"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, 20 December 2012

LNG may have negative impact

By Ancilla Wrakuale: Post Courier 20 December 2012 

AN investigation report on the PNG LNG project by an NGO called Jubilee Australia has revealed that there are serious risks that revenues generated by the largest multi-billion kina gas project will not mitigate the negative economic and social impacts of the project.

“In fact it is very likely that the project will exacerbate poverty, increase corruption and lead to more violence in the country,” the report says.

The PNG LNG project is the biggest-ever resource undertaking in the history of PNG and the Pacific.

“The project is expected to generate as much as $US19 billion in tax, levy and royalty receipts to the PNG government over the 30 years that the gas will flow.

“The report is the most complete discussion to date of the potential risks and benefits of the project to the people of PNG,” the authors said.

The report highlighted circumstances, events and impacts associated with the multi-billion gas project in PNG.

Director of the Institute of the National Affairs (INA) Mr Paul Barker said the construction phase has brought major inflows of jobs and activities to both local and overseas businesses.

However, he said as the construction phase winds down, there will be few jobs offered by the project to less than 1000 jobs as the project goes into the production phase in 2014.

“Once LNG is in production it will provide few jobs, so the benefits depends on how well national and provincial governments and landowners invest and utilise their funds,” Mr Barker said.

“If they’re wasted through inefficient management, corruption etc, then the opportunity will have been lost, and the whole venture will end up with a negative gain for PNG. If it uses these funds efficiently, there is a good chance there could be solid net gains for the country.

“The trouble is that PNG’s track record with money has been poor. In the 1990s the then ‘minerals boom’ encouraged loose expenditure, boom and bust, with a series of structural adjustment programs to try and put the economy back on a solid footing,” Mr Barker said.

Meanwhile, there are also concerns that the LNG project is also having an impact on agricultural commodities with the appreciation of the PGK on the global market.

Executive director of the PNG Palm Oil Council Mr Ian Orrell said one of the impacts of the county’s booming extractive sector, as we have already seen, is an appreciation of the PGK that has affected the export of agricultural products,” he said.

“This has already had a very significant negative impact on the country's agricultural export crops.

“The two most dominant factors affecting the price we get for export crops are the global commodity price and the value of the PGK against the currency the commodity is traded in on the world market".

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