Economic independence

Letters

I WISH to acknowledge Prime Minister James Marape’s inaugural speech in Parliament regarding economic independence through our mining and petroleum resources.
I also acknowledge Oro Governor Gary Juffa on his bold stand on economic independence as well.
PNG is a pot of gold floating on sea of oil and liquefied natural gas (LNG), but yet poor.
This phrase is common and popular throughout PNG and its true, PNG is poor on the Global GDP Index.
I would like to suggest alternatives for legislators (all Members of Parliament) to critically consider and make/or amend appropriate laws to choose wealth for PNGs economic prosperity for the people.
The Mining Act and the Oil and Gas Act needs to be amended to include important clauses that will see economic impacts that should have been done since Papua New Guinea achieved independence.
The current Acts still see remnants of colonial Acts.
I’ll use the Mining Act Section 5.1 and 5.2 as an example.
This section clearly states that all mineral resources above and below the land and sea belongs to the State, this clause only talks about ownership, that is the state’s ownership.
I wish to suggest two alternatives:
1. An additional clause, let’s call it section 5.3 should sound like this: “The State will have a not negotiable equity of 15 per cent (figure to be decided in Parliament) in any mining development contract and likewise petroleum development contract with developers.”
This certainly adds meaning to “state’s ownership”.
Don’t forget its PNG’s resource and PNG is the owner by right.
This means that PNG must not finance this equity because PNG contributes the resource and must acquire this equity by right of ownership.
This will give added meaning and value to the existing Mining Act section 5.1 and 5.2.
2. Furthermore, a Section 5.4 should support this clause and should state that there should be a “buy-into” agreement on shares, for example, 1 or 0.5 per cent equity after half of the proposed life time of the mining or petroleum project is reached or even better, after profit is declared.
PNG is probably the only country in the world that does not own a mine and/or an oil or LNG well head at 70 per cent plus equity.
It’s true that, one can say we don’t have the technical capacity but technical capacity is useless without mineral and petroleum resources.
These resources are non-renewable resources and have one way extraction traffic.
It’s critical that the Mining Act and the Oil and Gas Act be revised and amended for PNG’s economic growth and eventually economic independence.
I understand that we have to keep and uphold investor confidence, this is true but the equation must be balanced, “it must be a win-win” for all parties in the mining or petroleum development contracts.
It’s time PNG companies should actively acquire exploration licences in mining and petroleum and start explorations.
Government business arms should make funds available for these operations, it’s risky but if there is a bonanza, it’s worth the risk.
Big mining and petroleum companies operating in PNG have taken this risk and we have seen success stories.
PNG can do it.

JK Banda Ph.D,
UPNG

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