Tag Archives: Charles Abel

Govt Concerned Over Delay On Review Of Mine Laws

The  Deputy PM needs to get his story straight. Last month he warned against rushing new mining projects saying ‘We want economic integration, but not economic exploitation’. ‘Papua New Guinea must make sure that integration takes place at a pace that allows local institutions, industry and local businesses to develop.’ If not, Abel said, ‘sophisticated financial and political capital’ will systematically dispossess the country’s natural resources and put them into the hands of foreigners’.

Now its seems he is happy to rush ahead with new mines regardless of the consequences for PNG and local communities…

Matthew Vari | Post Courier | November 8, 2018

Deputy Prime Minister Charles has expressed his concern over the prolonged review process of the proposed Mining Act amendments into the industry, citing a critical juncture in existing and new investment decisions in the sector.

He said while it is the prerogative of government to review laws, in this case 26 years since the 1992 Act was changed, he said government is aware of concerns from the mining industry which it shared as it keenly negotiates key projects such as the Wafi-Golpu Joint Venture Project.

“Governments have a responsibility to periodically review legislation based on experience,’’ Mr Abel said.

“Sufficed to say that this will be an ongoing consultative process, I know there have been concerns raised by the mining industry and we take them onboard.

“But I would hope that those issues don’t affect some of the projects that are imminent.

“People have made investment decisions and commitments based on the existing legislation and I would hope that we can negotiate those projects under the existing legislation and grandfather (exempt from requirements of new legislation affecting previous rights, privileges, or practices) them.’’

He said while the mining legislative review has been under way for a long time in relation to the proposed amendments when passed should cover prospectively rather than some of the projects that are imminent.

“I would hope that that review process does not interfere too much with some of the existing ongoing negotiations of the current projects under current licensing obligations,’’ he said.

“I don’t want to get bogged down in mining reviews and legislative reviews and good projects that are in hand that can benefit the country greatly under the existing legislation should not be delayed or investors shouldn’t be punished because of a protracted process reviewing legislation.”

Advertisements

Leave a comment

Filed under Financial returns, Papua New Guinea

Low Tax Revenue From PNG LNG ‘Being Addressed’

Charles Abel

Post Courier | June 8, 2018

Audits into several major resource companies will run parallel with a joint exercise with commercial banks to identify taxpayers, Treasurer and Deputy Prime Minister Charles Abel announced yesterday.

“Audits are also underway by the Bank of Papua New Guinea into foreign currency accounts held by resource companies,” Mr Abel stated in an email.

“This is to ensure compliance with the remittance of proceeds in foreign exchange back to Papua New Guinea.

“Increased expectations for revenue collection at the IRC and Customs have also been factored in the 2018 budget, and collections are on track to date.

“I’ve been assured by the Internal Revenue Commission in writing that Kumul Petroleum is fully meeting its tax obligations.

“The implementation of these measures does not mean that we are relaxed. We have set clear objectives in terms of taxation revenue, as a percentage of GDP, to push up to 14.6 percent in 2018.

“I would like to see this rise to 20 percent eventually.

“Put simply, our revenue to GDP needs to improve, and that means maintaining efforts to grow the economy with a more efficient tax system and smarter project agreements.”

Abel was responding to Opposition leader Patrick Pruaitch’s accusation that PNG LNG partners were evading tax.

Mr Abel said the existing taxation structure was set by Pruaitch when he was in government.

“It is good to see the former longtime treasurer suddenly talk about these issues now,” Mr Abel said.

“The taxation arrangements with the PNG-LNG Project were established under the former National Alliance Government.

“These arrangements have seen relatively little tax paid to the government since production began because of a combination of low gas prices and accelerated depreciation.

“Treasury is now developing a fiscal template to establish a reviewed tax framework that does not impose extra burden on resource projects, but provides smoother and more consistent revenue to the Government and is easier to administer.

“In terms of the Internal Revenue Commission, our Government has invested significantly in capacity building there supported by an additional K19 million funding in this year’s budget.”

Leave a comment

Filed under Financial returns

PNG to learn from major gas project flaws

Papua New Guinea’s government is set to reconsider how it taxes future resources projects.

AAP | 2 May 2018

The Papua New Guinea government insists it will learn lessons from the failure of a liquefied natural gas project to deliver on a promised economic boom to its people.

A report by think-tank Jubilee Australia released on Monday concluded PNG residents “would have been better off had the project not happened at all”.

It was critical of economic, household income, employment, government revenue and import impacts of the project.

Flows from the ExxonMobil-led project began in 2014 and it now supplies eight million tonnes of gas a year to Japan, South Korea and China.

However delays in the landholder identification process mean locals in Hela province are yet to receive royalties from the project, resulting in tribal violence.

The gas project was partially funded by Australia after the export credit agency Efic made its largest-ever loan of $500 million to ExxonMobil, OilSearch, Santos and the PNG government in 2009.

An angry PNG Prime Minister Peter O’Neill dismissed the report, which he hadn’t actually read, as “fake news” and “utter nonsense” during a speech in Brisbane to the Australia-PNG business forum on Tuesday.

PNG Foreign and Trade Minister Rimbink Pato said the LNG project was a “first class operation”.

“We are learning and if there are opportunities to do a better deal, we will,” he told AAP on the sidelines of the forum on Wednesday.

“Each project brings new challenges.”

Treasurer Charles Abel welcomed the analysis and said his department will examine the veracity of the numbers.

“We are aware that the scale of benefits from the project has not matched expectations fully, especially when commencement of production coincided with a collapse of the oil and gas prices,” Mr Abel told the Post Courier newspaper.

“I have given written instructions to Treasury to develop a template for project agreements going forward where the tax regime is more production (royalty) based rather than profit-based.”

ExxonMobil has defended the project saying it had contributed $5.69 billion to local businesses and the government through employment tax and royalties.

The company’s PNG managing director Andrew Barry didn’t directly address the report during his address at the forum on Wednesday but trumpeted community programs in health, women’s empowerment and agriculture.

Another mining executive, Craig Jones from Newcrest Mining, which operates the Lihir gold mine, warned PNG legislative and taxation changes “could shake investor confidence”.

“There’s a great deal of uncertainty and nervousness created by proposed amendments to the Mining Act,” he told the forum, adding that PNG was an expensive place to do business.

“Apart from the highly-debated contributions made by resource companies in company tax, there are many other contributions resources companies make – many of which are voluntary – and these benefits have direct impact on the lives of Papua New Guineans.”

Leave a comment

Filed under Financial returns, Papua New Guinea

EITI Report Launched

Mathew Vari | Post Courier | March 19, 2018

The PNG Extractive Industries Transparency Initiative (EITI) national secretariat launched its 2016 and 2015 reports last Friday.
Treasury Minister Charles Abel was on hand to launch both reports as the head of the secretariat Lucas Alkan delivered the progress of the country to the global initiative.
In launching its fourth report, Alkan said the Multi Stakeholder Group (MSG) agreed to publish the reports together as both reports will be used by the EITI International Secretariat to assess PNG’s progress in implementation the initiative in the country.
“EITI International started taking this thing up to make sure that companies that are operating in the countries we should know who is the owner, the shareholders, these are the things that EITI international has made a requirement for us to take on board as an implementing country,” Mr Alkan said.
“We are also conducting sub national payments. We have been concentrating at a national level of payments and transfers taking place.
“But we are all aware that a lot of the transactions happen down the line past the national level to provincial local and district resource revenues so we need to put some light into what is happening, accountability, transparency got onboard,” he said.
The PNG EITI national secretariat was established NEC when PNG applied for membership 2014 and the international secretariat accepted the country as a candidate.
“The reports have been covering the revenue streams and reporting entities. Reporting revenue streams like corporate income tax, group tax, mining and petroleum tax all these things are being reported in this reports.
“We are reporting on companies that are in production and exporting these commodities and not exploration activities.
“There is a section on legal framework and fiscal regimes tax arrangements and taxation legislation governing the extractive sector activities in the country management and distribution of revenues, how the money from the resource sector gets into the budget.”
Mr Alkan said the documents are not just reports but need to be translated to actual reforms that matter to the country as far as transparency, accountability and governance is concerned.

Leave a comment

Filed under Financial returns, Papua New Guinea