Manufacturers Council of PNG positions of Electricity, Highlands Highway, Minimum Wages, Telecommunications

The “Manufacturers Council of PNG - Position” reflects the official position of the Council for the noted subject.  The Council recognises the importance of a collective position on key issues relating to our manufacturing industry.  The Councils position shall endeavour to facilitate a collective voice and action to build and maintain an efficient and competitive PNG manufacturing sector.

Issue – Electricity Supply & Generation

Background

Power is an essential input for manufacturing.  The cost of power in PNG is substantially higher than in our neighbouring nations and even in comparison to our African, Caribbean, Pacific (ACP) partners.  The reliability of supply both in availability and quality is unsatisfactory.  PNG Power is the state owned entity that is responsible sole commercial supplier of electricity in PNG.

The state has a very poor record in both the provision and maintenance of power generation infrastructure and whilst PNG Power has an improvement program in place it has been noted that PNG will not have a sufficient and reliable solution in place for at least three to five years.

There are many impediments to doing business in PNG and each of these impediments increase the costs of doing business.  All of these impediments multiply the cost of conducting business in PNG as each member is affected by the sum of all the impediments. 

Issues

PNG Power is currently unable to provide sufficient power with redundancy (sufficient back up supply when there are outages).  To compensate for this Manufacturers are required to maintain alternative power supply arrangements (generators etc).  In addition to the capital outlay for back-up generators and maintenance the very high cost for fuel makes it very expensive.

The frequency of outages for members is high, over the past twelve months outages occur weekly if not daily.

There is a disparity of power availability between Port Moresby and Lae. It must be said that nationally the affordability and reliability of supply is inadequate, however Lae users are worse off with PNG Power having no redundancy and is only just able to meet the minimum load requirement.

The quality of the power supply is also of concern; the majority of members are required to outlay considerable amounts of money to install their own commercial power regulators to protect their plant from the frequent spikes.

The explanations for the majority of outages is understandable, however it does not alleviate the financial burden placed on members.

Several high energy using Members have entered into arrangements with PNG Power to self-supply throughout peak periods to ensure less outages overall.

Position

It is the official position of the Council that power supply must be readily available, affordable and of a satisfactory quality.

The Council has called upon the Government to ensure sufficient funds are made available to provide and maintain an acceptable baseline of power supply.  Rural electrification is important however it is considered that the rectification of commercial centres power supply must be prioritised.

GoPNG and PNG Power must recognise the contribution that manufacturing makes to the economy, in particular employment and note that the high cost of power in PNG constrains productivity of our Members.  Any options that improve the affordability, reliability and efficiency of power for manufacturers should be investigated and supported by all parties.

Issue – Highlands Highway Network

Background

The Highlands Highway is the generic term of reference given to describe the network of roads that connect a number of highlands and coastal centres. These roads are the main transportation routes for commerce between the majority of PNG’s commercial and provincial centres.

There are many impediments to doing business in PNG and each of these impediments increase the costs of doing business.  All of these impediments multiply the cost of conducting business in PNG as each member is affected by the sum of all the impediments.

Issues

Currently the Highlands Highway network presents major problems to all users. The road network is in a very poor state and is plagued with chronic law and order problems.  The maintenance and accessibility of the roads is severely impeded by landowner issues and the complexities of the management of this infrastructure falling under many levels of government (state, provincial and local).

It is acknowledged that vast amounts of money have been allocated for the maintenance, improvement and extension of the Highlands Highway network.  The combination of poor service delivery from contractors and volume of compensation payouts to landowners ensures that value for money from any funding is seldom evident.

All members that use the Highlands Highway report significant increases in the cost of their operations from theft and delays from the poor conditions of the roads.  It is common for goods to be transferred from truck to truck due to cut-off roads, as well as using door-to-door security escorts.

Not linked directly to the assets, it should however be noted that ongoing increases for the cost of fuel has further increased haulage costs.  The compounding affects of all the additional costs of doing business means that Members have little choice but to pass on the costs.

These issues have been ongoing for a long time now.  The increased costs of doing business causes upward pressures on gate prices and adversely affect both general inflation and the consumers’ purchasing power.

Position

It is the official position of the Council that there is exists a major, genuine need to immediately address and improve the operating efficiency of the Highlands Highway network.

It is vital that the access to Highlands Highway network be unfettered and that the entire network be maintained in accordance with PNG standards for commercial freight roads.  Members of the Council are also strongly encouraged to ensure that their goods are not transported on vehicles that exceed the maximum weights.

The Council encourages any measures to simplify the processes for the improvement and management of the Highlands Highway network and maintains a view that landowner claims should be both legitimate and minimal when claiming against the provision of basic, required public utilities and infrastructure (such as roads, power, water and telecommunications).  Any and all contracts awarded must be done in accordance with GoPNG procedures and roads should be built fit for purpose with the highest of recognised standards.

Issue – Minimum Wage Board Determination (Jan09)

The Manufacturers Council of PNG (MCPNG) has noted with interest the determination of the Minimum Wages Board (MWB) handed down on Friday 30th January 2009.

Whilst the Council and its members concur that a review of the minimum wage rate is long overdue, it notes its concern at the level of the increase (equivalent to 250% on wage cost alone) and the burden this will place on industry in PNG.

Under the Mid Term and Long Term Development Strategies, the Government of PNG has stated its aims of increasing output in downstream processing and value add industries with a view to increasing GDP and employment in the country.

The Council feels that such a substantial increase in the operating costs of businesses will lead to negative economic benefits in the following ways:

1.      Businesses will be forced to rationalise their workforces to reduce the impact of the additional cost leading to higher unemployment especially in the urban areas

2.      Companies currently exporting from PNG will lose competitive advantage due to higher costs, the level of export from PNG is already in decline due to falling global demand for commodities and the impact of the Kina’s strength with its trading partners

3.      As businesses costs rise, it would be not be unreasonable to expect a rise in the costs of goods and services leading to inflationary pressure negating any benefit from the increase in the base rate

In short, it is likely that such a severe increase in the minimum wage rate will lead to lower output, higher unemployment and increased inflation.

As mentioned, the MCPNG agrees that a review of the minimum wage is necessary; however that it should be in line with the economic realities during the current global crisis, and allows all participants in the business sector to gain.

Issue – Telecommunications

Background

Telecommunications refers to the provision of both voice and data services.

Until recently there has been a sole State-owned supplier for telecommunications in PNG, in 2007 the government opened completion in the mobile voice services market.

Landowner issues and vandalism have significantly hindered the State ability to supply reliable and affordable telecommunication services.

There are many impediments to doing business in PNG and each of these impediments increase the costs of doing business.  All of these impediments multiply the cost of conducting business in PNG as each member is affected by the sum of all the impediments.

Issues

The cost of voice and data services in PNG is acknowledged as being as one of the most-expensive in the world.  The introduction of competition in the mobile voice segment has brought about large cost savings; this has however been of limited benefit to most businesses due to their being no interconnectivity between carriers.

The quality of the state owned voice and data services has been severely unsatisfactory; the network suffers frequently from congestion and outages.

In terms of data services GoPNG officials recently announced that PNG was in the top 5% of the world of most-expensive data services, and it should also be noted that transfer speeds well below international standards.

Businesses and individuals are currently severely impeded by the quality, reliability and affordability of telecommunications.

Position

It is the official position of the Council that telecommunications must be readily available, affordable and reliable.  The Government must quickly address interconnectivity problems, and ensure that government policy does not hamper any improvements to the access of affordable and reliable telecommunications.

The Council notes the tremendous problems with vandalism to the networks and supports the strengthening of law enforcement agencies and judicial system to manage this problem and maintains a view that landowner claims should be both legitimate and minimal when claiming against the provision of basic, required public utilities and infrastructure (such as roads, power, water and telecommunications).

The Council is disappointed that GoPNG did not adequately consult stakeholders before endorsing the ICT Bill.  It is the view of the Council that the Government should actively seek and consider the views of the private sector when formulating policy, in particular policy that is tied directly to the effectiveness and profitability of businesses.

The Council shall accept GoPNG positions that endeavour to provide reliable, affordable telecommunications, and asks that GoPNG recognises that expensive and unreliable voice and data services restrict businesses.

 

Manufacturing sector in Papua New Guinea moves forward

By CHEY SCOVELL
CEO
Papua New Guinea Manufacturers Council

The manufacturing sector in Papua New Guinea continues to strive forward making valuable contributions to the ongoing socio-economic development of Papua New Guinea and the private sector growth. 
Major reform initiatives such as SME policies, tariff reforms reviews and regional agreements have assisted in the expansion of the Manufacturing sector in PNG and continues to offer the opportunity to replace imports of consumer goods and services. 
The recent signing of the interim Agreement with the European Union paves the way for opportunities to export product to the EU states, quota and duty free.
The Manufacturers Council is a non-government organisation, which was formed in 1991, to promote the Manufacturing and downstream processing sector within PNG. 
The Council provides a wide range of services and assistance to existing and potential manufacturers in the country and sees its role towards its Members as threefold: Promotion, Assistance, and Information. 
The Council also provides an input conduit between the private and public sector.
The Council works closely across business sectors and government to promote and strengthen manufacturing industries in PNG. 
The Council influences change through its work in state economic committees such as the Impediments to Business and Investment Committee and National Institute of Standards and Industrial Technology, WTO and various ICCC sub-committees.
Whilst maintenance of public infrastructure (roads, power and telecommunications supply) law and order and the increased cost of input materials (generally as flow-on impacts from high oil prices to the ongoing drought in Australia, and regional exchange rate movements) continues to place additional constraints on PNG Manufacturers, they continue to supply markets and capture new ones.
PNG is a developing economy and is growing at a steady rate, supported by the resource sector (such as mining, oil and gas).
 Despite growth constraints PNG Manufacturers have continued to improve export opportunities and grow at an average rate of 6.5% per annum over the last 10 years. 
The manufacturing sector has continued to employ approximately 25% of the private sector formal workforce in.
PNG’s export strength lies in our ability to competitively convert home grown raw materials into finished products (competitively meaning, to be able to produce a like good or product for less than our competitors).
 The Council is committed to ensuring its members obtain the maximum tariff exemptions on goods and material imported into the country, for genuine manufacturing purposes. 
This is seen as being of enormous benefit, not only to the manufacturing industrial sector, and equally important, to all consumers of PNG-MADE products.
 In addition, the Council deals with other private sector organisations, in negotiating prices for the industry, in the supply of goods and services.
The Council works towards improving the standard of products made in Papua New Guinea.
The PNG-MADE logo was launched in the 1990’s, to promote PNG-MADE goods in the local and export markets.
The logo was established in order that these products are competitive and that there be instilled in all citizens, a sense of pride to see the words MADE IN PAPUA NEW GUINEA, on items for sale throughout this Nation.
For further information on becoming a member of the Manufacturers Council of Papua New Guinea, contact the Chief Executive Officer on (675) 321 7143.

French firm poaches and patents PNG's 'Bilum'

A French firm has poached and patented the Papua New Guinea bilum, causing a stir on the internet among Papua New Guineans.

The issue was first highlighted by Papua New Guinea blogger Tumbuans & Dukduks on his site http://garamut.wordpress.com/, provoking an outrage among Papua New Guineans about the iconic bilum, which has been developed through centuries of trial and error.

One outraged reader went as far as calling on the National Cultural Commission to begin intellectual property registration of PNG names.

 “Yes, it’s true,” Tumbuans and Dukduks wrote.

“And the name of this particular French firm - well, have a guess!

“The firm has decided to call itself Bilum and you can find their website here, http://www.bilum.fr/. 

“Bilum - the French firm - makes bags and accessories using recycled advertising banners.

“Every one is unique, because the material comes from the giant advertising hoardings that you are found on buildings undergoing work, department stores, and on the outskirts of large cities.

“The French brand – yes, it is now a ‘French brand’ - uses recycled car seatbelts as handles and straps for its designs.

“The most ironic thing about this French firm is that it labels its’ creations as ‘eco-ethical fashion’ and it even entered the 2008 Ethical Fashion Show.

“I can accept the ‘eco. and the ‘fashion’ - but how in the world can it be termed ‘ethical’ when its commercial brand is a poached national cultural-identity unique to Papua New Guinea?”

The Treehugger website wrote an article on this URL http://www.treehugger.com/files/2006/05/paris_shopping.php  highlighting Bilum’s bags on the Paris shopping scene and a couple of Papua New Guinean friends and expatriates have already voiced their concerns.

The following is a comment from Rick Brittain, a Cairns’ expatriate who works in PNG:

“My original concern was that the name ‘bilum’ has basically been monopolised now, internationally, and has been removed from its PNG roots.

“I actually met with Helene (owner of Bilum) earlier this year, and found out that the company she operates is a predominently non-profit, recycling centre, using people with special needs to manufacture her bilums.

“Good luck to her, and I have no problem with that, and she is a genuine lady with genuine concerns for our planet.

“I donated a couple of PNG bilums for her use, and she reciprocated with her bilums, which are certainly unique…but not genuine bilums as anyone who has spent time in PNG will tell you.

“You cannot mimic culture…it’s developed through centuries of trial and error”.

The author of Tubuans & Dukduks said he had somehow managed to keep his emotions under control for the duration of the penning of this post.

“But I will say say this: Paia bilong mi em i dai nating (my flame has gone dead),” he added.

“I will be sending Bilum - the French firm -  an email detailing my deep concern about the blatant poaching and patenting of PNG’s name and product - bilum.

“So too can you.

“Here is their email address: contact@bilum.fr.”

 

WACC annual photographic competition launched

 The WACC Photographic Competition 2009 has been launched. The competition is being run on Flickr.

 

This year’s theme of the competition is “portraying gender”.  Photographers are invited to submit photos that portray women or men in ways that offer new perceptions about their roles and responsibilities. Such photos challenge conventional understandings of ‘femininity’ and ‘masculinity’ and help break the mould of the male-female ‘divide’.

 

Photos must be must be loaded on flickr.

 

Winners of the competition will be awarded cash prizes. There will be one first prize and five commendations. The first prize is $500 and each commendation will be awarded $200.

 

The closing date is 1 May 2009. The competition winners will be announced later in May. Read more about the competition.

 

This popular event brings together hundreds of photographers from around the world with each photo on the subject of communication. Last year’s theme was Women’s communication rights. The winning photo was submitted by Leslie Knott. It presents a journalist in Maimana, Afghanistan conducting an interview for her program on agriculture on Radio Quyaash, an independent women-managed radio station.

 

http://www.waccglobal.org/lang-fr/component/content/article/1552-wacc-annual-photographic-competition-launched.html

 

 

Bee mite continues to rule hives

The Highlands Farmers and Settlers Association has refuted claims by James Watson of Goroka-based New Guinea Fruit Company on the absence of the bee mite disease in Papua New Guinea.

Secretary Wilson Thompson and Eastern Highlands Beekeepers Association president Jonah Buka said the Asian bee was the natural host of the mite, was now in the country, and the colonised European bee was now becoming the alternate host.

“We have seeen that the bee mite has affected actual colonies in Goroka and Daulo districts in Eastern Highlands province,” they said.

“This was reported to the National Agriculture Quarantine Inspection Authority to independently verify a Department of Agriculture and Livestock report.

“NAQIA confirmed the impact and destruction of bee colonies in other districts of Eastern Highlands.

“A training workshop was organised in Goroka and more recently, last December, another was held at Aiyura, comprising DAL, NAQIA, National Agriculture Research Institute, Highlands Farmers and Settlers Association, Eastern Highlands Beekeepers Association and Australian Centre for International Agricultural Research on how to address this issue.

“We have, through the leadership of the Highlands director of DAL Mawe Gonapa, established a regional task force on the disease and its impact.

“Mr Watson, being a major bee farmer and buyer of honey, should just these groups and talk about how to address the problem rather than claiming that it does not exist.

“If the mite does not exist on his bees, as he claims, then he must come out and show us how he is doing this, so that other farmers can apply his techniques.

“It has been confirmed that the disease has taken its toll on honey production, hence, the price per kg has risen from K7 to K10.”

Mr Thompson and Mr Buka commended DAL, NAQIA, and NARI, who have allocated resources, together with partner organisations, to conduct awareness, training, surveillance and research into this problem.

This is particularly in regards to the impact of the bee on introduced crops such as coffee, cocoa, copra, palm oil and pyrethrum.

 

Sorcery accused father 'still alive'

By ANDREW ALPHONSE

A LOCAL councillor yesterday said one of the men who was reportedly burnt to death over accusations of practising sorcery at Ban village outside Mt Hagen, Western Highlands province, on Sunday afternoon is still alive, The National reports.

Cr John Rok of the Moge Kimininga tribe, Ban village, who claimed he witnessed the incident, said only the son was chopped to death and his house set alight while the father survived despite being chopped in the back and on his hip.

The National yesterday reported that both victims were killed and burnt.

Cr Rok told The National yesterday that the old man was fighting for his life at the Mt Hagen General Hospital while the body of the son was at the morgue.

He said the villagers brought the wounded father and his son’s corpse to the hospital late at night after police, fearing repercussions, did not attend to the crime.

Cr Rok claimed that about 400 villagers were involved in the incident following the death of a community leader last month.

He said bush knives and axes were used in the attack, and not guns as claimed by police.

According to Cr Rok, the father and son had continuously postponed a community “hearing” to resolve the death of another man.

Angered, the villagers decided to act against the pair, leading to the attack, he said.

Cr Rok said he tried to intervene but was “outnumbered and overpowered” and could not save the two men.

He said he would assist police with their investigations.

Meanwhile, Archbishop Douglas Young of the Catholic archdiocese of Mt Hagen yesterday described the killing and attack on the two men as “senseless and ridiculous”.

Archbishop Young said such barbaric killing was not the right way to seek justice, especially in a civilised society where rule of law and respect for human life should prevail.

He said even if someone was guilty, they must be proven guilty or innocent in a court of law and not through tribal justice.

Archbishop Young also said that police, due to lack of logistics and manpower, also contributed to such incidents because people were no longer looking to them as agents of Government to protect lives and properties.

 

Governmentt will know LNG project status by September

By MADELEINE AREK

THE Government should know by September whether or not it has secured the US$12 billion (K34 billion) liquefied natural gas project, according to Deputy Prime Minister and Minister for Lands and Mining Dr Puka Temu.

In-country, relevant Government agencies were finalising the benefits sharing arrangements with the project’s stakeholders to ensure everyone knows and is aware of the arrangements before the project is finalised while, externally, project operator Esso Highlands Limited is negotiating market arrangements.

PNG is targeting the Asian market particularly the Japanese, Korean, Chinese and Indian markets, where the development requirement for energy is very high and expects to sell it at a premium price.

“What we are doing right now is sitting down with the landowners to arrange benefit sharing arrangements so that landowners are part and parcel of this big project in the country,” Dr Temu told a large crowd of people in Buka last Friday.

“We are also, through our joint venture partners around the world led by ExxonMobil, negotiating markets and are going to lock them in for 30 years,” he said.

“Once we secure the project in September, the first shipment will leave our shores in 2014 for Japan.

“That means by 2025, our 50th Independence anniversary, PNG will be close to doubling or even tripling its GDP.

“That means that we will have more money in our system to move the nation forward and become one of the best developed nations in the world,” he said.

Dr Temu also told the people of Bougainville that the Government had secured its K1.2 billion equity in the project and was waiting for the rest of the project partners – Esso (32.9%), Oil Search Limited (28.7%), Santos Limited (13.7%), AGL Energy Limited (3.6%) and Nippon Oil Exploration Limited (1.7%) – to secure theirs.

Two weeks ago, representatives of some of the world’s export credit agencies came to the country on a due diligence visit, to see whether they would support the LNG project, whether politics in Papua New Guinea was stable, whether landowners would support the project and whether there was anything they could learn.

He said the Government was confident that these visitors had left satisfied.