THE PNG public and investors of the giant liquefied natural gas project must be told which minister is charged with the powers to oversee the project on behalf of the Government. We are getting confusing signals at present.
Variously, we have been receiving public statements made on the project by Petroleum and Energy Minister William Duma and by Public Enterprises Minister Arthur Somare.
Last week, Mr Somare signed an understanding with the Japan Bank of International Cooperation to support the development of the multi-billion kina project. Are we to read from this that the State authority over the project is now vested in the Minister for Public Enterprises and not the Minister for Petroleum and Energy?
This question is pertinent because the State is entering a period when all processes and procedures followed and documents initialled must have legal backing. As the Minister for Petroleum and Energy is the custodian of the Oil and Gas Act, it should fall to Mr Duma, not Mr Somare, to undertake on behalf of the State, all legally binding endorsements. If they be matters financial, it should fall within the jurisdiction of the Finance Minister, Patrick Pruaitch.
The Prime Minister can, of course, sign anything he wishes on behalf of his ministers and Government.
Since the Gas Agreement was signed in May 2007, a silent division of labour seems to have crept into the operations of the Government, whether deliberate or not. Mr Somare has been the international face of the State, meeting with international bankers, organising the financing deal with the State’s shares in Oil Search and, last week, signing the deal with the JBIC.
Mr Duma appears to have been tasked with attending to the domestic aspects of the project, mostly dealing with landowners. Whether or not this is true, that is the perception we have.
This project, as indeed with almost all projects, will involve many more ministries, departments and Government agencies. As the LNG involves a major financial undertaking by Government, it is a public enterprise and falls in Mr Somare’s jurisdiction. It also involves the involvement, advice and even approvals of the Minister for Finance, the Justice Minister, the Minister for Environment and Conservation, the Minister for Planning, Monitoring and Implementation and their various departments.
When this arises, there is always a lead agency or ministry. In the case of the LNG project, we feel that responsibility falls to the Ministry and Department of Petroleum and Energy. Mr Duma is the chairman of the Ministerial Gas Committee, after all.
All other ministers and departments would make their contributions, put in their comments and recommendations and then push it over to the lead minister to make the final submission.
When two ministers make pronouncements over one subject, the public reads it to mean there is dissension within cabinet. The project is the biggest ever undertaken in PNG. It is understandable everyone is excited. We can understand if ministers are falling all over each other to get a good word in and be heard on the subject.
So much so that Mr Duma himself even suggested to his electoral subjects that there would be enough money coming from this project to keep all Papua New Guineans on the dole.
So much so that Mr Somare more recently suggested that only a National Alliance government could deliver the LNG project and that it ought to remain in government to ensure that.
That is the kind of excitement and euphoria that a project of this size inspires in even the most unemotional of our leaders.
Here on, however, care, due process and legal protocols must be followed. Contracts and agreements have come unstuck in the past. Today, we have landowner groups who would be all too happy to rush off to court with any mistake, perceived or actual, to put a stop to the project.
The investors must have a clear idea of who is representing the State, that he has not only political but also legal standing, to commit the State. This is very important, indeed crucial, when the project is fraught with so much landowner disagreement, when financing must be secured from a financial world just emerging from crisis, and when the developer’s deadline for a decision is weeks away in December.
There is also the political matter of cohesion, cooperation and respect between coalition partners in Government. Mr Duma is leader of the United Resources Party, the second largest party in Government.