Tag Archives: Peter O’Neill

‘All Alluvial Mining Should Be Reserved’

PM Peter O’Neill says all alluvial mining should be reserved for Papua New Guineans

Post Courier | May 31, 2018

PRIME Minster Peter O’Neill says all alluvial mining in the country should be reserved for Papua New Guineans.

Mr O’Neill said he agrees with the decision and the stances the Morobe provincial government took in allowing Papua New Guineans to mine and take ownership of alluvial mines.

He said although he was not aware of the letter from the Morobe Goldfield Mine Association, he would instruct the Minster for Mining and the department to look into the concern of the people who did not want explorations licences to be issued to big mining companies.

“I’m not privy to the letter, generally I support the call and stand of the Morobe provincial government that alluvial mines should be reserved to our people.

“Big companies should not be involved in alluvial mining in PNG.”

Mr O’Neill said this during Question Time yesterday in response to Morobe Governor Ginson Soanu who had asked that the Morobe Goldfield Mine Association oppossed the issuing of alluvial mine exploration licences to big companies to be involved in alluvial exploration and mining in Wau-Bulolo.

Mr Soanu said that Morobe provincial government supported the association, which involved villagers and ordinary people, and wanted the Minster for Mining Johnson Tuke, the Department of Mines and MRA not to issue any licence to Harmony Exploration Limited and Abu Exploration Limited for EL2544 and EL2554 in the Wau-Bulolo area.

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“Government Will Not Repeat Mistake With Papua LNG”

Post Courier | May 30, 2018

PRIME Minister Peter O’Neill has told Parliament that the government will not repeat the same mistakes when dealing with the new Papua LNG project or any other resource project.

He said the developer of Papua LNG would have to complete social mapping and landowner identification before any project is developed.

Mr O’Neill also said the government would review the laws to make it compulsory for consultation with provincial governments and landowners.

“We may have to review the legislation around the consultation process, but in terms of the resources sectors in mining, petroleum and gas industry, I think there is quite a very good consultation process between the stakeholders, especially the landowners and the provincial governments,” he said.

“I would also want to announce that in terms of the second LNG project for Elk Antelope, I want to inform Parliament that we have also included the Governor for Gulf in the State negotiation team.”

He said this follows the precedence set by the Somare government in the first LNG project where the governors for Southern Highlands and Hela were included in the negotiation teams so they are fully engaged in every stage of the negotiation that is taking place.

“I certainly do not want to make the mistakes of the first LNG, where landowners were not properly identified now we are having a difficult process of clan vetting as all sorts of clans are popping up and it can be a cumbersome and difficult exercise,” he said.

“That’s what we are trying to avoid and we want to make sure that developers take on the responsibility as stipulated in the Oil and Gas Act and in the Mining Act.

“They must identify and do the social mapping properly so that the right benefits go to the rightful landowners and stakeholders in the projects,” he said.

Mr O’Neill was responding to questions from Gulf Governor Chris Haiveta relating to provincial government representation in the extractive industry and the level of consultation and the time which these consultations are allowed for by the provincial governments and the resource owners.

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Natural gas project that promised economic boom leaves PNG in ‘worse state’: report

Isabel Esterman | Mongabay | 17 May 2018

  • Proponents of PNG LNP, an ExxonMobil-led natural gas project in Papua New Guinea, predicted it would bring massive economic benefits to landowners and to the country as a whole.
  • According to two recent reports by the Jubilee Australia Research Centre, PNG’s economy is worse off than it would have been without the project.
  • Jubilee Australia also links the PNG LNG project to an upswing of violence in the areas around the plant.

In 2008, when a consortium led by ExxonMobil was drumming up support for a $19 billion natural gas extraction and processing project in Papua New Guinea, proponents of the development predicted it would underpin the country’s economy for decades.

Production began in 2014, and now reaches approximately 7.9 million tonnes of liquefied natural gas per year. However, according to two recent reports by advocacy group Jubilee Australia Research Centre, the PNG LNG project has not only exacerbated conflict and inequality in the Papua New Guinea highlands, it has also failed to produce the promised benefits. According to Jubilee Australia’s analysis, PNG’s economy would be better off if the gas had been left in the ground.

Predicted economic impacts of the PNG LNG project compared to actual impacts (based on Jubilee Australia’s analysis of underlying economic trends). While exports have exceeded expectations, GDP growth has been slower than forecast and income, employment and government spending have dropped. Image courtesy of Jubilee Australia.

Big promises

When pitching the project, developers made big promises about the economic and social benefits the megaproject would bring to the country.

One influential 2008 study, an economic impact analysis commissioned by ExxonMobil and authored by Australian consultants ACIL-Tasman (now ACIL-Allen), predicted the project would bring a tremendous windfall not only to shareholders, but also to the people of PNG. It forecast the overall size of the country’s economy would nearly double, household incomes would rise by 84 percent, and employment increase by 42 percent.

Backers of the project argued that these anticipated benefits would more than compensate for any adverse environmental or social impacts a giant natural gas facility might bring in its wake.

Instead, says Jubilee Australia, PNG is today worse off than it would have been if the country’s economy had simply continued developing at the same pace as prior to the launch of the project.

“Currently, on almost all economic indicators, the people of PNG would have been better off had the project not happened at all,” report co-author Paul Flanagen, who has served as a senior adviser to the Australian government and the PNG treasury, said in a press statement.

Jubilee Australia’s analysis found that instead of the 97 percent increase anticipated by ACIL-Tasman, PNG’s economy in 2016 was just 10 percent larger than its pre-LNG growth path would have predicted — most of that concentrated in the largely foreign-owned extractive sector. Instead of rising by 84 percent, household incomes fell by 6 percent in the same period, while employment fell by 27 percent.

Even with the moderate increase in the size of the economy, government expenditure to support better education, health, law and order, and infrastructure fell below the baseline by 32 percent, rather than the 85 percent increase anticipated by the ACIL-Tasman report.

Significantly, these decreases came even though production at the facility has exceeded expectations — an increase Jubilee Australia contends was more than sufficient to compensate for the impacts of falling gas prices.

The Tari Gap in Hela Province in the Papua New Guinea Highlands. Photographed in 2003 before the arrival of the PNG LNG project. Image by Ron Knight via Flickr, CC-BY

Falling short

The authors point to several factors.  First, they cite “serious flaws” in the economic impact analysis, describing the forecasts as “extraordinarily over-optimistic.”

Government revenue has also fallen short of expectations due to a combination of generous tax concessions offered to the project, and what the report describes as “aggressive tax avoidance” by the companies involved.

“Exxon and Oil Search” — the second-largest stakeholder in the joint venture — “should be paying half a billion [Australian] dollars [$377 million] to the PNG government every year, since the gas started to flow in 2014,” Jubilee Australia executive director Luke Fletcher said in a press statement. “Instead, they are paying a fraction of this amount, partly because of their use of tax havens in the Netherlands and the Bahamas.”

Drawing on an analysis by the Extractive Industries Transparency Initiative, the authors note that the PNG government received more money from personal income taxes paid by ExxonMobil employees than it did from corporate tax from the company.

Further, the report points to “poor policy decisions made by the PNG government in response to the gas boom.” Exuberant spending in the early years of the project led to debt and deficit when the anticipated revenue failed to flow into government coffers.

Landowners, too, have not received the royalties they expected, a problem Jubilee Australia attributes largely to a failure to vet and identify beneficiaries before production began. Clan boundaries were mapped, but the individuals entitled to payments were not specified as part of the original agreement. This, the reports argues, has been an ongoing source of conflict and uncertainty and has fed into violent unrest in the territories around the project.

“During the construction phase of the project landowners had jobs, families had money, and conflict between clans was minimal,” report co-author and anthropologist Michael Main said in a press statement“When construction ended and people lost their jobs, money stopped flowing, frustrations built up and violent conflict escalated to catastrophic levels.”

A Huli Wigman and youth. The majority of landowners around the PNG LNG site in Hela Province are from the Huli ethnic group. Image by Ron Knight via Flickr CC-BY

‘Utter nonsense’

PNG Prime Minister Peter O’Neill has challenged Jubilee Australia’s conclusions, as have ExxonMobil and Oil Search.

During a May 2 speech in Brisbane, Australia, O’Neill denounced the first of the Jubilee Australia reports as “fake news” and “utter nonsense.” He said he had not read the paper, but accused its authors of aligning themselves with his political opponents.

ExxonMobil and Oil Search, meanwhile, pointed to their royalty payment agreements as well as their corporate social responsibility initiatives, and noted it was the government, and not them, who was responsible for relaying payments to landowners.

“PNG LNG royalty payments due to the government began, and have continued, since the start of production operations in 2014. Payment and distribution of royalties and other benefits due to landowners in the Project is the responsibility of the PNG government and is based upon benefits sharing agreements previously executed between the government and Project area landowners,” ExxonMobil said in a statement to the Business and Human Rights Resource Centre. The company also pointed to its social investment program and its support for humanitarian relief in the aftermath of an earthquake that struck the project area in February.

Oil Search said royalty payments were distributed to the PNG LNG plant site and to traditional landholders in 2017, although it added that “significant payments” were still outstanding. “[W]hat is good for Oil Search is good for PNG. We have a strategic interest in ensuring that we maintain a stable operating environment based on strong and enduring relationships with local communities,” the company said.

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O’Neill ‘undermining’ Bougainville peace deal, vote plan, says Miriori

The trailer for New Zealand documentary maker Will Watson’s forthcoming documentary about the Bougainville peace process, Soldiers Without Guns

Pacific Media Centre | May 8 2018

A Bougainvillean leader has accused Papua New Guinean Prime Minister Peter O’Neill of “undermining” the island’s 17-year-old peace agreement and the independence vote due next year.

Martin Miriori also condemned O’Nell for lacking sensitivity over Bougainville that struck a New Zealand-brokered peace agreement which ended a 10-year civil war and included a referendum vote on independence.

Miriori, a Panguna landowner and pro-independence leader, was reacting to a statement by O’Neill at the Business Forum in Brisbane last week and repeated in PNG’s The National newspaper that the vote was not about independence, but what was best for the people of Bougainville.

“When the prime minister comes out openly making such a statement in public, my view is that he is already undermining the good intentions and the spirit of the Bougainville Peace Agreement which, among other issues, clearly states that the issue of independence for Bougainville will be also among the options for a referendum vote to be taken by the people [in] June next year,” he said today in a statement.

“This is also the common understanding of the international community as well [as] including the United Nations,” Miriori said.

“For the prime minister to water down the main focus on the independence issue at this time is simply a big slap on the face [of] the people of Bougainville.”

Miriori said Bougainvilleans would not have “fully committed themselves” to the joint partnership with Papua New Guinea in the peace process if they knew that they were “going to be tricked”.

“We must not lose the trust and confidence of the people at all cost, and in doing so try to confuse them by making such statements, which could easily undermine all our good work and tireless efforts being invested in this very delicate and sensitive process since we first fully committed ourselves at Burnham [New Zealand] in July 1997 towards achieving lasting peace by peaceful means,” Miriori said.

RNZ Pacific reports that O’Neill told the Business Forum in Brisbane that when the outcome of the referendum was tabled in the national Parliament, he was sure every MP would vote in the interests of a unified and harmonious country.

Guitars instead of guns
Meanwhile, the film maker of a forthcoming documentary about the Bougainville peace process, Soldiers Without Gunshas released a trailer.

In a social media message message to supporters last week, Will Watson said: “We were celebrating the 20th anniversary of lasting peace for Bougainville yesterday.

“Yes, the 30 April 1998 was the signing of the peace accord. 

“The other big news is that I completed the trailer for the upcoming movie, Soldiers Without Guns. It took lots of work but I think it describes the Pacific’s worst civil war and peacekeeping with guitars instead of guns.

“Still lots of work to do to complete the film. I hope you like the trailer.

“I have been inspired to tell this story for the last 12 years. I am now very close to completing the feature length film.”

Watson won the 2017 Cannes Film Festival peace feature for his documentary Haka and Guitars.

He has appealed for support in a funding campaign to complete the Bougainville project.

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PNG to learn from major gas project flaws

Papua New Guinea’s government is set to reconsider how it taxes future resources projects.

AAP | 2 May 2018

The Papua New Guinea government insists it will learn lessons from the failure of a liquefied natural gas project to deliver on a promised economic boom to its people.

A report by think-tank Jubilee Australia released on Monday concluded PNG residents “would have been better off had the project not happened at all”.

It was critical of economic, household income, employment, government revenue and import impacts of the project.

Flows from the ExxonMobil-led project began in 2014 and it now supplies eight million tonnes of gas a year to Japan, South Korea and China.

However delays in the landholder identification process mean locals in Hela province are yet to receive royalties from the project, resulting in tribal violence.

The gas project was partially funded by Australia after the export credit agency Efic made its largest-ever loan of $500 million to ExxonMobil, OilSearch, Santos and the PNG government in 2009.

An angry PNG Prime Minister Peter O’Neill dismissed the report, which he hadn’t actually read, as “fake news” and “utter nonsense” during a speech in Brisbane to the Australia-PNG business forum on Tuesday.

PNG Foreign and Trade Minister Rimbink Pato said the LNG project was a “first class operation”.

“We are learning and if there are opportunities to do a better deal, we will,” he told AAP on the sidelines of the forum on Wednesday.

“Each project brings new challenges.”

Treasurer Charles Abel welcomed the analysis and said his department will examine the veracity of the numbers.

“We are aware that the scale of benefits from the project has not matched expectations fully, especially when commencement of production coincided with a collapse of the oil and gas prices,” Mr Abel told the Post Courier newspaper.

“I have given written instructions to Treasury to develop a template for project agreements going forward where the tax regime is more production (royalty) based rather than profit-based.”

ExxonMobil has defended the project saying it had contributed $5.69 billion to local businesses and the government through employment tax and royalties.

The company’s PNG managing director Andrew Barry didn’t directly address the report during his address at the forum on Wednesday but trumpeted community programs in health, women’s empowerment and agriculture.

Another mining executive, Craig Jones from Newcrest Mining, which operates the Lihir gold mine, warned PNG legislative and taxation changes “could shake investor confidence”.

“There’s a great deal of uncertainty and nervousness created by proposed amendments to the Mining Act,” he told the forum, adding that PNG was an expensive place to do business.

“Apart from the highly-debated contributions made by resource companies in company tax, there are many other contributions resources companies make – many of which are voluntary – and these benefits have direct impact on the lives of Papua New Guineans.”

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Prime Minister rejects LNG report he hadn’t read as ‘fake news’

Peter O’Neill admitted the LNG project had not delivered the massive benefits that had been predicted. (Supplied: Santos)

Liam Fox | ABC News | 1 May 2018

Papua New Guinea’s Prime Minister Peter O’Neill has rejected as “utter nonsense” a report — he later admitted he hadn’t read — that claims his country would have been better off without a massive liquefied natural gas project.

The report released by the Jubilee Australia Research Centre on Monday said the ExxonMobil-led PNG LNG project had not delivered the massive economic benefits that had been predicted.

It also claimed the PNG economy would have been better off if the project, PNG’s biggest resource venture, had never been constructed.

During a speech to the Australia PNG Business Forum and Trade Expo in Brisbane Mr O’Neill dismissed the report as “fake news”.

“It’s quite disappointing to note that some of our experts continue to try and talk down the economy.”

After his speech, Mr O’Neill said he had not read the Jubilee Australia report.

He acknowledged the PNG LNG project had not delivered the massive benefits that had been predicted, such as doubling the size of PNG’s economy.

But he said that was the result of a drop in the price of oil.

“The flow-on effects of that is that none of the stakeholders will get the benefits that we were all anticipating,” he said.

Household incomes and employment have fallen since the PNG LNG project began. (ExxonMobil PNG)

One of the co-authors of the Jubilee Australia report, economist Paul Flanagan, was in the audience during Mr O’Neill’s speech and described it as “disappointing”.

He said he stood by the report and its conclusions.

“That report indicated that on almost all economic criteria, welfare has decreased in PNG because of the PNG LNG project,” he said.

“We stand by the point that at this stage, because of poor policies, PNG would’ve been better off without the PNG LNG project.”

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Bougainville independence not a ‘plaything’ for foreign media, PNG leader says

Prime minister Peter O’Neill says ‘Australian and New Zealand media are very obsessed’ with Bougainville’s independence. Photograph: Dave Hunt/AAP

With a referendum due next year, Peter O’Neill promises to uphold peace agreement but insists MPs must endorse outcome

Australian Associated Press | 1 May 2018 

Papua New Guinea’s prime minister has warned foreigners shouldn’t treat the prospects of an independent Bougainville as a “plaything”.

The autonomous region, which has a population of about 230,000 people – similar in size to that of Hobart – is due to have a referendum on whether to become independent next year.

PNG signed a peace agreement with Bougainville in 2001 after a decade-long civil war that shut down the giant Panguna copper-gold mine.

The prime minister, Peter O’Neill, insists his government will uphold the agreement and hopes the referendum can be conducted in a peaceful manner that doesn’t disrupt business on the island.

There were prerequisites to the referendum going ahead, including the establishment of the rule of law and disposal of weapons. The question that will be put to the people still has to be developed, he said.

O’Neill hit out at foreign interference over the referendum.

“It is not about independence – it is about what is best for the Bougainville people,” he told the Australia-Papua New Guinea business forum in Brisbane.

“Australian and New Zealand media are very obsessed with the idea of independence – for them it’s some plaything.”

O’Neill flagged that after the vote in 2019 the outcome must be endorsed by PNG’s national parliament.

“I can assure you every member of parliament will vote in the interests of unified and harmonious country,” he said.

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