Abal explains MoA policies

By RONALD BULUM and GABRIEL LAHOC

 

ACTING Prime Minister Sam Abal yesterday said that legacy funds arising from MoAs with landowners of resource projects had to be administered properly, The National reports.

“To ensure it is paid – and paid properly – the money is put through an efficient process,” he said at the Lae International Hotel.

Abal was referring to a National Court order issued on Tuesday for him and Finance Minister Peter O’Neill to review the 1996 MoA between the state and Kutubu landowners of PDL 2.

PDL 2 landowners, including former Southern Highlands governor Hami Yawari, had applied and been granted orders to prevent Abal and O’Neill from putting landowner grants into the Mineral Resources Development Corporation (MRDC).

He said MRDC would then administer the grants to the landowners.

He said cabinet had approved K100 million for MoAs.

Not wanting to be caught sub-judice or in contempt, Abal said he respected Justice Ambeng Kandakasi’s order but added that there should be room for mediation outside of court.

He said government lawyers were looking into the matter.

He said when the MoA was signed, “it was for oil, not gas”.

But, when the Porgera gold mine needed gas for power, “some of it was supplied while the rest was burnt”.

He said the agreement was for the extraction of oil because high world demand had increased its price.

“That agreement for oil cannot be equated with those for the gas landowners,” he said.

Abal said he was trying to deter “the wastage of money by landowners”.

“When money is paid into a proper system, the benefits are better,” he said.

The Wabag MP said he personally took up the matter this year, but asked for understanding as he could not “do miracles”.

“The government is not here to approve cash deals going out, as we will always have landowners turning projects into cash deals,” he said, warning that with the general election next year, the government did not want funds to be abused and that leaders should cooperate with the government.

Abal was in Lae for the opening of the mid-year review of the Crowne Plaza Pronouncements.

 

IMF: PNG suffers from poor governance

PAPUA New Guinea has enjoyed a decade of solid economic growth but suffers from week infrastructure and problems with governance and crime, the International Monetary Fund (IMF) has reported, The National reports.

Following a May 18 visit to the country, the executive board of IMF concluded that the solid performance was supported by greater political stability, a sound fiscal framework, and a healthy banking sector.

Despite its commendable performance, PNG remains “a low-income country highly exposed to commodity price fluctuations”, the IMF said.

The report stated in part: “The economy has weathered the global recession relatively well and real GDP growth is estimated to have picked up from 5½% in 2009 to 7% last year.

“Higher commodity prices and the construction of a liquefied natural gas production facility (LNG) – a 190% of GDP project – have boosted the economy, while banks continued to provide finance, and agriculture production rebounded.

“However, the country’s infrastructure–roads, ports, and utilities–has shown signs of capacity constraints, and bottlenecks have appeared in the markets for skilled labour and land.

“Inflation has reached 7.8% at end-2010 and is increasingly driven by domestic demand.

“Higher commodity prices boosted revenues last year, at the same time spending from off-budget accounts slowed.

As a result, after the deficit had reached 9½% of GDP in 2009, a balanced budget was almost achieved in 2010.

“The Bank of Papua New Guinea has kept the policy interest rate at 7% since end-2009.

However, monetary conditions loosened as short-term interest rates declined to around 3% and the nominal effective exchange rate depreciated by more than 7% in 2010.”

Banks, although well capitalised and liquid are vulnerable to a possible correction in property markets, the IMF said.

Although commodity prices and exports recovered in 2010, the current account deficit has widened to 24% of GDP.

It was, however, largely financed by foreign direct investment related to the LNG project.

External debt declined to about 11% of GDP last year.

The IMF directors considered the near-term outlook to be generally favourable but encouraged the authorities to consider tighter macroeconomic policies in the face of rising inflationary pressures.

“Over the longer term, it would be important to reinvigorate structural reforms to support the development of the non-mineral sector, while ensuring effective use of mineral resources to sustain economic growth and raise living standards,” the report states.

The directors stressed the need for tight fiscal policy during the construction phase of the liquefied natural gas plant.

They welcomed the agreement on a balanced 2011 budget and recommended strict adherence to budget allocations and the limit on trust account spending.

The IMF advised that it would be prudent to save windfall mineral revenues and use part of such resources to reduce government debt.

Further the directors welcomed the government’s plan to manage resource revenues through a sovereign wealth fund (SWF).

They stressed that the SWF should be well governed and adhere to the Santiago Principles to ensure effective management and use of the resources.

They considered it important to integrate use of the resources in the SWF into the budget and macroeconomic framework.

 

Touch of Papua New Guinea

Pacific Partnership 2011 mission commander Capt Jesse Wilson (of the USS Cleveland) is given a last PNG traditional escort by a young highlands lass as he marches up to the podium for his final remarks about services provided to help improve the quality of life in Lae city, The National reports.

The US mission crew was in the Morobean capital for the last two weeks, providing humanitarian services to about 11,000 people.

They were farewelled at a closing ceremony at Igam barracks yesterday.

 

PNG ratifies interim EU pact

PAPUA New Guinea  has ratified the interim economic partnership agreement (IEPA) with the European Union (EU) giving effect to the full application of the partnership agreement which has been on a provisional basis, The National reports.

Minister for Foreign Affairs, Trade and Immigration Don Polye’s intervention for the parliament to waive the normal 10-day requirement for ratification process was granted last Tuesday.

Polye thanked the members of parliament for the foresight and cooperation to enable the legislative process to be secured which he said would ultimately benefit the people.

Polye said the government had achieved another historic milestone in its diplomatic relations to generate maximum impact and benefit for the people in the conduct of its relations with the EU.

“I am very satisfied that the MPs have given me the required support to meet our legislative requirements to effect this contractual obligation on our part as the European parliament had met its legal obligations in January.

“I had, therefore, sought parliament waiver of the normal 10-day requirement for ratification process for the interim EPA, between the Pacific Islands and the European Union ratified without delay. I am happy that parliament has granted its approval,” Polye said.

He said PNG signed the interim EPA in 2007 to continue to protect the preferential access for our substantial export interests of fisheries and other marine products, palm oil, cocoa, coffee and rubber to the EU markets.

He stressed that PNG-EU relations over the years had been governed by a series of conventions between the Africa, Caribbean and the Pacific (ACP) states and the European Union. 

The current convention is known as the Cotonou convention.

“These conventions over the years have provided for generous benefits including provisions on development cooperation and trade. 

“The trade provisions in the various conventions were particularly favourable to the ACP including PNG because of the preferential duty free market access ACP products enjoyed in the European market.  In that connection, it should be noted that the balance of trade has always been in PNG’s favour. 

“For instance, last year, it was  448 million euro in PNG’s favour at the exchange rate of 0.2910 to K1.”

 

Review memorandum of agreement, Abal and O'Neill ordered

National Court orders Abal and O'Neill to look into 1996 deal

 

By JACOB POK

 

ACTING Prime Minister Sam Abal and Minister for Finance Peter O'Neill have been ordered to personally take steps to review a 1996 memorandum of agreement signed between the state and Kutubu landowners of PDL2, The National reports.

The National Court yesterday said failure to do so could result in contempt charges against the state.

The state was given until June 17 to review the expired agreement.

Justice Ambeng Kandakasi then issued interim restraining orders stopping Mineral Resource Development Company (MRDC) from facilitating payments of MoA funds to Kutubu landowners.

The orders followed an application by the plaintiffs, including former Southern Highlands governor Hami Yawari and landowners of PDL 2.

The issue arose from a newspaper statement by Abal that all MoA payments would be facilitated by MRDC.

Lawyers for the plaintiffs opposed that and told the court that the 1996 MoA did not allow for MRDC to make payments of funds to the landowners of PDL2.

They said the payments were to be made directly by the state to landowner groups and companies.

The state lawyer told the court he had not received any instructions on the matter, but argued there was no evidence on the part of the plaintiffs to verify that MRDC would facilitate payment as who would facilitate payment was still undecided.

Kandakasi told the state lawyer there was a media article by Abal saying that payment would be made by MRDC.

He asked why the MoA of 1996 still had not been reviewed.

Kandakasi referred to earlier proceedings where state lawyers failed to turn up in court with state officials when instructed to do so.

"The defendants have shown no interest in the matter.

"It is time people are dealt with for contempt."

He said the state had provided MoA funds to MRDC without discussing the issue with landowners.

"These are all wrong and contemptuous," Kandakasi said.

He ordered Abal take personal steps to have the memorandum of agreement reviewed no later than June 17.

He said this was to maintain the status quo and failure to do so could result in contempt.

 

Atoi wins in Bougainville

By STEPHANIE ELIZAH

 

THE people of North Bougainville have elected their new national member of parliament. He is Lauta Atoi, a businessman of mixed Mortlock and Tasman parentage, The National reports.

Atoi, with 10,463 votes, won by 5,301 beating only female candidate Rachael Opeti Konaka, who completed the contest on 5,162 votes.

He now occupies the North Bougainville open seat left vacant by former member and Governor-General Sir Michael Ogio.

Bougainville Electoral Commissioner and North Bougainville by-election returning officer Reitama Taravaru, in thanking the Papua New Guinea and Bougainville electoral commission officers, police and the candidates and their supporters, said, generally, the election was peaceful and carried out with respect.

“Having being satisfied with the process on our part, that the by-election was fair and transparent, I have taken into account all the votes cast and I declare our new member-elect Lauta Atoi,” Taravaru officially declared in Buka yesterday.

Atoi, in accepting his new role, thanked everyone for their support and acknowledged members of the New Bougainville Party and churches in Buka for their prayers and assistance.

To all his voters and campaign team, he urged they stay focused on their primary reason for contesting the by-election.

“This win is just the beginning of our journey. Let us stay focused on the immediate needs of our people,” he said.

“We need to complete all incomplete projects of our former member like delivery of water tanks and assisting our people in the West Coast atolls.

“Let us concentrate on putting all monies into these immediate projects; 2012 can take care of itself.

“Our medium- and long-term plan is to boost economic growth in our region,” he said.

“There is no time to celebrate, we have six months to take care of our people. I stand with confidence, yes, I can lead, it is time for a change.”

He invited the candidates who lost and their supporters to work closely with him.

“I have seen your platforms during the campaign period.

“You have very good ideas which we can together work on and move Bougainville forward,” Atoi said.

 

Freeway ban ignored

By ANGELINE KARIUS

 

TRUCKS and semi-trailers are still accessing the Poreporena Freeway despite a ban imposed by police last Thursday, The National reports.

Deputy police commissioner and operations commander Fred Yakasa said roadblocks operated by his men appeared to have failed.

He said there were logistical problems involved in stationing his men at the designated Konedobu and Hohola roundabouts to divert trucks and semi-trailers using the freeway.

“It is not working. I will have to look into this and try to station officers at designated routes to continue monitoring the highway,” Yakasa said.

He said the ban imposed by police was over public safety fears and to protect commercial houses and properties along the roadside.

“I call upon respective transport operators to do something about it and impose measures for motorists and public accessing the freeway.

“Police have tried but it has not worked. We all have to do something.

“The Poreporena Freeway is a death trap. That is what everyone needs to understand,” Yakasa said.

It is understood that no formal meeting with transport operators had been held since the ban was imposed.

National Road Safety Council director Frank Aku had condemned the action by police.

He said the ban on the freeway needed to be approved by the relevant authority before it could be imposed.

“This is public road to be used by all vehicles,” he said.