Log exports currently dominate the forestry sector. However the small-scale timber-processing sector in PNG is important, with an estimated sawmill capacity of 2000 sawmills, employing 24 000 people and a value of K56-168 million. The report explores issues of market access by small-scale processors and producers of forest products, particularly around legality –a requirement for access to Australian, EU and US markets. There is export potential of sawn timber for specific species and processed products, however the regulatory framework, including certification and legality requirements of destination countries that demand compliance with the laws in the country of origin, present a barrier to greater smallholder participation. PNG has developed a National Legality Standard in an attempt to address this, but for effective implementation and greater market access for smallholders, the standard needs revision and the development of complementary toolkits. There is also a strong domestic market for sawn timber for use in housing construction. The report concludes that the focus should be on developing the domestic market first before exporting.