"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

Wednesday, 29 June 2011

First the Egyptians, now the Greeks, next Papua New Guinea?

Photo: Greek protesters hold a banner in front of the Parthenon

Last week we posted an article which raised questions over whether electoral politics in its current form constitutes democracy, that is does it enhance the capacity of each individual to participate in the economic and political decision making processes that condition their life. We suggested decision making takes place at hermetically sealed levels, which ordinary people are excluded from.

In Greece at present people are taking to the streets to express their anger over decisions taken by the political elites and bankers, which ordinary working Greeks are now being told to pay for by the European parliament, the IMF and indeed their own government. The question in Greece, the question in Spain, the question in the United Kingdom, the question in Egypt, the question in Papua New Guinea, is whether people can not simply express rage, but can covert this growing revolutionary spirit inspired by decision making from above, into creation.

With the father of Papua New Guinea stepping down from power, fears are arising over a constitutional crisis. The mining companies, loggers, banks and agrofirms do not fear popular participation, the people are too divided by poverty, by clan affiliation, by geography for that, what they fear is that the Waigani elite will become fractured, consumed by in-fighting, which will lead to political stagnation.

Like with the Arab world, there is a belief that Papua New Guineans are incompatible with revolutionary change. Papua New Guineans are too parochial to seriously challenge the status quote, too mired in the world of patronage, localism, clan politics, kinship networks. The question is can these emblems of 'fragmentation',  become a strength that unites people, under a national bloc that seeks to protect culture, land and environment from the coercive forces of capital and political domination.

The Greeks search for their answers, the Egyptians, Syrians, Libyans, Tunisians, Yeminis etc, search for theirs, each answer will be specific to the national situation, but the question is whether a general theme can run through all movements, to depose market determinism and enact a new world of social exchange for social people that takes as its guide human beings, land, environment, sustainability, future generations.

We will continue to challenge the big companies like Exxon Mobil through a peaceful campaign of protest and critique, as will others, but unless the life force of the powerful are challenged on a mass scale, any victory will be temporal and sporadic. Only a united, mass movement will create the environment for true participation in economic and social change in Papua New Guinea.

Sunday, 26 June 2011

Rio Tinto Caused The War: Somare

A story from The Age, does Exxon Mobil have any less leverage we wonder?

PAPUA New Guinea's Prime Minister, Sir Michael Somare, has accused Australian mining giant Rio Tinto and its subsidiary Bougainville Copper Limited (BCL) of being behind the PNG military's bloody suppression of Bougainville rebels opposed to the company's Panguna copper mine.

An affidavit written by Sir Michael when he was Opposition Leader in 2001 - and never made public - alleges that Rio played an active role in military operations that ultimately led to a civil war and blockade of the island in which 15,000 people died between 1989 and 1997.

''Because of Rio Tinto's financial influence in PNG, the company controlled the government,'' Mr Somare's affidavit states.

''The government of PNG followed Rio Tinto's instructions and carried out its requests … BCL was directly involved in the military operations on Bougainville, and it played an active role. BCL supplied helicopters, which were used as gunships, the pilots, troop transportation, fuel and troop barracks.''

The Somare affidavit was lodged as part of an ongoing class action in the United States by the islanders against Rio Tinto.

The case has been bogged down in legal argument for 10 years, preventing much of the evidence, including the Somare affidavit, from being made public. In his signed statement, Sir Michael claims that without Rio Tinto, there would never have been a war.

''It is my opinion that absent Rio Tinto's mining activity on Bougainville or its insistence that the Panguna mine be re-opened, the government would not have engaged in hostilities or taken military action on the island.'' The affidavit will complicate Rio Tinto's current attempts to reopen the mine, which is being supported by Sir Michael's government.

Sir Michael was unaware that SBS's Dateline program had obtained his signed statement from sealed US court material until his office was contacted this week. Sir Michael is recovering from double heart surgery in Singapore and his office was unable to say if he still stood by his comments.

The ailing leader's statement reinforces claims from the islander litigants and former rebels that Rio Tinto had a hand in the military's efforts.

Sam Kauona, a former fighter, said: ''It didn't surprise me, all the time we knew.

''We knew that BCL was financing this war on Bougainville because when we were fighting … all the BCL vehicles were being used by the security forces.''

Panguna landowner, former rebel and local chief Philip Miriori said Sir Michael's statement backs up his long-standing claims about Rio's complicity with the PNG military.

BCL chief executive Peter Taylor was aware of the affidavit, but said he was surprised Sir Michael would ''make these accusations knowing they're completely unfounded''.

Brian Thomson's report on the war in Bougainville screens on Dateline on SBS1 at 8.30 tonight.

This story was found at: http://www.theage.com.au/national/rio-tinto-caused-war-somare-20110625-1gkow.htm

Wednesday, 22 June 2011

Strategies for Changing the World


Following on from our Monday post, the above link is to a very interesting talk by two Irish intellectuals, Kieran Allen and John Holloway on  strategies for everyday people to become involved in building a new movement based on popular participation in the economic, political and cultural decision making processes on which our life, and the life of future generations hinge.

Monday, 20 June 2011

The Impoverishment of Democracy – Papua New Guinea and the Erosion of Popular Participation

If democracy is about popular participation in the decision making processes that directly shape our life, then we should not be looking to western models of Westminster democracy for guidance. In this article we argue that the poverty of electoral politics and the despotism of the market must be challenged by a participatory democracy that actively engages people in economic and political decision making.

In true western conceit the word democracy is commonly fused to a Westminster style system of elections and party politics. This is democracy we are told!

However, what is democracy if we strip away the liberal ideological baggage that is attached to it in the textbooks? In its most stripped down form it would appear that democracy is a generalisation that captures our capacity to participate in decision making processes that shape our life – and thus it is an elementary feature of social life that has occurred in Papua New Guinea for many thousands of years.

However, Papua New Guinea’s integration into the global market and an international system of governance entails that the decision making processes that directly affect us today take place at various social levels and on different temporal scales. It occurs at the level of the family, the local community, the provincial and national level, and indeed internationally. The decisions may be over what is going to happen tomorrow, or what is going to happen over the next decade.  They take place through numerous forums, from world trade summits through to the cabinet room and multinational head offices.  Note, most of these forums we are excluded from. Note also, that those forums where we do have a voice, e.g. the family or local community, are heavily conditioned by those forums in which we do not have a voice.

Indeed, the laws we live by and how public monies are used, is decided within the secretive (corrupt?) corridors of government. Decisions over which regions of the global economy will develop, have access to jobs, the conditions under which work will take place etc, are decided by autocratic business leaders in a more or less anarchic fashion (i.e. it is a sum result of their individual, self-interested decisions). In a real sense then, a market based economy, overseen by a Westminster style democracy, liberalism par excellence, has in fact eroded democracy in Papua New Guinea, leaving decision making it in the hands of an elitist group of politicians and the dictatorship of business heads.

Ironically who has more democracy, a villager who through dialogue and consensus with other community members, has input into how the essential resources of their society are employed, or the city worker who hopes they can find a job, rent an overpriced home, and afford medical bills perchance they or their family gets sick? The decision making processes on which the city worker’s future depends, occurs at levels beyond the scope of their participation – they can only hope and try to survive in conditions dictated to them by others. The villager on the other hand engages in a process of dialogue, where consensus is built, and a decision is reached, they have a real say.

Indeed, regular elections, while obviously important, do not make a democracy. In some senses it can actually erode democracy, if elections mean that decision making is delegated to a small elite, while the people are largely marginalised. If this more or less describes the situation in Papua New Guinea, then no it is not a democracy. However, nor for that matter is Australia, the United Kingdom or the United States. These countries have elections, but citizens do not substantively participate in political and economic decision making. In fact we have been conditioned to believe that this is normal, how on earth could a world develop where consensus was really built through consensus rather than dictation.

Thus the fight in Papua New Guinea should not be purely over formal democracy (electoral politics), this is a struggle for an impoverished form of democracy. The struggle should be over real, substantive democracy, that enhances the capacity of every individual regardless of their wealth, status, gender or age, to participate in the economic and political processes that set the stage in which life is lived (electoral politics, in this sense, must be part of a much broader program of participation). Sure this might take place in important respects through reforming formal electoral processes, but we should not allow this diluted, half hearted form of democracy to dominate our thinking.

Therefore, the question that needs an answer is: what sort of institutions do we need to develop to obtain popular involvement in the economic and political processes that determinate our lifestyle and standard of living?  Of course, any answer to this question demands we violate the norms of a world where those who monopolise wealth through a system of exclusionary private property, feel ordained to make the primary decisions. Indeed, look at the reaction of the national government and MCC to an attempt by landowners in Madang to have a voice in the mine’s waste disposal system. It has been met by violence, threats, and rogue legislation, leading landowners down the adversarial path of court orders and legal actions. Some call the landowners activists, others troublemakers, this however is democracy in action, mediated however through a system that does not tolerate popular participation, thus it takes the costly form of adversarial struggle in the courts.

For those struggling to allow greater popular involvement in decision making over major social processes that will forever change Papua New Guinea, for better or worse (e.g. LNG PNG!), we must have the resolve, the vision, arguments and popular support to violate the norms of the powerful and invent new forums for participatory democracy, otherwise the dictatorship of the market and the autocracy of closed government will continue to prevail. 

Monday, 13 June 2011

LNG Spin, the Echo of History and the Real Questions the ABC Should Be Asking!

In a recent infomercial ... ahem interview ... on ABC Radio for LNG PNG, Esso Highlands boss Peter Graham celebrated the innovative range of benefits being devolved to local communities as a result of the LNG project. For those versed in the history of mining in PNG, however, there was a definite echo. The very innovations which Graham suggests will endear the LNG project to local communities, are a carbon copy of Bougainville Copper Limited’s (BCL) localisation policy, which to put it mildly was an abject failure. Here are a few examples of their shared approach to localisation:

Corporate Social Responsibility

Peter Graham: “Long-term the security of the project is really driven by the relationships you have with the people in the communities in which you are dealing. We recognise that, we understand that we need to be seen as good corporate citizens within those communities, to be a participant in the community and to have a sense of ownership by the people in the communities, of the project. We nurture that sort of relationship with communities”.

BCL: The first boss of BCL, Frank Espie claimed, “[c]ontrary to some impressions, the Chairman of a multinational company can be a responsible citizen ... I am best able, in the long run, to ensure the return on my shareholders’ investment by conducting our business in a way which satisfies local requirements”. 

Training and Employment

Peter Graham:  “I think as a matter of priority we have decided to take a very comprehensive approach to national content. We would like to maximise the opportunities for Papua New Guinea citizens to participate in the project so we have invested heavily in creating substantial training institutions in PNG to help develop the skills of Papua New Guineans during the construction phase.”

BCL: According to former BCL Managing Director, Paul Quodling, BCL actively localised its staff, consequently by 1988 83% of the company’s employees were Papua New Guinea nationals, with preference informally being given to Bougainvilleans. Moreover, according to two former BCL Chairmen, Don Vernon and Don Carruthers, during the life of the mine BCL trained over 12,000 Papua New Guinean citizens.

Local Business Assistance

Peter Graham:"When you look back over the history, certainly of the oil and gas industry in Papua New Guinea, there have been some great successes and there have been some areas where business development hasn't been quite as good as it might have been, you know, companies failing. And we'd like to do everything we can to ensure we do not have business failures in Papua New Guinea associated with the project. So we set up what we call the Enterprise Centre, but basically it is a resource centre. Its an organistion, a physical institution with resources in it, provided free of charge, to landowner companies in particular to develop their business skills, to develop a sound business plan, understand the roles of directors and officers of the company again to ensure that once they get started there is a sustainability about what is developed and we don't have to deal with collapsed companies and the debris that can come from that."

BCL: BCL created both a business advisory service in order to foster small business, and a community relations department. Additionally, BCL also helped to initiate and fund the Bougainville Copper Foundation, a charitable body constructed with the broad aim of improving the welfare and development of the people of Papua New Guinea.

Landowner Companies

Peter Graham:  “As far as I am aware the approach here is unique. I am not aware of other countries where there is this particular approach to developing landowner companies. Certainly micro-businesses are developed in other countries but here there has been and we've made a major push, as has Oil Search and others, in developing business opportunities associated with the project. I think we've made good headway ...  We allocated a number of reserved areas to give them a leg up so they could start with confidence to develop skills in those areas, things like catering, camp maintenance, security, labour hire, and get them focussed on that rather than spreading their interests focussed across a very broad spectrum of business opportunities. .

BCL: According to former BCL Managing Director, Paul Quodling:  “The organization of mess food-buying through rural consolidation agencies opened up a lucrative market for garden-style cash crops. Service functions ancillary to BCL’s mainstream operations were devolved to local contractors. Labour contracts, transport, security services and building were typical industries that attracted individual or community involvement. Since not all business opportunities were within the competence of such groups, provincial planners incorporated the Bougainville Development Corporation to develop middle-size ventures often in partnership with offshore experts”.

The Elephant in the Room: The Questions Resource Operators Wont Answer

Behind these elegant defences of the LNG project, Graham fails to address, what all major resource developers in PNG fail to address:

Who will bare the environmental costs of the project?

How will rapid urbanisation and mass migration be addressed?

Why should we think that the taxation revenue will not be squandered by a corrupt and inept state?

How will Exxon ensure that local benefits are not monopolised by a small minority of local elites, leaving women, young people and other marginalised community members on the periphery (whilst also placing stress on intra and inter community relations)?

What safeguards are in place to ensure communities are not dispossessed of their land through the rapid, uneven development of the rural economy, fostered by the project (e.g. due to new demographic pressures and new land use practices)?

These issues are of everyday concerns for communities in PNG, for resource operators these are issues to be danced around and avoided for the duration of the project (pesky NGOs that raise these issues, can be accused of having hidden agendas, because as we know multinational corporations are pure of heart Papua New Guinean nationalists). Unfortunately while resource operators can cut and run when the realities of social dislocation, dispossession, inequalities and cronyism reaches its peak, local communities cannot.

Friday, 10 June 2011

Imperialist Light or Imperialist Heavy: An Interview with Don Poyle

Sacked PNG Foreign Minister on US China rivalry in the Pacific

Papua New Guinea's outgoing Foreign Minister, Don Polye, says he would like to see more United States investment in the Pacific.

Earlier in the year, United States Secretary of State, Hilary Clinton, warned the US Foreign Relations Committee that the Pacific, and Papua New Guinea in particular, is an arena for growing strategic competition between the US and China.

Despite China's rapidly diversifying interests in the region, the United States has just one major investment in Papua New Guinea - the PNG LNG project.

And the US has alienated key Pacific nations, such as the 8 tuna-rich countries that are parties to the Nauru Agreement.

In Papua New Guinea, an influx of new Chinese investors, some of whom are illegal immigrants, is creating a backlash.

Mr Polye, who as you've heard was sacked this week as PNG's Foreign Minister, following ongoing leadership tussle with acting Prime Minister, Sam Abal.

But in the lead up to next year's general elections he will continue to be a major force in PNG politics.

He spoke with Radio Australia's Pacific Business and Economic reporter, Jemima Garrett, in his parliament house office, before he lost the Foreign Minister's job.

Presenter: Radio Australia's Pacific Business and Economic reporter, Jemima Garrett
Speaker: Don Polye, Papua New Guinea's outgoing Foreign Minister
GARRETT: Don Polye, thank you for joining Radio Australia and welcome to the program.

POLYE: Thank you for giving me that opportunity.

GARRETT: US Secretary of State, Hilary Clinton, says PNG is one of the hot spots for strategic competition between US and China. What are you seeing on the ground?

POLYE: There are two things I'd like to mention here. What Hilary Clinton said probably is true. But we like to see every player play our rules and our standards here in Papua New Guinea, where every rule of law and every rule of business is followed. Secondly, we welcome the competition because its going to be a positive development for Papua New Guinea. In other words, an increase in investment into the country, will definitely boost our business activities and economic activities here. I welcome the competition and look at Papua New Guinea as a strategic place to invest in . However, I would like to make the point that we should work together on a level playing field following all laws.

GARRETT: John Momis, the President of the Autonomous government of Bougainville, has said apart from the PNG LNG project American investment is conspicuous by its absence. In fact, he said there was so little he thought the US had a policy of NOT investing in PNG. How do you respond to those comments?

POLYE: Well, it is quite true to an extent. You look at history. Americans have never invested much in the Pacific region, as a business. Of course they've got military bases up there in Guam, and the Philippines and others. And of course, they had the involvement in the second world war and they came to PNG but after that you come another 20 years and you really would not have seen any American investments here, and the one we have seen is the Exxon Mobil. I think Chevron came in but they went out some years back so really I think this is on a bigger, larger scale but on a smaller scale investments and trade there hasn't been as much as other countries investing in PNG.

GARRETT:Do you think the United States has left too much of the running to Australia?

POLYE: Laugh - I really don't know about that. I can't answer the question. But I think, the US is a big economy maybe they are too big. And they care less to invest. I mean they've got all their businesses, there. They are already a flourishing superpower so they probably 'why should we invest in other countries? We are big already. We have ventured a lot of these American dreams' and so forth. But Australia, I don't think they've come and invested in PNG because of such mind set by US. Australia would naturally be investing because PNG is the closest destination to invest. Even in the colonial days Australia showed a lot of interest in PNG in alluvial goldmining and other activities so traditionally you'll find Australians have always been here -easy for them to invest in a country they have always been familiar with but US, like I've said, maybe they are too big.

GARRETT: Papua New Guinea has also recently walked out of talks to renew the Pacific tuna treaty with the United States because the United States wasn't paying what PNG thought was a reasonable licence fee or willing to offer competitive market access. Are PNG's relations with the US at something of a low point?

POLYE: I don't know I do not like to see Papua New Guinea's relations with the US at a low point. I would like to think that we could discuss those issues on the table. I know there has been some exchange on the media on this, when our acting Prime Minister did make some comment on this issue but I think new can always discuss those things. Come to a roundtable and see how best we can address those issues. I would like to also make, PNG sees US as important in the region, in the Pacific although they did not have a big investment in the country we regard them as very important to the Pacific region. And therefore we would like to see them invest more here and fisheries is one area and I would like to encourage them to relook at the issues that PNG has raised. We are probably saying that because we are applying the same fees to others like Japan. With Japan, for some time pulled out from fishing in PNG but recently, in the last 2 to 3 years they tried to show a lot of interest in investments here. So I would like to think the US and Papua New Guinea should discuss more. Understanding one another better would be the way forward. And I encourage the US to invest more in PNG and in the Pacific because that is what is happening at the moment.

GARRETT: Let's turn now to China, just how much interest is PNG seeing in investment from China, particularly in the resources boom?

POLYE: My view is that China's approach to investments - they just do investments regardless. They are aggressive. Most of the businesses you find, the big companies are owned by the state and they come in a big way. And Chinese business men and women I also see them in a driving to invest here in Papua New Guinea. I think it is also a cultural thing too. I also think it is an issue of standards, and the legislative framework that's in place in the country, as to how you go into business within those frameworks. There is a lot of factors that really drives people but China is becoming a major investor in this part of the world.

GARRETT: Some commentators have suggested that there are now double the number of Chinese citizens in PNG, both legal and illegal, compared to the number of Australians. What is your assessment of the situation?

POLYE: It could be true. I do not have any official report to give you a specific answer on this but what you hear people saying could be true. I have just talked about the asylum seekers issue. In PNG there are people who come in illegally without our systems even knowing about this. That is an area of challenge to me as Minister for migrations, in really coming up with laws. In fact, I am reforming laws now to combat or to address some of those issues so we stop illegal migrants into Papua New Guinea. The point that I alluded to earlier on - we encourage investments in the country but by following the rules. Sometimes unfortunately, the rules are not followed. Illegal immigrants come in because of the incapacity of our own systems in the country, we do not effectively detect them and take necessary actions. So we do admit to some of those shortfalls, on our side, but we would like to also encourage people who come into this country to be responsible. I encourage people who come here to do business in a genuine, honest, and through the legal processes. But those who come in illegally �by the reforms that I am doing you will find I am getting much tougher on illegal immigrants.

GARRETT: Australia does give substantial aid to the PNGDF but would you like to see more aid specifically to this issue of illegal immigration?

POLYE: Yeah - well illegal immigration is a big area that we can address together. The business in this country must b e on a level playing field. It is unfair for some business who come in to do general business complying with all rules while others just come in to rip-off things and stay out of the legal spectrum and that is not good. We are reviewing the issues. We have a meeting coming up in July this year - somewhere in Canberra or Brisbane yet to be confirmed - but in that meeting we will have to address those issues of immigration, of border security, how we do that because it affects business and most of those illegal immigrants in this country have been Chinese and we'd like to discourage that. And to protect business, I think that is where PNG and Australia and of course others in the region, the Pacific Islanders, Indonesia, Malaysia, all of us should be working together.

Monday, 6 June 2011

Global Insights claim 2014 LNG start "seems challenging"

Source: Tom Grieder, Global Insight
Date: 3 June 2011

In a rare interview with Radio Australia, Peter Graham, managing director of ExxonMobil subsidiary Esso Highlands, has confirmed that the PNG LNG project is on-track for commencing exports of LNG in 2014. In the interview, Peter Graham stated that ExxonMobil planned to sell its first LNG cargo out of Caution Bay by the fourth quarter of 2014, which a report from Citigroup stated was towards the end of ExxonMobil's long-standing guidance for commercial start-up of 2014. In the report, Citigroup estimates that a delay in the launch of commercial cargoes from the project to October 2014 would probably be accompanied by a cost increase of around 10% to USD16.5 billion. The day after Citigroup issued the report, Miles Shaw, an ExxonMobil spokesman in Papua New Guinea (PNG) stated that Peter Graham misspoke in the interview, and that it was "still too early to narrow the start-up window" beyond the year 2014.
The company's retraction of Peter Graham's comments are probably aimed at reducing the concerns of project investors, who have loaned around USD10.25 billion to the project. However, the comment betrays the personal opinion of the managing director regarding the construction schedule. Peter Graham commented in the interview that one of the major challenges to delivering the project on time is access to land. To support land-acquisition activities, ExxonMobil spent six weeks negotiating and executing the "PNG LNG Umbrella Benefits Sharing Agreement" in a process completed on 23 May 2009. Under this agreement, landowners recognised by the government and owning land within a petroleum-development or pipeline licence, and those who own land within a buffer zone up to 5 km from a pipeline or LNG processing facility, are eligible for benefits from the project.
Nevertheless, certain groups and tribes have rejected the benefits-sharing agreement process undertaken by Esso Highlands and the PNG government. The 26 Tuguba clans which own land in Petroleum Development Licence (PDL) 1 and PDL 7 near the Hides gas-conditioning plant are not happy with the agreement, and have submitted other grievances to the PNG government such as non-payment of money for indigenous business development, or for infrastructure development promised under the memorandum of agreement (MoA). Following the recent death of Tuguba chief Himuni Homoko--who the tribe claims died trying to secure benefits from the project--members of the Tuguba descended onto the Hides project site demanding compensation, with some reports stating that there were attempts to block access to the facilities. Esso Highlands then asked all engineering contractors to cease work at the facility, reportedly out of respect for Himuni Homoko, although health and safety issues associated with the large number of people around the project site might have influenced the decision.
ExxonMobil's strategy of signing agreements with umbrella companies to secure business opportunities for landowners in project areas has also encountered opposition. In October 2009, ExxonMobil signed service outline agreements with the Hides Gas Development Company Ltd and with Laba Holdings Ltd allowing these companies to carry out labour, equipment and freight, catering, and equipment hire in two different areas of the project. Despite entering into a number of joint-venture agreements, the selection of the umbrella companies perceived to take the lion's share of the contracts from the project may have created grievances among landowners backing rival companies, which were not selected by project partners. ExxonMobil also faces issues in effectively distributing benefits-sharing agreement money due to corruption in PNG, and a lack of government capacity to handle funds. Validating landowner benefit claims is also problematic, due to a lack of clarity about landowner identities, and it will also be necessary to develop an efficient mechanism for recording and addressing landowner grievances. These problems are unlikely to be resolved in the immediate term given their complexity, while releasing funds to representatives from the Tuguba tribe might simply encourage rival tribes to step up their demands.
Outlook and Implications
At the end of the first quarter of 2011, Esso Highlands reported that a ground-breaking ceremony had been held for construction of the LNG processing trains, that 67% of the pipeline route had been surveyed, and that a number of supporting infrastructure projects had been completed. While progress on the project is clearly under way, the first quarter of this year saw an invasion of approximately 150 people at Wellpad A Camp, which resulted in non-threatening injuries to project workers, the relocation of non-essential personnel, and operations suspended for worker safety reasons.
These kinds of difficulties for the PNG LNG project are likely to intensify in the years ahead. In 2012, the project will move into the heavy construction phase, which will mean greater impacts on landowners in the project areas. If landowners' benefit demands remain unfulfilled, then an intensification of protests against the project or clashes between rival groups over benefit distribution could be the outcome. The PNG government is trying to react to the latest concerns voiced by the Tuguba tribe--notably by appointing the Minister Assisting the Prime Minister on Constitutional Affairs, Francis Potape, to attend negotiations with the family of the deceased chief, Himuni Homoko, to resolve their grievances.
However, issues like establishing rights to land or recovering lost benefit-sharing money appear very difficult to resolve in the near term, while in mid-2012 PNG is set to have a parliamentary election. Political attempts to manipulate landowner grievances over the PNG LNG project to win support are a possibility, and violence against the project during this time is a possibility. Meanwhile, US Secretary of State Hillary Clinton has commented that China is trying to undermine the project. In February 2011, it was reported that an unidentified Chinese investor was in talks to try to develop gas reserves above the initial reserve base that ExxonMobil had committed to developing. The Chinese investor also reportedly agreed to pay the Tuguba clan around 1 billion kina (USD416 million) in business development grants (BDGs), placing pressure on ExxonMobil to match the payments or lose the tribe's support. Achieving the 2014 target for exports of LNG therefore seems challenging, raising the risk of cost overruns--the difficulties ahead may account for ExxonMobil's determination to keep its commercial export launch date vague, and not to commit to a quarterly start-up target.

Thursday, 2 June 2011

Temporary Shutdown at LNG

Post-Courier 1/6/11

EARLY works on the multi-billion kina PNG LNG projects at Hides 4 PDL 7 and the existing Hides PDL 1 would shut down today.
This was confirmed by police and some employees of international contractors developing the proposed LNG condensation plant site and other operations within the Hides 4 PDL 7 and Hides PDL 1 projects sites.
The sources said developer of the LNG project ExxonMobil through its subsidiary Esso Highlands Ltd (EHL) had asked all the international contractors like Clough Curtain Joint Venture (CCJV), Chicago Bridge and Iron Clough (CBIC) working on the engineering, procurement and constructions (EPC) 4 phase, the development of the LNG condensation plant site at Para and Spiecapag that is contracted to develop the LNG pipeline route to "stop work today as a sign of respect" for the late Tuguba and Hides landowner, chief Himuni Homoko.
Mr Homoko's body is expected to arrive in Tari from Port Moresby today for burial. His relatives and other landowner leader from Hides 4 PDL 7 and Hides PDL 1 have demanded the national government to release their outstanding memorandum of agreement (MOA) and other benefits, adding that the late Homoko died while awaiting these payments. The sources said no stop work occurred on the weekend as reported by the other newspaper despite their brief stop on Sunday but resumed again on Monday.
Police mobile squads providing security at the Hides LNG project sites confirmed yesterday that they were aware of the stop-work today in respect of the late chief.
The LNG policemen said they would be on full alert in case some opportunists take advantage of the situation and cause trouble with the developers and the project.
Police said on Saturday evening, some landowners fronted up at the gates of Hides 4 with a portrait of their late leader and demanded the international contractors to stop work until the government addressed some of their demands, like the immediate release of the memorandum of agreement (MOA) funds.
However, police said they intervened and despite the short commotion which was peaceful and non confrontational, all operations at the project site resumed on Monday.