BHP urged to hand over control of development firm

Radio Australia

PETER O’NEILL, THE PRIME MINISTER of Papua New Guinea, has demanded that BHP Billiton give his government control over board appointments to the PNG Sustainable Development Program Ltd.

It is ten years since the mining and petroleum company left the country and gave its shareholding in the giant Ok Tedi gold and copper mine to the people of PNG.

But BHP retained the right to appoint three of the seven board members of PNGSDP - the vehicle for the PNG people's shareholding.

PNGSDP, a Singapore-based company, is independent of the PNG government and has assets worth $1.4 billion.

Its development program includes everything from roads, wharves and airstrips through to health and education programs, as well as providing help for small business.

Peter O'Neill told Radio Australia it is time for BHP Billiton to take a step backwards.

"I think BHP should take its leave at some stage. I'd rather it be sooner than later. BHP has to learn that it has to move on," he said.

"Papua New Guineans are now capable of managing their own affairs. We don't need affairs to be managed on our behalf from Melbourne.

"We believe it is time that after 10 or 12 years of Sustainable being in operation they relinquish the management to a Papua New Guinean-based, Papua New Guinean-run organisation."

BHP Billiton has not responded to Mr O'Neill's comments but in a statement it said the results achieved by PNGSDP to date reflect very well on the board and all directors in the past 10 years.

It said any changes to the governance arrangements should ensure the ongoing sustainable performance of the company.

PNG-based writer Martyn Namorong is one of many Papua New Guineans who agree with Mr O'Neill that it is time for BHP Billiton to hand over control of its PNGSDP board positions.

"There are enough skills and experience in PNG for Papua New Guineans to be greater involved. And that's sort of a natural follow on from the fact that the mine and the shareholding is now PNG-focused," he said.

"There are some very decent people around and they can take up those roles. They are just not given the opportunity to do that."

Comments

[Phil Fitzpatrick]

Here's another idea.

Why not hand the government of PNG over to PNGSDP?

I'm sure that they could run it quite efficiently from Singapore.

That would allow all the politicians to go home and do good works in their villages.

[Jeff Febi]

Oh no...not just yet! PNGSDP has done well; actually really well.

If the government wants total control to be in the hands of PNG nationals, then it must show how this arrangement will minimize or totally block political influence and or interference at board level.

Even when we have supposedly highly qualified PNG nationals at, for instance, Petromin and other SOEs, we still have a high incidence of inefficiencies and abuses depicting the 'no care attitude' typical in the public service's higher echelons.

Why change something which is working well and with something that may not work just as well.

This needs to be carefully studied and approached so as to find a good way to bring about a change that can work for PNGSDP.

[Andy McNabb]

Don't mention the National Superannuation Fund affair. Where is Jimmy Maladina these days?

Thanks Rod Mitchell for saving the savings of contributors.

[Max Aitken]

The politicians and Waigani bureaucrats having been trying for several years to get their snouts into the PNGSDP trough.

If they succeed, there's a high risk that the coffers will be effectively looted and wasted within 3 years.

I'm sure current governance structures could be improved and I'm no great fan of BHP, but great care should be taken to ensure PNGSDP's ongoing independence from from the overt political pressures that adversely impact most government controlled agencies in PNG.

For those interested, there's an external review of PNGSDP operations available on their website.