What can transparency bring to Papua New Guinea?

This blog post was first published on Publish What You Pay's website on 9 April 2014.

It is the country with the most languages in the world, one of the highest numbers of different ethnic groups and also home to the world’s only poisonous bird. Papua New Guinea is rich in culture, rich in biodiversity and also happens to be very rich in natural resources.

It is rich in minerals, with important gold, copper, nickel, cobalt and silver deposits. While oil production is declining, it is progressively being replaced by natural gas production, most famously with the Papua New Guinea Liquefied Natural Gas Project run by a subsidiary of ExxonMobil. The country’s resource wealth could be a key component of a development drive, in a country where a third of citizens live in extreme poverty.

Discussions for the country to join the EITI have been underway since 2006. Finally, Papua New Guinea was admitted as a candidate country in March 2014. Represented with seven seats on the national EITI steering committee, civil society welcomes this move towards transparency in a sector that accounts for 70% of export earnings.

Civil society in Papua New Guinea hopes that the EITI will bring greater accountability to local communities affected by extraction. Light will indeed be shed not only on the revenues collected by the central government but also on the revenues collected by provincial authorities and in particular by landowners associations. 97% of landed areas in the country are under customary tenure, which means the land is owned by indigenous populations and ruled according to their customs. This means that landowners are entitled to a part of the revenues generated by extractiong. However, these revenues are collected on their behalf by landowner associations and the process of collection and disbursement has been under little scrutiny - until now.

“In mining, the provincial government has 2.5% equity and the landowners have 2.5% as well, they are a sort of shareholder. In the oil and gas sector, the landowners receive 2% equity. One of the major concerns in extractive areas is that these funds are being misused by the landowners’ executives” says Patrick Yepe Lombaia, who is the founding director of PNG Mining Watch.

Jerry Baguita, operations manager at the national chapter of Transparency International, further explains that “The money is paid to certain executives of landowner groups but, those landowner groups, the constituent themselves, don’t know where the money is. Because, right now, if you go to some of those communities that supposedly receive a lot of money, they have nothing to show for it. My organisation wants to ensure that there is transparency of the revenues that go to the landowners and then how the provincial governments spend the money they receive from extractive industries payments, to make sure these benefit the larger population. It’s all about empowering people with information to enable them to question the leaders, in terms of how the money has been spent at every government level. So by using the EITI as a vehicle, we can open up a lot more discussions.”

An important challenge faced by civil society in Papua New Guinea will be to reach out to local communities in a country where 80% of the population lives in remote, rural areas, with no radio or TV coverage and only irregular access to newspapers. Despite the modest size of the country, which is comparable to the UK, PNG has over 800 official nations and as many languages. The geographical disposition of PNG and the lack of reliable infrastructure make travelling “a logistics nightmare” as local activists comment.

Nevertheless, civil society is hopeful that the EITI will yield useful information to improve the governance of the country’s natural resources.

Asmara Klein is the EITI Coordinator at Publish What You Pay.