Bank South Pacific posts K407 million profit

Source: The National, Monday, March 18, 2013 

 

BANK South Pacific posted an operating profit before tax of K545.3 million last year, up 14.8% from the previous year’s profit of K475 million, chairman Kostas Constantinou announced last Friday.
The BSP group has again achieved very sound results last year, with operational and financial stability supporting solid profitability and balance sheet growth, Constantinou said.
The group also posted a revenue above K1 billion, net of interest expense to K1.353 billion.
The result after tax was K407.74 million.
Total assets of the group had increased by about K1.652 billion to K13.333 billion.
The bank’s results were strong with pre-tax profits growing 14.8% to K535.4 million, from K466.2 million in 2011, supported by K1.207 billion of revenues net of interest expense.
Total assets of the bank at the end of last year were just above K13.013 billion.
“Last year’s results had been achieved on the back of continued strong domestic growth of the PNG economy, driven by continuing LNG project-related activities and other resource projects in various stages of development, despite a fractious and fickle global economic environment,” Constantinou said.
“Inflation and foreign exchange volatility had been the macro-economic factors driving monetary policy in PNG.
“Strong export performance supported by favourable global commodity prices had continued to boost liquidity levels, and this has meant interest rates on bank bills  remained at the low levels where they ended 2011, maintaining significant downward pressure on net interest income.
“PNG’s elections were held and conducted without major disruption.
“Elsewhere in the region, economies have performed reasonably well, with export performance leading the way.”
Constantinou said the steady performance last year was an indication of the positive impact of the changes being implemented in BSP.
“For this to continue, the group must maintain competitiveness, anticipate market conditions, and adapt to change,” he said.
“In 2010, we spoke of an emerging recovery in global conditions, but this stalled in 2011 and further weakened last year.
“Even so, BSP has enough local strength to continue to leverage profitably off PNG’s strong economic performance in 2012 and in the future.
 “The group is working hard to position itself as the leading bank in the South Pacific, to efficiently serve a customer base that is experiencing and rapidly becoming accustomed to the benefits of technologically aided banking using global standards.
 “The 2012 results demonstrated that BSP continues on course to achieve its market goals.
“I am also confident that the group will meet the challenges of this year and return more profitable results for shareholders and ultimately the people of Papua New Guinea.
“And we at BSP are also proud to have been recently announced as the major sponsor of the 2015 South Pacific Games.”
 

Concern over use of sovereign wealth fund

Source: The National, Friday, March 15, 2013

Story and picture by MALUM NALU

THE head of Extractive Industries Transparency Initiative (EITI), a global standard for improved transparency of government revenue from natural resources, says it is concerned with how funds from PNG’s sovereign wealth fund (SWF) will be used.
Jonas Moberg, the head of EITI, said PNG was a resource-rich country, with some of the region’s largest oil, gas, and mining resources, and transparency about how much the government received from these resources – including the SWF – would be a key step to ensure that all Papua New Guineans benefited.

Crater-like pothole at Gordon Market in Port Moresby. The concern is whether the SWF will be used properly to fix deteriorating infrastructure like this.

He met with Prime Minister Peter O’Neill to discuss a number of topics, including the SWF.
“The prime minister talked about the importance of getting it right with the sovereign wealth fund to ensure that there is a robust regulatory framework,” Moberg told reporters at the US Embassy on Wednesday.
“I take note that there are a number of countries around the world that put sovereign wealth fund and the implementation of the EITI as two important pillars sitting alongside each other.
“Having a high degree of transparency in a string of regulatory environment is very important for the sovereign wealth fund.”
Moberg was in the country on Tuesday and Wednesday this week as the PNG government considered whether to implement the EITI.
The EITI is the global standard for improved transparency of government revenue from natural resources, currently implemented by 37 countries.
“The EITI provides global standard for transparency, but the process will be locally-owned and can be shaped to meet local needs,” Moberg said.
“The implementation of the EITI sends a strong signal to industry, investors and the community at large that the government is committed to transparency and accountability.

‘PNG eyes new Ok Tedi player’

Source: The National, Friday, March 15, 2013

CONTROVERSIAL Australian journalist Rowan Callick, who has been accused by the anti-mining lobby of being pro-BHP Billiton and Ok Tedi Mining Ltd, yesterday suggested that the PNG government is trying to bring in a new operator for the Ok Tedi mine.
In an article in The Australian, titled ‘PNG learning not to count its chickens before they hatch’, Callick – whose interview with former OTML chairman Ross Garnaut led to Garnaut’s banning from PNG by government –  said this was evident in relations between the newly-elected Peter O’Neill government and OTML.
“Recently, we’ve seen the newly elected government ban Ross Garnaut from entering PNG, while he was the chairman of Ok Tedi, and effectively direct pressure on BHP Billiton, which had set up a trust to run the mine, to accede to the changing of the constitutional arrangements that hold substantial dividends back until the mine closes, and also constrain government access to the funds available now for local development,” he said.
“Finance Minister James Marape has this month sought to redirect some of those funds, which have recently been used to buy boats and aircraft for local use, to a new lobby group.
“Hundreds of millions of dollars are now coming into play in this dispute, as the government places pressure on Ok Tedi in one area after another, including the ultimate sanction of refusing to allow an extension of the mine after its approvals end this year.
“Then a new operator could be invited in. But from where?”
Callick said although copper was today’s most sought-after mineral, there was not a long list of aspirants.
“A Chinese buyer is probably most likely,” he said.
“But with Ramu Nickel, operated by Chinese government corporation MCC, enjoying a 10-year tax holiday, this will mark the starting point in any negotiation with Beijing.
“Just 100km from Ok Tedi lies another huge copper-gold resource – Frieda River.
“But unfortunately for PNG, this is mostly owned by Xstrata, which eventually completed just before Christmas, after some postponements, a feasibility study, but which is destined for imminent merger with Glencore.
“And Glencore will not want a bar of even such a vast, promising resource as Frieda.
“Its chief executive Ivan Glasenberg, who will head the merged entity, said last week: ‘We are afraid of greenfields,’ which are risky and have capital overruns, and have deals ‘which kill the NPV (net present value) on those projects’.
“Glasenberg is a trader not comfortable with waiting five years for a return.”

Thailand Prime Minister to visit New Zealand and Papua New Guinea

BANGKOK, 15 March 2013 (NNT)- Thailand Prime Minister Yingluck Shinawatra is scheduled to visit New Zealand and the Independent State of Papua New Guinea from March 21-25, 2013 at the invitations of the Prime Ministers of both nations.

According to the Department of American and South Pacific Affairs, Ministry of Foreign Affairs, Prime Minister Yingluck will bring a team of private sector and relevant agencies to New Zealand to study that country's strength with a view to bringing the experience to boost the competitiveness of the Thai business sector.

Highlights of the visit include sightseeing of New Zealand's farming industries, particularly milk and beef production, as well as its famous eco-tourism industry. In addition, Ms. Yingluck will be the first Thai to receive an honorary doctoral degree from Auckland University of Technology.

Ms. Yingluck is also the first Thai leader to visit the Independent State of Papua New Guinea made at the invitation of Papua New Guinean counterpart Peter O'Niel . The country is Thailand's no.1 trading partner in the South Pacific and is eyed as prospective market of raw materials due to its abundant natural resources, be it forests, oil or marine lives. On this visit, the Thai Prime Minister will be giving food hygiene testing and disease detecting devices to the country as well as educational materials and memorabilia from Thailand to Papua New Guinea universities.

Mineral wealth failed to better PNG standards

Source: The National, Thursday, March 14, 2013

By MALUM NALU

“SO rich and yet so poor” is a paradox that rings true for Papua New Guinea, as after years of extraction of our natural resources, our standard of living seems not to have taken a turn for the better, but for the worse.
 A case in point is Daru, the forgotten “capital” of Western, which has one of the lowest living standards in the world despite the billions of kina from the giant Ok Tedi mine.

Rundown post office and streets in Daru, Western province, despite the billions from Ok Tedi mine.-Nationalpics by MALUM NALU

Everywhere in the country, we see rundown roads, schools, and hospitals, among other facilities, which make us wonder where all the wealth from our resources has gone to.
It was because of this that the head of Extractive Industries Transparency Initiative (EITI) Secretariat, a global standard for improved transparency of government revenue from natural resources, yesterday met Prime Minister Peter O’Neill to discuss implementation of EITI in PNG.
Jonas Moberg, the head of EITI, also met representatives from the oil, gas, and mining industries, as well as local civil society organisations, which he said had expressed strong support for the EITI.
He told reporters at the US Embassy in Port Moresby yesterday, after meeting with O’Neill, that PNG was a resource-rich country with some of the region’s largest oil, gas and mining projects, and transparency about how much the government received from these resources was a one key step to ensure that all citizens of PNG benefited.

Moberg talking to reporters at the US Embassy in Port Moresby.

“The idea is very simple and that is to fight corruption, improve accountability, through transparency,” Moberg said.
“EITI is a standard implemented by countries, it’s implemented by 37 countries so far, and a number of other countries are preparing to do so, including the United States there’s a pilot in Australia, and obviously, there is a preparatory process by your government
“When the EITI is implemented, what essentially happens is that an independent report is done, bringing together what the companies pay in taxes, royalties, and fees, and what the government receives.
“So you get someone independent that has trust to go and ask all the companies, Ok Tedi, PNG LNG and so on, ‘how much have you paid in royalties and licence fees?’.
“And then you ask revenue commission, the IRC, and treasury, ‘how much have you received?’ and you compare to find out how much has gone missing.
“So the whole idea is you bring transparency in there.
“That makes it more difficult for money to go missing.”
Moberg said the EITI would be implemented by government, and supported by industry and non-government organisations, like Transparency International.
“It becomes very easy for transparency to become pointless,” he said.
“It has to be meaningful transparency, transparency that leads to improved accountability, that leads to trust being built with people.
“Therefore, there has to be a commission in every country, a multi-stakeholder group, so that government convenes an EITI PNG group, invites the companies, invites civil society, and says that, based on these global roles, we’re going to do it our way.
“And it is that group that needs to have the ownership of the EITI.
“There is an integral working group here so the process has started.”
Moberg said O’Neill had shown strong support for EITI at their meeting yesterday.
“His (O’Neill’s) commitment to this agenda could not have been stronger,” he said.
“We are very encouraged by what we see here.
“There is, of course, no doubt that your country has a long way to go in making sure that this sector brings benefits to the whole population.
“But the commitment that the prime minister has demonstrated now is quite impressive.
“I think that’s something very positive.
“It’s concerted action in the fight against corruption and to improve accountability.
“It’s these kinds of practical steps that the prime minister is so keen on, and we very much welcome.”

Condoms needed in PNG prisons

IRIN

BANGKOK, 14 March 2013 (PlusNews) - A Papua New Guinea (PNG) study released today calls for condoms to be made more widely available in prisons.

“All prisoners must have condoms,” Angela Kelly, one of the authors of the study by the PNG Institute of Medical Research, told IRIN, noting that they could help prevent the spread of HIV/AIDS.

Although condoms are one of the government’s key HIV prevention tools, there is no official policy in place regarding prisons, with many viewing their distribution as supporting male-to-male sex which is illegal in PNG.

The study found that unsafe, forced and consensual male-to-male sex was taking place in four of the country’s 19 overcrowded prisons visited; some sexual relations were long-term, some sex was for goods or as a punishment, and some involved more than one partner.

Only one of the four prisons provided condoms to inmates; most prison staff believed condoms encouraged sex, the study found. While there is no figure for HIV prevalence in PNG prisons, it is widely believed to exceed the national average of 0.8 percent.

PNG grapples with ageing health workforce

IRIN

Photo: David Swanson/IRIN

Many nurses are nearing retirement age

PORT MORESBY, 14 March 2013 (IRIN) - Papua New Guinea (PNG) is a Pacific country rich in natural resources, yet its health staffing levels are comparable to the world’s poorest countries due to a rapidly retiring force and lack of qualified replacements.

“If we do not do anything about our ageing workforce quickly, the health system may collapse,” former health minister Jamie Maxton Graham told parliament in 2012.

Despite repeated warnings of the shortage, first at a 2002 national health conference, again in 2008 during a government health resources forum, and most recently by a 2011 World Bank report, the country still faces what the government calls a “drastic” health worker shortage. The World Bank report predicted a large decline in the “backbone of rural service delivery” (nurses and midwives) - by up to half.

All this is unfolding in a mostly rural half-island of seven million residents where the closest health clinic might be hours by boat, foot, or at best, local transport, from the village, said Miriam Lovai, former head of the national midwife association.

Rural health care is especially threatened, noted 2011 field research led by Care Australia and the Australian National University. Twice as many infants and three times as many children under five die in rural areas than urban ones, according to the country’s latest census in 2000.

Two years since the Bank’s “call to action” report, PNG’s health workforce (mostly nurses and midwives) is dwindling through retirement or attrition while the country continues fighting high malnutrition rates in remote highland communities, as well as high infant and child mortality (57 and 75 per 1,000 live births, respectively).

Training

Health experts say the shortage of qualified nurses is due to falling government support to nursing schools, starting in 1999, which has forced the closure of all but three of the eight public nursing schools.

The team leader of the World Bank report, Aparnaa Somanathan, told international media in 2011: “I think training capacity in PNG has weakened considerably over the last 10-15 years. There is less and less resources being put into training, so PNG’s ability to train more and more doctors and nurses has declined.”

Fourteen community health worker (CHW) schools produce graduates who work mainly in facilities in rural areas - where 90 percent of the population lives - mostly in clinics known locally as “aid posts”.

Churches or faith-based groups operate the posts, which are staffed with a nurse or CHW. In areas largely bereft of government services, these posts provide frontline primary care and become the de facto village doctors.

The World Health Organization (WHO) recommends at least 23 health workers per 10,000 residents to provide basic care, including vaccinations; PNG has five nurses and doctors per 10,000 residents.

“Many of our qualified nurses have taken up employment in the resource [oil, gas and mining sector] for better pay and conditions,” said Manga Bengi, a public relations officer with Mount Hagen Provincial Hospital, the country’s third largest hospital in Western Highlands Province.

Mineral deposits account for nearly 70 percent of the country’s export earnings.

Meanwhile, with poorly-funded health training opportunities, almost no midwives have registered with the state since 2000. However, since the Australian government gave US$120 million last year for midwifery training, Port Moresby reopened four midwifery schools in 2012; a new group of midwives is due to graduate this month.

Even so, these graduates will be far outnumbered by the number of health workers expected to retire soon. Out of 570 doctors, 3,429 nurses and 4,400 community health workers, 20 percent have passed the legal retirement age of 55, while nearly 40 percent are 45-55, according to the government in 2012.

Nurses will retire the soonest, with more than one-third of specialist nurses (including midwives) expected to retire in the short term, according to a 2011 health profile by the Australia-based University of New South Wales and health think tank Burnet Institute.

Photo: David Swanson/IRIN

There are five nurses per 10,000 residents

What next?

Prime Minister Peter O’Neill told local media in December 2012 foreign workers are needed as a stop-gap measure.

Port Moresby General Hospital in the capital, which is the country’s largest referral hospital, recently recruited two nurses from the Philippines, but critics say this temporary solution diverts attention from the need to boost local health worker training and retention through improved benefits and pay.

About 10 years ago, former Prime Minister Sir Michael Somare moved to bring in nearly 100 nurses and doctors from Cuba on temporary work contracts, but the cost and heated opposition from the local medical community of being “replaced” by foreign workers stymied the effort.

The present government’s latest bid to import health workers has met similar resistance, but plans proceed uninterrupted.

Also, the government recently approved a health workforce plan in 2013.

“We know exactly how many nurses we need and a training plan is now put in place to meet our manpower requirements,” chief secretary to the government, Manasupe Zurenuoc, told IRIN.

Nationwide there are 28 hospitals, 551 health centres and nearly 2,000 aid posts, which together process up to 10 million outpatients and 200,000 in-patients annually, according to the National Health Department.

Zurenuoc added that the National Executive Council earlier this month directed the Department of Personnel Management - responsible for the recruitment and salaries of all civil servants - to finalize salary reforms for CHWs, which will then be submitted for government approval. One proposed change is for the government to do away with a longstanding parallel pay scale system in which CHWs in church-run facilities earn on average 33 percent less than those employed in the public sector.

Of the 4,400 community health workers nationwide, church health services employ a “substantial” number of them, according to the country’s Churches Medical Council, which oversees faith-based health services.