Transcript
LUKE FLETCHER: There are a couple of sides to this. There are the promises in the benefit sharing agreement that was made in 2009 between the landowners and the government, which is basically things like infrastructure - roads, hospitals, schools, electricity, that sort of stuff, which was supposed to be delivered by provincial governments with revenues from the project. And there there is the question of cash payments or royalties which are basically just cash transfers from the revenues to individuals or clans. So there's problems with both sets of those things. The royalties have not paid to the landowners in Hela because of a complex set of reasons, mainly to do with the inability of the government to complete what is called the 'Land owner Mapping.' As for, what is even more serious is the lack of development in the region. It is more difficult to understand why that hasn't happened. It may have something to do with what our first report "Double or Nothing; The Broken Economic Promises of the PNG LNG Project" pointed out, which is the budget pressures on the government are quite high and therefore the revenue is less than expected. But probably there are some capacity issues in terms of the ability of the local government to deliver as well.
DON WISEMAN: In terms of the royalties, some have been paid out. It's accepted that in some parts of PNG there have been people who have received royalty payments, but not in Hela.
LF: That's correct. So there are probably communities down near the liquefaction plant in Central Province, down in Port Moresby, and they have started to receive royalties I believe for the past few recent months. Possibly even some groups along the pipe line - I am not sure about that. But most of the issues, really, are centred around Hela. That's where most of the royalties are going to go and that's where the real concerns are. It's a place where there has been a lack of development and it has just had this huge crisis with the earthquake as well. So that's really where our concerns are because that is where we have seen problems in terms of unrest, sabotage, kidnapping, some killings, so that is really the problem area.
DW: So this lack of development and the lack of royalty payments - what impact is it having on the people?
LF: Well people are really upset, and understandably so. They were made these grand promises by both the government and the company, and it's true that the company, especially Oil Search [a minor shareholder but a local company] have participated in some individual development by themselves, such as through the Oil Search Foundation and that sort of thing, but on the whole they have seen much of a change to their quality of life and that is what was promised to them. Now those promises were probably overinflated but the point is that people were expecting it. Quality of life is not good, it has not improved a great deal and they are really angry. They are also angry about the royalties too so there is a lot of tension, there is a lot of frustration. And it's the sort of thing - nobody knows what is going to happen but it certainly could deteriorate at any moment.
DW: Now your report, On Shaky Ground, it includes a number of recommendations and a fair number of them aimed at Australia, but I'd just like to focus on PNG and what you are asking, or suggesting, what the PNG government should do to overcome this situation.
LF: Yeah well obviously we are an Australia NGO, so our primary audience and target is always the Australian government or Australian companies, but having said that it is impossible to engage in this issue without thinking about the country in question. In terms of what PNG should do, obviously that is up to the people of PNG and we are working with partners over there to make sure this message gets out and is getting out. But options that PNG has - I suppose the nuclear option would be to throw out the agreement and re-negotiate it. Now that is a nuclear option because whilst that would bring more revenue into the country it could have implications for PNG's investment grade. But that is always an option. There are other things that they could do that are perhaps less weighty, like around do a public review of the local benefits - what's happened. Why have these local benefits not been delivered. Is there a way to rectify that situation. We are not sure how much they can actually do about the royalties because the royalties are being held by issues of land claims, or competing land claims, getting to the PNG courts. So it is not clear to us how much control the government has of that situation. But I suppose if there was something they could do which was not inappropriate, then I suppose we would probably encourage that as well. But in a general sense I think the report is also encouraging PNG to think about gas as the answer to it solving problems in general. And in that sense really some long hard thinking about all these new LNG projects that are being mooted and whether they are going to cause the same sort of problems.
