Will project reviews result in more benefits to the PNG landowners?

Or will it be another chapter of lost opportunities?


Just into the fourth month of  2019, and resource projects have come under scrutiny.    In early March,   senior ministers of government including Petroleum Minister Fabian Pok,  traveled to Komo  in Hela  for meetings with landowners  of the gas project.

After  15 years,  there is  some progress. Or at least that’s the positive spin to it. There appears to be Some indication that royalties locked away due to legal battles and tangled by bureaucratic red tape were going to be paid… But only  after    landowner identification processes.

Finance Minister, James Marape,  told the  media three months ago,  that K300 million is parked at the Central Bank ready to be released.  But landowners or people claiming to be landowners had to follow a process of ‘landowner identification’ in order to be paid the money.

There is some  hope of an end to disputes.  However,  the final settlement  is still a long way off.  That’s the reality.  Many of the elders died waiting for  the royalty payments they were promised.

Since becoming a new province, there is still a lot that needs to be ironed out.  The Hela provincial government still has to work its way through layers of bureaucratic processes that continue to  favor the Southern Highlands in terms of royalty payments from the gas project.  It’s all that and a lot more.

Understanding the background to the complexities of the  resource project in  Hela means going back some 20 years when oil extraction ended and the promise of PNG becoming the Saudi Arabia and Dubai of the Pacific faded as the crude oil  taps shut off.

It is against that backdrop that the neighboring  Enga province is now looking at the Pogera mine’s renegotiation through a wardens hearing.  This is a process that is reopened after the end of a mining lease.

Landowners and the Enga provincial government are looking at  a bigger slice of revenues and benefits.  What did they get over the last 30 years?  That’s a point  of contention for pro-mining and anti-mining  proponents.  What is visible to the international community is the campaigns against alleged atrocities committed against local people in Pogera and the desperate push by locals to get what little crumbs they can from a mine that has existed for 30 years on their land.

For the  first time in more than three decades, it appears the National Government is speaking a different language: One that calls for greater benefits into government coffers and landowner pockets. This rhetoric has come after 30 years of gold extraction, 500 shipments of liquefied natural gas  and billions of dollars worth of  round log exports.

In Lae  during the opening of the  Central Bank’s Currency Processing Facility,.  Deputy Prime Minister, Charles Abel  talked about a production based tax. Instead of a profit based tax for resource projects which will be signed from 2019 onwards.  The general thinking from the National Government is that a profits based tax can be deceptive leaving the government with very little to collect   if a mining company declares losses or breaks even.

While Pogera discusses mine benefits, a similar process is happening in Madang.  Triggered by an agreement between the Chinese and the PNG Governments, the Ramu Nickel’s expansion is in discussions  ongoing between  the government and the developer.

The processes are long and drawn out.  The risk is that without proper representation, landowners could be left with another raw deal for several more decades before another opportunity for renegotiation presents itself.

1 comment on “Will project reviews result in more benefits to the PNG landowners?

  1. Dear Scott, I have just read your article on business advantage. Very well articulated. you might be interested to read about what we do with c5v.org, png owned startup.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: