Category Archives: Corruption

Ok Tedi funds not safe: MRDC a milking cow for people in Waigani

O’Neill clears air on K200m mine fund

The National aka The Loggers Times | 18 July 2018

PRIME Minister Peter O’Neill told Parliament yesterday that well over K200 million from OK Tedi Mine is currently accumulating in the Community Mine Continuation Agreement (CMCA) and non-CMCA trust accounts for the people of Western.

He said this in response to questions from Middle Fly MP James Donald on why Government had made a decision to transfer money in the CMCA and the non-CMCA trust accounts to Mineral Resource Development Company (MRDC).
Donald said he was very concerned because MRDC was a “milking cow” for people in Waigani.

“I asked the prime minister earlier on and he had given me and the people of Western province assurance that the funds were in safe hands,” he said.

“An NEC decision in June 2017 has stated that after the audits of the CMCA and the non-CMCA trust accounts, the balance of the funds, will be transferred to MRDC.

“I am very concerned that the prime minister has lied to me and the people of Western.

“MRDC is a milking cow for Waigani people and the funds are now in the wrong hands.”

O’Neill said what the Government tried to do was to correct gross mismanagement and misuse of funds in the CMCA and non-CMCA trust accounts over the past years.

He said hundreds of millions of kina belonging to Western people under CMCA and non-CMCA trust accounts had been mismanaged over the years.

“Those funds have never reached the people,” O’Neill said.

“That’s why we are trying to correct and stop this nonsense going on.

“The government has put a ban on the CMCA and non-CMCA trust accounts and conducted an audit.”

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Owners Of Extractive Companies To Be Identified

Post courier | 10 July 2018

Work is underway to identify beneficial owners of extractive companies operating in Papua New Guinea, says the PNGEITI multi stakeholder group (MSG).

The PNGEITI is cooperating with an international auditing firm KPMG as the implementation manager to execute a beneficial owners (BO) roadmap.

The roadmap is aimed at establishing a reporting matrix to feature beneficial owners in PNGEITI reports starting 2020- as required by the EITI International.

A beneficial owner in respect of a company means the natural person or persons who directly or indirectly owns or controls a corporate entity. A beneficial owner ultimately profits from the company’s activities, or controls the company’s activities. It is never a company, other legal entity, or a nominee or proxy, says PNGEITI.

“By 2020 companies applying for or holding a participatory interest in an exploration or production of an oil, gas or mining licence or contract in an EITI country must report the details of the beneficial owner (persons who own, control or substantially benefit from these companies and interests), as well as identifying any ‘politically exposed persons’ – these are politicians or officials or their family members or agents, with a direct engagement in regulating, setting laws, tax rates, negotiating contracts etc.”

“More than 50 EITI member countries have published their plans for how to disclose the real owners of companies in their extractive industries, which will require establishing legal and institutions arrangements for application, including establishing registers of such real owners,” said PNGEITI head of National Secretariat Mr Lucas Alkan.

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Basamuk People Threaten To Shut Down Ramu Mine Refinery

View of the Ramu Nickel mine refinery. Image by Christopher McLeod/Sacred Land Film Project.

Jayne Safihao | Post Courier | 6 July 2018

While deputy Prime Minister, Charles Abel and a large team of government officers arrived yesterday in Madang for the much anticipated royalty payment to those affected in the Ramu Nico project, neglected Basamuk landowners have threatened to shut down the Basamuk refinery on Monday.

The threat was issued to the Ramu Nico management yesterday by executives of the Basamuk Landowners Association, in what was a ‘strained meeting’.

Spokesman and activist in the fight against having the deep sea tailings placement in Basamuk, Sama Mellombo, spoke strongly against the Mining Resource Authority (MRA), saying it had no legitimate powers to negotiate royalty payments.

He said that the Lands Department made an Improvement Inspection Report in 1999 which stated that the land should be forfeited and given back to customary landowners to improve.

Mr Mellombo said this was before the Mining Lease 42 was granted, “as described as to the depth of 30 metre below the natural surface of land situated near Basamuk”.

“Basamuk land is exempted from compulsory acquisition. Since the first Lands Titles Commission hearing in 2011 there has been no decision made over the land title. So after two LTC hearings no one can claim the land. We’ve had to go to the National Court to sort ownership issues but the courts say they are not the proper authority to decide who owns the land. It’s been a volley between the courts and LTC since,” he said.

“Now who has given MCC, the Chinese developer, the Basamuk land?”

MCC spokesperson, who did not want to be named, confirmed the meeting with Mr Mellombo’s team saying that the issue of Basamuk landownership was an “in-house dispute” between factions of landowners which has been prolonged and has put the company in an awkward position.

“The company can go ahead and pay them outstanding land use payments and such but this is hindering us. We recognize Mellombo as an LOA chairman though,” he said.

Mr Mellombo when asked if this was an in-house dispute, scoffed the idea saying:

“There is no in-house matter because according to MOA review of 2013, doesn’t allow two associations in one area. The company and the government are playing games and interfering with LOA affairs which they have no right to.”

The recognised groups within the project area to benefit today are Maigari Inland pipeline, Coastal pipeline and Kurumbukari LOA groups excluding the Rai Coast people in Basamuk.

It seems while the in-house matter is yet to be sorted out and LTC, yet to decide land ownership, the Chinese have somewhat put a refinery and Deep Sea Tailings Placement.

Mra Officers Allegedly Mishandling Landowners Issues

Jayne Safihao | Post Courier | 6 July 2018

The alleged mishandling of landowner issues by concerned MRA officers (named), in one of the impact areas of the Ramu Nico project may lead to the possible closure of the refinery at Basamuk.

In a petition, chairman of the Baasamuk Landowners Association Sama Mellombo, had singled two MRA officers as being very biased, not properly organising quarterly meetings and giving a complete blackout on project developments to the Basamuk LOA.

“I call on the Governor of the province, MPs for Madang and Rai Coast to get rid of these two gentlemen as they are not doing what they are supposed to be doing. MRA has not been paying our grants since, despite a competency jurisdiction hearing by the courts recognising us. These two gentlemen have been taking sides with certain individuals, coming to Madang and using it as a holiday resort and playing smart,” he alleged.

In the petition, he gave the company 48 hours before the refinery is shut down unless both men are replaced forthwith; that the refinery landowners identified by the Department of Lands and Physical Planning in 1999 be served on the proprietor, fully supported by a study of the Yangonan People of Rai Coast 1999 sponsored by Highlands Pacific and National Court order 2005/2010 regarding the subject land; and that the state show proof that Basamuk ground identified by Survey File No, 12/257 was legally acquired.

“We have been reliably informed that one MRA officer had a meeting to brief all the chairmen and executive committees of KBK, Inland and Coastal LOAs and singled out a Willie Galuk for reasons known only to himself. Who does Galuk represent? Not Basamuk I hope,” he said.

“We are concerned because this is not the first time the two officers have deliberately avoided Basamuk LOA executive committee since the outcome of the appeal to the National Court seeking to set aside the court order declaring that the election facilitated and conducted in Mindire village in 2016, was illegal.

“The landowners of Basamuk have been denied natural justice caused by these two officers who fail to remain impartial at all times when it comes to landownership issues. They see fit to be personally and deeply involved in the affairs of Basamuk LOA in-house matters that is causing the current status quo.

“Their actions are not in the best interest of the National Government through MRA and Ramu Nico management as they have failed to ensure four LOAs in the Ramu Nickel\Cobalt project has legal standing in the MOA; failed to conduct due diligence to ensure when conducting elections for associations over the years made sure of legal and statutory requirements according to association extract provided by the IPA for each term.

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Sir Mel and BCL have no Balls!

PARK Social Soccer Co. would like an apology from Mel Togolo and Bougainville Copper Limited

Bougainville charity donation’s valour stolen by Sir Mel Togolo and Bougainville Copper Limited in front of 100’s of school children.

It was widely reported in the PNG Press that BCL gave 40 soccer balls to school children in Arawa during the recent visit last Friday by the Papua New Guinea Prime Minister as part of the visit. 

Sir Mel further went on after handing the balls over to the kids.

“BCL chairman Mel Togolo said the company had a proud tradition of providing community support in Bougainville and it was keen for this to continue.

“We are a company that is committed to making a positive difference in the lives of Bougainvilleans,” he said.

“In things like health, education, sport or other important community activities and cultural events we are very pleased to be able to lend a hand.”

However, the charity behind the gift, PARK Social Soccer Co., of the 40 footballs says BCL had no role to play in their purchase.

Sam Davey of the charity, PARK Social Soccer Co says:

“The balls were not purchased by BCL, they distributed them to the communities.

“We are a social enterprise and make the balls. For every ball sold we pass another ball to kids in need”.

“We partnered with Hampton Soccer Club in Melbourne, they bought balls for their club, and we passed an equal amount to PNG. PARK paid for the shipping to PNG”.

“It would be nice if PARK Social Soccer Co was mentioned in the article and given credit.”

It would also be nice if Sir Mel came clean and apologised for stealing the valour of PARK Social Soccer Co and claiming that BCL was responsible for the donation when it wasn’t involved at all.

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Resource owners get ‘peanuts’ says top doctor

Locals in Morobe Province

Loop PNG | July 4, 2018

Resources owners in this country are the people of PNG but yet, when it comes to harvest sales, the country and the landowners get ‘peanuts’, says the National Doctors Association president.

Dr. James Naipao, as a concerned citizen, says Papua New Guinea has lost a lot and will continue to do so.

“Harvesters of our resources, who are foreign owned companies and corporations, are also given the majority of the harvesting and sales cuts, resulting in giving less than two percent of the profit or sales return to the resource owners who have been custodians to these resources for thousands, if not millions, of years.

“This is a mammoth slap and defeat in the eyes of everyone, and truly, it is an act of thievery. There must be an urgent reversal of these decisions and declarations,” stated Dr Naipao.

“The rape and siphoning of our all renewable and nonrenewable resources since the 1800s up to now by colonizers and developers have had a long lasting negative impact in this country.

“PNG has lost billions of dollars, and if not trillions, since the 1800s to the present day.

“The country is now experiencing the negative side of it and it has been worsening in the last ten years.”

The doctor said to make matters worse, the influx of Chinese and Indo-Asians ashore to be employed in jobs and run simple businesses that Papua New Guineans can do is a huge slap in the face.

“Why is the Immigration Department and Work Permit Division in the Labour Department allowing this uncontrollable influx that is having an eventful unsatisfactory outcome for national workers and businesses?

“And, to further make matters even very challenging for the young nation, PNG is now experiencing being colonized for the second time in our short history, and this time being colonized by the ‘Chinese Money’, and that, it will on the long run have a catastrophic effect. Antagonists will think otherwise.

“China might own the economy of Papua New Guinea one day. Papua New Guinea must be cautious of this avoidable outcome. Africa and Sri Lanka have sadly felt this,” added Dr Naipao.

“For our depleting resources, with the least of the returns, we alone can change the course of that for a better tomorrow.”

He said landowners must have automatic equity in the resources development even if they do not contribute cash.

“Their cash is the resource their have. They should have 20-30 percent ownership of projects.

“PNG Government and provincial government can share the 30-40 percent and the developer to get 40-50 percent. Is the distribution wrong? No, it is not.

“We own the resource(s). And, why are resources owners crying every now and then? The answer is right in front of us, yet we feel it is complicated and undoable. The resource owners’ pain, sufferings and cries will be reflected in the talk and actions, yet we are blind.

“Why is the Panguna Mine closed? Why are roads being dug and big machines burnt in Hela Province?

“Why are the landowners in New Ireland Province worrying about the first ever undersea mining in the world, and its seabed used as a guinea pig?

“This nation needs good leadership that puts people first, fears people, accepts defeat and admits wrongs.

“The country does not need leaders that are reckless, corrupt and falsely glorify God.

“Leaders who believe in the abilities of Papua New Guinea are caring leaders.”

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Resources curse PNG communities’ future

Michael Main | East Asia Forum | 15 June 2018

Two recent reports on the massive ExxonMobil-led PNG LNG project have brought renewed attention to the undesirable economic and social impacts of Papua New Guinea’s largest-ever resource extraction enterprise. This research shows that PNG LNG has hurt, rather than grown, PNG’s economy and that it has inflamed violence and tensions in the PNG highlands region. Papua New Guinea’s so-called ‘resource curse’ has hit local communities the hardest.

Violent conflict in the PNG highlands, certainly among the Huli landowners of Hela Province where PNG LNG is based, has been an almost constant feature since before first contact with colonial forces in the 1930s. Levels of violence have fluctuated markedly in response to historical conditions. The 1970s and 1980s were relatively peaceful, as PNG transitioned from Australian administration into the early independence years. But local political frustrations combined with the introduction of guns led to high rates of violence in the highlands around the 1992 elections.

Since that decade, Papua New Guinea’s government services have been in constant decline. A new generation of Huli has emerged that is less educated than the generation of its parents — Huli who were educated between the 1960s and 1980s are more literate and fluent in English than those who were of school age from the 1990s onwards. Health has deteriorated with a decline in health services and the introduction of store-bought processed food. By the late 2000s, when the PNG government was promoting the PNG LNG project as a looming economic miracle for the country, the Huli population was desperate for a project that they believed would raise them from the state of poverty and neglect that had gradually descended upon them since independence.

During the first few years of the PNG LNG project’s construction, it looked as if all its grand promises were being fulfilled. ExxonMobil and its partners invested US$19 billion — a staggering amount for a country whose GDP was a little over US$8 billion in 2009 (just before construction began). Cash was everywhere in the project’s area, and this cash was accompanied by plentiful jobs and shiny new land cruisers. Large machines and heavy equipment were flown into a purpose-built international airport in one of the remotest and most neglected parts of Huli territory.

During these construction years there were significantly lower levels of violent conflict in Huli society. People were living in conditions of hope, and they felt that the material conditions of their lives were undergoing much-desired change. Fighting men had things to do with their lives other than fight. Huli children now expected to grow up to experience a higher standard of living than their parents. In short, Huli society became oriented towards the future, and its history of warfare was part of a social logic that was no longer relevant.

In 2014 construction of the PNG LNG project finished and production of liquefied natural gas began. Jobs disappeared and money dried up, revealing a corrupt elite that had little concern for the impoverished landowners.

Crucially, the landowner beneficiaries of the project had not been identified prior to construction, despite urgings from the companies’ own consultants for them to do so. This has meant that no landowner royalties have been paid. Nothing has come to replace the money that was flowing in during the construction phase — a large portion of which had been invested in the expectation that the new airport would bring in tourist dollars. Guest houses and eco-tourism lodges were built, but the airport remained in the private and exclusive hands of ExxonMobil, guarded by ExxonMobil-funded PNG Defence Force personnel and police. The promises contained in the Landowner Benefit Sharing Agreements with the PNG government began to languish, and frustrations simmered.

By 2016 it was clear that ExxonMobil and the PNG government were systematically breaking these promises and there was a widespread view that the state had little interest in fulfilling its obligations to the Huli landowners. Since 2016 there has been a steady increase in levels of violent conflict across Huli society.

In February 2018, a magnitude 7.5 earthquake devastated communities in the PNG highlands, including those in the PNG LNG project area. This disaster has only compounded frustrations, especially as the PNG government has little capacity to distribute aid and the project’s operator is perceived as being more concerned with protecting its assets than assisting affected communities. Aggravating the situation is the fact that most locals are of the belief that the PNG LNG project itself was the cause of the earthquake.

Hopelessness, frustration and intense anger at the unfulfilled promises of the project’s owners and the government have combined with an ever-growing arsenal of military-style weapons in Hela Province. The viability of the PNG LNG project itself, and along with it the economic viability of Papua New Guinea as a whole, are at risk.

Michael Main is a PhD candidate at the School of Culture, History and Language, The Australian National University. He is co-author of the report On Shaky Ground: PNG LNG and the consequences of development failure, published by the Jubilee Australia Research Centre in May 2018.

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Another ‘world class’ mining company in a corruption scandal

Glencore shares drop nearly 7% on report of SFO probe

Henry Sanderson | Financial Times | May 18, 2018

Shares in Glencore fell by their most in almost two years on Friday after a report said the miner may face a bribery probe by the UK’s Serious Fraud Office over its ties to Israeli billionaire Dan Gertler in the Democratic Republic of Congo. 

The SFO is planning to seek formal approval for a probe into Glencore’s dealings in the country with its former business partner Mr Gertler, Bloomberg News reported. Mr Gertler was sanctioned by the US in December for his “opaque and corrupt mining and oil deals,” in DRC. 

Mr Gertler previously owned stakes in Glencore’s two key projects in the resource-rich country, before Glencore bought him out for $960m in 2017. 

Glencore shares fell 6.8% per cent to 370.75p after the news. 

The reported possible probe is the latest setback for FTSE 100 member Glencore over its activities in the DRC. Last month the country’s state-owned miner Gecamines launched legal action against the company seeking to dissolve its joint venture Katanga copper mine, saying Glencore had drained it of money. 

Mr Gertler has also taken Glencore to court saying he is owed almost $3bn in royalties from its mining projects under previously agreed contracts. 

The SFO said it could neither confirm or deny the Bloomberg report. Glencore declined to comment. 

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