Tag Archives: EITI

PNGEITI Welcomes Decision On Tax Credit Scheme

Post Courier | February 1, 2018

The Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI) has welcomed the government’s decision to put on hold Tax Credit Scheme (TCS).
Prime Minster Peter O’Neill told business leaders some companies failed to execute TCS properly.
Mr O’Neill said the government decided to put a stop to it, because there is a transparency issue with the process.
Head of PNGEITI National Secretariat Lucas Alkan when concurring with the idea that the TCS is a best public private partnership (PPP), said the opaque nature of the scheme had to be addressed by reviewing the processes involved in awarding tax credit to companies.
Mr Alkan said successive EITI reports have found discrepancies in the reporting of the tax value foregone and it was timely that the government looks into it to take remedial actions.
“We welcome the decision of the Government to put on hold TCS projects as EITI reports affirm the observation that there is lack of transparency and accountability in this scheme.
“The process needs to be more transparent -particularly the guidelines and the criteria involved in the approval process.
The ITC expenditure should be included in the annual national budget books and the Department of National Planning and Monitoring (DNPM), should be able to show this information,” he said.
Mr Alkan said the PNGEITI Report for 2016 fiscal year published recently included the ITC as one of the recommendations for the government to increase transparency and accountability regarding the approval process by DNPM, expended on projects by companies and resulting tax payments offset by the IRC. “We trust the national government will address the opaque nature of this scheme so that original intent of TCS is maintained. “We applaud the Prime Minister for the insight and look forward to a review of the TCS,” he said.


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Report reveals failure to provide K72.9mil oil and gas receipts

The National aka The Loggers Times | January 3, 2018

Bank of PNG has failed to produce receipts for oil and gas development levy and royalty payments totalling K72.9 million, according to a report.
Those receipts were for payments made by ExxonMobil PNG Limited to the government in 2016, said a 2017 report produced by the PNG Extractive Industries Transparency Initiative (PNGEITI). The payments were K62.2 million for development levy and K10.7 million for royalty payments.
At the time the report was published, Bank of PNG had not provided the independent administrator of the report with confirmation of the receipt. The report includes payments done by Oil Search Ltd and ExxonMobil PNG LNG.
Oil Search pays development levy and royalties to the Department of Petroleum and Energy (DPE) by cheque while ExxonMobil pays the levy and royalties to Bank of PNG via electronic transfer and sends remittances advices to DPE, said the report.
ExxonMobil PNG said they have been directed by the Government to this payment method.
The DPE only provided receipts for Oil Search payments of K7.4 million in development levy and K26.3 million in royalty. These payments have been 95 per cent reconciled.
The 2016 report by the PNG EITI is the fourth under the department of Treasury. It was endorsed by Treasurer Charles Abel.
“The 2016 financial year report is the culmination of continued commitment, collaboration and efforts by the Government, extractive industries and civil society organisations to provide a comprehensive picture of the sector, its impact on the economy and our management of the revenues and benefits derived,” Abel said.
EITI is a global standard for the good governance of oil, gas and mineral resources. It seeks to address the key governance issues in the extractive sectors.
PNG became a candidate of the EITI in 2014 and is looking to deal with transparency issues to improve it image for foreign investment.

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EITI releases 2016 Report

Cedric Patjole | Loop PNG | December 23, 2017

The PNG Extractive Industry Transparency Initiative (EITI) has released its 2016 Report.

This is the fourth report by the entity since joining the global EITI standards movement.

In his forward in the report, Treasurer Charles Abel said the 2016 Financial Year Report is the culmination of continued commitment, collaboration and efforts by the Government, extractive industries and civil society organisations to provide a comprehensive picture of the sector, its impact on the economy and our management of the revenues and benefits derived.

He said the 2016 Report is important in that it will form the basis of an external review and assessment for PNG’s EITI membership validation in 2018.

“The EITI process can also help improve current policy settings, the taxation and fiscal regime governing the extractives sector,” he stated.

“It demands Government to adhere to global best practices in the sector by increasing transparency and accountability of extractive revenues. It also demands the highest levels of transparency in the collection and distribution of revenues by the Government.

“I encourage the public to read the contents of the report and use it as a basis for stimulating further discussions on the management of the sector,” said Abel.

“Though PNG remains one of the most challenging countries to invest in geographically, it is amongst the most geologically attractive countries in the world.

“While global commodity prices have remained subdued in the last couple of years, developers of a number of proposed projects in PNG have remained committed and proceeded with several major mines set to come on stream in the near future.

“With promising signs of global commodity prices recovering, both developers, Government and our people stand to gain from the operation of these projects.

“The Government values the EITI process because it is playing a critical role in providing such reports to the public for them to better understand how we are managing the revenues and other benefits derived from the sector.”

Abel reassures investors that PNG is committed to transparency and accountability to achieve better outcomes for our development aspirations.

The PNG EITI aims to promote revenue transparency and accountability in the country’s mining and petroleum sectors.

This report covers the calendar year from 1 January 2016 to 31 December 2016.


Filed under Financial returns, Papua New Guinea

Income Tax Secrecy for Mining Companies Revoked

Post Courier | December 7, 2017

A landmark amendment in the 2018 National Budget has now facilitated the repealing of the secrecy provisions within the Income Tax Act of 1959.
As a result of the amendment, the Internal Revenue Commission (IRC) will be authorised to disclose mining company tax information to the PNG Extractive Industries Transparency Initiative (PNGEITI) upon request, for reporting purposes.
The amendment has been well received by the PNGEITI, who previously were required by law to seek the approval of extractive companies through waiver letters, before any tax information could be released by the IRC.
Head of the EITI National Secretariat, Lucas Alkan commended the Government for acting on amendment.
He said this was the second time the government had accommodated submissions presented to them by the EITI to streamline their reporting process.
“I am happy to say the way in which the government is working with us to arrest capacity issues for EITI implementation in PNG is encouraging.
EITI implementation is gaining footholds and we are optimistic that the intent of EITI is materialising for the good of the extractive sector in the economy” Mr Alkan said.
“Our core mandate of promoting accountability and transparency in the management of petroleum and mineral resources, by producing a yearly report on the transactions in the mining and petroleum sector.”
He said this serves as a useful tool that identifies setbacks and inconsistencies that impinge on the better translation of mineral and petroleum wealth to the larger segment of the economy.
Mr Alkan said the positive response has demonstrated an active interest by the government in promoting the transparency of the extractive industry, as one of the most dynamic contributors in the economy.
“PNGEITI’s commitment and resolve to help the Government address resource governance issues to build a strong economy remains critical and such support from the government strengthens our position in advancing our process.”

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Proposed policy to declare mining revenue

Cedric Patjole | PNG Loop | October 9, 2017

The Department of Mineral Policy and Geohazards Management (DMPGH) says it is working to introduce a policy for stakeholders in the mining industry to declare any revenue received or made from mining projects.

Secretary Harry Kore told Loop PNG that the policy idea came about during consultations for the Revised Mining Act.

He said while there are reports of mining revenue generated, a lot of locals impacted by mining activities claim to not see any tangible results.

Kore said the policy will ensure stakeholders such as provincial governments, authorities such as the Mineral Resources Authority (MRA), Mineral Resources Development Cooperation (MRDC), as well as landowner association chairmen and landowner company CEOs declare revenue received for the bene t of all.

“You fail to do that and you will be held accountable and you will be penalised under the law. So it becomes a practise. Every quarter they just declare their interest. We know that so much money goes to our landowners but whether it trickles down to the peoples is another thing,” said Kore.

The policy idea is similar to a draft legislation currently being drawn up by the PNG Extractive Industry Transparency Initiative to make mandatory all revenue from the mineral, petroleum and gas sectors to be fully disclosed as per good governance standards.

Kore said they are yet to have formal discussions regarding the policy idea however, there is cooperation and the policy complements that of the work the EITI is undertaking.

Secretary Kore added that one of the agendas of the policy is to ensure there is sustainability in how revenue is invested back in the country.

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PNGEITI: Reveal contracts, licences for transparency

Cedric Patjole | PNG Loop | August 29, 2017

The PNG Extractive Industries Transparency Initiative (EITI) says access to resource extraction contracts and licences would be valuable to the country for transparency in the industry.

According to the PNGEITI 2014 Report, resource extraction contracts and licences remain confidential information despite interest groups seeking to change for greater transparency.

The report states that details of contracts and licences are protected by confidentiality provisions in Section 163 of the Mining Act, Section 51 of the Mineral Resource Authority (MRA) Act and Section 159 of the Oil and Gas Act, which are held and maintained by the Solicitor General’s Office.

And without legislative amendments, agreements can only be made public with the approval of both the company and the Department of Petroleum and Energy (DPE) or the MRA as appropriate.

The report states that no contract had been made publicly available to date. This is an issue which civil society organisations in particular seek to change in the interest of greater transparency.

“Specific clauses clarifying public access to the content of agreements signed by or with the State on resource projects would be valuable. Part 1 of the Mining Act however, provides for Constitutional limitations as the mining legislation is for the purpose of giving effect to the national interest,” states the report.

PNG EITI Head of National Secretariat, Lucas Alkan, said the Multi Stakeholder Group (MSG) discussed issues relating to disclosure of resource agreements in recent meetings.

“We feel that mining companies may feel comfortable disclosing agreements, but that oil and gas companies, being more exposed to global market dynamics, may feel that agreement details would reveal their strategy, and would thus be more commercially sensitive,”Alkan said.

“But we are having constructive dialogues with companies on the information that could be disclosed and what may not be disclosed to the public due to commercial bearings to the detriment of a particular company.

“We hope to imbed such information in future EITI reporting as it is required under the EITI standard,” Alkan added.

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People’s rights extensively violated in EITI countries

CIVICUS |11 August, 2017

People’s rights to organise, speak out and take action are being extensively violated in a large number of member countries of the Extractive Industries Transparency Initiative (EITI). The CIVICUS Monitor, a new online tool to track and compare civic freedoms on a global scale, shows that the space for civil society – civic space – is currently seriously restricted in 38 of 51 EITI countries, as of May 2017. 

Civil society organisations (CS0s) and human rights defenders in most EITI member countries face serious obstacles, including threats to their personal safety, denial of the right to protest, surveillance and censorship, as a direct result of their nonviolent activism. The fact that civil society’s fundamental rights are seriously violated in so many EITI countries is alarming, given that the EITI seeks to promote “accountability by government to all citizens” and explicitly recognises the “important and relevant contributions” of non-governmental organisations.  The level of restrictions revealed by this report presents a direct challenge to the viability of the EITI and raises serious questions about member states that are routinely failing to protect CSOs and in many cases treating them as adversaries.

The EITI should recognise the threat the violations documented in this report offer to its credibility and viability as an international multi-stakeholder initiative. It should respond by taking increased steps to ensure that the protection of CSOs and activists becomes a priority in all its member countries.

CIVICUS recommends that EITI:

  • Enhances its requirements for multi-stakeholder engagement in a way that contributes to the creation of a more robust civic space. In doing so, EITI should ensure that CSOs enjoy the “full, free, active and effective engagement” they are meant to have within country-level multi-stakeholder groups;
  • Ensures that all member governments engage fully and meaningfully with CSOs and implement the recommendations made in the review of multi-stakeholder groups carried out by MSI Integrity in 2015;
  • Applies existing requirements more strictly and consistently to make sure that conditions for meaningful civil society participation are met in member countries;
  • Promotes an early validation process against the EITI Standard – the requirements that apply to all EITI member countries – for all those countries in which civic space is seriously restricted;
  • Prescribes corrective actions to governments of countries where there are serious civic space restrictions and closely monitors their progress in implementing recommendations; and
  • Credibly applies or threatens to apply sanctions, including suspension, towards countries failing to make discernible progress in upholding fundamental civil society rights

Read the report: CIVICUS Monitor Findings EITI Countries

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