Tuesday, June 21, 2011

Basil asks: How is the State protected in terms of disputes arising out of resource projects?

Mr. Speaker,


I would like to direct my question to the Minister for Justice & Attorney General Honorable Sir ArnoldAmet,  Governor of Madang Province.

 Mr. Speaker, we are experiencing unprecedented resource sector boom and this government is signing agreements with foreign companies left-right-centre.

 Whilst we appreciate the benefits that the projects are generating, we also have to be mindful of the legal implications of the kind of agreements that the State is committed to.

Can the Justice Minister and the Chief Legal Advisor to Government tell this house how the State is protected in terms of dispute arising out of these projects?

 Mr. Speaker, the former Minister for Justice, Dr Allan Marat denied perusing through the full contents of the LNG agreement with the developers such as Exxon Mobil.

Up to this day, no one had seen the contents of the initial agreement, including myself.

This Parliament was and is led to belief that everything is okay, carried away by the promise of the unprecedented wealth.

 However, what is apparent now is that the LNG agreement was rushed through without proper consultation and meaningful involvement by the parties.

 Can the Justice Minister confirm or deny that there are 60-70 cases involving the LNG project are pending in the National and Supreme Courts and if so, does this confirm of a rushed agreement.

 Can the Justice Minister assure this Parliament and the people of Papua New Guinea that the LNG Project agreement as well all other recent agreements by this government, have in the agreement a clause for the PNG laws to apply when there are disputes between the State and the Developer?

 Mr. Speaker, we have learnt the Sandline Crisis case where the law to be applied to resolve the dispute was not the PNG laws, hence the State was ordered by an arbitration which was held in Queensland Australia where the State was ordered to pay US $18 million plus interests.

 Also, is it not true that Downer Construction Arbitration regarding the breach of contract over the Ramu-Madang road was conducted in Australia using Australian laws and that the State has to pay around AUS$35million (equivalent to K100m) of which around AUS$7million had been paid early this year.   

 Given those examples, Mr. Speaker, can the Minister for Justice assure this Parliament and the people of PNG that the contractual arrangements that this government is entering into have a clause in the choice of our national law?

 Can the Minister for Justice assure this Parliament that in his capacity as the Chairman of the Judicial & Legal Services Commission and the Minister responsible for Justice, he is ensuring that developers have confidence in our judiciary system when it comes to the preference of laws to apply?   

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