The Kitoro
PNG is not Pasifika – we are not so much of the ocean

Will project reviews mean more benefits for PNG landowners?

Mcc-basamukSCOTT WAIDE | Asia Pacific Report | Edited

LAE - Just into the fourth month of 2019 and resource projects in Papua New Guinea have come under scrutiny.

Early last month, senior government ministers, including petroleum minister Fabian Pok, travelled to Komo in Hela Province for meetings with landowners of the liquefied natural gas project.

After 15 years, there is some progress in negotiations, or at least that’s the positive spin to it.

There appears to be some indication that royalties locked away due to legal battles and entangled in bureaucratic red tape is going to be paid – but only after landowner’ identities can be reliably established.

Finance minister James Marape told the media three months ago that K300 million is parked in PNG’s Central Bank ready to be released. But landowners, or people claiming to be landowners, must follow a process of “landowner identification” if they are to be paid the money.

So there is some hope of an end to the long-running disputes. However, the final settlement remains a long way off. That’s the reality. Many of the elders have died awaiting the royalty payments they were promised.

Since Hela became a new province, there’s still a lot to be ironed out. The provincial government has to work its way through layers of bureaucratic processes that continue to favour the Southern Highlands in terms of royalty payments from the gas project.

Understanding the complexities of Hela’s resource project means going back some 20 years when oil extraction ended and the promise of Papua New Guinea becoming the Saudi Arabia of the Pacific faded.

It is against a similar backdrop that neighbouring Enga Province is looking at renegotiating operations at Porgera mine through the warden’s hearing required for reopening after the end of a mining lease.

Landowners and the Enga provincial government are looking at a bigger slice of revenues and benefits.

What did they get over the last 30 years? Well, that’s a point of contention for both pro-mining and anti-mining camps.

Visible to the international community have been the campaigns against alleged atrocities committed against local people in Porgera and the desperate push by the people to get what few crumbs they can from a mine that has existed for so long on their land.

For the first time in more than three decades, it appears the national government is speaking a different language: One that calls for greater benefits into both government coffers and landowners’ pockets.

This rhetoric has come after 30 years of gold extraction, 500 shipments of liquefied natural gas and billions of dollars of round log exports.

In Lae, during the opening of the Central Bank’s currency processing facility, deputy prime minister Charles Abel talked about a production-based tax, instead of a profit-based tax, for resource projects signed from 2019 onwards.

The thinking of the national government is that a profits based tax can be deceptive, leaving the government with little to collect if a mining company declares losses or breaks even.

A similar process is happening in Madang. Triggered by an agreement between Chinese and PNG governments, Ramu Nickel’s expansion is also the subject of discussions between the government and the resource developer.

The processes are long and the risk is that, without proper representation, landowners may be left with another raw deal for several more decades before another opportunity for renegotiation presents itself.

Scott Waide’s blog columns are frequently published by Asia Pacific Report with permission. He is also EMTV deputy news editor based in Lae


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Paul Oates

Good heavens. Has Mr Marape been reading this blog today and decided to take precipitate action?

Paul Oates

Everyone who is involved with this dilemma has a fair idea what the problem is. It has increasingly developed into the classic gunfighter scenario of 'who blinks first?'

European nations sorted this out some time ago by legislating that natural resources in and on the ground belong to the State. The income or royalties then are distributed to the rightful owners via government services.

There are other methods of establishing ownership of natural resources however. In the USA, landowners can directly benefit but then pay tax on the revenue.

The real issue is what comes first? The revenue stream or the process of determining who gets the loot? In this case, the loot has arrived before the process was formally sorted out and agreed. Greed has then raised its head in no small way.

The inevitable result is that political leaders are prone to keep putting off the inevitable dispute while ever they can in order not to get caught up in the inevitable fracas.

The longer that battle goes on, the worse it will get and the more confused it will get. Disputes like this can lead and have led to civil war.

It is impossible to deal coherently with a mob. All that leads to is mob rule and disaster. Representatives of each claimant need to meet and agree on a solution yet in PNG politics, who will accept an agreement that everyone personally has not shared a part of?

Even if there is a PNG traditional talk-fest, would those who take part agree beforehand, to accept a consensus? With potential millions on the table (or in the proverbial bank account), money for jam appears too good a prize to let go of any part of it. Prestige and standing is just as important as the eventual prize.

The classic issue of traditional PNG consensus versus representative leadership is one that will be continuously played out until PNG finds her own way through this morass. I'm surprised some haven't yet thought about blaming Australia for not changing the PNG customs when it had potentially the chance?

When visiting India a few years ago we were told that India's traffic chaos was entirely due to the British who designed the roads and roundabouts. That is true but the designs were done to suit horse drawn traffic and over a century before modern road users had to be considered.

No one ever said governing a nation was ever going to be easy. The real problem is that so far, the belligerents have been played off against each other. If real leadership actually arises and is able to promise believable results, lookout the rest of the country. There won't be any stopping the movement once it begins.

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