Ex prime minister fights for resources

By JEFFREY ELAPA of The National
“TODAY, I propose to transfer wealth to resource owners, to those simple villagers who are blessed with owning a piece of inherited customary land, many of whom remain poor – so they too can enjoy a worthwhile, more satisfying life.”
So saying, governor of New Ireland and former prime minister, and one of the longest-serving parliamentarians, Sir Julius Chan yesterday proposed before a parliamentary committee to turn the mining, oil and gas extraction regime on it head.
He proposes, among others, to:

*Wrestle ownership of minerals and oil and gas back from the state into the hands of customary landowners;

*Devolve resource development powers to the provincial governments;

*Have local companies be licensed to explore and develop mineral and oil and gas resources with management rights extended to foreign firms if no expertise is found onshore; and

*Streamline existing state agencies into two so that one engages in exploration and extraction activities and another being an investment house.

Sir Julius, who moved a motion on May 14, 2009, for a comprehensive review of the Mining Act of 1992, said in a hard-hitting presentation that PNG was a country in “crisis”.
“If we do not correct some serious faults and failures in the way we approach the extraction of resources such as minerals, gas and oil, we will not only continue to fail to deliver progress to our people but will put the very survival of our country at peril.”
He said history had shown that resource-rich nations like PNG did not often do well while resource-poor countries like Singapore and South Korea do very well indeed.
He said this was because of the effects of the “resource curse” linked to resource developments, which drive up the cost of doing business in the country so that all other sectors of the economy suffer while only the resource sector prospers.
While the “resource curse” could be beaten, as had been experienced in other countries, it could only happen in PNG with a quantum shift in the way the resources sector was managed from the legal and policy framework up, Sir Julius said.
He said the past ad hoc and project-to-project approach should be reviewed so that resource landowners and the provincial government take ownership of their resources.
He blamed the current regime on no particular PNG administration but on a historical accident where PNG had inherited an Australian colonial legislation that discriminated against and took ownership of minerals and hydrocarbon resources from landowners and vested it in the administration, later the national government.
From then on, he said, it was “a story of ineptitude, ignorance, robbery and deceit”.
“It is shocking such a story can be told; even more shocking that it is the truth. But, it is the truth.
“We – the state, the people – have been duped. I know it is uncomfortable, but we must face the truth.”
Sir Julius, a former prime minister and the minister for finance, said ownership of the resources by the landowners was important for the equitable distribution of benefits.
He said PNG had been described as a “mountain of gold floating on a sea of oil”, but the truth was that the wealth of the nation was squandered and, in so doing, condemned our people to poverty while others prospered.
“Without mincing words, our country has been systematically giving away its birthright.
“That is not rhetoric; it is literally true.
“We may be pardoned for this at self-government, at independence but, after 35 years, we should have matured.
“The national government either does not understand or does not care that the way it has structured the minerals, oil and gas industries – indeed, the entire renewable and non-renewable resource sector, including fisheries and forestry – is not only wounding the people of this country, it is robbing the state of what should be its legitimate incomes for the development of the country.
“How has this happened?
“Put politics aside. We need to take a bi-partisan approach to correct our mistakes.