Head 282 – Forestry, Environment and Conservation
Prayer was said by the Chairman, Hon Zama. The Chairman then went on to welcome the PS, and officials to the PAC meeting and then invited the PS to introduce the Department’s budget.
Mr Ganate (PS – Forestry, Environment and Conservation): The Ministry of Forestry, Environment and Conservation according to the government’s statement of policy has a mission to achieve this year, and our mission is to promote, conserve and achieve better management of the local industry to ensure landowners and the Solomon Islands Government continue to receive appropriate benefits from the utilization of resources.
There is also the Environment Division in the Ministry that oversees and promotes independent, cooperative and complementary efforts with all stakeholders to address environmental issues resulting from the development and harvesting of the resources.
In saying that, the Ministry also has outputs for this year, and our key outputs are for appropriate legislation and policies to be reviewed – legislations related to forestry, environment and conservation. These will be carefully looked at in 2007 and where appropriate amendments to legislations will be made.
One of our key outputs also is the extent and quality of the nation’s forests. We would like to update the records that currently exist within the system and also to increase the level of monitoring log shipment for purposes of revenue collection in 2007.
We also have our group of family and community based reforestation activities that we would like to promote and increase this year. This year we also would like to test a wide range of the nation’s timber species to be made known to end users both in the domestic and international markets.
Also one of our key outputs is to increase assessment of the impacts of development on the environment having received a lot of complaints from people coming to see us about the impact of heavy logging in their areas. Over the years, the Environment Division of the Ministry has been incapacitated in that it is short of manpower and therefore it was not able to carry out environmental impact assessment before logging operations are carried out.
The Ministry is aware of the seriousness of this issue and therefore this year 2007 we are serious in wanting to do the work. In other words, any application for logging would be considered by the committee that gives approval will be subject to the environmental impact assessment report carried out by environment officers of the Ministry before a license is granted.
One of our key outputs as well is to improve the management and development of conservation sites for tourism purposes. As you are aware, Arnavon Island is a conservation area with cooperative arrangement with responsible communities. So far we are also looking at preserving the leatherback turtle which a survey has just been completed. One of our responsibilities is to make sure that this turtle which we are party to a convention signed between PNG and Indonesia is protected.
We are also determined, as part of our output this year, to improve the management of wildlife. We know there are people interested in exporting wildlife and this is dealt with by the Environment and Conservation Division in the Ministry to make sure that wildlife in the country is preserved and kept in the interest of the nation.
Our last output is to continue with the implementation of international treaties and conventions on environment. As you would know, unlike other line ministries, the Environment Division deals in partnership with international organizations like SPREP and other bodies, and so we will continue liaise with them and hopeful useful information relating to a better environment in our country will be maintained in our association with international bodies by way of subscribing to treaties and conventions that are available.
Mr Chairman: You did cover in brief conservation and tourism, which is a good thing whereby different sectors and departments work together. How serious are you in trying to promote tourism and conservation?
Mr Ganate: We are very serious in maintaining our responsibility to conserve and looking at the environment. In relation to tourism, we will be guided by advice from responsible authorities, the ministry responsible for tourism, but I suppose on our part we are trying to make sure the tourism industry is progressing well in the country. And we want to be a party to any arrangements with other ministries that are involved in tourism.
We are looking at trying to protect and conserve some of our wild animals and wildlife because we are sure tourists going to our islands would like to see environments that are clean and also to know whether we are serious in protecting our natural resources.
So the Ministry is indeed serious to be a partner in the development of tourism in the country.
Mr Chairman: Besides Arnavon on Choiseul, do you have any other conservation sites in the country that you are going to promote under that policy?
Mr Ganate: Of course. We are looking at the entire country as potential for tourism. I will ask the Director of the Environment Division to further elaborate on that point.
Mr Horokou (Director of Environment Division): Apart from some of the areas in Solomon Islands that we have been trying to conserve, for example Arnavon which is between Choiseul and Isabel, we are also looking at a particular site in Isabel near Allardyce which is common for leatherback turtles.
Just last year we did a survey on the leatherback by plane and also on land and there is potential there for tourism attraction for leatherback.
According to experts from the US who was with us during the survey, that place is particularly important for leatherback and it is one of the sites that leatherbacks throughout the Pacific as well as throughout the world come and nest.
We are also working in partnership with tourism on Rennell and Bellona on Lake Teggano. It is one of the projects that our division is heavily involved in with tourism.
Mr Chairman: Is your Department aware of conservation initiatives currently undertaken by landowners on Tetepare – Rendova?
Mr Horokou: As part of the leatherback survey that we did last month, we also visited Tetepare to talk with people there as well as the mainland on Baniata. Baniata and Allardyce are two important places for leatherbacks in Solomon Islands according to our findings from the survey.
So yes, we did and we are aware of their initiatives.
Mr Chairman: The reason why I am asking this question is that we are trying to develop tourism but very much on adhoc basis with no clear focus and policy intentions. That is why your department and tourism must work together to try and promote that kind of undertaking.
Mr Ganate: We will take note of your concern. There is going to be a bill on conservation coming up, which will be tabled in Parliament not at the coming session but at a later session during the course of this present House. But we are determined to work alongside the Department of Tourism to achieve what the tourism industry would like us to do and we would certainly comply.
The Environment Division has already gone throughout the country and identified sites suitable for conservation and for purposes of enhancing this policy.
Mr Chairman: If you look at the development estimates you will see a figure of $4million. In last year’s budget there was also an allocation of $4million for reforestation.
From very reliable sources this $4million was not utilized at all in 2006. There was no policy of implementation and again this year we have the same allocation. What would you say on this?
Mr Ganate: $4million was allocated to the Department last year. The fact that it was not used does not mean we do not need it. That money as you know, Mr Chairman, is to assist families and communities on tree planning on logged over areas and to assist small holder plantations and the initiatives by families to grow more trees. Unfortunately there are a lot of things that are happening within the ministry last year where some political things happened to our Minister and therefore we were unable to pursue this. Several endeavours were put to our Minister then to try and make use of this money but the advice I got was to come up with a mechanism on how to distribute this money. So we are looking at this year. The strategies that were given to the former minister will also be given to the present minister and hopefully we will get back a feedback as to how we are going to use this money.
The implementing strategy is in the process and is being finalized for presentation to Cabinet. We are hoping that whatever will come will give us guidance as to how we are going to use this money. But there are cries everywhere in the provinces needing help.
We would like to be clear from our political head whether we are going to give actual cash money to the people or give out seeds or whatever. That is what we want to be clear on. So we have devised a mechanism on how to fairly distribute this money and what would qualify anyone to get the money because $4million to be shared amongst families in the country is very small and that is why we are looking at a system that will be given to Cabinet and hopefully we will be guided by whatever the Cabinet or Parliament instructs us in disbursement of this money. But we are very much concerned that the $4million has not been used last year although there was great demand for it throughout the country.
Mr Chairman: What is your department doing with your extension officers in the provinces in regards to the $4million? Are you getting any feedback in terms of what people would like to do or if there are nay surveys as to the needs of farmers in the various provinces?
Mr Ganate: Certainly we have received reports from our field staff in the provinces. Our officers submit to us heaps of needs and had we disbursed the money according to what was submitted to us, I believe this $4million would go for only one province, and this would not be fair.
Yes, we did have reports from field extension officers in the various provinces. Whilst I am on this point, I would like to further elaborate that last year I personally toured Isabel Province, Choiseul Province and Western Province to actually go and see for myself who my officers are in the various stations in the provinces and to see what kind of situation they are in and why we are not taking this. I hope the same situation in those three provinces does not exist in other provinces.
What I found out is that whilst we in Honiara travel in air-conditioned vehicles from our house to the office and sit down in air-conditioned offices, my boys out there in the field suffered too much. Their houses are not very good and in some cases they do not have water. They also have to travel about 5-10km to the logging camps from where they live and so they need an OBM and a canoe, which on many occasions the OBM frequently breaks down. That is when I realized the hardship that my officers had when I actually visited them. But to specifically answer your point, we always receive field reports from staff who live in the provinces on the progress of plantations or who has planted so much hectares of trees and so forth.
The need of farmers is huge but we hope to help them this year with this fund available.
Mr Chairman: Over the Christmas and New Year’s break when I was in the village, I saw one officer from your department going around marking trees, and that is how I know you have extension officers in the villages.
The key activities that you raise in the report like monitor the quality of the nation’s forest, supporting families in community base activities, monitoring of log shipments so that government scoops its new revenue.
I suppose the government does not concentrate very much its focus on the revenue part. There were a lot of issues raised by commentators, the NGO’s, the Civil Society on the level of logging going on in our country and there predictions that by 2015 there would be no forest left in Solomon Islands. What is the government’s policy in terms of balancing the rate of harvesting that is going on today and the rate of replanting considering the amount of money allocated for reforestation is very insignificant, very small compared to the volume of logs that are going out? It would seem as though the government is not showing any seriousness in replanting trees that were harvested.
Tree is a long term plant and for it to be an exclusive investment commodity, is not very encouraging. I say this because it is not like copra or cocoa that only takes two to three years and then it bear fruit. Trees on the other hand would take about 20, 30 to 50 years before its return would be realized and so there is no short term to this.
What is the Ministry doing now to cover the gap that exists now with the rate of harvesting that is currently happening in this country and at the same time encouraging farmers to plant trees as against the allocation of $4million provided for by the government?
Mr Ganate: Before I answer that question, I would like to make a clarification. There are field officers posted in logging camps in the provinces and there are also extension officers under the forestry management project – about 47 extension officers based in the provinces. I think one of them was what you referred to earlier on.
I seriously talked with the team leader of the forestry management team that whatever they do must be incorporated with the activities of the Forestry Department because there is only one forestry division in the Ministry. I have informed the team leader in no uncertain terms that we cannot afford to create two divisions of forestry. I think that has been the confusion over the years and so we are trying to eliminate that problem now. I told him very clearly that these people are recruited by the project and as such they are not regarded as public officers because unless they have been appointed through the system – the Public Service Commission, it is difficult for us to take them on when the project comes to an end. That message is clear and it is an internal matter for the ministry to sort out. But thank you for raising it.
In regards to how serious the government is in replacing the logs that are going out, this is not only your concern but it is also the Ministry’s concern as well. We were equally concerned about the rate of harvesting that is going on at the moment. Our assessment or prediction is that by the year 2015 there will not be any loggable trees available throughout our islands. We are seriously aware of the consequences and so we are doing our best to address this.
One option is what you have suggested, Mr Chairman, and that is to continue replacing the trees. Our problem is that we can only do that with very limited financial assistance available to us. This $4million as I have said earlier on is really insufficient. The Ministry for that matter had intended to implement the government’s policy of putting a stop to logging but it is impossible for the Ministry to stop logging because the High Court had made a ruling that the Government does not own any single tree. I also received legal advice from the Attorney General’s Chamber that the government has no right to stop any resource owner from extracting his/her resources. Because of that, despite of government policy wanting us to put a stop to logging, we are finding it difficult to do that. That means logging will still go on.
What the Ministry is looking very much into now is only to make sure that licenses are obtained through proper processes. The process of obtaining licenses must be in accordance with the Timber and Utilization Act as well as the Logging Code of Practice. So to put a halt to logging is difficult at this time because it is the Court’s decision.
Isabel Province is the first province to take a case to the High Court to put a halt to logging but the High Court made a ruling that the province has no right to do that because provincial governments are only agents of the government and because the government does not own any logs the provincial governments too do not own any logs. So it all comes down to the Ministry as the regulator to look into this matter.
At the moment we are equally concerned that our forests are being harvested at an alarming rate and so we are determined to replace the trees through reforestation and replanting of trees. But we can only do that with the limited financial capacity available to us. Hopefully this year with this allocation we will try our best to help our farmers equally and fairly throughout Solomon Islands. So do not be surprised if we come back for supplementary asking for more funds.
Mr Chairman: Has the government started this reforestation levy?
Mr Ganate: Levy to the Ministry is non existent. I don’t know why but that is the way things are. Don’t ask me anything on levy.
I feel sorry for people coming to us every day last year asking about this timber levy. The last administration gave it to some people. Some people actually received letters from Customs giving them permission. So there is confusion between timber levy and duty remission on timber. But if you look at them they are more or less the same thing.
On timber levy, last year was a difficult year for us and I hope the government will take this seriously because a lot of landowners are still in town waiting for this levy. Some of them are waiting in town for as long as six months now. Some of them came to me just last Friday after spending the New Year in town still waiting for the timber levy. These are things that we would like the government to clarify to us.
Based on the approvals given to them, and these people showed to us what the former minister for finance has given to them with the Customs, every thing is clear and so the Forestry Division has no objection when all these other authorities have already given them permission and subsequently the Division is also a party to that approval. However, later last year if you can remember, Mr Chairman, the former minister for finance came out publicly in the media to say that all duty remissions and all timber levies approved by the previous administration and anything enforced are all cancelled as from that date. So that is where we are at the moment.
Mr Chairman: I just want to repeat of the seriousness of the government’s intention of replanting trees as against the speed and rate in the volume of trees that are being harvested.
I also planted trees, but honestly to say that I have given up and this is because there is no support coming from the government and it is also a very long-term investment and so I do not think it is viable for me to continue planting trees.
Looking forward with the government’s policy, I think it is just very simple. In all seriousness what you should be really looking at is to concentrate its focus on current operators so that what goes out from their land should also be reciprocated.
The problem in the past is that there are a lot of people on the streets that do not have logging but have applied for this assistance. I think the government needs to look at the current logging practices and logging operations and see that those who are serious and genuine in planting trees are given assistance.
Just narrow down your focus by looking at existing operators. Talk with the government or the Ministry of Finance so that something goes back directly to replace what has been taken out. This will encourage the owners to take up replanting. That is the only way I see you can move forward and also to reflect the commitment by the government in the replanting of trees
Can you confirm your statement when you said that there is a pull between the department and the forest management project? Can you confirm that that could be the reason why you do not implement the $4million last year?
Mr Ganate: Not really. I think the only delay in implementing this is that last year we had instructions from the former minister that we must come up with a mechanism as to how best we can help farmers with this money. Whilst we were on the process of coming up with implementing strategies to do this, I think the mind of my former boss was not with us because he had other political agendas in mind. Because of that, the former minister was not in his best time to consider the implementing mechanisms that I put forward to him for his endorsement.
I know you are aware that we only do things according to the guidance of ministers. We even tried to get these implementing strategies to Cabinet but it did not go that far. That is why I am looking forward to this year when we will be able to submit the strategies to Cabinet and hopeful we will get guidance from thereon.
So it is not really true to say that because of the differences between the Department and the Project that caused the delay. In real terms when the Department was not quick in utilizing this fund the Project wanted to use it for its extension services but we did not allow it because we think the Department of Forestry is supposed to be using this money. The Project should help us, it should add another $4million on top of this amount by way of capacity building and institutional strengthening. But we have some internal differences on this. However, we are hopeful that this money will be put to use this year.
Mr Chairman: In the development estimates, Forest Management Project has $11.8 million in the estimates for TA and non cash. What is the role of this Project in the Department of Forestry and what is the role of the extension officers of the Department of Forestry? This $11million is a lot of money and Solomon Islanders do not need to be told how to plant trees or grow kumara or taro. Planting trees and crops is a natural instinct of Solomon Islanders. What is the objective of this Project and what does it intends to achieve?
Mr Ganate: Your concern is taken into account on the decisions which gave rise to this project in the first place.
But Phase II of the Forest Management Project is just for continuation of Phase 1 of the Project, which focuses on institutional strengthening within the Forestry Department and working towards legislative reforms. That is what this project is supposed to do.
A component of this project is aimed at increasing engagement with communities and landowners in reforestation, and that is why you would notice extension officers being appointed under this project, one of whom you met during the Christmas break in your home. That is one part of the project. But the whole focus of this project in the beginning is for institutional strengthening and legislative reforms in the Forestry Department so that it can assist the Forestry Department to better serve our people. However, as I said it is really a political decision which I cannot do anything about. But we are doing our best to work alongside the project as it is and hopefully we will get them. They are beginning to see the picture and the reality of working together with the Department of Forestry. That is why this year we think that we will try to get everybody tune in with the department to help forestry officers by way of training. In regards to the reforestation activities we would like to get a clear directive on this.
But I would like to thank you for the suggestion and comment you made for us to narrow the focus on who really should get assistance from this funding. If that is the case, then we will also include that in the strategic paper that we are going to submit to the Cabinet for approval to guide us in disbursement of this fund.
Mr Chairman: May be just a last comment from me. Just after independence we do not have very much capacity building or institutional strengthening. We do not have much technical assistance but we can see big plantations. There is the Alu Plantation in Shortlands, the Allardyce Plantation in Isabel, the Arara Plantation in Viru and there is one in Lata, Temotu Province. All these are big plantations and all supervised by locals but we can see tons of things happening on the ground as against what is going on now. It would seem to me that government focus is now going differently.
As we can see now the focus is shifting to resource owners, families, and landowners, and so what is the government’s part in here? Is it exclusively purely as a regulator and the seriousness of balance to helping our people? How is it going to drive its policy?
Mr Ganate: That is a good point. I am not saying it is a political decision but what you are raising is very true. We only need to see the things you are saying and compare that with what is happening now. I could not agree more on what you said. You said it and so probably that is a point the government needs to look into.
Hon Fono: Thank you PS for your input into the budget. You have discussed policy issues which most of the time it is the government that should make it very clear as to which direction we want the forestry to pursue in order to assist our resource owners.
Whilst I heard the reasons why you did not implement the $4million allocation in last year’s budget, I think I do not accept the reasons for the delay because that is further delaying the assistance that is supposed to be given to farmers and resource owners. When the Stabex 98 allocation for the forestry sector was discussed at the planning level, I made it very clear to the EU that there must be provision to assist resource owners, and not only to assist KFPL like what I have heard.
In my view, if the government comes out clear with the criteria that will be used to assist resource owners, I think there is enough money, not only from government support but even Stabex. There is a component of Stabex funding in the forestry sector which all along I had been pushing for it when I was a minister during a previous administration.
I believe this must be taken on board so that much of this Stabex fund under the forestry sector is used to help resource owners. I think the Forestry Division should carry out a stock take of who are the genuine resource owners who would carry out replanting of trees, how many hectares they are going to plant, at what level, how many years it is going to take them and then prioritize which areas they are to be assisted in. The stock take can easily identify that information and then come up with a subsidy scheme to encourage those who already have plantations.
As rightly pointed out, quite a lot of our people get frustrated because even though they plant a number of hectares there is no assistance forthcoming from the government.
Those are considerations that can be looked into under your strategies or mechanisms that you talked about PS. You can look at identifying through your extension network the resource owners that have planted a number of hectares and would need assistance to maintain the plantations, must be assisted so that over the years they can benefit. That is the production part of it so that we plant according to the level of harvesting.
The other area of concern is that resource owners in the nation may not be getting value for their trees. That needs to be looked at and come up with a policy to look at centralizing the marketing of our logs instead of allowing logging companies to export the logs themselves because many of them are just brokers, meaning they are just middlemen who are selling through other industries or buyers that offer a much higher price and so the value of the logs of resource owners are forfeited.
I believe the Department of Forestry should re-look at the marketing strategy that we have in place all along because I understand that we are not getting value on the logs we are exporting. Why can’t we look at creating a buffer where all logs extracted in the country go to a central point and there we dictate the price of the logs to the buyers? If they can do it to oil or under OPEC, why not us. We can do that to logs too because logs are now becoming scarce. Many of the Asian countries now do not have any logs and that is why we are seeing most Asian logging companies now coming to the Pacific especially PNG and Solomon Islands. So there is need for us to dictate the price of logs in order to give back to resource owners a higher price than what they are getting now.
I think the Government should now be looking seriously into the area of marketing. It should research into this, find it out and then look at its policy again so that we control the value of logs we are currently exporting. All these centre on government policy and so the government needs to come out clear and make a policy on this.
It would seem to me that this forest management project has been operating for quite a while and so there needs to be review on this. The government should carry out a review to see whether the objectives for which this project was established were achieved or is it only telling the government to try and control its resources.
The PS mentioned that one of its functions is to look at legislation, but so far there has been no legislation on forestry come before the House after the previous one that was shelved away on the new regulation on forestry. So it is not fulfilling its objective on legislation that it was supposed to be doing. There needs to be a review on this so that it is in line with the present government’s policy on our forest resources so that we benefit from it.
Those are my initial contribution to the introduction made by the PS.
Mr Ganate: I would like to thank the Leader of Opposition for the points raised. We certainly agree to that but most of these things I am glad that he raised them as well as the points made by you too Mr Chairman, because I believe your report will go to the government because they are issues that only the government can made decisions on. We at the Ministry are only here to comply accordingly.
The idea of reviewing the project is very important because as you have rightly said this project has been in existence for quite sometime and we are now in phase 2 of the project. If the project does not meet what it was originally planned for, the Ministry cannot do it but only the government can do it. I believe it will be in your report to the government and hopefully something will be done on this. I thank you for raising that point.
The legislative reform I referred to is for the Ministry to look into at the acts that we have at the moment. And as you have rightly said one has been shelved away but we are determined to make sure that legislations pertaining to the logging industry, environment and conservation must be reviewed. But I would like to once again thank the Leader of Opposition for raising this concern and also thank you Mr Chairman for your concurrence.
Hon Fono: Can you enlighten us on this Stabex Project I am talking about because I pushed for this last time when the protocol was at its discussion stage.
Mr Ganate: I am fully aware of this when you were the minister and you tried to do something about this so that the project does not only assist plantations but it would also assist farmers and others. Unfortunately, this year the Stabex Project will only go to what is called ‘grant for Solomon Islands’, and would go towards replanting of 3,750 hectares of commercial forest plantations owned by KFPL.
There have been some complaints over the usage of this fund. I have received complaints from Eagon wanting a share of this cake. Unfortunately it is beyond the reach of the Division, we are not in control of the fund and we do not even know how this fund is disbursed. I think the Leader of Opposition might have a fair bit of idea how this fund is disbursed as you were a former minister of planning.
But what you said is equally what the Ministry would like to see. We would like everyone engaged in reforestation assisted in anywhere to come up with the point raised by the Chairman, and that is to replace the trees that are being harvested.
Mr Chairman: Is what you are talking about appears here in the second part of the development estimates? It has $6.8million in operating cost, $1.3million on TA – non cash, and also next to it there is a special allocation for KFPL too. What is so special about KFPL here? That is my first question. The second question is, with the government’s proposed bottom up approach in trying to get our people to participate, how does the government strike the balance in terms of empowering people especially in driving the bottom up approach for people to participate?
Mr Ganate: Your concern is also our concern too. The bottom up approach in my opinion would be to help everyone to come up. But when this allocation is only meant for only plantation, the excuse I hear is that, and I do not want to sound political but I do not know, to be honest with you. It is the government’s decision. The government will have to tell us how to use this money. But the way it is distributed to us and contained in here is what I am telling you. Probably the Minister of Planning would be in a better position to inform us much better.
Hon Koli: Earlier on PS you talked about assistance to community and family based forest activities, I am just looking at the area of sourcing of funds from this $4million ROC/SIG funding for reforestation activities in the rural areas.
However, due to climate change there are some NGO’s, developed countries that would like to buy back oxygen in the atmosphere. Can we tap any financial assistance from such organizations wanting to engage in that sort of activity? Climate change is becoming a global issue and they would like to assist developing countries like Solomon Islands to buy back oxygen from the atmosphere. Can the Ministry or the government look into this with the view of sourcing any financial assistance?
Mr Ganate: Talking about sourcing funds from organizations or people who are concerned about oxygen in the environment, I have not heard of such undertaking but probably the Director of Environment might draw some light on this. We are equally concerned with that point you raised but we think it is the government that should tell us what to do otherwise we might act administratively and burn our fingers.
What you are saying is quite true but it is a policy matter that is really in the hand of politicians. But I would allow my director to contribute to this, and if possible we can submit a paper to Cabinet on this and get directives from there.
Mr Horokou: I think two years ago a company from the US had tried to invest in that sector. But the Attorney General gave him advice and we also followed that advice. But that idea was initially looked into and we are working with the MET services to develop that initiative, which comes under Greenhouse Development Mechanism, under UN Climate Change Convention.
Mr Chairman: Are you saying that the Attorney General advised against you from planting trees?
Mr Horokou: No, it is just the idea of the investor buying the carbon from us that has been advised against by the AG. Something is not really straight with the company and so that is why the AG advised against it.
Mr Chairman: Can you follow up on that one?
Mr Ganate: We will, Mr Chairman.
Mr Chairman: The position of the Commissioner of Forests is very interesting – it is a very hot seat and I do not know if it has been filled, but on page 117 of the establishment register, this year 2007 there are two posts of the Commissioner of Forests. Is that a printing error?
Mr Ganate: It must be a typographical error. There is only one post of the Commissioner and this Commissioner is now being appointed. His name is Gordon Konairamo from North Malaita.
Mr Chairman: Conservation is one good thing, we have seen its results in the Western Province. But my concern is that those people who are coming in as private operators, there is one operator in South New Georgia and the results are very good. People see the marine rejuvenation of fish, mud crabs and all that.
My concern is that when they come in, do they come in through the department in terms of awareness and the programs they are carrying out. Do they produce reports to your department because there are some people doing conservation work in South New Georgia? Like in Tetepare they are doing it. But I suppose your department is aware of all these private operators so that there is some kind of scrutiny. They are working with the WWF and other organizations but as the Department looking after the overall conservation issues in the country, I think there needs to be some kind of accountability to the department.
Mr Ganate: Thank you for raising that issue. I am very happy to come before the PAC with two of my officials here. Almost all the things that you are raising all boils down to having political guidance in order to guide us. So I would like to thank you Chairman and also thank the Leader of the Opposition and members of the PAC for giving us this opportunity come before you. What I would like to register on behalf of the Minister before we leave is that what is set down here as the budget has been drastically reduced by the Ministry of Finance.
What I am very much concerned about here is that the Ministry as a revenue collecting agency really needs funds to aid us in carrying out our activities. Talking about capacity to collect revenue, our officers in the provinces, as I said earlier, seriously need proper accommodation, they need proper OBM, they need proper canoes, they need fuel. Some of them have families and to live with their family under the roof of others is not very good. This is a concern to me and that is why early last year I made a submission to the Ministry of Finance based on the baseline given to us. I went back to Finance giving them my baseline, and the baseline given was based on what we normally do in order to carry out the key outputs.
What we have now, to be honest, asking us to raise $40million is a very big demand because it is my officers down there that we are depended upon to raise that money but if their conditions are just the same as 2006 then do not expect that much. One good turn deserves another. And this is very important. For the government to give us this budget and then expects us to give them this one is not possible.
Another thing I would like to register before the PAC is subscription to organizations, which is also included in the budget. We submitted $200,000 on subscriptions this year but it was reduced to $66,000. We are subscribers to SPREP, to Waigani Convention, the United Nations Convention to combat land degradations etc. This amount of $66,000 is just not enough even to meet SPREP, and so I just don’t know.
The Ministry whilst it is determined to raise revenue as it is a revenue collecting agency it is handicapped. We will just try our best to implement our programs within the budget given to us. But if you can allow us that if later on if the government comes up with supplementary, then definitely we will come up with a much bigger one because that would be the only way we can raise revenue.
I don’t know, but other line ministries will accept a reduced budget but with the Ministry of Forestry, to be honest with you, our projection is based on what is achievable. So when our budget is cut without consulting us, whether it is government decision, but I can only say that we will only raise what we can within our limited capacity.
Hon Fono: You mentioned $40million revenue the Ministry is expected to raise through logs, can that be elaborated further on how it is going to be raised. Is it going to be increase in duty? Are we anticipating increase in licenses?
Mr Ganate: That is a good question. I believe the anticipation here is increase in log price or anticipating a new determined price on logs, which we have already been hit hard on it by the Solomon Islands Forest Association. When we were hit last week, the Minister decided to suspend the new determined price that was approved by Cabinet. Because of that I do not think we are going to reach that mark.
The new determined price that was passed by Cabinet is just suspended because of the concerns of the Solomon Islands Forest Association. I was asked to consult the Solomon Islands Forest Association and other stakeholders to harmonize the thinking to comply with the new determined price.
The first meeting I held with them last week was not really good. It would seem that within the three months we are asked to consult with stakeholders so that eventually they will agree to this price. But the way things are going now it would seem to me that it would not be acceptable to them. It is too early to preempt what is going to be finally concluded in three months time, but that is the way I see it.
So the projection of reaching that $40million is based on that new determined price, which at the moment is still questionable.
Hon Fono: I raised that question because like most commodities, we are only price takers because the price is determined by world market forces and so price goes up and down and so we cannot determine or fix the price in a given period so that we can catch them on that price.
Mr Ganate: We are being mindful of that. Looking at the price of logs in the country, I think since 1998 the price of logs in Solomon Islands has never been reviewed. Compare it with PNG and other log exporting countries in the region, Solomon Islands is the lowest.
The new determined price was based on data and statistics obtained from our counterparts overseas where we found out the price of logs paid in China is so much or the price paid for logs in Malaysia is like this and the price of logs in Solomon Islands is just flat like this table. That is why the new determined price was made so that at least we get value for our logs.
This brings me to the point raised by the Leader of the Opposition earlier on that resource owners might not be getting the best value for their resources, and that is exactly true. So the new determined price is supposed to be like that. It is supposed to be raised so that resource owners get the best benefit and value for their resources.
Unfortunately, the Minister of Finance suspended this based on the concerns raised by the Solomon Islands Forest Association and so that is how it is now. Hopefully after the next two months we would see whether we are going to adopt the new determined price or not. At the moment we are implementing the rate that was used last year on the logs that are current because some think that imposing the new determined price would cause stockpiling of logs. It is up to the contractors and so we cannot do anything.
Mr Chairman: Just out of concern and interest, all the logging companies in Solomon Islands are Malaysian logging companies – Malaysian based operators. It has been reliably gathered that the prices may have been fixed deliberately.
Interestingly on that note, PS, a lot of operators coming in this time were once employees of the bigger companies. They moved out of the bigger companies and start their own logging operations. If the price of logs in the world market is not attractive, the question is why are these small operators coming in to get into the logging business. And who is telling us the truth here. These are questions we would just like to raise with your department, but I do not expect you PS to answer it, as you said that you do not want your fingers to be burnt.
I think these are serious considerations the PAC would like to raise here that whilst the Cabinet had already endorsed the new price, but here comes the powerful Minister of Finance suspending the recommendation made by Cabinet. Are there not any undue influences in this?
These are just concerns the PAC would like to raise as a body empowered under parliamentary standing orders because we would want this point to go into the report because the Department may now not be able to achieve the anticipated revenue your department would wish to collect.
But on that note, PS, we would like to thank you very much for attending this meeting. The concerns you raised on the terms and conditions of your staff in the provinces have been well raised by the Permanent Secretary of the Department of Public Service and they are also well taken note of. All the things that have been raised here will appear in the PAC report, which will be available to Members of Parliament and to all departments so that the issues raised will have to be re-looked into as we go into 2007 so that they can be taken up with the Department of Finance when we come to prepare the 2008 budget.
back to schedule