Tag Archives: PNG development

How resource companies exploit a corrupt and dysfunctional government

There has been a barrage of media recently about mining companies teaming up with a range of parters to deliver health-care and other services direct to the community.

Newcrest Mining and the Australian government have announced a partnership to improve maternal health, Exxon-Mobil is partnering the Cancer Foundation and The Voice, Barrick Gold is delivering agriculture training in Porgera.

Praise be to the resource companies, willing and able to step in where government fails its people – and no matter the role these same companies play in causing the very diseases, illnesses and other problems they are so happy to patch up with their band-aid PR!

But there is an even more sinister side to these good news stories that further illustrates how mining and other resource companies feed off a corrupt and dysfunctional government.

If government was doing its job and delivering decent basic services to the population, mining and resource companies would not have the opportunity to appear as ‘knights in shining armour’ the good news stories would disappear and, most importantly, customary landowners would not feel compelled to give away their land in the desperate hope that mining and logging companies might provide some basic services.

Resource companies are able to thrive in PNG because of, not despite, a corrupt and dysfunctional government. They rely on bad governance to open the doors to what they most desire – land and the resources it contains.

No matter the environmental and community destruction, their logging and mining cause, no matter the deaths, the violence against women, the unwanted pregnancies, the rape and prostitution, the pollution of rivers and loss of sustainable livelihoods when they can parade their social conscience in the media and have us all believe they are our saviours – just as long as we continue to give them what is most precious to us, OUR LAND!

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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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PNG LNG Willl Not Be Another Bougainville Crisis: Duban

The Mention Of Another Bougainville Civil War , As A Result In The Delay In The Payment Of The PNG LNG Project, As Speculated In The Debates In Australia In The Past Few Days “Is Nonsense And Unwarranted”.

Post Courier | June 14, 2017

The mention of another Bougainville civil war , as a result in the delay in the payment of the PNG LNG project, as speculated in the debates in Australia in the past few days is nonsense and unwarranted.
Petroleum Minister Nixon Duban was responding to questions put to him by the Post-Courier, on Tuesday, pertaining to reports carried in the overseas media on this issue.
While also in light of reports that had surfaced over the weekend of a planned protest by aggrieved landowners from the Central Province.
The protest did not eventuate at the plant site outside of Port Moresby.
However, the issue of royalty payouts to landowners came under the spotlight in Australia when questions were raised, by one of its senators as to why the Australian government through its Export Finance Insurance Corporation (EFIC) had not taken measures to ensure royalty payments were made.
The minister had expressed disappointment that some senior politicians had joined in the chorus inciting fear in the whole debate, reminding them that they were part of the O’Neill government until recently.
He had reiterated that the main reason for the delay of payment in the early payment of landowner benefits, was that many legitimate landowners had not been identified in the project area in Hela.
Mr Duban said PNG LNG project has a lifespan of over 50 years.
He said the landowners were fully aware and would not destroy something that would sustain their livelihood and that of the generation to come.
“Bougainville stemmed out from serious discontentment over what was poorly structured landowner benefits package.”
“PNG LNG landowners are given a much better deal with the foundation LNG project showing significant signs of expansion.
“I believe the growth potential will come with new opportunities and improved better deals for PNG and our landowners,” he said.
He assured investors and stakeholders that the project was in safe hands.

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Landowners threaten to shutdown LNG Operations

NBC News | PNG Today | June 12, 2017

Landowners in the Central Province are set to close down the PNG LNG site on today over unpaid compensations demands since 2014.

They held a meeting with representatives from operator ExxonMobil, Department of Petroleum and Energy, PNG Ports and Police yesterday.

The meeting was to stop the people, comprising four beneficiary villages of Papa, Lealea, Boera and Porebada from staging their protest.

However, landowner spokesman and Association Secretary, Robert Kauga said, their minds are made up and they won’t back down on their decision to carry out the protest until the government pays them their outstanding royalties and equities.

Mr. Kauga said the people are already fed up with the continuous lies and promises of payment by the government.

“They are admonishing us not to stage the protest but we cannot back down now, we have already prepared everything,”he said.

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Government Given 14 Day Ultimatum

Lynette Kil | Post Courier | June 7, 2017

The four LNG landowner villagers – Papa, Boera, Rearea and Porebada have given the government  a 14 day ultimatum to response to their petition.

“The government must address the issue of royalty and equity payments, the land mobilisation funds and the alleged illegal appointment of chairman of PNG LNG Plant Site,” said Boera Heritage Association president Muri Henao.

The landowners in the PNG LNG Project plant site have urged the government to start campaigning on changes for itself then for the people.

Henao made this remark during a press conference organised by the LNG Plant Landowners Association Inc .

Henao said the people have not experienced any changes in the community and landowners are still suffering.

“I really don’t know what the government is campaigning about as we have been betrayed.

“Our money was used to host the Pacific leader’s summit and cater for the 2018 Asia Pacific Economic summit, what will the government give to its people,” he said.

Henao expressed disappointment over non compliance from the office of the Chief Secretary Isaac Lupari of numerous letters concerning the landowner’s grievances.

Other representatives from the affected landowners’ villagers share the same sentiments and are demanding that the government respond to their petitions within 14 days.

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Papua New Guineans a lot worse off than in 1980 thanks to mining

Large-scale resource extraction – mining, logging and LNG – have left most people in PNG much worse off than before

Re-opening Panguna will mean the same for Bougainville

Radio New Zealand | 6 June 2017

An economist says Papua New Guineans have lost nearly half of the economic power they had in 1980.

Paul Flanagan, from the Australian National University, has worked in PNG and studied the economy for many years.

He says the focus of successive governments on resource development has brought few gains for the people.

He says the average Papua New Guinean’s economic wellbeing has fallen dramatically since 1980.

Mr Flanagan spoke with Don Wiseman who began by asking him to define the term ‘economic wellbeing’.

Coastal village of Hanuabada, adjacent to the CDB, in Papua New Guinea’s capital Port Moresby. Photo: RNZ/Johnny Blades

PAUL FLANAGAN: In this particular case the specific definition is using the size of the non-resource part of the economy and putting that in per-person terms. So it is non-resource GDP per capita. This is the best attempt to try and evaluate essentially how an individual’s ability to purchase goods and services has changed from 1980 to 2017 and that number is a very worrying minus 40.4 percent.

DON WISEMAN: And in real terms that means what for your average Papua New Guinean?

PF: There are obviously distributional elements there. Some people in areas of Port Moresby would have done very well since 1980, but on average, across the country as a whole, it means people in PNG are able to buy less goods and less services relative to 1980. They have gone back by 40 percent in real terms.

DW: And all of this is because of this pre-occupation, since independence, with developing resources, or bringing people in to develop resources.

PF: It is the different path between the resource sector, which has done extra-ordinarily well and the non-resource sector, which has gone back so severely. One thinks that the reason for that is the policy emphasis towards the resource sector – favourable taxation policies, favourable decisions as to where to put infrastructure, just the time and energy of the government is going too much into great big resource projects, and not enough time on the smallholder projects that are good for coffee growers in the Highlands, support small sized businesses in areas such as retail trade and that. Too much focus is going on the big projects, not enough on those smaller projects that would really benefit the people of PNG

DW: And the people with their land – this is actually the true resource of PNG as you see it?

PF: It is the land. It is the extraordinary beauty of PNG, the untapped tourism potential of the country is extraordinary also, but the real resource is the people themselves and educating them better, having them more able to engage with the Asian century, being able to tap their potential, that is the area of development policy that is really missing at the moment.

DW: Successive governments have gone for resource development because it’s seen like easy money, isn’t it?

PF: It does almost seem as if it is money growing on trees and some of the figures we have heard from the current government, and their estimates of just how much the ten of billions of dollars they would be talking would be coming through on tax revenues, therefore they could go and do things that led to massive increases in expenditure back in 2013, 2014, – it does seem like very, very easy money. The real inclusive elements development tends to be a much longer path. It will often take five to ten years to start seeing results of those type of micro-economic changes that really  unleashes the potential of people. We saw that during the 2000s, and some of the hard work that was done and the turnaround of the economic mismanagement of 1998/99, but that took a good five years before some of the benefits started being seen from those changes in policies. So it is pretty tempting for a politician to go for those easy money on trees rather than that really hard work on micro-economic reform to build a more inclusive development.

DW: In your report you have some focus on Bougainville, and Bougainville of course has experienced the highs and the very deep lows as a result of this focus on resources, but they are trying to develop their economy now and it is still this focus on resource development.

PF: That’s right. There are so many options and so many elements that make for successful development. And there isn’t a simple silver wand that will allow one policy of government to change that will lead to a more inclusive type of development. Bougainville is a care – incredibly complicated, institutions are weak, infrastructure is weak, there is still a lot of social issues there to actually be dealt with, including gender issues, to actually build up a more inclusive pattern of development. But to the extent to which the focus moves on ‘just let’s re-open the mine and that will save Bougainville’ that will be a very worrying, tempting, but very worrying pass for Bougainville to go down.

DW: Going into the election and it is in just a couple of week’s time, do you think what we have heard from any of the political parties is going to lead to a different direction if the [Peter] O’Neill government doesn’t remain in power?

PF: Well I think there are. I mean it is obviously a very broad range of parties that are standing. Quite a few of them are talking about more focus on people. They are talking about things such as changing the tax concessions that might be available, they are talking about re-orientating the big project expenditure on the big areas such as APEC. Some of the parties are talking quite openly about ‘ We can’t afford that sort of thing – we need to put the money back into health and education – these are the priorities’. So there is a great range of policies. What I am hearing from some, and of course the former prime minister [Sir Mekere] Morauta who did help with things back in 1999/2000, are putting up policies, which once again, do suggest sensible approaches to economic repair, bringing in international partners to assist with that and getting the focus back on track for a more people focussed development. You see that also in Pangu Party in some ways, the people they have there, in dealing with institutions and dealing with corruption. There are I think some good alternatives there but obviously the O’Neill government has enormous power in being the encumbent, so the chances of change are very uncertain.

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Governor Juffa against experimental seabed mining

Post Courier | June 5, 2017

Oro Governor Gary Juffa says that he supports calls by Cardinal John Ribat saying that Deep Sea Mining is an effort that many senior scientists warn against given the fact that the consequences are largely unknown.

“Sensitive ecosystems and life forms that the world barely knows about are in grave danger from this profit driven endeavor. The economic benefits to PNG are miniscule and do not justify the dangers posed by this project.”

“Meanwhile its legality is questionable given that there are no existing laws that would permit or license this activity. The current situation is such that the project is driven by politicians who have totally ignored the interests of their country and people,” Juffa says. -NBC

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