Tag Archives: EITI

PNG EITI report gives lie to mining propoganda

Ignorant politicians and the foreign mining companies who feed them love to tell us how dependent Papua New Guinea is on large-scale mining and petroleum extraction.

The 2014 EITI Report gives the lie to those claims.

EITI finds petroleum and mining contributed only 12.7% of government revenues in 2014 and a measly 2.5 – 10% of formal sector jobs.

PNG LNG employs less than 2,000 local workers, in contrast, there are 80,000 small-scale miners working in the informal sector with little or no government support!

PNGEITI Releases Findings For 2014 Report

Post Courier | June 19, 2017

THE petroleum and mining sector contributed 12.7 percent of government revenue in 2014 compared with 7.5 percent in 2013.

This is according to the PNG Extractive Industry Initiative Transparency Initiative (PNGEITI) 2014 Report, released this year

The report states this increase correlated with the commencement of the PNG LNG project.

It states the total value of mineral exports from PNG mines for 2014 was K17, 522.5 million comprising 84.18 percent of total export value.

It noted the government’s attempts through policy intervention to manage such fluctuations, as in the case of the Sovereign Wealth Fund (SWF) and promoting investment in the non-extractive sector of the economy.

In stark contrast to the total export value the industry represents, the extractive industry provides limited direct employment, with estimates running from 2.5 percent to 10 percent of PNG’s formal workforce.

“However, it directly supports a significant proportion of employment across the economy. During the construction, the PNG LNG Project provided up to 21,200 jobs (in 2012), while in operations, it employs around 2, 400 workers (as at December 2015), 75 percent of whom were PNG citizens” the report stated.

“There are also up to 80,000 small-scale miners, largely working outside the formal economy” it said.

Head of the PNGEITI Lucas Alkan said for the first time in this country, “we have published a comprehensive and detailed report covering the extractive sector, and they provide a reliable source of information for public use”.

“We are already working on the next two reports based on 2015 and 2015 financial years and these will be published in December,” he said.

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MRDC Joins PNG EITI Multi Stakeholder Group

The Mineral Resource Development Company has joined EITI – but the last Annual Return MRDC filed with the Registrar of Companies was for 2012 – and even that was done five years late! 

Shows their commitment to transparency and good governance!

What a joke EITI is!

Post Courier | June 1, 2017

Mineral Resources Development Company (MRDC) has joined the Papua New Guinea Extractives Industry Transparency Initiative (PNGEITI) multi-stakeholders group (MSG).

MRDC acts as a trustee shareholder for beneficiary landowners and provincial governments as per provisions under the Oil and Gas Act, and the Mining Act.

“MRDC joined the MSG in 2016, following recommendations in the PNG EITI Report 2013.”

“As a result of increased engagement in the EITI process, MRDC provided data for the PNG EITI Report 2014.”

“Given the importance and value of the assets they hold for the people of PNG, we congratulate them for taking this step towards greater transparency,” PNG EITI head of secretariat Lucas Alkan said.

Mr Alkan in noting the important role MRDC played in managing revenues for landowners and provincial governments in resource projects said the public should to be made aware of the processes and channels that are involved in the disbursement of benefits.

“One way MRDC can become transparent on how much it receives and manages is through its active participation in the EITI process as a reporting agent as well as a MSG member,” Mr Alkan said.

“Landowner concerns over benefits from resources are sometimes topical and as a result misunderstanding arises from these.”

“We see that the MSG is becoming robust in its discussion and activities towards coming up with best options on improving the EITI reporting process.”

“And we see that this can make way for greater transparency in the revenue management in the country,” Mr Alkan said

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Call to implement advice in EITI report

The National aka The Loggers Times | May 22, 2017

GOVERNMENT agencies responsible for the mineral and petroleum sectors have been urged to implement a Cabinet decision to implement the recommendations in the first PNG Extractive Industries Transparency Initiative Report.
The call came from the EITI secretariat following Cabinet’s directive last week that the recommendations based on the 2013 fiscal year be implemented.
The agencies include the Department of Petroleum and Energy, Mineral Resource Development Company, the three Kumul enterprises, Auditor-General, State Solicitor, Mineral Resource Authority and the departments of Finance and Treasury.
Head of Secretariat Lucas Alkan said the onus was now on the State agencies to act.
“It is important that we take action on the report recommendations now to validate the EITI candidate status early next year.
“It is only through these efforts that we will be seen as making meaningful progress to meeting global best practice in managing our resource wealth.
“And PNG can be accredited as an EITI member country by EITI International.”
The Petroleum and Energy minister is required “to immediately implement a reliable electronic registry to supersede the current paper ledger system”.
The minister responsible for the Kumul Consolidated Holdings Limited is to ensure it participates in the EITI process and regularly reports to the EITI process the State’s share/ interest in the mining and petroleum sectors it manages under the General Business Trust.
Alkan said similar directions were given to Finance Minister and Treasurer to make sure information on fiscal and finance data were conveniently available to help in the EITI reporting process.

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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.

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Huge gaps in Papua New Guinea’s 2014 EITI Report

eiti-2014

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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International research shows World Bank sponsored EITI a waste of time

eiti logo

Highlights

  • Study explores the efficacy of the Extractive Industries Transparency Initiative (EITI).
  • Analyses the performance of the first 16 countries to attain EITI Compliance Status.
  • In most metrics EITI countries do not perform better during EITI compliance than before it.
  • EITI countries do not outperform other countries.
  • EITI is not a panacea for good resource governance or sustainable development.

By Chris Armes, Queen’s Gazette

Queen’s researcher explores efforts to improve transparency in resource-rich countries.

Nathan Andrews, a Banting Post-Doctoral Fellow in the Department of Political Studies, has co-authored a paper with researchers in the UK, Germany, Belgium and Denmark, on the effectiveness of the Extractive Industries Transparency Initiative (EITI). 

Dr. Nathan Andrews (Political Studies) has co-authored a report on the effectiveness of the Extractive Industries Transparency Initiative (EITI) in improving transparency surrounding resourse extraction in countries suffering from the "resource curse."

Dr. Andrews has co-authored a report on the effectiveness of the Extractive Industries Transparency Initiative (EITI) in improving transparency surrounding resource extraction in countries suffering from the “resource curse.”

Started in 2002, the EITI was created with an aim to improve transparency and domestic government in resource rich countries, namely those suffering from the “resource curse.”

“It’s a great initiative to begin with because it brings some of these opaque practices (around) taxes and royalty payments into the public domain,” says Dr. Andrews. “We felt that it’s not just about having the initiative. We needed to test, over the long-term, how it has impacted the countries that have signed on and to what extent. The reports disclose these huge sums of money, trillions of dollars in tax and royalty payments, but does that disclosure have any impact?”

Since the 1950s, researchers have noticed, paradoxically, that countries with an abundance of natural resources, specifically non-renewable resources like minerals and fuels, tend to struggle to achieve economic growth, transparency and democratic rule. Programs such as the EITI were launched to bring transparency to the royalty payments countries receive in exchange for resource extraction, with the goal of reversing the resource curse.

Dr. Andrews and his colleagues looked at the first 16 countries that achieved EITI compliance as of 2012 to determine if meeting the requirements of disclosure correlated with improved accountability for local governments, per capita GDP growth and improved standard of living for residents.

Interestingly, the researchers found that EITI countries did not perform better under the scheme and did not perform better than other resource rich countries such as Canada that were not signatories to EITI. Dr. Andrews and his team speculate that the limited scope of the initiative, its voluntary nature and the lack of a strong, independent media in most of the nations profiled prevented the initiative from being as effective as it could have been.

“Even within the framework, one of the challenging aspects is that participation and disclosure are voluntary,” he says. “The countries that really are part of the initiatives are not better off in terms of accountability.”

The full study, titled Energy Governance, Transnational Rules and the Resource Curse: Exploring the Effectiveness of the Extractive Industries Transparency Initiative (EITI), has been published as an open source piece in the journal World Development, and is available online.

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PNG govt urged to improve resources management

Extractive industries bring upheavals to Papua New Guinea communities: earth-moving underway for the ExxonMobil-led Liquefied Natural Gas project in Hela Province. Photo: RNZI / Johnny Blades

Extractive industries bring upheavals to Papua New Guinea communities: earth-moving underway for the ExxonMobil-led Liquefied Natural Gas project in Hela Province. Photo: RNZI / Johnny Blades

Radio New Zealand, 1 April 2016

A landmark report about Papua New Guinea’s extractive industries has highlighted a pressing need for transparency by state authorities.

The Extractive Industries Transparency report, which was launched at parliament on Wednesday, contains an extensive list of recommendations on how to improve natural resource management in PNG.

Following the launch, the PNG Resource Governance Coalition has urged the government and relevant stakeholders to fully implement the recommendations.

The Coalition’s National Coordinator, Martyn Namorong, said the findings of the report were quite damning and highlighted the need for swift action.

Even though the vast majority of PNG’s population have seen little benefit from these sectors, the country’s impressive economic growth in the past decade was based mainly around mining, oil and gas projects.

However the resources boom in PNG is considered to have tailed off, with the economy now struggling due to the slump in global commodity prices.

The government is pinning its economic hopes on expansion of the liquefied natural gas sector.

But Mr Namorong said that PNG risks losing its petroleum licence registry because the records were kept in torn, hand-written, ledger books as highlighted in the report.

He said it remained unknown how much of PNG’s minerals and hydrocarbons had left its shores because relevant government entities were dependent on company-provided figures which weren’t independently verifiable.

Martyn Namorong Photo: RNZI / Johnny Blades

Martyn Namorong Photo: RNZI / Johnny Blades

The report recommended that the Mineral Resource Authority and Department of Petroleum and Energy conduct independent audits of production data.

Mr Namorong said that if Papua New Guineans were to maximize the benefits of resource extraction, they needed access to reliable information including access to various contractual agreements.

He called on the government and industry to disclose to the public, various agreements that determined benefit flows from natural resource extraction and related land use.

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