Despite the deputy prime minister launching reform recommendations, PNG's informal economy continues to struggle

BUSA JEREMIAH WENOGO

PORT MORESBY - When the first audit of Papua New Guinea’s informal economy was launched in 2019, it generated a sense of optimism for the future of this important sector of the nation’s economy.

But a year later, despite legislation and policy encouraging the growth of the informal economy, its participants remain voiceless – and depressed.

The informal economy is estimated to involve 75% of the PNG population.

The lineage is strong - Paul Kurai in front of the yar tree at Ela Beach in Port Moresby which his father is said to have planted during colonial times

DANIEL KUMBON

WABAG - Paul Kiap Kurai is probably among just a few Highlands businessman, if not the only one, who has given away a successful business entity to a clansman on a golden platter.

He gave the Neneo Construction company to his Kamainwan people of Kaiap as a gift so they too would benefit from the proceeds of his blessings.

It was an action rarely seen in competitive Highlands society.

Woman panning for gold in Bougainville

NEWS DESK
| Human Rights Law Centre

MELBOURNE - Mining giant Rio Tinto is responsible for multiple human rights violations caused by pollution from its former mine in Bougainville.

For 45 years, the Panguna copper and gold mine on the island of Bougainville was majority-owned by the British-Australian mining company, but in 2016 Rio Tinto divested from the mine, leaving behind more than a billion tonnes of mine waste.

Kuimas project area map

STANLEY ARURU PUNDIYE
| CEO, Kuimas Minerals Company Ltd

PORT MORESBY - While the Chamber of Mines and Petroleum pleads with the Papua New Guinea government to postpone reforms to the mining act, issues affecting resource owners are being ignored.

The changes to the mining act are being addressed by parliament to fix possible issues that may affect foreign investors.

The dramatic decline in formal sector employment in PNG,  2013-20

STEPHEN HOWES & JOTAM SINOPANE
| DevPolicy Blog

CANBERRA - There is no doubt Covid-19 is causing great economic damage all round the world, and Papua New Guinea is no exception.

One estimate from the PNG Trade Union Congress is that more than 10,000 jobs in the private sector have been lost due to the pandemic and the subsequent state of emergency.

Belden Namah - "The Marape government has totally failed the people at a time when they need their government the most"

BELDEN NAMAH MP
| Leader of the PNG Opposition

PORT MORESBY - The price of gold has taken off around the world as the Covid-19 pandemic pushes investors to turn away from currencies to buy gold but PNG is missing out because of the continued closure of Porgera gold mine.

The government of prime minister James Marape is fully responsible for this loss of revenue because of its decision to refuse an extension of the special mining lease to Canadian miner Barrick and the protracted court proceedings that have resulted.

SCOTT WAIDE
| My Land, My Country

LAE - Papua New Guinea’s environment minister has tried to ease tensions over the proposal to dump mine waste into Huon Gulf in Morobe Province.

Wera Mori says it has not been decided if tailings from the K17 billion Wafi-Golpu project will be disposed using deep sea tailing. But he also admitted that the construction of a tailings dam is not part of the plan.

Eaglewood collectors. They do not know the true value of this highly sought after wood and are ripped off by unscrupulous traders

PHILIP FITZPATRICK

TUMBY BAY - In 2012 I was trekking through the hills north of Amau in the Central Province carrying out a social mapping study.

I overnighted in several small villages and hamlets staying in local houses and enjoying the hospitality of the owners. Sitting around a fire in the evening is a great way to collect social mapping data.

A popular topic of conversation at the time was garahu or eaglewood. This was something completely new to me and I pricked up my ears.

"Young came to have more profound impact on the Wopkaimin than any previous colonial administrative or army patrol. He made ethnographic observations but more importantly recorded that the streams seemed to contain copper deposits"

COL YOUNG

EX KIAP WEBSITE - I have often meant to write of my 24 day patrol to the Star Mountains (Wopkaimin) in August and September of 1966 and the finding of copper sulphate presence in that remote north western corner of the then Western District.

There has been some confusion as to who first discovered evidence of copper leading to the Ok Tedi venture, hence this article.

STANLEY PUNDIYE

PORT MORESBY – A month ago, on Wednesday 17 June, the Papua New Guinea parliament passed a mining amendment bill suppressing the participation of landowners in the development of PNG mineral resources projects and promoting the participation of the State.

The bill provides a legal basis for the government and foreign investors to take their cut of the pie but the position of landowners’ equity is not very clear.

Morata street stall

EDDIE TANAGO PAINE

PORT MORESBY - On the eve of Papua New Guinea’s state of emergency shut down, little did informal vendors know how this sudden decision would snap their daily livelihoods.

While the state of emergency was a crucial measure to prevent the spread of the virus, the restrictions imposed had a devastating impact on the majority of urban people.

A billboard advertising Justin Parker's company, Golden Valley (Australian Financial Review)

ANGUS GRIGG
| National Affairs Correspondent | The Australian Financial Review

SYDNEY - The lockdown has been good to gold. Since early February it has rallied more than 10% as investors predictably sought shelter in the precious metal during these uncertain economic times.

But some of that sheen has come off this rally in recent days after The Australian Financial Review revealed industry standards around ethical sourcing, or ‘conflict gold’, were hollow at best.

Alluvial gold miners,  Dantanai,  Kieta District. A Human Rights Watch investigation found illegal artisanal gold miners around Porgera routinely use mercury,  a poison which has had significant health impacts on both miners and their families

SAM JAY KAUPA

The unlawful extraction and export of gold is a scandal in both Papua New Guinea and Australia. Among the major beneficiaries, it seems from a recent investigation by the Australian Financial Review, even the respectable institution, the Perth Mint. Sam Jay Kaupa is an experienced mining engineer and manager with extensive domestic and international experience - KJ

PORT MORESBY - There is a question people need to ask. Why can’t the central bank of Papua New Guinea buy gold to curb smuggling and build reserves to stabilise the plummeting kina?

The mining sector accounts for about 9% of GDP and the overall resources sector contributes about 26% of GDP. This will continue to rise with the current demand for cobalt, a by-product of the precipitate from Ramu Nickel.

DURRANT PATE
| Jamaica Observer

KINGSTON, JAMAICA - Speculation that mobile phone operator Digicel is considering selling the Papua New Guinea business considered the jewel in the financially troubled telecoms empire has sparked concern within PNG over Beijing's growing influence.

The Digicel conglomerate surprised many of its users in PNG by filing bankruptcy proceedings in May in Bermuda and the United States, where it owes billions of dollars to bond holders who invested in the company some years ago.

SCOTT WAIDE
| My Land, My Country

LAE - We have to get this right if we are to thrive in this country.

The quality of transport infrastructure – especially roads and bridges – determines the price of food.

Apart from consumption, this single factor influences the rate of supply and demand to a large extent.

EMMANUEL PENI
| Coordinator, Project Sepik

SEPIK RIVER – An historic customary declaration has been issued to the Papua New Guinea government by the spiritual guardians of the Sepik River, the customary clan leaders.

The Supreme Sukundimi Declaration calls for a complete ban on the proposed Frieda River mine, which would be the largest mine in PNG history.

LOGEA NAU
| PNG National Research Institute | Edited

PORT MORESBY - A pandemic has broad implications on the world economy and has differing impacts on the economies of countries around the world.

Evidence suggests that a pandemic or an epidemic may impact trade and affect international supply chains.

Chairman of the Angore landowners Hari John Akipe (centre) with the team at Ambua Lodge before heading to Undupi village for the signing ceremony. The Tari valley is in the background

ALEXANDER NARA

PORT MORESBY - It was a little past four o’clock that Sunday afternoon when we arrived at Ambua Lodge, nestled amongst the Doma Peaks near Tari town in Hela Province.

The light drizzle that seemed to have followed us from Mt Hagen had ceased and the gravel car park was wet and soft. Around it the trees were wreathed with thick leaves and green moss.

Road block at West Pomio in New Britain mounted by villagers opposing logging by Rimbunan Hijau

JOHN C CANNON
| Mongabay | Extract

Link here to the complete article by John Cannon

POMIO - Change. That's what Monica Yongol has seen in her 54 years.

In that time, the loggers and then the oil palm companies have moved into the remote corner of Papua New Guinea where she raised her family, altering the contours of the society she knew.

Porgera gold and silver mine (Barrick)

SIMON DAVIDSON

KOKOPO – The Porgera mine is a large gold and silver mining operation in Enga province, Papua New Guinea located at the head of the Porgera Valley at an altitude of about 2,500 meters. The region is noted for its high rainfall, landslides and frequent earthquakes.

The mine is operated by the Porgera Joint Venture (PJV) and began production in 1990. It is now owned by Barrick Gold Corporation of Canada and the Zijin Mining Group of China with local landowners having a small stake.

James Marape - over the last 12 months Papua New Guineans have witnessed the depth of his vision

RAMOI BIAK

WEWAK - Twelve months ago who would have predicted  the rise of a much under-rated James Marape as the eighth prime minister of Papua New Guinea putting an end to eight tumultuous years by Peter O’Neill and his Peoples National Congress Party.

Marape continues to intrigue and surprise us with the array of tools he is deploying from the Pandora’s box of politics.

Hela Governor Philip Undialu - "The international community will soon know who is telling the truth"

HON PHILIP AJA UNDIALU MP
| Governor of Hela Province | Edited

TARI – There was no need for the Papua New Guinea government to have any advance negotiations with Barrick before the decision not to renew the Porgera Joint Venture lease.

Any negotiation held prior to the decision would have seen as preemptive of the decision and would have been in breach of the Mining Act, which would have attracted legal implications.

AMY TORI
| Prague Post | Edited extract

PRAGUE –Founded by Dan Edmiston in August 2017, the Native Vanilla company brings top-quality vanilla products to market that are organically farmed and sustainably sourced from rural growers in Papua New Guinea.

Edmiston found himself back in PNG after a long absence from his childhood home when he identified a need to help micro-farmers get a fair price for their vanilla beans as well as the need to produce a high-quality dry-cured vanilla bean for global markets.

Beautiful Ambunti right on the Sepik River

ERIC SCHERING

KALAMAZOO, USA – Along with my wife Penny, I have served with Pacific Island Ministries in East Sepik Province between 1980 and 1985 and from 2005 until the present.

Pacific Island Ministries was founded in Ambunti, the largest town on the Sepik River, in 1977.

From the get–go a priority was to listen to the locals about what kind of help they wanted.

CHRIS OVERLAND

ADELAIDE - Neo-liberal capitalism has taken over our lives by stealth.

I date its rise from the realisation that ordinary citizens could be offered easy access to credit, whereby the perceived actuarial risk involved was largely mitigated by the sheer numbers of people who used credit cards and similar facilities.

Waile Creek, Porgera

CHRIS OVERLAND

ADELAIDE - Eric Schering has beautifully articulated the classic neo-liberal arguments about the defence of property rights and the necessity of the rule of law.

There is much of merit in these arguments but,  in this case, there are major problems as well.

The Barrick-Zijin joint venture gold and silver mine situated west of Porgera

ERIC SCHERING

KALAMAZOO, USA – In late April, on the advice of Papua New Guinea’s national executive council, prime minister James Marape declined the request of the Porgera Joint Venture to extend its mining lease by 20 years.

The government made it clear to the Barrick-Zijin syndicate that the PNG government would take control of the mine and it was time for the partners to come up with an exit plan.

PNG's rising debt (ANZ)

DAVID JAMES
| Business Advantage PNG | Edited extracts

PORT MORESBY - Economists are forecasting a recession in Papua New Guinea in 2020 as the country struggles to deal with the global crisis caused by the outbreak of the COVID-19 virus.

The ratings agency Standard & Poor’s has also downgraded the country’s debt.

Penny and  Eric Schering and friends. The Scherings split their time working with Pacific Island Ministries in PNG and the USA

ERIC SCHERING

KALAMAZOO, USA - Last week was a biggie for the Porgera Joint Venture (PJV) in Papua New Guinea’s Enga Province, one of the largest gold mines in the world.

A stir has been brewing about whether prime minister James Marape is justified in refusing PJV’s request for a 20 year lease extension.

DEK JOE SUM, MAHOLOPA LAVEIL
& STEPHEN HOWES
| DevPolicy Blog

CANBERRA - The key problem facing Papua New Guinea in formulating a response to Covid-19 has been well explained by the country’s Treasurer.

PNG’s government went into 2020 planning the biggest deficit it has ever run, some K4.6 billion in net borrowing. Now, with Covid-19, it faces a revenue hole estimated at K2 billion.

Porgera gold and silver mine

PAUL BARKER
| Business Advantage PNG

PORT MORESBY - There will be repercussions from the Papua New Guinea government’s decision not to renew the special mining lease on the Porgera gold mine.

The Porgera valley is a very complex place, with communities long vying for control. Anyone treading in it should do so lightly, with thorough consultation and knowledge of that situation and avoiding disruption.

DEK JOE SUM, MAHOLOPA LAVEIL
& STEPHEN HOWES
| DevPolicy Blog

CANBERRA - The Covid-19 pandemic could not have arrived at a worse time for Papua New Guinea.

In addition to its declining health indicators, years of mismanagement have significantly weakened the country’s economic fundamentals, depriving its government of the ammunition needed to combat a looming economic downturn.

How Rio Tinto left the once pristine Jaba River - now a toxic 40 km drain to the coast

KEITH JACKSON

NOOSA - The Human Rights Law Centre in Melbourne has said Rio Tinto Ltd should fund an investigation of health and safety issues and clean up the environmental mess from the Panguna copper and gold mine in the 20 years from 1970 to 1990.

It says the review would be a starting point for compensation talks and negotiations about rehabilitating the old minesite at Panguna and nearby waterways including the ruined Jaba River.

Street market - a large part of Papua New Guinea's daily trade and commerce relies on the informal economy

BUSA JEREMIAH WENOGO

PORT MORESBY - As the spread of coronavirus claims thousands of lives throughout the world it has also brought economic hardship to many countries.

Businesses and governments face a bleak future with economic activities shutting down and the movement of people becoming more restrictive.

In Papua New Guinea the government recently introduced a state of emergency after a foreign mine worker travelling to PNG’s second biggest city Lae tested positive for the virus.

The spread of coronoavirus seems to have spared PNG so far, but nevertheless the economy will suffer a big hit

SCOTT WAIDE
| EMTV | Extracts

LAE - Papua New Guinea may need to review its economic outlook for the medium term as global economies contend with the wide-ranging impacts of coronavirus.

While Papua New Guineans have been debating the preparedness of the health system, and bracing for a possible outbreak, the economic burden brought on by the global pandemic could further cripple efforts to contain the spread of the disease.

IAN LING-STUCKEY | Edited

PORT MORESBY - When Peter O’Neill came to power in 2012, Papua New Guinea’s debt was K8.5 billion. When he left in 2019, the figure was K37.6 billion.

So the debt was 4.4 times larger after only seven years. K29.1 billion larger. Not double, not triple, not even quadruple – an extraordinary 4.43 times larger.

PRIYANKA CHOUDHARY
| Rystad Energy | Edited

OSLO, NORWAY - The decision by the government of Papua New Guinea to halt talks with ExxonMobil about the state’s share of revenues from the planned P’nyang gas field development is set to delay two key liquefied natural gas projects that would double the country’s gas output.

The two projects, Total’s $13-14 billion Papua LNG investment and ExxonMobil’s subsequent PNG LNG Expansion plan, are located close to each other and could save the firms up to $3 billion in shared infrastructure synergies through a combined development.

IAN LING-STUCKEY

PORT MORESBY – I commend Barrick Niugini Limited for contributing K59.3 million to the national government as a forward payment of its taxes.

This is a second example of a major business being willing to pay its taxes early and follows on the example of British American Tobacco in bringing forward K250 million in excise collections.

Ian Ling-Stuckey (centre right) and staff celebrate six months of hard work rescuing the PNG economy, including the development of the forward pay tax concept

MARTYN NAMORONG

PORT MORESBY - Friday marked six months since Ian Ling-Stuckey came into office as Papua New Guinea’s Treasurer.

Ling-Stuckey has delivered an economic rescue plan for PNG which will be monitored by an independent umpire, the International Monetary Fund.

IMF and its staff will be making sure the PNG government keeps its promises to rescue Papua New Guineans from O'Neill's deep economic hole.

WILL OWEN
| LNG Industry

FARNHAM, UK - Reuters is reporting that Oil Search Ltd is working to revive talks between Exxon Mobil Corp and the Papua New Guinea government regarding a plan to double the country’s natural gas exports.

Oil Search’s new CEO, Keiran Wulff, has told Reuters that he hopes that negotiations could resume within weeks.

NEWS DESK
| PNG Advantage | Edited extracts

PORT MORESBY - Despite significant volatility, Papua New Guinea’s largest businesses remain optimistic about the year ahead.

That’s according to the results of the latest PNG 100 CEO Survey, released jointly by Business Advantage International and Westpac PNG, which feature for the first time the country’s inaugural Business Expectations Index.

Ian Ling-Stuckey - "O’Neill dragged us into a debt trap. His economic mismanagement increased PNG’s debt by 435%"

IAN LING-STUCKEY
Papua New Guinea Treasurer | Edited extracts

PORT MORESBY - Peter O’Neill does shame to his role as former prime minister by continuing to lie to the country about his economic legacy.

During the years of his autocratic rule, he produced fake budgets, fake national accounts and fake growth figures.

I had hoped that, when he was caught out for his fraudulent behaviour and deceptions through the due diligence exercise and confirmed by the independent International Monetary Fund, at least he might stop lying to the people of this nation.

Exxon’s conduct has been criticised by the PNG government as being “exploitative”

BAL KAMA
| The Interpreter | Lowy Institute

CANBERRA - The recent announcement of the Papua New Guinea government to cease all negotiations with one of the United States’ largest oil and gas companies, Exxon Mobil, over the P’nyang LNG project, a new gas field in PNG, has broader implications for the US and PNG.

At first glance, the decision against Exxon for allegedly acting in bad faith is part of a wider crackdown by the government of prime minister James Marape to ensure greater fairness in the resource sector.

Traditional green axes by Simeon Nikints (Peter Kinjap)

PETER S KINJAP

PORT MORESBY – For thousands of years before the first Australian patrol reached Mt Hagen in 1933, stones axes (known as ‘green axes’) were used daily in the highlands of Papua New Guinea, and were widely traded often in the context of ceremonial exchanges.

In more recent times, a group of ‘factories’ located in the Waghi and Jimi Valleys accounted for the bulk of production of green axes.

Eddie Tanago - "A public register of beneficial ownerships would make it much harder for corrupt politicians and bureaucrats to hide their crimes"

EDDIE TANAGO
| Act Now!

PORT MORESBY - The latest corruption scandal involving a government minister and a foreign oil company emphasises once again the need for the government to legislate on hidden or ‘beneficial’ company ownerships.

Allowing people to register a company without revealing who are the real owners or beneficiaries creates a massive information vacuum that enables corruption and tax evasion to happen right under our noses.

Eddie Tanago -  Even under Marape, the  government is still disenfranchising customary landowners and diluting rural resilience

EDDIE TANAGO
| Act Now!

PORT MORESBY - The Land Minister’s announcement of a new pilot project to further disenfranchise customary landowners is part of a misguided promotion of private sector greed over people’s need for income generation.

The Papua New Guinea government should be focused on empowering rural people to build resilient communities on their own land rather than serving the greed of foreign owned banks and big corporations.

RAYMOND SIGIMET

DAGUA - Papua New Guinea's current population growth rate is above 2%, the rate having gradually slowed from 3.1% since 2000. This trend is expected to continue over the next few years.

PNG's National Statistics Office reported after the 2011 census that the population had reached more than seven million.

Misima gold mine

TIM TREADGOLD
| Forbes | Extracts

PERTH - Investors with a taste for gold, and who hasn’t in the current climate, can thank one of the world’s great financial institutions, the Bank of England, for creating an opportunity to buy a slice of the proposed redevelopment of a once fabulous goldmine.

It was back in 1999 when Britain’s central bank made one of the worst-ever business decisions. It starting selling its gold reserves, eventually parting with 395 tons of gold over a three-year period at an average price of $252 an ounce — 460% less than today’s gold price of $1,554/oz.

Chey Scovell - "A number of manufacturers have had to put their expansion plans on hold"

CHEY SCOVELL
| Business Advantage PNG

PORT MORESBY - It is shaping up to be a difficult and frustrating year. Manufacturers, like anyone else, require people to be spending money to buy our goods and there is just not much money going around.

If you go to the supermarkets there is nobody in line and everyone has a small basket because they can’t afford to fill up a trolley. In the rental market there is a 40 to 50 per cent vacancy rate.

P'nyang gas field - Is PNG squeezing energy companies too hard when it should be fixing a leaking pipe?

IAN RITCHIE

PORT MORESBY - "A fair deal is not merely squeezing a large slice of ice cream out of our development partners and then losing most of it through a horribly broken and hopelessly leaking pipe," wrote David Kitchnoge in PNG Attitude yesterday.

A clear and pragmatic observation.