A failure to work with the community could undermine the $16 billion project.
''Hela society is very unpredictable, like the weather is unpredictable. But one thing I can say is that if the people see they have been cheated, if the people see that their rights have been deprived, then there may be problems.''
Community leader from Hela Province, the heartland of the $16 billion PNG LNG project.
THREE years after work began in earnest building the hardware to extract and pipe gas from the mountains of Papua New Guinea, initiating what is spruiked as a game-changing bonanza for the fragile nation, many local people remain excluded, frustrated and suspicious about the $US16 billion project.
The PNG LNG (Liquefied Natural Gas) project has already utterly changed their lives, according to an academic investigation.
Failures to better inform the local Hela community about the project, together with flaws in the critical processes of identifying landowners entitled to a share of the windfall and concerns about how the benefits will ultimately be shared, are identified in the new report as potentially damaging concerns in a region infamous for volatility and violence.
Causing particular anxiety was that the failure - blamed largely on the PNG government - to facilitate a full landowner identification process and legislate around creating landowner companies threatened to ''undermine the LNGP and future progress''.
The report - to be launched in Canberra today by parliamentary secretary for Pacific island affairs Richard Marles - says that although the LNG (Liquefied Natural Gas) project represents a significant opportunity for PNG, one which has already yielded benefits for some in local jobs and a boosted economy, these gains are at risk of being undermined if local disenchantment and simmering social tensions ignite the powderkeg Highlands region.
The report lays out a detailed examination of some of the challenges to development in a country such as PNG.
Despite its bountiful resources - PNG is an island of gold, floating in a sea of oil, surrounded by gas, so the ritual boast goes - in terms of exploitation the result over the years ''has at best been mixed, with few long-term benefits being passed on to the wider population'', the authors write.
The reason PNG has struggled to capitalise on its natural abundance, and in some cases has ''suffered serious environmental and social harm in the wake of resources development'', is due to a mixture of factors, foremost among them failures of governance - ''the absence of good institutions and sound economic policy'' - and the fragility of vulnerable indigenous populations, many of whom struggle with the social fallout of the roller-coaster rush to modernity that comes in the wake of mining and logging operations.
Hela Province, which is the crucible of the nation's economic hope, presents a formidable set of hurdles to any potential investors and developers, the report explains.
Geographically it is remote and wild country - a landscape of steep mountains, choking forests, isolated subsistence gardens and villages connected by few roads and broken bridges. It also has some of the lowest literacy and highest levels of child and maternal deaths in the nation.
The report argues that the key to the LNG project achieving its potential to deliver benefits to the community - without overwhelming social costs - requires the resources companies, the community and the government to ''accept and discharge wider responsibilities beyond the narrow remit of self-interest.
''The role of resource development projects such as the LNGP should not just be income generation,'' the report argues, ''but the promotion of wider human development aspirations such as improved livelihoods, greater access to education, better nutrition and healthcare, surety against crime and physical violence, cultural and political freedoms and a feeling of participation in community life.''
''A unique partnership has to be built if this very important project is to succeed,'' said lead author Dr James McIlraith of New Zealand's University of Otago.
Given the nation's ongoing political crisis, ''in the immediate short term, the government doesn't have the capacity, it's going to have to be Esso and the churches who need to pick up the slack to some degree.
''I think Esso are a bit reluctant to do that - they have a business orientation - but these are very unique and challenging circumstances, and to succeed with this project, both in terms of its business and profitability, and to succeed in the community, Esso has to take that different track.''
A spokesman for Esso Highlands said the report identified many issues and challenges that were already being actively addressed.
''We are committed to developing the PNG LNG project in a manner that protects Papua New Guinea's natural and social environments, while providing economic benefits to its citizens.''
The research was sponsored by six partners - the PNG Church Partnership Program, ChildFund, Oxfam, the Melanesian Institute (a research and training body in Goroka), the University of Otago, and Jubilee Australia.
Read more: http://www.smh.com.au/business/png-gas-project-faces-risks-20120528-1zfb6.html#ixzz1wB36JIZV