ABC Radio - Pacific Beat 31 May 2012
Landowners and the the company involved in Papua New Guinea's biggest gas project want the PNG government formed after elections next month, to do a much better job of delivering on its promises.
The 16 Billion dollar ExxonMobil-led LNG project is PNG's biggest resources development yet and is driving the country's strong economic growth.
But government failures are causing serious discontent with both the landowners and project management.
Presenter: Jemima Garrett.
Speakers: Peter Graham, Managing Director of Esso Highlands, the ExxonMobil subsidiary managing the PNG LNG Project
Libe Parindali, Chairman of Hides Gas Development Company, the main landowner company working for the PNG LNG project
GARRETT: Most of the PNG LNG project is located in remote Hela province in the PNG Highlands.
Many people have no electricity, they face a long walk to the nearest road and have poor access to business opportunities, schools and hospitals.
Under key Benefits Sharing Agreements the PNG government promised help with business development and infrastructure.
Libe Parindali, is Chairman of Hides Gas Development Company, the main landowner company working for the PNG LNG project.
PARINDALI: We are struggling. We are not seeing that support from the government. Government is not there in the project. Government has totally lost the plot. They are not in control. Company is becoming the defacto government on the ground.
GARRETT: So what would you like to see the Papua New Guniea government do?
PARINDALI: We would like to see the Papua New Guinea government step up and take ownership of the project by having their presence on the ground and attending to issues. They've agreed to do certain things, infrastructure, health, education and they are not doing it!
GARRETT: Peter Graham, is Managing Director of Esso Highlands, the ExxonMobil subsidiary which manages the PNG LNG Project.
GRAHAM: The way the business development grants was handled was unfortunate, to say the least. One, it was very slow in coming. Two, it arguably didn't get translated into business development. It turned out to be cash into a number of people's pockets which didn't serve the purpose of building business so, yes, that was truly disappointing. Now we have the infrastructure development grants which are the 120 million kina per annum for 10 years. We are working our way through, ..or the government is working its way through how to disperse those monies in a way that does deliver tangible infrastructure on the ground. We hope to see that in fact happen.
GARRETT: Many of the payments for business development grants were handed out at government offices in Waigani in the PNG capital, hundreds of kilometres away from where the landowners live.
Libe Parindali's criticism of the process is scathing.
PARINDALI: The government has raised unnecessary expectations. Everybody turns up in Waigani putting their hands out, saying I am a landowner. They write the cheques, millions of kina worth of cheques, to each and everyone who turns up and the real people, the landowners on the ground in Hides, in Kutubu, in Gobe, in Moran in Juha, in Angore, have missed out! And that is a very bad trend and we have set a very bad precedent!
GARRETT: Landowner company Chairman, Libe Parindali.
The PNG Highlands is volatile.
Police have expressed concern about a growing trade in high powered weapons and in the past year various landowner groups have warned the area has the potential to become another Bougainville, referring to the civil war which left 20,000 people dead.
Esso Highlands Managing Director, Peter Graham wants action from the new government that will be formed after next month's elections.
GRAHAM: They need to set in place some very simple processes with a very clear rule that money is not handed out in cash, up front. If that single thing was changed we could see a transformation of the way government delivers those infrastructure projects. While ever money is handed out in cash it is unlikely, in my view, that we will see good use of that money on the ground. It needs to be released against specific projects and with appropriate controls on the delivery of the project.
GARRETT:Does unhappiness with the way the government is handling its part in the LNG project have the potential to affect the project itself?
GRAHAM: It does from time to time where we find ourselves as the point of leverage that the landowners resort to to apply pressure to government. I think, for the most part, the landowners understand that they're affecting ultimately themselves, as well as the project, because they are stakeholders in the project. They've got equity in the project but if they get sufficiently anxious that they are not getting their message through then there have been occasions when they've used us in that way and, hopefully, we don't see that continuing. The government, I think, has been trying to respond appropriately and get people into the field. I think it is critical that they do that, they get agencies into the field to respond more quickly.
GARRETT: Libe Parindali, Chairman of the Hides Gas Development company, also has advice for the post-election government.
PARINDALI: The message for the new government ..what I'd like to see is a Government Minister that has heart for the project, heart for the people, that wants to be with the project, be with the people, must be appointed to be Minister. Because right now, as we see it, the department of Petroleum and Energy and the Minister of Petroleum, they are not functioning. They are a dysfunctional Ministry and dysfunctional Department. That is why we are at a loss. That's why the oil and gas industry is in total chaos in Papua New Guinea.
GARRETT: This issue with with the government's performance has been going on for some time. What potential does it have to derail the whole PNG LNG project if it keeps going?
PARINDALI: The potential it has by the government not taking ownership is that the landowners become careless, reckless, irresponsible and they will take on the project! We need to be very careful!