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


30 June-5 July 2014

Map of Papua New Guinea

http://www.google.com.au/url?sa=i&source=images&cd=&cad=rja&docid=u-bFLNLxhywqFM&tbnid=kTVDLEyfrygwrM:&ved=0CAgQjRwwAA&url=http://islandculturearchivalsupport.wordpress.com/2010/09/21/the-melanesian-way-inc/&ei=6-U1UcCRNIn0lAWanIDICQ&psig=AFQjCNEh4eey27vWokCKwMlvhCB7zz5RYA&ust=1362573163907583

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Resources of Papua New Guinea

Figure 3 – Map of PNG’s Petroleum Projects


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Resources of Papua New Guinea (continued…)

Figure 4 – Map of PNG Mining Projects


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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


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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


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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:


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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.…)


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Case Studies (Cont….)


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(1) Kutubu Oil Project (cont….)

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


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• Community Engagement

• Investing in successful relationships;

• Building Deep Cultural Understanding;

• Open And Collaborative Development Efforts;


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(2). Oil Search Limited

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• Cultural expectations;

• Face of Oil Search Limited;

• Human Rights

(2). Oil Search Limited (cont.….)


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Community Engagement:

Village Liaison Officer (VLOs)


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Case Studies: (Cont.….)

(2). Oil Search Limited (Cont…)

Stakeholder management


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Health and Community


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


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(3). Papua New Guinea Sustainable Development Program:

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Mainohana School Clinic Kairuku, Central Province.

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

Case Studies (cont.….)


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Daru Airport Project, Western Province

(3). Papua New Guinea Sustainable Development Program:

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Community Climate Change And Reforestation Project, Kompri, Eastern Highlands

(3). Papua New Guinea Sustainable Development Program

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HIV & AIDS Community Conversation,Kefamo, Eastern Highlands Province


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Case Studies (cont...)


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Rural Electrification, Western Province.


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Daru Water Supply Inspection, Western Province


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)


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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


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Challenges For Communities (cont.…)

• Governance And Mismanagement Issues;

• Instability Within Government;

• Inconsistency In Government Policy On Mineral And Hydrocarbon Industry


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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


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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


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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;


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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 -


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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).


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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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http://www.abc.net.au/news/2014-04-03/liquid-natural-gas-port-moresby-papua-new-guinea/5363998

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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…)


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THANK YOU


30 June-5 July 2014

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

Documents

map of papua new guinea

png kutubu oil

economic development

kutubu landowners

western introduced law

challenges of benefit

western province

benefit sharing chart