topic: hitelai d polume-kiele iucn conference, tarragona, spain 30 june-5 july 2014 1 “promises...

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Topic:

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

“Promises And Undertaking”: Challenges Of Benefit Sharing In The PNG Kutubu Oil And Gas Development Licence Area

Map of PNG’s Petroleum Projects

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• Background:• Resources of PNG• Current arrangements for benefit sharing

• Case Studies: • Kutubu Oil Project Landowners• Oil Search Limited• Papua New Guinea Sustainable Development

Program

• Challenges for communities • Governance and Institutional Frameworks• Recommendations

Overview

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Background

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

Map of Papua New Guinea

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Resources of Papua New Guinea

Figure 3 – Map of PNG’s Petroleum Projects

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Resources of Papua New Guinea (continued…)

Figure 4 – Map of PNG Mining Projects

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Current Arrangement for Benefit Sharing

Resource Ownership (Customary Law)

Customary Land

Landowning Clans

Customary Land

Communal ownership

Compensation

Under Lease to Developer from State

Developer has full access rights for life of project

State Acquires Land under Western Law (Land Act)

Compensation

Lease to Developer

Developer has title and full access for life of project

Chart 1: Legal Framework: Customary Law

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Resource Ownership (Western Law)

Benefits

State

Resource Rent Taxes Equity (Option to acquire 30%)

Benefits to be negotiated with State

Provincial Governments Landowners

Equity

Royalty

Special Support Grants

Equity

Royalty

Compensation

Developer

Current Arrangement for Benefit Sharing (Cont.…)

Chart 2 – Legal Framework: Western (Introduced) Law – Oil and Gas Act 1998

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Case Studies

Three principles used to share benefits:

• Land area covered by Petroleum Development Licence (PDL) and Pipeline Licence(PL);

• Equal proportion of benefit flows amongst clan members;

• Size of population

Landowners: Fasu, Lower and Upper Foi

• Fasu own 90% of land

• Foi own 10% of land

(1) Kutubu Oil Project:

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Case studies

Current Equity Benefit Distributions:

• Fasu landowners (10%);• Lower and Upper Foi Landowners

(3%);• Southern Highlands (Hela) Provincial

Government and Local-level Governments (12%);

(1). Kutubu Landowners (cont.…)

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Case Studies (Cont….)

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

(1) Kutubu Oil Project (cont….)

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Case Studies:(1). Kutubu Oil Project (Cont.…)

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Case Studies (Cont….)

• Community Engagement

• Investing in successful relationships;

• Building Deep Cultural Understanding;

• Open And Collaborative Development Efforts;

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

(2). Oil Search Limited

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Case Studies (Cont….)

• Cultural expectations;

• Face of Oil Search Limited;

• Human Rights

(2). Oil Search Limited (cont.….)

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30 June-5 July 2014

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Community Engagement:

Village Liaison Officer (VLOs)

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

(2). Oil Search Limited (cont.….)

Case Studies (Cont….)

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Case Studies: (Cont.….)

(2). Oil Search Limited (Cont…)

Stakeholder management

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Case Studies: (Cont.….)

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

Health and Community

(2). Oil Search Limited (cont.….)

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Case Studies: (Cont.….)

Trust Fund: Funding Social And Economic Development Projects Particularly Along The Fly River Area And Other Parts Of PNG

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

(3). Papua New Guinea Sustainable Development Program:

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Case Studies: (Cont.….)

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

Mainohana School Clinic Kairuku, Central Province.

(3). Papua New Guinea Sustainable Development Program (Cont….)

Case Studies (cont.….)

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30 June-5 July 2014 19

Daru Airport Project, Western Province

(3). Papua New Guinea Sustainable Development Program:

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Case Studies (cont.….)

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

Community Climate Change And Reforestation Project, Kompri, Eastern Highlands

(3). Papua New Guinea Sustainable Development Program

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Case Studies (cont.….)

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

HIV & AIDS Community Conversation,Kefamo, Eastern Highlands Province

(3). Papua New Guinea Sustainable Development Program

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Case Studies (cont...)

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

Rural Electrification, Western Province.

(3). Papua New Guinea Sustainable Development Program

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Case Studies (Cont….)

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

Daru Water Supply Inspection, Western Province

(3). Papua New Guinea Sustainable Development Program

Challenges For CommunitiesThe Equity Sharing Arrangement Has Served As A Catalyst For Conflict:

• Tussle Over Decision-making Involving Intra-clan Arguments Over Control Of Clan Resources;

• Disputes over Landownership Rights And Entitlements To Benefits And Equity ;

• Increase In Number Of Registered Incorporated Land Groups (ILGs)

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

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Challenges For Communities (cont...)

• Expectations Of Landowners;

• Consultation, Collaboration And Cooperation Between Government, Investor And Landowner (Important);

• Empower The Landowners To Invest Their Benefits

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

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Challenges For Communities (cont.…)

• Governance And Mismanagement Issues;

• Instability Within Government;

• Inconsistency In Government Policy On Mineral And Hydrocarbon Industry

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Challenges For Communities (cont.…)

In An Environment Such As These, It Is The Operator Or Developers Who Are Mediating Relationships And Conflicts Involving Landowners Due To The Absence Of The State On The Ground

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

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Governance And Institutional Frameworks

• Consultation, Collaboration And Cooperation Between Government, Investor And Landowner – Important;

• Empower The Landowners To Invest Their Benefits;

• Eliminate Any Issues Of Governance And Avoid Conflict Of Interests Issues

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Governance And Institutional Frameworks• Review Of The Current Legislation (Flow Of Benefits

Such As Royalties, Development Grants, And Project Funding);

• Transform The Delivery Of Essential Services;

• Ownership Structure - In Project Equity And Ensures A Sense Of Project Control And Ownership By The Clan;

• Processes Of The Methodology Of Identification Of Beneficiaries And Distribution Of Benefits;

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Governance And Institutional Frameworks (Cont.…)• Participation - Landowners Want More Influence

On The Decision-making Process That Shapes The Aspects Of The Equity Not Just The Distribution Of Benefits;

• Financial Risks Associated With The Funding;

• Implementation Of Government Policies Regarding Natural Resources -

Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain

30 June-5 July 2014

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RecommendationsReview:

• Institutional Frameworks - (Methodology Of Identification Of Landowners/Beneficiaries)

• Participation By Landowners;

• Processes Of Responsibilities - Transparent And Equitable Distribution Of Benefits To All Affected Landowners And PNG Citizens Generally).

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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Wealth and Benefit Distribution (Kutubu Landowners)

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Rice Farming (Kutubu)

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Mbuke Island Agricultural Technologies Project, Manus Island

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Papua New Guinea LNG

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‘Meaningful Accountability’:

• Eliminate Conflicts Of Interests And Impediments;

• Empower The Landowners To Invest Their Benefits And Direct These Benefits Towards The Improvement Of Their Lives.

Recommendations (Continued…)

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014

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THANK YOU

Hitelai D Polume-KieleIUCN Conference, Tarragona, Spain

30 June-5 July 2014