PORT MORESBY, Papua New Guinea (PNG Post-Courier, Sept. 5) - The World Bank has suspended the K156 million Forestry Conservation Project (FCP) because the Papua New Guinea Government did not comply with legal agreements.

Indications drawn yesterday showed that the World Bank was miffed over the lack of compliance in dealing with three Timber Authority projects — the Aiambak-Kiunga project being developed by Pacific Concord, the Vailala Timber Project, and the Wauvi-Guavi Timber Project.

World Bank’s country manager Mahesh Sharma said that the suspension was a required step.

"But we should also be clear that the Government has made substantial progress in dealing with some of the complex and challenging problems in the forestry sector," Mr Sharma said. "This is not cancellation, but rather a necessary step to allow time to get things back on track."

Chief Secretary Joshua Kalinoe indicated yesterday that the Government wanted the FCP to continue to help reform the forestry sector.

"More needs to be done to ensure that the forestry operations are sustainable for the benefit of the people of PNG, and that they comply with the law of the country," Kalinoe said. "Despite the suspension, a few on-going FCP-supported activities would continue, notably the review of operating forestry projects, currently being undertaken with staff of the National Forest Service, the Department of Environment and Conservation and other agencies with responsibilities in the sector."

He urged all industry stakeholders to co-operate fully with the review team in fulfilling its task, which was primarily aimed at improving forest management to achieve greater sustainability.

The suspension means that there will be a halt in any new funding for projects that were not yet initiated under the FCP. The project management unit under the leadership of Kanawi Puru and engaged contract officers will continue to work. A government spokesman said the Aiambak-Kiunga project was in the National Court with a ruling likely this week.

September 5, 2003

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