Tag Archives: Western Province

Ok Tedi Mining Ltd damaged by O’Neill

O’Neill may have turned the Ok Tedi mine into a corporate disaster, as Morauta claims below, but Morauta can hardly claim that under his leadership the outcomes for the poor people of Western Province were any better…  

Mekere Morauta | 14 June 2017

At a rally in Kiunga today, the former Prime Minister and current chairman of PNG Sustainable Development Program Ltd, Sir Mekere Morauta, told Western Province people the sad story of the Ok Tedi mine since Prime Minister Peter O’Neill took it in 2013.

He told them that the latest annual financial results are a disgrace, and confirm his worst fears about Mr O’Neill’s expropriation without compensation in 2013.

“They show that a well-managed and very profitable company under PNGSDP’s majority ownership has been turned into a corporate disaster under Mr O’Neill, as I predicted,” Sir Mekere said.

“OTML made a loss of K350 million in 2015, by far the largest in its history and far outstripping the K15 million loss caused by the very severe drought in 1997. The company never made a loss under PNGSDP majority ownership.

“This is Mr O’Neill’s dirty little secret. He and the OTML Board micro-managed by Dr Jacob Weiss have tried to hide the loss by not publishing OTML’s 2015 Annual Review, or its 2015 and 2016 quarterly financial results.

There is no explanation anywhere in the latest 2016 Annual Review to account for a loss of this magnitude.

“The only explanation can be the waste and mismanagement we have come to expect of the O’Neill Government.”

Mr O’Neill has decimated OTML profits. Under PNGSDP, average annual profits were almost K1.2 billion a year; under Mr O’Neill they are just K100 million.

OTML used to be the biggest taxpayer in PNG, which helped the national Government pay for education, health and infrastructure maintenance.

Under PNGSDP average annual taxes were K640 million; under Mr O’Neill they are just K100 million. OTML paid practically NO company tax at all in 2015 and 2016.

PNGSDP’s profitable and well run mine delivered large dividends: K288 million a year was paid on average to the State and the people of Western Province. A further K426 million a year went to PNGSDP.

After administration costs (which are capped), two-thirds was saved in the Long Term Fund and one-third went to the Development Fund to support programs for the people of Western Province and PNG.

Under Mr O’Neill total dividends have fallen to just K68 million a year on average, and no dividends at all were paid in 2013 and 2015. Only K150 million was paid in 2016 compared to K723 million in 2012, PNGSDP’s last full year of ownership.

PNGSDP received K5.5 billion in dividends from OTML between 2002 and 2012. Two-thirds of these dividends were invested in the Long Term Fund to be used after the mine closes. The balance of the LTF at the end of March 2017 had grown to K4.3 billion ($US1.36 billion).

Moreover, the LTF remains safe and well protected from the tentacles of the octopus.

One-third of these dividends (about K1.8 billion) were used for development programs in PNG and especially Western Province.

In total Western Province received more than K4.7 billion in direct benefits from OTML and PNGSDP: K2.0 billion in royalties, CMCA and other payments, K1.7 billion in dividends from OTML, K400 million for Kiunga-Tabubil road maintenance and more than K600 million in development projects from PNGSDP.

In October 2013, shortly after the expropriation of PNGSDP’s shares in OTML, Sir Mekere warned that OTML faced the same fate as the Tolukuma gold mine under state ownership:

State ownership “would spell disaster for Ok Tedi. Tolukuma has been ruined since it was turned into a State-Owned Enterprise, and instead of an asset it has become a huge liability. Ok Tedi will suffer the same fate. It will die a long and painful death. There will be risks to jobs and wages. There will be a lower standard of operations, including in workplace health and safety. The quality of environmental management will fall. Transparency and accountability will be compromised, especially in the area of contracts.”

Sir Mekere said his predictions had come true. “Mr O’Neill has killed Western Province’s Golden Goose.”

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Locals Call For Leaders To Stop Politicising On PNGSDP

Post Courier | April 28, 2017

LEADERS from the special mining Lease area in Ok Tedi in the Western Province have called on intending candidates to stop politicising the PNG Sustainable Development Program (PNGSDP).
They said they were making the call after concluding the signing of the heads of agreement for the transfer of 33 percent of the mine to them this week.
They said the road to the finalisation of the deal had been long and challenging after suffering years of neglect and marginal benefits from the mine.
They said this had been the status quo since closure of the Panguna which offsetting opening of OK Tedi which had been the country’s economic backbone for a long time.
“We particularly are very concerned that the matter of the Long Term Fund under the PNGSDP has been used as an issue for people with vested interest to score political mileage at the expense of the very people who are entitled to benefit from this fund,” CMCA region core group chairman Richard Zumoi said.
He also called for the immediate resignation of Sir Mekere Morauta as Chairman of the Board of PNGSDP to remove all possible political interference and influence on the organisation because he should not be politicising the issue in the elections.
He said outside of politics it was time for the people of Western Province to be in control of their own development destinies adding there should be two representatives from their people appointed onto the PNGSDP board.
“We are now demanding that there should not be any more statements relating to the PNGSDP issue unless there is a sincere intention and will to reform the program charter and rules to ensure that the people of Western Province receive full benefits in the form of tangible and sustainable
infrastructure and services because we the people gave the social license for the mine to continue to operate,” Mr Zumoi said.

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K50 Million Dividends Paid To Landowners Of Western Province

Post Courier | April 25, 2017

PRIME Minister Peter O’Neill has presented a cheque of K50 million in dividends to the OK Tedi landowners of Western Province.
Mr O’Neill made this presentation following the heads of agreement signing for the transfer of 33 percent equity interest in OTML to the Western Province group yesterday.
He also clarified at the signing that his government has always had the best interest of the people and it was their initial desire to give back the mine to the people including all funds that belong to them.
He said the story of the mine and the people of Western Province is a sad story because the people have been let down by many developers and previous governments.
He said that was why the current government has taken a bold step in correcting all those mistakes and one step was to have full custody of the mine.
“I have made a commitment in 2013 with a desire to return ownership of the mine therefore the heads of agreement signing is the conclusion of this commitment.
This is the time to develop resources and maximise it and there is no doubt that we still need developers however we still need to fix issues that has been prolonged for a very long time such as having all the funds fixed and returned to the people.
All funds from the sustainable development program are still parked and this government has not approved one project under these funds as they are before the court therefore we have not utilised a toea of those funds,” he said.
“I am satisfied with the agreement that is being signed because, the mine can now be managed by the landowners and this has achieved our desire as government to return ownership back to the people.
“We want to give benefits back to the rightful owners, transfer of CMCA back to people, see conclusion of court cases and give money back to the people as well as turning the mine into a profitable project for the benefit of everyone,” he 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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Ok Tedi Trust funds frozen by court case: OTML

oneill_vesus_morauta

Gynnie Kero | The National | January 17, 2017

TRUST funds for Community Mine Continuation Agreement (CMCA) villages in the South Fly district of Western are still frozen by a court case, according to Ok Tedi Mining Ltd (OTML).
But despite that, OTML continued to contribute money into the trust every year, deputy chief executive officer and general manager employee and external relations Musje Werror said.
As at December last year, the company paid more than K9.8 billion in benefits to the people of Western since 1982.
He revealed that 50 per cent of these funds were currently tied up in court.
Addressing people at a village in South Fly last Friday, Werror said the village was among others in the district whose projects would be delayed.
The Sepe/Auti village in South Fly was the final village in the CMCA corridor to sign the CMCA Extension Agreement (CMCAEA) last Friday.
“Your benefits start today (last Friday) after signing of the agreement.
“But your name (Sepe/ Auti) is among all South Fly villages, project delivery will be delayed. Until the (court) case is over, we cannot draw down from the trust,” he said.
Werror also told the locals that the compensation package for the 158 CMCA communities in Western was reviewed over the years.
“In 2001, the compensation package at that time was K175 million.
“That was revised in the 2006 memorandum of agreement (MOA) to close to K1.2 billion and now the CMCA extension agreement nearly K600 million.”
Werror urged Sepe/ Auti locals to cooperate with the miner and the Ok Tedi Development Foundation and the provincial government if they wanted to see real change in the village.
“To achieve sustainable development is not easy but it can and will happen if we all work together. I encourage the people of Sepe/Auti through your leaders to work closely with OTML, OTDF and the Fly River Provincial Government (FRPG),” he said.
“There will be disagreements along the way but we must never lose focus of our dream and our desire to develop our village, our region and our province.”
Ok Tedi Mining Ltd also presented two outboard motors and sporting equipment worth K70,000 to the village last Friday.
It is understood that two 23-foot dinghies would be delivered to Sepe/Auti later.

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PNGSDP case against State underway in Singapore

oneill_vesus_morauta

Gorethy Kenneth | Post Courier | October 04, 2016 

THE Papua New Guinea Sustainable Development Program case against the State started yesterday in the High Court of Singapore and will run for two weeks.

The Attorney-General’s office confirmed last Friday that the case was scheduled for this week but did not provide dates. But Koh Swee Yen, one of the lawyers for the plaintiff, which is the State in an email last week, said the case was scheduled to October 3 and was anticipated to run for the next two weeks.

The case, HC/Originating Summons (OS) No 234 of 2015, which was last heard in July and August will be heard in the Singapore High Court this morning with its Coram Judith Prakash J and counsels Koh Swee Yen, Yin Juon Qiang and Joel Quek (Wong Partnership LLP) for the plaintiff and Nish Shetty, Joan Lim-Casanova, Jordan Tan, Lim Chingwen and Sarah Hew (Cavenagh Law) for the defendant.

In this originating summons, the State, sought a declaration that it was entitled to inspect and take copies of all true accounts, books of account and/or records of PNG Sustainable Development Program Limited. This OS was an offshoot of the action in suit 795 of 2014, having been started after a summons in S795, which had applied for the same relief, was dismissed on the ground that the relief applied for, being final, had to be sought by way of an originating process rather than by an interlocutory application.

PNGSDP mounted a root-and-branch attack on the State’s alleged right of inspection. Its argument was that the State was not entitled to the relief it sought which was threefold. First, it was inappropriate to commence this action by way of an originating summons. Secondly (and this is the most hotly contested ground), the State did not have and may not enforce any alleged right of inspection. In particular, it refutes the State’s three arguments, which are based on the Memorandum and Articles of PNGSDP, an alleged collateral contract incorporating the same, and stopped. Thirdly, even if the State had an enforceable right of inspection, it does not extend to the documents listed in the schedule to OS 234.

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Minister Zeming Calls for Sir Mekere Morauta to ‘do the right thing’ and step down from PNG SDP

Mao Zeming

The Minister for Fisheries, Hon. Mao Zeming MP, has called on Sir Mekere Morauta to do the honourable thing and relinquish control of the PNG Sustainable Development Fund to the people of Western Province after yet another court ruling went against Sir Mekere.

On Friday the Supreme Court dismissed Sir Mekere’s challenge relating to the government’s decision to acquire shares belonging to the PNG SDP.

“The time has come for Sir Mekere Morauta to walk away from the PNG Sustainable Development Program and give the people of Western Province access to their money,” the Minister said.

“Mekere has again been shown the door in the Papua New Guinea Supreme Court and continues to lose cases before the Singapore High Court.

“There has to be a time when Sir Mekere admits that he has no claim over these billions of Kina belonging to the people of Western Province.

“This money has to be given to the men, women and children of Western Province.

“PNGSDP ceased all development projects three years ago, before moving its operations offshore, where it continues to incur millions of dollars on administration, legal and professional fees.

“This is all money that could be used for development projects that will directly help the people of Western Province.

“In the latest Supreme Court ruling, Sir Mekere’s application was described as incompetent and an abuse of the process of the court.

“Mekere is a former Prime Minister and he should behave with the dignity that is expected of someone who once held the highest office in the land.”

Minister Zeming said a massive change in attitudes is taking place around the nation in respect accorded to the rights of landowners, and this must take place in the PNG SDP.

“Last week the Prime Minister stood up in Parliament for the interests of the landowners of Western Province and other areas where resource development activities are taking place around the country.

“As PM O’Neill said, for too long the rights of landowners had been ignored, and this is now changing.

“The Government will not let up in its efforts to regain rightful oversight and control of PNGSDP and its assets.

“The State will continue to pursue the Singapore High Court action against PNGSDP to ensure that the interests of the people are safeguarded,” Minister Zeming said

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