Work on Bill progressing

The PNG resource sector at present remains the main driver of the economy. This is a brief commentary by PNG Extractive Industries Transparency Initiative on the work its doing for the resource sector.
THE extraction of minerals such as gold, copper, zinc and petroleum resources such as liquefied natural gas is complex and challenging.
This environment presents both opportunities and challenges for economic advancement for any nation. Governments must apply the right fiscal tools to derive the best value from the extractive value chain particularly for countries like Papa New Guinea which has varied and abundant natural resources and in challenging geography.
Strong political leadership backed by a robust service delivery model is key to unlocking value for the extractive industry activities.
According to PNG Extractive Industries Transparency Initiative (PNGEITI), it is good that the Papua New Guinea’s wheels are in motion to implement ambitious state initiatives ranging from policy reforms to legislative changes to resources laws to unpack the economic value the resource sector has for PNG’s future.
For example, a proposal to establish a sovereign wealth fund was a positive move with key officials from the Department of Treasury and Bank of PNG (BPNG) providing technical oversight to initially park Government windfalls from the PNGLNG Project for budget support and future use.
A drop in oil prices in 2014 appeared to have temporarily watered down efforts to get this wealth fund operational but Papua New Guineans still have the faith that the wealth fund will come to fruition at some point in time for the benefit of future generations.

Head of the PNGEITI National Secretariat Lucas Alkan (left) with Channan Kumalau
of the Department of Petroleum after a state technical working group meeting on the
Extractive Industries Commission Bill recently in Port Moresby.

This shows that the PNG Government does not watch as a by-stander to collect its dues from the extractive industries for budgeting purposes but also be an active participant in the economic value chain of resource projects.
The PNG Mining Act provides for the State to acquire up to 30 per cent share in any mining project and similarly the Oil and Gas Act provides for the State to acquire up to 22.5 per cent shares in petroleum projects. The streamlining of Government business through the Kumul arrangements strongly demonstrate how smart those in leadership think and plan for the future of PNG.
The Kumul arrangement places the State in a better position than before to actively participate in the PNG resources sector. Alongside these activities, the Government is also serious about promoting transparency and accountability in the mining and petroleum sector which is the main driver of the PNG economy.
Since 2014, the Government’s commitment was demonstrated through the publication of six reports in strict compliance with international reporting best practice known as the Extractive Industries Transparency Initiative Global Standard.
The seventh would be published in the coming days.
A secretariat situated at the Department of Treasury coordinates a tripartite constituency of key Government agencies, mining and petroleum companies and civil society organisations for oversight and guidance in the publication process of the EITI Reports.
PNG is among a band of 53 countries promoting transparency and accountability in the mining and petroleum space through the EITI reporting process.
Close to seven years into implementing the EITI, a proposed legislation to transition the Papua New Guinea Extractive Industries Transparency Initiative National Secretariat into a statutory body is undergoing public consultation beginning this month.
This follows the successful conclusion of a series of consultations among legal and technical officials of key Government institutions, mining and petroleum companies and civil society organisations on the elements of what is proposed to be the PNG Extractive Industries Transparency Commission in Port Moresby towards the end of last month.
PNGEITI head of national secretariat Lucas Alkan thanked instrumentalities involved for progress made so far in shaping an appropriate legislation that will be a best fit for the replacement of the PNGEITI National Secretariat which is now situated at the Department of Treasury.
“When enacted into law, the PNGEIT commission will function as a statutory body for the implementation of the global extractive industries transparency initiative standard and principles through the publication of EITI Reports,” Alkan said.
“The push for the establishment of the PNG EIT Commission is part of a bigger policy drive to institutionalise and systemise EITI reporting anchored into the PNG legal and policy framework.
“PNG has made progress with the publication of seven flagship PNGEITI Reports since the country subscribed to the EITI Global Standard in 2014 to promote transparency and accountability in mining and petroleum sectors to enhance good governance and better management of proceeds from these important sectors of the economy.
“Seven years into implementing the EITI Standards through the publication of EITI Country reports and considering the fact that PNG is endowed richly with mineral and petroleum resources, PNGEITI is maturing into its next stage to meet the evolving challenges of the industry.
“What the PNGEITI multi-stakeholder group is doing now is to legally establish an entity to render administrative services for effective EITI implementation in PNG.
“I am pleased to make note that considerable progress has been made with a draft bill already in our hands and also pleased to note that the PNGEITI is comfortable with this piece of legislation which will undergo further public consultation in the coming months.
“A technical team conducting consultation on the draft bill commenced this week in Kokopo, East New Britain, with a weeklong consultation scheduled to take place in Kavieng, New Ireland, starting next Monday.”
PNG is endowed with natural resources for economic development and progress when the resource are put to prudent use as opposed to squandering them or improperly exploiting to the indulgence of a tiny minority.
It is the function of the State to ensure that proceeds of economic activities associated with the resource sector benefits all citizens.