Solomon Island's and Deforestation (SOLOMON)

          CASE NUMBER:        183
          CASE MNEMONIC:      SOLOMON
          CASE NAME:          Solomon Island Deforestation

A.   Identification 
1.   The Issue
     The Solomon Islands, a country of the western South Pacific,
have seen drastic increases in logging in recent years, to
unsustainable levels that could decimate the nation's tropical
forests within a decade, endangering indigenous flora and fauna. 
The government has moved to regulate the logging companies, which
are principally Malaysian, instituting a moratorium on new export
licenses and planning a ban on log exports.  However, the extent of
the problem, and the necessary countermeasures, are matters of
political contention in the country.    
2.   Description
     The Solomon Islands is a heavily forested country occupying
much of the archipelago of the same name, in the western South
Pacific.  The total land area is less than 11,000 square miles, and
the population is only about 375,000.  Per capita income is low,
about $700 in 1991, and much of the populace engages in
agriculture, for subsistence or export.  Significant exports are
timber and fish.
     Sustainable timber harvests are calculated to be 325,000 cubic
meters per year, and were less than that through 1991.  By 1993,
however, the harvest jumped to 700,000 cubic meters, and in 1994
possibly as much as 3 million.
     This was the result of Indonesian and especially Malaysian
companies turning to external sources after their own governments
placed restrictions on exploitation of local forests.  Locked into
long-term contracts with Japanese and South Korean importers, the
companies had to look abroad, and found ready sources in Papua New
Guinea, the Solomon Islands, and Vanuatu.
     The World Bank estimated that the Solomon Islands would
deplete its current forests in eight years at the rate achieved by
the early 1990s, potentially devastating fauna, flora, and the
overall living conditions of the country.
     Amidst growing external concern, Australia offered in the fall
of 1994 to engage in a $2 million debt-for-nature swap, to protect
the Morovo Lagoon from logging.  Meeting in the fall and summer of
1994, the South Pacific Forum, a group of fifteen independent South
Pacific countries including the Solomon Islands, sought to
establish common regulations that would reduce the ability of
foreign companies to play countries off on each other, and
established the goal of sustainable forestry in the region.
     The government of the Solomon Islands, under Prime Minister
Hilly, also took action, announcing a moratorium on new logging
licenses, and declaring that a ban on logging would go into effect
in 1997.
     This did not sit well with voters and pro-logging forces. 
Foreign companies would often approach the local populace in a
target area, and offer to build schools, airfields, and other
facilities that the government was unable to provide. Restrictions
on logging threatened to cut off these arrangements.
     In October of 1994, Prime Minister Hilly lost majority support
in parliament, and was replaced by Solomon Mamaloni, who was
reportedly backed by logging interests.
     From 1989 to 1993, Mamaloni's previous term, logging rates had
tripled.  Mamaloni generally down played the possibility of there
being an ecological problem in the Solomon Islands and has
expressed hostility to Australian interest in his country's
environmental affairs, including debt-for-nature swaps.  The
logging ban that was to have taken effect in 1997 was moved back to
1999.  However, his government has so far retained the moratorium
on new logging licenses.
     The Solomon Islands does not appear to be on a clear path to
sustainability, with potentially dire results for the country's
natural systems and populace.  Unrestricted logging could result in
devastated forests, severe erosion, local climate change, loss of
water resources, and disruption of marine environments.
     Whole-sale logging could imperil one of the country's most
promising economic activities, tourism, which grew 6.8% in the
region from 1988 to 1993, substantially faster than in the rest of
the world.  A degraded environment, and the disruption in
traditional culture that this would bring, will greatly decrease
the Solomon Islands' attractiveness to tourists.  It may be that
the populace itself does not currently wish to live with the
restrictions that sustainability would require, instead wishing to
obtain the immediate gain that one-time sale of their tropical
forests would bring.
3.   Related Cases
AFRICA Case
AUSTRIA Case
DUTCHWD Case
INDONES Case
MALAY Case
BRAZIL Case
COLDEFOR Case
COSTBEEF Case
4.   Draft Author: Joshua Calder
B.   Legal Cluster
5.   Discourse and Status:  DISagree and In Progress
     It is a matter of contention in Solomon Islands politics
whether the logging situation presents a clear danger to the
country's future, though the new government has retained the
moratorium on new logging licenses.
6.   Forum and Scope: Solomon Islands and UNILATeral
     National laws and rules govern logging in the country.
     The fifteen-nation South Pacific Forum plans to adopt a common
code of conduct that would standardize regulation of logging among
its members.
7.   Decision Breadth: 1
8.   Legal Standing: LAW
     Logging in the Solomon Islands is being regulated by the
national laws and rules of that country's government.  A moratorium
on issuing new logging licenses is currently in force, though this
may be discarded by the new Mamaloni government.  Almost
immediately upon assuming office, the government reduced the duty
on round logs from 65% to 35%.
     An export ban is currently scheduled to go into effect in
1999; before Mamaloni returned to office, it was planned for
1997.  One study has suggested that current regulations, if
adequately enforced, could significantly increase the revenue from
logging, while reducing its volume.  It estimated that revenues
equal to almost half the value of the country's exports were being
lost to under-reporting of timber harvests, smuggling, and transfer
pricing by foreign companies.
     The government has charged a 7.5% reforestation levy on timber
harvests since 1984, but used the revenue for its general
expenditures.  Beginning in 1995, it is planned to return these
funds to landowners, for use in approved projects.
     The South Pacific Forum countries are attempting to formulate
a Code of Conduct that would standardize logging contracts and
regulations among its fifteen members.  They are also considering
export quotas.
C.   Geographic Filters
10.  Geography
     a. Continental Domain:   Pacific
     b. Geographic Site:      SPAC
     c. Geographic Impact:    Solomon Islands
     The Solomon Islands are in the western South Pacific, east of
Papua New Guinea.  The country of the Solomon Islands occupies all
but the northern portion of the island chain of the same name.
11.  Sub-National Factors: NO
12.  Type of Habitat: TROPical
     The primary habitat affected is tropical rain forest, of which
the country has some 2.4 million hectares, about 92 percent of the
land area.  Secondary effects also threaten marine environments,
particularly coral reefs.
D.   Trade Filters
13.  Type of Measure:  Export Ban [EXBAN] 
     The regulatory measure currently in force is a moratorium on
issuing new logging licenses.  The South Pacific Forum Code of
Conduct is planned to include regulatory measures for the conduct
of logging, and export quotas among group members.  An export ban
is currently scheduled to go into effect in 1999.
14.  Direct vs. Indirect Impacts:  DIRect
     The Solomon Islands government is taking measures that
directly affect the cutting and export of timber.
15.   Relation of Measure to Impact
     Directly related:        Yes WOOD
     Indirectly related:      No
     Not related:             No
     Process:                 Yes DEFORestation
16.  Trade Product Identification: WOOD
17.  Economic Data
     Timber exports were worth millions of dollars in the early
1990s, and in 1992 supplied 37.1% of total export earnings, more
than any other commodity.  They accounted for forty to fifty
percent of government revenues.
18.  Degree of Competitive Impact: MEDium
     If the South Pacific Forum's proposed Code of Conduct were
implemented, it would be more difficult for companies to gain
concessions at extremely low rates, and would require them to be
more attentive to environmental needs, such as reforestation.
     This would likely have effects constituting more than twenty
percent of the value of the product, placing the measures in the
`medium' category of impact.  The Solomon Islands government has
placed a moratorium on new logging licenses, which is likely to
push prices upward.  An outright ban on timber exports is scheduled
to go into effect in 1999.
19.  Industry Sector: WOOD
20.  Exporter and Importer: Solomon Islands and Japan
     Malaysian companies appear to be the chief loggers in the
Solomon Islands.  In 1994, it was reported that a Malaysian holding
company had timber concessions for 458,194 hectares of land in the
islands, which is 16% of the entire land area of the country.
The logging companies operating in the South Pacific apparently
supply timber chiefly to Japan and South Korea.  Japan is the
world's leading importer of tropical woods.
21.  Environmental Problem Type: DEFORestation
     The primary problem is habitat loss through deforestation, a
source problem.  This leads to secondary problems of species loss,
another source problem, and destruction of marine environments
through excessive siltation.
22.  Species information
     Excessive logging in the Solomon Islands potentially threatens
endemic flora, insects, and marine species.  Thousands of square
miles of tropical rain forest are potentially threatened, and rain
forest is one of the most species-rich habitats.  Small and
isolated, islands also tend to be host to unique endemic species. 
The Solomon chain is likely to be rich in insects, birds, and
plants.
23.  Impact and Effect: MEDium AND STRCT [Structural
     As Southeast Asian incomes and environmental awareness rise,
companies are prevented from logging in their home countries.  This
new economic strength simultaneously facilitates their exploitation
of small, politically open Pacific states, whose size and relative
poverty make them both easily penetrable and highly vulnerable to
ecological disruption.
24.  Urgency and Lifetime: HIGH and 8 years
     The World Bank has estimated that the rainforests of the
Solomon Islands could be depleted in eight years unless present
trends are halted.
25.  Substitutes: RECYCling
26.  Culture: YES
     The retention of traditional land rights and governance is
important in the South Pacific.  During the colonial era,
substantial authority was left in the hands of traditional
structures, and indigenous culture survived largely intact.
In this instance, local control of land makes countries highly
vulnerable to penetration by resource-rich and well-organized
outside forces, which can circumvent central governments, cutting
deals with local chiefs and councils.
26.  Human Rights: NO
27.  Trans-Boundary Issues: NO
28.  Relevant Literature
Callick, Rowan.  "Australia: Maverick PM to Test Canberra's
          Patience - Solomons."  Australian Financial Review,
          November 2, 1994.  Nexis/Lexis.
O'Callaghan, Mary-Louise.  "Solomon Islands: Solomons' New  PM to
     Review Logging."  Sydney Morning Herald, November 8,
     1994.  Nexis/Lexis.
Reuters.  "World Bank Warns South Pacific on Environment."
     February 16, 1995.  Nexis/Lexis.
Seneviratne, Kalinga.  "South Pacific: Islands Push Out 
     Asian Loggers."  Inter Press Service, August 6, 1994.       
     Nexis/Lexis.
Son, Johanna.  "South Pacific-Environment: Island States
     Move to Curb Logging."  Inter Press Service, February  
     21, 1995.  Nexis/Lexis.
Stewart, Gerald.  "A South Pacific Paradise Goes Begging." 
     Deutsche Presse-Agentur, November 22, 1994.  Nexis/Lexis.