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Indonesia and PNG fearful new timber law will impact trade
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Indonesia and Papua New Guinea are fearful that the proposed law to stop illegally logged timber from being imported into Australia will have a devastating impact on trade. The Australian government has been criticised for not consulting widely enough on the planned changes. Source: ABC Radio Australia
Federal Labor MP Kelvin Thomson told parliament that Australia is the largest importer of processed timber from Papua New Guinea, where the World Bank estimates 70% of the logging is illegally conducted and that Indonesia is losing more than two million hectares of forest per year to logging and burning.
About 90% of the timber used to build houses and other wooden products in Australia is grown domestically. But an estimated 5% of solid wood products are imported from countries such as Indonesia, PNG, Malaysia and China.
This month, Australia's Lower House passed the Illegal Logging Prohibition Bill. The law will require that any building timber, wooden products, paper or packaging have been sourced legally, whether from Australia or elsewhere. The legislation has support from both major parties, The Greens, unions and major timber sellers.
Bob Tate, from the Papua New Guinea Forest Industries Association said that he would prefer the law not be passed. PNG only sends a small amount of timber to Australia but Tate said the impact on the industry would be devastating.
Tate said that it's a question of timber traders being able to absorb the extra costs involved in proving logs are legal. The bigger companies will probably survive, but others will be forced out.
Indonesia is another key timber exporter to Australia and the Indonesian Government made a submission to one of three Senate inquiries into the new law, urging more consultation and suggesting the bill should be delayed.
Denny Lesmana, First Secretary for Economic Affairs at the Indonesian Embassy in Canberra said that there were growing concerns expressed by Indonesian stakeholders that the implementation of the regulations may not be inline with WTO.
Indonesia wants Australia to recognise its relatively new timber verification system, known as SVLK, which has been accepted by the European Union.
If the law is passed by Australia's upper house, the Senate, a two-year transition period will begin and in that time many of the details will be hammered out.
The biggest questions are which are of 30,000 or so timber products would be covered by the law, and what verification systems will be recognised by Australia.