Will the phoenix rise in ‘resource- rich’ region?


The 1990s was a watershed decade for Southern Highlands (then inclusive of the three districts of Hela).
Several things happened during that decade that could go on to define the character of SHP and Hela in subsequent years.
What perhaps sticks in the minds of many is the commencement of the first oil project in PNG in remote Kutubu and the gas-to-electricity plant in Hides One (in remote Komo sub-district in what is now Hela) in the early 1990s. The mention of ‘oil’ in SHP in casual conversations then invoked panacea-like imagery-that of an oil emirate in the Middle East. A number of other notable events took place in SHP as Kutubu oil and Hides gas power plant projects came on stream.
Firstly, two major timber harvesting and milling companies – Beechwood and Lama – shut down due to management and landowner issues after many years of operation since the late 1970s.
Beechwood harvested tropical rainforest logs from the foothills of Mount Giluwe and processed them into timber at its mill in Kaupena in the Ialibu side of the Imbonggu electorate.
Lama also harvested tropical rainforest logs from the foothills of Mount Ialibu and processed them into timber at its mill near Rongo village in the Ialibu part of Ialibu-Pangia electorate.
At the peak of their operations in the 1980s to the early 1990s, Beechwood and Lama, were major suppliers of hardwood and softwood timber to customers throughout the Highlands, Lae and beyond. They were also major employers of local peopleand offered spin-off benefits.
Secondly, the coffee and tea plantations plus a tea and coffee processing factory and several cattle ranches owned by the Southern Highlands Management Authority – the business arm of the provincial government – closed down due to management problems. These cash-crop and cattle projects and the tea and coffee factories plus trials in other crops such as cardamom and mulberry were located in different districtsof SHP. The tea and coffee processing plant was located in Kaupena along the Highlands Highway due to its close proximity to Mt Hagen and power supply.
These businesses provided employment and spin-off benefits to the people. The agriculture businesses were part of an intervention programme introduced by the first post-Independence government of Prime Minister Michael Somare with funding support from the World Bankin the late 1970s to address the poor socio-economic indicators of SHP as one of the last provinces to be opened up to the outside world.
A World Bank report on 22 June, 1978 summarised the intervention as follows: “The SHP is one of the poorest and remotest provinces in PNG. Furthermore, it is probably one of the most backward areas of the world.
“Project components include nutrition, cash cropping (cardamoms, mulberries, coffee, tea), health, roads, electrification, and formal and non-formal education. This project would represent the first Bank Group effort aimed specifically at the rural poor in PNG.
“IDA assistance would be focused mainly on providing additional funds to enable the Government to implement the project, building the technical and administrative capability of the provincial agencies, and introducing a system for monitoring and evaluating the development impact of these initiatives.”
Thirdly, two major colonial-era companies named Coecon Ltd and Mendi Motors Ltd owned by pioneer businessmen the late Ronald Neville and Doug Sharpe respectively relocated from Mendi to other provinces.
The Neville family moved Coecon to Alotau. The Neville family business was into road construction, retail, sawmilling, hospitality, coffee plantations and even extracting lime out of limestone near Erave.
Ronald Neville was one of the pioneer Australian government field officers (kiaps) and the first regional MP for SHP and his children were raised in Mendi, Erave and other places in the province.
Sharpe shutdown his iconic Mendi Motors and associated businesses and relocated to Mt Hagen and Lae respectively and operated out of those two cities as Wagi Valley Transport. Sharpe, originally from New Zealand, was also a pioneer in Mendi.
During this period, Mendi town’s colonial-era Mendi Hotel owned by the provincial government faced ongoing management issues. The hotel found it difficult to operate as a sustainable business as it used to be under the original ownership of the Neville family (the Nevilles sold it to the provincial government).
Owing to its late start as a province and distance, the SHP was not considered an investment destination for major private sector enterprises and cash crop plantation industry like neighbouring Western Highlands (then inclusive of the three Jiwaka districts). Therefore, the closure and departure of the businesses described above meant significant loss of employment, income and spin-off benefits to many Southern Highlanders.
The Kutubu oil project and the gas-powered electricity in Hides One and oil discoveries in Gobe in Erave and Moran near Kutubu created a façade that SHP was a “resource rich province” and on its way to shed the cloak of its former self that the World Bank described earlier as “one of the most backward areas of the world”.
In reality, the petroleum projects being typical enclave businesses with a small number of mostly highly skilled jobs, meant their socio-economic impact was mostly confined to the immediate “project impacted” areas.
In principal, the provincial government revenues from the petroleum projects was meant to assist the annual budget for overall development of the province.
(The much-heralded arrival of the PNGLNG Project with the start of the construction in 2010 also turned out to be another enclave petroleum enterprise like the existing oil projects).
Amidst the socio-economic vacuum left behind by the departure of the businesses discussed above, the reformed provincial government system came into effect in mid-1995. The new system bestowed in the political head of a province – governor’s position – power and authority that was not available to the provincial premier’s position it replaced.
The jostling for political power and consequential control of the provincial government resources became entrenched as the 1990s come to a close.
The fallout translated into break down in law and order along ethnic lines in certain parts of the province as the 2000s arrived with a “failed election” declared in six of the nine electorates of SHP in the 2002 national election. The political rivalry-induced law and order problems led to the departures of several more businesses.
Notable among them were Westpac Bank who closed their branch in Mendi town and major retailer Bromley & Manton chain ceased operations in Mendi and Tari. An iconic United Church-owned business called Menduli also ceased in the later years.
Different churches and non-government organisations also closed or scaled back on their operations at the time. Many educated people and small businessmen of SHP also relocated mainly to Port Moresby. Today, the “who is who” of Mendi and Tari of the 1980s and 1990s make up a growing diaspora in the national capital and only returning home for family or personal matters. Neryl Lewis, an AusAID official working on conflict and law and order matters in SHP and several provinces made the following observation in a report published in 2007: “While conflict (in SHP) is usually localised and non-violent dispute mechanisms continue to function, the declining influence of traditional mechanisms and weakening State justice institutions (combined with increased access to firearms) indicate that the incidence of violent conflict is likely to increase – particularly when
manipulated by provincial leaders for political purposes.”
Lewis observed that: “Political office tends to be seen as means to gain access to state resources for oneself and supporters (‘wantok’), with parliamentary and electoral systems unable to transcend local loyalties.”
“There is a degree of acceptance of bigman corruption — perception that one’s elected leader is not so much a politician looking after SHP, but a politician looking after constituents personally,” noted Lewis in the article published in the book “Conflict and Resource Development in the Southern Highlands Province of Papua New Guinea” by the Australian National University in 2007.
The call for a separate Hela province out of the western end of SHP, although it had its origins in the 1970s and was dormant, regained currency in the late 2000s as the competition for provincial political leadership along ethnic-lines accompanied by lawlessness dominated. Proponents of a Hela province seized upon the anxiety around the negotiations for the PNG LNG Project and drummed up their campaign with the catch-phrase “no Hela province, no gas”. The Government of Prime Minister Grand Chief Sir Michael Somare, set on realising the PNG LNG project, took heed of the “no Hela province, no gas” mantra and responded favourably. The province formally came into existenceas of the 2012 national election.
Many including the Government staked that the creation of two provinces would address the problems the bigger SHP was facing.
It is now one full parliamentary term plus one year into the second term since SHP officially split into two provinces. The underlying issues and mentalities toward provincial leadership and management appear not to have left both provinces. They have mutated like an aggressive cancer cell.
Going forward, the malignant cancer cell can be obliterated if the patient is willing to undergo treatment available. The treatment is called “honesty and integrity” that ought to be invoked from within the different strata of leadership and populace across both provinces.
Well-meaning Southern Highlands and Hela people who grew up in a far different-looking SHP in the 1970s and 1980s are ceaselessly baffled about what has happened since the 1990s.
The uneasy question for many decent people is whether the mythical phoenix will ever rise from the ashes to fly and realise its real potential in full flight.

  • Dr Kevin Pamba is a Divine Word University-based researcher on development communication and engagement issues in the petroleum project areas in Hela-SHP. He graduated with a PhD on the subject in March this year. Dr Pamba wrote a thesis for his PhD titled “Communicating with indigenous landowners in a liquefied natural gas project: A Papua New Guinea case study”.

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