Business reporter CLARISSA MOI this week spoke to economist and executive director of the Institute of National Affairs PAUL BARKER about the review of the Mining (Safety) Act 1977.
THE review of the Mining (Safety) Act 1977 and Regulations started under the former Department of Mining did not progress.
Following the restructure of the department, the Department of Mineral Policy and Geohazards Management was tasked to review the Mining (Safety) Act 1977 as part of its 2009-2015 Mineral Policy and Legislative Review exercise.
Regional consultations began last month in the Highlands and Mamose by the Department of Mineral Policy and Geohazards Management and the Mineral Resources Authority.
This is what Barker said:
“Generally, the Government needs to focus on the application of existing laws, including in the resource sectors, with so much of the country’s policy and legal system already poorly understood and applied weakly or at least deficiently.
“It’s true that many of Papua New Guinea’s laws are outdated and in need of review and update, particularly in the fields where technology is changing fast, such as information communication technology (ICT), but also with new technologies, and also risks associated with mining or oil and gas extractive industries, their power generation and waste disposal.
“With training and administration of legislation of complex laws demanding, it’s clearly more practical to avoid adding to the tasks by changing the ground rules.
“As the old adage goes, unless it’s broken don’t fix it, as you’re more likely to create more substantial disruption for limited gain.
“Nevertheless, the mining industry was changing worldwide, both the technologies and standards, whether for employees, environmental management, benefit sharing, or requirements, for example over transparency (including the extractive industries transparency initiative), and over allowable greenhouse gas and other emissions or offsetting.
“PNG needs to remain internationally competitive if it seeks to retain a place in the global mining industry.
“But global mining requirements, revenue sharing and other fiscal arrangements evolve around the world in response to changing market conditions, shifting demand, political, economic public priorities and conditions to which industry.
“But also, the national rules must periodically be adjusted.
“It’s certainly true that Government has to some extent been disappointed by the low tax revenues over recent years from the resource sector, notably in relation to the much great transfers at the start of the decade.
“The industry in PNG faces state-of-the-art new technologies at some mines, and unexpected costs or production setbacks, for example, during major droughts and with need for major reinvestment in some instances.
“Periodic reviews of prevailing policies, laws and regulations are the prerogative of Government, but desirable for the whole sector and the wider community, to ensure they’re attuned to the country’s current needs and priorities, and the conditions prevailing in the sector.
“Such reviews require not only professional inputs, but the full engagement of all the stakeholders, including industry participants, affected landowners and wider civil society, social and environmental interests, as well as government.
“At the end of the day, of course, it is the prerogative of the Government, on behalf of the people of the country, whether or what sort of mining and other extractive industries they want.
“In countries such as Costa Rica in Central America, for example, who had chosen to avoid that route, and not to have mining or logging as part of their economy, and to focus on sustainable industries.
“That’s not so readily an option for all other resource rich countries, where the mining sector can certainly contribute needed export earnings and revenue for the State to be able to perform its core functions of delivering needed public goods to the community, including enabling wider access to economic opportunities, and providing some level of jobs, directly and indirectly through contractors and spin-off activities.
“It’s really a case of Papua New Guinea needing to determine what it wants out of the sector, and clearly there’s a need to be more selective in assessing the costs and benefits, and determining the standards and cut offs.
“There are standard global guidelines on sound and unsound investment rules for resource projects.
“If the State is expected to provide extensive concessions, and there’s a long delay in receiving revenue, or the risks fall unduly on the State, or the State is expected to put up upfront capital to secure revenue from the utilisation of its resource, these would suggest that such projects are not providing a net gain to the country.
“And if the environmental impacts or risks are excessive upon whole river systems or marine habitats and their inhabitants, then again the State should clearly be ready to reject the project, or set firm verifiable standards and controls.
“It must be a partnership between the government, industry and the wider community.
“But the Government must ultimately set the rules clearly, and then apply them and have the capacity to do so, with the rules then applied transparently and consistently.
“And not leaving the companies in any state of uncertainty, with periodic chipping and changing of those rules thereafter.
“If one wants major international capital investment, which can be attracted elsewhere, one needs to ensure that PNG’s investment conditions are competitive, reliable and that the State honours its obligations once agreed.”