To celebrate the 50th anniversary of independence in Papua New Guinea, for the month of September Australian Policy and History is publishing policy briefs written by students studying at Honours, Masters or Doctoral levels who attended a June 2025 intensive workshop on Papua New Guinea and Australia, sponsored by DFAT and run by Deakin’s Centre for Contemporary Histories, at the National Portrait Gallery in Canberra.

Attention: Hon. Salio Waipo, Minister for Forests, Papua New Guinea 

Title: Strengthening Forest Governance: A Bilateral PNG–Australia Framework to Tackle Illegal Logging, Tax Evasion, and Corruption 

Executive Summary:  

Illegal logging, tax evasion, and transfer pricing manipulation continue to cost PNG millions annually while eroding governance and environmental integrity. Over 70% of PNG’s logging operations remain illegal or suspicious, undermining the nation’s international reputation, market competitiveness, and equitable development. This brief recommends negotiating a bilateral regulatory and marketing agreement with Australia to address corruption, strengthen certification systems, implement fair transfer pricing, and position Australia as a regional timber marketing hub under joint regulatory oversight. This strategy ensures legality, fair returns to landowners and the state, and sustainable market expansion aligned with climate, development, and anti-corruption goals. 

The Problem:  

Illegal logging has persisted in PNG since the 1980s, facilitated by opaque concession allocation, weak enforcement, and entrenched corruption networks. Transfer pricing manipulation by logging multinationals, declaring artificially low export prices to related offshore subsidiaries, continues to deprive PNG of tax revenue and royalties (Lawson, 2014; Nelson et al., 2014). The Environmental Investigation Agency (2021) estimated that over 70% of logging is illegal or suspicious, while Dauvergne (2001) documents governance erosion driven by foreign timber companies exploiting institutional weaknesses. As the PNG Forest Authority struggles with funding and political interference (Filer, 2004), Australia remains a potential bilateral partner to support transparency, legality, and fair-trade practices under its Illegal Logging Prohibition Act 2012 (DAWE, 2021). 

Policy Alternatives: 

  1. Maintain Status Quo: Current arrangements risk continued illegal logging, corruption, and lost revenue. 
  1. Strengthen Domestic Enforcement Only: While necessary, past enforcement reforms show limited success due to political-business interests undermining independent oversight (Filer & Sekhran, 1998). 
  1. Establish a Bilateral PNG–Australia Regulatory and Marketing Arrangement (Recommended): Integrate external certification, auditing, and anti-corruption frameworks by positioning Australia as the marketing hub under bilateral regulation. 

Policy Recommendations: 

  1. Negotiate a Bilateral MoU with Australia: Establish trade, regulatory, and enforcement cooperation under an MoU aligning PNG’s Forest Act with Australia’s Illegal Logging Prohibition Act for timber legality verification. 
  1. Adopt Australian Certification Standards: Require Australian Forestry Standard (AFS) or Forest Stewardship Council (FSC) certification for PNG timber exports marketed through Australia to guarantee legality and sustainability (FSC Australia, 2020). 
  1. Implement Transfer Pricing Oversight Mechanisms: Engage Australian Taxation Office (ATO) expertise to audit and monitor transfer pricing practices in PNG’s timber exports to prevent tax evasion. 
  1. Integrate Anti-Corruption Conditionalities: Make public disclosure of logging concessions, contracts, and beneficial ownership mandatory under the bilateral framework, following Extractive Industries Transparency Initiative (EITI) models (EITI Secretariat, 2020). 
  1. Develop Joint Enforcement and Capacity-Building Programs: Facilitate training, secondments, and operational task forces between PNG Forest Authority, PNG Customs, Australian Federal Police (AFP), and ATO to strengthen enforcement, auditing, and financial crime investigation capacity. 

Implementation:  

The proposed policy requires establishing an inter-agency taskforce under PNG Forest Authority with representation from CCDA, PNG Customs, IRC, and bilateral liaisons with Australian agencies. Legal harmonization will align timber export regulations with Australian standards, supported by capacity-building and funding through Australia’s DFAT development cooperation programs. Phased implementation should prioritize high-risk provinces for initial certification rollouts. 

Risks and Mitigation:  

Potential sovereignty concerns may arise regarding external oversight. Mitigation includes co-designed frameworks retaining PNG ownership while integrating Australian technical expertise. Resistance from entrenched logging interests can be addressed through transparent consultation, robust legislative backing, and ensuring customary landowner benefit-sharing is embedded in reforms. 

Stakeholder Impacts: 

  • Landowners: Gain fairer royalties and legal recognition. 
  • PNG Government: Increases tax revenue and governance credibility. 
  • Logging Companies: Face stricter compliance but benefit from premium certified markets. 
  • Australia: Strengthens regional environmental security and trade integrity. 

Conclusion:  

A bilateral regulatory and marketing arrangement with Australia presents PNG with a strategic opportunity to combat illegal logging, restore governance credibility, secure fair returns for landowners and the state, and enhance sustainable development outcomes. 

 

Contact: Patrick Materua Dobunaba

Australia Awards Student – Masters of Environmental Management, University of Queensland

Email: pd08unaba@gmail.com

 

Sources Consulted:  

Dauvergne (2001); Department of Agriculture, Water and the Environment (2021); Environmental Investigation Agency (2021); Filer (2004); Filer & Sekhran (1998); Forest Stewardship Council Australia (2020); Lawson (2014); Nelson et al. (2014); Extractive Industries Transparency Initiative Secretariat (2020). 

Patrick Materua Dobunaba

Patrick Materua Dobunaba is an Australia Awards Scholar from Papua New Guinea, of Milne Bay and Central Province heritage. He holds a Bachelor of Forest Science from the Papua New Guinea University of Technology (program completed 2016; graduated 2017). Over 17 years with the PNG Forest Authority, he worked as a forest entomologist and researcher, supporting forest health surveillance and evidence-based management. In 2025 he commenced the Master of Environmental Management at The University of Queensland, with expected graduation in 2026, to deepen expertise in sustainable resource governance and climate-resilient development. Patrick is married with four children and currently resides in Brisbane.