One of the best journalistic overviews LNG Watch has come across on the challenges the LNG presents to PNG - how telling it is that Exxon Mobil refused to be interviewed:
Riches May Not Help Papua New Guinea
by NORIMITSU ONISHI (New York Times, 25/10/10)
TARI, Papua New Guinea — A founding myth in the Southern Highlands of Papua New Guinea is said to have foretold the arrival of ExxonMobil, the American oil giant that is preparing to extract natural gas here and ship it overseas.
According to the myth, called Gigira Laitebo, an underground fire is kept alive by inhabitants poking sticks into the earth. Eventually, the fire “will light up the world,” said Peter O’Neill, the national government’s finance minister. “By development of the project and delivering to international markets, it’s one way of fulfilling the myth.”
But like all myths, this one is open to wide interpretation, as a group of men and women at a Roman Catholic parish here suggested before Sunday Mass recently.
“If foreigners come to our land, you give them food and water, but don’t give them the fire,” said John Hamule, 38, as the others nodded. “If you do, it will destroy this place.”
In 2014, ExxonMobil is scheduled to start shipping natural gas through a 450-mile pipeline, then on to Japan, China and other markets in East Asia. But the flood of revenue, which is expected to bring Papua New Guinea $30 billion over three decades and to more than double its gross domestic product, will force a country already beset by state corruption and bedeviled by a complex land tenure system to grapple with the kind of windfall that has paradoxically entrenched other poor, resource-rich nations in deeper poverty.
While the West’s richest companies are used to seeking natural resources in the world’s poorest corners, few places on earth seem as ill prepared as the Southern Highlands to rub shoulders with ExxonMobil. The most impoverished region in one of the world’s poorest countries, it went unexplored by Westerners until the 1930s. Believing that this rugged, mountainous region was uninhabited, the explorers were stunned to find at least one million people living here in one of the world’s most diverse areas, largely in small, distinct communities separated by different cultures, languages and nearly impassable terrain.
Constant tribal wars over land, women and pigs — the last being prized measures of wealth, used to pay for dowries and settle disputes — have grown deadlier in the past decade with the easy availability of high-powered rifles smuggled in from Indonesia, just to the west, which are exchanged for the marijuana grown here.
Mr. O’Neill says the Southern Highlands are too diverse, too fragmented, to develop the kind of widespread insurrection that exists in the Niger Delta of Nigeria.
But local leaders worry about the continuing inflow of guns into an area with almost no government presence, and no paved roads, electricity, running water, banks or post offices. They worry that the benefits of the gas project will fall short of expectations, begetting a generation of young men who will train their anger on ExxonMobil.
Already, in fact, angry landowners have forced ExxonMobil’s contractors to suspend work temporarily at several construction sites, and local businessmen bid for contracts with unconcealed threats.
“Any outside waste management company that is given the contract will not be allowed into Komo by force or whatever means,” said Robin Tuna, 34, whose company was bidding for just such a contract in Komo, an area south of here where ExxonMobil is building a large airfield.
And ExxonMobil faces the daunting prospect of dealing with Papua New Guinea’s distinctive form of land tenure, which grants control over 97 percent of the land to customary landowners, primarily indigenous people whose ownership rights to small plots are inherited. More than 60,000 people own land where gas will be either extracted or transported.
To get their agreement, the government invited 3,000 to a meeting last year to hammer out benefit-sharing agreements. The government intentionally held the conference on an island to ward off gate-crashers, though 2,000 uninvited landowners eventually flew over, said Anderson Agiru, the governor of Southern Highlands Province. The meeting, scheduled for seven days, lasted six weeks.
And still thousands, who remain unsatisfied, have streamed to the nation’s capital, Port Moresby, to try to get their cut.
“They tell us they are busy or to come back the next day,” said Jim Tatape, one of hundreds of angry landowners milling around recently in front of the Department of Commerce and Industry, waiting to see anybody inside.
“We don’t want to deal with government anymore,” added Mr. Tatape, who was seeking money to start a small, though vaguely defined, business. “ExxonMobil is the developer. We are the landowners. We should deal together.”
Officials at ExxonMobil declined to be interviewed for this article. In an e-mail, the company said it “seeks to create long-term economic and social benefits from its projects and presence.” Citing its ethics policy, the company wrote that it strived to “help developing nations to improve their systems as well as help support local business to develop proper governance systems.”
The picture here in the Southern Highlands is not completely bleak. With the start of several ExxonMobil-related construction projects in recent months, for instance, the police have returned after a long absence.
“It was a lawless place until last year,” said Joe Wija, 43, the town administrator at Komo, where police barracks and a new provincial government building are being constructed after the end of a long tribal war.
“The government is coming back now. When ExxonMobil came here, it was the light at the end of the tunnel.”
Here in Tari — the largest town closest to the gas fields but really just a series of squat buildings surrounding a recently fenced-off airstrip — a separate tribal war has given way to new businesses.
“No one from the outside dared to come to Tari two years ago,” said Peter Muli, 37, whose chicken restaurant, House-Kai, is now thriving.
One recent afternoon, Tari was swarming with villagers, most of them barefoot, who had descended from the surrounding hills, where they live in hamlets dotted with thatched huts. Here, they sold fruits, vegetables and coffee beans. Some men strutted around in traditional garb, wearing elaborate wigs and body paint, even as others, dressed in T-shirts and other hand-me-downs from Australia, competed fiercely at darts to win a can of Coke.
With gas exports a few years off, only a little money has begun flowing into the hands of the people here. But it has begun to worry the priests at the Catholic parish.
“You want to be optimistic but you have to be realistic,” said the Rev. Sam Driscoll, 78, a Capuchin Franciscan friar from West Virginia who has lived in Papua New Guinea for 50 years.
The money, the friars said, risked deepening existing problems like alcoholism, marijuana use and polygamy. “The people here are not ready for that kind of money,” said the Rev. Paul Patlo, a Papua New Guinean.
While conceding the danger of social disruptions, Papua New Guinea officials are adamant that the windfall will be used for development and not siphoned off by the well connected. Mr. O’Neill, the finance minister, said the government planned to channel the revenue into three sovereign wealth funds that would be overseen by a board of advisers, including foreigners, adding that the government would also be held accountable by the World Bank and other creditors.
But Michael McWalter, a former director of the petroleum division at the Department of Petroleum and Energy and a current adviser, said that corruption permeated the country’s political establishment and bureaucracy.
“Whether they will put the money into a revenue fund and steal it all in one go, I don’t know,” said Mr. McWalter, who is also a director of Transparency International here.
Father Patlo, 39, told his congregation at Hulia Parish here the biblical parable of the unjust steward, who misused money entrusted to him.
“The government and the company sit together and eat in the same place, so they must develop the country together,” he went on, but he also assigned responsibility to his listeners, exhorting them to spend their money on their children’s school fees and save any left over.
Earlier, he had held up a warning: a local village chief who had squandered a $120,000 windfall.
A short drive away, Hamon Matipe, the septuagenarian chief of Kili, confirmed that he had received that sum four months earlier. In details corroborated by the local authorities, Mr. Matipe explained that the provincial government had paid him for village land alongside the Southern Highlands’ one major road, where the government planned to build a police barracks.
His face adorned with red and white paint, a pair of industrial safety glasses perched incongruously on a head ornament from which large leaves stuck out, Mr. Matipe said he had given most of the money to his 10 wives. But he had used about $20,000 to buy 48 pigs, which he used as a dowry to obtain a 15-year-old bride from a faraway village, paying well above the going rate of 30 pigs. He and some 30 village men then celebrated by buying 15 cases of beer, costing about $800.
“All the money is now gone,” Mr. Matipe said. “But I’m very happy about the company, ExxonMobil. Before, I had nothing. But because of the money, I was able to buy pigs and get married again.”