Monthly Archives: August 2011

Pregnant mum gunned down at Tolokuma mine

Central police are investigating the death of a Sepik woman gunned down last Saturday by criminals at the Tolokuma gold mine, reports the Post Courier.

Jacinta Rony, 36, was six months pregnant at the time of her death. She was a supervisor with IPI Catering, the catering company of the Tolukuma gold mine.
She was shot on Saturday afternoon by criminals at the mine site as she was carrying the day’s takings from the company’s canteen to the office.

Angry relatives from Num-boruon village, Yangoru, said yesterday the mine’s owner, Petromin, has not been able to furnish full details of the attack on Rony.
Family spokesman and Air Niugini pilot Captain Joseph Kumasi said Petromin was duty-bound to inform relatives about the circumstances surrounding the death.

They were interested to know why there were no adequate security at the mine site in recent months, adding that the mine recently embarked on a cost-cutting exercise which resulted in security cutbacks.
This is unforgiveable, says Kumasi, adding that the relatives were told by Rony’s close friends that the criminals had cut through the security fence to carry out the crime in broad daylight, as she was closing up leaving with the day’s takings.

Police have arrested one suspect.

3 Comments

Filed under Papua New Guinea

Mineral rights commentary

By Colin Filer

Might I humbly suggest that people commenting on this matter [proposed changes to the ownership of mineral rights in Papua New Guinea] should make themselves familiar with the wording and significance of the legal reforms being proposed here.  They are the work of well-known Papua New Guinean lawyer, Peter Donigi, who has been pushing this wheelbarrow for many years, and who persuaded North Fly MP Boka Kondra to introduce them to Parliament as a set of Private Members’ bills a couple of years ago.

The proposals are presented and explained in Donigi’s (2010) book ‘Lifting the Veil That Shrouds Papua New Guinea’.  The essential point in the proposed legislation is that it extends the scope of the so-called ‘lease-leaseback scheme’ (currently under investigation by a Commission of Inquiry) to cover mineral rights as well as land and timber rights.

What it would entail is a further empowerment of ‘landowner companies’ and an extension of the ‘private dealings’ regime from the forestry sector to the extractive industry sectors.

The private dealings regime in the forestry sector was the primary target of a previous Commission of Inquiry headed by Tos Barnett in the late 1980s.  Barnett found that landowner companies could not be trusted to safeguard the interests of customary landowners at all, and the Forestry (Private Dealings) Act (the brainchild of Sir Julius Chan) was repealed when the new Forestry Act came into effect in 1992.

Unfortunately, we have recently seen a resurgence of the private dealings regime through abuse of the lease-leaseback scheme under the Land Act, in what I and others call a ‘land grab’ by logging companies disguised as agricultural developers.  Hence the new Commission of Inquiry.

The best that can be said of Donigi’s amendments is that they might indeed have the (unintended) effect of reducing the level of foreign investment in new mining and petroleum projects, and therefore help to lift the ‘resource curse’ (if not exactly the ‘veil’) that is currently ‘shrouding’ PNG.  On the other hand, they might just make it easier for Dodgy Brothers to  do dodgy deals with landowner companies that are the puppets of greedy national politicians.

Donigi does say at one point in his book (p.51) that Asian investors (unlike Western investors) are ‘not interested in profit alone’, but ‘are interested in a long term relationship with the country’.  My investigation of the recent land grab by dodgy Asian loggers in cahoots with dodgy landowner companies and national politicians suggests that they may be more interested in relationships which last around three years.  How this sort of relationship might pan out in the extractive industry sectors is anyone’s guess.    

6 Comments

Filed under Financial returns, Papua New Guinea

Planned PNG law changes likely to need further discussion: Radio NZ

Papua New Guinea’s new government has moved to quell concern about proposed changes to rules governing ownership of resources in the country.

Earlier this month, the new mining minister Byron Chan proposed legislation to hand control of resources below the six-feet underground mark from the state to customary landowners.

It has caused an outrcy within the extractive industries.

The Prime Minister, Peter O’Neill, has since clarified that parliament is yet to fully discuss the changes.

Johnny Blades has more:

*************************************************************************

A senior figure in the recently ousted Somare government says a lot more work needs to be done before the new administration’s proposed changes could be considered valid.

Madang MP Sir Arnold Amet says present legislation has already enabled government and landowners in PNG to acquire equity and progressively greater participation in the developments. He says the proposed changes are risky and misinformed.

“They rushed into making a policy statement that hadn’t really been considered. It would change the goalposts fundamentally. And that is something that needs a lot of thought before you could even contemplate talking about it or even talking about it. It sends the wrong message to our investors, to the extractive industry.”

The Managing Director of PNG’s Investment Promotion Authority Ivan Pomaleu has reassured foreign companies and developers that the country is a good place to invest in.

He admits genealogical issues remain a key challenge to the resource extractive industry.

“Determining who the rightful owners of the land are, and sometimes that can be subjected to all kinds of disputes. Once those are cleared it’s a simple matter of getting investments through. We advocate a little bit of patience on the part of developers; (The) Papua New Guinean make-up is such that they will raise issues but the bottom line is they will support investment. They (landowners) just want to make sure like anyone else would in anywhere else in the world, they want to make sure that their own benefit streams are clearly defined.”

Whether one is directly enjoying benefits from resource development dictates how Papua New Guineans view the extractive industries, according to Southern Highlands NGO worker Isaac Bulube.

He’s unsure whether gaining benefits from developments like the LNG project is as important to PNG’s mainly rural-based population as preserving their traditional way of life for the future.

“People who don’t get any benefit from the project say we don’t like it but people who are benefitting like in terms of some employment or some payment for the land use or something like that, they say LNG is good. People are not really sure but people who are interested say we don’t know what will happen in the future, how this thing will develop our community and place, and how far it will bring development in terms of our livelihood change.”

However the issue of ownership runs deep with communities throughout PNG which is currently enjoying a resources boom.

But with many ordinary people yet to see any tangible benefits from the development rush or improvement in basic services, pressure for some change to the rules governing resources is likely to grow.

27 Comments

Filed under Financial returns, Papua New Guinea

Julius Chan’s unrealised dreams

OneCountry on PNG BLOGS

I think it is most most most unfortunate that a person who has single-handedly done a lot for the Mining & Petroleum Industries of this country would be singled out and demonized in the way a lot of your readers have done on the PNG Blogs site. Those who seek to do so demonstrate very clearly that they have very little understanding of the industry, nor responsibility for the future of the industries in PNG. Greg Anderson deserves a medal and it is way way overdue.

Having said that, let me point out that what is driving Byron Chan at present is clearly the unrealized dreams of Sir Julius Chan, mingled with a certain guilt for the past mistakes Sir Julius has made.

Sir Julius’s mistakes in the past in respect of Lihir ( how that deal was structured was done under the Leadership of Sir J as PM- and he fixed the gold price- without being an expert- he fixed the nations interest at a certain gold price -and he fucked all of us up. All the gold in one of the richest Volcanic calderas dug up for the last 15 years and shipped out of here with minimum or no state equity, minimum or no taxes, very little return to the people. That is Sir Julius’ legacy.

Sir J’s other legacy is the planned mass murder of hundreds of thousands of Bougainvilleans a during with the Sandline Mercenaries.

Byron can be excused because he was just a young fellow and away overseas at school at those relevant times. However, he cannot be excused for whats been happening in recent times with Allied Gold.

Sir Julius started 5 years ago working on a plan to takeover the Allied Gold mine on Tabar Island. He used locals to cause instability on the ground and tried to frustrate the Mining company. Sir J used New Irelanders in MRA and Dept of Mines to do his bidding. Fortunately or unfortunately, he had an opposite number in Mike Carruso of Allied who is just as stupid and bloody minded. They both succeeded in creating a very unstable mine on Tabar.

Sir Julius has been looking for a way to redeem himself but he couldn’t succeed with any of the abrasive plans he mounted. The memory of his plan to mass murder is still fresh in our minds…and Bougainvilleans are unlikely to forget him. He is now through his son mounting this rear guard action to what? appease the Bougainvillean Landowners? To give more power to landowners to throw out Mike Carrusso? If you sense a degree of vindictiveness, then you could be on the ball…because what Sir J has lacked in size, he has always made up for it in vindictiveness.

However, what is in it for Byron? Nothing. He has been sitting with his father and idolizing him for too long. He needs to get away from his father so that he does not inherit his father’s legacy. He has 7 days to do this. He needs to make a policy diversion. Byron, let me as a PNGean warn you, the rest of us PNGeans who are also resource owners are not prepared to stupidly throw away the credibility and stability of this industry.

The real direction that this debate should be aimed at is the method and equation of benefit sharing under current policies- not ownership. In relation to ownership I refer readers to my article in response to Peter Donigi published on 28th April 2011. Our real issues relate to how we share benefits and how the public service machinery fails to distribute it. We also have an additional problem with politicians trying to do resources deals like Sir J with Lihir and BCL and Arthur Somare with LNG.

Ownership of resources must always remain in the realm of common ownership, under the care of the State to ensure fairness in distribution of benefits. I encourage young PNGeans not to get too excited or have premature verbal ejaculations over this issue like young Byron. Now that we understand where he is coming from, we know how to treat him.

We need serious reform on the equity distribution equation. we need to hold companies to deliver benefits to our people, not destroy our environment ( like BHP and CRA), build permanent infrastructure, and ensure our people participate meaningfully. This must happen now, not meaningless utopic idealism like ownership/or needless fear mongering without a proper responsible commercial exit plan for the 6.5 million people of this country.

I thankyou all for reading my words. May God bless you all, as he has already done by placing you in this rich and beautiful Paradise. Laikim yupela olgeta na wanbel oltaim.

21 Comments

Filed under Financial returns, Papua New Guinea

Assurances for investors as PNG contemplates changing resource law

The Managing Director of Papua New Guinea’s Investment Promotion Authority has reassured foreign companies and developers that the country is a good place to invest in, reports Radio New Zealand.

Ivan Pomaleu’s comment comes as the new government considers handing ownership of resources below the ground from the state to customary landowners.

Legislative changes proposed by the new Mining Minister last week prompted concern in the extractive industries.

The Prime Minister Peter O’Neill has since clarified that parliament is yet to fully discuss the changes.

Ivan Pomaleu says landowners are supportive of investment as long as benefits are clearly defined.

“The environment is vibrant, activities are blooming all over the place. One of the key impetus in the whole scheme of things obviously is the major LNG Project. It demonstrated to the investing community internationally that ’hey, this is one country that you can take a look at’.”

3 Comments

Filed under Financial returns, Papua New Guinea

Resource owners still in the dark says Chan

MOST resource owners in the country must be made aware that for so long considerable wealth has been siphoned through public equities and not from the actual sale of minerals. They are misled to believe that resource developers make millions of kina through the sale of commodities such as gold, copper, silver and nickel.

Mining Minister Byron Chan highlighted this during his first ministerial visit to the landowners and company executives of multi-million kina Lihir and Simberi mines respectively.

“Most of us have little knowledge about the way resource developers actually make money. We’ve been led to believe that their benefit comes from the sale of gold, copper, silver, nickel and carbon energy.

“But since taking office I have come to learn that significant wealth is accumulated in the public equities that are bought, sold, and traded on international stock exchanges using our resources. Company stocks soar on news of the granting of exploration and mining licenses and, to date, no party in Papua New Guinea has seen any tangible benefit,” Minister Chan said.

Chan who is also the Member for Namatanai, the richest electorate in Papua New Guinea that houses world class mines in its backyard such as Lihir, Simberi and Nautilus wants to see new changes for resource owners and the nation at large.

“So today, in the dawning of the new paradigm for mining in Papua New Guinea, my office is exploring ways to insure that the expansion of shareholder value in the global equity markets for announcements made, and rights granted by my office include benefit that flows to landowners and the nation.

“Using state-of-the art quantitative market tools, we have begun a process of learning the value of our intangible asset announcements – our granting of licenses – and we will develop world-class methods to insure that when our resource developers win, our people win alongside them.”

He also would like to see more dialogue between mining companies and industry partners to fully understand clearly the motive behind his proposed amendments to the Mining Act 1992.

The minister raised this concern after learning that both foreign and local commentators in the media misunderstood the nature of his move and what it meant for resource owners in Papua New Guinea.

“In my capacity as the Minister for Mining, it is well known that I have long stood with citizens of Papua New Guinea in calling for a more equitable participation in the benefit extracted from the land and sea of this country.

“For many years, ministers before me have been advised to favour mining operators under the veiled threat that, standing up for our rights and interests would intimidate investment in development of our country’s resources. This advice has placed our interests secondary to those of the international markets.

“However, as we see the global markets transform, with economies from the U.S to Europe to Asia undergoing considerable stress, the assets of this country are highly desired and, in this time, the maturing Papua New Guinea must now stand side by side with nations of the world, expecting and receive mutual respect, dignity for our people, and appropriate sharing in the abundance of our resource wealth.

“My office is undertaking a comprehensive review of a number of initiatives that you will hear about in the coming weeks and months. Abuse of our land, sea and people will be addressed. But even more than that, abuse of our government’s actions will be addressed,” Minister Chan said.

He reiterated that the O’Neill /Namah Government will focus on four key policy Issues that include:
  • Recognition and protection of traditional landowner’s right to mineral ownership on or under their traditional land and seabed;
  • Urgent review of the mining legal regime;
  • Deep-sea mining; and
  • Environmental Protection.

The minister noted the four policy directions would take time to be properly assessed with other existing policies and an appropriate case study will be done by the mining department and MRA and local and international advisors and consultations with all industry stakeholders to properly substantiate the proposed changes.

The policy would take at least six (6) months before the “policy changes” will be brought to Parliament for debate.

7 Comments

Filed under Financial returns, Papua New Guinea

Current Mining Act “is illicit”

By Evah Kuamin

THE current Mining Act was an illicit law the moment it was adopted from the Australian Mining Laws and introduced into the country and it has collided with the customary laws, Morobe deputy Governor Morokoi Gaiwata has said.

Mr Gaiwata said even an ordinary person with plain common sense can tell that the legal effects of unwritten customary laws were never legally terminated to allow the State to own natural resources.

He said that the rules of law in accordance with PNG customs states that before the State can take ownership of any resources from a customary land, it must first legally alienate or compulsorily acquire customary land to take ownership of wealth and capital generated from the exploitation of any natural resources. This process he said should take place with the full consent of the principal landowners.

Mr Gaiwata reiterated that any customary land or marine sea bed were absolute in territorial possession. He explained that for any customary land or resource owner to sacrifice their very means of livelihood by surrendering their very possession of life to the State was unimaginable.

“Wealth and capital empowerment in modern rich resource and wealthy PNG are the biggest key issues in the country’s nationhood and the current mining Act is threatening this.”

Mr Gaiwata also mentioned that the current law makes the National Government richer at high costs of internal resource owners and their never ending disputes. He said that it constricts and marginalises resource rich owners’ rights of maximum gains to exercise their Melanesian belongingness to their neighbours, brethrens and the nation.

This act Mr Gaiwata stressed has been a foreign vehicle sent to destroy this country.

“Every mining and petroleum policy initiatives empower foreign interests with both capital wealth.

“These policy initiatives have no rationale for consolidation in the spirit of nationhood; in fact they are framed from foreign economic intelligence manipulating decision makers in the National Government and bureaucratic Waigani.”

He called on the National Government to immediately repeal the Act and see to it that wealth and capital generation from any mining and petroleum project from the absolute capital base to seed resource owners and other Papua New Guineans.

He added that it must also translate landowner’s riches in a structure to transform PNG into a developed nation in a given time-frame. It should be practical and realise PNG’s national consciousness amid the forces of the global community.

Mr Gaiwata has also called on the National Government to appoint a committee with specific tasks to come up with a new PNG Mining Act.

5 Comments

Filed under Financial returns, Papua New Guinea