Call to cease forestry lending overruled

1 January 2002

The Centre for Environmental Law and Community Rights (CELCOR) in Papua New Guinea filed, in early December, a claim to the World Bank inspection panel after illegal logging made some 300 landowners “lose their land and forests through bad forest governance”. This happened during a US$90 million Governance Promotion Adjustment Loan (GPAL) by the World Bank to the government of Papua New Guinea. This was partly intended to improve forestry management “through legislative, institutional and economic reforms”.

Landowners called on the World Bank to suspend the second tranche of the loan until illegal logging in the Western Province surrounding the Kiunga-Aiambak road project was stopped. They also demanded new logging concessions should be withheld until there is effective forest sector reform.

“It is high time the World Bank follows its approved policies on governance issues,” commented Damien Ase, Executive Director of CELCOR.

The call to the World Bank inspection panel was registered on 3 December 2001. On 20 December, despite this call, the World Bank approved the release of the US$35m second tranche under the GPAL for Papua New Guinea. In addition to forestry reform, the GPAL is to support fiscal transparency, combating corruption, budget and debt management, institutional reform, health and education services, privatisation of the banking and other sectors.


World Bank Inspection Panel

World Bank support in Papua New Guinea