THERE have been several letters to the editor from readers and politicians criticising and questioning the role of the Mineral Resources Authority (MRA). Public relations officer KENNETH AVIRA explains:
The MRA was established through the enactment of the Mineral Resources Authority Act 2005 by Parliament.
The Act came into effect on Jan 1 pursuant to the Gazettal Notice No. G16 of 2006.
This resulted from a proposal to establish the authority sometime back in 1998 and subsequent consultations between relevant stakeholders such as the Department of Treasury, Department of Prime Minister & National Executive Council (NEC), Department of National Planning & Rural Development, Department of Personnel Management, Internal Revenue Commission and the Department of Justice & Attorney-General.
The stakeholders discussed, amongst other things, the composition of the board, the structure and reporting requirements, the legal aspects and the financing model for the MRA.
Also addressed was the need to separate the regulatory functions from the policy functions of the MRA, which in turn gave birth to the Department of Mineral Policy & Geohazard Management (DMPGM).
The outcomes of these consultations were submitted to the Central Agencies Coordinating Committee (CACC) for deliberation before being passed on to the NEC for its endorsement.
It was then tabled in Parliament for debate and subsequently passed as an Act of Parliament.
The proposal to establish MRA came about primarily due to inadequate Government funding and staffing of the then Department of Mining, which seriously impacted its ability to function effectively.
The department’s annual budget in the last decade on average was K6 million, which was inadequate.
As a result, the department did not have the institutional capacity to effectively manage the next phase of mining developments in the country.
As evidenced by the situations in Ok Tedi and Porgera, the department’s internal capability to undertake necessary technical assessments of mining operations was limited.
It experienced critical shortages of qualified staff members, and relied on costly consultants from abroad to do basic assessments that should have been done by local experts.
Technical and coordination staff involved in managing the mining industry in the department, sunk to one third of its designed strength, with only 15 out of 45 people that were required.
Given the freeze on recruitment by the Government at that time, there was no prospect of recruiting replacement staff members.
The establishment of MRA was therefore seen as strategic and crucial in better managing, developing and sustaining the mining sector.
The key issue that was considered when establishing the MRA, was the availability of sufficient resources to ensure efficient and effective management of the mineral sector.
It was envisaged that the MRA would have adequate funding and manpower to ensure smooth implementation of its functions.
Unlike the Department of Mining, the MRA Act provides for principal funding to be derived from a production levy on assessable income from the operating mines at a maximum rate of 0.5%.
The levy being imposed now is 0.25%.
With total revenues from all mining operations valued at K7.2 billion in 2006, MRA received K18 million for operations in that year.
The industry, for the sake of a more efficient service from the State, is supportive of this arrangement so that the industry is well managed and government issues well addressed.
The MRA was officially launched on Oct 26 last year in Port Moresby.
A key highlight of the launching of the authority was the introduction of a five-year (2008-2013) corporate plan.
Vice-Minister for Mining Ano Pala received and launched the 28-page plan, which forms the road map for the MRA for the next five years.
MRA managing director Kepas Wali said the plan was a living document subject to reviews and fune-tuning and that it would guide the progress of the authority to accomplish its vision and mission.
The MRA’s vision is to improve the lives of all Papua New Guineans through the responsible management of the nation’s mineral resources.
Its mission is to effectively promote a healthy and sustainable mineral industry and provide a regulatory environment, which maximises mining opportunities and to ensure optimum benefits for the people of PNG.
Mr Wali said the plan would adopt a development framework that would regulate and drive the industry.
This is to realise the national development objectives captured within the National Government’s Medium-Term Development Strategy and in particular, the export driven strategy.
The MRA’s corporate plan is supported by the following seven strategic focus areas:
l To maintain an effective board that demonstrates exceptional performance and credible ethical standards together with its assigned duties and responsibilities;
l Australia has ‘shocking’ evidence of Japan’s whaling: minister To maintain the highest calibre of staff as possible;
l Australia has ‘shocking’ evidence of Japan’s whaling: minister Consistently provide a high standard of regulatory service in a timely manner;
l To ensure adequate resources for the long term operations of MRA into the future through the regular budgetary process;
l Ensure the ongoing availability of good quality, reliable and up to date geo-scientific information that is easily accessible;
l To contribute to the formulation of sound mineral policy; and,
l Building partnerships across the public service.
The MRA operational divisions have aligned their functions to ensure that their respective goals and objectives contribute towards the attainment of the strategic focus areas.
The MRA’s functions are to:
l Advise the minister on matters relating to mining and the management, exploitation and development of mineral resources;
l Promote the orderly exploration for and the development of the minerals in a sustainable manner;
l Oversee the administration and enforcement of the Mining Act 1992, The Mining (Safety) Act (Chapter 195A), the Mining Development Act (Chapter 197), the Ok Tedi Acts and the Ok Tedi Agreement, the Mining (Bougainville Copper Agreement) Act (Chapter 196) and the agreements that are scheduled to that Act and any other legislations relating to mining;
l Negotiate mining development contracts on behalf of the State;
l Act as agent for the State in any thing relating to mining;
l Receive and collect fees, levy, rent security, deposit, compensation, royalty, cost, penalty or other money payable to the authority;
l Receive or collect any security lodged on the grant of a tenement and to hold such security to ensure compliance of the obligations under the tenements;
l Administer any public investment programme relating to mining;
l Conduct systematic geo-scientific investigations into the distribution and characteristics of minerals in PNG;
l Provide small-scale mining hydro-geological survey data services and occupational health and safety community awareness;
l Collect, analyse, store, archive, disseminate and publish geo-scientific information about PNG’s mineral and geological resources;
l Carry out such functions vested in the MRA under the MRA Act or such other legislations; and,
l Generally to do such supplemental, incidental or consequential acts or things necessary or convenient to carry out its functions.
There has been an upsurge of positive developments since June last year when the MRA became fully operational.
In the last eight months, 73 exploration licences have been issued, compared to only eight in 2006 from the 132 applications received in that year.
The MRA has thus far exceeded the Government’s expectations by delivering on all aspects of regulating the mining industry.
This year the MRA is focused on building up on the gains and achievements of the last six months to ensure that the industry is well served and also to promote PNG as a preferred destination exploration prospects and mine development.