ITS is closely allied with, and frequently funded by, multinational logging, wood-pulp, and oil palm corporations. The financial supporters of ITS include parent corporations producing paper and wood products under the aegis of ‘Asian Pulp &Paper’, among others.
 
Alan Oxley and ITS have often lobbied in favour of Rimbunan Hijau one of the world’s largest industrial logging corporations. Rimbunan Hijau has been repeatedly criticized for its environmental and human-rights impacts in Papua New Guinea
 
WGI frequently lobbies public opinion on the behalf of Sinar Mas holdings, a conglomerate of mostly Indonesian logging, wood-pulp, and oil palm companies that includes Golden Agri Resources, a Singapore-based firm. One of these companies, known as ‘SMART’, could face expulsion by the Roundtable on Sustainable Palm Oil, an industry-led trade group, for “serious non-compliance with the RSPO Code of Conduct” with respect to its environmental and social sustainability guidelines
 
In an interview with Malaysia’s The Star  newspaper, in which he strongly advocated further oil palm expansion in that country, Mr Oxley refused to answer a direct question as to whether he or WGI was supported by the Malaysian palm oil industry. He dismissed this question as being “immaterial”
 
We believe that WGI’s financial supporters include many of the same industrial sectors for which WGI regularly advocates.
 
While routinely accusing several environmental organizations and the Intergovernmental Panel on Climate Change (IPCC) of bias and scientific misrepresentation, WGI and ITS have, in our opinion, advanced a range of biased or distorted arguments themselves. For example, consider an ostensibly “independent” audit
from ITS that sought to exonerate Asian Pulp & Paper from claims of illegal and damaging logging practices in Sumatra, Indonesia.
This audit appears to be far from objective in scope, especially given the clear financial links between these two entities, which brings into question its claims to be “independent”. Among other claims, the ITS audit broadly understates the scope and gravity of forest loss anddegradation in Indonesia, despite that nation having among the world’s highestabsolute rates of deforestation and being ranked 7 th worst out of 200 nations in termsof net environmental damage, according to a recent analysis
 
 It also suggests that the palm oil and pulp and paper industries are not important drivers of deforestation andgreenhouse gas emissions in Indonesia. Yet recent research has demonstrated thatmuch of the oil palm expansion in Indonesia between 1990 and 2005 came at theexpense of native forests (many plantation owners favor clearing native forests overalready-degraded lands as they use revenues from logging to offset the costs of plantation establishment
 
Moreover, the rapid expansion of pulp plantations is aserious driver of native-forest loss in both Sumatra and Kalimantan, Indonesia.
 
A recent technical report by ITS concluded that “There is no evidence of substantialdeforestation” in Papua New Guinea a conclusion strongly at variance with quantitative, remote-sensing studies of forest conversion published in the refereed scientific literature
 
Reports from WGI and ITS routinely claim that newly established oil palm plantations sequester carbon more rapidly than do old-growth rainforests. This claim,while technically correct, is a distraction from the reality that mature oil palm plantations store much less carbon than do old-growth rainforests (plantations store just 40-80 tons of biomass aboveground, half of which is carbon, compared to 200-400 tons of aboveground biomass in old-growth rainforests
 
WGI and ITS reports have also in our view dismissed or downplayed other important environmental concerns, including the serious impact of tropical peat-land destruction on greenhouse gas emissions and the impact of forest disruption on threatened species such asorangutans and Sumatran tigers
 
Furthermore, WGI and ITS, we believe, havefailed adequately to recognize that many forests of high conservation value are beingdestroyed and fragmented by plantation development —a process that is mostlydriven by corporations, not small holders.
 
WGI, ITS, and Alan Oxley frequently invoke “poverty alleviation” as a key justification for their advocacy of oil palm expansion and forest exploitation indeveloping nations, and it is true that these sectors do offer significant loca lemployment. Yet forest loss and degradation also have important societal costs.There are many examples in which local or indigenous communities in the tropicshave suffered from large-scale forest loss and disruption, have had their traditional land rights compromised, or have gained minimal economic benefits from theexploitation of their land and timber resources. Such costs are frequently ignored in the arguments by WGI, ITS, and Alan Oxley.
 
One of the most serious misconceptions being promulgated by WGI and ITS in ourview is that “two-thirds of forest clearance is driven by low-income people in poor countries”
 
In fact, the importance of industrial drivers of deforestation—whichincludes large-scale palm oil and wood-pulp plantations, industrial logging, large-scale cattle ranching, large-scale farming of soy, sugarcane, and other crops, and oil and gas exploration an decades
 
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