By SEKINOLO SAWALA
Friday’s (20/08/2021) The National newspaper headline titled ‘Clans told: K1 billion waiting for you’, and the other tabloid on page 3 titled ‘… K3.7 billion paid to State since 2014…’ cannot go without criticism.
What has become of the dream project that was to bail PNG out of poverty and financial woes? Surely, the Government is responsible for series of instances of ‘benign neglect’. Sadly, the Government has failed miserably in its responsibility to ensure landowners’ and its interests were maximised and protected pertaining to the PNG LNG project deals and arrangements. The Government is yet to admit its guilt of failure 12 years down the history.
It has taken 12 long years for the landowners to be told by the State to keep waiting for the benefits since 2010 when the project kicked off with the signing of Umbrella Benefit Sharing Agreement (UBSA) in 2009 at Kokopo, ENB Province. It will not be paid out as yet, and the wait might be a never-ending one for the poor landowners. Unfortunately, for the fathers and elders who were close to the land on which the LNG resources are extracted, most have died in the past 12 years whilst waiting. The remaining few will continue to pass away without having to realise the benefits because what was declared yesterday will still be held back by the State for the next 12 years awaiting social mapping and landowner identification studies to be concluded. The government agencies responsible for the conduct and conclusion of the Social Mapping and Landowner Identification Studies have failed everyone time and again. Should it take another 12 years for Department of Petroleum and Energy to sort out the landowners?
Papua New Guineans should all bury our heads in shame because the amount of money mentioned in the daily newspapers should have been tenfold or more. It is a false impression portrayed using media to divert public attention away from real issues. This style of media propaganda has been common and has misled public perception in PNG by big Multinational Companies and the Government. Why reporting on scraps and dogs share instead of putting out information on the entire income of the LNG earnings made from 696 shipments so far? Why is it that the lion’s share always go unreported and kept secretive?
What if it was reported the other way around, say… ‘US$98.6 billion (K300 billion) of LNG Benefits paid out to Foreign Stakeholders’? What is the rationale behind publicising K3.7 billion in LNG benefits for PNG as compared to K300 billion paid out to the foreign shareholders of the project? Have we lost our heads? We should be publicising a windfall of K1 billion a year in the media, and not a cumulative total earnings of the past 8 years from 2014 to 2020. The sad fact is that PNG has been paid about US$137 million every year since 2014 being the proceeds of LNG sales. This amount is 10 times less than what commodities like Coffee or Cocoa or Oil Palm earns.
Well, one could be wondering how this figure K300 billion is derived. It is calculated from the Shareholders’ stake in the PNG LNG project as shown in the pie graph below at the time of signing of the Umbrella Benefit Sharing Agreement (UBSA) at Kokopo in 2009.
It supposed to be the other way around where PNG should be getting a bigger and better slice of the LNG benefits, but sadly, this is not the case anymore. In law, the Oil & Gas Act provides for 22% of benefits from any Petroleum project to be retained by PNG, i.e. 2% to the landowners and 20% to the State. However, PNG ended up with 1.4% in the PNG LNG project deal. The PNG government has to come out straight and tell us the whereabouts of the missing 20.6% since PNG’s share remains to be 0.20% through Eda Oil.
The LNG project proponents failed miserably to honour the UBSA undertakings in Kokopo benefits sharing forum. The landowners were promised K120 million in Infrastructure Development Grants (IDG) every year commencing in 2010 for a period of 10 years, which was to end in 2020, for a total funding of K1.20 billion. It was promised that 10 sets of K120 million was to be disbursed to landowners to improve Infrastructure and their lives. Too bad for the landowners as the IDG funds were never disbursed by the Government to date. Only one IDG disbursement was done in 2011 and the other 9 sets still remain outstanding to date. The Government was supposed to carry this burden and honour these LNG project commitments.
There is only ‘one writing on the wall or billboard ’when it comes to the Size of Benefits the Government takes home for the people of PNG, and reads “LNG Deal A Daylight Robbery”. You may freely interpret it in any synonyms such as; PNG fails to secure better LNG Deal or The Lions have it all orrather PNG Sold Out and so forth. The process to change the writing on the billboard should have started with the elevation of Hon. James Marape as the Prime Minister because his policy platform targets to change such writings on the wall.
The PNG Government has to tell the nation how much stake it has secured in the PNG LNG project. Lawfully, PNG is entitled to 22%. The State needs to clarify and the people need to know. The State must also clarify how much volume of trillion cubic feet (tcf) of LNG one shipment carries to foreign markets and the market value of that shipment. So far, as of 2020, 696 shipments have been made since 2014 at a rate of about 100 shipments per year.
Why is it that the lion’s share always go unreported in the daily newspapers or kept so secret? Is it because the people will revolt after knowing that PNG has been ripped off by so-called investors? For how long should the landowners continue to wait? The State has been failing in its duties and has long been responsible for benign neglect.
The author is a Private Consultant and regular contributor to our column.