Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI)

admin

PNGEITI & JICA SIGN TECHNICAL COOPERATION DISCUSSIONS RECORDS TO IMPROVE DATA QUALITY IN PNGEITI REPORTS

Left to Right: PNGEITI Head of National Secretariat Mr. Lucas Alkan, PNGEITI MSG Acting Chairman Mr. John Uware , JICA Chief Representative Mr. MATSUOKA Hideaki, and Mr. Channan Kumalau of the Department of Petroleum after the signing today.

PORT MORESBY: A three-year technical cooperation between the PNG Extractive Industries Transparency (PNGEITI) and JICA will boost data transparency in the PNG Mining and petroleum sectors.

This will be made possible with the signing of “Record of Discussion” between PNGEITI Stakeholders and JICA experts undertaken in August this year.

The Record of Discussion which forms the basis for the execution of the technical cooperation was signed in Port Moresby today by Mr. John Uware who is acting Chairman of the PNGEITI Multi- Stakeholder Group with Mr. Matsuoka Hideaki from the JICA side.

This signing marks phase two of the JICA/PNGEITI technical cooperation aimed at Improving Resource Related Revenue Management through enhanced EITI Reporting. This second phase will commence in March, 2024.

The PNGEITI Head of National Secretariat Lucas Alkan thanked the Government of Japan through JICA for its continued support in the Government of PNG’s effort to implement the EITI Global Standard to improve extractive sector governance. He acknowledged JICA for coming on board for the second time to help improve extractive transparency which is the core mandate of the EITI – in the PNG Mining and petroleum space.

“PNGEITI is happy that we’ve signed on the record of discussions that was conducted within the month of August by JICA experts”, Mr Alkan said.

“The second project will be undertaken by JICA experts to continue building and improving capacity at the Department of Petroleum and Energy from work that was undertaken in Phase 1 of the project and at the same time, focus on building capacity at the Auditor General’s Office to improve financial data quality, reliability and timely availability of resource related data and information for public use,” Mr. Alkan explained.

The Head of PNGEITI Secretariat said that the three-year program would basically pick up from where JICA had left off at the Department of Petroleum and Energy when Phase 1 of the project ended a year ago and determine ways to improve the quality of the financial data for EITI reporting and to ensure that more resources-related information is made publicly available for transparency purpose as required by the EITI Global Standard. The project is also intended to assist strengthen capacity at the Auditor General’s Office to ensure that the financial data that are used in the EITI annual reports are audited and are reliable to improve the quality of these reports.

Mr Alkan said the JICA technical cooperation program in that it will specifically focus on building and strengthening capacities at two key government organisations; the Department of Petroleum and Energy and the office of the Auditor General. Addressing weaknesses in data reliability and quality in these two agencies would be important to the work of the PNGEITI Secretariat in its endeavour to addressing the data and information gaps as highlighted through the EITI reporting process.

Present during the occasion included key representatives from beneficiary government entities, namely the Department of Petroleum and the PNG Office of the Auditor General.

ENDS.

Approved for Release by Mr. Lucas Alkan

PNGEITI Head of National Secretariat

CALL FOR EXPRESSION OF INTEREST (EOI) FOR PUBLICATION SERVICES (ADVERTISEMENTS & ARTICLES)

The Extractive Industries Transparency Initiative (EITI) is a global standard for promoting transparency and accountability of revenues and other benefits received in the oil, gas and mining sectors, consistent with the EITI Global Standard.

The PNGEITI National Secretariat is hereby calling for expressions of interest from service providers who will be responsible for publishing advertisements and articles relating to the work of the EITI on a monthly basis for a period of 6 months from 1st August, 2023 to 31st January, 2024. Ideally, the service provider will be required to include advertisements and articles relating to EITI implementation activities in its monthly publication of newsletters or magazines and such publication should be circulated to a wider audience.

The Contractor will be expected to provide publication services as follows:

Advertisements: This is to promote the work the PNGEITI National Secretariat and its MultiStakeholder Group (MSG) in terms of EITI implementation in country. The National Secretariat intends to place advertisements with a feature report in the publisher’s monthly publication of its magazines or newsletters. The advertisements will be prepared by the National Secretariat and submitted to the publisher (contractor) on a monthly basis.

Articles: To place articles on EITI implementation activities to promote and create awareness in the publisher’s monthly magazine for the 6 months duration. These articles will cover new EITI initiatives, the validation exercises and the new requirements of the EITI Standard. It will also cover in country activities undertaken by the National Secretariat and its MSG.

Interested bidders should obtain a copy of the Terms of Reference (ToR) from the Secretariat office or download it from link provided below. The Terms of Reference (ToR) provides full details on the scope of work involved. Submissions including a financial proposal for the publication services can be emailed to Francis_Diakon@treasury.gov.pg or delivered to the Secretariat office at Level 8 of The Treasury Building no later than 4:30 pm on the 31st of July, 2023.

Terms of Reference (TOR) can be downloaded here

 

Authorised by:
Lucas Alkan
Head of National Secretariat

CALL FOR EXPRESSION OF INTEREST (EOI) FOR PREPARATION OF THE FY2022 EITI REPORT

The Extractive Industries Transparency Initiative (EITI) is a global standard for the good governance of oil, gas and mineral resources. As a EITI country, PNG is required to publish this annual EITI report that contains all revenues received by the Government and all material payments made by industry companies, and the reconciliation of these payments and receipts. PNG has published 9 EITI Reports in strict compliance with the requirements of the EITI Global Standard since it became a EITI member country in 2014.

The PNGEITI National Secretariat is hereby calling for expressions of interest from credible auditing firms to collect and collate the financial data and other contextual information and prepare the FY2022 EITI Report. This report preparation is scheduled to commence in June for the final report to be published in December this year.

Interested bidders should obtain a copy of the Terms of Reference (ToR) from the Secretariat office or from its website at www.pngeiti.org.pg, which provides full details on the scope of work involved.

Bidders are required to make submissions containing the technical and financial components of the proposal. Submissions can be emailed to Francis_Diakon@treasury.gov.pg or hand delivered to the Secretariat office at Level 8 of The Treasury Building, Waigani no later than 4:30 pm Friday 2nd
June, 2023.

Terms of Reference (TOR) can be downloaded here

Authorised by:
Lucas Alkan
Head of National Secretariat

Call for Expression of Interest for Short Term Legal Consultant to Finalise the Proposed PNGEITI Commission Bill for Statutory Approval and Enactment

The Extractive Industries Transparency Initiative (EITI) is a global standard that seeks to promote open and accountable management of revenues generated from the non-renewable extractive sector (oil, gas and mining) activities. It also seeks to strengthen government and company systems and processes, inform public debate and enhance trust among different stakeholders.

The PNG EITI National Secretariat immediately seeks a competent and credible consulting firm or an individual consultant with the appropriate legal background and the relevant experience to finalise the proposed Bill and assist the National Secretariat to undertake the required scope of work as outlined in the Terms of Reference (ToR) to meet the required administrative process and to ensure that the proposed PNGEITC Act complies with the statutory requirements before it is submitted to the National Executive Council (NEC) for consideration.

This assignment is expected to take approximately six (6) months from mid- May to November 2023. Interested bidders can obtain a copy of the ToR from the Secretariat office or can be downloaded from its website: www.pngeiti.org.pg, which provides full details on the scope of work involved. Skills, Qualifications and Relevant Experience Required. The assignment must be undertaken by a legal expert that who is credible, trustworthy and technically competent. The Consultant must possess the relevant experience in undertaking similar tasks (familiar with the administrative requirements and statutory compliance process in the PNG legislative system) in the past and have the required skills and knowledge to work within the limited time frame to deliver the outcome.

Expression of Interest must be received no later than 4.30pm on 12th May, 2023. Submissions can be emailed to Francis_Diakon@treasury.gov.pg or delivered to the PNGEITI National Secretariat at Level 8 of The Treasury Building.  Terms of Reference (TOR) can be downloaded here

 

 

Authorised by:
Lucas Alkan
Head of National Secretariat

 

 

PUBLICATION OF THE 8TH & 9TH PAPUA NEW GUINEA EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE REPORTS FOR FINANCIAL YEARS 2020 AND 2121 RESPECTIVELY

The Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI) today (31st March, 2023) announces the publication of two flagship reports covering the fiscal years 2020 and 2021 for the extractive sector.

The reports, sanctioned by the PNGEITI Multi Stakeholder Group (MSG) comprising representatives from relevant government institutions, extractive industry companies and civil society organizations is a culmination of team work from this tripartite oversight body that has been working diligently since 2013.

The purpose of the EITI report is to continue to present to our populace a comprehensive description on the operation of the PNG extractive sector, its contributions to the domestic economy and most importantly, the transparency and accountability of revenues and other benefits received by the Government and the affected landowners and communities.

The EITI Reports build on the progress made in the preceding reports that have already been published, implementing recommendations made from the early reports in terms of addressing data and information gaps and increasing the comprehensiveness, reliability and quality of the reports.

The Reports are published in accordance with the requirements of the international best practice standard known as the EITI Global Standard. PNG is among 53 resource rich countries reporting against the EITI Standard.

A summary of the which is the 2021 Report (latest report) and the reports are presented below.

 

 

 

PNGEITI POSITION ON PORGERA MINE LEGACY TAX ISSUES.

The PNGEITI Head of Secretariat Mr. Lucas Alkan says all parties to the Pogera Mine must adhere to rules governing the extractive industry, particularly when dealing with fiscal matters that must be administered and observed according to law. His comments follow a news article on The National citing the Internal Revenue Commission (IRC) that unmet tax obligations of the Pogera mine stood in the way to expedite the mine re-opening process.  Mr. Alkan says a workable and timely strategy that does not impinge on basic laws is a way forward.   Below is the full comment on this issue. 

“The Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI) commends The National newspaper for attempting to bring to light what appears to be the final outstanding issue (among others) in the Porgera Mine recommencement negotiations (more on this in footnote). We’ve noted from the reporting that taxation matters are legacy issues that appear to be standing in the way for the multi-million-kina Porgera Gold Mine to re-open.

We have observed that the Government was on track to conclude negotiations and re-open the Mine by June last year, however this did not eventuate as anticipated. Attempts to reopening the Mine in the second half of last year was not feasible due to the national general elections and the formation of government. It appeared that all negotiations were concluded and a new Porgera Mining Agreement Framework was in place for the Mine to be re-opened in the first quarter of this year.

Surprisingly, we learn that an old Porgera Tax liability dispute is standing in the way for the Mine to be re-opened. The early recommencement of the Mine, preferably within the first quarter of this year is critical for the country as the lead time required for mobilizing resources and the significant start-up capital needed to get the mine back into its full operating capacity would be a significant challenge. On this, we are aware there are also discussions going on with the developer and the government as to who is going to meet the startup cost but we understand Barrick Niugini Limited might meet the full cost of starting up the Mine and government would refund later but unsure as to whether this understanding has been reached or not yet.

With regards to the current standoff, the EITI based on its global best practice principles is of the view that the existing law governing taxation matters must dictate or take precedence over any political intervention. We do not know the specifics of the on-going tax matter but understand that it is related to a tax dispute concerning the ‘old Porgera Mine’. If it is a significant amount of tax owed by Barrick to the Government based IRC’s audit in 2013 then it is a legal tax obligation that Barrick and its joint venture partners need to settle as required by law.

We fail to understand as to why the old Porgera tax obligation/liability clause was inserted into the new Porgera Mining Framework Agreement making it a condition to resolve this legacy tax issue before reopening the Mine. If whatever was reported and commented by PM Marape recently is true then Barrick Niugini Limited and the State need to speed up the negotiation process and resolve this dispute immediately. Both parties should exercise good faith – Barrick Niugini Limited should not pull strings on this old Porgera tax liability matter and delay the re-opening of the Mine. It is understood the State (IRC) may not easily forego if there is a substantial amount of tax liability to be paid by the operator.

Whatever the parties decide to do, they should resolve the tax liability issue through the due process of law but allow the Mine to re-open immediately under the New Porgera Framework Agreement. Political intervention is not recommended to resolve this dispute as this can undermine investor confidence, set bad precedence for the Government and create an uneven playing field for project developers. Barrack Niugini Limited should not put undue pressure on the State to resolve this matter politically in order to re-open the mine as it is not a best business practice.

All stakeholders and the citizens have the right to know the specific issues or the nature of this tax liability issue between Barrick Niugini Limited (BNL) and the Internal Revenue Commission (IRC) as the continued delay in re-opening the Mine continues to have negative consequences on the economy.  The prolonged delay has not only resulted in significant revenue loss to the Government (including the provincial and local level governments in the impacted resource area) but also loss of employment, business opportunities and spin-off benefits to the landowners and the wider communities.

The shutting down of the Mine 3 years ago has had significant negative consequences on the economy including the current foreign exchange shortage that has constrained business operations in the other sectors of the economy. Porgera Mine had been a good source of foreign exchange inflows and its continued shutdown will definitely not going to contribute to the 4% economic growth (that was largely to be driven by the extractive sector) projected for by the World Bank for last year and the real GDP growth of 4% projected for this year in the 2023 National Budget.

PNGEITI commends the transparent negotiation process to date that took substantial amount of time and effort to ensure the interests of all parties were reflected in those agreements. We encourage all parties to continue to respect and observe the laws of the land in this dispute resolution process to address the tax liability issue. We believe that a win-win situation for both parties (Government and Barrick) is to re-open the mine first and work together to resolve the outstanding tax liability dispute later going forward.

ENDS.

Note: This article was initially written for The National newspaper as response note to media query.