improving extractives governance
PNGEITI Report Releases
The EITI holds all implementing countries to the same global standard. Through Validation, the EITI’s quality assurance mechanism, implementing countries are assessed on their ability to meet the provisions of the EITI Standard.
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PUBLIC NOTICE Regional Consultation on the Papua New Guinea Extractive Industries Transparency Commission (DRAFT) Bill
The Government of Papua New Guinea has moved in the direction of taking transparency and accountability within the mining, oil and gas sectors seriously. Since 2014, the PNG Government has demonstrated its commitment to implementing the Extractive Industries Transparency Initiative (EITI) through the publication of seven reports in compliance with the requirements of the international best practice Standards reporting. The PNGEITI National Secretariat under the Department of Treasury, coordinates a tripartite Multi-Stakeholder Group consisting of key Government agencies, mining and petroleum companies and civil society organisations for oversight and guidance in the publication process of the EITI Reports. Papua New Guinea is among 53 countries that promotes transparency and accountability in the mining and petroleum space through the EITI Reporting process. We are pleased to inform the general public that substantiative work has been undertaken to anchor the Global EITI Reporting Standard and practices into PNG laws, taking into account local practices and the operating environment. This legislation process is consistent with the Government’s National Policy Framework on Transparency and Accountability adopted in NEC Decision NO. 80/2019. The proposal to enact into law a transparency commission, is to provide the legal basis to administer and coordinate the publication of the EITI Reports, and its operation as an entity to coordinate implementation of the EITI Standards in the country. The commission has been proposed to be named as the Extractive Industries Transparency Commission (EIT Commission). As part of a nationwide consultation on a draft (EIT Commission Bill), a technical team comprising experts from key Government departments will be conducting a consultation on the draft PNG EIT Commission Bill to ensure the proposed legal set-up of this transparency commission adequately reflects the views from all stakeholders as required in this legislative process. This consultation will take into consideration other extractive sectors to include forestry, fisheries and agriculture. The public, especially the stakeholders in the extractive sector (oil, gas, mining, fisheries, forestry and agriculture) are invited to meaningfully participate in this important consultation at the respective venues and dates as set out in the schedule shown on the picture. AUTHORIZED BY LUCAS ALKAN HEAD OF PNGEITI NATIONAL SECRETARIAT
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Extractive Industries Transparency Commission Bill ready for regional consultation
A proposed legislation to transition the Papua New Guinea Extractive Industries Transparency Initiative National Secretariat into a statutory body is ready for public consultation beginning next month. This follows the successful conclusion of a series of consultation 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 Papua New Guinea Extractive Industries Transparency Commission. PNGEITI Head of National Secretariat Mr. Lucas Alkan thanked instrumentalities involved in the 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 currently placed under 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,” Mr. Alkan said. “The push for the establishment of the PNGEIT 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 considerable progress with the publication of seven flagship PNGEITI Reports since PNG subscribed to the EITI Global Standards 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 is to legally establish an entity to render administrative services for effective EITI implementation in Papua New Guinea. “I am pleased to note that considerable progress has been made so far with a draft bill 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 will commence next month and I encourage all stakeholders to participate in the consultation so that we get a final product that has the inputs of the wider public. “First consultation will be held in the New Ireland Province for the New Guinea Islands region and then proceed to the rest of the regions in the country,” Mr. Alkan said. Caption: PNGEIT Commission Bill Technical Working Group Team Members from left; Eva Boas (Department of Personnel Management), Vanessa Asivo (Internal Revenue Commission) Channan Kumalau (Department of Petroleum) and Lois Stanley (Constitutional Law Reform Commission) at a consultation for the proposed bill mid-June in Port Moresby.
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Extractive Industries Transparency Initiative (EITI) task limited to reporting
Anomalies in the extractive industry governance system in Papua New Guinea can only be tidied up by parties other than the PNG Extractive Industries Transparency Initiative (PNGEITI) with Government agencies taking a lead. Head of the PNGEITI National Secretariat Mr. Lucas Alkan was commenting on a recent report by an overseas media on two Australian companies omitting corporate income tax in certain recent years. The Guardian publication on its website “Australian mining companies have paid little or no corporate income tax in PNG despite huge profits “on Tuesday 8th June, 2021 depicted a complex PNG taxation system that created room for anomalies . The news publication corroborated the findings of the 2018 PNGEITI Report with other sources. According to this report; St Barbara, operator of the Simberi Mine in New Ireland Province paid no corporate income tax between 2012 & 2020 Newcrest, operator of the Lihir mine in New Ireland Province paid nothing as well in corporate income tax during the 2017/2016 financial years. “PNGEITI, through the reporting process sheds light on revenue leakages, policy and legislative inefficiencies and ineffectiveness with the aim of influencing policy thinking to help shape a robust governance system in the mining and petroleum sector,” Mr Lucas Alkan said. He explained that PNGEITI detects the anomalies and defects in the system and “it is the onus of stakeholders in the industry to take the relevant decision to make things work better for the industry.” “PNGEITI’s core mandate is to promote revenue transparency in the mining and value chain through the publication of the EITI reports which is a culmination of efforts of a Multi-Stakeholder Group comprising industry companies, relevant government agencies and civil society organisations. EITI work in PNG and other EITI member countries is limited to reporting and working on ways to improve successive reports. Report recommendations and findings are left open to the public with the hope that those findings and recommendations may receive the attention that they deserve and acted upon. When the EITI reports are published, EITI becomes the backend with the discretion now with parties concerned to act upon. “Mr Alkan said. “The EITI Reporting process in PNG continues to facilitate critical policy and legislative reforms and improvement in current institutional capacities and business practices on key Government department and agencies for improved governance of the extractive sector. One example is the Department of Petroleum & Energy. It has benefited from a JICA and PNGEITI technical cooperation with the installation of electronic license registry as a result of earlier EITI reports decrying its paper ledger license registry which was prone to fire hazards,” he said. Mr. Alkan urged members of the public to make productive use of the PNGEITI reports and to come up with constructive and sensible debates on matters affecting the industry.
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PNGEITI praises open dialogue to re-open Porgera Mine
The PNG Extractive Industries Transparency Initiative (PNGEITI) has praised the open stakeholder dialogue culminating in reaching consensus to re-open the Porgera Mine in Enga Province. Parties in April this year sanctioned a “Framework Agreement for the New Porgera Project” which spells out the roadmap to reopen the mine. Mark Bristow, CEO and President of Barrick Niugini Ltd Gold last week explained key elements of “Framework Agreement for the New Porgera Project” at a public forum at the Piam Oval in Porgera witnessed by PNG Prime Minister James Marape, landowners and other leaders. In the new agreement, PNG stakeholders will together own a 51 % equity stake in the mine while Barrick Niugini Limited (BNL), a joint venture company in which Barrick and Zijin Mining Group each own 50% will hold 49 % which BNL will remain the mine operator. At the end of the first ten year period, the PNG stakeholders will have the option to purchase BNL’s 49 %. PNGEITI Head of Secretariat Lucas Alkan commented that the open discussion throughout the negotiation process on the part of the mine operating lead, government and landowners has culminated in this agreement signing by all parties. “We at the PNGEITI congratulate the Government and the project lead BNL and other stakeholders for reaching a consensus decision to reopen the mine. “Porgera has been an economic powerhouse for many years and people in the country have been waiting for the outcome. “We commend the Prime Minister Hon. James Marape, the President and CEO of BNL Mr. Mark Bristow for the leadership in ensuring that the negotiations were done in the transparent and open manner. “PNG Extractive Industries Transparency Initiative highly encourages such openness in the negotiating process for resources benefits and importantly the responsibilities that each stakeholder must take to ensure smooth flow of proceeds. “We look forward to working with the Government and the project operator in the areas of transparency and accountability to help derive best value for all stakeholders. PNGEITI’s commitment to reporting on developments in the mining and petroleum space is becoming stronger with new reporting dimensions taking shape as we making progress in promoting transparency and accountability in the PNG mining and petroleum industry” Mr. Alkan said.
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EITI implementation in Papua New Guinea helps shape policy in the PNG mining and petroleum sector
The publication of the PNG Extractive Industries Transparency Initiative reports are meaningless if they do not give rise to critical policy debates for a robust mining and petroleum sector in Papua New Guinea, an official says. Head of PNGEITI National Secretariat Mr. Lucas Alkan told leaders at the 36th Australia Papua New Guinea Business Forum on Wednesday that EITI work in PNG is progressively helping to shape public policy discussions through EITI report recommendations, and open discussions within the PNGEITI Multi Stakeholder Group (MSG). Papua New Guinea to date has published a total of seven (7) EITI country reports since the PNG Government signed up to join other 50 plus mineral resource rich countries in 2014 to implement the EITI Global best practice Standard. To promote transparent and accountable conduct of business in the mining and petroleum industry the core function of EITI implementation is the publication of annual EITI country reports consistent with the requirements of the EITI Global Standard. Mr. Alkan said those reports must form part of policy discourse in mining and petroleum sectors of the economy as opposed to collecting dust in the shelves. “Producing EITI reports are meaningless if these reports do not give rise to critical policy and legislative reforms for better management of the sector, “he said. Mr. Alkan said important progress had been made since PNG’s first EITI report in 2015, providing greater transparency over revenue received by the government from the country’s mining and oil and gas industry. He said the PNG Government and resource owners receive maximum resource project benefits, with that EITI reporting process identifies revenue leakages to improve corruption perception which would in turn boost investor confidence. “To improve the country’s investment climate, we have to be transparent in all forms of payments, starting with the negotiation process for development projects to how licenses are issued. “EITI is a platform that enables all stakeholders to work collaboratively and build trust to realise PNG’s vision for resources development,” Mr. Alkan added. “Some of the improvements and reforms arising from the work of EITI in PNG are that EITI;• has been complementing other Government initiatives like the Open Government Partnership (OGP) and the Independent Commission Against Corruption Law (ICAC);• through its first report, ensured that the Income Tax Act was amended to remove secrecy provisions in the Act to enable the IRC to disclose tax revenue data for EITI reports.• provisions have been included in project MOAs and Agreements on benefits sharing arrangements for contract transparency;• establishes a platform for better collaboration and open discussions between different stakeholders to build trust;• ensures a comprehensive report with available data covering the extractive sector that is now used as reference in debates, which is not the same some years back;• Report outcomes have influenced the Government to embark on reforming policy and resource laws to strengthen government systems and to ensure fair share from the benefits derived from resource developments;• is now making progress in comprehensively reporting at sub-national levels of government, beneficial ownership disclosure, and increase transparency in State Owned Entities.• has forced the government to disclose quasi-fiscal data and taken steps to address opaque nature of some tax incentives such as the Infrastructure Tax Credits.• report recommendations have pushed the PNGEITI Secretariat and the Auditor General to work together to improve the quality of the financial data in the EITI reports.“In addition, a National Policy Framework on Transparency and Accountability was approved by Cabinet in 2018,” he said. Mr. Alkan said among the achievements made so far in EITI implementation in the country, the National Policy Framework on Transparency and Accountability has set the basis for the creation of EITI PNG as an independent administrative body to sustain its operation and the draft law is now being finalised.
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PNG EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE ANNUAL PROGRESS REPORT 2021
FORWARD The year 2021 saw significant improvement in the management of the Coronavirus Outbreak in the country and particularly in the implementation of the EITI Standard. As with many EITI implementing countries around the globe, Papua New Guinea (PNG) experienced disruptions in implementing the EITI Standard due to the pandemic lockdowns and restrictions imposed by the Government. With more relaxed measures enforced through the National Executive Council (NEC) Decisions, the PNGEITI Multi-Stakeholder Group (MSG) sought to progress outstanding activities carried over from the 2020 Annual Work Plan due to the Covid -19 pandemic shutdowns and restrictions. Despite the adverse impacts of the Covid-19 Lucas Alkan Secretariat , Head of PNGEITI National Pandemic that delayed many planned activities and culminating in wider negative socioeconomic consequences for the country, the MSG remains steadfast in maintaining its position to strengthen good governance in the extractives sector through the implementation of the EITI Global Standard. Evident in our long-lasting shared vision is the continual support by the PNG Government in supporting the program with recurrent funding through the national budget; which had resulted in the publication of seven (7) PNGEITI Country Reports consecutively that covered the financial years 2013 to 2019. Furthermore, the publication of various other studies including; the subnational payments and transfers, the State-owned Enterprises, the Beneficial Ownership Disclosure, and the Contract Transparency (Disclosure) all aimed at improving the reporting and disclosure in the country’s extractives sector. This report fulfils the EITI Standard’s mandatory requirement (Requirement 7.4) relating to the Review of the outcomes and impact of EITI implementation through the production of an Annual PNGEITI Progress Report (APR). The APR is intended to highlight the outcomes and impacts of EITI implementation by member countries in a particular fiscal year. The PNGEITI MSG has fulfilled this requirement with the production of eight APR’s covering the fiscal years 2014 to 2021, with the diligent facilitation by the National Secretariat. Key highlights in the year 2021 include; the staging of the PNGEITI Regional Consultations on the draft legislation (PNGEITI Commission Bill) , PNGEITI’s participation in the Mining Development Forums and the MoA’s and the preparation of the PNG Validation in 2022. A setback for the year was the delayed publishing of the 2019 PNGEITI Report due to the Covid19 related disturbances. The combined efforts of the various MSG Technical Working Groups (TWG) resulted in the publication of other important reports that included; the delivery of the SOE scoping study, the Beneficial Ownership Disclosure Report and the Contract Transparency (disclosure) Report. With the emphasis placed on establishing the PNGEITI as a Statutory Commission, the National Secretariat and the MSG Technical Working Group conducted consultations in the four regions of the country. The outcome of this exercise was the successful completion of the draft Bill. The next phase will be to ensure that the regional views and feedback collected are considered and the draft Bill finalised for submission to Parliament in 2022. 5 The increased partnership between PNGEITI and the mining stakeholders resulted in the EITI provision being included in the Simberi Mining Project Draft MoA. The other projects which have included EITI clauses are the K92 Gold Mining Project in the Eastern Highlands Province and the Woodlark Gold Mining Project in the Milne Bay Province. In response to the negative impact brought about by the Covid-19 Pandemic on EITI implementing countries, the EITI International allowed flexibility in the reporting requirements for member countries to cope with the impact of the Covid 19 pandemic. The PNGEITI MSG requested for a series of extensions to the Validation which is now set to commence in April 2022. In addition to the above programs, the PNGEITI annual recurrent programs were implemented with technical support from international development partners such as the World Bank, the Japanese International Cooperation Agency (JICA) Technical Cooperation Program and industry companies’ support. The PNGEITI-JICA Project delivered substantive output which resulted in increased data quality in the FY2019 PNGEITI Report as well as enhancing collaboration between the Department of Petroleum and the MSG. The two and a half year project which was scheduled to conclude by the end of 2020 ended in early 2022 instead due to the Covid-19 restrictions and shutdowns. Further, the 2021 PNGEITI communications programs achieved satisfactory results in 2020 as a result of maintaining its presence in the mainstream media promoting the 2018 and 2019 PNGEITI Reports findings. The various online discussions and engagement events proved invaluable for various audiences towards the end of 2021. The limited outreach activities conducted made impact in terms of stimulating dialogue and collaboration amongst local civil society groups. It also enabled State regulators and academics, both domestic and international to address pertinent issues related to extractive sector governance in PNG. Administratively, the regular MSG quarterly meetings were affected due to the Covid-19 pandemic shutdowns and social distancing measures imposed by the Government. Despite this challenge, the National Secretariat supported the MSG to deliver key and priority activities in the 2021 Annual Work Plan. The various MSG Technical Working Groups were able to attend meetings, and the consultations and workshops. The recent emphasis on gender balance in the 2019 EITI Standard is captured as a recurrent item within MSG annual work plan going beyond 2021. Data from the MSG meeting minutes indicated a need to strengthen female participation however, despite gender disparity, female voting members played a significant role in enhancing the EITI implementation from years 2012- 2021. I hope this report serves its purpose of informing the progress made in implementing the EITI Standard in Papua New Guinea. I hereby present this annual report for the financial year 2021 for your utmost interest and consideration. PNGEITI 2021 Annual Progress Report Download Preview
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