"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

Tuesday, 31 May 2011

A Story from PNG Blogs

The problems of LNG Landowners are long time in the making, not just of this LNG Project. The attitude of government in not conducting social mapping and sitting down with its own citizens and determining land boundaries, trupela landowners, exact nature of and bundle of rights applying to various groups in respect of project areas and pipeline corridor, is not new. In the past it has been just shoving matters down the throats of people.

The Kutubu and the Gobe Projects are clear examples. In respect of the Gobe project, the government instead of resorting to social mapping prior to granting Development license, it bulldozed it and forced the people to camp in Port Moresby fighting over who owns what.
They never had a chance to negotiate their equity or royalty rights. It then locked up their meager royalties and forced the people to enter into serious debt living in the corridors of court houses trying to determine who owns what- something the government should have done as a responsible government.

It did not do the Landowners, and the Developer any favors to have this mess thrust upon them by the idiotic policies of people like Joseph Gabut, former Secretary of DPE and Francis Damen, former Attorney General. Sir Arnold Amet has now inherited the mess from these knuckleheads, who used the plight of the people to amass great personal wealth to the tune of Millions of Kina our of the royalties parked in government trust accounts.

It was Gabut and Damen who dreamt up the great idea of a Ministerial Determination to give the royalty monies away to wrong landowner groups in the case of Gobe. Kaiabe, as a responsible Leader, in response has always insisted upon proper social mapping and cost-benefit analysis by the state as mandated by the Constitution, the Oil & Gas Act and the Organic Law on provincial and local LEVEL Governments prior to grant of any development Licenses. The manner in which Arthur Somare ( and a few select MPs) went about negotiating this LNG project and financed it was wrong and fraught with suspicion. Arthur & Co signed the Gas agreement without going through Mandatory processes and Cabinet Approval as required by law.

Arthur thought he was smart, and left the whole Bureaucracy out. He did not follow a process that was transparent. As Minister of a sovereign nation he ran alone, and he camped in the Boardroom of Exxon Mobil, an act that was far below that which is expected of a State Minister, as his own father will advise him. Having so camped, he flew to the middle East and put the States financing instruments together, at great expense to the State. He then offered the State's assets as collateral for these murky financing deals that he struck behind closed doors. Only he knows who gave what and who got what, but out of the sausage machine came Kroton, LBSA, and State Obligations to pay Hela and other Southern Highlands Landowners Hundreds of Millions of Kina in public funds.

Arthur had to cover up whatever he did, by bribing the Landowners through the LBSA process. Mind you, to commit public funds of the whole country to a few people for a resource that is already owned by the State is not only stupid policy, and policy suicide, by any government, but is likely to be unconstitutional- it is discriminating against the rest of PNG. Besides, young Arthur in his rush, refused to or failed to realize other sources of funding of the LNG project at very very competitive rates and without holding this nations assets by the balls. Japan, for instance was always ready to grant us project finance on bi-lateral levels at less than 1% interest. [ i have the evidence of their offer ] What Arthur did was effectively sold us out at interest rates in the vicinity of 10%plus plus.

So now, the question is for National Leaders of good standing like Alfred Kaiyabe, what is the responsible thing to do? Take Arthur Somare to court? This he cant because they come from the same political party. Use someone like Peter Donigi to undo the whole thing? Yes but that's all too hard and may send us down a slipper slide to who knows where. Cause a bit of commotion so that we can get a better deal, that is the likely approach. In all these it is to be borne in mind that the people of PNG have been long suffering, innocent victims of the stupidity of the young inexperienced leaders, and equally young inexperienced bureaucrats.

No matter which way we take this debate, one thing is for sure, we have to bear in mind the interests of all the 6.5 million people of this nation. That is why, I have been calling on Peter Donigi to open sensible debate, notwithstanding the stupidity of people like Arthur Somare & Co, urging Donigi, to play wedge politics with the interests of the whole nation is being equally irresponsible, and you become no better than them. Donigi & Co must move this nation to a higher plane than mere reactionary rhetoric, because the people of this nation deserve it. They don't deserve fools.

Monday, 30 May 2011

PNG LNG boss speaks out on landowner threats

 LNGWATCH PNG: A news report from Radio Australia: Pacific Beat (30/05/2011)
"The minorities of the landowners in the signing room were forced to sign the UBBSA agreement. Since most of the Landowners were illiterates and uneducated they signed without knowing or understanding the content in the National Content Planned Book. Today the Landowners (Hela) and Papua New Guineans come to realize that the agreement was bulldogged illegally. Therefore, it will be better for agreement to be reviewed for the betterment of the PNG LNG project operation.”


Updated May 30, 2011 08:05:18
The boss of the massive ExxonMobil-led Papua New Guinea liquid natural gas project says it would be of great concern if landowners shutdown construction of the project.

Landowners from the Hela region in the PNG highlands have threatened to do just that if the PNG government does not deal with a long list of grievances.

With the death of a local Chief tensions are rising and landowners are saying immediate action is needed or the consequences will be serious.

In his first in-depth interview since the PNG LNG project began, Project Managing Director Peter Graham, says that overall ExxonMobil has had a very good experience of investing in PNG.

Presenter: Jemima Garrett
Speaker: Peter Graham, Managing Director, Esso Highlands, the ExxonMobil subsidiary building the PNG LNG project
GRAHAM: Obviously making an investment of this size, some 15 billion dollars, we looked very carefully before we started at the security of investment in the country. Papua New Guinea has a strong history of honouring all the agreements it makes with investors and certainly that has been our experience. We feel very confident that the agreements we have in place with government and with landowners are agreements that have been put in place in good faith and that there is a genuine commitment to stand by those agreements.

GARRETT: So what is the PNG LNG project contributing to Papua New Guinea in terms of government revenue, jobs and business opportunities?

GRAHAM: In the long-term the impact is quite substantial on the economy of PNG. ACIL Tasman did an independent study some years ago that suggested GDP would double as a result of the project and, I think, over the life of the project the state take, or state revenue from the project, is something like $US30 billion - so very very substantial over the 30 year life of the project. But if you look just very near term at the impact of the project during the construction phase, obviously there is a very large impact on employment. Today we are employing something like five and a half national citizens working on the project and we are spending substantial amounts of money in the country. To date its about K2 billion or around $800 million dollars has been spent project to date, has been spent actually in PNG. You only have to look around the country to see the positive impact the project is having.

GARRETT: Turning now to deliveries - your first deliveries are expected to take place in 2014. What are the biggest challenges the project faces in getting up to that point?

GRAHAM: 2014 fourth quarter is our plan for our first cargo to sail out of Caution Bay. The biggest challenges, I think, are really land access looking forward, to make sure that we have continuing access to the land and an ability to get on and deliver the construction part of the project on time. We have an election, which is coming up next year in mid-2012. In some ways the timing of that could not be much more challenging - it happens to be at the same time that our construction activities peak and typically that is a change in the pace of life for people in the communities. So we've got a few issues like that sit out in front of us that - again its getting access to land and security within the communities within which we operate. We know how to execute a project, or more correctly our contractors do, it is just executing the project in the context of Papua New Guinea.

GARRETT: The government went through an exhaustive benefits sharing process but there are still landowners saying that they missed out. How much of a challenge are landowner expectations, to the project?

GRAHAM: It is something we continue to manage. A lot of it is about communication. I think it is an area we have underdone some, as has the government, in just really making sure people fully understand what their entitlements are under the Oil and Gas Act and under the agreements that have been struck, and then to manage those expectations. The government went through an extraordinarily consultative process in reaching those agreements. It is something I have never heard of anywhere else in the world to bring together two and a half thousand landowners, for six weeks, to negotiate an agreement. That was achieved and that was phase one, and then there was subsequently license-based agreements that took those same negotiations back within the license to figure out how the benefits within a licence would be shared out with all the people there. Inevitably there are going to be some people who feel like they didn't get their full entitlement and I just think we need to keep on communicating with people about how it is shared that way, why it is shared that way and why that is fair and reasonable.

GARRETT: When you say your communication might have been a little underdone - what have you done to change your approach since then?

GRAHAM: We've put a major effort in through our land and community affairs organization, in particular, to get more people on the ground talking to people on a daily basis so that, firstly, they understand what is coming with the project rather than speculating as to how it is going to impact them so better flow of information to them. But, also, we've formalized our grievance process so that anyone who has a grievance is able to bring that grievance into our land and community affairs people and we commit to get back to people with an answer. It is not necessarily going to be the answer they are looking for, but they will get an answer.

GARRETT: So have people taken advantage of that grievance process and what has the outcome been?

GRAHAM: It's been very positive and our clearance rate has improved, as we've got better at capturing and understanding grievances and then feeding back information to people. I won't say everyone is happy again, but just the fact that we've been able to establish places for people to take their grievances, processes to work them through and a feedback mechanism. I think the other thing that has changed, very recently, is that the government has now stepped up and they've placed some people in the field to deal with grievances that belong to government, rather than ourselves the developer and for a long time that was challenging because there was no-one there.

GARRETT: Yes, in fact the landowners I have spoken to are most angry about the failure of the government on business development grants and other money issues and they are actually threatening to shutdown the project. How much of a concern is that to you?

GRAHAM: If they were to shut it down it would obviously be of great concern and it certainly becomes an even bigger concern as we get more and more workers in the field. The impact is obviously greater. My sense is rightly or wrongly that we have very strong support from the grassroots people, in the community. They want to see the project succeed but they also want their entitlements from government. I think government is addressing that issue, admittedly belatedly. I think government recognizes the issue and it trying to do something about it.

GARRETT: This seems to be an escalating situation in terms of anger on the landowners’ part - at what point does it become a serious threat to the project?

GRAHAM: I just hope we don't get there and I am pretty confident that the government has seen that in the course of the last several weeks.

GARRETT: The government has a lot on its plate with the many new projects in the country. Does it have the capacity to deal with this?

GRAHAM: I think the answer is they are trying very, very hard to make sure they meet what our needs are and what the needs of other projects are. I think you hear a lot of criticism of government and probably not enough at-a-boys for the things they are doing well. Just as a for example, work permits and visas, on the immigration side of things. They worked very closely with our people and with our contractors, to understand the need and the profile of people coming in. We've seen on average work permits and visas issued in less than 10 days - to us that is world's best practice. Customs, likewise, has done what we think is an outstanding job, customs and quarantine in moving equipment and materials across the docks. I think there are areas were there is very substantial progress by the government agencies, and there are some areas that need to improve, and they are the ones we are focused on right now, particularly as we move towards the election, because that is going to stress things even more.

GARRETT: In terms of the landowner issues - what would you like to see the government do to lift its game?

GRAHAM: I think the best thing government can do right now is to put more people in the field and get the agencies talking with the landowners directly. I think that is the largest source of frustration that what landowners have felt obliged to do, is to come down from the field to Port Moresby and try and get access to people in Port Moresby. That is not the right answer. Government agencies need to be in the field dealing with people because that brings a natural transparency to that engagement between landowners and government. There are people who do come down from time to time who do not truly represent the people they claim to in the field, but if that consultation is done in the field it is done in the presence of the constituents and that is important.

GARRETT: The PNG LNG project is the biggest investment ever in Papua New Guinea. Just how important is this for future investment that the PNG government gets this right?

GRAHAM: I think it is very important. This project is project financed so there is a lot of interest from the lenders from around the world, at what's going on. We've seen already as our project has started to ramp up, the interest in exploration and other developments in Papua New Guinea is clearly ramping up and I think people are just watching to see how does this project progress and can it be done on this scale in this country and if it can I think it is really going to open the door for significant investments.

GARRETT: Considering the problems the government is having meeting its side of the bargain on the PNG LNG Project should land owners deal direct with the project on more issues as they do with land compensation?

GRAHAM: That's a minefield, to be honest. Our job is to build a project and that's our primary objective: to deliver on our commitment to our stakeholders, investors, and customers’ lenders, communities. It's a slippery slope getting involved into the business of government and it’s an area we do not want to get involved in. It’s not our job to make government policy. It's a place where we won't go. If there is something we can do to facilitate government getting out to do its bit in the field that is the area we are willing to participate. A simple example of that is, that the Department of Petroleum and Energy recently assigned a small number of people to the field. We'll help them with accommodation and travel until they get themselves set up in the field. We'll do those enabling things but the last thing we'll do is get involved in taking decisions on behalf of government or even having the appearance of doing the same.

Thursday, 26 May 2011

PNG's 8 percent growth to be accompanied by inflation

Wed, 25 May 2011

 PORT MORESBY, PNG (RADIO AUSTRALIA) ---- Papua New Guinea's economy is expected to grow by a staggering 8 percent this year.

PNG's Treasurer, Peter O'Neil says a boom in the mining and petroleum sectors fuels the positive economic outlook. But he has warned that there's also going to be a high inflation, which will hit low-income earners hard, as Firmin Nanol reports from Port Moresby.

Presenter: Firmin Nanol
Speaker: Peter O'Neil, PNG Treasurer

NANOL: Treasurer Peter O'Neil says the boom in the mining and petroleum sectors saw an influx of foreign investors, and an increase in business activities in the country since 2007. Mr O'Neil says the main driving force behind the strong economic outlook is the multi-billion dollar PNG Liquefied Natural Gas or LNG project.

O'NEIL: The real GDP growth is expected to be around eight per cent. The kina has regained its value against major currencies since its lowest level in 2002. It's a remarkable and unprecedented achievement. Mr Speaker the outlook for 2011 is very positive. The economy is expected to grow largely driven by the expected ramping up of the PNG LNG construction activity, and a strong growth in mining and agricultural sector.

NANOL: The Treasurer however, says despite the positive economic outlook, inflation will remain high. Peter O'Neil says the high inflation rate of 8 per cent will really affect the medium to low income earners.

O'NEIL: There are a few challenges that remain and one of the key challenges is inflation, which remains persistent and is threatening the macro-economic stability. Our forecast for the inflation for 2011 is eight-point-two per cent Mr Speaker. The key challenge for the government is to maintain strict adherence to the 2011 budget while the LNG construction activity gains momentum. This also requires a close coordination of monetary and fiscal policies. To achieve this the government is working closely with key agencies, such as Treasury, Bank of Papua New Guinea, each month in monitoring the performance of the economy.

NANOL: He says the government will do its best to control and minimise the impacts of a high inflation rate on ordinary people and businesses. The Treasurer Peter O'Neil says the Central Bank will also control the monetary policy to cushion off any long-term impacts on the economy.

O'NEIL: The other major challenge is the management of the impact of the LNG project, which includes the large revenue flows arising from this project. To address this problem the government has already approved the establishment of the Sovereign Wealth Fund. This is an appropriate mechanism to strengthen existing framework in ensuring that macro-economic stability and fiscal sustainability continues, whilst at the same time we address our development needs of our country

Landowners threaten to shutdown PNG LNG project


Landowners in the highlands of Papua New Guinea are threatening to shutdown the ExxonMobil-led PNG Liquid Natural Gas project if the PNG government does not take action on a long list of grievances.

Tensions have been rising for some time over government delays.

Now they have been pushed to a head with the death of Tuguba Chief Himuni Homoko, whose clan members say died too young, fighting for justice for his people.

The landowners have put a petition to government and they say they want action immediately.

Presenter: Jemima Garrett, Pacific Business and Economic reporter
Speaker: Sir Alfred Kaiabe, spokesperson for the Tuguba clans from the Hela region of the PNG highlands; Chief Kingsford Uruliwa from Juha; Chief Tara Liyabe from Angore; Sir Arnold Ahmet, PNG's Attorney-General
GARRETT: The PNG LNG project is of critical importance to Papua New Guinea - at 15 billion dollars it is by far the biggest investment ever and if all goes according to plan it is expected to double the country's GDP.

The benefits sharing arrangements are complex involving royalties and equity payments, infrastructure and seed capital for landowners businesses.

These are rivers of gold to fight over.

The main umbrella agreement - the Kokopo agreement - signed in May 2009 was co-ordinated by the PNG government. It took thousands of participants 6 weeks to negotiate.

But it is rejected by the 26 Tuguba clans from the Hela region in the PNG highlands, whose Chief Himuni Homoko, died earlier this month.

Former MP Sir Alfred Kaiabe is their spokesperson.

KAIABE: There was formal introduction on the first day and then what followed was behind the doors dealing. This agreement that they say was signed in Kokopo was cooked up in Port Moresby like a ready made kit house, fitted together in Kokopo, and then forced down the reluctant throats of people to sign. We never read the contents. there was no consensus ad aidem and that is a fundamental principle of contract law.

GARRETT: The Hela region is rugged and remote. It's people lack basic services such as schools aid posts and electricity and they have missed out in past dealings with resource developers, such the Porgera gold mine, which uses Hela gas for power, without providing any electricty to landowners.

Chief Kingsford Uruliwa from Juha says he speaks for 30,000 people.

URULIWA: In Papua New Guinea, in Hela region, we don't have too many educated people, so government at the moment is controlled by Sepik's, New Guinea Highlands, Southern region, since we do not have enough literate people those people just come in and claim our project as their sole property and dig out and consume what is in that project. We were overlooked. That is why we are raising that, just like a cry, for awareness up, for the world to hear our cry.

GARRETT: It is not just the Tuguba who say their legitimate claims are being ignored - Chief Tara Liyabe from Angore is the head of 26 clans. Like the Tuguba, he says his people angry about social mapping on the PNG LNG project, delays by the government in the payment of seed capital and make up of Kokopo agreement.

LIYABE: If the government doesn't come into my booth and stay with me and listen to my grievance, then, there will be another Bougainville. Why I say this is because gas is in my land, it is on the customary land and if the government still persisting on againsting me, and interference in the project all the time, then the project will come to a halt. We will stop the project. Project will never operate without our signature in the agreement.

GARRETT: Do you want to see the project go ahead? Do you want to see these problems solved?

LIBAYE: I am happy with the project. I am happy the project. i am happy with the Exxon Mobil and the project must continue but my intention here is that if Papua New Guinea government look into my matter - the difficulties that I have then the project will continue. If PNG govt persist on listening to me then the project will not continue.

GARRETT: On the 12th April the Tuguba Chiefs placed a 2 page ad in the National newspaper outlining their grievances.

The PNG Government realises it is under pressure.

Attorney-General Sir Arnold Ahmet says it must do more.

AHMET: All those resource sector agencies just need considerable increase in capacity of personnel, PR personnel, technical people ..to be on the ground to manage this landowner, resource owner expectations, considerable expectations.

GARRETT: People in the highlands are in favour of the project but they are very angry at the government for the delay in getting seed capital for the business development grants to them, they have issues about Memorandum of Agreement money. They are now saying they will close the project if they do not get action. Why is the government so slow in handling these issues?

AHMET: I think several aspects and I alluded to them. One is a major one - that we have been caught, pardon the pun with our pants down. We just haven't got the capacity in the public sector to respond to the huge increase in the construction of this project and, obviously, as a result the company and the developmental partners are importing technical and professional skill onshore. So the challenge for us in the government sector is to ramp that up - increase that. It will take some time - so that we can negotiate that on the ground, the social mapping, the landowner claims and then I think the major next aspect is just our budgetary capacity.

GARRETT: The government has acted - this week Acting Prime Minister Sam Abal announced a process to pay all outstanding Memorandum of Understanding agreements and a better system so more will get approved.

That only goes part of the way to meeting the Tuguba claims.

As they gathered in huge numbers in Port Moresby to mourn their chief, who died unexpectedly in his 50's, their resolve has been hardening.

KAIABE: The late paramount chief was made to follow up these issues because the government and the developer did not address these issues. He was forced to follow this up in the court of law and whilst in the course of pursuing these issues he collapsed and died.

GARRETT: You've just come from the Haus Krai, the traditional mourning before Chief Himoko is buried in the Highlands. Just how angry are people about this issue?

KAIABE: You can only imagine the next course of action the relatives will take but I tell you it will be serious -right. Yes, I have come from the traditional mourning for the late chief. I am going there again - and we have given a petition - they have given a petition to the government which we hope will be addressed and responded to .

GARRETT: Specifically what do you want the government to do?

KAIABE: They are saying all the outstanding issues I have referred to, which are before the government and subsequently the court, to be addressed immediately.

GARRETT: And when you say immediately - what sort of timeframe are you giving the government?

KAIABE: Normally you would want the body to fly home - they are saying we will bury the chief here if these issues are not addressed and when that happens it is serious. So maybe they will give one or two weeks.

Tuesday, 3 May 2011

How to Pull Strings in PNG - An LNG Guide

Source: The National, Tuesday, May 3, 2011
THE prime minister and national executive council may have erred in suspending former police commissioner Gari Baki, an independent investigation has found. The independent investigation committee had delved into the matter and presented its report to cabinet.
The contents of the report would be an embarrassment to Prime Minister Sir Michael Somare and the government which had suspended Baki, claiming that he had misled cabinet in asking for K10 million for operations in the LNG project area. The committee’s report, a copy of which had been obtained by The National, stated in part that:
*It was unable to find any evidence to conclusively uphold the allegation that Baki had “deliberately misled NEC;
*There was no written record of Baki’s verbal briefing to cabinet on Oct 28 last year; and
*NEC should not, unless in very urgent and special circumstances, allow verbal submissions.

According to the report, the prime minister had received two different sets of advice, one provided by Baki on Oct 28 last year and another by Peter Graham on Oct 29 last year.

“On the basis of the two differing sets of information, it appears that NEC had concluded that the information provided by Esso Highlands Ltd was accurate; effectively rendering Baki’s advice inaccurate and that Baki ‘had deliberately misled’ the prime minister and NEC,” the committee said in its report.
On Oct 28 last year, Baki was summoned to appear and brief cabinet on the security issues at the LNG project sites. He did and pleaded for financial support.

Baki advised that two sections of the police mobile unit, deployed at Gobe to investigate an arson case, had to withdraw because of lack of logistical and technical support.
The former top cop, in his briefing, stated that Esso Highlands could not assist because investigating and apprehending suspects would involve police venturing into isolated local territory known to police as heavily armed with modern weapons.

The Gobe deployment was not long term and only involved investigating the burning of heavy equipment allegedly by locals.
The NEC approved a K10 million funding to provide additional support to police the project sites. The following day, Graham requested and was granted an opportunity to make a presentation to Sir Michael. Graham informed the prime minister, among other issues, that the police mobile unit had pulled out of the southern area of the LNG project and that they could not continue operations and had ceased work. He further indicated to the prime minister that certain operational costs, associated with the police deployment, were paid for by Esso Highlands through an MoU with the constabulary.
The investigation revealed that following Graham’s presentation, Sir Michael formed an opinion that Baki had misled NEC in his briefing the previous day. The NEC, at a special meeting on Nov 9 last year, suspended Baki and set up the committee to investigate the matter.The committee found that Baki was not involved in the decision to withdraw the police personnel. It was a tactical decision by ground commanders “to withdraw and regroup” once the unit was better equipped and resourced.

The mobile squad withdrew last Oct 23 and the contractor withdrew five days later. However, by 1800 hours the same day (Oct 28, 2010), the police mobile unit was re-inserted after NEC intervened. Graham was not aware of the move as, on that day, he was briefing the prime minister that police mobile personnel had been re-deployed elsewhere.

The committee found that the real reason for the withdrawal of CCJV workers was the alleged careless and negligence by the company resulting in the death of two people, a fact the committee found “odd and regrettable” that Graham had not highlighted in his briefing to the prime minister on Oct 29.
The investigating team included Personnel Management secretary John Kali as chairman, Nemo Yalo, PEA president Michael Malabag and Allan Bird. The committee started its investigations on Nov 29 last year and finalised its report after three months.

It was presented to cabinet for deliberation early last month.

LNG Directing the RPNGC

Source:  The National, Tuesday, May 3, 2011

AN independent investigation committee has recommended that a memorandum of understanding between police and Esso Highlands Ltd for security arrangements in the LNG project corridor be terminated.

The committee, in its final report to the national executive council, stated that the MoU had impinged on the independence of the Royal PNG Constabulary.
Cabinet had set up the independent committee to investigate the suspension of former police commissioner Gari Baki.

Baki was alleged to have misled the prime minister and NEC into approving a K10 million allocation for police operations in the LNG project areas.

The investigators found that the MoU was not vetted by the attorney-general and state solicitor’s office. It also did not go before the NEC.

“The MoU appears contrary to section 196 of the constitution and borders on direction and control of RPNGC,” the committee said in its report.

It said funding of police personnel’s per diem, accommodation, food and body armour by an organisation other than the constabulary appeared contrary to the constitution and seriously compromised the independence of the police force.

The report stated that the requirement by Esso Highlands that the constabulary, through the police commissioner, withdrew mobile squad personnel from their usual strategic locations around the country for deployment at the project sites bordered on direction and control in the administration and operations of the RPNGC and, therefore, was contrary to section 196 of the constitution.

Esso Highlands project manager Peter Graham informed the committee that the company had similar arrangements with two other countries, Nigeria and Angola, with PNG being the third.

However, the committee noted in its report that the two countries were in varying degrees of civil war, expressing grave concern that PNG had been lumped together in the same category.