LNG landowner frustrations rising again in PNG

Hides landowners met several times with the government to discuss outstanding LNG Project payments. Photo: Supplied

Radio New Zealand | 21 March 2017

Papua New Guinea’s major LNG Liquefied Natural Gas or LNG project could be shut down again due to simmering landowner frustrations.

Landowners in the Highlands province of Hela say the government has let them down again by not following through on promised benefits from the multi-billion dollar gas project.

The landowners mounted a protest blockade of the project’s conditioning plant in Hides last August.

In response the government signed an agreement to address landowners’ grievances over lack of benefits and equity arrangements within thirty days

Hides landowner representative Andy Hamaga said government did not honour their promise.

“Unfortunately to date they haven’t done anything. We are looking at options, whether to take them to court, or go with the national arbitration, or go go back again and shut down the whole (LNG Project) operations before the general election,” he said.

At the time of last year’s blockade of the LNG plant, in response the government said the delays in royalty payments to landowners were due to complications over identifying genuine landowners.

The Petroleum and Energy minister Nixon Duban said that it was in the best interests of Hela to ensure that the right beneficiaries would be getting the payments.

“This project is going to be here for a long time,” Mr Duban explained at the time.

“We cannot make a mess and pay the wrong people. And so the onus is on the state to ensure it’s done properly. Whether we take one year or a couple of months, we must ensure it is done properly.”

However, Mr Hamaga said this was misleading.

“The state minister is not giving us the actual information,” he said.

“They were supposed to do this clan vetting and landowner social mapping thing before we signed the big Umbrella Benefit Agreement we have signed in 2009. I think they’re using this one as an excuse.”

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Fiji villagers claim mine spill destroying fishing grounds

Shalend Prasad points at a water outlet from the bauxite mine alleged by members of the public to be waste water from sediment ponds within the mine. Picture: LUKE RAWALAI

Luke Rawalai | Fiji Times | March 20, 2017

PEOPLE in Nasarawaqa, Bua and those living along the Dreketi River claim the decline in marine resources around the area is due to spillage of waste water from the bauxite mining in Naibulu, Dreketi.

Sasake villager Apisalome Tumuri claimed that the spill off from the mine during heavy rain forced marine life out from the area to the deep sea.

The 52-year-old fisherman claims there had been a lot of changes in their fishing ground since mining began in nearby Naibulu, Dreketi.

Mr Tumuri said fish, crabs and bech-de-mer had begun disappearing from their fishing grounds during the past three years. He said in the past, villagers could pick shellfish and fetch mud crabs from nearby mangroves.

He said they now had to go out into the open sea to get these.

Dreketi resident Losana Lomani said the Dreketi River had turned red last week after heavy rain was experienced in the area.

Ms Lomani said they learnt that the muddy water originated from the mining site and that women in the area found it hard to find freshwater mussels in the river.

XINFA Aurum Exploration Fiji Ltd’s senior officer Sang Lei said the muddy water witnessed by villagers was normal rain run-off from land.

Mr Lei said all waste water from the mine was contained in the sediment pond at the mine and that none had seeped into the waterways as claimed.

Responding to queries, permanent secretary for Lands and Mineral Resources Ministry Malakai Finau said it was normal for the sea to turn muddy during heavy rain.

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How the free market failed Australia and priced them out of their own gas supply

While Asia is enjoying low prices for Australian gas, back home things are getting worse. (Origin Energy)

Ian Verrender | Business Editor | ABC News

Fashion has a habit of turning full circle.

Remember that old shirt, the super tight one with the stretchy material and weird collar that you found at the bottom of the wardrobe? What on Earth possessed you to buy it, you wonder. What were you thinking?

For anyone who lived through the ’70s, the memories of those fashion crimes often come back to haunt us.

It was also an era when free market ideology began to assert itself in public policy. And with good reason.

Government-run businesses were inefficient, bloated and bureaucratic. Letting them loose would free up scarce public funds, competition would lower prices and scarce resources would be allocated with the greatest efficiency.

When Margaret Thatcher came to power in the UK in the 1980s, she unleashed a wave of privatisations that transformed the economy and contributed to decades of economic growth.

It didn’t take long for the fad to gain ground here. Government-owned businesses from airlines to banks and insurance companies were jettisoned.

Even vital infrastructure like roads, telecommunications and power generators were flogged to the highest bidder with little thought about the long-term consequences.

But have we gone too far? Free market theory, while it’s terrific in theory, has some almighty shortcomings and, as we now are discovering, may not be the economic cure-all we once imagined.

Suddenly, the winds have shifted. Business leaders talk in hushed tones, openly uttering a phrase once considered unmentionable: market failure.

In the past few days, there has even been a call for part nationalisation of our energy industry from a free market wheeler dealer. More on that later.

A fortnight ago, competition chief Rod Sims let fly with his annual swipe at the fee-gouging taking place at our airports.

Airlines and the travelling public were forking out an extra and largely unnecessary $1.6 billion in fees.

What’s going on with gas?

The problems arise when the business being sold is a monopoly, when the buyer, having paid an exorbitant price, is given carte blanche to extract its tonne of flesh. The benefits flow from the community to private interests, often offshore.

Generally, we’re talking about utilities — things like power companies, for instance. And then there is gas.

For years, electricity and gas operated independently. But the two have become intertwined as the shift towards a cleaner environment and lower emissions has thrust gas firmly into the box seat as the transition fuel to generate electricity.

We’ve suddenly discovered, however, we don’t have enough. It’s no exaggeration to describe the power situation now facing eastern Australia on both fronts as a catastrophe. And here’s why.

Within the next four years, Australia will overtake Qatar as the world’s biggest supplier of gas. We are sitting on vast gas reserves. In fact, we’re swimming in the stuff.

And yet, we face critical shortages at home which could starve manufacturers of fuel, see power outages across the eastern states and force energy prices through the roof while any profits that are made will be shipped offshore.

This is a public policy fail of epic proportions.

And it’s worth getting a handle on how it all came about and the shenanigans employed by the gas majors that have deliberately created this crisis and the supposed shortage which is a total con.

How could this happen?

First, however, consider this: the gas we are exporting does not belong to the energy giants. It belongs to us.

Companies like Woodside, Origin and Santos and their foreign partners merely have bought the right to exploit those gas reserves, which was supposed to lead to massive benefits for ordinary Australians.

Here’s the scorecard so far. Having spent close to $250 billion building new export facilities, no-one seemed to think that flooding the globe with extra energy would see global prices drop.

They have. Gas prices into Asia, where we export, have now dropped below what it costs to extract, process and ship the stuff. In fact, the east coast suppliers so far have written off around $6 billion on their new plants.

It gets worse. Extracting the gas from coal seams in Queensland was a little more problematic than originally thought. Then farmers, incensed at the activity taking place on rich agricultural land, began shutting the gates.

That meant the companies couldn’t get enough to satisfy the huge supply contracts they’d written in Japan, South Korea and China. So they plundered the supplies, much of it from Bass Strait, that once powered the domestic market. That’s why we have an artificial shortage.

But wait, there’s more. No-one ever considered that once we were plugged into the global market, we’d be paying global prices. Around the time all these new gas plants were developed, prices in Asia were up to $25 a gigajoule. Back then, we were paying between $2 and $4.

Prepare now to be outraged. Global prices have more than halved to $10 and under. Domestic prices, meanwhile, have soared, to well above $10 because of the domestic shortage.

By putting the domestic market under pressure, they deliberately pushed local prices higher.

The upshot is that we now are paying more than Japanese manufacturers for our own gas. In fact, power company AGL is actively considering buying Australian gas in Japan and shipping it back home. And why not? It’s cheaper there.

That means energy-rich Australia is subsidising Asian manufacturers while penalising our own, a situation likely to force many to the wall.

Just to rub salt into the wound, the ramp-up in exports has not delivered the resources rent tax bonanza once promised by US giant Chevron. In fact, thanks to a shifty cash shuffle, ExxonMobil, Chevron and Shell until two years ago were booking around $3 billion a year in profit, tax free.

That’s seen our Petroleum Resources Rent Tax proceeds, which in the past delivered around $2 billion a year, plummet. In fact, by the time we overtake Qatar for global gas domination, it’s anticipated our resources tax will collect just $800 million.

Qatar, on the other hand, is expected to receive $26.6 billion in royalties that same year for roughly the same volume of exports.

So what’s being done about it?

Treasurer Scott Morrison last year declared he would urgently look into the matter. He’s called a review to get to the bottom of why soaring exports have coincided with a halving in the resources rent tax collections.

The review panel could do worse than read a report sent out last week by global investment bank Credit Suisse.

Hardly a bastion of left-wing ideologues, the report — entitled The Wolf Who Cried Boy — raises the prospect of Australia establishing a national oil company as one possible solution to the concocted crisis. And it goes straight for the jugular.

“If the gas producers and sellers are the wolves, they themselves are seemingly calling foul just as the danger is truly upon us,” it begins.

“We wonder whether a national oil company, a la Kumul Petroleum in PNG, could work? Instead of the petroleum resources rent tax on future projects, could we see state participation instead?”

Could we indeed? There undoubtedly will be howls of protest from the business lobby and their associated hangers-on. But consider this. Is this not the ultimate form of capitalism?

We are the landlords. The energy companies are tenants. If we had a controlling stake in the business, it would be much easier to ensure the kind of chicanery that has taken place in the past few years was never repeated. There would never be shortages.

And just perhaps, we’d end up with a dividend cheque, maybe even along the same lines as Qatar’s.

Just a thought.

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PNG PM O’Neill calls on the Island Nations around the World to Work Together to Protect Marine Resources

Has O’Neill forgotten his government is forging ahead with experimental seabed mining? 

Open cut strip mining of the sea floor doesn’t sound like a good way of ‘preventing marine resources being destroyed’!

PNG Today | March 17, 2017

The Prime Minister of Papua New Guinea,  Peter O’Neill has called on Island Nations around the world to  come together for global action to protect their communities from marine damage.

Prime Minister O’Neill made the comments in Suva, Fiji, where he attended the Pacific Regional Preparatory High-Level Meeting for the United Nations Conference on Oceans on March 16-17.

PM O’Neill said island nations have valid marine resources concerns that must be taken up by the global community.

“Island Nations might be small in terms of geography, but we are many in number, and together we can bring about global change on issues harming our communities,” the Prime Minister said.

“We are not only the Pacific Island nations, but island nations and communities from oceans and seas right around the world.

“Pollution, illegal fishing and climate change destroys ecosystems in island nation maritime areas.

“We did not cause these problems, but these problems cause damage to our communities today and into the future.

“This meeting in Suva is all about building consensus and establishing a way forward to bring the global community with us to prevent our marine resources being destroyed.”

Following earlier meetings with United Nations representatives and partner Pacific Island nations, Leaders attended the High-Level meeting today to finalise the actions to move forward ahead of the UN Conference of Oceans in June.

“All countries, including our own, have a role to play in managing our own waterways, as well as the pollutants that flow to the world’s oceans.

“Papua New Guinea’s Vision 2050 is a National Development Roadmap further underscores environmental protection as an important pillar.

“Selected areas are being considered as Marine Protected Areas so that nature can replenish marine resources.

“Papua New Guinea already has in place the Strategy for Responsible Sustainable Development, STARs, which addresses the integration of the global 2030 Agenda.

“This includes the United Nations Sustainable Development Goal 14 incorporated into the national planning process.

“SDG 14 is intended to conserve and manage the sustainability of the world’s oceans, seas and marine resources so as to ensure sustainable development.

“This is in its early phase and will ensure marine life sustainability and bio-diversity for decades to come.

“But ultimately, there is only so much individual countries can do. We have to come together as a global community to have workable solutions for our future generations.

“For Pacific nations, we have to ensure that we lay the groundwork now to ensure real and tangible outcomes from the UN Conference of Oceans later this year.”

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Fiji villagers complain of ‘red’ sea

The sediment pond at the XINFA Bauxite mine in Naibulu, Dreketi which is said to have spilled waste water. Picture: LUKE RAWALAI

Luke Rawalai | Fiji Times | March 17, 2017

XINFA Aurum Exploration Fiji Ltd has strongly denied claims that sediment ponds at their mining site were overflowing, spilling into waterways and ending up in the sea.

The sediment ponds hold wastewater from the mining process.

The company made the statement after people raised concerns regarding the change in water colour during adverse weather experienced last week in Nasarawaqa, Naibulu, Nakalou and surrounding areas.

The company’s senior officer San Lei said it was just normal water runoff from land.

Mr Lei said all wastewater from the mine was contained in the sediment pond at the mine and none had seeped into the waterways as claimed. However, villagers of Sasake in Bua claimed heavy rain in the mine area caused spill-off from the sediment ponds that ended up in the sea.

Viliame Bailato, who claims to have fished in the area for 20 years, said seawater around the village turned red during the heavy rain, claiming it was soil carried by rain water from the mining site and the sediment pond.

Mr Bailato said the normal run-off from land during heavy rain was different from what they experienced last week.

He said last week they had to travel to open sea to catch fish because there were no fish within the lagoon.

The 53-year-old said the incident had been happening for a while now, claiming the spillage had even driven mud crabs and other marine organisms from their shores.

Nasarawaqa fisherman Oliva Uga alleged fish numbers in the area had dwindled because of the spillage.

Mr Uga said the waters in the area used to be known for the schools of mackerel or salala.

He said for three years now they had no sign of the fish in their fishing grounds.

Other fishermen in both areas claim waters within the Nasarawaqa, Dreketi and Nakalou areas had been affected by the spillage last week.

Responding to questions from this newspaper, permanent secretary for the Lands and Mineral Resources Ministry, Malakai Finau, said muddy water experienced last week was the result of normal run-off from land. Mr Finau said it was normal for the sea to turn muddy during heavy rain, adding this even happened at the Rewa River.

He said officials from the ministry had been at the mine to verify claims from people, adding they would send them to the mine site again to verify the current claims.

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President Momis announces support for the new Bougainville Copper Limited (BCL)

Bougainville News | 16 March 2017

President of the Autonomous Bougainville Government Chief Dr John Momis has announced his support of the new Bougainville Copper Limited (BCL) .

The new BCL is step away from the post-colonial and pre-crisis arrangement that had Bougainville at a disadvantage; it is partly owned by the Autonomous Bougainville Government, the National Government, Panguna Landowners and people of Bougainville to develop the defunct Panguna Mine with the landowners for the benefit of Bougainville.

President Momis said the ABG as regulator will work together and support BCL explore alternative Panguna development options that will accommodate the interest of project stakeholders to fast track the development of the Panguna resources.

“Since BCL was invited to formally re-engage in discussions in Bougainville in 2012, the landowners have consistently stated their preference to work with BCL as the developer,” Momis said.

This was recently reaffirmed by the nine (9) Landowner Associations in Buka on 23 February 2017 after the BCL team led by Chairman Rob Burns made presentations to the ABG leaders and the nince landowner association executives and representatives on the new BCL’s development proposal for Panguna.

During that visit the Chairman present to the ABG leaders and the landowners a staed development proposal outlining how different the new Panguna approach will be under the new BCL hich now owned by the ABG, the Panguna landowners, people of Bougainville and the National Government.

Due to the recent majority of shares transferred by the Rio Tinto to ABG and the National Government, the ABG and the landowners now view BCL as not the devil we know but the devil we won.

The ABG and the landowners will now have to take advantage of this scenario and work out a positive strategy for an outcome that will be equitably beneficial for all stakeholders especially the landowners.

The ABG and the landowners have also committed to addressing the immediate challenges to progressing the Panguna project and looks forward to working in partnership with BCL through the project development cycle.

During discussions held this week between the BCL and the ABG, the two parties reaffirmed their commitment in which a way forward can be agreed for the immediate addressing of stage 0- Removing impediments under the BCL proposed staged development proposal presented during 23 – 24 February visit.

In those discussions it was also mentioned for BCL’s consideration to find ways and opportunities in its exploration to project development financing phase to support the ABG’s immediate development agendas as a way of building a long term unwavering development in Panguna.

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PNG group says mining ombudsman ‘last hope’

Porgera mine. Photo: wikicommons / Richard Farbellini

Radio New Zealand | 13 March, 2017

A human rights group in Papua New Guinea says it would be a great relief if Canada agrees to appoint an ombudsman to monitor PNG’s mining sector.

The Akali Tange Association has written to Canada’s Prime Minister, Justin Trudeau, as part of a wider global campaign calling for the appointment.

The group said Canadian-owned Barrick Gold had employed security guards at Porgera who had committed killings, assault, and rape.

Its executive officer, McDiyan Robert Yapari, said an ombudsman would finally provide some justice for victims as well as holding mining companies to account.

“Now we don’t have any choice but only our prayers – our only hope now lies with the Canadian Prime Minister, if he sets up this Canadian extractive human rights ombudsman – that would be a great relief for us,” said McDiyan Robert Yapari.

Mr Yapari said the situation at Porgera Mine was getting worse and an ombudsman was the community’s last hope.

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