Papua New Guinea earmarks mineral rights for its indigenous peoplesPublished by MAC on 2011-09-06
Source: New Matilda, Green Left, Ramu Mine WordPress (2011-08-28)
But do they go far enough - or in the right direction?
Papua New Guinea (PNG) has a fresh government.
And it's brought with it a "baptism of fire" in the shape of radical proposals to change the country's existing minerals legislation.
A new law would grant indigenous landowners rights over their subsoil resources, previously held by the state.
It's not an unprecedented proposition. (North American treaties with native nations theoretically grant similar rights). Nor is this the first time the issue has been raised in Papua New Guinea itself.
In 1994, PNG lawyer Peter Donigi argued that corporate mining and petroleum exploitation was unconstitutional and that all permits for such activities were invalid. Said Donigi:
"It is time for change so that the fiction of Crown right and eminent domain, created by the ‘unprincipled white men' to perpetuate and legalise daylight robbery, should not be maintained to defeat our God-given inheritance" [Peter Donigi, Indigenous or Aboriginal Rights to Property: A Papua New Guinea Perspective, International Books, Utrecht ,1994].
Although the proposals have been enthusiastically received by many within the country, they aren't necessarily as ground-breaking as would first appear.
Indeed, PNG's recently-appointed minister of mining, Byron Chan, has said that "re-vesting or restoring traditional landowners' mineral ownership will not disturb the status quo as some might think. Instead, the law will be revised merely to recognize and legitimize the current practice."
Ground breaking steps?
In theory, the measures guarantee that indigenous communities can reject mineral projects they don't want; and that mining companies must now negotiate directly with landowners. But the law per se will not avert conflicts within or between those communities - and these may well increase.
True, the PNG government seems intent on a more equitable re-distribution of mining proifts which have so far ended up mainly in foreign pockets.
It's also undertaking to tighten environmental rules and re-examine the country's headlong rush into deep-sea mineral exploitation.
However, the country's economy will continue to substantially depend on extraction of finite resources, and rely on capital and technical expertise imported from outside.
Already those who own the land (as opposed to the subsoil resources) have received a substantial share of mining profits, at least in recent years. But many others in project-affected areas have been left out of this process, or receive fewer benefits than they believe they should.
More importantly, recognising land ownership "beneath the ground" does nothing to address the rights of those forced to "kaikai dust" (eat dust - as the Ningerum people say in Tok Pisin) or consume mining pollution more generally.
In general, these communities aren't even invited to the negotiation table, but wake up later to find their land degraded beyond recovery.
Arguably, the state's recognition of subsurface mineral rights, while marking a significant advance in principle, would do little or nothing for such communities.
Nor would it help Papua New Guinea's population as a whole escape from manifold aspects of the so-called "resources curse".
[Commentary by editors of the MAC website, 3 September 2011].
Mineral Rights For PNG Landowners
By James Arvanitakis and Spike Boydell
25 August 2011
The new PNG government has announced big changes to the way negotiations with resources companies will take place - and it's customary landowners who look set to benefit.
Just three weeks ago we reported on the Ramu Nickel case that placed cash before custom in Papua New Guinea. The next day, on 2 August, there was a change of government in Papua New Guinea. What also followed was an important change of policy intent by the new government regarding the mineral resource wealth of the country.
In his opening address as Minister for Mines, Byron Chan outlined four key mining industry policy issues:
1. Recognition and protection of traditional landowner's right to mineral ownership on or under their traditional land and seabed;
2. Urgent review of the mining legal regime;
3. Urgent review of deep-sea mining; and
4. Urgent review of environmental protection.
In explaining the new policy direction, Chan said that the customary understanding of land and minerals should not be separated - for they are one and the same. The problem, he argued, is that PNG has adopted mining legislation based on the Australian experience that vests the mineral ownership in the State rather than the landowners.
The argument that follows is that this reliance on Australian law is flawed because the legal fiction of terra nullius was overthrown by the Mabo case. That is, at the time of European settlement, land in Australia was deemed to belong to no one and, therefore, the Australian states subsequently claimed ownership of crown land and the minerals.
In contrast, land in PNG has been occupied and owned by thousands of different customary landowning groups since time immemorial. Like their Melanesian neighbours, land in PNG was not alienated through colonisation with some 97 per cent still owned by customary landowners.
Since Independence in 1975, however, successive governments have claimed a state right over the mineral rights of customary landowners. For the O'Neill-Namah Government, it is time to correct this moral wrong by demanding that the laws governing mining and petroleum extraction recognise what has always belonged to the people.
It is not surprising that those involved in the mining sector have reacted negatively to the news, with detractors arguing that it will have a negative impact on investment and jobs.
The intended changes to mining policy concern the mining investment sector as they now have to deal direct with landowning groups. What this means is that the landowners are an integral part of the ‘deal' - rather than simply negotiating with the government.
The response from custom landowners has understandably been positive given that they have not seen an equitable return from the damage that mining activity often does to their land.
If the O'Neill-Namah Government is to succeed with these changes, it will have to ensure that landowners are properly represented when they deal with resources companies.
The changes are important for the longer-term democratic and economic health of PNG for a number of reasons.
The first is that land grabs have resulted in the loss of over 5 million hectares for timber and resource exploitation - something facilitated by the Special Agriculture and Business Lease (SABL) provisions of the 1996 Land Act. SABLs have always been controversial: proper processes of consultation and negotiations have not always been followed nor have customary landholders always given their informed consent.
In fact, a key inquiry into SABLs is currently underway. It is hoped that the changes proposed by the new PNG government will move to resolve such abuse by ensuring stronger validation process, recording and registering of landowners' interests.
The second reason is that while mining interests may be focused on providing an ever increasing return to their shareholders, customary owners will, if the new policy direction is followed, have the ability to place stewardship before cash.
Some custom landowners are more interested in ensuring the long-term sustainability of subsistence food production than having their land potentially destroyed for short-term economic gain from the minerals that lie beneath.
Sure, investors may look elsewhere if they think they can plunder the mineral wealth more easily in other countries, but the long-term value of the resources owned by PNG customary landowners will not diminish with time. In fact, the opposite is likely to occur.
Yes, there will be landowning groups who are keen to exploit their resources in partnership with mining interests, and they will pay taxes so the state will still receive its return from the process. But more importantly, maybe PNG landowners have finally found a government that is prepared to put custom before cash, stewardship before GDP, and to fully support the integrity of the indigenous relationship with land.
Thirdly, it opens the door to formulate an equitable compensation model in Melanesia that meets the tensions that often arise between the traditional land-owners and the "development imperative" of the government.
In a regional land resource compensation symposium in July this year, the lack of alignment between customary and western worldviews was identified as being at the root of the concern about external demands for land.
Both PNG's wealthy neighbours and international resource interests need to respect the complex nature of customary land ownership in Melanesia and the wider South Pacific region. These policy changes allow for a marriage of interests between the landowners and the investor.
Land tenure and resource ownership regimes are dynamic. They evolve and adapt to meet the needs of a given society at a given stage of their development process. After decades of being neglected, these changes might just meet the needs of PNG society, both now and into the future.
Papua New Guinea: Mining giants react as new gov't promises reform
By Ash Pemberton
28 August 2011
The new government of Papua New Guinea, led by prime minister Peter O'Neill, has announced plans to revert ownership of minerals and resources to traditional landowners.
Mining minister Byron Chan said in a speech on August 11 the government would seek to give traditional owners legal ownership of resources under the land and sea.
Currently, the PNG government owns anything more than six feet under the surface.
Chan also promised an urgent review of mining and environmental laws, especially those involving deep sea mining.
Chan told Radio Australia on August 17 the change would not affect existing mining projects.
PNG's mineral wealth has long been plundered by foreign mining companies who, in league with the government, made huge profits while exploiting and threatening locals and trashing the environment.
If the changes go ahead, mining companies will have to deal directly with landowners, who would have the power to "make or break the mineral projects", Chan said.
The mining industry reacted with hostility to the prospect of having to deal with the people whose lives they often destroy.
Greg Anderson, executive director of the PNG Chamber of Mines and Petroleum, told The Australian on August 19: "This is playing with fire."
An unnamed resources executive in PNG told The Australian the move would "increase sovereign risk and damage investor confidence".
However, Professor Spike Boydell from University of Technology Sydney told ABC Radio Australia on August 24: "I don't think investors will go away for a long time, because they know they're dealing with significant mineral wealth."
He said landowners would need proper legal representation to avoid being swindled under the system.
Other proposed changes promised by the new government include a crackdown on corruption, free school education to year 10, the scrapping of an unpopular "super hospital" project in Port Moresby and the sale of the government's $51 million private jet.
The government also sacked New York-based carbon trader Kevin Conrad from his position as PNG's Ambassador for Climate Change, the Post Courier said on August 18.
Deputy Prime Minister Belden Namah said it was not appropriate for someone has little or no knowledge about life in PNG to be its representative.
Namah "thanked [former PM] Sir Michael Somare for getting political independence but his government will get economic independence", the Post said.
O'Neill was installed by a parliamentary vote on August 2 after months of political limbo. Somare had been seriously ill in a Singapore hospital since April, with his deputy Sam Abal taking his place.
Many members of the opposition and ruling coalition - including members of Somare's National Alliance - voted to remove Somare and his clique from power.
PNG has a long history of similar leadership coups, with fractious alliances forming and dissolving regularly.
Abal launched a legal challenge in the national court, claiming the position of prime minister was not declared vacant before the vote, Australia Network News said on August 25.
Australian National University academic Bill Standish said at EastAsiaForum.org on August 11 that the change of leadership stemmed from the increasing unpopularity of the Somare regime.
Standish said this was due to corruption and lack of democracy, as well as personal rivalries in the ruling coalition and resentment from opposition MPs over unfair administration of the parliament.
Somare had been a dominant figure in PNG politics for more than 40 years. Nicknamed the "Grand Chief", he was the country's first prime minister after it won independence from Australia in 1975 - one of three stints he had in the job.
Somare was also famed for his ability to hold together alliances in PNG's notoriously chaotic parliamentary scene.
Somare's long absence and questions over whether he would return contributed to the breakdown of his regime.
Somare's government was marked by its obedience to corporate interests, especially in the mining and logging sectors.
The government allowed corporations free reign to exploit PNG's natural wealth, while destroying the environment and damaging communities.
Many of the reforms proposed by the new government would mark a step toward social justice, but the changes do not necessarily represent a break with the past.
Many of the individuals in the new government are very much part of the PNG establishment, including some who were ministers in Somare's government.
O'Neill also has a shady history. He faces allegations that he was the beneficiary of fraud involving a real estate deal in 1999, PNG Exposed said on July 27, 2010.
A commission of inquiry into the case in 2002 found "O'Neill had definitely benefitted from the proceeds of the NPF Tower fraud", and recommended charges be laid against him and his accomplices. O'Neill was never charged.
Ilya Gridneff said at New Matilda on August 3: "The Somare-led National Alliance (NA) party is now split with members on both sides of parliament.
"NA is the strongest political party in the country, a machine that has enough financial and political capital to mean something.
"The other smaller parties really don't differ much on policy, indeed they work more as clubs with various personalities attached to them.
"It's a scramble to form government. The opposition is simply made up of those MPs who missed the bus."
Despite the moves toward economic nationalism, O'Neill said the new government would look to strengthen ties with former colonial ruler Australia, the Sydney Morning Herald said on August 9.
His government has already agreed to reopen a detention camp on Manus Island to hold refugees cruelly expelled from Australia.
Give resource ownership back to the people: Chan’s full speech
Breakfast Address to Divisional Heads of Mining Dept & MRA by Hon. Byron Chan, MP, at Yacht Club
11 August 2011
Good morning ladies and gentlemen,
I would like to acknowledge the presence of Prime Minister Hon. PETER O’NEILL, Minister for Finance & Treasury Hon. DON POLYE, Minister for Education, Hon. THEO ZURENOUCH, Works and Transport Minister Hon. FRANCIS AWESA, New Ireland Governor Sir JULIUS CHAN, Mining Secretary Ms NELLI JAMES, MRA Managing Director KEPAS WALI, representatives from the PNG Chamber of Mines & Petroleum and other distinguished guests and Media representatives.
Thank you everyone for coming.
As your new Minister for Mining, I would like to brief you on your key policy issues that the O’Neill-Namah Government will focus on in the mining industry during our term of office. The four key policy issues are:
- Recognition and protection of traditional landowner’s right to mineral ownership on or under their traditional land and seabed;
- Urgent review of the mining legal regime;
- Deep-sea mining; and
- Environmental Protection.
Let me take you through the briefly how each of these issues will be addressed by the O’Neill-Namah Government.
Traditional Landowners' Claim to Mineral Ownership
Traditional landowners’ ownership claim to all hard-rock minerals and petroleum (oil and gas) has never been debated since Independence to the present. The only time issue was debated was in the colonial House of Assembly. At that time, when Bougainville Copper was being developed, the Bougainville landowners claimed that by virtue of their ownership of the land under which the minerals were found, they were owners of the minerals. Land and minerals are part of the same thing; they cannot be separated. Their argument was rejected in the House and the Australian precedent was followed. Since then we have adopted a legislation based on Australian experience that vests mineral ownership in the State and not the landowners.
I would like to make two points about this historical record.
First, Australia has always been treated as a land mass owned by no one – the technical term is terra nullius. Based on the legal fiction, the Australian Aboriginals were not recognized as citizens capable of owning land until as recently as 1971 when they were given citizenship. But the terra nullius doctrine remained until it was thrown out by the Mabo Case in 1992.
The legal consequence of the terra nullius doctrine is this: since no one owned the Australian land mass, the Crown was the absolute owner. Upon attaining independence from Great Britain, the Australian States became owners of the mass and minerals.
That cannot be said in the case of Papua New Guineans have always owned the land handed down from one generation to the next since time immemorial. Commodore Erskine’s Proclamation of part of our country as a British Protectorate from Hanuabada, next to where we are, recognized and protected customary rights to the land. Customary land ownership was protected; not taken away unlike in Australia. From then on to the present, customary land ownership has been recognized and protected. Consequently, we are told that 97% of the land in PNG is owned by customary landowners.
Therefore, there was no reason – like the Australian reason – existed in Papua New Guinea for the colonial House of Assembly to divest the customary landowners’ of their property rights in minerals and petroleum and vest them in the State. Without debating and carefully considering the unique historical circumstances of Australia with that of Papua New Guinea, successive governments since Independence have allowed the law taking away mineral rights of the traditional landowners to remain.
The O’Neill-Namah Government will change that. This Government sees that Papua New Guinea was not a land mass belonging to no one. On the contrary, it was, it is, and it will always be a land that belongs to thousands of tribes who have lived here for thousands of years. Therefore, it is proper that the mining and petroleum legislations recognize and protect what has always belonged to the people in the first place.
To do so will amount to correct a moral wrong – the wrong that what belonged to the landowner was taken away without their consent, taken freely by the force of law. Just as the Mabo Case in Australia corrected the historical error of the terra nullius doctrine, this Government too intends to correct the wrong we have done to our people by taking away their mineral rights by the force of law.
Second, I understand the historical justifications for vesting ownership of minerals in the State during the debate in the Colonial House of Assembly to be based on three key justifications:
- Revenue generation for the young nation;
- Equitable distribution of briefs; and
- Uniform development
I do not see how the revenue generated from mining projects will not benefit the State if and when the minerals are owned by the traditional landowners. On the contrary, the more money Papua New Guineans earn from the sale of their minerals, the more the State will benefit. The State can still generate revenue through the taxation regime as well, just like it does today. Therefore, this argument can no longer hold.
In relation to equitable distribution, I think the current regime under State ownership is concentrating wealth in a few landowners who, according to the current law we have, are not owners of the minerals. So, effectively, State ownership has enriched a few landowners at the expense of the vast majority. Accordingly, this justification too must go.
While uniform development is ideal, at least State ownership of minerals and petroleum have not caused development to be promoted on a comparatively equal basis throughout the country. In fact, even the mining and petroleum areas like Kutubu oil and Lihir gold. So, this justification too must be out.
From one standpoint, Papua New Guineans wonder why the law allows mineral royalty benefits to be given to the landowners in the project areas if they are not owners of the minerals.
I know the Government transfers its royalty entitlements to the landowners, but the perception is that because the State’s royalty entitlements to the landowners, but the perception is that because the State’s royalty is not shared with all the rest of Papua New Guinea apart from the landowners, it is seen as if the landowners are receiving these benefits because they are owners of the minerals; when they are not, in fact they are.
So, the O’Neill-Namah Government re-vesting or restoring traditional landowners’ mineral ownership will not disturb the status quo as some might think. Instead, the law will be revised merely to recognize and legitimize the current practice.
Before I close on this point and move to the second, let me point out to one more reason why mineral ownership must be restored in the traditional landowners. Some development researchers found, from a comparative study, that developing countries that are mineral-resource-rich like Papua New Guinea are cursed when traditional ownership rights is taken away by the State and the transferred to others, especially external investors to own, mine and control is extraction.
However, developing countries who allow their domestic companies and citizens to own and control majority of the interest s in mineral projects avoid going through the resource curse. Therefore, the O’Neill-Namah Government believes that recognizing and protecting landowners’ rights to their minerals and ensuring that they stake a large share of what they own will beat the resource curse and place this country on an accelerated pace of development.
We must note three important facts;
- The Governor of the New Ireland Provincial Government, who has been voted vocal on this point in the recent past, has put a Motion in Parliament in 2009, which the Permanent Parliamentary Committee on Mining and Petroleum has taken up, to review the mining laws to transfer ownership to the landowners. The Committee, I believe, is touring the country to gauge views of the people on this issue. I would be surprised if the Committee does not receive 100% in favour of allowing traditional landowners to won the minerals beneath their land.
- The National Goals and Directive Principles of the PNG Constitution, and the last Government’s Vision 2050 call for empowerment of Papua New Guineans to own and control bulk of the economic activities in this country. Hardly Papua New Guineans are involved in the mineral industry although we have been independent for 35 years. Restoring ownership to traditional landowners, we believe, will allow Papua New Guineans to move towards the achievement of their Constitutional goals.
- Protecting and recognizing traditional landowners’ rights to mineral ownership will not affect current mining projects. It will apply to future mineral projects only, after reviewing and revising the mining legislation to amend the provision that vests property in all minerals in PNG in the State, and divest them to the customary landowners.
Now let me move on to my second point.
Urgent Review of the Mining Legal Regime
The second agenda I will deal with during my term as Minister this year is to review all the laws on or relating to mining. From my personal experience, the following are some of the problems presented by the set of current mining legislations:
- Consultation with the Provincial and Local-Level Governments. There must be a provision for meaningful and substantive consultation process at every step of the mining process between the Provincial and Local-Level Governments in whose province an exploration or development licence is granted. The Open Member of Parliament in whose electorate the mining activity is taking place must also be included.
- Provisions requiring financial capacity and technical capability must be reconsidered to determine how it will discourage junior Papua New Guinean mining companies from entering the industry. If it is prohibitive, then it would amount to failing to give effect to the National Goals and Directive Principles of the PNG Constitution which calls for bulk of the economic enterprises to be controlled by Papua New Guineans: if opportunities are denied to build the necessary experience and build up technical capacity from trial and error by entering the industry, then when will they get the experience, and how will they build up the technical expertise?
- Enforcement of the mining laws will be reviewed in order to provide clarity as to who has authority to do it, and how it must be enforced. This will have to include raising of the penalty fines which, at present I believe, is only up to a maximum of K1,000.00.
- Critical review of the MRA Act o overhauls the MRA Board so that the conflict of interest inherent in the provision for the Regulated to be present with the Regulated to be present with the Regulators is dealt with and ironed out.
I am aware of policy reforms and law s being drafted by my Department on these and other issues. I will support these reforms and look forward to work closely with the staff and management of MRA and the Department of Mineral Policy and Geohazard Management to ensure that the views of the people of this country, the true owners of the rich mineral resources, are recognized and protected. The O’Neill-Namah Government is a government by the people of the people and for the people. And we will ensure that their interest becomes our utmost interest.
Legislation for Offshore or Deep-Sea Mining
Just as we have proceeded into developing our natural gas resources without a specific legislation governing the development and export of our natural gas resources, we have also allowed deep-sea mining to take place without a specific legislation governing and regulating deep-sea mining.
This government will ensure that during the mining legal regime review process, a deep-sea mining policy and legislation is adopted and passed. We must protect and properly regulate deep-sea mining. The current Mining Act 1992 is insufficient to regulate this sector of the industry. I will expect MRA and my department to work on this legislation as soon as possible. My Department, I’m advised, has drafted a deep-sea mining policy by now. We will move fast on that.
Environmental Disaster Management Fund
The fourth and final point before I sit down is that I would like an Environmental Disaster Management Fund to be set up as soon as possible. All mining companies will be required to contribute to this Fund annually, will be sustainable managed, so that in the event of an environment disaster like in Ok Tedi or elsewhere, monies from this Fund will be used to clean up, restore and rehabilitate the environment.
I would like the support of the Department and MRA to look into the setting of this Fund immediately.
Papua New Guinea is an island of gold floating on a sea of oil powered by gas, as they say, and this is true, compared to the small population and the large world-class mining projects we have and the oil projects. Yet, the living conditions of our people tell a different tale.
The O’Neil-Namah Government, by restoring mineral ownership back to the landowners, wants to improve the lives of the people and allow them to own their mineral wealth. Papua New Guineans, as landowners, can become important and equal partners with international investors with the skills, tools, capital and equipment to mine and develop mineral ore deposits for their mutual enrichment.
The State then becomes the regulator; not owner and regulator at the same time. As owners, the landowners will make or break the mineral projects. The endless and bag-load of claims against the State by landowners will become something of the past. The O’Neill-Namah Government recognizes that these policy changes are good for all stakeholders.
PNG to legislate for landowners to own mineral resources
17 August 2011
Papua New Guinea's mining industry has expressed grave concerns over plans by the PNG government to revert ownership of minerals and resources to traditional landowners.
The mining industry warns that such a move will scare off investors and will be disastrous for the country's economy.
PNG's Mining Minister Byron Chan, says the government is reviewing existing laws to give ownership of minerals on, as well as under the land and seabed to the traditional owners.
Presenter: Firmin Nanol
Speaker: Byron Chan, PNG's Mining Minister; Simon Ekanda, spokesperson for PNG landowners; Greg Anderson, Executive Director of PNG's Chamber of Mines and Petroleum
Listen - Windows Media
NANOL: Mr Chan says PNG is an island of gold floating on a sea of oil.
But the minister says it's sad to see that resource owners are living in very poor conditions despite the relatively small population and the world class mining projects in the country.
He says by restoring ownership of minerals to the landowners, the government hopes to allow them to participate in the exploitation of their resources and improve their livelihoods.
Minister Byron Chan says this will be a win-win situation for the landowners and potential investors in PNG's mining and petroleum sectors.
He says currently provincial governments, landowners and people from resource project areas are either left out of the negotiation and participation processes or lose out on long term benefits.
Minister Chan says under the proposed legislative changes the government will be a regulator, and not investor and regulator as is the case now.
CHAN: The law which states that the state owns everything six foot under, both on land and sea. We'd like to replace that possibly almost immediately to revert the ownership back to the landowners and relinquish the state from owning anything from six foot below land and sea, that's what we're looking into right now.
NANOL: That is a big legislative, that will throw things into chaos, isn't it?
CHAN: No, what we are proposing would not affect existing licences. We're proposing amendments that will look into future licences etc. The current agreement won't be affected. All of these things are currently being undertaken now by the department, so that there won't be chaos and the landowners will have more relationship with mining companies themselves, government stands as the regulator.
NANOL: Some groups of landowners are supportive of the proposed changes to give ownership of minerals and resources back to them.
Simon Ekanda is a spokesperson for landowners from villages surrounding PNG's multi-billion dollar PNG LNG gas project in the PNG highlands.
He says it's about time ownership of mineral resources is given back to landowners.
EKANDA: We own what was underneath and on top and above and Constitution recognises the customary law and the customary law, the landowners get rights to own what was underneath and on top and above. So we already own it and you see how this country can move the next five years when this law has been changed and people will have money in their pocket. Now the government has taken away that right. That is a beggars in this country.
NANOL: But PNG's Mining industry has expressed grave concerns about the proposed change of the mining laws and the ownership of minerals on and under the land.
The Chamber of Mines and Petroleum says it's a mistake for the government to give back ownership to the landowners, who have no capital and investment skills.
Executive Director, Greg Anderson says it will scare off investors and will not want to work in PNG.
ANDERSON: That is of great concern to us because you have to have central government control on issuing leases and an organised system. If we tried to deal with landowners on exploration titles, I think it's just going to be a nightmare. But there's many questions that arise with that. If the landowners own the resource and they're going to be shareholders in the project, whose going to pay for it? Where's the money going to come from? What's going to happen to royalty? How can you run a dual system and implementation will mean you've got to revise the whole mining act, which is a major task and will be of great disruption to industry in the meantime. So it is a serious issue.
NANOL: That changes of the ownership and the legal framework would only look at the new or ones that could be explored and mined later in the future, not existing ones?
ANDERSON: That means you're going to have a dual system in the country and I think it's extremely naive, because the government made a statement that they wanted to remove all the landowner problems and do you think the Engans and the Hulis and everybody else is going to be satisfied with one system for them and one system for all the new projects. I don't think it's going to work. And if you've got a policy that's completely ill defined, uncertain, nobody's going to invest on something that's uncertain and you'll scare off the explorers like you wouldn't believe. So I've got to talk it through with the government exactly what they mean, but we do not like the principle this issue of private ownership, because I don't think it's workable in Papua New Guinea.
NANOL: That was Greg Anderson, Executive Director of PNG's Chamber of Mines and Petroleum.
But the PNG Mining Minister Byron Chan, says the government plans to have the changes to the mineral ownership and mining laws ready and put to parliament to pass into law before the 2012 general elections.
Kondra Bill will limit capital outflow
Dr Samuel Maima
18 August 2011
It is a shame that not many Papua New Guineans bothered to stop and ask legislators where have all the dividends and taxes from Ok Tedi, Porgera, Kutubu, Lihir and Misima gone to.
These mines and oil and gas fields were supposed to eradicate poverty, foster social order and justice, and bring economic independence and prosperity. Above all, the money was supposed to be used to build national highways and modern urban centres.
However, there has been no development and the people continue to suffer. Other countries have overtaken us and our rural people continue to this day to build houses made from kunai grass and sago leaves. Something went wrong somewhere.
Today, many Papua New Guineans live in settlements without piped water and electricity and many of these structures are not fit for humans to live in. This is the result of issuing exploration licences to foreign multi-national companies.
It is truly an economic imbalance of scale where a huge chunk of the country's wealth continues to be shipped out of the country, leaving the people looking on as spectators and the government and state institutions high and dry.
The crux of the matter is the outdated British resource law designed and passed by the British parliament in 1922 to exploit the wealth of its colonies.
However, the Kondra Amendment Bill will restore the ownership of resources to landowners, provincial and national governments and we will have in control more than 70% of the wealth from all extractable commodities. This is the process of nationalising the economy with remaining 30% or so going to foreign interests.
The mining, oil, gas and helium acts, as they are in the current form, are unconstitutional. They were drawn up by foreign legal consultants from the World Bank and International Monetary Fund to look after their own interests.
There have been massive exit of capital from our shores, totalling billions of kina over the years. This situation will continue if our mining laws are not amended. The Kondra Bill or the Resource Amendment Bill will correct these legal anomalies and MPs must pass this bill in the next parliament sitting.
This bill is a massive legislative landmark because it will reform and transform our economy. It will allow resource owners to own 15% share at no cost. The provincial and local level governments of where the extraction is taking place will get 5%. The 22 provinces will be allowed to earn 1% each and 5% of the revenue from all extractable commodities in PNG will be used to develop our human resource. Twenty per cent of the equity will be floated as shares to allow Papua New Guineans to buy shares and participate directly. The government, as custodian of the state, will negotiate the remaining 30% or so with the developer. In doing so, we will retain 70% or more for PNG.
This will hopefully make PNG as an emerging economy tiger in the Asia-Pacific region in the next 10 years.