Abel wants mines to pay more

Royalties and interest payments in the extractive industry should be increased, according to Deputy Prime Minister and Tresurer Charles Abel.
Speaking at the Governors’ Conference in Madang last week, Abel said the current system of mining and oil and gas did not provide enough benefits to the people.
A recommendation from the conference called for the immediate revision of the Mining
Act 1992 and the Oil and Gas Act 1998.
The recommendation specifically calls for the increase of royalties from 5 per cent to 10 per cent and equity in projects to be automatically at 30 per cent carried interest.
This includes the overhaul of the taxation system to ensure companies paid an effective tax rate consistent with international practice.
Abel said there was a need to devolve more powers to the provinces because the national Government was too far from the people to understand their real needs.
“When powers are devolved to the provinces, finances also have to be devolved so the provinces could fund the additional responsibilities they will have,” he said.
New Ireland Governor Sir Julius Chan said the current structure of the mining and oil and gas regimes in PNG was contrary to international best practice.
“The levels of royalty in PNG are very low,” he said.
“The way that ownership in the projects is structured forces Government to buy back what it just gave away to the companies.
“The companies pay very low taxes because they have too many deductions and tax credits.
“Oil and gas companies can actually deduct the royalties they pay to landowners from their tax bill. So in fact, the company is not paying royalties at all, the State and the people are paying.”
Hela Governor Philip Undialu said the PNG LNG Project’s umbrella benefit sharing greement (UBSA) was very unfair to landowners.
He said people have not benefitted while the companies made more money than they had reported.