The importance of a sound policy and institutional framework in forestry cannot be overemphasised. This sector is so important for the economy of the Solomon Islands, accounting for about one-third (3.9 percentage points) of the overall economic growth of 10.3% in 2007. It also contributes significantly to employment creation, revenue generation, and development of infrastructure in rural areas. However, the rapid decline in natural forests due to unsustainable logging has negative consequences; not only in terms of serious economic implications, but it also results in widespread adverse environmental impacts (e.g. soil erosion, and sedimentation, water quality impacts, loss of habitat and biodiversity, and loss of future opportunities for alternative sustainable livelihoods). Thus, as a consequence, it reduces income-generating opportunities from land-based resources.

The Forestry Bill 2004 is a draft bill that is the result of more than two decades of efforts to put in place a new law to replace the outdated and unpopular Forest Resources and Timber Utilisation Act 1969, which . with all its confused amendments . has been the main source of the problems currently experienced in the forestry industry. The Forestry Bill 2004 provides for the conservation of forests and the improved management of forest resources, control of timber harvesting, encouragement and facilitation of sustainable forestry activities, establishment of plantations, and, domestic processing of timber. Even though the bill has been subjected to considerable public consultation, it has been seen as lacking satisfactory landowner consultation, and thus has been perceived as lacking local ownership, including a perception that it has been driven too much by foreigners. It has therefore suffered undue political dissection.

The critical issue facing forestry in the Solomon Islands is the rapid depletion of its natural forest resources and the rather late proactive programme of replacement plantation forest resources to sustain the local industry. Wood flows from the natural forests are in rapid decline with exhaustion earmarked to begin to occur in 2011. This issue has serious implications for the sustainability of the forest industry, trade in forest products and rural development generally. The impacts are already felt, with the industry adapting to the resource situation by re-entering previously logged areas to extract super-small grades of natural timber and reverting to portable sawmilling technology to stay viable. The downside to this, however, is the loss in milling efficiency, and of value-added processing that only larger economies of scale allow. Further, neither industry nor smallholder plantation forest resources are coming on stream to sustain local sawmills. KFPL and Eagon Resources Pacific Limited are involved mainly with round log exports, rather than on-shore sawmilling of logs from their plantations.

The Solomon Islands is thus at the crossroads in terms of forest development. It must decide if it will maintain the status quo, and eventually be forced into depending on timber imports. Alternatively, the Solomon Islands may opt to strengthen both industry and smallholder plantation forest resources from which to supply local demands and for export. The Solomon Islands exports of round log and sawn timbers are significant, primarily because it has the genetic material, technical expertise and the climate to produce world class timber species such as mahogany, teak, rosewood, taun(akwa) and several others.

The role of forests in water resources management is fully appreciated and work in protecting the important aatersheds is one of the government’'s priorities. The forest areas already designated for protection as national parks contribute significantly to this purpose, and demonstrate the benefits of the Solomons’' integrated multiple-use approach to forests and water resources management. The challenge, however, is maintaining this integration and balance, in the face of growing threats of factors such as agro-deforestation and forest degradation from land clearing for development and infrastructure development, as well as the traditional practice of bush clearing.

The conservation of biodiversity faces challenges, despite significant additions to the protected area system over past years; the recent work on Programme of Work on Protected Areas (PoWPA) reflects this. Many high priority conservation sites remain unprotected and under serious threat of degradation and permanent loss. Many are on customary-owned lands and will therefore require the use of innovative approaches to conservation area management. The general success of community-based conservation approaches in the Solomon Islands shows that a working model exists. In this model, it is essential that the income-generating potential from ecotourism of forests and pristine terrestrial ecosystems is utilised, to sustain community interest and commitment to conservation objectives.