Tag Archives: EITI

Weak capacity and lack of accountability leaves mining sector ‘open for corruption’

Policy implementation in sector a challenge: Report

Loop PNG | 4 July, 2017

Implementing legislations and policies in the mining and petroleum sector is a challenge due to weak capacity and lack of accountability, points out a report.

The PNG Extractive Industries Transparency Initiative Report 2014 says:

“While the Government sets strong policy and has a relatively robust legislative regime and fiscal control, implementation is challenging due to weak capacity and a lack of accountability, particularly at local levels. The associated lack of transparency also leaves the way open for corruption.

“The principal laws that regulate mining activities in PNG are the Mining Act 1992 (MA), which sets out how mining projects should be administered and regulated, and the Mining (Safety) Act 1977, which stipulates safety requirements on mine sites, provides for investigations and inquiries into mine accidents and establishes a regime for certification of prescribed mining roles” the report said.  

The report noted that a revised MA will be presented to Parliament after 2017 election.

“It is anticipated this will include regulations for offshore mining, mine closure and rehabilitation, resettlement and geothermal resources and standards for employing mine workers. The Mining (Safety) Act is also under review,” it said.  

Matters relating to the environment within mining and exploration tenements is governed by the Environment Act 2000. The operation and development of mineral deposits in relation to the Ok Tedi mine is governed by the Mining (Ok Tedi Agreement) Act 1976 and the fourteen supplemental agreement Acts.

The Panguna mine on Bougainville is governed by the Mining (Bougainville Copper Agreement) Act 1967, although mining legislation for the Autonomous Region of Bougainville has now been passed.

“The relationship between those respective pieces of legislation is unclear as the former has not been repealed, nor have the references to it in the MA been amended,” it said.

The reports stated, the petroleum industry is governed by the Oil and Gas Act 1998 (OGA) and the Oil and Gas Regulation 2002 under the administration and management of the Department of Petroleum and Energy (DPE), headed by the Minister for Petroleum and Energy.

“The OGA specifies regulatory instruments for oil and gas development activities such as: Licensing, exploration, development, processing, storage, transportation, and sale of products.”

PNG EITI Head of National Secretariat, Lucas Alkan, said: “It is only fitting to have such a robust legislative and policy framework for a resource rich country like ours.

“The PNGEITI has already capitalised on such fiscal and legislative setting, in advancing transparency and accountability in the sector, through its annual reports and we hope to build on that progress.

“We are also of the view that there are upcoming legislations and policies to keep Papua New Guinea in par with world best mining and petroleum practices,” Alkan added.

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EITI to tackle mining industry links to money laundering, transfer pricing, corruption and tax evasion

Mining Companies Will Have Be Transparent About Owners

EITI: “The lack of transparency in this area often creates an environment for other illegal activities such as money laundering and transfer pricing. This affects other sectors of the economy and often create a conducive environment for corruption and tax evasion” 

Post Courier | July 4, 2017

Companies directly involved in the petroleum and mining sectors will be required to disclose information regarding their beneficial owners come 2020.

Beneficial owner(s) of resource projects (mine, oil and gas companies) refers to the natural person(s) who directly or indirectly owns or controls a corporate entity/ company.

This follows after a signing of contract between PNG Extractive Industries Transparency Initiative (PNGEITI) National Secretariat and KPMG yesterday.

KPMG is the successful bidder for the implementation of the Beneficial Ownership Roadmap that spells out how Papua New Guinea can develop a matrix to report beneficial owners.

The implementation of the roadmap was effected yesterday and will be rolled out until the final quarter of 2019. During this time a platform or matrix will have been developed for reporting -through the EITI reporting process in 2020.

Head of the PNG Extractive Industry Transparency Initiative National Secretariat Mr Lucas Alkan said it was the decision of EITI international board.

It wants all EITI implementing countries, including Papua New Guinea, to ensure that corporate entities that bid for, operate or invest in extractive assets disclose the identities of their beneficial owners by January 1, 2020.

Mr Alkan said this was done to identify the real owners of the companies who had acquired rights to extract oil, gas and minerals which, in many cases were not known and often hidden behind a chain of corporate entities.

“The lack of transparency in this area often creates an environment for other illegal activities such as money laundering and transfer pricing. This affects other sectors of the economy and often create a conducive environment for corruption and tax evasion,” Mr Alkan said.

He said people living in resource-rich countries such as Papua New Guinea risked losing out as revenues generated from resources exploitation in the extractive industry were often misallocated and wasted.

“The EITI requirement will ensure that beneficial ownership information is made available through public registers such as those collected and stored at the Investment Promotion Authority through company registration process,” Mr Alkan said.

Mr Alkan expressed confidence working with KPMG to successfully implement the roadmap.

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Weak Capacity And Lack Of Accountability A Challenge In Mining Sector

Weak Capacity And Lack Of Accountability Remains A Challenge In Implementing Legislation And Policies In The Mining And Petroleum Sector.

Post Courier | June 28, 2017

Weak capacity and lack of accountability remains a challenge in implementing legislation and policies in the mining and petroleum sector.
This is according to the PNG Extractive Industries Transparency Initiative Report 2014.
The report states that lack of transparency also leaves the way open for corruption.
It also noted that a revised Mining Act will be presented to Parliament after 2017 elections.
This will include regulations for offshore mining, mine closure and rehabilitation, resettlement and geothermal resources and standards for employing mine workers.
The Mining (Safety) Act is also under review.
The report also highlighted that the relationship between three different legislation including the Environment Act 2000, Mining (Ok Tedi Agreement) Act 1976 and (Bougainville Copper Agreement) Act 1967, is unclear as the former has not been repealed, nor have the references to it in the mining Act been amended.
It said, the petroleum industry is governed by the Oil and Gas Act 1998, (OGA) and the Oil and Gas Regulation 2002 under the administration and management of the Department of Petroleum and Energy (DPE), headed by the minister for Petroleum and Energy.
“The OGA specifies regulatory instruments for oil and gas development activities such as: licensing, exploration, development, processing, storage, transportation, and sale of products,” the report said.
PNG EITI head of National Secretariat Lucas Alkan said: “It is only fitting to have such a robust legislative and policy framework for a resource rich country like ours.”
“The PNGEITI has already capitalised on such fiscal and legislative setting”.

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Over 80pc mining activities cover PNG

Loop PNG | June 25, 2017

Mining exploration activities in Papua New Guinea cover over 80 percent of the country, according to the PNG Extractive Industries Transparency Initiative Report 2013.

This is expected to further enhance and strengthen Papua New Guinea’s position as one of the top twenty gold and copper producing countries in the world.

“The country is rich in minerals. It ranks in the top 20 world gold and copper producers and also produces silver, nickel and cobalt,” the report said.

“Mining in PNG dates back to 1888, with the modern mining industry developing in the mid-1960s.

“During the reporting period, eight mines were operating in Papua New Guinea, distributed over a number of provinces,”

These include Ok Tedi, Porgera, Lihir, Hidden Valley, Ramu Nickel and Cobalt, Tolokuma, Simberi and Sinivit.

This figure has been increased to nine with the inclusion of Eddie Creek in the 2014 Report.

“New Projects in development include the deep-sea Solwara 1 (owned by Nautilus Minerals), Frieda (PanAust) and Wafi-Golpu (Harmony/Newcrest). Exploration activity is intensive covering over 80 percent of the country,” the report said.

It said mining companies active in PNG include international companies and a number of junior companies together with many small scale miners.

“Some 60 to 80 thousand people are estimated to be engaged in informal alluvial/small scale mining,” the report said.

Head of PNG EITI National Secretariat, Lucas Alkan, said promising times are ahead for the country in terms of the enormous benefit that the mining industry would bring to the economy.

“At PNGEITI, we are excited that we are already playing our part in promoting accountability and transparency in the way the government, companies and landowners manage proceeds from these projects – through the annual EITI reporting process,” Alkan said.

“We hope to see more cooperation from all sectors of the economy so that we can produce comprehensive and timely information as we move forward in this journey.

“Through our reporting process, we will try to get to the bottom of the payment mechanics so that correct information on what the government is receiving, the landowners are receiving and other related information, like mining licences, are accessible to the public for transparency and accountability’s sake.” 

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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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