Category Archives: Corruption

Opposition questions PM on benefits from LNG shipments

Delays in royalty payments are frustrating landowners

Delays in royalty payments are frustrating landowners

Post Courier | March 05, 2017

PRIME Minister Peter O’Neill has come under fire again from the Opposition on the benefits from LNG’s more than 200 shipments.

Mr O’Neill said bigger benefits were looming for the country in the next LNG projects at Port Moresby’s inaugural petroleum and energy summit.

Opposition Leader Don Polye said the Department of Treasury projected that annual proceeds from the first LNG would be up to K4 billion.

“Our alternative government’s question is who will benefit the most? We know these benefits looming in the petroleum and energy sector.

“This is not the first time we will see them coming in from such an international project.

“Our resource owners have missed out on benefits which are rightfully theirs in the first LNG project,” he said.

Mr Polye said the government had betrayed the people.

“Talking about projects after projects will not solve the real problems. There is nothing from the LNG project reflected in national budgets.

“Budget books show nothing. With such disarray in the management of the resources, pushing for another LNG project is unheard of,” he warned.

Sovereign wealth fund, he said, was established outside of the international best practice Santiago principle.

Mr Polye added that the Extractive Industry Transparency Initiative was not fully established within the standard frameworks as well.

“We cannot justify discussing another second or third LNG project. We are afraid their proceeds will also go down the same trend.

“I must boldly tell the nation that Prime Minister Peter O’Neill has mismanaged the country’s proceeds from the first LNG project.

The country is in the red. I would like to advice the forum to address these issues,” Mr Polye said.

He warns Total, ExxonMobil and other players that whilst bidding to increase their profitability to serve the interest of shareholders, they have a moral and legal obligation to PNG as well.

“We would like to see responsibility on the part of the developers to create a sustainable economy for PNG.

“When we are in government, we will not only bid for maximum benefits for our resource owners, we will fix SWF and EITI, minimise law and order, restore rule of law and alleviate corruption to make PNG become an attractive investment destination,” Mr Polye said.


Filed under Corruption, Financial returns, Human rights, Papua New Guinea

Illegal work on Panguna stopped


The National aka The Loggers Times | February 13, 2017

ILLEGAL gold dredging operations have ceased in the mid-tailings region of Panguna, according to an official.

Autonomous Bougainville Government Minister for Minerals and Energy Resources Robin Wilson told The National that the operations of Jaba Resources Limited in the area were not compliant with the Bougainville Mining Act 2015.

This resulted in the company being instructed to cease operations in December last year.

“This company’s operations came about as a result of the Bougainville Executive Council approval of a proposal for a brick production and gold extraction project submitted under the Department of Economic Development in August 2015,” Wilson said.

“On inspection of the site, and given the nature of the operations, it is clear that Jaba Resources Limited needs to be the holder of a small-scale mining lease under the Bougainville Mining Act 2015 for its operations to be lawful.

“Even if no metalliferous minerals such as gold were being extracted, Jaba Resources would still need to be the holder of a quarry lease. There are obviously other requirements under National laws as well, such as environmental approval.

“On the basis that the Jaba project has not complied with the relevant laws, the Executive Council has rescinded its decision to support the project.

“For these reasons, I have directed the Acting Secretary for Mineral and Energy Resources to take all necessary steps to bring this company’s operations to an immediate stop.

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Cash strapped PNG govt to avoid paying LNG royalties

Minister Nixon Duban

Minister Nixon Duban knows the government doesn’t have the money to pay the royalties

The bankrupt PNG government does not have the money to pay LNG royalties and is desperate to try and keep a lid on the issue ahead of the National election in June. The truth is Duban and his Ministerial colleagues in government have stolen so much money there is none left for LNG landholders and they will get nothing! In the meantime, Duban and the PM will keep rolling out the excuses…

Landowner royalties to be paid together: Duban

Charles Yapumi | Loop PNG | February 4, 2017

All landowner royalty payments for the LNG Project will be made after issues regarding landowner identification and clan vetting processes are completed, says Minister for Petroleum and Energy Nixon Duban.

The Minister said landowners from the resource areas, pipeline and plant site areas will be paid together after all landowner issues are dealt with, and no preferences will be given.

Duban said the Court of Alternative Dispute Resolution (ADR) will be dealing with landowners’ disagreements with the department’s identification and clan vetting processes.

The minister was responding to questions from Kikori MP, Mark Maipakai, in Parliament on Friday.

Maipakai asked when his people along the LNG pipeline areas will get their royalty payments because all their landowner identification and clan vetting processes had already been completed.


Filed under Corruption, Financial returns, Human rights, Papua New Guinea

Ok Tedi Trust funds frozen by court case: OTML


Gynnie Kero | The National | January 17, 2017

TRUST funds for Community Mine Continuation Agreement (CMCA) villages in the South Fly district of Western are still frozen by a court case, according to Ok Tedi Mining Ltd (OTML).
But despite that, OTML continued to contribute money into the trust every year, deputy chief executive officer and general manager employee and external relations Musje Werror said.
As at December last year, the company paid more than K9.8 billion in benefits to the people of Western since 1982.
He revealed that 50 per cent of these funds were currently tied up in court.
Addressing people at a village in South Fly last Friday, Werror said the village was among others in the district whose projects would be delayed.
The Sepe/Auti village in South Fly was the final village in the CMCA corridor to sign the CMCA Extension Agreement (CMCAEA) last Friday.
“Your benefits start today (last Friday) after signing of the agreement.
“But your name (Sepe/ Auti) is among all South Fly villages, project delivery will be delayed. Until the (court) case is over, we cannot draw down from the trust,” he said.
Werror also told the locals that the compensation package for the 158 CMCA communities in Western was reviewed over the years.
“In 2001, the compensation package at that time was K175 million.
“That was revised in the 2006 memorandum of agreement (MOA) to close to K1.2 billion and now the CMCA extension agreement nearly K600 million.”
Werror urged Sepe/ Auti locals to cooperate with the miner and the Ok Tedi Development Foundation and the provincial government if they wanted to see real change in the village.
“To achieve sustainable development is not easy but it can and will happen if we all work together. I encourage the people of Sepe/Auti through your leaders to work closely with OTML, OTDF and the Fly River Provincial Government (FRPG),” he said.
“There will be disagreements along the way but we must never lose focus of our dream and our desire to develop our village, our region and our province.”
Ok Tedi Mining Ltd also presented two outboard motors and sporting equipment worth K70,000 to the village last Friday.
It is understood that two 23-foot dinghies would be delivered to Sepe/Auti later.


Filed under Corruption, Financial returns, Papua New Guinea

Solomon Islands PM defends leaked texts


Manasseh Sogavare Photo: RNZI

Radio New Zealand | 17 January, 2017

Solomon Islands prime minister Manasseh Sogavare has defended a leaked sms conversation he had with an official of a bauxite mining company about tax exemptions.

The leaked texts which were published in the Sunday Star reportedly were sent on the 15th and 16th of November.

In the published parts of the sms conversation Mr Sogavare reassured an official of Bintan Mining SI Ltd that cabinet was preparing to remove all export duty on bauxite.

Bintan is the mining firm contracted by Asia Pacific Investment Development (APID) to mine bauxite on Rennell Island in the Rennel and Bellona Province.

The prime minister yesterday told the newspaper, The Island Sun, the conversation was completely above board and had been taken out of context.

He said the public was mistaken if it thought a prime minister should not be speaking with investors about matters of government policy.

Mr Sogavare said it related to an earlier government decision to impose a 20 percent tax penalty on illegally mined bauxite stocks which he says has been implemented.

Mr Sogavare said he was simply informing the investor of a cabinet decision that the 20 percent tax was not be applied to legally mined bauxite stocks and that this would be backdated to cover legally mined bauxite that had been exported before the cabinet decision.

The prime minister also said he was offended at insinuations that he had been bribed to remove the 20 percent tax penalty and pointed out that there has never any export duty on bauxite to begin with.

The sms leak and the later posting of a word for word conversation between the prime minister and Island Sun reporters about the issue could result in an official investigation into a possible security breach within the Prime Minister’s office and telecommunications.

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PNG commander says Hela task is huge

LNG Project facility, Hela Province, Papua New Guinea Photo: RNZI / Johnny Blades

LNG Project facility, Hela Province, Papua New Guinea Photo: RNZI / Johnny Blades

Radio New Zealand | 12 January 2017

A commander for an operation to end lawlessness in Papua New Guinea’s Hela province says the task is huge and won’t be finished quickly.

300 police and military personnel have been deployed to the Highlands province, which is home to the lucrative LNG project, after months of tribal fighting and a build-up of high-powered firearms.

Police operations commander, Assistant Commissioner David Manning, said the first step would be for personnel to fan across the province to try and clear it of illegal firearms.

He said work would then need to be done to reconcile warring tribes and restore confidence in the provincial government, which he said would have to involve the people of Hela.

“The success of this operation hangs all over the shoulders of the people of Hela and how we – the operation – can engage in effective and productive partnerships with them in resolving the future of the province.”

Mr Manning said the security operation was only one part of returning law and order to Hela.

“Over the years the thinking of the people of Hela has been that the national government has abandoned them, has really not given much focus on addressing some of the socio-economic challenges that the people face up here, and as such there was a building resentment towards the government [at] the national, provincial and district level,” he said.

Mr Manning said restoring faith in the government is vital, particularly with blatant misuse of government resources in the province, and this is a long-term issue that needs to be addressed.

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Huge gaps in Papua New Guinea’s 2014 EITI Report


There are huge gaps in Papua New Guinea’s draft 2014 Extractive Industry Transparency Report that has been very quietly released over the New Year holiday – PNG EITI Report 2014 [pdf file 4 MB]

Despite the fact this is PNG’s 2nd EITI report the document contains very limited information from government departments including almost no information from the Department of Petroleum and Energy or the Mineral Resource Development Company. The tax information also has huge gaps.

This, again, throws into question the PNG government’s commitment to the EITI standard and the World Bank conceived, sponsored and run process to get PNG to join.

According to the international consultants, Ernst and Young, who prepared the 2014 report, they “experienced varied levels of cooperation from reporting entities” and the report contains “significant gaps”. 

In particular, Ernst and Young say, while “nearly all companies have complied fully or partially”, State Owned Entities only answered questions about non-financial information and

“Some government departments were challenging to engage with. Some did not respond to any communications; some met with us and shared some non-financial information”

The incomplete draft report has been published to ‘comply’ with international EITI requirements, though it rather undermines the credibility of the EITI standards if such a limited report as PNG has produced can be deemed ‘compliant’.

PNG applied for EITI candidacy in 2013. In March 2014, the country was accepted as a candidate country, and in early 2016 it published its first EITI report, on the calendar year 2013.

See also:

The Extractive Industry Transparency Initiative in Papua New Guinea: Just more corporate greenwashing?

International research shows World Bank sponsored EITI a waste of time

History of the World Bank’s EITI project in PNG

2014 EITI report exposes PNG’s total lack of commitment to transparency standard

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