FRANK SENGE KOLMA
NORTH Fly MP Boka Kondra may not know the full import of his proposal to transfer ownership of minerals, oil and gas from the State to landowners.
If he is already aware, then he is being most mischievous.
Such a move, if it were passed by Parliament, will be most damaging to the country with the effect that PNG might see the flight of investors engaged in these industries; it might lead to the abandonment of the proposed LNG projects and chase away future investors.
More, especially, there will be created an unfair society where there will be a few tribes which are filthy rich and the majority will be extremely poor and servile to these tribes.
The relevant part in the Mining Act (section 5) states: “All minerals existing on, in or below the surface of any land in Papua New Guinea, including any minerals contained in any water lying on any land in Papua New Guinea, are the property of the State.”
A similar wording is contained in section 6 of the Oil & Gas Act.
Mr Kondra’s amendment proposes to replace the words “the property of the State” with “the property of the landowning group” or words to that effect.
A very small change of five words but in effect, the proposed amendments to section 5 of the Mining Act and section 6 of the Oil & Gas Act will transfer sovereign rights of the Government to landowners and, in so doing, extinguish those rights.
Further, it will rearrange the entire fiscal regime for resource development in the country such that the ramifications will be far reaching and mostly damaging.
Mel Togolo, a pre-eminent mining executive, now with Nautilus Mining makes the same point: “The rationale for this move to change the current law was allegedly to solve landowner problems and the problems of unfair distribution.
“This argument is totally flawed. In fact, it (the proposed amendment) will create even more and bigger problems.
“No leader in his or her right mind should replace the role of Government with landowners.
“As a Papua New Guinean, I think this is a very dangerous move, driven not in the interest of the country but in the interest of individuals, who have no idea what it would be like without Government.”
This emotive issue has its origins in long standing frustrations among resource owners for a fairer distribution of the benefits from resources development.
Mr Kondra will know this best, having first hand experience with benefits distribution issues surrounding the Ok Tedi mine where he has been an activist for a number of years before entering Parliament.
His submission to the Fly provincial government for funds to drive the campaign to change the law states as much: “The equities given to the landowners from its shares – 30 % in all mining projects of which 5% is given to the provincial government to be shared with the landowners; and 22.5% in oil and gas projects of which a mere 2.5% (is) given to provincial governments and the landowners to share – is insufficient.”
Dissatisfaction by landowners had forced the closure of profitable mines like Panguna copper, Mr Kondra said, and is responsible for the disturbances at Hidden Valley mine in Morobe and Lihir gold mine in New Ireland.
In addition, Mr Kondra said provincial governments were not paid their mining and tax support grants in time to carry out development projects.
That the landowners have not had a fair deal is a fact but the fault lies not in the arrangement of the exiting laws, but elsewhere – closer to Mr Kondra than he might imagine.
There in lies the crux of the problem facing Mr Kondra and every resource owning group in Papua New Guinea.
Mr Kondra’s own words really translate that the problem has little to do with the legal regime governing resources development.
Rather it is a political policy and implementation issue which has worried resource developers and frustrated landowners no end.
“The amendment will enable landowners to have increased equity with financial freedom to negotiate with developers and the government on what is best for them,” Mr Kondra said in his submission.
Mr Kondra’s arguments are not lost on resource developers too.
Resource developers have long felt that equitable distribution of benefits are not streaming down to the resource owners, even under existing arrangements.
The Chamber for Mines and Petroleum said in the statement when the Kondra move first came to light: “The real issue with resource development in PNG is the lack of governance and transparency associated with the use of the benefits generated from resource development.
“Change in ownership will not address this problem, it requires a fundamental shift in the way that governments and landowner leaders manage, utilise and distribute resource benefits and the way they report on this to their respective constituents.
“It requires a major shift towards transparency, integrity and openness.”
Mr Kondra is a member of the People’s National Congress Party, and its leader Peter O’Neill recently said the bill was an initiative of the MP and not the party.
With the political storm it created during the forum in Goroka, the bill will likely be killed when Parliament meets in November.