The governance of natural resources: Issues affecting better management of revenues and distribution of benefits within Papua New Guinea
Papua New Guinea is rich in natural resources, including minerals, oil, gas, timber and fish, and cash crops such as coffee, palm oil, cocoa, copra, rubber, tea and spices which contribute significantly to Papua New Guinea’s overall development. Several mining, oil and gas companies are currently operating in Porgera, Ok Tedi, Lihir, Hidden Valley, Sinivit, Simberi, Tolukuma, Kutubu and Gobe. The operations of these companies have generated an estimated K13.42 billion to Papua New Guinea’s economy. Landowners affected by these developments also receive royalties from those operations. However this wealth has not been translated into tangible human development across the country, as shown in persistently poorly performing social indicators. Instead income from the exploitation of natural resources is being used in unplanned projects and not focused on the delivery of core social functions, such as the provision of a stable and non-distorting policy aimed at building and sustaining the development of a modern market, and legislative and regulatory frameworks, social services, social security and social infrastructure which would lead to the improvement in the delivery of essential services to all Papua New Guineans. There is widespread evidence of benefits not being distributed to all landowners. Landowners are yet to fulfil their aspirations regarding these developments and to see improvements in their living standards. This paper discusses two case studies: the Porgera and Lihir mines, outlining the landowners associations’ experiences, which illustrate issues of governance and management of the distribution of benefit flows from the exploitation of Papua New Guinea’s natural resource wealth.
The focus of the article’s discussion is on governance and management issues that affect the distribution of benefits, delivery of essential services to rural areas of PNG, stability within government, and the expectations of landowners.
Tony Power, ‘Landowner Compensation: Policy and Practice’ in Susan Toft (ed), Compensation for Resource Development in Papua New Guinea (National Centre for Development Studies and Resource Management in Asia-Pacific Project, ANU, and Law Reform Commission, PNG, 1997) 85.
Glenn Banks, ‘Understanding “Resource” Conflicts in Papua New Guinea’ (2008) 49(1) Asia Pacific Viewpoint 24.
Colin Filer, ‘Resource Rents’ in Ila Temu (ed), Papua New Guinea: A 20/20 Vision (National Centre for Development Studies, Research School of Pacific & Asian Studies, ANU, Pacific Policy Paper 20, 1997) 225
M Taylor and K Whimp, ‘Report on Land Issues and Hydrocarbon Framework Study’ (Port Moresby: Fuels and Energy Management Group for Department of Petroleum and Energy, 1997) 19.
Carolyn Fischer, ‘International Experience with Benefit-Sharing Instruments for Extractive Resources’ 2007 (May) Resources for the Future 38.
Aaron Batten, ‘Service Delivery and Resource Revenues in PNG’ on PNGBlogs (29 June 2011) .
Stuart Kirsch, ‘Property Effects, Social Networks and Compensation Claims in Melanesia’ (2001) 9(2) European Association of Social Anthropology 147, 156
K Afosa, ‘Financial Reporting in the Mining Sector: The Case for Landowner Reports in Papua New Guinea’ (2005) 15(36) Australian Accounting Review 89, doi: http://dx.doi.org/10.1111/j.1835-2561.2005.tb00296.x
Glenn Banks, ‘Landowner Equity in Papua New Guinea’s Mineral Sector: Review and Policy Issues’ (2003) 27(3) Natural Resources Forum 224.
M Macintyre, Wendy Mee and Fiona Solomon, ‘Evaluating Social Performance in the Context of an “Audit Culture”: A Pilot Social Review of a Gold Mine in Papua New Guinea’, (2007) 15(2) Corporate Social Responsibility and Environmental Management 100, 106 , doi: http://dx.doi.org/10.1002/csr.155
Susan Toft, ‘Patrons or Clients? Aspects of Multinational Capital-Landowner Relations in Papua New Guinea’ in Susan Toft (ed), Compensation for Resource Development in Papua New Guinea (Law Reform of Papua New Guinea, Monograph No 6, and Resource Management in Asia and the Pacific Research School of Pacific & Asian Studies, ANU and the National Centre for Development Studies, ANU, 1997) 12-13.
Greg Anderson (ed), Papua New Guinea Chamber of Mines and Petroleum Profile 2013, (PNG Chambers of Mines and Petroleum, 12th ed, 2012), 113.
Peter Johnson, ‘Lode Shedding: A Case Study of the Economic Benefit to the Landowners, the Provincial Government and the State, from the Porgera Gold Mine: Background and Financial Flows from the Mine’ (National Research Institute Discussion Paper No 124, 2012) 7.
Colin Filer and Benedict Imbun, ‘A Short History of Mineral Development Policies in Papua New Guinea, 1972-2002’ in R J May (ed), Policy Making and Implementation: Studies from Papua New Guinea (ANU E Press, 2009) Ch 6.
Wikipedia, Porgera Landowners Association
LGL, Scheme of Arrangement Becomes Effective (Latest Announcements, 30 August 2010) 1 .
MRL Capital Limited (MRLC) .
MRL Capital Limited (MRLC), 1-3 .
Anitua, The Strength of a Team that is on Your Side .
Australian Agency for International Development, ‘The Economy of Papua New Guinea: Macroeconomic Policies: Implications for Growth and Development in the Informal Sector’ (Economic Insights Pty Ltd, International Development Issues, No 53, June 1999) 47-50 .
Australian Agency for International Development, ‘Papua New Guinea: The Role of Government in Economic Development, International Development’ (Economic Insights Pty Ltd, Issues No 33, 1994) 132.
Share this article:
This work is licensed under a Creative Commons Attribution 4.0 International License.