Mining Act posing new challenges

Both the mining and petroleum sectors are now facing a challenging period with changing legislations, according to the PNG Chamber of Mines and Petroleum.
Speaking during the opening of a two-day media workshop in Port Moresby yesterday, chamber vice-president Richard Kassman said the most-crucial of all were proposed changes to the Mining Act.
“PNG needs a competitive and investor-friendly legal, fiscal and regulatory regime,” he said.
“The proposed changes to the Mining Act will have significant negative impact on State revenue, landowner and project stakeholder benefits, jobs, and many other social initiatives the industry currently supports as its community service obligation. It must be stressed that the chamber supports a properly-structured and independent review of PNG’s Mining Act, and acknowledges the Government’s prerogative to make changes to legislation and policy to realise the country’s development aspirations.
“However, any changes must be transparent, internationally competitive and protect the long-term attractiveness of PNG as a destination for investment.”
Kassman said apart from the proposed changes to the Mining Act, the passage of the Mineral Resources Authority (MRA) Act recently was also of concern as it sent a very wrong signal to investors.
“We believe that the performance of MRA over the last decade is a credit to Government,” he said. “The excellent operating standards within the mining sector are an indicator of the good work of the regulator.
“MRA has managed the regulatory environment for mining.
“It has earned the respect and support of industry and other stakeholders, including landowners, and contributed to rising professional standards throughout the mining sector.”
Kassman said another significant legislation that was starting to have a significant impact on the mining industry is the Public Money Management Regularisation (PMMR) Act 2017.
“The act has impacted MRA, the sector’s regulator,” he said.
“Now with limited funds, the MRA has been forced to suspend its work, including important safety inspections, participation in negotiations with landowners and local governments, and processing of new exploration and mining lease applications.
“The PMMR Act requires all Government agencies to remit their operating funds to consolidated revenue, and they will be allocated only 10 per cent of their usual operating budget from which to conduct business. The MRA is primarily funded through a production levy on the mining industry.
“At the creation of the MRA, the industry voluntarily agreed to the imposition of this levy to guarantee a viable authority.
“The diversion of these funds to consolidated revenue is inconsistent with that understanding and leaves the MRA without the resources necessary to carry out its core functions.
“The chamber has called on the Government to urgently make funding available to enable the MRA to continue the full scope of its responsibilities under the Mining Act.”
Kassman said in petroleum, the chamber was working with the Department of Petroleum and Energy to transition the department into an authority.
“The creation of the Petroleum Resources Authority is very critical at this stage, given the increase in hydrocarbon activity and the current constraints and challenges the department is facing in effectively regulating the oil and gas industry.”