"We declare our first goal to be for every person to be dynamically involved in the process of freeing himself or herself from every form of domination or oppression so that each man or woman will have the opportunity to develop as a whole person in relationship with others".

- Papua New Guinea National Goals and Directive Principles

Thursday, 25 November 2010

The mobile squads already are the mining industry's private security force Gari

Gari Baki has recently raised concerns over the RPNGC's relationship with Exxon Mobil. In particular, he claims: "If we allow LNG to be continuously funded by Exxon Mobil then there is no independence of the constabulary ... and the perception and the notion is that it is just another private security company for the LNG" (Radio Australia, 22/11/10). How genuince this concern is, may be questioned (what has he done about the below situation in Porgera?). Nevertheless the issues Gari Baki raises are important ones. The implications of mining capitals power to dictate policing priorties are identified in the following extract taken from the Legal Brief (2009) on the Porgera Joint Venture (PJV) filed by the International Human Rights Clinic and the Centre for Human Rights and Global Justice:

For a full copy of the Legal Brief see: http://protestbarrick.net/article.php?id=624

Wednesday, 24 November 2010

Tax Exemptions for the LNG Project

Asia-Pulse  (23/11/2010)

The multi-billion dollar Liquidified Natural Gas (LNG) project in Papua New Guinea will be exempted from import duty during its construction and preparation phase according to the Customs Tariff (2011 Budget) (Amendment) Bill currently before parliament.

The Customs Tariff Amendment bill is attached with the batch of 2011 Budget bills that were tabled in Parliament on Tuesday last week.

The bill clarifies any doubt about the import Duty Exemptions granted to the PNG LNG Project to be consistent with the intent of the PNG LNG Gas agreement, the budget.

The same amendment bill if passed will implement further reductions to import duties over a period of seven years.

According to Internal Revenue Commission (IRC) Deputy Commissioner of Operations John Pomoso the bill is aimed at achieving a more uniform as well as lower tariff rates; and to encourage a more efficient and productive private sector.

Mr Pomoso said the reduction to import duties and low tariff rates will gradually lead to lower prices for basic goods including food items.

From 2012, the Tariff Reduction Program will reduce input costs for many businesses, reduce the cost of development activities and reduce the price of many consumer goods, Mr Pomoso said.

Other budget bills include the Income Tax (2011 Budget) (Amendment Bill) which when passed will impose a penalty on directors of private companies for failing to take action on notices from the IRC on unpaid salary and wages tax.

The passage of the amendment to the Income Tax bill will ensure that a specific reduction tax is given to companies that are environmentally friendly and cause less pollution to the environment.

Tuesday, 23 November 2010

Sovereign Wealth Funds - Part 2

Peter Johnson (2010) from the National Research Institute, after considering global experiences with wealth funds, concludes that if the Sovereign Wealth Fund is to achieve its goals then:

"The PNG Government must also build the capacity of the public service to develop and
implement programs that achieve the goals of the Medium- and Long-Term Development
Strategy. Returns on economic and social expenditure will only increase if development
priorities are well developed and implemented. Under economic pressure the rules protecting resource revenues have historically failed, and the political tide has largely succeeded to the detriment of PNG.

The framework and the institutions that are responsible for the resource fund and spending those funds will determine if PNG succeeds or fails to develop from the proceeds for its latest boom. In broad terms, to overcome what has historically been low (and sometimes negative) social and economic returns from resource revenue, policy makers must design appropriate safeguards against poor public policy choices, a lack of governance, transparency and accountability, rentseeking behavior and corruption".

These conclusions are not new, Papua New Guinea's Auditor Generals and Ombudsmans have been making them since the early 1980s. Perhaps a substantial shift in the political terrain of the country is required, one directed from below.  

For Johnson's paper please follow this link.

The Department of Treasury and the Bank of PNG have also released a discussion paper on the Sovereign Wealth Fund, follow this link.

Sovereign Wealth Funds - Part 1

Mohammad Bashir on Sovereign Wealth Funds (Post-Courier, 23/11/10)

The development of the PNG LNG project and the prospect of others will not only transform the country’s economy and improve living standards but as a major revenue source, it will give rise to macroeconomic pressures which are more likely to be prevalent due to the heavy reliance on commodity based revenue.

In the 2011 budget handed down last week, the Government considered and agreed to a joint Treasury-Bank of PNG working group’s work and the separate work undertaken by the department of Public Enterprises on alternative arrangements to help manage the significant revenues arising from this project to be used for PNG’s development needs while promoting macroeconomic stability.

As a consequence, the Government has decided to establish a Sovereign Wealth Fund consisting of a consolidated pool of offshore funds with three co-ordinated and integrated funds with all expenditures being through the budget process. Those co-ordinated funds include a stabilisation fund, a future (savings) fund and an infrastructure fund.

To oversee the establishment of the offshore Sovereign Wealth fund for PNG, the Government has established a secretaries committee on Sovereign Wealth fund that will take all necessary steps to establish this important undertaking.

In a discussion paper dated April 16, 2010, among many issues, the working committee noted that a robust fiscal framework was necessary to support the management of the windfall envisaged from the LNG project to underpin social and economic development.

From past experience, the Mineral Resource Stabilisation results were mixed and eventually closed in 1999 when the entire remaining balance was drawn down. Trust accounts although had apparent successes, the committee noted that it had significant limitations.

With LNG revenues expected to commence in 2014, through dividends and substantial tax revenues, the most immediate impact on the economy is expected to a sizeable appreciation of the kina. The committee further noted that it will also be difficult to predict the extent the currency will appreciate as it depends on a range of other factors.

After various considerations in terms of fiscal framework, domestic liquidity, inflation and macroeconomics limitations of onshore funds, the committee considered offshore fund as the preferable option.

An onshore fund would also be invested in the local economy in a manner determined by the Government through the annual budget process as a rate that does not unduly appreciate the currency or cause undue inflationary pressures.

From a development and investment standpoint, the committee noted that the extent of Government spending should be in accordance and consistent with PNG’s development needs and plans while maintaining macroeconomic stability.

Monday, 22 November 2010

Edited Transcript from Yesterday's Baki Interview

Suspended Police Commissioner, Gari Baki, 22/11/2010, Radio Australia.

Baki: Ten million kina was a result of the briefing I gave to cabinet. Specifically mentioning the fact that the LNG operations up in the Southern Highlands is basically being funded by Exxon Mobil. All police operations up there is entirely funded by Exxon Mobil ... It is for the LNG and the LNG corridors ... If we allow LNG to be continuously funded by Exxon Mobil then there is no independence of the constabulary ... We would lose our constitutional independence, and the perception and the notion is that it is just another private security company for the LNG. And that is why I made representations to the government ...  and I want the government to assist me in terms of funding.

Sunday, 21 November 2010

"All Police Operations Up There is Entirely Funded by Exxon Mobil" - Gari Backi

Radio Australia - 22/11/2010

Papua New Guinea's suspended police pommissioner, Gari Baki, maintains that he never lied or misled the government over a $US4 million fund for security operations for the country's Liquid Natural Gas Project.

Mr Baki says the monies were part of funds he had requested and had approved by cabinet for use by the police in providing security for the multi-billion dollar LNG project.

He says it is not right for the police to rely on developers to pay for police security operations for the project.

Mr Baki says he was pleased when cabinet approved the funds.

"I made that plea to the government to ensure that we get this ten million [kina]," he told Radio Australia.

"It is part and parcel of the 101 million kina mobilisation budget that I have submitted to the government to assist in the policing of this island strategy."

For more, listen here.

Thursday, 18 November 2010

PNG rides resource boom with big budget

By Ilya Gridneff AAP 16/11/10
The Papua New Guinea government continues to ride the resource boom, handing down its largest ever budget of nearly 10 billion kina (A$4 billion).
PNG Treasurer Peter O'Neill announced on Tuesday the 2011 National Budget of 9328.1 million kina ($A3731.2 million) had been boosted by a supplementary budget of 653.3 million kina ($A261.3 million).
"This announcement of nearly 10 billion of expenditure is the biggest spending announcement ever witnessed in PNG and provides us with a great opportunity to build up our nation," Mr O'Neill said.
"The outlook for 2011 is very positive, with the PNG economy forecast to grow by eight per cent, which represents 10 years of uninterrupted economic growth," he said.
PNG's strong economic positions stems from the prolonged mineral boom and a massive ExxonMobil-led Liquefied Natural Gas that will come online in 2014 and bring billions in revenue for the next 30 years from gas sales to Asia.
"We can not underestimate the opportunity the PNG LNG project offers to transform our economy and substantially improve our socio-economic development," Mr O'Neil said.
But the "balanced" budget warns "the emergence of LNG as a major revenue source will give rise to macroeconomic pressures," he said.
PNG inflation in 2011 is estimated to average around 8.2 per cent, he said.
Resource-rich PNG has failed to translate its numerous mineral-related revenue streams into real development for its population.
Chronic underfunding for police, the courts and jails has fuelled a law and order problem and has led to a heavy reliance on aid, including more than A$457 million annually from Australia.
This budget saw increased funding to all the key areas outlined in PNG's development strategy.
Education and health were winners with 139.9 million kina (A$55.9m) and 90.5 million kina (A$36.2m) respective increases while the government will provide 121.2 million kina (A$48.5) more to the transport sector, mainly for much needed road building.

Wednesday, 17 November 2010

The numbers look great, reality does not. A thought on the budget.

Evidently as the LNG project develops, the government expects windfalls that will allow it to fulfill Papua New Guinea's developmental dreams. However, without wishing to be a 'cup half empty' type, the following commentary by the Public Accounts Committee on the Department of National Planning and Monitoring, and the Office of Rural Development, suggests more revenues means at present more spoils for corruption and wastage:

"The Department of National Planning and Monitoring and the Office of Rural Development are incapable of competently and lawfully managing even their own Departmental budget ... The Department of National Planning and Monitoring and the Office of Rural Development are unable to manage, implement, control, co-ordinate, oversee, monitor, account for, audit or apply public monies in the form of Development Budgets, Programs or Projects to any acceptable standard of competence ...  Incompetence and inability compounded by poor morale, corruption and almost total loss of command and control by management in both the Department of National Planning and Monitoring and the Office of Rural Development have been very largely responsible for poor or nonexistent delivery of services and development to our remote (and not so remote) areas and is responsible for the failure to manage or coordinate the implementation of development programs or projects ... This failure has, over many years, resulted in huge wastage of public monies appropriated to development programs and projects, to the detriment of our citizens".

Monday, 15 November 2010

Wagambie Pays Homage to PNG's Corporate Bosses at Exxon Mobil

LNG Watch: It says something when the new 'acting' Police Commissioner's efforts are being devoted to assuring the Somare government's corporate partners Exxon Mobil, when ordinary people of Papua New Guinea, especially women suffer insecurity on a day to day basis.

The National 15/11/10

ACTING police commissioner Tony Wagambie has assured the PNG LNG project developer ExxonMobil that there is no threat to the security of the operations at the project sites.

Wagambie gave the assurance yesterday after ExxonMobil expressed concerns that recent changes made by the government to the police hierarchy would see the withdrawal of the current police officers deployed at the project sites in the Gulf and Southern Highlands areas.

He reiterated an assurance to the government and investors that the police force was intact and that they were loyal to the government.

He also brushed aside talks of dissatisfaction within the police force, adding that any reports of officer revolt would be dealt with accordingly.
Wagambie was speaking during a media briefing at the Airlines PNG airport terminal building after returning from the LNG project site in the Southern Highlands yesterday.

He and senior executives from ExxonMobil, including the developer’s regional director for security operations, flew into the province on Saturday and visited Moro, Gobe, Kopi, Mendi and Nogoli.

Wagambie told reporters that the executives from ExxonMobil were happy with the current security arrangement up there.

Upon his arrival in the province, he was welcomed to a reception by his men and women on the ground.

He reminded them of their constitutional duties of being in the police force and told them that if anyone of them had differences and wanted to leave, they were free to go.

“There are 150 police officers currently deployed there and I told them if anybody wants to go, they can go. I can replace them.”

He also appealed to the media to be more accurate in their reporting.

Wagambie said recent reports of police officers threatening to leave the site was all propaganda and asked journalists to get information from official sources.

Friday, 12 November 2010

How Multinationals Divide and Conquer Civil Society

LNG Watch: This article is a must read for Papua New Guinea's activist community. Using leaked documents, Lubbers and Rowell (The Guardian, 9/11/2010) examine the tactics used by Shell to cover up its role in human rights abuses in Nigeria. Some of this material will come as no surprise to more experienced activists, companies operating in PNG use Shell’s approach regularly.

Secret internal company documents from the oil giant Shell show that in the immediate aftermath of the execution of the Nigerian activist and writer Ken Saro-Wiwa it adopted a PR strategy of cosying up to key BBC editors and singling out NGOs that it hoped to "sway".
The documents offer a previously hidden insight into efforts by the company to deflect the PR storm that engulfed it after the Nigerian activist was hanged by the country's military government. Shell faced accusations that it had colluded with the government over the activists' deaths.

In June last year, the company paid $15.5m to settle a legal action over the deaths in a federal court in New York without admitting liability. It was one of the largest payouts agreed by a multinational corporation charged with human rights violations.

The documents – which were part of this legal case but were never made public – describe the company's "crisis management strategy and plan". This was finalised by Shell's senior executives at a secret meeting in Ascot in January 1996, two months after Saro-Wiwa's death. The strategy was described as "most confidential".

In a similar move to Tony Blair's re-branding of the Labour party, the executives considered renaming the oil company "New Shell" in an effort to shake off some of the recent bad publicity.

Saro-Wiwa had been a vocal critic of Shell's activities in the Niger Delta and of the Nigerian military government. His hanging 15 years ago on 10 November 1995 prompted international outrage and a public backlash against Shell. The executions led to Nigeria's suspension from the Commonwealth for three years.

The company's "crisis plan" focused on what the documents refer to as "the message" and getting the "style, tone, content and timing right, reflecting greater humanity". Philip Watts, who would later become Shell chairman, emphasised that everyone must "sing to the same 'hymn sheet'."

The documents outline a tactic of divide and rule, where Shell planned to work with some of its critics but isolate others. Under the "occupying new ground" scenario, the document detail how Shell would "create coalitions, isolate the opposition and shift the debate."

Dividing NGOs into friends and foes, Shell emphasised the need to "work with [and] sway 'middle of the road' activists". The Body Shop, Greenpeace and Friends of the Earth were seen as unlikely to change their position. One suggested tactic to counter these organisations was to "challenge [the] basis on which they continue their campaign against Shell in order to make it more difficult for them to sustain it". Human rights organisations such as Amnesty International and Human Rights Watch were seen as more easily persuaded. The document suggests building relationships with the organisations and encouraging "buy-in to the complexity of the issue".

Another key group Shell was interested in winning over was the press. The documents complain that the media was too willing to report the views of pressure groups. It wanted to generate media coverage showing " 'the other version' of events/issues". Other company documents identified which media outlets would be targeted. It said that "stable relationships" had already been established with the Financial Times, Daily Telegraph, Times, and the Independent.

The BBC was one of the organisations singled out by Shell's PR department. One of the documents reveal that "relationships are underdeveloped" with the BBC World Service. It continues: "We will identify and cultivate important editorial and senior management staff through a contact programme." In particular they wanted to "build a relationship" with journalist Hilary Andersson, who had recently become the BBC's Lagos correspondent, as well as "any of her known contacts in the divisions".

The documents also noted that "showing progress with the 'greening of Shell Nigeria'" was "strategically critical" after Saro-Wiwa's death. Although elsewhere, the documents acknowledge that the strategy may not be seen as genuine. "Our present communications strategy could be construed as green imagery" the authors wrote.

To improve its green image, the company had to counter accusations of "environmental devastation", so Shell planned to produce a video "to publicise successes" and "to turn the negative tide". The most important topic to be included in the film was "oil spills generally, focusing on sabotage." This would have had the effect of playing up the impact of illegal activity in causing oil spill pollution in the delta, but in another document, the head of Shell Nigeria, N A Achebe, had acknowledged internally that "the majority of incidents arise from operational failures".

The documents even reveal that Shell discussed whether it should stay in the country in the wake of Saro-Wiwa's death. One scenario was called "milking the cow", whereas the "pull-out" scenario was seen as "giving in" or "caving in" which would set a "very negative precedent for the group". Another reason for not leaving was that "issues of liability will not disappear even with a total withdrawal."

A spokesperson said that the company's environmental record had improved greatly in recent years. "The total number of spills in 2009 was 132, against the average between 2005 and 2009 of 175 per year. Thieves or saboteurs spilled about 103,000 barrels from [Shell Petroleum Development Company] facilities in 95 incidents – an average of one spill every four days. This accounted for almost 98% of the volume of oil spilled during the year." The company declined to comment on its PR strategy in 1995.

The spokesperson continued: "Whatever the cause, SPDC is committed to stopping and containing all spills, recovering and cleaning up as much oil as it can and restoring sites in compliance with regulations."

But Nnimmo Bassey, Executive Director of Environmental Rights Action and chair of Friends of the Earth International said the company had not changed and were still not doing enough to help local people in the Niger Delta. "Internationally they polish their image. The claims they make in the international areas, do not stand scrutiny on the ground."

Exxon Mobil Exposed - A Report on Exxon Mobil in the United States

Written by Alison Cassady, Exxonmobil Exxposed examines the woeful record of Exxonmobil in the United States. 

Cassady observes:  "On March 24, 1989, the oil tanker Exxon Valdez, carrying more than 50 million gallons of North Slope crude oil, ran aground and ruptured in Alaska’s Prince William Sound. Approximately 11 million gallons of crude oil poured into the Prince William Sound in less than five hours. By August 1989, the oil had moved across nearly 10,000 square miles of water in Prince William Sound and the Gulf of Alaska. The amount of spilled oil is roughly equivalent to 125 Olympic sized swimming pools".

She continues: "In the 16 years since this infamous oil spill, ExxonMobil has done little to improve its reputation. As detailed in the pages that follow, ExxonMobil has hindered action to fight global warming, continues to lobby to open the Arctic National Wildlife Refuge to oil and gas drilling, and is reaping the financial benefits of America’s dependence on oil at the expense of working families and small businesses—but refuses to invest in renewable energy or support stronger fuel economy standards to make cars go farther on a gallon of gasoline".

To read this report in full follow this link.

Thursday, 11 November 2010

Baki and Wagambie: Bitter Rivalry and Internal Politics

LNG Watch: An interesting article from the archives!

From the Post-Courier (19/3/10)
THERE is a new twist in the Police hierarchy on the appointment of the Deputy Police Commissioner Operations.
Sidelined Deputy Commissioner Geoffrey Vaki has been recalled to his position while the incumbent Anthony Wagambie will return to his substantive position as Assistant Commissioner Southern Region.
In a minute dated March 12 addressed to Mr Vaki, from Commissioner Baki, it stated that "It has become necessary to recall you back to duty. You will assume your former position as Deputy Commissioner Operations with effect no later than 8am, Monday 15th March. The present incumbent, Assistant Commissioner Anthony Wagambie will return to his previous postings as Commander Southern Region."
Copies were also sent to the Minister for Internal Security Sani Rambi and Deputy Commissioner Administration.
Commissioner Baki is currently facing a contempt of court proceedings taken out by Mr Wagambie on allegations of defying a court order to install him as acting Deputy Commissioner Operations last year.
Mr Baki when contacted yesterday said Deputy Commissioner Geoffrey Vaki was sidelined originally on allegations of abusing a woman.
"Its almost a year and its unfair on him to be left in the dark despite being on full pay".
"I had to make this administrative decision because currently I cannot work with my deputy, and at the same time it is totally unfair on Mr Vaki to be kept in suspense. I have directed that he resumes today while I take the necessary papers to NEC explaining my actions".
"The National Executive Council had met last year and appointed Anthony Wagambie to act on the position, but Assistant Commissioner for criminal investigations Raphael Huafolo was installed to act as acting chief of operations until early this year when Mr Wagambie moved into office".

Wagambie is Acting Commissioner

By TODAGIA KELOLA (Post Courier, 11/11/10)
THE Government yesterday suspended the Police Commissioner Gari Baki and appointed Anthony Wagambie as the acting Commissioner and promoted Chief Superintendent Fred Yakasa to the post of Deputy Commissioner Operations.
The move by the Government was expected.
Leaked correspondence by the Prime Minister Sir Michael Somare to Mr Baki last week charging him with misleading the Government over a K10 million kina funding for the LNG police operations.
The National Executive Council met late in the afternoon yesterday and suspended Mr Baki and appointed Mr Wagambie and Yakasa to act as Commissioner and deputy Commissioner Operations respectively.
In an exclusive interview with the Post-Courier the two officers said they were excited but humbled in the Government’s decision to appoint them to head the disciplinary force that has been faithful to the Constitution of the country since Independence.
Acting Commissioner Wagambie said he had served the force for almost 40 years, 10 of them as Assistant Commissioner and now he has eventually reached the top post in the force.
“I want to thank the Government of the day for their confidence in me and I will do my utmost best to repay their confidence. Without boasting I think I am one of the few officers who had served in all five regions of the country in which I will use this experience to run the force in my term as acting Commissioner.”
On the question of fears that the suspension of Mr Baki and his appointment as Commissioner might trigger disharmony and disaffection in the force , Mr Wagambie said: “It is the prerogative of the Government of the day, and the rank and file of the force are fully aware of that, their loyalty should be with the duly appointed Commissioner, and I call on them to respect the decision of the Government and carry out out their normal constitutional duty in maintaining law and order in the country instead of forming groups. For the general public, have no fear because I will not allow any such disaffection to happen in the force” he reiterated.
He also stated that he would be working very closely with his new Deputy Commissioner Operations to try and bring back the confidence of the public back to the force.
Newly-appointed acting Deputy Commissioner Operations Fred Yakasa who jumped two ranks from his substantive rank of Chief Superintendent to DCP operations said he was excited but humbled in the Government’s confidence in him and said, “there is a lot of work to be done but with a very experienced acting Commissioner in all faucets of Police work I think I am confident and look forward to the tasks ahead.”
The two men are expected to move in to their offices this morning.

Wednesday, 10 November 2010

Buying Shares in the RPNGC: Exxon Mobil's New Strategy?

It is difficult to discern at present exactly what is behind Prime Minister Somare’s immanent sacking of the Police Commissioner Gari Baki. Nevertheless, the suggestion is that Gari Baki opposes resource operators co-funding police operations. A figure of K2 million has been cited as the per month subsidy Exxon Mobil are/will provide the RPNGC for security services (The National, 8/11/2010).

If this is correct, the Police Commissioner is well within his rights to stand his ground and should be supported. LNG Watch has raised serious concerns in previous posts over the RPNGC’s woeful human rights record. However, compromising the authority of RPNGC commanders by beholding them to resource operators will hardly help rectify the situation. History tells us this quite explicitly.

Bougainville Copper Limited, for instance, subsidised the operations of the RPNGC and the PNGDF during 1988-1990. The company utilised this leverage to hold regular meetings with senior commanders in both forces. While it would be exaggerating to suggest they were able to direct the military operations on Bougainville, nevertheless, undue pressure was placed on the security forces by the company to hunt down the rebel landowners, which escalated the situation considerably.

The problem is that resource operators are guided by interests that are not necessarily compatible with humane, community policing. Companies must protect their investment, reassure shareholders, avoid costly labor disputes, and most of all keep production going 24/7. When local disputes threaten any of these fronts, the consequences for the company’s bottom line i.e. profit rate, inspires the need for quick, decisive action, even brutal action. Moreover, in principal at least RPNGC officers responsible for ordering such punitive actions could be disciplined in the courts, however, the expatriate executives who lobbied for such actions would be free to abscond from the national jurisdiction and thus escape prosecution.

Exxon Mobil are well aware, despite public statements to the contrary, that many people in the Southern Highlands are confused and aggrieved by the company's behavior. People in the affected regions are prepared to see the LNG operation cease, until their concerns are satisfied. It would not seem beyond belief, therefore, that Exxon Mobil are attempting to buy leverage within the RPNGC, to ensure swift action can be taken against landowning communities.

For a summary of recent events, Neil Ashdown from Global Insight provides the following useful snapshot:
"A dispute between the prime minister and police commissioner of Papua New Guinea has the potential to destabilise the country's police force. The localNationalnewspaper reported today that Police Commissioner Gari Baki has been given until 16 November to present his case for keeping his job. The dispute relates to Baki's request for 10 million kina (US$3.89 million) to cover the deployment of police to liquefied natural gas (LNG) project areas during an emergency meeting of the National Executive Council (NEC) held on 28 October. On 4 November Prime Minister Sir Michael Somare sent a letter calling for Baki's suspension to Peter O'Neill, minister of public service. In the letter Somare wrote that he had "reason to believe that ... [Baki] misled the government". Baki denied the allegations on 5 November. Security for the LNG project sites is provided by the police in partnership with project developer Esso Highlands Ltd, a subsidiary of ExxonMobil. In his response to Somare's letter Baki argued that the arrangement could give the impression that the police operation is "merely ... a private security arrangement". In a statement today Baki reiterated that he remained in charge of the force and called for officers to "return to their posts".
Significance:Baki has been leading a campaign to sever the links between the police and the private sector. His attempt to have the government pay for police operations to secure the LNG projects sites would fit with this campaign. The potential ramifications of the situation were highlighted by the general secretary of the Police Association, Clemence Kanau, on Monday (8 November). Kanau called the decision to remove Baki "politically motivated" and said that it had the potential to reignite the instability that wracked the force in 2006, when uncertainty over the appointment of the commissioner led to factionalisation. Kanau said that if Baki was removed "there will definitely be no control over junior ranks' behaviours". While the situation remains relatively calm at present there is the potential for more disruption if not resolved sensitively".

Monday, 8 November 2010

The Plot Thickens - Baki Faces Sacking

The National, 8/11/2010

POLICE Commissioner Gari Baki faces being sacked before his term expires next January.

Prime Minister Sir Michael Somare issued instructions to replace Baki soon after he removed Police Minister Sani Rambi from the portfolio to Labour and Industrial Relations.

According to documents made available to The National, Baki faces the sack for “misleading” cabinet in requesting K10 million for police operations in the PNG LNG project areas.

The documents showed that Sir Michael had written a letter to Public Service Minister Peter O’Neill to begin the process of suspending and removing Baki, and appointing deputy police commissioner Tony Wagambie as acting commissioner and Supt Fred Yakasa as deputy commissioner.

The reasons cited in the letter accused Baki of allowing the police force to run down and “there is a general breakdown in law and order”.

A separate letter, purportedly from the prime minister to Baki last Thursday, asked the commissioner to respond to the allegation that he had misled the prime minister and other senior government ministers into thinking that K10 million was urgently needed to ensure continued police presence in Kopi and the LNG corridor and that he had already withdrawn officers from the area.

Sir Michael stated that the decision to withdraw officers was in direct conflict with the advice he had provided and called into question whether Baki had adequately performed his duties as commissioner.

He stated that this was against advice provided by Peter Graham of ExxonMobil that the developer was providing all necessary support to police in the area which included transport, communication, fuel and additional allowances for police.

ExxonMobil stated that the government only needed to provide base salary, uniforms, weapons and ammunition.

“At this stage, it appears as though you have deliberately misled the government and I believe that these serious allegations amount to misconduct and wish to advise you that you have three days to respond to the allegations.

“Failing this, I will institute necessary disciplinary action in accordance with your contract,” Sir Michael stated.

It was unclear if Baki had responded to the letter from the prime minister.

But, police sources said Baki was well within his rights to ask the government for urgent funding because the work of police was a state responsibility, to be funded by the government, and the constabulary cannot be getting paid by contractors and be seen as private security guards.

“If the government is serious about the security of the PNG LNG project, and wants the constabulary involved in security operations, it must find the money to fund it.

“Receiving K2 million funding from ExxonMobil every month will make police look like the company’s security guards,” the source said.

Friday, 5 November 2010

Goethe in Papua New Guinea: Somare’s Faustian Pact with the US Secretary of State


In the play Faust by Johann Goethe, a poodle follows the scholar Heinricherson Faust home. The stray hound turns out to be Mephistopheles (the devil) who offers Faust a pact: In return for all earthly delights, Faust agrees to serve Mephistopheles in hell. I will not recount the ensuing tale, suffice to say signing the pact was not a high point in Faust's life.

Two centuries after its original composition, Faust is now being played out on Papua New Guinea’s national stage. However, as no stray poodles roam the streets of Port Moresby, Mephistopheles has taken the form of the US Secretary of State Hillary Clinton. And rather than being from the spirit world, Mephistopheles is an  imperialist nation, one that has scorched all four corners of the globe to advance its 'national interests'. Yet somehow it remains a ‘beacon’ of freedom and democracy. Besides these distinctions, the story being played out appears much the same.  

Like Faust, Prime Minister Somare has been infatuated with Mephistopheles' offer of “prosperity” (for whom is not entirely clear), and it looks as if he is prepared to once again compromise PNG's sovereignty by making a pact with a fickle global power.

The United States came to Saddam Hussein with similar offers of assistance, they even helped him to murder his political opponents (given Somare’s recent comments in Parliament, perhaps he would not be adverse to such assistance). Several decades later they had Saddam hanged, while torturing, bombing and killing the people of Iraq en masse, war crimes that parallel the worse history has to offer.

Of course, Iraq was not the first nation to feel the rough end of the stick, the US carpet bombed South-East Asia killing millions during the 1960s and 1970s. While during the 1970s and 1980s the US distinguished itself by siding with ruthless dictators throughout Central and South America, in an effort to quash democratically elected left-wing governments.*

Having largerly ignored Papua New Guinea since independence, it appears Mephistopheles’ interest has been aroused by growing evidence of PNG's enormous natural wealth. Now the contract is on the table. However, unlike Faust, Somare will be signing with Papua New Guinea’s blood rather than his own.  

*Anyone interested in the US’s past record, William Blum, has compiled a concise history of America’s post war foreign assistance aptly titled Killing Hope, some of which is available online: http://killinghope.org/

Wednesday, 3 November 2010

Exclusive: Government Official Repsonds to LNG Watch's Questions

In this exclusive, LNG Watch interviews a senior government official involved in the LNG negotiations. The official prefers to remain anonymous.
LNG Watch: What are some of the difficulties you are facing at the moment with the LNG project?
Official: The level of information at the ground is not good. It is very complicated. It is also complicated because of the different regions, with different cultures, and different levels of understanding. If you go to the Highlands the level of understanding may be different than if you go down to the New Guinea islands, so it is very difficult to make the landowners fully understand.
LNG Watch: In other resource operations there has been a problem with local elites monopolising the compensation and benefits produced by the operation.
Official: It’s the same issue country wide. So you have a handful who come here to Port Moresby and are promised landowner benefits, while the villagers suffer and have no idea.
LNG Watch: In terms of the companies running the mine, how you are finding the attitudes of the staff engaged in the negotiations?
Official: When they [Exxon Mobil] came they were very arrogant, they thought they were going to bulldoze things the way they wanted. But because of our experience with Bougainville and Ok Tedi, we were adamant we should consult with landowners according to the rules.
LNG Watch: Are there concerns that there may be violence around the project?
Official: We just had an incident recently, which is quite unfortunate. It is about the land. The state needs to be really careful with how they handle landowner issues. What we are trying to do now is to get the leaders in parliament and the landowner leaders to resolve the issues ... through alternative dispute resolution rather than going to court with expensive lawyers.
LNG Watch: Is there fear that the project may not go ahead? Is there concern Exxon Mobil will pull out?
Official: No they have spent billions of dollars, the project is going ahead. The landowners fully support the project, they want the project to go ahead. It is how the benefits are distributed right down to the people in the rural areas. You have got to realise there are two groups, the landowners who are back in their villages and the landowners who are residing here in Port Moresby.
 LNG Watch: It appears at present that no projects can go ahead unless people are getting money under the table.
Official: We have had that in the past, where people were paid off, but we have not seen evidence of such things.
LNG Watch: Would you find there are differences for example between the way Exxon Mobil operate and say MCC (Ramu Nickel)?
Official: Yes there is a difference in culture. The Chinese, well yes they are like if you do me a favour I will give you this.
LNG Watch: The Environment Act Amendment was seen to be an example of corruption, an attempt to stop the landowners (in Madang) from protecting their marine environment
Official: I haven’t actually seen the amendments so I would not have a good idea.
LNG Watch: So we have development forums which are better than in the 1960s, but it strikes me that we still have mobile squads providing security and they have thirty years of taking punitive, irresponsible actions.
Official: Sometimes you have to really understand the people. For instance if you to the Highlands people are very aggressive. When they come for meetings they come with knives, they comes with axes, they come with bows and arrows. We don’t stop that. The tensions are very high. The people are very aggressive. So it depends on the area you are in with the mobile squads ... But up there it is very tense, so if someone comes up there and says something wrong, someone will come with an axe and chop him down. The mobile squad is (specially) designed to quite down violence. At village forums here (Port Moresby) or in the New Guinea Islands we don’t need the mobile squads.   

Tuesday, 2 November 2010

From Court Challenges to Airport Closures: Things go from Bad to Worse for Exxon Mobil

Both articles are from the Post-Courier, 2/11/10

Landowners Challenge Section 6 of the Oil and Gas Act

In a test case, a constitutional reference has been sought by Michael Wilson of Warner Shand Lawyers on behalf of 24 clans of Tuguba in Hides gas project to challenge the validity of Section 6 of the Oil and Gas Act (OGA) and the powers of the State to compulsorily acquire land for the benefit of outsiders under the Land Act.
The referrers who are customary land rights holders and members of 24 clans from Tuguba are seeking opinion pursuant to Section 18(1) of the Constitution on questions relating to interpretation or application of Section 32, 41, 53 and schedule 2.4.6(2) of the Constitution.
The reference states that the large Tuguba tribe owns and occupies land territory across 3 provinces which include Hela, Gulf and Western provinces and speak one language.
Of the 26 main clans and many sub-clans, the reference is made by 24 and the rest may join as parties later.
All Tugubas subscribe to the ‘Gigira Laitebo’, legend of the creation and the ‘Laitebo’ prophesy which is about the energy of light under Mt Gigira which would light the world.
Under Tuguba customary land, there are several oil and gas pools known as Hides, Juha and Angore.
Following the PNG LNG Agreement of May 22, 2008, the licencee (ExxonMobil and partners) will take out the gas under the surface of Tuguba customary land and pipe it to portion 152 to be processed for export.
The reference contends that under customary law, the primary user is notified whenever another clansman wants to use a land or the second rule is that prior consent must be given before a foreigner is allowed to use it, failing force is used to expel intruders.
The reference states that Section 6 of the OGA which deems petroleum and helium at or below the surface of Tuguba customary land as the property of the State is therefore contrary to customary law.
The referrers asserts that the definition of “land” in Section 3 of the Land Registration (Customary Land) (Amendment) Act 2009 and Article 26 of the UN Declaration on Human Rights on the rights of Indigenous People is consistent with their claim.
The Tugubas said by boycotting the signing of the Kokopo UBSA and LBBSA, they have never at any stage granted their consent to the State to award any licences under the OGA to the Licencees. Prominent Lawyer Peter Donigi’s book Lifting the Veil that shrouds Papua New Guinea was described as a God-sent by the referrers. 
Their leader Simon Ekanda said: “Mr Donigi has by the words in his book; shown to us what we knew in our own hearts was right. This book is now our voice - the road is now clear for us. We have accepted the solutions as recommended in the book.”
“We thank Donigi for showing us how we can protect and benefit from our resources. When we get a decision in our favour we will be using the production sharing contract that is written in the book and nothing less will satisfy us,” Mr Ekanda said.
He said the State and developers can agree to settle their case outside the court only if they were prepared to enter into a production sharing contract.
“We note that under the Donigi formula, PNG will earn more than K100 billion over 30 years and not K40 billion as our government says we will get. 
“Is it fair that foreign companies will take out of the country about K200 billion in profits over 30 years? We think it is not,” Mr Ekanda added.

Landowners Close Tari Airport


THE Tari airport in the Southern Highlands province was forced to close as of yesterday by angry landowners. 
The National Airport Corporation (NAC) has advised all airlines not to fly into Tari for the safety of passengers and aircraft from possible landowner reprisals. However, a twin otter plane belonging to Airlines PNG that flew with explosives for Esso Highlands Ltd from Port Moresby into Tari yesterday afternoon was physically confronted by the landowners. 
Esso Highlands is the subsidiary company of ExxonMobil, developer of the multi-billion kina PNG liquefied natural gas (LNG) project. 
The landowners said the airline did not take heed of the forced closure and warned the pilot not to fly into Tari as of today. 
THE National Airport Corporation (NAC) yesterday confirmed the closer of the Tari airport as it cannot guarantee the safety of the travelling public.
The NAC Acting Managing Director Manuai Kametan said as a responsibility body that operates and maintains airports, it had to close Tari airport because it had reason to believe that the airport was not safe. 
“The safety of travellers is of paramount importance to NAC and we cannot guarantee their safety as it was too risky,” Mr Kametan said.
The Chief Executive Officer Air Niugini Wasantha Kumarasiri also yesterday said the flights into Tari would also be temporally closed in compliance with the notice from the National Airports Corporation.
Mr Wasantha said the suspension of services will remain until further notice and while the airline regrets the inconvenience caused, the situation was beyond its control. 
The closure of the airport was instigated by spokesman and deputy chairman of Tari airport landowners association Benson Angobe (Homaria clan), chairman Mark Mulungu, chief Luke Luya and others. 
Mr Angobe said the landowners demand the State to pay them K17 million up front before they could allow the airport to be re-opened. He said K6 million of the amount is for the Piribu Kia clans while K11 million would be dispersed to the 19 affected landowner groups. 
Mr Angobe said petition calling on the State to honour this payment was delivered to the Prime Minister Sir Michael Somare with copies to other senior government ministers, local MPs and relevant State authorities such as CAA chief executive officer Joseph Kintau three weeks ago in Port Moresby. Mr Angobe said their petition lapsed on October 20 and they have no option now but force the closure of the airport indefinitely until their demands are met by the State.