Tag Archives: Western Province

O’Neill’s lies show he still wants to get his tentacles on $1.4 billion

War of Words Over PNG SDP Gets Even Hotter

Mekere Morauta | April 25, 2019

The Member for Moresby North-West, Sir Mekere Morauta, said today that Peter O’Neill’s statement that BHP Billiton and I created PNGSDP as a private company with four shareholders, one of whom is me, is a deliberate lie manufactured by a man desperately trying to repair his public face following the comprehensive win by PNGSDP in the Singapore Supreme Court.

“Peter O’Neill also lied to the Singapore Court, through the State’s affidavit, saying he had a document giving the State the power to control PNGSDP,” Sir Mekere said. “He failed to produce the document as evidence to the Court, and the court decision exposed him as the liar he is 

“Why did he not produce such a document? Because no such document exists. He made it up, hoping this would convince the Singapore Court.”

“Why is he still lying? Because he wants to get his tentacles on the $1.4 billion in PNGSDP’s Long Term Fund.”

PNGSDP was established by the State of Papua New Guinea, BHP Billiton and Inmet, the shareholders of Ok Tedi Mining Ltd in 2000, to hold the BHP shareholding (then 52%) gifted by BHP.

The object of PNGSDP was to invest two-thirds of the future dividend flows from the shares into a Long Term Fund to be used after mine closure for sustainable development in Western Province. One-third of the dividend income was spent on development projects throughout the country, including Western Province.

PNGSDP was established as a not-for-profit company, limited by guarantee. It has no shareholders. In such company structures, used by charities, NGOs, sporting groups and other similar organisations, shareholders are replaced by members. I am a member of PNGSDP, not a shareholder.

Members do not derive any benefit from a limited guarantee company, as shareholders would from a limited liability company. The Program Rules, set jointly by the Government of PNG and BHP, prescribe that the benefits from PNGSDP flow only to PNG and Western Province.

Singapore documents purportedly showing I am a shareholder are pro-forma documents that do not provide for companies limited by guarantee. They do not provide for members instead of shareholders, as happens in many jurisdictions.

“The statement that I am a shareholder of PNGSDP is a naked, diabolical lie,” Sir Mekere said.

“Increasingly, it seems that the Prime Minister is fabricating stories to cover his own misdeeds. If he actually believes his own lies, we should all be worrying about not only his level of intelligence, but also his sanity.

“The man is not fit to be Papua New Guinea’s Prime Minister.

 “Peter O’Neill’s ceaseless attacks on PNGSDP and on me are due to his failure to gain access to the Long Term Fund – which is what he wants, desperately.

 “He was not satisfied with the extremely valuable shareholding PNGSDP had in Ok Tedi, which he expropriated in 2013. He also wants the Long Term Fund, which now stands at over $1.4 billion. He wants the lot.

 “I want to assure the people of Western Province that their money in the Long Term Fund is safe, and will continue to be safe, whilst it is managed by an independent PNGSDP. 

“It was my instruction to the advisory team when PNGSDP was established that the company was to be protected from political influence – from the tentacles of octopuses.

“The Singapore Court decision proved the independence of PNGSDP. I am proud that I led the fight and won it for the people of Western Province.”

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Donald calls on govt to review oil, gas act

The National aka The Loggers Times | April 11, 2019

NORTH Fly MP James Donald, pictured, has called on the Government to review the Oil and Gas Act before it signs agreements on petroleum resource development.

Donald said certain provisions of the Oil and Gas Act 1998 did not serve or protect the interests of Papua New Guineans, especially the project area landowners, and should be amended.

For example, he said the legislation failed to provide for the landowners, provincial governments and local level governments to be involved in the consultations and negotiations right up to the finalisation of the agreement.

Donald said they were key stakeholders even though they only owned a 2 per cent stake in equity when it came to benefits distribution.

“The landowners are given 2 per cent under the current act, which is less when what they should be rightfully getting – 10 to 12 per cent equity or more,” Donald said.

“So really when you look at it closely, it (the current Act) is of no real benefit to Papua New Guinea landowners, the host provincial governments and local level governments.”

He said the 2 per cent equity for landowners should be increased.

“Why continue to keep a law that does not serve our people’s interest?” Donald said.

He called on the ministers for petroleum and energy to work on amending certain sections of the legislation before going ahead with agreements on gas development. He said if not amended, the current legislation would only cause problems for future projects.

“In my view, our government should review and amend the law to give better deal for our people in terms of resource ownership by law because they deserve better from their government,” he said.

Meanwhile, Donald has written to the Constitutional and Law Reform Commission to support him in sponsoring a Private Member’s bill to review and amend certain provisions of the Oil and Gas Act.

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O’Neill Loses in High Stakes Battle for Control of US$1.4b PNGSDP

Papua New Guinea state fails to wrest control of US$1.4b stake in PNGSDP

K.C. Vijayan | The Straits Times | 5 April, 2019

The government of Papua New Guinea (PNG) has lost its protracted battle in the Singapore High Court to wrest control of an entity with assets worth about US$1.4 billion (S$1.8 billion) that were spawned from a deal inked with the “largest mining company in the world”.

Justice Vinodh Coomaraswamy has ruled in favour of PNG Sustainable Development Program (PNGSDP) company, saying the state of PNG had failed to prove it had a deal with PNGSDP’s co-founder BHP Minerals Holdings, for joint control to develop PNGSDP assets.

It also failed to prove that there was a charitable trust that allowed the state to intervene.

“I have found that neither the agreement nor the trust exists. The pleaded breaches of the agreement and the trust must correspondingly fail,” Justice Vinodh said in decision grounds on Tuesday.

The outcome means PNGSDP is free to carry out its objectives under the control of its independent board according to the 2001 contractual framework, without interference from the state.

Justice Vinodh, in his 149-page judgment, addressed each of the arguments made as he explained why the state had failed in its bid to wrest control of PNGSDP from its independent board.

“I acknowledge I found the state’s narrative compelling and its logic attractive. But the essential problem… is that this narrative stands alone and is unsupported by the evidence,” he said.

The court examined each key plank of the state’s case and found in addition that none of the state’s witnesses pointed to the existence of a partly oral agreement, much less to the terms of that agreement.

The court found that in the context of a “sovereign nation” and “the largest mining company in the world”, it was likely that the parties would have entered into written contracts “definitively and exhaustively setting out the precise terms actually agreed, instead of exposing their minds to the vagaries of memory and ambiguity inherent in a partly oral agreement”.

The high-stakes court battle involved law heavyweights on both sides. Defending PNGSDP was a team led by Senior Counsel Philip Jeyaretnam from Dentons Rodyk & Davidson while WongPartnership’s Senior Counsel Alvin Yeo led the team representing the PNG government.

PNGSDP was incorporated in Singapore in 2001 with two shareholders: the state of PNG and BHP Minerals Holdings and was meant to enable BHP to divest its shares in mining company Ok Tedi Mining to PNGSDP.

Both parties intended PNGSDP to hold BHP’s shares in Ok Tedi Mining and apply the derived income to promote sustainable development in PNG.

BHP owned 52 per cent and the state 20 per cent of the mine, which was rich in gold and copper and highly profitable.

The judge noted there were several reasons PNGSDP was incorporated in Singapore and these include its robust corporate governance regime.

In 2012 and 2013, PNGSDP made material changes to its corporate governance framework which diluted the state’s powers of control and oversight over the company.

The PNG government sued to reverse the changes.

It argued, among other things, that it would not have agreed to form PNGSDP if the company was free to cast off the state’s rights of control and oversight.

PNGSDP countered that the structure of the parties’ written agreement left no scope for such a critical aspect of PNGSDP’s corporate governance framework to be left “entirely undocumented in that suite of contracts and to be the subject of an oral agreement”.

It added that the common intention in PNGSDP’s formation was to eventually make it a self-run and self-perpetuating organisation and the changes made in 2012 and 2013 were the next step in effecting the common intention.

Justice Vinodh said the dispute is “about corporate governance of PNGSDP”.

He added: “For all the reasons set out, I hold the state fails entirely in its claim against PNGSDP. It is not entitled to the relief sought.”

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Govt, BHP blamed for damage to Fly River

The Fly River is a “dead river” according to the World Bank

The National aka The Loggers Times | January 31, 2019

THE Government and BHP should be equally responsible for the damage to the Fly River as the result of the Ok Tedi mine, a former mining minister says.

Former mining minister and South Bougainville MP Sam Akotai thanked Minister for Environment and Conservation John Pundari for tabling a bill in respect to environment population.

He said the Act would put Ok Tedi on par with all the environment protection laws and practices with other mines operating in the country.

Akotai said the Act would also give confidence to other mines that the Government was not biased with its operations and conducts in respect to the environmental issues in Ok Tedi.

Akotai said he had experience in the industry for well over 18 years and was qualified to make such statements while Ok Tedi mine brought a lot of revenue for the country.

He said the developer, BHP Ltd, owned the mine but it was in partnership with the government and while there was a lot of talks on the damage in Western, both BHP and the national government needed to be squarely responsible for the damage.

He said damage done to the Fly River and its inhabitants was irreplaceable, with the river being described as a “dead river”.

“It is one of the biggest damages ever, and many times we are happy to receive revenues but we have a population who are faced with the situation where the river is already dead,” he said.

“A World Bank report says Fly River is a dead river. After the mine closes, the people of Western living along the Fly River will face the problem for more than 200 years.

“However, the good news was that the new Act would at least control the operation of the mine and the deposit of the waste of the mine.”

Akotai said waste from the Porgera gold mine in Enga was also washed down to the Strickland River which eventually connects the Fly River that added more to the level of damage.

“That is why I’m sorry for our citizens living along the Fly River in Western,” he said.

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Thirty-four years of mining but Western still behind others in development: Yoto

A mother and her malnourished child, Bimadbn Village, Morehead, Western Province, Papua New Guinea. Photo: Penny Johnson

Thirty-four years of mining at the giant Ok Tedi mine but the people of Western Province are still waiting to see the promised benefits

The National aka The Loggers Times | January 28, 2019

Western Governor Taboi Awi Yoto says his province still lags behind other provinces in terms of development, despite 34 years of Ok Tedi mining operations.

Yoto said this when he presented its K308 million 2019 appropriation budget to Treasurer Charles Abel in Port Moresby on Thursday.

“There are no major road networks to connect rural areas to urban areas,” he said.

“My people are still walking long distances, paddling along rivers and swamps to reach the nearest service centres to get medical treatment, attend schools or sell their products at the local market.”

Yoto said the Western Province Development Strategy (2018-22) focused on healthy and educated people with food on the table and income in their pockets.

The Western appropriation budget of K308,050,800 expects K210,831,100 million from National Government grant allocation.

Yoto said the provincial government, through its internal revenue collection, was expected to collect about K97,219,700.

Provincial headquarters will get K171,049,100, South Fly K41,993,900, Middle Fly K49,435, 900, and North Fly K45,571,900.

“The criteria for budget allocation was based on current development and service delivery issues and challenges that confront the lives of over 211,000 people living in rural areas and urban centres across Western,” Yoto said.

Enabling infrastructure got the biggest slice of the budget with K50,764,100 (31 per cent) allocated.

This was followed by education with K36,691,400 (22 per cent)

The health sector was allocated K29,607,000 (18 per cent) while governance sector was allocated K23,372,200 million (14 per cent).

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Ok Tedi Pays Out K100 Million In Dividend

Post Courier | July 24, 2018

The Ok Tedi Mining Limited (OTML) board paid out K100 million as dividend to its shareholders last week Friday.

In announcing the payout, OTML board chairman Sir Moi Avei also cautioned shareholders not to have high expectations heading into the second half of 2018.

He said the company had showed its resilience to bounce back from the effects of February’s 7.5 magnitude earthquake which affected the province and the mine, including four other provinces in the southern and highlands regions of the country.

“While the performance of the business was adversely affected following the earthquake in February, production and profitability have progressively returned to more normal levels,” Sir Moi said.

“Allowing the company to make a K50 million contribution to the earthquake appeal in March 2018 and now fund an interim dividend (of K100 million).”

He thanked employees and contractors for their efforts in recovering from the effects of the earthquake while pointing out that the second half outlook, while positive, required care on the part of the recent fall in copper prices and major infrastructure development.

“While the outlook for the second half of 2018 remains positive, the recent decline in copper price and the ongoing cash requirement to complete the replacement and relocation of the in-pit crusher meant that the board continued to exercise prudence,” Sir Moi said.

Following the transfer of additional equity from the State to Western Province entities in April 2018, K67 million of the dividend was paid to the State, with the balance of K33 million paid to the Fly River Provincial Government, CMCA and Mine communities.

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Ok Tedi funds not safe: MRDC a milking cow for people in Waigani

O’Neill clears air on K200m mine fund

The National aka The Loggers Times | 18 July 2018

PRIME Minister Peter O’Neill told Parliament yesterday that well over K200 million from OK Tedi Mine is currently accumulating in the Community Mine Continuation Agreement (CMCA) and non-CMCA trust accounts for the people of Western.

He said this in response to questions from Middle Fly MP James Donald on why Government had made a decision to transfer money in the CMCA and the non-CMCA trust accounts to Mineral Resource Development Company (MRDC).
Donald said he was very concerned because MRDC was a “milking cow” for people in Waigani.

“I asked the prime minister earlier on and he had given me and the people of Western province assurance that the funds were in safe hands,” he said.

“An NEC decision in June 2017 has stated that after the audits of the CMCA and the non-CMCA trust accounts, the balance of the funds, will be transferred to MRDC.

“I am very concerned that the prime minister has lied to me and the people of Western.

“MRDC is a milking cow for Waigani people and the funds are now in the wrong hands.”

O’Neill said what the Government tried to do was to correct gross mismanagement and misuse of funds in the CMCA and non-CMCA trust accounts over the past years.

He said hundreds of millions of kina belonging to Western people under CMCA and non-CMCA trust accounts had been mismanaged over the years.

“Those funds have never reached the people,” O’Neill said.

“That’s why we are trying to correct and stop this nonsense going on.

“The government has put a ban on the CMCA and non-CMCA trust accounts and conducted an audit.”

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