Riesgo de ingreso de nuevas empresas (Enfoque en América

The results of Phase 2 of the study were presented under four categories: ‘Organisation of the LOC business’, ‘Management of the LOC business’, ‘LOC business group’ and ‘Support by PNGFA’. The category Organisation of the LOC business’ has seven sub-categories, the category ‘Management of the LOC business’ has four sub-categories, the category ‘LOC business group’ has two sub-categories and the category ‘Support by PNGFA has one sub- categories. The summary of the results is presented according to the four categories and their sub-categories.

The category ‘Organisation of the LOC business’:

• ‘Company structure elements’: All of the respondents from the three LOCs agreed strongly that their LOCs had nothing more that an operating business name. They never had an official address for service or even a physical or permanent address for their business activities. Membership of the LOC business was free and on the criteria of being a incorporated landowner clan that had consented to a timber concession agreement. Furthermore, the three LOC respondents were uncertain as to whether their LOC business had any by-laws or a constitution to govern the conduct of members and business in general. On the whole, the results demonstrated that the three LOCs lacked necessary company structure elements.

• ‘Business objective’: All of the respondents from the three LOCs agreed strongly to social or service orientated objectives and disagreed strongly to profit orientated objectives. The social or service orientated objectives relate to major impact projects that would benefit every landowner in the community. Such projects include roads and bridges, and permanent buildings for schools and community use. On the whole, the results demonstrated that the respondents from the three LOCs had a higher preference for social or service orientated objectives than for profit orientated objectives.

• ‘Business plan’: Over 95 percent of the respondents from the three LOCs were uncertain as to whether a business plan existed, but if it did exist, the respondents agreed strongly that much needed development projects probably were not be in the plan. Even if they were in the plan, it would be only a listing of the projects without their technical details. The greatest disappointment expressed by the respondents of the three LOCs was thei inability to contribute to the development of the business plan, as everything was done in a hurry so as to get their LOCs registered quickly to enter into the forest concession agreement. On the whole, the respondents from the three LOCs and through the results, demonstrated that the three LOCs probably had a business plan that was incapable of delivering to the expectations of their landowners.

• ‘Management structure and landowner representation’: The management structure typical of a company adopted like that of the three LOCs, would comprise a business leader, a secretary, a tresurer and four representatives from each of the forest blocks of the timber project area. While this structure is standard and requires representatives to manage the LOCs, all the respondents from the three LOCs through this had not happened to their LOCs. Over 95 percent of them were of the view that the composition of the executive positions, was not representative of the different landowner clans or groups of a timber project. In addition, over 95 percent of the respondents from the three LOCs agreed strongly that none of the management positions were ever defined in terms of their responsibilities and power, and as a result the business leader became too powerful. All respondents agreed strongly to the idea of rotating the position of business leader on a forest-block by forest-block basis with leadership changing hands when the logging operation moved from one forest block to another. On the whole, the adopted management structure and the composition of individuals in the different executive positions for the three LOCs was poorly reflective of the full number of landowners in the timber project area.

• ‘Appointment of LOC executive’: Over 95 percent of respondents from the three LOCs agreed strongly that the appointments of their business executives was poorly done, as proper

processes such as meeting notices, attendance of representatives of the different landowner clans, call for norminations, and use of secret ballots, were never adopted. Furthermore, the respondents also agreed strongly that process of appointment was too much influenced by the same individuals who had pushed for the introduction of the timber projects in the first place. On the whole, the process through which individuals got appointed to the different executive positions was never fair and transparent.

• ‘Business contract’: Over 95 percent of the respondents from the three LOCs agreed strongly that the documentation of the business contracts between the State and the LOCs for the acquisition of forest resources for the commercial logging operation, were never prepared by executives of the three LOCs. Landowners know nothing about it or was never consulted for their input. More than 95 percent of the respondents did not even know what was contained in the business contract, but what they did know for sure was that, the business executive could not have done better in negotiating for them the range of tangible benefits for their communities as they did not have the capacity to do so. On the whole, and for all three LOCs, the business contracts and in particular their documentation, was done in isolation from the landowners, signed by the State and LOCs, and never made known to the majority of the landowners.

• ‘Business capacity’: Over 95 of the respondents agreed strongly that the three LOCs lacked the necessary business knowledge, skills, experience, machinery and funds to serve the needs of the landowners. Particularly with regard to the funds, the payments were irregular and varied in amounts, and were inadequate and unrealistic for the kinds of projects expected by the landowners in their village communities.

The category ‘Management of LOC business’:

• ‘Mandatory company responsibility’: All the respondents from the three LOCs agreed strongly that mandatory responsibilities such as regular business meetings, annual financial reports, safe keeping of all business information or records, and filing of annual tax returns, were never performed by the three LOC executives at any time in all the years after the formation of the LOCs. On the whole, and for all three LOCs, the LOC executivses failed in their many mandatory responsibilities as head of a business organisation.

• ‘Funding of development projects’: More than 98 percent of respondents from the LOCs agreed strongly that no funds were ever committed by their businesses for the construction of a single project that would have benefited the village communities. Ideally, the

construction of roads and bridges was what the landowners wanted but over 95 percent of the respondents were unsure as to whether the LOCs had the funds for that or not, as such information hardly ever got to the landowners. On the whole, the ability of the LOCs to fund development projects was severely limited and anyway unknown to the landowners from the three LOCs.

• ‘Enforcement of the business contract’: More than 95 percent of respondents from the three LOCs agreed strongly that the LOC executive had failed to apply pressure on the logging company as well as PNGFA, for the timber project to deliver tangible development projects to the communities involved in the timber projects. It was because of the promise of tangible development projects that landowners consented and alowed access to their forest resources. Similarly, all the respondents from the three LOCs agreed strongly that the LOC executive never helped the landowners with their compensation demands against the logging company, nor did they insist the logging company operate according to the set logging and environment protection laws of the country. The landowners also felt that the too-cosy working relationship between the business leaders and the logging company had compromised the ability of the business leader to act independently and in the interest of the LOC business. In general, all the respondents from the three LOCs agreed strongly that the business leaders, never at any time, went out of their way and did things for the benefit of the landowners and their LOC businesses. On the whole, and for the three LOCs, the business executives failed in their part to enforce the business contract so that funds intended for development projects, (if any), actually did get delivered for the benefit of all the landowners.

• ‘Working relationship’: Over 98 percent of the respondents from the three LOCs agreed strongly that the business leader never worked with or had frequent business meetings with their executive members and the landowners, never addressed their many issues, never informed them on what was going on with their business or how their funds were being managed, and never involved them in the many business decisions. The leadership and managerial qualities of the three LOC executives was poor. For all three LOCs, the working relationship was poor, due to poor leadership and managerial conduct on the part of the business leaders.

The category ‘ LOC business group’:

• ‘Knowledge and understanding of different landowner clans’: All the three LOC respondents indicated that they knew all of the landowners in their ILG group (at the village

level), however as the group got bigger, as in the cae of large forest blcok, they did not know all. And regarding the entire timber project area or theforest blocks, the landowners did not know each other at all. On the whole, knowledge and understanding of the other landowners was an asset with smaller groups but was absent in the case of the larger group.

• ‘Landowner group and working relationship’: More than 95 percent of the respondents from the three LOCs agreed that size of the LOC business group made it practically difficult for all the landowners to attend meetings. A general agreement by all respondents is that the size of the LOC business group is big, however over 95 percent of the respondents from the three LOCS saw no problems about working with other landowners whom they have no knowledge of or relationship with, and in some cases were tribal enemies or rivals before. The respondents mentioned the difficulty that with such a large size of the LOC business group, the opinion of the landowners may not be given due to respect, and it could be very hard to arrive at agreement, decisions or conscensus. On the whole, the LOC business groups were too large, creating problems relating to unity, participation and collective decision making; but the respondents saw it differently, attributing most of the problems to the three executive or business leaders of the three LOCs.

The category ‘Support by PNGFA’:

• ‘Support by PNGFA’: More than 95 percent of the respondents from the three LOCs were uncertain as to whether PNGFA had ensured that the logging companies actually delivered on the development projects agreed to under the business contract; and they were uncertain in general as to exactly what the role of PNGFA was with regard to their many issues. On the whole, PNGFA has appeared very much unaware of the many concenrs and issues in total total contrast to the beginning of the timber projects when they mobilised landowners to come on board.

6.6 Chapter Summary

This chapter contained results from Phase 2 of the study. The results were in the form of mean scores for the different statements. The statements highlight issues that relate of each of the aspects of LOC businesses. These aspects focus on their organisation, management, business groups, and support by PNGFA. The results were presented in Section 6.4, with a summary in Section 6.5 as follows:

• The three LOC businesses were noted to have similar problems relating to the many aspects of organisation;

• The three LOC executives have failed in their many business responsibilities that were of benefit to the landowners;

• The LOC business groups were too big, complex, diverse and lacked structure, resulting in problems with their management;

• PNGFA was never supportive of the many landowners’ problems, concerns, and issues.

Chapter 7