Concerns over PNG government move for Ok Tedi and SDP

Transcript

Papua New Guinea's Parliament has been debating legislation to transfer ownership of the Ok Tedi mine and the PNG Sustainable Development Programme to government.

This comes after the chairman of Ok Tedi and PNGSDP, the former Prime Minister Sir Mekere Morauta, accused the state of trying to steal a lucrative mine and its associated $US1.4 billion long-term fund from the people of Western Province.

But the Prime Minister Peter O'Neill has rejects the claim, saying the government is not taking over management of the asset but rather ownership of shares which belong to the state in the first place.

Paul Barker of Institute of National Affairs says looming over this debate is the lack of benefits from the mine for people of Western province.

PAUL BARKER: Obviously, one of the sources of benefits has been through the fund that's received by PNG Sustainable Development Programme Limited, and they have been managing programmes in the province and around the rest of the country, as per their mandate, and they have put together a substantial sum of money, which is accounted for in a fund which is held in Singapore. But the money is there to be drawn down for project activities in Western Province over the course of the life of the existing mine and beyond the life of the existing mine. Yes, in the last days there have been complaints by the people of Western Province over the proposal by the national government over the control of the OK Tedi mine, but the OK Tedi mine is already owned by the people of Papua New Guinea and 51% or 52% shareholding held by PNGSTP, which, in turn, is obliged to spend nearly half of that money in Western Province. So, effectively, there has been a concern that PNGSTP has not maybe put enough on the ground as fast as they could for the benefit of the people of the Western Province. But at least the funds are there and accounted for. There's a concern by the people of Western Province that one might be replacing a mechanism that can be improved with a mechanism that for many years through the government system has been a lot less accountable. So despite the concerns they do have with respect to PNGSTP and the OK Tedi mine ownership many people in Western Province prefer the mechanism that is in place maybe being refined and improved to a mechanism where the national government basically has control where they're not necessarily convinced that national government will manage it too well.

JOHNNY BLADES: The government has been pushing hard for that control, haven't they, over the last year or two?

PAUL BARKER: Yeah, they have. But it's already owned by the people of Papua New Guinea. It was transferred by... BHP's share of it was transferred a number of years ago, and the other shareholders basically withdrew, as well, so it basically belongs to the people of Papua New Guinea, for use particularly for Western Province. And it has over many years been the major single revenue supplier for the national government in its taxation. So, again, the national government has received money, but not necessarily accounted for money either within western province or the country as well as many people on the ground may feel.