Work has begun on the corrective actions for PNG to be assessed for the second time on its efforts to implement the EITI Global best practice Standard to promote transparency and improve governance in the extractive sector. The second country validation will commence on the 30th of April 2020. The EITI Board granted PNG ‘Meaningful Progress’ overall in implementing the EITI Standard following the conclusion of the first country validation in 2018. This means that PNG met some of the key requirements of implementing the EITI Standard. However, there remained a number of critical areas the Government needed to address in order to fully comply with the Standard. One of the key recommendations is for PNG to publicly disclose licencing information related to award and or transfer of mining tenements and oil and gas licences. This information, including comprehensive information on the licences (mining, oil and gas) for all extractives companies operating in PNG should be made publicly accessible via registers or cadastre systems that are maintained by responsible government authorities. Related to the above recommendation is for PNG to ensure that complete production and export volumes and values for all mineral commodities (including oil, condensate and gas), produced and exported during the year under review for each mineral commodity be made publicly accessible and disaggregated by commodities. Another important recommendation was for PNG to improve transparency in the operations of its extractive State-Owned Entities (SOEs). This is to ensure that a comprehensive list of State participation in the extractive industries, including terms associated with State equity and any changes in the year under review be publicly accessible. Other critical recommendations included increasing the comprehensiveness of all streams of extractive revenues collected by government, improvement in direct sub-national payments and transfers, and improving data quality for EITI reporting, and providing greater details on the distribution of extractive revenues for transparency purpose. The EITI Board allowed PNG 18 months to undertake these corrective actions before the second validation. EITI implementing countries are assessed or validated, consistent with the EITI Standard. The first validation commences 3 years after a country signs up to implement the Standard. The PNG Government signed up to implement the Standard in 2013 and has been implementing it for the last 6 years to date. The validation process is a tool used by EITI International to assess the impact that the EITI process makes at the country level, particularly the policy and legislative reforms to strengthen the systems of government for better management of its extractive wealth. Through this validation process, there are 5 categories that countries can be ranked based on their progress ranging from; No Progress, Inadequate Progress, Meaningful Progress, Satisfactory Progress and Progress Beyond the EITI requirements. PNG having attained ‘Meaningful Progress’ in the first validation is actually a good outcome in its efforts to improve transparency and governance of the sector. This outcome is only one step short of becoming a fully compliant EITI country. Following the first validation, a Technical Working Group (TWG) was established by the Multi-stakeholder Group (MSG) to spearhead preparation for the second validation and the TWG held its first meeting last year. Head of National Secretariat Lucas Alkan said the team would continue to meet and report to the MSG in the coming month as we prepare for the forthcoming validation. “Our intention of setting up the committee is to engage the responsible entities, especially the concerned government departments and State entities to work on the corrective actions leading up to the April 2020 validation period,” said Alkan. During the first meeting, a resolution was made to meet the requirement of public disclosure for areas under license allocation and register. The government entities responsible for disclosure of licenses allocation and registers are working to get that information available on the website and accessible to the public. Currently, these data are separately managed by respective entities in stand-alone databases. Representatives of the responsible entities said to continue working on this requirement in the coming months. Meanwhile, JICA Consultants engaged under the PNGEITI support project have been working with relevant government entities to establish a network where all relevant data-sets will be stored and accessed under one central point. Once a website is up and running, especially at the Department of Petroleum, the stand-alone registers will be uploaded onto the central database, which can then be publicly accessible. “The TWG also resolved to address data quality by working closely with relevant government entities to verify extractive revenue flows and for a possibility of auditing these figures for EITI reporting purposes. “This is to ensure the data they provide are reliable to be included in the annual PNGEITI Reports “For EITI reporting purposes, PNGEITI and the TWG will explore possibilities of engaging reporting government entities and the Auditor General’s Office (AGO) to ensure timely audits. “The TWG through the PNGEITI National Secretariat will consider engaging an independent consultant to carry out a feasibility study, aimed at assisting the AGO to provide timely audit reports for government departments and state-owned entities that report to the EITI process,” Alkan added.

Papua New Guinea was applauded as a fully active member in implementing the Global EITI Standard from its recent participation and country presentation at the recent 8th EITI Global Conference in Paris France in June. The triennial event which saw over 1000 participants from member EITI countries as well as supporting countries and other key stakeholders, showcased PNG as a model country for mainstreaming the EITI standards required for extractive projects revenue transparency and accountability. The EITI Global Conference witnessed all EITI implementing and supporting countries converge to discuss on pressing issues, share experiences, network and provide useful implementation updates and also on the progress of implementation. PNG was represented at the Global Conference by the Multi-Stakeholder Group delegation comprised of the Mineral Resources Authority, Internal Revenue Commission, Oil Search Limited, Exxon Mobil PNG Ltd, the PNGEITI National Secretariat and the Consultative and Implementation Monitoring Council and the PNG Council of Churches. “We commend them all for their active participation and contributions in the conference. We hope that they found the conference to be highly useful and a means to drive us to collaborate better and more effectively in our implementation of EITI in PNG as we make effort to promote transparency and address resource governance issues,” said Mr Alkan. The 8th EITI Global Conference in Paris was considered a general success. “The level of discussion and interaction on the various topics discussed was testament to the event’s value and in bring our EITI community together,” said Mr Alkan. The conference also saw the launch and incorporation of the 2019 EITI Standard. This is the third version of the Global EITI standard, previous standards were 2013 and 2016 standards. “The conference also involved a lot of high level dialogue and engagement to enable the EITI to mobilise and sustain much needed political commitment essential for achieving many of EITI’s goals,” said Mr Alkan. Mr Alkan thanked all MSG member agencies and entities who continue to support the EITI implementation in the country and also for ensuring that PNG is full represented in such global events. “The PNGEITI National Secretariat acknowledged the significant contributions and support of industry companies who funded various costs associated with the Global Conference. We request for your continued support and commitment to EITI in PNG and hopefully we can have a more diversified representation in future Global Conferences,” said Mr Alkan. The delegation visit was partly sponsored by the PNG Government, Exxon Mobil PNG Limited, Oil Search PNG Limited and Newcrest Mining Limited.

Deputy Prime Minister and Minister for Treasury, Hon Charles Abel was appointed to the EITI International Board on the 21st of this month following a regional voting of the Board of nominees recently. He will be representing the interests of PNG and other EITI implementing countries in the South East Asian region in the 2019 to 2022 EITI Board. Head of PNGEITI National Secretariat Mr Lucas Alkan said Mr Abel’s appointment was confirmed on Friday 21st March, 2019 by the EITI International Secretariat. “We are very pleased with the appointment and will be working closely with our Minister to support him to represent PNG and other countries in the region well on the Board of this international body when he assumes in June this year”, said Mr Alkan. He will be ably deputed by his deputy, Ms Maria Teresa S. Habitan, Assistant Secretary of the Department of Finance of the Philip “The appointment of PNG to the EITI Board by countries in the South East Asian region to represent them demonstrated the confidence they had in PNG to lead on the EITI’s work on good governance of natural resources, and to ensuring that the activities from the extractive sector are better managed and contributes to sustainable growth and prosperity for all citizens”, Mr Alkan said. Together with other confirmed board nominees, the new Board, including the incoming Chair and former New Zealand Prime Minister Helen Clark will be announced at the EITI Members’ Meeting on 17 June 2019 at the upcoming Global Conference in Paris, France. The EITI is an international multi-stakeholder body that promotes the open and accountable management of oil, gas, and mineral resources. It currently has 51 implementing countries. The Board is the EITI’s main governing body. It consists of 21 members representing implementing countries, supporting countries, civil society organisations, industry and institutional investors. Each Board member is supported by an alternate who deputises for the member. The Deputy Prime Minister and Minister for Treasury currently serves as the Governor to the Asian Development Bank, the World Bank and the IMF. His recent appointment to the EITI Board is an additional responsibility he will take on to represent PNG and the region. He will be part of a broader committee responsible for priorities for the EITI International organisation and evaluate countries’ performance in their efforts to meet the requirements of the EITI Global best practice standard for the management of resources wealth generated from oil, gas and mining activities.

The power of transparency cannot be undermined because transparency is a barometer for change that serves the interest of the majority as opposed to a tiny minority. In the words of the 7th United Nations Secretary General Kofi Annan, transparency is a powerful tool that can get Africa out of poverty. “By using transparency, suddenly everyone wakes up, the companies and the countries,” Kofi Annan recently quoted in the Süddeutsche Zeitung, discussing ways on how resource rich Africa can one day no longer need development aid. The above sentiments in some ways hold true for the extractive industry dependent Papua New Guinea economy. We can follow a different path to that of Africa but the overall aim of making sure that everyone has a fair shake in the country’s mineral and petroleum wealth must be the ultimate aim of the government, development partners, corporations in the mining and petroleum space. And the Government of Papua New Guinea is not naïve in this regard. An ambitious National Executive Decision (NEC) in 2013 set the wheels on motion for Papua New Guinea to commit to the Extractive Industries Transparency Initiative (EITI), a global initiative implemented by more than fifty resource rich countries like Papua New Guinea, to promote transparency and accountability around the mining and petroleum value chain. Implementing countries strive to meet EITI global standards by way of undertaking a number activities- the main one being the publication of an annual EITI country report with recommendations to improve further improvements in successive reports. The EITI report shows information on how much proceeds along the mining and petroleum value chain, end up where. For example, in accordance with EITI International Standards, a report is expected to record various revenue streams and show how much of the proceeds end up in the government coffers and subsequently boils down to socio economic development. Other contextual information are also reported. For example, an update on the Sovereign Wealth Fund, (SFW) can be found in the PNGEITI 2016 Report and the information on the governments UBS loan can be found in the 2014 Report. So what does EITI really mean for Papua New Guinea, when specifically looking at the economic benefits that this global standard that promotes transparency and accountability, in the mining and petroleum sectors? The answer is very obvious in that EITI, though without immediate punitive powers, acts as a diagnostics tool to measure the benefits of mining and petroleum activities- in strict compliance with the EITI standards that collectively hold the notion that the “wealth from a country’s natural resources should benefit all its citizens and this requires high standards of transparency and accountability,”. Papua New Guinea has published four reports covering the fiscal years 2013, 2014, 2015 and 2016 and those reports have recommendations to improve EITI reporting. For example, the first EITI report, called for the Department of Petroleum and Energy to modernize its paper ledger license registry to an electronic registry to avoidimminent possibilities of data loss in the case of a fire. One other example, is that the Department of Finance has been directed to review trust accounts operated by mining and petroleum interest entities. These recommendations (2013) had been endorsed by the NEC in 2017 for respective government agencies to implement. Affected government departments and agencies include the Department of Treasury, Finance, National Planning and Monitoring, the Mineral Resource Authority, the Department of Petroleum and Energy, the Kumul SoEs, the Mineral Resource Development Company and the Department of Mineral Policy and Geohazards Management. Progress in implementing these recommendations are at various stages at the time of writing. Head of PNG-EITI National Secretariat Mr Lucas Alkan, the man at the focal point of EITI coordination and implementation, says considerable progress is being made to advance EITI activities but he looks at both sides to the coin. He says work to advance EITI in this country is still big relative to the considerable progress made. “We have made progress but we need to make more” Mr Alkan says. Mr Alkan says his major task in 2018, with direction and help from the Multi Stakeholder Group, the EITI overseeing body, is to make sure that PNG undergoes the “validation” process by an independent validator to determine whether PNG had made meaningful progress in meeting the global best practice in managing its natural wealth to be admitted as a compliant EITI country. “Validation is an essential feature of the EITI process. It is intended to provide all stakeholders with an impartial assessment of whether EITI implementation in a country is consistent with the requirements of the EITI Standard,” Mr Alkan says. The EITI International Board confirmed at its meeting in October 2016 that PNG would undergo Validation under the EITI Standard beginning on 1 April 2018. This work will include a visit to PNG by EITI International based in Oslo, Norway. The visit is tentatively scheduled for April-May 2018. PNG’s Validation report will, in addition, address the impact of the EITI, the implementation of activities encouraged by the EITI Standard, lessons learned in the EITI implementation, as well as any concerns stakeholders have expressed and recommendations for future implementation of the EITI. This work will include initial consultations with stakeholders, who will be invited to submit any other documentation they consider relevant. Without prejudice to the ability of the Board to exercise their discretion to consider all available evidence, the Secretariat should not take into account actions undertaken after the commencement of Validation. Based on these consultations, the International Secretariat will prepare a report making an initial assessment of progress against requirements in accordance with the Validation Guide. The report will not include an overall assessment of compliance. The EITI International Board will appoint an Independent Validator through an open, competitive tendering process. The Validator will report to the Board via the Validation Committee. The Validator would then assesses whether the Secretariat’s initial assessment had been carried out in accordance with the Validation Guide. This will include: a detailed desk review of the relevant documentation for each requirement