Comparing the value of industrial logging for round wood export and small-scale sawmilling for timber export and local use.

© Greenpeace/Solness

Australia Pacific

AN ALTERNATIVE PLAN FOR SOLOMON ISLAND FORESTS AND ECONOMY.

SUMMARY OF KEY FINDINGS:

• The greatest financial value is from the two options that involved both moving to a ‘sustained yield’ harvest rate and halting round log exports, either with 100% community ecoforestry for sawn timber or the 50% community ecoforestry together with a forest carbon conservation payment. • Community ecoforestry was found to be very profitable when focused on export grade sawn timber from premium species, and only moderately profitable across all species.

© Greenpeace/Behring

• Preliminary financial analysis indicates that there is an alternative viable path for the country that provides greatest value for the nation and would avoid predicted serious economic impacts from the collapse of the industrial logging sector by 2015. • Government revenue can be sustained over the forthcoming years through immediately reducing harvest levels to the estimated ‘sustained yield’ level, or the ‘non-declining round log export rate’ together with a shift to local processing rather than round log export. • Furthermore, the greatest financial value (NPV) for the nation is achieved through the substitution of logging for round logs by community ecoforestry for sawn timber production. • For the ‘sustained yield harvest’ (non-declining) level it was found that there is a 35% increase in value to government and landowners through 25% of the harvest being community forestry producing sawn timber for export.

2

• Overall community ecoforestry for sawn timber was 58% more profitable to landowners and government than round logs for export. However, community ecoforestry would additionally provide: additional and ‘spin off’ economic activity, considerable village employment, particularly for young men, allow local communities to retain control over their forest resources, provide permanent house building materials, as well as maintain the forest for existing customary uses, carbon financing and the needs of future generations. • A focus on community ecoforestry and sawn timber increases greatly the value gained by Solomon Island forest resource owners and sawn timber producers. The additional wealth of the landowners will mean greater income tax opportunities as a source of government revenue and well as greater overall local economic activity that will support the provision of services. • If the stored carbon of the estimated 250,000 ha of unlogged commercial forest remaining in Solomon Islands was ‘carbon financed’ (instead of logging the forest) then it could provide an immediate minimum value of US$159 million to the Government and landowners. • Further full economic analysis is required but it is expected that this will only further reinforce these findings, especially when environmental and social costs/benefits are considered, along with the Payment for Ecosystem Services such as forest carbon.

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

KEY RECOMMENDATIONS: > The Solomon Islands Government places an immediate moratorium on all new logging licences and cancel any licences that are breaching their conditions or are not in compliance with the law.

*

maximising local processing and value capture by the nation.

> T he Solomon Islands Government should set a goal of zero deforestationi by 2015 including opposing all conversion of forests for plantations and seeking forest carbon finance incentive payments.

> By the end of 2008 the Solomon Islands Government phases out round log exports in favour of

Solomon Islands logs awaiting export. Rampant logging is threatening the Solomon Islands remaining forests. © Greenpeace/Solness

FURTHER RECOMMENDATIONS: > E stablish a national framework for forest carbon financing and forest protection incentive payments and facilitate private/voluntary market payments as well as bilateral funds. > S upport ‘Forests for Climate’ii as a mechanism for recognising and receiving payments for forest carbon conservation and REDD in the UNFCCC and other international forums. > SIG should provide support and seek donor support for the rapid expansion of community ecoforestry together with small-scale sawmilling including immediate support for existing community forestry programmes.

> Request the Australian Government to reconsider its focus on exotic tree plantation development that involves the direct or indirect converting of natural forest and instead support community ecoforestry and forest carbon conservation. i

Zero Deforestation is an overarching goal which when implemented means: − no deforestation − no forest degradation − a comprehensive network of forest protected areas including areas of strict protection and areas of community low impact and small scale forest use − good forest management in all forests outside of protected areas (including FSC certified community and private sector forest management) − respect for the rights of all indigenous and other forest-dependent communities ii ‘Forest

for Climate’ is a mechanism that takes funds from the international carbon market and uses them to pay for ‘deforestation credits’ gained by tropical forest nations not degrading forests or deforesting. See: www.greenpeace.org/ forestsforclimate

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

3

1. INTRODUCTION:

7 September 2004. Logging on a riverbank in the Solomon Islands. Greenpeace is committed to seeking responsible and ecologically sustainable alternatives to logging and supports ecoforestry projects in Papua New Guinea and the Solomon islands. © Greenpeace

The Solomon Islands has 2.8 million hectares of forests, covering around 85% of the total land area. However, only one fifth (600,000 ha) of the natural forest area is suitable for commercial logging1, and all remaining large intact forest areas (>50,000ha) are now only found in the poorly accessible hill and mountain areas (see Map). The loggable forest has been heavily exploited over the last two decades and current logging is out of control. Industrial logging in Solomon Islands is dominated by foreign companies who along with local front companies and contractors, landowner agents and middlemen, and a compliant government, have been logging at a rate that is four times the estimated ‘sustainable yield’, or the level of non-declining harvest2.

The logging sector currently accounts for 67% of export receipts, 15% of domestic government revenue, and 15 % of GDP6. However the International Monetary Fund (IMF) recently predicted a rapid collapse of logging with commercial natural forests being logged out by 20147. The IMF, the Central Bank of the Solomon Islands and the Governor General of Solomon Islands have warned of serious financial, economic and social impacts when this happens8. It is forecast that economic growth will decline to 1.5% per annum, down from 10% in 2007, largely due to a rapid decline in logging as commercial forests are logged out. This report gives some background on the logging industry and it’s impacts, and presents a financial analysis that compares industrial logging for round log exports with community ecoforestry for sawn timber exports and domestic use. The analysis builds on work already carried out by the Australian Aid supported National Forest Resource Assessments9, the Central Bank of the Solomon Islands, and the IMF, with the key new addition of financial data from the growing village-based small-scale sawmilling sector. Options for a different forestry sector future for the Solomon Islands are presented along with estimated profit and Net Present Value (NPV)10. Recommendations are made to the Solomon Islands Government and forest resource owners, and donor governments and institutions.

Further, many other reports and assessments have documented financial irregularities such as transfer pricing, misreporting and tax avoidance3, serious environmental and social impacts4, and how it is economically not as beneficial to local landowners as smallscale economic activity5.

4

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

Solomon Islands Forests

1. Children of the Lobi community, Marovo Lagoon, sit on a newly cut tree from the Greenpeace-supported ecoforestry project in their village. Ecoforestry is one way to protect forests for future generations. © Greenpeace/Behring

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

5

2. OVERVIEW OF DESTRUCTIVE INDUSTRIAL LOGGING IN SOLOMON ISLANDS Industrial logging began accelerating in Solomon Islands from the 1980s when Asian (mainly Malaysian and Korean) companies began entering the sector and when there was a shift from logging on government land to customary owned land11. This post-colonial early independence period, under the Solomon Mamaloni-led government, moved relatively quickly towards economic reliance on logs for export and government revenue – 56% and 31% respectively by 1994. It was during this period that the log harvest began to exceed ‘sustainable yield’ levels, increasing from 261,000 m3 in 198712, to over 600,000 m3 in 1997, to a predicted 1,400,000 m3 in 2008 – over 5 times the sustainable rate13. During the ‘ethnic tension’ period, from 1999 – 2003, logging unlike virtually all other commercial activities, continued to operate and expand14, highlighting the ability of this sector to thrive in a weak governance environment. During this period of unrestrained expansion there were many attempts to bring logging under control and considerable amounts of information released on its economic, social and environmental impacts. Australian aid funded monitoring and timber control capacity was installed several times over a 15-year period15, and while the monitoring documented the problem well (an unsustainable sustainable yield rate of harvest), and even recommended establishing large conservation areas16, the industry was not brought under control.

Sawn eco-timber being loaded into a container for export. Sawn eco-timber is 58% more profitable to landowners and government than round logs for export. © Greenpeace/Neaves

6

Australia’s response has been to recommend the establishment of plantations as a way of building the forestry sector17, with these plantations converting logged over forest or old village garden sites. Australia has consistently ignored the potential for villagebased portable sawmilling from natural forest such as community ecoforestry. At least two Solomon Island governments (in 1994 and 1997/98) have attempted to reform the logging sector by cancelling licences18 and imposing a moratorium on new licences. However, they were short lived with these governments being overturned, allegedly through bribes from logging companies19. Solomon Islands courts have also found logging companies to be operating illegally20 but this has done little to slow the onward march of the industry to systematically log all the commercial forests of the country. In some situations there has been resistance from landowners, and while recently this has halted some logging21, it has in the past been disastrous for some communities such as the 1995 murder of local community leader Martin Apa who opposed the logging of Pavuvu Island by Malaysian company Maving Bros Ltd22.

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

2.

Some of the most glaring failures of the logging sector have been in their financial affairs. A special audit by the Solomon Islands Dept of Forestry, Environment and Conservation in 2005 found that there was gross mismanagement in the forestry sector, and while logging companies were able to avoid paying much of their tax liabilities, large sums of money were being paid to forestry officials and diverted to unbudgeted expenditure30. The Auditor General conclusions include: Logging devastation: Solomon Islands is home to the last remaining forests in the eastern part of the Paradise Forests. In 2004, over one million cubic metres of logs were cut here, according to the Central Bank of Solomon Islands. This is four times the sustainable yield of the remaining forests (which is 255,000 cubic metres per year, as calculated by AusAid, the Australian Agency for International Development, October 2003). © Greenpeace/Solness

• In 2004, there was an estimated SI$29 million in forgone revenue to the Government in the granting of timber duty exemptions. • Continuous breaches of agreement by the logging companies • Unlawful ex-gratia payments, unaccounted for advances made to individuals from logging companies, timber royalty payments diverted to private accounts…

Many serious social impacts resulting from logging have been documented over the last decade. These include: destruction of local water sources and desecration of sacred and burial sites23, child sexual abuse and prostitution24, increased disputes and conflict within a community, the breakdown of social structures25, and hardship resulting from the loss and damage to forest resources that local people rely on for their every day living26. Environmental impacts have been equally damaging and include: soil disturbance and erosion, sedimentation of streams and reefs, the loss of biodiversity and the regenerative capacity of forests27. It is also now well recognised that tropical deforestation and degradation is a major contributor to greenhouse gas emissions (equal to 1/5 of global emissions) and dangerous climate change28. In some instances there has been a link between logging and complete forest conversion for oil palm plantations, where logging precedes the plantation development or is carried out under the guise of being an agricultural project29. With rising international crude palm oil prices there is increased interest in an expansion of oil palm, making forest conversion following logging a significant threat to Solomon Islands forests.

These types of practices are however not new. Problems with tax remissions and exemptions have been previously identified31 along with the ‘severe economic and financial disruption when the natural forest timber resource is depleted32. A major Australian Aid funded study in 1994 found losses to the Solomon Islands Government of SI$94 million due to the underreporting of log prices33. There is no evidence to suggest that any of these practices and their resultant financial losses to the resource owners and Government have abated in subsequent years, meaning the aggregate losses would now be in excess of a billion SI$.

An oil palm kernel: the expansion of oil palm is a significant threat to Solomon Islands forests. © Greenpeace/Budhi

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

7

3. COMPARATIVE FINANCIAL ANALYSIS - OF LOGGING FOR ROUND LOG EXPORT AND COMMUNITY ECOFORESTRY WITH SMALL-SCALE SAWMILLING.

Figure Scenarios 2052 F i g 1: u r eValue 1 : V a lof u e Wood o f W o o Product d P r o d u c tExport Ex p o r t S c e n a r io s -– 2 02008 0 8 t o to 205 2 ( U S (US$) $) 1 8 0 , 0 0 0 ,0 0 0 1 6 0 , 0 0 0 ,0 0 0 1 4 0 , 0 0 0 ,0 0 0 1 2 0 , 0 0 0 ,0 0 0 1 0 0 , 0 0 0 ,0 0 0

L a n d o w n e r / p r o d u c e r r e tu r n

8 0 , 0 0 0 ,0 0 0

G ov t ex p o rt re v en u e

6 0 , 0 0 0 ,0 0 0 4 0 , 0 0 0 ,0 0 0 2 0 , 0 0 0 ,0 0 0 0 c u rr en t e x p o rt

s u s ta in a b le r a te : s u s t a in a b le r a t e : s u s ta in a b le r a te : s u s ta in a b le r a te :

r ate : 1 0 0%

1 0 0% ro u n d

7 5 % r o u n d lo g s ,

100% s aw n

r o u n d lo g

lo g s

25% s aw n

tim b e r

e x p o r ts a t c u r r e n t r a te

t im b e r

50% s aw n t im b e r , 0 % r o u n d lo g s ,

employment, housing, local services, and general contribution to the ‘quality of village life’ or the nations GDP – of the two different tracks were not considered. The potential additional value of further processing of and value adding to the sawn timber, or the broader benefits gained by Solomon Islanders controlling and managing their own resources were also not considered.

c a r b o n f in a n c e

Logs are tagged and ready to be shipped to Malaysia at a logging camp in Marovo Lagoon. © Greenpeace/Behring

This analysis calculates the Net Present Value (NPV) to the Solomon Islands Government (log tax and duties) and landowners (royalty and/or community ecoforestry profit) for both logging for round log export, and for a range of combinations with community ecoforestry using portable sawmilling for sawn timber export and domestic use. Two different resource harvest intensity scenarios were also analysed – the current exhaustive ‘boom and bust’ track of exploitation where commercial forests will be logged out by 2015 and a ‘sustainable yield’ rate of harvest where there is an assumed non-declining 248,000 m3/year34.

While there are obvious short-term financial incentives to liquidate the commercial forest resource as quickly as possible, the greatest financial value (NPV) for the nation is achieved through the substitution of logging for round logs by community ecoforestry for sawn timber. For non-declining ‘sustainable rate’, the substitution of a quarter of the log production gives a 35% increase in value (see Fig 1). Any of the options that involved the increased levels of local processing via small-scale sawmilling and ecoforestry increased the value to the nation. The greatest financial value is from the two scenarios that involved a ‘sustainable’ rate of harvest and halting round log exports, either with 100% community ecoforestry with sawn timber or the 50% community ecoforestry together with a forest carbon payment (see Fig. 1). Figure 2: SIG Landowner Royalty and Community Producer Returns on Sawn Timber (US$) Fig u r e 2: L a n d o w n e r r o y a lt y an d c o m m u n i t y p r o d u c e r r e t u r n o n e x p o r t s

s aw n t i m b e r (US $)

1 8 ,0 0 0 ,0 0 0 1 6 ,0 0 0 ,0 0 0 1 4 ,0 0 0 ,0 0 0 1 2 ,0 0 0 ,0 0 0 1 0 ,0 0 0 ,0 0 0 8 ,0 0 0 ,0 0 0 6 ,0 0 0 ,0 0 0 4 ,0 0 0 ,0 0 0 2 ,0 0 0 ,0 0 0 0 2008

2012

2016

2020

L a n d o w n e r r e t u r n o n c u r r e n t 'b o o m

2024

2028

2032

2036

2040

2044

2048

L a n d o w n e r r e t u r n o n n o n - d e c l i n i n g r o u n d l o g e x p o r t r a te L a n d o w n e r /c o m m u n i t y p r o d u c e r r e tu r n o n n o n - d e c l i n i n g e x p o r t r a te w i th r o u n d l o g a n d 2 5 %

s a w n t i m b e r e xp o r t s

All data for the analysis was sourced from the Central Bank of Solomon Islands35, the IMF (2007) and the Ministry of Forests, Environment and Conservation (2006), with supplementary data on community ecoforestry and small-scale sawmilling from Village Ecotimber Enterprises (VETE), Honiara. It is not a full economic analysis so the broader flow-on socio-economic impacts – such as local

8

2052

a n d b u s t' r o u n d l o g e x p o r t r a te

A portable saw mill in action. Portable sawmills are carried into the forest reducing environmental impact by eliminating the need for damaging infrastructure like roads. © Greenpeace/Neaves

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

The analysis shows there is a forestry path other than the current ‘boom and bust’ one, which is expected to cause considerable economic hardship and disruption when log exports dramatically drop from 2010 through to 2015. Immediately moving to a ‘sustainable’ harvest rate and transitioning away from a focus and reliance on round log exports would transfer considerable value and wealth to landowners and community ecoforestry producers (see Fig. 2) and provide a moderate revenue stream for the government (Fig. 3). This would prevent the scheduled massive collapse of revenue to landowners and government. However, the additional wealth of the landowners will mean greater income tax opportunities as a source of government revenue as well as greater overall local economic activity that will support the provision of services.

3.

landowners this is 3-4 times the royalty received for an equivalent amount of round log harvested36 (see Fig. 4). For the government it is only a quarter of the tax revenue they would get from round logs. Overall, community ecoforestry for sawn timber would be 58% more profitable to landowners and government than round logs for export. Community ecoforestry would provide additional benefits like considerable village employment (particularly for young men), allow local communities to retain control over their forest resources, provide permanent house building materials, as well as maintain the forest for existing customary uses, carbon financing and the needs of future generations. Fi g u r e 4 : R o u n d l o g e x p o r t s v s . l o c a l p r o c e s s i n g Figure 4: Round Log Exports vs. Local Processing (S B D p e r m 3 o f r o u n d lo g ) (SBD per m3 of round log) 350

300

250

Figure 3: SIG Financial Return on Exports of Round Logs and Sawn Timber (US$)

200

Fi g u r e 3 : S I G F i n a n c i a l r e t u r n o n e x p o r t s o f r o u n d l o g s a n d s a w n t i m b e r ( U S $ )

2 0 ,0 0 0 ,0 0 0

150

1 8 ,0 0 0 ,0 0 0 100

1 6 ,0 0 0 ,0 0 0 1 4 ,0 0 0 ,0 0 0

50

1 2 ,0 0 0 ,0 0 0 1 0 ,0 0 0 ,0 0 0

0 Round log exports

8 ,0 0 0 ,0 0 0 6 ,0 0 0 ,0 0 0

Government revenue

Small scale sawmilling

Landowner/ producer revenue

4 ,0 0 0 ,0 0 0 2 ,0 0 0 ,0 0 0 0 2008

2012

2016

2020

2024

G o v e r n m e n t r e v e n u e o n c u r r e n t 'b o o m

2028

2032

2036

2040

2044

2048

2052

© Greenpeace/Neaves

a n d b u s t' r o u n d l o g e x p o r t r a te

G o v e r n m e n t r e v e n u e o n n o n - d e c l i n i n g r o u n d l o g e x p o r t r a te G o v e r n m e n t r e v e n u e o n n o n - d e c l i n i n g r o u n d l o g e x p o r t r a te w i th 2 5 %

s a w n t i m b e r a l l o c a ti o n

Freshly milled eco-timber being stacked, ready for transport out of the forest. © Greenpeace/Neaves

This analysis includes in the production costs an allowance for forest management training and support to ensure forests are well managed and meets the standards of the world’s premium certification schemes, the Forest Stewardship Council (FSC) and Fair Trade, which would ensure access to high value international markets. However, for current ecoforestry operations, these costs are largely subsidised by donor funded NGO support programmes - meaning current actual profitability to landowners is higher. To support the rapid expansion of community ecoforestry and the retention of forests to maximise economic, environmental and social benefits, the Solomon Islands Government and bilateral and multilateral donors should consider funding expansive training and technical support.

Detailed financial analysis of small-scale community ecoforestry, which focuses on exporting sawn timber, found it to be very profitable, with an average net profit to the community of SI$1039 per m3 of sawn timber. However if total production, (including local sales) is considered, the average net profit was found to be moderate at SI$624 per m3. A straight comparison on a cubic metre basis found that for Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

9

4.

4. VALUE OF ECOSYSTEM SERVICES

While most of these ecosystem services are currently not given a monetary value, it is clear that they will be more and more valued in the future. Several economic cost-benefit comparative studies39 have shown that even for forest products and services that have a market value, small-scale and subsistence uses exceed that of large-scale industrial exploitation. For the Marovo region, the small-scale and subsistence uses were found to be worth 3-4 times more to the local communities than logging and oil palm development40. Morovo Lagoon, Lobi Community, Solomon Islands - September 8, 2004 -A man moves a tree with the use of a pully.This ecoforestry project supports the local community and allows sustainable logging of their land. © Greenpeace/Behring

Services provided by ecosystems include climate regulation, water supply and regulation, erosion control, nutrient cycling, pollination, genetic resources, food and raw materials, recreation (e.g. ecotourism) and cultural/spiritual importance. ‘Ecosystem services’ are currently not valued by markets based economies. A highly regarded research team estimated the value of ‘ecosystem services’ of tropical forests to the global community to be worth US$2007/ha/year37. This means the value of the ecosystem services for the 600,000 ha of Solomon Islands natural forest that is available for commercial logging is equivalent to US$1.2 billion annuall38, and much greater if all of the country’s forests are included.

There is a fast evolving opportunity for tropical forest countries to obtain payments for protecting the carbon stored in forests. For greenhouse gas polluting industrialised countries this has been identified as a low cost way of mitigating dangerous climate change41. To degrade or clear tropical forest now means to forego this opportunity for significant income. If the stored carbon of the estimated 250,000 ha of unlogged commercial forest remaining in Solomon Islands was ‘purchased’ (instead of logging the forest) then it could provide an immediate minimum return of US$159 million42. There are an increasing number of examples of forest conservation financing deals where ecosystems services are being valued and paid for, such as through ‘Conservation Concessions’43. In these deals, provided that participatory land use planning has been carried out, different categories of land use that ensure forest conservation, are acceptable (including harvest of non-timber forest products, ecotourism, and community ecoforestry) thereby further extending the income opportunities. Therefore it makes good financial and economic sense to maintain and protect the forest for future ecologicially responsible use rather than trade just one of these ecosystem values (logs) for short-term financial gain to the detriment or destruction of the other values. Greenpeace strongly supports mechanisms to value ecosystem services and to transfer that value equitably to those who own, have rights to, manage, or govern those forest ecosystems.

10

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

FOOTNOTES 1 Ministry

© Greenpeace/Neaves

of Forests, Environment and Conservation 2006: Solomon Islands Forestry Management Project II, National Forest Resource Assessment Update 2006. An AusAid funded project managed by URS Sustainable Development, Canberra, Australia. 1st Nov. 45p 2 Ibid, and International Monetary Fund (IMF) 2007: Solomon Islands Country Report: No. 07/304. Staff report for the 2007 Article IV Consultation. September. 72p, Solomon Is Ministry of Natural Resource (SIMNR) 1994: Solomon Islands National Forest Resources Intentory: The forests of Solomon Is. Regional reports 1-9. Honiara. AIDAB and Ministry of Natural Resources. 3 Office of the Auditor General 2005: Special Audit Report into the Financial Affairs of the Dept of Forestry, Environment and Conservation. National Parliament Paper No. 8 of 2005. 74p, Asian Development Bank (ADB) 1998: Solomon Islands 1997 Economic Report. August., Central Bank of Solomon Is 1995: Annual Report, Honiara, p18, Price Waterhouse 1995: Forestry Taxation and Domestic Processing Study. Final draft report. SIG Ministry of Finance and Ministry of Forests, Environment and Conservation, Honiara, Duncan 1994: Melanesian Forestry Sector Study. Report prepared for AIDAB. October. 30p. 4 Herbert 2007: Commercial Sexual Exploitation of Children in Solomon Is: A report focusing on the presence of the logging industry in a remote region. A report prepared by Tania Herbet for Christian Care Centre, Church of Melanesia, Honiara. July. 45p , Olsen and Turnbull 1993: Assessment of Growth Rates of Logged and Unlogged Forest in Solomon Is. Final Report. Solomon Is National Forest Resources Inventory., Greenpeace Australia Pacific and Oliver 2001: Caught Between Two Worlds: A social impact study of large and small-scale development in Marovo Lagoon, Solomon Is. 24p. 5 LaFranchi and Greenpeace Pacific 1999: Islands Adrift: Comparing Industrial and Small-scale Economic Options for Marovo Lagoon Region of the Solomon Is. March. 21p + appendices. 6 Solomon Star 2008. ‘Logging Drives Solomons Economic Growth: Statements from the Central Bank Governor Rick Hou. February 19. 7 IMF 2007 8 IMF 2007, Radio NZ International 2008: ‘SI GG warns against economy’s reliance on logging’ 18th March., Solomon Star 2008. 9 SIMNR 1994, AusAid and Ministry for Forestry, Environment and Conservation 2003: SI Forestry Mangement Project, Phase 6. National Forest Resource Assessment. Report prepared by URS. October. 29p + appendices, Ministry of Forests, Environment and Conservation 2006. 10 NPV is defined as the future stream of benefits and costs converted into equivalent values today. 11 Kabutaulaka 2000: Paths in the Jungle: Landowners, Deforestation and Forest Degradation in Solomon Islands. http://www.wrm.org.uy/deforestation/Oceania/ Solomon Is, Fraser 1997: The struggle for Control of Solomon Islands Forests. The Contempory Pacific, Vol. 9, No.1, pp39-72. 12 Duncan 1994 13 IMF 2007. Note: Round log exports for February 2008 alone exceeded 130,000 m3 (CBSI 2008: Monthly Economic Bulletin. Issue No. 2, Vol. 1.). 14 AusAid and MFEC 2003 15 Estimated at A$15-20 million, and according to URS the consultancy firm implementing the project since 1999, the project was to “contribute to the socio-economic development, peace building and the well-being of the people of the Solomon Islands and their environment by enhancing: the management of natural forests, growth of the forest estate through plantation development, revenue collection (from log exports) by landowners and the Government, and the capacity of the Forestry Division (FD) to effectively support and regulate this key sector of the Solomon’s economy.” 16 SIMNR 1994 17 AusAid & MFEC 2003, MFEC 2006 18 Pacific Report 1994: ‘Malaysian Businessman Expelled from Solomon Islands after Bribery Allegation”. Vol. 7, No. 14, July 25.

19 Solomon

Star 1995: “$7 million Scam Surfaced.” November 10, Solomon Star 1996: ‘Orodani Returns to Court Today’. Oct 25. 20 E.g. Court of Appeal of the Solomon Islands 1999: Gandly Simbe vs Eagon Resources Development Company Ltd. Judgement Report, Appeal No. 8 of 1997. 26p, Solomon Star 1998: ‘Earthmovers Ordered to Pay Workers.’ March, Pacnews 2008: ‘Forty-eight Asians illegally working in the logging industry are given seven days to leave or be kicked out’. 13th March , Solomon Star 2004: ‘Logger Jailed’ 13th September. 21 E.g. Solomon Star 2006: ‘Brother Bashes Anti-logging Sister’, Feb 6., Solomon Star 2007: ‘Pro-loggers and Anti-loggers in Vella Lavella’ 17th August., 22 Martin Apa’s murder on October 30th 1995 has yet to be properly investigated by Solomon Is Police. 23 Tausinga 1992: ‘Our Land, Our Choice: development of Nth New Georgia’ In: ‘Independence, Dependence, Interdependence: the first 10 years of Solomon Is Independence. USP, Honiara, WRM and Forest Monitor Ltd 1998: ‘High Stakes – the need to control transnational logging companies: a Malaysia case study. August. Uruguay and UK. 57p., Rukia 1989: ‘Impact of logging on Sacred Sites in Solomon Island: the Aola Case, Guadalcanal Island. Solomon Is National Museum Discussion Paper., Fitzgerald 1993 Social Aspects of Forest Resources and Natural Forest Management . Draft report for UNDP and UKODA, Honiara. November. 24 Herbert 2007 25 Greenpeace and Oliver 2001 26 Ibid 27 Olsen and Turnbull 1993, MFEC 1994: Distribution of Logging Revenue, Paper 1.6, proceedings of conference on forest policy and law, 25-27th November. 28 Greenpeace International 2008: ‘Tropical Deforestation Emission Reduction Mechanism (TDERM) – a discussion paper. Report written by Billl Hare and Kirsten Macey. Amsterdam. 52p 29 Office of the Auditor-General 2005: For example, in 1999 despite alarm bells being rung by NGOs and local landowners, Malaysian company Silvania were given approval to develop an oil palm plantation project on Vangunu Is in Marovo lagoon. To date only 700 ha has been planted and planting has stopped but the whole plantation development area has been logged out. 30 Office of the Auditor-General 2005 31 ADB 1998, Price Waterhouse 1995 32 ADB 1998 p66 33 Duncan 1994 34 Ministry of Forests, Environment and Conservation 2006 35 Various annual reports 36 Assuming a conversion rate of sawmilling of 40% - to produce 1 m3 of sawn timber would require 2.5 m3 of round log. 37 Costanza etal 1997: The value of the world’s ecosystem services and natural capital. Nature. London: May 15. Vol. 387, Iss. 6630, pg 253. 38 At 1997 US$ values 39 e.g. Cassells 1992: Tropical Rainforest: subsistence values compared with logging royalties. Proceedings of Conference ‘Development that Works’ Lessons from the Pacific. Massey University, Palmerston Nth, New Zealand. August. 11p, Royal Forest and Bird Protection Society 1993: Big Bay National Park Proposal and Opportunities for Sustainable Development. Unpublished report. October. 65p + appendices., Lafranchi and Greenpeace Pacific 1999. 40 Lafranchi and Greenpeace Pacific 1999 41 Stern (Ed) 2007: ‘The Economics of Climate Change: The Stern Review’, Cambridge University Press, Cambridge, UK. 42 Assuming a conservative 150Mg C/ha (t/ha) of intact natural forest (ranges recorded of 164 to 250 Mg C/ha. In: Gibb etal 2007: ‘Monitoring and estimating tropical forest carbon stocks: making REDD a reality. Environmental Research Letters: 2: Oct-Dec 2007) and a carbon price of US$5/t C (Carbon prices range from $5 to $30/tonne). 43 Examples of forest carbon financing include Harapin forest in Sumatra, Indonesia by Birdlife International, and 750,000 ha of forest conserved with the support of an US$9 million carbon payment by US Banker Merrill Lynch

Securing the Future: An Alternative Plan for Solomon Island Forests and Economy

11

PO Box 3307 Sydney NSW 2001 Phone: (+612) 9261 4666 Fax: (+612) 9261 4588 © Greenpeace/Solness

Australia Pacific

www.greenpeace.org.au © Greenpeace Australia Pacific Ltd April 2008