Wednesday, September 18, 2013

PNGSDP slams O'Neill announcement: OTML takeover amounts to theft

The chairman of PNG Sustainable Development Program Limited, Sir Mekere Morauta, said the decision by the Prime Minister to expropriate Ok Tedi Mining Limited without compensation was "nothing more than stealing an asset belonging the people of Western Province.
Sir Mekere Morauta

"Those shares are owned by the people of Western Province, not PNGSDP. PNGSDP is merely the custodians of them.
"The Prime Minister is legally and morally obliged to pay a full and fair price if he is so determined to get his hands on them."
Sir Mekere said PNGSDP would do everything in its power to prevent expropriation without compensation, and was ready to take legal action if Mr O'Neill brought this dangerous legislation to Parliament.
The company would stand with the people of Western Province, especially the communities affected by mine operations and landowners, who have voiced their strong opposition to the Government's plans.
"PNGSDP has a duty to protect Western Province people's assets, and will do so with all necessary legal means," Sir Mekere said.
"Stealing an asset worth approximately K2 billion to the people of Western Province, plus their annual K450 million share of the Ok Tedi dividends, is not acceptable legally or morally. It is unconstitutional as well.
"I also fear that this is just the first step - I hope he dos not want to get his hands on PNGSDP itself and the $US1.4 billion in the Long Term Fund."
Sir Mekere said he was shocked by the Prime Minister's announcement of the expropriation on EMTV last night. He had spent the past six months trying to negotiate with the PM for a fair deal on the Western Province's 63.4 percent shareholding held by PNGSDP.
He was aware that many MPs were concerned by Mr O'Neill's decision, which had been taken in isolation and against the recommendations of some of his most senior and respected advisors.
Sir Mekere said Mr O'Neill's criticism of PNGSDP's record on sustainable social and economic development were nonsense - PNGSDP's had spent approximately K1.18 billion on more than 600 sustainable social and economic development projects since it began operations in 2002.
"Compare PNGSDP's commitment to development of Western Province with the achievements of the national Government," he said. "The national government has done very little for Western Province with the $US3.8 billion it has received in taxes and dividends from Ok Tedi.
"Where has that money gone?  It has been wasted, mismanaged and misappropriated and PNGSDP has been left to do things that are rightfully the responsibility of the Government. Just imagine what will happen if the Government gets its hands on the PNGSDP dividends and the $US1.4 billion in the Long Term Fund.
"That money is to be used for development for 40 years after the mine closes."
Sir Mekere said PNGSDP had been an efficient, responsible, transparent and accountable custodian of Western Province's assets, and compared its performance with the Government's record in business and financial management.
All the value in the Tolukuma mine was destroyed when it was put into a State-Owned Enterprise and came under political influence. Other SOEs were struggling under the same burden - power supplies and water and sewerage systems across the country are totally inadequate. The delivery of essential services was bad and getting worse.
"The risks of turning OTML into an SOE far outweigh the benefits. It would destroy the mine and threaten the future flow of dividends and consequently the future development of Western Province.
"Now is not the time for the Government to be making this decision when reliable sources estimate that AT LEAST billions of kina has gone missing from Government coffers in the last few years:
o    Mr Sam Koim, head of Operation Sweep, estimates that almost half of the annual development budget between 2009 and 2011 was stolen –this amounts to approximately K3.5 billion.
o    The O'Neill Government's own Minister for Works and Implementation, Mr Francis Awesa, estimates that K9 billion seems to have disappeared from government-held trust accounts between 2007 and 2011."
Sir Mekere also said expropriating a privately-owned asset with no compensation sends a very bad message to the world.
"The international perception will be that no company's asset or investment is safe, that PNG is not a good place to invest."

Mekere Morauta KCMG

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