Emad Mekay

WASHINGTON, Dec 20 2001 (IPS) — The World Bank has approved a new segment of a loan to Papua New Guinea despite strong opposition from local landowners and environment activists who say the project endangers the world’s third largest rainforest.

In an electronic statement released Wednesday the Bank said it approved a 17.36 million dollar loan and 17 million dollars grant to the Southeast Asian country Tuesday. The money will go to a project that will ôhelp improve conservation of important forest ecosystems in the Southeast Asian country, one of the world’s most biodiversity-rich regions.ö

ôThis should result in the long-term maintenance of biodiversity and an increase in the well-being of forest owners,ö the bank said in a statement.

But James Douglas, World Bank Task Manager for the project said that protecting the forests ôwill depend heavily on the efforts of the Government, and its recent support of forest protection measures is an encouraging sign.ö The forests cover 36 million hectares and is home to thousands of plant species and hundreds of birds and animals,

In a statement released hours before the Bank made its decision on the loan, Bank critics, environmentalists and lawyers of affected landowners said the bank failed to adhere to its very own policies on conservation.

Landowners in the Kiunga-Aiambak area of the Western Province in PNG filed a complaint earlier this month to the Bank’s Inspection Panel, an independent forum for people directly affected by Bank funded projects, to protest against ôthe Bank’s failure to adhere to policy and commitments regarding rainforest conservation.ö

This is the first time such a claim has been lodged by landowners in Papua New Guinea, a country of only five million people and is known for its rich biodiversity. Local landowners say they have now exhausted their options with the government of PNG and the Bank and wanted a fair position from the inspection team who is yet to look into the matter.

Landowners and Bank critics say although Bank loans to the government of PNG include a moratorium on new logging as a condition, neither the Bank or the government was honouring their agreement.

The owners claim that illegal logging, the new Kiunga-Aiambak road project, the expropriation of the their forest by the state and the logging company have all negatively damaged the lands there and caused them ôeconomic, social, environmental and cultural loss as a result of the illegal logging on their land.ö

In an electronic petition, Forests.org, an environmental watchdog, claimed that illegal logging along the Kiunga Aiambak road has the environmental damage there reached millions as logs worth millions of dollars are unlawfully removed. Protesting landowners have been unlawfully imprisoned, beaten and tortured, the group said.

The claims couldn’t be independently verified. Bank officials in its Washington headquarters did not return phone calls on the issue.

ôDespite having been brought to the attention of the government and the World Bank, nothing has been done so far to stop the illegal logging operations,ö said The Centre for Environmental Law and Community Rights Inc. (CELCOR), which represents more than 300 affected landowners in the Kiunga-Aiambak area of PNG.

ôThe World Bank has not followed its policies nor held the government of PNG accountable for meeting its forest conservation commitments under the loan,ö CELCOR said.

“We feel that the Bank is not doing enough to address the governance problem so far as the forest industry is concerned,ö said Damien Ase, Executive Director of CELCOR. ôThis has caused irreversible harm to the claimants land and forests.”

“It is high time institutions such as the World Bank follow their approved operational policies to deal with governance issue and to help PNG to achieve its constitutional ideal of fair and equitable society and sustainable development for all,ö said Ase. ôSustainable economic and social goals will not be achieved until there is transparency and accountability at all levels of government.”

The Bank’s decision to go ahead with further loans to the PNG government is a blow to the landowners and the activists who saw a freeze on the loan as a way to pressure the government to reverse what they say is an ecologically damaging practice to the world’s third largest remaining rainforest.

To the PNG government, this is good news. The government has had considerable success in attracting international support, specifically gaining the support of the Bank and its sister organisation, the International Monetary Fund, in securing development assistance loans.

There has been little growth in the last half of the 1990s, with real Gross Domestic Product in 2000 grew by three percent, not enough to compensate for population growth, according to the Bank.

A new administration under the leadership of Prime Minister Mekere Morauta in July 1999 has promised to toe the Bank’s line and restore ôintegrity to state institutions, to stabilise the kina (the local currency), to restore stability to the national budget and to privatise public enterprises.”