Tag Archives: Mining Act

Call to review the unjust, primitive and self-harming laws of Papua New Guinea

Resource Owners Federation of PNG | 22 May, 2018

The PNG Chamber of Mining and Petroleum made statements last week claiming that the PNG mining laws are uncompetitive, in view of the government’s recent amendment to the Mineral Resources Authority (MRA) Act of 2005 and the proposed amendment to the Mining Act 1992. Their statements are untrue and are designed to scare off the National Parliament from amending the laws so that the mining companies can continue to reap all the benefits of mining in the country, whilst keeping the landowners and citizens who own the resources poor, as they have been successfully doing for decades.  The Resource Owners Federation of Papua New Guinea believes that, although the Mining Act 1992, needs to be reviewed, it should not be reviewed for the benefit of the mining and petroleum companies, but for the benefit of the country and its citizens.

The United Nation’s High Commissioner of Human Rights, during his visit to Papua New Guinea, in early February 2018, observed among others that; “Papua New Guinea was a resource-rich country but much of its population lives in abject poverty, with acute malnutrition rates in some areas comparable to Yemen, and minimal access to quality healthcare and education”.

The UN High Commissioner’s observations are an accurate assessment of Papua New Guinea, being a country that was “so rich, but yet so poor”.  Such assessment, is yet another official condemnation of the country’s state of affairs, in relation to the social and economic conditions of the country and its people. A significant reason for such condemnation is that, our natural resources have been managed in a way that all the benefits of the mining and petroleum projects are transferred to foreign shareholders, with nothing or very little being left for the country and its citizens. Such an official negative assessment from the United Nations must therefore, result in significant corrective actions to be taken by the State and its representatives, by way of reviewing the country’s inappropriate laws and policies.

The High Commissioner further went on to observe that; “it has strong civil society activists but there is little room for them to influence Government Policy“. The Federation and citizens have been calling on the National leaders of the country and the government over many years to review the Mining Act of 1992, on the basis that the country and its landowner citizens were not receiving a fair share of the profits from the mining and petroleum projects. The Mining Act 1992, proclaims the State’s ownership of all minerals found in any land, including and especially customary land, which land are owned by the traditional landowners throughout the country. The Federation is of the view that the State’s compulsory acquisition of minerals held under any traditional or customary lands without paying just compensation, as required by section 53 of the Constitution of Papua New Guinea, is unlawful. It is also in breach of the Article 17, of the Universal Declaration of Human Rights, which states that; “everyone has the right to own property alone or in association with others and no one shall be arbitrarily deprived of his property.”

The Mining Act 1992, as it stands and for the above reasons, is a primitive, unjust and self-harming law, which must be reviewed in its entirety, so that ownership of minerals is retained by the customary landowners. Minerals can still be mined only after development agreements are reached between the landowners and mining companies. Such arrangements have and are already in force, in many states of the United States of America. Under such an arrangement, the State stands to collect taxes from both the landowners and the mining companies. All parties then benefit from a project, in contrast to Papua New Guinea in the past and today, where the landowners are the ultimate losers.

The recent amendment of the MRA Act 2005, was justified in that, the mining industry members were regulating themselves from 2005 to 2018, after having gained a significant number of seats on the Board of the Authority.  The MRA was therefore seen as an organization that was run by the mining industry for its own benefit and against the interest of the country and its citizens. The Chamber of Mining and Petroleum now calls the amendment uncompetitive, because of their exclusion from the Board that they controlled for many years to their benefit but to the detriment of the landowners, the country and its citizens. The Federation challenges the Chamber of Mining and Petroleum to identify any government in the western world that would allow the mining industry to take over the enforcement of its mining laws against itself. We would think that such a practice, if allowed, would be deemed to be corrupt and therefore unlawful.

The UN High Commissioner further went on to say that; “the government urgently needs to build a stronger nexus with its people, so it can better serve their needs in this vast and diverse land.”  He saidthat it was unacceptable that many businesses had been granted licenses to engage in the extractive industries without the free, prior and informed consent of the people living on the affected lands…

 The Federation believes that the amendments to the Mining Act 1992, the MRA Act 2005 and the Petroleum Act 1998 are three laws which must be amended so that those citizens who are owners of the land under which any mineral or petroleum are found, are recognized by law, as the owners of those resources. This then will be the beginning of a new era, where the State will be building a stronger nexus with its people going forward.

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PNG can overide Bougainville laws – PM

Panguna mine. Photo: Wellington Chocolate Factory

Radio New Zealand | 26 April 2018

Decisions by the Bougainville parliament can be overidden by the national parliament, the Papua New Guinea prime minister says.

Peter O’Neill made the comment to news agency Reuters after the Autonomous Bougainville Government (ABG) announced earlier this month that it was placing an indefinite moratorium on a resumption of mining at Panguna.

Its president, John Momis, said the ABG imposed the ban as it did not want to disrupt preparations for Bougainville’s independence referendum next year.

Grievances caused by the mine were central to the outbreak of civil war in 1989, a 10-year conflict that cost over 20,000 lives.

When asked about the moratorium, Mr O’Neill said that the “constitution and the overall legislation from the national government is the one that underpins all the other legislation”.

“It’s subject to the main laws,” he said.

The vast Panguna copper and gold mine once generated nearly half of PNG’s annual export revenue.

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Chamber concerned with passing of MRA bill

ENN | 27 February 2018

The Chamber President, Gerea Aopi, said today the MRA has been a success story for Papua New Guinea and the Government.

“The Chamber and the mining industry believe that the performance of MRA over the last decade is a credit to Government, and the excellent operating standards within the mining sector are an indicator of the good work of the regulator. It would be a tragedy for all mining industry stakeholders if this progress is lost,” Aopi said in a statement. 

“MRA has managed the regulatory environment for mining, as an arm of government, in a firm, fair and responsible manner. It has earned the respect and support of industry and other stakeholders, including landowners, and contributed to rising professional standards throughout the mining sector.”

Aopi said mineral exploration and production companies have three major concerns about the legislative changes:

  1. Removal of direct industry representation on the MRA Board
  2. The doubling of the production levy rate from 0.25 percent to 0.5 percent and
  3. The allocation and remittance of 35 percent of the annual production levies directly to the Department of Mineral Policy & Geohazards Management.

Aopi said the initial impetus for the establishment of MRA was provided by the European Union, which decided after the severe 1997 drought that the strengthening of the regulatory regime for mining would contribute significantly to diversification of the PNG economy and help mitigate unexpected emergencies such as drought.

An initial 50 million Euro grant (about K200 million) under a mining sector support program in 2002 led to the implementation of a range of projects and detailed discussions and planning between all stakeholders. This laid the groundwork for the establishment of MRA, which began operations in 2006.

The MRA was also created so that it can be adequately funded, and effectively regulate an industry that was very critical to the PNG economy. 

“Successive PNG Governments have benefitted from the independent role played by MRA in regulating the minerals sector, including the operational and safety aspects of PNG’s mines which have enable PNG mining operations to be benchmarked against global standards,” stated Aopi.

“By not allowing industry representation on the MRA Board, the Government has effectively negated the intent of the original legislation of ensuring effective and efficient administration and regulation of the mining sector through a meaningful involvement of industry and private sector at the Board level.”

Aopi said the doubling of the production levy was a de facto increase in tax and an additional burden on existing and future mining projects, even though the current levy has proved to be adequate for the funding of MRA operations.

“The new Act will see 35 percent of the increased levy diverted directly for the use of the Department of Mineral Policy and Geohazards Management. These funds can also be used for State obligations under Project Agreements entered into by the State and for ‘development initiatives’ within project areas approved by the MRA Board.

“The industry is gravely concerned the diversion of funding to outside activities may lead to a deterioration of MRA’s capacity.

“This is wrong and a major shift in Government policy, under which an industry tax levy can be used to directly fund another Department outside the budgetary process and to underwrite social obligations of the State managed by MRA as well as the Department of Mineral Policy and Geohazards Management.”

Aopi said for many years, successive Governments have reaffirmed their confidence in the MRA “model”.

“Why are we making these changes now to weaken a very important Government body that has performed exceptionally well? The benefit of having an effective regulator over many years can clearly be seen in the professional way issues are managed in the mining sector.

“Indeed, it is a working model that is being discussed by Government and industry to be applied to the oil and gas sector to help manage the issues impacting their operations,” he said.

The Chamber is also very concerned about the Government’s delay in expediting an independent process to review amendments to the Mining Act as agreed to between Government and the industry.

This was an important undertaking it made in 2017 to ensure changes to the legislation were fair and represented the interest of all stakeholders, including the Government.

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Mining Policies Need To Be Reviewed: Minister

Minister For Mining Johnson Tuke Says The Policies Governing The Mining Sector In Papua New Guinea Need To Be Revisited.

Matthew Vari | Post Courier | February 22, 2018

Minister for Mining Johnson Tuke says the policies governing the mining sector in Papua New Guinea need to be revisited.

He said much of the legislations governing the sector are still from the colonial era.

Mr Tuke said with the strong support from Prime Minister O’Neill and government caucus he is determined to take stock of benefits to landowners that make changes for the country to have a greater share in its own wealth.

“I think all our mining policies are more or less colonial. Are we still in the colonial times? We are moving forward,” Mr Tuke said.

“Leaders like Sir Julius Chan have all learnt their mistakes, and are telling me to move forward. The decisions conducted then were suitable for that time. This time has different underpinning. We have take heed of it and move ahead.”

Mr Tuke said he plans for all new mines to provide community obligation concessions.

“We have been for far too long reaped. This is high time; there will never be another time. It needs courage and determination. This government is determined.”

Mr Tuke commended Prime Minister Peter O’Neill for his leadership in ensuring changes do take place for the country’s mining sector.

“There has never been a time any consecutive government has thought so much of its people. I have started off with MRA and I will pursue with mining policy and acts.”

“I am adamant and I will fight vigorously until I pass the mining policy (review). I think 40 years is enough and we are overqualified to develop new policies.”

“I have got to do one or two things, I have to make abnormal decisions that will stimulate many others but affect a few.”

He said with the mining industry a huge contributor to the national purse much of its activities have been done behind the curtain. Something Tuke says he wants to change.

“I want everybody to know the system, the guidelines, the policy and the process, because once it (minerals) is gone, it is gone. You can’t renew that so our people have to know what they (developers) are doing.”

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Bougainville clans regain power over mining rights

Bougainville Finance Minister Robin Wilson

The National aka The Loggers Times | January 12, 2018

Bougainville landowners own all the resources on their land and the Bougainville government only facilitates resource development, says Bougainville Finance Minister Robin Wilson, pictured.

“Unlike the rest of Papua New Guinea, landowners in Bougainville have the power to allow or disallow exploration and extraction of minerals on their land,” he said.

Wilson was speaking when handing the province’s 2018 Budget of K254 million to national Treasurer Charles Able in Port Moresby yesterday.

Wilson said Bougainville has lifted the ban on mining in Panguna, Mt Tore and Isinai and mining activities in those areas are now being driven by the landowners.

“We introduced a law that is unique to the rest of the country where in terms of mining we have made the landowners the owners of resources,” he said.

“If there are resources in an area the landowner will give consent on, whether or not exploration will take place and if exploration has found minerals, the landowner will again give consent to whether it will be extracted or not.”

In regard to the PNG Mining Act, Able said the Act states that any resources below six feet (about 2m) under the earth belongs to the government, but the ABG has done away with that provision – only for Bougainville.

Abel said the PNG government’s ownership of mining resources was to ensure that profits were equally distributed throughout the country.

Meanwhile, to continue to strengthen relations between Bougainville and the Papua New Guinea government, Wilson is providing quarterly reports to the government on how money it provides is spent on Bougainville.

“The accountability of the grants will not be an issue anymore. I have provided those reports throughout last year and am committed to do it in this term,” he said.

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Mining Laws In Need Of Review

Jeffrey Elapa | Post Courier | November 27, 2017

The Resource Owners Federation of PNG Inc is against development of new mines in the country without amendments to the existing laws governing the industry.

President Jonathan Paraia said while the Federation acknowledges the government’s desire to open new mines as expressed by the Mining Minister Johnson Tuke a review of the mining laws must be undertaken first.

“The customary landowners of Papua New Guinea by all means will oppose the development of any new mining projects without amending the Mining Act 1992 and the Mineral Resource Authority Act of 2005.

“The reasons are that the Mining Act 1992 must be amended to be compliant with the Constitution and the customary laws of Papua New Guinea, which both vest the ownership of all lands and minerals contained therein by those who own the lands.

“The amended Mining Act must therefore ensure that the landowners receive a fair share of the profits from any mining project.

“In the past, the mining companies have deceived the landowners and the national government into believing that their entitlements from the mining projects, such as contracts, compensation payments, royalties, taxes, levies and so on, were benefits, when in fact, an entitlement as in the English language is not a benefit. The dictionary of English, states that a benefit is a profit. Entitlements are therefore not benefits as we have been led to believe for so long by the mining companies,” he said.

Mr Paraia said the Federation also continues to support many calls for the removal of the representatives of the PNG Chamber of Mining & Petroleum and the PNG Business Council from the board of the Minerals Resources Authority (MRA), because of their inherent conflict of interest.

“MRA is the regulator of PNG’s mining laws and regulations and the Chamber of Mining & Petroleum and the PNG Business Council are representative bodies of the mining industry, the subject of the mining laws administered by the MRA. It is therefore inappropriate for those that are being regulated to be on the board of the regulator,” he said.

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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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