Tag Archives: MRDC

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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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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Western Province people given 33% mining shares

ok-tedi-pit

The National Government has fulfilled its commitment gifting the people of Western Province shares in Ok Tedi Mine

Sounds great, but will the people actually see any improvement in their lives?

Charles Yapumi | LOOP PNG | January 23, 2017

The historic benefit sharing agreement (BSA) signing happened in Alotau on the weekend between the six mine area villages and the 152 villages from the Community Mine Continuation Agreement (CMCA) regions will share the 33 per cent direct equity interest in OTML. 

The National Executive Council’s (NEC) decision relating to the granting of the free equity was made in 2014.

The benefit sharing Memorandum of Agreement (MoA) took over two years of negotiation amongst landowners, the Fly River Provincial Government and the State.

The breakup of the shares will see CMCA group owning 12 per cent, the Mine Area Villages 9 per cent while the Fly River Provincial Government (FRPG) will own 12 per cent.

 “Now you’ve got one third direct participation. It is for the first time in the history of this country and it’s a big decision the Government has made for landowners to have direct participation in OTML,” Chief Secretary to the Government, Isaac Lupari said.

According to the MoA signed, 40 per cent of the benefits from the respective shares will be paid in cash to landowners while the other 40 per cent will go towards investment purposes and 20 per cent will go towards infrastructure development programs and projects.

MRDC’s Managing Director Augustine Mano said it was not an easy part but to manage the interests is a huge responsibility on MRDC.

“Thank you for the confidence given to us to manage your interest. We will do our best. We will not let you down,” Mano said.

The Fly River Provincial Government is yet to sign the MoA and will do so at a later date. Once all parties have signed, the agreements will be submitted to NEC for approval for the transfer of the shares in OTML.

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MRDC: Fiji outlay big

The National aka The Loggers Times

The Mineral Resources Development Company (MRDC) has invested a huge sum in a property development project in Fiji in anticipation of a big return, chief executive and managing director Augustine Mano said. He said the recent investment was big and would increase returns.

Mano said MRDC and two of its subsidiaries were joint investors in the property in Fiji with them having a third of the joint venture.

“MRDC is one third, and then you have MROK (Mineral Resources Ok Tedi) and PRK (Petroleum Resources Kutubu).

“These three partners made the decision after looking at the investment proposal and thought it is a very good investment.

“We were convinced that it will increase the returns,” Mano said.

Fiji Sun recently reported that the big boost to Pacific Harbour as a tourism hub was continuing through major investment by PNG’s MRDC early last month.

It came with the opening of the Pacific Bar and Grill at the clubhouse as part of the The Pearl Championship Golf Course’s upgrade.

As new owners of The Pearl South Pacific Resort, Spa and Championship Golf Course, MRDC was investing US$99 million (K240 million) in the property.

Come 2015, the investment would complete three phases of construction-building for the property.

These are the marina, which is expected to open next month and the building of the new wing and renovation of the old wing of the resort.

Mano said: “We did it because of our diversification.

“It’s like you have the Lamana group and Nasfund, who are doing their own investment in Fiji … ours is similar.

“For us it’s part of diversification and also in terms of our influence in the Pacific.

“The returns at the end of the day is the economic decision,” Mano said.

Mano said: “In Fiji it has to do with tourism. Tourism is like their heart … just like PNG’s mining and petroleum”.

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Clan asks for new office to monitor quantity of minerals

The National aka The Loggers Times

A CLAN in Madang wants an independent office set up to monitor the amount of nickel and cobalt extracted by Ramu Nico.

The Chinese Metallurgical Company (MCC), developers of the mine, indicated during the signing ceremony last week that they were in phase three of their environmental monitoring with tests being sent to Australia for confirmation.

This is to do with the level of pollution caused by toxic waste  dumped into the ocean via the deep sea tailings placement and toxicity-level monitoring.

Maure clan spokesman Chris Aizue said an office should be set up to monitor the quantity of minerals being dug up and exported, the exact tonnage, shipment schedules and importantly, world market prices and sales of the mineral.

Aizue said the office should be made up of officials from the Mineral Resources Authority and Mineral Resources Development Corporation.

He said the mining operation was “secretive” and no resource owner knew exactly what was being extracted at Kurumbukari and how much chromite was being taken to Lae.

Aizue said the funding of that monitoring office should come from the Ramu Nico resource owners fund through MRDC and MRA.

He said resource owners in the country reserved the right to know what and how much mineral was mined.

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MRDC investigates Mineral Resources Star Mountains

Tony Stone | PNG Echo

Mineral Resources Development Company (MRDC) has begun investigations into allegations of corruption by the management of its subsidiary Mineral Resources Star Mountains (MRSM).

MRDC’s action was in response to a PNG Echo story exposing alleged financial mismanagement of MRSM companies which include Fubilan Catering Service (FCS), the Tabubil caterer that provides meals for the now 100% state-owned Ok Tedi Mining Limited.

MRDC Managing Director, Augustine Mano, replied to PNG Echo’s allegations in an email, this week:

We have taken the allegations (raised by PNG Echo) seriously and are taking appropriate action to address the issues. We have engaged KPMG to audit FCS accounts and (are) also doing our own investigations..

CEO Mano added that the task would be a challenge for MRDC who could only act within its jurisdiction.

Audits

Paul Povey , Chairman of MRSM Group of Companies

Paul Povey , Chairman of MRSM Group of Companies

Mr Mano’s assurances notwithstanding, it is the information of PNG Echo that auditing of MRSM accounts is habitually late.

The 2012 accounts, which should have been signed off within the first half of 2013, are still with the auditors Deloitte Touche Tohmatsu.

The 2009 accounts were audited in 2011 by KPMG who in the process observed a serious lack of basic book keeping including inadequate acquittal of expenses by the corporate credit card-holder Paul Povey.

It was a lack of sound financial accountability by the current MRSM management since 2008 that has led to a number of employees quitting MRSM.

A former expatriate employee said he had to leave because he could no longer be part of decisions and actions that were anti-corporate governance.

Of the auditing process, a former employee remarked:

It was interesting that Paul (Povey) was never around to answer questions. He seemed to be out of town every time the auditors arrived in Tabubil.

He told PNG Echo that even Povey’s fellow management colleagues at Tabubil Engineering and the Weigh Inn Hotel (two other of MRSMs investments) did not have the answers for the auditor.

“This of course resulted in huge gaps in the company’s accounts and incomplete and untidy audit process.”

This year nothing has changed.

When auditors from Deloitte Touche Tohmatsu arrived in Tabubil on the 29 September this year to audit MRSM, its Head, Paul Povey, was away, as he’d been in preceding years –  a fishing trip with Ok Tedi Mining Ltd (OTML) managers to Suki in the Middle Fly, then on to Cairns and Singapore. The auditors left on 26 October.

We’ve had enough and we’re not taking it anymore

The PNG Echo story has sparked spirited discussion among Tabubil residents with readers sharing their views on social media. Some reactions:

“There is no smoke without fire.”

“Shareholders and the FCS and MRSM boards should start asking questions as to why whistle blowers are making noises about this.”

“MRDC must not let the Ok Tedi landowners down by not doing its job. Something is definitely going on within these (MRSM) companies.”

“With the help of social media, PNG is finally standing up to corrupt leaders, managers and employees. We say no to corruption.”

“I appeal to the people of the Star Mountains to ask their board members why the media is publishing such stories about their companies.”

“OTML’s Nigel Parker’s ‘don’t care’ attitude must be seen by Ok Tedi landowners and the PNG mining industry as totally irresponsible and dangerous.”

“Tabubil township knows Nigel is as close to Paul Povey as Alan Breen was,” so Nigel’s position is already compromised.”

Another former Tabubil resident and employee of OTML took the opportunity to warn corrupt managers and employees to take heed of PNG’s fight against corruption.

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Ok Tedi Landowner company rorted: Mangi Mining with Tony Stone

PNG Echo

Power tends to corrupt, and absolute power corrupts absolutely.  Lord Acton

As Peter O’Neill seeks to gain absolute power and control over revenues from Ok Tedi Mining Limited (OTML), another power hungry man, Paul Anthony Povey, rises to fame and fortune through mismanagement and corruption of the mine’s umbrella landowner company, Fubilan Catering Services (FCS).

Paul Povey

Paul Povey

The power monopoly was established on the arrival of the new incumbent to the job of CEO of Ok Tedi, Alan Breen, in 2007, when he removed the reputable international caterer, Eurest South Pacific, as managers of FCS and appointed a single person, Paul Povey as Manager.

Observers attribute the start of Povey’s rise to fame, fortune and power to the very close personal relationship he established with Breen between 2007 and 2010.

With this appointment, Povey gained control over the company’s management, it’s finances and overwhelming influence over the ill-educated, ill-informed and ignorant local directors who represent the shareholders in the investment company Star Mountain whose investment (FCS) Povey was managing.

Serious allegations of corruption against Paul Povey and Fubilan Catering Services

Favours for friends and living the high life

Despite criticism from the OTML community, Breen, compromising the integrity of the office of the Managing Director, pursued the relationship with Povey to the point of using his position to influence decisions in Povey’s favour.

A Tabubil resident said at one stage, Povey asked Breen to instruct managers of OTML’s chartered airline service, Asia Pacific Airlines, where Povey’s wife Samoa works as a flight attendant, to immediately raise her wages.

The Povey-Breen relationship also saw Breen’s stepdaughter, Jessica Waller, obtain a work permit and visa to replace a national and work under Povey as Manager of the Tabubil Golf Club.

Povey’s FCS-funded hospitality extended to a close circle of expatriate OTML employees and their spouses who enjoyed weekly parties filled with fine food, endless alcohol supply and music.  And they’d still be going on, if not for Povey’s recent hospitalization for a sciatic complaint.

Counted amongst Povey’s regular guests from OTML are current Managing Director of OkTedi, Nigel Parker (Breen’s successor) and wife Pakki, Security manager Trevor Green and his wife Rowena, Ok Tedi Development Foundation CEO Ian Middleton and Human Resource manager Brad McMahon – the names supplied by another invited guest.

In fact, an Australian woman who lived in Tabubil for over six years told PNG Echo that Povey made life in Tabubil bearable for OTML expatriate employees and their families.

Considering the remoteness of Tabubil, those of us who were friends of Paul and Samoa were eating and drinking like kings and queens. We had great meals on their verandah and partied every weekend at their music den under their house.

Fubilan Catering: their genesis, their raison’d’être and their assets

With offices in Tabubil and Brisbane, the FCS group is currently valued at over K11 million. Its most successful revenue earner is its K5 million per annum catering contract with OTML.

Its other businesses include an engineering and hardware venture in Tabubil and Kiunga and the Weigh Inn Hotel in Konedobu.

FCS was established under Mineral Resources Star Mountain (MRSM) – a subsidiary of the Mineral Resources Development Company (MRDC) – for the sole purpose of investing Ok Tedi mine-derived royalty and compensation payments and dividends for long term benefits of shareholders from traditional villagers that own the land on which Ok Tedi mine and Tabubil are built.

A final word

Current Managing Director of OTML, an alleged recipient of Povey’s hospitality, commented:

OTML values transparency and accountability, but neither would be promoted by commenting on or contributing to anonymous rumours. You should note that FCS is an independent corporate contractor with its own shareholders and governance overseen by MRDC. It is incorrect and patronising to suggest that OTML is the ‘custodian’ of FCS.

But is it only MRDC that should bear any responsibility?  Surely OTML have a moral obligation?  Ensuring future good governance seems to have been the intention of BHP upon its exit in 2001/2002 when it had OTML put in place internal controls and governance programs to help FCS and other landowner companies maintain best practice in their operations – why were they removed?

 Next week, auditors’ observations, details of cash allowances for FCS board and management staff and their spouses and an email from former MRSM company secretary Aleena Bird alleging abuse of office by Povey.

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