Author Archives: ramunickel

Energy Minister On Mayur Bandwagon

Gorethy Kenneth | Post Courier | March 22, 2019

Energy Minister Sam Basil says promoting clean coal in PNG is the way to go now because it will be the cheapest electricity supply for households.
Mr Basil addressing the media in Port Moresby, voiced support for Mayur Resources in the pretext of providing energy mix in PNG, saying it was time PNG promoted clean coal as a definite mixture and possibly cheap energy to help especially rural PNG.
“In a few weeks time, early April, the signing will happen, we will be looking at power generation and during presentations this week we have heard different companies talking about shipping gas, producing gas, processing gas, running power stations and talking about big mines that will be coming into production soon, and they require power, and it’s a very exciting time for PNG because those investments will improve the economy of PNG and of course improve the life of so many people,” Mr Basil said.
“Like I said before, we do have high voltage lines crisscrossing the nation and people are still asking for power, so investing into different kind of mixes also helps PNG not to suffer when disaster strikes…look at the recent earthquake, gas stopped supplying for three months, if we provide mixes, we are covered so if more than 50 per cent of our population rely on one type of energy we will have a problem.
“For example, hydro, when drought hits, we are affected.
“There are many opportunities available and one of them we didn’t talk about during the conference is the way to power and opportunities are there.
“We do have wind and good locations and of course, we got big deposits of coal in the Gulf.
“All we want is to bring the cost of power down, it’s got to be reliable and it’s got to be cheap and this is what we want in Papua New Guinea.”

Basil not ashamed to push for coal energy

Peter Esila | The National aka The Loggers Times | March 22, 2019
ENERGY Minister Sam Basil says he is not ashamed to talk about coal being used to drive industrialisation in Papua New Guinea.
“I am not ashamed to talk about all types and forms of energy, clean coal being part of it,” he said.
Basil was flanked by Gulf Governor Chris Haiveta and Mayur Resources managing director Paul Mulder. Mayur wants to build a coal power plant in Lae. The coal will be mined in Gulf.
Basil said Australia and Indonesia both had over 70 per cent of their power mixes from coal.
“Here we are, in a tiny, small nation, talking about clean energy while we allow those two big neighbours to smoke the atmosphere for us and our forest are being used as carbon sink,” he said.
“In a few weeks’ time, first week of April, the signing will happen.
“PNG must not be fools in their own country while other countries are using activists to drive anti-coal campaigns,”
Haiveta said the commercialisation of Gulf coal would happen.
He said coal was a base-load power while other energy sources like solar, hydro and wind fluctuated.
“Coal has been the mainstay of the industrial revolution,” Haiveta said.
“What is the big hiccup? We need Papua New Guineans to have free power. If we are the landowners, give us free power.”
Mulder said the project would create jobs for local people.
“We have a nation that has 13 per cent electrification,” he said. “We have got a huge number of people who want jobs. They want manufacturing. When producing this power, we can use clean coal technology.”

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Landowner identification in PNG: a job for government

Credit: Celine Rouzet

Peter DwyerMonica Minnegal | Devpolicy Blog | March 21, 2019

The Papua New Guinea Liquefied Natural Gas (PNG LNG) project commenced exporting gas to China, Korea and Japan in May 2014. Under agreements reached in 2009, landowners of eight petroleum licence areas, eight pipeline licence areas and a liquefaction plant site near Port Moresby were to receive royalties. By February 2019, payments had been made to people in only the last of these areas. The identification of landowners has been a major difficulty, and assigning responsibility for completing the task has been a matter of debate.

At the close of 2018, social mapping and landowner identification studies carried out by consultants to petroleum companies, clan-vetting exercises carried out by officers of the Department of Petroleum and Energy, and alternative dispute resolution processes implemented by the judiciary had failed to solve the problem. By this time too, agreements for two other LNG projects (in Western Province and Gulf Province) were under discussion. In January 2019, Petroleum Minister Fabian Pok told parliament that the government would not repeat the mistakes of the first LNG project. He wanted the companies to be responsible for identifying landowners in the new LNG project areas and he wanted this done before those projects moved to production. On January 23rd, referring to the Gulf Province LNG project, Prime Minister Peter O’Neill said that the government “had tasked the developer to do the landowner identification process” and Minister Pok reported that Total – the developer – had agreed to do this.

The small print is not yet to hand so we cannot be sure just what the government has requested or what Total has agreed to do. Here, however, we argue that ceding responsibility for landowner identification to the petroleum companies is a seriously bad idea – bad for the companies, the government and for the people of Papua New Guinea.

Under the Oil & Gas Act 1998, final determination of landowner beneficiaries for a petroleum licence area is to be made by the responsible minister and gazetted as a Ministerial Determination. Recent determinations provide a record of landowner beneficiary identification for specified licence areas or pipeline segments. Those determinations name clans (variously ‘major clans’, ‘stock clans’, ‘beneficiary clans’) but do not name individuals within those clans. With reference to differential benefit-sharing arrangements they may subdivide clans as ‘highly impacted’, ‘least impacted’ and ‘invited’.

The diagram below shows some categories of landowner beneficiaries appearing in recent determinations and in clan-vetting exercises that precede and feed into those determinations. On the diagram, the boundaries of the lands of clans A to G are shown relative to a Petroleum Development Licence (PDL) area. Clans A, B and C are classed as landowner beneficiaries on the basis of long-term residence and use. Clans D and E are ‘invitees’ initially recognised as landowner beneficiaries on the basis of boundary-sharing with A, B or C with the possibility that they are subsequently granted equivalence with those clans. Clan F is classed as a landowner beneficiary on the basis of asserted ancestral connection and an ideology of rights to land being held in perpetuity. Clan G is an ‘invitee’ recognised as a landowner beneficiary on the basis of assistance rendered to A, B and C. H is a private citizen, or group, that holds registered title to a portion of the PDL area and, on this basis, under the Act is a landowner beneficiary.

The concept of ‘landowner’ is being used here in a broad and fluid sense. It is not used in agreement with any likely academic definition, with any detectable legal rigour or in conformity with a pan-PNG ideology of tenure because, of course, there is no pan-PNG ideology of tenure. The Oil & Gas Act requires that a company applying for a PDL must submit a “full-scale social mapping study and landowner identification study of customary land owners” of that licence area. Under the Act, customary landowners are persons whose relationship with the land has to do with “rights of proprietary or possessory kind”. Not all clans identified as landowner beneficiaries in Ministerial Determinations satisfy this definition. And the status of others, both the included and the excluded, as members of this category will be always amenable to contention. Several possibilities are implied in the diagram.

For example, a judgement that clan C was ‘more impacted’ than A or B because all land attributed to C is within the PDL area while portions of land attributed to A and B lie outside that area, could be challenged by the latter clans on the basis of area or numbers of people affected. Similarly, members of A, B or C could well have different opinions regarding acceptance of D or E as ‘invitees’ and their possible upgrading to the status of landowner is even more problematic in being politically, rather than empirically, motivated. Inclusion of F as landowner will be dependent on assessing the validity of accounts of ancestral connections from claimants who may well have competing agendas. Finally, inclusion of G could elicit claims from other clans that assert that they too provided assistance to A, B and C. Resolving problems of these kinds cannot be achieved by an anthropological study of ‘in situ’ land ownership. These sorts of problems are ultimately resolved only by facilitated negotiation with those charged with identifying landowners, or by litigation.

No petroleum company can produce a list of clans that will conform to, or satisfy, the sorts of decisions that currently inform Ministerial Determinations. They did not do so in the past and they cannot do so in the future. If companies now assume responsibility for producing a definitive list of landowner beneficiaries, there will no longer be any ambiguity about who to blame or who to take to court when the list is considered defective. The fault will be theirs. On these counts, the desire to shift responsibility – or at least the perception of responsibility – to the petroleum companies might, in the short term, prove beneficial to the government in domains of financial management and public relations.

There is, however, another reason why responsibility for identifying landowners should remain with the government. Only Papua New Guineans – the PNG government, courts, and the landowners themselves – can determine who owns the land in Papua New Guinea. This responsibility should not be ceded to outsiders. It should not be ceded to American, Australian, Chinese or French companies. Papua New Guinea is not their country. They are guests. Only Papua New Guineans can determine what is right for Papua New Guinea. The petroleum companies should recognise and acknowledge this and step back from this area of decision-making. The government should also recognise and acknowledge this and step forward to ensure that the rights of all Papua New Guinean woman and men are guaranteed by Papua New Guineans.

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Exxon Mobil tops list of Australia’s top 10 tax dodgers

Exxon Mobil have topped the list of Australia’s biggest tax dodgers and has ‘dudded the poor people of Papua New Guinea’

Michael West | The New Daily | March 20, 2019

Whether it is misleading the Parliament of Australia, cutting its workers’ wages, paying zero tax while racking up $33 billion in income, sending gas prices into the stratosphere or dudding the poor people of Papua New Guinea, Exxon has flair.

It is also a master of intrigue. You won’t find the financial reports for ExxonMobil Australia on its website, you won’t even find the name of its directors, despite the size of this operation. You certainly won’t find their photographs without Googling madly and paying for company searches.

You absolutely won’t find mention of 585 entities Exxon has in the Bahamas, or for that matter, any breakdown of related tax-haven associations.

How is it that this, the biggest of the US oil majors, a corporation that has been making fabulous profits in Australia for 50 years, can pay zero income tax? How does it skin its taxable income in this country back to zero?

In fact, ExxonMobil (under the trading name ‘Esso’) drilled Australia’s first offshore well through a joint venture with BHP Billiton, when it discovered the Barracouta gas field in the Bass Strait in 1965.

Two years later Kingfish was found, the first offshore oil field, which to this day remains the largest oil field discovered in Australia.

How is it that with record, eye-watering gas prices, Exxon pays no income tax?

Its financial statements provide a few clues: Massive “debt-loading” – its Australian companies borrow billions of dollars from other Exxon companies overseas and funnel hundreds of millions of dollars out via interest payments on the loans.

And finally it has been pinged for it. Its 2018 financial report discloses the Australian Tax Office has been investigating Exxon’s related-party loans and has busted it for being slippery, issuing amended income tax assessments for 2010 and 2011.

Exxon brazenly notes it might sue the tax office, or settle, as it continues to “negotiate” over what it claims is fair pricing. These fighting words are typical of a bullying multinational oil giant.

Yet. it also notes the fight with the ATO has implications for 2012 to 2017 and Exxon is acutely aware of what befell its peer, Chevron, which muscled up to the ATO and lost an historic case, for pretty much the same practice – aggressive “transfer pricing of money”.

Post the four-year ATO tax transparency figures, Exxon’s latest financial statements show more of the same – thanks to spiking gas prices, cashflow jumped from $8.2 billion to $11.3 billion. Profits were wiped out by massive related-party debt.

Tax rose from $341 million to $508 million. But guess what? Not in Australia. This tax booked in the Australian entity, although the accounts don’t specify it, and although Exxon executives refused to be interviewed about it, represents tax paid in other countries, namely Papua New Guinea and Indonesia.

Further, they have lobbed in petroleum resource rent tax (PRRT) as income tax, when it has the quality of a royalty for extracting non-renewable resources from the seabed.

And then there’s the monster debt, the monster weapon of tax avoidance: Some $1.8 billion in finance charges over the past two years on Exxon’s eye-watering debt of $17.6 billion – debt owed to itself, offshore, debt to suck the profits out of Australia along with the gas.

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ID landowners first, says MRDC

Armed clansmen in the town of Komo in Papua New Guinea’s Hela Province. Photo courtesy of Michael Main

The fact this even needs to be said is a terrible indictment of our Nation’s mis-management of resource extraction industries over decades. If social mapping and proper landowner identification is not being done then there can be no free, prior, informed consent and most projects are simply illegal.

The National aka The Loggers Times | March 20, 2019

THE issue of social mapping and landowner identification must be done prior to the commencement of any project, says Mineral Resources Development Company managing director Augustine Mano.

He said it should not be left till very late as was the case with the PNG LNG project.

Social mapping and landowner identification for the PNG LNG project took 10 years to complete.

“It must be the first thing to be done in any future project in the country,” Mano said.

He said for the Papua LNG and the P’nyang projects, landowners or beneficiaries were identified prior to the development forum so that only they were involved.

He said that was important for project security because it was different from other countries where genealogy was documented properly over the years.

Mano said the MRDC as the landowner fund manager was making sure that the benefit distribution was done according to the Oil and Gas Act – 40 per cent to the landowners, 30 per cent for community infrastructure and 30 per cent for further investments.

The secretary for the Department of Petroleum, Lohial Nuau, said landowners issues were now being better managed.

He said the department had taken stock of outstanding government commitments under the various agreements which would be channelled through the Independent Issues Committee.

“This is positive step towards improving landowners issue management,” he said.

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Tuke, Yama Want Fresh Deal For Ramu Mine

Politician’s love to make fancy promises – but do they ever actually deliver?

Post Courier | March 19, 2019

MINING Minister Johnson Tuke has said, before he signs any documents regarding the Ramu NiCo project, he needs to understand what is there for the landowners.

“When I understand and am really convinced then I will sign the agreement for the expansion, otherwise that will not happen,” Mr Tuke said.

He said he had discussed with Prime Minister Peter O’Neill the licence that government will issue for the expansion must be under a new agreement.

Mr Tuke said many mining companies usually say they will only give according to the MoA, however, there must be some form of kindness and humility when dealing with the local landowners whose land and water were given away for the project.

Madang Governor Peter Yama said the new expansion plan for the Ramu project will be properly discussed and he, as the head of the province, must be convinced that the people of Madang receive more benefits.

He said the old agreement that was signed before the construction and the operation of the Ramu Nickel Project must be done away with.

“The new agreement will be renegotiated, and the old agreement will be no more,”

He said that the Prime Minister Peter O’Neill during his visit to Usino had publicly announced that the new agreement will be a fresh start. Mr Yama said he is in full support of a new agreement for the Ramu NiCo Project, and stressed that all the parties that will be signing the agreement including the National Government, the provincial government, and the developer Ramu NiCo (MCC) must make sure the agreement provides better benefits to the people of Madang.

This is particularly for those from the impacted communities, the developer Ramu NiCo, Madang province, and the country.

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Bougainville President launches stinging attack on RTG

A lake in the pit of the long defunct Panguna mine in Bougainville. Photo: http://www.travelinspired.co.nz

President John Momis is stinging in his criticism of RTG Mining but the same critique surely applies equally to his own preferred option, Caballus Mining, and the previous horse he backed, BCL…

Radio New Zealand |19 March 2019 

The government in the autonomous Papua New Guinea region of Bougainville has dashed any hope it would work with the Australian miner, RTG, accusing the company of bribery.

The Bougainville government and RTG are promoting unrelated schemes to re-open the Panguna mine.

After a meeting between the two parties earlier this month, RTG’s chairman Michael Garrick felt they got a good hearing and there was a chance they’d work together in re-developing Panguna.

But Bougainville President John Momis said his government is emphatically rejecting the offer, and accuses the company of insensitivity and disregard for the customs, culture and sacrifice of all the people of Bougainville.

He said RTG’s achievements as a miner are limited and investors have no faith in its ability to deliver.

Granting a mining lease to RTG would pose an intolerable risk, Mr Momis said.

Mr Momis said payments and loans the government understands that RTG gave to members of one particular group of landowners, the Special Mining Lease Osikaiang Landowners Authority, constitute bribery, as do similar offers made to his government during the recent meeting.

Relevant agencies in PNG and Australia would be notified, he said.

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Filed under Corruption, Mine construction, Papua New Guinea

Wafi-Golpu land dispute: The other side of the story

Lorenitz Gaius | The National aka The Loggers Times | March 18, 2019

IT appears that some people, like one PK Anding, had lately, been vocal and supportive of the Piu Incorporated Land Group’s claim of ownership of the Wafi-Golpu project land. PK Anding had even gone as far as to mention that the Lutheran Church had written to the prime minister informing him of its support of Piu’s claim of ownership.

Further to my previous letter to the editor, I briefly mentioned that the claim by the Piu Incorporated Land Group, led by chairman Martin Tapei, was thrown out by the Supreme Court. A brief synopsis of the case is provided below for anyone out there to appreciate the origin of the Piu Incorporated Land Group claims of ownership over the 50,000 hectares of customary land.

On Feb 22, 2001, Piu ILG applied to the Department of Lands and Physical Planning for a special agricultural business lease (SABL) over the Wafi-Golpu project land comprising of 6240 hectares. This was done without the knowledge of the people of Yanta, Hengaybu and Babuaf people, including the other seven villages in the area.

On July 24, 2001, an SABL lease was granted to the Piu ILG by the minister for lands under the Land Act comprising of 50,000 hectares instead of the 6240 hectares applied for. This grant was vehemently disputed by the Yanta, Hengabu, Babuaf people as well as the other known seven villages within the area.

On May 18, 2003, following pressures and protests by these groups within the 50,000 hectares of land, the new minister for lands and physical planning intervened and revoked Piu’s SABL lease. His decision was based on the non-compliance of the requirements and provisions of the Land Act under Section 10 and 102.

On Nov 19, 2004, the Piu ILG, not satisfied with the minister’s revocation of its SABL lease, applied to the National Court for judicial review for which leave was granted on May 5, 2005. The minister’s revocation was cancelled and Piu’s ILG title was restored, albeit temporarily.

On Aug 29, 2005, Yanta, Hengabu, Babuaf and Towangola appealed to the Supreme Court for a judicial review of the National Court order of Aug 18, 2004. The appeal was upheld and the National Court judgment was declared void, and the SABL lease granted to Piu on July 24, 2001, was declared null and void.

So to whoever is still supporting the Piu ILG claims of ownership over the Wafi-Golpu project land, I hope the above information gives you a clear picture of the situation. Questions should be asked about how Piu’s claim of 6240 hectares ended up with 50,000 hectares of customary land, especially when the land is communally owned?

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