Tuesday, May 29, 2012

Resource benefits remain big challenge for PNG

By MALUM NALU
The key resources issue in PNG today is the challenge in converting benefits into real and tangible improvements in the lives of everyday citizens, according to the PNG Chamber of Mines and Petroleum, The National reports.
This is the industry view on the current Mining Act and the proposed Mining (Amendment) Bill being mooted by North Fly MP Boka Kondra, and most recently Western province Governor Bob Danaya.
Chamber executive officer Greg Anderson said its stance was related to the growing corruption and mismanagement issue which could only be addressed through increased governance and transparency
Greg Anderson
“Changing ownership will not address this problem,” he said,
“It requires a fundamental shift in the way that governments and landowner leaders manage, utilise and distribute resource benefits, and the way they report on this to their respective constituents.
“It all comes down to effective management, transparency and integrity, and a dedication to serve the people.”
The chamber said the current Mining Act:

• Ensured that the development of extractive resources was for the benefit of all citizens, now and in the future;

• Ensured that the state issued exploration and production licences over extractive resources so they were managed in an effective and orderly manner that was recognised internationally and accepted by the investor.

• Ensured security of tenure for the investor; and

• Set the framework for PNG’s benefit sharing system which was one of the most-equitable in the world for mining and petroleum developments.

The chamber said the Mining (Amendment) Act:

• Transferred mineral and petroleum ownership from the state to the landholders;

• Introduced a totally new fiscal and legal system overnight without any consultation with industry or government agencies, including Mineral Resources Development Company which was to be abolished;

• Prevented the state from playing any meaningful role in the process of exploration and development which would become a private arrangement between the developer and the landowners;

• Further eroded the role and value of the state to its people ;

• Would result in loss of security of tenure for the explorer and developer because of the uncertainty of dealing with a tenement system that relies on the stability of landowner groups which makes it impossible for the resource industry to operate;

• Would prevent any developer or investor raising finance in the international markets as the only security the investor could offer would be a contractual agreement with a group of landowners or a landowner company which could be unstable or volatile;

• Created enormous inequalities between the very small number of fortunate landowners who happened by chance to have an extractive resource beneath their land and the rest of the nation; and

• Greatly increased the likelihood of social tensions and landowner disputes because the rewards for the lucky few would be greater.

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