Sunday, September 29, 2013

Remarkable story: The nationalization of Ok Tedi Mining by the Papua New Guinea government

Professor Stephen Howes
Director of the Development Policy Centre

I WAS IN PORT MORESBY LAST WEEK for our third budget forum with PNG’s National Research Institute. The week was dominated by the PNG’s Government’s takeover of Ok Tedi and the Sustainable Development Program, which was front-page news for several days.
Stephen Howes

It is a critical but complex issue which I wrote about earlier this year (here and here). Though the subtleties and implications are manifold, a simple summary of what happened last week is that in a single day, Wednesday, legislation was introduced into and unanimously passed by the PNG parliament to give the PNG Government ownership of the country’s largest company, Ok Tedi Mining Limited, and control over the country’s second largest development organisation, the PNG Sustainable Development Program.

The short version of my argument is that, while the Government has achieved a stunning victory, it is quite possibly a temporary one, and it is an outcome which represents poor public policy and a setback to development in PNG. The long version follows below, starting at the beginning.

The PNG Sustainable Development Program (SDP) was set up after BHP’s exit from the Ok Tedi mine in PNG’s Western Province just over a decade ago. Essentially, BHP wanted to shut down the mine, which had caused great environmental damage and become a reputational risk to the company. The PNG Government, however, wanted the mine to continue because it needed the tax revenue.

Thursday, September 19, 2013

Saturday, September 14, 2013

Gratitude to veteran politicians and Happy 38th Indepedence to Papua New Guinea


I salute the founders of this great nation for their role in nursing and bringing up this nation to where it is today at its 38th Birth Day. We sometimes pose negative comments on them saying it was too early for Papua New Guinea to be granted independence but it was not that easy as many of us think.

Even after they are gone their names shall be remembered as they shift the nation from a colonialism to what we called 'Independence State' today. One of those great leaders and founders is non other than Grand Chief Sir Michael Somare who was instrumental in taking this nation out of foreign hands without bloodshed. Besides him were a few other key figures who shaped the future of Papua New Guinea, politically, constitutionally, socially and economically.

Prime ministers
We thank the first Prime Minister of the Independent State of Papua New Guinea in the Westminster system and the Governor for East Sepik, Sir Michael Somare (Pangu Party) and first Opposition leader and the MP for Wabag, late Sir Tei Abal (United Party). With their first political parties, they made great impact in the bringing up of independence in 1975.

Other great architects are Sir Rabbie Namaliu, Sir Julius Chan, John Momis, Sir John Kaputin, Anton Parao and Paul Torato. Others who have left us were Sir Iambakey Okuk, Sir John Guise, Sir Ignatus Kilange, Sir Albert Kipalan, Sir Buri Kidu, John Watts and Sir Sinake Giregire and several others. We thank Sir Michael and those who are still living to this date and those who have left us for their collaborative efforts to get Papua New Guinea out of foreign hands. They deserve gratitude.

You cannot teach an “old dog a new trick”. With the evidence of globalisation, economics and trade, we now need young and innovative leaders in the likes of Peter O'Neil, Don Polye, Gary Jufa, Sam Basil, Charles Abel, Richard Maru, Belden Nemah and others who are who are more focused on those issues and take the country from here to the next era.

Hon Richard maru, MP
Commerce & Industry
Hon Don Polye, MP
Minister for Treasury
Hon Sam Abel, MP
National Planning & Monitering
Hon Sam Basil, MP
Deputy Opposition Leader
Hon Belden Namah, MP
Opposition Leader

Hon Gary Juffa, MP
Governor for Northern Province

With due respect , I must say that any of these veterans (former PMs) who have returned in this term of parliament or who may return in the future elections must assist the young leaders to form a vibrant government for a better Papua New Guinea. I believe this country has a potential to fly higher above other developing countries of the world if we are honest in affairs of the nation. We have some of the biggest mining, oil and gas projects in the world. We have giant Porgera gold mining, OK Ted copper and gold, Lihir gold, Bougainville copper, Freda gold, Ramu nickel and cobalt, Wau-Bulolo gold, PNG LNG project,  and to name a few.

We also have potential in agriculture and livestock. Papua New Guinea has more than 75% of its land covered in bus which we can use for agriculture and livestock activities. Currently we have Ramu Sugar in Sepik and Makaham valley, oil palm projects in West New Britain and Ramu Valley, Popodetta and coffee projects in the highlands, Morobe and other parts of the coastal provinces and cocoa and copra projects in the coast. We also have piggery and cattle farming in Markham Valley, along Sogeri Roads in Central Province, and other parts of the country. We have everything a country could need.

Now, when PNG turns 38 (2013), everyone, including government and the people of Papua New Guinea have high expectations and hopes for better future as country's the Gross Domestic Product (GDP) is expected to be doubled in the next few months as PNG LNG project goes into on stream. Yes, for sure country's revenue will be doubled as never before.

However, the problem of mismanagement and corruption by the elected leaders and their cronies or bureaucrats holding top positions in the country down to the project management on the ground is remained unresolved. We cannot expect miracles from heavens if we are not accountable in handling the billions of kina from the existing projects and other revenues sources in the country.

It’s about time we manage these massive funds with transparency, integrity and with good governance. If we continue fail in this area even after 38 years of Independence, we will have no one to blame but ourselves.

Happy 38th PNG's Birth Day to all..! God bless Papua New Guinea!

Thursday, September 12, 2013

Papua New Guinea Treasurer Polye to chair International Monetary Fund, World Bank board

Papua New Guinea Treasurer Don Polye will be the next chairman of the board of governors of the International Monetary Fund and the World Bank.
Hon Don Polye, MP
Polye was selected to be the chairman in 2014 by fellow governors, who are finance ministers of member countries.

Prime Minister Peter O’Neill commended Polye, saying his elevation to chair of the important financial institutions was a vote of confidence in PNG and would raise its profile on the global scene.
In a letter to Polye, the prime minister said his selection was in recognition not only of Polye’s leadership and talent by his peers, but also of PNG’s increasing role as a major player in the region.

“I have no doubt that PNG and the region would benefit greatly from your tenure as Chair of the Fund and Bank,” O’Neill said. The treasurer said the chairmanship was a prestigious position and he was honoured to take it up.
“This will certainly complement well our government’s drive towards making PNG the leader and big brother amongst Pacific Island nations, and an emerging economy in the Asia-Pacific region,” Polye said.

Papua New Guinea decentralises control of development spending


In the line with an electoral platform that pledged to deliver more local level services and control over spending, the national government of Papua New Guinea has introduced a budget for 2013 that transfers nearly K1.5bn to provincial, district and local authorities.
Each province is expected to receive K5m per district, while districts will be directly allocated K10m and local governments K500,000.

The government has set up guidelines for spending, with 30% of funding committed to infrastructure, 20% each to education and health care, and 10% each to law and order, support for economic activities, and administrative issues such as tendering.
In total, the amount of funds transferred represents an 87% year-on-year increase in support for sub-national programs.
Prime Minister Peter O’Neill told Oxford Business Group, “Local communities will now have more control over decision making and the implementation of development projects. These efforts combined will help to ensure the country’s continued economic and social health.”

The central government will retain final approval for larger projects, but funding will now be in the hands of sub-national authorities. This has raised some concerns, as Treasury Minister Don Polye conceded in a speech in late 2012, but he noted that the government had carefully considered the risks, as well as strengthened accountability and auditing systems.

Monday, September 9, 2013

Papua New Guinea's Opposition leader Belden Namah’s ‘15-days secret mission’

Opposition Leader ready to take on Government as House resumes

Post Courier (Tuesday, 10th September 2013)
Opposition Leader Belden Namah who has been on a “secret” 15-week mission overseas is ready to take on the government of Prime Minister Peter O’Neill. Mr Namah did not give details of his 15-weeks absence, just saying it was a “fact finding mission” and a secret at this stage.
It is understood that he may be out there plotting to topple the prime minister who he helped to install just over two years ago.

After arriving in the country over the weekend, he held a media conference with his small group of Opposition MP’s including Bulolo MP Sam Basil, Kundiawa-Gembogl MP Tobias Kulang and Huon MP Ross Seymour and appealed to MPs not to support the proposed constitutional amendments to the no- confidence motion.

“I have been out on a fact finding mission and I have looked in from the outside to see a lot of things that are not right under the current government.”
“My dream for Papua New Guinea is that we need to have a radical change, to see that our citizens benefit from the vast natural resources that are being taken out from their land.” Mr Namah said,” From my 15-